Document:

flagstar-altisourcexmast

EXECUTION VERSION    CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS  BOTH NOTMATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF  PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.    MASTER REPURCHASE AGREEMENT  among  GRAPETREE LENDING LLC,  as Seller,  ALTISOURCE ASSET MANAGEMENT CORPORATION,  as Guarantor,  FLAGSTAR BANK FSB,  as a Buyer and as Administrative Agent on behalf of Buyers,  and  the Buyers from time to time party hereto  dated as of  August 1, 2022    

 

TABLE OF CONTENTS  Page  i    Article 1 DEFINITIONS AND PRINCIPLES OF CONSTRUCTION ....................................................... 1  1.1 Defined Terms ................................................................................................................... 1  1.2 Interpretation; Principles of Construction .......................................................................... 1  Article 2 AMOUNT AND TERMS OF TRANSACTIONS ........................................................................ 2  2.1 Agreement to Enter into Transactions ............................................................................... 2  2.2 Transaction Limits ............................................................................................................. 3  2.3 Description of Purchased Assets ........................................................................................ 3  2.4 Maximum Transaction Amounts ....................................................................................... 3  2.5 Use of Proceeds ................................................................................................................. 3  2.6 Price Differential ................................................................................................................ 3  2.7 All Transactions are “Servicing Released” ........................................................................ 4  2.8 Terms and Conditions of Transactions .............................................................................. 4  2.9 Temporary Increase of Aggregate Transaction Limit ........................................................ 5  Article 3 PROCEDURES FOR REQUESTING AND ENTERING INTO TRANSACTIONS ................. 5  3.1 Policies and Procedures ..................................................................................................... 5  3.2 Request for Transaction ..................................................................................................... 5  3.3 Delivery of Mortgage Loan Documents ............................................................................ 6  3.4 Payment of Purchase Price................................................................................................. 7  Article 4 REPURCHASE .......................................................................................................................... 10  4.1 Repurchase Price .............................................................................................................. 10  4.2 Repurchase Acceleration Events ...................................................................................... 11  4.3 Reduction of Asset Value as Alternative Remedy ........................................................... 11  4.4 Illegality or Impracticability ............................................................................................ 12  4.5 Increased Costs ................................................................................................................ 12  4.6 Payments Pursuant to Sale to Approved Investors .......................................................... 13  4.7 Benchmark Replacement Setting. .................................................................................... 13  4.8 Method of Payment .......................................................................................................... 14  4.9 Authorization to Debit ..................................................................................................... 15  4.10 Book Account .................................................................................................................. 15  4.11 Full Recourse ................................................................................................................... 15  Article 5 FEES ........................................................................................................................................... 15  5.1 Payment of Fees ............................................................................................................... 15  

 

TABLE OF CONTENTS  Page  ii    Article 6 SECURITY; SERVICING; MARGIN ACCOUNT MAINTENANCE; CUSTODY OF  MORTGAGE LOAN DOCUMENTS; REPURCHASE TRANSACTIONS; DUE  DILIGENCE ............................................................................................................................ 15  6.1 Precautionary Grant of Security Interest in Purchased Assets and Purchased  Items ................................................................................................................................ 15  6.2 Servicing .......................................................................................................................... 16  6.3 Margin Account Maintenance .......................................................................................... 22  6.4 Repurchase and Release of Purchased Assets.................................................................. 23  6.5 Repurchase Transactions ................................................................................................. 23  6.6 Periodic Due Diligence .................................................................................................... 24  Article 7 CONDITIONS PRECEDENT .................................................................................................... 25  7.1 Initial Transaction ............................................................................................................ 25  7.2 All Transactions ............................................................................................................... 26  7.3 Satisfaction of Conditions ................................................................................................ 29  Article 8 REPRESENTATIONS AND WARRANTIES ........................................................................... 29  8.1 Representations and Warranties Concerning Seller ......................................................... 29  8.2 Representations and Warranties Concerning Purchased Assets ...................................... 34  8.3 Continuing Representations and Warranties .................................................................... 34  8.4 Amendment of Representations and Warranties .............................................................. 34  Article 9 AFFIRMATIVE COVENANTS ................................................................................................ 35  9.1 Financial Statements and Other Reports .......................................................................... 35  9.2 Notice ............................................................................................................................... 35  9.3 Existence, Etc. .................................................................................................................. 37  9.4 Servicing of Mortgage Loans ........................................................................................... 37  9.5 Evidence of Purchased Assets ......................................................................................... 37  9.6 Defense of Title; Protection of Purchased Items ............................................................. 37  9.7 Further Assurances .......................................................................................................... 38  9.8 Fidelity Bonds and Insurance........................................................................................... 38  9.9 [Reserved] ........................................................................................................................ 38  9.10 ERISA .............................................................................................................................. 38  9.11 [Reserved] ........................................................................................................................ 39  9.12 [Reserved] ........................................................................................................................ 39  9.13 Financial Covenants ......................................................................................................... 39  9.14 Most Favored Status ........................................................................................................ 39  

 

TABLE OF CONTENTS  Page  iii    9.15 Late Payment Fee ............................................................................................................. 39  Article 10 NEGATIVE COVENANTS ..................................................................................................... 39  10.1 Lines of Business ............................................................................................................. 39  10.2 Debt and Subordinated Debt ............................................................................................ 40  10.3 Loss of Eligibility ............................................................................................................ 40  10.4 Liens on Purchased Assets and Purchased Items ............................................................. 40  10.5 Transactions with Affiliates ............................................................................................. 40  10.6 Consolidation, Merger, Sale of Assets and Change of Control ....................................... 40  10.7 Purchased Items ............................................................................................................... 41  10.8 Secondary Marketing, Underwriting, Third Party Origination and Interest Rate  Risk Management Practices ............................................................................................. 41  10.9 Distributions ..................................................................................................................... 41  Article 11 DEFAULTS AND REMEDIES ............................................................................................... 41  11.1 Events of Default ............................................................................................................. 41  11.2 Events of Early Termination ............................................................................................ 44  11.3 Remedies .......................................................................................................................... 45  11.4 Treatment of Collateral Account ..................................................................................... 47  11.5 Sale of Purchased Assets ................................................................................................. 47  11.6 No Obligation to Pursue Remedy .................................................................................... 48  11.7 No Judicial Process .......................................................................................................... 48  11.8 Reimbursement of Costs and Expenses ........................................................................... 48  11.9 Application of Proceeds ................................................................................................... 48  11.10 Rights of Set-Off .............................................................................................................. 48  Article 12 INDEMNIFICATION ............................................................................................................... 49  12.1 Indemnification ................................................................................................................ 49  12.2 Reimbursement ................................................................................................................ 50  12.3 Payment of Taxes ............................................................................................................. 50  12.4 Administrative Agent and Buyer Payment ...................................................................... 53  12.5 Agreement not to Assert Claims ...................................................................................... 53  12.6 Survival ............................................................................................................................ 53  Article 13 TERM AND TERMINATION ................................................................................................. 56  13.1 Term ................................................................................................................................. 56  13.2 Termination ...................................................................................................................... 56  

 

TABLE OF CONTENTS  Page  iv    13.3 Extension of Term ........................................................................................................... 56  Article 14 GENERAL ................................................................................................................................ 57  14.1 Integration; Servicing Provisions Integral and Non-Severable ........................................ 57  14.2 Amendments .................................................................................................................... 57  14.3 No Waiver ........................................................................................................................ 57  14.4 Remedies Cumulative ...................................................................................................... 57  14.5 Rehypothecation; Assignment ......................................................................................... 57  14.6 Successors and Assigns ................................................................................................... 58  14.7 Participations ................................................................................................................... 58  14.8 Invalidity .......................................................................................................................... 59  14.9 Additional Instruments .................................................................................................... 59  14.10 Survival ............................................................................................................................ 59  14.11 Notices ............................................................................................................................. 59  14.12 Governing Law ................................................................................................................ 60  14.13 Submission to Jurisdiction; Service of Process; Waivers ................................................ 60  14.14 Waiver of Jury Trial ......................................................................................................... 60  14.15 Counterparts ..................................................................................................................... 60  14.16 Headings .......................................................................................................................... 61  14.17 Confidential Information ................................................................................................. 61  14.18 Intent ................................................................................................................................ 62  14.19 Right to Liquidate ............................................................................................................ 63  14.20 Insured Depository Institution ......................................................................................... 63  14.21 Netting Contract ............................................................................................................... 63  14.22 Tax Treatment .................................................................................................................. 64  14.23 Examination and Oversight by Regulators ...................................................................... 64  14.24 Anti-Money Laundering Laws Notice ............................................................................. 64  14.25 Acknowledgement and Consent to Bail-In of EEA Financial Institutions ...................... 64  14.26 Reasonable Assurances .................................................................................................... 64  14.27 Service Providers ............................................................................................................. 65  14.28 No Liability With Respect to Benchmark ........................................................................ 65  Article 15 ADMINISTRATIVE AGENT .................................................................................................. 66  15.1 Appointment of Administrative Agent ............................................................................ 66  15.2 Account with Administrative Agent or any Buyer .......................................................... 66  

 

TABLE OF CONTENTS  Page  v    15.3 Scope of Administrative Agent’s Duties ......................................................................... 66  15.4 Successor Administrative Agent ...................................................................................... 66  15.5 Credit Decisions ............................................................................................................... 67  15.6 Authority of Administrative Agent to Enforce This Agreement ..................................... 67  15.7 Indemnification of Administrative Agent ........................................................................ 68  15.8 Knowledge of Default ...................................................................................................... 68  15.9 Administrative Agent’s Authorization; Action by Buyers .............................................. 69  15.10 Enforcement Actions by the Administrative Agent ......................................................... 69  15.11 Collateral Matters ............................................................................................................ 69  15.12 Administrative Agent in its Individual Capacity ............................................................. 70  15.13 Administrative Agent or other Titles ............................................................................... 70  15.14 No Reliance on Administrative Agent’s Customer Identification Program .................... 70  15.15 Subordination Agreements............................................................................................... 71  15.16 Erroneous Payments ........................................................................................................ 71  15.17 Defaulting Buyers ............................................................................................................ 73      

 

  vi    EXHIBITS  Exhibit A: Glossary of Defined Terms  Exhibit B: Reserved  Exhibit C: Form of Officer’s Compliance Certificate  Exhibit D: Form of Bailee Letter  Exhibit E: Form of Power of Attorney  Exhibit F: Wiring Instructions  Exhibit G: Reserved  Exhibit H: Representations and Warranties  Exhibit I: Mortgage Loan Documents  Exhibit J: Form of Request for Temporary Increase  Exhibit K: Reserved  Exhibit L: Form of Officer’s Certificate  Exhibit M: Form of Resolutions  Exhibit N: Form of UCC-1 Financing Statement Exhibit    SCHEDULES  Schedule 1: Filing Jurisdictions and Offices  Schedule 2: Ownership Interests of Seller  Schedule 3: Allocation Percentages  Schedule 4: Financial Statements and Other Reports  Schedule 5:  Litigation Disclosures    

 

  1    MASTER REPURCHASE AGREEMENT  THIS MASTER REPURCHASE AGREEMENT (the “Agreement”) is made and entered into as  of August 1, 2022, by and among Flagstar Bank FSB, a federally chartered savings bank, as a buyer (in  such capacity, “Flagstar Buyer”) and as administrative agent on behalf of Buyers (in such capacity,  “Administrative Agent”), Grapetree Lending LLC, a US Virgin Islands limited liability company  (“Seller”), Altisource Asset Management Corporation, a US Virgin Islands corporation (“Guarantor”)  and the other Buyers from time to time party hereto (collectively with Flagstar Buyer, “Buyers”).  RECITALS  A. Seller has requested Administrative Agent, on behalf of Buyers, to enter into transactions  with Seller whereby Seller may, from time to time, sell to Buyers certain residential  mortgage loans (including the Servicing Rights related thereto) and/or other mortgage  related assets and interests, against the transfer of funds by Administrative Agent, on  behalf of Buyers, with a simultaneous agreement by Administrative Agent, on behalf of  Buyers, to sell to Seller such purchased assets at a date certain or on demand after the  Purchase Date, against the transfer of funds by Seller (each such transaction, a  “Transaction”).  B. Administrative Agent, on behalf of Buyers, has agreed to enter into such Transactions,  subject to the terms and conditions set forth in this Agreement.  NOW, THEREFORE, in consideration of the mutual rights and obligations provided herein and  for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,  and intending to be legally bound, Seller, Guarantor, Administrative Agent and Buyers agree as follows:  ARTICLE 1  DEFINITIONS AND PRINCIPLES OF CONSTRUCTION  1.1 Defined Terms.  As used in this Agreement, capitalized terms shall have the meanings set forth in  Exhibit A hereto, unless the context otherwise requires.  All such defined terms shall, unless  specifically provided to the contrary, have the defined meanings set forth herein when used in any  other agreement, certificate or document made or delivered pursuant hereto.  1.2 Interpretation; Principles of Construction.  The following rules of this Section 1.2 apply to all  Principal Agreements unless the context requires otherwise.  A gender includes all genders.   Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.   A reference to a subsection, Section, Schedule or Exhibit is, unless otherwise specified, a  reference to a Section of, or schedule or exhibit to, this Agreement.  A reference to a party to this  Agreement or another agreement or document includes the party’s successors and permitted  substitutes or assigns.  A reference to an agreement or document (including any Principal  Agreement) is to the agreement or document as amended, modified, novated, supplemented or  replaced, except to the extent prohibited  thereby or by any Principal Agreement and in effect  from time to time in accordance with the terms thereof.  A reference to legislation or to a  provision of legislation includes a modification or re-enactment of it, a legislative provision  substituted for it and a regulation or statutory instrument issued under it.  A reference to writing  includes an Electronic Transmission and any means of reproducing words in a tangible and  permanently visible form.  A reference to conduct includes, without limitation, an omission,  statement or undertaking, whether or not in writing.  The words “hereof,” “herein,” “hereunder”  and similar words refer to this Agreement as a whole and not to any particular provision of this  

 

  2  Error! No document variable supplied.  Agreement.  The term “including” is not limiting and means “including without limitation.”  In  the computation of periods of time from a specified date to a later specified date, the word “from”  means “from and including,” the words “to” and “until” each mean “to but excluding,” and the  word “through” means “to and including.”  Except where otherwise provided in this Agreement, any determination, consent, approval, statement or  certificate made or confirmed in writing with notice to Seller by any Buyer or Administrative Agent, on  behalf of Buyers, or an authorized officer of any Buyer or Administrative Agent provided for in this  Agreement is conclusive and binds the parties in the absence of manifest error.  A reference to an  agreement includes a security interest, guarantee, agreement or legally enforceable arrangement whether  or not in writing related to such agreement.  A reference to a document includes an agreement (as so defined) in writing or a certificate, notice,  instrument or document, or any information recorded in electronic form.  Where Seller is required to  provide any document to Administrative Agent or Buyers under the terms of this Agreement, the relevant  document shall be provided in writing in either electronic or printed form unless Administrative Agent or  any Buyer requests otherwise.  At the request of Administrative Agent or any Buyer, the document shall  be provided in electronic form or both printed and electronic form.  This Agreement is the result of negotiations among, and has been reviewed by counsel to, Administrative  Agent, Buyers, Seller and Guarantor, and is the product of all parties.  In the interpretation of this  Agreement, no rule of construction shall apply to disadvantage one party on the ground that such party  proposed or was involved in the preparation of any particular provision of this Agreement or this  Agreement itself.  Except where otherwise expressly stated, Administrative Agent and Buyers may give  or withhold, in good faith or give conditionally, approvals and consents and may form opinions and make  determinations at its sole and absolute discretion.  All determinations by Administrative Agent and any  Buyer in its sole or absolute discretion shall be made in good faith.  Any requirement of good faith,  discretion or judgment by Administrative Agent and Buyers shall not be construed to require  Administrative Agent or Buyers to request or await receipt of information or documentation not  immediately available from or with respect to Seller, a servicer of the Purchased Mortgage Loans, any  other Person or the Purchased Assets themselves.  All references herein or in any Principal Agreement to  “good faith” means good faith as defined in Section 1-201(b)(20) of the Uniform Commercial Code.  ARTICLE 2  AMOUNT AND TERMS OF TRANSACTIONS  2.1 Agreement to Enter into Transactions.    (a) Subject to the terms and conditions of this Agreement and provided that no Event of  Default, Event of Early Termination, Potential Default or Cease Funding Event has  occurred and is continuing, Administrative Agent, on behalf of Buyers, shall, from time  to time during the term of this Agreement, enter into Transactions with Seller; provided,  however, that (a) the Aggregate Outstanding Purchase Price as of any date shall not  exceed the Aggregate Transaction Limit and (b) the Aggregate Outstanding Purchase  Price for any Type of Transaction shall not exceed the applicable Type Sublimit.  Seller  may request Transactions in excess of the Aggregate Transaction Limit and  Administrative Agent, on behalf of Buyers, may, from time to time, in its sole and  absolute discretion, consent to a Temporary Increase of the Aggregate Transaction Limit  in accordance with Section 2.9.    

 

  3  Error! No document variable supplied.  (b) From time to time, in accordance with Section 3.2(a) below and subject to Section 2.4  below, Seller may request and Administrative Agent, on behalf of Buyer, may fund  additional Purchase Price Increases in connection with a request to fund additional  Purchase Price for a Business Purpose Loan.  The aggregate outstanding Purchase Price  of Purchased Assets subject to outstanding Transactions shall not exceed the Aggregate  Transaction Limit.  2.2 Transaction Limits.  The Aggregate Transaction Limit and each Type Sublimit shall be as set  forth in the Transactions Terms Letter.    2.3 Description of Purchased Assets.  With respect to each Transaction, Seller shall cause to be  maintained with Administrative Agent, on behalf of Buyers, Purchased Assets with an Asset  Value not less than, at any date, the related Purchase Price for such Transaction.  With respect to  each Transaction, the type of Purchased Asset shall be the type of Asset as specified in the  Transactions Terms Letter as the Type, and in each case shall consist of the type of mortgage  loans, mortgage related securities, or interests therein as described in Bankruptcy Code  Section 101(47)(A).  If there is uncertainty as to the Type of a Purchased Asset, Administrative  Agent, on behalf of Buyers, shall determine the correct Type for such Purchased Asset.  2.4 Maximum Transaction Amounts.  The Purchase Price for each proposed Transaction shall not  exceed the lesser of:  (a) the Aggregate Outstanding Purchase Price for the applicable Type Sublimit (after giving  effect to all Transactions then subject to the Agreement), as determined by the Type of  Purchased Asset;  (b) the Aggregate Transaction Limit (as such amount may be increased from time to time in  the sole discretion of Administrative Agent, on behalf of Buyers, as provided in  Section 2.9), minus the Aggregate Outstanding Purchase Price of all other Transactions  outstanding, if any; and  (c) the Asset Value of the related Purchased Asset(s).  2.5 Use of Proceeds.  Seller shall use the Purchase Price of each Transaction solely for the purpose of  originating the related Purchased Asset(s) and/or acquiring the related Purchased Asset(s) from an  originator subject to the terms and conditions of this Agreement, and to pay the fees, costs and  other expenses associated with closing the transactions contemplated herein. No portion of any  Purchase Price will be used for the purpose of purchasing or carrying any “margin security” or  “margin stock” as such terms are used in Regulations T, U or X of the Board of Governors of the  Federal Reserve System.  2.6 Price Differential.  (a) Price Differential.  Notwithstanding that Administrative Agent, Buyers and Seller intend  that the Transactions hereunder be sales by Seller to Administrative Agent, on behalf of  Buyers, of the Purchased Assets for all purposes except accounting and tax purposes,  Seller shall pay Administrative Agent, on behalf of Buyers, accrued interest on the  Purchase Price for each Purchased Asset calculated from the Purchase Date until, but not  including, the date on which the Repurchase Price is paid, in an amount equal to the Price  Differential; provided that if the Repurchase Price for a Transaction is not paid by Seller  when due (whether at the Repurchase Date, upon acceleration or otherwise), the  

 

  4  Error! No document variable supplied.  Repurchase Price shall bear a Price Differential from the date due until paid in full at an  annual rate equal to the Default Rate.  For the avoidance of doubt, upon and after the  occurrence of an Aging Event with respect to a Purchased Asset, the Purchase Price for  such Purchased Asset shall bear a Price Differential at an annual rate equal to the sum of  the Applicable Pricing Rate plus the Type Margin for an Aging Event Asset.  (b) Time for Payment.  Price Differential with respect to any Purchased Asset shall be due  and payable upon receipt of an invoice provided by Administrative Agent, on behalf of  Buyers, to Seller setting forth the Price Differential accrued during the immediately  preceding Collection Period or Collection Periods, as applicable, as set forth in such  invoice.  Notwithstanding anything to the contrary in this Section 2.6(b), in the event the  Asset Value of any Purchased Asset is marked to zero and Seller requests Administrative  Agent to release its security interest in such Purchased Asset or any Purchased Items  related thereto, Administrative Agent shall not release any such security interest therein  unless and until Seller shall have paid to Administrative Agent, on behalf of Buyers, the  Repurchase Price for such Purchased Asset.  (c) Computations.  All computations of Price Differential and fees payable hereunder shall  be based upon the actual number of days (including the first day but excluding the last  day) occurring in the relevant period, and a three-hundred sixty (360) day year.  (d) Conforming Changes.  Notwithstanding anything herein to the contrary, in connection  with the use or administration of 1-Month Term SOFR, Administrative Agent shall have  the right to make Conforming Changes from time to time and, notwithstanding anything  to the contrary herein or in any other Principal Agreement, any amendments  implementing such Conforming Changes will become effective without any further  action or consent of any other party to this Agreement or any other Principal Agreement.   Administrative Agent shall promptly notify Seller and Guarantor of the effectiveness of  any Conforming Changes in connection with the use or administration of 1-Month Term  SOFR.  2.7 All Transactions are “Servicing Released”.  The sale of Mortgage Loans by Seller to  Administrative Agent, on behalf of Buyers, pursuant to Transactions under this Agreement  includes the Servicing Rights related to the Mortgage Loans and all Transactions under this  Agreement are “servicing released” purchase and sale transactions for all intents and purposes  (other than tax purposes), it being understood that the Purchase Price paid by Administrative  Agent, on behalf of Buyers, to Seller for each such Mortgage Loan includes a premium that  compensates Seller for the Servicing Rights related to the Mortgage Loan and upon payment of  the Purchase Price by Administrative Agent, on behalf of Buyers, to Seller, Administrative  Agent, on behalf of Buyers, becomes the owner of the Mortgage Loan which includes the  Servicing Rights related thereto.  2.8 Terms and Conditions of Transactions.  The terms and conditions of the Transactions as set forth  in the Transactions Terms Letter, this Agreement or otherwise may be changed from time to time  by mutual agreement among Administrative Agent, Buyers, Seller and Guarantor.  The terms and  conditions of the Transactions Terms Letter are hereby incorporated and form a part of this  Agreement as if fully set forth herein; provided, however, to the extent of any conflict between  the terms of this Agreement and the terms of the Transactions Terms Letter, the Transactions  Terms Letter shall control.  

 

  5  Error! No document variable supplied.  2.9 Temporary Increase of Aggregate Transaction Limit.  Seller may request a temporary increase of  the Aggregate Transaction Limit (a “Temporary Increase”) by submitting to Administrative  Agent, on behalf of Buyers, an executed request for Temporary Increase in the form of Exhibit J  hereto (a “Request for Temporary Increase”), setting forth the requested increased Aggregate  Transaction Limit (such increased amount, the “Temporary Aggregate Transaction Limit”),  the effective date and time of such Temporary Increase and the date and time on which such  Temporary Increase shall terminate.  Administrative Agent, on behalf of Buyers, may from time  to time, in its sole and absolute discretion, consent to such Temporary Increase, which consent  shall be in writing as evidenced by Administrative Agent’s delivery to Seller of a countersigned  Request for Temporary Increase.  At any time that a Temporary Increase is in effect, the  Aggregate Transaction Limit shall equal the Temporary Aggregate Transaction Limit for all  purposes of this Agreement and all calculations and provisions relating to the Aggregate  Transaction Limit shall refer to the Temporary Aggregate Transaction Limit, including without  limitation, Type Sublimits.  Upon the termination of a Temporary Increase, Seller shall be  obligated to repurchase, and shall repurchase, upon notice by Administrative Agent, on behalf of  Buyers, to Seller, Purchased Assets as are designated by Administrative Agent, on behalf of  Buyers, to be repurchased by Seller in order to reduce the Aggregate Outstanding Purchase Price  to the Aggregate Transaction Limit (as reduced by the termination of such Temporary Increase)  in accordance with Section 4.2(e).  ARTICLE 3  PROCEDURES FOR REQUESTING AND ENTERING INTO TRANSACTIONS  3.1 Policies and Procedures.  In connection with the Transactions contemplated hereunder, Seller  shall comply in all material respects with all applicable reasonable policies and procedures  relating to the onboarding and sales of Mortgage Loans and any systems requirements (the  “Policies and Procedures”) of Administrative Agent as may currently exist or as hereafter created.   Such Policies and Procedures may be in writing or otherwise provided to Seller.  Administrative  Agent shall have the right to change, revise, amend or supplement reasonable Policies and  Procedures from time to time to conform to current legal requirements or Administrative Agent  practices by giving prior written notice to Seller of such changes, revisions, amendments or  supplements; provided that (i) Seller shall be given a commercially reasonable amount of time to  implement such change, and (ii) such change shall not apply to Transactions entered into prior to  the delivery of Administrative Agent’s written notice pursuant to this Section 3.1 and in no event  shall the change apply to any Transaction on a retroactive basis; provided, that such  Administrative Agent’s policies and procedures (and any amendments, revisions or supplements  thereto) shall not substantially impact the benefits of this Agreement.   3.2 Request for Transaction.  (a) Request for Transaction.  Seller shall request a Transaction by delivering to  Administrative Agent, on behalf of Buyers, a Transaction Request for each Asset  intended to be the subject of the Transaction during the regular business hours of  Administrative Agent, or as otherwise approved by Administrative Agent in its sole  discretion from time to time, on the Business Day prior to the requested Purchase Date.   Assuming the satisfaction of all conditions precedent set forth in Article 7 and as  otherwise set forth in this Agreement, Administrative Agent, on behalf of Buyers, shall  confirm to Seller the terms of Transactions electronically or in writing.  Administrative  Agent, on behalf of Buyers, reserves the right to reject any Transaction Request that  Administrative Agent determines fails to comply with the terms and conditions of this  Agreement or, subject to Section 3.1, Administrative Agent’s and/or Buyer’s then current  

 

  6  Error! No document variable supplied.  policies and procedures.  By submitting a Transaction Request hereunder, (i) such  Transaction Request shall be deemed to be, and Seller acknowledges and agrees that such  Transaction Request shall constitute, notification to Administrative Agent, on behalf of  Buyers, by Seller that Seller wishes to enter into a Transaction under this Agreement and  (ii) Seller shall be deemed to have represented and warranted that (a) as of the applicable  Purchase Date, all conditions precedent to a Transaction as set forth in Section 7.1 and  Section 7.2 of this Agreement have been satisfied, (b) the representations and warranties  of Seller set forth in Article 8 of this Agreement are true and correct in all material  respects as if made on and as of the date of the applicable Transaction and (c) no  Potential Default, Event of Early Termination, Event of Default or Material Adverse  Effect with respect to Seller has occurred and is continuing.   (b) Failure to Enter into Transaction; Cancellation of Transaction.  If Seller fails [***] to  enter into a Transaction, in each case after such [***], after Seller has requested such  Transaction and submitted a Transaction Request in connection with such request, for  each Transaction requested by Seller thereafter for which Seller fails to enter into such  Transaction after Seller has requested such Transaction and submitted a Transaction  Request in connection with such request, Seller shall pay Administrative Agent, on behalf  of Buyers, and reimburse Administrative Agent, on behalf of Buyers, for any reasonable  and documented out-of-pocket losses, costs and expenses incurred by Administrative  Agent and Buyers in connection with such failure to enter into the Transaction, including,  without limitation, costs relating to re-employment of funds obtained by Administrative  Agent or Buyers and fees payable to terminate the arrangements through which such  funds were obtained; provided that, Seller shall not be required to pay and/or reimburse  Administrative Agent, on behalf of Buyers, if each of the conditions set forth in Article 7  were, as determined by Administrative Agent’s in its good faith discretion, satisfied and  Administrative Agent elected to not fund such Transaction.  In addition, with respect to  any Transaction, including the initial Transaction, if following disbursement by  Administrative Agent, on behalf of Buyers, of the Purchase Price relating to such  Transaction, Seller cancels such Transaction, in each case, Seller shall pay  Administrative Agent, on behalf of Buyers, a Price Differential on such Purchase Price  from the Purchase Date until, but not including, the date the Purchase Price is returned to  Administrative Agent, on behalf of Buyers.  (c) Form of Transaction Request.  Administrative Agent shall have the right to revise or  supplement the form of the Transaction Request, in form and substance that is mutually  agreed upon by Administrative Agent and Seller.   3.3 Delivery of Mortgage Loan Documents.  (a) Mortgage Loans.  Prior to any Transaction related to a Dry Mortgage Loan, Seller shall  deliver to Administrative Agent, on behalf of Buyers, or its Custodian any related  Mortgage Loan Documents in accordance with and pursuant to the terms of Section 7.2  and the Custodial Agreement, if applicable.  (b) Wet Mortgage Loans.  With respect to a Transaction the subject of which is a Wet  Mortgage Loan, (i) Seller shall deliver to Administrative Agent, on behalf of Buyers, or  its Custodian the related Mortgage Loan Documents in Seller’s possession (or copies  thereof) or in its custodian’s possession, and (ii) Seller shall authorize, direct and cause  its custodian to deliver the related Mortgage Loan Documents directly to Administrative  

 

  7  Error! No document variable supplied.  Agent, on behalf of Buyers, or its Custodian, in each case, within the Maximum Dwell  Time in accordance with the terms of Section 7.2 hereof and the Custodial Agreement.  (c)  [Reserved].  (d) Mortgage Loan Documents in Seller’s Possession.  At all times during which the  Mortgage Loan Documents related to any Purchased Mortgage Loan are in the possession  of Seller, and until such Purchased Mortgage Loan is repurchased by Seller, Seller shall  hold such Mortgage Loan Documents in trust separate and apart from Seller’s own  documents and assets and for the exclusive benefit of Administrative Agent, on behalf of  Buyers, and shall act only in accordance with Administrative Agent’s written instructions  thereto.  Such Mortgage Loan Documents should be clearly marked as subject to delivery  to Administrative Agent, on behalf of Buyers.  (e) Other Mortgage Loan Documents in Seller’s Possession.  With respect to each Purchased  Mortgage Loan, until such Purchased Mortgage Loan is repurchased by Seller, Seller  shall hold (or cause to be held) in trust separate and apart from Seller’s own documents  and assets and for the exclusive benefit of Administrative Agent, on behalf of Buyers, all  mortgage loan documents related to such Purchased Mortgage Loan and not delivered to  Administrative Agent, on behalf of Buyers, including, without limitation, to the extent in  Seller’s  possession or control, the Other Mortgage Loan Documents, as applicable.  All  such mortgage loan documents shall be clearly marked as subject to the ownership of  Administrative Agent, on behalf of Buyers.  3.4 Payment of Purchase Price.  (a) Payment of Purchase Price.  On the Purchase Date for each Transaction, ownership of the  Purchased Assets, including the Servicing Rights related to Purchased Assets consisting  of Purchased Mortgage Loans, shall be transferred to Administrative Agent, on behalf of  Buyers, against the simultaneous transfer of the Purchase Price to Seller and  simultaneously with the delivery to Administrative Agent, on behalf of Buyers (or the  Custodian on its behalf) of the Purchased Assets relating to each Transaction.  With  respect to the Purchased Assets being sold by Seller on the Purchase Date, Seller hereby  sells, transfers, conveys and assigns to Administrative Agent, on behalf of Buyers, or its  designee all of Seller’s right, title and interest in and to the Purchased Assets, including  the Servicing Rights related to the Purchased Mortgage Loans, together with all right,  title and interest of Seller in and to all amounts due and payable under the terms of such  Purchased Assets.  (b) Methods of Payment.  On or prior to the Purchase Date for each Transaction, subject to  the satisfaction of all conditions precedent set forth in Section 7.1 (with respect to the  initial Transaction) and Section 7.2 and as otherwise set forth in this Agreement,  Administrative Agent, on behalf of Buyers, shall make available in same day funds the  Purchase Price for all Transactions upon satisfaction of all conditions precedent set forth  in Section 7.1 (with respect to the initial Transaction) and Section 7.2 and as otherwise  set forth in this Agreement having been satisfied on or prior to 5:00 p.m. (New York City  time) on such Purchase Date. The Administrative Agent shall remit the Purchase Price by  wire transfer in accordance with Seller’s wire instructions set forth in the applicable  Transaction Request.  Any funds disbursed by Administrative Agent, on behalf of  Buyers, to Seller shall be subject to all applicable federal, state and local laws, including,  without limitation, regulations and policies of the Board of Governors of the Federal  

 

  8  Error! No document variable supplied.  Reserve System on Reduction of Payments System Risk.  Seller acknowledges that as a  result of such Applicable Laws, regulations and policies, equipment malfunction,  Administrative Agent’s or any Buyer’s approval procedures or circumstances beyond the  reasonable control of Administrative Agent or any Buyers, the payment of a Purchase  Price may be delayed.  Administrative Agent and Buyers shall not be liable to Seller for  any costs, losses or damages arising from or relating to any such delays.  (c) [Reserved].  (d) Return of Purchase Price.  If a Wet Mortgage Loan that is to be table funded utilizing the  Purchase Price is not closed on the same day on which the Purchase Price was funded,  Seller shall promptly return, or cause to be immediately returned (but in any event within  [***] of Seller’s knowledge or receipt of notice of such non-closure) the Purchase Price  with respect to such Wet Mortgage Loan by wire transfer of immediately available funds  to Administrative Agent, on behalf of Buyers, in accordance with Administrative Agent’s  wire instructions set forth on Exhibit F.  Further, Seller shall pay Administrative Agent  and Buyers all fees and expenses incurred by Administrative Agent and Buyers in  connection with the funding of the Purchase Price for such Wet Mortgage Loan and, from  the date of such funding up to but excluding the date such Purchase Price is returned to  Administrative Agent, on behalf of the applicable Buyer, Seller shall also pay  Administrative Agent, on behalf of Buyers, any Price Differential accrued on such  Purchase Price promptly upon notification from Administrative Agent, on behalf of  Buyers; provided, however, that Price Differential shall continue to accrue until the  Purchase Price is returned to Administrative Agent, on behalf of the applicable Buyer.  (e) Allocation of Purchased Assets. (A) The Administrative Agent may, on the terms and  subject to the conditions set forth herein (including without limitation Sections 2 and 3  hereof), but shall not be required to, enter into one or more Transactions on behalf of the  Buyers from time to time on any Business Day during the period from the Effective Date  hereof until (but excluding) the Facility Termination Date. Upon agreeing to enter into a  Transaction hereunder, Administrative Agent shall promptly notify each Buyer, with a  copy of the related Transaction Request, of the amount of its Allocation Percentage of the  related Transaction (each, an “Allocation Transaction”). Subject to the terms and  conditions set forth herein, each Buyer severally agrees to make the Purchase Price  available to Seller from time to time, in each case, that Administrative Agent, in its sole  discretion, has approved in the related Transaction Request pursuant to the terms and  conditions herein, in each case, in an aggregate amount not to exceed the amount of such  Buyer’s Allocation Percentage then-outstanding. Administrative Agent shall maintain in  accordance with its usual practice an account or accounts evidencing the amounts of each  Transaction resulting from each Allocation Transaction from time to time, including the  amount and date of each Allocation Transaction, its applicable Price Differential and the  amount and date of any repayment made on any Allocation Transaction from time to  time. The Administrative Agent, at any time in its sole and absolute discretion, may, in  each case on behalf Seller (which hereby irrevocably directs the Administrative Agent to  act on their behalf) request each of the Buyers (including the Administrative Agent in its  capacity as a Buyer) to pay the Purchase Price related to a Transaction in an amount not  to exceed the Aggregate Transaction Limit to Seller, in an amount equal to such Buyer’s  Allocation Percentage of the aggregate Purchase Price in connection with such Allocation  Transactions outstanding on the date such notice is given (the “Refunded Allocation  Transactions”) and may make multiple demands for such payment on any single Business  Day. In connection with the making of any such Refunded Allocation Transactions, the  

 

  9  Error! No document variable supplied.  Administrative Agent shall retain its claim against Seller for any unpaid interest or fees in  respect thereof accrued to the date of such refunding.   (B) (i) Unless an Event of Default hereof shall have occurred and regardless of whether  the conditions precedent to entering into a Transaction as set forth in Section 7.2 of this  Agreement are then satisfied, each Buyer (other than Administrative Agent) shall make  the proceeds of its Allocation Percentage available to the Administrative Agent for the  benefit of the Administrative Agent at the office of the Administrative Agent specified in  Section 15.11 hereof within [***] that such notice is given, in immediately available  funds, on any Business Day. For the avoidance of doubt, Administrative Agent may  provide notice and request for payment from Buyers pursuant this Section 3.4(e)(B)  multiple times on any single Business Day and each such Buyer shall provide payment in  accordance with the immediately preceding sentence with respect to each such notice and  request.   (ii) If an Event of Default shall have occurred, each Buyer will purchase from the  Administrative Agent an undivided participating interest in each Allocation Transaction  that was to have been refunded in an amount equal to its Allocation Percentage. Each  Buyer within the time periods specified in Section 3.4(e)(B)(ii) hereof, as applicable,  shall immediately transfer to the Administrative Agent, for the benefit of the  Administrative Agent, in immediately available funds, an amount equal to its Allocation  Percentage of the Purchase Price of all Allocation Transactions as of such date.  (C) Each Buyer’s obligation to make remit an amount equal to its respective Allocation  Percentage of the related Purchase Price to refund Allocation Transactions shall be  absolute and unconditional and shall not be affected by any circumstance, including,  without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which  such Buyer may have against Administrative Agent, Seller or any other Person for any  reason whatsoever; (ii) the occurrence or continuance of any Potential Default, Event of  Early Termination, Event of Default, Material Adverse Effect with respect to Seller or  Cease Funding Event; (iii) any adverse change in the condition (financial or otherwise) of  Seller or any other Person; (iv) any breach of this Agreement or any other Principal  Agreement by Seller or any other Person; (v) any inability of Seller to satisfy the  conditions precedent entering into a Transaction set forth in Section 7.2 of this  Agreement on the date upon which such Purchase Price is to be remitted to Seller; or (vi)  any other circumstance, happening or event whatsoever, whether or not similar to any of  the foregoing.   (D) If any Buyer does not make available to the Administrative Agent the amount  required pursuant to Section 3.4(e)(A) or (B) hereof, as the case may be, the  Administrative Agent on behalf of the Administrative Agent, shall be entitled to recover  such amount on demand from such Buyer, together with interest thereon for each day  from the date of non-payment until such amount is paid in full (x) for the [***] such  amount remains unpaid, at the Applicable Pricing Rate plus [***] and (y) thereafter, at the  rate of interest then applicable to such Allocation Transactions. The obligation of any  Buyer to make available its pro rata portion of the amounts required pursuant to Section  3.4(e)(A) or (B) hereof shall not be affected by the failure of any other Buyer to make  such amounts available, and no Buyer shall have any liability to Seller, the  Administrative Agent, or any other Buyer or any other party for another Buyer’s failure  to make available the amounts required under Section 3.4(e)(A) or (B) hereof.  

 

  10  Error! No document variable supplied.  (E) Notwithstanding the foregoing, no Buyer shall be required to enter into any  Transaction hereunder to refund an Allocation Transaction if at least [***] prior to the  making of such Allocation Transaction by the Administrative Agent, the officers of the  Administrative Agent immediately responsible for matters concerning this Agreement  shall have received written notice from Administrative Agent or any Buyer that such  Allocation Transactions should be suspended based on the occurrence and continuance of  an Event of Default and stating that such notice is a “notice of default”; provided,  however that the obligation of the Buyers to make or refund such Allocation Transaction  shall be reinstated upon the date on which such Event of Default has been waived by the  requisite Buyers.  ARTICLE 4  REPURCHASE  4.1 Repurchase Price.  (a) Payment of Repurchase Price.  The Repurchase Price for each applicable Purchased  Asset shall be payable in full by wire transfer of immediately available funds to  Administrative Agent, on behalf of Buyers, in accordance with Administrative Agent’s  wire instructions set forth on Exhibit F upon the earliest to occur of (i) the Repurchase  Date of the related Transaction, (ii) at Administrative Agent’s sole option, upon the  occurrence of any Repurchase Acceleration Event with respect to such Purchased Asset,  (iii) at Administrative Agent’s sole option, upon the occurrence and continuance of an  Event of Default, or (iv) the Facility Termination Date.  Such obligation to repurchase  exists without regard to any prior or intervening liquidation or foreclosure with respect to  any Purchased Asset.  While it is anticipated that Seller will repurchase each Purchased  Asset on its related Repurchase Date, Seller may repurchase and Administrative Agent,  on behalf of Buyers, will sell any Purchased Asset hereunder on demand to Seller.  In  such circumstance, Administrative Agent, on behalf of Buyers, shall apply the  Repurchase Price received from Seller in accordance with Section 6.2(i)(iii).  (b) Effect of Payment of Repurchase Price.  On the Repurchase Date (or such other date on  which the Repurchase Price is received in full by Administrative Agent, on behalf of  Buyers), termination of the related Transaction will be effected by the repurchase by  Seller or its designee of the Purchased Assets and any related Purchased Items and the  simultaneous transfer of the Repurchase Price to an account of Administrative Agent, on  behalf of Buyers (in each case subject to the provisions of Section 6.4), and all of each  Buyer’s and Administrative Agent’s, on behalf of Buyers, rights, title and interests  therein shall then be conveyed to Seller or its designee; provided that, Administrative  Agent, on behalf of any Buyer, shall not be deemed to have terminated or conveyed its  interest in such Purchased Assets and any related Purchased Items if an Event of Default,  Event of Early Termination, Potential Default or Cease Funding Event shall then be  continuing or shall be caused by such repurchase or if such repurchase gives rise to or  perpetuates a Margin Deficit that is not satisfied in accordance with Section 6.3(b).  With  respect to Purchased Assets that are Purchased Mortgage Loans, Seller is obligated to  obtain the related Mortgage Loan Documents from the Custodian at Seller’s expense on  the Repurchase Date.  On each Repurchase Date (or such other date on which the  Repurchase Price, less any Price Differential due on the next succeeding Price  Differential Date, is received in full by Administrative Agent, on behalf of Buyers),  Administrative Agent, on behalf of Buyers, shall be deemed to have simultaneously  released the pledge of the applicable Purchased Asset and any related Purchased Items in  

 

  11  Error! No document variable supplied.  each case without any further action by Administrative Agent, Buyers or any other  Person and such Purchased Asset and any related Purchased Items shall be transferred to  Seller or its designee free and clear of any liens, pledges or encumbrances.  To the extent  any Uniform Commercial Code financing statement filed against Seller by  Administrative Agent, on behalf of Buyers, specifically identifies such Purchased Asset  and any related Purchased Items or, upon Seller’s request, at the expense of Seller and  within reasonable time to file such Uniform Commercial Code financing statement,  Administrative Agent, on behalf of Buyers, shall deliver an amendment thereto or  termination thereof evidencing the release of such Purchased Asset and any related  Purchased Items from Administrative Agent’s, on behalf of Buyers, security interest  therein.  Any such transfer or release shall be without recourse to Administrative Agent  and any Buyer and without representation or warranty by Administrative Agent or any  Buyer.  4.2 Repurchase Acceleration Events.  The occurrence of any of the following events shall be a  Repurchase Acceleration Event with respect to one or more Purchased Assets, as the case may be:  (a) Administrative Agent, on behalf of Buyers, has determined that the Purchased Asset is a  Defective Asset;  (b) [***] elapse from the date the related Mortgage Loan Documents were delivered to an  Approved Investor subject to a Bailee Agreement and such Approved Investor has not  returned such Mortgage Loan Documents or purchased such Purchased Asset, unless an  extension is granted by Administrative Agent, on behalf of Buyers;  (c) [***] elapse from the date a related Mortgage Loan Document was delivered to Seller for  correction or completion or for servicing purposes, without being returned to  Administrative Agent, on behalf of Buyers, or its designee;  (d) regardless of whether a Purchased Mortgage Loan is a Defective Asset, a foreclosure or  similar type of proceeding is initiated with respect to such Mortgage Loan;  (e) the further sale of a Purchased Asset or any of its Affiliates to any party other than an  Approved Investor;  (f) with respect to a Wet Mortgage Loan, Seller fails to deliver to Administrative Agent or  Custodian, on behalf of Buyers, the related Mortgage Loan Documents within the  Maximum Dwell Time with respect to Seller’s obligation to deliver the related Mortgage  Loan Documents to Administrative Agent, on behalf of Buyers, or any Mortgage Loan  Document delivered to Administrative Agent, on behalf of Buyers, upon examination by  Administrative Agent or is found not to be in compliance with the requirements of this  Agreement; or  (g) following the termination of a Temporary Increase, the Aggregate Outstanding Purchase  Price exceeds the Aggregate Transaction Limit (as reduced by the termination of such  Temporary Increase).  4.3 Reduction of Asset Value as Alternative Remedy.  In lieu of requiring full repayment of the  Repurchase Price upon the occurrence of a Repurchase Acceleration Event, Administrative  Agent, on behalf of Buyers, may elect to reduce the Asset Value of the related Purchased Asset  [***] and accordingly require a full or partial repayment of such Repurchase Price or the delivery  

 

  12  Error! No document variable supplied.  of other funds or collateral, which additional assets shall be “margin payments” or “settlement  payments” as such terms are defined in Bankruptcy Code Sections 741(5) and (8), respectively.  4.4 Illegality or Impracticability.  Notwithstanding anything to the contrary in this Agreement, if  Administrative Agent determines that any law, regulation, treaty or directive or any change  therein or in the interpretation or application thereof, or any circumstance materially and  adversely affecting the London interbank market, the repurchase market for mortgage loans or  mortgage-backed securities or the source or cost of Administrative Agent’s funds, in any case  shall make it unlawful for Administrative Agent to enter into or maintain Transactions as  contemplated by this Agreement, (a) Administrative Agent shall cease to have any obligation  hereunder to enter into or to continue to maintain Transactions and any such obligations shall be  cancelled and (b) the Repurchase Price for each Transaction then outstanding shall be due and  payable upon the earlier to occur of (i) the date required by any financial institution providing  funds to Administrative Agent, (ii) sale of the Purchased Assets in accordance with and subject to  the terms of this Agreement; it being understood that this clause (ii) does not expand  Administrative Agent’s right to sell such Purchased Assets beyond the rights otherwise afforded  to Administrative Agent pursuant to this Agreement and (iii) the date as of which Administrative  Agent determines that such Transactions are unlawful to maintain.  Administrative Agent shall  not be liable to Seller for any costs, losses or damages arising from or relating to any actions  taken by Administrative Agent pursuant to this Section 4.4.  4.5 Increased Costs.  (a) Notwithstanding anything to the contrary in this Agreement, if Administrative Agent  determines that any change in any law, treaty, rule or regulation or determination of an  arbitrator or a court or other Governmental Authority or any change in the interpretation  or application thereof or compliance by Administrative Agent with any request or  directive (whether or not having the force of law) from any central bank or other  Governmental Authority made subsequent to the date hereof (i) subjects Administrative  Agent to any tax of any kind whatsoever with respect to this Agreement or any Purchased  Assets or changes the basis of taxation of payments to Administrative Agent in respect  thereof, in each case excluding any Indemnified Taxes (which shall be governed by  Section 12.3), Taxes described in clauses (b) through (d) of the definition of Excluded  Taxes, and Connection Income Taxes, (ii) imposes, modifies or holds applicable any  reserve, special deposit, compulsory advance or similar requirement against assets held  by deposits or other liabilities in or for the account of Transactions or extensions of credit  by, or any other acquisition of funds by any office of Administrative Agent which is not  otherwise included in the determination of the Applicable Pricing Rate hereunder, or (iii)  imposes on Administrative Agent any other condition, the result of which is to increase  the cost to Administrative Agent, by an amount which Administrative Agent deems to be  material, of effecting or maintaining purchases hereunder, or to reduce any amount  receivable hereunder in respect thereof, then, in any such case, Seller shall, at its option  and in its sole and absolute discretion, either (1) terminate all of the Transactions and  repurchase all of the Purchased Assets or (2) promptly pay Administrative Agent such  additional amount or amounts as will compensate Administrative Agent for such  increased cost or reduced amount receivable thereafter incurred.   (b) If Administrative Agent has determined that the adoption of or any change in any law,  treaty, rule or regulation or determination of an arbitrator or a court or other  Governmental Authority regarding capital adequacy or in the interpretation or application  thereof or compliance by Administrative Agent or any corporation controlling  

 

  13  Error! No document variable supplied.  Administrative Agent with any request or directive regarding capital adequacy (whether  or not having the force of law) from any Governmental Authority made subsequent to the  date hereof has the effect of reducing the rate of return on Administrative Agent’s or such  corporation’s capital as a consequence of its obligations hereunder to a level below that  which Administrative Agent or such corporation but for such adoption, change or  compliance (taking into consideration Administrative Agent’s or such corporation’s  policies with respect to capital adequacy) by an amount deemed by Administrative Agent  to be material, then from time to time, Seller shall, at its option and in its sole and  absolute discretion, either (1) terminate all of the Transactions and repurchase all of the  Purchased Assets or (2) promptly pay Administrative Agent such additional amount or  amounts as will thereafter compensate Administrative Agent for such reduction.  If Administrative Agent becomes entitled to claim any additional amounts pursuant to this Section 4.5, it  shall promptly notify Seller of the event by reason of which it has become so entitled.  A certificate as to  any additional amounts payable pursuant to this subsection submitted by Administrative Agent to Seller  shall be conclusive in the absence of manifest error.  4.6 Payments Pursuant to Sale to Approved Investors.  Seller shall direct each Approved Investor  purchasing a Purchased Asset to pay directly to Administrative Agent, on behalf of Buyers, in  accordance with Administrative Agent’s wire instructions set forth on Exhibit F by wire transfer  of immediately available funds to Administrative Agent, the applicable Repurchase Price.  Seller  shall not direct the Approved Investor to pay to Administrative Agent, on behalf of Buyers, an  amount less than the full Repurchase Price or modify or otherwise change the wire instructions  for payment of the Repurchase Price provided to Approved Investor by Administrative Agent, on  behalf of Buyers.  Administrative Agent, on behalf of Buyers, shall apply all amounts received  from an Approved Investor for the account of Seller in accordance with Section 6.2(i)(iii).   Administrative Agent, on behalf of Buyers, may reject any such shortfalls, any amount received  from an Approved Investor and not release the related Purchased Asset if the amount received is  not sufficient to pay the related Repurchase Price in full.  Alternatively, in lieu of rejecting an  amount received by Administrative Agent, on behalf of Buyers, from an Approved Investor, at  Administrative Agent’s, on behalf of Buyers, option, if the amount received from the Approved  Investor does not equal or exceed the related Repurchase Price, Administrative Agent, on behalf  of Buyers, may accept the amount received from the Approved Investor and demand payment of  such remaining amount from Seller.  If Seller receives any funds intended for Administrative  Agent or any Buyer, Seller shall segregate and hold such funds in trust for Administrative Agent  or such Buyer and immediately pay to Administrative Agent or such Buyer all such amounts by  wire transfer of immediately available funds to Administrative Agent or Administrative Agent on  behalf of such Buyer in accordance with Administrative Agent’s wire instructions set forth on  Exhibit F together with providing Administrative Agent, on behalf of Buyers, with a settlement  statement for the transaction.   4.7 Benchmark Replacement Setting.  (a) Benchmark Replacement.  Notwithstanding anything to the contrary herein or in any other  Principal Agreement, if a Benchmark Transition Event and its related Benchmark  Replacement Date have occurred prior to the Reference Time in respect of any setting of the  then-current Benchmark, then, (x) if a Benchmark Replacement is determined in accordance  with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark  Replacement Date, such Benchmark Replacement will replace such Benchmark for all  purposes hereunder and under any Principal Agreement in respect of such Benchmark  setting and subsequent Benchmark settings without any amendment to, or further action or  

