Exhibit 10.1

 

 

 

AMENDED AND RESTATED

RESIDENTIAL SERVICING

ASSET PURCHASE AGREEMENT

BY AND AMONG

AURORA BANK FSB,

AURORA LOAN SERVICES LLC,

AND

NATIONSTAR MORTGAGE LLC

DATED AS OF JUNE 12, 2012

 

 

 

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TABLE OF CONTENTS

 

          Page  

ARTICLE I. CERTAIN DEFINITIONS

     2   

Section 1.01

   Certain Definitions.      2   

Section 1.02

   Index of Certain Other Definitions      22   

ARTICLE II. PURCHASE AND SALE

     25   

Section 2.01

   Purchase and Sale of Purchased Assets      25   

Section 2.02

   Assumption and Exclusion of Liabilities      28   

Section 2.03

   Payment of Purchase Price; Allocations; Adjustments      32   

Section 2.04

   Post-Closing Purchase Price Calculation      36   

ARTICLE III. DISCLOSURE SCHEDULES

     39   

Section 3.01

   Disclosure Schedules      39   

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLERS

     39   

Section 4.01

   Organization      40   

Section 4.02

   Authority; No Violation      40   

Section 4.03

   Consents      41   

Section 4.04

   Title to Purchased Assets      41   

Section 4.05

   Financial Statements      41   

Section 4.06

   Absence of Certain Changes or Events      42   

Section 4.07

   Taxes      42   

Section 4.08

   Material Contracts; Assumed Contracts; Defaults      43   

Section 4.09

   Intellectual Property      44   

Section 4.10

   Labor Matters      45   

Section 4.11

   Legal Proceedings      45   

Section 4.12

   Compliance With Applicable Law      45   

Section 4.13

   Employee Benefit Plans      46   

Section 4.14

   Brokers, Finders and Financial Advisors      48   

Section 4.15

   Environmental Matters      49   

Section 4.16

   Related Party Transactions      49   

Section 4.17

   Real Estate Matters      50   

Section 4.18

   Servicing      51   

Section 4.19

   Master Servicing Agreements      53   

Section 4.20

   Servicing Loan Files      54   

Section 4.21

   Securitization Liability      54   

Section 4.22

   No Other Representations or Warranties      55   

 

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ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER

     55   

Section 5.01

   Organization      55   

Section 5.02

   Authority; No Violation      55   

Section 5.03

   Consents      56   

Section 5.04

   Access to Funds; Financing      56   

Section 5.05

   Legal Proceedings      57   

Section 5.06

   Brokers, Finders and Financial Advisors      57   

Section 5.07

   Representations and Warranties as to the Servicing Rights      57   

Section 5.08

   No Other Representations or Warranties      58   

ARTICLE VI. CONDUCT PENDING ACQUISITION

     59   

Section 6.01

   Conduct of Business Prior to the Second Closing      59   

Section 6.02

   Forbearances of Seller      59   

Section 6.03

   Other Sales      62   

Section 6.04

   No Control of the Business      62   

Section 6.05

   Exclusivity      62   

Section 6.06

   Financial Statements      62   

ARTICLE VII. COVENANTS

     63   

Section 7.01

   Current Information      63   

Section 7.02

   Access to Properties and Records; Confidentiality      64   

Section 7.03

   Supplements to Seller Disclosure Schedules      67   

Section 7.04

   Efforts and Actions to Cause Each Closing to Occur; Consents      67   

Section 7.05

   Financing      69   

Section 7.06

   Transfer of Assumed Contracts      71   

Section 7.07

   Failure to Fulfill Conditions      72   

Section 7.08

   Employee Matters      72   

Section 7.09

   Tax Matters      74   

Section 7.10

   Covenants Relating to Servicing and Master Servicing      75   

Section 7.11

   Post-Closing Cooperation in Connection with Actions      82   

Section 7.12

   Use of Aurora Name      83   

Section 7.13

   Receivables      83   

Section 7.14

   Non-Solicit      83   

Section 7.15

   Transfer of LBHI Servicing Rights      83   

Section 7.16

   Sublease of Space      83   

ARTICLE VIII. CLOSING CONDITIONS

     84   

Section 8.01

   Conditions to Each Party’s Obligations under this Agreement      84   

Section 8.02

   Conditions to the Obligations of Purchaser under this Agreement      85   

Section 8.03

   Conditions to the Obligations of Seller under this Agreement      85   

ARTICLE IX. THE CLOSING AND RELATED ITEMS

     86   

Section 9.01

   Time and Place.      86   

 

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Section 9.02

   Deliveries at the Closings      87   

Section 9.03

   Further Assistance and Assurances      89   

ARTICLE X. INDEMNIFICATION

     90   

Section 10.01

   Survival      90   

Section 10.02

   Indemnification by the Sellers      90   

Section 10.03

   Indemnification by Purchaser      91   

Section 10.04

   Limitations on Indemnification Obligations of Sellers      92   

Section 10.05

   Limitations on Indemnification Obligations of Purchaser      93   

Section 10.06

   Notice of Non-Third Party Claims      93   

Section 10.07

   Notice of Third Party Claims; Assumption of Defense      94   

Section 10.08

   Settlement or Compromise      96   

Section 10.09

   Exclusive Remedy      97   

Section 10.10

   Net Losses; Subrogation; Mitigation; No Set-Off      97   

Section 10.11

   Treatment of Indemnity Payments      99   

ARTICLE XI. TERMINATION

     99   

Section 11.01

   Termination      99   

Section 11.02

   Effect of Termination      101   

ARTICLE XII. MISCELLANEOUS

     101   

Section 12.01

   Confidentiality      101   

Section 12.02

   Public Announcements      101   

Section 12.03

   Notice      102   

Section 12.04

   Parties in Interest; Assignment      102   

Section 12.05

   Complete Agreement      103   

Section 12.06

   Counterparts      103   

Section 12.07

   Severability      103   

Section 12.08

   Amendment, Extension, Waiver and Cumulative Remedies      103   

Section 12.09

   Governing Law      104   

Section 12.10

   Jurisdiction; Forum; Service of Process      104   

Section 12.11

   Interpretation      104   

Section 12.12

   Specific Performance      105   

Section 12.13

   Expenses      105   

Section 12.14

   No Recourse      105   

 

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EXHIBITS AND SCHEDULES

 

Exhibit A

   Agreement Regarding Servicing and Servicing Rights Ownership

Exhibit B

   Assignment and Assumption Agreement

Exhibit C

   Assignment of Intellectual Property Agreement

Exhibit D

   Bill of Sale

Exhibit E

   Special Warranty Deed

Exhibit F

   Assignment and Assumption of Lease

Exhibit G

   Interim Servicing Agreement

Exhibit H

   LBB Guaranty

Schedule 1.01(a)(1)

   Agency Acquired Accounts Receivables

Schedule 1.01(a)(2)

   Non-Agency Acquired Accounts Receivables

Schedule 1.01(b)

   Assumed Contracts

Schedule 1.01 (c)

   [Reserved]

Schedule 1.01(d)

   [Reserved]

Schedule 1.01(e)

   Seller Required Governmental Approvals

Schedule 1.01(f)

   Purchaser Required Governmental Approvals

Schedule 1.01(g)

   Hardware and IT Assets

Schedule 1.01(h)

   Master Servicing Agreements

Schedule 1.01(i)

   Master Servicing Data Tape Categories

Schedule 1.01(j)

   Personal Property

Schedule 1.01(k)

   Personal Property Leases

Schedule 1.01(l)

   RALI Securitizations

Schedule 1.01(m)

   Seller Licensed Intellectual Property

Schedule 1.01(n)

   Seller Owned Intellectual Property

Schedule 1.01(o)

   Serviced Mortgage Loan Data Tape Categories

Schedule 1.01(p)

   Servicer Advance Data Tape Categories

Schedule 1.01(q)(1)

   Agency Servicing Agreements

Schedule 1.01(q)(2)

   Non-Agency Servicing Agreements

Schedule 1.01(r)

   Servicing Rights Agreements

Schedule 1.01(s)

   Servicing Rights Data Tape Categories

Schedule 1.01(t)

   Subservicing Agreements

Schedule 1.01(u)

   Third Party Consents

Schedule 2.01(a)(vi)

   First Closing Excluded Rights and Claims

Schedule 2.01(a)(vii)

   First Closing Credits and Prepaid Items

Schedule 2.01(b)(ix)

   Second Closing Credits and Prepaid Items

Schedule 2.01(b)(xx)

   Second Closing Excluded Rights and Claims

Schedule 2.02(a)(vi)

   Agency Assumed Liabilities

Schedule 2.02(b)(viii)

   Non-Agency Assumed Liabilities

Schedule 2.03(a)(1)

   Agency Purchase Price

Schedule 2.03(a)(2)

   Non-Agency Purchase Price

 

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AMENDED AND RESTATED RESIDENTIAL SERVICING

ASSET PURCHASE AGREEMENT

This AMENDED AND RESTATED RESIDENTIAL SERVICING ASSET PURCHASE AGREEMENT (this
“Agreement”) is dated as of June 12, 2012, by and among Aurora Bank FSB, a
federal savings bank organized under the laws of the United States (the “Bank”),
Aurora Loan Services LLC, a Delaware limited liability company (“ALS” and
together with the Bank, the “Sellers”), and Nationstar Mortgage LLC, a Delaware
limited liability company (“Purchaser”). The Bank, ALS and Purchaser shall be
referred to herein from time to time collectively as the “Parties” and
individually as a “Party.”

WHEREAS, the Sellers wish to sell to Purchaser, and Purchaser wishes to purchase
from the Sellers, the Purchased Assets, and in connection therewith, Purchaser
is willing to assume certain liabilities and obligations of the Sellers relating
thereto, all upon the terms and subject to the conditions set forth herein;

WHEREAS, on March 6, 2012, the Sellers and Purchaser entered into a Residential
Servicing Asset Purchase Agreement (the “Original Asset Purchase Agreement”)
providing for the purchase of the Purchased Assets and the consummation of the
other Transactions;

WHEREAS, on March 30, 2012, the Sellers and Purchaser entered into a letter
agreement amending certain provisions of the Original Asset Purchase Agreement;

WHEREAS, on May 8, 2012, the Sellers and Purchaser entered into a letter
agreement amending certain provisions of the Original Asset Purchase Agreement
and the Schedules attached thereto;

WHEREAS, on June 1, 2012, the Sellers and Purchaser entered into two separate
letter agreements (respectively, the “Subservicing Letter Agreement” and the
“Bifurcated Closing Letter Agreement”) pursuant to which the Sellers and
Purchaser agreed to amend certain provisions of the Original Asset Purchase
Agreement;

WHEREAS, on June 8, 2012, the Sellers and Purchaser entered into Amendment No. 1
to the Original Asset Purchase Agreement in order to implement the provisions of
the Subservicing Letter Agreement; and

WHEREAS, Sellers and Purchaser now wish to amend and restate in its entirety the
Original Asset Purchase Agreement in order to implement the provisions of the
Bifurcated Closing Letter Agreement and provide for this Agreement to supersede
in its entirety the Original Asset Purchase Agreement, as heretofore amended.

NOW, THEREFORE in consideration of the mutual covenants, representations,
warranties and agreements herein contained and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

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ARTICLE I.

CERTAIN DEFINITIONS

Section 1.01         Certain Definitions.

As used in this Agreement the following terms have the following meanings:

“Accounting Records” means the general ledger, supporting subsidiary ledgers and
schedules, and loan accounting and servicing system records of the Sellers to
the extent maintained in accordance with GAAP.

“Acquired Accounts Receivables” means all accounts receivable of the Sellers
(other than any Servicer Advance Receivable), including any accrued interest
thereon, to the extent relating to the Business, the Purchased Assets or the
Assumed Liabilities, including accrued and uncollected Servicing Compensation,
Ancillary Income and Late Fees, whether or not recorded. As of the Cut-off Date,
Acquired Accounts Receivables with respect to the Agency Purchased Assets
include those accounts receivable set forth on Schedule 1.01(a)(1). As of the
Cut-off Date, Acquired Accounts Receivables with respect to the Non-Agency
Purchased Assets include those accounts receivable set forth on Schedule
1.01(a)(2), which is attached hereto in draft form. The final copy of Schedule
1.01(a)(2) shall be delivered by the Sellers to Purchaser in accordance with
Section 2.03(c).

“Action” means any civil, criminal, investigative or administrative claim,
demand, action, suit, charge, citation, complaint, notice of violation,
proceeding (public or private), litigation, prosecution, audit, hearing,
arbitration or inquiry by or before or otherwise involving any Governmental
Entity whether at law, in equity or otherwise.

“Affiliate” means, with respect to any Person, any other Person who directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person and, without limiting the generality
of the foregoing, includes any executive officer or director of such Person and
any Affiliate of such executive officer or director, and the term “controls”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.

“Agency” means FHA, VA, GNMA, FNMA, FHLMC, HUD, RHS or a State Agency, as
applicable.

“Agency Servicing Agreement” means each Contract set forth on Schedule
1.01(q)(1), pursuant to which a Seller performs Servicing.

“Agreement Regarding Servicing and Servicing Rights Ownership” means the
Agreement Regarding Servicing and Servicing Rights Ownership in the form
attached as Exhibit A.

 

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“Ancillary Agreements” means the Agreement Regarding Servicing and Servicing
Rights Ownership, the Bill of Sale, the Interim Servicing Agreement, the
Assignment and Assumption Agreement, the Assignment of Intellectual Property
Agreement, the Special Warranty Deeds and the Assignment and Assumption of Lease
(including, in each case, any and all exhibits, schedules and attachments to any
such documents and any other documents executed or delivered in connection
therewith), in each case, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

“Ancillary Income” means any and all income, revenue, fees, expenses, charges or
other monies that a Seller is entitled to receive, collect or retain as Servicer
pursuant to the Servicing Agreements or the Subservicing Agreements (other than
Servicing Compensation and Late Fees), including interest on funds deposited in
any Escrow Account or Custodial Account maintained pursuant to the Servicing
Agreements or the Subservicing Agreements, fees payable to a Seller under HAMP,
loss mitigation incentive fees, including those payable from an Agency in such
instances for non-HAMP workouts, fees and charges for dishonored checks or ACH
payments (insufficient funds fees), pay-off fees, modification fees, assumption
fees, default interest, commissions and administrative fees on insurance and
similar fees and charges collected from or assessed against Serviced Mortgagors
to the extent payable to a Seller, as Servicer, under the terms of the Servicing
Agreements or the Subservicing Agreements.

“Applicable Closing” means the First Closing or the Second Closing, as
applicable.

“Applicable Closing Date” means the First Closing Date or the Second Closing
Date, as applicable.

“Applicable Servicing Requirements” means, as of the time of reference: (i) with
respect to the Serviced Mortgage Loans, (a) all contractual obligations of a
Seller under the Serviced Mortgage Loan Documents or the applicable Servicing
Agreements or Subservicing Agreements to which such Seller is a party or by
which such Seller is bound or for which such Seller is responsible as Servicer,
(b) those servicing practices of prudent lending institutions which service
loans of the same type as each Serviced Mortgage Loan serviced under the related
Servicing Agreement or Subservicing Agreement in the jurisdiction where the
related Serviced Mortgaged Property is located, (c) all guidelines of Insurers
and Investors applicable to the Sellers as Servicers or to the Servicing
Business and (d) all Laws and Orders binding upon the Sellers as Servicers; and
(ii) with respect to the Master Serviced Mortgage Loans, (a) all contractual
obligations of a Seller under the applicable Master Servicing Agreements and
related documents to which such Seller is a party or by which such Seller is
bound or for which such Seller is responsible as Master Servicer, (b) those
master servicing practices of prudent lending institutions which master service
loans of the same type as each Master Serviced Mortgage Loan serviced under the
related Master Servicing Agreement, (c) all guidelines of Insurers and Investors
applicable to the Sellers as Master Servicers or the Master Servicing Business
and (d) all Laws and Orders binding upon the Sellers as Master Servicers.

“Assignment and Assumption Agreement” means the assignment and assumption
agreement in the form attached as Exhibit B.

 

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“Assignment of Intellectual Property Agreement” means the assignment of
intellectual property agreement in the form attached as Exhibit C.

“Assumed Contracts” means each Contract set forth on Schedule 1.01(b) and all
other Contracts (other than employee benefit, employment, retention, severance,
change in control or similar Contracts, plans, policies or programs) used or
held for use in connection with the Master Servicing Business entered into after
the date of the Original Asset Purchase Agreement and prior to the Second
Closing Date. For the avoidance of doubt, the Assumed Contracts shall not
include the Servicing Agreements, the Subservicing Agreements, the Servicing
Rights Agreements, the Master Servicing Agreements, the Real Property Leases,
the Contracts for the Seller Licensed Intellectual Property or any Contract that
would have been included as such had it been entered into on or prior to the
date of the Original Asset Purchase Agreement.

“Assumed Liabilities” means the Agency Assumed Liabilities and the Non-Agency
Assumed Liabilities.

“Bank Regulator” means any federal or state governmental agency or authority
charged with the supervision or regulation of banks and their holding companies
or mortgage banking (including, without limitation, the Board of Governors of
the Federal Reserve System, OCC, FDIC and CFPB), which regulates the Bank or any
of its holding companies or subsidiaries (including ALS).

“Base Rate” means the London Interbank Offered Rate (LIBOR) for a six month
deposit in U.S. dollars as reported on the Applicable Closing Date in The Wall
Street Journal, plus 3%.

“Bill of Sale” means a bill of sale in the form attached hereto as Exhibit D.

“Book Value” means, with respect to the Purchased Assets and Assumed
Liabilities, the dollar amount thereof stated on the Accounting Records of the
Sellers, as of the applicable date, determined in accordance with GAAP and after
adjustments made by the Sellers in accordance with GAAP for differences in
accounts, suspense items, unposted debits and credits, and other similar
adjustments or corrections and for setoffs, whether voluntary or involuntary.
Without limiting the generality of the foregoing, the Book Value of an Assumed
Liability shall include all accrued and unpaid interest thereon. The Book Value
of a Purchased Asset shall not include any adjustment for loan premiums,
discounts or any related deferred income or fees, or general or specific
reserves on the Accounting Records of the Sellers.

“Business” means the Master Servicing Business together with the Servicing
Business.

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by Law to be closed in New York, New
York.

“CFPB” means the Consumer Financial Protection Bureau or any successor thereto.

“Closing” means the First Closing or the Second Closing, as applicable.

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

 

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“Consent Order” means the Consent Order No. NE-11-16, dated April 13, 2011,
issued by the Office of Thrift Supervision in In the Matter of Aurora Bank FSB.

“Continuing Employee Transfer Date” means June 28, 2012 (or such other date as
is mutually agreed to by the Sellers and Purchaser).

“Contract” means any written agreement, contract, commitment, instrument,
undertaking, lease, sublease, note, mortgage, indenture, sales or purchase
order, license, sublicense, arrangement or other legally binding obligation
(including each amendment, extension, exhibit, attachment, addendum, appendix,
statement of work, change order and any other similar instrument or document
relating thereto).

“Covered Loss” means any and all actual losses, Liabilities, claims, fines,
deficiencies, damages (excluding contingent liabilities and loss in value, but
including any reduction in Servicing Compensation, Master Servicing Compensation
and Ancillary Income), demands, assessments, penalties, judgments, awards,
payments, costs and expenses (including interest and penalties due and payable
with respect thereto and reasonable attorneys’ and accountants’ fees and any
other reasonable out-of-pocket expenses incurred in investigating, defending or
settling any Action or enforcing any right to indemnification under this
Agreement), in each case that are due and payable (whether payable in cash,
property or otherwise) (“Losses”), excluding (i) any consequential, incidental,
special, indirect, punitive or speculative damages or lost profits, except to
the extent such damages are recovered by third parties in connection with claims
made by such third parties that are indemnified under this Agreement, (ii) any
Loss arising from any operational, record keeping, procedural or other
requirement (other than payment of money damages, fines or civil monetary
penalties) imposed as a result of any Action, agreed to as part of the
settlement of any Action or pursuant to any applicable Laws, and (iii) any Loss
attributable to the continuation by Purchaser or any of its Affiliates after the
Applicable Closing of pre-Closing practices of the Sellers or attributable to
Purchaser’s ownership or operation of the Purchased Assets.

“Custodial Account” means (i) each trust account or bank account maintained by a
Seller, as Servicer, pursuant to a Servicing Agreement or Subservicing
Agreement, as the case may be, for the benefit of an Investor and (ii) any
amounts deposited or maintained therein.

“Custodial Account Funded Advances” means, at any time, the aggregate amount of
Servicer Advances of delinquent principal and interest payments on Serviced
Mortgage Loans advanced in accordance with the Servicing Agreements or
Subservicing Agreements (whether defined as “P&I Advances,” “Monthly Advances,”
“Delinquency Advances” or otherwise in the related Servicing Agreements, or
Subservicing Agreements), which a Seller has either funded or reimbursed using
funds on deposit in a Custodial Account held for distribution on a future
distribution date.

“Cut-off Date” means the last calendar day of the month preceding the Applicable
Closing Date or such other date as Purchaser and the Sellers may agree.

 

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“Deferred Servicing Fees” means Servicing Compensation which is earned, whether
or not accrued, but not yet collected or recognized under any Servicing
Agreements or Subservicing Agreements because the applicable Serviced Mortgage
Loans are delinquent.

“Eligible Servicing Agreement” has the meaning set forth in each of the
Financing Commitments.

“Employee Benefit Plan” means each “employee benefit plan” (as defined in
Section 3(3) of ERISA), and each other material bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, restricted stock, stock unit, phantom stock, retirement, cash
balance, employment, retention, change in control, severance, disability, death
benefit, hospitalization, medical, flexible spending, vacation, paid time off,
perquisite, fringe benefit, non-statutory workers’ compensation or other plan,
program, policy, agreement or arrangement maintained by, contributed to by or
established pursuant to an agreement or policy (in each case, whether written or
unwritten) entered into or adopted by, a Seller or, with respect to each plan
subject to Title IV of ERISA, a Seller or an ERISA Affiliate, or with respect to
which any Seller or, with respect to each plan subject to Title IV of ERISA, any
Seller or any ERISA Affiliate has any Liability (including contingent
Liability).

“Environmental Laws” means any applicable federal, state or local Law relating
to (i) the protection, preservation or restoration of the environment, and/or
(ii) the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of Pollutants.
The term Environmental Law includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
§9601, et seq; the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
§6901, et seq; the Clean Air Act, as amended, 42 U.S.C. §7401, et seq; the Clean
Water Act, as amended, 33 U.S.C. §1251, et seq; the Toxic Substances Control
Act, as amended, 15 U.S.C. §2601, et seq; the Emergency Planning and Community
Right to Know Act, 42 U.S.C. §11001, et seq; and the Safe Drinking Water Act, 42
U.S.C. §300f, et seq.

“Environmental Permit” means any Permit issued under any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is, or at any time during the prior six (6) calendar years has been, (i) a
corporation in a controlled group of corporations (within the meaning of
Section 414(b) of the Code) that includes either of the Sellers, (ii) a trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with either of the Sellers or (iii) together with
either of the Sellers treated as a single employer under Section 414 of the Code
or Section 4001 of ERISA.

“Escrow Accounts” means (i) all trust accounts or bank accounts maintained by
the Sellers in accordance with the Serviced Mortgage Loan Documents (other than
the Custodial Accounts), including accounts holding buy-down funds, tax and
insurance funds, Suspense Funds and other escrow and impound amounts and similar
charges (including interest accrued thereon held for the benefit of the Serviced
Mortgagors) and (ii) any amounts deposited or maintained therein.

 

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“Excluded Contracts” means all Contracts other than the Real Property Leases,
the Assumed Contracts, the Contracts for Seller Licensed Intellectual Property,
the Servicing Agreements, the Servicing Rights Agreements, the Subservicing
Agreements, the Master Servicing Agreements and the Underlying Documents.

“FDIC” means the Federal Deposit Insurance Corporation or any successor thereto.

“FHA” means the Federal Housing Administration or any successor thereto.

“FHLMC” means the Federal Home Loan Mortgage Corporation or any successor
thereto.

“Financing Commitments” means the (i) Commitment Letter, dated as of March 4,
2012, executed by Credit Suisse AG, Cayman Islands Branch, (ii) Commitment
Letter, dated as of March 4, 2012, executed by Wells Fargo Bank, National
Association, and (iii) Commitment Letter, dated as of March 5, 2012, executed by
The Royal Bank of Scotland plc.

“FNMA” means the Federal National Mortgage Association or any successor thereto.

“Foreclosure” means the process culminating in the acquisition of title to a
Serviced Mortgaged Property in a foreclosure sale or by a deed in lieu of
foreclosure or pursuant to any other comparable procedure consistent with
Applicable Servicing Requirements.

“GAAP” means accounting principles generally accepted in the United States of
America, as consistently applied.

“GLBA” means the Gramm-Leach-Bliley Act of 1999, as amended.

“GNMA” means the Government National Mortgage Association or any successor
thereto.

“Governmental Approvals” means all authorizations, consents, orders, permits and
approvals of, or registrations or filings with, or notices to, or waivers from,
any Governmental Entities required to be obtained, made or delivered in
connection with the execution, delivery or performance of this Agreement or the
consummation of the Transactions (i) by the Sellers or any of their Affiliates
as set forth on Schedule 1.01(e) (the “Seller Required Governmental Approvals”)
or (ii) by Purchaser or any of its Affiliates as set forth on Schedule 1.01(f)
(the “Purchaser Required Governmental Approvals”).

“Governmental Entity” means any federal, state or local governmental authority,
agency, commission or court or self-regulatory authority or commission,
including, without limitation, any Bank Regulator or Agency.

“HAMP” means the Home Affordable Modification Program created under the
Emergency Economic Stabilization Act of 2008.

 

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“HSR Act” means the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

“HUD” means the United States Department of Housing and Urban Development or any
successor thereto.

“Indebtedness” means, with respect to any Person: (i) all indebtedness of such
Person, whether or not contingent, for borrowed money, including all obligations
for principal, interest premiums, penalties, expenses, bank overdrafts and
commitment, breakage or other fees thereunder; (ii) all obligations of such
Person for the deferred and unpaid purchase price of property or services;
(iii) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments; (iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the sellers or
lender under such agreement in the event of default are limited to repossession
or sale of such property); (v) all obligations of such Person as lessee under
leases that have been or should be, in accordance with GAAP, recorded as capital
leases; (vi) all obligations of such Person in respect of any off-balance sheet
financing, including synthetic leases; (vii) all obligations, contingent or
otherwise, of such Person under any acceptance, letter of credit or similar
facilities; (viii) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of such Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of redeemable preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; (ix) all obligations
with respect to interest rate swaps, collars, caps and similar hedging
obligations (including any applicable breakage costs); and (x) all indebtedness
of others referred to in clauses (i) through (ix) above guaranteed directly or
indirectly in any manner by such Person or in effect guaranteed directly or
indirectly by such Person.

“Insurer” means (i) a Person who insures or guarantees all or any portion of the
risk of loss on any Master Serviced Mortgage Loan, Serviced Mortgage Loan or
Serviced Mortgage Pool, any Agency and any provider of private mortgage
insurance, hazard insurance, flood insurance, earthquake insurance or title
insurance with respect to any Master Serviced Mortgage Loans, Serviced Mortgage
Loan or Serviced Mortgaged Property, as the case may be, including any
Governmental Entity, (ii) a Person who provides, with respect to any Master
Servicing Agreement, Servicing Agreement, Servicing Rights Agreement,
Subservicing Agreement or any Applicable Servicing Requirement, any fidelity
bond, direct surety bond, letter of credit, other credit enhancement instrument
or errors and omissions policy, or (iii) a Person who is a certificate insurer.

“Intellectual Property” means all (i) registered and unregistered trademarks,
trade dress, service marks, logos, trade names, slogans and other indicia of
origin, in each case including applications and registrations and renewals of
the same, and the goodwill associated therewith and symbolized thereby;
(ii) inventions and patents and patent applications thereon, including
divisionals, continuations and continuations-in-part, and any renewals,
extensions and reissues thereof; (iii) trade secrets, confidential or
proprietary information, inventions (to the extent not disclosed in published
patent applications), methods, processes, formulae, technology, algorithms,
models, vendor lists, customer lists and know-how and other information meeting
the definition of a trade secret under the Uniform Trade Secrets Act; (iv) works
of authorship, and

 

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registered and unregistered copyrights, the registrations and applications
therefor, and any renewals, extensions, restorations and reversions thereof;
(v) Internet domain names and registrations thereof; (vi) Software; and
(vii) any other similar type of intellectual property right or intangible asset.

“Interim Servicing Agreement” means the Amended and Restated Interim Servicing
Agreement, by and among the Sellers and Purchaser, dated as of the date hereof,
attached as Exhibit G.

“Investor” means any Agency, private investor, trust or other Person who owns or
holds or is committed to purchase Serviced Mortgage Loans, Master Serviced
Mortgage Loans or any interest therein (including any trustee on behalf of any
holders of any related mortgage backed securities) serviced or subserviced by
any Seller pursuant to any Servicing Agreement or Subservicing Agreement or
Master Servicing Agreement, as applicable.

“IRS” means the United States Internal Revenue Service.

“IT Platform” means collectively the Seller Owned Intellectual Property, the
Seller Licensed Intellectual Property, and the hardware and information
technology assets specified on Schedule 1.01(g) attached hereto and used in
connection with the Master Servicing Business, provided, that with respect to
any versions, updates, corrections, enhancements and modifications to any
Software constituting part of the IT Platform, only the versions, updates,
corrections, enhancements and modifications held by or in the possession of the
Sellers as of the Second Closing Date shall be deemed to be included in the “IT
Platform.” Other than the information technology assets specifically listed on
Schedule 1.01(g), no other information technology assets, hardware, systems,
networks or other infrastructure is being transferred pursuant to this Agreement
and the Sellers shall retain all right title and interest to such assets,
including, without limitation, the network data center, facilities and equipment
located at the Littleton Leased Real Property.

“Knowledge” as used with respect to a Person (including references to such
Person being aware of a particular matter) means those facts that are actually
known by any officer with the title ranking not less than senior vice president
or a member of the board of directors (or similar governing body) of such
Person, and includes any facts, matters or circumstances set forth in any
written notice from any Bank Regulator or any other material written notice
received by an officer with the title ranking not less than senior vice
president or a member of the board of directors (or similar governing body) of
that Person.

“Late Fees” means all late fees assessed with respect to any Serviced Mortgage
Loan.

“Law” means any law, statute, ordinance, rule, regulation, code, Permit, Order
or decree of any Governmental Entity.

“LBB” means Lehman Brothers Bancorp Inc.

“LBB Guaranty” means the Guaranty, dated as of the date of the Original Asset
Purchase Agreement, by and between LBB and Purchaser, attached as Exhibit H.

 

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“LBHI” means Lehman Brothers Holdings Inc.

“Liability” means any liability, debt, obligation, commitment, guaranty, claim,
loss, damage, deficiency, fine, settlement payment, award, judgment, cost or
expense of any kind, whether relating to payment, performance or otherwise,
known or unknown, asserted or unasserted, accrued or unaccrued, liquidated or
unliquidated, fixed, absolute or contingent.

“Lien” means any lien, pledge, security interest, mortgage, deed of trust,
claim, encumbrance, easement, servitude, encroachment, covenant, charge or
similar right of any other Person of any kind or nature whatsoever.

“Loss Sharing Claim” means any (a) Liability incurred by a Purchaser Indemnified
Party as a result of an actual violation of any Law, Permit, Applicable
Servicing Requirement, Order or Contract by either Seller prior to the
Applicable Closing in connection with the performance by either Seller of its
obligations under the Servicing Agreements, Servicing Rights Agreements,
Subservicing Agreements, Master Servicing Agreements or Underlying Documents or
(b) Third Party Claim (whenever made) against any Seller Indemnified Party or
any Purchaser Indemnified Party, in each case resulting from, in connection with
or arising out of any act or omission in actual or alleged breach or violation
of any Law, Permit, Applicable Servicing Requirement, Order or Contract (other
than this Agreement or any Ancillary Agreement) by either Seller prior to the
Applicable Closing, in each case in connection with the performance by either
Seller of its obligations under the Servicing Agreements, Servicing Rights
Agreements, Subservicing Agreements, Master Servicing Agreements or Underlying
Documents (including any relevant matters set forth in Section 4.11 (Legal
Proceedings) (to the extent not specifically included in the definition of
“Retained Liability”) and the Exception Report; provided, however, that
notwithstanding anything contained herein to the contrary, Loss Sharing Claims
shall not include any Retained Liability.

“Master Serviced Mortgage Loan” means any mortgage loan or other extension of
credit for which a Seller is acting as Master Servicer under a Master Servicing
Agreement.

“Master Servicer” means the Person responsible for performing the Master
Servicing functions in connection with a Master Serviced Mortgage Loan pursuant
to the applicable Master Servicing Agreement.

“Master Servicing” means all master servicing rights and obligations under the
Master Servicing Agreements, including verifying the accuracy of servicer cash
flow reporting and remittance, ensuring servicer compliance with the applicable
servicing agreements, loan accounting services and, with respect to the RALI
Securitizations, including all bond administration rights and obligations set
forth in the RALI Pooling and Servicing Agreements.

“Master Servicing Agreement” means each Contract set forth on Schedule 1.01(h),
pursuant to which a Seller performs Master Servicing.

“Master Servicing Business” means Sellers’ business of Master Servicing
residential mortgage loans.

 

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“Master Servicing Compensation” means all compensation payable to a Seller as
Master Servicer under the Master Servicing Agreements, excluding servicing fees
payable under the RALI Pooling and Servicing Agreements.

“Master Servicing Custodial Account” means (i) each trust or bank account
maintained by a Seller, as Master Servicer, pursuant to the Master Servicing
Agreements, for the benefit of the applicable Investor and (ii) any amounts
deposited or maintained therein.

“Master Servicing Custodial Account Funded Advances” means, at any time, the
aggregate amount of Servicer Advances of delinquent principal and interest
payments on Master Serviced Mortgage Loans advanced in accordance with the
Master Servicing Agreements (whether defined as “P&I Advances,” “Monthly
Advances,” “Delinquency Advances” or otherwise in the related Master Servicing
Agreements), which a Seller has either funded or reimbursed using funds on
deposit in a Master Servicing Custodial Account held for distribution on a
future distribution date.

“Master Servicing Data Tape” means the data tape, dated as of January 31, 2012,
provided by the Sellers to Purchaser in computer tape form, setting forth the
categories of information with respect to each Master Serviced Mortgage Loan as
specified on Schedule 1.01(i) attached hereto.

“Master Servicing Rights” means all right, title and interest of a Seller:
(i) as Master Servicer under the Master Servicing Agreements, including the
right to receive the Master Servicing Compensation under the Master Servicing
Agreements and any other compensation arising from, or payable to the Master
Servicer under, the Master Servicing Agreements, and any earnings and other
benefits of the related Master Servicing Custodial Accounts and any other
related accounts maintained by such Seller pursuant to the Master Servicing
Agreements, but excluding any servicing fees payable under the RALI Pooling and
Servicing Agreements; (ii) to the related Master Servicing obligations as
specified in each applicable Master Servicing Agreement; (iii) to any and all
accounts established for the Master Servicing of the Master Serviced Mortgage
Loans or pursuant to the applicable Master Servicing Agreements, including, to
the extent provided therein, any right or power to direct the disposition,
disbursement, distribution or investment of amounts deposited therein; (iv) to
the Master Servicing Custodial Accounts maintained pursuant to the Master
Servicing Agreements; (v) with respect to the right of ownership, possession,
control and use of any and all relevant documents and accounts pertaining to the
Master Servicing of the Master Serviced Mortgage Loans; (vi) with respect to any
Servicer Advances required to be reimbursed pursuant to any Master Servicing
Agreement; (vii) to the “clean-up call” right, if any, to purchase the Master
Serviced Mortgage Loans upon the aggregate principal balance thereof being
reduced below a specified amount to the extent provided to such Seller in any
Master Servicing Agreement (such right, a “Call Right”); and (viii) with respect
to all other rights, powers and privileges of such Seller as the Master Servicer
under the Master Servicing Agreements as expressly set forth therein or as
deemed at Law.

