Form 8-K Home Point Capital Inc. For: Jun 30
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E-mailExhibit 10.1
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
AMENDMENT NO. 1 TO
MASTER REPURCHASE AGREEMENT
This Amendment No. 1 (this “Amendment”), dated as of June 30, 2021, amends that certain Master Repurchase Agreement, dated as of August 14, 2020 (as may be further amended, restated, supplemented, or otherwise modified from time to time, the “Repurchase Agreement”), by and among Barclays Bank PLC, as purchaser and agent (“Purchaser”) and Home Point Financial Corporation, as seller (“Seller”). Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Repurchase Agreement.
WHEREAS, the parties hereto desire to amend the Repurchase Agreement as described below.
NOW, THEREFORE, pursuant to the provisions of the Repurchase Agreement concerning modification and amendment thereof, and in consideration of the amendments, agreements and other provisions herein contained and of certain other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged by the parties hereto, it is hereby agreed between Purchaser and Seller as follows:
Section 1. Amendments. Effective as of June 30, 2021, the Repurchase Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto.
Section 2. Fees and Expenses. Seller agrees to pay to Purchaser all fees and out of pocket expenses incurred by Purchaser in connection with this Amendment, including without limitation, the Structuring Fee and all reasonable fees and out of pocket costs and expenses of the legal counsel to Purchaser incurred in connection with this Amendment, in accordance with Section 23(a) of the Repurchase Agreement.
Section 3. Effectiveness of Amendment. The parties hereto agree that this Amendment shall not be effective until the execution and delivery of this Amendment by the parties hereto.
Section 4. Effect of Amendment. Except as expressly amended and modified by this Amendment, all provisions of the Repurchase Agreement shall remain in full force and effect and all such provisions shall apply equally to the terms and conditions set forth herein. After this Amendment becomes effective, all references in the Repurchase Agreement (or in any other document relating to the Mortgage Loans) to “this Agreement,” “hereof,” “herein” or words of similar effect referring to such Repurchase Agreement shall be deemed to be references
to such Repurchase Agreement as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Repurchase Agreement other than as set forth herein.
Section 5. Successors and Assigns. This Amendment shall be binding upon the parties hereto and their respective successors and assigns.
Section 6. Section Headings. The various headings and sub-headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Repurchase Agreement or any provision hereof or thereof.
Section 7. Representations. In order to induce Purchaser to execute and deliver this Amendment, Seller hereby represents to Purchaser that as of the date hereof (i) it is in full compliance with all of the terms and conditions of the Program Documents and remains bound by the terms thereof and (ii) no Default or Event of Default has occurred and is continuing under the Program Documents.
Section 8. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9. Counterparts. This Amendment may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Amendment by signing and delivering one or more counterparts. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. The original documents shall be promptly delivered, if requested. The parties agree that this Amendment, any addendum, exhibit or amendment hereto or any other document necessary for the consummation of the transactions contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with E-Sign, UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service with appropriate document access tracking, electronic signature tracking and document retention as may be reasonably chosen by a signatory hereto, including but not limited to DocuSign.
[Signature Pages to Follow]
IN WITNESS WHEREOF, each undersigned party has caused this Amendment No. 1 to the Repurchase Agreement to be duly executed by one of its officers thereunto duly authorized as of the date and year first above written.
BARCLAYS BANK PLC, as Purchaser and Agent | ||||||||
| By: | /s/ Xiao Huang | |||||||
| Name: | Xiao Huang | |||||||
| Title: | Authorized Signatory | |||||||
HOME POINT FINANCIAL CORPORATION, as Seller | ||||||||
| By: | /s/ Joseph Ruhlin | |||||||
| Name: | Joseph Ruhlin | |||||||
| Title: | Treasurer | |||||||
EXHIBIT A
MASTER REPURCHASE AGREEMENT
Between
BARCLAYS BANK PLC, as Purchaser and Agent
and
HOME POINT FINANCIAL CORPORATION, as Seller
Dated as of August 14, 2020
TABLE OF CONTENTS
1. APPLICABILITY 1
2. DEFINITIONS AND INTERPRETATION 1
3. THE TRANSACTIONS 2023
4. CONFIRMATION 2325
5. TAKEOUT COMMITMENTS 2425
6. PAYMENT AND TRANSFER 2426
7. MARGIN MAINTENANCE 2526
8. TAXES; TAX TREATMENT 2527
9. SECURITY INTEREST; PURCHASER’S APPOINTMENT AS ATTORNEY-IN-FACT 2829
10. CONDITIONS PRECEDENT 2931
11. RELEASE OF PURCHASED ASSETS 3335
12. RELIANCE 3435
13. REPRESENTATIONS AND WARRANTIES 3435
14. COVENANTS OF SELLER 3739
15. REPURCHASE OF PURCHASED ASSETS 4547
16. SERVICING OF THE MORTGAGE LOANS; SERVICER TERMINATION 4647
17. EVENTS OF DEFAULT 4951
18. REMEDIES 5153
19. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE 5455
20. USE OF EMPLOYEE PLAN ASSETS 5455
21. INDEMNITY 5456
22. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS 5557
23. REIMBURSEMENT; SET-OFF 5657
24. FURTHER ASSURANCES 5758
25. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION 5759
26. TERMINATION 5759
27. REHYPOTHECATION; ASSIGNMENT 5759
28. AMENDMENTS, ETC. 5860
29. SEVERABILITY 5960
30. BINDING EFFECT; GOVERNING LAW 5960
31. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS 5960
32. SINGLE AGREEMENT 6061
33. INTENT 6061
34. NOTICES AND OTHER COMMUNICATIONS 6163
35. CONFIDENTIALITY 6364
36. DUE DILIGENCE 6465
37. USA PATRIOT ACT; OFAC AND ANTI-TERRORISM 6466
38. EXECUTION IN COUNTERPARTS 6567
39. CONTRACTUAL RECOGNITION OF BAIL-IN 6667
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40. CONTRACTUAL RECOGNITION OF UK STAY IN RESOLUTION 6668
41. NOTICE REGARDING CLIENT MONEY RULES. 6668
42. REGISTER. 68
43. BENCHMARK REPLACEMENT. 69
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SCHEDULES AND EXHIBITS
EXHIBIT A-1 MONTHLY CERTIFICATION
EXHIBIT A-2 QUARTERLY CERTIFICATION
EXHIBIT B REPRESENTATIONS AND WARRANTIES WITH RESPECT TO MORTGAGE LOANS
EXHIBIT C FORM OF TRANSACTION NOTICE
EXHIBIT D FORM OF GOODBYE LETTER
EXHIBIT E FORM OF WAREHOUSE LENDER’S RELEASE
EXHIBIT F LIST OF DISAPPROVED MEMBERS OF THE MORTGAGE BACKED SECURITIES DIVISION OF THE FIXED INCOME CLEARING CORPORATION
EXHIBIT G FORM OF ESCROW INSTRUCTION LETTER
EXHIBIT H FORM OF SELLER MORTGAGE LOAN SCHEDULE
EXHIBIT I FORM OF PREFUNDING REQUEST
EXHIBIT J FORM OF SELLER FINANCIAL STATEMENTS (ANNUAL)
EXHIBIT K FORM OF SELLER FINANCIAL STATEMENTS (PERIODIC)
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MASTER REPURCHASE AGREEMENT
Dated as of August 14, 2020
BETWEEN:
BARCLAYS BANK PLC, in its capacity as purchaser (together with its permitted successors and assigns in such capacity hereunder, “Barclays” or a “Purchaser”) and agent pursuant hereto (together with its permitted successors and assigns in such capacity hereunder, “Agent”),
and
HOME POINT FINANCIAL CORPORATION, in its capacity as a seller (together with its permitted successors and assigns in such capacity hereunder, “Seller”).
1. APPLICABILITY
Purchaser from time to time shall (with respect to the Committed Amount) and may (with respect to the Uncommitted Amount) upon the terms and conditions set forth herein, in which Seller sells to Purchaser Eligible Mortgage Loans, on a servicing-released basis, and, if applicable, Takeout MBS, against the transfer of funds by Purchaser, with a simultaneous agreement by Purchaser to transfer to Seller such Purchased Assets on a date certain not later than one year following such transfer, against the transfer of funds by Seller; provided, that the Aggregate MRA Purchase Price shall not exceed, as of any date of determination, the lesser of (a) the Maximum Aggregate Purchase Price and (b) the Asset Base. Each such transaction shall be referred to herein as a “Transaction,” and shall be governed by this Agreement. This Agreement sets forth the procedures to be used in connection with periodic requests for Purchaser to enter into Transactions with Seller. Seller hereby acknowledges that Purchaser is under no obligation to enter into, any Transaction pursuant to this Agreement with respect to the Uncommitted Amount. Seller acknowledges that during the term of this Agreement, Agent may undertake to join any of Sheffield Receivables Corporation, Barclays Bank Delaware, any other asset-backed commercial paper conduit administered by Agent or any Affiliate of the Agent as additional purchasers under this Agreement, and Seller hereby consents to the joinder of such additional purchasers.
2. DEFINITIONS AND INTERPRETATION
(a) Defined Terms.
“30+ Day Delinquent Mortgage Loan” means any Mortgage Loan that, as of any determination date, using the MBA Methodology, is thirty (30) or more days delinquent (inclusive of any grace period).
“Accepted Servicing Practices” means with respect to any Mortgage Loan, those accepted, customary and prudent mortgage servicing practices (including collection procedures) of prudent mortgage banking institutions that service mortgage loans of the same type as the Mortgage Loans in the jurisdiction where the related Mortgaged Property is located, and which
are in accordance with the requirements of each Agency Program, applicable law, FHA regulations and VA regulations, if applicable, and the requirements of any private mortgage insurer so that the FHA insurance, VA guarantee or any other applicable insurance or guarantee in respect of any Mortgage Loan is not voided or reduced.
“Accrual Period” means, with respect to each Monthly Payment Date for any Transaction, the immediately prior calendar month beginning with the first calendar day of such month to and including the last calendar day of such month; provided that with respect to the first Monthly Payment Date of a Transaction following the related Purchase Date, the Accrual Period shall commence on the related Purchase Date and provided further that the last Accrual Period shall end on the day prior to the Termination Date.
“Additional Eligible Loan Criteria” has the meaning assigned thereto in the Pricing Side Letter.
“Additional Purchased Mortgage Loans” has the meaning assigned thereto in Section 7(b) hereof.
“Adjustable Rate Mortgage Loan” means a Mortgage Loan that provides for the adjustment of the Mortgage Interest Rate payable in respect thereto.
“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person; provided that other than the Seller and its Subsidiaries, no other portfolio company of Stone Point Capital LLC or its affiliates shall be deemed an Affiliate of Seller. For the purposes of this definition, “control” means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling,” “controlled by” and “under common control with” have meanings correlative to the meaning of “control.”
“Agency” means Freddie Mac, Fannie Mae or Ginnie Mae, as applicable.
“Agency Guide” means the Freddie Mac Guide, the Fannie Mae Guide, or the Ginnie Mae Guide, as applicable.
“Agency Mortgage Loans” means Fannie Mae Mortgage Loans, Freddie Mac Mortgage Loans, and Ginnie Mae Mortgage Loans.
“Agency Program” means the Freddie Mac Program, the Fannie Mae Program or the Ginnie Mae Program, as applicable.
“Agency Renovation Mortgage Loan” means any Agency Mortgage Loan that is an FHA 203k Mortgage Loan, a Fannie Mae HomeStyle Loan, or any other Agency Mortgage Loan originated in accordance with an Agency program for construction, renovation or rehabilitation of the related Mortgaged Property.
“Agent” has the meaning set forth in the preamble.
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“Aggregate MRA Purchase Price” means as of any date of determination, an amount equal to the aggregate Purchase Price for all Purchased Assets, then subject to Transactions under this Agreement.
“Agreement” means this Master Repurchase Agreement (including all exhibits, schedules and other addenda thereto), as it may be amended, further supplemented or otherwise modified from time to time.
“ALTA” means the American Land Title Association.
“Applicable Agency” means Ginnie Mae, Fannie Mae or Freddie Mac, as applicable.
“Applicable Margin” has the meaning assigned thereto in the Pricing Side Letter.
“Approvals” means with respect to Seller, the approvals obtained from the Applicable Agency or HUD in designation of Seller as a Ginnie Mae-approved issuer, an FHA-approved mortgagee, a VA-approved lender, a Fannie Mae-approved lender or a Freddie Mac-approved Seller/Servicer, as applicable, in good standing.
“Asset Base” has the meaning assigned thereto in the Pricing Side Letter.
“Assignment and Acceptance” has the meaning assigned thereto in Section 27(b) hereof.
“Assignment of Mortgage” means, with respect to any Mortgage, an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment of the Mortgage to Purchaser.
“ATR Rules”: The “ability to repay” rules specified in the federal Truth-in-Lending Act as amended pursuant to rulemaking authority provided under the federal Dodd-Frank Act which require lenders to make a reasonable, good-faith determination that a Mortgagor has an ability to repay the loan as determined by the following eight (8) underwriting factors, or as otherwise required pursuant to such rules: (i) current or reasonably expected income or assets (other than the value of the property that secures the loan) that the Mortgagor will rely on to repay the loan, (ii) current employment status (if the originator relies on employment income when assessing the Mortgagor’s ability to repay), (iii) monthly mortgage payment for the loan, (iv) monthly payment on any simultaneous loans secured by the same property, (v) monthly payments for property taxes and required insurance, and certain other costs related to the property such as homeowners association fees or ground rent, (vi) debts, alimony, and child-support obligations, (vii) monthly debt-to-income ratio or residual income, calculated using the total of all of the mortgage and nonmortgage obligations listed above, as a ratio of gross monthly income and (viii) credit history.
“Attorney Bailee Letter” has the meaning assigned thereto in the Custodial and Disbursement Agreement.
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“Bail-In Action” means the exercise by the Bank of England (or any successor resolution authority) of any write-down or conversion power existing from time to time (including, without limitation, any power to amend or alter the maturity of eligible liabilities of an institution under resolution or amend the amount of interest payable under such eligible liabilities or the date on which interest becomes payable, including by suspending payment for a temporary period and together with any power to terminate and value transactions) under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the United Kingdom relating to the transposition of the European Banking Recovery and Resolution Directive as amended from time to time, including but not limited to, the Banking Act 2009 as amended from time to time, and the instruments, rules and standards created thereunder, pursuant to which Purchaser’s obligations (or those of Purchaser’s affiliates) can be reduced (including to zero), canceled or converted into shares, other securities, or other obligations of Purchaser or any other person.
“Bank” means (i) Merchants Bank of Indiana and its successors and permitted assigns, or (ii) such other bank as may be mutually acceptable to the Seller and the Purchaser.
“Bankruptcy Code” means 11 U.S.C. §§ 101 et seq., as amended from time to time.
“Benchmark” means, initially LIBOR; provided that if a replacement has occurred pursuant to Section 43, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced the prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.
“Benchmark Replacement” means:
(1) For purposes of Section 43(b), the first alternative set forth below that can be determined by the Agent:
(a) the sum of: (i) Term SOFR and (ii) [***] for a tenor of one-month’s duration, or
(b) the sum of: (i) Daily Compounded SOFR and (ii) the spread adjustment selected or recommended by the Relevant Governmental Body for the replacement of LIBOR with a SOFR-based rate having approximately the same length as the Accrual Period; and
(2) For purposes of Section 43(c), the sum of (a) the alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by Agent and Purchaser as the replacement for the relevant tenor of such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for U.S. dollar-denominated syndicated or bilateral credit facilities at such time;
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provided that, if the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the LIBOR Floor, the Benchmark Replacement will be deemed to be the LIBOR Floor for the purposes of this Agreement and the other Program Documents.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Accrual Period,” timing and frequency of determining rates and making payments of interest, timing of seller requests or repurchase, the applicability and length of lookback periods and other technical, administrative or operational matters) that the Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement).
“Benchmark Transition Event” means, with respect to any then-current Benchmark other than LIBOR, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide all applicable tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any applicable tenor of such Benchmark or (b) all applicable tenors of such Benchmark are or will no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.
“Breakage Costs” has the meaning assigned thereto in Section 3(i) hereof.
“Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day upon which the New York Stock Exchange or the Federal Reserve Bank of New York is closed or banking and savings and loan institutions in the States of New York, Minnesota, Texas, Michigan or California or the City of New York are closed, (iii) a day on which trading in securities on the New York Stock Exchange or any other major securities exchange in the United States is not conducted or (iv) with respect to any day on which the parties hereto have obligations to Custodian or on which Custodian has obligations to any party hereto, a day upon which Custodian’s offices are closed.
“Cash Equivalents” has the meaning assigned thereto in the Pricing Side Letter.
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“Certification” has the meaning assigned thereto in the Custodial and Disbursement Agreement.
“Change in Control” means, with respect to Seller, Home Point Capital Inc. ceasing to own directly or indirectly more than 50% of the Equity Interests in and to Seller. For purposes of this definition, “Equity Interests” means, with respect to the Seller, all shares, interests, participations or other equivalents in the equity of the Seller, including common stock, preferred stock, warrants, membership interests, partnership interests, limited partnership interests, convertible debentures, other debt securities which include voting rights in the Seller referred to, and any and all agreements, instruments and documents convertible, in whole or in part, into any one or more of the foregoing.
“Change in Law” means (a) the adoption of any Requirement of Law, rule or regulation after the date of this Agreement, (b) any change in any Requirement of Law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by Purchaser (or any Affiliate thereof) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.
“Closing Protection Letter” means, with respect to any Wet-Ink Mortgage Loan that becomes subject to a Transaction (other than any such Mortgage Loan originated in the State of New York), letter of indemnification from the Settlement Agent, in any jurisdiction where insured closing letters are permitted under applicable law and regulation, addressed to Seller, which is fully assignable to Purchaser, in which the Settlement Agent identified thereon agrees to indemnify the Seller for actual losses caused by certain kinds of misconduct by the Settlement Agent that is customarily acceptable to Persons engaged in the origination of mortgage loans, which may be in the form of a blanket letter.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collection Account” means the following account established by the Seller in accordance with Section 16(e) for the benefit of Purchaser, Account Number: [***].
“Collection Account Control Agreement” means that certain Collection Account Control Agreement, dated as of August 14, 2020, by and among Purchaser, Seller and Bank, in form and substance acceptable to Purchaser to be entered into with respect to the Collection Account, as the same may be amended, modified or supplemented from time to time.
“Committed Amount” has the meaning assigned thereto in the Pricing Side Letter.
“Confirmation” has the meaning assigned thereto in Section 4 hereof.
“Contract” means an agreement between an Originator and any Obligor, pursuant to or under which such Obligor shall be obligated to pay for merchandise, insurance or services from time to time.
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“Correspondent Loan” means a Mortgage Loan that is (i) originated by a Correspondent Seller and underwritten in accordance with Seller’s underwriting guidelines and (ii) acquired by Seller from a Correspondent Seller in the ordinary course of business.
“Correspondent Seller” means a mortgage loan originator that sells Mortgage Loans originated by it to Seller as a “correspondent” or “private label” client.
“Custodial and Disbursement Agreement” means that certain Custodial and Disbursement Agreement, dated as of August 14, 2020, among Seller, Purchaser, Disbursement Agent and Custodian, entered into in connection with this Agreement, as the same may be amended, modified or supplemented from time to time.
“Custodian” means U.S. Bank National Association, and its successors and permitted assigns, or such other entity as mutually agreed upon by Agent and Seller.
“Daily Compounded SOFR” means, for any day, SOFR, with interest accruing on a compounded daily basis, with the methodology and conventions for this rate (which will include compounding in arrears with a lookback) being established by the Agent in accordance with a methodology and the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Compounded SOFR” for syndicated or bilateral business loans; provided that, if the Agent decides that any such convention is not administratively feasible for the Agent, then the Agent may establish another convention in its reasonable discretion.
“Default” means any event that, with the giving of notice or the passage of time or both, would constitute an Event of Default.
“Default Rate” has the meaning assigned thereto in the Pricing Side Letter.
“Disbursement Account” means that certain deposit account established pursuant to the Custodial and Disbursement Agreement and subject to the Disbursement Account Control Agreement.
“Disbursement Account Control Agreement” shall mean a blocked account control agreement entered into among Purchaser, the Disbursement Agent and Seller with respect to the Disbursement Account.
“Disbursement Agent” means U.S. Bank National Association and its successors and permitted assigns, or such other entity as mutually agreed upon by Agent and Seller.
“Dollars” or “$” means, unless otherwise expressly stated, lawful money of the United States of America.
“Due Date” means the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
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“Early Opt-in Effective Date” means, with respect to any Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to Purchaser and Seller, so long as the Agent has not received, by [***] (New York City time) on the [***] after the date notice of such Early Opt-in Election is provided to Purchaser and Seller, written notice of objection to such Early Opt-in Election from Purchaser.
“Early Opt-in Election” means the occurrence of:
(1) (a) a determination by the Agent or (b) a notification by Purchaser to the Agent (with a copy to the Seller) that Purchaser has determined that U.S. dollar-denominated syndicated or bilateral credit facilities being executed at such time, contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based on SOFR) as a benchmark rate, and
(2) (a) the election by Agent or (b) the election by Purchaser to declare that an Early Opt-in Election has occurred and the provision, as applicable, by Agent of written notice of such election to the Seller and Purchaser or by Purchaser of written notice of such election to Agent.
“Economic and Trade Sanctions and Anti-Terrorism Laws” means any U.S. laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering, or bribery, all as amended, supplemented or replaced from time to time.
“Effective Date” means August 14, 2020.
“Electronic Tracking Agreement” means the electronic tracking agreement in form and substance acceptable to Purchaser and Seller, dated as of August 14, 2020, among Purchaser, Seller, MERSCORP Holdings, Inc. and MERS, entered into in connection with this Agreement, as the same may be amended, modified or supplemented from time to time.
“Electronic Transmission” means the delivery of information in an electronic format reasonably acceptable to the applicable recipient thereof. An Electronic Transmission shall be considered written notice for all purposes hereof (except when a request or notice by its terms requires execution).
“Eligible Mortgage Loan” means a Mortgage Loan that (i) satisfies each of the representations and warranties in Exhibit B to this Agreement in all material respects, (ii) if such Mortgage Loan is (a) a Fannie Mae Mortgage Loan, a Freddie Mac Mortgage Loan, or a Ginnie Mae Mortgage Loan, it is in Strict Compliance with the eligibility requirements of the Ginnie Mae Program, Fannie Mae Program or Freddie Mac Program, as applicable, (b) a Jumbo Mortgage Loan, it was underwritten and originated in accordance with Seller’s underwriting guidelines, (iii) with respect to all Mortgage Loans other than Wet-Ink Mortgage Loans, contains all required documents in the Mortgage File without exceptions unless otherwise waived by Purchaser or permitted pursuant to the terms of this Agreement or the Custodial and Disbursement Agreement, and (iv) satisfies the Additional Eligible Loan Criteria.
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“ERISA” means, with respect to any Person, the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and rulings issued thereunder.
“Escrow Instruction Letter” means the Escrow Instruction Letter from Seller to the Settlement Agent, in the form provided by Seller, which shall include the instructions to the Settlement Agent substantially in the form of Exhibit G hereto, as the same may be modified, supplemented and in effect from time to time.
“Escrow Payments” means, with respect to a Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water charges, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges and other payments as may be required to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of the Mortgage or any other document.
“Event of Default” has the meaning assigned thereto in Section 17 hereof.
“Event of Insolvency” means, with respect to any Person,
(i) the filing of a voluntary petition (or the consent by such Person to the filing of any such petition against it), commencing, or authorizing the commencement of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or suffering any such petition or proceeding to be commenced by another; or such Person shall consent or seek to the appointment of or taking possession by a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar official of such Person, or for any substantial part of its Property, or any general assignment for the benefit of creditors;
(ii) a proceeding shall have been instituted against such Person under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, moratorium, delinquency or liquidation law of any jurisdiction, whether now or subsequently in effect, or a custodian, receiver, conservator, liquidator, trustee, sequestrator or similar official for such Person or such Person’s Property (as a debtor or creditor protection procedure) is appointed by any Governmental Authority having the jurisdiction to do so or takes possession of such Property and any such proceeding is not dismissed within [***] of filing;
(iii) that such Person or any Affiliate shall become insolvent;
(iv) that such Person shall (a) admit in writing its inability to pay or discharge its debts or obligations generally as they become due or mature, (b) admit in writing its inability to, or intention not to, perform any of its material obligations, or (c) generally fail to pay any of its debts or obligations as they become due or mature; or
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(v) any Governmental Authority shall have seized or appropriated, or assumed custody or control of, all or any substantial part of the Property of such Person, or shall have taken any action to displace the management of such Person.
“Fannie Mae” means the Federal National Mortgage Association or any successor thereto.
“Fannie Mae Guide” means the Fannie Mae MBS Selling and Servicing Guide, as such Guide may hereafter from time to time be amended.
“Fannie Mae HomeStyle Loan” means a Mortgage Loan that fully conforms to Fannie Mae’s HomeStyle Renovation mortgage loan program and is referred to as a “HomeStyle® Renovation Mortgage” by Fannie Mae.
“Fannie Mae Mortgage Loan” means a mortgage loan that is in Strict Compliance on the related Purchase Date with the eligibility requirements specified for the applicable Fannie Mae Program described in the Fannie Mae Guide.
“Fannie Mae Program” means the Fannie Mae Guaranteed Mortgage-Backed Securities Programs, as described in the Fannie Mae Guide.
“Fannie Mae Security” means an ownership interest in a pool of Fannie Mae Mortgage Loans, evidenced by a book-entry account in a depository institution having book-entry accounts at the Federal Reserve Bank of New York, issued and guaranteed, with respect to timely payment of interest and ultimate payment of principal, by Fannie Mae and backed by a pool of Fannie Mae Mortgage Loans, in substantially the principal amount and with substantially the other terms as specified with respect to such Fannie Mae Security in the related Takeout Commitment, if any.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“FHA” means the Federal Housing Administration, an agency within HUD, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA regulations.
“FHA 203k Mortgage Loan” means a Mortgage Loan that is eligible for FHA’s 203(k) loan program.
