Document:

Exhibit 10.36

 

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

 

MORTGAGE WAREHOUSE AGREEMENT

 

by and between

 

AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY,

 

and

 

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION

 

AGREEMENT DATE:
  JULY 29, 2020

 

AGREEMENT NO.:
 4905

 

 

MORTGAGE WAREHOUSE AGREEMENT

 

THIS MORTGAGE WAREHOUSE AGREEMENT (this “Agreement”) is made and entered into as of JULY 29, 2020 (the “Agreement Date”) (but effective as of the Effective Date) between AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY (“Seller”) and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

A.                                   Seller is actively engaged in Mortgage Loan Activities (as defined below).

 

B.                                    Seller is seeking additional funding sources for its Mortgage Loan Activities through the sale of Participation Interests (as defined below) in Mortgage Loans (as defined below) generated by such Mortgage Loan Activities.

 

C.                                    Bank is, among other things, in the business of purchasing participation interests in Mortgage Loans.

 

D.                                    Seller shall have no obligation to offer for sale, and Bank shall have no obligation to purchase, Participation Interests in such Mortgage Loans.  However, Seller and Bank desire to set forth the terms under which such offers and purchases, if any, can be made

 

AGREEMENT

 

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

 

ARTICLE 1
  DEFINITIONS

 

1.1                                           Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Accepted Lending Practices” shall mean the loan origination practices to be observed by the originators of the Mortgage Loans, which practices shall be conducted:  (a) in a commercially reasonable manner and in good faith; (b) in accordance with the provisions of this Agreement; (c) in accordance with all applicable Laws; (d) in accordance with the requirements (if any) of the Warehouse Program Guide (as amended by this Agreement); and (e) in a manner consistent with customary and usual standards of practice of prudent originators of residential mortgage loans.

 

“Accepted Servicing Practices” shall mean the loan servicing practices to be observed by Seller in connection with Participated Mortgage Loans, which practices shall be conducted:  (a) in a commercially reasonable manner and in good faith; (b) in accordance with the provisions of this Agreement; (c) in accordance with all applicable Laws; and (d) in a manner consistent with customary and usual standards of practice of prudent servicers of residential mortgage loans.

 

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“Account” or “Accounts” shall mean any of the deposit accounts to be established and maintained pursuant to this Agreement, including:  (a) the Participation Account; (b) the Pledged Account; (c) the Remittance Account; (d) the Repayment Account; and (e) such other accounts as Bank may require Seller to establish pursuant to or in connection with this Agreement or any other Warehouse Document.  For the avoidance of doubt, the term “Account” shall not include any servicing or escrow accounts.

 

“Advance” shall mean each payment of funds by Bank to Seller pursuant to the terms of this Agreement to pay the Purchase Price for the purchase of a Participation Interest.  Such payment by Bank to Seller of the Purchase Price for a Participation Interest shall be effected through the delivery by Bank on behalf of Seller of the proceeds of the related Advance directly to the applicable Funding Recipient, which proceeds shall be applied towards satisfying Seller’s obligations with respect to the applicable Mortgage Loan Transaction.  With respect to any Participated Mortgage Loan, an Advance shall be deemed to be made on the date on which funds are wired or otherwise transferred by Bank to the related Funding Recipient regardless of whether funds are actually received by such Funding Recipient on the date of the initiation of such wire or other transfer.

 

“Advance Request Termination Date” shall mean the final date on which Seller may submit to Bank a Request, which date shall be the earlier to occur of:  (a) the date which is twelve (12) months after the Seller’s execution date; or (b) the date on which Seller’s rights hereunder to submit any and all Requests to Bank shall terminate pursuant to the provisions of this Agreement or any other Warehouse Document (including, pursuant to Sections 5.2, 5.3 or 9.2).

 

“Aged Participated Mortgage Loan” shall mean any Participated Mortgage Loan which does not constitute a Retired Participated Mortgage Loan on or after the sixtieth (60th) day after the Purchase Date for such Participated Mortgage Loan.

 

“Agency” shall mean FHA, FHLMC, FNMA, GNMA, VA or USDA.

 

“Agency Approvals” shall mean:  (a) all approvals and requirements of FNMA necessary for Seller to sell Eligible Mortgage Loans to FNMA and/or to service Eligible Mortgage Loans; (b) all approvals and requirements of FHLMC necessary for Seller to sell Eligible Mortgage Loans to FHLMC and/or to service Eligible Mortgage Loans; and (c) all approvals and requirements of GNMA for Seller to be an approved issuer of securities comprising any Eligible Mortgage Loans.

 

“Agreement Date” shall have the meaning given to such term in the first paragraph of this Agreement.  The Agreement Date is for reference purposes only in order to identify in the Warehouse Documents the date of this Agreement.  The effective date of this Agreement shall be the Effective Date.

 

“Agreement Termination Date” shall mean the date on which this Agreement shall terminate and cease to be in force and effect (except with respect to the provisions of this Agreement which expressly survive termination).  The Agreement Termination Date is the earlier to occur of:  (a) the date on which this Agreement shall terminate pursuant to Section 5.2(c); or (b) the date on which this Agreement shall otherwise terminate in accordance with the express terms of this Agreement or any other Warehouse Document.

 

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“Bailee Letter” shall mean a letter, in form and substance as set forth in Exhibit 10 to the Custodial Agreement, delivered or caused to be delivered by Bank to any Take-Out Purchaser in connection with the proposed purchase of a Participated Mortgage Loan by such Take-Out Purchaser or its designee, which letter, among other things, directs such Take-Out Purchaser to hold, as bailee for Bank, the Mortgage Loan Documents for such Participated Mortgage Loan.

 

“Bank” shall mean TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, and its successors and assigns.

 

“Bank Document Deliverables” shall mean, with respect to any Participated Mortgage Loan, (a) the original of the fully executed Mortgage Note for such Participated Mortgage Loan, together with the Required Endorsements related thereto (including, without limitation, each original executed allonge required by Bank in connection therewith), (b) the Required Custodian Deliverables (as defined in the Section of Exhibit F entitled “Third-Party Custodian”) related to such Participated Mortgage Loan, but only if (and only during such time as) Seller is permitted pursuant to such Section to deliver or cause to be delivered to the Custodian any Bank Document Deliverables, and (c) any other agreements, files, records and other documents related to such Participated Mortgage Loan which are required to be delivered to Bank in connection with the purchase of the Participation Interest in such Participated Mortgage Loan pursuant to the Warehouse Program Guide (as amended by this Agreement) in effect as of the related Purchase Date.

 

“Bank Payment Deliverables” shall mean any and all checks, commercial paper, notes, cash or other forms of payment of any and all sums:  (a) required to be paid to Bank hereunder but which have been received by Seller (including any and all proceeds received by Seller from the sale of any Participated Mortgage Loan to a Take-Out Purchaser); or (b) received by Seller during the occurrence of an Event of Default which sums relate to any Participated Mortgage Loan.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code, as now or hereafter in effect.

 

“Blanket Assignment” shall mean an assignment agreement in the form of Exhibit I, or in such other form required by Bank, executed and acknowledged by Seller and Bank, which evidences, among other things, the sale, transfer, assignment and conveyance by Seller to Bank of any and all Participation Interests in the Participated Mortgage Loans and the Mortgage loan Documents related thereto now or hereafter purchased by Bank from Seller upon the occurrence and continuation of an Event of Default.

 

“Borrower” shall mean any Person who is an obligor on or under a Mortgage Loan.

 

“Broker Originated Mortgage Loan” shall mean any Mortgage Loan which:  (a) is closed in the name of a mortgage broker as lender; and (b) is transferred and assigned by such mortgage broker to Seller, and upon such transfer and assignment Seller shall be the holder of the Mortgage Note for such Mortgage Loan and otherwise own all right, title and interest in and to such Mortgage Loan.

 

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“Business Day” shall mean any day other than a Saturday, Sunday or day on which commercial banks are authorized or required to be closed under the Laws of the States of California or Texas.  Unless otherwise provided herein, the term “day” means a calendar day.

 

“Collateral” shall have the meaning given to such term in the UCC-1 financing statement attached hereto as Exhibit D.

 

“Correspondent Originated Mortgage Loan” shall mean any Mortgage Loan which:  (a) was not originated by Seller; (b) is not a Broker Originated Mortgage Loan; and (c) has or will be purchased by Seller from the holder of the Mortgage Note for such Mortgage Loan, and upon such purchase Seller shall be the holder of the Mortgage Note for such Mortgage Loan and otherwise own all right, title and interest in and to such Mortgage Loan.

 

“Custodial Agreement” shall mean that certain Custodial Agreement dated as of August 29, 2014, executed by Bank, Seller and the Custodian, as such agreement may be amended, supplemented, replaced or modified from time to time pursuant to the provisions of this Addendum.

 

“Custodian” shall mean Deutsche Bank National Trust Company or other Person designated by Bank and mutually acceptable to Seller, as Bank’s payment agent in connection with the transactions contemplated by this Agreement.

 

“Effective Date” shall mean the date this Agreement has been fully executed by both Seller and Bank, as set forth below their respective signature blocks hereto.

 

“Eligible Mortgage Loan” shall mean any Mortgage Loan:  (a) that is a Seller Originated Mortgage Loan or a Third-Party Originated Mortgage Loan; (b) that is in all material respects in compliance with the provisions of this Agreement or the Warehouse Program Guide (as amended by this Agreement) applicable to such Mortgage Loan; (c) for which all of the representations and warranties set forth in Section 6.10 shall be true, complete and correct on and as of the Purchase Date of a Participation Interest in such Mortgage Loan and at all times thereafter; and (d) which is otherwise acceptable to Bank in its commercially reasonable discretion on and as of such Purchase Date.

 

“Escrow Agent” shall mean, with respect to any Mortgage Loan, the title company or agency, approved in advance by Bank in its commercially reasonable discretion, which is responsible for the closing and funding of such Mortgage Loan.

 

“Event of Default” shall mean any of the events specified in Section 9.1.

 

“FHA” shall mean the Federal Housing Administration, or its successor.

 

“FHLMC” shall mean the Federal Home Loan Mortgage Corporation, or its successor.

 

“FNMA” shall mean the Federal National Mortgage Association, or its successor.

 

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“Funding Recipient” shall mean, with respect to any Participated Mortgage Loan, Seller or such other Person to whom Bank shall directly pay the Purchase Price for the purchase of a Participation Interest in such Participated Mortgage Loan, as set forth in the related Request.

 

“Generally Accepted Accounting Principles” or “GAAP” shall mean those generally accepted accounting principles and practices which are recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof and which are consistently applied for all applicable periods, except that any accounting principle or practice required to be changed by the said Accounting Principles Board or Financial Accounting Standards Board (or other appropriate board or committee of the said Boards) in order to continue as a generally accepted accounting principle or practice may be so changed.

 

“GNMA” shall mean the Government National Mortgage Association, or its successor.

 

“Governmental Authority” shall mean any and all federal, state, county, municipal, city or other government department, commission, board, court, agency or any other instrumentality of any of them (including any Agency) having jurisdiction over Bank, Seller, the Mortgage Loans or any of the transactions contemplated herein.

 

“Law” or “law” shall mean any and all present and future law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, guideline, authorization or other direction or requirement of any Governmental Authority.  The terms “Law” and “law” include (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. Law No. 111-203, 124 Stat. 1376 (2010), and any and all Laws issued thereunder or in connection therewith, as may be amended from time to time (collectively, the “Dodd-Frank Act”), (b) the Interagency Appraisal and Evaluation Guidelines jointly issued on December 2, 2010 by the Office of the Comptroller of Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration, as the same may be amended from time to time (collectively, the “Interagency Appraisal Guidelines”), (c) the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. §§ 5101 et seq.) and any and all applicable state Laws related thereto, as may be amended from time to time (collectively, the “S.A.F.E. Act”), and (d) any and all similar Laws from time to time in effect.

 

“Lien” shall mean any lien, mortgage, security interest, assignment, tax lien, pledge or encumbrance, or conditional sale or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, or any other interest in Property designed to secure the repayment of indebtedness.

 

“Loan Application” shall mean a completed application for the applicable Mortgage Loan in its final form, signed by all applicable Borrowers, and which is in compliance with all applicable Laws.

 

“Material Adverse Effect” shall mean any set of circumstances or events which with respect to Seller:  (a) could reasonably be expected to have a material adverse effect upon the validity, performance, or enforceability of any Warehouse Document against such Seller; (b) is or

 

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could reasonably be expected to have a material adverse effect upon the condition (financial or otherwise), properties, liabilities (actual or contingent), business operations or prospects of Seller; or (c) could reasonably be expected to materially impair the ability of Seller to perform its obligations under any Warehouse Document to which it is a party.

 

“Maximum Judgment Amount” shall mean the lesser of:  (a) [***]; or (b) at any particular time, the amount equal to [***] of the sum of Seller’s cash, cash equivalents (certificates of deposit and other depository accounts established at FDIC-insured banks), United States government-issued securities and other registered, unrestricted equity or debt securities which are publicly traded on a recognized United States exchange and have been approved by Bank, in its commercially reasonable discretion and which, in all events, are held in Seller’s name and are free and clear of all Liens (except Liens in favor of Bank).

 

“Maximum Participation Amount” shall mean an amount equal to THREE HUNDRED MILLION and No/100 Dollars ($300,000,000.00); provided, however, that during any Overline Period, the Maximum Participation Amount shall be the amount set forth for the same in the related Overline Confirmation for such Overline Period.

 

“Minimum Pledged Balance” shall mean good funds in an amount not less than [***]; provided, however, that during any Overline Period, the Minimum Pledged Balance shall be the amount set for the same in the related Overline Confirmation for such Overline Period.

 

“Mortgage Loan” shall mean a residential mortgage loan evidenced by a Mortgage Note and secured by a Security Instrument.

 

“Mortgage Loan Activities” shall mean the purchasing, processing, origination, administration, servicing and selling of Mortgage Loans by Seller and any other business activities related thereto or contemplated by this Agreement (including any activities related to Mortgage Loan Transactions).

 

“Mortgage Loan Collections” shall mean all checks, instruments, funds, and other property from time to time paid on, under or with respect to any Participated Mortgage Loan under any Mortgage Loan Document or otherwise related thereto, including, without limitation, all payments of principal, interest, fees, charges, costs, expenses, indemnities and other amounts, and all proceeds of sale of such Participated Mortgage Loan.

 

“Mortgage Loan Documents” shall mean, with respect to any Mortgage Loan, the Mortgage Note evidencing such Mortgage Loan, the Security Instrument securing such Mortgage Loan, and all other agreements, instruments and documents governing, evidencing, guaranteeing or relating to such Mortgage Loan, Mortgage Note or Security Instrument.

 

“Mortgage Loan File” shall mean, with respect to any Participated Mortgage Loan, any and all Mortgage Loan Documents and other agreements, files, records and other documents related to such Participated Mortgage Loan (including the related credit file and underwriting standards under which Seller approved such Participated Mortgage Loan).

 

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“Mortgage Loan Transaction” shall mean:  (a) with respect to any Mortgage Loan that is a Seller Originated Mortgage Loan, the closing and funding of such Mortgage Loan by the applicable Escrow Agent; and (b) with respect to any Mortgage Loan that is a Third-Party Originated Mortgage Loan, the purchase and sale transaction pursuant to which Seller shall have purchased, fully paid for and shall own all right, title and interest in and to such Mortgage Loan (if a Correspondent Originated Mortgage Loan).

 

“Mortgage Note” shall mean, with respect to any Mortgage Loan, a promissory note evidencing such Mortgage Loan and secured by a Security Instrument.

 

“Mortgaged Property” shall mean, with respect to any Mortgage Loan, the Residential Real Property subject to a Security Instrument securing such Mortgage Loan.

 

“Outstanding Participation Balance” shall mean, at any given time, an amount equal to the aggregate sum of the outstanding Advances hereunder made by Bank for the purchase of Participation Interests in Participated Mortgage Loans which do not at such time constitute Retired Participated Mortgage Loans.

 

“Participated Mortgage Loan” shall mean any Mortgage Loan in which Bank has elected to purchase a Participation Interest from Seller pursuant to the terms and conditions of this Agreement.  A Mortgage Loan in which Bank has purchased a Participation Interest shall cease to be a Participated Mortgage Loan hereunder at such time as such Mortgage Loan is a Retired Participated Mortgage Loan.

 

“Participation Account” shall mean the deposit account established and maintained by Seller at Bank for the purpose of holding funds of Seller to be used to pay Seller’s Funding Amounts.  The account number for the Participation Account is identified in Schedule 1 to the Pledge Agreement.

 

“Participation Interest” shall mean, with respect to any Mortgage Loan, an undivided percentage ownership interest in all right, title and interest in, to and under such Mortgage Loan (including, all Mortgage Loan Collections payable on, and with respect to such Mortgage Loan, all of such Mortgage Loan Documents and all other obligations thereunder, all claims, suits, causes of action, and any other rights, known or unknown, against any of the related Borrower, guarantor or other Person relating to any of the foregoing, all collateral, guarantees and other security of or provided by any of the related Borrower or any other Person of any kind for or in respect to any and all of the foregoing, and all proceeds of any and all of the foregoing) purchased by Bank from Seller hereunder and owned by Bank.  The undivided percentage ownership interest of Bank in any such Mortgage Loan shall be equal to the Participation Percentage for such Mortgage Loan in effect from time to time.

 

“Participation Interest Rate” shall mean, with respect to any Participated Mortgage Loan, the per annum rate of interest payable to Bank in connection with such Participated Mortgage Loan and its Participation Interest therein, which rate shall be calculated as a variable rate equal to the greater of:  (a) the LIBOR Rate as of the related Purchase Date, as the LIBOR Rate may vary from day to day thereafter, plus [***]; or (b) the Participation Interest Rate Floor; provided, however, that the Participation Interest Rate

 

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for any Participated Mortgage Loan shall not at any time be greater than the maximum rate permitted under applicable Law.  For purposes of determining the Participation Interest Rate for any Participated Mortgage Loan, the “LIBOR Rate” means, with respect to a period of thirty (30) days, the London Interbank Offered Rate for deposits in United States Dollars (expressed as a percentage per annum) that is published or announced from time to time by Bloomberg or such other recognized commercial service selected by Bank, in its sole discretion; provided, however, if such rate is not available, the LIBOR Rate will be determined by an alternate method mutually acceptable to Bank and Seller.  Notwithstanding anything herein to the contrary, in no event shall the LIBOR Rate be less than zero percent (0.00%) per annum.  All interest hereunder shall be calculated on the basis of a three hundred sixty (360) day year and shall accrue on the actual number of days elapsed for any whole or partial month in which interest is being calculated.

 

“Participation Interest Rate Floor” shall mean an interest rate equal to [***] per annum.

 

“Participation Percentage” shall mean, with respect to any Participation Interest in a Participated Mortgage Loan, a percentage of undivided ownership interest in such Participated Mortgage Loan equal to:  (a) the Standard Participation Percentage; or (b) if Bank elects, in its sole discretion, to make an Advance for the purchase of such Participation Interest which is greater or less than the amount equal to the Standard Participation Percentage multiplied by the outstanding principal amount of such Participated Mortgage Loan as of the related Purchase Date, then the amount of such Advance divided by such outstanding principal amount, expressed as a percentage; as the Participation Percentage for such Participated Mortgage Loan.  Upon any repurchase of all or any portion of Bank’s outstanding Participation Interest in any Participated Mortgage Loan by Seller hereunder, Bank’s then-current Participation Percentage in such Participated Mortgage Loan shall be adjusted pursuant to this Agreement to give effect to such repurchase.

 

“Party” shall mean each of Seller and Bank.

 

“Permitted Custodian Deliverables” shall mean, with respect to any Participated Mortgage Loan, such agreements, files, records and other documents related to such Participated Mortgage Loan (other than any Required Custodian Deliverables) permitted to be delivered to the Custodian pursuant to the Custodial Agreement.

 

“Permitted Encumbrances” shall mean, with respect to any Mortgage Loan:  (a) the Lien of current real property taxes and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording being acceptable pursuant to Accepted Lending Practices and specifically referred to in the lender’s title insurance policy delivered to the originator of such Mortgage Loan and which do not adversely affect the appraised value of the Mortgaged Property for such Mortgage Loan; and (c) other matters to which like properties are commonly subject which are acceptable pursuant to Accepted Lending Practices and do not, individually or in the aggregate, materially interfere with the benefits of the security intended to be provided by the Security Instrument for such Mortgage Loan or the use, enjoyment, value or marketability of the related Mortgaged Property.

 

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“Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other form of entity.

 

“Pledge Agreement” shall mean, individually and collectively, each pledge or security agreement, in such form and content required by Bank, now or hereafter executed for the benefit of Bank in connection with this Agreement and the transactions contemplated hereby, including each agreement attached hereto as Exhibit B.

 

“Pledged Account” shall mean the depository account or accounts established and maintained by Seller at Bank for the purpose of holding funds of Seller to be used as a source of funds to pay the Repurchase/Sale Obligations.  The account number for the Pledged Account is identified in Schedule 1 to the Pledge Agreement.

 

“Proceeding” means any action, claim, investigation, lawsuit or other proceeding.

 

“Property” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

“Purchase Date” shall mean, with respect to any Participated Mortgage Loan, the date and time of the Advance for the purchase by Bank of a Participation Interest in such Participated Mortgage Loan.

 

“Purchase Price” shall mean, with respect to a Participation Interest in any Mortgage Loan to be purchased by Bank, an amount equal to the outstanding principal amount of such Mortgage Loan on the related Purchase Date multiplied by the Bank’s Participation Percentage for such Participation Interest in such Mortgage Loan.

 

“Repayment Account” shall mean the deposit account established, owned and controlled by Bank, into which all proceeds from each sale of any Participated Mortgage Loan by Bank and Seller to a Take-Out Purchaser shall be funded and deposited, and such account and all funds deposited or maintained therein shall be disbursed and applied by Bank pursuant to the terms of this Agreement.  The account number for the Repayment Account is ********* or such other deposit account number designated by Bank from time to time as the Repayment Account in a written notice delivered by Bank to Seller pursuant to this Agreement.

 

“Remittance Account” shall mean the deposit account established and maintained by Seller at Bank into which Bank shall deposit all amounts, if any, which are required to be paid by Bank to Seller hereunder.

 

“Repurchase Price” shall mean, with respect to a Participation Interest in any Participated Mortgage Loan, the amount to be paid by Seller to Bank for the repurchase of such Participation Interest which is required by Bank to be repurchased by Seller from Bank pursuant to Section 4.8, which amount shall be equal to:  (a) the Purchase Price originally paid by Bank for the Participation Interest in such Participated Mortgage Loan, plus (b) all accrued and unpaid interest with respect to such Participation Interest at the Participation Interest Rate, plus (c) any charges incurred by or properly payable to Bank pursuant this Agreement, (d) all amounts (if any) received and applied

 

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by Bank hereunder, as of the date of such repurchase, towards payment of any of the foregoing with respect to such Participated Mortgage Loan.

 

“Repurchase/Sale Obligations” shall mean:  (a) any and all obligations of Seller, whether now existing or hereafter arising, to (i) arrange for the sale by and on behalf of the Parties of each Participated Mortgage Loan to a Take-Out Purchaser, and complete each such sale, as and when required pursuant to the terms and conditions of this Agreement, or (ii) repurchase all or any portion of Bank’s Participation Interest in each Participated Mortgage Loan as and when required pursuant to the terms and conditions of this Agreement; (b) any and all liabilities of Seller to Bank in connection with the obligations described in clause (a) of this sentence; and (c) any and all costs and expenses incurred by Bank in connection with the collection, administration or enforcement of all or any part of the obligations and liabilities described in clauses (a) and (b) of this sentence or the protection or preservation of, or realization upon, any collateral securing all or any part of such liabilities and obligations, including, without limitation, all reasonable external attorneys’ fees.

 

“Request” shall mean any request by Seller to Bank for the purchase by Bank from Seller of a Participation Interest in an Eligible Mortgage Loan and the Advance by Bank of funds for the Purchase Price for such Participation Interest, which Request shall be delivered by Seller to Bank in such manner and shall contain such information as may be required by Bank from time to time.

 

“Required Custodian Deliverables” shall mean, with respect to any Participated Mortgage Loan, such agreements, files, records and other documents related to such Participated Mortgage Loan required to be delivered to the Custodian pursuant to the Custodial Agreement.

 

“Required Endorsements” shall mean:  (a) with respect to any Mortgage Note related to a Third-Party Originated Mortgage Loan, the endorsement pursuant to applicable Law of such Mortgage Note by the original payee and any and all subsequent holders thereof prior to the purchase of such Mortgage Note by Seller; and (b) with respect any Mortgage Note related to a Third-Party Originated Mortgage Loan or a Seller Originated Mortgage Loan, at Bank’s election, either (i) the endorsement pursuant to applicable Law of such Mortgage Note in blank by Seller (which may, in Bank’s discretion, be evidenced by an original allonge, in form and content acceptable to Bank, executed by Seller and affixed to such Mortgage Note) or (ii) no endorsement of such Mortgage Note by Seller, if Bank shall have received and accepted a valid power of attorney, in form and content satisfactory to Bank, authorizing Bank to endorse such Mortgage Note for and on behalf of Seller.

 

“Residential Real Property” shall mean a single platted lot of land improved with a one-to-four family residence, or a condominium or planned unit development.

 

“Restricted Accounts” shall mean the Participation Account and the Pledged Account.

 

“Retained Percentage” shall mean, with respect to any Participated Mortgage Loan, the percentage of undivided ownership interest retained by Seller in such Participated Mortgage Loan, after giving effect to the sale by Seller and purchase by Bank of such Participation Interest hereunder, which percentage shall be, for any such Mortgage Loan, equal to the difference of one hundred percent (100.0%) less the Bank’s Participation Percentage in such Participated Mortgage

 

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Loan.  Upon any repurchase of all or any portion of Bank’s outstanding Participation Interest in any Participated Mortgage Loan by Seller hereunder, Seller’s then-current Retained Percentage in such Participated Mortgage Loan shall be adjusted to give effect to such repurchase.

 

“Retired Participated Mortgage Loan” shall mean any Mortgage Loan in which Bank has purchased a Participation Interest:  (a) which has been subsequently sold in its entirety to a Take-Out Purchaser and the full amount of the Take-Out Purchase Price for such sale has been received and applied by Bank, all pursuant to the terms of this Agreement; (b) for which the Participation Interest in such Mortgage Loan has been subsequently repurchased in its entirety by Seller from Bank and the full amount of the Repurchase Price for such repurchase has been received and applied by Bank, all pursuant to the terms of this Agreement; or (c) for which the entire principal balance and all accrued interest for such Mortgage Loan has been subsequently paid in full by the related Borrower, and Bank’s pro rata share of such amounts (determined in accordance with Bank’s Participation Percentage and the Participation Interest Rate in effect from time to time with respect to such Mortgage Loan) have been received and applied by Bank, all pursuant to the terms of this Agreement.

 

“Security Instrument” shall mean, with respect to any Mortgage Loan, a full recourse mortgage or deed of trust securing such Mortgage Loan and granting a perfected first priority lien on the Residential Real Property related thereto.

 

“Seller” shall mean AMERIHOME MORTGAGE COMPANY, LLC, and its successors and assigns.

 

“Seller’s Funding Amount” shall mean, with respect to any Participated Mortgage Loan and the related Mortgage Loan Transaction, the total amount to be paid by Seller (through sources other than an Advance) in connection with such Mortgage Loan Transaction, which Seller’s Funding Amount shall be equal to the Total Funding Amount for such Participated Mortgage Loan less the Purchase Price for the Participation Interest therein.

 

“Seller Originated Mortgage Loan” shall mean any Mortgage Loan:  (a) originated by Seller and closed in the name of Seller as lender; or (b) with respect to which Seller is (or shall be upon the closing thereof) the holder of the Mortgage Note for such Mortgage Loan and otherwise owns all right, title and interest in and to such Mortgage Loan.

 

“Standard Participation Percentage” shall mean a percentage equal to One Hundred Percent (100.00%).

 

“Take-Out Purchase Agreement” shall mean, with respect to any Participated Mortgage Loan to be sold by Seller to any Take-Out Purchaser, a current, valid, binding and enforceable commitment issued by such Take-Out Purchaser in favor of Seller, and/or other written agreement or arrangement between such Take-Out Purchaser and Seller, to purchase such Participated Mortgage Loan (including any such commitment or agreement which does not specifically identify such Participated Mortgage Loan but which contemplates the purchase of Mortgage Loans by such Take-Out Purchaser from time to time), which Take-Out Purchase Agreement provides for a purchase price to be paid by such Take-Out Purchaser for such Participated Mortgage Loan.

 

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“Take-Out Purchase Price” shall mean, with respect to any Participated Mortgage Loan to be sold by Seller to a Take-Out Purchaser pursuant to a Take-Out Purchase Agreement, the amount paid by such Take-Out Purchaser with respect to such Participated Mortgage Loan.  For the avoidance of doubt, if the Take-Out Purchase Price for any Participated Mortgage Loan is less than the Repurchase Price for the Participation Interest relating to such Participated Mortgage Loan, Seller shall be responsible for such shortfall and shall pay such amount to Bank pursuant to the terms of this Agreement.

 

“Take-Out Purchaser” shall mean (a) any Agency, (b) any Person approved in advance by Bank in its commercially reasonable discretion, who purchases or agrees to purchase any Participated Mortgage Loan pursuant to an Take-Out Purchase Agreement.

 

“Third-Party Originated Mortgage Loan” shall mean any Correspondent Originated Mortgage Loan or any Broker Originated Mortgage Loan.

 

“Title Policy” shall mean, an ALTA Loan Policy of Title Insurance, a standard Texas form of Loan Policy of Title Insurance, or such other insurance policy which is acceptable to an Agency, with such standard endorsements as may be reasonably required by Bank, issued by a nationally recognized title insurance company acceptable to an Agency.

 

“Total Funding Amount” shall mean, with respect to any Participated Mortgage Loan and the related Mortgage Loan Transaction, the total amount to be paid by Seller in connection with such Mortgage Loan Transaction (including amounts to be provided on behalf of Seller by Bank through the making of an Advance for the purchase of a Participation Interest in such Participated Mortgage Loan), as set forth in the related Request.

 

“UCC” shall mean the Uniform Commercial Code of the State of Texas or other applicable jurisdiction, as it may be amended from time to time.

 

“USDA” shall mean the United States Department of Agriculture, or its successor.

 

“VA” shall mean the United States Department of Veterans Affairs, or its successor.

 

“Warehouse Documents” shall mean this Agreement, the Blanket Assignment, the Pledge Agreement and any and all other agreements, instruments and documents evidencing, securing or pertaining to Bank’s discretionary purchase of Participation Interests in Mortgage Loans from Seller hereunder, as shall from time to time be executed and delivered to Bank by Seller or any other Person pursuant to or in connection with this Agreement or the transactions contemplated hereby, including each addendum to this Agreement (if any) executed by Bank and Seller, any future amendments hereto, or restatements hereof, together with any and all renewals, extensions, and restatements of, and amendments and modifications to, any such agreements, documents and instruments.

 

“Warehouse Program Guide” shall mean, collectively, (a) the “Warehouse Lending Program Guide” issued by Bank and made available to Seller prior to execution of this Agreement, and (b) any amendments, modifications or supplements thereto from time to time by Bank, and including any notices or bulletins issued by Bank concerning the guidelines, procedures and

 

13

 

requirements for the transactions contemplated by this Agreement, in each case as reasonably approved by Seller.  For the avoidance of doubt, any amendment, modification or supplement to the Warehouse Program Guide shall only be effective with respect to Requests made after Seller’s approval of such amendment, modification or supplement.

 

1.2                               Other Defined Terms.  In addition to the terms defined in Section 1.1, as used in this Agreement, other capitalized terms contained in this Agreement shall have the meanings assigned to them.

 

1.3                               Other Definitional Provisions.

 

(a)                                 All terms defined in this Agreement shall have the herein defined meanings when used in any document, certificate, report or other document, instrument, or writing made or delivered pursuant to this Agreement or any other Warehouse Document, unless the context therein shall otherwise require.

 

(b)                                 Words used herein in the singular, where the context so permits, shall be deemed to include the plural and vice versa.  The definitions of words in the singular herein shall apply to such words when used in the plural where the context so permits and vice versa.

 

(c)                                  The words “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” when used in this Agreement shall refer to the entire Agreement and not to any particular provision or section; and the word “including,” as used herein, shall mean “including, without limitation.”

 

(d)                                 All references herein to “Articles” and “Sections” are, unless specified otherwise, references to articles and sections of this Agreement.  All references herein to an “Exhibit,” “Schedule” or “Addendum” are references to exhibits, schedules or addenda attached hereto, all of which are made a part hereof for all purposes, the same as if set forth herein verbatim, it being understood that if any exhibit, schedule or addendum attached hereto, which is to be executed and delivered, contains blanks, the same shall be completed correctly and in accordance with the terms and provisions contained and as contemplated herein prior to or at the time of the execution and delivery thereof.

 

ARTICLE 2
  PURCHASE OF PARTICIPATION INTERESTS

 

2.1                               Request for Purchase.

 

(a)                                 At any time prior to the Advance Request Termination Date, Seller may submit a Request to Bank for Bank to purchase a Participation Interest in one or more Eligible Mortgage Loans from Seller hereunder by delivering or causing to be delivered to Bank, by electronic data submission, as may be required by Bank from time to time, the information and other items for such Eligible Mortgage Loans required by Bank pursuant to the Warehouse Program Guide (as amended by this Agreement).

 

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(b)                                 To assist Bank in making its decision whether to purchase a Participation Interest in any particular Eligible Mortgage Loan, Seller will timely provide Bank or Bank’s agents with the information and other items for such Eligible Mortgage Loan required by Bank pursuant to the Warehouse Program Guide (as amended by this Agreement).

 

(c)                                  Each submission of a Request shall be deemed to constitute a representation and warranty by Seller to Bank on the date of such Request and on the date of an Advance made by Bank to purchase a Participation Interest in any Mortgage Loan in connection with such Request that:  (i) such Request relates to an Eligible Mortgage Loan; and (ii) the information and materials submitted to Bank in connection with such Mortgage Loan and such Request are true, correct and complete in all material respects.

 

(d)                                 Each submission of a Request shall constitute Seller’s agreement, such that, if Bank elects to purchase from Seller a Participation Interest in the Mortgage Loan referenced in such Request, then effective upon payment by Bank to Seller of the Purchase Price for such Participation Interest pursuant to the terms of this Agreement, Seller shall have (and shall be conclusively deemed to have) irrevocably and unconditionally sold, transferred, assigned and conveyed to Bank, and Bank shall have (and shall be conclusively deemed to have) purchased and accepted from Seller, all of Seller’s right, title, and interest in, to and under such Participation Interest in such Mortgage Loan and the related Mortgage Loan Documents, and such sale, transfer, assignment and conveyance shall be evidenced by this Agreement.

 

2.2                               Decision to Purchase.  Each decision of Bank whether to purchase any Participation Interest in any Mortgage Loan from Seller hereunder shall be made by Bank in its sole and absolute discretion.  Bank shall be under no obligation hereunder to purchase any Participation Interest in any Mortgage Loan nor shall Bank have any obligation hereunder to purchase any minimum amount of Participation Interests in Mortgage Loans.  In each instance where a Request is submitted to Bank, Bank will make an independent decision whether to purchase a Participation Interest in any Mortgage Loan contemplated by the Request.  Bank may decline to purchase any Participation Interest in any Mortgage Loan for any reason.  The election of Bank to purchase a Participation Interest in any Mortgage Loan shall be evidenced by the making of an Advance by Bank for the payment of the Purchase Price related thereto.  If for any reason whatsoever Bank fails to make an Advance for the payment of the Purchase Price for a Participation Interest in any Mortgage Loan, then it shall be conclusive evidence of Bank’s election not to purchase a Participation Interest in such Mortgage Loan.

 

2.3                               Conditions to Each Purchase.  As a condition precedent to any purchase of a Participation Interest by Bank from Seller hereunder, in addition to all other requirements set forth herein, Seller shall deliver to Bank all of the following, each being duly executed, endorsed, notarized where applicable and delivered and in form and content satisfactory to Bank in its commercially reasonable discretion:

 

(a)                                 The information and other items required to be delivered to Bank pursuant to Section 2.1;

 

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(b)                                 The representations and warranties of Seller contained in this Agreement and each other Warehouse Document (other than those representations and warranties which are, by their terms, expressly limited to the date of the agreement in which they were initially made) are true and correct in all material respects on and as of the date of such purchase;

 

(c)                                  If requested by Bank, a written certification from Seller that no Event of Default has occurred or is continuing as of the date of the Advance;

 

(d)                                 Seller has adequate available funds on deposit in the Participation Account in an amount not less than Seller’s Funding Amount for such Mortgage Loan; and

 

(e)                                  Such other documents as Bank may reasonably request at any time at or prior to the date of the first Advance hereunder or as a condition to any subsequent Advance hereunder, including any and each Pledge Agreement required by Bank to be executed in connection with the transactions contemplated by this Agreement.

 

Each submission of a Request shall be deemed to constitute a representation and warranty by Seller to Bank on the date of the applicable Advance made to purchase a Participation Interest in connection with such Request as to the facts and statements specified in clauses (a), (b), (c) and (d) immediately above and in Sections 5.1(e), (g) and (h) are true and correct in all material respects.  It is understood and agreed that Bank shall not make any Advance for the Purchase Price of any Participation Interest unless with respect thereto Bank is in receipt of all agreements and documents required to be delivered to Bank under this Agreement and all other conditions precedent and requirements set forth herein are satisfied or waived by Bank in writing.

 

All conditions precedent hereunder to the purchase of a Participation Interest are solely for the benefit of Bank.  Bank’s election, in its sole discretion, to waive any condition precedent hereunder for the purchase of any Participation Interest shall not constitute a waiver of the satisfaction of such condition precedent for any subsequent purchase of any other Participation Interest.  No such condition precedent shall be deemed waived unless waived in writing by Bank.

 

2.4                               Funding of Mortgage Loan Transactions; Purchase of Participation Interests.  With respect to each Participated Mortgage Loan, Bank and Seller agree that:

 

(a)                                 Bank shall (and is authorized to) debit funds from the Participation Account in an amount equal to Seller’s Funding Amount for such Participated Mortgage Loan and deliver on behalf of Seller by wire transfer such funds directly to the account of the Funding Recipient designated in the related Request (provided, however, if such Funding Recipient is an Escrow Agent, then such account shall be an escrow account) or deliver such funds on behalf of Seller to such Funding Recipient in any other manner acceptable to Bank.  Bank shall not make an Advance for the purchase of a Participation Interest in any Mortgage Loan unless Seller has good funds on deposit in the Participation Account in an amount not less than Seller’s Funding Amount for such Mortgage Loan;

 

(b)                                 As payment by Bank to Seller for the purchase of a Participation Interest in such Participated Mortgage Loan, Bank shall make an Advance in an amount equal to the

 

16

 

related Purchase Price.  Seller hereby irrevocably and unconditionally instructs Bank, with respect to any such Advance, to deliver by wire transfer the proceeds of such Advance on behalf of Seller directly to the account of the Funding Recipient designated in the related Request or to deliver such proceeds on behalf of Seller to such Funding Recipient in any other manner acceptable to Bank; and

 

(c)                                  Upon the making of an Advance by Bank to or on behalf of Seller for the purchase of a Participation Interest in such Participated Mortgage Loan as described above in this Section:  (i) Bank shall immediately have purchased such Participation Interest from Seller, and shall immediately have become fully vested with, an undivided percentage ownership interest in all of Seller’s right, title and interest in and to such Participated Mortgage Loan and the related Mortgage Loan Documents, which undivided percentage ownership interest shall equal the Participation Percentage for such Participated Mortgage Loan; and (ii) Seller shall immediately make proper entries on its books and records disclosing the absolute sale by Seller to Bank of such Participation Interest in such Participated Mortgage Loan and the related Mortgage Loan Documents.  The purchase and sale of a Participation Interest in any Participated Mortgage Loan hereunder shall be conclusively established by the making of an Advance by Bank for the Purchase Price for such Participation Interest as and in the manner provided in this Section.

 

2.5                               Failure to Complete Mortgage Loan Transaction.  Each Advance made by Bank to purchase a Participation Interest from Seller in a Mortgage Loan is intended by Bank and Seller to be made in connection with a Mortgage Loan Transaction, which Mortgage Loan Transaction is to occur on or about the date on which the related Request for such Advance is submitted by Seller to Bank for Bank to purchase a Participation Interest in such Mortgage Loan or on such date otherwise specified in such Request.  With respect to any Mortgage Loan for which Seller has submitted a Request to Bank for Bank to purchase a Participation Interest therein, if the Mortgage Loan Transaction related thereto is not expected by Seller to occur or fails to occur within two (2) Business Days of such Request then Seller shall immediately provide notice thereof to Bank.  Should the Mortgage Loan Transaction related to any Mortgage Loan not be expected by Seller to occur or fail to occur within two (2) Business Days of the Request to Bank for Bank to purchase a Participation Interest therein and Bank shall have delivered on behalf of Seller to the related Funding Recipient the proceeds of the Advance for the purchase by Bank of such Participation Interest, then:  (a) the proceeds of such Advance shall immediately be returned directly to Bank and Bank may instruct such Funding Recipient to immediately return such proceeds directly to Bank; and (b) Seller shall (i) immediately instruct and cause such Funding Recipient to return the proceeds of such Advance directly to Bank and (ii) cooperate with Bank to effect the immediate return of the proceeds of such Advance directly to Bank and, at the request of Bank, take such actions and do such things deemed necessary or appropriate by Bank to effect the immediate return directly to Bank of the proceeds of such Advance.

 

2.6                               Reserved.

 

2.7                               Maximum Participation Amount.  Notwithstanding anything to the contrary contained herein, Bank shall not purchase and hold, at any one time, Participation Interests such that the Outstanding Participation Balance exceeds the Maximum Participation Amount; provided,

 

17

 

however, that Bank may, in its sole and absolute discretion, elect to temporarily increase the Maximum Participation Amount upon written notice to Seller pursuant to Section 2.8.  Nothing contained in this Section shall limit, impair or affect the provisions of Section 2.2.

 

2.8                               Overline Facility Increases.  Upon Seller’s request from time to time, Bank may, in its sole and absolute discretion, elect to temporarily increase the amount of the Maximum Participation Amount (each, an “Overline Facility Increase”) by providing written notice thereof to Seller (each, an “Overline Confirmation”).  Each Overline Confirmation shall set forth the terms on which Bank agrees to temporarily increase the Maximum Participation Amount, including:  (a) the amount to which the Maximum Participation Amount will be temporarily increased; (b) the date on which such temporary increase in the Maximum Participation Amount shall commence and terminate (the “Overline Period”); and (c) the amount to which the Minimum Pledged Balance shall be increased in connection with such Overline Facility Increase.  As a condition precedent to the effectiveness of any Overline Facility Increase, Seller shall deposit into the Pledged Account good funds in such amount required in order to maintain therein the Minimum Pledged Balance set forth in the related Overline Confirmation.  During any Overline Period, the Maximum Participation Amount and Minimum Pledged Balance shall equal the respective amounts set forth on the Overline Confirmation and, upon the expiration of the Overline Period, the Maximum Participation Amount and Minimum Pledged Balance shall automatically be reduced to the respective amounts in effect prior to the commencement of any Overline Period.

 

ARTICLE 3
 DELIVERY OF BANK DOCUMENT DELIVERABLES

 

3.1                               Documents to be Delivered to the Custodian After an Advance.  Subject to Sections 3.2 and 3.3, within five (5) Business Days after the Purchase Date for any Participated Mortgage Loan, Seller shall deliver or cause to be delivered to the Custodian all of the Bank Document Deliverables for such Participated Mortgage Loan.  Bank reserves the right to reasonably request copies of any of the Bank Document Deliverables for review prior to making any Advance for the purchase of a Participation Interest in any specific Mortgage Loan.

 

3.2                               Procedure for Delivery of Bank Document Deliverables.  Seller shall cause the Bank Document Deliverables for each Participated Mortgage Loan to be:  (i) delivered directly to Seller (and, in the event that the applicable Funding Recipient for such Participated Mortgage Loan is or is required hereunder to be an Escrow Agent, such Bank Document Deliverables shall be delivered directly to Seller from escrow by the Escrow Agent for such Participated Mortgage Loan); and (ii) thereafter, delivered directly to the Custodian by Seller within five (5) Business Days after the Purchase Date for such Participated Mortgage Loan, unless otherwise expressly provided by Bank in writing to Seller with respect to such Participated Mortgage Loan (it being understood that any such writing from Bank shall only apply to the specific Participated Mortgage Loan referenced therein).

 

3.3                               Bank Document Deliverables Held By Seller.  Without limiting the requirements set forth in Section 3.2, Seller acknowledges and agrees that each and every Bank Document Deliverable for any Participated Mortgage Loan which is at any time in the custody, possession or control of Seller after Bank’s purchase of a Participation Interest in such Participated Mortgage

 

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Loan shall be held and delivered to the Custodian pursuant to the terms and conditions of Section 5.12.  Nothing contained in this Section authorizes or permits the delivery to Seller or any other Person (other than the Custodian) of any of the Bank Document Deliverables which are required to be delivered directly to the Custodian pursuant to the provisions of this Section.

 

3.4                               Custodian and Payment Agent Provisions.

 

(a)                                 Seller, Bank and Custodian have entered into a custodial agreement in such form and content acceptable to Bank and Seller (the “Custodial Agreement”), pursuant to which Custodial Agreement, among other things, Custodian shall agree to hold the Bank Document Deliverables in custody for the benefit of, and as bailee and agent for, Bank.

 

(b)                                 Seller, Bank, Custodian and such other Persons required by Bank and Seller have entered into a joint custodial securities account control agreement in such form and content acceptable to Custodian, Bank and Seller and such other Persons (“Joint Securities Account Agreement”), pursuant to which Joint Securities Account Agreement, among other things, Custodian shall agree to serve as custodian of certain cash and securities for the other parties to the Joint Securities Account Agreement.

 

(c)                                  Seller, Bank and such other Persons required by Bank have entered into an intercreditor agreement in such form and content acceptable to Bank (“Intercreditor Agreement”), pursuant to which Intercreditor Agreement, among other things, the parties define their respective rights to the proceeds from the sale of certain Mortgage Loans.

 

(d)                                 Until such time as Bank shall provide written notice to Seller to the contrary, Custodian shall constitute Bank’s designee hereunder.  Bank reserves the right to at any time remove Custodian or any other Person as its designee and to appoint any Person as its designee upon no less than sixty (60) days prior written notice and the consent of Seller, which consent shall not be unreasonably withheld, and such removal or appointment shall be effective as of the dates set for in such notice (provided, notwithstanding the foregoing, should an Event of Default have occurred and be continuing, Seller’s consent shall not be required if Bank elects to remove the Custodian and appoint itself or another Person as designee for purposes of this Agreement).

 

(e)                                  Subject to the provisions of Subsection (f) of this Section, Seller shall deliver or cause to be delivered to the Custodian the Bank Document Deliverables for each Participated Mortgage Loan pursuant to the provisions of Section 3.1 and the Custodial Agreement.  All Bank Document Deliverables (including all Required Custodian Deliverables), Permitted Custodian Deliverables and other Mortgage Loan Files (without implying that Seller is permitted to deliver any such other Mortgage Loan Files to the Custodian other than pursuant to the provisions of this Section and the Warehouse Agreement) delivered to the Custodian shall be held by the Custodian, as custodian and bailee for Bank, for the exclusive use and benefit of Bank, pursuant to the provisions of the Custodial Agreement and this Agreement.

