EXHIBIT 10.2

 

 

 

September 21, 2012

 

 

 

RWT Holdings, Inc.

One Belvedere Place

Mill Valley, California 94941

 

Redwood Trust, Inc.

One Belvedere Place

Mill Valley, California 94941

 

Ladies and Gentlemen:

 

By this letter agreement (this “Letter Agreement”), we are pleased to confirm
the terms and conditions under which RBS Securities, Inc. (together with our
subsidiaries and affiliates, “RBS”) will act as sole lead underwriter for RWT
Holdings, Inc. (the “Company”), a wholly-owned subsidiary of Redwood Trust, Inc.
(“Redwood Trust,” and together with the Company and their subsidiaries and
affiliates, “Redwood”) in connection with the proposed offering and sale
(together, the “Offering”) of certain classes of mortgage-backed securities (the
“2012-5 Securities”) issued by Sequoia Mortgage Trust 2012-5 (the “Issuing
Entity” and such issuance, the “Transaction”). The Issuing Entity is expected to
issue (i) one or more classes of senior certificates entitled to payments of
both interest and principal that will be rated AAA or its equivalent by two of
Moody’s Investors Service, Inc., Fitch Ratings, Inc. or Standard &  Poor’s
Ratings Services, a Standard & Poor’s Financial Services LLC business (each, a
“Rating Agency” and such 2012-5 Securities, “AAA P&I Senior Securities”), (ii)
one or more classes of senior certificates entitled to interest-only payments
that will be rated AAA or its equivalent by two of the Rating Agencies (“AAA IO
Senior Securities”), (iii) one or more classes of subordinate certificates (the
“Subordinate Securities”) and (iv) one or more classes of REMIC residual
certificates (the “Residual Securities”).

 

1.                  Mortgage Loans. The 2012-5 Securities are expected to be
secured by a pool of mortgage loans (the “Mortgage Loans”) described under
“Description of the Mortgage Loans” as of the Statistical Calculation Date, each
as specified on Annex A. All of the Mortgage Loans are, or prior to the closing
of the Transaction will be, owned by Redwood. A loan tape (the “Initial Tape”)
containing information regarding the Mortgage Loans was furnished by Redwood to
RBS on September 18, 2012, and the final balance constituting the Mortgage Loans
will be subject to a Loan Balance Permitted Variance specified on Annex A from
the balance shown on the Initial Tape.

 

 

 

 

RWT Holdings, Inc.

Redwood Trust, Inc.

September 21, 2012

Page 2

 

 

Redwood may substitute up to an aggregate of the Permitted Substitution
Percentage specified on Annex A hereto (calculated by balance) of the Mortgage
Loans on the Initial Tape so long as (a) other than the percentage of non-retail
originated loans, there are no material differences between the attributes of
the Mortgage Loans after substitution and the attributes of the Mortgage Loans
reflected in Initial Tape that would materially change the AAA P&I Senior
Securities credit enhancement level specified in Section 3 and (b) the Permitted
Variance is maintained with respect to the Mortgage Loans after taking account
of the related substitutions.

 

At its sole expense, RBS shall conduct a customary underwriter’s due diligence
review of all of the Mortgage Loans and shall have the right, in its reasonable
discretion, to have certain loans removed from the final pool of Mortgage Loans
based on its due diligence results.

 

2.                  Structure of the Transaction; Documentation. The Transaction
shall be structured in a manner substantially similar in all material respects
to previous securitization transactions of fixed rate pools executed by Redwood
under the “Sequoia Mortgage Trust” program (the “SEMT Program”) including, but
not limited to, the same “shifting interest” provisions and mechanics in the
securitization transaction in the SEMT Program that will close in September 2012
(“SEMT 2012-4”) with respect to the fixed rate pool included therein. In
connection therewith, Redwood (in such capacity, the “Seller”) shall transfer
the Mortgage Loans to either Sequoia Mortgage Funding Corporation or Sequoia
Residential Funding, Inc., which shall act as depositor (the “Depositor”) for
the Transaction. The transaction documents governing (i) the sale of the
Mortgage Loans from the Seller to the Depositor, (ii) the sale of the Mortgage
Loans from the Depositor to the Issuing Entity or the trustee (the “Trustee”) of
the Issuing Entity and the issuance and terms of the 2012-5 Securities, (iii)
the servicing and administration of the Mortgage Loans by each servicer (each, a
Servicer”) and supervision thereof by the master servicer (the “Master
Servicer”), (iv) the custody of the Mortgage Loan files by the custodian (the
“Custodian”) and (v) the assignment of representations and warranties (together,
the “Basic Transaction Documents”), shall be substantially similar in all
material respects to the transaction documents executed in connection with the
SEMT 2012-4 transaction.

