Document:

Exhibit 10.5

 

SECOND AMENDED AND RESTATED

 

OPERATING AGREEMENT

 

of

 

RKT HOLDINGS, LLC

 

Dated as of [·], 2020

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I   DEFINITIONS AND USAGE
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
 
    	
1
    
	
Section 1.02
    	
Other Definitional and Interpretative Provisions
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II   THE COMPANY
    	
 
    	
13
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Formation
    	
 
    	
13
    
	
Section 2.02
    	
Name
    	
 
    	
13
    
	
Section 2.03
    	
Term
    	
 
    	
13
    
	
Section 2.04
    	
Registered Agent and Registered Office
    	
 
    	
14
    
	
Section 2.05
    	
Purposes
    	
 
    	
14
    
	
Section 2.06
    	
Powers of the Company
    	
 
    	
14
    
	
Section 2.07
    	
Partnership Tax Status
    	
 
    	
14
    
	
Section 2.08
    	
Regulation of Internal Affairs
    	
 
    	
14
    
	
Section 2.09
    	
Ownership of Property
    	
 
    	
14
    
	
Section 2.10
    	
Subsidiaries
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III   UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS
    	
 
    	
14
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Units; Admission of Members
    	
 
    	
14
    
	
Section 3.02
    	
Substitute Members and Additional Members
    	
 
    	
15
    
	
Section 3.03
    	
Tax and Accounting Information
    	
 
    	
16
    
	
Section 3.04
    	
Books and Records
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV   ROCKETCO OWNERSHIP; RESTRICTIONS ON ROCKETCO STOCK
    	
 
    	
18
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
RocketCo Ownership
    	
 
    	
18
    
	
Section 4.02
    	
Restrictions on RocketCo Common Stock
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V   CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS
    	
 
    	
21
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Capital Contributions
    	
 
    	
21
    
	
Section 5.02
    	
Capital Accounts
    	
 
    	
22
    
	
Section 5.03
    	
Amounts and Priority of Distributions
    	
 
    	
23
    
	
Section 5.04
    	
Allocations
    	
 
    	
26
    
	
Section 5.05
    	
Other Allocation Rules
    	
 
    	
28
    
	
Section 5.06
    	
Tax Withholding; Withholding Advances
    	
 
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI   CERTAIN TAX MATTERS
    	
31
    
	
 
    	
 
    
	
Section 6.01
    	
Partnership Representative
    	
 
    	
31
    
	
Section 6.02
    	
Section 754 Election
    	
 
    	
32
    
	
Section 6.03
    	
Debt Allocation
    	
 
    	
32
    

 

i

 

	
ARTICLE VII MANAGEMENT OF THE COMPANY
    	
 
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.01
    	
Management by the Managing Member
    	
 
    	
32
    
	
Section 7.02
    	
Withdrawal of the Managing Member
    	
 
    	
33
    
	
Section 7.03
    	
Decisions by the Members
    	
 
    	
33
    
	
Section 7.04
    	
Fiduciary Duties
    	
 
    	
34
    
	
Section 7.05
    	
Officers
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII   TRANSFERS OF INTERESTS
    	
36
    
	
 
    	
 
    
	
Section 8.01
    	
Restrictions on Transfers
    	
 
    	
36
    
	
Section 8.02
    	
Certain Permitted Transfers
    	
 
    	
37
    
	
Section 8.03
    	
Registration of Transfers
    	
 
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX   LIMITATION ON LIABILITY, EXCULPATION AND INDEMNIFICATION
    	
38
    
	
 
    	
 
    
	
Section 9.01
    	
Limitation on Liability
    	
 
    	
38
    
	
Section 9.02
    	
Exculpation and Indemnification
    	
 
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X   DISSOLUTION AND TERMINATION
    	
 
    	
41
    
	
 
    	
 
    	
 
    
	
Section 10.01
    	
Dissolution
    	
 
    	
41
    
	
Section 10.02
    	
Winding Up of the Company
    	
 
    	
41
    
	
Section 10.03
    	
Termination
    	
 
    	
42
    
	
Section 10.04
    	
Survival
    	
 
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XI   MISCELLANEOUS
    	
 
    	
42
    
	
 
    	
 
    	
 
    
	
Section 11.01
    	
Expenses
    	
 
    	
42
    
	
Section 11.02
    	
Further Assurances
    	
 
    	
42
    
	
Section 11.03
    	
Notices
    	
 
    	
43
    
	
Section 11.04
    	
Binding Effect; Benefit; Assignment
    	
 
    	
43
    
	
Section 11.05
    	
Jurisdiction
    	
 
    	
43
    
	
Section 11.06
    	
Counterparts
    	
 
    	
44
    
	
Section 11.07
    	
Entire Agreement
    	
 
    	
44
    
	
Section 11.08
    	
Severability
    	
 
    	
44
    
	
Section 11.09
    	
Amendment
    	
 
    	
45
    
	
Section 11.10
    	
Confidentiality
    	
 
    	
45
    
	
Section 11.11
    	
Governing Law
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
Schedule   A        Common Units
    	
 
    

 

ii

 

SECOND AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”) OF RKT HOLDINGS, LLC, a Michigan limited liability company (the “Company”), dated as of [·], 2020, by and among the Company, Rocket Companies, Inc., a Delaware corporation (“RocketCo”), Rock Holdings Inc., a Michigan corporation (“RHI”) and Daniel Gilbert (“Gilbert”).

 

W I T N E S S E T H:

 

WHEREAS, the Company has been heretofore formed as a limited liability company under the Michigan Act (as defined below) pursuant to the articles of organization which were executed and filed with the Department of Licensing and Regulatory Affairs, Corporations, Securities and Commercial Licensing Bureau of the State of Michigan on March 6, 2020;

 

WHEREAS, RHI entered into the initial Operating Agreement of the Company, dated as of March 6, 2020 (the “Initial Operating Agreement”);

 

WHEREAS, the Initial Operating Agreement was amended and restated in its entirety by the Amended and Restated Operating Agreement of the Company, dated as of [·], 2020, by and among the Company, RHI and Gilbert (the “A&R Operating Agreement”); and

 

WHEREAS, the Company, RHI and Gilbert desire to enter into this Agreement to admit RocketCo as a Member (as defined below) and to make the modifications hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the parties hereto hereby agree, to amend and restate the A&R Operating Agreement in its entirety as follows:

 

ARTICLE I

 

DEFINITIONS AND USAGE

 

Section 1.01          Definitions.

 

(a)           The following terms shall have the following meanings for the purposes of this Agreement:

 

“Additional Member” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the new issuance of Units to such Person.

 

“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

 

 

(i)            Credit to such Capital Account any amounts that such Member is deemed to be obligated to restore pursuant to the penultimate sentence in Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

 

(ii)           Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

 

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that no Member nor any Affiliate of any Member shall be deemed to be an Affiliate of any other Member or any of its Affiliates solely by virtue of such Members’ Units.

 

“Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority or Regulatory Agency that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.

 

“Available Cash Flow” means, for any period, the Company’s consolidated net income determined in accordance with GAAP, adjusted by the Managing Member to exclude non-cash items, extraordinary or one-time items of gain or loss, any compensation expense related to Units or other Equity Securities issued under any management equity plan of RocketCo or the Company, and, to the extent not reflected in consolidated net income determined in accordance with GAAP, less any Reserves established during such period (including the amount of any net increase during such period to a Reserve established in a prior period) and plus the amount of any net decrease during such period to a Reserve established by a prior period.

 

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York or Detroit, Michigan are authorized or required by Applicable Law to close.

 

“Capital Account” means the capital account established and maintained for each Member pursuant to Section 5.02.

 

“Capital Contribution” means, with respect to any Member, the amount of money and the initial Carrying Value of any Property (other than money) contributed to the Company.

 

“Carrying Value” means with respect to any Property (other than money), such Property’s adjusted basis for U.S. federal income tax purposes, except as follows:

 

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(i)            The initial Carrying Value of any such Property contributed by a Member to the Company shall be the gross fair market value of such Property, as reasonably determined by the Managing Member;

 

(ii)           The Carrying Values of all such Properties shall be adjusted to equal their respective gross fair market values (taking Section 7701(g) of the Code into account), as reasonably determined by the Managing Member, at the time of any Revaluation pursuant to Section 5.02(c);

 

(iii)          The Carrying Value of any item of such Properties distributed to any Member shall be adjusted to equal the gross fair market value (taking Section 7701(g) of the Code into account) of such Property on the date of distribution as reasonably determined by the Managing Member; and

 

(iv)          The Carrying Values of such Properties shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such Properties pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the definition of “Net Income” and “Net Loss” or Section 5.04(b)(vi); provided, however, that Carrying Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).  If the Carrying Value of such Property has been determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Net Income and Net Loss.

 

“Class A Common Stock” means Class A common stock, $0.00001 par value per share, of RocketCo.

 

“Class B Common Stock” means Class B common stock, $0.00001 par value per share, of RocketCo.

 

“Class C Common Stock” means Class C common stock, $0.00001 par value per share, of RocketCo.

 

“Class D Common Stock” means Class D common stock, $0.00001 par value per share, of RocketCo.

 

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

 

“Common Unit” means a common limited liability company interest in the Company.

 

“Company Minimum Gain” means “partnership minimum gain,” as defined in Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).

 

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“Control” including the terms “controlling,” “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 a person, whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of a corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary.

 

“Covered Person” means (i) each Member or an Affiliate thereof, in each case in such capacity, (ii) each officer, director, shareholder, member, partner, employee, representative, agent or trustee of a Member or an Affiliate thereof, in all cases in such capacity and (iii) each officer, director, shareholder (other than any public shareholder of RocketCo that is not a Member), member, partner, employee, representative, agent or trustee of the Managing Member, RocketCo (in the event RocketCo is not the Managing Member), the Company or an Affiliate controlled thereby, in all cases in such capacity.

 

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Carrying Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount that bears the same ratio to such beginning Carrying Value as the U.S. federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for U.S. federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the Managing Member.

 

“DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time.

 

“Equity Securities” means, with respect to any Person, any (i) membership interests or shares of capital stock, (ii) equity, ownership, voting, profit or participation interests or (iii) similar rights or securities in such Person or any of its Subsidiaries, or any rights or securities convertible into or exchangeable for, options or other rights to acquire from such Person or any of its Subsidiaries, or obligation on the part of such Person or any of its Subsidiaries to issue, any of the foregoing.

 

“Exchange Agreement” means the Exchange Agreement, dated as of the date hereof, by and among RocketCo, the Company and the holders of Common Units and shares of Class C Common Stock and Class D Common Stock from time to time party thereto.

 

“Family Member” means, with respect to any natural person, the spouse, parents, grandparents, lineal descendants, siblings of such person or such person’s spouse and lineal descendants of siblings of such person or such person’s spouse.  Lineal

 

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descendants shall include adopted persons, but only so long as they are adopted during minority.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“Fiscal Year” means the Company’s fiscal year, which shall initially be the calendar year and which may be changed from time to time as determined by the Managing Member.

 

“Form 8-A Effective Time” has the meaning set forth in the Reorganization Agreement.

 

“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

 

“Highest Member Tax Amount” means the Member receiving the greatest proportionate allocation of taxable income attributable to its ownership of the Company  in the applicable tax period (or portion thereof) (including as a result of the application of Section 704(c) of the Code or otherwise), and calculated by multiplying (x) the aggregate taxable income allocated to such Member  (excluding the tax consequences resulting from any adjustment under Sections 743(b) and 734(b) of the Code in such applicable taxable period (or portion thereof), by (y) the Tax Rate.

 

“Indebtedness” means (a) all indebtedness for borrowed money (including capitalized lease obligations, sale-leaseback transactions or other similar transactions, however evidenced), (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (c) notes payable and (d) lines of credit and any other agreements relating to the borrowing of money or extension of credit.

 

“IPO” means the initial underwritten public offering of RocketCo.

 

“Limited Ownership Minimum” means, with respect to the Rock Members, if the number of its Owned Shares exceeds [·], as adjusted for any stock split, stock dividend, reverse stock split, combination, recapitalization, reclassification or similar event.

 

“Managing Member” means (i) RocketCo so long as RocketCo has not withdrawn as the Managing Member pursuant to Section 7.02 and (ii) any successor thereof appointed as Managing Member in accordance with Section 7.02.

 

“Member” means any Person named as a Member of the Company on the Member Schedule and the books and records of the Company, as the same may be amended from time to time to reflect any Person admitted as an Additional Member or a Substitute Member, for so long as such Person continues to be a Member of the Company.

 

5

 

“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).

 

“Member Nonrecourse Debt Minimum Gain” means an amount with respect to each “partner nonrecourse debt” (as defined in Treasury Regulation Section 1.704-2(b)(4)) equal to the Company Minimum Gain that would result if such partner nonrecourse debt were treated as a nonrecourse liability (as defined in Treasury Regulation Section 1.752-1(a)(2)) determined in accordance with Treasury Regulation Section 1.704-2(i)(3).

 

“Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse deductions” in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

 

“Michigan Act” means the Michigan Limited Liability Company Act.

 

“Net Income” and “Net Loss” mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such Fiscal Year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments (without duplication):

 

(i)            Any income of the Company that is exempt from U.S. federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “Net Income” and “Net Loss” shall be added to such taxable income or loss;

 

(ii)           Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income and Net Loss pursuant to this definition of “Net Income” and “Net Loss,” shall be treated as deductible items;

 

(iii)          In the event the Carrying Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of “Carrying Value,” the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Carrying Value of the asset) or an item of loss (if the adjustment decreases the Carrying Value of the asset) from the disposition of such asset and shall be taken into account, immediately prior to the event giving rise to such adjustment, for purposes of computing Net Income or Net Loss;

 

(iv)          Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed by reference to the Carrying Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Carrying Value;

 

6

 

(v)           In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of Depreciation;

 

(vi)          To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Net Income or Net Loss; and

 

(vii)         Notwithstanding any other provision of this definition, any items that are specially allocated pursuant to Section 5.04(b), Section 5.04(c) and Section 5.04(d) shall not be taken into account in computing Net Income and Net Loss.

 

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 5.04(b), Section 5.04(c) and Section 5.04(d) shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.

 

“Non-RocketCo Member” means any Member that is not a RocketCo Member.

 

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).

 

“Owned Shares” with respect to the Rock Members, the total number of shares of Class A Common Stock beneficially owned (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) by the Rock Members (including, for the purposes of this definition, any Person that owns either Units or RocketCo Common Stock and that otherwise qualifies under the definition of “Rock Member”), in the aggregate and without duplication, as of the date of such calculation (determined on an “as-converted” basis taking into account any and all securities then convertible into, or exercisable or exchangeable for, shares of Class A Common Stock (including Common Units and shares of Class C Common Stock exchangeable pursuant to the Exchange Agreement).

 

“Ownership Minimum” means, with respect to the Rock Members, if the number of its Owned Shares exceeds [•], as adjusted for any stock split, stock dividend, reverse stock split, combination, recapitalization, reclassification or similar event.

 

“Paired Interest” has the meaning set forth in the Exchange Agreement.

 

“Partnership Audit Provisions” means Title XI, Section 1101, of the Bipartisan Budget Act of 2015, P.L. 114-74 (together with any subsequent amendments

 

7

 

thereto, Treasury Regulations promulgated thereunder, and published administrative interpretations thereof, and any comparable provisions of state or local tax law).

 

“Percentage Interest” means, with respect to any Member, a fractional amount, expressed as a percentage: (i) the numerator of which is the aggregate number of Common Units owned of record thereby and (ii) the denominator of which is the aggregate number of Common Units issued and outstanding.  The sum of the outstanding Percentage Interests of all Members shall at all times equal 100%.

 

“Permitted Transfer” means any Transfer (i) to any Permitted Transferee or (ii) following which such Units continue to be held by RHI or any Permitted Transferee and the direct or indirect equityholders of RHI or such Permitted Transferee immediately prior to such Transfer continue to hold a majority of the beneficial interests of RHI or such Permitted Transferee, as applicable, following such Transfer.

 

“Permitted Transferee” means, with respect to any Member, (i) RHI or any Rock Equityholder, (ii) any Family Member of such holder or any Family Member of any Rock Equityholder, (iii) any trust, family-partnership or estate-planning vehicle so long as such holder, any Family Member of such holder, any Rock Equityholder or any Family Member of a Rock Equityholder are the sole economic beneficiaries thereof, (iv) any partnership, corporation or other entity controlled by, or a majority of which is beneficially owned by, such holder or any of the persons listed in the foregoing clauses (i)-(iii), (v) any charitable trust or organization that is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and controlled by such holder or any of the persons listed in the foregoing clauses (i)-(iv), (vi) an individual mandated under a qualified domestic relations order or (vii) a legal or personal representative of such holder, any Family Member of such holder, any Rock Equityholder or any Family Member of a Rock Equityholder in the event of the death or disability thereof.

 

“Person” means any individual, corporation, partnership, unincorporated association or other entity.

 

“Prime Rate” means the rate of interest from time to time identified by JP Morgan Chase, N.A. as being its “prime” or “reference” rate.

 

“Property” means an interest of any kind in any real, personal or intellectual (or mixed) property, including cash, and any improvements thereto, and shall include both tangible and intangible property.

 

“RocketCo Common Stock” means all classes and series of common stock of RocketCo, including the Class A Common Stock, Class B Common Stock, Class C Common Stock and Class D Common Stock.

 

“RocketCo Equity Plan” means the Rocket Companies, Inc. 2020 Management Incentive Plan, as the same may be amended from time to time.

 

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“RocketCo Member” means (i) RocketCo and (ii) any Subsidiary of RocketCo (other than the Company and its Subsidiaries) that is a Member.

 

“Purchase Agreement” means the Purchase Agreement, dated as of the date hereof, by and between RHI and Rocket Companies, Inc.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and between RocketCo and RHI.

 

“Regulatory Agency” means the SEC, FINRA and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company or any of its Subsidiaries.

 

“Relative Percentage Interest” means, with respect to any Member relative to another Member or Members, a fractional amount, expressed as a percentage, the numerator of which is the Percentage Interest of such Member; and the denominator of which is (x) the Percentage Interest of such Member plus (y) the aggregate Percentage Interest of such other Member or Members.

 

“Reorganization” means the transactions contemplated by the Reorganization Agreement.

 

“Reorganization Agreement” means the Reorganization Agreement by and between RocketCo, the Company, RHI and Gilbert.

 

“Reorganization Date Capital Account Balance” means, with respect to any Member, the positive Capital Account balance of such Member as of immediately following the Reorganization, the amount or deemed value of which is set forth on the Member Schedule.

 

“Reorganization Documents” means the Reorganization Agreement, this Agreement, the Tax Receivable Agreement, the Exchange Agreement, the Purchase Agreement and the Registration Rights Agreement.

 

“Reserves” means, as of any date of determination, amounts allocated by the Managing Member, in its reasonable judgment, to reserves maintained for working capital of the Company, for contingencies of the Company, for operating expenses and debt reduction of the Company.

 

“Rock Equityholders” means the direct or indirect equityholders of RHI.

 

“Rock Members” means (i) RHI, (ii) Gilbert and (iii) any Permitted Transferee of a Rock Member that owns Units from time to time.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity

 

9

 

of which more than 50% of the total voting power of Equity Securities or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

 

“Substitute Member” means any Person admitted as a Member of the Company pursuant to Section 3.02 in connection with the Transfer of then-existing Units to such Person.

 

“Tax Amount” means the Highest Member Tax Amount divided by the Percentage Interest of the Member described in the definition of “Highest Member Tax Amount”.

 

“Tax Distribution” means a distribution made by the Company pursuant to Section 5.03(e)(i) or Section 5.03(e)(iii) or a distribution made by the Company pursuant to another provision of Section 5.03 but designated as a Tax Distribution pursuant to Section 5.03(e)(ii).

 

“Tax Distribution Amount” means, with respect to a Member’s Units, whichever of the following applies with respect to the applicable Tax Distribution, in each case in amount not less than zero:

 

(i)            With respect to a Tax Distribution pursuant to Section 5.03(e)(i), the excess, if any, of (A) such Member’s required annualized income installment for such estimated payment date under Section 6655(e) of the Code, assuming that (x) such Member is a corporation (which assumption, for the avoidance of doubt, shall not affect the determination of the Tax Rate), (y) Section 6655(e)(2)(C)(ii) is in effect and (z) such Member’s only income is from the Company, which amount shall be calculated based on the projections believed by the Managing Member in good faith to be, reasonable projections of the product of (1) the Tax Amount and (2) such Member’s Percentage Interest over (B) the aggregate amount of Tax Distributions designated by the Company pursuant to Section 5.03(e)(ii) with respect to such Units since the date of the previous Tax Distribution pursuant to Section 5.03(e)(i) (or if no such Tax Distribution was required to be made, the date such Tax Distribution would have been made pursuant to Section 5.03(e)(i)).

 

(ii)           With respect to the designation of an amount as a Tax Distribution pursuant to Section 5.03(e)(ii), the product of (x) the Tax Amount projected, in the good faith belief of the Managing Member, during the period since the date of the previous Tax Distribution (or, if more recent, the date that the previous Tax Distribution pursuant to Section 5.03(e)(i) would have been made or, in the case of the first distribution pursuant to Section 5.03(b), the date of this Agreement) and (y) such Member’s Percentage Interest.

 

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(iii)          With respect to an entire Fiscal Year to be calculated for purposes of Section 5.03(e)(iii), the excess, if any, of (A) the product of (x) the Tax Amount for the relevant Fiscal Year and (y) such Member’s Percentage Interest, over (B) the aggregate amount of Tax Distributions (other than Tax Distributions under Section 5.03(e)(iii) with respect to a prior Fiscal Year) with respect to such Units made with respect to such Fiscal Year.

 

“Tax Rate” means the highest marginal federal, state and local tax rate for an individual or corporation that is resident in Michigan, New York City or California (whichever is higher) applicable to ordinary income, qualified dividend income or capital gains, as appropriate, taking into account the holding period of the assets disposed of and the year in which the taxable net income is recognized by the Company, and taking into account the deductibility of state and local income taxes as applicable at the time for U.S. federal income tax purposes and any limitations thereon including pursuant to Section 68 of the Code or Section 164 of the Code, which Tax Rate shall be the same for all Members.

 

“Tax Receivable Agreement” means the Tax Receivable Agreement by and between RocketCo, RHI and Gilbert.

 

“Transfer” of a Unit means, directly or indirectly, any sale, assignment, transfer, exchange, gift, bequest, pledge, hypothecation or other disposition or encumbrance of such Unit or any legal or beneficial interest in such Unit, in whole or in part, whether or not for value and whether voluntary or involuntary or by operation of Applicable Law, and shall include all matters deemed to constitute a Transfer under Article VIII; provided, however, that the following shall not be considered a “Transfer”: (i) the pledge of Units by a Member that creates a mere security interest in such Units pursuant to a bona fide loan or indebtedness transaction so long as such Member continues to exercise sole voting control over such pledged Units; provided, however, that a foreclosure on such Units or other similar action by the pledgee shall constitute a “Transfer”; or (ii) the fact that the spouse of any Member possesses or obtains an interest in such Member’s Units arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a “Transfer” of such Units.  The terms “Transferred”, “Transferring”, “Transferor”, “Transferee” and “Transferable” have meanings correlative to the foregoing.

 

“Treasury Regulations” mean the regulations promulgated under the Code, as amended from time to time.

 

“Units” means Common Units or any other class of limited liability interests in the Company designated by the Company after the date hereof in accordance with this Agreement; provided that any type, class or series of Units shall have the designations, preferences or special rights set forth or referenced in this Agreement, and the membership interests of the Company represented by such type, class or series of Units shall be determined in accordance with such designations, preferences or special rights.

 

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(b)           Each of the following terms is defined in the Section set forth opposite such term:

 

	
Term
    	
 
    	
Section
    
	
A&R Operating Agreement
    	
 
    	
Recitals
    
	
Agreement
    	
 
    	
Preamble
    
	
Company
    	
 
    	
Preamble
    
	
Confidential Information
    	
 
    	
Section 11.10(b)
    
	
Controlled Entities
    	
 
    	
Section 9.02(e)
    
	
Dissolution Event
    	
 
    	
Section 10.01(c)
    
	
Economic RocketCo Security
    	
 
    	
Section 4.01(a)
    
	
e-mail
    	
 
    	
Section 11.03
    
	
Member Parties
    	
 
    	
Section 11.10(a)
    
	
Member Schedule
    	
 
    	
Section 3.01(a)
    
	
Expenses
    	
 
    	
Section 9.02(e)
    
	
GAAP
    	
 
    	
Section 3.03(b)
    
	
Gilbert
    	
 
    	
Preamble
    
	
Imputed Underpayment Amount
    	
 
    	
Section 6.01(b)
    
	
Indemnification Sources
    	
 
    	
Section 9.02(e)
    
	
Indemnitee-Related Entities
    	
 
    	
Section 9.02(e)(i)
    
	
Initial Operating Agreement
    	
 
    	
Recitals
    
	
Jointly Indemnifiable Claims
    	
 
    	
Section 9.02(e)(ii)
    
	
Officers
    	
 
    	
Section 7.05(a)
    
	
Partnership Representative
    	
 
    	
Section 6.01(a)
    
	
Process Agent
    	
 
    	
Section 11.05(b)
    
	
Regulatory Allocations
    	
 
    	
Section 5.04(c)
    
	
Revaluation
    	
 
    	
Section 5.02(c)
    
	
RHI
    	
 
    	
Preamble
    
	
RocketCo
    	
 
    	
Preamble
    
	
Withholding Advances
    	
 
    	
Section 5.06(b)
    

 

Section 1.02          Other Definitional and Interpretative Provisions.  The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Articles, Sections and Schedules are to Articles, Sections and Schedules of this Agreement unless otherwise specified.  All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  The word “or” shall be disjunctive but not exclusive. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from

 

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time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law.  As used in this Agreement, all references to “majority in interest” and phrases of similar import shall be deemed to refer to such percentage or fraction of interest based on the Relative Percentage Interests of the Members subject to such determination.  Unless otherwise expressly provided herein, when any approval, consent or other matter requires any action or approval of any group of Members, including any holders of any class of Units, such approval, consent or other matter shall require the approval of a majority in interest of such group of Members.  Except to the extent otherwise expressly provided herein, all references to any Member shall be deemed to refer solely to such Person in its capacity as such Member and not in any other capacity.

 

ARTICLE II

 

THE COMPANY

 

Section 2.01          Formation.  The Company was formed upon the filing of the articles of organization of the Company with the Department of Licensing and Regulatory Affairs, Corporations, Securities and Commercial Licensing Bureau of the State of Michigan on March 6, 2020.  The Managing Member or an “authorized agent” within the meaning of the Michigan Act shall file and record any amendments or restatements to the articles of organization of the Company and such other certificates and documents (and any amendments or restatements thereof) as may be required under the laws of the State of Michigan and of any other jurisdiction in which the Company may conduct business.  The authorized agent or representative shall, on request, provide any Member with copies of each such document as filed and recorded.  The Members hereby agree that the Company and its Subsidiaries shall be governed by the terms and conditions of this Agreement and, except as provided herein, the Michigan Act.

 

Section 2.02          Name.  The name of the Company shall be RKT Holdings, LLC; provided that the Managing Member may change the name of the Company to such other name as the Managing Member shall determine in its sole discretion, and shall have the authority to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of the Managing Member, may be necessary or advisable to effect such change.

 

Section 2.03          Term.  The Company shall have perpetual existence unless sooner dissolved and its affairs wound up as provided in Article X.

 

Section 2.04          Registered Agent and Registered Office.  The name of the registered agent of the Company for service of process on the Company in the State of Michigan shall be CT Corporation, and the address of such registered agent and the address of the registered office of the Company in the State of Michigan shall be The Corporation Company, 40600 Ann Arbor Road East, Suite 201, Plymouth, Michigan

 

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48170.  Such office and such agent may be changed to such place within the State of Michigan and any successor registered agent, respectively, as may be determined from time to time by the Managing Member in accordance with the Michigan Act.

 

Section 2.05          Purposes.  The primary business and purpose of the Company shall be to engage in such activities as are permitted under the Michigan Act and determined from time to time by the Managing Member in accordance with the terms and conditions of this Agreement.

 

Section 2.06          Powers of the Company.  The Company shall have the power and authority to take any and all actions necessary, appropriate or advisable to or for the furtherance of the purposes set forth in Section 2.05.

 

Section 2.07          Partnership Tax Status.  The Members intend that the Company shall be treated as a partnership for federal, state and local income tax purposes to the extent such treatment is available, and agree to take (or refrain from taking) such actions as may be necessary to receive and maintain such treatment and refrain from taking any actions inconsistent thereof.

 

Section 2.08          Regulation of Internal Affairs.  The internal affairs of the Company and the conduct of its business shall be regulated by this Agreement, and to the extent not provided for herein, shall be determined by the Managing Member.

 

Section 2.09          Ownership of Property.  Legal title to all Property, conveyed to, or held by the Company or its Subsidiaries shall reside in the Company or its Subsidiaries and shall be conveyed only in the name of the Company or its Subsidiaries and no Member or any other Person, individually, shall have any ownership of such Property.

 

Section 2.10          Subsidiaries.  The Company shall cause the business and affairs of each of the Subsidiaries to be managed by the Managing Member in accordance with and in a manner consistent with this Agreement.

 

ARTICLE III

 

UNITS; MEMBERS; BOOKS AND RECORDS; REPORTS

 

Section 3.01          Units; Admission of Members.

 

(a)           Effective upon the Reorganization, pursuant to Section 2.1(d)(ii) of the Reorganization Agreement, (i) RocketCo has been admitted to the Company as the Managing Member and (ii) the Company has hereby reclassified all membership interests of the Company outstanding as of immediately prior to the Form 8-A Effective Time into the number of Common Units, in the aggregate, set forth on Schedule A (the “Member Schedule”).  The Member Schedule shall be maintained by the Managing Member on behalf of the Company in accordance with this Agreement and, upon any subsequent update to the Member Schedule, the Managing Member shall promptly deliver a copy of such updated Member Schedule to each Member. When any Units or other Equity

 

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Securities of the Company are issued, repurchased, redeemed, converted or Transferred in accordance with this Agreement, the Member Schedule shall be amended by the Managing Member to reflect such issuance, repurchase, redemption or Transfer, the admission of additional or substitute Members and the resulting Percentage Interest of each Member.  Following the date hereof, no Person shall be admitted as a Member and no additional Units shall be issued except as expressly provided herein.

 

(b)           The Managing Member may cause the Company to authorize and issue from time to time such other Units or other Equity Securities of any type, class or series and having the designations, preferences or special rights as may be determined the Managing Member.  Such Units or other Equity Securities may be issued pursuant to such agreements as the Managing Member shall approve, with respect to Persons employed by or otherwise performing services for the Company or any of its Subsidiaries, other equity compensation agreements, options or warrants.  When any such other Units or other Equity Securities are authorized and issued, the Member Schedule and this Agreement shall be amended by the Managing Member to reflect such additional issuances and resulting dilution, which shall be borne pro rata by all Members based on their Common Units.

 

Section 3.02          Substitute Members and Additional Members.

 

(a)           No Transferee of any Units or Person to whom any Units are issued pursuant to this Agreement shall be admitted as a Member hereunder or acquire any rights hereunder, including any class voting rights or the right to receive distributions and allocations in respect of the Transferred or issued Units, as applicable, unless (i) such Units are Transferred or issued in compliance with the provisions of this Agreement (including Article VIII) and (ii) such Transferee or recipient shall have executed and delivered to the Company such instruments as the Managing Member deems necessary or desirable, in its reasonable discretion, to effectuate the admission of such Transferee or recipient as a Member and to confirm the agreement of such Transferee or recipient to be bound by all the terms and provisions of this Agreement.  Upon complying with the immediately preceding sentence, without the need for any further action of any Person, a Transferee or recipient shall be deemed admitted to the Company as a Member.  A Substitute Member shall enjoy the same rights, and be subject to the same obligations, as the Transferor; provided that such Transferor shall not be relieved of any obligation or liability hereunder arising prior to the consummation of such Transfer but shall be relieved of all future obligations with respect to the Units so Transferred.  As promptly as practicable after the admission of any Person as a Member, the books and records of the Company shall be changed to reflect such admission of a Substitute Member or Additional Member.  In the event of any admission of a Substitute Member or Additional Member pursuant to this Section 3.02(a), this Agreement shall be deemed amended to reflect such admission, and any formal amendment of this Agreement (including the Member Schedule) in connection therewith shall only require execution by the Company and such Substitute Member or Additional Member, as applicable, to be effective.

 

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(b)           If a Member shall Transfer all (but not less than all) its Units, the Member shall thereupon cease to be a Member of the Company.

 

Section 3.03          Tax and Accounting Information.

 

(a)           Accounting Decisions and Reliance on Others.  All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the Managing Member in accordance with Applicable Law and with accounting methods followed for U.S. federal income tax purposes.  In making such decisions, the Managing Member may rely upon the advice of the independent accountants of the Company.

 

(b)           Records and Accounting Maintained.  The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in all material respects in accordance with United States generally accepted accounting principles as in effect from time to time (“GAAP”).  The Fiscal Year of the Company shall be used for financial reporting and for U.S. federal income tax purposes.

 

(c)           Financial Reports.

 

(i)            The books and records of the Company shall be audited as of the end of each Fiscal Year by the same accounting firm that audits the books and records of RocketCo (or, if such firm declines to perform such audit, by an accounting firm selected by the Managing Member).

 

(ii)           In the event neither RocketCo nor the Company is required to file an annual report on Form 10-K or quarterly report on Form 10-Q, the Company shall deliver, or cause to be delivered, the following to each Rock Member, in each case so long as such Rock Member meets the Ownership Minimum:

 

(A)          not later than ninety (90) days after the end of each fiscal year of the Company, a copy of the audited consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related statements of operations and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous year, all in reasonable detail; and

 

(B)          not later than forty five (45) days or such later time as permitted under applicable securities law after the end of each of the first three fiscal quarters of each fiscal year, the unaudited consolidated balance sheet of the Company and its Subsidiaries, and the related statements of operations and cash flows for such quarter and for the period commencing on the first day of the fiscal year and ending on the last day of such quarter.

 

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(d)           Tax Returns.

 

(i)            The Company shall timely cause to be prepared by an accounting firm selected by the Managing Member all federal, state, local and foreign tax returns (including information returns) of the Company and its Subsidiaries, which may be required by a jurisdiction in which the Company and its Subsidiaries operate or conduct business for each year or period for which such returns are required to be filed and shall cause such returns to be timely filed.  Upon request of RHI or any other Member, the Company shall furnish to such Member a copy of each such tax return;

 

(ii)           The Company shall furnish to each Member (a) as soon as reasonably practical after the end of each Fiscal Year, all information concerning the Company and its Subsidiaries required for the preparation of tax returns of such Members (or any beneficial owner(s) of such Member), including a report (including Schedule K-1), indicating each Member’s share of the Company’s taxable income, gain, credits, losses and deductions for such year, in sufficient detail to enable such Member to prepare its federal, state and other tax returns; provided that estimates of such information believed by the Managing Member in good faith to be reasonable shall be provided within 90 days of the end of the Fiscal Year, (b) as soon as reasonably possible after the close of the relevant fiscal period, but in no event later than ten days prior to the date an estimated tax payment is due, such information concerning the Company as is required to enable such Member (or any beneficial owner of such Member) to pay estimated taxes and (c) as soon as reasonably possible after a request by such Member, such other information concerning the Company and its Subsidiaries that is reasonably requested by such Member for compliance with its tax obligations (or the tax obligations of any beneficial owner(s) of such Member) or for tax planning purposes; and

 

(e)           Inconsistent Positions.  No Member shall take a position on its income tax return with respect to any item of Company income, gain, deduction, loss or credit that is different from the position taken on the Company’s income tax return with respect to such item unless such Member notifies the Company of the different position the Member desires to take and the Company’s regular tax advisors, after consulting with the Member, are unable to provide an opinion that (after taking into account all of the relevant facts and circumstances) the arguments in favor of the Company’s position outweigh the arguments in favor of the Member’s position.

 

Section 3.04          Books and Records.  The Company shall keep full and accurate books of account and other records of the Company at its principal place of business.  No Member (other than the Managing Member and, in each case so long as it meets the Ownership Minimum, the Rock Members) shall have any right to inspect the books and records of RocketCo, the Company or any of its Subsidiaries; provided that, in the case of the Rock Members, (i) such inspection shall be at reasonable times and upon reasonable prior notice to the Company, but not more frequently than once per calendar quarter and (ii) neither RocketCo, the Company nor any of its Subsidiaries shall be required to disclose (x) any information the Managing Member determines to be competitively sensitive or (y) any privileged information of RocketCo, the Company or any of its Subsidiaries so long as the Company has used commercially reasonable efforts

 

17

 

to enter into an arrangement pursuant to which it may provide such information to the Rock Members without the loss of any such privilege.

 

ARTICLE IV

 

ROCKETCO OWNERSHIP; RESTRICTIONS ON ROCKETCO STOCK

 

Section 4.01          RocketCo Ownership.

 

(a)           If at any time RocketCo issues a share of Class A Common Stock or Class B Common Stock or any other Equity Security of RocketCo entitled to any economic rights (including in the IPO) (an “Economic RocketCo Security”) with regard thereto (other than Class C Common Stock, Class D Common Stock or other Equity Security of RocketCo not entitled to any economic rights with respect thereto), (i) the Company shall issue to RocketCo one Common Unit (if RocketCo issues a share of Class A Common Stock or Class B Common Stock) or such other Equity Security of the Company (if RocketCo issues an Economic RocketCo Security other than Class A Common Stock or Class B Common Stock) corresponding to the Economic RocketCo Security, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Economic RocketCo Security and (ii) the net proceeds received by RocketCo with respect to the corresponding Economic RocketCo Security, if any, shall be concurrently contributed to the Company; provided, however, that if RocketCo issues any Economic RocketCo Securities, some or all of the net proceeds of which are to be used to fund expenses or other obligations of RocketCo for which RocketCo would be permitted a distribution pursuant to Section 5.03(c), then RocketCo shall not be required to transfer such net proceeds to the Company which are used or will be used to fund such expenses or obligations, and provided, further, that if RocketCo issues any shares of Class A Common Stock or Class B Common Stock in order to purchase or fund the purchase from a Non-RocketCo Member of a number of Common Units (and shares of Class C Common Stock or Class D Common Stock, as applicable) or to purchase or fund the purchase of shares of Class A Common Stock or Class B Common Stock, in each case equal to the number of shares of Class A Common Stock or Class B Common Stock issued, then the Company shall not issue any new Common Units in connection therewith and RocketCo shall not be required to transfer such net proceeds to the Company (it being understood that such net proceeds shall instead be transferred to such Non-RocketCo Member as consideration for such purchase).

 

(b)           Notwithstanding Section 4.01(a), this Article IV shall not apply (i) to the issuance and distribution to holders of shares of RocketCo Common Stock of rights to purchase Equity Securities of RocketCo under a “poison pill” or similar shareholders rights plan (it being understood that upon exchange of Paired Interests for Class A Common Stock or Class B Common Stock, as the case may be, pursuant to the Exchange Agreement, such Class A Common Stock or Class B Common Stock, as the case may be, will be issued together with a corresponding right) or (ii) to the issuance under the RocketCo Equity Plan or RocketCo’s other employee benefit plans of any warrants, options or other rights to acquire Equity Securities of RocketCo or rights or

 

18

 

property that may be converted into or settled in Equity Securities of RocketCo, but shall in each of the foregoing cases apply to the issuance of Equity Securities of RocketCo in connection with the exercise or settlement of such rights, warrants, options or other rights or property.

 

Section 4.02          Restrictions on RocketCo Common Stock.

 

(a)           Except as otherwise determined by the Managing Member in accordance with Section 4.02(d), (i) the Company may not issue any additional Common Units to RocketCo or any of its Subsidiaries unless substantially simultaneously therewith RocketCo or such Subsidiary issues or sells an equal number of shares of Class A Common Stock or Class B Common Stock to another Person and (ii) the Company may not issue any other Equity Securities of the Company to RocketCo or any of its Subsidiaries unless substantially simultaneously, RocketCo or such Subsidiary issues or sells, to another Person, an equal number of shares of a new class or series of Equity Securities of RocketCo or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company.

