Document:

Exhibit 10.4

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(this “Agreement”) is made as of May 5,
2009, by and between Regal Entertainment Group, a Delaware corporation (the “Company”), and David H. Ownby (“Executive”).

 

RECITALS

 

In order to induce Executive
to serve as Executive Vice President and Chief Financial Officer of the
Company, the Company desires to provide Executive with compensation and other
benefits on the terms and conditions set forth in this Agreement.

 

Executive is willing to
accept such employment and perform services for the Company as of the Effective
Date (as defined below), on the terms and conditions hereinafter set forth.

 

It is therefore hereby
agreed by and between the parties as follows:

 

1.             Employment.

 

1.1           Position.  Subject to the terms and conditions of this Agreement,
the Company agrees to employ Executive during the Term (as defined herein) as
its Executive Vice President and Chief Financial Officer. In his capacity as
Executive Vice President and Chief Financial Officer of the Company, Executive
shall have the powers, responsibilities and authorities of chief financial
officers of corporations of the size, type and nature of the Company, as it
exists from time to time, as are assigned by the Chief Executive Officer consistent
with Executive’s position. At the request of the Company, Executive will serve
as an officer and/or director of any of the Company’s other subsidiaries for no
additional compensation.

 

1.2           Duties.  Subject to the terms and conditions of this Agreement,
Executive hereby agrees to be employed as Executive Vice President and Chief
Financial Officer of the Company and agrees to devote such working time and
efforts (except for permitted vacation periods and reasonable periods of
illness and other incapacity), to the best of his ability, experience and
talent, to the performance of services, duties and responsibilities in
connection therewith so that such performance shall be his primary business
activity. Executive shall perform such duties and exercise such powers with
respect to the activities of the Company, commensurate with his position, as
Executive Vice President and Chief Financial Officer of the Company, as the
Chief Executive Officer shall from time to time reasonably delegate to him.

 

1.3           Other Service.  Nothing in this Agreement shall preclude Executive
from serving on boards of directors of other companies or trade organizations
and participating in charitable, community or religious activities that do not
substantially interfere with his duties and responsibilities hereunder or
conflict with the interest of the Company.

 

1.4           Reporting. 
Executive shall report directly to (a) Amy E. Miles, Chief
Executive Officer of the Company or (b) if Ms. Miles is no longer
employed by the Company, the then existing Chief Executive Officer of the
Company.

 

2.             Term.

 

2.1           Term of Employment.  Executive’s term of employment under this Agreement
shall commence as of the Effective Date (as defined below), and, subject to the
terms hereof, shall terminate on the earlier of (i) the third anniversary
of the Effective Date, or (ii) termination of Executive’s employment
pursuant to this Agreement (the “Term”);
provided, however, that any
termination of employment by Executive (other than for death or Permanent
Disability) or by the Company may only be made upon 90 days prior written
notice to the other party hereto. Executive shall resign from any and all
positions, including board memberships, held by him with the Company or any
subsidiary of the Company upon any termination of employment.

 

 

2.2           Extensions.  On each anniversary of the date hereof, commencing in
2010, one year shall be added to the termination date specified in Section 2.1(i) hereof,
so that as of each anniversary of the date hereof the remaining Term of Executive’s
employment as determined under Section 2.1(i) hereof shall be three (3) years.

 

2.3           Effective Date.  This Agreement shall only be effective and enforceable
by the Company or Executive as of June 30, 2009 (the “Effective Date”).

 

3.             Compensation.

 

3.1           Salary.  The Company shall pay Executive a base salary (“Base Salary”) at the rate of $350,000 per
annum commencing on the beginning of Executive’s term of employment hereunder.
Base Salary shall be payable in accordance with the ordinary payroll practices
of the Company. The Compensation Committee of the Board of Directors of the
Company will review Executive’s salary at least annually and may increase (but
not reduce) Executive’s Base Salary in its sole discretion. Once increased such
Base Salary shall not be reduced, and, as so increased, shall constitute “Base
Salary” hereunder.

 

3.2           Annual Bonus.  In addition to his Base Salary, Executive shall,
commencing with the 2009 fiscal year and continuing each fiscal year during the
Term hereafter, be afforded a reasonable opportunity to earn an annual cash
bonus (the “Bonus”).  The Company shall be deemed to have provided
Executive with such opportunity by establishing one or more reasonable annual
performance goals for the Company (the “Annual
Performance Goals”) under an annual executive incentive plan (a “Bonus Plan”) designed to pay a bonus should
the Company meet or exceed such goals. 
In determining Executive’s Bonus, Executive’s target Bonus shall be at
least 75% of Base Salary (the “Target Bonus”).  If in any year the Annual Performance Goals
for the Company are exceeded by a material amount, the Company shall award
Executive a “stretch” Bonus of up to an additional 37.5% of Base Salary (for a
total Bonus of up to 112.5% of Base Salary) as determined by the Compensation
Committee of the Board.  For 2009,  Executive’s Bonus shall be calculated in
accordance with the Company’s 2009 Bonus Plan as adopted by the Board prior to
the date hereof.  After 2009, the
Compensation Committee of the Board, after consultation with management, will
in the last quarter of each year establish reasonable eligibility requirements
and Annual Performance Goals for the Bonus Plan for the next year based on the
actual and projected performance of the Company. Executive shall be deemed to
have earned an annual Bonus under the Company’s Bonus Plan so long as Executive
meets the Annual Performance Goals established thereunder and is employed by
the Company as of the last day of the Company’s fiscal year.

 

4.             Employee Benefits.

 

4.1           Employee Benefit Programs, Plans and Practices.  The Company shall during the Term provide Executive
with coverage under all employee pension and welfare benefit programs, plans
and practices (to the extent permitted under any employee benefit plan) in
accordance with the terms thereof, which the Company generally makes available
to its senior executives.

 

4.2           Vacation.  While employed hereunder, Executive shall be entitled
to no less than 20 business days paid vacation in each calendar year, which
shall be taken at such times as are consistent with Executive’s
responsibilities hereunder.

 

5.             Expenses.  Executive is authorized to incur reasonable expenses
in carrying out his duties and responsibilities under this Agreement. The
Company will reimburse Executive for such expenses upon presentation by
Executive from time to time of appropriately itemized and approved (consistent
with the Company’s policy) accounts of such expenditures.

 

6.             Termination of Employment.

 

6.1           Termination Without Cause.  Except as provided in Section 6.3, if Executive’s
employment is terminated by the Company (other than for Permanent Disability,
death or Cause), 

 

 

Executive shall receive such payments, if any, under
applicable plans or programs, including but not limited to those referred to in
Section 4.1 hereof, to which he is entitled pursuant to the terms of such
plans or programs, and any unpaid payments of Base Salary previously earned,
any unpaid Bonus earned or awarded for prior periods, accrued vacation and
expense incurred for which Executive is entitled to reimbursement hereunder. If
Executive is terminated under this Section 6.1, Executive shall also be
entitled to receive:

 

(a)  an amount in
lieu of any other cash compensation beyond that provided in the immediately preceding
sentence, which amount shall be equal to the sum of:

 

(i)  the actual
bonus, if any, he would have received in respect of the fiscal year in which
his termination occurs, prorated by a fraction, the numerator of which is the
number of days in such fiscal year prior to the date of Executive’s termination
and the denominator of which is 365, payable at the same time as bonuses are
paid to other executives;

 

(ii)  two times
Executive’s annual Base Salary; plus one times Executive’s Target Bonus; payable
in a lump sum within 30 days following such termination of employment; provided
that if such termination occurs within 90 days prior to calendar year end,
amount shall be payable on January 1 of the year following the date of
Executive’s termination; and

 

(b)  continued
coverage for a 24-month period under any employee medical, health and life
insurance plans in accordance with the respective terms thereof applicable to
active employees (other than the requirement of continued employment);
provided, however, that payments and benefits due hereunder shall be reduced by
any amounts owed by Executive to the Company.

 

In no event shall
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Executive under any of the provisions
of this Agreement and such amounts shall not be reduced whether or not
Executive obtains other employment.

 

6.2           Termination For Good Reason.  Except as provided in Section 6.3, Executive may
resign for Good Reason (as defined below) if Executive provides written
notification to the Company of the existence of a condition constituting Good
Reason (“Notification”) within
ninety (90) days of the initial existence of such condition (“Existence Date”) and the resignation occurs
within two (2) years of the Existence Date.  If Executive resigns for Good Reason,
Executive shall receive such payments, if any, under applicable plans or
programs, including but not limited to those referred to in Section 4.1
hereof, to which he is entitled pursuant to the terms of such plans or
programs, and any unpaid payments of Base Salary previously earned, any unpaid
Bonus earned or awarded for prior periods, accrued vacation and expense
incurred for which Executive is entitled to reimbursement hereunder. If
Executive resigns under this Section 6.2, Executive shall also be entitled
to receive:

 

(a)  an amount in
lieu of any other cash compensation beyond that provided in the immediately
preceding sentence, which amount shall be equal to the sum of:

 

(i)  the actual
bonus, if any, he would have received in respect of the fiscal year in which
his resignation occurs, prorated by a fraction, the numerator of which is the
number of days in such fiscal year prior to the date of Executive’s resignation
and the denominator of which is 365, payable at the same time as bonuses are
paid to other executives;

 

(ii)  two times
Executive’s annual Base Salary; plus one times Executive’s Target Bonus;
payable in a lump sum within 30 days following such resignation of employment;
provided that if such resignation occurs within 90 days prior to calendar year
end, amount shall be payable on January 1 of the year following the date
of Executive’s resignation; and

 

(b)  continued coverage for a 24-month period
under any employee medical, health and life insurance plans in accordance with
the respective terms thereof applicable to active employees (other than 

 

 

the requirement of continued employment); provided,
however, that payments and benefits due hereunder shall be reduced by any
amounts owed by Executive to the Company.