“FHA Buyout Loan” means an Eligible Mortgage Loan that (a) is insured by FHA, (b) is a Ginnie Mae Mortgage Loan, (c) has been purchased out of a Ginnie Mae Security, and (d) is not a Modified Loan.
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“FICO Score” means the credit score of the Mortgagor provided by Fair, Isaac & Company, Inc. or such other organization providing credit scores on or immediately prior to the Origination Date of a Mortgage Loan.
“Foreign Purchaser” has the meaning assigned thereto in Section 8(d).
“Freddie Mac” means the Federal Home Loan Mortgage Corporation, and its successors in interest.
“Freddie Mac Guide” means the Freddie Mac Sellers’ and Servicers’ Guide, as such Guide may hereafter from time to time be amended.
“Freddie Mac Mortgage Loan” means a mortgage loan that is in Strict Compliance on the related Purchase Date with the eligibility requirements specified for the applicable Freddie Mac Program described in the Freddie Mac Guide.
“Freddie Mac Program” means the Freddie Mac Home Mortgage Guarantor Program or the Freddie Mac FHA/VA Home Mortgage Guarantor Program, as described in the Freddie Mac Guide.
“Freddie Mac Security” means a modified pass-through mortgage-backed participation certificate, evidenced by a book-entry account in a depository institution having book-entry accounts at the Federal Reserve Bank of New York, issued and guaranteed, with respect to timely payment of interest and ultimate payment of principal, by Freddie Mac and backed by a pool of Freddie Mac Mortgage Loans in substantially the principal amount and with substantially the other terms as specified with respect to such Freddie Mac Security in the related Takeout Commitment, if any.
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.
“Ginnie Mae” means the Government National Mortgage Association and its successors in interest, a wholly-owned corporate instrumentality of the government of the United States of America.
“Ginnie Mae Guide” means the Ginnie Mae Mortgage-Backed Securities Guide, as such Guide may hereafter from time to time be amended.
“Ginnie Mae Mortgage Loan” means a mortgage loan that is in Strict Compliance on the related Purchase Date with the eligibility requirements specified for the applicable Ginnie Mae Program in the applicable Ginnie Mae Guide.
“Ginnie Mae Program” means the Ginnie Mae Mortgage-Backed Securities Programs, as described in the Ginnie Mae Guide.
“Ginnie Mae Security” means a fully-modified pass-through mortgage-backed certificate guaranteed by Ginnie Mae, evidenced by a book-entry account in a depository institution having
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book-entry accounts at the Federal Reserve Bank of New York and backed by a pool of Ginnie Mae Mortgage Loans, in substantially the principal amount and with substantially the other terms as specified with respect to such Ginnie Mae Security in the related Takeout Commitment.
“Governmental Authority” means any nation or government, any state or other political subdivision, agency or instrumentality thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over Seller any of its Subsidiaries or any of their Property.
“Hedge Instrument” means any interest rate cap agreement, interest rate floor agreement, interest rate swap agreement or other interest rate hedging agreement entered into by Seller with a counterparty reasonably acceptable to Agent, in each case with respect to the Mortgage Loans.
“High Cost Mortgage Loan” means a Mortgage Loan that is (a) subject to, covered by or in violation of the provisions of the Homeownership and Equity Protection Act of 1994, as amended, (b) a “high cost,” “covered,” “threshold,” “abusive,” “predatory” or “high risk” mortgage loan under any federal, state or local law, or any similarly classified loan using different terminology under any law imposing heightened regulation, scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees, or any other state or other regulation providing assignee liability to holders of such mortgage loans, (c) subject to or in violation of any such or comparable federal, state or local statutes or regulations, or (d) a “High Cost Loan” or “Covered Loan,” as applicable, as such terms are defined in the current version of the Standard & Poor’s LEVELS® Glossary Revised, Appendix E.
“High LTV Mortgage Loan” means a (a) first-lien Mortgage Loan for which the loan-to-value ratio is greater than (i) [***] for a government insured first-lien Mortgage Loan; or (ii) [***] for a first-lien Mortgage Loan that is not government insured; or (b) second-lien Mortgage Loan with a combined loan-to-value ratio of greater than [***].
“HUD” means the Department of Housing and Urban Development, or any federal agency or official thereof which may from time to time succeed to the functions thereof with regard to FHA mortgage insurance. The term “HUD,” for purposes of this Agreement, is also deemed to include subdivisions thereof such as the FHA and Ginnie Mae.
“IBA” means the ICE Benchmark Administration.
“Income” means, with respect to any Purchased Asset at any time, any principal and/or interest thereon and all dividends, sale proceeds and all other proceeds as defined in Section 9-102(a)(64) of the Uniform Commercial Code and all other collections and distributions thereon (including, without limitation, any proceeds received in respect of mortgage insurance) but excluding any Escrow Payments and any and all fees, reimbursements and income entitled to be retained by a Servicer pursuant to the related Servicing Agreement.
“Indebtedness” has the meaning assigned thereto in the Pricing Side Letter.
“Indemnified Party” has the meaning assigned thereto in Section 21(a).
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“Intercreditor Agreement” means that certain Amended and Restated Intercreditor Agreement, dated as of February 27, 2015, by and among Seller, Purchaser and the other parties thereto, as same may be amended from time to time.
“Investment Company Act” means the Investment Company Act of 1940, as amended, including all rules and regulations promulgated thereunder.
“Joint Securities Account Control Agreement” means that certain Amended and Restated Joint Securities Account Control Agreement, dated as of February 27, 2015, by and among Seller, Purchaser and the other parties thereto, as same may be amended from time to time.
“Jumbo Mortgage Loan” means a first lien Mortgage Loan which (i) conforms with all requirements of Seller’s underwriting guidelines, which are subject to Purchaser’s approval in its sole discretion, as the same may be amended, supplemented or otherwise modified from time to time and (ii) has the benefit of the safe harbor from liability under the ATR Rules or a rebuttable presumption for such liability.
“LIBOR” means for each day, the rate (adjusted for statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits for a period equal to one month appearing on Bloomberg Screen US 0001M Page or if such rate ceases to appear on Bloomberg Screen US 0001M Page, or any other service providing comparable rate quotations atas selected by Purchaser or Agent on behalf of Purchaser in good faith from time to time for purposes of providing quotations of interest rates applicable to U.S. dollar deposits in the London interbank market for deposits in Dollars with a term equivalent to such Accrual Period, determined as of approximately 11:00 a.m., (London time, on the applicable date of determination, or such interpolated rate as determined by the Agent) two (2) Business Days prior to the first day of such Accrual Period.
“LIBOR Floor” has the meaning assigned thereto in the Pricing Side Letter.
“Lien” means any mortgage, deed of trust, lien, claim, pledge, charge, security interest or similar encumbrance.
“Margin Call” has the meaning assigned thereto in Section 7(b) hereof.
“Margin Deficit” has the meaning assigned thereto in Section 7(b) hereof.
“Market Value” means, with respect to any Transaction and as of any date of determination, (i) the value ascribed to a Purchased Asset or a Mortgage Loan by Agent in its sole discretion, and (ii) zero, with respect to any Mortgage Loan that is a Purchased Asset but is not an Eligible Mortgage Loan.
“Master Netting Agreement” means that certain Global Netting and Security Agreement, dated as of August 14, 2020, among Purchaser, Seller, and certain Affiliates and Subsidiaries of Purchaser, entered into in connection with this Agreement, as the same shall be amended, supplemented or otherwise modified from time to time.
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“Material Adverse Change” means, with respect to a Person, any material adverse change in the business, financial condition, operations, performance or Property of such Person including the insolvency of such Person or its Parent Company, if applicable.
“Material Adverse Effect” means (a) a Material Adverse Change with respect to Seller or any of its Affiliates; (b) a material impairment of the ability of Seller or any of its Affiliates that is a party to any Program Document to perform under any Program Document to which it is a party; (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Document against Seller or any of their respective Affiliates that is a party to any Program Document; (d) a material adverse effect on the Market Value of the Purchased Assets taken as a whole; or (e) a material adverse effect on the Approvals of Seller.
“Maturity Date” has the meaning assigned thereto in the Pricing Side Letter.
“Maximum Age Since Origination” has the meaning assigned thereto in the Pricing Side Letter.
“Maximum Aggregate Purchase Price” has the meaning assigned thereto in the Pricing Side Letter.
“MBA Methodology” means a method of calculating delinquency of a Mortgage Loan based upon the Mortgage Banker Association method, under which method a Mortgage Loan is considered delinquent if the Monthly Payment related to such Mortgage Loan has not been received by the end of the day immediately preceding the loan’s next Due Date.
“MERS” means Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.
“MERS Designated 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 Mortgage Note.
“MIN” means the mortgage identification number of Mortgage Loans registered with MERS on the MERS system.
“Modified Loan” means an Eligible Mortgage Loan that (a) is insured by FHA or guaranteed by the VA, (b) (1) was purchased out of a Ginnie Mae Security or from a third-party whole loan investor solely as a result of modifications to such Eligible Mortgage Loan, or (2) was purchased out of a Ginnie Mae Security or from a third-party whole loan investor as a result of delinquent mortgage payments, but, without any loan modifications, subsequently became reperforming and (c) is a Ginnie Mae Mortgage Loan.
“Monthly Payment” means the scheduled monthly payment of principal and interest on a Mortgage Loan as adjusted in accordance with changes in the Mortgage Interest Rate pursuant to the provisions of the Mortgage Note for an Adjustable Rate Mortgage Loan.
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“Monthly Payment Date” means the tenth (10th) day of each calendar month beginning with September 2020; provided that if such day is not a Business Day, the next succeeding Business Day.
“Mortgage” means a mortgage, deed of trust, or other security instrument, securing a Mortgage Note.
“Mortgage File” has the meaning assigned thereto in the Custodial and Disbursement Agreement.
“Mortgage Interest Rate” means, with respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note.
“Mortgage Loan” means a Ginnie Mae Mortgage Loan, a Fannie Mae Mortgage Loan, a Freddie Mac Mortgage Loan, a Jumbo Mortgage Loan, an FHA Buyout Loan, a Modified Loan, or a Wet-Ink Mortgage Loan.
“Mortgage Note” means a promissory note or other evidence of indebtedness of the obligor thereunder, evidencing a Mortgage Loan, and secured by the related Mortgage.
“Mortgaged Property” means the real property (or leasehold estate, if applicable) securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagee” means the record holder of a Mortgage Note secured by a Mortgage.
“Mortgagor” means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.
“Negative Amortization” means the portion of interest accrued at the Mortgage Interest Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan for such month and which, pursuant to the terms of the Mortgage Note, is added to the principal balance of such Mortgage Loan.
“Notice Date” has the meaning assigned thereto in Section 3(c) hereof.
“Non-Utilization Fee” has the meaning assigned thereto in the Pricing Side Letter.
“Obligations” means (a) all amounts due and payable by Seller to Purchaser in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and other obligations and liabilities of Seller to Purchaser arising under, or in connection with, the Program Documents or directly related to the Purchased Assets, whether now existing or hereafter arising; (b) any and all sums paid by Purchaser or on behalf of Purchaser pursuant to the Program Documents in order to preserve any Purchased Asset or its interest therein; (c) in the event of any proceeding for the collection or enforcement of any of Seller’s indebtedness, obligations or liabilities referred to in clause (a), the reasonable expenses
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of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Asset, or of any exercise by Purchaser of its rights under the Program Documents, including without limitation, reasonable attorneys’ fees and disbursements and court costs; and (d) all of Seller’s indemnity obligations to Purchaser pursuant to the Program Documents.
“Obligor” means a Person obligated to make payments pursuant to a Contract; provided that in the event that any payments in respect of a Contract are made by any other Person, such other Person shall also be deemed to be an Obligor.
“OFAC” means the Office of Foreign Assets Control of the United States Department of Treasury.
“OFAC Lists” has the meaning ascribed to it in Section 37(a).
“Origination Date” has the meaning ascribed to it in the Pricing Side Letter.
“Originator” means Seller or any other third party originator as mutually agreed upon by Agent and Seller.
“Other Agreement” means any (i) warehouse, credit, repurchase, line of credit, financing or hedging agreements or other similar agreement relating to any Indebtedness in an amount greater than [***] between Seller or any of its Affiliates or Subsidiaries, on the one hand, and any Person, on the other hand, (ii) other agreement relating to any Indebtedness in an amount greater than [***] between Seller or any of its Affiliates or Subsidiaries, on the one hand, and any Person, on the other hand, or (iii) other agreement (including, without limitation, the Program Documents) in any amount entered into between Seller or any of its Affiliates or any of its Subsidiaries and Purchaser or any of its Affiliates.
“Other Taxes” has the meaning assigned thereto in Section 8(b).
“Parent Company” means a corporation or other entity owning at least 50% of the outstanding shares of voting stock of Seller.
“Person” means any legal person, including any individual, corporation, partnership, association, joint stock company, trust, limited liability company, unincorporated organization, governmental entity or other entity of similar nature.
“Prefunding Request” means a written request, which request may be sent via Electronic Transmission, of Seller that Purchaser prefund Transactions expected to occur on the following Business Day, which request shall be substantially in the form of Exhibit I hereto or such other form as shall be mutually agreed upon between Seller and Purchaser, which shall be delivered to the Purchaser in accordance with Section 3(c) herein.
“Price Differential” means, with respect to any Purchased Mortgage Loan or Transaction as of any date of determination, an amount equal to the product of (A) the Pricing Rate (or during the occurrence and continuation of an Event of Default, by daily application of the Default Rate)
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and (B) the unpaid Purchase Price for such Purchased Mortgage Loan or Transaction. Price Differential will be calculated in accordance with Section 3(f) herein for the actual number of days elapsed during such Accrual Period on a 360-day basis.
“Price Differential Determination Date” means, with respect to any Monthly Payment Date, the second (2nd) Business Day preceding such date.
“Pricing Rate” means, as of any date of determination and with respect to an Accrual Period for any Purchased Mortgage Loan or Transaction, an amount equal to the sum of (i) (A) the greater of LIBOR and the LIBOR Floor, or (b) the Benchmark Replacement pursuant to Section 43 hereof, plus (ii) the Applicable Margin.
“Pricing Side Letter” means that certain Pricing Side Letter, dated as of August 14, 2020, between Seller and Purchaser, entered into in connection with this Agreement, as the same may be amended, modified or supplemented from time to time.
“Principal Balance” means the unpaid principal balance of a Mortgage Loan.
“Program Documents” means this Agreement, the Pricing Side Letter, the Custodial and Disbursement Agreement, the Servicer Side Letter, the Collection Account Control Agreement, Disbursement Account Control Agreement, any assignment of Hedge Instrument, the Electronic Tracking Agreement, the Master Netting Agreement, the Intercreditor Agreement, the Joint Securities Account Control Agreement and all other agreements, documents and instruments entered into by Seller on the one hand, and Purchaser or one of its Affiliates (or Custodian on its behalf) and/or Agent or one of its Affiliates on the other, in connection herewith or therewith with respect to the Transactions contemplated hereunder or thereunder and all amendments, restatements, modifications or supplements thereto.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Purchase Date” means, with respect to each Transaction, the date on which Purchased Assets, are sold by Seller to the Purchaser or its designee hereunder; provided, that a Purchase Date for any FHA Buyout Loan or Modified Loan may occur no more than four (4) times within a calendar month and, without the prior written consent of Agent, shall not occur within the final four (4) Business Days of such calendar month.
“Purchase Price” has the meaning assigned thereto in the Pricing Side Letter.
“Purchase Price Percentage” has the meaning assigned thereto in the Pricing Side Letter.
“Purchased Assets” means with respect to each Purchased Mortgage Loan, whether now existing or hereafter acquired: (i) the Mortgage Loans, (ii) the related Servicing Rights, (iii) Seller’s rights under any related Hedge Instruments to the extent related to the Mortgage Loans, if assignable, (iv) such other property, rights, titles or interest as are specified on the related Transaction Notice, (v) all mortgage guarantees and insurance relating to such individual
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Mortgage Loans (issued by governmental agencies or otherwise) or the related Mortgaged Property and any mortgage insurance certificate or other document evidencing such mortgage guarantees or insurance and all claims and payments related to such Mortgage Loans, (vi) all guarantees or other support for such Mortgage Loans, (vii) all rights to Income and the rights to enforce such payments arising from such Mortgage Loans and any other contract rights, payments, rights to payment (including payments of interest or finance charges) with respect thereto, (viii) all Takeout MBS, Takeout Commitments, and Trade Assignments (including the rights to receive the related purchase price related therefor) related to the Purchased Mortgage Loans, if assignable, (ix) the Collection Account and the Disbursement Account and all amounts on deposit in the Collection Account and the Disbursement Account, (x) all Additional Purchased Mortgage Loans, (xi) to the extent related to the Purchased Mortgage Loans, all “accounts,” “deposit accounts,” “securities accounts,” “chattel paper,” “commercial tort claims,” “deposit accounts,” “documents,” “general intangibles,” “instruments,” “investment property,” and “securities accounts,” relating to the foregoing as each of those terms is defined in the Uniform Commercial Code and all cash and Cash Equivalents and all products and proceeds relating to or constituting any or all of the foregoing, (xii) any other collateral pledged or otherwise relating to any or all of the foregoing, together with all files, material documents, instruments, surveys (if available), certificates, correspondence, appraisals, computer records, computer storage media, accounting records and other books and records relating to the foregoing, and (xiii) any and all replacements, substitutions, distributions on, or proceeds with respect to, any of the foregoing. The term “Purchased Assets” with respect to any Transaction at any time also shall include Additional Purchased Mortgage Loans delivered pursuant to Section 7(b) hereof.
“Purchased Mortgage Loan” means a Mortgage Loan sold by Seller to Purchaser in a Transaction hereunder and not yet repurchased by Seller.
“Purchaser” has the meaning set forth in the preamble hereof.
“Purchaser’s Wire Instructions” has the meaning set forth in the Pricing Side Letter.
“Qualified Insurer” means, with respect to any Mortgaged Property, any insurer duly qualified as such under the laws of the states in which such Mortgaged Property is located, duly authorized and licensed in such state to transact the applicable insurance business and to write the insurance provided by the insurance policy issued by it.
“Records” means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller or any other person or entity with respect to a Purchased Asset. Records shall include, without limitation, the Mortgage Notes, any Mortgages, the Mortgage Files, the Servicing Files, and any other instruments necessary to document or service a Purchased Mortgage Loan, including, without limitation, the complete payment and modification history of each Purchased Mortgage Loan.
“Register” has the meaning specified in Section 42 hereof.
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“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York or any successor thereto.
“Repurchase Date” means, with respect to any Transaction involving Eligible Mortgage Loans, the earliest of (a) the Termination Date, (b) the Business Day following Seller’s written notice to Purchaser requesting a repurchase of such Transaction or such shorter time as permitted by the Purchaser, (c) at the conclusion of the Maximum Age Since Origination for any Eligible Mortgage Loan purchased hereunder, or (d) with respect to FHA Buyout Loans, the date that is 364 days after such FHA Buyout Loans become subject to a Transaction hereunder, or if any such day is not a Business Day, the immediately following Business Day.
“Repurchase Price” means the price at which Purchased Assets are to be transferred from Purchaser or its designee to Seller upon termination of a Transaction, which will be determined in each case as the sum of: (i) any portion of the Purchase Price not yet repaid to Purchaser, (ii) the Price Differential accrued and unpaid thereon, (iii) Breakage Costs, if any, and (iv) any accrued and unpaid fees or expenses or indemnity amounts and any other outstanding amounts owing and invoiced under the Program Documents from Seller to Purchaser.
“Request for Release of Documents” means the Request for Release of Documents set forth in the Custodial and Disbursement Agreement, as applicable.
“Requirement of Law” means as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
“Responsible Officer” means (i) as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer of such Person and (ii) as to Seller, President, Chief Administrative Officer, Treasurer, Senior Managing Counsel or any other executive managing member.
“Restricted Mortgage Loan” means (i) a “Growing Equity Loan,” “Graduated Payment Loan,” “Buydown Loan,” “Project Loan,” “Construction Loan” or “HECM Loan,” each as defined in the applicable Agency Guide, (ii) a 30+ Day Delinquent Mortgage Loan, (iii) a Mortgage Loan for which the related Escrow Payments have not been made by the next succeeding Due Date, or (iv) a High Cost Mortgage Loan.
“SEC” has the meaning ascribed thereto in Section 35.
“Section 404 Notice” means the notice required pursuant to Section 404 of the Helping Families Save Their Homes Act of 2009 (P.L. 111-22), which amends 15 U.S.C. Section 1641 et seq., to be delivered by a creditor that is an owner or an assignee of a Mortgage Loan to the
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related Mortgagor within thirty (30) days after the date on which such Mortgage Loan is sold or assigned to such creditor.
“Security” means a Ginnie Mae Security, a Fannie Mae Security or a Freddie Mac Security, as applicable.
“Seller” has the meaning set forth in the preamble hereof.
“Seller Mortgage Loan Schedule” means the list of Purchased Mortgage Loans proposed to be purchased by Purchaser, in the form of Exhibit H hereto, that will be delivered in an excel spreadsheet format by Seller to Purchaser and Custodian and attached by the Custodian to the related Certification.
“Servicer” means any servicer or subservicer approved by Agent in its sole discretion, which may be Seller.
“Servicer Side Letter” means, if Mortgage Loans are serviced by a third party servicer pursuant to a servicing agreement, the side letter agreement related to such servicing agreement among the Seller, the Servicer and the Purchaser, which is substantially in the form as mutually agreed upon by the parties hereto.
“Servicing File” means with respect to each Mortgage Loan, the file retained by Seller or its designee consisting of all documents that a prudent originator and servicer would include (including copies of the Mortgage File), all documents necessary to document and service the Mortgage Loans and any and all documents required to be delivered in connection with any transfer of servicing pursuant to the Program Documents.
“Servicing Records” means with respect to a Mortgage Loan, the related servicing records, including but not limited to any and all servicing agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of such Mortgage Loan.
“Servicing Rights” means contractual, possessory or other rights of Seller or any other Person to administer or service a Mortgage Loan or to possess the Servicing File.
“Servicing Term” has the meaning assigned thereto in Section 16(b).
“Settlement Agent” means, with respect to any Transaction the subject of which is a Wet-Ink Mortgage Loan, the entity approved by Agent, in its sole good-faith discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet-Ink Mortgage Loan is being originated.
“SOFR” means a rate per annum equal to the secured overnight financing rate for such Business Day published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org (or any successor
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source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time).
“Strict Compliance” means compliance of Seller and the Mortgage Loans with the requirements of the Agency Guide as amended by any agreements between Seller or a Takeout Investor, on the one hand, and the Applicable Agency, on the other hand, sufficient to enable Seller to issue and to service and Ginnie Mae to guarantee or Fannie Mae or Freddie Mac to issue and guarantee a Security.
“Structuring Fee” has the meaning assigned thereto in the Pricing Side Letter.
“Subsidiary” means, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
“Takeout Commitment” means (i) a fully executed trade confirmation from the related Takeout Investor to Seller confirming the details of a forward trade between the Takeout Investor and Seller with respect to one or more Purchased Assets, which trade confirmation shall be enforceable and in full force and effect, and relate to pools of Mortgage Loans that satisfy the “good delivery standards” of the Securities Industry and Financial Markets Association as set forth in the Securities Industry and Financial Markets Association Uniform Practices Manual, as amended from time to time or (ii) a commitment (a) to swap one or more identified Purchased Mortgage Loans with a Takeout Investor that is an Agency for a Security and (b) to sell the related Security or Takeout MBS to a Takeout Investor.
“Takeout Investor” means (x) for non-Jumbo Mortgage Loans, either (i) Barclays Capital, Inc., or any successor thereto, (ii) any member of the Mortgage Backed Securities Division of the Fixed Income Clearing Corporation, unless such member is disapproved by Agent in its sole discretion or (iii) any other Person approved by Agent in its reasonable discretion and (y) for Jumbo Mortgage Loans, either (i) Barclays Bank PLC or (ii) any other Person approved by Agent in its sole discretion.
“Takeout MBS” means to the extent any Purchased Mortgage Loans are pooled into Securities, and such Securities do not settle on the date they are issued, partial interests in such Securities backed by such Purchased Mortgage Loans and subject to the Intercreditor Agreement and to the related control agreements .
“Taxes” has the meaning assigned thereto in Section 8(a).
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“Term SOFR” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Termination Date” means the earliest to occur of (i) the Maturity Date and (ii) at the option of Purchaser, the occurrence and continuation of an Event of Default under this Agreement after the expiration of any applicable grace period.
“Trade Assignment” means an assignment to Purchaser of a forward trade between the Takeout Investor and Seller with respect to one or more Purchased Mortgage Loans, together with the related trade confirmation from the Takeout Investor to Seller that has been fully executed, is enforceable and is in full force and effect and confirms the details of such forward trade.
“Transaction” has the meaning assigned thereto in Section 1 hereof.
“Transaction Fee” has the meaning assigned thereto in the Pricing Side Letter.
“Transaction Notice” means a written request of Seller to enter into a Transaction in a form attached as Exhibit C hereto or such other form as shall be mutually agreed upon between Seller and Purchaser, which is deemed to be delivered to the Purchaser in accordance with Section 3(d) herein.
“Uncommitted Amount” has the meaning assigned thereto in the Pricing Side Letter.
“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Purchased Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.
“Warehouse Lender” means any lender providing financing to Seller for the purpose of warehousing, originating or purchasing a Mortgage Loan, which lender has a security interest in such Mortgage Loan to be purchased by Purchaser.
“Warehouse Lender’s Release” means a letter, in the form of Exhibit E, from a Warehouse Lender to Purchaser, unconditionally releasing all of Warehouse Lender’s right, title and interest in certain Mortgage Loans identified therein upon payment to the Warehouse Lender.
“Wet-Ink Mortgage Loan” means a Mortgage Loan that Seller is selling to Purchaser simultaneously with the origination thereof that is funded as part, either directly or indirectly, with the Purchase Price paid by Purchaser hereunder and for which the Custodian shall not have received a complete Mortgage File.
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“Wet-Ink Mortgage Loan Document Receipt Date” means for any Wet-Ink Mortgage Loan, the date that the Custodian executes an original trust receipt without exceptions.
(b) Interpretation.
