Exhibit 10.1

EXECUTION VERSION

 

 

 

MASTER REPURCHASE AGREEMENT

between

BARCLAYS BANK PLC, as Purchaser and Agent,

and

REVERSE MORTGAGE SOLUTIONS, INC., as Seller

Dated April 23, 2018

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TABLE OF CONTENTS

 

1.

 

APPLICABILITY

     1  

2.

 

DEFINITIONS AND INTERPRETATION

     2  

3.

 

THE TRANSACTIONS

     20  

4.

 

CONFIRMATION

     24  

5.

 

[RESERVED]

     25  

6.

 

PAYMENT AND TRANSFER

     25  

7.

 

MARGIN MAINTENANCE

     25  

8.

 

TAXES; TAX TREATMENT

     26  

9.

 

SECURITY INTEREST; PURCHASER’S APPOINTMENT AS ATTORNEY-IN-FACT

     28  

10.

 

CONDITIONS PRECEDENT

     30  

11.

 

RELEASE OF PURCHASED ASSETS

     34  

12.

 

RELIANCE

     34  

13.

 

REPRESENTATIONS AND WARRANTIES

     35  

14.

 

COVENANTS OF SELLER

     38  

15.

 

REPURCHASE OF MORTGAGE LOANS

     47  

16.

 

SERVICING OF THE MORTGAGE LOANS; SERVICER TERMINATION

     47  

17.

 

EVENTS OF DEFAULT

     51  

18.

 

REMEDIES

     53  

19.

 

DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE

     56  

20.

 

USE OF EMPLOYEE PLAN ASSETS

     56  

21.

 

INDEMNITY

     56  

22.

 

WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS

     57  

23.

 

REIMBURSEMENT; SET-OFF

     57  

24.

 

FURTHER ASSURANCES

     59  

25.

 

ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION

     59  

26.

 

TERMINATION

     59  

27.

 

REHYPOTHECATION; ASSIGNMENT

     59  

28.

 

AMENDMENTS, ETC.

     60  

29.

 

SEVERABILITY

     61  

30.

 

BINDING EFFECT; GOVERNING LAW

     61  

31.

 

WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS

     61  

32.

 

SINGLE AGREEMENT

     62  

33.

 

INTENT

     62  

34.

 

NOTICES AND OTHER COMMUNICATIONS

     62  

35.

 

CONFIDENTIALITY

     64  

36.

 

DUE DILIGENCE

     66  

37.

 

USA PATRIOT ACT; OFAC AND ANTI-TERRORISM

     67  

38.

 

[RESERVED]

     67  

39.

 

EXECUTION IN COUNTERPARTS

     67  

40.

 

CONTRACTUAL RECOGNITION OF BAIL-IN

     68  

41.

 

[RESERVED]

     68  

42.

 

CONTRACTUAL RECOGNITION OF UK STAY IN RESOLUTION

     68  

43.

 

NO WAIVER

     68  

 

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SCHEDULES AND EXHIBITS

 

EXHIBIT A    OFFICER’S COMPLIANCE CERTIFICATE EXHIBIT B    REPRESENTATIONS AND
WARRANTIES WITH RESPECT TO MORTGAGE LOANS EXHIBIT C    FORM OF TRANSACTION
NOTICE EXHIBIT D    FORM OF GOODBYE LETTER EXHIBIT E    FORM OF WAREHOUSE
LENDER’S RELEASE EXHIBIT F    [RESERVED] EXHIBIT G    [RESERVED] EXHIBIT H   
FORM OF SELLER MORTGAGE LOAN SCHEDULE

 

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MASTER REPURCHASE AGREEMENT

Dated April 23, 2018

BETWEEN:

BARCLAYS BANK PLC, in its capacity as purchaser (together with its permitted
successors and assigns in such capacity hereunder, “Barclays” or “Purchaser”)
and in its capacity as agent pursuant hereto (together with its permitted
successors and assigns in such capacity hereunder, “Agent”),

and

REVERSE MORTGAGE SOLUTIONS, INC. (together with its permitted successors and
assigns in such capacity hereunder, “RMS” or “Seller”).

 

1. APPLICABILITY

Purchaser may from time to time, upon the terms and conditions set forth herein,
agree to enter into transactions on a committed basis with respect to the
Committed Amount and an uncommitted basis with respect to the Uncommitted
Amount, in which (x) with respect to the initial Transaction pursuant to this
Agreement, RMS sells to Purchaser the REO Asset and (y) with respect to any
Transaction, Seller sells to Purchaser Eligible Assets, on a servicing-released
basis, against the transfer of funds by Purchaser, with a simultaneous agreement
by Purchaser to transfer to Seller the related Purchased Assets on a date
certain not later than one year following such transfer, against the transfer of
funds by Seller; provided that the Aggregate MRA Purchase Price shall not
exceed, as of any date of determination, the Maximum Aggregate Purchase Price.
Each such transaction involving (x) the transfer of Eligible Mortgage Loans to
Purchaser or (y) the transfer of REO Property (including REO Property resulting
from a conversion of REO Property from a Mortgage Loan pursuant to Section 3(j)
of this Agreement) to REO Subsidiary resulting in an increase in the value of
the REO Asset, shall each be referred to herein as a “Transaction,” and shall be
governed by this Agreement. This Agreement sets forth the procedures to be used
in connection with periodic requests for Purchaser to enter into Transactions
with Seller. Seller hereby acknowledges that Purchaser is under no obligation to
enter into, any Transaction pursuant to this Agreement with respect to the
Uncommitted Amount. Seller acknowledges that during the term of this Agreement,
Agent may undertake to join either one or both of Sheffield Receivables
Corporation and Barclays Bank Delaware as additional purchasers under this
Agreement, and Seller hereby consents to the joinder of such additional
purchasers.

On the initial Purchase Date, Purchaser will purchase certain Eligible Mortgage
Loans from Seller in connection with the Transaction on such date. After the
initial Purchase Date, as part of separate Transactions, Seller may request and,
as set forth in the previous paragraph and subject to the terms and conditions
of this Agreement, Purchaser may or shall fund an increase in the Aggregate MRA
Purchase Price for (i) additional Eligible Mortgage Loans and (ii) the REO Asset
based upon the conveyance by RMS of additional REO Properties to REO Subsidiary
or the acquisition of additional REO Properties by the REO Subsidiary.

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2. DEFINITIONS AND INTERPRETATION

(a)    Defined Terms.

“Accepted Servicing Practices” means with respect to any Mortgage Loan or REO
Property, as the context requires, those accepted, customary and prudent
mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions that service mortgage loans or real estate owned
properties of the same type as the Mortgage Loans or REO Properties in the
jurisdiction where the related Mortgaged Property or REO Property is located,
and which are in accordance with the requirements of the Agency Program,
applicable law and FHA guidelines and regulations, if applicable, so that the
FHA insurance is not voided or reduced.

“Accrual Period” means, with respect to each Monthly Payment Date for any
Transaction, the immediately prior calendar month; provided that with respect to
the first Monthly Payment Date of a Transaction following the related Purchase
Date, the Accrual Period shall commence on the related Purchase Date.

“Act of Insolvency” means, with respect to any Person,

(i)    the filing of a voluntary petition (or the consent by such Person to the
filing of any such petition against it), commencing, or authorizing the
commencement of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar law relating to the
protection of creditors, or suffering any such petition or proceeding to be
commenced by another; or such Person shall consent to or seek the appointment of
or the taking of possession by a custodian, receiver, conservator, trustee,
liquidator, sequestrator or similar official of such Person, or for any
substantial part of its Property, or any general assignment for the benefit of
creditors;

(ii)    a proceeding shall have been instituted against such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, moratorium, delinquency or liquidation law of any jurisdiction,
whether now or subsequently in effect, or a custodian, receiver, conservator,
liquidator, trustee, sequestrator or similar official for such Person or such
Person’s Property (as a debtor or creditor protection procedure) is appointed by
any Governmental Authority having the jurisdiction to do so or takes possession
of such Property and any such proceeding is not dismissed within thirty
(30) days of filing;

(iii)    that such Person or any Affiliate shall become insolvent;

(iv)    that such Person shall (a) admit in writing its inability to pay or
discharge its debts or obligations generally as they become due or mature,
(b) admit in writing its inability to, or intention not to, perform any of its
material obligations, or (c) generally fail to pay any of its debts or
obligations as they become due or mature;

(v)    any Governmental Authority shall have seized or appropriated, or assumed
custody or control of, all or any substantial part of the Property of such
Person, or shall have taken any action to displace the management of such
Person;

 

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(vi)    the audited annual financial statements of such Person or the notes
thereto or other opinions or conclusions stated therein shall be qualified or
limited by reference to the status of such Person as a “going concern” or a
reference of similar import or shall indicate that such Person has a negative
net worth or is insolvent; or

(vii)    if such Person or any Affiliate is a corporation, such Person or any
Affiliate or any of their Subsidiaries, shall take any corporate action in
furtherance of, or the action of which would result in any of the foregoing
actions.

“Additional Eligible Loan Criteria” has the meaning assigned thereto in the
Pricing Side Letter.

“Additional Purchased Mortgage Loans” has the meaning assigned thereto in
Section 7(b) hereof.

“Adjusted EBITDA” is, for the Seller, income (loss) before income taxes, plus
amortization of servicing rights and other fair value adjustments, interest
expense on corporate debt, depreciation and amortization, goodwill and
intangible assets impairment, if any, a portion of the provision for curtailment
expense, net of expected third-party recoveries, if applicable, share-based
compensation expense or benefit, exit costs, estimated settlements and costs for
certain legal and regulatory matters, fair value to cash adjustments for reverse
loans, select other cash and non-cash adjustments primarily the net provision
for the repurchase of loans sold, non-cash interest income, severance, gain or
loss on extinguishment of corporate debt, interest income on unrestricted cash
and cash equivalents, the net impact of the non-residual trusts, the provision
for loan losses, residual trust cash flows, transaction and integration costs,
servicing fee economics, and certain non-recurring costs, as applicable.
Adjusted EBITDA includes both cash and non-cash gains from mortgage loan
origination activities, and excludes the impact of fair value option accounting
on certain assets and liabilities and includes cash generated from reverse
mortgage origination activities for the period in which Seller was originating
reverse mortgages. Adjusted EBITDA may also include other adjustments, as
applicable based upon facts and circumstances, consistent with the intent of
providing investors a supplemental means of evaluating the Seller’s operating
performance.

“Adjusted Tangible Net Worth” means the Net Worth of Seller on a consolidated
basis minus (a) all intangible assets determined in accordance with GAAP
(including goodwill and excluding originated and purchased mortgage servicing
rights of Seller) and (b) any and all advances to, investments in and
receivables from Affiliates of Seller.

“Affiliate” means, with respect to (i) any specified Person (other than the
Seller or the Guarantor), any other Person controlling or controlled by or under
common control with such specified Person, (ii) the Seller, its respective
Subsidiaries and the Guarantor, and (iii) the Guarantor, the Seller. For the
purposes of this definition, “control” means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise and the terms
“controlling,” “controlled by” and “under common control with” have meanings
correlative to the meaning of “control.”

 

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“Aged Mortgage Loan” means a Mortgage Loan for which the time between the date
on which RMS purchased such Mortgage Loan from the Ginnie Mae pool and the date
of determination is more than 180 days, if such Mortgage Loan either (a) does
not have a due and payable date from HUD, (b) foreclosure proceedings have not
been initiated or (c) is not on a repayment plan.

“Aged REO Property” means an REO Property for which the time between (a) the
date on which the earlier of RMS or the REO Subsidiary obtains marketable title
and (b) the date of determination is more than six (6) months. Notwithstanding
the foregoing, any REO Property shall be Aged REO Property on the date on which
related HUD claims proceeds are paid.

“Agency” means Ginnie Mae.

“Agency Guide” means the Ginnie Mae Guide.

“Agency Program” means the Ginnie Mae Program.

“Agent” has the meaning set forth in the preamble hereof.

“Aggregate MRA Purchase Price” means as of any date of determination, an amount
equal to the aggregate Purchase Price for all Purchased Assets then subject to
Transactions under this Agreement.

“Agreement” means this Master Repurchase Agreement (including all exhibits,
schedules and other addenda thereto), as it may be amended, further supplemented
or otherwise modified from time to time.

“Applicable Margin” has the meaning assigned thereto in the Pricing Side Letter.

“Approvals” means with respect to RMS and Servicer the approvals obtained from
the Agency or HUD in designation of RMS and/or Servicer as a Ginnie Mae-approved
issuer or an FHA-approved mortgagee, as applicable, in good standing.

“Asset Acquisition” means (1) an investment by RMS or any Subsidiary of RMS in
any other Person pursuant to which such Person shall become a Subsidiary of RMS,
or shall be merged with or into RMS or a Subsidiary of RMS, or (2) the
acquisition by RMS or any Subsidiary of RMS of the assets of any Person other
than in the ordinary course of business.

“Assignment and Acceptance” has the meaning assigned thereto in Section 27(b)
hereof.

“Assignment of Mortgage” means, with respect to any Mortgage, an assignment of
the Mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the assignment of the Mortgage to the Purchaser.

“Backup Servicer Agreement” means any backup servicing agreement among
Purchaser, RMS and a backup servicer appointed pursuant to Section 16(d), as the
same may be amended, modified or supplemented from time to time.

 

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“Bail-In Action” means the exercise by the Bank of England (or any successor
resolution authority) of any write-down or conversion power existing from time
to time (including, without limitation, any power to amend or alter the maturity
of eligible liabilities of an institution under resolution or amend the amount
of interest payable under such eligible liabilities or the date on which
interest becomes payable, including by suspending payment for a temporary period
and together with any power to terminate and value transactions) under, and
exercised in compliance with, any laws, regulations, rules or requirements in
effect in the United Kingdom relating to the transposition of the European
Banking Recovery and Resolution Directive as amended from time to time,
including but not limited to, the Banking Act 2009 as amended from time to time,
and the instruments, rules and standards created thereunder, pursuant to which
Purchaser’s obligations (or those of Purchaser’s affiliates) can be reduced
(including to zero), cancelled or converted into shares, other securities, or
other obligations of ours or any other person.

“Bank” means (i) Wells Fargo Bank N.A, and its successors and permitted assigns
or (ii) such other bank as may be mutually acceptable to RMS and Purchaser.

“Bankruptcy Code” means 11 U.S.C. Section 101 et seq., as amended from time to
time.

“Breakage Costs” has the meaning assigned thereto in Section 3(h) hereof.

“Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day
upon which the New York Stock Exchange or the Federal Reserve Bank of New York
is closed or (iii) with respect to any day on which the parties hereto have
obligations to the Custodian or on which the Custodian has obligations to any
party hereto, a day upon which the Custodian’s offices are closed.

“Capitalized Mortgage Servicing Rights” means the value of RMS’s and its
consolidated Subsidiaries’ (as set forth on its balance sheet) owned mortgage
servicing rights, which represent RMS’s estimation of the present value of the
fee income earned from continued servicing of the related mortgage loans.

“Cash Equivalents” means any of the following: (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one (1) year from the date of
acquisition; (b) mortgage-backed securities issued or guaranteed by any agency
of the United States Government with an implied rating of AAA or with an express
rating of AAA by either Standard & Poor’s Ratings Services (“S&P”) or by Moody’s
Investors Service, Inc. (“Moody’s”); (c) certificates of deposit, time deposits,
Eurodollar time deposits or overnight bank deposits having maturities of six
(6) months or less from the date of acquisition issued by any commercial bank
organized under the laws of the United States or of any state thereof having
combined capital and surplus of not less than $500,000,000; (d) commercial paper
of a domestic issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition;
(e) repurchase obligations of any commercial bank satisfying the requirements of
clause (c) of this definition, having a term of not more than thirty (30) days,
with respect to securities issued or fully guaranteed or insured by the United
States government;

 

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(f) securities with maturities of one (1) year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (g) securities with maturities of six (6) months or less
from the date of acquisition backed by standby letters of credit issued by any
commercial bank satisfying the requirements of clause (c) of this definition; or
(h) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (g) of this
definition.

“Change in Control” means (a) any transaction or event as a result of which
Guarantor ceases to own, directly or indirectly, beneficially or of record, more
than 50% of the voting stock of Seller, (b) the sale, transfer, or other
disposition of all or substantially all of Seller’s assets or Property
(excluding any such action taken in connection with any securitization or
financing transaction or routine sales of Servicing Rights, Mortgage Loans or
REO Properties, in whole or in part, or any other transaction permitted under
the Program Documents) or all or substantially all of Guarantor’s other assets,
as applicable, or (c) the consummation of a merger or consolidation of Seller or
Guarantor with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the continuing or surviving
entity’s equity outstanding immediately after such merger, consolidation or such
other reorganization is owned by persons who were not equityholders of the
Seller or Guarantor, or an Affiliate or a Subsidiary of the Seller or Guarantor,
as applicable, immediately prior to such merger, consolidation or other
reorganization.

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by Purchaser (or any Affiliate thereof)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collection Account” means the following account established by RMS in
accordance with Section 16(e) for the benefit of Purchaser, Account Number:
4070441175, ABA: #121000248.

“Collection Account Control Agreement” means that certain Deposit Account
Control Agreement, dated April 23, 2018, by and between RMS and Bank, in form
and substance acceptable to Purchaser to be entered into with respect to the
Collection Account, as the same may be amended, restated, modified or
supplemented from time to time.

“Committed Amount” has the meaning assigned thereto in the Pricing Side Letter.

“Commitment Fee” has the meaning assigned thereto in the Pricing Side Letter.

“Confirmation” has the meaning assigned thereto in Section 4 hereof.

 

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“Contract” means an agreement between an Originator and any Obligor, pursuant to
or under which such Obligor shall be obligated to pay for merchandise, insurance
or services from time to time.

“Converted REO Property” means an REO Property that results from the foreclosure
of any Mortgage Loan that was a Purchased Asset, or transfer of the related
Mortgaged Property in lieu of foreclosure or other transfer of such real
property, and (i) which is titled in the name of the REO Subsidiary and
(ii) with respect to which such REO Property has satisfied the conditions of
Section 3(j)(iv).

“Custodial Agreement” means that certain Custodial Agreement, dated April 23,
2018, among Seller, Purchaser, Agent and Custodian, entered into in connection
with this Agreement, as the same may be amended, restated, modified or
supplemented from time to time.

“Custodian” means Deutsche Bank National Trust Company, and its successors and
permitted assigns.

“Default” means any event that, with the giving of notice or the passage of time
or both, would constitute an Event of Default.

“Default Rate” has the meaning assigned thereto in the Pricing Side Letter.

“Dollars” or “$” means, unless otherwise expressly stated, lawful money of the
United States of America.

“Economic and Trade Sanctions and Anti-Terrorism Laws” means any laws relating
to terrorism, trade sanctions programs and embargoes, import/export licensing,
money laundering, or bribery, all as amended, supplemented or replaced from time
to time.

“Effective Date” means April 23, 2018.

“Electronic Transmission” means the delivery of information in an electronic
format acceptable to the applicable recipient thereof. An Electronic
Transmission shall be considered written notice for all purposes hereof (except
when a request or notice by its terms requires execution).

“Eligible Asset” means any Eligible Mortgage Loan or the REO Asset.

“Eligible Mortgage Loan” means a Mortgage Loan that (i) satisfies each of the
representations and warranties in Exhibit B to the Agreement in all material
respects, (ii) was, at origination and while in a Ginnie Mae Security, in Strict
Compliance with the eligibility requirements of the Ginnie Mae Program,
(iii) contains all required documents in the Mortgage File without exceptions
unless otherwise waived by the Purchaser or permitted below, (iv) meets each of
the applicable Additional Eligible Loan Criteria, (v) is identified on the
Seller Mortgage Loan Schedule and (vi) if such Mortgage Loan is a Mortgage Loan
that becomes REO Property any time from the Effective Date through the date on
which the REO Subsidiary becomes a party to the Custodial Agreement, the
Purchase Price of such Mortgage Loan, when added to the

 

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aggregate Purchase Price of all such Mortgage Loans, does not exceed the
Mortgage Loan to REO Property Sublimit, if applicable.

“ERISA” means, with respect to any Person, the Employee Retirement Income
Security Act of 1974, as amended from time to time and any successor thereto,
and the regulations promulgated and rulings issued thereunder.

“Escrow Payments” means, with respect to a Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water charges, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges and other payments as may be required to be
escrowed by the Mortgagor with the Mortgagee pursuant to the terms of the
Mortgage or any other document.

“Event of Default” has the meaning assigned thereto in Section 17 hereof.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively
comparable), any current or future regulations or official interpretations
thereof and any agreements entered into pursuant to Section 1471(b)(1) of the
Code.

“FHA” means the Federal Housing Administration, an agency within HUD, or any
successor thereto, and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
regulations.

“Foreign Purchaser” has the meaning assigned thereto in Section 8(d).

“Foreclosure Date” has the meaning assigned thereto in Section 3(j)(iv).

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States of America.

“Ginnie Mae” means the Government National Mortgage Association and its
successors in interest, a wholly-owned corporate instrumentality of the
government of the United States of America.

“Ginnie Mae Guide” means the Ginnie Mae Mortgage-Backed Securities Guide, as
such Guide may hereafter from time to time be amended.

“Ginnie Mae Mortgage Loan” means a mortgage loan that is in Strict Compliance on
the related Purchase Date with the eligibility requirements specified for the
applicable Ginnie Mae Program described in the applicable Ginnie Mae Guide.

“Ginnie Mae Program” means the Ginnie Mae Mortgage-Backed Securities Programs,
as described in the Ginnie Mae Guide.

“Ginnie Mae Security” means a fully-modified pass-through mortgage-backed
certificate guaranteed by Ginnie Mae, evidenced by a book-entry account in a
depository institution having

 

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book-entry accounts at the Federal Reserve Bank of New York and backed by a pool
of Ginnie Mae Mortgage Loans.

“Governmental Authority” means any nation or government, any state or other
political subdivision, agency or instrumentality thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator having
jurisdiction over Seller or any of its Subsidiaries or any of their Property.

“Guarantor” means Ditech Holding Corporation.

“Guaranty” means the Guaranty of Guarantor in favor of Purchaser, dated as of
April 23, 2018, as the same may be amended, supplemented or otherwise modified
from time to time.

“HECM Buyout Loan” means an Eligible Mortgage Loan that (a) is insured by FHA
and for which no insurance claim payments have been made by FHA, (b) is a Ginnie
Mae Mortgage Loan, (c) has been purchased out of a Ginnie Mae Security, (d) is a
home equity conversion Mortgage Loan secured by a first lien, and (e) includes
all payments made to or on behalf of the related borrower(s) under the related
Mortgage Note.

“Hedge Instrument” means any interest rate cap agreement, interest rate floor
agreement, interest rate swap agreement or other interest rate hedging agreement
entered into by RMS with a counterparty reasonably acceptable to Agent, in each
case with respect to the Mortgage Loans.

“HUD” means the Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA mortgage insurance. The term “HUD,” for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Ginnie Mae.

“Income” means, with respect to any Purchased Asset at any time, any principal
and/or interest thereon and all dividends, sale proceeds and all other proceeds
as defined in Section 9-102(a)(64) of the Uniform Commercial Code and all other
collections and distributions thereon (including, without limitation, any
proceeds received in respect of mortgage insurance).

“Indebtedness” means, with respect to any Person as of any date of
determination: (a) obligations created, issued or incurred by such Person for
borrowed money (whether by loan, the issuance and sale of debt securities or the
sale of Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person); (b)
obligations to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable and paid within ninety (90) days
of the date the respective goods are delivered or the respective services are
rendered; (c) indebtedness of others secured by a Lien on the Property of such
Person, whether or not the respective indebtedness so secured has been assumed
by such Person; (d) obligations (contingent or otherwise) in respect of letters
of credit or similar instruments issued for account of such Person; (e) capital
lease obligations; (f) payment obligations under repurchase agreements, single
seller financing facilities, warehouse facilities and other lines of credit;
(g) indebtedness of others guaranteed on a recourse or partial recourse basis by
such Person; (h) all obligations incurred in connection with the acquisition or
carrying of fixed assets;

 

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(i) indebtedness of general partnerships of which such Person is a general
partner; and (j) any other known or contingent liabilities of such Person.

“Indemnified Party” has the meaning assigned thereto in Section 21(a).

“Initial REO Properties” has the meaning assigned thereto in Section 3(j)(ii).

“Initial REO Transfer Date” has the meaning assigned thereto in
Section 3(j)(ii).

“Investment Company Act” means the Investment Company Act of 1940, as amended,
including all rules and regulations promulgated thereunder.

“LIBOR” means for each day, the rate (adjusted for statutory reserve
requirements for eurocurrency liabilities) for Eurodollar deposits for a period
equal to six months appearing on Bloomberg Screen US 0006M Page or if such rate
ceases to appear on Bloomberg Screen US 0006M Page, or any other service
providing comparable rate quotations at approximately 11:00 a.m., London time,
on the applicable date of determination, or such interpolated rate as determined
by the Agent.

“Lien” means any mortgage, deed of trust, lien, claim, pledge, charge, security
interest or similar encumbrance.