 

Good Reason shall be defined as one or more of the
following conditions arising without the consent of Executive and which has not
been remedied by the Company within thirty (30) days after receipt of the
Notification:  (i) a material
reduction in Executive’s Base Salary or the establishment of or any amendment
to the annual cash bonus plan which would materially impair the ability of
Executive to receive the Target Bonus (other than the establishment of
reasonable EBITDA or other reasonable performance targets to be set annually in
good faith by the Board), (ii) a material diminution of Executive’s
titles, offices, positions or authority, excluding for this purpose an action
not taken in bad faith; or the assignment to Executive of any duties
inconsistent with Executive’s position (including status or reporting
requirements), authority, or material responsibilities, or the removal of
Executive’s authority or material responsibilities, excluding for this purpose
an action not taken in bad faith, (iii) a transfer of Executive’s primary
workplace by more than fifty (50) miles from the current workplace, (iv) a
material breach of this Agreement by the Company(v) Executive is not the
Executive Vice President and Chief Financial Officer of the Company.

 

6.3           Termination During a
Change of Control.  Notwithstanding Section 6.1 or 6.2,
if within three months prior to or one year after a Change of Control (as
defined below), Executive’s employment is terminated by the Company (other than
for Permanent Disability, death or Cause) or Executive resigns for Good Reason,
Executive shall receive such payments, if any, under applicable plans or
programs, including but not limited to those referred to in Section 4.1
hereof, to which he is entitled pursuant to the terms of such plans or
programs, and any unpaid payments of Base Salary previously earned, any unpaid
Bonus earned or awarded for prior periods, accrued vacation and expense
incurred for which Executive is entitled to reimbursement hereunder. If
Executive is terminated or resigns under this Section 6.3, Executive shall
also be entitled to receive:

 

(a)  an amount in
lieu of any other cash compensation beyond that provided in the immediately
preceding sentence, which amount shall be equal to the sum of:

 

(i)  the actual
bonus, if any, he would have received in respect of the fiscal year in which
his termination or resignation occurs, prorated by a fraction, the numerator of
which is the number of days in such fiscal year prior to the date of Executive’s
termination or resignation and the denominator of which is 365, payable at the
same time as bonuses are paid to other executives; and

 

(ii)  two times
Executive’s annual Base Salary; plus one and one half times Executive’s Target
Bonus payable in a lump sum within 30 days following such termination or
resignation of employment; provided that if such termination or resignation
occurs within 90 days prior to calendar year end, amount shall be payable on January 1
of the year following the date of Executive’s termination or resignation; and

 

(b)  continued
coverage for a 30-month period under any employee medical, health and life
insurance plans in accordance with the respective terms thereof applicable to
active employees (other than the requirement of continued employment);
provided, however, that payments and benefits due hereunder shall be reduced by
any amounts owed by Executive to the Company.

 

A Change of Control
shall be deemed to have occurred upon both of the following occurring: (A) any
individual, entity, or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than Anschutz
Company, The Anschutz Corporation, or any entity or organization controlled by
Philip F. Anschutz (collectively, the “Anschutz
Entities”), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) acquires 20% or more of the combined voting
power of the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (“Voting
Power”); and (B) such beneficial ownership (as so defined) by
such individual, entity or group of more than 20% of the Voting Power then
exceeds the beneficial ownership (as so defined) by the Anschutz Entities of
the Voting Power.

 

 

6.4           Permanent Disability.  If Executive is unable to engage in the activities
required by Executive’s job by reason of any medically determined physical or
mental impairment which has lasted or can be expected to last for continuous
period of not less than six (6) consecutive months (“Permanent Disability”), the Company or
Executive may terminate Executive’s employment on written notice thereof, and
Executive shall receive or commence receiving, as soon as practicable:

 

(i)  the actual
bonus, if any, he would have received in respect of the fiscal year in which
his termination occurs, prorated by a fraction, the numerator of which is the
number of days of the fiscal year until termination and the denominator of
which is 365, payable at the same time as bonuses are paid to other executives;
and

 

(ii)  accrued but
unpaid Base Salary and such payments under applicable plans or programs,
including but not limited to those referred to in Sections 4 and 5 hereof, to
which he is entitled pursuant to the terms of such plans or programs.

 

6.5           Death.  In the event of Executive’s death during the Term,
Executive’s estate or designated beneficiaries shall receive or commence
receiving, as soon as practicable:

 

(i)  the actual
bonus, if any, he would have received in respect of the fiscal year in which
his death occurs, prorated by a fraction, the numerator of which is the number
of days of the fiscal year until his death and the denominator of which is 365,
payable at the same time as bonuses are paid to other executives; and

 

(ii)  accrued but
unpaid Base Salary and such payments under applicable plans or programs,
including but not limited to those referred to in Sections 4 and 5 hereof, to
which Executive’s estate or designated beneficiaries are entitled pursuant to
the terms of such plans or programs.

 

6.6           Termination for Cause:
Resignation by Executive.

 

(a)  The Company shall have the right to
terminate the employment of Executive for Cause. In the event that Executive’s
employment is terminated by the Company for Cause or by Executive for any
reason (other than by Executive for Good Reason or as a result of Executive’s
Permanent Disability or death) during the Term, Executive shall not be entitled
to the payment of any compensation otherwise included under this Agreement.
After the termination of Executive’s employment under this Section 6.6,
the obligations of the Company under this Agreement to make any further
payments, or provide any benefits specified herein, to Executive shall
thereupon cease and terminate.

 

(b)  As used herein, the term “Cause” shall be
limited to (i) any willful breach of any material written policy of the
Company that results in material and demonstrable liability or loss to the
Company; (ii) the engaging by Executive in conduct involving moral
turpitude that causes material and demonstrable injury, monetarily or
otherwise, to the Company, including, but not limited to, misappropriation or
conversion of assets of the Company (other than immaterial assets); (iii) conviction
of or entry of a plea of nolo contendere to a felony; or (iv) a material
breach of this Agreement by engaging in action in violation of the restrictive
covenants in this Agreement. No act or failure to act by Executive shall be
deemed “willful” if done, or omitted to be done, by him in good faith and with
the reasonable belief that his action or omission was in the best interest of
the Company.

 

7.             Indemnification.  To the fullest extent permitted by the indemnification
provisions of the articles of incorporation and bylaws of the Company in effect
as of the date of this Agreement and the indemnification provisions of the
corporation statute of the jurisdiction of the Company’s incorporation in
effect from time to time (collectively, the “Indemnification
Provisions”), and in each case subject to the conditions thereof,
the Company shall (i) indemnify Executive, as a director and officer of
the Company or a subsidiary of the Company or a trustee or fiduciary of an employee
benefit plan of the Company or a subsidiary of the Company, or, if Executive
shall be serving in such capacity at the Company’s written 

 

 

request, as a director or officer of any other
corporation (other than a subsidiary of the Company) or as a trustee or
fiduciary of an employee benefit plan not sponsored by the Company or a
subsidiary of the Company, against all liabilities and reasonable expenses that
may be incurred by Executive in any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal or administrative, or investigative
and whether formal or informal, because Executive is or was a director or
officer of the Company, a director or officer of such other corporation or a
trustee or fiduciary of such employee benefit plan, and against which Executive
may be indemnified by the Company, and (ii) pay for or reimburse the
reasonable expenses incurred by Executive in the defense of any proceeding to
which Executive is a party because Executive is or was a director or officer of
the Company, a director or officer of such other corporation or a trustee or
fiduciary of such employee benefit plan. The rights of Executive under the
Indemnification Provisions shall survive the termination of the employment of
Executive by the Company.

 

8.             Notices.  All notices or communications hereunder shall be in
writing, addressed as follows:

 

To the Company:

 

Regal Entertainment Group

7132 Regal Lane 

Knoxville, TN 37918

Attn: Peter B. Brandow, Esq., General Counsel

 

To Executive:

 

Mr. David H. Ownby 

                                          

                  ,
TN
               

 

Any such notice or
communication shall be delivered by hand or by courier or sent certified or
registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in a notice duly
delivered as described above), and the third business day after the actual date
of mailing shall constitute the time at which notice was given.

 

9.             Separability; Legal Fees.  If any provision of this Agreement shall be declared
to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. The non-prevailing party shall bear the costs
of any legal fees and other fees and expenses which may be incurred by the
prevailing party in respect of enforcing its respective rights under this
Agreement.

 

10.           Assignment.  This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights or
obligations hereunder shall be assignable or otherwise subject to hypothecation
by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this
Agreement to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or businesses of the Company, if such
successor expressly agrees to assume the obligations of the Company hereunder.

 

11.           Amendment.  This Agreement may only be amended by written
agreement of the parties hereto.

 

12.           Nondisclosure of
Confidential Information; Non-Competition.

 

(a)  Executive shall not, without the prior
written consent of the Company, use, divulge, disclose or make accessible to
any other person, firm, partnership, corporation or other entity any
Confidential Information pertaining to the business of the Company or any of
its affiliates, except (i) while employed by the Company, in the business
of and for the benefit of the Company, or (ii) as required by law. For 

 

 

purposes of this Section 12(a), “Confidential
Information” shall mean non-public information concerning the financial data,
strategic business plans, product development (or other proprietary product
data), customer lists, marketing, acquisition and divestiture plans and other
non-public, proprietary and confidential information of the Company, its
subsidiaries, its theater affiliates (the “Restricted
Group”) or suppliers (including, without limitation, any motion
picture distributor or exhibitor) or vendors, that, in any case, is not
otherwise available to the public (other than by Executive’s breach of the
terms hereof).