“Material Adverse Effect” means any effect, event, circumstance, development or
change that, individually or in the aggregate, has or is reasonably likely to
have a material adverse effect on (i) the Sellers, the Business, including its
financial position and results of operations or the Purchased Assets taken as a
whole, or (ii) the ability of the Sellers to consummate the

 

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Transactions or perform their material obligations hereunder; provided that any
such effect, event, circumstance, development or change arising from or related
to the following matters shall not be taken into account in determining whether
a “Material Adverse Effect” has occurred: (a) conditions affecting the United
States economy generally, the housing or mortgage market or the mortgage
servicing industry, (b) any national or international political or social
conditions, including acts of war (whether or not declared), armed hostilities
and terrorism, or developments or changes therein, (c) conditions resulting from
natural disasters, (d) domestic or international financial, banking or
securities markets (including any disruption thereof and any decline in the
price of any security or any market index), (e) changes in GAAP or regulatory
accounting principles occurring after the date of the Original Asset Purchase
Agreement, (f) changes in any generally applicable Law or other binding
directives issued by any Governmental Entity after the date of the Original
Asset Purchase Agreement (except for regulatory action directed exclusively
against the Sellers (the substance of which is not also directed at other
substantially similar businesses, whether or not supervised by the same
Governmental Entities as the Sellers), (g) the announcement of the execution of
this Agreement, or the pendency of the Transactions or the identity of Purchaser
(including employee departures), (h) the compliance by the Sellers with their
covenants and agreements contained in this Agreement (other than the Sellers’
covenants and agreements set forth in Section 6.01), (i) any action taken or
omitted to be taken by the Sellers at the written request or with the written
consent of Purchaser, (i) any failure by the Sellers to meet any internal or
published projections, forecasts or revenue or earnings predictions for any
period ending on or after the date of this Agreement; provided that any effect,
event, circumstance, development or change that caused or contributed to such
failure to meet projections, forecasts or predictions shall not be excluded
pursuant to this clause (k), (l) any items disclosed as of the date of the
Original Asset Purchase Agreement on any Seller Disclosure Schedule to this
Agreement, the Litigation Report, the Licensing Report, the Exception Report,
the Environmental Report, the Action Report, the Benefits Report or the
Foreclosure Report, (m) settlements or agreements entered into between one or
more mortgage servicers, on the one hand, and a Governmental Entity or
Governmental Entities, on the other, (n) any increases or decreases in the
outstanding principal balance of servicing advances owed to the Sellers;
provided, that any effect, event, circumstance, occurrence, state of facts,
condition, development or change that caused or contributed to such increases or
decreases in the outstanding principal balance of servicing advances owed to the
Sellers shall not be excluded pursuant to this clause (n), (o) the taking of any
action contemplated by this Agreement and the Ancillary Agreements, including
the completion of the Transactions (other than any such action contemplated by
the Sellers’ covenants and agreements set forth in Section 6.01) or (p) any
adverse change in or effect on the Business that is cured prior to the
Applicable Closing.

“MERS” means Mortgage Electronic Registration Systems, Incorporated or any
successor thereto.

“Mortgage Loan Payment” means, with respect to any Serviced Mortgage Loan, the
amount of each scheduled or unscheduled installment on such Serviced Mortgage
Loan, whether for principal, interest, escrow or other purpose, required or
permitted to be paid by the Serviced Mortgagor in accordance with the terms of
the Serviced Mortgage Loan Documents.

“Non-Agency Servicing Agreement” means each Contract set forth on Schedule
1.01(q)(2), pursuant to which a Seller performs Servicing and any such Contract
entered into by

 

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a Seller between the date of the Original Asset Purchase Agreement and the
Second Closing Date pursuant to which a Seller shall be appointed by ALS, in its
capacity as Master Servicer, to act as Servicer with respect to any Master
Serviced Mortgage Loans.

“OCC” means, in the context of any date prior to July 21, 2011, the Office of
Thrift Supervision, and in the context of any date on or after July 21, 2011,
the Office of the Comptroller of the Currency or any successor thereto.

“Order” means any applicable order, judgment, ruling, injunction, assessment,
award, decree, writ, temporary restraining order, or any other order of any
nature enacted, issued, promulgated, enforced or entered by a Governmental
Entity.

“Owned Real Property” means the parcels of land described in Section 4.17(b) of
the Seller Disclosure Schedules and all buildings, structures (surface and
sub-surface) and other improvements located on such land and owned by any Seller
together with all right, title and interest of any Seller, if any, in and to
(i) all rights, ways, easements, privileges and appurtenances thereto, (ii) all
strips and gores appurtenant thereto, and (iii) any land lying in the bed of any
streets, roads and alleys appurtenant thereto.

“Permit” means any license, permit, authorization, approval or consent issued by
a Governmental Entity.

“Permitted Liens” means all (i) Liens that are disclosed in Section 4.04 of the
Seller Disclosure Schedules, (ii) mechanics’, carriers’, workmen’s, repairmen’s
or other like Liens arising or incurred in the ordinary course of business and
Liens for Taxes that are not yet due and payable or that may thereafter be paid
without penalty, (iii) applicable Laws, including, without limitation, zoning
ordinances, subdivision regulations and applicable securities Laws, (iv) Liens
created by or through Purchaser, and (v) with respect to the Owned Real Property
and/or the Leased Real Property, (A) exceptions to coverage set forth in the
Seller Title Policies, (B) the rights of tenants of the Owned Real Property and
(C) any other Liens, reservations or restrictions of any kind (whether recorded,
perfected, choate or inchoate, actual or contingent) that would not have a
material adverse impact on the use of the Owned Real Property or Leased Real
Property, respectively.

“Person” means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, limited
liability partnership, joint venture, estate, trust, unincorporated
organization, association, or other entity or form of business enterprise or
Governmental Entity.

“Personal Property” means each item or distinct group of equipment, supplies,
furniture, fixtures, personalty and other tangible personal property, owned or
leased by a Seller, and located at the Owned Real Property and the Leased Real
Property, but specifically excluding all information technology assets and
infrastructure of Sellers, except as set forth on Schedule 1.01(g). As of the
date of the Original Asset Purchase Agreement, Personal Property included the
personal property listed on Schedule 1.01(j).

“Personal Property Leases” means each lease for Personal Property listed on
Schedule 1.01(k).

 

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“Pollutants” means pollutants, contaminants, wastes, toxic substances, petroleum
and petroleum products, and any other materials regulated under Environmental
Laws, including, but not limited to, radon, radioactive material, dioxins,
asbestos, asbestos-containing material, urea formaldehyde foam insulation, lead
and polychlorinated biphenyls.

“Pre-Closing Tax Period” means any taxable period (or the allocable portion of a
Straddle Period) ending on or before the close of business on the Applicable
Closing Date.

“PSA Amendment” means (a) an amendment to the provisions of any Servicing
Agreement, Subservicing Agreement, Servicing Rights Agreement or Master
Servicing Agreement that relates to the replacement of the Servicer or the
assignment or transfer of Servicing or Master Servicing responsibility, which
amendment is determined by the Sellers and Purchaser to be reasonably necessary
or appropriate to be entered into in connection with obtaining the Servicing
Agreement Consents and (b) any amendment to the terms of any Servicing Agreement
or Subservicing Agreement, to cause such Servicing Agreement or Subservicing
Agreement to be deemed an Eligible Servicing Agreement.

“Purchase Price Bank Account” means a bank account in the United States to be
designated by the Sellers in a written notice to Purchaser at least three
Business Days before the Applicable Closing.

“Purchased Assets” means the Agency Purchased Assets and the Non-Agency
Purchased Assets.

“Purchaser Fundamental Representations” means the representations and warranties
set forth in Section 5.01 (Organization), Section 5.02 (Authority; No Violation)
and Section 5.06 (Brokers, Finders and Financial Advisors).

“RALI Pooling and Servicing Agreements” means the applicable Standard Terms of
Pooling and Servicing Agreement and the related Series Supplement for each of
the RALI Securitizations.

“RALI Securitizations” means each securitization transaction set forth on
Schedule 1.01(l).

“Rating Agency Affirmation Letter” means, as to each Servicing Agreement or
Master Servicing Agreement that requires rating agency confirmation pursuant to
the terms of such Servicing Agreement or Master Servicing Agreement in order to
assign such Servicing Agreement or Master Servicing Agreement to Purchaser
pursuant to this Agreement, a letter from each rating agency referenced in such
Servicing Agreement or Master Servicing Agreement as the relevant rating agency
to the effect that, as applicable, the assignment by the applicable Seller and
the assumption by Purchaser with respect to such Servicing Agreement or Master
Servicing Agreement will not, in and of itself, result in a downgrading or
withdrawal of the rating of any securities issued pursuant to the related
securitization or structured finance transaction that have been rated by such
rating agency.

“Real Property Leaseholds” means the leasehold estate and interest of the
Sellers in, to and under the Real Property Leases.

 

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“Retained Liability” means any Covered Loss that:

(a) constitutes a fine, civil monetary penalty, restitution, damages or any
other amounts that may be paid with respect to a Seller’s pre-Closing
foreclosure or servicing practices (including any out of pocket payments made by
either Seller or any Purchaser Indemnified Party in respect of any Serviced
Mortgage Loan modification providing for a reduction of any portion or all of
the outstanding unpaid principal balance required pursuant to matters described
in clauses (i) and (ii) below) to be paid to any Governmental Entity or to any
other Person as directed or instructed by any Governmental Entity under, in
connection with or arising out of (i) any settlement that is entered into by the
Bank or ALS with one or more Attorneys General of the 50 states or any similar
individual or office in any district or territory thereof, (ii) the Consent
Order or (iii) any other Action by a Governmental Entity, whether such Action is
brought prior to, on or after the Applicable Closing Date;

(b) results from or arises out of any Action set forth in the Sellers’ Action
Report, dated as of the date of the Original Asset Purchase Agreement (the
“Action Report”), a copy of which has heretofore been delivered to Purchaser;

(c) results from or arises out of any Action by a third party arising out of or
in connection with Foreclosures completed prior to the Applicable Closing Date,
whether such Action is brought prior to, on or after the Applicable Closing
Date;

(d) results from or arises out of any Action by a third party arising out of or
in connection with Foreclosures in process as of the Applicable Closing Date,
including the Foreclosures in process set forth in (i) the Sellers’ Foreclosure
Report, dated as of the date hereof (the “First Closing Foreclosure Report”), a
copy of which has heretofore been delivered to Purchaser, and (ii) the Sellers’
Foreclosure Report, dated as of the Second Closing Date (the “Second Closing
Foreclosure Report”), a copy of which shall be delivered to Purchaser one
(1) Business Day prior to the Second Closing Date, in each case where the
Covered Loss results from action by the Sellers prior to the Applicable Closing
Date, to the extent Purchaser is not in breach of its obligations under
Section 7.10(w) and Section 10.10(b) with respect to any mortgage loan for which
Purchaser is seeking indemnity, or arises out of action by either Seller prior
to the Applicable Closing Date, whether such Action is brought prior to, on or
after the Applicable Closing Date; or

(e) results from or arises out of any Action that is a class action, or that is
a putative or proposed class action, whether or not such Action is certified,
resulting from or arising out of any act or omission in actual or alleged breach
or violation of any Law, Permit, Applicable Servicing Requirement, Order or
Contract (other than this Agreement or any Ancillary Agreement) by either Seller
prior to the Closing, in each case in connection with the performance by either
Seller of its obligations under the Applicable Servicing Requirements, Servicing
Agreements, Servicing Rights Agreements, Subservicing Agreements, Master
Servicing Agreements or Underlying Documents whether, such Action is brought
prior to, on or after the Applicable Closing Date.

“Returned Payment” means a payment made by a Serviced Mortgagor with respect to
a Serviced Mortgage Loan prior to the Applicable Closing, which payment (i) was
turned over to

 

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Purchaser or remitted by a Seller to an Investor or other third party, and
(ii) was rejected or which a Seller was required to return and, in fact,
returned (whether by credit or otherwise) in the period commencing on the
Applicable Closing Date and ending on the 60th day following the Applicable
Closing Date; provided, that any amount so rejected or required to be returned
within such period that was subsequently collected by a Seller within such
period shall not constitute a Returned Payment.

“RHS” means the Rural Housing Service, an agency of the United States Department
of Agriculture and any successor thereto and including the Farmers Home
Administration, as the predecessor in interest to the Rural Housing Service.

“Seller Fundamental Representations” means the representations and warranties
set forth in Section 4.01 (Organization), Section 4.02 (Authority; No
Violation), Section 4.04(a) (Title to Purchased Assets), and Section 4.14
(Brokers, Finders and Financial Advisors).

“Seller Group” means any combined, unitary, consolidated or other affiliated
group within the meaning of Section 1504 of the Code or otherwise, of which any
Seller is or has been a member for Tax purposes.

“Seller Intellectual Property” means the Seller Licensed Intellectual Property
and the Seller Owned Intellectual Property.

“Seller Licensed Intellectual Property” means the Intellectual Property set
forth on Schedule 1.01(m) (as such Schedule may be amended by mutual agreement
of the Sellers and Purchaser between the date of the Original Asset Purchase
Agreement and the Second Closing Date) that is licensed, exclusively or
non-exclusively, to the Sellers and used in connection with the Master Servicing
Business.

“Seller Owned Intellectual Property” means the Intellectual Property set forth
on Schedule 1.01(n) (as such Schedule may be amended by mutual agreement of the
Sellers and Purchaser between the date of the Original Asset Purchase Agreement
and the Second Closing Date) that is owned or purported to be owned by the
Sellers and used in connection with the Master Servicing Business.

“Serviced Mortgage” means, with respect to any Serviced Mortgage Loan, a
mortgage, deed of trust or other security instrument (including a security
agreement) creating a Lien upon real property and any other property described
therein which secures a Serviced Mortgage Note, together with any assignment,
reinstatement, extension, endorsement or modification thereof.

“Serviced Mortgage Loan” means any mortgage loan or other extension of credit,
including mortgage loans related to Serviced REO Property, for which a Seller is
acting as Servicer under a Servicing Agreement or a Subservicing Agreement.

“Serviced Mortgage Loan Data Tape” means the data tape, dated as of January 31,
2012, provided by the Sellers to Purchaser in computer tape form, setting forth
the categories of information with respect to each Serviced Mortgage Loan as
specified on Schedule 1.01(o) attached hereto.

 

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“Serviced Mortgage Loan Documents” means the Servicing Custodial Files and the
Servicing Loan Files for all of the Serviced Mortgage Loans.

“Serviced Mortgage Note” means, with respect to any Serviced Mortgage Loan, a
promissory note or notes, or other evidence of Indebtedness, with respect to
such Serviced Mortgage Loan that is secured by a Serviced Mortgage or Mortgages,
together with any assignment, reinstatement, extension, endorsement or
modification thereof.

“Serviced Mortgage Pool” means a group of Serviced Mortgage Loans that have been
pledged, granted or sold to secure or support payments on specific
mortgage-backed or other securities or specific participation certificates.

“Serviced Mortgaged Property” means (i) the real property and improvements
thereon, (ii) the stock in a residential housing corporation and the lease to
the related dwelling unit, (iii) a manufactured home and, as applicable, the
real property upon which the home is situated, or (iv) the personal property or
other collateral, in each case that secures a Serviced Mortgage Note and that is
subject to a Serviced Mortgage.

“Serviced Mortgagor” means the obligor(s) (including any lessee(s), borrower(s)
or guarantor(s)) on a Serviced Mortgage Note or under a Serviced Mortgage Loan.

“Serviced REO Property” means any Serviced Mortgaged Property with respect to
which the Investor under the related Servicing Agreement or Subservicing
Agreement or the Servicer for the benefit of such Investor has taken ownership
or possession as a result of Foreclosure, acceptance of a deed in lieu of
Foreclosure or other exercise of remedies under the Serviced Mortgage Loan
Documents.

“Servicer” means the Person responsible for performing the Servicing functions
in connection with a Serviced Mortgage Loan pursuant to the applicable Servicing
Agreement or Subservicing Agreement.

“Servicer Advance” means (i) any advance in respect of real estate taxes, ground
rents, assessments or similar charges, or of hazard, flood or primary mortgage
insurance premiums, required to be paid by or on behalf of the related Serviced
Mortgagor under the terms of the related Serviced Mortgage Loan or Master
Serviced Mortgage Loan made by a Seller in accordance with the applicable
Servicing Agreement, Subservicing Agreement or Master Servicing Agreement,
(ii) any “Servicing Advance” (as defined in the applicable Servicing Agreement,
Subservicing Agreement or Master Servicing Agreement or any other similar term
therein) or, to the extent not so defined therein, reasonable out-of-pocket
expenses incurred by a Seller as Servicer or Master Servicer in connection with
a default, delinquency, modification, foreclosure or other event relating to a
Serviced Mortgage Loan or Master Serviced Mortgage Loan and, in each case, made
in accordance with Applicable Servicing Requirements, and (iii) all “P&I
Advances,” “Monthly Advances” (each as defined in the applicable Servicing
Agreement, Subservicing Agreement or Master Servicing Agreement, as applicable,
or any other similar term therein) or other advances in respect of principal or
interest payable on a Serviced Mortgage Loan or Master Serviced Mortgage Loan
made by a Seller, in each case in accordance with the applicable Servicing
Agreement, Subservicing Agreement or Master Servicing

 

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Agreement, or made by a Seller in accordance with a Servicing Rights Agreement
with respect to any mortgage loan being serviced or subserviced by a third party
under such Servicing Rights Agreement.

“Servicer Advance Data Tape” means the data tape, dated as of January 31, 2012,
provided by the Sellers to Purchaser in computer tape form, setting forth the
categories of information with respect to each Servicer Advance as specified on
Schedule 1.01(p) attached hereto.

“Servicer Advance Receivable” means, with respect to any Servicer Advances, the
contractual right to reimbursement pursuant to the terms of the applicable
Servicing Agreement, Subservicing Agreement or Master Servicing Agreement for
such Servicer Advances made by a Seller in its capacity as Servicer or Master
Servicer pursuant to such Servicing Agreement, Subservicing Agreement or Master
Servicing Agreement, which Servicer Advances have not previously been
reimbursed, and including all rights of the Servicer or Master Servicer to
enforce payment of such obligation under the related Servicing Agreement,
Subservicing Agreement or Master Servicing Agreement. A “Servicer Advance
Receivable” shall remain a “Servicer Advance Receivable” unless and until the
Servicer has actually received cash in reimbursement of that Servicer Advance
Receivable.

“Servicing” means loan servicing, subservicing and special servicing rights and
obligations, including one or more of the following functions (or a portion
thereof): (i) the administration and collection of payments for the reduction of
principal and/or the application of interest on a Serviced Mortgage Loan;
(ii) the collection of payments on account of taxes and insurance; (iii) the
remittance of appropriate portions of collected payments; (iv) the provision of
escrow administration; (v) the pursuit of Foreclosure and alternative remedies
against a related Serviced Mortgaged Property; and (vi) the administration and
liquidation of Serviced REO Properties, charged-off debts and unsecured notes,
and, in each case, all rights, powers and privileges incidental to any of the
foregoing, and expressly includes the right to enter into arrangements with
third parties that generate Ancillary Income and benefits with respect to the
Serviced Mortgage Loans; provided, that, with respect to RALI Securitizations,
the term Servicing shall not include any master servicing or bond administration
rights or obligations under the RALI Pooling and Servicing Agreements, Master
Servicing Agreements, or Subservicing Agreements.

“Servicing Agreements” means the Agency Servicing Agreements and the Non-Agency
Servicing Agreements. For the avoidance of doubt, the Servicing Agreements shall
not include the Subservicing Agreements.

“Servicing Agreement Consent” means (a) any consent, approval, authorization
that is required from an Investor or any other third party, including any
Agency, as applicable, that is required pursuant to the terms of any Servicing
Agreement, Subservicing Agreement or Master Servicing Agreement in order to
assign or otherwise transfer such Servicing Agreement, Subservicing Agreement or
Master Servicing Agreement to Purchaser pursuant to the terms of this Agreement,
which consent shall (i) satisfy the applicable requirements under such Servicing
Agreement, Subservicing Agreement or Master Servicing Agreement, if any, with
respect to the assignment or transfer of the Servicing Agreement, Subservicing
Agreement or Master Servicing

 

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Agreement to, and assumption of the Servicing Agreement, Subservicing Agreement
or Master Servicing Agreement by, Purchaser pursuant to the terms of this
Agreement, (ii) include a PSA Amendment to such Servicing Agreement,
Subservicing Agreement or Master Servicing Agreement, if reasonably necessary
and (iii) include a Rating Agency Affirmation Letter, but only to the extent
expressly required by such Servicing Agreement, Subservicing Agreement or Master
Servicing Agreement and (b) to the extent not covered by the foregoing clause
(a), any consent or approval that is required from an Agency pursuant to the
terms of such Agency’s servicing guide in order to permit Purchaser to service
any Serviced Mortgage Loans for such Agency.

“Servicing Business” means Sellers’ business of Servicing residential mortgage
loans and certain non-real estate secured and unsecured loans.

“Servicing Compensation” means all compensation, including excess servicing
spread, payable to a Seller as Servicer under the Servicing Agreements,
Subservicing Agreements or Underlying Documents, including each servicing fee
payable based on a percentage of the outstanding principal balance of the
Serviced Mortgage Loans and any other amounts payable to a Seller as Servicer
under the Servicing Agreements, or Subservicing Agreements, but excluding all
Ancillary Income and Late Fees.

“Servicing Custodial File” means, with respect to any Serviced Mortgage Loan,
all of the documents that must be maintained on file with a document custodian,
owner or trustee under Applicable Servicing Requirements with respect to such
Serviced Mortgage Loan.

“Servicing Loan File” means, with respect to each Serviced Mortgage Loan,
(i) the Servicing Custodial File and all other documents, instruments,
agreements and records in the possession of a Seller, including electronic
copies, relating to such Serviced Mortgage Loan that are reasonably necessary
for the Servicing of such Serviced Mortgage Loan in accordance with Applicable
Servicing Requirements, including, for the avoidance of doubt, all documentation
required to be maintained pursuant to HAMP and (ii) the right (if any) to
request or demand copies of any document, instrument, agreement or record
relating to such Serviced Mortgage Loan under the applicable Servicing
Agreements or Subservicing Agreements or applicable Serviced Mortgage Loan
Documents.

“Servicing Rights” means all right, title and interest of each Seller:

(i) as Servicer under the Servicing Agreements, including, without limitation,
(a) the right to receive the Servicing Compensation and any Ancillary Income and
Late Fees under the Servicing Agreements and any other compensation arising
from, or payable to the Servicer under, the Servicing Agreements, and any
earnings and other benefits of the related Custodial Accounts, Escrow Accounts
and any other related accounts maintained by such Seller pursuant to the
Servicing Agreements; (b) to the related Servicing obligations as specified in
each applicable Servicing Agreement, including the obligations to administer and
collect the payments of or relating to the Serviced Mortgage Loans, and to remit
all amounts and provide information reporting to others in accordance with the
Servicing Agreements; (c) to any and all accounts established for the Servicing
of the Serviced Mortgage Loans or pursuant to the applicable Servicing
Agreements, including, to the extent provided therein, any right or power to
direct the

 

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disposition, disbursement, distribution or investment of amounts deposited
therein; (d) to the Escrow Accounts and Custodial Accounts maintained pursuant
to the Servicing Agreements; (e) with respect to the right of ownership,
possession, control and use of any and all Servicing Loan Files and other
relevant documents and accounts pertaining to the Servicing of the Serviced
Mortgage Loans; (f) with respect to any Servicer Advances required to be
reimbursed pursuant to any Servicing Agreement; (g) to the “clean-up call”
right, if any, to purchase the Serviced Mortgage Loans upon the aggregate
principal balance thereof being reduced below a specified amount to the extent
provided to such Seller in any Servicing Agreement; (h) to enter into
arrangements that generate Ancillary Income in respect of the Serviced Mortgage
Loans to the extent provided to such Seller under any Servicing Agreement; and
(i) with respect to all other rights, powers and privileges of such Seller as
the Servicer under the Servicing Agreements as expressly set forth therein or as
deemed at Law; and

(ii) under the Servicing Rights Agreements or any side or ancillary agreement or
understanding entered into in connection with any Servicing Rights Agreement,
including, without limitation, (a) the right to receive any servicing fees,
general servicing fees, excess servicing fees, late fees or other income or
compensation payable to the servicing rights owner, solely in its capacity as
such, under such Servicing Rights Agreements, (b) the right to terminate and/or
replace the servicer named in such Servicing Rights Agreement with or without
cause and (c) all other rights of a servicing rights owner as provided for in
any Servicing Rights Agreement.

“Servicing Rights Agreement” means each Contract set forth on Schedule 1.01(r),
pursuant to which a Seller owns the Servicing Rights but the servicing functions
are performed by a third party.

“Servicing Rights Data Tape” means the data tape, dated as of January 31, 2012,
provided by the Sellers to Purchaser in computer tape form, setting forth the
categories of information with respect to the Servicing Rights as specified on
Schedule 1.01(s) attached hereto.

“Servicing Transfer Date” means the Applicable Closing Date or such other date
under the Interim Servicing Agreement on which a transfer of Servicing Rights,
Servicing Agreements, Subservicing Rights, Subservicing Agreements, Master
Servicing Rights or Master Servicing Agreements occurs on the books and records
of the applicable Investor.

“Shared Loss Cap” means an amount equal to fifty percent (50%) of the portion of
the Aggregate Purchase Price allocated to the Servicing Rights.

“Software” means (a) all computer and computer network software, firmware,
programs, applications and databases in any form, including any content or other
information associated or used therewith, along with all source code, object
code, operating systems, specifications, data, database management code,
utilities, libraries, scripts, graphical user interfaces, menus, images, icons,
forms, methods of processing, software engines, platforms, data formats and all
other code and documentation, whether in human readable form or otherwise, and
all copies of the foregoing in any and all formats or media, and (b) with
respect to the foregoing items, all versions, updates, corrections, enhancements
and modifications thereto.

 

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“Sublease Agreement” means the Sublease Agreement to be entered into by the
Sellers and Purchaser with respect to the second and fifth floors of the
Littleton Leased Real Property.

“Subservicing Agreement” means each Contract identified on Schedule 1.01(t) as a
subservicing agreement, pursuant to which a Seller services Serviced Mortgage
Loans as a subservicer for a third party.

“Subservicing Rights” means all right, title and interest of a Seller: (i) as
Servicer under the Subservicing Agreements, including the right to receive
Servicing Compensation and any Ancillary Income and Late Fees under the
Subservicing Agreements and any other compensation arising from, or payable to
the Servicer under, the Subservicing Agreements, including earnings on and other
benefits of the related Custodial Accounts, Escrow Accounts and any other
related accounts maintained by such Seller pursuant to the Subservicing
Agreements; (ii) to the related Subservicing obligations as specified in each
applicable Subservicing Agreement; (iii) to any and all accounts established for
the Servicing of the Serviced Mortgage Loans pursuant to the applicable
Subservicing Agreements, including, to the extent provided therein, any right or
power to direct the disposition, disbursement, distribution or investment of
amounts deposited therein; (iv) to the Escrow Accounts and Custodial Accounts
maintained pursuant to the Subservicing Agreements; (v) with respect to the
right of ownership, possession, control and use of any and all Servicing Loan
Files and other relevant documents and accounts pertaining to the Servicing of
the Serviced Mortgage Loans; (vi) with respect to any Servicer Advances required
to be reimbursed pursuant to any Subservicing Agreement; and (vii) with respect
to all other rights, powers and privileges of such Seller as the Servicer under
the Subservicing Agreements as expressly set forth therein or as deemed at Law.

“State Agency” means any state agency or other entity with authority to regulate
the mortgage-related activities of a Seller or to determine the investment or
servicing requirements with regard to mortgage loan origination, purchasing,
servicing or master servicing performed by a Seller.

“Straddle Period” means any taxable period that includes (but does not end on)
the Applicable Closing Date.

“Suspense Funds” means, with respect to any Serviced Mortgage Loan, the related
funds received by the Servicer that are in the process of being finally applied.

“Tax” means any and all (i) federal, state, local or foreign tax, fee, escheat
of unclaimed property or other like assessment or charge of any kind, including
without limitation any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, value-added, transfer,
franchise, profits, license, payroll, employment, social security (or similar),
unemployment, disability, registration, estimated, excise, severance, stamp,
capital stock, occupation, property, water, sewer, environmental or windfall
tax, premium, customs duty or other tax, together with any interest, penalty or
additions thereto, whether disputed or not; (ii) liability for the payment of
Tax as the result of membership in the Seller Group; and (iii) transferee,
secondary tax sharing or indemnification liability in respect of any Tax
(whether imposed by Law or contractual arrangement).

 

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“Tax Return” means any return (including estimated returns), declaration,
report, claim for refund, or information return or statement or any amendment
thereto relating to Taxes, including any such document prepared on an
affiliated, consolidated, combined or unitary group basis and any schedule or
attachment thereto.

“Termination Date” means August 31, 2012.

“Third Party Consents” means the consents or approvals of, or waivers from,
third parties other than Governmental Entities, other than the Servicing
Agreement Consents, required to be obtained or delivered by any Seller in
connection with the execution, delivery or performance by the Sellers of this
Agreement or to consummate the Transactions and set forth on Schedule 1.01(u).

“Underlying Documents” means each operative document or agreement executed in
connection with the Master Servicing Agreements, Servicing Agreements,
Subservicing Agreements and Servicing Rights Agreements that is binding upon a
Seller in connection with the Business, including indentures, custodial
agreements, administrative agreements and agreements with any Insurer.

“VA” means the United States Department of Veterans Affairs and any successor
thereto.

“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988,
and any other similar Law of any state, locality, or other Governmental Entity.

Section 1.02       Index of Certain Other Definitions.

The following capitalized terms used in this Agreement have the meanings located
in the corresponding Section referred to below:

 

   

Term

      

Section

 

Action Report

     Definition of “Retained Liability”  

Agency Assumed Liabilities

     Section 2.02(a)  

Agency Purchase Price

     Section 2.02(a)  

Agency Purchased Assets

     Section 2.10(a)  

Aggregate Purchase Price

     Section 2.03(a)  

Agreement

     Preamble  

Allocation Objections Notice

     Section 2.03(d)(iii)  

Allocation Schedule

     Section 2.03(d)(ii)  

ALS

     Preamble  

Alternative Proposal

     Section 6.05(a)  

Assignment and Assumption of Lease

     Section 9.02(a)(ii)(D)(5)  

Assumed Litigation

     Section 7.10(m)(i)  

Audited Financial Statements

     Section 4.05(a)  

Bank

     Preamble  

Baseline Compensation

     Section 7.08(b)  

Basket Amount

     Section 10.04(a)  

Benefits Report

     Section 4.13(b)

 

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Term

      

Section

 

Bifurcated Closing Letter Agreement

     Recitals  

Business Employee

     Section 4.13(a)  

Call Right

     Definition of “Master Servicing Rights”  

Closing

     Section 9.01  

Closing Date

     Section 9.01  

CMA

     Section 6.05(a)  

COBRA

     Section 4.13(d)  

Confidentiality Agreement

     Section 12.01  

Continuing Employee

     Section 7.08(b)  

Controlling Party

     Section 10.07(e)  

Conversion Plan

     Section 7.10(i)(i)  

Criminal Third Party Claim

     Section 10.07(f)  

Cut-off Date Master Servicing Data Tape

     Section 7.10(z)  

De Minimis Threshold

     Section 10.04(b)  

Environmental Report

     Section 4.15  

Excluded Assets

     Section 2.01(c)  

Exception Report

     Section 4.12(a)  

Excluded Liabilities

     Section 2.02(c)  

Financial Statements

     Section 4.05(a)  

Financing

     Section 5.04  

First Closing

     Section 9.01(a)  

First Closing Cut-off Date Servicer Advance Data Tape

     Section 7.10(e)  

First Closing Cut-off Date Servicing Rights Data Tape

     Section 7.10(d)  

First Closing Date

     Section 9.01(a)  

First Closing Date Payment

     Section 2.03(b)(i)  

First Closing Foreclosure Report

     Definition of “Retained Liability”  

First Closing Litigation Report

     Section 2.02(a)(v)  

First Closing Pre-Closing Statement

     Section 2.03(b)(i)  

Indemnified Party

     Section 10.07(a)  

Indemnifying Party

     Section 10.07(a)  

Independent Accountant

     Section 2.04(b)  

Interim Balance Sheet

     Section 4.05(a)  

Indianapolis Leased Real Property

     Section 4.17(a)  

Leased Real Property

     Section 4.17(a)  

Lenders

     Section 5.04  

Licensing Report

     Section 4.01(a)  

Littleton Leased Real Property

     Section 4.17(a)  

Losses

     Definition of “Covered Loss”  

Master Servicing Business Benefit Plan

     Section 4.13(b)  

Master Servicing Employee

     Section 4.13(a)  

Material Contracts

     Section 4.08(a)  

Monthly Master Servicing Data Tape

     Section 7.10(c)  

Monthly Serviced Mortgage Loan Data Tape

     Section 7.10(c)

 

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Term

      

Section

 

Non-Agency Assumed Liabilities

     Section 2.02(b)  

Non-Agency Purchase Price

     Section 2.03(a)  

Non-Agency Purchased Assets

     Section 2.01(b)  

Non-Controlling Party

     Section 10.07(e)  

Notice of Disagreement

     Section 2.04(b)  

Original Asset Purchase Agreement

     Recitals  

Objection

     Section 2.04(b)  

Parties

     Preamble  

Post-Closing Statement

     Section 2.04(a)  

Purchase Price Adjustment

     Section 2.04(d)  

Purchaser

     Preamble  

Purchaser Disclosure Schedules

     Section 3.01(a)  

Purchaser Indemnified Parties

     Section 10.02  

Purchaser Required Governmental Approvals

     Definition of “Governmental Approvals”  

Real Property Leases

     Section 4.17(a)  

Representatives

     Section 7.02(a)  

Response Period

     Section 2.03(d)(iii)  

Second Closing

     Section 9.01(a)  

Second Closing Cut-off Date Servicer Advance Data Tape

     Section 7.10(e)  

Second Closing Cut-off Date Servicing Rights Data Tape

     Section 7.10(d)  

Second Closing Date

     Section 9.01(a)  

Second Closing Date Payment

     Section 2.03(c)(i)  

Second Closing Foreclosure Report

     Definition of “Retained Liability”  

Second Closing Litigation Report

     Section 2.02(b)(vii)  

Second Closing Pre-Closing Statement

     Section 2.03(c)(i)  

Sellers

     Preamble  

Seller 401(k) Plan

     Section 7.08(g)  

Seller Disclosure Schedules

     Section 3.01(a)  

Seller Indemnified Parties

     Section 10.03  

Seller Required Governmental Approvals

     Definition of “Governmental Approvals”  

Seller Title Policies

     Section 4.17(b)  

Special Warranty Deeds

     Section 9.02(a)(ii)(D)(1)  

Subservicing Letter Agreement

     Recitals  

Third Party Claim

     Section 10.07(a)  

Transactions

     Section 2.01(b)  

Transfer Taxes

     Section 7.09  

True-up Payment

     Section 2.03(g)  

Unaudited Financial Statements

     Section 4.05(a)

 

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ARTICLE II.

PURCHASE AND SALE

Section 2.01       Purchase and Sale of Purchased Assets.

(a)     Upon the terms and subject to the conditions of this Agreement, at the
First Closing, the Sellers shall sell, assign, transfer, convey and deliver, or
cause to be sold, assigned, transferred, conveyed and delivered, to Purchaser
(or one or more of Purchaser’s designated Affiliates), and Purchaser (or one or
more of Purchaser’s designated Affiliates) shall purchase from the Sellers, all
of the Sellers’ right, title and interest in and to the Agency Purchased Assets,
free and clear of all Liens other than Permitted Liens. “Agency Purchased
Assets” means the following assets, whether owned, leased, licensed or otherwise
contracted by, or otherwise available to, the Sellers as of the First Closing
Date, and no others:

(i)      the Agency Servicing Agreements and the related Servicing Rights;

(ii)     the Underlying Documents with respect to the Agency Servicing
Agreements;

(iii)    the Servicer Advance Receivables with respect to the Agency Servicing
Agreements that are outstanding as of the close of business on the First Closing
Date;

(iv)    the Deferred Servicing Fees with respect to the Agency Servicing
Agreements that are outstanding as of the close of business on the Cut-off Date;

(v)    the Acquired Accounts Receivables set forth on Schedule 1.01(a)(1) that
are outstanding as of the close of business on the First Closing Date;

(vi)    all causes of action, lawsuits, judgments, claims, refunds, choses in
action, rights of recovery, rights of set-off, rights of recoupment, demands and
any other rights or claims of any nature, whether arising by way of counterclaim
or otherwise, available to or being pursued by the Sellers to the extent related
to the Agency Purchased Assets and/or Agency Assumed Liabilities, except for
those rights and claims set forth on Schedule 2.01(a)(vi);

(vii)    all credits, prepaid expenses, deferred charges, security deposits,
prepaid items and duties as of the close of business on the First Closing Date
to the extent related to an Agency Purchased Asset or an Agency Assumed
Liability, as set forth on Schedule 2.01(a)(vii);

(viii)    all guaranties, warranties, indemnities and similar rights in favor of
the Sellers to the extent related to any Agency Servicing Agreements, or any
other Agency Purchased Assets and to the extent that a Seller has the right to
sell, assign, transfer, convey and deliver, or has the right to cause to be
sold, assigned, transferred, conveyed and delivered, such assets;

 

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(ix)     all Servicing Compensation, Late Fees and Ancillary Income, in each
case under the Agency Servicing Agreements and which is earned or assessed but
not paid to the applicable Seller as of the close of business on the Cut-off
Date; and

(x)     to the extent permitted by Law, all Permits held by the Sellers to the
extent exclusively related to the Agency Purchased Assets.