“LLC Agreement” means the limited liability company agreement of the REO
Subsidiary entered into by RMS as sole member, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.

“Margin Call” has the meaning assigned thereto in Section 7(b) hereof.

“Margin Deficit” has the meaning assigned thereto in Section 7(b) hereof.

“Market Value” means, with respect to any Purchased Asset and as of any date of
determination, (i) the value ascribed to a Purchased Asset (which in the case of
the REO Asset, is based on the value ascribed to the REO Properties) by Agent in
its sole discretion, exercising good faith and using methodology and parameters
customarily used by Agent to value similar assets, as may be as marked to market
daily, and (ii) zero, with respect to (x) any Mortgage Loan that is a Purchased
Asset but is not an Eligible Mortgage Loan or (y) any REO Property for which
Seller has failed to fulfill the requirements of Section 3(j)(ii)(B) (with
respect to the Initial REO Properties) or 3(j)(iii)(B) (with respect to all
other REO Properties), as applicable.

“Material Adverse Change” means, with respect to a Person, any material adverse
change in the business, condition (financial or otherwise), operations,
performance or Property of such Person, including the insolvency of such Person.

“Material Adverse Effect” means (a) a Material Adverse Change with respect to
Seller, Servicer, Guarantor or any of their respective Affiliates; (b) a
material impairment of the ability of Seller, Servicer, Guarantor or any of
their respective Affiliates that is a party to any Program Document to perform
under any Program Document to which it is a party; (c) a material adverse effect
upon the legality, validity, binding effect or enforceability of any Program
Document

 

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against Seller, Servicer, Guarantor or any of their respective Affiliates that
is a party to any Program Document; (d) a material adverse effect on the Market
Value of the Purchased Assets; or (e) a material adverse effect on the Approvals
of RMS.

“Maturity Date” means April 19, 2019.

“Maximum Aggregate Purchase Price” means an amount equal to the sum of the
Committed Amount and the Uncommitted Amount.

“Maximum Time on Facility” means for each Eligible Mortgage Loan or REO
Property, the 364 day period of time, commencing with the related date an
Eligible Asset became subject to a Transaction hereunder.

“Membership Certificate” means a physical certificate evidencing a 100%
beneficial ownership interest in the REO Subsidiary, which shall be registered
in the name of Barclays until such certificate is repurchased from Barclays by
RMS.

“Monthly Payment Date” means the fifth (5th) Business Day of each calendar month
beginning with May 5, 2018.

“Mortgage” means a mortgage, deed of trust, or other security instrument,
securing a Mortgage Note.

“Mortgage File” has the meaning assigned thereto in the Custodial Agreement.

“Mortgage Interest Rate” means, with respect to each Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.

“Mortgage Loan” means a HECM Buyout Loan.

“Mortgage Loan to REO Property Sublimit” has the meaning assigned thereto in the
Pricing Side Letter.

“Mortgage Note” means a promissory note or other evidence of indebtedness of the
obligor thereunder, evidencing a Mortgage Loan, and secured by the related
Mortgage.

“Mortgaged Property” means the real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.

“Mortgagee” means the record holder of a Mortgage Note secured by a Mortgage.

“Mortgagor” means the obligor or obligors on a Mortgage Note, including any
person who has assumed or guaranteed the obligations of the obligor thereunder.

“Net Worth” means, with respect to RMS, the amount by which the fair saleable
value of RMS’s assets on the date exceeds its existing debts and other
liabilities on such date.

 

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“Nominee” shall mean RMS or any other Person that executes a nominee agreement,
whereby REO Subsidiary agrees that the nominee will hold legal title to Eligible
Mortgage Loans owned by REO Subsidiary and such nominee agrees that REO
Subsidiary will remain the beneficial owner of such Mortgage Loans, in form and
substance acceptable to the Purchaser, so long as such nominee is approved in
writing by the Purchaser in its sole discretion.

“Non-Utilization Fee” has the meaning assigned thereto in the Pricing Side
Letter.

“Nonrecourse Debt” means an obligation for borrowed money secured by a lien on
any property owned by a Person, with respect to which obligation the Person has
not assumed or become liable for the payment thereof.

“Notice Date” has the meaning assigned thereto in Section 3(c) hereof.

“Obligations” means (a) all amounts due and payable by Seller to Purchaser in
connection with a Transaction hereunder, together with interest thereon
(including interest which would be payable as post-petition interest in
connection with any bankruptcy or similar proceeding) and other obligations and
liabilities of Seller to Purchaser arising under, or in connection with, the
Program Documents or directly related to the Purchased Assets, whether now
existing or hereafter arising; (b) any and all sums paid by Purchaser or on
behalf of Purchaser pursuant to the Program Documents in order to preserve any
Purchased Asset or its interest therein; (c) in the event of any proceeding for
the collection or enforcement of any of Seller’s indebtedness, obligations or
liabilities referred to in clause (a), the reasonable expenses of retaking,
holding, collecting, preparing for sale, selling or otherwise disposing of or
realizing on any Purchased Asset, or of any exercise by Purchaser and/or Agent
of their rights under the Program Documents, including without limitation,
reasonable attorneys’ fees and disbursements and court costs; and (d) all of
Seller’s indemnity obligations to Purchaser and Agent pursuant to the Program
Documents.

“Obligor” means a Person obligated to make payments pursuant to a Contract;
provided that in the event that any payments in respect of a Contract are made
by any other Person, such other Person shall also be deemed to be an Obligor.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of Treasury.

“OFAC Lists” has the meaning ascribed to it in Section 37(b).

“Originator” means RMS or any other third party originator as mutually agreed
upon by Agent and Seller.

“Other Taxes” has the meaning assigned thereto in Section 8(b).

“Parent Company” means a corporation or other entity owning at least 50% of the
outstanding shares of voting stock of RMS.

 

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“Person” means any legal person, including any individual, corporation,
partnership, association, joint stock company, trust, limited liability company,
unincorporated organization, governmental entity or other entity of similar
nature.

“Price Differential” means, with respect to any Purchased Asset or Transaction
as of any date of determination, an amount equal to the product of (A) the
Pricing Rate (or during the continuation of an Event of Default, by daily
application of the Default Rate) and (B) the Purchase Price for such Purchased
Asset or Transaction. Price Differential will be calculated in accordance with
Section 3(e) herein for the actual number of days elapsed during the applicable
Accrual Period on a 360-day basis.

“Price Differential Determination Date” means, with respect to any Monthly
Payment Date, the second (2nd) Business Day preceding such date.

“Pricing Rate” means, as of any date of determination and with respect to an
Accrual Period for any Purchased Asset, an amount equal to the sum of (i) LIBOR
plus (ii) the Applicable Margin.

“Pricing Side Letter” means that certain Pricing Side Letter, dated as of
April 23, 2018, among Seller, Purchaser and Agent, entered into in connection
with this Agreement, as the same may be amended, modified or supplemented from
time to time.

“Principal Balance” means (i) with respect to Eligible Mortgage Loans, the
unpaid principal balance of such Mortgage Loan (inclusive of related advances)
and (ii) with respect to the REO Asset, the value ascribed to the related REO
Properties (inclusive of related advances) (including the value of any related
HUD claim) by Agent in its sole discretion, exercising good faith and using
methodology and parameters customarily used by Agent to value similar assets, as
may be as marked to market daily.

“Program Documents” means this Agreement, the Pricing Side Letter, the Guaranty,
the Custodial Agreement, the Collection Account Control Agreement, any
assignment of Hedge Instrument, the Verification Agent Letter, any Backup
Servicer Agreement and all other agreements, documents and instruments entered
into by Seller on the one hand, and the Purchaser or one of its Affiliates (or
Custodian on its behalf) and/or Agent or one of its Affiliates on the other, in
connection herewith or therewith with respect to the transactions contemplated
hereunder or thereunder and all amendments, restatements, modifications or
supplements thereto.

“Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible.

“Purchase Date” means, with respect to each Transaction, the date on which
Purchased Assets are sold by Seller to Purchaser or Purchaser’s designee (or, in
the case of REO Properties transferred to the REO Subsidiary, resulting in an
increase of value to the REO Asset) hereunder.

“Purchase Price” means the price at which Purchased Assets subject to a
Transaction are sold by a Seller to Purchaser or Purchaser’s designee (or, in
the case of REO Properties, transferred to the REO Subsidiary, resulting in an
increase of value to the REO Asset) on a Purchase Date (which includes a
mutually negotiated premium allocable to the portion of the

 

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related Purchased Assets that constitutes the related Servicing Rights), which
shall (unless otherwise agreed to by the Seller and the Purchaser) be equal to
(A) in the case of Eligible Mortgage Loans, the lesser of (i) 100% of the
Principal Balance of such Purchased Assets as of any date of determination and
(ii) the product of the applicable Purchase Price Percentage multiplied by the
Market Value of such Purchased Assets as of such date of determination or (B) in
the case of the REO Asset, the product of the applicable Purchase Price
Percentage multiplied by the sum of (x) the Market Value of the REO Asset and
(y) the aggregate of HUD claims proceeds for all REO Properties.

“Purchase Price Percentage” has the meaning assigned thereto in the Pricing Side
Letter.

“Purchased Assets” means each Eligible Mortgage Loan subject to a Transaction
and the REO Asset.

“Purchased Items” means the right, title and interest of the Seller in, under
and to the following, whether now existing or hereafter acquired: (i) the
Mortgage Loans subject to a Transaction, (ii) the Servicing Rights related to
the Mortgage Loans subject to a Transaction, (iii) Seller’s rights under any
related Hedge Instruments to the extent related to the Mortgage Loans subject to
a Transaction, (iv) such other Property, rights, titles or interest as are
specified on the related Seller Mortgage Loan Schedule that are related to the
Mortgage Loans subject to a Transaction, (v) rights to payment under all
mortgage guarantees and insurance relating to the individual Mortgage Loans
subject to a Transaction (issued by governmental agencies or otherwise) or the
related Mortgaged Property and any mortgage insurance certificate or other
document evidencing such mortgage guarantees or insurance and all claims and
payments related to the Mortgage Loans subject to a Transaction, (vi) all
guarantees or other support for the Mortgage Loans subject to a Transaction,
(vii) all rights to Income (including all sale proceeds and all other proceeds
as defined in Section 9-102(a)(64) of the Uniform Commercial Code and all other
collections and distributions thereon (including, without limitation, any
proceeds received in respect of mortgage insurance)) and the rights to enforce
such payments arising from the Mortgage Loans subject to a Transaction and any
other contract rights, payments, rights to payment (including payments of
interest or finance charges) with respect thereto and all rights to proceeds as
defined in Section 9-102(a)(64) of the Uniform Commercial Code, (viii) the REO
Asset and the REO Property File with respect to any REO Property held by the
Seller or REO Subsidiary, as applicable, (ix) the Collection Account and all
amounts on deposit therein, (x) all Additional Purchased Mortgage Loans,
(xi) all “accounts,” “deposit accounts,” “securities accounts,” “chattel paper,”
“deposit accounts,” “documents,” “general intangibles,” “instruments,”
“investment property,” and “securities accounts,” relating to the foregoing as
each of those terms is defined in the Uniform Commercial Code and all cash and
Cash Equivalents and all other products and proceeds relating to or constituting
any or all of the foregoing, (xii) any purchase agreements or other agreements
or contracts relating to or constituting any or all of the foregoing, (xiii) any
other collateral pledged or otherwise relating to any or all of the foregoing,
together with all files, material documents, instruments, surveys (if
available), certificates, correspondence, appraisals, computer records, computer
storage media, accounting records and other books and records relating to the
foregoing, (xiv) any rights retained by RMS in any Mortgage Loans that it
transfers to the REO Subsidiary and (xv) any and all replacements,
substitutions, distributions on, or proceeds with respect to, any of the
foregoing. The term

 

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“Purchased Assets” with respect to any Transaction at any time also shall
include Additional Purchased Mortgage Loans delivered pursuant to Section 7(b)
hereof.

“Purchaser” has the meaning set forth in the preamble hereof.

“Purchaser’s Wire Instructions” has the meaning set forth in the Pricing Side
Letter.

“Records” means all instruments, agreements and other books, records, and
reports and data generated by other media for the storage of information
maintained by Seller or any other person or entity with respect to a Purchased
Asset. Records shall include, without limitation, (i) with respect to the REO
Asset, the Membership Certificate, the related REO Property File, and any other
instruments necessary to document such REO Asset, and (ii) with respect to the
other Purchased Assets, the Mortgage Notes, any Mortgages, the Mortgage Files,
the Servicing Files, and any other instruments necessary to document or service
such Purchased Asset, including, without limitation, the complete payment and
modification history of such Purchased Asset.

“REO Asset” means the Membership Certificate, so long as the related limited
liability company agreement provides that such Membership Certificate is a
“Certificated Security” as defined in Article 8 of the Uniform Commercial Code.

“REO Deed” means, with respect to each REO Property, the instrument or document
required by the law of the jurisdiction in which the REO Property is located to
convey fee title.

“REO Property” means a residential real property including land and
improvements, together with all buildings, fixtures and attachments thereto, all
insurance proceeds, liquidation proceeds, condemnation proceeds, and all other
rights, benefits, proceeds and obligations arising from or in connection
therewith, in each case which is acquired by or transferred to the REO
Subsidiary or held by RMS.

“REO Property File” means (i) the original REO Deed with evidence of recording
of any deed evidencing the ownership of the related REO Property by the REO
Subsidiary and (ii) the original or a copy of title insurance policy for the REO
Property, an ALTA lender’s title insurance policy or a title commitment.

“REO Subsidiary” means RMS REO BRC II, LLC, the special purpose Subsidiary of
RMS formed to hold Eligible Mortgage Loans and REO Property related to
foreclosures of HECM Buyout Loans.

“REO Subsidiary Schedule of Assets” means an electronic schedule of assets,
identifying the REO Properties currently owned by the REO Subsidiary, whereupon
delivery of such schedule, Seller designates which items have been added to or
removed from such schedule as compared to the version of such schedule most
recently provided by Seller.

“Repurchase Date” means, with respect to any Transaction, the earliest of
(i) the Termination Date, (ii) if Seller provides both written notice to the
Purchaser requesting a repurchase of such Transaction and the Repurchase Price,
at or prior to 12:00 noon (New York City time) on any date, such date, (iii) if
Seller provides written notice to the Purchaser requesting a repurchase of such
Transaction after 12:00 noon (New York City time) on any date,

 

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the next Business Day following delivery of such notice, and (iv) upon receipt
of proceeds from an appraisal-based claim from HUD.

“Repurchase Price” means the price at which Purchased Assets are to be
transferred from the Purchaser or Purchaser’s designee to related Seller, which
will be determined in each case as the sum of: (i) any portion of the Purchase
Price not yet repaid to Purchaser, and in the case of the REO Asset, such unpaid
portion of the Purchase Price attributable to the REO Property subject to
removal from the REO Subsidiary, (ii) the Price Differential accrued and unpaid
thereon except as set forth in Section 3(e), (iii) Breakage Costs, if any, and
(iv) any accrued and unpaid fees or expenses or indemnity amounts and any other
outstanding amounts owing and invoiced under the Program Documents from related
Seller to Purchaser.

“Request for Release of Documents” means the Request for Release of Documents
set forth as Annex 5 of the Custodial Agreement.

“Requirement of Law” means as to any Person, the certificate of incorporation
and by-laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its Property is
subject.

“Restricted Cash” means for any Person, any amount of cash of such Person that
is contractually required to be set aside, segregated or otherwise reserved.

“SEC” has the meaning ascribed thereto in Section 35.

“Section 404 Notice” means the notice required pursuant to Section 404 of the
Helping Families Save Their Homes Act of 2009 (P.L. 111-22), which amends 15
U.S.C. Section 1641 et seq., to be delivered by a creditor that is an owner or
an assignee of a Mortgage Loan to the related Mortgagor within thirty (30) days
after the date on which such Mortgage Loan is sold or assigned to such creditor.

“Securitization Entity” means (i) any Person other than Seller (whether or not a
Subsidiary of Seller) established for the purpose of issuing asset-backed or
mortgaged-backed or mortgage pass-through securities of any kind (including
collateralized mortgage obligations and net interest margin securities), (ii)
any special purpose Subsidiary established for the purpose of selling,
depositing or contributing assets into a Person described in clause (i) or
holding securities in any related Securitization Entity, regardless of whether
such person is an issuer of securities; provided that such Person is not an
obligor with respect to any Indebtedness of Seller and (iii) any special purpose
Subsidiary of Seller formed exclusively for the purpose of satisfying the
requirements of any credit enhancement or support agreements and regardless of
whether such Subsidiary is an issuer of securities.

“Seller” has the meaning set forth in the preamble hereof.

“Seller Mortgage Loan Schedule” means the list of Eligible Mortgage Loans
proposed to be purchased by Purchaser, in the form of Exhibit H hereto, that
will be delivered in an excel

 

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spreadsheet format by or on behalf of Seller to Agent, the Purchaser and
Custodian and attached by the Custodian to the related Trust Receipt.

“Seller’s Wire Instructions” has the meaning assigned thereto in the Pricing
Side Letter.

“Separateness Covenants” means the covenants listed in Section 2.06 of the LLC
Agreement.

“Servicer” means RMS, or any other servicer approved by Agent in its sole
discretion.

“Servicer Termination Event” means:

(a)    Servicer fails to service the Mortgage Loans in accordance with Accepted
Servicing Practices and Servicer fails to correct such failure after receiving
written notice of such failure;

(b)    Servicer fails to remit when due Income payments required to be made
under the terms of this Agreement or such Mortgage Loan; or

(c)    Servicer fails to meet the qualifications to maintain all requisite
Approvals, such Approvals are revoked or such Approvals are materially modified.

“Servicing File” means with respect to each Mortgage Loan or REO Property, the
file retained by Seller or REO Subsidiary or its respective designee consisting
of all documents that a prudent originator and servicer would include (including
copies of the Mortgage File), all documents necessary to document and service
the Mortgage Loans and REO Properties and any and all documents required to be
delivered in connection with any transfer of servicing pursuant to the Program
Documents.

“Servicing Records” means with respect to a Mortgage Loan, the related servicing
records, including but not limited to any and all servicing agreements, files,
documents, records, data bases, computer tapes, copies of computer tapes, proof
of insurance coverage, insurance policies, appraisals, other closing
documentation, payment history records, and any other records relating to or
evidencing the servicing of such Mortgage Loan.

“Servicing Rights” means contractual, possessory or other rights of RMS or any
other Person to administer or service a Mortgage Loan or to possess the
Servicing File.

“Servicing Term” has the meaning assigned thereto in Section 16(b).

“Strict Compliance” means compliance of RMS and the Mortgage Loans with the
requirements of the Agency Guide or the FHA regulations and guidelines, as
applicable.

“Subsidiary” means, with respect to any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of

 

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the happening of any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.

“Tangible Net Worth” means for RMS as of any date of determination, (i) the Net
Worth of Seller on a consolidated basis determined in accordance with GAAP,
minus (ii) all intangibles determined in accordance with GAAP (including
goodwill but excluding originated and purchased mortgage servicing rights) and
any and all advances to, investments in and receivables held from Affiliates
(other than with respect to the Seller and Subsidiaries of the Seller).

“Taxes” has the meaning assigned thereto in Section 8(a).

“Termination Date” means the earliest to occur of (i) the Maturity Date,
(ii) the day on which the Seller or the Guarantor merges with or consolidates
into another entity or any other corporate reorganization and thereafter (a) the
surviving entity fails to assume all the obligations of Seller under this
Agreement or the Guarantor under the Guaranty, as applicable, or (b) the
creditworthiness of the surviving entity is materially weaker, in the Agent’s
sole and good faith discretion, than that of Seller or the Guarantor, as
applicable, immediately prior to such merger or consolidation, (iii) the day on
which, due to a Change in Law, it becomes unlawful for a party to this Agreement
to perform its obligations to make payment or deliver or to receive payment or
delivery with respect to the Transactions or to otherwise comply with the
material terms of this Agreement; (iv) failure of Seller to operate or conduct
its respective business operations or any material portion thereof in the
ordinary course, or any other material adverse change in Seller’s business
operations or financial condition, which, in Agent’s sole discretion,
constitutes a material impairment of Seller’s ability to perform its obligations
under this Agreement or any other related document; (v) upon five (5) Business
Days’ prior written notice from Seller to the Purchaser following the occurrence
of a Change in Law that increases one or more of the Purchaser’s costs (as
further described in Section 3(g) hereof); (vi) at the option of Purchaser, the
occurrence of an Event of Default under this Agreement after the expiration of
any applicable grace period; and (vii) at the option of Purchaser, the effective
date of any event described in Section 14(p) or Section 14(r).

“Transaction” has the meaning assigned thereto in Section 1.

“Transaction Notice” means a written request of Seller to enter into a
Transaction in a form attached as Exhibit C hereto or such other form as shall
be mutually agreed upon between Seller and the Purchaser, which is deemed to be
delivered to Purchaser in accordance with Section 3(c) herein.

“Trust Receipt” has the meaning assigned thereto in the Custodial Agreement.

“Uncommitted Amount” has the meaning assigned thereto in the Pricing Side
Letter.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from
time to time in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the security interest in any Purchased Assets or the continuation, renewal or
enforcement thereof is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, “Uniform

 

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Commercial Code” means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.

“Verification Agent” means an entity appointed by the Agent to perform specific
services with respect to the Eligible Mortgage Loans, or its successors and
assigns.

“Verification Agent Letter” means the agreement pursuant to which the
Verification Agent performs services with respect to the Eligible Mortgage
Loans.

“Warehouse Indebtedness” means Indebtedness of Seller in connection with any
repurchase, warehouse, gestation, early purchase or similar facility.

“Warehouse Lender” means any lender providing financing to RMS for the purpose
of warehousing, originating or purchasing a Mortgage Loan (including but not
limited to purchasers under repurchase agreements), which lender has a security
interest in such Mortgage Loan to be purchased by Purchaser.

“Warehouse Lender’s Release” means a letter, in the form of Exhibit E, from a
Warehouse Lender to Purchaser, unconditionally releasing all of Warehouse
Lender’s right, title and interest in certain Mortgage Loans identified therein
upon payment to the Warehouse Lender.

(b)    Interpretation.

Headings are for convenience only and do not affect interpretation. The
following rules of this subsection (b) apply unless the context requires
otherwise. The singular includes the plural and conversely. A gender includes
all genders. Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit
is, unless otherwise specified, a reference to a section of, or annex or exhibit
to, this Agreement. A reference to a party to this Agreement or another
agreement or document includes the party’s successors and permitted substitutes
or assigns. A reference to an agreement or document is to the agreement or
document as amended, modified, novated, supplemented or replaced, except to the
extent prohibited by any Program Document. A reference to legislation or to a
provision of legislation includes any modification or re-enactment of it, a
legislative provision substituted for it and a regulation or statutory
instrument issued under it. A reference to writing includes a facsimile
transmission and any means of reproducing words in a tangible and permanently
visible form. A reference to conduct includes, without limitation, an omission,
statement or undertaking, whether or not in writing. An Event of Default exists
until it has been waived in writing by Agent or has been timely cured. The words
“hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a
whole and not to any particular provision of this Agreement. The term
“including” is not limiting and means “including without limitation.” In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including,” the words “to” and “until” each mean
“to but excluding,” and the word “through” means “to and including.” This
Agreement may use several different limitations, tests or measurements to
regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance

 

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with their terms. Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied. References herein to “fiscal year” and “fiscal
quarter” refer to such fiscal periods of Seller.

Except where otherwise provided in this Agreement, any determination, consent,
approval, statement or certificate made or confirmed in writing with notice to
Seller by Purchaser, the Purchaser or an authorized officer of Purchaser as
required by this Agreement is conclusive in the absence of manifest error. A
reference to an agreement includes a security interest, guarantee, agreement or
legally enforceable arrangement whether or not in writing related to such
agreement.

A reference to a document includes an agreement in writing or a certificate,
notice, instrument or document, or any information recorded in electronic form.
Where Seller is required to provide any document to Purchaser and/or Agent under
the terms of this Agreement, the relevant document shall be provided in writing
or printed form unless Purchaser and/or Agent requests otherwise.

This Agreement is the result of negotiations among, and has been reviewed by
counsel to, the Purchaser, Agent and Seller, and is the product of all parties.
In the interpretation of this Agreement, no rule of construction shall apply to
disadvantage one party on the ground that such party proposed or was involved in
the preparation of any particular provision of this Agreement or this Agreement
itself. Except where otherwise expressly stated, the Purchaser and Agent may
give or withhold, or give conditionally, approvals and consents and may form
opinions and make determinations in their absolute sole discretion. Except as
specifically required herein, any requirement of good faith, discretion or
judgment by the Purchaser or Agent shall not be construed to require the
Purchaser to request or await receipt of information or documentation not
immediately available from or with respect to Seller, any other Person or the
Purchased Assets themselves.

 

3. THE TRANSACTIONS

(a)    It is acknowledged and agreed that, notwithstanding any other provision
of this Agreement to the contrary, the facility provided under this Agreement is
(i) a committed facility with respect to the Committed Amount and (ii) an
uncommitted facility with respect to the Uncommitted Amount, and Purchaser shall
not have any obligation to enter into any Transactions hereunder with respect to
the Uncommitted Amount. All purchases of Eligible Assets hereunder shall be
first deemed committed up to the Committed Amount and then the remainder, if
any, shall be deemed uncommitted up the Uncommitted Amount.