 

(b)           Except as otherwise determined by the Managing Member in accordance with Section 4.02(d), (i) RocketCo or any of its Subsidiaries may not redeem, repurchase or otherwise acquire any shares of Class A Common Stock or Class B Common Stock unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from RocketCo an equal number of Units for the same price per security (or, if RocketCo uses funds received from distributions from the Company or the net proceeds from an issuance of Class A Common Stock or Class B Common Stock to fund such redemption, repurchase or acquisition, then the Company shall cancel an equal number of Units for no consideration) and (ii) RocketCo or any of its Subsidiaries may not redeem or repurchase any other Equity Securities of RocketCo unless substantially simultaneously, the Company redeems or repurchases from RocketCo an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) or other economic rights as those of such Equity Securities of RocketCo for the same price per security (or, if RocketCo uses funds received from distributions from the Company or the net proceeds from an issuance of Equity Securities other than Class A Common Stock or Class B Common Stock to fund such redemption, repurchase or acquisition, then the Company shall cancel an equal number of its corresponding Equity Securities for no consideration).  Except  as otherwise determined by the Managing Member in accordance with Section 4.02(d): (x) the Company may not redeem, repurchase or otherwise acquire Common Units from RocketCo or any of its Subsidiaries unless substantially simultaneously RocketCo or such Subsidiary redeems, repurchases or otherwise acquires an equal number of Class A Common Stock or Class B Common Stock for the same price per security from holders thereof (except that if the Company cancels Common Units for no consideration as described in Section 4.02(b)(i), then the price per security need not be the same) and (y) the Company may not redeem, repurchase or otherwise acquire any other Equity Securities of the Company from RocketCo or any of its Subsidiaries unless substantially simultaneously RocketCo or such Subsidiary redeems, repurchases or

 

19

 

otherwise acquires for the same price per security an equal number of Equity Securities of RocketCo of a corresponding class or series with substantially the same rights to dividends and distributions (including dividends and distributions upon liquidation) and other economic rights as those of such Equity Securities of RocketCo (except that if the Company cancels Equity Securities for no consideration as described in Section 4.02(b)(ii), then the price per security need not be the same).  Notwithstanding the immediately preceding sentence, to the extent that any consideration payable to RocketCo in connection with the redemption or repurchase of any shares or other Equity Securities of RocketCo or any of its Subsidiaries consists (in whole or in part) of shares or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant), then redemption or repurchase of the corresponding Common Units or other Equity Securities of the Company shall be effectuated in an equivalent manner (except if the Company cancels Common Units or other Equity Securities for no consideration as described in this Section 4.02(b)).

 

(c)           The Company shall not in any manner effect any subdivision (by any stock or unit split, stock or unit dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the outstanding Common Units unless accompanied by a substantively identical subdivision or combination, as applicable, of the outstanding RocketCo Common Stock, with corresponding changes made with respect to any other exchangeable or convertible securities.  RocketCo shall not in any manner effect any subdivision (by any stock or unit split, stock or unit dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock or unit split, reclassification, reorganization, recapitalization or otherwise) of the outstanding RocketCo Common Stock unless accompanied by a substantively identical subdivision or combination, as applicable, of the outstanding Common Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

 

(d)           Notwithstanding anything to the contrary in this Article IV:

 

(i)            if at any time the Managing Member shall determine that any debt instrument of RocketCo, the Company or its Subsidiaries shall not permit RocketCo or the Company to comply with the provisions of Section 4.02(a) or Section 4.02(b) in connection with the issuance, redemption or repurchase of any shares of Class A Common Stock or Class B Common Stock or other Equity Securities of RocketCo or any of its Subsidiaries or any Units or other Equity Securities of the Company, then the Managing Member may in good faith implement an economically equivalent alternative arrangement without complying with such provisions; provided that, in the case that any such alternative arrangement is implemented because of restrictions in any debt instrument, such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of each Rock Member, in each case so long as such Rock Member meets the Limited Ownership Minimum;

 

(ii)           if (x) RocketCo incurs any indebtedness and desires to transfer the proceeds of such indebtedness to the Company and (y) RocketCo is unable

 

20

 

to lend the proceeds of such indebtedness to the Company on an equivalent basis because of restrictions in any debt instrument of RocketCo, the Company or its Subsidiaries, then notwithstanding Section 4.02(a) or Section 4.02(b), the Managing Member may in good faith implement an economically equivalent alternative arrangement in connection with the transfer of proceeds to the Company using non-participating preferred Equity Securities of the Company without complying with such provisions; provided that, in the case that any such alternative arrangement is implemented because of restrictions in any debt instrument, such arrangement shall also be subject to the prior written consent (not to be unreasonably withheld) of each Rock Member, in each case so long as such Rock Member meets the Limited Ownership Minimum; and

 

(iii)          If RocketCo receives a distribution pursuant to Section 5.03 and RocketCo subsequently contributes any of the amounts received to the Company, the Managing Member may take any reasonable action to properly reflect the changes in the Members’ economic interests in the Company including by making appropriate adjustments to the number of Common Units held by the Members other than RocketCo in order to proportionally reduce the respective Percentage Interests held by the Members other than RocketCo.

 

(e)           In the event any adjustment pursuant to this Agreement in the number of Common Units held by a Member results (x) in a decrease in the number of Common Units held by a Member that constitute a portion of a Paired Interest, concurrently with such decrease, such Member shall surrender the number of shares of Class C Common Stock or Class D Common Stock, as the case may be, constituting the remainder of such Paired Interest (which, as of the date hereof, would be one share of Class C Common Stock or Class D Common Stock, as the case may be) to RocketCo or (y) in an increase in the number of Common Units held by a Member that constitute a portion of a Paired Interest, concurrently with such increase, RocketCo shall issue the number of shares of Class C Common Stock or Class D Common Stock, as the case may be, constituting the remainder of such Paired Interest (which, as of the date hereof, would be one share of Class C Common Stock or Class D Common Stock, as the case may be) to such Member.

 

ARTICLE V

 

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS;
 DISTRIBUTIONS; ALLOCATIONS

 

Section 5.01          Capital Contributions.

 

(a)           From and after the date hereof, no Member shall have any obligation to the Company, to any other Member or to any creditor of the Company to make any further Capital Contribution, except as expressly provided in Section 4.01(a).

 

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(b)           Except as expressly provided herein, no Member, in its capacity as a Member, shall have the right to receive any cash or any other property of the Company.

 

Section 5.02          Capital Accounts.

 

(a)           Maintenance of Capital Accounts.  The Company shall maintain a Capital Account for each Member on the books of the Company in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such provisions, the following provisions:

 

(i)            Each Member listed on the Member Schedule shall be credited with the Reorganization Date Capital Account Balance set forth on the Member Schedule.  The Member Schedule shall be amended by the Managing Member after the closing of the IPO and from time to time to reflect adjustments to the Members’ Capital Accounts made in accordance with Sections 5.02(a)(ii), 5.02(a)(iii), 5.02(a)(iv), 5.02(c) or otherwise.

 

(ii)           To each Member’s Capital Account there shall be credited:  (A) such Member’s Capital Contributions, (B) such Member’s distributive share of Net Income and any item in the nature of income or gain that is allocated pursuant to Section 5.04 and (C) the amount of any Company liabilities assumed by such Member or that are secured by any Property distributed to such Member.

 

(iii)          To each Member’s Capital Account there shall be debited: (A) the amount of money and the Carrying Value of any Property distributed to such Member pursuant to any provision of this Agreement, (B) such Member’s distributive share of Net Loss and any items in the nature of expenses or losses that are allocated to such Member pursuant to Section 5.04 and (C) the amount of any liabilities of such Member assumed by the Company or that are secured by any Property contributed by such Member to the Company.

 

(iv)          In determining the amount of any liability for purposes of subparagraphs (ii) and (iii) above there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and the Treasury Regulations.

 

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.  In the event that the Managing Member shall reasonably determine that it is prudent to modify the manner in which the Capital Accounts or any debits or credits thereto are maintained (including debits or credits relating to liabilities that are secured by contributed or distributed Property or that are assumed by the Company or the Members), the Managing Member may make such modification so long as such modification will not have any effect on the amounts distributed to any Person pursuant to Article X upon the dissolution of the Company.  The Managing Member also

 

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shall (i) make any adjustments that are necessary or appropriate to maintain equality between Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b).

 

(b)           Succession to Capital Accounts.  In the event any Person becomes a Substitute Member in accordance with the provisions of this Agreement, such Substitute Member shall succeed to the Capital Account of the former Member to the extent such Capital Account relates to the Transferred Units.

 

(c)           Adjustments of Capital Accounts.  The Company shall revalue the Capital Accounts of the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (a “Revaluation”) at the following times:  (i) immediately prior to the contribution of more than a de minimis amount of money or other property to the Company by a new or existing Member as consideration for one or more Units; (ii) the distribution by the Company to a Member of more than a de minimis amount of property in respect of one or more Units; (iii) the issuance by the Company of more than a de minimis amount of Units as consideration for the provision of services to or for the benefit of the Company (as described in Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(5)(iii)); and (iv) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (i), (ii) and (iii) above shall be made only if the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interest of the Members.

 

(d)           No Member shall be entitled to withdraw capital or receive distributions except as specifically provided herein.  A Member shall have no obligation to the Company, to any other Member or to any creditor of the Company to restore any negative balance in the Capital Account of such Member.  Except as expressly provided elsewhere herein, no interest shall be paid on the balance in any Member’s Capital Account.

 

(e)           Whenever it is necessary for purposes of this Agreement to determine a Member’s Capital Account on a per Unit basis, such amount shall be determined by dividing the Capital Account of such Member attributable to the applicable class of Units held of record by such Member by the number of Units of such class held of record by such Member.

 

Section 5.03          Amounts and Priority of Distributions.

 

(a)           Distributions Generally.  Except as otherwise provided in Section 10.02, distributions shall be made to the Members as set forth in this Section 5.03, at such times and in such amounts as the Managing Member, in its sole discretion, shall determine.

 

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(b)           Distributions to the Members.  Subject to Sections 5.03(e), and 5.03(f), at such times and in such amounts as the Managing Member, in its sole discretion, shall determine, distributions shall be made to the Members in proportion to their respective Percentage Interests.

 

(c)           RocketCo Distributions.  Notwithstanding the provisions of Section 5.03(b), the Managing Member, in its sole discretion, may authorize that (i) cash be paid to RocketCo (which payment shall be made without pro rata distributions to the other Members) in exchange for the redemption, repurchase or other acquisition of Units held by RocketCo to the extent that such cash payment is used to redeem, repurchase or otherwise acquire an equal number of shares of Class A Common Stock or Class B Common Stock in accordance with Section 4.02(b) and (ii) to the extent that the Managing Member determines that expenses or other obligations of RocketCo are related to its role as the Managing Member or the business and affairs of RocketCo that are conducted through the Company or any of the Company’s direct or indirect Subsidiaries, cash (and, for the avoidance of doubt, only cash) distributions may be made to RocketCo (which distributions shall be made without pro rata distributions to the other Members) in amounts required for RocketCo to pay (w) operating, administrative and other similar costs incurred by RocketCo, including payments in respect of Indebtedness and preferred stock, to the extent the proceeds are used or will be used by RocketCo to pay expenses or other obligations described in this clause (ii) (in either case only to the extent economically equivalent Indebtedness or Equity Securities of the Company were not issued to RocketCo), payments representing interest with respect to payments not made when due under the terms of the Tax Receivable Agreement and payments pursuant to any legal, tax, accounting and other professional fees and expenses (but, for the avoidance of doubt, excluding any tax liabilities of RocketCo), (x) any judgments, settlements, penalties, fines or other costs and expenses in respect of any claims against, or any litigation or proceedings involving, RocketCo, (y) fees and expenses (including any underwriters discounts and commissions) related to any securities offering, investment or acquisition transaction (whether or not successful) authorized by the board of directors of RocketCo and (z) other fees and expenses in connection with the maintenance of the existence of RocketCo (including any costs or expenses associated with being a public company listed on a national securities exchange).  For the avoidance of doubt, distributions made under this Section 5.03(c) may not be used to pay or facilitate dividends or distributions on the RocketCo Common Stock and must be used solely for one of the express purposes set forth under clause (i) or (ii) of the immediately preceding sentence.

 

(d)           Distributions in Kind.  Any distributions in kind shall be made at such times and in such amounts as the Managing Member, in its sole discretion, shall determine based on their fair market value as determined by the Managing Member in the same proportions as if distributed in accordance with Section 5.03(b), with all Members participating in proportion to their respective Percentage Interests.  If cash and property are to be distributed in kind simultaneously, the Company shall distribute such cash and property in kind in the same proportion to each Member.  For the purposes of this Section 5.03(d), if any such distribution in kind includes securities, distributions to the Members shall be deemed proportionate notwithstanding that the securities

 

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distributed to holders of Common Units that are included in Paired Interests with shares of Class D Common Stock have not more than ten times the voting power of any securities distributed to holders of Common Units that are included in Paired Interests with shares of Class C Common Stock, so long as such securities issued to the holders of Common Units that are included in Paired Interests with shares of Class D Common stock remain subject to automatic conversion on terms no more favorable to such holders than those set forth in Article IV, Section F of the certificate of incorporation of RocketCo.

 

(e)           Tax Distributions.

 

(i)            Notwithstanding any other provision of this Section 5.03 to the contrary, to the extent permitted by Applicable Law and consistent with the Company’s obligations to its creditors as reasonably determined by the Managing Member, the Company shall make cash distributions by wire transfer of immediately available funds pursuant to this Section 5.03(e)(i) to the Members with respect to their Units in proportion to their respective Percentage Interests at least two Business Days prior to the date on which any U.S. federal corporate estimated tax payments are due, in an amount that in the Managing Member’s discretion allows each Member to satisfy its tax liability with respect to its Units,  up to such Member’s Tax Distribution Amount, if any; provided that the Managing Member shall have no liability to any Member in connection with any underpayment of estimated taxes, so long as cash distributions are made in accordance with this Section 5.03(e)(i) and the Tax Distribution Amounts are determined as provided in paragraph (i) of the definition of Tax Distribution Amount.

 

(ii)           On any date that the Company makes a distribution to the Members with respect to their Units under a provision of Section 5.03 other than this Section 5.03(e), if the Tax Distribution Amount is greater than zero, the Company shall designate all or a portion of such distribution as a Tax Distribution with respect to a Member’s Units to the extent of the Tax Distribution Amount with respect to such Member’s Units as of such date (but not to exceed the amount of such distribution).  For the avoidance of doubt, such designation shall be performed with respect to all Members with respect to which there is a Tax Distribution Amount as of such date.

 

(iii)          Notwithstanding any other provision of this Section 5.03 to the contrary, if the Tax Distribution Amount for such Fiscal Year is greater than zero, to the extent permitted by Applicable Law and consistent with the Company’s obligations to its creditors as reasonably determined by the Managing Member, the Company shall make additional distributions under this Section 5.03(e)(iii) in an amount that in the Managing Member’s discretion allows each Member to satisfy its tax liability with respect to the Units, up to such Tax Distribution Amount for such Fiscal Year as soon as reasonably practicable after the end of such Fiscal Year (or as soon as reasonably practicable after any event that subsequently adjusts the taxable income of such Fiscal Year).

 

(iv)          Under no circumstances shall Tax Distributions reduce the amount otherwise distributable to any Member pursuant to this Section 5.03

 

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(other than this Section 5.03(e)) after taking into account the effect of Tax Distributions on the amount of cash or other assets available for distribution by the Company.

 

(f)            Pre-IPO Profits Distribution.  Notwithstanding Section 5.03(b), after the Reorganization, before any other distributions are distributed to the Members by the Company or any of its Subsidiaries, the Company shall, or shall cause its Subsidiaries to, distribute to RHI and Gilbert, an aggregate amount of cash determined by the Managing Member up to an amount equal to (i) the Available Cash Flow attributable to the portion of the fiscal period beginning on January 1, 2020 and ended on the date hereof minus (ii) the amount of Available Cash Flow, if any, attributable to such period and distributed to RHI or Gilbert prior to the date hereof.

 

(g)           Assignment.  Rock Members shall have the right to assign to any Transferee of Common Units, pursuant to a Transfer made in compliance with this Agreement, the right to receive any portion of the amounts distributable or otherwise payable to such Rock Member pursuant to Section 5.03(b).

 

Section 5.04          Allocations.

 

(a)           Net Income and Net Loss.  Except as otherwise provided in this Agreement, and after giving effect to the special allocations set forth in Section 5.04(b), Section 5.04(c) and Section 5.04(d), Net Income and Net Loss (and, to the extent necessary, individual items of income, gain, loss, deduction or credit) of the Company shall be allocated among the Capital Accounts of the Members pro rata in accordance with their respective Percentage Interests. Notwithstanding the foregoing, the Managing Member shall make such adjustments to Capital Accounts as it determines in its sole discretion to be appropriate to ensure allocations are made in accordance with a Member’s interest in the Company.

 

(b)           Special Allocations.  The following special allocations shall be made in the following order:

 

(i)            Minimum Gain Chargeback.  Except as otherwise provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other provision of this Article V, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g).  Allocations pursuant to the immediately preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto.  The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f)(6) and 1.704-2(j)(2).  This Section 5.04(b)(i) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

 

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(ii)           Member Nonrecourse Debt Minimum Gain Chargeback.  Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article V, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(4).  Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto.  The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2).  This Section 5.04(b)(ii) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

(iii)          Qualified Income Offset.  In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or Section 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Member as promptly as possible; provided that an allocation pursuant to this Section 5.04(b)(iii) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article V have been tentatively made as if this Section 5.04(b)(iii) were not in the Agreement.

 

(iv)          Nonrecourse Deductions.  Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Members in a manner determined by the Managing Member consistent with Treasury Regulations Sections 1.704-2(b) and 1.704-2(c).

 

(v)           Member Nonrecourse Deductions.  Any Member Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(j)(1).

 

(vi)          Section 754 Adjustments.  (A) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest in the Company, the

 

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amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of such asset) or loss (if the adjustment decreases the basis of such asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income and Net Loss, and further (B) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member’s interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to such Members in accordance with their interests in the Company in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

(c)           Curative Allocations.  The allocations set forth in Section 5.04(b)(i) through Section 5.04(b)(vi) and Section 5.04(d) (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations.  It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section 5.04(c).  Therefore, notwithstanding any other provision of this Article V (other than the Regulatory Allocations), the Managing Member shall make such offsetting special allocations of Company income, gain, loss, or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 5.04.

 

(d)           Loss Limitation.  Net Loss (or individual items of loss or deduction) allocated pursuant to Section 5.04 hereof shall not exceed the maximum amount of Net Loss (or individual items of loss or deduction) that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year.  In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Loss (or individual items of loss or deduction) pursuant to Section 5.04 hereof, the limitation set forth in this Section 5.04(d) shall be applied on a Member by Member basis and Net Loss (or individual items of loss or deduction) not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member’s Capital Accounts so as to allocate the maximum permissible Net Loss to each Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d).  Any reallocation of Net Loss pursuant to this Section 5.04(d) shall be subject to chargeback pursuant to the curative allocation provision of Section 5.04(c).

 

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Section 5.05                             Other Allocation Rules.

 

(a)                                 Interim Allocations Due to Percentage Adjustment.  If a Percentage Interest is the subject of a Transfer or the Members’ interests in the Company change pursuant to the terms of the Agreement during any Fiscal Year, the amount of Net Income and Net Loss (or items thereof) to be allocated to the Members for such entire Fiscal Year shall be allocated to the portion of such Fiscal Year which precedes the date of such Transfer or change (and if there shall have been a prior Transfer or change in such Fiscal Year, which commences on the date of such prior Transfer or change) and to the portion of such Fiscal Year which occurs on and after the date of such Transfer or change (and if there shall be a subsequent Transfer or change in such Fiscal Year, which precedes the date of such subsequent Transfer or change), in accordance with a pro rata allocation unless the Managing Member elects to use an interim closing of the books, and the amounts of the items so allocated to each such portion shall be credited or charged to the Members in accordance with Section 5.04 as in effect during each such portion of the Fiscal Year in question.  Such allocation shall be in accordance with Section 706 of the Code and the regulations thereunder and made without regard to the date, amount or receipt of any distributions that may have been made with respect to the transferred Percentage Interest to the extent consistent with Section 706 of the Code and the regulations thereunder.  As of the date of such Transfer, the Transferee shall succeed to the Capital Account of the Transferor with respect to the transferred Units.

 

(b)                                 Tax Allocations: Code Section 704(c).  For U.S. federal, state and local income tax purposes, items of income, gain, loss, deduction and credit shall be allocated to the Partners in accordance with the allocations of the corresponding items for Capital Account purposes under Section 5.04, except that in accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any Property contributed to the capital of the Company and with respect to reverse Code Section 704(c) allocations described in Treasury Regulations 1.704-3(a)(6) shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company for U.S. federal income tax purposes and its initial Carrying Value or its Carrying Value determined pursuant to Treasury Regulation 1.704-1(b)(2)(iv)(f) (computed in accordance with the definition of Carrying Value) using the traditional allocation method under Treasury Regulation 1.704-3(b).  Any elections or other decisions relating to such allocations shall be made by the Managing Member in any manner that reasonably reflects the purpose and intention of this Agreement.  Allocations pursuant to this Section 5.05(b), Section 704(c) of the Code (and the principles thereof), and Treasury Regulation 1.704-1(b)(4)(i) are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Loss, other items, or distributions pursuant to any provision of this Agreement.

 

(c)                                  Modification of Allocations. The allocations set forth in Section 5.04 and Section 5.05 are intended to comply with certain requirements of the Treasury Regulations. Notwithstanding the other provisions of this Article V, the

 

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Managing Member shall be authorized to make, in its reasonable discretion, appropriate amendments to the allocations of Net Income and Net Loss (and to individual items of income, gain, loss, deduction and credit) pursuant to this Agreement (i) in order to comply with Section 704 of the Code or applicable Treasury Regulations, (ii) to allocate properly Net Income and Net Loss (and individual items of income, gain, loss, deduction and credit) to those Members that bear the economic burden or benefit associated therewith and (iii) to cause the Members to achieve the objectives underlying this Agreement as reasonably determined by the Managing Member

 

Section 5.06                             Tax Withholding; Withholding Advances.

 

(a)                                 Tax Withholding.

 

(i)                                     If requested by the Managing Member, each Member shall, if able to do so, deliver to the Managing Member:  (A) an affidavit in form satisfactory to the Company that the applicable Member (or its partners, as the case may be) is not subject to withholding under the provisions of any Applicable Law; (B) any certificate that the Company may reasonably request with respect to any such laws; or (C) any other form or instrument reasonably requested by the Company relating to any Member’s status under such law.  In the event that a Member fails or is unable to deliver to the Company an affidavit described in subclause (A) of this clause (i), the Company may withhold amounts from such Member in accordance with Section 5.06(b).

 

(ii)                                  After receipt of a written request of any Member, the Company shall provide such information to such Member and take such other action as may be reasonably necessary to assist such Member in making any necessary filings, applications or elections to obtain any available exemption from, or any available refund of, any withholding imposed by any foreign taxing authority with respect to amounts distributable or items of income allocable to such Member hereunder to the extent not adverse to the Company or any Member.  In addition, the Company shall, at the request of any Member, make or cause to be made (or cause the Company to make) any such filings, applications or elections; provided that any such requesting Member shall cooperate with the Company, with respect to any such filing, application or election to the extent reasonably determined by the Company and that any filing fees, taxes or other out-of-pocket expenses reasonably incurred and related thereto shall be paid and borne by such requesting Member or, if there is more than one requesting Member, by such requesting Members in accordance with their Relative Percentage Interests.

 

(b)                                 Withholding Advances.  To the extent the Company is required by Applicable Law to withhold or to make tax payments on behalf of or with respect to any Member (e.g., backup withholding) (“Withholding Advances”), the Company may withhold such amounts and make such tax payments as so required.

 

(c)                                  Repayment of Withholding Advances.  All Withholding Advances made on behalf of a Member, plus interest thereon at a rate equal to the Prime Rate as of the date of such Withholding Advances plus 2.0% per annum, shall (i) be paid on demand by the Member on whose behalf such Withholding Advances were made (it

 

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being understood that no such payment shall increase such Member’s Capital Account), or (ii) with the consent of the Managing Member and the affected Member be repaid by reducing the amount of the current or next succeeding distribution or distributions that would otherwise have been made to such Member or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Member.  Whenever repayment of a Withholding Advance by a Member is made as described in clause (ii) of this Section 5.06(c), for all other purposes of this Agreement such Member shall be treated as having received all distributions (whether before or upon any Dissolution Event) unreduced by the amount of such Withholding Advance and interest thereon.

 

(d)                                 Withholding Advances — Reimbursement of Liabilities.  Each Member hereby agrees to reimburse the Company for any liability with respect to Withholding Advances (including interest thereon) required or made on behalf of or with respect to such Member (including penalties imposed with respect thereto).

 

ARTICLE VI

 

CERTAIN TAX MATTERS

 

Section 6.01                             Partnership Representative.

 

(a)                                 The “Partnership Representative” (as such term is defined under Partnership Audit Provisions) of the Company shall be selected by the Managing Member with the initial Partnership Representative being RocketCo. The Partnership Representative may retain, at the Company’s expense, such outside counsel, accountants and other professional consultants as it may reasonably deem necessary in the course of fulfilling its obligations as the Partnership Representative. The Partnership Representative is authorized to take, and shall determine in its sole discretion whether or not the Company will take, such actions and execute and file all statements and forms on behalf of the Company that are approved by the Managing Member and are permitted or required by the applicable provisions of the Partnership Audit Provisions (including a “push-out” election under Section 6226 of the Code or any analogous election under state or local tax Law). Each Member agrees to cooperate with the Partnership Representative and to use commercially reasonable efforts to do or refrain from doing any or all things requested by the Partnership Representative (including paying any and all resulting taxes, additions to tax, penalties and interest in a timely fashion) in connection with any examination of the Company’s affairs by any federal, state, or local tax authorities, including resulting administrative and judicial proceedings.

 

(b)                                 In the event that the Partnership Representative has not caused the Company to make a “push-out” election pursuant to Section 6226 of the Partnership Audit Provisions, then any “imputed underpayment” (as determined in accordance with Section 6225 of the Partnership Audit Provisions) or partnership adjustment that does not give rise to an imputed underpayment shall be apportioned among the Members of the Company for the taxable year in which the adjustment is finalized in such manner as may be necessary (as determined by the Partnership

 

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Representative in good faith) so that, to the maximum extent possible, the tax and economic consequences of the imputed underpayment or other partnership adjustment and any associated interest and penalties (any such amount, an “Imputed Underpayment Amount”) are borne by the Members based upon their Percentage Interests in the Company for the reviewed year. Imputed Underpayment Amounts also shall include any imputed underpayment within the meaning of Section 6225 of the Partnership Audit Provisions paid (or payable) by any entity treated as a partnership for U.S. federal income tax purposes in which the Company holds (or has held) a direct or indirect interest other than through entities treated as corporations for U.S. federal income tax purposes to the extent that the Company bears the economic burden of such amounts, whether by Applicable Law or contract.

 

(c)                                  Each Member agrees to indemnify and hold harmless the Company from and against any liability with respect to such Member’s share of any tax deficiency paid or payable by the Company that is allocable to the Member as determined in accordance with Section 6.01(b) with respect to an audited or reviewed taxable year for which such Member was a partner in the Company. Any obligation of a Member pursuant to this Section 6.01(c) shall be implemented through adjustments to distributions otherwise payable to such Member as determined in accordance with Section 5.03; provided, however, that, at the written request of the Partnership Representative, each Member or former Member may be required to contribute to the Company such Member’s Imputed Underpayment Amount imposed on and paid by the Company; provided, further, that if a Member or former Member individually directly pays, pursuant to the Partnership Audit Provisions, any such Imputed Underpayment Amount, then such payment shall reduce any offset to distribution or required capital contribution of such Member or former Member. Any amount withheld from distributions pursuant to this Section 6.01(c) shall be treated as an amount distributed to such Member or former Member for all purposes under this Agreement.  For the avoidance of doubt, the obligations of a Member set forth in this Section 6.01(c) shall survive the withdrawal of a Member from the Company or any Transfer of a Member’s interest.

 

Section 6.02                             Section 754 Election.  The Company has previously made or will make a timely election under Section 754 of the Code (and a corresponding election under state and local law) effective starting with the taxable year ended December 31, 2020, and the Managing Member shall not take any action to revoke such election.

 

Section 6.03                             Debt Allocation.  Indebtedness of the Company treated as “excess nonrecourse liabilities” (as defined in Treasury Regulation Section 1.752-3(a)(3)) shall be allocated among the Members based on their Percentage Interests.

 

ARTICLE VII
  
 MANAGEMENT OF THE COMPANY

 

Section 7.01                             Management by the Managing Member.  Except as otherwise specifically set forth in this Agreement, the Managing Member shall be deemed to be a “manager” for purposes of applying the Michigan Act.  Except as

 

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expressly provided in this Agreement or the Michigan Act, the day-to-day business and affairs of the Company and its Subsidiaries shall be managed, operated and controlled by the Managing Member in accordance with the terms of this Agreement and no other Members shall have management authority or rights over the Company or its Subsidiaries.  The Managing Member is, to the extent of its rights and powers set forth in this Agreement, an agent of the Company for the purpose of the Company’s and its Subsidiaries’ business, and the actions of the Managing Member taken in accordance with such rights and powers, shall bind the Company (and no other Members shall have such right).  Except as expressly provided in this Agreement, the Managing Member shall have all necessary powers to carry out the purposes, business, and objectives of the Company and its Subsidiaries.  The Managing Member may delegate to Members, employees, officers or agents of the Company or any Subsidiary in its discretion the authority to sign agreements and other documents on behalf of the Company or any Subsidiary.

 

Section 7.02                             Withdrawal of the Managing Member.  RocketCo may withdraw as the Managing Member and appoint as its successor at any time upon written notice to the Company (i) any wholly-owned Subsidiary of RocketCo, (ii) any Person of which RocketCo is a wholly-owned Subsidiary, (iii) any Person into which RocketCo is merged or consolidated or (iv) any transferee of all or substantially all of the assets of RocketCo, which withdrawal and replacement shall be effective upon the delivery of such notice.  No appointment of a Person other than RocketCo (or its successor, as applicable) as Managing Member shall be effective unless RocketCo (or its successor, as applicable) and the new Managing Member (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members against the new Managing Member, to cause the new Managing Member to comply with all the Managing Member’s obligations under this Agreement and the Exchange Agreement.

 

Section 7.03                             Decisions by the Members.

 

(a)                                 Other than the Managing Member, the Members shall take no part in the management of the Company’s business, shall transact no business for the Company and shall have no power to act for or to bind the Company; provided, however, that the Company may engage any Member or principal, partner, member, shareholder or interest holder thereof as an employee, independent contractor or consultant to the Company, in which event the duties and liabilities of such individual or firm with respect to the Company as an employee, independent contractor or consultant shall be governed by the terms of such engagement with the Company.

 

(b)                                 Except as expressly provided herein, neither the Members nor any class of Members shall have the power or authority to vote, approve or consent to any matter or action taken by the Company.  Except as otherwise provided herein, any proposed matter or action subject to the vote, approval or consent of the Members or any class of Members shall require the approval of (i) a majority in interest of the Members or such class of Members, as the case may be (by (x) resolution at a duly convened meeting of the Members or such class of Members, as the case may be, or (y) written consent of the Members or such class of Members, as the case may be) and (ii) except with respect

 

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to any approval or other rights expressly granted to the Rock Members, the Managing Member.  Except as expressly provided herein, all Members shall vote together as a single class on any matter subject to the vote, approval or consent of the Members (but not, for the avoidance of doubt, any vote, approval or consent of any class of Members).  In the case of any such approval, a majority in interest of the Members or any class of Members, as the case may be, may call a meeting of the Members or such class of Members at such time and place or by means of telephone or other communications facility that permits all persons participating in such meeting to hear and speak to each other for the purpose of a vote thereon.  Notice of any such meeting shall be required, which notice shall include a brief description of the action or actions to be considered by the Members or such class of Members, as the case may be.  Unless waived by any such Member in writing, notice of any such meeting shall be given to each Member or Member of such class, as the case may be, at least four (4) days prior thereto.  Attendance or participation of a Member at a meeting shall constitute a waiver of notice of such meeting, except when such Member attends or participates in the meeting for the express purpose of objecting at the beginning thereof to the transaction of any business because the meeting is not properly called or convened.  Any action required or permitted to be taken at any meeting of the Members may be taken without a meeting, if a consent in writing, setting forth the actions so taken, shall be signed by Members sufficient to approve such action pursuant to this Section 7.03(b).  A copy of any such consent in writing will be provided to the Members promptly thereafter.

 

Section 7.04                             Fiduciary Duties.

 

(a)                                 (i) The Managing Member shall, in its capacity as Managing Member, and not in any other capacity, have the same fiduciary duties to the Company and the Members as a member of the board of directors of a Delaware corporation (assuming such corporation had in its certificate of incorporation (A) a provision eliminating the liabilities of directors and officers to the maximum extent permitted by Section 102(b)(7) of the DGCL and (B) a provision renouncing the right of such corporation to business opportunities to the maximum extent permitted by the certificate of incorporation of RocketCo); (ii) any member of the Board of Directors of RocketCo that is an officer of RocketCo or the Company shall, in its capacity as director, and not in any other capacity, have the same fiduciary duties to RocketCo as a member of the board of directors of a Delaware corporation (assuming such corporation had in its certificate of incorporation (A) a provision eliminating the liabilities of directors and officers to the maximum extent permitted by Section 102(b)(7) of the DGCL and (B) a provision renouncing the right of such corporation to business opportunities to the maximum extent permitted by the certificate of incorporation of RocketCo); and (iii) each Officer and each officer of RocketCo shall, in their capacity as such, and not in any other capacity, have the same fiduciary duties to the Company and the Members (in the case of any Officer) or RocketCo (in the case of any officer of RocketCo) as an officer of a Delaware corporation (assuming such corporation had in its certificate of incorporation (A) a provision eliminating the liabilities of directors and officers to the maximum extent permitted by Section 102(b)(7) of the DGCL and (B) a provision renouncing the right of such corporation to business opportunities to the maximum extent permitted by the certificate of incorporation of RocketCo).  For the avoidance of doubt, the fiduciary

 

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duties described in clause (i) above shall not be limited by the fact that the Managing Member shall be permitted to take certain actions in its sole or reasonable discretion pursuant to the terms of this Agreement or any agreement entered into in connection herewith.  Each of the Rock Members shall have the exclusive right to enforce the rights and duties, or to waive such rights and duties, set forth in this Section 7.07(a), in each case so long as such Rock Member meets the Limited Ownership Minimum.

 

(b)                                 The parties acknowledge that the Managing Member will take action through its board of directors, and that the members of the Managing Member’s board of directors will owe fiduciary duties to the stockholders of the Managing Member.  The Managing Member will use all commercially reasonable and appropriate efforts and means, as determined in good faith by the Managing Member, to minimize any conflict of interest between the Members, on the one hand, and the stockholders of the Managing Member, on the other hand, and to effectuate any transaction that involves or affects any of the Company, the Managing Member, the Members or the stockholders of the Managing Member in a manner that does not (i) disadvantage the Members or their interests relative to the stockholders of the Managing Member or (ii) advantage the stockholders of the Managing Member relative to the Members or (iii) treats the Members and the stockholders of the Managing Member differently; provided that in the event of a conflict between the interests of the stockholders of the Managing Member and the interests of the Members other than the Managing Member, such other Members agree that the Managing Member shall discharge its fiduciary duties to such other Members by acting in the best interests of the Managing Member’s stockholders.  Each of the Rock Members shall have the exclusive right to enforce the rights and duties, or to waive such rights and duties, set forth in this Section 7.04(b), so long as such Rock Member meets the Limited Ownership Minimum.

 

(c)                                  Without prior written consent of each Rock Member (in each case so long as such Rock Member owns any Owned Shares), the Managing Member will not engage in any business activity other than the direct or indirect management and ownership of the Company and its Subsidiaries, or own any assets (other than on a temporary basis) other than securities of the Company and its Subsidiaries (whether directly or indirectly held) or any cash or other property or assets distributed by or otherwise received from the Company and its Subsidiaries in accordance with this Agreement, provided that the Managing Member may take any action (including incurring its own Indebtedness) or own any asset if it determines in good faith that such actions or ownership are in the best interest of the Company.

 

Section 7.05                             Officers.

 

(a)                                 Appointment of Officers.  The Managing Member may appoint individuals as officers (“Officers”) of the Company, which may include such officers as the Managing Member determines are necessary and appropriate.  No Officer need be a Member.  An individual may be appointed to more than one office.

 

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(b)                                 Authority of Officers.  The Officers shall have the duties, rights, powers and authority as may be prescribed by the Managing Member from time to time.

 

(c)                                  Removal, Resignation and Filling of Vacancy of Officers.  The Managing Member may remove any Officer, for any reason or for no reason, at any time.  Any Officer may resign at any time by giving written notice to the Company, and such resignation shall take effect at the date of the receipt of that notice or any later time specified in that notice; provided that, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective.  Any such resignation shall be without prejudice to the rights, if any, of the Company or such Officer under this Agreement.  A vacancy in any office because of death, resignation, removal or otherwise shall be filled by the Managing Member.

 

ARTICLE VIII

 

TRANSFERS OF INTERESTS

 

Section 8.01                             Restrictions on Transfers.

 

(a)                                 Except as expressly permitted by Section 8.02, and subject to Section 8.01(b), Section 8.01(c) and Section 8.01(d), any underwriter lock-up agreement applicable to such Member or any other agreement between such Member and the Company, RocketCo or any of their controlled Affiliates, without the prior written approval of the Managing Member, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto, including the right to vote or consent on any matter or to receive or have any economic interest in distributions or advances from the Company pursuant thereto.  Any such Transfer which is not in compliance with the provisions of this Agreement shall be deemed a Transfer by such Member of Units in violation of this Agreement (and a breach of this Agreement by such Member) and shall be null and void ab initio.  Notwithstanding anything to the contrary in this Article VIII, (i) the Exchange Agreement shall govern the exchange of Paired Interests for shares of Class A Common Stock or Class B Common Stock, and an exchange pursuant to and in accordance with the Exchange Agreement shall not be considered a “Transfer” for purposes of this Agreement, (ii) the certificate of incorporation of RocketCo shall govern the conversion of Class B Common Stock to Class A Common Stock and the conversion of Class D Common Stock to Class C Common Stock, and a conversion pursuant to and in accordance with the certificate of incorporation of RocketCo shall not be considered a “Transfer” for purposes of this Agreement, (iii) a Transfer of Registrable Securities (as such term is defined in the Registration Rights Agreement) in accordance with the Registration Rights Agreement shall not be considered a “Transfer” for the purposes of the Agreement and (iv) any other Transfer of shares of Class A Common Stock or Class B Common Stock shall not be considered a “Transfer” for purposes of this Agreement.

 

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(b)                                 Except as otherwise expressly provided herein, it shall be a condition precedent to any Transfer otherwise permitted or approved pursuant to this Article VIII that:

 

(i)                                     the Transferor shall have provided to the Company prior notice of such Transfer;

 

(ii)                                  the Transfer shall comply with all Applicable Laws; and

 

(iii)                               with respect to any Transfer of any Common Unit that constitutes a portion of a Paired Interest, concurrently with such Transfer, such Transferor shall also Transfer to such Transferee the number of shares of Class C Common Stock or Class D Common Stock, as the case may be, constituting the remainder of such Paired Interest (which, as of the date hereof, would be one share of Class C Common Stock or Class D Common Stock, as the case may be).

 

(c)                                  Notwithstanding any other provision of this Agreement to the contrary, no Member shall directly or indirectly Transfer all or any part of its Units or any right or economic interest pertaining thereto if such Transfer, in the reasonable discretion of the Managing Member, would cause the Company to be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and Regulations promulgated thereunder.