 

(f)                                   Notwithstanding anything herein to the contrary:

 

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(i)                                     Seller shall not be permitted to deliver or cause to be delivered to the Custodian any Bank Document Deliverables (including any Required Custodian Deliverables) or Permitted Custodian Deliverables until such time as Bank shall have received a fully executed copy of the Custodial Agreement, in such form and content acceptable to Bank.

 

(ii)                                  If the Custodial Agreement shall terminate (including if Bank shall terminate the Custodial Agreement in accordance with its terms), then effective as the date of such termination (without any further action by, or notice to, any Party):  (A) Seller shall not be permitted to deliver or cause to be delivered to the Custodian any Bank Document Deliverables (including any Required Custodian Deliverables) or Permitted Custodian Deliverables; and (B) (I) all Bank Document Deliverables shall be delivered to Bank (and not the Custodian) pursuant to the provisions of this Agreement, and (II) all other Mortgage Loan Files (excluding any portions thereof which constitute Bank Document Deliverables) shall be delivered to, and held and maintained by, Seller (and not the Custodian) pursuant to the provisions of this Agreement.

 

(iii)                               Upon the occurrence and during the continuance of an Event of Default, Bank may, in its commercially reasonable discretion, require that Seller cease delivering or causing to be delivered to the Custodian any and all Bank Document Deliverables (including any Required Custodian Deliverables) and Permitted Custodian Deliverables by providing written notice thereof to Seller, in which case, effective as of the date set forth in such written notice:  (A) Seller shall not be permitted to deliver or cause to be delivered to the Custodian any Bank Document Deliverables (including any Required Custodian Deliverables) or Permitted Custodian Deliverables; and (B) (I) all Bank Document Deliverables shall be delivered to Bank (and not the Custodian) pursuant to the provisions of the Warehouse Agreement and (II) all other Mortgage Loan Files (excluding any portions thereof which constitute Bank Document Deliverables) shall be delivered to, and held and maintained by, Seller (and not the Custodian) pursuant to the provisions of the Warehouse Agreement.

 

(iv)                              Upon the occurrence and during the continuance of an Event of Default, Bank may, in its commercially reasonable discretion, require that any or all of the Bank Document Deliverables (including any Required Custodian Deliverables), Permitted Custodian Deliverables and other Mortgage Loan Files (without implying that Seller is permitted to deliver any such other Mortgage Loan Files to the Custodian other than pursuant to the provisions of this Section and the Warehouse Agreement) (A) in the possession of the Custodian be released by the Custodian directly to Bank, in which case Bank shall be deemed to be the Custodian for such items, or (B) in the custody, possession or control of Seller pursuant to Section 5.12(b) be delivered directly to Bank (and not the Custodian) by Seller, in which case Bank shall be deemed to be the Custodian for such items.

 

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(g)                                  Seller agrees to cooperate with Bank, and take such actions and do such other things deemed necessary or advisable by Bank, in connection with effecting the provisions of Subsections (f)(ii), (iii) and (iv) of this Section.

 

(h)                                 Seller shall at all times comply with the provisions of the Custodial Agreement.  Notwithstanding anything in the Custodial Agreement to the contrary, the Custodial Agreement or any other agreement related thereto shall not:  (i) be amended, supplemented, replaced or modified or terminated without the prior written consent of Bank; and (ii) adversely affect or impair Seller’s duties, obligations or agreements under this Agreement.

 

(i)                                     SELLER WILL RELEASE, HOLD HARMLESS AND INDEMNIFY EACH INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL LOSSES WHICH ARE RELATED TO THE CUSTODIAL AGREEMENT.

 

ARTICLE 4
  SALE OF LOANS TO TAKE-OUT PURCHASERS;
 AGED LOANS; REPURCHASE OBLIGATIONS

 

4.1                               Short Term Nature of Investment.

 

(a)                                 It is understood that each Participation Interest which Bank purchases in any Participated Mortgage Loan shall be purchased by Bank for its own account for the short term investment of its capital and in reliance of Seller’s agreement hereunder that:  (i) Seller shall arrange and complete the sale by and on behalf of the Parties of the related Participated Mortgage Loan as and when required pursuant to the terms of this Agreement; or (ii) repurchase all or any portion of such Participation Interest on or prior to the date required pursuant to the terms of this Agreement, if such sale is not arranged and completed by Seller as and when required pursuant to the terms of this Agreement.  In order to secure the prompt and complete performance by Seller of its Repurchase/Sale Obligations, Seller does hereby pledge, assign and grant to Bank a continuing security interest in and to the Collateral.  For this purpose, this Agreement shall constitute a security agreement in accordance with the UCC, and Bank shall have all the rights of a secured creditor with respect to such security.

 

(b)                                 For each Participated Mortgage Loan, it is the intention of Bank and Seller that such Participated Mortgage Loan and the related Mortgage Loan Documents will be sold and delivered to a Take-Out Purchaser or repurchased by Seller, and for such Take-Out Purchaser and/or Seller to have paid the full amount of the Repurchase Price for the Participation Interest related to such Participated Mortgage Loan, within [***] days of the Purchase Date for such Participated Mortgage Loan.  Notwithstanding the foregoing, it is understood and agreed that Bank shall not have and does not undertake any duty, obligation or liability arising from or related to any Take-Out Purchase Agreement or any Take-Out Purchaser.

 

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4.2                               Sale of Participated Mortgage Loans to Take-Out Purchasers.

 

(a)                                 The sale of each Participated Mortgage Loan by Seller and Bank to any Take-Out Purchaser shall be in accordance with the terms of the related Take-Out Purchase Agreement.  If a Take-Out Purchaser fails to perform or anticipatorily breaches its obligations under a Take-Out Purchase Agreement to purchase any Participated Mortgage Loan, then Seller shall promptly locate and consummate the sale by Bank and Seller of such Participated Mortgage Loan to another Take-Out Purchaser; provided, however, that the foregoing shall not limit or qualify any other rights or remedies available to Bank hereunder with respect to such Participated Mortgage Loan or any Participation Interest therein.

 

(b)                                 Notwithstanding anything to the contrary in any Take-Out Purchase Agreement, the procedures of sale to a Take-Out Purchaser by Seller and Bank of any Participated Mortgage Loan shall be as follows:

 

(i)                                     Seller shall deliver to the Take-Out Purchaser the Mortgage Loan Documents for such Participated Mortgage Loan (other than the related Mortgage Note and other Mortgage Loan Documents, if any, which are then being held by the Custodian).  Such Mortgage Loan Documents shall be delivered by Seller to the Take-Out Purchaser under the provisions of the Take-Out Purchase Agreement which govern the Take-Out Purchaser’s custody and possession of such Mortgage Loan Documents or under such other written custodial or similar bailment agreement between Seller and the Take-Out Purchaser acceptable to Bank.

 

(ii)                                  Bank shall deliver or cause to be delivered to the Take-Out Purchaser, under a Bailee Letter, the Mortgage Loan Documents for such Participated Mortgage Loan which are then held by the Custodian pursuant to this Agreement, including the original Mortgage Note for such Participated Mortgage Loan accompanied by:  (A) the Required Endorsements; and (B) if such Mortgage Note was not endorsed in blank by Seller, an allonge endorsed in blank by Bank, as agent for Seller, pursuant to (and if and to the extent that Bank shall have received and accepted) a valid power of attorney, in form and content satisfactory to Bank, authorizing Bank to endorse such Mortgage Note for and on behalf of Seller.

 

(c)                                  Within no more than thirty (30) days after the delivery by the Custodian to the Take-Out Purchaser of the Mortgage Note evidencing such Participated Mortgage Loan, Seller shall cause the Take-Out Purchaser to pay or cause to be paid directly to Bank, as payment to Seller and Bank for the purchase by the Take-Out Purchaser of such Participated Mortgage Loan, immediately available funds in an amount equal to the Take-Out Purchase Price for such Participated Mortgage Loan.  If the Take-Out Purchase Price for such Participated Mortgage Loan is less than the Repurchase Price for the related Participation Interest, then Seller shall pay to Bank in immediately available funds the amount of such shortfall such that the total amount received from the Take-Out Purchaser and Seller shall be an amount equal to the related Repurchase Price.

 

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(d)                                 All of the proceeds from the sale by Seller of a Participated Mortgage Loan to a Take-Out Purchaser shall be paid directly to Bank pursuant to Section 4.3 and shall be applied by Bank on behalf of Bank and Seller in accordance with Section 4.4.

 

(e)                                  Subject to Section 4.4(b), Bank and Seller’s ownership interests in any Participated Mortgage Loan to be sold to a Take-Out Purchaser shall continue in full force and effect, and Bank and Seller shall not have (and shall not be deemed to have) sold such Participated Mortgage Loan to a Take-Out Purchaser unless and until such time as Bank shall have received immediately available funds from the Take-Out Purchaser and/or Seller for such sale in an amount not less than the Repurchase Price for the Participation Interested in such Participated Mortgage Loan.

 

4.3                               Payments From Take-Out Purchasers.  In connection with each sale of a Participated Mortgage Loan by Seller and Bank to a Take-Out Purchaser, Seller shall cause the Take-Out Purchase Price to be paid by the Take-Out Purchaser for the purchase of the Participated Mortgage Loan to be paid by the Take-Out Purchaser, in immediately available funds, directly to Bank into the Repayment Account.  Bank shall promptly notify Seller of the receipt of funds deposited into the Repayment Account by a Take-Out Purchaser or from Bank’s custodian or other designee that may be in receipt of such funds from time to time (each a “Take-Out Purchaser Payment”).  If the Take-Out Purchaser Payment for such Participated Mortgage Loan is less than the Repurchase Price for the related Participation Interest, then Seller shall deposit to the Repayment Account the amount of such shortfall such that the total amount received from the Take-Out Purchaser and Seller shall be an amount equal to the related Repurchase Price.

 

4.4                               Processing Payments From Take-Out Purchasers.  With respect to any Take-Out Purchaser Payment:

 

(a)                                 Seller shall promptly confirm to Bank the Participated Mortgage Loan to which such Take-Out Purchaser Payment (along with any shortfall deposited by Seller pursuant to Section 4.3) applies.

 

(b)                                 In addition, Bank reserves the right, in its sole discretion, to not post any Take-Out Purchaser Payment for credit to Seller in the event that insufficient funds were delivered by the Take-Out Purchaser to Bank to fully pay the Repurchase Price for the Participation Interested related to the Participated Mortgage Loan to which the Take-Out Purchaser Payment applies, but only after notice to Seller and allowing Seller [***] to cure any such defect by funding, or causing to be funded, any such shortfalls.  Seller acknowledges and agrees that (i) with respect to any Take-Out Purchaser Payment for which insufficient funds were delivered, Bank’s related Participation Interest shall not have been sold (and shall be deemed to not have been sold) to such Take-Out Purchaser unless and until Seller has caused sufficient funds to be deposited in the Repayment Account, and Seller shall immediately either deposit such funds or notify such Take-Out Purchaser that no sale of such Participated Mortgage Loan by Bank and Seller to such Take-Out Purchaser has occurred and coordinate return of the Take-Out Purchaser Payment; and (ii) with respect to a Take-Out Purchaser Payment for which insufficient funds were delivered (after notice to Seller and [***] to cure as set forth

 

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above), Bank shall have the right, in its sole discretion, to offset any amounts in any Account in order to effect full payment of the related Repurchase Price; and

 

(c)                                  The proceeds of each Take-Out Purchaser Payment (along with any shortfall deposited by Seller pursuant to Section 4.3) shall be applied by Bank pursuant to Section 5.13.

 

All notices to be given and actions to be taken pursuant to this Section shall be effectuated electronically or in such other manner, as required by Bank from time to time pursuant to the Warehouse Program Guide (as amended by this Agreement).

 

4.5                               Reserved.

 

4.6                               Participation Interest Rate for Aged Participated Mortgage Loans.

 

(a)                                 With respect to any Aged Participated Mortgage Loan, to the extent permitted by applicable Law, Bank may from time to time, in its sole discretion, increase the then-current Participation Interest Rate with respect to such Aged Participated Mortgage Loan by an amount, as determined by Bank, in accordance with the following:

 

	
Number of days elapsed since
   the Purchase Date for the
   Participation Interest in the
   Aged Participated Mortgage
   Loan
    	
 
    	
Maximum aggregate total
   amount by which Bank may
   increase the applicable
   Participation Interest Rate
   pursuant to this Section
    	
 
    	
Date on which the
   increase (if any) in the
   Participation Interest
   Rate is effective
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    

 

(b)                                 Notwithstanding anything herein to the contrary, the Participation Interest Rate for any Participated Mortgage Loan shall not at any time exceed the maximum rate permitted under applicable Law.

 

(c)                                  The provisions of this Section shall not limit or qualify any rights or remedies of Bank hereunder (including, without limitation, any rights or remedies of Bank under Section 4.8).

 

4.7                               Reserved.

 

4.8                               Repurchase of Participation Interests.

 

(a)                                 With respect to any specific Participated Mortgage Loan, Seller may at any time, at Seller’s sole option, repurchase from Bank, in its entirety, all of Bank’s then-outstanding Participation Interest in such Participated Mortgage Loan at the related Repurchase Price.  With respect to any specific Participated Mortgage Loan, Bank shall have the right to require Seller, upon demand by Bank, to repurchase from Bank, in its entirety, all of Bank’s then-outstanding Participation Interest in such Participated Mortgage Loan, if Bank reasonably determines at any time, that:  (i) any representation or warranty

 

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made or deemed made by Seller to Bank under Sections 2.1 or 6.10 as to such Participated Mortgage Loan was false, misleading, or erroneous in any material respect at the time on or as of the Purchase Date for such Participated Mortgage Loan and such breach has an adverse material effect on such Participated Mortgage Loan or Bank’s rights therein; (ii) such Participated Mortgage Loan was not an Eligible Mortgage Loan on or as of the Purchase Date for such Participated Mortgage Loan or no longer qualifies as an Eligible Mortgage Loan anytime thereafter; (iii) any Mortgage Loan Document related to such Participated Mortgage Loan was erroneous, unsigned or incomplete in any material respect on the Purchase Date for such Participated Mortgage Loan and such error, lack of signature or incompleteness has not been corrected to the reasonable satisfaction of Bank within a commercially reasonable time period following such Purchase Date; (iv) any fraud occurred on the part of Seller or its agents or employees or of Borrower or any other Person with respect to the origination, underwriting, closing or funding of such Mortgage Loan; or (v) any of the Bank Document Deliverables for such Participated Mortgage Loan have not been delivered to the Custodian as and when required pursuant to the provisions of this Agreement.  In addition, if an Event of Default shall have occurred and be continuing, Bank shall have the right to require Seller, upon demand by Bank, to repurchase from Bank, in their entirety, all of Bank’s then-outstanding Participation Interests in the Participated Mortgage Loans identified in such demand.

 

(b)                                 In Bank’s sole and absolute discretion, Seller shall be required to immediately repurchase from Bank, in its entirety, all of Bank’s then-outstanding Participation Interest in any Aged Participated Mortgage Loan on the [***] day after the Purchase Date for such Participation Interest if such Aged Participated Mortgage Loan does not constitute a Retired Participated Mortgage Loan by such [***] day.  In addition, Seller shall automatically be required, whether or not Bank has made demand therefor, to immediately repurchase from Bank, in their entirety, all of Bank’s then-outstanding Participation Interests in any and all Participated Mortgage Loan upon the occurrence and continuation of an Event of Default under Sections 9.1(e) or (f) with respect to Seller.

 

(c)                                  To effect the repurchase of any Participation Interest required under this Section, Seller shall pay to Bank an amount equal to the applicable Repurchase Price for such Participation Interest, which amount shall be due and payable:  (i) on the date Bank has made demand for the repurchase of such Participation Interest, if such repurchase is required pursuant to Section 4.8(a); or (ii) on the [***] day after the Purchase Date for such Participation Interest, if such repurchase is required pursuant to Section 4.8(b).  Bank shall have the right to offset any amounts in the Pledged Account in order to effect full payment of any Repurchase Price when due and payable under this Section, and upon any such offset, Seller shall immediately deposit funds into the Pledged Account in the amount required to fully restore the Minimum Pledged Balance.

 

(d)                                 Upon Bank’s receipt from Seller of the full amount of the Repurchase Price for the Participation Interest in any Participated Mortgage Loan to be repurchased in its entirety by Seller from Bank pursuant to this Section, and so long as such payment is not disgorged or revoked by a court of competent jurisdiction:  (i) effective as of the date of

 

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receipt of such funds and the application by Bank of such funds pursuant to the terms of this Agreement, Seller shall have repurchased from Bank such Participation Interest in its entirety, and Bank’s respective Participation Percentage in such Participated Mortgage Loan and Seller’s respective Retained Percentage in such Participated Mortgage Loan shall be correspondingly adjusted such that Seller shall own 100% of such Mortgage Loan and such Mortgage Loan shall no longer be a Participated Mortgage Loan hereunder; and (ii) Bank shall thereafter deliver or cause to be delivered to Seller the Mortgage Note and any other Mortgage Loan Documents for such Participated Mortgage Loan then in the Custodian’s possession.

 

(e)                                  The provisions of this Section shall not limit or qualify any rights or remedies of Bank hereunder (including, without limitation, any rights or remedies of Bank under Section 4.6).

 

4.9                               Bank’s Direct Contact with Take-Out Purchasers.  Upon the occurrence and during the continuance of an Event of Default, Seller irrevocably authorizes Bank and its agents and representatives to directly deliver all pertinent documentation to, and communicate with, disclose to, receive from and share information with, any Take-Out Purchaser, which is related to any Participated Mortgage Loan which is to be purchased or has been purchased by such Take-Out Purchaser.

 

ARTICLE 5
  GENERAL PROVISIONS

 

5.1                               Conditions to Effectiveness of Agreement.  As a condition precedent to effectiveness of this Agreement, in addition to all other requirements set forth herein, Seller shall deliver to Bank all of the following, each being duly executed, endorsed, notarized where applicable and delivered and in form and content satisfactory to Bank in its commercially reasonable discretion:

 

(a)                                 This Agreement, the Blanket Assignment, and the Pledge Agreement;

 

(b)                                 One (1) or more limited power of attorney in the form of Exhibit A executed by Seller;

 

(c)                                  All financing statements required by Bank, including a UCC-1 financing statement identifying Seller, as debtor, and Bank, as secured party, which covers the Collateral, and Seller hereby authorizes Bank and its representatives to execute, deliver and file of record all such financing statements;

 

(d)                                 Such signature cards, depository account agreements, USA PATRIOT Act forms and information, and such other documents and instruments, as Bank may require for Seller to establish at Bank, the Pledged Account, the Participation Account and the Remittance Account or to otherwise implement the arrangements contemplated herein;

 

(e)                                  Evidence that all necessary action on the part of Seller has been taken with respect to the execution and delivery of the Warehouse Documents and the performance of

 

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the matters contemplated thereby, so that this Agreement and all of the other Warehouse Documents shall be valid and binding upon each Person executing and delivering the same.  Such evidence shall include organizational documents, resolutions, and a certificate of incumbency for Seller;

 

(f)                                   For Seller, true, complete and correct copies of the documents evidencing the formation and governance of the operations and affairs of such entity, together with all amendments thereto;

 

(g)                                  For Seller, a certificate of existence and good standing showing that such entity is in good standing under the Laws of the state of its formation and certificates indicating that such entity has qualified to transact business and is in good standing in all other states where it transacts business;

 

(h)                                 Evidence that Seller has received any and all licenses, permits, approvals and other consents under any and all applicable Laws to permit Seller to lawfully engage in the Mortgage Loan Activities, and evidence that the same are currently in existence and good standing; and

 

(i)                                     Such other documents, information and materials as Bank may reasonably require to be delivered or caused to be delivered by Seller to Bank prior to the execution of this Agreement by Bank.

 

5.2                               Termination; Burn-Down.

 

(a)                                 Seller’s rights hereunder to submit any Request to Bank shall automatically terminate on the Advance Request Termination Date.

 

(b)                                 Notwithstanding anything herein to the contrary, and without limiting Bank’s rights and remedies under Section 9.2, prior to the Advance Request Termination Date, either Party may immediately terminate for any reason whatsoever Seller’s rights hereunder to submit any Request to Bank to purchase a Participation Interest by providing written notice thereof to the other Party.  It is understood that the Parties intend the continuation of this Agreement by Bank (and, accordingly, the continuation of Seller’s rights hereunder to submit any Request to Bank for Bank to purchase a Participation Interest) will be based upon the quality of the Mortgage Loans owned by Seller and Seller’s performance of its obligations in connection therewith and herewith and also based upon market conditions and the business objectives of Bank and Seller which may change from time to time.

 

(c)                                  Any and all outstanding Participation Interests in Participated Mortgage Loans owned by Bank on or before the Advance Request Termination Date shall continue to be subject to the terms and conditions of this Agreement.  Unless extended by a written agreement executed by Seller and Bank, this Agreement shall automatically terminate and cease to be in force and effect (except with respect to the provisions of this Agreement which expressly survive termination) without any action or notice upon such time as:  (i) Seller shall no longer have any rights hereunder to submit any Request to Bank to

 

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purchase a Participation Interest; (ii) each Participated Mortgage Loan constitutes a Retired Participated Mortgage Loan; (iii) Bank has received full, final and indefeasible payment of all other amounts due and payable by Seller to Bank pursuant to the terms hereof and any other Warehouse Document; (iv) Seller has fully performed and discharged each of its duties, covenants and obligations under each Warehouse Document; and (v) Bank has remitted to Seller all amounts, if any, required hereunder to be remitted by Bank to Seller hereunder.

 

5.3                               Reserved.

 

5.4                               Seller’s Accounts.

 

(a)                                 Seller shall at all times during the term of this Agreement maintain each Restricted Account with Bank.  With respect to each Restricted Account, Seller may deposit funds into the Restricted Account, however Seller shall not be permitted to withdraw, transfer or otherwise exercise any rights to access any funds held therein and Seller shall have no rights to exercise dominion or control over the Restricted Account.

 

(b)                                 Seller shall at all times during the term of this Agreement maintain the Remittance Account with Bank.  Subject to the terms and conditions of this Agreement and the other Warehouse Documents, Seller shall be permitted to withdraw, transfer and otherwise exercise rights to access any funds held therein; provided, that notwithstanding the foregoing, upon the occurrence of an Event of Default, Seller shall not be permitted to withdraw, transfer or otherwise exercise any rights to access any funds held therein and Seller shall have no rights to exercise dominion or control over the Remittance Account.

 

(c)                                  Concurrently with the execution hereof Seller shall deposit into the Pledged Account, and thereafter for the duration of this Agreement Seller shall maintain in the Pledged Account, good funds in an amount not less than the Minimum Pledged Balance.  Seller shall replenish funds in the Pledged Account, such that the Pledged Account is fully restored to the Minimum Pledged Balance, in the event Bank shall offset or apply funds from the Pledged Account in accordance with the terms of this Agreement.

 

(d)                                 In order to secure the prompt and complete performance by Seller of its Repurchase/Sale Obligations, Seller does hereby pledge, assign and grant to Bank a continuing security interest in and to the Restricted Accounts, the Remittance Account and the other Collateral.  For this purpose, this Agreement shall constitute a security agreement in accordance with the UCC, and Bank shall have all the rights of a secured creditor with respect to such security, and Bank shall have the right to hold and “freeze” such Accounts and the funds maintained therein upon the occurrence of an Event of Default.  Without limiting any rights and remedies available to Bank hereunder, upon the occurrence and continuation of an Event of Default, Bank may exercise the right to offset and apply all or any portion of the funds of Seller held in one or more of the Accounts towards the payment of all or any portion of any amount due and payable by Seller to Bank hereunder in connection with Seller’s Repurchase/Sale Obligations.  Bank is hereby authorized to debit funds from the Accounts in accordance with the provisions of this Agreement without any notice to or permission from Seller, provided that any funds in excess of amounts necessary

 

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to pay Bank any amounts due pursuant to this Agreement or any other Warehouse Document shall be returned to Seller upon Seller’s request.

 

5.5                               Subordination.  It is expressly understood and agreed that all of Seller’s right, title and interest in and to any Participated Mortgage Loan (including Seller’s servicing rights, if any) are subordinate and inferior to Bank’s Participation Interest in such Participated Mortgage Loan, from and after the Purchase Date for such Participated Mortgage Loan, until such Participated Mortgage Loan becomes a Retired Participated Mortgage Loan.

 

5.6                               Power of Attorney.  Upon the occurrence and continuation of an Event of Default, Seller hereby irrevocably appoints Bank and each officer of Bank as its attorney-in-fact, with full power of substitution, for, on behalf of, and in the name of Seller, to:  (a) endorse and deliver to any Person any notes, checks, drafts, money orders or other instruments of payment coming into Bank’s possession and representing any payment made on or with respect to any Participated Mortgage Loan or otherwise received in connection with any Participated Mortgage Loan (including the proceeds from the sale of any such Participated Mortgage Loan received from a Take-Out Purchaser), and any collateral and any Take-Out Purchase Agreement therefor; (b) prepare, complete, execute, deliver and record, and do anything else necessary or desirable to effect, (i) any endorsement to Bank, any Take-Out Purchaser or any other Person, of any Mortgage Note evidencing a Participated Mortgage Loan, or (ii) any transfer, assignment or conveyance to Bank, any Take-Out Purchaser or any other Person, of any or all right, title and interest in and to any Mortgage Note and the Mortgage Loan Documents related thereto in which Bank has purchased a Participation Interest (including servicing rights); (c) do anything necessary or desirable to effect the sale, transfer, assignment or conveyance, of any or all right, title and interest of Seller and/or Bank in and to any Participated Mortgage Loan and the related Mortgage Loan Documents related thereto to any Take-Out Purchaser or any other Person; (d) commence, prosecute, settle, discontinue, defend, or otherwise dispose of any claim relating to any Take-Out Purchase Agreement or any Participated Mortgage Loan; (e) sign Seller’s name wherever appropriate, as determined by Bank, to effectuate the purposes of this Agreement; and (f) to take any such further action as Bank may deem appropriate, and to act under changed circumstances, the exact nature of which may not be currently foreseen or foreseeable, in order to fully and completely effectuate Bank’s rights under this Agreement.  The powers and authorities herein conferred on Bank may be exercised by Bank through any Person who, at the time of the execution of a particular instrument, is an officer of Bank.  The limited power of attorney conferred by this Section is granted for a valuable consideration and is coupled with an interest and, therefore, is irrevocable so long as any duties or obligations to Bank under this Agreement or any other Warehouse Document, or any part thereof, shall remain unpaid or otherwise unsatisfied, and so long as Bank may elect to purchase any Participation Interests hereunder.  The limited power of attorney conferred hereunder shall not be affected by any subsequent disability or incapacity of the principal or by the lapse of time.  To facilitate processing, Bank may request that Seller execute and deliver a separate, limited power of attorney in such form and content required by Bank, but any failure of Bank to request or obtain any such separate power of attorney instrument shall not mitigate or undermine the rights and powers conferred under this Section.

 

5.7                               Private Recording Systems.  Bank reserves the right to require that any or all Participated Mortgage Loans be registered and processed on the MERS® System.

 

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5.8                               Regulatory Compliance.  With respect to each Participated Mortgage Loan, Seller hereby represents, warrants and certifies to Bank that such Participated Mortgage Loan and each related Mortgage Loan Document was originated, made, negotiated, executed and delivered pursuant to and in accordance with the applicable terms and provisions of the Federal Truth in Lending Act, the Real Estate Settlement Procedures Act, the Equal Credit Opportunity Act, Dodd-Frank Act, the Interagency Appraisal Guidelines, and all other applicable Laws relating to the financing of Residential Real Property, each of which Laws have been fully satisfied and strictly complied with by Seller and such other applicable parties, and that Bank shall have no obligation with respect to the compliance with any such Laws, or the filing of any reports, certifications or other documents or items with or to any Borrower, any Governmental Authority, or any other Person whatsoever (other than any obligations Bank may have to its regulators).  IN THIS RESPECT, SELLER WILL RELEASE, HOLD HARMLESS AND INDEMNIFY EACH INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL LOSSES WHICH ARE INCURRED BY OR ASSERTED AGAINST BANK IN CONNECTION WITH ANY BREACH OR INACCURACY OF THE TERMS CONTAINED IN THIS SECTION.

 

5.9                               Verifications.  After such Mortgage Loan has become a Participated Mortgage Loan, Bank shall have the right and authority to re-verify all information obtained by Seller regarding the related Borrower, including verification of employment, verification of deposit and all information included in each related Loan Application.  Seller shall cooperate with Bank in such re-verification process.  Further, Bank shall have full right and authority to obtain an updated credit report on any Borrower, provided that if Bank shall obtain any such credit report it shall utilize a query that does not in any way negatively impact the related Borrower’s credit score.  In such verification process, Seller shall, upon the request of Bank, supply a copy of Borrower’s handwritten, typed or signed Loan Application.

 

5.10                        Servicing Responsibilities.  Seller will have the responsibility for the administration and servicing of each Participated Mortgage Loan until such Mortgage Loan is sold to an Take-Out Purchaser or otherwise becomes a Retired Participated Mortgage Loan.  With respect to each Participated Mortgage Loan, Seller shall be responsible for the period from and after the purchase of the Participation Interest in such Participated Mortgage Loan for the execution of all appropriate notices and all other acts necessary to protect title in Seller and Bank, or their respective successors or assignees, as the case may be, as to the ownership of such Participated Mortgage Loan and for preserving all rights in and to such Participated Mortgage Loan and administering it in all material respects consistent with applicable Law, and for servicing the same in a manner consistent with industry practices and Agency guidelines.

 

5.11                        Remittance.  In connection with Seller’s servicing of the Participated Mortgage Loans, upon the occurrence and continuation of any Event of Default, Seller will, or will cause its subservicer to, forward directly to Bank, Bank’s pro rata share of all funds received under each such Mortgage Loan on or before the remittance date on which Seller would be entitled to remittances as specified in Seller’s servicing or subservicing agreement.  Nothing contained in this Section authorizes or permits payment to Seller of any amounts which are otherwise required under this Agreement to be paid directly to Bank (including any and all funds paid by an Take-Out Purchaser for the purchase of a Participated Mortgage Loan).  All funds received by Seller pursuant to this Section shall be held in accordance with Section 5.12.

 

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5.12        Trust Provisions.

 

(a)           Any and all amounts required hereunder to be paid to Bank shall be paid to Bank pursuant to the terms and conditions of this Agreement.  Without limiting the foregoing, any and all Bank Payment Deliverables received by Seller at any time (and any and all Bank Payment Deliverables that are or are deemed to be in or under the custody, possession or control of Seller at any time) shall be held in trust by Seller as the property and for the benefit of Bank.  In such event, Seller shall (i)hold in trust, as the property and for the benefit of Bank, the Bank Payment Deliverables and (ii) (A)immediately turn over and deliver to Bank each Bank Payment Deliverable, in kind, and in the exact form received, no later than three (3) Business Days after receipt thereof (or, if an Event of Default has occurred and is continuing, no later than one (1) Business Day after receipt thereof), and concurrently, endorse to Bank any instrument or other form of payment payable to Seller, but which is to be paid to Bank under this Agreement, and (B) not release any Bank Payment Deliverable to any other Person without Bank’s prior written consent. Nothing contained in this Section authorizes or permits payment to Seller or any other Person (other than Bank) of any amounts which are required under this Agreement to be paid directly to Bank.

 

(b)           Any and all Bank Document Deliverables required hereunder to be delivered to the Custodian shall be delivered to the Custodian pursuant to the terms and conditions of this Agreement.  Without limiting the foregoing, any and all Bank Document Deliverables received by Seller at any time (and any and all Bank Document Deliverables that are or are deemed to be in or under the custody, possession or control of Seller at any time) shall be held in trust by Seller as the property and for the benefit of Bank.  In such event, Seller shall (i)hold in trust for Bank, and as the property and for the benefit of Bank, the Bank Document Deliverables and (ii) (A)immediately turn over and deliver to the Custodian each Bank Document Deliverable no later than three (3) Business Days after receipt thereof (or, if an Event of Default has occurred and is continuing, no later than one (1) Business Day after receipt thereof) (except that Seller may deliver the applicable Bank Document Deliverables to the Custodian by such later time, if any, permitted by the express terms of this Agreement or the Custodial Agreement) and (B) not release any Bank Document Deliverable to any Person (other than the Custodian).  Nothing contained in this Section authorizes or permits the delivery to Seller or any other Person (other than the Custodian) of any Bank Document Deliverables which are required under this Agreement and the Custodial Agreement to be delivered directly to the Custodian.

 

(c)           The Mortgage Loan Files for Participated Mortgage Loans (other than any portions thereof which constitute Bank Document Deliverables or which have been delivered to Bank) shall be held in trust by Seller as the property and for the benefit of Bank.  Seller shall (i) hold in trust for Bank, and as the property and for the benefit of Bank, such Mortgage Loan Files and (ii) (A) upon the occurrence and during the continuance of an Event of Default, turn over and deliver to Bank such Mortgage Loan Files no later than three (3) Business Days after Bank’s request, and (B) not release such Mortgage Loan Files to any Person (other than Bank) except as otherwise expressly permitted hereunder.

 

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5.13        Application of Payments.  Any and all sums received by Bank in connection with any Participation Interest in a Participated Mortgage Loan (including, subject to Section 4.4, the proceeds from the sale to a Take-Out Purchaser of a Participated Mortgage Loan) shall be applied and disbursed by Bank in the following order upon Bank’s actual receipt of such sums:

 

(a)           To the payment of all outstanding fees, costs and expenses assessed or incurred by Bank and chargeable under this Agreement or any other Warehouse Document with respect to such Participated Mortgage Loan;

 

(b)           To the payment of Bank’s accrued but unpaid interest with respect to such Participated Mortgage Loan at the Participation Interest Rate;

 

(c)           To the payment of all outstanding principal under such Participated Mortgage Loan allocable to Bank’s Participation Interest therein;

 

(d)           Upon the occurrence and continuation of an Event of Default only, if required by Bank, to the payment of any outstanding amounts set forth in clauses (a), (b) and (c) of this Section with respect to any other Participated Mortgage Loan, to be applied and disbursed by Bank in the order set forth in such clauses above;

 

(e)           To any other amounts due by Seller to Bank hereunder, including any amounts necessary to replenish the Pledged Account in order to maintain the Minimum Pledged Balance; and

 

(f)            Thereafter, as otherwise required to be in compliance with this Agreement.

 

If the amount received by Bank in connection with the sale of a Participated Mortgage Loan to a Take-Out Purchaser is insufficient to pay any and all amounts payable to Bank under clauses (a), (b) and (c) of this Section with respect to such Mortgage Loan, then Bank shall be entitled to offset and apply available funds in the Pledged Account to satisfy the deficiency in such amounts payable to Bank.  In such event, if after resorting to the foregoing described sources of payment, any amounts remain payable to Bank under clauses (a), (b) or (c) of this Section with respect to such Participated Mortgage Loan, then Seller shall immediately pay such amounts to Bank on demand.

 

In the event that Bank offsets or applies any funds in the Pledged Account to satisfy amounts payable to Bank, then Seller shall immediately deposit funds into the Pledged Account in the amount required to fully restore the Minimum Pledged Balance.  Bank shall be under no duty at any time to apply any amounts due from any Take-Out Purchaser or from any other Person with respect to any purchase of any Participated Mortgage Loan until Bank has actually received such amounts in immediately available funds.  Further, notwithstanding anything herein to the contrary, Bank shall be under no duty at any time to apply any amounts representing Take-Out Purchaser Payments except pursuant to the procedures set forth in this Section and Section 4.4.

 

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5.14        Warehouse Program Guide.

 

(a)           Seller agrees to materially comply at all times with all of the provisions of the Warehouse Program Guide (as amended by this Agreement) in effect from time to time.  Notwithstanding anything herein to the contrary, each Participated Mortgage Loan:  (i) shall be subject to the provisions of the Warehouse Program Guide (as amended by this Agreement) in effect as of the Purchase Date for such Participated Mortgage Loan; and (ii) shall not be subject to any material amendment, modification or supplement to the Warehouse Program Guide which occurs after the Purchase Date for such Participated Mortgage Loan.  The Warehouse Program Guide (as amended by this Agreement) is hereby incorporated into this Agreement by reference as if it was fully set forth herein.

 

(b)           Bank shall make available to Seller the Warehouse Program Guide by:  (i) emailing it to Seller; or (ii) by providing a written copy of the Warehouse Program Guide to Seller, in each case Bank will make a commercially reasonable effort to provide notice prior to the proposed effective date of such version of the Warehouse Program Guide.  Bank may, in its sole discretion, amend, modify or supplement the Warehouse Program Guide from time to time.  If Bank shall have provided to Seller written copies of any amendments, modifications or supplements to the Warehouse Program Guide, then such amendments, modifications or supplements to the Warehouse Program Guide shall become effective as to Seller upon Seller’s receipt thereof.

 

(c)           Notwithstanding the foregoing or any other provision of this Agreement or the Warehouse Program Guide to the contrary, the Warehouse Program Guide is hereby amended with respect to Seller as follows:

 

(i)            The entire section of the Warehouse Program Guide entitled “Lending Guidelines” (and any similar section included in any future version of, or amendments to, the Warehouse Program Guide relating to lending or underwriting guidelines) is hereby deleted in its entirety and replaced with the following:

 

“Each Participated Mortgage Loans will be underwritten in accordance with the applicable Agency guidelines in effect as of the date of origination of such Participated Mortgage Loan, or if such Participated Mortgage Loan would not be eligible for sale to any Agency, Seller’s underwriting guidelines as approved by Bank and in effect as of the date of origination of such Participated Mortgage Loan.”

 

(ii)           Notwithstanding any provision of the Warehouse Program Guide, Seller shall not be obligated to upload any borrower application to Bank’s systems.

 

(d)           Each submission of a Request by Seller to Bank shall constitute:  (i) the ratification by Seller of the provisions of the Warehouse Program Guide in effect as of the Purchase Date (as amended by this Agreement) for the Mortgage Loan that is the subject of the Request; and (ii) the agreement by Seller to be bound by all of the provisions of the Warehouse Program Guide in effect as of such Purchase Date (as amended by this Agreement) applicable to the Mortgage Loan that is the subject of the Request.

 

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ARTICLE 6
 REPRESENTATIONS AND WARRANTIES

 

Seller represents and warrants to Bank, to Seller’s knowledge and belief, after due inquiry, as of the Effective Date and on the date of each Advance hereunder:

 

6.1          Organization and Good Standing.  Seller is duly organized, validly existing, and in good standing under the Laws of the state of its formation, and is duly qualified to transact business and is in good standing in each jurisdiction where the nature and extent of Seller’s business and property requires the same, except where failure to so qualify would not be reasonably likely (individually or in the aggregate) to have a Material Adverse Effect.

 

6.2          Authorization and Power.  Seller has:  (a) the requisite power and authority to, and has taken all action necessary to authorize it to, execute, deliver and perform this Agreement, the other Warehouse Documents to which Seller is a party, and all of the other documents herein contemplated to be executed by Seller or otherwise to be executed by Seller from time to time in connection herewith; (b) all requisite authority, power, licenses, permits and franchises to conduct its business; and (c) received, has in its possession, and will maintain in full force and effect and in good standing, any and all federal, state and local licenses or approvals which may be necessary for Seller to undertake the actions required of it pursuant to this Agreement and to conduct its business.  No consent or approval of any Person is required (other than such consents and approvals already obtained by Seller) in order for Seller to legally execute, deliver, and comply with the terms of the Warehouse Documents to which it is a party.

 

6.3          No Conflicts.  Not the execution and delivery of this Agreement, the other Warehouse Documents to which Seller is a party, or any other documents to be executed in connection herewith, nor the consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or with the terms and provisions thereof, will contravene or materially conflict with any applicable Law, or any loan agreement, lease, promissory note, indenture, mortgage, deed of trust, or other agreement or instrument to which Seller is a party or by which Seller or any of its Property may be bound or be subject, or violate any provision of the documents creating or governing Seller.

 

6.4          Enforceable Obligations.  This Agreement and each other Warehouse Document to which Seller is or will become a party are or upon execution will be the legal, valid and binding obligations of Seller, are enforceable in accordance with their respective terms, except as limited by bankruptcy, insolvency or other Laws of general application relating to the enforcement of creditors’ rights.

 

6.5          Financial Condition.  Seller has delivered to Bank copies of its most recent balance sheet, and the related statements of income, stockholders’ equity and changes in financial position for the year ending on the date indicated therein, audited by independent certified public accountants; such financial statements are true and correct in all material respects, fairly present the financial condition of Seller as of such date and have been prepared in accordance with GAAP as of the date hereof; there are no obligations, liabilities or indebtedness (including contingent and indirect liabilities and obligations or unusual forward or long term commitments) of Seller which

 

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are not reflected in such financial statements; and no change having a material adverse effect has occurred in the financial condition or business of Seller since the date of such financial statements.

 

6.6          Material Agreements.  To Seller’s knowledge, Seller is not in default under any loan agreement, mortgage, security agreement or other material agreement or obligation to which it is a party or by which any of its Properties is bound, and the execution of this Agreement and the other Warehouse Documents to which Seller is a party, and Seller’s performance of its duties and obligations hereunder and thereunder, will not cause a default under any loan agreement, mortgage, security agreement or other material agreement or obligation to which Seller is a party or by which any of its Properties is bound.

 

6.7          Disclosure of Proceedings.  Except as previously disclosed to Bank in writing prior to the Effective Date or pursuant to Section 7.15, there are no:  (a) (i) Proceedings by any Governmental Authority pending, or to the knowledge of Seller, threatened against Seller or (ii) any other Proceedings pending, or to the knowledge of Seller, threatened against Seller which, if determined adversely to Seller, would have a Material Adverse Effect; or (b) outstanding or unpaid judgments against Seller that will have a Material Adverse Effect.

 

6.8          Taxes.  All tax returns required to be filed by Seller in any jurisdiction have been filed.  All taxes, assessments, fees and other governmental charges upon Seller or upon any of its Properties, income or franchises (which, if unpaid, would have a Material Adverse Effect on Seller or its ability conduct its business or perform its obligations under this Agreement or any other Warehouse Document) have been paid (if applicable, prior to the time that such taxes, assessments, fees or other governmental charges could give rise to a Lien), other than those being protested in good faith by appropriate proceedings, with respect to which Seller has set aside reasonable and appropriate reserves.

 

6.9          No Approvals Required.  Neither the execution and delivery by Seller of this Agreement and the other Warehouse Documents to which Seller is a party, nor the consummation by Seller of any of the transactions contemplated hereby or thereby, requires the consent or approval of, the giving of notice to, or the registration, recording or filing of any document with, or the taking of any other action in respect of, any Governmental Authority or other Person.

 

6.10        Representations Regarding Participated Mortgage Loans.  Each Participated Mortgage Loan is in all material respects in compliance with the provisions of the Warehouse Program Guide (as amended by this Agreement).  Without limiting the generality of the foregoing, Seller hereby represents and warrants to Bank with respect to each Participated Mortgage Loan:

 

(a)           (i) Seller has acquired all right, title and interest in and to the Participated Mortgage Loan, free and clear of any Liens or other interest of any Person (other than Seller) in and to the Participated Mortgage Loan; (ii) the related Mortgage Note contains all necessary endorsements required to render such Mortgage Note payable to the order of Seller, and such endorsements are valid and enforceable under applicable Law, except where such enforceability may be limited by bankruptcy or other similar federal or state laws limiting the rights of creditors generally, whether in law or in equity; and (iii) all right, title and interest in and to the documents evidencing the Participated Mortgage Loan have been transferred and assigned to Seller, free and clear of any Liens or other interests of any

 

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Person (other than Seller), and such transfer and assignment is valid and enforceable under applicable Law, except where such enforceability may be limited by bankruptcy or other similar federal or state laws limiting the rights of creditors generally, whether in law or in equity.

 

(b)           The Mortgage Loan Documents for such Participated Mortgage Loan have been duly executed by the Borrower, and where applicable, acknowledged, and recorded; and the Participated Mortgage Loan is valid and complies with all applicable lending Laws and Laws applicable to the sale of the Participated Mortgage Loan to Seller.

 

(c)           There has been no assignment, sale or hypothecation of the Participated Mortgage Loan by Seller, and Seller owns the Participated Mortgage Loan free and clear of all Liens and other encumbrances.

 

(d)           The full amount of the Participated Mortgage Loan has been funded in immediately available funds; the outstanding principal balance of the Participated Mortgage Loan is as stated in the Request; all costs, fees and expenses incurred in making, closing and recording the Participated Mortgage Loan has been paid; no part of the related Mortgaged Property has been released from the Lien of the Security Instrument; the terms of the Participated Mortgage Loan have in no way been changed or modified from that represented in the Request.

 

(e)           The related Mortgaged Property is in good repair and is free from substantial damage.

 

(f)            All applicable Laws have been complied with, including (as applicable) the S.A.F.E. Act, the Dodd Frank Act, the Interagency Appraisal Guidelines, the Real Estate Settlement Procedures Act, Regulation X, the Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting Act, the Fair Housing Act, the Flood Disaster Protection Act, the Federal Truth in Lending Act of 1968 and Regulation Z, the Depository Institutions Deregulation and Monetary Control Act of 1980, the Garn St. Germain Depository Institutions Acts of 1982, the Cranston Gonzales Affordable Housing Act, the Home Mortgage Disclosures Act, and regulations issued pursuant thereto, usury limitations, and all conditions within the control of Seller as to the validity of the insurance or guaranty as required by the National Housing Act of 1934, and the rules and regulations thereunder, or as required by the Servicemen’s Readjustment Act of 1944, and the rules and regulations thereunder, or by the mortgage insurers and other insurers, have been properly satisfied, and said insurance or guaranty is valid and enforceable or is in process.

 

(g)           The endorsement of the related Mortgage Note in blank by or on behalf of Seller (whether executed by Seller or by Bank pursuant to the power of attorney herein granted in connection with any Event of Default) and the assignment of the related Mortgage Note, Security Instrument and the other Participated Mortgage Loan documents (whether executed by Seller or by Bank pursuant to the power of attorney herein granted in connection with any Event of Default) will be valid and enforceable under all applicable Law.

 

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(h)           At the time the Participated Mortgage Loan was originated or purchased by Seller, such Participated Mortgage Loan complied fully with Seller’s underwriting guidelines, which have been approved in writing in advance by Bank, in effect as of the origination (with respect to any Participated Mortgage Loan originated by Seller) or purchase date (with respect to any Participated Mortgage Loan purchased by Seller) of such Participated Mortgage Loan.

 

(i)            All conditions as to the validity of the applicable insurance as required by all applicable Laws and by private mortgage insurance companies or other insurers, if and to the extent applicable, will have been properly satisfied and said insurance is valid and enforceable.

 

(j)            Seller has obtained, and has in its possession, in due form, all documentation (except those documents executed at the closing of the Participated Mortgage Loan, which are or will be, at such time, in the possession of the Escrow Agent, or has been submitted for recording and not yet returned to Seller and except for the original executed Mortgage Note, which is either in the possession of the Escrow Agent or has been shipped or delivered by Seller or Escrow Agent to the custody of Custodian) required to legally effect such Participated Mortgage Loan prior to or upon closing, and all such documentation will be held and delivered to Bank or its designee pursuant to the terms and conditions of this Agreement.

 

(k)           Other than payments due but not yet [***] days or more delinquent, no default will exist as to the Participated Mortgage Loan.