Headings are for convenience only and do not affect interpretation. The following rules of this subsection (b) apply unless the context requires otherwise. The singular includes the plural and conversely. A gender includes all genders. Where a word or phrase is defined, its other grammatical forms have a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit is, unless otherwise specified, a reference to a section of, or annex or exhibit to, this Agreement. A reference to a party to this Agreement or another agreement or document includes the party’s successors and permitted substitutes or assigns. A reference to an agreement or document is to the agreement or document as amended, modified, novated, supplemented or replaced, except to the extent prohibited by any Program Document. A reference to legislation or to a provision of legislation includes any modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it. A reference to writing includes a facsimile transmission and any means of reproducing words in a tangible and permanently visible form. A reference to conduct includes, without limitation, an omission, statement or undertaking, whether or not in writing. An Event of Default exists until it has been waived in writing by Purchaser or has been timely cured. The words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” is not limiting and means “including without limitation.” In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.” This Agreement may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied. References herein to “fiscal year” and “fiscal quarter” refer to such fiscal periods of Seller. An Event of Default shall be deemed to be not continuing once waived by the Purchaser or the Agent.
Except where otherwise provided in this Agreement, any determination, consent, approval, statement or certificate made or confirmed in writing with notice to Seller by Purchaser or an authorized officer of Purchaser as required by this Agreement is conclusive in the absence of manifest error. A reference to an agreement includes a security interest, guarantee, agreement or legally enforceable arrangement whether or not in writing related to such agreement.
A reference to a document includes an agreement in writing or a certificate, notice, instrument or document, or any information recorded in electronic form. Where Seller is required to provide any document to Purchaser under the terms of this Agreement, the relevant document shall be provided in writing or printed form unless Purchaser requests otherwise.
This Agreement is the result of negotiations among, and has been reviewed by counsel to, Purchaser and Seller, and is the product of all parties. In the interpretation of this
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Agreement, no rule of construction shall apply to disadvantage one party on the ground that such party proposed or was involved in the preparation of any particular provision of this Agreement or this Agreement itself. Except where otherwise expressly stated, Purchaser may give or withhold, or give conditionally, approvals and consents and may form opinions and make determinations in its absolute sole discretion. Except as specifically required herein, any requirement of good faith, discretion or judgment by Purchaser or Agent shall not be construed to require Purchaser or Agent to request or await receipt of information or documentation not immediately available from or with respect to Seller, any other Person or the Purchased Assets themselves.
3. THE TRANSACTIONS
(a) It is acknowledged and agreed that, notwithstanding any other provision of this Agreement to the contrary, the facility provided under this Agreement is (i) a committed facility with respect to the Committed Amount and (ii) an uncommitted facility with respect to the Uncommitted Amount, and Purchaser shall have no obligation to enter into any Transactions hereunder with respect to the Uncommitted Amount. All purchases of Mortgage Loans hereunder shall be first deemed committed up to the Committed Amount and then the remainder, if any, shall be deemed uncommitted up the Uncommitted Amount.
(b) Subject to the terms and conditions of the Program Documents, Purchaser shall, up to the Committed Amount, and may, with respect to the Uncommitted Amount at the sole discretion of Purchaser or Agent, enter into Transactions provided, that the Aggregate MRA Purchase Price shall not exceed, as of any date of determination, the lesser of (i) the Maximum Aggregate Purchase Price and (ii) the Asset Base.
(c) Unless otherwise agreed, if Seller wishes to request that Purchaser enter into a Transaction with respect to one or more Eligible Mortgage Loans, then Seller shall deliver a Prefunding Request to Purchaser and Disbursement Agent no later than [***] (New York City time) on the Business Day prior to the requested Purchase Date, which Prefunding Request shall specify the amount that Seller requests Purchaser to fund on the related Purchase Date (such amount, the “Prefunded Amount”), which Prefunded Amount shall not be less than [***] and shall represent a good faith estimate of the amount needed for the fundings on the next Business Day. By submitting the Prefunding Request, Seller shall be deemed to have represented that no Responsible Officer of Seller has knowledge of any fact or circumstance that would cause such Responsible Officer to reasonably believe Seller could not represent that all conditions precedent to the Transactions expected to occur the following day shall be satisfied and that all Mortgage Loans to be purchased will be Eligible Mortgage Loans. If all such conditions precedent are satisfied, then Purchaser shall make commercially reasonable efforts to remit the Prefunded Amount to the Disbursement Account by [***] (New York City time) on the Purchase Date; provided that if the Prefunded Amount would require the use of the Uncommitted Amount, Purchaser may choose to reduce the Prefunded Amount accordingly. Remitting the Prefunded Amount to the Disbursement Account shall not constitute a purchase or an agreement to purchase any Mortgage Loan.
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(d) Once a Prefunding Request has been submitted, Seller may request that Purchaser actually purchase Eligible Mortgage Loans by submitting Seller Mortgage Loan Schedules to Purchaser and Custodian. Seller may submit up to [***] Seller Mortgage Loan Schedules at any time after the submission of the Prefunding Request until [***] (New York City time) on the Purchase Date. By submitting a Seller Mortgage Loan Schedule, Seller hereby agrees that it shall be deemed to have made all of the representations and warranties set forth in the form of Transaction Notice attached as Exhibit C hereto. Upon Seller’s request to enter into a Transaction pursuant to this Section 3(d), if all conditions precedent set forth in this Section 3 and in Sections 10(a) and (b) have been met, if all Mortgage Loans to be purchased are Eligible Mortgage Loans, and if no Default or Event of Default shall have occurred and be continuing, then, on the requested Purchase Date, Purchaser shall, in the case of a Transaction with respect to the Committed Amount, and may, in its sole discretion with respect to the Uncommitted Amount, purchase the Eligible Mortgage Loans included in the related Seller Mortgage Loan Schedule by instructing the Disbursement Agent to disburse the Purchase Price (net of any related Structuring Fee, Non-Utilization Fee, or any other unpaid fees and expense then due and payable by Seller to Purchaser pursuant to this Agreement) in accordance with the Custodial and Disbursement Agreement. No later than [***] (New York City time) on each Purchase Date, Seller shall submit via email to Purchaser and Disbursement Agent the amount offunded by the Seller Funded Portion then-standing to the credit of the Disbursement Account related to rescissions, other unfunded Mortgage Loans or any other unused amounts that Seller has calculated should be returned to Seller (the “Proposed Seller Refund”). No later than [***] (New York City time) on such Purchase Date, Purchaser shall subsequently respond via email to Seller and Disbursement Agent to clearly state confirmation or rejection of Seller’s calculation of the Proposed Seller Refund. If Purchaser confirms Seller’s calculation of the Proposed Seller Refund, then no later than [***] (New York City time) on such Purchase Date, Seller shall initiate a wire in the amount of such Proposed Seller Refund from the Disbursement Account. Upon Disbursement Agent’s (i) receipt of such email from Purchaser confirming Seller’s calculation of the Proposed Seller Refund and (ii) verification that the amount of such wire initiated by Seller matches the amount of the Proposed Seller Refund reflected in such Purchaser’s email confirmation, Disbursement Agent shall release the wire to Seller pursuant to the wire instructions Seller provides. To the extent Purchaser rejects or does not otherwise confirm the Proposed Seller Refund, Seller shall not initiate and Disbursement Agent shall not release any wires from the Disbursement Account. With respect to any amounts remaining in the Disbursement Account at [***] (New York City time) on each Purchase Date, the Disbursement Agent shall cause such amounts to be remitted to Purchaser in accordance with the terms of the Custodial and Disbursement Agreement.
(e) Reserved.
(f) On the related Price Differential Determination Date, Agent shall calculate the Price Differential for each outstanding Transaction payable on the Monthly Payment Date utilizing the Pricing Rate. Not less than two (2) Business Days prior to each Monthly Payment Date, Agent shall provide Seller with an invoice for the amount of the Price Differential due and payable with respect to all outstanding Transactions, setting forth the calculations thereof in reasonable detail and all accrued fees and expenses then due and owing to Purchaser. On the
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earliest of (1) the Monthly Payment Date or (2) the Termination Date, Seller shall pay to Purchaser the Price Differential then due and payable for (x) all outstanding Transactions and (y) Purchased Assets for which Purchaser has received the related Repurchase Price (other than Price Differential) pursuant to Section 3(g) during the prior calendar month.
(g) With respect to a Transaction, upon the earliest of (1) the Repurchase Date and (2) the Termination Date, Seller shall pay to Purchaser the related Repurchase Price (other than the related accrued Price Differential) together with any other Obligations then due and payable, and shall repurchase all Purchased Assets then subject to such Transaction. The Repurchase Price shall be transferred directly to Purchaser, and Purchaser shall transfer to Seller the related Purchased Assets.
(h) If Agent determines in its sole discretion that any Change in Law (except a Change in Law with regard to Taxes (or taxes expressly excluded from Taxes), which is governed solely by Section 8) or any change in accounting rules regarding capital requirements has the effect of reducing the rate of return on Purchaser’s capital or on the capital of any Affiliate of Purchaser under this Agreement as a consequence of such Change in Law or change in accounting rules, then from time to time Seller will compensate Purchaser or Purchaser’s Affiliate, as applicable, for such reduced rate of return suffered as a consequence of such Change in Law or change in accounting rules on terms similar to those imposed by Purchaser. Further, if due to the introduction of, any change in, or the compliance by Purchaser with (i) any eurocurrency reserve requirement, or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority whether or not having the force of law, there shall be an increase in the cost to Purchaser or any Affiliate of Purchaser in engaging in the present or any future Transactions (except a Change in Law with regard to Taxes (or taxes expressly excluded from Taxes), which is governed solely by Section 8), then Seller shall either terminate this Agreement or, from time to time and upon demand by Purchaser, compensate Purchaser or Purchaser’s Affiliate for such increased costs, and such amounts shall be deemed a part of the Obligations hereunder. Purchaser shall provide Seller with notice as to any such Change in Law, change in accounting rules or change in compliance promptly following Purchaser’s receipt of actual knowledge thereof.
(i) Seller shall indemnify the Purchaser and hold the Purchaser harmless from any losses, costs and/or expenses which the Purchaser may sustain or incur as a result of terminating any Transaction before a Repurchase Date arising from the reemployment of funds obtained by the Purchaser hereunder or from actual out of pocket fees and expenses payable to terminate the deposits from which such funds were obtained (“Breakage Costs”). The Agent shall deliver to Seller a statement setting forth the amount and basis of determination of any Breakage Costs in such detail as determined in good faith by the Purchaser to be adequate, it being agreed that such statement and the method of its calculation shall be adequate and shall be conclusive and binding upon Seller, absent manifest error. The provisions of this Section 3(i) shall survive termination of this Agreement.
If on any Business Day Agent determines (which determination shall be conclusive absent manifest error) (a) that adequate and reasonable means do not exist for ascertaining
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LIBOR; or (b) that LIBOR will not adequately and fairly reflect the cost to Purchaser of entering into or maintaining outstanding Transactions; or (c) that it has become unlawful for any Purchaser to honor its obligation to enter into or maintain outstanding Transactions hereunder using LIBOR, then Agent shall give notice thereof to Seller by telephone, facsimile, or other electronic means as promptly as practicable thereafter and, until Agent notifies Seller that the circumstances giving rise to such notice no longer exist, the Pricing Rate included in any Confirmation with respect to new Transactions and in any calculation of the Price Differential with respect to outstanding Transactions will be determined, subject to the timely approval of Seller after receipt of notice of such revised rate, at a rate per annum that Purchaser determines in its reasonable discretion adequately reflects the cost to Purchaser of making or maintaining such Transactions.
4. CONFIRMATION
In the event that parties hereto desire to enter into a Transaction on terms other than as set forth in this Agreement, the parties shall execute a confirmation prior to entering into such Transaction, which confirmation shall be in a form that is mutually acceptable to Purchaser and Seller and shall specify such terms, including, without limitation, the Purchase Date, the Purchase Price, the Pricing Rate therefor and the approximate Repurchase Date (a “Confirmation”). Any such Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed to between Purchaser and Seller with respect to the Transaction to which the Confirmation relates. In the event of any conflict between this Agreement and a Confirmation, the terms of the Confirmation shall control with respect to the related Transaction.
5. TAKEOUT COMMITMENTS
With respect to each Purchased Mortgage Loan subject to a Takeout Commitment, Seller shall instruct the related Takeout Investor to remit directly to Purchaser or the Bank in accordance with the terms of the Custodial and Disbursement Agreement no later than 4:00 p.m. (New York City time) on a Business Day an amount equal to the Repurchase Price for such Purchased Mortgage Loan in accordance with the Purchaser’s Wire Instructions. Simultaneously with or prior to such payment, Seller shall deliver to Purchaser via facsimile or electronic mail a payoff file in mutually agreeable form (the “Payoff File”) and shall indicate on such Payoff File the Mortgage Loan identification numbers which identified the applicable eligible Mortgage Loans when it was purchased by Purchaser hereunder. Upon receipt by Purchaser of payment of the Repurchase Price in respect of such Purchased Mortgage Loan, Purchaser shall release and remit to Seller any amount in excess of the Repurchase Price (other than the related Price Differential) on the next succeeding Business Day; provided, that both immediately before and after giving effect to such release and remittance, (i) there is no Default or Event of Default under this Agreement or any other Program Document and (ii) there is no Margin Deficit.
Simultaneously upon the transfer of the Takeout MBS to the Purchaser, (i) the Seller shall be construed to have transferred the Repurchase Price to the Purchaser for the related pooled Purchased Mortgage Loans backing such Takeout MBS; (ii) the Seller and Purchaser shall have entered into a new Transaction with respect such Takeout MBS; and (iii) the Purchaser shall be
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construed to have transferred the Purchase Price for the related Takeout MBS to the Seller. The Takeout MBS will be delivered to the securities account of the securities intermediary, at which time they will be subject to this Agreement. The Seller shall arrange for the sale of the Takeout MBS to a Takeout Investor, the proceeds of such sale to be credited to the account of the paying agent to satisfy the Repurchase Price with respect to the Takeout MBS.
6. PAYMENT AND TRANSFER
(a) Unless otherwise agreed by Seller and Purchaser or as otherwise provided herein or in any other RepurchaseProgram Document, all transfers of funds hereunder shall be in Dollars in immediately available funds. Seller shall remit (or, if applicable, shall cause to be remitted) directly to Purchaser all payments required to be made by it to Purchaser hereunder or under any other Program Document in accordance with wire instructions provided by Purchaser. Any payments received by Purchaser after 5:00 p.m. (New York City time) shall be applied on the next succeeding Business Day.
(b) Following Seller’s receipt of the Closing Protection Letter and Seller’s distribution of the Escrow Instruction Letter to the Settlement Agent, the Disbursement Agent will aggregate and disburse funds directly to the loan closing with respect to Wet-Ink Mortgage Loans that are subject to a Transaction hereunder.
7. MARGIN MAINTENANCE
(a) Agent shall determine the Market Value of the Purchased Assets at any time as determined by Agent in its sole discretion. Agent shall have the right to mark to market the Purchased Assets on a daily basis in connection with which the Market Value with respect to one or more of the Purchased Assets may be determined to be zero in accordance with the terms herein.
(b) If, as of any date of determination, the lesser of (i) [***] of the Principal Balance of the Purchased Mortgage Loans and face amount of the Takeout MBS and (ii) the aggregate Market Value of all Purchased Assets then subject to all Transactions, taking into account the cash then on deposit in the Collection Account, multiplied by the applicable Purchase Price Percentage is less than the Repurchase Price for all such Transactions by an amount that exceeds [***] (a “Margin Deficit”), then Agent may, by notice to the Seller (as such notice is more particularly set forth below, a “Margin Call”), require Seller to transfer to Purchaser or its designee cash or, at Purchaser’s option (and provided Seller has additional Eligible Mortgage Loans), additional Eligible Mortgage Loans to Purchaser (“Additional Purchased Mortgage Loans”) to cure the Margin Deficit. If the Agent delivers a Margin Call to the Seller on or prior to [***] (New York City time) on any Business Day, then the Seller shall transfer cash or Additional Purchased Mortgage Loans to Purchaser or its designee no later than [***] (New York City time) on the same Business Day. In the event the Agent delivers a Margin Call to Seller after [***] (New York City time) on any Business Day, Seller shall be required to transfer cash or Additional Purchased Mortgage Loans no later than [***] (New York City time) on the next succeeding Business Day.
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(c) Any cash transferred to Purchaser or its designee pursuant to Section 16(f)(ii) herein shall reduce the Repurchase Price of the related Transactions.
(d) The failure of Purchaser, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions of this Agreement or limit the right of the Purchaser to do so at a later date. Seller and Purchaser each agree that a failure or delay by a Purchaser to exercise its rights hereunder shall not limit or waive Purchaser’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.
(e) For the avoidance of doubt, it is hereby understood and agreed that Seller shall be responsible for satisfying any Margin Deficit existing as a result of any reduction of the Principal Balance of any Purchased Mortgage Loan pursuant to any action by any bankruptcy court.
8. TAXES; TAX TREATMENT
(a) All payments made by Seller under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto imposed by any Governmental Authority therewith or thereon, excluding income taxes, branch profits taxes, franchise taxes or any other tax imposed on net income by the United States, a state or a foreign jurisdiction under the laws of which Purchaser is organized or of its applicable lending office, or a state or foreign jurisdiction with respect to which Purchaser has a present or former connection (other than any connection arising from executing, delivering, being party to, engaging in any transaction pursuant to, performing its obligations under or enforcing any Program Document), or any political subdivision thereof, U.S. federal withholding taxes imposed on amounts payable to or for the account of such Purchaser with respect to an applicable interest in a Transaction pursuant to a law in effect on the date on which (i) such Purchaser acquires such interest in the Transaction or (ii) such Purchaser changes its lending office, Taxes attributable to such Purchaser’s failure to comply with Section 8(d) and 8(e) (except to the extent such Taxes were payable under this Section 8 by Seller to such Purchaser’s assignor immediately before such Purchaser became a party hereto or to such Purchaser immediately before it changed its lending office), and taxes imposed under FATCA (collectively, such non-excluded taxes are hereinafter called “Taxes”), all of which shall be paid by Seller for its own account not later than the date when due. If Seller is required by law or regulation to deduct or withhold any Taxes from or in respect of any amount payable hereunder, it shall: (a) make such deduction or withholding, (b) pay the amount so deducted or withheld to the appropriate Governmental Authority not later than the date when due, (c) deliver to the Purchaser, promptly, original tax receipts and other evidence satisfactory to the Purchaser of the payment when due of the full amount of such Taxes; and (d) except as otherwise expressly provided in Section 8(d) below, pay to the Purchaser such additional amounts (including all Taxes imposed by any Governmental Authority on such additional amounts) as may be necessary so that after such deduction or withholding on account of Taxes has been made (including such deductions and withholding applicable to additional amounts payable under this Section) the Purchaser receives, free and clear of all Taxes, a net amount equal to the amount it would have received under this Agreement, as if no such deduction or withholding had been made.
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(b) In addition, Seller agrees to pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including, without limitation, mortgage recording taxes, transfer taxes and similar fees) imposed by any taxing authority that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement except such taxes imposed with respect to an assignment as a result of a present or former connection between Purchaser and the jurisdiction imposing such taxes (other than connections arising from Purchaser having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Program Document, or sold or assigned any Purchased Asset or Program Document) (“Other Taxes”).
(c) Seller agrees to indemnify Purchaser for the full amount of Taxes (including additional amounts with respect thereto) and Other Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 8, and any liability (including penalties, interest and expenses arising thereon or with respect thereto) arising therefrom or with respect thereto, provided, that the Purchaser shall have provided Seller with evidence, reasonably satisfactory to Seller, of payment of Taxes or Other Taxes, as the case may be.
(d) Any Purchaser that is either (i) not incorporated under the laws of the United States, any State thereof, or the District of Columbia or (ii) not otherwise treated as a “United States person” under the Code (a “Foreign Purchaser”) shall provide Seller and Agent with original properly completed and duly executed United States Internal Revenue Service (“IRS”) Forms W-8BEN-E or W-8ECI or any successor form prescribed by the IRS (or IRS Form W-8IMY, with IRS Form W-8BEN-E or W-8ECI attached), certifying that such Person is either (1) entitled to benefits under an income tax treaty to which the United States is a party which eliminates United States withholding tax under Sections 1441 through 1442 of the Code on payments to it or (2) otherwise fully exempt from United States withholding tax under Sections 1441 through 1442 of the Code on payments to it or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States in either case, on or prior to the date upon which each such Foreign Purchaser becomes a Purchaser. Each Foreign Purchaser will resubmit the appropriate form eliminating withholding tax on payments to it on the earliest of (A) the third anniversary of the prior submission, or (B) on or before the expiration of thirty (30) days after there is a “change in circumstances” with respect to such Person as defined in Treas. Reg. Section 1.1441-1(e)(4)(ii)(D). Upon the execution of this Agreement, each Purchaser that is a “United States person” within the meaning of the Code shall deliver to Seller a duly executed original of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable laws or reasonably requested by Seller as will enable Seller to determine whether or not Purchaser is subject to backup withholding or information reporting requirements. Unless Seller has received such forms or other documents or information as required by this Section 8(d) to establish Purchaser’s exception from backup withholding tax, Seller shall not be required to pay additional sums or indemnify Purchaser for any backup amount withheld.
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(e) If a payment made to Purchaser under this Agreement would be subject to any withholding tax imposed by FATCA if Agent or Purchaser were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Purchaser shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f) Without prejudice to the survival of any other agreement of Seller hereunder, the agreements and obligations of Seller contained in this Section 8 shall survive the termination of this Agreement. Nothing contained in this Section 8 shall require Purchaser to make available any of its tax returns or other information that it deems to be confidential or proprietary.
(g) Each party to this Agreement acknowledges that it is its intent solely for purposes of U.S. federal, state and local income and franchise taxes to treat each Transaction as indebtedness of the Seller that is secured by the Purchased Assets and that the Purchased Assets are owned by Seller in the absence of an Event of Default by the Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law.
9. SECURITY INTEREST; PURCHASER’S APPOINTMENT AS ATTORNEY-IN-FACT
(a) Seller and Purchaser intend that (other than for tax and accounting purposes) the Transactions hereunder be sales to Purchaser of the Purchased Assets and not loans from Purchaser to Seller secured by the Purchased Assets. However, in order to preserve Purchaser’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as other than sales, and as security for Seller’s performance of all of its Obligations, Seller hereby grants to Purchaser a first priority security interest in the Purchased Assets. Seller acknowledges and agrees that its rights with respect to the Purchased Assets are and shall continue to be at all times junior and subordinate to the rights of Purchaser hereunder.
(b) Seller hereby irrevocably constitutes and appoints Purchaser and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Purchaser’s discretion, to file such financing statement or statements relating to the Purchased Assets as Purchaser at its option may deem appropriate, and if an Event of Default shall have occurred and be continuing, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, Seller hereby
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gives Purchaser the power and right, on behalf of Seller, without assent by, but with notice to, Seller, to do the following if an Event of Default shall have occurred and be continuing and Purchaser has elected to exercise its remedies pursuant to Section 18 hereof:
(i) in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any Purchased Assets and to file any claim or to take any other action or initiate and maintain any appropriate proceeding in any appropriate court of law or equity or otherwise deemed appropriate by Purchaser for the purpose of collecting any and all such moneys due with respect to any Purchased Assets whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or threatened against the Purchased Assets;
(iii) (A) to direct any party liable for any payment under any Purchased Assets to make payment of any and all moneys due or to become due thereunder directly to Purchaser or as Purchaser shall direct, (B) in the name of Seller, or in its own name, or otherwise as appropriate, to directly send or cause the applicable servicer to send “hello” letters, “goodbye” letters in the form of Exhibit D, and Section 404 Notices; (C) to ask or demand for, collect, receive payment of and receipt for any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Purchased Assets; (D) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Purchased Assets; (E) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Purchased Assets or any proceeds thereof and to enforce any other right in respect of any Purchased Assets; (F) to defend any suit, action or proceeding brought against Seller with respect to any Purchased Assets; (G) to settle, compromise or adjust any suit, action or proceeding described in clause (F) above and, in connection therewith, to give such discharges or releases as Purchaser may deem appropriate; and (H) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Purchased Assets as fully and completely as though Purchaser was the absolute owner thereof for all purposes, and to do, at Purchaser’s option and Seller’s expense, at any time, and from time to time, all acts and things which Purchaser deems necessary to protect, preserve or realize upon the Purchased Assets and Purchaser’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do.
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.
Seller also authorizes Purchaser, from time to time if an Event of Default shall have occurred and be continuing, to execute any endorsements, assignments or other instruments of conveyance or transfer with respect to the Purchased Assets in connection with any sale provided for in Section 18 hereof.
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The powers conferred on Purchaser hereunder are solely to protect Purchaser’s interests in the Purchased Assets and shall not impose any duty upon it to exercise any such powers. Purchaser shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither Purchaser nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder.
10. CONDITIONS PRECEDENT
(a) As conditions precedent to the effectiveness of this Agreement, Purchaser shall have received on or before the Effective Date the following, in form and substance satisfactory to Purchaser and duly executed by each party thereto (as applicable):
(i) Each of the Program Documents duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver;
(ii) A certificate of an officer of Seller attaching certified copies of Seller’s consents or charter, bylaws and corporate resolutions, as applicable, approving the Program Documents and Transactions thereunder (either specifically or by general resolution), and all documents evidencing other necessary corporate action or governmental approvals as may be required in connection with the Program Documents;
(iii) A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date which is ten (10) Business Days prior to the Effective Date;
(iv) An incumbency certificate of the secretary of Seller certifying the names, true signatures and titles of Seller’s representatives who are duly authorized to request Transactions hereunder and to execute the Program Documents and the other documents to be delivered thereunder;
(v) An opinion of Seller’s counsel as to such matters as Purchaser may reasonably request (including, without limitation, with respect to Purchaser’s perfected security interest in the Purchased Assets, a non-contravention, enforceability and corporate opinion with respect to Seller, an opinion with respect to the inapplicability of the Investment Company Act to Seller, an opinion that this Agreement constitutes a “repurchase agreement”, a “securities contract” and a “master netting agreement” within the meaning of the Bankruptcy Code and an opinion that no Transaction constitutes an avoidable transfer under Sections 546(e), 546(f), and 546(j) of the Bankruptcy Code, each in form and substance acceptable to Purchaser;
(vi) Seller shall have paid to Purchaser and Purchaser shall have received all accrued and unpaid fees and expenses owed to Purchaser in accordance with the Program Documents, including without limitation, the Structuring Fee, the Non-Utilization Fee, and any Transaction Fees then due and owing pursuant to Section 2 of the Pricing Side Letter, in immediately available funds, and without deduction, set-off or counterclaim;
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(vii) A copy of the insurance policies required by Section 14(q) of this Agreement;
(viii) Duly completed and filed Uniform Commercial Code financing statements acceptable to Purchaser and covering the Purchased Assets on Form UCC1;
(ix) Purchaser or Agent shall have completed the due diligence review pursuant to Section 36, and such review shall be satisfactory to Purchaser and Agent in their sole discretion;
(x) Seller shall have provided evidence, satisfactory to Purchaser and Agent, that Servicer’s and Seller’s Approvals are in good standing; and
(xi) Any other documents reasonably requested by Purchaser or Agent.
