snfca10k123108ex10-22.htm


    
      

      

    

    
      EXHIBIT
10.22

       

      
        INDEMNIFICATION
AGREEMENT

        


        This Indemnification Agreement
("Agreement") dated as of December 17, 2007, is made by and between Lehman
Brothers Bank, FSB a federal savings bank (together with its successors,
assigns, operating divisions, affiliates and subsidiaries, "LBB"), and Aurora
Loan Services LLC, a Delaware limited liability company, and wholly-owned
subsidiary of LBB (together with its successors, assigns, operating divisions,
affiliates and subsidiaries, "Aurora,"or collectively with LBB as "LBB") having
an office for the conduct of business at 10350 Park Meadows Drive, Littleton,
Colorado 80134, and Security National Mortgage Company (together with its
successors assigns, operating divisions, affiliates and subsidiaries, "Seller"),
having an office for the conduct of business at 5300 South 360 West, Suite 150,
Murray, Utah 84123. LBB, Aurora, and the Seller are sometimes referred to herein
as parties,

        


        WITNESSETH:

        


        WHEREAS, LBB and the Seller are parties
to a certain Loan Purchase Agreement (Servicing Released Transactions), dated as
of July,11, 1998 (the "Purchase Agreement"), pursuant to which the Seller may
sell to LBB from time to time, and LBB may purchase from the Seller from time to
time, certain mortgage loans in accordance with the terms of the Purchase
Agreement and Aurora's Seller's Guide, as amended from time to time (the
"Seller's Guide");

        


        WHEREAS, the Seller made certain
material representations and warranties as set forth in the Seller's Guide which
LBB relied upon when entering into the Purchase Agreement;

        


        WHEREAS pursuant to the Purchase
Agreement, LBB purchased from the Seller residential mortgage
loans;

        


        WHEREAS, as part of Aurora's. quality
control efforts, Aurora reviewed the purchased mortgage loans and determined
that certain loans contain alleged Misrepresentations and/or Early Payment
Defaults (the "Breaches").

        


        WHEREAS, the
..existence of the alleged Breaches with respect to the Purchase Agreement
and Seller's Guide concerning purchased mortgage loans allegedly gives LBB the
right to require the Seller to immediately repurchase the mortgage loans that
contain Breaches (hereinafter defined as the "Mortgages" or "Mortgage Loans") in
accordance with the terms of the Purchase Agreement and the Seller's Guide,
and

        


        WHEREAS, in reliance upon the Seller's
execution of this Agreement to indemnify LBB and Aurora for any and all losses
suffered on the Mortgage Loans, LBB/Aurora have refrained from demanding
immediate repurchase of the Mortgage Loans by the Seller; and

        


        WHEREAS, the amount of any and all
Losses suffered on the Mortgage Loans by LBB and Aurora are uncertain in
amount.

        


        NOW, THEREFORE, in consideration of
LBB's and Aurora's forbearance from exercising its right to have the Seller
immediately repurchase the Mortgage Loans, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

        


        Section
1.              Indemnification.  The
Seller hereby and at all times hereafter agrees to indemnify and hold LBB and/or
Aurora and the Servicer harmless from and against seventy-five percent (75%) of
all losses, damages, penalties. fines, forfeitures, legal or other fees,
judgments, costs, expenses, debts, obligations and claims which LBB and/or
Aurora or the Servicer may have or may hereafter suffer, incur, be put to, pay
or lay out, or sustain as a result of any cause related to any current or future
default by the mortgagor on the Mortgage Loans with alleged breaches as detailed
on the attached Schedule A on an individual basis (collectively,
"Losses").  Further LBB and Aurora agree to release the Seller from
any obligation to pay the remaining twenty-five percent (25%) of all losses,
damages, penalties, fines, forfeitures, legal or other fees, judgments, costs,
expenses, debts, obligations and claims which LBB and/or Aurora or the Servicer
may have or may hereafter suffer, incur, be put to, pay or lay out, or sustain
as a result of any cause related to any current or future default by the
mortgagor on the Mortgage Loans as detailed on the attached Schedule A on an
individual basis.  The Losses shall be paid and discharged by Seller
through the Deposit specified in Section 5 below.  The Losses shall be
involved or apportioned against the Seller as they are incurred by LBB and/or
Aurora or the Servicer, absolutely, and the existence and amount of any such
Losses shall be determined by LBB and/or Aurora and the Servicer in their sole
and absolute discretion.