(b)    Subject to the terms and conditions of the Program Documents, the
Purchaser may enter into Transactions; provided, that the Aggregate MRA Purchase
Price shall not exceed, as of any date of determination, the Maximum Aggregate
Purchase Price.

(c)    Unless otherwise agreed, Seller shall request that Purchaser enter into a
Transaction with respect to any Eligible Mortgage Loan by delivering to the
indicated required parties (each, a “Required Recipient”) the required delivery
items (each, a “Required Delivery

 

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Item”) set forth in the table below by the corresponding required delivery time
(the “Required Delivery Time”), and such Transaction shall occur no later than
the corresponding required purchase time (the “Required Purchase Time”):

 

Purchased

Asset Type

 

Required Delivery

Items

 

Required Delivery

Time

 

Required

Recipient

 

Required

Purchase

Time

Eligible Mortgage Loan  

Seller Mortgage Loan Schedule

 

  No later than 5:00 p.m. (New York City time) on the Business Day prior to the
requested Purchase Date  

Purchaser, Agent and Custodian

 

  No later than 5:00 p.m. (New York City time) on the requested Purchase Date  

 

   

 

    The complete Mortgage Files to Custodian for each Mortgage Loan subject to
such Transaction     Custodian  

The date on which any notice pursuant to this Section 3(c) is given is known as
the “Notice Date”. By submitting a Seller Mortgage Loan Schedule, Seller hereby
agrees that it shall be deemed to have made all of the representations and
warranties set forth in the form of Transaction Notice attached as Exhibit C
hereto.

(d)    Upon Seller’s request to enter into a Transaction pursuant to
Section 3(c) and assuming all conditions precedent set forth in this Section 3
and in Sections 10(a) and (b) have been met, and provided no Default or Event of
Default shall have occurred and be continuing, on the requested Purchase Date,
Purchaser shall, in the case of a Transaction with respect to the Committed
Amount, and may, in its sole discretion, in the case of a Transaction with
respect to the Uncommitted Amount, purchase the Eligible Mortgage Loans included
in the related Seller Mortgage Loan Schedule by transferring the Purchase Price
(net of any unpaid Commitment Fee or any other unpaid fees and expense then due
and payable by Seller to the Purchaser pursuant to this Agreement) in accordance
with Seller’s Wire Instructions or as otherwise provided. Seller acknowledges
and agrees that the Purchase Price includes a mutually negotiated premium
allocable to the portion of the Purchased Items that constitutes the related
Servicing Rights.

(e)    On the related Price Differential Determination Date, Agent shall
calculate the Price Differential for each outstanding Transaction payable on the
Monthly Payment Date utilizing the Pricing Rate. Not less than two (2) Business
Days prior to each Monthly Payment Date, Agent shall provide Seller with an
invoice for the amount of the Price Differential due and payable with respect to
all outstanding Transactions, setting forth the calculations thereof in
reasonable detail and all accrued fees and expenses then due and owing to the
Purchaser from Seller. On the earliest of (1) the Monthly Payment Date or
(2) the Termination Date, Seller shall pay to the Purchaser the Price
Differential then due and payable by it for (x) all outstanding related
Transactions and (y) Purchased Assets for which the Purchaser has received the
related Repurchase Price (other than Price Differential) pursuant to
Section 3(f) during the prior calendar month.

 

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(f)    With respect to a Transaction, upon the earliest of (1) the Repurchase
Date and (2) the Termination Date, Seller shall pay to the Purchaser the related
Repurchase Price (other than the related accrued Price Differential) together
with any other Obligations then due and payable, and shall repurchase all
Purchased Assets then subject to such Transaction. The Repurchase Price shall be
transferred directly to the Purchaser, as set forth in Section 6.

(g)    If Agent determines in its sole discretion that any Change in Law or any
change in accounting rules regarding capital requirements has the effect of
reducing the rate of return on either Purchaser’s capital or on the capital of
any Affiliate of either Purchaser under this Agreement as a consequence of such
Change in Law or change in accounting rules (it being understood that Purchaser
will make such determination consistent with those made with respect to similar
borrowers or sellers under similar credit or repurchase agreements), then from
time to time Seller will compensate the Purchaser or Purchaser’s Affiliate, as
applicable, for such reduced rate of return suffered as a consequence of such
Change in Law or change in accounting rules on terms similar to those imposed by
the Purchaser. Further, if due to the introduction of, any change in, or the
compliance by either Purchaser with (i) any eurocurrency reserve requirement, or
(ii) the interpretation of any law, regulation or any guideline or request from
any central bank or other Governmental Authority whether or not having the force
of law, there shall be an increase in the cost to the Purchaser or any Affiliate
of Purchaser in engaging in the present or any future Transactions (it being
understood that Purchaser will make the foregoing determinations consistent with
those made with respect to similar borrowers or sellers under similar credit or
repurchase agreements), then Seller shall, from time to time and upon demand by
the Purchaser, compensate the Purchaser or Purchaser’s Affiliate for such
increased costs, and such amounts shall be deemed a part of the Obligations
hereunder. The Purchaser shall provide Seller with notice as to any such Change
in Law, change in accounting rules or change in compliance promptly following
Purchaser’s receipt of actual knowledge thereof.

(h)    Following the date on which Seller requests and receives term funding
from Purchaser, Seller shall indemnify the Purchaser and hold the Purchaser
harmless from any losses, costs and/or expenses that the Purchaser may sustain
or incur as a result of terminating any Transaction on or before a Repurchase
Date arising from the reemployment of funds obtained by the Purchaser hereunder
or from actual out-of-pocket fees and expenses payable to terminate the deposits
from which such funds were obtained (“Breakage Costs”). The Agent shall deliver
to Seller a statement setting forth the amount and basis of determination of any
Breakage Costs in such detail as determined in good faith by the Purchaser to be
adequate, it being agreed that such statement and the method of its calculation
shall be adequate and shall be conclusive and binding upon Seller, absent
manifest error. The provisions of this Section 3(h) shall survive termination of
this Agreement.

(i)    If on any Business Day Agent determines (which determination shall be
conclusive absent manifest error) (a) that adequate and reasonable means do not
exist for ascertaining LIBOR; or (b) that LIBOR will not adequately and fairly
reflect the cost to the Purchaser of entering into or maintaining outstanding
Transactions; or (c) that it has become unlawful for it to honor its obligation
to enter into or maintain outstanding Transactions hereunder using LIBOR, then
Agent shall give notice thereof to Seller by telephone, facsimile, or other
electronic means as promptly as practicable thereafter and, until Agent notifies
Seller that the circumstances giving rise to such notice no longer exist, the
Pricing Rate included in any

 

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Confirmation with respect to new Transactions and in any calculation of the
Price Differential with respect to outstanding Transactions will be determined,
subject to the timely approval of Seller after receipt of notice of such revised
rate, at a rate per annum that the Purchaser determine in its reasonable
discretion adequately reflects the cost to the Purchaser of making or
maintaining such Transactions.

(j)    REO Property.

(i)    Seller has taken all actions necessary to fully establish the REO
Subsidiary, including, but without limitation, filing a certificate of formation
with the applicable state and executing the LLC Agreement.

(ii)    Seller (A) holds and will transfer, upon REO Subsidiary becoming a party
to the Custodial Agreement, certain REO Properties unrelated to Mortgage Loans
that are Purchased Assets (the “Initial REO Properties”) to the REO Subsidiary
and shall promptly transfer the REO Asset along with written notice of the
Transaction in the form of an REO Subsidiary Schedule of Assets to the Purchaser
and Custodian and has transferred to the Custodian electronic copies of the
applicable REO Deeds (such date, the “Initial REO Transfer Date”) and (B) (x)
subject to any applicable redemption period, has delivered to the Purchaser
evidence, as described in clause (iv) hereof, that Seller has caused the REO
Deed to be sent for recording in the applicable office of the applicable
jurisdiction and (y) has transferred to the Custodian the related REO Property
File as the documents contained in therein come into existence.

(iii)    At any time subsequent to the initial Transaction that a Mortgage Loan
that is a Purchased Asset is foreclosed upon, (A) the record title in such
Mortgage Loan shall promptly be vested in and retained by the Nominee, and
Seller shall transfer to the Custodian an electronic copy of the related REO
Deed (such date, the “Foreclosure Date”) and (B) Seller shall (x) subject to any
applicable redemption period, promptly deliver to Purchaser evidence, as
described in clause (iv) hereof, that Seller has caused the REO Deed to be sent
for recording in the applicable office of the applicable jurisdiction and
(y) promptly transfer to the Custodian the related REO Property File as the
documents contained in therein come into existence; but, with respect items
related to insurance, no more than twenty (20) days, and with respect to items
related to the REO Deed, no more than forty-five (45) days, in each case from
the Foreclosure Date, unless otherwise agreed to by Purchaser or Agent; provided
that if Seller fails to deliver such evidence provided in (x) and (y) of this
clause (iii) within the applicable time periods, the related REO Property shall
have a Market Value of zero.

(iv)    For purposes of this Agreement, a Mortgage Loan that is a Purchased
Asset shall be deemed to have converted into an REO Property upon the earliest
to occur of the following: (A) an REO Deed shall have been received in the name
of the Nominee of the REO Subsidiary with respect to the Mortgaged Property
related to such Mortgage Loan; (B) the Nominee of the REO Subsidiary shall have
received a receipt or other written acknowledgment acceptable to Purchaser from
the filing clerk evidencing the submission for filing of an REO Deed with
respect to the Mortgaged Property related to such Mortgage Loan, (C) the Nominee
of the REO Subsidiary shall have received a

 

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receipt issued by a Governmental Authority evidencing the REO Subsidiary’s right
to receive the REO Deed for the Mortgaged Property related to such Mortgage Loan
or (D) Purchaser shall have received such other evidence of the Nominee of the
REO Subsidiary’s interest in such Converted REO Property acceptable to Purchaser
in its reasonable discretion.

(v)    On any Foreclosure Date, a Transaction shall be deemed to occur with
respect to the Converted REO Property, and the Repurchase Price with respect to
such Mortgage Loan shall be reduced to zero and such Repurchase Price shall be
accounted for in determining the Purchase Price of such Converted REO Property.
A Transaction Notice shall not be required for any such deemed Transaction to
occur; however, Seller shall provide prompt written notice in the form of an REO
Subsidiary Schedule of Assets to Purchaser and Custodian upon such deemed
conversion.

(vi)    Pursuant to that certain Flow Assignment Agreement, to be dated at a
date following the Effective Date, between REO Subsidiary and RMS, RMS may from
time to time assign certain Eligible Mortgage Loans subject to a Transaction to
REO Subsidiary. Upon the assignment of any such Eligible Mortgage Loan to REO
Subsidiary, Seller shall provide notice thereof to the Purchaser and deliver to
the Purchaser an updated Seller Mortgage Loan Schedule showing updated ownership
of Eligible Mortgage Loans subject to a Transaction. Thereafter, Seller shall
cause REO Subsidiary to fulfill all obligations with respect to such Eligible
Mortgage Loans (including without limitation those in Sections 3(e) and (f)). To
the extent that an Eligible Mortgage Loan subject to a Transaction is
transferred to REO Subsidiary, the value of the REO Asset shall be deemed not to
increase by the Purchase Price of such Eligible Mortgage Loans; however any such
Eligible Mortgage Loan will retain the Purchase Price assigned to it when it
became subject to a Transaction.

(vii)    Notwithstanding any of the foregoing, if a Mortgagor shall resume
payments on any Eligible Mortgage Loans held by the REO Subsidiary, the parties
hereto agree that the REO Subsidiary shall immediately assign such Eligible
Mortgage Loans to Seller and provide notice thereof to the Custodian and the
Purchaser (in the case of the Purchaser, along with an updated Seller Mortgage
Loan Schedule showing updated ownership of Eligible Mortgage Loans subject to a
Transaction).

 

4. CONFIRMATION

In the event that parties hereto desire to enter into a Transaction on terms
other than as set forth in this Agreement, the parties shall execute a
confirmation prior to entering into such Transaction, which confirmation shall
be in a form that is mutually acceptable to the Purchaser and the Seller and
shall specify such terms, including, without limitation, the Purchase Date, the
Purchase Price, the Pricing Rate therefor and the Repurchase Date (a
“Confirmation”). Any such Confirmation and the related Seller Mortgage Loan
Schedule, together with this Agreement, shall constitute conclusive evidence of
the terms agreed to between the Purchaser and the Seller with respect to the
Transaction to which the Confirmation relates. In the event of any conflict
between this Agreement and a Confirmation, the terms of the Confirmation shall
control with respect to the related Transaction.

 

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5. [RESERVED]

 

6. PAYMENT AND TRANSFER

Unless otherwise agreed by Seller and the Purchaser, all transfers of funds
hereunder shall be in Dollars in immediately available funds. Seller shall remit
(or, if applicable, shall cause to be remitted) directly to the Purchaser all
payments required to be made by it to the Purchaser hereunder or under any other
Program Document in accordance with wire instructions provided by the Purchaser.
Any payments received by Purchaser after 4:00 p.m. (New York City time) shall be
applied on the next succeeding Business Day.

 

7. MARGIN MAINTENANCE

(a)    Agent shall determine the Market Value of the Purchased Assets on a daily
basis as determined by Agent in its sole discretion on exercising good faith.

(b)    If, as of any date of determination, the lesser of (a) 100% of the
Principal Balance of all Purchased Assets then subject to all Transactions and
(b) the aggregate Market Value of all related Purchased Assets subject to all
Transactions, taking into account the cash then on deposit in the Collection
Account, multiplied by the applicable Purchase Price Percentage is less than the
Repurchase Price (excluding accrued Price Differential) for all such
Transactions (a “Margin Deficit”), then Agent may, by notice to Seller (as such
notice is more particularly set forth below, a “Margin Call”), require Seller to
transfer to the Purchaser or Purchaser’s designee cash or, at Purchaser’s option
(and provided Seller has additional Eligible Mortgage Loans), additional
Eligible Mortgage Loans to Purchaser (“Additional Purchased Mortgage Loans”) to
cure the Margin Deficit; provided that Purchaser shall not provide notice of a
Margin Call to Seller until the Margin Deficit equals or exceeds $500,000. If
the Agent delivers a Margin Call to Seller on or prior to 11:00 a.m. (New York
City time) on any Business Day, then Seller shall transfer cash or Additional
Purchased Mortgage Loans to the Purchaser or Purchaser’s designee no later than
5:00 p.m. (New York City time) on the same Business Day. In the event the Agent
delivers a Margin Call to Seller after 11:00 a.m. (New York City time) on any
Business Day, Seller shall be required to transfer cash or Additional Purchased
Mortgage Loans to the Purchaser or Purchaser’s designee no later than 12:00 noon
(New York City time) on the next succeeding Business Day.

(c)    Any cash transferred to the Purchaser or Purchaser’s designee pursuant to
Section 16(f)(ii)(B) herein shall reduce the Repurchase Price of the related
Transactions.

(d)    The failure of Purchaser, on any one or more occasions, to exercise its
rights hereunder, shall not change or alter the terms and conditions of this
Agreement or limit the right of Purchaser to do so at a later date. Seller and
the Purchaser agree that a failure or delay by Purchaser to exercise its rights
hereunder shall not limit or waive Purchaser’s rights under this Agreement or
otherwise existing by law or in any way create additional rights for Seller.

(e)    For the avoidance of doubt, it is hereby understood and agreed that
Seller shall be responsible for satisfying any Margin Deficit existing as a
result of any reduction of the Principal Balance of any Purchased Asset pursuant
to any action by any bankruptcy court.

 

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8. TAXES; TAX TREATMENT

(a)    All payments made by Seller under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities (including penalties, interest and additions to tax) with respect
thereto imposed by any Governmental Authority therewith or thereon, excluding
(A) taxes imposed on or measured by net income (however denominated), branch
profits taxes or franchise taxes imposed by the United States or a state or a
foreign jurisdiction under the laws of which Purchaser is organized, where
Purchaser’s applicable lending office is located, or with respect to which
Purchaser has a present or former connection (other than any connection arising
from executing, delivering, being party to, engaging in any transaction pursuant
to, performing its obligations under or enforcing any Program Document), or any
political subdivision thereof or (B) taxes imposed under FATCA (collectively,
such non-excluded taxes are hereinafter called “Taxes”), all of which shall be
paid by Seller for its own account not later than the date when due. If Seller
is required by law or regulation to deduct or withhold any Taxes from or in
respect of any amount payable hereunder, it shall: (a) make such deduction or
withholding, (b) pay the amount so deducted or withheld to the appropriate
Governmental Authority not later than the date when due, (c) deliver to the
Purchaser, promptly, original tax receipts and other evidence satisfactory to
the Purchaser of the payment when due of the full amount of such Taxes; and
(d) except as otherwise expressly provided in Section 8(d) below, pay to the
Purchaser such additional amounts (including all Taxes imposed by any
Governmental Authority on such additional amounts) as may be necessary so that
the Purchaser receives, free and clear of all Taxes, a net amount equal to the
amount it would have received under this Agreement, as if no such deduction or
withholding had been made.

(b)    In addition, Seller agrees to pay to the relevant Governmental Authority
in accordance with applicable law any current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
(including, without limitation, mortgage recording taxes, transfer taxes and
similar fees) imposed by any taxing authority that arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement except such taxes imposed with respect to an
assignment as a result of a present or former connection between Purchaser and
the jurisdiction imposing such taxes (other than connections arising from
Purchaser having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Program Document, or sold or assigned any Purchased Asset or Program Document)
(“Other Taxes”).

(c)    Seller shall indemnify the Purchaser for the full amount of Taxes
(including additional amounts with respect thereto) and Other Taxes, and the
full amount of Taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 8, and any liability (including penalties, interest and
expenses arising thereon or with respect thereto) arising therefrom or with
respect thereto, provided, that the Purchaser shall have provided Seller with
evidence, reasonably satisfactory to the Seller, of payment of Taxes or Other
Taxes, as the case may be.

(d)    Any Purchaser that is either (i) not incorporated under the laws of the
United States, any State thereof, or the District of Columbia or (ii) not
otherwise treated as a “United

 

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States person” under the Code (a “Foreign Purchaser”) shall provide Seller and
Agent with original properly completed and duly executed United States Internal
Revenue Service (“IRS”) Forms W-8BEN-E or W-8ECI or any successor form
prescribed by the IRS (or IRS Form W-8IMY, with IRS Form W-8BEN-E or W-8ECI
attached), certifying that such Person is either (1) entitled to benefits under
an income tax treaty to which the United States is a party which eliminates
United States withholding tax under sections 1441 through 1442 of the Code on
payments to it or (2) otherwise fully exempt from United States withholding tax
under sections 1441 through 1442 of the Code on payments to it or certifying
that the income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the United States in either case, on
or prior to the date upon which each such Foreign Purchaser becomes Purchaser.
Each Foreign Purchaser will resubmit the appropriate form eliminating
withholding tax on payments to it on the earliest of (A) the third anniversary
of the prior submission, or (B) on or before the expiration of thirty (30) days
after there is a “change in circumstances” with respect to such Person as
defined in Treas. Reg. Section 1.1441-1(e)(4)(ii)(D). For any period with
respect to which the Foreign Purchaser has failed to provide Seller and Agent
with the appropriate form or other relevant document as expressly required under
this Section 8(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided under the first sentence of this Section 8(d) or except
to the extent that, pursuant to this Section 8, amounts payable with respect to
such taxes were payable to Purchaser’s assignor immediately before Purchaser
became a party hereto) such Person shall not be entitled to “gross-up” of Taxes
under Section 8(a) or indemnification under Section 8(c) with respect to Taxes
imposed by the United States which are imposed because of such failure;
provided, however, that should a Foreign Purchaser, which is otherwise exempt
from a withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, Seller shall, at no cost or expense to
Seller, take such steps as such Foreign Purchaser shall reasonably request to
assist such Foreign Purchaser to recover such Taxes. Upon the execution of this
Agreement, the Purchaser that is a “United States person” within the meaning of
the Code shall deliver to Seller a duly executed original of Internal Revenue
Service Form W-9 or such other documentation or information prescribed by
applicable laws or reasonably requested by Seller as will enable Seller to
determine whether or not Purchaser is subject to backup withholding or
information reporting requirements. Unless Seller has received such forms or
other documents or information as required by this Section 8(d) to establish
Purchaser’s exception from backup withholding tax, Seller shall not be required
to pay additional sums or indemnify Purchaser for any backup amount withheld.

(e)    If a payment made to Purchaser under this Agreement would be subject to
United States federal withholding tax imposed by FATCA if Agent or Purchaser
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in section 1471(b) or 1472(b) of the Code, as
applicable), Purchaser shall deliver to Seller at the time or times prescribed
by law and at such time or times reasonably requested by Seller such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by Seller as may be necessary for Seller to comply with its
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this Section 8(e), “FATCA” shall include
any amendments made to FATCA after the date of this Agreement.

 

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(f)    Without prejudice to the survival of any other agreement of the Seller
hereunder, the agreements and obligations of the Seller contained in this
Section 8 shall survive the termination of this Agreement. Nothing contained in
this Section 8 shall require Purchaser to make available any of its tax returns
or other information that they deem to be confidential or proprietary.

(g)    Each party to this Agreement acknowledges that it is its intent solely
for purposes of U.S. federal and relevant state and local income and franchise
taxes to treat each Transaction as indebtedness of the Seller that is secured by
the Purchased Items and Purchased Assets and that the Purchased Items and
Purchased Assets are owned by Seller in the absence of an Event of Default by
the Seller. All parties to this Agreement agree to such treatment and agree to
take no action inconsistent with this treatment, unless otherwise required by
law.

 

9. SECURITY INTEREST; PURCHASER’S APPOINTMENT AS ATTORNEY-IN-FACT

(a)    Seller and the Purchaser intend that (other than for tax and accounting
purposes) the Transactions hereunder be sales to Purchaser of the Purchased
Assets and not loans from Purchaser to Seller secured by the Purchased Assets.
However, in order to preserve Purchaser’s rights under this Agreement in the
event that a court or other forum recharacterizes the Transactions hereunder as
other than sales, and as security for Seller’s performance of all of its
Obligations, Seller hereby grants to the Purchaser a first priority security
interest in the Purchased Assets and Purchased Items. Seller acknowledges and
agrees that its rights with respect to the Purchased Assets and Purchased Items
are and shall continue to be at all times junior and subordinate to the rights
of the Purchaser hereunder.

(b)    Seller hereby irrevocably constitutes and appoints the Purchaser and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Seller and in the name of Seller or in its own name, from time to
time in Purchaser’s discretion, to file such financing statement or statements
relating to the Purchased Items or Purchased Assets as the Purchaser at its
option may deem appropriate, and if an Event of Default shall have occurred and
be continuing, for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action and to execute any and all documents and
instruments which may be reasonably necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, Seller hereby gives the Purchaser the power and right, on behalf of
Seller, without assent by, but with notice to, Seller, to do the following if an
Event of Default shall have occurred and be continuing and the Purchaser has
elected to exercise its remedies pursuant to Section 18 hereof:

(i)    in the name of Seller, or in its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due with respect to any Purchased
Items or Purchased Assets and to file any claim or to take any other action or
initiate and maintain any appropriate proceeding in any appropriate court of law
or equity or otherwise deemed appropriate by the Purchaser for the purpose of
collecting any and all such moneys due with respect to any Purchased Items or
Purchased Assets whenever payable;

 

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(ii)    to pay or discharge taxes and Liens levied or placed on or threatened
against the Purchased Items or Purchased Assets;

(iii)    (A) to direct any party liable for any payment under any Purchased
Items or Purchased Assets to make payment of any and all moneys due or to become
due thereunder directly to Purchaser or as Purchaser shall direct, (B) in the
name of Seller, or in its own name, or otherwise as appropriate, to directly
send or cause the applicable servicer to send “hello” letters, “goodbye” letters
in the form of Exhibit D, and Section 404 Notices; (C) to ask or demand for,
collect, receive payment of and receipt for any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Purchased Items or Purchased Assets; (D) to sign and endorse any invoices,
assignments, verifications, notices and other documents in connection with any
Purchased Items or Purchased Assets; (E) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Purchased Items or Purchased Assets or any proceeds
thereof and to enforce any other right in respect of any Purchased Items or
Purchased Assets; (F) to defend any suit, action or proceeding brought against
Seller with respect to any Purchased Items or Purchased Assets; (G) to settle,
compromise or adjust any suit, action or proceeding described in
clause (F) above and, in connection therewith, to give such discharges or
releases as Purchaser may deem appropriate; and (H) generally, to sell,
transfer, pledge and make any agreement with respect to or otherwise deal with
any Purchased Items or Purchased Assets as fully and completely as though the
Purchaser were the absolute owner thereof for all purposes, and to do, at the
Purchaser’s option and Seller’s expense, at any time, and from time to time, all
acts and things that Purchaser deems necessary to protect, preserve or realize
upon the Purchased Items or Purchased Assets and Purchaser’s Liens thereon and
to effect the intent of this Agreement, all as fully and effectively as Seller
might do.