(b)     Upon the terms and subject to the conditions of this Agreement, at the
Second Closing, the Sellers shall sell, assign, transfer, convey and deliver, or
cause to be sold, assigned, transferred, conveyed and delivered, to Purchaser
(or one or more of Purchaser’s designated Affiliates), and Purchaser (or one or
more of Purchaser’s designated Affiliates) shall purchase from the Sellers, all
of the Sellers’ right, title and interest in and to the Non-Agency Purchased
Assets, free and clear of all Liens other than Permitted Liens. “Non-Agency
Purchased Assets” means the following assets, whether owned, leased, licensed or
otherwise contracted by, or otherwise available to, the Sellers as of the Second
Closing Date, and no others:

(i)     the Servicing Rights Agreements, the Non-Agency Servicing Agreements and
the Servicing Rights related thereto;

(ii)    the Subservicing Rights and the Subservicing Agreements;

(iii)    the Underlying Documents (other than those transferred to Purchaser at
the First Closing);

(iv)    all Servicing Compensation, Late Fees, Ancillary Income (in each case
other than as transferred to Purchaser at the First Closing) and any fees or
other income or compensation payable to the servicing rights owner, solely in
its capacity as such, under the Servicing Rights Agreements, in each case which
is earned or assessed but not paid to the applicable Seller as of the close of
business on the Cut-off Date;

(v)    the Servicer Advance Receivables (other than those transferred to
Purchaser at the First Closing) that are outstanding as of the close of business
on the Second Closing Date;

(vi)    the Deferred Servicing Fees with respect to the Non-Agency Servicing
Agreements and the Subservicing Agreements that are outstanding as of the close
of business on the Cut-off Date;

(vii)    the Master Servicing Rights and the Master Servicing Agreements;

(viii)    all Master Servicing Compensation earned but not paid to the
applicable Seller as of the close of business on the Second Closing Date;

(ix)    all credits, prepaid expenses, deferred charges, security deposits,
prepaid items and duties as of the close of business on the Second Closing Date
to the extent related to a Non-Agency Purchased Asset or a Non-Agency Assumed
Liability, as set forth on Schedule 2.01(b)(ix), which is attached hereto in
draft form;

 

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(x)    all files, books of account, general, financial and personnel records in
respect of the employees of the Master Servicing Business to the extent used in
connection with the Master Servicing Business or the Non-Agency Purchased Assets
(it being understood and agreed that any information contained in such copies
that does not relate to the Master Servicing Business or the Non-Agency
Purchased Assets may, in the Sellers’ sole discretion, be redacted by or on
behalf of the Sellers);

(xi)     all rights of and benefits accruing to the Sellers under the Assumed
Contracts;

(xii)     the Acquired Accounts Receivables set forth on Schedule 1.01(a)(2)
that are outstanding as of the close of business on the Second Closing Date;

(xiii)     the Owned Real Property;

(xiv)     the Real Property Leaseholds and all improvements to the Leased Real
Property;

(xv)     the Personal Property and all rights of and benefits accruing to the
Sellers under the Personal Property Leases;

(xvi)    the IT Platform;

(xvii)    all telephone or facsimile numbers used by the Sellers in connection
with the Master Servicing Business;

(xviii)    the Seller Owned Intellectual Property;

(xix)     all rights of and benefits accruing to the Sellers under the Contracts
for the Seller Licensed Intellectual Property;

(xx)      all causes of action, lawsuits, judgments, claims, refunds, choses in
action, rights of recovery, rights of set-off, rights of recoupment, demands and
any other rights or claims of any nature, whether arising by way of counterclaim
or otherwise, available to or being pursued by the Sellers to the extent related
to the Non-Agency Purchased Assets and/or Non-Agency Assumed Liabilities, except
for those rights and claims set forth on Schedule 2.01(b)(xx);

(xxi)    all guaranties, warranties, indemnities and similar rights in favor of
the Sellers to the extent related to any Non-Agency Servicing Agreements,
Subservicing Agreements, Servicing Rights Agreements, Master Servicing
Agreements or any other Non-Agency Purchased Assets and to the extent that a
Seller has the right to sell, assign, transfer, convey and deliver, or has the
right to cause to be sold, assigned, transferred, conveyed and delivered, such
assets; and

(xxii)    to the extent permitted by Law, all Permits held by the Sellers to the
extent exclusively related to the Master Servicing Business or the Non-Agency
Purchased Assets.

 

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To the extent that any Party discovers, within 120 days following the Second
Closing Date, that there were assets of the Sellers used primarily in the Master
Servicing Business that all the Parties intended to be transferred in connection
with the purchase contemplated in this Agreement, but that were omitted from the
schedules to this Agreement, the Sellers, using commercially reasonable efforts,
shall or shall cause their Affiliates promptly to assign and transfer to
Purchaser all right, title and interest in such assets. The sale of the
Purchased Assets and the other transactions contemplated by this Agreement are
collectively referred to herein as the “Transactions”.

Regardless of the dates on which the First Closing and Second Closing actually
occur, commencing on June 1, 2012, Purchaser shall be entitled to all Servicing
Compensation, Late Fees, Ancillary Income, Deferred Servicing Fees and any fees
or other income or compensation payable to the servicing rights owner, solely in
its capacity as such, under the Servicing Rights Agreements, in each case which
is earned or assessed on or after such date. If the Second Closing does not
occur, the immediately preceding sentence shall apply only to the Agency
Purchased Assets. If the Second Closing occurs, a reasonable estimate of the
foregoing items through the Business Day that is four (4) Business Days prior to
the date of the Second Closing will be included in the Second Closing
Pre-Closing Statement for inclusion in the Second Closing Date Payment to be
made at the Second Closing, which shall be subject to the post-Closing purchase
price adjustment set forth in Section 2.04.

(c)     Notwithstanding anything in Section 2.01(a) and Section 2.01(b) to the
contrary, the Purchased Assets shall exclude the Excluded Assets. “Excluded
Assets” means all assets of the Sellers other than the Purchased Assets,
including, without limitation, the assets set forth below in this
Section 2.01(c):

(i)     any assets of the Sellers used primarily in connection with any business
other than the Master Servicing Business, including any computer systems,
networks, hardware, Software, databases, Internet websites and related
equipment;¶

(ii)     the Excluded Contracts; and

(iii)     all real property that is leased or subleased by any Seller as a
tenant or subtenant and that is used in the Business, other than the Leased Real
Property and all leasehold improvements, furniture, fixtures and equipment
located at any facility of the Sellers other than at the Leased Real Property.

Section 2.02     Assumption and Exclusion of Liabilities.

(a)     Upon the terms and subject to the conditions of this Agreement, at the
First Closing, Purchaser shall assume and shall agree to pay, perform and
discharge all of the following Liabilities of the Sellers (collectively, the
“Agency Assumed Liabilities”):

(i)     all accounts payable and other accrued or incurred expenses (other than
any intracompany accounts payable) as of, and from and after, the close of
business on the First Closing Date, in each case to the extent that they relate
to the Agency Purchased Assets;

 

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(ii)    all Liabilities related to the Agency Servicing Agreements and the
related Servicing Rights and the Underlying Documents with respect to the Agency
Servicing Agreements;

(iii)    all Liabilities arising from or related to the use of the Agency
Purchased Assets, including all Liabilities arising from litigation relating to
the use of the Agency Purchased Assets, from and after the First Closing Date;
provided, however, that the assumption of such Liabilities by Purchaser shall
not affect Sellers’ indemnification obligations pursuant to, or the rights of
any Purchaser Indemnified Party under, Section 10.02(a);

(iv)    all Liabilities to reimburse, restore or repay any Custodial Account
Funded Advances to the related Custodial Accounts, solely with respect to
Custodial Accounts maintained by a Seller pursuant to an Agency Servicing
Agreement;

(v)    all Liabilities with respect to (A) the lawsuits, judgments, claims or
demands listed on the Sellers’ First Closing Litigation Report, dated as of the
date of hereof (the “First Closing Litigation Report”), a copy of which has
heretofore been delivered to Purchaser, and (B) any additional lawsuits,
judgments, claims or demands involving foreclosures, bankruptcies, fraud and
misrepresentation, contract and mortgage disputes, liens, title disputes,
regulatory agency/fair lending, property condition, forfeiture, partition,
easement, condemnation and eminent domain, probate, contested foreclosures, tax
sale, mechanic’s liens, elder abuse and stop notice claims with respect to any
of the Agency Purchased Assets, but only to the extent any such additional
lawsuit, judgment, claim or demand is comparable in nature, scope and substance
to those listed on the First Closing Litigation Report, as determined by the
mutual agreement of Purchaser and the Sellers; provided, however, that the
assumption of such liabilities by Purchaser shall not affect Sellers’
indemnification obligations pursuant to, or the rights of any Purchaser
Indemnified Party under, Section 10.02(c) or Section 10.02(d); and

(vi)    all Liabilities set forth on Schedule 2.02(a)(vi).

For the avoidance of doubt, except for any Liability under Section 2.02(a)(v),
Purchaser shall not assume at the First Closing, or have any obligation to pay,
perform or discharge, any Retained Liability.¶

(b)    Upon the terms and subject to the conditions of this Agreement, at the
Second Closing, Purchaser shall assume and shall agree to pay, perform and
discharge all of the following Liabilities of the Sellers (collectively, the
“Non-Agency Assumed Liabilities”):

(i)     all accounts payable and other accrued or incurred expenses (other than
any intracompany accounts payable) as of, and from and after, the close of
business on the Second Closing Date, in each case to the extent that they relate
to the Non-Agency Purchased Assets;

(ii)     all Liabilities related to the Servicing Rights Agreements and the
related Servicing Rights, the Non-Agency Servicing Agreements and the related
Servicing Rights, the remaining Underlying Documents, the Subservicing Rights,
the Subservicing Agreements, the Master Servicing Rights and the Master
Servicing Agreements;

 

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(iii)    all Liabilities arising under (A) the Assumed Contracts, (B) the Real
Property Leases and (C) the Personal Property Leases and the Contracts for the
Seller Licensed Intellectual Property; in each case except for any Liabilities
arising from or in connection with any breaches thereof by the Sellers prior to
the Second Closing;

(iv)    all Liabilities arising from or related to the conduct of the Business
or the use of the Non-Agency Purchased Assets, including all Liabilities arising
from litigation relating to the conduct of the Business or the use of the
Non-Agency Purchased Assets, from and after the Second Closing Date; provided,
however, that the assumption of such Liabilities by Purchaser shall not affect
Sellers’ indemnification obligations pursuant to, or the rights of any Purchaser
Indemnified Party under, Section 10.02(a);

(v)    all Liabilities to reimburse, restore or repay any Custodial Account
Funded Advances to the related Custodial Accounts (other than the Liabilities
transferred to Purchaser at the First Closing);

(vi)    all Liabilities to reimburse, restore or repay any Master Servicing
Custodial Account Funded Advances to the related Master Servicing Custodial
Accounts;

(vii)    all Liabilities with respect to (A) the lawsuits, judgments, claims or
demands listed on the Sellers’ Second Closing Litigation Report, dated as of the
date hereof (the “Second Closing Litigation Report”), a copy of which has
heretofore been delivered to Purchaser, and (B) any additional lawsuits,
judgments, claims or demands involving foreclosures, bankruptcies, fraud and
misrepresentation, contract and mortgage disputes, liens, title disputes,
regulatory agency/fair lending, property condition, forfeiture, partition,
easement, condemnation and eminent domain, probate, contested foreclosures, tax
sale, mechanic’s liens, elder abuse and stop notice claims with respect to any
of the Non-Agency Purchased Assets, but only to the extent any such additional
lawsuit, judgment, claim or demand is comparable in nature, scope and substance
to those listed on the Second Closing Litigation Report, as determined by the
mutual agreement of Purchaser and the Sellers; provided, however, that the
assumption of such liabilities by Purchaser shall not affect Sellers’
indemnification obligations pursuant to, or the rights of any Purchaser
Indemnified Party under, Section 10.02(c) or Section 10.02(d); and

(viii)    all Liabilities set forth on Schedule 2.02(b)(viii), which is attached
hereto in draft form.

For the avoidance of doubt, except for any Liability under Section 2.02(b)(vii),
Purchaser shall not assume at the Second Closing, or have any obligation to pay,
perform or discharge, any Retained Liability.¶

(c)    Notwithstanding Section 2.02(a) and Section 2.02(b), the Sellers shall
retain, and shall be responsible for paying, performing and discharging when
due, and the Purchaser shall not assume or be liable for, Liabilities of the
Sellers other than the Assumed Liabilities (collectively, the “Excluded
Liabilities”), including the following:

 

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(i)    all Liabilities related to any business conducted, operated or engaged in
by either Seller, other than the Business;

(ii)    any Liabilities of the Sellers arising under this Agreement or any of
the Ancillary Agreements;

(iii)    except as specifically provided in Section 7.08, any Liabilities of
either Seller arising under, in connection with or otherwise related to (A) any
Employee Benefit Plan or other employee benefit or compensation plan, policy,
program, agreement or arrangement, including any employment, retention, change
in control, severance or similar agreement, (B) salaries, wages, bonuses,
vacation or severance pay or other compensation, payments or benefits earned,
accrued or arising prior to or in connection with the Second Closing Date or in
connection with the Second Closing, (C) Title IV of ERISA, (D) any Continuing
Employee with respect to any period or event occurring prior to the date on
which he or she becomes an employee of Purchaser or one of its Affiliates,
(E) any other former or current, active or inactive, employee, officer, agent,
consultant, independent contractor or subcontractor of either Seller with
respect to any period, or (F) any employment-related grievance or any claim with
respect to any personal injuries sustained in connection with the employment or
retention of a Person by any Seller, including workers’ compensation or
disability, regardless of when such claim is made or asserted, or (G) any Action
arising under the WARN Act for any “employment loss” within the meaning of the
WARN Act, by an employee of a Seller that occurs on or prior to the Second
Closing Date, other than with respect to any Master Servicing Employee who is
employed by the Sellers immediately prior to the Second Closing Date and is
either (i) not offered employment by Purchaser or an Affiliate thereof pursuant
to Section 7.08(b) or (ii) does not commence employment with Purchaser or an
Affiliate thereof despite such Master Servicing Employee accepting an offer of
employment made pursuant to Section 7.08(b);

(iv)    any legal and accounting fees and expenses incurred by the Sellers in
connection with the consummation of the Transactions, except as provided in this
Agreement or the Ancillary Agreements;

(v)    any Tax Liabilities of the Sellers with respect to the Business for any
Pre-Closing Tax Period;

(vi)    any Indebtedness of the Sellers;

(vii)    all Liabilities arising out of or with respect to the Excluded Assets;
and

(viii)    all Liabilities of the Sellers with respect to any Actions of any
nature existing on or prior to the Applicable Closing Date that are not listed
on the First Closing Litigation Report or the Second Closing Litigation Report,
as applicable, or otherwise described in Section 2.02(a)(v) or
Section 2.02(b)(vii).

 

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Purchaser assumes no Excluded Liability or any other Liability of the Sellers or
any other Person pursuant to this Agreement other than the Assumed Liabilities.
In furtherance of the foregoing and for the avoidance of doubt, the Parties
hereby acknowledge and agree that Purchaser assumes no Liability of the Sellers
or any Affiliate thereof, including without limitation LBB or LBHI, by virtue of
completing the transactions contemplated by this Agreement or otherwise, with
respect to (i) the origination of any loans sold by or otherwise transferred by
the Sellers directly or indirectly to any Investor or any other Person or
(ii) such sale or transfer of such loans, including without limitation any
Liability for any representations or warranties made with respect to such loans
to any such Investor or Third Party.

Section 2.03     Payment of Purchase Price; Allocations; Adjustments.

(a)     Aggregate Purchase Price. Upon the terms and subject to the conditions
of this Agreement, as aggregate consideration for the Purchased Assets,
Purchaser will assume the Assumed Liabilities and will pay an amount equal to
the aggregate purchase price, which shall be calculated in accordance with
Schedule 2.03(a)(1) with respect to the Agency Purchased Assets (the “Agency
Purchase Price”) and in accordance with Schedule 2.03(a)(2) with respect to the
Non-Agency Purchased Assets (the “Non-Agency Purchase Price” and together with
the Agency Purchase Price, the “Aggregate Purchase Price”).

(b)     First Closing Date Payment. Not later than the second Business Day prior
to the First Closing Date, the Sellers shall deliver to Purchaser the following:

(i)     a statement in the format presented on Schedule 2.03(a)(1) (the “First
Closing Pre-Closing Statement”) setting forth the Sellers’ good faith estimate
of the Agency Purchase Price calculated as of the Cut-off Date rather than the
First Closing Date (the “First Closing Date Payment”) and, with respect to
principal balance, Book Value and other amounts to be determined by reference to
the Accounting Records, on a basis consistent with the Interim Balance Sheet;
provided, that the Sellers and Purchaser shall work together in good faith
during such two (2) Business Day-period to resolve any differences between them
with respect to such First Closing Pre-Closing Statement; provided, further,
that, after the expiration of such two (2) Business Day-period, upon the terms
and subject to the conditions of this Agreement, the First Closing shall occur
even if the First Closing Pre-Closing Statement is not reasonably acceptable to
Purchaser;

(ii)     the First Closing Cut-off Date Servicing Rights Data Tape;

(iii)     the First Closing Cut-off Date Servicer Advance Data Tape;

(iv)     Schedule 2.01(a)(vii) (First Closing Credits and Prepaid Items) updated
as of the Cut-off Date;

(v)     Schedule 1.01(a)(1) (Agency Acquired Accounts Receivables) updated as of
the Cut-off Date; and

(vi)     a schedule setting forth the Deferred Servicing Fees with respect to
the Agency Servicing Agreements on a loan-level basis as of the Cut-off Date.

 

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Regardless of the date on which the First Closing actually occurs, the purchase
price for the Servicing Rights included in the Agency Purchased Assets shall be
calculated based on the unpaid principal balance of the applicable Serviced
Mortgage Loans as of the close of business on May 31, 2012. Purchaser shall pay
the First Closing Date Payment in cash to the Sellers at the First Closing, by
wire transfer of immediately available funds to the Purchase Price Bank Account.

(c)     Second Closing Date Payment. Not later than the third Business Day prior
to the Second Closing Date, the Sellers shall deliver to Purchaser the
following:

(i)     a statement in the format presented on Schedule 2.03(a)(2) (the “Second
Closing Pre-Closing Statement”) setting forth the Sellers’ good faith estimate
of the Non-Agency Purchase Price calculated as of the Cut-off Date rather than
the Second Closing Date (the “Second Closing Date Payment”) and, with respect to
principal balance, Book Value and other amounts to be determined by reference to
the Accounting Records, on a basis consistent with the Interim Balance Sheet;
provided, that the Sellers and Purchaser shall work together in good faith
during such three (3) Business Day-period to resolve any differences between
them with respect to such Second Closing Pre-Closing Statement; provided,
further, that, after the expiration of such three (3) Business Day-period, upon
the terms and subject to the conditions of this Agreement, the Second Closing
shall occur even if the Second Closing Pre-Closing Statement is not reasonably
acceptable to Purchaser.

(ii)     the Second Closing Cut-off Date Servicing Rights Data Tape;

(iii)     the Second Closing Cut-off Date Servicer Advance Data Tape;

(iv)     the Cut-off Date Master Servicing Data Tape;

(v)     Schedule 2.01(b)(ix) (Second Closing Credits and Prepaid Items) updated
as of the Cut-off Date;

(vi)     Schedule 1.01(a)(2) (Non-Agency Acquired Accounts Receivables) updated
as of the Cut-off Date;

(vii)     a schedule setting forth the Deferred Servicing Fees with respect to
the Non-Agency Servicing Agreements and the Subservicing Agreements on a
loan-level basis as of the Cut-off Date;

(viii)     a schedule setting forth a good faith estimate of the Servicing
Compensation, Late Fees, Ancillary Income and any fees or other income or
compensation payable to the servicing rights owner, solely in its capacity as
such, under the Servicing Rights Agreements, in each case which has been earned
or assessed for the period beginning on June 1, 2012 and ending on the fourth
(4th) Business Day prior to the Second Closing; and

(ix)     a final copy of Schedule 2.20(b)(viii) updated as of the Cut-off Date.

 

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Regardless of the date on which the Second Closing actually occurs, the purchase
price for the Servicing Rights included in the Non-Agency Purchased Assets shall
be calculated based on the unpaid principal balance of the applicable Serviced
Mortgage Loans as of the close of business on May 31, 2012. Purchaser shall pay
the Second Closing Date Payment in cash to the Sellers at the Second Closing, by
wire transfer of immediately available funds to the Purchase Price Bank Account.

(d)     Allocation of Aggregate Purchase Price.

(i)     The Sellers and Purchaser hereby agree to allocate the Aggregate
Purchase Price and the Assumed Liabilities among the Purchased Assets in
accordance with Section 1060 of the Code and file or cause to be filed in a
timely fashion any information that may be required pursuant to regulations
promulgated under the Code.

(ii)     Within ninety (90) days after the Second Closing Date or, if the Second
Closing does not occur, within ninety (90) days after the First Closing Date,
the Sellers shall prepare and deliver to Purchaser a schedule (an “Allocation
Schedule”) allocating the sum of the Aggregate Purchase Price (as may be
adjusted under Section 2.04) and the Assumed Liabilities among the Purchased
Assets, in such amounts reasonably determined by the Sellers to be consistent
with Section 1060 of the Code and the regulations thereunder.

(iii)     Purchaser shall have a period of forty-five (45) days after the
delivery of the Allocation Schedule (the “Response Period”) to present in
writing to the Sellers notice of any objections Purchaser may have to the
allocations set forth therein (an “Allocation Objections Notice”). Unless
Purchaser timely objects, such Allocation Schedule shall be binding on the
Parties without further adjustment, absent manifest error.

(iv)     If Purchaser shall raise any objections within the Response Period, the
Sellers and Purchaser shall negotiate in good faith and use their reasonable
best efforts to resolve such dispute. If the Parties fail to agree within
fifteen (15) days after the delivery of the Allocation Objections Notice, then
the disputed items shall be resolved in accordance with the mechanics applicable
under Section 2.04.

(v)     For all Tax purposes, Purchaser and the Sellers agree to report the
Transactions in a manner consistent with the terms of this Agreement, and that
none of them will take any position inconsistent therewith in any Tax Return.

(e)     No Set Off. Neither the Sellers nor any of their Affiliates, on the one
hand, nor Purchaser or any of its Affiliates, on the other hand, shall have any
set off or any other similar rights with respect to any of the funds received by
such Party pursuant to Section 2.03 or Section 2.04 of this Agreement.

(f)     Tax Withholding. Purchaser shall be entitled to deduct and withhold from
the consideration otherwise payable to the Sellers pursuant to this Agreement
such amounts as may be required to be deducted and withheld with respect to the
making of such payment under applicable Tax Law. To the extent that amounts are
so withheld, such withheld amounts shall be treated as having been paid to the
Sellers for all purposes of this Agreement.

 

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(g)     Prorations. Except to the extent otherwise specifically provided for
herein and except to the extent the Book Value of such Liabilities are not
deducted from the Aggregate Purchase Price in accordance with Section 2.03(a),
Schedule 2.03(a)(1) and Schedule 2.03(a)(2), (i) all payments under or pursuant
to any Assumed Contract (including document custodial arrangements and
applicable insurance policies) or Contract for the Seller Licensed Intellectual
Property, (ii) all items of income and expense with respect to the Owned Real
Property and the Leased Real Property, and (iii) all real and personal property
Taxes related to the Purchased Assets, whether or not payable after the Second
Closing Date, shall be prorated between the Sellers and Purchaser on the basis
of a 365 day year, or for contracts payable on a monthly basis on the basis of a
30 day month, and the number of days elapsed and days remaining in the
applicable period through the end of the Second Closing Date. With respect to
the real and personal property Taxes, such proration shall be based on the most
recent assessments of the real property and the personal property located
thereon for the Taxing period(s) prior to the Second Closing Date and the then
applicable Tax rates. With respect to any products sold (or services rendered)
pursuant to any Assumed Contract or Contract for the Seller Licensed
Intellectual Property, the Sellers and Purchaser shall use commercially
reasonable efforts to arrange for vendors to bill the Sellers directly, through
and including the Second Closing Date, and Purchaser directly after the Second
Closing Date. To the extent that vendors bill the Sellers after the Second
Closing Date for any such products or services provided after the Second Closing
Date, the Sellers shall forward such bills to Purchaser, and Purchaser shall pay
such bills when due. To the extent that vendors bill Purchaser after the Second
Closing Date for any such products or services provided before the Second
Closing Date, Purchaser shall forward such bills to the Sellers, and the Sellers
shall pay such bills when due to the extent such bills are not otherwise
included in the calculation of the Aggregate Purchase Price or otherwise
included in the True-up Payment. A final determination of all amounts prorated
pursuant to this Section 2.03(g) shall occur at the time Purchaser prepares and
delivers to the Sellers the Post-Closing Statement in accordance with
Section 2.04, and any payment required by the Sellers or Purchaser pursuant to
such determination (“True-up Payment”) shall be reflected in the Purchase Price
Adjustment.

(h)     Payment With Respect to Returned Payments. At the time Purchaser
prepares and delivers to the Sellers the Post-Closing Statement in accordance
with Section 2.04, Purchaser shall deliver to the Sellers a schedule listing all
Returned Payments for review by the Sellers. Not later than the fifteenth
(15th) day after receipt of such schedule, the Sellers may submit to Purchaser
their written objection to any item reflected therein by notice to Purchaser.
Purchaser shall make available to the Sellers such books, records and other
information as the Sellers may reasonably request to review such schedule. If
the Sellers timely object to any item reflected in such schedule, the Sellers
and Purchaser shall negotiate in good faith toward resolving such objection as
promptly as practicable (and in any event not later than thirty (30) days
following the Sellers’ timely objection). Promptly (and in any event not later
than three (3) Business Days) following the aggregate amount of Returned
Payments being finally determined, Purchaser shall pay the Sellers the amount of
such Returned Payments.

 

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Section 2.04     Post-Closing Purchase Price Calculation.

(a)     As promptly as practicable, but in any event not later than ninety
(90) days after the Second Closing Date or, if the Second Closing does not
occur, within ninety (90) days after the First Closing Date, Purchaser shall
cause to be prepared and delivered to the Sellers the following:

(i)     a statement in the format presented on Schedule 2.03(a)(1) and Schedule
2.03(2) (the “Post-Closing Statement”) setting forth the Agency Purchase Price
and the Non-Agency Purchase Price as of the Applicable Closing Date and prepared
on a basis consistent with the Interim Balance Sheet;

(ii)     updated data tapes, as of the Cut-off Date, containing the information
of the same categories and same format as in the First Closing Cut-off Date
Servicing Rights Data Tape and the Second Closing Cut-off Date Servicing Rights
Data Tape;

(iii)     updated data tapes, as of the Applicable Closing Date, containing the
information of the same categories and same format as in the First Closing
Cut-off Date Servicer Advance Data Tape and the Second Closing Cut-off Date
Servicer Advance Data Tape;

(iv)     an updated data tape, as of the Second Closing Date, containing the
information of the same categories and same format as in the Cut-off Date Master
Servicing Data Tape;

(v)     Schedule 2.01(a)(vii) (First Closing Credits and Prepaid Items) updated
as of the First Closing Date;

(vi)     Schedule 2.01(b)(ix) (Second Closing Credits and Prepaid Items) updated
as of the Second Closing Date;

(vii)     Schedule 1.01(a)(1) (Agency Acquired Accounts Receivables) updated as
of the First Closing Date;

(viii)     Schedule 1.01(a)(2) (Non-Agency Acquired Accounts Receivables)
updated as of the Second Closing Date;

(ix)     a schedule setting forth the Deferred Servicing Fees with respect to
the Agency Servicing Agreements on a loan-level basis updated as of the Cut-off
Date;

(x)     a schedule setting forth the Deferred Servicing Fees with respect to the
Non-Agency Servicing Agreements and the Subservicing Agreements on a loan-level
basis updated as of the Cut-off Date;

(xi)     Schedule 2.02(a)(vi) (Agency Assumed Liabilities) updated as of the
First Closing Date; and

 

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(xii)     Schedule 2.02(b)(viii) (Non-Agency Assumed Liabilities) updated as of
the Second Closing Date.

In the event that the Sellers agree with the Post-Closing Statement prepared by
Purchaser, the Sellers shall promptly notify Purchaser in writing, and following
such notice the Post-Closing Statement shall be final, conclusive and binding on
the Parties and not subject to further review.

(b)     If the Sellers in good faith disagree with all or any portion of the
Post-Closing Statement, then the Sellers shall notify Purchaser in writing (the
“Notice of Disagreement”) of such disagreement within forty-five (45) days after
delivery of the Post-Closing Statement. Each Notice of Disagreement shall set
forth in reasonable detail each disputed item or amount and the basis for the
disagreement, together with supporting calculations. Any amount, determination
or calculation contained in the Post-Closing Statement and not specifically
disputed in a timely delivered Notice of Disagreement shall be final, conclusive
and binding on the Parties and not subject to further review. If a Notice of
Disagreement is timely delivered within such forty-five (45) day period,
Purchaser and the Sellers shall negotiate in good faith to resolve each dispute
raised therein (each, an “Objection”). Any such resolution shall be evidenced in
a writing and executed by an authorized representative of Purchaser and each
Seller. If Purchaser and the Sellers are unable to resolve any Objections within
ten (10) days after delivery of such Notice of Disagreement, then Purchaser and
the Sellers shall jointly engage KPMG (the “Independent Accountant”) to resolve
such Objections (acting as an expert and not an arbitrator) in accordance with
this Agreement (including Schedule 2.03(a)(1) and Schedule 2.03(a)(2)) as soon
as practicable thereafter, but in any event within thirty (30) days after
engagement of the Independent Accountant. If KPMG is unwilling or unable to
serve in such capacity, then Purchaser and the Sellers shall select, within ten
(10) days after notification that KPMG is unwilling or unable to serve in such
capacity, a mutually acceptable, nationally recognized independent accounting
firm to serve as the Independent Accountant. The Sellers and Purchaser shall
cause the Independent Accountant to deliver a written report containing its
calculation of the disputed Objections (which calculation shall be within the
range of dispute between the Post-Closing Statement and the Notice of
Disagreement) within thirty (30) days after engagement of the Independent
Accountant. The scope of such firm’s engagement (which shall not be an audit)
shall be limited to the resolution of the items contained in the Notice of
Disagreement, and the recalculation, if any, of the Post-Closing Statement in
light of such resolution. For the avoidance of doubt, the Independent Accountant
shall not make any determination with respect to any matter other than those
matters specifically set forth in the Notice of Disagreement that remain in
dispute at the time of such determination. All Objections that are resolved
between the Parties or are determined by the Independent Accountant shall be
final, binding and conclusive upon the Parties and shall not be subject to
further review absent manifest error. The fees, costs and expenses of Purchaser
in connection with the preparation of the Post-Closing Statement shall be borne
by Purchaser, and the fees, costs and expenses of the Sellers in connection with
the preparation of the Notice of Disagreement shall be borne by the Sellers. The
fees, costs and expenses of Purchaser in connection with the preparation of the
Post-Closing Statement shall be borne by Purchaser, and the fees, costs and
expenses of the Sellers in connection with the preparation of the Notice of
Disagreement shall be borne by the Sellers. The fees, costs and expenses of the
Independent Accountant, if any, selected in accordance with this Section 2.04(b)
will be paid by the Sellers, on the one hand, and Purchaser, on the other hand,
based on the percentage which the portion of the contested amount not awarded to
each Party bears to the

 

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amount actually contested by or on behalf of such Party. Within fifteen
(15) days of the first to occur of either (i) final resolution of the
Post-Closing Statement as described above, and (ii) delivery of a notice of
determination by the Independent Accountant as described above, any adjustment
shall be paid as provided in Section 2.04(d). Any portion of the Purchase Price
Adjustment not in dispute shall be paid when due.

(c)     Purchaser shall make its financial records relating to the calculation
of the Aggregate Purchase Price, accounting personnel and advisors available to
the Sellers, their accountants and other representatives and the Independent
Accountant at reasonable times during normal business hours during the review by
the Sellers and the Independent Accountant of, and the resolution of any
Objections with respect to, the Post-Closing Statement. Without limiting the
generality of the foregoing, the Sellers and their representatives will be
permitted to review Purchaser’s work papers and the work papers of Purchaser’s
independent accountants relating to the preparation of the Post-Closing
Statement, as well as all the books, records and other relevant information
relating to the Purchased Assets, and Purchaser will make available at
reasonable times during normal business hours the individuals then in its employ
primarily responsible for and knowledgeable about the information used in, and
the preparation of, the Post-Closing Statement in order to respond to the
reasonable inquiries of the Sellers; provided, however, that the independent
accountants of Purchaser will not be obligated to make any work papers available
to the Sellers unless and until such Persons have signed a customary agreement
relating to such access to work papers in form and substance reasonably
acceptable to such independent accountants.

(d)     Subject to Section 2.04(b), within fifteen (15) days after delivery to
the Sellers of the Post-Closing Statement pursuant to Section 2.04(a), (i) the
Sellers shall pay to Purchaser (w) the amount, if any, by which the First
Closing Date Payment exceeds the Agency Purchase Price and/or the Second Closing
Date Payment exceeds the Non-Agency Purchase Price each as reflected in the
Post-Closing Statement, plus (x) interest on the applicable amount computed
pursuant to clause (i)(w) above at the Base Rate for the period from the
Applicable Closing Date to the date of payment in full of such amount, plus
(y) the amount, if any, of any True-up Payment owed by the Sellers to Purchaser,
minus (z) the amount, if any, of any True-up Payment owed by Purchaser to the
Sellers; or (ii) Purchaser shall pay to the Sellers (w) the amount, if any, by
which Agency Purchase Price exceeds the First Closing Date Payment and/or the
Non-Agency Purchase Price exceeds the Second Closing Date Payment, each as
reflected in the Post-Closing Statement, plus (x) interest on the amount
computed pursuant to clause (ii)(w) above at the Base Rate for the period from
the Applicable Closing Date to the date of payment in full of such amount, plus
(y) the amount, if any, of any True-up Payment owed by Purchaser to the Sellers,
minus (z) the amount, if any, of any True-up Payment owed by the Sellers to
Purchaser (in each case, the “Purchase Price Adjustment”). Payments by the
Sellers or Purchaser, as the case may be, pursuant to the preceding sentence
will be made by wire transfer of immediately available funds. The Aggregate
Purchase Price shall be equal to the sum of the First Closing Date Payment, the
Second Closing Date Payment and the Purchase Price Adjustment.

(e)     For the avoidance of doubt, in the event that the Second Closing does
not occur, this Section 2.04, including the Post-Closing Statement, any Notice
of Disagreement and any Objection thereto, and any True-up Payment owed by one
party to the other, shall only apply with respect to the First Closing and the
Agency Purchase Price.

 

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ARTICLE III.

DISCLOSURE SCHEDULES

Section 3.01     Disclosure Schedules.

(a)     On or prior to the date of the Original Asset Purchase Agreement, the
Sellers have delivered to Purchaser, and Purchaser has delivered to the Sellers,
schedules (in the case of the Sellers, the “Seller Disclosure Schedules”, and in
the case of Purchaser, the “Purchaser Disclosure Schedules”) setting forth,
among other things, facts, circumstances and events the disclosure of which are
required or appropriate in relation to any or all of such Party’s covenants,
representations and warranties (and making specific reference to the section of
this Agreement to which such section of the Seller Disclosure Schedules or
Purchaser Disclosure Schedules, as applicable, relates).