        
          
             


          

          
             


            
              

            

          

          
             


          

        

        


        Section
2.              Duration of Agreement and
Survival of Indemnification.  The terms of this Agreement shall
also apply to any future Losses sustained by LBB and/or Aurora on any Mortgage
Loan purchased from the Seller, with the Deposit set forth in Section 5 applied
as described in that section at 100% of the Losses for any loans purchased with
an alleged breach that are not identified on Schedule A.  The
indemnification provided under Section  1of  this Agreement
shall remain in full force and effect and shall survive until either the
Mortgage Loan has been paid in full, foreclosed, liquidated or otherwise retired
and the related Mortgaged Property or REO Property has been
liquidated.

        


        Section
3.              Seller's Right to
Repurchase.  Notwithstanding LBB's and Aurora's forbearance
from exercising its right to have the Seller immediately repurchase the Mortgage
Loans, the Seller shall have the right, but not the obligation, at any time, to
repurchase any or all of the Mortgage Loan(s) for an amount equal to the unpaid
principal plus outstanding interest plus fees due.

        


        Section
4.              Control of Defaulted
Mortgage Loans.  If the Mortgage loans have not been
repurchased by the Seller, LBB and/or Aurora, or its Servicer, shall have sole
and exclusive control over the servicing and administration of the Mortgage
Loan(s), including after default and, if applicable, over the marketing,
administration and disposition of any foreclosed Mortgaged Property or REO
Property relating to the Mortgage Loan(s) and the Seller shall not controvert or
dispute any costs incurred, or the amount of any selling price set or obtained
by LBB for any such property.  In the event the Seller repurchases any
Mortgage Loan, the Seller shall have sole and exclusive control over the
servicing and administration of the Mortgage Loan(s), including after default
and, if applicable, over the marketing, administration and disposition of any
foreclosed Mortgaged Property or REO Property relating to the Mortgage
Loan(s).  Notwithstanding anything to the contrary, in no event shall
a "full credit bid" made by LBB and/or Aurora or any other party at a
foreclosure sale of the Property securing the loan limit the rights of LBB
and/or Aurora or the obligations of the Seller under this
Agreement.

        


        Section
5.              Deposit of Funds to Secure
Obligations. To partially secure the Seller's obligation to make payment of the Losses hereunder,
and under, any other indemnification agreement entered into between LBB and/or
Aurora and Seller, the Seller shall pay, as a deposit against unrealized and
uncertain Losses, Six Hundred Forty Five Thousand and no/100 Dollars
($645,000.00) ("Deposit") as follows:

        


        1.           Simultaneously
with the execution and delivery of this Agreement, Seller shall deposit with
Aurora in immediately available funds a total amount equal to Three Hundred
Ninety Five Thousand and No/100th Dollars ($395,000.00).  This amount
is in addition to the Two Hundred Fifty Thousand and No/100th Dollars
($250,000.00) delivered to LBB and/or Aurora on Monday December 10, 2007, for a
total of Six Hundred Forty Five Thousand and No/100th Dollars ($645,000.00) to
be held as a deposit by LBB and/or Aurora.