 

  14  Error! No document variable supplied.  consent of any other party to, this Agreement or any other Principal Agreement and (y) if a  Benchmark Replacement is determined in accordance with clause (3) or (4) of the definition  of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark  Replacement will replace such Benchmark for all purposes hereunder and under any  Principal Agreement in respect of any Benchmark setting at or after 5:00 ET on the first (1st)  Business Day after the date notice of such Benchmark Replacement is provided to Seller  without any amendment to, or further action or consent of any other party to, this Agreement  or any other Principal Agreement.  (b) Benchmark Replacement Conforming Changes.  In connection with the use, administration  or implementation of a Benchmark Replacement, Administrative Agent will have the right to  make Conforming Changes from time to time and, notwithstanding anything to the contrary  herein or in any other Principal Agreement, any amendments implementing such  Conforming Changes will become effective without any further action or consent of Seller or  any other party to this Agreement or any other Principal Agreement.  (c) Notices; Standards for Decisions and Determinations.  Administrative Agent will promptly  notify Seller of (i) the implementation of any Benchmark Replacement, and (ii) the  effectiveness of any Conforming Changes.  Any determination, decision or election that may  be made by Administrative Agent pursuant to this Section 4.7 including any determination  with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an  event, circumstance or date and any decision to take or refrain from taking any action or any  selection, will be conclusive and binding absent manifest error and may be made in its sole  discretion and without consent from Seller or any other party to this Agreement or any other  Principal Agreement, except, in each case, as expressly required pursuant to this Section 4.7.  (d) Temporary Unavailability of Setting of Benchmark.  Notwithstanding anything to the  contrary herein or in any other Principal Agreement, at any time (including in connection  with the implementation of a Benchmark Replacement), if (i) a Benchmark Unavailability  Period occurs or (ii) a relevant setting of the then-current Benchmark is temporarily  unavailable due to a systemic market disruption, as determined by Administrative Agent in  its reasonable discretion, then Administrative Agent will utilize the last available setting of  the then-current Benchmark until such time as (A) the Benchmark Unavailability Period  ends or (B) the source and/or publisher of the then-current Benchmark resumes timely  publication of such Benchmark’s settings, as applicable.  4.8 Method of Payment.  Except as otherwise specifically provided herein, all payments hereunder  must be received by Administrative Agent, on the date when due and shall be made in United  States dollars by wire transfer of immediately available funds to Administrative Agent, on behalf  of Buyers, in accordance with Administrative Agent’s wire instructions set forth on Exhibit F.   Whenever any payment to be made hereunder shall be stated to be due on a day that is not a  Business Day, the due date thereof shall be the succeeding Business Day, and with respect to  payments of the Purchase Price, the Price Differential thereon shall be payable at the Applicable  Pricing Rate during such extension.  All payments made by or on behalf of Seller with respect to  any Transaction shall be applied to Seller’s account in accordance Section 6.2(i)(iii) and shall be  made in such amounts as may be necessary in order that all such payments after withholding for  or on account of any present or future Indemnified Taxes imposed by any Governmental  Authority, compensate Administrative Agent for any additional cost or reduced amount  receivable of making or maintaining Transactions as a result of such Indemnified Taxes, as set  forth, and subject to, Sections 4.5 and 12.3.  All payments to be made by or on behalf of Seller  with respect to any Transaction shall be made without set-off, counterclaim or other defense,  

 

  15  Error! No document variable supplied.  unless otherwise expressly permitted by Administrative Agent, on behalf of Buyers, in writing in  Administrative Agent’s sole discretion.  4.9 Authorization to Debit.  In addition to any other authorizations to and rights of Administrative  Agent, on behalf of Buyers, hereunder, Seller hereby expressly authorizes Administrative Agent,  on behalf of Buyers, to debit any account maintained by Seller with Administrative Agent, on  behalf of Buyers, into which any funds related to the Purchased Assets or related Purchased Items  have been deposited (excluding, for the avoidance of doubt, any escrow accounts maintained for  the benefit of the related Mortgagors), including without limitation, any operating, settlement or  custodial account, for any and all amounts due Administrative Agent, on behalf of Buyers,  hereunder.  For the avoidance of doubt, the foregoing debit rights of Administrative Agent, on  behalf of Buyers, shall not apply to Purchased Assets which have been repurchased by Seller  pursuant to Section 6.4.  4.10 Book Account.  Administrative Agent, on behalf of Buyers, and Seller shall maintain an account  on their respective books of all Transactions entered into between Administrative Agent, on  behalf of Buyers, and Seller and for which the Repurchase Price has not yet been paid.   Notwithstanding the foregoing, Seller shall be responsible for maintaining its own book account  and records of Transactions entered into with Administrative Agent, on behalf of Buyers,  amounts due to Administrative Agent, on behalf of Buyers, in connection with such Transactions  and for paying such amounts when due.  Failure of Seller to maintain an account on its books  with information regarding any Transaction shall not excuse Seller’s timely performance of all  obligations under this Agreement, including, without limitation, payment obligations under this  Agreement.  4.11 Full Recourse.  The obligations of Seller from time to time to pay the Repurchase Price, Margin  Deficit payments, settlement payments and all other amounts due under this Agreement shall be  full recourse obligations of Seller.   ARTICLE 5  FEES  5.1 Payment of Fees.  Seller shall pay to Administrative Agent, on behalf of Buyers, those fees set  forth in this Agreement and the Transactions Terms Letter when they become due and owing.   ARTICLE 6  SECURITY; SERVICING; MARGIN ACCOUNT MAINTENANCE; CUSTODY OF  MORTGAGE LOAN DOCUMENTS; REPURCHASE TRANSACTIONS; DUE DILIGENCE  6.1 Precautionary Grant of Security Interest in Purchased Assets and Purchased Items.  With respect  to the Purchased Assets, although the parties intend that all Transactions hereunder be sales and purchases  (other than for accounting and tax purposes) and not loans, and without prejudice to the provisions of  Section 6.5 and the expressed intent of the parties, if any Transactions are deemed to be loans, and, as  security for the performance of Seller’s obligations hereunder, Seller hereby pledges, assigns and grants  to Administrative Agent, on behalf of Buyers, a continuing first priority security interest in and lien upon  the Purchased Assets and related Purchased Items and Administrative Agent, on behalf of Buyers, shall  have all the rights and remedies of a “secured party” under the Uniform Commercial Code with respect to  the Purchased Assets and related Purchased Items.  Possession of any promissory notes, instruments or  documents by the Custodian shall constitute possession on behalf of Administrative Agent, on behalf of  Buyers.  

 

  16  Error! No document variable supplied.  Seller acknowledges that it has no rights to the Servicing Rights related to any Purchased Mortgage Loan.   Without limiting the generality of the foregoing and for the avoidance of doubt, if any determination is  made that the Servicing Rights related to any Purchased Mortgage Loan were not sold by Seller to  Administrative Agent, on behalf of Buyers, or that the Servicing Rights are not an interest in such  Purchased Mortgage Loan and are severable from such Purchased Mortgage Loan despite Administrative  Agents, Buyers’ and Seller’s express intent herein to treat them as included in the purchase and sale  transaction, Seller hereby pledges, assigns and grants to Administrative Agent, on behalf of Buyers, a  continuing first priority security interest in and lien upon the Servicing Rights related to such Purchased  Mortgage Loans, and Administrative Agent, on behalf of Buyers, shall have all the rights and remedies of  a “secured party” under the Uniform Commercial Code with respect thereto.  In addition, Seller further  grants, assigns and pledges to Administrative Agent, on behalf of Buyers, a first priority security interest  in and lien upon its rights to (i) all documentation and rights to receive documentation related to such  Servicing Rights and the servicing of each of the Purchased Mortgage Loans, (ii) all Income related to the  Purchased Assets received by Seller, (iii) all rights to receive such Income, (iv) all other Purchased Items,  and (v) all products, proceeds and distributions relating to or constituting any or all of the foregoing  (collectively, and together with the pledge of Servicing Rights in the immediately preceding sentence, the  “Related Credit Enhancement”).  The Related Credit Enhancement is hereby pledged as further security  for Seller’s obligations to Administrative Agent, on behalf of Buyers, hereunder.  At any time and from time to time, upon the written request of Administrative Agent, on behalf of  Buyers, and at the sole expense of Seller, Seller will promptly and duly execute and deliver, or will  promptly cause to be executed and delivered, such further instruments and documents and take such  further action as Administrative Agent, on behalf of Buyers, may request for the purpose of obtaining or  preserving the full benefits of this Agreement and of the rights and powers herein granted, including,  without limitation, the filing of any financing or continuation statements under the Uniform Commercial  Code in effect in any jurisdiction with respect to the Purchased Assets and related Purchased Items and  the liens created hereby.  Seller also hereby authorizes Administrative Agent, on behalf of Buyers, to file  any such financing or continuation statement in a manner consistent with this Agreement to the extent  permitted by Applicable Law.  For purposes of the Uniform Commercial Code and all other relevant  purposes, this Agreement shall constitute a security agreement.  6.2 Servicing.  (a) Servicing Rights Owned by Administrative Agent on behalf of Buyers; Administrative  Agent’s Right to Appoint Servicer.  In recognition that each Purchased Mortgage Loan is  sold by Seller to Administrative Agent, on behalf of Buyers, on a servicing released basis  and Administrative Agent, on behalf of Buyers, is the owner of the Servicing Rights  related to such Purchased Mortgage Loan, subject to paragraphs (b) and (c) below,  Administrative Agent, on behalf of Buyers, shall have the sole right to appoint the  Servicer for each Purchased Mortgage Loan.  (b) Appointment of Servicer.  Subject to Administrative Agent’s, on behalf of Buyers, right  to appoint a successor Servicer at any time, subject to Seller’s appointment right set forth  in the first sentence of Section 6.2(n), Administrative Agent, on behalf of Buyers, hereby  appoints FCI Lender Services, Inc. as the Servicer to service the applicable Purchased  Mortgage Loans on behalf of Administrative Agent and Buyers as agent for  Administrative Agent and Buyers for each Transaction for the period between the  Purchase Date and the Repurchase Date of the Purchased Mortgage Loans.  The right of  Servicer to service the Purchased Mortgage Loans is on an interim basis only and does  not provide or confer a contractual, ownership or other right for Servicer to service the  Purchased Mortgage Loans, it being understood that upon payment of the Purchase Price,  

 

  17  Error! No document variable supplied.  Administrative Agent, on behalf of Buyers, owns the Servicing Rights and may assume  servicing or appoint a Successor Servicer at any time, subject to Seller’s appointment  right set forth in the first sentence of Section 6.2(n).  Further, the fact that Servicer may  be entitled to a servicing fee for interim servicing of the Purchased Mortgage Loans or  that Administrative Agent, on behalf of Buyers, may provide a separate notice of default  to Servicer regarding the servicing of the Purchased Mortgage Loans shall not affect or  otherwise change Administrative Agent’s, on behalf of Buyers, ownership of the  Servicing Rights related to the Purchased Mortgage Loans.  (c) Interim Servicing Period; No Servicing Fee or Income.  For each Transaction, Servicer’s  right to interim service a Purchased Mortgage Loan shall commence on the related  Purchase Date and shall automatically terminate without notice on the applicable  Repurchase Date; it being understood that, for the avoidance of doubt, if the Event of  Default or Servicer Termination Event has occurred, Administrative Agent may in its  sole discretion terminate the Servicer upon such occurrence.  Seller shall cause the  Servicer to transfer servicing of the Purchased Mortgage Loan (which shall include the  delivery of all Servicing Records related to such Purchased Mortgage Loan) to  Administrative Agent, on behalf of Buyers, or its designee in accordance with the  instructions of Administrative Agent, on behalf of Buyers, and any other applicable  requirements of this Agreement.  For the avoidance of doubt, upon expiration of the  interim servicing period with respect to any Purchased Mortgage Loan, Servicer shall not  have the right to service the related Purchased Mortgage Loan, it being understood that  upon such expiration, Seller and the Servicer shall promptly transfer the servicing of the  related Purchased Mortgage Loan to Administrative Agent, on behalf of Buyers, or its  designee in accordance with the instructions of Administrative Agent, on behalf of  Buyers, and any other applicable requirements of this Agreement. Administrative Agent,  on behalf of Buyers, shall have no obligation to pay Servicer, nor shall Servicer have any  right to deduct or retain, any servicing fee or similar compensation in connection with the  interim servicing of a Purchased Mortgage Loan.  (d) Servicing Agreement.  If there is a Servicer of the Purchased Mortgage Loans other than  Seller, Administrative Agent, on behalf of Buyers, or an Affiliate of Administrative  Agent, on behalf of Buyers, Seller shall enter into a Servicing Agreement and a Servicer  Notice with such Servicer on behalf of Administrative Agent and Buyers, which such  Servicing Agreement and the related Servicer Notice shall be acceptable to  Administrative Agent, on behalf of Buyers, in its sole discretion.  Administrative Agent,  on behalf of Buyers, may terminate the subservicing of any Purchased Mortgage Loan  with the then existing Servicer in accordance with either Section 6.2(n).  Without the  prior written consent of Administrative Agent, on behalf of Buyers, exercised in  Administrative Agent’s sole discretion, Seller shall not agree to (1) any material, in  Administrative Agent’s sole discretion, modification, amendment or waiver of any  Servicing Agreement, (2) any termination of any Servicing Agreement or (3) the  assignment, transfer, or material deletion of any of its rights or obligations under any  Servicing Agreement.  (e) Servicing Obligations of Seller.  Seller shall, and pursuant to the applicable Servicing  Agreement, Seller shall cause each Servicer to:  (i) service and administer the Purchased Mortgage Loans on behalf of  Administrative Agent and Buyers in accordance with prudent mortgage loan  servicing standards and procedures generally accepted in the mortgage banking  

 

  18  Error! No document variable supplied.  industry and in accordance with the degree of care and servicing standards  generally prevailing in the industry, including all applicable requirements of  Applicable Law or  the requirements of any private mortgage insurer, as  applicable, and the requirements of any applicable insurance or guarantee in  respect of any such Purchased Mortgage Loan, if any, is voided or reduced by  such servicing and administration;  (ii) subject to Section 6.2(g), and to the extent not otherwise held by the Custodian,  at all times maintain and safeguard the Mortgage Loan File for the Purchased  Mortgage Loan in accordance with Applicable Law and lending industry custom  and practice and shall hold such Mortgage Loan File in trust for Administrative  Agent, on behalf of Buyers, and in any event shall maintain and safeguard  photocopies of the documents delivered to Administrative Agent, on behalf of  Buyers, or Custodian, as applicable, pursuant to Section 3.3, and accurate and  complete records of its servicing of the Purchased Mortgage Loan; Seller’s or  Servicer’s possession of such Mortgage Loan File is for the sole purpose of  servicing such Purchased Mortgage Loan and such retention and possession by  Seller or such Servicer is in a custodial capacity only;  (iii) allow Administrative Agent, on behalf of Buyers, to, and Administrative Agent,  on behalf of Buyers, may, at any time during Seller’s business hours on  reasonable notice, examine and make copies of such documents and records (and  Seller shall, upon reasonable notice, cause Servicer to make copies of such  documents and records available to Administrative Agent), and upon reasonable  notice, Seller shall (or shall cause Servicer to) deliver the originals of such  documents and records to Administrative Agent, on behalf of Buyers, or its  designee;  (iv) at Administrative Agent’s written request, promptly deliver to Administrative  Agent, on behalf of Buyers, reports regarding the status of any Purchased  Mortgage Loan being serviced by it; and  (v) advance all reasonable, customary and/or necessary “out of pocket” costs and  expenses (including reasonable attorneys’ fees and disbursements) incurred in the  performance by Seller or such Servicer of its servicing obligations, including, but  not limited to, (1) real estate taxes and assessments (including HOA/COA) and  other charges which are or may become a lien upon the Mortgaged Property, (2)  insurance premiums, (3) expenses necessary to prevent or cure a violation of  Applicable Laws, (4) customary expenses for collection and enforcement of  foreclosure or deficiency judgments and (5) cost of appraisals and valuations.  (f) [Reserved].    (g) Release of Mortgage Loan Files.  Seller shall release its custody of the contents of any  Mortgage Loan File only in accordance with the written instructions of Administrative  Agent, on behalf of Buyers, except when such release is required as incidental to the  servicing of the related Purchased Mortgage Loan and pursuant to and in accordance with  the Custodial Agreement or by law.  (h) Right to Appoint Successor Servicer.  Upon the occurrence and continuance of an Event  of Default, Administrative Agent, on behalf of Buyers, reserves the right, in its sole  

 

  19  Error! No document variable supplied.  discretion, to appoint a successor servicer to service any Purchased Mortgage Loan (each  a “Successor Servicer”).  In the event of such an appointment, Seller or Servicer, as  applicable, shall perform all acts and take all action so that any part of the Mortgage Loan  File and related Servicing Records held by Seller, Guarantor or Servicer, together with all  funds in the Collateral Account and other receipts relating to such Purchased Mortgage  Loan, are promptly delivered to the Successor Servicer.  Seller shall have no claim for  servicing fees, lost profits or other damages if Administrative Agent, on behalf of Buyers,  appoints a Successor Servicer hereunder.  (i) Collateral Account.  (i) Upon request of Administrative Agent, Seller shall establish and maintain, or  shall cause Servicer to establish and maintain, a segregated time or demand  deposit account with the Account Bank for the benefit of Administrative Agent,  on behalf of Buyers, (the “Collateral Account”).  If established, Seller shall  promptly deposit or cause Servicer to deposit (but in no event later than the date  set forth in the applicable Servicing Agreement and Servicer Notice) into the  Collateral Account all Income received with respect to each Purchased Asset sold  hereunder.  The Collateral Account may not be a deposit account that is  established to serve as a custodial account for mortgage loans that any Seller or  Servicer services for other parties. Under no circumstances shall Seller or  Servicer deposit any of its own funds into the Collateral Account or otherwise  commingle its own funds with funds belonging to Administrative Agent or any  Buyer as owner of any Purchased Asset.  If Seller or Servicer fails to segregate  any funds and commingles them with any source in breach of this Agreement,  Seller or Servicer agrees that its share of the commingled funds is assumed to  have been spent first with any remaining balance to be deemed to belong to  Administrative Agent or such Buyer.  (ii) Upon establishment, Seller is hereby deemed to grant and hereby grants to  Administrative Agent, on behalf of Buyers, a continuing first priority security  interest in (1) all right, title, and interest in and to the Collateral Account and (2)  any funds of Seller at any time deposited or held in the Collateral Account,  whether such funds are required to be deposited and held in the Collateral  Account or otherwise.  Unless the Administrative Agent is the account bank in  respect of the Collateral Account, Seller shall, as a condition precedent to  Administrative Agent and any Buyer’s entry into any Transaction hereunder,  cause the Account Bank to enter into the Account Control Agreement with  respect to the Collateral Account.  The pledge and security interest contained in  this paragraph shall be considered “a security agreement or other arrangement or  other credit enhancement” that is “related to” the Agreement and Transactions  hereunder within the meaning of Bankruptcy Code Sections 101(38A)(A),  101(47)(a)(v) and 741(7)(A)(x).  Seller understands and agrees that the Collateral  Account shall be subject to an Account Control Agreement; provided, that no  Account Control Agreement shall be required if Administrative Agent is the  account bank with respect to the Collateral Account.   (iii) Any Income received with respect to a Purchased Asset purchased hereunder  (other than any interest accrued thereon during the period of time up to but not  including the Purchase Date for such Purchased Asset), shall be segregated as  described above and held in trust for the exclusive benefit of Administrative  

 

  20  Error! No document variable supplied.  Agent, on behalf of Buyers, as the owner of such Purchased Asset.  If any  Income is deposited into the Collateral Account it shall be released only as  follows:  (1) if a Successor Servicer is appointed by Administrative Agent, on behalf  of Buyers, all amounts deposited in the Collateral Account with respect  to Purchased Mortgage Loans to be so serviced shall be transferred into  an account established by the Successor Servicer pursuant to its  agreement with Administrative Agent, on behalf of Buyers;  (2) after the occurrence and during the continuance of an Event of Default,  upon instruction by Administrative Agent, on behalf of Buyers;  (3) prior to the occurrence and continuance of an Event of Default such  amounts shall be applied as follows   1. first, in satisfaction of accrued and outstanding  fees and expenses of Administrative Agent incurred in  connection with any Transaction, including satisfaction of any  Margin Deficit;  2. second, in satisfaction of the fees and expenses  of Buyers allocated pro rata in accordance with its Allocation  Percentage of any such fees and expenses incurred in connection  with any Transaction;  3. third, in satisfaction of any outstanding  repurchase obligations of Seller in connection with any  Purchased Asset or related Purchased Item;  4. fourth, at the direction of Seller.   After the occurrence of an Event of Default, all items or amounts  which are remitted to the Collateral Account, or otherwise  delivered by or for the benefit of Seller to Administrative Agent,  on behalf of Buyers, on account of partial or full payment of, or  with respect to, any repurchase obligations (including, without  limitation, any Income) shall, at Administrative Agent’s option,  be applied to the payment of the repurchase obligations, whether  then due or not, in such order or at such time of application as  Administrative Agent may determine in its sole discretion. Seller  agrees that Administrative Agent and Buyers shall not be liable  for any loss or damage which Seller may suffer as a result of  Administrative Agent’s processing of items or its exercise of any  other rights or remedies under this Agreement, or any other  Principal Agreement, including without limitation indirect,  special or consequential damages, loss of revenues or profits, or  any claim, demand or action by any third party arising out of or  in connection with the processing of items or the exercise of any  other rights or remedies under this Agreement or any other  Principal Agreement.  

 

  21  Error! No document variable supplied.  Administrative Agent, Buyers and Seller intend and agree that all such payments shall be  “settlement payments” as such term is defined in Bankruptcy Code Section 741(8).  (j) Location of Collateral Account.  Seller shall ensure that there is no change in the identity  or the location of the Collateral Account without the prior written consent of  Administrative Agent, on behalf of Buyers.    (k) Accounting of Collateral Account. If applicable, Seller shall provide, and shall cause  Servicer to provide, Administrative Agent, on behalf of Buyers, with read-only access to  the Collateral Account.  Seller shall promptly deliver to each of Administrative Agent  photocopies of all periodic bank statements and other records relating to the Collateral  Account as Administrative Agent, on behalf of Buyers, may from time to time request.  (l) Servicer Notice.  As a condition precedent to Administrative Agent, on behalf of Buyers,  funding the Purchase Price for any Purchased Mortgage Loan serviced by a Servicer  other than Seller, Buyer, or an Affiliate of Administrative Agent, the Seller shall provide  to Administrative Agent, on behalf of Buyers, a Servicer Notice addressed to and agreed  to by the Servicer, advising the Servicer of such matters as Administrative Agent, on  behalf of Buyers, may reasonably request, including, without limitation, recognition by  the Servicer of Administrative Agent’s interest in such Purchased Mortgage Loans and  ownership of the Servicing Rights related thereto 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 servicing of the related  Purchased Mortgage Loans.  (m) Notification of Servicer Defaults.  If Seller should discover that for any reason  whatsoever, any entity responsible to Seller by contract for managing or servicing any  Purchased Mortgage Loan has failed to perform fully Seller’s obligations with respect to  the management or servicing of such Purchased Mortgage Loan as required under this  Agreement or any of the obligations of such entities with respect to the Purchased  Mortgage Loan as delegated by Seller pursuant to any Servicing Agreement, where, in  each case, such failure either constitutes a Servicer Termination Event or has an adverse  effect on the Purchased Mortgage Loans or Buyer’s rights therein, then Seller shall  promptly notify Administrative Agent, on behalf of Buyers.  (n) Termination.  If a Servicer Termination Event shall occur (which has not been waived by  Administrative Agent, on behalf of Buyers, in its sole and absolute discretion) and no  Event of Default has occurred and is continuing, then Seller shall have the right to  designate a successor Servicer acceptable to Administrative Agent, on behalf of Buyers,  in Administrative Agent’s reasonable discretion, by proposing the identity of such  successor Servicer to Administrative Agent in writing no later than [***] following the  applicable Servicer Termination Event.  If (x) Seller has not proposed a successor  Servicer to Administrative Agent in writing within [***] following the applicable  Servicer Termination Event in accordance with the immediately preceding sentence; (y)  Administrative Agent has not accepted, in Administrative Agent’s sole good faith  discretion, the successor Servicer proposed by Seller to Administrative Agent in  accordance with the immediately preceding sentence within [***] following such  applicable Servicer Termination Event (provided that Seller shall be entitled to propose  an alternate successor Servicer within [***] following Administrative Agent’s failure to  approve any successor Servicer proposed by Seller); or (z) the actual servicing of the  Purchased Mortgage Loans has not been transferred to the successor Servicer proposed  

 

  22  Error! No document variable supplied.  by Seller and in accordance with the immediately preceding sentence and accepted by  Administrative Agent, in Administrative Agent’s sole good faith discretion, within ninety  [***] following the applicable Servicer Termination Event, then Administrative Agent  shall have the right at any time to immediately terminate, and Seller shall terminate any  Servicer’s (as applicable) right to service the Purchased Mortgage Loans due to a  Servicer Termination  Event without payment of any penalty or termination fee.  Seller  shall cooperate, or cause the applicable Servicer to cooperate, in transferring the servicing  of the Purchased Mortgage Loans to a successor servicer appointed or accepted, as  applicable, by Administrative Agent in accordance with the terms hereof.  For the  avoidance of doubt any termination of a Servicer’s rights to service by Administrative  Agent as a result of an Event of Default of the type stated in Section 11.1(r) that has not  been waived shall be deemed part of an exercise of Administrative Agent’s rights to  cause the liquidation, termination or acceleration of this Agreement.  (o) Administrative Agent’s Right to Service.  Administrative Agent, on behalf of Buyers, or  its designee, upon the occurrence of an Event of Default or, subject to Seller’s  appointment right set forth in the first sentence of Section 6.2(n), a Servicer Termination  Event, shall be entitled to service some or all of the Purchased Assets that are Purchased  Mortgage Loans, including, without limitation, receiving and collecting all sums payable  in respect of same.  Upon Administrative Agent’s determination and written notice to  Seller or a Servicer, with a copy to Seller, as applicable, that Administrative Agent  desires to service some or all of the Purchased Mortgage Loans following the occurrence  of an Event of Default, or, subject to Seller’s appointment right set forth in the first  sentence of Section 6.2(n), a Servicer Termination Event, Seller shall promptly  cooperate, and Seller shall cause the Servicer to promptly cooperate, with all instructions  of Administrative Agent and do or accomplish all acts or things necessary to effect the  transfer of the servicing to Administrative Agent or its designee, at Seller’s sole expense.   Upon Administrative Agent’s or its designee’s servicing of the Purchased Mortgage  Loans, (i) Administrative Agent may, in its own name, in the name of Seller, or otherwise  demand, sue for, collect or receive any money or property at any time payable or  receivable on account of or in exchange for such Purchased Mortgage Loan(s), but shall  be under no obligation to do so; (ii) Seller shall, if Administrative Agent so requests, pay  to Administrative Agent all amounts received by Seller upon or in respect of such  Purchased Mortgage Loan(s) or other Purchased Assets, advising Administrative Agent  as to the source of such funds; and (iii) all amounts so received and collected by  Administrative Agent, on behalf of Buyers, shall be held as part of the Purchased Assets  or applied against any outstanding Repurchase Price owed Administrative Agent or any  Buyer.  6.3 Margin Account Maintenance.  (a) Asset Value.  Administrative Agent, on behalf of Buyers, shall have the right to  determine the Asset Value of each Purchased Asset at any time.  (b) Margin Deficit and Margin Call.  If Administrative Agent, on behalf of Buyers, shall  determine on any Business Day that the Minimum Maintenance Amount with respect to  the Purchased Assets is less than the Aggregate Outstanding Purchase Price of all  Transactions (in any such case, a “Margin Deficit”), then Administrative Agent, on  behalf of Buyers, may at its sole option, and by notice to Seller (as such notice is more  particularly set forth below, a “Margin Call”), require Seller to either:  

 

  23  Error! No document variable supplied.  (i) deposit cash into the Funding Account so that the Minimum Maintenance  Amount will thereupon equal or exceed the Aggregate Outstanding Purchase  Price (for purposes of clarity, after giving effect to any credit to the Purchase  Price of the related Transaction(s) pursuant to Section 6.3(d)) of all Transactions;  or  (ii) pay one or more Repurchase Prices, as applicable, in an amount sufficient to  reduce the related Purchase Price so that the Aggregate Outstanding Purchase  Price of all Transactions is less than or equal to the Minimum Maintenance  Amount.  If Administrative Agent, on behalf of Buyers, delivers a Margin Call to Seller on any  Business Day, then Seller shall transfer cash to Administrative Agent no later than 5:00  p.m. (New York City time) on the next Business Day.  Notice of a Margin Call may be  provided by Administrative Agent, on behalf of Buyers, to Seller electronically or in  writing, such as via electronic mail.  (c) Administrative Agent’s Discretion.  Administrative Agent’s election not to make a  Margin Call at any time there is a Margin Deficit shall not in any way limit or impair its  right to make a Margin Call at any time a Margin Deficit exists.  (d) Credit to Repurchase Price.  Any cash transferred to the Funding Account pursuant to this  Section 6.3 shall be credited to the Purchase Price of the related Transaction(s).  6.4 Repurchase and Release of Purchased Assets.  Provided that no Event of Default, Event of Early  Termination or Potential Default has occurred and is continuing, Seller may repurchase a  Purchased Asset by paying, or causing an Approved Investor to pay, to Administrative Agent in  accordance with Administrative Agent’s wire instructions set forth on Exhibit F, subject to  Sections 4.6 and 4.7, the Repurchase Price.  Upon receipt of the applicable Repurchase Price and, in the event the applicable Repurchase Price  is received pursuant to Section 6.3(b)(ii), upon written request from Seller to Administrative  Agent, as applicable, as set forth above, Administrative Agent, on behalf of Buyers, shall deliver  or shall cause the Custodian to deliver the related Mortgage Loan Documents to Seller or its  designee, if such documents have not already been delivered pursuant to a Bailee Agreement.  If  any such release gives rise to or perpetuates a Margin Deficit, Administrative Agent, on behalf of  Buyers, shall notify Seller of the amount thereof and Seller shall thereupon satisfy the Margin  Deficit in the manner specified in Section 6.3(b).  Administrative Agent and Buyers shall have no  obligation to release a repurchased Purchased Asset or terminate its security interest in such  Purchased Asset until such Margin Deficit is satisfied and, in the event the applicable amount is  received pursuant to Section 6.3(b)(ii), Seller has provided a prior written request for such  release.  6.5 Repurchase Transactions.  Beginning on the related Purchase Date and prior to the related  Repurchase Date for a Transaction, Administrative Agent and Buyers shall have free and  unrestricted use of all related Purchased Assets and may in its discretion and without notice to  Seller engage in repurchase transactions with respect to any or all of such Purchased Assets or  otherwise pledge, hypothecate, assign, transfer or convey any or all of such Purchased Assets  (such transactions, “Repurchase Transactions”), provided that no such Repurchase Transaction  shall relieve Administrative Agent or any such Buyer of its obligation to transfer Purchased  Assets to Seller (and not substitutions thereof) pursuant to the terms hereof.  Nothing contained in  

 

  24  Error! No document variable supplied.  this Agreement shall obligate Administrative Agent or Buyers to segregate any Purchased Asset  or Purchased Item delivered to Administrative Agent, on behalf of Buyers, by Seller.  Seller shall  not be responsible for any additional obligations, costs or fees in connection with such  Repurchase Transactions.  Other than for tax purposes, Seller shall not take any action  inconsistent with Administrative Agent’s or Buyer’s ownership of a Purchased Asset and shall  not claim any legal, beneficial or other interest in such a Purchased Asset other than the limited  right and obligations to provide servicing of such Purchased Mortgage Loans where  Administrative Agent, on behalf of Buyers, designates Seller as servicer as provided in  Section 6.2.  6.6 Periodic Due Diligence.  Seller acknowledges that Administrative Agent and Buyers have the  right at any time during the term of this Agreement to perform continuing due diligence reviews  with respect to the Purchased Assets, for purposes of verifying compliance with the  representations, warranties, covenants and specifications made hereunder or under any other  Principal Agreement, or otherwise, and Seller agrees that upon reasonable (but no less than one  [***]) prior notice to Seller (provided that upon the occurrence of a Potential Default or an Event  of Default which has not been waived by Administrative Agent, on behalf of Buyers, in writing,  no such prior notice shall be required), Administrative Agent, on behalf of Buyers, or its  authorized representatives will be permitted during normal business hours to (i) examine, inspect,  make copies of, and make extracts of, the Mortgage Loan Files, the Servicing Records and any  and all documents, records, agreements, instruments or information relating to such Purchased  Assets in the possession, or under the control, of Seller, Guarantor, Custodian or Servicer  (including, and not limited to, any and all documents, records, agreements, instruments or  information relating to any report delivered pursuant to Section 9.2(h)) and (ii) discuss the  business, operations, assets and financial condition of Seller and its Affiliates and Subsidiaries  with its officers and employees and to examine its books of account and make copies and/or  extracts thereof.  Further, Seller will make available to Administrative Agent, on behalf of  Buyers, at such time and location as Administrative Agent may reasonably request, a  knowledgeable financial or accounting officer and will instruct such officer to answer candidly  and fully, at no cost to Administrative Agent or Buyers, any and all reasonable questions that any  authorized representative of Administrative Agent or Buyers may address to them in reference to  the Mortgage Loan Files, Purchased Assets and the financial condition or affairs of Seller and its  Affiliates and Subsidiaries.  Without limiting the generality of the foregoing, Seller acknowledges  that Administrative Agent, on behalf of Buyers, shall purchase Assets from Seller based solely  upon the information provided by Seller to Administrative Agent or Buyers in the Transaction  Request and the representations, warranties and covenants contained herein, and that  Administrative Agent and Buyers, at its option, has the right, at any time to re-underwrite any of  the Purchased Assets itself or engage a third party underwriter to perform such re-underwriting.   Seller agrees to cooperate with Administrative Agent and Buyers and any third party underwriter  in connection with such re-underwriting, including, but not limited to, providing Administrative  Agent and Buyers and any third party underwriter with access to any and all documents, records,  agreements, instruments or information relating to Seller and such Purchased Assets in the  possession, or under the control, of Seller.  Seller and Buyer further agree that all reasonable and  documented out-of-pocket costs and expenses incurred by Administrative Agent or Buyers in  connection with Administrative Agent’s or such Buyer’s, as applicable, activities pursuant to this  Section 6.6 shall be paid by Seller.  

 

  25  Error! No document variable supplied.  ARTICLE 7  CONDITIONS PRECEDENT  7.1 Initial Transaction.  As conditions precedent to Administrative Agent, on behalf of Buyers,  considering whether to enter into the initial Transaction hereunder:  (a) Seller shall have delivered to Administrative Agent, on behalf of Buyers, in form and  substance satisfactory to Administrative Agent:  (i) each of the Principal Agreements duly executed by each party thereto and in full  force and effect, free of any modification, breach or waiver;  (ii) an opinion of Seller’s and Guarantor’s counsel as to such matters as  Administrative Agent may reasonably request, including, without limitation, with  respect to Administrative Agent’s, on behalf of Buyers, first priority lien on and  perfected security interest in the Purchased Assets and Purchased Items; a non- contravention, enforceability and corporate opinion with respect to Seller and  Guarantor; an opinion with respect to the inapplicability of the Investment  Company Act of 1940 and the “Volcker Rule” (Section 619 of the Dodd Frank  Wall Street Reform and Consumer Protection Act), with respect to Seller; and a  Bankruptcy Code opinion with respect to the matters outlined in Section 15.18,  each in form and substance acceptable to Administrative Agent;  (iii) [reserved];  (iv) (1) an officer’s certificate substantially in the form of Exhibit L, (2) a certified  copy of Seller’s certificate of formation and limited liability company agreement  and Guarantor’s articles of incorporation and bylaws, (3) resolutions of the board  of directors of Seller and Guarantor (or its equivalent governing body or Person)  authorizing the Seller and Guarantor to enter into, perform and execute the  Principal Agreements substantially in the form of Exhibit M or such other form  acceptable to Administrative Agent in its sole and absolute discretion, (4) one or  more certificates of Seller’s and Guarantor’s corporate secretary as to the  incumbency and authenticity of the signatures of the officers of Seller and  Guarantor executing the Principal Agreements and (5) a certificate of good  standing issued by the appropriate official in Seller’s and Guarantor’s applicable  jurisdiction of organization dated no less recently than ten (10) days prior to the  Effective Date unless otherwise agreed by the Administrative Agent;  (v) independently audited financial statements of Seller and Guarantor (and its  Subsidiaries, on a consolidated basis) for each of the two (2) fiscal years most  recently ended (if available), containing a balance sheet and related statements of  income, stockholders’ equity and cash flows, all prepared in accordance with  GAAP, applied on a basis consistent with prior periods, and otherwise acceptable  to Administrative Agent, together with an auditor’s opinion that is unqualified or  otherwise is consented to in writing by Administrative Agent, on behalf of  Buyers;  (vi) interim financial statements of Seller and Guarantor (and its Subsidiaries, on a  consolidated basis) covering the period from the first day of the current fiscal  year to the last day of the most recently ended month;  

 

  26  Error! No document variable supplied.  (vii) copies of Seller’s errors and omissions insurance policy or mortgage impairment  insurance policy and blanket bond coverage policy or certificates of insurance for  such policies, all in form and content satisfactory to Administrative Agent,  showing compliance by Seller with Section 9.8;  (viii) if required by Administrative Agent or any Buyer, a subordination agreement, in  form and substance satisfactory to Administrative Agent or such Buyer, executed  by any Person which is, as of the Effective Date, a creditor of Seller, including  each Affiliate of Seller that is a creditor of Seller;  (ix) any other fees then due and owing under this Agreement and the Transactions  Terms Letter;  (x) a copy of the Underwriting Guidelines for Mortgage Loans, as amended from  time to time;  (xi) the Commitment Fee, the Draw Fee and any other fees then due and owing under  this Agreement and the Transactions Terms Letter;   (xii) documentation necessary to establish that Seller and Guarantor are exempt from  U.S. federal and backup withholding Taxes.  (xiii) the Aggregate Outstanding Purchase Price for any Type of Transaction shall not  exceed the applicable Type Sublimit or Maximum Dwell Time.  (b) Administrative Agent, on behalf of Buyers, shall have determined that it has received (1)  satisfactory evidence that the appropriate Uniform Commercial Code Financing  Statements (UCC-1), including, a Uniform Commercial Code Financing Statement  (UCC-1) indicating Administrative Agent, on behalf of Buyers, as the secured party, and  Seller as the debtor, attaching an exhibit to such Uniform Commercial Code Financing  Statements (UCC-1) substantially in the form of Exhibit N attached hereto, and/or (2)  such other instruments as may be necessary in order to create in favor of Administrative  Agent, on behalf of Buyers, a perfected first-priority security interest in the Purchased  Assets and related Purchased Items should any of the Transactions be deemed to be  loans, and, in each case, the same shall have been duly executed and appropriately filed  or recorded in each office of each jurisdiction in which such filings and recordations are  required to perfect such first-priority security interest.  (c) Administrative Agent and each Buyer shall have determined that it has satisfactorily  completed its due diligence review of Seller’s and Guarantor’s operations, business,  financial condition and underwriting and origination of Mortgage Loans.  (d) Seller and Guarantor shall have provided such other documents as Administrative Agent,  on behalf of Buyers, or its counsel, shall have requested.  (e) Seller shall have funded into the Collateral Account the Collateral Account Minimum  Balance.  7.2 All Transactions.  As conditions precedent to Administrative Agent, on behalf of Buyers,  considering whether to enter into any Transaction hereunder (including the initial Transaction):  

 

  27  Error! No document variable supplied.  (a) Seller shall have delivered to Administrative Agent, on behalf of Buyers, in form and  substance satisfactory to Administrative Agent and not later than 5:00 p.m. (New York  City time) on the requested Purchase Date:  (i) a Transaction Request for the Assets subject to the proposed Transaction;  (ii) unless such Mortgage Loan is a Wet Mortgage Loan, (x) with respect to  Mortgage Loan Files held by Flagstar Bank, FSB, as Custodian, the Mortgage  Loan File has been delivered to the Custodian (A) with respect to any purchase of  [***] or fewer Mortgage Loans on a [***], on or prior to 10:30 a.m. (New York  City time) on the [***], and (B) with respect to any purchase of [***] or more  Mortgage Loans on [***], at least twenty-four (24) hours prior to the [***] or (y)  with respect to Purchased Mortgage Loans held by a Custodian that is not  Flagstar Bank, FSB, each Mortgage Loan File has been delivered to the  Custodian in accordance with the requirements of the Custodial Agreement; and  (iii) such other documents as Administrative Agent, on behalf of Buyers, or its  counsel, shall have requested.  (b) Seller shall have delivered to Administrative Agent, on behalf of Buyers, in form and  substance satisfactory to Administrative Agent and not later than 5:00 p.m.  (New York  City time) on the Business Day prior to the Purchase Date an estimate, in each case  executed by Seller, of the aggregate Purchase Price for all Transactions with respect to  which Seller anticipates that Seller will deliver, or has delivered, Transaction Requests  with respect to such Purchase Date;  (c) Seller shall have paid all fees (including Unused Fees, Late Payment Fees, Aging Fees,  and Draw Fees), expenses, indemnity payments and other amounts that are then due and  owing under the Principal Agreements;  (d) no rescission notice and/or notice of right to cancel shall have been improperly delivered  to the Mortgagor in respect of any Eligible Mortgage Loan, and the rescission period  related to such Eligible Mortgage Loan shall have expired;  (e) with respect the first Transaction occurring [***] following the Effective Date, a Power of  Attorney duly executed by Seller and notarized to be delivered;  (f) the representations and warranties of Seller set forth in Article 8 hereof shall be true and  correct in all material respects as if made on and as of the date of each Transaction and  the representations of Guarantor set forth in the Guaranty shall be true and correct in all  material respects as if made on and as of the date of each Transaction.  At the request of  Administrative Agent, on behalf of Buyers, Administrative Agent shall have received an  officer’s certificate signed by a responsible officer of Seller and Guarantor certifying as  to the truth and accuracy of same;  (g) Seller shall have performed all agreements to be performed by them hereunder;  (h) no Potential Default, Event of Early Termination, Event of Default, Material Adverse  Effect with respect to Seller or Guarantor or Cease Funding Event shall have occurred  and be continuing or would result from such Transaction;  

 

  28  Error! No document variable supplied.  (i) no Servicer Termination Event shall have occurred and be continuing and to the extent  not already provided, a Servicing Agreement duly executed by the Servicer and Seller or  a Servicer Notice, if applicable, shall have been delivered to Administrative Agent, on  behalf of Buyers, and the current Servicer has been approved by Administrative Agent;  (j) to the extent any amendments or updates to the Underwriting Guidelines relate to the  Mortgage Loans proposed to be subject to such Transaction, Administrative Agent, on  behalf of Buyers, shall have received a copy of any such amendments or updates certified  by Seller to be a true and complete copy (to the extent not already delivered to  Administrative Agent, on behalf of Buyers) that clearly identifies the changes to the  underwriting guidelines and Administrative Agent, on behalf of Buyers, shall have  approved such amendments or updates.  Any such amendment shall not apply to  Transactions entered into prior to the effective date of the amendment and in no event  shall the amendment apply to any Transaction on a retroactive basis.  Any such  amendment or update may be rejected by Administrative Agent, on behalf of Buyers, in  its sole and absolute discretion, by delivering notice of such rejection to Seller following  receipt thereof and, for purposes of clarity, any such underwriting guidelines shall, for all  purposes hereunder, exclude any such rejected amendment or update;  (k) if applicable, Seller shall have deposited (or have caused the Servicer to deposit) all  amounts required under Section 6.2(i) into the Collateral Account;  (l) [Reserved];  (m) the Purchase Price for each proposed Transaction shall not cause (i) the Aggregate  Outstanding Purchase Price to exceed the Aggregate Transaction Limit, and (ii) the  Aggregate Outstanding Purchase Price for all relevant Purchased Assets to exceed any  Type Sublimit, as applicable;  (n) without the prior approval of Administrative Agent, on behalf of Buyers, the Purchase  Date for any Transaction shall only occur on a Business Day;  (o) Administrative Agent and Buyers shall have determined that it has satisfactorily  completed, in the reasonable discretion of Administrative Agent or any such Buyer, any  due diligence with respect to Seller, Guarantor, the Purchased Assets, the Transaction or  any other matters;  (p) [reserved];   (q) the Aggregate Outstanding Purchase Price for any Type of Transaction shall not exceed  the applicable Type Sublimit or Maximum Dwell Time;  (r) Administrative Agent shall have determined, in its sole discretion, that none of the  following shall have occurred and/or be continuing:   (i) a material adverse change in the financial condition of Administrative Agent  which causes, or would be likely to cause, a material adverse effect on the ability  of Administrative Agent to fund any of its obligations under this Agreement; or  an event or events shall have occurred in the good faith determination of  Administrative Agent resulting in: (i) the effective absence of a “lending market”  for financing debt obligations secured by mortgage loans or securities or an event  

 

  29  Error! No document variable supplied.  or events shall have occurred resulting in Administrative Agent not being able to  finance transactions through the “lending market” with traditional counterparties  at rates which would have been reasonable prior to the occurrence of such event  or event; or (ii) the effective absence of a “whole loan market”, “securities  market” for securities backed by mortgage loans or an event or events shall have  occurred, resulting in Administrative Agent not being able to sell whole loans or  securities backed by mortgage loans at prices which would have been reasonable  prior to such event or event;  (s) all Purchased Assets subject to a Transaction, and which have not been repurchased by  Seller, shall be Eligible Assets; and  (t) all other documents as Administrative Agent or its counsel shall have requested,  including, without limitation, appraisals, zoning reports, financial information for the  related Mortgagor, and any other information related to the related Mortgagor or the  related Mortgaged Property.  For the avoidance of doubt, notwithstanding that the foregoing conditions may be satisfied with respect to  any Transaction request, Administrative Agent and Buyers shall be under no obligation to enter into any  Transaction and whether Administrative Agent or any Buyer enters into any Transaction shall be at the  discretion of Administrative Agent and each Buyer.  7.3 Satisfaction of Conditions.  The entering into of any Transaction prior to or without the  fulfillment by Seller of all the conditions precedent thereto, whether or not known to  Administrative Agent or Buyers, shall not constitute a waiver by Administrative Agent or any  Buyer of the requirements that all conditions, including the non- performed conditions, shall be  required to be satisfied with respect to all Transactions.  All conditions precedent hereunder are  imposed solely and exclusively for the benefit of Administrative Agent, on behalf of Buyers, and  may be freely waived or modified in whole or in part by Administrative Agent, on behalf of  Buyers.  Any waiver or modification asserted by Seller to have been agreed by Administrative  Agent, on behalf of Buyers, must be in writing.  Administrative Agent and Buyers shall not be  liable to Seller for any costs, losses or damages arising from Administrative Agent’s  determination that Seller has not satisfactorily complied with any applicable condition precedent.  ARTICLE 8  REPRESENTATIONS AND WARRANTIES  8.1 Representations and Warranties Concerning Seller.  Seller represents and warrants to and  covenants with Administrative Agent and each Buyer that the following representations and  warranties are true and correct as of the Effective Date through and until the date on which all  obligations of Seller under this Agreement are fully satisfied:   (a) Due Formation and Good Standing.  It (i) is duly organized, validly existing and in good  standing under the laws of the jurisdiction of its organization, (ii) has the full legal power  and authority and has all governmental licenses, authorizations, consents and approvals,  necessary to own its property and to carry on its business as currently conducted, and  (iii) is duly qualified to do business and is in good standing in each jurisdiction in which  the transaction of its business makes such qualification necessary.  (b) Authorization.  The execution, delivery and performance by it of the Principal  Agreements and all other documents and transactions contemplated thereby, are within its  

 

  30  Error! No document variable supplied.  limited liability company powers, have been duly authorized by all necessary limited  liability company action and do not constitute or will not result in (i) a breach of any of  the terms, conditions or provisions of its certificate of formation or operating agreement  (or corresponding organizational documents if it is not a limited liability company); (ii) a  material breach of any legal restriction or any material agreement or instrument to which  it is now a party or by which it is bound; (iii) a material default or an acceleration under  any of the foregoing; or (iv) the violation of any law, rule, regulation, order, judgment or  decree to which it or its property is subject.  (c) Enforceable Obligation.  The Principal Agreements and all other documents  contemplated thereby constitute legal, binding and valid obligations of it, enforceable  against it in accordance with their respective terms, except as limited by bankruptcy,  insolvency or other similar laws affecting the enforcement of creditor’s rights.  (d) Approvals.  The execution and delivery of the Principal Agreements and all other  documents contemplated thereby and the performance of its obligations thereunder do not  require any license, consent, approval, authorization or other action of any Governmental  Authority or any other Person, or if required, such license, consent, approval,  authorization or other action has been obtained prior to the Effective Date.  (e) Compliance with Laws.  It is not in violation of any of its certificate of formation or  operating agreement (or corresponding organizational documents if it is not a limited  liability company), of any provision of any Applicable Law, or of any judgment, award,  rule, regulation, order, decree, writ or injunction of any court or public regulatory body or  authority.  (f) Financial Condition.  All financial statements of Seller (and its Subsidiaries, on a  consolidated basis) delivered to Administrative Agent, on behalf of Buyers, fairly and  accurately present the financial condition of the parties for whom such statements are  submitted.  The consolidated financial statements of Seller have been prepared in  accordance with GAAP consistently applied throughout the periods involved, and there  are no contingent liabilities not disclosed thereby that would adversely affect the financial  condition of Seller.  Since the close of the period covered by the latest financial statement  delivered to Administrative Agent, on behalf of Buyers, with respect to Seller, there has  been no material adverse change in the assets, liabilities or financial condition of Seller  nor is it aware of any facts that, with or without notice or lapse of time or both, would or  could result in any such material adverse change.  No event has occurred, including,  without limitation, any litigation or administrative proceedings, and no condition exists  or, to the knowledge of it, is threatened, that (i) could be expected to render it unable to  perform its obligations under the Principal Agreements and all other documents  contemplated thereby; (ii) could constitute a Potential Default or Event of Default; or (iii)  could result in a Material Adverse Effect.  (g) Credit Facilities.  The only credit facilities, including repurchase agreements for  mortgage loans and mortgage-backed securities, of Seller that are presently in effect and  are secured by mortgage loans or provide for the purchase, repurchase or early funding of  mortgage loan sales, are with Persons disclosed to Administrative Agent, on behalf of  Buyers, at the time of application, or thereafter disclosed to Administrative Agent, on  behalf of Buyers, in accordance with Section 9.1.  

