Document:

Exhibit 10.10

 

 

IMH ASSETS CORP.

 

as Depositor

 

CHRISTIANA BANK & TRUST COMPANY

 

as Owner Trustee

 

and

 

DEUTSCHE BANK NATIONAL TRUST COMPANY

 

as Certificate Registrar and Certificate Paying Agent

 

 

AMENDED AND RESTATED TRUST AGREEMENT

 

Dated as of November 26, 2010

 

 

Resecuritization Trust Certificates, 

Series 2010-R1

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
 
    	
2
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
 
    	
2
    
	
Section 1.02
    	
Other   Definitional Provisions
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II ORGANIZATION
    	
 
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Name
    	
 
    	
3
    
	
Section 2.02
    	
Office
    	
 
    	
3
    
	
Section 2.03
    	
Purposes   and Powers
    	
 
    	
3
    
	
Section 2.04
    	
Appointment   of Owner Trustee
    	
 
    	
4
    
	
Section 2.05
    	
Initial   Capital Contribution of Owner Trust Estate
    	
 
    	
4
    
	
Section 2.06
    	
Declaration   of Trust
    	
 
    	
4
    
	
Section 2.07
    	
Liability   of the Certificateholder
    	
 
    	
5
    
	
Section 2.08
    	
Title   to Trust Property
    	
 
    	
5
    
	
Section 2.09
    	
Situs   of Trust
    	
 
    	
5
    
	
Section 2.10
    	
Representations   and Warranties of the Depositor
    	
 
    	
5
    
	
Section 2.11
    	
Reserved
    	
 
    	
6
    
	
Section 2.12
    	
Investment   Company
    	
 
    	
6
    
	
Section 2.13
    	
Transfer   of Trust Estate to Trust
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III CONVEYANCE OF THE UNDERLYING   CERTIFICATES; OWNER TRUST CERTIFICATES
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
Section 3.01
    	
Conveyance   of the Underlying Certificates
    	
 
    	
9
    
	
Section 3.02
    	
Initial   Beneficial Ownership
    	
 
    	
9
    
	
Section 3.03
    	
The   Owner Trust Certificates
    	
 
    	
9
    
	
Section 3.04
    	
Authentication   of Owner Trust Certificates
    	
 
    	
9
    
	
Section 3.05
    	
Registration   of and Limitations on Transfer and Exchange of Owner Trust Certificates
    	
 
    	
10
    
	
Section 3.06
    	
Mutilated,   Destroyed, Lost or Stolen Owner Trust Certificates
    	
 
    	
12
    
	
Section 3.07
    	
Persons   Deemed Certificateholder
    	
 
    	
12
    
	
Section 3.08
    	
Access   to List of Certificateholder’ Names and Addresses
    	
 
    	
12
    
	
Section 3.09
    	
Maintenance   of Office or Agency
    	
 
    	
13
    
	
Section 3.10
    	
Certificate   Paying Agent
    	
 
    	
13
    
	
Section 3.11
    	
Distributions   on the Owner Trust Certificates
    	
 
    	
14
    
	
Section 3.12
    	
ERISA   Restrictions
    	
 
    	
14
    
	
Section 3.13
    	
Representations   and Warranties Relating to the Underlying Certificates
    	
 
    	
14
    
	
Section 3.14
    	
Remedies   for Breach of Representations and Warranties
    	
 
    	
15
    

 

 

	
ARTICLE IV AUTHORITY AND DUTIES OF OWNER   TRUSTEE
    	
 
    	
17
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
General   Authority
    	
 
    	
17
    
	
Section 4.02
    	
General   Duties
    	
 
    	
17
    
	
Section 4.03
    	
Action   upon Instruction
    	
 
    	
17
    
	
Section 4.04
    	
No   Duties Except as Specified under Specified Documents or in Instructions
    	
 
    	
18
    
	
Section 4.05
    	
Restrictions
    	
 
    	
18
    
	
Section 4.06
    	
Prior   Notice to Certificateholder with Respect to Certain Matters
    	
 
    	
19
    
	
Section 4.07
    	
Action   by Certificateholder with Respect to Certain Matters
    	
 
    	
20
    
	
Section 4.08
    	
Action   by Certificateholder with Respect to Bankruptcy
    	
 
    	
20
    
	
Section 4.09
    	
Restrictions   on Certificateholder’ Power
    	
 
    	
20
    
	
Section 4.10
    	
Majority   Control
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V APPLICATION OF TRUST FUNDS
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.01
    	
Distributions
    	
 
    	
21
    
	
Section 5.02
    	
Method   of Payment
    	
 
    	
21
    
	
Section 5.03
    	
[Reserved]
    	
 
    	
21
    
	
Section 5.04
    	
Tax   Matters and Tax Returns
    	
 
    	
21
    
	
Section 5.05
    	
Statements   to Certificateholder
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI CONCERNING Christiana Bank
    	
 
    	
24
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Acceptance   of Trusts and Duties
    	
 
    	
24
    
	
Section 6.02
    	
Furnishing   of Documents
    	
 
    	
25
    
	
Section 6.03
    	
Representations   and Warranties
    	
 
    	
25
    
	
Section 6.04
    	
Reliance;   Advice of Counsel
    	
 
    	
26
    
	
Section 6.05
    	
Not   Acting in Individual Capacity
    	
 
    	
27
    
	
Section 6.06
    	
Christiana   Bank Not Liable for Certificates or Related Documents
    	
 
    	
27
    
	
Section 6.07
    	
Christiana   Bank May Own Owner Trust Certificates and Notes
    	
 
    	
27
    
	
Section 6.08
    	
Payments   from Owner Trust Estate
    	
 
    	
27
    
	
Section 6.09
    	
Doing   Business in Other Jurisdictions
    	
 
    	
27
    
	
Section 6.10
    	
Liability   of Certificate Registrar and Certificate Paying Agent
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII COMPENSATION OF OWNER TRUSTEE
    	
 
    	
29
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Owner   Trustee Fees and Expenses
    	
 
    	
29
    
	
Section 7.02
    	
Indemnification
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII TERMINATION OF TRUST AGREEMENT
    	
 
    	
31
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Termination   of Trust Agreement
    	
 
    	
31
    

 

 

	
ARTICLE IX SUCCESSOR OWNER TRUSTEES AND   ADDITIONAL OWNER TRUSTEES
    	
 
    	
33
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Eligibility   Requirements for Owner Trustee
    	
 
    	
33
    
	
Section 9.02
    	
Replacement   of Owner Trustee
    	
 
    	
33
    
	
Section 9.03
    	
Successor   Owner Trustee
    	
 
    	
33
    
	
Section 9.04
    	
Merger   or Consolidation of Owner Trustee
    	
 
    	
34
    
	
Section 9.05
    	
Appointment   of Co-Trustee or Separate Trustee
    	
 
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X MISCELLANEOUS
    	
 
    	
36
    
	
 
    	
 
    	
 
    
	
Section 10.01
    	
Amendments
    	
 
    	
36
    
	
Section 10.02
    	
No   Legal Title to Owner Trust Estate
    	
 
    	
37
    
	
Section 10.03
    	
Limitations   on Rights of Others
    	
 
    	
37
    
	
Section 10.04
    	
Notices
    	
 
    	
38
    
	
Section 10.05
    	
Severability
    	
 
    	
38
    
	
Section 10.06
    	
Separate   Counterparts
    	
 
    	
38
    
	
Section 10.07
    	
Successors   and Assigns
    	
 
    	
38
    
	
Section 10.08
    	
No   Petition
    	
 
    	
38
    
	
Section 10.09
    	
No   Recourse
    	
 
    	
39
    
	
Section 10.10
    	
Headings
    	
 
    	
39
    
	
Section 10.11
    	
GOVERNING   LAW
    	
 
    	
39
    
	
Section 10.12
    	
Integration
    	
 
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XI MANAGEMENT OF THE TRUST
    	
 
    	
40
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A   - Form of Owner Trust Certificates
    	
 
    	
A-1
    
	
Exhibit B   - Certificate of Trust
    	
 
    	
B-1
    
	
Exhibit C   – [Reserved]
    	
 
    	
C-1
    
	
Exhibit D   - Form of Transferor Certificate
    	
 
    	
D-1
    
	
Exhibit E   – [Reserved]
    	
 
    	
E-1
    
	
Exhibit F   - Form of Transferee Certificate
    	
 
    	
F-1
    

 

 

This Amended and Restated Trust Agreement, dated as of November 26, 2010 (as amended from time to time, this “Trust Agreement”), among IMH Assets Corp., a California corporation, as depositor (the “Depositor”), Christiana Bank & Trust Company, a Delaware banking corporation, as owner trustee (the “Owner Trustee” and in its individual capacity, “Christiana Bank”), and Deutsche Bank National Trust Company, as certificate registrar (in such capacity, the “Certificate Registrar”) and certificate paying agent (in such capacity, the “Certificate Paying Agent”).

 

WITNESSETH THAT:

 

WHEREAS, the Depositor intends to sell, assign and transfer the Underlying Certificates set forth in Schedule A attached hereto to the Trust;

 

WHEREAS, in exchange for the conveyance of the Underlying Certificates to the Trust pursuant to the terms hereof, the Trust shall issue the Owner Trust Certificates, which shall evidence the beneficial ownership interest in the Trust and shall entitle the Certificateholders to distributions from payments received on the Underlying Certificates (as set forth on Schedule A attached hereto);

 

In consideration of the mutual agreements herein contained, the Depositor, the Owner Trustee, the Certificate Registrar and the Certificate Paying Agent agree as follows:

 

1

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01           Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Indenture, dated November 26, 2010 between LVII 2010-R1, as issuer and Deutsche Bank National Trust Company, as indenture trustee, which definitions are incorporated by reference herein. All other capitalized terms used herein shall have the meanings specified herein.

 

Section 1.02           Other Definitional Provisions.

 

(a)           All terms defined in this Trust Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

 

(b)           As used in this Trust Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Trust Agreement or in any such certificate or other document, and accounting terms partly defined in this Trust Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Trust Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Trust Agreement or in any such certificate or other document shall control.

 

(c)           The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Trust Agreement shall refer to this Trust Agreement as a whole and not to any particular provision of this Trust Agreement; Article, Section and Exhibit references contained in this Trust Agreement are references to Articles, Sections and Exhibits in or to this Trust Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”.

 

(d)           The definitions contained in this Trust Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

(e)           Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

 

2

 

ARTICLE II

 

ORGANIZATION

 

Section 2.01           Name. The trust continued hereby (the “Trust”) shall be known as “LVII 2010-R1”, in which name the Owner Trustee may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. The Trust was created pursuant to a Short Form Trust Agreement, dated as of November 24, 2010, between the Depositor and the Owner Trustee.

 

Section 2.02           Office. The office of the Trust shall be in care of the Owner Trustee at its Corporate Trust Office or at such other address in Delaware as the Owner Trustee may designate by written notice to the holders of the Owner Trust Certificates (the “Certificateholders”) and the Depositor.

 

Section 2.03           Purposes and Powers.  The purpose of the Trust is to engage in the following activities and the Trust shall have the power and authority:

 

(i)            to issue the Notes pursuant to the Indenture and the Owner Trust Certificates pursuant to this Trust Agreement and to sell the Notes and the Owner Trust Certificates;

 

(ii)           to pay the organizational, start-up and transactional expenses of the Trust;

 

(iii)          to acquire, hold, manage and dispose of the Owner Trust Estate (as defined in Section 2.5), to assign, grant, transfer, pledge and convey the Underlying Certificates pursuant to the Indenture and to hold, manage and distribute to the Certificateholders pursuant to Section 5.01 herein, any portion of the Underlying Certificates released from the lien of, and remitted to the Trust pursuant to the Indenture and any other Owner Trust Estate pursuant to the terms hereof;

 

(iv)          to enter into and perform its obligations under the Basic Documents to which it is to be a party;

 

(v)           if directed by a majority of the Holders of the Owner Trust Certificates, sell the Trust Estate subsequent to the discharge of the Indenture, all for the benefit of the holders of the Owner Trust Certificates;

 

(vi)          to conduct the affairs of the Trust so that the Notes are treated as indebtedness for income tax purposes pursuant to the Indenture;

 

(vii)         to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and

 

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(viii)        subject to compliance with the Basic Documents, to engage in such other activities as may be required in connection with conservation of the Owner Trust Estate and the making of distributions to the Certificateholders and the Noteholders.

 

The Trust is hereby authorized to engage in the foregoing activities. The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of this Trust Agreement or the Basic Documents.

 

Section 2.04           Appointment of Owner Trustee.  The Depositor hereby appoints Christiana Bank as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein.

 

Section 2.05           Initial Capital Contribution of Owner Trust Estate. The Depositor hereby sells, assigns, transfers, conveys and sets over to the Trust, as of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt in trust from the Depositor, as of the date hereof, of the foregoing contribution, which shall constitute the initial corpus of the Trust and shall be deposited in the Certificate Distribution Account (as defined in Section 3.10(c)) . The Owner Trustee also acknowledges on behalf of the Trust the receipt in trust pursuant to Section 3.01 of the Underlying Certificates and the rights with respect to the representations and warranties made by the Depositor hereunder which shall constitute the owner trust estate (collectively, the “Owner Trust Estate”).

 

Section 2.06           Declaration of Trust. The Owner Trustee hereby declares that it shall hold the Owner Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Certificateholders, subject to the obligations of the Trust under the Basic Documents. It is the intention of the parties hereto that the Trust constitute a “statutory trust” under the Delaware Statutory Trust Act, 12 Del. Code § 3801, et. seq. (the “Statutory Trust Statute”) and that this Trust Agreement constitute the governing instrument of such statutory trust. No later than the Closing Date, the Owner Trustee shall cause the filing of the Certificate of Trust with the Secretary of State of the State of Delaware (the “Secretary of State”). It is the intention of the parties hereto that, for federal, state and local income and franchise tax purposes, (A) the Trust Estate, for federal income tax purposes, shall be treated as either an entity that is disregarded as separate from the beneficial owner of the equity of the Trust Estate if there is only one such owner, or as a partnership (other than an association or publicly traded partnership that is taxable as a corporation) if there are two or more such owners, with the assets of the partnership being the Underlying Certificates and other assets held as part of the Trust Estate, the partners of the partnership being the Certificateholders and any holders of the Notes that are required by the IRS to be treated as equity in the Trust Estate and (B) the Notes (other than Notes the beneficial ownership of which is held by a sole owner of the Owner Trust Certificates) shall be treated as indebtedness and the provisions of this Trust Agreement shall be interpreted to further this intention. It is the intention of the parties hereto that, for federal, state and local tax purposes, the Depositor shall at no time be treated as an owner of the Underlying Certificates or as the Issuer of or obligor on indebtedness secured by the Underlying Certificates and evidenced by the Notes, and the parties hereto mutually covenant to take all pertinent tax reporting positions consistent with that intent.  The parties agree that, unless otherwise required by appropriate tax authorities, the Trust Estate will file or cause to be filed annual or other necessary

 

4

 

returns, reports and other forms consistent with the foregoing characterization of the Trust Estate (as described in (A) above) for such tax purposes. The Trust Estate shall not elect to be treated as an association under Treasury Regulations Section 301.7701-3(a) for federal income tax purposes.  Except as otherwise provided in this Trust Agreement, the rights of the Certificateholder will be those of equity owners of the Trust Estate.  Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Statutory Trust Statute with respect to accomplishing the purposes of the Trust.

 

Section 2.07           Liability of the Certificateholders. The Certificateholders shall be jointly and severally liable directly to and shall indemnify any injured party for all losses, claims, damages, liabilities and expenses of the Trust and the Owner Trustee (including Expenses (as defined in Section 7.02), to the extent not paid out of the Owner Trust Estate); provided, however, that the Certificateholders shall not be liable for payments required to be made on the Notes or the Owner Trust Certificates, or for any losses incurred by a Certificateholder in the capacity of an investor in the Owner Trust Certificates or a Noteholder in the capacity of an investor in the Notes. The Certificateholders shall be liable for and shall promptly pay any entity level taxes imposed on the Trust. In addition, any third party creditors of the Trust (other than in connection with the obligations described in the second preceding sentence for which the Certificateholders shall not be liable) shall be deemed third party beneficiaries of this paragraph. The obligations of the Certificateholders under this paragraph shall be evidenced by the Owner Trust Certificates.

 

Section 2.08           Title to Trust Property.  Except with respect to the Underlying Certificates, which will be assigned of record to the Indenture Trustee pursuant to the Indenture, legal title to the Owner Trust Estate shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Owner Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.

 

Section 2.09           Situs of Trust. The Trust will be located in the State of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in the State of Delaware or New York. The Trust shall not have any employees in any state other than Delaware; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware or taking actions outside the State of Delaware in order to comply with Section 2.03. Payments will be received by the Trust only in Delaware, California or New York, and payments will be made by the Trust only from Delaware, California or New York. The only office of the Trust will be at the Corporate Trust Office in Delaware.

 

Section 2.10           Representations and Warranties of the Depositor. The Depositor hereby represents and warrants to the Owner Trustee that:

 

(i)            The Depositor has been duly formed and is validly existing as a corporation in good standing under the laws of the State of Delaware, with full power and authority to own its assets and conduct its business as presently being conducted and to

 

5

 

execute and deliver this Trust Agreement and perform its obligations hereunder in accordance herewith.

 

(ii)           The Depositor is not in violation of its formation documents or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Depositor is a party or by which it or its properties may be bound, which default might result in any material adverse changes in the financial condition, earnings, affairs or business of the Depositor or which might materially and adversely affect the properties or assets, taken as a whole, of the Depositor.

 

(iii)          The Depositor has the power and authority to execute and deliver this Trust Agreement and to carry out its terms; the Depositor has full power and authority to convey and assign the property to be conveyed and assigned to and deposited with the Trust as part of the Owner Trust Estate and the Depositor has duly authorized such conveyance and assignment and deposit to the Trust by all necessary action; and the execution, delivery and performance of this Trust Agreement have been duly authorized by the Depositor by all necessary corporate action.

 

(iv)          The consummation of the transactions contemplated by this Trust Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the certificate of incorporation or by-laws of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the best of the Depositor’s knowledge, any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties.

 

(v)           The Trust is not required to register as an investment company under the Investment Company Act and is not under the control of a Person required to so register.

 

Section 2.11           Reserved.

 

Section 2.12           Investment Company. Neither the Depositor nor any holder of an Owner Trust Certificate shall take any action which would cause the Trust to become an “investment company” which would be required to register under the Investment Company Act.

 

Section 2.13           Transfer of Trust Estate to Trust.

 

(a)           Effective as of the date hereof, the Depositor does hereby assign, transfer, and otherwise convey to, and deposit with, the Trust, the Trust Estate, such conveyance to be made in exchange for the Notes and cash proceeds from the sale of the Owner Trust Certificates. Such assignment includes, without limitation, all amounts payable to and all rights of the holder of the Underlying Certificates pursuant to the Underlying Agreements. Pursuant to the Indenture, the

 

6

 

Trust shall pledge the Trust Estate consisting of the Underlying Certificates identified on Schedule A attached hereto as collateral for the Class A Notes issued pursuant to the Indenture.

 

(b)           The conveyance of the Underlying Certificates and all other assets constituting the  Trust Estate by the Depositor as contemplated hereby is absolute and is intended by the parties, other than for federal, state and local income and franchise tax purposes, to constitute a sale of the Underlying Certificates and all other assets constituting the Trust Estate by the Depositor to the Trust. It is, further, not intended that such conveyance be deemed a pledge of security for a loan. If such conveyance is deemed to be a pledge of security for a loan, however, the Depositor intends that the rights and obligations of the parties to such loan shall be established pursuant to the terms of this Trust Agreement. The Depositor also intends and agrees that, in such event:

 

(i)            this Trust Agreement shall constitute a security agreement under applicable law and shall be deemed to create valid and continuing security interest (as defined in the applicable UCC) in the Trust Estate (including, without limitation, the Underlying Certificates, the Certificate Distribution Account and any proceeds thereof) in favor of the Trust, which security interest is prior to all other liens, and is enforceable as such as against creditors of and purchasers from the Depositor;

 

(ii)           other than the security interest granted to the Trust pursuant to this Trust Agreement, the Depositor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed the Trust Estate, has not authorized the filing of and is not aware of any financing statements against the Trust Estate that includes a description of collateral covering the Trust Estate other than any financing statements relating to the security interest granted to the Trust hereunder or that has been terminated.  The Depositor is not aware of any judgment or tax lien filings against Depositor;

 

(iii)          the Depositor owns and has good and marketable title to the Trust Estate free and clear of any lien, claim or encumbrance of any Person;

 

(iv)          the Certificate Distribution Account constitutes a “deposit account” within the meaning of the applicable UCC.  The Depositor has directed the bank where the Certificate Distribution Account is held to take all steps necessary to cause the Certificate Paying Agent to become the account holder of the Certificate Distribution Account. The Certificate Distribution Account is not in the name of any Person other than as provided in Section 3.10 of this Trust Agreement.  The Depositor has not consented to the maintenance of the Certificate Distribution Account in compliance with instructions of any Person other than the Certificate Paying Agent;

 

(v)           the Trust Estate (excluding the Certificate Distribution Account and any proceeds thereof) constitutes “deposit accounts,” “general intangibles” and “instruments” within the meaning of the applicable UCC).  The Depositor has received all required consents and approvals to the pledge of the portions of the Trust Estate (excluding the Certificate Distribution Account and any proceeds thereof) constituting payment intangibles;

 

7

 

(vi)          the Depositor has caused or will have caused, within ten days, the filing of all appropriate financing statements in the appropriate filing offices under applicable law in order to perfect the security interest in the Trust Estate granted to the Trust hereunder. All financing statements filed or to be filed against the Depositor in favor of the Trust (or any subsequent assignee, including, without limitation, the Indenture Trustee) in connection herewith describing the Trust Estate contain a statement to the following effect, “A purchase of, or security interest in, any collateral described in this financing statement will violate the rights of the secured party;” and

 

(vii)         the Depositor shall, to the extent consistent with this Trust Agreement, take such additional reasonable actions as may be necessary to ensure that, if this Trust Agreement were deemed to create a security interest in the Underlying Certificates and the other assets of the Trust Estate, such security interest would be a perfected security interest of first priority under applicable law and will be maintained as such throughout the life of this Trust Agreement.  Notifications to, and acknowledgments, receipts or confirmations from, Persons holding such property, shall be deemed to be notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Owner Trustee on behalf of the Trust (or any subsequent assignee, including, without limitation, the Indenture Trustee) for the purpose of perfecting such security interest under applicable law.

 

(c)           The Owner Trustee declares that it holds and will hold such Trust Estate and such documents and instruments and that it holds and will hold all other assets and documents to be included in the Owner Trust Estate, in trust for the exclusive use and benefit of all present and future Certificateholders for the Owner Trust Estate.

 

(d)           Except as expressly provided in Section 8.01, neither the Depositor nor any Certificateholder shall be able to revoke the Trust established hereunder. Except as provided in Sections 2.03, 4.01, 4.02, 4.03, 5.01 and 8.01 hereof, the Owner Trustee or Certificate Paying Agent (as applicable) shall not assign, sell, dispose of or transfer any interest in, nor may the Depositor or any Certificateholder withdraw from the Trust, the Underlying Certificates or other asset constituting the Trust Estate.

 

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ARTICLE III

 

CONVEYANCE OF THE UNDERLYING CERTIFICATES; OWNER TRUST CERTIFICATES

 

Section 3.01           Conveyance of the Underlying Certificates. The Depositor, concurrently with the execution and delivery hereof, does hereby contribute, transfer, convey and assign to the Trust, without recourse, all its right, title and interest in and to the Underlying Certificates, including all interest and principal due on or with respect to the Underlying Certificates from and after the Cut-off Date (other than payments of principal and interest due on the Underlying Certificates before the Cut-off Date). If the Depositor receives any distributions in respect of the Underlying Certificates after the Cut-off Date, it shall promptly remit such distributions to the Indenture Trustee.

 

Section 3.02           Initial Beneficial Ownership. Upon the initial contribution by the Depositor pursuant to Section 2.05 and until the conveyance of the Underlying Certificates pursuant to Section 3.01 and the issuance of the Owner Trust Certificates, and thereafter except as otherwise permitted hereunder, the Depositor shall be the sole beneficial owner.

 

Section 3.03           The Owner Trust Certificates.  The Trust shall issue Owner Trust Certificates representing the beneficial ownership interest in the Trust. On the Closing Date, the Issuer shall cause the Owner Trust Certificates to be issued in the name of Impac Mortgage Holdings, Inc. in exchange for cash proceeds, which proceeds shall be remitted to the Depositor as part of the purchase price for the Underlying Certificates. The Owner Trust Certificates shall be issued in registered form with 100% of the Percentage Interests of the Trust to be executed on behalf of the Trust, authenticated and delivered to Impac Mortgage Holdings, Inc. The Owner Trust Certificates shall be issued in definitive, fully registered form and shall be held by a single Certificateholder at all times.

 

The Owner Trust Certificates shall be executed on behalf of the Trust by manual or facsimile signature of an Authorized Officer of the Owner Trustee and authenticated by the Certificate Registrar in the manner provided in Section 3.04. An Owner Trust Certificate bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefit of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Owner Trust Certificates or did not hold such offices at the date of authentication and delivery of such Owner Trust Certificates.  A transferee of an Owner Trust Certificate shall become a Certificateholder and shall be entitled to the rights and subject to the obligations of a Certificateholder hereunder upon such transferee’s acceptance of an Owner Trust Certificate duly registered in such transferee’s name pursuant to and upon satisfaction of the conditions set forth in Section 3.05.