 

(b)  During the
period of his employment hereunder and for one year thereafter (except in the
case where Executive terminates his employment with the Company for the Good
Reason event described in clause (v) of the definition of “Good Reason”),
Executive agrees that, without the prior written consent of the Company, (A) he
will not, directly or indirectly, either as principal, manager, agent,
consultant, officer, stockholder, partner, investor, lender or employee or in
any other capacity, carry on, be engaged in or have any financial interest in,
any business in Competition (as defined in Section 12(c)) with the
business of the Restricted Group and (B) he shall not, on his own behalf
or on behalf of any person, firm or company, directly or indirectly, solicit or
hire for the benefit of anyone, other than the Restricted Group, any person who
is, or was at any time during the six (6) months immediately preceding the
time of the solicitation or hiring by Executive employed by the Restricted
Group (other than Executive’s secretary or other administrative employee who
worked directly for him).

 

(c)  For purposes of
this Section 12, a business shall be deemed to be in “Competition” with
the Restricted Group if it operates any first-run movie theater with a minimum
of six (6) screens within ten (10) miles of any first-run movie
theater with a minimum of six (6) screens operated by a member of the
Restricted Group. Nothing in this Section 12 shall be construed so as to
preclude Executive from investing in any publicly or privately held company,
provided Executive’s beneficial ownership of any class of such company’s
securities does not exceed 1% of the outstanding securities of such class.

 

(d)  Executive and
the Company agree that this covenant not to compete is a reasonable covenant
under the circumstances, and further agree that if in the opinion of any court
of competent jurisdiction such restraint is not reasonable in any respect, such
court shall have the right, power and authority to excise or modify such
provision or provisions of this covenant as to the court shall appear not
reasonable and to enforce the remainder of the covenant as so amended.
Executive agrees that any breach of the covenants contained in this Section 12
would irreparably injure the Company. Accordingly, Executive agrees that the
Company may, in addition to pursuing any other remedies it may have in law or
in equity, obtain an injunction against Executive from any court having
jurisdiction over the matter restraining any further violation of this
Agreement by Executive and cease making any payments otherwise required by this
Agreement; provided, however, that in the event a court of competent
jurisdiction, which recognizes the validity of the provisions of this Section 12,
finds Executive not to be in violation of the provisions of this Section 12,
then the Company shall pay to Executive, in a lump sum, within ten days of such
determination, all amounts that would have been payable to Executive hereunder
through the date of such determination and continue making any other payments
due with respect to periods of time subsequent to such determination in
accordance with the provisions of this Agreement.

 

13.           Beneficiaries; References.  Executive shall be entitled to select (and change, to
the extent permitted under any applicable law) a beneficiary or beneficiaries
to receive any compensation or benefit payable hereunder following Executive’s
death, and may change such election, in either case by giving the Company
written notice thereof. In the event of Executive’s death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or
other legal representative, and the Company shall pay amounts payable under
this Agreement, unless otherwise provided herein, in accordance with the terms
of this Agreement, to Executive’s personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees or estate, as the case
may be. Any reference to the masculine gender in this Agreement shall include,
where appropriate, the feminine.

 

14.           Survival.  The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 14 are in addition to the survivorship
provisions of any other section of this Agreement.

 

 

15.           Governing Law.  This Agreement shall be construed, interpreted and
governed in accordance with the laws of the state of Tennessee, without
reference to rules relating to conflicts of law.

 

16.           Effect on Prior Agreements.  Except for amendments to this Agreement, this
Agreement contains the entire understanding between the parties hereto and
supersedes in all respects any prior or other agreement or understanding
between the Company or any affiliate of the Company and Executive.

 

17.           Withholding.  The Company shall be entitled to withhold all applicable
tax withholdings, FICA, FUTA and all other required withholdings of the Company
from any and all payments made under any provision of this Agreement.

 

18.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.

 

*    *    *   
*

 

[Signature Page Follows]

 

 

                IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth in the first paragraph.

 

	
   

  	
  REGAL
  ENTERTAINMENT GROUP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael L. Campbell

  
	
   

  	
  Name:

  	
  Michael L. Campbell

  
	
   

  	
  Title:

  	
  Chief Executive Officer
  and 

  
	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/ David H. Ownby

  
	
   

  	
  David H. OwnbyExhibit 10.1

 

EARLY PURCHASE PROGRAM

ADDENDUM TO LOAN PURCHASE AGREEMENT

 

This Early Purchase
Program Addendum to Loan Purchase Agreement (the “Addendum”) is made and
entered into as of May 1, 2009 by and between Bank of America, N.A. (“Bank
of America”) and Home Loan Center, Inc. (“Seller”).  This Addendum supplements that certain Loan
Purchase Agreement dated April 16, 2002 
by and between Bank of America and Seller (including any and all
Commitments, Amendments, Addenda, and Assignments related thereto,
collectively, the “Loan Purchase Agreement”). 
All capitalized terms used in this Addendum and not otherwise defined
herein shall have the same meanings as set forth in the Loan Purchase Agreement
and/or the Bank of America Correspondent Lending Seller’s Guide (the “Guide”),
as applicable.

 

RECITALS

 

A.                                   Pursuant
to the Loan Purchase Agreement, Bank of America may, from time to time,
purchase mortgage loans from Seller subject to the terms and conditions set
forth therein.

 

B.                                     Pursuant
to that certain Master Repurchase Agreement (the “Repurchase Agreement”) dated May 1,
2009 by and between Bank of America and Seller, Bank of America may, from time
to time, purchase mortgage loans from Seller subject to the terms and
conditions set forth therein (such loans, the “Repurchase Loans”).

 

C.                                     Bank
of America and Seller now desire to supplement the Loan Purchase Agreement to
allow for the early purchase and sale of certain EPP Loans (as defined below),
including certain of the Repurchase Loans, prior to delivery of certain
mortgage loan documents.  The early
purchase and sale of such EPP Loans hereunder shall be referred to herein as
the “Early Purchase Program.”

 

In consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank of America and Seller hereby
agree as follows:

 

1.                                       Eligible Loans.  Seller may submit to Bank of America for
purchase under the Early Purchase Program all mortgage loan products and/or mortgage
loan types as set forth in, and subject to any additional requirements of, Exhibit A
(such mortgage loan products and mortgage loan types, “EPP Loans”).  Further, for purposes of this Addendum,
certain of the Repurchase Loans, as approved by Bank of America, shall be
deemed EPP Loans subject to the terms and conditions hereof.

 

2.                                       Procedures for Purchase of EPP Loans.  With respect to each EPP Loan that Seller
desires to sell to Bank of America under the Early Purchase Program, Seller
shall initiate a sale and purchase hereunder by (i) delivering to Bank of
America an electronic collateral data record in a format acceptable to Bank of
America that includes all information required by Bank of America with respect
to the EPP Loan (each, a “Collateral Data Record”), (ii) delivering to
Bank of America or its designee the applicable collateral documents (as set
forth in Exhibit D, the “Collateral Documents”) and (iii) commit
the loan to Bank of America as evidenced by a Bank of America commitment number
applicable to the respective EPP Loan. 
It shall be the responsibility of Seller to notify Bank of America of
any loan, including any Repurchase Loan that Seller intends to offer to sell to
Bank of America under the Early Purchase Program, including providing Bank of
America with a schedule of any such loans, if necessary.  Seller shall deliver the Collateral Data
Record and the Collateral Documents to Bank of America no later than 5:00 p.m.
PST on the date prior to the Purchase Date (as defined below), and shall submit
any revisions to such Collateral Data Record no later than 12:00 p.m. PST
on the Purchase Date.  In the event that
Bank of America determines that an EPP Loan is eligible for purchase and
otherwise meets the 

 

1

 

requirements of this
Addendum, the Loan Purchase Agreement and the Guide (collectively, the “Program
Agreements”), which such determination shall be made by Bank of America in its
sole and reasonable discretion, Bank of America shall purchase such EPP Loan on
a date to be agreed upon by Bank of America and Seller or, if the EPP Loan has
not yet closed, on the closing date of such EPP Loan (either, the “Purchase
Date”).  Seller expressly understands and
agrees that the information required in the Collateral Data Record and the
method for delivery of the Collateral Data Record to Bank of America may be
changed from time to time by Bank of America in its sole discretion.

 

3.                                       Calculation of the Purchase Price and Fees.

 

(a)                                  Initial
Purchase Price.  As consideration for
each EPP Loan to be purchased hereunder, Bank of America shall pay to Seller,
on or before the Purchase Date, a portion of the estimated Final Purchase Price
(as defined below) (such portion of the estimated Final Purchase Price, the “Initial
Purchase Price”).  The Initial Purchase
Price shall be equal to the lesser of (A) the product of the unpaid
principal balance of the EPP Loan multiplied by the lesser of (i) the
Initial Purchase Price Percentage (as defined below), (ii) par, or (iii) the
estimated Final Purchase Price Percentage (as defined below) or (B) the
product of the unpaid principal balance of the EPP Loan multiplied by ninety
eight percent (98%) of the estimated Final Purchase Price Percentage of the EPP
Loan.  Bank of America shall pay the
Initial Purchase Price to Seller in accordance with the instructions set forth
in Exhibit C.  It is
understood and agreed that the Initial Purchase Price, being a portion of the
estimated Final Purchase Price, includes a holdback amount to account for Bank
of America’s post purchase review and confirmation that the EPP Loan fully
complies with Bank of America’s requirements and may include as a holdback
certain other normal and customary adjustments, fees and/or discounts made by
or owed to Bank of America with respect to the EPP Loan under the Program
Agreements.