 

  31  Error! No document variable supplied.  (h) Title to Assets.  It has good, valid, insurable (in the case of real property) and marketable  title to all of its properties and other assets, whether real or personal, tangible or  intangible, reflected on the financial statements delivered to Administrative Agent, on  behalf of Buyers, except for such properties and other assets that have been disposed of in  the ordinary course of business of its business, and all such properties and other assets are  free and clear of all liens except as disclosed in such financial statements.  (i) Litigation.  Except as set forth on Schedule 5 hereto, there is no action, proceeding or  investigation pending with respect to which Seller has received service of process or, to  the best of Seller’s knowledge threatened against it before any court, administrative  agency or other tribunal (A) making a claim individually in an amount greater than [***]  or in an aggregate amount greater than [***] or (B) which challenges the validity or  enforceability of any Principal Agreement.    (j) Payment of Taxes.  It and its Subsidiaries have timely filed all Federal, all income and all  other material tax returns and reports required to be filed and has paid all income and  other material taxes, assessments, fees and other governmental charges levied upon it or  its property or income (whether or not shown on such tax returns) that are due and  payable, including interest and penalties, or has provided adequate reserves for the  payment thereof in accordance with GAAP and, in the case of an assessment, is  contesting such payment in good faith and by proper proceedings.  Any taxes, fees and  other governmental charges payable by it or its Subsidiaries in connection with a  Transaction and the execution and delivery of the Principal Agreements have been paid.  (k) No Defaults.  It is not in default (after giving effect to all applicable grace or cure  periods) under any Debt in excess of [***] to which it is a party or by which it is bound in  any respect, where the occurrence of such default permits the acceleration of such Debt.  (l) ERISA.  Each Plan is in compliance in all material respects with the requirements of  ERISA and the Code, and no Reportable Event has occurred with respect to any Plan.   Except as would not reasonably be expected to have a Material Adverse Effect, no Plan is  considered to be an “at-risk” plan within the meaning of Section 430 of the Code or  Section 303 of ERISA. Except as would not reasonably be expected to have a Material  Adverse Effect, Seller does not provide or have any obligation to provide or have any  liability with respect to any material medical or health benefits to former employees other  than as required by the Consolidated Omnibus Budget Reconciliation Act, as amended, or  similar state or local law (collectively, “COBRA”).  None of the assets of Seller are  “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101, as modified by  Section 3(42) of ERISA. Seller is not subject to any law applicable to governmental  plans, which is similar to the provisions of Section 406 of ERISA or Section 4975 of the  Code and that would be violated by any of the Transactions. Seller and ERISA Affiliates  have made all required contributions to each Plan, and to each Multiemployer Plan to  which it is obligated to contribute, except as would not reasonably be expected to result  in a Material Adverse Effect. Except as would not reasonably be expected to have a  Material Adverse Effect, no event or condition described in clauses (a) through (f) of  Section 9.10 has occurred or exists, other than an event or condition with respect to  which notice has been provided in accordance with Section 9.10.  (m) True and Complete Disclosure.  The information, reports, financial statements, exhibits  and schedules furnished in writing, or made available for viewing, by or on behalf of  Seller or any of its Affiliates or Subsidiaries to Administrative Agent, on behalf of  

 

  32  Error! No document variable supplied.  Buyers, in connection with the negotiation, preparation or delivery of this Agreement and  the other Principal Agreements or included herein or therein or delivered pursuant hereto  or thereto, when taken as a whole, do not contain any untrue statement of material fact or  omit to state any material fact necessary to make the statements herein or therein, in light  of the circumstances under which they were made, not misleading.  All written  information furnished or made available, as applicable, after the date hereof by or on  behalf of Seller or any of its Affiliates or Subsidiaries to Administrative Agent, on behalf  of Buyers, in connection with this Agreement and the other Principal Agreements and the  transactions contemplated hereby and thereby will be true, complete and accurate in  every material respect, or (in the case of projections) based on reasonable estimates, on  the date as of which such information is stated or certified.  There is no fact known to it  that, after due inquiry, could have a Material Adverse Effect that has not been disclosed  herein, in the other Principal Agreements or in a report, financial statement, exhibit,  schedule, disclosure letter or other writing furnished in writing to Administrative Agent,  on behalf of Buyers, for use in connection with the transactions contemplated hereby or  thereby.  (n) Ownership; Priority of Liens.  Seller owns all Assets identified in the Transactions Terms  Letter that are to become Purchased Assets on the related Purchase Date, and any  Transaction shall convey all of Seller’s right, title and interest in and to the related  Purchased Assets and other Purchased Items to Administrative Agent, on behalf of  Buyers, including with respect to each Purchased Mortgage Loan, the Servicing Rights  related thereto.  This Agreement creates in favor of Administrative Agent, on behalf of  Buyers, a valid, enforceable first priority lien and security interest in the Purchased  Assets and other Purchased Items, prior to the rights of all third Persons and subject to no  other liens.  (o) Investment Company Act.  Neither Seller nor any of its Subsidiaries is required to  register, nor will Seller or any of its Subsidiaries be required to register as a result of the  transactions contemplated hereby, as an “investment company” under the Investment  Company Act of 1940 (as amended, the “Investment Company Act”) and although  there may be additional exclusions or exemptions available to Seller, Seller will rely on  Section 3(c)(5)(C) under the Investment Company Act for its exclusion from the  definition of “investment company”; no one acting on Seller’s behalf has taken any  action that would require registration of Seller under the Investment Company Act, and  no one acting on Seller’s behalf has authorized or will authorize any Person to act in such  manner.  No Transaction represents an “ownership interest” in Seller for purposes of the  “Volcker Rule” (Section 619 of the Dodd-Frank Wall Street Reform and Consumer  Protection Act).  Seller is structured so as not to constitute a “covered fund” as defined in  the final regulations issued December 10, 2013, implementing the “Volcker Rule”  (Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act).    (p) Filing Jurisdictions; Relevant States.  Schedule 1 hereto sets forth all of the jurisdictions  and filing offices in which a financing statement should be filed in order for  Administrative Agent, on behalf of Buyers, to perfect its security interest in the  Purchased Assets and other Purchased Items; provided that the list of such jurisdictions  and filing offices may change upon notice by Seller to Administrative Agent, on behalf of  Buyers, in accordance with Section 9.2(j). Seller originates or has originated or  anticipates originating Mortgage Loans in its own name or through brokers in all fifty  (50) states.  

 

  33  Error! No document variable supplied.  (q) Seller Solvent; Fraudulent Conveyance.  As of the date hereof and immediately after  giving effect to each Transaction, the fair value of the assets of it is greater than the fair  value of the liabilities (including, without limitation, contingent liabilities if and to the  extent required to be recorded as a liability on the financial statements of it in accordance  with GAAP) of it and it is and will be solvent, is and will be able to pay its debts as they  mature and does not and will not have an unreasonably small capital to engage in the  business in which it is engaged and proposes to engage.  It does not intend to incur, or  believe that it has incurred, debts beyond its ability to pay such debts as they mature.  It 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 it or any of its assets.  It is not transferring any  Assets with any intent to hinder, delay or defraud any of its creditors.  (r) Collateral Account.  If applicable, all funds required pursuant to this Agreement, any  Servicing Agreement or any Servicer Notice, if applicable, to be segregated and  deposited into the Collateral Account have been so segregated and deposited as required  by, and in accordance with this Agreement.  (s) Chief Executive Office.  Except as identified pursuant to a notice delivered in accordance  with Section 9.2(j), its chief executive office is located at [***].  (t) No Adverse Selection. Seller used no selection procedures that identified Assets offered  for sale to Buyers hereunder as being less desirable or valuable than other comparable  Assets owned by it.   (u) [Reserved].  (v) Anti-Money Laundering Laws.  It has complied with all applicable anti-money  laundering laws and regulations, including without limitation the Patriot Act  (collectively, the “Anti-Money Laundering Laws”); it has established an anti-money  laundering compliance program as required by the Anti-Money Laundering Laws, has  conducted the requisite due diligence in connection with the acquisition of each Mortgage  Loan for purposes of the Anti-Money Laundering Laws, and maintains, and will  maintain, sufficient information to identify the applicable Mortgagor for purposes of the  Anti-Money Laundering Laws.  (w) Legal and Beneficial Owners of Equity Interests in Seller.  The only equity (or other  ownership) interest in Seller consists of member interests. The sole legal and beneficial  owners of an equity interest in Seller (each an “Owner” and, collectively, the “Owners”)  and the nature of each Owner’s interest are set forth on Schedule 2 attached to, and made  a part of, this Agreement.  (x) Trade Names. All trade names of each of Seller and its Subsidiaries have been disclosed  to and approved in writing by Administrative Agent, on behalf of Buyers.  (y) Environmental and Regulatory Compliance. The operations of Seller and its Subsidiaries  and each of the real properties owned by them and, to the Seller’s best knowledge, each  of the real properties leased by any of them, are presently in compliance in all material  respects with, and has in full force and effect, all material permits or approvals required  by all applicable building, zoning, antipollution, hazardous substance, hazardous  material, oil, environmental, health, safety or other laws, ordinances or regulations, and  

 

  34  Error! No document variable supplied.  the Seller has not received notification that any of them or any of such properties is in  violation of any of the foregoing provisions. No inquiry, notice or threat to give notice by  any governmental authority or third party has been received by Seller or any of its  Subsidiaries with respect to the generation, storage, disposal, release or threat of release  of any hazardous substance or hazardous material, or with respect to any violation of any  federal, state or local environmental, health or safety statute or regulation.  (z) Anti-Terrorism; OFAC.  (i) Neither it nor any Person controlling or controlled by it nor any Person having a  direct beneficial interest in it nor any Person for whom it is acting as agent or  nominee in connection with this transaction (1) is a Person whose property or  interest in property is blocked or subject to blocking pursuant to Section 1 of  Executive Order 13224 of September 23, 2001 Blocking Property and  Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or  Support Terrorism (66 Fed.  Reg.  49079 (2001)) (the “Executive Order”),  (2) engages in any dealings or transactions prohibited by Section 2 of the  Executive Order, or is otherwise associated with any such Person in any manner  violative of Section 2 of the Executive Order, or (3) is a Person on the list of  Specially Designated Nationals and Blocked Persons or is in violation of the  limitations or prohibitions under any other OFAC regulation or executive order.  (ii) No part of the proceeds of the Purchase Price will be used, directly or indirectly,  by any Person for any payments to any governmental official or employee,  political party, official of a political party, candidate for political office, or  anyone else acting in an official capacity, in order to obtain, retain or direct  business or obtain any improper advantage, in violation of the United States  Foreign Corrupt Practices Act of 1977, as amended.  (iii) It acknowledges by executing this Agreement that Administrative Agent, on  behalf of Buyers, has notified it that, pursuant to the requirements of the Patriot  Act, Administrative Agent, on behalf of Buyers, is required to obtain, verify and  record such information as may be necessary to identify Seller, and confirm that  the administrator of it (or the administrator of the applicable direct or indirect  owner of Equity Interests of it) has obtained, verified and recorded such  information as may be necessary to identify any Person owning ten percent  (10%) or more of the direct Equity Interests of it (including, without limitation,  the name and address of such Person), in each case, in accordance with the  Patriot Act.  8.2 Representations and Warranties Concerning Purchased Assets.  Seller represents and warrants to  and covenants with Administrative Agent and Buyers that the representations and warranties  contained on Exhibit H hereto are true and correct with respect to each Purchased Asset as of the  related Purchase Date through and until the related Repurchase Date.  8.3 Continuing Representations and Warranties.  By submitting a Transaction Request hereunder,  Seller shall be deemed to have represented and warranted the truthfulness, correctness and  completeness of the representations and warranties set forth in Exhibit H hereto.  8.4 Amendment of Representations and Warranties.  From time to time, the representations and  warranties set forth in Exhibit H hereto may be amended by mutual agreement among  

 

  35  Error! No document variable supplied.  Administrative Agent, Buyers and Seller.  Any such amendment shall not apply to Transactions  entered into prior to the effective date of the amendment and in no event shall the amendment  apply to any Transaction on a retroactive basis.  ARTICLE 9  AFFIRMATIVE COVENANTS  Seller hereby covenants and agrees with Administrative Agent and Buyers that during the term of  this Agreement and for so long as there remain any obligations of Seller to be paid or performed under the  Principal Agreements:  9.1 Financial Statements and Other Reports. Seller shall deliver to Administrative Agent, on behalf of  Buyer, each of the financial statements, reports, documents and other deliverables as set forth on  Schedule 4 hereto, which may be updated from time to time by Administrative Agent in its sole  discretion by delivering an updated Schedule 4 to Seller.  9.2 Notice.  Seller shall give Administrative Agent, on behalf of Buyers, prompt (but in no event later  than [***] after becoming aware, except for clause (p), with respect to which notice shall be  provided immediately upon becoming aware) written notice, in reasonable detail, of:  (a) any action, suit or proceeding instituted by or against Seller in any federal or state court  or before any commission or other regulatory body (federal, state or local, foreign or  domestic), or any such action, suit or proceeding threatened against Seller, in any case, if  such action, suit or proceeding, or any such action, suit or proceeding threatened against  Seller, (i) involves a potential liability, on an individual or aggregate basis, with respect  to which there is a reasonable likelihood that such action, suit or proceeding will result in  a liability equal to or greater than $[***], (ii) that causes the aggregate outstanding  potential liability of actions, suits and proceedings with respect to which there is a  reasonable likelihood of an adverse determination to exceed $[***], (iii) is reasonably  likely to result in a Material Adverse Effect with respect to Seller, or (iv) questions or  challenges the validity or enforceability of any of the Principal Agreements; provided,  that, in each case, Seller shall not be required to deliver notice of any action, suit,  proceeding or other items set forth on Schedule 5 hereto;  (b) the filing, recording or assessment of any federal, state or local tax lien against Seller, or  any of Seller’s assets, unless such filing, recording or assessment could not reasonably be  expected, individually or in the aggregate, to have a Material Adverse Effect with respect  to Seller;  (c) the occurrence of any Potential Default or Event of Default;  (d) the actual, or threatened in writing, material suspension, revocation or termination (other  than a termination by Seller without cause) of Seller’s licensing or eligibility, in any  respect, as an approved, licensed lender, seller, mortgagee or servicer of assets similar to  the Purchased Assets;  (e) the suspension, revocation or termination of any existing mortgage loan repurchase or  warehouse facility for assets similar to the Purchased Assets (other than an ordinary  course termination);  (f) any Purchased Asset ceases to be an Eligible Asset;  

 

  36  Error! No document variable supplied.  (g) any Approved Investor that threatens in writing to set-off amounts owed by Seller to such  Approved Investor against the purchase proceeds owed by the Approved Investor to  Seller for the Purchased Assets (excluding amounts owed by Seller to the Approved  Investor which are directly related to Purchased Assets and which are expressly allowed  to be set-off by the Approved Investor pursuant to the related Bailee Agreement);  (h) any fact that, after due inquiry, could reasonably be expected to have a Material Adverse  Effect that has not been disclosed herein, in the other Principal Agreements or in a report,  financial statement, exhibit, schedule, disclosure letter or other writing furnished to  Administrative Agent, on behalf of Buyers, for use in connection with the transactions  contemplated hereby or thereby;   (i) any other action, event or condition of any nature that could reasonably be expected to  lead to or result in a Material Adverse Effect with respect to Seller or that, with notice or  lapse of time or both, would constitute a default under any material agreement,  instrument or indenture to which Seller is a party or to which Seller, its properties or  assets may be subject;  (j) any (i) change to the location of its chief executive office/chief place of business from  that specified in Section 8.1(s), (ii) change in the name or corporate structure (or the  equivalent) of Seller or change in the location where Seller maintains its records with  respect to the Purchased Assets or any Purchased Items, or (iii) reincorporation or  reorganization of Seller under the laws of another jurisdiction;   (k) in each case, other than in the ordinary course, upon Seller becoming aware of (i) the  commencement of any material non-routine investigation or the institution of any  proceeding or the threat in writing of institution of any proceeding against Seller by any  supervisory or regulatory Governmental Authority supervising or regulating the  origination or servicing of mortgage loans by, or the issuer or seller status of, Seller or (ii)  the commencement of any material investigation, or the institution of any material  proceeding or the threat in writing of institution of any material proceeding against Seller  by any city, county or municipal supervisory or regulatory Governmental Authority  supervising or regulating the origination or servicing of mortgage loans by, or the issuer  or seller status of Seller;  (l) upon Seller becoming aware that it or any Servicer will change the identity or location of  the Collateral Account;  (m) any change to the date on which Seller’s fiscal year begins from Seller’s current fiscal  year beginning date;  (n) following the Effective Date, any settlement with, or issuance of a consent order by, any  Governmental Authority, in which the fines, penalties, settlement amounts or any other  amounts owed by Seller thereunder exceeds $[***]in the aggregate;  (o) a Servicer failing to maintain a rating with Fitch Ratings, Inc. of RSS3- or such other  comparable rating as approved by the Administrative Agent;  (p) any final judgment or decree entered against Seller or any of its Affiliates or Subsidiaries  by a court, administrative tribunal or other body having jurisdiction involving a liability  of $[***] or more.  

 

  37  Error! No document variable supplied.  9.3 Existence, Etc..  Seller shall (a) preserve and maintain its legal existence and all of its  governmental licenses, authorizations, consents and approvals necessary for Seller to conduct its  business and to perform its obligations under the Principal Agreements, (b) comply with the  requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities  (including, without limitation, truth in lending, real estate settlement procedures and all  environmental laws) if the failure to comply with such requirements would be reasonably likely  (either individually or in the aggregate) to have a Material Adverse Effect, (c) maintain adequate  records and books of account, in which complete entries will be made in accordance with GAAP  consistently applied, and (d) pay and discharge all income and other taxes, assessments and  governmental charges or levies imposed on it or on its income or profits or on any of its  properties prior to the date on which penalties attach thereto, except for any such tax, assessment,  charge or levy the payment of which is being contested in good faith and by proper proceedings  and against which adequate reserves are being maintained in accordance with GAAP.  9.4 Servicing of Mortgage Loans  Subject to Section 6.2, Seller shall, and pursuant to the applicable  Servicing Agreement, Seller shall cause each Servicer to, service all Purchased Mortgage Loans  at Seller’s expense and without charge of any kind to Administrative Agent or any Buyer.  Seller  may delegate its obligations hereunder to service the Purchased Mortgage Loans (subject to  Section 6.2) to one or more Servicers; provided that any such Servicer has been approved by  Administrative Agent, on behalf of Buyers, and such Servicer has executed a Servicing  Agreement, in a form acceptable to Administrative Agent, on behalf of Buyers, with Seller.  The  failure of Seller to obtain the prior approval of Administrative Agent, on behalf of Buyers,  regarding the delegation of its servicing obligations to a Servicer shall be considered an Event of  Default hereunder.  In any event, Seller or its delegate shall service such Purchased Mortgage  Loans with the degree of care and in accordance with the servicing standards generally prevailing  in the industry.  9.5 Evidence of Purchased Assets.  Seller shall indicate on its books and records (including its  computer records) that each Purchased Asset has been included in the Purchased Items.  9.6 Defense of Title; Protection of Purchased Items.  Seller warrants and will defend the right, title  and interest of Administrative Agent and each Buyer in and to all Purchased Items against all  adverse claims and demands of all Persons whomsoever.  Seller will comply with all Applicable  Laws, rules and regulations of any Governmental Authority applicable to Seller or relating to the  Purchased Assets and cause the Purchased Assets to comply with all Applicable Laws, rules and  regulations of any such Governmental Authority.  Following an Event of Default that is  continuing, Seller shall allow Administrative Agent and any Buyer (a) to inspect any Mortgaged  Property relating to a Purchased Mortgage Loan; (b) to appear in or intervene in any proceeding  or matter affecting any Purchased Asset or other Purchased Item or the value thereof; (c) to  initiate, commence, appear in and defend any foreclosure, action, bankruptcy or proceeding  which could affect Administrative Agent’s or any Buyer’s ownership or security of the Purchased  Items or the value thereof, or the rights and powers of Administrative Agent and Buyers; (d) to  contest by litigation or otherwise any lien asserted against any Purchased Mortgage Loan (or  against the related Mortgaged Property) or against any other Purchased Item, the improvements,  or the personal property identified therein; and/or (e) to make payments on account of such  encumbrances, charges, or liens and to service any Purchased Mortgage Loans and take any  action it may deem appropriate to collect all amounts due and owing with respect to any  Purchased Items or any part thereof or to enforce any rights with respect thereto.  All reasonable  costs and expenses, including reasonable attorneys’ fees (including, but not limited to, those  incurred on appeal), that Administrative Agent or Buyers may incur with respect to any of the  foregoing and any expenditures it may make to protect or preserve the Purchased Items or the  

 

  38  Error! No document variable supplied.  rights of Administrative Agent and Buyers, shall be payable by Seller.  Seller shall repay the  same to Administrative Agent, on behalf of Buyers, upon demand with interest, at the Default  Rate, from the date any such expenditure shall have been made until the day it is repaid.  9.7 Further Assurances.  Seller shall, at its expense, promptly procure, execute and deliver to  Administrative Agent, on behalf of Buyers, upon reasonable request, all such other and further  documents, agreements and instruments in compliance with or accomplishment of the covenants  and agreements of Seller in this Agreement.  9.8 Fidelity Bonds and Insurance.  Seller shall maintain an insurance policy covering against loss or  damage relating to or resulting from any breach of fidelity by Seller, or any officer, director,  employee or agent of Seller, any loss or destruction of documents (whether written or electronic),  fraud, theft, misappropriation and errors and omissions, such that Administrative Agent, on behalf  of Buyers, shall have the right to pursue any claim for coverage available to any named insured to  the full extent allowed by law.  This policy shall name Administrative Agent, on behalf of  Buyers, as a loss payee with an unlimited right of action.  Seller shall or shall cause to be  provided notice of cancellation or reduction in the terms of any such insurance.  9.9 [Reserved].    9.10 ERISA.  As soon as reasonably possible, and in any event within [***] after Seller has knowledge  or has reason to believe that any of the events or conditions specified below with respect to any  Plan or Multiemployer Plan has occurred or exists and such events or conditions would  reasonably be expected to have a Material Adverse Effect, a statement signed by a senior  financial officer of Seller setting forth details respecting such event or condition and the action, if  any, that Seller or  any of its respective ERISA Affiliates, as applicable, propose to take with  respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by  Seller or any of its respective ERISA Affiliates with respect to such event or condition):  (a) any Reportable Event or failure to meet minimum funding standards with respect to a  Plan; provided that a failure to meet the minimum funding standard of Section 412 of the  Code or Sections 302 or 303 of ERISA with respect to a Plan, including, without  limitation, the failure to make on or before its due date a required installment under  Section 430(j) of the Code or Section 303(j) of ERISA, shall be a reportable event  regardless of the issuance of any waivers in accordance with Section 412(c) of the Code  or any request for a waiver under Section 412(c) of the Code for any Plan;  (b) the distribution under Section 4041(c) of ERISA of a notice of intent to terminate any  Plan or any action taken by Seller or an ERISA Affiliate to terminate any Plan;  (c) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination  of, or the appointment of a trustee to administer, any Plan, or the receipt by Seller,  Guarantor, any Subsidiary thereof or their respective ERISA Affiliates of a notice from a  Multiemployer Plan that such action has been taken by PBGC with respect to such  Multiemployer Plan;  (d) the complete or partial withdrawal from a Multiemployer Plan by Seller, Guarantor, any  Subsidiary thereof or their respective ERISA Affiliates that results in liability under  Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as  a result of a purchaser default) or the receipt by Seller, Guarantor, any Subsidiary thereof  or their respective ERISA Affiliates of notice from a Multiemployer Plan that it is in  

 

  39  Error! No document variable supplied.  insolvency pursuant to Section 4245 of ERISA or that it intends to terminate or has  terminated under Section 4041A of ERISA;  (e) the institution of a proceeding by a fiduciary of any Multiemployer Plan against Seller,  Guarantor, any Subsidiary thereof or their respective ERISA Affiliates to enforce  Section 515 of ERISA, which proceeding is not dismissed within [***]; and  (f) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) and  Section 436 of the Code, would result in the loss of tax-exempt status of the trust of  which such Plan is a part if Seller, Guarantor, any Subsidiary thereof or their respective  ERISA Affiliates fails to timely make a contribution or provide security to such Plan in  accordance with the provisions of said Sections.  9.11 [Reserved].    9.12 [Reserved].    9.13 Financial Covenants.  Seller and Guarantor shall, at all times, comply with the financial  covenants contained in the Section of the Transactions Terms Letter titled “Financial Covenants.”  9.14 Most Favored Status.  Seller, Administrative Agent and Buyers each agree that should Seller,  Guarantor or any Affiliate thereof enter into a repurchase agreement or credit facility that is  substantially similar to the Transactions contemplated hereunder in respect of asset type and term  with any Person other than Administrative Agent or any Buyer or an Affiliate of Administrative  Agent or any Buyer which by its terms provides more favorable terms to buyer, lender or other  party with respect to such repurchase agreement or credit facility, as applicable, with respect to  any financial covenants set forth in this Agreement or any other financial covenants intended to  test the creditworthiness of the Guarantor or Seller (a “More Favorable Agreement”), then the  Seller shall provide notice to Administrative Agent, on behalf of Buyers, of such more favorable  terms contained in such More Favorable Agreement (including a summary thereof) and the terms  of this Agreement shall be deemed automatically amended to include such more favorable terms  contained in such More Favorable Agreement.     9.15 Late Payment Fee. If the entire amount of any required principal and/or interest payment is not  paid in full within [***] after the same is due, including following any demand therefor in  connection with acceleration of the same pursuant to Section 11.3, Seller will pay to  Administrative Agent a late fee equal to the Late Payment Fee.   ARTICLE 10  NEGATIVE COVENANTS  Seller hereby covenants and agrees with Administrative Agent and Buyers that during the term of  this Agreement and for so long as there remain any obligations of Seller to be paid or performed under  this Agreement, Seller shall comply with the following:  10.1 Lines of Business.  Seller shall not engage to any substantial extent in any line or lines of  business activity other than the businesses generally carried on by it as of the Effective Date and  reasonable extensions and developments thereof and businesses reasonably similar, ancillary or  complementary thereto.  

 

  40  Error! No document variable supplied.  10.2 Debt and Subordinated Debt.  Seller shall not, either directly or indirectly, without the prior  written consent of Administrative Agent, on behalf of Buyers, pay any Debt or Subordinated Debt  if such payment shall cause an Event of Default.  Further, if an Event of Default shall have  occurred and for as long as such is continuing, Seller shall not, either directly or indirectly,  without the prior written consent of Administrative Agent, on behalf of Buyers, make any  payment of any kind thereafter on such Debt or Subordinated Debt until all obligations of Seller  hereunder have been paid and performed in full; provided, that Seller shall be permitted, without  the prior written consent of Administrative Agent, on behalf of Buyers, to make ordinary course  payments under any Debt (other than Subordinated Debt).  Each of Administrative Agent, Buyers  and Seller hereby acknowledges and agrees that the payments permitted to be made by Seller  pursuant to this Section 10.2 shall specifically exclude any optional payment with respect to, or  early refinancing of, any Debt or Subordinated Debt.  10.3 Loss of Eligibility.  Seller shall not, either directly or indirectly, without the prior written consent  of Administrative Agent, on behalf of Buyers, take, or fail to take, any action that would cause  Seller to lose all or any part of its status as an eligible lender, seller, mortgagee or servicer or  willfully terminate its status as an eligible lender, seller, mortgagee or servicer.  10.4 Liens on Purchased Assets and Purchased Items.  Seller acknowledges that with respect to each  Transaction, Seller shall have sold the Purchased Assets and related Purchased Items and Seller  shall have granted to Administrative Agent, on behalf of Buyers, a first priority security interest  in such assets in the event such Transaction is deemed a loan.  Accordingly, Seller shall not grant,  create, incur, assume or suffer to exist any lien upon the Purchased Assets or the Purchased Items,  other than as granted to Administrative Agent, on behalf of Buyers, herein.  10.5 Transactions with Affiliates.  Seller shall not, directly or indirectly, enter into any transaction  with its Affiliates, if any, without the prior written consent of Administrative Agent, on behalf of  Buyers, including, without limitation, (a) making any loan, advance, extension of credit or capital  contribution to an Affiliate, (b) transferring, selling, pledging, assigning or otherwise disposing of  any of its assets to or on behalf of an Affiliate, (c) purchasing or acquiring assets from an  Affiliate, or (d) paying management fees to or on behalf of an Affiliate; provided, however, that  Seller may, without the prior written consent of Administrative Agent, on behalf of Buyers, and  provided that an Event of Default is not existing and will not occur as a result thereof, engage in a  transaction(s) with any or all of its Affiliates if (i) such transaction is in the ordinary course of  Seller’s business, and (ii) such transaction is upon fair and reasonable terms no less favorable to  Seller had Seller entered into a comparable arm length’s transaction with a Person which is not an  Affiliate.     10.6 Consolidation, Merger, Sale of Assets and Change of Control.  Seller shall not, directly or  indirectly, (a) wind up, liquidate or dissolve its affairs; (b) enter into any transaction of merger or  consolidation with any Person; (c) convey, sell, lease or otherwise dispose of, or agree to do any  of the foregoing at any future time, all or substantially all of its property or assets; (d) form or  enter into any partnership, joint venture, syndicate or other combination which could be  reasonably likely to result in a Material Adverse Effect with respect to Seller; or (e) allow a  Change of Control to occur with respect to Seller; provided, however, that Seller may, without the  prior written consent of Administrative Agent, on behalf of Buyers, and provided that a Potential  Default or an Event of Default is not existing and will not occur as a result thereof: (i) merge or  consolidate with any Person if Seller is the surviving and controlling entity, and (ii) in the  ordinary course of Seller’s mortgage banking business, sell equipment that is uneconomic or  obsolete and acquire Mortgage Loans for resale and sell Mortgage Loans.  

 

  41  Error! No document variable supplied.  10.7 Purchased Items.  Seller shall not attempt to resell, reassign, retransfer or otherwise dispose of, or  grant any option with respect to, or pledge or otherwise encumber any of the Purchased Assets or  other Purchased Items or any interest therein.  10.8 Secondary Marketing, Underwriting, Third Party Origination and Interest Rate Risk Management  Practices.  Seller shall not, without the prior notification to Administrative Agent, on behalf of  Buyers, change in any material respect any secondary marketing, underwriting, third party  origination and interest rate risk management practices of Seller that exist as of the Effective  Date.  It shall be deemed an Event of Default hereunder if Seller changes any of the foregoing  practices without having given such prior notice to Administrative Agent, on behalf of Buyers.  10.9 Distributions.  If an Event of Default has occurred and is continuing, Seller shall not 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 Seller.    ARTICLE 11  DEFAULTS AND REMEDIES  11.1 Events of Default.  The occurrence of any of the following conditions or events shall be an Event  of Default:  (a) failure of Seller to transfer the Purchased Assets to Administrative Agent and the  applicable Buyer on the applicable Purchase Date (provided that Administrative Agent,  on behalf of the applicable Buyers, has tendered the related Purchase Price);  (b) failure of Seller to (i) repurchase the Purchased Assets on the applicable Repurchase  Date, (ii) repurchase Purchased Assets pursuant to Section 2.9, (iii) perform its  obligations under Section 6.2(i)(i) or Section 6.3(b) or (iv) pay any other amount due  under the Principal Agreements within [***] of the date such amount is due;  (c) failure of Seller or Guarantor to deliver any report (including financial statements)  required to be delivered hereunder or under any Principal Agreement or Servicing  Agreement within [***] of the date such report was due;  (d) [reserved];  (e) Seller’s representation and warranty in Section 8.1(o) shall be false or misleading at any  time or Guarantor’s representation and warranty in Article 3 of the Guaranty Agreement  shall be false or misleading at any time;   (f) a Material Adverse Effect with respect to Seller or Guarantor shall occur;  (g) Seller, Guarantor or any Subsidiary or Affiliate of Seller or Guarantor shall default (after  giving effect to all applicable grace or cure periods) under, or fail to perform as required  under, or shall otherwise breach the terms of any Debt in excess of $[***]between Seller  or Guarantor or such other entity, on the one hand, and any other Person on the other,  where, in each case, the occurrence of such default, failure or breach permits the  acceleration of such Debt;  

 

  42  Error! No document variable supplied.  (h) any representation, warranty or certification made or deemed made herein by Seller in  any of Section 8.1 (a) (Due Formation and Good Standing); 8.1(f) (Financial Condition);  8.1(h) (Title to Assets); 8.1(k) (No Defaults); 8.1(l) (ERISA); 8.1(n) (Ownership; Priority  of Liens): 8.1(o) (Investment Company Act); 8.1(q) (Seller Solvent; Fraudulent  Conveyance); 8.1(v) (Anti-Money Laundering Laws) or 8.1(z) (Anti-Terrorism; OFAC),  and in each case, shall prove to have been false or misleading in any material respect as  of the time made or furnished;  (i) any representation, warranty or certification made or deemed made herein (and not  identified in clause (h) or clause (l) of this Section 11.1) or in any other Principal  Agreement by Seller or Guarantor or any certificate furnished to Administrative Agent,  on behalf of Buyers, pursuant to the provisions thereof, shall prove to have been false or  misleading in any material respect as of the time made or furnished if such breach is not  cured within [***]; provided that the representations and warranties set forth in  Section 8.2 and Section 8.3 shall be considered solely for the purpose of determining the  Asset Value of the Purchased Assets;  (j) the failure of Seller to perform, comply with or observe any term, covenant or agreement  applicable to Seller or Guarantor as contained in any of Section 9.2 (Notice); 9.10  (ERISA); 9.13 (Financial Covenants); 9.14 (Most Favored Status); 10.2 (Debt and  Subordinated Debt); 10.4 (Liens on Purchased Assets and Purchased Items); 10.7  (Purchased Items) or 10.9 (Distributions), and in each case, and such occurrence or any  default shall not have been remedied within the cure period provided therein;  (k) the failure of Seller or Guarantor to perform, comply with or observe any term, covenant  or agreement (and not identified in clause (j) or clause (l) of this Section 11.1) applicable  to Seller or Guarantor as contained in this Agreement or in any other Principal  Agreement and such occurrence or any default shall not have been remedied within the  cure period provided therein, within [***];  (l) the failure of Guarantor to perform, comply with or observe any representation, warranty,  certification, covenant or agreement as contained in any of Section 3(a)(i); 3(a)(vi);  3(a)(xi); 3(a)(xii); 3(a)(xiv); 3(a)(xv); 3(a)(xvi); 3(a)(xvii); 3(b)(xi); 3(b)(xii); 3(b)(xiv);  3(b)(xviii); (3)(b)(xxi); (3)(b)(xxiii); (3)(b)(xxvi)  of the Guaranty, and in each case, and  such occurrence or any default shall not have been remedied within the cure period  provided therein;   (m) [reserved];  (n) an Insolvency Event shall have occurred with respect to Seller, Guarantor or any of their  respective Affiliates or Subsidiaries; or Seller or Guarantor shall admit in writing its  inability to, or intention not to, perform any of its obligations under this Agreement or  any of the other Principal Agreements;  (o) one or more judgments or decrees shall be entered against Seller, Guarantor or any of  their Affiliates or Subsidiaries by a court, administrative tribunal or other body having  jurisdiction involving a liability of $[***] or more (to the extent that it is, in the  reasonable determination of Administrative Agent, on behalf of Buyers, uninsured and  provided that any insurance or other credit posted in connection with an appeal shall not  be deemed insurance for these purposes) and the same shall not be satisfied, discharged  

 

  43  Error! No document variable supplied.  (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;   (p) any Governmental Authority or any person, agency or entity acting or purporting to act  under governmental authority shall have taken any action to (i) condemn, seize or  appropriate, or to assume custody or control of, all or any substantial part of the property  or assets of Seller, Guarantor or any of their Affiliates or Subsidiaries; (ii) displace the  management of Seller, Guarantor or any of their Affiliates or Subsidiaries or to curtail its  authority in the conduct of their respective business; or (iii) to remove, limit or restrict the  approval of Seller, Guarantor or any of their Affiliates or Subsidiaries as an issuer, buyer  or a seller/servicer of Mortgage Loans or securities backed thereby, and any such action  provided for in this Section 11.1(p) shall not have been discontinued or stayed within  [***];  (q) Seller or Guarantor shall disavow its obligations hereunder or under any other Principal  Agreement or shall contest the validity or enforceability of (i) the Principal Agreements  or (ii) Administrative Agent’s or any Buyer’s interest in any Purchased Assets or other  Purchased Items;  (r) [reserved];  (s) a Change of Control with respect to Seller or Guarantor shall occur without  Administrative Agent’s prior written consent, as determined in Administrative Agent’s  sole discretion;  (t) a Servicer Termination Event shall occur and Seller has not appointed a Successor  Servicer acceptable to Administrative Agent, on behalf of Buyers within [***] following  such Servicer Termination Event, and delivered a fully executed Servicing Agreement  and Servicer Notice, if applicable, with such Successor Servicer, within [***] following  such Servicer Termination Event;  (u) [reserved];  (v) if Servicer is an Affiliate of Seller, a Servicer fails to make any servicing advance  required to be made under the related Servicing Agreement, the related Servicer Notice,  or this Agreement, as applicable, with respect to the Purchased Assets;  (w) failure of any Servicer that is an Affiliate of Seller to perform, comply with or observe  any term, covenant or agreement applicable to Seller contained in Section 9.14;  (x) any Plan shall be terminated within the meaning of Title IV of ERISA or a trustee shall  be appointed by an appropriate United States District Court to administer any Plan, or the  Pension Benefit Guaranty Corporation (or any successor thereto) shall institute  proceedings to terminate any Plan or to appoint a trustee to administer any Plan if as of  the date thereof Seller’s liability, Guarantor’s liability, or any ERISA Affiliate’s liability  to the PBGC, the Plan or any other entity on termination under the Plan exceeds the  then-current value of assets accumulated in such Plan (or in the case of a termination  involving Seller, Guarantor, or any ERISA Affiliate, as a “substantial employer” (as  defined in Section 4001 (a)(2) of ERISA) the withdrawing employer’s proportionate  share of such excess shall exceed such amount) and such liability would reasonably be  expected to have a Material Adverse Effect;  

 

  44  Error! No document variable supplied.  (y) Seller, Guarantor or any of their respective ERISA Affiliates, in each case, as employer  under a Multiemployer Plan shall have made a complete or partial withdrawal from such  Multiemployer Plan and the plan sponsor of such Multiemployer Plan shall have notified  such withdrawing employer that such employer has incurred a withdrawal liability and  such liability would reasonably be expected to have a Material Adverse Effect;  (z) (i) any Seller shall engage in any “prohibited transaction” (as defined in Section 406 of  ERISA or Section 4975 of the Code) involving any Plan, (ii) a determination is made that  a Plan is “at risk” (within the meaning of Section 303 of ERISA) or any Lien in favor of  the PBGC or a Plan shall arise on the assets of Seller, Guarantor, or any ERISA  Affiliates, (iii) a Reportable Event shall occur with respect to, or proceedings shall  commence to have a trustee appointed, or a trustee shall be appointed, to administer or to  terminate, any Plan, which Reportable Event or commencement of proceedings or  appointment of a trustee is, in the reasonable opinion of Administrative Agent, on behalf  of Buyers, likely to result in the termination of such Plan for purposes of Title IV of  ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) Seller,  Guarantor, or any ERISA Affiliates shall, or in the reasonable opinion of Administrative  Agent, on behalf of Buyers, is likely to, incur any liability in connection with a  withdrawal from, or the insolvency of, a Multiemployer Plan, (vi) Seller, Guarantor, or  any of their respective ERISA Affiliates shall file an application for a minimum funding  waiver under Section 302 of ERISA or Section 412 of the Code with respect to any Plan,  (vii) any obligation of Seller or Guarantor for post-retirement medical costs (other than as  required by COBRA) exists, or (viii) any other event or condition shall occur or exist  with respect to a Plan, (ix) the assets of Seller or Guarantor become “plan assets” within  the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA or  (x) Seller, Guarantor or any Subsidiary is subject to any law applicable to governmental  plans, which is similar to the provisions of Section 406 of ERISA or Section 4975 of the  Code and that would be violated by any of the Transactions, and in each case in clauses  (i) through (viii) above, such event or condition, together with all other such events or  conditions, if any, would reasonably be expected to have a Material adverse Effect; or  (aa) if any regulatory enforcement action is instituted against Seller or Guarantor by any  Governmental Authority.  With respect to any Event of Default which requires a determination to be made as to whether such Event  of Default has occurred, such determination shall be made in Administrative Agent’s, on behalf of  Buyers, discretion and Seller hereby agrees to be bound by and comply with any such determination by  Administrative Agent.  If Administrative Agent, on behalf of Buyers, expressly waives an Event of  Default in writing, then such Event of Default shall be deemed to not be continuing.    11.2 Events of Early Termination. (a)  The occurrence of any of the following conditions or events  shall be an Event of Early Termination:   (i) If following the Effective Date, (A) Seller or Guarantor has entered into any  settlement with, or consented to the issuance of a consent order by, any  Governmental Authority in which the fines, penalties, settlement amounts or any  other amounts owed by Seller or Guarantor, as applicable, thereunder exceed  $[***] in the aggregate in the calendar year following the Effective Date and (B)  Administrative Agent, on behalf of Buyers, has not, within [***] following  Seller’s or Guarantor’s, as applicable, entry into such settlement or consent,  provided Seller or Guarantor, as applicable, with written notice that such  

 

  45  Error! No document variable supplied.  settlement or consent by Seller or Guarantor, as applicable, is acceptable to  Administrative Agent;  (ii) One or more judgments or decrees shall be entered against Seller or Guarantor or  any of their Affiliates or Subsidiaries involving a liability of $[***]or more (to  the extent that it is, in the reasonable determination of Administrative Agent, on  behalf of Buyers, uninsured and provided that any insurance or other credit  posted in connection with an appeal shall not be deemed insurance for these  purposes), and Seller or Guarantor, as applicable, has satisfied all such judgments  or decrees;  (iii) A Servicer Termination Event shall occur and Seller has not appointed a  Successor Servicer acceptable to Administrative Agent, on behalf of Buyers  within [***] following such Servicer Termination Event, and delivered a fully  executed Servicing Agreement and Servicer Notice, if applicable, with such  Successor Servicer, within [***] following such Servicer Termination Event;  (iv) Seller has opted to wind down this facility pursuant to Section 4.5(a) or (b); or  (v) Seller shall violate Section 10.8.  Any determination to be made as to whether such Event of Early Termination has  occurred shall be made in Administrative Agent’s discretion and Seller hereby agrees to  be bound by and comply with any such determination by Administrative Agent.  An  Event of Early Termination shall be deemed to be continuing unless expressly waived by  Administrative Agent in writing, but shall be deemed to be not continuing upon  Administrative Agent’s express written waiver.  (b) Upon the occurrence of an Event of Early Termination, Administrative Agent, on behalf  of Buyers, may, by notice to Seller, (i) immediately terminate the obligation of  Administrative Agent and any such Buyer to enter into Transactions hereunder and (ii)  declare all or any portion of the Repurchase Prices related to the outstanding Transactions  to be due and payable.  The failure by Seller to repay such Repurchase Prices in  accordance with the foregoing shall constitute an Event of Default under Section 11.1.   Administrative Agent and Buyers shall be entitled to all rights and remedies in  Section 11.3.  Administrative Agent’s request for repayment of the Repurchase Prices pursuant to  Section 11.2(b) shall not affect the outstanding obligations of Seller under this  Agreement or any other Principal Agreement and all such outstanding obligations and the  rights and remedies afforded Administrative Agent and each Buyer in connection  therewith, including, without limitation, those rights and remedies afforded  Administrative Agent and each Buyer under this Agreement, shall survive the termination  of this Agreement.  For the avoidance of doubt, Administrative Agent and Buyers shall  not be liable to Seller for any costs, loss or damages arising from or relating to a  termination by Administrative Agent, on behalf of Buyers, in accordance with any  subsection of this Section 11.2.  11.3 Remedies.  Upon the occurrence of an Event of Default, Administrative Agent, on behalf of  Buyers, may, by notice to Seller, declare all or any portion of the Repurchase Prices related to the  outstanding Transactions to be immediately due and payable, whereupon the same shall become  

 

  46  Error! No document variable supplied.  immediately due and payable, and the obligation of Administrative Agent, on behalf of Buyers, to  enter into Transactions shall thereupon terminate; provided that the acceleration of all Repurchase  Prices and termination of Administrative Agent’s and each Buyer’s obligation to enter into  Transactions shall immediately occur upon the occurrence of an Event of Default under  Section 11.1 (h), (j), (l), (o), and (p), notwithstanding that Administrative Agent and Buyers may  not have provided any such notice to Seller.  Further, it is understood and agreed that upon the  occurrence of an Event of Default that has not been waived, Seller shall strictly comply with the  negative covenants contained in Article 10 hereunder and in no event shall Seller declare and pay  any dividends, incur additional Debt or Subordinated Debt, make payments on existing Debt or  Subordinated Debt or otherwise distribute or transfer any of Seller’s property and assets to any  Person without the prior written consent of Administrative Agent, on behalf of Buyers.  Upon the  occurrence of any Event of Default that has not been waived, Administrative Agent, on behalf of  Buyers, may also, at its option, exercise any or all of the following rights and remedies:  (a) enter the office(s) of Seller or Guarantor and take possession of any of the Purchased  Items including any records that pertain to the Purchased Items;  (b) communicate with and notify Mortgagors of the Purchased Mortgage Loans and obligors  under other Purchased Assets or on any portion thereof, whether such communications  and notifications are in oral, written or electronic form, including, without limitation,  communications and notifications that the Purchased Assets have been assigned to  Administrative Agent, on behalf of Buyers, and that all payments thereon are to be made  directly to Administrative Agent, on behalf of Buyers, or its designee (subject to the  rights of any Servicer under any Servicing Agreement); settle compromise, or release, in  whole or in part, any amounts owing on the Purchased Assets or other Purchased Items or  any portion of the Purchased Items, on terms acceptable to Administrative Agent, on  behalf of Buyers; enforce payment and prosecute any action or proceeding with respect to  any and all Purchased Assets or other Purchased Items; and where any Purchased Asset  or other Purchased Item is in default, foreclose upon and enforce security interests in,  such Purchased Asset or other Item by any available judicial procedure or without  judicial process and sell property acquired as a result of any such foreclosure;  (c) exercise any of its rights set forth in the Servicing Agreement or the Servicer Notice, if  applicable, collect payments from Mortgagors and/or assume servicing of, or contract  with a third party to subservice, any or all Purchased Mortgage Loans requiring servicing,  with all of any such third party’s fees to be paid by Seller.  In connection with collecting  payments from Mortgagors and/or assuming servicing of any or all Purchased Mortgage  Loans, Administrative Agent, on behalf of Buyers, may take possession of and open any  mail addressed to Seller, remove, collect and apply all payments for Seller, sign Seller’s  name to any receipts, checks, notes, agreements or other instruments or letters or appoint  an agent to exercise and perform any of these rights.  If Administrative Agent, on behalf  of Buyers, so requests, Seller shall promptly forward (to the extent in Seller’s  possession), or cause to be forwarded to Administrative Agent, on behalf of Buyers, or its  designee, all further mail and all “trailing” documents, such as title insurance policies,  deeds of trust, and other documents, and all loan payment histories, in electronic format,  in each case, as same relate to the Purchased Assets;  (d) proceed against Seller under this Agreement;   (e) (i) sell, without notice or demand of any kind, at a public or private sale and at such price  or prices as Administrative Agent, on behalf of Buyers, may deem to be commercially  

 

  47  Error! No document variable supplied.  reasonable for cash or for future delivery without assumption of any credit risk, any or all  or portions of the Purchased Assets on a servicing-retained or servicing-released basis;  provided that Administrative Agent, on behalf of Buyers, may purchase any or all of the  Purchased Assets at any public or private sale or (ii) in its sole and absolute discretion  elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller credit for  such Purchased Assets (including credit for the Servicing Rights in respect of sales on a  servicing-retained basis) in an amount equal to the Market Value of the Purchased  Mortgage Loans against the aggregate unpaid Repurchase Price and any other amounts  owing by Seller hereunder; provided further that Seller shall remain liable to  Administrative Agent and Buyers for any amounts that remain owing to Administrative  Agent and/or any Buyer following any such sale and/or credit;  (f) enter into one or more hedging arrangements covering all or a portion of the Purchased  Assets; and/or  (g) pursue any rights and/or remedies available at law or in equity against Seller and/or  Guarantor.  11.4 Treatment of Collateral Account.  Notwithstanding any other provision of this Agreement, Seller  shall have no right to withdraw or release any funds in the Collateral Account to itself or for its  benefit, nor shall it have any right to set-off any amount owed to it by Administrative Agent or  any Buyer against funds held by it for Administrative Agent, on behalf of Buyers, in the  Collateral Account.  During the continuance of an Event of Default, Seller shall, and/or shall  cause the applicable Servicer to, pursuant to the applicable Servicing Agreement, and Servicer  Notice, if applicable, promptly remit all funds related to the Purchased Assets in the Collateral  Account to or at the direction of Administrative Agent, on behalf of Buyers.  11.5 Sale of Purchased Assets.  With respect to any sale of Purchased Assets pursuant to  Section 11.3(e), Seller acknowledges and agrees that it may not be possible to purchase or sell all  of the Purchased Assets on a particular Business Day, or in a single transaction with the same  purchaser, or in the same manner because the market for such Purchased Assets may not be  liquid.  Seller further agrees that in view of the nature of the Purchased Assets, liquidation of a  Transaction or the underlying Purchased Assets does not require a public purchase or sale.   Accordingly, Administrative Agent, on behalf of Buyers, may elect the time and manner of  liquidating any Purchased Asset and nothing contained herein shall obligate Administrative  Agent, on behalf of Buyers, to liquidate any Purchased Asset on the occurrence of an Event of  Default, to liquidate all Purchased Assets in the same manner or on the same Business Day, or  constitute a waiver of any right or remedy of Administrative Agent, on behalf of Buyers.  Seller  hereby waives any claims it may have against Administrative Agent or any Buyer arising by  reason of the fact that the price at which the Purchased Assets may have been sold at such private  sale was less than the price which might have been obtained at a public sale or was less than the  aggregate Repurchase Price amount of the outstanding Transactions, even if Administrative  Agent, on behalf of Buyers, accepts the first offer received and does not offer the Purchased  Assets, or any part thereof, to more than one offeree.  Seller hereby agrees that the procedures  outlined in Section 11.3(e) and this Section 11.5 for disposition and liquidation of the Purchased  Assets are commercially reasonable.  Seller further agrees that it would not be commercially  unreasonable for Administrative Agent or any Buyer to dispose of the Purchased Assets or any  portion thereof by using internet sites that provide for the auction of assets similar to the  Purchased Assets, or that have the reasonable capability of doing so, or that match buyers and  sellers of assets.  