 

Section 3.04           Authentication of Owner Trust Certificates.  All Certificates issued hereunder shall be executed by the Owner Trustee on behalf of the Trust, authenticated by the Certificate Registrar and delivered to or upon the written order of the Depositor, signed by its

 

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chairman of the board, its president or any vice president, without further corporate action by the Depositor, in authorized denominations.  No Certificate shall entitle its holder to any benefit under this Trust Agreement or be valid for any purpose unless there shall appear on such Owner Trust Certificate a certificate of authentication substantially in the form set forth in Exhibit A-1, executed by the Certificate Registrar by manual signature; such authentication shall constitute conclusive evidence that such Owner Trust Certificate shall have been duly authenticated and delivered hereunder. All Owner Trust Certificates shall be dated the date of their authentication.

 

Section 3.05           Registration of and Limitations on Transfer and Exchange of Owner Trust Certificates.

 

(a)           The Certificate Registrar shall keep or cause to be kept, a certificate register (the “Certificate Register”) in which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of the Owner Trust Certificates and of transfers and exchanges of Owner Trust Certificates as herein provided. Deutsche Bank National Trust Company shall be the initial Certificate Registrar. If the Certificate Registrar resigns or is removed, the Depositor shall appoint a successor Certificate Registrar.

 

(b)           Subject to satisfaction of the conditions set forth below with respect to the Owner Trust Certificates, upon surrender for registration of transfer of 100% of the Percentage Interests in the Owner Trust Certificates at the office or agency maintained pursuant to Section 3.09, the Owner Trustee or the Certificate Registrar shall execute, authenticate and deliver in the name of the designated transferee, a new Owner Trust Certificate evidencing no less than a 100% Percentage Interest dated the date of authentication by the Owner Trustee or the Certificate Registrar. At the option of a Certificateholder, Owner Trust Certificates may be exchanged for other Owner Trust Certificates evidencing no less than a 100% Percentage Interest, upon surrender of the Owner Trust Certificates to be exchanged at the office or agency maintained pursuant to Section 3.09. Notwithstanding the foregoing and to the fullest extent permitted by law, no transfer of the Owner Trust Certificates shall be made to any entity other than to an affiliate of the initial holder (other than the Depositor) unless the Note Balance of the Notes has been reduced to zero or the amount on deposit in the Reserve Account is equal to the Required Reserve Amount Target.

 

Every Owner Trust Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Certificate Registrar duly executed by the Certificateholder or such Certificateholder’s attorney duly authorized in writing. Each Owner Trust Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of by the Certificate Registrar in accordance with its customary practice.

 

No service charge shall be made for any registration of transfer or exchange of Owner Trust Certificates, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Owner Trust Certificates.

 

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Except for the initial issuance of the Owner Trust Certificates on the Closing Date, no Person shall become a Certificateholder of the Owner Trust Certificates until the requirements of Section 3.05(g) shall have been complied with.

 

(c)           The Owner Trust Certificates shall be assigned, transferred, exchanged, pledged, financed, hypothecated or otherwise conveyed (collectively, for purposes of this Section 3.05 and any other Section referring to the Owner Trust Certificates, “transferred” or a “transfer”) only in accordance with this Section 3.05.

 

(d)           Except in connection with the initial transfer of the Owner Trust Certificates, no transfer of an Owner Trust Certificate shall be made unless such transfer is made pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or is exempt from the registration requirements under the Securities Act and such state securities laws. In the event that a transfer is to be made in reliance upon an exemption from the Securities Act and such laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such transfer and such Certificateholder’s prospective transferee shall each certify to the Certificate Registrar in writing the facts surrounding the transfer by (x) the delivery to the Certificate Registrar by the Certificateholder desiring to effect such transfer of a certificate substantially in the form set forth in Exhibit D (the “Transferor Certificate”) and the delivery by the Certificateholder’s prospective transferee of a letter in substantially the form of Exhibit F (the “Transferee Certificate”) stating that the prospective transferee is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) or (y) there shall be delivered to the Certificate Registrar an Opinion of Counsel addressed to the Indenture Trustee that such transfer may be made pursuant to an exemption from the Securities Act and the 1940 Act, which Opinion of Counsel shall not be an expense of the Depositor, the Certificate Registrar, the Owner Trustee, the Trust or the Indenture Trustee. Each Certificateholder desiring to effect such transfer shall, and does hereby agree to, indemnify the Indenture Trustee, the Certificate Registrar, the Certificate Paying Agent, the Depositor and the Owner Trustee against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

 

(e)           With respect to the transfer of an Owner Trust Certificate such Person shall comply with the provisions of Section 3.12 relating to the ERISA restrictions with respect to the acceptance or acquisition of such Owner Trust Certificate.

 

(f)            For so long as any of the Owner Trust Certificates are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Certificate Registrar agrees to cooperate with, and act in accordance with the direction of, the Depositor in providing to any Certificateholders and to any prospective purchaser of Owner Trust Certificates designated by such Certificateholder, upon the request of such Certificateholder or prospective purchaser, any information in the Certificate Registrar’s possession and required to be provided to such holder or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4) under the Securities Act. Any reasonable, out-of-pocket expenses incurred by the Certificate Registrar in providing such information shall be reimbursed by the Depositor.

 

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(g)           By its acceptance of an Owner Trust Certificate, each prospective Certificateholder agrees and acknowledges that no legal or beneficial interest in all or any portion of any Owner Trust Certificate may be transferred directly or indirectly to an individual, corporation, partnership or other Person unless such transferee provides the Certificate Registrar with a properly completed IRS Form W-9 or IRS Form W-8BEN and/or such other form and information satisfactory to the Certificate Registrar that no federal income tax withholding is required on payments to the Trust or the Certificateholders; and if such form or other information is not provided, then any such purported transfer shall be void and of no effect.

 

Section 3.06           Mutilated, Destroyed, Lost or Stolen Owner Trust Certificates. If (a) any mutilated Owner Trust Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Owner Trust Certificate and (b) there shall be delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice to the Certificate Registrar or the Owner Trustee that such Owner Trust Certificate has been acquired by a bona fide purchaser, the Owner Trustee shall execute on behalf of the Trust and the Certificate Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Owner Trust Certificate, a new Owner Trust Certificate of like tenor and denomination. In connection with the issuance of any new Owner Trust Certificate under this Section 3.06, the Owner Trustee or the Certificate Registrar may require the payment of a sum sufficient to cover any expenses of the Owner Trustee or the Certificate Registrar (including fees and expenses of counsel) and any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Owner Trust Certificate issued pursuant to this Section 3.06 shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Owner Trust Certificate shall be found at any time.

 

Section 3.07           Persons Deemed Certificateholders. Prior to due presentation of an Owner Trust Certificate for registration of transfer, the Owner Trustee, the Certificate Registrar or any Certificate Paying Agent may treat the Person in whose name any Certificate is registered in the Certificate Register as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 5.02 and for all other purposes whatsoever, and none of the Trust, the Owner Trustee, the Certificate Registrar or any Certificate Paying Agent shall be bound by any notice to the contrary.

 

Section 3.08           Access to List of Certificateholders’ Names and Addresses.  The Certificate Registrar shall furnish or cause to be furnished to the Depositor, the Certificate Paying Agent or the Owner Trustee, within 15 days after receipt by the Certificate Registrar of a written request therefor from the Depositor, the Certificate Paying Agent or the Owner Trustee, a list, in such form as the Depositor, the Certificate Paying Agent or the Owner Trustee, as the case may be, may reasonably require, of the names and addresses of the Certificateholders as of the most recent Record Date.  Each Certificateholder, by receiving and holding an Owner Trust Certificate, shall be deemed to have agreed not to hold any of the Trust, the Depositor, the Certificate Paying Agent, the Certificate Registrar or the Owner Trustee accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.

 

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Section 3.09           Maintenance of Office or Agency. The Trust shall maintain an office or offices or agency or agencies where Owner Trust Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Trust or the Owner Trustee in respect of the Owner Trust Certificates may be served. The Trust initially designates the Corporate Trust Office of the Certificate Registrar for purposes of such surrender and for service of notices or demands. The Owner Trustee, on behalf of the Trust, shall give prompt written notice to the Depositor, the Certificate Paying Agent, the Certificate Registrar and the Certificateholders of any change in the location of the Certificate Register or any such office or agency.

 

Section 3.10           Certificate Paying Agent.

 

(a)           The Certificate Paying Agent shall make distributions to Certificateholders from the Certificate Distribution Account on behalf of the Trust in accordance with the provisions of the Owner Trust Certificates and Section 5.01 hereof from payments remitted to the Certificate Paying Agent by the Indenture Trustee pursuant to Section 2.09(e) of the Indenture. The Trust hereby appoints Deutsche Bank National Trust Company, as Certificate Paying Agent, and Deutsche Bank National Trust Company, hereby accepts such appointment and further agrees that it will be bound by the provisions of this Trust Agreement relating to the Certificate Paying Agent and shall:

 

(i)            hold all sums held by it for the payment of amounts due with respect to the Owner Trust Certificates in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

 

(ii)           give the Owner Trustee notice of any default by the Trust of which a Responsible Officer of the Certificate Paying Agent has actual knowledge in the making of any payment required to be made with respect to the Owner Trust Certificates;

 

(iii)          at any time during the continuance of any such default, upon the written request of the Owner Trustee forthwith pay to the Owner Trustee on behalf of the Trust all sums so held in trust by such Certificate Paying Agent;

 

(iv)          not resign from its position as Certificate Paying Agent so long as it is Indenture Trustee except that it shall immediately resign as Certificate Paying Agent and forthwith pay to the Owner Trustee on behalf of the Trust all sums held by it in trust for the payment of Owner Trust Certificates if at any time it ceases to meet the standards under this Section 3.10 required to be met by the Certificate Paying Agent at the time of its appointment;

 

(v)           comply with all requirements of the Code with respect to the withholding from any payments made by it on any Owner Trust Certificates of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; and

 

(vi)          not institute bankruptcy proceedings against the Issuer in connection with this Trust Agreement.

 

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(b)           The Trust may revoke the power of the Certificate Paying Agent and remove the Certificate Paying Agent if it determines in its sole discretion that the Certificate Paying Agent shall have failed to perform its obligations under this Trust Agreement in any material respect. In the event that Deutsche Bank National Trust Company, shall no longer be the Certificate Paying Agent under this Trust Agreement and Paying Agent under the Indenture, the Depositor shall appoint a successor to act as Certificate Paying Agent (which shall be a bank or trust company) and which shall also be the successor Paying Agent under the Indenture.  The Depositor shall cause such successor Certificate Paying Agent or any additional Certificate Paying Agent hereunder to execute and deliver to the Owner Trustee an instrument to the effect set forth in Section 3.10(a) as it relates to the Certificate Paying Agent. The Certificate Paying Agent shall return all unclaimed funds to the Trust and upon removal of a Certificate Paying Agent such Certificate Paying Agent shall also return all funds in its possession to the Trust. The provisions of Sections 6.01, 6.04, 6.05, 6.06, 6.07, 6.08 and 7.01 shall apply to the Certificate Paying Agent to the extent applicable. Any reference in this Trust Agreement to the Certificate Paying Agent shall include any co-paying agent unless the context requires otherwise.

 

(c)           The Certificate Paying Agent shall establish and maintain with itself a segregated, non-interest bearing trust account (the “Certificate Distribution Account”) in which the Certificate Paying Agent shall deposit, on the same day as it is received from the Indenture Trustee, each remittance received by the Certificate Paying Agent with respect to payments made pursuant to the Indenture.  The Certificate Paying Agent shall make all distributions to Certificateholders, from moneys on deposit in the Certificate Distribution Account, in accordance with Section 5.01 hereof. The funds in the Certificate Distribution Account shall be held uninvested.

 

Section 3.11           Distributions on the Owner Trust Certificates. The Certificateholders will be entitled to distributions on each Payment Date as provided in Section 2.09(e) of the Indenture.

 

Section 3.12           ERISA Restrictions. The Owner Trust Certificates may not be acquired or transferred to a transferee for or on behalf of a Plan. Each prospective transferee, other than the Depositor or its Affiliates, shall represent and warrant to the Certificate Registrar that it is not a Plan or any person acting on behalf of, or purchasing such Owner Trust Certificate with assets of, a Plan, in accordance with Exhibit F hereto.

 

Section 3.13           Representations and Warranties Relating to the Underlying Certificates. The Depositor represents, warrants and covenants to the Trust as of the Closing Date or as of such other date specifically provided herein:

 

(a)           The Depositor has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement and this Agreement, assuming due authorization, execution and delivery by the Owner Trustee, constitutes a legal, valid and binding obligation of the Depositor, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in

 

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equity). At the time of the sale of the Underlying Certificates by the Depositor, the Depositor had the full power and authority to hold the Underlying Certificates and to sell the Underlying Certificates;

 

(b)           The Depositor does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

 

(c)           To the best of the Depositor’s knowledge, there are no actions or proceedings against, or investigations known to it of, the Depositor before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the sale of the Underlying Certificates or the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by the Depositor of its obligations under, or validity or enforceability of, this Agreement;

 

(d)           No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Depositor of, or compliance by the Depositor with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained;

 

(e)           The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Depositor, and the transfer, assignment and conveyance of the Underlying Certificates by the Depositor pursuant to this Agreement are not subject to bulk transfer or any similar statutory provisions;

 

(f)            The Depositor has not transferred the Underlying Certificates with any intent to hinder, delay or defraud any of its creditors; and

 

(g)           The Underlying Certificates have not been assigned or pledged by the Depositor, and immediately prior to the transfer and assignment herein contemplated, the Depositor held good, marketable and indefeasible title to, and was the sole owner and holder of, the Underlying Certificates subject to no liens; the Depositor has full right and authority under all governmental and regulatory bodies having jurisdiction over the Depositor, subject to no interest or participation of, or agreement with, any party, to sell and assign the same pursuant to this Agreement; and immediately upon the transfers and assignments herein contemplated, the Depositor shall have transferred all of its right, title and interest in and to the Underlying Certificates and the Trust will hold good, marketable and indefeasible title to, and be the sole owner of, the Underlying Certificates subject to no liens.

 

Section 3.14           Remedies for Breach of Representations and Warranties.

 

(a)           It is understood and agreed that the representations and warranties set forth in Section 3.13 shall survive the sale of the Underlying Certificates from the Depositor to the Trust and shall inure to the benefit of the Trust. Upon discovery by any of the Depositor, the Trust or the Indenture Trustee of a breach of any of the foregoing representations and warranties that materially and adversely affects the value of the Underlying Certificates or the interest of the

 

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Trust, the party discovering such breach shall give prompt written notice to the other. Promptly following the earlier of either discovery by or notice to the Depositor of any breach of a representation or warranty made by the Depositor that materially and adversely affects the value of the Underlying Certificates or the interest therein of the Trust, the Depositor shall cure such breach in all material respects.

 

(b)           It is understood and agreed that the representations and warranties set forth in Section 3.13 shall survive delivery of the Underlying Certificates to the Indenture Trustee by the Trust.

 

(c)           It is understood and agreed that the obligations of the Depositor set forth in this Section 3.14 to cure any breach of the representations and warranties contained in Section 3.13 that materially and adversely affects the value of the Underlying Certificates or the interest of the Trust constitutes the sole remedy of the Trust respecting any breach of such representations and warranties.

 

(d)           Upon any failure by the Depositor to cure in all material respects any breach of representation or warranty that materially and adversely affects the value of the Underlying Certificates pursuant to this Section 3.14, Impac Mortgage Holdings, Inc., hereby agrees with the Trust, for the sole and exclusive benefit of the Trust, to cure such breach in all material respects.

 

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ARTICLE IV

 

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

Section 4.01           General Authority.  The Owner Trustee is authorized and directed to execute and deliver the Basic Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to be a party and any amendment or other agreement or instrument described herein all as approved by the Depositor, as evidenced conclusively by the Owner Trustee’s execution thereof. In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, except as otherwise provided in this Trust Agreement, to take all actions required of the Trust pursuant to the Basic Documents. The Owner Trustee is further authorized to take such actions as the Administrator or the Certificateholders direct in writing with respect to the Basic Documents. The Owner Trustee shall not be liable for any action taken pursuant to the direction of an Administrator or the Certificateholders.

 

Section 4.02           General Duties.

 

(a)           It shall be the duty of the Owner Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this Trust Agreement in the interest of the Certificateholders, subject to the Basic Documents and in accordance with the provisions of this Trust Agreement. The Owner Trustee shall have no duty to monitor or perform the obligations of the Trust except as expressly agreed pursuant to this Trust Agreement.

 

(b)           Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder to the extent an Administrator has agreed to perform any act or discharge any duty of the Trust or the Owner Trustee hereunder or under the other Basic Documents and the Owner Trustee shall not be liable for the default or failure of such Administrator to carry out its obligations.

 

Section 4.03           Action upon Instruction.

 

(a)           Subject to Article IV and in accordance with the terms of the Basic Documents, the Certificateholders may by written instruction direct the Owner Trustee in the management of the Trust.  Such direction may be exercised at any time by written instruction of the Certificateholders pursuant to Article IV.

 

(b)           Notwithstanding the foregoing, the Owner Trustee shall not be required to take any action hereunder or under any Basic Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any Basic Document or is otherwise contrary to law.

 

(c)           Whenever the Owner Trustee is required to decide between alternative courses of action permitted or required by the terms of this Trust Agreement or under any Basic Document, or in the event that the Owner Trustee is unsure as to the application of any provision of this Trust Agreement or any Basic Document or any such provision is ambiguous as to its

 

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application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Trust Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Certificateholders, the Owner Trustee shall not be liable on account of such action to any Person. If the Owner Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement or the Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and the Owner Trustee shall have no liability to any Person for such action or inaction.

 

Section 4.04           No Duties Except as Specified under Specified Documents or in Instructions.  The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee or the Trust is a party, except as expressly provided (i) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Trust Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance with any document or instruction delivered to the Owner Trustee pursuant to Section 4.03; and no implied duties or obligations shall be read into this Trust Agreement or any Basic Document against the Owner Trustee.  The provisions of this Trust Agreement, to the extent that they restrict or eliminate the duties (including fiduciary duties) and liabilities of the Owner Trustee otherwise existing at law or in equity, replace such other duties and liabilities of the Owner Trustee. The Owner Trustee shall have no responsibility to prepare or file any financing or continuation statement in any public office at anytime or to otherwise perfect or maintain the perfection of any security interest or lien granted to it or the Trust hereunder or to prepare or file any Securities and Exchange Commission filing for the Trust or to record this Trust Agreement or any Basic Document. Notwithstanding any provision herein or in any other Basic Document, the Owner Trustee shall not be obligated to prepare, file or execute any documents or certifications required to be filed by the Trust pursuant to the Sarbanes-Oxley Act of 2002, as amended. The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens on any part of the Owner Trust Estate that result from actions by, or claims against, the Owner Trustee in its individual capacity that are not related to the ownership or the administration of the Owner Trust Estate.

 

Section 4.05           Restrictions.

 

(a)           Neither the Owner Trustee nor the Depositor (nor an Affiliate thereof) shall take any action (x) that is inconsistent with the purposes of the Trust set forth in Section 2.03, (y) that, to the actual knowledge of the Owner Trustee based on an Opinion of Counsel rendered at the expense of the Person requesting such action by a law firm generally recognized to be qualified

 

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to opine concerning the tax aspects of asset securitization, would result in a Trust Estate becoming taxable as a corporation for federal income tax purposes or otherwise subject to federal income taxes at the entity level or (z) that to the actual knowledge of the Owner Trustee would result in the amendment or modification of this Trust Agreement except as permitted by Section 10.01 hereof. Neither the Certificateholders nor the Administrator shall direct the Owner Trustee to take action that would violate the provisions of this Section 4.05 and the Owner Trustee shall have no obligation to follow any such instruction in violation of this Section.  The Owner Trustee shall not be charged with actual knowledge unless a Responsible Officer of the Owner Trustee has received written notice of such fact, issue or event at the Corporate Trust Office of the Owner Trustee.

 

(b)           Except as otherwise permitted by the Basic Documents, the Owner Trustee shall not convey or transfer any of the Trust’s properties or assets, including those included in the Trust Estate, to any person or accept any further contribution to the Owner Trust Estate, unless it shall have received an Opinion of Counsel (which Opinion of Counsel shall not be at the expense of the Owner Trustee) rendered by a law firm generally recognized to be qualified to opine concerning the tax aspects of asset securitization to the effect that such transaction will not have any material adverse tax consequence to the Trust Estate or any Certificateholder or any Noteholder.

 

Section 4.06           Prior Notice to Certificateholders with Respect to Certain Matters. With respect to the following matters, the Owner Trustee shall not take action unless, at least 10 days before the taking of such action, the Owner Trustee shall have notified the Certificateholders in writing of the proposed action and the Certificateholders shall not have notified the Owner Trustee in writing prior to the 10th day after such notice is given that such Certificateholders have withheld consent or provided alternative direction:

 

(a)           the initiation of any claim or lawsuit by the Trust (except claims or lawsuits brought in connection with the collection of cash distributions due and owing under the Underlying Certificates) and the compromise of any action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of cash distributions due and owing under the Underlying Certificates);

 

(b)           the election by the Trust to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the Statutory Trust Statute);

 

(c)           the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is required;

 

(d)           the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is not required and such amendment materially adversely affects the interest of the Certificateholders; and

 

(e)           the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or Indenture Trustee or pursuant to this Trust Agreement of a successor Certificate Registrar or Certificate Paying Agent or the consent to the assignment by the Note Registrar,

 

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Paying Agent, Indenture Trustee, Certificate Registrar or Certificate Paying Agent of its obligations under the Indenture or this Trust Agreement, as applicable.

 

Section 4.07           Action by Certificateholders with Respect to Certain Matters.

 

(a)           The Owner Trustee shall not have the power, except upon the direction of the Certificateholders to sell the Underlying Certificates after the termination of the Indenture (except as expressly provided in the Basic Documents).  The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the Certificateholders and in accordance with Section 4.05(b) hereof.

 

(b)           At any time after the amount in the Reserve Account is equal to the Required Reserve Account Amount pursuant to Section 2.15 of the Indenture, the Certificateholder shall have the right to direct each of the Indenture Trustee to release the Underlying Certificates from the lien of the Indenture and to deliver or cause to be delivered to the Certificateholders, the physical certificates evidencing the then remaining Underlying Certificates that are held in fully registered, certificated form, endorsed to the Certificateholder or its designee.

 

Section 4.08           Action by Certificateholders with Respect to Bankruptcy.  The Owner Trustee shall not have the power to commence a voluntary proceeding in bankruptcy relating to the Trust without the unanimous prior approval of all Certificateholders and the delivery to the Owner Trustee by each such Certificateholder of a certificate certifying that such Certificateholder reasonably believes that the Trust is insolvent. This paragraph shall survive for one year following termination of this Trust Agreement.

 

Section 4.09           Restrictions on Certificateholders’ Power. The Certificateholders shall not direct the Owner Trustee to take or to refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Trust Agreement or any of the Basic Documents or would be contrary to Section 2.03 or any applicable law, nor shall the Owner Trustee be obligated to follow any such direction, if given.

 

Section 4.10           Majority Control.  Except as expressly provided herein, any action that may be taken by the Certificateholders under this Trust Agreement may be taken by the Certificateholders, except as expressly provided in the Basic Documents, evidencing not less than a majority percentage interest of the Owner Trust Certificates.  Except as expressly provided herein, any written notice of the Certificateholders delivered pursuant to this Trust Agreement shall be effective if signed by Certificateholders evidencing not less than a majority percentage interest of the Owner Trust Certificates at the time of the delivery of such notice.

 

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ARTICLE V

 

APPLICATION OF TRUST FUNDS

 

Section 5.01           Distributions.

 

(a)           On each Payment Date, the Certificate Paying Agent shall distribute to the Certificateholders all funds on deposit in the Certificate Distribution Account and available therefor in accordance with Section 3.11 for such Payment Date.

 

(b)           In the event that any withholding tax is imposed on the distributions (or allocations of income) to a Certificateholder, such tax shall reduce the amount otherwise distributable to the Certificateholder in accordance with this Section 5.01.  The Certificate Paying Agent is hereby authorized and directed to retain or cause to be retained (and remit or cause to be remitted to the Indenture Trustee) amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed by the Trust (but such authorization shall not prevent the Owner Trustee from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings) upon receipt of written notice by the Certificate Paying Agent of the amount and due date of any such tax.  The amount of any withholding tax imposed with respect to a Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is withheld by the Certificate Paying Agent and remitted to the appropriate taxing authority. If there is a possibility that withholding tax is payable with respect to a distribution (such as a distribution to a non-U.S. Certificateholder), the Certificate Paying Agent may in its sole discretion withhold such amounts in accordance with this paragraph (b).

 

(c)           Distributions to Certificateholders shall be subordinated to the creditors of the Trust, including the Noteholders.

 

Section 5.02           Method of Payment. Subject to Section 8.01(c), distributions required to be made to Certificateholders on any Payment Date as provided in Section 3.11 and Section 5.01 shall be made to each Certificateholder of record on the preceding Record Date by wire transfer, in immediately available funds, to the account of such Certificateholder at a bank or other entity having appropriate facilities therefor, if such Certificateholder shall have provided to the Certificate Registrar appropriate written instructions at least five Business Days prior to such Payment Date or, if not, by check mailed to such Certificateholder at the address of such Certificateholders appearing in the Certificate Register.