 

(d)                                 Any Transfer of Units pursuant to this Agreement, including this Article VIII, shall be subject to the provisions of Section 3.01 and Section 3.02.

 

Section 8.02                             Certain Permitted Transfers.  Notwithstanding anything to the contrary herein, the following Transfers shall be permitted:

 

(a)                                 Any Transfer by any Member of its Units pursuant to a RocketCo Offer (as such term is defined in the Exchange Agreement);

 

(b)                                 At any time, any Permitted Transfer; provided that such Transfer, alone or together with other Transfers by any Rock Member and any Transferee thereof, would not result in the all Rock Members and their Transferees, in the aggregate, representing at any time more than fifty partners for the purposes of Treasury Regulation Section 1.7704-1(h)(1)(ii), including the application of the anti-avoidance rule of Treasury Regulation Section 1.7704-1(h)(3), excluding RocketCo from the fifty partners and treating RHI as one partner for purposes of this Section 8.02(b); or

 

(c)                                  At any time, any Transfer by any Member (other than any Rock Member) of Units to any Transferee (i) previously approved in writing by the Company prior to the Reorganization or (ii) approved in writing by the Managing Member (not to be unreasonably withheld), it being understood that it shall be reasonable for the Managing Member to withhold such consent if the Managing Member reasonably determines that such Transfer would materially increase the risk that the Company would

 

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be classified as a “publicly traded partnership” as that term is defined in Section 7704 of the Code and Regulations promulgated thereunder.

 

Section 8.03                             Registration of Transfers.  When any Units are Transferred in accordance with the terms of this Agreement, the Company shall cause such Transfer to be registered on the books of the Company.

 

ARTICLE IX

 

LIMITATION ON LIABILITY, EXCULPATION
 AND INDEMNIFICATION

 

Section 9.01                             Limitation on Liability.  The debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Covered Person shall be obligated personally for any such debt, obligation or liability of the Company; provided that the foregoing shall not alter a Member’s obligation to return funds wrongfully distributed to it.

 

Section 9.02                             Exculpation and Indemnification.

 

(a)                                 Subject to the duties of the Managing Member and Officers set forth in Section 7.04, neither the Managing Member nor any other Covered Person described in clause (iii) of the definition thereof shall be liable, including under any legal or equitable theory of fiduciary duty or other theory of liability, to the Company or to any other Covered Person for any losses, claims, damages or liabilities incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company.  There shall be, and each Covered Person shall be entitled to, a presumption that such Covered Person acted in good faith.

 

(b)                                 A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such Person’s professional or expert competence.

 

(c)                                  The Company shall indemnify, defend and hold harmless each Covered Person against any losses, claims, damages, liabilities, expenses (including all reasonable out-of-pocket fees and expenses of counsel and other advisors), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, in which such Covered Person may be involved or become subject to, in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document, unless such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount (i) is as a result of a Covered Person not acting in good faith on behalf of the Company or arose as a result of the willful commission by such Covered Person of any act that is dishonest and materially injurious to the Company or (ii) results from the breach by any Member (in such capacity) of its contractual obligations under this Agreement.  If any Covered

 

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Person becomes involved in any capacity in any action, suit, proceeding or investigation in connection with any matter arising out of or in connection with the Company’s business or affairs, or this Agreement or any related document, other than by reason of a Covered Person not acting in good faith on behalf of the Company or by reason of the willful commission by such Covered Person of any act that is dishonest and materially injurious to the Company, the Company shall reimburse such Covered Person for its reasonable legal and other reasonable out-of-pocket expenses (including the cost of any investigation and preparation) as they are incurred in connection therewith; provided that such Covered Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall be finally judicially determined that such Covered Person was not entitled to indemnification by, or contribution from, the Company in connection with such action, suit, proceeding or investigation.  If for any reason (other than by reason of a Covered Person not acting in good faith on behalf of the Company or by reason of the willful commission by such Covered Person of any act that is dishonest and materially injurious to the Company) the foregoing indemnification is unavailable to such Covered Person, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Covered Person as a result of such loss, claim, damage, liability, expense, judgment, fine, settlement or other amount in such proportion as is appropriate to reflect any relevant equitable considerations.  There shall be, and each Covered Person shall be entitled to, a rebuttable presumption that such Covered Person acted in good faith.

 

(d)                                 The obligations of the Company under Section 9.02(c) shall be satisfied solely out of and to the extent of the Company’s assets, and no Covered Person shall have any personal liability on account thereof.

 

(e)                                  Given that certain Jointly Indemnifiable Claims may arise by reason of the service of a Covered Person to the Company or as a director, trustee, officer, partner, member, manager, employee, consultant, fiduciary or agent of other corporations, limited liability companies, partnerships, joint ventures, trusts, employee benefit plans or other enterprises controlled by the Company (collectively, the “Controlled Entities”), or by reason of any action alleged to have been taken or omitted in any such capacity, the Company acknowledges and agrees that the Company shall, and to the extent applicable shall cause the Controlled Entities to, be fully and primarily responsible for the payment to the Covered Person in respect of indemnification or advancement of all out-of-pocket costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements) in each case, actually and reasonably incurred by or on behalf of a Covered Person in connection with either the investigation, defense or appeal of a claim, demand, action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in connection with a claim that is indemnifiable hereunder (collectively, “Expenses”) in connection with any such Jointly Indemnifiable Claim, pursuant to and in accordance with (as applicable) the terms of (i) the Michigan Act, (ii) this Agreement, (iii) any other agreement between the Company or any Controlled Entity and the Covered Person pursuant to which the Covered Person is indemnified, (iv) the laws of the jurisdiction of incorporation or organization of any Controlled Entity or (v) the certificate

 

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of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership, certificate of qualification or other organizational or governing documents of any Controlled Entity ((i) through (v) collectively, the “Indemnification Sources”), irrespective of any right of recovery the Covered Person may have from the Indemnitee-Related Entities.  Under no circumstance shall the Company or any Controlled Entity be entitled to any right of subrogation or contribution by the Indemnitee-Related Entities and no right of advancement or recovery the Covered Person may have from the Indemnitee-Related Entities shall reduce or otherwise alter the rights of the Covered Person or the obligations of the Company or any Controlled Entity under the Indemnification Sources.  In the event that any of the Indemnitee-Related Entities shall make any payment to the Covered Person in respect of indemnification or advancement of Expenses with respect to any Jointly Indemnifiable Claim, (i) the Company shall, and to the extent applicable shall cause the Controlled Entities to, reimburse the Indemnitee-Related Entity making such payment to the extent of such payment promptly upon written demand from such Indemnitee-Related Entity, (ii) to the extent not previously and fully reimbursed by the Company or any Controlled Entity pursuant to clause (i), the Indemnitee-Related Entity making such payment shall be subrogated to the extent of the outstanding balance of such payment to all of the rights of recovery of the Covered Person against the Company or any Controlled Entity, as applicable, and (iii) the Covered Person shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the Indemnitee-Related Entities effectively to bring suit to enforce such rights.  The Company and the Covered Person agree that each of the Indemnitee-Related Entities shall be third-party beneficiaries with respect to this Section 9.02(e), entitled to enforce this Section 9.02(e) as though each such Indemnitee-Related Entity were a party to this Agreement.  The Company shall cause each of the Controlled Entities to perform the terms and obligations of this Section 9.02(e) as though each such Controlled Entity was the “Company” under this Agreement.  For purposes of this Section 9.02(e), the following terms shall have the following meanings:

 

(i)                                     The term “Indemnitee-Related Entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Company, any Controlled Entity or the insurer under and pursuant to an insurance policy of the Company or any Controlled Entity) from whom a Covered Person may be entitled to indemnification or advancement of Expenses with respect to which, in whole or in part, the Company or any Controlled Entity may also have an indemnification or advancement obligation.

 

(ii)                                  The term “Jointly Indemnifiable Claims” shall be broadly construed and shall include, without limitation, any claim, demand, action, suit or proceeding for which the Covered Person shall be entitled to indemnification or advancement of Expenses from both (i) the Company or any Controlled Entity pursuant to the Indemnification Sources, on the one hand, and (ii) any Indemnitee-Related Entity pursuant to any other agreement between any Indemnitee-Related Entity and the Covered Person pursuant to which the Covered Person is indemnified, the laws of the jurisdiction

 

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of incorporation or organization of any Indemnitee-Related Entity or the certificate of incorporation, certificate of organization, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of any Indemnitee-Related Entity, on the other hand.

 

ARTICLE X

 

DISSOLUTION AND TERMINATION

 

Section 10.01                      Dissolution.

 

(a)                                 The Company shall not be dissolved by the admission of Additional Members or Substitute Members pursuant to Section 3.02.

 

(b)                                 No Member shall (i) resign from the Company prior to the dissolution and winding up of the Company except in connection with a Transfer of Units pursuant to the terms of this Agreement or (ii) take any action to dissolve, terminate or liquidate the Company or to require apportionment, appraisal or partition of the Company or any of its assets, or to file a bill for an accounting, except as specifically provided in this Agreement, and each Member, to the fullest extent permitted by Applicable Law, hereby waives any rights to take any such actions under Applicable Law, including any right to petition a court for judicial dissolution under Section 450.4802 of the Michigan Act.

 

(c)                                  The Company shall be dissolved and its business wound up only upon the earliest to occur of any one of the following events (each a “Dissolution Event”):

 

(i)                                     The expiration of forty-five (45) days after the sale or other disposition of all or substantially all the assets of the Company; or

 

(ii)                                  upon the approval of the Managing Member.

 

(d)                                 The death, retirement, resignation, expulsion, bankruptcy, insolvency or dissolution of a Member or the occurrence of any other event that terminates the continued membership of a Member of the Company shall not in and of itself cause dissolution of the Company.

 

Section 10.02                      Winding Up of the Company.

 

(a)                                 The Managing Member shall promptly notify the other Members of any Dissolution Event.  Upon dissolution, the Company’s business shall be liquidated in an orderly manner.  The Managing Member shall appoint a liquidating trustee to wind up the affairs of the Company pursuant to this Agreement.  In performing its duties, the liquidating trustee is authorized to sell, distribute, exchange or otherwise dispose of the assets of the Company in accordance with the Delaware Act and in any

 

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reasonable manner that the liquidating trustee shall determine to be in the best interest of the Members.

 

(b)                                 The proceeds of the liquidation of the Company shall be distributed in the following order and priority:

 

(i)                                     first, to the creditors (including any Members or their respective Affiliates that are creditors) of the Company in satisfaction of all of the Company’s liabilities (whether by payment or by making reasonable provision for payment thereof, including the setting up of any reserves which are, in the judgment of the liquidating trustee, reasonably necessary therefor); and

 

(ii)                                  second, to the Members in the same manner as distributions under Section 5.03(b), subject to Section 5.03(e).

 

(c)                                  Distribution of Property.  In the event it becomes necessary in connection with the liquidation of the Company to make a distribution of Property in-kind, subject to the priority set forth in Section 10.02, the liquidating trustee shall have the right to compel each Member to accept a distribution of any Property in-kind (with such Property, as a percentage of the total liquidating distributions to such Member, corresponding as nearly as possible to such Member’s Percentage Interest), with such distribution being based upon the amount of cash that would be distributed to such Members if such Property were sold for an amount of cash equal to the fair market value of such Property, as determined by the liquidating trustee in good faith, subject to the last sentence of Section 5.03(d).

 

Section 10.03                      Termination.  The Company shall terminate when all of the assets of the Company, after payment of or reasonable provision for the payment of all debts and liabilities of the Company, shall have been distributed to the Members in the manner provided for in this Article X, and the articles of organization of the Company shall have been cancelled in the manner required by the Michigan Act.

 

Section 10.04                      Survival.  Termination, dissolution, liquidation or winding up of the Company for any reason shall not release any party from any liability which at the time of such termination, dissolution, liquidation or winding up already had accrued to any other party or which thereafter may accrue in respect to any act or omission prior to such termination, dissolution, liquidation or winding up.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01                      Expenses.  Other than as set forth in Section 4.11 of the Reorganization Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

 

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Section 11.02                      Further Assurances.  Each Member agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by Applicable Law or as, in the reasonable judgment of the Managing Member, may be necessary or advisable to carry out the intent and purposes of this Agreement.

 

Section 11.03                      Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given to such party at the address, facsimile number or e-mail address specified for such party on the Member Schedule hereto.  All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

 

Section 11.04                      Binding Effect; Benefit; Assignment.

 

(a)                                 The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.  No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

 

(b)                                 Except as provided in Article VIII, no Member may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the Managing Member (it being understood that any Rock Member may assign, delegate or otherwise transfer such rights or obligations without such consent to Permitted Transferees).

 

Section 11.05                      Jurisdiction.

 

(a)                                 The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Third Judicial Circuit, Wayne County, Michigan or, if the state courts of the State of Michigan lack jurisdiction over such action or proceeding, then the United States District Court for the Eastern District of Michigan, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

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Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 11.03 shall be deemed effective service of process on such party.

 

(b)                                 EACH OF THE COMPANY AND THE MEMBERS HEREBY IRREVOCABLY DESIGNATES THE CORPORATION TRUST COMPANY (IN SUCH CAPACITY, THE “PROCESS AGENT”), WITH AN OFFICE AT THE CORPORATION COMPANY, 40600 ANN ARBOR ROAD EAST, SUITE 201, PLYMOUTH, MICHIGAN 48170, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT, AND SUCH SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT; PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE SHALL ALSO DELIVER A COPY THEREOF TO EACH OTHER SUCH PARTY IN THE MANNER PROVIDED IN SECTION 11.03 OF THIS AGREEMENT.  EACH PARTY SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT SO THAT SUCH PARTY SHALL AT ALL TIMES HAVE AN AGENT FOR SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN WILMINGTON, DELAWARE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW.  EACH PARTY EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF MICHIGAN AND OF THE UNITED STATES OF AMERICA.

 

Section 11.06                      Counterparts.  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

Section 11.07                      Entire Agreement.  This Agreement and the other Reorganization Documents constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.  Nothing in this Agreement shall create any third-party beneficiary rights in favor of any Person or other party, except to the extent provided herein with respect to Indemnitee-Related Entities, each of whom are intended third-party beneficiaries of those provisions that specifically relate to them with the right to enforce such provisions as if they were a party hereto.

 

Section 11.08                      Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions,

 

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covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

 

Section 11.09                      Amendment.

 

(a)                                 This Agreement can be amended at any time and from time to time by the Managing Member; provided, in addition to the approval of the Managing Member, no amendment to this Agreement may:

 

(i)                                     without the prior written consent of each Rock Member, (x) adversely modify the limited liability of any Rock Member set forth in Section 5.01, Section 5.02, Section 5.04, Section 5.05, Section 5.06, Section 6.01(c), Section 6.03, Section 9.01, Section 9.02 or Section 11.01, or otherwise modify in any material respect the limited liability of any Rock Member, or adversely increase the liabilities or obligations (other than de minimis liabilities or obligations) of any Rock Member or (y) adversely modify the express rights of any Rock Member set forth in Section 3.01(a), Section 3.03(c)(ii), Section 3.04, Article IV, Section 5.03(e), Section 7.03(b), Section 7.04 and this Section 11.09 (in the case of clause (y), only so long as such Rock Member is entitled to such express rights);

 

(ii)                                  adversely modify in any material respect the Units (or the rights, preferences or privileges of the Units) then held by any Members in any materially disproportionate manner to those then held by any other Members without the prior written consent of a majority in interest of such disproportionately affected Member or Members.

 

(b)                                 For the avoidance of doubt, the Managing Member, acting alone, may amend this Agreement, including the Member Schedule, (x) to reflect the admission of new Members or Transfers of Units, each as provided by and in accordance with, the terms of this Agreement, (y) to effect any subdivisions or combinations of Units made in compliance with Section 4.02(c) and (z) to issue additional Common Units or any new class of Units (whether or not pari passu with the Common Units) in accordance with the terms of this Agreement and to provide that the Members being issued such new Units be entitled to the rights provided to the Rock Members with respect to all or a portion of the provisions applicable thereto hereunder and any other rights that do not diminish or eliminate any of the express rights of the Rock Members described in Section 11.09(a)(i)(y).

 

(c)                                  No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the party to be bound and then only to the specific purpose, extent and instance so provided.

 

45

 

Section 11.10                      Confidentiality.

 

(a)                                 Each Member shall, and shall direct those of its Affiliates and their respective directors, officers, members, stockholders, partners, employees, attorneys, accountants, consultants, trustees and other advisors (the “Member Parties”) who have access to Confidential Information to, keep confidential and not disclose any Confidential Information to any Person other than a Member Party who agrees to keep such Confidential Information confidential in accordance with this Section 11.10, in each case without the express consent, in the case of Confidential Information acquired from the Company, of the Managing Member or, in the case of Confidential Information acquired from another Member, such other Member, unless:

 

(i)                                     such disclosure is required by Applicable Law;

 

(ii)                                  such disclosure is reasonably required in connection with any tax audit involving the Company or any Member or its Affiliates;

 

(iii)                               such disclosure is reasonably required in connection with any litigation against or involving the Company or any Member; or

 

(iv)                              such disclosure is reasonably required in connection with any proposed Transfer of all or any part of such Member’s Units in the Company; provided that with respect to any such use of any Confidential Information referred to in this clause (iv), advance notice must be given to the Managing Member so that it may require any proposed Transferee that is not a Member to enter into a confidentiality agreement with terms substantially similar to the terms of this Section 11.10 (excluding this clause (iv)) prior to the disclosure of such Confidential Information.

 

(b)                                 “Confidential Information” means any information related to the activities of the Company, the Members and their respective Affiliates that an Member may acquire from the Company or the Members, other than information that (i) is already available through publicly available sources of information (other than as a result of disclosure by such Member), (ii) was available to a Member on a non-confidential basis prior to its disclosure to such Member by the Company, or (iii) becomes available to a Member on a non-confidential basis from a third party, provided such third party is not known by such Member, after reasonable inquiry, to be bound by this Agreement or another confidentiality agreement with the Company.  Such Confidential Information may include information that pertains or relates to the business and affairs of any other Member or any other Company matters.  Confidential Information may be used by a Member and its Member Parties only in connection with Company matters and in connection with the maintenance of its interest in the Company.

 

(c)                                  In the event that any Member or any Member Parties of such Member is required to disclose any of the Confidential Information, such Member shall use reasonable efforts to provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Agreement, and such Member shall use reasonable

 

46

 

efforts to cooperate with the Company in any effort any such Person undertakes to obtain a protective order or other remedy.  In the event that such protective order or other remedy is not obtained, or that the Company waives compliance with the provisions of this Section 11.10, such Member and its Member Parties shall furnish only that portion of the Confidential Information that is legally required and shall exercise all reasonable efforts to obtain reasonably reliable assurance that the Confidential Information shall be accorded confidential treatment.

 

(d)                                 Notwithstanding anything in this Agreement to the contrary, each Member may disclose to any persons the U.S. federal income tax treatment and tax structure of the Company and the transactions set out in the Reorganization Agreement.  For this purpose, “tax structure” is limited to any facts relevant to the U.S. federal income tax treatment of the Company and does not include information relating to the identity of the Company or any Member.

 

Section 11.11                      Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.

 

[signature pages follow]

 

47

 

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Operating Agreement to be duly executed as of the day and year first written above.

 

 

	
 
    	
RKT HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ROCK   HOLDINGS INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DANIEL   GILBERT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ROCKET COMPANIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to the Second Amended and Restated
 Operating Agreement of RKT Holdings, LLC]Exhibit 10.13

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

EXECUTION

 

 

THIRD AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as administrative agent (“Administrative Agent”),

 

CREDIT SUISSE AG, a company incorporated in Switzerland, acting through its CAYMAN ISLANDS BRANCH, as buyer (“Buyer”), ALPINE SECURITIZATION LTD, as buyer and other Buyers from time to time party to this Agreement (“Buyers”)

 

and

 

QUICKEN LOANS INC. AND ONE REVERSE MORTGAGE, LLC, as sellers (“Sellers”)

 

 

Dated May 24, 2017

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
Applicability
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Definitions
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
Program; Initiation of   Transactions
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
Repurchase; One Reverse   Termination Trigger Event
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
Price Differential
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
Margin Maintenance
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
Income Payments
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
Security Interest
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
Payment and Transfer
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
Conditions Precedent
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
Program; Costs
    	
 
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
Servicing
    	
 
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
Representations and   Warranties
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
Covenants
    	
 
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
15.
    	
Events of Default
    	
 
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
16.
    	
Remedies Upon Default
    	
 
    	
56
    
	
 
    	
 
    	
 
    	
 
    
	
17.
    	
Reports
    	
 
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
18.
    	
Repurchase Transactions
    	
 
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
19.
    	
Single Agreement
    	
 
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
20.
    	
Notices and Other   Communications
    	
 
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
21.
    	
Entire Agreement;   Severability
    	
 
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
22.
    	
Non assignability
    	
 
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
23.
    	
Set-off
    	
 
    	
68
    

 

i

 

	
24.
    	
Binding Effect;   Governing Law; Jurisdiction
    	
 
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
25.
    	
No Waivers, Etc.
    	
 
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
26.
    	
Intent
    	
 
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
27.
    	
Disclosure Relating to Certain   Federal Protections
    	
 
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
28.
    	
Power of Attorney
    	
 
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
29.
    	
Buyers May Act   Through Administrative Agent
    	
 
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
30.
    	
Indemnification;   Obligations
    	
 
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
31.
    	
Counterparts
    	
 
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
32.
    	
Confidentiality
    	
 
    	
72
    
	
 
    	
 
    	
 
    	
 
    
	
33.
    	
Recording of Communications
    	
 
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
34.
    	
Reserved
    	
 
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
35.
    	
Periodic Due Diligence   Review
    	
 
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
36.
    	
Authorizations
    	
 
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
37.
    	
Acknowledgment of   Administration of Repurchase Agreement
    	
 
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
38.
    	
Reserved
    	
 
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
39.
    	
Acknowledgement Of   Anti-Predatory Lending Policies
    	
 
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
40.
    	
Documents Mutually   Drafted
    	
 
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
41.
    	
General Interpretive   Principles
    	
 
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
42.
    	
Joint and Several
    	
 
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
43.
    	
Conflicts
    	
 
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
44.
    	
Bankruptcy Non-Petition
    	
 
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
45.
    	
Limited Recourse
    	
 
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
46.
    	
Amendment and   Restatement
    	
 
    	
78
    

 

ii

 

	
SCHEDULES
    	
 
    
	
 
    	
 
    
	
Schedule 1 – Representations and Warranties with   Respect to Purchased Mortgage Loans
    	
 
    
	
 
    	
 
    
	
Schedule 2 – Authorized Representatives
    	
 
    
	
 
    	
 
    
	
Schedule 3 – Litigation of Sellers
    	
 
    
	
 
    	
 
    
	
Schedule 4 – Executive Management and Offices
    	
 
    
	
 
    	
 
    
	
Schedule 5 – Trade Names of Quicken Loans
    	
 
    
	
 
    	
 
    
	
EXHIBITS
    	
 
    
	
 
    	
 
    
	
Exhibit A – Reserved
    	
 
    
	
 
    	
 
    
	
Exhibit B – Reserved
    	
 
    
	
 
    	
 
    
	
Exhibit C – Form of Mortgage Loan Schedule
    	
 
    
	
 
    	
 
    
	
Exhibit D – Reserved
    	
 
    
	
 
    	
 
    
	
Exhibit E – Form of Power of Attorney
    	
 
    
	
 
    	
 
    
	
Exhibit F – Reserved
    	
 
    
	
 
    	
 
    
	
Exhibit G – Underwriting Guidelines
    	
 
    
	
 
    	
 
    
	
Exhibit H – Reserved
    	
 
    
	
 
    	
 
    
	
Exhibit I – Sellers’ Tax Identification Number
    	
 
    
	
 
    	
 
    
	
Exhibit J – Existing Indebtedness
    	
 
    
	
 
    	
 
    
	
Exhibit K – Form of Escrow Instruction   Letter
    	
 
    
	
 
    	
 
    
	
Exhibit L – Form of Notice of Additional   Buyer
    	
 
    
	
 
    	
 
    
	
Exhibit M – Form of Servicer Notice
    	
 
    

 

iii

 

This is a THIRD AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of May 24, 2017, among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (“Administrative Agent”), as administrative agent on behalf of Buyers, Credit Suisse AG, a company incorporated in Switzerland, acting through its Cayman Islands Branch (“CS Cayman” and a “Buyer”), Alpine Securitization LTD (“Alpine” and a “Buyer”), QUICKEN LOANS INC. (“Quicken Loans” and a “Seller”) and ONE REVERSE MORTGAGE, LLC (“One Reverse” and a “Seller”, and together with Quicken Loans, the “Sellers”).

 

The Administrative Agent, as a Buyer and the Sellers previously entered into a Master Repurchase Agreement, dated as of August 8, 2003, as amended by that certain Amended and Restated Master Repurchase Agreement, dated as of November 30, 2007, as amended by that certain Second Amended and Restated Master Repurchase Agreement, dated as of September 27, 2013, as amended (the “Existing Master Repurchase Agreement”).

 

Pursuant to that certain Assignment, Assumption and Appointment Agreement, dated as of June 16, 2016 among Administrative Agent and CS Cayman, as a Buyer (the “Assignment, Assumption and Appointment Agreement”), Administrative Agent sold and assigned its right, title and interest in the Transactions and the related Purchased Mortgage Loans hereunder to CS Cayman and was designated by Buyers as their Administrative Agent.

 

The parties hereto have requested that the Existing Master Repurchase Agreement be amended and restated, in its entirety, on the terms and subject to the conditions set forth herein.

 

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

 

1.                                     Applicability

 

From time to time the parties hereto may enter into transactions in which Sellers agree to transfer to Administrative Agent on behalf of Buyers Mortgage Loans (as hereinafter defined) on a servicing released basis against the transfer of funds by Administrative Agent, with a simultaneous agreement by Administrative Agent on behalf of Buyers to transfer to Sellers such Mortgage Loans on a servicing released basis at a date certain or on demand, against the transfer of funds by Sellers. This Agreement is a commitment by Administrative Agent on behalf of Committed Buyer to engage in the Transactions as set forth herein on or before the Termination Date up to the Maximum Committed Purchase Price; provided, that the Administrative Agent on behalf of Buyers shall have no commitment to enter into any Transaction requested which would result in the aggregate Purchase Price of then outstanding Transactions to exceed the Maximum Committed Purchase Price. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder. For the avoidance of doubt, and for administrative

 

 

and tracking purposes, the purchase and sale of each Purchased Mortgage Loan shall be deemed a separate Transaction.

 

2.                                     Definitions

 

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

 

“Accepted Servicing Practices” means, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located.

 

“Act of Insolvency” means, with respect to any Person, (i) the filing by such Person of a petition, commencing, or authorizing the commencement of any case or proceeding, or the voluntary joining of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or suffering any such petition or proceeding to be commenced by another which is consented to, not timely contested or results in entry of an order for relief; (ii) the seeking by such Person of the appointment of a receiver, trustee, custodian or similar official for such party; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so (provided, however, if such appointment is the result of the commencement of involuntary proceedings or the filing of an involuntary petition against such Person and such appointment is dismissed within sixty (60) days after the initial date thereof, an Act of Insolvency shall not be deemed to have occurred); (iv) the making or offering by such Person of a composition with its creditors or a general assignment for the benefit of creditors; (v) the admission in writing by an Executive Management officer of such Person of its inability to pay its debts or discharge its obligations as they become due or mature; or (vi) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the Executive Management of such Person or to materially curtail its authority in the conduct of the business of such Person, and any such action described in this clause (vi) is determined by the Administrative Agent in its sole good faith discretion to be materially adverse to Administrative Agent and the Buyers taken as a whole, Sellers taken as a whole, the Repurchase Assets or Quicken Loans’ ability to perform under this Agreement.

 

“Additional Buyers” has the meaning set forth in Section 37 hereof.

 

“Adjusted Tangible Net Worth” has the meaning assigned to such term in the Pricing Side Letter.

 

“Administrative Agent” means CSFBMC or, subject to Section 22 hereof, any successor thereto that is an Affiliate of CSFBMC or is approved by Sellers; provided, that such approval shall not be unreasonably withheld.

 

“Affiliate” means, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

 

2

 

“Agency” means Freddie Mac, Fannie Mae or GNMA, as applicable.

 

“Agency Mortgage Loan” means, collectively, Conforming High CLTV Loan, Conforming Mortgage Loans, FHA Loans, VA Loans, RHS Loans and HECM Loans.

 

“Agency Security” means a mortgage-backed security issued or guaranteed by an Agency.

 

“Agreement” means this Third Amended and Restated Master Repurchase Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

 

“Appraised Value” means the value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.

 

“Asset Tape” means a remittance report on a monthly basis or requested by Administrative Agent pursuant to Section 17.d hereof containing servicing information, including, without limitation, those fields reasonably requested by Administrative Agent from time to time, on a loan-by-loan basis and in the aggregate, with respect to the Purchased Mortgage Loans serviced by either Seller or any Servicer for the month (or any portion thereof) prior to the Reporting Date.

 

“Asset Value” has the meaning assigned to such term in the Pricing Side Letter.

 

“Assignment and Acceptance” has the meaning assigned to such term in Section 22 hereof.

 

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

 

“Bankruptcy Code” means the United States Bankruptcy Code of 1978, as amended from time to time.

 

“BPO” means an opinion of the fair market value of a Mortgaged Property given by a licensed real estate agent or broker which generally includes three comparable sales and three comparable listings.

 

“Business Day” means any day other than (i) a Saturday or Sunday; (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New York or the Custodian is authorized or obligated by law or executive order to be closed or (iii) a public or bank holiday in New York City.

 

“Buyer” means CS Cayman, Alpine and each assignee of Buyer pursuant to Section 22.

 

3

 

“Change in Control” means:

 

(A)                               any transaction or event as a result of which Dan Gilbert ceases to directly or indirectly own beneficially or of record, at least fifty-one percent (51%) of the voting stock of Quicken Loans;

 

(B)                               the sale, transfer, or other disposition of all or substantially all of Quicken Loans’ assets (excluding any such action taken in connection with any securitization transaction), which sale, transfer, or other disposition occurs without Administrative Agent’s prior written consent; or

 

(C)                               the consummation of a merger or consolidation of Quicken Loans with or into another entity or any other corporate reorganization (which merger or consolidation occurs without Administrative Agent’s prior written consent, provided that such consent shall be deemed to have been given if Administrative Agent does not respond within ten (10) Business Days after Quicken Loans’ written notice to Administrative Agent of the consummation of any such events), if more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation or such other reorganization is owned by Persons who were not stockholders of Quicken Loans immediately prior to such merger, consolidation or other reorganization;

 

provided, however, notwithstanding anything herein to the contrary, it is understood and agreed that, so long as it does not otherwise create a Default or Event of Default hereunder, any sale, transfer, or other disposition of all or substantially all of One Reverse’s assets and any consummation of a merger or consolidation of One Reverse with or into another entity or any other corporate reorganization after which Dan Gilbert continues to directly or indirectly own beneficially or of record more than fifty percent (50%) of the voting equity interests of Quicken Loans or its successor shall not be deemed to be a Change of Control.

 

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

 

“Collection Account” means the account established in connection with the Collection Account Control Agreement, into which all collections and proceeds on or in respect of the Mortgage Loans shall be deposited by Servicer.

 

“Collection Account Control Agreement” means that certain Treasury Management Services Controlled Collateral Account Service Agreement, dated as of June 1, 2011, among Administrative Agent, Quicken Loans and JPMorgan Chase Bank, N.A., as the same may be amended or restated from time to time.

 

“Commitment Fee” has the meaning assigned to such term in the Pricing Side Letter.

 

“Committed Buyer” means CS Cayman.

 

4

 

“Committed Mortgage Loan” means a Mortgage Loan which is the subject of a Take-Out Commitment with a Take-Out Investor.

 

“Conforming High CLTV Loan” means an otherwise Conforming Mortgage Loan (i) originated using Desktop Underwriter for underwriting pursuant to the FNMA DU Refi PlusTM program with a LTV of more than [***] as more specifically described in the then current Fannie Mae guidelines and any updates, amendments or supplements; (ii) originated for underwriting pursuant to the FNMA Refi PlusTM program with a LTV of more than [***] as more specifically described in the then current Fannie Mae guidelines and any updates, amendments or supplements; (iii) originated for underwriting pursuant to the Freddie Mac’s Relief Refinance MortgageSM program with a LTV of more than [***] as more specifically described in the then current Freddie Mac guidelines and any updates, amendments or supplements, as amended by variances agreed to between Freddie Mac and Quicken Loans and approved by Administrative Agent; or (iv) originated pursuant to Fannie Mae’s Home Affordable Refinance Program as announced in Fannie Mae Announcement SEL 2011 12, including the Refi Plus option applicable to “same servicers”, as set forth in subsequent Announcements, FAQs, Selling Guide updates and Servicing Guide updates issued by Fannie Mae in connection with such program, as amended by variances agreed to between Fannie Mae and Quicken Loans and approved by Administrative Agent.

 

“Conforming Mortgage Loan” means a first lien Mortgage Loan originated in accordance with the criteria of an Agency for purchase of Mortgage Loans, including, without limitation, conventional Mortgage Loans, Pooled Mortgage Loans, FHA Loans, VA Loans and RHS Loans, and (a) with respect to purchase money Mortgage Loans and all FHA Loans, VA Loans and RHS Loans, with a LTV of up to [***] and (b) with respect to refinanced Mortgage Loans, with a LTV of up to 105%, except that refinanced Mortgage Loans that are also FHA Loans, VA Loans or RHS Loans shall be a Conforming Mortgage Loan only if they have a LTV of up to [***].

 

“CP Conduit” means a commercial paper conduit, including but not limited to Alpine, that is an Affiliate of CSFBMC or whose obligations under the Program Agreements are otherwise also the obligations of CS Cayman.

 

“CSFBMC” means Credit Suisse First Boston Mortgage Capital LLC, or any successors or permitted assigns.

 

“Custodial Agreement” means the amended and restated custodial agreement dated as of May 24, 2017, among Sellers, Administrative Agent, Buyers and Custodian as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Custodial Mortgage Loan Schedule” has the meaning assigned to such term in the Custodial Agreement.

 

“Custodian” means Deutsche Bank National Trust Company or such other party specified by Administrative Agent and agreed to by Sellers, which approval shall not be unreasonably withheld.

 

5

 

“Default” means an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.

 

“Dollars” and “$” means dollars in lawful currency of the United States of America.

 

“E&O Insurance” means insurance coverage with respect to employee errors, omissions, dishonesty, forgery or alteration, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Fannie Mae, Freddie Mac and GNMA, to the extent a Seller sells Mortgage Loans to such Agency.

 

“Electronic Tracking Agreement” means each of those certain amended and restated Electronic Tracking Agreements among Administrative Agent, the applicable Seller, MERS and MERSCORP Holdings, Inc., as the same may be amended or restated from time to time.

 

“EO13224” has the meanings specific in Section 13(a)(27) hereof.

 

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

 

“ERISA Affiliate” means any corporation or trade or business that, together with Sellers, is treated as a single employer under Section 414(b) or (c) of the Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as single employer described in Section 414 of the Code.

 

“Escrow Instruction Letter” means the Escrow Instruction Letter from the applicable Seller to the Settlement Agent, in the form of Exhibit K hereto, as the same may be modified, supplemented and in effect from time to time.

 

“Event of Default” has the meaning specified in Section 15 hereof.

 

“Event of Termination” means with respect to either Seller (a) with respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event, or (b) the withdrawal of either Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (c) the failure by either Seller or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code (or Section 430(j) of the Code as amended by the Pension Protection Act) or Section 302(e) of ERISA (or Section 303(j) of ERISA, as amended by the Pension Protection Act), or (d) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by either Seller or any ERISA Affiliate thereof to terminate any plan, or (e) the failure to meet requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or

 

6

 

(f) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (g) the receipt by either Seller or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (f) has been taken by the PBGC with respect to such Multiemployer Plan, or (h) any event or circumstance exists which may reasonably be expected to constitute grounds for either Seller or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412(b) or 430(k) of the Code with respect to any Plan.

 

“Excess Margin Notice” has the meaning specific in Section 6(d) hereof.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Buyer or other recipient of any payment under any Program Agreement or required to be withheld or deducted from a payment to such Buyer or such other recipient: (a) Taxes based on (or measured by) net income or net profits, or gross receipts, franchise Taxes and branch profits Taxes that are imposed on a Buyer or other recipient of any payment hereunder as a result of (i) being organized under the laws of, or having its principal office or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision or Taxing authority thereof), or (ii) a present or former connection between such Buyer or other recipient and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or Taxing authority thereof (other than connections arising from such Buyer or other recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced under this Agreement or any Program Agreement, or sold or assigned an interest in any Purchased Mortgage Loan pursuant to this Agreement, excluding any assignment made at the request of Seller); (b) any Tax imposed on a Buyer or other recipient of a payment hereunder that is attributable to such Buyer’s or other recipient’s failure to comply with relevant requirements set forth in Section 11(e)(ii); (c) any U.S. federal withholding Tax that is imposed on amounts payable to or for the account of such Buyer or other recipient of a payment hereunder pursuant to a law in effect on the date such person becomes a party to or under this Agreement, or such person changes its lending office, except in each case to the extent that amounts with respect to Taxes were payable either to such person’s assignor immediately before such person became a party hereto or to such person immediately before it changed its lending office; and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Executive Management” of an entity means that entity’s chairman of the board of directors, chief executive officer, president, and chief financial officer/controller.

 

“Existing Indebtedness” has the meaning specified in Section 13(a)(23) hereof.

 

“Fannie Mae” means Fannie Mae, the government sponsored enterprise formerly known as the Federal National Mortgage Association, or any successor thereto.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

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“FDIA” has the meaning set forth in Section 26(c) hereof.

 

“FDICIA” has the meaning set forth in Section 26(d) hereof.

 

“FHA” means the Federal Housing Administration, an agency within the United

 

States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.

 

“FHA Approved Mortgagee” means a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.

 

“FHA Loan” means a Mortgage Loan which is the subject of an FHA Mortgage

 

Insurance Contract.

 

“FHA Mortgage Insurance Contract” means the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.

 

“FHA Regulations” means the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.

 

“FICO” means Fair Isaac & Co., or any successor thereto.

 

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

 

“Freddie Mac Assignment Agreement” means the Assignment Agreement, dated as of December 20, 2012, among the Administrative Agent, Quicken Loans and Freddie Mac, as the same may be amended from time to time.

 

“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America and applied on a consistent basis.

 

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

 

“Good Faith Dispute” means a bona fide, good faith dispute being pursued by any Seller through appropriate proceedings, written notice of which dispute has been given by such Seller to all applicable parties, and against which adequate reserves are being maintained by such Seller.

 

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“Governmental Authority” means any nation or government, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions over either Seller, Administrative Agent or any Buyer, as applicable.

 

“Governmental Order” has the meaning set forth in Section 32(b) hereof.

 

“Guarantee” means, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance or other obligations in respect of a Mortgaged Property, to the extent required by Administrative Agent. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.

 

“HECM Loan” means a home equity conversion Mortgage Loan which is secured by a first lien and is eligible to be insured by FHA.

 

“HELOC” has the meaning set forth in the definition of Second Lien Mortgage Loan.

 

“High Cost Mortgage Loan” means a Mortgage Loan (a) classified as a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; or (b) classified as a “high cost,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).

 

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

 

“Income” means with respect to any Purchased Mortgage Loan at any time until repurchased by the Sellers, any principal received thereon or in respect thereof and all interest, dividends or other distributions thereon.

 

“Indebtedness” has the meaning assigned to such term in the Pricing Side Letter.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Sellers hereunder or under any Program Agreement and (b) Other Taxes.

 

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“Index” means, with respect to any adjustable rate Mortgage Loan, the index identified on the Mortgage Loan Schedule and set forth in the related Mortgage Note for the purpose of calculating the applicable Mortgage Interest Rate.

 

“Indemnified Amounts” has the meaning set forth in Section 30(a) hereof.