(b)     Any matter set forth in any Section of the Seller Disclosure Schedules
or Purchaser Disclosure Schedules shall be deemed set forth in all other
Sections of the Seller Disclosure Schedules or Purchaser Disclosure Schedules,
as the case may be, so long as the relevance of such matter to such other
Section of the Seller Disclosure Schedules or Purchaser Disclosure Schedules, as
applicable, is readily apparent on its face without further inquiry. The
inclusion of any information (including dollar amounts) in any Section of the
Seller Disclosure Schedules or Purchaser Disclosure Schedules shall not be
deemed to be an admission or acknowledgment by any Party that such information
is required to be listed in such Section of the Seller Disclosure Schedules or
Purchaser Disclosure Schedules or is material to or outside the ordinary course
of the business of the Sellers or Purchaser, as the case may be. Matters
reflected in the Seller Disclosure Schedules or Purchaser Disclosure Schedules
are not necessarily limited to matters required by this Agreement to be
reflected in the Seller Disclosure Schedules or Purchaser Disclosure Schedules;
such additional matters are set forth for informational purposes only and do not
necessarily include other matters of a similar nature. In addition, the Sellers
may include in the Seller Disclosure Schedules disclosure with respect to items
that would not have a Material Adverse Effect within the meaning of such term,
and any such inclusion shall not be deemed to be an acknowledgement by the
Sellers that such items, or any of them, represent material exceptions, are
reasonably likely to result in a Material Adverse Effect or further change,
amend or define the meaning of the term “Material Adverse Effect” for purposes
of this Agreement. The information contained in this Agreement, the Schedules
and Exhibits hereto, the Seller Disclosure Schedules and the Purchaser
Disclosure Schedules is disclosed solely for purposes of this Agreement, and no
information contained herein or therein shall be deemed to be an admission by
any Party to any third party of any matter whatsoever (including any violation
of Law or breach of contract).

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF SELLERS

The Sellers jointly and severally represent and warrant to Purchaser that the
statements contained in this Article IV are true and correct as of the date of
the Original Asset Purchase Agreement (or, if made as of a different specified
date, as of such date) and will be true and correct as of the Applicable Closing
Date (as though made then and as though the Applicable Closing Date were
substituted for the date of this Agreement throughout this Article IV), except
as otherwise set forth in the Seller Disclosure Schedules.

 

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Section 4.01     Organization.

(a)     The Bank is a federal savings bank duly organized and validly existing
under the laws of the United States of America, and ALS is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware. Each Seller has all requisite corporate power and
authority to own the Purchased Assets and carry on the Business as now
conducted. Each Seller is duly licensed or qualified to do business in each
jurisdiction where its ownership or leasing of the Purchased Assets or the
conduct of the Business requires such licensure or qualification, except (i) as
set forth in the Sellers’ Licensing Report, dated as of the date of the Original
Asset Purchase Agreement (the “Licensing Report”), a copy of which has
heretofore been delivered to Purchaser, or (ii) where the failure to obtain such
license or qualification individually or in the aggregate would not reasonably
be expected to have a Material Adverse Effect.

(b)     Prior to the date of the Original Asset Purchase Agreement, the Sellers
have made available to Purchaser true and correct copies of the federal stock
charter and bylaws of the Bank and the certificate of formation and limited
liability company operating agreement of ALS.

Section 4.02     Authority; No Violation.

(a)     Each Seller has full corporate power and authority to execute and
deliver this Agreement and the Ancillary Agreements and, subject to the receipt
of the Seller Required Governmental Approvals, to consummate the Transactions.
The execution and delivery of this Agreement and the Ancillary Agreements by the
Sellers and the consummation by the Sellers of the Transactions have been duly
and validly authorized by all necessary corporate action of the Sellers. This
Agreement has been duly and validly executed and delivered by the Sellers and,
assuming the due authorization, execution and delivery by the Purchaser,
constitutes the valid and binding obligation of the Sellers, enforceable against
the Sellers in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar Laws affecting creditors’ rights generally, and subject,
as to enforceability, to general principles of equity, whether applied in a
court of law or a court of equity. Each Ancillary Agreement, upon execution and
delivery by the Sellers, and assuming the due authorization, execution and
delivery by Purchaser, will constitute the valid and binding obligation of the
Sellers, enforceable against the Sellers in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar Laws affecting creditors’
rights generally, and subject, as to enforceability, to general principles of
equity, whether applied in a court of law or a court of equity.

(b)     Subject to receipt of the Seller Required Governmental Approvals and the
Third Party Consents, and expiration of related waiting periods, neither the
execution and delivery of this Agreement and any Ancillary Agreement nor the
consummation of the Transactions and compliance by the Sellers with any of the
terms or provisions hereof or thereof will: (i) conflict with or result in a
breach or violation of or a default under any provision of the federal stock
charter or bylaws of the Bank or the certificate of formation or limited
liability company agreement of ALS; (ii) violate any Law or Order applicable to
the Business, Sellers or any of

 

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their respective properties or assets, including the Purchased Assets, or enable
any Person to enjoin the Transactions; or (iii) violate, conflict with, result
in a breach of any provisions of, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of, accelerate the performance required by, or result in a right
of termination or acceleration or the creation of any Lien upon any of the
properties or assets of the Sellers, including the Purchased Assets, under any
of the terms, conditions or provisions of any Contract included in the Purchased
Assets, or any other material Contract to which either Seller is a party, or by
which the Sellers or any of their respective properties or assets, including the
Purchased Assets, may be bound or affected.

Section 4.03     Consents.

Except for the Seller Required Governmental Approvals, the Third Party Consents
and the Servicing Agreement Consents, and compliance with any conditions
contained therein, no consents, waivers or approvals of, or filings (other than
the filing with the appropriate land records office of the special warranty deed
conveying the Owned Real Property in accordance herewith) or registrations with,
any Governmental Entity are necessary, and no consents, waivers or approvals of,
or filings or registrations by the Sellers with, any other third parties are
necessary, in connection with the execution and delivery of this Agreement by
the Sellers, and the completion by the Sellers of the Transactions or the
compliance by the Sellers with any of the terms or provisions of this Agreement
or any Ancillary Agreement.

Section 4.04     Title to Purchased Assets.

(a)     Except as set forth in Section 4.04(a) of the Seller Disclosure
Schedules, a Seller has good and, subject to receipt of the Third Party Consents
and Servicing Agreement Consents in connection therewith, marketable title to
the Purchased Assets (or, as to any leased property, a valid leasehold interest)
free and clear of any Liens other than Permitted Liens. Other than Persons
having an interest in Liens that have been disclosed in Section 4.04(a) of the
Seller Disclosure Schedules, no Person other than the Sellers has any interest
in any of the Purchased Assets and, upon delivery to Purchaser on the Applicable
Closing Date of the instruments of transfer contemplated by Section 9.02, the
Sellers will thereby transfer to Purchaser title to the Purchased Assets being
transferred on such Applicable Closing Date free and clear of any Liens other
than Permitted Liens; provided, that this representation and warranty shall not
apply to (i) the Seller Owned Intellectual Property and the Seller Licensed
Intellectual Property, which are the subject of Section 4.09 and (ii) the Real
Property Leaseholds, the Real Property Leases and Seller’s leasehold interest in
the Personal Property Leases, which are the subject of Section 4.17.

(b)     The Purchased Assets, together with any assets and services provided to
Purchaser pursuant to the Interim Servicing Agreement, are sufficient for the
continued conduct of the Master Servicing Business after the Second Closing Date
in substantially the same manner as it is currently conducted or currently
contemplated to be conducted.

Section 4.05     Financial Statements.

(a)     The Sellers have heretofore delivered to Purchaser true, correct and
complete copies of (i) the audited consolidated statements of financial
condition of the Bank and its

 

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subsidiaries as of December 31, 2009 and December 31, 2010 (including the notes
thereto, if any), and the related audited consolidated statements of operations,
changes in stockholder’s equity and cash flows for the fiscal years then ended,
together with the report thereon of Ernst & Young LLP and Grant Thornton LLP,
respectively (the “Audited Financial Statements”); and (ii) a consolidated
unaudited balance sheet of the Bank and its subsidiaries as of December 31, 2011
(the “Interim Balance Sheet”) and the related consolidated unaudited statements
of financial condition, operations and changes in stockholder’s equity for the
fiscal year then ended (the “Unaudited Financial Statements” and together with
the Audited Financial Statements, the “Financial Statements”). The Financial
Statements (including the notes thereto, if any) have been prepared from the
books and records of the Sellers in accordance with GAAP and fairly present in
all material respects the consolidated financial condition, results of
operations and changes in stockholder’s equity of the Bank and its subsidiaries
as at the date thereof and for the period therein referred to, in accordance
with GAAP as in effect on such date, subject in the case of unaudited interim
financial statements to changes resulting from normal year-end adjustments, none
of which, individually or in the aggregate, would be expected to be material,
and the absence of footnotes.

(b)     The Sellers do not have any liability of any kind arising out of or
related to facts, events, transactions, occurrences or actions or inactions
arising prior to the Applicable Closing Date that would have been required to be
reflected on, reserved against or otherwise described in the Interim Balance
Sheet in accordance with GAAP as in effect on the date of such Interim Balance
Sheet and were not so reflected, reserved against or described thereon, other
than: (i) liabilities and obligations which have arisen since the date of the
Interim Balance Sheet in the ordinary course of business; (ii) liabilities that,
individually or in the aggregate, would not reasonably be likely to have a
Material Adverse Effect; (iii) liabilities and obligations contemplated by this
Agreement; and (iv) liabilities and obligations arising out of any Contract to
which a Seller is a party, other than such liabilities and obligations arising
as a result of a breach of such Contract by such Seller.

Section 4.06     Absence of Certain Changes or Events.

Except as disclosed in the Financial Statements, since the date of the Interim
Balance Sheet the Sellers have operated the Business only in the ordinary course
of business and there has not been any condition, event, change or occurrence
that, individually or in the aggregate, has had, or is reasonably likely to
have, a Material Adverse Effect.

Section 4.07     Taxes.

(a)    (i) Each Seller and the Seller Group has filed or caused to be filed, and
with respect to Tax Returns due between the date of this Agreement and the
Applicable Closing Date, will timely file (including any applicable extensions)
all material Tax Returns required to be filed with respect to the Purchased
Assets; (ii) all such Tax Returns are, or in the case of such Tax Returns not
yet filed, will be, true, complete and correct in all material respects; and
(iii) all material Taxes of the Sellers and the Seller Group (whether or not
reflected on any such Tax Returns) relating to the Purchased Assets and
attributable to a Pre-Closing Tax Period have been, or in the case of Taxes the
due date for payment of which is between the date of this Agreement and the
Applicable Closing Date will be, timely paid in full, other than Taxes that have
been reserved or accrued on the Interim Balance Sheet, which the Sellers are
contesting in good faith.

 

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(b)     There are no Liens for Taxes, except for statutory Liens with respect to
Taxes not yet due and payable with respect to any of the Purchased Assets.

(c)     All amounts required to be withheld by each Seller and the Seller Group
(including from employees of the Business for income Taxes and social security
and other payroll Taxes) have been collected or withheld, and either paid to the
respective taxing authorities, or set aside in accounts for such purpose, or
accrued or reserved on the Interim Balance Sheet.¶

(d)     There is no Action pending or proposed or threatened with respect to
Taxes of the Business and the Purchased Assets, and to the Sellers’ Knowledge,
no basis exists therefor.

(e)     Neither Seller nor the Seller Group has waived, or been requested to
waive, any statute of limitations, or agreed to any extension of time with
respect to a Tax assessment or deficiency in respect of Taxes associated with
the Business and the Purchased Assets.

Section 4.08     Material Contracts; Assumed Contracts; Defaults.

(a)     Section 4.08(a) of the Seller Disclosure Schedules sets forth a list of
each of the Material Contracts in effect as of the date of the Original Asset
Purchase Agreement. The term “Material Contracts” means the following types of
Assumed Contracts:

(i)     to the extent related to the Master Servicing Business, any Assumed
Contract where the performance remaining thereunder involves aggregate
consideration to or by any Seller in excess of (x) $500,000 per annum or
(y) $1,000,000 in the aggregate over the remaining term of such agreement; and

(ii)     to the extent related to the Master Servicing Business, any Assumed
Contract that limits, or purports to limit, the ability of the any Seller to
compete in any line of business or with any Person or to operate in any
geographic area or during any period of time or restricts in any material
respect the conduct of the businesses of the Purchaser;

(b)     Subject to obtaining the Third Party Consents and the Servicing
Agreement Consents, the Sellers are not in default in any material respect under
any Material Contract, and there has not occurred any event that, with the lapse
of time or the giving of notice or both, would constitute such a default in any
material respect.

(c)     True and correct copies of the Assumed Contracts have been made
available to Purchaser on or before the date of the Original Asset Purchase
Agreement, and each Material Contract is in full force and effect on the date of
the Original Asset Purchase Agreement and enforceable against the counterparty
to which it relates.

 

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(d)     Neither of the Sellers has received written notice of the intention of
any counterparty to any Material Contract to terminate or materially alter such
Material Contract, and none of the terms of any Material Contract are currently
being renegotiated by either Seller.

Section 4.09     Intellectual Property.

(a)     None of the Seller Owned Intellectual Property has been registered or
filed with the U.S. Patent and Trademark Office or the U.S. Copyright Office.

(b)     Schedules 1.01(m) and 1.01(n) set forth a complete and accurate list and
description (showing in each case any owner, licensor or licensee) of all
Software owned by, licensed to or used by either Seller in the conduct of the
Master Servicing Business, except for such mass market Software that is
commercially available and subject to “shrink-wrap” or “click-through” license
agreements.

(c)     Section 4.09(c) of the Seller Disclosure Schedules sets forth a complete
and accurate list and description of all material Assumed Contracts that relate
to any Seller Intellectual Property used in the conduct of the Master Servicing
Business.

(d)     The Sellers own the entire right, title and interest in and to each item
of Seller Owned Intellectual Property that is material to the Master Servicing
Business as presently conducted, free and clear of all Liens. The Sellers have a
valid right to use the Seller Licensed Intellectual Property in the conduct of
the Master Servicing Business. To the Sellers’ Knowledge, the ownership and use
of the Seller Owned Intellectual Property by the Sellers and the operation of
the Master Servicing Business, including their provision of products and
services, does not infringe, dilute, misappropriate or otherwise violate the
Intellectual Property rights of any other Person, nor has any Seller received
any written communications alleging that it has infringed, diluted,
misappropriated or violated the Intellectual Property rights of any other
Person. Upon consummation of the Transactions, Purchaser will be entitled to
continue to use all Seller Intellectual Property consistent with the Sellers’
current practice without the payment of any fees, licenses or other payments
(other than ongoing payments required under any Contract for such Seller
Intellectual Property and described on Section 4.09(d) of the Seller Disclosure
Schedules).

(e)     To Sellers’ Knowledge, no other Person is infringing, diluting,
misappropriating or violating, nor has any Seller sent any communications
alleging that any Person has infringed, diluted, misappropriated or violated,
any Intellectual Property rights of the Sellers.

(f)     The Sellers have taken all reasonable actions to protect and maintain
(i) all Seller Owned Intellectual Property and (ii) the security and integrity
of the IT Platform, in the case of each of clauses (i) and (ii) to protect the
same against unauthorized use, modification, or access thereto, or the
introduction of any viruses or other unauthorized or damaging or corrupting code
or elements. The IT Platform operates and performs in all material respects in
accordance with its applicable specifications and documentation and as required
by the Sellers in connection with the Master Servicing Business as presently
conducted. Each Seller has implemented reasonable backup and disaster recovery
technology consistent with industry standard practices.

 

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Section 4.10     Labor Matters.

(a)     There are no collective bargaining or other labor union agreements that
have been in existence or currently are in existence, or that have been
negotiated or that are being negotiated by any Seller, to which any Seller is or
may become a party or by which any of them has been bound, is bound, or may
become bound. No Seller has been asked to negotiate any collective bargaining
agreement or other agreement or understanding with any labor organization. No
labor organization has been or is currently certified or recognized as the
representative of any employees of any Seller. The Sellers are not and have not
been party to, and are not and have not been subject to, affected by or
threatened with, encountered any dispute or controversy with a labor
organization or with respect to unionization or collective bargaining of
Sellers’ employees, including any labor union organizing activity, actual or
threatened, or had any employee strikes, material work stoppages, material
slowdowns, or lockouts, interruptions of work, picketing, arbitrations,
grievances, unfair labor practice charges or proceedings or other disputes
involving any of the current or former employees of any Seller. There are no
unfair labor practice charges or complaints pending or, to the Sellers’
Knowledge, threatened against any Seller with respect to employees of a Seller.

(b)     Except as set forth on Section 4.10(b) of the Seller Disclosure
Schedules, as of the date of the Original Asset Purchase Agreement, all bonuses
and other compensation payable to Master Servicing Employees and former
employees of the Sellers who were employed in connection with the Master
Servicing Business for services performed on or prior to the date of the
Original Asset Purchase Agreement have been paid in full and there are no
outstanding agreements, understandings, or commitments of any Seller with
respect to any bonuses or increases in compensation. Neither Seller is liable
for any arrears of wages or any Taxes or penalties for failure to comply with
any of the foregoing.

(c)     Except as set forth on Section 4.10(c) of the Seller Disclosure
Schedules, each Master Servicing Employee is employed at will and may terminate
his or her employment or be terminated from such employment at any time for any
or no reason with or without prior notice except as may be required by
applicable law.

Section 4.11     Legal Proceedings.

Except as set forth in the Action Report, a copy of which has heretofore been
delivered to Purchaser, and other than with respect to Foreclosures, bankruptcy
or receivership proceedings and other Actions arising in the ordinary course of
the Business, neither of the Sellers is a party to any, and there are no pending
or, to Sellers’ Knowledge, threatened Actions (i) against any Seller relating to
or involving the Business or any of the Purchased Assets or Assumed Liabilities
in which the risk of Loss to the Sellers would reasonably be expected to exceed
$500,000, (ii) challenging the validity or propriety of any of the Transactions,
or (iii) which could materially and adversely affect the ability of the Sellers
to perform under this Agreement.

Section 4.12     Compliance With Applicable Law.

(a)     The Business is being conducted in compliance with all applicable Law,
except (i) as set forth in the Sellers’ Exception Report, dated as of the date
of the Original Asset

 

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Purchase Agreement (the “Exception Report”), a copy of which has heretofore been
delivered to Purchaser, (ii) for the matters that are the subject of the Consent
Order and for which indemnification is otherwise being provided under
Section 10.02(c) or Section 10.02(d) of this Agreement, and (iii) where any
failure to comply with applicable Law, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.

(b)     Each Seller has all Permits of, and has made all filings, applications
and registrations with, all Governmental Entities that are required in order for
it to own or lease the Purchased Assets and to conduct the Business as presently
conducted, and each employee, officer or agent of each Seller has all Permits
of, and has made all filings, applications and registrations with, all
Governmental Entities that are required in order for such employee, officer or
agent to conduct his or her activities for the applicable Seller in the conduct
of the Business, except, in each case, (i) as set forth in the Licensing Report
or (ii) as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. All such Permits are in full force and
effect; and to the Knowledge of the Sellers, no suspension or cancellation of
any such Permit is threatened or will result from the consummation of the
Transactions, subject to obtaining the Seller Required Governmental Approvals.

(c)     Except as set forth in Section 4.12(c) of the Seller Disclosure
Schedules, neither Seller is a party to or is subject to any outstanding
settlement agreement, consent agreement, cease and desist order, agreement or
memorandum of understanding or any other Order, agreement, or similar
supervisory arrangement with, or a commitment letter or similar submission to,
or extraordinary supervisory letter from, any Governmental Entity except any
such regulatory action that, individually or in the aggregate, has not had and
would not reasonably be expected to have a Material Adverse Effect.

(d)     Neither Seller nor, to the Knowledge of the Sellers, any agent, servicer
or contractor thereof, has experienced any actual breach in data security
involving personally identifiable information of Serviced Mortgagors.

Section 4.13     Employee Benefit Plans.

(a)     The Sellers have provided to Purchaser a list as of the date of the
Original Asset Purchase Agreement of (i) each and every officer or employee of
the Sellers who is primarily employed in connection with the Business as of the
date of the Original Asset Purchase Agreement (each, a “Business Employee”);
(ii) each such Business Employee’s current title or position and location;
(iii) each such Business Employee’s date of hire, years of service credited
under Employee Benefit Plans, and status as active or on leave of absence (and,
if on a leave of absence, the type of leave and expected return date from such
leave); (iv) each such Business Employee’s current base salary or wages and
incentive compensation or commission opportunity; and (v) whether each such
Business Employee is an officer or employee of the Master Servicing Business
(each Business Employee of the Master Servicing Business, a “Master Servicing
Employee”).

(b)     The Sellers’ Benefits Report, dated as of the date of the Original Asset
Purchase Agreement (the “Benefits Report”), a copy of which has heretofore been
delivered to Purchaser, contains a list of each Employee Benefit Plan
maintained, contributed to, established, entered

 

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into or adopted for the benefit of any Master Servicing Employee (each, a
“Master Servicing Benefit Plan”). The Sellers have made available to Purchaser
true, complete and correct copies of each Master Servicing Benefit Plan and each
related summary plan description (or, in the absence of such documents, a
detailed description thereof), and, to the extent applicable, the Forms 5500 for
the three most recently completed plan years for each Master Servicing Benefit
Plan.

(c)     Neither any Seller nor any ERISA Affiliate contributes to, or has ever
contributed to or been required to contribute to, a “multiemployer plan” within
the meaning of Section 4001(a)(3) of ERISA. Other than as disclosed in
Section 4.13(c) of the Seller Disclosure Schedules, neither any Seller nor any
ERISA Affiliate maintains or contributes to, or has in the past six (6) years
maintained or contributed to, an employee benefit plan that is or has been
subject to Title IV of ERISA or Section 412 of the Code. Except as would not
reasonably be expected to result in material Liability to Purchaser (for these
purposes, not taking into account Section 2.02(c) of the Agreement), neither any
Seller nor, with respect to any plan subject to Title IV of ERISA, any Seller or
ERISA Affiliate has any liability for contributions or premiums that have not
been paid when due with respect to any Employee Benefit Plan (including any
insurance policy thereunder).

(d)     Except as would not reasonably be expected to result in material
Liability to Purchaser (for these purposes, not taking into account
Section 2.02(c)): (i) each Employee Benefit Plan has been administered in
material compliance with its terms (which have been maintained in compliance
with applicable Laws) and with applicable Laws; (ii) no “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary duties has occurred with respect to any Employee Benefit Plan;
(iii) there has been no act or omission with respect to any Employee Benefit
Plan that has given rise to or, to the Knowledge of the Sellers, could give rise
to fines, penalties, taxes, or Liability under ERISA or the Code; (iv) neither
any Seller nor any Employee Benefit Plan provides, or has obligation to provide,
medical or welfare benefits (through insurance or otherwise), or the
continuation of such benefits or coverage, in any case, after retirement or
other termination of employment of a Master Servicing Employee or a former
employee who provided services related to the Master Servicing Business, except
as may be required by Part 6 of Subtitle B of Title I of ERISA and Section 4980B
of the Code or similar state law (“COBRA”); and (v) no Seller has any liability
on account of any violation of the health care requirements of COBRA. Except as
would not reasonably be expected to result in material Liability to Purchaser or
any Master Servicing Employee, each Master Servicing Benefit Plan that
constitutes a “nonqualified deferred compensation plan” (as defined in
Section 409A(d)(1) of the Code) has, with respect to each Master Servicing
Employee, at all times been operated and maintained in all respects in
accordance with the requirements of Section 409A of the Code.

(e)     Except as would not reasonably be expected to result in material
Liability to Purchaser (for these purposes, not taking into account
Section 2.02(c)): (i) there are no Actions (other than routine claims for
benefits) pending or, to the Knowledge of the Sellers, threatened with respect
to any Employee Benefit Plan or its assets; (ii) there are no negotiations,
demands or proposals that are pending or have been made that concern matters now
covered, or that would be covered, by any Employee Benefit Plan; (iii) each
Employee Benefit Plan can be amended, terminated or otherwise discontinued by
its sponsor at any time without the imposition of any

 

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liability; and (iv) no Employee Benefit Plan is under audit or is the subject of
any inquiry, investigation or other proceeding by the IRS, the Department of
Labor, the Pension Benefit Guaranty Corporation or any other Governmental
Entity, nor, to the Knowledge of the Sellers, is any such audit, inquiry,
investigation or other proceeding threatened. There are no Actions (other than
routine claims for benefits) pending or, to the Knowledge of the Sellers,
threatened with respect to any Employee Benefit Plan that in any way involve any
Master Servicing Employee, nor do any circumstances exist pursuant to which a
Master Servicing Employee is reasonably likely to assert such an action, suit or
claim.

(f)     Except as set forth in Section 4.13(f) of the Seller Disclosure
Schedules or as would not reasonably be expected to result in material Liability
to Purchaser, each Employee Benefit Plan intended to be qualified under
Section 401(a) of the Code has obtained a currently effective favorable
determination letter from the IRS regarding its qualification (or still has time
in which to apply for or receive such a determination letter and make any
amendments necessary to obtain such a favorable determination covering the plan
from its initial adoption) or a favorable advisory or opinion letter from the
IRS regarding the master or prototype form on which it is established, and the
Sellers have provided a copy of each such letter to Purchaser. Except as would
not reasonably be expected to result in material liability to Purchaser, nothing
has occurred that would cause any such Employee Benefit Plan to fail to qualify
under Section 401(a) of the Code.

(g)     Except as set forth in Section 4.13(g) of the Seller Disclosure
Schedules or as would not reasonably be expected to result in material Liability
to Purchaser (for these purposes, not taking into account Section 2.02(b)), no
Seller or ERISA Affiliate has incurred or has a reasonable expectation that it
will incur any liability to the Pension Benefit Guaranty Corporation (other than
premium payments) or otherwise under Title IV of ERISA (including any withdrawal
liability) or under the Code with respect to any “employee pension benefit plan”
(as defined in Section 3(2) of ERISA) that any Seller or ERISA Affiliate
maintains or ever has maintained or to which any of them contributes, ever has
contributed, or ever has been required to contribute.

(h)     Neither the execution of this Agreement nor the consummation of the
Transactions will (either alone or in connection with any other event)
(i) entitle any Master Servicing Employee to any payment or compensation, or
(ii) accelerate the time of payment, funding or vesting of, or increase the
amount of, compensation due to any Master Servicing Employee.

Section 4.14     Brokers, Finders and Financial Advisors.

The Sellers and their respective officers, directors, employees and agents have
not employed any broker, finder or financial advisor in connection with the
Transactions, or incurred any Liability or commitment for any fees or
commissions to any such person in connection with the Transactions, except for
the retention of Keefe, Bruyette & Woods, Inc. and Deutsche Bank Securities Inc.
by the Bank and the fees payable pursuant thereto, which the Sellers have
separately disclosed to Purchaser and which fees and commissions will be paid by
the Sellers.

 

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Section 4.15     Environmental Matters.

Notwithstanding any other representation and warranty in this Article IV, the
representations and warranties contained in this Section 4.15 are the sole and
exclusive representations and warranties of the Sellers pertaining or relating
to any environmental, health or safety matters, including any arising under any
Environmental Laws. Except as set forth in the Sellers’ Environmental Report,
dated as of the date of the Original Asset Purchase Agreement (the
“Environmental Report”), a copy of which has heretofore been delivered to
Purchaser:

(i)     Each of the Sellers is in compliance in all material respects with any
Environmental Laws with respect to the Purchased Assets;

(ii)     Each of the Sellers possesses, and is in compliance in all material
respects with, all Environmental Permits necessary for the operation of the
Business;

(iii)     In the past three (3) years, the Sellers have not received any written
notice concerning, and do not otherwise have Knowledge that there is, any Action
pending or threatened before any Governmental Entity against them (A) for
alleged noncompliance with, or Liability under, any Environmental Law or
(B) relating to the presence of or release into the environment of any
Pollutants, in each case with respect to the Purchased Assets;

(iv)     To the Sellers’ Knowledge, the Owned Real Property and the Leased Real
Property are not contaminated with and do not otherwise contain any Pollutants
that could reasonably be expected to result in material Liability under
Environmental Laws, other than Pollutants (A) used in the ordinary course of
maintaining and cleaning the Owned Real Property or the Leased Real Property in
commercially reasonable amounts, (B) used as fuels, lubricants or otherwise in
connection with vehicles, machinery and equipment located at the Owned Real
Property or the Leased Real Property in commercially reasonable amounts, or
(C) used in the ordinary course of the business conducted at the Owned Real
Property or the Leased Real Property in commercially reasonable amounts; and

(v)     To the Sellers’ Knowledge, there are no underground storage tanks on, in
or under the Owned Real Property or the Leased Real Property; and to the
Sellers’ Knowledge, no underground storage tanks have been closed or removed
from the Owned Real Property or the Leased Real Property.

Section 4.16     Related Party Transactions.

Except as set forth in Section 4.16 of the Seller Disclosure Schedules, neither
Seller is a party to any transaction (including any loan or other credit
accommodation) or Contract with any Affiliate of any Seller that is included in
the Purchased Assets or Assumed Liabilities or with respect to the Master
Servicing Business. Except as set forth in Section 4.16 of the Seller Disclosure
Schedules, all transactions and Contracts set forth in Section 4.16 of the
Seller Disclosure Schedules (i) were made in the ordinary course of business,
(ii) were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions and
Contracts with other Persons, and (iii) did not involve more than the normal
risk of collectability or present other unfavorable features.

 

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Section 4.17     Real Estate Matters

(a)     With respect to the applicable Seller’s leased real property located at
5920 Castleway West Drive in Indianapolis, Indiana (the “Indianapolis Leased
Real Property”) and the applicable Seller’s leased real property located at
ParkRidge Six of ParkRidge Corporate Center, Littleton, Colorado (the “Littleton
Leased Real Property” and together with the Indianapolis Leased Real Property,
the “Leased Real Property”), the Sellers have made available to Purchaser true
and correct copies of the lease agreement and any amendments thereto
(collectively, the “Real Property Leases”) on or before the date of the Original
Asset Purchase Agreement. Each of the Real Property Leases is in full force and
effect and is a valid and binding agreement of the applicable Seller and, to the
Knowledge of the Sellers, the other party thereto. The applicable Seller has a
good and valid leasehold interest in each Leased Real Property, free and clear
of all Liens except for Permitted Liens. The applicable Seller is not in
material default under the applicable Real Property Lease and no event has
occurred and is continuing which, with or without notice or lapse of time, would
constitute a material default or event of default by such Seller under the
applicable Real Property Lease or, to the Sellers’ Knowledge, by any other party
thereto. Neither Seller has received any written notice from any Governmental
Entity or any landlord under the Real Property Leases (a) alleging a violation
of any Law with respect to the Leased Real Property that has not been corrected
or (b) of any pending or threatened condemnation proceedings with respect to the
Leased Real Property. There are no material pending or, to the Knowledge of the
Sellers, threatened Actions against either Seller relating to the Leased Real
Property. The Sellers have made available to Purchaser any surveys, site plans,
certificates of occupancy, plans and specifications, engineering or
environmental reports, zoning approvals, title commitments and policies and
subordination, non-disturbance, and attornment agreements relating to the Leased
Real Property that the Sellers have in their possession.

(b)     Section 4.17(b) of the Seller Disclosure Schedules lists the common
street address and the legal description of the Owned Real Property. The Owned
Real Property constitutes all of the real property owned by any Seller in
connection with the Business as of the date of the Original Asset Purchase
Agreement, other than real property to which the Bank holds title solely as
nominee for the benefit of an Investor. A true and complete copy of each owner’s
title policy of insurance of ALS with respect to the Owned Real Property
(“Seller Title Policies”) has been made available to Purchaser on or before the
date of the Original Asset Purchase Agreement. ALS has good, valid and
marketable fee simple title to the Owned Real Property, free and clear of all
Liens other than Permitted Liens, Liens disclosed in Section 4.17(b) of the
Seller Disclosure Schedules, and Liens that do not materially affect the
marketability of title to the Owned Real Property. There are no outstanding
options, rights of first offer or rights of first refusal to purchase the Owned
Real Property. Neither Seller has received any written notice from any
Governmental Entity (i) alleging a violation of any Law with respect to the
Owned Real Property that has not been corrected or (ii) of any pending or
threatened condemnation proceedings with respect to the Owned Real Property. To
the Sellers’ Knowledge, there are no material pending or threatened litigation
or administrative actions against any Seller relating to the Owned Real
Property.

 

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Section 4.18     Servicing.

(a)    Servicing Rights and Subservicing Rights.

(i)    Except for certain FHMLC mortgage servicing rights which may be
transferred by LBHI to the Bank as contemplated by Section 7.15, the Bank or ALS
owns all right, title and interest in and to the Servicing Rights free and clear
of all Liens except as set forth in Section 4.04(a) of the Seller Disclosure
Schedules, and has the sole right to act as Servicer with respect to the
Serviced Mortgage Loans pursuant to and subject to the terms and conditions of
the Servicing Agreements and Subservicing Agreements;

(ii)    The Bank or ALS is entitled to receive Servicing Compensation, Ancillary
Income and Late Fees as Servicer under, and subject to the terms of, each
Servicing Agreement and Subservicing Agreement;

(iii)    Except as set forth in Section 4.18(a)(iii) of the Seller Disclosure
Schedules, none of the other parties to any of the Servicing Agreements,
Subservicing Agreements or Servicing Rights Agreements have provided written
notice to the Sellers that such party will terminate, modify or amend any of the
Servicing Agreements, Subservicing Agreements or Servicing Rights Agreements or
the Sellers’ benefits or the Servicing Rights under any of the Servicing
Agreements, Subservicing Agreements or Servicing Rights Agreements;

(iv)    Except as set forth in Section 4.18(a)(iv) of the Seller Disclosure
Schedules, neither Seller has engaged any subservicers, subcontractors or other
agents to perform any of its duties under any of the Servicing Agreements,
Subservicing Agreements or Servicing Rights Agreements, other than engagements
that are permitted by, and are in compliance in all material respects with the
requirements of, the applicable Servicing Agreements, Subservicing Agreements
and Servicing Rights Agreements, and all fees and expenses due and payable to
any such subservicer, subcontractor or agent as of the Applicable Closing Date
in connection therewith have been paid; and

(v)    A copy of the Servicing Rights Data Tape has been delivered to Purchaser.
All the information included in the Servicing Rights Data Tape is, and in the
Monthly Servicing Rights Data Tapes will be, true and correct in all material
respects as of January 31, 2012 or, with respect to any Monthly Servicing Rights
Data Tape, as of the applicable month-end date to which such Monthly Servicing
Rights Data Tape relates.

(b)    Seller/Servicer Standing. Each Seller is (i) an approved seller/servicer
or issuer, as applicable, of mortgage loans for HUD, FNMA, FHLMC, GNMA, FHA, RHS
and VA, (ii) properly licensed and qualified to do business and in good standing
in each jurisdiction in which such licensing and qualification is necessary to
act as the Servicer under any of the Servicing Agreements, Servicing Rights
Agreements or Subservicing Agreements, and (iii) qualified to act as the
servicer under each Servicing Agreement, Servicing Rights Agreement and
Subservicing Agreement, and no event has occurred which would make any Seller
unable to comply with all such eligibility requirements or which would require
notification to HUD, FNMA, FHLMC, GNMA, FHA, RHS or VA. Neither Seller has
received any written notice from any

 

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Governmental Entity that it intends to terminate or restrict such Seller’s
status as an approved participant in its programs for which such Seller is as of
the date of the Original Asset Purchase Agreement registered, approved or
authorized.

(c)    MERS Membership. Each Seller is a member in good standing of the MERS
system.

(d)    Servicing Agreements.

(i)    Schedules 1.01(q)(1), 1.01(q)(2), 1.01(r) and 1.01(t) contain a list of
all Servicing Agreements, Subservicing Agreements and Servicing Rights
Agreements in effect as of the date of the Original Asset Purchase Agreement.
Except as set forth in Section 4.18(d)(i) of the Seller Disclosure Schedules,
the Sellers have made available to Purchaser true and complete copies of each
such Servicing Agreement, Subservicing Agreement and Servicing Rights Agreement.

(ii)    Except as would not reasonably be expected to materially impair the
ability of Purchaser to realize the economic benefits associated with the
Transactions, each Servicing Agreement, Subservicing Agreement and Servicing
Rights Agreement is a valid and binding obligation of the Seller party thereto,
is in full force and effect, and is enforceable by such Seller in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar Laws
affecting creditors’ rights generally, and subject, as to enforceability, to
general principles of equity, whether applied in a court of law or a court of
equity.

(iii)    The Sellers have previously made available to Purchaser a correct and
complete description of the Sellers’ written policies and procedures used by the
Sellers in connection with servicing the Serviced Mortgage Loans as of the date
of the Original Asset Purchase Agreement.