 

  48  Error! No document variable supplied.  11.6 No Obligation to Pursue Remedy.  Administrative Agent and Buyers shall have the right to  exercise any of its rights and/or remedies without presentment, demand, protest or further notice  of any kind other than as expressly set forth herein, all of which are hereby expressly waived by  Seller.  Seller further waives any right to require Administrative Agent or any Buyer to (a)  proceed against any Person, (b) proceed against or exhaust all or any of the Purchased Assets or  pursue its rights and remedies as against the Purchased Assets in any particular order, or (c)  pursue any other remedy in its power. Administrative Agent and Buyers shall not be required to  take any steps necessary to preserve any rights of Seller against holders of mortgages prior in lien  to the lien of any Purchased Asset or to preserve rights against prior parties.  No failure on the  part of Administrative Agent or any Buyer to exercise, and no delay in exercising, any right,  power or remedy provided hereunder, at law or in equity shall operate as a waiver thereof; nor  shall any single or partial exercise by Administrative Agent or any Buyer of any right, power or  remedy provided hereunder, at law or in equity preclude any other or further exercise thereof or  the exercise of any other right, power or remedy.  Without intending to limit the foregoing, all  defenses based on the statute of limitations are hereby waived by Seller.  The remedies herein  provided are cumulative and are not exclusive of any remedies provided at law or in equity.  11.7 No Judicial Process.  Administrative Agent and each Buyer may enforce its rights and remedies  hereunder without prior judicial process or hearing, and Seller hereby expressly waives, to the  extent permitted by law, any right that Seller might otherwise have to require Administrative  Agent or such Buyer, as applicable, to enforce its rights by judicial process.  Seller also waives, to  the extent permitted by law, any defense that Seller might otherwise have to its obligations under  this Agreement arising from use of nonjudicial process, enforcement and sale of all or any portion  of the Purchased Assets or from any other election of remedies.  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.  11.8 Reimbursement of Costs and Expenses.  Administrative Agent, on behalf of Buyers, may, but  shall not be obligated to, advance any sums or do any act or thing necessary to uphold and  enforce the lien and priority of, or the security intended to be afforded by, any Purchased Asset,  including, without limitation, payment of delinquent taxes or assessments and insurance  premiums.  All advances, charges, reasonable and documented costs and expenses, including  reasonable attorneys’ fees and disbursements and losses resulting from any hedging arrangements  entered into by Administrative Agent, on behalf of Buyers, pursuant to Section 11.3(f), incurred  or paid by Administrative Agent, on behalf of Buyers, in exercising any right, power or remedy  conferred by this Agreement, or in the enforcement hereof, together with interest thereon, at the  Default Rate, from the time of payment until repaid, shall become a part of the Repurchase Price.  11.9 Application of Proceeds.  The proceeds of any sale or other enforcement of Administrative  Agent’s or Buyer’s interest in all or any part of the Purchased Assets shall be applied by  Administrative Agent, on behalf of Buyers, in accordance with Section 6.2(i)(iii).    11.10 Rights of Set-Off.  If Seller shall default in the payment or performance of any of its obligations  under this Agreement, Administrative Agent, Buyers, and their respective Affiliates (the “Buyer  Parties”) shall have the right, at any time, and from time to time, without notice, to set-off claims  and to appropriate or apply any and all deposits of money or property or any other Debt at any  time held or owing by the Buyer Parties to or for the credit of the account of Seller against and on  account of the obligations and liabilities of Seller under this Agreement, irrespective of whether  or not Administrative Agent or any Buyer shall have made any demand hereunder and whether or  not said obligations and liabilities shall have become due; provided, however, that the aforesaid  right to set-off shall not apply to any deposits of escrow monies being held on behalf of the  

 

  49  Error! No document variable supplied.  Mortgagors related to the Purchased Mortgage Loans or other third parties.  Without limiting the  generality of the foregoing, the Buyer Parties shall be entitled to set-off claims and apply property  held by Buyer Parties with respect to any Transaction against obligations and liabilities owed by  Seller to the Buyer Parties with respect to any other Transaction.  The Buyer Parties may set off  cash, the proceeds of any liquidation of the Purchased Assets and all other sums or obligations  owed by the Buyer Parties to Seller against all of Seller’s obligations to the Buyer Parties,  whether under this Agreement, under a Transaction, or under any other agreement between the  parties, or otherwise, whether or not such obligations are then due, without prejudice to the Buyer  Parties’ right to recover any deficiency.  Administrative Agent, on behalf of Buyers, agrees  promptly to notify Seller after any such set-off and application made by the Buyer Parties;  provided that the failure to give such notice shall not affect the validity of such set-off and  application.  ARTICLE 12  INDEMNIFICATION  12.1 Indemnification.  Seller shall indemnify and hold harmless each of the Buyer Parties and any of  their respective partners, officers, directors, employees, agents and advisors (each, an  “Indemnified Party”) from and against any and all liabilities, obligations, losses, claims  damages, penalties, judgments, suits, costs, expenses and disbursements of any kind whatsoever  (including reasonable fees and disbursements of any of its counsel) (“Losses”) that may be  imposed upon, incurred by or asserted against such Indemnified Party in any way relating to or  arising out of (i) the execution or delivery of this Agreement or any other Principal Agreement or  any agreement or instrument contemplated thereby, the performance by the parties thereto of their  respective obligations thereunder or the consummation of the transactions contemplated thereby,  (ii) the use of the proceeds of the Purchased Assets or the Transactions or Seller’s obligations  thereunder, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing,  whether or not any Indemnified Party is a party thereto (and regardless of whether such matter is  initiated by a third party or by Seller or any of its Affiliates or Subsidiaries, except to the extent  that such Losses have been found in a final, non-appealable judgment by a court of competent  jurisdiction (or, should the parties mutually agree to binding arbitration, a final determination of  the arbitrator) to have resulted directly and solely from the Indemnified Party’s gross negligence  or willful misconduct; or (iv) without limiting the generality of clauses (i) through (iii) above, any  breach of Seller’s obligations under Section 15.27 of this Agreement.  Seller also agrees to  reimburse an Indemnified Party as and when billed by such Indemnified Party for all such  Indemnified Party’s reasonable costs and expenses incurred in connection with the enforcement  or the preservation of such Indemnified Party’s rights under this Agreement, any other Principal  Agreement (provided that if the terms of any Principal Agreement conflict with the foregoing, the  terms of the Principal Agreement shall control) or any transaction contemplated hereby or  thereby, including without limitation the reasonable fees and documented, out-of-pocket  disbursements of its external counsel.  TO THE FULLEST EXTENT PERMITTED BY ANY  APPLICABLE LAW, EACH PARTY HERETO SHALL NOT ASSERT, AND HEREBY  WAIVES, ANY CLAIM, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT,  CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL  DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THE  PRINCIPAL AGREEMENTS OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED  HEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY  TRANSACTION OR THE USE OF THE PROCEEDS THEREOF; PROVIDED, HOWEVER,  THAT THE FOREGOING LIMITATIONS OF LIABILITY SHALL NOT APPLY WITH  RESPECT TO LOSSES SUBJECT TO INDEMNIFICATION UNDER SECTION 12.1(iv).   The  agreements in this Section 12.1 shall survive the repayment, satisfaction or discharge of all the  

 

  50  Error! No document variable supplied.  other obligations and liabilities of the parties under the Principal Agreements.  All amounts due  under this Section 12.1 shall be fully payable within [***] after demand therefor.  This  Section 12.1 shall not apply to any amounts due and owing pursuant to Section 4.5 or with  respect to Taxes other than Taxes that represent losses, claims, damages, etc.  arising from any  non-Tax claim.  12.2 Reimbursement.  Seller agrees to pay as and when billed by Administrative Agent or any Buyer  all of the out-of-pocket costs and expenses incurred by Administrative Agent or any such Buyer  in connection with (i) the consummation and administration of the transactions contemplated  hereby including, without limitation, all the due diligence, inspection, testing and review costs  and expenses incurred by Administrative Agent or any Buyer with respect to Purchased Assets  prior to the Effective Date or pursuant to Section 6.6, or otherwise, (ii) the development,  preparation and execution of, and any amendment, supplement or modification to, any Principal  Agreement or any other documents prepared in connection therewith, (iii) all the reasonable costs  and expenses of Administrative Agent and Buyers in connection with any participation entered  into by Administrative Agent, on behalf of Buyers, on the Effective Date and disclosed to Seller  and (iv) all the reasonable fees, disbursements and expenses of counsel to Administrative Agent  and Buyers incurred in connection with any of the foregoing.  12.3 Payment of Taxes.  (a) All payments made by or on account of any obligation of Seller under any Principal  Agreement shall be made free and clear of, and without deduction or withholding for or  on account of, any present or future taxes, levies, imposts, duties, deductions, charges,  assessments, fees or withholdings (including backup withholdings), and all liabilities  (including penalties, interest and additions to tax) with respect thereto imposed by any  Governmental Authority (collectively, “Taxes”), except as required by Applicable Law.   If Seller is required by law or regulation to deduct or withhold any Taxes from or in  respect of any amount payable hereunder, it shall: (i) make such deduction or  withholding; (ii) pay the amount so deducted or withheld to the appropriate  Governmental Authority not later than the date when due; (iii) deliver to Administrative  Agent, on behalf of Buyers, promptly, original tax receipts and other evidence  satisfactory to Administrative Agent of the payment when due of the full amount of such  Taxes; and (iv) if such Tax is an Indemnified Tax (as defined below), pay to  Administrative Agent such additional amounts as may be necessary so that  Administrative Agent receives, free and clear of all such Indemnified Taxes, a net  amount equal to the amount it would have received under any Principal Agreement, as if  no such deduction or withholding had been made.  In addition, Seller agrees to timely pay  to the relevant Governmental Authority in accordance with Applicable Law (or, at the  option of Administrative Agent, timely reimburse it for the payment of) any current or  future stamp, court or documentary taxes, intangible, filing or similar Taxes (including,  without limitation, mortgage recording taxes, transfer taxes and similar fees) imposed by  any Governmental Authority that arise from any payment made hereunder or from the  execution, delivery, performance or registration of, from the receipt or perfection of a  security interest under, or otherwise with respect to, the Principal Agreements except any  such Taxes imposed on Administrative Agent or any Buyer with respect to an  assignment, other than an assignment made at the request of Seller, by a jurisdiction (or  political subdivision thereof) having a present or former connection with Administrative  Agent or any Buyer (other than any connection arising from executing, delivering, being  party to, engaging in any transaction pursuant to, performing its obligations under or  enforcing this Agreement) (“Other Taxes”).  Other Taxes and Taxes (other than  

 

  51  Error! No document variable supplied.  Excluded Taxes) imposed on or with respect to any payment made by or on account of  any obligation of Seller under any Principal Agreement shall be referred to in this  Agreement as “Indemnified Taxes.”  (b) Seller shall within [***] after demand therefor, indemnify Administrative Agent and each  Buyer for the full amount of any and all Indemnified Taxes (including any Indemnified  Taxes imposed or asserted on or attributable to amounts payable under this Section 12.3)  arising with respect to the Purchased Assets, the Principal Agreements and other  documents related thereto and fully indemnify and hold Administrative Agent and each  Buyer harmless from and against any and all liabilities or reasonable expenses with  respect to or resulting from any delay or omission to pay such Taxes, whether or not such  Indemnified Taxes were correctly or legally imposed or assessed by the relevant  Governmental Authority.  A certificate as to the amount of any payment or liability of  Administrative Agent and/or any Buyer with respect to such Indemnified Taxes delivered  to Seller by Administrative Agent on its own behalf or on behalf of Buyers, or any Buyer  (with a copy to Administrative Agent) shall be conclusive absent manifest error.  As soon  as practicable after any payment of Taxes by Seller to a Governmental Authority  pursuant to this Section 12.3, Seller shall deliver to Administrative Agent, on behalf of  Buyers, the original or a certified copy of a receipt issued by such Governmental  Authority evidencing such payment, a copy of the return reporting such payment or other  evidence of such payment reasonably satisfactory to Administrative Agent, and provided  further that in no event shall Administrative Agent or any Buyer be required to complete,  execute or submit to Seller any of the documentation listed in Section 12.3(d) if there is a  change in United States law prohibiting provision of any such documentation which  occurs subsequent to the date on which applicable documentation listed under Section  12.3(d) was previously provided by Administrative Agent, on behalf of Buyers, to Seller  in accordance with the requirements of Section 12.3(d).  (c) If Administrative Agent or any Buyer is entitled to an exemption or reduction of  withholding Tax with respect to payments made under this Agreement, Administrative  Agent or such Buyer (with a copy to Administrative Agent) shall deliver to Seller and  Administrative Agent, at the time or times reasonably requested by Seller, such properly  completed and executed documentation reasonably requested by Seller as will permit  such payments to be made without withholding or at a reduced rate of withholding;  provided that the completion, execution and submission of such documentation (other  than the documentation listed in Section 12.3(d)) shall not be required if in  Administrative Agent’s or such Buyer’s judgment such completion, execution or  submission would subject Administrative Agent or such Buyer to any material  unreimbursed cost or expense or would materially prejudice the legal or commercial  position of Administrative Agent or such Buyer.  (d) Without limiting the generality of Section 12.3(c), if any Buyer is (i) not incorporated  under the laws of the United States, any State thereof, or the District of Columbia or  (ii) not otherwise treated as a “United States person” within the meaning of the Code (a  “Foreign Buyer”) and is entitled to an exemption from or reduction of U.S. federal  withholding Taxes with respect to payments made under this Agreement, Administrative  Agent or such Buyer (with a copy to Administrative Agent), as applicable, shall provide  Seller with an original, properly completed and duly executed United States Internal  Revenue Service (“IRS”) Form W-8BEN, W-8BEN-E, W-8IMY or W-8ECI or any  successor form prescribed by the IRS, (i) certifying that such Foreign Buyer is entitled to  benefits under an income tax treaty to which the United States is a party which reduces or  

 

  52  Error! No document variable supplied.  eliminates the rate of withholding tax on payments of interest or setting forth a basis to  claim the benefits of the exemptions from U.S. withholding taxes for portfolio interest  under Section 881(c) of the Code or (ii) certifying that the income receivable pursuant to  this Agreement is effectively connected with the conduct of a trade or business in the  United States on or prior to the date upon which each such Foreign Buyer becomes a  Buyer.  If an IRS form previously delivered expires or becomes obsolete or inaccurate in  any respect, each Foreign Buyer will update such form or promptly notify Seller and  Administrative Agent of its legal inability to do so.  Should a Foreign Buyer, which is  otherwise exempt from a withholding tax, become subject to Taxes because of its failure  to deliver an IRS form required hereunder, Seller shall, at no cost or expense to Seller,  take such steps as such Foreign Buyer shall reasonably request to assist such Foreign  Buyer to recover such Taxes.  Upon the execution of this Agreement or otherwise  becoming a Buyer, each Buyer that is a “United States person” within the meaning of the  Code shall deliver to Seller and Administrative Agent an original, properly completed  and duly executed IRS Form W-9 or such other documentation or information prescribed  by Applicable Laws or reasonably requested by Seller or the Administrative Agent as  will enable Seller to determine whether or not such Buyer is subject to backup  withholding or information reporting requirements.  (e) Nothing contained in this Section 12.3 shall require Administrative Agent or any Buyer  to make available any of its Tax returns or other information that it deems to be  confidential or proprietary or otherwise subject Administrative Agent or any Buyer to any  material unreimbursed cost or expense or materially prejudice the legal or commercial  position of Administrative Agent or any Buyer, except for such IRS forms Administrative  Agent or such Buyer is required to deliver to Seller under Section 12.3(d).  (f) If a payment made to Administrative Agent, on behalf of Buyers, under any Principal  Agreement would be subject to U.S. federal withholding tax imposed under FATCA if  such Administrative Agent or such Buyer 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 or such Buyer shall deliver to  Seller at the time or times prescribed by law and at such time or times reasonably  requested by Seller such documentation prescribed by Applicable Law (including as  prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation  reasonably requested by Seller or Administrative Agent as may be necessary for Seller or  Administrative Agent to comply with its obligations under FATCA or to determine the  amount to deduct and withhold from such payment.  For purposes of this clause,  “FATCA” shall include any amendments made to FATCA after the date of this  Agreement.  (g) If Administrative Agent, on behalf of Buyers, determines, in its sole discretion, that it has  received a refund of any Taxes as to which it has been indemnified pursuant to this  Section 12.3 (including by the payment of additional amounts pursuant to this section), it  shall pay to Seller an amount equal to such refund (but only to the extent of indemnity  payments and additional 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 Buyers and without interest (other than any interest paid by the  relevant Governmental Authority with respect to such refund).  Seller, upon the request  of Administrative Agent or such Buyer, shall repay to Administrative Agent or such  Buyer, as applicable, the amount paid over pursuant to this Section 12.3(g) (plus any  penalties, interest or other charges imposed by the relevant Governmental Authority) in  

 

  53  Error! No document variable supplied.  the event that Administrative Agent or any Buyer is required to repay such refund to such  Governmental Authority.  Notwithstanding anything to the contrary in this  Section 12.3(g), in no event will Administrative Agent or any Buyer be required to pay  any amount to Seller pursuant to this Section 12.3(g) the payment of which would place  Administrative Agent or such Buyer in a less favorable net after-Tax position than  Administrative Agent or such Buyer would have been in if the indemnification payments  or additional amounts giving rise to such refund had never been paid.  (h) Each Buyer (other than Administrative Agent) shall severally indemnify the  Administrative Agent, within [***] after demand therefor, for (i) any Indemnified Taxes  attributable to such Buyer (but only to the extent that Seller has not already indemnified  the Administrative Agent for such Indemnified Taxes and without limiting the obligation  of Seller to do so), (ii) any Taxes attributable to such Buyer’s failure to comply with the  provisions of Section 15.7 relating to the maintenance of a Participant Register and (iii)  any Excluded Taxes attributable to such Buyer, in each case, that are payable or paid by  the Administrative Agent in connection with any Principal Agreement, and any  reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes  were correctly or legally imposed or asserted by the relevant Governmental Authority.  A  certificate as to the amount of such payment or liability delivered to any Buyer by the  Administrative Agent shall be conclusive absent manifest error.  Each Buyer hereby  authorizes the Administrative Agent to set off and apply any and all amounts at any time  owing to such Buyer under any Principal Agreement or otherwise payable by the  Administrative Agent to the Buyer from any other source against any amount due to the  Administrative Agent under this Section 12.3(h).  12.4 Administrative Agent and Buyer Payment.  If Seller fails to pay when due any costs, expenses or  other amounts payable by it under this Article 12, such amount may be paid on behalf of Seller by  Administrative Agent or such Buyer, as applicable, in its discretion and Seller shall remain liable  for any such payments by Administrative Agent or such Buyer, as applicable.  No such payment  by Administrative Agent or Buyer shall be deemed a waiver of any of Administrative Agent’s  and each Buyer’s rights under any of the Principal Agreements.  12.5 Agreement not to Assert Claims.  Seller agrees not to assert any claim against any Indemnified  Party on any theory of liability, for special, indirect, consequential or punitive damages arising  out of or otherwise relating to the Principal Agreements, the actual or proposed use of the  proceeds of the Transactions, this Agreement or any of the transactions contemplated hereby or  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.  12.6 Survival.  Without prejudice to the survival of any other agreement of Seller hereunder, the  covenants and obligations of Seller contained in this Article 12 shall survive the payment in full  of the Repurchase Prices and all other amounts payable hereunder and delivery of the Purchased  Assets by Administrative Agent, on behalf of Buyers, against full payment therefor.  Article 13  CUSTODIAL RESPONSIBLITIES  With respect to any Purchased Mortgage Loans held by, or to be delivered to, Flagstar  Bank, FSB or its successor as Custodian:  

 

  54  Error! No document variable supplied.  13.1 Delivery of Mortgage Loan Files.   (a) No later than 4:00 p.m., New York City time, [***] prior to any Purchase Date, the Seller  shall provide to the Custodian and the Administrative Agent an electronic notice, together  with the related Mortgage Loan Schedule, and simultaneously shall deliver to the  Custodian the Mortgage Loan File pertaining to each Eligible Mortgage Loan to be sold  to the Administrative Agent for the benefit of Buyers and included in the Purchase Price  on such Purchase Date, each of which Mortgage Loans shall be identified in the  Mortgage Loan Schedule delivered therewith via Electronic Transmission acceptable to  the Seller and the Custodian (or, if another time is specified below for such release or  delivery, at such other time).   (b) All Mortgage Loan Documents delivered to Custodian shall have been placed by Seller  or its representative in an appropriate file folder, properly secured, and clearly marked  with the name of the Mortgagor and the loan number.   13.2 Review of Mortgage Loan Files.   (a) With respect to any Mortgage Loan listed on the Mortgage Loan Schedule, Custodian  shall certify and confirm as to each Mortgage Loan File that, unless an Exception is  identified by the Custodian to Seller in writing prior to the related Purchase Date: (A) all  documents required to be delivered to it listed on Exhibit I hereof are in Custodian’s  possession, (B) such documents have been reviewed by Custodian and appear regular on  their face and relate to such Mortgage Loan; and (C) the criteria listed on the related  Mortgage Loan Schedule has been reviewed by Custodian. Administrative Agent shall  review all Exceptions identified in writing by Custodian and notify Custodian of any  Mortgage Loan it intends not to purchase by 4:00 p.m. (Eastern time) as a result of such  Exceptions. In the event Administrative Agent, as a result of an Exception, does not wire  the Purchase Price with respect to a Mortgage Loan to Seller on the related Purchase  Date, Administrative Agent shall notify Custodian in writing.   13.3 Release of Mortgage Loan Files.   (a) The Custodian shall upon receipt of a fully executed Bailee Agreement, in the form of  Exhibit D attached hereto, from the Seller with the written acknowledgment and  agreement of the Administrative Agent included, release Mortgage Loan Files within  [***] of receipt of such request in the possession of the Custodian to an Approved  Investor or to the Servicer, as applicable, (x) for the purpose of resale or refinancing  thereof or (y) to facilitate corrections and/or amendments to the Mortgage Loan  Documents by the Servicer, in each case against a Bailee Agreement executed by the  Seller which must be acknowledged by the Administrative Agent.  On such Bailee  Agreement, the Seller shall indicate the Mortgage Loans to be sold, the date of such  anticipated sale or refinancing, the name and address of the Approved Investor, and the  preferred method of delivery.  The Seller shall deliver to the Administrative Agent a copy  of such Bailee Agreement, and not less than [***] prior to the anticipated sale or  refinancing date set forth in such Bailee Agreement, or such rescheduled sale date as the  Seller may identify to the Administrative Agent in writing, the Administrative Agent  shall deliver to the Approved Investor identified in such Bailee Agreement, the lien  release(s) for the related Mortgage Loans.  The Seller or Approved Investor shall return  to the Custodian, within [***] after receipt thereof, the Mortgage Loan File with respect  to any Mortgage Loan not purchased or refinanced by Approved Investor.    

 

  55  Error! No document variable supplied.  (b) Any transmittal of the Mortgage Loan Files for Mortgage Loans in the possession of the  Custodian, in connection with the sale or refinancing thereof to or by an Approved  Investor will be under cover of a transmittal letter in form and substance agreed upon by  Seller and Custodian.  Promptly upon the remittance by Approved Investor of the full  purchase price or refinancing proceeds of the Mortgage Loan(s), the Administrative  Agent shall give the Custodian prompt written or electronic mail (or email) notice thereof  and confirm that the Administrative Agent for the benefit of Buyers no longer has a  security interest in the related Mortgage Loan(s).  In connection with any request to  deliver Mortgage Loan Files pursuant to this Section 13.3(b), the Seller shall provide the  Custodian with a Mortgage Loan Schedule in computer-readable form acceptable to the  Custodian and shall provide no less than [***] notice for each [***]Mortgage Loan Files  requested for release beyond the first [***] Mortgage Loan Files.  (c) In the event that an Approved Investor rejects the purchase of any Mortgage Loan for any  reason whatsoever or fails to consummate the purchase any Mortgage Loan, Seller shall,  upon the request of Administrative Agent, assist Administrative Agent in the recovery of  any documents in the Mortgage Loan File not returned by such Approved Investor to  Custodian by the deadline set forth in the related Bailment Agreement.  Custodian shall  notify Administrative Agent and Seller of its receipt of any such returned Mortgage Loan  File on the Business Day after receipt of such returned Mortgage Loan File.   (d) So long as the Custodian has not received written notice, or have actual knowledge, that  any Event of Early Termination, Event of Default, Material Adverse Effect with respect  to Seller or Cease Funding Event has occurred, the Custodian and the Administrative  Agent shall take such steps as they may reasonably be directed from time to time by the  Seller in writing to transfer promptly and deliver to the Seller any Mortgage Loan File in  the possession of the Custodian relating to any Mortgage Loan previously subject to a  Transaction for which the Seller, with the written consent of the Administrative Agent,  has notified the Custodian has ceased to be an Eligible Mortgage Loan. In furtherance of  the foregoing, upon receipt of a Bailee Agreement, which must be acknowledged by the  Administrative Agent; provided that no Event of Early Termination, Event of Default,  Material Adverse Effect with respect to Seller or Cease Funding Event has occurred of  which the Custodian shall have received written notice, the Custodian shall release to the  Seller the requested Mortgage Loan Files.  (e) Following the Administrative Agent’s written instructions to the Custodian not to release  any item of Purchased Assets, which instructions Administrative Agent shall deliver  following the occurrence and continuance of an Event of Default, the Custodian shall not  release, or incur any liability to the Seller or any other Person for refusing to release, any  item of Purchased Assets to the Seller or any other Person without the express prior  written consent of the Administrative Agent and at the direction of the Administrative  Agent.  (f) Notwithstanding the foregoing, any Bailee Agreement may be delivered to the  Administrative Agent via electronic mail which attaches the appropriate form referenced  in clauses (a) and (b) above, and the Administrative Agent’s affirmative response via  return electronic mail with an electronic copy to the Custodian shall constitute written  consent for the purpose of this Section 13.3.  13.4 Resignation of Custodian. Flagstar Bank, FSB, as Custodian, may at any time resign and  terminate its obligations under this Article 13 upon at least [***] prior written notice to the Seller  

 

  56  Error! No document variable supplied.  and the Administrative Agent.  Promptly after receipt of notice of the Custodian’s resignation, the  Administrative Agent shall appoint, by written instrument, a successor custodian, which  appointment shall, unless an Event of Early Termination, Event of Default, Material Adverse  Effect with respect to Seller or Cease Funding Event has occurred, be subject to written approval  by the Seller (which approval shall not be unreasonably withheld, conditioned or delayed).  One  original counterpart of such instrument of appointment shall be delivered to the Seller, the  Administrative Agent, the Custodian and the successor custodian.  Administrative Agent and Seller shall each comply in all respects with their respective duties and  obligations as set forth in and be entitled to their respective rights and benefits under any Custodial  Agreement with a Custodian other than Flagstar Bank, FSB.    ARTICLE 14  TERM AND TERMINATION  14.1 Term. Provided that no Event of Default or Event of Early Termination has occurred and is  continuing, and except as otherwise provided for herein, this Agreement shall commence on the  Effective Date and continue until the Facility Termination Date.  On the date of expiration or  termination of this Agreement, all amounts due Administrative Agent, on behalf of Buyers, under  the Principal Agreements shall be immediately due and payable without notice to Seller and  without presentment, demand, protest, notice of protest or dishonor, or other notice of default,  and without formally placing Seller in default, all of which are hereby expressly waived by Seller.  14.2 Termination. Upon termination of this Agreement in accordance with this Agreement, all  outstanding amounts due to Administrative Agent, on behalf of Buyers, under the Principal  Agreements shall be immediately due and payable without notice (except as expressly set forth in  this Agreement) to Seller and without presentment, demand, protest, notice of protest or dishonor,  or other notice of default, and without formally placing Seller in default, all of which are hereby  expressly waived by Seller.  Further, any termination of this Agreement shall not affect the  outstanding obligations of Seller under this Agreement or any other Principal Agreement and all  such outstanding obligations and the rights and remedies afforded Administrative Agent, on  behalf of Buyers, in connection therewith, including, without limitation, those rights and remedies  afforded Administrative Agent, on behalf of Buyers, under this Agreement, shall survive any  termination of this Agreement.  Administrative Agent and Buyers shall not be liable to Seller for  any costs, loss or damages arising from or relating to a termination by Administrative Agent, on  behalf of Buyers, in accordance with any subsection of this Section 14.2.  14.3 Extension of Term.  Upon mutual agreement of Seller and Administrative Agent, on behalf of  Buyers, the term of this Agreement may be extended.  Such extension may be made subject to the  terms and conditions hereunder and to any other terms and conditions as Administrative Agent,  on behalf of Buyers, may determine to be necessary or advisable.  Under no circumstances shall  such an extension by Administrative Agent, on behalf of Buyers, be interpreted or construed as a  forfeiture by Administrative Agent or any Buyer of any of its rights, entitlements or interest  created hereunder.  Seller acknowledges and understands that Administrative Agent and Buyers  are under no obligation whatsoever to extend the term of this Agreement beyond the initial term.  

 

  57  Error! No document variable supplied.  ARTICLE 15  GENERAL  15.1 Integration; Servicing Provisions Integral and Non-Severable.  This Agreement, together with the  other Principal Agreements, and all other documents executed pursuant to the terms hereof and  thereof, constitute the entire agreement between the parties with respect to the subject matter  hereof and supersedes any and all prior or contemporaneous oral or written communications with  respect to the subject matter hereof, all of which such communications are merged herein.  All  Transactions hereunder constitute a single business and contractual relationship and each  Transaction has been entered into in consideration of the other Transactions.  Accordingly, each  of Administrative Agent, on behalf of Buyers, and Seller agrees 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.  Without limiting the generality of the  foregoing, the provisions of this Agreement related to the servicing and Servicing Rights of the  Purchased Mortgage Loans are integral, interrelated, and are non-severable from the purchase and  sale provisions of the Agreement.  Administrative Agent and Buyers have relied upon such  provisions as being integral and non-severable in determining whether to enter into this  Agreement and in determining the Purchase Price methodology for such Mortgage Loans.  The  integration of these servicing provisions is necessary to enable Administrative Agent and Buyers  to obtain the maximum value from the sale of the Purchased Mortgage Loans by having the  ability to sell the Servicing Rights related to such Purchased Mortgage Loans free from any  claims or encumbrances.  Further, the fact that Seller or any Servicer may be entitled to a  servicing fee for interim servicing of the Purchased Mortgage Loans or that Administrative  Agent, on behalf of Buyers, may provide a separate notice of default to Seller or any Servicer  regarding the servicing of the Purchased Mortgage Loans shall not affect or otherwise change the  intent of Seller, Administrative Agent and Buyers regarding the integral and non- severable  nature of the provisions in the Agreement related to servicing and Servicing Rights nor will such  facts affect or otherwise change Administrative Agent’s, on behalf of Buyers, ownership of the  Servicing Rights related to the Purchased Mortgage Loans.  15.2 Amendments.  Other than as contemplated by Section 9.14, no modification, waiver, amendment,  discharge or change of this Agreement shall be valid unless the same is in writing and signed by  the party against whom the enforcement of such modification, waiver, amendment, discharge or  change is sought.  15.3 No Waiver.  No failure or delay on the part of Seller, Administrative Agent or Buyers in  exercising any right, power or privilege hereunder and no course of dealing between Seller and  Administrative Agent, on behalf of Buyers, shall operate as a waiver thereof nor shall any single  or partial exercise of any right, power or privilege hereunder preclude any other or further  exercise thereof or the exercise of any other right, power or privilege hereunder.  15.4 Remedies Cumulative.  The rights and remedies herein expressly provided are cumulative and not  exclusive of any rights or remedies that Seller, Administrative Agent or Buyers would otherwise  have.  No notice or demand on Seller in any case shall entitle Seller to any other or further notice  or demand in similar or other circumstances or constitute a waiver of the rights of Administrative  Agent or any Buyer to any other or further action in any circumstances without notice or demand.  15.5 Rehypothecation; Assignment.  The Principal Agreements may not be assigned by Seller.  The  Principal Agreements, along with Administrative Agent’s right, title and interest, including its  

 

  58  Error! No document variable supplied.  security interest, in any or all of the Purchased Assets and other Purchased Items, may, at any  time, be transferred or assigned, in whole or in part, by Administrative Agent.  A Buyer may,  upon prior written consent of Administrative Agent in its sole and absolute discretion, transfer or  assign, in whole or in part, its respective right, title and interest, including its security interest, in  any or all of the Purchased Assets and other Purchased Items. Any transferee or assignee of  Administrative Agent or any such Buyer may enforce the Principal Agreements and such security  interest directly against Seller.  Administrative Agent, on behalf of Buyers, shall have free and unrestricted use of all Purchased Assets  and nothing shall preclude Administrative Agent, on behalf of Buyers, from engaging in repurchase  transactions with such Purchased Assets or otherwise pledging, repledging, transferring, hypothecating, or  rehypothecating such Purchased Assets; provided, that no such transaction shall affect the obligations of  Administrative Agent to transfer the Purchased Assets to Seller on the Repurchase Date free and clear of  any pledge, Lien, security interest, encumbrance, charge or other adverse claim as set forth in Section 6.5.  Administrative Agent, on behalf of Buyers, acting solely for this purpose as a non-fiduciary agent of  Seller, shall maintain a register (the “Register”) on which it shall record the rights of Administrative  Agent and any assignee of Administrative Agent under this Agreement, and each assignment.  The  Register shall include the names and addresses of each Buyer (including all assignees or successors) and  the percentage or portion of such rights and obligations assigned.  The entries in the Register shall be  conclusive absent manifest error, and Administrative Agent, Buyers and Seller shall treat each person  whose name is recorded in the Register pursuant to the terms hereof as a Buyer hereunder for all purposes  of this agreement; provided, however, that a failure to make any such recordation, or any error in such  recordation shall not affect Seller’s obligations in respect of such rights.  15.6 Successors and Assigns.  The terms and provisions of this Agreement shall be binding upon and  inure to the benefit of the parties hereto and their respective successors and permitted assigns.  15.7 Participations.  Upon prior written consent of Administrative Agent in its sole and absolute  discretion, Buyers may from time to time sell or otherwise grant participations in this Agreement  and the holder of any such participation, if the participation agreement so provides, (a) shall, with  respect to its participation, be entitled to all of the rights of such Buyer and (b) may exercise any  and all rights of set-off or banker’s lien with respect thereto, in each case as fully as though Seller  were directly obligated to the holder of such participation in the amount of such participation;  provided, however, that Seller shall not be required to send or deliver to any of the participants  other than such Buyer any of the materials or notices required to be sent or delivered by it under  the terms of this Agreement, nor shall they have to act except in compliance with the instructions  of Administrative Agent and the applicable Buyer; provided, further, that, Administrative Agent,  in its capacity as a Buyer hereunder, may from time to time sell or otherwise grant participations  in this Agreement without prior consent of any other Buyer or Seller.  If any Buyer sells a participation, such Buyer shall, acting solely for this purpose as a non- fiduciary agent of Seller, maintain a register on which it enters the name and address of each  participant and the principal amounts (and stated interest) of each participant’s interest in the  Purchased Assets and other Purchased Items under the Principal Agreements (the “Participant  Register”); provided that such Buyer shall not have any obligation to disclose all or any portion  of the Participant Register (including the identity of any participant or any information relating to  a participant’s interest in any Purchased Asset and other Purchased Item under the Principal  Agreements) to any person except to the extent that such disclosure is necessary to establish that  such interest is in registered form under Section 5f.103-1(c) of the United States Treasury  Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and  

 

  59  Error! No document variable supplied.  such Buyer and participant shall treat each person whose name is recorded in the Participant  Register as the owner of such participation for all purposes of this Agreement notwithstanding  any notice to the contrary.  15.8 Invalidity.  In case any one or more of the provisions contained in this Agreement shall for any  reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or  unenforceability shall not affect any other provisions hereof, and this Agreement shall be  construed as if such invalid, illegal or unenforceable provision had not been included.  15.9 Additional Instruments.  Seller shall execute and deliver such further instruments and shall do and  perform all matters and things necessary or expedient to be done or observed for the purpose of  effectively creating, maintaining and preserving the security and benefits intended to be afforded  by this Agreement.  15.10 Survival.  All representations, warranties, covenants and agreements herein contained on the part  of Seller shall survive any Transaction and shall be effective so long as this Agreement is in  effect or there remains any obligation of Seller hereunder to be performed.  15.11 Notices.  (a) All notices, demands, consents, requests and other communications required or permitted  to be given or made hereunder in writing shall be mailed (first class, return receipt  requested and postage prepaid) or delivered in person or by overnight delivery service or  by electronic mail, addressed to the respective parties hereto at their respective addresses  set forth below or, as to any such party, at such other address as may be designated by it  in a notice to the other:  If to Seller: Grapetree Lending LLC   [***]  Attention: [***]   Telephone No.: [***]   Email: [***]    If to Guarantor: Altisource Asset Management Corporation    [***]  Attention: [***]   Telephone No.: [***]   Email: [***]  If to Administrative Agent: Flagstar Bank FSB  [***]  Attention: [***]  Telephone No.: [***]  Email: [***]    If to a Buyer: Such address set forth on such Buyer’s signature page  attached hereto.      All written notices shall be conclusively deemed to have been properly given or made  when duly delivered, if delivered in person or by overnight delivery service, or on the  

 

  60  Error! No document variable supplied.  [***] after being deposited in the mail, if mailed in accordance herewith, or upon  transmission by the sending party of an electronic mail with respect to which no delivery  failure is received by such sending party, if delivered by electronic mail.   Notwithstanding the foregoing, any notice of termination shall be deemed effective upon  mailing, transmission, or delivery, as the case may be.  (b) All notices, demands, consents, requests and other communications required or permitted  to be given or made hereunder which are not required to be in writing may also be  provided electronically either (i) as an electronic mail sent and addressed to the  respective parties hereto at their respective electronic mail addresses set forth below, or  as to any such party, at such other electronic mail address as may be designated by it in a  notice to the other, (ii) with respect to Administrative Agent, via a posting of such notice  on Administrative Agent’s customer website(s) or (iii) with respect to any Buyer, the  electronic mail addresses set forth on such Buyer’s signature page attached hereto.  If to Seller: [***]  If to Administrative Agent: [***]  15.12 Governing Law.  This Agreement and the rights and obligations of the parties hereunder shall be  construed and enforced in accordance with and governed by the laws of the State of New York,  without regard to principles of conflicts of laws (other than Sections 5-1401 and 5-1402 of the  New York General Obligations Law).  15.13 Submission to Jurisdiction; Service of Process; Waivers.  All legal actions between or among the  parties regarding this Agreement, including, without limitation, legal actions to enforce this  Agreement or because of a dispute, breach or default of this Agreement, shall be brought in the  federal or state courts located in New York County, New York, which courts shall have sole and  exclusive in personam, subject matter and other jurisdiction in connection with such legal actions.   The parties hereto irrevocably consent and agree that venue in such courts shall be convenient  and appropriate for all purposes and, to the extent permitted by law, waive any objection that they  may now or hereafter have to the venue of any such action or proceeding in any such court or that  such action or proceeding was brought in an inconvenient court and agrees not to plead or claim  the same.  The parties hereto further irrevocably consent and agree that service of process in any  such action or proceeding may be effected by mailing a copy thereof by registered or certified  mail (or any substantially similar form of mail), postage prepaid, to its address set forth in  Section 15.11(a), and that nothing herein shall affect the right to effect service of process in any  other manner permitted by law or shall limit the right to sue in any other jurisdiction.  15.14 Waiver of Jury Trial.  Each of Seller, Administrative Agent and Buyers hereby irrevocably  waives, to the fullest extent permitted by Applicable Law, any and all right to trial by jury in any  legal proceeding arising out of or relating to this Agreement, any other Principal Agreement or  the transactions contemplated hereby or thereby.  15.15 Counterparts.  This Agreement may be executed in one or more counterparts (which may be  delivered electronically), each of which shall be deemed to be an original, and all such  counterparts shall together constitute one and the same instrument. The words “execution,”  signed,” “signature,” and words of like import in this Agreement or in any other certificate,  agreement or document related to this Agreement shall include images of manually executed  signatures transmitted by facsimile or other electronic format (including, without limitation,  “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and  

 

  61  Error! No document variable supplied.  AdobeSign).  The use of electronic signatures and electronic records (including, without  limitation, any contract or other record created, generated, sent, communicated, received, or  stored by electronic means) shall be of the same legal effect, validity and enforceability as a  manually executed signature or use of a paper-based record-keeping system to the fullest extent  permitted by Applicable Law, including the Federal Electronic Signatures in Global and National  Commerce Act, the New York State Electronic Signatures and Records Act and any other  Applicable Law, including, without limitation, any state law based on the Uniform Electronic  Transactions Act or the Uniform Commercial Code. Each of the parties hereto agrees that the  transaction consisting of this Agreement may be conducted by electronic means. Each party  agrees, and acknowledges that it is such party’s intent, that if such party signs this Agreement  using an electronic signature, it is signing, adopting, and accepting this agreement and that  signing this Agreement using an electronic signature is the legal equivalent of having placed its  handwritten signature on this Agreement on paper. Each party acknowledges that it is being  provided with an electronic or paper copy of this Agreement in a usable format.  15.16 Headings.  The headings in this Agreement are for purposes of reference only and shall not limit  or otherwise affect the meaning or interpretation of any provisions hereof.  15.17 Confidential Information.  Each of the parties hereto acknowledges and agrees that all written or  computer readable information provided by one party to any other regarding the terms set forth in  any of the Principal Agreements, any related agreement or the transactions contemplated thereby  or regarding Bank Data, operations, computer systems, technical data, business methods, and  other information designated by the disclosing party or its agent to be confidential, or that should  be considered confidential in nature by a reasonable person given the nature of the information  and the circumstances of its disclosure (the “Confidential Terms”) shall be kept confidential and  shall not be divulged to any person (including, without limitation, any Service Providers or other  third-party vendors or other third-party agents) without the prior written consent of such other  party except to the extent that (a) it is necessary to do so in working with legal counsel, auditors,  taxing authorities or other governmental agencies or regulatory bodies or in order to comply with  any applicable federal, state or local laws, process, or the rules and regulations of any stock  exchange, (b) any of the Confidential Terms are in the public domain other than due to a breach  of this covenant, (c) any assignee or any prospective assignee who has agreed in a written  contract to comply with the requirements substantially similar to this Section 15.17 or (d) in the  event of an Event of Default that is continuing Administrative Agent, on behalf of Buyers,  determines such information to be necessary to disclose in connection with the marketing and  sales of the Purchased Assets or otherwise to enforce or exercise Administrative Agent’s, on  behalf of Buyers, rights hereunder, notwithstanding the foregoing or anything to the contrary  contained herein or in any other Principal Agreement, the parties hereto may disclose to any and  all persons, without limitation of any kind, the federal, state and local tax treatment of the  Principal Agreements, any fact relevant to understanding the federal, state and local tax treatment  of the Principal Agreements, and all materials of any kind (including opinions or other tax  analyses) relating to such federal, state and local tax treatment and that may be relevant to  understanding such tax treatment; provided that none of Administrative Agent, any Buyer or  Seller may disclose the name of or identifying information with respect to the other or any pricing  terms or other nonpublic business or financial information (including any sublimits and financial  covenants) that is unrelated to the federal, state and local tax treatment of the Principal  Agreements and is not relevant to understanding the federal, state and local tax treatment of the  Principal Agreements, without the prior written consent of the other, provided that Seller may  identify Administrative Agent, Buyers and the Aggregate Transaction Limit to its lenders under  other facilities and its other third party creditors.    

 

  62  Error! No document variable supplied.  (b) Notwithstanding anything in this Agreement to the contrary, Administrative Agent, Buyers and  Seller shall comply with all applicable local, state and federal laws, including, without limitation,  all privacy and data protection law, rules and regulations that are applicable to the Purchased  Assets, Purchased Items and/or any applicable terms of this Agreement (the “Confidential  Information”).  Administrative Agent, Buyers and Seller understand that the Confidential  Information may contain “nonpublic personal information”, as that term is defined in section  509(4) of the Gramm Leach Bliley act (the “GLB Act”), and each agrees to maintain such  nonpublic personal information that it receives hereunder in accordance with the GLB Act and  other applicable federal and state privacy laws.  Administrative Agent, Buyers and Seller shall  each implement such physical and other security measures as shall be necessary to (a) ensure the  security and confidentiality of the “nonpublic personal information” of the “customers” and  “consumers” (as those terms are defined in the GLB Act) of such party or any affiliate of such  party which that party holds, (b) protect against any threats or hazards to the security and integrity  of such nonpublic personal information, and (c) protect against any unauthorized access to or use  of such nonpublic personal information.  Administrative Agent, Buyers and Seller shall each, at a  minimum, establish and maintain such data security program as is necessary to meet the  objectives of the standards for safeguarding customer information issued by the Federal Trade  Commission as set forth in the code of federal regulations at 16 C.F.R. part 314 or interagency  guidelines establishing standards for safeguarding customer information as set forth in the code of  federal regulations at 12 C.F.R. parts 30, 168, 170, 208, 211, 225, 263, 308 and 364. Upon  request, Administrative Agent, Buyers or Seller, as applicable, will provide evidence reasonably  satisfactory to allow the requesting party to confirm that the non-requesting party has satisfied its  obligations as required under this section, without limitation, this may include the requesting  party’s review of audits, summaries of test results, and other equivalent evaluations of the  nonrequesting party.  Administrative Agent, Buyers and Seller each shall notify the other  promptly following discovery of any breach or compromise of the security, confidentiality, or  integrity of nonpublic personal information of the customers and consumers of the non-notifying  party or any affiliate of the non-notifying party provided directly to the notifying party by the  non-notifying party of such affiliate, the notifying party shall provide such notice to the non- notifying party by personal delivery, by facsimile with confirmation of receipt, or by overnight  courier with confirmation of receipt of the applicable requesting individual.    (c) Seller further agrees that, Bank Data is and shall remain the exclusive property of Administrative  Agent.  Seller shall not store, process, or use Bank Data for any purpose, except as expressly  permitted pursuant to the terms of this Agreement.  Seller shall not permit any Bank Data to be  sold, assigned, leased or otherwise provided to third parties.  Administrative Agent reserves all  rights not expressly granted herein in or to the Bank Data.  (d) The provisions set forth in this Section 15.17 shall survive the termination of this Agreement.  15.18 Intent.  Seller, Administrative Agent and each Buyer recognize and intend that:  (a) this Agreement and each Transaction hereunder constitutes a “repurchase agreement” as  that term is defined in Section 101(47)(A)(i) of the Bankruptcy Code, a “securities  contract” as that term is defined in Section 741(7)(A)(i) of the Bankruptcy Code and a  “master netting agreement” as that term is defined in Section 101(38A)(A) of the  Bankruptcy Code and that the pledge of the Related Credit Enhancement in Section 6.1  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 and that each  Purchased Asset constitutes either a “mortgage loan” or “an interest in a mortgage” as  

 

  63  Error! No document variable supplied.  such terms are used in the Bankruptcy Code.  Seller, Administrative Agent and each  Buyer 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). Each of Seller and Buyer further agree that neither shall challenge, and  each hereby waives to the fullest extent available under Applicable Law its right to  challenge, the characterization of this Agreement or any Transaction hereunder as a  “master netting agreement,” “repurchase agreement” and/or “securities contract” within  the meaning of the Bankruptcy Code;  (b) Administrative Agent’s, on behalf of Buyers, right to liquidate the Purchased Assets  delivered to it in connection with the Transactions hereunder or to accelerate or terminate  this Agreement or otherwise exercise any other remedies herein is a contractual right to  liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code  Sections 555, 559 and 561 and any payments or transfers of property made with respect  to this Agreement or any Transaction to: (i) satisfy a Margin Deficit, or (ii) comply with a  Margin Call, shall in each case be considered a “margin payment” as such term is defined  in Bankruptcy Code Section 741(5); and any payments or transfers of property by Seller  (i) in partial or full satisfaction of a repurchase obligation, or (ii) fees and costs under this  Agreement or under any Transaction shall in each case constitute “settlement payments”  as such term is defined in Bankruptcy Code Section 741(8) and Administrative Agent’s,  on behalf of Buyers, right to set-off claims and appropriate and apply any and all deposits  of money or property or any other indebtedness at any time held or owing by Buyer to or  for the credit of the account of any Affiliate against and on account of the obligations and  liabilities of Seller pursuant to Section 11.10 hereof is a contractual right as described in  Bankruptcy Code Sections 553 and 561; and  (c) this Agreement and each Transaction hereunder is intended to create a mutuality of  obligations among the parties, and as such, the Agreement and each Transaction  constitutes a contract that (i) is between all of the parties and (ii) places each party in the  same right and capacity.  15.19 Right to Liquidate.  It is understood that either party’s right to liquidate Purchased Assets  delivered to it in connection with Transactions hereunder or to terminate or accelerate obligations  under this Agreement or any individual Transaction, are contractual rights for same as described  in Sections 555 and 561 of the Bankruptcy Code.  15.20 Insured Depository Institution.  If a party hereto is an “insured depository institution” as such  term is defined in the Federal Deposit Insurance Act (as amended, the “FDIA”), then each  Transaction hereunder is a “qualified financial contract” as that term is defined in the 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.  15.21 Netting Contract.  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 the FDICIA except insofar as one or more  of the parties hereto is not a “financial institution” as that term is defined in the FDICIA.  