 

3.                  Ratings. It is a condition to the consummation of the
Transaction that at least two Rating Agencies selected by Redwood (the “Initial
Rating Agencies”) issue a AAA or equivalent rating in respect of the AAA P&I
Senior Securities. The fees of the Initial Rating Agencies shall be paid in
accordance with Section 8 hereof. Notwithstanding any Rating Agency feedback in
respect of an AAA or equivalent rating, the Initial Credit Enhancement for the
AAA P&I Senior Securities shall be specified on Annex A.

 

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RWT Holdings, Inc.

Redwood Trust, Inc.

September 21, 2012

Page 3

 

 

4.                  Underwriting Arrangement. RBS shall act as sole lead
underwriter (the “Underwriter”) for the Offering of each class of AAA P&I Senior
Securities. RBS will have the option, in its sole discretion, to strip off of
the AAA P&I Senior Securities an interest only certificate, which will have the
same interest priority as the AAA P&I Senior Securities and which may be rated
AAA or its equivalent by two Rating Agencies (the “Underwritten AAA IO Senior
Securities,” and together with the AAA P&I Senior Securities, the “Underwritten
Senior Securities”); provided, that the aggregate interest on the Underwritten
Senior Securities does not exceed the Underwritten Senior Securities Interest
Rate specified in Annex A. Promptly after execution of this Letter Agreement,
RBS and Redwood shall cooperate and work in good faith to negotiate an
underwriting agreement (when executed and delivered by the parties, the
“Underwriting Agreement”) in respect of the Underwritten Senior Securities
substantially similar in all material respects to the underwriting agreement
executed in connection with the SEMT 2012-4 transaction, a form of which is
attached as Exhibit A hereto. Subject to Section 9 hereof in respect of an
adjustment to the AAA Purchase Price Percentage for certain delays in the
closing of the Transaction, it is expected that RBS shall purchase Underwritten
Senior Securities in an aggregate principal amount equal to the Underwritten
Senior Securities Balance specified on Annex A, subject to the Underwritten
Senior Securities Permitted Variance specified on Annex A, for a purchase price
equal to the product of (i) the AAA Purchase Price Percentage specified on Annex
A and (ii) the Underwritten Senior Securities Balance as of the date of the
closing of the Transaction (the “Closing Date”); provided, that at Redwood’s
sole option, a variance of greater than the positive Underwritten Senior
Securities Permitted Variance in the principal amount of the AAA P&I Senior
Securities shall be permitted solely to the extent that Redwood purchases the
AAA P&I Senior Securities in excess of such variance. The Underwritten Senior
Securities Interest Rate on the AAA P&I Senior Securities (without taking into
account any Underwritten AAA IO Senior Securities) shall be specified on Annex
A. RBS shall be entitled to receive the additional fees or discounts from
Redwood in respect of the Underwritten Senior Securities as described under
“Additional Fees or Discounts” specified on Annex A.

 

5.                  Retention of Certain 2012-5 Securities by Redwood. Redwood
shall initially retain (i) the AAA IO Senior Securities that are not
Underwritten AAA IO Senior Securities, (ii) the Subordinate Securities and (iii)
the Residual Securities (the “Redwood Retained Securities”) issued by the
Issuing Entity.

 

6.                  Underwriting Fee for Subordinate Securities. In the event
that Redwood decides to offer any of the Subordinate Securities under the
Underwriting Agreement (such Subordinate Securities, the “Underwritten
Subordinate Securities,” and together with the Underwritten Senior Securities,
the “Underwritten Securities”), RBS shall receive an underwriting fee calculated
as the product of (i) the Subordinate Securities Underwriting Fee Percentage
specified on Annex A and (ii) the unpaid principal balance of Underwritten
Subordinate Securities as of the Closing Date (the “Subordinate Securities
Underwriting Fee”).

 

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RWT Holdings, Inc.

Redwood Trust, Inc.