(e)    Servicing Portfolio Information; Related Matters.

(i)    A copy of the Serviced Mortgage Loan Data Tape has been delivered to
Purchaser. All the information included in the Serviced Mortgage Loan Data Tape
is, and in the Monthly Serviced Mortgage Loan Data Tapes will be, true and
correct in all material respects as of January 31, 2012 or, with respect to any
Monthly Serviced Mortgage Loan Data Tape, as of the applicable month-end date to
which such Monthly Serviced Mortgage Loan Data Tape relates.

(ii)    To the Knowledge of Sellers, no Serviced Mortgage Loan is a “high cost
loan” or “covered loan” under any of the Home Ownership Equity Protection Act,
the Truth in Lending Act (Regulation Z) or a similar state or local
anti-predatory lending Law.

(f)    Advances.

(i)    A copy of the Servicer Advance Data Tape has been delivered to Purchaser.
All the information included in the Servicer Advance Data Tape is true and

 

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correct in all material respects as of January 31, 2012, except for the P&I
Advances (as defined in the applicable Servicing Agreement, Subservicing
Agreement, Master Servicing Agreement or Servicing Rights Agreement or any other
similar term therein) data presented in the Servicer Advance Data Tape, which
will be current for each Servicing Agreement, Subservicing Agreement, Master
Servicing Agreement and Servicing Rights Agreement as of the most recent
investor reporting monthly cut-off date for each such Servicing Agreement,
Subservicing Agreement, Master Servicing Agreement and Servicing Rights
Agreement.

(ii)    Each Servicer Advance is a valid and subsisting amount owing to a Seller
and was made in accordance with Applicable Servicing Requirements in all
material respects, and is not subject to any set-off or claim arising from acts
or omissions of the Sellers that could be asserted against Purchaser. Except as
set forth in Section 4.18(f)(ii) of the Seller Disclosure Schedules, the Sellers
have not received any notice from any Investor, Insurer or other appropriate
party in which the Investor, Insurer or other party disputes or denies a
material claim by the Sellers for reimbursement in connection with a Servicer
Advance. All Servicer Advances required to be made by a Seller in accordance
with the Applicable Servicing Requirements prior to the Applicable Closing Date
will have been made by such Seller. For the avoidance of doubt, and
notwithstanding the foregoing or any other provision of this Agreement, no
representation or warranty is being made as to whether such Servicer Advances
are ultimately collectible.

(iii)    No Servicer Advance Receivable has been sold, transferred, assigned or
pledged by the related Seller to any Person other than the Purchaser. The
Sellers have not taken any action that, or failed to take any action the
omission of which, would materially impair the rights of Purchaser with respect
to any such Servicer Advance Receivable.

(g)    Escrow Accounts. All Custodial Accounts and Escrow Accounts are
maintained in all material respects in accordance with Applicable Servicing
Requirements.

(h)    Servicing Rights Agreements. Under each Servicing Rights Agreement,
neither Seller has any obligation, in its capacity as the owner of the Servicing
Rights with respect to the loans being serviced thereunder, to make advances if
the Servicer thereunder fails to make any such advances pursuant to the terms of
such Servicing Rights Agreement.

Section 4.19    Master Servicing Agreements.

(a)    Each Seller is in compliance in all material respects with all Master
Servicing Agreements to which such Seller is a party or will have cured any
material non-compliance in all material respects with respect to such Master
Servicing Agreements prior to the Second Closing Date.

(b)    Schedule 1.01(h) contains a list of all Master Servicing Agreements in
effect as of the date of the Original Asset Purchase Agreement. The Sellers have
made available to Purchaser true and complete copies of each such Master
Servicing Agreement.

 

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(c)    Except as set forth on Section 4.19(c) of the Seller Disclosure
Schedules, none of the other parties to any of the Master Servicing Agreements
have provided written notice to either Seller that such party will terminate,
modify or amend any of the Master Servicing Agreements or any Seller’s rights
under any of such Master Servicing Agreements.

(d)    Except as set forth in Section 4.19(d) of the Seller Disclosure
Schedules, neither Seller has engaged any subservicers, subcontractors or other
agents to perform any of its duties under any of the Master Servicing
Agreements.

(e)    Except as set forth in the Licensing Report, ALS is properly licensed and
qualified to do business and in good standing in each jurisdiction in which such
licensing and qualification is necessary to act as the Master Servicer under any
of the Master Servicing Agreements, and is qualified to act as the Master
Servicer under each Master Servicing Agreement, and no event has occurred which
would make ALS unable to comply with all such eligibility requirements.

(f)    A copy of the Master Servicing Data Tape has been delivered to Purchaser.
All the information included in the Master Servicing Data Tape is, and in the
Monthly Master Servicing Data Tape will be, true and correct in all material
respects as of January 31, 2012 or, with respect to any Monthly Master Servicing
Data Tape, as of the applicable month-end date to which such Monthly Master
Servicing Data Tape relates.

(g)    ALS has the sole right to act as Master Servicer with respect to the
Master Serviced Mortgage Loans pursuant to and subject to the terms and
conditions of the Master Servicing Agreements.

(h)    ALS is entitled to receive the Master Servicing Compensation as Master
Servicer under, and subject to the terms of, each Master Servicing Agreement.

(i)    All Master Servicing Custodial Accounts are maintained in all material
respects in accordance with Applicable Servicing Requirements.

Section 4.20    Servicing Loan Files.

All Servicing Loan Files provided to Purchaser by or on behalf of the Sellers
contain all documents, instruments and information (which may include true,
correct and complete copies thereof) necessary to service the Serviced Mortgage
Loans in accordance with the Applicable Servicing Requirements.

Section 4.21    Securitization Liability.

The Bank is not currently, and since 2008 has not been, the subject of any
pending or prior Action alleging or asserting that the Bank is subject to any
material Liability arising from (i) the origination of any loans sold by or
otherwise transferred by the Sellers directly or indirectly to any Investor or
any other Person or (ii) such sale or transfer of such loans, including without
limitation any Liability for any representations or warranties made with respect
to such loans to any such Investor or Third Party.

 

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Section 4.22    No Other Representations or Warranties.

The Sellers acknowledge that except for the representations and warranties
expressly set forth in Article V, neither Purchaser nor any other Person has
made any representation or warranty, express or implied, as to Purchaser or the
accuracy or completeness of any information that Purchaser or any other Person
furnished or made available to the Sellers and its Representatives.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to the Sellers that the statements contained
in this Article V are true and correct as of the date of this Agreement (or, if
made as of a different specified date, as of such date) and will be true and
correct as of the Applicable Closing Date (as though made then and as though the
Applicable Closing Date were substituted for the date of this Agreement
throughout this Article V), except as otherwise set forth in the Purchaser
Disclosure Schedules.

Section 5.01    Organization.

(a)    Purchaser is a limited liability company duly organized and validly
existing and in good standing under the laws of Delaware. Purchaser has all
requisite corporate power and authority to own, lease and operate its assets and
carry on its business as now conducted. Purchaser is duly licensed or qualified
to do business in each jurisdiction where its ownership or leasing of assets or
the conduct of its business requires such licensure or qualification, except
where the failure to obtain such license or qualification would not reasonably
be expected to have a material adverse effect on Purchaser’s ability to
consummate the Transactions or perform its obligations hereunder.

(b)    Prior to the date of the Original Asset Purchase Agreement, Purchaser has
made available to the Sellers, true and correct copies of the certificate of
formation and limited liability company operating agreement of Purchaser.

Section 5.02    Authority; No Violation.

(a)    Purchaser has full corporate power and authority to execute and deliver
this Agreement and, subject to receipt of the Purchaser Required Governmental
Approvals, to consummate the Transactions. The execution and delivery of this
Agreement and the Ancillary Agreements by Purchaser and the consummation by
Purchaser of the Transactions have been duly and validly authorized by all
necessary corporate action of Purchaser. This Agreement has been duly and
validly executed and delivered by Purchaser, and assuming the due authorization,
execution and delivery by each of the Sellers, constitutes the valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar Laws affecting
creditors’ rights generally, and subject, as to enforceability, to general
principles of equity, whether applied in a court of law or a court of equity.
Each Ancillary Agreement, upon execution and delivery by Purchaser, and assuming
the due authorization, execution and delivery by each of the Sellers, will
constitute the valid and

 

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binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar Laws
affecting creditors’ rights generally, and subject, as to enforceability, to
general principles of equity, whether applied in a court of law or a court of
equity.

(b)    Subject to receipt of the Purchaser Required Governmental Approvals and
the Third Party Consents, and expiration of related waiting periods, neither the
execution and delivery of this Agreement or any Ancillary Agreement nor the
consummation of the Transactions and compliance by Purchaser with any of the
terms or provisions hereof or thereof will: (i) conflict with or result in a
breach or violation of or a default under any provision of the organizational
documents of Purchaser; (ii) violate any Law or Order applicable to Purchaser or
any of its properties or assets or enable any Person to enjoin the Transactions;
or (iii) violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration or
the creation of any Lien upon any of the properties or assets of Purchaser under
any of the terms, conditions or provisions of any material Contract to which
Purchaser is a party, or by which it or any of its properties or assets may be
bound or affected.

Section 5.03    Consents.

Except for the Purchaser Required Governmental Approvals and the Third Party
Consents and compliance with any conditions contained therein, no consents,
waivers or approvals of, or filings or registrations with, any Governmental
Entity are necessary, and no consents, waivers or approvals of, or filings or
registrations with, any other third parties are necessary, in connection with
the execution and delivery of this Agreement by Purchaser and the completion by
Purchaser of the Transactions.

Section 5.04    Access to Funds; Financing.

Purchaser has heretofore delivered to the Sellers true, complete and correct
copies of the Financing Commitments, pursuant to which the lenders party thereto
(the “Lenders”) have committed, subject to the terms and conditions set forth
therein, to lend the amounts set forth therein for the purposes of financing the
Transactions and related fees and expenses (the “Financing”). As of the date of
the Original Asset Purchase Agreement, the Financing Commitments have not been
amended or modified, no such amendment or modification is contemplated by
Purchaser, and the commitments contained in the Financing Commitments have not
been withdrawn or rescinded in any respect. As of the date of the Original Asset
Purchase Agreement, there are no side letters or other Contracts or arrangements
related to the funding of the Financing other than as expressly set forth in the
Financing Commitments delivered to the Sellers prior to the date of the Original
Asset Purchase Agreement. Purchaser has fully paid any and all commitment fees
or other fees in connection with the Financing Commitments that are payable on
or prior to the date of the Original Asset Purchase Agreement, and the Financing
Commitments are in full force and effect and is the legal, valid, binding and
enforceable obligation of Purchaser and, to the Knowledge of Purchaser, each of
the other parties thereto. There are no conditions precedent or other
contingencies related to the funding of the full amount of the Financing, other
than as expressly set forth in or expressly contemplated by the

 

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Financing Commitments. No event has occurred which, with or without notice,
lapse of time or both, would or would reasonably be expected to constitute a
default or breach on the part of Purchaser or, to the Knowledge of Purchaser,
any other party thereto under the Financing Commitments other than any such
default or breach that has been irrevocably waived by the Lenders or otherwise
cured in a timely manner by Purchaser to the satisfaction of the Lenders. To the
Knowledge of Purchaser, there are no facts or circumstances relating to
Purchaser as of the date of the Original Asset Purchase Agreement that would
cause any of the conditions to the Financing contemplated by the Financing
Commitments not to be satisfied. Purchaser will have at and after the Applicable
Closing funds sufficient to (i) pay the Aggregate Purchase Price for the
Purchased Assets being acquired at such Applicable Closing, (ii) pay any and all
fees and expenses required to be paid by Purchaser in connection with the
Financing and the Transactions, and (iii) satisfy all of the other payment
obligations of Purchaser contemplated hereunder.

Section 5.05    Legal Proceedings.

Purchaser is not party to any, and there are no pending or, to Purchaser’s
Knowledge, threatened Actions (i) challenging the validity or propriety of any
of the Transactions, or (ii) which could materially and adversely affect the
ability of Purchaser to perform under this Agreement.

Section 5.06    Brokers, Finders and Financial Advisors.

Neither Purchaser nor any of its officers, directors, employees or agents has
employed any broker, finder or financial advisor in connection with the
Transactions, or incurred any Liability or commitment for any fees or
commissions to any such person in connection with the Transactions.

Section 5.07    Representations and Warranties as to the Servicing Rights.

(a)    Seller/Servicer Standing. Purchaser is, or as of the Applicable Closing
Date will be, (i) an approved seller/servicer or issuer, as applicable, of
mortgage loans for HUD, FNMA, FHLMC, GNMA, FHA, RHS and VA and is in good
standing with the requisite financial criteria and adequate resources to
complete the Transactions on the conditions stated herein, (ii) properly
licensed and qualified to do business and in good standing in each jurisdiction
in which such licensing and qualification is necessary to act as the Servicer
under all of the Servicing Agreements, Subservicing Agreements and Servicing
Rights Agreements and the Master Servicer under all of the Master Servicing
Agreements, and (iii) qualified to act as, and satisfies all the criteria for
acting as, the Servicer under each Servicing Agreement, Subservicing Agreement
and Servicing Rights Agreement and Master Servicer under each Master Servicing
Agreement, and no event has occurred which would make Purchaser unable to comply
with all such eligibility requirements or which would require notification to
HUD, FNMA, FHLMC, GNMA, FHA, RHS or VA.

(b)    MERS Membership. Purchaser is a member in good standing of the MERS
system.

 

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(c)    No Other Representations or Warranties. Purchaser (i) acknowledges and
agrees that (A) it has made its own independent determination of the value
(including recoverability) of the Servicer Advances and the Servicing Rights and
Master Servicing Rights held by the Sellers and has not relied on the Sellers or
any other Person with respect to such value; (B) neither the Sellers nor any
other Person has made any direct or indirect representation or warranty (whether
in this Agreement or otherwise) with respect to such value; and (C) it will not
assert that any matters related to such value resulted in the failure of any of
the conditions set forth in Article VIII to be satisfied and (ii) waives, on
behalf of itself and each other Purchaser Indemnified Party, to the fullest
extent permitted under applicable Law, any and all rights, claims and causes of
action (other than claims of, or causes of action arising from, fraud) it may
have against the Sellers or any of their respective Affiliates or
representatives related to such value and arising under or based upon this
Agreement or any certificate delivered in connection herewith, whether under
this contract or arising under common law or any other Law; provided, that
nothing in this Section 5.07(c) shall be deemed to limit any remedies available
pursuant to Article X with respect to any breach of representations and
warranties included in Article IV.

Section 5.08    No Other Representations or Warranties.

(a)    Purchaser acknowledges that (i) it and its Representatives have been
permitted access to the books and records, facilities, equipment, Contracts and
other properties and assets of the Sellers related to the Business, and that it
and its Representatives have had an opportunity to meet with officers and
employees of the Sellers and (ii) except for the representations and warranties
expressly set forth in Article IV, (A) Purchaser has not relied on any
representation or warranty from the Sellers or any other Person in determining
to enter into this Agreement and (B) neither the Sellers nor any other Person
has made any representation or warranty, express or implied, as to the Business
or the Purchased Assets or the accuracy or completeness of any information
regarding any of the foregoing that the Sellers or any other Person furnished or
made available to Purchaser and its Representatives (including any projections,
estimates, budgets, offering memoranda, management presentations or due
diligence materials). Without limiting the generality of the foregoing, except
as expressly set forth in the representations and warranties in Article IV,
THERE ARE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

(b)    THE SELLERS AND PURCHASER AGREE THAT, EXCEPT AS EXPRESSLY PROVIDED
OTHERWISE IN THIS AGREEMENT AND THE OTHER DOCUMENTS EXECUTED BY THE SELLERS AT
THE SECOND CLOSING WITH RESPECT TO THE OWNED REAL PROPERTY AND THE REAL PROPERTY
LEASEHOLDS, THE OWNED REAL PROPERTY AND THE REAL PROPERTY LEASEHOLDS SHALL BE
SOLD AND PURCHASER SHALL ACCEPT POSSESSION OF THE OWNED REAL PROPERTY AND THE
LEASED REAL PROPERTY ON THE SECOND CLOSING DATE “AS IS,” “WHERE IS,” AND “WITH
ALL FAULTS.”

 

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ARTICLE VI.

CONDUCT PENDING ACQUISITION

Section 6.01    Conduct of Business Prior to the Second Closing.

From the date of the Original Asset Purchase Agreement until the Second Closing
Date, except (i) as contemplated by this Agreement, (ii) as set forth in
Section 6.01 of the Seller Disclosure Schedules, (iii) as required by Law, or
(iv) to the extent Purchaser provides prior written consent to do otherwise,
which consent shall not be unreasonably withheld, each of the Sellers shall use
commercially reasonable efforts to conduct the Business and operate the
Purchased Assets in the ordinary course of business. Without limiting the
foregoing sentence, each of the Sellers shall:

(a)    preserve intact its current business organization and ongoing operations,
including with respect to the relationships between such Seller and its
Affiliates;

(b)    maintain in good standing its existence as a federal savings bank or
limited liability company, as the case may be;

(c)    maintain the general character of the Business and conduct the Business
in accordance with Applicable Servicing Requirements;

(d)    maintain proper business and accounting records relative to the Business;
and

(e)    maintain commercially reasonable procedures for protection of the Seller
Owned Intellectual Property.

Section 6.02    Forbearances of Seller.

Without limiting the covenants set forth in Section 6.01 hereof, from the date
of the Original Asset Purchase Agreement until the Second Closing Date (other
than the covenants set forth in Sections 6.02(c), 6.02(d) and 6.02(e), which
shall survive the Second Closing and shall continue to have effect with respect
to the actions of the Sellers until the Continuing Employee Transfer Date),
except (i) as contemplated by this Agreement, (ii) as set forth in Section 6.02
of the Seller Disclosure Schedules, (iii) as required by Law, or (iv) to the
extent Purchaser provides prior written consent to do otherwise, which consent
shall not be unreasonably withheld or delayed, each of the Sellers will not:

(a)    enter into any Contract that will be an Assumed Contract that is not
terminable within sixty (60) days and involving payments or obligations by
Sellers in excess of $250,000 individually;

(b)    (i) amend in any material respect or terminate any Assumed Contract
identified as a Tier 1 or Tier 2 Contract on Schedule 1.01(b), or waive or
release any material rights or claims thereunder, provided, however, that the
expiration of any such Contract by its terms prior to the Second Closing shall
be deemed not to be a termination of such Contract under this clause, or
(ii) enter into any Assumed Contract that would have been identified as a Tier 1
or Tier 2 Contract had it been entered into prior to the date of the Original
Asset Purchase Agreement;

 

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(c)    grant or award any change in any item of recurring or periodic cash
compensation of any Master Servicing Employee except for increases in the
ordinary course of business consistent with past practice, except as required by
applicable Law; to the extent that Purchaser refuses to consent to such an act,
a Seller’s failure to take such action shall not result in a failure to satisfy
a condition to the obligations of the Purchaser under this agreement, whether
pursuant to Section 8.02 or otherwise, and no Seller shall have any obligation
to indemnify any Purchaser Indemnified Party, whether pursuant to Section 10.02
or otherwise, for such failure or any consequence thereof;

(d)    enter into, materially modify or cause the termination of any employment
agreement, pension, retirement, stock option, stock purchase, stock appreciation
right, stock grant, savings, profit sharing, deferred compensation, supplemental
retirement, consulting, bonus, group insurance or other employee benefit,
incentive, welfare, employment, severance, retention, change in control or
similar Contract, plan, policy, program or arrangement, or any trust agreement
related thereto, in respect of any Master Servicing Employee; or make any
discretionary contributions to any defined contribution or defined benefit plan
for the benefit of any Master Servicing Employee other than discretionary
contributions in the ordinary course of business consistent with past practice,
except as required by applicable Law; to the extent that Purchaser refuses to
consent to such an act, a Seller’s failure to take such action shall not result
in a failure to satisfy a condition to the obligations of the Purchaser under
this agreement, whether pursuant to Section 8.02 or otherwise, and no Seller
shall have any obligation to indemnify any Purchaser Indemnified Party, whether
pursuant to Section 10.02 or otherwise, for such failure or any consequence
thereof;

(e)    take any action that would give rise to a right of payment to any Master
Servicing Employee under any employment agreement (other than in connection with
the hiring or promotion of an individual to replace a Master Servicing Employee,
on terms substantially consistent with the terms of the employment agreement
with the Master Servicing Employee being replaced), or that would accelerate a
right to payment to any Master Servicing Employee under any employee
compensation or benefit plan, except as required by applicable Law; to the
extent that Purchaser refuses to consent to such an act, a Seller’s failure to
take such action shall not result in a failure to satisfy a condition to the
obligations of the Purchaser under this agreement, whether pursuant to
Section 8.02 or otherwise, and no Seller shall have any obligation to indemnify
any Purchaser Indemnified Party, whether pursuant to Section 10.02 or otherwise,
for such failure or any consequence thereof;

(f)    sell, transfer, assign, lease, license, cancel, abandon, mortgage,
surrender, subject to any Lien (other than a Permitted Lien) or otherwise
dispose of or encumber any of the Purchased Assets in one transaction or a
series of related transactions having a value, individually or in the aggregate,
in excess of $250,000; provided, however, that Sellers shall not be entitled to
sell, transfer, assign, lease, license, cancel, abandon, mortgage, surrender,
subject to any Lien (other than a Permitted Lien) or otherwise dispose of or
encumber (i) the Servicing Rights, Servicing Rights Agreements, Servicing
Agreements, Subservicing Rights, Subservicing Rights Agreements, Servicing
Compensation, Late Fees, Ancillary Income, Servicer Advance

 

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Receivables and Deferred Servicing Fees, (ii) any Purchased Assets related to
the Master Servicing Business or (iii) any personal property located at the
Indianapolis Leased Real Property;

(g)     create, incur, assume or guarantee any Indebtedness that will constitute
an Assumed Liability as of the Applicable Closing Date or subject any Purchased
Asset to any Lien that will not be released as of the Applicable Closing Date;

(h)     change any method, practice or principle of accounting, except as may be
required from time to time by GAAP (without regard to any optional early
adoption date) or any Bank Regulator responsible for regulating any Seller;
provided, that if any such changes are required, the Sellers shall promptly
provide written notice to Purchaser with respect thereto;

(i)     waive or forgive any claim or right of a Seller relating to the
Purchased Assets in one transaction or a series of related transactions having a
value in excess of $500,000;

(j)     with respect to the Purchased Assets, make or change any election in
respect of Taxes, adopt or change any accounting method in respect of Taxes or
otherwise, enter into any closing agreement, settle any claim or assessment in
respect of Taxes, or consent to any extension or waiver of the limitation period
applicable to any claim or assessment in respect of Taxes, except as required by
Law or GAAP;

(k)     purchase new mortgage servicing rights or sell mortgage servicing rights
relating to Serviced Mortgage Loans, except pursuant to contractual commitments
(including co-issue commitments/agreements) that are set forth in
Section 6.02(k) of the Seller Disclosure Schedules;

(l)     acquire assets that are Purchased Assets having a value individually or
in the aggregate in excess of $500,000;

(m)     amend in any material respect or terminate any Servicing Agreement,
Servicing Rights Agreement, Subservicing Agreement or Master Servicing
Agreement; except as necessary to comply with the Applicable Servicing
Requirements, provided, however, that the expiration of any such Contract by its
terms prior to the Second Closing shall be deemed not to be a termination of
such Contract under this clause;

(n)     change its servicing practices in any material respect, except as
required by Applicable Servicing Requirements; provided, that, prior to making
any such changes pursuant to clause (b) of the definition of Applicable
Servicing Requirements, the Sellers shall in good faith consult with Purchaser
with respect thereto;

(o)     make any capital expenditure other than expenditures necessary to
maintain existing Purchased Assets in good repair;

(p)     settle any Action with any Person (other than a Governmental Entity)
pursuant to terms which, individually, could reasonably be expected to result in
a Loss Sharing Claim in excess of $500,000; or

 

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(q)     agree to do any of the foregoing.

Section 6.03     Other Sales.

Notwithstanding Section 6.01 and Section 6.02, from the date of the Original
Asset Purchase Agreement until the Second Closing Date, the Sellers may sell or
transfer, or enter into one or more agreements to sell or transfer, any asset of
the Sellers, except for the Purchased Assets.

Section 6.04     No Control of the Business.

Notwithstanding Section 6.01 and Section 6.02, nothing contained in this
Agreement shall give Purchaser, directly or indirectly, the right to control or
direct the Sellers’ operations prior to the Second Closing.

Section 6.05     Exclusivity.

(a)     Until the earlier of the Second Closing and the valid termination of
this Agreement pursuant to Section 11.01(a) or the valid termination of rights
and obligations under this Agreement pursuant to Section 11.01(b), the Sellers
shall not, nor shall any Seller authorize any of its Affiliates to, nor shall
any Seller authorize and shall use reasonable efforts not to permit any officer,
director or employee of, or any investment banker, attorney or other advisor or
representative of, such Seller to, (i) solicit, initiate or knowingly encourage
the submission of any alternative proposal for the acquisition of all or any
portion of the Purchased Assets (an “Alternative Proposal”), (ii) participate in
any discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may be reasonably
expected to lead to, any Alternative Proposal or (iii) enter into any agreement
with respect to any Alternative Proposal; provided, however, that nothing set
forth herein shall prohibit the Sellers from engaging in any discussions or
negotiations with or provide any information to any of its Affiliates regarding
the transfer of the Purchased Assets to LBHI on or after May 31, 2012 in
accordance with the provisions of the Capital Maintenance Agreement (the “CMA”)
dated November 30, 2010 by and among the Bank, LBB, LBHI and the OTS, or
otherwise comply with the provisions of the CMA.

(b)     The Sellers shall immediately cease and terminate all existing
discussions and negotiations with any other Persons that could reasonably be
expected to result in an Alternative Proposal or an agreement with respect to an
Alternative Proposal.

Section 6.06     Financial Statements.

The Bank shall provide to Purchaser a copy of (i) the audited consolidated
statements of financial condition of the Bank and its subsidiaries as of
December 31, 2011 within five (5) Business Days of the Bank’s receipt of a final
audit report and (ii) any call report submitted to the OCC within five (5)
Business Days of such submission.

 

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ARTICLE VII.

COVENANTS

Section 7.01    Current Information.

(a)    Between the date of the Original Asset Purchase Agreement and the Second
Closing Date, the Sellers and Purchaser shall meet on a regular basis, and in
any event not less than once per calendar month, to discuss and plan for the
conversion of the Sellers’ data processing and related electronic informational
systems to those used by Purchaser which planning shall include, but not be
limited to, discussion of the possible termination by the Sellers of third-party
service provider arrangements effective on the Second Closing Date or at a date
thereafter, non-renewal of personal property leases and Software licenses used
by the Sellers in connection with their systems operations, retention of outside
consultants and additional employees to assist with the conversion, and
outsourcing, as appropriate, of proprietary or self-provided system services, it
being understood that, unless the Sellers otherwise agree, no conversion shall
take place prior to the Second Closing Date. In the event that the Sellers take,
at the request of Purchaser, any action prior to the Second Closing relative to
third parties to facilitate the conversion that results in the imposition on the
Sellers of any termination fees or charges, Purchaser shall indemnify the
Sellers for any such fees and charges, and the costs of reversing the conversion
process, if for any reason the transactions to be consummated at the Second
Closing are not consummated for any reason other than a breach of this Agreement
by the Sellers or the termination of this Agreement pursuant to
Section 11.01(a)(v) or the termination of rights and obligations under this
Agreement pursuant to Section 11.01(b)(v). The Sellers shall reasonably
cooperate with Purchaser to effect any conversion of the operating systems of
the Sellers to those of Purchaser or its Affiliates on the Second Closing Date
or as soon thereafter as is reasonably practicable. In connection therewith, the
Sellers shall, from and after the date of the Original Asset Purchase Agreement
through the Second Closing, reasonably assist Purchaser in making and sending
notices, information and materials to the customers and service providers of the
Sellers.

(b)    The Sellers shall promptly inform Purchaser upon receiving notice of any
legal, administrative, arbitration or other proceedings, demands, notices,
audits or investigations (by any Governmental Entity) relating to the alleged
Liability of any Seller under any labor or employment Law with respect to the
Master Servicing Employees.

(c)    The Sellers, together, and Purchaser shall each designate a person to act
as the representative for such Party or Parties for purposes of coordinating
with the other Party or Parties in connection with activities and conduct
necessary or appropriate to effect the closing of the Transactions and to
transition the Business from the Sellers to Purchaser. The Sellers initially
designate Vincent Otto as their representative. Purchaser initially designates
Bob Appel as its representative. The representatives shall meet or otherwise
communicate with each other on a regular basis.

 

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Section 7.02     Access to Properties and Records; Confidentiality.

(a)     During the period from the date of the Original Asset Purchase Agreement
to the Second Closing Date, the Sellers shall permit Purchaser and its
Affiliates and their attorneys, accountants, employees, officers, agents and
other authorized representatives (collectively, “Representatives”) reasonable
access upon reasonable notice to the Owned Real Property and the Leased Real
Property in each case subject to the provisions of the Real Property Leases, and
shall disclose and make available to Purchaser and its Representatives during
normal business hours all of its books, papers and records, in each case to the
extent they relate to the Business, the Purchased Assets or the Assumed
Liabilities, including, but not limited to, all books of account (including the
general ledger), Tax records, minute books of directors’ (other than minutes
that discuss any of the Transactions or any other subject matter the Sellers
reasonably determine should be treated as confidential) and stockholders’
meetings, organizational documents, bylaws, material contracts and agreements,
filings with any regulatory authority, litigation files, plans affecting
employees, and any other business activities or prospects in which Purchaser may
have a reasonable interest; provided, however, that the Sellers shall not be
required to take any action that would provide access to or disclose information
where such access or disclosure, in the Sellers’ reasonable judgment, would
interfere with the normal conduct of the Sellers’ business or would violate or
prejudice the rights or business interests or confidences of any customer or
other person, or would result in the waiver by any Seller of the privilege
protecting communications between it and any of its counsel, or would be
contrary to any Law applicable to such Seller. The Sellers shall provide
Purchaser and its Representatives with such historical financial information
regarding the Business as Purchaser may reasonably request. Purchaser and its
Representatives shall use commercially reasonable efforts to minimize any
interference with the Sellers’ regular business operations during any such
access to the Sellers’ property, books and records.

(b)     Purchaser agrees that the use by it and its Representatives of any
information obtained pursuant to this Section 7.02 shall be subject to the
Confidentiality Agreement. Notwithstanding the foregoing and anything to the
contrary in the Confidentiality Agreement, Purchaser’s obligation of
confidentiality under the Confidentiality Agreement, other than any such
information relating solely to the Business or the Purchased Assets, shall
survive for three (3) years following the date of the Original Asset Purchase
Agreement.

(c)     (i) From and after the First Closing, (A) each Seller shall not, and
shall direct its respective Affiliates and Representatives not to, disclose any
trade secrets, confidential or proprietary information, inventions (to the
extent not disclosed in published patent applications), methods, processes,
formulae, technology, algorithms, models, vendor lists, customer lists and
know-how, with respect to the portion of the Business related to the Agency
Purchased Assets that such Persons may learn or have learned by reason of their
employment by or their status as an Affiliate of the Sellers, and (B) each
Seller shall, and shall cause its respective Affiliates or Representatives to,
treat in confidence all confidential documents, materials and other information
which such Person obtained or had access to regarding Purchaser during the
negotiations leading up to the execution of this Agreement (or otherwise), or
obtains or has access to following the date of the Original Asset Purchase
Agreement, and each Seller shall not, and shall cause its respective Affiliates
or Representatives not to, share or communicate such documents, materials and
other information with any Person other than Purchaser; provided, that

 

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the foregoing clauses (A) and (B) shall not apply to any information that
(x) becomes generally available to the public other than as a result of a
disclosure by the Purchaser or its Representatives or (y) becomes available to
the Sellers on a non-confidential basis from a source other than the Purchaser
or its Representatives, provided, that such source is not known by the Sellers
to be bound by a confidentiality agreement with or other obligation of secrecy
to the Purchaser or another party.

(ii)    From and after the Second Closing, (A) each Seller shall not, and shall
direct its respective Affiliates and Representatives not to, disclose any trade
secrets, confidential or proprietary information, inventions (to the extent not
disclosed in published patent applications), methods, processes, formulae,
technology, algorithms, models, vendor lists, customer lists and know-how, with
respect to the Business that such Persons may learn or have learned by reason of
their employment by or their status as an Affiliate of the Sellers, and (B) each
Seller shall, and shall cause its respective Affiliates or Representatives to,
treat in confidence all confidential documents, materials and other information
which such Person obtained or had access to regarding Purchaser during the
negotiations leading up to the execution of this Agreement (or otherwise), or
obtains or has access to following the date of the Original Asset Purchase
Agreement, and each Seller shall not, and shall cause its respective Affiliates
or Representatives not to, share or communicate such documents, materials and
other information with any Person other than Purchaser; provided, that the
foregoing clauses (A) and (B) shall not apply to any information that
(x) becomes generally available to the public other than as a result of a
disclosure by the Purchaser or its Representatives or (y) becomes available to
the Sellers on a non-confidential basis from a source other than the Purchaser
or its Representatives, provided, that such source is not known by the Sellers
to be bound by a confidentiality agreement with or other obligation of secrecy
to the Purchaser or another party.

(d)    The Sellers (i) shall retain the Serviced Mortgage Loan Documents and
other books, records, documentation, files and other information or data
relating to completed Foreclosures occurring prior to the Applicable Closing
Date and (ii) may, at the option of the Sellers, retain copies of all other
books, records, documentation, manuals, files and information relating to the
Business, Purchased Assets or Assumed Liabilities during the period prior to the
Applicable Closing Date. Purchaser agrees that following the Applicable Closing
Date, the Sellers shall, together with their Representatives, have reasonable
access, during normal business hours, to the books, records, documentation,
manuals, files and other information or data of Purchaser to the extent they
relate to the Business, Purchased Assets or Assumed Liabilities during the
period prior to such Applicable Closing Date (and shall permit such Persons to
examine and copy, at their own expense, such documentation, manuals, files and
other information or data to the extent reasonably requested by such Party), and
shall cause the officers and employees of the Business to furnish (to the
Sellers or any of their Affiliates, or any regulator of any Seller or any of its
Affiliates) all information reasonably requested by, and otherwise cooperate
with (including causing employees to assist the Sellers or any of their
Affiliates by requiring such employees to avail themselves for trial,
depositions, interviews and other action-related litigation endeavors; provided,
however, that the Sellers shall pay all reasonable travel and other
business-related expenses of such employees incurred thereby in connection
therewith and, if any such employee spends greater than twenty percent (20%) of
his or her regular working hours assisting Sellers in connection therewith over
a period of five (5)

 

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days in any thirty (30) day period, Sellers shall pay all of Purchaser’s
compensation and benefits expense in respect of such employee for such period)
the Sellers or any of their Affiliates with respect to the Business, Purchased
Assets or Assumed Liabilities, in connection with regulatory compliance,
indemnification claim verification, pending or threatened Actions, financial
reporting and Tax matters (including financial and Tax audits and Tax contests)
and other similar business purposes. For a period required under the longer of
Purchaser’s record retention policy or ten (10) years from the Second Closing
Date (or, if the Second Closing does not occur, the First Closing Date),
Purchaser shall not destroy or dispose of or permit the destruction or
disposition of any such books, records, documentation, manuals, files and other
information or data without first offering, in writing, at least sixty (60) days
prior to such destruction or disposition to surrender them to the Sellers.

(e)    The Sellers agree that following the Applicable Closing Date, Purchaser
and its Representatives shall have reasonable access, during normal business
hours, to the books, records, documentation, manuals, files and other
information or data of the Sellers to the extent they relate to the Business,
Purchased Assets or Assumed Liabilities during the period prior to the
Applicable Closing Date (and shall permit such Persons to examine and copy, at
their own expense, such books, records, documentation, manuals, files and other
information or data of the Sellers to the extent reasonably requested by such
Party), and shall cause the officers and employees of the Sellers to furnish (to
Purchaser or any of its Affiliates, or any regulator of Purchaser or any of its
Affiliates) all information reasonably requested by, and otherwise cooperate
with (including causing employees to assist Purchaser or any of its Affiliates
by requiring such employees to avail themselves for trial, depositions,
interviews and other action-related litigation endeavors; provided, however,
that Purchaser shall pay all reasonable travel and other business-related
expenses of such employees incurred thereby in connection therewith and, if any
such employee spends greater than twenty percent (20%) of his or her regular
working hours assisting Purchaser in connection therewith over a period of five
(5) days in any thirty (30) day period, Purchaser shall pay all of Sellers’
compensation and benefits expense in respect of such employee for such period)
Purchaser with respect to the Business, Purchased Assets or Assumed Liabilities,
in connection with regulatory compliance, indemnification claim verification,
pending or threatened Actions, financial reporting and Tax matters (including
financial and Tax audits and Tax contests) and other similar business purposes.
For a period required under the longer of the Sellers’ record retention policy
or ten (10) years from the Second Closing Date (or, if the Second Closing does
not occur, the First Closing Date), the Sellers shall not destroy or dispose of
or permit the destruction or disposition of any such books, records,
documentation, manuals, files and other information or data without first
offering, in writing, at least sixty (60) days prior to such destruction or
disposition to surrender them to Purchaser.