 

  64  Error! No document variable supplied.  15.22 Tax Treatment.  Each party to this Agreement acknowledges that it is its intent, solely for U.S.  federal income tax law and any relevant provisions of state or local tax law, but not for  bankruptcy or any other non-tax purpose, to treat each Transaction as indebtedness of Seller that  is secured by the Purchased Assets and to treat the Purchased Assets as beneficially owned by  Seller in the absence of an Event of Default by Seller.  All parties to this Agreement agree to such  tax treatment and agree to take no action inconsistent with this treatment, unless required by law.    15.23 Examination and Oversight by Regulators.  Seller agrees that the transactions with Administrative  Agent, on behalf of Buyers, under this Agreement may be subject to regulatory examination and  oversight by one or more Governmental Authorities.  Seller shall comply with all reasonable  requests made by Administrative Agent, on behalf of Buyers, to assist Administrative Agent, on  behalf of Buyers, in complying with regulatory requirements imposed on Administrative Agent or  any Buyer.  15.24 Anti-Money Laundering Laws Notice.  Administrative Agent, on behalf of Buyers, hereby  notifies Seller that pursuant to the requirements of Anti-Money Laundering Laws, it is required to  obtain, verify and record information that identifies Seller, which information includes the name  and address of Seller and other information that will allow it to identify Seller in accordance with  Anti-Money Laundering Laws.  Seller shall, and shall cause each of its Subsidiaries to, provide to  the extent commercially reasonable, such information and take such other actions as are  reasonably requested by Administrative Agent, on behalf of Buyers, in order to assist  Administrative Agent or any Buyer in maintaining compliance with Anti-Money Laundering  Laws.  15.25 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding  anything to the contrary in any Principal Agreement or in any other agreement, arrangement or  understanding among any such parties, each party hereto acknowledges that any liability of any  EEA Financial Institution arising under any Principal Agreement, to the extent such liability is  unsecured, may be subject to the write-down and conversion powers of an EEA Resolution  Authority and agrees and consents to, and acknowledges and agrees to be bound by:  (a) the application of any Write-Down and Conversion Powers by an EEA Resolution  Authority to any such liabilities arising hereunder which may be payable to it by any  party hereto that is an EEA Financial Institution; andthe effects of any Bail-In Action on  any such liability, including, if applicable:a reduction in full or in part or cancellation of  any such liability;  (ii) a conversion of all, or a portion of, such liability into shares or other instruments  of ownership in such EEA Financial Institution, its parent undertaking, or a  bridge institution that may be issued to it or otherwise conferred on it, and that  such shares or other instruments of ownership will be accepted by it in lieu of  any rights with respect to any such liability under this Agreement or any other  Principal Agreement; or  (iii) the variation of the terms of such liability in connection with the exercise of the  write-down and conversion powers of any EEA Resolution Authority.  15.26 Reasonable Assurances.  If, at any time during the term of the Agreement, Administrative Agent,  on behalf of Buyers, has reason to believe that Seller is not conducting its business in accordance  with, or otherwise is not satisfying: (i) all applicable statutes, regulations, rules, and notices of  federal, state, or local governmental agencies or instrumentalities, all applicable requirements of  

 

  65  Error! No document variable supplied.  Approved Investors and Insurers and prudent industry standards or (ii) all applicable requirements  of Administrative Agent and Buyers, as set forth in this Agreement, then, Administrative Agent,  on behalf of Buyers, shall have the right to demand, pursuant to notice from Administrative  Agent, on behalf of Buyers, to Seller specifying with particularity the alleged act, error or  omission in question, reasonable assurances from Seller that such a belief is in fact unfounded,  and any failure of Seller to provide to Administrative Agent, on behalf of Buyers, such reasonable  assurances in form and substance reasonably satisfactory to Administrative Agent, within the  time frame specified in such notice, shall itself constitute an Event of Default hereunder, without  a further cure period.  Seller hereby authorizes Administrative Agent, on behalf of Buyers, to take  such actions as may be necessary or appropriate to confirm the continued eligibility of Seller for  Transactions hereunder, including without limitation (i) ordering credit reports and/or appraisals  with respect to any Purchased Mortgage Loan, (ii) contacting Mortgagers, licensing authorities  and Approved Investors or Insurers, and (iii) performing due diligence reviews on the Purchased  Mortgage Loans and related Mortgage Loan Files pursuant to Section 6.6 and other Purchased  Assets.  15.27 Service Providers.  Seller shall not be permitted to (a) subcontract or delegate performance of its  obligations under this Agreement to any third party (each, a “Service Provider”) or (b) otherwise  engage any Service Provider to provide any services (or perform any actions on its behalf) in  connection with this Agreement, including for purposes of uploading documents or files with  respect to any Purchased Asset or otherwise using Administrative Agent’s electronic platforms,  websites or systems for or on behalf of Seller.  Administrative Agent shall have the right, at any  time in its sole and absolute discretion, to limit (i) Seller’s or any Service Provider’s access to any  of Administrative Agent’s electronic platforms, websites or systems, or (ii) any Service  Provider’s ability to otherwise perform any actions on behalf of Seller under this Agreement, if  Administrative Agent believes that Seller or any Service Provider is acting or has acted in  violation of this Section 15.27.  15.28 No Liability With Respect to Benchmark.  Administrative Agent does not warrant or accept  responsibility for, and shall not have any liability with respect to (a) the continuation of,  administration of, submission of, calculation of or any other matter related to 1-Month Term  SOFR, or any component definition thereof or rates referred to in the definition thereof, or any  alternative, successor or replacement rate thereto (including any Benchmark Replacement),  including whether the composition or characteristics of any such alternative, successor or  replacement rate (including any Benchmark Replacement) will be similar to, or produce the same  value or economic equivalence of, or have the same volume or liquidity as, 1-Month Term SOFR  or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect,  implementation or composition of any Conforming Changes.  Administrative Agent and its  affiliates or other related entities may engage in transactions that affect the calculation of 1- Month Term SOFR, any alternative, successor or replacement rate (including any Benchmark  Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Seller  or the Guarantor.  Administrative Agent may select information sources or services in its  reasonable discretion to ascertain 1-Month Term SOFR or any other Benchmark, in each case  pursuant to the terms of this Agreement, and shall have no liability to the Seller, the Guarantor or  any other person or entity for damages of any kind, including direct or indirect, special, punitive,  incidental or consequential damages, costs, losses or expenses (whether in tort, contract or  otherwise and whether at law or in equity), for any error or calculation of any such rate (or  component thereof) provided by any such information source or service.  

 

  66  Error! No document variable supplied.  ARTICLE 16   ADMINISTRATIVE AGENT  16.1 Appointment of Administrative Agent. Each Buyer irrevocably appoints and authorizes the  Administrative Agent to act on behalf of such Buyer under this Agreement and the other Principal  Agreements and to exercise such powers hereunder and thereunder as are specifically delegated  to Administrative Agent by the terms hereof and thereof, together with such powers as may be  reasonably incidental thereto, including without limitation the power to execute or authorize the  execution of financing or similar statements or notices, and other documents. In performing its  functions and duties under this Agreement, the Administrative Agent shall act solely as  Administrative Agent of the Buyers and does not assume and shall not be deemed to have  assumed any obligation towards or relationship of agency or trust with or for any other Person.  16.2 Account with Administrative Agent or any Buyer. Seller authorizes Administrative Agent and  each Buyer, in Administrative Agent’s or such Buyer’s sole discretion, upon notice to Seller to  charge any account of Seller maintained with the Administrative Agent or such Buyer for the  amount of any principal, interest, or other amounts or costs due under this Agreement when the  same become due and payable under the terms of this Agreement.  16.3 Scope of Administrative Agent’s Duties. The Administrative Agent shall have no duties or  responsibilities except those expressly set forth herein, and shall not, by reason of this Agreement  or otherwise, have a fiduciary relationship with any Buyer (and no implied covenants or other  obligations shall be read into this Agreement against the Administrative Agent). None of  Administrative Agent, its Affiliates nor any of their respective directors, officers, employees or  Administrative Agents shall be liable to any Buyer for any action taken or omitted to be taken by  it or them under this Agreement or any document executed pursuant hereto, or in connection  herewith or therewith, with the consent or at the request of each other Buyer (or all of the Buyers  for those acts requiring consent for all of the Buyers) (except for its or their own willful  misconduct or gross negligence), nor be responsible for or have any duties to ascertain, inquire  into or verify (a) any recitals or warranties made by any party or any Affiliate of any party, or any  officer thereof contained herein or therein, (b) the effectiveness, enforceability, validity or due  execution of this Agreement or any document executed pursuant hereto or any security  thereunder, (c) the performance by the parties of their respective obligations hereunder or  thereunder, or (d) the satisfaction of any condition hereunder or thereunder, including without  limitation in connection with entering into any Transaction hereunder. Administrative Agent and  its Affiliates shall be entitled to rely upon any certificate, notice, document or other  communication (including any email, facsimile transmission or oral communication) believed by  it to be genuine and correct and to have been sent or given by or on behalf of a proper person.  Administrative Agent may employ other agents and may consult with legal counsel, independent  public accountants and other experts selected by it and shall not be liable to any Buyer (except as  to money or property received by them or their authorized Administrative Agents), for the  negligence or misconduct of any such Administrative Agent selected by it with reasonable care or  for any action taken or omitted to be taken by it in good faith in accordance with the advice of  such counsel, accountants or experts.  16.4 Successor Administrative Agent. Administrative Agent may resign as such at any time upon at  least [***] prior notice to Seller and each of the Buyers. If Administrative Agent at any time shall  resign or if the office of Administrative Agent shall become vacant for any other reason, Buyers  shall, by written instrument, appoint successor agent(s) (“Successor Administrative Agent”)  satisfactory to Buyers and, so long as no Event of Default, Event of Early Termination, Potential  Default, Material Adverse Effect with respect to Seller or Cease Funding Event has occurred, to  

 

  67  Error! No document variable supplied.  Seller (which approval shall not be unreasonably withheld or delayed); provided, however that  any such successor Administrative Agent shall be a bank or a trust company or other financial  institution which maintains an office in the United States, or a commercial bank organized under  the laws of the United States or any state thereof, or any Affiliate of such bank or trust company  or other financial institution which is engaged in the banking business, and shall have a combined  capital and surplus of at least $[***]. Such Successor Administrative Agent shall thereupon  become the Administrative Agent hereunder, as applicable, and Administrative Agent shall  deliver or cause to be delivered to any Successor Administrative Agent such documents of  transfer and assignment as such Successor Administrative Agent may reasonably request. If a  Successor Administrative Agent is not so appointed or does not accept such appointment before  the resigning Administrative Agent’s resignation becomes effective, the resigning Administrative  Agent may appoint a temporary successor to act until such appointment by Buyers and, if  applicable, Seller, is made and accepted, or if no such temporary successor is appointed as  provided above by the resigning Administrative Agent, Buyers shall thereafter perform all of the  duties of the resigning Administrative Agent hereunder until such appointment by Buyers and, if  applicable, Seller, is made and accepted. Such Successor Administrative Agent shall succeed to  all of the rights and obligations of the resigning Administrative Agent as if originally named. The  resigning Administrative Agent shall duly assign, transfer and deliver to such Successor  Administrative Agent all moneys at the time held by the resigning Administrative Agent  hereunder after deducting therefrom its expenses for which it is entitled to be reimbursed  hereunder. Upon such succession of any such Successor Administrative Agent, the resigning  Administrative Agent shall be discharged from its duties and obligations, in its capacity as  Administrative Agent hereunder, except for its gross negligence or willful misconduct arising  prior to its resignation hereunder, and the provisions of this Article 15 shall continue in effect for  the benefit of the resigning Administrative Agent in respect of any actions taken or omitted to be  taken by it while it was acting as Administrative Agent.  16.5 Credit Decisions. Each Buyer expressly acknowledges that neither Administrative Agent nor any  of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any  representations or warranties to it and that no act by Administrative Agent hereafter taken,  including any review of the affairs of Seller or any Affiliate or the Purchased Assets or Eligible  Mortgage Loans, shall be deemed to constitute any representation or warranty by Administrative  Agent to such Buyer.  Each Buyer acknowledges that it has, independently of Administrative  Agent and each other Buyer and based on the financial statements of Seller and such other  documents, information and investigations as it has deemed appropriate, made its own credit  decision to fund a Transaction hereunder from time to time. Each Buyer also acknowledges that it  will, independently of Administrative Agent and each other Buyer and based on such other  documents, information and investigations as it shall deem appropriate at any time, continue to  make its own credit decisions as to exercising or not exercising from time to time any rights and  privileges available to it under this Agreement, any Principal Agreement or any other document  executed pursuant hereto.  16.6 Authority of Administrative Agent to Enforce This Agreement. Each Buyer, subject to the terms  and conditions of this Agreement, grants the Administrative Agent full power and authority as  attorney-in-fact to institute and maintain actions, suits or proceedings for the collection and  enforcement of any Transaction or Debt outstanding under this Agreement or any other Principal  Agreement and to file such proofs of debt or other documents as may be necessary to have the  claims of the Buyers allowed in any proceeding relative to any party, or their respective creditors  or affecting their respective properties, and to take such other actions which Administrative Agent  considers to be necessary or desirable for the protection, collection and enforcement of this  Agreement or the other Principal Agreements.  

 

  68  Error! No document variable supplied.  16.7 Indemnification of Administrative Agent. The Buyers agree (which agreement shall survive the  expiration or termination of this Agreement) to indemnify the Administrative Agent and its  Affiliates (to the extent not reimbursed by Seller, but without limiting any obligation of Seller to  make such reimbursement), ratably according to their respective Allocation Percentages, from  and against any and all claims, damages, losses, liabilities, costs or expenses of any kind or nature  whatsoever (including, without limitation, reasonable fees and expenses of house and outside  counsel) which may be imposed on, incurred by, or asserted against the Administrative Agent and  its Affiliates in any way relating to or arising out of this Agreement, any of the other Principal  Agreements or the transactions contemplated hereby or any action taken or omitted by the  Administrative Agent and its Affiliates under this Agreement or any of the Principal Agreements;  provided, however, that no Buyer shall be liable for any portion of such claims, damages, losses,  liabilities, costs or expenses resulting from the Administrative Agent’s or its Affiliate’s gross  negligence or willful misconduct. Without limitation of the foregoing, each Buyer agrees to  reimburse the Administrative Agent and its Affiliates promptly upon demand for its ratable share  of any reasonable out-of-pocket expenses (including, without limitation, reasonable fees and  expenses of house and outside counsel) incurred by the Administrative Agent and its Affiliates in  connection with the preparation, execution, delivery, administration, modification, amendment or  enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in  respect of rights or responsibilities under, this Agreement or any of the other Principal  Agreements, to the extent that the Administrative Agent and its Affiliates are not reimbursed for  such expenses by Seller, but without limiting the obligation of Seller to make such  reimbursement. Each Buyer agrees to reimburse the Administrative Agent and its Affiliates  promptly upon demand for its ratable share of any amounts owing to the Administrative Agent  and its Affiliates by the Buyers pursuant to this Section 15.7, provided that, if the Administrative  Agent or its Affiliates are subsequently reimbursed by Seller for such amounts, they shall refund  to the Buyers on a pro rata basis the amount of any excess reimbursement. If the indemnity  furnished to the Administrative Agent and its Affiliates under this Section 15.7 shall become  impaired as determined in the Administrative Agent’s reasonable judgment or Administrative  Agent shall elect in its sole discretion to have such indemnity confirmed by the Buyers (as to  specific matters or otherwise), Administrative Agent shall give notice thereof to each Buyer and,  until such additional indemnity is provided or such existing indemnity is confirmed, the  Administrative Agent may cease, or not commence, to take any action. IN NO EVENT SHALL  ADMINISTRATIVE AGENT BE LIABLE FOR ANY INDIRECT, SPECIAL, PUNITIVE OR  CONSEQUENTIAL LOSS OR DAMAGE OF ANY KIND WHATSOEVER, INCLUDING,  BUT NOT LIMITED TO, LOST PROFITS, EVEN IF ADMINISTRATIVE AGENT HAS  BEEN ADVISED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND  REGARDLESS OF THE FORM OF ACTION.  In no event shall Administrative Agent be liable  for any failure or delay in the performance of its obligations hereunder because of circumstances  beyond its control, including, but not limited to, acts of God, flood, war (whether declared or  undeclared), terrorism, pandemic, fire, riot, embargo, government action, including any laws,  ordinances, regulations, governmental action or the like which delay, restrict or prohibit the  providing of the services contemplated by this Agreement.  16.8 Knowledge of Default. It is expressly understood and agreed that the Administrative Agent shall  be entitled to assume that no Event of Default, Event of Early Termination, a Potential Default, a  Material Adverse Effect with respect to Seller or a Cease Funding Event has occurred and is  continuing, unless the officers of the Administrative Agent immediately responsible for matters  concerning this Agreement shall have received a written notice from a Buyer or a Seller  specifying such Event of Default, Event of Early Termination, Potential Default, Material  Adverse Effect with respect to Seller or Cease Funding Event has occurred and stating that such  notice is a “notice of default”. Upon receiving such a notice, the Administrative Agent shall  

 

  69  Error! No document variable supplied.  promptly notify each Buyer of such Event of Default, Event of Early Termination, Potential  Default, Material Adverse Effect with respect to Seller or Cease Funding Event and provide each  Buyer with a copy of such notice and shall endeavor to provide such notice to the Buyers within  [***] (but without any liability whatsoever in the event of its failure to do so). The Administrative  Agent shall also furnish the Buyers, promptly upon receipt, with copies of all other notices or  other information required to be provided by Seller hereunder.  16.9 Administrative Agent’s Authorization; Action by Buyers. Except as otherwise expressly provided  herein, whenever the Administrative Agent is authorized and empowered hereunder on behalf of  the Buyers to give any approval or consent, or to make any request, or to take any other action on  behalf of the Buyers (including without limitation the exercise of any right or remedy hereunder  or under the other Principal Agreements), the Administrative Agent shall be required to give such  approval or consent, or to make such request or to take such other action only when so requested  in writing by Buyers. Action that may be taken by Buyers, any other specified Allocation  Percentage of the Buyers or all of the Buyers, as the case may be (as provided for hereunder) may  be taken (i) pursuant to a vote of the requisite percentages of Buyers as required hereunder at a  meeting (which may be held by telephone conference call); provided that, Administrative Agent  exercises good faith, diligent efforts to give all of Buyers reasonable advance notice of the  meeting, or (ii) pursuant to the written consent of the requisite percentages of the Buyers as  required hereunder; provided that, all of the Buyers are given reasonable advance notice of the  requests for such consent.  16.10 Enforcement Actions by the Administrative Agent. Except as otherwise expressly provided under  this Agreement or in any of the other Principal Agreements and subject to the terms hereof,  Administrative Agent will take such action, assert such rights and pursue such remedies under  this Agreement and the other Principal Agreements as the Buyers shall direct; provided, however,  that the Administrative Agent shall not be required to act or omit to act if, in the reasonable  judgment of the Administrative Agent, such action or omission may expose the Administrative  Agent to personal liability for which Administrative Agent has not been satisfactorily indemnified  hereunder or is contrary to this Agreement, any of the Principal Agreements or Applicable Law.  Except as expressly provided above or elsewhere in this Agreement or the other Principal  Agreements, no Buyer (other than the Administrative Agent, acting in its capacity as agent) shall  be entitled to take any enforcement action of any kind under this Agreement or any of the other  Principal Agreements.  16.11 Collateral Matters.   (a) The Administrative Agent is authorized on behalf of all of the Buyers, without the  necessity of any notice to or further consent from the Buyers, from time to time to take  any action with respect to any Purchased Asset, Purchased Item or the documents related  thereto which may be necessary to perfect and maintain a perfected security interest in  and Liens upon the Purchased Assets and related Purchased Items granted pursuant to the  Principal Agreements.    (b) The Buyers irrevocably authorize the Administrative Agent, in its reasonable discretion,  to the full extent set forth herein, (1) to release or terminate any Lien granted to or held  by the Administrative Agent upon any Purchased Assets and related Purchased Items (a)  upon termination of the Seller’s ability to request a Transaction and payment in full of all  repurchase obligations under this Agreement and any other payment obligations under  any other Principal Agreement; (b) constituting property (including, without limitation,  Equity Interests in any Person) sold or to be sold or disposed of as part of or in  

 

  70  Error! No document variable supplied.  connection with any disposition (whether by sale, by merger or by any other form of  transaction and including the property of any Subsidiary that is disposed of as permitted  hereby) permitted in accordance with the terms of this Agreement; (c) constituting  property in which a party owned no interest at the time the Lien was granted or at any  time thereafter; or (d) if approved, authorized or ratified in writing by the all of the  Buyers; (2) to subordinate the Lien granted to or held by Administrative Agent on any  Purchased Asset or related Purchased Item to any other holder of a Lien on such  Purchased Asset or related Purchased Item which is permitted herein; and (3) if all of the  Equity Interests held by the Seller in any Person are sold or otherwise transferred to any  transferee other than Seller or a Subsidiary of Seller as part of or in connection with any  disposition (whether by sale, by merger or by any other form of transaction) permitted in  accordance with the terms of this Agreement, to release such Person from all of its  obligations under the Principal Agreements (including, without limitation, under any  guaranty). Upon request by the Administrative Agent at any time, the Buyers will  confirm in writing the Administrative Agent’s authority to release particular types or  items of the Purchased Assets or related Purchased Items pursuant to this Section  15.11(b).  16.12 Administrative Agent in its Individual Capacity. Flagstar Bank FSB and its Affiliates, successors  and assigns shall each have the same rights and powers hereunder as any other Buyer and may  exercise or refrain from exercising the same as though such Buyer were not the Administrative  Agent. Flagstar Bank FSB and its Affiliates may (without having to account therefor to any  Buyer) accept deposits from, lend money to, and generally engage in any kind of banking, trust,  financial advisory or other business with the parties hereto as if such Buyer were not acting as the  Administrative Agent hereunder, and may accept fees and other consideration therefor without  having to account for the same to the Buyers.  16.13 Administrative Agent or other Titles. Any Buyer identified on the facing page or signature page  of this Agreement or in any amendment hereto or as designated with consent of the  Administrative Agent in any assignment agreement as lead arranger, documentation  administrative agent, syndications administrative agent or any similar titles, shall not have any  right, power, obligation, liability, responsibility or duty under this Agreement as a result of such  title other than those applicable to all Buyers as such. Without limiting the foregoing, the Buyers  so identified shall not have or be deemed to have any fiduciary relationship with any Buyer as a  result of such title. Each Buyer acknowledges that it has not relied, and will not rely, on the Buyer  so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.  16.14 No Reliance on Administrative Agent’s Customer Identification Program.    (a) Each Buyer acknowledges and agrees that neither such Buyer, nor any of its Affiliates,  participants or assignees, may rely on the Administrative Agent to carry out such  Buyer’s, Affiliate’s, participant’s or assignee’s customer identification program, or other  obligations required or imposed under or pursuant to the Patriot Act or the regulations  thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended  or replaced, the “CIP Regulations”), or any other anti-terrorism law, including any  programs involving any of the following items relating to or in connection with Seller or  any of its Subsidiaries, any of their respective Affiliates or agents, the Principal  Agreements or the transactions hereunder: (i) any identify verification procedures, (ii)  any record keeping, (iii) any comparisons with government lists, (iv) any customer  notices or (v) any other procedures required under the CIP Regulations or such other  laws.    

 

  71  Error! No document variable supplied.  (b) Each Buyer or assignee or participant of a Buyer that is not organized under the laws of  the United States or a state thereof (and is not excepted from the certification requirement  contained in Section 313 of the USA Patriot Act and the applicable regulations because it  is both (i) an Affiliate of a depository institution or foreign bank that maintains a physical  presence in the United States or foreign country, and (ii) subject to supervision by a  banking authority regulating such affiliated depository institution or foreign bank) shall  deliver to the Administrative Agent the certification, or, if applicable, recertification,  certifying that such Buyer is not a “shell” and certifying to other matters as required by  Section 313 of the USA Patriot Act and the applicable regulations: (x) within ten (10)  days after the Effective Date, and (y) at such other times as are required under the USA  Patriot Act.  16.15 Subordination Agreements. Each Buyer hereby irrevocably appoints, designates and authorizes  Administrative Agent to enter into any subordination or intercreditor agreement pertaining to any  Subordinated Debt, on its behalf and to take such action on its behalf under the provisions of any  such agreement (subject to the last sentence of this Section 15.15). Each Buyer further agrees to  be bound by the terms and conditions of each subordination or intercreditor agreement pertaining  to any Subordinated Debt. Each Buyer hereby authorizes Administrative Agent to issue blockages  notices in connection with any Subordinated Debt at the direction of Buyers (it being agreed and  understood that Administrative Agent will not act unilaterally to issue such blockage notices).  16.16 Erroneous Payments.   (a) If the Administrative Agent notifies a Buyer, or any Person who has received  funds on behalf of a Buyer (any such Buyer or other recipient, a “Payment Recipient”) that the  Administrative Agent has determined in its sole discretion (whether or not after receipt of any  notice under immediately succeeding clause (b)) that any funds received by such Payment  Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to,  or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not  known to such Buyer or other Payment Recipient on its behalf) (any such funds, whether received  as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise,  individually and collectively, an “Erroneous Payment”) and demands the return of such  Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the  property of the Administrative Agent and shall be segregated by the Payment Recipient and held  in trust for the benefit of Administrative Agent, and such Buyer shall (or, with respect to any  Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to)  promptly, but in no event later than [***] thereafter, return to the Administrative Agent the  amount of any such Erroneous Payment (or portion thereof) as to which such a demand was  made, in same day funds (in the currency so received), together with interest thereon in respect of  each day from and including the date such Erroneous Payment (or portion thereof) was received  by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same  day funds at the greater of the Federal Funds Rate and a rate determined by the Administrative  Agent in accordance with banking industry rules on interbank compensation from time to time in  effect. A notice of the Administrative Agent to any Payment Recipient under this clause (a) shall  be conclusive, absent manifest error.  (b) Without limiting immediately preceding clause (a), each Buyer, or any Person  who has received funds on behalf of a Buyer, hereby further agrees that if it receives a payment,  prepayment or repayment (whether received as a payment, prepayment or repayment of principal,  interest, fees, distribution or otherwise) from the Administrative Agent (or any of its Affiliates)  (x) that is in a different amount than, or on a different date from, that specified in a notice of  

 

  72  Error! No document variable supplied.  payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates)  with respect to such payment, prepayment or repayment, (y) that was not preceded or  accompanied by a notice of payment, prepayment or repayment sent by Administrative Agent (or  any of its Affiliates), or (z) that such Buyer, or other such recipient, otherwise becomes aware  was transmitted, or received, in error or by mistake (in whole or in part) in each case:  (i) (A) in the case of immediately preceding clauses (x) or (y), an error shall be  presumed to have been made (absent written confirmation from Administrative  Agent to the contrary) or (B) an error has been made (in the case of immediately  preceding clause (z)), in each case with respect to such payment, prepayment or  repayment; and  (ii) such Buyer shall (and shall cause any other recipient that receives funds on its  respective behalf to) promptly (and, in all events, within [***]of its knowledge of  such error) notify the Administrative Agent of its receipt of such payment,  prepayment or repayment, the details thereof (in reasonable detail) and that it is  so notifying the Administrative Agent pursuant to this Section 15.17(b).  (c) Each Buyer hereby authorizes the Administrative Agent to set off, net and apply  any and all amounts at any time owing to such Buyer under any Principal Agreement, or  otherwise payable or distributable by the Administrative Agent to such Buyer from any source,  against any amount due to the Administrative Agent under immediately preceding clause (a) or  under the indemnification provisions of this Agreement.  (d) In the event that an Erroneous Payment (or portion thereof) is not recovered by  the Administrative Agent for any reason, after demand therefor by the Administrative Agent in  accordance with immediately preceding clause (a), from any Buyer that has received such  Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such  Erroneous Payment (or portion thereof) on its respective behalf)  (such unrecovered amount, an  “Erroneous Payment Return Deficiency”), upon the Administrative Agent’s notice to such Buyer  at any time, (i) such Buyer shall be deemed to have assigned its rights to receive any payments  due and owing to it hereunder with respect to any such Transaction and related Repurchase Price  or any other Income or payments with respect thereto which such Erroneous Payment was made  (the “Erroneous Payment Impacted Transaction”) in an amount equal to the Erroneous Payment  Return Deficiency (or such lesser amount as Administrative Agent may specify) (such assignment  of the payments due and owing to it hereunder with respect to any such Transaction and related  Repurchase Price or any other Income or payments with respect thereto, the “Erroneous Payment  Deficiency Assignment”) at par plus any accrued and unpaid interest (with any assignment fee to  be waived by the Administrative Agent in such instance), and is hereby (together with Seller)  deemed to execute and deliver an assignment and assumption with respect to such Erroneous  Payment Deficiency Assignment, and such Buyer shall deliver such amounts to the Seller or  Administrative Agent, (ii) Administrative Agent as the assignee Buyer shall be deemed to acquire  the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the  Administrative Agent as the assignee Buyer shall become a Buyer hereunder with respect to such  Erroneous Payment Deficiency Assignment and the assigning Buyer shall cease to be a Buyer  hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the  avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its  applicable obligations hereunder which shall survive as to such assigning Buyer, and (iv)  Administrative Agent may reflect in the Register its ownership interest in the Purchased Assets  subject to the Erroneous Payment Deficiency Assignment. Administrative Agent may, in its  discretion, sell any Purchased Assets acquired pursuant to an Erroneous Payment Deficiency  

 

  73  Error! No document variable supplied.  Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return  Deficiency owing by the applicable Buyer shall be reduced by the net proceeds of the sale of such  Purchased Asset (or portion thereof), and Administrative Agent shall retain all other rights,  remedies and claims against such Buyer (and/or against any recipient that receives funds on its  respective behalf). For the avoidance of doubt, no Erroneous Payment Deficiency Assignment  will reduce the obligations of any Buyer and shall remain available in accordance with the terms  of this Agreement, including, for the avoidance of doubt, any amounts due and owing from Buyer  in connection with Section 3.4(e).  In addition, each party hereto agrees that, except to the extent  that Administrative Agent has sold a Purchased Asset (or portion thereof) acquired pursuant to an  Erroneous Payment Deficiency Assignment, and irrespective of whether Administrative Agent  may be equitably subrogated, Administrative Agent shall be contractually subrogated to all the  rights and interests of the applicable Buyer under the Principal Agreements with respect to each  Erroneous Payment Return Deficiency (the “Erroneous Payment Subrogation Rights”).  (e) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay,  discharge or otherwise satisfy any repurchase obligations owed by the Seller, except, in each  case, to the extent such Erroneous Payment is, and solely with respect to the amount of such  Erroneous Payment that is, comprised of funds received by the Administrative Agent from the  Seller for the purpose of making such Erroneous Payment.   (f) To the extent permitted by Applicable Law, no Payment Recipient shall assert  any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any  claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim  or counterclaim by the Administrative Agent for the return of any Erroneous Payment received,  including without limitation waiver of any defense based on “discharge for value” or any similar  doctrine  (g) Each party’s obligations, agreements and waivers under this Section 15.17 shall  survive the resignation or replacement of the Administrative Agent, any transfer of rights or  obligations by, or the replacement of, a Buyer, the termination of the repayment, satisfaction or  discharge of all repurchase obligations (or any portion thereof) under any Principal Agreement.  16.17 Defaulting Buyers.  The obligations of the Buyers hereunder to pay its Allocation Percentage of  the Purchase Price and to make payments pursuant to this Agreement are several and not joint.  The failure of any Buyer to make pay any such  Allocation Percentage of the Purchase Price or to  make any payment on any date required pursuant to this Agreement shall not relieve any other  Buyer of its corresponding obligation to do so on such date, and no Buyer shall be responsible for  the failure of any other Buyer to so make its Allocation Percentage of the Purchase Price or to  make any of its other payment required under this Agreement.  (a) Notwithstanding anything to the contrary contained in this Agreement, if any Buyer  becomes a Defaulting Buyer, then, until such time as that Buyer is no longer a Defaulting  Buyer, to the extent permitted by Applicable Law:  (b) To the extent a Buyer has become a Defaulting Buyer due to its failure to Allocation  Percentage of the Purchase Price or make a payment pursuant to clause (a) or (b) of the  definition  of “Defaulting Buyer”, then the other Buyers, or any of them, shall have the  right, but not the obligation to purchase all or any part of its Allocation Percentage of any  such Defaulting Buyer Deficiency that should have been made by the Defaulting Buyer,  and the Defaulting Buyer agrees to repay upon demand to each of the Buyers who has  advanced a portion of the Defaulting Buyer Deficiency the amount advanced on behalf of  

 

  74  Error! No document variable supplied.  the Defaulting Buyer, together with price differential thereon at the Default Rate (which,  for the avoidance of doubt, shall not be payable or reimbursable by Seller).  To the extent  that the Defaulting Buyer thereafter funds such Defaulting Buyer Deficiency with price  differential thereon, if applicable, such Buyer shall no longer be a Defaulting Buyer. If  more than one Buyer elects to advance a portion of a Defaulting Buyer Deficiency, such  Buyers’ advances shall be made based on the relative applicable percentage of each such  advancing Buyer or as otherwise agreed by such Buyers.  No reallocation hereunder shall  constitute a waiver or release of any claim of any party hereunder against a Defaulting  Buyer arising from such Buyer having become a Defaulting Buyer, including any claim  of any Non-Defaulting Buyer as a result of such Non-Defaulting Buyer’s increased  exposure following such reallocation.  (c) Any payment of any Repurchase Price, fees or other amounts received by Administrate  Agent for the account of such Defaulting Buyer (whether voluntary or mandatory, at  maturity or otherwise) or received by Administrative Agent from a Defaulting Buyer  shall be applied at such time or times as may be determined by Administrative Agent as  follows: first, to the payment of any amounts owing by such Defaulting Buyer to  Administrative Agent hereunder; second, as may request (so long as no Event of Default  exists), to the funding of any Purchase Price in respect of which such Defaulting Buyer  has failed to fund its portion thereof as required by this Agreement, as determined by  Administrative Agent; third, if so determined by Administrative Agent and Seller, to be  held in a deposit account and released pro rata in order to satisfy such Defaulting Buyer’s  potential future funding obligations with respect to Purchase Prices under this  Agreement; fourth, to the payment of any amounts owing to the Buyers as a result of any  judgment of a court of competent jurisdiction obtained by any Buyer against such  Defaulting Buyer as a result of such Defaulting Buyer’s breach of its obligations under  this Agreement; fifth, so long as no Margin Deficit or Event of Default exists, to the  payment of any amounts owing to Seller as a result of any judgment of a court of  competent jurisdiction obtained by Seller against such Defaulting Buyer as a result of  such Defaulting Buyer’s breach of its obligations under this Agreement; and sixth, to  such Defaulting Buyer or as otherwise directed by a court of competent jurisdiction;  provided that if such payment is a payment of the Repurchase Price with respect to any  Purchased Asset in respect of which such Defaulting Buyer has not fully funded its  appropriate share of any related Purchase Price, such payment shall be applied solely to  pay the Purchase Price of all Non-Defaulting Buyers on a pro rata basis prior to being  applied to the payment of any Purchase Price of such Defaulting Buyer until such time as  all Purchase Price are held by the Buyers pro rata in accordance with the Allocation  Percentages hereunder. Any payments, prepayments or other amounts paid or payable to  a Defaulting Buyer that are applied (or held) to pay amounts owed by a Defaulting Buyer  pursuant to this Section 15.17(c) shall be deemed paid to and redirected by such  Defaulting Buyer, and each Buyer irrevocably consents hereto.  (d) If Seller and Administrative Agent agree in writing that a Buyer is no longer a Defaulting  Buyer, Administrative Agent will so notify the parties hereto, whereupon as of the  effective date specified in such notice and subject to any conditions set forth therein, that  Buyer will, to the extent applicable, purchase at par that portion of outstanding Purchase  Price of the other Buyers or take such other actions as Administrative Agent may  determine to be necessary to cause the Purchase Prices to be held on a pro rata basis by  the Buyers in accordance with their Allocation Percentages, whereupon such Buyer will  cease to be a Defaulting Buyer; provided that no adjustments will be made retroactively  with respect to fees accrued or payments made by or on behalf of Seller while that Buyer  

 

  75  Error! No document variable supplied.  was a Defaulting Buyer; provided, further, that except to the extent otherwise expressly  agreed by the affected parties, no change hereunder from Defaulting Buyer to Buyer will  constitute a waiver or release of any claim of any party hereunder arising from that  Buyer’s having been a Defaulting Buyer.  (e) No Buyer shall be responsible for the failure of any Defaulting Buyer to pay any  Purchase Price or other payment required hereunder.  The rights and remedies against a  Defaulting Buyer under this Agreement are in addition to any other rights and remedies,  at law, in equity or otherwise that Administrative Agent, any Buyer, or Seller may have  against such Defaulting Buyer with respect to any Defaulting Buyer Deficiency or  otherwise.    (Signature pages to follow)  

 

  Signature Page to Master Repurchase Agreement  Error! No document variable supplied.  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as  of the date first above written.  FLAGSTAR BANK FSB, as Administrative Agent and as a  Buyer  By: __________________________  Name:  __________________________  Title:  __________________________       GRAPETREE LENDING LLC, as Seller  By: __________________________  Name:  [***]  Title:  General Counsel    ALTISOURCE ASSET MANAGEMENT CORPORATION, as  Guarantor  By: __________________________  Name:  [***]  Title:  General Counsel       

 

   Exhibit A-1  Error! No document variable supplied.  EXHIBIT A  GLOSSARY OF DEFINED TERMS  “1-Month Term SOFR”:  For any calendar month, SOFR, with the conventions for this rate (which will  include a lookback) being established by Administrative Agent in accordance with the conventions for  this rate selected or recommended by the Relevant Governmental Body for determining “1-Month Term  SOFR” for business loans; provided, that if Administrative Agent decides that any such convention is not  administratively feasible, then Administrative Agent may establish another convention in its reasonable  discretion.   “Acceptable Title Insurance Company”: A nationally recognized title insurance company that is  acceptable to the Agencies and has not been disapproved by Administrative Agent, on behalf of Buyers,  in a writing provided to Seller.  “Accepted Servicing Practices”: With respect to any Purchased Mortgage Loan, those mortgage  servicing practices of prudent mortgage lending institutions which service mortgage loans of the same  type as such Purchased Mortgage Loan in the jurisdiction where the related Mortgaged Property is  located.  “Account Bank”: (i) Flagstar Bank, FSB or (ii) such other entity maintaining the Collateral Account that  has been approved by Administrative Agent, on behalf of Buyers, in writing.  “Account Control Agreement”: If required hereunder, an agreement among Seller, Administrative  Agent and an account bank, to perfect Administrative Agent’s security interest in the Collateral Account,  in form and substance acceptable to Administrative Agent in its sole discretion, as the same may be  amended from time to time.  “Additional Draw Amounts”: With respect to any Limited Interest Loan and Revolving Rebuild BPL  Loan, the additional principal amount advanced to the related Mortgagor by the Seller from time to time  pursuant to the terms of the related Mortgage Note.  “Adjusted Tangible Net Worth”:  The excess of the Seller’s Total Assets over Total Liabilities, except  that the following assets shall be excluded from the Seller’s Total Assets: (i) advances or loans to  shareholders (or other equity owners, e.g., in the case of a limited liability company, any member of such  company or any beneficial owner of one or more of the economic attributes of an interest in such  company), directors, officers, employees, or affiliates of the Seller; (ii) investments in Affiliates; (iii)  assets pledged to secure any liabilities not included in the debt of the Seller; (iv) any real estate, except for  the fair value of commercial real estate of which the Seller is the principal occupant and from which the  Seller engages in the residential mortgage lending business; (v) any cash or marketable securities pledged  to third parties, including any such assets held in (or available, directly or indirectly, as collateral to  secure obligations with respect to) a margin account; (vi) any securities or other assets for which  Administrative Agent determines, in its discretion, that there is not a ready market; (vii) any repurchased  loan, promissory note, or the like carried on the Seller’s balance sheet in excess of its fair value; (ix) those  assets that Administrative Agent determines would be deemed by HUD to be unacceptable in calculating  adjusted tangible net worth or other relevant measure in accordance with HUD’s requirements in effect as  of the date of determination; (x) any intangible assets; and (xi) any other asset that Administrative Agent,  in its discretion, deems unacceptable.  “Affected Financial Institution”: Either (a) any EEA Financial Institution or (b) any UK Financial  Institution.   

 

   Exhibit A-2    “Affiliate”: With reference to any Person:  (a) any other Person that directly or indirectly through one or more intermediaries  controls, is controlled by or is under common control with the specified Person,  (b) any other Person that is an officer, stockholder, member, or trustee of, or partner  in, or serves in a similar capacity with respect to, the specified Person or of which the specified Person is  an officer, shareholder, member, partner or trustee, or with respect to which the specified Person serves in  a similar capacity,  (c) any other Person that, directly or indirectly, is the beneficial owner of [***] or  more of any class of equity securities of, or otherwise has a beneficial interest equivalent to [***] or more  ownership interest in, the specified Person,  (d) a Person of which the specified Person is directly or indirectly the owner of [***]  or more of any class of equity securities or in which the specified Person has a beneficial interest  equivalent to [***] or more ownership interest, and  (e) for purposes of Sections 8.1(l), 9.10, 11.1(v), 11.1(w) and 11.1(x) (as it relates to  any Plan), “Affiliate” instead means, within the meaning of Section 414(b), (c), (m) or (o) of the Code, (i)  any member of a controlled group that includes Seller or Guarantor, (ii) any trade or business, whether or  not incorporated, under common control with Seller or Guarantor, and (iii) any member of an affiliated  service group that includes the Seller.  “Aggregate Outstanding Purchase Price”: The aggregate outstanding Purchase Price of all  Transactions or specified Purchased Assets, as the case may be, as of any date of determination.  For  purposes of clarity, with respect to any Wet Mortgage Loan that is table funded utilizing the Purchase  Price, the Aggregate Outstanding Purchase Price shall include any Purchase Price funded irrespective of  whether a Wet Mortgage Loan subject to the related Transaction actually closed until such Purchase Price  is returned pursuant to this Agreement.  “Aggregate Transaction Limit”: The maximum aggregate principal amount of Transactions (measured  by the related outstanding Purchase Price) that may be outstanding at any one time, as set forth in the  Transactions Terms Letter.  “Aging Event”: With respect to any Purchased Asset and any date of determination, such Purchased  Asset has been subject to one or more Transactions for a period greater than [***].  “Aging Event Asset”: If applicable per the Transactions Terms Letter, as of any date of determination, a  Purchased Asset that is not a Defective Asset and was not repurchased prior to the occurrence of an Aging  Event with respect to such Purchased Asset.  “Aging Fee”: The aging fee set forth in the Transactions Terms Letter. The Aging Fee shall be non- refundable.  “Allocation Percentage”: With respect to any Buyer, the percentage of the Aggregate Transaction Limit  specified opposite such Buyer’s name in the column entitled “Allocation Percentage” on Schedule 3, as  adjusted from time to time in accordance with the terms hereof.  

 

   Exhibit A-3    “Allocation Transaction”: A Transaction Request submitted to Administrative Agent by Seller the  related Purchase Price of which is funded by Administrative Agent in accordance with Section 3.4(e)  hereof in an amount not to exceed the Aggregate Transaction Limit.  “ALTA”: The American Land Title Association or any successor in interest thereto.  “AMERIBOR”:  For each Reset Date, the AMERIBOR® Term-30 benchmark interest rate as provided  by the American Financial Exchange, LLC as administrator of such benchmark to, and published by,  Bloomberg Finance, LP, or any successor administrator and/or publisher for such benchmark reasonably  determined by Administrative Agent from time to time, at approximately 8:00 a.m., ET, two (2) Business  Days prior to such Reset Date.  “Anti-Money Laundering Laws”: As defined in Section 8.1(v) of this Agreement.  “Applicable Laws”: All applicable (1) federal, state or local statutes, laws, ordinances, rules and  regulations, including, without limitation, usury, truth-in-lending, real estate settlement procedures,  consumer credit protection, equal credit opportunity, predatory and abusive lending laws, disclosure or  unfair and deceptive practice laws,  (2) requirements and guidance of any Governmental Authority, and  (3) judicial and administrative judgments, orders, stipulations, awards, writs, and injunctions, as such may  be amended, modified or supplemented from time to time.  “Applicable Pricing Rate”:  Subject to Section 4.7, with respect to any date of determination, the greater  of (a) the Benchmark and (b) the Floor.  Notwithstanding the foregoing, under no circumstance shall the  Applicable Pricing Rate be less than zero. Each determination by Administrative Agent of the Applicable  Pricing Rate under this Agreement shall be conclusive and binding upon Seller in all respects absent  manifest error and may be computed using any reasonable averaging and attribution method.  “Approved Investor”: With respect to any Mortgage Loan, Governmental Authority, Affiliate of Seller  or Guarantor, or any other private institution, in each case, as approved by Administrative Agent, on  behalf of Buyers, in its reasonable discretion, purchasing such Purchased Mortgage Loans.   “Appraisal”:  A written appraisal made for the originator of the Mortgage Loan at the time of origination  of the Mortgage Loan by a Qualified Appraiser, which (i) complies with the requirements of FIRREA, (ii)  provides an accurate estimate of the bona fide market value of the related Mortgaged Property at the time  of origination, (iii) complies in all respects with all applicable appraiser independence requirements,  restrictions and, and (iv) was delivered prior to the final approval of the Mortgage Loan.  “Asset”: A Mortgage Loan.  “Asset Value”: With respect to each Purchased Asset and any date of determination, an amount equal to  the following, as applicable, as the same may be reduced in accordance with Section 4.3, and, in the case  of each Purchased Mortgage Loan, as shall include the related Servicing Rights:  (a) if the Purchased Asset is not a Defective Asset, the product of the related Type Purchase  Price Percentage and the least of: (i) the Market Value of such Purchased Asset; (ii) the  unpaid principal balance of such Purchased Asset; and (iii) the purchase price paid by  Seller for such Purchased Asset in an arms-length transaction with a Person that is not an  Affiliate of Seller if it is a Mortgage Loan; or  (b) if the Purchased Asset is a Defective Asset, zero.  