Seller hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.

Seller also authorizes the Purchaser, from time to time if an Event of Default
shall have occurred and be continuing, to execute any endorsements, assignments
or other instruments of conveyance or transfer with respect to the Purchased
Assets in connection with any sale provided for in Section 18 hereof.

The powers conferred on the Purchaser hereunder are solely to protect
Purchaser’s interests in the Purchased Items and Purchased Assets and shall not
impose any duty upon it to exercise any such powers. The Purchaser shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither Purchaser nor any of its officers,
directors, employees or agents shall be responsible to Seller for any act or
failure to act hereunder, except for their own gross negligence or willful
misconduct.

(c)    Voting Rights. Subject to this Section, after the occurrence of an Event
of Default that has not been waived or cured, Purchaser, as the holder of the
Membership Certificate, shall exercise all voting and member rights with respect
to the REO Subsidiary membership interests.

 

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Prior to the occurrence of an Event of Default that has not been waived or
cured, Seller shall exercise all voting rights with respect to the REO
Subsidiary membership interests.

(d)    Delivery of Access Termination Notice. The Purchaser hereby acknowledges
and agrees that, with respect to the Collection Account, it shall not deliver an
Access Termination Notice (as defined in the Collection Account Control
Agreement) unless an Event of Default has occurred.

 

10. CONDITIONS PRECEDENT

(a)    As conditions precedent to the effectiveness of this Agreement, Purchaser
shall have received (or waived in writing) on or before the Effective Date
(except as otherwise noted below) each of the following, in form and substance
satisfactory to Purchaser and duly executed by each party thereto (as
applicable):

(i)    Each of the Program Documents duly executed and delivered by the parties
thereto and being in full force and effect, free of any modification, breach or
waiver;

(ii)    Certificates of an officer of each of Seller, REO Subsidiary and
Guarantor attaching certified copies of Seller’s, REO Subsidiary’s and
Guarantor’s respective consents or charter, bylaws and corporate resolutions, as
applicable, approving the Program Documents and Transactions thereunder (either
specifically or by general resolution), and all documents evidencing other
necessary corporate action or governmental approvals as may be required in
connection with the Program Documents;

(iii)    A certified copy of a good standing certificate from the jurisdiction
of organization of each of Seller, REO Subsidiary and Guarantor, dated as of no
earlier than the date which is ten (10) Business Days prior to the Purchase Date
with respect to the initial Transaction hereunder;

(iv)    An incumbency certificate of the secretary of each of Seller, REO
Subsidiary and Guarantor certifying the names, true signatures and titles of
Seller’s, REO Subsidiary’s and Guarantor’s representatives who are, if
applicable, duly authorized to request Transactions hereunder and to execute the
Program Documents and the other documents to be delivered thereunder;

(v)    An opinion of Seller’s counsel (including Seller’s in-house counsel) as
to such matters as Purchaser or Agent may reasonably request (including, without
limitation, with respect to Purchaser’s first priority lien on and perfected
security interest in the Purchased Assets and Purchased Items, a no material
litigation, non-contravention, enforceability and corporate opinion with respect
to Seller, an opinion with respect to the inapplicability of the Investment
Company Act to Seller, the REO Subsidiary and Guarantor, an opinion that this
Agreement constitutes a “repurchase agreement” and a “securities contract”
within the meaning of the Bankruptcy Code and an opinion that no Transaction
constitutes an avoidable transfer under Section 546(f) of the Bankruptcy Code,
each in form and substance acceptable to Purchaser and Agent); provided, that

 

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Seller’s in-house counsel shall be permitted to provide only the no material
litigation, non-contravention and corporate opinions;

(vi)    Seller shall have paid to Purchaser and Purchaser shall have received
all accrued and unpaid fees and expenses owed to Purchaser in accordance with
the Program Documents, including without limitation, any fees due and owing to
the Verification Agent, in each case, in immediately available funds, and
without deduction, set-off or counterclaim;

(vii)    A copy of the insurance policies required by Section 14(q) of this
Agreement;

(viii)    Evidence that all other actions necessary to perfect and protect
Purchaser’s interest in the Purchased Assets and Purchased Items have been
taken, including, without limitation, the establishment of the Collection
Account, and duly completed and filed Uniform Commercial Code financing
statements acceptable to Purchaser and covering the Purchased Items and
Purchased Assets on Form UCC1;

(ix)    Purchaser and/or Agent shall have completed the initial due diligence
review pursuant to Section 36, and such review shall be satisfactory to
Purchaser and Agent in their sole discretion;

(x)    Reserved.

(xi)    Any other documents reasonably requested by Purchaser or Agent.

(b)    As conditions precedent to each Transaction (including the initial
Transaction), each of the following conditions shall have been satisfied (or
waived in writing):

(i)    Purchaser or Purchaser’s designee shall have received (or waived in
writing) on or before the Purchase Date with respect to Eligible Assets that are
to be the subject of such Transaction (unless otherwise specified in this
Agreement) the following, in form and substance satisfactory to the Purchaser
and (if applicable) duly executed:

 

  (A) Seller shall have paid to the Purchaser and Purchaser shall have received
all accrued and unpaid fees and expenses owed to the Purchaser in accordance
with the Program Documents in immediately available funds, and without
deduction, set-off or counterclaim;

 

  (B) The Seller Mortgage Loan Schedule with respect to such Purchased Assets,
delivered pursuant to Section 3(c);

 

  (C)

Such certificates, customary opinions of counsel or other documents as the
Purchaser or Agent may reasonably request; provided that such opinions of
counsel shall not be required routinely in connection with each Transaction but
shall only be required from time to time as deemed necessary by the Purchaser

 

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  in its commercially reasonable judgment; provided further that Seller may
provide such opinions of counsel or other documents to Purchaser within ten
(10) Business Days following such Purchase Date;

 

  (D) [reserved];

 

  (E) (x) With respect to an Eligible Asset that is an Eligible Mortgage Loan,
an original Trust Receipt executed by the Custodian without exceptions; and
(y) with respect to an Eligible Asset that is the REO Asset, a Custodian Loan
Transmission (as defined in the Custodial Agreement) from the Custodian
identifying that the Custodian has received an electronic copy of the REO Deeds
relating to the REO Properties transferred to or obtained by the REO Subsidiary;

 

  (F) [reserved];

 

  (G) [reserved];

 

  (H) [reserved];

 

  (I) A duly executed Warehouse Lender’s Release from any Warehouse Lender
(including any party that has a precautionary security interest in a Mortgage
Loan) having a security interest in any Mortgage Loans, substantially in the
form of Exhibit E, addressed to the Purchaser and Agent, releasing any and all
of its right, title and interest in, to and under such Mortgage Loan (including,
without limitation, any security interest that such secured party or secured
party’s agent may have by virtue of its possession, custody or control thereof)
and, to the extent applicable, has filed Uniform Commercial Code termination
statements in respect of any Uniform Commercial Code filings made in respect of
such Mortgage Loan, and each such Warehouse Lender’s Release and Uniform
Commercial Code termination statement has been delivered to the Purchaser and
Agent prior to such Transaction and to the Custodian as part of the Mortgage
File;

 

  (J) The Purchaser shall have received the Non-Utilization Fee or Commitment
Fee, as applicable, then due and owing pursuant to Section 2 of the Pricing Side
Letter in immediately available funds, and without deduction, set-off or
counterclaim; provided that Purchaser may, in its sole discretion, net any
unpaid Non-Utilization Fee or Commitment Fee, as applicable, from the proceeds
of any Purchase Price paid by Purchaser to a Seller; and

 

  (K) evidence that such Mortgage Loan is fully insured by FHA;

 

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(ii)    No Default or Event of Default shall have occurred and be continuing;

(iii)    The Purchaser shall not have determined that the introduction of or a
change in any Requirement of Law or in the interpretation or administration of
any requirement of law applicable to the Purchaser has made it unlawful, and no
Governmental Authority shall have asserted that it is unlawful, for the
Purchaser to enter into Transactions with the applicable Pricing Rate;

(iv)    Both immediately prior to the related Transaction and also after giving
effect thereto and to the intended use thereof, all representations and
warranties in the Program Documents shall be true and correct on the date of
such Transaction (with the same force and effect as if made on such date) and
Seller is in compliance with the terms and conditions of the Program Documents,
other than as may be expressly waived by the Purchaser;

(v)    The then Aggregate MRA Purchase Price when added to the Purchase Price
for the requested Transaction, shall not exceed, as of any date of
determination, the Maximum Aggregate Purchase Price;

(vi)    The Purchase Price for the requested Transaction shall not be less than
$1,000,000 unless otherwise agreed;

(vii)    Satisfaction of any conditions precedent to the initial Transaction as
set forth in clause (a) of this Section 10 that were not satisfied prior to such
initial Purchase Date;

(viii)    The Purchaser shall have determined that all actions necessary to
establish or maintain the Purchaser’s perfected security interest in the
Purchased Assets and Purchased Items have been taken;

(ix)    The Purchaser or the Purchaser’s designee shall have received any other
documents reasonably requested by the Purchaser;

(x)    There is no Margin Deficit at the time immediately prior to entering into
a new Transaction (other than a Margin Deficit that will be cured
contemporaneous with such Transaction in accordance with the provisions of
Section 7 hereof);

(xi)    To the Seller’s and the Purchaser’s knowledge, the FHA continues to hold
permanent indefinite authority to obtain funds directly from the United States
Treasury without additional congressional approval;

(xii)    None of the following shall have occurred and/or be continuing (it
being understood that the Purchaser will make the following determinations
consistent with those made with respect to similar borrowers or sellers under
similar credit or repurchase agreements):

 

  (A)

an event or events shall have occurred in the good faith determination of the
Purchaser resulting in the effective absence of

 

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  a “repo market” or comparable “lending market” for financing debt obligations
secured by mortgage loans or securities or an event or events shall have
occurred resulting in the Purchaser not being able to finance Eligible Assets
through the “repo market” or “lending market” with traditional counterparties at
rates which would have been reasonable prior to the occurrence of such event or
events; or

 

  (B) an event or events shall have occurred resulting in the effective absence
of a “securities market” for securities backed by mortgage loans or an event or
events shall have occurred resulting in the Purchaser not being able to sell
securities backed by mortgage loans at prices which would have been reasonable
prior to such event or events; or

 

  (C) there shall have occurred a material adverse change in the financial
condition of the Purchaser which affects (or can reasonably be expected to
affect) materially and adversely the ability of the Purchaser to fund its
obligations under this Agreement.

(xiii)    If the Verification Agent is terminated by the Agent, or resigns, the
selection and approval by the Agent of a successor Verification Agent (such
approval not to be unreasonably withheld or delayed) and the assumption of the
Verification Agent’s duties by such successor verification agent shall have
become effective within forty-five (45) days of such termination or resignation.

 

11. RELEASE OF PURCHASED ASSETS

Upon timely payment in full of the Repurchase Price and all other Obligations
(if any) then owing with respect to a Purchased Asset or REO Property pursuant
to Section 3(f) hereof, unless a Margin Deficit or a Default shall have occurred
and be continuing: (a) the Purchaser shall be deemed to have terminated any
security interest that Purchaser may have in such Purchased Asset and Purchased
Item or, in the case of the REO Asset, the REO Property subject to repurchase,
(b) all of the Purchaser’s right, title and interest in such Purchased Asset or,
in the case of the REO Asset, the REO Property subject to repurchase, shall
automatically transfer to RMS, and (c) with respect to such Purchased Asset, the
Purchaser shall or shall direct Custodian to release such Purchased Asset to
Seller. Except as set forth in Sections 15 and 16(f)(ii), Seller shall give at
least two (2) Business Days’ prior written notice to the Purchaser if such
repurchase shall occur on any date other than the Repurchase Date. In the case
of the REO Asset, Purchaser shall assign the REO Asset to RMS upon a repurchase
of the REO Asset.

If such a Margin Deficit is applicable, the Purchaser shall notify Seller of the
amount thereof and Seller may thereupon satisfy the Margin Call in the manner
specified in Section 7.

 

12. RELIANCE

With respect to any Transaction, the Purchaser may conclusively rely upon, and
shall incur no liability to Seller in acting upon, any request or other
communication that the Purchaser

 

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reasonably believes to have been given or made by a person authorized to enter
into a Transaction on Seller’s behalf.

 

13. REPRESENTATIONS AND WARRANTIES

Seller hereby represents and warrants to the Purchaser and Agent, and shall on
and as of the Purchase Date for any Transaction and on and as of each date
thereafter through and including the related Repurchase Date be deemed to
represent and warrant to the Purchaser and Agent that:

(a)    Due Organization, Qualification, Power, Authority and Due Authorization.
Each of RMS and REO Subsidiary (w) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (x) has
qualified to do business in each jurisdiction in which it is legally required to
do so, (y) has the power and authority under its certificate of incorporation,
bylaws (or, in the case of the REO Subsidiary, its certificate of formation and
the LLC Agreement) and applicable law to enter into this Agreement and the
Program Documents and to perform all acts contemplated hereby and thereby or in
connection herewith and therewith and (z) this Agreement and the Program
Documents and the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action and do not require any additional
approvals or consents or other action by, or any notice to or filing with, any
Person other than any that have heretofore been obtained, given or made. RMS’s
location (within the meaning of Article 9 of the UCC) is Delaware and its
address for UCC purposes is 14405 Walters Road, Suite 200, Houston, TX 77014.

(b)    Noncontravention. The consummation of the transactions contemplated by
this Agreement and Program Documents are in the ordinary course of business of
RMS and REO Subsidiary and will not conflict with, result in the breach of or
violate any provision of the charter, by-laws, certification of formation or
limited liability company agreement (as applicable) of RMS or REO Subsidiary or
result in the breach of any provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under, any
agreement, indenture, loan or credit agreement or other instrument to which RMS
or REO Subsidiary, the Purchased Assets or any of RMS’s or REO Subsidiary’s
Property is or may be subject to, or result in the violation of any law, rule,
regulation, order, judgment or decree to which RMS or REO Subsidiary, the
Purchased Assets or RMS’s or REO Subsidiary’s Property is subject. Without
limiting the generality of the foregoing, the consummation of the Transactions
will not violate any policy, regulation or guideline of the FHA or result in the
voiding or reduction of the FHA insurance in respect of any Mortgage Loan or REO
Property, and such FHA insurance is in full force and effect or shall be in full
force and effect as required by the Agency Guide.

(c)    Legal Proceeding. There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before or by any court, public board or
body pending or, to Seller’s knowledge, threatened against or affecting RMS or
REO Subsidiary (or, to Seller’s knowledge, any basis therefor) wherein an
unfavorable decision, ruling or finding would adversely affect the validity or
enforceability of this Agreement, the Program Documents or any material
agreement or instrument to which RMS or REO Subsidiary is a party and which is
used or contemplated for use in the consummation of the transactions
contemplated hereby, would adversely affect the

 

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proceedings of RMS or REO Subsidiary in connection herewith or would or could
materially and adversely affect RMS’s or REO Subsidiary’s ability to carry out
its obligations hereunder.

(d)    Valid and Binding Obligations. This Agreement, the Program Documents and
every other document to be executed by Seller in connection with this Agreement
is and will be legal, valid, binding and subsisting obligations of Seller,
enforceable in accordance with their respective terms, except that (A) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally and
(B) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.

(e)    Financial Statements. The financial statements of RMS, copies of which
have been furnished to the Purchaser and Agent, and the Guarantor, copies of
which are publicly available, (i) are, as of the dates and for the periods
referred to therein, complete and correct in all material respects, (ii) present
fairly the financial condition and results of operations of RMS as of the dates
and for the periods indicated and (iii) have been prepared in accordance with
GAAP consistently applied, except as noted therein (subject as to interim
statements to normal year-end adjustments). Since the date of the most recent
financial statements, there has been no Material Adverse Change with respect to
RMS. Except as disclosed in such financial statements or pursuant to
Section 14(i) hereof, RMS is not subject to any contingent liabilities or
commitments that, individually or in the aggregate, have a material possibility
of causing a Material Adverse Change with respect to Seller.

(f)    Accuracy of Information. Neither this Agreement nor any representations
and warranties or information relating to Seller that Seller has delivered or
caused to be delivered to the Purchaser or Agent, including, but not limited to,
all documents related to this Agreement, the Program Documents or Seller’s or
Guarantor’s financial statements (when taken as a whole), contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements made therein or herein in light of the circumstances under which
they were made, not materially misleading. Since the furnishing of such
documents or information, there has been no change, nor any development or event
involving a prospective change that would render any of such documents or
information untrue or misleading in any material respect.

(g)    No Consents. No consent, license, approval or authorization from, or
registration, filing or declaration with, any regulatory body, administrative
agency or other governmental instrumentality, nor any consent, approval, waiver
or notification of any creditor, lessor or other non-governmental Person, is
required in connection with the execution, delivery and performance by Seller of
this Agreement or any other Program Document, other than any that have
heretofore been obtained, given or made

(h)    Compliance With Law, Etc. No practice, procedure or policy employed or
proposed to be employed by RMS or REO Subsidiary in the conduct of its
businesses violates any law, regulation, judgment, agreement, regulatory
consent, order or decree applicable to it which, if enforced, would result in a
Material Adverse Effect.

 

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(i)    Solvency. Seller is solvent and will not be rendered insolvent by any
Transaction and, after giving effect to each such Transaction, Seller will not
be left with an unreasonably small amount of capital with which to engage in its
business. Seller does not intend to incur, nor believes that it has incurred,
debts beyond its ability to pay such debts as they mature. Seller is not
contemplating the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of Seller or any of its
assets.

(j)    Fraudulent Conveyance. The amount of consideration being received by
Seller in respect of each Transaction, taken as a whole, constitutes reasonably
equivalent value and fair consideration for the related Purchased Assets. Seller
is not transferring any Purchased Assets with any intent to hinder, delay or
defraud any of its creditors. The Agreement and the Program Documents, any other
document contemplated hereby or thereby and each transaction have not been
entered into fraudulently by Seller hereunder, or with the intent to hinder,
delay or defraud any creditor or the Purchaser.

(k)    Investment Company Act Compliance. Neither RMS nor any of its
Subsidiaries (including the REO Subsidiary) is required to be registered as an
“investment company” as defined under the Investment Company Act or is an entity
“controlled by” an entity required to be registered as an “investment company”
as defined under the Investment Company Act. REO Subsidiary (i) is not required
to register under the Investment Company Act based upon the exemption provided
by Section 3(c)(5)(C) of the Investment Company Act (although other exemptions
or exclusions may be applicable), and (ii) is not a “covered fund” within the
meaning of the final regulations issued December 10, 2013, implementing
Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010, commonly known as the “Volcker Rule”.

(l)    Taxes. Each of RMS and REO Subsidiary has timely filed all federal and
state tax returns that are required to be filed by it and has paid all taxes,
including any assessments received by it, to the extent that such taxes have
become due (other than for taxes that are being contested in good faith and for
which it has established adequate reserves). Any taxes, fees and other
governmental charges payable by Seller in connection with a Transaction and the
execution and delivery of the Program Documents have been paid.

(m)    Additional Representations. With respect to each Eligible Mortgage Loan
to be sold hereunder by Seller to Purchaser, Seller hereby makes all of the
applicable representations and warranties set forth in Exhibit B as of the date
the related Mortgage File is delivered to Purchaser or the Custodian with
respect to the Eligible Mortgage Loans and continuously while such Eligible
Mortgage Loan is subject to a Transaction. Further, as of each Purchase Date,
Seller shall be deemed to have represented and warranted in like manner that
Seller has no knowledge that any such representation or warranty may have ceased
to be true in a material respect as of such date, except as otherwise stated in
a written notice to the Purchaser, any such exception to identify the applicable
representation or warranty and specify in reasonable detail the related
knowledge of Seller.

(n)    No Broker. Seller has not dealt with any broker, investment banker,
agent, or other person, except for the Purchaser, who may be entitled to any
commission or compensation

 

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in connection with the sale of Purchased Assets pursuant to this Agreement;
provided, that if Seller has dealt with any broker, investment banker, agent, or
other person, except for the Purchaser, who may be entitled to any commission or
compensation in connection with the sale of Purchased Assets pursuant to this
Agreement, such commission or compensation shall have been paid in full by
Seller.

(o)    Good Title. Seller has not sold, assigned, transferred, pledged or
hypothecated any interest in the REO Asset or any individual Mortgage Loan or
REO Property subject to a Transaction to any person other than any sale,
assignment, transfer, pledge or hypothecation that is released in conjunction
with the sale to Purchaser or REO Subsidiary hereunder, and upon delivery of a
Purchased Asset to Purchaser, Purchaser will be the sole owner thereof (other
than for tax and accounting purposes), free and clear of any lien, claim or
encumbrance other than those arising under this Agreement.

(p)    Approvals. Seller has all requisite Approvals and Seller shall have
provided evidence, satisfactory to the Purchaser and Agent, that Seller’s
Approvals are in good standing.

(q)    Custodian. The Custodian is not an Affiliate of Seller.

(r)    No Adverse Actions. RMS has not received from the Agency a notice of
extinguishment or a notice indicating material breach, default or material
non-compliance which the Agent reasonably determines may entitle the Agency to
terminate, suspend, sanction or levy penalties against RMS, or a notice from the
Agency, HUD or FHA indicating any adverse fact or circumstance in respect of RMS
which the Agent reasonably determines may entitle the Agency, HUD or FHA, as the
case may be, to revoke any Approval or otherwise terminate, suspend RMS as an
Agency approved issuer or servicer, or with respect to which such adverse fact
or circumstance has caused any of the Agency, HUD or FHA, as the case may be, to
terminate RMS, without any subsequent rescission thereof in such notice.

(s)    Affiliated Parties. Seller is not an Affiliate of the Custodian or any
other party to a Program Document hereunder other than the Guarantor and the
other Seller.

(t)    REO Subsidiary. The Membership Certificate represents 100% of the
beneficial ownership of the REO Subsidiary, and the Seller or the REO
Subsidiary, as applicable, continues to hold legal title to all REO Property
related to foreclosures of HECM Buyout Loans that are subject to a Transaction.

The representations and warranties set forth in this Agreement shall survive
transfer of the Purchased Assets to the Purchaser and shall continue for so long
as the Purchased Assets are subject to this Agreement.

 

14. COVENANTS OF SELLER

Seller hereby covenants and agrees with the Purchaser and Agent as follows as to
itself:

(a)    Defense of Title. Seller warrants and will defend the right, title and
interest of Purchaser in and to all Purchased Assets against all adverse claims
and demands.

 

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(b)    No Amendment or Compromise. Other than as contemplated by the Program
Documents, none of Seller or those acting on Seller’s behalf shall amend,
modify, or waive any term or condition of, or settle or compromise any claim in
respect of, any item of the Purchased Assets (other than any curtailments
imposed by HUD), any related rights or any of the Program Documents without the
prior written consent of the Purchaser and Agent, unless such amendment or
modification does not (i) affect the amount or timing of any payment of
principal or interest payable with respect to a Purchased Asset, extend its
scheduled maturity date, modify its interest rate, or constitute a cancellation
or discharge of its outstanding principal balance or (ii) materially and
adversely affect the security afforded by the real property, furnishings,
fixtures, or equipment securing the Purchased Asset. Notwithstanding the
foregoing, the Seller may amend, modify or waive any term or condition of the
individual Mortgage Loans in accordance with Accepted Servicing Practices and
the Agency Guide; provided, that Seller shall promptly notify the Purchaser and
Agent of any amendment, modification or waiver that causes any Mortgage Loan to
cease to be an Eligible Mortgage Loan.

(c)    No Assignment; No Liens. Seller shall not sell, assign, transfer or
otherwise dispose of, or grant any option with respect to, or pledge,
hypothecate or grant a security interest in, or Lien on or otherwise encumber
(except pursuant to the Program Documents) any of the Purchased Assets or
Purchased Items or any interest therein, provided that this Section 14(c) shall
not prevent any contribution, sale, assignment, transfer or conveyance of
Purchased Assets in accordance with the Program Documents.

Seller shall not sell, assign, transfer or otherwise dispose of, or grant any
option with respect to, or grant, create, incur, assume or permit to exist any
Lien with respect to any of the Purchased Assets, the Mortgage Notes or any
Property related thereto, including but not limited to the related Mortgages
securing such Mortgage Notes and the proceeds of the Mortgage Notes, unless such
Liens are the subject of an intercreditor agreement in form and substance
satisfactory to the Agent, other than: (A) assignments to, and Liens granted to,
the Purchaser herein or under the Program Documents; (B) Liens in connection
with deposits or pledges to secure payment of worker’s compensation,
unemployment insurance, old age pensions or other social security obligations,
in the ordinary course of business of the seller or any subsidiary; (C) liens
for taxes, fees, assessments, and governmental charges not delinquent or which
are being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established in accordance with GAAP;
(D) encumbrances consisting of zoning regulations, easements, rights of way,
survey exceptions and other similar restrictions on the use of real property and
minor irregularities in title thereto which do not materially impair their use
in operation of its business; (E) Liens in connection with hedging arrangements;
and (F) any other Lien approved by Agent in its sole discretion.