 

(b)                                 Initial
Purchase Price Percentage.  The
Initial Purchase Price Percentage shall be that percentage as set forth on Exhibit A
or as may be adjusted by Bank of America hereafter in accordance with this
Addendum.  In addition to any other
remedies afforded Bank of America, Bank of America may reduce the Initial
Purchase Price Percentage in the event of Seller’s breach of its obligations
under the Program Agreements.  Further,
Bank of America may, from time to time, reduce the Initial Purchase Price
Percentage to account for any changes in Seller’s financial condition and/or
changes in general market conditions, which, in either case, Bank of America
determines are material changes.

 

(c)                                  Recalculation
of Initial Purchase Price During Review Period.  If, at any time during the Review Period (as
defined below), (i) Bank of America reasonably determines that the loan
characteristics of an EPP Loan are different than those originally represented
by Seller and Bank of America reduces the Final Purchase Price Percentage for
such EPP Loan, (ii) the Final 
Purchase Price Percentage for any EPP Loan contained in any Assignment
of Trade or Commitment applicable to such EPP Loan is reduced as permitted
therein or (iii) any Assignment of Trade or Commitment applicable to any
EPP Loan is cancelled as permitted therein and a new Assignment of Trade or
Commitment is entered into by Bank of America and Seller with respect to such
EPP Loan and the Final  Purchase Price
Percentage for such EPP Loan is reduced in the new Assignment of Trade or
Commitment, notwithstanding anything contained herein to the contrary, Bank of
America shall have the right to recalculate the Initial Purchase Price paid for
the related EPP Loan pursuant to subsection (a) above to account for any
such reductions.  Further, if an
Assignment of Trade or Commitment is cancelled during the Review Period and a
new Assignment of Trade or Commitment is not entered into by Bank of America
and Seller with respect to any EPP Loan, Bank of America shall have the right
to determine the Final Purchase Price Percentage of the EPP Loan and
recalculate the Initial Purchase Price pursuant to subsection (a) above
based on its determination of the Final 
Purchase Price Percentage of the EPP Loan.  In determining the Final Purchase Price 

 

2

 

Percentage of any EPP
Loan as permitted in the foregoing sentence, Bank of America shall base its
determination of the Final Purchase Price Percentage on the current market
value of the EPP Loan and use reasonable industry standards to determine the
current market value of the EPP Loan and shall provide Seller with at least one
(1) Business Day prior notice of any such determination of the Final
Purchase Price Percentage.

 

If any recalculated
Initial Purchase Price for any EPP Loan as permitted herein is less than the
original Initial Purchase Price paid by Bank of America to Seller for such EPP
Loan, Seller shall, at Bank of America’s sole option, immediately refund to
Bank of America the difference between the original Initial Purchase Price and
the recalculated Initial Purchase Price. 
Notwithstanding the foregoing, Bank of America shall be entitled to
deduct from the Over/Under Account any such amounts required to be refunded by
Seller to Bank of America hereunder.

 

(d)                                 Final
Purchase Price.  Upon Bank of America’s
review of the EPP Loan and the completion of the related Review Period (as
defined below), Bank of America shall determine the Final Purchase Price
Percentage and Final Purchase Price of the related EPP Loan.  The Final Purchase Price shall be an SRP
Enhancement (as defined below).  The SRP
Enhancement shall be equal to the product of (A) the difference between (i) the
annual note rate of the EPP Loan and (ii) the SRP Enhancement Percent set
forth in Exhibit A attached hereto plus the one month LIBOR rate
multiplied by (B) the unpaid principal balance of the EPP Loan (the “SRP
Enhancement”).  The EPP SRP Enhancement
shall not be applicable for Specialty ARM’s (non-conforming PayOption ARM’s)
unless as otherwise provided in the Addendum. 
The SRP Enhancement shall be calculated for the period commencing on the
Purchase Date and ending on the completion of the Review Period.  The difference between the Initial Purchase
Price and the Final Purchase Price, if any, shall be debited or credited, as
applicable, by Bank of America to the Over/Under Account in accordance with Section 4
hereof.

 

(e)                                  Final
Purchase Price Percentage.  The Final
Purchase Price Percentage shall be the estimated Final Purchase Price
Percentage at the time the EPP Loan was sold to Bank of America, less any
adjustments made thereto by Bank of America as permitted by the Program
Agreements.  In addition to any other
remedies afforded Bank of America, Bank of America may require Seller to
repurchase such EPP Loan or Seller and Bank of America may negotiate a revised
price based on current market conditions in the event of Seller’s breach of its
obligations under the Program Agreements. 
Further, Bank of America may require Seller to repurchase an EPP Loan or
Seller and Bank of America may negotiate a revised price based on current
market conditions for any changes in Seller’s financial condition and/or
changes in general market conditions, which, in either case, Bank of America
determines are material changes.

 

(f)                                    Fees.  Bank of America shall charge, and Seller
shall be obligated to pay, in addition to any other fees applicable under the
Program Agreements, a File Fee and a Disbursement Fee in connection with each
EPP Loan purchased pursuant to this Addendum. 
The current amounts of these fees, as well as the current amounts of any
other fees which are applicable under the Early Purchase Program, are set forth
in Exhibit J.  All fees under
the Early Purchase Program may be changed by Bank of America from time to time
upon notice to Seller and may be deducted by Bank of America from the
Over/Under Account.

 

4.                                       Over/Under Account.

 

(a)                                  Over/Under
Account; Minimum Balance; Failure to Maintain Minimum Balance. For purposes
of this Addendum, Seller shall at all times maintain a balance in an account to
be established and managed by Bank of America (the “Over/Under Account”).  The minimum balance in the Over/Under Account
shall, at all times, be at least equal to the 

 

3

 

amount set forth in Exhibit J
(the “Minimum Balance”).  To the extent
Seller is required to maintain a similar balance under the terms of the
Repurchase Agreement, any such balance maintained by Seller under the terms of
the Repurchase Agreement shall be credited against the amount required to be
maintained by Seller hereunder.  Unless
otherwise agreed to by Bank of America, the Minimum Balance requirements of
Seller with respect to the Over/Under Account as required under this Addendum
shall not affect in any way the obligations of Seller to maintain a similar
account and balance under any other agreement with Bank of America, its parent,
subsidiaries and/or affiliates, including, without limitation, the minimum
amount of the Over/Under Account required to be maintained by Seller with Bank
of America.  Bank of America shall not be
required to segregate and hold funds deposited by or on behalf of Seller in the
Over/Under Account separate and apart from Bank of America’s own funds or funds
deposited by or held for others.  In the
event Seller fails to maintain the Minimum Balance in the Over/Under Account at
any time, in addition to any other rights and remedies of Bank of America,
Seller shall be obligated to pay Bank of America interest on any shortfall
amount at the rate specified in Exhibit J for as long as the
Minimum Balance fails to be maintained.

 

(b)                                 Offsets.  Notwithstanding the foregoing or anything to
the contrary herein or hereafter, Seller expressly acknowledges and agrees that
Bank of America is entitled to withdraw or debit from the Over/Under Account,
or offset against any amounts owed by Bank of America to Seller, any amounts owed
by Seller to Bank of America under this Addendum, the Loan Purchase Agreement
or any other agreement(s) as between Seller and Bank of America.

 

(c)                                  Withdrawals.

 

(i)                                     Seller. If, at any
time, the Over/Under Account balance exceeds the Minimum Balance, and the
outstanding balance of EPP Loans for which the Review Period has not completed
does not exceed any of the loan limits set forth in Section 7(f),
Seller shall be entitled to the return of all amounts in excess of the Minimum
Balance.  Bank of America shall wire
transfer all such requested excess amounts to Seller from the Over/Under
Account not later than two (2) business days after receipt of written
notice (facsimile and e-mail notices are acceptable for this purpose) thereof
by Bank of America.  Notwithstanding the
foregoing, Bank of America shall not be required to return such portion of such
excess amounts that Bank of America has determined, in its sole and reasonable
discretion, is required to be retained in the Over/Under Account in furtherance
of this Addendum and/or the Program Agreements.

 

(ii)                                  Bank of
America.  Bank of America may
withdraw funds from the Over/Under Account as contemplated by this Addendum and
the Program Agreements including, without limitation, for purposes of making
disbursements to approved payees and properly allocating costs and expenses
incurred hereunder.

 

(d)                                 Return of
Over/Under Account Balance Upon Termination.  Upon termination of this Addendum, Seller
shall be required to maintain the Minimum Balance in the Over/Under Account
until (i) the Review Periods for any EPP Loans have been completed and (ii) Bank
of America has determined that all outstanding obligations of Seller under this
Addendum have been satisfied, including, without limitation, Bank of America’s
determination that all outstanding repurchase obligations of Seller, if any,
related to any EPP Loans have been satisfied. 
Bank of America will return the Minimum Balance to Seller within thirty
(30) after the date upon which both subsection (i) and subsection (ii) have
occurred.  It is expressly understood
that this provision shall not otherwise impair any of the rights and
obligations of Seller and Bank of America in connection with debits, credits or
withdrawals hereunder.  All such rights
and obligations shall remain in full force 

 

4

 

and
effect, following termination, until Bank of America returns the entire
Over/Under Account balance as set forth herein.