September 21, 2012

Page 4

 

 

7.                  Offering Documents. In connection with the Offering and as
described in greater particularity in the Underwriting Agreement, Redwood shall
prepare (i) a preliminary prospectus supplement and prospectus, (ii) a free
writing prospectus relating to the ratings of each class of 2012-5 Securities
offered in the Offering and (iii) a final prospectus supplement and prospectus
(together, the “Offering Documents”). The Offering Documents shall contain
disclosures regarding, but not limited to, (i) the characteristics of the
Mortgage Loans, (ii) the terms of the 2012-5 Securities and yield considerations
with respect thereto, (iii) the Seller, the Depositor, Redwood Trust, the
Company, the Trustee, the Issuing Entity, the Servicers, the Custodian, the
Master Servicer and the Underwriter, and any material legal proceedings with
respect to each such entity and the compensation arrangements (if any) for each
such entity, (iv) the tax status, ERISA eligibility and legal investment
considerations in respect of the 2012-5 Securities, (v) the material provisions
of the Basic Transaction Documents and (vi) the pre-offering review of the
Mortgage Loans, in each case substantially similar in nature to the disclosures
included in the offering materials for the SEMT 2012-4 transaction. The Offering
Documents shall be subject to the approval of RBS in its commercially reasonable
discretion. In connection with the Offering and as described in greater
particularity in the Underwriting Agreement, RBS shall (a) prepare the term
sheet and (b) generate all collateral and yield tables, in each case based on
information provided to RBS by Redwood. In addition, RBS shall obtain comfort
letters from the hired accounting firm in respect of the documents and/or
information specified in (a) and (b), which shall be addressed to both RBS and
Redwood. The Underwriting Agreement shall govern any required indemnification by
RBS or Redwood in respect of the Offering Documents prepared by Redwood and the
documents and/or information specified in (a) and (b) prepared by RBS and will
be substantially similar in all material respects to the indemnification
provisions included in the SEMT 2012-4 transaction.

 

8.                  Payment of Certain Expenses.

 

(a) The payment of certain expenses in respect of the Transaction shall be as
described under “Expense Allocation” on Annex A.

 

(b) In the event that an unforeseen and unavoidable circumstance arises that RBS
and Redwood mutually agree would prevent the completion of the Transaction, RBS
and Redwood shall execute the Pair-off Payment specified on Annex A. If the
calculation results in a negative amount, Redwood shall make the Pair-off
Payment to RBS. If the calculation results in a positive amount, RBS shall make
the Pair-off Payment to Redwood

 

9.                  Closing of the Transaction; Delay Penalty. RBS and Redwood
shall make all commercially reasonable efforts to close the Transaction on the
Targeted Closing Date specified on Annex A. If the Transaction does not close on
the Targeted Closing Date, RBS and Redwood shall make all commercially
reasonable efforts to close the Transaction as soon as practicable thereafter
but not later than the Latest Permitted Closing Date specified on Annex A.

 

To the extent that the Transaction does not close on the Targeted Closing Date
but closes on or before the Latest Permitted Closing Date and the failure to
close on the Targeted Closing Date is the result of a delay of or caused by
Redwood or Rating Agencies in connection with any Offering Document or the
Underwriting Agreement, the AAA Purchase Price Percentage shall be reduced by
the Delay Penalty Percentage specified on Annex A.

 

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RWT Holdings, Inc.

Redwood Trust, Inc.

September 21, 2012

Page 5

 

 

10.              Other.

 

(a) RBS’ participation in the Transaction and the Offering shall be subject to
the receipt by RBS of all internal approvals.

 

(b) Redwood (i) shall make available to RBS marketing materials substantially
similar to the marketing materials used for SEMT 2012-4 transaction; (ii) at the
request of RBS, provide such information and documents as may be reasonably
requested in order to enable RBS to market the Underwritten Securities and carry
out the engagement contemplated by this Letter Agreement and the Underwriting
Agreement; and (iii) assist RBS in carrying out its duties, functions and
responsibilities pursuant hereto and provide reasonable access to the
appropriate senior officers, management, accountants, legal counsel and other
parties and facilities.