(f)    To the extent that it is necessary or advisable for Purchaser or any of
its Affiliates to file with the U.S. Securities and Exchange Commission
historical financial statements or pro forma financial information with respect
to or relating to the Master Servicing Business or the Servicing Business
pursuant to the Securities Act of 1933, the Securities Exchange Act of 1934 or
any rule promulgated thereunder, the Sellers shall provide all reasonable
cooperation with respect to such matters, including (i) permitting Purchaser to
use any audited or unaudited financial statements available, (ii) facilitating
the delivery by the Sellers’ independent public accountants of any required
consents (including delivering customary representation letters by

 

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management to the accountants) and (iii) if any requested financial statements
are not available, at Purchaser’s request at any time after the date of this
Agreement, prepare such audited or unaudited financial statements, at
Purchaser’s sole expense.

Section 7.03    Supplements to Seller Disclosure Schedules.

From time to time up to three (3) Business Days prior to the Applicable Closing,
the Sellers may supplement or amend the Seller Disclosure Schedules with respect
to any matter which, if known, existing or occurring at or prior to the date of
this Agreement, would have been required to be set forth or described in the
Seller Disclosure Schedules or which is necessary to correct any information in
such Seller Disclosure Schedules which has been rendered inaccurate by an event,
condition, fact or circumstance occurring after the date of this Agreement. The
Sellers shall promptly notify Purchaser in writing of the supplement or
amendment of the Seller Disclosure Schedules. Any such supplemental or amended
disclosure will not amend the Seller Disclosure Schedules for purposes of
Section 8.02 and Section 10.02 and shall not obviate any of the Sellers’
obligations under Section 6.02.

Section 7.04    Efforts and Actions to Cause Each Closing to Occur; Consents.

(a)     Commercially Reasonable Efforts. Subject to the terms and conditions
herein provided, the Sellers and Purchaser shall use their respective
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do or cause to be done and cooperate with each other in order to do all
things, necessary, proper or advisable to cause the conditions to each Closing
to be satisfied, to consummate each Closing and to effectuate the transactions
contemplated by this Agreement and the Ancillary Agreements, including (i) the
preparation and filing of all consents, forms, registrations, notices and other
documentation required to be submitted to any Governmental Entities or other
third parties; provided, that neither the Sellers nor Purchaser shall be
obligated to make any material payment or deliver anything of material value to
any third party in connection with obtaining a Third Party Consent, (ii) seeking
to prevent the initiation of, and defend, any Action challenging this Agreement
or the consummation of either Closing, and (iii) causing to be lifted or
rescinded any Order adversely affecting the ability of the Parties to consummate
either Closing.

(b)     Consents and Approvals of Third Parties. In furtherance and not in
limitation of Section 7.04(a), the Sellers and Purchaser shall cooperate with
each other and shall use their respective commercially reasonable efforts to
obtain the Third Party Consents (other than the Servicing Agreement Consents)
and such other consents of third parties as are necessary to permit the sale,
transfer, assignment and conveyance to Purchaser of the Purchased Assets;
provided, however, that within five (5) Business Days following the date of the
Original Asset Purchase Agreement, the Sellers shall provide the required notice
to, and request the Third Party Consent of, the landlord of the Indianapolis
Leased Real Property, in each case pursuant to the lease agreement with respect
thereto. If such consent in respect of a Purchased Asset or an Assumed Liability
is not obtained prior to the Applicable Closing or does not remain in full force
and effect at the Applicable Closing, Purchaser and the Sellers will, to the
extent necessary, use commercially reasonable efforts to enter into a mutually
agreeable and lawful arrangement, including subcontracting, sublicensing or
subleasing, under which Purchaser would obtain the benefit and assume the
obligations in respect thereto from and after the Applicable Closing Date

 

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in accordance with this Agreement, and under which a Seller would enforce for
the benefit of Purchaser any and all rights of Purchaser against a third party
thereto, with Purchaser assuming the obligations to the same extent as if they
would have constituted an Assumed Liability.

(c)    Governmental Approvals. In furtherance and not in limitation of
Section 7.04(a), the Sellers and Purchaser shall cooperate with each other and
shall use their respective commercially reasonable efforts to promptly prepare
and file all necessary documentation to obtain the Governmental Approvals. The
Sellers and Purchaser will furnish each other and each other’s counsel with all
information concerning themselves, their respective subsidiaries, directors,
officers, stockholders or equityholders and such other matters as may be
necessary or advisable in connection with any application, petition or other
statement made by or on behalf of the Sellers or Purchaser to any Bank Regulator
or other Governmental Entity in connection with the Transactions. The Sellers
shall prepare and submit the necessary documentation to obtain the Seller
Required Governmental Approvals and Purchaser shall prepare and submit the
necessary documentation to obtain the Purchaser Required Governmental Approvals.
Each Party acknowledges that time is of the essence in connection with the
preparation and filing of the documentation referred to above. The Sellers and
Purchaser shall each have the right to review and approve in advance all
characterizations of the information relating to it and its subsidiaries which
appear in any filing made in connection with the Transactions with any
Governmental Entity and, to the extent practicable, the Sellers and Purchaser
shall provide to each other Party the non-confidential portions of any
application for approval being made in connection with the Transactions with any
Governmental Entity reasonably prior to the time such filing is made such that
such other Party’s reasonable comments may be considered in good faith by the
filing Party prior to making such filing. In addition, the Sellers and Purchaser
shall each furnish to the other a copy of each publicly available portion of
such filing made in connection with the Transactions with any Governmental
Entity promptly after its filing. The Sellers and Purchaser agree to (i) keep
each other reasonably informed of any communication received from, or given to,
any Governmental Entity regarding any Governmental Approval, and (ii) consult
with each other in advance of any meeting or conference with, any Governmental
Entity in respect of any Governmental Approval and, to the extent not prohibited
by such applicable Governmental Entity, give the other Party the opportunity to
attend and participate in such meetings and conferences.

(d)     HSR Act.

 (i)    In furtherance and not in limitation of Section 7.04(a), each Party
agrees, to the extent necessary, to file the appropriate notices, reports, and
other documents pursuant to the HSR Act and under any other antitrust Law with
respect to the Transactions as promptly as practicable (but, in respect of
filings pursuant to the HSR Act, in no event later than fifteen (15) Business
Days after the date of the Original Asset Purchase Agreement), and to supply as
promptly as practicable any additional information and documentary material that
reasonably may be requested pursuant to the HSR Act or any other antitrust Law
and, subject to the other terms hereof, to take all other actions necessary,
proper or advisable to cause the expiration or termination of the applicable
waiting periods under the HSR Act and the receipt of any of the requisite
clearances, approvals and authorizations under any other antitrust Law.

 

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(ii)     The Sellers and Purchaser shall, in connection with the efforts
referenced in Section 7.04(d)(i) to obtain any requisite clearances, approvals
and authorizations under the HSR Act and other antitrust Laws for the
Transactions, use their respective commercially reasonable efforts to
(A) cooperate with each other in connection with any filing or submission under
the HSR Act or any other antitrust Law; (B) keep the other Parties reasonably
informed of any communication received from, or given to, any Governmental
Entity regarding any requisite clearances, approvals and authorizations of such
Governmental Entity in respect of the Transactions contemplated hereby; and
(C) permit the other Parties to review in advance on an outside counsel only
basis any written communication given by it to, and consult with each other in
advance of any meeting or conference with, any Governmental Entity in respect of
the HSR Act or any other antitrust Laws and, to the extent not prohibited by
such applicable Governmental Entity, give the other Parties the opportunity to
attend and participate in such meetings and conferences.

(iii)     Purchaser, on the one hand, and the Sellers, on the other hand, agree
not to extend any waiting period under the HSR Act or enter into any agreement
with any Governmental Entity not to consummate the Transactions for any period
of time, except with the prior written consent of the other, which consent shall
not be unreasonably withheld, conditioned or delayed.

Section 7.05     Financing.

(a)     Purchaser shall use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to arrange and obtain the Financing as promptly as reasonably
practicable on the terms and subject only to the conditions contained in the
Financing Commitments. Purchaser shall not permit any amendment or modification
to be made to, or any waiver of any provision or remedy under, the Financing
Commitments (except for any such amendments, modifications or waivers which,
individually or in the aggregate, would not be reasonably expected to prevent,
delay or impair the availability of the Financing under the Financing
Commitments or the consummation of the Transactions) without the prior written
consent of the Sellers, which consent shall not be unreasonably withheld,
conditioned or delayed. Without limiting the generality of the foregoing,
Purchaser shall use reasonable best efforts to (i) maintain in effect the
Financing Commitments, (ii) satisfy on a timely basis (or obtain the waiver of)
all conditions applicable to Purchaser in the Financing Commitments that are
within its control and otherwise comply with its covenants and other obligations
thereunder, (iii) negotiate with the Lenders and other third parties and enter
into definitive agreements with respect to the Financing on the terms and
subject only to the conditions contemplated by the Financing Commitments,
(iv) consummate the Financing (or a portion thereof) at or prior to the
Applicable Closing, (v) enforce its rights under the Financing Commitments in
the event of a breach or other failure to fund by a Lender that impedes or
delays the Applicable Closing, and (vi) otherwise cause the Lenders to fund on
the Applicable Closing Date the Financing (or a portion thereof) required to
consummate the transactions to be consummated at the Applicable Closing
(including taking enforcement action to cause the Lenders to provide the
Financing); provided, that Purchaser shall not be required to agree to terms and
conditions that are, in the aggregate, materially less favorable to Purchaser
than those set forth in the Financing Commitments. Upon the reasonable request
of the Sellers, Purchaser

 

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shall inform the Sellers of the status of its efforts to arrange the Financing
and any material developments relating to the Financing. Without limiting the
generality of the foregoing, Purchaser shall give the Sellers prompt notice:
(A) upon becoming aware of any material breach or default (or any event or
circumstance that, with or without notice, lapse of time or both, could
reasonably be expected to give rise to any material breach or default) by
Purchaser, or to the Knowledge of Purchaser, any other party to any Financing
Commitment or definitive document related to the Financing; (B) of the receipt
of any written notice or other written communication from any Person with
respect to any (x) actual or potential breach, default, termination or
repudiation by any party to any Financing Commitment or any definitive document
related to the Financing of any provisions of any Financing Commitment or any
definitive document related to the Financing or (y) material dispute or
disagreement between or among any parties to any Financing Commitment or any
definitive document related to the Financing; and (C) if for any reason
Purchaser believes in good faith that (x) there is a reasonable likelihood to be
a material dispute or disagreement between or among any parties to any Financing
Commitment or any definitive document related to the Financing or (y) it is
reasonably likely that it will not be able to obtain all or any portion of the
Financing on the terms, in the manner or from the sources contemplated by the
Financing Commitments or the definitive documents related to the Financing. As
soon as reasonably practicable, but in any event within five (5) Business Days
after the date the Sellers deliver to Purchaser a written request, Purchaser
shall provide any information reasonably requested by the Sellers relating to
any circumstance referred to in clause (A), (B) or (C) of the immediately
preceding sentence. Purchaser shall refrain from taking, directly or indirectly,
any action that is reasonably likely to result in the failure of any conditions
contained in the Financing Commitments or any definitive agreement related
thereto. If any portion of the Financing becomes unavailable on the terms and
conditions contemplated in the Financing Commitments, Purchaser shall use its
reasonable best efforts to arrange and obtain financing as promptly as
practicable from alternative sources in an amount sufficient to replace the
Financing as promptly as practicable and without the imposition of any new or
additional conditions and without any adverse amendment to existing conditions
to the Financing, and Purchaser’s obligations under this Section 7.05(a) shall
apply to such alternative financing and the agreements related thereto as if
such alternative financing is the Financing and any commitment related thereto
is the Financing Commitments; provided, that Purchaser shall not be required to
agree to terms and conditions with respect to any alternative financing that
are, in the aggregate, materially less favorable in any material respect to
Purchaser than those set forth in the Financing Commitments.

(b)     Prior to the Applicable Closing, the Sellers shall use their
commercially reasonable efforts to provide, and shall use their commercially
reasonable efforts to cause their Affiliates and their respective officers,
directors, employees and agents to provide, at Purchaser’s sole cost and
expense, all reasonable cooperation in connection with the arrangement of the
Financing as may be reasonably requested by Purchaser and that is customary in
connection with Purchaser’s efforts to obtain the Financing, including to
(i) provide readily-available financial and other information relating to the
Sellers to the Lenders (including information to be used in the preparation of
an informational package regarding the business, operations, financial
projections and prospects of Purchaser and the Business and Purchased Assets
which is customary for such financing or reasonably necessary for the completion
of the Financing by the Lenders, to the extent reasonably requested by Purchaser
(including prior real estate title commitments, surveys, environmental reports
and similar information), (ii) assist in the

 

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preparation of bank information memoranda and similar documents (including
historical and pro forma financial statements and information) for the
Financing, (iii) cause the Sellers and their Affiliates to execute and deliver
(and use commercially reasonable efforts to obtain from the Sellers’ and their
Affiliates’ advisors) at, or conditional upon, the Applicable Closing customary
certificates (including a certificate of the principal financial officer of each
of the Sellers with respect to solvency matters), accounting comfort letters
(including consents of accountants for use of their reports in any materials
relating to the Financing) or other documents and instruments relating to
guarantees and other matters ancillary to the Financing as may be reasonably
requested by Purchaser, (iv) assist in the preparation of, entering into and,
upon reasonable prior notice to the extent related to the participation in
meetings, presentations, drafting sessions or similar activities, syndication of
one or more credit agreements, note purchase agreements, indentures, currency or
interest hedging agreements or other agreements, including by refraining from
entering into any competing financing transactions, (v) use commercially
reasonable efforts to have the independent accountants of the Sellers provide
their reasonable cooperation and assistance, (vi) cooperate reasonably with the
Lenders’ due diligence, to the extent customary and reasonable, (vii) refrain
from pursuing any financing transactions that may delay, impede or otherwise
adversely affect the Financing and (viii) assist Purchaser and the Lenders to
benefit from the existing lending relationships of the Sellers and their
Affiliates; provided, however, that no requested cooperation pursuant to this
Section 7.05(b) shall delay the Applicable Closing, or unreasonably interfere
with the ongoing operations of Sellers and the Sellers shall not (A) be required
to pay any commitment or other similar fee, (B) have any Liability under any
credit agreement, note purchase agreement, indenture, hedging agreement or other
agreement or document related to the Financing, or (C) incur any out-of-pocket
expense unless such expense is advanced or simultaneously reimbursed by
Purchaser (without set-off). Purchaser shall, without the right of set-off,
indemnify and hold harmless Sellers and their respective subsidiaries and
Representatives from and against any and all Losses suffered or incurred by them
in connection with (1) any action taken by them at the request of Purchaser
pursuant to this Section 7.05(b) or in connection with the arrangement of the
Financing or (2) any information utilized in connection therewith (other than
information relation to Sellers approved by Sellers for use therein). This
indemnification shall survive termination of this Agreement. All material,
non-public information regarding Sellers and their Affiliates provided to
Purchaser or its Representative pursuant to this Section 7.05(b) shall be kept
confidential by them in accordance with the Confidentiality Agreement, except
for disclosure to potential investors as required in connection with the
Financing subject to customary confidentially protections.

Section 7.06     Transfer of Assumed Contracts.

The Sellers shall use commercially reasonable efforts to cause the transfer or
partial transfer, as the case may be, to Purchaser of each of the Assumed
Contracts, the Real Property Leases, and each Contract for Seller Licensed
Intellectual Property. In connection with this Section 7.06, neither the Sellers
nor any of their Affiliates shall consent to any material modification of any
Assumed Contract, the Real Property Leases, or any Contract for Seller Licensed
Intellectual Property or otherwise obligate Purchaser or any of its Affiliates
to take or omit to take any material action after the Second Closing without the
prior written consent of Purchaser in respect of such Contracts (except in
accordance with the terms of such Contracts in effect as of the date of the
Original Asset Purchase Agreement or when entered into).

 

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Section 7.07    Failure to Fulfill Conditions.

In the event that any Seller or Purchaser determines that a condition to its
obligation to complete the Transactions cannot be fulfilled and that it will not
waive that condition, it will promptly notify the other Parties; provided, that
no such notification or failure to provide such notification shall affect in any
way any party’s rights pursuant to Article VIII or Article X hereunder.

Section 7.08    Employee Matters

(a)     With respect to Master Servicing Employees only, the list of Business
Employees, along with the information specified in Section 4.13(a), shall be
updated by Sellers in writing, and delivered to the Purchaser prior to, and as
of five (5) Business Days before, the Continuing Employee Transfer Date. For
purposes of this Agreement, the term “Master Servicing Employee” shall be
considered to include each employee included on such updated list, as so updated
from time to time.

(b)    Purchaser or an Affiliate thereof shall offer employment effective on and
following the Continuing Employee Transfer Date to each and every Master
Servicing Employee who is employed by the Sellers immediately prior to the
Continuing Employee Transfer Date, for work at the location of such Master
Servicing Employee’s workplace immediately prior to the Continuing Employee
Transfer Date, or at a location within twenty-five (25) miles of such location.
Each such Master Servicing Employee who accepts such offer, becomes an employee
of Purchaser or one of its Affiliates, and actually performs services for
Purchaser or one of its Affiliates, in each case in connection with the
Transactions, shall be referred to herein as a “Continuing Employee”. Such
employment of each Continuing Employee shall in each case initially be with a
title or in a position comparable to the title or position of such Continuing
Employee with the applicable Seller as of the date of the Original Asset
Purchase Agreement and with total cash compensation and total compensation and
benefits substantially equivalent to the total cash compensation and total
compensation and benefits, respectively, of such Master Servicing Employee with
the applicable Seller as of the date of the Original Asset Purchase Agreement,
as the same may be adjusted after the date of the Original Asset Purchase
Agreement in the ordinary course of business consistent with past practice or as
required by applicable Law and reflected in updates to information thereon
specified in Section 4.13(a), as updated consistent with this Section 7.08 from
time to time (the “Baseline Compensation”); provided that the Purchaser may
elect to adjust the Baseline Compensation as of the Continuing Employee Transfer
Date by increasing or decreasing the annual rate of each Continuing Employee’s
total cash compensation by the amount of any corresponding increase or decrease
in the annual rates of employee contributions to group health plans applicable
to such Continuing Employee. Except as otherwise provided herein, all Continuing
Employees will be employed at will and nothing contained herein shall restrict
the Purchaser in the future exercise of its independent business judgment as to
the terms and conditions under which employment shall continue, the duration of
such employment and the basis upon which such employment is terminated.

(c)    Purchaser hereby expressly assumes and agrees to honor, effective from
and for twelve (12) months after the Continuing Employee Transfer Date, each of
the separation and retention pay plans of the Sellers disclosed in
Section 7.08(c) of the Seller Disclosure Schedules

 

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in accordance with their respective terms as of the date of this Agreement (as
modified in the ordinary course of business consistent with past practice or as
required by applicable Law), with respect to each Continuing Employee. For a
period of not less than twelve (12) months following the Continued Employee
Transfer Date, Purchaser shall provide each Continuing Employee with total cash
compensation that is not less favorable and total compensation and benefits that
are in the aggregate not less favorable than the corresponding components of
such Continuing Employee’s Baseline Compensation. To the extent requested by
Purchaser, the Sellers shall provide commercially reasonable cooperation to
Purchaser to facilitate Purchaser’s assumption or adoption of one or more of the
Employee Benefit Plans of the Sellers (or portions thereof) that cover
Continuing Employees as of the Continuing Employee Transfer Date.

(d)    To the extent that, from or after the Continuing Employee Transfer Date,
one or more Continuing Employees are covered under one or more retirement or
welfare plans of Purchaser or its Affiliates, such employees shall participate
in such plans on terms and conditions not materially less favorable in the
aggregate than those applicable to other similarly situated employees of
Purchaser or its Affiliates. Purchaser shall cause those Continuing Employees
who are covered under medical, dental, group life or long-term disability
insurance or other welfare plans of the Sellers to be eligible to enroll for
coverage that is effective immediately following the Continuing Employee
Transfer Date in comparable plans of Purchaser or its Affiliates for which they
are eligible. No evidence of insurability requirement or prior existing
condition limitation not currently imposed by a medical, dental, group life or
long-term disability insurance or other welfare plan of the Sellers shall be
imposed on Continuing Employees with respect to a comparable medical, dental,
group life or long-term disability insurance or other welfare plan of Purchaser
or its Affiliate. All Continuing Employees shall receive credit under medical,
dental or other welfare plans of Purchaser or its Affiliate in which they
participate for any applicable deductibles, co-payments, co-insurance and
applicable out-of-pocket amounts paid under corresponding Seller plans;
provided, that Sellers promptly provide to Purchaser all information necessary
to effectuate the intent of the foregoing. All Continuing Employees will be
given credit for prior service to the Sellers and any predecessors thereto for
purposes of determining eligibility and vesting (but not for determining benefit
accrual) under (i) medical, life, vacation, sick leave, disability and other
welfare plans; (ii) retirement plans; and (iii) compensation plans, of Purchaser
or its Affiliates, but only to the extent (A) as would not result in a
duplication of benefits and (B) the Sellers promptly provide to Purchaser all
information necessary to effectuate the intent of the foregoing.

(e)    Purchaser agrees to assume responsibility for, and honor, all earned,
unused vacation, paid time off and (if applicable) sick days of the Continuing
Employees upon their commencement of employment with Purchaser in accordance
with the terms of the Sellers’ vacation, paid time off and sick pay policy. In
no event shall Purchaser have any responsibility or liability for payment of any
vacation, paid time off or sick days earned by a Master Servicing Employee who
is not a Continuing Employee during his or her employment with the Sellers. The
Sellers shall also be responsible for providing any required advance notice of
termination, pursuant to the WARN Act or any other similar state or local Law or
any other requirement to any Master Servicing Employee who experiences an
“employment loss” on or prior to the Continuing Employee Transfer Date, other
than with respect to any Master Servicing Employee who is employed by the
Sellers immediately prior to the Continuing Employee Transfer Date and is either
(i) not offered employment by Purchaser or an Affiliate thereof pursuant to
Section

 

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7.08(b) or (ii) does not commence employment with Purchaser or an Affiliate
thereof despite such Master Servicing Employee accepting an offer of employment
made pursuant to Section 7.08(b). Purchaser shall assume responsibility for
providing any required advance notice of termination, pursuant to the WARN Act
or any other similar state or local Law or any other requirement to any Master
Servicing Employee who is employed by the Sellers immediately prior to the
Continuing Employee Transfer Date.

(f)    The Sellers shall be responsible for providing or continuing to provide,
as applicable, continuation coverage required under COBRA to all current and
former employees of the Sellers other than Continuing Employees and their
respective dependents.

(g)    The Sellers shall cause, effective as of the Continuing Employee Transfer
Date, each Continuing Employee to become fully vested in his or her account
balance under the Aurora Bank FSB 401(k) Plan (the “Seller 401(k) Plan”). To the
extent requested by Purchaser and not already provided for under the Seller
401(k) Plan, the Sellers shall use commercially reasonable efforts under the
circumstances to amend, or cause to be amended, the Seller 401(k) Plan to
provide for, with respect to any Continuing Employee who elects a “direct
rollover” of his or her full account balance, the distribution and rollover of
any promissory note evidencing a loan outstanding under the Seller 401(k) Plan.

(h)    Notwithstanding the foregoing provisions of this Section 7.08, nothing
contained herein, whether expressed or implied, (i) shall be treated as an
amendment or other modification of any employee benefit plan, program or
arrangement maintained by any Seller, Purchaser or any of their respective
Affiliates, (ii) shall limit the right of any Seller or Purchaser or any of
their respective Affiliates to amend, terminate or otherwise modify (or cause to
be amended, terminated or otherwise modified) any employee benefit plan, program
or arrangement in accordance with its terms, or (iii) create any obligation on
the part of Purchaser or any of its Affiliates to continue the employment of any
employee for any definite period. Each Seller and Purchaser acknowledge and
agree that all provisions contained in this Section 7.08 are included for the
sole benefit of such Seller and Purchaser and their respective Affiliates, and
that nothing herein, whether express or implied, shall create any third party
beneficiary or other rights (i) in any other person, including any employees,
former employees, or any participant (or any dependent or beneficiary thereof)
in any employee benefit plan, program or arrangement maintained by Purchaser or
any of its Affiliates or (ii) to continued employment with any Seller, Purchaser
or any of their respective Affiliates or continued participation in any employee
benefit plan, program or arrangement.

Section 7.09    Tax Matters.

All stamp, recordation, transfer, excise, documentary, sales, use, registration
and other such taxes and fees (including any penalties and interest) incurred in
connection with this Agreement and the Transactions (collectively, the “Transfer
Taxes”) shall be paid 50% by Purchaser and 50% by the Sellers. Purchaser shall
properly file on a timely basis all necessary Tax Returns and other
documentation with respect to any Transfer Tax and provide to the Sellers
evidence of timely filing and payment of all Transfer Taxes. The Sellers shall
provide any necessary documentation in connection with such Transfer Taxes
relating to the Owned Real Property to Purchaser.

 

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Section 7.10    Covenants Relating to Servicing and Master Servicing.

(a)    Transfer. Without limiting any other provision of this Agreement, on each
Servicing Transfer Date, the Sellers shall, in accordance with Purchaser’s
reasonable instructions, take all steps, and execute and deliver all such
agreements, letters or other documents, as are reasonably requested by Purchaser
to effect the transfer of the Master Servicing Agreements, Servicing Agreements,
Subservicing Agreements and Servicing Rights Agreements (and the related
Purchased Assets) from the Sellers to Purchaser such that, after such Servicing
Transfer Date, Purchaser has all of the Master Servicing Rights, Servicing
Rights, the Subservicing Rights, the Servicing Loan Files and any and all assets
and rights necessary to perform its obligations under such Master Servicing
Agreements, Servicing Agreements, Subservicing Agreements and Servicing Rights
Agreements.

(b)    Servicing Agreement Consents and Notices. From the date of the Original
Asset Purchase Agreement through the Second Closing Date, Sellers and Purchaser
shall use commercially reasonable efforts to obtain all Servicing Agreement
Consents, including, without limitation, any PSA Amendments that are necessary
to cause a Servicing Agreement or Subservicing Agreement to be deemed an
Eligible Servicing Agreement, which PSA Amendments shall, if necessary, be
through an agreement, consent or other instrument that is separate from any
Servicing Agreement Consent. The Sellers shall use commercially reasonable
efforts to mail the required consent requests to the applicable third parties,
by April 6, 2012. Following the Second Closing Date, Purchaser shall use
commercially reasonable efforts to obtain any Servicing Agreement Consent that
has not been obtained as of the Second Closing Date (which efforts shall include
without limitation the obligation to continue to seek to obtain any rating
agency “no downgrade” letters as may otherwise be required under the applicable
Servicing Agreements as a condition to receive the Servicing Agreement
Consents), and the Sellers shall reasonably cooperate with Purchaser in
connection therewith. Prior to each Servicing Transfer Date, Purchaser and the
Sellers shall execute (or cause to be executed) and deliver the documents
required by the Investors in connection with the transfer of the Servicing
Rights, the Servicing Agreements, the Servicing Rights Agreements and the
Subservicing Agreements hereunder, in form and substance reasonably satisfactory
to Purchaser and the Sellers. In addition, from the date of the Original Asset
Purchase Agreement until the Second Closing Date, the Sellers shall use
commercially reasonable efforts to provide all notices to third parties required
under the Servicing Agreements, the Subservicing Agreements, the Servicing
Rights Agreements or the Master Servicing Agreements in connection with the
Transactions. From the Second Closing Date until the date that is twelve
(12) months following the Second Closing Date, Purchaser shall provide to the
Sellers a report and reasonable evidence on a periodic basis, no less frequently
than monthly, of its receipt of the Servicing Agreement Consents.

(c)    Monthly Information. During the period between the date of the Original
Asset Purchase Agreement and the Second Closing Date, within ten (10) Business
Days after the end of each calendar month, the Sellers shall provide Purchaser
with (i) an updated servicing data file as of the prior month-end regarding the
Serviced Mortgage Loans containing, with respect to each Serviced Mortgage Loan,
the information of the same categories and in the same format as in the Serviced
Mortgage Loan Data Tape (the “Monthly Serviced Mortgage Loan Data Tape”), and
(ii) an updated master servicing data file as of the prior month-end regarding
the Master

 

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Serviced Mortgage Loans containing, with respect to each Master Serviced
Mortgage Loan, the information of the same categories and in the same format as
in the Master Servicing Data Tape (the “Monthly Master Servicing Data Tape”).

(d) Cut-off Date Servicing Rights Data Tape. (i) The Sellers shall deliver not
later than two (2) Business Days prior to the First Closing Date an updated data
tape, as of the Cut-off Date (the “First Closing Cut-off Date Servicing Rights
Data Tape”), containing the information of the same categories and same format
as in the Serviced Mortgage Loan Data Tape with respect to the Agency Purchased
Assets, and (ii) the Sellers shall deliver not later than three (3) Business
Days prior to the Second Closing Date an updated data tape, as of the Cut-off
Date (the “Second Closing Cut-off Date Servicing Rights Data Tape”), containing
the information of the same categories and same format as in the Serviced
Mortgage Loan Data Tape with respect to the Non-Agency Purchased Assets. All the
information included in such data tapes will be true and correct in all material
respects as of the applicable Cut-off Date.

(e) Cut-off Date Servicer Advance Data Tape. (i) The Sellers shall deliver not
later than two (2) Business Days prior to the First Closing Date an updated data
tape, as of the Cut-off Date (the “First Closing Cut-off Date Servicer Advance
Data Tape”), containing the information of the same categories and same format
as in the Servicer Advance Data Tape with respect to the Agency Purchased Assets
and (ii) the Sellers shall deliver not later than three (3) Business Days prior
to the Second Closing Date an updated data tape, as of the Cut-off Date (the
“Second Closing Cut-off Date Servicer Advance Data Tape”), containing the
information of the same categories and same format as in the Servicer Advance
Data Tape with respect to the Non-Agency Purchased Assets, except in each case
for the P&I Advances (as defined in the applicable Servicing Agreement,
Subservicing Agreement, Master Servicing Agreement or Servicing Rights Agreement
or any other similar term therein) data presented in the First Closing Cut-off
Date Servicer Advance Data Tape and Second Closing Cut-off Date Servicer Advance
Data Tape, which will be current for each applicable Servicing Agreement,
Subservicing Agreement, Master Servicing Agreement and Servicing Rights
Agreement as of the most recent investor reporting monthly cut-off date that
occurred at least five (5) Business Days prior to such Cut-off Date for each
such Servicing Agreement, Subservicing Agreement, Master Servicing Agreement and
Servicing Rights Agreement. All the information included in such data tapes will
be true and correct in all material respects as of the applicable Cut-off Date.

(f) Name Changes. As soon as practicable after each Servicing Transfer Date, the
Sellers and Purchaser agree to take all such actions as are required, in
accordance with Purchaser’s reasonable instructions, to change the named party
to Purchaser or its designee on documents related to the Servicing Agreements,
Servicing Rights Agreements and Subservicing Agreements that are currently in
the name of a Seller, in its capacity as Servicer, including on all financing
statements and insurance policies.

(g) Notice to Mortgagors. If required by Applicable Servicing Requirements, the
Sellers and Purchaser each shall send the Serviced Mortgagors notification
(which may be a joint notification) of the transfer of the Servicing function,
which shall comply in all material respects with all Applicable Servicing
Requirements, including the Real Estate Settlement Procedures Act, as amended,
and Regulation X, as amended. At least fifteen (15) days prior to each
anticipated Servicing Transfer Date and otherwise in accordance with Applicable
Servicing

 

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Requirements, the Sellers shall mail the form of notification (which shall be in
form and substance reasonably satisfactory to Purchaser) to the Serviced
Mortgagors under the Serviced Mortgage Loans of the transfer of the applicable
Servicing and instruct the Serviced Mortgagors to deliver all Mortgage Loan
Payments and related payments and all tax and insurance notices to, or as
directed by, Purchaser on and after such Servicing Transfer Date. The Sellers
and Purchaser each shall bear their own costs and expenses of preparing and
delivering their respective notices described in this Section 7.10(g), and the
Sellers, on the one hand, and Purchaser, on the other hand, shall each bear
one-half (1/2) of any joint expenses, such as the printing and mailing of a
joint notice.

(h)    Forwarding of Post-Closing Date Items. All Mortgage Loan Payments, other
funds or payments used to pay bills that relate to Serviced Mortgage Loans
received by the Sellers after the Servicing Transfer Date shall be forwarded by
the Sellers to Purchaser within two (2) Business Days after receipt and proper
identification by overnight mail or wire transfer for sixty (60) days after such
Servicing Transfer Date with proper identification and, thereafter, shall return
such items to the sender. Each Mortgage Loan Payment shall be accompanied by an
endorsement assigning such Mortgage Loan Payment to Purchaser. All Serviced
Mortgagor, Investor and Insurer correspondence, Tax or other bills or other
correspondence or documentation relating to any of the Serviced Mortgage Loans
received by the Sellers after such Servicing Transfer Date shall be forwarded by
the Sellers to Purchaser within two (2) Business Days after receipt and proper
identification by overnight mail or wire transfer for ninety (90) days after the
such Servicing Transfer Date.

(i)     Conversion Plan.

(i)    The Sellers and Purchaser shall work together in good faith to develop a
plan prior to the First Closing Date (the “Conversion Plan”) to effect, from and
after each Servicing Transfer Date, the orderly transfer of the Servicing Loan
Files, the physical transfer of Servicing, and the provision of customary
notices to taxing authorities, insurance providers, escrow arrangements and the
like. Without limiting the foregoing, such Conversion Plan shall provide that
the Sellers shall notify each relevant vendor of services of the transfer
contemplated hereby. Each of Purchaser and the Sellers shall use commercially
reasonable efforts to agree upon and implement the Conversion Plan.

(ii)    Upon reasonable request by Purchaser and subject to the terms and
conditions of this Agreement, the Sellers shall prepare, execute and furnish
Purchaser with such limited powers of attorney to execute documents on behalf of
the Sellers in respect of the related Serviced Mortgage Loan Documents and such
other documents prepared by Purchaser and reasonably satisfactory in form and
substance to the Sellers as may be necessary or appropriate to enable Purchaser
to liquidate, collect payments against and otherwise service and manage the
Serviced Mortgage Loans, Serviced Mortgaged Properties and Serviced REO
Properties in accordance with the related Servicing Agreements and Subservicing
Agreements.

(j)    Servicing of REO Property. To the extent the Sellers holds title to a
Serviced REO Property solely as nominee for the benefit of the owner of the
Serviced Mortgage Loan, with respect to each such Serviced REO Property, the
Sellers shall transfer, or cause to be transferred, to Purchaser an original,
executed quit claim deed, in recordable form on or prior to the Applicable
Closing Date.

 

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(k)     MERS Mortgage Loans. With respect to each Serviced Mortgage Loan
registered on the MERS System, the Sellers shall notify MERS of the transfer of
servicing of such Serviced Mortgage Loan to Purchaser. All expenses incurred in
compliance with this Section 7.10(k) shall be allocated 50% to Purchaser and 50%
to the Sellers. With respect to each Serviced Mortgage Loan that is not
registered on the MERS System, the Sellers shall deliver such notices,
assignments and other documentation as is necessary to effect the transfer of
servicing of such Serviced Mortgage Loan to Purchaser and the transactions
contemplated hereby.

(l)     Costs of Transfer. Except as otherwise provided herein:

(i)    the Sellers shall be responsible for all costs and expenses of obtaining
the Servicing Agreement Consents and providing required notices to the Investors
or other Persons in connection with the transfer of the Servicing Agreements,
the Subservicing Agreements and the Servicing Rights Agreements; and

(ii)    the Sellers, on the one hand, and Purchaser, on the other hand, shall
each be responsible for 50% of all costs and expenses with respect to obtaining
and transferring the Servicing Rights (excluding the costs and expenses of
obtaining any Servicing Agreement Consents and providing required notices
contemplated by clause (i) above).