 

5.                                       Defective Collateral Documents; Delivery of Acceptable
Collateral Documents. Each delivery of Collateral Documents must
be accompanied with a description of the Collateral Documents in a form
acceptable to Bank of America.  In the
event Bank of America determines that one or more of the Collateral Documents
related to any EPP Loan is incorrect, deficient or otherwise unacceptable (any
such Collateral Document, a “Defective Collateral Document”), Seller shall
correct such Defective Collateral Document in a manner acceptable to Bank of
America and deliver the same to Bank of America.  If, after the Purchase Date related to any
EPP Loan, Bank of America determines that there exists one or more Defective
Collateral Documents related to such EPP Loan, (a) Seller shall pay Bank
of America a Late Document Fee as set forth in Exhibit J for each
day thereafter until such documents are corrected by Seller and delivered to
Bank of America and determined by Bank of America to be acceptable, which such
determination shall be made by Bank of America in its sole and reasonable
discretion, (b) Bank of America shall reduce the Initial Purchase Price
for such EPP Loan by the Late Documentation Reduction Percentage as set forth
in Exhibit J (such reduction amount, the “Late Documentation
Holdback”).  The Late Documentation Holdback
shall be debited by Bank of America from the Over/Under Account and retained by
Bank of America until such time as either (i) Seller delivers to Bank of
America acceptable Collateral Documents, in which case, the Late Documentation
Holdback shall be credited to the Over/Under Account or (ii) Seller
repurchases the EPP Loan, in which case, such Late Documentation Holdback will
be credited against the related repurchase price. Further, in the event Seller
fails to deliver acceptable Collateral Documents to Bank of America within
fourteen (14) calendar days after the Purchase Date, upon request of Bank of
America, Seller shall immediately repurchase the related EPP Loan.

 

6.                                       Delivery of Credit File and Additional Documents
and Information. In addition to the Collateral Documents to be
provided by Seller in accordance with Section 2 and Section 5
hereof, Seller shall deliver to Bank of America (a) the credit
file/funding package (as more particularly defined as “Purchase Documentation”
in the Guide) and (b) any and all other documents and information related
to the EPP Loan which is required to be provided or delivered to Bank of
America under the Program Agreements. 
With respect to the delivery of credit file/funding package related to
any EPP Loan, notwithstanding anything contained in the Program Agreements to
the contrary, such credit file/funding package shall be delivered by Seller to
Bank of America within fifteen (15) business days after the related Purchase
Date.  If Seller fails to deliver the
credit file/funding package within such time frame, in addition to any other
rights and remedies of Bank of America, Bank of America shall be entitled to
reduce the Initial Purchase Price for such EPP Loan by the Late Credit File
Holdback as set forth in Exhibit J (such reduction amount, the “Late
Credit File Holdback”).  The Late Credit
File Holdback shall be debited by Bank of America from the Over/Under Account
and retained by Bank of America until such time as either (i) Seller
delivers to Bank of America the credit file/funding package, in which case, the
Late Credit File Holdback shall be credited to the Over/Under Account or (ii) Seller
repurchases the EPP Loan, in which case, such Late Credit File Holdback will be
credited against the related repurchase price. 
Further, in the event Seller fails to deliver the credit file/funding
package to Bank of America within thirty (30) calendar days after the related
Purchase Date, upon request of Bank of America, Seller shall immediately
repurchase the related EPP Loan. 
Notwithstanding anything contained herein to the contrary, it is
understood and agreed that the delivery obligations of this Section 6
shall apply to any EPP Loan, whether sold to Bank of America on a “wet” or “dry”
basis.

 

7.                                       Review of EPP Loans.

 

(a)                                  Review
Period.  Seller acknowledges that
prior to Bank of America’s purchase of EPP Loans under the Early Purchase
Program, Bank of America will not have an opportunity to complete a full review
of the mortgage files, information and documents relating to such EPP
Loans.  Accordingly, Seller agrees that
Bank of America shall have a period in 

 

5

 

calendar days, commencing
on the date the EPP Loan closes (as set forth in Exhibit A, the “Review
Period”) in which to review the mortgage file, information and documents
related to each EPP Loan to determine whether the related EPP Loan complies
with the terms and conditions of the Program Agreements.  Bank of America will use commercially
reasonable efforts to complete its review of each EPP Loan as soon as
practicable.  The Review Period will be
deemed complete with respect to any EPP Loan upon Bank of America’s
determination that the EPP Loan complies with all terms and conditions of the
Program Agreements notwithstanding that additional time may be left in the
applicable Review Period. 
Notwithstanding the foregoing, the fact that Bank of America has
conducted or has failed to conduct any partial or complete examination of the
mortgage file, information and/or documents related to an EPP Loan shall not
affect Bank of America’s right to demand repurchase or to avail itself of any
other remedy available hereunder.

 

(b)                                 Compliance
with Program Agreements; Repurchase. 
During the Review Period, Bank of America may, in its sole and
reasonable discretion, determine that an EPP Loan purchased from Seller is not
eligible for purchase and/or does not otherwise comply with one or more of the
requirements of the Program Agreements. 
In such event, Bank of America may provide written notice to Seller
identifying the non-compliant EPP Loan and request that Seller repurchase such
non-compliant EPP Loan within three (3) business days after the date of
such notice. Repurchase of the EPP Loan, including calculation of the applicable
repurchase price, shall be conducted pursuant to the Loan Purchase
Agreement.  Seller expressly understands
and agrees that this remedy is not exclusive and shall be in addition to all
other rights and remedies available to Bank of America under the Program
Agreements, including, but not limited to, Seller’s Repurchase Obligations
under the Loan Purchase Agreement. 
Nothing in this Section or this Addendum is intended to waive any
right Bank of America may have to require Seller to repurchase an EPP Loan,
during or after the Review Period, as otherwise set forth in the Program
Agreements.

 

 (c)                               Transfer of
Servicing; Early Servicing.  Unless
otherwise agreed to in writing by Bank of America, starting on a date mutually
agreed upon by Seller and Bank of America, the purchase of all EPP Loans will
include the related servicing rights. 
With respect to the transfer of such servicing rights, Seller may, at
its option, either (i) transfer servicing upon the completion of the
Review Period or (ii) if the EPP Loan is eligible for early servicing
(such Loan types eligible for early servicing as indicated in Exhibit A),
elect to have Bank of America early service the EPP Loan during the Review
Period.  Regardless of Seller’s election,
Bank of America’s servicing of any EPP Loan will be subject to the following
conditions: (i) Bank of America has received a complete and accurate
Collateral Data Record and Collateral Transmittal (if applicable) and Bank of
America has approved the Collateral Documents, (ii) Seller has complied
with, or will be capable of complying with, Bank of America’s servicing
transfer instructions, including, without limitation, providing Bank of America
with any documents, including those additional required documents illustrated
within Exhibit E, or additional information deemed necessary by Bank of
America to service the EPP Loan, (iii) Seller has paid, or has agreed to
pay, any applicable servicing set-up or transfer fees, including, without
limitation, any such fees charged by Bank of America; (the EPP Loan Servicing
Set-up Fees as indicated in Exhibit J) and (iv) Bank of America
determines that the servicing transfer will otherwise comply with applicable
law, including, without limitation, RESPA. 
Provided that the foregoing conditions have been satisfied at least
fifteen (15) calendar days prior to due date for the first payment of the EPP
Loan, servicing of the EPP Loan will be transferred at the completion of the
Review Period or on the related Purchase Date, as applicable, or such other date
as mutually agreed to by Bank of America and Seller.  If such conditions are not satisfied within
this time frame, Seller acknowledges that Bank of America may be unable to
transfer the EPP Loan onto its servicing system in a timely manner.  In such an 

 

6

 

event, Seller will be
obligated to service the affected EPP Loan on behalf of Bank of America at
Seller’s sole cost and expense during any such period of delay.

 

(d)                                 Pool
Cut-Off Dates and Target Funding Dates. 
The date on which the Review Period is deemed complete shall be the date
used by Seller and Bank of America for the purposes of determining compliance
with any time periods or deadlines that may be associated with any Pool Cut-Off
Dates or Target Funding Dates arising out of the Program Agreements.

 

(e)                                  Inability
to Complete Review.  In the event
Bank of America is unable to complete its review of any EPP Loan during the
related Review Period as a result of any mortgage file, information and/or
documents not being timely delivered or provided to Bank of America as required
hereunder, Bank of America may, at Bank of America’s sole option and in lieu of
requiring Seller to repurchase the affected EPP Loan, either:

 

(i)                                     extend
the Review Period for an additional period of time to be determined by Bank of
America in its sole discretion, in which case, (A) as a holdback amount to
compensate Bank of America for the risk that such EPP Loan may not comply with
the Agreements, the Initial Purchase Price for the EPP Loan shall be reduced by
Bank of America in accordance with the reduction schedule set forth in Exhibit J,
(B) Bank of America shall charge, and Seller shall be obligated to pay, in
addition to any other fees applicable under the Loan Purchase Agreement, a
Review Period Extension Fee.  Such
holdback amount and Review Period Extension Fee may be deducted by Bank of
America from the Over/Under Account; or

 

(ii)                                  mutually
agree with Seller upon the Final Purchase Price of the related EPP Loan, in
which case, the difference, if any, between the Initial Purchase Price and the
agreed upon Final Purchase Price for such loan shall then be debited or
credited, as applicable, by Bank of America to the Over/Under Account.

 

(f)                                    Outstanding
Loan Limit.  The maximum outstanding
aggregate unpaid loan balance of all EPP Loans that are submitted to Bank of
America by Seller for purchase hereunder, and for which the Review Period has
not completed, shall not exceed the Outstanding Loan Limit set forth on Exhibit J.  Further, with respect to certain loan types,
the maximum outstanding aggregate unpaid loan balances of such loans for which
the Review Period has not been completed shall not exceed the amounts set forth
on Exhibit A.