        


        2.           Commencing
immediately, Aurora shall be entitled to hold back 25.00 basis points on all
loan production LBB and/or Aurora purchases from the Seller and to add that
basis point holdback (the "Holdback") to the Deposit balance.  Seller
agrees to deliver $300,000,000.00 (the Commitment Amount"), or $600,000,000 in
the next 24 months, in qualifying loans to LBB and/or Aurora on an annual basis
for the next twenty-four (24) months commencing immediately and ending December
31, 2009.  If at the end of each twelve (12) month period (or on
December 31, 2008, for year one, and December 31, 2009 for year two) the volume
delivery described herein is not satisfied, Seller promises and agrees to pay an
amount equal to 16.25 basis points on the difference of the loan balance
delivered and the Commitment Amount.  In the event that LBB and/or
Aurora no longer purchases residential mortgage loans, Seller shall have no
obligation to pay any amount for a shortfall on the delivery
commitment.


        
          
             


          

          
             


            
              

            

          

          
             


          

        

        


        3.           On
January 31, 2008 and continuing on the last day of each calendar month
thereafter, if the Deposit balance is less than Six Hundred Forty Five Thousand
and No/100th Dollars ($645,000.00) on the final day of that particular calendar
month, Seller promises and agrees to pay to Aurora, within ten (10) calendar
days, the difference between the Deposit balance and Six Hundred Forty Five
Thousand and No/100th Dollars ($645,000.00); provided however, that in no event
shall Seller be required to pay any amount into the Deposit that would result in
a total contribution, including both basis point holdbacks and cash payments, in
excess of a total of One Hundred Twenty-Five Thousand and No/100th Dollars
($125,000.00) for any calendar month.  If on the final day of a
particular calendar month the Deposit balance exceeds Six Hundred Forth Five
Thousand and No/100th Dollars ($645,000.00), LBB and/or Aurora agree that said
excess shall roll forward to the next calendar month's Deposit balance and agree
to credit the subsequent calendar month's balance by said excess amount, and
that any obligation of Seller to make payments to the Deposit shall also be
reduced by said credited amount.  Failure to use a credited amount
shall not extinguish the credit.

        


        Notwithstanding
the foregoing, in the event the remaining sum of the unpaid "Losses" on the
Mortgage Loans with alleged breaches as detailed on the attached Schedule A can
be reasonably estimated to be a sum less than $645,000, the Deposit balance
requirement shall be reduced accordingly.

        


        4.           LBB
and/or Aurora shall not apply any Deposit funds to a particular Mortgage Loan
until an actual loss has occurred and shall notify the Seller prior to applying
funds from the Deposit to the Losses on any particular Mortgage
Loan.  Pursuant to Section 1, above, LBB and/or Aurora shall apply
funds from the Deposit to the Losses on any particular loan in an amount equal
to only seventy-five percent (75%) of the actual Losses on that particular loan
and the remaining twenty-five percent (25%) of said Losses shall thereby be
permanently released and discharged.

        


        5.           Should
the Seller fail to remit any of the payments specified in Paragraphs 1 and/or 3
of this Section 5, LBB and/or Aurora may declare this Agreement null and void
and, except as to those Losses that shad have been previously released and
discharged as set forth herein, shall be entitled to enforce all rights and
remedies against the Seller under the Purchase. Agreement and Seller's Guide, In
the event Seller defaults under this Agreement, LBB and/or Aurora shall be
entitled to retain and keep as theirs all funds received from Seller under this
Agreement, but only to the extent of LLB/Aurora's actual or estimated future
losses.

        


        Section
6.            
 Remedies Not
Exclusive, LBB and/or Aurora's exercise of any remedy provided by any
Mortgage or any related mortgage note shall be a condition precedent to the
Seller's fulfillment of the Losses.  Notwithstanding, if LBB and/or
Aurora recover any amount through the exercise of any remedy provided by any
Mortgage or any related mortgage note, the Losses shall be reduced dollar for
dollar by the amount of the recovery.  Further, except as provided in
this Agreement, LBB and/or Aurora's exercise of any right or remedy under this
Agreement shall not limit its exercise of any other right or remedy provided to
LBB and/or Aurora by the Seller's Guide, the Purchase Agreement, applicable law,
by any other agreement to which it and the Seller are parties or
otherwise.  Except as provided in this Agreement, this Agreement is in
no way to be construed as a waiver of any rights or remedies that LBB and/or
Aurora currently has or may have in the future under the Purchase Agreement or
otherwise.