 

(c) In connection with the Transaction, Redwood has contracted a diligence firm
to perform a diligence review of the Mortgage Loans. Redwood agrees to make
available the loan-level files and loan-level diligence results of such firm to
RBS, in order to enable RBS to conduct and complete its customary due diligence
review of the Mortgage Loans. Redwood recognizes and confirms that RBS will be
using information in reports and other information provided by others,
including, without limitation, information provided by or on behalf of Redwood
and the diligence firm contracted by Redwood, and that RBS does not assume
responsibility for and may rely, without independent verification, on the
accuracy and completeness of any such information.

 

(d) In connection with the structuring of the Offering and engaging in the
Transaction, Redwood also agrees to provide RBS with (i) prompt notice of any
material development affecting Redwood or the occurrence of any event or other
change known to Redwood and relating to Redwood that could affect the
Transaction or the Offering (including any marketing materials or Offering
Documents) and (ii) any public financial reports or such other information
concerning the business and financial condition of Redwood as RBS may from time
to time reasonably request.

 

(e) Redwood agrees that it has not and, unless Redwood and RBS shall mutually
agree in writing, Redwood agrees that it will not engage any other person to act
as a structurer, arranger, advisor, sole lead underwriter or placement agent in
the Transaction for a period beginning on the date of this Letter Agreement and
ending upon the termination of this Letter Agreement.

 

(f) The terms of this Letter Agreement shall be subject to renegotiation by
mutual consent of Redwood and RBS. Any changes to the contents of Annex A as a
result of such renegotiation shall be reflected in a revised Annex A and
attached hereto in substitution of any prior version of Annex A.

 

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RWT Holdings, Inc.

Redwood Trust, Inc.

September 21, 2012

Page 6

 

 

11.              Confidentiality. Redwood agrees that any documents or
information received from RBS, its affiliates or advisors in connection with
this Letter Agreement, the Underwriting Agreement and the transactions
contemplated herein and therein may contain information that has been developed
by RBS on a proprietary basis. Redwood agrees to treat confidentially all such
information received hereunder and under the Underwriting Agreement until one
year from the date of termination hereof; provided, that nothing herein shall
prevent Redwood from disclosing any such information: (i) to purchasers or
prospective purchasers of the Underwritten Securities to the extent such
information is material to an investment decision, (ii) to any Rating Agency in
connection with the Transaction, (iii) pursuant to the order of any court or
administrative agency or in any pending legal or administrative proceeding, or
to defend any claim in any such proceeding, (iv) as required by law or
regulation or upon the request or demand of any regulatory authority having
jurisdiction over Redwood or any of its affiliates (including any filings
related to or regarding this Agreement so long as Redwood has given prior
written notice to and received the prior written consent of RBS to any such
filing), (v) to the extent that such information becomes publicly available
other than by reason of disclosure by Redwood or was or becomes available to
Redwood or its affiliates from a source which is not known by Redwood to be
subject to a confidentiality obligation with respect thereto, or (vi) to
Redwood’s affiliates and its and their respective employees, legal counsel,
independent auditors and other experts or agents who need to know such
information in connection with the Offering, the Transaction or any other
services provided by Redwood or its affiliates to RBS and its affiliates,
provided (a) that such persons are made aware of the proprietary nature of such
information and (b) that Redwood shall be responsible for any breach of this
provision by such persons. Redwood understands that portions of the non-public
information may be subject to the Gramm-Leach-Bliley Act of 1999 (the “GLB”) and
other applicable privacy laws and regulations and agrees to maintain such
information as required by the GLB and such other applicable privacy laws and
regulations for financial institutions notwithstanding the proviso to this
paragraph (other than clauses (ii), and (iii), (iv) and (v) of such proviso) or
any termination of this Letter Agreement.

 

RBS agrees to treat confidentially all non-public information provided to it by
or on behalf of Redwood hereunder until one year from the date of termination
hereof; provided, that nothing herein shall prevent RBS from disclosing any such
information: (i) to purchasers or prospective purchasers of the Underwritten
Securities to the extent such information is material to an investment decision,
(ii) pursuant to the order of any court or administrative agency or in any
pending legal or administrative proceeding, or to defend any claim in any such
proceeding, (iii) as required by law or regulation or upon the request or demand
of any regulatory authority having jurisdiction over RBS or any of its
affiliates, (iv) to the extent that such information becomes publicly available
other than by reason of disclosure by RBS or was or becomes available to RBS or
its affiliates from a source which is not known by RBS to be subject to a
confidentiality obligation with respect thereto, or (v) to affiliates of RBS and
its and their respective employees, legal counsel, independent auditors and
other experts or agents who need to know such information in connection with the
Offering, the Transaction or any other services provided by RBS or its
affiliates to the Redwood and its affiliates, provided that such persons are
made aware of the proprietary nature of such information. RBS understands that
portions of the non-public information may be subject to the GLB and other
applicable privacy laws and regulations and agrees to maintain such information
as required by the GLB and such other applicable privacy laws and regulations
for financial institutions notwithstanding the proviso to this paragraph (other
than clauses (ii), (iii) and (v) of such proviso) or any termination of this
Letter Agreement.