 

   Exhibit A-4    “Assignment”: A duly executed assignment to Administrative Agent, on behalf of Buyers, in recordable  form of a Purchased Mortgage Loan, of the indebtedness secured thereby and of all documents and rights  related to such Purchased Mortgage Loan.  “Assignment of Mortgage”:  An assignment of the Mortgage, notice of transfer or equivalent instrument  in recordable form sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is  located to reflect the transfer of the Mortgage to the party indicated therein.   “Bail-In Action”: The exercise of any Write-Down and Conversion Powers by the applicable Resolution  Authority in respect of any liability of an Affected Financial Institution.   “Bail-In Legislation”: With respect to any EEA Member Country implementing Article 55 of Directive  2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law  for such EEA Member Country from time to time which is described in the EU Bail-In Legislation  Schedule.  “Bailee Agreement”: A bailee agreement or bailee letter that is in form of Exhibit D hereto, as may be  modified by Administrative Agent from time to time in its sole discretion.  “Bank Data”: Any data or information (including personal data, text, sound, software, and/or image  files) and associated records, in any form or medium, (i) of Administrative Agent, Buyer or any of their  respective Affiliates or any of their respective suppliers, customers, or other business partners that is  transmitted, uploaded, or otherwise provided to, or obtained by, Seller in the performance of Seller’s  obligations under, or in connection with the negotiation and execution of, this Agreement, (ii) that is  created, generated, collected, processed, maintained, stored, archived, or received using or in connection  with this Agreement, (iii) that is entered into, processed by, or stored on or in, or is accessed through  software, equipment, or systems provided, operated, supported, or used by Seller in connection with this  Agreement, (iv) that is derived or compiled from data and information described in clauses (i) – (iii)  above (including metadata and correlations, trends, patterns, algorithms, and findings directly or  indirectly derived or compiled by or on behalf of any supplier from such data and information), whether  by using such data or information exclusively or in combination with other data or information, and/or (v)  summaries and analyses of or involving data and information described in clauses (i) – (iv) above.  “Bankruptcy Code”: Title 11 of the United States Code, now or hereafter in effect, as amended, or any  successor thereto.  “Benchmark”:  Initially, 1-Month Term SOFR; provided that if a Benchmark Transition Event and its  related Benchmark Replacement Date have occurred with respect to 1-Month Term SOFR or the then- current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that  such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 4.7(a).  “Benchmark Replacement”:  With respect to any Benchmark Transition Event, the first alternative set  forth in the order below that can be determined by Administrative Agent for the applicable Benchmark  Replacement Date (provided that, in its sole discretion, Administrative Agent may elect alternative (4)  instead of alternative (3)):  (1) the sum of: (a) any SOFR -based rate as determined by Administrative Agent in its sole  discretion and (b) the related Benchmark Replacement Adjustment;  (2) the sum of:  (a) AMERIBOR and (b) the related Benchmark Replacement Adjustment;  

 

   Exhibit A-5    (3) the sum of: (a) BSBY1M and (b) the related Benchmark Replacement Adjustment;  (4) the sum of: (a) the alternate benchmark rate that has been selected by Administrative  Agent as the replacement for the then-current Benchmark giving due consideration to  (i) any selection or recommendation of a replacement benchmark rate or the mechanism  for determining such a rate by the Relevant Governmental Body or (ii) any evolving or  then-prevailing market convention for determining a benchmark rate as a replacement for  the then-current Benchmark for U.S. dollar-denominated syndicated or bilateral credit  facilities at such time and (b) the related Benchmark Replacement Adjustment.  If the Benchmark Replacement as determined pursuant to clause (1), (2), (3) or (4) above would be less  than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this  Agreement and the other Principal Agreements.  “Benchmark Replacement Adjustment”: With respect to any replacement of the then-current  Benchmark with an Unadjusted Benchmark Replacement for any setting of such Unadjusted Benchmark  Replacement the spread adjustment, or method for calculating or determining such spread adjustment,  (which may be a positive or negative value or zero) will be determined by Administrative Agent for the  applicable benchmark and be based upon, at Administrative Agent’s sole discretion, either (x) any  evolving or then-prevailing market convention for the selection or recommendation of a spread  adjustment, or method for calculating or determining such spread adjustment, for the replacement of such  Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated  syndicated or bilateral credit facilities; or (y) the historical median difference between such Benchmark  and the applicable Unadjusted Benchmark Replacement over the five (5) year period immediately prior to  the applicable Benchmark Transition Event.  If fewer than five (5) years of relevant data is available for  use in calculating such spread adjustment, Administrative Agent will use the longest span of relevant data  available.  For the avoidance of doubt, Administrative Agent in its sole discretion may determine that no  spread adjustment shall be used for purposes of clauses (1) and (2) of the definition of “Benchmark  Replacement.” Determination of such spread adjustment by Administrative Agent shall be presumptively  correct absent manifest error and may be computed using any reasonable averaging and attribution  method as determined by Administrative Agent.  “Benchmark Replacement Date”:  The earliest to occur of the following events with respect to the then- current Benchmark:  (1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the  later of (a) the date of the public statement or publication of information referenced  therein and (b) the date on which the administrator of such Benchmark (or the published  component used in the calculation thereof) permanently or indefinitely ceases to provide  such Benchmark (or such component thereof); or  (2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date as of  which such Benchmark has been deemed by the regulatory supervisor for the  administrator of such Benchmark to be no longer representative pursuant to the public  statement or publication of information referenced therein.  For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the  same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark  Replacement Date will be deemed to have occurred prior to the Reference Time for such determination  and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or  

 

   Exhibit A-6    (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein  with respect to such Benchmark (or the published component used in the calculation thereof).  “Benchmark Transition Event”:  The occurrence of one or more of the following events with respect to  the then-current Benchmark:  (1) a public statement or publication of information by or on behalf of the administrator of  such Benchmark (or the published component used in the calculation thereof) announcing  that such administrator has ceased or will cease to provide such Benchmark (or such  component thereof), permanently or indefinitely, provided that, at the time of such  statement or publication, there is no successor administrator that will continue to provide  such Benchmark (or such component thereof);  (2) a public statement or publication of information by the regulatory supervisor for the  administrator of such Benchmark (or the published component used in the calculation  thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve  Bank of New York, an insolvency official with jurisdiction over the administrator for  such Benchmark (or such component), a resolution authority with jurisdiction over the  administrator for such Benchmark (or such component) or a court or an entity with  similar insolvency or resolution authority over the administrator for such Benchmark (or  such component), which states that the administrator of such Benchmark (or such  component) has ceased or will cease to provide such Benchmark (or such component  thereof) permanently or indefinitely, provided that, at the time of such statement or  publication, there is no successor administrator that will continue to provide such  Benchmark (or such component thereof); or  (3) a public statement or publication of information by the Federal Reserve Board, the  NYRB or the regulatory supervisor for the administrator of such Benchmark (or the  published component used in the calculation thereof) announcing that such Benchmark  (or such component thereof) is no longer representative.  For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with  respect to any Benchmark if a public statement or publication of information set forth above has occurred  with respect to such Benchmark (or the published component used in the calculation thereof).  “Benchmark Unavailability Period”:  The period (if any) (x) beginning at the time that a Benchmark  Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no  Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under  any Principal Agreement in accordance with Section 4.7 and (y) ending at the time that a Benchmark  Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Principal  Agreement in accordance with Section 4.7.  “BPO”: With respect to any Mortgaged Loan, a broker’s price opinion (or similar third party valuation  opinion) of the “as is” fair market value or after repair value of the related Mortgaged Property given by a  licensed real estate agent or broker that is not an Affiliate of the Seller and is acceptable to Buyer and  obtained by or on behalf of Seller in conformity with customary and usual and business practices, which  generally includes three (3) comparable sales and three (3) comparable listings.  “BSBY1M”:  For each Reset Date, the 1-month tenor Bloomberg Short-Term Bank Yield Index (ticker  BSBY1M) benchmark interest rate provided by Bloomberg Index Services Limited as administrator of  such benchmark, or any successor administrator for such benchmark reasonably determined by  

 

   Exhibit A-7    Administrative Agent from time to time, at approximately 8:00 a.m., ET, two (2) Business Days prior to  such Reset Date.  “Business Day”: Any day on which the head office of Administrative Agent or any Buyer is open for  transactions of all of its normal and customary business.  “Business Purpose Loan”: A Mortgage Loan that is an extension of credit primarily for a “business  purpose”, as defined by 12 CFR 1026.3(a)(1) of Regulation Z.  “Buyer Parties”:  As defined in Section 11.10 of this Agreement.  “Cash Equivalents”: Any (a) securities with maturities of [***] or less from the date of acquisition  issued or fully guaranteed or insured by the United States Government or any agency thereof, (b)  certificates of deposit and eurodollar time deposits with maturities of [***] or less from the date of  acquisition and overnight bank deposits of any commercial bank having capital, surplus and retained  earnings in excess of $[***], (c) repurchase obligations of any commercial bank satisfying the  requirements of clause (b) of this definition, having a term of not more than [***] with respect to  securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of  a domestic issuer rated at least “A-1” or the equivalent thereof by S&P or “p-1” or the equivalent thereof  by Moody’s and in either case maturing within [***] after the day of acquisition, (e) securities with  maturities of [***] or less from the date of acquisition issued or fully guaranteed by any state,  commonwealth or territory of the United States, by any political subdivision or taxing authority of any  such state, commonwealth or territory or by any foreign government, the securities of which state,  commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may  be) are rated at least “A” by S&P or “A” by Moody’s, (f) securities with maturities of [***] or less from  the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the  requirements of clause (b) of this definition, or (g) shares of money market, mutual or similar funds which  invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.  “Cease Funding Event”:  Any of the following:  (a) the aggregate original Asset Value of those Purchased Assets that are deemed to be  Defective Assets is greater than or equal to [***] of the outstanding Transactions for more  than [***] or longer in Administrative Agent’s discretion; or  (b) a breach of any servicing obligations of any Servicer, including, but not limited to, its  failure to deposit any funds required to be deposited under Section 6.2(i) into the  Collateral Account.  “Change of Control”:  With respect to Seller, Guarantor or any Servicer, Change of Control shall mean  any of the following:  (a) if such Person is a corporation, any “person” (as such term is used in Sections 13(d) and  14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other  than a trustee or other fiduciary holding securities of such Person under an employee  benefit plan of such Person, becomes the “beneficial owner” (as defined in Rule 13d-3  promulgated under the Exchange Act), directly or indirectly, of securities of Person  representing 50% or more of (i) the outstanding shares of common stock of such Person  or (ii) the combined voting power of such Person’s then-outstanding securities;  

 

   Exhibit A-8    (b) if such Person is a legal entity other than a corporation, the majority voting control of  such Person, or its equivalent, under such Person’s governing documents is transferred to  any Person;  (c) such Person is party to a merger or consolidation, or series of related transactions, which  results in the voting securities or majority voting control interest of such Person  outstanding immediately prior thereto failing to continue to represent (either by  remaining outstanding or by being converted into voting securities or a majority voting  controlling interest of the surviving or another entity) at least fifty percent (50%) of the  combined voting power of the voting securities or majority voting control interest of such  Person or such surviving or other entity outstanding immediately after such merger or  consolidation;  (d) the sale, transfer or other disposition of all or substantially all of such Person’s assets;  (e) any transaction or event as a result of which Guarantor ceases to directly or indirectly  own, beneficially or of record 100% of the capital stock of Seller;   (f) the dissolution or liquidation of such Person;   (g) if at any time [***] fails to be actively involved in the day-to-day business and affairs of  Seller or Guarantor, and such failure shall continue for [***] without the appointment of a  successor reasonably satisfactory to Administrative Agent; or  (h) any transaction or series of related transactions that has the substantial effect of any one  or more of the foregoing.  “COBRA”: As defined in Section 8.1(l) of this Agreement.  “Code”: The Internal Revenue Code of 1986, as amended.  “Collateral Account”: The account described in Section 6.2(i) of this Agreement.  “Collateral Account Minimum Balance”: $[***]  “Collection Period”: (a) Initially, the period commencing on the Effective Date up to but not including  the first day of the following calendar month, and (b) thereafter, the period commencing on the first day  of each calendar month up to but not including the first day of the following calendar month.  “Commitment Fee”: The commitment fee set forth in the Transactions Terms Letter.  “Conforming Changes”: With respect to either the use or administration of 1-Month Term SOFR or the  use, administration, adoption or implementation of any Benchmark Replacement, any technical,  administrative or operational changes (including changes to the definition of “Business Day”, the  definition of “U.S. Government Securities Business Day,” the definition of “Collection Period,” timing  and frequency of determining rates and making payments of interest, timing of borrowing requests or  prepayment, conversion or continuation notices, the applicability and length of lookback periods, the  applicability of breakage provisions, and other technical, administrative or operational matters) that  Administrative Agent decides may be appropriate to reflect the adoption and implementation of such rate  or to permit the use and administration thereof by Administrative Agent in a manner substantially  consistent with market practice (or, if Administrative Agent decides that adoption of any portion of such  

 

   Exhibit A-9    market practice is not administratively feasible or if Administrative Agent determines that no market  practice for the administration of such Benchmark Replacement exists, in such other manner of  administration as Administrative Agent decides is reasonably necessary in connection with the  administration of this Agreement and the other Principal Agreements).  “Connection Income Taxes”: Taxes that are imposed as a result of a present or former connection (other  than any connection arising from executing, delivering, being party to, engaging in any transaction  pursuant to, performing its obligations under or enforcing this Agreement, being the legal owner of the  Purchased Assets or selling or assigning an interest in this Agreement) to the jurisdiction imposing such  Tax (or any political subdivision thereof) and that are imposed on or measured by net income (however  denominated) or that are franchise Taxes or branch profits Taxes.  “Contingent Obligations”: Any obligation of a Person arising from an existing condition or situation  that involves uncertainty as to outcome and that will be resolved by the occurrence or nonoccurrence of  some future event, including, without limitation, any obligation guaranteeing or intended to guarantee any  Debt, leases, dividends or other obligations of any other Person in any manner, whether directly or  indirectly; provided, however, that endorsements of instruments for deposit or collection in the ordinary  course of business shall not be included.  With respect to guarantees, the amount of the Contingent  Obligation shall be equal to the stated or determinable amount of the primary obligation in respect of the  guarantee or, if not stated or determinable, the maximum reasonably anticipated liability in respect  thereof, as determined by Administrative Agent, on behalf of Buyers.  “Credit Score”: With respect to any Mortgage Loan, the credit score of the related primary Mortgagor or  guarantor thereof provided by an organization acceptable to the Purchaser at the time of origination of  such Mortgage Loan. If two (2) credit bureau scores are obtained, the Credit Score will be the lower  score. If three (3) credit bureau scores are obtained, the Credit Score will be the middle of the three (3).  For the avoidance of doubt, there is only one (1) Credit Score for each Mortgagor and for each guarantor  thereof.  “Custodial Agreement”: Any custodial agreement executed among Administrative Agent, Seller and  Custodian with respect to this Agreement, as the same shall be modified and supplemented and in effect  from time to time.  “Custodian”: Flagstar Bank FSB, any of its successors or permitted assigns, or any such other party  approved by Administrative Agent.  “Customer Information”: As defined in Section 15.17 of this Agreement.  “Debt”: The debt of a Person consisting of, without duplication: (a) indebtedness for borrowed money,  including principal, interest, fees and other charges; (b) obligations evidenced by bonds, debentures, notes  or other similar instruments; (c) obligations to pay the deferred purchase price of property or services,  other than (i) deferred purchase price that is contingent upon performance and (ii) trade accounts payable  (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of  business, so long as such trade accounts payable are payable within [***] after the date the respective  goods are delivered or the respective services are rendered; (d) obligations as lessee under leases that shall  have been or should be in accordance with GAAP, recorded as capital leases; (e) obligations secured by  any lien upon property or assets owned by such Person, even though such Person has not assumed or  become liable for payment of such obligations; (f) obligations in connection with any letter of credit  issued for the account of such Person; and (g) obligations under direct or indirect guarantees in respect of  obligations, contingent or otherwise, to purchase or otherwise acquire, or otherwise assure a creditor  against loss in respect of, indebtedness or obligations of others of the kinds referred to above.   

 

   Exhibit A-10    “Default Rate”: The lesser of (a) the Applicable Pricing Rate plus [***], or (b) the maximum  non-usurious interest rate, if any, that at any time, or from time to time, may be contracted for, taken,  reserved, charged or received under the laws of the United States and the State of New York, per annum.  “Defaulting Buyer”: Subject to Section 15.17, any Buyer that (a) has failed to (i) fund all or any of its  portion of any Purchase Price within [***] of the date such Purchase Price was required to be funded  hereunder or (ii) pay to Administrative Agent or any other Buyer any other amount required to be paid by  it hereunder within [***] of the date when due, (b) has notified the Seller or Administrative Agent in  writing that it does not intend to comply with its purchase obligations hereunder, or has made a public  statement to that effect, (c) has failed, within [***] after written request by Administrative Agent or Seller,  to confirm in writing to Administrative Agent and Seller that it will comply with its prospective purchase  obligations hereunder (provided that such Buyer shall cease to be a Defaulting Buyer pursuant to this  clause (c) upon receipt of such written confirmation by Administrative Agent and Seller), or (d) has, or  has a direct or indirect parent company that has, (i) become the subject of a proceeding under any  insolvency law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee  for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or  assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory  authority acting in such a capacity, or (iii) become the subject of a Bail-In Action; provided that a Buyer  shall not be a Defaulting Buyer solely by virtue of the ownership or acquisition of any capital stock in that  Buyer or any direct or indirect parent company thereof by a Governmental Authority so long as such  ownership interest does not result in or provide such Buyer with immunity from the jurisdiction of courts  within the United States or from the enforcement of judgments or writs of attachment on its assets or  permit such Buyer (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any  contracts or agreements made with such Buyer. Any determination by Administrative Agent that a Buyer  is a Defaulting Buyer under any one or more of clauses (a) through (d) above, and of the effective date of  such status, shall be conclusive and binding absent manifest error, and such Buyer shall be deemed to be a  Defaulting Buyer (subject to Section 15.17) as of the date established therefor by Administrative Agent in  a written notice of such determination, which shall be delivered by Administrative Agent to the Seller and  each other Buyer promptly following such determination.  “Defaulting Buyer Deficiency”: The amount which a Defaulting Buyer has failed to pay pursuant to the  terms hereof and which has caused such Buyer to become a Defaulting Buyer.  “Defective Asset”: A Purchased Asset:  (a) that is not or at any time ceases to be an Eligible Asset;   (b) that is a Mortgage Loan and is the subject of fraud by any Person (including any  originator of such Mortgage Loan) involved in the origination of such Mortgage Loan;  (c) that is a Mortgage Loan and the related Mortgaged Property is the subject of material  damage or waste;  (d) for which any breach of a warranty or representation set forth in Section 8.2 occurs;   (e) that is a Mortgage Loan where the related Mortgagor fails to make the first payment due  under the Mortgage Note on or before the applicable due date, including any applicable  grace period;   (f) that was rejected by the Approved Investor;  

 

   Exhibit A-11    (g) that is a Purchased Mortgage Loan and it is determined to be ineligible for sale as a  Purchased Mortgage Loan of the Type originally stipulated; or  (h) for which the aggregate unpaid principal balance with respect to such Purchased Asset  causes the Purchased Assets to exceed any Type Sublimit.  “Delinquent Mortgage Loan”: Any mortgage loan with respect to which the related Mortgagor is  greater than [***] delinquent following the first date of delinquency under the MBA method of  delinquency.  “Draw Fee”: With respect to each Purchased Asset, the draw fee set forth in the Transactions Terms  Letter payable by Seller on or prior the Purchase Date related to such Purchased Asset. Each Draw Fee  shall be non-refundable.  “Dry Mortgage Loan”: A Mortgage Loan for which Administrative Agent, on behalf of Buyers, or its  Custodian has possession of the related Mortgage Loan Documents, in a form and condition acceptable to  Administrative Agent, on behalf of Buyers, (which for the avoidance of doubt could be a Wet Mortgage  Loan on the related Purchase Date and convert to a Dry Mortgage Loan once all Mortgage Loan  Documents have been received by Administrative Agent, on behalf of Buyers, or its Custodian).   “EEA Financial Institution”: Any (a) credit institution or investment firm established in any EEA  Member Country which is subject to the supervision of an EEA Resolution Authority, (b) entity  established in an EEA Member Country which is a parent of an institution described in clause (a) of this  definition, or (c) financial institution established in an EEA Member Country which is a subsidiary of an  institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with  its parent.  “EEA Member Country”: Any of the member states of the European Union, Iceland, Liechtenstein, and  Norway.  “EEA Resolution Authority”: Any public administrative authority or any person entrusted with public  administrative authority of any EEA Member Country (including any delegee) having responsibility for  the resolution of any EEA Financial Institution.  “Effective Date”: That effective date set forth in the Transactions Terms Letter.  “Electronic Transmission” The delivery of information in an electronic format, including electronic mail  or other agreed upon electronic transmission medium (including web-secure file transfer), that is  acceptable to the applicable recipient thereof.  “Eligible Asset”: With respect to any Transaction, from and after the related Purchase Date, an Eligible  Mortgage Loan.    “Eligible Mortgage Loan”: A Mortgage Loan that meets the eligibility criteria set forth in the  Transactions Terms Letter.    “Equity Interests”: Any and all shares, interests, participations or other equivalents (however  designated) of capital stock of a corporation, any and all equivalent ownership (or profit) interests in a  Person (other than a corporation), securities convertible into or exchangeable for shares of capital stock of  (or other ownership or profit interest in) such Person, and any and all warrants, rights or options to  

 

   Exhibit A-12    purchase any of the foregoing, whether voting or nonvoting, and whether or not such shares, warrants,  options, rights or other interests are authorized or otherwise existing on any date of determination.  “ERISA”: The Employee Retirement Income Security Act of 1974, as amended from time to time and  any successor statute.  “ERISA Affiliate”: Any person (as defined in Section 3(9) of ERISA) that together with Seller,  Guarantor or any of Seller’s or Guarantor’s Subsidiaries would be a member of the same “controlled  group” or treated as a single employer within the meaning of Section 414 of the Code or ERISA  Section 4001.  “Erroneous Payment”:  As defined in Section 15.17(a).  “Erroneous Payment Deficiency Assignment”: As defined in Section 15.17(d).  “Erroneous Payment Impacted Transaction”: As defined in Section 15.17(d).  “Erroneous Payment Return Deficiency”: As defined in Section 15.17(d).  “Erroneous Payment Subrogation Rights”: As defined in Section 15.17(d).  “EU Bail-In Legislation Schedule”: The EU Bail-In Legislation Schedule published by the Loan Market  Association (or any successor person), as in effect from time to time.  “E-SIGN”: The Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.    “Event of Default”: Any of the conditions or events set forth in Section 11.1 of this Agreement.  “Event of Early Termination”: Any of the conditions or events set forth in Section 11.2 of this  Agreement.  “Exception” With respect to any Mortgage Loan, any of the following: (i) any variance from the  requirements of Section 13.1 hereof with respect to the Mortgage Loans Files (giving effect to the Seller’s  right to deliver certified copies in lieu of original documents in certain circumstances) or (ii) any  Mortgage Loan with respect to which the Custodian receives written notice or has actual knowledge of a  lien on, or security interest in favor of a Person other than the Administrative Agent with respect to, such  Mortgage Loan.  “Excluded Taxes”: Any of the following Taxes imposed on or with respect to Administrative Agent or  any Buyer or required to be withheld or deducted from a payment to Administrative Agent or any Buyer,  (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch  profits Taxes, in each case, imposed as a result of Administrative Agent or any Buyer being organized  under the laws of, having its principal office or applicable lending office located in, or having another  present or former connection (other than any connection arising from executing, delivering, being party  to, engaging in any transaction pursuant to, performing its obligations under or enforcing this Agreement,  being the legal owner of the Purchased Assets or selling or assigning an interest in this Agreement) to, the  jurisdiction imposing such Tax (or any political subdivision thereof), (b) U.S. federal withholding Taxes  imposed on amounts payable to or for the account of Administrative Agent or any Buyer under this  Agreement pursuant to a law in effect on the date on which (i) Administrative Agent or such Buyer  becomes a party hereto or (ii) Administrative Agent or such Buyer (other than at the request of Seller)  changes its lending office, except, in each case, to the extent that, pursuant to Section 12.3, amounts with  

 

   Exhibit A-13    respect to such Taxes were payable either to Administrative Agent’s or such Buyer’s assignor, as  applicable, immediately before Administrative Agent or such Buyer became a party hereto or to  Administrative Agent or such Buyer immediately before it changed its lending office, (c) Taxes  attributable to Administrative Agent’s or any Buyer’s failure to comply with Sections 12.3(c), (d) and (f)  and (d) any U.S. federal withholding Taxes imposed under FATCA.  “Executive Order”: As defined in Section 8.1(z) of this Agreement.  “Expiration Date”: As set forth in the Transactions Terms Letter.  “Facility Termination Date”: The earliest of (a) the Expiration Date set forth in the Transactions Terms  Letter, or (b) the date on which this Agreement shall terminate in accordance with the provisions hereof  or by operation of law.  “FATCA”: (a) 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 associated regulations; (b) any treaty, law or regulation of any other jurisdiction, or  relating to an intergovernmental agreement between the United States and any other jurisdiction, which  (in either case) implements any law or regulation referred to in clause (a) above; and (c) any agreement  pursuant to the implementation of any treaty, law or regulation referred to in clause (a) or (b) above with  any Governmental Authority in any jurisdiction.  “Federal Funds Effective Rate”: For any day, a fluctuating interest rate per annum equal to the  weighted average of the rates on overnight federal funds transactions with members of the Federal  Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a  Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if  such rate is not so published for any day which is a Business Day, the average of the quotations for such  day on such transactions received by Administrative Agent from three federal funds brokers of recognized  standing selected by Administrative Agent, all as conclusively determined by Administrative Agent, such  sum to be rounded upward, if necessary, in the discretion of Administrative Agent, to the nearest whole  multiple of [***].  “Federal Reserve Bank of New York’s Website”: The website of the Federal Reserve Bank of New  York at http://www.newyorkfed.org, or any successor source.  “Federal Reserve Board”:  The Board of Governors of the Federal Reserve System of the United States.  “FEMA”: The Federal Emergency Management Agency.  “FICO Score”: The credit score of the Mortgagor provided by Fair, Isaac & Company, Inc. or such other  organization providing credit scores on the origination date of a Mortgage Loan; provided, that if (a) two  separate credit scores are obtained on such origination date, the FICO Score shall be the lower credit  score; and (b) three separate credit scores are obtained on such origination date, the FICO Score shall be  the middle credit score.  “FIRREA”: The Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended  from time to time.  “Floor”: As defined in the Transactions Terms Letter.  “Foreign Buyer”: As defined in Section 12.3(d) of this Agreement.  

 

   Exhibit A-14    “Funding Account”: A non-interest bearing deposit account with Administrative Agent which shall be  titled as designated by Administrative Agent.   “GAAP”: Generally accepted accounting principles set forth in the opinions and pronouncements of the  Accounting Principles Board of the American Institute of Certified Public Accountants and the statements  and pronouncements of the Financial Accounting Standards Board or in such other statements by such  other entity as may be approved by a significant segment of the accounting profession and that are  applicable to the circumstances as of the date of determination.  “Governmental Authority”: With respect to any Person, any nation or government, any state or other  political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative,  judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator  having jurisdiction over such Person, any of its Subsidiaries or any of its properties.  “Guarantor”: Altisource Asset Management Corporation.    “Guaranty Agreement”: That certain Guaranty Agreement, dated as of the date hereof, by the Guarantor  in favor of Flagstar Bank FSB, as administrative agent, as amended, restated, supplemented or otherwise  modified from time to time.      “HUD”: The United States Department of Housing and Urban Development or any successor thereto.    “Income”: With respect to any Purchased Asset, all of the following (in each case with respect to the  entire par amount of the Purchased Mortgage Loan represented by such Purchased Asset and not just with  respect to the portion of the par amount represented by the Purchase Price paid against such Purchased  Mortgage Loan):  (a) all payments and prepayments of principal received and applied as principal in  connection with any Transaction for such Purchased Mortgage Loan, including insurance and  condemnation proceeds and recoveries from liquidation or foreclosure, (b) all payments of interest,  income, receipts, dividends, and any other collections and distributions received from time to time in  connection with any such Purchased Mortgage Loan, (c) all other income, distributions, receipts,  payments, collections, prepayments, recoveries, proceeds (including insurance and condemnation  proceeds) and other payments or amounts of any kind paid, received, collected, recovered or distributed  on, in connection with or in respect of such Purchased Mortgage Loan, including prepayment fees,  extension fees, exit fees, any rental payments, if any, transfer fees, make whole fees, late charges, late  fees and all other fees or charges of any kind or nature, premiums, yield maintenance charges, penalties,  default interest, dividends, gains, receipts, allocations, rents, interests, profits, payments in kind, returns  or repayment of contributions, net sale, foreclosure, liquidation, securitization or other disposition  proceeds, insurance payments, settlements and proceeds, (d) all Mortgage Loan Sale Proceeds, (e) all  payments received from hedge counterparties pursuant to interest rate protection agreements related to  such Purchased Mortgage Loan; and (f) all other “proceeds” as defined in Section 9-102(64) of the UCC,  including all collections or distributions thereon or other income or receipts therefrom or in respect  thereof; provided, that any amounts that under the applicable Mortgage Loan Documents are required to  be deposited into and held in escrow or reserve to be used for a specific purpose, such as taxes and  insurance, shall not be included in the term “Income” unless and until (i) an event of default exists under  such Mortgage Loan Documents, (ii) the holder of the related Purchased Mortgage Loan has exercised or  is entitled to exercise rights and remedies with respect to such amounts, (iii) such amounts are no longer  required to be held for such purpose under such Mortgage Loan Documents, or (iv) such amounts may be  applied to all or a portion of the outstanding indebtedness under such Mortgage Loan Documents.    “Indemnified Party” or “Indemnified Parties”: As defined in Section 12.1 of this Agreement.  

 

   Exhibit A-15    “Indemnified Taxes”: As defined in Section 12.3(a) of this Agreement.  “Insolvency Event”: The occurrence of any of the following events:  (a) such Person shall become insolvent or generally fail to pay, or admit in writing its  inability to pay, its debts as they become due, or shall voluntarily commence any  proceeding or file any petition under any bankruptcy, insolvency or similar law, which  proceeding or petition seeks dissolution, liquidation or reorganization or the appointment  of a receiver, trustee, custodian, conservator or liquidator for itself or a substantial portion  of its property, assets or business or to effect a plan or other arrangement with its  creditors, or shall file any answer admitting the jurisdiction of the court and the material  allegations of an involuntary petition filed against it in any bankruptcy, insolvency or  similar proceeding, or shall be adjudicated bankrupt, or shall make a general assignment  for the benefit of creditors, or such Person, or a substantial part of its property, assets or  business, shall be subject to, consent to or acquiesce in the appointment of a receiver,  trustee, custodian, conservator or liquidator for itself or a substantial property, assets or  business;  (b) corporate action shall be taken by such Person for the purpose of effectuating any of the  foregoing;  (c) an order for relief shall be entered in a case under the Bankruptcy Code in which such  Person is a debtor; or  (d) involuntary proceedings or an involuntary petition shall be commenced or filed against  such Person under any bankruptcy, insolvency or similar law, which proceeding or  petition seeks dissolution, liquidation or reorganization of such Person or the appointment  of a receiver, trustee, custodian, conservator or liquidator for such Person or of a  substantial part of the property, assets or business of such Person, or any writ, order,  judgment, warrant of attachment, execution or similar process shall be issued or levied  against a substantial part of the property, assets or business of such Person.  “Investment Company Act”: As defined in Section 8.1(o) of this Agreement.  “Other Investor Report Cards”: The periodic information (whether in the form of a report or otherwise)  that each residential mortgage loan investor (other than Administrative Agent or Buyers) provides to the  Seller with respect to residential mortgage loans that the Seller has sold to such investor (or with respect  to which the investor delivers to or for the benefit of the Seller one or more commitments or agreements)  to purchase residential mortgage loans from the Seller, which information or report typically indicates the  number (and aggregate dollar amount) of loans that such investor has purchased from the Seller, as well  as the “pull through,” delinquency, and early payoff statistics applicable to the Seller’s activities with  such investor.  “Insurer”: A private mortgage insurer, which is acceptable to the Administrative Agent.  “Late Payment Fee”: The late payment fee set forth in the Transactions Terms Letter. The Late Payment  Fee shall be non-refundable.  “Lien”: Any mortgage, lien, pledge, charge, security interest or similar encumbrance.  “Limited Interest Loan”: Any Mortgage Loan that provides for Additional Draw Amounts.  

 

   Exhibit A-16    “Liquidity”: As of any date of determination, Seller’s unrestricted cash and Cash Equivalents.  By way  of example but not limitation, cash in escrow and/or impound accounts shall not be included in this  calculation.  “Losses”: As defined in Section 12.1 of this Agreement.    “LTV”: With respect to any Mortgage Loan, the ratio of the original unpaid principal balance of the  Mortgage Loan to the lesser of (i) the appraised value of the Mortgaged Property set forth in such  appraisal and (ii) the sales price of the Mortgaged Property.  “Manual”: The guidelines set forth in the correspondent training usage guidelines of Administrative  Agent  “Margin Call”: A margin call, as defined and described in Section 6.3(b) of this Agreement.  “Margin Deficit”: A margin deficit, as defined and described in Section 6.3(b) of this Agreement.  “Market Value”: With respect to an Asset, the fair market value of the Asset as determined by  Administrative Agent, on behalf of Buyers in Administrative Agent’s sole good faith discretion without  regard to any market value assigned to such Asset by Seller.  Administrative Agent’s determination of  Market Value shall be conclusive upon the parties, absent manifest error on the part of Administrative  Agent.  At no time and in no event will the Market Value of a Purchased Mortgage Loan be greater than  the Market Value of such Purchased Mortgage Loan on the initial Purchase Date, and any Mortgage Loan  that is not an Eligible Mortgage Loan shall have a Market Value of zero; provided, that solely for  purposes of Section 13(e) the Market Value shall be as determined by Administrative Agent in its sole  good faith discretion, which may be zero.    “Material Adverse Effect”: Any of the following, in each case, as such material adverse effect or  material change is determined by Administrative Agent, on behalf of Buyers, in its sole and absolute  discretion: (a) with respect to Seller or Guarantor, the occurrence of a material adverse change with  respect to the business, operations, performance,  condition (financial or otherwise) or prospects of Seller.  (b) any material adverse effect on the ability of Seller, Guarantor or any Affiliate that is a party to a  Principal Agreement to perform its obligations under any of the Principal Agreements to which it is a  party, (c) a material adverse effect on the validity or enforceability against Seller or any Affiliate that is a  party to a Principal Agreement, of any of the Principal Agreements, (d) a material adverse effect on the  rights and remedies of Administrative Agent and/or Buyers under any of the Principal Agreements or (e)  a material adverse effect on the marketability, collectability or enforceability of the Purchased Assets.  “Maximum Dwell Time”: For any Purchased Asset that is not a Defective Asset, the maximum number  of days such Purchased Asset is not repurchased by Seller before such Purchased Asset may be deemed to  be a Defective Asset, as set forth in the Transactions Terms Letter.  “Minimum Maintenance Amount”: With respect to the Purchased Assets as of the close of business on  any date of determination, the aggregate Asset Value of all Purchased Assets as of such date of  determination.    “Moody’s”: Moody’s Investors Service, Inc. or any successor thereto.  “Mortgage”: A mortgage, deed of trust, security deed or similar instrument on improved real property  (including for the avoidance of doubt any proprietary lease or cooperative shares in connection with  cooperative loans).  

 

   Exhibit A-17    “Mortgage Loan”: Any mortgage loan of a Type identified on any schedule attached to the Transactions  Terms Letter, which Mortgage Loan may be either a Dry Mortgage Loan or a Wet Mortgage Loan.  “Mortgage Loan Documents”: With respect to each Purchased Mortgage Loan, the documents set forth  on Exhibit I hereto.   “Mortgage Loan File”: With respect to each Mortgage Loan, that file that contains the Mortgage Loan  Documents and is delivered to Custodian pursuant to this Agreement or the Custodial Agreement, as  applicable.  “Mortgage Loan Sale Proceeds”: The proceeds of any sale, securitization or other disposition of any of  the Purchased Assets.  “Mortgage Loan Schedule”: For each Closing Date, the schedule of Mortgage Loans to be delivered by  the Seller to the Administrative Agent setting forth the information described in Article 13 hereto with  respect to each of the related Mortgage Loans.  “Mortgage Note”: A promissory note secured by a Mortgage and evidencing a Mortgage Loan.  “Mortgaged Property”: The real property (or other collateral relating to cooperative loans) securing  repayment of the debt evidenced by a Mortgage Note.  “Mortgagor”: The obligor of a Mortgage Loan.  “Multiemployer Plan”: A multiemployer plan within the meaning of Sections 3(37) or 4001(a)(3) of  ERISA.  “Multi-Family Mortgage Loan”: A Mortgage Loan on properties with thirty (30) or less units sold to  private investors that are not saleable to Fannie Mae, Freddie Mac or Ginnie Mae, as applicable.  “Net Income”: With respect to any period and Person, the pre-tax net income of such Person for such  period, determined in accordance with GAAP, excluding, to the extent expressly set forth in the financial  statements delivered in accordance with Section 9.1 and clauses (a) and (b) on Schedule 4 attached hereto,  any mark to market fair value adjustment on mortgage servicing rights and gains and losses associated  with hedging transactions in respect of mortgage servicing rights.  “Net Worth”: With respect to any Person, the excess of total assets of such Person, over total liabilities  of such Person, determined in accordance with GAAP.  “Non-Defaulting Buyer”: At any time, each Buyer that is not a Defaulting Buyer at such time.  “OFAC”: The U.S.  Department of Treasury’s Office of Foreign Asset Control.  “Other Mortgage Loan Documents”: In addition to the Mortgage Loan Documents, with respect to any  Mortgage Loan, and as applicable, the following: (a) the original recorded Mortgage, if not included in  the Mortgage Loan Documents; (b) a copy of the preliminary title commitment showing the policy  number or preliminary attorney’s opinion of title and the original policy of mortgagee’s title insurance or  unexpired commitment for a policy of mortgagee’s title insurance, if not included in the Mortgage Loan  Documents; (c) the survey, flood certificate, hazard insurance policy and flood insurance policy, as  applicable; (d) the original of any assumption, modification, consolidation or extension agreements, with  evidence of recording thereon or copies stamp certified by an authorized officer of Seller to have been  

 

   Exhibit A-18    sent for recording, if any; (e) copies of each instrument necessary to complete identification of any  exception set forth in the exception schedule in the title policy; (f) the loan application; (g) verification of  the Mortgagor’s employment and income, if applicable; (h) verification of the source and amount of the  down payment; (i) credit report on Mortgagor; (j) appraisal of the Mortgaged Property, or a waiver  thereof, and/or a point value estimate; (k) the original executed disclosure statement; (l) tax receipts,  insurance premium receipts, ledger sheets, payment records, insurance claim files and correspondence,  current and historical computerized data files, underwriting standards used for origination and all other  related papers and records; (m) the original of any guarantee executed in connection with the Mortgage  Note (if any); (n) the original of any security agreement, chattel mortgage or equivalent document  executed in connection with the Mortgage and (o)  all other documents relating to the Purchased  Mortgage Loan.  “Other Taxes”: As defined in Section 12.3(a) of this Agreement.  “Participant Register”: As defined in Section 15.7 of this Agreement.  “Patriot Act”: The Uniting and Strengthening America by Providing Appropriate Tools Required to  Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56 (signed into law October 26, 2001), as  amended.  “Payment Recipient”: As defined in Section 16.16.  “PBGC”: The Pension Benefit Guaranty Corporation and any successor thereto.  “Person”: Includes natural persons, corporations, limited partnerships, general partnerships, limited  liability companies, joint stock companies, joint ventures, associations, companies, trusts, banks, trust  companies, land trusts, business trusts or other organizations, whether or not legal entities, and  governments and agencies and political subdivisions thereof.  “Plan”: Any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA that is  subject to Title IV of ERISA or Section 412 of the Code (other than a Multiemployer Plan) and that is  maintained and contributed to by (or to which there is an obligation to contribute of), or at any time  during the five (5) calendar years preceding the date of this Agreement was maintained or contributed to  by (or to which there was an obligation to contribute of), Seller, Guarantor, any Subsidiary thereof or any  of their respective ERISA Affiliates.  “Potential Default”: The occurrence of any event or existence of any condition that, but for the giving of  notice, the lapse of time, or both, could, in the sole discretion of the Administrative Agent, on behalf of  Buyers, constitute an Event of Default.  “Portfolio Mortgage Loan”: A first lien Mortgage Loan that has been purchased in the secondary market  and is being held in portfolio for Seller’s benefit.  “Power of Attorney”: A power of attorney, substantially in the form attached hereto as Exhibit E.  “Price Differential”: For each Purchased Asset or Transaction as of any date of determination, an  amount equal to the product of (a) (i) prior to the occurrence of an Event of Default, the sum of the  Applicable Pricing Rate plus the applicable Type Margin, or (ii) following the occurrence and during the  continuance of an Event of Default, the Default Rate, and (b) the Purchase Price for such Purchased Asset  or Transaction.  Price Differential will be calculated in accordance with Section 2.6.  

 

   Exhibit A-19    “Price Differential Date”:  The [***] of each month (or such later date that is [***] following Seller’s  receipt of an invoice provided by Administrative Agent, on behalf of Buyers, pursuant to Section 2.6(b).  “Principal Agreements”:  This Agreement, the Transactions Terms Letter, the Custodial Agreement, if  any, any Servicing Agreement together with the related Servicer Notice, the Account Control Agreement  (if any), any Transaction Request, any intercreditor agreement and all other documents and instruments  evidencing the Transactions, as same may from time to time be supplemented, modified or amended, and  any other agreement entered into among Administrative Agent, Buyers and Seller in connection herewith  or therewith.  “Privacy Requirements”: As defined in Section 15.17 of this Agreement.  “Proceeds”: The total amount receivable or received when a Purchased Asset or other Purchased Item is  sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary,  including, without limitation, all rights to payment, including return premiums, with respect to any  insurance relating thereto and all escrow withholds and escrow payments for Property Charges, as  applicable.  “Property Charges”: All taxes, fees, assessments, water, sewer and municipal charges (general or  special) and all insurance premiums, leasehold payments or ground rents.    “Purchase Date”: The date on which Administrative Agent, on behalf of Buyers, purchases a Purchased  Asset from Seller, or the Purchase Price Increase Date, as applicable.  If the Purchase Price is paid by  wire transfer, the Purchase Date shall be the date such funds are wired.  If the Purchase Price is paid by a  funding draft, the Purchase Date shall be the date that the draft is posted by the bank on which the draft is  drawn.    “Purchase Price”: The price at which each Asset is transferred by Seller to Administrative Agent, on  behalf of Buyers, which, except as otherwise may be set forth in the Transactions Terms Letter, shall be  equal to the product of the applicable Type Purchase Price Percentage and the least of (a) the unpaid  principal balance of such Asset, (b) the Market Value of such Asset, or (c) the purchase price paid by  Seller for such Asset in an arms-length transaction with a Person that is not an Affiliate of Seller, in each  case, increased by the amount of any Purchase Price Increase.      “Purchase Price Increase”: An increase in the Purchase Price of a Revolving Rebuild BPL Loan in  connection with the related disbursement of Additional Draw Amounts, as requested by Seller pursuant to  Section 2.1(b) hereof.    “Purchase Price Increase Date”: The date on which a Purchase Price Increase is made.    “Purchased Assets”: Purchased Mortgage Loans.     “Purchased Items”: All now existing and hereafter arising right, title and interest of Seller in, under and  to the following:   (a) all Purchased Mortgage Loans, now owned or hereafter acquired for which a Transaction  has been entered into between Administrative Agent, on behalf of Buyers, and Seller  hereunder and for which the Repurchase Price has not been received by Administrative  Agent, on behalf of Buyers, including all Mortgage Notes and Mortgages evidencing  such Mortgage Loans and the related Mortgage Loan Documents, which, from time to  time, are delivered, or caused to be delivered, to Administrative Agent, on behalf of  Buyers (including delivery to a custodian or other third party on behalf of Administrative  

 

   Exhibit A-20    Agent and Buyers) as additional security for the performance of Seller’s obligations  hereunder;  (b) all Income related to the Purchased Assets and all rights to receive such Income;  (c) if applicable, all amounts on deposit in the Collateral Account relating directly to the  Purchased Mortgage Loans;  (d) all now existing and hereafter arising rights of Seller to service, administer and/or collect  on the Purchased Assets hereunder and any and all rights to the payment of monies on  account thereof;  (e) all Servicing Rights related to the Purchased Mortgage Loans, all related Servicing  Records, and all rights of Seller to receive from any third party or to take delivery of any  Servicing Records or other documents which constitute a part of the Mortgage Loan  Files, including without limitation, the Other Mortgage Loan Documents, in each case,  relating to the Purchased Mortgage Loans;  (f) all now existing and hereafter arising accounts, contract rights and general intangibles  constituting or relating to any of the Purchased Assets;  (g) all rights, but not any obligations or liabilities, of Seller relating to the Purchased  Mortgage Loans with respect to the Approved Investor;  (h) all documents, files, surveys, certificates, correspondence, appraisals, computer  programs, tapes, discs, cards, accounting records and other information and data of Seller  relating to Purchased Assets;  (i) all property of Seller, in any form or capacity now or at any time hereafter in the  possession or control of Administrative Agent, on behalf of Buyers, relating to the  Purchased Mortgage Loans;  (j) all Proceeds of the Purchased Assets;  (k) any funds of Seller at any time deposited or held in the Funding Account;  (l) all deposit accounts, deposits, money, investment property or other property (except real  property which is not a fixture) which are now or later in possession or control of  Administrative Agent or any Buyer, or as to which Administrative Agent or any Buyer  now or later controls possession by documents or otherwise, relating to the Purchased  Assets; and  (m) all attachments, accessions, accessories, increases, and additions to and all replacements  of and substitutions for any other collateral described above, (ii) with respect to software  described in the foregoing, any and all licenses, options, warranties, service contracts,  program services, test rights, maintenance rights, support rights, improvement rights,  renewal rights and indemnifications and any model conversions, (iii) all proceeds,  products, and substitutions of any of the property described above, including, without  limit, insurance and condemnation proceeds, and cash or other property which were  proceeds and are recovered by a bankruptcy trustee or otherwise as a preferential transfer  by Seller, and (iv) all records and data relating to any of the property described above,  

 

   Exhibit A-21    whether in the form of a writing, photograph, microfilm, microfiche, or electronic media,  and all of Seller’s right, title, and interest in and to all software required to utilize, create,  maintain and process any such records or data on electronic media.  “Purchased Mortgage Loan”: A Mortgage Loan that has been purchased by Administrative Agent, on  behalf of Buyers, from Seller in connection with a Transaction and which has not been repurchased by  Seller hereunder.    “Qualified Appraiser”: A licensed appraiser of a specified Mortgaged Property duly appointed by or on  behalf of the originator: (i) whose compensation and appraisal appointment by or on behalf of the  originator is not affected by the approval or disapproval of the related Mortgage Loan, (ii) the selection  of whom was made independently of the broker (where applicable) and the originator’s loan sales and  loan production personnel and (iii) otherwise complies with the requirements of FIRREA.   “Reference Time”:  With respect to any setting of the then-current Benchmark means the time  determined by Administrative Agent in its reasonable discretion.  “Register”: As defined in Section 15.5 of this Agreement.  “Related Credit Enhancement”: As defined in Section 6.1 of this Agreement.  “Relevant Governmental Body”:  The Board of Governors of the Federal Reserve System or the Federal  Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors  of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.  “Reportable Event”: An event described in Section 4043(c) of ERISA with respect to a Plan as to which  the thirty (30) days’ notice requirement has not been waived by the PBGC.  “Repurchase Acceleration Event”: Any of the conditions or events set forth in Section 4.2 of this  Agreement.  “Repurchase Date”: The date on which Seller is to repurchase a Purchased Asset subject to a Transaction  from Administrative Agent, on behalf of Buyers, which is either (a) the date specified in the related  Transactions Terms Letter and/or Transaction Request or (b) the date identified to Administrative Agent,  on behalf of Buyers, by Seller as the date that the related Purchased Asset pursuant to the terms of this  Agreement.  The Repurchase Date for each Purchased Asset shall in no event occur later than one (1) year  after the Purchase Date of such Purchased Asset.  “Repurchase Price”: The price at which a Purchased Asset is to be transferred from Administrative  Agent, on behalf of Buyers, or its designee to Seller or an Approved Investor, as applicable, upon  termination of a Transaction, which shall equal the sum of (a) the Purchase Price, (b) any applicable fees  and indemnities owed by Seller in connection with the Purchased Asset and (c) the Price Differential due  on such Purchase Price pursuant to Section 2.6 as of the date of such determination.  “Repurchase Transaction”: As defined in Section 6.5 of this Agreement.  “Request for Temporary Increase”: As defined in Section 2.9 of this Agreement.  “Reset Date”:  (i) The date of this Agreement, (ii) the [***] of each month thereafter, provided, that, if  any such day is not a Business Day, then the first succeeding day that is a Business Day shall instead  apply.  

 

   Exhibit A-22    “Resolved Asset”: Any Purchased Asset which is repaid in full, sold, repurchased, liquidated, charged- off, or otherwise disposed of.  “Revolving Rebuild BPL Loan”: Any Business Purpose Loan for which future advances are dispersed to  or from the Seller to the related Mortgagor following the origination of such loan to rebuild the related  Mortgaged Property in accordance with the Servicing Agreement and the Mortgage Loan Documents.   “Servicer”: (i) FCI Lender Services, Inc. or (ii) such other entity responsible for servicing of the  Purchased Mortgage Loans and that has been approved by Administrative Agent, on behalf of Buyers, in  writing, or, in each case, any successor or permitted assigns thereof.  “Servicer Notice”: The notice acknowledged by the Servicer that has approved by Administrative Agent  in its sole discretion.  “Servicer Termination Event”: The occurrence of any of the following conditions or events shall be a  Servicer Termination Event:  (n) a Servicer fails to service the Eligible Assets subject to Transactions in accordance with  the related Servicing Agreement;  (o) a Servicer fails to maintain all state and federal licenses necessary to do business in any  jurisdiction where Mortgaged Property is located if such license is required, or to be in  compliance with any licensing laws of any jurisdiction where Mortgaged Property is  located with respect to the Purchased Assets;  (p) (i) a Servicer or any of its Subsidiaries or Affiliates shall default under, or fail to perform  as required under, or shall otherwise breach the terms of any instrument, agreement or  contract between Servicer or such other entity on the one hand, and Administrative  Agent, on behalf of Buyers, or any of Administrative Agent’s Affiliates on the other; or  (ii) Servicer or any of its Subsidiaries or Affiliates shall default under, or fail to perform  as required under, the terms of any repurchase agreement, loan and security agreement or  similar credit facility, any agreement for borrowed funds or any other material agreement  entered into by Servicer or such other entity and any third party;  (q) an Insolvency Event shall have occurred with respect to Servicer or any of its Affiliates   or Subsidiaries; or Servicer shall admit in writing its inability to, or intention not to,  perform any of its obligations under this Agreement or any of the other Principal  Agreements to which it is a party; or Administrative Agent, on behalf of Buyers, shall  have determined in good faith that Servicer is unable to meet its financial commitments  as they come due;  (r) a Material Adverse Effect with respect to a Servicer shall occur;  (s) a Servicer failing to maintain a rating with Fitch Ratings, Inc. of [***] or such other  comparable rating as approved by the Administrative Agent;  (t) a Servicer fails to make any servicing advance required to be made under the related  Servicing Agreement, the related Servicer Notice, or this Agreement, as applicable, with  respect to the Purchased Assets;  

 

   Exhibit A-23    (u) Seller fails, or fails to cause any Servicer, to deposit all amounts required to be deposited  into the Collateral Account by Seller with respect to the Purchased Mortgage Loans when  due under this Agreement;  (v) a Servicer fails to deposit all amounts required to be deposited into any account by such  Servicer with respect to the Purchased Mortgage Loans when due under the related  Servicing Agreement or the related Servicer Notice;  (w) termination of a substantial portion of existing servicing contracts or any material  dispute, licensing issue, litigation, audit, revocation, sanctions, penalties, investigation,  proceeding or suspension between a Servicer or subservicer and any governmental  authority or any Agency as to which individually or in the aggregate, in Administrative  Agent’s sole and absolute discretion, is reasonably likely to have a Material Adverse  Effect;  (x) a Change of Control with respect to Servicer that is an Affiliate of Seller shall occur  without the prior written consent of Administrative Agent, on behalf of Buyers;  (y) the occurrence of an Event of Default;  (z) the occurrence of any conditions or events that permit a Servicer to be terminated under a  Servicing Agreement or a Servicer initiates termination under a Servicing Agreement;  (r) any representation, warranty or certification made or deemed made in a Servicing  Agreement by a Seller or any certificate furnished by a Servicer pursuant to the  provisions thereof, shall prove to have been false or misleading in any material respect as  of the time made or furnished; or  (s)  the failure of a Servicer to perform, comply with or observe any term, covenant or  agreement applicable to a Servicer and related to its financial condition as contained in a  Servicing Agreement and such occurrence or any default shall not have been remedied  within the cure period provided therein.   “Servicing Agreement”: If the Purchased Mortgage Loans are serviced by any servicer that is not  Administrative Agent or an Affiliate of Administrative Agent, in each case, the agreement with the third  party servicer, in form and substance acceptable to Administrative Agent, on behalf of Buyers.  “Servicing Records”: All servicing agreements, files, documents, records, data bases, computer tapes,  copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing  documentation, payment history records, and any other records relating to or evidencing the servicing of a  Mortgage Loan.  “Servicing Rights”: The contractual, possessory or other rights of Seller, Servicer or any other Person,  whether arising under a Servicing Agreement, the Custodial Agreement or otherwise, to administer or  service a Mortgage Loan or to possess related Servicing Records.  “SOFR”:  A rate equal to the secured overnight financing rate as administered by the SOFR  Administrator.  “SOFR Administrator”:  The Federal Reserve Bank of New York (or a successor administrator of the  secured overnight financing rate).  