 

(l)            The Participated Mortgage Loan is valid and, to Seller’s knowledge, secured by a valid first Lien on the related Mortgaged Property, and the related Mortgaged Property is free and clear of all Liens, claims and encumbrances having priority over the Lien of the Participated Mortgage Loan except for Permitted Encumbrances.  A Title Policy will be furnished to Bank or its designee and will insure Seller its successors and/or assigns) as the holder of the Mortgage Note for the Participated Mortgage Loan, and its successors and assigns, with respect to the Participated Mortgage Loan, without exceptions other than Permitted Encumbrances, as holding the first Lien against the related Mortgaged Property for the full amount of the Participated Mortgage Loan.

 

(m)          No payment required under the Participated Mortgage Loan is [***] days or more delinquent nor has any payment under the Participated Mortgage Loan been [***] days or more delinquent at any time since the origination of the Participated Mortgage Loan; there are no defaults by the Borrower or, to Seller’s knowledge, the maker of the Participated Mortgage Loan or any of its successors or assigns in complying with the terms of the Participated Mortgage Loan; to Seller’s knowledge, all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges relating to any of the related Mortgaged Property which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid.

 

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(n)           Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds by a Person other than the Borrower, directly or indirectly, for the payment of any amount required by the Participated Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the Participated Mortgage Loan proceeds, whichever is greater, to the day which precedes by one month the due date of the first installment of principal and interest.

 

(o)           To Seller’s knowledge, all of the improvements which are included for the purpose of determining the appraised value of the related Mortgaged Property lie wholly within the boundaries of the Mortgaged Property and do not encroach upon building restriction lines, and no improvements on adjoining properties encroach upon the Mortgaged Property (except those encroachments which the title insurer has affirmatively insured over).

 

(p)           With respect to each Correspondent Originated Mortgage Loan in which Bank elects to purchase a Participation Interest, Seller represents and warrants to Bank that:  (i) Seller is not a “mortgage originator” or “loan originator” under applicable Law with respect to such Correspondent Originated Mortgage Loan; and (ii) the originator of such Correspondent Originated Mortgage Loan is a registered and licensed “mortgage originator” and “loan originator” under applicable Law with respect to such Correspondent Originated Mortgage Loan, and to Seller’s knowledge, such originator is in compliance with all other applicable Laws with respect to such Correspondent Originated Mortgage Loan.

 

(q)           With respect to each Broker Originated Mortgage Loan, Seller represents and warrants to Bank that:  (i) the originator and the related mortgage loan broker are each a “mortgage originator” or “loan originator” under applicable Law with respect to such Broker Originated Mortgage Loan; and (ii) the mortgage loan broker for such Broker Originated Mortgage Loan is a registered and licensed “mortgage originator” and “loan originator” under applicable Law with respect to such Broker Originated Mortgage Loan, and to Seller’s knowledge, such mortgage loan broker is in compliance with all other applicable Laws with respect to such Broker Originated Mortgage Loan.

 

For purposes of this Section 6.10 and the representations and warranties set forth in this Section, a breach of a representation or warranty shall be deemed to have been cured with respect to a Mortgage Loan if and when (i) the event, circumstance or condition that gave rise to such breach no longer exists at the time Seller shall have obtained knowledge of such breach, (ii) such representation or warranty is in all material respects true and correct, and (iii) such breach no longer adversely effects the applicable Mortgage Loan, Bank’s Participation Interest therein or the other transactions contemplated hereby.  Except for breaches of any representations or warranties that are deemed to be cured pursuant to the preceding sentence, Seller shall notify Bank promptly and as soon as practicable after obtaining knowledge of any breach of a representation or warranty set forth in this Section.

 

6.11        Other Warehousing Facilities.  Any and all mortgage warehousing facilities of Seller (other than with Bank) in effect as of the Effective Date hereof are identified on Exhibit G.

 

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6.12        Affiliate Escrow Agents.  Any and all title companies and other Persons that provide closing services in connection with residential mortgage loan transactions which are directly or indirectly owned or controlled by Seller or under common ownership or control with Seller (each an “Affiliate Escrow Agent”) as of the Effective Date are identified on Exhibit H. Seller has delivered to Bank true, correct and complete copies of the financial statements for each Affiliate Escrow Agent.

 

6.13        Survival of Representations.  All representations and warranties by Seller herein shall survive the termination or expiration of this Agreement and the making of any and all Advances.  Any and all investigations at any time made by or on behalf of Bank shall not limit, impair or diminish Bank’s right to rely on any and all representations and warranties by Seller herein.

 

ARTICLE 7
  AFFIRMATIVE COVENANTS

 

At all times prior to the Agreement Termination Date (and thereafter if expressly required hereunder), Seller covenants and agrees with Bank that:

 

7.1          Financial Statements and Reports.  Seller shall furnish to Bank the following, all in form and detail satisfactory to Bank:

 

(a)           Promptly after becoming available, and in any event within ninety (90) days after the close of each fiscal year of Seller, an audited balance sheet of Seller as of the end of such year, and an audited statement of income and retained earnings of Seller for such year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, accompanied by the related report of independent certified public accountants acceptable to Bank, which report shall be to the effect that such statements have been prepared in accordance with GAAP;

 

(b)           If requested by Bank, on or before the last day of any calendar month, a statement of income and expenses of Seller for the prior calendar month;

 

(c)           Promptly after becoming available, and in any event within forty-five (45) days after the close of each fiscal quarter of Seller, a balance sheet of Seller as of the end of such fiscal quarter, a statement of income and retained earnings for such fiscal quarter and an operating statement of Seller for such fiscal quarter setting forth in comparative form the corresponding figures for the corresponding fiscal quarter of the preceding fiscal year, prepared in accordance with GAAP and certified by the principal financial officer of Seller (provided that Bank agrees that Seller’s timely delivery of the Compliance Certificate in the form set forth in Exhibit E-1 hereof shall satisfy such requirement);

 

(d)           Weekly hedging reports, in such form and content required by Bank; and

 

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(e)           Such other information concerning the business, Properties or financial condition of Seller, or regarding any Participated Mortgage Loan, as Bank may reasonably request.

 

7.2          Taxes and Other Liens.  Seller shall timely pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or upon its income or upon any of its Property as well as all claims of any kind (including claims for labor, materials, supplies and rent) which, if unpaid, might become a Lien upon any or all of its Property (and have a Material Adverse Effect) or the Mortgage Loans; provided, however, Seller shall not be required to pay any such tax, assessment, charge, levy or claim regarding its Property (other than with respect to Participated Mortgage Loans) if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings diligently conducted by or on behalf of Seller and if Seller shall have set up reserves therefor adequate under GAAP.

 

7.3          Maintenance.  Seller shall:  (a) maintain its existence and all of its licenses, permits, franchises, qualifications and rights that are necessary in order for Seller to conduct its business; and (b) observe and comply in all material respects with all applicable Laws.  Without limiting the generality of the foregoing, Seller shall at all times maintain all Agency Approvals required with respect to the Participated Mortgage Loans in good standing.

 

7.4          Further Assurances.  Seller shall promptly cure any defects in the execution and delivery of this Agreement and any other Warehouse Document.  Seller shall, at its expense, promptly execute and deliver to Bank, upon Bank’s 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, the other Warehouse Documents and all documents executed in connection herewith.  In addition, Seller will provide Bank with any reasonable documentation and information required by Bank relating to the business and background of Seller and its directors, officers, employees and representatives, and any certifications reasonably required by Bank to verify Seller’s compliance with any applicable Laws.

 

7.5          Accounts.  To facilitate the transfer of funds contemplated by this Agreement, Seller shall establish and maintain at Bank each of the Accounts.

 

7.6          Use of Electronic Platform.  Seller shall be required to use the Internet-based electronic platform established by Bank (as modified, replaced, enhanced or upgraded by Bank from time to time, the “Electronic Platform”) in connection with the purchase and sale of Participation Interests and the other transactions contemplated in this Agreement, subject to the following:

 

(a)           Bank hereby grants to Seller a revocable, non-exclusive, non-transferable license to access and use the Electronic Platform solely for the limited purpose of facilitating the sale by Seller to Bank of Participation Interests and the other transactions contemplated by this Agreement.  Seller shall not permit any Person to utilize the Electronic Platform other than employees or agents of Seller who have been approved in advance by Bank in writing (each an “Authorized User”).

 

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(b)           Seller shall take all reasonable precautions to prevent unauthorized Persons from obtaining access to or use of the Electronic Platform.  Bank shall have the right to rely upon any information received in the Electronic Platform from any Person using a password assigned to an Authorized User, and will incur no liability for such reliance.  Seller shall be responsible for securing such passwords and shall be responsible for any actions taken using such passwords.  In the event of any breach of the security measures established by Bank, including use of the Electronic Platform by any unauthorized Person, Bank shall have the right to immediately terminate or suspend access to the affected portion of the Electronic Platform by Seller and their Authorized Users until such time such breach has been secured to Bank’s satisfaction.

 

(c)           Bank shall not be required to perpetually license, maintain, service or support the Electronic Platform.  Bank may at any time discontinue the Electronic Platform by providing written notice thereof to Seller.  In addition, Bank may at any time terminate the license granted to Seller to use, and Seller’s access to, the Electronic Platform by providing written notice thereof to Seller.  Bank reserves the right to modify, replace, enhance or upgrade the Electronic Platform from time to time in Bank’s sole discretion.  If Bank elects to terminate the Electronic Platform, it shall give Seller no less than sixty (60) days advance written notice of such intention and provide Seller with replacement procedures, reasonably acceptable to Seller, for conducting business pursuant to this Agreement.

 

(d)           SELLER UNDERSTANDS AND AGREES THAT THE ELECTRONIC PLATFORM IS BEING LICENSED, DELIVERED AND MADE AVAILABLE “AS IS”, “WHERE IS”, “WITH ALL FAULTS”, AND WITH ANY AND ALL LATENT AND PATENT DEFECTS, WITHOUT ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY BY BANK, AND BANK HEREBY DISCLAIMS AND SELLER HEREBY WAIVES ANY AND ALL IMPLIED REPRESENTATIONS, WARRANTIES AND COVENANTS.  EXCEPT AS EXPRESSLY STATED HEREIN, BANK HAS NOT MADE AND DOES NOT HEREBY MAKE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND BANK HEREBY DISCLAIMS AND RENOUNCES ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES.

 

(e)           Seller is fully aware of the inherent security risks of any Internet-based application (such as the Electronic Platform) and, in particular, the risk that unauthorized third-parties may through unauthorized use, “hacking”, “Trojan horses”, viruses or otherwise be able to access and manipulate the use of the Electronic Platform and the data made available thereby without Bank in any way being aware that the user is not Seller.  Seller voluntarily assumes all such risks.  SELLER WILL RELEASE HOLD HARMLESS AND INDEMNIFY EACH INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL LOSSES WHICH ARE RELATED TO ANY UNAUTHORIZED PARTY’S ACCESS, OBTAINED AS A RESULT OF SELLER’S ACCESS TO THE ELECTRONIC PLATFORM THAT RESULTS IN THE DIVERSION, MISAPPROPRIATION OR USE

 

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OF THE INFORMATION MADE AVAILABLE THROUGH THE ELECTRONIC PLATFORM OR SELLER’S FUNDS AT BANK OR OTHERWISE.  PROVIDED HOWEVER, THAT SELLER SHALL BE UNDER NO OBLIGATION TO HOLD HARMLESS AND INDEMNIFY THE INDEMNIFIED PARTY FOR ANY LOSSES THAT ARE A RESULT OF WILLFUL MISCONDUCT OR NEGLIGENCE BY THE BANK AND/OR ITS AGENTS.

 

(f)            Notwithstanding anything in this Section to the apparent contrary, the provisions of this Section shall not be deemed to limit or release Bank from its obligations under Section 10.26.

 

7.7          Reimbursement of Expenses.  Seller shall pay, upon demand by Bank, any and all reasonable and documented out-of-pocket fees and expenses incurred by Bank in negotiating or entering into, or in administering or enforcing its rights or remedies, under this Agreement or any other Warehouse Document, which amounts shall include all court costs, reasonable external attorneys’ fees (including for trial, appeal or other proceedings), reasonable fees of auditors and accountants, and investigation expenses reasonably incurred by Bank in connection with any such matters.  Seller and Bank shall otherwise each be responsible for their own out -of -pocket expenses unless expressly provided otherwise in this Agreement or any other Warehouse Document.  For the avoidance of doubt, the parties acknowledge and agree that Seller shall be responsible for paying directly to the Custodian all fees and expenses required to be paid by Seller to the Custodian under the Custodial Agreement, and Seller shall not be required to pay to Bank any amounts in connection with the custodial services provided by the Custodian thereunder unless otherwise expressly set forth in the Custodial Agreement.

 

7.8          Insurance.  Seller shall at all times maintain in force and effect such insurance required under the Warehouse Program Guide (as amended by this Agreement).  Without limiting the generality of the foregoing, such insurance shall be issued by such insurers, insure against such risks, be in such form, have such coverage amounts, deductibles, limits and retentions, contain such endorsements and otherwise be in such form, as required under the Warehouse Program Guide (as amended by this Agreement).

 

7.9          Accounts and Records.  Seller shall keep books of record and account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and activities, including the sale of any Participation Interests to Bank, in accordance with GAAP.

 

7.10        Books and Records.  Seller agrees to maintain customary books and records relating to the Participation Interests sold by Seller to Bank hereunder.  Upon request, Seller shall furnish to Bank copies of any of Seller’s books and records and financial statements relating to the Participation Interests purchased by Bank from Seller hereunder.

 

7.11        Mortgage Loan Files.  Except as expressly permitted or required hereunder, and subject to the provisions of Section 5.12, at all times after the Purchase Date for any Participated Mortgage Loan, Seller shall have and maintain the Mortgage File for such Participated Mortgage Loan.

 

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7.12        Document Retention.  With respect to each Participated Mortgage Loan, Seller will maintain in its files all records relating to such Participated Mortgage Loan for the period of time required by applicable Law.  Within five (5) Business Days following any demand therefor (or, if an Event of Default has occurred and is continuing, immediately upon demand, Seller will supply Bank with copies (which may be delivered electronically) and/or originals of any such records.

 

7.13        Right of Inspection.  Seller shall permit any officer, employee, agent or representative of Bank during normal business hours:  (a) with at least five (5) Business Days written notice (or, if an Event of Default has occurred and is continuing, without any notice), to examine Seller’s books and records, accounts and any and all files, records and documents relating to the Mortgage Loans in which Bank has purchased Participation Interests (including any in-file credit reports), and to make copies and extracts of any and all of the foregoing; and (b) to discuss the affairs, finances, books and records, and accounts of Seller with Seller’s officers, accountants and auditors and other representatives.

 

7.14        Audit.  Seller shall permit any third-party consultant engaged by Bank and acceptable to Seller (each an “Auditor”), at the expense of Seller, to inspect and conduct an audit of Seller’s business operations and records related thereto during normal business hours and upon no less than thirty (30) days’ notice; provided, however, if such audit is conducted by Bank more than once during any fiscal year, and such additional audit is not the result of the occurrence of an Event of Default, Bank shall be responsible for the fee payable to the Auditor that performed such additional audit.  In connection with each audit, Seller shall cooperate with the Auditor and will cause Seller’s employees, agents and contractors to cooperate with the Auditor, and Seller shall furnish or cause to be furnished to the Auditor such information and documentation the Auditor may consider necessary or useful in connection with the performance of the audit.

 

7.15        Notice from Seller of Certain Events.

 

(a)           Seller shall promptly, but in any event within [***] days of obtaining knowledge thereof (or by such earlier time if expressly required hereunder), notify Bank in writing of any event or circumstance or notice thereof which has had, or could reasonably be expected to have, a Material Adverse Effect.  Without limiting the generality of the foregoing, Seller shall promptly, but in any event within [***] days of receipt, deliver to Bank copies of all notices and other documents and correspondence from any Governmental Authority regarding any alleged or potential material non-compliance with the Dodd-Frank Act or any other applicable Law related to the financing and sale of Mortgage Loans, provided that Seller shall not be obligated to deliver copies of any such notices and other documents and correspondence to the extent restricted by obligations of confidentiality or applicable law.

 

(b)           Seller shall furnish to Bank immediately upon becoming aware of the existence of any Event of Default, a written notice specifying the nature and period of existence thereof and the action which Seller is taking or proposes to take with respect thereto.

 

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(c)           Seller shall promptly, but in any event within [***] days of obtaining knowledge thereof, notify Bank in writing regarding:  (a) any new mortgage warehousing facilities after the Effective Date; and (b) any mortgage warehousing facility of Seller with respect to any material change to the maximum amount of any such facility and as to any termination, suspension or non-renewal of any such facility, or any default by Seller under any such mortgage warehousing facility.

 

(d)           Seller shall promptly, but in any event within [***] days of obtaining knowledge thereof, notify Bank in writing regarding any new Affiliate Escrow Agents arising after the Effective Date.

 

(e)           Seller shall promptly, but in any event within [***] days of obtaining knowledge thereof, notify Bank in writing regarding any unauthorized use of the Electronic Platform.

 

(f)            Seller shall promptly, but in any event within [***] days of obtaining knowledge thereof, notify Bank if any of Seller’s current Chief Executive Officer, Chief Investment Officer or Chief Operating Officer ceases for any reason to hold that office, or to continuously perform the duties of that office, and within a reasonable period of time Seller has not found an executive to fill such vacant office with at least the same level of experience and ability as the person being replaced.

 

7.16        Compliance with Warehouse Documents.  Seller shall promptly and fully perform, observe and comply with any and all provisions of this Agreement and the other Warehouse Documents to which Seller is a party.

 

7.17        Financial Covenants.  At all times prior to the Agreement Termination Date (and thereafter if expressly required), Seller shall promptly and fully perform, observe and comply with the provisions set forth in Exhibit E.

 

7.18        INDEMNIFICATION.  SELLER SHALL INDEMNIFY, DEFEND, PROTECT AND HOLD HARMLESS BANK AND ITS SUCCESSORS AND ASSIGNS, EACH AFFILIATE OF BANK, AND EACH OF ITS AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, AND ATTORNEYS (COLLECTIVELY, THE “INDEMNIFIED  PARTIES”) FROM AND AGAINST ANY AND ALL LOSSES, LIABILITIES, DAMAGES, CLAIMS, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE OUT OF POCKET ATTORNEYS’ FEES AND EXPENSES), ACTIONS, PROCEEDINGS, OR DISPUTES INCURRED OR SUFFERED OR TO WHICH ANY INDEMNIFIED PARTY MAY BECOME SUBJECT (COLLECTIVELY, “INDEMNIFIABLE  COSTS”) WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO THIS AGREEMENT, THE OTHER WAREHOUSE DOCUMENTS, THE PARTICIPATED MORTGAGE LOANS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING DUE TO THE UNMARKETABILITY OF ANY PARTICIPATED MORTGAGE LOAN RESULTING FROM:  (A) ANY NEGLIGENT OR FRAUDULENT ACT OR OMISSION OF SELLER OR ITS AGENTS OR EMPLOYEES; (B) ANY BREACH BY SELLER OF ANY MATERIAL WARRANTY OR REPRESENTATION CONTAINED HEREIN; (C) ANY BREACH BY

 

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SELLER OF ANY MATERIAL TERM OR CONDITION OF THIS AGREEMENT; (D)ANY MISCALCULATIONS AND OTHER ERRORS WHICH RESULT FROM SELLER’S INDEPENDENT PROCESSING PROCEDURES OR ITS MISUSE OR ALTERATION OF ANY FORMS OR DOCUMENTS PROVIDED OR APPROVED BY BANK; OR (E) ANY FAILURE BY SELLER TO COMPLY WITH ANY LAW IN PERFORMING ITS OBLIGATIONS UNDER THIS AGREEMENT OR LAW RELATED TO THE ORIGINATION, SERVICING OR ADMINISTRATION ANY PARTICIPATED MORTGAGE LOAN, EXCEPT, IN EACH CASE, TO THE EXTENT SUCH INDEMNIFIABLE COSTS RESULT FROM AN INDEMNIFIED PARTY’S BAD FAITH, NEGLIGENCE OR WILLFUL MISCONDUCT.  BANK MAY EMPLOY AN ATTORNEY OR ATTORNEYS TO PROTECT OR ENFORCE ITS RIGHTS, REMEDIES AND RECOURSES UNDER THIS AGREEMENT AND THE OTHER WAREHOUSE DOCUMENTS, AND TO ADVISE AND DEFEND BANK WITH RESPECT TO ANY SUCH ACTIONS AND OTHER MATTERS.  SELLER SHALL REIMBURSE BANK FOR ITS REASONABLE OUT-OF-POCKET ATTORNEYS’ FEES AND EXPENSES (INCLUDING EXPENSES AND COSTS FOR EXPERTS) WHEN BILLED FOR THE SAME, WHETHER ON A MONTHLY OR OTHER TIME INTERVAL, AND WHETHER OR NOT AN ACTION IS ACTUALLY COMMENCED OR CONCLUDED.  ALL OTHER AMOUNTS FOR INDEMNIFIED COSTS SHALL BECOME DUE AND PAYABLE WHEN ACTUALLY INCURRED BY THE APPLICABLE INDEMNIFIED PARTY AND UPON PRESENTMENT OF REASONABLE BACKUP DOCUMENTATION TO THE INDEMNIFYING PARTY.  THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

 

7.19        Interest Rate Hedging.  Seller shall at all times hedge against the interest rate risk associated with any and all Mortgage Loans owned in whole or in part by Seller in accordance with Seller’s interest rate risk policies.

 

ARTICLE 8
 NEGATIVE COVENANTS

 

At all times prior to the Agreement Termination Date (and thereafter if expressly required hereunder), Seller covenants and agrees with Bank that:

 

8.1          Transfer of Ownership Interest.  Without the prior written consent of Bank, which consent shall not be unreasonably withheld or delayed, no transfer, assignment or hypothecation to any Person of the direct ownership interest in Seller shall occur if such transfer, assignment or hypothecation shall result in such Person holding [***] or more of the direct ownership interest in Seller.

 

8.2          No Merger, etc. Without the prior written consent of Bank, Seller shall not:  (a) become a party to any merger or consolidation; (b) purchase or otherwise acquire all or any part of the assets or shares or other evidence of beneficial ownership of any Person; (c) sell or otherwise transfer all or substantially all of the assets or Properties of Seller to any other Person; or (e) wind-up, dissolve or liquidate; provided, however, that Seller may, without the prior written consent of Bank, and provided that 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,

 

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(ii) in the ordinary course of Seller’s mortgage banking business, sell equipment that is uneconomic or obsolete, and (ii) buy and sell Mortgage Loans, mortgage servicing rights and related assets.  If Seller takes such action while no sums are outstanding hereunder, such action must be disclosed to Bank in writing and approved by Bank in writing prior to Bank making any further Advances hereunder.

 

8.3          Fiscal Year; Method of Accounting.  Seller shall not, without giving prior written notice to Bank, change its fiscal year or method of accounting.

 

8.4          Actions with respect to Mortgage Loans.  Seller shall not:

 

(a)           Release the Lien of any Security Instrument of any Participated Mortgage Loan;

 

(b)           Grant, create, incur, permit or suffer to exist any Lien upon the Mortgaged Property which is security for any Participated Mortgage Loan, except for the Lien granted under the Security Instrument for such Participated Mortgage Loan; or

 

(c)           Sell, transfer or assign any of Seller’s right, title and interest in or to any Participated Mortgage Loan to any Person except as expressly provided in this Agreement, or otherwise with the prior written consent of Bank.

 

8.5          Compliance with Material Agreements.  Seller shall not permit any default to occur with respect to any material agreement, indenture, mortgage or document binding on it or affecting its Property or business, if such default may have a Material Adverse Effect.

 

8.6          Representations Regarding Interests Sold.  Seller will not represent to any Person that Seller owns all or any portion of the Participation Interests purchased by Bank under this Agreement.

 

ARTICLE 9
  EVENTS OF DEFAULT;
 CERTAIN RIGHTS AND REMEDIES OF BANK

 

9.1          Events of Default.  An Event of Default shall exist if any one or more of the following occurs:

 

(a)           Seller shall fail to punctually make any payment of fees or other sums when due hereunder, or under any other Warehouse Document to which it is a party or other document executed in connection herewith, and such failure shall continue for a period of [***] Business Days following written notice to Seller of such delinquency (provided that Bank shall not be required to provide any such [***] Business day grace period more than [***] times in any [***] month period);

 

(b)           The failure or refusal of Seller to perform, observe or comply with any covenant or agreement contained in this Agreement, any other Warehouse Document or any other document executed in connection herewith, which failure or refusal is not

 

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otherwise addressed in this Section, and such failure or refusal continues for a period of [***] days following written notice to Seller of such breach (provided that Bank shall not be required to provide any such [***] day grace period more than [***] times in any [***] month period);

 

(c)           Any material statement, warranty or representation made at any time by Seller in this Agreement, any other Warehouse Document or any document executed in connection herewith, or in any writing, or any statement or representation made in any certificate, report, or opinion delivered to Bank pursuant to any Warehouse Document, is false, misleading or erroneous in any material respect at the time made, and such breach (to the extent such breach is capable of cure) continues uncured for a period of [***] days following written notice to Seller of such breach (provided that Bank shall not be required to provide any such [***] day grace period more than three [***] in any [***] month period).  Notwithstanding the foregoing, if such breach is intentionally false or calculated to mislead, then such [***] day grace period shall not apply;

 

(d)           Default shall occur (after the expiration of any applicable grace and cure periods) (i) in the punctual payment of any material indebtedness of Seller owing to any Person (other than Bank), or in the performance, observance or compliance with any other covenant, agreement or obligation of any agreement executed in connection therewith, in each such case, which permits a demand for, or requires, the early repayment of obligations due by Seller and such other Person has exercised such acceleration under any such documents; or (ii) under any financial accommodations extended by any Person (other than Bank) to Seller in order to finance the origination by Seller of residential mortgage loans on a short-term basis until such time as such mortgage loans are sold to third parties, which default permits the termination of such financial accommodations or requires the repurchase of the mortgage loans financed thereunder, and such Person has terminated such financial accommodations or has required the repurchase of such mortgage loans in connection with such default;

 

(e)           Seller shall:  (i) apply for or consent to the appointment of a receiver, trustee, custodian, intervenor or liquidator of such Person or of all or a substantial part of its assets; (ii) file a voluntary petition in bankruptcy, admit in writing that it is unable to pay its debts as they become due or generally not pay its debts as they become due; (iii) make a general assignment for the benefit of creditors; (iv) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws; (v) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; or (vi) take any action for the purpose of effecting any of the foregoing;

 

(f)            An involuntary petition or complaint shall be filed against Seller seeking bankruptcy or reorganization of such Person or the appointment of a receiver, custodian, trustee, intervenor or liquidator of it, or of all or substantially all of its assets, and such petition or complaint shall not have been dismissed within [***] days of the filing thereof; or an order, order for relief, judgment or decree shall be entered by any court of

 

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competent jurisdiction or other competent authority approving a petition or complaint seeking reorganization of such Person or appointing a receiver, custodian, trustee, intervenor or liquidator of such Person, or of all or substantially all of its assets, and such order, judgment or decree shall continue unstayed and in effect for a period of [***] days;

 

(g)           Seller shall fail within [***] days to pay, bond or otherwise discharge any judgment or order for payment of money in excess of the Maximum Judgment Amount that is not otherwise being satisfied in accordance with its terms and is not stayed on appeal or otherwise being contested in good faith;

 

(h)           Any default or event of default shall occur (after the expiration of any applicable grace and cure periods) under any documents evidencing, securing or pertaining to any indebtedness of Seller to Bank, in each such case, which permits a demand for, or requires, the early repayment of obligations due by Seller and Bank has exercised such acceleration under such documents;

 

(i)            Any Person shall levy on, seize, or attach all or any material portion of the Property of Seller which is not permanently dismissed or discharged within [***] days after commencement of such action;

 

(j)            The failure of Seller to repurchase any Participation Interest in a Mortgage Loan due to failure to deliver any Closing Deliverables pursuant to the provisions of this Agreement;

 

(k)           The dissolution of Seller; or

 

(l)            Any material adverse change in the financial condition of Seller from the condition shown on the financial statements submitted to Bank and relied upon by Bank in connection with the execution of this Agreement, which change would materially and adversely affect the ability of Seller to perform the obligations of any such party to Bank under any Warehouse Document, the materiality and adverse effect of such change in financial condition to be reasonably determined by Bank in accordance with its credit standards and underwriting practices in effect at the time of making such determination.

 

9.2          Default Remedies.  Upon the occurrence and continuation of an Event of Default, without any presentment, demand, protest, notice of protest and nonpayment, or other notice of any kind, all of which are hereby expressly waived by Seller, Bank may, in its sole and absolute discretion, immediately:  (a) terminate or suspend Seller’s right hereunder to submit any Request to Bank for Bank to purchase Participation Interests; (b) pursuant to the power of attorney conferred to Bank by Seller in connection with this Agreement (and in reliance of Section 10.18 in the event that Bank exercises the following remedy after the occurrence of an Event of Default specified in Sections 9.1(e) or (f)), sell in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as Bank shall reasonably deem satisfactory, any or all right, title and interest of Bank and Seller in and to any or all Participated Mortgage Loans and apply the proceeds thereof to the aggregate outstanding Advances made by Bank in connection with such Participated Mortgage Loans and to any other amounts payable to Bank in connection

 

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with this Agreement or any other Warehouse Document, in such order and amounts determined by Bank; (c) exercise its rights and remedies under any Pledge Agreement, or other Warehouse Document; and/or (d) exercise any other right or remedy otherwise available to Bank under this Agreement or any other Warehouse Document or at law or in equity.  Notwithstanding the foregoing, if an Event of Default specified in Sections 9.1(e) or (f) occurs, fees and other sums due hereunder shall become automatically and immediately due and payable, both without any action by Bank and without presentment, demand, protest, notice of protest and nonpayment, notice of acceleration or of intent to accelerate, or any other notice of any kind, all of which are hereby expressly waived, notwithstanding anything contained herein to the contrary.

 

9.3          Option to Purchase Retained Percentage.  Without limiting the generality of Section 9.2, upon the occurrence of an Event of Default, Bank shall have the right at any time, in its sole and absolute discretion, to purchase from Seller the Retained Percentage in any or all Participated Mortgage Loans (the “Retained Interest Purchase Option”).  To effect the purchase by Bank from Seller of the Retained Percentage in any Participated Mortgage Loan in connection with Bank’s exercise of the Retained Interest Purchase Option, Bank shall pay to Seller an amount (the “Retained Interest Purchase Price”) equal to (a) the then -outstanding principal balance of such Participated Mortgage Loan, as of the date of the exercise by Bank of the Retained Interest Purchase Option, less (b) the amount of Bank’s pro rata share of any and all principal payments (which are allocable to Bank’s Participation Interest in such Participated Mortgage Loan), determined in accordance with Bank’s Participation Percentage in effect from time to time for such Participated Mortgage Loan, made on such Participated Mortgage Loan during the period of time commencing on the Purchase Date for such Participated Mortgage Loan and ending on the date of the exercise by Bank of the Retained Interest Purchase Option, but that have not been previously paid to Bank, less (c) the amount of Bank’s pro rata share of any and all interest payments (which are allocable to Bank’s Participation Interest in such Participated Mortgage Loan), determined in accordance with the Participation Interest Rate in effect from time to time for such Participated Mortgage Loan, made on such Participated Mortgage Loan during the period of time commencing on the Purchase Date for such Participated Mortgage Loan and ending on the date of the exercise by Bank of the Retained Interest Purchase Option, but that have not been previously paid to Bank, less (d) any other amounts due and payable by Seller to Bank hereunder as of the date of the exercise by Bank of the Retained Interest Purchase Option, by depositing the Retained Interest Purchase Price into the Remittance Account.  Effective immediately upon Bank’s deposit into the Remittance Account of the Retained Interest Purchase Price for the Retained Percentage in any Participated Mortgage Loan, without any further action by or notice to any Person, Bank shall have purchased from Seller such Retained Percentage.

 

ARTICLE 10
  MISCELLANEOUS

 

10.1        Accounting Principles.  Where the character or amount of any asset or liability or item of income or expense is required to be determined or other financial or accounting computation is required to be made for the purposes of this Agreement or any other Warehouse Document, such determination shall be made in accordance with GAAP.  In addition, any accounting term used in this Agreement or any other Warehouse Document shall have, unless

 

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otherwise specifically provided therein, the meaning customarily given to such term in accordance with GAAP or other method of accounting acceptable to Bank.

 

10.2        Time.  Time is of the essence of each and every term of this Agreement and the other Warehouse Documents.

 

10.3        Titles of Articles, Sections and Subsections.  All titles or headings to articles, sections, subsections or other divisions of this Agreement or any other Warehouse Document or the exhibits or addenda hereto or thereto are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the content of such articles, sections, subsections or other divisions, such content being controlling as to the agreement between the parties hereto.

 

10.4        Seller’s Status.  It is agreed that the relationship of Seller and Bank hereunder shall be that of the seller and purchaser of interests in Mortgage Loans.  Seller and Bank are not partners or joint venturers, and nothing contained herein shall be construed to create a partnership, joint venture or similar relationship between the parties.  Seller shall not act as or hold itself out to the public as being an agent for Bank, but is to act in all loan origination, administration and servicing matters hereunder for itself and in its name only, except to the extent that Seller is required under this Agreement to act as a trustee with fiduciary duties to hold for the benefit of Bank the Participated Mortgage Loans and the related Mortgage Loan Documents, and any and all funds and receipts, whether as principal, interest, escrows or otherwise, in respect of any Participated Mortgage Loan, and to make the remittances of any and all such documents and funds as specified in this Agreement.  It further is agreed that Seller, as trustee, shall not assign its responsibilities under this Agreement except in accordance with this Agreement.

 

10.5        Notices.  Any and all notices, requests and other communications required or permitted to be given under or in connection with this Agreement or any other Warehouse Document, except as otherwise provided herein or therein, shall be in writing and mailed or sent by electronic mail to the respective address, and to the attention of the designated recipient, provided below and provided again on the signature page of this Agreement for Seller (or to such other address or to such designated recipient, as either party may designate in a written notice to the other party furnished pursuant to this Section).  Such notices, requests and other communications so sent shall be deemed to have been given immediately if made by electronic mail (confirmed by concurrent written notice sent first class U.S. mail, postage prepaid), or one (1) day after sending by recognized national overnight courier company, signature of recipient required if to Seller or Bank; any notice, request and other communication sent by any other means shall be deemed made when actually received in writing by the designated recipient of the party to which notice is provided in accordance with this Section.  Notwithstanding the foregoing, Requests or communications related to a Request shall not be effective until actually received by Bank.

 

Bank’s address for notices is:

 

TEXAS CAPITAL BANK, N.A.
 2221 Lakeside Boulevard, Suite 800

 

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Richardson, Texas 75082
 Attention:             Bruce Karda
 Email:  bruce.karda@texascapitalbank.com

 

Seller’s address for notices is:

 

AmeriHome Mortgage Company, LLC
 1 Baxter Way, Suite 300
 Thousand Oaks, CA 91362-3888

With copies to:

 

AmeriHome Mortgage Company, LLC
 1 Baxter Way, Suite 300
 Thousand Oaks, CA 91362-3888

and

 

AmeriHome Mortgage Company, LLC
 1 Baxter Way, Suite 300
 Thousand Oaks, CA 91362-3888
 Attention:  Legal Department
 Email:  legal@amerihome.com

 

10.6        Amendments and Waivers.  Subject to Section 10.7, any provision of this Agreement or any other Warehouse Document may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by all the parties to this Agreement, such Warehouse Document or such other documents, as the case may be.  The acceptance of Bank at any time and from time to time of part payment on any amounts payable to Bank hereunder shall not be deemed to be a waiver of the balance of such amounts.  No waiver by Bank of any Event of Default shall be deemed to be a waiver of any other then-existing or subsequent Event of Default.  No waiver by Bank of any of its rights or remedies under this Agreement, any other Warehouse Document, or otherwise, shall be considered a waiver of any other or subsequent right or remedy of Bank.  No delay or omission by Bank in exercising any right or remedy under this Agreement or any other Warehouse Document shall impair such right or remedy or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such right or remedy preclude other or further exercise thereof, or the exercise of any other right or remedy under this Agreement, any other Warehouse Document or otherwise.

 

10.7        Amendment Due to Government Regulation.  Both Bank and Seller understand that Bank is subject to the supervision of various Governmental Authorities.  Should any

 

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Governmental Authority direct Bank to discontinue any practice set forth herein or to amend the terms hereof, Bank shall take immediate action to do so and shall notify Seller of such action.  Seller hereby consents to such action and agrees to enter into any amendment or termination hereof as may be reasonably required by Bank to bring Bank into full compliance with applicable Laws.

 

10.8        Participations.  Seller agrees that Bank may elect, at any time and in its sole discretion, to sell, assign and convey an undivided percentage ownership interest, or grant an undivided participation interest, in all or any portion of the Participation Interests (or any portion of any such Participation Interest) to one or more financial institutions, private investors and/or other Persons (collectively, “Participants”).  In the event that Bank elects to include Participants, bank shall either (i) cause such Participant to agree to the provisions of Section 10.26, or (ii) cause such Participant to enter into such other agreement relating to confidentiality as Bank and Seller shall mutually agree upon, in each case prior to Bank disclosing any confidential or proprietary information of Seller protected by this Agreement (including without limitation as described in Section 10.26).

 

10.9        Invalidity.  In the event that any one or more of the provisions contained in this Agreement or any other Warehouse Document, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement or the other Warehouse Documents.

 

10.10      Survival.  All covenants, agreements, representations and warranties made herein and in any other Warehouse Document shall continue in full force and effect as long as Bank has the right to purchase Participation Interests hereunder and until all obligations to Bank hereunder and thereunder have been fully satisfied and discharged.  Without limiting the generality of the foregoing, termination of this Agreement by either party pursuant to the terms of this Agreement shall not relieve Seller of:  (a) its duties, obligations, representations, warranties, covenants, agreements or indemnities which accrued under this Agreement prior to the Advance Request Termination Date or the Agreement Termination Date; or (b) performance of its duties and obligations hereunder so long as there is any Participated Mortgage Loan which does not constitute a Retired Participated Mortgage Loan.

 

10.11      Successors and Assigns.  All covenants and agreements contained by or on behalf of Seller in this Agreement or any Warehouse Document shall bind Seller’s successors and assigns and shall inure to the benefit of Bank and its successors and assigns.  Seller shall not, however, have the right to assign its rights under this Agreement or any interest herein, without the prior written consent of Bank, which consent shall not be unreasonably withheld.

 

10.12      Renewal.  If, as of the Effective Date, Bank holds any outstanding undivided percentage ownership interests (each an “Existing Participation Interest”) in any Mortgage Loan purchased by Bank from Seller pursuant to a written mortgage warehouse agreement or similar written agreement executed by Bank and Seller prior to the Effective Date (as amended or modified from time to time, the “Existing Warehouse Agreement”), then, as of the Effective Date, unless expressly agreed to otherwise by Seller and Bank in writing after the date of the Existing Warehouse Agreement:  (a) Seller shall not have any rights under the Existing Warehouse Agreement to request Bank to purchase additional undivided percentage ownership interests in

 

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Mortgage Loans, and any and all such requests and purchases on or after the Effective Date shall be governed by the terms and conditions of this Agreement; (b) any and all Existing Participation Interests shall continue but shall be subject to the terms and conditions of this Agreement from and after the Effective Date; and (c) the Existing Warehouse Agreement shall automatically terminate and cease to be in force and effect (except with respect to the provisions of the Existing Warehouse Agreement which expressly survive termination) without any action or notice.  The terms of this Section supersede and modify any and all inconsistent provisions in any Existing Warehouse Agreement.

 

10.13      Consent or Approval.  Except where a standard has been otherwise expressly provided in this Agreement or the other Warehouse Documents (sole discretion, reasonable, commercially reasonable, etc.), in any instance under this Agreement or the other Warehouse Documents where the approval, consent or the exercise of judgment of a party is required:  (a) the granting or denial of such approval or consent and the exercise of such judgment shall be (i) within the sole and absolute discretion of such party and (ii) deemed to have been given only by a specific writing intended for that purpose and executed by such party; and (b) in order to be effective, such approval, consent or exercise of judgment must be given by such party prior to the applicable action to be taken by requiring approval, consent or exercise of judgment, unless otherwise agreed to in writing by such party.  Each provision for consent, approval, inspection, review, or verification by a party is for such party’s own purposes and benefit only.

 

10.14      Cumulative Rights.  The rights and remedies of Bank under this Agreement and any other Warehouse Document shall be cumulative, and shall be in addition to any rights and remedies of Bank at law or in equity.

 

10.15      Governing Law.  Seller has signed this Agreement and submits it to Bank for acceptance at Bank’s offices in Richardson, Collin County, Texas.  Seller and Bank shall make all payments and perform all other obligations arising hereunder at Collin County, Texas, and this Agreement is made and entered into at Collin County, Texas.  This Agreement and all of the terms and conditions hereof and the rights of the parties hereto shall be governed by and interpreted in accordance with the Laws of the State of Texas and venue for any legal action brought hereunder shall lie in Collin County, Texas or Dallas County, Texas.

 

10.16      Seller’s Understanding.  Seller has read this Agreement and has had the opportunity to seek and/or receive counsel from an attorney of Seller’s choice as to the effects hereof.

 

10.17      Nature of Transactions.

 

(a)           The relationship established by this Agreement and the other Warehouse Documents between Bank and Seller is that of a seller and purchaser of Participation Interests in Mortgage Loans, and not that of a lender and borrower.  Subject to Section 10.17(b), it is the intention of Bank and Seller that:  (i) the purchase and sale of each Participation Interest hereunder shall be treated and construed as a sale by Seller to Bank, and the purchase by Bank from Seller, of a certain undivided percentage ownership interest in the related Mortgage Loan and the related Mortgage Loan Documents; and (ii) each sale of a Participation Interest by Seller to Bank, and each purchase of a

 

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Participation Interest by Bank from Seller, is a sale of an undivided interest in a promissory note to Bank, and that pursuant to Section 9.109 of the UCC of the State of Texas, Bank and Seller’s characterization of each such sale and purchase of a Participation Interest as a purchase and sale of such Participation Interest shall be conclusive that (A) the transaction is a sale and is not a secured transaction and (B) legal and equitable title has passed to Bank in the Mortgage Loan and Mortgage Loan Documents in which Bank acquired such Participation Interest.

 

(b)           Neither Party has made or hereby makes any representations or warranties to the other Party, and hereby disclaims any such representations or warranties, regarding the accounting or tax treatment to be applied to any Participation Interest (including whether any such Participation Interest qualifies for “sale” treatment under any applicable accounting rules, regulations or standards).  Each Party hereby agrees that it has and will make its own independent determination regarding the accounting and tax treatment to be applied to each Participation Interest, and has not relied upon the other Party in any manner in making such determination.  The accounting or tax treatment applied by any Party with respect to any Participation Interest shall not be binding upon the other Party, shall not be used by the other Party in any manner inconsistent with, and shall not affect, the Parties’ intent hereunder that any and all transactions pursuant to which Bank pays a Purchase Price to Seller is (other than for accounting purposes) a sale by Seller to Bank, and the purchase by Bank from Seller, of a certain undivided percentage ownership interest in the related Mortgage Loan and Mortgage Loan Documents and that legal and equitable title has passed to Bank in the Mortgage Loan in which Bank acquired such Participation Interest.

 

(c)           If any court of competent jurisdiction shall deem any transaction involving Bank, Seller or any Participation Interest governed by this Agreement to be a loan, extension of credit or a secured financing, or if any court of competent jurisdiction shall determine that any purported Participation Interest in any purported Participated Mortgage Loan (or any portion thereof) is the property of Seller or shall otherwise not have been sold by Seller to, and purchased by, Bank, as contemplated herein, then notwithstanding anything herein or in any other Warehouse Document to the contrary:  (i) as of the Effective Date, Bank shall have (and Seller shall have been deemed to have pledged, assigned and granted to Bank) a first priority security interest in and to the Collateral to secure the prompt and complete payment and performance of any and all of Seller’s indebtedness and obligations to Bank under this Agreement and the other Warehouse Documents; and (ii) any and all amounts received by Bank with respect to any Participated Mortgage Loan may be applied in such order and priority as Bank may determine.  For this purpose, this Agreement shall constitute a security agreement in accordance with the UCC, and Bank shall have all the rights of a secured creditor with respect to such security.

 

10.18      Repurchase Agreement.  It is expressly stipulated to be the intent of Bank and Seller, and understood and agreed by Bank and Seller, that (a) this Agreement constitutes a “repurchase agreement” under Section 101(47) of the Bankruptcy Code and (b) pursuant to Sections 362(b), 555 and 559 of the Bankruptcy Code, the rights of Bank under this Agreement related to the sale and repurchase of Mortgage Loans (including, the rights of Bank hereunder, upon the occurrence of an Event of Default, to liquidate and/or foreclose on the Mortgage Loans

 

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in which it holds Participation Interests) shall not be stayed, avoided or otherwise limited by the operation of any provision of the Bankruptcy Code.

 

10.19      Usury Savings Provision.  It is expressly stipulated to be the intent of Bank and Seller, and understood and agreed by Bank and Seller, that this Agreement:  (a) does not represent a loan from Bank to Seller; and (b) allows Bank to purchase the Participation Interests for its own account and for a short term investment.  If, notwithstanding the foregoing or the terms of this Agreement, a court of competent jurisdiction establishes a loan or extension of credit within this Agreement from Bank to Seller, then the parties to this Agreement hereby understand, acknowledge and agree that in such event:  (a) Seller shall be the underlying obligor of that loan or extension of credit established by such court of competent jurisdiction; (b) Seller is utilizing the proceeds of that loan or extension of credit established by such court of competent jurisdiction for business, commercial, investment, or similar purposes; and (c) Seller has determined that it is beneficial to use any and all proceeds of that loan or extension of credit established by such court of competent jurisdiction to establish collateral for that loan or extension of credit established by such court of competent jurisdiction by:  (i) making deposits at Bank; (ii) purchasing certificates of deposit from Bank; and/or (iii) establishing other accounts at Bank.  Additionally, it is the stipulated, understood and agreed to be the intent of Bank and Seller that this Agreement shall at all times comply strictly with the applicable Texas law governing the maximum rate or amount of interest payable on the Indebtedness (as hereinafter defined), if any, or applicable United States federal law to the extent that such law permits Bank to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law.  For purposes of this provision, “Indebtedness” shall mean all indebtedness, if any, evidenced, referenced, described, or established by a court of competent jurisdiction under this Agreement, and all amounts payable in the performance of any covenant or obligation in any of the other documents or any other communication or writing by or between Bank and Seller related to the transaction or transactions that are the subject matter of this Agreement, or any part of such Indebtedness, if any.  If the applicable law is ever judicially interpreted so as to render usurious any amount contracted for, charged, taken, reserved or received in respect of the Indebtedness, if any, including by reason of the acceleration of the maturity or the prepayment thereof, then it is Bank’s and Seller’s express intent that all amounts charged in excess of the Maximum Lawful Rate (as hereinafter defined), if any, shall be automatically canceled, ab initio, and all amounts in excess of the Maximum Lawful Rate theretofore collected by Bank, if any, shall be credited on the principal balance of the Indebtedness, if any, or, if the Indebtedness, if any, has been or would thereby be paid in full, refunded to Seller, and the provisions of this Agreement and any underlying documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable laws, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, if the Indebtedness has been paid in full before the end of the stated term hereof, then Bank and Seller agree that Bank shall, with reasonable promptness after Bank discovers or is advised by Seller that interest was received in an amount in excess of the Maximum Lawful Rate, either credit such excess interest against the Indebtedness then owing by Seller to Bank and/or refund such excess interest to Seller.  If and to the extent Indebtedness is determined to exist by a court of competent jurisdiction, then Seller hereby agrees that as a condition precedent to any claim seeking usury penalties against Bank, Seller will provide written notice to Bank, advising Bank in reasonable detail of the nature and amount of the violation, and Bank shall have sixty (60) days after receipt

 

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of such notice in which to correct such usury violation, if any, by either refunding such excess interest to Seller or crediting such excess interest against the Indebtedness, if any, then owing by Seller to Bank.  All sums contracted for, charged, taken, reserved or received by Bank for the use, forbearance or detention of Indebtedness, if any, shall, to the extent permitted by applicable law, be amortized, prorated, allocated or spread, using the actuarial method, throughout the stated term of this Agreement (including any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of the Indebtedness, if any, does not exceed the Maximum Lawful Rate from time to time in effect and applicable to the Indebtedness, if any, for so long as debt is outstanding.  In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving tri-party accounts) apply to this Agreement or any other part of the Indebtedness, if any.  If and to the extent any Indebtedness is determined to exist under this Agreement by a court of competent jurisdiction, then notwithstanding anything to the contrary contained herein or in any of underlying documents referenced herein, it is not the intention of Bank to accelerate the maturity of any interest, if any, that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.  If and to the extent any Indebtedness is determined to exist under this Agreement by a court of competent jurisdiction, then the terms and provisions of this paragraph shall control and supersede every other term, covenant or provision contained herein, in any of the other underlying documents referenced within this Agreement or in any other document or instrument pertaining to the Indebtedness.  As used herein, the term “Maximum Lawful Rate” shall mean the maximum lawful rate of interest which may be contracted for, charged, taken, received or reserved in accordance with the applicable Laws of the State of Texas (or applicable United States federal law to the extent that such law permits Bank to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law), taking into account all fees, charges and any other value whatsoever made in connection with the transaction evidenced by this Agreement.  To the extent United States federal law permits contracting for, charging, taking, receiving or reserving a greater amount of interest than under Texas law, then such United States federal law will be relied upon instead of Texas law for the purpose of determining the Maximum Lawful Rate.  Additionally, if and to the extent any Indebtedness is determined to exist under this Agreement by a court of competent jurisdiction, to the extent permitted by applicable law now or hereafter in effect, Bank may, at its option and from time to time utilize any other method of establishing the Maximum Lawful Rate under Texas law or under other applicable law by giving notice, if required, to Seller as provided by such applicable law now or hereafter in effect.