 

“Indemnified Party” has the meaning set forth in Section 30(a) hereof.

 

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of April 4, 2012, among the Administrative Agent, the Sellers, UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, JPMorgan Chase Bank, National Association, Royal Bank of Canada, Bank of America, N.A., Morgan Stanley Bank, N.A. and Morgan Stanley Mortgage Capital Holdings LLC, as the same may be amended or restated from time to time.

 

“Interest Rate Protection Agreement” means, with respect to any or all of the Purchased Mortgage Loans, any short sale of a U.S. Treasury Security, or futures contract, or mortgage related security, or eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement or Take-Out Commitment, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by a Seller.

 

“Joint Account Control Agreement” means the Joint Account Control Agreement, dated as of April 4, 2012, among the Administrative Agent, the Sellers, UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, JPMorgan Chase Bank, National Association, Royal Bank of Canada, Bank of America, N.A., Morgan Stanley Bank, N.A., Morgan Stanley Mortgage Capital Holdings LLC and Deutsche Bank National Trust Company, as paying agent, as the same may be amended or restated from time to time.

 

“Joint Securities Account Control Agreement” means the Joint Securities Account Control Agreement, dated as of April 4, 2012, among the Administrative Agent, the Sellers, UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, JPMorgan Chase Bank, National Association, Royal Bank of Canada, Bank of America, N.A., Morgan Stanley Bank, N.A., Morgan Stanley Mortgage Capital Holdings LLC and Deutsche Bank National Trust Company, as securities intermediary, as the same may be amended or restated from time to time.

 

“LIBOR” has the meaning assigned to such term in the Pricing Side Letter.

 

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

 

“Loan to Value Ratio” or “LTV” means with respect to any Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan, to the lesser of (a) the Appraised Value of the related Mortgaged Property at origination or (b) if the Mortgaged Property was purchased within twelve (12) months of the origination of such Mortgage Loan, the purchase price of the related Mortgaged Property.

 

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“Margin Call” has the meaning specified in Section 6(a) hereof.

 

“Margin Deadline” has the meaning specified in Section 6(b) hereof.

 

“Margin Deficit” has the meaning specified in Section 6(a) hereof.

 

“Margin Excess” has the meaning specific in Section 6(d) hereof.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties or condition (financial or otherwise) of the Sellers and any Affiliate that is a party to any Program Agreement taken as a whole; (b) a material impairment of the ability of the Sellers and any Affiliate that is a party to any Program Agreement taken as a whole to perform under any Program Agreement and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Agreement against the Sellers and any Affiliate that is a party to any Program Agreement, taken as a whole. Notwithstanding the foregoing, a “Material Adverse Effect” shall not include any effect caused by or attributable solely to the gross negligence or willful misconduct on the part of Administrative Agent or any Buyer.

 

“Maximum Aggregate Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.

 

“Maximum Committed Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.

 

“MERS” means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

 

“MERS System” means the system of recording transfers of mortgages electronically maintained by MERS.

 

“Monthly Payment” means the scheduled monthly payment of principal and interest on a Mortgage Loan.

 

“Moody’s” means Moody’s Investors Service, Inc. or any successors thereto.

 

“Mortgage” means each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a lien on real property and other property and rights incidental thereto.

 

“Mortgage File” means, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in Exhibit E-1 to the Custodial Agreement.

 

“Mortgage Interest Rate” means the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.

 

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“Mortgage Loan” means any Non-Agency QM Mortgage Loan, Non-Agency Non-QM Mortgage Loan, Agency Mortgage Loan, Scratch and Dent Mortgage Loan or Second Lien Mortgage Loan which is, other than with respect to a Second Lien Mortgage Loan, a first lien, fixed or floating rate, one to four family residential mortgage or home equity loan evidenced by a promissory note and secured by a first lien mortgage, which satisfies the requirements set forth in the Underwriting Guidelines and Section 13(b) hereof or with respect to a Second Lien Mortgage Loan, a second lien, fixed or floating rate, one to four family residential mortgage or home equity loan evidenced by a promissory note and secured by a second lien mortgage, which satisfies the requirements set forth in the Underwriting Guidelines and Section 13(b) hereof; provided, however, that Mortgage Loans shall not include any High Cost Mortgage Loans.

 

“Mortgage Loan Documents” means the documents in the related Mortgage File to be delivered to the Custodian.

 

“Mortgage Loan Schedule” means with respect to any Transaction as of any date, a mortgage loan schedule in the form of either (a) Exhibit C attached hereto or (b) a computer tape or other electronic medium generated by the applicable Seller, and delivered to Administrative Agent and Custodian, which provides information (including, without limitation, the information set forth on Exhibit C attached hereto) relating to the Purchased Mortgage Loans in a format acceptable to Administrative Agent.

 

“Mortgage Note” means the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

 

“Mortgaged Property” means the real property securing repayment of the debt evidenced by a Mortgage Note.

 

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

 

“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are required to be made by a Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.

 

“Netting Agreement” means the Amended and Restated Margin, Setoff and Master Netting Agreement, dated as of May 24, 2017, among the Administrative Agent, CS Cayman, Alpine, Credit Suisse Securities (USA) LLC and Quicken Loans, as the same may be amended or restated from time to time.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

“Non-Agency Non-QM Mortgage Loan” means a Non-Agency QM Mortgage Loan that (a) does not meet the criteria for a Qualified Mortgage Loan; (b) meets all applicable criteria as set forth in the Underwriting Guidelines; and (c) is otherwise acceptable to Administrative Agent in its sole discretion.

 

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“Non-Agency QM Mortgage Loan” means an A quality first lien Mortgage Loan which is (a) not eligible for sale to an Agency and; (b) is (x) eligible for sale to a third party investor and (y) is originated in accordance with the Underwriting Guidelines, in each instance, approved by Administrative Agent, in its sole discretion.

 

“Non-Performing Mortgage Loan” has the meaning assigned to such term in the Pricing Side Letter.

 

“Notice Date” has the meaning given to it in Section 3(b) hereof.

 

“Obligations” means (a) all of each Seller’s obligations to pay the Repurchase Price on the Repurchase Date, the Price Differential on each Price Differential Payment Date, and other obligations, indebtedness and liabilities, to Administrative Agent and Buyers or Custodian arising under, or in connection with, the Program Agreements, whether now existing or hereafter arising; (b) any and all sums paid by Administrative Agent, Buyers or Administrative Agent on behalf of Buyers in order to preserve any Purchased Mortgage Loan or its interest therein; (c) in the event of any proceeding for the collection or enforcement of any of each Seller’s obligations, indebtedness and liabilities referred to in clause (a), the reasonable out-of-pocket expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Mortgage Loan, or of any exercise by Administrative Agent or Buyers of their rights under the Program Agreements, including, without limitation, reasonable attorneys’ fees and disbursements and court costs; (d) all of each Seller’s indemnity obligations to Administrative Agent, Buyers and Custodian or both pursuant to the Program Agreements and (e) all of each Seller’s obligations under the Servicing Facility Agreement and the other Servicing Facility Documents, (i) as long as Administrative Agent or an Affiliate of Administrative Agent is the “Administrative Agent” as defined in such Servicing Facility Agreement, or (ii) until all outstanding aggregate “Repurchase Price” under such Servicing Facility Agreement have been paid in full and all “Transactions” under the Servicing Facility Agreement have terminated.

 

“OFAC” has the meaning set forth in Section 13(a)(27) hereof.

 

“Officer’s Compliance Certificate” has the meaning assigned to such term in the Pricing Side Letter.

 

“One Reverse” means One Reverse Mortgage, LLC, a Delaware limited liability company and a Seller.

 

“One Reverse Termination Trigger Event” means the occurrence of any of the following:

 

(1)                                 While One Reverse is a Seller hereunder, any transaction or event as a result of which [***] ceases to directly or indirectly own beneficially or of record, at least fifty-one percent (51%) of the membership interests of One Reverse; provided, however, so long as it does not otherwise create a Default or Event of Default hereunder, any transaction, event, sale, transfer, or other disposition of all or substantially all of One Reverse’s assets and any consummation of a merger or consolidation of One Reverse with or into

 

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Quicken Loans shall not be deemed to be a One Reverse Termination Trigger Event; provided, that One Reverse shall be deemed removed from this Agreement and all applicable Program Agreements;

 

(2)                                 the sale, transfer, or other disposition of all or substantially all of One Reverse’s assets (excluding any such action taken in connection with any securitization transaction or any action that complies with clause (1) above), which sale, transfer, or other disposition occurs without Administrative Agent’s prior written consent;

 

(3)                                 a material impairment of the ability of One Reverse to perform under any Program Agreement and to avoid any Event of Default or a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Agreement against One Reverse;

 

(4)                                 One Reverse is insolvent, or is rendered insolvent by any Transaction and, after giving effect to such Transaction, is left with an unreasonably small amount of capital with which to engage in its business;

 

(5)                                 One Reverse incurs, or believes that it has incurred, debts beyond its ability to pay such debts as they mature or is contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets;

 

(6)                                 One Reverse enters into any transaction to liquidate, wind up or dissolve itself (or suffers any liquidation, winding up or dissolution); provided, however, that if such liquidation, winding up or dissolution results in Quicken Loans owning all of the Purchased Mortgage Loans subject to rights hereunder, such action shall not constitute a One Reverse Termination Trigger Event and One Reverse shall be deemed removed from this Agreement and all applicable Program Agreements;

 

(7)                                 One Reverse fails to maintain its status with GNMA as an approved lender in good standing (unless such failure is an independent decision of One Reverse and in no way attributed to a disapproval or other adverse action taken against One Reverse specifically (as opposed to all approved lenders generally) by GNMA), if such failure is not cured within ten (10) Business Days following receipt of written notice of such failure;

 

(8)                                 any material adverse change in the Property, business, financial condition or operations of One Reverse, in each case as determined by Administrative Agent in its sole good faith discretion, or any other condition exists which, in Administrative Agent’s sole good faith discretion, constitutes a material impairment of One Reverse’s ability to perform its obligations under this Agreement or any other Program Agreement; or

 

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(9)                                 any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of One Reverse or shall have taken any action to displace the Executive Management of One Reverse or to materially curtail its authority in the conduct of the business of One Reverse, or takes any action in the nature of enforcement to remove, limit or restrict the approval of One Reverse as an issuer or buyer of Mortgage Loans or securities backed thereby, and such action (i) is determined by Administrative Agent in its sole good faith discretion to be materially adverse to Administrative Agent and Buyers taken as a whole, One Reverse, the Repurchase Assets or One Reverse’s ability to perform under this Agreement and (ii) shall not have been discontinued or stayed within thirty (30) days.

 

“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes or any excise, sales, goods and services or transfer taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Program Agreement.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

 

“Pension Protection Act” means the Pension Protection Act of 2006.

 

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

 

“Plan” means an employee pension benefit or other plan as defined in Section 3(2) of ERISA, established or maintained by any Seller or any ERISA Affiliate and covered by Title IV of ERISA, other than a Multiemployer Plan.

 

“Pooled Mortgage Loan” means any (i) Purchased Mortgage Loan that is subject to a Transaction hereunder and is part of a pool of Purchased Mortgage Loans certified by Custodian to an Agency to be either (a) purchased by such Agency or (b) swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of the guidelines issued by the applicable Agency, and (ii) the portion of any Agency Security to the extent received in exchange for, and backed by a pool of, Purchased Mortgage Loans subject to a Transaction hereunder.

 

“Post-Default Rate” has the meaning assigned to such term in the Pricing Side Letter.

 

“Power of Attorney” means a Power of Attorney substantially in the form of Exhibit E hereto.

 

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“Price Differential” means as of any date of determination, an amount equal to the product of (A) the weighted average Pricing Rate for all Purchased Mortgage Loans and (B) the weighted average Purchase Price for all Purchased Mortgage Loans, calculated and accrued monthly on the basis of a 30-day month for the actual number of days during the period commencing on (and including) the first day of each calendar month and ending on (and including) the last day of such calendar month (or a pro rated amount for the partial months in which the date of this Agreement or the Termination Date occur).

 

“Price Differential Payment Date” means, with respect to a Purchased Mortgage Loan, the fifth (5th) day of the month following the related Purchase Date and each succeeding fifth (5th) day of the month thereafter; provided, that, with respect to such Purchased Mortgage Loan, the final Price Differential Payment Date shall be the related Repurchase Date; and provided, further, that if any such day is not a Business Day, the Price Differential Payment Date shall be the next succeeding Business Day.

 

“Pricing Rate” has the meaning assigned to such term in the Pricing Side Letter.

 

“Pricing Side Letter” means the letter agreement dated as of the date hereof among the Administrative Agent, the Buyers and the Sellers, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Program Agreements” means, collectively, the Pricing Side Letter, the Servicing Agreement, the Servicer Notice, the Custodial Agreement, this Agreement, the Collection Account Control Agreement, the Netting Agreement, the Intercreditor Agreement, the Joint Account Control Agreement, the Joint Securities Account Control Agreement, the Freddie Mac Assignment Agreement, the Takeout Commitment Letter Agreement, as applicable, each Electronic Tracking Agreement, if entered into, and each Power of Attorney.

 

“Prohibited Distribution” has the meaning set forth in Section 14(o) hereof.

 

“Prohibited Person” has the meaning set forth in Section 13(a)(27) hereof.

 

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

 

“Purchase Date” means the date on which Purchased Mortgage Loans are to be transferred by the applicable Seller to Administrative Agent for the benefit of Buyers and the Purchase Price is to be paid by Administrative Agent to the applicable Seller.

 

“Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.

 

“Purchase Price Percentage” has the meaning assigned to such term in the Pricing Side Letter.

 

“Purchased Mortgage Loans” means the collective reference to Mortgage Loans together with the Repurchase Assets related to such Mortgage Loans transferred by the applicable Seller to Administrative Agent for the benefit of Buyers in a Transaction hereunder, and/or listed on the related Mortgage Loan Schedule attached to the related Transaction Request,

 

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which such Mortgage Loans the Custodian has been instructed to hold for the benefit of Administrative Agent pursuant to the Custodial Agreement.

 

“Qualified Insurer” means a mortgage guaranty insurance company duly authorized and licensed where required by law to transact mortgage guaranty insurance business and approved as an insurer by Fannie Mae or Freddie Mac or GNMA, as applicable.

 

“Qualified Mortgage Loan” means a Mortgage Loan which is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e) including all applicable official staff interpretations, or any successor rule, regulation or interpretation, or which is a refinancing of a non-standard mortgage as set forth in 12 CFR 1026.43(d) including all applicable official staff interpretations, or any successor rule, regulation or interpretation.

 

“Records” means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Sellers or any other person or entity with respect to a Purchased Mortgage Loan. Records shall include the Mortgage Notes, any Mortgages, the Mortgage Files, the credit files related to the Purchased Mortgage Loan and any other instruments necessary to document or service a Mortgage Loan.

 

“Register” has the meaning assigned to such term in Section 22 hereof.

 

“Repledge Transaction” has the meaning set forth in Section 18 hereof.

 

“Repledgee” has the meaning set forth in Section 18 hereof.

 

“Reporting Date” means the fifth (5th) day of each month or, if such day is not a Business Day, the next succeeding Business Day.

 

“Repurchase Assets” has the meaning assigned thereto in Section 8 hereof.

 

“Repurchase Date” means the earlier of (i) the Termination Date, (ii) the date determined by the time periods set forth in paragraph (iv) of the definition of Asset Value, (iii) the date determined by application of Section 16 hereof or (iv) the date identified to Administrative Agent by the applicable Seller as the date that the related Mortgage Loan is to be sold pursuant to a Take-Out Commitment.

 

“Repurchase Price” means the price at which Purchased Mortgage Loans are to be transferred from Administrative Agent on behalf of Buyers to the applicable Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the accrued but unpaid Price Differential as of the date of such determination.

 

“Request for Certification” means a notice sent to the Custodian reflecting the sale of one or more Purchased Mortgage Loans to Administrative Agent for the benefit of Buyers hereunder.

 

“Requirement of Law” means, with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court or other governmental authority, applicable

 

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to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” means as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer of such Person.

 

“RHS Loan” means a Mortgage Loan originated in accordance with the Rural Housing Service Guaranteed Loan Program, which loan is subject to a Rural Housing Service Guaranty Commitment and eligible for delivery to an Agency for sale or inclusion in a mortgage backed securities loan pool.

 

“Rural Housing Service” or “RHS” means the Rural Housing Service of the U.S. Department of Agriculture or any successor.

 

“Rural Housing Service Approved Lender” means a lender which is approved by the Rural Housing Service to act as a lender in connection with the origination of RHS Loans.

 

“Rural Housing Service Guaranty” means with respect to a RHS Loan, the agreements evidencing the guaranty of such Mortgage Loan by the Rural Housing Service.

 

“S&P” means Standard & Poor’s Ratings Services, or any successor thereto.

 

“Schwab Purchase Agreement” means the Mortgage Loan Sale and Purchase Agreement, dated as of October 24, 2011, between Quicken Loans and Charles Schwab Bank.

 

“Scratch and Dent Mortgage Loan” means a first lien Mortgage Loan (i) originated by a Seller in accordance with the criteria of an Agency or Non-Agency QM Mortgage Loan, as applicable, except such Mortgage Loan is not eligible for sale to the original Take-Out Investor or has been subsequently repurchased from such original Take-Out Investor, in each case, for reasons other than delinquent payment under such Mortgage Loan, (ii) is acceptable to Buyers or Administrative Agent in their sole discretion and (iii) which is not thirty (30) or more days delinquent.

 

“SEC” means the Securities and Exchange Commission, or any successor thereto.

 

“Second Lien Mortgage Loan” means a Mortgage Loan or a home equity revolving line of credit (a “HELOC”) that is secured by a second lien on the related Mortgaged Property in accordance with the applicable Underwriting Guidelines.

 

“Sellers” means Quicken Loans Inc. and One Reverse Mortgage, LLC or any of their permitted successors and assigns.

 

“Servicer” means (a) with respect to Quicken Loans, Quicken Loans, any interim servicer for correspondent loans, or any other servicer approved by Administrative Agent in its sole discretion and (b) with respect to One Reverse, One Reverse, Reverse Mortgage Solutions, Inc., any interim servicer for correspondent loans, or any other servicer approved by Administrative Agent in its sole discretion.

 

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“Servicer Notice” means (a) with respect to Quicken Loans, a notice acknowledged and agreed to by a third party Servicer substantially in the form of Exhibit M hereto and (b) with respect to One Reverse, a notice acknowledged and agreed to by a third party Servicer substantially in the form of Exhibit M hereto.

 

“Servicing Agreement” means (a) with respect to Quicken Loans, any servicing agreement entered into between Quicken Loans and a third party Servicer as the same may be amended, restated, supplemented or otherwise modified from time to time and (b) with respect to One Reverse, any servicing agreement entered into between One Reverse and a third party Servicer as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Servicing Facility Agreement” means that certain Amended and Restated Master Repurchase Agreement (Participation Certificates and Servicing) dated as of May 24, 2017, among the Administrative Agent, CS Cayman, Alpine, and other Buyers from time to time party to the Servicing Facility Agreement, and Quicken Loans, as amended, restated, supplemented or otherwise modified from time to time.

 

“Servicing Facility Documents” shall mean “Program Agreements” as defined in the Servicing Facility Agreement.

 

“Servicing Facility Rights” has the meaning set forth in Section 8 hereof.

 

“Servicing Rights” means rights of any Person to administer, service or subservice, the Purchased Mortgage Loans or to possess related Records.

 

“Settlement Agent” means, with respect to any Transaction the subject of which is a Wet-Ink Mortgage Loan, the entity approved by Administrative Agent, in its sole good-faith discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet-Ink Mortgage Loan is being originated. A Settlement Agent is deemed approved unless Administrative Agent notifies Sellers otherwise at any time electronically or in writing.

 

“SIPA” means the Securities Investor Protection Act of 1970, as amended from time to time.

 

“Special Requirement” shall mean (a) for Fannie Mae, that certain Specialty Servicer Portfolios – Warehouse Lender Provisions 05/2012 between Quicken Loans and Fannie Mae (as amended or restated from time to time), and (b) for Freddie Mac, that certain Freddie Mac Refinance Mortgage — Same Servicer Offering Available to Seller for Certain Mortgages Previously Sold by Taylor, Bean and Whitaker to Freddie Mac (as amended or restated from time to time), each as approved by Administrative Agent.

 

“Statement Date” has the meanings specific in Section 13(a)(5) hereof.

 

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the

 

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board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

 

“Take-Out Commitment” means a commitment of a Seller to either (a) sell one or more identified Mortgage Loans to a Take-Out Investor or (b) (i) swap one or more identified Mortgage Loans with a Take-Out Investor that is an Agency for an Agency Security, and (ii) sell the related Agency Security to a Take-Out Investor, and in each case, the corresponding Take-Out Investor’s commitment back to a Seller to effectuate any of the foregoing, as applicable. With respect to any Take-Out Commitment with an Agency, the applicable agency documents list Administrative Agent as sole subscriber.

 

“Takeout Commitment Letter Agreement” means that certain letter agreement by and between the Administrative Agent and Charles Schwab Bank, dated as of March 13, 2012.

 

“Take-Out Investor” means (a) with respect to all Mortgage Loans other than Second Lien Mortgage Loans, (i) an Agency or (ii) any other institution which has made a Take-Out Commitment and has been approved by Administrative Agent for the benefit of Buyers or (b) with respect to the Second Lien Mortgage Loans, Charles Schwab Bank or any other institution which has been approved by Administrative Agent for the benefit of Buyers.

 

“Taxes” means any and all present or future taxes (including social security contributions and value added taxes), levies, imposts, duties (including stamp duties), deductions, charges (including ad valorem charges), withholdings (including backup withholding), assessments, fees or other charges of any nature whatsoever imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Termination Date” has the meaning assigned to such term in the Pricing Side Letter.

 

“TILA-RESPA Integrated Disclosure Rule” means the Truth-in-Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure Rule, adopted by the Consumer Financial Protection Bureau, which is effective for residential mortgage loan applications received on or after October 3, 2015.

 

“Transaction” has the meaning set forth in Section 1 hereof.

 

“Transaction Request” means a request via email or other electronic transmission and which may be in the form of a Mortgage Loan Schedule, from the applicable Seller to Administrative Agent notifying Administrative Agent that the applicable Seller wishes to enter into a Transaction hereunder and that indicates that it is a Transaction Request under this Agreement. For the avoidance of doubt, a Transaction Request may refer to multiple Mortgage Loans; provided that each Mortgage Loan shall be deemed to be subject to its own Transaction.

 

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“Trust Receipt and Certification” means, with respect to any Transaction as of any date, the related “Trust Receipt” as defined in the Custodial Agreement.

 

“Underwriting Guidelines” means: (i) in connection with Purchased Mortgage Loans for which an Agency is the intended Take-Out Investor, such Agency’s standards, procedures and guidelines for underwriting and acquiring Mortgage Loans; (ii) in connection with Purchased Mortgage Loans for which Administrative Agent or an Affiliate of Administrative Agent is the intended Take-Out Investor, Administrative Agent’s or such Affiliate’s standards, procedures, and guidelines (as provided to Sellers) for underwriting and acquiring Mortgage Loans; and (iii) in connection with Purchased Mortgage Loans for which a Take-Out Investor other than one specified in subsections (i) or (ii) immediately above is the intended Take-Out Investor, such Take-Out Investor’s standards, procedures, and guidelines for underwriting and acquiring Mortgage Loans, which standards, procedures, and guidelines, to the extent that they differ from Agency standards, procedures, and guidelines, shall be provided by Sellers to Administrative Agent and approved by Administrative Agent in writing in its sole discretion as Exhibit G (or an amendment thereto).

 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect on the date hereof in the State of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.

 

“U.S. Tax Compliance Certificate” has the meaning set forth in Section 11(e)(ii)(B) hereof.

 

“VA” means the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.

 

“VA Approved Lender” means a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.

 

“VA Loan” means a Mortgage Loan which is subject of a VA Loan Guaranty Agreement as evidenced by a VA Loan Guaranty Agreement, or a Mortgage Loan which is a vendor loan sold by the VA.

 

“VA Loan Guaranty Agreement” means the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended.

 

“Wet-Ink Delivery Date” has the meaning assigned to such term in the Pricing Side Letter.

 

“Wet-Ink Documents” means, with respect to any Wet-Ink Mortgage Loan, the (a) Transaction Request and (b) the Mortgage Loan Schedule.

 

“Wet-Ink Mortgage Loan” means a Mortgage Loan which a Seller is selling to Administrative Agent for the benefit of a Buyer simultaneously with the origination thereof.

 

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3.                                      Program; Initiation of Transactions

 

a.                                             From time to time, Administrative Agent (for the benefit of Buyers) will facilitate the purchase by Buyers from either Seller certain Mortgage Loans that have been either originated by either Seller or purchased by either Seller from other originators. This Agreement is a commitment by Administrative Agent on behalf of Committed Buyer to enter into Transactions with Sellers for an amount equal to the Maximum Committed Purchase Price on or before the Termination Date. This Agreement is not a commitment by Administrative Agent on behalf of Buyers to enter into Transactions with Sellers for amounts exceeding the Maximum Committed Purchase Price or after the Termination Date but rather sets forth the procedures to be used in connection with periodic requests for Administrative Agent on behalf of Buyers to enter into Transactions with Sellers. Each Seller hereby acknowledges that, beyond the Maximum Committed Purchase Price or after the Termination Date, Administrative Agent on behalf of Buyers is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement. All Purchased Mortgage Loans shall exceed or meet the applicable Underwriting Guidelines, and shall be serviced by Servicer. The aggregate Purchase Price of Purchased Mortgage Loans subject to outstanding Transactions shall not exceed the Maximum Aggregate Purchase Price.

 

b.                                             With respect to each Transaction involving Mortgage Loans which are not Wet-Ink Mortgage Loans, the applicable Seller shall give Administrative Agent and Custodian at least one (1) Business Day’s prior notice of any proposed Purchase Date (the date on which such notice is given, the “Notice Date”); provided, that if a Seller is delivering twenty-five (25) or fewer Mortgage Loans, which are not Wet-Ink Mortgage Loans, on a Purchase Date, the notice shall be delivered on or before 10:30 a.m. (New York City time) on the Purchase Date. With respect to Wet-Ink Mortgage Loans, the applicable Seller shall deliver notice of any proposed purchase on or before 3:00 p.m. (New York City time) on the Purchase Date. On the Notice Date, the applicable Seller shall (i) request that Administrative Agent enter into a Transaction by furnishing to Administrative Agent a Transaction Request, and (ii) deliver to Administrative Agent and Custodian a Mortgage Loan Schedule, in accordance with the Custodial Agreement. Following receipt of such request, Administrative Agent shall enter into such requested Transaction to the extent such Transaction would not exceed the Maximum Committed Purchase Price or such Transaction is after the Termination Date. To the extent such Transaction would exceed the Maximum Committed Purchase Price, Administrative Agent may enter into such Transaction in its sole discretion. In the event the Mortgage Loan Schedule provided by the applicable Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Administrative Agent shall provide written or electronic notice to the applicable Seller describing such error and the applicable Seller shall correct the computer

 

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data, reformat or properly align the computer fields itself and resubmit the Mortgage Loan Schedule as required herein.

 

c.                                              Reserved.

 

d.                                             Reserved.

 

e.                                              Upon the satisfaction of the applicable conditions precedent set forth in Section 10 hereof, all of Sellers’ interest in the Repurchase Assets shall pass to Administrative Agent on behalf of Buyers on the Purchase Date, against the transfer of the Purchase Price to the applicable Seller. Upon transfer of the Mortgage Loans to Administrative Agent on behalf of Buyers as set forth in this Section and until termination of any related Transactions as set forth in Sections 4 or 16 of this Agreement, ownership of each Mortgage Loan, including each document in the related Mortgage File and Records, is vested in the applicable Buyers; provided that, prior to the recordation by the Custodian as provided for in the Custodial Agreement, record title in the name of the applicable Seller to each Mortgage shall be retained by the applicable Seller in trust, for the benefit of Administrative Agent on behalf of Buyers, for the sole purpose of facilitating the servicing and the supervision of the servicing of the Mortgage Loans. For the avoidance of doubt, the parties acknowledge and agree that the rights to the Purchased Mortgage Loans shall be held by the Administrative Agent for the benefit of Buyers.

 

f.                                               With respect to each Wet-Ink Mortgage Loan, by no later than 12:00 noon (New York City time) on the Wet-Ink Delivery Date, the applicable Seller shall cause the related Settlement Agent to deliver to the Custodian the remaining documents in the Mortgage File.

 

4.                                      Repurchase; One Reverse Termination Trigger Event

 

a.                                             The applicable Seller shall repurchase the related Purchased Mortgage Loans from Administrative Agent for the benefit of Buyers, and Administrative Agent on behalf of Buyers shall sell such Purchased Mortgage Loans on each related Repurchase Date. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Mortgage Loan (but liquidation or foreclosure proceeds received by Administrative Agent shall be applied to reduce the Repurchase Price for such Purchased Mortgage Loan on each Price Differential Payment Date except as otherwise provided herein). The applicable Seller is obligated to repurchase and take physical possession of the Purchased Mortgage Loans from Administrative Agent or its designee (including the Custodian) at the applicable Seller’s expense on the related Repurchase Date, and upon receipt of the Repurchase Price therefor, Administrative Agent is obligated to tender (or cause its designee to tender) such physical possession of the Purchased Mortgage Loans to the applicable Seller on the related Repurchase Date. Upon such transfer of the Mortgage Loans back to the applicable Seller as set forth in this Section,

 

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ownership of each Mortgage Loan, including each document in the related Mortgage File and Records, is vested in the applicable Seller. Notwithstanding anything herein to the contrary, Sellers shall have the right, provided that no Event of Default shall have occurred and is continuing, to repurchase any Purchased Mortgage Loan.

 

b.                                             Provided that no Default shall have occurred and is continuing, and Administrative Agent has received the related Repurchase Price (excluding accrued and unpaid Price Differential, which, for the avoidance of doubt, shall be paid on the next succeeding Price Differential Payment Date) upon repurchase of the Purchased Mortgage Loans, Administrative Agent and Buyers will each be deemed to have released their respective interests hereunder in the Purchased Mortgage Loans (including, the Repurchase Assets related thereto) at the request of the applicable Seller. The Purchased Mortgage Loans (including the Repurchase Assets related thereto) shall be delivered to the Sellers free and clear of any lien, encumbrance or claim of Administrative Agent or the Buyers. With respect to payments in full by the related Mortgagor of a Purchased Mortgage Loan, the applicable Seller agrees to (i) provide Administrative Agent with a copy of a report from the related Servicer indicating that such Purchased Mortgage Loan has been paid in full, (ii) remit to Administrative Agent for the benefit of Buyers, within two (2) Business Days after the applicable Seller’s receipt of such payment in full, the Repurchase Price with respect to such Purchased Mortgage Loans and (iii) provide Administrative Agent a notice specifying each Purchased Mortgage Loan that has been prepaid in full. Administrative Agent and Buyers agree to release their respective interests in Purchased Mortgage Loans which have been prepaid in full after receipt of evidence of compliance with clauses (i) through (iii) of the immediately preceding sentence.

 

5.                                      Price Differential

 

a.                                             On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential shall be settled in cash on each related Price Differential Payment Date. Two (2) Business Days prior to the Price Differential Payment Date, Administrative Agent shall give Sellers written or electronic notice of the amount of the Price Differential due on such Price Differential Payment Date. On the Price Differential Payment Date, Sellers shall pay to Administrative Agent the Price Differential for the benefit of Buyers for such Price Differential Payment Date (along with any other amounts to be paid pursuant to Section 7 hereof and Section 3 of the Pricing Side Letter), by wire transfer in immediately available funds.

 

b.                                             If Sellers fail to pay all or part of the Price Differential by 3:00 p.m. (New York City time) on the related Price Differential Payment Date, with respect to any Purchased Mortgage Loan, Sellers shall be obligated to pay to Administrative Agent for the benefit of Buyers (in addition to, and together with,

 

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the amount of such Price Differential) interest on the unpaid Repurchase Price at a rate per annum equal to the Post-Default Rate until the Price Differential is received in full by Administrative Agent for the benefit of Buyers.

 

c.                                              Sellers, or either of them, may remit to Administrative Agent funds up to the then-outstanding Purchase Price, to be applied as of the date such funds are received by Administrative Agent towards the aggregate outstanding Purchase Price of Purchased Mortgage Loans subject to outstanding Transactions on a pro rata basis. The Price Differential shall be applied, and shall accrue on the Purchase Price then outstanding, after such application of such funds as provided in the preceding sentence, subject to Section 6.d.

 

6.                                      Margin Maintenance

 

a.                                             If at any time the outstanding Purchase Price of any Purchased Mortgage Loan subject to a Transaction is greater than the Asset Value of such Purchased Mortgage Loan subject to a Transaction (a “Margin Deficit”), then Administrative Agent may by notice to Sellers require Sellers to transfer to Administrative Agent for the benefit of Buyers cash in an amount at least equal to the Margin Deficit (such requirement, a “Margin Call”), as more fully provided in Section 6(b) immediately below.

 

b.                                             Notice delivered pursuant to Section 6(a) may be given by any written means. Except as provided below, any notice given before 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on such Business Day; notice given after 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on the following Business Day (the foregoing time requirements for satisfaction of a Margin Call are referred to as the “Margin Deadlines”). Notwithstanding the foregoing, in the event that the applicable Margin Deficit is greater than [***] the Margin Deadline set forth above shall apply with respect to [***] and the balance of the Margin Deficit (i.e., the amount thereof in excess of [***]) shall be satisfied by no later than 5:00 pm (New York City time) on the third (3rd) Business Day following the date of the Margin Call; provided that no Event of Default has occurred and is continuing. The failure of Administrative Agent, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Administrative Agent to do so at a later date. Sellers and Administrative Agent each agree that a failure or delay by Administrative Agent to exercise its rights hereunder shall not limit or waive Administrative Agent’s or Buyers’ rights under this Agreement or otherwise existing by law or in any way create additional rights for Sellers.

 

c.                                              In the event that a Margin Deficit exists with respect to any Purchased Mortgage Loan, Administrative Agent may retain any funds received by it to

 

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which the Sellers would otherwise be entitled hereunder, which funds (i) shall be held by Administrative Agent against the related Margin Deficit and (ii) may be applied by Administrative Agent against any Purchased Mortgage Loan for which the related Margin Deficit remains otherwise unsatisfied. Administrative Agent shall give Sellers written notice of any funds so retained and/or applied by Administrative Agent. Notwithstanding the foregoing, the Administrative Agent retains the right, in its sole good faith discretion, to make a Margin Call in accordance with the provisions of this Section 6.

 

d.                                             If at any time the Asset Value of the aggregate of all Purchased Mortgage Loans subject to a Transaction hereunder as of any date of determination is greater than the aggregate Purchase Price of all Purchased Mortgage Loans subject to a Transaction hereunder as of such date (a “Margin Excess”), then Sellers may, by delivery of written notice to Administrative Agent by 10:00 a.m. (New York Time) on any Business Day (an “Excess Margin Notice”), require Administrative Agent either to (i) remit additional Purchase Price in an amount equal to the lesser of (x) such Margin Excess and (y) the amount requested by Sellers or (ii) reallocate the Purchase Price to Purchased Mortgage Loans with Margin Excess in order to release Purchased Mortgage Loans which, following such reallocation, will have a Purchase Price of zero (0). Administrative Agent shall not be obligated to remit Margin Excess or release Purchased Mortgage Loans pursuant to clause (i) or (ii) above to the extent (A) it would cause the outstanding Purchase Price to exceed the Maximum Aggregate Purchase Price or otherwise be inconsistent with the requirements or conditions of this Agreement; (B) a Default has occurred and is continuing or would exist after such action by Administrative Agent or (C) such action would cause a Margin Deficit.

 

7.                                      Income Payments

 

a.                                             If Income is paid in respect of any Purchased Mortgage Loan during the term of a Transaction, such Income shall be the property of Administrative Agent for the benefit of Buyers. Notwithstanding the foregoing, and provided no Event of Default has occurred and is continuing, Administrative Agent on behalf of Buyers agrees that if a third-party Servicer is in place for any Purchased Mortgage Loans, such Servicer shall deposit such Income to the Collection Account. Each Seller shall deposit all Income received in its capacity as Servicer of any Purchased Mortgage Loans to the Collection Account in accordance with Section 12(a)(3) hereof.

 

b.                                             Provided no Event of Default has occurred and is continuing, on each Price Differential Payment Date, each Seller shall remit to Administrative Agent for the benefit of Buyers an amount equal to the Price Differential out of the interest portion of the Income paid in respect to the Purchased Mortgage Loans for the preceding month in accordance with Section 5 of this Agreement. Provided that no Event of Default has occurred and is continuing, upon termination of any Transaction on the Repurchase Date, to the extent that there is any excess Income after repayment of all amounts to be transferred to

 

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Administrative Agent by the applicable Seller, Administrative Agent shall remit such excess to the applicable Seller.

 

c.                                              In the event that an Event of Default has occurred and is continuing, notwithstanding any provision set forth herein, each Seller shall remit to Administrative Agent for the benefit of Buyers all Income received with respect to each Purchased Mortgage Loan on the related Price Differential Payment Date or on such other date or dates as Administrative Agent notifies Sellers in writing.

 

d.                                             Notwithstanding any provision to the contrary in this Section 7, within two (2) Business Days of receipt by either Seller of any prepayment of principal in full, with respect to a Purchased Mortgage Loan, the applicable Seller shall remit such amount to Administrative Agent for the benefit of Buyers and Administrative Agent shall immediately apply any such amount received by Administrative Agent to reduce the amount of the Repurchase Price due upon termination of the related Transaction.

 

e.                                              Notwithstanding anything to the contrary set forth herein, upon notice by Administrative Agent to Sellers, Sellers shall remit to Administrative Agent for the benefit of Buyers all collections received by Servicer or Sellers on the Purchased Mortgage Loans in accordance with Administrative Agent’s directions no later than the day on which aggregate collections of principal and interest (excluding principal prepayments) on the Purchased Mortgaged Loans reaches an amount to be indicated by Administrative Agent (pursuant to prior written notice to Sellers) in Administrative Agent’s sole good faith discretion.

 

8.                                      Security Interest

 

On each Purchase Date, the applicable Seller hereby sells, assigns and conveys all rights and interests in the Purchased Mortgage Loans identified on the related Mortgage Loan Schedule and the related Repurchase Assets to Administrative Agent for the benefit of Buyers. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and in any event, each Seller hereby pledges to Administrative Agent as security for the performance of Sellers’ Obligations and hereby grants, assigns and pledges to Administrative Agent a fully perfected first priority security interest in Sellers’ right, title and interest in and to the Purchased Mortgage Loans, any Agency Security or right to receive such Agency Security when issued, in each case, only to the extent specifically backed by Purchased Mortgage Loans, the Records, and all related Servicing Rights, the Program Agreements (to the extent such Program Agreements and each Seller’s right thereunder relate to the Purchased Mortgage Loans), any related Take-Out Commitments, any Property of any Seller (to the extent such Property relates to the Purchased Mortgage Loans), all insurance policies and insurance proceeds relating to any Purchased Mortgage Loan or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts, VA Loan Guaranty Agreements and Rural Housing Service Guaranty agreements (if any), Income, the Collection Account, Interest Rate Protection Agreements, accounts (including any interest of any Seller in escrow accounts) and any other contract rights, instruments, accounts, payments, rights

 

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to payment (including payments of interest or finance charges), general intangibles and other assets of any Seller, to the extent that the same relates to the Purchased Mortgage Loans (including, without limitation, any other accounts) or any interest in the Purchased Mortgage Loans, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Transaction Request and/or Trust Receipt and Certification, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Repurchase Assets”). Each Seller agrees to execute, deliver and/or file such documents and perform such acts as may be reasonably necessary to fully perfect Administrative Agent’s security interest created hereby. Furthermore, each Seller hereby authorizes the Administrative Agent to file financing statements relating to the Repurchase Assets, as the Administrative Agent, at its option, may deem appropriate. The Sellers shall pay the filing costs for any financing statement or statements prepared pursuant to this Section. Notwithstanding anything herein to the contrary, unless an Event of Default shall have occurred and be continuing, upon a Seller’s payment of the Repurchase Price to Administrative Agent, any security interest of Administrative Agent in the related Mortgage Loan and in any proceeds thereof shall be released by Administrative Agent on behalf of Buyers. Upon a Seller’s written request, Administrative Agent shall take such actions as may be reasonably necessary to evidence any such termination of a security interest in the related Mortgage Loan.