(d)    No Economic Interest. Neither Seller nor any affiliate thereof will
acquire any economic interest in or obligation with respect to any Purchased
Asset that is a Mortgage Loan except for record title to the Mortgage relating
to such Purchased Asset and the right and obligation to repurchase the Mortgage
Loan hereunder.

(e)    Preservation of Purchased Assets. Seller shall take all actions necessary
or, in the opinion of the Purchaser, desirable, to preserve the Purchased Assets
and Purchased Items so that they remain subject to a first priority perfected
security interest hereunder and deliver evidence

 

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that such actions have been taken, including, without limitation, duly completed
and filed Uniform Commercial Code financing statements on Form UCC1. Without
limiting the foregoing, Seller will comply with all applicable laws, rules,
regulations and other laws of any Governmental Authority applicable to Seller
relating to the Purchased Items and Purchased Assets and cause the Purchased
Items and Purchased Assets to comply with all applicable laws, rules,
regulations and other laws of any such Governmental Authority. Seller will not
allow any default to occur for which Seller is responsible under any Purchased
Items, Purchased Assets or any Program Documents and Seller shall fully perform
or cause to be performed when due all of its obligations under any Purchased
Items or Purchased Assets or the Program Documents.

(f)    Maintenance of Papers, Records and Files.

(i)    Seller shall maintain all Records relating to the Purchased Assets not in
the possession of Custodian or released in accordance with the Custodial
Agreement in good and complete condition in accordance with industry practices
and preserve them against loss. Seller shall collect and maintain or cause to be
collected and maintained all such Records in accordance with industry custom and
practice, and all such Records shall be in the Purchaser’s or Custodian’s
possession unless the Purchaser otherwise approves in writing. Seller will not
cause or authorize any such papers, records or files that are an original or an
only copy to leave Custodian’s possession, except for individual items removed
in connection with servicing a specific Mortgage Loan, in which event Seller
will obtain or cause to be obtained a receipt from the Custodian for any such
paper, record or file, or as otherwise permitted under the Custodial Agreement.

(ii)    For so long as either Purchaser has an interest in or Lien on any
Purchased Asset, Seller will hold or cause to be held all related Records for
the sole benefit of the Purchaser.

(iii)    Upon reasonable advance notice from Custodian, Agent or the Purchaser,
Seller shall (x) make any and all such Records available to Custodian or Agent
for examination, either by its own officers or employees, or by agents or
contractors, or both, and make copies of all or any portion thereof, (y) permit
Agent or its authorized agents to discuss the affairs, finances and accounts of
Seller with its independent certified public accounts; provided, however, Seller
shall be permitted to participate in such discussions with its chief operating
officer and chief financial officer and to discuss the affairs, finances and
accounts of Seller with its independent certified public accountants.

 

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(g)    Financial Statements and Other Information; Financial Covenants.

(i)    Seller shall keep or cause to be kept in reasonable detail books and
records setting forth an account of its assets and business and, as applicable,
shall clearly reflect therein the transfer of Purchased Assets to the Purchaser.
Seller or Guarantor, as applicable, shall furnish or cause to be furnished to
the Purchaser and Agent the following:

 

  (A) Financial Statements.

(1)    As soon as is practicable, but in any event within ninety (90) days after
the end of each fiscal year of RMS, the consolidated audited balance sheets of
each of RMS and Guarantor and their respective consolidated Subsidiaries, which
will be in conformity with GAAP, and the related consolidated audited statements
of comprehensive income and changes in stockholders’ equity showing the
financial condition of RMS and Guarantor and their respective consolidated
Subsidiaries as of the close of such fiscal year and the results of operations
during such year, and consolidated audited statements of cash flows, as of the
close of such fiscal year, setting forth, in each case, in comparative form the
corresponding figures for the preceding year. The foregoing consolidated
financial statements are to be reported on by, and to carry the unqualified
report (acceptable in form and content to the Purchaser and Agent) of, an
independent public accountant of national standing acceptable to the Purchaser
and Agent and are to be accompanied by a letter of management in form and
substance acceptable to the Purchaser and Agent;

(2)    As soon as is practicable, but in any event within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year of
RMS and Guarantor, consolidated unaudited balance sheets and consolidated
statements of comprehensive income and changes in stockholders’ equity and
unaudited statement of cash flows, all to be in a form acceptable to the
Purchaser and Agent, showing the financial condition and results of operations
of RMS and Guarantor and their respective consolidated Subsidiaries, each on a
consolidated basis as of the end of each such quarter and for the then elapsed
portion of the fiscal year, setting forth, in each case, in comparative form the
corresponding figures for the corresponding periods of the preceding fiscal year
(or in the case of the balance sheet, as of the end of the previous fiscal year,
and in the case of the statement of stockholders’ equity, no comparative
disclosure), certified by a financial officer of RMS or Guarantor (acceptable to
the Purchaser and Agent), as applicable, as presenting fairly the financial
position and results of operations of RMS and Guarantor and their respective
consolidated Subsidiaries and as having been prepared in accordance with GAAP
consistently applied, in each case, subject to normal year-end audit
adjustments;

(3)    As soon as is practicable, but in any event within forty-five (45) days
after the end of each of the first two months of a fiscal quarter, consolidated
unaudited balance sheets and consolidated statements of comprehensive income,
all to be in a form acceptable to the Purchaser and Agent, showing the financial
condition and results of operations of RMS and its consolidated Subsidiaries on
a consolidated basis as of the end of each such month and for the then elapsed
portion of the fiscal year, certified by a financial officer of RMS (acceptable
to the Purchaser and Agent) as presenting fairly the financial position and
results of operations of RMS and its consolidated Subsidiaries and as having
been prepared in accordance with GAAP consistently applied, in each case,
subject to normal year-end audit adjustments;

 

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(4)    [RESERVED];

(5)    Promptly upon becoming available, copies of all financial statements,
reports, notices and proxy statements sent by RMS or Guarantor or their
respective consolidated Subsidiaries in a general mailing to their respective
stockholders and of all reports and other material (including copies of all
registration statements under the Securities Act of 1933, as amended) filed by
any of them with any securities exchange or with the SEC or any governmental
authority succeeding to any or all of the functions of the SEC; provided,
however, that this clause (5) is deemed to be satisfied by RMS arranging for the
Purchaser to receive automatic email notifications from Guarantor with respect
to such items;

(6)    Promptly upon becoming available, copies of any press releases issued by
RMS and copies of any annual and quarterly financial reports that RMS or
Guarantor may be required to file with the SEC or any federal banking agency, or
any report which RMS may be required to file with the SEC or any federal banking
agency containing such financial statements, and other information concerning
RMS’s or Guarantor’s business and affairs as is required to be included in such
reports in accordance with the rules and regulations of the SEC or such federal
banking agency as may be promulgated from time to time; provided, however, that
this clause (6) is deemed to be satisfied by RMS arranging for the Purchaser to
receive automatic email notifications from Guarantor with respect to such items;
and

(7)    Such supplements to the aforementioned documents and such other
information regarding the operations, business, affairs and financial condition
of the Seller or Guarantor or their respective consolidated Subsidiaries as the
Purchaser may reasonably request.

 

  (B) [RESERVED].

 

  (C) Other Information. Upon the request of the Purchaser or Agent, such other
information or reports as the Purchaser or Agent may from time to time
reasonably request.

(ii)    RMS, on a consolidated basis, shall comply with the following financial
covenants:

 

  (A) RMS shall maintain as of the end of each calendar month an Adjusted
Tangible Net Worth of not less than $60,000,000.

 

  (B) At all times RMS shall have cash (other than Restricted Cash) and Cash
Equivalents in an amount of not less than $20,000,000.

 

  (C)

As of the end of each calendar month, RMS’s ratio of Warehouse Indebtedness
(excluding Nonrecourse Debt and all HMBS security obligations and any other
securitization obligations of RMS and

 

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  excluding all Indebtedness that is not reflected on RMS’s financial
statements) to Tangible Net Worth shall not exceed 10:1.

 

  (D) RMS shall not report a loss of Adjusted EBITDA in excess of: (a) for the
Test Period ending December 31, 2017, $20,000,000; (b) for the Test Period
ending March 31, 2018, $15,000,000; (c) for the Test Periods ending June 30,
2018, September 31, 2018 or December 31, 2018, $10,000,000 and (d) thereafter,
as mutually agreed by the parties hereto.

(iii)    Certifications. Seller shall execute and deliver an officer’s
compliance certificate substantially in the form of Exhibit A attached hereto
(i) within forty-five (45) days after the end of each calendar month (other than
a calendar month which is also the last month in a fiscal quarter), (ii) within
forty-five (45) days after the end of each of the first three fiscal quarters of
each fiscal year of RMS and (iii) within ninety (90) days after the end of each
fiscal year of RMS.

(h)    Agency Reporting. RMS shall comply with the applicable reporting
requirements of the Agency Guide and HUD.

(i)    Notice of Material Events. Seller shall promptly inform the Purchaser and
Agent in writing of any of the following:

(i)    any Default, Event of Default by Seller or any other Person (other than
Purchaser or Purchaser’s Affiliates) of any material obligation under any
Program Document, or the occurrence or existence of any event or circumstance
that Seller reasonably expects will with the passage of time become a Default,
Event of Default by Seller or any other Person;

(ii)    any material reduction in the insurance coverage of RMS as required to
be maintained pursuant to Section 14(q) hereof, or any other Person pursuant to
any Program Document, with copy of evidence of same attached;

(iii)    the commencement of, or any determination in, any litigation,
investigation (to the extent notice may be given), proceeding, sanctions or
suspension between Seller or Guarantor, on the one hand, and any Governmental
Authority (or any other Person, but only with respect to material litigation),
on the other which, in any case, could reasonably be expected to have a Material
Adverse Effect with respect to the Seller;

(iv)    any change in accounting policies or financial reporting practices of
Seller which could reasonably be expected to have a Material Adverse Effect;

(v)    any event, circumstance or condition that has resulted, or has a
reasonable likelihood of resulting in either a Material Adverse Change or a
Material Adverse Effect with respect to Seller;

(vi)    [RESERVED];

 

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(vii)    any financial covenants a Seller becomes subject to or any change or
modification to, or waiver of compliance with, any financial covenants Seller is
obligated to comply with, in any case, under any repurchase agreement or other
warehouse financing related to new origination mortgage loans, provided notice
shall only be required if (A) such financial covenant is more favorable to the
Purchaser than the financial covenant(s) set forth in this Agreement,
considering the definitions and calculation of the financial covenant(s) for
which notice and analysis is sought, or (B) a substantially similar financial
covenant is not set forth in this Agreement;

(viii)    upon Seller becoming aware of any penalties, sanctions or charges
levied, or threatened to be levied (which in the case of any penalties,
sanctions or charges of a monetary nature, the amount of any such penalty,
sanction or charge is material), against Seller or any change or threatened
change in Approval status, or the commencement of any non-routine audit,
investigation (to the extent notice may be given concerning any such audit or
investigation), or the institution of any action or the threat of institution of
any action against Seller by any Agency, or any supervisory or regulatory
Governmental Authority (including, but not limited to HUD and FHA) supervising
or regulating the origination or servicing of mortgage loans by, or the issuer
status of, Seller, notice of which is permitted to be given by Seller under
applicable law, rule or regulation;

(ix)    any Change in Control of Seller, provided that such notice may be given
in accordance with the period of time indicated in Section 14(p); or

(x)    upon Seller becoming aware of any termination or threatened termination
by the Agency of the Custodian as an eligible custodian.

(j)    Maintenance of Approvals. RMS shall take all necessary actions to
maintain its material Approvals (including any obtained after the date of this
Agreement) at all times during the term of this Agreement. If, for any reason,
RMS ceases to maintain any such Approval, RMS shall so notify the Purchaser and
Agent promptly.

(k)    Maintenance of Licenses. Seller shall and shall cause the REO Subsidiary
to (i) maintain (or cause the Nominee to maintain, as applicable) all licenses,
permits or other approvals necessary for Seller to conduct its business and to
perform its obligations under the Program Documents, (ii) remain in good
standing in each jurisdiction in which it is legally required to qualify to do
business, (iii) comply in all material respects with all laws of each state in
which it conducts business or any Mortgaged Property is located, and
(iv) conduct its business in accordance with applicable law in all material
respects.

(l)    Taxes, Etc. Seller shall and shall cause the REO Subsidiary to pay and
discharge or cause to be paid and discharged, when due all taxes, assessments
and governmental charges or levies imposed upon it or upon its income and
profits or upon any of its Property, real, personal or mixed (including without
limitation, the Purchased Assets) or upon any part thereof, as well as any other
lawful claims which, if unpaid, might become a Lien upon such properties or any
part thereof, except for any such taxes, assessments and governmental charges,
levies or claims as are appropriately contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves are
provided. Seller shall file on a timely basis all federal, and

 

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state and local tax and information returns, reports and any other information
statements or schedules required to be filed by or in respect of it.

(m)    Nature of Business. Seller shall not make any material change in the
nature of its business as carried on at the date hereof.

(n)    UCC1 Financing Statements. Seller shall take all actions necessary to
maintain Purchaser’s first priority perfected security interest in the Purchased
Assets.

(o)    Use of Custodian. Without the prior written consent of the Purchaser,
Seller shall use no third party custodian as document custodian other than the
Custodian for the Mortgage File relating to the Mortgage Loans.

(p)    Merger of Seller. Seller shall not, at any time, directly or indirectly
(i) liquidate or dissolve or enter into any consolidation or merger or be
subject to a Change in Control without providing the Purchaser and Agent with
not less than forty-five (45) days’ prior written notice of such event;
(ii) form or enter into any partnership, joint venture, syndicate or other
combination which would have a Material Adverse Effect with respect to Seller;
or (iii) make any Material Adverse Change with respect to Seller.

(q)    Insurance. RMS shall obtain and maintain insurance with responsible
companies in such amounts and against such risks as are customarily carried by
business entities engaged in similar businesses similarly situated, including
without limitation, the insurance required to be obtained and maintained by the
Agency pursuant to the Agency Guide, and will furnish the Purchaser and Agent on
request full information as to all such insurance, and provide within
fifteen (15) days after receipt of such request the certificates or other
documents evidencing renewal of each such policy. RMS shall continue to maintain
coverage, for itself and its Subsidiaries, that encompasses employee dishonesty,
forgery or alteration, theft, disappearance and destruction, robbery and safe
burglary, Property (other than money and securities), and computer fraud in an
aggregate amount of at least such amount as is required by the Agency.

(r)    Affiliate Transaction. Except as contemplated by this Agreement, without
providing the Purchaser with not less than forty-five (45) days’ prior written
notice of such event, Seller shall not, at any time, directly or indirectly,
sell, lease or otherwise transfer any substantial Property or substantial assets
to, or otherwise acquire any material Property or material assets from, or
otherwise engage in any transactions with, any of its Affiliates (other than its
Subsidiaries) unless the terms thereof are no less favorable to Seller, than
those that could be obtained at the time of such transaction in an arm’s length
transaction with a Person who is not such an Affiliate.

(s)    Change of Fiscal Year. Seller shall not, at any time, directly or
indirectly, except upon ninety (90) days’ prior written notice to the Purchaser
and Agent, change the date on which its fiscal year begins from its current
fiscal year beginning date.

(t)    Transfer of Servicing Rights, Servicing Files and Servicing. With respect
to the Servicing Rights of each Mortgage Loan subject to a Transaction, RMS
shall transfer such Servicing Rights to the Purchaser or its designee on the
related Purchase Date. With respect to the Servicing Files and the physical and
contractual servicing of each Mortgage Loan subject to a

 

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Transaction to the extent in the possession of Seller, Seller shall deliver such
Servicing Files and the physical and contractual servicing to the Purchaser or
its designee upon the expiration of the Servicing Term unless either such
Servicing Term is renewed by the Purchaser or the termination of the Seller as
servicer pursuant to Section 16. Seller’s transfer of the Servicing Rights,
Servicing Files and the physical and contractual servicing under this Section
shall be in accordance with customary standards in the industry including the
transfer of the gross amount of all escrows, if any, held for the related
Mortgagors (without reduction for unreimbursed advances or “negative escrows”).

(u)    Audit and Approval Maintenance. RMS shall (i) at all times maintain
copies of relevant portions of all final written Agency audits, examinations,
evaluations, monitoring reviews and reports of its origination and servicing
operations (including those prepared on a contract basis for any such agency) in
which there are material adverse findings, including without limitation notices
of defaults, notices of termination of approved status, notices of imposition of
supervisory agreements or interim servicing agreements, and notices of
probation, suspension, or non-renewal, and all necessary approvals from the
Agency, and (ii) provide copies of all such audits, examinations, evaluations,
monitoring reviews and reports to the Agent in connection with any annual audit
by the Agent.

(v)    REO Subsidiary Governing Documents. Neither the LLC Agreement nor the REO
Subsidiary’s certificate of formation nor any other governing document of the
REO Subsidiary may be amended without the Agent’s prior written consent.

(w)    Fees and Expenses. Seller shall timely pay to the Purchaser all actual
out of pocket fees and expenses required to be paid by Seller hereunder and
under any other Program Document to the Purchaser in immediately available
funds, and without deduction, set-off or counterclaim in accordance with the
Purchaser’s Wire Instructions.

(x)    Agency Status. Once RMS or any of its subservicers has obtained any
status with any of the Agency’s mortgage loan pools for which RMS is issuer or
servicer, RMS shall not take or omit to take any act that (i) would result in
the suspension or loss of any of such status, or (ii) after which RMS or any
such relevant subservicer would no longer be in good standing with respect to
such status, or (iii) after which RMS or any such relevant subservicer would no
longer satisfy all applicable Agency net worth requirements, if both (x) all of
the material effects of such act or omission shall not have been cured by RMS or
waived by the Agency before termination of such status and (y) the termination
of such status could reasonably be expected to have a Material Adverse Effect.

(y)    Further Documents. Seller shall, upon request of Purchaser or Agent,
promptly execute and deliver to Purchaser or Agent all such other and further
documents and instruments of transfer, conveyance and assignment, and shall take
such other action as Purchaser or Agent may require more effectively to
transfer, convey, assign to and vest in Purchaser and to put Purchaser in
possession of the Property to be transferred, conveyed, assigned and delivered
hereunder and otherwise to carry out more effectively the intent of the
provisions under this Agreement.

 

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(z)    Due Diligence. Seller will permit the Purchaser, Agent or their
respective agents or designees, including the Verification Agent, to perform due
diligence reviews on the Mortgage Loans subject to each Transaction hereunder
within thirty (30) days following the related Purchase Date. Seller shall
cooperate in all respects with such diligence and shall provide the Purchaser,
Agent or their respective agents or designees, including the Verification Agent,
with all loan files and other information (including, without limitation, RMS’s
quality control procedures and results) reasonably requested by the Purchaser,
Agent or their respective agents or designees, including the Verification Agent,
and shall bear all costs and expenses associated with such due diligence.

 

15. REPURCHASE OF MORTGAGE LOANS

Upon discovery by Seller of a breach of any of the representations and
warranties set forth on Exhibit B to this Agreement, Seller shall give prompt
written notice thereof to the Purchaser and Agent. Upon any such discovery by
Purchaser, Purchaser will notify Seller. It is understood and agreed that the
representations and warranties set forth in Exhibit B to this Agreement with
respect to the Eligible Mortgage Loans shall survive delivery of the respective
Mortgage Files to the Purchaser or Custodian with respect to the Eligible
Mortgage Loans and shall inure to the benefit of the Purchaser. The fact that
the Purchaser has conducted or has failed to conduct any partial or complete due
diligence investigation in connection with its purchase of any Eligible Mortgage
Loan shall not affect the Purchaser’s right to demand repurchase or any other
remedy as provided under this Agreement. Seller shall, within five (5) Business
Days of the earlier of Seller’s discovery or receipt of notice with respect to
any Eligible Mortgage Loan of (i) any breach of a representation or warranty
contained in Exhibit B of this Agreement or (ii) any failure to deliver any of
the items required to be delivered as part of the Mortgage File within the time
period required for delivery pursuant to the Custodial Agreement, promptly cure
such breach or delivery failure in all material respects. If within five (5)
Business Days after the earlier of Seller’s discovery of such breach or delivery
failure or receipt of notice thereof that such breach or delivery failure has
not been remedied by Seller, Seller shall promptly upon receipt of written
instructions from the Purchaser, at Purchaser’s option, repurchase such Eligible
Mortgage Loan at a purchase price equal to the Repurchase Price with respect to
such Eligible Mortgage Loan by wire transfer to the account designated by
Purchaser.

 

16. SERVICING OF THE MORTGAGE LOANS; SERVICER TERMINATION

(a)    RMS to Subservice.

(i)    Upon payment of the Purchase Price, the Purchaser shall own the servicing
rights related to the Mortgage Loans including the Mortgage File. RMS and
Purchaser agree and acknowledge that the Mortgage Loans sold hereunder shall be
sold to Purchaser on a servicing-released basis, and that Purchaser is engaging
and hereby does engage RMS to provide subservicing of each Mortgage Loan and REO
Property for the benefit of Purchaser.

(ii)    So long as a Mortgage Loan is subject to a Transaction or an REO
Property is owned by the REO Subsidiary, RMS shall neither assign, encumber or
pledge its obligation to subservice the Mortgage Loans or REO Properties in
whole or in part,

 

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nor delegate its rights or duties under this Agreement (to other than a
subservicer) without the prior written consent of the Purchaser and Agent, the
granting of which consent shall be in the sole discretion of Purchaser and
Agent. RMS hereby acknowledges and agrees that (A) the Purchaser is entering
into this Agreement in reliance upon RMS’s representations as to the adequacy of
its financial standing, servicing facilities, personnel, records, procedures,
reputation and integrity, and the continuance thereof; and (B) RMS’s engagement
hereunder to provide mortgage servicing for the benefit of the Purchaser is
intended by the parties to be a “personal service contract” and RMS is hereunder
intended by the parties to be an “independent contractor”.

(iii)    RMS shall subservice and administer the Mortgage Loans and REO
Properties on behalf of the Purchaser in accordance with Accepted Servicing
Practices. RMS shall have no right to modify or alter the terms of any Mortgage
Loan or consent to the modification or alteration of the terms of any Mortgage
Loan except in Strict Compliance with the related Agency Program. RMS shall at
all times maintain accurate and complete records of its servicing of the
Mortgage Loans and REO Properties, and Agent may, at any time during RMS’s
business hours on reasonable notice, examine and make copies of such Servicing
Records. RMS agrees that the Purchaser is the 100% beneficial owner of all
Servicing Records relating to the Mortgage Loans and REO Properties. RMS
covenants to hold or cause to be held such Servicing Records for the benefit of
the Purchaser and to safeguard such Servicing Records and to deliver them
promptly to Agent or its designee (including the Custodian) at Agent’s request
or otherwise as required by operation of this Section 16.

(b)    Servicing Term. RMS shall subservice such Mortgage Loans and REO
Properties for a term of thirty (30) days commencing as of the related Purchase
Date, which term may be extended in writing by Agent in its sole discretion, for
an additional thirty-day period (each, a “Servicing Term”); provided, that the
Purchaser and/or Agent shall have the right to immediately terminate the
Servicer at any time following the occurrence of a Servicer Termination Event.
If such Servicing Term is not extended by Agent or if the Purchaser or Agent has
terminated RMS as a result of a Servicer Termination Event, RMS shall transfer
such servicing to the Purchaser or its designee at no cost or expense to
Purchaser as provided in Section 14(t). RMS shall hold or cause to be held all
Escrow Payments collected with respect to the Mortgage Loans in segregated
accounts for the sole benefit of the Mortgagor and shall apply the same for the
purposes for which such funds were collected. If RMS should discover that, for
any reason whatsoever, it has failed to perform fully its servicing obligations
with respect to the Mortgage Loans or REO Properties, RMS shall promptly notify
the Purchaser and Agent.

(c)    Servicing Reports. Within five (5) Business Days after the end of each
month, and as requested by Purchaser and/or Agent from time to time, RMS shall
furnish to the Purchaser, Agent and Verification Agent reports in form and scope
satisfactory to the Purchaser, setting forth (i) data regarding the performance
of the individual Mortgage Loans, (ii) a summary report of all Mortgage Loans
serviced by RMS and originated pursuant to the Agency Guide, HUD and/or FHA
guidelines (on a portfolio basis) and all REO Properties serviced by RMS, in
each case, for the immediately preceding month, including, without limitation,
all collections,

 

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delinquencies, defaults, defects, claim rates, losses and recoveries and
(iii) any other information reasonably requested by Purchaser, Agent or
Verification Agent.

(d)    Backup Servicer. The Agent, in its sole discretion, may appoint a backup
servicer at any time during the term of this Agreement. In such event, RMS shall
commence monthly delivery to such backup servicer of the servicing information
required to be delivered to the Purchaser and Agent pursuant to Section 16(c)
hereof and any other information reasonably requested by backup servicer, all in
a format that is reasonably acceptable to such backup servicer. The Purchaser
shall pay all costs and expenses of such backup servicer, including, but not
limited to all fees of such backup servicer in connection with the processing of
such information and the maintenance of a servicing file with respect to the
applicable Mortgage Loans and/or REO Properties. RMS shall cooperate fully with
such backup servicer in the event of a transfer of servicing hereunder and will
provide such backup servicer with all documents and information necessary for
such backup servicer to assume the servicing of the applicable Mortgage Loans
and/or REO Properties.