 

   Exhibit A-24    “SOFR Administrator’s Website”: The website of the Federal reserve Bank of New York, currently at  http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as  such by the SOFR Administrator from time to time.    “Subordinated Debt”: Debt of Seller that either (a) has been subordinated to Administrative Agent as  provided in this Agreement or (b) has been otherwise approved by Administrative Agent.  “Subsidiary”: With respect to any Person, any corporation, partnership or other entity of which at least a  majority of the securities or other ownership interests having by the terms thereof ordinary voting power  to elect a majority of the board of directors or other persons performing similar functions of such  corporation, partnership or other entity (irrespective of whether or not at the time securities or other  ownership interests of any other class or classes of such corporation, partnership or other entity shall have  or might have voting power by reason of 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.  “Successor Servicer”: Any successor servicer of the Purchased Mortgage Loans appointed by  Administrative Agent, on behalf of Buyers, as described in Section 6.2(h) of this Agreement.  “S&P”: S&P Global Ratings, a division of S&P Global Inc., and any successor thereto.  “Taxes”: As defined in Section 12.3(a) of this Agreement.  “Total Assets”: Seller’s assets as of the relevant date, determined in accordance with GAAP.  “Total Liabilities”: Total liabilities, determined in accordance with GAAP, as of the date of any  calculation thereof.  “Temporary Increase”: As defined in Section 2.9 of this Agreement.  “Temporary Aggregate Transaction Limit”: As defined in Section 2.9 of this Agreement.  “TILA-RESPA Integrated Disclosure Rule”: 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”: As set forth in the Recitals of this Agreement.  “Transaction Request”: A request submitted by Seller to Administrative Agent, on behalf of Buyers, in  the format approved by Administrative Agent, in its sole and absolute discretion, in accordance with the  Manual, notifying Administrative Agent, on behalf of Buyers, that Seller wishes to enter into a  Transaction hereunder.    “Transactions Terms Letter”: The document executed by Administrative Agent, Buyers, Guarantor and  Seller, referencing this Agreement and setting forth certain specific terms, and any additional terms, with  respect to this Agreement.    “Type”: A specific type of Purchased Asset, as set forth in the Transactions Terms Letter.    “Type Margin”: With respect to each Type of Purchased Asset, the corresponding annual rate of interest  for such Type as set forth in the Transactions Terms Letter that shall be added to the Applicable Pricing  Rate to determine the annual rate of interest for the related Purchase Price.  

 

   Exhibit A-25    “Type Purchase Price Percentage”: With respect to each Type of Purchased Asset, the corresponding  purchase price percentage for such Type, as set forth in the Transactions Terms Letter.  “Type Sublimit”: Any of the applicable Type Sublimits, as set forth in the Transactions Terms Letter.  “UK Financial Institution”: Any BRRD Undertaking (as such term is defined under the PRA Rulebook  (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or  any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated  by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and  investment firms, and certain affiliates of such credit institutions or investment firms.  “UK Resolution Authority”: The Bank of England or any other public administrative authority having  responsibility for the resolution of any UK Financial Institution.   “UETA”: The Official Text of the Uniform Electronic Transactions Act as approved by the National  Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.    “Unadjusted Benchmark Replacement”:  The applicable Benchmark Replacement excluding the related  Benchmark Replacement Adjustment.  “Underwriting Guidelines”:  The loan purchase and/or origination guidelines, policies, procedures and  matrices, as applicable, of Seller delivered to Administrative Agent on or before the Closing Date as may  be updated from time to time by Seller with prior written consent of Administrative Agent.  “Uniform Commercial Code”: 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.    “Unused Fee”: The unused fee set forth in the Transactions Terms Letter. The Unused Fee shall be non- refundable.   “Wet Mortgage Loan”: A closed Mortgage Loan that Administrative Agent, on behalf of Buyers,  purchases from Seller prior to receipt by Administrative Agent, on behalf of Buyers, or its Custodian of  the related Mortgage Loan Documents, subject to Seller’s obligation to deliver the related Mortgage Loan  Documents to Administrative Agent, on behalf of Buyers, or its Custodian within the applicable  Maximum Dwell Time with respect to Seller’s obligation to deliver the related Mortgage Loan  Documents to Administrative Agent, on behalf of Buyers, or its Custodian.     “Write-Down and Conversion Powers”: With respect to any EEA Resolution Authority, the write- down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In  Legislation for the applicable EEA Member Country, which write-down and conversion powers are  described in the EU Bail-In Legislation Schedule.   

 

   Exhibit B-1  Error! No document variable supplied.  EXHIBIT B  RESERVED  

 

   Exhibit C-1  Error! No document variable supplied.  EXHIBIT C  FORM OF OFFICER’S COMPLIANCE CERTIFICATE  I, ___________________________, do hereby certify that I am the duly elected authorized [Chief  Financial Officer][Treasurer][Controller] of Grapetree Lending LLC (“Seller”), and I,  ___________________________, do hereby certify that I am the duly elected authorized [Chief Financial  Officer][Treasurer][Controller] of Altisource Asset Management Corporation (“Guarantor”).  This  certificate is delivered in connection with Section 9.1 of the Master Repurchase Agreement, dated as of  August 1, 2022, by and among Seller, Guarantor, Flagstar Bank FSB, as administrative agent (in such  capacity, the “Administrative Agent”) and as a buyer (in such capacity, the “Flagstar Buyer”) and each  other Buyer from time to time party thereto (collectively with Flagstar Buyer, the “Buyers”) (as amended,  supplemented or otherwise modified from time to time, the “Agreement”).  I do hereby certify that, as of  the date of the financial statements attached hereto and as of month end for [MONTH/YEAR], Seller is  and has been in compliance with all the terms of the Agreement and, without limiting the generality of the  foregoing, I certify that as of month end for [MONTH/YEAR]:  (aa) Adjusted Tangible Net Worth.  The Adjusted Tangible Net Worth of Guarantor on a consolidated  basis as of the last day of the fiscal quarter [QUARTER/YEAR], is not less than $[***].  This calculation is set forth as Item I in Schedule 1 attached hereto.  (bb) Liquidity.  Guarantor’s Liquidity on a consolidated basis, as of the last day of the fiscal quarter  [QUARTER/YEAR] was equal to or greater than $[***].  This calculation, and the portion of such amount that relates to any amounts on deposit pursuant  to a warehouse or repurchase facility in excess of the amounts required to be deposited therein, is  set forth as Item II in Schedule 1 attached hereto.  (cc) Leverage Ratio.  As of as of the last day of the fiscal quarter [QUARTER/YEAR], the ratio of  Guarantor’s Total Liabilities to Adjusted Tangible Net Worth, does not exceed [***].  This calculation is set forth as Item III in Schedule 1 attached hereto.  (dd) [As of the last day of the fiscal year [YEAR], Guarantor shall report Net Income on a  consolidated basis of not less than $[***] for any fiscal year.  This calculation is set forth as Item IV in Schedule I attached hereto.]1  (ee) Financing Facilities and Debt.  Except as set forth in Schedule 3 attached hereto, neither  Guarantor nor Seller has entered into any mortgage financing facilities, including, without  limitation, any warehouse, repurchase, purchase or off-balance sheet facilities.  All Debt (other  than the Debt evidenced by the Agreement) of Guarantor or Seller existing as of month end for  [MONTH/YEAR] is listed on Schedule 2 hereto.  (ff) Financial Statements.  The financial statements attached hereto fairly and accurately present the  consolidated financial condition, results of operations and cash flows of Guarantor or Seller (and  their Subsidiaries, on a consolidated basis), in accordance with GAAP, consistently applied, as of  month end for [MONTH/YEAR] (subject to normal year-end adjustments).                                                        1 Effective beginning the fiscal year 2023.  

 

  Exhibit C-2  Error! No document variable supplied.  (gg) Litigation.  As of month end for [MONTH/YEAR], the aggregate amounts accrued in accordance  with GAAP with respect to actions, suits or proceedings, and actions, suits or proceedings  threatened against Guarantor or Seller, with respect to which there is a reasonable likelihood of an  adverse determination is less than $[***] with respect to Guarantor or Seller.  (hh) Documentation.  Seller has performed the documentation procedures required by its operational  guidelines with respect to endorsements and assignments, including the recordation of  assignments, or has verified that such documentation procedures have been performed by a prior  holder of such Mortgage Loan.  (ii) Compliance.  Each of Guarantor and Seller has observed or performed in all material respects all  of its covenants and other agreements, and satisfied every condition, contained in the Agreement  and the other Principal Agreements to be observed, performed and satisfied by it.  (jj) Regulatory Action.  There are no actions, claims, suits, investigations or proceedings pending, or  to the knowledge of Guarantor or Seller, threatened, or affecting Guarantor or Seller or any of its  Subsidiaries or Affiliates or any of the property thereof in any court or before or by any arbitrator,  government commission, board, bureau or other administrative agency that, if adversely  determined, could reasonably be expected to result in a Material Adverse Effect with respect to  Guarantor or Seller or any of its Affiliates.  (kk) No Event of Default or Other Matters.  No Event of Default, Event of Early Termination,  Potential Default, Material Adverse Effect with respect to Guarantor or Seller or Cease Funding  Event has occurred or is continuing.  (ll) Originations.  Attached hereto as Schedule 4 is a true and correct summary of all Mortgage Loans  originated by each Seller during the calendar month listed on Schedule 4.  (mm) Repurchases and Indemnification/Make-Whole.  Attached hereto as Schedule 5 is a true and  correct summary, including but not limited to the applicable loan numbers and a flag indicating  the applicability of each category set forth in clauses (a) or (b), of the (a) pending repurchase  demands and indemnification/Make-Whole, (b) satisfied repurchase demands and  indemnification/Make-Whole, and (c) total repurchase demands and indemnification/Make- Whole. For purposes of clarity, such Schedule 6 shall include the loan number for each loan  included in such summary, as well as the classification of each such loan in each category set  forth in clauses (a) or (b) above (i.e., pending repurchase demands and indemnification/Make- Whole or satisfied repurchase demands and indemnification/Make-Whole).   (nn) Repurchases and Early Payment Default Requests.  Attached hereto as Schedule 6 is a true and  correct summary of the portfolio performance including representation breaches, missing  document breaches, repurchase due to fraud, early payment default requests, summarized on the  basis of (a) pending repurchase demands (including weighted average duration of outstanding  request), (b) satisfied repurchase demands and (c) total repurchase demands.  (oo) Most Favored Status.  Except as set forth on a schedule attached hereto, each of Guarantor and  Seller or any of its Affiliates has not entered into a repurchase agreement or credit facility that is  substantially similar to the Transactions contemplated under the Agreement in respect of asset  type and term with any Person other than Administrative Agent or any Buyer or an Affiliate of  Administrative Agent or any Buyer which by its terms provides more favorable terms to the  buyer, lender or other party with respect to such repurchase agreement or credit facility, as  

 

  Exhibit C-3  Error! No document variable supplied.  applicable, with respect to any financial covenants set forth in Section 9.14 of the Agreement,  intended to test the creditworthiness of the Guarantor or Seller, or any other covenants.  

 

  Exhibit C-4  Error! No document variable supplied.  IN WITNESS WHEREOF, I have set my hand this _____ day of ___________, 20__.  Grapetree Lending LLC, as Seller  By:  __________________________________   Name:  Title:    Altisource Asset Management Corporation, as Guarantor  By:  __________________________________   Name:  Title:  

 

   Exhibit C-5  Error! No document variable supplied.  SCHEDULE 1 TO OFFICER’S COMPLIANCE CERTIFICATE  CALCULATIONS OF FINANCIAL COVENANTS  As of the calendar month ended [DATE]  I. Adjusted Tangible Net Worth  II. Liquidity   III. Leverage Ratio   IV. Net Income    

 

   Exhibit C-6  Error! No document variable supplied.  SCHEDULE 2 TO OFFICER’S COMPLIANCE CERTIFICATE  DEBT AS OF ____________________________  LENDER  TOTAL  FACILITY SIZE  OUTSTANDING  DEBT  EXPIRATION  DATE  

 

   Exhibit C-7  Error! No document variable supplied.  SCHEDULE 3 TO OFFICER’S COMPLIANCE CERTIFICATE  FINANCING FACILITIES    

 

   Exhibit C-8  Error! No document variable supplied.  SCHEDULE 4 TO OFFICER’S COMPLIANCE CERTIFICATE  OVERALL MORTGAGE LOAN ORIGINATIONS    [●]  TOTAL LOAN PRODUCTION FOR THE MONTH ENDED  [__] [__], 20[__]   $ Volume # Loans % of $  Business Purpose Loans     Multi-Family Mortgage Loans     Revolving Rebuild BPL Loans     Portfolio Mortgage Loans     Total     Purchase     Refinance     Total     Fixed     ARM     Total     Retail Originations     Wholesale Originations     Consumer Direct Originations     Correspondent Originations     Total     First Lien Mortgage          Total     Credit Score Range     <= 639     640 ‐ 659     660 ‐ 699     700 ‐ 719     720 ‐ 739     740 ‐ 759     760 ‐ 779     >= 780     Total $ - - 0%       

 

  Exhibit C-9  Error! No document variable supplied.  TOTAL LOAN PRODUCTION YTD   [__] [__], 20[__]   $ Volume # Loans % of $  Business Purpose Loans     Multi-Family Mortgage Loans     Revolving Rebuild BPL Loans     Portfolio Mortgage Loans     Total     Purchases     Refinances     Total     Fixed     ARM     Balloon     Total     Retail Originations     Wholesale Originations     Consumer Direct Originations     Correspondent Originations     Total     First Lien Mortgage          Total     Credit Score Range     <= 639     640 ‐ 659     660 ‐ 699     700 ‐ 719     720 ‐ 739     740 ‐ 759     760 ‐ 779     >= 780     Total         

 

   Exhibit C-10  Error! No document variable supplied.  SCHEDULE 5 TO OFFICER’S COMPLIANCE CERTIFICATE  REPURCHASES AND INDEMNIFICATION  As of [__][__], 20[__]  YTD Satisfied Repurchase Claims  Investor Name Loan Count Original Loan Amount ($) Cumulative Repurchase Price ($)  Bond     Total - - -    Pending Outstanding Repurchase Exposure  Investor Name Loan Count Original Loan Amount ($) Estimated Repurchase Price ($)       Total - - -    Satisfied/Agreed Make Whole Summary (YTD 202[●])  Investor Name Loan Count Original Loan Amount ($) Make Whole Amount ($)       Total - - -      

 

   Exhibit C-11  Error! No document variable supplied.  SCHEDULE 6 TO OFFICER’S COMPLIANCE CERTIFICATE  REPURCHASES AND EARLY PAYMENT DEFAULT REQUESTS    

 

   Exhibit D-1  Error! No document variable supplied.  EXHIBIT D  FORM OF BAILEE AGREEMENT    [***]  [***]  [***]  [***]  [***]  MMMM DD, YYYY    Investor Name  Investor Address  Investor City, State, Zip  Attn:    RE: Sale of Mortgage Loan(s) by [●]  Dear Sir/Madam:  Enclosed please find the original promissory note (the “Note”) and related collateral documents for the  mortgage loan described in Schedule 1 below (the “Mortgage Loan”). [●] has granted a security interest  in the Mortgage Loan and the Note to Flagstar Bank (“Flagstar”).  SCHEDULE 1  Borrower Property Address Note Amount Note Date  Name Address xxx,xxx.xx MM/DD/YY    The Note, and all other related documents, whether now or hereafter delivered to you, are to be held by  you in trust (as bailee) for the benefit of Flagstar subject only to Flagstar’s direction and control. Unless  you return the enclosed Note and related documents immediately upon your receipt of same, you shall be  deemed to have accepted the described bailment, and this bailee letter shall be binding upon you and your  successors assigns. If you accept the Note for purchase, the applicable purchase proceeds as set forth in  Schedule 1 above (the “Purchase Proceeds”) shall be wire transferred with immediately available funds to  Flagstar within [***] as follows:  TO: Flagstar Bank, Troy, MI  ABA #:[***]  Account #: <WH Account>  Credit: [●]  Reference #: (Flagstar Confirmation Number)  For: (Borrower Name, Loan Number)  ATTN: [***], Warehousing (Telephone [***])  

 

  Exhibit D-2  Error! No document variable supplied.  * The above instructions must be included or the wire will be RETURNED!  Any Note which is not accepted by you should be returned to Flagstar, along with all other related  documents, no later than [***] from the date first written above, to the attention of [***].  The Note and related documents have not been assigned or transferred by Flagstar to any other party.  Flagstar has no obligation to release its security interest in the Note and related documents unless Flagstar  receives the Purchase Proceeds for the pledged Mortgage Loan. Flagstar acknowledges that the Purchase  Proceeds for the Mortgage Loan may be less than the Note amount set forth in this letter. Flagstar will  only release its security interest in the Mortgage Loan if the Purchase Proceeds are not reduced by  adjustments or offsets unrelated to the Mortgage Loan. Subject to the foregoing, upon Flagstar’s receipt  of the Purchase Proceeds, its security interest, claim, lien, encumbrance and any other interest that  Flagstar has in such Mortgage Loan, including the Note and other documents evidencing or securing such  Mortgage Loan, shall terminate without further action from any party, and Flagstar shall have no further  claim with respect to such Mortgage Loan.  In no event shall the Note or any related documents be delivered to any third party, pledged, or otherwise  dealt with by you until Flagstar has received payment as described above. Until such time or until the  Note and related documents are safely returned to Flagstar’s possession, you are responsible for the care,  custody, protection and safeguarding of the Note and related collateral documents and will be held  accountable therefore. Additionally, neither the Note or any related documents shall be subject to any  liens, pledges or encumbrances in favor of you as a result of your possession thereof under this bailee  letter.  You shall not honor any request or instruction from any third party regarding the Note and other collateral  documents, unless you have received written consent of Flagstar to such new or variant instructions, or  until Flagstar has received such proceeds.  You hereby agree to indemnify Flagstar and hold it harmless against any actual losses, damages (other  than indirect, special, consequential, and/or punitive damages), penalties, fines, forfeitures, judgments,  and any reasonable out-of-pocket costs, including reasonable and necessary legal fees (collectively  referred to herein as “Losses”), directly resulting from the loss or damage to the Note and all other related  documents while in your actual possession hereunder, or from your gross negligence, bad faith or willful  misconduct resulting in a failure to materially comply with the written instructions contained herein.  Notwithstanding any other provision of this letter or any other document or agreements, Flagstar Bank  reserves the right, exercisable at any time before you have paid Flagstar for the Mortgage Loan, to  require, by written notice delivered to you in any legally effective manner, that you return the Note and  other documents to Flagstar.  For the purpose of facilitating the execution of this bailee letter as herein provided and for other purposes,  this bailee letter may be executed simultaneously in any number of counterparts, each of which  counterparts shall be deemed to be an original, and such counterparts shall constitute and be one and the  same instrument.  This Agreement shall be governed by, and shall be interpreted and enforced in accordance with, the laws  of the State of Michigan (without regard to choice of law principles).  Please acknowledge receipt of this bailee letter and the Note by signing and returning a copy of this letter  to [***]. Alternatively, you may email a PDF of the countersigned letter to [***]. Inquiries regarding this  bailee letter may be directed to [***].  

 

  Exhibit D-3  Error! No document variable supplied.  Very truly yours,  Flagstar Bank, FSB      Jeffrey Neufeld, Senior Vice President  Any action involving this bailee letter or the Note shall be brought solely in a state or federal court sitting  in the State of Michigan. Your signature below indicates your submission to the jurisdiction of any such  court for the purpose of adjudicating any such action and your waiver of any objection to the venue of any  such action commenced in any such court.  Received and accepted this ____________ day of __________________, 20 ______  Investor Name    By: ________________________________      Title: ______________________________        

 

   Exhibit E-1  Error! No document variable supplied.  EXHIBIT E  FORM OF POWER OF ATTORNEY  KNOW ALL MEN BY THESE PRESENTS:  WHEREAS, Flagstar Bank FSB, as administrative agent (in such capacity, the “Administrative  Agent”), and as a buyer (in such capacity, the “Flagstar Buyer”), Grapetree Lending LLC, as the  seller (“Seller”), Altisource Asset Management Corporation, as the guarantor (“Guarantor”),  and each other Buyer from time to time party thereto (collectively with the Flagstar Buyer, the  “Buyers”) have entered into the Master Repurchase Agreement, dated as of August 1, 2022 (the  “Agreement”), pursuant to which Administrative Agent, on behalf of Buyers, has agreed to  purchase from Seller certain mortgage loans from time to time, subject to the terms and  conditions set forth therein; and  WHEREAS, Seller has agreed to give to Administrative Agent, on behalf of Buyers, a power of  attorney on the terms and conditions contained herein in order for Administrative Agent, on  behalf of Buyers, to take any action set forth below that Administrative Agent, on behalf of  Buyers, may deem necessary or advisable to accomplish the purposes of the Agreement.  NOW, THEREFORE, Seller hereby irrevocably constitutes and appoints Administrative Agent, on behalf  of Buyers, its true and lawful Attorney-in-Fact, with full power and authority hereby conferred in its  name, place and stead and for its use and benefit, to do and perform any of the following actions in  connection with assets purchased by Administrative Agent, on behalf of Buyers, from Seller under the  Agreement (the “Purchased Assets”) or as otherwise provided below:  (1) to receive, endorse and collect all checks made payable to the order of Seller representing  any payment on account of the Purchased Assets;  (2) to assign or endorse any mortgage, deed of trust, promissory note or other instrument  relating to the Purchased Assets;  (3) to correct any assignment, mortgage, deed of trust or promissory note or other instrument  relating to the Purchased Assets, including, without limitation, unendorsing and  re-endorsing a promissory note to another investor;  (4) to complete and execute lost note affidavits or other lost document affidavits relating to  the Purchased Assets;  (5) to issue title requests and instructions relating to the Purchased Assets; and  (6) to give notice to any individual or entity of its interest in the Purchased Assets under the  Agreement.  Seller hereby ratifies and confirms all that said Attorney-in-Fact shall lawfully do or cause to be done by  authority hereof.  Third parties without actual notice may rely upon the power granted under this Power of Attorney upon  the exercise of such power by the Attorney-in-Fact.     

 

   Exhibit E-2  Error! No document variable supplied.  GRAPETREE LENDING LLC  By:       Name: [***]  Title: General Counsel  WITNESS my hand this ____ day of _____________, 20___.  STATE OF       County of       This instrument was acknowledged, subscribed and sworn to before me this _____ day of  _________, by ______________________________________        Notary Public  My Commission Expires:  Notary Seal:    

 

   Exhibit F-1  Error! No document variable supplied.  EXHIBIT F  WIRING INSTRUCTIONS  Administrative Agent’s Wire Instructions:   Account Number:               [***]  ABA / Routing:                  [***]  Bank Name:                        Flagstar Bank, FSB  Bank Address:                    Troy, MI  Reference:                          [***]  Attn:                                    [***]    These wiring instructions may not be changed except by an authorized representative of Administrative  Agent.    

 

  Exhibit G-1  Error! No document variable supplied.  EXHIBIT G  RESERVED      

 

  Exhibit H-1  Error! No document variable supplied.  EXHIBIT H  REPRESENTATIONS AND WARRANTIES  Representations and Warranties Concerning Purchased Assets.  Seller represents and warrants to and  covenants with Administrative Agent and Buyers that the following are true and correct with respect to  each Purchased Asset as of the related Purchase Date through and until the date on which such Purchased  Asset is repurchased by Seller.  With respect to those representations and warranties which are made to  Seller’s knowledge, if it is discovered by Seller, Administrative Agent or any Buyer that the substance of  such representation and warranty is inaccurate, notwithstanding 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:  (a) Appraisal. Unless otherwise agreed to in writing by the Administrative Agent, each  Mortgage Loan contains either (x) an Appraisal of the related Mortgaged Property  with an appraisal date within [***] of the applicable Purchase Date, which was  made and signed prior to the funding of the Mortgage Loan by a Qualified  Appraiser or (y) a BPO that is no more than [***] old at the time of the applicable  Purchase Date.  Each Appraisal (i) was determined and written in accordance with  current industry practices, (ii) satisfies applicable legal and regulatory requirements  and (iii) was prepared in accordance with the requirements of FIRREA and the  implementing regulations and guidelines issued thereunder.    (b) Underwriting Guidelines. Each Mortgage Loan was, in all material respects (i)  underwritten in compliance with, or (ii) underwritten with documented exceptions  to, the Underwriting Guidelines in effect at the time of origination by Seller;  provided that such documented exceptions as were disclosed to, and approved by,  the Administrative Agent prior to the related Purchase Date (such approval not to  be unreasonably withheld).      (c) Origination Practices. The Seller and the originator have complied in all material  respects with, or was exempt from, all requirements of all applicable federal, state  or local laws, rules and regulations, relating to the origination of the Mortgage  Loan and disbursements of any Purchase Price Increase; provided that such  representation and warranty does not address or otherwise cover any matters with  respect to federal, state or local law otherwise covered in these representations and  warranties.    (d) Occupancy of the Mortgaged Property. As of the date of origination and in  accordance with the terms of the Mortgage Note, the Mortgaged Property is  either vacant and the Mortgagor has presented a plan to cure any defects or was  lawfully occupied under Applicable Law by a person unrelated to the Mortgagor  pursuant to a lease or other contract negotiated at arm’s length terms.    (e) Assignment of Leases. With respect to any Mortgaged Property that has tenants,  there exists as either part of the Mortgage or as a separate document, an assignment  of leases. Each related assignment of assignment of leases from Seller in blank  constitutes a legal, valid and binding assignment from Seller (assuming the  

 

   Exhibit H-2    insertion of Administrative Agent’s name), except as such enforcement may be  limited by bankruptcy, insolvency, receivership, reorganization, moratorium,  redemption, liquidation or other laws relating to or affecting the enforcement of  creditors’ rights generally, or by general principles of equity (regardless of whether  such enforcement is considered in a proceeding in equity or at law).  Each related  assignment of leases evidences a first-priority lien, and each is freely assignable  without the consent of the related Mortgagor.      (f) Type of Loan. The Mortgage Loan was originated primarily for business or  commercial purposes and not primarily for a personal, family or household purpose,  as defined in the federal Truth in Lending Act and its implementing Regulation Z.  The Mortgaged Property securing the related Mortgage is not occupied by the  Mortgagor.    (g) Source of Loan Payments. No payments due and payable under the terms of the  Mortgage Note and Mortgage or deed of trust, except for seller or builder  concessions, have been paid by any person who was involved in, or benefited from,  the sale or purchase of the Mortgaged Property or the origination, refinancing, sale,  purchase or servicing of the Mortgage Loan other than the Mortgagor. Loan  payments may be made from escrowed interest payments on various types of loans,  including, without limitation, ground-up construction, bridge, and fix-and-flip.    (h) Mortgage Loans as Described. The information set forth in each Mortgage Loan  Schedule and the electronic tape delivered by the Seller to the Administrative  Agent with respect to the Mortgage Loan is true, correct and complete in all  respects. With respect to each Mortgage Loan, there are no servicing expenses or  advances reimbursable by the Seller other than those expenses and advances  identified in the applicable Mortgage Loan Schedule.    (i) No Fraud. No fraud, error, omission, misrepresentation, negligence or similar  occurrence with respect to the Mortgage Loan has taken place on the part of the  Seller or the originator, in connection with the origination of the Mortgage Loan,  the determination of the value of the Mortgaged Property or the application of any  insurance in relation to such Mortgage Loan.    (j) Credit Scores. The credit score used in applying the applicable Underwriting  Guidelines was the Credit Score, as defined herein.    (k) Compliance with Applicable Laws. Any and all requirements of any applicable  federal, state or local law including, without limitation, usury, truth in lending, real  estate settlement procedures, consumer credit protection, predatory and abusive  lending laws, equal credit opportunity, fair housing and disclosure laws or unfair  and deceptive practices laws applicable to the origination and servicing of the  Mortgage Loan by the Seller or originator (including the collection and servicing  practices of any servicer of such Mortgage Loan) have been complied with, the  consummation of the transactions contemplated hereby will not involve the  

 

   Exhibit H-3    violation of any such laws or regulations. Each Mortgage Loan, at the time it was  made, complied in all material respects with applicable local, state, and federal  laws, including, but not limited to, all applicable predatory and abusive lending  laws. The origination and servicing of each Mortgage Loan complies in all material  respects with all then-applicable federal, state and local laws. The transfer of such  Mortgage Loan pursuant to this Agreement complies with all Applicable Laws.  There are no illegal activities or activities relating to any controlled substances at  the Mortgaged Property. The Mortgage Loan is not classified as a “High Cost  Mortgage Loan” pursuant to the Truth in Lending Act or any other Applicable Law.    (l) Regarding the Mortgagor. Each Mortgagor is either ( i )  a natural person that is  either a citizen or lawful permanent resident of the of United States or (ii) a limited  liability company, limited partnership, corporation or other form of legal entity  formed in one of the fifty states o r  the  Dis t r i c t  o f  Columbia  and has been  personally guaranteed by the Person who controls such entity, which person is  either a citizen or lawful permanent resident of the of United States. No Mortgagor  or the guarantor thereof was at the time the Mortgage Loan was originated or has  been since the time the Mortgage Loan was originated, a debtor in any state or federal  bankruptcy or insolvency proceeding. No Mortgagor or the guarantor thereof, has  had a prior bankruptcy in the four years, and neither has previously owned a  property in the last three years that was the subject of a foreclosure or which  title to the real property was conveyed to the originator or a deed in lieu of  foreclosure during the time the Mortgagor or guarantor was the owner of record.    (m) Down Payment. For each Mortgage Loan whose proceeds were used to purchase  the related Mortgaged Property, the Mortgagor paid or obtained at least [***] of the  Purchase Price without the assistance of Seller.    (n) Ownership. The Seller is the sole owner of record and holder of the Mortgage  Loan and the indebtedness evidenced by the Mortgage Note. The Mortgage Loan,  including the Mortgage Note and the Mortgage, are not assigned or pledged by the  Seller and the Seller has good and marketable title thereto, and the Seller has full  right to transfer, sell and assign the Mortgage Loan to the Administrative Agent  free and clear of any encumbrance, participation interest, lien, equity, pledge,  claim, charge or security interest and has full right and authority subject to no  interest or participation in, or agreement with any other party to sell or otherwise  transfer the Mortgage Loan.      (o) Valid First Liens. The Mortgage is a valid, existing, perfected and enforceable  first lien on the Mortgaged Property, including all improvements on the  Mortgaged Property. Each Mortgaged Property is free and clear of all adverse  claims, liens and encumbrances having priority over the lien of the Mortgage,  subject only to (A) the lien of current real property taxes and assessments not yet  due and payable, (B) covenants, conditions and restrictions, rights of way,  easements, mineral right reservations and other matters of public record as of the date  of recording of such Mortgage acceptable to mortgage lending institutions in the  

 

   Exhibit H-4    area in which the Mortgaged Property is located and specifically referred to in the  mortgagee’s policy of title insurance (or pro forma), and (C) other matters to which  like properties are commonly subject which do not individually or in the aggregate,  materially interfere with the benefits of the security intended to be provided by the  Mortgage (the foregoing items (A) through (C) together “Permitted  Encumbrances”). Any security agreement, chattel mortgage or equivalent document  related to and delivered in connection with the Mortgage Loan establishes and  creates a valid, existing and enforceable first-lien and first priority security interest  with respect to each Mortgage Loan on the property described therein.    (p) Mortgage Loan File. With respect to each Mortgage Loan (other than Wet  Mortgage Loans), the Seller is in possession of a complete Mortgage Loan File  except for the documents which have been delivered to the Custodian or which  have been submitted for recording and not yet returned or other documents noted  by the Seller to Administrative Agent which are not yet received, and the Mortgage  Note, the Mortgage, the Assignment of Mortgage and the other Mortgage Loan  Documents hereto required to be delivered on or before the related Purchase Date  have been delivered in compliance with the specific requirements of this  Agreement. Other than in the case of a Wet Mortgage Loan, each of the documents  and instruments specified to be included therein in the Mortgage Loan File is duly  executed and in due and proper form, and each such document or instrument is in  form acceptable to the applicable federal or state regulatory agency at the time of  origination of the Mortgage Loan.    (q) No Satisfaction. The Mortgage has not been waived, modified, altered, satisfied,  impaired, canceled, subordinated or rescinded, in whole or in part, and the  Mortgaged Property has not been released from the lien of the Mortgage, in  whole or in part, in any manner which materially interferes with the security  intended to be provided by such Mortgage or the use or operation of the remaining  portion of such Mortgaged Property nor has any instrument been executed that  would affect any such waiver, modification, alteration, satisfaction, impairment,  cancelation, subordination or rescission. The Seller has not 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 the Seller  waived any default resulting from any action or inaction by the Mortgagor    (r) No Outstanding Charges. There are no defaults by the Seller in complying with the  terms of the Mortgage. All taxes, ground rents, common charges, if applicable,  governmental assessments, insurance premiums, leasehold payments, and water,  sewer and municipal charges, homeowners association dues that would be a lien  on any Mortgaged Property that would be of equal or superior priority to the lien of  the Mortgage and that prior to the related date of origination have become  delinquent in respect of such Mortgaged Property have been paid, or escrow funds  have been established, to the extent permitted by law, 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. The Seller has not advanced funds, or induced,  

 

   Exhibit H-5    solicited or knowingly received any advance from any party other than the  Mortgagor, directly or indirectly, for the payment of any amount due under the  Mortgage Loan. For purposes of this representation and warranty, governmental  assessments, other outstanding governmental charges, homeowner association dues  and fees and installments thereof shall not be considered delinquent until the earlier  of (i) the date on which interest and/or penalties would first be payable thereon and  (ii) the date on which enforcement action is entitled to be taken by the related  taxing authority or homeowner association.    (s) Mortgaged Property Undamaged; No Condemnation Proceedings. There is no  proceeding pending or threatened for the total or partial condemnation of the  Mortgaged Property. Except to the extent that such Mortgage Loan is being made  in connection with a project to repair damage (as reflected on the proposed scope of  work), the Mortgaged Property is in reasonably good repair.     (t) No Mechanics’ or other Liens. There are no mechanics’, materialmen’s or similar  liens or claims filed for work, labor or material (and no rights are outstanding that  under law could give rise to such lien) affecting the related Mortgaged Property  which are or may be liens prior to, or equal or coordinate with, the lien of the  related Mortgage.    (u) Location of Improvements; No Encroachments. The Mortgaged Property consists  of a fee simple estate in real property. Except for encroachments that (i) do not  materially and adversely affect the current marketability or principal use of the  Mortgaged Property, or (ii) are intended to be remedied by the Mortgagor as part of  its improvement or rehabilitation of the Mortgaged Property, all material  improvements that were included for the purpose of determining the Appraised  Value of the related Mortgaged Property at the time of the origination of such  Mortgage Loan are within the boundaries of the related Mortgaged Property. No  improvements on adjoining properties encroach upon the Mortgaged Property  except those which are insured against by the title insurance policy. The Mortgaged  Property and all improvements on the Mortgaged Property comply in all material  respects with all applicable zoning, building laws, subdivision laws and ordinances.  The Seller has not received notice from the Mortgagor, any Governmental  Authority, or any other Person of any noncompliance with any use or occupancy  law, ordinance, regulation, standard, license, or certificate with respect to the  Mortgaged Property.    (v) Delinquency. Such Mortgage Loan is not [***] or more delinquent as of the related  Purchase Date and is not [***] or more delinquent at any time. All delinquency  figures are calculated and reported using the Mortgage Bankers Association (MBA)  methodology.    (w) Validity of Mortgage Documents. Each related Mortgage Note, Mortgage and any  other agreement executed and deliver by Mortgagor or guarantor thereof, if  applicable, in connection with a Mortgage Loan are original and genuine and each  

 

   Exhibit H-6    is the legal, valid and binding obligation the related Mortgagor, guarantor or other  obligor (subject to any non-recourse provisions contained in any of the foregoing  agreements and any applicable state anti-deficiency or market value limit  deficiency legislation), as applicable, and is enforceable in accordance with its  terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency,  fraudulent transfer, reorganization, moratorium or other similar laws affecting the  enforcement of creditors’ rights generally and (b) general principles of equity  (regardless of whether such enforcement is considered in a proceeding in equity or  at law) and (ii) that certain provisions in such Mortgage Loan Documents  (including, without limitation, provisions requiring the payment of default interest,  late fees or prepayment/yield maintenance fees, charges and/or premiums) are, or  may be, further limited or rendered unenforceable by or under Applicable Law, but  (subject to the limitations set forth in clause (i) above) such limitations or  unenforceability will not render such Mortgage Loan Documents invalid as a whole  or interfere with the mortgagee’s realization of the principal benefits and/or security  provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”),  and the Seller has taken all action necessary to transfer such rights of enforceability  to the Administrative Agent Subject to the Standard Qualifications, there is no valid  offset, defense, counterclaim or right of rescission available to the related Mortgage  or Mortgage Note, including, without limitation, any such valid offset, defense or  counterclaim by any Seller or originator in connection with the origination of the  Mortgage Loan, that would deny the mortgagee the principal benefits intended to  be provided by the Mortgage Note, Mortgage or Mortgage Note. 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, and the  Mortgage Note and the Mortgage have been duly and properly executed by such  parties.    (x) Full Disbursement of Proceeds. Except with respect to Limited Interest Loans and  Revolving Rebuild BPL Loans, (i) the proceeds of each Mortgage Loan have been  fully disbursed to or for the account of the related Mortgagor and (ii) there is no  requirement for future advances thereunder. All costs, fees and expenses incurred in  making and closing each Mortgage Loan and the recording of the related Mortgage  have been paid. The related Mortgagor is not entitled to any refund of any amounts  paid or due to the related Mortgagee pursuant to the related Mortgage Note,  Mortgage or any other related Mortgage Loan Document.    (y) Insurance Requirements. With respect to any insurance policy including, but not  limited to, hazard, title, or mortgage insurance, covering a Mortgage Loan and/or  the related Mortgaged Property, (A) such policy (i) is a valid, binding and  enforceable obligation of the Insurer and is in full force and effect and will inure to  the benefit of the Administrative Agent upon the consummation of the  transactions contemplated by this Agreement, and (ii) contains a standard  mortgagee clause naming the Seller, its successors, and its assigns as mortgagee, (B)  none of the Mortgagor, the originator nor any prior holder has engaged in any act or  omission which would impair the coverage of any such policy, the benefits of the  

 

   Exhibit H-7    endorsement, or the validity and binding effect of either, including without  limitation, no unlawful fee, commission, kickback or other unlawful compensation  or value of any kind has been or will be received, retained or realized by any  attorney, firm or other person or entity, and no such unlawful items have been  received, retained or realized by the originator, (C) all premiums due thereunder  have been paid, and (D) all provisions are being complied with and no action,  inaction, or event has occurred and no state of facts exists or has existed that has  resulted or will result in the exclusion from, denial of, or defense to coverage  under any such policy, irrespective of the cause of such failure of coverage.  Where required by state law or regulation, the Mortgagor has been given the  opportunity to choose the carrier of the required insurance.    (z) Title Insurance. The Mortgage Loan is covered by either (i) an irrevocable title  commitment, or an attorney’s opinion of title and abstract of title, each of which  must be in form and substance acceptable to prudent mortgage lending institutions  making mortgage loans in the area wherein the Mortgaged Property is located or  (ii) an ALTA lender’s title insurance policy or other generally acceptable form of  policy or insurance acceptable to the Administrative Agent and each such title  insurance policy is issued by a title insurer that is qualified to do business in the  jurisdiction where the Mortgaged Property is located, insuring, subject only to  exceptions acceptable to prudent lending institutions in the jurisdiction in which the  Mortgaged Property is located at the time of origination of the Mortgage Loan,  Seller, its successors and assigns, as to the first priority lien of the Mortgage in the  original principal amount of the Mortgage Loan, subject only to the Permitted  Encumbrances.  Additionally, such lender’s title insurance policy affirmatively  insures ingress and egress and against encroachments by or upon the Mortgaged  Property or any interest therein.  The Seller, its successors and assigns, are the sole  insureds of such lender’s title insurance policy, and such lender’s title insurance  policy is valid and remains in force and effect.  No claims have been made under  such lender’s title insurance policy.    (aa) Hazard Insurance. All buildings on the Mortgaged Property are insured against loss  by fire and such hazards as are covered under a standard extended coverage  endorsement in an amount which is not less than the lesser of (i) the full insurable  value of the Mortgaged Property as established by the property insurer and (ii) the  outstanding principal balance of the Mortgage Loan on the date of origination.  If  the Mortgaged Property is a condominium unit, it may be included under the  coverage afforded by a blanket policy.  If the improvements on the Mortgaged  Property are in an area identified in the Federal Register by FEMA as having  special flood hazards (specifically zones labeled as “A” or “V,” including all sub- codes that start with either of these letters), provided that such flood insurance has  been made available, then a flood insurance policy meeting the requirements of the  current guidelines of the Federal Insurance Administration is in effect with a  generally acceptable insurance carrier.  Such flood insurance policy is in an amount  representing coverage not less than the lesser of (A) the outstanding principal  balance of the Mortgage Loan on the date of origination, (B) the appraised value  

 

   Exhibit H-8    plus the insurable value of the improvements to the related Mortgaged Property on  the date of origination and (C) the maximum amount of insurance which is  available under the National Flood Insurance Act of 1968, as amended by the Flood  Disaster Protection Act of 1973.  If the Mortgaged Property is a condominium, it  may be included under the flood coverage afforded by a blanket policy.  All  individual insurance policies contain a standard mortgagee clause naming the Seller  and its successors and assigns as mortgagee, and all currently due premiums on  such insurance policy thereon have been paid.  The Mortgage obligates the  Mortgagor thereunder to maintain a hazard insurance policy at the Mortgagor’s cost  and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the  Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and  expense, and to seek reimbursement therefor from the Mortgagor.  Each such  insurance policy is the valid and binding obligation of the insurer, is in full force  and effect.    (bb) No Default. There is no material default, breach, violation or event of acceleration  existing under the Mortgage, the Mortgage Note or any other related Mortgage  Loan Document and no event, other than payments due but not yet delinquent,  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 no default, breach, violation or event permitting acceleration  under the Mortgage Note or any other related Mortgage Loan Document has been  waived. No foreclosure action is currently threatened or has been commenced with  respect to any Mortgaged Property.    (cc) No Defenses. No Mortgage Note or Mortgage is subject to any right of any  compromise, adjustment, extension, satisfaction, subordination, rescission, setoff,  counterclaim, abatement, suspension, deferment, deduction, reduction, termination,  modification or defense, including, without limitation, the defense of usury, nor  will the operation of any of the terms of the Mortgage Note and the Mortgage, or  the exercise of any right thereunder, render either the Mortgage Note or the  Mortgage unenforceable, in whole or in part, or subject to any right of compromise,  adjustment, extension, satisfaction, subordination, rescission, setoff, counterclaim,  abatement, suspension, deferment, deduction, reduction, termination, modification  or defense, including, without limitation, the defense of usury, and no such right of  rescission, set-off, counterclaim or defense has been asserted with respect thereto.    (dd) Customary Provisions. The Mortgage and related Mortgage Note contain  customary and enforceable provisions such as to render the rights and remedies of  the holder thereof adequate for the practical realization against the related  Mortgaged Property of the principal benefits of the security intended to be provided  thereby, including realization by judicial or, if applicable, non-judicial foreclosure,  subject to the limitations set forth in the Standard Qualifications. There is no title or  other exemption or other right available to the Mortgagor or any other Person, or  restriction on the Seller or any other Person, including, without limitation, any  federal, state or local, law, ordinance, decree, regulation, guidance, attorney general  

 

   Exhibit H-9    action, or other pronouncement, whether temporary or permanent in nature, that  would interfere with, restrict or delay, either (y) the ability of the Seller,  Administrative Agent or any servicer or any successor servicer to sell the related  Mortgaged Property at a trustee’s sale or otherwise, or (z) the ability of the Seller,  Administrative Agent or any servicer or any successor servicer to foreclose on the  related Mortgage. No third party holds any “right of first refusal”, “right of first  negotiation”, “right of first offer”, purchase option, or other similar rights of any  kind, and no other impediment exists to any such transfer or exercise of rights or  remedies.    (ee) Location and Type of Mortgaged Property. Each Mortgaged Property is located in  the United States in the state identified in the applicable Mortgage Loan Schedule  and consists of (i) a detached one-family dwelling, (ii) a detached two- to four- family dwelling, (iii) an individual condominium unit, (iv) a multi-family dwelling  (5-30  units), (v) a one-family dwelling in a planned unit development or (vi) a  ground up construction project of any dwelling defined in clauses (i) through (v) or  “tear down” and rebuild project of any dwelling defined in clauses (i) through (v).    (ff) Origination. The Seller and all other parties which have had any interest in the  Mortgage Loan on or prior to the related Purchase Date, whether as mortgagee,  assignee, pledgee or otherwise, are (and, during the period in which they held and  disposed of such interest, were) in compliance with any and all applicable “doing  business”, licensing, or other requirements of the laws of the state wherein the  Mortgaged Property is located.    (gg) Payment Terms. No Mortgage Note permits negative amortization. No Mortgage  Loan has a shared appreciation or other contingent interest feature or any  “buydown” provision currently in effect.    (hh) Environmental Matters. There is no pending action or proceeding directly involving  any Mortgaged Property in which compliance with any environmental law, rule or  regulation is an issue 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.    (ii) Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, duly  qualified under Applicable Law to serve as such, has been properly designated and  currently so serves and is named in the Mortgage, and no fees or expenses 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 after default by the  Mortgagor.    (jj) Original Terms Unmodified. Unless approved by Administrative Agent in writing,  since the date of origination and except by written instruments set forth in the  related mortgage file or as otherwise provided in the Mortgage Loan Documents,  (a) the material terms of such Mortgage, Mortgage Note, guaranty, and related  

 

   Exhibit H-10    Mortgage Loan Documents have not been waived, impaired, modified, altered,  satisfied, canceled, subordinated or rescinded in any respect; (b) no related  Mortgaged Property or any portion thereof has been released from the lien of the  related Mortgage in any manner which materially interferes with the security  intended to be provided by such Mortgage or the use or operation of the remaining  portion of such Mortgaged Property; and (c) none of the related Mortgagor, the  related guarantor or any other obligor on the Mortgage Loan has been released from  its material obligations under the Mortgage Loan.     (kk) Due on Sale. The Mortgage Loan Documents for each Mortgage Loan contain an  enforceable provision for the acceleration of the payment of the principal balance  of the Mortgage Loan in the event that the Mortgaged Property is sold or  transferred without the prior written consent of the mortgagee thereunder.    (ll) No Additional Collateral. The Mortgage Note is not and has not been secured by  any collateral except the lien of the corresponding Mortgage on the Mortgaged  Property and the security interest of any applicable security agreement or chattel  mortgage. No Mortgage Loan is cross-collateralized with more than one property as  long as each property is part of the Mortgaged Property in the corresponding  Mortgage Note or cross-defaulted with any loan outside of this Agreement. To the  extent the equity in any Mortgagor has been pledged pursuant to an equity pledge  agreement, the applicable Seller’s interest in any such equity pledge agreement has  been assigned as additional collateral pursuant to this Agreement.    (mm) Transfer of Mortgage Loans. 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. Each original Mortgage was recorded and all  subsequent assignments of the original Mortgage (other than the assignment to the  Administrative Agent) have been recorded in the appropriate jurisdictions wherein  such recordation is necessary to perfect the lien thereof as against creditors of the  Seller or is in the process of being recorded.    (nn) Consolidation of Additional Draw Amounts. Any future advances made by the  Seller prior to the related Purchase Date have been consolidated with the  outstanding principal amount secured by the Mortgage, and the secured principal  amount, as consolidated, bears a single interest rate and single repayment term. The  lien of the Mortgage securing the consolidated principal amount is expressly  insured as having first-lien priority by a title insurance policy, an endorsement to  the policy insuring the mortgagee’s consolidated interest or by other title evidence.  The consolidated principal amount does not exceed the original principal amount of  the Mortgage Loan.    (oo) Adverse Selection. The Seller used no adverse selection procedures in selecting the  Mortgage Loan from among the outstanding residential mortgage loans owned by it  that were originated pursuant to the Underwriting Guidelines which were available  for inclusion in the Mortgage Loans.  