(b) As conditions precedent to each Transaction pursuant to this Agreement (including the initial Transaction), each of the following conditions precedent must have been satisfied:
(i) Purchaser or its designee shall have received on or before the Purchase Date with respect to Eligible Mortgage Loans that are to be the subject of such Transaction (unless otherwise specified in this Agreement) the following, in form and substance satisfactory to Purchaser and (if applicable) duly executed:
(A) Seller shall have paid to Purchaser and Purchaser shall have received all accrued and unpaid fees and expenses owed to Purchaser in accordance with the Program Documents, including without limitation, the Structuring Fee, the Non-Utilization Fee and any Transaction Fee then due and owing pursuant to Section 2 of the Pricing Side Letter, in immediately available funds, and without deduction, set-off or counterclaim;
(B) The Seller Mortgage Loan Schedule with respect to such Purchased Assets, delivered pursuant to Section 3(c);
(C) [Reserved];
(D) Purchaser shall have received the Structuring Fee, the Non-Utilization Fee, and the Transaction Fees in respect of such Transaction then due and owing pursuant to Section 2 of the Pricing Side Letter, in immediately available funds, and without deduction, set-off or counterclaim;
(E) With respect to Mortgage Loans that are not Wet-Ink Mortgage Loans, an original trust receipt executed by the Custodian without exceptions and with respect to Wet-Ink Mortgage Loans, an original trust receipt executed by the Wet-Ink Mortgage Loan
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Document Receipt Date by the Custodian, without exceptions other than those exceptions acceptable to Purchaser in its sole discretion;
(F) Such other certifications of Custodian as are required under Sections 2 and 4 of the Custodial and Disbursement Agreement;
(G) [Reserved];
(H) A duly executed Warehouse Lender’s Release from any Warehouse Lender (including any party that has a precautionary security interest in a Mortgage Loan) having a security interest in any Mortgage Loans subject to such Transaction, substantially in the form of Exhibit E, addressed to Purchaser, releasing any and all of its right, title and interest in, to and under such Mortgage Loan (including, without limitation, any security interest that such secured party or secured party’s agent may have by virtue of its possession, custody or control thereof) and, to the extent applicable, has filed Uniform Commercial Code termination statements in respect of any Uniform Commercial Code filings made in respect of such Mortgage Loan, and each such Warehouse Lender’s Release and Uniform Commercial Code termination statement has been delivered to Purchaser prior to such Transaction and to the Custodian as part of the Mortgage File.
(ii) No Default or Event of Default shall have occurred and be continuing;
(iii) Purchaser shall not have determined that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any requirement of law applicable to Purchaser has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Purchaser to enter into Transactions with the applicable Pricing Rate, and, if applicable, Purchaser shall have made a similar determination with respect to similarly situated sellers;
(iv) Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, all representations and warranties in the Program Documents shall be true and correct on the date of such Transaction (with the same force and effect as if made on such date) and Seller is in compliance with the terms and conditions of the Program Documents, other than as may be expressly waived by the Purchaser;
(v) The then Aggregate MRA Purchase Price when added to the Purchase Price for the requested Transaction, shall not exceed, as of any date of determination, the lesser of (a) the Maximum Aggregate Purchase Price and (b) the Asset Base;
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(vi) The Purchase Price for the requested Transaction shall not be less than [***];
(vii) Satisfaction of any conditions precedent to the initial Transaction as set forth in clause (a) of this Section 10 that were not satisfied prior to such initial Purchase Date;
(viii) Purchaser shall have determined that all actions necessary to establish or maintain Purchaser’s perfected security interest in the Purchased Assets have been taken;
(ix) Purchaser or its designee shall have received any other documents reasonably requested by Purchaser pursuant to a request specifying the reasons for such request, reasonable information, and/or written responses to such requests, regarding the financial well-being of Seller;
(x) There is no Margin Deficit at the time immediately prior to entering into a new Transaction (other than a Margin Deficit that will be cured contemporaneous with such Transaction in accordance with the provisions of Section 7 hereof) and no Margin Deficit will exist immediately after giving effect thereto; and
(xi) None of the following shall have occurred and/or be continuing:
(A) an event or events shall have occurred in the good faith determination of Purchaser resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Purchaser not being able to finance Eligible Mortgage Loans through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or
(B) an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by mortgage loans or an event or events shall have occurred resulting in Purchaser not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events; or
(C) there shall have occurred a material adverse change in the financial condition of Purchaser which affects (or can reasonably be expected to affect) materially and adversely the ability of Purchaser to fund its obligations under this Agreement.
(xii) Delivery of all due diligence results to the extent diligence is performed by Purchaser or Agent with respect to such Transaction;
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(xiii) All Mortgage Loans referenced on the related Seller Mortgage Loan Schedule are Eligible Mortgage Loans; and
(xiv) The Seller’s, or its Affiliate as Servicer’s, HUD ranking is not below “Tier 2” lender.
11. RELEASE OF PURCHASED ASSETS
Upon timely payment in full of the Repurchase Price and all other Obligations (if any) then owing with respect to a Purchased Asset pursuant to Section 3(f) hereof, unless a Margin Deficit or an Event of Default shall have occurred and be continuing: (a) Purchaser shall automatically and without any further action terminate any security interest that Purchaser may have in such Purchased Asset, (b) the Purchaser shall automatically and without further action sell and release to the Seller or the applicable Takeout Investor, as the case may be, such Purchased Asset, and (c) with respect to such Purchased Asset, Purchaser shall or shall direct Custodian to release such Purchased Asset to Seller or the applicable Takeout Investor, as the case may be. Except as set forth in Section 16(f)(ii) and Section 15, Seller shall give at least two (2) Business Days prior written notice to Purchaser if such repurchase shall occur on any date other than the Repurchase Date.
If such a Margin Deficit is applicable, Purchaser shall notify Seller of the amount thereof and Seller may thereupon satisfy the Margin Call in the manner specified in Section 7.
12. RELIANCE
With respect to any Transaction, Purchaser may conclusively rely upon, and shall incur no liability to Seller in acting upon, any request or other communication that Purchaser reasonably believes to have been given or made by a person authorized to enter into a Transaction on Seller’s behalf.
13. REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to Purchaser and Agent, and shall on and as of the Purchase Date for any Transaction and on and as of each date thereafter through and including the related Repurchase Date be deemed to represent and warrant to Purchaser and Agent that:
(a) Due Organization, Qualification, Power, Authority and Due Authorization. Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and it has qualified to do business in each jurisdiction in which it is legally required to do, provided that if Seller subsequently fails to so qualify, it rectifies the failure to qualify within one (1) Business Day of notice or knowledge of such failure. Seller has the power and authority under its certificate of formation, operating agreement and applicable law to enter into this Agreement and the Program Documents and to perform all acts contemplated hereby and thereby or in connection herewith and therewith; this Agreement and the Program Documents and the transactions contemplated hereby and thereby have been duly authorized by all necessary
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action and do not require any additional approvals or consents or other action by, or any notice to or filing with, any Person other than any that have heretofore been obtained, given or made.
(b) Noncontravention. The consummation of the transactions contemplated by this Agreement and Program Documents are in the ordinary course of business of Seller and will not conflict with, result in the breach of or violate any provision of the certificate of formation and operating agreement of Seller or result in the breach of any provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement, indenture, loan or credit agreement or other instrument to which Seller, the Purchased Assets or any of Seller’s Property is or may be subject to, or result in the violation of any law, rule, regulation, order, judgment or decree to which Seller, the Purchased Assets or Seller’s Property is subject. Without limiting the generality of the foregoing, the consummation of the Transactions will not violate any policy, regulation or guideline of the FHA or VA or result in the voiding or reduction of the FHA insurance, VA guarantee or any other insurance or guarantee in respect of any Purchased Mortgage Loan, and such FHA insurance or VA guarantee is in full force and effect or shall be in full force and effect as required by the applicable Agency Guide.
(c) Legal Proceeding. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body pending or, to the knowledge of a Responsible Officer of Seller, threatened (in writing) against or affecting Seller (or, to the knowledge of a Responsible Officer of Seller, any basis therefor) (i) that, if it involves a claim that would be considered frivolous by industry standards or where the claimed amount in controversy is clearly excessive given the circumstances, is likely to succeed, and (ii) with respect to which an unfavorable decision, ruling or finding could reasonably be expected to adversely affect the validity of the Purchased Assets or the validity or enforceability of this Agreement or the Program Documents, would adversely affect the proceedings of Seller in connection herewith, or would or could reasonably be expected to materially and adversely affect Seller’s ability to carry out its obligations hereunder.
(d) Valid and Binding Obligations. This Agreement, the Program Documents and every other document to be executed by Seller in connection with this Agreement is and will be the legal, valid, binding and subsisting obligations of Seller, enforceable in accordance with their respective terms, except that (A) the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (B) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
(e) Financial Statements. The financial statements of Seller, copies of which have been furnished to Purchaser, (i) are, as of the dates and for the periods referred to therein, complete and correct in all material respects, (ii) present fairly the financial condition and results of operations of Seller as of the dates and for the periods indicated and (iii) have been prepared in accordance with GAAP consistently applied, except as noted therein (subject as to interim statements to normal year-end adjustments). Since the date of the most recent financial statements, there has been no Material Adverse Change with respect to Seller. Except as
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disclosed in such financial statements or pursuant to Section 14(i) hereof, Seller is not subject to any contingent liabilities or commitments that, individually or in the aggregate, have a reasonable possibility of causing a Material Adverse Change with respect to Seller.
(f) Accuracy of Information. Neither this Agreement nor any representations and warranties or information relating to Seller that Seller has delivered or caused to be delivered to Purchaser, including, but not limited to, all documents related to this Agreement, the Program Documents or Seller’s financial statements, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made therein or herein in light of the circumstances under which they were made, not misleading. Since the furnishing of such documents or information, there has been no change, nor any development or event involving a prospective change that would render any of such documents or information untrue or misleading in any material respect, unless Seller delivered such other documents or information informing Purchaser or Agent of such change.
(g) No Consents. No consent, license, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative agency or other governmental instrumentality, nor any consent, approval, waiver or notification of any creditor, lessor or other non-governmental Person, is required in connection with the execution, delivery and performance by Seller or its Parent Company, if any, of this Agreement or any other Program Document to which it is a party, other than any that have heretofore been obtained, given or made.
(h) Compliance With Law, Etc. No practice, procedure or policy employed by Seller in the conduct of its businesses violates any law, regulation, judgment, agreement, regulatory consent, order or decree applicable to it which, if enforced, would result in a Material Adverse Effect.
(i) Solvency. Seller is solvent and will not be rendered insolvent by any Transaction and, after giving effect to each such Transaction, Seller 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 believes that it has incurred, debts beyond its ability to pay such debts as they mature. Seller is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of Seller or any of its assets. The audited annual financial statements of Seller or the notes thereto or other opinions or conclusions stated therein have not been qualified or limited by reference to the status of such Person as a “going concern” or a reference of similar import or indicate that Seller has a negative net worth or is insolvent.
(j) Fraudulent Conveyance. The amount of consideration being received by Seller in respect of each Transaction, taken as a whole, constitutes reasonably equivalent value and fair consideration for the related Purchased Assets. Seller is not transferring any Purchased Assets with any intent to hinder, delay or defraud any of its creditors. The Agreement and the Program Documents, any other document contemplated hereby or thereby and each Transaction have not been entered into fraudulently by Seller hereunder, or with the intent to hinder, delay or defraud any creditor or Purchaser.
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(k) Investment Company Act Compliance. Seller is not required to be registered as an “investment company” as defined under the Investment Company Act nor is an entity “controlled by” an entity required to be registered as an “investment company” as defined under the Investment Company Act.
(l) Taxes. Seller has timely filed all federal and state income and other material tax returns that are required to be filed by it and has paid all taxes, including any assessments received by it, to the extent that such taxes are reflected on such returns and have become due or otherwise are federal, state income or other material taxes (other than for taxes that are being contested in good faith or for which it has established adequate reserves). Any taxes, fees and other governmental charges payable by Seller in connection with a Transaction and the execution and delivery of the Program Documents have been paid.
(m) Additional Representations. With respect to each Purchased Asset to be sold hereunder by Seller to Purchaser, Seller hereby makes all of the applicable representations and warranties set forth in Exhibit B as of the date the related Mortgage File is delivered to Purchaser or the Custodian with respect to the Purchased Assets and continuously while such Purchased Asset is subject to a Transaction. Further, as of each Purchase Date, Seller shall be deemed to have represented and warranted in like manner that Seller has no knowledge that any such representation or warranty may have ceased to be true in a material respect as of such date, except as otherwise stated in a written notice to the Purchaser, any such exception to identify the applicable representation or warranty and specify in reasonable detail the related knowledge of Seller.
(n) No Broker. Seller has not dealt with any broker, investment banker, agent, or other person, except for Purchaser, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement; provided, that if Seller has dealt with any broker, investment banker, agent, or other person, except for Purchaser, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement, such commission or compensation shall have been paid in full by Seller.
(o) [Reserved].
(p) Approvals. Seller has all requisite Approvals.
(q) [Reserved].
(r) No Adverse Actions. Seller has not received from any Agency a notice of extinguishment or a notice indicating material breach, default or material non-compliance which the Agent reasonably determines may entitle an Agency to terminate, suspend, sanction or levy penalties against the Seller, or a notice from any Agency, HUD, FHA or VA indicating any adverse fact or circumstance in respect of Seller which the Agent reasonably determines may entitle such Agency, HUD, FHA or VA, as the case may be, to revoke any Approval or otherwise terminate, suspend Seller as an Agency approved issuer or servicer, or with respect to which such
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adverse fact or circumstance has caused any Agency, HUD, FHA or VA, as the case may be, to terminate Seller, without any subsequent rescission thereof in such notice.
(s) Chief Executive Office/Jurisdiction of Organization. On the Effective Date, Seller’s chief executive office and chief place of business is located at 2211 Old Earhart Road, Suite 250, Ann Arbor, Michigan 48105. On the Effective Date, Seller is a New Jersey corporation, Seller is not organized under any jurisdiction other than New Jersey, and Seller’s federal tax identification number is [***].
(t) Affiliated Parties. Seller is not an Affiliate of the Custodian, Disbursement Agent, Settlement Agent or any other party to a Program Document hereunder.
The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Assets to Purchaser and shall continue for so long as the Purchased Assets are subject to this Agreement.
14. COVENANTS OF SELLER
Seller hereby covenants and agrees with Purchaser and Agent as follows:
(a) Defense of Title. Seller warrants and will defend the right, title and interest of Purchaser in and to all Purchased Assets against all adverse claims and demands.
(b) No Amendment or Compromise. None of Seller or those acting on Seller’s behalf shall amend, modify, or waive any term or condition of, or settle or compromise any claim in respect of, any item of the Purchased Assets, any related rights or any of the Program Documents without the prior written consent of Purchaser, except if such amendment or modification does not (i) affect the amount or timing of any payment of principal or interest payable with respect to a Purchased Asset, extend its scheduled maturity date, modify its interest rate, or constitute a cancellation or discharge of its outstanding principal balance or (ii) materially and adversely affect the security afforded by the real property, furnishings, fixtures, or equipment securing the Purchased Asset. Notwithstanding the foregoing, the Seller may amend, modify or waive any term or condition of the individual Mortgage Loans in accordance with Accepted Servicing Practices and the Agency Guides; provided, that Seller shall promptly notify Purchaser of any amendment, modification or waiver that causes any Purchased Mortgage Loan to cease to be an Eligible Mortgage Loan.
(c) No Assignment; No Liens. Except as permitted herein, Seller shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in, or Lien on or otherwise encumber (except pursuant to the Program Documents) any of the Purchased Assets or any interest therein, provided that this Section 14(c) shall not prevent any of the following: any contribution, sale, assignment, transfer or conveyance of Purchased Assets in accordance with the Program Documents and any forward purchase commitment or other type of take out commitment for the Purchased Assets (without vesting rights in the related purchasers as against Purchaser).
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(d) No Economic Interest. Neither Seller nor any Affiliate thereof will acquire any economic interest in or obligation with respect to any Purchased Mortgage Loan except for record title to the Mortgage relating to such Purchased Mortgage Loan and the right and obligation to repurchase the Mortgage Loan hereunder and the right to receive amounts pursuant to Section 16.
(e) Preservation of Purchased Assets. Seller shall take all actions necessary or, in the reasonable opinion of Purchaser, desirable, to preserve the Purchased Assets so that they remain subject to a first priority perfected security interest hereunder and deliver evidence that such actions have been taken, including, without limitation, duly completed and filed Uniform Commercial Code financing statements on Form UCC1. Without limiting the foregoing, Seller will comply with all applicable laws, rules, regulations and other laws of any Governmental Authority applicable to Seller relating to the Purchased Assets and cause the Purchased Assets to comply with all applicable laws, rules, regulations and other laws of any such Governmental Authority. Seller will not allow any default to occur for which Seller is responsible under any Purchased Assets or any Program Documents and Seller shall fully perform or cause to be performed when due all of its obligations under any Purchased Assets or the Program Documents.
(f) Maintenance of Papers, Records and Files.
(i) Seller shall maintain all Records relating to the Purchased Assets not in the possession of Custodian or released in accordance with the Custodial and Disbursement Agreement in good and complete condition in accordance with industry practices and preserve them against loss. Seller shall collect and maintain or cause to be collected and maintained all such Records in accordance with industry custom and practice, and all such Records shall be in Purchaser’s or Custodian’s possession unless Purchaser otherwise approves in writing or in accordance with the Custodial and Disbursement Agreement. Seller will not cause or authorize any such papers, records or files that are an original or an only copy to leave Custodian’s possession, except for individual items removed in connection with servicing a specific Mortgage Loan, in which event Seller will obtain or cause to be obtained a receipt from the Custodian for any such paper, record or file, or as otherwise permitted under the Custodial and Disbursement Agreement.
(ii) For so long as Purchaser has an interest in or Lien on any Purchased Asset, Seller will hold or cause to be held all related Records for the sole benefit of Purchaser.
(iii) Upon reasonable advance notice from Custodian or Purchaser, Seller shall (x) make any and all such Records available to Custodian or Agent for examination, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, (y) permit Agent or its authorized agents to discuss the affairs, finances and accounts of Seller with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of Seller with its independent certified public accountants.
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(g) Financial Statements and Other Information; Financial Covenants.
(i) Seller shall keep or cause to be kept in reasonable detail books and records setting forth an account of its assets and business and, as applicable, shall clearly reflect therein the transfer of Purchased Assets to Purchaser. Seller shall furnish or cause to be furnished to Purchaser the following:
(A) Financial Statements.
(1) Within ninety (90) days after the end of each fiscal year of Seller, the consolidated audited balance sheets of Seller and its consolidated Subsidiaries, which will be in conformity with GAAP, and the related consolidated audited statements of income and changes in equity showing the financial condition of Seller and its consolidated Subsidiaries as of the close of such fiscal year and the results of operations during such year, and consolidated audited statements of cash flows, as of the close of such fiscal year, setting forth, in each case, in comparative form the corresponding figures for the preceding year. The foregoing consolidated financial statements are to be reported on by, and to carry the unqualified report (in a form substantially similar to the form of financial statements attached hereto as Exhibit J, or in a form otherwise acceptable to Purchaser and Agent) of, an independent public accountant of national standing acceptable to Purchaser and Agent, which shall include KPMG LLP, PricewaterhouseCoopers LLP, Deloitte LLP, BDO USA, LLP, and any other similarly situated independent public account;
(2) Within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of Seller, consolidated unaudited balance sheets and consolidated statements of income, (in a form substantially similar to the form of financial statements attached hereto as Exhibit K, or in a form otherwise acceptable to Purchaser and Agent), showing the financial condition and results of operations of Seller and its consolidated Subsidiaries, each on a consolidated basis as of the end of each such quarter and for the then elapsed portion of the fiscal year, setting forth, in each case, in comparative form the corresponding figures for the corresponding periods of the preceding fiscal year, certified by a financial officer of Seller who is qualified to make such certification as presenting fairly the financial position and results of operations of Seller and its consolidated Subsidiaries and as having been prepared in accordance with GAAP consistently applied, in each case, subject to normal year-end audit adjustments;
(3) As soon as is practicable, but in any event within thirty (30) days after the end of each of the first two months of a fiscal quarter, consolidated unaudited balance sheets and consolidated statements of income (in a form substantially similar to the form of financial statements attached hereto as Exhibit K, or in a form otherwise acceptable to Purchaser and Agent) showing the financial condition and results of operations of Seller and its consolidated Subsidiaries on a consolidated basis as of the end of each such month and for the
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then elapsed portion of the fiscal year, setting forth, in each case, in comparative form the corresponding figures for the corresponding month of the preceding fiscal year, certified by a financial officer of Seller who is qualified to make such certification as presenting fairly the financial position and results of operations of Seller and its consolidated Subsidiaries and as having been prepared in accordance with GAAP consistently applied, in each case, subject to normal year-end audit adjustments;
(4) Reserved;
(5) Promptly upon becoming available, copies of all financial statements, reports, notices and proxy statements sent by Seller or any of Seller’s consolidated Subsidiaries in a general mailing to their respective stockholders and of all reports and other material (including copies of all registration statements under the Securities Act of 1933, as amended) filed by any of them with any securities exchange or with the SEC or any governmental authority succeeding to any or all of the functions of the SEC;
(6) Promptly upon becoming available, copies of any annual and quarterly financial reports that Seller may be required to file with the SEC or any federal banking agency, or any report which Seller may be required to file with the SEC or any federal banking agency containing such financial statements and other information concerning Seller’s business and affairs as is required to be included in such reports in accordance with the rules and regulations of the SEC or such federal banking agency, as may be promulgated from time to time;
(7) Such supplements to the aforementioned documents and such other information regarding the operations, business, affairs and financial condition of Seller’s Parent Company, Seller or any of Seller’s consolidated Subsidiaries as Purchaser or Agent may reasonably request.
Seller’s obligation to deliver any report or other document under this 14(g)(i)(A). shall be deemed to have been satisfied if, and as of the date, such report or other document is filed with the SEC pursuant to the SEC’s Electronic Data Gathering & Analysis Recovery system.
(8) The audited annual financial statements of Seller or the notes thereto or other opinions or conclusions stated therein shall not be qualified or limited by reference to the status of Seller as a “going concern” or a reference of similar import nor shall indicate that such Seller has a negative net worth or is insolvent.
(B) Reserved.
(C) Other Information. Upon the request of Purchaser or Agent, such other information or reports as Purchaser or Agent may from time
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to time reasonably request; provided, however, such request will not cause Seller any undue material expense.
(ii) Seller shall at all times comply with the financial covenants sets forth in Section 4 of the Pricing Side Letter.
(iii) Certifications. Seller shall execute and deliver a certification (A) substantially in the form of Exhibit A-1 attached hereto within thirty (30) days after the end of each of the first two calendar months of each fiscal quarter of Seller, and (B) substantially in the form of Exhibit A-2 attached hereto within (x) forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of Seller, and (y) ninety (90) days after the end of each fiscal year of Seller. Each certification to be executed and delivered hereunder shall be sent via electronic mail to creditsecuritizedp1@barclayscapital.com or such other email address as the Agent may furnish to the Seller from time to time by written notice.
(h) Agency Reporting. Seller shall comply with the applicable reporting requirements of each Agency Guide and HUD.
(i) Notice of Material Events. To the extent not otherwise prohibited from disclosing, Seller shall promptly inform Purchaser and Agent in writing of any of the following of which any Responsible Officer is aware:
(i) any Default, Event of Default by Seller of any material obligation under any Program Document or any Servicer Termination Event,;
(ii) any material adverse change in the insurance coverage of Seller as required to be maintained pursuant to Section 14(q) hereof, with copy of evidence of same attached;
(iii) the commencement of, or any determination in, any material dispute, litigation, investigation, proceeding, sanctions or suspension between Seller, on the one hand, and any Governmental Authority or any other Person, on the other (other than any investigation or proceeding conducted in the ordinary course of business by a state licensing authority) that is reasonably likely to have a Material Adverse Effect;
(iv) any material change in accounting policies or financial reporting practices of Seller which could reasonably be expected to have a Material Adverse Effect;
(v) any event, circumstance or condition that has resulted, or has a reasonable likelihood of resulting in either a Material Adverse Change or a Material Adverse Effect with respect to Seller;
(vi) any material modifications to Seller’s underwriting or acquisition guidelines that relate to Mortgage Loans that are not Agency Mortgage Loans;
(vii) any changes to Seller’s corporate leverage covenant;
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(viii) any penalties, sanctions or charges levied, or threatened in writing to be levied, against Seller or any change, or change threatened in writing, in Approval status, or actions taken, or threatened in writing to be taken, against Seller by or disputes in writing between Seller and any Applicable Agency, or any supervisory or regulatory Governmental Authority (including, but not limited to HUD, FHA and VA) supervising or regulating the origination or servicing of mortgage loans by, or the issuer status of, Seller (which, in the event of a Governmental Authority, could reasonably be expected to have a Material Adverse Effect);
(ix) any Change in Control of Seller;
(x) upon Seller becoming aware of any termination or threatened termination by an Agency of the Custodian as an eligible custodian; or
(xi) change in Seller’s name, type of organization or jurisdiction of organization (or the organizational identification number, if any, issued by such jurisdiction to Seller), its chief place of business and chief executive office, as set forth in Section 13(s) and in the Master Netting Agreement, without at least ten (10) days’ prior written notice to Purchaser.