 

8.                                       Title to Loans.  Bank of America and Seller acknowledge and
agree that each transaction under the Early Purchase Program is intended to be
a purchase and sale and not a financing transaction.  As such, title to each EPP Loan that Bank of
America purchases under the Early Purchase Program shall pass from Seller to
Bank of America upon receipt by Seller or its agent of the Initial Purchase
Price as described more fully in Section 3 herein.  If, for any reason, any transaction hereunder
is deemed to be a financing transaction, Seller shall be deemed to have pledged
to Bank of America as security for Seller’s performance under each such
financing transaction a first lien and priority security interest in and upon
the related EPP Loan.  Seller shall pay
all fees and expenses associated with perfecting such security interest,
including without limitation, the cost of filing UCC financing statements and
recording assignments of mortgage, as and when required by Bank of America in
its sole discretion.

 

9.                                       Additional Representations and Warranties.
As of the related Purchase Date, Seller represents and warrants to Bank of
America, with respect to each EPP Loan, as follows:

 

(a)                                  Eligible
EPP Loan. Each EPP Loan is eligible for purchase under, and otherwise
complies with, the requirements of Exhibit A and the Program
Agreements, including, without limitation, this Addendum.

 

7

 

(b)                                 Collateral
Data Record. The information contained in the Collateral Data Record is
true, correct and complete.

 

The foregoing representations
and warranties are in addition to any other representations and warranties set
forth in the Program Agreements.

 

10.                                 Conditions Precedent. As condition
precedent to Bank of America’s purchase of any EPP Loan under the Early
Purchase Program, Seller shall have delivered to Bank of America:

 

(a)                                  This
Addendum, duly executed by Seller;

 

(b)                                 A
Secretary’s Certificate, substantially in the form of Exhibit F, as
to (i) the incumbency and authenticity of the signatures of the officers
of Seller authorized to initiate transactions under the Early Purchase Program
and (ii) the board resolutions of Seller’s board of directors,
substantially in the form of Exhibit G;

 

(c)                                  Copies
of Seller’s fidelity bond and/or applicable insurance policy, or certificates
of insurance for such policies, all in form and content satisfactory to Bank of
America, reflecting at least the terms and conditions required in Section 11
below;

 

(d)                                 if
required by Bank of America, a guaranty, in form and substance satisfactory to
Bank of America, pursuant to which Guarantor unconditionally and continuously
guarantees all of Seller’s obligations and liabilities under this Addendum
and/or the Program Agreements; and

 

(e)                                  A
Power of Attorney, substantially in the form of Exhibit K.

 

11.                                 Fidelity Bonds and Insurance.
Seller shall maintain a fidelity bond and/or insurance policy, in form and
substance satisfactory to Bank of America, covering against loss or damage
arising out of the following conduct or actions by Seller, or any officer,
director, employee or agent of Seller: (i) any breach of fidelity; (ii) any
loss or destruction of documents (whether written or electronic); (iii) any
fraud, theft, or misappropriation; or (iv) any errors and omissions. This
bond and/or policy shall name Bank of America as a named insured and loss payee
and provide coverage in an amount equal to three hundred thousand dollars
($300,000) or such amount required by FNMA in Section 1.01 of the FNMA
Guaranteed Mortgage Backed Securities Sellers’ and Servicers’ Guide, whichever
is greater. The deductible on such fidelity bond and/or insurance policy shall
not exceed twenty five thousand dollars ($25,000). Following approval by Bank
of America of a specific fidelity bond and/or insurance policy, Seller shall
not amend, cancel, suspend or otherwise change such bond and/or policy without
the prior written consent of Bank of America.

 

12.                                 Right to Offset.  Notwithstanding anything to the contrary
contained herein, Seller expressly acknowledges and agrees that Bank of America
and/or its parent, subsidiaries and affiliates (collectively, “Bank of America
Related Entities”) shall have the right to offset against any amounts owed by
any Bank of America Related Entity to Seller against any amounts owed by Seller
to any Bank of America Related Entity under any agreement(s) between or
among Seller and any Bank of America Related Entity(ies), including, without
limitation, any amounts owed by Seller to Bank of America under this Addendum
and the Loan Purchase Agreement.  In
exercising the foregoing right to offset, any Bank of America Related Entity
shall be entitled to withdraw or debit from the Over/Under Account under this
Addendum and the Over/Under Account under the Repurchase Agreement any amount
owed by Seller to such Bank of America Related Entity and Bank of America shall
be entitled to withdraw or debit from any funds due or being held for the
benefit of Seller by any Bank of America Related Entity(ies).  To the extent Bank of America and/or any Bank
of America Related Entity intends to offset any amounts due Seller hereunder
against any amounts due or being held for the benefit of Seller under any
agreement other than this Addendum or the Loan Purchase Agreement, Bank of
America agrees 

 

8

 

to provide Seller with at
least three (3) business days prior written notice thereof and Seller
shall be entitled to cure any breach or default that gives rise to such offset
within such time period and thereby avoid such offset to the extent of the
cure.

 

13.                                 Notice. Seller shall immediately notify Bank of
America upon the occurrence of any of the following events:

 

(a)                                  (i) the
occurrence of any Event of Default or (ii) the occurrence of any action,
event or condition of any nature that may lead to or result in an Event of
Default;

 

(b)                                 without
limiting the generality of subsection (a), the breach by Seller of any of its
covenants contained in Sections 11; or

 

(c)                                  any change
in the executive or senior management of Seller.

 

Seller
shall notify Bank of America immediately upon the occurrence of such an event,
but in no event later than five (5) calendar days after such
occurrence.  Such notice shall be in
writing and include reasonable detail of the nature and scope of the
occurrence.

 

14.                                 Events of Default.  The occurrence of any of the following
conditions or events shall be an Event of Default:

 

(a)                                  breach
or default by Seller with respect to any other material term or representation
and warranty of any Program Agreement (including the Loan Purchase Agreement)
or any other loan purchase agreement, note, mortgage, security agreement,
indenture or other agreement to which Seller is a party or by which it is
bound, including, without limitation, the Repurchase Agreement; or

 

(b)                                 without
limiting the generality of subsection (a), any of Seller’s representations or
warranties made in Section 9 hereof or in any statement or
certificate at any time given by Seller in writing pursuant hereto or in
connection herewith shall be false in any material respect on the date as of
which made; or

 

(c)                                  Seller
shall default (i) in the performance of or compliance with any term
contained in Section 11 of this Addendum or (ii) in the
performance of or compliance of any other provision of this Addendum and such
default shall not have been remedied within thirty (30) days after receipt of
notice from Bank of America of such default; or

 

(d)                                 an
Insolvency Event shall have occurred with respect to Seller.  For purposes of the foregoing, an “Insolvency
Event” shall mean the occurrence of any of the following events:

 

(i)                                     Seller
shall become insolvent or generally fail to pay, or admit in writing its
inability to pay, its debts as they become due, or shall voluntarily commence
any proceeding or file any petition under any bankruptcy, insolvency or similar
law or seeking dissolution, liquidation or reorganization or the appointment of
a receiver, trustee, custodian, conservator or liquidator for itself or a
substantial portion of its property, assets or business or to effect a plan or
other arrangement with its creditors, or shall file any answer admitting the
jurisdiction of the court and the material allegations of an involuntary
petition filed against it in any bankruptcy, insolvency or similar proceeding,
or shall be adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or Seller, or a substantial part of its property, assets
or business, shall be subject to, consent to or acquiesce in the appointment of
a receiver, trustee, custodian, conservator or liquidator for itself or a
substantial property, assets or business;

 

9

 

(ii)                                  corporate
action shall be taken by Seller for the purpose of effectuating any of the
foregoing;

 

(iii)                               an
order for relief shall be entered in a case under the Bankruptcy Code in which
Seller is a debtor; or

 

(iv)                              involuntary
proceedings or an involuntary petition shall be commenced or filed against
Seller under any bankruptcy, insolvency or similar law or seeking the dissolution,
liquidation or reorganization of Seller or the appointment of a receiver,
trustee, custodian, conservator or liquidator for Seller or of a substantial
part of the property, assets or business of Seller, or any writ, order,
judgment, warrant of attachment, execution or similar process shall be issued
or levied against a substantial part of the property, assets or business of
Seller, and such proceeding or petition shall not be dismissed, or such
execution or similar process shall not be released, vacated or fully bonded,
within sixty (60) days after commencement, filing or levy, as the case may be;
or

 

(e)                                  Seller
shall purport to disavow its obligations hereunder or shall contest the
validity or enforceability of the Program Agreements or Bank of America’s
ownership interest in any EPP Loan.

 

15.                                 Term and Termination; Additional Remedies.

 

(a)                                  Term.
This EPP Addendum shall be in effect and continue as long as the Repurchase
Agreement is in effect.  Any expiration
or termination of the Repurchase Agreement shall automatically terminate this
EPP Addendum. Following termination of this EPP Addendum, all indebtedness due
Bank of America under the EPP Addendum shall be immediately due and payable
without notice to Seller and without presentment, demand, protest, notice of
protest or dishonor, or other notice of default, and without formally placing
Seller in default, all of which are hereby expressly waived by Seller.

 

(b)                                 Termination
by Bank of America with or without Cause. 
Bank of America may terminate this Addendum at any time, with or without
cause.

 

(c)                                  Termination
by Bank of America upon Event of Default. 
In the event that Seller or Bank of America discovers that an Event of
Default has occurred, the party discovering such Event of Default shall notify
the other party and Bank of America may terminate this Addendum immediately
and/or demand immediate repurchase of all EPP Loans purchased by Bank of
America hereunder and for which the Review Period has not been completed, upon
written notice to Seller thereof.  It is
understood and agreed by Seller that in the event Seller is in breach of the
Repurchase Agreement, such breach will be an Event of Default and Bank of
America shall have the right to terminate this Addendum as provided under this
subsection (c).