 

Section 5.03           [Reserved].

 

Section 5.04           Tax Matters and Tax Returns.

 

(a)           The Certificateholders acknowledge that it is their intent and that they understand it is the intent of the other parties to this Trust Agreement that, for U.S. federal, state and local income and franchise tax and any other income taxes, the Trust Estate will be treated as an entity that is disregarded as separate from the beneficial owner of the equity in the Trust Estate and not as an association taxable as a corporation, a publicly traded partnership, taxable as a corporation

 

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or a taxable mortgage pool. In the event that the Owner Trust Certificates are beneficially owned by more than one holder for federal income tax purposes, or is in any event successfully recharacterized by the IRS as a partnership, the Certificateholders shall be subject to all of the provisions of subchapter K of chapter 1 of subtitle A of the Code. If the Trust Estate is characterized as a partnership, the Certificate Paying Agent shall establish and maintain capital accounts for each Certificateholder (or beneficial owner thereof) in accordance with the Treasury Regulations under Section 704(b) of the Code reflecting each such Certificateholder’s (or beneficial owner’s) pro rata share of the income, gains, deductions and losses of the Trust and/or insurance made by or on behalf of the Trust Estate and contributions to, and distributions from, the Trust Estate.

 

(b)           If the Trust Estate is characterized as a partnership for U.S. federal income tax purposes, the Certificateholder shall be (i) designated as the “tax matters partner” for such partnership and (ii) shall instruct the Indenture Trustee to file an application with the IRS for a taxpayer identification number with respect to the Trust Estate and to prepare or cause to be prepared and file partnership tax returns including the partnership information return on Form 1065 in connection with the transactions contemplated hereby (the “Tax Return”); provided, however, that the Indenture Trustee shall not be required to prepare and file partnership tax returns in respect of any partnership unless it receives additional reasonable compensation for the preparation of such filings and only to the extent it receives written notification from the Certificateholder recognizing the creation of a partnership agreement or comparable documentation evidencing a partnership, it being understood that the Indenture Trustee shall have no obligation to monitor whether a partnership has been created.  Upon transfer of a beneficial ownership interest in an Owner Trust Certificate by a holder thereof to a Person (other than to a Person disregarded as an entity separate from the transferor), the transferor shall provide written notice to the Indenture Trustee of such transfer and shall provide the Indenture Trustee, upon request, any information reasonably required by the Indenture Trustee, for purposes of preparing any Tax Return; provided, however, that the Indenture Trustee shall send or cause to be sent a copy of the completed Tax Return, to the Certificateholders by the due date of the Tax Return, including any extensions.  The Depositor and the Certificateholders shall each, upon request by the Indenture Trustee, furnish the Indenture Trustee with all such information as may be reasonably required from the Depositor or the Certificateholders in connection with the preparation of such Tax Return. The Indenture Trustee shall keep copies of the Tax Returns delivered to or filed by it. No party to this Trust Agreement is authorized to make an election under Treasury Regulation Section 301.7701-3 to treat a Trust Estate as an association taxable as a corporation for federal income tax purposes.

 

(c)           Pursuant to the Indenture, the Indenture Trustee will maintain (or cause to be maintained) the books of the Trust Estate on a calendar year basis using the accrual method of accounting and will prepare and file or cause to be prepared and filed such tax returns relating to the Trust Estate as may be required by the Code and applicable Treasury Regulations (making such elections as may from time to time be required or appropriate under any applicable state or federal statutes, rules or regulations). Pursuant to the Indenture and solely with respect to filing Form 1099 tax returns, the Indenture Trustee has agreed that it shall (a) deliver (or cause to be delivered) to each Noteholder and Certificateholder as may be required by the Code and applicable Treasury Regulations, such information as may be required to enable such Noteholder

 

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and Certificateholder to prepare its federal and state income tax returns and (b) collect or cause to be collected any withholding tax as described in and in accordance with Section 5.01 of this Trust Agreement with respect to income or distributions to the Certificateholder and prepare or cause to be prepared the appropriate forms relating thereto. The Owner Trustee shall sign all tax and information returns prepared or caused to be prepared by the Indenture Trustee pursuant to this Section 5.04 at the request of the Indenture Trustee, and in doing so shall rely entirely upon, and shall have no liability for information or calculations provided by, the Indenture Trustee.

 

Section 5.05           Statements to Certificateholders. On each Payment Date, the Certificate Paying Agent shall make available via its website to each Certificateholder the statement or statements prepared by the Indenture Trustee pursuant to Section 6.04 of the Indenture with respect to such Payment Date.

 

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ARTICLE VI

 

CONCERNING CHRISTIANA BANK

 

Section 6.01           Acceptance of Trusts and Duties.  Christiana Bank accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Trust Agreement. Christiana Bank and the Certificate Paying Agent also agree to disburse all moneys actually received by it constituting part of the Owner Trust Estate upon the terms of the Basic Documents and this Trust Agreement. Christiana Bank shall not be answerable or accountable hereunder or under any Basic Document under any circumstances, except (i) for its own willful misconduct, gross negligence or bad faith or grossly negligent failure to act or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 6.03 expressly made by Christiana Bank. In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):

 

(a)           Christiana Bank shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Certificateholders or an Administrator permitted under this Trust Agreement;

 

(b)           No provision of this Trust Agreement or any Basic Document shall require Christiana Bank to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights, duties or powers hereunder or under any Basic Document if Christiana Bank shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it;

 

(c)           Under no circumstances shall Christiana Bank be liable for any representation, warranty, covenant, obligation or indebtedness evidenced by or arising under any of the Basic Documents, including the principal of and interest on the Notes;

 

(d)           Christiana Bank shall not be responsible for or in respect of the validity or sufficiency of this Trust Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of the Owner Trust Estate, or for or in respect of the validity or sufficiency of the Basic Documents, the Notes, the Owner Trust Certificates, other than the certificate of authentication on the Owner Trust Certificates, if executed and authenticated by Christiana Bank and Christiana Bank shall in no event assume or incur any liability, duty, or obligation to any Noteholder or to any Certificateholder, other than as expressly provided for herein;

 

(e)           Christiana Bank shall not be liable for the default or misconduct of the Depositor, Administrators, Indenture Trustee, Certificate Registrar or Certificate Paying Agent under any of the Basic Documents or otherwise and Christiana Bank shall have no obligation or liability to perform the obligations of the Trust under this Trust Agreement or the Basic Documents that are required to be performed by the Indenture Trustee under the Indenture, any Administrator under the Administration Agreement, the Certificate Paying Agent, the Certificate Registrar, the Depositor or any other Person;

 

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(f)            Christiana Bank shall be under no obligation to exercise any of the rights or powers vested in it or duties imposed by this Trust Agreement, or to institute, conduct or defend any litigation under this Trust Agreement or otherwise or in relation to this Trust Agreement or any Basic Document, at the request, order or direction of any of the Certificateholders, unless such Certificateholders have offered to Christiana Bank security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by Christiana Bank therein or thereby. The right of Christiana Bank to perform any discretionary act enumerated in this Trust Agreement or in any Basic Document shall not be construed as a duty, and Christiana Bank shall not be answerable for other than its gross negligence or willful misconduct in the performance of any such act;

 

(g)           Christiana Bank shall not be personally liable for (x) special, consequential or punitive damages, however styled, including without limitation, lost profits or (y) any losses due to forces beyond the control of Christiana Bank, including, without limitation, strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services; and

 

(h)           Christiana Bank shall not be personally liable for any error of judgment made in good faith by any of its officers or employees.

 

Section 6.02           Furnishing of Documents.  Christiana Bank shall furnish to the Noteholders and Certificateholders promptly upon receipt of a written reasonable request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to Christiana Bank under the Basic Documents.

 

Section 6.03           Representations and Warranties.  Christiana Bank hereby represents and warrants to the Depositor, for the benefit of the Certificateholders, that:

 

(a)           It is a Delaware banking corporation duly organized and validly existing in good standing under the laws of the State of Delaware.  It has all requisite power and authority to execute, deliver and perform its obligations under this Trust Agreement;

 

(b)           It has taken all corporate action necessary to authorize the execution and delivery by it of this Trust Agreement, and this Trust Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Trust Agreement on its behalf;

 

(c)           Neither the execution nor the delivery by it of this Trust Agreement, nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any federal or Delaware law, governmental rule or regulation governing the banking or trust powers of Christiana Bank or any judgment or order binding on it, or constitute any default under its charter documents or bylaws or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be bound;

 

(d)           This Trust Agreement assuming due authorization, execution and delivery by the Depositor, the Certificate Registrar and the Certificate Paying Agent, constitutes a valid, legal 

 

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and binding obligation of Christiana Bank, enforceable against it in accordance with the terms hereof subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law;

 

(e)           The execution, delivery, authentication and performance by it of this Trust Agreement will not require the authorization, consent or approval of, the giving of notice to, the filing or registration with, or the taking of any other action with respect to, any governmental authority or agency other than the filing of the Certificate of Trust with the Secretary of State;

 

(f)            Christiana Bank is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or other) or operations of Christiana Bank or its properties or might have consequences that would materially adversely affect its performance hereunder; and

 

(g)           No litigation is pending or, to the best of Christiana Bank’s knowledge, threatened against Christiana Bank which would prohibit its entering into this Trust Agreement or performing its obligations under this Trust Agreement.

 

Section 6.04           Reliance; Advice of Counsel.

 

(a)           Christiana Bank shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, note, or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties.  Christiana Bank may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the method of determination of which is not specifically prescribed herein, Christiana Bank may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such fact or matter and such certificate shall constitute full protection to Christiana Bank for any action taken or omitted to be taken by it in good faith in reliance thereon.

 

(b)           In the exercise or administration of the Trust hereunder and in the performance of its duties and obligations under this Trust Agreement or the Basic Documents, Christiana Bank (i) may act directly or through its agents, attorneys, custodians or nominees (including persons acting under a power of attorney) pursuant to agreements entered into with any of them, and Christiana Bank shall not be liable for the conduct or misconduct of such agents, attorneys, custodians or nominees (including persons acting under a power of attorney) if such persons have been selected in good faith by Christiana Bank and (ii) may consult with counsel, accountants and other skilled persons to be selected in good faith and employed by it at the expense of the Trust. Christiana Bank shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the opinion or advice of any such counsel, accountants or other such Persons and not contrary to this Trust Agreement or any Basic Document.

 

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Section 6.05           Not Acting in Individual Capacity. Except as provided in this Article VI, in accepting the trusts hereby created Christiana Bank acts solely as Owner Trustee hereunder and not in its individual capacity, and all Persons having any claim against Christiana Bank by reason of the transactions contemplated by this Trust Agreement or any Basic Document shall look only to the Owner Trust Estate for payment or satisfaction thereof.

 

Section 6.06           Christiana Bank Not Liable for Certificates or Related Documents. The recitals contained herein and in the Owner Trust Certificates (other than the signatures of Christiana Bank on the Owner Trust Certificates) shall be taken as the statements of the Depositor, and Christiana Bank assumes no responsibility for the correctness thereof. Christiana Bank makes no representations as to the validity or sufficiency of this Trust Agreement, of any Basic Document or of the Owner Trust Certificates (other than the signatures of Christiana Bank on the Owner Trust Certificates) or the Notes, or of any Related Documents. Christiana Bank shall at no time have any responsibility or liability with respect to the sufficiency of the Owner Trust Estate or its ability to generate the payments to be distributed to Certificateholders under this Trust Agreement or the Noteholders under the Indenture, including compliance by the Depositor with any warranty or representation made under any Basic Document or in any related document or the accuracy of any such warranty or representation, or any action of the Certificate Paying Agent, the Certificate Registrar or the Indenture Trustee taken in the name of the Owner Trustee.

 

Section 6.07           Christiana Bank May Own Owner Trust Certificates and Notes. Christiana Bank in its individual or any other capacity may, subject to Section 3.05, become the owner or pledgee of Owner Trust Certificates or Notes and may deal with the Depositor, the Certificate Paying Agent, the Certificate Registrar and the Indenture Trustee in transactions with the same rights as it would have if it were not Owner Trustee.

 

Section 6.08           Payments from Owner Trust Estate. All payments, if any, to be made by the Owner Trustee under this Trust Agreement or any of the Basic Documents to which Christiana Bank is a party shall be made only from the income and proceeds of the Owner Trust Estate or from other amounts required to be provided by the Certificateholders and only to the extent that the Owner Trustee shall have received income or proceeds from the Owner Trust Estate or the Certificateholders to make such payments in accordance with the terms hereof. Christiana Bank, in its individual capacity, shall not be liable for any amounts payable under this Trust Agreement or any of the Basic Documents to which the Owner Trustee is a party.

 

Section 6.09           Doing Business in Other Jurisdictions.  Notwithstanding anything contained herein to the contrary, neither Christiana Bank nor the Owner Trustee shall be required to take any action in any jurisdiction if the taking of such action will (i) require the consent or approval or authorization or order of or the giving of notice to, or the registration with or the taking of any other action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware; (ii) result in any fee, tax or other governmental charge under the laws of any such jurisdiction other than the State of Delaware becoming payable by Christiana Bank or (iii) subject Christiana Bank to personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by Christiana Bank or the Owner Trustee, as the case may

 

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be, contemplated hereby. The Owner Trustee shall be entitled to seek the opinion of counsel as to such matters and, based on such advice of counsel appoint a co-trustee or separate trustee in accordance with Section 9.05 of this Trust Agreement to proceed with such actions in such jurisdiction.

 

Section 6.10           Liability of Certificate Registrar and Certificate Paying Agent.  All provisions affording protection or rights to or limiting the liability of the Owner Trustee, including but not limited to the provisions of this Trust Agreement permitting the Owner Trustee to resign, merge or consolidate, shall inure as well to the Certificate Registrar and Certificate Paying Agent.  In addition, Deutsche Bank National Trust Company, in its capacities as Certificate Registrar and Certificate Paying Agent hereunder shall be afforded all the rights, protections, immunities and indemnities afforded to it in its capacity as Indenture Trustee under the Indenture as if specifically set forth herein.

 

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ARTICLE VII

 

COMPENSATION OF OWNER TRUSTEE

 

Section 7.01           Owner Trustee Fees and Expenses. The Owner Trustee shall be entitled to receive, as compensation for its services hereunder, the owner trustee fee and reimbursement of any expenses incurred by it in the performance of its duties hereunder (including, but not limited to, reasonable fees and expenses of counsel) as set forth in a separate agreement between the Depositor or an Affiliate thereof and the Owner Trustee.

 

Section 7.02           Indemnification.  The Trust shall, subject to the terms of the Indenture, indemnify, defend and hold harmless the Owner Trustee, the Certificate Registrar, the Certificate Paying Agent, and their respective successors, assigns, agents and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, “Expenses”) which may at any time be imposed on, incurred by, or asserted against any Indemnified Party in any way relating to or arising out of this Trust Agreement, the Basic Documents, the Owner Trust Estate, the administration of the Owner Trust Estate or the action or inaction of the Owner Trustee, the Certificate Registrar and the Certificate Paying Agent hereunder; provided, that with respect to the Trust:

 

(i)            the Trust shall not be liable for or required to indemnify an Indemnified Party from and against Expenses arising or resulting from the Owner Trustee’s, the Certificate Registrar’s or the Certificate Paying Agent’s, as applicable, willful misconduct, gross negligence or bad faith or as a result of any inaccuracy of a representation or warranty of the Owner Trustee contained in Section 6.03 expressly made by the Owner Trustee;

 

(ii)           with respect to any such claim, the Indemnified Party shall have given the Trust written notice thereof promptly after the Indemnified Party shall have actual knowledge thereof,

 

(iii)          while maintaining control over its own defense, the Trust shall consult with the Indemnified Party in preparing such defense; and

 

(iv)          notwithstanding anything in this Trust Agreement to the contrary, the Trust shall not be liable for settlement of any claim by an Indemnified Party entered into without the prior consent of the Trust which consent shall not be unreasonably withheld.

 

The indemnities contained in this Section shall survive the resignation or termination of the Owner Trustee, the Certificate Registrar or the Certificate Paying Agent or the termination of this Trust Agreement. In the event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section 7.02, the Owner Trustee’s, the Certificate Registrar’s or the Certificate Paying Agent’s choice of legal counsel, if other than the legal counsel retained by the Owner Trustee, the Certificate Registrar or the Certificate Paying Agent in connection with the

 

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execution and delivery of this Trust Agreement, shall be subject to the approval of the Trust, which approvals shall not be unreasonably withheld.  In addition, upon written notice to the Owner Trustee, the Certificate Registrar or the Certificate Paying Agent and with the consent of the Owner Trustee, the Certificate Registrar or the Certificate Paying Agent, as applicable, which consent shall not be unreasonably withheld, the Trust has the right to assume the defense of any claim, action or proceeding against the Owner Trustee, the Certificate Registrar or the Certificate Paying Agent.  Any amounts paid to the Owner Trustee pursuant to this Article VII shall be deemed not to be a part of the Owner Trust Estate immediately after such payment.

 

On any Payment Date on which there are no Available Funds with which to make any payments pursuant to Section 2.09(e) of the Indenture and Owner Trustee is owed any indemnification amounts pursuant to this Section 7.01, such amounts shall be paid by the Depositor within 60 days’ request from the Owner Trustee.

 

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ARTICLE VIII

 

TERMINATION OF TRUST AGREEMENT

 

Section 8.01           Termination of Trust Agreement.

 

(a)           The Trust shall dissolve immediately prior to the earliest of (i) the final distribution of all moneys or other property or proceeds of the Owner Trust Estate in accordance with the terms of the Indenture and (ii) the distribution of all of the assets of the Owner Trust Estate, in accordance with written instructions provided to the Certificate Paying Agent by the Certificateholder; provided in each case that all amounts owing to the Noteholders to the extent payable from the Owner Trust Estate or proceeds thereof have been paid in full and that all obligations under the Indenture have been discharged. The bankruptcy, liquidation, dissolution, death or incapacity of any Certificateholder shall not (x) operate to terminate this Trust Agreement or the Trust or (y) entitle such Certificateholder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or the Owner Trust Estate or (z) otherwise affect the rights, obligations and liabilities of the parties hereto.

 

(b)           Except as provided in Section 8.01(a), neither the Depositor nor any Certificateholder shall be entitled to revoke or terminate the Trust.

 

(c)           Notice of any dissolution of the Trust, specifying the Payment Date upon which Certificateholders shall surrender their Owner Trust Certificates to the Certificate Paying Agent for payment of the final distribution and cancellation, shall be given by the Certificate Paying Agent by letter to Certificateholders mailed within five Business Days of receipt of notice of the final payment on the Notes from the Indenture Trustee, stating (i) the Payment Date upon or with respect to which final payment of the Owner Trust Certificates shall be made upon presentation and surrender of the Owner Trust Certificates at the office of the Certificate Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of the Owner Trust Certificates at the office of the Certificate Paying Agent therein specified.  The Certificate Paying Agent shall give such notice to the Owner Trustee and the Certificate Registrar at the time such notice is given to Certificateholders. Upon presentation and surrender of the Owner Trust Certificates, the Certificate Paying Agent shall cause to be distributed to Certificateholders amounts distributable on such Payment Date pursuant to Section 5.01.

 

In the event that all of the Certificateholders shall not surrender their Owner Trust Certificates for cancellation within six months after the date specified in the above mentioned written notice, the Certificate Paying Agent shall give a second written notice to the remaining Certificateholders to surrender their Owner Trust Certificates for cancellation and receive the final distribution with respect thereto. Subject to applicable laws with respect to escheat of funds, if within one year following the Payment Date on which final payment of the Certificates was to have been made pursuant to Section 3.03 of the Indenture, all the Owner Trust Certificates shall not have been surrendered for cancellation, the Certificate Paying Agent may take appropriate

 

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steps, or may appoint an agent to take appropriate steps, to contact the remaining Certificateholders concerning surrender of their Owner Trust Certificates, and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Trust Agreement. Any funds remaining in the Certificate Distribution Account after exhaustion of such remedies shall be distributed by the Certificate Paying Agent to the Depositor.

 

(d)           Upon the winding up of the Trust and compliance with Section 3808(e), the Depositor as Administrator shall provide written notice thereof to the Owner Trustee and shall direct the Owner Trustee to, and the Owner Trustee shall, at the expense of the Depositor, cause the Certificate of Trust to be cancelled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3810(c) of the Statutory Trust Statute. Upon the filing of the certificate of cancellation, the Trust and this Trust Agreement (other than Article VII) shall terminate and be of no further force or effect.

 

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ARTICLE IX

 

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

 

Section 9.01           Eligibility Requirements for Owner Trustee. The Owner Trustee shall at all times be a corporation or banking association satisfying the provisions of Section 3807(a) of the Statutory Trust Statute; authorized to exercise corporate trust powers; having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities. If such corporation or banking association shall publish reports of condition at least annually pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation or banking association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section 9.01, the Owner Trustee shall resign immediately in the manner and with the effect specified in Section 9.02.

 

Section 9.02           Replacement of Owner Trustee.  The Owner Trustee may at any time resign and be discharged from the trusts hereby created by giving 30 days prior written notice thereof to the Depositor. Upon receiving such notice of resignation, the Depositor shall promptly appoint a successor Owner Trustee, by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee and to the successor Owner Trustee.  If no successor Owner Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee.

 

If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section 9.01 and shall fail to resign after written request therefor by the Depositor, or if at any time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor may remove the Owner Trustee.

 

Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to the outgoing Owner Trustee.

 

Section 9.03           Successor Owner Trustee.  Any successor Owner Trustee appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the Indenture Trustee and to its predecessor Owner Trustee an instrument accepting such appointment under this Trust Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective, and such successor Owner Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under this Trust Agreement, with like effect as if originally named as Owner

 

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Trustee. The predecessor Owner Trustee shall, upon payment of its fees and expenses, deliver to the successor Owner Trustee all documents and statements and monies held by it under this Trust Agreement; and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties and obligations.

 

No successor Owner Trustee shall accept appointment as provided in this Section 9.03 unless at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section 9.01. Any successor Owner Trustee shall file an amendment to the Certificate of Trust with the Secretary of State if required by the Statutory Trust Statute.

 

Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section 9.03, the Owner Trustee shall mail notice thereof to all Certificateholders, the Indenture Trustee and the Noteholders.

 

Section 9.04           Merger or Consolidation of Owner Trustee. Any Person into which the Owner Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Owner Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner Trustee hereunder, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, that such Person shall be eligible pursuant to Section 9.01. Any successor Owner Trustee resulting from a merger or consolidation shall file an amendment to the Certificate of Trust with the Secretary of State if required by the Statutory Trust Statute.

 

Section 9.05           Appointment of Co-Trustee or Separate Trustee.  Notwithstanding any other provisions of this Trust Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Owner Trust Estate may at the time be located, the Owner Trustee shall have the power and shall execute and deliver all instruments to appoint one or more Persons to act as co-trustee, jointly with the Owner Trustee, or as separate trustee or trustees, of all or any part of the Owner Trust Estate, and to vest in such Person, in such capacity, such title to a Trust Estate or any part thereof and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Owner Trustee may consider necessary or desirable. No co-trustee or separate trustee under this Trust Agreement shall be required to meet the terms of eligibility as a successor Owner Trustee pursuant to Section 9.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 9.03.

 

Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(a)           All rights, powers, duties and obligations conferred or imposed upon the Owner Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Owner Trustee joining in such act), except to the

 

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extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Owner Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Owner Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Owner Trustee;

 

(b)           No trustee under this Trust Agreement shall be personally liable by reason of any act or omission of any other trustee under this Trust Agreement; and

 

(c)           The Owner Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

Any notice, request or other writing given to the Owner Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Trust Agreement and the conditions of this Article IX. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Trust Agreement, specifically including every provision of this Trust Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Owner Trustee. Each such instrument shall be filed with the Owner Trustee.

 

Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Trust Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor co-trustee or separate trustee.

 

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ARTICLE X

 

MISCELLANEOUS

 

Section 10.01 Amendments.

 

(a)           This Trust Agreement may be amended from time to time by the parties hereto as specified in this Section, provided that any amendment, except as provided in subparagraph (e) below, be accompanied by an Opinion of Counsel addressed to the Owner Trustee, the Certificate Registrar and the Certificate Paying Agent and obtained by the Depositor to the effect that such amendment (i) complies with the provisions of this Section and (ii) would not cause the Trust Estate to be subject to an entity level tax for federal income tax purposes.

 

(b)           If the purpose of the amendment (as detailed therein) is to correct any mistake, eliminate any inconsistency, cure any ambiguity or deal with any matter not covered (i.e., to give effect to the intent of the parties and, if applicable, to the expectations of the Certificateholders), it shall not be necessary to obtain the consent of any Certificateholders, and the Owner Trustee, the Certificate Registrar and the Certificate Paying Agent shall be furnished with an Opinion of Counsel obtained by the Depositor to the effect that such action will not adversely affect in any material respect the interests of any Certificateholders.

 

(c)           If the purpose of the amendment is to prevent the imposition of any federal or state taxes or to comply with any requirements imposed by the Code at any time that any Security is outstanding, it shall not be necessary to obtain the consent of any Certificateholder. In connection with such an amendment, the Owner Trustee, the Certificate Registrar and the Certificate Paying Agent shall be furnished with an Opinion of Counsel obtained by the Depositor that such amendment is necessary or helpful to prevent the imposition of such taxes and is not materially adverse to any Noteholder or Certificateholder.