(m)         Serviced Mortgage Loans in Litigation.

(i)    With respect to any Serviced Mortgage Loan that, as of the Applicable
Closing Date, is subject to any pending litigation that is to be assumed by
Purchaser pursuant to Section 2.02(a)(vii) as of such Applicable Closing Date
(the “Assumed Litigation”) and is a Foreclosure in which a Seller is a party
plaintiff (a “Foreclosure Action”), Purchaser shall have its attorney file
appropriate pleadings and other documents and instruments with the court or
other appropriate body within one hundred twenty (120) days after the Applicable
Closing Date, requesting that the Seller be removed as a party plaintiff to
litigation and substituting Purchaser, the Investor with respect to such
Serviced Mortgage Loan or another appropriate party plaintiff (“New Plaintiff”),
as the real party-in-interest. If Purchaser is unable, as a matter of applicable
Law, due to the actions or inactions of third parties unrelated to Purchaser and
over whom Purchaser has no control, to cause the Sellers to be replaced by a New
Plaintiff in Assumed Litigation as required by this Section 7.10(m)(i),
Purchaser shall provide to the Sellers, within one hundred twenty (120) days
after the Applicable Closing Date, notice to such effect and stating the reasons
for such failure. Notwithstanding the foregoing, Purchaser shall not be required
to request a New Plaintiff to be substituted for a Seller as the party plaintiff
in a Foreclosure Action if Purchaser determines in its reasonable discretion
that such substitution is not necessary or advisable to complete the
foreclosure.

(ii)    With respect to any Assumed Litigation in which Seller is only a
defendant, Purchaser shall not be required to take any action to request that
Purchaser or

 

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any other Person be substituted for a Seller in such Assumed Litigation.
Purchaser shall conduct and control all Assumed Litigation on behalf of Seller
from and after the Applicable Closing Date, except to the extent that a New
Plaintiff is substituted in for a Seller in cases where no claims have been
asserted against a Seller, and subject to the provisions of Article X.

(iii)     In the event that Purchaser is unable to cause the Sellers to be
replaced in any Assumed Litigation by a New Plaintiff as required by this
Section 7.10(m), (A) Purchaser shall cause its attorney to conduct such
litigation at Purchaser’s sole cost and expense, subject to Article X of this
Agreement; (B) Purchaser shall use commercially reasonable efforts to cause such
litigation to be resolved by judgment or settlement in as reasonably efficient a
manner as practical; (C) the Sellers shall cooperate with Purchaser and
Purchaser’s attorney as reasonably required to bring such litigation or any
settlement relating thereto to a reasonable and prompt conclusion; and (D) no
settlement shall be agreed upon by Purchaser or its agents or counsel without
the express prior written consent of the Sellers, which consent will not be
unreasonably withheld, unless such settlement includes an irrevocable and
complete waiver and release of any and all potential claims against the Sellers
in relation to such litigation or the subject Serviced Mortgage Loans or
obligations by any Person asserting any claim in the litigation and any Serviced
Mortgagor, and any and all losses, liabilities, claims, causes of action,
damages, demands, taxes, fees, costs and expenses relating thereto shall be paid
by Purchaser without recourse of any kind to the Sellers, except as provided in
Article X.

(iv)     Purchaser shall pay all of the costs and expenses incurred by it in
connection with the actions required to be taken by it pursuant to this
Section 7.10(m), including all legal fees and expenses and court costs, except
as otherwise provided in Article X, and except that the costs and expenses of
the substitution of party plaintiffs contemplated by Section 7.10(m)(i) shall be
divided equally between Purchaser and the Sellers.

(n)     Mortgage Loans in Bankruptcy. In accordance with Rules 3001 and 3002 set
forth under the Federal Rules of Bankruptcy Procedure, Purchaser agrees to take
all actions necessary to file (i) proofs of claims in pending bankruptcy cases
involving any Serviced Mortgage Loans for which the Sellers have not already
filed a proof of claim prior to the claims bar date, and (ii) all documents
required under Rule 3001 set forth under the Federal Rules of Bankruptcy
Procedure and to take all such similar actions as may be required in any
relevant jurisdiction in any pending bankruptcy or insolvency case or proceeding
in such jurisdiction involving any Serviced Mortgage Loan in order to evidence
and assert Purchaser’s rights. Purchaser shall prepare and provide to the
Sellers, within thirty (30) Business Days after the applicable Servicing
Transfer Date, an Affidavit and Assignment of Claim or any similar forms as may
be required in any relevant foreign jurisdiction and shall be acceptable to the
Sellers, for each Serviced Mortgage Loan where a Serviced Mortgagor under such
Serviced Mortgage Loan is in bankruptcy as of the applicable Servicing Transfer
Date.

(o)     Notice of Claim. Each Party shall promptly notify the other Parties of
any claim, threatened claim or litigation against a Seller, the Purchaser or any
of their respective employees, officers, agents and representatives arising out
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Loan or Servicing Rights purchased by Purchaser that may come to its attention.
For the avoidance of doubt, each Party shall retain all of its rights and
remedies under Article X in respect of such claim regardless of such notice.

(p)    Interest on Escrow Accounts. The Sellers shall pay interest on Escrow
Accounts accrued through the Applicable Closing to the extent interest with
respect to such accounts is required to be paid under Applicable Servicing
Requirements for the benefit of Serviced Mortgagors under the Serviced Mortgage
Loans or any other appropriate party. The Sellers shall either deposit any such
interest earned in the Escrow Accounts or forward a good faith estimate of such
interest to Purchaser or its designee within five (5) Business Days after the
Applicable Closing.

(q)    Unremitted Collections; Escrow Accounts and Custodial Accounts. Escrow
funds, custodial funds and other amounts or balances related to the Serviced
Mortgage Loans or the Master Serviced Mortgage Loans on deposit in Escrow
Accounts, Master Servicing Custodial Accounts, Custodial Accounts or other
accounts held or controlled by the Sellers pursuant to the Servicing Agreements,
the Subservicing Agreements or the Master Servicing Agreements shall be
transferred by the Sellers, along with the related accounts, to Purchaser on the
Applicable Closing Date. All such funds and related accounts shall become the
responsibility of Purchaser when transferred by the Sellers.

(r)    Advance Financing. The Parties shall cooperate and use commercially
reasonable efforts, including obtaining necessary consents from third parties,
to cause the Servicing Agreements and Subservicing Agreements to be deemed
Eligible Servicing Agreements. All expenses incurred by the Parties in
connection with the actions required by this 7.10(r) shall be paid 50% by
Purchaser and 50% by the Sellers.

(s)    Notice to Insurers, Tax Authorities and Bankruptcy Trustees. Within five
(5) Business Days after each Servicing Transfer Date, the Sellers shall, in
accordance with applicable Insurer requirements, provide written notice of the
transfer to any Insurer requiring such notice; provided, however, that the
Sellers may give aggregate notice whenever possible. The Sellers shall notify
tax-bill services of the transfer. The form of all notices by the Sellers
pursuant to this Section 7.10(s) shall be subject to the review and reasonable
approval of the Purchaser.

(t)    Releases. After the Applicable Closing, at the direction of the Sellers,
Purchaser shall complete the process of preparing, recording and providing to
Serviced Mortgagors lien releases with respect to Serviced Mortgage Loans
serviced or subserviced by the Sellers prior to and paid off as of the
Applicable Closing Date, in accordance with Applicable Servicing Requirements,
and the Sellers shall reimburse Purchaser for its actual costs and expenses in
connection therewith. At the option of the Sellers, Purchaser shall either
provide such releases to the Sellers for execution or execute the same pursuant
to a power of attorney provided by the Sellers or, with respect to subserviced
Serviced Mortgage Loans, the Servicer to Purchaser. To the extent the process of
completing the release process has been contracted to third parties and the
contracts with those third parties have been assigned to and assumed by
Purchaser pursuant to this Agreement, Purchaser shall use commercially
reasonable efforts to monitor the activities of such third parties in this
regard.

 

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(u)    GLBA. In connection with the sale and transfer of the Servicing Rights
hereunder, each of the Parties shall comply with the applicable provisions of
the GLBA and any applicable state and local privacy Laws.

(v)    Compliance Costs; Reporting Obligations. The Sellers shall be responsible
for all costs of compliance related to the operation of the Business and the
Purchased Assets prior to the Applicable Closing Date. After the Applicable
Closing Date, the Sellers shall be responsible for completing any requested
compliance and/or servicer certificate related to the operation of the Business
and the Purchased Assets prior to the Applicable Closing Date. If requested by
Seller, Purchaser shall be of reasonable assistance to the Sellers in connection
with the foregoing, and the Sellers shall provide to Purchaser all information
needed by Purchaser in connection with such assistance. Nothing in this
Section 7.10(v) affects the Sellers’ obligations under the Applicable Servicing
Requirements in connection with the operation of the Business.

(w)    Standard of Care. Subject to the Interim Servicing Agreement, from and
after the Applicable Closing Date, with respect to the servicing of the Serviced
Mortgage Loans (including the conduct of Foreclosures and the management of the
Serviced REO Property) and the collection of Servicer Advances, Purchaser shall
(i) exercise the degree of care which is standard in the industry with respect
to the servicing of similar loans (including the conduct of Foreclosures and the
management of property) and the collection of similar advances and claims and
(ii) service such Serviced Mortgage Loans in accordance with applicable Law and
in accordance with applicable Investor and Insurer requirements governing
servicers and the provisions of the applicable Servicing Agreements and
Subservicing Agreements. From and after the Applicable Closing Date, the Sellers
shall remain responsible for implementation of the “Foreclosure Review”
identified in Sections 14 through 19 of the Consent Order. Purchaser shall use
commercially reasonable efforts to cooperate with the Sellers in connection with
the Seller’s implementation of such Foreclosure Review, such as providing access
to documentation and updates concerning the status of Serviced Mortgage Loan
files. From and after the Applicable Closing Date, Purchaser shall service all
Foreclosures in process in accordance with any remediation or similar plan
adopted by the Sellers (the “Remediation Plans”) pursuant to sections 14 through
19 of the Consent Order. The Sellers shall promptly provide to Purchaser copies
of any such Remediation Plans and any supplements or modifications thereto. The
Sellers shall reimburse Purchaser for Purchaser’s out-of-pocket third party
costs and expenses and reasonable additional incremental overhead costs that are
otherwise incurred by Purchaser, in each case incurred in connection with such
cooperation. The Parties shall cooperate with each other in order to minimize
all such out-of-pocket third party and overhead costs and expenses. Purchaser
further agrees to service all Purchased Assets in accordance with the general
servicing standards agreed to by institutions that are subject to the Consent
Order and generally identified in the Sellers’ Consent Order “Action Plan.”
Notwithstanding the foregoing, the Parties acknowledge and agree that the
methodology implemented by Purchaser to ensure compliance with these servicing
standards may vary from the methodology adopted by the Sellers; provided,
however, that Purchaser shall modify such methodology to the extent (x) the
Sellers are so directed by the OCC on or prior to the Applicable Closing Date in
accordance with the Consent Order as in effect on the date of the Original Asset
Purchase Agreement, (y) Purchaser is notified in writing of such modification
and (z) prior to the OCC directing Sellers to make such modification, Sellers
have used reasonable efforts to allow Purchaser to attend and participate in any
meeting or conference with the OCC during which such modification is discussed.
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cooperate with the Sellers to facilitate the Seller’s submission of periodic
compliance reports to enable the Sellers to comply with the requirements of the
Consent Order, including the provision of such data and other information as the
sellers may reasonably request in connection therewith. The Sellers shall
reimburse Purchaser for its reasonable out-of-pocket costs incurred in
connection with the preparation of such data and other information.

(x)    Tax Reporting. Purchaser shall prepare, report to the IRS and provide to
Serviced Mortgagors, all in accordance with applicable Law, any and all Tax
information required to be provided with respect to the Serviced Mortgage Loans
for the entire year in which the Applicable Closing Date occurs and thereafter,
and the Sellers shall provide to Purchaser at its request such information
available to the Seller with respect to Pre-Closing Tax Periods as may be needed
to do so, including the complete name and taxpayer identification number of the
servicers of the Serviced Mortgage Loans in the Pre-Closing Tax Period.

(y)    Insured or Guaranteed Mortgage Loans. In connection with the sale and
transfer of the Servicing Rights and Subservicing Rights pursuant to this
Agreement, if any Serviced Mortgage Loans are insured or guaranteed by any
department or agency of any governmental unit, federal, state or local, and such
insurance or guaranty is not being specifically terminated by the Sellers,
Purchaser represents that Purchaser has been approved by such agency and is an
approved servicer. Purchaser further assumes full responsibility for determining
whether or not such insurance or guarantees are in full force and effect on the
Applicable Closing Date, and with respect to those Serviced Mortgage Loans with
respect to which any such insurance or guaranty is in full force and effect on
the Applicable Closing Date, Purchaser assumes full responsibility for doing all
things necessary to insure such insurance or guarantees remain in full force and
effect. The Parties agree to cooperate to complete and submit the forms required
by the insuring or guaranteeing department or agency to effect or complete the
transfer to Purchaser.

(z)    Cut-off Date Master Servicing Data Tape. The Sellers shall deliver not
later than three (3) Business Days prior to the Second Closing Date an updated
data tape, as of the Cut-off Date (the “Cut-off Date Master Servicing Data
Tape”), containing the information of the same categories and same format as in
the Master Servicing Data Tape. All the information included in the Cut-off Date
Master Servicing Data Tape will be true and correct in all material respects as
of the Cut-off Date.

Section 7.11    Post-Closing Cooperation in Connection with Actions.

Subject to the proviso in Section 7.02(a), from and after the Applicable
Closing, in connection with any Action arising in connection with (i) any Loss
Sharing Claim or claim with respect to a Retained Liability or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Applicable Closing involving any Seller, each Party shall, and shall
cause its Affiliates to, cooperate with reasonable requests of the other Party
and its counsel, to make available its personnel, and provide such testimony
and, subject to any applicable confidentiality restrictions and applicable Law,
access to its books and records as is reasonably necessary in connection with
the contest or defense, all at the sole cost and expense of the requesting
Party.

 

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Section 7.12    Use of Aurora Name.

Subject to the provisions of Section 7.10 that pertain to notifications to
various third parties of the transfer of the Servicing function and changing the
named party on various agreements and court filings, following the First Closing
Date, Purchaser shall not, and shall not authorize others to, use the name
“Aurora Bank” or “Aurora Loan Services” or use any variation of the word
“Aurora” in connection with its business; provided, that, Purchaser shall be
permitted to communicate to third parties that it has purchased the Purchased
Assets from Sellers and reference such names.

Section 7.13    Receivables.

If, after the Applicable Closing Date, either Seller receives any remittance
from any account debtors with respect to the Acquired Accounts Receivables or
the Servicer Advance Receivables, such Seller shall endorse such remittance to
the order of Purchaser and forward it to Purchaser promptly following receipt
thereof, to the extent included in the calculation of the Aggregate Purchase
Price or any True-up Payment.

Section 7.14    Non-Solicit.

The Sellers agree that, for a period of 12 months following the Continuing
Employee Transfer Date, they will not (and will cause each of their
Representatives not to), directly or indirectly, without the prior written
consent of the Purchaser, solicit for hire (as an employee, independent
contractor or otherwise) any Continuing Employee, in each case to the extent
that such Continuing Employee remains employed by Purchaser or any of its
Affiliates during such period. For purposes of this Section 7.14, “solicit for
hire” shall not include (a) referrals made by a placement agency or service or
(b) responses to any general advertisement appearing in a newspaper, magazine,
and trade publication, or on the internet.

Section 7.15    Transfer of LBHI Servicing Rights.

The Sellers shall use commercially reasonable efforts to facilitate the transfer
of the FHMLC mortgage servicing rights intended to be included in the Purchased
Assts from LBHI to the Bank prior to the First Closing. It is anticipated that
any FHMLC consent solicited by the Sellers in connection with such transfer will
be part of the Sellers’ solicitation of FHLMC’s overall consent to the
Transaction. If, for any reason, the transfer of such FHMLC mortgage servicing
rights is not completed before the First Closing, such FHLMC mortgage servicing
rights will not be part of the Transaction and will not be included in the
Purchased Assets; provided, however, that the Parties shall cooperate with LBHI
to facilitate the transfer of such FHMLC mortgage servicing rights directly from
LBHI to Purchaser on substantially the same terms as if such mortgage servicing
rights were purchased on the First Closing Date pursuant to this Agreement.

Section 7.16    Sublease of Space.

(a) Not later than five (5) Business Days prior to the Second Closing Date, the
Sellers and Purchaser shall agree to the form and substance of the Sublease
Agreement, pursuant to which, subject to the receipt of all necessary landlord
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Second Closing Date, sublease to the Sellers the second and fifth floors of the
Littleton Leased Real Property, including any Personal Property located therein
that is acquired hereunder. The Sublease Agreement shall contain terms,
provisions and conditions (i) that are usual and customary for subleases of this
nature, (ii) that comply with the requirements of the related Real Property
Lease, except to the extent otherwise agreed to by the Sellers and Purchaser and
consented to by the landlord, (iii) that are no less favorable to the Sellers
than the terms, provisions and conditions, when taken in the aggregate,
applicable to the Sellers pursuant to the related Real Property Lease and
(iv) that provide that the Sellers shall be responsible for their allocable
portion of all costs and expenses related to the portion of the Littleton Leased
Real Property that is subject to the Sublease Agreement. In addition, the
Sublease Agreement shall, subject to the terms and provisions of the related
Real Property Lease and except as otherwise agreed to by the Sellers and
Purchaser, have a minimum term, with respect to the second floor, of six
(6) months with an option by the Sellers to renew for five (5) subsequent six
(6) month terms and, with respect to the fifth floor, of sixty (60) days with an
option by the Sellers to renew for one (1) subsequent sixty (60) day term.

(b)    The Sellers shall use commercially reasonable efforts to obtain all
necessary landlord consents to the Sublease Agreement, which shall only be
submitted to the landlord in a form that has been mutually agreed to in advance
by the Sellers and Purchaser.

ARTICLE VIII.

CLOSING CONDITIONS

Section 8.01    Conditions to Each Party’s Obligations under this Agreement.

The respective obligations of each Party under this Agreement at each Closing
shall be subject to the fulfillment at or prior to the Applicable Closing Date
of the following conditions, none of which may be waived:

(a)    Injunctions. None of the Parties shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction, and no statute, rule
or regulation shall have been enacted, entered, promulgated, interpreted,
applied or enforced by any Governmental Entity or Bank Regulator, that enjoins
or prohibits the consummation of the Transactions.

(b)    Governmental Approvals. All required Governmental Approvals shall have
been obtained and shall remain in full force and effect and all waiting periods
relating thereto shall have expired, and no such Governmental Approval shall
include any condition or requirement that, individually or in the aggregate, has
had or would reasonably be expected to have a Material Adverse Effect.

(c)    HSR Act. Any applicable waiting period under the HSR Act relating to the
Transactions shall have been terminated or expired.

 

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Section 8.02        Conditions to the Obligations of Purchaser under this
Agreement.

The obligations of Purchaser under this Agreement at each Closing shall be
further subject to the satisfaction of the conditions set forth in this
Section 8.02 at or prior to the Applicable Closing Date:

(a)        Representations and Warranties. Each of the representations and
warranties of the Sellers set forth in this Agreement shall be true and correct
(in each case without giving effect to any qualifications as to materiality,
Material Adverse Effect or similar qualifications) in all respects as of the
date of this Agreement and as of the Applicable Closing Date with the same
effect as though all such representations and warranties had been made as of the
Applicable Closing Date (except to the extent such representations and
warranties speak as of an earlier date), except where any failure of such
representations and warranties to be true and correct (in each case without
giving effect to any qualifications as to materiality, Material Adverse Effect
or similar qualifications) has not had and would not have, individually or in
the aggregate, a Material Adverse Effect, and each Seller shall have delivered
to Purchaser a certificate, in form and substance reasonably acceptable to
Purchaser, to such effect signed by an officer of such Seller as of the
Applicable Closing Date.

(b)        Agreements and Covenants. The Sellers shall have performed in all
material respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by them at or prior to
the Applicable Closing Date, and Purchaser shall have received a certificate, in
form and substance reasonably acceptable to Purchaser, signed on behalf of each
Seller by an officer of such Seller to such effect dated as of the Applicable
Closing Date.

(c)        Guaranty. The LBB Guaranty shall be in full force and effect.

(d)        Release of Liens. The Sellers shall have delivered to Purchaser
evidence, in form and substance reasonably acceptable to Purchaser, that all
Liens have been released in respect of the Purchased Assets to be acquired on
the Applicable Closing Date (other than Permitted Liens).

(e)        Other Documents. Each Seller will furnish Purchaser with such
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 8.02 or as are customary
for a transaction of the type provided for herein as Purchaser may reasonably
request, in each case in form and substance reasonably acceptable to Purchaser.

Section 8.03        Conditions to the Obligations of Seller under this
Agreement.

The obligations of the Sellers under this Agreement at each Closing shall be
further subject to the satisfaction of the conditions set forth in this
Section 8.03 at or prior to the Applicable Closing Date:

(a)        Representations and Warranties. Each of the representations and
warranties of Purchaser set forth in this Agreement shall be true and correct
(in each case without giving effect to any qualifications as to materiality,
material adverse effect or similar qualifications) in all

 

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respects as of the date of this Agreement and as of the Applicable Closing Date
with the same effect as though all such representations and warranties had been
made as of the Applicable Closing Date (except to the extent such
representations and warranties speak as of an earlier date), except where any
failure of such representations and warranties to be true and correct (in each
case without giving effect to any qualifications as to materiality, material
adverse effect or similar qualifications) would not have in the aggregate a
material adverse effect on Purchaser’s ability to consummate the Transactions or
perform its obligations hereunder, and Purchaser shall have delivered to the
Sellers a certificate, in form and substance reasonably acceptable to the
Sellers, to such effect signed by an officer of Purchaser as of the Applicable
Closing Date.

(b)        Agreements and Covenants. Purchaser shall have performed in all
material respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by it at or prior to
the Applicable Closing Date, and the Sellers shall have received a certificate,
in form and substance reasonably acceptable to the Sellers, signed on behalf of
Purchaser by an officer of Purchaser to such effect dated as of the Applicable
Closing Date.

(c)        Payment of Purchase Price. Purchaser shall deliver the Applicable
Closing Date Payment at the Applicable Closing to the Purchase Price Bank
Account.

(d)        Other Documents. Purchaser will furnish the Sellers with such
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 8.03 or as are customary
for a transaction of the type provided for herein as the Sellers may reasonably
request, in each case in form and substance reasonably acceptable to the
Sellers.

ARTICLE IX.

THE CLOSING AND RELATED ITEMS

Section 9.01        Time and Place.

(a)        Upon the terms and subject to the conditions of this Agreement, the
sale and purchase of the Agency Purchased Assets and the assumption of the
Agency Assumed Liabilities contemplated by this Agreement shall take place at a
closing (the “First Closing”) to be held at the offices of Arnold & Porter LLP,
399 Park Avenue, New York, New York 10022 (or remotely via the exchange of
executed documents and other deliverables), at 10:00 A.M. (Eastern time) on
June 12, 2012, or at such other place or on such other date or time as is
mutually agreed to by the Sellers and Purchaser (the “First Closing Date”).

(b)        Upon the terms and subject to the conditions of this Agreement, the
sale and purchase of the Non-Agency Purchased Assets and the assumption of the
Non-Agency Assumed Liabilities contemplated by this Agreement shall take place
at a closing (the “Second Closing”) to be held at the offices of Arnold & Porter
LLP, 399 Park Avenue, New York, New York 10022 (or remotely via the exchange of
executed documents and other deliverables), at 10:00 A.M. (Eastern time) on
June 26, 2012, or at such other place or on such other date or time as is
mutually agreed to by the Sellers and Purchaser (the “Second Closing Date”)

 

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Section 9.02        Deliveries at the Closings.

(a)     Deliveries by Sellers.

(i)        On the First Closing Date, the Sellers shall deliver to Purchaser all
of the following closing documents, in such forms as are agreed upon and
acceptable to Purchaser, duly executed by all signatories other than Purchaser,
as required pursuant to the respective terms thereof:

(A)        executed counterparts of the Assignment and Assumption Agreement with
respect to the Agency Purchased Assets and the Agency Assumed Liabilities;

(B)        a receipt for payment of the First Closing Date Payment as of the
First Closing;

(C)        such other instruments of sale, assignment, transfer and conveyance
as are reasonably necessary to effectuate the sale, transfer, assignment and
delivery to Purchaser of the right, title and interest of the Sellers in and to
the Agency Purchased Assets free and clear of any Liens other than Permitted
Liens; and

(D)        all opinions, certificates, and other documents and instruments
required to be delivered at the First Closing under Article VIII hereof.

(ii)     On the Second Closing Date, the Sellers shall deliver to Purchaser all
of the following closing documents, in such forms as are agreed upon and
acceptable to Purchaser, duly executed by all signatories other than Purchaser,
as required pursuant to the respective terms thereof:

(A)        executed counterparts of each Ancillary Agreement to which the
Sellers or their Affiliates are a party (other than the Ancillary Agreements
delivered at the First Closing);

(B)        a receipt for payment of the Second Closing Date Payment as of the
Second Closing;

(C)        executed counterpart of any Sublease Agreement;

(D)        the following documents relating to the Owned Real Property and the
Real Property Leaseholds:

(1)        to Purchaser or Purchaser’s title insurance company special warranty
deeds in the form of Exhibit E (the “Special Warranty Deeds”) with respect to
the Owned Real Property;

(2)        if required by Purchaser’s title insurance company, to Purchaser’s
title insurance company an owner’s title affidavit and gap indemnity in form

 

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reasonably acceptable to the Sellers and Purchaser’s title insurance company in
connection with Purchaser obtaining an ALTA form owner’s policy of title
insurance at Purchaser’s sole cost and expense insuring Purchaser as the fee
simple owner of the Owned Real Property;

(3)        to Purchaser or Purchaser’s title insurance company an affidavit
stating that the owner of the Owned Real Property is not a “foreign person”
pursuant to Section 1445 of the Code;

(4)        any surveys, site plans, certificates of occupancy, plans and
specifications, engineering or environmental reports and zoning approvals
relating to the Owned Real Property as the Sellers may have in their possession;
and

(5)        subject to Section 7.04(b), an assignment and assumption of lease in
the form of Exhibit F (“Assignment and Assumption of Lease”) with respect to
each Real Property Lease;

(E)        such other instruments of sale, assignment, transfer and conveyance
as are reasonably necessary to effectuate the sale, transfer, assignment and
delivery to Purchaser of the right, title and interest of the Sellers in and to
the Non-Agency Purchased Assets free and clear of any Liens other than Permitted
Liens; and

(F)        all opinions, certificates, and other documents and instruments
required to be delivered at the Second Closing under Article VIII hereof.

(b)        Deliveries by Purchaser.

(i)     On the First Closing Date, Purchaser shall deliver to the Sellers all of
the following closing documents, in such forms as are agreed upon and acceptable
to the Sellers, duly executed by all signatories other than the Sellers, as
required pursuant to the respective terms thereof:

(A)        executed counterpart of the Assignment and Assumption Agreement with
respect to the Agency Purchased Assets and the Agency Assumed Liabilities;

(B)        the First Closing Date Payment as set forth under Section 2.03(b);

(C)        such other instruments of assumption as are reasonably necessary to
effectuate the assumption by Purchaser of the Agency Assumed Liabilities; and

(D)        all opinions, certificates, and other documents and instruments
required to be delivered at the First Closing under Article VIII hereof.

 

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(ii)     On the Second Closing Date, Purchaser shall deliver to the Sellers all
of the following closing documents, in such forms as are agreed upon and
acceptable to the Sellers, duly executed by all signatories other than the
Sellers, as required pursuant to the respective terms thereof:

(A)        executed counterparts of each Ancillary Agreement to which Purchaser
or its Affiliates is a party (other than the Ancillary Agreements delivered at
the First Closing);

(B)        the Second Closing Date Payment as set forth under Section 2.03(c);

(C)        executed counterpart of any Sublease Agreement;

(D)        the following documents relating to the Owned Real Property and the
Real Property Leaseholds:

(1)        subject to Section 7.04(b), an Assignment and Assumption of Lease
with respect to each Real Property Lease;

(E)        such other instruments of assumption as are reasonably necessary to
effectuate the assumption by Purchaser of the Non-Agency Assumed Liabilities;
and

(F)        all opinions, certificates, and other documents and instruments
required to be delivered at the Second Closing under Article VIII hereof.

Section 9.03     Further Assistance and Assurances.

The Sellers shall, at any time and from time to time (including, for the
avoidance of doubt, following each Closing), promptly, upon the reasonable
request of Purchaser, execute, acknowledge, deliver or perform all such further
acts, deeds, assignments, transfers, conveyances and assurances as are
reasonably necessary to effectuate the purposes of this Agreement or as may be
required for the better vesting or conferring to Purchaser of title in and to
the Purchased Assets acquired at such Closing and to effect the transactions
consummated at such Closing. Purchaser shall, at any time and from time to time
(including, for the avoidance of doubt, following each Closing), promptly, upon
the reasonable request of the Sellers, execute, acknowledge, deliver or perform
all such further acts, deeds, assumption agreements, transfers and assurances as
are reasonably necessary to effectuate the purposes of this Agreement or as may
be required for the full assumption and transfer to Purchaser of the Assumed
Liabilities assumed at such Closing and to effect the transactions consummated
at such Closing. Each Party agrees that if it receives any payment or amount
after a Closing to which another Party is entitled, the recipient shall promptly
transfer such payment or amount to the Party so entitled.

 

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ARTICLE X.

INDEMNIFICATION

Section 10.01         Survival.

(a)        The representations and warranties of the Parties contained in this
Agreement shall survive for eighteen (18) months after the Applicable Closing
Date, except that (i) each Seller Fundamental Representation and each Purchaser
Fundamental Representation shall survive for three (3) years and (ii) the
representations and warranties set forth in Section 4.07 (Taxes) shall survive
each Closing and continue until thirty (30) calendar days after the expiration
of the applicable statute of limitations. Neither Purchaser nor the Sellers
shall have any obligation to indemnify any Seller Indemnified Party or Purchaser
Indemnified Party, as the case may be, with respect to any claim for breach of
any representation or warranty first asserted in accordance with this Article X
after the expiration of the survival period specified therefor in this
Section 10.01(a).

(b)        Neither Purchaser nor the Sellers shall have any obligation to
indemnify Seller Indemnified Parties or Purchaser Indemnified Parties, as the
case may be, with respect to any claim for breach of any covenant or agreement
contained in this Agreement (i) that is to be performed prior to a Closing
unless such claim is first asserted in accordance with this Article X within one
hundred and twenty (120) days following such Closing and (ii) that is to be
performed after a Closing unless such claim is first asserted within twelve
(12) months following the date on which such covenant or agreement was required
to be performed in accordance its terms.

(c)        Neither Purchaser nor the Sellers shall have any obligation to
indemnify Seller Indemnified Parties or Purchaser Indemnified Parties, as the
case may be, with respect to any Loss Sharing Claim or claim with respect to a
Retained Liability unless such claim is first asserted in accordance with this
Article X on or prior to the third (3rd) anniversary of the Applicable Closing
Date.

(d)        No Seller Indemnified Party or Purchaser Indemnified Party shall be
entitled to be indemnified or held harmless pursuant to this Article X unless
such party delivers written notice of its claim for indemnification to the party
from whom indemnification is sought on or prior to the expiration of the
applicable survival period set forth above. Any claims for indemnification
asserted in writing prior to the end of the applicable periods set forth above
shall survive until the final resolution thereof.

Section 10.02        Indemnification by the Sellers.

Subject to the limitations set forth in this Article X, from and after the
Applicable Closing, the Sellers shall, jointly and severally, indemnify, defend
and hold harmless Purchaser, its Affiliates and their respective officers,
directors, employees and agents (collectively, the “Purchaser Indemnified
Parties”) from and against any Covered Losses incurred by such Purchaser
Indemnified Party as a result of or arising out of:

 

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(a)        any breach or inaccuracy of any representation or warranty of the
Sellers contained in Article IV of this Agreement or in the certificates
provided by the Sellers pursuant to Section 8.02(a) and Section 8.02(b);

(b)        any failure by the Sellers to (i) comply with any covenant or
agreement in this Agreement which is to be performed by the Sellers before the
Applicable Closing and (ii) comply with any covenant or agreement in this
Agreement which is to be performed by the Sellers after the Applicable Closing;

(c)        any Loss Sharing Claims to the extent necessary so that the Sellers
(and the other Seller Indemnified Parties) shall bear, whether directly or
through the indemnification provided in this Section 10.02(c), (i) first,
seventy-five percent (75%) of any such Covered Losses until the aggregate amount
paid by Sellers (and the other Seller Indemnified Parties) pursuant to this
Section 10.02(c) and Purchaser (and the other Purchaser Indemnified Parties)
pursuant to Section 10.03(c) is equal to fifty percent (50%) of the Shared Loss
Cap and (ii) thereafter, twenty-five percent (25%) of any such Covered Losses
until the aggregate amount paid by Sellers (and the other Seller Indemnified
Parties) pursuant to this Section 10.02(c) and Purchaser (and the other
Purchaser Indemnified Parties) pursuant to Section 10.03(c) is equal to the
Shared Loss Cap; and

(d)        any Retained Liability.

In the event a Covered Loss would be eligible for indemnity under either
Section 10.02(a) or Section 10.02(c), such Covered Loss shall be recoverable
only under Section 10.02(c), except for indemnity pursuant to a breach of
Section 4.18(g), which Covered Loss shall be recoverable only under
Section 10.02(a). In the event a Covered Loss would be eligible for indemnity
under (i) either Section 10.02(a) or Section 10.02(c) and (ii) Section 10.02(d),
such Covered Loss shall be recoverable only under Section 10.02(d).

Section 10.03        Indemnification by Purchaser.

Subject to the limitations set forth in this Article X, from and after the
Applicable Closing Purchaser shall indemnify, defend and hold harmless the
Sellers, their Affiliates and their (and their Affiliates’) respective officers,
directors, employees and agents (collectively, the “Seller Indemnified Parties”)
from and against any Covered Losses incurred by such Seller Indemnified Party as
a result of or arising out of:

(a)        any breach or inaccuracy of any representation or warranty of
Purchaser contained in Article V of this Agreement or in the certificates
provided by Purchaser pursuant to Section 8.03(a) and Section 8.03(b);

(b)        any failure by Purchaser to (i) comply with any covenant or agreement
in this Agreement which is to be performed by Purchaser before the Applicable
Closing and (ii) comply with any covenant or agreement in this Agreement which
is to be performed by Purchaser after the Applicable Closing;

(c)        any Loss Sharing Claims to the extent necessary so that Purchaser
(and the other Purchaser Indemnified Parties) shall bear, whether directly or
through the indemnification provided in this Section 10.3(c), (i) first,
twenty-five percent (25%) of any such Covered Loss

 

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Sharing Losses until the aggregate amount paid by Sellers (and the other Seller
Indemnified Parties) pursuant to Section 10.02(c) and Purchaser (and the other
Purchaser Indemnified Parties) pursuant to this Section 10.03(c) is equal to
fifty percent (50%) of the Shared Loss Cap, (ii) second, seventy-five percent
(75%) of any such Covered Loss Sharing Losses until the aggregate amount paid by
Sellers (and the other Seller Indemnified Parties) pursuant to Section 10.02(c)
and Purchaser (and the other Purchaser Indemnified Parties) pursuant to this
Section 10.03(c) is equal to the Shared Loss Cap and (iii) thereafter one
hundred percent (100%) of any such Covered Loss Sharing Losses in excess of the
Shared Loss Cap; and

(d)        any claim or Action brought against either Seller or any Seller
Indemnified Party at any time on or after the Applicable Closing Date relating
to actions taken by Purchaser after the Applicable Closing (other than any
Action the underlying facts and circumstances of which would otherwise entitle
any Purchaser Indemnified Party to indemnification pursuant to this Article X),
including any claim or Action resulting from or arising out of any act or
omission in actual or alleged breach or violation of any Law, Permit, Order or
Contract by Purchaser or any of its Affiliates, in each case following the
Closing in connection with the performance by Purchaser or its Affiliates of its
obligations under the Servicing Agreements or Subservicing Agreements.

In the event that a Covered Loss would be eligible for indemnity under either
Section 10.03(a) or 10.03(c), such Covered Loss shall be recoverable only under
Section 10.03(c).