 

10.20      WAIVER OF JURY TRIAL.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SELLER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER WAREHOUSE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

 

10.21      Joint and Several Liability.  The liability of all Persons obligated to Bank in any manner under this Agreement shall be joint and several.  If more than one Person shall execute this Agreement as “Seller”, then the term “Seller” as used herein and in the other Warehouse Documents shall refer both to each such Person individually and to all such Persons collectively.

 

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10.22      Reserved.

 

10.23      Electronic Transmission of Data.  Bank and Seller agree that certain data related to Mortgage Loans (including confidential information, documents, applications and reports) and the transactions contemplated by this Agreement may be transmitted electronically, including over the Internet and/or through the use of the Electronic Platform.  This data may be transmitted to, received from or circulated among agents and representatives of Seller and/or Bank and their affiliates, and other Persons involved with the subject matter of this Agreement subject to and in accordance with Section 10.26.  Seller and Bank each acknowledges and agrees that there are risks associated with the use of electronic transmission and that neither Party controls the method of transmittal or third party service providers and that neither party has any obligation or responsibility whatsoever and assumes no duty or obligation for the security, receipt, or third party interception of such transmissions.

 

10.24      Force Majeure.  Neither Party shall be responsible for any failure or delay of its performance hereunder by reason of fire, flood or other natural disasters, lockout, acts of public enemy, riot, insurrection or any interruption, failure or defects in internet, telephone or other interconnection service or in electronic or mechanical equipment or any other cause beyond the reasonable control of such Party (“Force Majeure Event”).  During the duration of any Force Majeure Event, each affected Party will use commercially reasonable efforts to avoid or remove such Force Majeure Event and will take reasonable steps to resume its performance under this Agreement with the least possible delay.

 

10.25      Limitation of Liability.  Neither Bank nor any other Indemnified Party shall have any liability with respect to, and Seller hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, consequential or punitive damages suffered or incurred by Seller in connection with, arising out of, or in any way related to, this Agreement or any of the other Warehouse Document, or any of the transactions contemplated by this Agreement or any of the Warehouse Document.

 

10.26      Confidentiality.

 

(a)           Confidential Information.  Bank and Seller hereby acknowledge and agree that all information provided before or after the date hereof by one party to any other in connection with any Warehouse Document or the transactions contemplated hereby which the receiving party knows or reasonably should know is the confidential or proprietary information of the disclosing party (for the avoidance of doubt consumer or other non-public personal and financial information of any Borrower or Seller shall always be considered confidential information), whether furnished by or on behalf of Bank or Seller or any of their representatives including without limitation:  (i) all knowledge or information concerning the business, operations and assets of Bank or Seller or their respective affiliates, which for the avoidance of doubt, shall include, without limitation, internal operating procedures; methodologies; investment strategies; hedging strategies; structuring strategies and concepts; trade secrets; sales data; vendor data and customer lists (existing and potential); financial plans, projections and reports; product strategies; and investment strategies; (ii) all property owned, licensed and/or developed by or for Bank or

 

57

 

Seller or their respective affiliates, such as computer systems, programs, software and devices, plus information about the design, methodology and documentation therefor; (iii) information about or personal to Bank or Seller or their respective affiliates, insureds, employees, agents and applicants (for jobs or products) of any of the foregoing and (iv) information, materials, products or any other tangible or intangible assets in the possession or the control of Bank or Seller or their respective affiliates, which is proprietary to, or confidential to or about, any other person or entity (the “Confidential Information”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent set forth in clause (b) below.  Confidential Information shall not include information that (A) is or becomes part of the public domain through no fault of Bank or Seller, as applicable, or its Permitted Recipients (as defined below) in violation of this Agreement; (B) is already known to Bank or Seller, as applicable, or any of its Permitted Recipients on a non-confidential basis prior to disclosure of such information by either party; (C) is subsequently received by Bank or Seller, as applicable, or its Permitted Recipients from a third party who Bank or Seller, as applicable, or its Permitted Recipients’ is not aware of any restriction on the disclosure of such information by a contractual, legal, fiduciary or other obligation owed to Bank or Seller, as applicable.

 

(b)           Permitted Disclosures.  Notwithstanding clause (a) above, Bank and Seller, as applicable, shall be permitted to disclose, on a confidential basis, Confidential Information to the extent that (i) it is necessary in connection with any Warehouse Document or Participation Interests to do so in working with its affiliates, legal counsel, actuaries, auditors, directors, officers, employees (“Permitted Recipients”); (ii) taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws; or (iii) in the event of an Event of Default, Bank determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Participation Interests, the related Mortgage Loans or otherwise to enforce or exercise Bank’s rights hereunder.  Further, notwithstanding clause (a) above, Bank shall may permitted to disclose Confidential Information to actual and potential Sub Participants pursuant to, and in compliance with, the provisions of Section 10.8.

 

(c)           Involuntary Disclosures.  If Bank or Seller shall at any time be involved in any litigation, arbitration, administrative, legal, regulatory or other proceeding or if Bank or Seller and/or its respective Permitted Recipients is otherwise required by law, regulation or other legal process, in each case, in which such party and/or its Permitted Recipient, on the advice of its own legal counsel, may be or becomes required to disclose any Confidential Information in violation of this Agreement (a “Legal Proceeding”), whether in discovery or otherwise, including by any oral question, subpoena, interrogatory, deposition, request for documents or information, order, writ, rule, regulatory, or other legal process, such party and/or its Permitted Recipients shall, if such party and/or its Permitted Recipients may lawfully do so, promptly notify the other party of the receipt of such Legal Proceeding whereupon such other party may seek an appropriate protective order or other relief at such other party’s own expense.  Bank or Seller and its respective Permitted Recipients, as applicable, shall cooperate with the other party, at such other party’s expense, to obtain a protective order or other remedy or reasonable assurance that

 

58

 

confidential treatment will be afforded the Confidential Information in the Legal Proceeding.  Bank or Seller and/or its respective Permitted Recipients may disclose any Confidential Information in accordance with such Legal Proceeding in the event that the other party fails to timely obtain any protective order or other relief but shall use its reasonable efforts to disclose only that portion of the Confidential Information which is necessary to comply with such Legal Proceeding after taking commercially reasonable steps to ensure that the portion of the Confidential Information so disclosed will be treated confidentially by the party to which it has been so disclosed.  Notwithstanding the foregoing, no notice or other action by Bank or Seller, as applicable, or any of their respective Permitted Recipients shall be required where disclosure of Confidential Information is made in connection with a routine request, or an audit or examination, by a bank examiner, auditor, regulatory authority or supervisory authority that has jurisdiction over the business of Bank or Seller, as applicable.

 

(d)           Treatment of Confidential Information.

 

(i)            Bank understands that the Confidential Information may contain information that is subject to, and accordingly Bank represents and warrants to Seller that Bank is subject to internal policies and processes that require Bank and its Permitted Recipients to receive, maintain, store and dispose of such Confidential Information in compliance with, any and all applicable federal, state and local laws, rules, regulations and ordinances governing or relating to privacy rights in connection with its performance under this Agreement including, without limitation, the Gramm Leach Bliley Act (the “GLB Act”).  Such policies and procedures include the implementation of such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of any “nonpublic personal information” that is disclosed to Bank in any manner or for any purpose and that pertains to any “customers” or “consumers” (as all such terms are defined in the GLB Act) of Seller, (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.  Bank further understands that Seller is relying on Bank’s representation and warranty in disclosing the Confidential Information.  Upon written request from Seller, Bank will provide written confirmation of the continued accuracy of this representation and warranty, it being understood that disclosure of information pertaining to specific policies or processes may require a confidentiality undertaking from Seller.

 

(ii)           Seller represents and warrants to Bank that Seller has implemented measures designed to protect the security and confidentiality of the Confidential Information of Bank against any anticipated threats or hazards to the security or integrity of such Confidential Information that could result in substantial harm or inconvenience to Bank.

 

(e)           Notwithstanding the foregoing or anything to the contrary contained herein or in any other Warehouse Document, the parties hereto may disclose to any and all

 

59

 

Persons, without limitation of any kind, the federal, state and local tax treatment of the transactions contemplated herein, any fact relevant to understanding the federal, state and local tax treatment of the transactions contemplated herein, 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 Seller may not disclose the name of or identifying information with respect to Bank or any other Indemnified Party, or any pricing terms or other nonpublic business or financial information (including any financial covenants) that is unrelated to the federal, state and local tax treatment of the transactions contemplated herein and is not relevant to understanding the federal, state and local tax treatment of the transactions contemplated herein, without the prior written consent of Bank.

 

(f)            The provisions set forth in this Section shall survive the termination of this Agreement.

 

10.27      Reserved.

 

10.28      Inconsistencies.  To the extent of any conflict between the provisions of this Agreement and the provisions of any other Warehouse Document, the provisions of this Agreement shall govern and control.  To the extent of any conflict between the provisions of any Warehouse Document and the provisions of the Warehouse Program Guide, subject to Section 5.14, the provisions of the Warehouse Program Guide shall govern and control.

 

10.29      Counterparts.  To facilitate execution, this Agreement may be executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all Persons required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single agreement.  It shall not be necessary in making proof of this Agreement to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto.  Any signature page to any counterpart may be detached from such counterpart without impairing the legal effect of the signatures thereon and thereafter attached to another counterpart identical thereto except having attached to it additional signature pages.

 

10.30      ENTIRE AGREEMENT.  THIS WRITTEN AGREEMENT AND THE OTHER WAREHOUSE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Pages Follow]

 

60

 

EXECUTED by Seller to be effective as of the Effective Date.

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
AMERIHOME   MORTGAGE COMPANY, LLC, A 
    
	
 
    	
DELAWARE   LIMITED LIABILITY COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
Execution   Date:            ,20   
    

 

	
 
    	
Seller’s Contact Information   for Notices:
    
	
 
    	
 
    
	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC
    
	
 
    	
1 BAXTER WAY, SUITE 300
    
	
 
    	
THOUSAND OAKS, CA 91362
    

 

With Copies to:

 

	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC
    
	
 
    	
1 BAXTER WAY, SUITE 300
    
	
 
    	
THOUSAND OAKS, CA 91362
    

 

	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC
    
	
 
    	
1 BAXTER WAY, SUITE 300
    
	
 
    	
THOUSAND OAKS, CA 91362
    
	
 
    	
Attention:
    	
LEGAL DEPARTMENT
    
	
 
    	
E-mail:
    	
LEGAL@AMERIIIOME.COM
    

 

See Attached

 

[NOTARY STAMP]

 

[Bank’s Signature Page Follows]

 

61

 

ACKNOWLEDGMENT

 

A notary public or other officer completing this
 certificate verifies only the identity of the individual
 who signed the document to which this certificate is
 attached, and not the truthfulness, accuracy, or
 validity of that document.

 

State of California

	
County of
    	
 
    	
)
    
	
 
    
	
On 
    	
 
    	
before me,
    	
 
    	
 
    
	
(insert name and title of the officer)
    
						

 

personally appeared                                                                                                                                                                         
  who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

	
Signature
    	
 
    	
(Seal)
    

 

 

ACCEPTED AND AGREED to by Bank at Richardson, Collin County, Texas, and executed to be effective as the Effective Date.

 

	
 
    	
BANK:
    
	
 
    	
 
    
	
 
    	
TEXAS CAPITAL BANK,
    
	
 
    	
NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Bruce Karda
    
	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
Execution Date:
    	
8/19/2020
    	
, 20   
    
					

 

63

 

EXHIBIT LIST

 

	
Exhibit A
    	
—
    	
Power of Attorney
    
	
 
    	
 
    	
 
    
	
Exhibit B
    	
—
    	
Pledge Agreement
    
	
 
    	
 
    	
 
    
	
Exhibit C
    	
—
    	
Reserved
    
	
 
    	
 
    	
 
    
	
Exhibit D
    	
—
    	
UCC-1 Financing   Statement
    
	
 
    	
 
    	
 
    
	
Exhibit E
    	
—
    	
Financial Covenants   Addendum
    
	
 
    	
 
    	
 
    
	
Exhibit F
    	
—
    	
Supplemental Provisions   Addendum
    
	
 
    	
 
    	
 
    
	
Exhibit G
    	
—
    	
List of Current   Warehouse Facilities
    
	
 
    	
 
    	
 
    
	
Exhibit H
    	
—
    	
List of Current   Affiliate Escrow Agents
    
	
 
    	
 
    	
 
    
	
Exhibit I
    	
—
    	
Blanket Assignment
    

 

64

 

EXHIBIT A
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

POWER OF ATTORNEY

 

[Follows This Cover Page]

 

 

LIMITED POWER OF ATTORNEY

 

Pursuant to that certain Mortgage Warehouse Agreement (as amended or modified from time to time, the “Warehouse Agreement”) entered into as of JULY 29, 2020 by the undersigned (the undersigned are each individually and collectively referred to herein as “Seller”) and TEXAS CAPITAL BANK.  NATIONAL ASSOCIATION (“Bank”) relating to Bank’s discretionary purchase of Participation Interests in Mortgage Loans.  Seller hereby irrevocably appoints Bank and each officer of Bank as its attorney-in-fact, with hill power of substitution, for, on behalf of, and in the name of Seller, upon the occurrence and continuation of an Event of Default under the Warehouse Agreement, to:  (a) endorse and deliver to any Person any notes.  checks, drafts, money orders or other instruments of payment coming into Bank’s possession and representing any payment made on or with respect to any Participated Mortgage Loan or otherwise received in connection with any Participated Mortgage Loan (including the proceeds from the sale of any such Participated Mortgage Loan received from a Take-Out Purchaser), and any collateral and any Take-Out Purchase Agreement therefor; (b) prepare, complete, execute, deliver and record, and do anything else necessary or desirable to effect.  (i) any endorsement to Bank, any Take-Out Purchaser or any other Person, of any Mortgage Note evidencing a Participated Mortgage Loan, or (ii) any transfer, assignment or conveyance to Bank, any Take-Out Purchaser or any other Person, of arty or all right, title and interest in and to any Mortgage Note and the Mortgage Loan Documents related thereto in which Bank has purchased a Participation Interest (including servicing rights); (c) do anything necessary or desirable to effect the sale, transfer, assignment or conveyance, of any or all right, title and interest of Seller and/or Bank in and to any Participated Mortgage Loan and the related Mortgage Loan Documents related thereto to any Take-Out Purchaser or any other Person:  di commence, Prosecute, settle, discontinue, defend, or otherwise dispose of any claim relating to any Take-Out Purchase Agreement or any Participated Mortgage Loan; (e) sign Seller’s name wherever appropriate, as determined by Bank, to effectuate the purposes of the Warehouse Agreement; and (f) to take any such further action as Bank may deem appropriate, and to act under changed circumstances, the exact nature of which may not be currently foreseen or foreseeable, in order to fully and completely effectuate Bank’s rights under the Warehouse Agreement.  Capitalized terms not otherwise defined herein shall have the meanings set forth in the Warehouse Agreement.

 

The powers and authorities herein conferred on Bank may he exercised by Bank through any Person who, at the time of the execution of a particular instrument, is an officer of Bank.  The limited power of attorney conferred herein is granted for a valuable consideration and is coupled with an interest and, therefore, is irrevocable so long as any duties or obligations to Bank under the Warehouse Agreement or the other Warehouse Documents, or any part thereof, shall remain unpaid or otherwise unsatisfied, and so long as Bank may elect to purchase Participation Interests under the Warehouse Agreement.

 

This appointment shall be construed in accordance with the Laws of the State of Texas, and venue for any proceeding hereunder shall lie exclusively in Collin County, Texas or Dallas County, Texas.

 

Dated effective as of the Effective Date.

 

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

***

 

A notary public or other officer completing this certificate 
 verifies only the identity of the individual who signed the
 document to which this certificate is attached, and not the 
 truthfulness, accuracy, or validity of that document.

 

	
STATE OF CALIFORNIA
    	
) ss:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
COUNTY OF
    	
 
    	
)
    	
 
    	
 
    
	
 
    	
 
    
	
On
    	
 
    	
, 20
    	
before me,
    	
 
    	
personally
    
	
 
    	
(insert name and title of the officer)
    
											

 

appeared                                                                                                  , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his her their authorized capacity(ies) and that by his/her their signatures) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

	
Signature:
    	
 
    	
[Seal]
    

 

 

EXHIBIT B
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

PLEDGE AGREEMENT

 

[Follows This Cover Page]

 

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT (this “Pledge Agreement”) is executed made and entered into as of JULY 29, 2020 (but effective as of the Effective Date), by AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY (the foregoing are each individually and collectively referred to herein as “Seller”), and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

A.            Pursuant to that certain Mortgage Warehouse Agreement entered into as of JULY 29, 2020 by Bank and Seller, as may have been amended or modified from time to time (the “Warehouse Agreement”), Bank has agreed, on a discretionary basis, to purchase Participation Interests in various Mortgage Loans subject to the terms and conditions of the Warehouse Agreement.

 

B.            As partial consideration for Bank entering into the Warehouse Agreement and/or for Bank to now or hereafter elect to purchase Participation Interests subject to the terms and conditions of the Warehouse Agreement, Seller has agreed, pursuant to the terms and conditions of this Pledge Agreement, to assign and pledge to Bank, and grant Bank a security interest in and to, the Collateral described herein.

 

AGREEMENT

 

NOW, THEREFORE, for and in consideration of the matters set forth above and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Warehouse Agreement.  In addition, as used in this Pledge Agreement, the following terms shall have the meanings set forth below:

 

“Collateral” shall mean:  (a) all right, title and interest of Seller in and to each depository and other account established by Seller at Bank related to the Warehouse Agreement, and all funds therein contained and all earnings thereon and proceeds thereof, including, without limitation, the Accounts more particularly described on Schedule 1 attached hereto (collectively, the “Accounts”); and (b) any and all other property included in the definition of “Collateral” as such term is defined in the Warehouse Agreement, but specifically excluding any servicing or escrow accounts relating to the servicing of the related Mortgage Loans.  For the avoidance of doubt, Collateral shall specifically not include any corporate, custodial or other accounts of Seller held at Bank that do not relate to the Warehouse Agreement.

 

“Secured Obligations” shall mean the Repurchase/Sale Obligations and any and all other indebtedness, obligations and liabilities of Seller to Bank of any kind or character under the Warehouse Agreement or any other Warehouse Document, now existing or

 

1

 

hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several.

 

2.             Seller hereby pledges and assigns and grants to Bank a continuing security interest in and to the Collateral to secure the prompt and complete payment and performance of the Secured Obligations.

 

3.             If any Event of Default should occur and be continuing, then Bank may enforce this Pledge Agreement in any manner provided hereunder or at Law or in equity or otherwise.  Without limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing, then Bank may, at its discretion, apply or use any cash held in the Accounts (to the extent of the withdraw value of each Account), and any cash proceeds received by Bank in respect of any sale or other disposition of, collection from, or other realization upon all or any part of the Collateral, towards the satisfaction of the Secured Obligations (provided that Seller shall continue to be liable for any unsatisfied portion of the Secured Obligations).  Should an Event of Default occur and be continuing, Bank may proceed against the Collateral without exhausting its remedies against any Person liable under or with respect to the Warehouse Agreement or any other Warehouse Document or against any other security therefor, whether in court, by foreclosure, by private sale or otherwise, at which Bank may be a purchaser, and without making any election.

 

4.             Except for Liens in favor of Bank:  (a) as of the Effective Date, no Lien exists on any of the Collateral; and (b) at all times on and after the Effective Date, Seller will not create, incur or suffer to exist any Lien on any of the Collateral.

 

5.             Nothing in this Pledge Agreement shall be construed as requiring Bank to enforce this Pledge Agreement.  Bank’s failure to do so on one or more occasions shall not affect Bank’s right so to do; nor will enforcement of this Pledge Agreement for less than the full value of any Account impair the effectiveness of this Pledge Agreement as to the remaining value thereof.  Bank may elect to enforce its rights under the Warehouse Agreement or any other Warehouse Document without resort to the remedies provided in this Pledge Agreement.

 

6.             Bank expressly agrees that at such time as the duties and obligations of Seller under the Warehouse Agreement have been performed and satisfied without the necessity of Bank exercising its rights hereunder or any other Warehouse Document, and no defense against the duties and obligations under the Warehouse Agreement or any other Warehouse Document or adverse claims of ownership to any security therefor is being asserted, then this Pledge shall be released in writing by Bank.

 

7.             From and after the occurrence and continuation of an Event of Default, Seller authorizes Bank, at Bank’s option, to collect and receive any and all sums becoming due upon the Collateral, such sums to be held by Bank without liability for interest thereon and applied toward the Secured Obligations.  Subject to the terms hereof and the Warehouse Agreement, Bank shall have the full control of each Account until it is released in accordance herewith.  All interest, if any, earned on the Accounts prior to an Event of Default shall be paid to Seller.

 

8.             Reserved.

 

2

 

9.             Bank, in addition to the rights and remedies provided for in the preceding paragraphs, shall have all other rights and remedies of a secured party under the UCC, and shall have the common law rights of set off and banker’s lien, and Bank shall be entitled to avail itself of all such other rights and remedies as may be now or hereafter existing at Law or in equity for the performance of the Secured Obligations, and the foreclosure of the security interest created hereby and the resort to any remedy provided hereunder or provided by the UCC, or by any other Law of the State of Texas, shall not prevent the concurrent exercise or enforcement of any other appropriate remedy or remedies.

 

10.          The requirement of reasonable notice to Seller of the time and place of any public sale of the Collateral, or of the time after which any private sale or any other intended disposition thereof is to be made, shall be met if such notice is mailed, postage prepaid, to Seller at the notice address set forth in the Warehouse Agreement, at least ten (10) days before the date of any public sale or at least ten (10) days before the time after which any private sale or other disposition is to be made.

 

11.          Nothing in the foregoing shall be construed as requiring Bank to enforce this security or to resort to the security hereof in any particular manner excluding other rights or remedies.  Bank’s failure to enforce this security in any fashion on one or more occasions shall not affect its right so to do; nor will enforcement hereof for less than the full extent or value of the Account impair the effectiveness of the security hereof as to any remaining value or interest thereof.  Bank may proceed first to enforce the Secured Obligations without resort to the remedies provided in this Pledge Agreement; in such event the terms of the Warehouse Agreement and the other Warehouse Documents alone shall be controlling and no provisions hereof shall be construed as requiring Bank to perform any condition precedent to the enforcement of such duties and obligations and the security therefor against any and all Persons liable therefor nor prevent the continued holding of the Accounts or other Collateral and the collection of sums thereunder for proper application to the duties and obligations of the Warehouse Agreement.

 

12.          Bank may remedy any Event of Default, without waiving the same, or may waive any Event of Default without waiving any prior or subsequent Event of Default.

 

13.          The security interest herein created shall not be affected by or affect any other security taken for the performance of the duties or obligations under the Warehouse Agreement hereby secured, or any part thereof, and any extensions may be made for the performance of such duties and obligations without affecting the priority of this Pledge Agreement or the validity thereof.  Bank and its successors shall not be limited by any election of remedies if it chooses to foreclose this security interest by suit.  The right to sell under the terms hereof shall also exist cumulative with said suit and one method shall not bar the other, but both may be exercised at the same or different times; provided, however, that one shall not be a defense to the other.

 

14.          Seller represents to and covenants and agrees with Bank that Seller will at any time or from time to time, upon the written request of Bank, execute and deliver such further documents and do such other acts and things as Bank may reasonably specify for the purpose of further assurance and of effecting the purposes of this Pledge Agreement, and otherwise do any and all

 

3

 

things and acts whatsoever which Bank may reasonably request in order to perfect this Pledge Agreement and the security interests created thereby.

 

15.          The law governing this Pledge Agreement shall be the UCC and other applicable laws of the State of Texas, and this Pledge Agreement shall be performable in Collin County, Texas.  Except as otherwise provided herein, all terms used herein which, are defined in the Texas Business and Commerce Code shall have the same meaning herein as in said Code.

 

16.          If any clause or provision of this Pledge Agreement is illegal, invalid, or unenforceable, under present or future Laws effective during the term hereof, then it is the intention of the parties hereto that the remainder of this Pledge Agreement shall not be affected thereby.  It is also the intention of the parties hereto that in lieu of each clause or provision that is illegal, invalid or unenforceable, there be added as a part of this Pledge Agreement a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable.

 

17.          The Accounts are delivered herewith or are authorized to be held by Bank.

 

18.          The term of this Pledge Agreement shall begin on the Effective Date and shall expire ten (10) days after the date on which:  (a) the Warehouse Agreement has terminated in accordance with its terms; and (b) all of the Secured Obligations, and all other indebtedness, obligations and liabilities (if any) secured hereby, have been fully satisfied, paid and performed.  This Pledge Agreement shall be binding upon Seller and inure to the benefit of Bank and its successors and assigns.  Seller may not transfer or assign its duties or obligations hereunder without the prior written consent of Bank.

 

19.          The liability of all Persons obligated to Bank in any manner under this Pledge Agreement shall be joint and several.  If more than one Person shall execute this Pledge Agreement as “Seller”, then the term “Seller” as used herein shall refer both to each such Person individually and to all such Persons collectively.

 

20.          THIS WRITTEN AGREEMENT AND THE OTHER WAREHOUSE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Page Follows]

 

4

 

EXECUTED by Seller to be effective as of the Effective Date.

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

***

 

	
STATE OF
    	
 
    	
 
    	
§
    
	
 
    	
 
    	
 
    	
§
    
	
COUNTY OF
    	
 
    	
 
    	
§
    

 

This document was acknowledged before me on the day of              , 20   , by                                                                                                of AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY, known to me to be the person who executed this document in the capacity and for the purposes therein stated.

 

	
 
    	
 
    
	
 
    	
Notary Public, State of
    	
 
    

 

[NOTARY STAMP]

 

	
AGREED TO AND ACCEPTED BY BANK AT RICHARDSON,
    
	
COLLIN COUNTY. TEXAS. AS OF THE EFFECTIVE DATE:
    
	
 
    
	
TEXAS   CAPITAL BANK,
    
	
NATIONAL   ASSOCIATION
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
Bruce Karda
    	
 
    
	
Title:
    	
Senior Vice President
    

 

 

 

ACKNOWLEDGMENT

 

A notary public or other officer completing this certificate 
 verifies only the identity of the individual who signed the 
 document to which this certificate is attached, and not the 
 truthfulness, accuracy, or validity of that document.

 

	
State of California
    	
 
    
	
County of
    	
 
    	
)
    
	
 
    
	
On
    	
 
    	
before me.
    	
 
    
	
 
    	
(insert name and   title of the officer)
    
						

 

personally appeared                                                                                                                                         who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

	
Signature
    	
 
    	
(Seal)
    

 

 

SCHEDULE 1
  (TO PLEDGE AGREEMENT)

 

LIST OF ACCOUNTS

 

 

EXHIBIT C
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

RESERVED

 

 

EXHIBIT D
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

UCC-1 FINANCING STATEMENT

 

[Follows This Cover Page]

 

 

UCC-1 FINANCING STATEMENT
 SCHEDULE OF COLLATERAL

 

	
DEBTOR:
    	
AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY   COMPANY
    
	
 
    	
 
    
	
SECURED PARTY:
    	
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION
    

 

Capitalized terms used but not otherwise defined in this UCC-1 Financing Statement Schedule of Collateral shall have the meanings given to such terms in the UCC-1 Financing Statement Schedule of Defined Terms attached hereto and made a part hereof for all purposes.  Unless otherwise defined in the UCC-1 Financing Statement Schedule of Defined Terms or in this UCC-1 Financing Statement Schedule of Collateral, all capitalized terms used herein shall have the meanings given to such terms in the UCC.

 

This Financing Statement covers any and all right, title and interest of Debtor in and to any and all Participated Mortgage Loans, wherever the foregoing is located, in which Debtor now has or at any time hereafter has or acquires any right, title or interest, and all Products and Proceeds thereof (collectively, the “Collateral”).  Without limiting the generality of the foregoing, the term Collateral shall include all right, title and interest of Debtor in and to the following, wherever the following is located, in which Debtor now has or at any time hereafter has or acquires any right, title or interest, and all Products and Proceeds thereof:

 

1.                                      (a) the Mortgage Notes evidencing the Participated Mortgage Loans; (b) the Security Instruments securing the Participated Mortgage Loans and the other Mortgage Loan Documents related to the Participated Mortgage Loans; and (c) any and all other documents relating to the Participated Mortgage Loans (including, without limitation, any and all surveys, appraisals and title insurance commitments and policies);

 

2.                                      (a) all of the rights of Debtor to the payment of money (including, without limitation, tax refund, insurance proceeds and condemnation proceeds) relating to the Participated Mortgage Loans or the Residential Real Properties securing same; and (b) any other rights ancillary to or securing or relating to the Participated Mortgage Loans;

 

3.                                      all guaranties, bonds, insurance policies and commitments relating to the Participated Mortgage Loans;

 

4.                                      all agreements entered into by Debtor relating to the Participated Mortgage Loans (but solely to the extent any such agreement relates to the Participated Mortgage Loans);

 

5.                                      (a) all Take-Out Purchase Agreements related to the Participated Mortgage Loans; and (b) all rights to sell and deliver Participated Mortgage Loans to purchasers thereof;

 

6.                                      all proceeds from the sale, financing or other disposition of the Participated Mortgage Loans;

 

1

 

7.                                      all of the rights of Debtor in the portion of any Mortgage Backed Securities secured by, created from or representing any interest in the Participated Mortgage Loans;

 

8.                                      (a) all rights to service, administer or collect the Participated Mortgage Loans; and (b) solely to the extent any such agreements or rights relate to the Participated Mortgage Loans, (i) all agreements pursuant to which Debtor undertakes to service, administer or collect the Participated Mortgage Loans and (ii) all rights to the payment of money on account of such servicing, administration or collection activities;

 

9.                                      the Deposit Accounts and any and all funds now or hereafter deposited in or otherwise contained in the Deposit Accounts, including, without limitation, any and all interest and other earnings thereon;

 

10.                               all data, files (including, without limitation, credit files), books, records (including, without limitation, servicing records), correspondence and accounting records, whether in electronic or written form, and software, computer files, computer programs, printouts and other electronic materials or records related to the Participated Mortgage Loans (including, without limitation, all of the foregoing items necessary to administer, service and collect the Participated Mortgage Loans), but solely to the extent any such item relates to the Participated Mortgage Loans; and

 

11.                               all accounts, chattel paper, commercial tort claims, Deposit Accounts, documents, financial assets, general intangibles, instruments, investment property, securities, securities accounts and other personal property of Debtor of any kind or type, in each case solely to the extent related to the Participated Mortgage Loans.

 

2

 

UCC-1 FINANCING STATEMENT
 SCHEDULE OF DEFINED TERMS

 

“Borrower” shall mean any Person who is an obligor on or under a Mortgage Loan.

 

“Debtor” (whether one or more) shall mean each Person identified as “Debtor” in the UCC-1 Financing Statement Schedule of Collateral to which this UCC-1 Financing Statement Schedule of Defined Terms is attached.  If the term “Debtor” includes more than one Person, then the term “Debtor” as used herein shall refer both to each such Person individually and to all such Persons collectively.

 

“Deposit Accounts” shall mean those certain deposit accounts established by Debtor and maintained at Secured Party pursuant to the Warehouse Agreement.

 

“Mortgage Backed Security” shall mean a mortgage pass-through security, collateralized mortgage obligation, real estate mortgage investment conduit or other security that:  (a) is based on and backed by an underlying pool of mortgage loans; and (b) provides for payment by its issuer to its holder of a specified principal installments and/or fixed or floating rate of interest on the unpaid balance and for all prepayments to be passed through to its holder.

 

“Mortgage Loan” shall mean a residential mortgage loan evidenced by a Mortgage Note and secured by a Security Instrument.

 

“Mortgage Loan Documents” shall mean, with respect to any Mortgage Loan, the Mortgage Note evidencing such Mortgage Loan, the Security Instrument securing such Mortgage Loan and all other agreements, instruments and documents governing, evidencing, guaranteeing or relating to such Mortgage Loan, Mortgage Note or Security Instrument.

 

“Mortgage Note” shall mean, with respect to any Mortgage Loan, a promissory note evidencing such Mortgage Loan and secured by a Security Instrument.

 

“Participated Mortgage Loan” shall mean any Mortgage Loan in which Secured Party has elected to purchase a Participation Interest from Debtor pursuant to the terms and conditions of the Warehouse Agreement.  A Mortgage Loan in which Secured Party has purchased a Participation Interest shall cease to be a Participated Mortgage Loan under the Warehouse Agreement (and shall cease to be a Participated Mortgage Loan for purposes of the UCC-1 Financing Statement Schedule of Collateral to which this UCC-1 Financing Statement Schedule of Defined Terms is attached) at such time as such Mortgage Loan is a Retired Participated Mortgage Loan.

 

“Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other form of entity.

 

“Products and Proceeds” shall mean:  (a) any and all “proceeds,” as such term is defined in Chapter 9 of the UCC and, in any event, shall include, but not be limited to (i) any and all proceeds of any insurance, indemnity, warranty, or guaranty payable to Debtor from time to time

 

3

 

with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure, or forfeiture of all or any part of the Collateral by any Tribunal (or any person acting under color of Tribunal) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral; and (b) any and all additions, substitutions, replacements and products of any of the Collateral.

 

“Residential Real Property” shall mean a single platted lot of land improved with a one-to-four family residence, or a condominium or planned unit development.

 

“Retired Participated Mortgage Loan” shall mean any Mortgage Loan in which Secured Party has purchased a Participation Interest:  (a) which has been subsequently sold in its entirety to a Take-Out Purchaser and the full amount of the purchase price for such sale has been received and applied by Secured Party (as reflected on the Secured Party’s books and records), all pursuant to the terms of the Warehouse Agreement; (b) for which the Participation Interest in such Mortgage Loan has been subsequently repurchased in its entirety by Debtor from Secured Party and the full amount of the repurchase price for such repurchase has been received and applied by Secured Party, all pursuant to the terms of the Warehouse Agreement; or (c) for which the entire principal balance and all accrued interest for such Mortgage Loan has been subsequently paid in full by the related Borrower, and Secured Party’s pro rata share of such amounts have been received and applied by Secured Party, all pursuant to the terms of the Warehouse Agreement.

 

“Secured Party” shall mean Texas Capital Bank, National Association.

 

“Security Instrument” shall mean, with respect to any Mortgage Loan, a full recourse mortgage or deed of trust securing such Mortgage Loan and granting a perfected first priority lien on the Residential Real Property related thereto.

 

“Take-Out Purchase Agreement” shall mean, with respect to any Participated Mortgage Loan, any and all agreements, commitments or other arrangements for Debtor to sell such Participated Mortgage Loan to any Take-Out Purchaser.

 

“Take-Out Purchaser” shall mean any Person approved by Secured Party (pursuant to the Warehouse Agreement) for the purchase of any Participated Mortgage Loan.

 

“Tribunal” shall mean any state, commonwealth, federal, foreign, territorial or other court or governmental department, commission, board, bureau, agency or instrumentality.

 

“UCC” shall mean the Uniform Commercial Code of the State of Texas, or other applicable jurisdiction, as it may be amended from time to time.

 

“Warehouse Agreement” shall mean that certain Mortgage Warehouse Agreement most recently executed by Debtor and Secured Party on or before the date of the filing of this UCC-1 Financing Statement, as the same may from time to time be modified, amended, supplemented, renewed, extended or replaced.

 

4

 

EXHIBIT E
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

FINANCIAL COVENANTS ADDENDUM

 

[Follows This Cover Page]

 

 

FINANCIAL COVENANTS ADDENDUM

 

THIS FINANCIAL COVENANTS ADDENDUM (this “Addendum”) is entered into as of JULY 29, 2020 (but effective as of the Effective Date) by the undersigned executing this Addendum as “Seller” and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”) concurrently with, and as a condition to the effectiveness of, that certain Mortgage Warehouse Agreement (as amended and modified from time to time, the “Warehouse Agreement”) dated of even date herewith, executed by Bank and Seller.  Accordingly, Bank and Seller agree as follows:

 

1.                                      Financial Covenants.  Seller covenants and agrees that, until the Agreement Termination Date, Seller will, at all times, observe, perform and comply with each of the following covenant(s):

 

(a)                                 Minimum Tangible Net Worth.  Seller shall maintain Tangible Net Worth of not less than [***].  “Tangible Net Worth” means, at any particular time, all amounts which, in conformity with GAAP, would be properly included as owner’s equity on Seller’s balance sheet, but excluding (i) all assets which are properly classified as intangible assets, and (ii) loans or advances to, or receivables from, any owner, officer or employee of Seller.

 

(b)                                 Minimum Liquid Assets.  Seller shall maintain Total Eligible Liquidity of not less than [***].  “Total Eligible Liquidity” means, at any particular time, the sum of Seller’s cash, cash equivalents (certificates of deposit and other depository accounts established at FDIC-insured banks), United States government-issued securities and other registered, unrestricted equity or debt securities which are publicly traded on a recognized United States exchange and have been approved by Bank, in its commercially reasonable discretion and which, in all events, are held in Seller’s name and are free and clear of all Liens (except Liens in favor of Bank), as calculated and determined as set forth in Exhibit E-1 attached hereto.

 

(c)                                  Minimum Pre-Tax Net Income.  Seller shall maintain, on a rolling four quarter basis, minimum pre-tax net income of not less than $1.00.

 

If Seller is required or permitted under the Warehouse Agreement to deliver to Bank quarterly consolidated financial statements, then the above-described financial covenants will be tested and calculated by Bank based on the consolidated financial information of Seller and each other entity whose financial information is required or permitted by Bank to be set forth on such consolidated financial statements.

 

After the Effective Date, Seller and Bank may, in their sole discretion, enter into certain written agreements executed by Seller and Bank evidencing or otherwise governing one or more credit facilities extended by Bank to Seller in addition to the financial accommodations evidenced and governed by the Warehouse Agreement (collectively, “Credit Agreements”), which Credit Agreements may include (a) certain financial covenants pertaining to Seller in addition to those contained in this Addendum (each a “New Financial Covenant”) and (b) one or more of the same financial covenants contained in this Addendum, but with certain modified terms pertaining to Seller with respect to each such financial covenant (each a “Modified Financial Covenant”).  In

 

1

 

such event, unless otherwise agreed to by Bank, the financial covenants contained in this Addendum shall automatically be modified and amended from time to time (a) to include each New Financial Covenant and (b) to include the most recent terms of each Modified Financial Covenant to the extent inconsistent with those contained in this Addendum.  Except as modified and amended in accordance with the terms of the previous sentence, this Addendum shall continue in full force and effect as originally executed and delivered.  The modifications and amendments contemplated hereby shall not be affected by the termination of any Credit Agreement, and shall survive the termination of each Credit Agreement.

 

2.                                      Intentionally Omitted.

 

3.                                      Compliance Certificates.  Seller acknowledges Bank has requested, and Seller shall timely prepare and furnish to Bank, the financial statements and reports described in the Warehouse Agreement, plus such additional financial reports and information as Bank may from time to time request.  In addition, Seller shall prepare and submit to Bank, on a quarterly basis and no later than [***] days after the close of each fiscal quarter, a compliance certificate executed by Seller, demonstrating Seller’s compliance with the covenants set forth in Section 1 of this Addendum and the provisions of the Warehouse Agreement, and such substantiation thereof as may be required by Bank, all in such form and content required by Bank from time to time.  A copy of Bank’s current required form of compliance certificate is attached hereto as Exhibit E-1.  Although compliance certificates are to be delivered to Bank on a quarterly basis, Seller shall at all times comply with all covenants set forth in Section 1 of this Addendum and the provisions of the Warehouse Agreement and Bank may test Seller’s compliance with such covenants and provisions at any time.

 

4.                                      Miscellaneous.  This Addendum is made a part of and is incorporated into the Warehouse Agreement.  The provisions of this Addendum superseded, modify and amend any and all inconsistent or conflicting provisions in the Warehouse Agreement.  Except as hereby modified and amended, the Warehouse Agreement shall remain in full force and effect.  Capitalized terms not otherwise defined in this Addendum shall have the meanings set forth in the Warehouse Agreement.  The liability of all Persons obligated to Bank in any manner under this Addendum shall be joint and several.  If more than one Person shall execute this Addendum as “Seller”, then the term “Seller” as used herein shall refer both to each such Person individually and to all such Persons collectively.

 

[Signature Page Follows]

 

2

 

EXECUTED by Seller to be effective as of the Effective Date.

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

***

 

	
STATE OF
    	
 
    	
 
    	
§
    
	
 
    	
 
    	
 
    	
§
    
	
COUNTY OF
    	
 
    	
 
    	
§
    

 

This document was acknowledged before me on the                 day of                           , 20   , by                                                     of AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY, known to me to be the person who executed this document in the capacity and for the purposes therein stated.

 

	
 
    	
 
    
	
 
    	
Notary Public, State of
    

 

[NOTARY STAMP]

 

AGREED TO AND ACCEPTED BY BANK AT RICHARDSON,
 COLLIN COUNTY, TEXAS.  AS OF THE EFFECTIVE DATE:

 

TEXAS CAPITAL BANK,
 NATIONAL ASSOCIATION

 

	
By:
    	
 
    	
 
    
	
Name:
    	
Bruce Karda
    	
 
    
	
Title:
    	
Senior Vice President
    	
 
    

 

 

ACKNOWLEDGMENT

 

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

 

State of California

County of                               )

 

	
On                                            before   me,
    	
 
    
	
 
    	
(insert name and   title of the officer)
    

 

personally appeared                                                         who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

	
Signature
    	
 
    	
 
    	
(Seal)
    

 

 

EXHIBIT E-1
  (TO FINANCIAL COVENANTS ADDENDUM
 TO MORTGAGE WAREHOUSE AGREEMENT)

 

COMPLIANCE CERTIFICATE

 

[Follows This Cover Page]

 

 

AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY

 

COMPLIANCE CERTIFICATE

 

REPORTING PERIOD:                         , 20     through                     , 20

 

This Compliance Certificate (this “Certificate”) is being delivered in connection with that certain Mortgage Warehouse Agreement (as amended and modified from time to time, and including all addenda and exhibits thereto, the “Agreement”) entered into as of JULY 29, 2020 executed by TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”) and the undersigned executing this Certificate as “Seller”.  Capitalized terms used in this Certificate shall, unless otherwise indicated herein, have the meanings set forth in the Agreement.  On behalf of Seller, the undersigned certifies to Bank as of the last day of the reporting period indicated above (the “Determination Date”) that:  (a) no Event of Default has occurred and is continuing; (b) all representations and warranties of Seller contained in the Agreement and in the other Warehouse Documents are true and correct in all material respects; and (c) the information set forth below and all documents provided to Bank to substantiate the same are true, correct and complete.

 

1

 

EXHIBIT F
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

RESERVED

 

 

EXHIBIT G
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

LIST OF CURRENT WAREHOUSE FACILITIES

 

 

EXHIBIT H
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

LIST OF CURRENT AFFILIATE ESCROW AGENTS

 

	
Name of Affiliate Escrow Agent
   (including any d/b/a)
    	
 
    	
Address
    
	
NOT APPLICABLE
    	
 
    	
NOT APPLICABLE
    

 

 

EXHIBIT I
  (TO MORTGAGE WAREHOUSE AGREEMENT)

 

BLANKET ASSIGNMENT

 

[Follows This Cover Page]

 

 

(Space Above For Recorder’s Use)

 

ASSIGNMENT OF INTERESTS IN MORTGAGE LOANS

 

THIS ASSIGNMENT OF INTERESTS IN MORTGAGE LOANS (this “Agreement”) is made and entered into as of JULY 29, 2020 (but effective as of the Effective Date) between AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY (the foregoing are each individually and collectively referred to herein as “Seller”) and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (together with its successors and assigns, “Bank”).

 

RECITALS

 

A.                                    Seller and Bank have executed that certain Mortgage Warehouse Agreement (as amended or modified from time to time, the “Warehouse Agreement”) entered into as of even date herewith, relating to Bank’s discretionary purchase from time to time of Participation Interests from Seller in Mortgage Loans.  Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Warehouse Agreement.

 

B.                                    Pursuant to the terms and conditions of the Warehouse Agreement, Seller shall sell, transfer, assign and convey to Bank a Participation Interest in each Mortgage Loan and Mortgage Loan Document related thereto in which Bank elects to purchase a Participation Interest under the Warehouse Agreement.

 

AGREEMENT

 

NOW, THEREFORE, for and in consideration of the premises, recitals and the agreements contained in this Agreement and the Warehouse Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Seller and Bank agree after the occurrence and continuation of an Event of Default under the Warehouse Agreement as follows:

 

1.                                      Seller does hereby irrevocably, absolutely and unconditionally sell, transfer, assign and convey to Bank any and all of Seller’s right, title and interest in and to any and all Participation Interests in Mortgage Loans now or hereafter purchased by Bank from Seller pursuant to the terms of the Warehouse Agreement.  With respect to any Participation Interest purchased by Bank from Seller under the Warehouse Agreement, the sale, transfer, assignment and conveyance by Seller to Bank of all of Seller’s right, title and interest in and to such Participation Interest in such Mortgage Loan shall be automatically effective, and shall be deemed conclusively to have occurred as of the Purchase Date for such Participation Interest, without further action by either party hereto, by operation of the applicable terms and provisions of the Warehouse Agreement.