(j) Maintenance of Approvals. Seller shall take all commercially reasonable necessary actions to maintain its Approvals at all times during the term of this Agreement. If, for any reason, Seller ceases to maintain any such Approval, Seller shall notify Purchaser and Agent within one (1) Business Day.
(k) Maintenance of Licenses. Seller shall (i) maintain all licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Program Documents, (ii) remain in good standing to the extent required under, and comply in all material respects with, all laws of each state in which it conducts business or any Mortgaged Property related to a Purchased Mortgage Loan is located, and (iii) conduct its business strictly in accordance with applicable law, except in each case as would not be reasonably likely to have a Material Adverse Effect.
(l) Taxes, Etc. Seller shall pay and discharge or cause to be paid and discharged, when due all federal, state income and other material taxes, assessments and governmental charges or levies imposed upon it or upon its income and profits or upon any of its Property, real, personal or mixed (including without limitation, the Purchased Assets) or upon any part thereof, as well as any other lawful claims which, if unpaid, might become a Lien upon such properties or any part thereof, except for any such taxes, assessments and governmental charges, levies or claims as are appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are provided. Seller shall file or cause to be filed on a timely basis all federal, state income and other material tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it.
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(m) Nature of Business. Seller shall not make any material change in the nature of its business as carried on at the date hereof, it being understood that Seller may engage in business lines and transactions related to the mortgage banking and/or lending business or businesses ancillary to the mortgage banking and/or lending business and/or the servicing of Mortgage Loans.
(n) Limitation on Distributions. Seller shall have the right to pay dividends so long as such dividend distribution does not result in any breach of the financial covenants set forth in Section 4 of the Pricing Side Letter. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing, Seller shall not make any payment of any dividends or make distributions on account of, or set apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any capital stock, senior or subordinate debt of Seller or other equity interests, respectively, thereof, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or Property or in obligations of Seller.
(o) Use of Custodian. Without the prior written consent of Purchaser, Seller shall not use a third party custodian as document custodian other than the Custodian for the Mortgage File relating to the Purchased Mortgage Loans.
(p) Change of Control. Seller shall not, at any time, directly or indirectly (i) be subject to a Change in Control; (ii) form or enter into any partnership, joint venture, syndicate or other combination which would have a Material Adverse Effect with respect to Seller; or (iii) make any Material Adverse Change with respect to Seller.
(q) Insurance. Seller shall obtain and maintain insurance with responsible companies in such amounts and against such risks as are customarily carried by business entities engaged in similar businesses similarly situated, including without limitation, the insurance required to be obtained and maintained by each Agency pursuant to the Agency Guides, and will furnish Purchaser upon request full information as to all such insurance, and provide within fifteen (15) days after receipt of such request the certificates or other documents evidencing renewal of each such policy. Seller shall continue to maintain coverage, for itself and its Subsidiaries, that encompasses employee dishonesty, forgery or alteration, theft, disappearance and destruction, robbery and safe burglary, Property (other than money and securities), and computer fraud in an aggregate amount of at least such amount as is required by each Agency.
(r) Affiliate Transaction. Seller shall not, at any time, directly or indirectly, sell, lease or otherwise transfer any Property or assets to, or otherwise acquire any Property or assets from, or otherwise engage in any transactions with, any of its Affiliates, if such transaction is material to such parties in the aggregate, unless the terms thereof are no less favorable to Seller, than those that could be obtained at the time of such transaction in an arm’s length transaction with a Person who is not such an Affiliate.
(s) Change of Fiscal Year. Seller shall not, at any time, directly or indirectly, except upon ninety (90) days’ prior written notice to Purchaser, change the date on which its fiscal year begins from its current fiscal year beginning date.
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(t) Transfer of Servicing Rights, Servicing Files and Servicing. With respect to the Servicing Rights of each Purchased Mortgage Loan, Seller shall transfer such Servicing Rights to Purchaser or its designee on the related Purchase Date. With respect to the Servicing Files and the physical and contractual servicing of each Purchased Mortgage Loan to the extent in the possession of Seller, Seller shall deliver such Servicing Files and the physical and contractual servicing to Purchaser or its designee upon the expiration of the Servicing Term unless either such Servicing Term is renewed by Purchaser or the termination of the Seller as servicer pursuant to Section 16. Seller’s transfer of the Servicing Rights, Servicing Files and the physical and contractual servicing under this Section shall be in accordance with customary standards in the industry including the transfer of the gross amount of all escrows, if any, held for the related Mortgagors (without reduction for unreimbursed advances or “negative escrows”).
(u) Audit and Approval Maintenance. Seller shall (i) at all times maintain copies of relevant portions of all final written Agency audits, examinations, evaluations, monitoring reviews and reports of its origination and servicing operations (including those prepared on a contract basis for any such agency) in which there are material adverse findings, including without limitation notices of defaults, notices of termination of approved status, notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non-renewal, and all necessary approvals from each Agency, (ii) unless prohibited from disclosing, promptly upon request provide Agent with copies of such audits, examinations, evaluations, monitoring reviews and reports promptly upon receipt from any Agency or agent of any Agency, and (iii) take all actions necessary to maintain its respective Approvals.
(v) MERS. The Seller is a member of MERS in good standing and current in the payment of all fees and assessments imposed by MERS, and has complied with all rules and procedures of MERS. In connection with the assignment of any Purchased Mortgage Loan registered on the MERS system, the Seller agrees that at the Seller’s own cost and expense, it shall (i) with respect to any Correspondent Loan, identify Purchaser in the field “interim funder” on the MERS system within ten (10) calendar days of the related Purchase Date and (ii) with respect to all Purchased Mortgage Loans, promptly cause the MERS Systemsystem to indicate that such Mortgage Loan has been transferred to the Purchaser in accordance with the terms of this Agreement by including in MERS’ computer files (A) the code in the field which identifies the specific owner of the Purchased Mortgage Loans and (B) the code in the field “Pool Field” which identifies the series in which such Mortgage Loans were sold. The Seller further agrees that it will not alter codes referenced in this paragraph with respect to any Purchased Mortgage Loan at any time that such Mortgage Loan is subject to this Agreement, and the Seller shall retain its membership in MERS at all times during the term of this Agreement.
(w) Fees and Expenses. Seller shall timely pay to Purchaser all fees and actual out of pocket expenses as set forth in the Pricing Side Letter.
(x) Agency Status. Once the Seller or any of its subservicers has obtained any status with an Agency’s mortgage loan pool for which Seller is issuer or servicer, Seller shall not take or omit to take any action that (i) would result in the suspension or loss of any of such status, or (ii) after which Seller or any such relevant subservicer would no longer be in good standing with
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respect to such status, or (iii) after which Seller or any such relevant subservicer would no longer satisfy all applicable Agency net worth requirements, if both (x) all of the material effects of such act or omission shall not have been cured by Seller or waived by the applicable Agency before termination of such status and (y) the termination of such status could reasonably be expected to have a Material Adverse Effect.
(y) Further Documents. Seller shall, upon request of Purchaser or Agent, promptly execute and deliver to Purchaser or Agent all such other and further documents and instruments of transfer, conveyance and assignment, and shall take such other action as Purchaser or Agent may require in good faith to more effectively transfer, convey, assign to and vest in Purchaser and to put Purchaser in possession of the Property to be transferred, conveyed, assigned and delivered hereunder and otherwise to carry out more effectively the intent of the provisions under this Agreement.
(z) Due Diligence. Seller will permit Purchaser, Agent or their respective agents or designees to perform due diligence reviews on the Mortgage Loans subject to each Transaction hereunder within thirty (30) days following the related Purchase Date. Seller shall cooperate in all respects with such diligence and shall provide Purchaser, Agent or their respective agents or designees with all loan files and other information (including, without limitation, Seller’s quality control procedures and results) reasonably requested by Purchaser, Agent or their respective agents or designees and shall bear all costs and expenses associated with such due diligence.
(aa) Event of Insolvency. Neither Seller nor any of its Affiliates or Subsidiaries, shall take any corporate action in furtherance of, or any action which would result in any an Event of Insolvency.
(bb) Non-Utilization Fee. Seller shall pay to Purchaser the due and owing portion of the Non-Utilization Fee if and as required under Section 2 of the Pricing Side Letter; provided that Purchaser may, in its sole discretion, net any Non-Utilization Fee from the proceeds of any Purchase Price paid by Purchaser to Seller to the extent such amounts were not otherwise received by Purchaser in accordance with this clause (bb).
15. REPURCHASE OF PURCHASED ASSETS
Upon discovery by Seller of a breach of any of the representations and warranties set forth on Exhibit B to this Agreement, Seller shall give prompt written notice thereof to Purchaser. Upon any such discovery by Purchaser, Purchaser will notify Seller. It is understood and agreed that the representations and warranties set forth in Exhibit B to this Agreement with respect to the Purchased Assets shall survive delivery of the respective Mortgage Files to the Purchaser or Custodian with respect to the Purchased Assets and shall inure to the benefit of Purchaser. The fact that Purchaser has conducted or has failed to conduct any partial or complete due diligence investigation in connection with its purchase of any Purchased Asset shall not affect Purchaser’s right to demand repurchase or any other remedy as provided under this Agreement. Seller shall, within five (5) Business Days of the earlier of Seller’s discovery or receipt of notice by a Responsible Officer of Seller with respect to any Purchased Asset of (i) any breach of a representation or warranty contained in Exhibit B of this Agreement or (ii) any
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failure to deliver any of the items required to be delivered as part of the Mortgage File within the time period required for delivery pursuant to the Custodial and Disbursement Agreement, promptly cure such breach or delivery failure in all material respects. If within five (5) Business Days after the earlier of Seller’s discovery of such breach or delivery failure or receipt of notice thereof that such breach or delivery failure has not been remedied by Seller, Seller shall promptly upon receipt of written instructions from Purchaser, at Purchaser’s option, repurchase such Purchased Asset at a purchase price equal to the Repurchase Price with respect to such Purchased Asset by wire transfer to the account designated by Purchaser.
16. SERVICING OF THE MORTGAGE LOANS; SERVICER TERMINATION
(a) Subservicing.
(i) Upon payment of the Purchase Price, Purchaser shall own the servicing rights related to the Purchased Mortgage Loans including the Mortgage File related to such Purchased Mortgage Loans. Seller and Purchaser each agrees and acknowledges that the Mortgage Loans sold hereunder shall be sold to Purchaser on a servicing released basis, and that Purchaser is engaging and hereby does engage Seller to provide subservicing of each such Mortgage Loan for the benefit of Purchaser; provided that with respect to one or more Purchased Mortgage Loans, a Servicer other than the Seller may subservice the Mortgage Loans for the benefit of Purchaser.
(ii) So long as a Purchased Mortgage Loan is outstanding, Seller shall neither assign, encumber or pledge its obligation to subservice such Mortgage Loans in whole or in part, nor delegate its rights or duties under this Agreement (to other than a subservicer) without the prior written consent of Purchaser, the granting of which consent shall be in the sole discretion of Purchaser. Seller hereby acknowledges and agrees that (i) Purchaser is entering into this Agreement in reliance upon Seller’s representations as to the adequacy of its financial standing, servicing facilities, personnel, records, procedures, reputation and integrity, and the continuance thereof; and (ii) Seller’s engagement hereunder to provide mortgage servicing for the benefit of Purchaser is intended by the parties to be a “personal service contract” and Seller is hereunder intended by the parties to be an “independent contractor”.
(iii) Servicer shall subservice and administer the Mortgage Loans it is subservicing on behalf of Purchaser in accordance with Accepted Servicing Practices. Servicer shall have no right to modify or alter the terms of any such Mortgage Loan or consent to the modification or alteration of the terms of any such Mortgage Loan except in Strict Compliance with the related Agency Program. Servicer shall at all times maintain accurate and complete records of its servicing of the Mortgage Loans it is subservicing on behalf of Purchaser, and Agent may, at any time during Servicer’s business hours on reasonable notice, examine and make copies of such Servicing Records. Seller agrees that Purchaser is the 100% beneficial owner of all Servicing Records relating to the Mortgage Loans. Seller covenants to hold or cause to be held such Servicing Records for the benefit of Purchaser and to safeguard such Servicing
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Records and to deliver them promptly to Agent or its designee (including the Custodian) at Agent’s request or otherwise as required by operation of this Section 16.
(b) Servicing Term. Servicer shall subservice such Mortgage Loans on behalf of Purchaser for a term commencing as of the related Purchase Date and ending on the last day of the calendar month following the calendar month in which such Purchase Date occurs, which term may be extended in writing on a monthly basis by the Purchaser in its sole discretion, for an additional calendar month period (each, a “Servicing Term”); provided, that Purchaser shall have the right to immediately terminate the Servicer at any time following the occurrence of any event described in Section 16(i) hereof (a “Servicer Termination Event”) that is continuing. If such Servicing Term is not extended by Purchaser or if Purchaser has terminated Servicer as a result of a Servicer Termination Event, Servicer shall transfer such servicing to Purchaser or its designee at no cost or expense to Purchaser as provided in Section 14(t). Servicer shall hold or cause to be held all Escrow Payments collected with respect to the Mortgage Loans it is subservicing on behalf of Purchaser in segregated accounts for the sole benefit of the Mortgagors and shall apply the same for the purposes for which such funds were collected. If Servicer should discover that, for any reason whatsoever, it has failed to perform fully its servicing obligations in any material respect with respect to the Mortgage Loans it is subservicing on behalf of Purchaser, Seller shall promptly notify Purchaser.
(c) Servicing Reports. As requested by Purchaser from time to time, Seller shall furnish to Purchaser reports in form and scope satisfactory to Purchaser, setting forth (i) data regarding the performance of the individual Purchased Mortgage Loans, (ii) a summary report of all Mortgage Loans serviced by the Seller and originated pursuant to an Agency Guide, HUD and/or FHA guidelines (on a portfolio basis), in each case, for the immediately preceding month, including, without limitation, all collections, delinquencies, defaults, defects, claim rates, losses and recoveries, and (iii) any other information reasonably requested by Purchaser.
(d) Backup Servicer. The Agent, in its sole discretion, may appoint a backup servicer at any time during the term of this Agreement. In such event, Seller shall commence monthly delivery to such backup servicer of the servicing information required to be delivered to Purchaser pursuant to Section 16(c) hereof and any other information reasonably requested by backup servicer, all in a format that is reasonably acceptable to such backup servicer. All costs and expenses of such backup servicer, including, but not limited to all fees of such backup servicer in connection with the processing of such information and the maintenance of a servicing file with respect to the Purchased Mortgage Loans, shall be an expense of (i) the Purchaser, prior to the occurrence and continuance of an Event of Default and (ii) the Seller, upon the occurrence and during the continuation of an Event of Default. Seller shall cooperate fully with such backup servicer in the event of a transfer of servicing hereunder and will provide such backup servicer with all documents and information necessary for such backup servicer to assume the servicing of the Purchased Mortgage Loans.
(e) Collection Account. Prior to the Effective Date, Seller shall establish and maintain a separate account (the “Collection Account”) with the Bank in the Agent’s name for the sole and exclusive benefit of the Purchaser. Such account shall be subject to the Collection
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Account Control Agreement. Servicer shall deposit or credit to the Collection Account all amounts collected on account of the Mortgage Loans no more than sixty (60) days after the Effective Date, and thereafter, within two (2) Business Days of receipt, and remit such collections in accordance with Section 16(f) hereof. Following the occurrence and during the continuance of an Event of Default, such amounts shall be deposited or credited irrespective of any right of setoff or counterclaim arising in favor of Seller (or any third party claiming through it) under any other agreement or arrangement. Amounts on deposit in the Collection Account shall be distributed as provided in Section 16(f).
(f) Income Payments.
(i) Where a particular term of a Transaction extends over the date on which Income is paid in respect of any Purchased Asset subject to that Transaction, (i) Seller shall deposit or cause to be deposited such Income into the Collection Account no later than sixty (60) days after the Effective Date and thereafter, no later than two (2) Business Days after receipt thereof, and (ii) such Income shall be the Property of Purchaser subject to subsections 16(f)(ii) and (iii) below. The Collection Account shall be subject to the terms and conditions of the Collection Account Control Agreement.
(ii) Except as otherwise provided in Section 16(f)(iv), on the Monthly Payment Date after the occurrence and during the continuance of a Default or an Event of Default, Purchaser shall cause amounts deposited in the Collection Account to be released to Seller, which amounts shall be applied by Seller (A) to reduce outstanding Price Differential due and payable in respect of Purchased Assets for which Purchaser has received the related Repurchase Price (other than Price Differential) pursuant to Section 3(g) during the prior calendar month, (B) to reduce the Repurchase Price for all outstanding Transactions, (C) to pay all other Obligations then due and payable to Purchaser and (D) to pay to Seller any remaining amounts.
(iii) Notwithstanding anything herein or in the Collection Account Control Agreement to the contrary, Purchaser shall in no event cause amounts deposited in the Collection Account to be released to Seller to the extent that such action would result in the creation of a Margin Deficit (unless prior thereto or simultaneously therewith Seller cures such Margin Deficit in accordance with Section 7), or if an Event of Default is then continuing. Further, if an uncured Margin Deficit exists as of such Monthly Payment Date, Purchaser shall cause the Bank to disburse the Income related to the Transaction for which the Margin Deficit exists to Purchaser (up to the amount of such Margin Deficit), which amounts shall be applied by Purchaser to reduce the related Repurchase Price.
(iv) If a successor servicer takes delivery of such Mortgage Loans either under the circumstances set forth in Section 16(i) or otherwise, all amounts deposited in the Collection Account shall be paid to Purchaser promptly upon such delivery.
(g) FHA Buyout Loans. With respect to each FHA Buyout Loan, (i) Seller shall deposit FHA claims payments on such FHA Buyout Loan into the Collection Account within
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two (2) Business Days of receipt and (ii) Seller shall service such FHA Buyout Loan in Strict Compliance with all FHA requirements.
(h) Reserved.
(i) Servicer Termination. Purchaser, in its sole discretion, may terminate Servicer’s rights and obligations as subservicer of the affected Mortgage Loans that it is subservicing on behalf of Purchaser and require Servicer to deliver the related Servicing Records to Purchaser or its designee upon the occurrence of (i) an Event of Default has occurred and is continuing or (ii) upon the expiration of the Servicing Term as set forth in Section 16(b) by delivering written notice to Seller and Servicer requiring such termination. Such termination shall be effective upon a Responsible Officer of Seller’s receipt of such written notice; provided, that Servicer’s subservicing rights shall be terminated immediately upon the occurrence a Servicer Termination Event, regardless of whether notice of such event shall have been given to or by Purchaser or Seller. Upon any such termination, all authority and power of Servicer respecting its rights to subservice and duties under this Agreement relating thereto, shall pass to and be vested in the successor servicer appointed by Purchaser and Purchaser is hereby authorized and empowered to transfer such rights to subservice the Mortgage Loans for such price and on such terms and conditions as Purchaser shall reasonably determine. Seller shall promptly take such actions and furnish to Purchaser such documents that Purchaser deems necessary or appropriate to enable Purchaser to enforce such Mortgage Loans and shall perform all acts and take all actions so that the Mortgage Loans and all files and documents relating to such Mortgage Loans held by Servicer, together with all escrow amounts relating to such Mortgage Loans, are delivered to successor Servicer, including but not limited to preparing, executing and delivering to the successor Servicer any and all documents and other instruments, placing in the successor Servicer’s possession all Servicing Records pertaining to such Mortgage Loans and doing or causing to be done, all at Seller’s sole expense. To the extent that the approval of the Applicable Agency is required for any such sale or transfer, Seller shall fully cooperate with Purchaser to obtain such approval. All amounts paid by any purchaser of such rights to service or subservice the Mortgage Loans shall be the property of Purchaser. The subservicing rights required to be delivered to successor Servicer in accordance with this Section 16(i) shall be delivered free of any servicing rights in favor of Seller or any third party (other than Purchaser) and free of any title, interest, lien, encumbrance or claim of any kind of Seller other than record title to the Mortgages relating to the Mortgage Loans and the right and obligation to repurchase the Mortgage Loans hereunder. No exercise by Purchaser of its rights under this Section 16(i) shall relieve Seller of responsibility or liability for any breach of this Agreement.
(j) Conflicts. For the avoidance of doubt, if a Servicer Side Letter conflicts with any provision set forth in this Section 16, the applicable Servicer Side Letter shall control with respect to such provision.
17. EVENTS OF DEFAULT
With respect to any Transactions covered by or related to this Agreement, the occurrence of any of the following events shall constitute an “Event of Default”:
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(a) Seller fails to transfer the Purchased Assets to the Purchaser on the applicable Purchase Date (provided the Purchaser has tendered the related Purchase Price and Seller has not repaid such Purchase Price on the same day as such tender);
(b) Seller either fails to repurchase the Purchased Assets on the applicable Repurchase Date or fails to perform its obligations under Section 7 (including, without limitation, the failure to timely cure a Margin Deficit) or the last sentence of Section 15;
(c) Seller shall fail to (i) remit to Purchaser when due any payment required to be made under the terms of this Agreement, any of the other Program Documents or any other contracts or agreements delivered in connection herewith or therewith, or (ii) perform, observe or comply with any material term, condition, covenant or agreement contained in this Agreement or any of the other Program Documents (other than the other “Events of Default” set forth in this Section 17) or any other contracts or agreements delivered in connection herewith or therewith, and such failure is not cured within the time period expressly provided for therein, or, if no such cure period is provided, within [***] of the earlier of (x) a Responsible Officer of Seller’s receipt of written notice from Purchaser or Custodian of such breach or (y) the date on which Seller obtains notice or knowledge of the facts giving rise to such breach;
(d) Any representation or warranty made by Seller (or any of Seller’s officers) in the Program Documents or in any other document delivered in connection therewith, or in any other contract or agreement, shall have been incorrect or untrue in any material respect when made or repeated or deemed by of the terms thereof to have been incorrect or untrue in any material respect when made or repeated and, if curable, is not cured within [***] (other than the representations or warranties in Section 13(m) or Exhibit B which shall be considered solely for the purpose of determining whether the related Purchased Asset is an Eligible Mortgage Loan, unless (i) Seller shall have made any such representation or warranty with the knowledge that it was materially false or misleading at the time made or repeated or deemed to have been made or repeated, or (ii) any such representation or warranty shall have been determined by Purchaser in its sole discretion to be materially false or misleading on a regular basis);
(e) Seller or any of its Affiliates or Subsidiaries, as applicable, shall be in default under any Other Agreement beyond any applicable cure period;
(f) Any Event of Insolvency of Seller or any of its Affiliates;
(g) Any final judgment or order for the payment of money in excess of [***] in the aggregate (to the extent that it is, in the reasonable determination of Purchaser, uninsured and provided that any insurance or other credit posted in connection with an appeal shall not be deemed insurance for these purposes) shall be rendered against Seller or any of its Affiliates by one or more courts, administrative tribunals or other bodies having jurisdiction over them and the same shall not be discharged (or provisions shall not be made for such discharge) satisfied, or bonded, or a stay of execution thereof shall not be procured, within [***] from the date of entry thereof and Seller or any of its Affiliates, as applicable, shall not, within said period of [***], or such longer period during which execution of the same shall have been stayed or bonded, appeal therefrom and cause the execution thereof to be stayed during such appeal;
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(h) Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority (i) shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Seller, or shall have taken any action to displace the management of Seller or to curtail its authority in the conduct of the business of Seller, or (ii) takes any action in the nature of enforcement to remove, limit or restrict the approval of Seller as an issuer, purchaser or a seller/servicer of Purchased Mortgage Loans or securities backed thereby;
(i) Seller, shall fail to comply with any of the financial covenants set forth in Section 4 of the Pricing Side Letter;
(j) Any Material Adverse Effect shall have occurred and not have been waived;
(k) Neither of the following is true: This Agreement shall for any reason cease to create a valid first priority security interest or ownership interest upon transfer in any material portion of the Purchased Assets purported to be covered hereby;
(l) A Change in Control of Seller shall have occurred that has not been approved by Agent;
(m) Purchaser or Agent shall reasonably request, specifying the reasons for such request, reasonable information, and/or written responses to such requests, regarding the financial well-being of Seller, and such reasonable information and/or responses shall not have been provided within [***] of such request; provided that, for the avoidance of doubt, any requests by PurchasePurchaser of documents included in or required to be included in the Mortgage File shall not be subject to this subsection (m);
(n) A material event of default shall have occurred and be continuing beyond the expiration of any applicable cure periods under any of the Program Documents;
(o) Seller ceases to be a member of MERS in good standing (unless MERS is no longer acting in such capacity) for any reason at any time Seller is servicing MERS Designated Mortgage Loans;
(p) Change of Servicer without consent of the Agent;
(q) [Reserved];
(r) Failure of Seller to meet the qualifications to maintain all requisite Approvals, such Approvals are revoked or such Approvals are materially and adversely modified;
(s) [Reserved]; or
(t) Seller and its Affiliates fail to operate or conduct their business operations or any material portion thereof in the ordinary course.
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18. REMEDIES
Upon the occurrence of (i) an Event of Default that is continuing (other than that referred to in Section 17(f)), the Purchaser, at its option, shall have the right to exercise any or all of the following rights and remedies and (ii) an Event of Default referred to in Section 17(f), the following rights and remedies shall immediately and automatically take effect without any further action by any Person.
(a) (i) The Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). Seller’s Obligations hereunder, to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date in such Transactions shall thereupon become immediately due and payable; all Income paid after such exercise or deemed exercise shall be remitted to and retained by Purchaser and applied to the aggregate Repurchase Prices and any other amounts owing by Seller hereunder; Seller shall immediately deliver to Purchaser or its designee any and all original papers, records and files relating to the Purchased Assets subject to such Transaction then in its possession and/or control; and all right, title and interest in and entitlement to such Purchased Assets and Servicing Rights thereon shall become property of Purchaser.