Section 10.04        Limitations on Indemnification Obligations of Sellers.

Notwithstanding any other provision of this Agreement:

(a)        neither Seller shall be liable under Section 10.02(a) or
Section 10.02(b)(i) until the aggregate amount of Covered Losses under
Section 10.02(a) for which notice was timely received in accordance with
Section 10.01 exceeds two percent (2%) of the Shared Loss Cap (the “Basket
Amount”), at which time the Sellers shall be liable for all such Covered Losses
(including all Covered Losses included within such Basket Amount), except that
claims related to any breach of or inaccuracy in (i) the Seller Fundamental
Representations or (ii) the representations and warranties set forth in
Section 4.07 (Taxes) shall not be subject to any such limits;

(b)        neither Seller shall be liable under Section 10.02(a) or
Section 10.02(b)(i) for any Covered Loss (including any series of related
Covered Losses) unless such Covered Loss (including any series of related
Covered Losses) equals or exceeds $25,000 (the “De Minimis Threshold”), nor
shall any Covered Loss that does not meet the De Minimis Threshold be considered
in determining whether the Basket Amount has been met; provided, however, that
claims related to any breach of or inaccuracy in (i) the Seller Fundamental
Representations or (ii) the representations and warranties set forth in
Section 4.07 (Taxes) shall not be subject to the De Minimis Threshold;

(c)        neither Seller shall have any Liability for Covered Losses arising
under Section 10.02(a) or Section 10.02(b)(i) in excess of twenty percent
(20%) of the Shared Loss Cap, except that claims related to any breach of or
inaccuracy in the Seller Fundamental Representations shall not be subject to any
such limit;

 

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(d)        subject to the last sentence of Section 10.02, neither Seller shall
have any liability under this Agreement to any Purchaser Indemnified Party for
Covered Losses in respect of Loss Sharing Claims other than pursuant to
Section 10.02(c); and

(e)        notwithstanding any provision of this Agreement to the contrary, any
Covered Losses arising from fraud, intentional misrepresentation based on the
representations and warranties set forth in Article IV or willful and malicious
breaches of this Agreement by either Seller shall not be subject to this
Section 10.04 or any other limitation set forth in this Agreement.

Section 10.05        Limitations on Indemnification Obligations of Purchaser.

Notwithstanding any other provision of this Agreement:

(a)        Purchaser shall not be liable under Section 10.03(a) or
Section 10.03(b)(i) until the aggregate amount of Covered Losses under
Section 10.03(a) for which notice was timely received in accordance with
Section 10.01 exceeds the Basket Amount, at which time Purchaser shall be liable
for all such Covered Losses (including all Covered Losses included within such
Basket Amount), except that claims related to any breach of or inaccuracy in the
Purchaser Fundamental Representations shall not be subject to any such limits;

(b)        Purchaser shall not be liable under Section 10.03(a) or
Section 10.03(b)(i) for any Covered Loss (including any series of related
Covered Losses) unless such Covered Loss (including any series of related
Covered Losses) equals or exceeds the De Minimis Threshold, nor shall any
Covered Loss that does not meet the De Minimis Threshold be considered in
determining whether the Basket Amount has been met; provided, however, that
claims related to any breach of or inaccuracy in the Purchaser Fundamental
Representations shall not be subject to the De Minimis Threshold;

(c)        Purchaser shall have no Liability for Covered Losses arising under
Section 10.03(a) or Section 10.03(b)(i) in excess of twenty percent (20%) of the
Shared Loss Cap, except that claims related to any breach of or inaccuracy in
the Purchaser Fundamental Representations shall not be subject to any such
limit; and

(d)        notwithstanding any provision of this Agreement to the contrary, any
Covered Losses arising from fraud, intentional misrepresentation based on the
representations and warranties set forth in Article V or willful and malicious
breaches of this Agreement by Purchaser shall not be subject to this
Section 10.05 or any other limitation set forth in this Agreement.

Section 10.06        Notice of Non-Third Party Claims.

As promptly as is reasonably practicable after becoming aware of a claim for
indemnification under this Agreement that does not involve a Third Party Claim,
the Indemnified Party shall give written notice to the Indemnifying Party of
such claim, which notice shall

 

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specify the provision of this Agreement pursuant to which indemnity is sought,
the facts alleged to constitute the basis for such claim (taking into account
the information then available to the Indemnified Party), the representations,
warranties, covenants or agreements alleged to have been breached (if
applicable) and the amount (if then determinable) that the Indemnified Party
seeks hereunder from the Indemnifying Party. Subject to Section 10.01, the
failure of an Indemnified Party to promptly notify the Indemnifying Party will
not affect the indemnification provided hereunder except to the extent that the
Indemnifying Party’s defense or other rights available to it are actually
prejudiced as a result of such failure, and then only to the extent of such
prejudice.

Section 10.07        Notice of Third Party Claims; Assumption of Defense.

(a)        If a claim or Action by a Person who is not a Party or an Affiliate
thereof (a “Third Party Claim”) is made or brought against any Seller
Indemnified Party or Purchaser Indemnified Party (an “Indemnified Party”) and
such Indemnified Party intends to seek indemnification under this Article X with
respect to such claim or Action, such Indemnified Party shall give notice as
promptly as is reasonably practicable, and in no event later than ten
(10) Business Days, after receiving notice thereof, to the Party obligated to
provide such indemnification under this Article X (the “Indemnifying Party”).
Such notice shall specify the provision of this Agreement pursuant to which
indemnity is sought, the facts alleged to constitute the basis for such claim,
the identity of the Persons bringing such claim or Action, the representations,
warranties, covenants or agreements or provision of Law or Contract alleged to
have been breached, as applicable, and the amount (or, to the extent not then
determinable, the Indemnified Party’s good faith estimate thereof) that the
Indemnified Party intends to seek from the Indemnifying Party hereunder. Subject
to Section 10.01, the failure to promptly give such notification will not affect
the indemnification provided hereunder except to the extent the Indemnifying
Party’s defense or other rights available to it is actually prejudiced as a
result of such failure, and then only to the extent of such prejudice.

(b)        Either Seller shall have the sole power, at its option, to assume the
conduct and control of the settlement or defense of any Loss Sharing Claim
contemplated by clause (b) of the definition thereof for which it will have at
least a majority of the expected financial responsibility or any claim with
respect to a Retained Liability, in each case, by giving written notice thereof
to Purchaser; provided, that such Seller shall thereafter consult with Purchaser
upon Purchaser’s reasonable request for such consultation from time to time with
respect to such Loss Sharing Claim or Retained Liability. If either Seller
assumes the conduct and control of such settlement or defense, Purchaser shall
reasonably cooperate with such Seller in connection therewith, and Purchaser
shall have the right (but not the obligation) to participate in (but not
control) such settlement or defense and to employ counsel, at its own cost and
expense, separate from the counsel employed by such Seller. The assumption of
the conduct and control of such settlement or defense shall not be deemed to be
an admission or assumption of liability by either Seller. So long as either
Seller is reasonably contesting any such Loss Sharing Claim or claim with
respect to a Retained Liability in good faith, Purchaser shall not pay or settle
any such Loss Sharing Claim or claim with respect to a Retained Liability. If
the Sellers elect not to assume the conduct and control of the settlement or
defense of such Loss Sharing Claim or claim with respect to a Retained
Liability, then, subject to Section 10.08 below, Purchaser shall have the right
to conduct and control the settlement or defense of such Loss Sharing Claim or
claim with

 

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respect to a Retained Liability, including the right to pay or settle such Loss
Sharing Claim or claim with respect to a Retained Liability, provided that, in
such event, Purchaser shall waive any right to indemnity by the Sellers for all
Covered Losses related to such Loss Sharing Claim or claim with respect to a
Retained Liability unless the Sellers shall have consented to such payment or
settlement.

(c)        Purchaser shall have the sole power, at its option, to assume the
conduct and control of the settlement or defense of any Loss Sharing Claim
contemplated by clause (b) of the definition thereof for which it will have at
least a majority of the expected financial responsibility by giving written
notice thereof to the Sellers; provided, that Purchaser shall thereafter consult
with the Sellers upon the Sellers’ reasonable request for such consultation from
time to time with respect to such Loss Sharing Claim. If Purchaser assumes the
conduct and control of such settlement or defense, the Sellers shall reasonably
cooperate with Purchaser in connection therewith, and either Seller shall have
the right (but not the obligation) to participate in (but not control) such
settlement or defense and to employ counsel, at its own cost and expense,
separate from the counsel employed by Purchaser. The assumption of the conduct
and control of such settlement or defense shall not be deemed to be an admission
or assumption of liability by Purchaser. So long as Purchaser is reasonably
contesting any such Loss Sharing Claim in good faith, neither Seller shall pay
or settle any such Loss Sharing Claim. If Purchaser elects not to assume the
conduct and control of the settlement or defense of such Loss Sharing Claim,
then, subject to Section 10.08 below, the Sellers shall have the right to
conduct and control the settlement or defense of such Loss Sharing Claim or
claim with respect to a Retained Liability, including the right to pay or settle
such Loss Sharing Claim, provided that, in such event, the Sellers shall waive
any right to indemnity by Purchaser for all Covered Losses related to such Loss
Sharing Claim unless Purchaser shall have consented to such payment or
settlement.

(d)        The Indemnifying Party shall have the sole power, at its option, to
assume the conduct and control of the settlement or defense of any Third Party
Claim for which indemnification may be sought under Section 10.02(a),
Section 10.02(b), Section 10.03(a), Section 10.03(b) or Section 10.03(d) by
giving written notice thereof to the Indemnified Party; provided, that the
Indemnifying Party shall thereafter consult with the Indemnified Party upon the
Indemnified Party’s reasonable request for such consultation from time to time
with respect to such Third Party Claim. If the Indemnifying Party assumes the
conduct and control of such settlement or defense, the Indemnified Party shall
cooperate with the Indemnifying Party in connection therewith, and the
Indemnified Party shall have the right (but not the obligation) to participate
in (but not control) such settlement or defense and to employ counsel, at its
own cost and expense, separate from the counsel employed by the Indemnifying
Party. The assumption of the conduct and control of such settlement or defense
shall not be deemed to be an admission or assumption of liability by the
Indemnifying Party. So long as Indemnifying Party is reasonably contesting any
such Third Party Claim in good faith, the Indemnified Party shall not pay or
settle any such claim. If the Indemnifying Party elects not to assume the
conduct and control of the settlement or defense of such Third Party Claim,
then, subject to Section 10.08 below, the Indemnified Party shall have the right
to assume the conduct and control of the settlement or defense of such Third
Party Claim, including the right to pay or settle such claim, provided that, in
such event, the Indemnified Party shall waive any right to indemnity by the
Indemnifying Party for all Covered Losses related to such claim unless the
Indemnifying Party shall have consented to such payment or settlement.

 

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(e)        Notwithstanding anything in this Agreement to the contrary, whether
or not the Indemnifying Party shall have assumed the conduct or control of the
defense or settlement of a Third Party Claim, no Indemnified Party shall admit
any liability with respect to, or settle, compromise or discharge, any Third
Party Claim without the prior written consent of the Indemnifying Party (which
shall not be unreasonably withheld, conditioned or delayed). If the Indemnifying
Party does not notify the Indemnified Party within thirty (30) days after the
receipt of the Indemnified Party’s notice of claim pursuant to Section 10.07(a)
that it elects to assume the conduct or control of the defense or settlement
thereof, the Indemnified Party shall have the right to contest, settle or
compromise the claim but shall not thereby waive any right to indemnity therefor
pursuant to this Agreement. The party who assumes the defense of any Third Party
Claim pursuant to Section 10.07(b), Section 10.07(c) or Section 10.07(d) is
referred to herein as the “Controlling Party” and the other party with respect
to any such Third Party Claim is referred to herein as the “Non-Controlling
Party”.

(f)        Notwithstanding anything in this Agreement to the contrary, if any
Third Party Claim is a criminal claim (a “Criminal Third Party Claim”), the
subject of such Criminal Third Party Claim may elect to assume the defense of
such claim. If a Seller Indemnified Party and a Purchaser Indemnified Party are
each subjects of such Criminal Third Party Claim, each such Party may elect to
defend the claims against it, no Party shall be deemed to be the Controlling
Party and no Party shall have the right to make any settlement, compromise or
offer to settle or compromise such Criminal Third Party Claim as it relates to
the other Party.

(g)        Other than with respect to Criminal Third Party Claims, any
Non-Controlling Party may become the Controlling Party with respect to any Third
Party Claim by releasing the initial Controlling Party from any and all
Liability under this Article X with respect to such Third Party Claim and
indemnifying the initial Controlling Party against any and all Losses that may
be incurred by the initial Controlling Party in connection with such Third Party
Claim; provided, however, that if a Third Party Claim alleges wrongdoing by the
Controlling Party or its Affiliates or involves other reputational matters
relating to the Controlling Party or its Affiliates, the Non-Controlling Party
may only become the Controlling Party with the consent of the initial
Controlling Party, which consent shall not be unreasonably withheld, conditioned
or delayed.

(h)        Subject to Section 7.11, all of the Parties shall reasonably
cooperate in the defense or prosecution of any Third Party Claim in respect of
which indemnity may be sought hereunder and each Party (or a duly authorized
representative of such Party) shall (and shall cause its Affiliates to) furnish
such records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith.

Section 10.08        Settlement or Compromise.

The Controlling Party with respect to any Third Party Claim shall have the right
to make any settlement, compromise, judgment or offer to settle or compromise
such Third Party Claim with the prior written consent of the Non-Controlling
Party (which shall not be unreasonably

 

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withheld, conditioned or delayed), binding upon such Non-Controlling Party in
the same manner as if a final judgment or decree had been entered by a court of
competent jurisdiction in the amount of such settlement or compromise; provided,
however, that such written consent of the Non-Controlling Party shall not be
required in the event (i) such settlement, compromise, judgment or offer to
settle or compromise such Third Party Claim does not (A) involve any finding or
admission of any violation of Law or admission of any wrongdoing by the
Non-Controlling Party or (B) encumber any of the assets of any Non-Controlling
Party or adversely affect in any material respect the post-Closing operation of
the business of the Non-Controlling Party or its Affiliates in any manner, and
(ii) the Controlling Party shall (A) pay or cause to be paid all amounts
required to be paid by it under this Article X arising out of such settlement or
judgment with the effectiveness of such settlement or judgment, and (B) obtain,
as a condition of any settlement, compromise, judgment or offer to settle or
compromise, or other resolution, an appropriate release of each Non-Controlling
Party from any and all corresponding Liabilities in respect of such Third Party
Claim or the applicable portion thereof.

Section 10.09        Exclusive Remedy.

Except in the case of fraud or where a Party seeks to obtain specific
performance pursuant to Section 12.12, from and after the Applicable Closing,
the sole and exclusive remedy of the Sellers, the Seller Indemnified Parties,
Purchaser and the Purchaser Indemnified Persons in connection with this
Agreement and the transactions consummated at such Applicable Closing, whether
under this Agreement or arising under common law or any other Law, shall be as
provided in this Article X. In furtherance of the foregoing, each of Purchaser,
on behalf of itself and each other Purchaser Indemnified Party, and each Seller,
on behalf of itself and each other Seller Indemnified Party, hereby waives, from
and after the Applicable Closing, to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action (other than
claims of, or causes of action arising from, intentional fraud) it may have
against either Seller or any of its Affiliates or representatives and Purchaser
or any of its Affiliates or representatives, as the case may be, arising under
or based upon this Agreement or any certificate delivered in connection
herewith, whether under this contract or arising under common law or any other
Law except pursuant to the indemnification provisions set forth in this Article
X. Nothing in this Section 10.09 shall operate to interfere with or impede the
operation of the provisions of Section 2.04 (Post-Closing Purchase Price
Calculation), or any Ancillary Agreement or the rights of either Party to seek
equitable remedies to enforce any covenant of a Party to be performed after the
Closing. For the avoidance of doubt, prior to the Second Closing, the provisions
of this Section 10.09 shall not apply with respect to the transactions
contemplated to occur on the Second Closing Date, or any of the provisions of
this Agreement relating thereto or the Non-Agency Purchased Assets.

Section 10.10        Net Losses; Subrogation; Mitigation; No Set-Off.

(a)        For all purposes under this Article X, the representations and
warranties contained in this Agreement shall be construed as if the term
“material” and any reference to “Material Adverse Effect,” “material adverse
effect” or any similar qualifications were omitted from such representations and
warranties.

 

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(b) Notwithstanding anything contained herein to the contrary, the amount of any
Covered Losses incurred or suffered by an Indemnified Party shall be calculated
after giving effect to (i) any insurance proceeds received by the Indemnified
Party (or any of its Affiliates) with respect to such Losses, (ii) any insurance
proceeds with respect to such Losses which the applicable insurer has agreed in
writing to pay to the Indemnified Party (or any of its Affiliates), but which
have not yet been so paid by such insurer, (iii) any recoveries obtained by the
Indemnified Party (or any of its Affiliates) from any other third party in
respect of such Covered Loss and (iv) any recoveries from any other third party
with respect to such Losses which the applicable third party has agreed in
writing to pay to the Indemnified Party (or its Affiliates), but which have not
yet been so paid by such third party. The Indemnified Party shall use
commercially reasonable efforts to obtain such proceeds, benefits and
recoveries. If any such proceeds or recoveries are received by an Indemnified
Party (or any of its Affiliates) with respect to any Covered Losses after an
Indemnifying Party has made a payment to the Indemnified Party with respect
thereto, the Indemnified Party (or such Affiliate) shall pay to the Indemnifying
Party the amount of such proceeds or recoveries (up to the amount of the
Indemnifying Party’s payment). The Indemnified Party will use its commercially
reasonable efforts to mitigate any actual or reasonably expected Covered Loss,
in each case to the same extent as it would if such Covered Loss were not
subject to indemnification pursuant to this Article X. No Indemnified Party will
be entitled to recover from an Indemnifying Party more than once in respect of
the same Covered Losses.

(c)     In the event any payment is made in respect of Covered Losses, the
Indemnifying Party who made such payment will, to the extent permissible by
applicable Law, be subrogated to the extent of such payment to any related
rights of recovery of the Indemnified Party receiving such payment against any
third party. Such Indemnified Party (and its Affiliates) and Indemnifying Party
shall execute upon request all instruments reasonably necessary to evidence or
further perfect such subrogation rights. If any Indemnified Party recovers,
under insurance policies or from other collateral sources, any amount in respect
of a matter for which the Indemnifying Party made a payment pursuant to
Section 10.02 or Section 10.03, as applicable, such Indemnified Party shall
promptly pay over to the Indemnifying Party the amount so recovered (after
deducting therefrom the amount of the expenses incurred by such Indemnified
Party in procuring such recovery), but not in excess of the sum of (i) any
amount previously so paid by the Indemnifying Party to or on behalf of such
Indemnified Party in respect of such matter and (ii) any amount expended by the
Indemnifying Party in pursuing or defending any claim arising out of such
matter.

(d)     Neither Purchaser nor the Sellers shall have any right to set-off any
indemnification claim pursuant to this Article X against any payment due
pursuant to Article II or any Ancillary Agreement. No Purchaser Indemnified
Party shall be entitled to indemnification pursuant to Section 10.02 for any
Covered Loss to the extent that such Covered Loss was expressly taken into
account in the determination of, and reduced, the Aggregate Purchase Price
pursuant to Article II.

(d)     No Indemnified Party shall be entitled to indemnification pursuant to
this Article X to the extent that the Indemnified Party failed to mitigate or
prevent such Covered Loss as required by Law.

 

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Section 10.11     Treatment of Indemnity Payments.

For Tax purposes, any payment pursuant to this Article X shall be treated as an
adjustment to the Aggregate Purchase Price.    

ARTICLE XI.

TERMINATION

Section 11.01     Termination.

(a)     This Agreement may be terminated at any time prior to the First Closing
Date:

(i)     At any time by the mutual written agreement of Purchaser and the
Sellers;

(ii)     By the Sellers or Purchaser (provided that the terminating Party is not
then in breach of any representation, warranty, covenant or other agreement
contained herein) if there shall have been a breach of any of the
representations or warranties set forth in this Agreement on the part of the
other Party, such that a condition to the obligation of the terminating Party to
close the Transactions set forth in Article VIII cannot be satisfied and which
breach by its nature cannot be cured prior to the Termination Date or shall not
have been cured within thirty (30) days after delivery of written notice of such
breach by the terminating Party to the other Party;

(iii)     By the Sellers or Purchaser (provided that the terminating Party is
not then in breach of any representation or warranty or breach of any covenant
or other agreement contained herein) if there shall have been a failure to
perform or comply with any of the covenants or agreements set forth in this
Agreement on the part of the other Party, such that a condition to the
obligation of the terminating Party to close the Transactions set forth in
Article VIII cannot be satisfied and which failure by its nature cannot be cured
prior to the Termination Date or shall not have been cured within thirty
(30) days after delivery of written notice of such failure by the terminating
Party to the other Party;

(iv) At the election of the Sellers or Purchaser, if the First Closing shall not
have occurred by the Termination Date or such later date as shall have been
agreed to in writing by Purchaser and the Sellers; provided, that no Party may
terminate this Agreement pursuant to this Section 11.01(a)(iv) if the failure of
the First Closing to have occurred on or before the Termination Date was due to
such Party’s willful breach of any representation or warranty or material breach
of any covenant or other agreement contained in this Agreement; and

(v)     By the Sellers or Purchaser if (i) final action has been taken by a Bank
Regulator whose approval is required in connection with this Agreement and the
Transactions, which final action (x) has become unappealable and (y) does not
approve this Agreement or the Transactions, (ii) any Bank Regulator whose
approval or nonobjection is required in connection with this Agreement and the
Transactions has stated that it will not issue the required approval or
nonobjection, or (iii) any court of competent jurisdiction or other Governmental
Entity shall have issued an order, decree,

 

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ruling or taken any other action restraining, enjoining or otherwise prohibiting
the Transactions and such order, decree, ruling or other action shall have
become final and unappealable.

(b)     All the rights and obligations of the Parties hereunder related to the
Non-Agency Purchased Assets and the Non-Agency Assumed Liabilities may be
terminated at any time prior to the Second Closing Date:

(i)     At any time by the mutual written agreement of Purchaser and the
Sellers;

(ii)     By the Sellers or Purchaser (provided that the terminating Party is not
then in breach of any representation, warranty, covenant or other agreement
contained herein) if there shall have been a breach of any of the
representations or warranties set forth in this Agreement on the part of the
other Party, such that a condition to the obligation of the terminating Party to
effect the Second Closing set forth in Article VIII cannot be satisfied and
which breach by its nature cannot be cured prior to the Termination Date or
shall not have been cured within thirty (30) days after delivery of written
notice of such breach by the terminating Party to the other Party;

(iii)     By the Sellers or Purchaser (provided that the terminating Party is
not then in breach of any representation or warranty or breach of any covenant
or other agreement contained herein) if there shall have been a failure to
perform or comply with any of the covenants or agreements set forth in this
Agreement on the part of the other Party, such that a condition to the
obligation of the terminating Party to effect the Second Closing set forth in
Article VIII cannot be satisfied and which failure by its nature cannot be cured
prior to the Termination Date or shall not have been cured within thirty
(30) days after delivery of written notice of such failure by the terminating
Party to the other Party;

(iv)     At the election of the Sellers or Purchaser, if the Second Closing
shall not have occurred by the Termination Date or such later date as shall have
been agreed to in writing by Purchaser and the Sellers; provided, that no Party
may terminate this Agreement pursuant to this Section 11.01(b)(iv) if the
failure of the Second Closing to have occurred on or before the Termination Date
was due to such Party’s willful breach of any representation or warranty or
material breach of any covenant or other agreement contained in this Agreement;
and

(v)     By the Sellers or Purchaser if (i) final action has been taken by a Bank
Regulator whose approval is required in connection with this Agreement and the
Transactions, which final action (x) has become unappealable and (y) does not
approve this Agreement or the Transactions, (ii) any Bank Regulator whose
approval or nonobjection is required in connection with this Agreement and the
Transactions has stated that it will not issue the required approval or
nonobjection, or (iii) any court of competent jurisdiction or other Governmental
Entity shall have issued an order, decree, ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Transactions and such order,
decree, ruling or other action shall have become final and unappealable.

 

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Section 11.02     Effect of Termination.

In the event of termination of this Agreement pursuant to any provision of
Section 11.01(a), this Agreement shall forthwith become void and have no further
force, except that the provisions of this Section 11.02 and Section 12.01,
Section 12.05, Section 12.09, Section 12.10, Section 12.11, Section 12.12,
Section 12.13, Section 12.14 and any other Section which, by its terms, relates
to post-termination rights or obligations, shall survive such termination of
this Agreement and remain in full force and effect. In the event of termination
of rights and obligations of the Parties related to the Non-Agency Purchased
Assets and Non-Agency Assumed Liabilities pursuant to any provision of
Section 11.01(b), such rights and obligations shall forthwith become void and
have no further force or effect. For the avoidance of doubt, all rights and
obligations of the Parties under this Agreement with respect to the Agency
Purchased Assets and the Agency Assumed Liabilities shall survive any such
termination of such rights and obligations of the Parties related to the
Non-Agency Purchased Assets and the Non-Agency Assumed Liabilities and this
Agreement shall remain in full force and effect with respect to the Agency
Purchased Assets and the Agency Assumed Liabilities. Notwithstanding the
foregoing, the termination of this Agreement pursuant to Section 11.01(a) or the
termination of rights and obligations under this Agreement pursuant to
Section 11.01(b) shall not affect the rights of any Party with respect to any
Liabilities incurred or suffered by such Party as a result of the willful breach
by the other Party of any of its representations, warranties, covenants or
agreements in this Agreement.

ARTICLE XII.

MISCELLANEOUS

Section 12.01     Confidentiality.

Except as specifically set forth herein, Purchaser and the Bank mutually agree
to be bound by the terms of the confidentiality agreement dated August 8, 2011
(the “Confidentiality Agreement”) previously executed by Purchaser and the Bank,
which Confidentiality Agreement is hereby incorporated herein by reference.
Purchaser and the Bank agree that such Confidentiality Agreement shall continue
in accordance with its respective terms, notwithstanding the termination of this
Agreement. The Bank acknowledges that Purchaser is a third party beneficiary of
any and all confidentiality agreements entered into by the Bank in the past
twelve (12) months similar to the confidentiality agreement between Purchaser
and the Bank.

Section 12.02     Public Announcements.

The Sellers and Purchaser shall cooperate with each other in the development and
distribution of all news releases and other public disclosures with respect to
this Agreement, and except as may be otherwise required by Law or the U.S.
Securities and Exchange Commission, neither the Sellers nor Purchaser shall
issue any news release or other public announcement or communication with
respect to this Agreement unless such news release or other public announcement
or communication has been mutually agreed upon by the Sellers and Purchaser;
provided, that the Party drafting such news release or other public announcement
or

 

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communication shall in good faith provide, to the extent possible, to each other
Party reasonable advance notice and reasonable time to review and comment upon a
draft of such news release or other public announcement or communication.

Section 12.03     Notice.

All notices or other communications hereunder shall be in writing and shall be
deemed given if delivered by receipted hand delivery or mailed by prepaid
registered or certified mail (return receipt requested) or by recognized
overnight courier addressed as follows:

 

If to Sellers, to:

  

Aurora Bank FSB

1271 Ave of the Americas, # 46A

New York, New York 10020

Attention: Chief Legal Officer

Tel: (720) 945-3062

With required copies to:

  

Arnold & Porter LLP

399 Park Avenue

New York, New York 10022

Attention: Robert C. Azarow, Esq.

Tel: (212) 715-1336

If to Purchaser, to:

  

Nationstar Mortgage LLC

350 Highland Drive

Lewisville, Texas 75067

Attention: General Counsel

Tel: (972) 316-5429

Fax: (469) 549-2085

With required copies to:

  

Sidley Austin LLP

One South Dearborn

Chicago, Illinois 60603

Attention: Chris E. Abbinante and Luke J. Valentino

Tel: (312) 853-7000

or such other address as shall be furnished in writing by any Party, and any
such notice or communication shall be deemed to have been given: (i) as of the
date delivered by hand; (ii) three (3) Business Days after being delivered to
the U.S. mail, postage prepaid; or (iii) one (1) Business Day after being
delivered to the overnight courier.

Section 12.04     Parties in Interest; Assignment.

This Agreement shall be binding upon and shall inure to the benefit of the
Parties and their respective successors and permitted assigns; provided,
however, that neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any Party without the prior written
consent of the other Parties, except that Purchaser shall be permitted to assign
(a) its rights and interests in the Servicer Advance Receivables to be acquired
hereunder to any

 

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of its Lenders as collateral security or (b) its rights to acquire the Owned
Real Property to a direct or indirect wholly owned subsidiary of Purchaser, but,
in either case, no such assignment shall relieve Purchaser of its obligations
hereunder. Except as specifically provided in this Agreement, nothing in this
Agreement is intended to confer upon any other Person any rights or remedies
under or by reason of this Agreement.

Section 12.05     Complete Agreement.

This Agreement, including the Exhibits and Schedules hereto and the documents
and other writings referred to herein or therein or delivered pursuant hereto,
together with the Confidentiality Agreement referred to in Section 12.01 and the
Ancillary Agreements, contains the entire agreement and understanding of the
Parties with respect to its subject matter. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the Parties
other than those expressly set forth herein or therein. This Agreement
supersedes all prior agreements and understandings, including the Original Asset
Purchase Agreement, the Subservicing Letter Agreement and the Bifurcated Closing
Letter Agreement, (other than the Confidentiality Agreement referred to in
Section 12.01 hereof and the letter agreement dated April 16, 2012 among the
Parties) among the Parties, both written and oral, with respect to its subject
matter.

Section 12.06     Counterparts.

This Agreement may be executed in two or more counterparts, including by
facsimile or electronic transmission, each of which shall be deemed an original,
and any Person may become a party hereto by executing a counterpart hereof, but
all of such counterparts together shall be deemed to be one and the same
agreement.

Section 12.07     Severability.

In the event that any one or more provisions of this Agreement shall for any
reason be held invalid, illegal or unenforceable in any respect, by any court of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Agreement and the Parties shall use
their reasonable efforts to substitute a valid, legal and enforceable provision
which, insofar as practical, implements the purposes and intents of this
Agreement.

Section 12.08     Amendment, Extension, Waiver and Cumulative Remedies.

(a)     Subject to applicable Law, at any time prior to the Applicable Closing
Date, the Parties may (i) amend this Agreement, (ii) extend the time for the
performance of any of the obligations or other acts of any other Party,
(iii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, or (iv) waive compliance
with any of the agreements or conditions contained herein. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the Parties. Any agreement on the part of a Party to any extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such Party, but such waiver or failure to insist on strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. ¶

 

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(b)     No failure or delay on the part of any Party in the exercise of any
right hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any inaccuracy in the representations and warranties contained
herein or in any document delivered pursuant hereto, nor shall any single or
partial exercise of any such right preclude other or further exercise thereof or
of any other right, and all rights and remedies existing under this Agreement
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

Section 12.09     Governing Law.

This Agreement shall be governed by the laws of the State of New York, without
giving effect to its principles of conflicts of laws, other than Section 5-1401
of the New York General Obligations Law.

Section 12.10     Jurisdiction; Forum; Service of Process.

Each Party irrevocably submits to the jurisdiction, including the personal
jurisdiction, of (i) any New York State court sitting in New York County, and
(ii) any Federal court of the United States sitting in New York County in the
State of New York, solely for the purposes of any suit, action or other
proceeding between any of the Parties arising out of this Agreement or the
Transactions. Each Party agrees to commence any suit, action or proceeding
relating hereto only in any Federal court of the United States sitting in New
York County in the State of New York or, if such suit, action or other
proceeding may not be brought in such court for reasons of subject matter
jurisdiction, in any New York State court sitting in New York County. Each Party
irrevocably and unconditionally waives any objection to the laying of venue of
any suit, action or proceeding between any of the Parties arising out of this
Agreement or the Transactions in (i) any New York State court sitting in New
York County, and (ii) any Federal court of the United States sitting in New York
County in the State of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Each Party irrevocably agrees to request that the
applicable court adjudicate any covered claim on an expedited basis and to
cooperate with each other to assure that an expedited resolution of any such
dispute is achieved. Each Party irrevocably agrees to abide by the rules or
procedure applied by the Federal courts or New York State courts (as the case
may be) (including but not limited to procedures for expedited pre-trial
discovery) and waive any objection to any such procedure on the ground that such
procedure would not be permitted in the courts of some other jurisdiction or
would be contrary to the laws of some other jurisdiction. Each Party further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such suit, action or other proceeding by the mailing of copies
thereof by registered mail to such Party at its address set forth in this
Agreement, such service of process to be effective upon acknowledgment of
receipt of such registered mail; provided, that nothing in this Section 12.10
shall affect the right of any Party to serve legal process in any other manner
permitted by Law.

Section 12.11     Interpretation.

When a reference is made in this Agreement to Sections or Exhibits, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words

 

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“herein” or “hereunder” are used in this Agreement, they will be deemed to refer
to this Agreement as a whole and not to any specific Section. References to
Sections include subsections which are part of the related Section (e.g., a
section numbered “Section 5.01(a)” would be part of “Section 5.01” and
references to “Section 5.01” would also refer to material contained in the
subsection described as “Section 5.01(a)”). Any Law defined herein will mean
such Law as amended and will include any successor Law. References to a Contract
will be deemed to refer to such Contract as amended, restated or supplemented in
accordance with its terms. The table of contents, index and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”. Any singular term in
this Agreement will be deemed to include the plural, and any plural term the
singular. All pronouns and variations of pronouns will be deemed to refer to the
feminine, masculine or neuter, singular or plural, as the identity of the person
referred to may require. The phrase “the date of the Original Asset Purchase
Agreement” and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to March 6, 2012. The phrase “the date of this
Agreement” and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to the date set forth in the preamble to this
Agreement. Whenever a dollar figure ($) is used in this Agreement, it will mean
United States dollars unless otherwise specified.

Section 12.12     Specific Performance.

The Parties agree that irreparable damage would occur in the event that the
provisions contained in this Agreement were not performed in accordance with its
specific terms or were otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Without limiting the generality of the foregoing, the Sellers shall be entitled
to seek specific performance to cause Purchaser to enforce the terms of the
Financing Commitments, including by demanding Purchaser file one or more
lawsuits against the sources of the Financing to fully enforce such Financing
sources’ obligations thereunder and Purchaser’s rights thereunder.

Section 12.13     Expenses.

All costs and expenses incurred in connection with this Agreement and the
Ancillary Agreements and the transactions contemplated hereby and thereby will
be paid by the Party incurring such cost or expense, except as otherwise
provided in this Agreement or the Ancillary Agreements.

Section 12.14     No Recourse.

Any Action based upon, arising out of, or related to this Agreement may only be
brought against the Parties, and then only with respect to the specific
obligations set forth herein. No former, current or future direct or indirect
equity holders, controlling persons, stockholders, directors, officers,
employees, members, managers, agents, affiliates, general or limited partners or
assignees of Purchaser or the Sellers, as the case may be, or any of their
Affiliates or of any

 

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former, current or future direct or indirect equity holder, controlling person,
stockholder, director, officer, employee, member, manager, general or limited
partner, affiliate, agent or assignee of Purchaser or the Sellers, as the case
may be, or any of their Affiliates shall have any Liability for any of the
representations, warranties, covenants, agreements, obligations or Liabilities
of Purchaser or Seller, as applicable, under this Agreement or of or for any
Action based on, in respect of, or by reason of, the Transactions (including the
breach, termination or failure to consummate the Transactions), in each case
whether based on contract, tort or strict liability, by the enforcement of any
assessment, by any legal or equitable proceeding, by virtue of any statute,
regulation or applicable Laws or otherwise and whether by or through attempted
piercing of the corporate, limited liability company or partnership veil, by or
through a claim by or on behalf of a Party or another Person (including a claim
to enforce the Financing Commitments) or otherwise; provided, however, that
nothing contained herein shall affect any rights Purchaser may have in the LBB
Guaranty.

[Remainder of Page Intentionally Left Blank]

 

106

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized officers as of the date first set forth above.

 

AURORA BANK FSB By:  

/s/ Brian Kuelbs

  Name:   Brian Kuelbs   Title:   Chief Executive Officer

 

AURORA LOAN SERVICES LLC By:  

/s/ Robert J. Leist Jr.

  Name:  

Robert J. Leist Jr.

  Title:   Chief Financial Officer

 

NATIONSTAR MORTGAGE LLC By:  

/s/ Amar Patel

  Name:   Amar Patel   Title:   Executive Vice President