 

2.                                      Bank may from time to time append and attach hereto as Schedule A (the “Participation Interest Schedule”) information identifying each Participated Mortgage Loan and Bank’s Participation Interest therein (“Participation Interest Information”), which Participation Interest Information may include with respect to each Participated Mortgage Loan:  (a) the name

 

1

 

of the related Borrower; (b) the principal amount of the Participated Mortgage Loan; (c) the related Purchase Date; (d) Bank’s related Participation Percentage; (e) Seller’s related Retained Percentage; (f) a description of the related Residential Real Property; and (g) the recording information for the related Security Instrument.  In addition, upon any repurchase of a Participation Interest by Seller pursuant to the terms of the Warehouse Agreement, Bank shall assign such Participation Interest back to Seller and take whatever other action is necessary in order to effectuate such transfer back to Seller Bank may, and shall upon any repurchase of a Participation Interest from Seller, from time to time attach hereto an updated Participation Interest Schedule which reflects the then-current Participation Interest Information (and immediately record such updated schedule if this Agreement has been previously recorded pursuant to paragraph 3 below).

 

3.                                      Bank may at any time elect to record this Agreement (with a corresponding Participation Interest Schedule) in any real property records of any jurisdiction deemed appropriate from time to time by Bank.  However, any failure by Bank to so record this Agreement shall not limit, impair or otherwise affect the provisions of the Warehouse Agreement or this Agreement.  If Bank at any time requires additional executed originals of this Agreement in order to effect the recording of this Agreement (with any corresponding Participation Interest Schedule) in any jurisdiction deemed appropriate by Bank or for any other reason, Seller shall promptly upon request by Bank execute additional originals of this Agreement as and when required by Bank, and Bank may execute additional copies of this Agreement on Seller’s behalf, as Seller’s attorney-in-fact, pursuant to any power of attorney granted to Bank by Seller under the Warehouse Agreement or any other Warehouse Document.  For the avoidance of doubt, any power of attorney granted to Bank by Seller under any Warehouse Document shall only be effective following the occurrence and during the continuance of an Event of Default under the Warehouse Agreement.

 

4.                                      The liability of all Persons obligated to Bank in any manner under this Agreement shall be joint and several.  If more than one Person shall execute this Addendum as “Seller”, then the term “Seller” as used herein shall refer both to each such Person individually and to all such Persons collectively.

 

5.                                      This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Seller and Bank.  Neither party hereto may sell, assign or transfer any right, title or interest hereunder except in accordance with the Warehouse Agreement or with the prior written consent of the other party hereto.  Further, Seller shall not sell, assign or transfer any right, title or interest in the Participated Mortgage Loans in violation of any applicable provisions of the Warehouse Agreement.

 

6.                                      This Agreement may be executed in several identical counterparts, and by the parties hereto on separate counterparts, and each counterpart, when so executed and delivered, shall constitute an original instrument, and all such separate counterparts shall constitute but one and the same instrument.

 

7.                                      This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Texas, without regard to the principles of conflicts of laws thereof.

 

2

 

[Signature Pages Follow]

 

3

 

IN WITNESS WHEREOF, each of the parties hereto have duly executed and delivered this Agreement effective as of the Effective Date.

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
AMERIHOME   MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

***

 

	
STATE OF
    	
 
    	
 
    	
§
    
	
 
    	
 
    	
 
    	
§
    
	
COUNTY OF
    	
 
    	
 
    	
§
    

 

This document was acknowledged, before me on the                 day of                           , 20   , by                                                     of AMERIHOME MORTGAGE COMPANY, LLC, A DELAWARE LIMITED LIABILITY COMPANY, known to me to be the person who executed this document in the capacity and for the purposes therein stated.

 

	
 
    	
 
    
	
 
    	
Notary Public, State of
    	
 
    

 

[NOTARY STAMP]

 

 

ACKNOWLEDGMENT

 

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

 

State of California

County of                               )

 

	
On                                            before   me,
    	
 
    
	
 
    	
(insert name and   title of the officer)
    

 

personally appeared                                    who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

	
Signature
    	
 
    	
 
    	
(Seal)
    

 

 

AGREED TO AND ACCEPTED by Bank at Richardson, Collin County, Texas, as of the Effective Date.

 

	
 
    	
BANK:
    
	
 
    	
 
    
	
 
    	
TEXAS CAPITAL   BANK,

NATIONAL   ASSOCIATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

***

 

	
STATE OF
    	
 
    	
 
    	
§
    
	
 
    	
 
    	
 
    	
§
    
	
COUNTY OF
    	
 
    	
 
    	
§
    

 

This document was acknowledged before me on the                 day of                           , 20   , by                                                     of TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, known to me to be the person who executed this document in the capacity and for the purposes therein stated.

 

	
 
    	
 
    
	
 
    	
Notary Public, State of
    	
 
    

 

[NOTARY STAMP]

 

 

SCHEDULE A
  (TO ASSIGNMENT OF INTERESTS IN MORTGAGE LOANS)

 

PARTICIPATION INTEREST SCHEDULE

 

[To Be Attached and Updated By Bank From Time to Time]CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

 

Exhibit 10.37

 

Execution Version

 

 

MASTER REPURCHASE AGREEMENT

 

Between:

 

UBS BANK USA, as Buyer

 

and

 

AMERIHOME MORTGAGE COMPANY, LLC, as Seller

 

Dated as of July 24, 2015

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 1.
    	
APPLICABILITY
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
INITIATION; TERMINATION
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
MARGIN AMOUNT   MAINTENANCE
    	
27
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
PRICE DIFFERENTIAL;   COLLECTIONS; INCOME PAYMENTS
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    	
REQUIREMENT OF LAW
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    	
TAXES
    	
30
    
	
 
    	
 
    	
 
    
	
SECTION 8.
    	
SECURITY INTEREST;   BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT
    	
33
    
	
 
    	
 
    	
 
    
	
SECTION 9.
    	
PAYMENT, TRANSFER;   ACCOUNTS
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 10.
    	
RESERVED
    	
37
    
	
 
    	
 
    	
 
    
	
SECTION 11.
    	
REPRESENTATIONS
    	
37
    
	
 
    	
 
    	
 
    
	
SECTION 12.
    	
COVENANTS
    	
42
    
	
 
    	
 
    	
 
    
	
SECTION 13.
    	
EVENTS OF DEFAULT
    	
48
    
	
 
    	
 
    	
 
    
	
SECTION 14.
    	
REMEDIES
    	
50
    
	
 
    	
 
    	
 
    
	
SECTION 15.
    	
INDEMNIFICATION AND   EXPENSES; RECOURSE
    	
53
    
	
 
    	
 
    	
 
    
	
SECTION 16.
    	
SERVICING
    	
54
    
	
 
    	
 
    	
 
    
	
SECTION 17.
    	
DUE DILIGENCE
    	
56
    
	
 
    	
 
    	
 
    
	
SECTION 18.
    	
ASSIGNABILITY
    	
56
    
	
 
    	
 
    	
 
    
	
SECTION 19.
    	
TRANSFER AND   MAINTENANCE OF REGISTER
    	
57
    
	
 
    	
 
    	
 
    
	
SECTION 20.
    	
HYPOTHECATION OR PLEDGE   OF PURCHASED ASSETS
    	
58
    
	
 
    	
 
    	
 
    
	
SECTION 21.
    	
TAX TREATMENT
    	
58
    
	
 
    	
 
    	
 
    
	
SECTION 22.
    	
SET-OFF
    	
58
    

 

i

 

	
SECTION 23.
    	
TERMINABILITY
    	
58
    
	
 
    	
 
    	
 
    
	
SECTION 24.
    	
NOTICES AND OTHER   COMMUNICATIONS
    	
59
    
	
 
    	
 
    	
 
    
	
SECTION 25.
    	
USE OF THE WAREHOUSE   ELECTRONIC SYSTEM AND OTHER ELECTRONIC MEDIA
    	
60
    
	
 
    	
 
    	
 
    
	
SECTION 26.
    	
ENTIRE AGREEMENT;   SEVERABILITY; SINGLE AGREEMENT
    	
62
    
	
 
    	
 
    	
 
    
	
SECTION 27.
    	
GOVERNING LAW
    	
62
    
	
 
    	
 
    	
 
    
	
SECTION 28.
    	
SUBMISSION TO   JURISDICTION; WAIVERS
    	
62
    
	
 
    	
 
    	
 
    
	
SECTION 29.
    	
NO WAIVERS, ETC
    	
63
    
	
 
    	
 
    	
 
    
	
SECTION 30.
    	
NETTING
    	
63
    
	
 
    	
 
    	
 
    
	
SECTION 31.
    	
CONFIDENTIALITY
    	
64
    
	
 
    	
 
    	
 
    
	
SECTION 32.
    	
INTENT
    	
66
    
	
 
    	
 
    	
 
    
	
SECTION 33.
    	
DISCLOSURE RELATING TO   CERTAIN FEDERAL PROTECTIONS
    	
67
    
	
 
    	
 
    	
 
    
	
SECTION 34.
    	
CONFLICTS
    	
67
    
	
 
    	
 
    	
 
    
	
SECTION 35.
    	
MISCELLANEOUS
    	
67
    
	
 
    	
 
    	
 
    
	
SECTION 36.
    	
GENERAL INTERPRETIVE   PRINCIPLES
    	
68
    

 

ii

 

SCHEDULES AND EXHIBITS

 

	
SCHEDULE 1
    	
Representations and   Warranties
    
	
 
    	
 
    
	
SCHEDULE 2
    	
Responsible Officers
    
	
 
    	
 
    
	
SCHEDULE 3
    	
Scheduled Indebtedness
    
	
 
    	
 
    
	
EXHIBIT A
    	
Reserved
    
	
 
    	
 
    
	
EXHIBIT B
    	
Form of Seller’s   Officer’s Certificate
    
	
 
    	
 
    
	
EXHIBIT C
    	
Form of Servicer   Notice
    
	
 
    	
 
    
	
EXHIBIT D
    	
Form of Trade   Assignment
    
	
 
    	
 
    
	
EXHIBIT E
    	
Form of Power of Attorney
    
	
 
    	
 
    
	
EXHIBIT F
    	
Form of Tax   Compliance Certificate
    
	
 
    	
 
    
	
EXHIBIT G
    	
Form of Temporary   Increase Request
    

 

iii

 

MASTER REPURCHASE AGREEMENT

 

This is a MASTER REPURCHASE AGREEMENT (the “Agreement”), dated as of July 24, 2015, between AmeriHome Mortgage Company, LLC, a Michigan limited liability company (the “Seller”) and UBS Bank USA, a Utah corporation (the “Buyer”).

 

SECTION 1.                                                 APPLICABILITY

 

From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer Mortgage Loans on a servicing released basis against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans on a servicing released basis or Agency Securities backed by such Mortgage Loans on the Repurchase Date, against the transfer of funds by Seller.  Each such transaction shall be referred to herein as a “Transaction” and shall be governed by this Agreement (including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder), unless otherwise agreed in writing.  This Agreement is not a commitment by Buyer to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for Buyer to enter into Transactions with Seller.  Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement.  Any commitment to enter into Transactions shall be set forth in the Pricing Letter, and shall be subject to satisfaction of all terms and conditions of this Agreement.

 

The Pricing Letter is one of the Program Documents as defined below.  The Pricing Letter is incorporated by reference into this Agreement and Seller agrees to adhere to all terms, conditions and requirements of the Pricing Letter as incorporated herein.  In the event of a conflict or inconsistency between this Agreement and the Pricing Letter, the terms of the Pricing Letter shall govern.

 

SECTION 2.                                                 DEFINITIONS

 

As used herein, the defined terms set forth below shall have the meanings set forth herein.  Additionally, as used herein, the following terms shall have the meanings defined in the Uniform Commercial Code:  accounts, chattel paper (including electronic chattel paper), goods (including inventory and equipment and any accessions thereto), instruments (including promissory notes), documents, investment property, general intangibles (including payment intangibles and software), and supporting obligations, products and proceeds.

 

“1934 Act” shall have the meaning set forth in Section 33 of the Agreement.

 

“Ability to Repay Rule” shall mean 12 CFR 1026.43(c), including all applicable official staff commentary.

 

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

 

 

“Affiliate” shall mean with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code; provided, however, for purposes of the Program Documents, Aris Mortgage Holding Company, LLC shall be considered the sole Affiliate of Seller.

 

“Agency” shall mean Freddie Mac, Fannie Mae or Ginnie Mae, as applicable.

 

“Agency Approval” shall have the meaning set forth in Section 12(w) of the Agreement.

 

“Agency Certified Mortgage Loan” shall mean any Purchased Mortgage Loan that is subject to a Transaction hereunder and is part of a pool of Purchased Mortgage Loans certified by an Agency’s custodian to such Agency as eligible to be either (a) purchased by such Agency or (b) swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of the guidelines issued by the applicable Agency.

 

“Agency Security” shall mean a security issued in exchange for Purchased Mortgage Loans and backed by such Purchased Mortgage Loans that is (a) guaranteed by Ginnie Mae or (b) issued by Fannie Mae or Freddie Mac.

 

“Agency Security Issuance Failure” shall mean the failure of an Agency to cause the Delivery of an Agency Security in accordance with a Takeout Commitment.

 

“Aging Limit” shall have the meaning specified in the Pricing Letter.

 

“Agreement” shall mean this Master Repurchase Agreement between Buyer and Seller, dated as of the date hereof, as the same may be further amended, restated, supplemented or otherwise modified in accordance with the terms of the Agreement.

 

“ALTA” shall mean American Land Title Association, or any successor thereto.

 

“Annual Financial Statement Date” shall have the meaning set forth in the Pricing Letter.

 

“Anti-Money Laundering Laws” shall have the meaning set forth in Section 11(x) of the Agreement.

 

“Application” shall mean the application delivered by Seller to Buyer in connection with Buyer’s approval of Seller for the program evidenced by the Agreement and any renewal thereof.

 

“Appraisal” shall mean an appraisal meeting the requirements of the representations and warranties set forth in paragraph (nn) on Schedule 1 hereto

 

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

 

2

 

“Appropriate Federal Banking Agency” shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the United States Code, as amended from time to time.

 

“Approved CPA” shall mean a certified public accountant that has not been disapproved by Buyer in writing in its reasonable discretion.

 

“Approved Investor” shall mean any institution which has made a Takeout Commitment and has been approved by Buyer and not subsequently disapproved by Buyer.

 

“Approved Mortgage Product” shall mean each Mortgage Product approved by Buyer as identified in the Pricing Letter.  Notwithstanding any reference to a Mortgage Product herein, such Mortgage Product shall not be an Approved Mortgage Product unless expressly identified as such in the Pricing Letter.

 

“Approved Underwriting Guidelines” shall mean the underwriting guidelines approved by Buyer in its sole good faith discretion.

 

“Asset Value” shall, with respect to each Eligible Mortgage Loan or Agency Security, as of any date of determination, have the meaning specified under the heading “Asset Value” on Schedule 1 to the Pricing Letter subject to modification pursuant to the terms below.  Where a Purchased Asset may qualify for two or more Asset Values hereunder, unless otherwise expressly agreed to by the Buyer in writing, such Purchased Asset shall be assigned the lower Asset Value (other than with respect to an Agency Certified Mortgage Loan or an Agency Security).  Without limiting the generality of the foregoing, Seller acknowledges that:

 

(a)           the Asset Value of a Purchased Asset may be reduced to zero by Buyer if:

 

(i)            such Purchased Asset is a Purchased Mortgage Loan that ceases to be an Eligible Mortgage Loan;

 

(ii)           such Mortgage Note related to a Purchased Asset that is a Purchased Mortgage Loan has been released from the possession of Buyer (other than to an Approved Investor pursuant to a Bailee Letter) for a period in excess of 10 calendar days;

 

(iii)          such Purchased Asset is a Purchased Mortgage Loan that has been released from the possession of Buyer to an Approved Investor pursuant to a Bailee Letter for a period in excess of 45 calendar days;

 

(iv)          such Purchased Asset is a Purchased Mortgage Loan that is a Wet Loan for which the related Mortgage File has not been received by Buyer on or prior to the end of the Aging Limit for such Wet Loan; or

 

(v)           such Purchased Asset is rejected by the related Approved Investor or there shall occur a Takeout Failure and Seller has not provided Buyer with written or electronic evidence that such Purchased Asset is eligible for sale with another Takeout Investor within two (2) Business Days;

 

3

 

(vi)          such Purchased Asset is not properly registered on the MERS® System in accordance with the Electronic Tracking Agreement within (x) with respect to Purchased Mortgage Loans other than Correspondent Mortgage Loans, five (5) Business Days of the related Purchase Date and (y) with respect to Purchased Mortgage Loans that are Correspondent Mortgage Loans, fifteen (15) Business Days of the related Purchase Date;

 

(vii)         such Purchased Asset is a Purchased Mortgage Loan that is a Delinquent Mortgage Loan;

 

(viii)        such Purchased Asset has been subject to Transactions hereunder for a period of greater than its applicable Aging Limit; or

 

(ix)          such Purchased Asset is a Purchased Mortgage Loan that Buyer has determined in its sole good faith discretion is not eligible for whole loan sale or securitization in a transaction consistent with the prevailing sale and securitization industry with respect to substantially similar Mortgage Loans; and

 

(b)           the aggregate Asset Value of each Approved Mortgage Product shall not exceed the Concentration Limit for such applicable Approved Mortgage Product.  If the aggregate Asset Value for any Approved Mortgage Product exceeds the applicable Concentration Limit, Buyer may, in its sole good faith discretion, reduce the value of any related Purchased Assets selected by Buyer to zero until the aggregate Asset Value for such Approved Mortgage Product is less than or equal to the applicable Concentration Limit.

 

“Assignment and Acceptance” shall have the meaning set forth in Section 18 of the Agreement.

 

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

 

“Assignment of Proprietary Lease” shall mean the specific agreement creating a first lien on and pledge of the Co-op Shares and the appurtenant Proprietary Lease securing a Coop Loan.

 

“Bailee Letter” shall have the meaning assigned to such term in the Custodial Agreement.

 

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

 

“Beneficial Tax Owners” shall have the meaning set forth in Section 7(e)(v) of the Agreement.

 

“Business Day” shall mean a day other than (i) a Saturday or Sunday or (ii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the States of New York or California.

 

4

 

“Buydown Amount” shall have the meaning set forth in Section 9(d) of the Agreement.

 

“Buyer” shall mean UBS Bank USA, its successors in interest and assigns pursuant to Section 18 and, with respect to Section 7, its participants.

 

“Capitalized Mortgage Servicing Rights” shall have the meaning specified in the Pricing Letter.

 

“Cash Equivalents” shall mean (a) securities with maturities of [***] days 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 [***] days or less from the date of acquisition and overnight bank deposits of Buyer or its Affiliates or of any commercial bank having capital and surplus in excess of [***], (c) 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 [***] days after the day of acquisition, (d) securities with maturities of [***] days or less from the date of acquisition backed by standby letters of credit issued by Buyer or any commercial bank satisfying the requirements of clause (b) of this definition or (e) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (d) of this definition.

 

“Change in Control” shall mean:

 

(a)           any transaction or event as a result of which Aris Mortgage Holding Company, LLC ceases to own, directly or indirectly at least 100% of the membership interests of Seller;

 

(b)           the sale, transfer, or other disposition of all or substantially all of Seller’s assets (excluding any such action taken in connection with any securitization transaction); or

 

(c)           the consummation of a merger or consolidation of Seller with or into another entity or any other corporate reorganization (in one transaction or in a series of transactions), if more than 50% of the combined voting power of the continuing or surviving entity’s stock or other equity interests outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not direct or indirect equity stockholders of Seller immediately prior to such merger, consolidation or other reorganization.

 

“Closing Protection Letter” shall mean a letter of indemnification from a title insurer addressed to Seller and/or Buyer or for which Buyer is a third party beneficiary, with coverage that is customarily acceptable to Persons engaged in the origination of mortgage loans, identifying the Settlement Agent covered thereby and indemnifying Seller and/or Buyer (directly or as a third party beneficiary) against losses incurred due to malfeasance or fraud by the Settlement Agent or the failure of the Settlement Agent to follow the specific escrow instructions specified by Seller to the Settlement Agent or otherwise by Buyer with respect to the closing of the Mortgage Loan.  The Closing Protection Letter shall be either with respect to the individual Mortgage Loan being purchased pursuant hereto or a blanket Closing Protection Letter which

 

5

 

covers closings conducted by the Settlement Agent in the jurisdiction in which the closing of such Mortgage Loan takes place.

 

“CLTA” shall mean California Land Title Association, or any successor thereto.

 

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

 

“Concentration Limit” shall have the meaning specified in the Pricing Letter.

 

“Confidential Information” shall have the meaning set forth in Section 12(u) of the Agreement.

 

“Confidential Terms” shall have the meaning set forth in Section 31 of the Agreement.

 

“Confirmation” shall mean an electronic confirmation of a Transaction delivered by Buyer to Seller in accordance with Section 3(c)(v) hereof.

 

“Conforming Mortgage Loan” shall mean a Mortgage Loan, which is secured by a first lien, such Mortgage Loan (a) conforms to the requirements of an Agency for securitization or cash purchase and has (i) a minimum FICO score of [***], (ii) a DTI not more than [***] and (iii) a LTV not greater than [***] or (b) is eligible to be insured by FHA, guaranteed by VA or guaranteed by RD (excluding any Mortgage Loan which exceeds Agency guidelines for maximum general conventional loan amount) and (i) has a minimum FICO score of [***]; (ii) has a DTI not more than [***] and (iii) has a LTV not greater than [***].

 

“Co-op Corporation” shall mean, with respect to any Co-op Loan, the cooperative apartment corporation that holds legal title to the related Co-op Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.

 

“Co-op Loan” shall mean a Mortgage Loan secured by the pledge of stock allocated to a Co-op Unit in a Co-op Corporation and collateral assignment of the related Proprietary Lease.

 

“Co-op Project” shall mean, with respect to any Co-op Loan, all real property and improvements thereto and rights therein and thereto owned by a Co-op Corporation including without limitation the land, separate dwelling units and all common elements.

 

“Co-op Shares” shall mean, with respect to any Co-op Loan, the shares of stock issued by a Co-op Corporation and allocated to a Co-op Unit and represented by a Stock Certificate.

 

“Co-op Unit” shall mean, with respect to any Co-op Loan, a specific unit in a Coop Project.

 

“Correspondent Mortgage Loan” shall mean a Mortgage Loan originated by a third party originator and acquired by Seller in accordance with Seller’s correspondent Mortgage Loan program.

 

6

 

“Costs” shall have the meaning set forth in Section 15(a) of the Agreement.

 

“Credit File” shall mean with respect to each Mortgage Loan, the documents and instruments relating to the origination and administration of such Mortgage Loan.

 

“Custodial Account” shall have the meaning set forth in Section 5(b) of the Agreement.

 

“Custodial Agreement” shall mean that certain Custodial Agreement dated as of the date hereof, among Seller, Buyer and Custodian as the same may be amended from time to time.

 

“Custodial Loan Transmission” shall have the meaning set forth in the Custodial Agreement.

 

“Custodian” shall mean Deutsche Bank National Trust Company, or any successor thereto under the Custodial Agreement.

 

“DE Compare Ratio” shall mean the Two Year FHA Direct Endorsement Lender Compare Ratio, excluding streamline FHA refinancings, as made publicly available by HUD.

 

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

 

“Defaulting Party” shall have the meaning set forth in Section 30 of the Agreement.

 

“Defective Mortgage Loan” shall mean a Mortgage Loan (a) which is in foreclosure, has been foreclosed upon or has been converted to real estate owned property, (b) for which the Mortgagor is in bankruptcy, (c) that is not subject to a valid and binding Takeout Commitment or hedging arrangement on (x) the related Purchase Date or (y) any other date and such Mortgage Loan is rejected by the related Approved Investor or there shall occur a Takeout Failure and Seller has not provided Buyer with written or electronic evidence that such Mortgage Loan is eligible for sale with another Takeout Investor within two (2) Business Days, or (d) that is not repurchased by Seller in compliance with the provisions of Section 3(e).

 

“Delinquent Mortgage Loan” shall mean any Mortgage Loan as to which any Monthly Payment, or part thereof, remains unpaid for 30 days or more following the original Due Date for such Monthly Payment.

 

“Delivery” shall mean (i) with respect to any Agency Security issued by Ginnie Mae, when Buyer is registered as the registered owner of such Agency Security on Ginnie Mae’s central registry and (ii) with respect to any Agency Security issued by Fannie Mae or Freddie Mac, the later to occur of (a) the issuance of such Agency Security and (b) the transfer of all of the right, title and ownership interest in such Agency Security to Buyer or Securities Intermediary.  An Agency Security shall be deemed to be “Delivered” upon Delivery in accordance herewith.

 

“Depository” shall have the meaning set forth in Section 9(d) of the Agreement.

 

“Dollars” and “$” shall mean lawful money of the United States of America.

 

7

 

“DTI” shall mean with respect to any Mortgagor, the ratio of the Mortgagor’s average monthly debt obligations to the Mortgagor’s average monthly gross income.

 

“Due Date” shall mean the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.

 

“E-Sign” shall mean the federal Electronic Signatures in Global and National Commerce Act, as amended from time to time.

 

“Effective Date” shall mean the date upon which the conditions precedent set forth in Section 3(a) shall have been satisfied.

 

“Electronic Record” shall mean “Record” and “Electronic Record,” both as defined in E-Sign, and shall include but not be limited to, recorded telephone conversations, fax copies or electronic transmissions, including without limitation, those involving the Warehouse Electronic System.

 

“Electronic Signature” shall have the meaning set forth in E-Sign.

 

“Electronic Tracking Agreement” shall mean an Electronic Tracking Agreement among Buyer, Seller, MERS and MERSCORP Holdings, Inc., as the same may be amended from time to time.

 

“Electronic Transactions” shall mean transactions conducted using Electronic Records and/or Electronic Signatures or fax copies of signatures.

 

“Eligible Mortgage Loan” shall mean a Purchased Asset that is a Purchased Mortgage Loan which (a) is an Approved Mortgage Product, (b) complies with the representations and warranties set forth on Schedule 1 hereto (assuming that they are made as of each date of determination), (c) is not a Defective Mortgage Loan and (d) is not a Delinquent Mortgage Loan.

 

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

 

“ERISA Affiliate” shall, with respect to any Person, mean any Person which is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as a single employer described in Section 414 of the Code.

 

“Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

 

“Event of Default” shall have the meaning specified in Section 13 of the Agreement.

 

8

 

“Excess Proceeds” shall have the meaning set forth in Section 3(e) of the Agreement.

 

“Excluded Taxes” shall have the meaning set forth in Section 7(e) of the Agreement.

 

“Expenses” shall mean all present and future third party expenses incurred by or on behalf of Buyer in connection with this Agreement or any of the other Program Documents and any amendment, supplement or other modification or waiver related hereto or thereto, whether incurred heretofore or hereafter, which expenses shall include the cost of title, lien, judgment and other record searches; reasonable attorneys’ fees; and costs of preparing and recording any UCC financing statements or other filings necessary to perfect the security interest created hereby.

 

“Facility Termination Threshold” shall have the meaning specified in the Pricing Letter.

 

“Fannie Mae” shall mean the Federal National Mortgage Association, or any successor thereto.

 

“FATCA” shall have the meaning set forth in Section 7(a) of the Agreement.

 

“FDIA” shall have the meaning set forth in Section 32(d) of the Agreement.

 

“FDICIA” shall have the meaning set forth in Section 32(e) of the Agreement.

 

“FHA” shall mean the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.

 

“FHA Loan” shall mean a Mortgage Loan which is the subject of an FHA Mortgage Insurance Certificate.

 

“FHA Mortgage Insurance Certificate” shall mean the certificate evidencing the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.

 

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

 

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

 

“Fidelity Insurance” shall mean insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Buyer.

 

9

 

“Financial Condition Covenants” shall mean the financial covenants of Seller as set forth in Section 3 of the Pricing Letter.

 

“Financial Statements” shall have the meaning set forth in Section 12(d) of the Agreement.

 

“Freddie Mac” shall mean Federal Home Loan Mortgage Corporation, or any successor thereto.

 

“GAAP” shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors.

 

“Ginnie Mae” shall mean the Government National Mortgage Association, or any successor thereto.

 

“GLB Act” shall have the meaning set forth in Section 12(u) of the Agreement.

 

“Governmental Authority” shall mean any nation or government, any state, county, municipality or other political subdivision thereof or any governmental body, agency, authority, department or commission (including, without limitation, any taxing authority) or any instrumentality or officer of any of the foregoing (including, without limitation, any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or indirectly owned by or controlled by the foregoing and with respect to any insured depository institution, including without limitation the Appropriate Federal Banking Agency.

 

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

 

“HARP Mortgage Loan” shall mean a Mortgage Loan, which (a) is secured by a first lien, (b) conforms to the requirements of an Agency for securitization or cash purchase but does not otherwise meet all of the requirements of a Conforming Mortgage Loan as set forth in the Program Documents and (c) is a refinance Mortgage Loan originated in accordance with and pursuant to HARP 2.0.

 

“HARP 2.0” shall mean the Home Affordable Refinance Program 2.0.

 

10

 

“Hedge Agreement” shall mean, with respect to any or all of the Purchased Assets, any short sale of a US Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement or Takeout Commitment, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller with a party and with terms, both acceptable to Buyer.

 

“High Balance Mortgage Loan” shall mean a Mortgage Loan, which is secured by a first lien, and such Mortgage Loan (a) conforms to the requirements of an Agency for securitization or cash purchase; (b) has an original Mortgage Loan principal balance in excess of general conventional loan amounts for Conforming Mortgage Loans; (c) has an original Mortgage Loan principal balance that is less than or equal to the maximum high balance county limit for the county in which the related Mortgaged Property is located and (d) has a minimum FICO score of [***].

 

“High Cost Mortgage Loan” shall mean a Mortgage Loan (a) classified as a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; (b) classified as a “high cost,” “high risk,” “high rate,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees) or (c) having a percentage listed under the Indicative Loss Severity Column (the column that appears in the S&P Anti-Predatory Lending Law Update Table, included in the then-current S&P’s LEVELS® Glossary of Terms on Appendix E).  For the avoidance of doubt, a “higher-priced mortgage loan” as defined under Section 226.35 of Regulation Z shall not be considered a High Cost Mortgage Loan.

 

“HUD” shall mean the Department of Housing and Urban Development.

 

“Income” shall mean, with respect to any Mortgage Loan at any time, any principal thereof then payable and all interest, dividends or other distributions payable thereon.

 

“Indebtedness” shall mean (i) all indebtedness for borrowed money or for the deferred purchase price of property or services and all obligations under leases which are or should be under GAAP, recorded as capital leases, in respect of which a person is directly or contingently liable as borrower, guarantor, endorser or otherwise, or in respect of which a person otherwise assures a creditor against loss, (ii) all obligations for borrowed money or for the deferred purchase price of a property or services secured by (or for which the holder has an existing right, contingent or otherwise, to be secured by) any lien upon property (including without limitation accounts receivable and contract rights) owned by a person, whether or not such person has assumed or become liable for the payment thereof, and (iii) all other liabilities and obligations which would be classified in accordance with GAAP as liabilities on a balance sheet or to which reference should be made in footnotes thereto.

 

“Indemnified Party” shall have the meaning set forth in Section 15(a) of the Agreement.

 

11

 

“Insolvency Event” shall mean, for any Person:

 

(a)           that such Person shall discontinue or abandon operation of its business; or

 

(b)           that such Person shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or

 

(c)           a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar Requirement of Law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or for the winding-up or liquidation of its affairs; or

 

(d)           the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar Requirement of Law now or hereafter in effect, or such Person’s consent to the entry of an order for relief in an involuntary case under any such Requirement of Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit of creditors; or

 

(e)           that such Person shall become insolvent; or

 

(f)            if such Person is a corporation, such Person, or any of their Subsidiaries, shall take any corporate action in furtherance of, or the action of which would result in any of the actions set forth in the preceding clauses (a), (b), (c), (d) or (e).

 

“Insured Depository Institution” shall have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the United States Code, as amended from time to time.

 

“Intangible Assets” shall mean, as of the date of determination thereof, assets that in accordance with GAAP are properly classifiable as intangible assets, including, but not limited to goodwill, franchises, licenses, patents, trademarks, trade names and copyrights.

 

“Intercreditor Agreement” shall mean that certain Intercreditor Agreement, dated as of August 29, 2014, among Buyer, Seller and the third party lenders listed therein as the same may be amended from time to time.

 

“Joint Securities Agreement” shall mean that certain Joint Securities Account Control Agreement, dated as of June 19, 2014, among Buyer, Seller, the Securities Intermediary and the third party lenders listed therein as the same may be amended from time to time.

 

“Jumbo Mortgage Loan” shall mean a Mortgage Loan which is secured by a first lien Mortgage that (a) has an original Mortgage Loan principal balance in excess of general Conforming Mortgage Loan limits but not in excess of [***] or such other higher amount agreed to by Buyer in its sole discretion, (b) has an original Mortgage Loan principal balance in

 

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excess of the maximum high balance county limit for the county that the subject property is located in but not in excess of [***] or such other higher amount agreed to by Buyer in its sole discretion, (c) meets the eligibility requirements of Buyer in Schedule 1 hereto, and (d) has a Takeout Commitment from an Approved Investor.

 

“Legal Proceeding” shall have the meaning specified in Section 31 of the Agreement.

 

“Lien” shall mean any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance.

 

“Litigation Threshold” shall have the meaning specified in the Pricing Letter.

 

“LTV” shall mean (a) with respect to any Mortgage Loan other than a HARP Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan to the Appraised Value of the Mortgaged Property at origination and (b) with respect to any Mortgage Loan that is a HARP Mortgage Loan, the ratio of the original outstanding principal amount of the HARP Mortgage Loan to the Appraised Value of the Mortgaged Property as of the date such Mortgage Loan is funded as a refinanced Mortgage Loan under HARP 2.0.

 

“Maintenance Fee Rate” shall have the meaning specified in the Pricing Letter.

 

“Manufactured Home Mortgage Loans” shall have the meaning specified on Schedule 1.

 

“Margin Call” shall have the meaning specified in Section 4(b) of the Agreement.

 

“Margin Deficit” shall have the meaning specified in Section 4(b) of the Agreement.

 

“Market Value” shall mean, as of any date with respect to any Purchased Asset, the price at which such Purchased Asset could readily be sold as determined by Buyer in its sole good faith discretion which price may be determined to be zero.  Seller acknowledges that Buyer’s determination of Market Value is for the limited purpose of determining the value of the Purchased Assets for the purposes hereunder without the ability to perform customary Buyer’s due diligence and is not necessarily equivalent to a determination of the fair market value of the Purchased Assets achieved by obtaining competing bids in an orderly market in which the originator/servicer is not in default hereunder and the bidders have adequate opportunity to perform customary loan and servicing due diligence.  Buyer’s good faith determination of Market Value shall be conclusive upon the parties absent manifest error.

 

“Master Trust Receipt” shall have the meaning set forth in the Custodial Agreement.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations, financial condition or prospects of Seller, (b) the ability of Seller to perform its obligations under any of the Program Documents to which it is a party, (c) the validity or enforceability of any of the Program Documents, (d) the rights and remedies of Buyer or any

 

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Affiliate under any of the Program Documents, (e) the timely payment of any amounts payable under the Program Documents or (f) the Asset Value of the Purchased Assets taken as a whole.

 

“Maximum Aggregate Purchase Price” shall have the meaning set forth in the Pricing Letter.

 

“Maximum Available Purchase Price” shall have the meaning set forth in the Pricing Letter.

 

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

 

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

 

“Minimum Balance Requirement” shall have the meaning set forth in the Pricing

 

“Monthly Financial Statement Date” shall have the meaning set forth in the Pricing Letter.

 

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

 

“Mortgage” shall mean each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a first lien on real property and other property and rights incidental thereto, unless such Mortgage is granted in connection with a Co-op Loan, in which case the first lien position is in the Co-op Shares and in the Proprietary Lease relating to such Co-op Shares.

 

“Mortgage File” shall mean, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in the Custodial Agreement.

 

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

 

“Mortgage Loan” shall mean any first lien, one-to-four-family residential mortgage loan evidenced by a Mortgage Note and secured by a Mortgage, which Mortgage Loan is subject to a Transaction hereunder, which in no event shall include any mortgage loan which (a) is subject to Section 226.32 of Regulation Z or any similar state law (relating to high interest rate credit/lending transactions), (b) includes any single premium credit, life or accident and health insurance or disability insurance, or (c) is a High Cost Mortgage Loan.

 

“Mortgage Loan Schedule” shall mean with respect to any Transaction as of any date, a mortgage loan schedule in the form of a computer tape or other electronic medium generated by Seller and delivered to Buyer via the Warehouse Electronic System and to Custodian as specified in the Custodial Agreement, which provides information relating to the Purchased Assets in a format required by Buyer.

 

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

 

“Mortgage Product” shall have the meaning set forth in the Pricing Letter.

 

“Mortgaged Property” shall mean the real property or other Co-op Loan collateral securing repayment of the debt evidenced by a Mortgage Note.

 

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

 

“Net Income” shall mean, for any Person for any period, the net income of such Person for such period as determined in accordance with GAAP.

 

“Netting Agreement” shall mean that certain Master Netting and Setoff Agreement dated as of the date hereof, among Buyer, UBS Real Estate Securities Inc. and Seller, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Non-Excluded Taxes” shall have the meaning set forth in Section 7(a) of the Agreement.

 

“Non-Exempt Buyer” shall have the meaning set forth in Section 7(e) of the Agreement.

 

“Nondefaulting Party” shall have the meaning set forth in Section 30 of the Agreement.

 

“Non-Use Fee” shall have the meaning set forth in the Pricing Letter.

 

“Obligations” shall mean (a) any amounts owed by Seller to Buyer in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and all other fees or expenses which are payable hereunder or under any of the Program Documents; and (b) all other obligations or amounts owed by Seller to Buyer or an Affiliate of Buyer under any other contract or agreement, in each case, whether such amounts or obligations owed are direct or indirect, absolute or contingent, matured or unmatured.

 

“Omnibus Account” shall mean the account established pursuant to Section 9(d) of the Agreement.

 

“Operating Account” shall mean the account established pursuant to Section 9(d) of the Agreement.

 

“Operating Account Rate” shall have the meaning specified in the Pricing Letter.

 

“Other Conforming Mortgage Loan” shall mean a Mortgage Loan, which is secured by a first lien, such Mortgage Loan either (a) conforms to the requirements of an Agency for securitization or cash purchase or (b) is eligible to be insured by FHA, guaranteed by VA or

 

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guaranteed by RD (excluding any Mortgage Loan which exceeds Agency guidelines for maximum general conventional loan amount) but does not otherwise meet all of the requirements of a Conforming Mortgage Loan as set forth herein.

 

“Other Taxes” shall have the meaning set forth in Section 7(b) of the Agreement.

 

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

 

“Permitted Encumbrances” shall have the meaning set forth in Schedule 1(m).

 

“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof).

 

“Plan” shall have the meaning set forth in Section 11(s) of the Agreement.

 

“PMI Policy” shall mean a policy of primary mortgage guaranty insurance issued by a Qualified Insurer, as required by this Agreement with respect to certain Mortgage Loans.

 

“Post-Default Rate” shall have the meaning set forth in the Pricing Letter.

 

“Power of Attorney” shall have the meaning set forth in Section 8(d) of the Agreement.

 

“Price Differential” shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction).

 

“Pricing Letter” shall mean that certain letter agreement among Buyer and Seller, dated as of the date hereof, as the same may be amended from time to time.

 

“Pricing Rate” shall have the meaning set forth in the Pricing Letter.

 

“Program Documents” shall mean this Agreement, the Pricing Letter, the Custodial Agreement, the Electronic Tracking Agreement, the Netting Agreement, the Application, the Intercreditor Agreement, the Joint Securities Agreement, a Servicer Notice, if any, and the Power of Attorney.

 

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

 

“Proprietary Lease” shall mean the lease on a Co-op Unit evidencing the possessory interest of the owner in the Co-op Shares in such Co-op Unit.

 

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“Purchase Advice” shall mean a list of Purchased Assets that are requested to be repurchased in connection with a sale to an Approved Investor which shall set forth the loan identification numbers and related Takeout Price on a loan-by-loan and aggregate basis in an electronic format agreed to by Buyer.

 

“Purchase Advice Deficiency” shall have the meaning set forth in Section 3(e) of the Agreement.

 

“Purchase Date” shall mean the date on which Purchased Assets are transferred by Seller to Buyer or its designee.

 

“Purchase Price” shall have the meaning set forth in the Pricing Letter.

 

“Purchased Agency Security” shall mean each Agency Security that is subject to a Transaction and which has not been repurchased by Seller hereunder.

 

“Purchased Assets” shall mean the Purchased Mortgage Loans and the Purchased Agency Securities.

 

“Purchased Mortgage Loan” shall mean each Mortgage Loan sold by Seller to Buyer in a Transaction, as reflected in the Confirmation, and which has not been repurchased by Seller hereunder.

 

“QM Rule” shall mean 12 CFR 1026.43(e), including all applicable official staff commentary.

 

“Qualified Insurer” shall mean a mortgage guaranty insurance company duly authorized and licensed where required by law to transact mortgage guaranty insurance business and acceptable under the Approved Underwriting Guidelines.

 

“Qualified Mortgage” shall mean a Mortgage Loan that satisfies the criteria for a “qualified mortgage” as set forth in the QM Rule.

 

“RD” shall mean the United States Department of Agriculture Rural Development and any successor thereto.

 

“Recognition Agreement” shall mean, an agreement among a Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.

 

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

 

“Register” shall have the meaning set forth in Section 19(b) of the Agreement.

 

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“Regulations T, U and X” shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

 

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections.21,.22,.24,.26,.27 or.28 of PBGC Reg. § 4043.

 

“Reporting Period” shall have the meaning provided in Section 11(s) of the Agreement.

 

“Repurchase Assets” shall have the meaning provided in Section 8(a) of the Agreement.

 

“Repurchase Date” shall mean the date on which Seller is to repurchase the Purchased Assets subject to a Transaction from Buyer which shall be the earliest of (i) the Termination Date or (ii) any date determined by application of the provisions of Sections 3(e) or 14.

 

“Repurchase Price” shall mean the price at which Purchased Assets are to be transferred from Buyer or its designee to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of (a) the Purchase Price; (b) any unpaid Price Differential plus (c) any Warehouse Fees or other fees due as of the date of such determination.

 

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

 

“RESI Facility” shall have the meaning set forth in the Pricing Letter.

 

“RESI Operating Account” shall mean the “Operating Account” as defined in the RESI Facility.

 

“Responsible Officer” shall mean an officer of Seller listed on Schedule 2 hereto, as such Schedule 2 may be amended from time to time.

 

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

 

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

 

“Sanctions” shall have the meaning set forth in Section 11(y) of the Agreement.

 

“Scheduled Indebtedness” shall have the meaning set forth in Section 11(n) of the Agreement.

 

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“SEC” shall have the meaning set forth in Section 33 of the Agreement.

 

“Section 4402” shall have the meaning set forth in Section 30 of the Agreement.

 

“Securities Intermediary” shall mean Deutsche Bank National Trust Company.

 

“Seller” shall mean AmeriHome Mortgage Company, LLC, or any successor in interest thereto.

 

“Servicer” shall mean LoanCare, a division of FNF Servicing, Inc., n/k/a LoanCare, LLC, Cenlar FSB, or any third party acceptable to Buyer in its sole discretion and any successors in interest and assigns as approved by Buyer.

 

“Servicer Notice” shall mean to the extent applicable, the notice acknowledged by the third party Servicer substantially in the form of Exhibit C hereto.

 

“Servicing Agreement” shall have the meaning set forth in Section 16(b) of the Agreement.

 

“Servicing Rights” shall mean the rights of any Person to administer, service or subservice, the Purchased Assets or to possess related Records.

 

“Servicing Term” shall have the meaning set forth in Section 16(a) of the Agreement.

 

“Settlement Agent” shall mean (i) a title insurance company or its agent which has not been disapproved by Buyer in its sole good faith discretion for which Buyer is in receipt of a Closing Protection Letter or (ii) a closing agent, other than a title insurance company or its agent, which has not been disapproved by Buyer in its sole good faith discretion.

 

“SIPA” shall have the meaning set forth in Section 33 of the Agreement.

 

“Stock Certificate” shall mean, with respect to a Co-op Loan, the certificates evidencing ownership of the Co-op Shares issued by the Co-op Corporation.

 

“Stock Power” shall mean, with respect to a Co-op Loan, an assignment of the Stock Certificate or an assignment of the Co-op Shares issued by the Co-op Corporation.

 

“Subordinated Debt” shall mean, as of the date of determination thereof, all indebtedness which has been subordinated in writing to the obligations owing to Buyer on terms and conditions acceptable to Buyer.

 

“Subservicer” shall have the meaning set forth in Section 16(b) of the Agreement.

 

“Successor Servicer” shall have the meaning set forth in Section 16(g) of the Agreement.

 

“Subsidiary” shall mean, 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

 

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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 or by such Person and one or more Subsidiaries of such Person.

 

“Takeout Commitment” shall mean (a) with respect to Purchased Assets other than Jumbo Mortgage Loans and Purchased Agency Securities, either (i) a commitment of Seller to sell one or more such Purchased Assets to an Approved Investor (including an Agency) and the corresponding Approved Investor’s (including an Agency’s) commitment back to Seller to effectuate the foregoing, which commitment may be in the form of a “to be allocated” (TBA) commitment for which the related Purchased Assets are allocated or (ii) a commitment of an Agency to swap one or more Purchased Mortgage Loans for an Agency Security, which commitment may be in the form of a “to be allocated” (TBA) commitment for which the related Purchased Mortgage Loans are allocated; (b) with respect to Purchased Assets that are Jumbo Mortgage Loans, (i) a commitment of Seller to sell one or more such Purchased Assets to an Approved Investor and the corresponding Approved Investor’s commitment back to Seller to effectuate the foregoing, which commitment (1) shall include evidence of an underwriting approval, with no conditions outstanding to close the Mortgage Loan and a Takeout Price, purchase price commitment number and purchase price commitment expiration date for the Mortgage Loan or (2) is in form and substance acceptable to Buyer in its sole discretion, or (ii) evidence that the Seller is granted delegated authority by the Approved Investor, which in each instance meets the requirements set forth in the definition of “Jumbo Mortgage Loan”; and (c) with respect to Purchased Agency Securities, a commitment of Seller to sell one or more Purchased Agency Securities to an Approved Investor and the corresponding Approved Investor’s commitment back to Seller to effectuate the foregoing; and in each case, the expiration date of such commitment has not occurred.

 

“Takeout Failure” shall mean, with respect to any Takeout Commitment (i) for the purchase of a Purchased Asset, the failure of the Approved Investor to purchase such Purchased Asset pursuant to such Takeout Commitment and (ii) for the swap of a Purchased Mortgage Loan for an Agency Security backed by such Purchased Mortgage Loan, an Agency Security Issuance Failure.

 

“Takeout Price” shall mean the price at which the Approved Investor has agreed to purchase a Purchased Asset from Seller.

 

“Tax Compliance Certificate” shall have the meaning set forth in Section 7(e)(ii) hereof.

 

“Taxes” shall have the meaning set forth in Section 7(a) of the Agreement.

 

“Temporary Increase” shall have the meaning set forth in Section 3(f) of the Agreement.

 

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“Temporary Increase Request” shall mean a request by Seller for a Temporary Increase in the form of Exhibit G hereto.

 

“Temporary Maximum Aggregate Purchase Price” shall have the meaning set forth in Section 3(f) of the Agreement.

 

“Termination Date” shall have the meaning set forth in the Pricing Letter.