 

(d)           If the purpose of the amendment is to add or eliminate or change any provision of the Trust Agreement other than as contemplated in (b) and (c) above, the amendment shall require (A) an Opinion of Counsel obtained by the Depositor to the effect that such action will not adversely affect in any material respect the interests of any Noteholders and Certificateholders and (B) the consent of Certificateholders evidencing a majority percentage interest of the Owner Trust Certificates and the Indenture Trustee; provided, however, that no such amendment shall (i) reduce in any manner the amount of, or delay the timing of, payments received that are required to be distributed on any Owner Trust Certificate without the consent of the Certificateholder, or (ii) reduce the aforesaid percentage of Certificateholders of which are required to consent to any such amendment, without the consent of such Certificateholders then outstanding.

 

(e)           If the purpose of the amendment is to provide for the issuance of additional certificates representing an interest in the Trust, it shall not be necessary to obtain the consent of any Certificateholder and the Owner Trustee and the Indenture Trustee shall be furnished with (A) an Opinion of Counsel obtained by the Depositor to the effect that such action will not adversely affect in any material respect the interests of any Certificateholders and (B) an Opinion

 

36

 

of Counsel obtained by the Depositor to the effect that such action will not cause the Trust Estate to be (i) treated as an association taxable as a corporation for U.S. federal income tax purposes, (ii) treated as a “publicly traded partnership” as defined in Treasury Regulation section 1.7704 -1 that is taxable as a corporation for U.S. federal income tax purposes or (iii) otherwise subject to entity level taxation for federal income tax purposes.

 

(f)            Promptly after the execution of any such amendment or consent, the Depositor shall furnish written notification of the substance of such amendment or consent to each Certificateholder and the Indenture Trustee.  It shall not be necessary for the consent of Certificateholders or the Indenture Trustee pursuant to this Section 10.01 to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents (and any other consents of Certificateholders provided for in this Trust Agreement or in any other Basic Document) and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may prescribe.

 

(g)           In connection with the execution of any amendment to any agreement to which the Trust is a party, the Owner Trustee shall be entitled to receive and conclusively rely upon an Opinion of Counsel to the effect that such amendment is authorized or permitted by the documents subject to such amendment and that all conditions precedent in the Basic Documents for the execution and delivery thereof by the Trust or the Owner Trustee, as the case may be, have been satisfied.

 

(h)           No amendment or agreement affecting the rights or duties of the Owner Trustee, the Certificate Registrar or the Certificate Paying Agent may be entered into without the consent of the affected party.

 

Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State.

 

Section 10.02         No Legal Title to Owner Trust Estate.  The Certificateholders shall not have legal title to any part of the Owner Trust Estate solely by virtue of their status as a Certificateholder. The Certificateholders shall be entitled to receive distributions with respect to their undivided beneficial interest therein only in accordance with Articles V and VIII.  No transfer, by operation of law or otherwise, of any right, title or interest of the Certificateholders to and in their ownership interest in the Owner Trust Estate shall operate to terminate this Trust Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Owner Trust Estate.

 

Section 10.03         Limitations on Rights of Others. Except for Section 2.07, the provisions of this Trust Agreement are solely for the benefit of the Owner Trustee, the Depositor, the Certificateholders and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Trust Agreement (other than Section 2.07), whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Trust Agreement or any covenants, conditions or provisions contained herein.

 

37

 

Section 10.04         Notices.

 

(a)           Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing and shall be deemed given upon receipt, to the Owner Trustee at: Christiana Bank & Trust Company, 1314 King Street, Wilmington, Delaware 19801, facsimile number: 302-421-9137, Attention: Corporate Trust Administration; to the Depositor at: IMH Assets Corp., 19500 Jamboree Road, Irvine, California 92612, Attention: Legal; to the Indenture Trustee, the Certificate Registrar and the Certificate Paying Agent at the Corporate Trust Office; or, as to each party, at such other address as shall be designated by such party in a written notice to each other party.

 

(b)           Any notice required or permitted to be given to a Certificateholder shall be given by first-class mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate Register. Any notice so mailed within the time prescribed in this Trust Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.

 

(c)           A copy of any notice delivered to the Owner Trustee or the Trust shall also be delivered to the Depositor.

 

Section 10.05         Severability. Any provision of this Trust Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 10.06         Separate Counterparts.  This Trust Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 10.07         Successors and Assigns.  All representations, warranties, covenants and agreements contained herein shall be binding upon, and inure to the benefit of, each of the Depositor, the Certificate Registrar, the Certificate Paying Agent, the Administrators, the Owner Trustee and its successors, and each Certificateholder and its successors and permitted assigns, all as herein provided.  Any request, notice, direction, consent, waiver or other instrument or action by a Certificateholder shall bind the successors and assigns of such Certificateholder.

 

Section 10.08         No Petition. To the fullest extent permitted by applicable law, the Owner Trustee, by entering into this Trust Agreement and each Certificateholder, by accepting an Owner Trust Certificate, hereby covenant and agree that they will not at any time institute against the Depositor or the Trust, or join in any institution against the Depositor or the Trust of, any bankruptcy proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations to the Owner Trust Certificates, the Notes, this Trust Agreement or any of the Basic Documents.  This Section shall survive for one year following the termination of this Trust Agreement.

 

38

 

Section 10.09         No Recourse.  Each Certificateholder by accepting an Owner Trust Certificate acknowledges that such Certificateholder’s Owner Trust Certificates represent beneficial interests in the Trust only and do not represent interests in or obligations of the Depositor, the Owner Trustee, the Indenture Trustee, the Certificate Registrar, the Certificate Paying Agent or any Affiliate thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Trust Agreement, the Owner Trust Certificates or the Basic Documents.

 

Section 10.10         Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

Section 10.11         GOVERNING LAW.  THIS TRUST AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 10.12         Integration. This Trust Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

 

39

 

ARTICLE XI

 

MANAGEMENT OF THE TRUST

 

Notwithstanding any other provision in this Trust Agreement and any other provision of law to the contrary, the Trust at all times shall:

 

(a)           maintain its books, records, and bank accounts separate and apart from those of all other Persons;

 

(b)           not commingle any of its assets with those of any other Person;

 

(c)           pay its own liabilities out of its own funds;

 

(d)           maintain financial statements separate and apart from those of all other Persons;

 

(e)           observe all corporate formalities, organizational formalities, and other applicable or customary formalities;

 

(f)            not guarantee or become obligated for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;

 

(g)           not pledge its assets for the benefit of any other Person or make any loans or advances to any other Person;

 

(h)           not acquire the direct obligations of, or securities issued by, its shareholders or any Affiliate;

 

(i)            allocate fairly and reasonably any overhead for expenses that are shared with an Affiliate, including paying for the office space and services performed by any employee of any Affiliate;

 

(j)            conduct business in its own name, promptly correct any known misunderstandings regarding its separate identity, hold all of its assets in its own name, and not identify itself as a division of any other Person;

 

(k)           maintain adequate capital in light of its contemplated business operations;

 

(l)            maintain an arm’s length relationship with its Affiliates and to enter into transactions with Affiliates only on a commercially reasonable basis;

 

(m)          use separate stationery, invoices, and checks bearing its own name;

 

(n)           not to hold out its credit as being available to satisfy the obligations of others;

 

(o)           file separate tax returns from those of each Person and entity except as may be required by law; and

 

40

 

(p)           maintain its assets in a manner that it will not be costly or difficult to segregate ascertain, or identify from those of any other Person.

 

Notwithstanding the foregoing, the Owner Trustee shall not be responsible for monitoring or maintaining the compliance of the Trust with this Article XI or Section 9.06 of the Indenture.

 

41

 

IN WITNESS WHEREOF, the Depositor, the Owner Trustee, and the Certificate Registrar and the Certificate Paying Agent have caused their names to be signed hereto by their respective officers thereunto duly authorized, all as of the day and year first above written.

 

 

	
 
    	
IMH ASSETS CORP.,
    
	
 
    	
as Depositor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ronald Morrison 
    
	
 
    	
Name:
    	
Ronald   Morrison 
    
	
 
    	
Title:
    	
EVP   General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CHRISTIANA BANK & TRUST COMPANY,
    
	
 
    	
as Owner Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Raye D Goldsborough
    
	
 
    	
Name:
    	
Raye D. Goldsborough
    
	
 
    	
Title:
    	
Assistant Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEUTSCHE BANK NATIONAL TRUST COMPANY,
    
	
 
    	
as Certificate Registrar   and Certificate Paying Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Karlene Benvenuto
    
	
 
    	
Name:
    	
Karlene Benvenuto
    
	
 
    	
Title:
    	
Authorized Signer
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mei Nghia
    
	
 
    	
Name:
    	
Mei Nghia
    
	
 
    	
Title:
    	
Authorized Signer
    

 

 

FOR PURPOSES OF SECTION 3.14 ONLY:

 

IMPAC MORTGAGE HOLDINGS, INC.

 

 

	
By:
    	
/s/ Ronald Morrison
    	
 
    
	
Name:
    	
Ronald Morrison
    	
 
    
	
Title:
    	
EVP General Counsel
    	
 
    

 

 

SCHEDULE A

 

	
Underlying
   Certificate No.
    	
 
    	
Underlying   Transaction
    	
 
    	
Underlying   Agreement
    	
 
    	
Underlying   
   Certificate
    	
 
    	
Percentage
   Interest
    	
 
    
	
1.
    	
 
    	
Impac CMB Trust Series 2003-1
    	
 
    	
Amended and Restated Trust Agreement, dated as of January 30,   2003, among IMH Assets Corp., as depositor, Wilmington Trust Company, as   owner trustee and Deutsche Bank National Trust Company, as certificate   registrar and certificate paying agent
    	
 
    	
Trust Certificates
    	
 
    	
100
    	
%
    
	
2.
    	
 
    	
Impac CMB Trust Series 2003-4
    	
 
    	
Amended and Restated Trust Agreement, dated as of March 31,   2003, among IMH Assets Corp., as depositor, Wilmington Trust Company, as   owner trustee and Deutsche Bank National Trust Company, as certificate registrar   and certificate paying agent
    	
 
    	
Trust Certificates
    	
 
    	
100
    	
%
    
	
3.
    	
 
    	
Impac CMB Trust Series 2003-8
    	
 
    	
Amended and Restated Trust Agreement, dated as of July 31, 2003,   among IMH Assets Corp., as depositor, Wilmington Trust Company, as owner   trustee and Deutsche Bank National Trust Company, as certificate registrar   and certificate paying agent
    	
 
    	
Trust Certificates
    	
 
    	
100
    	
%
    
	
4.
    	
 
    	
Impac CMB Trust Series 2003-9F
    	
 
    	
Amended and Restated Trust Agreement, dated as of July 30, 2003,   among IMH Assets Corp., as depositor, Wilmington Trust Company, as owner   trustee and Deutsche Bank National Trust Company, as certificate registrar   and certificate paying agent
    	
 
    	
Trust Certificates
    	
 
    	
100
    	
%
    
	
5.
    	
 
    	
Impac CMB Trust Series 2003-11
    	
 
    	
Amended and Restated Trust Agreement, dated as of November 6,   2003, among IMH Assets Corp., as depositor, Wilmington Trust Company, as   owner trustee and Deutsche Bank National Trust Company, as certificate   registrar and certificate paying agent
    	
 
    	
Trust Certificates
    	
 
    	
100
    	
%
    
	
6.
    	
 
    	
Impac CMB Trust Series 2004-3
    	
 
    	
Amended and Restated Trust Agreement, dated as of March 30,   2004, among IMH Assets Corp., as depositor, Wilmington Trust Company, as   owner trustee and Deutsche Bank National Trust Company, as certificate   registrar and certificate paying agent
    	
 
    	
Trust Certificates
    	
 
    	
100
    	
%
    
	
7.
    	
 
    	
Impac CMB Trust Series 2007-A
    	
 
    	
Amended and Restated Trust Agreement, dated as of June 29, 2007,   among IMH Assets Corp., as depositor, Christiana Bank & Trust   Company, as owner trustee and Deutsche Bank National Trust Company, as   certificate registrar and certificate paying agent
    	
 
    	
Trust Certificates
    	
 
    	
100
    	
%
    

 

 

EXHIBIT A-1

 

FORM OF OWNER TRUST CERTIFICATES

 

LVII 2010-R1

 

THIS OWNER TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN, OR OBLIGATION OF, THE DEPOSITOR, THE OWNER TRUSTEE, THE CERTIFICATE PAYING AGENT, THE CERTIFICATE REGISTRAR, ANY OF THEIR RESPECTIVE AFFILIATES, OR ANY OTHER PERSON.

 

THIS OWNER TRUST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENTS TO THE NOTES AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

 

THIS OWNER TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE CERTIFICATEHOLDER HEREOF, BY PURCHASING THIS OWNER TRUST CERTIFICATE, AGREES THAT THIS OWNER TRUST CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH SECTION 3.05 OF THE AGREEMENT.

 

NO TRANSFER OF THIS OWNER TRUST CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 3.12 OF THE AGREEMENT.

 

 

	
Certificate   No. 1
    	
Percentage   interest of
   this Owner Trust Certificate: 100%
    
	
 
    	
 
    
	
Closing   Date: November 26, 2010
    	
 
    
	
 
    	
 
    
	
Date   of Trust Agreement:
    	
First   Payment Date:
    
	
November 26,   2010
    	
 December 1,   2010
    
	
 
    	
 
    
	
Class:
    	
 
    

 

LVII 2010-R1

 

Evidencing a fractional undivided beneficial interest in the Owner Trust Estate, the property of which consists of the Underlying Certificates in LVII 2010-R1 (the “Trust”), a Delaware statutory trust formed by IMH Assets Corp., as depositor, pursuant to the Trust Agreement referred to below. This Owner Trust Certificate shall correspond to, and be solely entitled to the benefits of, the corresponding Trust Estate allocated thereto as set forth on Schedule A attached to the Trust Agreement.

 

This certifies that [                      ] is the registered owner of the percentage interest represented hereby.

 

The Trust was created pursuant to a Short Form Trust Agreement, dated as of November 24, 2010, between the Depositor and Christiana Bank & Trust Company, as owner trustee (the “Owner Trustee”, which term includes any successor entity under the Trust Agreement) (the “Short Form Trust Agreement”) as amended and restated by the Amended and Restated Trust Agreement dated as of November 26, 2010, by and among the Depositor, the Owner Trustee and Deutsche Bank National Trust Company, as certificate registrar (“Certificate Registrar”) and certificate paying agent (“Certificate Paying Agent”) (as amended and supplemented from time to time, together with the Short Form Trust Agreement, the “Trust Agreement” or the “Agreement”), a summary of certain of the pertinent provisions of which is set forth hereinafter. This Owner Trust Certificate (the “Certificate” or “Certificates”) is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the Certificateholder by virtue of the acceptance hereof assents and by which such Certificateholder is bound.

 

This Owner Trust Certificate is issued under the Trust Agreement to which reference is hereby made for a statement of the respective rights thereunder of the Depositor, the Certificate Registrar, the Certificate Paying Agent, the Owner Trustee and the Certificateholders and the terms upon which the Owner Trust Certificates are executed and delivered.

 

All terms used in this Owner Trust Certificate which are defined in the Trust Agreement shall have the meanings assigned to them in the Trust Agreement. The rights of the Certificateholders are subordinated to the rights of the Noteholders, as set forth in the Indenture.

 

 

There will be distributions on (i) in case of the first distribution date, on December 1, 2010, (ii) and at any time thereafter, will be made on the second Business Day immediately following the Underlying Distribution Date (each, a “Payment Date”), commencing in December 2010, to the Person in whose name this Owner Trust Certificate is registered on the business day immediately preceding the related Payment Date (the “Record Date”), such Certificateholder’s percentage interest in the amount to be distributed to Certificateholders on such Payment Date.

 

The Certificateholder, by its acceptance of this Owner Trust Certificate, agrees that it will look solely to the funds on deposit in the Certificate Distribution Account for payment hereunder and that none of the Owner Trustee, Christiana Bank, in its individual capacity, the Certificate Paying Agent, the Certificate Registrar or the Depositor is personally liable to the Certificateholder for any amount payable under this Owner Trust Certificate or the Trust Agreement or, except as expressly provided in the Trust Agreement, subject to any liability under the Trust Agreement.

 

The Certificateholder acknowledges and agrees that its rights to receive distributions in respect of this Owner Trust Certificate are subordinated to the rights of the Noteholders as described in the Indenture, dated as of November 26, 2010, between the Trust and Deutsche Bank National Trust Company, as Indenture Trustee (the “Indenture”).

 

The Depositor and the Certificateholder, by acceptance of the Owner Trust Certificate, agree to treat, and to take no action inconsistent with the treatment of, the Owner Trust Certificates for federal, state and local income tax purposes as an equity interest in the Trust.

 

The Certificateholder, by its acceptance of the Owner Trust Certificate, covenants and agrees that such Certificateholder will not at any time institute against the Depositor, or join in any institution against the Depositor or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Owner Trust Certificate, the Notes, the Trust Agreement or any of the Basic Documents.

 

By its acceptance of the Owner Trust Certificate, the Certificateholder agrees and acknowledges that no legal or beneficial interest in all or any portion of the Owner Trust Certificate may be transferred directly or indirectly to an individual, corporation, partnership or other Person unless such transferee provides the Certificate Registrar with a properly completed IRS Form W-9 or IRS Form W-8BEN and/or such other form and information satisfactory to the Certificate Registrar that no federal income tax withholding is required on payments to the Trust or the Certificateholders; and if such form or other information is not provided, then any such purported transfer shall be void and of no effect.

 

Distributions on this Owner Trust Certificate will be made as provided in the Trust Agreement by the Certificate Paying Agent by wire transfer or check mailed to the Certificateholder of record in the Certificate Register without the presentation or surrender of this Owner Trust Certificate or the making of any notation hereon. Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Owner Trust Certificate will be made after due notice by the Certificate Paying Agent of the pendency of such

 

 

distribution and only upon presentation and surrender of this Owner Trust Certificate at the office or agency maintained by the Certificate Registrar for that purpose by the Trust, as provided in Section 3.09 of the Trust Agreement.

 

Notwithstanding the above, the final distribution on this Owner Trust Certificate will be made after due notice of the pendency of such distribution and only upon presentation and surrender of this Owner Trust Certificate at the office or agency specified in such notice.

 

Except in connection with the initial transfer of this Owner Trust Certificate, no transfer of this Owner Trust Certificate shall be made unless such transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) and any applicable state securities laws or is exempt from the registration requirements under the Securities Act and such state securities laws. In the event that a transfer is to be made in reliance upon an exemption from the Securities Act and such laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such transfer and such Certificateholder’s prospective transferee shall each certify to the Certificate Registrar in writing the facts surrounding the transfer by (a)(i) the delivery to the Certificate Registrar by the Certificateholder desiring to effect such transfer of a certificate substantially in the form set forth in Exhibit D of the Agreement (the “Transferor Certificate”) and (ii) the delivery by the Certificateholder’s prospective transferee of a letter in substantially the form of Exhibit F of the Agreement (the “Transferee Certificate”) stating that the prospective transferee is a QIB in accordance with Rule 144A or (b) there shall be delivered to the Certificate Registrar an Opinion of Counsel addressed to the Indenture Trustee that such transfer may be made pursuant to an exemption from the Securities Act and the 1940 Act, which Opinion of Counsel shall not be an expense of the Depositor, the Certificate Registrar, the Certificate Paying Agent, the Owner Trustee, the Trust or the Indenture Trustee. Neither the Depositor nor the Indenture Trustee is obligated to register or qualify the Class of Certificates specified on the face hereof under the 1933 Act or any other securities law or to take any action not otherwise required under the Agreement to permit the transfer of such Certificates without registration or qualification. Any Certificateholder desiring to effect a transfer of this Owner Trust Certificate shall be required to indemnify the Owner Trustee, the Indenture Trustee and the Depositor and against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

 

No transfer of this Owner Trust Certificate will be made unless the Certificate Registrar and the Indenture Trustee shall have received a representation letter, in the form as described in Section 3.12 of the Agreement, stating that the transferee is not an employee benefit or other plan subject to the prohibited transaction provisions of ERISA or Section 4975 of the Code (a “Plan”), or any other person (including an investment manager, a named fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf of or purchasing any Certificate with “plan assets” of any Plan pursuant to 29 C.F.R. 2510.3-101, as modified by Section 3(42) of ERISA.

 

No certification will be required in connection with the initial transfer of any such Certificate.

 

 

Reference is hereby made to the further provisions of this Owner Trust Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Owner Trustee, or an authenticating agent by manual signature, this Owner Trust Certificate shall not entitle the Certificateholder hereof to any benefit under the Trust Agreement or be valid for any purpose.

 

THIS OWNER TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

 

IN WITNESS WHEREOF, the Issuer has caused this Owner Trust Certificate to be duly executed.

 

	
 
    	
LVII   2010-R1
    
	
 
    	
 
    
	
 
    	
BY:
    	
CHRISTIANA   BANK & TRUST COMPANY,
    
	
 
    	
 
    	
not   in its individual capacity but solely in its
    
	
 
    	
 
    	
capacity   as Owner Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Dated: November       , 2010

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Owner Trust Certificates referred to in the within mentioned Agreement.

 

DEUTSCHE BANK NATIONAL TRUST COMPANY,
 not in its individual capacity but solely in its
 capacity as Certificate Registrar

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

 

[REVERSE OF CERTIFICATE]

 

The Owner Trust Certificate does not represent an obligation of, or an interest in, the Depositor, the Indenture Trustee, the Certificate Paying Agent, the Certificate Registrar, the Owner Trustee or any Affiliates of any of them and no recourse may be had against such parties or their assets, except as expressly set forth or contemplated herein or in the Trust Agreement or the Basic Documents. In addition, this Owner Trust Certificate is not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections and recoveries with respect to the related Underlying Certificate, all as more specifically set forth herein and in the Trust Agreement. A copy of the Trust Agreement may be examined by any Certificateholder upon written request during normal business hours at the principal office of the Depositor and at such other places, if any, designated by the Depositor.

 

The Trust Agreement permits the amendment thereof as set forth in Section 10.01 of the Trust Agreement.

 

As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Owner Trust Certificate is registerable in the Certificate Register upon surrender of this Owner Trust Certificate for registration of transfer at the offices or agencies of the Certificate Registrar maintained by the Trust, as provided in the Trust Agreement, accompanied by a written instrument of transfer in form satisfactory to the Certificate Registrar duly executed by the Certificateholder hereof or such Certificateholder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same aggregate interest in the Trust will be issued to the designated transferee. The initial Certificate Registrar appointed under the Trust Agreement is Deutsche Bank National Trust Company.

 

As provided in the Trust Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing the same aggregate denomination, as requested by the Certificateholder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.

 

The Owner Trustee, the Certificate Paying Agent, the Certificate Registrar and any agent of the Owner Trustee, the Certificate Paying Agent, or the Certificate Registrar may treat the Person in whose name this Owner Trust Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Paying Agent, the Certificate Registrar or any such agent shall be affected by any notice to the contrary.

 

The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate as and when provided in accordance with the terms of the Trust Agreement.

 

 

ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL SECURITY OR
 OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

	
 
    
	
(Please   print or type name and address, including postal zip code, of assignee)
    
	
 
    
	
 
    
	
the   within Certificate, and all rights thereunder, hereby irrevocably   constituting and appointing to transfer said Certificate on the books of the   Certificate Registrar, with full power of substitution in the premises.
    

 

	
Dated:
    	
 
    	
 
    	
 
    	
*/
    
	
 
    	
 
    	
 
    	
Signature   Guaranteed:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
*/
    

 

*/ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration, enlargement or any change whatever. Such signature must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company.

 

DISTRIBUTION INSTRUCTIONS

 

The assignee should include the following for the information of the Certificate Paying Agent:

 

Distribution shall be made by wire transfer in immediately available funds to

                                                                                       for the account of                                                                                                , account number                                                              , or, if mailed by check, to                                                                          .

 

Applicable statements should be mailed to                                           .

 

 

	
 
    	
 
    
	
 
    	
Signature   of assignee or agent
   (for authorization of wire transfer only)
    

 

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRUST

OF LVII 2010-R1

 

THIS Certificate of Trust of LVII 2010-R1 (the “Trust”), is being duly executed and filed by the undersigned, as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code, § 3801 et seq., as amended from time to time) (the “Act”).

 

1. Name. The name of the statutory trust formed hereby is LVII 2010-R1.

 

2. Delaware Trustee. The name and business address of the trustee of the Trust in the State of Delaware are Christiana Bank & Trust Company, 1314 King Street, Wilmington, Delaware 19801, Attn: Corporate Trust Administration.

 

3. Effective Date. This Certificate of Trust shall be effective upon filing.

 

IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has executed this Certificate of Trust in accordance with Section 3811(a) of the Act.

 

	
 
    	
CHRISTIANA   BANK & TRUST COMPANY,
    
	
 
    	
not   in its individual capacity but solely as
    
	
 
    	
Owner   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT C

 

[RESERVED]

 

C-1

 

EXHIBIT D

 

FORM OF TRANSFEROR CERTIFICATE

 

                            ,200     

 

IMH Assets Corp.