 

Each Seller acknowledges that it has no rights to service the Purchased Mortgage Loans. Without limiting the generality of the foregoing and in the event that each Seller is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, each Seller grants, assigns and pledges to Administrative Agent a security interest in the Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.

 

Administrative Agent and Quicken Loans hereby agree that in order to further secure Quicken Loans’ Obligations hereunder, Quicken Loans hereby grants to Administrative Agent, for the benefit of each applicable Buyer, a security interest in Quicken Loans’ rights (but not its obligations) under the Servicing Facility Documents, including without limitation any rights to assets and rights to receive payments thereunder, but not including rights (including rights to receive payments) in and under the collateral thereunder, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Servicing Facility Rights”). Quicken Loans shall deliver an irrevocable instruction to the buyers or administrative agent under the Servicing Facility Documents that upon receipt of notice of an Event of Default under this Agreement, the buyers or administrative agent thereunder is authorized and instructed to remit to Administrative Agent hereunder directly any amounts otherwise payable to Quicken Loans under the Servicing Facility Documents. In furtherance of the foregoing, such notice shall also require, upon repayment of the entire Obligations (as defined in the Servicing Facility Documents) under the Servicing Facility Agreement and the termination of all obligations of the buyers thereunder or other termination of the Servicing Facility Documents following repayment of all obligations thereunder, that, if an Event of Default shall then exist under this Agreement, or the Servicing Facility Documents, the buyers or administrative agent thereunder shall deliver

 

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to Administrative Agent hereunder any amounts otherwise payable to Quicken Loans under the Servicing Facility Documents. Notwithstanding any of the foregoing to the contrary, such grant of a security interest in Servicing Facility Rights shall terminate (i) when CSFBMC or its Affiliates do not constitute all of the “Buyers” (as defined in the Servicing Facility Agreement) or all of the Buyers under this Agreement, or (ii) when the outstanding aggregate “Repurchase Price” under such Servicing Facility Agreement has been paid in full and the Servicing Facility Agreement has been terminated.

 

With respect to the Servicing Facility Rights, Section 4.05 of the Servicing Facility Agreement is deemed to apply and is incorporated by reference herein.

 

9.                                     Payment and Transfer

 

Unless otherwise mutually agreed in writing, all transfers of funds to be made by Sellers hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent at the following account maintained by Administrative Agent: Account No. [***] for the account of CSFB Administrative Agent /Quicken Loans Inc. Seller-Inbound Account, Citibank, ABA No. [***] or such other account as Administrative Agent shall specify to Sellers in writing. Each Seller acknowledges that it has no rights of withdrawal from the foregoing account. All Purchased Mortgage Loans transferred by one party hereto to the other party shall be in the case of a purchase by a Buyer in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as Administrative Agent may reasonably request. All Purchased Mortgage Loans shall be evidenced by a Trust Receipt and Certification. Any Repurchase Price received by Administrative Agent after 2:00 p.m. (New York City time) shall be deemed received on the next succeeding Business Day.

 

10.                               Conditions Precedent

 

a. Continuing Transactions. As conditions precedent to continuing the Transactions outstanding on the date of this Agreement, Administrative Agent shall have received on or before the date hereof the following, in form and substance satisfactory to Administrative Agent and duly executed by each applicable Seller and each other party thereto:

 

(1)                                 Program Agreements. The Program Agreements (including without limitation, a Custodial Agreement in a form acceptable to Administrative Agent) duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.

 

(2)                                 Security Interest. Evidence that all other actions necessary or, in the opinion of Administrative Agent, desirable to perfect and protect Administrative Agent’s and Buyers’ interest in the Purchased Mortgage Loans and other Repurchase Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1 and Form UCC-3, as applicable.

 

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(3)                                 Underwriting Guidelines. To the extent they are required to be set forth in Exhibit G hereto, a true and correct copy of the Underwriting Guidelines certified by an officer of each Seller.

 

(4)                                 Fees. Payment of any applicable fees due and owing (as of the date of this Agreement) to Administrative Agent and Buyers hereunder including, without limitation, the Commitment Fee as set forth in the Pricing Side Letter.

 

(5)                                 Insurance. Evidence Administrative Agent has been added as a loss payee under the E&O Insurance covering each Seller.

 

(6)                                 Opinion of Counsel. An opinion of Sellers’ counsel, in form and substance reasonably acceptable to Administrative Agent in its sole good faith discretion, subject, however, to caveats, assumptions, and limitations to which similar opinions are typically subject.

 

b.                               All Transactions. The obligation of Administrative Agent for the benefit of Buyers to enter into each Transaction pursuant to this Agreement is subject to the following conditions precedent:

 

(1)                                 Organizational Documents/Opinions. Each Seller shall have provided to Administrative Agent a certificate of the corporate secretary of such Seller substantially in form and substance acceptable to Administrative Agent in its sole good faith discretion, attaching certified copies of such Seller’s applicable charter, bylaws, limited liability company agreement and resolutions approving the Program Agreements.

 

(2)                                 Good Standing Certificate. Each Seller shall have provided to Administrative Agent (i) a good standing certificate from the jurisdiction of organization of such Seller, dated as of no earlier than the date ten (10) Business Days prior to the date of delivery hereunder, and (ii) an incumbency certificate of the corporate secretary of such Seller, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.

 

(3)                                 Due Diligence Review. Without limiting the generality of Section 35 hereof, Administrative Agent and its designated agent shall have completed, to its satisfaction, its due diligence review of the related Mortgage Loans and each Seller; provided, however, with respect to any particular Transaction, if Administrative Agent has not given written notice to Sellers of the satisfactory completion of Administrative Agent’s and its designated agent’s due diligence relating to such Transaction by no later than twenty-four (24) hours prior to the time that such Seller would otherwise be obligated hereunder to effect such Transaction, such Seller shall have an additional Business Day in which to effect such Transaction.

 

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(4)                                Required Documents.

 

(a)                                 With respect to each Purchased Mortgage Loan which is not a Wet-Ink Mortgage Loan, the Mortgage File has been delivered to the Custodian in accordance with the Custodial Agreement; and

 

(b)                                 With respect to each Wet-Ink Mortgage Loan, the Wet-Ink Documents have been delivered to Administrative Agent or Custodian, as the case may be, in accordance with the Custodial Agreement.

 

(5)                                 Transaction Documents. Administrative Agent or its designee shall have received on or before the day of such Transaction (unless otherwise specified in this Agreement) the following, in form and substance satisfactory to Administrative Agent and (if applicable) duly executed:

 

(a)                                 A Transaction Request and Mortgage Loan Schedule delivered by the applicable Seller pursuant to Section 3(b) hereof.

 

(b)                                 The Request for Certification and the related Mortgage Loan Schedule delivered by the applicable Seller, and the Trust Receipt and Certification and Custodial Mortgage Loan Schedule delivered by Custodian.

 

(c)                                  Such certificates or other documents as Administrative Agent may reasonably request.

 

(d)                                 Solely with respect to any Transaction involving one or more Second Lien Mortgage Loans that are Purchased Mortgage Loans subject to the Schwab Purchase Agreement, the Takeout Commitment Letter Agreement has been executed by all applicable parties and such agreement remains in full force and effect.

 

(6)                                 No Default. No Default or Event of Default shall have occurred and be continuing.

 

(7)                                 Requirements of Law. Neither Administrative Agent nor Buyers shall have determined that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Administrative Agent or any Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Administrative Agent or any Buyer to enter into Transactions with a Pricing Rate based on LIBOR.

 

(8)                                 Representations and Warranties. Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by each Seller in each Program Agreement shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

 

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(9)                                 Electronic Tracking Agreement. To the extent any Seller is selling Mortgage Loans which are registered on the MERS® System, an Electronic Tracking Agreement entered into, duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.

 

(10)                          Maximum Aggregate Purchase Price. After giving effect to the requested Transaction, the aggregate outstanding Purchase Price for all Purchased Mortgage Loans subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Aggregate Purchase Price. Notwithstanding the preceding sentence, Administrative Agent shall have no obligation to enter into any Transaction, if, (a) as a result of such Transaction the aggregate Purchase Price for all Purchased Mortgage Loans subject to then outstanding Transactions under this Agreement exceed the Maximum Committed Purchase Price or (b) the Purchase Date is after the Termination Date.

 

(11)                          Material Adverse Change. None of the following shall have occurred and/or be continuing:

 

(a)                                 Credit Suisse AG, New York Branch’s corporate bond rating as calculated by S&P or Moody’s has been lowered or downgraded to a rating below investment grade by S&P or Moody’s;

 

(b)                                 an event or events shall have occurred resulting in the effective absence of a market for financing debt obligations secured by mortgage loans similar to Purchased Mortgage Loans or securities backed by such Mortgage Loans or an event or events shall have occurred resulting in Committed Buyer not being able to finance Purchased Mortgage Loans with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or

 

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

 

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

 

provided, that, (x) the Administrative Agent and Committed Buyer shall not invoke subclause (a), (b), (c) or (d) with respect to either of the Sellers unless the Administrative Agent or the Committed Buyer shall invoke any similar clause contained in other similar agreements with similar terms to this Agreement

 

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between Administrative Agent or the Committed Buyer and other Persons that are substantially similar to the Sellers (including without limitation terms providing funding by the Administrative Agent or the Committed Buyer to such person or persons on a committed basis) and with respect to substantially the same types of assets as the Mortgage Loans that would be the subject of Transactions hereunder, and (y) the Administrative Agent or the Committed Buyer will give Seller notice in form and substance deemed appropriate by Administrative Agent or the Committed Buyer, upon request, of the reasons (which may not be exhaustive) for Administrative Agent’s or the Committed Buyer’s good faith belief that any of subclause (a), (b), (c) or (d) has occurred; provided, that such notice shall not in any way reduce or limit or condition the rights and remedies of Administrative Agent or the Committed Buyer hereunder or under any other provision of this Agreement or the Program Agreements.

 

(12)                          Underwriting Guidelines. Neither Seller shall have amended or otherwise modified the Underwriting Guidelines (to the extent that such Underwriting Guidelines are under such Seller’s control) without the prior written consent of Administrative Agent (which consent shall be deemed to have been given unless Administrative Agent notifies such Seller of Administrative Agent’s objection to such amendment or modification within thirty (30) days of such Seller’s written request to Administrative Agent for Administrative Agent’s consent). Without limiting the foregoing, in the event that any Seller makes any amendment or modification to the Underwriting Guidelines, such Seller shall promptly deliver to Administrative Agent a complete copy of the amended or modified Underwriting Guidelines.

 

11.                               Program; Costs

 

a.                                                  Subject to Section 35, Sellers shall reimburse Administrative Agent for any of Administrative Agent’s reasonable (and documented) out-of-pocket costs, including due diligence review costs and reasonable attorney’s fees, incurred by Administrative Agent in determining the acceptability to Administrative Agent and Buyers of any Mortgage Loans. Sellers shall also pay, or reimburse Administrative Agent and Buyers if Administrative Agent or Buyers shall pay, any termination fee, which may be due any servicer in connection with the termination of the servicing of a Mortgage Loan if such termination is required pursuant to the terms of this Agreement; provided, however, that Sellers shall be entitled to written evidence of such termination fee. Legal fees for any subsequent amendments to this Agreement or related documents shall be borne by Sellers. Sellers shall pay ongoing custodial and bank fees and expenses and any other ongoing fees and expenses under any other Program Agreement. Without limiting the foregoing, Sellers shall pay all fees as and when required under the Pricing Side Letter.

 

b.                                             If any Buyer determines that, due to the introduction of, any change in, or the compliance by such Buyer with (i) any eurocurrency reserve requirement or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be an

 

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increase in the cost to such Buyer in engaging in the present or any future Transactions, then Sellers agree to pay to such Buyer, from time to time, upon demand by such Buyer (with a copy to Custodian) the actual cost of additional amounts as specified by such Buyer to compensate such Buyer for such increased costs.

 

c.                                              With respect to any Transaction, Administrative Agent and Buyers may conclusively rely upon, and shall incur no liability to Sellers in acting upon, any request or other communication that Administrative Agent and Buyers reasonably believe to have been given or made by a person authorized to enter into a Transaction on Sellers’ behalf, whether or not such person is listed on the certificate delivered pursuant to Section 10.b(2) hereof.

 

d.                                             Notwithstanding the assignment of the Program Agreements with respect to each Purchased Mortgage Loan to Administrative Agent for the benefit of Buyers, each Seller agrees and covenants with Administrative Agent and Buyers to use commercially reasonable efforts to enforce such Seller’s rights and remedies set forth in the Program Agreements.

 

e.                                              (i) Any payments made by Sellers to Administrative Agent or a Buyer or permitted Buyer assignee hereunder or any Program Agreement shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable law. If any Seller shall be required by applicable law (as determined in the good faith discretion of the applicable withholding agent) to deduct or withhold any Tax from any sums payable to Administrative Agent or a Buyer or permitted Buyer assignee, then (i) such Seller shall make such deductions or withholdings and pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law; (ii) to the extent the withheld or deducted Tax is an Indemnified Tax, the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 11(e)) Administrative Agent or the applicable Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made; and (iii) such Seller shall notify the Administrative Agent of the amount paid and shall provide the original or a certified copy of a receipt issued by the relevant Governmental Authority evidencing such payment as soon as practicable but no later than thirty (30) days thereafter. Sellers shall otherwise indemnify Administrative Agent and such Buyer, within ten (10) Business Days after demand therefor, for any Indemnified Taxes imposed on Administrative Agent or such Buyer (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 11(e)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Sellers by a Buyer or Administrative Agent shall be conclusive absent manifest error. Administrative Agent or the applicable Buyer shall promptly repay to Sellers any refund of any amounts received by any of them that can be directly attributable to the Program Documents, as determined by Administrative Agent in its sole good faith discretion, and amounts paid pursuant to this Section 11.

 

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(ii) Administrative Agent shall cause each Buyer and permitted Buyer assignee to deliver to the Sellers, at the time or times reasonably requested by the Sellers, such properly completed and executed documentation reasonably requested by the Sellers as will permit payments made hereunder to be made without withholding or at a reduced rate of withholding. In addition, Administrative Agent shall cause each Buyer and permitted Buyer assignee, if reasonably requested by Sellers, to deliver such other documentation prescribed by applicable law or reasonably requested by the Sellers as will enable the Sellers to determine whether or not such Buyer or permitted Buyer assignee is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in this Section 11, the completion, execution and submission of such documentation (other than such documentation in Section 11(e)(ii)(A), (B) and (C) below) shall not be required if in such Buyer’s or any permitted Buyer’s assignee’s judgment such completion, execution or submission would subject such Buyer or permitted Buyer assignee to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Buyer or permitted Buyer assignee. Without limiting the generality of the foregoing, Administrative Agent shall cause a Buyer or permitted Buyer assignee to deliver to the Sellers the following properly completed and duly executed documents, to the extent legally entitled to do so:

 

(A)          in the case of a Buyer or permitted Buyer assignee which is a “U.S. Person” as defined in section 7701(a)(30) of the Code, a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 (or any successor form thereto) certifying that it is not subject to U.S. federal backup withholding tax;

 

(B)           in the case of a Buyer or permitted Buyer assignee which is not a “U.S. Person” as defined in Code section 7701(a)(30): (I) a properly completed and executed IRS Form W-8BEN, W-8BEN-E or W-8ECI, as appropriate, evidencing entitlement to a zero percent (0%) or reduced rate of U.S. federal income tax withholding on any payments made hereunder, (II) in the case of such non-U.S. Person claiming exemption from the withholding of U.S. federal income tax under Code sections 871(h) or 881(c) with respect to payments of “portfolio interest,” a duly executed certificate (a “U.S. Tax Compliance Certificate”) to the effect that such non-U.S. Person is not (x) a “bank” within the meaning of Code section 881(c)(3)(A), (y) a “10 percent shareholder” of any Seller or affiliate thereof, within the meaning of Code section 881(c)(3)(B), or (z) a “controlled foreign corporation” described in Code section 881(c)(3)(C), (III) to the extent such non-U.S. person is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if such non-U.S. person is a partnership and one or more direct or indirect partners of such non-U.S. person are claiming the portfolio interest exemption, such non-U.S. person may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner, and (IV) executed originals of any other form or supplementary documentation prescribed by law as a basis for claiming exemption from or a reduction in United States federal withholding tax together

 

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with such supplementary documentation as may be prescribed by law to permit a Seller to determine the withholding or deduction required to be made.

 

(C)           if a payment made to a Buyer or permitted Buyer assignee under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Buyer or permitted assignee were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Administrative Agent on behalf of such Buyer or permitted assignee shall deliver to the Sellers at the time or times prescribed by law and at such time or times reasonably requested by the Sellers such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Sellers as may be necessary for the Sellers to comply with their obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 11(e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

The applicable IRS forms referred to above shall be delivered by Administrative Agent on behalf of each applicable Buyer or permitted Buyer assignee on or prior to the date on which such person becomes a Buyer or permitted Buyer assignee under this Agreement, as the case may be, and upon the obsolescence or invalidity of any IRS form previously delivered by it hereunder.

 

f.                                        Any indemnification payable by Sellers to Administrative Agent or a Buyer or permitted Buyer assignee for Indemnified Taxes that are imposed on such Buyer or permitted Buyer assignee, as described in Section 11(e)(i) hereof, shall be paid by Sellers within ten (10) Business Days after demand therefor from Administrative Agent. A certificate as to the amount of such payment or liability delivered to the Sellers by the Administrative Agent on behalf of a Buyer or permitted Buyer assignee shall be conclusive absent manifest error.

 

g.                                       If Administrative Agent determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 11(e) (including by the payment of additional amounts pursuant to this Section 11(g)), it shall pay to the Sellers an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of Administrative Agent and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Sellers, upon the request of Administrative Agent, shall repay to Administrative Agent the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that Administrative Agent is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will Administrative Agent be required to pay any amount to Sellers pursuant to this paragraph (g) the payment of which would place Administrative Agent in a less favorable net after-Tax position than Administrative Agent would have been in if the Tax subject to indemnification and giving rise to such refund had not been

 

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deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require Administrative Agent to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to Sellers or any other Person.

 

h.                                      Each party’s obligations under this Section 11 shall survive any assignment of rights by, or the replacement of, a Buyer or a permitted Buyer assignee, and the repayment, satisfaction or discharge of all obligations under any Program Agreement.

 

i.                                          Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes to treat each Transaction as indebtedness of Sellers that is secured by the Purchased Mortgage Loans, and the Purchased Mortgage Loans as owned by Sellers in the absence of an Event of Default by Seller. Administrative Agent on behalf of Buyers and Sellers agree that they will treat and report for all tax purposes the Transactions entered into hereunder as one or more loans from a Buyer to Sellers secured by the Purchased Mortgage Loans, unless otherwise prohibited by law or upon a final determination by any taxing authority that the Transactions are not loans for tax purposes.

 

12.                               Servicing

 

a.                               Servicing with Respect to Quicken Loans

 

(1)                                 Quicken Loans, on Administrative Agent’s and Buyers’ behalf, shall contract with Servicer to, or if Quicken Loans is the Servicer, Quicken Loans shall, service the Mortgage Loans consistent with the degree of skill and care that Quicken Loans customarily requires with respect to similar Mortgage Loans owned or managed by it and in accordance with Accepted Servicing Practices. To the extent that Quicken Loans is the Servicer, Quicken Loans shall (i) comply in all material respects with all applicable federal, State and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and (iii) not impair in any material respect the rights of Administrative Agent or Buyers in any Mortgage Loans or any payment thereunder. Administrative Agent may terminate the servicing of any Mortgage Loan with the then-existing Servicer in accordance with Section 12(a)(5) hereof.

 

(2)                                 Quicken Loans shall cause the Servicer to hold or cause to be held all escrow funds collected by Quicken Loans and Servicer with respect to any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected.

 

(3)                                 Quicken Loans shall cause the Servicer to deposit all collections other than escrow funds received by Servicer on the Purchased Mortgage Loans in the Collection Account no later than the fifth (5th) Business Day following receipt; provided, however, that any amounts required to be

 

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remitted to Administrative Agent shall be deposited in the Collection Account on or prior to the day on which such remittance is to occur.

 

(4)                                 Upon Administrative Agent’s request, Quicken Loans shall provide promptly to Administrative Agent (i) a Servicer Notice addressed to and agreed to by the Servicer of the related Purchased Mortgage Loans, advising such Servicer of such matters as Administrative Agent may reasonably request, including, without limitation, recognition by the Servicer of Administrative Agent’s and Buyers’ interest in such Purchased Mortgage Loans and the Servicer’s agreement that upon receipt of notice of an Event of Default from Administrative Agent, it will follow the instructions of Administrative Agent with respect to the Purchased Mortgage Loans and any related Income with respect thereto.

 

(5)                                 Upon written notice, Administrative Agent shall have the right to immediately terminate the Servicer’s right to service the Purchased Mortgage Loans without payment of any penalty or termination fee. Quicken Loans and the Servicer shall cooperate in transferring the servicing of the Purchased Mortgage Loans to a successor servicer appointed by Administrative Agent in its sole discretion.

 

(6)                                 If Quicken Loans should discover that, for any reason whatsoever, Quicken Loans or any entity responsible to Quicken Loans for managing or servicing any such Purchased Mortgage Loan has failed to perform fully Quicken Loans’ obligations under the Program Agreements or any of the obligations of such entities with respect to the Purchased Mortgage Loans, Quicken Loans shall promptly notify Administrative Agent.

 

(7)                                 For the avoidance of doubt, Quicken Loans retains no economic rights to the servicing of the Purchased Mortgage Loans; provided that Quicken Loans shall continue to service the Purchased Mortgage Loans hereunder as part of its Obligations hereunder. As such, Quicken Loans expressly acknowledges that the Purchased Mortgage Loan are sold to Administrative Agent for the benefit of Buyers on a “servicing released” basis.

 

b.                                    Servicing with Respect to One Reverse

 

(1)                                 One Reverse, on Administrative Agent’s and Buyers’ behalf, shall contract with Servicer to, or if One Reverse is the Servicer, shall, service the Mortgage Loans consistent with the degree of skill and care that One Reverse customarily requires with respect to similar Mortgage Loans owned or managed by it and in accordance with Accepted Servicing Practices. One Reverse and Servicer shall (i) comply with all applicable federal, state and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and (iii) not impair the rights of Administrative Agent or Buyers in any Mortgage Loans or any payment

 

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thereunder. Administrative Agent may terminate the servicing of any Mortgage Loan with the Servicer in accordance with Section 12(b)(5) hereof.

 

(2)                                 One Reverse shall and shall cause the Servicer to hold or cause to be held all escrow funds collected by One Reverse and Servicer with respect to any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected.

 

(3)                                 One Reverse shall and shall cause the Servicer to deposit all collections other than escrow funds received by Servicer on the Purchased Mortgage Loans in the account set forth in Section 9 upon an Event of Default.

 

(4)                                 One Reverse shall provide to Administrative Agent a Servicer Notice addressed to and agreed to by the Servicer of the related Purchased Mortgage Loans, advising such Servicer of such matters as Administrative Agent may reasonably request, including, without limitation, recognition by the Servicer of Administrative Agent’s and Buyers’ interest in such Purchased Mortgage Loans and the Servicer’s agreement that upon receipt of notice of an Event of Default from Administrative Agent, it will follow the instructions of Administrative Agent with respect to the Purchased Mortgage Loans and any related Income with respect thereto.

 

(5)                                 Upon written notice, Administrative Agent shall have the right to immediately terminate the Servicer’s right to service the Purchased Mortgage Loans under the Servicing Agreement without payment of any penalty or termination fee. One Reverse and the Servicer shall cooperate in transferring the servicing of the Purchased Mortgage Loans to a successor servicer appointed by Administrative Agent on behalf of Buyers in its sole discretion.

 

(6)                                 If One Reverse should discover that, for any reason whatsoever, One Reverse or any entity responsible to One Reverse for managing or servicing any such Purchased Mortgage Loan has failed to perform fully One Reverse’s obligations under the Program Agreements or any of the obligations of such entities with respect to the Purchased Mortgage Loans, One Reverse shall promptly notify Administrative Agent.

 

(7)                                 For the avoidance of doubt, One Reverse retains no economic rights to the servicing of the Purchased Mortgage Loans other than One Reverse’s rights under the Servicing Agreement. As such, One Reverse expressly acknowledges that the Purchased Mortgage Loans are sold to Administrative Agent for the benefit of Buyers on a “servicing released” basis with such servicing retained by the Servicer.

 

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13.                               Representations and Warranties

 

a.                               Each Seller represents and warrants to Administrative Agent and Buyers as of the date hereof and as of each Purchase Date for any Transaction that:

 

(1)                                 Seller Existence. Quicken Loans has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Michigan. One Reverse has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware.

 

(2)                                 Licenses. Each Seller is duly licensed or is otherwise qualified in each jurisdiction in which it transacts business for the business which it conducts and is not in default of any applicable federal, state or local laws, rules and regulations unless, in either instance, the failure to take such action is not reasonably likely (either individually or in the aggregate) to cause a Material Adverse Effect and is not in default of such state’s applicable laws, rules and regulations. Each Seller has the requisite power and authority and legal right to originate and purchase Mortgage Loans (as applicable) and to own, sell and grant a lien on all of its right, title and interest in and to the Mortgage Loans, and to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions of, this Agreement, each Program Agreement and any Transaction Request. Each Seller is a HUD approved mortgagee and, to the extent a Seller is originating VA Loans, a VA Approved Lender and, to the extent a Seller is originating RHS Loans, a Rural Housing Service Approved Lender.

 

(3)                                 Power. Each Seller has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect.

 

(4)                                 Due Authorization. Each Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Program Agreements, as applicable. This Agreement, any Transaction Request and the Program Agreements have been (or, in the case of Program Agreements and any Transaction Request not yet executed, will be) duly authorized, executed and delivered by each applicable Seller, all requisite or other corporate action having been taken, and each is valid, binding and enforceable against each applicable Seller in accordance with its terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or by general principles of equity.

 

(5)                                 Financial Statements. Quicken Loans has heretofore furnished to Administrative Agent a copy of its consolidated balance sheet of Quicken Loans as of December 31, 2016 and the related consolidated statements of income and retained earnings and of cash flows for Quicken Loans for the year then ended, setting forth in each case in comparative form the figures for the previous year ended December 31, 2015, with the opinion thereon of Ernst & Young. All such financial statements are complete and correct in all material respects and fairly present, in all material respects, the consolidated financial

 

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condition of Quicken Loans and the consolidated results of its operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. As of the date of this Agreement, since December 31, 2016, there has been no material adverse change in the consolidated business, operations or financial condition of Quicken Loans from that set forth in said financial statements nor is Quicken Loans aware of any state of facts which (with notice or the lapse of time) would or would be reasonably likely to result in any such material adverse change. Quicken Loans has, on the date of the statements delivered pursuant to this Section (the “Statement Date”) no liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of Quicken Loans except as heretofore disclosed to Administrative Agent in writing.

 

(6)                                 Event of Default. There exists no Event of Default under Section 15(b) hereof, which default gives rise to a right to accelerate Indebtedness as referenced in Section 15(b) hereof, under any mortgage, borrowing agreement or other instrument or agreement pertaining to indebtedness for borrowed money or to the repurchase of mortgage loans or securities.

 

(7)                                 Solvency. Quicken Loans, on a consolidated basis, is solvent and will not be rendered insolvent by any Transaction and, after giving effect to such Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business. Quicken Loans, on a consolidated basis, does not intend to incur, nor does it believe that it has incurred, debts beyond its ability to pay such debts as they mature and is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. The amount of consideration being received by Sellers upon the sale of the Purchased Mortgage Loans to Administrative Agent for the benefit of Buyers constitutes reasonably equivalent value and fair consideration for such Purchased Mortgage Loans. Neither Seller is transferring any Purchased Mortgage Loans with any intent to hinder, delay or defraud any of its creditors.

 

(8)                                 No Conflicts. The execution, delivery and performance by each applicable Seller of this Agreement, any Transaction Request hereunder and the Program Agreements do not conflict with any term or provision of the applicable certificate of incorporation, certificate of formation, limited liability company agreement or by-laws of such Seller or any law, rule, regulation, order, judgment, writ, injunction or decree applicable to such Seller of any court, regulatory body, administrative agency or governmental body having jurisdiction over such Seller, which conflict would have a Material Adverse Effect and will not result in any violation of any such mortgage, instrument, agreement or obligation to which such Seller is a party.

 

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(9)                                 True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of each Seller or any Affiliate thereof or any of their officers furnished or to be furnished to Administrative Agent or Buyers in connection with the initial or any ongoing due diligence of each Seller, or any Affiliate or officer thereof, and the negotiation, preparation, or delivery of the Program Agreements are true and complete in all material respects and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All financial statements have been prepared in accordance with GAAP.

 

(10)                          Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to any governmental authority or court is required under applicable law in connection with the execution, delivery and performance by each applicable Seller of this Agreement, any Transaction Request and the Program Agreements.

 

(11)                          Litigation. Except as set forth in Schedule 3 attached hereto, there is no action, proceeding or investigation pending with respect to which either of the Sellers has received service of process or, to the best of each Seller’s knowledge threatened against it before any court, administrative agency or other tribunal (A) asserting the invalidity of this Agreement, any Transaction, Transaction Request or any Program Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, any Transaction Request or any Program Agreement, (C) making a claim individually or in an aggregate amount greater than [***] (D) which requires filing with the SEC in accordance with the 1934 Act or any rules thereunder or (E) which might materially and adversely affect the validity of the Mortgage Loans or the performance by it of its obligations under, or the validity or enforceability of, this Agreement, any Transaction Request or any Program Agreement.

 

(12)                          Material Adverse Change. There has been no material adverse change in the business, operations, financial condition or properties of the Sellers, taken as a whole, since the date set forth in the most recent financial statements supplied to Administrative Agent.

 

(13)                          Ownership. Upon payment of the Purchase Price and the filing of the financing statement and delivery of the Mortgage Files to the Custodian and the Custodian’s receipt of the related Request for Certification, the Administrative Agent shall become the sole owner of the Purchased Mortgage Loans and related Repurchase Assets for the benefit of the Buyers, free and clear of all liens and encumbrances.

 

(14)                          Underwriting Guidelines. The Underwriting Guidelines provided to Administrative Agent are the true and correct Underwriting Guidelines of each Seller.

 

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(15)                          Taxes. Each Seller has filed all federal income tax returns and all other material tax returns that are required to be filed by it and have paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except for any such taxes as are subject to a Good Faith Dispute. The charges, accruals and reserves on the books of each Seller in respect of taxes and other governmental charges are, in the opinion of such Seller, adequate.

 

(16)                          Investment Company. No Seller nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

(17)                          Chief Executive Office; Jurisdiction of Organization. On the date of this Agreement, Quicken Loans’ chief executive office is located at 1050 Woodward Avenue, Detroit, Michigan 48226-1906. On the date of this Agreement, Quicken Loans’ jurisdiction of organization is the state of Michigan. Quicken Loans shall provide Administrative Agent with thirty (30) days’ advance notice of any change in Quicken Loans’ principal office or place of business or jurisdiction. Quicken Loans has the trade names set forth on the attached Schedule 5. During the preceding five (5) years, Quicken Loans has not been known by or done business under any other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy receivership or similar petitions nor has it made any assignments for the benefit of creditors, except that it has (or had, within such period) the dbas as set forth on the attached Schedule 5. On the date of this Agreement, One Reverse Mortgage’s chief executive office is located at 644 Woodward Avenue, Detroit, Michigan 48226. Seller’s jurisdiction of organization is the State of Delaware. One Reverse shall provide Administrative Agent with thirty (30) days’ advance notice of any change in One Reverse’s jurisdiction of organization. One Reverse has no other trade names.

 

(18)                          Location of Books and Records. The location where each Seller keeps its books and records, including all computer tapes and records relating to the Purchased Mortgage Loans and the related Repurchase Assets is its chief executive office.

 

(19)                          Adjusted Tangible Net Worth. On the date of this Agreement, Quicken Loans’ Adjusted Tangible Net Worth is not less than the threshold set forth in Section 2.1 of the Pricing Side Letter.

 

(20)                          ERISA. Each Plan to which each of the Sellers or its Subsidiaries make direct contributions, and, to the knowledge of Sellers, each other Plan and each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other federal or state law.

 

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(21)                          Adverse Selection. Neither Seller has selected the Purchased Mortgage Loans in a manner so as to adversely affect Buyers’ interests.

 

(22)                          Agreements. No Seller nor any Subsidiary of any Seller is a party to any agreement, instrument, or indenture or subject to any restriction materially and adversely affecting its business, operations, assets or financial condition, except as disclosed in the financial statements described in Section 13(a)(5) hereof. No Seller nor any Subsidiary of any Seller is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement, instrument, or indenture which default could have a material adverse effect on the business, operations, properties, or financial condition of Sellers as a whole. No holder of any Indebtedness of any Seller or of any of its Subsidiaries has given notice of any asserted material default thereunder.

 

(23)                          Other Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Sellers existing on the date hereof is listed on Exhibit J hereto (the “Existing Indebtedness”).

 

(24)                          Agency Approvals. With respect to each Agency Security and to the extent necessary, Quicken Loans is an FHA Approved Mortgagee and a VA Approved Lender and One Reverse is an FHA Approved Mortgagee. Quicken Loans is also approved by Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, and, to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. In each such case, each Seller is in good standing, with no event having occurred or such Seller having any reason whatsoever to believe or suspect will occur prior to the issuance of the Agency Security or the consummation of the Take-Out Commitment, as the case may be, including, without limitation, a change in insurance coverage which would either make a Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency or to HUD, FHA or VA. Should a Seller for any reason cease to possess all such applicable approvals, or should notification to the relevant Agency or to HUD, FHA or VA be required, Sellers shall so notify Administrative Agent immediately in writing. Each Seller has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans sold by it to Administrative Agent hereunder and in accordance with Accepted Servicing Practices.

 

(25)                          No Reliance. Each Seller has made its own independent decisions to enter into the Program Agreements and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Neither Seller is relying

 

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upon any advice from Administrative Agent or Buyers as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

 

(26)                          Plan Assets. No Seller is an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased Mortgage Loans are not “plan assets” within the meaning of 29 CFR §2510.3 101 as amended by Section 3(42) of ERISA, in a Seller’s hands, and transactions by or with a Seller are not subject to any foreign, state or local statute regulating investments or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.

 

(27)                          No Prohibited Persons. No Seller nor any of its Affiliates, officers, directors, partners or members, is an entity or person: (i) that is listed in the annex to, or is otherwise subject to the provisions of Executive Order 13224 issued on September 24, 2001 (“EO13224”); (ii) whose name appears on the most current “List of Specially Designated National and Blocked Persons” (https://sanctionssearch.ofac.treas.gov/) maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) (or to any Seller’s knowledge, 50 percent or greater owned or controlled by such entities or persons); (iii) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO13224; or (iv) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in clauses (i) through (iv) above are herein referred to as a “Prohibited Person”).

 

b.                                       With respect to every Purchased Mortgage Loan, each Seller represents and warrants to Administrative Agent and Buyers as of the applicable Purchase Date for any Transaction and each date thereafter that each representation and warranty set forth on Schedule 1 is true and correct.

 

c.                                        The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Mortgage Loans to Administrative Agent for the benefit of Buyers and to each Buyer and shall continue for so long as the Purchased Mortgage Loans are subject to this Agreement. Upon discovery by Sellers, Servicer or Administrative Agent of any breach of any of the representations or warranties set forth in this Agreement, the party discovering such breach shall promptly give notice of such discovery to the others.

 

d.                                       Each of Administrative Agent and Buyers, as applicable, represents, warrants and covenants (as applicable) to Sellers that, as of the date hereof and as of each Purchase Date for any Transaction that:

 

(1)                                 Organization. Licenses and Standing. Each of Administrative Agent and Buyers is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all licenses necessary to carry on its business as now being conducted;

 

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(2)                                 Due Authority. Each of Administrative Agent and Buyers has the full power and authority to perform, and to enter into and consummate, all transactions contemplated by this Agreement; Administrative Agent on behalf of Buyers and each Buyer has the full power and authority to purchase and hold each Mortgage Loan;

 

(3)                                 No Conflict. Neither the acquisition of the Mortgage Loans by Administrative Agent on behalf of Buyers or any Buyer pursuant to this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, will conflict with or result in a material breach of any of the terms, conditions or provisions of Administrative Agent’s or any Buyer’s charter or by-laws or result in a material breach of any legal restriction or any material agreement or instrument to which Administrative Agent or such Buyer is now a party or by which it is bound, or constitute a material default or result in an acceleration under any of the foregoing, or result in the violation of any material law, rule, regulation, order, judgment or decree to which Administrative Agent or such Buyer or its property is subject;

 

(4)                                 No Pending Litigation. There is no action, suit, proceeding, investigation or litigation pending which would materially and adversely affect the ability of Administrative Agent or any Buyer to enter into this Agreement or to perform its obligations hereunder; and

 

(5)                                 No Consent Required. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Administrative Agent or any Buyer of or compliance by Administrative Agent or any Buyer with this Agreement or the consummation of the Transactions contemplated by this Agreement, or if required, such consent, approval, authorization or order has been obtained prior to the related Purchase Date.

 

Each Seller acknowledges and agrees that such Seller’s sole remedy for a breach of a representation and warranty of the Administrative Agent and Buyers hereunder shall be to repurchase all Mortgage Loans subject to Transactions hereunder at the Repurchase Price.

 

14.                              Covenants

 

Each Seller covenants with Administrative Agent and Buyers that, during the term of this facility:

 

a.                                       Financial and other Unique Covenants. Quicken Loans shall comply with all financial covenants set forth in Section 2 of the Pricing Side Letter.

 

b.                                       Reserved.

 

c.                                        Litigation. Each Seller will promptly, and in any event within sixty (60) days after service of process on any of the following, give to Administrative

 

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Agent notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting such Seller or any of its Subsidiaries or affecting any of the Property of any of them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Program Agreements or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim individually or in an aggregate amount greater than [***] or (iii) which, individually or in the aggregate, if adversely determined, could be reasonably likely to have a Material Adverse Effect. Each Seller will promptly provide notice of any judgment, which with the passage of time, could cause an Event of Default hereunder. Any notice under this Section 14(c) shall be deemed to automatically update Schedule 3.

 

d.                                       Prohibition of Fundamental Changes. Subject to the provisions set forth above in the definition of “Change in Control,” no Seller shall, without Administrative Agent’s prior written consent, enter into any transaction of merger or consolidation if the result thereof would be a Change in Control, nor shall Quicken Loans liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution).

 

e.                                        Reserved.

 

f.                                         Servicer; Asset Tape. Upon the occurrence of any of the following (a) the occurrence and continuation of an Event of Default, (b) the fifth (5th) Business Day of each month, or (c) upon the written request of Administrative Agent, Sellers shall cause each Servicer to provide to Administrative Agent, electronically, in a format mutually acceptable to Administrative Agent and Sellers, an Asset Tape by no later than the Reporting Date. Sellers shall not cause the Mortgage Loans to be serviced by any servicer other than a servicer expressly approved in writing by Administrative Agent, which approval shall be deemed granted by Administrative Agent with respect to Sellers and any Person within the definition of Servicer with the execution of this Agreement.

 

g.                                        Insurance. One or both of the Sellers or their Affiliates will continue to maintain, for Sellers, insurance coverage with respect to employee dishonesty, forgery or alteration, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Fannie Mae, Freddie Mac and GNMA, to the extent a Seller sells Mortgage Loans to such Agency.