 

“Third Party Participants” shall have the meaning set forth in Section 12(x) of the Agreement.

 

“Third Party Transaction Parties” shall have the meaning set forth in Section 17 of the Agreement.

 

“Trade Assignment” shall mean an assignment to Buyer of a forward trade between an Approved Investor and Seller with respect to one or more Purchased Agency Securities substantially in the form of Exhibit D hereto.

 

“Transaction” shall have the meaning specified in Section 1.

 

“Transaction Request” shall mean a request from Seller to Buyer to enter into a Transaction, which shall be submitted electronically through the Warehouse Electronic System.

 

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Repurchase Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of the Agreement relating to such perfection or effect of perfection or non-perfection.

 

“U.S. Treasury Regulations” shall mean regulations promulgated by the U.S. Department of the Treasury under the Code.

 

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

 

“Warehouse Accounts” shall have the meaning set forth in Section 9(c) of the Agreement.

 

“Warehouse Electronic System” shall mean the system utilized by Buyer either directly, or through its vendors, and which may be accessed by Seller in connection with delivering and obtaining information and requests in connection with the Program Documents.

 

“Warehouse Facility” shall have the meaning set forth in the Pricing Letter.

 

“Warehouse Fees” shall have the meaning set forth in the Pricing Letter.

 

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“Wet Delivery Deadline” shall have the meaning set forth in the Pricing Letter.

 

“Wet Loan” shall mean a Mortgage Loan which Seller is selling to Buyer simultaneously with the origination thereof and for which the Mortgage File has not been delivered to Custodian.

 

“Wiring Instructions” shall mean the wiring instructions of Buyer and Seller as provided to the other party in writing, as applicable.

 

SECTION 3.                                                 INITIATION; TERMINATION

 

(a)           Conditions Precedent to Initial Transaction.  Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from Seller any fees and expenses payable hereunder, and all of the following documents, each of which shall be satisfactory to Buyer and its counsel in form and substance:

 

(i)            The following Program Documents, duly executed and delivered to Buyer:

 

(A)          Agreement.  This Agreement, duly executed by the parties thereto.

 

(B)          Pricing Letter.  The Pricing Letter, duly executed by the parties thereto in form and substance acceptable to Buyer.

 

(C)          Reserved.

 

(D)          Custodial Agreement.  The Custodial Agreement, duly executed by the parties thereto.

 

(E)           Electronic Tracking Agreement.  For all Mortgage Loans which are registered on the MERS® System, an Electronic Tracking Agreement entered into, duly executed and delivered by the parties thereto, in full force and effect, free of any modification, breach or waiver.

 

(F)           Reserved.

 

(G)          Application.  A duly completed Application, executed and delivered by Seller to Buyer.

 

(H)          Other Program Documents.  Any other Program Documents, duly executed by the parties thereto.

 

(ii)           Organizational Documents.  Certified copies of the organizational documents of Seller.

 

(iii)          Good Standing Certificate.  A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date ten

 

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(10) Business Days prior to the Purchase Date with respect to the initial Transaction hereunder.

 

(iv)          Officer’s Certificate.  An officer’s certificate of Seller in form and substance as set forth in Exhibit B attached hereto.

 

(v)           Opinion of Counsel.  An opinion of Seller’s counsel in form and substance acceptable to Buyer in its good faith discretion.

 

(vi)          Reserved.

 

(vii)         Reserved.

 

(viii)        Security Interest.  Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect Buyer’s interest in the Purchased Assets and other Repurchase Assets have been taken, including, without limitation, UCC searches and duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.

 

(ix)          Insurance.  Evidence that Seller has added endorsements for theft of warehouse lender money and collateral, naming Buyer as a loss payee under its Fidelity Insurance and as a direct loss payee/right of action under its errors and omissions insurance policy.

 

(x)           Warehouse Fees.  Payment of any Warehouse Fees and other costs and expenses due and payable to Buyer hereunder.

 

(xi)          Other Documents.  Such other documents as Buyer may reasonably request, in form and substance reasonably acceptable to Buyer.

 

(b)           Conditions Precedent to all Transactions.  Upon satisfaction of the conditions set forth in this Section 3(b), Buyer may enter into a Transaction with Seller.  Buyer’s entering into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof:

 

(i)            Due Diligence Review.  Without limiting the generality of Section 17 of the Agreement, Buyer shall have completed, to its satisfaction, its preliminary due diligence review of the related Mortgage Loans and Seller.

 

(ii)           No Default.  No Default or Event of Default shall have occurred and be continuing under the Program Documents.

 

(iii)          Representations and Warranties.  Both immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in Section 11 of the Agreement, shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

 

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(iv)                              Maximum Available Purchase Price.  After giving effect to the requested Transaction, the aggregate outstanding Purchase Price for all Purchased Assets subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Available Purchase Price.

 

(v)                                 No Margin Deficit.  After giving effect to the requested Transaction, the Asset Value of all Purchased Assets exceeds the aggregate Purchase Price for such Transactions.

 

(vi)                              Transaction Request.  Seller shall have delivered to Buyer a Mortgage Loan Schedule with respect to all Mortgage Loans subject to the requested Transaction pursuant to the timeframes set forth in Section 3(c) hereof.

 

(vii)                           Delivery of Mortgage File.  Seller shall have delivered to Custodian the Mortgage File with respect to each Mortgage Loan (other than a Wet Loan) subject to the requested Transaction in accordance with the timeframes set forth in the Custodial Agreement.

 

(viii)                        Delivery of Master Trust Receipt.  Custodian shall have delivered to Buyer, in accordance with the timeframes set forth in the Custodial Agreement, a Master Trust Receipt (accompanied by a Custodial Loan Transmission) with respect to each Mortgage Loan subject to the requested Transaction.

 

(ix)                              Reserved.

 

(x)                                 Fees and Expenses.  Buyer shall have received all fees and expenses as contemplated by Sections 9 and 15(b) which amounts, at Buyer’s option, may be withheld from the proceeds remitted by Buyer to Seller pursuant to any Transaction hereunder; and

 

(xi)                              No Violation of Law.  If any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of incorporation and bylaws or other organizational or governing documents) or any change in the interpretation or application of any Requirement of Law thereof or compliance by Buyer 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 shall result in Buyer’s entering into any Transaction to be a violation of such Requirement of Law.

 

(xii)                           Reserved.

 

(xiii)                        No Material Adverse Change.  None of the following shall have occurred and/or be continuing:

 

(A)                               an event or events shall have occurred in the good faith determination of Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Mortgage Loans through the “repo market” or “lending

 

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market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or

 

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

 

(C)                               there shall have occurred a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement; provided that Buyer shall not invoke this subclause (C) with respect to Seller unless Buyer shall invoke any similar clause contained in other agreements between Buyer and other Persons that are substantially similar to Seller and with respect to substantially the same types of assets as the Mortgage Loans that would be the subject of Transactions hereunder.

 

(xiv)                       Maintenance of DE Compare Ratio.  At all times when the total amount of Mortgage Loans underwritten and used by the Seller to determine its DE Compare Ratio exceeds [***], Seller’s DE Compare Ratio as of the most recent calendar quarter has not exceeded [***].

 

Each Transaction Request delivered by Seller hereunder shall constitute a certification by Seller that all the conditions set forth in this Section 3(b) (other than clause (xiii) hereof) have been satisfied (both as of the date of such notice or request and as of Purchase Date).

 

(c)                                  Initiation.

 

(i)                                     Seller may request a Transaction hereunder on any Business Day by delivering to Buyer a Mortgage Loan Schedule through the Warehouse Electronic System with respect to all Mortgage Loans subject to the requested Transaction on or prior to (A) with respect to Wet Loans, 4:00 p.m. (New York City time) on the requested Purchase Date and (B) with respect to Mortgage Loans other than Wet Loans, 2:00 p.m. (New York City time) on the requested Purchase Date.

 

(ii)                                  Seller shall deliver to Custodian the Mortgage File with respect to each Mortgage Loan subject to the requested Transaction (A) which is not a Wet Loan, in accordance with the timeframes set forth in the Custodial Agreement, and (B) with respect to each Wet Loan, on or prior to the Wet Delivery Deadline.

 

(iii)                               Following receipt of such request, Buyer may, in its sole discretion, agree to enter into such requested Transaction, in which case Buyer shall remit the Purchase Price pursuant to the Seller’s Wiring Instructions.

 

(iv)                              Buyer’s remittance of the Purchase Price in connection with the Transaction and Seller’s acceptance thereof, will constitute the parties agreement to enter into such Transaction.  Upon remittance of the Purchase Price to Seller, Seller hereby grants, assigns,

 

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conveys and transfers all rights in and to the Purchased Assets evidenced on the related Mortgage Loan Schedule submitted through the Warehouse Electronic System.

 

(v)                                 Buyer shall confirm the terms of each Transaction by posting a Confirmation on the Warehouse Electronic System by the end of the day on each Purchase Date.  Each Confirmation together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby unless objected to in writing by Seller no more than two (2) Business Days after the date such Confirmation was posted on the Warehouse Electronic System or unless a corrected Confirmation is posted by Buyer; provided that Buyer’s failure to post a Confirmation shall not affect the obligations of Seller under any Transaction.  An objection sent by Seller must state specifically that such writing which is an objection, must specify the provision(s) being objected to by Seller, must set forth such provision(s) in the manner that Seller believes they should be stated, and must be received by Buyer no more than two (2) Business Days after the Confirmation was posted on the Warehouse Electronic System.

 

(vi)                              The Repurchase Date for each Transaction shall not be later than the Termination Date.

 

(d)                                 Issuance of Agency Securities.  In the event the Seller elects to have Purchased Mortgage Loans be pooled for the purpose of backing an Agency Security it shall deliver all documents necessary to enable the applicable Agency to make Delivery of such Agency Security to (x) Securities Intermediary or its nominee as set forth in the Joint Securities Agreement or (y) Buyer subject to the following:

 

(i)                                     Buyer shall have received a fully executed Trade Assignment; and (ii)         at such time as an Agency Security backed by a pool of Purchased Mortgage Loans is delivered to Buyer by the applicable Agency, (A) such Agency Security shall immediately and with no further action on the part of Buyer, Seller or Custodian become subject to a Transaction hereunder and (B) the pool of Purchased Mortgage Loans backing such Agency Security shall immediately and with no further action on the part of Buyer, Seller or Custodian no longer be subject to a Transaction hereunder and Buyer shall have been deemed to release any ownership and/or security interest it has in such pool of Purchased Mortgage Loans.

 

(e)                                  Repurchase; Purchase by an Approved Investor.

 

(i)                                     Seller may repurchase Purchased Assets without penalty or premium on any date by remitting to Buyer the applicable Repurchase Price in accordance with the terms of the Joint Securities Agreement or pursuant to the Buyer’s Wiring Instructions, as applicable.

 

(ii)                                  Any repurchase of Purchased Assets may occur simultaneously with a sale of the Purchased Asset to an Approved Investor (x) in accordance with the terms of the Joint Securities Agreement or (y) subject to the following procedures:

 

(A)                               Seller shall instruct the Approved Investor to remit directly to Buyer pursuant to Buyer’s Wiring Instructions no later than 4:00 p.m. (New York City

 

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time) on any Business Day the Takeout Price in an amount equal to the Repurchase Price for such Purchased Asset.

 

(B)                               Simultaneously, Seller shall deliver to Buyer electronically the related Purchase Advice.  The Takeout Price received by Buyer must equal the amount set forth on the Purchase Advice.

 

(C)                               The Takeout Price shall be applied to reduce the Repurchase Price in respect of the Purchased Assets listed on the Purchase Advice.  In the event the Takeout Price is less than the Repurchase Price, the Buyer shall withdraw funds from the Operating Account and Warehouse Accounts such that no deficiency exists.  For the avoidance of doubt, Buyer shall not release its interests in any Purchased Asset until such time as it receives the Repurchase Price in full.

 

(D)                               In the event Buyer receives the Takeout Price on or prior to 4:00 p.m. (New York City time) and either (x) no Purchase Advice is received or (y) the Takeout Price does not match the amount on the Purchase Advice (a “Purchase Advice Deficiency”), then Buyer shall retain the Takeout Price and the related Purchased Assets shall not be released and the Transactions shall continue to accrue Price Differential under the Repurchase Agreement until the Purchase Advice Deficiency is remedied.  In the event the Takeout Price matches the amount set forth in the Purchase Advice but are in excess of the Repurchase Price (such amount, the “Excess Proceeds”) provided that no Default or Event of Default exists, Buyer shall remit such Excess Proceeds to the Operating Account.

 

(iii)                               On the Repurchase Date, termination of the Transaction will be effected by reassignment to Seller or its designee of the Purchased Assets against the simultaneous transfer of the Repurchase Price as described in this Section 3(e).  Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Asset.

 

(f)                                   Request for Temporary Increase.  Seller may request a temporary increase of the Maximum Aggregate Purchase Price (a “Temporary Increase”) by submitting to Buyer an executed Temporary Increase Request, setting forth the requested increased Maximum Aggregate Purchase Price (such increased amount, the “Temporary Maximum Aggregate Purchase Price”) and the effective date and expiration date of such Temporary Increase.  Buyer may from time to time, in its sole and absolute discretion, consent to such Temporary Increase, by returning to Seller a countersigned Temporary Increase Request.  At any time that a Temporary Increase is in effect, the Maximum Aggregate Purchase Price shall equal the Temporary Maximum Aggregate Purchase Price for all purposes of this Agreement and all calculations and provisions relating to the Maximum Aggregate Purchase Price shall refer to the Temporary Maximum Aggregate Purchase Price.  Upon the termination of a Temporary Increase, Seller shall repurchase Purchased Assets in order to reduce the aggregate outstanding Purchase Price of all Transactions to the Maximum Aggregate Purchase Price (as reduced by the termination of such Temporary Increase).

 

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SECTION 4.                                                 MARGIN AMOUNT MAINTENANCE

 

(a)                                 Buyer shall determine the Market Value of each Purchased Asset at such intervals as determined by Buyer in its sole good faith discretion.

 

 

(b)                                 If at any time the aggregate Asset Values of Purchased Assets then subject to Transactions are less than the aggregate Purchase Prices for such Purchased Assets (a “Margin Deficit”), then Buyer may by notice to Seller (as such notice is more particularly set forth below, a “Margin Call”), require Seller to transfer to Buyer or its designee cash in the amount of the Margin Deficit.

 

(c)                                  Notice delivered pursuant to Section 4(b) may be given by any written or electronic means.  Any notice given before 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on such Business Day; notice given after 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on the following Business Day.

 

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

 

(e)                                  Any cash transferred to Buyer pursuant to Section 4(b) above shall be held as unsegregated cash margin and collateral for all Obligations under this Agreement.

 

(f)                                   In the event Buyer makes a Margin Call and upon the request of Seller, Buyer shall deliver (by written or electronic means) to Seller its determination of the Market Value of the related Purchased Asset in form and substance acceptable to Buyer in its sole good faith discretion; provided, however, that such delivery shall in no way effect Seller’s obligations to meet the related Margin Call in accordance with the time frames set forth in Section 4(c) herein.

 

SECTION 5.                                                 PRICE DIFFERENTIAL; COLLECTIONS; INCOME PAYMENTS

 

(a)                                 On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential shall be settled in cash on each related Repurchase Date.

 

(b)                                 Upon the occurrence of an Event of Default and at the request of Buyer, Seller shall establish and maintain a segregated time or demand deposit account for the benefit of Buyer (the “Custodial Account”) with Buyer, UBS AG Stamford Branch or an Insured Depository Institution acceptable to Buyer in its sole discretion and shall or shall cause the Servicer to immediately deposit into the Custodial Account all Income received with respect to each Mortgage Loan sold hereunder and under no circumstances shall Seller deposit any of its own funds into the Custodial Account or otherwise commingle its own funds with funds belonging to Buyer as owner of any Mortgage Loans.  Seller shall name the Custodial Account “AmeriHome Mortgage Company, LLC, in trust for and for the benefit of UBS Bank USA”

 

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(c)                                  Upon the occurrence of an Event of Default, Seller authorizes Buyer to withdraw any Income otherwise due Buyer hereunder from any of the Warehouse Accounts and the Operating Account.

 

(d)                                 All Income received with respect to a Mortgage Loan purchased hereunder, whether or not deposited in the Custodial Account, shall be held in trust for the exclusive benefit of Buyer as the owner of such Mortgage Loan.

 

SECTION 6.                                                 REQUIREMENT OF LAW

 

(a)                                 If any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of incorporation and bylaws or other organizational or governing documents) including those regarding capital adequacy, or any change in the interpretation or application of any Requirement of Law thereof or compliance by Buyer 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)                                     shall subject Buyer to any Tax or increased Tax of any kind whatsoever or change the basis of taxation of payments to Buyer;

 

(ii)                                  shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of Buyer;

 

(iii)                               shall impose on Buyer any other condition; and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, or shall have the effect of reducing Buyer’s rate of return then, in any such case, Seller shall pay Buyer on the applicable Repurchase Date such additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such increased cost or reduced amount receivable on an after-tax basis.

 

(b)                                 If Buyer shall have determined that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer 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 shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer to be material, then from time to time, Seller shall promptly pay to Buyer such additional amount or amounts as will compensate Buyer for such reduction.

 

(c)                                  If Buyer becomes entitled to claim any additional amounts pursuant to this Section 6, it shall promptly notify Seller of the event by reason of which it has become so entitled.

 

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A certificate as to any additional amounts payable pursuant to this Section submitted by Buyer to Seller shall be conclusive in the absence of manifest error.

 

(d)                                 If Buyer becomes entitled to claim any additional amounts pursuant to this Section 6, Seller shall pay such additional amounts to Buyer and Buyer and Seller shall negotiate in good faith to mutually agree upon modified terms to this Agreement to account for such future additional amounts.  If Seller and Buyer cannot agree upon such modified terms within thirty (30) days of Buyer’s notice to Seller of such changed circumstances, then Seller (i) may terminate this Agreement; (ii) shall immediately remit the Repurchase Price and any other amounts due hereunder and (iii) shall no longer be liable for any Non-Use Fee from and after the date of such termination.

 

SECTION 7.                                                 TAXES.

 

(a)                                 Any and all payments by or on behalf of Seller under or in respect of this Agreement or any other Program Documents to which Seller is a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes, levies, imposts, duties, deductions, assessments, fees, charges or withholdings (including backup withholdings), and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority (collectively, “Taxes”), unless required by law.  If any Person shall be required under any applicable Requirement of Law to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Program Documents to Buyer (including, for purposes of Section 6 and this Section 7, any agent, assignee, successor or participant), (i) Seller shall make all such deductions and withholdings in respect of Taxes, (ii) Seller shall timely pay the full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance with any Requirement of Law, and (iii) the sum payable by Seller shall be increased as may be necessary so that after Seller has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable under this Section 7) such Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of Non-Excluded Taxes.  For purposes of this Agreement the term “Non-Excluded Taxes” are Taxes other than, in the case of a Buyer, (i) Taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the jurisdiction under the laws of which such Buyer is organized or of its applicable lending office, or any political subdivision thereof, unless such Taxes are imposed as a result of such Buyer having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Program Documents (in which case such Taxes will be treated as Non-Excluded Taxes), and (ii) Taxes imposed as a result of its failure to comply with the requirements of Sections 1471 through 1474 of the Code (as in effect on the date hereof) and any U.S. Treasury Regulations promulgated thereunder (“FATCA”).

 

(b)                                 In addition, Seller hereby agrees to timely pay or, at the Buyer’s option, timely reimburse it for payment of, any present or future stamp, court, recording, documentary, excise, filing, intangible, property or value-added taxes, or similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Program Document or from the execution, delivery, enforcement or registration of, any performance,

 

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receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Program Document (collectively, “Other Taxes”).

 

(c)                                  Seller hereby agrees to indemnify Buyer (including its Beneficial Tax Owners) for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 7 imposed on, paid, deducted or withheld by such Buyer (or any Beneficial Tax Owners thereof) and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto.  A certificate as to the amount of such Taxes or liabilities delivered to Seller by Buyer shall be conclusive absent manifest error.  The indemnity by Seller provided for in this Section 7(c) shall apply and be made whether or not the Non-Excluded Taxes, Other Taxes or any other liabilities for which indemnification hereunder is sought have been correctly or legally asserted.  Amounts payable by Seller under the indemnity set forth in this Section 7(c) shall be paid within ten (10) days from the date on which Buyer makes written demand therefor.

 

(d)                                 Within thirty (30) days after the date of any payment of Taxes, Seller (or any Person making such payment on behalf of Seller) shall furnish to Buyer for its own account a certified copy of the original official receipt evidencing payment thereof.

 

(e)                                  For purposes of this Section 7(e), the terms “United States” and “United States person” shall have the meanings specified in Section 7701 of the Code.  Each Buyer (including for avoidance of doubt any assignee, successor or participant) that either (i) is not organized under the laws of the United States, any State thereof, or the District of Columbia or (ii) whose name does not include “Incorporated,” “Inc.,” “Corporation,” “Corp.,” “P.C.,” “insurance company,” or “assurance company” (a “Non-Exempt Buyer”) shall deliver or cause to be delivered to Seller the following properly completed and duly executed documents:

 

(i)                                     in the case of a Non-Exempt Buyer that is not a United States person or is a disregarded entity for U.S. federal income tax purposes owned by a person that is not a United States person, a complete and executed (x) U.S. Internal Revenue Service Form W-8BEN with Part II completed in which such Buyer claims the benefits of a tax treaty with the United States providing for a zero or reduced rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor forms thereto); or

 

(ii)                                  in the case of a Non-Exempt Buyer that is an individual, (x) for non-United States persons, a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a certificate substantially in the form of Exhibit F (a “Tax Compliance Certificate”) or (y) for United States persons, a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto); or

 

(iii)                               in the case of a Non-Exempt Buyer that is organized under the laws of the United States, any State thereof, or the District of Columbia and that is not a disregarded entity for U.S. federal income tax purposes owned by a person that is not a United States person, a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto); or

 

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(iv)                              in the case of a Non-Exempt Buyer that (x) is not organized under the laws of the United States, any State thereof, or the District of Columbia and (y) is treated as a corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a Tax Compliance Certificate; or

 

(v)                                 in the case of a Non-Exempt Buyer that (A) is treated as a partnership or other non-corporate entity, and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia, (x)(i) a complete and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments) and (ii) a Tax Compliance Certificate, and (y) in the case of a non-withholding foreign partnership or trust, without duplication, with respect to each of its beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or entities that are treated as corporations for U.S. federal income tax purposes (all such owners, “Beneficial Tax  Owners”), the documents that would be provided by each such Beneficial Tax Owner if such Beneficial Tax Owner were Buyer; or

 

(vi)                              in the case of a Non-Exempt Buyer that is disregarded for U.S. federal income tax purposes, the document that would be required by clause (i), (ii), (iii), (iv), (v), (vii) and/or this clause (vi) of this Section 7(e) with respect to its Beneficial Tax Owner if such Beneficial Tax Owner were Buyer; or

 

(vii)                           in the case of a Non-Exempt Buyer that (A) is not a United States person and (B) is acting in the capacity of an “intermediary” (as defined in U.S. Treasury Regulations), (x)(i) a U.S. Internal Revenue Service Form W-8IMY (or any successor form thereto) (including all required documents and attachments) and (ii) a Tax Compliance Certificate, and (y) if the intermediary is a “non-qualified intermediary” (as defined in U.S. Treasury Regulations), from each person upon whose behalf the “non-qualified intermediary” is acting the documents that would be required by clause (i), (ii), (iii), (iv), (v), (vi), and/or this clause (vii) with respect to each such person if each such person were Buyer; and

 

(viii)                        if a payment made to a Buyer under this Agreement or any other Program Documents would be subject to U.S. federal withholding Tax imposed by FATCA if 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), 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 as may be necessary for Seller to comply with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (viii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

If a Buyer provides a form pursuant to Section 7(e)(i)(x) and the form provided by the Buyer at the time such Buyer first becomes a party to this Agreement or, with respect to a grant

 

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of a participation, the effective date thereof, indicates a United States interest withholding tax rate under the tax treaty in excess of zero, withholding tax at such rate shall be treated as Taxes other than “Non-Excluded Taxes” (“Excluded Taxes”) and shall not qualify as Non-Excluded Taxes unless and until such Buyer provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered Excluded Taxes solely for the periods governed by such form.  If, however, on the date a Person becomes an assignee, successor or participant to this Agreement, the Buyer transferor was entitled to indemnification or additional amounts under this Section 7, then the Buyer assignee, successor or participant shall be entitled to indemnification or additional amounts to the extent that the Buyer transferor was entitled to such indemnification or additional amounts for Non-Excluded Taxes, and the Buyer assignee, successor or participant shall be entitled to additional indemnification or additional amounts for any other or additional Non-Excluded Taxes.

 

(f)                                   For any period with respect to which a Buyer has failed to provide Seller with the appropriate form, certificate or other document described in Section 7(e) (other than if such failure is due to a change in any Requirement of Law, or in the interpretation or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided), such Buyer shall not be entitled to indemnification or additional amounts under subsection (a) or (c) of this Section 7 with respect to Non-Excluded Taxes imposed by the United States by reason of such failure; provided, however, that should a Buyer become subject to Non-Excluded Taxes because of its failure to deliver a form, certificate or other document required hereunder, Seller shall take such steps as such Buyer shall reasonably request, to assist such Buyer in recovering such Non-Excluded Taxes.

 

(g)                                  Without prejudice to the survival of any other agreement of Seller hereunder, the agreements and obligations of Seller contained in this Section 7 shall survive the termination of this Agreement and the other Program Documents.  Nothing contained in Section 6 or this Section 7 shall require Buyer to complete, execute or make available any of its Tax returns or any other information that it deems to be confidential or proprietary, or whose completion, execution or submission would, in Buyer’s judgment, materially prejudice Buyer’s legal or commercial position.

 

SECTION 8.                                                 SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT

 

(a)                                 Security Interest.  On each Purchase Date, Seller hereby sells, assigns and conveys all rights and interests in the Purchased Assets identified on the related Mortgage Loan Schedule and the Repurchase Assets related thereto.  Although the parties intend that all Transactions hereunder be sales and purchases and not loans (other than as set forth in Section 21 for U.S. tax purposes), in the event any such Transactions are deemed to be loans, and in any event Seller hereby pledges to Buyer as security for the performance by Seller of its Obligations and hereby grants, assigns and pledges to Buyer a perfected first priority security interest in the Purchased Assets; the Records related to the Purchased Assets; the Program Documents (to the extent such Program Documents and Seller’s right thereunder relate to the Purchased Assets); any Property relating to any Purchased Asset or the related Mortgaged Property; any Takeout Commitments relating to any Purchased Assets; any Closing Protection Letter, escrow letter or settlement agreement relating to any Purchased Asset; any Servicing Rights relating to any

 

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Purchased Asset; all insurance policies and insurance proceeds relating to any Purchased Asset or the related Mortgaged Property, including but not limited to any payments or proceeds under any related primary insurance or hazard insurance; any Income relating to any Purchased Asset; the Custodial Account; the Warehouse Accounts; the Operating Account; the benefits allocable from any Hedge Agreements relating to any Purchased Asset; and any other contract rights, accounts (including any interest of Seller in escrow accounts) and any other payments, rights to payment (including payments of interest or finance charges) and general intangibles to the extent that the foregoing relates to any Purchased Asset; any other assets relating to the Purchased Assets (including, without limitation, any other accounts) or any interest in the Purchased Assets; and accounts, chattel paper (including electronic chattel paper), goods (including inventory and equipment and any accessions thereto), instruments (including promissory notes), documents, investment property, general intangibles (including payment intangibles and software) in each case related to the Purchased Assets; together with all accessions and additions thereto, substitutions and replacements therefor, and all products and proceeds of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created and wherever located (collectively, the “Repurchase Assets”).

 

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

 

(c)                                  Financing Statements.  Seller hereby authorizes Buyer to file such financing statement or statements relating to the Repurchase Assets and the Servicing Rights as Buyer, at its option, may deem appropriate.  Seller shall pay the searching and filing costs for any financing statement or statements prepared or searched pursuant to this Agreement.

 

(d)                                 Buyer’s Appointment as Attorney in Fact.  Seller agrees to execute a Power of Attorney, the form of Exhibit E hereto (the “Power of Attorney”), to be delivered on the date hereof.

 

SECTION 9.                                                 PAYMENT, TRANSFER; ACCOUNTS

 

(a)                                 Payments and Transfers of Funds.  Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set off or counterclaim, to Buyer pursuant to the Wiring Instructions or pursuant to the Joint Securities Agreement (as applicable), on the date on which such payment shall become due.

 

(b)                                 Remittance of Purchase Price.  On the Purchase Date for each Transaction, ownership of the Purchased Assets shall be transferred to Buyer or its designee against the simultaneous transfer of the Purchase Price pursuant to Seller’s Wiring Instructions.  With respect

 

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to the Purchased Assets being sold by Seller on a Purchase Date, Seller hereby sells, transfers, conveys and assigns to Buyer or its designee without recourse, but subject to the terms of this Agreement, all the right, title and interest of Seller in and to the Purchased Assets together with all right, title and interest in and to the proceeds of any related Repurchase Assets.

 

(c)                                  Warehouse Accounts.  Buyer or the Buyer’s designee shall maintain for Seller an inbound account and a margin account (the “Warehouse Accounts”).  The Warehouse Accounts shall be in the form of non-interest bearing book-entry accounts.  Buyer shall have exclusive withdrawal rights from the Warehouse Accounts.  All amounts on deposit in the Warehouse Accounts shall be held as cash margin and collateral for all Obligations under this Agreement.  Without limiting the generality of the foregoing, in the event that a Margin Call or other Default exists, Buyer shall be entitled to use any or all of the amounts on deposit in any Warehouse Account to cure such circumstance or otherwise exercise remedies available to Buyer without prior notice to, or consent from, Seller.  Notwithstanding the foregoing, Seller acknowledges that (i) amounts in the Warehouse Accounts are not insured by the Federal Deposit Insurance Corporation, any governmental entity or otherwise and (ii) Buyer is not required to segregate funds in the Warehouse Accounts from its own funds or from funds held for others.

 

(d)                                 Operating Account.  From time to time, Seller may provide funds to Buyer for deposit to an interest bearing account (the “Operating Account”) in accordance with this Section 9.  The Operating Account shall be a subaccount of an interest-bearing savings account (the “Omnibus Account”) maintained by Buyer as agent for the benefit of Seller and other sellers of mortgage related assets with a bank determined by Buyer its sole discretion (the “Depository”).  The Buyer shall have non-exclusive withdrawal rights from the Operating Account.  Seller acknowledges that Buyer acts as Seller’s agent for the limited purpose of placing funds with the Depository, and that funds held by Buyer as Seller’s agent are not a deposit account or other liability of Buyer.  Buyer shall maintain records of Seller’s interest in the funds maintained in the Omnibus Account.  Withdrawals will be paid by wire transfer.  In addition, Seller hereby authorizes Buyer, in its sole discretion, to withdraw funds from the Operating Account and remit such funds to the RESI Operating Account for any purpose permitted under and pursuant to the terms and conditions of the RESI Facility; provided that (i) there are sufficient funds in the Operating Account and a negative balance would not result therefrom; (ii) no Default or Event or Default shall have occurred or result therefrom and (ii) after such withdrawal and unless otherwise approved by Buyer, amounts in the Operating Account are not less than the Minimum Balance Requirement.

 

(e)                                  Depository.  Unless otherwise designated in writing by Buyer, the Depository shall be UBS AG, Stamford Branch.  Funds on deposit at the UBS AG, Stamford Branch are not insured by the Federal Deposit Insurance Corporation, Securities Investor Protection Corporation or any governmental agency of the United States, Switzerland or any other jurisdiction.  The Omnibus Account and Operating Account are obligations of the UBS AG, Stamford Branch only, and are not obligations of UBS AG generally or of any of its other affiliates.  The payment of principal and interest on the Operating Account at the UBS AG, Stamford Branch is subject to the creditworthiness of UBS AG.  The Operating Account is not a deposit account or other liability of Buyer.  In the unlikely event of the failure of the UBS AG, Stamford Branch, UBS AG shall be responsible for paying the principal and interest on the Operating Account.  If

 

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UBS AG is unable to do so, the Seller acknowledges that it will be a general unsecured creditor of UBS AG.

 

(f)                                   Buydown Amount.  The Buydown Amount shall be held as unsegregated cash margin and collateral for all Obligations under this Agreement.  Without limiting the generality of the foregoing, in the event that a Margin Call or other Default exists, the Buyer shall be entitled to use any or all of the Buydown Amount and to withdraw such amount from the Operating Account in Buyer’s sole discretion to cure such circumstance or otherwise exercise remedies available to the Buyer without prior notice to, or consent from, Seller.  Regardless of whether a Margin Call or other Default exists, Buyer also may withdraw interest paid to the Operating Account in its discretion from time to time, as a full or partial off-set to Seller’s obligation hereunder to pay the Price Differential, Repurchase Price or other amounts due hereunder when due.  If the Buyer withdraws any such interest paid to the Operating Account after the occurrence and during the continuance of an Event of Default, Buyer shall promptly give Seller written notice following any such withdrawal.  If the Buyer withdraws any such interest paid to the Operating Account at any time when no Event of Default has occurred and is continuing, Buyer shall give Seller advance written notice of any such withdrawal.  Within two (2) Business Days’ receipt of written request from Seller, and provided no Margin Call or other Default exists, Buyer shall withdraw any portion of such Buydown Amount from the Operating Account and remit such amount back to Seller; provided that in the event any request to withdraw funds would result in amounts in the Operating Account to be less than the Minimum Balance Requirement, Seller shall provide Buyer with [***] days prior written notice of such request.

 

(g)                                  Operating Account Interest.  Subject to Section 9(h), the Buydown Amount will accrue interest at the Operating Account Rate; provided that in no event shall interest accrue on (i) the Buydown Amount if (x) on any day the Buydown Amount is less than the Minimum Balance Requirement or (y) the average balance of funds in the Operating Account during any calendar month is less than the Minimum Balance Requirement and (ii) that portion of the Buydown Amount that is in excess of the lesser of (a) the aggregate outstanding Purchase Price of all Transactions during any calendar month or (b) [***].  Unless otherwise set forth in the Pricing Letter:

 

(i)                                     The Depository calculates interest accrual daily on the basis of funds credited to the Operating Account, but credits interest monthly.  As a result, interest will not begin to compound until credited in the month following its accrual.  The Depository credits interest to the Operating Account in the month following its accrual on a schedule set by Depository from time to time, which may result in a delay in interest crediting as late as the twentieth (20th) day of the calendar month.

 

(ii)                                  The Depository accrues interest on funds deposited to the Operating Account beginning on the day on which such funds are received in the Operating Account, and through, but not including, the day on which funds are withdrawn from the Operating Account.

 

(iii)                               Interest paid on funds in the Operating Account at the Operating Account Rate shall be credited to the Operating Account unless otherwise withdrawn by Buyer at the direction of Seller as provided herein.

 

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(h)                                 Maintenance of Balances.  If Seller shall fail to maintain with Buyer during any calendar month deposits in the Operating Account in the average, after charges to compensate Buyer for services rendered to Seller, equal to at least the Minimum Balance Requirement, Seller shall pay to Buyer a fee equal to the amount of such deficit multiplied by the Maintenance Fee Rate.

 

(i)                                     Fees.  Seller shall pay in immediately available funds to Buyer all fees, including without limitation, the Warehouse Fees, as and when required hereunder.  All such payments shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at such account designated by Buyer.  Without limiting the generality of the foregoing or any other provision of this Agreement, Buyer may withdraw and retain from the Warehouse Accounts and Operating Account any Warehouse Fees due and owing to Buyer.

 

SECTION 10.                                          RESERVED

 

SECTION 11.                                          REPRESENTATIONS

 

Seller represents and warrants to Buyer that as of the Purchase Date for any Purchased Assets, as of the date of this Agreement and any Transaction hereunder and at all times while the Program Documents are in full force and effect and/or any Transaction hereunder is outstanding:

 

(a)                                 Acting as Principal.  Seller will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal).

 

(b)                                 No Broker.  Seller has not dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement.

 

(c)                                  Financial Statements.  Seller has heretofore furnished to Buyer a copy, certified by its chief executive officer, controller or other financial officer approved by Buyer, of its (a) Financial Statements for Seller for the fiscal year ended the Annual Financial Statement Date, setting forth in each case in comparative form the figures for the previous year, with an unqualified opinion thereon of an Approved CPA and (b) Financial Statements for Seller for such monthly period(s), of Seller up until Monthly Financial Statement Date, setting forth in each case in comparative form the figures for the previous month and year-to-date.  All such Financial Statements are complete and correct and fairly present, in all material respects, the consolidated and consolidating financial condition of Seller and the consolidated and consolidating results of its operations as at such dates and for such monthly periods, all in accordance with GAAP.  Since the Annual Financial Statement Date, there has been no material adverse change in the consolidated business, operations or financial condition of Seller taken as a whole from that set forth in said Financial Statements nor is Seller aware of any state of facts which (without notice or the lapse of time) would or could result in any such material adverse change or could have a Material Adverse Effect.  Seller does not have, on the Annual Financial Statement Date, any liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or

 

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liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of Seller except as heretofore disclosed to Buyer in writing.

 

(d)                                 Organization, Etc. Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  Seller (a) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; (b) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect; and (c) has full power and authority to execute, deliver and perform its obligations under the Program Documents.

 

(e)                                  Authorization, Compliance, Approvals.  The execution and delivery of, and the performance by Seller of its obligations under, the Program Documents to which it is a party (a) are within Seller’s powers, (b) have been duly authorized by all requisite action by Seller’s board of managers, (c) do not violate any provision of applicable law, rule or regulation, or any order, writ, injunction or decree of any court or other Governmental Authority, or its organizational documents, (d) do not violate any indenture, agreement, document or instrument to which Seller or any of its Subsidiaries is a party, or by which any of them or any of their properties, any of the Repurchase Assets is bound or to which any of them is subject and (e) are not in conflict with, do not result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or except as may be provided by any Program Document, result in the creation or imposition of any Lien upon any of the property or assets of Seller or any of its Subsidiaries pursuant to, any such indenture, agreement, document or instrument.  Seller is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the consummation of the Transactions contemplated herein and the execution, delivery or performance of the Program Documents to which it is a party.

 

(f)                                   Litigation.  There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or, to the knowledge of Seller, threatened) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries or affecting any of the Repurchase Assets or any of the other properties of Seller before any Governmental Authority which (i) questions or challenges the validity or enforceability of the Program Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) except as disclosed to Buyer, makes a claim or claims in an aggregate amount greater than the Litigation Threshold, (iii) individually or in the aggregate, if adversely determined, would be reasonably likely to have a Material Adverse Effect or (iv) relates to any violation of the Home Ownership and Equity Protection Act or any state, city or district high cost home mortgage or predatory lending law.

 

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(g)                                  Purchased Assets.

 

(i)                                     Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased Asset to any other Person, and immediately prior to the sale of such Purchased Asset to Buyer, Seller was the sole owner of such Purchased Asset and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released simultaneously with the sale to Buyer hereunder.

 

(ii)                                  The provisions of this Agreement are effective to either constitute a sale of Repurchase Assets to Buyer or to create in favor of Buyer a valid first priority security interest in all right, title and interest of Seller in, to and under the Repurchase Assets.

 

(h)                                 Proper Names; Chief Executive Office/Jurisdiction of Organization.  Seller does not operate in any jurisdiction under a trade name, division name or name other than those names previously disclosed in writing by Seller to Buyer.  Seller’s jurisdiction of organization, type of organization and organizational identification number is as set forth in the Pricing Letter.

 

(i)                                     Location of Books and Records.  The location where Seller keeps its books and records, including all computer tapes, computer systems and storage media and records related to the Repurchase Assets is office located at [***].

 

(j)                                    Enforceability.  This Agreement and all of the other Program Documents executed and delivered by Seller in connection herewith are legal, valid and binding obligations of Seller and are enforceable against Seller in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Requirement of Law affecting creditors’ rights generally and (ii) general principles of equity.

 

(k)                                 Ability to Perform.  Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the Program Documents to which it is a party on its part to be performed.

 

(l)                                     No Default.  No Default or Event of Default has occurred and is continuing.

 

(m)                             No Adverse Selection.  Seller has not selected the Purchased Assets in a manner so as to adversely affect Buyer’s interests.

 

(n)                                 Scheduled Indebtedness.  All material Indebtedness (other than usual and customary accounts payable for a mortgage company) which is presently in effect and/or outstanding as of the Effective Date is listed on Schedule 3 hereto (the “Scheduled Indebtedness”) and no defaults or events of default exist thereunder.

 

(o)                                 Accurate and Complete Disclosure.  The information, reports, Financial Statements, exhibits and schedules furnished in writing by or on behalf of Seller to Buyer in connection with the negotiation, preparation or delivery of this Agreement or performance hereof and the other Program Documents 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

 

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state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading.  There is no fact known to Seller, after due inquiry, that could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Program Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer for use in connection with the transactions contemplated hereby or thereby.

 

(p)                                 Margin Regulations.  The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.

 

(q)                                 Investment Company.  Neither Seller nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(r)                                    Solvency.  As of the date hereof and immediately after giving effect to each Transaction, the fair value of the assets of Seller 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 Seller in accordance with GAAP) of Seller and Seller is solvent and, after giving effect to the transactions contemplated by this Agreement and the other Program Documents, will not be rendered insolvent or left with an unreasonably small amount of capital with which to conduct its business and perform its obligations.  Seller does not intend to incur, nor does it believe that it has incurred, debts beyond its ability to pay such debts as they mature.  Seller is not contemplating the commencement of an insolvency, bankruptcy, liquidation, or consolidation proceeding or the appointment of a receiver, liquidator, conservator, trustee, or similar official in respect of itself or any of its property.

 

(s)                                   ERISA.  From the fifth fiscal year preceding the current year through the termination of this Agreement (the “Reporting Period”), with respect to any plan within the meaning of Section 3(3) of ERISA that is sponsored or maintained by Seller or any ERISA Affiliate, or to which Seller or any ERISA Affiliate contributes or has contributed (each, a “Plan”), the benefits under which Plan are guaranteed, in whole or in part, by the PBGC (i) Seller and each ERISA Affiliate has funded and will continue to fund each Plan as required by the provisions of Section 412 of the Code; (ii) Seller and each ERISA Affiliate has caused and will continue to cause (directly or indirectly) each Plan to pay all benefits when due; (iii) neither Seller nor any ERISA Affiliate has been or is obligated to contribute to any multiemployer plan as defined in Section 3(37) of ERISA; (iv) Seller (on behalf of ERISA Affiliate, if applicable) will provide to Buyer (A) no later than the date of submission to the PBGC, a copy of any notice of a Plan’s termination (B) no later than the date of submission to the Department of Labor or to the Internal Revenue Service, as the case may be, a copy of any request for waiver from the funding standards or extension of the amortization periods required by Section 412 of the Code and (C) notice of any Reportable Event as such term is defined in ERISA (and has, prior to the date of this Agreement, provided to Buyer a copy of any document described in clauses (iv)(A), (B) or (C) relating to any date in the Reporting Period prior to the date of this Agreement); and (v) Seller and each ERISA Affiliate will subscribe from the date of this Agreement to the termination of this Agreement to

 

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any contingent liability insurance provided by the PBGC to protect against employer liability upon termination of a guaranteed pension plan, if available to Seller or ERISA Affiliate, as applicable.

 

(t)                                    Taxes.

 

(i)                                     Seller and its Subsidiaries have timely filed all income, franchise and other material Tax returns that are required to be filed by them and have timely paid all Taxes due and payable by them or imposed with respect to any of their property and all other material fees and other charges imposed on them or any of their property by any Governmental Authority, except for any such Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.

 

(ii)                                  There are no Liens for Taxes with respect to any assets of Seller or its Subsidiaries, and to the knowledge of Seller, no claim is being asserted with respect to Taxes of Seller or its Subsidiaries, except for statutory Liens for Taxes not yet due and payable or for Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and, in each case, with respect to which adequate reserves have been provided in accordance with GAAP.

 

(iii)                               Seller is currently treated as a limited liability company for U.S. federal income tax purposes.

 

(u)                                 No Reliance.  Seller has made its own independent decisions to enter into the Program Documents and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary.  Seller is not relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

 

(v)                                 Plan Assets.  Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased Assets are not “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, in Seller’s hands and transactions by or with Seller are not subject to any foreign state or local statute regulating investments of, or fiduciary obligations with respect to, governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.

 

(w)                               Agency Approvals.  To the extent previously approved, Seller is approved by Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, and, to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act.  In each such case, Seller is in good standing, with no event having occurred or Seller having any reason whatsoever to believe or suspect will occur, including, without limitation, a change in insurance coverage which would either make Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency.  Seller has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of

 

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mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices.

 

(x)                                 Anti-Money Laundering Laws.  Seller has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”); 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.

 

(y)                                 No Sanctions.  Neither Seller nor any of its Affiliates, officers, directors, partners or members, (i) is an entity or person (or to the Seller’s knowledge, owned or controlled by an entity or person) that (A) is currently subject to any economic sanctions or trade embargoes administered or imposed by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or any other relevant authority (collectively, “Sanctions”) or (B) resides, is organized or chartered, or has a place of business in a country or territory that is currently the subject of Sanctions and (ii) will directly or indirectly use the proceeds of any Transactions contemplated hereunder, or lend, contribute or otherwise make available such proceeds to or for the benefit of any person or entity, for the purpose of financing or supporting, directly or indirectly, the activities of any person or entity that is currently the subject of Sanctions.

 

SECTION 12.                                          COVENANTS

 

Seller covenants to Buyer that as of the Purchase Date for any Purchased Asset, as of the date of this Agreement and any Transaction hereunder and at all times while the Program Documents are in full force and effect and/or any thereunder is outstanding, as follows:

 

(a)                                 Preservation of Existence; Compliance with Law.  Seller shall (i) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business; (ii) comply with any material applicable Requirement of Law, rules, regulations and orders, whether now in effect or hereafter enacted or promulgated by any applicable Governmental Authority (including, without limitation, all environmental laws); (iii) maintain all material licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Program Documents, and shall conduct its business materially in accordance with any applicable Requirement of Law; and (iv) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied.

 

(b)                                 Taxes.

 

(i)                                     Seller and its Subsidiaries shall timely file all income, franchise and other material Tax returns that are required to be filed by them and shall timely pay all Taxes due and payable by them or imposed with respect to any of their property and all other

 

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material fees and other charges imposed on them or any of their property by any Governmental Authority, except for any such Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.

 

(ii)                                  Seller will be treated as a limited liability company for U.S. federal income tax purposes.