 

(d)                                 Additional
Remedies.  In addition to any other
rights and remedies that Bank of America may have under the Program Agreements,
including, without limitation, the rights and remedies of Bank of America under
this Addendum, in the event that Seller fails to repurchase any EPP Loan within
the applicable time period required under the Program Agreements, Bank of
America may, at its sole option, require that such EPP Loan be repurchased by
initiating a transaction with Bank of America under the Repurchase Agreement.  Seller hereby consents to the repurchase of
any EPP Loan by initiating a transaction with Bank of America under the
Repurchase Agreement upon receipt of notice from Bank of America that Bank of
America has elected to require Seller to repurchase such EPP Loan under this Section 18(d) and
no further action will be necessary by Seller to effectuate Seller’s consent to
repurchase such EPP Loan in such manner. 
All EPP Loans repurchased by Seller by a transaction under the
Repurchase

 

10

 

Agreement will be
subject to the terms and conditions of the Repurchase Agreement and Bank of
America shall be entitled to revalue the related collateral and require Seller
to deposit additional margin funds in the Over/Under Account related to the
Repurchase Agreement.  Further, Bank of
America shall be entitled classify each such EPP Loan as a “Noncompliant
Mortgage Loan” (as defined in the Repurchase Agreement) and Seller shall be
liable to Bank of America for any costs and fees associated with the loan being
classified as such.

 

16.                                 Amendments.  Bank of America reserves the
right, in its sole and reasonable discretion, to amend or modify the terms and
conditions of this Addendum upon thirty (30) calendar days written notice to
Seller.  Except as set forth in the
preceding sentence, there shall be no other amendments or modifications hereto
except by mutual written agreement of Bank of America and Seller.

 

17.                                 Full Force and Effect. 
Nothing contained in this Addendum shall be deemed to waive any rights, remedies
or privileges of Bank of America under the Program Agreements.  Except as expressly modified herein, the Loan
Purchase Agreement and the Guide, and all of the terms and conditions thereof,
shall remain in full force and effect and apply equally to the terms hereof.

 

18.                                 Counterparts.  This Addendum may be executed in
counterparts, each of which when so executed shall be an original, but all of
which taken together shall constitute one and the same agreement, and either of
the parties hereto may execute this Addendum by signing such counterpart.

 

IN WITNESS WHEREOF, Bank of America and Seller have executed this
Addendum by and through their duly authorized representatives as of the date
first above written.

 

BANK OF AMERICA, N.A.

 

	
  By:

  	
   

  	
  /s/ Blair Kenny

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Blair Kenny

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Senior Vice President

  	
   

  
					

 

HOME LOAN
CENTER, INC.

 

	
  By:

  	
   

  	
  /s/ Rian Furey

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Rian Furey

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Senior Vice President

  	
   

  
					

 

11

 

EXHIBIT A

 

EPP Loans

 

	
  Loan
  Product or Type

  	
   

  	
  Maximum

  Percentage of

  Outstanding

  Loan Limit

  	
   

  	
  SRP

  Enhancement

  Percent

  	
   

  	
  Initial

  Purchase

  Price

  Percentage

  	
   

  	
  Review

  Period

  	
   

  	
  Requirements

  prior to purchase

  
	
  Conventional
  Conforming Mortgage Loans (Agency eligible 1st mortgages with Full/Alt doc types only)

  	
   

  	
  100%

  	
   

  	
  1.50

  	
   

  	
  99

  	
   

  	
  30 days

  	
   

  	
  None

  
	
  Government
  Mortgage Loans and Bond Loans (1st mortgages only)

  	
   

  	
  100%

  	
   

  	
  1.50

  	
   

  	
  99

  	
   

  	
  30 days

  	
   

  	
  None

  
	
  Jumbo
  Mortgage Loans (1st mortgages only, maximum loan amounts of
  $1,000,000)

  	
   

  	
  10%

  	
   

  	
  1.50

  	
   

  	
  95

  	
   

  	
  30 days

  	
   

  	
  Rate Lock and CLUES
  or Prior Approval

  

 

12

 

EXHIBIT B

 

(Reserved)

 

13

 

EXHIBIT C

 

Payment of Purchase Proceeds

 

I. Disbursement of Funds

 

(a)                                  By Wire
Transfer, Check or Draft. Seller expressly acknowledges and agrees
that Bank of America will pay, by wire transfer, check or draft, the Initial
Purchase Price for EPP Loans purchased hereunder only to a closing agent or
warehouse lender that is an Approved Payee (as hereafter defined); provided,
however, that Bank of America shall not make any such payment where such
payment would cause the balance in the Over/Under Account to fall below the
Minimum Balance set forth in the Addendum. 
The payment of the Initial Purchase Price by Bank of America to any
closing agent or warehouse lender that is not an Approved Payee shall not make
such closing agent or warehouse lender an Approved Payee, nor shall it
constitute a waiver of any of Bank of America’s rights hereunder. All payments
by Bank of America to Seller or its Approved Payee by wire transfer shall be
subject to all applicable federal, state and local laws and regulations and the
then-current policy of the Board of Governors of the Federal Reserve System on
Reduction of Payments System Risk. 
Seller expressly acknowledges and agrees that Bank of America shall not
be responsible or liable in any manner for any delay caused by such applicable
laws, regulations and/or the policy.

 

(b)                                 Return of
Funds. If, for any reason, any EPP Loan that has not yet been
originated is not closed within three (3) business days of the date Bank
of America remits payment to Seller or its agent, Seller shall, or shall cause
its agent to, return the payment to Bank of America, and Seller shall also pay
Bank of America (a) interest from the date such funds were paid by Bank of
America, excluding the date such funds are returned, at an annual rate equal to
the rate of the note underlying such EPP Loan; plus (b) a Breakage Fee.
Seller shall pay all such amounts due Bank of America by wire transfer of
immediately available funds to the following account:

 

	
  Bank:

  	
  Bank of America, N.A.

  
	
  ABA:

  	
  026009593

  
	
  Name:

  	
  Bank of America
  Warehouse Lending

  
	
  Account No.:

  	
  1233460784

  
	
  Reference:

  	
  Home
  Loan Center, Inc.

  

 

II. Approved Payees.

 

(a)                                  Closing
Agents. In order for a closing agent to be designated as an “Approved
Payee” in connection with any EPP Loan, Seller must submit to Bank of America
the following documents, in a form acceptable to Bank of America:

 

(i)                                     a blanket
closing protection letter, issued to Bank of America by the title company that
issues the title policy covering the applicable Loan (the “Title Company”),
that covers closings conducted by this closing agent in the jurisdiction where
this closing will take place (a “Blanket Closing Protection Letter”);

 

or

 

(ii)                                  in the
absence of a Blanket Closing Protection Letter issued by the Title Company to
Bank of America, a Blanket Closing Protection Letter issued by the Title
Company to Seller (with a valid, enforceable assignment of Seller’s rights
thereunder, in a form acceptable to Bank of America);

 

or

 

14

 

(iii)                               in the
absence of a Blanket Closing Protection Letter, a specific closing protection
letter, issued by the Title Company to Bank of America or to Seller (with a
valid, enforceable assignment of Seller’s rights thereunder, in a form
acceptable to Bank of America), that covers closings conducted by this closing
agent in the jurisdiction where this closing will take place (a “Specific
Closing Protection Letter”);

 

or

 

(iv)                              if neither
Specific nor Blanket Closing Protection Letters are available or are limited in
their applicability in the jurisdiction where the closing takes place, any
other document(s) Bank of America may reasonable require, including
without limitation a valid, enforceable assignment to Bank of America of Seller’s
rights under any fidelity bond and/or insurance policies; and

 

(v)                                 written
evidence that closing instructions, in form and content approved by Bank of
America and signed by Seller and Bank of America, have been delivered to such
closing agent.

 

(b)                                 Warehouse
Lender. In order for a warehouse lender to be designated an
Approved Payee, Seller must submit to Bank of America a written request, including
the name and address of the applicable warehouse lender, demonstrating a need
for such designation. Notwithstanding the foregoing, Bank of America reserves
the right to refuse to designate any warehouse lender as an Approved Payee.

 

(c)                                  Approval
Process. Bank of America shall review the applicable documents and
notify Seller within two (2) business days as to whether a closing agent
or warehouse lender has been designated by Bank of America, in its sole
discretion, to be an Approved Payee. Bank of America may withdraw its approval
of any closing agent or warehouse lender as an Approved Payee at any time, in
its sole discretion, with or without notice.

 

15

 

EXHIBIT D

 

Collateral
Documents

 

Collateral Documents:

 

(1)                                  The
original mortgage note evidencing the Loan and any modifications thereto (if
applicable), endorsed by Seller to Bank of America, N.A., with a complete chain
of endorsements from the originator to Seller, if applicable;

 

(2)                                  A
copy of the assignment, unless the security instrument names Mortgage
Electronic Registration System (“MERS”) as the original mortgagee, executed by
Seller to Bank of America Bank, FSB, for the mortgage or deed of trust securing
the mortgage note, in recordable form but unrecorded, with a complete chain of
intervening assignments from the originator to Seller, if applicable; and

 

(3)                                  A
certified or true copy of the mortgage or deed of trust securing the mortgage
note, and any riders thereto.