 

h.                                       No Adverse Claims. Each Seller warrants and will defend, and shall cause any Servicer to defend, the right, title and interest of Administrative Agent and Buyers in and to all Purchased Mortgage Loans and the related Repurchase Assets against all adverse claims and demands (other than any claim or demand related to any act or omission of Administrative Agent or Buyers, which claim or

 

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demand does not arise out of or relate to any breach or potential breach of a representation or warranty by such Seller under this Agreement).

 

i.                                           Assignment. Except as permitted herein, neither Sellers nor any Servicer shall sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Agreements), any of the Purchased Mortgage Loans or any interest therein, provided that this Section shall not prevent any transfer of Purchased Mortgage Loans in accordance with the Program Agreements.

 

j.                                          Security Interest. Each Seller shall do all things necessary to preserve the Purchased Mortgage Loans and the related Repurchase Assets so that they remain subject to a first priority perfected security interest hereunder. Without limiting the foregoing, each Seller will comply in all material respects with all rules, regulations and other laws of any Governmental Authority and cause the Purchased Mortgage Loans or the related Repurchase Assets to comply in all material respects with all applicable rules, regulations and other laws. Neither Seller will allow any default for which such Seller is responsible to occur under any Purchased Mortgage Loans or the related Repurchase Assets or any Program Agreement and each Seller shall fully perform or cause to be performed when due all of its material obligations under any Purchased Mortgage Loans or the related Repurchase Assets and any Program Agreement.

 

k.                                       Records.

 

(1)                                 Each Seller shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Mortgage Loans in accordance with industry custom and practice for assets similar to the Purchased Mortgage Loans, including those maintained pursuant to the preceding subparagraph, and all such Records shall be in Custodian’s possession unless Administrative Agent otherwise approves. Sellers will exercise commercially reasonable efforts to not allow any such papers, records or files that are an original or an only copy to leave Custodian’s possession, except for individual items removed in connection with servicing a specific Mortgage Loan, in which event Sellers will obtain or cause to be obtained a receipt from a financially responsible person for any such paper, record or file. Sellers or the Servicer of the Purchased Mortgage Loans will maintain all such Records not in the possession of Custodian in good and complete condition in accordance with industry practices for assets similar to the Purchased Mortgage Loans and Sellers shall exercise commercially reasonable efforts to preserve such Records against loss.

 

(2)                                 For so long as Administrative Agent has an interest in or lien on any Purchased Mortgage Loan, Sellers will hold or cause to be held all related Records in trust for Administrative Agent. Sellers shall notify, or cause to

 

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be notified, every other party holding any such Records of the interests and liens in favor of Administrative Agent granted hereby.

 

(3)                                 Upon reasonable advance written notice from Custodian or Administrative Agent, Sellers shall (x) make any and all such Records available to Custodian, Administrative Agent to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit Administrative Agent or its authorized agents to discuss the affairs, finances and accounts of each Seller with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of such Seller with its independent certified public accountants (which shall only be done in the presence of such Seller’s controller or other officer designated by such Seller, which Person such Seller shall make available to Administrative Agent).

 

l.                                           Books. Each Seller shall keep or cause to be kept in reasonable detail books and records of account of its assets and business and shall clearly reflect therein the transfer of Purchased Mortgage Loans to Administrative Agent for the benefit of Buyers.

 

m.                                   Approvals. Each Seller shall maintain all licenses, permits or other approvals necessary for such Seller to conduct its business and to perform its obligations under the Program Agreements, and such Seller shall conduct its business strictly in accordance with applicable law in all material respects.

 

n.                                       Material Change in Business. There shall not be (i) any material change by Sellers, taken as a whole, in the nature of their business as carried on at the date hereof, or (ii) any change in the Executive Management of Quicken Loans, in each case, unless Administrative Agent otherwise consents to such Seller’s written request therefor.

 

o.                                       Distributions. During the occurrence and continuance of an Event of Default related to Sellers’ failure to comply with Sections 2.1, 2.3 or 2.4 of the Pricing Side Letter, Quicken Loans shall not (absent Administrative Agent’s prior written consent) pay any dividends with respect to any capital stock or other equity interests in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of either Seller (any such payment a “Prohibited Distribution”); provided that (i) Quicken Loans may pay dividends or make any such other distribution solely in connection with the payment of taxes attributable to the preceding fiscal year, so long as such payment or distribution does not, after giving effect thereto, result in an Event of Default, and (ii) this Section 14(o) shall not restrict dividends or distributions by One Reverse unless there shall have occurred and is continuing a One Reverse Termination Trigger Event pursuant to clause (6) of the definition thereof or One Reverse ceases to be owned wholly and directly by Quicken Loans, in which

 

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case One Reverse shall not make any Prohibited Distribution while it is a party to this Agreement and the Program Agreements.

 

p.                                       Applicable Law. Each Seller shall comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority.

 

q.                                       Existence. Subject to the provisions set forth in the definition of “Change in Control,” each Seller shall preserve and maintain its legal existence.

 

r.                                          Chief Executive Office; Jurisdiction of Organization. No Seller shall move its chief executive office from the address referred to in Section 13(a)(17) or change its jurisdiction of organization from the jurisdiction referred to in Section 13(a)(17) unless it shall have provided Administrative Agent thirty (30) days’ prior written notice of such change.

 

s.                                         Taxes. Each Seller shall pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is the subject of a Good Faith Dispute.

 

t.                                          Transactions with Affiliates. No Seller will enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (1) between One Reverse (while it is a Seller) and Quicken Loans, or (2) upon fair and reasonable terms no less favorable to such Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate, nor shall any Seller make a payment that is otherwise prohibited by this Agreement to any Affiliate; provided, that this clause shall not apply to the extent that such transaction(s) consist of a lending arrangement with such Affiliate where the total amount of such transactions are, when made, less than the amount that such Seller could have otherwise distributed as a dividend to all of its shareholders without such distribution (after giving effect thereto) resulting in an Event of Default.

 

u.                                       Guarantees. No Seller shall create, incur, assume or suffer to exist any Guarantees, except (i) those to which Administrative Agent consents in writing, (ii) those reflected in such Seller’s financial statements or notes thereto, to the extent so reflected, (iii) those by one Seller for the benefit of the other Seller, (iv) those disclosed in Exhibit J, as updated from time to time, and (v) those Guarantees in addition to those permitted by clause (i), (ii), (iii) or (iv) to the extent that they do not exceed [***] in the aggregate for both Sellers combined.

 

v.                                       Indebtedness. No Seller shall incur any additional Indebtedness in an amount greater than [***] combined (other than (i) the Existing

 

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Indebtedness in amounts not to exceed the amounts specified on Exhibit J hereto, (ii) Guarantees permitted under Section 14(u) and (iii) usual and customary accounts payable for a mortgage company) without the prior written consent of Administrative Agent, which consent shall not be unreasonably withheld or delayed if the additional Indebtedness would not cause a violation of any of such Seller’s covenants in this Agreement. Notwithstanding the restrictions in the immediately preceding sentence, it is understood and agreed that each Seller shall be permitted to: (1) increase the amount of its existing credit under its Existing Indebtedness and/or replace, refinance (including with a different lender), renew or extend such credit; (2) incur additional indebtedness with another lender secured by mortgage loans or mortgage servicing rights (and related advances); and/or (3) enter into another reverse repurchase facility similar to the one being provided under this Agreement; provided, however, that any such action contemplated by this sentence shall not cause a violation of any of such Seller’s covenants in this Agreement.

 

w.                                     Hedging. Quicken Loans has entered into Interest Rate Protection Agreements with respect to the Non-Agency QM Mortgage Loan and Conforming Mortgage Loans.

 

x.                                       True and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of each Seller, any Affiliate thereof or any of their officers furnished to Administrative Agent hereunder and during Administrative Agent’s diligence of each Seller are and will be true and complete in all material respects and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by each Seller to Administrative Agent pursuant to this Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to SEC filings, the appropriate SEC accounting regulations.

 

y.                                       Agency Approvals; Servicing. Quicken Loans shall maintain its status with Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, in each case in good standing. Sellers shall service all Purchased Mortgage Loans which are Committed Mortgage Loans in accordance, in all material respects, with the applicable agency guide, if any. Should Quicken Loans, for any reason, cease to possess all applicable Agency approvals, or should notification to the relevant Agency or to HUD, FHA or VA be required, Quicken Loans shall so notify Administrative Agent immediately in writing. Notwithstanding the preceding sentence, Quicken Loans shall take all necessary action to maintain all of its required Agency approvals at all times during the term of this Agreement and each outstanding Transaction; provided, that, it shall not be a breach of this Section 14(y) should (1) Quicken Loans no longer maintain an applicable Agency’s approval so long as the failure to maintain any Agency approvals is an independent decision of Quicken Loans and in no way is attributed to a disapproval or other adverse action taken against Quicken Loans specifically (as opposed to all approved lenders generally) by the applicable

 

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Agency, and (2) Quicken Loans maintain at least one Agency approval. Each Seller or its Servicer has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans sold by it to Administrative Agent hereunder and in accordance with Accepted Servicing Practices.

 

z.                                          Take-out Payments. With respect to each Committed Mortgage Loan, Sellers shall arrange that all payments under the related Take-Out Commitment shall be paid directly to Administrative Agent at the account set forth in Section 9 hereof, or to an account approved by Administrative Agent in writing prior to such payment. With respect to any Agency Take-Out Commitment, if applicable, (1) with respect to the wire transfer instructions as set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse Delivery) such wire transfer instructions are identical to Administrative Agent’s wire instructions or Administrative Agent has approved such wire transfer instructions in writing in its sole good faith discretion, or (2) the Payee Number set forth on Fannie Mae Form 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable, is identical to the Payee Number that has been identified by Administrative Agent in writing as Administrative Agent’s Payee Number or Administrative Agent has previously approved the related Payee Number in writing in its sole good faith discretion; with respect to any Take-Out Commitment with an Agency, the applicable agency documents shall list Administrative Agent as sole subscriber, unless otherwise agreed to in writing by Administrative Agent, in Administrative Agent’s sole discretion.

 

aa.                                No Pledge. Except pursuant to this Agreement, no Seller shall pledge, transfer or convey any security interest in the Collection Account to any Person (other than Administrative Agent for the benefit of Buyers) without the express written consent of Administrative Agent.

 

bb.                                Plan Assets. No Seller shall be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code and no Seller shall use “plan assets” within the meaning of 29 CFR §2510.3 101, as amended by Section 3(42) of ERISA to engage in this Agreement or any Transaction hereunder. Transactions by or with any Seller shall not be subject to any foreign, state or local statute regulating investments of or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.

 

cc.                                  Furnishing of Financial Information. Each Seller shall furnish to Administrative Agent promptly, copies of any material financial information relating to such Seller’s Indebtedness that is not otherwise required to be provided by such Seller hereunder which, from and after the date of this Agreement, is given to such Seller’s lenders, with appropriate time permitted for

 

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such Seller to redact any information that is confidential and/or unrelated to the financial information.

 

dd.                                Preservation of Rights. Each Seller shall preserve and maintain all of its material rights, privileges, licenses and franchises, except for transactions that do not constitute a Change in Control or would otherwise cause a Default.

 

ee.                                  Reserved.

 

ff.                                    Reserved.

 

gg.                                  Reserved.

 

hh.                                No Prohibited Persons. No Seller nor any of its officers, directors, partners or members shall be an entity or person: (i) whose name appears on the most current “List of Specially Designated National and Blocked Persons” (https://sanctionssearch.ofac.treas.gov/) maintained by OFAC (or to any Seller’s knowledge, 50 percent or greater owned or controlled by such entities or persons); or (ii) who is otherwise a Prohibited Person.

 

ii.                                        Sharing of Information. Notwithstanding anything to the contrary herein, the Sellers shall allow the Administrative Agent and Buyers to exchange information related to any Seller’s collateral and the performance of its financing arrangements with such Seller’s lenders and the collateral subject to those agreements and the Sellers shall permit each of its lenders to share such information with the Administrative Agent and Buyers.

 

15.                               Events of Default

 

Each of the following shall constitute an “Event of Default” hereunder:

 

a.                                       Payment Failure. Failure of any Seller to (i) make any scheduled payment of Price Differential or Repurchase Price under the terms of this Agreement, (ii) make any payment due under any other warehouse and security agreement evidencing or securing Indebtedness of either Seller to Administrative Agent or to any Affiliate of Administrative Agent, when due, after expiration of any applicable grace period thereunder, (iii) cure any Margin Deficit when due pursuant to Section 6 hereof, (iv) pay any Repurchase Price due following the occurrence of a One Reverse Termination Trigger Event, or (v) make any payment due under the terms of this Agreement not otherwise set forth in clauses (i) through (iv) above within [***] following receipt of notice of such failure.

 

b.                                       Cross Acceleration. Either Seller shall be in default, beyond the expiration of any applicable grace or cure period, under any Indebtedness in excess of [***] in the aggregate of Sellers combined, which default results in the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness; provided that an Event of Default

 

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arising under this subsection (b) and all consequences thereof shall be annulled, waived and rescinded, automatically and without any action by Administrative Agent, if, within [***] after Sellers received notice of such acceleration, (i) the Indebtedness that was the basis for such Event of Default has been discharged, or (ii) the holder or holders thereof have rescinded, annulled or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default, or (iii) the default that was the basis for such Event of Default has been cured.

 

c.                                        Assignment. Assignment or attempted assignment by any Seller of this Agreement or any rights hereunder without first obtaining the specific written consent of Administrative Agent, or the granting by any Seller of any security interest, lien or other encumbrances on any Purchased Mortgage Loans to any person other than Administrative Agent for the benefit of Buyers.

 

d.                                       Insolvency. An Act of Insolvency shall have occurred with respect to either Seller.

 

e.                                        Material Adverse Change. Any material adverse change in the Property, business, financial condition or operations of the Sellers, taken as a whole, shall occur, in each case as determined by Administrative Agent in its sole good faith discretion, or any other condition shall exist which, in Administrative Agent’s sole good faith discretion, constitutes a material impairment of the Sellers’, taken as a whole, ability to perform their obligations under this Agreement or any other Program Agreement.

 

f.                                         Breach of Specified Representation or Covenant or Obligation. A breach by any Seller in any material respect of any of the representations, warranties or covenants or obligations set forth in Sections 13(a)(1) (Seller Existence), 13(a)(7) (Solvency), 13(a)(12) (Material Adverse Change), 13(a)(19) (Adjusted Tangible Net Worth), 13(a)(23) (Other Indebtedness), 14a (Financial and Other Unique Covenants), 14d (Prohibition of Fundamental Changes), 14q (Existence), 14u (Guarantees), 14v (Indebtedness), 14z (Take-out Payments), 14aa (No Pledge) or 14bb (Plan Assets) of this Agreement.

 

g.                                        Breach of Non-Financial Representation or Covenant. A breach by any Seller of any other material representation, warranty or covenant set forth in this Agreement (and not otherwise specified in Section 15(f) above) or any other Program Agreement, if such breach is not cured within [***] following receipt of written notice of such failure (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Asset Value, the existence of a Margin Deficit and the obligation to repurchase such Mortgage Loan) unless (i) a Seller shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made, (ii) any such representations and warranties have been determined by Administrative Agent in its sole good faith discretion to be materially false or misleading on a regular basis, or

 

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(iii) Administrative Agent, in its sole good faith discretion, determines that such breach of a material representation, warranty or covenant materially and adversely affects (A) the condition (financial or otherwise) of the Sellers, taken as a whole; or (B) Administrative Agent’s determination to enter into this Agreement or Transactions with the Sellers, taken as a whole, then such breach shall constitute an immediate Event of Default and Sellers shall have no cure right hereunder).

 

h.                                       Change in Control. The occurrence of a Change in Control with respect to Quicken Loans and a failure of Sellers to repurchase all Purchased Mortgage Loans subject to Transactions within [***].

 

i.                                           Failure to Transfer. The applicable Seller fails to transfer the Purchased Mortgage Loans to Administrative Agent for the benefit of the applicable Buyer on the applicable Purchase Date (provided the Administrative Agent, on behalf of the applicable Buyer, has tendered the related Purchase Price). For the avoidance of doubt, a “transfer” will be deemed to have occurred if the Custodian has certified its possession of a Mortgage File or, in the case of Wet-Ink Mortgage Loans, any Mortgage Loan information.

 

j.                                          Judgment. A final judgment or judgments for the payment of money in excess of [***] in the aggregate shall be rendered against any Seller by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] from the date of entry thereof.

 

k.                                       Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Sellers, taken as a whole, or shall have taken any action to displace the Executive Management of Quicken Loans or to materially curtail its authority in the conduct of the business of the Sellers, taken as a whole, or takes any action in the nature of enforcement to remove, limit or restrict the approval of Quicken Loans as an issuer or buyer of Mortgage Loans or securities backed thereby, and such action provided for in this subparagraph k (i) is determined by Administrative Agent in its sole good faith discretion to be materially adverse to Administrative Agent and Buyers taken as a whole, the Sellers, taken as a whole, or the Repurchase Assets, taken as a whole, ability to perform under this Agreement and (ii) shall not have been discontinued or stayed within [***].

 

l.                                           Inability to Perform. A member of any Seller’s Executive Management shall admit such Seller’s inability to, or its intention not to, perform any of such Seller’s Obligations hereunder.

 

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m.                                   Security Interest. This Agreement shall for any reason cease to create a valid, first priority security interest in any material portion of the (i) Purchased Mortgage Loans or (ii) other Repurchase Assets purported to be covered hereby.

 

n.                                       Financial Statements. Quicken Loans’ audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Quicken Loans as a “going concern” or a reference of similar import.

 

An Event of Default shall be deemed to be continuing unless expressly waived by Administrative Agent in writing.

 

16.                               Remedies Upon Default

 

In the event that an Event of Default shall have occurred and be continuing:

 

a.                                       Administrative Agent may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency of any Seller), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). Administrative Agent shall (except upon the occurrence of an Act of Insolvency of any Seller) give written notice to Sellers of the exercise of such option as promptly as practicable.

 

b.                                       If Administrative Agent exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Section, (i) Sellers’ obligations in such Transactions to repurchase all Purchased Mortgage Loans, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Section, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by Administrative Agent and applied, in Administrative Agent’s sole good faith discretion, to the aggregate unpaid Repurchase Prices for all outstanding Transactions and any other amounts owing by Sellers hereunder, and (iii) Sellers shall immediately deliver to Administrative Agent the Mortgage Files relating to any Purchased Mortgage Loans subject to such Transactions then in Sellers’ possession or control.

 

c.                                        Administrative Agent also shall have the right to obtain physical possession, and to commence an action to obtain physical possession, of (i) all Records of each Seller relating to the Purchased Mortgage Loans and (ii) all documents relating to the Purchased Mortgage Loans (including, without limitation, any legal, credit or servicing files specifically relating to the Purchased Mortgage Loans), which Records and documents are then or may

 

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thereafter come in to the possession of such Seller or any third party acting for such Seller; provided, however, that if such Records and documents relate to mortgage loans other than the Purchased Mortgage Loans Administrative Agent shall have a right to obtain copies of such Records and documents rather than the originals. To obtain physical possession of any Purchased Mortgage Loans held by Custodian, Administrative Agent shall present to Custodian a Trust Receipt and Certification. Administrative Agent shall be entitled to specific performance of all agreements of such Seller contained in this Agreement.

 

d.                               Administrative Agent shall have the right to direct all servicers then servicing any Purchased Mortgage Loans to remit all collections thereon to Administrative Agent, and if any such payments are received by a Seller, such Seller shall not commingle the amounts received with other funds of either Seller and shall promptly pay them over to Administrative Agent. Administrative Agent shall also have the right to terminate any one or all of the servicers then servicing any Purchased Mortgage Loans with or without cause. In addition, Administrative Agent shall have the right to immediately sell the Purchased Mortgage Loans and liquidate all Repurchase Assets. Such disposition of Purchased Mortgage Loans may be, at Administrative Agent’s option, on either a servicing released or a servicing retained basis. Administrative Agent shall not be required to give any warranties as to the Purchased Mortgage Loans with respect to any such disposition thereof. Administrative Agent may specifically disclaim or modify any warranties of title or the like relating to the Purchased Mortgage Loans. The foregoing procedure for disposition of the Purchased Mortgage Loans and liquidation of the Repurchase Assets shall not be considered to adversely affect the commercial reasonableness of any sale thereof. Administrative Agent shall be entitled to place the Purchased Mortgage Loans in a pool for issuance of mortgage backed securities at the then prevailing price for such securities and to sell such securities for such prevailing price in the open market. Administrative Agent shall also be entitled to sell any or all of such Mortgage Loans individually for the prevailing price. Administrative Agent shall also be entitled, in its sole discretion to elect, in lieu of selling all or a portion of such Purchased Mortgage Loans, to give the Sellers credit for such Purchased Mortgage Loans and the Repurchase Assets in an amount equal to the Asset Value of the Purchased Mortgage Loans against the aggregate unpaid Repurchase Price and any other amounts owing by the Sellers hereunder.

 

e.                                        Upon the happening of one or more Events of Default, Administrative Agent may apply any proceeds from the liquidation of the Purchased Mortgage Loans and Repurchase Assets to the Repurchase Prices hereunder and all other Obligations in the manner Administrative Agent deems appropriate in its sole discretion.

 

f.                                         Sellers shall be liable to Administrative Agent and each Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Administrative Agent and each Buyer in connection with the enforcement of this Agreement or any other agreement evidencing a

 

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Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel incurred in connection with or as a result of an Event of Default) and (ii) and any other out-of-pocket loss, damage, cost or expense arising or resulting from the occurrence of an Event of Default, including without limitation, reasonable costs under the circumstances incurred with the intention to mitigate losses, in respect of a Transaction.

 

g.                                        To the extent permitted by applicable law, Sellers shall be liable to Administrative Agent and each Buyer for interest on any amounts owing by Sellers hereunder, from the date Sellers become liable for such amounts hereunder until such amounts are (i) paid in full by Sellers or (ii) satisfied in full by the exercise of Administrative Agent’s and Buyers’ rights hereunder. Interest on any sum payable by Sellers under this Section 16(g) shall be at a rate equal to the Post-Default Rate.

 

h.                                       Administrative Agent shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.

 

i.                                           Administrative Agent may exercise one or more of the remedies available to Administrative Agent immediately upon the occurrence of an Event of Default and, except to the extent otherwise expressly provided in this Agreement (including, without limitation, as provided in subsections (a) and (d) of this Section), at any time thereafter without notice to Sellers. All rights and remedies arising under this Agreement as amended or restated from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Administrative Agent may have.

 

j.                                          Administrative Agent may enforce its rights and remedies hereunder without prior judicial process or hearing, and each Seller hereby expressly waives, to the extent permitted by applicable law (and absent any willful misconduct or gross negligence of Administrative Agent), any defenses a Seller might otherwise have to require Administrative Agent to enforce its rights by judicial process. Each Seller also waives, to the extent permitted by applicable law (and absent any willful misconduct or gross negligence of Administrative Agent), any defense (other than a defense of payment or performance) a Seller might otherwise have arising from the use of nonjudicial process in connection with the disposition of all or any portion of the Repurchase Assets, or from any other election of remedies. Each Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.

 

k.                                       Administrative Agent shall have the right to perform reasonable due diligence with respect to each Seller and the Mortgage Loans, which review shall be at the expense of Sellers (except as otherwise expressly provided herein).

 

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l.                                           With respect to any Second Lien Mortgage Loan, Administrative Agent shall have the right to exercise any rights available to the Sellers with respect to any Take-Out Commitment.

 

17.                               Reports

 

a.                                       Notices. Sellers shall furnish to Administrative Agent (x) promptly, copies of any material and adverse notices (including, without limitation, notices of defaults, breaches, potential defaults or potential breaches), (y) immediately, notice of the occurrence of any Event of Default hereunder or default or breach by a Seller or Servicer of any obligation under any Program Agreement or any material contract or agreement of a Seller or Servicer or the occurrence of any event or circumstance that such party reasonably expects has resulted in, or will, with the passage of time, result in, a Material Adverse Effect or an Event of Default or such a default or breach by such party and (z) the following:

 

(1)                                 as soon as available and in any event within forty-five (45) calendar days after the end of each calendar month, the unaudited consolidated balance sheet of Quicken Loans and its consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statements of income and retained earnings and of cash flows for Quicken Loans and its consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Quicken Loans, which certificate shall state that said consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of Quicken Loans and its consolidated Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal fiscal year-end and fiscal quarter-end adjustments);

 

(2)                                 as soon as available and in any event within ninety (90) days after the end of each fiscal year of Quicken Loans, the consolidated balance sheet of Quicken Loans and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for Quicken Loans and its consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion and the scope of audit shall be acceptable to Administrative Agent in its sole discretion, shall have no “going concern” qualification and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Quicken Loans and its respective consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;

 

(3)                                 such other prepared statements that Administrative Agent may reasonably request;

 

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(4)                                 if applicable, copies of any 10-Ks, 10-Qs, registration statements and other “corporate finance” SEC filings (other than 8-Ks) by any Seller, within five (5) Business Days of their filing with the SEC; provided, that, such Seller will provide Administrative Agent with a copy of the annual 10-K filed with the SEC by such Seller, no later than ninety (90) days after the end of the year;

 

(5)                                 as soon as available, and in any event within thirty (30) days of receipt, copies of relevant portions of all final written Agency, FHA, VA, Governmental Authority and investor audits, examinations, evaluations, monitoring reviews and reports of its operations (including those prepared on a contract basis) which provide for or relate to (i) material corrective action required, (ii) material sanctions proposed, imposed or required, including without limitation notices of defaults, notices of termination of approved status, notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non-renewal, or (iii) to the extent reasonably requested by the Administrative Agent, “report cards,” “grades” or other classifications of the quality of a Seller’s operations;

 

(6)                                 from time to time such other information regarding the financial condition, operations, or business of the Sellers as Administrative Agent may reasonably request; provided that (A) any such request shall be made in writing and shall provide the applicable Seller at least ten (10) business days to provide such requested information, and (B) if a Seller objects to the provision to Administrative Agent of any such requested information, Administrative Agent and the applicable Seller shall work in good faith to resolve any such objection, and Sellers’ failure to provide such information before such objection is resolved shall not be a breach of this Section 17.a.(6) or result in a Default or Event of Default under this Agreement;

 

(7)                                 as soon as reasonably possible, and in any event within thirty (30) days after a Responsible Officer of any Seller has knowledge of the occurrence of any Event of Termination, stating the particulars of such Event of Termination in reasonable detail;

 

(8)                                 as soon as reasonably possible, notice of any of the following events:

 

(a)                                 material change in the insurance coverage required of Sellers or their Affiliates, Servicer or any other Person pursuant to any Program Agreement, with a copy of evidence of same attached;

 

(b)                                 any material dispute, litigation, investigation, proceeding or suspension between any Seller or Servicer, on the one hand, and any Governmental Authority or any Person;

 

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(c)                                  any material change in accounting policies or financial reporting practices of Quicken Loans or Servicer;

 

(d)                                 with respect to any Purchased Mortgage Loan(s) with a combined aggregate unpaid principal balance of at least $15,000,000, promptly upon any Seller becoming aware during the normal course of its business that the underlying Mortgaged Property has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as to affect materially (in a combined aggregate amount of at least $5,000,000) and adversely the value of such Purchased Mortgaged Loan(s);

 

(e)                                  any material issues raised upon examination of any Seller or such Seller’s facilities by any Governmental Authority;

 

(f)                                   any material default or non-renewal or termination in any material Indebtedness of any Seller; provided that such Seller shall give Administrative Agent notice of all Indebtedness (other than Indebtedness evidenced by this Agreement) of such Seller existing as of the date of, and through the disclosure in, the Officer’s Compliance Certificate required by Section 17(b); provided further that any disclosure pursuant to this Section 17(a)(8)(f) shall automatically update Exhibit J to this Agreement;

 

(g)                                  promptly upon any Seller becoming aware during the normal course of its business of (i) any default related to any Repurchase Asset, or (ii) any lien or security interest (other than security interests created hereby, by the Mortgage or related documents or by the other Program Agreements) on, or claim asserted against, any Purchased Mortgage Loans that, collectively with respect to clauses (i) and (ii) combined, are with respect to any Purchased Mortgage Loan(s) with an aggregate unpaid principal balance of at least $15,000,000 and that has a material (in an aggregate amount of at least $2,000,000) and adverse effect on the value of such Purchased Mortgaged Loan(s);

 

(h)                                 any other event, circumstance or condition that has resulted, or would reasonably be expected to result, in a Material Adverse Effect with respect to Sellers, taken as a whole, or Servicer;

 

(i)                                     a summary, as of the end of each month of the total dollar amount and aggregate loan count of (i) each Seller’s outstanding portfolio of pending repurchase/indemnification requests relating to representation and warranty breaches and (ii) the loans repurchased to date in the current fiscal year;

 

(j)                                    the occurrence of any material employment dispute that would reasonably be expected to result in a Material Adverse Effect and a description of the strategy for resolving such dispute;

 

(k)                                 the occurrence of any One Reverse Termination Trigger Event; and

 

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(9)                                 as soon as available and in any event at least three (3) Business Days’ prior, notice of the intention of One Reverse to liquidate, wind up or dissolve itself.

 

b.                                       Officer’s Certificates. Sellers will furnish to Administrative Agent, at the time Sellers furnish each set of financial statements pursuant to Section 17(a)(1) or (2) above, an Officer’s Compliance Certificate in the form of Exhibit A to the Pricing Side Letter.

 

c.                                        Mortgage Loan Reports. Sellers will furnish to Administrative Agent monthly electronic Mortgage Loan performance data, including, without limitation, delinquency reports and volume information, broken down by product (i.e., delinquency, foreclosure and net charge-off reports).

 

d.                                       Asset Tape. Sellers shall provide to Administrative Agent, electronically, in a format mutually acceptable to Administrative Agent and Sellers, an Asset Tape by no later than the Reporting Date.

 

e.                                        Other. Sellers shall deliver to Administrative Agent any other reports or information reasonably requested by Administrative Agent or as otherwise required pursuant to this Agreement.

 

f.                                         Second Lien Mortgage Loans. The Sellers hereby agree to deliver promptly to Administrative Agent (i) any notice of termination, default by a Seller or material breach by such Seller of the Take-Out Commitment relating to any Second Lien Mortgage Loan, (ii) any notice of the intention of the Take-out Investor not to perform under any Take-Out Commitment relating to any Second Lien Mortgage Loan, (iii) any amendment to a Take-Out Commitment relating to any Second Lien Mortgage Loan; provided that Sellers shall not amend, modify, waive or supplement any Take-Out Commitment relating to any Second Lien Mortgage Loan or the Schwab Purchase Agreement without the consent of the Administrative Agent, which may be granted or withheld in its sole discretion.

 

18.                               Repurchase Transactions

 

a.                                       General. A Buyer may, in its sole election, engage in repurchase transactions (as “seller” thereunder) with any or all of the Purchased Mortgage Loans and/or Repurchase Assets or pledge, hypothecate, assign, transfer or otherwise convey any or all of the Purchased Mortgage Loans and/or Repurchase Assets with a counterparty of Buyers’ choice (such transaction, a “Repledge Transaction”). Any Repledge Transaction shall be effected by notice to the

 

Administrative Agent, and shall be reflected on the books and records of the Administrative Agent. No such Repledge Transaction shall relieve Administrative Agent or any Buyer of its obligations under the Program Documents, including, without limitation, its obligation to transfer Purchased Mortgage Loans and Repurchase Assets to Sellers (and not substitutions thereof) pursuant to the terms hereof; provided, that, notwithstanding any such Repledge

 

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Transaction by a CP Conduit and notwithstanding anything in the Program Agreements to the contrary, CS Cayman shall be liable for the failure of any CP Conduit to comply with any of its obligations under any of the Program Agreements.

 

b.                               Treatment of Repledge Transactions. In furtherance, and not by limitation of, the foregoing, but subject to the remainder of this paragraph b, it is acknowledged that each counterparty under a Repledge Transaction (a “Repledgee”), is a repledgee as contemplated by Sections 9-207 and 9-623 of the UCC (and the relevant Official Comments thereunder). For clarity, Administrative Agent and Buyers acknowledge and agree as follows:

 

(1)                                 No Waiver. Nothing in this Section 18 shall be deemed to be an actual or implied waiver of any rights of Sellers or obligations of Administrative Agent or Buyers under the Program Agreements, including, without limitation, claims for conversion of any Purchased Mortgage Loans or Repurchase Assets that are not returned to Sellers on the Repurchase Date, claims for breach of any of the Program Agreements and rights to have income on the related Purchased Mortgage Loans credited or paid to, or applied to the obligations of, the applicable Seller pursuant to the Program Agreements.

 

(2)                                 Specifically Identifiable. The Purchased Mortgage Loans and Repurchase Assets subject to Transactions under this Agreement are specifically identifiable, even after a Repledge Transaction.

 

(3)                                 Sellers and Repledgees May Deal Directly. Upon an event of default by a Buyer under a Repledge Transaction, and without any interference from the Administrative Agent or the Buyers, the applicable Seller may pay the Repurchase Price with respect to the Purchased Mortgage Loans subject to such Repledge Transaction, directly to the Repledgee on behalf of the applicable Buyer in satisfaction of the applicable Seller’s Repurchase Price payment obligations to Administrative Agent and Buyers under the Program Agreements with respect to the Purchased Mortgage Loan subject to such Repledge Transaction, and the Repledgee may, in its sole discretion, release any Purchased Mortgage Loans and Repurchase Assets directly to the applicable Seller on behalf of the applicable Buyers and Administrative Agent in satisfaction of its obligations under the Repledge Transaction; provided, that, such satisfaction shall not be deemed a satisfaction of any obligations related to the Purchased Mortgage Loans not subject to such Repledge Transaction.

 

(4)                                 Termination of Transaction Upon Tender of Repurchase Price Even if Purchased Mortgage Loans Cannot be Returned. Upon any tender of Repurchase Price in exchange for Purchased Mortgage Loans in accordance with Section 4 hereof, if the Administrative Agent is unable to return any of the Purchased Mortgage Loans (such Mortgage Loans, the “Unreturned Mortgage Loans”) in exchange for payment of such Repurchase Price, then, without releasing any other claims Sellers may have against Buyers hereunder, the

 

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Repurchase Price on account of such Unreturned Mortgage Loans shall be deemed paid hereunder by means of offset, and no further Price Differential shall accrue with respect thereto.

 

c.                                        Information Sharing. Administrative Agent and Buyers are each hereby authorized to share any information delivered hereunder with the Repledgee; provided, that, any such Repledgee shall execute a confidentiality agreement reasonably acceptable to Sellers, it being understood that such agreement shall be deemed acceptable by Sellers if it contains terms at least as restrictive as those set forth in Section 32 hereof, and Administrative Agent and Buyers shall reasonably cooperate with Sellers in enforcing such confidentiality agreement for the benefit of Sellers; provided further, that no Seller shall be subject to any additional reporting requirements other than as set forth in the Program Agreements.

 

d.                                       Right to Return of Purchased Mortgage Loans and Repurchase Assets. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, including, without limitation, any of the provisions of Section 45 hereof, the Administrative Agent and the Buyers covenant and agree that to the extent any Purchased Mortgage Loans or Repurchase Assets are subject to Repledge Transactions, the Sellers’ right to obtain the return of such Purchased Mortgage Loans and Repurchase Assets as contemplated hereunder shall not be impaired solely as a result of the performance of any assets that are subject to the same Repledge Transactions that are not subject to this Agreement.

 

19.                               Single Agreement

 

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

 

20.                              Notices and Other Communications

 

Any and all notices (with the exception of Transaction Requests, which shall be delivered via facsimile or email or other electronic transmission only, statements, demands or other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other

 

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communication as specified in the preceding sentence. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.

 

If to Quicken Loans:

 

Quicken Loans Inc.

1050 Woodward Avenue

Detroit, Michigan 48226-1906

Attention: Julie Booth

Phone Number: (313) 373-7968

Fax Number: (877) 380-4048

Email: JulieBooth@quickenloans.com

 

with a copy to:

 

Quicken Loans Inc.

1050 Woodward Avenue

Detroit, Michigan 48226-1906

Attention: Angelo V. Vitale

Phone Number: (313) 373-7556

Fax Number: (877) 380-4045

Email:AngeloVitale@quickenloans.com

 

If to One Reverse:

 

One Reverse Mortgage, LLC

9920 Pacific Heights Blvd., Suite 350 

San Diego, California 92121 

Attention: Gregg Smith

Phone Number: (858) 652-4724 

Fax Number: (877) 382-7342 

Email: greggsmith@onereverse.com

 

with a copy to:

 

Quicken Loans Inc.

1050 Woodward Avenue

Detroit, Michigan 48226-1906

Attention: Angelo V. Vitale

Phone Number: (313) 373-7556

Fax Number: (877) 380-4045

Email:AngeloVitale@quickenloans.com

 

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If to Administrative Agent or any Buyer:

 

For Transaction Requests:

 

CSFBMC LLC

c/o Credit Suisse Securities (USA) LLC 

One Madison Avenue, 2nd floor

New York, New York 10010

Attention: Christopher Bergs, Resi Mortgage Warehouse Ops 

Phone: 212-538-5087

E-mail: christopher.bergs@credit-suisse.com 

 

with a copy to:

 

Credit Suisse First Boston Mortgage Capital LLC 

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue, 4th Floor 

Attention: Margaret Dellafera 

New York, NY 10010

E-mail: margaret.dellafera @credit-suisse.com 

Phone Number: 212-325-6471

Fax Number: 212-743-4810

 

For all other Notices:

 

Credit Suisse First Boston Mortgage Capital LLC 

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue, 4th Floor 

Attention: Margaret Dellafera 

New York, New York 10010

E-mail: margaret.dellafera@credit-suisse.com 

Phone Number: 212-325-6471

Fax Number: 212-743-4810

 

with a copy to:

 

Credit Suisse First Boston Mortgage Capital LLC 

c/o Credit Suisse Securities (USA) LLC

One Madison Avenue, 9th Floor 

New York, NY 10010

Attention: Legal Department—RMBS Warehouse Lending 

Phone Number: 212-325-4053

Fax Number: 212-322-1216

Email: barbara.nottebohm@credit-suisse.com

 

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21.                              Entire Agreement; Severability

 

This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

 

22.                              Non assignability

 

a.                                      Assignments. The Program Agreements are not assignable by any Seller. Subject to Section 37 (Acknowledgment of Assignment and Administration of Repurchase Agreement) and the provisions of this Section 22 (Non assignability) hereof, Administrative Agent and Buyers may from time to time assign all or a portion of their rights and obligations under this Agreement and the Program Agreements if (i) an Event of Default has occurred and is continuing, (ii) such assignment is to an Affiliate of Administrative Agent or (iii) such assignment is to any other Person, with (in respect of this clause (iii) and in the absence of an Event of Default) Seller’s prior written consent, not to be unreasonably withheld; provided, however that Administrative Agent shall maintain, solely for this purpose as a non-fiduciary agent of Sellers, for review by Sellers upon written request, a register of assignees and participants (the “Register”) and a copy of an executed assignment and acceptance by Administrative Agent, each applicable Buyer and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. The entries in the Register shall be conclusive absent manifest error, and the Sellers, Administrative Agent and Buyers shall treat each Person whose name is properly recorded in the Register pursuant to the preceding sentence as a Buyer (or Administrative Agent, as applicable) hereunder. Upon such assignment and recordation in the Register and compliance with clause (b) below, (a) such assignee shall be a party hereto and to each Program Agreement to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Administrative Agent and Buyers hereunder, as applicable, and (b) Administrative Agent and Buyers shall, to the extent that such rights and obligations have been so assigned by them to either (i) an Affiliate of Administrative Agent which assumes the obligations of Administrative Agent and Buyers, as applicable or (ii) another Person approved by Sellers (such approval not to be unreasonably withheld) which assumes the obligations of Administrative Agent and Buyers, as applicable, be released from its obligations hereunder and under the Program Agreements. Any assignment hereunder shall be deemed a joinder of such assignee as a Buyer hereto. Unless otherwise stated in the Assignment and Acceptance, Sellers shall continue to take directions solely from Administrative Agent unless otherwise notified by Administrative Agent in writing. Administrative Agent and Buyers may distribute to any prospective assignee this Agreement, the other Program Agreements, any document or other information delivered to Administrative Agent and/or Buyers by Sellers; provided, however, that any such prospective assignee shall execute a confidentiality agreement reasonably acceptable to Sellers, it being understood that such agreement shall be deemed acceptable by Sellers if it contains terms at least as restrictive as those set forth in Section 32 hereof, and Administrative Agent and Buyers shall reasonably cooperate with Sellers in enforcing such confidentiality agreement for the benefit of Sellers; provided, further, no Seller shall be subject to any additional reporting requirements other than as set forth in the Program Agreements.