 

(c)                                  Notice of Proceedings or Adverse Change.  Seller shall give notice to Buyer immediately after a Responsible Officer of Seller has any knowledge of:

 

(i)                                     the occurrence of any Default or Event of Default;

 

(ii)                                  any (a) default or event of default under any Indebtedness of Seller in excess of [***] or (b) litigation, investigation, regulatory action or proceeding that is pending or, to the knowledge of Seller, threatened by or against Seller in any federal or state court or before any Governmental Authority which, if not cured or if adversely determined, would reasonably be expected to have a Material Adverse Effect or constitute a Default or Event of Default, and (c) any Material Adverse Effect with respect to Seller;

 

(iii)                               any litigation or proceeding that is pending or, to the best of Seller’s knowledge, threatened (a) against Seller in which the amount involved exceeds the Litigation Threshold and is not covered by insurance, in which injunctive or similar relief is sought, or which, would reasonably be expected to have a Material Adverse Effect, (b) in connection with any of the Repurchase Assets, which, if adversely determined, would reasonably be expected to have a Material Adverse Effect and (c) that questions or challenges compliance of any Mortgage Loan with the Ability to Repay Rule or QM Rule;

 

(iv)                              as soon as reasonably possible, notice of any of the following events:  (A) a material and adverse change in the insurance coverage of Seller, with a copy of evidence of same attached; (B) any material change in accounting policies or financial reporting practices of Seller; (C) promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Program Document) on, or claim asserted against, any of the Repurchase Assets; (D) the termination or nonrenewal of any debt facilities of Seller which have a maximum principal amount (or equivalent) available of more than the Facility Termination Threshold; (E) any Change in Control; and (F) any other event, circumstance or condition that has resulted, or is reasonably likely to result, in a Material Adverse Effect; and

 

(v)                                 Promptly, but no later than two (2) Business Days after Seller receives notice of the same, (A) any Purchased Mortgage Loan submitted for inclusion into an Agency Security and rejected by that Agency for inclusion in such Agency Security or (B) any Purchased Mortgage Loan submitted to an Approved Investor (whole loan or securitization) and rejected for purchase by such Approved Investor or (C) the termination or suspension of approval of Seller to sell any Mortgage Loans to any Approved Investor.

 

(d)                                 Financial Reporting.  Seller shall maintain a system of accounting established and administered in accordance with GAAP consistently applied, and furnish to Buyer,

 

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with a certification by the chief executive officer, controller or other financial officer (approved by Buyer) of Seller (the following hereinafter referred to as the “Financial Statements”):

 

(i)                                     Within ninety (90) days after the close of each fiscal year, audited consolidated and consolidating balance sheets and the related consolidated and consolidating statements of income and retained earnings and of cash flows as at the end of such year for Seller for the fiscal year, setting forth in each case in comparative form the figures for the previous year, with an unqualified opinion thereon of an Approved CPA;

 

(ii)                                  Within forty-five (45) days after the end of each fiscal quarter, the consolidated and consolidating balance sheets and the related consolidated and consolidating statements of income and retained earnings and of cash flows for Seller for such quarterly period(s), of Seller, setting forth in each case in comparative form the figures for the previous year;

 

(iii)                               Within thirty (30) days after the end of each month, the consolidated and consolidating balance sheets and the related consolidated and consolidating statements of income and retained earnings and of cash flows for Seller for such monthly period(s), of Seller;

 

(iv)                              Simultaneously with the furnishing of each of the Financial Statements to be delivered pursuant to subsection (i)-(iii) above, a certificate in the form of Exhibit A to the Pricing Letter and certified by the chief executive officer, controller or other financial officer (approved by Buyer) of Seller, which includes detailed reporting to the materials set forth therein including without limitation (x) the valuation of Seller’s Capitalized Mortgage Servicing Rights by any third-party evaluator and (y) any request for repurchase of or indemnification for a Mortgage Loan purchased by a third party investor; and

 

(v)                                 As promptly as practicable, from time to time, such other information regarding the business affairs, operations and financial condition of Seller as Buyer may reasonably request or as set forth in the certificate delivered pursuant to Section 12(d)(iv) above.

 

(e)                                  Further Assurances.  Seller shall execute and deliver to Buyer all further documents, financing statements, agreements and instruments, and take all further actions that may be required under any applicable Requirement of Law, or that Buyer may reasonably request, in order to effectuate the transactions contemplated by this Agreement and the Program Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first-priority of the security interests created or intended to be created hereby.

 

(f)                                   True and Correct Information.  All information, reports, exhibits, schedules, Financial Statements or certificates of Seller or any of its officers furnished to Buyer in connection with the Program Documents, the transactions contemplated thereby and during Buyer’s diligence of Seller will be true, complete and accurate in every material respect and will not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading or (in the case of projections) shall be based on reasonable estimates, on the date as of which such information is stated or certified.  All required Financial

 

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Statements, information and reports delivered by Seller to Buyer pursuant to this Agreement shall be prepared in accordance with GAAP.

 

(g)                                  ERISA Events.  Seller shall not and shall not permit any ERISA Affiliate to be in violation of any provision of Section 11(s) of this Agreement and Seller shall not be in violation of Section 11(v) of this Agreement.

 

(h)                                 Financial Condition Covenants.  Seller shall comply with the Financial Condition Covenants set forth in the Pricing Letter.

 

(i)                                     Hedging.  Seller shall hedge all Purchased Assets in accordance with Seller’s hedging policies.  Seller shall deliver to Buyer, not later than 1:00 p.m. (New York City time) on each Monday, or if Monday is not a Business Day, on the next succeeding Business Day, a hedging report reflecting hedges as of the prior Friday, in a form reasonably satisfactory to Buyer.  Seller shall (i) review the hedging policies periodically to confirm that they are being complied with in all material respects and are adequate to meet Seller’s business objectives and (ii) in the event Seller makes any written amendment or written modification to the hedging policies, within 10 days of such amendment or modification deliver to Buyer a complete copy of the amended or modified hedging policies.  Additionally, Buyer may in its reasonable discretion request a current copy of Seller’s hedging policies at any time.

 

(j)                                    Servicer Approval.  Seller shall not cause the Mortgage Loans to be serviced by any servicer other than a servicer expressly approved in writing by Buyer, which approval shall be deemed granted by Buyer with respect to Seller and LoanCare, a division of FNF Servicing, Inc., with the execution of this Agreement.

 

(k)                                 Insurance.  Seller shall maintain Fidelity Insurance and errors and omissions insurance in respect of its officers, employees and agents in such amounts acceptable to the Agencies.  Seller shall notify Buyer of any material change in the terms of any such insurance.  Seller shall maintain endorsements for theft of warehouse lender money and collateral, naming Buyer as a loss payee under its Fidelity Insurance and as a direct loss payee/right of action under its errors and omissions insurance policy.

 

(l)                                     Books and Records.  Seller shall, to the extent practicable, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep and maintain or obtain, as and when required, all documents, books, records and other information reasonably necessary or advisable for the collection of all Repurchase Assets.

 

(m)                             Illegal Activities.  Seller shall not engage in any conduct or activity that could subject its assets to forfeiture or seizure.

 

(n)                                 Material Change in Business.  Seller shall not engage to any substantial extent in any line or lines of business activity other than the businesses of mortgage banking and financial services related to mortgage products as of the date hereof.

 

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(o)                                 Limitation on Dividends and Distributions.  Upon the occurrence of a Default or an Event of Default, Seller shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Seller, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Seller, either directly or indirectly, whether in cash or property or in obligations of Seller or any of Seller’s consolidated Subsidiaries.

 

(p)                                 Scheduled Indebtedness.  Without the prior written consent of Buyer, which shall not be unreasonably withheld, Seller shall not incur any additional material Indebtedness (other than (i) the Scheduled Indebtedness listed under the definition thereof and (ii) usual and customary accounts payable for a mortgage company).

 

(q)                                 Disposition of Assets; Liens.  Seller shall not create, incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other encumbrance of any nature whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than the Liens created in connection with the transactions contemplated by this Agreement; nor shall Seller cause any of the Purchased Assets to be sold, pledged, assigned or transferred except as permitted hereunder.

 

(r)                                    Transactions with Affiliates.  Seller shall not enter into any transaction, including, without limitation, the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any Affiliate unless such transaction is (i) not otherwise prohibited in this Agreement, (ii) in the ordinary course of Seller’s business and (iii) upon reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.

 

(s)                                   Organization.  Seller shall not (i) cause or permit any change to be made in its name, organizational identification number, identity or corporate structure, each as described in Section 11(h) or (ii) change its jurisdiction of organization, unless it shall have provided Buyer thirty (30) days’ prior written notice of such change and shall have first taken all action required by Buyer for the purpose of perfecting or protecting the lien and security interest of Buyer established hereunder.

 

(t)                                    Mortgage Loan Reports.  Upon request by Buyer, Seller will furnish to Buyer electronic Mortgage Loan performance data, including, without limitation, a Mortgage Loan Schedule, delinquency reports, pool analytic reports and static pool reports (i.e., delinquency, foreclosure and net charge off reports) and stratification reports summarizing the characteristics of the Mortgage Loans.

 

(u)                                 Confidentiality.  Seller shall comply with all applicable local, state and federal laws, including, without limitation, all privacy and data protection law, rules and regulations (including without limitation the Gramm-Leach-Bliley Act (the “GLB Act”)) that are applicable to information related to the Purchased Assets and/or any applicable terms of this Agreement, including without limitation “nonpublic personal information”, as that term is defined in Section 509(4) of the GLB Act (collectively, the “Confidential Information”).  Seller shall implement such physical and other security measures as shall be necessary to (a) ensure the

 

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security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the GLB Act) of Buyer or any Affiliate of Buyer which Buyer holds (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information.  Seller shall, at a minimum establish and maintain such data security program as is necessary to meet the objectives of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth in the Code of Federal Regulations at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568 and 570.  Upon written request from Buyer, Seller will provide written confirmation of the continued accuracy of this representation and warranty, it being understood that disclosure of information pertaining to specific policies or processes may require a confidentiality undertaking from Buyer.  Seller shall notify Buyer promptly following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Buyer or any Affiliate of Buyer provided directly to Seller by Buyer or such Affiliate.  Seller shall provide such notice to Buyer pursuant to Section 24 of this Agreement.

 

(v)                                 Approved Underwriting Guidelines.  Seller shall not submit to Buyer for purchase, and Buyer shall have no obligation to purchase, any Mortgage Loan underwritten in accordance with underwriting guidelines, including amendments to Approved Underwriting Guidelines not expressly approved by Buyer, other than Approved Underwriting Guidelines.

 

(w)                               Agency Approvals; Servicing.  To the extent previously approved, Seller shall maintain its status with Fannie Mae and Ginnie Mae as an approved lender and Freddie Mac as an approved seller/servicer, in each case in good standing (each such approval, an “Agency Approval”).  Should Seller, for any reason, cease to possess all such applicable Agency Approvals to the extent necessary, should Seller experience any material and adverse change in its delegated underwriting authority from any Agency, or should notification of an adverse occurrence to the relevant Agency or HUD, FHA, VA or RD be required, Seller shall so notify Buyer immediately in writing.  Notwithstanding the preceding sentence and to the extent previously approved, Seller shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.

 

(x)                                 Sharing of Information.  Subject to the confidentiality provisions of this Agreement, including Section 31, Seller hereby allows and consents to Buyer, subject to applicable law, exchanging information related to Seller, its credit, its mortgage loan originations and the Transactions hereunder with third party lenders, facility providers and Approved Investors (collectively, “Third Party Participants”), and Seller shall permit each Third Party Participant to share such similar information with Buyer.  In furtherance of the foregoing, Seller shall use commercially reasonable efforts to provide Buyer access to each Third Party Participant’s electronic system to retrieve the information described herein.

 

(y)                                 Status.  Seller agrees that should Seller enter into a Warehouse Facility with any Person other than Buyer or an Affiliate of Buyer which by its terms provides such Person with the ability to receive the benefit of more favorable terms that are afforded to a different counterparty under a different Warehouse Facility with respect to any guaranties or financial covenants, including without limitation covenants covering the same or similar subject matter referred to in Section 12(h) hereof (such provision a “More Favorable Agreement  Provision”),

 

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Seller shall promptly (i) notify Buyer of such More Favorable Agreement Provision; (ii) notify Buyer of any more favorable terms contained in any Warehouse Facility and (iii) identify such more favorable terms with reasonable specificity, and, in any case, such More Favorable Agreement Provision and any more favorable terms shall without further action of Buyer or Seller, automatically become part of this Agreement and shall be incorporated herein.

 

(z)                                  Takeout Payments.  With respect to each Purchased Asset subject to a Takeout Commitment, the Seller shall arrange that all payments under the related Takeout Commitment shall be paid to Buyer (i) pursuant to the terms of the Joint Securities Agreement or (ii) to Buyer’s Wiring Instructions, as applicable.

 

(aa)                          Issuance of Agency Securities.  In the event Purchased Mortgage Loans are pooled for the purpose of backing an Agency Security to be delivered to Buyer, Seller (i) shall comply with Section 3(d) hereof and (ii) shall not revoke such instructions to the applicable Agency.

 

(bb)                          QM/ATR Reporting.  Seller shall deliver to Buyer, with reasonable promptness upon Buyer’s request, copies of all documentation in connection with the underwriting and origination of any Purchased Mortgage Loan that evidences compliance with the Ability to Repay Rule and the QM Rule.

 

(cc)                            Trade Assignment.  In the event Seller elects to cause Delivery of an Agency Security directly to Buyer (as opposed to pursuant to the terms of the Joint Securities Agreement), Seller shall comply with Section 3(d) hereof.

 

(dd)                          Use of Proceeds.  Unless otherwise agreed to by Buyer and other than in connection with Correspondent Mortgage Loans, Seller shall not use the proceeds of any Transaction hereunder to (i) pay any obligation of or amounts due to any Affiliate of Buyer, (ii) purchase any assets from or any assets financed by any Affiliate of Buyer; or (iii) purchase any securities issued by any Affiliate of Buyer.

 

SECTION 13.                                          EVENTS OF DEFAULT

 

If any of the following events (each an “Event of Default”) occur, Buyer shall have the rights set forth in Section 14, as applicable:

 

(a)                                 Payment Default.  Seller shall default in the payment of (i) any amount payable by it hereunder or under any other Program Document, (ii) Expenses (and such failure to pay Expenses shall continue for more than [***] calendar days following notice or knowledge of such failure by Seller) or (iii) any other Obligations, when the same shall become due and payable, whether at the due date thereof, or by acceleration or otherwise (and such failure to pay such Obligations shall continue for [***] calendar days following notice of knowledge of such failure by Seller); or

 

(b)                                 Representation and Warranty Breach.  Any representation, warranty or certification made or deemed made herein or in any other Program Document by Seller or any certificate furnished to Buyer pursuant to the provisions hereof or thereof or any information with respect to the Mortgage Loans furnished in writing by on behalf of Seller shall prove to have been

 

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untrue or misleading in any material respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Market Value of the Purchased Assets; unless (i) Seller shall have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made; or (ii) any such representations and warranties have been determined by Buyer in its sole good faith discretion to be materially false or misleading on a regular basis) and such failure to observe or perform shall continue unremedied for a period of five (5) Business Days following notice or knowledge of such breach; or

 

(c)                                  Immediate Covenant Default.  The failure of Seller to perform, comply with or observe any term, covenant or agreement applicable to Seller contained in any of Sections 12(a) (Preservation of Existence; Compliance with Law); (f) (True and Correct  Information) solely to the extent such information is intentionally or materially false and misleading; (g) (ERISA Events); (h) (Financial Condition Covenants); (m) (Illegal Activities.); (n) (Material Change in Business); (o) (Limitation on Dividends and Distributions); (q) (Disposition of Assets; Liens); (r) (Transactions with Affiliates); (s) (Organization); (w) (Agency Approvals; Servicing); (z) (Takeout Payments) or (cc) (Trade Assignments); or

 

(d)                                 Additional Covenant Defaults.  Seller shall fail to observe or perform any other covenant or agreement contained in this Agreement (and not identified in Section 13(c) including, without limitation, the failure to comply with Section 12(f)) or any other Program Document, and if such default shall be capable of being remedied, and such failure to observe or perform shall continue unremedied for a period of [***] Business Days following notice or knowledge of such failure; or

 

(e)                                  Judgments.  A judgment or judgments for the payment of money in excess of [***] in the aggregate shall be rendered against Seller by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] days from the date of entry thereof, and Seller shall not, within said period of [***] days, or such longer period during which execution of the same shall have been stayed or bonded, appeal therefrom and cause the execution thereof to be stayed during such appeal; or

 

(f)                                   Buyer Affiliate Cross-Default.  Any “event of default” or any other default which permits a demand for, or requires, the early repayment of obligations due by Seller or its Affiliates under any agreement with Buyer or its Affiliates relating to any Indebtedness of Seller or any Affiliate, as applicable, or any default under any obligation when due with Buyer or its Affiliates; or

 

(g)                                  Other Cross-Default.  Any “event of default” or any other default (as such terms are defined in the applicable agreements and beyond the expiration of any applicable grace period) which permits a demand for, or requires, the early repayment of obligations due by Seller or its Affiliates under any note, indenture, loan agreement, guaranty, swap agreement, Hedge Agreement or other Indebtedness of Seller or any Affiliate in excess of [***]; or

 

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(h)                                 Insolvency Event.  An Insolvency Event shall have occurred with respect to Seller; or

 

(i)                                     Enforceability.  For any reason, this Agreement at any time shall not be in full force and effect in all material respects or shall not be enforceable in all material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected and of first priority, or any Person (other than Buyer) shall contest the validity, enforceability, perfection or priority of any Lien granted pursuant thereto, or any party thereto (other than Buyer) shall seek to disaffirm, terminate, limit or reduce its obligations hereunder pursuant to a non-frivolous claim; or

 

(j)                                    Liens.  Seller shall grant, or suffer to exist, any Lien on any Repurchase Asset (except any Permitted Encumbrances and any Lien in favor of Buyer); or at least one of the following fails to be true (A) the Repurchase Assets shall have been sold to Buyer, or (B) the Liens contemplated hereby are first priority perfected Liens on any Repurchase Assets in favor of Buyer; or

 

(k)                                 Material Adverse Effect.  A Material Adverse Effect shall occur as determined by Buyer in its sole good faith discretion; or

 

(l)                                     Change in Control.  A Change in Control shall have occurred; or

 

(m)                             Going Concern.  Seller’s audited Financial Statements or notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Seller as a “going concern” or reference of similar import; or

 

(n)                                 Investigations.  There shall occur the initiation of any investigation, audit, examination or review of Seller by an Agency, any Governmental Authority, any trade association or consumer advocacy group relating to the origination, sale or servicing of mortgage loans by Seller or the business operations of Seller, with the exception of normally scheduled audits or examinations by Seller’s regulators, which investigation, audit, examination or review is reasonably likely to result in a Material Adverse Effect; or

 

(o)                                 Inability to Perform.  An officer of Seller shall admit its inability to, or its intention not to, perform any of Seller’s obligations hereunder; or

 

(p)                                 Governmental Action.  Seller shall become the subject of a cease and desist order of the Appropriate Federal Banking Agency or any other Governmental Authority or enter into a memorandum of understanding or consent agreement with the Appropriate Federal Banking Agency or other Governmental Authority, any of which, would have, or is purportedly the result of any condition which would be reasonably likely to have, a Material Adverse Effect.

 

SECTION 14.                                          REMEDIES

 

(a)                                 If an Event of Default occurs, the following rights and remedies are available to Buyer; provided, that an Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.

 

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(i)                                     At the option of Buyer, exercised by written or electronic notice to Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Insolvency Event of Seller), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur.

 

(ii)                                  If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of this Section,

 

(A)                               Seller’s obligations in such Transactions to repurchase all Purchased Assets, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subsection (a)(i) of this Section, (1) shall thereupon become immediately due and payable and (2) all Income paid after such exercise or deemed exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Price and any other amounts owed by Seller hereunder;

 

(B)                               to the extent permitted by any applicable Requirement of Law, the Repurchase Price with respect to each such Transaction shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Repurchase Date as determined pursuant to subsection (a)(i) of this Section (decreased as of any day by (i) any amounts applied by Buyer pursuant to clause

 

(C)                               of this subsection, and (ii) any proceeds from the sale of Purchased Assets applied to the Repurchase Price pursuant to subsection (a)(iv) of this Section; and

 

(D)                               all Income actually received by Buyer pursuant to Section 5 shall be applied to the aggregate unpaid Obligations owed by Seller.

 

(iii)                               Upon the occurrence of one or more Events of Default, Buyer shall have the right to obtain (A) a physical transfer of the servicing of the Purchased Assets in accordance with Section 16(c) and (B) physical possession of all files of Seller relating to the Purchased Assets and the Repurchase Assets and all documents relating to the Purchased Assets which are then or may thereafter come in to the possession of Seller or any third party acting for Seller (including any Servicer) and Seller shall deliver to Buyer such assignments as Buyer shall request.  Buyer shall be entitled to specific performance of all agreements of Seller contained in the Program Documents.

 

(iv)                              At any time on the Business Day following notice to Seller (which notice may be the notice given under subsection (a)(i) of this Section), in the event Seller has not repurchased all Purchased Assets, Buyer may (A) immediately sell, without demand or further notice of any kind, at a public or private sale, without any representations or warranties of Buyer and at such price or prices as Buyer may deem satisfactory any or all

 

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Purchased Assets and the Repurchase Assets subject to a such Transactions hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by Seller hereunder or (B) in its sole good faith discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller credit for such Purchased Assets and the Repurchase Assets in an amount equal to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder.  The proceeds of any disposition of Purchased Assets and the Repurchase Assets shall be applied as determined by Buyer in its sole good faith discretion.

 

(v)                                 Seller shall be liable to Buyer for (A) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Buyer in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel incurred in connection with or as a result of an Event of Default, (B) damages in an amount equal to the cost (including all fees, expenses and commissions) of Buyer entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (C) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.

 

(vi)                              Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any Program Document or any applicable Requirement of Law.

 

(b)                                 Buyer may exercise one or more of the remedies available hereunder immediately upon the occurrence of an Event of Default and at any time thereafter without notice to Seller.  All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have.

 

(c)                                  Seller recognizes that the market for the Purchased Assets may not be liquid and as a result it may not be possible for Buyer to sell all of the Purchased Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner.  In view of the nature of the Purchased Assets, Seller agrees that liquidation of any Purchased Asset may be conducted in a private sale.  Seller acknowledges and agrees that any such private sale may result in prices and other terms less favorable to Buyer than if such sale were a public sale, and notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner.  Seller further agrees that it would not be commercially unreasonable for Buyer to dispose of any Purchased Asset by using internet sites that provide for the auction or sale of assets similar to the Purchased Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets.

 

(d)                                 Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require Buyer to enforce its rights by judicial process.  Seller also waives any defense (other than a defense of payment or performance) Seller might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies.  Seller recognizes that nonjudicial remedies are consistent with the

 

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usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.

 

(e)                                  To the extent permitted by any applicable Requirement of Law, Seller shall be liable to Buyer for interest on any amounts owing by Seller hereunder, from the date Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Buyer’s rights hereunder.  Interest on any sum payable by Seller to Buyer under this Section 14(e) shall be at a rate equal to the Post-Default Rate.

 

(f)                                   Without limiting the rights of Buyer hereto to pursue all other legal and equitable rights available to Buyer for Seller’s failure to perform its obligations under this Agreement, Seller acknowledges and agree that the remedy at law for any failure to perform obligations hereunder would be inadequate and Buyer shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure.  The availability of these remedies shall not prohibit Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages.

 

SECTION 15.                                          INDEMNIFICATION AND EXPENSES; RECOURSE

 

(a)                                 Seller agrees to hold Buyer, and its Affiliates and their officers, directors, employees, agents and advisors (each an “Indemnified Party”) harmless from and indemnify, on an after-Tax basis, any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, “Costs”), relating to or arising out of this Agreement (including, without limitation, as a result of a breach of any representation or warranty contained on Schedule 1), any other Program Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Program Document or any transaction contemplated hereby or thereby, that, in each case, results from anything other than the Indemnified Party’s gross negligence, bad faith or willful misconduct.  Without limiting the generality of the foregoing, Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party, on an after-Tax basis, against all Costs and Taxes incurred or assessed as a result of or otherwise in connection with the holding of the Mortgage Loans or Agency Securities or any failure by Seller or Subsidiary thereof to pay when due any Taxes for which such Person is liable, that result from anything other than the Indemnified Party’s gross negligence, bad faith or willful misconduct.  In any suit, proceeding or action brought by an Indemnified Party in connection with this Agreement, any Mortgage Loan or Agency Security for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan or Agency Security, Seller will save, indemnify on an after-Tax basis and hold such Indemnified Party harmless from and against all expense, loss or damage suffered by reason of any defense, set off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller.  Seller also agrees to reimburse an Indemnified Party as and when billed by such Indemnified Party for all the Indemnified Party’s costs and expenses incurred in connection with the enforcement or the preservation of Buyer’s rights under this Agreement, any other Program Document or any transaction contemplated hereby or thereby, including without limitation the reasonable fees and disbursements of its counsel.

 

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(b)                                 Seller agrees to pay as and when billed by Buyer all of the out-of-pocket costs and expenses incurred by Buyer in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement, any other Program Document or any other documents prepared in connection herewith or therewith.  Seller agrees to pay as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation search and filing fees and all the reasonable fees, disbursements and expenses of counsel to Buyer.  Seller agrees to pay Buyer all the reasonable out-of-pocket due diligence, inspection, testing and review costs and expenses incurred by Buyer with respect to Mortgage Loans submitted by Seller for purchase under this Agreement, including, but not limited to, those out-of-pocket costs and expenses incurred by Buyer pursuant to Sections 15(a) and 17 hereof.

 

(c)                                  The obligations of Seller from time to time to pay the Repurchase Price, the Price Differential, the Obligations and all other amounts due under this Agreement shall be full recourse obligations of Seller.

 

SECTION 16.                                          SERVICING

 

(a)                                 Seller shall service each Purchased Mortgage Loan in accordance with the Servicing Agreement which standard shall be no less than Accepted Servicing Practices for the term beginning on the Purchase Date and ending on the earlier to occur of (i) the related Repurchase Date or (ii) the date on or after the occurrence of an Event of Default (the “Servicing Term”).  Seller shall service the Purchased Mortgage Loans in accordance with prudent mortgage loan servicing standards and procedures generally accepted in the mortgage banking industry and in accordance with all applicable requirements of the Agencies, Requirement of Law, the provisions of any applicable servicing agreement, and the requirements of any applicable Takeout Commitment and the Approved Investor, so that the eligibility of the Mortgage Loan for purchase under such Takeout Commitment is not voided or reduced by such servicing and administration.

 

(b)                                 If any Mortgage Loan that is proposed to be sold on a Purchase Date is serviced by a servicer other than Seller (a “Subservicer”), or if the servicing of any Mortgage Loan is to be transferred to a Subservicer, Seller shall provide a copy of the related servicing agreement and a Servicer Notice executed by such Subservicer (collectively, the “Servicing Agreement”) to Buyer prior to such Purchase Date or servicing transfer date, as applicable.  Each such Servicing Agreement shall be in form and substance reasonably acceptable to Buyer.  In addition, Seller shall have obtained the prior written consent of Buyer for such Subservicer to subservice the Mortgage Loans, which consent may be withheld in Buyer’s sole good faith discretion, which approval shall be deemed granted by Buyer with respect to Seller’s initial subservicer LoanCare, a division of FNF Servicing, Inc. In no event shall Seller’s use of a Subservicer relieve Seller of its obligations hereunder, and Seller shall remain liable under this Agreement as if Seller were servicing such Mortgage Loans directly.

 

(c)                                  Seller shall transfer actual servicing of each Purchased Mortgage Loan, together with all of the related Records in its possession, to Buyer’s designee and designate Buyer’s designee as the servicer in the MERS System upon the occurrence of an Event of Default hereunder.  Seller’s transfer of the Records and servicing under this Section shall be in accordance

 

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with customary standards in the industry and such transfer shall include the transfer of the gross amount of all escrows held for the related mortgagors (without reduction for unreimbursed advances or “negative escrows”).

 

(d)                                 During the period Seller is servicing the Purchased Mortgage Loans as agent for Buyer, Seller agrees that Buyer is the owner of the related Credit Files and Records and Seller shall at all times maintain and safeguard and cause the Subservicer to maintain and safeguard the Credit File for the Purchased Mortgage Loans (including photocopies or images of the documents delivered to Buyer), and accurate and complete records of its servicing of the Purchased Mortgage Loan; Seller’s possession of the Credit Files and Records being for the sole purpose of servicing such Purchased Mortgage Loan and such retention and possession by Seller being in a custodial capacity only.

 

(e)                                  At Buyer’s request, Seller shall promptly deliver to Buyer reports regarding the status of any Purchased Mortgage Loan being serviced by Seller, which reports shall include, but shall not be limited to, a description of any default thereunder for more than thirty (30) days or such other circumstances that could cause a material adverse effect on such Purchased Mortgage Loan, Buyer’s title to such Purchased Mortgage Loan or the collateral securing such Purchased Mortgage Loan; Seller may be required to deliver such reports until the repurchase of the Purchased Mortgage Loan by Seller.  Seller shall immediately notify Buyer if it becomes aware of any payment default that occurs under the Purchased Mortgage Loan or any default under any Servicing Agreement that would materially and adversely affect any Purchased Mortgage Loan subject thereto.

 

(f)                                   Seller shall release its custody of the contents of any Credit File or Mortgage File only (i) in accordance with the written instructions of Buyer, (ii) upon the consent of Buyer when such release is required as incidental to Seller’s servicing of the Purchased Mortgage Loan, is required to complete the Takeout Commitment or comply with the Takeout Commitment requirements, or (iii) as required by any applicable Requirement of Law.

 

(g)                                  Buyer reserves the right to appoint a successor servicer at any time to service any Purchased Mortgage Loan (each a “Successor Servicer”) upon the occurrence of an Event of Default.  If Buyer elects to make such an appointment upon the occurrence of an Event of Default, Seller shall be assessed all costs and expenses incurred by Buyer associated with transferring the servicing of the Purchased Mortgage Loans to the Successor Servicer.  In the event of such an appointment, Seller shall perform all acts and take all action so that any part of the Credit File and related Records held by Seller, together with all funds in the Custodial Account and other receipts relating to such Purchased Mortgage Loan, are promptly delivered to Successor Servicer, and shall otherwise reasonably cooperate with Buyer in effectuating such transfer.  Seller shall have no claim for lost servicing income, lost profits or other damages if Buyer appoints a Successor Servicer hereunder and the servicing fee is reduced or eliminated.  For the avoidance of doubt any termination of the Servicer’s rights to service by Buyer as a result of an Event of Default shall be deemed part of an exercise of Buyer’s rights to cause the liquidation, termination or acceleration of this Agreement.

 

(h)                                 For the avoidance of doubt, Seller retains no economic rights to the

 

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servicing of the Purchased Mortgage Loans provided that Seller shall continue to service the Purchased Mortgage Loans hereunder as part of its Obligations hereunder.  As such, Seller expressly acknowledges that the Purchased Mortgage Loans are sold to Buyer on a “servicing released” basis.

 

SECTION 17.                                          DUE DILIGENCE

 

(a)                                 Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Mortgage Loans, Seller, Settlement Agents, Approved Investors and other parties which may be involved in or related to Transactions (collectively, “Third Party Transaction Parties”), from time to time, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable prior notice to Seller, unless an Event of Default shall have occurred, in which case no notice is required, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession or under the control of Seller.  Seller will use commercially reasonable efforts to cause Third Party Transaction Parties to reasonably cooperate with any due diligence requests of Buyer.  Seller shall also make reasonably available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Mortgage Loans.  Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Mortgage Loans from Seller based solely upon the information provided by Seller to Buyer in the Mortgage Loan Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans purchased in a Transaction, including, without limitation, ordering broker’s price opinions, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan.  Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting.  Seller agrees to reasonably cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with reasonable access to any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller.  Seller further agrees that it shall pay all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 17.

 

SECTION 18.                                          ASSIGNABILITY

 

The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer.  Buyer may from time to time assign all or a portion of its rights and obligations under this Agreement and the Program Documents with Seller’s consent not to be unreasonably withheld; provided, however that such consent shall not be required if Buyer assigns its rights and obligations (i) to an Affiliate of Buyer or (ii) after the occurrence and during the continuance of an Event of Default.  Buyer shall maintain as agent of Seller, for review by Seller upon written request, a register of assignees and a copy of an executed assignment and acceptance by Buyer and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned.  Upon

 

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such assignment, (a) such assignee shall be a party hereto and to each Program Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to the extent that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Program Documents.  Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.  Nothing in this Agreement express or implied, shall give to any Person, other than the parties to this Agreement and their successors hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Agreement.  Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Buyer unless otherwise notified by Buyer in writing.  Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller.

 

Buyer may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement; provided, however, that (i) Buyer’s obligations under this Agreement shall remain unchanged, (ii) Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under this Agreement and the other Program Documents except as provided in Section 7.

 

Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 18, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to Seller or any of its Subsidiaries or to any aspect of the Transactions that has been furnished to Buyer by or on behalf of Seller or any of its Subsidiaries; provided that such assignee or participant agrees to hold such information subject to the confidentiality provisions of this Agreement.

 

In the event Buyer assigns all or a portion of its rights and obligations under this Agreement, the parties hereto agree to negotiate in good faith an amendment to this Agreement to add agency provisions similar to those included in agreements for similar syndicated repurchase facilities.

 

SECTION 19.                                          TRANSFER AND MAINTENANCE OF REGISTER.

 

(a)                                 Subject to acceptance and recording thereof pursuant to Section 19(b), from and after the effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of Buyer under this Agreement.  Any assignment or transfer by Buyer of rights or obligations under this Agreement that does not comply with this Section 19 shall be treated for purposes of this Agreement as a sale by such Buyer of a participation in such rights and obligations in accordance with Section 19(b) hereof.

 

(b)                                 Buyer shall maintain, on Seller’s behalf, a register (the “Register”) on which it will record each Assignment and Acceptance and participation.  The Register shall include the names and addresses of Buyer (including all assignees, successors and participants) and the percentage or portion of such rights and obligations assigned.  Failure to make any such

 

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recordation, or any error in such recordation shall not affect Seller’s obligations in respect of such rights.

 

SECTION 20.                                          HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

 

Title to all Purchased Assets and Repurchase Assets shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets.  Nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets to any Person, including without limitation, the Federal Home Loan Bank; provided, however, that to the extent Buyer engages in any Repurchase Transactions, it shall have reacquired title to such particular Purchased Assets on or prior to the related Repurchase Date.  Seller shall not be responsible for any additional obligations, costs, fees or expenses in connection with such transactions of Buyer.  Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets delivered to Buyer by Seller.

 

SECTION 21.                                          TAX TREATMENT

 

Notwithstanding anything to the contrary in this Agreement or any other Program Documents, each party to this Agreement acknowledges that it is its intent for U.S. federal, state and local income and franchise tax purposes to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets and the Purchased Assets as owned by Seller in the absence of a Default by Seller.  All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by any Requirement of Law (in which case such party shall promptly notify the other party of such Requirement of Law).

 

SECTION 22.                                          SET-OFF

 

In addition to any rights and remedies of Buyer hereunder and by law, Buyer shall have the right, without prior notice to Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law to set-off and appropriate and apply against any Obligation from Seller to Buyer any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims or cash, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from Buyer to or for the credit or the account of Seller.  Buyer agrees promptly to notify Seller after any such set-off and application made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application.

 

Buyer shall at any time have the right, in each case until such time as Buyer determines otherwise, to retain, to suspend payment or performance of, or to decline to remit, any amount or property that Buyer would otherwise be obligated to pay, remit or deliver to Seller hereunder if an Event of Default has occurred and is continuing.

 

SECTION 23.                                          TERMINABILITY

 

Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such representation and

 

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warranty, and Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be materially false or misleading, notwithstanding that Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made.  Notwithstanding any such termination or the occurrence of an Event of Default, all of the representations and warranties and covenants hereunder shall continue and survive.  The obligations of Seller under Section 15 hereof shall survive the termination of this Agreement.

 

SECTION 24.                                          NOTICES AND OTHER COMMUNICATIONS

 

Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by electronic transmission) delivered to the intended recipient at the addresses set forth below.  In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.  Except as otherwise provided in this Agreement and except for notices given under Section 3 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when transmitted electronically or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.

 

If to Seller:

 

AmeriHome Mortgage Company, LLC

21300 Victory Boulevard, Suite 900

Woodland Hills, CA 91367

 

AmeriHome Mortgage Company, LLC

21300 Victory Boulevard, Suite 900

Woodland Hills, CA 91367

 

With a copy to:

 

AmeriHome Mortgage Company, LLC

21300 Victory Boulevard, Suite 900

Woodland Hills, CA 91367

Attention:  Legal Department

Email:  legal@amerihome.com

 

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If to Buyer:

 

UBS Bank USA

1285 Avenue of the Americas

New York, NY 10019

 

With a copy to:

 

UBS Bank USA

153 West 51st Street

New York, NY 10019

 

And:

 

OL-SMFG-Business@ubs.com

 

SECTION 25.                              USE OF THE WAREHOUSE ELECTRONIC SYSTEM AND OTHER ELECTRONIC MEDIA

 

Seller acknowledges and agrees that Buyer may require or permit certain transactions with Buyer be conducted electronically using Electronic Records and/or Electronic Signatures.  Seller consents to the use of Electronic Records and/or Electronic Signatures whenever expressly required or permitted by Buyer and acknowledges and agrees that Seller shall be bound by its Electronic Signature and by the terms, conditions, requirements, information and/or instructions contained in any such Electronic Records.

 

Seller agrees to adopt as its Electronic Signature its user identification codes, passwords, personal identification numbers, access codes, a facsimile image of a written signature and/or other symbols or processes as provided or required by Buyer from time to time (as a group, any subgroup thereof or individually, hereinafter referred to as Seller’s Electronic Signature).  Seller acknowledges that Buyer will rely on any and all Electronic Records and on Seller’s Electronic Signature transmitted or submitted to Buyer.

 

Buyer shall not be liable for the failure of either its or Seller’s internet service provider, or any other telecommunications company, telephone company, satellite company or cable company to timely, properly and accurately transmit any Electronic Record or fax copy.

 

Before engaging in Electronic Transactions with Seller, Buyer may provide Seller, or require Seller to create, user identification codes, passwords, personal identification numbers and/or access codes, as applicable, to permit access to Buyer’s computer information processing system.  Each Person permitted access to the Warehouse Electronic System must have a separate identification code and password.  Seller shall be fully responsible for protecting and safeguarding any and all user identification codes, passwords, personal identification numbers and access codes

 

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provided or required by Buyer.  Seller shall adopt and maintain security measures to prevent the loss, theft or unauthorized or improper disclosure or use of any and all user identification codes, passwords, personal identification numbers and/or access codes by Persons other than the individual Person who is authorized to use such information.  Seller shall notify Buyer immediately in the event (i) of any loss, theft or unauthorized disclosure or use of any of the user identification codes, passwords, personal identification numbers and/or access codes or (ii) Seller has any reason to believe there has been a breach of security or that its access to Warehouse Electronic System is no longer secure for any reason.

 

Seller understands and agrees that it shall be fully responsible for protecting and safeguarding its computer hardware and software from any and all (a) computer “viruses,” “time bombs,” “trojan horses” or other harmful computer information, commands, codes or programs that may cause or facilitate the destruction, corruption, malfunction or appropriation of, or damage or change to, any of Seller’s or Buyer’s computer information processing systems, including without limitation, all hardware, software, Electronic Records, information, data and/or codes and (b) computer “worms,” “trap doors” or other harmful computer information, commands, codes or programs that enable unauthorized access to Seller’s and/or Buyer’s computer information processing systems, including without limitation, all hardware, software, Electronic Records, information, data and/or codes.

 

Seller agrees that Buyer may, in its sole good faith discretion and from time to time, without limiting Seller’s liability set forth herein, establish minimum security standards that Seller must, at a minimum, comply with in an effort to (x) protect and safeguard any and all user identification codes, passwords, personal identification numbers and/or access codes from loss, theft or unauthorized disclosure or use; and (y) prevent the infiltration and “infection” of Seller’s hardware and/or software by any and all computer “viruses,” “time bombs,” “trojan horses,” “worms,” “trapdoors” or other harmful computer codes or programs.

 

If Buyer, from time to time, establishes minimum security standards, Seller shall comply with such minimum security standards within the time period established by Buyer.

 

Buyer shall have the right to confirm Seller’s compliance with any such minimum security standards.  Seller’s compliance with such minimum security standards shall not relieve Seller from any of its liability set forth in this Section 25.

 

Whether or not Buyer establishes minimum security standards, Seller shall continue to be fully responsible for adopting and maintaining security measures that are consistent with the risks associated with conducting electronic transactions with Buyer.  Seller’s failure to adopt and maintain appropriate security measures or to comply with any minimum security standards established by Buyer may result in, among other things, termination of Seller’s access to Buyer’s computer information processing systems.

 

Seller understands and agrees that certain elements or components of the Warehouse Electronic System may be provided by third party vendors, and hereby holds Buyer harmless from any liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against Seller relating to or arising out of Seller’s use

 

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of the Warehouse Electronic System including without limitation, the use of any elements or components provided by third party vendors.

 

SECTION 26.                                          ENTIRE AGREEMENT; SEVERABILITY; SINGLE AGREEMENT

 

This Agreement, together with the Program Documents, constitute the entire understanding between Buyer and Seller with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Assets including, without limitation, any confidentiality agreements.  By acceptance of this Agreement, Buyer and Seller each acknowledge that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement.  Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

 

Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions.  Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that Buyer shall be entitled to set off claims and apply property held by it in respect of any Transaction against obligations owing to it in respect of any other Transaction hereunder; (iii) 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 and (iv) to promptly provide notice to the other after any such set off or application.

 

SECTION 27.                                          GOVERNING LAW

 

THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.  NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.

 

SECTION 28.                                          SUBMISSION TO JURISDICTION; WAIVERS

 

BUYER AND EACH SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(i)                                    SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER PROGRAM DOCUMENTS, OR FOR RECOGNITION AND

 

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ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

 

(ii)                                CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT 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;

 

(iii)                            AGREES 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 24 HEREOF OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTY SHALL HAVE BEEN NOTIFIED;

 

(iv)                             AGREES 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; AND

 

(v)                                 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 PROGRAM DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

SECTION 29.                                          NO WAIVERS, ETC.

 

No failure on the part of Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Program Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Program Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The remedies provided herein are cumulative and not exclusive of any remedies provided by law.  An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.

 

SECTION 30.                                          NETTING

 

If Buyer and Seller are “financial institutions” as now or hereinafter defined in Section 4402 of Title 12 of the United States Code (“Section 4402”) and any rules or regulations promulgated thereunder (a) all amounts to be paid or advanced by one party to or on behalf of the other under this Agreement or any Transaction hereunder shall be deemed to be “payment

 

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obligations” and all amounts to be received by or on behalf of one party from the other under this Agreement or any Transaction hereunder shall be deemed to be “payment entitlements” within the meaning of Section 4402, and this Agreement shall be deemed to be a “netting contract” as defined in Section 4402; (b) the payment obligations and the payment entitlements of the parties hereto pursuant to this Agreement and any Transaction hereunder shall be netted as follows.  In the event that either party (the “Defaulting Party”) shall fail to honor any payment obligation under this Agreement or any Transaction hereunder, the other party (the “Nondefaulting Party”) shall be entitled to reduce the amount of any payment to be made by the Nondefaulting Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor.

 

SECTION 31.                                          CONFIDENTIALITY

 

(a)                                 Confidential Terms.  Buyer and Seller hereby acknowledge and agree that all information provided before or after the date hereof by one party to any other in connection with any Program Document or the Transactions contemplated hereby, whether furnished by or on behalf of Buyer or Seller or any of their representatives including without limitation:  (i) all knowledge or information concerning the business, operations and assets of the Buyer or Seller or their respective affiliates, which for the avoidance of doubt, shall include, without limitation, internal operating procedures; methodologies; investment strategies; hedging strategies; structuring strategies and concepts; trade secrets; sales data; vendor data and customer lists (existing and potential); financial plans, projections and reports; product strategies; and investment strategies; (ii) all property owned, licensed and/or developed by or for the Buyer or Seller or their respective affiliates, such as computer systems, programs, software and devices, plus information about the design, methodology and documentation therefor; (iii) information about or personal to the Buyer or Seller or their respective affiliates, insureds, employees, agents and applicants (for jobs or products) of any of the foregoing and (iv) information, materials, products or any other tangible or intangible assets in the possession or the control of the Buyer or Seller or their respective affiliates, which is proprietary to, or confidential to or about, any other person or entity (the “Confidential Terms”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent set forth in clause (b) below.  Confidential Terms shall not include information that (A) is or becomes part of the public domain through no fault of the Buyer or Seller, as applicable, or its Permitted Recipients (as defined below) in violation of this Agreement; (B) is already known to the Buyer or Seller, as applicable, or any of its Permitted Recipients on a non-confidential basis prior to disclosure of such information by either party; (C) is subsequently received by the Buyer or Seller, as applicable, or its Permitted Recipients from a third party who the Buyer or Seller, as applicable, or its Permitted Recipients’ believe is not prohibited from disclosing such information by a contractual, legal, fiduciary or other obligation owed to the Buyer or Seller, as applicable.

 

(b)                                 Permitted Disclosures.  Notwithstanding clause (a) above, Buyer and Seller, as applicable, shall be permitted to disclose, on a confidential basis, Confidential Terms to the extent that (i) it is necessary in connection with any Program Document, Purchased Assets and/or Transaction to do so in working with its affiliates, legal counsel, actuaries, auditors, directors, officers, employees (“Permitted Recipients”); (ii) taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws; or (iii) in the event of an Event of Default, Buyer determines such information to be necessary or

 

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desirable to disclose in connection with the marketing and sales of the Purchased Assets or otherwise to enforce or exercise Buyer’s rights hereunder.

 

(c)                                  Involuntary Disclosures.  If the Buyer or Seller shall at any time be involved in any litigation, arbitration, administrative, legal, regulatory or other proceeding or if Buyer or Seller and/or its respective Permitted Recipients is otherwise required by law, regulation or other legal process, in each case, in which such party and/or its Permitted Recipient, on the advice of its own legal counsel, may be or becomes required to disclose any Confidential Terms in violation of Section 31 of this Agreement (a “Legal Proceeding”), whether in discovery or otherwise, including by any oral question, subpoena, interrogatory, deposition, request for documents or information, order, writ, rule, regulatory, or other legal process, such party and/or its Permitted Recipients shall, if such party and/or its Permitted Recipients may lawfully do so, promptly notify the other party of the receipt of such Legal Proceeding whereupon such other party may seek an appropriate protective order or other relief at such other party’s own expense.  Buyer or Seller and its respective Permitted Recipients, as applicable, shall cooperate with the other party, at such other party’s expense, to obtain a protective order or other remedy or reasonable assurance that confidential treatment will be afforded the Confidential Terms in the Legal Proceeding.  Buyer or Seller and/or its respective Permitted Recipients may disclose any Confidential Terms in accordance with such Legal Proceeding in the event that the other party fails to obtain any protective order or other relief but shall use its reasonable efforts to disclose only that portion of the Confidential Terms which is necessary to comply with such Legal Proceeding after taking commercially reasonable steps to ensure that the portion of the Confidential Terms so disclosed will be treated confidentially by the party to which it has been so disclosed.  Notwithstanding the foregoing, no notice or other action by Buyer or Seller, as applicable, or any of their respective Permitted Recipients shall be required where disclosure of Confidential Terms is made in connection with a routine request, audit or examination by a bank examiner, auditor, regulatory authority or supervisory authority not targeting or in regards to the Program Documents, Transactions or the Buyer or Seller, as applicable.

 

(d)                                 Treatment of Confidential Information.  Buyer understands that the Confidential Information may contain information that is subject to, and accordingly Buyer represents and warrants to Seller that Buyer and its Affiliates are subject to internal policies and processes that require Buyer and its Permitted Recipients to receive, maintain, store and dispose of such Confidential Information in compliance with, any and all applicable federal, state and local laws, rules, regulations and ordinances governing or relating to privacy rights in connection with its performance under this Agreement including, without limitation, the GLB Act.  Such policies and procedures include the implementation of such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of any “nonpublic personal information” that is disclosed to Buyer in any manner or for any purpose and that pertains to any “customers” or “consumers” (as all such terms are defined in the GLB Act) of Seller, (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.  Buyer further understands that Seller is relying on Buyer’s representation and warranty in disclosing the Confidential Information.  Upon written request from Seller, Buyer will provide written confirmation of the continued accuracy of this representation and warranty, it being understood that disclosure of information pertaining to specific policies or processes may require a confidentiality undertaking from Seller.