 

16

 

EXHIBIT E

 

Additional
Required Documents

 

(1)           the first payment letter

 

(2)           loan program identification number
(if not included on the Collateral Data Record)

 

(3)           notification of LPMI

 

(4)           buydown agreement (if applicable)

 

(5)           power of attorney (if applicable)

 

(6)                                  name
affidavit (if applicable)

 

(7)                                  credit
report

 

(8)                                  AUS
certificate (if applicable)

 

(9)                                  MI
certificate (if applicable)

 

17

 

EXHIBIT F

 

Form of Secretary’s
Certificate

 

I,
                                                              ,
am the duly elected Secretary of Home Loan Center, Inc. (“Company”), and I
hereby certify that:

 

1.                                       Each of the
persons listed below has been duly elected to, and now holds, the title of the
Company set forth opposite his or her name and is currently serving, in such
capacity.  The signature of each such
person set forth opposite his or her title is his or her true and genuine
signature:

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

2.                                       Attached
hereto as Exhibit A is a true and complete copy of the Company’s board
resolutions, which were duly and validly adopted either at a special or regular
meeting or by unanimous consent.  Such
board resolutions authorize the execution of the Early Purchase Program
Addendum to Loan Purchase Agreement, by and between Home Loan Center, Inc.
and Bank of America, N.A.  Such board
resolutions have not been amended, modified or rescinded in any respect and
remain in full force and effect, without modification or amendment, as of the
date hereof.

 

 

	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Secretary

  

 

18

 

Exhibit A
to Secretary’s Certificate

 

(Board
resolutions attached)

 

19

 

EXHIBIT G

 

Form of Board Resolutions

 

ACTION BY
UNANIMOUS WRITTEN CONSENT

OF THE
BOARD OF DIRECTORS OF

Home Loan Center, Inc.

 

The undersigned, being all of the Directors currently
in office of Home Loan Center, Inc. (“Company”), hereby consent to and
adopt the following resolutions as if at a meeting of the Board of Directors
held on the date first above written:

 

WHEREAS,
the Company desires to sell mortgage loans to Bank of America, N.A. (“Bank of
America”) under an Early Purchase Program Addendum to Loan Purchase Agreement
by and between Bank of America and Company (the “Early Purchase Program”).

 

NOW, THEREFORE, IT IS RESOLVED BY THE BOARD OF
DIRECTORS OF THE COMPANY THAT:

 

1.                                       Company
is hereby authorized and directed to enter into and execute each of the
following documents:

 

(a)                                  the
Early Purchase Program Addendum to Loan Purchase Agreement between Company and
Bank of America (the “EPP Addendum”);

 

(b)                                 any
and all other agreements and documents in connection with the EPP Addendum,

 

2.                                       Any one of
the following officers are separately and independently authorized and directed
to execute and deliver the EPP Addendum, and to do any and all things which he
or she may deem necessary or desirable in connection with the EPP Addendum,
including approving, executing and delivering any increases, amendments or
modifications thereto:

 

	
  Name/Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

3.                                       Any one of the following officers and/or employees is separately and
independently authorized to take the following actions in connection with the
Early Purchase Program: (a) request a purchase of a mortgage loan; (b) sign
receipts acknowledging delivery of funds and documents from Bank of America; (c) request
and effect transfers of funds; and (d) ship and release documents to Bank
of America:

 

	
  Name/Title

  	
   

  	
  Signature

  	
   

  	
  Restrictions (if any)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

20

 

 

RESOLVED,
FURTHER, that all actions heretofore taken by any authorized officer of the
Company in connection with the transactions contemplated by the foregoing
resolutions be, and each such action hereby is, approved, ratified and affirmed
in all respects.

 

This
written consent may be executed by the several members of this Board of
Directors in counterparts.  All the
counterparts, or the signed signature pages thereof attached to one
counterpart, shall constitute the appropriate approval of this written consent
and shall be filed with the Minutes of the proceedings of this Board of
Directors.

 

IN WITNESS WHEREOF, the
undersigned, being all of the Directors of the Company, have executed this
Unanimous Written Consent, effective as of the date first written above.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

21

 

EXHIBIT H & I

 

(Reserved)

 

22

 

EXHIBIT J

 

Term Sheet for Early Purchase
Program

 

	
  1.

  	
   

  	
  Fee:

  	
   

  	
  Amount:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Disbursement
  Fee:

  	
   

  	
  $10.00
  per loan, this fee shall be waived if the loan was purchased under the
  Repurchase Agreement and a Wire Fee was charged.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  File
  Fee:

  	
   

  	
  $30.00
  per loan, this fee shall be waived if the loan was purchased under the
  Repurchase Agreement and a File Fee was charged.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Late
  Document Fee:

  	
   

  	
  $10.00 per day

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Late
  Documentation Reduction Percentage:

  	
   

  	
  5%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Review
  Period Extension Fee:

  	
   

  	
  Refer
  to Section 4 - Holdback Schedule

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Minimum
  Balance for Over/Under Account:

  	
   

  	
  $1,875,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Interest
  on Shortfall Amount:

  	
   

  	
  One
  Month LIBOR Plus 5%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Outstanding
  Loan Limit:

  	
   

  	
  Seventy
  Five Million Dollars

  
	
   

  	
   

  	
   

  	
   

  	
  ($75,000,000)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Holdback
  Schedules:

  	
   

  	
   

  

 

Review Period Extension*

 

	
  Days over Review

  Period

  	
   

  	
  Holdback as a percentage of

  Initial Purchase Price

  	
   

  	
  Review Period Extension

  Fee

  
	
  1-15

  	
   

  	
  10%

  	
   

  	
  2.00% over the initial
  SRP

  Enhancement Percent

  
	
  16-30

  	
   

  	
  20%

  	
   

  	
  2.00% over the initial
  SRP

  Enhancement Percent

  
	
  31-45

  	
   

  	
  30%

  	
   

  	
  2.00% over the initial
  SRP

  Enhancement Percent

  

 

*No more than 7% EPP Loans at any given time
shall be subject to a Review Period Extension.

 

Late Credit File Delivery
Holdback

 

	
  Holdback as a

  percentage of Initial

  Purchase Price

  
	
  5%

  

 

23

 

EXHIBIT K

 

POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS:

 

WHEREAS, Bank of America,
N.A. (“Bank of America”) and Home Loan Center, Inc. (“Seller”) have
entered into the Early Purchase Program Addendum to Loan Purchase Agreement,
dated as of May 1, 2009 (the “EPP Addendum”), pursuant to which Bank of
America has agreed to purchase loans from Seller under an early purchase
program subject to the terms and conditions set forth therein; and

 

WHEREAS, Seller has
agreed to give to Bank of America a power of attorney on the terms and
conditions contained herein in order for Bank of America to take any action
that Bank of America may deem necessary or advisable to accomplish the purposes
of the EPP Addendum;

 

NOW,
THEREFORE, Seller hereby irrevocably constitutes and appoints Bank of America
its true and lawful Attorney-in-Fact, with full power and authority hereby
conferred in its name, place and stead and for its use and benefit, to do and
perform the following in connection with the loans to be sold by Seller to Bank
of America under the EPP Addendum (the “EPP Loans”) or as otherwise provided
below:

 

(1)                                  to
receive, endorse and collect all checks made payable to the order of Seller
representing any payment on account of the EPP Loans;

 

(2)                                  to
assign or endorse any mortgage, deed of trust, promissory note or other
instrument relating to the EPP Loans;

 

(3)                                  to
correct any assignment, mortgage, deed of trust or promissory note or other
instrument relating to the EPP Loans, including, without limitation,
unendorsing and re-endorsing a promissory note to another investor;

 

(4)                                  to
complete lost note affidavits relating to the EPP Loans;

 

(5)                                  to
issue title requests and instructions relating to the EPP Loans;

 

(6)                                  to
give notice to any individual or entity of its ownership interest in the EPP
Loans; and

 

(7)                                  to
service and administer the EPP Loans, including, without limitation, the
receipt and collection of all sums payable in respect of the EPP Loans.

 

Seller
hereby ratifies and confirms all that said Attorney-in-Fact shall lawfully do
or cause to be done by authority hereof.

 

Third parties without
actual notice may rely upon the power granted under this Power of Attorney upon
the exercise of such power by the Attorney-in-Fact.

 

Home
Loan Center, Inc.

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

24

 

WITNESS my hand this
                        
day of
                                ,
20      .

 

STATE OF

 

County of

 

This instrument was
acknowledged, subscribed and sworn to before me this
                  
day of                                   ,
by

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Seal:

  
				

 

25

 

EXHIBIT L

 

Automatic Conversion of Loans
from Master Repurchase Agreement to Early Purchase Program

 

Bank of America Warehouse
Lending offers an automated function for its customers to sell loans sold by
Seller to Bank of America Warehouse Lending under the master repurchase
agreement to Bank of America Correspondent Lending under Bank of America’s
Early Purchase Program (“EPP Program”).

 

Once the collateral is
received by Bank of America Warehouse Lending and a Bank of America
Correspondent Lending loan number is assigned such loan, Bank of America
Warehouse Lending can automatically sell such loans on behalf of Seller to Bank
of America Correspondent Lending under the EPP Program.  A Bank of America Correspondent Lending loan
number can be created by the following methods:

 

1.               Registration
or locking of a loan with Bank of America Correspondent Lending.

 

2.               A
funding package is received by Bank of America Correspondent Lending.

 

3.               The
collateral data record provided to Bank of America Warehouse Lending indicates
the takeout investor as Bank of America Correspondent Lending.

 

4.               Shipping
instructions are provided to Bank of America Warehouse Lending indicating to
ship the collateral to Bank of America Correspondent Lending.

 

I hereby authorize the
sale of eligible loans currently sold by Seller to Bank of America Warehouse
Lending under the master repurchase agreement to be sold by Bank of America
Warehouse Lending on behalf of Seller to Bank of America Correspondent Lending
pursuant to the EPP program.

 

Acknowledged and agreed
to by:

 

 

	
   

  	
   

  
	
  Home Loan
  Center, Inc.:

  
	
   

  
	
  Name:

  
	
   

  
	
  Title:

  

 

26

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}]]