19500 Jamboree Road

Irvine, California 92612

 

Deutsche Bank National Trust Company

1761 East St. Andrew Place

Santa Ana, California 92705

Attention: Trust Administration—1M10R1

 

Re:                               LVII 2010-R1 Certificates (the “Certificates”)

 

Ladies and Gentlemen:

 

In connection with the sale by                        (the “Seller”) to                  (the “Purchaser”) of         % percentage interest of the LVII 2010-R1 Certificates, Series 2010-R1, Class            (the “Certificates”), issued pursuant to a Trust Agreement, dated as of November 26, 2010 among IMH Assets Corp., as depositor (the “Depositor”), Christiana Bank & Trust Company, as owner trustee (the “Owner Trustee”) and Deutsche Bank National Trust Company, as Certificate Registrar and Certificate Paying Agent (together, the “Certificate Registrar”). The Seller hereby certifies, represents and warrants to, and covenants with, the Depositor, the Certificate Registrar and the Indenture Trustee that:

 

Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold, disposed of or otherwise transferred any Certificate, any interest in any Certificate or any other similar security to any person in any manner, (b) has solicited any offer to buy or to accept a pledge, disposition or other transfer of any Certificate, any interest in any Certificate or any other similar security from any person in any manner, (c) has otherwise approached or negotiated with respect to any Certificate, any interest in any Certificate or any other similar security with any person in any manner, (d) has made any general solicitation by means of general advertising or in any other manner, or (e) has taken any other action, that (as to any of (a) through (e) above) would constitute a distribution of the Owner Trust Certificates under the Securities Act of 1933 (the “Act”), that would render the disposition of any Certificate a violation of Section 5 of the Act or any state securities law, or that would require registration or qualification pursuant thereto. The Seller will not act in any manner set forth in the foregoing sentence with respect to any Certificate. The Seller has not and will not sell or otherwise transfer any of the Owner Trust Certificates, except in compliance with the provisions of the Trust Agreement.

 

D-1

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Seller)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

EXHIBIT E

 

[RESERVED]

 

 

EXHIBIT F

 

FORM OF TRANSFEREE CERTIFICATE

 

IMH Assets Corp.

19500 Jamboree Road

Irvine, California 92612

 

Deutsche Bank National Trust Company

1761 East St. Andrew Place

Santa Ana, California 92705

Attention: Trust Administration—1M10R1

 

Re:                               LVII 2010-R1 Certificates (the “Certificates”)

 

Ladies and Gentlemen:

 

In connection with our purchase of Certificates, the undersigned certifies to each of the parties to whom this letter is addressed that it is a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Act”)), as follows:

 

For Transferees relying on Rule 144A:

 

1.                                       It owned and/or invested on a discretionary basis eligible securities (excluding affiliate’s securities, bank deposit notes and CD’s, loan participations, repurchase agreements, securities owned but subject to a repurchase agreement and swaps), as described below:

 

Date:                             , 20     (must be on or after the close of its most recent fiscal year)

 

Amount: $                                           ; and

 

2.                                       The dollar amount set forth above is:

 

a.                                       greater than $100 million and the undersigned is one of the following entities:

 

(x)                                   [   ]                               an insurance company as defined in Section 2(13) of the Act(1); or

 

(y)                                 [   ]                               an investment company registered under the Investment Company Act or any business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940; or

 

(z)                                   [   ]                               a Small Business Investment Company licensed by the U.S. Small Business Administration under  Section 301(c) or (d) of the Small Business Investment Act of 1958; or

 

(1) A purchase by an insurance company for one or more of its separate accounts, as defined by Section 2(a)(37) of the Investment Company Act of 1940, which are neither registered nor required to be registered thereunder, shall be deemed to be a purchase for the account of such insurance company.

 

 

	
 
    	
(aa)
    	
[   ]
    	
a   plan (i) established and maintained by a state, its political subdivisions,   or any agency or instrumentality of a state or its political subdivisions,   the laws of which permit the purchase of securities of this type, for the   benefit of its employees and (ii) the governing investment guidelines of   which permit the purchase of securities of this type; or
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(bb)
    	
[   ]
    	
a   business development company as defined in Section 202(a)(22) of the   Investment Advisers Act of 1940; or
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(cc)
    	
[   ]
    	
a   corporation (other than a U.S. bank, savings and loan association or   equivalent foreign institution), partnership, Massachusetts or similar   business trust, or an organization described in Section 501(c)(3) of the   Internal Revenue Code; or
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(dd)
    	
[   ]
    	
a   U.S. bank, savings and loan association or equivalent foreign institution,   which has an audited net worth of at least $25 million as demonstrated in its   latest annual financial statements; or
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(ee)
    	
[   ]
    	
an   investment adviser registered under the Investment Advisers Act; or
    
	
 
    	
 
    	
 
    	
 
    
	
b.
    	
[   ]
    	
greater   than $10 million, and the undersigned is a broker-dealer registered with the   SEC; or
    
	
 
    	
 
    	
 
    
	
c.
    	
[   ]
    	
less   than $10 million, and the undersigned is a broker-dealer registered with the   SEC and will only purchase Rule 144A securities in transactions in which   it acts as a riskless principal (as defined in Rule 144A); or
    
	
 
    	
 
    	
 
    
	
d.
    	
[   ]
    	
less   than $100 million, and the undersigned is an investment company registered   under the Investment Company Act of 1940, which, together with one or more   registered investment companies having the same or an affiliated investment   adviser, owns at least $100 million of eligible securities; or
    
	
 
    	
 
    	
 
    
	
e.
    	
[   ]
    	
less   than $100 million, and the undersigned is an entity, all the equity owners of   which are qualified institutional buyers.
    

 

The undersigned further certifies that it is purchasing the Owner Trust Certificates for its own account or for the account of others that independently qualify as “Qualified Institutional Buyers” as defined in Rule 144A. It is aware that the sale of the Owner Trust Certificates is being made in reliance on its continued compliance with Rule 144A. It is aware that the transferor may rely on the exemption from the provisions of Section 5 of the Act provided by Rule 144A. The undersigned understands that the Owner Trust Certificates may be resold, pledged or transferred only to a person reasonably believed to be a Qualified Institutional Buyer that purchases for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the resale, pledge or transfer is being made in reliance in Rule 144A.

 

 

The undersigned agrees that if at some future time it wishes to dispose of or exchange any of the Owner Trust Certificates, it will not transfer or exchange any of the Owner Trust Certificates to a Qualified Institutional Buyer without first obtaining a Transferee Certificate in the form hereof from the transferee and delivering such certificate to the addressees hereof.

 

The undersigned certifies that it is not acquiring the Owner Trust Certificate directly or indirectly by, or on behalf of, an employee benefit plan or other retirement arrangement which is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended, and/or Section 4975 of the Internal Revenue Code of 1986 (each, a “Plan”), or with “plan assets” of a Plan

 

If the Purchaser proposes that its Certificates be registered in the name of a nominee on its behalf, the Purchaser has identified such nominee below, and has caused such nominee to complete the Nominee Acknowledgment at the end of this letter.

 

	
Name   of Nominee (if any):
    	
 
    	
 
    

 

 

IN WITNESS WHEREOF, this document has been executed by the undersigned who is duly authorized to do so on behalf of the undersigned Eligible Purchaser on the          day of                       , 20      .

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
[PURCHASER]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
(Authorized Officer)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
(Attorney-in-fact)
    

 

 

Nominee Acknowledgment

 

The undersigned hereby acknowledges and agrees that as to the Owner Trust Certificates being registered in its name, the sole beneficial owner thereof is and shall be the Purchaser identified above, for whom the undersigned is acting as nominee.

 

	
 
    	
[NAME   OF NOMINEE]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
(Authorized Officer)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
(Attorney-in-fact)Exhibit 10.15

 

EXECUTION COPY

 

 

MASTER REPURCHASE AGREEMENT

 

Dated as of December 3, 2010

 

Between

 

NEW CENTURY BANK d/b/a CUSTOMERS BANK, as Buyer,

 

and

 

EXCEL MORTGAGE SERVICING, INC., as Seller,

 

and

 

AMERIHOME MORTGAGE CORPORATION, as Seller

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
REPRESENTATIONS AND WARRANTIES
    	
9
    
	
 
    	
 
    	
 
    
	
3.
    	
PURCHASE LOAN TRANSACTIONS
    	
22
    
	
 
    	
 
    	
 
    
	
4.
    	
SECURITY AGREEMENT; ADDITIONAL   DOCUMENTS
    	
26
    
	
 
    	
 
    	
 
    
	
5.
    	
CONDITIONS TO PURCHASING OF   MORTGAGE LOANS
    	
27
    
	
 
    	
 
    	
 
    
	
6.
    	
AFFIRMATIVE COVENANTS
    	
29
    
	
 
    	
 
    	
 
    
	
7.
    	
NEGATIVE COVENANTS
    	
32
    
	
 
    	
 
    	
 
    
	
8.
    	
EVENTS OF DEFAULT
    	
34
    
	
 
    	
 
    	
 
    
	
9.
    	
TERMINATION
    	
36
    
	
 
    	
 
    	
 
    
	
10.
    	
SUBSERVICING
    	
36
    
	
 
    	
 
    	
 
    
	
11.
    	
MISCELLANEOUS PROVISIONS
    	
37
    

 

i

 

MASTER REPURCHASE AGREEMENT

 

THIS MASTER REPURCHASE AGREEMENT (“Agreement”) is made December 3, 2010, by and between EXCEL MORTGAGE SERVICING, INC., a California corporation, with an address at 19500 Jamboree Road #400, Irvine, California 92612, as a seller (“Excel”), AmeriHome Mortgage Corporation, a Michigan corporation, with an address at 2141 W. Bristol Road, Flint, Michigan 48507, as a seller (“AmeriHome”) (Excel and AmeriHome are individually and collectively referred to herein as “Seller”), and New Century Bank d/b/a Customers Bank, a Pennsylvania state-chartered bank, with an address at 99 Bridge Street, Phoenixville, Pennsylvania (the “Buyer”), under the following circumstances:

 

RECITAL

 

Seller seeks a source of funding for use in originating and closing Mortgage Loans and Buyer is willing to provide such funds to Seller for use in the closing of Mortgage Loans upon the terms contained in this Agreement.  To accomplish this goal, from time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer Mortgage Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans at a date certain not later than sixty (60) days after the date of transfer, against the transfer of funds by Seller.  Each such transaction shall be referred to herein as a “Transaction” and shall be governed by this Agreement, unless otherwise agreed upon in writing.  At any time during the term of this Agreement, the total outstanding principal balance of all Mortgage Loans then owned by Buyer shall not exceed the Maximum Aggregate Purchase Price.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are acknowledged, the parties agree:

 

1.             Definitions. For purposes of this Agreement, the terms set forth below shall have the following meanings.

 

(a)           “Accepted Servicing Practices” means, with respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) of prudent mortgage lending  institutions that service mortgage loans of the same type as the Mortgage Loans in the jurisdiction where the related Mortgaged Property is located, and in a manner at least equal in quality to the servicing Seller or Seller’s designee provides to mortgage loans which it owns in its own portfolio.

 

(b)           “Adjusted Tangible Net Worth” means, at any date, Tangible Net Worth minus all receivables from directors, officers, shareholders and Affiliates of Seller (including, without limitation, receivables arising from or related to loans made by Seller to such directors, officers, shareholders or Affiliates) to the extent such receivables are not otherwise eliminated in consolidation.

 

(c)           “Affiliate” means, as to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with, such Person.  “Control” as used herein means possession, directly or indirectly, of the power (a) to

 

 

vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the directors or managing general partners (or their equivalent) of such Person, or (b) to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

 

(d)           “Agency” means Fannie Mae, Freddie Mac, FHA, Ginnie Mae and VA.

 

(e)           “Appraised Value” shall mean the value set forth in an appraisal made in connection with the origination of the related Loan as the value of the Mortgaged Property.

 

(f)            “Average Monthly Deposits” shall mean the monthly average of free collected balances in non-interest bearing accounts in the name of Seller (or held by Seller in trust for third parties) with Buyer, deducting any unpaid service charges or float required by Buyer under its normal practices to compensate Buyer for the maintenance of such accounts and taking into consideration reserve requirements and other costs of complying with applicable law (including but not limited to any FDIC premium applicable to such accounts.

 

(g)           “Balance Funded Amount” means the Average Monthly Deposits minus One Million and 00/100 Dollars ($1,000,000).

 

(h)           “Best’s” shall mean Best’s Key Rating Guide, as the same shall be amended from time to time.

 

(i)            “Business Day” means any day other than a Saturday, a Sunday or a day on which banks in Pennsylvania or California are authorized or obligated to close their regular banking business.  For purposes of any rescission period required by the Real Estate Settlement Procedures Act, Saturday shall be a Business Day.

 

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

 

(k)           “Collateral” means the Purchased Items.

 

(l)            “Commitment Fee” means 0.0% of the Maximum Aggregate Purchase Price.

 

(m)          “Confirmation” has the meaning provided in Section 3(a) hereof.

 

(n)           “Contractual Obligations” means, as to any Person, the provisions of any security issued by such Person, or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its properties is bound.

 

(o)           “Default Rate” means the Pricing Rate plus three percent (3%) per annum.

 

(p)           “Dry Mortgage Loan” means any Mortgage Loan that is not a Wet-Ink Mortgage Loan.

 

2

 

(q)           “Electronic Tracking Agreement” means the Electronic Tracking Agreement dated as of December 3, 2010 among Buyer, Seller, MERSCORP, Inc. and MERS, as the same may be amended, supplemented or modified from time to time provided, if no Mortgage Loans are or will be MERS Mortgage Loans, all references herein to the Electronic Tracking Agreement shall be disregarded.

 

(r)            “Electronic Transmission” shall mean the delivery of information in an electronic format acceptable to the applicable recipient thereof.

 

(s)           “ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be from time to time supplemented or amended.

 

(t)            “ERISA Affiliates” means any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which Seller is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which Seller is a member.

 

(u)           “Event of Default” has the meaning provided in Section 8 hereof.

 

(v)           “Existing Indebtedness” has the meaning set forth in Section 2(a)(17).

 

(w)          “Fannie Mae” means Fannie Mae or any successor thereto.

 

(x)            “FHA” means the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto.

 

(y)           “FHA Approved Mortgagee” shall mean an institution which is approved by FHA to act as mortgagee of record pursuant to FHA Regulations.

 

(z)            “Freddie Mac” means Freddie Mac or any successor thereto.

 

(aa)         “GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.  All financial data used in financial calculations called for in this Agreement, including without limitation, all financial covenants and all financial statements, shall be determined and presented in accordance with GAAP.

 

(bb)         “Ginnie Mae” means the Government National Mortgage Association or any successor thereto.

 

(cc)         “Governmental Authority” means any nation or governments, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

(dd)         “Guarantor” means the guarantor listed in the Guaranty.

 

3

 

(ee)         “Guaranty” means the guaranty of the Guarantor dated as of the date hereof as the same may be amended from time to time, pursuant to which the Guarantor fully and unconditionally guarantees the obligations of the Seller hereunder.

 

(ff)           “Indebtedness” means, as to any Person, (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable arising, and accrued expenses incurred, in the ordinary course of business, so long as such trade accounts payable are payable within 90 days after the date the respective goods are delivered or the respective services are rendered; (c) obligations of others secured by a Lien on the property of such Person, whether or not the respective obligation so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) capital lease obligations of such Person (determined in accordance with GAAP); (f) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of others guaranteed by such Person; (h) obligations of limited partnerships of which such Person is a general partner; and (i) obligations evidenced by bonds, debentures, notes or similar instruments.

 

(gg)         “LIBOR” means, as of any day, the rate per annum (rounded upward, if necessary to the nearest 1/16th of 1%) obtained by dividing (1) one-month interest period London Interbank Offered Rate fixed by the British Bankers Association for United States dollar deposits in the London interbank market at approximately 11:00 a.m. London, England time (or as soon thereafter as practicable) on such day as determined by the Buyer for such day from any broker, quoting service or commonly available source utilized by the Buyer by (2) a percentage equal to 100% minus the stated maximum rate of all reserves required to be maintained against “Eurocurrency Liabilities” as specified in Regulation D (or against any other applicable category of liabilities) on such date to any member bank of the Federal Reserve System.  Notwithstanding any provision above, the practice of rounding to determine LIBOR may be discontinued at any time in the Lender’s sole discretion.  In the event LIBOR is ever less than 0.75%, the LIBOR rate used to calculate the Pricing Rate shall be 0.75%.

 

(hh)         “Lien” means any security interest, mortgage, pledge, lien, claim on property, charge or encumbrance (including any conditional sale or other title retention agreement), any lease in the nature thereof, or the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction.

 

(ii)           “Material Adverse Effect” means a material adverse effect on (a) the property, business, operations or financial condition of Seller, (b) the ability of Seller to perform its obligations under any of the Purchase Documents to which it is a party, (c) the validity or enforceability of any of the Purchase Documents, (d) the rights and remedies of Buyer under any of the Purchase Documents, or (e) the timely repurchase of the Mortgage Loans or payment of other amounts payable in connection therewith.

 

4

 

(jj)           “Maximum Aggregate Purchase Price” means Twenty Five Million and 00/100 Dollars ($25,000,000.00).

 

(kk)         “Maximum Funding Capacity” means the Maximum Aggregate Purchase Price plus the maximum amount available to Seller from all other loan repurchase facilities, warehouse facilities or similar facilities to which Seller is a party.

 

(ll)           “MERS” means Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.

 

(mm)       “MERS Mortgage Loan” means any Mortgage Loan as to which the related Mortgage or Assignment of Mortgage has been recorded in the name of MERS, as agent for the holder from time to time of the Note, and which is identified as a MERS Mortgage Loan on the Mortgage.

 

(nn)         “MIN” means the MERS identification number permanently assigned to each MERS Mortgage Loan.

 

(oo)         “Minimum Maintenance Account Balance” means the minimum amount required to be maintained in a non-interest bearing account at Buyer.

 

(pp)         “Mortgage” means, with respect to a Mortgage Loan, the mortgage, deed of trust or other instrument, which creates a first lien on a fee simple estate which secures the Note.

 

(qq)         “Mortgage Loan” means a residential real estate secured loan and the entire corresponding file therefore purchased by Buyer hereunder and including, without limitation: (1) the Note, any reformation thereof, and a related Mortgage and security agreement (if applicable); (2) all guaranties and insurance policies, including, without limitation, all mortgage and title insurance policies and all fire and extended coverage insurance policies and rights of Seller to return premiums or payments with respect thereto; and (3) all right, title and interest of Seller in the Mortgaged Property.

 

(rr)           “Mortgaged Property” means the real property securing repayment of the debt evidenced by a Note (including all improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) but excludes any leasehold estates.

 

(ss)         “Mortgagor” means the obligor on a Note or a person who has executed a Mortgage.

 

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

 

(uu)         “Non-Utilization Fee” has the meaning provided in Section 3(o) hereof.

 

5

 

(vv)         “Note” means, with respect to any Mortgage Loan, the related promissory note together with all riders thereto and amendments thereof or other evidence of indebtedness of the related Mortgagor.

 

(ww)       “Obligations” means any and all debts, obligations and liabilities of Seller to Buyer (whether now existing or hereafter arising, voluntary or involuntary, whether or not jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated, and whether or not from time to time decreased or extinguished and later increased, created or incurred), arising out of or related to the Purchase Documents.

 

(xx)          “Obligor” means the Person or Persons obligated to pay the indebtedness which is the subject of a Mortgage Loan.

 

(yy)         “Permitted Other Debt” means that Indebtedness approved by Buyer as permitted other debt.

 

(zz)          “Person” means any corporation, natural person, firm, joint venture, partnership, limited liability company, limited liability partnership, trust, unincorporated organization, Governmental Authority or other entity.

 

(aaa)       “Plan” means an employee benefit or other plan established or maintained by either Seller or any ERISA Affiliate that is covered by Title IV of ERISA, other than a Multiemployer Plan.

 

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

 

(ccc)       “Pricing Rate” means LIBOR plus:

 

(1)           4.0% with respect to Transactions from the Purchase Date through thirty (30) days after the Purchase Date;

 

(2)           5.0% with respect to Transactions from the thirty-first (31st) day through the forty-fifth (45th) day after the Purchase Date;

 

(3)           6.0% with respect to Transactions from the forty-sixth (46th) day through the sixtieth (60th) day after the Purchase Date;

 

(4)           the rate determined in the sole discretion of Buyer with respect to any other Transactions so identified by Buyer in agreeing to enter into such Transaction.

 

The Pricing Rate shall change in accordance with LIBOR.

 

6

 

(ddd)      “Purchased Items” has the meaning provided in Section 4(a) hereof.

 

(eee)       “Purchase Date” means the date on which Mortgage Loans are transferred by Seller to Buyer.

 

(fff)         “Purchase Documents” means this Agreement, guaranty, if any, each Purchase Request and each other document, instrument or agreement executed by Seller in connection herewith, as any of the same may be amended, extended or replaced from time to time.

 

(ggg)      “Purchase Price” means on each Purchase Date, the price at which Mortgage Loans are transferred by Seller to Buyer.  The Purchase Price Percentage shall be applied against the principal amount of the Mortgage Loan to determine the Purchase Price.

 

(hhh)      “Purchase Price Percentage” means, except as otherwise provided in Section 6(k) of this Agreement, within respect to each Mortgage Loan, ninety-eight percent (98%).

 

(iii)          “Purchase Request” means a request for a Mortgage Loan purchase conveyed to Buyer from a duly authorized officer of Seller, in a form similar to Exhibit II attached hereto.  Any such Purchase Request made orally shall be confirmed in writing upon the request of Buyer.

 

(jjj)          “Qualified Insurer” means an insurance company duly qualified as such under the laws of each state in which any Mortgaged Property is located, duly authorized and licensed in each such state to transact the applicable insurance business and to write the insurance provided, and approved as an insurer by the applicable Agency.

 

(kkk)       “Reportable Event” means a reportable event as defined in Title IV of ERISA, except actions of general applicability by the Secretary of Labor under Section 110 of ERISA.

 

(lll)          “Repurchase Date” shall mean the date on which Seller is to repurchase the Mortgage Loans from Buyer provided that in no event shall the Repurchase Date be in excess of sixty (60) days after the Purchase Date.

 

(mmm)    “Repurchase Obligations” has the meaning provided in Section 4(b) hereof.

 

(nnn)      “Repurchase Price” means the price at which Mortgage Loans are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination decreased by all cash, income and late fees actually received by Buyer related to such Mortgage Loans.

 

(ooo)      “Required Documents” means for any Mortgage Loan, those items described on Exhibit I attached hereto.  At Buyer’s reasonable discretion, Buyer may change the

 

7

 

Required Documents by delivering a new Exhibit I to Seller which shall be effective three (3) Business Days after delivery of the new Exhibit I to Seller.

 

(ppp)      “Requirements of Law” means, as to any Person, all requirements and prohibitions contained in the Certificate of Incorporation, Bylaws, Certificates of Formation and Operating Agreement, or other organizational or governing documents of such Person, and of any law, treaty, rule or regulation, or of any final and binding determination of an arbitrator or a determination of a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property, or to which such Person or any of its property is subject.

 

(qqq)      “Settlement Agent” means, unless such entity is disapproved by prior written notice of the Buyer, the title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Mortgage Loan is being originated, to which the proceeds of such Transaction are to be wired.

 

(rrr)         “Subsidiary” means any Person, more than fifty percent (50%) of the stock or other ownership interest of which, having by the terms thereof, ordinary voting power to elect the board of directors, managers or trustees of such corporation, partnership or joint venture (irrespective of whether or not at the time stock of any other class or classes of such corporation, partnership or joint venture shall have or might have voting power by reason of the happening of any contingency) shall, at the time as of which any determination is being made, be owned, either directly by Seller or through Seller’s Subsidiaries.

 

(sss)       “Take-out Investor” means Fannie Mae, Freddie Mac, Ginnie Mae or any non-agency investor approved in advance by Buyer.

 

(ttt)         “Tangible Net Worth” means the excess of total assets over total liabilities, less all assets which would be classified as intangible assets under GAAP, including, without limitation, purchased and capitalized value of servicing rights, goodwill (whether representing the excess cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises and deferred charges (including, without limitation, unamortized debt discount and expense, organization costs and research and product development costs).

 

(uuu)      “Termination Date” means June 30, 2011, or such earlier date on which this Agreement shall terminate in accordance with the provisions hereof or by operation of law.

 

(vvv)      “Third Party Mortgage Loan” means a Mortgage Loan that was acquired by Seller from a third party mortgage loan originator (including Affiliates of Seller).

 

(www)    “Transaction” shall have the meaning set forth in the Recital to this Agreement.

 

(xxx)        “Underwriting Standards” means the underwriting guidelines which comply with the current requirements of Fannie Mae, Freddie Mac or Ginnie Mae (depending upon which agency the Seller will sell the Mortgage Loan) or the underwriting guidelines of any other Take-out Investor (if the Seller will sell the Mortgage Loan to such  other Take-out Investor).

 

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(yyy)      “UCC” means the Uniform Commercial Code in the applicable jurisdiction.

 

(zzz)        “Unrestricted Minimum Cash Balance” means the combined unrestricted cash and cash equivalents on the balance sheets of Excel and AmeriHome that is free and clear of any liens net of any outstanding checks and in-transit items.

 

(aaaa)     “Utilization Percentage” has the meaning provided in Section 3(o) hereof.

 

(bbbb)    “VA” means the Veterans Administration and any successor agency.

 

(cccc)     “Wet-Ink Mortgage Loan” means a Mortgage Loan which Seller is selling to Buyer simultaneously with the origination thereof and the original Note and other Required Documents are to be delivered to the Buyer pursuant to Section 3(f) hereof.