 

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(e)                                  Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Document, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, 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 Seller may not disclose the name of or identifying information with respect to Buyer, its Affiliates or any other Indemnified Party, or any pricing terms (including, without limitation, the Pricing Rate, Warehouse Fees and, Purchase Price) 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 Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior written consent of Buyer.  The provisions set forth in this Section 31 shall survive the termination of this Agreement.

 

SECTION 32.                                          INTENT

 

(a)                                 The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the Bankruptcy Code, as amended and a “securities contract” as that term is defined in Section 741 of Title 11 of the Bankruptcy Code, as amended and that all payments hereunder are deemed “margin payments” or “settlement payments” as defined in Title 11 of the Bankruptcy Code and that the pledge of the Repurchase Assets constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.  The parties 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).

 

(b)                                 This Agreement is intended to be a “repurchase agreement” and a “securities contract,” within the meaning of Section 555 and Section 559 under the Bankruptcy Code.  It is understood that either party’s right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Section 13 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the Bankruptcy Code, as amended; any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” as such term is defined in Bankruptcy Code Section 741(5).

 

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

 

(d)                                 The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” a “repurchase agreement” and a “securities contract” as such terms are defined in FDIA and any rules, orders or policy statements thereunder.

 

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

 

(f)                                   Each party intends that this Agreement constitutes and shall be construed and interpreted as a “master netting agreement” within the meaning of and as such terms are used in Section 561 of the Bankruptcy Code and each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, this Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.

 

SECTION 33.                                          DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

 

The parties acknowledge that they have been advised that (a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder and (b) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.

 

SECTION 34.                                          CONFLICTS

 

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

 

SECTION 35.                                          MISCELLANEOUS

 

(a)                                 Counterparts.  This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.  Delivery of an executed counterpart of a signature page of this Agreement in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement.

 

(b)                                 Captions.  The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

 

(c)                                  Acknowledgment.  Seller hereby acknowledges that (i) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Program

 

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Documents; (ii) Buyer has no fiduciary relationship to Seller; and (iii) no joint venture exists between Buyer and Seller.

 

(d)                                 Documents Mutually Drafted.  Seller and Buyer agree that this Agreement each other Program Document prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.

 

(e)                                  Amendments.  This Agreement and each other Program Document may be amended from time to time, in writing and duly executed by the parties hereto.

 

(f)                                   Acknowledgement of Anti Predatory Lending Policies.  Buyer has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan.

 

(g)                                  Authorizations.  Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for Seller, under this Agreement.

 

SECTION 36.                                          GENERAL INTERPRETIVE PRINCIPLES

 

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:  (a) the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender; (b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; (c) references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement; (d) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions; (e) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; (f) the term “include” or “including” shall mean without limitation by reason of enumeration; (g) all times specified herein or in any other Program Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and (h) all references herein or in any Program Document to “good faith” means good faith as defined in Section 1-201(19) of the UCC as in effect in the State of New York.

 

[THIS SPACE INTENTIONALLY LEFT BLANK]

 

68

 

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.

 

	
 
    	
BUYER:
    
	
 
    	
 
    
	
 
    	
UBS   BANK USA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Master Repurchase Agreement

 

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
AMERIHOME   MORTGAGE COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Master Repurchase Agreement

 

 

SCHEDULE 1

 

REPRESENTATIONS AND WARRANTIES

 

Seller represents and warrants to Buyer, with respect to each Mortgage Loan, that as of the Purchase Date for the purchase of any Purchased Mortgage Loans by Buyer from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while the Program Documents and any Transaction hereunder is in full force and effect, that the following are true and correct.  For purposes of this Schedule 1 and the representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to a Mortgage Loan if and when Seller has taken or caused to be taken action such that the event, circumstance or condition that gave rise to such breach no longer adversely affects such Mortgage Loan.  With respect to those representations and warranties which are made to the best of Seller’s knowledge, if it is discovered by Seller or 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)                                 Mortgage Loans as Described.  The information set forth in the Mortgage Loan Schedule is complete, true and correct.

 

(b)                                 Payments Current.  No payment required under the Mortgage Loan is [***] days or more delinquent nor has any payment under the Mortgage Loan been [***] days or more delinquent at any time since the origination of the Mortgage Loan; and, if the Mortgage Loan is a Co-op Loan, no foreclosure action or private or public sale under the Uniform Commercial Code has begun or, to the knowledge of Seller, is currently being threatened or commenced with respect to the Co-op Loan.

 

(c)                                  Origination Date.  The initial Purchase Date is no more than (i) with respect to Mortgage Loans other than Correspondent Mortgage Loans in non-escrow states, [***] days following the origination date of the Mortgage Note; (ii) with respect to Mortgage Loans other than Correspondent Mortgage Loans in escrow states, [***] days following the origination date of the Mortgage Note and (iii) with respect to Correspondent Mortgage Loans, [***] days following the origination date of the Mortgage Note or such other date approved by Buyer in its sole discretion.

 

(d)                                 Approved Underwriting Guidelines.  The Mortgage Loan satisfies the Approved Underwriting Guidelines.

 

(e)                                  No Outstanding Charges.  There are no defaults in complying with the terms of the Mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable.  Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date

 

Sch 1-1

 

of disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest.

 

(f)                                   Original Terms Unmodified.  The terms of the Mortgage Note (and the Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been delivered to the Custodian or to such other Person as Buyer shall designate in writing, and the terms of which are reflected in the Mortgage Loan Schedule.  The substance of any such waiver, alteration or modification has been approved by the issuer of any related PMI Policy and the title insurer, if any, to the extent required by the policy, and its terms are reflected on the Mortgage Loan Schedule, if applicable.  No Mortgagor has been released, in whole or in part, except in connection with an assumption agreement, approved by the issuer of any related PMI Policy and the issuer of the title insurer, to the extent required by the policy, and which assumption agreement is part of the Mortgage File delivered to the Custodian or to such other Person as Buyer shall designate in writing and the terms of which are reflected in the Mortgage Loan Schedule.

 

(g)                                  No Defenses.  The Mortgage Loan (and the Assignment of Proprietary Lease related to each Co-op Loan) is not subject to any right of rescission, set-off, counterclaim or defense, including without limitation the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim 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, and no Mortgagor was a debtor in any state or federal bankruptcy or insolvency proceeding at, or subsequent to, the time the Mortgage Loan was originated.

 

(h)                                 Hazard Insurance.  Pursuant to the terms of the Mortgage, the Fannie Mae guide, the Freddie Mac guide and any additional requirements set forth in the Approved Underwriting Guidelines, all buildings or other improvements upon the Mortgaged Property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards.  If required by the National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration as in effect which policy conforms to Fannie Mae and Freddie Mac, as well as all additional requirements set forth in the Servicing Agreement.  All individual insurance policies contain a standard mortgagee clause naming Seller and its successors and assigns as mortgagee, and all premiums thereon have been paid.  The Mortgage obligates the Mortgagor thereunder to maintain the 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.  Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development.  The hazard insurance policy is the valid and binding obligation of the insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of Buyer upon the

 

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consummation of the transactions contemplated by this Agreement.  Seller has not engaged in, and has no knowledge of the Mortgagor’s or any servicer’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of such policy, 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 Seller.

 

(i)                                     Compliance with Applicable Laws.  Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, anti-predatory lending laws, laws covering fair housing, fair credit reporting, community reinvestment, homeowners equity protection, equal credit opportunity, mortgage reform and disclosure laws or unfair and deceptive practices laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations.  Seller shall maintain in its possession, available for Buyer’s inspection, and shall deliver to Buyer upon demand, evidence of compliance with all requirements set forth herein.

 

(j)                                    No Satisfaction of Mortgage.  The Mortgage has not been satisfied, 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, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission.  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 Seller waived any default resulting from any action or inaction by the Mortgagor.

 

(k)                                 Location and Type of Mortgaged Property.  The Mortgaged Property is a fee simple property located in the state identified in the Mortgage Loan Schedule except that with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, the Mortgaged Property may be a leasehold estate and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual residential condominium or Co-op Unit in a low-rise or high-rise condominium or Co-op Project, or an individual unit in a planned unit development and that no residence or dwelling is (i) a mobile home or (ii) a manufactured home, provided, however, that any condominium or Co-op Unit or planned unit development shall not fall within any of the “Ineligible Projects” of part VIII, Section 102 of the Fannie Mae Selling Guide and shall conform with the Approved Underwriting Guidelines.  The Mortgaged Property is not raw land.  In the case of any Mortgaged Properties that are manufactured homes (a “Manufactured Home Mortgage Loans”), (i) such Manufactured Home Mortgage Loan conforms with the applicable Fannie Mae or Freddie Mac requirements regarding mortgage loans related to manufactured dwellings, (ii) the related manufactured dwelling is permanently affixed to the land, (iii) the related manufactured dwelling and the related land are subject to a Mortgage properly filed in the appropriate public recording office and naming Seller as mortgagee, (iv) the applicable laws of the jurisdiction in which the related Mortgaged Property is located will deem the manufactured dwelling located on such Mortgaged Property to be a part of the real property on which such dwelling is located, and (v) such

 

Sch 1-3

 

Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended and (y) secured by manufactured housing treated as a single family residence under Section 25(e)(10) of the Code.  As of the date of origination, no portion of the Mortgaged Property was used for commercial purposes, and since the date of origination, no portion of the Mortgaged Property has been used for commercial purposes; provided, that Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes.

 

(l)                                     Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to such Mortgage Loan is located in any jurisdiction other than the United States of America or the District of Columbia.

 

(m)                             Valid First Lien.  Each Mortgage is a valid and subsisting first lien of record on a single parcel of real estate constituting the Mortgaged Property, including all buildings and improvements on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time, subject in all cases to the exceptions to title set forth in the title insurance policy with respect to the related Mortgage Loan, which exceptions are generally acceptable to prudent mortgage lending companies, and such other exceptions to which similar properties are commonly subject and which do not individually, or in the aggregate, materially and adversely affect the benefits of the security intended to be provided by such Mortgage.  The lien of the Mortgage is subject only to (collectively, “Permitted Encumbrances”):

 

(i)                                     the lien of current real property taxes and assessments not yet due and payable.

 

(ii)                                  covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) specifically referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal; and

 

(iii)                               other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.

 

Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting, enforceable and perfected first lien and first priority security interest on the property described therein and Seller has full right to sell and assign the same to Buyer.

 

Sch 1-4

 

(n)                                 Validity of Mortgage Documents.  The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, receivership or other similar laws affecting creditors’ rights generally from time to time in effect and general principles of equity.  All parties to the Mortgage Note and the related Mortgage had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the related Mortgage, and the Mortgage Note and the related Mortgage have been duly and properly executed by other such related parties.  The documents, instruments and agreements submitted for loan underwriting were not falsified and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading.  No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to the Mortgage Loan has taken place on the part of any Person, including without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination or servicing of the Mortgage Loan or in the application or any insurance in relation to such Mortgage Loan.  Seller has reviewed all of the documents constituting the Mortgage File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein.

 

(o)                                 Full Disbursement of Proceeds.  The Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with.  All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.  All points and fees related to each Mortgage Loan were disclosed in writing to the Mortgagor in accordance with applicable state and federal law and regulation.  No Mortgagor was charged “points and fees” (whether or not financed) in an amount that exceeds the greater of (i) [***] and (ii) [***] (or such other applicable limits for lower balance Mortgages) as specified under 12 CFR 1026.43(e)(3), and the points and fees were calculated using the calculation required for qualified mortgages under 12 CFR 1026.32(b) to determine compliance with applicable requirements.

 

(p)                                 Ownership.  Seller is the sole owner of record and holder of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage Loans to Buyer, Seller will retain the Mortgage Files or any part thereof with respect thereto not delivered to the Custodian, Buyer or Buyer’s designee, in trust only for the purpose of servicing and supervising the servicing of each Mortgage Loan.  The Mortgage Loan is not assigned or pledged, and Seller has good, indefeasible and marketable title thereto, and has full right to transfer and sell the Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest (other than Permitted Encumbrances), and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign each Mortgage Loan (and with respect to any Co-op Loan, the sole owner of the related Assignment of Proprietary Lease) pursuant to this Agreement and following the sale of each Mortgage Loan, Buyer will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest (other than Permitted

 

Sch 1-5

 

Encumbrances).  Seller intends to relinquish all rights to possess, control and monitor the Mortgage Loan.

 

(q)                                 Doing Business.  All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (1) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (2) either (i) organized under the laws of such state, or (ii) qualified to do business in such state, or (iii) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (3) not doing business in such state.

 

(r)                                    LTV, PMI Policy.  No Conforming Mortgage Loan has an LTV greater than [***].  The LTV of the Conforming Mortgage Loan either is not more than [***] or the excess over [***] of the Appraised Value is and will be insured as to payment defaults by a PMI Policy until the LTV of such Conforming Mortgage Loan is reduced to [***].  All provisions of such PMI Policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid.  No action, inaction, or event has occurred and no state of facts exists that has, or will result in the exclusion from, denial of, or defense to coverage.  Any Conforming Mortgage Loan subject to a PMI Policy obligates the Mortgagor thereunder to maintain the PMI Policy and to pay all premiums and charges in connection therewith.  The Mortgage Interest Rate for the Conforming Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such insurance premium.  The LTV of any HARP Mortgage Loan is no greater than [***] if such Mortgage Loan is (i) a fixed-rate Mortgage Loan with a term in excess of 30 years, or (ii) an adjustable-rate Mortgage Loan with an initial fixed period greater than or equal to five years, unless otherwise approved by Buyer in its sole discretion.

 

(s)                                   Title Insurance.  The Mortgage Loan is covered by an ALTA lender’s title insurance policy, or with respect to any Mortgage Loan for which the related Mortgaged Property is located in California a CLTA lender’s title insurance policy, or other generally acceptable form of policy or insurance acceptable to Fannie Mae or Freddie Mac and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring 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, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment.  Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance.  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 title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading.  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 full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement.  No claims have been made under such lender’s title insurance policy, and no prior holder of the related Mortgage, including Seller, has done, by act or omission,

 

Sch 1-6

 

anything which would impair the coverage of such lender’s title insurance policy, 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 Seller.

 

(t)                                    No Defaults.  Other than payments due but not yet [***] days or more delinquent, there is no default, breach, violation or event which would permit acceleration existing under the Mortgage or the Mortgage Note and no event 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 which would permit acceleration, and neither Seller nor any of its affiliates nor any of their respective predecessors, have waived any default, breach, violation or event which would permit acceleration; and with respect to each Co-op Loan, there is no default in complying with the terms of the Mortgage Note, the Assignment of Proprietary Lease and the Proprietary Lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been paid, and Seller has the right under the terms of the Mortgage Note, Assignment of Proprietary Lease and Recognition Agreement to pay any maintenance charges or assessments owed by the Mortgagor.

 

(u)                                 No Mechanics’ Liens.  There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage.

 

(v)                                 Location of Improvements; No Encroachments.  All improvements which were considered in determining the Appraised Value of the Mortgaged Property at origination lay wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property (except those encroachments which the title insurer has affirmatively insured over).  No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning law or regulation.

 

(w)                               Origination; Payment Terms.  The Mortgage Loan was originated by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or other similar institution which is supervised and examined by a federal or state authority.  The documents, instruments and agreements submitted for loan underwriting were not falsified and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading.  No Mortgage Loan contains terms or provisions which would result in negative amortization.  Principal payments on the Mortgage Loan commenced no more than [***] days after funds were disbursed in connection with the Mortgage Loan.  The mortgage interest rate as well as the lifetime rate cap and the periodic cap are as set forth on the Mortgage Loan Schedule.  The Mortgage Note is payable in equal monthly installments of principal and interest, which installments of interest, with respect to adjustable rate Mortgage Loans, are subject to change due to the adjustments to the mortgage interest rate on each interest rate adjustment date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty

 

Sch 1-7

 

years from commencement of amortization.  Unless otherwise specified, the Mortgage Loan is payable on the first day of each month.  There are no Mortgage Loans which contain a provision allowing the Mortgagor to convert the Mortgage Note from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note.

 

(x)                                 Customary Provisions.  The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial or non-judicial foreclosure.  Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property.  There is no homestead or other exemption or other right available to the Mortgagor or any other person, or restriction on Seller or any other person, including without limitation, any federal, state or local, law, ordinance, decree, regulation, guidance, attorney general action, or other pronouncement, whether temporary or permanent in nature, that would interfere with, restrict or delay, either (y) the ability of Seller, Buyer 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 Seller, Buyer or any servicer or any successor servicer to foreclose on the related Mortgage.

 

(y)                                 Conformance with Agency and Approved Underwriting Guidelines.  The Mortgage Loan was underwritten in accordance with the Approved Underwriting Guidelines (a copy of which has been delivered to Buyer).  The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac, Fannie Mae or FHA, as applicable, and Seller has not made any representations to a Mortgagor that are inconsistent with the mortgage instruments used.  The methodology used in underwriting the extension of credit for each Mortgage Loan employs objective quantitative principles which relate the Mortgagor’s credit characteristics, income, assets and liabilities (as applicable to a particular underwriting program) to the proposed payment, and such underwriting methodology does not rely on the extent of the Mortgagor’s equity in the collateral as the principal determining factor in approving such credit extension.  Such underwriting methodology confirmed that at the time of origination (application/approval) the Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan.

 

(z)                                  Occupancy of the Mortgaged Property.  The Mortgaged Property is lawfully occupied under applicable law.  All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities.

 

(aa)                          No Additional Collateral.  The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (j) above.

 

(bb)                          Deeds of Trust.  In the event the Mortgage constitutes a deed of trust, a trustee, authorized and 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

 

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will become payable by Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor or reconveyance of the deed of trust.

(cc)                            Acceptable Investment.  There are no circumstances or conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage File or the Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become delinquent, or adversely affect the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during any period materially faster or slower than the mortgage loans originated by Seller generally.

 

(dd)                          Delivery of Mortgage Documents.  The Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered under the Custodial Agreement for each Mortgage Loan have been delivered to the Custodian.  Seller is in possession of a complete, true and accurate Mortgage File, except for such documents the originals of which have been delivered to the Custodian or Buyer or which have been submitted for recording and not yet returned.

 

(ee)                            Condominiums/Planned Unit Developments.  If the Mortgaged Property is a condominium unit or a planned unit development (other than a de minimis planned unit development) such condominium or planned unit development project is (i) acceptable to Fannie Mae or Freddie Mac or (ii) located in a condominium or planned unit development project which has received project approval from Fannie Mae or Freddie Mac.  The representations and warranties required by Fannie Mae with respect to such condominium or planned unit development have been satisfied and remain true and correct.

 

(ff)                              Transfer of Mortgage Loans.  The Assignment of Mortgage with respect to each Mortgage Loan is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.  The transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by Seller are not subject to the bulk transfer or similar statutory provisions in effect in any applicable jurisdiction.

 

(gg)                            Due-On-Sale.  The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid 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, and to the best of Seller’s knowledge, such provision is enforceable.

 

(hh)                          Assumability.  No Mortgage Loan is assumable.

 

(ii)                                  No Buydown Provisions; No Graduated Payments or Contingent Interests.  The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision.  The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.

 

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(jj)                                Consolidation of Future Advances.  Any future advances made to the Mortgagor prior to the 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 acceptable to Fannie Mae and Freddie Mac and/or FHA, as applicable.  The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.

 

(kk)                          Mortgaged Property Undamaged; No Condemnation Proceedings.  There is no proceeding pending or threatened for the total or partial condemnation of the Mortgaged Property.  The Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended and each Mortgaged Property is in good repair.

 

(ll)                                  Collection Practices; Escrow Deposits; Interest Rate Adjustments.  The origination, servicing and collection practices used by Seller with respect to the Mortgage Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper and prudent in the mortgage origination and servicing business.  With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of, Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made.  All Escrow Payments have been collected in full compliance with state and federal law and the provisions of the related Mortgage Note and Mortgage.  An escrow of funds is not prohibited by applicable law and has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable.  No escrow deposits or Escrow Payments or other charges or payments due Seller have been capitalized under the Mortgage or the Mortgage Note.  All mortgage interest rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage and Mortgage Note on the related interest rate adjustment date.  If, pursuant to the terms of the Mortgage Note, another index was selected for determining the mortgage interest rate, the same index was used with respect to each Mortgage Note which required a new index to be selected, and such selection did not conflict with the terms of the related Mortgage Note.  Seller executed and delivered any and all notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the mortgage interest rate and the Monthly Payment adjustments.  Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.

 

(mm)                  No Violation of Environmental Laws.  The Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation.  There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any environmental law, rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property.

 

Sch 1-10

 

(nn)                          Servicemembers Civil Relief Act of 2003.  The Mortgagor has not notified Seller, and Seller has no knowledge of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.

 

(oo)                          Appraisal.  The Mortgage File contains an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by a qualified appraiser, duly appointed by Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae, Freddie Mac or FHA and Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated, or with respect to a HARP Mortgage Loan, a duly executed property inspection waiver, fieldwork waiver, or other such similar document as required by the applicable Agency.

 

(pp)                          Disclosure Materials.  The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by, and Seller has complied with, all applicable law with respect to the making of the Mortgage Loans.  Seller shall maintain such statement in the Mortgage File.

 

(qq)                          Construction or Rehabilitation of Mortgaged Property.  No Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property.

 

(rr)                                Value of Mortgaged Property.  Seller has no knowledge of any circumstances existing that could reasonably be expected to adversely affect the value or the marketability of any Mortgaged Property or Mortgage Loan or to cause the Mortgage Loans to prepay during any period materially faster or slower than similar mortgage loans held by Seller generally secured by properties in the same geographic area as the related Mortgaged Property.

 

(ss)                              No Defense to Insurance Coverage.  Seller has caused or will cause to be performed any and all acts required to preserve the rights and remedies of Buyer in any insurance policies applicable to the Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of coinsured, joint loss payee and mortgagee rights in favor of Buyer.  No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any applicable, special hazard insurance policy, or applicable PMI Policy or bankruptcy bond (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.

 

Sch 1-11

 

(tt)                                Reserved.

 

(uu)                          Prior Servicing.  Each Mortgage Loan has been serviced in all material respects in strict compliance with Accepted Servicing Practices.

 

(vv)                          Credit Information.  As to each consumer report (as defined in the Fair Credit Reporting Act, Public Law 91-508) or other credit information furnished by Seller to Buyer, that Seller has full right and authority and is not precluded by law or contract from furnishing such information to Buyer and Buyer is not precluded from furnishing the same to any subsequent or prospective purchaser of such Mortgage.  Seller shall hold Buyer harmless from any and all damages, losses, costs and expenses (including attorney’s fees) arising from disclosure of credit information in connection with Buyer’s secondary marketing operations and the purchase and sale of mortgages or Servicing Rights thereto.

 

(ww)                      Leaseholds.  If the Mortgage Loan is secured by a long-term residential lease, (1) the lessor under the lease holds a fee simple interest in the land; (2) the terms of such lease expressly permit the mortgaging of the leasehold estate, the assignment of the lease without the lessor’s consent and the acquisition by the holder of the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of foreclosure or provide the holder of the Mortgage with substantially similar protections; (3) the terms of such lease do not (a) allow the termination thereof upon the lessee’s default without the holder of the Mortgage being entitled to receive written notice of, and opportunity to cure, such default, (b) allow the termination of the lease in the event of damage or destruction as long as the Mortgage is in existence, (c) prohibit the holder of the Mortgage from being insured (or receiving proceeds of insurance) under the hazard insurance policy or policies relating to the Mortgaged Property or (d) permit any increase in rent other than pre-established increases set forth in the lease; (4) the original term of such lease is not less than 15 years; (5) the term of such lease does not terminate earlier than five years after the maturity date of the Mortgage Note; and (6) the Mortgaged Property is located in a jurisdiction in which the use of leasehold estates in transferring ownership in residential properties is a widely accepted practice.

 

(xx)                          Prepayment Penalty.  No Mortgage Loan is subject to a prepayment penalty such that an amount in excess of the unpaid principal balance is due by the Mortgagor if Mortgagor prepays the Mortgage Loan prior to the maturity date of such Mortgage Loan.

 

(yy)                          Predatory Lending Regulations; High Cost Loans.  No Mortgage Loan (i) is classified as High Cost Mortgage Loans; (ii) is subject to Section 226.32 of Regulation Z or any similar state law (relating to high interest rate credit/lending transactions) or (iii) is subject to any law, regulation or rule that (A) imposes liability on a mortgagee or a lender to a mortgagee for upkeep to a Mortgaged Property prior to completion of foreclosure thereon, or (B) imposes liability on a lender to a mortgagee for acts or omissions of the mortgagee or otherwise defines a mortgagee in a manner that would include a lender to a mortgagee.  For the avoidance of doubt, a “higher-priced mortgage loan” as defined under Section 226.35 of Regulation Z shall not be considered a High Cost Mortgage Loan.  No Mortgagor was encouraged or required to select a Mortgage Loan product offered by Seller or the originator which is a higher cost product designed for less creditworthy borrowers, unless at the time of the Mortgage Loan’s origination, such Mortgagor did not qualify taking into account credit history and debt to income ratios for a lower cost credit

 

Sch 1-12

 

product then offered by Seller or originator.  If, at the time of loan application, the Mortgagor qualified for a lower cost credit product then offered by Seller or the originator’s standard mortgage channel (if applicable), Seller or the originator directed the Mortgagor towards such standard mortgage channel, or offered such lower-cost credit product to the Mortgagor.

 

(zz)                            Ohio Stated Income Exclusion.  Each Mortgage Loan with an origination date on or after January 1, 2007 which is secured by Mortgaged Property located in Ohio was originated pursuant to a program which requires verification of the borrower’s income in accordance with “Full and Alternative Documentation” programs as described within the Approved Underwriting Guidelines.

 

(aaa)                   Origination.  No predatory or deceptive lending practices, including, without limitation, the extension of credit without regard to the ability of the Mortgagor to repay and the extension of credit which has no apparent benefit to the Mortgagor, were employed in the origination of the Mortgage Loan.

 

(bbb)                   Single-premium Credit or Life Insurance Policy.  In connection with the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were used to purchase any single premium credit insurance policy (e.g., life, mortgage, disability, accident, unemployment, or health insurance product) or debt cancellation agreement as a condition of obtaining the extension of credit.  No Mortgagor obtained a prepaid single-premium credit insurance policy (e.g., life, mortgage, disability, accident, unemployment, or health insurance product) or debt cancellation agreement in connection with the origination of the Mortgage Loan; No proceeds from any Mortgage Loan were used to purchase single premium credit insurance policies (e.g., life, mortgage, disability, accident, unemployment, or health insurance product) or debt cancellation agreements as part of the origination of, or as a condition to closing, such Mortgage Loan.

 

(ccc)                      Tax Service Contract; Flood Certification Contract.  Each Mortgage Loan is covered by a paid in full, life of loan, tax service contract and a paid in full, life of loan, flood certification contract and each of these contracts is assignable to Buyer.

 

(ddd)                   Qualified Mortgage.  Each Mortgage Loan satisfies the following criteria:  (i) such Mortgage Loan is a Qualified Mortgage; (ii) prior to the origination of such Mortgage Loan, the related originator made a reasonable and good faith determination that the related Mortgagor would have a reasonable ability to repay such Mortgage Loan according to its terms, in accordance with, at a minimum, the eight underwriting factors set forth in 12 CFR 1026.43(c)(2); and (iii) such Mortgage Loan is supported by documentation that evidences compliance with the Ability to Repay Rule and the QM Rule.

 

(eee)                      Ability to Repay Determination.  There is no action, suit or proceeding instituted by or against or, to the knowledge of Seller, threatened against Seller in any federal or state court or before any commission or other regulatory body (federal, state or local, foreign or domestic) that questions or challenges the compliance of any Mortgage Loan (or the related underwriting) with the Ability to Repay Rule or the QM Rule.

 

Sch 1-13

 

(fff)                         Regarding the Mortgagor.  The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such “living trust” is in compliance with Fannie Mae guidelines for such trusts.

 

(ggg)                      Recordation.  Each original Mortgage was recorded and, except for those Mortgage Loans subject to the MERS identification system, all subsequent assignments of the original Mortgage (other than the assignment to Buyer) have been recorded in the appropriate jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of Seller, or is in the process of being recorded.

 

(hhh)                   FICO Scores.  Other than with respect to (i) FHA, VA and RD streamlined Mortgage Loans and (ii) Mortgage Loans where the related Mortgagor is a foreign national, each Mortgage Loan has a non-zero FICO score.

 

(iii)                               Reserved.

 

(jjj)                            Illinois Mortgage Loans.  All Mortgage Loans originated on or after September 1, 2006 secured by property located in Cook County, Illinois are recordable at the time of origination.

 

(kkk)                   Subprime Mortgage Loans.  No Mortgage Loan originated in the state of New York is a “Subprime Home Loan” as defined in New York Banking Law 6-m, effective September 1, 2008.

 

(lll)                               Balloon Mortgage Loans.  No Mortgage Loan is a balloon mortgage loan that has an original stated maturity of less than seven (7) years.

 

(mmm)             Adjustable Rate Mortgage Loans.  Each Mortgage Loan that is an adjustable rate Mortgage Loan and that has a residential loan application date on or after September 13, 2007, complies in all material respects with the Interagency Statement on Subprime Mortgage Lending, 72 FR 37569 (July 10, 2007), regardless of whether the Mortgage Loan’s originator or Seller is subject to such statement as a matter of law.

 

(nnn)                   Agency Mortgage Loans.  Each Mortgage Loan that is subject to a Takeout Commitment with an Agency as the Approved Investor had a principal balance at its origination that did not exceed such Agency’s conforming loan limits as of the Purchase Date.

 

(ooo)                   Nontraditional Mortgage Loan.  Each Mortgage Loan that is a “nontraditional mortgage loan” within the meaning of the Interagency Guidance on Nontraditional Mortgage Product Risks, 71 FR 58609 (October 4, 2006), and that has a residential loan application date on or after September 13, 2007, complies in all material respects with such guidance, regardless of whether the Mortgage Loan’s originator or Seller is subject to such guidance as a matter of law.

 

(ppp)                   Mandatory Arbitration.  No Mortgage Loan is subject to mandatory arbitration.

 

(qqq)                   Reserved.

 

Sch 1-14

 

(rrr)                            Wet Loans.  With respect to each Mortgage Loan that is a Wet Loan, (i) such Mortgage Loan (other than a Mortgage Loan originated in the State of New York) is covered by a duly authorized, executed, delivered and enforceable Closing Protection Letter, and (ii) the Settlement Agent has been instructed in writing by the applicable Seller to hold the related Mortgage Loan documents as agent and bailee for Buyer or Buyer agent and to promptly forward such Mortgage Loan documents to Custodian.

 

(sss)                         Takeout Commitment.  Unless otherwise approved by Buyer, each Purchased Asset is (a) eligible for sale to at least two (2) Approved Investors or (b) covered by a Takeout Commitment (i) that does not exceed the availability under such Takeout Commitment (taking into consideration mortgage loans which have been purchased by the respective Approved Investor under the Takeout Commitment and mortgage loan which Seller has identified to Buyer as covered by such Takeout Commitment); (ii) conforms to the requirements and the specifications set forth in such Takeout Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Approved Investor and (iii) is eligible for sale to and insurance or guaranty by, respectively the applicable Approved Investor and applicable insurer.  Each Takeout Commitment is a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

(ttt)                            Prior Financing.  Other than with respect to a Correspondent Mortgage Loan or as otherwise approved by Buyer, no Mortgage Loan has been subject to any other repurchase agreement or credit facility prior to the initial Purchase Date of such Mortgage Loan.

 

(uuu)                   Borrower Benefit.  Each HARP Mortgage Loan, as of the date of origination, meets the borrower benefit requirements as defined by the Agency.

 

(vvv)                   Co-op Loan:  Valid First Lien.  With respect to each Co-op Loan, the related Mortgage is a valid, enforceable and subsisting first security interest on the related Co-op Shares securing the related Proprietary Lease, subject only to (a) liens of the Co-op Corporation for unpaid assessments representing the Mortgagor’s pro rata share of the Co-op Corporation’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the security interest.  There are no liens against or security interests in the Co-op Shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority equal to or over Seller’s security interest in such Co-op Shares.

 

(www)                   Co-op Loan:  Compliance with Law.  With respect to each Co-op Loan, the related Co-op Corporation that owns title to the related Co-op Project is a “cooperative housing corporation” within the meaning of Section 216 of the Internal Revenue Code, and is in material compliance with applicable federal, state and local laws which, if not complied with, could have a material adverse effect on the Mortgaged Property.

 

Sch 1-15

 

(xxx)                   Co-op Loan:  No Pledge.  With respect to each Co-op Loan, there is no prohibition against pledging the Co-op Shares or assigning the Proprietary Lease.  With respect to each Co-op Loan, (i) the term of the related Proprietary Lease is longer than the term of the Co-op Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Co-op Shares owned by such Mortgagor first to the Co-op Corporation, (iii) there is no prohibition in any Proprietary Lease against pledging the Co-op Shares or assigning the Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement published by Aztech Document Systems, Inc. as of the date hereof or includes provisions which are no less favorable to the lender than those contained in such agreement.

 

(yyy)                   Co-op Loan:  Acceleration of Payment.  With respect to each Co-op Loan, each Assignment of Proprietary Lease contains enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization of the material benefits of the security provided thereby.  The Assignment of Proprietary Lease contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Note in the event the Co-op Unit is transferred or sold without the consent of the holder thereof.

 

Sch 1-16

 

RESPONSIBLE OFFICERS

 

SELLER AUTHORIZATIONS

 

Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

Signature Page to Master Repurchase Agreement

 

 

BUYER AUTHORIZATIONS

 

 

Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Buyer under this Agreement:

 

AUTHORIZED REPRESENTATIVES OF UBS BANK USA

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

Signature Page to Master Repurchase Agreement

 

 

SCHEDULE 3

 

SCHEDULED INDEBTEDNESS

 

Sch 3-1

 

EXHIBIT A

 

RESERVED

 

Exh. A 1

 

EXHIBIT B

 

FORM OF SELLER’S OFFICER’S CERTIFICATE

 

The undersigned,                of AmeriHome Mortgage Company, LLC, a [STATE] limited liability company (the “Seller”), hereby certifies as follows:

 

1.                                      Attached hereto as Exhibit 1 is a copy of the formation documents of Seller, as certified by the Secretary of State of the State of [STATE].

 

2.                                      Neither any amendment to the formation documents of Seller nor any other charter document with respect to Seller has been filed, recorded or executed since          ,     , and no authorization for the filing, recording or execution of any such amendment or other charter document is outstanding.

 

3.                                      Attached hereto as Exhibit 2 is a true, correct and complete copy of the Bylaws of Seller as in effect as of the date hereof and at all times since           ,     .

 

4.                                      Attached hereto as Exhibit 3 is a true, correct and complete copy of resolutions adopted by the Board of Managers of Seller by unanimous written consent on             , 20   (the “Resolutions”).  The Resolutions have not been further amended, modified or rescinded and are in full force and effect in the form adopted, and they are the only resolutions adopted by the Board of Managers of Seller or by any committee of or designated by such Board of Managers relating to the execution and delivery of, and performance of the transactions contemplated by the Master Repurchase Agreement dated as of July 24, 2015 (the “Repurchase Agreement”), between Seller and UBS Bank USA (the “Buyer”).

 

5.                                      The Repurchase Agreement is substantially in the form approved by the Resolutions or pursuant to authority duly granted by the Resolutions.

 

6.                                      The undersigned, as a officers of Seller or as attorney-in-fact, are authorized to and have signed manually the Repurchase Agreement or any other document delivered in connection with the transactions contemplated thereby, were duly elected or appointed, were qualified and acting as such officer or attorney-in-fact at the respective times of the signing and delivery thereof, and were duly authorized to sign such document on behalf of Seller, and the signature of each such person appearing on any such document is the genuine signature of each such person.

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

Exh. B-1

 

IN WITNESS WHEREOF, the undersigned has hereunto executed this Certificate as of the    day of           , 20  .

 

	
 
    	
AmeriHome Mortgage Company,   LLC, as Seller
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Exh. B-2

 

Exhibit 3 to Officer’s Certificate of Seller

 

RESOLUTIONS OF SELLER

 

Action of the [Board of Managers][Managing Members]

 

Without a Meeting Pursuant to

 

Section        of        

 

The undersigned, being the directors of AmeriHome Mortgage Company, LLC, a limited liability company (the “Company”), do hereby consent to the taking of the following action without a meeting and do hereby adopt the following resolutions by written consent pursuant to Section             of              of the State of              :

 

WHEREAS, it is in the best interests of the Company to transfer from time to time to Buyer Mortgage Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Company such Mortgage Loans at a date certain or on demand, against the transfer of funds by Company pursuant to the terms of the Repurchase Agreement (as defined below).

 

NOW, THEREFORE, be it RESOLVED, that the execution, delivery and performance by the Company of the Master Repurchase Agreement (the “Repurchase Agreement”) to be entered into by the Company and UBS Bank USA, as Buyer, substantially in the form of the draft dated July 24, 2015, attached hereto as Exhibit A, are hereby authorized and approved and that the [President] or any [Vice President] (collectively, the “Authorized Officers”) of the Company be and each of them hereby is authorized and directed to execute and deliver the Repurchase Agreement to the Buyer with such changes as the officer executing the same shall approve, his execution and delivery thereof to be conclusive evidence of such approval;

 

RESOLVED, that the Authorized Officers hereby are, and each hereby is, authorized to execute and deliver all such aforementioned agreements on behalf of the Company and to do or cause to be done, in the name and on behalf of the Company, any and all such acts and things, and to execute, deliver and file in the name and on behalf of the Company, any and all such agreements, applications, certificates, instructions, receipts and other documents and instruments, as such Authorized Officer may deem necessary, advisable or appropriate in order to carry out the purposes of the foregoing resolutions.

 

RESOLVED, that the proper officers, agents and counsel of the Company are, and each of such officers, agents and counsel is, hereby authorized for and in the name and on behalf of the Company to take all such further actions and to execute and deliver all such other agreements, instruments and documents, and to make all governmental filings, in the name and on behalf of the Company and such officers are authorized to pay such fees, taxes and expenses, as advisable in order to fully carry out the intent and accomplish the purposes of the resolutions heretofore adopted hereby.

 

Exh. B-3

 

Dated as of:                  , 20

 

Exh. B-4

 

EXHIBIT C

 

FORM OF SERVICER NOTICE

 

[Date]

 

[               ], as Servicer

 

[ADDRESS]

 

Attention:

 

Re:                             Master Repurchase Agreement, dated as of July 24, 2015 (the “Agreement”), between AmeriHome Mortgage Company, LLC (the “Seller”) and UBS Bank USA (the “Buyer”).

 

Ladies and Gentlemen:

 

[                      ] (the “Servicer”) is servicing certain mortgage loans for Seller pursuant to that certain [                 ] (the “Servicing Agreement”) between the Servicer and Seller.  Pursuant to the Agreement, the Servicer is hereby notified that Seller has pledged to Buyer certain mortgage loans which are serviced by Servicer which are subject to a security interest in favor of Buyer.

 

Upon receipt of a notice that an Event of Default has occurred under the Repurchase Agreement (a “Notice of Event of Default”) from Buyer in which Buyer shall identify the mortgage loans which are then pledged to Buyer under the Agreement (the “Subject  Mortgage Loans”), the Servicer shall segregate all amounts collected on account of such Subject Mortgage Loans, hold them in trust for the sole and exclusive benefit of Buyer, and remit such collections in accordance with Buyer’s written instructions.  Following such Notice of Event of Default, Servicer shall follow the instructions of Buyer with respect to the Subject Mortgage Loans, and shall deliver to Buyer any information with respect to the Subject Mortgage Loans reasonably requested by Buyer.

 

Notwithstanding any contrary information which may be delivered to the Servicer by Seller, the Servicer may conclusively rely on any information or Notice of Event of Default delivered by Buyer, and Seller shall indemnify and hold the Servicer harmless for any and all claims asserted against it for any actions taken in good faith by the Servicer in connection with the delivery of such information or Notice of Event of Default.

 

Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed copy to Buyer promptly upon receipt.  Any notices to Buyer should be delivered to the following addresses:  UBS Bank USA, 1285 Avenue of the Americas, New York, NY 10019; Attention:  

 

Exh. D-1

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
AmeriHome Mortgage   Company, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

ACKNOWLEDGED:

 

[                          ],

as Servicer

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
UBS Bank USA,
    	
 
    
	
as Buyer
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exh. D-2

 

EXHIBIT D

 

FORM OF TRADE ASSIGNMENT

 

(“Takeout Investor”)

[Insert Address and notice info]

 

Dear Ladies and Gentlemen:

 

Attached to this Trade Assignment is a correct and complete copy of your confirmation of commitment (the “Commitment”), [insert trade date], to purchase [insert description of Agency MBS] mortgage-backed pass-through securities (“Agency Securities”) at a purchase price of $                from                 on [insert Settlement Date].

 

Pursuant to this Trade Assignment, we assign $       of this Commitment’s full amount to UBS Securities LLC (“UBS”), which assignment shall be effective and shall be fully enforceable by UBS on the Settlement Date.

 

This is to confirm that (i) the form of this assignment conforms to the SIFMA guidelines, (ii) the Commitment is in full force and effect, (iii) the Commitment has been assigned to UBS as security for the obligations of AmeriHome Mortgage Company, LLC, the “Seller” under that certain Master Repurchase Agreement, dated as of July 24, 2015, between Seller and UBS, whose acceptance of such assignment is indicated below, [and] (iv) upon delivery of this trade assignment to you by UBS you will accept Seller’s direction set forth herein to pay UBS for such Agency Securities, [(v) you will accept delivery of such Securities directly from UBS, (vi) UBS is obligated to make delivery of such Agency Securities to you in accordance with the attached Commitment and (vii) you have released Seller from its obligation to deliver the Agency Securities to you under the Commitment.] Payment will be made “delivery versus payment (DVP)” to UBS in immediately available funds.

 

Exh. D-1

 

If you have any questions, please call [SELLER CONTACT] at (   )    -     immediately or contact him by fax at (   )    -    .

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Accepted and Agreed to:

 

UBS SECURITIES LLC

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exh. D-2

 

EXHIBIT E

 

FORM OF POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS, that AmeriHome Mortgage Company, LLC (“Seller”) hereby irrevocably constitutes and appoints UBS Bank USA (“Buyer”) and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Buyer’s discretion:

 

(a)                                 in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Buyer under the Master Repurchase Agreement (as amended, restated or modified) dated July 24, 2015 (the “Assets”) and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;

 

(b)                                 to pay or discharge taxes and liens levied or placed on or threatened against the Assets;

 

(c)                                  (i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against Seller with respect to any Assets; (vi) to settle, compromise or adjust any suit, action or proceeding described in clause (v) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; and (vii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and Seller’s expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Assets and Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do;

 

(d)                                 for the purpose of carrying out the transfer of servicing with respect to the Assets from Seller to a successor servicer appointed by Buyer in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Buyer in its sole discretion;

 

Exh. E-1

 

(e)                                  for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.

 

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

 

Seller also authorizes Buyer, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.

 

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

 

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS OWN BEHALF AND ON BEHALF OF BUYER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK.  SIGNATURES FOLLOW.]

 

Exh. E-2

 

IN WITNESS WHEREOF Seller has caused this power of attorney to be executed and Seller’s seal to be affixed this     day of        , 20  .

 

	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC
    
	
 
    	
(Seller)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to the Power of Attorney

 

 

Acknowledgment of Execution by Seller (Principal):

 

	
STATE OF
    	
)
    	
 
    
	
 
    	
)
    	
ss.:
    
	
COUNTY OF
    	
)
    	
 
    

 

 

On the     day of        , 20    before me, the undersigned, a Notary Public in and for said State, personally appeared                                     , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity as                           for AmeriHome Mortgage Company, LLC and that by his signature on the instrument, the person upon behalf of which the individual acted, executed the instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.

 

 

	
 
    	
 
    
	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
My Commission expires
    	
 
    

 

Signature Page to the Power of Attorney

 

 

EXHIBIT F

 

FORM OF TAX COMPLIANCE CERTIFICATE

 

Reference is hereby made to the Master Repurchase Agreement dated as of July 24, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), between AmeriHome Mortgage Company, LLC (the “Seller”) and UBS Bank USA (the “Buyer”).  Pursuant to the provisions of Section 7 of the Agreement, the undersigned hereby certifies that:

 

1.                                      It is a     natural individual person,      treated as a corporation for U.S. federal income tax purposes,      disregarded for U.S. federal income tax purposes (in which case a copy of this Tax Compliance Certificate is attached in respect of its sole beneficial owner), or      treated as a partnership for U.S. federal income tax purposes (one must be checked).

 

2.                                      It is the beneficial owner of amounts received pursuant to the Agreement.

 

3.                                      It is not a bank, as such term is used in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), or the Agreement is not, with respect to the undersigned, a loan agreement entered into in the ordinary course of its trade or business, within the meaning of such section.

 

4.                                      It is not a 10-percent shareholder of Seller within the meaning of section 871(h)(3) or 881(c)(3)(B) of the Code.

 

5.                                      It is not a controlled foreign corporation that is related to Seller within the meaning of section 881(c)(3)(C) of the Code.

 

6.                                      Amounts paid to it under the Agreement and the other Program Documents (as defined in the Agreement) are not effectively connected with its conduct of a trade or business in the United States.

 

Dated:

 

	
 
    	
[NAME OF UNDERSIGNED]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Exp. F-1

 

EXHIBIT G

 

FORM OF TEMPORARY INCREASE REQUEST

 

UBS Bank USA

1285 Avenue of the Americas

New York, NY 10019

Attention:  Gary Timmerman

Telephone:  (212) 649-8156

Facsimile:  (212) 713-9640

Email:  Gary.Timmerman@ubs.com

 

Re:                             Master Repurchase Agreement, dated as of July 24, 2015 (the “Agreement”), between AmeriHome Mortgage Company, LLC (the “Seller”) and UBS Bank USA (the “Buyer”).

 

Ladies and Gentlemen:

 

In accordance with Section 3(f) of the Repurchase Agreement, Buyer hereby consents to a Temporary Increase of the Maximum Aggregate Purchase Price as further set forth below:

 

Amount of Temporary Increase:  $                  .

 

Temporary Maximum Aggregate Purchase Price:  $                  .

 

Effective date:  [      ]

 

Expiration date:  [      ]

 

On and after the effective date indicated above and until the expiration date indicated above, the Maximum Aggregate Purchase Price shall equal the Temporary Maximum Aggregate Purchase Price indicated above for all purposes of the Repurchase Agreement and all calculations and provisions relating to the Maximum Aggregate Purchase Price shall refer to the Temporary Maximum Aggregate Purchase Price including without limitation, Concentration Limits.

 

Unless otherwise terminated pursuant to the Repurchase Agreement, this Temporary Increase shall terminate on the expiration date indicated above.  Upon the termination of this Temporary Increase, Seller shall repurchase Purchased Assets such that (i) the aggregate outstanding Purchase Price of all Transactions does not exceed the Maximum Aggregate Purchase Price and (ii) the applicable portion of the aggregate outstanding Purchase Price of all Transactions does not exceed any Concentration Limit.

 

All terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Repurchase Agreement.

 

Exh. G-1

 

	
 
    	
AMERIHOME MORTGAGE   COMPANY, LLC,

as Seller
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Agreed and Consented by:

 

	
 
    	
UBS BANK USA, as Buyer
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

Exh. G-2

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