        


        Section
7.              No Waiver of Strict
Performance. Nothing in this Agreement shall be construed to waive LBB's
and/or Aurora's requirement for the Seller to strictly perform its obligations
under the Purchase Agreement and Seller's Guide in thepast, present, and future.
Unless expressly provided to the contrary, the failure of any party to insist
upon strict perfortnanco of any covenant of or obligation in this Agreement
shall not be a waiver of such party's right to demand strict compliance in the
future or to pursue or enforce whatever remedies may be available to such party
for any breach or default of or in such covenant or obligation (subject to the
applicable statutes of limitation). No consent or waiver, express or implied, to
or of any breach or default in the performance of any covenant or obligation in
this Agreement shall constitute a consent or waiver to or of any other breach or
default in the performance of the same or any other covenant or obligation
hereunder.


        
          
             


          

          
             


            
              

            

          

          
             


          

        

        


        Section
8.              Statute of
Limitations.  In consideration for allowing the Seller to enter
into his Agreement rather than repurchase the Mortgage Loans, the statute of
limitations (and other defenses based upon the passage of time) as to any and
all claims, known or unknown, that LBB and/or Aurora may have against the Seller
are hereby tolled  as they relate to the Mortgage Loans.

        


        Section
9.              Representations of the
Seller.  The Seller hereby represents and warrants to LBB and
Aurora that:

        


        (a)           (1)
The execution of this Agreement either has been (i) specifically approved by the
Board of Directors of the Seller and such approval is reflected in the minutes
of the meetings of such Board of Directors, or (ii) approved by an officer of
the Seller who was duly authorized by the Board of Directors to enter into
transactions of the type set forth in the Agreement and such authorization is
reflected in the minutes of the Board of Directors' meetings; and (2) ths
Agreement constitutes the "written agreement" of the Seller. The Seller (or any
successor thereto) further warrants that it shall continuously maintain such
"written agreement"as an official record of the Seller;

        


        (b)           Performance
of its obligations hereunder shall not violate, or require consent under, any
applicable law or regulation, or any agreement to which the Seller is a Party;
and

        


        (c)           This
Agreement shall be binding and enforceable against the Seller, its successors
and assigns in accordance with its terms.

        


        Section
10:            Mortgage Loan
File.  The Seller shall promptly deliver an executed copy of
this Agreement to LBB and/or Aurora, place an executed copy in its files
relating to the Mortgage Loan(s) and refer to the existence of this Agreement in
any form, schedule, correspondence or other document forwarded to LBB and/or
Aurora, however transmitted, relating to the affected Mortgage Loan(s),
including, without limitation, such communications as are related to
delinquencies, defaults and foreclosures,

        


        Section
11.            Confidentiality.  The
Parties agree not to disclose, without prior written consent of each other, the
provisions of this Agreement to any person, firm, organization, or entity of any
and every type, public or private, unless required by subpoena, court order, law
or regulation, except that the parties agree that the Agreement may be used in a
subsequent proceeding in order to enforce the terms of this Agreement in a court
of law, in a court of equity by injunction or otherwise, by way of defense, or
in any other appropriate manner.  However, this provision shall not
limit the right to share information among affiliate or subsidiary entities and
as allowed under the Gramm-Leach Bliley Act.

        


        Section
12.            Miscellaneous.

        


        (a)           This
Agreement Shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.

        


        (b)           This
Agreement may only be amended or modified in writing. signed by the party
against whom enforcement of such amendment or modification is
sought.  Any of the terms or conditions of this Agreement may be
waived at any time by the party or parties entitled to the benefit thereof, but
only by a writing signed by the party or parties waiving such terms or
conditions.