 

2.             Representations and Warranties.

 

(a)           Corporate Representations and Warranties.  Seller represents and warrants to Buyer as of the date hereof and as of each Purchase Date for any Transaction that:

 

(1)           Seller Existence.  Excel has been duly organized and is validly existing as a corporation in good standing under the laws of the State of California.  AmeriHome has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Michigan.

 

(2)           Licenses.  Seller is duly licensed or is otherwise qualified in each jurisdiction in which it transacts business for the business which it conducts and is not in default of any applicable federal, state or local laws, rules and regulations unless, in either instance, the failure to take such action is not reasonably likely (either individually or in the aggregate) to cause a Material Adverse Effect.  Seller has the requisite power and authority and legal right to originate the Mortgage Loans and to own, sell and grant a lien on all of its right, title and interest in and to the Mortgage  Loans, and to execute and deliver, engage in the Transactions contemplated by, and perform and observe the terms and conditions of, the Purchase Documents.

 

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

 

(4)           Due Authorization.  Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Purchase Documents, as applicable.  This Agreement has been, and, in the case of the applicable Purchase Request not yet executed, will, on such Purchase Date, be duly authorized, executed and delivered by Seller, all requisite or other corporate action having been taken, and each is valid, binding and enforceable against Seller in accordance with its

 

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terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or by general principles of equity.

 

(5)           Financial Statements.  Seller has heretofore furnished to Buyer a copy of (a) its consolidated and consolidating balance sheet and the consolidated and consolidating balance sheets of its consolidated Subsidiaries for the fiscal year of Seller ended December 31, 2009 and the related consolidated statements of income and retained earnings and of cash flows for Seller and its consolidated Subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of its certified public accountants and (b) its consolidated and consolidating balance sheet and the consolidated and consolidating balance sheets of its consolidated Subsidiaries for the quarterly fiscal period of Seller ended September 30, 2010, and the related consolidated statements of income and retained earnings and of cash flows for Seller and its consolidated Subsidiaries for such quarterly fiscal periods, setting forth in each case in comparative form the figures for the previous year. All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial condition of Seller and its Subsidiaries and the consolidated results of their operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis.  Since September 30, 2010 there has been no material adverse change in the consolidated business, operations or financial condition of Seller and its consolidated Subsidiaries taken as a whole from that set forth in said financial statements nor is Seller aware of any state of facts which (with notice or the lapse of time) would or could result in any such material adverse change.  Seller has, on the date of the statements delivered pursuant to this Section 2(a)(5) no material liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of Seller except as heretofore disclosed to Buyer in writing.

 

(6)           Solvency.  Seller is solvent and will not be rendered insolvent by any Transaction and, after giving effect to such Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business.  Seller does not intend to incur, nor does it believe it has incurred, debts beyond its ability to pay such debts as they mature nor is it contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets.  Seller is not transferring any Mortgage Loans with any intent to hinder, delay or defraud any of its creditors.

 

(7)           No Conflicts.  The execution, delivery and performance by Seller of the Purchase Documents does not conflict with any term or provision of any Requirements of Law, which conflict would have a Material Adverse Effect, and will not result in any violation of any mortgage, instrument, agreement or obligation to which Seller is a party.

 

(8)           True and Complete Disclosure.  All information, reports, exhibits, schedules, financial statements or certificates of Seller, the Guarantors, Subsidiaries or any of their officers furnished or to be furnished by Seller to Buyer in connection with the initial

 

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or any ongoing due diligence of Seller, the Guarantors, Subsidiaries or any of their officers, or the negotiation, preparation, or delivery of this Agreement are true and complete and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading.

 

(9)           Approvals.  No consent, approval, authorization or order of, registration or filing with, or notice to any governmental authority or court is required under applicable law in connection with the execution, delivery and performance by Seller of the Purchase Documents, except for the filing of financing statements.

 

(10)         Litigation.  There is no action, proceeding or investigation pending with respect to which Seller has received service of process or, to the best of Seller’s knowledge threatened against it before any court, administrative agency or other tribunal (A) asserting the invalidity of any Purchase Document, (B) seeking to prevent the consummation of any of the transactions contemplated by any Purchase Document, (C) makes a claim individually in an amount greater than $250,000 or in an aggregate amount greater than $500,000, (D) which requires filing with the Securities and Exchange Commission in accordance with the 1934 Act or any rules thereunder, or (E) which might materially and adversely affect the validity of the Mortgage Loans or the performance by it of its obligations under, or the validity or enforceability of, any Purchase Document.

 

(11)         Material Adverse Change.  There has been no material adverse change in the business, operations, financial condition or properties of Seller, the Guarantors or Subsidiaries since the date set forth in the most recent financial statements supplied to Buyer by Seller.

 

(12)         Taxes.  Seller and its Subsidiaries have timely filed all tax returns that are required to be filed by them and have paid all taxes, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. The charges, accruals and reserves on the books of Seller and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of Seller, adequate.

 

(13)         Investment Company.  Neither Seller nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

(14)         Chief Executive Office: Jurisdiction of Organization.  Excel’s chief executive office is located at 19500 Jamboree Road #400, Irvine, California 92612.  Excel’s jurisdiction of organization is California.  AmeriHome’s chief executive office is located at 2141 W. Bristol Road, Flint, Michigan 48507.  AmeriHome’s jurisdiction of organization is Michigan.  Seller has no trade name.  During the preceding five years, Seller has not been known by or done business under any other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy, receivership or similar petitions nor has it made any assignments for the benefit of creditors.

 

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

 

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

 

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

 

(18)         Agency Approvals.  AmeriHome is approved by FHA and, to the extent necessary, Seller is approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act.  In each such case, as applicable, Seller is in good standing, with no event having occurred or Seller having any reasonable basis to believe or suspect will occur, as the case may be, including, without limitation, a change in insurance coverage which would either make Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the FHA or to the Department of Housing and Urban Development.  Should Seller for any reason cease to possess all such applicable approvals, or should notification to the FHA or to the Department of Housing and Urban Development be required, Seller shall so notify Buyer immediately in writing.

 

(19)         Plan Assets.  Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(l) of the Code, and the Purchased Mortgage Loans are not “plan assets” within the meaning of 29 CFR §2510.3-101 in Seller’s hands.

 

(20)         No Prohibited Persons.  Neither Seller, the Guarantors, Subsidiaries, nor any of their officers, directors, partners, employees or members, is an entity or person (or to Seller’s knowledge, owned or controlled by an entity or person): (i) that is listed in the Annex to, or is otherwise subject to the provisions of Executive Order 13224 issued on September 24, 2001 (“EO13224”); (ii) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/tllsdn.pdf); (iii) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO13224; or (iv) who is otherwise affiliated with any entity or person listed above.

 

(b)           Representations and Warranties Re: Mortgage Loan.  Seller represents and warrants to Buyer, with respect to each Mortgage Loan, that as of the date hereof and as of each day the Mortgage Loan is subject to a Transaction that:

 

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(1)           No Outstanding Charges.  There are no defaults in complying with the terms of the Mortgage securing the Mortgage Loan, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Note or date of disbursement of the proceeds of the Mortgage Loan, whichever is more recent, to the day which precedes by one month the Due Date of the first installment of principal and interest thereunder.

 

(2)           Original Terms Unmodified.  The terms of the Note and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination, except by a written instrument which has been recorded, if necessary to protect the interests of Buyer. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required by the title insurance policy.  No Mortgagor in respect of the Loan has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by such policy, and which assumption agreement is part of the Required Documents.

 

(3)           FHA/VA Approval.  For any FHA Mortgage Loans or VA Mortgage Loans, all parties which have had any interest in the Mortgage, whether as mortgagee or assignee, are (or, during the period in which they held and disposed of such interest, were) an FHA Approved Mortgagee or VA Approved Lender as the case may be.

 

(4)           FHA Mortgage Insurance; VA Loan Guaranty.  Upon the issuance of the related Mortgage Insurance Certificate, with respect to each FHA Mortgage Loan, the FHA Mortgage Insurance Contract is in full force and effect and there exists no impairment to full recovery without indemnity to the Department of Housing and Urban Development or the FHA under FHA Mortgage Insurance.  With respect to the VA Mortgage Loans, the VA Mortgage Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein.  Upon the Approval Date, with respect to each FHA Mortgage Loan and VA Mortgage Loan, all necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the FHA and the VA, respectively, to the full extent thereof, without surcharge, set-off or defense.  Each FHA Mortgage Loan and VA Mortgage Loan was originated in accordance with the requirements of the applicable Agency.

 

(5)           No Defenses.  The Mortgage Loan is not subject to any right of rescission, setoff, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Note or the Mortgage, or the exercise of any right thereunder, render either the Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor in respect of the Mortgage Loan was a debtor in any state or Federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated.

 

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(6)           Hazard Insurance.  The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of origination, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than the greatest of (i) 100% of the replacement cost of all improvements to the Mortgaged Property, (ii) the outstanding principal balance of the Mortgage Loan with respect to each Mortgage Loan, (iii) the amount necessary to avoid the operation of any co-insurance provisions with respect to the Mortgaged Property, or (iv) the amount necessary to fully compensate for any damage or loss to the improvements that are a part of such property on a replacement cost basis. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Insurance Administration is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Mortgage Loan, (2) the full insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the Flood Disaster Protection Act of 1973, as amended. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming Seller, its successors and assigns (including without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ (or such shorter period as may be prescribed by applicable law) prior written notice to the mortgagee. No such notice has been received by Seller. All premiums due and owing on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefore from such Mortgagor (as such right to seek reimbursement may be limited by applicable law). Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is in full force and effect. Seller has not engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.

 

(7)           Compliance with Applicable Laws.  Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, all applicable predatory and abusive lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, national security/anti-terror, or disclosure laws applicable to the origination and servicing of such Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and Seller shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, upon five (5) Business Days’ prior request, evidence of compliance with all such requirements.

 

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(8)           No Satisfaction of Mortgage.  The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole-or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission except (i) in connection with an assumption agreement which has been approved by the FHA, to the extent required by the applicable FHA Insurance Contract, (ii) in the case of a release of a portion of the land comprising a Mortgaged Property or (iii) a release of a blanket Mortgage which release will not cause the Mortgage Loan to fail to satisfy the Underwriting Standards. Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.

 

(9)           Location and Type of Mortgaged Property.  The Mortgaged Property consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit in a condominium project, or an individual unit in a planned unit development or a de minimis planned unit development.  No residence or dwelling is a mobile home.  No portion of the Mortgaged Property is used for commercial purposes; provided that any Mortgaged Property that contains a home office shall not be considered used for commercial purposes so long as the Mortgaged Property has not been altered for commercial purposes.

 

(10)         Valid Lien.  The Mortgage is a valid, subsisting, enforceable and perfected first lien and first priority security interest with respect to each Mortgage Loan, on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing.  The lien of the Mortgage is subject only to:

 

(i)            the lien of current real property taxes and assessments not yet due and payable;

 

(ii)           covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the related Mortgaged Property set forth in such appraisal; and

 

(iii)          other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.

 

Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable first lien and first priority security interest with respect to each Mortgage Loan, on the property described therein and Seller has full right to pledge and assign the same to Buyer.  The

 

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Mortgaged Property was not, as of the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage.

 

(11)         Validity of Mortgage Documents.  The Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms except as enforceability thereof may be limited by bankruptcy, insolvency or reorganization laws, rules and regulations and by general principles of equity.  All parties to the Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Note, the Mortgage and any such agreement, and the Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties.  No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan.

 

(12)         Full Disbursement of Proceeds.   The proceeds of the Mortgage Loan have been fully disbursed and there is no further requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with.  All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Note or Mortgage.

 

(13)         Ownership.  Seller is the sole owner and holder of the Mortgage Loan.  The Mortgage Loan is not assigned or pledged, and Seller has good, indefeasible and marketable title thereto, and has full right to transfer, pledge and assign the Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to assign, transfer and pledge each Mortgage Loan pursuant to this Agreement and following the pledge of each Mortgage Loan, Buyer will hold such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement.

 

(14)         Doing Business.  All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state or (D) not doing business in such state.

 

(15)         LTV.  No Mortgage Loan has a loan-to-value ratio in excess of 100%.  With respect to any Mortgage Loan that has a loan-to-value ratio in excess of eighty percent (80%), the portion of the unpaid principal balance which is in excess of eighty

 

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percent (80%) of the original amount of the Mortgage Loan is and will be insured as to payment defaults under a private mortgage insurance policy issued by a primary mortgage insurer licensed to do business in the state in which the Mortgaged Property is located an acceptable to Fannie Mae or Freddie Mac, so as to reduce the Mortgage Loan holder’s exposure, all in accordance with the standards of Fannie Mae or Freddie Mac and applicable law.  Notwithstanding the foregoing, however, such a private mortgage insurance policy is not required for a Mortgage Loan that has a loan-to-value ratio in excess of eighty percent (80%) if such Mortgage Loan is an FHA Mortgage Loan or VA Mortgage Loan that meets the requirements of Section 2(b)(4) above.  All provisions of such primary mortgage insurance policy have been complied with; such policy is valid and in full force and effort and all premiums due thereunder have been paid.

 

(16)         Title Insurance.  The Mortgage Loan is covered by an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance acceptable to FHA, Fannie Mae or Freddie Mac and each such title insurance policy is issued by a title insurer acceptable to FHA, Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (i), (ii) and (iii) of paragraph (10) of this Section 2(b), with respect to each Mortgage Loan.  Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance.  Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein.  The title policy does not contain any special exceptions (other than the standard exclusions or other exclusions customary in the relevant jurisdiction) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading.  Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement.  No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.

 

(17)         No Defaults.  There is no default, breach, violation or event of acceleration existing under the Mortgage or the Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration.

 

(18)         No Mechanics’ Liens.  There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with the lien of the Mortgage.

 

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(19)         Location of Improvements; No Encroachments.  All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property.  No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.

 

(20)         Origination; Payment Terms.  The Mortgage Loan was originated by or in conjunction with a mortgage banker licensed under applicable state law, a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar banking institution which is supervised and examined by a federal or state authority.  Monthly principal and interest payments on the Mortgage Loan commenced or will commence no more than sixty (60) days after funds were disbursed in connection with the Mortgage Loan.  The mortgage interest rate is adjusted, with respect to adjustable rate Mortgage Loans, on each interest rate adjustment date to equal the index plus the gross margin (rounded up or down to the nearest .125%), subject to the mortgage interest rate cap.  With respect to each Mortgage Loan, the Note is payable on the first day of each month in equal monthly installments of principal and interest, which installments of interest, with respect to an adjustable rate mortgage loan, are subject to change due to the adjustments to the mortgage interest rate on each adjustment date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty (30) years from commencement of amortization.  No Mortgage Loan contains a balloon payment feature or payments of interest only for a period of time.

 

(21)         Customary Provisions.  The Note has a stated maturity.  The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure.  Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property.  There is no homestead or other exemption available to a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage.

 

(22)         Conformance with Underwriting Standards and Agency Standards.  The Mortgage Loan was underwritten in accordance with the Underwriting Standards in effect at the time of the origination of such Mortgage Loan with any exceptions thereto exercised in a prudent manner based on compensating factors and having no adverse effect upon the value of such Mortgage Loan.  The Note and Mortgage are on forms similar to those used by Freddie Mac or Fannie Mae and Seller has not made any representations to a Mortgagor that are inconsistent with the mortgage instruments used.

 

(23)         Occupancy of the Mortgaged Property.  As of the Purchase Date the Mortgaged Property is either vacant or lawfully occupied under applicable law.  All inspections, licenses and certificates required to be made or issued with respect to all occupied

 

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portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities.  Seller has not received written notification from any Governmental Authority that the Mortgaged Property is in material non-compliance with such laws or regulations, is being used, operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be.  Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate.

 

(24)                            No Additional Collateral.  The Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (10) above.

 

(25)                            Deeds of Trust.  In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.

 

(26)                            Delivery of Mortgage Documents.  If the Mortgage Loan is a Dry Mortgage Loan, the Note, a copy of the Mortgage, the Assignment of Mortgage (other than for a MERS Mortgage Loan) and any other documents required to be delivered under this Agreement for each Mortgage Loan have been delivered to Buyer or its custodian and, if the Mortgage Loan is a Wet-Ink Mortgage Loan, the Required Documents shall be delivered pursuant to Section 3(f).

 

(27)                            Transfer of Loans.  The Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.

 

(28)                            Due-On-Sale.  The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder unless prohibited by applicable state law.

 

(29)                            No Buydown Provisions; No Graduated Payments or Contingent Interests.  Unless otherwise disclosed to and approved by Buyer in writing, the Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision.  The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.

 

(30)                            Consolidation of Advances.  Any advances made to the Mortgagor prior to the origination of the Mortgage Loan have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term.  The lien of the Mortgage

 

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securing the consolidated principal amount is expressly insured as having first lien priority with respect to each Mortgage Loan, by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae, Freddie Mac and FHA. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.

 

(31)                            Mortgaged Property Undamaged.  The Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended and each Mortgaged Property is in good repair.  There have not been any condemnation proceedings with respect to the Mortgaged Property and Seller has no knowledge of any such proceedings.

 

(32)                            Collection Practices; Escrow Deposits: Interest Rate Adjustments.  The origination and collection practices used by Seller with respect to the Mortgage Loan have been in all material respects in compliance with Accepted Servicing Practices and applicable laws and regulations, and have been in all respects legal and proper.  With respect to escrow deposits and escrow payments, all such payments are in the possession of, or under the control of, Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made.  All escrow payments have been collected in full compliance with state and federal law.  An escrow of funds is not prohibited by applicable law and has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable.  No escrow deposits or escrow payments or other charges or payments due Seller have been capitalized under the Mortgage or the Note.  All mortgage interest rate adjustments have been made in strict compliance with state and federal law and the terms of the related Note.  Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.

 

(33)                            Other Insurance Policies.  As of the related date on which servicing is transferred to the Servicer, no action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, PMI Policy or bankruptcy bond.  In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by Seller or by any officer, director, or employee of Seller or any designee of Seller or any corporation in which Seller or any officer, director, or employee had a financial interest at the time of placement of such insurance.

 

(34)                            Servicepersons’ Civil Relief Act.  The Mortgagor has not notified Seller, and Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicepersons’ Civil Relief Act.

 

(35)                            Appraisal.  The Seller obtained an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by a qualified appraiser, duly appointed by Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae, Freddie Mac or the FHA and Title XI of the Federal Institutions

 

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Reform, Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.

 

(36)                            Disclosure Materials.  The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and Seller maintains such statement in its files.

 

(37)                            Construction or Rehabilitation of Mortgaged Property.  No Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property.

 

(38)                            No Defense to Insurance Coverage.  No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.

 

(39)                            Capitalization of Interest.  The Note does not by its terms provide for the capitalization or forbearance of interest.

 

(40)                            No Equity Participation.  No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and Seller has not financed nor does it own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.

 

(41)                            Mortgage Submitted for Recordation.  The Mortgage has been submitted, or will immediately following the closing of the related Mortgage Loan be submitted, for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

 

(42)                            Acceptable Investment.  No specific circumstances or conditions exist with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that should reasonably be expected to (i) cause private institutional investors which invest in loans similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment, (ii) cause the Mortgage Loan to be more likely to become past due in comparison to similar loans, or (iii) adversely affect the value or marketability of the Mortgage Loan in comparison to similar loans.

 

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(43)                            Environmental Matters.  To Seller’s knowledge the Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation.

 

(44)                            HOEPA.  No Mortgage Loan is (a) subject to the provisions of the Homeownership and Equity Protection Act of 1994 as amended (“HOEPA”), (b) a “high cost” mortgage loan, “covered” mortgage loan, “high risk home” mortgage loan, or “predatory” mortgage loan or any other comparable term, no matter how defined under any federal, state or local law, (c) subject to any comparable federal, state or local statutes or regulations, or any other statute or regulation providing for heightened regulatory scrutiny or assignee liability to holders of such mortgage loans, or (d) a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the current Standard & Poor’s LEVELS® Glossary Revised, Appendix E).

 

(45)                            No Predatory Lending.  No predatory, abusive or deceptive lending practices, including but not limited to, the extension of credit to a mortgagor without regard for the mortgagor’s ability to repay the Mortgage Loan and the extension of credit to a mortgagor which has no tangible net benefit to the mortgagor, were employed in connection with the origination of the Mortgage Loan.

 

(46)                            MERS Loans.  With respect to each MERS Mortgage Loan, a Mortgage Identification Number has been assigned by MERS and such Mortgage Identification Number is accurately provided on the Mortgage and Seller shall provide Buyer with evidence of such assignment within three (3) Business Days after the closing of such MERS Mortgage Loan.  If applicable, the related Assignment of Mortgage to MERS has been duly and properly recorded.  With respect to each MERS Mortgage Loan, Seller has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.

 

(c)                                  Remedies for Breach of Section 2(b).  The representations and warranties set forth in this Agreement shall survive transfer of the Mortgage Loans to Buyer and shall continue for so long as the Mortgage Loans are subject to this Agreement.  Upon discovery by Seller or Buyer of any breach of any of the representations or warranties set forth in Section 2(b) of this Agreement, the party discovering such breach shall promptly give notice of such discovery to the other.  Buyer has the right to require, in its reasonable discretion, Seller to repurchase at the Repurchase Price within two (2) Business Days after receipt of notice from Buyer any Mortgage Loan for which a breach of one or more of the representations and warranties referenced in Section 2(b) exists and which breach has a material adverse effect on the value of such Mortgage Loan or the interests of Buyer therein.

 

3.                                       Purchase Loan Transactions.

 

(a)                                  (i)                                     Seller shall request a Transaction by delivering to Buyer via Electronic Transmission a Purchase Request at least one (1) Business Day prior to Purchase Date.  Buyer shall have the obligation to enter into Transactions up to the Maximum Aggregate Purchase Price.

 

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(ii)                                  In addition, Seller shall provide Buyer with credit information on the Mortgage Loan Obligor sufficient to enable Buyer to perform an independent credit analysis on Obligor, if Buyer decides to perform an independent credit analysis.  If Seller submits a substantial quantity of Transactions, Buyer may use sampling techniques to independently verify credit information of the Obligor.

 

(iii)                               No later than the Purchase Date, Buyer shall forward to Seller a confirmation (a “Confirmation”) by Electronic Transmission setting forth with respect to each Transaction funded on such date, (1) the mortgage loan number, (2) the Purchase Price for such Mortgage Loans, (3) the outstanding principal amount of the related Mortgage Loans, (4) the Repurchase Date, and (5) the Pricing Rate(s).  In the alternative, buyer may post the Confirmation on its computer system and provide the Seller with limited on-line access to Buyer’s computer system for the purpose of Seller viewing the Confirmation.  Buyer shall provide Seller with prior notice and instructions on how to access the system if Buyer elects to implement this alternative Confirmation delivery process.

 

(iv)                              In the event Seller disagrees with any terms of the Confirmation, Seller shall notify Buyer in writing of such disagreement within one (1) Business Day after receipt of such Confirmation unless a corrected Confirmation is sent by Buyer.  An objection sent by Seller must specify the provision(s) being objected to by Seller, must set forth such provision(s) in the manner that Seller believes they should be stated, and must be received by Buyer no more than one (1) Business Day after the Confirmation was received by Seller.

 

(v)                                 In connection with the sale of the Mortgage Loan to a Take-Out Investor, the Seller shall request the Buyer deliver to such Take-Out Investor the original Mortgage Note, and, in some cases, other documents contained in the Mortgage Loan file, along with a bailee letter instructing the Take-Out Investor to hold the original Mortgage Note and any other documents as bailee for the Buyer.  Prior to such delivery, Seller shall provide Buyer with a copy of the sale agreement, trade confirmation or similar document with such Take-Out Investor or letter of good standing from the Take-Out Investor.  As long as Seller meets the requirements contained in the prior two sentences, Buyer shall deliver such documents to the Take-Out Investor within one (1) Business Day of such request by Seller.  The bailee letter shall instruct the Take-Out Investor to send the sale proceeds to the Buyer’s collection account.  The Seller shall provide Buyer with a copy of the purchase advice from the Take-Out Investor and the Buyer shall match the purchase advice against the Repurchase Price due from Seller related to such Mortgage Loan.  Any excess proceeds shall be transferred to the Seller’s maintenance account at the Buyer and any shortfall shall be transferred from the Seller’s maintenance account to the Buyer’s collection account.  Upon receipt of the entire Repurchase Price, the Buyer’s interest in such Mortgage Loan shall be released.  The bailee letter shall provide, in the event the Take-Out Investor does not purchase a Mortgage Loan within thirty (30) Business Days of receipt of the original Mortgage Note, the Take-Out Investor shall immediately return to the Buyer such Mortgage Note and other documents it received related to such Mortgage Loan.

 

(b)                                 Any Confirmation by Buyer shall be deemed to have been received by Seller on the Business Day actually received by Seller if received by Seller prior to 3 p.m. California time on such Business Day.

 

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(c)                                  Except as set forth in Section 3(a), each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, and Seller’s acceptance of the related proceeds shall constitute Seller’s agreement to the terms of such Confirmation.  It is the intention of the parties that each Confirmation shall not be separate from this Agreement but shall be made a part of this Agreement.

 

(d)                                 If Seller is requested by Buyer, Mortgage Loan Obligors will be instructed by Seller at the closing of a Mortgage Loan to remit all principal, interest, tax escrow and insurance escrow payments to an account established by Buyer and any such instructions shall constitute a servicing change and shall be completed in accordance with Section 10 of this Agreement.  Buyer shall provide Seller with any required notices or disclosures to be delivered by the Seller to the Mortgage Loan Obligors if Buyer makes the request under this Section.