(e)    Collection Account. On or prior to April 23, 2018, RMS shall establish
and maintain the Collection Account with the Bank in the Purchaser’s name for
the sole and exclusive benefit of the Purchaser. The Servicer shall deposit or
credit (or cause to be deposited or credited) to the appropriate Collection
Account all amounts collected on account of the related Mortgage Loans and REO
Properties within two (2) Business Days of receipt and remit such collections in
accordance with Section 16(f) hereof. Following the occurrence and during the
continuance of an Event of Default, such amounts shall be deposited or credited
irrespective of any right of setoff or counterclaim arising in favor of RMS (or
any third party claiming through it) under any other agreement or arrangement.
Amounts on deposit in a Collection Account shall be distributed as provided in
Section 16(f).

(f)    Income Payments.

(i)    Where a particular term of a Transaction extends over the date on which
Income is paid in respect of any Purchased Asset subject to that Transaction,
Income collected in respect of the Mortgage Loans shall be the Property of the
Purchaser subject to subsections 16(f)(ii) and (iii) below. The Collection
Account shall be subject to the terms and conditions of the Collection Account
Control Agreement from and after the date of such Collection Account Control
Agreement.

(ii)    Except as otherwise provided in Section 16(f)(iv), on the Monthly
Payment Date, the Purchaser shall cause amounts deposited in its respective
Collection Account to be released to RMS, which amounts shall be applied by RMS
to (A) reduce outstanding Price Differential due and payable in respect of
Purchased Assets for which the Purchaser has received the related Repurchase
Price (other than Price Differential) pursuant to Section 3(f) during the prior
calendar month, (B) reduce the Repurchase Price for all outstanding
Transactions, and (C) pay all other Obligations then due and payable to the
Purchaser. Notwithstanding anything set forth in this Agreement, RMS can remit
on a more frequent basis with the written consent of the Purchaser and the
Agent.

 

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(iii)    Notwithstanding anything herein or in the Collection Account Control
Agreements to the contrary, RMS shall in no event be permitted to withdraw funds
from the Collection Account to the extent that such action would result in the
creation of a Margin Deficit (unless prior thereto or simultaneously therewith
RMS cures such Margin Deficit in accordance with Section 7), or if an Event of
Default is then continuing. Further, if an uncured Margin Deficit exists as of
such Monthly Payment Date, RMS shall cause the Bank to disburse the Income
related to the Transaction for which the Margin Deficit exists to the Purchaser
(up to the amount of such Margin Deficit), which amounts shall be applied by
Purchaser to reduce the related Repurchase Price.

(iv)    If a successor servicer takes delivery of such Mortgage Loans and rights
to service such REO Properties either under the circumstances set forth in
Section 16(i) or otherwise, all amounts deposited in the Collection Account
shall be paid to the Purchaser promptly upon such delivery.

(g)    [Reserved].

(h)    With respect to each Eligible Mortgage Loan, RMS shall (i) complete the
U.S. Department of Housing and Urban Development’s form for Single-Family
Application for Insurance Benefits in its own name, (ii) ensure the details for
such Mortgage Loan on the Home Equity Reverse Mortgage Information Technology
(HERMIT) servicing system reflect that the Investor Name in the “Servicer
Information” section provides RMS’s name, (iii) service such Mortgage Loan in
Strict Compliance with all FHA requirements and (iv) deposit all FHA claims
payments on such Mortgage Loan into the Collection Account of the Purchaser
within two (2) Business Days receipt thereof.

(i)    Servicer Termination. Agent, in its sole discretion, may terminate RMS’s
rights and obligations as subservicer of the affected Mortgage Loans and REO
Properties and require RMS to deliver the related Servicing Records to Agent or
its designee upon the occurrence of (i) an Event of Default or (ii) upon the
expiration of the Servicing Term as set forth in Section 16(b) by delivering
written notice to RMS requiring such termination. Such termination shall be
effective upon RMS’s receipt of such written notice; provided, that RMS’s
subservicing rights shall be terminated immediately upon the occurrence of a
Servicer Termination Event, regardless of whether notice of such event shall
have been given to or by Agent, Purchaser or RMS. Upon any such termination, all
authority and power of RMS respecting its rights to subservice and duties under
this Agreement relating thereto, shall pass to and be vested in the successor
servicer appointed by Agent and Agent is hereby authorized and empowered to
transfer such rights to subservice the Mortgage Loans and REO Properties for
such price and on such terms and conditions as Agent shall reasonably determine.
RMS shall promptly take such actions and furnish to Agent such documents that
Agent deems necessary or appropriate to enable Agent to enforce such Mortgage
Loans and manage such REO Properties and shall perform all acts and take all
actions so that the Mortgage Loans and REO Properties and all files and
documents relating to such Mortgage Loans and REO Properties held by RMS,
together with all escrow amounts relating to such Mortgage Loans and REO
Properties, are delivered to the successor servicer, including but not limited
to preparing, executing and delivering to the successor servicer any and all
documents and other instruments, placing in the successor servicer’s possession
all Servicing Records pertaining to such Mortgage Loans and REO

 

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Properties and doing or causing to be done, all at RMS’s sole expense. To the
extent that the approval of the Agency is required for any such sale or
transfer, RMS shall fully cooperate with Agent to obtain such approval. All
amounts paid by any purchaser of such rights to service or subservice the
Mortgage Loans and REO Properties shall be the Property of the Purchaser. The
subservicing rights required to be delivered to the successor servicer in
accordance with this Section 16(i) shall be delivered free of any servicing
rights in favor of RMS or any third party (other than the Purchaser) and free of
any title, interest, lien, encumbrance or claim of any kind of RMS other than
record title to the Mortgages relating to the Mortgage Loans and the right and
obligation to repurchase the Mortgage Loans hereunder or remove the related REO
Properties from the REO Subsidiary. No exercise by Agent or the Purchaser of
their rights under this Section 16(i) shall relieve RMS of responsibility or
liability for any breach of this Agreement.

 

17. EVENTS OF DEFAULT

With respect to any Transactions covered by or related to this Agreement, the
occurrence of any of the following events shall constitute an “Event of
Default”:

(a)    Seller fails to transfer the Purchased Assets to the Purchaser on the
applicable Purchase Date (provided Purchaser has tendered the related Purchase
Price);

(b)    Seller either fails to repurchase the Purchased Assets on the applicable
Repurchase Date or fails to perform its obligations under Section 7 or the last
sentence of Section 15;

(c)    Seller shall fail to (i) remit to the Purchaser when due any payment
required to be made under the terms of this Agreement, any of the other Program
Documents or any other contracts or agreements delivered in connection herewith
or therewith, or (ii) perform, observe or comply with any material term,
condition, covenant or agreement contained in this Agreement or any of the other
Program Documents (other than the other “Events of Default” set forth in this
Section 17) or any other contracts or agreements delivered in connection
herewith or therewith, and, in the case of clause (ii), such failure is not
cured within the time period expressly provided for therein, or, if no such cure
period is provided, within two (2) Business Days (or, in the case of
Section 14(k)(i) and (ii) hereof, ten (10) Business Days) of the earlier of
(x) Seller’s receipt of written notice from Purchaser, Agent or Custodian of
such breach or (y) the date on which Seller obtains notice or knowledge of the
facts giving rise to such breach;

(d)    Any representation or warranty made by Seller or Guarantor (or any of
Seller’s or Guarantor’s officers) in the Program Documents or in any other
document delivered in connection therewith, shall have been incorrect or untrue
in any material respect when made or repeated or deemed by the terms thereof to
have been made or repeated (other than the representations or warranties in
Exhibit B, which shall be considered solely for the purpose of determining
whether the related Purchased Asset is an Eligible Mortgage Loan), which
continues unremedied for a period of five (5) Business Days (or, in the case of
Section 13(a)(w) and (x), ten (10) Business Days) after receipt of written
notice, unless (i) Seller shall have made any such representation or warranty
with the knowledge that it was materially false or misleading at the time made
or repeated or deemed to have been made or repeated, or (ii) any such
representation

 

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or warranty shall have been determined by Purchaser or Agent in its sole
discretion to be materially false or misleading on a regular basis);

(e)    Seller, Guarantor, any of Seller’s Subsidiaries shall be in a continuing
default under, or fail to perform as requested under, or shall otherwise breach
the material terms of, in each case beyond any applicable cure period and which
has not been waived, and with respect to (i) any warehouse, credit, repurchase,
line of credit, financing, derivative, hedging or forward sale agreements or
other similar agreement relating to any Indebtedness (other than Nonrecourse
Debt) in an amount greater than $5,000,000 between Seller, Guarantor, any of
Seller’s Subsidiaries on the one hand, and any Person, on the other hand,
(ii) any other agreement relating to any Indebtedness (other than Nonrecourse
Debt) in an amount greater than $5,000,000 between Seller, Guarantor, any of
Seller’s Subsidiaries, on the one hand, and any Person, on the other hand, or
(iii) any other agreement (including, without limitation, the Program
Documents), indebtedness, derivative or obligation entered into between Seller,
Guarantor, any of Seller’s Subsidiaries and the Purchaser or any of their
Affiliates;

(f)    Any Act of Insolvency of the Seller or Guarantor or any of their
respective Affiliates;

(g)    Any final judgment or order for the payment of money in excess of
$5,000,000 in the aggregate (to the extent that it is, in the reasonable
determination of Purchaser or Agent, uninsured and provided that any insurance
or other credit posted in connection with an appeal shall not be deemed
insurance for these purposes) shall be rendered against Seller or Guarantor or
any of Seller’s Subsidiaries by one or more courts, administrative tribunals or
other bodies having jurisdiction over them and the same shall not be discharged
(or provisions shall not be made for such discharge) satisfied, or bonded, or a
stay of execution thereof shall not be procured, within the later of sixty
(60) days from the date of entry thereof and the date specified therein and
Seller or Guarantor or any of Seller’s Subsidiaries, as applicable, shall not,
within said period, or such longer period during which execution of the same
shall have been stayed or bonded, appeal therefrom and cause the execution
thereof to be stayed during such appeal;

(h)    Any Governmental Authority or any person, agency or entity acting or
purporting to act under governmental authority (i) shall have taken any action
to condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the Property of Seller or Guarantor or any of their
respective Affiliates, (ii) shall have taken any action to displace the
management of Seller or any of Seller’s Affiliates or to curtail its authority
in the conduct of the business of Seller or any of Seller’s Affiliates and such
action could reasonably be expected to have a Material Adverse Effect or
(iii) takes any action in the nature of enforcement to remove, limit or restrict
the approval of Seller or any of Seller’s Affiliates as an issuer, Purchaser or
a seller/servicer of Mortgage Loans or securities backed thereby and such action
could reasonably be expected to have a Material Adverse Effect;

(i)    RMS shall fail to comply with any of the financial covenants set forth in
Section 14(g)(ii), or Guarantor shall fail to comply with any of the financial
covenants set forth in the Guaranty or with the covenant set forth in Section 4
of the Pricing Side Letter;

(j)    Any Material Adverse Effect shall have occurred;

 

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(k)    This Agreement shall for any reason cease to create a valid first
priority security interest or ownership interest upon transfer in any material
portion of the Purchased Assets or Purchased Items purported to be covered
hereby;

(l)    A Change in Control of Seller shall have occurred that has not been
approved by Agent;

(m)    Purchaser or Agent shall reasonably request, specifying the reasons for
such request, reasonable information, and/or written responses to such requests,
regarding the financial well-being of Seller, and such reasonable information
and/or responses shall not have been provided within ten (10) Business Days of
such request;

(n)    [RESERVED];

(o)    REO Subsidiary breaches any of its Separateness Covenants;

(p)    Change of Servicer without consent of the Agent;

(q)    [RESERVED];

(r)    Failure of Servicer to meet the qualifications to maintain all requisite
Approvals, such Approvals are revoked or such Approvals are materially modified;

(s)    [RESERVED];

(t)    With respect to any Mortgage Loans sold to Purchaser hereunder, failure
of RMS or Servicer to use its best efforts to cause FHA to make claims payments
to the Servicer; and

(u)    With respect to any Mortgage Loans sold to Purchaser hereunder, failure
of RMS to cause the Servicer to remit those FHA claims payments into the
Collection Account within two (2) Business Days of receipt thereof.

 

18. REMEDIES

Upon the occurrence of (i) an Event of Default (other than that referred to in
Section 17(f)), the Purchaser, at its option, shall have the right to exercise
any or all of the following rights and remedies and (ii) an Event of Default
referred to in Section 17(f), the following rights and remedies shall
immediately and automatically take effect without any further action by any
Person.

(a)    (i) The Repurchase Date for each Transaction hereunder shall, if it has
not already occurred, be deemed immediately to occur (except that, in the event
that the Purchase Date for any Transaction has not yet occurred as of the date
of such exercise or deemed exercise, such Transaction shall be deemed
immediately canceled). Seller’s Obligations hereunder to repurchase all
Purchased Assets at the Repurchase Price therefor on the Repurchase Date in such
Transactions shall thereupon become immediately due and payable; all Income paid
after such exercise or deemed exercise shall be remitted to and retained by
Purchaser and applied to the aggregate Repurchase Prices and any other amounts
owing by Seller hereunder; Seller shall

 

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immediately deliver to the Purchaser or Purchaser’s designee any and all
original papers, records and files relating to the Purchased Assets subject to
such Transaction then in its possession and/or control; and all right, title and
interest in and entitlement to such Purchased Assets and Servicing Rights
thereon shall become Property of the Purchaser.

(ii)    The Purchaser may (A) sell, on or following the Business Day following
the date on which the Repurchase Price becomes due and payable pursuant to
Section 18(a)(i) without notice or demand of any kind, at a public or private
sale and at such price or prices as the Purchaser may reasonably deem
satisfactory, any or all or portions of the Purchased Assets on a
servicing-released or servicing-retained basis, as the Purchaser may determine
in its sole discretion and/or (B) in its sole discretion elect, in lieu of
selling all or a portion of such Purchased Assets, to give Seller credit for
such Purchased Assets (including credit for the Servicing Rights in respect of
sales on a servicing-retained basis) in an amount equal to the Market Value of
the Purchased Assets against the aggregate unpaid Repurchase Price and any other
amounts owing by Seller hereunder. Seller shall remain liable to the Purchaser
for any amounts that remain owing to the Purchaser following a sale and/or
credit under the preceding sentence. The proceeds of any disposition of
Purchased Assets shall be applied first to the reasonable costs and expenses
including but not limited to legal fees incurred by either Purchaser in
connection with or as a result of an Event of Default; second to costs of cover
and/or related hedging transactions; third to the aggregate Repurchase Prices;
and fourth to all other Obligations.

(iii)    The parties recognize that it may not be possible to purchase or sell
all of the Purchased Assets on a particular Business Day, or in a transaction
with the same purchaser, or in the same manner because the market for such
Purchased Assets may not be liquid. In view of these characteristics of the
Purchased Assets, the parties agree that liquidation of a Transaction or the
underlying Purchased Assets does not require a public purchase or sale and that
a good faith private purchase or sale shall be deemed to have been made in a
commercially reasonable manner. Accordingly, the Purchaser may elect the time
and manner of liquidating any Purchased Asset and nothing contained herein shall
obligate the Purchaser to liquidate any Purchased Asset upon the occurrence of
an Event of Default or to liquidate all Purchased Assets in the same manner or
on the same Business Day or shall constitute a waiver of any right or remedy of
the Purchaser. Notwithstanding the foregoing, the parties to this Agreement
agree that the Transactions have been entered into in consideration of and in
reliance upon the fact that all Transactions hereunder constitute a single
business and contractual obligation and that each Transaction has been entered
into in consideration of the other Transactions.

(iv)    The Purchaser may terminate the Agreement.

(b)    Seller hereby acknowledges, admits and agrees that Seller’s obligations
under this Agreement are recourse obligations of Seller. In addition to its
rights hereunder, the Purchaser shall have the right to proceed against any of
Seller’s assets which may be in the possession of Purchaser, any of Purchaser’s
Affiliates or their designees (including the Custodian), including the right to
liquidate such assets and to set-off the proceeds against monies owed by Seller
to Purchaser pursuant to this Agreement. The Purchaser may set off cash, the
proceeds of the

 

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liquidation of the Purchased Assets and Additional Purchased Mortgage Loans and
all other sums or obligations owed by Purchaser to Seller or against all of
Seller’s Obligations to Purchaser, or Seller’s obligations to Purchaser under
any other agreement between the parties, or otherwise, whether or not such
obligations are then due, without prejudice to Purchaser’s right to recover any
deficiency.

(c)    The Purchaser shall have the right to obtain physical possession of the
Records and all other files of Seller relating to the Purchased Assets and all
documents relating to the Purchased Assets which are then or may thereafter come
into the possession of Seller or any third party acting for Seller and Seller
shall deliver to Purchaser such assignments as Purchaser shall request.

(d)    The Purchaser shall have the right to direct all Persons servicing the
Purchased Assets to take such action with respect to the Purchased Assets as
Purchaser determines appropriate, including, without limitation, using its
rights under a power of attorney granted pursuant to Section 9(b) hereof.

(e)    The Purchaser shall, without regard to the adequacy of the security for
the Obligations, be entitled to the appointment of a receiver by any court
having jurisdiction, without notice, to take possession of and protect, collect,
manage, liquidate, and sell the Purchased Assets or any portion thereof, collect
the payments due with respect to the Purchased Assets or any portion thereof,
and do anything that Purchaser is authorized hereunder to do. Seller shall pay
all costs and expenses incurred by the Purchaser in connection with the
appointment and activities of such receiver, and such shall be deemed part of
the Obligations hereunder.

(f)    The Purchaser may, at its option, enter into one or more hedging
transactions covering all or a portion of the Purchased Assets, and Seller shall
be responsible for all damages, judgments, costs and expenses of any kind which
may be imposed on, incurred by or asserted against Purchaser relating to or
arising out of such hedging transactions; including without limitation any
losses resulting from such hedging transactions, and such shall be deemed part
of the Obligations hereunder.

(g)    In addition to all the rights and remedies specifically provided herein,
the Purchaser shall have all other rights and remedies provided by applicable
federal, state, foreign and local laws, whether existing at law, in equity or by
statute, including, without limitation, all rights and remedies available to a
purchaser/secured party under the Uniform Commercial Code.

Except as otherwise expressly provided in this Agreement, the Purchaser shall
have the right to exercise any of its rights and/or remedies without
presentment, demand, protest or further notice of any kind, other than as
expressly set forth herein, all of which are hereby expressly waived by Seller.

The Purchaser may enforce its rights and remedies hereunder without prior
judicial process or hearing, and Seller hereby expressly waives, to the extent
permitted by law, any right Seller might otherwise have to require Purchaser to
enforce its rights by judicial process. Seller also waives, to the extent
permitted by law, any defense Seller might otherwise have to the Obligations, or
any guaranty thereof, arising from use of non-judicial process, enforcement and

 

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sale of all or any portion of the Purchased Assets or from any other election of
remedies. Seller recognizes that non-judicial remedies are consistent with the
usages of the trade, are responsive to commercial necessity and are the result
of a bargain at arm’s length.

Seller shall cause all sums received by it with respect to the Purchased Assets
to be deposited in the appropriate Collection Account promptly upon receipt
thereof but in no event later than twenty-four (24) hours thereafter. Seller
shall be liable to the Purchaser for the amount of all losses, costs and/or
expenses (plus interest thereon at a rate equal to the Default Rate) which
Purchaser may sustain or incur in connection with hedging transactions relating
to the Purchased Assets, conduit advances and payments for mortgage insurance.

 

19. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE

No failure on the part of Purchaser to exercise, and no delay by Purchaser in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Purchaser of any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All rights and remedies of the
Purchaser provided for herein are cumulative and in addition to any and all
other rights and remedies provided by law, the Program Documents and the other
instruments and agreements contemplated hereby and thereby, and are not
conditional or contingent on any attempt by Purchaser to exercise any of its
rights under any other related document. The Purchaser may exercise at any time
after the occurrence of an Event of Default one or more remedies permitted
hereunder, as it so desires, and may thereafter at any time and from time to
time exercise any other remedy or remedies permitted hereunder.

 

20. USE OF EMPLOYEE PLAN ASSETS

No assets of an employee benefit plan subject to any provision of ERISA shall be
used by any party hereto in a Transaction.

 

21. INDEMNITY

(a)    Seller agrees to indemnify and hold harmless the Purchaser, Agent and
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an “Indemnified Party”) from and against (and will reimburse
each Indemnified Party as the same is incurred within thirty (30) days following
receipt of an invoice therefor) any and all claims, damages, losses,
liabilities, Taxes, increased costs and all other reasonable expenses including
reasonable out-of-pocket expenses (including, without limitation, reasonable
fees and expenses of outside counsel and audit and due diligence fees) that may
be incurred by or asserted or awarded against any Indemnified Party, solely
relating to claims of third parties, in each case arising out of or in
connection with or by reason of (including without limitation, in connection
with) (i) any investigation, litigation or other proceeding (whether or not such
Indemnified Party is a party thereto) relating to, resulting from or arising out
of any of the Program Documents and all other documents related thereto, any
breach by Seller of any representation or warranty or covenant in this Agreement
or any other Program Document, and all actions taken pursuant thereto, (ii) the
Transactions, the actual or proposed use of the proceeds of the Transactions,
this Agreement or any of the transactions contemplated thereby, including,
without limitation, any

 

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acquisition or proposed acquisition, or any indemnity payable under the
servicing agreement or other servicing arrangement, (iii) the actual or alleged
presence of hazardous materials on any Property or any environmental action
relating in any way to any Property, (iv) the actual or alleged violation of any
federal, state, municipal or local predatory lending laws, or (v) the reduction
of the Principal Balance due to a cram down or similar action authorized by any
bankruptcy proceeding or other case arising out of or relating to any petition
under the Bankruptcy Code, in each case, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted directly from such
Indemnified Party’s gross negligence or willful misconduct or is the result of a
claim made by Seller against the Indemnified Party, and Seller is ultimately the
successful party in any resulting litigation or arbitration. Seller hereby
agrees not to assert any claim against either Purchaser or any of their
Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Program Documents,
the actual or proposed use of the proceeds of the Transactions, this Agreement
or any of the transactions contemplated thereby.

(b)    If Seller fails to pay when due any costs, expenses or other amounts
payable by it under this Agreement, including, without limitation, reasonable
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of Seller by Purchaser, in its sole discretion and Seller shall remain liable
for any such payments by Purchaser and such amounts shall be deemed part of the
Obligations hereunder. No such payment by Purchaser shall be deemed a waiver of
any of Purchaser’s rights under the Program Documents.

(c)    Without prejudice to the survival of any other agreement of Seller
hereunder, the covenants and obligations of Seller contained in this Section 21
shall survive the payment in full of the Repurchase Price and all other amounts
payable hereunder and delivery of the Purchased Assets by Purchaser against full
payment therefor.

 

22. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS

Seller hereby expressly waives, to the fullest extent permitted by law, every
statute of limitation on a deficiency judgment, any reduction in the proceeds of
any Purchased Assets as a result of restrictions upon Purchaser or Custodian
contained in the Program Documents or any other instrument delivered in
connection therewith, and any right that they may have to direct the order in
which any of the Purchased Assets shall be disposed of in the event of any
disposition pursuant hereto.

 

23. REIMBURSEMENT; SET-OFF

(a)    Seller agrees to pay on demand all reasonable out-of-pocket costs and
expenses of the Purchaser and Agent in connection with the initial and
subsequent negotiation, modification, renewal and amendment of the Program
Documents (including, without limitation, (A) all collateral review and UCC
search and filing fees and expenses and (B) the reasonable fees and expenses of
outside counsel for the Purchaser and Agent with respect to advising the
Purchaser and Agent as to their rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under this Agreement and any
other Program Document, with respect to

 

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negotiations with Seller or with other creditors of Seller arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors’ rights
generally and any proceeding ancillary thereto). Seller agrees to pay on demand,
with interest at the Default Rate to the extent that an Event of Default has
occurred, all costs and expenses, including without limitation, reasonable
attorneys’ fees and disbursements (and fees and disbursements of Purchaser’s and
Agent’s outside counsel) expended or incurred by the Purchaser, Agent and/or
Custodian in connection with the modification, renewal, amendment and
enforcement (including any waivers) of the Program Documents (regardless of
whether a Transaction is entered into hereunder), the taking of any action,
including legal action, required or permitted to be taken by Purchaser, Agent
(without duplication to Purchaser and Agent) and/or Custodian pursuant thereto
or by refinancing or restructuring in the nature of a “workout.” Further, Seller
agrees to pay, with interest at the Default Rate to the extent that an Event of
Default has occurred, all costs and expenses, including without limitation,
reasonable attorneys’ fees and disbursements (and fees and disbursements of
Purchaser’s and Agent’s outside counsel) expended or incurred by the Purchaser
and Agent in connection with (a) the rendering of legal advice as to such
party’s rights, remedies and obligations under any of the Program Documents,
(b) the collection of any sum which becomes due to Purchaser under any Program
Document, (c) any proceeding for declaratory relief, any counterclaim to any
proceeding, or any appeal, or (d) the protection, preservation or enforcement of
any rights of Purchaser. For the purposes of this Section 23(a), attorneys’ fees
shall include, without limitation, fees incurred in connection with the
following: (1) discovery; (2) any motion, proceeding or other activity of any
kind in connection with a bankruptcy proceeding or case arising out of or
relating to any petition under Title 11 of the United States Code, as the same
shall be in effect from time to time, or any similar law; (3) garnishment, levy,
and debtor and third party examinations; and (4) post-judgment motions and
proceedings of any kind, including without limitation any activity taken to
collect or enforce any judgment. Any and all of the foregoing amounts referred
to in this Section 23(a) shall be deemed a part of the Obligations hereunder.
Without prejudice to the survival of any other agreement of Seller hereunder,
the covenants and obligations of Seller contained in this Section 23(a) shall
survive the payment in full of the Repurchase Price and all other amounts
payable hereunder and delivery of the Purchased Assets by Purchaser against full
payment therefor.