(ii) Purchaser may (A) sell, on or following the Business Day following the date on which the Repurchase Price becomes due and payable pursuant to Section 18(a)(i) without notice or demand of any kind, at a public or private sale and at such price or prices as Purchaser may reasonably deem satisfactory, any or all or portions of the Purchased Assets on a servicing-released or servicing-retained basis, as Purchaser may determine in its sole discretion and/or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller credit for such Purchased Assets (including credit for the Servicing Rights in respect of sales on a servicing-retained basis) in an amount equal to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder. Seller shall remain liable to Purchaser for any amounts that remain owing to Purchaser following a sale and/or credit under the preceding sentence. The proceeds of any disposition of Purchased Assets shall be applied first to the reasonable costs and expenses including but not limited to legal fees incurred by Purchaser in connection with or as a result of an Event of Default; second to costs of cover and/or related hedging transactions; third to the aggregate Repurchase Prices; fourth to all other Obligations; and fifth to Seller.
(iii) The parties recognize that it may not be possible to purchase or sell all of the Purchased Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Purchased Assets may not be liquid. In view of these characteristics of the Purchased Assets, the parties agree that liquidation of a Transaction or the underlying Purchased Assets does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made in a commercially reasonable manner. Accordingly, Purchaser may elect the
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time and manner of liquidating any Purchased Asset and nothing contained herein shall obligate Purchaser to liquidate any Purchased Asset upon the occurrence of an Event of Default or to liquidate all Purchased Assets in the same manner or on the same Business Day or shall constitute a waiver of any right or remedy of Purchaser. Notwithstanding the foregoing, the parties to this Agreement agree that the Transactions have been entered into in consideration of and in reliance upon the fact that all Transactions hereunder constitute a single business and contractual obligation and that each Transaction has been entered into in consideration of the other Transactions.
(iv) The Purchaser may terminate the Agreement.
(b) Seller hereby acknowledges, admits and agrees that Seller’s obligations under this Agreement are recourse obligations of Seller. In addition to its rights hereunder, upon the occurrence and continuation of an Event of Default, Purchaser shall have the right to proceed against any of Seller’s assets or the assets of any of Seller’s Affiliates or Subsidiaries, which may be in the possession of Purchaser, any of Purchaser’s Affiliates or their designee (including the Custodian), including the right to liquidate such assets and to set-off the proceeds against monies owed by Seller to Purchaser pursuant to this Agreement. Purchaser may set off cash, the proceeds of the liquidation of the Purchased Assets and Additional Purchased Mortgage Loans and all other sums or obligations owed by Purchaser to Seller or against all of Seller’s Obligations to Purchaser, or Seller’s obligations or the obligations of any of Seller’s Affiliates or Subsidiaries to Purchaser under any other agreement between the parties, or otherwise, whether or not such obligations are then due, without prejudice to Purchaser’s right to recover any deficiency.
(c) Purchaser shall have the right to obtain physical possession of the Records and all other files of Seller relating to the Purchased Assets and all documents relating to the Purchased Assets which are then or may thereafter come into the possession of Seller or any third party acting for Seller and Seller shall deliver to Purchaser such assignments as Purchaser shall request.
(d) Purchaser shall have the right to direct all Persons servicing the Purchased Assets to take such action with respect to the Purchased Assets as Purchaser determines appropriate, including, without limitation, using its rights under a power of attorney granted pursuant to Section 9(b) hereof.
(e) Purchaser shall, without regard to the adequacy of the security for the Obligations, be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession of and protect, collect, manage, liquidate, and sell the Purchased Assets or any portion thereof, collect the payments due with respect to the Purchased Assets or any portion thereof, and do anything that Purchaser is authorized hereunder to do. Seller shall pay all costs and expenses incurred by Purchaser in connection with the appointment and activities of such receiver, and such shall be deemed part of the Obligations hereunder.
(f) Purchaser may, at its option, enter into one or more hedging transactions covering all or a portion of the Purchased Assets, and Seller shall be responsible for all damages,
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judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against Purchaser relating to or arising out of such hedging transactions; including without limitation any losses resulting from such hedging transactions, and such shall be deemed part of the Obligations hereunder.
(g) In addition to all the rights and remedies specifically provided herein, Purchaser shall have all other rights and remedies provided by applicable federal, state, foreign and local laws, whether existing at law, in equity or by statute, including, without limitation, all rights and remedies available to a purchaser/secured party under the Uniform Commercial Code.
Except as otherwise expressly provided in this Agreement, Purchaser shall have the right to exercise any of its rights and/or remedies without presentment, demand, protest or further notice of any kind, other than as expressly set forth herein, all of which are hereby expressly waived by Seller.
Purchaser may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives, to the extent permitted by law, any right Seller might otherwise have to require Purchaser to enforce its rights by judicial process. Seller also waives, to the extent permitted by law, any defense Seller might otherwise have to the Obligations, or any guaranty thereof, arising from use of nonjudicial process, enforcement and sale of all or any portion of the Purchased Assets or from any other election of remedies. Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.
(h) Seller shall cause all sums received by it with respect to the Purchased Assets to be deposited in the Collection Account promptly upon receipt thereof but in no event later than two (2) Business Days thereafter. Seller shall be liable to Purchaser for the amount of all losses, costs and/or expenses (plus interest thereon at a rate equal to the Default Rate) that Purchaser may sustain or incur in connection with hedging transactions relating to the Purchased Assets, conduit advances and payments for mortgage insurance.
19. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE
No failure on the part of Purchaser to exercise, and no delay by Purchaser in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Purchaser of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All rights and remedies of Purchaser provided for herein are cumulative and in addition to any and all other rights and remedies provided by law, the Program Documents and the other instruments and agreements contemplated hereby and thereby, and are not conditional or contingent on any attempt by Purchaser to exercise any of its rights under any other related document. Purchaser may exercise at any time after the occurrence and during the continuation of an Event of Default one or more remedies permitted hereunder, as it so desires, and may thereafter at any time and from time to time exercise any other remedy or remedies permitted hereunder.
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20. USE OF EMPLOYEE PLAN ASSETS
No assets of an employee benefit plan subject to any provision of ERISA shall be used by either party hereto in a Transaction.
21. INDEMNITY
(a) Except as otherwise set forth herein to the contrary, Seller agrees to indemnify and hold harmless Purchaser, Agent and their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against (and will reimburse each Indemnified Party as the same is incurred within thirty (30) days following receipt of an invoice therefor) any and all claims, damages, losses, liabilities, taxes, increased costs and all other expenses including out-of-pocket expenses (including, without limitation, reasonable fees and expenses of outside counsel and audit and due diligence fees) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including without limitation, in connection with) (i) any investigation, litigation or other proceeding (whether or not such Indemnified Party is a party thereto) relating to, resulting from or arising out of any of the Program Documents and all other documents related thereto, any breach by Seller of any representation or warranty or covenant in this Agreement or any other Program Document, and all actions taken pursuant thereto, (ii) the Transactions, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated hereby, including, without limitation, any acquisition or proposed acquisition, or any indemnity payable under the servicing agreement or other servicing arrangement, (iii) the actual or alleged presence of hazardous materials on any Property or any environmental action relating in any way to any Property, (iv) the actual or alleged violation of any federal, state, municipal or local predatory lending laws, or (v) the reduction of the Principal Balance due to a cram down or similar action authorized by any bankruptcy proceeding or other case arising out of or relating to any petition under the Bankruptcy Code, in each case, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted directly from such Indemnified Party’s gross negligence or willful misconduct or is the result of a claim made by Seller against the Indemnified Party, and Seller is ultimately the successful party in any resulting litigation or arbitration. Notwithstanding the foregoing, it is understood and agreed that any indemnification relating to Taxes (and taxes expressly excluded from Taxes) shall be governed solely by Section 8; provided, however, that any breach by Seller of Section 13(l) or Section 14(l) of this Agreement shall be governed by this clause (a).
(b) Seller hereby agrees not to assert any claim against Purchaser or any of its Affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Program Documents, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
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(c) If Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, reasonable fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Purchaser, in its sole discretion and Seller shall remain liable for any such payments by Purchaser and such amounts shall be deemed part of the Obligations hereunder. No such payment by Purchaser shall be deemed a waiver of any of Purchaser’s rights under the Program Documents.
(d) Without prejudice to the survival of any other agreement of Seller hereunder, the covenants and obligations of Seller contained in this Section 21 shall survive the payment in full of the Repurchase Price and all other amounts payable hereunder and delivery of the Purchased Assets by Purchaser against full payment therefor.
22. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS
Seller hereby expressly waives, to the fullest extent permitted by law, every statute of limitation on a deficiency judgment, any reduction in the proceeds of any Purchased Assets as a result of restrictions upon Purchaser or Custodian contained in the Program Documents or any other instrument delivered in connection therewith, and any right that they may have to direct the order in which any of the Purchased Assets shall be disposed of in the event of any disposition pursuant hereto.
23. REIMBURSEMENT; SET-OFF
(a) Seller agrees to pay on demand all reasonable out-of-pocket costs and expenses of Purchaser in connection with the initial and subsequent negotiation, modification, renewal and amendment of the Program Documents (including, without limitation, (A) all collateral review and UCC search and filing fees and expenses and (B) the reasonable fees and expenses of outside counsel for Purchaser with respect to advising Purchaser as to its rights and responsibilities, or the perfection, protection or preservation of rights or interests, under this Agreement and any other Program Document, with respect to negotiations with Seller or with other creditors of Seller arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto). Subject to the caveat set forth in Section 3 of the Pricing Side Letter, Seller agrees to pay on demand, with interest at the Default Rate to the extent that an Event of Default has occurred and is continuing, all costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements (and fees and disbursements of Purchaser’s outside counsel) expended or incurred by Purchaser and/or Custodian in connection with the modification, renewal, amendment and enforcement (including any waivers) of the Program 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 Purchaser (without duplication to Purchaser) and/or Custodian pursuant thereto or by refinancing or restructuring in the nature of a “workout.” Further, Seller agrees to pay, with interest at the Default Rate to the extent that an Event of Default has occurred and is continuing, all costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements (and fees and disbursements of Purchaser’s outside counsel) expended or incurred by Purchaser in connection with (a) the
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rendering of legal advice as to Purchaser’s rights, remedies and obligations under any of the Program Documents, (b) the collection of any sum which becomes due to Purchaser under any Program Document, (c) any proceeding for declaratory relief, any counterclaim to any proceeding, or any appeal, or (d) the protection, preservation or enforcement of any rights of Purchaser. For the purposes of this Section 23(a), attorneys’ fees shall include, without limitation, fees incurred in connection with the following: (1) discovery; (2) any motion, proceeding or other activity of any kind in connection with a bankruptcy proceeding or case arising out of or relating to any petition under the Bankruptcy Code, as the same shall be in effect from time to time, or any similar law; (3) garnishment, levy, and debtor and third party examinations; and (4) post-judgment motions and proceedings of any kind, including without limitation any activity taken to collect or enforce any judgment. Any and all of the foregoing amounts referred to in this Section 23(a) shall be deemed a part of the Obligations hereunder. Without prejudice to the survival of any other agreement of Seller hereunder, the covenants and obligations of Seller contained in this Section 23(a) shall survive the payment in full of the Repurchase Price and all other amounts payable hereunder and delivery of the Purchased Assets by Purchaser against full payment therefor.
(b) In addition to any rights and remedies of Purchaser hereunder and at law, upon the occurrence and continuation of an Event of Default, Purchaser and its Affiliates shall have the right, without prior notice to Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law, upon any amount becoming due and payable (whether at the stated maturity, by acceleration or otherwise) by Seller hereunder or under any other agreement entered into between Seller or any of its Affiliates on the one hand, and Purchaser or any of its Affiliates on the other hand, to set-off and appropriate and apply against such amount any and all Property and deposits (general or special, time or demand, provisional or final), in any currency, or any other credits, indebtedness or claims, in any currency, or any other collateral (in the case of collateral not in the form of cash or such other marketable or negotiable form, by selling such collateral in a recognized market therefor or as otherwise permitted by law or as may be in accordance with custom, usage or trade practice), in each case, whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Purchaser or any Affiliate thereof to or for the credit or the account of Seller of any of its Affiliates except and to the extent that any of the same are held by Seller or such Affiliate for the account of another Person. Upon the occurrence and continuation of an Event of Default, Purchaser may also set-off cash and all other sums or obligations owed by Purchaser or its Affiliates to Seller or its Affiliates (whether under this Agreement or under any other agreement between the parties or between Seller or any of its Affiliates, on the one hand, and Purchaser or any of its Affiliates, on the other) against all of Seller’s obligations to Purchaser or its Affiliates (whether under this Agreement or under any other agreement between the parties or between Seller or any of its Affiliates, on the one hand, and Purchaser or any of its Affiliates, on the other), whether or not such obligations are then due. The exercise of any such right of set-off shall be without prejudice to Purchaser’s or its Affiliate’s right to recover any deficiency. Purchaser agrees to promptly notify Seller after any such set-off and application made by Purchaser; provided that the failure to give such notice shall not affect the validity of such set-off and application.
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24. FURTHER ASSURANCES
Seller agrees to do such further acts and things and to execute and deliver to Purchaser such additional assignments, acknowledgments, agreements, powers and instruments as are reasonably required by Purchaser to carry into effect the intent and purposes of this Agreement, to perfect the interests of Purchaser in the Purchased Assets or to better assure and confirm unto Purchaser its rights, powers and remedies hereunder.
25. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION
This Agreement supersedes and integrates all previous negotiations, contracts, agreements and understandings between the parties relating to a sale and repurchase of Purchased Assets and Additional Purchased Mortgage Loans, and it, together with the other Program Documents, and the other documents delivered pursuant hereto or thereto, contains the entire final agreement of the parties. No prior negotiation, agreement, understanding or prior contract shall have any validity hereafter.
26. TERMINATION
This Agreement shall remain in effect until the Termination Date. However, no such termination shall affect Seller’s outstanding obligations to Purchaser at the time of such termination. Seller’s obligations to indemnify Purchaser pursuant to this Agreement and the other Program Documents shall survive the termination hereof.
27. REHYPOTHECATION; ASSIGNMENT
(a) Purchaser may, in its sole election, and without the consent of the Seller engage in repurchase transactions with the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or otherwise convey the Purchased Assets with a counterparty of Purchaser’s choice, in all cases subject to Purchaser’s obligation to reconvey the Purchased Assets (and not substitutes therefor) on the Repurchase Date, all at no cost to the Seller. In the event Purchaser engages in a repurchase transaction with any of the Purchased Assets or otherwise pledges or hypothecates any of the Purchased Assets, Purchaser shall have the right to assign to Purchaser’s counterparty any of the applicable representations or warranties in Exhibit B to this Agreement and the remedies for breach thereof, as they relate to the Purchased Assets that are subject to such repurchase transaction.
(b) The Program Documents and the Seller’s rights and obligations thereunder are not assignable by Seller without the prior written consent of Purchaser. Any Person into which Seller may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which Seller shall be a party, or any Person succeeding to the business of Seller, shall be the successor of Seller hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Without any requirement for further consent of the Seller and at no cost or expense to the Seller, each of Purchaser and Agent may, in its sole election, assign or participate all or a portion of its rights and obligations under this Agreement and the Program Documents
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with a counterparty of Purchaser’s or Agent’s choice. Purchaser or Agent shall notify Seller of any such assignment and participation and shall maintain, for review by Seller upon written request, a register of assignees and participants and a copy of any executed assignment and acceptance by Purchaser or Agent and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. The Seller agrees that, for any such permitted assignment, Seller will cooperate with the prompt execution and delivery of documents reasonably necessary for such assignment process to the extent that Seller incurs no cost or expense that is not paid by the Purchaser or Agent, as applicable. Upon such assignment, (a) such assignee shall be a party hereto and to each Program Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Purchaser or Agent hereunder, and (b) Purchaser or Agent shall, to the extent that such rights and obligations have been so assigned by it to either (i) an Affiliate of Purchaser or Agent which assumes the obligations of Purchaser or Agent hereunder or (ii) to another Person which assumes the obligations of Purchaser or Agent hereunder, be released from their obligations hereunder accruing thereafter and under the Program Documents.
(c) Purchaser and Agent may distribute to any prospective assignee, participant or pledgee any document or other information delivered to Purchaser by Seller subject to the confidentiality restrictions contained in Section 35 hereof; accordingly, such prospective assignee, participant or pledgee shall be required to agree to confidentiality provisions similar to those set forth in Section 35.
28. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement nor any consent to any failure to comply herewith or therewith shall in any event be effective unless the same shall be in writing and signed by Seller, Purchaser and Agent, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
29. SEVERABILITY
If any provision of any Program Document is declared invalid by any court of competent jurisdiction, such invalidity shall not affect any other provision of the Program Documents, and each Program Document shall be enforced to the fullest extent permitted by law.
30. BINDING EFFECT; GOVERNING LAW
This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
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31. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS
EACH OF SELLER, PURCHASER AND AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PROGRAM DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF SELLER, PURCHASER AND AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS, ON BEHALF OF ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING. EACH OF SELLER, PURCHASER AND AGENT HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, NON-EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS. EACH OF SELLER, PURCHASER AND AGENT HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF A SUMMONS AND COMPLAINT AND OTHER PROCESS IN ANY ACTION, CLAIM OR PROCEEDING BROUGHT BY ANOTHER PARTY IN CONNECTION WITH THIS AGREEMENT OR THE OTHER PROGRAM DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS PROPERTY, IN THE MANNER SPECIFIED IN THIS SECTION 31 AND TO SUCH PARTY’S ADDRESS SPECIFIED IN SECTION 34 OR SUCH OTHER ADDRESS AS SUCH PARTY SHALL HAVE PROVIDED IN WRITING TO THE OTHER PARTIES HERETO. NOTHING IN THIS SECTION 31 SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO (I) SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW, OR (II) BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY OR ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTIONS.
32. SINGLE AGREEMENT
Seller, Purchaser and Agent acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, Seller, Purchaser and Agent each agree (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, and (ii) that payments, deliveries and other transfers made by any of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transaction hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.
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33. INTENT
(a) Seller, Purchaser and Agent intend and acknowledge that (i) this Agreement and each Transaction hereunder is a “repurchase agreement” as that term is defined in Section 101 of the Bankruptcy Code (except insofar as the type of assets subject to such Transaction or the term of such Transaction would render such definition inapplicable), a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code (except insofar as the type of assets subject to such Transaction or the term of such Transaction would render such definition inapplicable), a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code and a “qualified financial contract” as that term is defined in the Federal Deposit Insurance Act, as applicable (except insofar as the type of assets subject to such Transaction or the term of such Transaction would render such definition inapplicable); (ii) any payments or transfers of property made with respect to this Agreement or any Transaction (e.g., to satisfy a for example Margin Deficit) shall be considered a “margin payment” or “settlement payment” as such terms are defined in Bankruptcy Code Sections 741(5) and 741(8); (iii) each Purchased Asset constitutes either a “security,” “mortgage loan” or “an interest in a mortgage” as such terms are used in the Bankruptcy Code; and (iv) each grant of a security interest/pledge of the Purchased Assets in Section 8 constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” this Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Without limiting the generality of the foregoing, the parties recognize and intend that each Transaction is a “repurchase transaction” or “reverse repurchase transaction” of “mortgage loans” or “interests” in “mortgage loans” (as such terms are used in section 741(7) of the Bankruptcy Code). Each party hereto further agrees that it shall not challenge, and hereby waives to the fullest extent available under applicable law its right to challenge, the characterization of this Agreement or any Transaction hereunder as a “master netting agreement,” “repurchase agreement” and/or “securities contract” within the meaning of the Bankruptcy Code.
(b) Seller, Purchaser and Agent further intend and acknowledge that (i)(1) for so long as Purchaser is a “financial institution,” “financial participant” or another entity listed in Sections 555, 559, 561, 362(b)(6), 362(b)(7) or 362(b)(27) of the Bankruptcy Code, Purchaser shall be entitled to, without limitation, the liquidation, termination, acceleration, netting, set-off, and non-avoidability rights afforded to parties such as Purchaser to “repurchase agreements” pursuant to Sections 559, 362(b)(7) and 546(f) of the Bankruptcy Code, “securities contracts” pursuant to Sections 555, 362(b)(6) and 546(e) of the Bankruptcy Code, “master netting agreements” pursuant to Sections 561, 362(b)(27) and 546(j) of the Bankruptcy Code and “qualified financial contracts” pursuant to Section 1821(e)(8)(A)(i) of the Federal Deposit Insurance Act, as applicable, and (2) Purchaser’s right to liquidate the Purchased Assets delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to Section 18 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561 and Section 1821(e)(8)(A)(i) of the Federal Deposit Insurance Act, as amended (“FDIA”), as applicable, and (ii) Purchaser’s right to set-off claims and appropriate and apply any and all deposits of money or property or any other indebtedness at any time held or owing by
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Purchaser to or for the credit of the account of any Affiliate against and on account of the obligations and liabilities of Seller pursuant to Section 23 hereof is a contractual right as described in Bankruptcy Code Section 561. The parties hereby intend that any provisions hereof or in any other document, agreement or instrument that is related in any way to the servicing of the individual Mortgage Loans shall be deemed “related to” this Agreement within the meaning of Sections 101(38A)(A) and 101(47)(A)(v) of the Bankruptcy Code and part of the “contract” as such term is used in Section 741 of the Bankruptcy Code.
(c) The parties further agree that if a party hereto is an “insured depository institution” as such term is defined in the FDIA, then each Transaction hereunder is a “qualified financial contract” as that term is defined in the FDIA, and any rules, orders or policy statement thereunder.
(d) It is understood and agreed Seller, Purchaser and Agent by that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).
(e) Seller, Purchaser and Agent agree that this Agreement is intended to create mutuality of obligations among the parties, and as such, the Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.
34. NOTICES AND OTHER COMMUNICATIONS
Except as provided herein, all notices required or permitted by this Agreement shall be in writing (including without limitation by Electronic Transmission, email or facsimile) and shall be effective and deemed delivered only when received by the party to which it is sent; provided that notices of Events of Default and exercise of remedies or under Sections 6 or 18 shall be sent via overnight mail and by Electronic Transmission. Any such notice shall be sent to a party at the address, electronic mail or facsimile transmission number set forth below:
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if to Seller: Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: [***]
Telephone: [***]
E-mail: [***]
With copies to:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: Legal
E-mail: [***]
if to Purchaser: Barclays Bank PLC – Mortgage Finance
745 Seventh Avenue, 4th Floor
New York, New York 10019
Attention: [***]
Telephone: [***]
Facsimile: [***]
E-mail: [***]
With copies to:
Barclays Bank PLC – Legal Department
745 Seventh Avenue, 20th Floor
New York, New York 10019
Telephone: [***]
Facsimile: [***]
Barclays Capital – Operations
US-400 Jefferson Park
Whippany, New Jersey 07981
Attention: [***]
Telephone: [***]
E-mail: [***]
if to Agent: Barclays Bank PLC – Mortgage Finance
745 Seventh Avenue, 4th Floor
New York, New York 10019
Attention: [***]
Telephone: [***]
Facsimile: [***]
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E-mail: [***]
With copies to:
Barclays Bank PLC – Legal Department
745 Seventh Avenue, 20th Floor
New York, New York 10019
Telephone: [***]
Facsimile: [***]
Barclays Capital – Operations
US-400 Jefferson Park
Whippany, New Jersey 07981
Attention: [***]
Telephone: [***]
E-mail: [***]
or to such other address, e-mail address or facsimile number as either party may notify to the others in writing from time to time.
35. CONFIDENTIALITY
Seller, Purchaser and Agent each hereby acknowledge and agree that all written or computer-readable information provided by one party to the other in connection with the Program Documents or the Transactions contemplated thereby, including without limitation, Seller’s Mortgagor information in the possession of Purchaser (the “Confidential Terms”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except for (i) disclosure to Seller’s direct and indirect parent companies, directors, attorneys, auditors, taxing authorities, agents or accountants, provided that such parties likewise agree to be bound by this covenant of confidentiality, or are otherwise subject to confidentiality restrictions or (ii) with prior (if feasible) written notice to Purchaser, disclosure required by law, rule, regulation or order of a court or other regulatory body or (iii) with prior (if feasible) written notice to Purchaser, disclosure to any approved hedge counterparty to the extent necessary to obtain any Hedge Instrument hereunder or (iv) with prior (if feasible) written notice to Purchaser, any disclosures or filing required under Securities and Exchange Commission (“SEC”) or state securities’ laws; provided that in the case of clause (iv), Seller shall not file the Pricing Side Letter. Notwithstanding anything herein to the contrary, except as reasonably necessary to comply with applicable securities laws, each party (and each employee, representative, or other agent of each party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. For this purpose, tax treatment and tax structure shall not include (i) the identity of any existing or future party (or any Affiliate of such party) to this Agreement or (ii) any specific pricing information or other commercial terms, including the amount of any
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fees, expenses, rates or payments arising in connection with the transactions contemplated by this Agreement.
Notwithstanding anything in this Agreement to the contrary, Seller, Purchaser and Agent shall comply with all applicable local, state and federal laws, including, without limitation, all privacy and data protection law, rules and regulations that are applicable to the Purchased Assets and any applicable terms of this Agreement, including information relating to any Mortgage Loan that is not purchased hereunder and information relating to any other Mortgage Loans of Seller that is delivered to Purchaser or Agent by another lender under an intercreditor agreement or other agreement (the “Confidential Information”). Seller, Purchaser and Agent understand that the Confidential Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “GLB Act”), and each agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable federal and state privacy laws. Seller, Purchaser and Agent shall each implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the GLB Act) of the Mortgagors, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller, Purchaser and Agent shall notify the other party immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of the nonpublic personal information of any Mortgagor by providing notice directly to the other party.