 

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b.             Participations. Any Buyer may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement and under the Program Agreements; provided, however, that (i) such Buyer’s obligations under this Agreement and the other Program Agreements shall remain unchanged, (ii) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) Sellers shall continue to deal solely and directly with Administrative Agent and/or Buyers in connection with such Buyer’s rights and obligations under this Agreement and the other Program Agreements. Administrative Agent and Buyers may distribute to any prospective or actual participant this Agreement, the other Program Agreements any document or other information delivered to Administrative Agent and/or Buyers by Sellers; provided, however, that any such prospective participant shall execute a confidentiality agreement reasonably acceptable to Sellers, it being understood that such agreement shall be deemed acceptable by Sellers if it contains terms substantially similar to those set forth in Section 32 hereof, and Administrative Agent and Buyers shall reasonably cooperate with Sellers in enforcing such confidentiality agreement for the benefit of Sellers; provided, further, no Seller shall be subject to any additional reporting requirements other than as set forth in the Program Agreements.

 

23.                               Set-off

 

In addition to any rights and remedies of the Administrative Agent and Buyers hereunder and by law, the Administrative Agent on behalf of the Buyers shall have the right, without prior notice to Sellers (except for such notice and right to cure as may be specifically provided hereunder in connection with certain Events of Default), any such notice being expressly waived by Sellers to the extent permitted by applicable law, upon any amount becoming due and payable by Sellers hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount due and payable by a Seller hereunder to a Buyer or any of its Affiliates any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from Administrative Agent or any Affiliate of Administrative Agent that is the “Administrative Agent” as defined in the Servicing Facility Agreement (but for such Affiliate of Administrative Agent, only until the earlier of (i) the date such Affiliate of Administrative Agent ceases to be the “Administrative Agent” as defined in the Servicing Facility Agreement, and (ii) the date the aggregate outstanding “Repurchase Price” under such Servicing Facility Agreement has been paid in full and all “Transactions” under the Servicing Facility Agreement have terminated) to or for the credit or the account of Sellers. Administrative Agent agrees promptly to notify Sellers after any such set-off and application made by Administrative Agent; provided, that the failure to give such notice shall not affect the validity of such set-off and application.

 

24.                               Binding Effect; Governing Law; Jurisdiction

 

a.             This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Each Seller acknowledges that the obligations of Administrative Agent and Buyers hereunder or otherwise are not the subject of any guaranty by, or recourse to, any direct or indirect parent or other Affiliate of Administrative Agent and Buyers.

 

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THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

b.             EACH SELLER HEREBY WAIVES TRIAL BY JURY. EACH SELLER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR PROCEEDING. EACH SELLER HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS.

 

25.          No Waivers, Etc.

 

No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Section 6(a), 16(a) or otherwise, will not constitute a waiver of any right to do so at a later date.

 

26.                               Intent

 

a.             The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended, a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended, and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, that all payments hereunder are deemed “margin payments” or “settlement payments” as defined in Title 11 of the United States Code, and that the pledge of the Repurchase Assets constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Sellers, Administrative Agent and Buyers further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).

 

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b.               Any party’s right to liquidate the Purchased Mortgage Loans delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to Section 16 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561; any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” as such term is defined in Bankruptcy Code Section 741(5).

 

c.               The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

 

d.               It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

 

e.               This Agreement is intended to be a “repurchase agreement” and a “securities contract,” within the meaning of Section 101(47), Section 555, Section 559 and Section 741 under the Bankruptcy Code.

 

f.                Each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, the Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.

 

27.                               Disclosure Relating to Certain Federal Protections

 

The parties acknowledge that they have been advised that:

 

a.               in the case of Transactions in which one of the parties is a broker or dealer registered with the SEC under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the SIPA do not protect the other party with respect to any Transaction hereunder;

 

b.               in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and

 

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c.             in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.

 

28.          Power of Attorney

 

Each Seller hereby authorizes Administrative Agent to file such financing statement or statements relating to the Repurchase Assets without such Seller’s signature thereon as Administrative Agent, at its option, may deem appropriate. Each Seller hereby appoints Administrative Agent as such Seller’s agent and attorney-in-fact to execute any such financing statement or statements in such Seller’s name and to perform all other acts which Administrative Agent reasonably deems appropriate to perfect and continue its ownership interest in and/or the security interest granted hereby, if applicable, and to protect, preserve and realize upon the Repurchase Assets, including, but not limited to, the right to endorse notes, complete blanks in documents, transfer servicing, and sign assignments on behalf of such Seller as its agent and attorney-in-fact. This agency and power of attorney is coupled with an interest and is irrevocable without Administrative Agent’s consent. Notwithstanding the foregoing, the power of attorney hereby granted may be exercised only during the occurrence and continuance of any Default hereunder. Sellers shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 28. In addition the foregoing, each Seller agrees to execute a Power of Attorney in the form of Exhibit E hereto, to be delivered on the date hereof. Such Power of Attorney shall terminate when all obligations under the Program Documents have been satisfied and this Agreement has been terminated.

 

29.          Buyers May Act Through Administrative Agent

 

Each Buyer has designated the Administrative Agent for the purpose of performing any action hereunder, any such designation, however, shall not relieve any Buyer of any of its rights or obligations under this Agreement.

 

30.                               Indemnification; Obligations

 

a.             Sellers agree to hold Administrative Agent, Buyers and each of their respective Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) harmless from and indemnify each Indemnified Party (and will reimburse each Indemnified Party as the same is incurred) against any and all third-party liabilities, obligations, losses, damages, penalties, judgments, suits, costs, expenses and disbursements of any kind whatsoever, including, without limitation, reasonable fees and expenses of counsel (collectively, the “Indemnified Amounts”) of any kind which may be imposed upon, incurred by or asserted against Indemnified Party in any way relating to or arising out of this Agreement, any Transaction Request, any Program Agreement or any transaction contemplated hereby or thereby, except to the extent that any claim for Indemnified Amounts results from or relates to: (i) the gross negligence or willful misconduct of any Indemnified Party or (ii) a claim by one

 

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Indemnified Party against another Indemnified Party that is a Subsidiary of such Indemnified Party. Sellers also agree to reimburse each Indemnified Party for all reasonable expenses in connection with the enforcement of this Agreement and the exercise of any right or remedy provided for herein, any Transaction Request and any Program Agreement, including, without limitation, the reasonable fees and disbursements of counsel. Sellers’ agreements in this Section 30 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. Each Seller hereby acknowledges that its obligations hereunder are recourse obligations of such Seller and are not limited to recoveries each Indemnified Party may have with respect to the Purchased Mortgage Loans. Each Seller also agrees not to assert any claim against Administrative Agent, each Buyer or any of its Affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.

 

b.                                       Without limitation to the provisions of Section 4, if any payment of the Repurchase Price of any Transaction is made by Sellers other than on the then scheduled Repurchase Date thereto as a result of an acceleration of the Repurchase Date pursuant to Section 16 or for any other reason, Sellers shall, upon demand by Administrative Agent, pay to Administrative Agent on behalf of Buyers an amount sufficient to compensate Buyers for any losses, costs or expenses that they may reasonably incur as of a result of such payment.

 

c.                                        Without limiting the provisions of Section 30(a) hereof, if Sellers fail to pay when due any costs, expenses or other amounts payable by them under this Agreement, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of Sellers by Administrative Agent (subject to reimbursement by Sellers), in its sole discretion.

 

31.                               Counterparts

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in a portable document format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement.

 

32.                               Confidentiality

 

a.             Sellers’ Confidentiality Obligations. This Agreement and its terms, provisions, supplements and amendments, and notices hereunder, are proprietary

 

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to Administrative Agent and Buyers and shall be held by Sellers in strict confidence and shall not be disclosed to any third party without the written consent of Administrative Agent except for (i) disclosure to any Seller’s direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence, (ii) disclosure required by law, rule, regulation or order of a court or other regulatory body, or (iii) disclosure required by contracts with any Seller’s lenders and/or parties entering into, or contemplating the entering into, one or more transactions, including, without limitation, whole loan portfolio sales) with any Seller, and conducting due diligence in connection therewith; provided, however, that any such disclosure to any Seller’s lenders and/or such other parties shall be made subject to confidentiality agreements satisfactory to Administrative Agent, in Administrative Agent’s exercise of its reasonable discretion; provided, further, that Sellers shall provide to Administrative Agent copies of such contracts with such Seller’s lenders and/or such other parties requesting copies of this Agreement. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreement, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal income tax treatment of the Transactions, any fact relevant to understanding the federal tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal income tax treatment; provided that Sellers may not disclose the name of or identifying information with respect to Administrative Agent and Buyers or any pricing terms (including, without limitation, the Pricing Rate, Commitment Fee, Purchase Price Percentage, Purchase Price and any other fees specified in the Pricing Side Letter) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the purported or claimed federal income tax treatment of the Transactions and is not relevant to understanding the purported or claimed federal income tax treatment of the Transactions, without the prior written consent of the Administrative Agent.

 

b.             Administrative Agent’s and Buyers’ Confidentiality Obligations. Reports, notices and other communications hereunder issued or to be issued by Sellers or either of them (including, without limitation, personal information relating to individual Mortgagors), are confidential and shall be held by Administrative Agent and Buyers in confidence and shall not be disclosed to any third party without the written consent of Sellers, except for (i) disclosure to Administrative Agent’s and Buyers’ direct and indirect Affiliates and Subsidiaries, attorneys, or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence, (ii) disclosure required by law, rule, regulation or order of a court or other regulatory body (“Governmental Order”) or, only with respect to the names of Sellers, disclosure required by a rating agency in connection with any securities issued by Administrative Agent or an Affiliate of Administrative Agent, (iii) disclosure as Administrative Agent and Buyers deem appropriate in connection with the enforcement of Administrative Agent’s or Buyers’ rights hereunder or under any

 

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Transaction; provided, that Administrative Agent and Buyers shall reasonably cooperate with Sellers in their efforts to obtain a protective order or otherwise protect the confidentiality of such information for the benefit of Sellers, (iv) disclosure of any confidential terms that are in the public domain other than due to a breach of this covenant, (v) disclosure made to an assignee, participant, repledgee or any of their representatives, attorneys or accountants, but only to the extent such disclosure is necessary in connection with the transactions or performing rights or obligations hereunder; provided, that, any such disclosure under clauses (i) or (v) shall only be permitted if the recipient executed a confidentiality agreement reasonably acceptable to Sellers, it being understood that such agreement shall be deemed to be acceptable by Sellers if it contains terms at least as restrictive as those contained in this Section 32, or if such recipient is otherwise bound by law or ethical conduct to hold such information as confidential, and in each case, Administrative Agent and Buyers shall reasonably cooperate with Sellers in enforcing such confidentiality agreement or obligations, as applicable, for the benefit of Sellers.

 

33.          Recording of Communications

 

Administrative Agent, Buyers and each Seller shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its employees and those of the other party with respect to Transactions. Administrative Agent, Buyers and each Seller consent to the admissibility of such tape recordings in any court, arbitration, or other proceedings. The parties agree that a duly authenticated transcript of such a tape recording shall be deemed to be a writing conclusively evidencing the parties’ agreement.

 

34.          Reserved

 

35.          Periodic Due Diligence Review

 

Each Seller acknowledges that Administrative Agent has the right to perform continuing due diligence reviews with respect to such Seller and the Mortgage Loans, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and each Seller agrees that upon reasonable (but no less than three (3) Business Days) prior notice unless an Event of Default shall have occurred, in which case no notice is required, to such Seller, Administrative Agent or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession or under the control of Sellers and/or the Custodian. Provided that no Event of Default has occurred and is continuing, Administrative Agent agrees that it shall exercise commercially reasonable efforts, in the conduct of any such due diligence, to minimize any disruption to any Seller’s normal course of business. Each Seller also shall make available to Administrative Agent a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Mortgage Loans. Without limiting the generality of the foregoing, each Seller acknowledges that Administrative Agent on behalf of Buyers may purchase Mortgage Loans from Sellers based solely upon the information provided by Sellers to Administrative Agent in the Mortgage Loan

 

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Schedule and the representations, warranties and covenants contained herein, and that Administrative Agent, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans purchased in a Transaction, including, without limitation, ordering BPOs, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan. Administrative Agent may underwrite such Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Each Seller agrees to cooperate with Administrative Agent and any third party underwriter in connection with such underwriting, including, but not limited to, providing Administrative Agent and any third party underwriter with reasonable access to any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Sellers. Administrative Agent agrees that Sellers shall not be responsible for the payment of any out-of-pocket costs and expenses incurred by Administrative Agent in connection with Administrative Agent’s activities pursuant to this Section 35; provided, that if a Default or Event of Default shall have occurred, Administrative Agent shall have the right to perform due diligence, at the sole expense of Sellers.

 

36.          Authorizations

 

Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for the applicable Seller, Buyers or Administrative Agent, as the case may be, under this Agreement. Each Seller or Administrative Agent may amend Schedule 2 from time to time by delivering a revised Schedule 2 to the other party and expressly stating that such revised Schedule 2 shall replace the existing Schedule 2.

 

37.          Acknowledgment of Administration of Repurchase Agreement

 

Pursuant and subject to the other terms and conditions of this Agreement, including, without limitation, those concerning the identity of the Committed Buyer and Section 22 (Non assignability) of this Agreement, Administrative Agent may allocate to existing Buyers certain Purchased Mortgage Loans and the related Repurchase Assets and related Transactions. Administrative Agent shall update the Register as provided in Section 22 with respect to such allocation of Purchased Mortgage Loans. The Administrative Agent shall administer the provisions of this Agreement for the benefit of the Buyers. For the avoidance of doubt, all payments, notices, communications and agreements pursuant to this Agreement shall be delivered to, and entered into by, the Administrative Agent for the benefit of the Buyers. Furthermore, to the extent that the Administrative Agent exercises remedies pursuant to this Agreement, any of the Administrative Agent and/or any Buyer will have the right to bid on and/or purchase any of the Repurchase Assets pursuant to Section 16 (Remedies Upon Default). The benefit of all representations, rights, remedies and covenants set forth in the Agreement shall inure to the benefit of the Administrative Agent on behalf of each Buyer. All provisions of the Agreement shall survive the transfers contemplated herein (including any Repledge Transactions). Notwithstanding that multiple Buyers may purchase individual Mortgage Loans subject to Transactions entered into under this Agreement, all Transactions shall continue to be deemed a single Transaction and all of the Repurchase Assets shall be security for all of the Obligations hereunder.

 

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38.                               Reserved

 

39.                               Acknowledgement Of Anti-Predatory Lending Policies

 

Administrative Agent has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan.

 

40.                               Documents Mutually Drafted

 

Each Seller, the Administrative Agent and each of the Buyers agree that this Agreement and each other Program Agreement prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.

 

41.          General Interpretive Principles

 

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

 

a.             the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

 

b.             accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;

 

c.             references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

 

d.             a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

 

e.             the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;

 

f.             the term “include” or “including” shall mean without limitation by reason of enumeration;

 

g.             all times specified herein or in any other Program Agreement (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated;

 

h.             all references herein or in any Program Agreement to “good faith” means good faith as defined in Section 5-102(7) of the UCC as in effect in the State of New York; and

 

i.              an Event of Default that has been waived in writing shall be deemed not to be continuing.

 

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42.          Joint and Several

 

Sellers and Administrative Agent hereby acknowledge and agree that each Seller shall be jointly and severally liable for the full, complete and punctual performance and satisfaction of all obligations of either Seller under this Agreement. Accordingly, each Seller waives any and all notice of creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Administrative Agent upon such Seller’s joint and several liability. Each Seller waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon such Seller with respect to the Obligations. When pursuing its rights and remedies hereunder against either Seller, Administrative Agent may, but shall be under no obligation to, pursue such rights and remedies hereunder against either Seller or any other Person or against any collateral security for the Obligations or any right of offset with respect thereto, and any failure by Administrative Agent to pursue such other rights or remedies or to collect any payments from such Seller or any such other Person to realize upon any such collateral security or to exercise any such right of offset, or any release of such Seller or any such other Person or any such collateral security, or right of offset, shall not relieve such Seller of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Administrative Agent against such Seller.

 

43.          Conflicts

 

In the event of any conflict between the terms of this Agreement and any other Program Agreement, the documents shall control in the following order of priority: first, the terms of the Pricing Side Letter shall prevail, then the terms of this Agreement shall prevail, and then the terms of the other Program Agreements shall prevail.

 

44.          Bankruptcy Non-Petition

 

The parties hereby agree that they shall not institute against, or join any other person in instituting against, any Buyer that is a CP Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other similar proceeding under any federal or state bankruptcy or similar law, for one (1) year and one (1) day after the latest maturing commercial paper note issued by the applicable CP Conduit is paid in full.

 

45.          Limited Recourse

 

The obligations of each Buyer under this Agreement or any other Program Agreement are solely the corporate obligations of such Buyer. No recourse shall be had for the payment of any amount owing by any Buyer under this Agreement, or for the payment by any Buyer of any fee in respect hereof or any other obligation or claim of or against such Buyer arising out of or based on this Agreement, against any stockholder, partner, member, employee, officer, director or incorporator or other authorized person of such Buyer. In addition, notwithstanding any other provision of this Agreement, the Parties agree that all payment obligations of any Buyer that is a CP Conduit under this Agreement shall be limited recourse obligations of such Buyer, payable solely from the funds of such Buyer available for such purpose in accordance with its commercial paper program documents. Each party waives payment by such CP Conduit of any amount which such Buyer does not pay pursuant to the

 

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operation of the preceding sentence until the day which is at least one (1) year and one (1) day after the payment in full of the latest maturing commercial paper note (and waives any “claim” against such Buyer within the meaning of Section 101(5) of the Bankruptcy Code or any other debtor relief law for any such insufficiency until such date).

 

Notwithstanding anything in any Program Agreement to the contrary, including, without limitation, any of the waivers in this Section 45, CS Cayman shall be liable for all of the obligations of any CP Conduit under any of the Program Documents.

 

46.          Amendment and Restatement

 

Administrative Agent, as a Buyer, and Sellers entered into the Existing Master Repurchase Agreement. Administrative Agent, Sellers and Buyers desire to enter into this Agreement in order to amend and restate the Existing Master Repurchase Agreement in its entirety. The amendment and restatement of the Existing Master Repurchase Agreement shall become effective on the date hereof, and each of Administrative Agent, Sellers and Buyers shall hereafter be bound by the terms and conditions of this Agreement and the other Program Agreements. This Agreement amends and restates the terms and conditions of the Existing Master Repurchase Agreement, and is not a novation of any of the agreements or obligations incurred pursuant to the terms of the Existing Master Repurchase Agreement. Accordingly, all of the agreements and obligations incurred pursuant to the terms of the Existing Master Repurchase Agreement are hereby ratified and affirmed by the parties hereto and remain in full force and effect. For the avoidance of doubt, it is the intent of Administrative Agent, Sellers and Buyers that the security interests and liens granted in the Purchased Mortgage Loans and Repurchase Assets pursuant to Section 8 of the Existing Master Repurchase Agreement shall continue in full force and effect. All references to the Existing Master Repurchase Agreement in any Program Agreement or other document or instrument delivered in connection therewith shall be deemed to refer to this Agreement and the provisions hereof.

 

[Signature Page Follows]

 

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

 

	
CREDIT SUISSE FIRST   BOSTON MORTGAGE CAPITAL LLC, as Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Margaret Dellafera
    	
 
    	
 
    
	
 
    	
Name:
    	
Margaret   Dellafera
    	
 
    	
 
    
	
 
    	
Title:
    	
Vice   President
    	
 
    	
 
    

 

 

	
CREDIT SUISSE AG,   CAYMAN ISLANDS BRANCH,
   as a Buyer and a Committed Buyer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Oliver Nisenson
    	
 
    	
 
    
	
 
    	
Name:
    	
Oliver   Nisenson
    	
 
    	
 
    
	
 
    	
Title:
    	
Director
    	
 
    	
 
    

 

 

	
By:
    	
/s/   Elie Chau
    	
 
    	
 
    
	
 
    	
Name:
    	
Elie   Chau
    	
 
    	
 
    
	
 
    	
Title:
    	
Authorized   Signatory
    	
 
    	
 
    

 

 

	
ALPINE SECURITIZATION   LTD as a Buyer, by Credit Suisse AG, New York Branch as Attorney-in-Fact
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Oliver Nisenson
    	
 
    	
 
    
	
 
    	
Name:
    	
Oliver   Nisenson
    	
 
    	
 
    
	
 
    	
Title:
    	
Director
    	
 
    	
 
    

 

 

	
By:
    	
/s/   Elie Chau
    	
 
    	
 
    
	
 
    	
Name:
    	
Elie   Chau
    	
 
    	
 
    
	
 
    	
Title:
    	
Authorized   Signatory
    	
 
    	
 
    

 

 

Signature Page to Third Amended and Restated Master Repurchase Agreement

 

 

	
QUICKEN LOANS INC., as a Seller
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Jay Farner
    	
 
    	
 
    
	
 
    	
Name:
    	
Jay   Farner
    	
 
    	
 
    
	
 
    	
Title:
    	
CEO
    	
 
    	
 
    

 

 

	
ONE REVERSE MORTGAGE,   LLC, as a Seller
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Gregg Smith
    	
 
    	
 
    
	
 
    	
Name:
    	
Gregg   Smith
    	
 
    	
 
    
	
 
    	
Title:
    	
CEO,   President and COO
    	
 
    	
 
    

 

 

Signature Page to Third Amended and Restated Master Repurchase Agreement

 

 

SCHEDULE 1

 

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED MORTGAGE LOANS

 

Each Seller makes the following representations and warranties to Administrative Agent with respect to each Purchased Mortgage Loan that is subject to a Transaction hereunder and at all times such Purchased Mortgage Loan is subject to a Transaction hereunder that is in full force and effect. With respect to those representations and warranties which are made to the best of a Seller’s knowledge, if it is discovered by such Seller or Administrative Agent that the substance of such representation and warranty is inaccurate, notwithstanding such Seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation and warranty for purposes of determining Asset Value.

 

(a)           Mortgage Loan Schedule. The information set forth in the Mortgage Loan Schedule, including any diskette or other related data tapes sent to the Administrative Agent, is complete, true and correct in all material respects as of the Purchase Date.

 

(b)           Fee Simple. Except with respect to Second Lien Mortgage Loans, the Mortgage creates a first lien or a first priority ownership interest in an estate in fee simple in real property securing the related Mortgage Note (except as provided for in clause (k) below). With respect to a Second Lien Mortgage Loan, the Mortgage creates a second lien or a second priority ownership interest in an estate in fee simple in real property securing the related Mortgage Note (except as provided for in clause (k) below).

 

(c)                                  Reserved.

 

(d)           Payments Current.  All payments due on or prior to the Purchase Date for such Mortgage Loan have been made as of the Purchase Date, the Mortgage Loan is not thirty (30) days or more delinquent in payment and has not been dishonored; there are no material defaults under the terms of the Mortgage Loan; there has been no more than one delinquency of thirty (30) days or more during the immediately preceding twelve (12) month period.

 

(e)           No Outstanding Charges. All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents and any other charges payable on the Mortgage Loan which previously became due and owing are non-delinquent, have not become a lien upon the property or have been paid, or escrow funds have been established in an amount sufficient to pay for every such escrowed item which remains unpaid and which has been assessed but is not yet due and payable. No Seller has advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the Mortgaged Property subject to the Mortgage, directly or indirectly, for the payment of any amount required by the Mortgage Loan.

 

(f)            Original Terms Unmodified. The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any respect, except by written instruments which have been recorded to the extent any such recordation is required by law, or,

 

Schedule 1-1

 

necessary to protect the interest of Buyers. No instrument of waiver, alteration or modification has been executed, and no Mortgagor has been released, in whole or in part, from the terms thereof except in connection with an assumption agreement and which assumption agreement is part of the Mortgage File and the terms of which are reflected in the Mortgage Loan Schedule; the substance of any such waiver, alteration or modification has been approved by the issuer of any related primary mortgage insurance policy and title insurance policy, to the extent required by the related policies.

 

(g)           No Defenses. The Mortgage Note and the Mortgage are not subject to any right of rescission, set off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render the Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set off, counterclaim or defense, including the defense of usury, and no such right of rescission, set off, counterclaim or defense has been asserted with respect thereto; and the Mortgagor was not a debtor in any state or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated.

 

(h)           Hazard Insurance. All buildings or other customarily insured improvements upon the Mortgaged Property are insured against loss by fire, hazards of extended coverage and such other hazards as are provided for in the Agency Guides. All such standard hazard policies are in full force and effect and on the date of origination contained a standard mortgagee clause naming the applicable Seller and its successors in interest and assigns as loss payee and such clause is still in effect and all premiums due thereon have been paid. If required by the Flood Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration which policy conforms to Agency Guides (as defined below in this Schedule 1). The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost and expense, and upon the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from the Mortgagor.

 

(i)            Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with in all material respects.

 

(j)            No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled or subordinated, in whole or in part, or rescinded, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. No Seller has waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has any Seller waived any default resulting from any action or inaction by the Mortgagor.

 

(k)           Valid First or Second Lien. The related Mortgage is a valid, subsisting, enforceable and perfected first lien, or solely with respect to a Second Lien Mortgage Loan, a second lien, on the Mortgaged Property and, including all buildings on the Mortgaged Property

 

Schedule 1-2

 

and all installations and mechanical, electrical, plumbing, heating and air conditioning systems affixed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing securing the Mortgage Note’s original principal balance. The Mortgage and the Mortgage Note do not contain any evidence of any security interest or other interest or right thereto. Such lien is free and clear of all adverse claims, liens and encumbrances having priority over the first lien, or solely with respect to a Second Lien Mortgage Loans, a second lien, of the Mortgage subject only to, (1) the lien of non-delinquent current real property taxes, dues/taxes and assessments not yet due and payable, (2) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording which are acceptable to mortgage lending institutions generally and either (A) which are referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan, or (B) which do not adversely affect the Appraised Value of the Mortgaged Property as set forth in such appraisal, (3) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property or (4) solely with respect to a Second Lien Mortgage Loan, the related first lien. Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting, enforceable and perfected first lien and first priority security interest, or solely with respect to a Second Lien Mortgage Loan, a second lien and second priority security interest, on the property described therein, and the applicable Seller has the full right to sell and assign the same to the Administrative Agent.

 

(l)            Validity of Mortgage Documents; Full Disbursement of Proceeds. The Mortgage Note and the related Mortgage are original and genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in all respects in accordance with its terms subject to bankruptcy, insolvency, moratorium, reorganization and other laws of general application affecting the rights of creditors and by general equitable principles and the applicable Seller has taken all action necessary to transfer such rights of enforceability to the Administrative Agent. All parties to the Mortgage Note and the Mortgage had the legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have been duly and properly executed by such parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Seller or, to the best of such Seller’s knowledge, the Mortgagor or on the part of any other party involved in the origination of the Mortgage Loan. Except for HECM Loans, the proceeds of the Mortgage Loan, other than a home equity revolving line of credit, have been fully disbursed and there is no requirement for future advances thereunder, and, except for HECM Loans, any and all requirements as to completion of any on site or off-site improvements and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid or are in the process of being paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage (excluding refunds which may result from escrow analysis adjustments).With respect to any broker fees collected and paid on any of the Mortgage Loans, all broker fees have been properly assessed to the borrower and no claims will arise as to broker fees that are double charged and for which the borrower would be entitled to reimbursement.

 

Schedule 1-3

 

(m)          Ownership. The applicable Seller or its affiliate is the sole owner of record and holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage Note, and upon recordation a Buyer or its designee will be the owner of record of the Mortgage and the indebtedness evidenced by the Mortgage Note, and upon the sale of the Mortgage Loan to the Administrative Agent on behalf of the Buyers, the applicable Seller will retain the servicing file in trust for the Administrative Agent on behalf of Buyers only for the purpose of interim servicing and supervising the interim servicing of the Mortgage Loan. Upon the transfer and assignment to the Administrative Agent on behalf of Buyers on the Purchase Date, the Mortgage Loan, including the Mortgage Note and the Mortgage, were not subject to an assignment or pledge, and the applicable Seller had good and marketable title to and was the sole owner thereof and had full right to transfer and sell the Mortgage Loan to the Administrative Agent on behalf of Buyers free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest and has the full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign the Mortgage Loan pursuant to this Agreement and following the sale of the Mortgage Loan, the Administrative Agent on behalf of Buyers will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest. The applicable Seller intends to relinquish all rights to possess, control and monitor the Mortgage Loan, except for the purposes of interim servicing the Mortgage Loan as set forth in this Agreement.

 

(n)           Title Insurance. To the extent required pursuant to the Underwriting Guidelines, each Mortgage Loan is covered by an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance acceptable to Administrative Agent with respect to Non-Agency Non-QM Mortgage Loans and Non-Agency QM Mortgage Loans and Fannie Mae, Freddie Mac, FHA, GNMA, HUD or VA with respect to Agency Mortgage Loans or as required by an approved Take-out Investor insuring (subject to the exceptions contained in clause (k)(1), (2), (3) and (4) above) the applicable Seller, its successors and assigns, as to the first priority lien, or solely with respect to a Second Lien Mortgage Loan, second priority lien, of the Mortgage in the original principal amount of the Mortgage Loan. Where required by applicable state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. The applicable Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, such title insurance policy has been duly and validly endorsed to the Administrative Agent for the benefit of Buyers or the assignment to the Administrative Agent for the benefit of Buyers of such Seller’s interest therein does not require the consent of or notification to the insurer and such lender’s title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder of the related Mortgage, including any Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy.

 

(o)           No Defaults. There is no default, breach, violation or event of acceleration existing under the Mortgage or the related Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event permitting acceleration; and neither the Sellers nor any prior mortgagee has waived any default, breach, violation or event permitting acceleration.

 

Schedule 1-4

 

(p)           No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and, except for HECM Loans, no rights are outstanding that under law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to or equal to the lien of the related Mortgage.

 

(q)           Location of Improvements; No Encroachments. All improvements subject to the Mortgage which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property (and wholly within the project with respect to a condominium unit) and no improvements on adjoining properties encroach upon the Mortgaged Property except those which are insured against by the title insurance policy referred to in clause (m) above and all improvements on the property comply with all applicable zoning and subdivision laws and ordinances.

 

(r)            Origination; Payment Terms. The Mortgage Loan was originated by or for the Sellers or either one of them. The Mortgage Loan complies with all the terms, conditions and requirements of the applicable Seller’s Underwriting Guidelines in effect at the time of origination of such Mortgage Loan. With respect to each Mortgage Loan that is not a home equity revolving line of credit, the Mortgage Notes and Mortgages (exclusive of any riders) are on forms generally acceptable to Administrative Agent with respect to Non-Agency Non-QM Mortgage Loans and Non-Agency QM Mortgage Loans and to Fannie Mae, Freddie Mac, FHA, GNMA, HUD or VA with respect to Agency Mortgage Loans. With respect to home equity revolving line of credits, the Mortgage Notes, Mortgages and loan agreements are on forms created in accordance with the applicable Seller’s Underwriting Guidelines. The Mortgage Loan bears interest at the Mortgage Interest Rate set forth in the Mortgage Loan Schedule, and, except for HECM Loans and home equity revolving lines of credit, Monthly Payments under the Mortgage Note are due and payable on the first day of each month. The Mortgage contains the usual and enforceable provisions of the originator at the time of origination for the acceleration of the payment of the unpaid principal amount of the Mortgage Loan if the related Mortgaged Property is sold without the prior consent of the mortgagee thereunder.

 

(s)            No Condemnation Proceeding. The Mortgaged Property is not subject to any material damage by waste, fire, earthquake, windstorm, flood or other casualty. At origination of the Mortgage Loan there was, and there currently is, no proceeding pending for the total or partial condemnation of the Mortgaged Property. There have not been any condemnation proceedings with respect to the Mortgaged Property and there are no such proceedings scheduled to commence at a future date.

 

(t)            Customary Provisions. The related Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby. There is no homestead or other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage subject to applicable federal and state laws and judicial precedent with respect to bankruptcy and right of redemption.

 

Schedule 1-5

 

(u)           Deeds of Trust. If the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified if required under applicable law to act as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses, except as may be required by local law, are or will become payable by the Custodian or Administrative Agent to the trustee under the deed of trust, except in connection with a trustee’s sale or attempted sale after default by the Mortgagor.

 

(v)           Appraisal. Unless Fannie Mae, FHA, Freddie Mac, GNMA, HUD or VA requires otherwise, the Mortgage File contains either (i) to the extent permitted by the applicable Agency, a Property Inspection Waiver (as defined in the applicable Agency guidelines) or (ii) an appraisal of the related Mortgaged Property signed prior to the final approval of the mortgage loan application by a Qualified Appraiser (as defined below in this Schedule 1), who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae, FHA, Freddie Mac, GNMA, HUD or VA and Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated. The appraisal is in a form acceptable to Fannie Mae, FHA, Freddie Mac, GNMA, HUD or VA.

 

(w)          Doing Business. All parties which have had any interest in the Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (A) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (B) (1) organized under the laws of such state, or (2) qualified to do business in such state, or (3) federal savings and loan associations or national banks or a Federal Home Loan Bank or savings bank having principal offices in such state, or (4) not doing business in such state.

 

(x)           No Additional Collateral. The related Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to above and, except for Second Lien Mortgage Loans, such collateral does not serve as security for any other obligation.

 

(y)           Disclosure Materials. The Mortgagor was provided with all disclosure materials required by applicable law with respect to the making of such mortgage loans.

 

(z)           No Graduated Payments or Contingent Interests. The Mortgage Loan does not contain “graduated payment” or “shared appreciation” features; to the extent any Mortgage Loan contains any buydown provision, such buydown funds have been maintained and administered in accordance with, and such Mortgage Loan otherwise complies with, Fannie Mae/Freddie Mac requirements relating to buydown loans.

 

(aa)         No Defenses. The Mortgagor is not in bankruptcy or insolvent and no Seller has knowledge of any circumstances or condition which would cause the Mortgagor to file for bankruptcy or become insolvent.

 

Schedule 1-6

 

(bb)         Maturity. Except of HECM Loans, the Mortgage Loans have an original term to maturity of not more than thirty (30) years with, except for home equity revolving lines of credit, interest payable in arrears on the first day of each month. Other than with respect to Second Lien Mortgage Loans that are originated as a home equity revolving line of credit and except for HECM Loans, each Mortgage Note requires a monthly payment which is sufficient to fully amortize the original principal balance over the original term thereof and to pay interest at the related Mortgage Interest Rate. Except for HECM Loans, no Mortgage Loan contains terms or provisions which would result in negative amortization.

 

(cc)         Primary Mortgage Guaranty Insurance. Except for Conforming High CLTV Loans, FHA Loans, HECM Loans, VA Loans, RHS Loans and Mortgage Loans underwritten in accordance with the Lender Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an LTV greater than eighty percent (80%), the excess of the principal balance of the Mortgage Loan over seventy-five (75%) of the Appraised Value, with respect to a Refinanced Mortgage Loan (as defined below in this Schedule 1), or the lesser of the Appraised Value or the purchase price of the Mortgaged Property, with respect to a purchase money Mortgage Loan, is and will be insured as to payment defaults by a primary mortgage insurance policy issued by a Qualified Insurer. All provisions of such primary mortgage insurance policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. No action, inaction, or event has occurred and no state of facts exists that has, or will result in the exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to such a primary mortgage insurance policy obligates the Mortgagor thereunder to maintain the primary mortgage insurance policy and to pay all premiums and charges in connection therewith. The Mortgage Interest Rate for the Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such insurance premium.

 

(dd)         Transfer of Mortgage Loans. As to Mortgage Loans that are not Mortgage Loans registered on the MERS® System, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.

 

(ee)         Location and Type of Mortgaged Property. As to Mortgage Loans that are not secured by an interest in a leasehold estate, the Mortgaged Property is located in the state identified in the Mortgage Loan Schedule and consists of a single parcel of real property with a detached single family residence erected thereon, or a townhouse, or a two-to four-family dwelling, or an individual condominium unit in a condominium project, or an individual unit in a planned unit development or a de minimis planned unit development, provided, however, that no residence or dwelling is a single parcel of real property with a cooperative housing corporation erected thereon, or a mobile home. As of the date of origination, no portion of the Mortgaged Property was used for commercial purposes (other than the use of a portion of such Mortgaged Property as a home office), and since the date of origination no portion of the Mortgaged Property has been used for commercial purposes (other than the use of a portion of such Mortgaged Property as a home office).

 

(ff)          Disbursement. The date of the disbursement of the loan proceeds to or on behalf of the Mortgagor is no more than thirty (30) days prior to the date on which the Administrative Agent purchases the related Mortgage Loan pursuant to a Transaction hereunder.

 

Schedule 1-7

 

(gg)         No Prepayment Penalty.  No Mortgage Loan contains a prepayment penalty.

 

(hh)         Occupancy of the Mortgaged Property. As of the related Purchase Date, the Mortgaged Property was lawfully occupied under applicable law, and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities.

 

(ii)           Location and Type of Mortgaged Property. If the Mortgaged Property is a condominium unit or a planned unit development (other than a de minimis planned unit development), or stock in a cooperative housing corporation, such condominium, cooperative or planned unit development project meets the Fannie Mae’s eligibility requirements as set forth in the Fannie Mae Guides.

 

(jj)           Environmental Compliance. To the best of each Seller’s knowledge, there does not exist on the related Mortgage Property any hazardous substances, hazardous wastes or solid wastes, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., or other applicable federal, state or local environmental laws, including, without limitation, asbestos, in each case in excess of the permitted limits and allowances set forth in such environmental laws to the extent such laws are applicable to the Mortgaged Property. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any environmental law, rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property.

 

(kk)         Servicemembers Civil Relief Act. The Mortgagor has not notified the Sellers of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.

 

(ll)           Construction or Rehabilitation of Mortgaged Property. No Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property.

 

(mm)      No Defense to Insurance Coverage. No action has been taken or failed to be taken by the Sellers on or prior to the Purchase Date which has resulted or will result in an exclusion from, denial of, or defense to coverage under any Primary Mortgage Insurance Policy (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of the Sellers, or for any other reason under such coverage.

 

Schedule 1-8

 

(nn)         Collection Practices. Each Mortgage Loan has been serviced in all material respects in compliance with Accepted Servicing Practices.

 

(oo)         Origination. The Mortgage Loan was originated by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar institution which is supervised and examined by a federal or state authority.

 

(pp)         Ground Leases. With respect to any ground lease to which a Mortgaged Property may be subject: (i) a true, correct and complete copy of the ground lease and all amendments, modifications and supplements thereto is included in the servicing file, and the Mortgagor is the owner of a valid and subsisting leasehold interest under such ground lease; (ii) such ground lease is in full force and effect, unmodified and not supplemented by any writing or otherwise except as contained in the Mortgage File; (iii) all rent, additional rent and other charges reserved therein have been fully paid to the extent payable as of the Purchase Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of the leasehold estate, subject to any sublease; (v) the Mortgagor is not in default under any of the terms of such ground lease, and there are no circumstances which, with the passage of time or the giving of notice, or both, would result in a default under such ground lease; (vi) the lessor under such ground lease is not in default under any of the terms or provisions of such ground lease on the part of the lessor to be observed or performed; (vii) the lessor under such ground lease has satisfied any repair or construction obligations due as of the Purchase Date pursuant to the terms of such ground lease; (viii) the execution, delivery and performance of the Mortgage do not require the consent (other than those consents which have been obtained and are in full force and effect) under, and will not contravene any provision of or cause a default under, such ground lease; (ix) the ground lease term extends, or is automatically renewable, for at least five years beyond the maturity date of the related Mortgage Loan; and (x) the Administrative Agent has the right to cure defaults on the ground lease.