 

   Exhibit H-11      (pp) Servicemembers’ Civil Relief Act. The Mortgagor has not notified the Seller, and  there is no relief requested or allowed to the Mortgagor under the Servicemembers’  Civil Relief Act, or other similar state statutes.    (qq) Escrow Payments. Each Mortgage Loan was originated by Seller in the ordinary  course of Seller’s business. With respect to escrow deposits and payments that the  Seller or its servicer is entitled to collect, all such payments are in the possession of,  or under the control of the Seller or its servicer and there exist no deficiencies in  connection therewith for which customary arrangements for repayment thereof  have not been made and identified as such with appropriate detail. All escrow  payments have been collected in full compliance with state and federal law and the  provisions of the related Mortgage Note and Mortgage. As to any Mortgage Loan  that is the subject of an escrow, escrow of funds is not prohibited by Applicable  Law and has been established in an amount sufficient to pay for every escrowed  item that remains unpaid and has been assessed but is not yet due and payable. No  escrow deposits or other charges or payments due under the Mortgage Note have  been capitalized under any Mortgage or the related Mortgage Note.    (rr) Anti-Money Laundering Laws. The Seller has complied with all applicable anti- money laundering laws and regulations, including without limitation the USA  Patriot Act of 2001 and the Corporate Transparency Act (individually and  collectively, the “Anti-Money Laundering Laws”). To the extent required by law,  the Seller has established an anti-money laundering compliance program as  required by the Anti-Money Laundering Laws, has conducted the requisite due  diligence in connection with the origination of each Mortgage Loan for purposes of  the Anti-Money Laundering Laws, including with respect to the legitimacy of the  applicable Mortgagor and the origin of the assets used by the said Mortgagor to  purchase the property in question, and maintains, and will maintain, sufficient  information to identify the applicable Mortgagor for purposes of the Anti-Money  Laundering Laws. As of the related Purchase Date, no Mortgage Loan was subject  to nullification pursuant to Executive Order 13224 (the “Executive Order”) or the  regulations promulgated by the Office of Foreign Assets Control of the United  States Department of the Treasury (the “OFAC Regulations”) or in violation of the  Executive Order or the OFAC Regulations, and no Mortgagor was subject to the  provisions of such Executive Order or the OFAC Regulations nor listed as a  “blocked person” for purposes of the OFAC Regulations.    (ss) Tax Identification/Back Up Withholding. All tax identifications for individual  Mortgagors have been certified as required by law. Seller has complied with all IRS  requirements regarding the obtainment and solicitation of taxpayer identification  numbers and the taxpayer identification numbers provided to Administrative Agent  as reflected on the Mortgage Loan Schedule are correct.    (tt) No Litigation. To the knowledge of the Seller, there was no pending action, suit or  proceeding, or governmental investigation involving the Mortgage Loan or the  

 

   Exhibit H-12    related Mortgaged Property, an adverse outcome of which would reasonably be  expected to adversely affect the validity or enforceability of the related Mortgage  Note and Mortgage.    (uu) Licensing Requirements. All parties that have had any interest in such Mortgage  Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the  period in which they held and disposed of such interest, were) in compliance with  any and all applicable licensing requirements of the laws of the state wherein the  related Mortgaged Property is located, except to the extent that failure to be so  licensed would not give rise to any claim against the Mortgage Loan or otherwise  adversely affect the enforceability of the Mortgage Loan.    (vv) Whole Loan. Each Mortgage Loan is a whole loan and not a participation interest in  a Mortgage Loan.    (ww) Access; Utilities; Separate Tax Lots. Each Mortgaged Property (a) is located on  or adjacent to a public road and has direct legal access to such road, or has access  via an irrevocable easement or irrevocable right of way permitting ingress and  egress to/from a public road, (b) is served by or has uninhibited access rights to  public or private water and sewer (or well and septic) and electricity all of which  are appropriate for the current use of such Mortgaged Property, and (c) constitutes  one or more separate tax parcels which do not include any property which is not  part of such Mortgaged Property or is subject to an endorsement under the  related title policy insuring such Mortgaged Property.    (xx) Licenses and Permits. Each Mortgagor covenants in the Mortgage Loan Documents  that it shall keep all material licenses, permits and applicable governmental  authorizations necessary for its operation of each related Mortgaged Property in full  force and effect, and all such material licenses, permits and applicable  governmental authorizations are in effect. The Seller is not aware of any  Mortgagor, guarantor or other obligor on any Mortgage Loan having received  notice of any noncompliance with any use or occupancy law, ordinance, regulation,  standard, license or certificate with respect to any Mortgaged Property.    (yy) Mortgage Releases. The terms of the related Mortgage or related Mortgage Loan  Documents do not provide for the release of any related Mortgaged Property from  the lien of the Mortgage except (a) a release accompanied by principal repayment  of not less than [***] of the related allocated loan amount of such Mortgaged  Property, (b) upon payment in full of such Mortgage Loan or (c) as required  pursuant to an order of condemnation or a material casualty.    (zz) Recourse Obligations. Unless disclosed to Administrative Agent on a schedule  attached to the Mortgage Loan Schedule, the Mortgage Loan Documents for each  Mortgage Loan provide that such Mortgage Loan is either (a) full recourse against  the related Mortgagor and/or natural person or (b) non-recourse to the related  parties thereto except that, with respect to clause (b): (i) the related Mortgagor and  

 

   Exhibit H-13    at least one individual or entity shall be fully liable for actual losses, liabilities,  costs and damages arising from certain acts of the related Mortgagor and/or its  principals specified in the related loan documents, which acts generally include the  following: (1) acts of fraud or intentional material misrepresentation, (2)  misapplication or misappropriation of rents, insurance proceeds or condemnation  awards, (3) intentional material physical waste of any related Mortgaged Property,  and (4) any breach of the environmental covenants contained in the related loan  documents, and (ii) the Mortgage Loan shall become full recourse to the related  Mortgagor and at least one individual or entity, if the related Mortgagor files a  voluntary petition under federal or state bankruptcy or insolvency law.    (aaa) Limited Interest Loans. With respect to each Limited Interest Loan or Revolving  Rebuild BPL Loan, (i) the related Mortgagor is entitled pursuant to the Mortgage  Loan Documents to request advances up to the amount of the Maximum Loan  Balance as set forth in the related Mortgage Loan Documents and (ii) the Seller  shall disburse all such amounts in accordance with the terms of the related  Mortgage Loan Documents and Applicable Law.    (bbb) UCC Filings: To the extent required under the Mortgage Loan Documents, Seller  has recorded or caused to be recorded (or, if not recorded, have been submitted in  proper form for recording), UCC financing statements in the appropriate public  recording offices necessary to perfect a valid security interest in any collateral for  such Mortgage Loan to the extent perfection may be effected pursuant to  Applicable Law by recording, as the case may be. Each related Mortgage (or  equivalent document) or other related collateral document creates a valid and  enforceable lien and security interest on the items of personalty described above  that may be perfected by recording.    (ccc) Payments Current. As of the related Purchase Date, such Mortgage Loan is not  delinquent in payment by more than [***] and no payment with respect to such  Mortgage Loan has been [***] or more delinquent since the origination of such  Mortgage Loan. Such Mortgage Loan is not delinquent in payment by more than  [***] at any time.    (ddd) Third-Party Sales. With respect to each Mortgage Loan purchased by Seller from a  third-party, (a) such Mortgage Loan was acquired and transferred pursuant to a  purchase agreement, (b) such third-party received reasonably equivalent value in  consideration for the transfer of such Mortgage Loan, (c) no such transfer was  made for or on account of an antecedent debt owed by such third-party to Seller or  an Affiliate of Seller and, (d) no such transfer is or may be voidable or subject to  avoidance under the Bankruptcy Code.  

 

   Exhibit I-1  Error! No document variable supplied.  EXHIBIT I  MORTGAGE LOAN DOCUMENTS  Mortgage Loan File:  With respect to each Mortgage Loan, the following documents that are  delivered to Flagstar Bank, FSB, as Custodian or which at any time come into the possession of Flagstar  Bank, FSB, as Custodian:  (pp) the original Mortgage Note bearing a complete chain of  endorsements from the  originator to Seller and further endorsed “pay to the order of                  , without  recourse” and signed in the name of Seller;   (qq) the original Mortgage with evidence of recording thereon or a copy certified by Seller;  (rr) the originals of intervening assignments of mortgage with evidence of recording thereon  or copies certified by Seller which evidence a complete chain from the originator of the  Mortgage to Seller;   (ss) the original Assignment of Mortgage conveying the related Mortgage from Seller in the  favor of  “__________”, to be in form and substance acceptable for recording;  (tt) the original of any guarantee in connection with the Mortgage Note (if any);  (uu) the originals of any assumption, modification, consolidation or extension agreements,  with evidence of recording thereon, or copies thereof certified by Seller, if any; and  (g) the original or copy of the mortgagee title insurance policy or a copy of the preliminary  title commitment showing the policy number or preliminary attorney’s opinion of title.  With respect to any documents which have been delivered or are being delivered to recording offices for  recording and have not been returned to the Seller in time to permit their delivery hereunder at the time  required to the extent that the related Mortgage Loan has not been repurchased by the Seller, in lieu of  delivering such original documents, the Seller shall deliver to the Custodian a true copy thereof certified  by the Seller, title company, escrow agent or closing attorney stating that such copy is a true, correct and  complete copy of the original, which has been transmitted for recordation.  The Seller shall deliver such  original documents to the Custodian promptly when they are received.  

 

   Exhibit J-1  Error! No document variable supplied.    EXHIBIT J  FORM OF REQUEST FOR TEMPORARY INCREASE  Flagstar Bank FSB  [●]  Attention: [●]  Email: [●]  Re:  Master Repurchase Agreement, dated as of August 1, 2022 (the “Agreement”), by and  among Grapetree Lending LLC, as seller (the “Seller”), Altisource Asset Management  Corporation (the “Guarantor”), Flagstar Bank FSB, as administrative agent (in such capacity,  the “Administrative Agent”) and as a buyer (in such capacity, the “Flagstar Buyer”) and each  other Buyer from time to time party thereto (collectively with Flagstar Buyer, the “Buyers”)  Ladies and Gentlemen  In accordance with Section 2.9 of the Agreement, Administrative Agent, on behalf of Buyers, hereby  consents to a Temporary Increase of the Aggregate Transaction Limit as further set forth below:  Amount of Temporary Increase: $                                            .  Effective date and time: [dd/mm/yyyy at ___:___ _.m.]  Termination date and time: [dd/mm/yyyy at ___:___ _.m.]  On and after the effective date and time indicated above and until the termination date and time indicated  above, the Aggregate Transaction Limit shall equal the Temporary Aggregate Transaction Limit indicated  above for all purposes of the Agreement and all calculations and provisions relating to the Aggregate  Transaction Limit shall refer to the Temporary Aggregate Transaction Limit including without limitation,  Type Sublimits.  Unless otherwise terminated pursuant to the Agreement, this Temporary Increase shall  terminate on the termination date and time indicated above.  Upon the termination of this Temporary  Increase, Seller shall repurchase Purchased Assets such that (i) the Aggregate Outstanding Purchase Price  does not exceed the Aggregate Transaction Limit and (ii) the applicable portion of the Aggregate  Outstanding Purchase Price does not exceed any Type Sublimit.  Seller shall repurchase Purchased Assets  in order to reduce the Aggregate Outstanding Purchase Price to the Aggregate Transaction Limit (as  reduced by the termination of such Temporary Increase) in accordance with Section 4.2(e) of the  Agreement.  All terms used herein and not otherwise defined herein shall have the respective meanings ascribed to  such terms in the Agreement.   

 

   Exhibit J-2  Error! No document variable supplied.  GRAPETREE LENDING LLC  By:                                                                                Name:  Title:   Agreed and Consented by:  FLAGSTAR BANK FSB, Administrative Agent  By: _______________________________________   Name:  Title:  Date: ________________    

 

  Exhibit K-1  Error! No document variable supplied.  EXHIBIT K  RESERVED   

 

  Exhibit L-1  Error! No document variable supplied.  EXHIBIT L  FORM OF OFFICER’S CERTIFICATE  Reference is made to that certain Master Repurchase Agreement dated on or about the date hereof (as  amended from time to time, the “Repurchase Agreement”) by and among GRAPETREE LENDING  LLC, a US Virgin Islands corporation (the “Company”), ALTISOURCE ASSET MANAGEMENT  CORPORATION, a US Virgin Islands corporation (the “Guarantor”), FLAGSTAR BANK FSB, a  federally chartered savings bank (together with its successors and/or assigns, the “Administrative Agent”)  and each other buyers from time to time party thereto.  The undersigned is the duly elected, qualified and acting [●] [insert title] of the Company and hereby  certifies to the Buyer as follows:  1. Attached hereto as Exhibit A is a true and correct copy of the articles of incorporation of the  Company (and all amendments thereto), as certified by the [●] Secretary of State, which have not  been further amended and are in full force and effect on the date hereof.  2. Attached hereto as Exhibit B is a true and correct copy of the bylaws of the Company, which  have not been amended or otherwise modified, rescinded or repealed and are in full force and  effect on the date hereof.  3. Attached hereto as Exhibit C is a true and correct copy of certain resolutions duly adopted by the  board of directors of the Company by unanimous written consent dated as of [●] [date of  resolutions], which resolutions have not been amended or otherwise modified, rescinded or  repealed and are in full force and effect on the date hereof.   4. The persons whose names are set forth below are each duly elected officers of the Company as of  the date hereof, and the signatures set forth opposite their names are their true and genuine  signatures.   Printed Name   Office   Signature  _____________________ [President]         _____________________ [Vice President]        5. As of the date hereof:  (a) all representations and warranties of the Company made in the  Repurchase Agreement are correct in all material respects; (b) the Company is in compliance with  all covenants applicable to it under the Repurchase Agreement; and (c) no Event of Default (as  defined in the Repurchase Agreement) has occurred and is continuing and no event has occurred  which would constitute an Event of Default but for the requirement that notice be given or time  elapse or both.  6. The Seller may conclusively rely on the statements made in this Certificate until the Seller shall  receive a further secretary’s certificate canceling or amending this Certificate and submitting  signatures of the directors and /or officers named in such further certificate.   

 

  Exhibit L-2  Error! No document variable supplied.  IN WITNESS WHEREOF, the undersigned has duly executed this Certificate as of the date set  forth below.  Date:  _______________, 20[●]           (Signature)              (Printed name and title)    The undersigned is the ________________________ [title of officer covered by the incumbency  certification in paragraph 4] and hereby certifies that ________________________ [name of officer  executing certificate] is, on the date hereof, the duly elected, qualified, and acting __________________  [title of officer executing certificate] of the Company and that the signature appearing over his / her name  above is his / her true and genuine signature.  IN WITNESS WHEREOF, the undersigned has duly executed this Certificate as of the date set  forth below.  Date:  ____________, 20[●]            (Signature)              (Printed name and title)  

 

   Exhibit M-1  Error! No document variable supplied.  EXHIBIT M  FORM OF RESOLUTIONS ADOPTED BY UNANIMOUS WRITTEN CONSENT  Effective Date:  August 1, 2022  1. The undersigned, being all of the directors of GRAPETREE LENDING LLC, a US Virgin  Islands corporation (the “Company”), hereby consent to the adoption of the following  resolutions:      RESOLVED: That the Company be, and hereby is, authorized and directed to enter into a  master repurchase agreement (the “Agreement”) with Flagstar Bank FSB, a  federal savings bank, as a buyer, and as administrative agent on behalf of the  buyers from time to time (together with its successors and/or assigns, the  “Administrative Agent”), and Altisource Asset Management Corporation, a  U.S. Virgin Islands corporation, as the guarantor (the “Guarantor”);  RESOLVED: That the undersigned have determined that the execution, delivery and  performance of the Transaction Documents (as defined below) by the Company  are necessary and convenient to the conduct, promotion, and attainment of the  businesses of the Company;  RESOLVED: That to secure payment and performance by the Company of its obligations  with respect to the Agreement, the Company be, and hereby is, authorized and  directed to grant to the Administrative Agent a security interest in certain of the  Company’s collateral (whether now owned or hereafter acquired) as described  in the Transactional Documents;  RESOLVED: That, to evidence and secure the above-described obligations, the Company be,  and hereby is, authorized and directed to execute and deliver: (a) that certain  Master Repurchase Agreement, dated as of August 1, 2022, among the  Company, as seller, Altisource Asset Management Corporation, as guarantor,  and Administrative Agent; (b); that certain Transactions Terms Letter, dated as  of August 1, 2022, by and among the Company, as seller and the Administrative  Agent; (c) that certain Servicer Notice and Agreement, dated as of August 1,  2022, by and among the Company, as seller, FCI Lender Services, Inc., as  servicer, and Administrative Agent, on behalf of the buyers, (d) such  agreements as are deemed necessary or required by the Administrative Agent to  hedge all or any portion of the Company’s exposure to interest rate fluctuations  with respect to the above-described obligations; (e) all other agreements,  instruments, certificates and documents required by the Administrative Agent in  connection with the foregoing documents and the transactions contemplated  therein or determined to be necessary or convenient by an Authorized Officer  (as defined below) to perform or consummate the transactions contemplated by  the foregoing documents, such execution and delivery to be conclusive  evidence of such determination; and (f) any and all amendments or  modifications to any of the foregoing (the instruments, agreements, certificates  and other documents described in clauses (a) through (f) above, collectively, the  “Transaction Documents”);  

 

  Exhibit M-2  Error! No document variable supplied.  RESOLVED: That any officer of the Company (each, an “Authorized Officer”) be, and each  of them acting alone hereby is, authorized and directed, in the name and on  behalf of the Company to execute and deliver the Transaction Documents in  such form as any Authorized Officer may approve, and to take all such actions  that any Authorized Officer may determine to be necessary or appropriate to  carry out the intent of the foregoing resolutions, such execution and delivery or  the taking of any such action to be conclusive evidence of such approval or  determination, and all documents heretofore executed or delivered and all  actions heretofore taken by any Authorized Officer to carry out to intent of the  foregoing resolutions are hereby ratified, confirmed and approved.  RESOLVED: That any and all lawful actions of the Company or any Authorized Officer in  connection with the matters contemplated by the foregoing resolutions taken  prior to the date of adoption of this written consent be, and they hereby are,  approved, ratified and adopted in all respects as fully as if such lawful actions  has been presented to the officers for their approval prior to such lawful actions  being taken.    [Remainder of Page Intentionally Left Blank] 

 

  Exhibit M-3  Error! No document variable supplied.  This consent shall be filed with the records of the meetings of the [directors or shareholders] of  the Company, and the resolutions set forth herein shall be treated for all purposes as resolutions  adopted at duly called meeting of the same on the effective date set forth above.    By:           Name:          Its:              By:           Name:          Its:            By:           Name:          Its:                

 

   Exhibit N-1  Error! No document variable supplied.  EXHIBIT N  FORM OF EXHIBIT TO UCC-1 FINANCING STATEMENT  Debtor: Grapetree Lending LLC   [***]    Secured Party: Flagstar Bank FSB, as Administrative Agent  [***]    The UCC Financing Statement, Form UCC-1, to which this Exhibit A is attached and of which it  forms a part, is executed in connection with the Master Repurchase Agreement, dated as of August 1,  2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Repurchase  Agreement”), among Debtor, Secured Party, as administrative agent, Altisource Asset Management  Corporation, as guarantor (the “Guarantor”), Flagstar Bank FSB, as a buyer (in such capacity, the  “Flagstar Buyer”) and each of the buyers from time to time party thereto (collectively, with the Flagstar  Buyer, the “Buyers”), and covers all of the Debtor’s right, title and interest in, to and under the Purchased  Assets and the related Purchased Items.    SECURED PARTY AND DEBTOR INTEND THE TRANSACTIONS CONTEMPLATED  BY THE REPURCHASE AGREEMENT TO CONSTITUTE A SALE OF THE PURCHASED  ASSETS. THIS FILING SHOULD NOT BE CONSTRUED AS A CONCLUSION THAT A SALE  HAS NOT OCCURRED OR TO INDICATE THAT THIS FILING IS NECESSARY IF NOT  REQUIRED. IF A SALE HAS NOT OCCURRED, THIS FILING IS INTENDED TO PERFECT A  SECURITY INTEREST IN THE PURCHASED ASSETS IN ADDITION TO ANY PERFECTION  BY POSSESSION OF THE PURCHASED ASSETS OR OTHER MEANS.    All capitalized terms used herein and not otherwise defined shall have the meanings assigned to  such terms in the Repurchase Agreement. The following terms have the following meanings:    “Affiliate”: With reference to any Person:  (a) any other Person that directly or indirectly through one or more intermediaries controls, is  controlled by or is under common control with the specified Person,  (b) any other Person that is an officer, stockholder, member, or trustee of, or partner in, or  serves in a similar capacity with respect to, the specified Person or of which the specified Person is an  officer, shareholder, member, partner or trustee, or with respect to which the specified Person serves in a  similar capacity,  (c) any other Person that, directly or indirectly, is the beneficial owner of [***] or more of  any class of equity securities of, or otherwise has a beneficial interest equivalent to [***] or more  ownership interest in, the specified Person,  (d) a Person of which the specified Person is directly or indirectly the owner of [***] or more  of any class of equity securities or in which the specified Person has a beneficial interest equivalent to  [***] or more ownership interest, and  (e) for purposes of Sections 8.1(l), 9.10, 11.1(v), 11.1(w) and 11.1(x) of the Repurchase  Agreement (as it relates to any Plan), “Affiliate” instead means, within the meaning of Section 414(b),  

 

  Exhibit N-2    (c), (m) or (o) of the Code, (i) any member of a controlled group that includes Debtor or Guarantor, (ii)  any trade or business, whether or not incorporated, under common control with Debtor or Guarantor, and  (iii) any member of an affiliated service group that includes the Debtor.  “Applicable Pricing Rate”: As defined in the Repurchase Agreement.  “Approved Investor”: With respect to any Mortgage Loan, any Governmental Authority, Affiliate or  Debtor or Guarantor, or any other private institution, in each case, as approved by Secured Party, on  behalf of Buyers, in its reasonable discretion, purchasing such Purchased Mortgage Loans.  “Code”: The Internal Revenue Code of 1986, as amended.  “Collateral Account”: The account described in Section 6.2(i) of the Repurchase Agreement.  “Custodial Agreement”: The Custodial Agreement executed among Secured Party, Debtor and Custodian  with respect to the Repurchase Agreement, as the same shall be modified and supplemented and in effect  from time to time.   “Custodian”: Flagstar Bank FSB, any of its successors or permitted assigns, or any such other party  approved by Secured Party.  “Default Rate”: As defined in the Repurchase Agreement.  “Dry Mortgage Loan”: A Mortgage Loan for which Administrative Agent, on behalf of Buyers, or its  Custodian has possession of the related Mortgage Loan Documents, in a form and condition acceptable to  Administrative Agent, on behalf of Buyers, (which for the avoidance of doubt could be a Wet Mortgage  Loan on the related Purchase Date and convert to a Dry Mortgage Loan once all Mortgage Loan  Documents have been received by Administrative Agent, on behalf of Buyers, or its Custodian).   “Event of Default”: Any of the conditions or events set forth in Section 11.1 of the Repurchase  Agreement.  “Funding Account”: A non-interest bearing deposit account with Secured Party which shall be titled as  designated by Secured Party.  “Additional Draw Amounts”: With respect to each Limited Interest Loan and Revolving Rebuild BPL  Loan, an additional borrowing by the related Mortgagor in accordance with the Mortgage Loan  Documents.  “Governmental Authority”: With respect to any Person, any nation or government, any state or other  political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative,  judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator  having jurisdiction over such Person, any of its Subsidiaries or any of its properties.  “Guarantor”: Shall mean Altisource Asset Management Corporation.  “Income”: With respect to any Purchased Asset, all of the following (in each case with respect to the  entire par amount of the Purchased Mortgage Loan represented by such Purchased Asset and not just with  respect to the portion of the par amount represented by the Purchase Price paid against such Purchased  Mortgage Loan):  (a) all payments and prepayments of principal received and applied as principal in  connection with any Transaction for such Purchased Mortgage Loan, including insurance and  

 

  Exhibit N-3    condemnation proceeds and recoveries from liquidation or foreclosure, (b) all payments of interest,  income, receipts, dividends, and any other collections and distributions received from time to time in  connection with any such Purchased Mortgage Loan, (c) all other income, distributions, receipts,  payments, collections, prepayments, recoveries, proceeds (including insurance and condemnation  proceeds) and other payments or amounts of any kind paid, received, collected, recovered or distributed  on, in connection with or in respect of such Purchased Mortgage Loan, including prepayment fees,  extension fees, exit fees, any rental payments, if any, transfer fees, make whole fees, late charges, late  fees and all other fees or charges of any kind or nature, premiums, yield maintenance charges, penalties,  default interest, dividends, gains, receipts, allocations, rents, interests, profits, payments in kind, returns  or repayment of contributions, net sale, foreclosure, liquidation, securitization or other disposition  proceeds, insurance payments, settlements and proceeds, (d) all Mortgage Loan Sale Proceeds, (e) all  payments received from hedge counterparties pursuant to interest rate protection agreements related to  such Purchased Mortgage Loan; and (f) all other “proceeds” as defined in Section 9-102(64) of the UCC,  including all collections or distributions thereon or other income or receipts therefrom or in respect  thereof; provided, that any amounts that under the applicable Mortgage Loan Documents are required to  be deposited into and held in escrow or reserve to be used for a specific purpose, such as taxes and  insurance, shall not be included in the term “Income” unless and until (i) an event of default exists under  such Mortgage Loan Documents, (ii) the holder of the related Purchased Mortgage Loan has exercised or  is entitled to exercise rights and remedies with respect to such amounts, (iii) such amounts are no longer  required to be held for such purpose under such Mortgage Loan Documents, or (iv) such amounts may be  applied to all or a portion of the outstanding indebtedness under such Mortgage Loan Documents.  “Insurer”: A private mortgage insurer, which is acceptable to the Secured Party.   “Maximum Dwell Time”: As defined in the Repurchase Agreement.  “Mortgage”: A mortgage, deed of trust, security deed or similar instrument on improved real property  (including for the avoidance of doubt any proprietary lease or cooperative shares in connection with  cooperative loans).   “Mortgage Loan”: Any mortgage loan of a Type identified on any schedule attached to the Transactions  Terms Letter, which Mortgage Loan may be either a Dry Mortgage Loan or a Wet Mortgage Loan.  “Mortgage Loan Documents”: As defined in the Repurchase Agreement.  “Mortgage Loan File”: With respect to each Mortgage Loan, that file that contains the Mortgage Loan  Documents and is delivered to Custodian pursuant to the Repurchase Agreement or to the Custodial  Agreement, as applicable.  “Mortgage Loan Sale Proceeds”: The proceeds of any sale, securitization or other disposition of any of  the Purchased Assets.  “Mortgage Note”: A promissory note secured by a Mortgage and evidencing a Mortgage Loan.   “Mortgaged Property”: The real property (or other collateral relating to cooperative loans) securing  repayment of the debt evidenced by a Mortgage Note.  “Mortgagor”: The obligor of a Mortgage Loan.  “Other Mortgage Loan Documents”: In addition to the Mortgage Loan Documents, with respect to any  Mortgage Loan, and as applicable, the following: (a) the original recorded Mortgage, if not included in  

 

  Exhibit N-4    the Mortgage Loan Documents; (b) a copy of the preliminary title commitment showing the policy  number or preliminary attorney’s opinion of title and the original policy of mortgagee’s title insurance or  unexpired commitment for a policy of mortgagee’s title insurance, if not included in the Mortgage Loan  Documents; (c) the survey, flood certificate, hazard insurance policy and flood insurance policy, as  applicable; (d) the original of any assumption, modification, consolidation or extension agreements, with  evidence of recording thereon or copies stamp certified by an authorized officer of Debtor to have been  sent for recording, if any; (e) copies of each instrument necessary to complete identification of any  exception set forth in the exception schedule in the title policy; (f) the loan application; (g) verification of  the Mortgagor’s employment and income, if applicable; (h) verification of the source and amount of the  down payment; (i) credit report on Mortgagor; (j) appraisal of the Mortgaged Property, or a waiver  thereof; (k) the original executed disclosure statement; (l) tax receipts, insurance premium receipts, ledger  sheets, payment records, insurance claim files and correspondence, current and historical computerized  data files, underwriting standards used for origination and all other related papers and records; (m) the  original of any guarantee executed in connection with the Mortgage Note (if any); (n) the original of any  security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage;  and (o) all other documents relating to the Purchased Mortgage Loan.  “Person”: Includes natural persons, corporations, limited partnerships, general partnerships, limited  liability companies, joint stock companies, joint ventures, associations, companies, trusts, banks, trust  companies, land trusts, business trusts or other organizations, whether or not legal entities, and  governments and agencies and political subdivisions thereof.  “Price Differential”: For each Purchased Asset or Transaction as of any date of determination, an amount  equal to the product of (a) (i) prior to the occurrence of an Event of Default, the sum of the Applicable  Pricing Rate plus the applicable Type Margin, or (ii) following the occurrence and during the continuance  of an Event of Default, the Default Rate, and (b) the Purchase Price for such Purchased Asset or  Transaction.  Price Differential will be calculated in accordance with Section 2.6 of the Repurchase  Agreement.  “Proceeds”: The total amount receivable or received when a Purchased Asset or other Purchased Item is  sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary,  including, without limitation, all rights to payment, including return premiums, with respect to any  insurance relating thereto and all escrow withholds and escrow payments for Property Charges, as  applicable.  “Property Charges”: All taxes, fees, assessments, water, sewer and municipal charges (general or special)  and all insurance premiums, leasehold payments or ground rents.  “Purchase Date”: The date on which Secured Party, on behalf of Buyers, purchases a Purchased Asset  from Debtor or the Purchase Price Increase Date, as applicable.  If the Purchase Price is paid by wire  transfer, the Purchase Date shall be the date such funds are wired.  If the Purchase Price is paid by a  funding draft, the Purchase Date shall be the date that the draft is posted by the bank on which the draft is  drawn.  “Purchase Price”: As defined in the Repurchase Agreement. The term “Purchased Assets” with respect to  any Transaction at any time shall also include Mortgage-Backed Securities that replace the related  Purchased Mortgage Loans pursuant to Section 3.6 of the Repurchase Agreement.  “Purchased Assets”: Purchased Mortgage Loans.    

 

  Exhibit N-5    “Purchased Items”: All now existing and hereafter arising right, title and interest of Debtor in, under and  to the following:     (vv) all Purchased Mortgage Loans, now owned or hereafter acquired for which a Transaction  has been entered into between Secured Party, on behalf of Buyers, and Debtor hereunder  and for which the Repurchase Price has not been received by Secured Party, on behalf of  Buyers, including all Mortgage Notes and Mortgages evidencing such Mortgage Loans  and the related Mortgage Loan Documents, which, from time to time, are delivered, or  caused to be delivered, to Secured Party, on behalf of Buyers (including delivery to a  custodian or other third party on behalf of Secured Party and Buyers) as additional  security for the performance of Debtor’s obligations hereunder;    (ww) all Income related to the Purchased Assets and all rights to receive such Income;    (xx) if applicable, all amounts on deposit in the Collateral Account relating directly to the  Purchased Mortgage Loans;    (yy) all now existing and hereafter arising rights of Debtor to service, administer and/or  collect on the Purchased Assets hereunder and any and all rights to the payment of  monies on account thereof;    (zz) all Servicing Rights related to the Purchased Mortgage Loans, all related Servicing  Records, and all rights of Debtor to receive from any third party or to take delivery of any  Servicing Records or other documents which constitute a part of the Mortgage Loan  Files, including without limitation, the Other Mortgage Loan Documents, in each case,  relating to the Purchased Mortgage Loans;    (aaa) all now existing and hereafter arising accounts, contract rights and general intangibles  constituting or relating to any of the Purchased Assets;    (bbb) all rights, but not any obligations or liabilities, of Debtor relating to the Purchased  Mortgage Loans with respect to the Approved Investor;    (ccc) all documents, files, surveys, certificates, correspondence, appraisals, computer  programs, tapes, discs, cards, accounting records and other information and data of  Debtor relating to Purchased Assets;    (ddd) all property of Debtor, in any form or capacity now or at any time hereafter in the  possession or control of Secured Party, on behalf of Buyers relating to the Purchased  Mortgage Loans;    (eee) all Proceeds of the Purchased Assets;    (fff) any funds of Debtor at any time deposited or held in the Funding Account;    (ggg) all deposit accounts, deposits, money, investment property or other property (except real  property which is not a fixture) which are now or later in possession or control of Secured  Party or any Buyer, or as to which Secured Party or any Buyer, or as to which Secured  Party or any Buyer now or later controls possession by documents or otherwise, relating  to the Purchased Assets; and    

 

  Exhibit N-6    (hhh) all attachments, accessions, accessories, increases, and additions to and all replacements  of and substitutions for any other collateral described above, (ii) with respect to software  described in the foregoing, any and all licenses, options, warranties, service contracts,  program services, test rights, maintenance rights, support rights, improvement rights,  renewal rights and indemnifications and any model conversions, (iii) all proceeds,  products, and substitutions of any of the property described above, including, without  limit, insurance and condemnation proceeds, and cash or other property which were  proceeds and are recovered by a bankruptcy trustee or otherwise as a preferential transfer  by Debtor, and (iv) all records and data relating to any of the property described above,  whether in the form of a writing, photograph, microfilm, microfiche, or electronic media,  and all of Debtor’s right, title, and interest in and to all software required to utilize,  create, maintain and process any such records or data on electronic media.    “Purchased Mortgage Loan”: A Mortgage Loan that has been purchased by Secured Party, on behalf of  Buyers, from Debtor in connection with a Transaction and which has not been repurchased by Debtor  hereunder.      “Repurchase Price”: The price at which a Purchased Asset is to be transferred from Secured Party, on  behalf of Buyers, or its designee to Debtor or Approved Investor, as applicable, upon termination of a  Transaction, which shall equal the sum of (a) the Purchase Price, (b) any applicable fees and indemnities  owed by Debtor in connection with the Purchased Asset and (c) the Price Differential due on such  Purchase Price pursuant to Section 2.6 of the Repurchase Agreement as of the date of such determination.    “Revolving Rebuild BPL Loan”: Any Business Purpose Loan for which future advances are dispersed to  or from the Debtor to the related Mortgagor following the origination of such loan to rebuild the related  Mortgaged Property in accordance with the Servicing Agreement and the Mortgage Loan Documents.   “Purchase Price Increase”: An increase in the Purchase Price of a Revolving Rebuild BPL Loan in  connection with the related disbursement of Additional Draw Amounts, as requested by Debtor pursuant  to Section 2.1(b) of the Repurchase Agreement.    “Purchase Price Increase Date”: The date on which a Purchase Price Increase is made.    “Servicer”: (i) FCI Lender Services, Inc. or (ii) such other entity responsible for servicing of the  Purchased Mortgage Loans and that has been approved by Secured Party, on behalf of Buyers, in writing,  or, in each case, any successor or permitted assigns thereof.    “Servicing Agreement”: If the Purchased Mortgage Loans are serviced by any servicer that is not Secured  Party or an Affiliate of Secured Party, in each case, the agreement with the third party servicer, in form  and substance acceptable to Secured Party, on behalf of Buyers.    “Servicing Records”: All servicing agreements, files, documents, records, data bases, computer tapes,  copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing  documentation, payment history records, and any other records relating to or evidencing the servicing of a  Mortgage Loan.    “Servicing Rights”: The contractual, possessory or other rights of Debtor, Servicer or any other Person,  whether arising under a Servicing Agreement, the Custodial Agreement or otherwise, to administer or  service a Mortgage Loan or to possess related Servicing Records.  

 

  Exhibit N-7    “Transaction”: Transactions with Debtor whereby Debtor may, from time to time, sell to Secured Party  certain residential mortgage loans (including the Servicing Rights related thereto) and/or other mortgage  related assets and interests, against the transfer of funds by Secured Party, with a simultaneous agreement  by Secured Party to sell to Debtor such purchased assets at a date certain or on demand after the Purchase  Date, against the transfer of funds by Debtor.  “Transactions Terms Letter”: The document executed by Secured Party, Guarantor, Buyers, Guarantor  and Debtor, referencing the Repurchase Agreement and setting forth certain specific terms, and any  additional terms, with respect to the Repurchase Agreement.    “Type”: A specific type of Purchased Asset, as set forth in the Transactions Terms Letter.  “Type Margin”: With respect to each Type of Purchased Asset, the corresponding annual rate of interest  for such Type as set forth in the Transactions Terms Letter that shall be added to the Applicable Pricing  Rate to determine the annual rate of interest for the related Purchase Price.  “Wet Mortgage Loan”: A closed Mortgage Loan that Administrative Agent, on behalf of Buyers,  purchases from Seller prior to receipt by Administrative Agent, on behalf of Buyers, or its Custodian of  the related Mortgage Loan Documents, subject to Seller’s obligation to deliver the related Mortgage Loan  Documents to Administrative Agent, on behalf of Buyers, or its Custodian within the applicable  Maximum Dwell Time with respect to Seller’s obligation to deliver the related Mortgage Loan  Documents to Administrative Agent, on behalf of Buyers, or its Custodian.    FILING LOCATION:  State of [District of Columbia – Recorder of Deeds][U.S. Virgin  Islands]   A list of the Mortgage Loans which the Custodian has then been instructed to hold for the  Secured Party subject to the Custodial Agreement (including any Mortgage Loans which are Wet  Mortgage Loans) may be obtained by contacting the Secured Party at the address set forth above.    

 

  Schedule 1  Error! No document variable supplied.  SCHEDULE 1  Filing Jurisdictions and Offices          Seller Filing Office  Grapetree Lending LLC District of Columbia – Recorder of  Deeds  Grapetree Lending LLC U.S. Virgin Islands  

 

  Schedule 2   Error! No document variable supplied.  SCHEDULE 2  Ownership Interests of Seller        [***] 

 

  Schedule 3   Error! No document variable supplied.  SCHEDULE 3  Allocation Percentages    Buyer       Funding  Percentage                    Amount  Flagstar Bank, FSB  [***]      $[***]    

 

  Schedule 4-1   Error! No document variable supplied.  SCHEDULE 4  Financial Statements and Other Reports  (iii) Interim Statements.  To the extent not made publically available, as soon as possible but in no  event more than [***] after the end of each fiscal quarter, Seller and Guarantor shall deliver to  Administrative Agent, on behalf of Buyers, consolidated financial statements of Seller and  Guarantor and their consolidated Subsidiaries, including statements of income and changes in  shareholders’ equity (or its equivalent) for the period from the beginning of such fiscal year to the  end of such fiscal quarter, and the related balance sheet as of the end of such fiscal quarter, all in  reasonable detail and, if such fiscal quarter is also the final fiscal quarter of a fiscal year, such  financial statements shall be certified by the chief financial officer of Seller and Guarantor,  subject, however, to year-end audit adjustments.  (jjj) Annual Statements.  To the extent not made publically available, as soon as possible but in no  event more than [***] following the last day of the Seller’s and Guarantor’s final fiscal quarter,  Seller and Guarantor shall deliver to Administrative Agent, on behalf of Buyers, consolidated  financial statements of Seller and its consolidated Subsidiaries.  Such financial statements shall  include statements of income and changes in shareholders’ equity (or its equivalent) for such  fiscal year and the related balance sheet as at the end of such fiscal year, all in reasonable detail,  certified by the chief financial officer of Seller and Guarantor, and accompanied by an  unqualified opinion of a certified public accounting firm reasonably satisfactory to  Administrative Agent, on behalf of Buyers, stating that the financial statements fairly present the  financial condition and results of operations of Seller and Guarantor, as of the end of, and for,  such year.   (kkk) Officer’s Compliance Certificate.  Together with the financial statements required to be delivered  pursuant to clauses (a) and (b) above, Seller and Guarantor shall deliver to Administrative Agent,  on behalf of Buyers, an officer’s compliance certificate substantially in a form attached hereto as  Exhibit C, a list of all mortgage financing facilities including, without limitation, any warehouse,  repurchase, purchase or off-balance sheet facilities, that were entered into by Seller and  Guarantor in the preceding month, and evidence of compliance with all financial covenants.  (lll) Annual Portfolio Performance Report.  Seller and Guarantor shall deliver to Administrative  Agent, on behalf of Buyers, within [***] after the fiscal year end, an annual portfolio performance  report reflecting the performance of Seller’s and Guarantor’s portfolio of mortgage loans for such  fiscal year.  (mmm) Funding and Production Volume Reports.  Upon request of Administrative Agent, on behalf of  Buyers, (which shall be no more often than quarterly), Seller and Guarantor shall deliver to  Administrative Agent, on behalf of Buyers, a funding and production volume report for the prior  calendar quarter.  (nnn) Monthly Collateral Tape.  Upon request of Administrative Agent, on behalf of Buyers, Seller and  Guarantor shall (i) deliver to Administrative Agent, on behalf of Buyers, within[***] after the end  of each month, a collateral tape including the data fields (to be determined, but to include, at a  minimum fields for unpaid principal balance and interest paid to date) representing the Purchased  Mortgage Loans subject to Transactions hereunder as of the end of such month, reasonably  acceptable to Administrative Agent in its discretion and (ii) promptly deliver to Administrative  Agent, on behalf of Buyers, any additional information as reasonably requested.  

 

  Schedule 4-2  Error! No document variable supplied.  (ooo) Reports and Information Regarding Purchased Assets.  With reasonable promptness upon  Administrative Agent’s request, Seller and Guarantor shall deliver to Administrative Agent, on  behalf of Buyers: (i) copies of any reports related to the Purchased Assets or (ii) any other  information in Seller’s and Guarantor’s possession related to the Purchased Assets.  (ppp) Other Reports.  As may be reasonably requested by Administrative Agent, on behalf of Buyers,  from time to time, Seller and Guarantor shall deliver to, or make available for viewing by,  Administrative Agent, on behalf of Buyers, within [***] of filing or receipt: (i) copies of all  regular or periodic financial or other reports, if any, that Seller or Guarantor files with any  governmental, regulatory or other agency and (ii) copies of all audits, examinations and reports  concerning the operations of Seller and Guarantor from any Approved Investor, Insurer or  licensing authority.  In addition, Seller and Guarantor shall deliver to, or make available for  viewing by, Administrative Agent, on behalf of Buyers, with reasonable promptness, such further  information reasonably related to the business, operations, properties or financial condition of  Seller and Guarantor, in such detail and at such times as Administrative Agent, on behalf of  Buyers, may reasonably request.  Seller and Guarantor understand and agree that all reports and  information provided to Administrative Agent, on behalf of Buyers, by or relating to Seller and  Guarantor may be disclosed to Administrative Agent’s or any Buyer’s Affiliates.  (qqq) Other Investor Report Cards. Seller and Guarantor shall deliver to Administrative Agent, on  behalf of Buyers, at the annual review of the Seller, its Other Investor Report Cards.Document

Exhibit 4.1 

[FORM OF WARRANT]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.  THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF THIS WARRANT.
SMITH MICRO SOFTWARE, INC.
Warrant To Purchase Common Stock
Warrant No.: 
Date of Issuance: August 11, 2022 (“Issuance Date”)
Smith Micro Software, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), _________________1  (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant Number”).  Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 17.  This Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of August 11, 2022 (the “Subscription Date”), by and among the Company and the investors (the “Buyers”) referred to therein, as amended from time to time (the “Securities Purchase Agreement”).
1.EXERCISE OF WARRANT.
(a)Mechanics of Exercise.  Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the 

50% Warrant coverage
 

 

Holder on any day on or after the Issuance Date (an “Exercise Date”), in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant.  Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)).  The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder.  Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares.  Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof.  On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein.  On or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program (“FAST”), upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC FAST, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such exercise.  Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be).  If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.  No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number.  The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.  Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to the later of (i) two (2) Trading Days after 
2

 

receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or valid notice of a Cashless Exercise if permissible) (such later date, the “Share Delivery Date”) shall not be deemed to be a breach of this Warrant.  Notwithstanding anything to the contrary contained in this Warrant or the Registration Rights Agreement, after the effective date of the Registration Statement (as defined in the Registration Rights Agreement) and prior to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company shall cause the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) in connection with any sale of Registrable Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, and for which the Holder has not yet settled.  From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in FAST.  
(b)Exercise Price.  For purposes of this Warrant, “Exercise Price” means $3.35, subject to adjustment as provided herein.
(c)Company’s Failure to Timely Deliver Securities.  If the Company shall fail, for any reason or for no reason, on or prior to the Share Delivery Date, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case may be) or (II) if a Registration Statement covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such Delivery Failure an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise.  In addition to the foregoing, if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in the DTC FAST, the Company shall fail to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC FAST, the Transfer Agent shall fail to credit the balance account of the Holder or the Holder’s designee with DTC for the number of shares of Common Stock to 
3

 

which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such exercise that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Delivery Failure or Notice Failure, as applicable (a “Buy-In”), then, in addition to all other remedies available to the Holder, the Company shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In Payment Amount”).  Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof.  While this Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST.  In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Warrant Shares, as required by and in accordance with the terms of the Registration Rights Agreement, and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
4

 

(d)Cashless Exercise.  Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of exercise hereof a Registration Statement (as defined in the Registration Rights Agreement) is not effective (or the prospectus contained therein is not available for use) for the resale by the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
    Net Number = (A x B) - (A x C)
                        B
    For purposes of the foregoing formula:
A= the total number of shares with respect to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the VWAP of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, the Warrant Shares take on the registered characteristics of the Warrants being exercised.  For purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.
(e)Disputes.  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 15.
(f)Limitations on Exercises.  The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this 
5

 

Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the Common Stock outstanding immediately after giving effect to such exercise.  For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including other SPA Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f)(i).  For purposes of this Section 1(f)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act.  For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”).  If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(f)(i), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares.  For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported.  In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares.  As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares.  Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is 
6

 

delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an Attribution Party of the Holder.  For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act.  No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f)(i) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f)(i) or to make changes or supplements necessary or desirable to properly give effect to such limitation.  The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
(g)Reservation of Shares.  
(i)Required Reserve Amount.  So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the SPA Warrants then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection with any exercise or redemption of SPA Warrants or such other event covered by Section 2(a) below.  The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the SPA Warrants based on the number of shares of Common Stock issuable upon exercise of SPA Warrants held by each holder on the Closing Date (as defined in the Securities Purchase Agreement) (without regard to any limitations on exercise) or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”).  In the event that a holder shall sell or otherwise transfer any of such holder’s SPA Warrants, each transferee shall be allocated a pro rata portion of such holder’s Authorized Share Allocation.  Any shares of Common Stock reserved and allocated to any Person which ceases to hold any SPA Warrants shall be allocated to the remaining holders of SPA Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the SPA Warrants then held by such holders (without regard to any limitations on exercise).
(ii)Insufficient Authorized Shares.  If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while any of the SPA Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall use its best efforts to take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants then outstanding.  Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock.  In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ 
7

 

approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.  Notwithstanding the foregoing, if at any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C.  In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment under this Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount, brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith.  Nothing contained in this Section 1(g) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
2.ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a)Stock Dividends and Splits.  Without limiting any provision of Section 2(b), Section 3 or Section 4, if the Company, at any time on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.  If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b)Reserved.
(c)Number of Warrant Shares.  Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such 
8

 

adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(d)Reserved.
(e)Stock Combination Event Adjustment.  If at any time and from time to time on or after the Issuance Date there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the outstanding Common Stock (each, a “Stock Combination Event”, and such date thereof, the “Stock Combination Event Date”) and the Event Market Price is less than the Exercise Price then in effect (after giving effect to the adjustment in clause 2(a) above), then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event, the Exercise Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the adjustment in clause 2(a) above) shall be reduced (but in no event increased) to the Event Market Price.  For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made.
(f)Other Events.  In the event that the Company (or any Subsidiary (as defined in the Securities Purchase Agreement)) shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 2(f) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne by the Company.
(g)Calculations.  All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable.  The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of shares of Common Stock.
(h)Voluntary Adjustment By Company.  Subject to the rules and regulations of the Principal Market, the Company may at any time during the term of this Warrant, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
3.RIGHTS UPON DISTRIBUTION OF ASSETS.  In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, 
9

 

in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4.PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)Purchase Rights.  In addition to any adjustments pursuant to Sections 2 or 3 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b)Fundamental Transactions.  The Company shall not enter into or be party to a Fundamental Transaction unless (i)  the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of 
10

 

Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market.  Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.  Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant.  Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant.  In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant).  Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(c)Black Scholes Value.  Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder on the date of such request by paying to the Holder cash 
11

 

in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant.  Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to the later of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation of such Fundamental Transaction.
(d)Application.  The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5.NONCIRCUMVENTION.  Except and to the extent waived or consented to by the Holder, the Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action,  avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.  Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant.  Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions set forth in Section 1(f) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock.
6.WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant.  In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.  Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders; provided that the Company shall have no such obligation to the extent such information is filed with the SEC through EDGAR and are available to the public through the EDGAR system.
12

 

7.REISSUANCE OF WARRANTS.
(i)Transfer of Warrant.  If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(j)Lost, Stolen or Mutilated Warrant.  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(k)Exchangeable for Multiple Warrants.  This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock shall be given.
(l)Issuance of New Warrants.  Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
(m)Representation by the Holder.  The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
8.NOTICES.  Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement.  The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable detail a description of such action and the reason therefor.  Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the 
13

 

calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K.  If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously filed in a Current Report on Form 8-K  and the Holder has not agreed to receive such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information.  It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9.DISCLOSURE.  Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York City time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise.  In the event that the Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries.  Nothing contained in this Section 9 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the Securities Purchase Agreement.
10.ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS.  The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions.  In the absence of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information to any third party.
11.AMENDMENT AND WAIVER.  Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.  No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
14

 

12.SEVERABILITY.  If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.  The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
13.GOVERNING LAW.  This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.  
14.CONSTRUCTION; HEADINGS.  This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof.  The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.  Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction Documents unless otherwise consented to in writing by the Holder.
15.DISPUTE RESOLUTION.  
(e)Submission to Dispute Resolution.
15

 

(i)In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, Black Scholes Consideration Value, Black Scholes Value or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute.  If the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid Price, such Black Scholes Consideration Value, Black Scholes Value or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.
(ii)The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).  Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline.  The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent manifest error.
(n)Miscellaneous.  The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) the terms of this Warrant and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required to be made by 
16

 

such investment bank in connection with its resolution of such dispute, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 15 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 15 and (iv) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 15).
16.REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Warrant.  The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.  Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security.  The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof).  The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
17.PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS.  If (a) this Warrant is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements. 
18.TRANSFER.  This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be required by Section [2(g)] of the Securities Purchase Agreement and applicable securities laws.
19.CERTAIN DEFINITIONS.  For purposes of this Warrant, the following terms shall have the following meanings:
(a)“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
17

 

(b)“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 2) of Common Stock (other than rights of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(d)“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(e) “Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act.  For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.  
(f)“Bid Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices) as of such time of determination.  If the Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair market value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15.  All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(g)“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right  (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option or Convertible 
18

 

Security (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be).
(h)“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request pursuant to Section 4(c)(i), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to Section 4(c)(i) and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c)(i), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c)(i) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Fundamental Transaction or as of the date of the Holder’s request pursuant to Section 4(c)(i) if such request is prior to the date of the consummation of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable Fundamental Transaction and (B) the date of the Holder’s request pursuant to Section 4(c)(i).
(i)“Bloomberg” means Bloomberg, L.P.
(j)“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”  or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(k)“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency 
19

 

succeeding to its functions of reporting prices).  If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15.  All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(l)“Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any capital stock resulting from a reclassification of such common stock.
(m)“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any Common Stock.
(n)“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.
(o)[Reserved]
(p) “Event Market Price” means, with respect to any Stock Combination Event Date, the quotient determined by dividing (x) the sum of the VWAP of the Common Stock for each of the five (5) lowest Trading Days during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Stock Combination Event Date, divided by (y) five (5).  All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
(o) “Expiration Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday.
(q)“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with 
20

 

one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(r)“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(s)“Holder Pro Rata Amount” means a fraction (i) the numerator of which is the aggregate number of shares of Common Stock issuable upon exercise of this Warrant on the Closing Date and (ii) the denominator of which is the aggregate number of shares of Common Stock issuable upon exercise of all SPA Warrants issued to the initial purchasers pursuant to the Securities Purchase Agreement on the Closing Date (in each case, without regard to any limitation on exercise set forth herein).
(t) “Notes” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all notes issued in exchange therefor or replacement thereof.
(u)“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(v)“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
21

 

(w)“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(x)“Principal Market” means the Nasdaq Capital Market.
(y)“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the shares of Common Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the SPA Warrants, as may be amended from time to time.
(z)“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(aa)“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(ab)“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(ac)“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price or trading volume determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities. 
(ad)“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination (such period, the “Volume Failure Measuring Period”), is less than $100,000.  
(ae) “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the 
22

 

average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices).  If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15.  All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
[signature page follows]
23

 

IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
SMITH MICRO SOFTWARE, INC.
By:        
Name:  
Title: 

 

EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SMITH MICRO SOFTWARE, INC.
The undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of SMITH MICRO SOFTWARE, INC., a Delaware corporation (the “Company”), as specified below.  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
1.    Form of Exercise Price.  The Holder intends that payment of the Aggregate Exercise Price shall be made as:
☐    a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
☐    a “Cashless Exercise” with respect to _______________ Warrant Shares.
In the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2.    Payment of Exercise Price.  In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.
3.    Delivery of Warrant Shares.  The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common Stock in accordance with the terms of the Warrant.  Delivery shall be made to Holder, or for its benefit, as follows:
☐    Check here if requesting delivery as a certificate to the following name and to the following address:
						
	Issue to:
	
	

	
	

	

    ☐    Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: 
 

 

									
	DTC Participant:
	
	DTC Number:
	
	Account Number:
	
	

	

			
	Date: _____________ __,     
    
Name of Registered Holder

	By:      
Name: 
Title:

    Tax ID:____________________________
    Facsimile:__________________________
    E-mail Address:_____________________

 

EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.

SMITH MICRO SOFTWARE, INC.
By:        
Name: 
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00347-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00347-of-00352.parquet"}]]