 

(e)                                  In no event shall a Transaction be entered into when any Event of Default has occurred and is continuing.

 

(f)                                    For Wet-Ink Mortgage Loans, upon the request of Buyer, Seller shall cause the Settlement Agent to send Buyer a facsimile of the associated escrow instruction letter on each Purchase Date.  Subject to the provisions of this Section 3, the Purchase Price for each Mortgage Loan will then be made available to Seller by Buyer transferring the aggregate amount of such Purchase Price in accordance with Seller’s wiring instructions.  Seller shall deliver the Required Documents (including the original executed Note) for Wet-Ink Mortgage Loans for receipt by Buyer no later than five (5) Business Day following the Purchase Date.  Until delivery of the Required Documents is made to Buyer, Seller shall cause the Required Documents to be held in custody for Buyer as its bailee.  Seller shall deliver the Required Documents for Dry Mortgage Loans no later than one (1) Business Day prior to the Purchase Date.  Buyer shall hold the Required Documents in custody for Seller as its bailee until it purchased such Dry Mortgage Loan.

 

(g)                                 On the Repurchase Date, Seller shall pay to Buyer a fee of One Hundred and 00/100 Dollars ($100) per loan for each Mortgage Loan purchased pursuant to this Agreement.

 

(h)                                 On the Repurchase Date, termination of a Transaction will be effected by transfer to Seller or its designee of the Required Documents (and any income in respect thereof received by Buyer not previously credited or transferred to, or applied to the obligations of, Seller) which amount shall be netted against the simultaneous receipt of the Repurchase Price by Buyer.  To the extent a net amount is owed to one party, the other party shall pay such amount to such party.

 

(i)                                     Subject to the terms and conditions of this Agreement, during the term of this Agreement Seller may sell to Buyer, repurchase from Buyer and resell to Buyer Mortgage Loans hereunder, including Third Party Mortgage Loans.

 

(j)                                     If any change subsequent to the date hereof in any applicable law, order, regulation, treaty or directive issued by any central bank or other Governmental Authority, or in the governmental or judicial interpretation or application thereof, or compliance by Buyer

 

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with any request or directive (whether or not having the force of law) by any central bank or other Governmental Authority:

 

(1)                                  subjects Buyer to any tax of any kind whatsoever with respect to this Agreement or any Loans made hereunder, or change the basis of taxation of payments to Buyer of principal, fee, interest or any other amount payable hereunder (except for change in the rate of tax on the overall net income of Buyer);

 

(2)                                  imposes, modifies or holds applicable any reserve, capital requirement, special deposit, compulsory loan or similar requirements against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of Buyer which are not otherwise included in the determination of the corporate base rate; or

 

(3)                                  imposes on Buyer any other condition;

 

and such change increases the cost to Buyer of purchasing or maintaining any Mortgage, or reduces any amount receivable in respect thereof, or reduces the rate of return on the capital of Buyer or any Person controlling Buyer, then, in any such case, Seller shall promptly pay to Buyer, upon its written demand, any additional amounts necessary to compensate Buyer for such cost increase or reduction in the amounts receivable or rate of return, as determined by Buyer, with respect to this Agreement or Mortgage Loans purchased hereunder.  If Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify Seller in writing of the event by reason of which it has become so entitled.  Buyer shall provide with such notice a certificate as to any additional amounts payable pursuant to the foregoing sentence, containing the calculation thereof in reasonable detail, and such calculation shall be conclusive in the absence of manifest error.  The provisions hereof shall survive the termination of this Agreement.

 

(k)                                  After either (i) an Event of Default occurs, unless and until such Event of Default is waived or cured as provided in this Agreement, or (ii) the Repurchase Date, the Pricing Rate for all Mortgage Loans then owned by Buyer shall be the Default Rate until the Repurchase Price paid in full.

 

(l)                                     If Seller has not repurchased a Mortgage Loan sold to Buyer hereunder before the forty-sixth (46th) calendar day after the Purchase Date, Seller shall pay Buyer an administrative fee of Three Hundred and 00/100 Dollars ($300) for such Mortgage Loan and additional administrative fees of Three Hundred and 00/100 Dollars ($300) for each additional thirty (30) days such Mortgage Loan is not repurchased by Seller.  Such payment shall be immediately due upon reaching the end of each period.  In the event the Repurchase Price is paid down to One Hundred and 00/100 Dollars ($100.00) or less remaining on the balance due, the administration fee shall, thereafter, cease.

 

(m)                               If Seller does not deliver the Required Documents for a Wet-Ink Mortgage Loan as required under Section 3(f), Seller shall pay Buyer Twenty Five and 00/100 Dollars ($25.00) per day until such Required Documents are delivered to Buyer or until Seller repurchases the Wet-Ink Mortgage Loan.

 

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(n)                                 Seller agrees to pay to Buyer a commitment fee equal to the Commitment Fee, such payment to be made in Dollars, in immediately available funds, without deduction, set off or counterclaim.  Buyer may, in its sole discretion, net such Commitment Fee from the proceeds of any Purchase Price paid to any Seller.

 

(o)                                 On a monthly basis starting in February 2011 for the January 2011 time period and on the Termination Date, Buyer shall determine the average monthly utilization during the preceding month (or with respect to the Termination Date, during the period from the date through which the last non-utilization fee calculation has been made to the Termination Date by Seller) by dividing (a) the sum of the Purchase Prices outstanding on each day during such period, by (b) the number of days in such period.  If such average amount determined for any period as a percentage of the Maximum Aggregate Purchase Price (the “Utilization Percentage”) is less than fifty percent (50%), Seller shall pay to Buyer, within one (1) Business Day after receiving notice from Buyer of the amount thereof, a non-utilization fee equal to the product of (i) 0.50%, times (ii) the Maximum Aggregate Purchase Price, times (iii) 1 minus the Utilization Percentage (the “Non-Utilization Fee”), (iv) divided by 12.  The fee shall be prorated for the month of the Termination Date, if the Termination Date does not occur on the last day of such month.  If the Utilization Percentage in any period is greater than or equal to fifty percent (50%) or the funding volume is greater than two and one quarter (2.25) times the Maximum Aggregate Purchase Price in any period, Buyer shall not be paid a Non-Utilization Fee for that period.  All payments shall be made to Buyer in dollars, in immediately available funds, without deduction, setoff or counterclaim by the twentieth (20th) day of such month.  Buyer may not net such Non-Utilization Fee from the proceeds of any Purchase Price due to Seller.

 

(p)                                 In the event the Repurchase Date does not occur within forty-five (45) days of the Purchase Date, Seller must immediately pay Buyer an amount equal to not less than twenty-five percent (25%) of the Repurchase Price.  In the event the Repurchase Date does not occur within sixty (60) days of the Purchase Date, Seller must immediately pay Buyer the amount necessary to reduce the Repurchase Price to One Hundred and 00/100 Dollars.

 

(q)                                 On a monthly basis Buyer shall determine the Balance Funded Amount during the preceding month.  If the Balance Funded Amount of any such monthly period exceeds zero (0), then (notwithstanding the definition of Pricing Rate contained in Section 1 hereof) the LIBOR component of the Pricing Rate shall be zero (0) for Transactions up to the Balance Funded Amount for such monthly period.  Buyer shall calculate the difference between the Price Differential paid by Seller in such month and the Price Differential that would have been paid by Seller based on the Pricing Rate pursuant to this Section 3(q) and shall pay such difference to Seller by the twentieth (20th) day of the next succeeding month.

 

4.                                       Security Agreement; Additional Documents.

 

(a)                                  Each of the following items or types of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, is hereinafter referred to as the “Purchased Items”:  all Mortgage Loans sold by Seller to  Buyer hereunder, all mortgage files related to such Mortgage Loans, including without limitation the related Note, all servicing records relating to such Mortgage Loans and any other collateral pledged or otherwise relating to such Mortgage Loans, together with all files, documents, instruments, surveys, certificates, correspondence, appraisals, computer programs, computer

 

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storage media, accounting records and other books and records relating thereto, all mortgage guaranties and insurance (issued by a Governmental Authority or otherwise) and any mortgage insurance certificate or other document evidencing such mortgage guaranties or insurance relating to such Mortgage Loans, all servicing and other rights of Seller relating to such Mortgage Loans, all of Seller’s rights as the owner of such Mortgage Loans under any agreements or contracts relating to, constituting, or otherwise governing, any or all of the foregoing to the extent they relate to the Mortgage Loans including the right to receive principal and interest payments with respect to the Mortgage Loans, the account maintained with Buyer pursuant to Section 6(k) of this Agreement, any deposit accounts or any shares thereof maintained in Seller’s name with any institution, related to any of the foregoing collateral or proceeds thereof, including, proceeds of any take-out commitments related to such Mortgage Loans, all “general intangibles”, “accounts”, “chattel paper”, “deposit accounts” and “investment property” as defined in the UCC as in effect from time to time relating to or constituting any and all of the foregoing, and any and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing.

 

(b)                                 Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Mortgage Loans and not loans from Buyer to Seller secured by the Mortgage Loans.  However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the performance by Seller of all of Seller’s Obligations to Buyer hereunder, Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items to Buyer to secure the Obligations.  The assignment, pledge and grant of security interest contained herein shall be, and assuming that Buyer timely files financing statements and maintains possession of the Notes constituting “instruments” under the relevant Uniform Commercial Code, Seller hereby represents and warrants to Buyer that it is, a first priority perfected security interest.  Seller agrees to mark its computer records and tapes to evidence the interests granted to Buyer hereunder.  All Purchased Items shall secure the payment of all Obligations of Seller now or hereafter existing under this Agreement, including, without limitation, Seller’s obligation to repurchase Mortgage Loans, or if such obligation is so recharacterized as a loan, to repay such loan, for the Repurchase Price and to pay any and all other amounts owing to Buyer hereunder.  This paragraph 4(b) shall constitute a security agreement under applicable law.

 

(c)                                  At any time and from time to time, upon the written request of the Buyer, and at the sole expense of the Seller, the Seller will promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents and take such further action as the Buyer may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, the filing of any financing or continuation statements under the UCC.

 

5.                                       Conditions to Purchasing of Mortgage Loans.

 

(a)                                  First Mortgage Loan Purchase.  As condition precedent to Buyer’s obligation to purchase the initial Mortgage Loan hereunder:

 

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(1)                                  Seller shall have delivered to Buyer, in form and substance satisfactory to Buyer, each of the following:

 

(i)                                     duly executed copies of this Agreement, the Electronic Tracking Agreement, and the guaranty, if applicable;

 

(ii)                                  copies of all financing statements and other documents, instruments and agreements, properly executed and recorded, which Buyer deems necessary or appropriate;

 

(iii)                               such credit applications, financial statements, authorizations and other information concerning Seller and its business, operations and conditions (financial and otherwise) as Buyer may reasonably request;

 

(iv)                              certified copies of resolutions of the directors of Seller approving the execution and delivery of the Purchase Documents to which Seller is a party, the performance of the Obligations thereunder and the consummation of the transactions contemplated thereby;

 

(v)                                 a certificate from an officer of Seller certifying the names and true signatures of the officers of Seller authorized to execute and deliver the Purchase Documents to which Seller is a party;

 

(vi)                              a copy of Seller’s Articles of Incorporation and Bylaws; and

 

(vii)                           the Commitment Fee, if applicable.

 

(2)                                  All acts and conditions (including, without limitation, the obtaining of any necessary regulatory approvals and the making of any required filings, recordings or registrations) required to be done and performed and to have happened precedent to the execution, delivery and performance of the Purchase Documents and to constitute the same legal, valid and binding Obligations, enforceable in accordance with their respective terms, shall have been done and performed, and shall have happened in due and strict compliance with all applicable laws.

 

(3)                                  All documentation, including without limitation, documentation for corporate and legal proceedings in connection with the Transactions contemplated by the Purchase Documents, shall be satisfactory in form and substance to Buyer and its counsel.

 

(4)                                  Impac Mortgage Holdings, Inc. and Integrated Real Estate Service Corp. shall each guaranty the obligations and duties of Seller under this Agreement.

 

(5)                                  The total outstanding principal balance of all Mortgage Loans owned by Buyer after such purchase shall not exceed the Maximum Aggregate Purchase Price.

 

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(b)                                 Ongoing Mortgage Loans.  As conditions precedent to Buyer’s obligation to purchase any Mortgage Loan hereunder, including the first Mortgage Loan, at and as of the date of advance thereof:

 

(1)                                  There shall have been delivered to Buyer a Purchase Request therefor.

 

(2)                                  The representations and warranties of Seller contained in this Agreement shall be accurate and complete in all respects as if made on and as of the date of such advance, conversion or continuance provided, however, any Mortgage Loan in the process of being repurchased by Seller pursuant to Section 2(c) of this Agreement shall not cause this condition to not be met.

 

(3)                                  There shall not have occurred an Event of Default, or an event which, but for the lapse of time or the giving of notice, or both, would constitute an Event of Default.

 

(4)                                  There shall not have occurred any material adverse change in the financial condition, assets, nature of assets or operations of Seller from that represented in this Agreement, the other Purchase Documents, or the documents or information furnished to Buyer in connection herewith or therewith.

 

(5)                                  The Required Documents for the Mortgage Loan(s) previously funded therewith shall have been received by Buyer as required by Section 3(f) of this Agreement.

 

(6)                                  By making a Purchase Request to Buyer hereunder, Seller shall be deemed to have represented and warranted the accuracy and completeness of the statements set forth in Sections 5(b)(2) through 5(b)(5) above.

 

(7)                                  The total outstanding principal balance of all Mortgage Loans owned by Buyer after such purchase shall not exceed the Maximum Aggregate Principal Balance.

 

6.                                       Affirmative Covenants.  Seller hereby covenants and agrees with Buyer that, as long as any Obligations remain unpaid or Buyer has any obligation to purchase Mortgage Loans hereunder, Seller shall:

 

(a)                                  Financial Statements.  Furnish or cause to be furnished to Buyer:

 

(1)                                  Year-End Financial Statements:  Seller shall deliver to Buyer within ninety (90) days after the end of its respective fiscal year, audited financial statements, including statements of income and retained earnings and a balance sheet with all related notes, all in reasonable detail and prepared in conformity with GAAP, applied on a basis consistent with that of the preceding year; all examined by an independent Certified Public Accountant reasonably acceptable to Buyer, showing its respective financial condition at the close of each year and the results of its operations during the year.  Any qualification or exception to the opinion by the accountant shall render the acceptability of the financial statements subject to Buyer approval.

 

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(2)                                  Quarterly Financial Statements of Seller:  Seller shall deliver to Buyer within forty-five (45) days after the end of each calendar quarter, financial statements for such quarter, including statements of income and retained earnings and a balance sheet with all related notes, all in reasonable detail and prepared in conformity with GAAP, applied on a basis consistent with that of the preceding year showing the financial condition of Seller at the close of each month and the results of operations of Seller during the month.

 

(b)                                 Certificates: Reports: Other Information.  Furnish or cause to be furnished to Buyer:

 

(1)                                  Promptly, such additional financial and other information, including, without limitation, financial statements of Seller and information regarding the Collateral as Buyer may from time to time reasonably request; and

 

(2)                                  Promptly, and in any event within five (5) Business Days after received or sent by Seller, (i) true and complete copies of all audits, reports, studies and similar documentation prepared by, or on behalf of, as applicable, Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA or the Department of Housing and Urban Development or similar agency relating to criticisms or adverse actions of Seller’s operations, servicing or lending practices or criticisms or adverse actions which have been taken in connection with a review, extension or conditioning of any licenses and approvals issued to Seller by, as applicable, Fannie Mae, Freddie Mac, Ginnie Mae, FHA or VA; and (ii) copies of all correspondence between any of the foregoing departments and agencies and Seller related to any such audits, reports, studies and similar documents; and

 

(3)                                  Promptly, copies, if any, of any and all forms, reports, supplements or other documents of any kind filed by Seller with the Securities and Exchange Commission.

 

(c)                                  Payment of Indebtedness.  Pay or otherwise satisfy at or before maturity or before it becomes delinquent or accelerated, as the case may be, all its Indebtedness (including taxes), except Indebtedness being contested in good faith by appropriate proceedings and for which provision is made to the satisfaction of Buyer for the payment thereof in the event Seller is found to be obligated to pay such Indebtedness and which Indebtedness is thereupon promptly paid by Seller.

 

(d)                                 Maintenance of Existence and Properties.  Maintain its company existence and obtain all rights, privileges, licenses, approvals, franchises, properties and assets necessary or desirable in the normal conduct of its business, including but not limited to all approvals with respect to, as applicable, Fannie Mae, Freddie Mac, Ginnie Mae, FHA and VA, and comply with all Requirements of Law (including, without limitation, any Requirements of Law under or in connection with ERISA), except where the failure to so comply is not likely to have a material adverse effect on the business, operations, assets or financial or other condition of Seller or on the Collateral.

 

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(e)                                  Inspection of Property: Books and Records: Audits.

 

(1)                                  Keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and

 

(2)                                  Permit:  (i) representatives of Buyer to (A) visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired by Buyer (but, prior to the occurrence of an Event of Default, only to the extent feasible upon not less than five (5) Business Days’ prior notice), and (B) discuss the business, operations, properties and financial and other condition of Seller with officers and employees of Seller, and with its independent certified public accountants (provided that Seller shall have the right to have a representative present at any such discussions), and (ii) representatives of Buyer to conduct periodic operational audits of Seller’s business and operations.  Notwithstanding anything to the contrary contained herein, unless an Event of Default has occurred or is continuing, Buyer shall not conduct more than two (2) such visits or audits in any twelve (12) month period and the total cost of such visits payable by Seller shall not exceed Twenty Thousand Dollars ($20,000.00).

 

(f)                                    Notices.  Promptly give written notice to Buyer of:

 

(1)                                  The occurrence of any Event of Default or event which, but for the lapse of time or the giving of notice, or both, would constitute an Event of Default, known to responsible management personnel of Seller and the proposed method of cure thereof.

 

(2)                                  Any litigation or proceeding affecting Seller or the Collateral which could have a material adverse affect on the Collateral, or the business, operations, property, or financial or other condition of Seller.

 

(3)                                  Any material adverse change known to responsible management personnel of Seller in the business, operations, property or financial or other condition of Seller; and

 

(g)                                 Expenses.  Pay all reasonable out-of-pocket costs and expenses (including fees and disbursements of outside legal counsel) of Buyer:  (1) incident to the preparation and negotiation of the Purchase Documents, including with respect to or in connection with any waiver or amendment thereof or thereto, (2) associated with any periodic audits conducted pursuant to Section 6(e)(2)(ii) (subject to the limitations contained therein), and (3) incident to the enforcement of payment of the Obligations, whether by judicial proceedings or otherwise, including, without limitation, in connection with bankruptcy, insolvency, liquidations reorganization moratorium or other similar proceedings involving Seller or a “workout” of the Obligations.  The Obligations of Seller under this Section 6(g) shall be effective and enforceable whether or not any Mortgage Loan is purchased by Buyer hereunder and shall survive payment of all other Obligations.

 

(h)                                 Purchase Documents.  Comply with and observe all terms and conditions of the Purchase Documents.

 

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(i)                                     Insurance.  Obtain and maintain insurance with responsible companies in such amounts and against such risks as are acceptable to Buyer, including, without limitation, errors and omissions coverage (written on an “occurrence” basis and providing coverage of at least one million dollars ($1,000,000.00) per occurrence) and fidelity coverage in form and substance acceptable under Fannie Mae, Freddie Mac or Ginnie Mae guidelines, and furnish Buyer on request full information as to all such insurance, and to provide within five (5) days after receipt, certificates or other documents evidencing the renewal of each such policy.  Such insurance shall be underwritten by a company rated B/IV or better in Best Insurance Reports, and must protect Seller against losses resulting from dishonest or fraudulent acts committed by Seller’s employees and agents, and against losses resulting from the negligence, errors or omissions of Seller’s employees and agents in the performance of Seller’s normal loan origination duties.

 

(j)                                     Principal Place of Business.  Seller shall provide Buyer with thirty (30) days advance notice of any change in Seller’s principal office or place of business or jurisdiction.

 

(k)                                  Minimum Maintenance Account Balance.  Collectively, Seller shall maintain at Buyer at all times during the term of this Agreement a Minimum Maintenance Account Balance of Three Hundred Fifty Thousand and 00/100 Dollars ($350,000).  In the event Seller maintains a balance of Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000)  in the account, the Purchase Price Percentage shall be increased to one hundred percent (100%) during such time the increased balance is maintained.

 

7.                                       Negative Covenants.

 

(a)                                  Seller hereby agrees that, as long as any Obligations remain unpaid or Buyer has any obligation to purchase Mortgage Loans hereunder, Seller shall not at any time, directly or indirectly:

 

(1)                                  Minimum Adjusted Tangible Net Worth of Seller.  Permit Excel’s Adjusted Tangible Net Worth as of the last day of any fiscal quarter to be less than Four Million Eight Hundred Thousand and 00/100 Dollars ($4,800,000) or the highest amount required to maintain a mortgage license in any jurisdiction where Seller is licensed to originate mortgage loans, whichever is higher.  Permit AmeriHome’s Adjusted Tangible Net Worth as of the last day of any fiscal quarter to be less than Two Million Four Hundred Thousand and 00/100 Dollars ($2,400,000) or the highest amount required to maintain a mortgage license in any jurisdiction where Seller is licensed to originate mortgage loans, whichever is higher.

 

(2)                                  Dividend.  Declare or pay any dividends, or return any capital, to its owners or authorize or make any other distribution, payment or delivery of property or cash to its owners as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any ownership interest, or set aside any funds for any of the foregoing purposes.  Notwithstanding the provisions of this Section 7(a)(2), Buyer may make payments of the type described herein provided there has not occurred and is continuing, and the making of any such payment would not result in, any Event of Default, or any default which with notice and/or the lapse of time may result in an Event of Default.

 

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(3)                                  Unrestricted Minimum Cash Balance.  Permit Excel’s Unrestricted Minimum Cash Balance to be less than Two Million and 00/100 Dollars ($2,000,000.00).

 

(4)                                  Maximum Funding Capacity to Adjusted Tangible Net Worth Ratio.  Permit the aggregate (Excel and AmeriHome combined) Maximum Funding Capacity to aggregate (Excel and AmeriHome combined) Adjusted Tangible Net Worth ratio to be greater than 15 to 1 at any time.

 

(b)                                 Seller hereby agrees that, at any time an Event of Default occurs and is continuing, Seller shall not at any time, directly or indirectly:

 

(1)                                  Liens.  Create, incur, assume or suffer to exist, any Lien upon the Collateral except as contemplated by this Agreement, or create, incur, assume or suffer to exist any Lien upon any of its other property and assets (including servicing rights) except:

 

(i)                                     Liens for current taxes, assessments or other governmental charges which are not delinquent or which remain payable without penalty, or the validity of which are contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof, provided Seller shall have set aside on its books and shall maintain adequate reserves for the payment of same in conformity with GAAP.

 

(ii)                                  Liens, deposits or pledges made to secure statutory Obligations, surety or appeal bonds, or bonds for the release of attachments or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money), leases or for purposes of like general nature in the ordinary course of Seller’s business.

 

(iii)                               Liens not otherwise permitted by this Section so long as neither (i) the aggregate outstanding principal balance of the obligations secured thereby nor (ii) the aggregate fair market value (determined as of the date such Lien is incurred) of the assets subject thereto exceeds $500,000 at any one time.

 

(2)                                  Indebtedness. Create, incur, assume or suffer to exist, or otherwise become or be liable in respect to any Indebtedness except:

 

(i)                                     The Obligations.

 

(ii)                                  Indebtedness reflected in the financial statements referred to in Section 6(a) above.

 

(iii)                               Trade debt incurred in the ordinary course of business, paid within thirty (30) days after the same has become due and payable or which is being contested in good faith, provided provision is made to the satisfaction of Buyer for the eventual payment thereof in the event it is found that such contested trade debt is payable by Seller.

 

(iv)                              Indebtedness secured by Liens permitted under Section 7(a) above.

 

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(v)                                 Additional Indebtedness in an aggregate principal amount not to exceed $500,000 at any one time.

 

(vi)                              Permitted Other Debt.

 

(3)                                  Consolidation and Merger; Change of Business and Management.  Liquidate or dissolve or enter into any consolidation, merger, partnership, joint venture, syndicate or other combination or make any change in the nature of its business as a mortgage banker as presently conducted or change in senior management without Buyer’s prior written consent.

 

(4)                                  Acquisitions.  Purchase or acquire or incur liability for the purchase or acquisition of any or all of the assets or business of any Person, other than in the normal course of business as currently conducted without Buyer’s prior written consent.

 

(5)                                  Subsidiaries.  Organize any Subsidiary without Buyer’s prior written consent.

 

(6)                                  Investments:  Advances; Guaranties.  Make or commit to make any advance, loan or extension of credit without the prior written consent of Buyer (other than (i) advances of salary or earned commissions to officers of Seller, or (ii) Mortgage Loans made in the ordinary course of Seller’s business) to, or make or commit to make any capital contribution to, or purchase any stocks, bonds, notes, debentures or other securities of, or make any other investment in, or guaranty the indebtedness or other Obligations of, any Person (including but not limited to officers, directors, shareholders and employees of Seller).  Notwithstanding the provisions of this Section 7(f), Buyer may make investments of the type described herein in an aggregate amount not to exceed $100,000 during the term of this Agreement.