        
          
             


          

          
             


            
              

            

          

          
             


          

        

        


        (c)           The
invalidity of any portion hereof shall not affect the validity, force or effect
of the remaining portions hereof. If it is ever held that any restriction
hereunder is too broad to permit enforcement of such restriction to its fullest
extent, such restriction shall be enforced to the maximum extent permitted by
law. Should this Agreement or any portion thereof be deemed invalid,
unenforceable, illegal, voidable, or void for public policy reasons, the Forward
Commitment shall remain unaffected.

        


        (d) This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, regardless of the conflict of laws principles thereof except as
preempted by Federal Law.

        


        (e)           The
parties acknowledge and agree that performance under this Agreement shall be
made in Littleton, Douglas County, State of Colorado. This Agreement shall be
deemed to have been executed in Douglas County, Colorado. Seller consents to
personal jurisdiction in the Courts of District Court for Douglas County
Colorado. Any action under this Agreement may be brought in the District Court
for Douglas County, Colorado or Federal District Court in Denver, Colorado at
the discretion of LBB and/or Aurora

        


        (f)           This
Agreement may be executed in counterparts, each of which, when so executed and
delivered, shall be deemed to be an original and all of which, taken together,
shall constitute one and the same agreement.

        


        (g)           Each
party warrants and represents that in executing this Agreement, they have relied
upon legal advice from the attorney of their choice; that the terms of this
Agreement have been read and its consequences (including risks, complications,
and costs) have been completely explained to them by that attorney; and that
they fully understand the terms of this Agreement.

        


        (h)           Each
party acknowledges and warrants that their execution of this agreement is free
and voluntary.

        


        (i)           The
parties acknowledge that they have each had the opportunity to review and/or
modify this Agreement. The parties agree that the construction and
interpretation of this agreement shall not he strictly construed against any
party, and if any ambiguity or question of intent arises with respect to any
provision of this Agreement, this Agreement shall be construed as if drafted
jointly by all parties.

        


        (j)           Notices
shall be given (and deemed effective) as set forth in the Purchase
Agreement.

        


        (k)           The
parties acknowledge that time is of the essence in the performance of the
obligations of this Agreement.

        


        (l)           This
Agreement may be sold and/or assigned by Aurora or LBB, including any rights and
obligations hereunder, without notice to Seller.

         

        (m)           Each
party agrees to execute any and all documents reasonably required to effectuate
the terms of this Agreement.


        
          
             


          

          
             


            
              

            

          

          
             


          

        

        


        (n)           The
descriptive headings of the several paragraphs contained in this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

        


        (o)           Capitalized
terms used in this Agreement without definition that are defined in the Seller's
Guide are used herein as defined in the Seller's Guide.

        


        


        


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LEFT INTENTIONALLY' BLANK]

        


        


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      IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as
the date set forth above.

      


      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              SECURITY
      NATIONAL MORTGAGE COMPANY

                                            	 
      	
                                              LEHMAN
      BROTHERS BANK, FSB

                                            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                              By:
      /s/ J. Lynn
      Beckstead                           
      

                                            	 	
                                              By:
      /s/ Russell V.
      Brady                     
      

                                            	 
      	 
      
	
                                              Printed
      Name:  ___________________

                                            	 
      	
                                              Printed
      Name: Russell V.
      Brady         

                                            	 
      	 
      
	
                                              Title:
      __________________________

                                            	 
      	
                                              Title:
      /s/ Authorized
      Signatory         
      

                                            	 
      	 
      
	
                                              Date:
      __________________________

                                            	 
      	
                                              Date:  January 8,
      2008                         
      

                                            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                              AURORA
      LOAN SERVICES LLC

                                            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                              By:
      /s/ Russell V.
      Brady             
             

                                            	 
      	 
      
	 
      	 
      	
                                              Printed
      Name: Russell
      V.Brady        
      

                                            	 
      	 
      
	 
      	 
      	
                                              Title:
      Vice President                           
      

                                            	 
      	 
      
	 
      	 
      	
                                              Date:
      January 8,
      2008