 

(qq)                          Reserved.

 

(rr)                                Lost Mortgage Note.  With respect to any Mortgage Loan as to which an affidavit has been delivered to the Administrative Agent certifying that the original Mortgage Note has been lost or destroyed and not been replaced, if such Mortgage Loan is subsequently in default, the enforcement of such Mortgage Loan will not be materially adversely affected by the absence of the original Mortgage Note.

 

(ss)          Delivery of Documents. Except as provided in Section 3, the Mortgage Note, the Mortgage, the Assignment of Mortgage and the other documents set forth in the Mortgage File and required to be delivered on the related Purchase Date have been delivered to the Administrative Agent or its designee.

 

(tt)           True, Accurate and Complete Information. To the best of each Seller’s knowledge, all information supplied by, on behalf of, or concerning the Mortgagor is true, accurate and complete and does not contain any statement that is or will be inaccurate or misleading in any material respect.

 

Schedule 1-9

 

(uu)                          Reserved.

 

(vv)                          Disclosure Materials.  The Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans.

 

(ww)       No Non-Performing Mortgage Loans. No Purchased Mortgage Loan is a Non-Performing Mortgage Loan.

 

(xx)         Loan-to-Value Ratio. Except for Conforming High CLTV Loans, no Mortgage Loan had a Loan-to-Value Ratio at the time of origination of more than one hundred percent (100%). Except for Conforming High CLTV Loans, no Mortgage Loan had a combined Loan-to-Value Ratio at the time of origination of more than one hundred percent (100%).

 

(yy)         Negative Amortization. Except for HECM Loans, no Mortgage Loan provides for negative amortization.

 

(zz)         Home Ownership and Equity Protection Act of 1994. None of the Mortgage Loans are subject to the Home Ownership and Equity Protection Act of 1994 or any comparable state or local law.

 

(aaa)      Single-Premium Credit Insurance Policies. None of the proceeds of the Mortgage Loan were used to finance single-premium credit insurance policies.

 

(bbb)      Texas Home Equity Loans. With respect to any Mortgage Loan which is a Texas Home Equity Loan (as defined below in this Schedule 1), any and all requirements of Section 50, Article XVI of the Texas Constitution applicable to Texas Home Equity Loans which were in effect at the time of the origination of the Mortgage Loan have been complied with. Specifically, without limiting the generality of the foregoing,

 

(i)            all fees paid by the owner of the Mortgaged Property or such owner’s spouse, to any person, that were necessary to originate, evaluate, maintain, record, insure or service the Mortgage Loan are reflected in the closing statement for such Mortgage Loan;

 

(ii)           the Mortgage Loan was closed only at the office of the mortgage lender, an attorney at law, or a title company;

 

(iii)          the mortgagee has not been found by a federal regulatory agency to have engaged in the practice of refusing to make loans because the applicants for the loans reside or the property proposed to secure the loans is located in a certain area;

 

(iv)          the owner of the Mortgaged Property was not required to apply the proceeds of the Mortgage Loan to repay another debt except debt secured by the Mortgaged Property or debt to a lender other than the mortgagee;

 

(v)           the owner of the Mortgaged Property did not sign any documents or instruments relating to the Mortgage Loan in which blanks were left to be filled in; and

 

Schedule 1-10

 

(vi)          if discussions between the mortgagee and the Mortgagor were conducted primarily in a language other than English, the mortgagee provided to the owner of the Mortgaged Property, prior to closing, a copy of the notice required by Section 50(g), Article XVI of the Texas Constitution translated into the written language in which the discussions were conducted.

 

(ccc)       Home Equity Mortgage Loans. With respect to any Mortgage Loan that is a home equity revolving line of credit (a) the minimum Monthly Payment with respect to such loan is not less than the interest accrued at the applicable Mortgage Interest Rate on the average daily outstanding principal balance during the billing cycle relating to the date on which such minimum Monthly Payment is due; and (b) such home equity revolving line of credit accrues interest at an adjustable Mortgage Interest Rate computed on the actual number of days in a billing cycle and a 360-day year.

 

(ddd)      Qualified Mortgage. Other than (i) any type of Mortgage Loan exempted from the requirements of 12 CFR 1026.43, or (ii) such other Purchased Mortgage Loans as Administrative Agent may, from time to time, agree in writing to exclude from this representation, each Purchased Mortgage Loan for which the loan application was taken on or after January 10, 2014 shall (a) comply with 12 CFR 1026.43 and (b) except with respect to Non-Agency Non-QM Mortgage Loans or as otherwise approved in writing by Administrative Agent in its sole discretion, be a Qualified Mortgage Loan; provided, however, that with respect to each Purchased Mortgage Loan subject to the Schwab Purchase Agreement, such Purchased Mortgage Loan need only comply with sub-clause (a).

 

(eee)       TRID Compliance.  With respect to each Mortgage Loan where the Mortgagor’s loan application for the Mortgage Loan was taken on or after October 3, 2015, such Mortgage Loan was originated in compliance with the TILA-RESPA Integrated Disclosure Rule.

 

(fff)        Notwithstanding any of the foregoing to the contrary, each of the representations and warranties set forth in this Schedule 1 with respect to Conforming High CLTV Loans (but only as to such Conforming High LTV Loans) are modified so that (i) the only representations and warranties made by Sellers with respect to such Conforming High CLTV Loans are that they meet the applicable Agency requirements for such Conforming High CLTV Loans, as modified by any variance received by either Seller from the related Agency and (ii) any additional or inconsistent covenant, representation or warranty in the Program Agreements is deemed deleted and waived with respect to Conforming High CLTV Loans.

 

For the purposes of this Schedule 1, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

 

“Agency Guides”:  The Fannie Mae Guides, the Freddie Mac Guides and the Ginnie Mae Guides, as applicable.

 

“Fannie Mae Guides”: The Fannie Mae Sellers’ Guide and the Fannie Mae Servicers’ Guide and all amendments or additions thereto, including, but not limited to, future updates thereof.

 

Schedule 1-11

 

“FIRREA”: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended.

 

“Freddie Mac Guides”: The Freddie Mac Sellers’ Guide and the Freddie Mac Servicers’ Guide and all amendments or additions thereto, including, but not limited to, any future updates thereof.

 

“Ginnie Mae Guides”: The Ginnie Mae Issuer and Servicer’s Guide and all amendments or additions thereto, including, but not limited to, future updates thereof.

 

“Lender Paid Mortgage Insurance Policy Program or LPMI Policy”: A program or policy in which, for any Mortgage Loan underwritten with an LTV greater than eighty percent (80%), the owner or servicer of such Mortgage Loan is responsible for the premiums associated with the mortgage insurance policy.

 

“Loan-to-Value Ratio” or “LTV”: With respect to any Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan to (i) the Appraised Value of the related Mortgaged Property at origination with respect to a Refinanced Mortgage Loan, and (ii) the lesser of the Appraised Value of the related Mortgaged Property at origination or the purchase price of the related Mortgaged Property with respect to all other Mortgage Loans.

 

“Qualified Appraiser”: With respect to each Mortgage Loan, an appraiser, duly appointed by the applicable Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Fannie Mae, FHA, Freddie Mac, GNMA, HUD or VA and Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.

 

“Refinanced Mortgage Loan”: A Mortgage Loan which was made to a Mortgagor who owned the Mortgaged Property prior to the origination of such Mortgage Loan and the proceeds of which were used in whole or part to satisfy an existing mortgage.

 

“Texas Home Equity Loan”: A mortgage originated under the provisions of Section 50(a)(6), Article XVI of the Texas Constitution, which allow a borrower to take equity out of a homestead property under certain conditions.

 

Schedule 1-12

 

SCHEDULE 2

 

AUTHORIZED REPRESENTATIVES

 

QUICKEN LOANS NOTICES

 

	
Name:
    	
Julie Booth
    	
 
    	
Address:
    	
Quicken Loans Inc.
    
	
Telephone:
    	
(313) 373-7968
    	
 
    	
 
    	
1050 Woodward Avenue
    
	
Facsimile:
    	
(877) 380-4048
    	
 
    	
 
    	
Detroit, Michigan 48226-1906
    

 

SELLER AUTHORIZATIONS

 

Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Quicken Loans under this Agreement:

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
William Emerson
    	
 
    	
Vice Chairman
    	
 
    	
/s/ William Emerson
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jay Farner
    	
 
    	
CEO
    	
 
    	
/s/ Jay Farner
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Robert Walters
    	
 
    	
President and COO
    	
 
    	
/s/ Robert Walters
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
William Banfield
    	
 
    	
EVP, Capital Markets
    	
 
    	
/s/ William Banfield
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Julie Booth
    	
 
    	
CFO & Treasurer
    	
 
    	
/s/ Julie Booth
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Angelo V. Vitale
    	
 
    	
Secretary, Executive Vice President and General   Counsel
    	
 
    	
/s/ Angelo V. Vitale
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Rob Wilson
    	
 
    	
Vice President, Treasury
    	
 
    	
/s/ Rob Wilson
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jennifer (Becky) Vosler
    	
 
    	
Director of Treasury Operations
    	
 
    	
/s/ Jennifer (Becky) Vosler
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Julie Erhardt
    	
 
    	
Team Leader, Treasury Operations
    	
 
    	
/s/ Julie Erhardt
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Renee Jones
    	
 
    	
Senior Treasury Operations Analyst
    	
 
    	
/s/ Renee Jones
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sarah Holtz
    	
 
    	
Senior Treasury Operations Analyst
    	
 
    	
/s/ Sarah Holtz
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Danny Mahoney
    	
 
    	
Treasury Operations Analyst
    	
 
    	
/s/ Danny Mahoney
    

 

Schedule 2-1

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Duane Kniffen
    	
 
    	
Vice President, Capital Markets
    	
 
    	
/s/ Duane Kniffen
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jessica Goers
    	
 
    	
Director, Transaction Management
    	
 
    	
/s/ Jessica Goers
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Matt Boylan
    	
 
    	
Transaction Manager
    	
 
    	
/s/ Matt Boylan
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jonathan Leija
    	
 
    	
Transaction Manager
    	
 
    	
/s/ Jonathan Leija
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Mike Hoover
    	
 
    	
Transaction Manager
    	
 
    	
/s/ Mike Hoover
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Stephanie Milici
    	
 
    	
Transaction Manager
    	
 
    	
/s/ Stephanie Milici
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Michael Codd
    	
 
    	
Team Leader, Capital Markets
    	
 
    	
/s/ Michael Codd
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Brandon Janness
    	
 
    	
Team Leader, Capital Markets
    	
 
    	
/s/ Brandon Janness
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Heather McPherson
    	
 
    	
Team Leader, Capital Markets
    	
 
    	
/s/ Heather McPherson
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jamie Licavoli
    	
 
    	
Dir. Post Closing
    	
 
    	
/s/ Jamie Licavoli
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Daniel Domagala
    	
 
    	
Team Captain, Capital Markets
    	
 
    	
/s/ Daniel Domagala
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meredith Michalec
    	
 
    	
Collateral Coordinator
    	
 
    	
/s/ Meredith Michalec
    

 

Schedule 2-2

 

ONE REVERSE NOTICES

 

	
Name:
    	
Gregg Smith
    	
 
    	
Address:
    	
One Reverse Mortgage, LLC
    
	
Telephone:
    	
(858) 652-4724
    	
 
    	
 
    	
9920 Pacific Heights Blvd.
    
	
Facsimile:
    	
(877) 382-7342
    	
 
    	
 
    	
Suite 350
    
	
 
    	
 
    	
 
    	
 
    	
San Diego, California 92121
    

 

SELLER AUTHORIZATIONS

 

Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for One Reverse under this Agreement:

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
William Emerson
    	
 
    	
Manager
    	
 
    	
/s/ William Emerson
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Jay Farner
    	
 
    	
Chairman
    	
 
    	
/s/ Jay Farner
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Gregg Smith
    	
 
    	
Chief Executive Officer, President and Chief   Operating Officer
    	
 
    	
/s/ Gregg Smith
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Derek Marks
    	
 
    	
Director, Capital Markets
    	
 
    	
/s/ Derek Marks
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Glaucia Boutte
    	
 
    	
VP, Investor Relations
    	
 
    	
/s/ Glaucia Boutte
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Amy Christensen
    	
 
    	
Controller
    	
 
    	
/s/ Amy Christensen
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
William Banfield
    	
 
    	
EVP, Capital Markets
    	
 
    	
/s/ William Banfield
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Julie Booth
    	
 
    	
Chief Financial Officer & Treasurer
    	
 
    	
/s/ Julie Booth
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Angelo V. Vitale
    	
 
    	
Secretary/Corporate Counsel
    	
 
    	
/s/ Angelo V. Vitale
    

 

Schedule 2-3

 

ADMINISTRATIVE AGENT AND BUYER AUTHORIZATIONS

 

Any of the persons whose signatures and titles appear below, including any other authorized officers, are authorized, acting singly, to act for Administrative Agent and/or Buyers under this Agreement:

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Margaret Dellafera
    	
 
    	
Vice President
    	
 
    	
/s/ Margaret Dellafera
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Elie Chau
    	
 
    	
Vice President
    	
 
    	
/s/ Elie Chau
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Deirdre Harrington
    	
 
    	
Vice President
    	
 
    	
/s/ Deirdre Harrington
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Robert Durden
    	
 
    	
Vice President
    	
 
    	
/s/ Robert Durden
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ronald Tarantino
    	
 
    	
Vice President
    	
 
    	
/s/ Ronald Tarantino
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Michael Marra
    	
 
    	
Vice President
    	
 
    	
/s/ Michael Marra
    

 

 

SCHEDULE 3

 

LITIGATION OF SELLERS

 

I. Ordinary Course of Business Litigation

 

As a residential mortgage lender originating, closing and servicing loans in all 50 states, Quicken Loans Inc. (and its Subsidiaries) may, at any point in time, be named as a party to dozens of legal proceedings which arise in the ordinary course of business, such as actions alleging improper lending practices, improper servicing, quiet title actions, improper foreclosure practices, violations of consumer protection laws, etc. and on account of consumer bankruptcies. In many of these actions, Quicken Loans (and its Subsidiaries) may not be the real party of interest (because Quicken Loans is not the servicer of the loan or the holder of the note) but it may appear in the pleadings because it is in the chain of title to property over which there may be a dispute. Such matters are turned over to the servicer of the loan for those loans Quicken Loans or its Subsidiary do not service. In other cases, such as lien avoidance cases brought in bankruptcy, Quicken Loans or its Subsidiary are insured by title insurance and the case is turned over to the title insurer who tenders our defense.

 

As to other matters that arise in the ordinary course, management does not believe that the amount of liability, if any, for any of the pending matters individually or in the aggregate will materially affect Quicken Loans’ consolidated financial position in a material way. However, regardless of the outcome of this or other matters referred to herein, litigation can have a significant effect on Quicken Loans and its Subsidiaries for other reasons such as defense costs, diversion of management focus and resources, and other factors. To the best of Quicken Loans’ information and belief, there are no outstanding judgments, liens or orders that have not been satisfied.

 

II. Non-Ordinary Course of Business Litigation

 

	
Case Title
    	
 
    	
Court
    	
 
    	
Case Number
    	
 
    	
Nature of
   Action
    	
 
    	
Description of Claims
    	
 
    	
Date
   Served
    
	
United States of America vs. Quicken Loans Inc.
    	
 
    	
US District Court, Eastern District, Michigan
    	
 
    	
16-cv-14050
    	
 
    	
False Claims Act
    	
 
    	
The U.S. claims that QL violated the False Claims   Act by falsely certifying that FHA loans made by Quicken Loans met FHA   underwriting requirements.
    	
 
    	
4/23/2015
    
	
Alex Jacobs vs. Quicken Loans Inc.
    	
 
    	
US District Court, Southern District, Florida
    	
 
    	
15-cv-81386
    	
 
    	
TCPA
    	
 
    	
Putative class action alleges violations of the   Telephone Consumer Protection Act by claiming QL used prerecorded voice   messaging and automatic dialers for marketing purposes on cell phones without   consent.
    	
 
    	
10/8/2015
    
	
Residential Funding Company vs. Quicken Loans   Inc., et al.
    	
 
    	
District Court, Hennepin County, Minnesota
    	
 
    	
14-cv-3111
    	
 
    	
Breach of Contract
    	
 
    	
Plaintiff asserts claims for repurchase or   indemnification based on origination and underwriting errors.
    	
 
    	
12/16/2013
    

 

Schedule 3-1

 

	
Case Title
    	
 
    	
Court
    	
 
    	
Case Number
    	
 
    	
Nature of
   Action
    	
 
    	
Description of Claims
    	
 
    	
Date
   Served
    
	
Deutsche Bank National Trust Company, solely as   Trustee of the Harborview Mortgage Loan Trust (2007-7) vs. Quicken Loans Inc.
    	
 
    	
Supreme Court, New York County, New York
    	
 
    	
13-653048
    	
 
    	
Breach of Contract
    	
 
    	
Plaintiff-trustee, on behalf of Freddie Mac, claims   that Quicken Loans breached a contract to sell loans consistent with certain   representations and warranties and failed to repurchase loans when required. 
    
   * Notice of Appeal filed by Plaintiff, Deutsche Bank National Trust Company.
    	
 
    	
8/30/2013
    
	
Phillip Alig, et al. vs. Quicken Loans Inc., et   al.
    	
 
    	
US District Court, Northern District, West Virginia
    	
 
    	
11-c-428
    	
 
    	
Lender Liability
    	
 
    	
Class action lawsuit alleging violation of   state consumer protection statutes for providing homeowner’s estimated values   to appraisers.
    	
 
    	
6/25/2012
    
	
Eileen Nece vs. Quicken Loans
    	
 
    	
United States District Court Middle District of   Florida
    	
 
    	
8:16-cv-02605- SDM-TBM
    	
 
    	
Lender Liability
    	
 
    	
Putative class action alleges violations of the   Telephone Consumer Protection Act by claiming: (a) QL called her,   without express consent, on her landline using a prerecorded message;   (b) QL called her, without express consent, even though her number was   on the national DNC list; (c) QL called her without having procedures in   place for maintaining an internal DNC list; and (d) QL failed to timely   opt her out.
    	
 
    	
9/8/2016
    
	
Re/Max, LLC vs. Quicken Loans Inc.
    	
 
    	
US District Court, Colorado
    	
 
    	
16-CV-02357- CMA
    	
 
    	
Breach of Contract
    	
 
    	
Breach of contract claim alleging that RE/MAX   fulfilled their duties under the terms of the contract and that Quicken Loans   failed to perform its obligations, namely, to make payment for services   provided.
    	
 
    	
9/20/2016
    

 

Schedule 3-2

 

	
Case Title
    	
 
    	
Court
    	
 
    	
Case Number
    	
 
    	
Nature of
   Action
    	
 
    	
Description of Claims
    	
 
    	
Date
   Served
    
	
Tamika McLemore vs. Quicken Loans Inc.
    	
 
    	
US District Court, Michigan
    	
 
    	
16-cv-14397
    	
 
    	
TCPA
    	
 
    	
Plaintiff alleges violation of the Telephone   Consumer Protection Act by claiming: (a) QL used prerecorded messages   when calling her, (b) QL called her using an autodialer, and (c) QL   called her despite the fact that her number was on the National DNC list.   McLemore claims that she never provided express written consent for QL to   contact her using any of the methods described above.
    	
 
    	
12/23/2016
    

 

III. Regulatory and Administrative Matters

 

As a non-depository mortgage banker, Quicken Loans (and its Subsidiaries) are regulated by and subject to various state agencies that oversee and regulate (a) mortgage lending and the activities of bank and/or non-bank financial institutions and/or (b) insurance agency / escrow agent activities and practices. These state agencies are generally authorized to: issue licenses or registrations where state law requires; conduct periodic on-site or remote audits or examinations of the regulated institution’s books, files and practices; investigate consumer complaints; issue findings of audit or compliance variances that may require refunds to borrowers for charges beyond those permitted under the state’s laws or regulations; assess fines or penalties if administrative rules are not adhered to, and/or require other corrective actions to be taken. These agencies also have the authority to seek revocation of an institution’s or individual’s license or registration to operate as a mortgage lender or loan originator in the state. In the ordinary course of business and in any given year, Quicken Loans (and its Subsidiaries) participate in and respond to numerous regular periodic state examinations, while at the same time responding to examination findings from other states. In some instances, Quicken Loans (and its Subsidiaries) may dispute the state agency’s findings and/or attempt to reconcile our differences. In other instances Quicken Loans (and its Subsidiaries) may undertake corrective action before being required to do so by the state regulator. In some states, the state’s attorney general may also investigate consumer complaints regarding mortgage lending and issue subpoenas, commence informal inquiries or formal investigations. As a licensed mortgage banker, we are in the ordinary course of business, subject to such inquiries and investigations. Quicken Loans and its Subsidiaries have thirty team members on its legal/compliance team consisting of in-house lawyers, paralegals and compliance personnel who manage this part of the business. Although Quicken Loans (and its Subsidiaries) may currently be subject to various state examinations and consumer complaint inquiries, management does not believe the outcomes of these examinations or inquiries, individually or in the aggregate, will materially affect Quicken Loans’ consolidated financial position or operations in a material way.

 

Dated:  May 24, 2017

 

Schedule 3-3

 

SCHEDULE 4

 

EXECUTIVE MANAGEMENT & OFFICES

 

QUICKEN LOANS INC.

 

BOARD OF DIRECTORS

 

Daniel Gilbert, Chairman

 

OFFICERS

 

	
Jay Farner,
    	
Chief Executive Officer
    
	
Robert Walters
    	
President and Chief Operating Officer
    
	
Julie Booth
    	
Chief Financial Officer & Treasurer
    
	
William Banfield
    	
EVP, Capital Markets
    
	
Angelo V. Vitale
    	
Secretary, Executive Vice President and General   Counsel
    
	
Duane Kniffen
    	
Vice President, Capital Markets
    

 

 

CHIEF EXECUTIVE OFFICES

 

Quicken Loans Inc.

1050 Woodward Avenue

Detroit, Michigan 48226-1906

 

ONE REVERSE MORTGAGE, LLC

 

MANAGERS

 

William Emerson

 

OFFICERS

 

	
Jay Farner
    	
Chairman
    
	
Richard Mandell
    	
Chief Executive Officer
    
	
Gregg Smith
    	
President & Chief Operating Officer
    
	
Glaucia Somariva
    	
Vice President Investor Relations
    

 

CHIEF EXECUTIVE OFFICES

 

One Reverse Mortgage, LLC

644 Woodward Avenue

Detroit, Michigan 48226

 

Schedule 4-1

 

SCHEDULE 5

 

TRADE NAMES OF QUICKEN LOANS

 

Assume Names (DBA’s)

 

QLC PORTFOLIO SOLUTIONS

THE MORTGAGE EXPERTS

FRESH START

ROCK FINANCIAL INSURANCE AGENCY

ROCK FINANCIAL SERVICES

ROCK FINANCIAL

AMERICA’S HOME LOAN EXPERTS

FRESH START FINANCIAL SERVICES

LENDER FOR LIFE

ROCK FINANCIAL SECURITIES

ROCK FINANCIAL MORTGAGE

ROCK FINANCIAL LOANS

ROCK FINANCIAL BROKERAGE

QUICKENLOANS.COM

QUICKEN LOANS

POWER BUYER

ROCK FINANCIAL REAL ESTATE

ROCK FINANCIAL, A DIVISION OF QUICKEN LOANS

ROCK FINANCIAL, A QUICKEN LOANS COMPANY

ROCK HOME LOANS

ROCK LOAN

ROCK FINANCIAL REALTY

ROCK MORTGAGE

ROCKETLOAN

ROCKFINANCIAL.COM

SMARTARM

WWW.QUICKENLOANS.COM

WWW.ROCKFINANCIAL.COM

MICHIGAN CALL

FRESH START LOAN CENTER

 

Schedule 5-1

 

EXHIBIT A

 

RESERVED

 

A-1

 

EXHIBIT B

 

RESERVED

 

B-1

 

EXHIBIT C

 

MORTGAGE LOAN SCHEDULE

 

MORTGAGE LOAN CHARACTERISTICS

 

1.                                      Seller’s Mortgage Loan identifying number;

 

2.                                      the Mortgagor’s and Co-Mortgagor’s name;

 

3.                                      the street address of the Mortgaged Property including the city, state, county, and the zip code;

 

4.                                      a code indicating whether the Mortgaged Property is a single family residence, a 2-4 family dwelling, a PUD, a townhouse or a unit in a high-rise or low-rise condominium project;

 

5.                                      a code indicating the type of Mortgage Loan (e.g. Alt-A Mortgage Loan, Wet-Ink Mortgage Loan, etc.)

 

6.                                      the number of units for all Mortgaged Properties;

 

7.                                      a code indicating whether the loan is an adjustable rate or fixed rate Mortgage Loan;

 

8.                                      a code indicating whether the loan is a FHA, VA or conventional Mortgage Loan;

 

9.                                      a code indicating the lien status of the Mortgage Loan;

 

10.                               the loan-to-value ratio at origination;

 

11.                               the combined loan-to-value ratio at origination, if applicable;

 

12.                               the Mortgage Interest Rate at the time of origination;

 

13.                               the loan approval/commitment date;

 

14.                               the original principal amount of the Mortgage Loan;

 

15.                               the original monthly principal and interest;

 

16.                               the original interest rate;

 

17.                               the original date of the Mortgage Note;

 

18.                               the first Payment Date;

 

19.                               the maturity date;

 

C-1

 

20.                               the certificate number for each loan with primary mortgage insurance;

 

21.                               the Mortgage Loan purpose type;

 

22.                               the Mortgagor’s and Co-Mortgagor’s FICO score;

 

23.                               Mortgagor Social Security Number;

 

24.                               co-Mortgagor Social Security Number;

 

25.                               Margin;*

 

26.                               life floor;*

 

27.                               index type;*

 

28.                               initial rate floor;*

 

29.                               periodic rate cap;*

 

30.                               life cap;* and

 

31.                               first interest rate adjustment date.*

 

* If applicable.

 

C-2

 

EXHIBIT D

 

RESERVED

 

D-1

 

 

EXHIBIT E

 

FORM OF POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS, that [             ] (“Seller”) hereby irrevocably constitutes and appoints Credit Suisse First Boston Mortgage Capital LLC (“Administrative Agent”) and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Administrative Agent’s discretion in accordance with the terms of the Third Amended and Restated Master Repurchase Agreement (as amended, restated, supplemented or otherwise modified from time to time) dated May 24, 2017 (the “Agreement”), for the purpose of carrying out the terms of the Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or reasonably desirable to accomplish the purposes of the Agreement, and, without limiting the generality of the foregoing, Seller hereby gives Administrative Agent the power and right, on behalf of Seller, without assent by, but with notice to, Seller, if permitted under the terms of the Agreement to do the following, for the purpose of:

 

(a)                                 in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Administrative Agent on behalf of certain Buyers under the Agreement (the “Assets”) and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Administrative Agent for the purpose of collecting any and all such moneys due with respect to any assets whenever payable;

 

(b)                                 to pay or discharge taxes and liens levied or placed on or threatened against the Assets;

 

(c) (i)                    to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Administrative Agent or as Administrative Agent shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against Seller with respect to any Assets; (vi) to settle, compromise or adjust any suit, action or proceeding described in clause (v) above and, in connection therewith, to give such discharges or releases as Administrative Agent may in its sole good faith discretion deem appropriate; and (vii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Administrative Agent were the absolute owner thereof for all purposes, and to do, at Administrative Agent’s option and Seller’s expense, at any time, and from time to time, all acts and things which Administrative Agent in its sole good faith discretion deems necessary to protect, preserve or realize upon the Assets and Administrative Agent’s Liens thereon and to effect the intent of the Agreement, all as fully and effectively as Seller might do;

 

D-1

 

(d)                                 for the purpose of carrying out the transfer of servicing with respect to the Assets from Seller to a successor servicer appointed by Administrative Agent in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives Administrative Agent the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Administrative Agent in its sole discretion; and

 

(e)                                  for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.

 

Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable, unless as otherwise provided in the Agreement. This power of attorney amends, restates and supersedes any previous power of attorney between Seller and Administrative Agent.

 

Any capitalized term used but not defined herein shall have the meaning assigned to such term in the Agreement.

 

Seller also authorizes Administrative Agent, from time to time, to execute, in connection with any sale provided for in the Agreement, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.

 

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

 

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND ADMINISTRATIVE AGENT ON ITS OWN BEHALF AND ON BEHALF OF ADMINISTRATIVE AGENT’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES FOLLOW.]

 

D-2

 

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and Seller’s seal to be affixed this        day of             , 201   .

 

	
 
    	
[QUICKEN LOANS INC.] [ONE   REVERSE MORTGAGE, LLC]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Power of Attorney

 

 

	
STATE   OF
    	
)
    
	
 
    	
)      ss.:
    
	
COUNTY   OF
    	
)
    

 

On the        day of             , 201   before me, a Notary Public in and for said State, personally appeared                                 , known to me to be                                           of [Quicken Loans Inc.] [One Reverse Mortgage, LLC], the institution that executed the within instrument and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.

 

	
 
    	
 
    	
 
    
	
Notary   Public
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
My   Commission expires
    	
 
    

 

E-1

 

EXHIBIT F

 

RESERVED

 

F-1

 

EXHIBIT G

 

UNDERWRITING GUIDELINES

 

PROVIDED DIRECTLY TO ADMINISTRATIVE AGENT

 

G-1

 

EXHIBIT H

 

RESERVED

 

H-1

 

EXHIBIT I

 

SELLERS’ TAX IDENTIFICATION NUMBER

 

Quicken Loans: 38-2603955

 

One Reverse: 04-3568208

 

I-1

 

EXHIBIT J

 

EXISTING INDEBTEDNESS

 

[***]

 

J-1

 

[***]

 

J-2

 

EXHIBIT K

 

FORM OF ESCROW INSTRUCTION LETTER TO BE PROVIDED BY SELLER BEFORE CLOSING

 

The escrow instruction letter (the “Escrow Instruction Letter”) shall also include the following instruction to the Settlement Agent (the “Escrow Agent”):

 

Credit Suisse First Boston Mortgage Capital LLC (the “Administrative Agent”), has agreed to provide funds (“Escrow Funds”) to Quicken Loans Inc. and One Reverse Mortgage, LLC to finance certain mortgage loans (the “Mortgage Loans”) for which you are acting as Escrow Agent.

 

You hereby agree that (a) you shall receive such Escrow Funds from Administrative Agent to be disbursed in connection with this Escrow Instruction Letter, (b) you will hold such Escrow Funds in trust, without deduction, set-off or counterclaim for the sole and exclusive benefit of Administrative Agent until such Escrow Funds are fully disbursed on behalf of Administrative Agent in accordance with the instructions set forth herein, and (c) you will disburse such Escrow Funds on the date specified for closing (the “Closing Date”) only after you have followed the Escrow Instruction Letter’s requirements with respect to the Mortgage Loans. In the event that the Escrow Funds cannot be disbursed on the Closing Date in accordance with the Escrow Instruction Letter, you agree to promptly remit the Escrow Funds to the Administrative Agent by re-routing via wire transfer the Escrow Funds in immediately available funds, without deduction, set-off or counterclaim, back to the account specified in Administrative Agent’s incoming wire transfer.

 

You further agree that, upon disbursement of the Escrow Funds, you will hold all Mortgage Loan Documents specified in the Escrow Instruction Letter in escrow as agent and bailee for Administrative Agent, and will forward the Mortgage Loan Documents and original Escrow Instruction Letter in connection with such Mortgage Loans by overnight courier (y) to the Custodian within five (5) Business Days following the date of origination.

 

You agree that all fees, charges and expenses regarding your services to be performed pursuant to the Escrow Instruction Letter are to be paid by any Seller or its borrowers, and Administrative Agent shall have no liability with respect thereto.

 

You represent, warrant and covenant that you are not an affiliate of or otherwise controlled by Sellers, and that you are acting as an independent contractor and not as an agent of any Seller.

 

The provisions of this Escrow Instruction Letter may not be modified, amended or altered, except by written instrument, executed by the parties hereto and Administrative Agent. You understand that Administrative Agent shall act in reliance upon the provisions set forth in this Escrow Instruction Letter, and that Administrative Agent on behalf of Buyers is an intended third party beneficiary hereof.

 

K-1

 

Whether or not an Escrow Instruction Letter executed by you is received by the Custodian, your acceptance of the Escrow Funds shall be deemed to constitute your acceptance of the Escrow Instruction Letter.

 

K-2

 

EXHIBIT L

 

NOTICE OF ADDITIONAL BUYER

 

To:                            Quicken Loans Inc.

1050 Woodward Avenue

Detroit, Michigan 48226-1906

Attention: Julie Booth

 

One Reverse Mortgage, LLC

9920 Pacific Heights Blvd., Suite 350

San Diego, California 921212

Attention:  Greg Smith

 

Date:                 [         ], 20[  ]

 

Re:                                  Third Amended and Restated Master Repurchase Agreement, dated as of May 24, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), by and among Quicken Loans Inc. and One Reverse mortgage, LLC (collectively, the “Sellers”), Credit Suisse First Boston Mortgage Capital LLC (the “Administrative Agent”) on behalf of Buyers, Credit Suisse AG, a company incorporated in Switzerland, acting through its Cayman Islands Branch (“CS Cayman” and a “Buyer”), Alpine Securitization LTD (“Alpine” and a “Buyer”) and other Buyers joined thereto from time to time (the “Buyers”).

 

Ladies and Gentlemen:

 

You are hereby notified that, in accordance with Sections 22 and 37 of the Repurchase Agreement, the party identified on Annex I attached hereto shall constitute a Buyer in respect of certain Mortgage Loans identified from time to time in the books and records of Administrative Agent that are subject to the Repurchase Agreement. In accordance with the provisions of Section 37 of the Repurchase Agreement, the information set forth on Annex I attached hereto constitutes the notice information with respect to such Buyer. Capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Repurchase Agreement.

 

	
 
    	
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,   as Administrative Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exh. L

 

 

	
 
    	
Acknowledged   and Consented to by:
    
	
 
    	
 
    
	
 
    	
QUICKEN   LOANS INC., as a Seller
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
Title:
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
ONE REVERSE MORTGAGE,   LLC, as a Seller
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
Title:
    	
 
    
	
 
    	
Date:
    	
 
    

 

Exh. L

 

 

ANNEX I

TO

NOTICE OF ADDITIONAL BUYER

 

NOTICE INFORMATION

 

	
Name:
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Attention:
    	
 
    
	
Telephone:
    	
 
    
	
Facsimile:
    	
 
    
	
Email:
    	
 
    

 

Exh. L

 

 

EXHIBIT M

 

FORM OF SERVICER NOTICE

 

[Date]

 

[                ], as Servicer 

Attention:

[ADDRESS]

 

Re:                            Third Amended and Restated Master Repurchase Agreement, dated as of May 24, 2017 (as amended or restated from time to time, the “Repurchase Agreement”), by and among Quicken Loans Inc. (“Quicken Loans”), One Reverse Mortgage, LLC (“One Reverse” and together with Quicken Loans, the “Sellers”), Credit Suisse First Boston Mortgage Capital LLC (the “Administrative Agent”), Credit Suisse AG, a company incorporated in Switzerland, acting through its Cayman Islands Branch (“CS Cayman” and a “Buyer”) and Alpine Securitization LTD (“Alpine” and a “Buyer”).

 

Ladies and Gentlemen:

 

[                   ] (the “Servicer”) is servicing certain mortgage loans for [Quicken Loans][One Reverse] pursuant to that certain [TITLE AND DATE OF SERVICING AGREEMENT] (the “Servicing Agreement”) between the Servicer and [Quicken Loans][One Reverse]. Pursuant to the Repurchase Agreement among Administrative Agent, Buyers and Sellers, the Servicer is hereby notified that [Quicken Loans][One Reverse] has pledged to Administrative Agent certain mortgage loans which are serviced by Servicer which are subject to a security interest in favor of Administrative Agent.

 

Section 1.                                         Remittance to Account; Notice of Default.

 

Upon receipt of a notice of an event of default under the Repurchase Agreement from Administrative Agent (a “Notice of Event of Default”) in which Administrative Agent shall identify the mortgage loans which are then pledged to Administrative Agent under the Repurchase Agreement (the “Subject Assets”), the Servicer shall segregate all amounts (the “Servicing Income”) collected on account of such Subject Assets, hold them in trust for the sole and exclusive benefit of Administrative Agent, and remit such collections in accordance with the Administrative Agent’s written instructions. Following such Notice of Event of Default, Servicer shall (i) continue to service the Subject Assets in accordance with the Servicing Agreement; (ii) follow the instructions of Administrative Agent with respect to the Subject Assets in accordance with the Servicing Agreement, and (iii) deliver to Administrative Agent any information with respect to the Subject Assets reasonably requested by Administrative Agent.

 

Upon a Notice of Event of Default, Administrative Agent will have the right to immediately terminate Servicer’s right to service the Subject Assets without payment of any

 

M-1

 

penalty or termination fee under the Servicing Agreement. Upon receipt of such Notice of Event of Default, [Quicken Loans][One Reverse] and the Servicer shall cooperate in transferring the applicable servicing of the Subject Assets to a successor servicer appointed by Administrative Agent in its sole discretion.

 

Notwithstanding any contrary information which may be delivered to the Servicer by [Quicken Loans][One Reverse], the Servicer may conclusively rely on any information or Notice of Event of Default delivered by Administrative Agent, and [Quicken Loans][One Reverse] shall indemnify and hold the Servicer harmless for any and all claims asserted against it for any actions taken in good faith by the Servicer in connection with the delivery of such information or Notice of Event of Default.

 

Administrative Agent, for the benefit of itself and each applicable Buyer is an intended third party beneficiary of the Servicing Agreement with full enforcement rights thereunder.

 

Notwithstanding any contrary information which may be delivered to the Servicer by [Quicken Loans][One Reverse], the Servicer may conclusively rely on any information or notice delivered by Administrative Agent.

 

Section 2.                                         Back-up Administrative Agent; Successor Administrative Agent.

 

In the event that the Administrative Agent gives the Servicer written notice that a back-up Administrative Agent (the “Back-up Administrative Agent”) has been appointed under the Repurchase Agreement, then to the extent that the Servicer subsequently receives written notice from the Back-up Administrative Agent that it has assumed the role of Administrative Agent thereunder (in such case, the “Successor Administrative Agent”), then the Successor Administrative Agent shall assume all rights and obligations of the Administrative Agent hereunder, with no further action required by the parties, and the Servicer shall follow the directions of the Successor Administrative Agent hereunder for all directions to be given by the Administrative Agent hereunder.

 

Section 3. Servicer as Bailee. Servicer hereby acknowledges and agrees that on receipt of any Mortgage Loan File with respect to the Subject Assets, it shall hold such Mortgage Loan File as bailee for Administrative Agent.

 

Section 4. Counterparts. This Servicer Notice may be executed in any number of counterparts, all of which taken together constitutes one and the same instrument, and each party hereto may execute this Servicer Notice by signing any such counterpart.

 

Section 5. Entire Agreement. This Servicer Notice, together with the Servicing Agreement, constitutes the entire understanding between [Quicken Loans][One Reverse] and Servicer with respect to the subject matter they cover and supersedes any existing agreements between the parties relating to the matters provided for herein and therein. No alteration, waiver, amendments, or change or supplement hereto will be binding or effective unless the same is set forth in writing by a duly authorized representative of each party hereto.

 

M-2

 

	
[QUICKEN   LOANS INC.]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
[ONE   REVERSE MORTGAGE, LLC]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
ACKNOWLEDGED:
    	
 
    
	
 
    	
 
    
	
[                  ],   
    	
 
    
	
as Servicer
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Title:
    	
 
    
	
Telephone:
    	
 
    
	
Facsimile:
    	
 
    

 

M-3

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