(b)    In addition to any rights and remedies of the Purchaser under this
Agreement and at law, the Purchaser and its Affiliates shall have the right,
without prior notice to Seller, any such notice being expressly waived by Seller
to the extent permitted by applicable law, upon any amount becoming due and
payable (whether at the stated maturity, by acceleration or otherwise) by Seller
hereunder or under any other agreement entered into between Seller or any of its
Affiliates on the one hand, and Purchaser or any of its Affiliates on the other
hand, to set-off and appropriate and apply against such amount any and all
Property and deposits (general or special, time or demand, provisional or
final), in any currency, or any other credits, indebtedness or claims, in any
currency, or any other collateral (in the case of collateral not in the form of
cash or such other marketable or negotiable form, by selling such collateral in
a recognized market therefor or as otherwise permitted by law or as may be in
accordance with custom, usage or trade practice), in each case, whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by Purchaser or any Affiliate thereof to or for the credit or the account

 

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of Seller of any of its Affiliates. The Purchaser may also set-off cash and all
other sums or obligations owed by Purchaser or its Affiliates to Seller or its
Affiliates (whether under this Agreement or under any other agreement between
the parties or between Seller or any of its Affiliates, on the one hand, and
Purchaser or any of its Affiliates, on the other) against all of Seller’s
obligations to Purchaser or its Affiliates (whether under this Agreement or
under any other agreement between the parties or between Seller or any of its
Affiliates, on the one hand, and Purchaser or any of its Affiliates, on the
other), whether or not such obligations are then due. The exercise of any such
right of set-off shall be without prejudice to Purchaser’s or its Affiliate’s
right to recover any deficiency. The Purchaser agrees to promptly notify Seller
after any such set-off and application made by Purchaser; provided that the
failure to give such notice shall not affect the validity of such set-off and
application.

 

24. FURTHER ASSURANCES

Seller agrees to do such further acts and things and to execute and deliver to
the Purchaser or Agent such additional assignments, acknowledgments, agreements,
powers and instruments as are reasonably required by the Purchaser or Agent to
carry into effect the intent and purposes of this Agreement, to perfect the
interests of the Purchaser in the Purchased Assets or to better assure and
confirm unto the Purchaser its rights, powers and remedies hereunder.

 

25. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION

This Agreement supersedes and integrates all previous negotiations, contracts,
agreements and understandings among the parties relating to a sale and
repurchase of Purchased Assets and Additional Purchased Mortgage Loans, and it,
together with the other Program Documents, and the other documents delivered
pursuant hereto or thereto, contains the entire final agreement of the parties.
No prior negotiation, agreement, understanding or prior contract shall have any
validity hereafter.

 

26. TERMINATION

This Agreement shall remain in effect until the Termination Date. However, no
such termination shall affect Seller’s outstanding obligations to Purchaser at
the time of such termination. Seller’s obligations to indemnify Purchaser and
Agent pursuant to this Agreement and the other Program Documents shall survive
the termination hereof.

 

27. REHYPOTHECATION; ASSIGNMENT

(a)    The Purchaser may, in its sole election, and without the consent of the
Seller engage in repurchase transactions with the Purchased Assets or otherwise
pledge, hypothecate, assign, transfer or otherwise convey the Purchased Assets
with a counterparty of Purchaser’s choice, in all cases subject to Purchaser’s
obligation to reconvey the Purchased Assets (and not substitutes therefor) on
the Repurchase Date, all at no cost to the Seller. In the event Purchaser
engages in a repurchase transaction with any of the Purchased Assets or
otherwise pledges or hypothecates any of the Purchased Assets, Purchaser shall
have the right to assign to Purchaser’s counterparty any of the applicable
representations or warranties in Exhibit B to this Agreement and the remedies
for breach thereof, as they relate to the Purchased Assets that are subject to
such repurchase transaction.

 

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(b)    The Program Documents and the Seller’s rights and obligations thereunder
are not assignable by Seller without the prior written consent of the Purchaser.
Any Person into which Seller may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which Seller shall be
a party, or any Person succeeding to the business of Seller, shall be the
successor of Seller hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. Without any requirement for further consent of the
Seller and at no cost or expense to the Seller, the Purchaser and Agent may, in
its sole election, assign or participate all or a portion of its rights and
obligations under this Agreement and the Program Documents with a counterparty
of Purchaser’s or Agent’s choice, provided, however, that the Seller will
continue to deal directly with the Purchaser and Agent following such assignment
or participation, and, (i) with respect to any participation or (ii) any partial
assignment pursuant to which Barclays Bank PLC assigns its rights and
obligations as Purchaser, but not its rights and obligations as Agent, Agent is
the only Person entitled to enforce the terms, conditions and provisions of this
Agreement and the other Program Documents. The Purchaser or Agent shall notify
Seller of any such assignment and participation and shall maintain, for review
by Seller upon written request, a register of assignees and participants and a
copy of any executed assignment and acceptance by Purchaser or Agent and
assignee (“Assignment and Acceptance”), specifying the percentage or portion of
such rights and obligations assigned. The Seller agrees that, for any such
permitted assignment, Seller will cooperate with the prompt execution and
delivery of documents reasonably necessary for such assignment process to the
extent that Seller incurs no cost or expense that is not paid by the Purchaser
or Agent, as applicable. Upon such assignment, (a) such assignee shall be a
party hereto and to each Program Document to the extent of the percentage or
portion set forth in the Assignment and Acceptance, and shall succeed to the
applicable rights and obligations of the Purchaser or Agent hereunder, and
(b) the Purchaser or Agent shall, to the extent that such rights and obligations
have been so assigned by it to either (i) an Affiliate of the Purchaser or Agent
which assumes the obligations of Purchaser or Agent hereunder or (ii) to another
Person which assumes the obligations of Purchaser or Agent hereunder, be
released from their obligations hereunder accruing thereafter and under the
Program Documents.

(c)    The Purchaser and Agent may distribute to any prospective assignee,
participant or pledgee any document or other information delivered to the
Purchaser and/or Agent by Seller subject to the confidentiality restrictions
contained in Section 35 hereof; accordingly, such prospective assignee,
participant or pledgee shall be required to agree to confidentiality provisions
similar to those set forth in Section 35.

 

28. AMENDMENTS, ETC.

No amendment or waiver of any provision of this Agreement nor any consent to any
failure to comply herewith or therewith shall in any event be effective unless
the same shall be in writing and signed by Seller, the Purchaser and Agent, and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

 

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29. SEVERABILITY

If any provision of any Program Document is declared invalid by any court of
competent jurisdiction, such invalidity shall not affect any other provision of
the Program Documents, and each Program Document shall be enforced to the
fullest extent permitted by law.

 

30. BINDING EFFECT; GOVERNING LAW

This Agreement shall be binding and inure to the benefit of the parties hereto
and their respective successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTION
5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

31. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS

SELLER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE PROGRAM DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY
CONSENTS, ON BEHALF OF ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR
PROCEEDING. SELLER HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO,
NON-EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW
YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM
DOCUMENTS. SELLER HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF A SUMMONS AND
COMPLAINT AND OTHER PROCESS IN ANY ACTION, CLAIM OR PROCEEDING BROUGHT BY
ANOTHER PARTY IN CONNECTION WITH THIS AGREEMENT OR THE OTHER PROGRAM DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS PROPERTY, IN THE MANNER
SPECIFIED IN THIS SECTION 31 AND TO SUCH PARTY’S ADDRESS SPECIFIED IN SECTION 34
OR SUCH OTHER ADDRESS AS SUCH PARTY SHALL HAVE PROVIDED IN WRITING TO THE OTHER
PARTIES HERETO. NOTHING IN THIS SECTION 31 SHALL AFFECT THE RIGHT OF ANY PARTY
HERETO TO (I) SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
LAW, OR (II) BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTIONS.

 

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32. SINGLE AGREEMENT

Seller, the Purchaser and Agent acknowledge that, and have entered hereinto and
will enter into each Transaction hereunder in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, Seller, the Purchaser and Agent each agree (i) to perform all of
its obligations in respect of each Transaction hereunder, and that a default in
the performance of any such obligations shall constitute a default by it in
respect of all Transactions hereunder, and (ii) that payments, deliveries and
other transfers made by any of them in respect of any Transaction shall be
deemed to have been made in consideration of payments, deliveries and other
transfers in respect of any other Transaction hereunder, and the obligations to
make any such payments, deliveries and other transfers may be applied against
each other and netted.

 

33. INTENT

Seller, the Purchaser and Agent recognize that each of the Transactions and this
Agreement is a “repurchase agreement” as that term is defined in Section 101 of
the Bankruptcy Code, and a “securities contract” as that term is defined in
Section 741 of the Bankruptcy Code, or a “qualified financial contract” as that
term is defined in the Federal Deposit Insurance Act, as applicable, and a
“master netting agreement” as that term is defined in Section 101 of the
Bankruptcy Code.

It is understood that the Purchaser’s right to liquidate the Purchased Assets
and terminate and accelerate the Transactions and this Agreement or to exercise
any other remedies pursuant to Section 18 hereof is a contractual right to
liquidate, terminate and accelerate the Transactions under a repurchase
agreement, a securities contract, a master netting agreement, and a qualified
financial contract as described in Sections 559, 555 and 561 of the Bankruptcy
Code and Section 1821(e)(8)(A)(i) of the Federal Deposit Insurance Act, as
applicable, and a contractual right to offset under a master netting agreement
and across contracts, as described in Section 561 of the Bankruptcy Code. It is
understood that Seller’s right to accelerate the Repurchase Date with respect to
the Purchased Assets and any Transaction hereunder pursuant to Section 18 hereof
is a contractual right to liquidate, terminate and accelerate the Transactions
under a repurchase agreement, a securities contract, a master netting agreement,
and a qualified financial contract as described in Sections 559, 555 and 561 of
the Bankruptcy Code and Section 1821(e)(8)(A)(i) of the Federal Deposit
Insurance Act, as applicable.

The parties hereby intend that any provisions hereof or in any other document,
agreement or instrument that is related in any way to the servicing of the
individual Mortgage Loans shall be deemed “related to” this Agreement within the
meaning of Sections 101(38A)(A) and 101(47)(A)(v) of the Bankruptcy Code and
part of the “contract” as such term is used in Section 741 of the Bankruptcy
Code.

 

34. NOTICES AND OTHER COMMUNICATIONS

Except as provided herein, all notices required or permitted by this Agreement
shall be in writing (including without limitation by Electronic Transmission,
email or facsimile) and shall

 

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be effective and deemed delivered only when received by the party to which it is
sent; provided that notices of Events of Default and exercise of remedies or
under Sections 6 or 18 shall be sent via overnight mail and by Electronic
Transmission. Any such notice shall be sent to a party at the address,
electronic mail or facsimile transmission number set forth below:

 

if to Seller:   

Reverse Mortgage Solutions, Inc.

  

14405 Walters Road, Suite 200

  

Houston, TX 77014

  

Attention: General Counsel

with a copy to:    Reverse Mortgage Solutions, Inc.   

14405 Walters Road, Suite 200

  

Houston, TX 77014

  

Attention: Andrew G. Dokos

  

832 616 5815

  

Andrew.dokos@rmsnav.com

  

Ditech Holding Corporation

  

345 St. Peter Street, Suite 1100

  

St. Paul, MN 55102

  

Attention: Cheryl Collins

  

651 293 3410

  

651 293 5746 (fax)

  

Cheryl.collins@walterinvestment.com

if to Purchaser:   

Barclays Bank PLC – Mortgage Finance

  

745 Seventh Avenue, 4th Floor

  

New York, New York 10019

  

Attention: Ellen Kiernan

  

Telephone: (212) 412-7990

  

Facsimile: (212) 412-7333

  

E-mail: ellen.kiernan@barclays.com

with a copy to:   

Barclays Bank PLC – Legal Department

  

745 Seventh Avenue, 20th Floor

  

New York, New York 10019

  

Telephone: (212) 412-1494

  

Facsimile: (212) 412-1288

 

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Barclays Capital – Operations

  

700 Prides Crossing

  

Newark, Delaware 19713

  

Attention: Brian Kevil

  

Telephone: (302) 286-1951

  

Facsimile: (646) 845-6464

  

Email: brian.kevil@barclays.com

if to Agent:   

Barclays Bank PLC – Mortgage Finance

  

745 Seventh Avenue, 4th Floor

  

New York, New York 10019

  

Attention: Ellen Kiernan

  

Telephone: (212) 412-7990

  

Facsimile: (212) 412-7333

  

E-mail: ellen.kiernan@barclays.com

with a copy to:   

Barclays Bank PLC – Legal Department

  

745 Seventh Avenue, 20th Floor

  

New York, New York 10019

  

Telephone: (212) 412-1494

  

Facsimile: (212) 412-1288

  

Barclays Capital – Operations

  

700 Prides Crossing

  

Newark, Delaware 19713

  

Attention: Brian Kevil

  

Telephone: (302) 286-1951

  

Facsimile: (646) 845-6464

  

Email: brian.kevil@barclays.com

or to such other address, e-mail address or facsimile number as either party may
notify to the others in writing from time to time.

 

35. CONFIDENTIALITY

Seller, the Purchaser and Agent each hereby acknowledge and agree that all
written or computer-readable information provided by one party to the other in
connection with the Program Documents or the Transactions contemplated thereby,
including without limitation, Seller’s Mortgagor information in the possession
of Purchaser shall be kept confidential and shall not be divulged to any party
without the prior written consent of such other party except for (i) disclosure
to Seller’s direct and indirect parent companies, directors, attorneys, agents
or accountants, provided that such attorneys or accountants likewise agree to be
bound by this covenant of confidentiality, or are otherwise subject to
confidentiality restrictions or (ii) with prior (if feasible) written notice to
the Purchaser, disclosure required by law, rule, regulation or order of a court
or other regulatory body or (iii) with prior (if feasible) written notice to the
Purchaser, disclosure to any approved hedge counterparty to the extent necessary
to obtain any

 

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Hedge Instrument hereunder or (iv) with prior (if feasible) written notice to
the Purchaser, any disclosures or filing required under Securities and Exchange
Commission (“SEC”) or state securities’ laws; provided that Seller may file a
version of the Pricing Side Letter that is redacted to omit the related pricing
information (as mutually agreed to by Seller and the Purchaser) and shall submit
a request (together with an unredacted version of the Pricing Side Letter) with
the SEC and each applicable state securities office to keep such pricing
information confidential. In the event that the SEC or applicable state
securities office rejects such confidentiality request with respect to the
Pricing Side Letter, Seller may file an unredacted version of the Pricing Side
Letter with the SEC and any applicable state securities office, as applicable.
Notwithstanding anything herein to the contrary, except as reasonably necessary
to comply with applicable securities laws, each party (and each employee,
representative, or other agent of each party) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure. For this purpose, tax treatment and tax structure shall not include
(i) the identity of any existing or future party (or any Affiliate of such
party) to this Agreement or (ii) any specific pricing information or other
commercial terms, including the amount of any fees, expenses, rates or payments
arising in connection with the transactions contemplated by this Agreement.

Notwithstanding anything in this Agreement to the contrary, Seller, the
Purchaser and Agent shall comply with all applicable local, state and federal
laws, including, without limitation, all privacy and data protection law, rules
and regulations that are applicable to the Purchased Assets and/or any
applicable terms of this Agreement, including information relating to any
Mortgage Loan that is not purchased hereunder and information relating to any
other Mortgage Loans of Seller that is delivered to Purchaser or Agent by
another lender under an intercreditor agreement or other agreement (the
“Confidential Information”). Seller, the Purchaser and Agent understand that the
Confidential Information may contain “nonpublic personal information”, as that
term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “GLB Act”),
and each agrees to maintain such nonpublic personal information that it receives
hereunder in accordance with the GLB Act and other applicable federal and state
privacy laws. Seller, the Purchaser and Agent shall each implement such physical
and other security measures as shall be necessary to (a) ensure the security and
confidentiality of the “nonpublic personal information” of the “customers” and
“consumers” (as those terms are defined in the GLB Act) of such party or any
Affiliate of such party which that party holds, (b) protect against any threats
or hazards to the security and integrity of such nonpublic personal information,
and (c) protect against any unauthorized access to or use of such nonpublic
personal information. Seller, the Purchaser and Agent shall, at a minimum
establish and maintain such data security program as is necessary to meet the
objectives of the Interagency Guidelines Establishing Standards for Safeguarding
Customer Information as set forth in the Code of Federal Regulations at 12
C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568 and 570. Upon request,
Seller, the Purchaser or Agent, as applicable will provide evidence reasonably
satisfactory to allow the requesting party to confirm that the non-requesting
party has satisfied its obligations as required under this Section. Without
limitation, this may include the requesting party’s review of audits, summaries
of test results, and other equivalent evaluations of the non-requesting party.
Seller, the Purchaser and Agent each shall notify the other immediately
following discovery of any breach or compromise of the security,
confidentiality, or integrity of nonpublic personal information of the customers
and consumers of the non-notifying party or

 

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any Affiliate of the non-notifying party provided directly to the notifying
party by the non-notifying party or such Affiliate. The notifying party shall
provide such notice to the non-notifying party by personal delivery, by
facsimile with confirmation of receipt, or by overnight courier with
confirmation of receipt to the applicable requesting individual.

 

36. DUE DILIGENCE

The Purchaser, Agent, Verification Agent or any of their respective agents,
representatives or permitted assigns shall have the right, upon reasonable prior
notice and during normal business hours, to conduct inspection and perform
continuing due diligence reviews of (x) Seller and Guarantor, including, without
limitation, their respective financial condition and performance of its
obligations under the Program Documents, and (y) the Servicing File and the
Purchased Assets (including, but not limited to, any documentation related to
Seller’s FHA servicing practices), and Seller agrees promptly to provide the
Purchaser, Agent, Verification Agent and their respective agents with access to,
copies of and extracts from any and all documents, records, agreements,
instruments or information (including, without limitation, any of the foregoing
in computer data banks and computer software systems) relating to Seller’s
respective business, operations, servicing, financial condition, performance of
their obligations under the Program Documents, the documents contained in the
Servicing Files or the Purchased Assets or assets proposed to be sold hereunder
in the possession, or under the control, of Seller. In addition, Seller shall
also make available to the Purchaser, Agent and/or Verification Agent, upon
reasonable prior notice and during normal business hours, a knowledgeable
financial or accounting officer of Seller for the purpose of answering questions
respecting any of the foregoing. Without limiting the generality of the
foregoing, Seller acknowledges that the Purchaser shall enter into transactions
with Seller based solely upon the information provided by Seller to the
Purchaser and/or Agent and the representations, warranties and covenants
contained herein, and that the Purchaser, Agent and/or Verification Agent, at
its option, shall have the right at any time to conduct itself or through its
agents, or require Seller to conduct quality reviews and underwriting compliance
reviews of the individual Mortgage Loans at the expense of Seller. Any such
diligence conducted by Purchaser, Agent and/or Verification Agent shall not
reduce or limit the Seller’s representations, warranties and covenants set forth
herein. Seller agrees to reimburse the Purchaser, Agent and/or Verification
Agent for all reasonable out-of-pocket due diligence costs and expenses incurred
pursuant to this Section 36.

 

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37. USA PATRIOT ACT; OFAC AND ANTI-TERRORISM

The Purchaser and Agent hereby notifies the Seller that pursuant to the
requirements of the USA PATRIOT Improvement and Reauthorization Act, Title III
of Pub. L. 109-177 (signed into law March 9, 2009) (the “Act”), it is required
to obtain, verify, and record information that identifies the Seller, which
information includes the name and address of the Seller and other information
that will allow the Purchaser and Agent, as applicable, to identify the Seller
in accordance with the Act. Seller hereby represents and warrants to the
Purchaser and Agent, and shall on and as of the Purchase Date for any
Transaction and on and as of each date thereafter through and including the
related Repurchase Date be deemed to represent and warrant to the Purchaser and
Agent that:

(a)    (i) Neither the Seller, nor the Parent Company nor, to the Seller’s
actual knowledge, any director, officer, or employee of the Seller or any of its
subsidiaries , or any originator of a Purchased Asset is named on the list of
Specifically Designated Nationals maintained by OFAC or any similar list issued
by OFAC (collectively, the “OFAC Lists”) or is located, organized, or resident
in a country or territory that is, or whose government is, the target of
sanctions imposed by OFAC; (ii) no Person on the OFAC Lists owns an equity
interest in, directly or indirectly, or otherwise controls, the Seller, the
Parent Company or any Originator; and (iii) to the knowledge of the Seller, none
of the Purchaser or Agent is precluded, under the laws and regulations
administered by OFAC, from entering into this Agreement or any transactions
pursuant to this Agreement with the Seller due to the ownership or control by
any person or entity of stocks, shares, bonds, debentures, notes, drafts or
other securities or obligations of the Seller.

(b)    (i) Seller will not knowingly conduct business with or engage in any
transaction with any Obligor that the Seller or any originator of a Purchased
Asset knows, after reasonable due diligence, (x) is named on any of the OFAC
Lists or is located, organized, or resident in a country or territory that is,
or whose government currently is, the target of countrywide sanctions imposed by
OFAC; (y) is owned, directly or indirectly, or otherwise controlled, by a Person
named on any OFAC List; (ii) if the Seller obtains actual knowledge, after
reasonable due diligence, that any Obligor is named on any of the OFAC Lists or
that any Person named on an OFAC List owns an equity interest in, directly or
indirectly, or otherwise controls, the Obligor, or the Seller, as applicable,
Seller will give prompt written notice to the Purchaser and Agent of such fact
or facts; and (iii) the Seller will (x) comply at all times with the
requirements of the Economic and Trade Sanctions and Anti-Terrorism Laws
applicable to any transactions, dealings or other actions relating to this
Agreement, except to the extent such non-compliance does not result in a
violation of applicable law by any of the Purchaser or Agent and (y) will, upon
Purchaser’s or Agent’s reasonable request from time to time during the term of
this Agreement, deliver a certification confirming its compliance with the
covenants set forth in this Section 37.

 

38. [RESERVED]

 

39. EXECUTION IN COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. The parties agree that this Agreement, any documents to be delivered
pursuant to this Agreement and any notices hereunder may be transmitted between
them by email and/or by facsimile. The parties intend that faxed signatures and
electronically imaged signatures such as .pdf files shall constitute original
signatures and are binding on all parties. The original documents shall be
promptly delivered, if requested.

 

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40. CONTRACTUAL RECOGNITION OF BAIL-IN

Seller acknowledges and agrees that notwithstanding any other term of this
Agreement or any other agreement, arrangement or understanding with Purchaser,
any of Purchaser’s liabilities, as the Bank of England (or any successor
resolution authority) may determine, arising under or in connection with this
Agreement may be subject to Bail-In Action and Seller accepts to be bound by the
effect of:

(a)    Any Bail-In Action in relation to such liability, including (without
limitations):

(i)    a reduction, in full or in part, of any amount due in respect of any such
liability;

(ii)    a conversion of all, or part of, any such liability into shares or other
instruments of ownership that may be issued to, or conferred on, Seller; and

(iii)    a cancellation of any such liability; and

(b)    a variation of any term of this Agreement to the extent necessary to give
effect to Bail-In Action in relation to any such liability.

 

41. [RESERVED]

 

42. CONTRACTUAL RECOGNITION OF UK STAY IN RESOLUTION

(a)    Where a resolution measure is taken in relation to any BRRD undertaking
or any member of the same group as that BRRD undertaking and that BRRD
undertaking or any member of the same group as that BRRD undertaking is a party
to this Agreement (any such party to this Agreement being an “Affected Party”),
each other party to this Agreement agrees that it shall only be entitled to
exercise any termination right under this Agreement against the Affected Party
to the extent that it would be entitled to do so under the Special Resolution
Regime if this Agreement were governed by the laws of any part of the United
Kingdom.