 

Notwithstanding any other provision in this Letter Agreement, in connection with
Section 1.6011-4 of the Treasury Regulations, the parties hereby agree that each
party (and each employee, representative, or other agent of such party) may
disclose to any and all persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the transaction and all materials of any
kind (including opinions or other tax analyses) that are provided to such party
relating to such U.S. tax treatment and U.S. tax structure, other than any
information for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws.

 

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RWT Holdings, Inc.

Redwood Trust, Inc.

September 21, 2012

Page 7

 

 

12.              Governing Law. This Letter Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
agreements made and to be performed therein, without reference to its conflict
of law provisions (other than Section 5-1401 of the General Obligations Law),
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.

 

13.              No Advisory or Fiduciary Responsibility. Redwood acknowledges
and agrees that: (i) the transactions contemplated by this Letter Agreement and
the Underwriting Agreement are arm’s-length commercial transactions between
Redwood, on the one hand, and RBS, on the other hand, and Redwood is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Letter Agreement and the
Underwriting Agreement; (ii) in connection with each transaction contemplated
hereby and the process leading to each such transaction RBS is and has been
acting solely as a principal and is not the financial advisor, agent or
fiduciary of Redwood or its affiliates, stockholders, creditors or employees or
any other party; (iii) RBS has not assumed and will not assume an advisory,
agency or fiduciary responsibility in favor of Redwood with respect to any of
the transactions contemplated hereby or the process leading thereto
(irrespective of whether RBS has advised or is currently advising Redwood on
other matters) or any other obligation to Redwood except the obligations
expressly set forth in this Letter Agreement and the Underwriting Agreement;
(iv) RBS and its affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of Redwood and that RBS has no
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship; and (v) RBS has not provided any legal, accounting,
regulatory or tax advice with respect to the Offering and Redwood has consulted
its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.

 

Redwood acknowledges and agrees that RBS is acting solely in the capacity of an
arm’s length contractual counterparty to Redwood with respect to the Offering
and the Transaction (including in connection with determining the terms of the
Offering) and not as a financial advisor or a fiduciary to, or an agent of,
Redwood or any other person.  In addition, RBS is not advising Redwood or any
other person as to any legal, tax, investment, accounting or regulatory matters
in any jurisdiction.  Redwood shall consult with its own advisors concerning
such matters, and RBS shall have no responsibility or liability to Redwood with
respect thereto.  Any review by RBS of Redwood, the transactions contemplated by
this Letter Agreement and the Underwriting Agreement (including the Offering and
the Transaction) or other matters relating to such transactions will be
performed solely for the benefit of RBS and shall not be on behalf of Redwood.

 

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RWT Holdings, Inc.

Redwood Trust, Inc.

September 21, 2012

Page 8

 

 

14.              Termination. The Underwriting Agreement shall supersede this
Letter Agreement in any and all respects, except that the provisions of Sections
8 and 11 shall survive the execution of the Underwriting Agreement. This Letter
Agreement shall terminate upon written mutual consent of RBS, the Company and
Redwood Trust at any time, including any extension agreed to pursuant to this
Section 14. In the event that the Transaction does not close on or before the
Latest Permitted Closing Date, the obligations of Redwood and RBS under this
Letter Agreement shall terminate unless RBS and Redwood mutually agree in
writing to extend this Letter Agreement, subject to any additional terms and
conditions agreed to at the time of such extension, except that the provisions
of Sections 8 and 11 shall survive the termination of this Letter Agreement.
Redwood and RBS acknowledge that the consummation of the Transaction
contemplated herein is subject to various conditions and limitations, and that
the provisions of this Letter Agreement are preliminary and dependent upon the
satisfaction of such conditions and the occurrence of certain events.