 

(7)                                  Sale of Assets.  Sell, lease, assign, transfer or otherwise dispose of any of its assets (other than (i) obsolete or worn out property, or (ii) property having a fair market value not to exceed $50,000 in the aggregate), whether now owned or hereafter acquired, other than in the ordinary course of business as currently conducted and at fair market value.

 

8.                                       Events of Default.  Upon the occurrence of any of the following events (an “Event of Default”):

 

(a)                                  Seller shall fail to pay any Repurchase Price by the Repurchase Date or Seller shall fail to pay within three (3) Business Days after due any other payment obligations under this Agreement, including but not limited to, the payment obligations under Section 3 of this Agreement; or

 

(b)                                 Any representation or warranty made or deemed made by Seller or Guarantor (if Guarantor is not an individual) in any Purchase Document or in connection with any Purchase Document shall be inaccurate or incomplete in any respect on or as of the date made or deemed made (other than any breach of any representation or warranty in Section 2(b); or

 

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(c)                                  Seller or Guarantor (if Guarantor is not an individual) shall fail to maintain its existence, shall default in the observance or performance of any covenant or agreement contained in Section 7 hereof or in the Guaranty, or shall fail to repurchase a Mortgage Loan pursuant to Section 2(c); or

 

(d)                                 Seller or Guarantor shall fail to observe or perform any other term or provision contained in the Purchase Documents, and such failure shall continue for twenty (20) Business Days; or

 

(e)                                  Seller shall default in any payment of principal or interest on any Indebtedness in the aggregate principal amount of Five Hundred Thousand Dollars ($500,000) or more, or Guarantor shall default in any payment of principal or interest on any Indebtedness in the aggregate principal amount of One Million Dollars ($1,000,000) or more, (and without regard for the dollar amount of the defaulted payment), or any other event shall occur, the effect of which is to permit such Indebtedness to be declared or otherwise to become due prior to its stated maturity.  If Seller or Guarantor disputes in good faith such default or other event, Seller shall provide notice to Buyer of such dispute with sufficient details for Buyer to evaluate such dispute.  Based on its evaluation, Buyer may, in its reasonable judgment, declare an Event of Default under this Section 8(e); or

 

(f)                                    (1)  Seller or Guarantor shall commence any case, proceeding or other action (i) relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to Seller or Guarantor, or seeking to adjudicate Seller or Guarantor a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to Seller or Guarantor or the debts of any of them, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for Seller or Guarantor or for all or any substantial part of Seller’s or Guarantor’s assets, or Seller or Guarantor shall make a general assignment for the benefit of its, his, her or their creditors; or (2) there shall be commenced against Seller or Guarantor any case, proceeding or other action of a nature referred to in clause (1) above which (i) results in the entry of an order for relief or any such adjudication or appointment, or (ii) remains undismissed, undishcharged or unbonded for a period of thirty (30) days; or (3) there shall be commended against Seller or Guarantor any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of the assets of any of them which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed, satisfied or bonded pending appeal within thirty (30) days form the entry thereof; or (4) Seller or Guarantor shall take any action in furtherance of, or indicating its, his, her or their consent to, approval of, or acquiescence in (other than in connection with a final settlement), any of the acts set forth in clauses (1), (2) or (3) above; or (5) Seller or Guarantor shall generally not, or shall be unable to, or shall admit in writing its, his, her or their inability to pay its, his, her or their debts as they become due; or

 

(g)                                 (1)  Seller or Guarantor or any of its ERISA Affiliates shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (2) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, (3) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which 

 

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Reportable Event or institution of proceedings is, in the reasonable opinion of Buyer, likely to result in the termination of such Plan for purposes of Title IV of ERISA, and, in the case of a Reportable Event, the continuance of such Reportable Event unremedied for ten (10) days after notice of such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA, is given or the continuance of such proceedings for ten (10) days after commencement thereof, as the case may be, (4) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (5) any withdrawal liability to a Multiemployer Plan shall be incurred by Seller or Guarantor or any of its ERISA Affiliates or (6) any other event or condition shall occur or exist; and in each case in clauses (1) through (6) above, such event or condition, together with all other such events or conditions, if any, is likely to subject Seller or Guarantor or any of their respective ERISA Affiliates to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations, property or financial or other condition of Seller or Guarantor or any of their ERISA Affiliates; or

 

(h)                                 One or more judgments or decrees in an aggregate amount in excess of one hundred thousand dollars $100,000 shall be entered against Seller or Guarantor and all such judgments or decrees shall not have been vacated, discharged, stayed, satisfied or bonded pending appeal within thirty (30) days from the entry thereof; or

 

(i)                                     The revocation or attempted revocation, in whole or in part, of any guarantee by any Guarantor;

 

THEN:

 

(1)                                  Automatically upon the occurrence of an Event of Default under Section 8(f) above; and

 

(2)                                  In all other cases under this Section 8, at the option of Buyer;

 

Buyer’s obligation to purchase Mortgage Loans hereunder shall terminate and Seller shall immediately repurchase all Mortgage Loans then owned by Buyer under this Agreement.

 

9.                                       Termination.

 

This Agreement shall remain in effect until the Termination Date.  However, no such termination shall affect any Transaction previously consummated or the rights and obligations of Seller and Buyer with respect thereto.  Notwithstanding the prior sentence, the Buyer may terminate this Agreement at any time upon providing ninety (90) days prior written notice to Seller.

 

10.                                 Subservicing.

 

(a)                                  Seller shall subservice the Mortgage Loans consistent with the degree of skill and care that Seller customarily requires with respect to similar Mortgage Loans owned or managed by it and in accordance with Accepted Servicing Practices.  The Seller shall (i) comply with all applicable Federal, State and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform its subservicing responsibilities hereunder, and (iii) not impair the rights of Buyer in any Mortgage Loans or any payment thereunder.

 

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

 

(c)                                  If Seller should discover that, for any reason whatsoever, Seller or any entity responsible to Seller for managing or subservicing any such Mortgage Loan has failed to perform fully the obligations of such entities with respect to the Mortgage Loans, Seller shall promptly notify Buyer.

 

11.                                 Miscellaneous Provisions.

 

(a)                                  Assignment; Repurchase Transaction.  Seller may not assign its rights or Obligations under this Agreement without the prior written consent of Buyer.  Buyer may at any time assign its rights and obligations under this Agreement to any Affiliate of Buyer.  Buyer may not assign its rights and obligations hereunder to any Person who is not an Affiliate without the prior written consent of Seller.  A merger or acquisition of either Party shall not constitute an assignment of this Agreement.  Subject to the foregoing, all provisions contained in this Agreement or any document or agreement referred to herein or relating hereto shall inure to the benefit of Buyer, its successors and assigns, and shall be binding upon Seller, its successors and assigns.

 

Buyer may, in its sole discretion, engage in repurchase transactions with the Mortgage Loans or otherwise pledge, hypothecate, assign, transfer or otherwise convey the Mortgage Loans with a counterparty of Buyer’s choice.  No such transaction shall relieve Buyer of its obligations under this Agreement, including transferring the Mortgage Loans and the related servicing rights to the Seller on the applicable Repurchase Date.

 

(b)                                 Amendment.  Neither this Agreement nor any of the other Purchase Documents may be amended or terms or provisions hereof or thereof waived unless such amendment or waiver is in writing and signed by Buyer and Seller.  It is expressly agreed and understood that the failure by Buyer to elect to accelerate amounts outstanding hereunder or to terminate the obligation of Buyer to make Loans hereunder, in each case in accordance with the terms hereof, shall not constitute an amendment or waiver of any term or provision of this Agreement.

 

(c)                                  Cumulative Rights, No Waiver.  The rights, powers and remedies of Buyer under the Purchase Documents are cumulative and in addition to all rights, powers and remedies provided under any and all agreements among Seller and Buyer relating hereto, at law, in equity or otherwise.  Any delay or failure by Buyer to exercise any right, power or remedy shall not constitute a waiver thereof by Buyer, and no single or partial exercise by Buyer of any right, power or remedy shall preclude other or further exercise thereof or any exercise of any other rights, powers or remedies.

 

(d)                                 Entire Agreement.  This Agreement and the documents and agreements referred to herein embody the entire agreement and understanding between the parties hereto and supersede all prior written or verbal agreements and understandings relating to the subject matter hereof and thereof.

 

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(e)                                  Survival.  All representations, warranties, covenants and agreements on the part of Seller contained in the Purchase Documents shall survive the termination of this Agreement and shall be effective until the Obligations are paid and performed in full or longer as expressly provided herein.

 

(f)                                    Notices.  All notices given by any party to the others under the Purchase Documents shall be in writing unless otherwise provided for herein, delivered personally, by overnight delivery service, by e-mail or by depositing the same in the United States mail, registered, with postage prepaid, addressed to the party at the following addresses:

 

If to Buyer:

 

New Century Bank

d/b/a Customers Bank

3705 Quakerbridge Road, Suite 100

Hamilton, New Jersey 08619

Phone:  609-249-8877

Fax:  609-249-8889

Attention:  Glenn Hedde

 

With a copy to:

 

New Century Bank

d/b/a Customers Bank

99 Bridge Street

Phoenixville, Pennsylvania 19460

Attention:  General Counsel

 

If to Seller:

 

EXCEL MORTGAGE SERVICING, INC.

19500 Jamboree Road #400

Irvine, California 92612

Phone:  866-293-1333

Fax:  949-252-2342

Attn:  Ron Morrison

 

AmeriHome Mortgage Corporation

2141 W. Bristol Road

Flint, Michigan 48507

Phone:  810-257-1335

Fax:  810-237-7670

Attn:  Mr. B. Thomas M. Smith, III

 

Any party may change the address to which notices are to be sent by notice of such change to each other party given as provided herein.  Such notices shall be effective on the date received.

 

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(g)           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding its conflict of laws rules.

 

(h)           Counterparts.  This Agreement and the other Purchase Documents may be executed in any number of counterparts, all of which together shall constitute one agreement.

 

(i)            Exculpatory Provisions.  Neither Buyer nor any of its officers, directors, employees, agents, counsel, attorneys-in-fact or Affiliates shall be liable to Seller for any action taken or omitted to be taken by it or such Person under or in connection with the custody of the Purchase Documents or with respect to the custody of the Collateral (except for its or such Person’s own negligence or willful misconduct).

 

(j)            Indemnification.   Seller shall defend and indemnify Buyer and hold Buyer harmless from any and all liability, claims, losses or other damages, including loss or damage due to the unmarketability of any loan, and resulting from (i) any negligent or fraudulent act or omission of Seller or its agents or employees; or (ii) any material breach of any warranty or representation contained herein; or (iii) any material breach of any term or condition of this Agreement; or (iv) any misstatement or omission of material fact in each Loan file or credit file, whether or not such misstatement or omission is intentional or not, whether disclosed by actual inspection of Buyer or its representative or otherwise; or (v) any miscalculations and other errors which result from Seller’s independent processing procedures and for its misuse or alteration of any forms or documents.  If Buyer suffers any liability, loss or damage, or if any claim, action or proceeding shall be asserted or brought against Buyer by reason of any such act or omission of Seller, as stated above, Seller shall, upon demand from Buyer, assume the defense of such action with representation by legal counsel reasonably acceptable to Buyer.  If Buyer demands that Seller assume the defense of any such action and Seller does so, Buyer shall have the right to participate in such defense with counsel of its own choice at Buyer’s expense.

 

(k)           Jurisdiction, Venue and Waiver of Jury Trial.  The Seller hereby irrevocably consents to the exclusive jurisdiction of the state courts of Montgomery County, Commonwealth of Pennsylvania or the United States District Court for the Eastern District of Pennsylvania; provided that nothing contained in this Agreement will prevent the Buyer from bringing any action, enforcing any award or judgment or exercising any rights against the Seller individually, against any security or against any property of the Seller within any other county, state or other foreign or domestic jurisdiction.  The Seller acknowledges and agrees that the venue provided above is the most convenient forum for both the Buyer and the Seller.  The Seller waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.  EACH PARTY HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW AND UPON CONFERRING WITH THEIR RESPECTIVE COUNSEL) ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

 

(l)            Reimbursement.  Seller shall reimburse Buyer for attorneys’ fees and expenses incurred by Buyer to prepare and negotiate the terms of the Purchase Documents.

 

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In addition, all sums reasonably expended by Buyer in connection with the exercise of any right or remedy provided for herein shall be and remain Seller’s obligation (unless and to the extent that Seller is the prevailing party in any dispute, claim or action relating thereto).  Seller agrees to pay, with interest at the Default Rate to the extent that an Event of Default has occurred, the reasonable out-of-pocket expenses and reasonable attorneys’ fees incurred by Buyer in connection with the preparation, negotiation, enforcement (including any waivers) and amendment of the Purchase Documents (regardless of whether a Transaction is entered into hereunder), the taking of any action, including legal action, required or permitted to be taken by Buyer pursuant thereto, any “due diligence” or loan agent reviews conducted by Buyer or on its behalf or by refinancing or restructuring in the nature of a “workout,” in each case to the extent otherwise limited herein.

 

(m)          Intent.  Seller and Buyer recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code.

 

(n)           Setoff and Withdrawal of Funds.

 

(1)           In addition to any rights and remedies of Buyer provided by law, Buyer shall have the right, without prior notice to Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law, (i) upon any amount becoming due and payable by Seller hereunder or Guarantor under the Guaranty (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), including but limited to the accounts required to be established under Section 6(k) of this Agreement, in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Buyer or any branch or agency thereof to or for the credit or the account of Seller; and (ii) Seller hereby authorizes Buyer to withdraw funds from deposits (including but not limited to the accounts required to be established under Section 6(k) of this Agreement) to the extent required that, when added to the Purchase Price, is sufficient to provide the Settlement Agent with the funds necessary to close a Mortgage Loan.

 

(2)           In the event that the Purchase Price is not sufficient to fund a Mortgage Loan in its entirety and Buyer withdraws funds from the accounts established under Section 6(k) of this Agreement pursuant to Section 10 (m)(1)(ii) above and to the extent that the withdrawal causes said account to be below the minimum amount required to be maintained by Seller in such account, Seller shall immediately and in no event less than two (2) Business Days deposit all funds necessary to maintain the minimum balance as required under Section 6(k) of this Agreement.  If Seller deposits sufficient funds as required by the prior sentence, the reduction in the account balance shall not constitute a breach under Section 6(k) of this Agreement.

 

(3)           Buyer agrees promptly to notify Seller after any such set-offs and applications made by Buyer under this Section 10 (m); provided, that the failure to give such notice shall not affect the validity of such set-off and application.

 

40

 

It is understood that Buyer’s right to liquidate the Mortgage Loans delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies is a contractual right to liquidate, accelerate or terminate such Transaction as described in Sections 555 (to the extent that Buyer is a “financial institution” or a “financial participant”) and 559 of Title 11 of the United States Code.

 

(o)           Business Days.  In the event the implementation of any fee or increase in rate occurs on any day that is not a Business Day, the implementation of such fee or increase in rate shall be extended such that it will not apply so long as Seller takes the required action no later than the next succeeding Business Day.  For example, if the 45th day after the Purchase Date occurs on a Saturday, the fee provided in Section 3(l) will not apply - and the Pricing Rate will not increase - if Seller repurchases the relevant Mortgage Loan on the next succeeding Business Day.

 

41

 

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

 

 

	
ATTEST:
    	
 
    	
NEW   CENTURY BANK
    
	
 
    	
 
    	
 
    	
d/b/a   CUSTOMERS BANK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
/s/   Glenn Hedde
    
	
Name:
    	
 
    	
 
    	
Name:
    	
Glenn   Hedde
    
	
Title:
    	
 
    	
 
    	
Title:
    	
President,   Warehouse Lending
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
EXCEL   MORTGAGE SERVICING, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Todd Taylor
    	
 
    	
By:
    	
/s/   William Ashmore
    
	
Name:
    	
Todd   Taylor
    	
 
    	
Name:
    	
William   Ashmore
    
	
Title:
    	
Secretary
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
AMERIHOME   MORTGAGE CORPORATION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Todd Taylor
    	
 
    	
By:
    	
/s/   William Ashmore
    
	
Name:
    	
Todd   Taylor
    	
 
    	
Name:
    	
William   Ashmore
    
	
Title:
    	
Secretary
    	
 
    	
Title:
    	
 
    

 

Signature Page to Master Repurchase Agreement

 

 

EXHIBIT I

 

REQUIRED DOCUMENTS

 

With respect to each Mortgage Loan, the Required Documents shall include each of the following items:

 

(i)            the original Mortgage Note, endorsed either on its face or by allonge attached thereto in blank or in the following form: “Pay to the order of                                                                   . without recourse”;

 

(ii)           originals or copies of any guarantee, security agreement or pledge agreement relating to any Additional Collateral, if applicable, and executed in connection with the Mortgage Note, assigned to Buyer;

 

(iii)          except as provided below, for each Mortgage Loan that is not a MERS Mortgage Loan, the original Mortgage, or a copy thereof certified by the public recording office in which such Mortgage has been recorded, and in the case of each MERS Mortgage Loan, the original Mortgage, noting the presence of the MIN for that Mortgage Loan and, if such Mortgage Loan was not a MERS Mortgage Loan at origination, the original Mortgage and the assignment to MERS, in each case with evidence of recording thereon, and the original recorded power of attorney, if the Mortgage was executed pursuant to a power of attorney, with evidence of recording thereon or if such Mortgage or power of attorney has been submitted for recording but has not been returned from the applicable public recording office, has been lost or is not otherwise available, a certified copy of such Mortgage or power of attorney, as the case may be, or, in the case of a Mortgage that has been lost, a copy thereof (certified as provided for under the laws of the appropriate jurisdiction) and a written opinion of counsel acceptable to Buyer that an original recorded Mortgage is not required to enforce Buyer’s interest in the Mortgage Loan;

 

(iv)          the original or a copy of each assumption, modification or substitution agreement, if any, relating to the Mortgage Loans, or, as to any assumption, modification or substitution agreement which cannot be delivered on or prior to the Purchase Date because of a delay caused by the public recording office where such assumption, modification or substitution agreement has been delivered for recordation, a photocopy of such assumption, modification or substitution agreement, pending delivery of the original thereof, together with an officer’s certificate of Seller acceptable to Buyer certifying that the copy of such assumption, modification or substitution agreement delivered to Buyer (or its custodian) is a true copy and that the original of such agreement has been forwarded to the public recording office;

 

(v)           in the case of each Mortgage Loan that is not a MERS Mortgage Loan, an original Assignment of Mortgage, in form and substance acceptable for recording.  The Mortgage shall be assigned to “                                        , without recourse”;

 

(vi)          in the case of each Mortgage Loan that is not a MERS Mortgage Loan, an original copy of any intervening Assignment of Mortgage showing a complete chain of assignments, or, in the case of an intervening Assignment of Mortgage that

 

 

has been lost, a written opinion of counsel acceptable to Buyer that such original intervening Assignment of Mortgage is not required to enforce Buyer’s interest in the Mortgage Loans; and

 

(vii)         the original or a copy of lender’s title insurance policy or a copy of the title commitment.

 

If pursuant to the above, (1) the Mortgage was not delivered, (2) any intervening assignment was not delivered or (3) the title insurance policy was not delivered, Seller shall cause such documents to be delivered to Buyer immediately upon receipt by Seller.

 

2

 

EXHIBIT II

 

PURCHASE REQUEST

 

	
Company:
    	
 
    	
, 20         
    

 

This is a request for NCB Warehouse Lending to purchase from us the Mortgage Loan described below, pursuant to the Master Repurchase Agreement governing purchases and sales of Mortgage Loans between us, dated as of                         , 20       (the “Agreement”), as follows:

 

	
BORROWER (S):   (FIRST & LAST NAME)
    
	
 
    
	
ADDRESS:
    	
CITY:
    
	
 
    
	
STATE:
    	
ZIP:
    	
COUNTY:
    
	
 
    
	
NOTE RATE:
    	
TERM: (MONTHS)
    	
FICO SCORE:
    	
LTV:
    	
CLTV:
    	
PURPOSE: (CIRCLE LOAN TYPE)
    
	
 
    	
Refinance          Purchase
    
	
 
    
	
 
    
	
NOTE AMOUNT:
    	
ORIGINATOR’S LOAN #:
    	
MORTGAGE DATE:
    
										

 

	
INVESTOR:
    	
 
    	
 
    	
 
    	
COMMITMENT #:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
PRICE:
    	
 
    	
COMMITMENT EXPIRATION DATE:
    	
 
    	
MIN #:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
REQUESTED PURCHASE DATE:
    	
AMT REQUESTED      +   AMT FROM MAINT ACCT      = TOTAL WIRE AMT TO CLSG
    
	
 
    	
 
    
	
 
    	
$                                     $                                                        =$   
    
						

 

In support of the above referenced purchase, I enclose the following documents: (please check)

 

	
1.
    	
o
    	
Originally   executed Assignment of Mortgage/Deed of Trust, in blank, in proper form for   recordation (with legal description). **If a MERS loan and a MERS member, you   do not need an assignment.
    
	
 
    	
 
    	
 
    
	
2.
    	
o
    	
If   a MERS loan, within 3 days, proof of MERS registration showing New Century   Bank listed as the Interim Funder. Our interim funder # is 1008768.
    
	
 
    	
 
    	
 
    
	
3.
    	
o
    	
Executed   Note endorsed in blank (if a refinance) or copy of Note to be executed at   closing (if a purchase), the original of which we have instructed the Closing   Agent to deliver directly to NCB Warehouse Lending upon execution. Include all Riders.
    
	
 
    	
 
    	
 
    
	
4.
    	
o
    	
Copy   of Loan Purchase Commitment from an Approved Investor covering this Loan.
    
	
 
    	
 
    	
 
    
	
5.
    	
o
    	
Copy   of closing protection letter from a title insurance company covering the   Closing Agent.
    
	
 
    	
 
    	
 
    
	
6.
    	
o
    	
Copy   of Schedule A, B-1 and B-2 of the title insurance commitment covering the   Loan.
    
	
 
    	
 
    	
 
    
	
7.
    	
o
    	
Copy   of Form 1003 signed by the borrower.
    
	
 
    	
 
    	
 
    
	
8.
    	
o
    	
Copy   of first two pages of the Appraisal. (Full Appraisal as required in the   Master Repurchase Agreement.)
    
	
 
    	
 
    	
 
    
	
9.
    	
o
    	
Copy   of borrower Credit Report.
    
	
 
    	
 
    	
 
    
	
10.
    	
o
    	
Copy   of Verification of Employment.
    
	
 
    	
 
    	
 
    
	
11.
    	
o
    	
Copy   of Verification of Deposit.
    
	
 
    	
 
    	
 
    
	
12.
    	
o
    	
If   loan is already closed, a certified Executed   true copy of HUD-1, and any additional    exhibits.
    
	
 
    	
 
    	
 
    
	
13.
    	
o
    	
If   loan is already closed, a certified Executed true copy of the Mortgage/Deed of Trust, plus  riders attached thereto.
    
	
 
    	
 
    	
 
    
	
14.
    	
o
    	
Within   30 days, a copy of the FHA or VA Commitment to Insure is required.
    

 

 

 

PURCHASE REQUEST

 

I hereby certify on behalf of Seller that:

 

1.                            The information set forth herein is true, correct, and complete.

 

2.                            This Loan complies in all respects with the requirements of the Agreement and the Loan Purchase Commitment.  [This is not a Section 32 or other state high cost loan].

 

3.                            No underwriting condition imposed by the Take-out Investor as a condition of purchasing this Loan, will remain unsatisfied subsequent to closing.

 

4.                            The Closing Agent has been given written instructions by this company as follows:

 

A.                                   To hold the Advance funds In Trust For our company and to use them only to close the captioned Loan;

 

B.                                     After closing, to immediately deliver to NCB Warehouse Lending the executed Note (including original riders thereto), a copy of the HUD-1 and a certified copy of the executed Mortgage/Deed of Trust (also including riders);

 

C.                                     If the Loan does not close or disburse within one Business Day after the Advance Date, to immediately return the advance by federal wire to:

 

Atlantic Central Bankers Bank

Camp Hill, PA 17011

ABA# 031301752

For Credit to: New Century Bank

Phoenixville, PA 19460

Acct. # 220297

For Further Credit to: NCB Warehouse Lending

Account# 5321535

Reference Borrower’s Last Name

 

Please wire the Purchase funds as follows:

 

	
BANK   NAME:
    	
 
    
	
 
    	
 
    
	
ABA   NUMBER:
    	
CITY   / STATE:
    
	
 
    	
 
    
	
INTERVENING   BANK NAME (If Necessary):
    	
 
    
	
 
    	
 
    
	
ABA   NUMBER:
    	
CITY   / STATE:
    
	
 
    	
 
    
	
BENEFICIARY   / ACCOUNT NAME:
    	
 
    
	
 
    	
 
    
	
ACCOUNT   NUMBER:
    	
PHONE   NUMBER:
    

 

Very truly yours,

 

EXCEL MORTGAGE SERVICING, INC.

 

	
By:
    	
 
    	
 
    	
(Authorized   Signature)
    
	
Title:
    	
 
    	
 
    	
 
    
					

 

If we have any questions regarding this loan, we should contact the following person:

 

	
Contact   Name:
    	
 
    	
 
    	
Phone   Number:
    	
 
    

 

2

 

EXHIBIT III

 

EXISTING INDEBTEDNESS

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