36. DUE DILIGENCE
Purchaser, Agent or any of their respective agents, representatives or permitted assigns shall have the right, upon reasonable prior notice and during normal business hours, to conduct inspection and perform continuing due diligence reviews of (x) Seller and its Affiliates, directors, officers, employees and significant shareholders, including, without limitation, their respective financial condition and performance of its obligations under the Program Documents, and (y) the Servicing File and the Purchased Assets. Seller agrees promptly to provide Purchaser, Agent and their respective agents with access to, copies of and extracts from any and all documents, records, agreements, instruments or information (including, without limitation, any of the foregoing in computer data banks and computer software systems) relating to Seller’s respective business, operations, servicing, financial condition, performance of their obligations under the Program Documents, the documents contained in the Servicing Files or the Purchased Assets or assets proposed to be sold hereunder in the possession, or under the control, of Seller. In addition, Seller shall also make available to Purchaser and/or Agent, upon reasonable prior notice and during normal business hours, a knowledgeable financial or accounting officer of Seller for the purpose of answering questions respecting the Purchased Assets. Without limiting the generality of the foregoing, Seller acknowledges that Purchaser shall enter into Transactions with Seller based solely upon the information provided by Seller to Purchaser and/or Agent and the representations, warranties and covenants contained herein, and that Purchaser and/or Agent, at its option, shall have the right at any time to conduct itself or through its agents, or require Seller to conduct quality reviews and underwriting compliance reviews of the individual Mortgage
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Loans at the expense of Seller. Any such diligence conducted by Purchaser and/or Agent shall not reduce or limit the Seller’s representations, warranties and covenants set forth herein. Seller agrees to reimburse Purchaser and/or Agent for all reasonable out-of-pocket due diligence costs and expenses incurred pursuant to this Section 36.
37. USA PATRIOT ACT; OFAC AND ANTI-TERRORISM
Each of Purchaser and Agent hereby notifies the Seller that pursuant to the requirements of the USA PATRIOT Improvement and Reauthorization Act, Title III of Pub. L. 109-177 (signed into law March 9, 2009) (the “Act”), it is required to obtain, verify, and record information that identifies the Seller, which information includes the name and address of the Seller and other information that will allow each of Purchaser and Agent, as applicable, to identify the Seller in accordance with the Act. Seller hereby represents and warrants to each of Purchaser and Agent, and shall on and as of the Purchase Date for any Transaction and on and as of each date thereafter through and including the related Repurchase Date be deemed to represent and warrant to each of Purchaser and Agent that:
(a) (i) Neither the Seller, nor the Parent Company nor, to the Seller’s actual knowledge, any director, officer, or employee of the Seller or any of its subsidiaries is named on the list of Specifically Designated Nationals maintained by OFAC or any similar list issued by OFAC (collectively, the “OFAC Lists”) or is located, organized, or resident in a country or territory that is, or whose government is, the target of sanctions imposed by OFAC; (ii) no Person on the OFAC Lists owns an equity interest in, directly or indirectly, or otherwise controls, the Seller, the Parent Company; and (iii) to the knowledge of the Seller, neither the Purchaser nor Agent is precluded, under the laws and regulations administered by OFAC, from entering into this Agreement or any transactions pursuant to this Agreement with the Seller due to the ownership or control by any person or entity of stocks, shares, bonds, debentures, notes, drafts or other securities or obligations of the Seller.
(b) (i) Seller will not knowingly conduct business with or engage in any transaction with any Obligor that the Seller of a Purchased Asset knows, after reasonable due diligence, (x) is named on any of the OFAC Lists or is located, organized, or resident in a country or territory that is, or whose government currently is, the target of countrywide sanctions imposed by OFAC; (y) is owned, directly or indirectly, or otherwise controlled, by a Person named on any OFAC List; (ii) if the Seller obtains actual knowledge, after reasonable due diligence, that any Obligor is named on any of the OFAC Lists or that any Person named on an OFAC List owns an equity interest in, directly or indirectly, or otherwise controls, the Obligor, or the Seller, as applicable, Seller will give prompt written notice to the Purchaser and Agent of such fact or facts; and (iii) the Seller will (x) comply at all times with the requirements of the Economic and Trade Sanctions and Anti-Terrorism Laws applicable to any transactions, dealings or other actions relating to this Agreement, except to the extent such non-compliance does not result in a violation of applicable law by any of the Purchaser or Agent and (y) will, upon the Purchaser’s or Agent’s reasonable request from time to time during the term of
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this Agreement, deliver a certification confirming its compliance with the covenants set forth in this Section 37.
38. EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The parties agree that this Agreement, any documents to be delivered pursuant to this Agreement and any notices hereunder may be transmitted between them by email and/or by facsimile. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. The original documents shall be promptly delivered, if requested.
39. CONTRACTUAL RECOGNITION OF BAIL-IN
Seller acknowledges and agrees that notwithstanding any other term of this Agreement or any other agreement, arrangement or understanding with Purchaser, any of Purchaser’s liabilities, as the Bank of England (or any successor resolution authority) may determine, arising under or in connection with this Agreement may be subject to Bail-In Action and Seller accepts to be bound by the effect of:
(a) any Bail-In Action in relation to such liability, including (without limitation):
(i) a reduction, in full or in part, of any amount due in respect of any such liability;
(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, Seller; and
(iii) a cancellation of any such liability; and
(b) a variation of any term of this Agreement to the extent necessary to give effect to Bail-In Action in relation to any such liability.
40. CONTRACTUAL RECOGNITION OF UK STAY IN RESOLUTION
(a) Where a resolution measure is taken in relation to any BRRD undertaking or any member of the same group as that BRRD undertaking and that BRRD undertaking or any member of the same group as that BRRD undertaking is a party to this Agreement (any such party to this Agreement being an “Affected Party”), each other party to this Agreement agrees that it shall only be entitled to exercise any termination right under this Agreement against the Affected Party to the extent that it would be entitled to do so under the Special Resolution Regime if this Agreement were governed by the laws of any part of the United Kingdom.
(b) For the purpose of this Section 40, “resolution measure” means a ‘crisis prevention measure’, ‘crisis management measure’ or ‘recognised third-country resolution action’, each with the meaning given in the “PRA Rulebook: CRR Firms and Non-Authorised Persons: Stay in Resolution Instrument 2015”, as may be amended from time to time (the “PRA
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Contractual Stay Rules”), provided, however, that ‘crisis prevention measure’ shall be interpreted in the manner outlined in Rule 2.3 of the PRA Contractual Stay Rules; “BRRD undertaking”, “group”, “Special Resolution Regime” and “termination right” have the respective meanings given in the PRA Contractual Stay Rules.
41. NOTICE REGARDING CLIENT MONEY RULES.
Purchaser, as a CRD credit institution (as such term is defined in the rules of the Financial Conduit Authority (the “FCA”)), holds all money received and held by it hereunder as banker and not as trustee. Accordingly, money that is received and held by Purchaser from you will not be held in accordance with the provisions of the FCA’s Client Asset Sourcebook relating to client money (the “Client Money Rules”) and will not be subject to the statutory trust provided for under the Client Money Rules.
In particular, Purchaser shall not segregate money received by it from you from Purchaser money and Purchaser shall not be liable to account to you for any profits made by Purchaser use as banker of such cash and upon failure of Purchaser, the client money distribution rules within the Client Asset Sourcebook (the “Client Money Distribution Rules”) will not apply to these sums and so you will not be entitled to share in any distribution under the Client Money Distribution Rules.
42. REGISTER.
The Seller shall maintain at one of its U.S. offices a register for the recordation of the names and address of Purchaser and each assignee from time-to-time in respect of each Transaction and the Purchase Price, Pricing Rate, and Repurchase Price in respect of such Transaction (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Seller and the Purchaser shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Purchaser hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Seller and any Purchaser, at any reasonable time and from time to time upon reasonable prior notice.
43. BENCHMARK REPLACEMENT.
(a) The Pricing Rate used to calculate the Price Differential is determined by reference to LIBOR. LIBOR is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. On March 5, 2021, the FCA, the regulatory supervisor of LIBOR’s administrator, IBA, publicly announced the future cessation or loss of representativeness after June 30, 2023, of LIBOR. There is no assurance that the date announced by the FCA will not change or that the IBA, FCA or other regulators will not take further action that could impact the availability, composition, or characteristics of LIBOR or the currencies and/or tenors for which LIBOR is published. Each party to this Agreement should consult its own advisors to stay informed of any such developments. In light of this eventuality, public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of LIBOR. Under the circumstances set forth in this Section 43,
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this Section 43 provides a mechanism for determining the Benchmark Replacement. Agent will notify the Purchaser and the Seller as required by this Section 43. However, Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to LIBOR or other rates in the definition of LIBOR or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, any Benchmark Replacement or Benchmark Replacement Conforming Changes implemented pursuant to this Section 43, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the LIBOR or have the same volume or liquidity as did the LIBOR prior to its discontinuance or unavailability).
(b) If the then-current Benchmark is LIBOR, notwithstanding anything to the contrary herein or in any other Program Document, on the earlier of (i) the date that LIBOR has either permanently or indefinitely ceased to be provided by IBA or has been announced by the FCA pursuant to public statement or publication of information to be no longer representative and (ii) the Early Opt-in Effective Date, the Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Program Document in respect of any setting of such Benchmark on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Program Document.
(c) If the then-current Benchmark is a rate other than LIBOR, upon the occurrence of a Benchmark Transition Event, the Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder and under any Program Document in respect of any Benchmark setting at or after 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to Purchaser and Seller without any amendment to, or further action or consent of any other party to, this Agreement or any other Program Document so long as Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Purchaser. At any time that the administrator of the then-current Benchmark has permanently or indefinitely ceased to provide such Benchmark or such Benchmark has been announced by the regulatory supervisor for the administrator of such Benchmark pursuant to public statement or publication of information to be no longer representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored, the Seller may revoke any request for a Transaction to be made or continued that would bear interest by reference to such Benchmark until the Seller’s receipt of notice from Agent that a Benchmark Replacement has replaced such Benchmark.
(d) In connection with the implementation and administration of a Benchmark Replacement, Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Program Document, any amendments implementing such Benchmark Replacement
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Conforming Changes will become effective without any further action or consent of any other party to this Agreement.
(e) Agent will promptly notify Seller and Purchaser of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Benchmark Replacement Conforming Changes.
(f) Any determination, decision or election that may be made by Agent or Purchaser pursuant to this Section 43, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 43.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Seller, Agent and Purchaser have caused their names to be signed to this Master Repurchase Agreement by their respective officers thereunto duly authorized as of the date first above written.
| HOME POINT FINANCIAL CORPORATION, as Seller | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| BARCLAYS BANK PLC, as Purchaser and Agent | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
Signature Page to Master Repurchase Agreement
EXHIBIT A-1
MONTHLY CERTIFICATION
I, _______________________, _______________________ of Home Point Financial Corporation (the “Seller”), in accordance with that certain Master Repurchase Agreement (“Agreement”), dated as of August 14, 2020, by and between Barclays Bank PLC and Seller do hereby certify that:
(i) To the best of my knowledge, no Default or Event of Default has occurred and is continuing.
[Signature Page Follows]
A-1 - 1
Capitalized terms used but not defined herein have the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, I have signed this certificate.
Date: , 20[ ]
HOME POINT FINANCIAL CORPORATION
By:_________________________
Name:
Title:
Name:
Title:
A-1 - 2
EXHIBIT A-2
QUARTERLY CERTIFICATION
I, _______________________, _______________________ of Home Point Financial Corporation (the “Seller”), in accordance with that certain Master Repurchase Agreement (“Agreement”), dated as of August 14, 2020, by and between Barclays Bank PLC and Seller do hereby certify that:
(i) To the best of my knowledge, no Default or Event of Default has occurred and is continuing; and
(ii) Seller has complied with each of the covenants set forth in Section 4 of the Pricing Side Letter, as evidenced by the worksheet attached hereto as Schedule One.
[Signature Page Follows]
A-2 - 1
Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, I have signed this certificate.
Date: , 20[ ]
HOME POINT FINANCIAL CORPORATION
By:_________________________
Name:
Title:
Name:
Title:
A-2 - 2
SCHEDULE ONE TO EXHIBIT A
OTHER FINANCIAL COVENANTS
A-2 - 3
EXHIBIT B
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO MORTGAGE LOANS
WITH RESPECT TO MORTGAGE LOANS
Capitalized terms used but not defined in this Exhibit B have the meanings assigned to such terms in the Master Repurchase Agreement dated as of August 14, 2020 (the “Agreement”), by and between Barclays Bank PLC (“Purchaser” or “Agent”) and Home Point Financial Corporation (“Seller”). Seller hereby represents and warrants to the Purchaser and Agent that, for each Mortgage Loan as of the related Purchase Date and the related Repurchase Date and on each date that such Mortgage Loan is subject to a Transaction:
(a) All information provided to Purchaser by Seller, including without limitation the information set forth in the Seller Mortgage Loan Schedule, with respect to the Mortgage Loan is true and correct in all material respects;
(b) Such Mortgage Loan is an Eligible Mortgage Loan;
(c) Such Mortgage Loan was owned solely by Seller on the related Purchase Date, is not subject to any lien, claim or encumbrance, including, without limitation, any such interest pursuant to a loan or credit agreement for warehousing mortgage loans, and was originated, underwritten and serviced in either (A) Strict Compliance (with respect to Fannie Mae Mortgage Loans and Freddie Mac Mortgage Loans) or (B) compliance with Seller’s underwriting guidelines (with respect to Jumbo Mortgage Loans) with all applicable law and regulations, including without limitation the Federal Truth-in-Lending Act, the Real Estate Settlement Procedures Act, regulations issued pursuant to any of the aforesaid, and any and all rules, requirements, guidelines and announcements of each Agency, and, as applicable, the FHA, HUD and VA, as the same may be amended from time to time;
(d) The improvements on the land securing such Mortgage Loan are and will be kept insured at all times by responsible insurance companies reasonably acceptable to Purchaser and the Applicable Agency against fire and extended coverage hazards under policies, binders or certificates of insurance with a standard mortgagee clause in favor of Seller and its assigns, providing that such policy may not be canceled without prior notice to Seller. Any proceeds of such insurance shall be held in trust for the benefit of Purchaser. The scope and amount of such insurance shall satisfy the rules, requirements, guidelines and announcements of the Applicable Agency, and shall in all cases be at least equal to the lesser of (A) the principal amount of such Mortgage Loan or (B) the maximum amount permitted by applicable law, and shall not be subject to reduction below such amount through the operation of a coinsurance, reduced rate contribution or similar clause;
(e) Each Mortgage is a valid first lien on the Mortgaged Property and is covered by an attorney’s opinion of title acceptable to the Applicable Agency or by a policy of title insurance on a standard ALTA or similar lender’s form (or a binding commitment therefor) in favor of Seller and its assigns, subject only to exceptions permitted by the applicable Agency Program. Seller shall hold for the benefit of Purchaser such policy of title insurance (or the
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binding commitment therefor), and, upon request of Purchaser, shall immediately deliver such policy (or such commitment) to Purchaser or to the Custodian on behalf of Purchaser;
(f) Such Mortgage Loan is either (i) insured (or is otherwise eligible to be insured) by the FHA under the National Housing Act, guaranteed by the VA under the Servicemen’s Readjustment Act of 1944 or (ii) with respect to Fannie Mae Mortgage Loans and Freddie Mac Mortgage Loans, is otherwise eligible to be insured or guaranteed in accordance with the requirements of the applicable Agency Program and, in either case, such Mortgage Loan is not subject to any defect that would prevent recovery in full or in part against the FHA, VA or other insurer or guarantor, as the case may be;
(g) A mortgage identification number (“MIN”) has been assigned by MERS and such MIN is accurately provided on the Seller Mortgage Loan Schedule. Either the Mortgage is in favor of MERS or an Assignment of Mortgage to MERS has been duly and properly recorded;
(h) 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;
(i) Each Mortgage Loan (other than a Jumbo Mortgage Loan) is eligible for sale to the Applicable Agency and fully complies with all of the terms and conditions, including any covenants, representations and warranties, in the applicable Agency Guide and eligible for securitization by and/or sale to Fannie Mae or Freddie Mac or eligible for inclusion in a Ginnie Mae MBS pool;
(j) There are no restrictions, contractual or governmental, which would impair the ability of Seller from servicing the Mortgage Loans in any material respect;
(k) Such Mortgage Loan will not result in Negative Amortization;
(l) The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such “living trust” is in compliance with Applicable Agency guidelines for such trusts;
(m) Facsimile endorsement, if any, of the related Mortgage Note is permitted by the Applicable Agency and permissible in any applicable jurisdictions;
(n) 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. Such Mortgage Loan is in compliance with the anti-predatory lending eligibility for purchase requirements of the Fannie Mae Guide;
(o) At origination the related Mortgagor’s FICO Score was equal to or greater than [***] (for this purpose, it being acknowledged that the related Mortgagor shall be deemed to have a FICO Score of zero where no FICO Score is available) unless it is a part of an FHA
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Streamline or VA IRRRLs (Interest Rate Reduction Loan) program for which a current FICO Score is not required for credit purposes;
(p) If such Mortgage Loan was pledged to another warehouse, credit, repurchase or other financing facility immediately prior to the related Purchase Date, then (i) such pledge has been released immediately prior to, or concurrently with, the related Purchase Date hereunder and (ii) Purchaser has received a Warehouse Lender’s Release in respect of such Mortgage Loan;
(q) [RESERVED];
(r) [RESERVED];
(s) [RESERVED];
(t) Such Mortgage Loan is a MERS Designated Mortgage Loan;
(u) [RESERVED];
(v) With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing by Seller to hold the related Mortgage File as agent and bailee for Purchaser or Agent and to promptly forward such Mortgage File in accordance with the provisions of the Custodial and Disbursement Agreement and the Escrow Instruction Letter (if applicable);
(w) [RESERVED];
(x) Each Mortgage Loan (other than Agency Renovation Mortgage Loans) has been fully disbursed and is secured by a first lien on an underlying property as a “closed-end” Mortgage Loan with no further disbursements required by any party;
(y) [RESERVED];
(z) The Mortgage Loan is not secured by property located in a state where the Seller is not licensed as a lender/mortgage banker;
(aa) The Mortgage Loan has not been converted to an ownership interest in real property through foreclosure or deed-in-lieu of foreclosure;
(bb) The Mortgage Loan relates to Mortgaged Property that consists of (i) a detached single family dwelling, (ii) a two-to-four family dwelling, (iii) a one-family dwelling unit in a Freddie Mac eligible condominium project, (iv) a townhouse, or (v) a detached single family dwelling in a planned unit development none of which is a cooperative or commercial property; and is not related to Mortgaged Property that consists of (a) mixed use properties, (b) log homes, (c) earthen homes, (d) underground homes, (e) mobile homes (whether or not secured by real property), (f) any dwelling situated on more than ten acres of property or (h) any dwelling situated on a leasehold estate;
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(cc) Such Mortgage Loan is not a Restricted Mortgage Loan;
(dd) Other than with respect to any MERS Designated Mortgage Loan, Seller has submitted the original Mortgage in respect of each Mortgage Loan for recordation in the appropriate public recording office in the applicable jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of the Seller;
(ee) Seller has not sold, assigned, transferred, pledged or hypothecated any interest in any individual Mortgage Loan subject to a Transaction to any person other than any sale, assignment, transfer, pledge or hypothecation that is released in conjunction with the sale to Purchaser hereunder, and upon delivery of such Mortgage Loan to Purchaser, Purchaser will be the sole owner thereof (other than for tax and accounting purposes), free and clear of any lien, claim or encumbrance other than those arising under this Agreement; and
(ff) In connection with the assignment of any Mortgage Loan registered on the MERS system, the Seller agrees that it will, at the Seller’s own cost and expense, promptly cause the MERS system to indicate that such Mortgage Loan has been transferred to the Purchaser in accordance with the terms of this Agreement by including in MERS’ computer files (a) the code in the field which identifies the specific owner of the Mortgage Loans and (b) the code in the field “Pool Field” which identifies the series in which such Mortgage Loans were sold. The Seller further agrees that it will not alter codes referenced in this paragraph with respect to any Mortgage Loan at any time that such Mortgage Loan is subject to this Agreement, and the Seller shall retain its membership in MERS at all times during the term of this Agreement.
(gg) Construction or Rehabilitation of Mortgaged Property. Except for FHA 203k Mortgage Loans, 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.
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EXHIBIT C
FORM OF TRANSACTION NOTICE
[insert date]
Barclays Bank PLC
745 Seventh Avenue, 4th Floor
New York, New York 10019
Attention: Joseph O’Doherty
Re: Master Repurchase Agreement, dated as of August 14, 2020, by and between Barclays Bank PLC (“Purchaser” and “Agent”) and Home Point Financial Corporation (“Seller”)
Ladies/Gentlemen:
Reference is made to the above-referenced Master Repurchase Agreement (the “Repurchase Agreement”; capitalized terms used but not otherwise defined herein have the meaning given them in the Repurchase Agreement).
In accordance with Section 3(d) of the Repurchase Agreement, the undersigned Seller hereby requests, and the Purchaser agrees, to enter into a Transaction with us, in connection with our delivery of Eligible Mortgage Loans and all related Servicing Rights, on ____________________ [insert requested Purchase Date, which must be at least one (1) Business Day following the date of the request] (the “Purchase Date”), in connection with which we shall sell to you such Eligible Mortgage Loans on the Seller Mortgage Loan Schedule attached hereto. The unpaid principal balance of the Eligible Mortgage Loans is $________ and the Purchase Price shall be ______ [insert applicable Purchase Price]. The Purchaser shall transfer to the Seller an amount equal to $ _______ [insert amount which represents the Purchase Price net of any related Structuring Fee, Non-Utilization Fee, or any other fees then due and payable by Seller to Purchaser pursuant to the Agreement]. Seller agrees to repurchase such Purchased Asset on the Repurchase Date(s) at the Repurchase Price(s) set forth in the spreadsheet attached hereto as Schedule 1.
The Eligible Mortgage Loans have the characteristics on the electronic file or computer tape or disc delivered by Seller to the Purchaser with respect thereto in connection with this Transaction Notice.
The Seller hereby certifies, as of such Purchase Date, that:
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(1) no Default or Event of Default has occurred and is continuing on the date hereof (or to the extent existing, shall be cured after giving effect to such Transaction) nor will occur after giving effect to such Transaction as a result of such Transaction;
(2) each of the representations and warranties made by the Seller in or pursuant to the Program Documents is true and correct in all material respects on and as of such date as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);
(3) the Seller is in compliance with all governmental licenses and authorizations and is qualified to do business and is in good standing in all required jurisdictions, except as would not be reasonably likely to have a Material Adverse Effect;
(4) Seller has all requisite Approvals; and
(5) the Seller has satisfied all applicable conditions precedent in Sections 10(a) and (b) of the Repurchase Agreement and all other requirements of the Program Documents to the extent such conditions and requirements are within its control.
The undersigned duly authorized officer of Seller further represents and warrants that (1) (a) with respect to the Eligible Mortgage Loans subject to the Transaction requested herein that are not Wet-Ink Mortgage Loans, the documents constituting the Mortgage Files (as defined in the Custodial and Disbursement Agreement) and (b) with respect to Eligible Mortgage Loans that are Wet-Ink Mortgage Loans, the Transaction Notice and the Seller Mortgage Loan Schedule, in each case as more specifically identified on the Seller Mortgage Loan Schedule delivered to the Purchaser and the Custodian in connection herewith (the “Receipted Assets”), have been or are hereby submitted to Custodian and such required documents are to be held by the Custodian for the Purchaser, (2) all other documents related to such Receipted Assets (including, but not limited to, mortgages, insurance policies, loan applications and appraisals) have been or will be created and held by Seller for Purchaser, (3) all documents related to such Receipted Assets withdrawn from Custodian shall be held by Seller for Purchaser, and (4) upon Purchaser’s wiring of the Purchase Price pursuant to Section 3(b) of the Repurchase Agreement, Purchaser will have agreed to the terms of the Transaction as set forth herein and purchased the Receipted Assets from the Seller.
Seller hereby represents and warrants that (x) the Receipted Assets have a Principal Balance as of the date hereof of $__________ and (y) the number of Receipted Assets is ______.
C - 2
Very truly yours,
HOME POINT FINANCIAL CORPORATION
By:
Name:
Title:
Name:
Title:
C - 3
SCHEDULE 1 TO TRANSACTION NOTICE
LIST OF REPURCHASE PRICES AND REPURCHASE DATES
[SEE ATTACHMENT]
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EXHIBIT D
FORM OF GOODBYE LETTER
«Primary_Borrower» [_______] [__], 20[ ]
«Mailing_address_line_1»
«Mail_city», «Mail_state» «Mail_zip»
RE: Transfer of Mortgage Loan Servicing
Mortgage Loan «Account_number»
Dear Customer:
Home Point Financial Corporation (“Servicer”) is the present servicer of your mortgage loan. Effective [Date] the servicing of your mortgage will be transferred to _______. This transfer does not affect the terms and conditions of your mortgage, other than those directly related to servicing. Because of the change in servicer, we are required to provide you with this disclosure.
Servicer cannot accept any payments received after [Date]. Effective [Date], all payments are to be made to __________. Any payments received by Servicer after [Date] will be forwarded to _________________. ___________________ will be contacting you shortly with payment instructions. Please make future payments to:
________________________
Attn: ___________
[Address]
If you currently make payments by an automatic checking or savings account deduction, that service will discontinue effective with the transfer date. After the servicing transfer, you may request this service from _____________.
In [Date], you will receive a statement from Servicer reflecting the amount, if any, of the interest and taxes paid on your behalf in 20[ ]. A similar statement will be sent __________________ for the period beginning [Date] through year-end. Both statements must be added together for income tax purposes.
If you have any questions concerning your account through [Date], you should continue to contact Servicer, at <Servicer’s Phone Number>, <HOURS OF OPERATION>. Questions after the transfer date should be directed to ___________________Customer Service Department at 1-800-_____________, Monday – Friday, 7 a.m. – 7 p.m. EST.
D - 1
Sincerely,
Loan Servicing Department
Home Point Financial Corporation
D - 2
NOTICE OF ASSIGNMENT, SALE OR TRANSFER
OF SERVICING RIGHTS
You are hereby notified that the servicing of your mortgage loan, that is the right to collect payments from you, is being assigned, sold or transferred.
The assignment, sale or transfer of the servicing of the mortgage loan does not affect any term or condition of the mortgage instruments, other than the terms directly related to the servicing of your loan.
Except in limited circumstances, the law requires that your present servicer send you a notice at least 15 days before the effective date, or at closing. Your new servicer must also send you this notice no later than 15 days after this effective date.