(b)     For the purpose of this Section 41, “resolution measure” means a ‘crisis
prevention measure’, ‘crisis management measure’ or ‘recognised third-country
resolution action’, each with the meaning given in the “PRA Rulebook: CRR Firms
and Non-Authorised Persons: Stay in Resolution Instrument 2015”, as may be
amended from time to time (the “PRA Contractual Stay Rules”), provided, however,
that ‘crisis prevention measure’ shall be interpreted in the manner outlined in
Rule 2.3 of the PRA Contractual Stay Rules; “BRRD undertaking”, “group”,
“Special Resolution Regime” and “termination right” have the respective meanings
given in the PRA Contractual Stay Rules.

 

43. NO WAIVER

The representations, warranties and covenants of the Seller, and the Purchaser’s
and Agent’s right to indemnification with respect thereto, shall not be affected
or deemed waived by reason of any investigation made by or on behalf of the
Purchaser or Agent or by reason of the fact that the Purchaser or Agent knew or
should have known that any such representation or warranty is, was or might be
inaccurate or by reason of the Purchaser’s waiver of any condition set forth in
Section 10, as the case may be.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused their names to be signed to
this Agreement by their respective officers thereunto duly authorized as of the
date first above written.

 

REVERSE MORTGAGE SOLUTIONS, INC.,
as a Seller By:  

/s/ Cheryl Collins

Name:   Cheryl Collins Title:   Senior Vice President BARCLAYS BANK PLC, as
Purchaser and Agent By:  

/s/ Ellen Kiernan

Name:   Ellen Kiernan Title:   Director

 

Signature Page to Master Repurchase Agreement

--------------------------------------------------------------------------------

EXHIBIT A

OFFICER’S COMPLIANCE CERTIFICATE

I,                     , do hereby certify that I am the [duly elected,
qualified and authorized] [CFO/TREASURER/FINANCIAL OFFICER] of REVERSE MORTGAGE
SOLUTIONS, INC. (“Seller”). This Certificate is delivered to you in connection
with Section 14(g)(iii) of the Master Repurchase Agreement, dated as of
April 23, 2018, between Seller and Barclays Bank PLC (as amended, restated,
supplemented or otherwise modified from time to time, the “Agreement”), as the
same may have been amended from time to time. I hereby certify that, to the best
of my knowledge after due inquiry, as of the date of the financial statements
attached hereto and as of the date hereof, Seller is and has been in compliance
with all the terms of the Agreement and, without limiting the generality of the
foregoing, I certify that:

Adjusted Tangible Net Worth. Seller has maintained an Adjusted Tangible Net
Worth of at least $60,000,000 for the calendar month ending [DATE]. A detailed
summary of the calculation of Seller’s actual Adjusted Tangible Net Worth is
provided in Schedule 1 hereto.

Warehouse Indebtedness to Adjusted Tangible Net Worth Ratio. Seller’s ratio of
Warehouse Indebtedness (excluding Nonrecourse Debt and all HMBS security
obligations and any other securitization obligations of Seller and excluding all
Indebtedness that is not reflected on the Seller’s financial statements) to
Adjusted Tangible Net Worth has not exceeded 10:1 for the calendar month ending
[DATE]. A calculation of Seller’s actual Indebtedness to Adjusted Tangible Net
Worth is provided in Schedule 1 hereto.

Maintenance of Profitability. Seller has not reported a loss of Adjusted EBITDA
in excess of: (a) for the Test Period ending December 31, 2017, $20,000,000; (b)
for the Test Period ending March 31, 2018, $15,000,000, (c) for the Test Periods
ending June 30, 2018, September 31, 2018 or December 31, 2018, $10,000,000.

Maintenance of Liquidity. The Seller has ensured that, at all times, it has had
cash (other than Restricted Cash) and Cash Equivalents in an amount not less
than $20,000,000.

Insurance. Seller, or its Affiliates, have maintained, for Seller and its
Subsidiaries, insurance coverage with respect to employee dishonesty, forgery or
alteration, theft, disappearance and destruction, robbery and safe burglary,
property (other than money and securities) and computer fraud or an aggregate
amount of at least that which is required under the Ginnie Mae Guide.

Financial Statements. The financial statements attached hereto are accurate and
complete, accurately reflect the financial condition of Seller, and do not omit
any material fact as of the date(s) thereof.

Documentation. Seller has performed the documentation procedures required by its
operational guidelines with respect to endorsements and assignments,

 

A - 1

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including the recordation of assignments, or has verified that such
documentation procedures have been performed by a prior holder of such Mortgage
Loan.

Compliance. Seller has observed or performed in all material respects all of its
covenants and other agreements, and satisfied every condition, contained in the
Agreement and the other Program Agreements to be observed, performed and
satisfied by it. [If a covenant or other agreement or condition has not been
complied with, Seller shall describe such lack of compliance and provide the
date of any related waiver thereof.]

Regulatory Action. Seller is not currently under investigation or, to best of
Seller’s knowledge, no investigation by any federal, state or local government
agency is threatened. Seller has not been the subject of any government
investigation which has resulted in the voluntary or involuntary suspension of a
license, a cease and desist order, or such other action as could adversely
impact Seller’s business. [If so, Seller shall describe the situation in
reasonable detail and describe the action that Seller has taken or proposes to
take in connection therewith.]

No Default. No Default or Event of Default has occurred or is continuing. [If
any Default or Event of Default has occurred and is continuing, Seller shall
describe the same in reasonable detail and describe the action Seller has taken
or proposes to take with respect thereto, and if such Default or Event of
Default has been expressly waived by Administrative Agent in writing, Seller
shall describe the Default or Event of Default and provide the date of the
related waiver.]

Indebtedness. All Indebtedness (other than Indebtedness evidenced by the
Repurchase Agreement) of Seller existing on the date hereof is listed on
Schedule 2 hereto.

Litigation Summary. Attached hereto as Schedule 4 is a true and correct summary
of all actions, notices, proceedings and investigations pending with respect to
which Seller has received service of process or other form of notice or, to the
best of Seller’s knowledge, threatened against it, before any court,
administrative or governmental agency or other regulatory body or tribunal as of
the calendar month ending [DATE].

IN WITNESS WHEREOF, I have set my hand this              day of
                    ,                     .

 

REVERSE MORTGAGE SOLUTIONS, INC.,
as Seller

By:   Name:   Title:  

 

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SCHEDULE 1 TO OFFICER’S COMPLIANCE CERTIFICATE

CALCULATIONS OF FINANCIAL COVENANTS

As of the calendar month ended [DATE] or quarter ended [DATE]

 

I.   

Adjusted Tangible Net Worth

      

1.

  

Net Worth

   $  

I.(a)

  

Total of item 1

   $     

Less:

  

2.

   All intangible assets (including goodwill and excluding originated and
purchased mortgage servicing rights of Seller)    $  

3.

   Advances to, investments in and receivables from Affiliates of Seller    $  

I.(b)

  

Total of items 2-3

   $  

I.(c)

  

Actual Adjusted Tangible Net Worth (a minus b)

   $     

Adjusted Tangible Net Worth Covenant

   $ 60,000,000     

Compliance?

     Yes / No  

 

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II.   

Leverage Ratio

       

Total Warehouse Indebtedness divided by Adjusted Tangible Net Worth – Actual

      Total Warehouse Indebtedness (excluding Nonrecourse Debt and all HMB
security obligations and any other securitization obligations of Seller and
excluding all Indebtedness that is not reflected on the Seller’s financial
statements) – Actual      

[Please insert calculations]

     

Leverage Covenant

   10:1           

Compliance?

   Yes / No III.   

Test Period Adjusted EBITDA - Actual

       

Adjusted EBITDA

     

Adjusted EBITDA Covenant

     

Loss in excess of:

     

(a) $20,000,000 [Test Period ending December 31, 2017]

     

(b) $15,000,000 [Test Period ending March 31, 2018]

     

(c) $10,000,000 [Test Periods ending June 30, 2018, September 31, 2018 and
December 31]; or

     

(d) $[            ] [other Test Periods]

     

Compliance?

   Yes/No

 

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IV.   

Liquidity

          Total cash (other than Restricted Cash)    $      Total unrestricted
Cash Equivalents    $      Total    $      Liquidity Covenant    $ 20,000,000  
   Compliance?      Yes / No  

 

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SCHEDULE 2 TO OFFICER’S COMPLIANCE CERTIFICATE

INDEBTEDNESS AS OF                    

 

LENDER

   TOTAL
FACILITY
SIZE      FACILITY
TYPE (i.e.
EFP,
Repurchase,
etc)      $ AMOUNT
COMMITTED      OUTSTANDING
INDEBTEDNESS      EXPIRATION
DATE                                                              

 

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SCHEDULE 3 TO OFFICER’S COMPLIANCE CERTIFICATE

RESERVED

 

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SCHEDULE 4 TO OFFICER’S COMPLIANCE CERTIFICATE

LITIGATION SUMMARY

 

Case Caption

   Filing
Date      Court /
Regulator      Case
No.      Nature
of
Claims      Damages /
Penalties
Alleged      Plaintiff’s
Counsel      Customer’s
counsel      Status      Customer’s
Reserve
Amount                                                        

 

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EXHIBIT B

REPRESENTATIONS AND WARRANTIES

WITH RESPECT TO MORTGAGE LOANS

Capitalized terms used but not defined in this Exhibit B have the meanings
assigned to such terms in the Master Repurchase Agreement, dated April 23, 2018
(the “Agreement”), by and among Barclays Bank PLC (“Agent” or “Purchaser”) and
Reverse Mortgage Solutions, Inc. (“RMS” or “Seller”). Seller hereby represents
and warrants to the Purchaser and Agent that, for each Mortgage Loan sold by it
to Purchaser as of the related Purchase Date and the related Repurchase Date and
on each date that such Mortgage Loan is subject to a Transaction:

(a)    All information provided to the Purchaser or Agent by Seller, including
without limitation the information set forth in the Seller Mortgage Loan
Schedule, with respect to the Mortgage Loan is true and correct in all material
respects;

(b)    Such Mortgage Loan is an Eligible Mortgage Loan;

(c)    Such Mortgage Loan is owned solely by Seller, is not subject to any lien,
claim or encumbrance, including, without limitation, any such interest pursuant
to a loan or credit agreement for warehousing mortgage loans, and was originated
or acquired by Seller, underwritten and serviced in Strict Compliance and has at
all times remained in compliance with all applicable laws and regulations,
including without limitation the Federal Truth-in-Lending Act, the Real Estate
Settlement Procedures Act, regulations issued pursuant to any of the aforesaid,
and any and all rules, requirements, guidelines and announcements of the Agency
and the FHA, as the same may be amended from time to time;

(d)    The improvements on the land securing such Mortgage Loan are and will be
kept insured at all times by responsible insurance companies reasonably
acceptable to the Purchaser and the Agent against fire and extended coverage
hazards under policies, binders or certificates of insurance with a standard
mortgagee clause in favor of Seller or the Nominee and its assigns, providing
that such policy may not be canceled without prior notice to Seller. Any
proceeds of such insurance shall be held in trust for the benefit of the
Purchaser. The scope and amount of such insurance shall satisfy the rules,
requirements, guidelines and announcements of the Agency, and shall in all cases
be at least equal to the lesser of (A) the principal amount of such Mortgage
Loan or (B) the maximum amount permitted by applicable law, and shall not be
subject to reduction below such amount through the operation of a coinsurance,
reduced rate contribution or similar clause;

(e)    Each Mortgage is a valid first lien on the Mortgaged Property and is
covered by an attorney’s opinion of title acceptable to the Agency or by a
policy of title insurance on a standard ALTA or similar lender’s form in favor
of Seller or the Nominee and its assigns, subject only to exceptions permitted
by the applicable Agency Program. Seller or the Nominee shall hold for the
benefit of the Purchaser such policy of title insurance and, upon request of the
Purchaser, shall immediately deliver such policy to Purchaser or to the
Custodian on behalf of Purchaser;

 

B - 1

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(f)    Such Mortgage Loan is insured by the FHA under the National Housing Act
and is not subject to any defect that would prevent recovery in full or in part
against the FHA;

(g)    [Reserved];

(h)    [Reserved];

(i)    [Reserved];

(j)    There are no restrictions, contractual or governmental, which would
impair the ability of RMS or Servicer from servicing the Mortgage Loans;

(k)    The original Mortgage in respect of each Mortgage Loan has been sent for
recordation in the appropriate public recording office in the applicable
jurisdictions wherein such recordation is necessary to perfect the lien thereof
as against creditors of the applicable Mortgagor;

(l)    The Mortgagor is one or more natural persons and/or trustees for an
Illinois land trust or a trustee under a “living trust” and such “living trust”
is in compliance with the Agency’s guidelines for such trusts;

(m)    [Reserved];

(n)    No predatory, abusive or deceptive lending practices, including but not
limited to, the extension of credit to a Mortgagor that has no tangible net
benefit to the Mortgagor, were employed in connection with the origination of
the Mortgage Loan;

(o)    [Reserved];

(p)    If such Mortgage Loan was pledged to another warehouse, credit,
repurchase or other financing facility immediately prior to the related Purchase
Date, (i) such pledge has been released immediately prior to, or concurrently
with, the related Purchase Date hereunder and (ii) the Purchaser and Agent have
received a Warehouse Lender’s Release Letter in respect of such Mortgage Loan;

(q)    Such Mortgage Loan has not been released from the possession of the
Custodian, under Section 5 of the Custodial Agreement, to Seller for a period in
excess of fifteen (15) calendar days (or if such fifteenth day is not a Business
Day, the next succeeding Business Day) or such earlier time period as indicated
on the related Request for Release of Documents, unless such Mortgage Loan has
been released pursuant to an Attorney Bailee Letter (as defined in the Custodial
Agreement);

(r)    Such Mortgage Loan has not been selected in a manner so as to adversely
affect the Purchaser’s interests;

(s)    [Reserved];

(t)    [Reserved];

 

B - 2

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(u)    Except as allowable under the FHA HECM program, each Mortgage Loan has no
future disbursement obligation and is secured by a first lien on an underlying
property;

(v)    Final proceeds in respect of a sales-based claim have not been received
by the date such proceeds are required to be received;

(w)    The Mortgage Loan is not secured by property located in (a) a state
Seller is not licensed as a lender/mortgage banker if such licensing is required
or (b) a state that the Purchaser determines to be unacceptable, and provides
thirty (30) days’ written notice to Seller because of a predatory lending or
other law in such state;

(x)    [Reserved]; and

(y)    The Mortgage Loan relates to Mortgaged Property that consists of (i) a
detached single family dwelling, (ii) a two-to-four family dwelling, (iii) a
one-family dwelling unit in a condominium project, (iv) a townhouse, or (v) a
detached single family dwelling in a planned unit development none of which is a
cooperative or commercial property; and is not related to Mortgaged Property
that consists of (a) mixed use properties, (b) earthen homes, (c) underground
homes or (d) any dwelling situated on a leasehold estate.

 

B - 3

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EXHIBIT C

FORM OF TRANSACTION NOTICE

[insert date]

Barclays Bank PLC

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Ellen Kiernan

 

  Re: Master Repurchase Agreement, dated April 23, 2018, by and between Barclays
Bank PLC (“Agent” or “Purchaser”) and Reverse Mortgage Solutions, Inc.
(“Seller”)

Ladies/Gentlemen:

Reference is made to the above-referenced Master Repurchase Agreement (the
“Repurchase Agreement”; capitalized terms used but not otherwise defined herein
have the meanings given them in the Repurchase Agreement).

In accordance with Section 3(c) of the Repurchase Agreement, the undersigned
Seller hereby requests, and the undersigned Purchaser or Purchaser agree, to
enter into a Transaction in connection with our delivery of Eligible Assets and
all related Servicing Rights, on                      [insert requested Purchase
Date, which must be at least one (1) Business Day following the date of the
request] (the “Purchase Date”), in connection with which we shall sell to you
such Eligible Assets on the Seller Mortgage Loan Schedule attached hereto. The
Principal Balance of the Eligible Assets is $              and the Purchase
Price to be paid by the [related] Purchaser for such Eligible Assets shall be
             [insert applicable Purchase Price]. The [related] Purchaser shall
transfer to the Seller an amount equal to $              [insert amount which
represents the Purchase Price of the Eligible Assets net of any related
Commitment Fee or any other fees then due and payable by Seller to the Purchaser
or Purchaser pursuant to the Agreement]. Seller agrees to repurchase such
Purchased Asset on the Repurchase Date(s) at the Repurchase Price(s) set forth
in the spreadsheet attached hereto as Schedule 1.

The Eligible Mortgage Loans have the characteristics on the electronic file or
computer tape or disc delivered by Seller to the [related] Purchaser with
respect thereto in connection with this Transaction Notice.

The Seller hereby certifies, as of such Purchase Date, that:

(1)    no Default or Event of Default has occurred and is continuing on the date
hereof (or to the extent existing, shall be cured after giving effect to such
Transaction) nor will occur after giving effect to such Transaction as a result
of such Transaction;

(2)     each of the representations and warranties made by the Seller and
Guarantor in or pursuant to the Program Documents is true and correct in all
material

 

C - 1

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respects on and as of such date as if made on and as of the date hereof (or, if
any such representation or warranty is expressly stated to have been made as of
a specific date, as of such specific date);

(3)     the Seller is in compliance with all governmental licenses and
authorizations and is qualified to do business and is in good standing in all
required jurisdictions, except as would not be reasonably likely to have a
Material Adverse Effect;

(4)     Seller has all requisite Approvals; and

(5)     the Seller has satisfied all applicable conditions precedent in
Sections 10(a) and (b) of the Repurchase Agreement and all other requirements of
the Program Documents.

The undersigned duly authorized officer of Seller further represents and
warrants that (1) with respect to the applicable Eligible Mortgage Loans, the
documents constituting the Mortgage Files (as defined in the Custodial
Agreement) (the “Receipted Assets”), have been or are hereby submitted to
Custodian and such required documents are to be held by the Custodian for the
[related] Purchaser, (2) all other documents related to such Receipted Assets
(including, but not limited to, mortgages, insurance policies, loan applications
and appraisals) have been or will be created and held by Seller for the
[related] Purchaser, (3) all documents related to such Receipted Assets
withdrawn from Custodian shall be held by Seller for the [related] Purchaser,
and (4) upon the [related] Purchaser’s wiring of the Purchase Price pursuant to
Section 3(b) of the Repurchase Agreement, [such] Purchaser will have agreed to
the terms of the Transaction as set forth herein and purchased the Receipted
Assets from the Seller.

Seller hereby represents and warrants that (x) the Receipted Assets have a
Principal Balance as of the date hereof of $             and (y) the number of
Receipted Assets is             .

 

Very truly yours, REVERSE MORTGAGE SOLUTIONS, INC. By:  

    

Name:   Title:  

 

C - 2

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Acknowledged and Agreed:

BARCLAYS BANK PLC, as Purchaser

By:

 

    

Name:

 

Title:

 

 

C - 3

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SCHEDULE 1 TO TRANSACTION NOTICE

LIST OF REPURCHASE PRICES AND REPURCHASE DATES

[SEE ATTACHMENT]

 

Schedule 1 to Exhibit C

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EXHIBIT D

FORM OF GOODBYE LETTER

 

«Primary_Borrower»    [                ] [    ], 201[    ]   

«Mailing_address_line_1»

«Mail_city», «Mail_state» «Mail_zip»

 

RE: Transfer of Mortgage Loan Servicing

Mortgage Loan «Account_number»

Dear Customer:

Reverse Mortgage Solutions, Inc. is the present servicer of your mortgage loan.
Effective [Date] the servicing of your mortgage will be transferred to
                        . This transfer does not affect the terms and conditions
of your mortgage, other than those directly related to servicing. Because of the
change in servicer, we are required to provide you with this disclosure.

Reverse Mortgage Solutions, Inc. cannot accept any payments received after
[Date]. Effective [Date], all payments are to be made to
                        . Any payments received by Reverse Mortgage Solutions,
Inc. after [Date] will be forwarded to                         .
                         will be contacting you shortly with payment
instructions. Please make future payments to:

 

  

 

              Attn:                                        [Address]   

If you currently make payments by an automatic checking or savings account
deduction, that service will discontinue effective with the transfer date. After
the servicing transfer, you may request this service from
                        .

In [Date], you will receive a statement from Reverse Mortgage Solutions, Inc.
reflecting the amount, if any, of the interest and taxes paid on your behalf in
201[ ]. A similar statement will be sent                          for the period
beginning [Date] through year-end. Both statements must be added together for
income tax purposes.

If you have any questions concerning your account through [Date], you should
continue to contact Reverse Mortgage Solutions, Inc., at <Seller’s Phone
Number>, <HOURS OF OPERATION>. Questions after the transfer date should be
directed to                          Customer Service Department at
1-800-                        , Monday – Friday, 7 a.m. – 7 p.m. EST.

 

D - 1

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Sincerely,

Loan Servicing Department

Reverse Mortgage Solutions, Inc.

 

D - 2

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NOTICE OF ASSIGNMENT, SALE OR TRANSFER

OF SERVICING RIGHTS

You are hereby notified that the servicing of your mortgage loan, that is the
right to collect payments from you, is being assigned, sold or transferred.

The assignment, sale or transfer of the servicing of the mortgage loan does not
affect any term or condition of the mortgage instruments, other than the terms
directly related to the servicing of your loan.

Except in limited circumstances, the law requires that your present servicer
send you a notice at least 15 days before the effective date, or at closing.
Your new servicer must also send you this notice no later than 15 days after
this effective date.

This notification is a requirement of Section 6 of the Real Estate Settlement
Procedures Act (RESPA) (12 U.S.C. 2605). You should also be aware of the
following information, which is set out in more detail in Section 6 of RESPA (12
U.S.C. 2605).

During the 60 day period following the effective date of the transfer of the
loan servicing, a loan payment received by your old servicer before its due date
may not be treated by the new loan servicer as late, and a late fee may not be
imposed upon you.

Section 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights. If you
send a “qualified written request” to your loan servicer concerning the
servicing of your loan, your servicer must provide you with a written
acknowledgement within 20 Business Days of receipt of your request. A “qualified
written request” is written correspondence, other than notice on a payment
coupon or other payment medium supplied by the servicer, which includes your
name and account number and your reasons for the request. If you want to send a
“qualified written request” regarding the servicing of your loan, it must be
sent to this address:

 

 

[Address]

No later than 60 Business Days after receiving your request, your servicer must
make any appropriate corrections to your account, and must provide you with a
written clarification regarding any dispute. During this 60 Business Day period,
your servicer may not provide information to a consumer reporting agency
concerning any overdue payment related to such period or qualified written
request. However, this does not prevent the servicer from initiating foreclosure
if proper grounds exist under the mortgage documents.

A Business Day is any day excluding legal public holidays (State or federal),
Saturday and Sunday.

Section 6 of RESPA also provides for damages and costs for individuals or
classes of individuals, in circumstances where servicers are shown to have
violated the requirements of that Section. You should seek legal advice if you
believe your rights have been violated.

 

D - 3

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MIRANDA DISCLOSURE – For your protection, please be advised that we are
attempting to collect a debt and any information obtained will be used for that
purpose. Calls will be monitored and recorded for quality assurance purposes. If
you do not wish for your call to be recorded please notify the customer service
associate when calling.

BANKRUPTCY INSTRUCTION – Attention to any customer in Bankruptcy or who has
received a bankruptcy discharge of this debt. Please be advised that this letter
constitutes neither a demand for payment of the captioned debt nor a notice of
personal liability to any recipient hereof who might have received a discharge
of such debt in accordance with applicable bankruptcy laws or who might be
subject to the automatic stay of Section 362 of the United States Bankruptcy
Code. However, it may be a notice of possible enforcement of our lien against
the collateral property, which has not been discharged in your bankruptcy.

 

D - 4

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EXHIBIT E

FORM OF WAREHOUSE LENDER’S RELEASE

(Date)

Barclays Bank PLC – Mortgage Finance

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Ellen Kiernan

Barclays Bank PLC – Legal Department

745 Seventh Avenue, 20th Floor

New York, New York 10019

Barclays Capital – Operations

700 Prides Crossing

Newark, Delaware 19713

Attention: Brian Kevil

Reverse Mortgage Solutions, Inc.

14405 Walters Road, Suite 200

Houston, TX 77014

Re:    Certain Assets Identified on Schedule A hereto and owned by Reverse
Mortgage Solutions, Inc.

Capitalized terms used herein but not defined herein have the meanings ascribed
to such terms in the Master Repurchase Agreement, dated April 23, 2018, between
Barclays Bank PLC and Reverse Mortgage Solutions, Inc.

The undersigned hereby releases all right, interest, lien or claim of any kind
with respect to the mortgage loans described in the attached Schedule A, such
release to be effective automatically without any further action by any party
upon receipt in the account identified below in immediately available funds of
$                                    , representing a loan count of
                                , in accordance with the following wire
instructions:

[                                          ]

 

E - 1

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Very truly yours, [WAREHOUSE LENDER] By:  

    

Name:   Title:  

 

E - 2

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[SCHEDULE A TO EXHIBIT E – LIST OF ASSETS TO BE RELEASED]

 

E - 3

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EXHIBIT F

[RESERVED]

 

F - 1

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EXHIBIT G

[RESERVED]

 

G - 2

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EXHIBIT H

FORM OF SELLER MORTGAGE LOAN SCHEDULE

[To be provided by Seller.]

 

H - 1