 

[SIGNATURE PAGE FOLLOWS]

 

8

 

 

If the foregoing correctly sets forth your understanding of our agreement with
respect to the matters set forth herein, please so indicate by signing two
copies of this Letter Agreement and returning one of those signed copies to the
undersigned, whereupon this Letter Agreement will constitute our binding
agreement.

 

 

 

Very truly yours,

 

RBS SECURITIES, INC.

 

 

By:__/s/ James T. Raezer
Name: James T. Raezer

Title: Managing Director

 

Accepted and agreed to as of

the date first above written:

 

REDWOOD TRUST, INC.

 

 

By:______/s/ John Isbrandtsen ______________________

Name: John Isbrandtsen

Title: Authorized Officer

 

 

RWT HOLDINGS, INC.

 

 

By:______/s/ John Isbrandtsen ______________________

Name: John Isbrandtsen

Title: Authorized Officer

 

 

 

 

Annex A

 

Statistical Calculation Date: October 1, 2012. Description of the Mortgage
Loans: Fixed rate mortgage loans with original terms of 360 and 240 and months
and an approximate unpaid principal balance of $320MM. Loan Balance Permitted
Variance:

Plus or minus 5%.

 

Permitted Substitution Percentage: 10%. Initial Credit Enhancement: Not less
than 7.0%. Underwritten Senior Securities Balance: Approximately $298MM
Underwritten Senior Securities Balance Permitted Variance: Plus or minus 5%. AAA
Purchase Price Percentage: 102.3125%. Underwritten Senior Securities Interest
Rate: 2.5%. Additional Fees or Discounts: None. Subordinate Securities
Underwriting Fee Percentage: 25 bps.

 

 

 

 

Expense Allocation: Redwood shall pay all expenses in connection with the
Transaction and the Offering other than (a) the fees and expenses of legal
counsel to RBS and (b) the expenses of any underwriter’s due diligence conducted
by RBS on the Mortgage Loans.  The expenses for which Redwood shall be
responsible shall not include any fee or discount to RBS in respect of the
Underwritten Senior Securities but shall include, but not be limited to: (i) any
Subordinate Securities Underwriting Fees, if applicable; (ii) fees and expenses
of Redwood’s counsel and auditors in connection with the Transaction; (iii) the
fees of the Rating Agencies; (iv) the fees and expenses of any accounting firm
that is engaged to deliver comfort letters in respect of the Offering Documents,
any static pool information, any term sheet or other marketing materials; (v)
the fees and expenses of the Trustee, the Issuing Entity, the Servicers, the
Custodian, the Master Servicer and their respective counsel and auditors in
connection with the Transaction; (vi) the cost of delivering the Underwritten
Securities to the Underwriter; (vii) expenses of preparing, printing, filing and
reproducing the Offering Documents, the SEC registration statement relating to
the 2012-5 Securities, the Basic Transaction Documents and the 2012-5
Securities; (viii) all transfer taxes, if any, with respect to the sale and
delivery of the Underwritten Securities to the Underwriter; (ix) any expenses
for the qualification of the Underwritten Securities under “blue sky” or state
securities laws, including filing fees and the fees and disbursements of counsel
to the Underwriter in connection therewith and with the preparation of any “blue
sky” survey; and (x) all other costs and expenses incidental to the Offering or
the Transaction that are not otherwise specifically provided for herein.
Targeted Closing Date: RBS and Redwood shall make all commercially reasonable
efforts to close the Transaction on October 30, 2012. Latest Permitted Closing
Date: November 9, 2012

 

 

 

 

Delay Penalty Percentage: 0.078125% for each five business day period for which
the closing of the Transaction does not occur, pro rated for the actual number
of business days from and including October 30, 2012 to but excluding the
Closing Date of the Transaction. Pair-off Payment: An amount equal to the
product of (i) $298,000,000 and (ii) a fraction, (a) the numerator of which is
the product of (I) 0.65 and (II) the difference resulting from the subtraction
of the Current Value from 104.6250 and (b) the denominator of which is 100.  For
the purposes of this calculation, “Current Value” shall equal the price, as
reported on Bloomberg on the date such Pair-off Payment is executed, for the
Fannie Mae 30 year Mortgage Pass-Through Certificates at a coupon of 3.0% per
annum, TBA for the current front month.

 

 

 

 

Exhibit A

 

Form of Underwriting Agreement

 

 

 

 

 

 

 

 

 

 

Ex. A