This notification is a requirement of Section 6 of the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2605). You should also be aware of the following information, which is set out in more detail in Section 6 of RESPA (12 U.S.C. 2605).
During the 60 day period following the effective date of the transfer of the loan servicing, a loan payment received by your old servicer before its due date may not be treated by the new loan servicer as late, and a late fee may not be imposed upon you.
Section 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights. If you send a “qualified written request” to your loan servicer concerning the servicing of your loan, your servicer must provide you with a written acknowledgement within 20 Business Days of receipt of your request. A “qualified written request” is written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, which includes your name and account number and your reasons for the request. If you want to send a “qualified written request” regarding the servicing of your loan, it must be sent to this address:
___________________
[Address]
No later than 60 Business Days after receiving your request, your servicer must make any appropriate corrections to your account, and must provide you with a written clarification regarding any dispute. During this 60 Business Day period, your servicer may not provide information to a consumer reporting agency concerning any overdue payment related to such period or qualified written request. However, this does not prevent the servicer from initiating foreclosure if proper grounds exist under the mortgage documents.
A Business Day is any day excluding legal public holidays (State or federal), Saturday and Sunday.
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Section 6 of RESPA also provides for damages and costs for individuals or classes of individuals, in circumstances where servicers are shown to have violated the requirements of that Section. You should seek legal advice if you believe your rights have been violated.
MIRANDA DISCLOSURE – For your protection, please be advised that we are attempting to collect a debt and any information obtained will be used for that purpose. Calls will be monitored and recorded for quality assurance purposes. If you do not wish for your call to be recorded please notify the customer service associate when calling.
BANKRUPTCY INSTRUCTION – Attention to any customer in Bankruptcy or who has received a bankruptcy discharge of this debt. Please be advised that this letter constitutes neither a demand for payment of the captioned debt nor a notice of personal liability to any recipient hereof who might have received a discharge of such debt in accordance with applicable bankruptcy laws or who might be subject to the automatic stay of Section 362 of the United States Bankruptcy Code. However, it may be a notice of possible enforcement of our lien against the collateral property, which has not been discharged in your bankruptcy.
D - 4
EXHIBIT E
FORM OF WAREHOUSE LENDER’S RELEASE
(Date)
Barclays Bank PLC – Mortgage Finance
745 Seventh Avenue, 4th Floor
New York, New York 10019
Attention: [***]
Barclays Bank PLC – Legal Department
745 Seventh Avenue, 20th Floor
New York, New York 10019
Attention: General Counsel
Barclays Capital – Operations
1301 Sixth Ave, 8th Floor
New York, New York 10019
Attention: [***]
Telephone: [***]
Email: [***]
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Re: Certain Mortgage Loans identified on Schedule A hereto and owned by Home Point Financial Corporation
Capitalized terms used herein but not defined herein have the meanings ascribed to such terms in the Master Repurchase Agreement, dated as of August 14, 2020 (the “Repurchase Agreement”), between Barclays Bank PLC and Home Point Financial Corporation.
The undersigned hereby releases all right, interest, lien or claim of any kind with respect to the Mortgage Loans described in the attached Schedule A, such release to be effective automatically without any further action by any party upon receipt in the account identified below in immediately available funds of $__________________, representing a loan count of _________, in accordance with the following wire instructions:
[ ]
Very truly yours,
E - 1
[WAREHOUSE LENDER]
By:
Name:
Title:
[SCHEDULE A TO EXHIBIT E – LIST OF MORTGAGE LOANS TO BE RELEASED]
E - 2
EXHIBIT F
LIST OF DISAPPROVED MEMBERS OF THE MORTGAGE BACKED SECURITIES DIVISION OF THE FIXED INCOME CLEARING CORPORATION
[NONE]
F - 1
EXHIBIT G
FORM OF ESCROW INSTRUCTION LETTER
TO BE PROVIDED BY SELLER BEFORE CLOSING
The escrow instruction letter (the “Escrow Instruction Letter”) shall also include the following instruction to the Settlement Agent (the “Escrow Agent”):
Barclays Bank PLC (the “Purchaser”), has agreed to provide funds (“Escrow Funds”) to Home Point Financial Corporation (the “Seller”) to finance certain mortgage loans (the “Mortgage Loans”) for which you are acting as Escrow Agent. Wells Fargo Bank, N.A., in its capacity as funds disbursement agent (the “Disbursement Agent”), will disburse such funds on behalf of Purchaser.
You hereby agree that (a) you shall receive such Escrow Funds from Purchaser to be disbursed by the Disbursement Agent in connection with this Escrow Instruction Letter, (b) you will hold such Escrow Funds in trust, without deduction, set-off or counterclaim for the sole and exclusive benefit of Purchaser until such Escrow Funds are fully disbursed on behalf of Purchaser in accordance with the instructions set forth herein, and (c) you will disburse such Escrow Funds on the date specified for closing (the “Closing Date”) only after you have followed this Escrow Instruction Letter’s requirements with respect to the Mortgage Loans. In the event that the Escrow Funds cannot be disbursed on the Closing Date in accordance with the Escrow Instruction Letter, you agree to promptly remit the Escrow Funds to the Disbursement Agent by re-routing via wire transfer the Escrow Funds in immediately available funds, without deduction, set-off or counterclaim, back to the account specified in Disbursement Agent’s incoming wire transfer.
You further agree that, upon disbursement of the Escrow Funds, you will hold the Mortgage File as specified in the Escrow Instruction Letter in escrow as agent and bailee for Purchaser, and will forward the Mortgage File and original Escrow Instruction Letter in connection with such Mortgage Loans by overnight courier (y) to the Disbursement Agent within three (3) Business Days following the date of origination.
You agree that all fees, charges and expenses regarding your services to be performed pursuant to this Escrow Instruction Letter are to be paid by Seller or its borrowers, and Purchaser shall have no liability with respect thereto.
The provisions of this Escrow Instruction Letter may not be modified, amended or altered, except by written instrument, executed by the parties hereto and Purchaser. You understand that Purchaser shall act in reliance upon the provisions set forth in this Escrow Instruction Letter, and that Purchaser is an intended third party beneficiary hereof.
Whether or not an Escrow Instruction Letter executed by you is received by the Disbursement Agent, your acceptance of the Escrow Funds shall be deemed to constitute your acceptance of this Escrow Instruction Letter.
G - 2
[SELLER SIGNATURE BLOCK]
[ESCROW AGENT/SETTLEMENT AGENT SIGNATURE BLOCK]
G - 3
EXHIBIT H
FORM OF SELLER MORTGAGE LOAN SCHEDULE
[TO BE PROVIDED BY BARCLAYS]
H - 1
EXHIBIT I
FORM OF PREFUNDING REQUEST
[insert date]
[VIA ELECTRONIC TRANSMISSION]
Barclays Bank PLC
745 Seventh Avenue, 4th Floor
New York, New York 10019
Attention: [***]
U.S. Bank National Association
14255 49th Street North, Building 1
Clearwater, FL 33762
Attention: Site Manager
[***]
Telephone No: [***]
Email: [***]
With a copy to:
U.S. Bank National Association
1133 Rankin Street Ste 100
Saint Paul, MN 55116
Attention: [***]
[***]
Telephone No: [***]
Email: [***]
Re: Master Repurchase Agreement, dated as of August 14, 2020, by and between Barclays Bank PLC (“Purchaser” and “Agent”) and Home Point Financial Corporation (“Seller”)
Ladies/Gentlemen:
Reference is made to the above-referenced Master Repurchase Agreement (the “Repurchase Agreement”; capitalized terms used but not otherwise defined herein have the meaning given them in the Repurchase Agreement).
In accordance with Section 3(c) of the Repurchase Agreement, the undersigned Seller hereby requests Purchaser to remit to the Disbursement Account an amount equal to $________ [which amount shall not be less than $5,000,000] in connection with our subsequent
I - 1
delivery of one or more Seller Mortgage Loan Schedules requesting Purchaser to purchase certain Eligible Mortgage Loans and all related Servicing Rights, on ____________________ [insert requested Purchase Date, which must be at least one (1) Business Day following the date of the request] (the “Purchase Date”).
By submitting this Prefunding Request, Seller is deemed to have represented that no Responsible Officer of Seller has knowledge of any fact or circumstance that would cause such Responsible Officer to reasonably believe Seller could not represent that all conditions precedent to the Transactions expected to occur the following day shall be satisfied and that all Mortgage Loans to be purchased will be Eligible Mortgage Loans.
Very truly yours,
HOME POINT FINANCIAL CORPORATION
I - 2
EXHIBIT J
FORM OF SELLER FINANCIAL STATEMENTS (ANNUAL)
J - 1
EXHIBIT K
FORM OF SELLER FINANCIAL STATEMENTS (PERIODIC)
Exhibit 10.2
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
among
HPFC SUB 1 LLC
(“Seller”)
HOME POINT FINANCIAL CORPORATION
(“Guarantor”)
and
GOLDMAN SACHS BANK USA
(“Buyer”)
dated as of
June 30, 2021
TABLE OF CONTENTS
Page
i
ii
iii
iv
v
vi
EXHIBITS
Exhibit A: Glossary of Defined Terms
Exhibit B: [Reserved]
Exhibit C: [Reserved]
Exhibit D: Assignment of Closing Protection Letter
Exhibit E: Form of Power of Attorney
Exhibit F: Wiring Instructions
Exhibit G: Form of Servicer Notice
Exhibit H: Representations and Warranties
Exhibit I: [Reserved]
Exhibit J: [Reserved]
Exhibit K: Form of Escrow Instruction Letter
Exhibit L Form of Monthly Servicing Report
SCHEDULES
Schedule 1: Filing Jurisdictions and Offices
Schedule 2: Ownership Structure of Guarantor and its Affiliates and Subsidiaries
vii
MASTER REPURCHASE AGREEMENT
THIS AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (the “Agreement”) is made and entered into as of June 30, 2021 (the “Effective Date”) , by and among Goldman Sachs Bank USA, a New York State-chartered bank, as buyer (“Buyer”), HPFC Sub 1 LLC (“HPFC Sub”), a Delaware limited liability company, as seller (“Seller”), and Home Point Financial Corporation (“HPFC”), a New Jersey corporation, as guarantor (“Guarantor”).
RECITALS
A. Buyer, Home Point Financial Corporation, as seller (the “Original Seller”) and Guarantor are parties to that certain Master Repurchase Agreement (as further amended, supplemented and otherwise modified from time to time before the date hereof, the “Existing Repurchase Agreement”), dated as of March 24, 2021 (the “Initial Closing Date”).
B. Buyer, Original Seller and Guarantor wish to amend and restate the Existing Repurchase Agreement, effective as of the Effective Date, as provided herein.
C. Subject to the terms and conditions set forth in the Existing Repurchase Agreement, from and after the Initial Closing Date until the Effective Date, Original Seller requested Buyer to enter into transactions with Original Seller whereby Original Seller could, from time to time, sell to Buyer certain Eligible Mortgage Loans (including in each case and without limitation all of Original Seller’s right, title and interest in and to the related Servicing Rights), against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to sell to Original Seller such Eligible Mortgage Loans at a date certain or on demand after the Purchase Date, against the transfer of funds by Original Seller. From and after the Effective Date, Seller has requested Buyer to enter into transactions with Seller whereby Seller may, from time to time, sell to Buyer a Participation Interest representing one hundred percent (100%) beneficial ownership in certain Eligible Mortgage Loans (including in each case and without limitation all of Seller’s right, title and interest in and to the related Servicing Rights and/or other mortgage related assets and interests), against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to sell to Seller such purchased assets at a date certain or on demand after the Purchase Date, against the transfer of funds by Seller (each such transaction, a “Transaction”). On the Effective Date, the Participation Interest in Purchased Mortgage Loans subject to a Transaction under the Existing Repurchase Agreement immediately before the execution of the Agreement will be transferred and sold by the Seller to Buyer hereunder.
D. Buyer has agreed to enter into such Transactions, subject to the terms and conditions set forth in this Agreement.
E. Guarantor has agreed to guarantee the obligations of the Seller hereunder.
NOW, THEREFORE, in consideration of the mutual rights and obligations provided herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Seller, Guarantor and Buyer agree as follows:
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ARTICLE 1
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1 Defined Terms. As used in this Agreement, capitalized terms shall have the meanings set forth in Exhibit A hereto, unless the context otherwise requires. All such defined terms shall, unless specifically provided to the contrary, have the defined meanings set forth herein when used in any other agreement, certificate or document made or delivered pursuant hereto.
1.2 Interpretation; Principles of Construction. The following rules of this Section 1.2 apply to all Principal Agreements unless the context requires otherwise. A gender includes all genders. Where a word or phrase is defined, its other grammatical forms have a corresponding meaning. A reference to a subsection, Section, Schedule or Exhibit is, unless otherwise specified, a reference to a subsection or Section of, or schedule or exhibit to, this Agreement. A reference to a party to this Agreement or another agreement or document includes the party’s successors and permitted substitutes or assigns. A reference to an agreement or document (including any Principal Agreement) is to the agreement or document as amended, modified, novated, supplemented or replaced, except to the extent prohibited thereby or by any Principal Agreement and in effect from time to time in accordance with the terms thereof. A reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it. A reference to writing includes an electronic transmission and any means of reproducing words in a tangible and permanently visible form. A reference to conduct includes, without limitation, an omission, statement or undertaking, whether or not in writing. The words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” is not limiting and means “including without limitation.” In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”
Except where otherwise provided in this Agreement, any determination, calculation, consent, approval, statement or certificate made or confirmed in writing with notice to a Responsible Officer of Seller or Guarantor by Buyer or an authorized officer of Buyer provided for in this Agreement is conclusive and binds the parties in the absence of manifest error. A reference to an agreement includes a security interest, guarantee, agreement or legally enforceable arrangement whether or not in writing related to such agreement.
A reference to a document includes an agreement (as so defined) in writing or a certificate, notice, instrument or document, or any information recorded in electronic form. Where Seller is required to provide any document to Buyer under the terms of this Agreement, the relevant document shall be provided in writing in either electronic or printed form unless Buyer requests otherwise. At the request of Buyer, the document shall be provided in electronic form or both printed and electronic form.
This Agreement is the result of negotiations among, and has been reviewed by counsel to, Buyer, Seller and Guarantor, and is the product of all parties. In the interpretation of this Agreement, no rule of construction shall apply to disadvantage one party on the ground that such party proposed or was involved in the preparation of any particular provision of this Agreement or this Agreement itself. Except where otherwise expressly stated, Buyer may give or withhold, in good faith or give conditionally, approvals and consents and may form opinions and make determinations at its sole and absolute discretion. All determinations by Buyer at its sole or absolute discretion shall be made in good faith. Any requirement of
2
good faith, discretion or judgment by Buyer shall not be construed to require Buyer to request or await receipt of information or documentation not immediately available from or with respect to Seller, a Servicer of the Related Mortgage Loans, any other Person or the Purchased Assets themselves. All references herein or in any Principal Agreement to “good faith” means good faith as defined in Section 1-201(b)(20) of the Uniform Commercial Code.
ARTICLE 2
AMOUNT AND TERMS OF TRANSACTIONS
AMOUNT AND TERMS OF TRANSACTIONS
2.1 Agreement to Enter into Transactions. Subject to the terms and conditions set forth in the Existing Repurchase Agreement, from and after the Initial Closing Date, Original Seller requested Buyer to enter into transactions with Original Seller whereby Original Seller could, from time to time, sell to Buyer certain Eligible Mortgage Loans (including in each case and without limitation all of Original Seller’s right, title and interest in and to the related Servicing Rights), against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to sell to Original Seller such Eligible Mortgage Loans at a date certain or on demand after the Purchase Date, against the transfer of funds by Original Seller. From and after the Effective Date, and subject to the terms and conditions of this Agreement and provided that no Default or Event of Default has occurred and is continuing, Buyer shall, from time to time during the term of this Agreement, enter into Transactions with Seller; provided, however, that (a) the Aggregate Outstanding Purchase Price as of any date shall not exceed the Aggregate Transaction Limit and (b) the Aggregate Outstanding Purchase Price for any Type of Transaction shall not exceed the applicable Type Sublimit. Subject to the terms and conditions of this Agreement, Buyer shall have the obligation to enter into Transactions with an Aggregate Outstanding Purchase Price equal to or less than the unused portion of the Committed Amount, and Buyer shall have no obligation to enter into Transactions with respect to the Uncommitted Amount. All purchases of Purchased Assets shall be first deemed funded up to the Committed Amount and then the remainder, if any, shall be deemed funded up to the Uncommitted Amount. This Agreement is not a commitment to enter into Transactions with respect to the Uncommitted Amount with Seller but rather sets forth the procedures to be used in connection with any request for Buyer to enter into Transactions with respect to the Uncommitted Amount with Seller from time to time during the term of this Agreement and, if Buyer enters into Transactions with Seller with respect to the Uncommitted Amount, Seller’s obligations with respect thereto. NOTWITHSTANDING THE WILLINGNESS OF BUYER FROM TIME TO TIME TO CONSIDER ENTERING INTO TRANSACTIONS WITH RESPECT TO THE UNCOMMITTED AMOUNT HEREUNDER, THIS AGREEMENT AND THE OTHER PRINCIPAL AGREEMENTS ARE ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT BUYER SHALL NOT BE OBLIGATED TO ENTER INTO ANY TRANSACTION WITH RESPECT TO THE UNCOMMITTED AMOUNT HEREUNDER, AND THIS AGREEMENT AND THE OTHER PRINCIPAL AGREEMENTS SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY BUYER TO ENTER INTO ANY TRANSACTION WITH RESPECT TO THE UNCOMMITTED AMOUNT. BUYER’S ENTRY INTO A TRANSACTION WITH RESPECT TO THE UNCOMMITTED AMOUNT HEREUNDER SHALL NOT OBLIGATE BUYER TO ENTER INTO ANY FUTURE TRANSACTIONS WITH RESPECT TO THE UNCOMMITTED AMOUNT HEREUNDER. On the Effective Date, the Participation Interest in Purchased Mortgage Loans subject to a Transaction under the Existing Repurchase Agreement immediately before the execution of the Agreement will be transferred and sold by the Seller to Buyer hereunder.
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2.2 Transaction Limits. The Aggregate Transaction Limit and each Type Sublimit are forth in the Transactions Terms Letter.
2.3 Description of Purchased Assets. With respect to each Transaction, Seller shall cause to be maintained with Buyer Purchased Assets with an Asset Value not less than, on any date of determination, the related Purchase Price for such Transaction. With respect to each Transaction, the type of Purchased Asset shall be one of the types of Purchased Asset as specified in the Transactions Terms Letter as the “Type,” and in each case shall consist of the type of mortgage loans, mortgage related securities, or interests therein as described in Bankruptcy Code Section 101(47)(A). Buyer shall determine, in its sole and absolute discretion. the correct “Type” for such Purchased Asset.
2.4 Maximum Transaction Amounts. The Purchase Price for each proposed Transaction shall not exceed the least of:
(a) the difference between (a) the product of the applicable Type Sublimit (expressed as a decimal and as determined by the Type of Purchased Asset) and the Aggregate Transaction Limit (after giving effect to all Transactions then subject to the Agreement) and (b) the product of the applicable Type Sublimit (expressed as a decimal and as determined by the Type of Purchased Asset) and the Aggregate Outstanding Purchase Price (after giving effect to all Transactions then subject to the Agreement);
(b) the Aggregate Transaction Limit minus the Aggregate Outstanding Purchase Price of all other Transactions then subject to the Agreement, if any; and
(c) the Asset Value of the related Purchased Asset(s).
2.5 Use of Proceeds. Seller shall use the Purchase Price of each Transaction solely for the purpose of originating the related Purchased Asset(s) and/or acquiring the related Purchased Asset(s) from an Approved Originator.
2.6 Price Differential.
(a) Price Differential. Notwithstanding that Buyer and Seller intend that the Transactions hereunder be sales by Seller to Buyer of the Purchased Assets for all purposes (except for accounting and U.S. federal, state and local income or franchise Tax purposes), Seller shall pay Buyer accrued interest on the Purchase Price for each Purchased Asset calculated from the Purchase Date until, but not including, the date on which the Repurchase Price is paid, in an amount equal to the Price Differential; provided that if the Repurchase Price for a Transaction is not paid by Seller when due (whether at the Repurchase Date, upon acceleration or otherwise), the Purchase Price shall bear a Price Differential from the related due date until paid in full at an annual rate equal to the Default Rate. For the avoidance of doubt, upon and after the occurrence of an Aging Event with respect to a Purchased Asset, the Purchase Price for such Purchased Asset shall bear a Price Differential at an annual rate equal to the sum of the Applicable Pricing Rate plus the Type Margin for an Aging Event Asset, if any.
(b) Time for Payment. Price Differential with respect to any Purchased Asset shall be due and payable on the Price Differential Date occurring in the month following the related Purchase Date and thereafter on each subsequent Price Differential Date based in each
4
case upon an invoice provided by Buyer to Seller [***] Business Days before such Price Differential Date setting forth the Price Differential accrued during the Collection Period immediately preceding such Price Differential Date. Notwithstanding anything to the contrary in this Section 2.6(b), in the event the Asset Value of any Purchased Asset is marked to zero and Seller requests Buyer to release its security interest in such Purchased Asset or any Purchased Items related thereto, Buyer shall not release any such security interest therein unless and until Seller shall have paid to Buyer the Repurchase Price for such Purchased Asset.
(c) Computations. All computations of Price Differential and fees payable hereunder shall be made by Buyer in its sole and absolute discretion, and all such calculations shall be based upon the actual number of days (including the first day but excluding the last day) occurring in the relevant period, and a three-hundred sixty (360) day year.
2.7 Terms and Conditions of Transactions. The terms and conditions of the Transactions as set forth in the Transactions Terms Letter, this Agreement or otherwise may be changed from time to time by mutual, written agreement between Buyer and Seller. The terms and conditions of the Transactions Terms Letter are hereby incorporated and form a part of this Agreement as if fully set forth herein; provided, however, to the extent of any conflict between the terms of this Agreement and the terms of the Transactions Terms Letter, the Transactions Terms Letter shall control.
ARTICLE 3
PROCEDURES FOR REQUESTING AND ENTERING INTO TRANSACTIONS
PROCEDURES FOR REQUESTING AND ENTERING INTO TRANSACTIONS
3.1 Request for Transaction.
(a) Request for Transaction. Seller may initiate a Transaction with respect to an Asset by delivering an electronic request (a “Prefunding Request”) to Disbursement Agent, Calculation Agent and Buyer no later than [***] (New York City time) the Business Day prior to the requested Purchase Date, which Prefunding Request shall specify the Prefunded Amount that Seller requests Buyer to remit to the Disbursement Account, and Buyer shall make commercially reasonable efforts to remit the Prefunded Amount to the Disbursement Account by [***] (New York City time) on the Purchase Date., Seller shall formally request to enter into a Transaction with respect to an Asset by delivering to Buyer, Calculation Agent and Disbursement Agent a Transaction Request for each Asset no later than (i) [***] (New York City time) on the requested Purchase Date. Buyer shall be under no obligation to enter into any Transaction or Transactions requested by Seller if the Purchase Price relates to the Uncommitted Amount. Assuming the satisfaction of all conditions precedent set forth in Article 7 and as otherwise set forth in this Agreement, Buyer may, for any Transaction with respect to the Uncommitted Amount and shall, for any Transaction with respect to the Committed Amount, confirm to Seller the terms of Transactions electronically or otherwise in writing. Buyer reserves the right to reject any Transaction Request that Buyer determines fails to comply with the terms and conditions of this Agreement. By submitting a Transaction Request hereunder or in such other form as may be approved by Buyer, in its good faith discretion (i) such Transaction Request shall be deemed to be, and Seller acknowledges and agrees that such Transaction Request shall constitute, notification to Buyer by Seller that Seller wishes to enter into a Transaction under this Agreement and (ii) Seller shall be deemed to have represented and
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warranted that (a) as of the applicable Purchase Date, all conditions precedent to a Transaction as set forth in Section 7.1 and Section 7.2 of this Agreement have been satisfied, (b) the representations and warranties of Seller set forth in Article 8 of this Agreement are true and correct in all material respects as if made on and as of the date of the applicable Transaction, except to the extent that such representations and warranties expressly relate to an earlier specified date or period, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date, and (c) no Event of Default with respect to Seller or Guarantor has occurred and is continuing.
(b) Form of Transaction Request. With the consent of Seller (and with such consent not to be unreasonably withheld or delayed), Buyer shall have the right to revise or supplement the form of the Transaction Request from time to time.
3.2 Delivery of Mortgage Loan Documents.
(a) Dry Mortgage and Wet Mortgage Loans. With respect to Dry Mortgage Loans, on or before each Purchase Date and, with respect to Wet Mortgage Loans, within the related Maximum Dwell Time, Guarantor shall deliver to Custodian all related Mortgage Loan Documents and cause the related Trust Receipt to be delivered to Buyer, in each case as required under the Custodial and Disbursement Agreement.
(b) [Reserved].
(c) [Reserved]
(d) Government Mortgage Loans. After the occurrence and during the continuance of an Event of Default, with respect to a Transaction the subject of which is a Government Mortgage Loan, Guarantor shall provide Buyer, upon its request, an electronic copy (if available) of the FHA Mortgage Insurance Contract, the VA Loan Guaranty Agreement or the RD Loan Guaranty Agreement, as applicable, or evidence of such insurance or guaranty, as applicable, including proof of payment of the premium and the case number so Buyer can access the information on the computer system maintained by FHA, the VA or the RD, as applicable.
(e) Mortgage Loan Documents in Guarantor’s Possession. At all times during which the Mortgage Loan Documents related to any Related Mortgage Loan are in the possession of Guarantor until they are provided to Custodian, Guarantor shall hold such Mortgage Loan Documents in trust for the exclusive benefit of Buyer and shall act only in accordance with Buyer’s written instructions until such documents are delivered pursuant to the Custodial and Disbursement Agreement.
3.3 [Reserved]
3.4 Wire-out Account; Haircut.
(a) Minimum Balance. Seller and Guarantor shall cause the Disbursement Agent to establish and maintain the Wire-out Account as a segregated time or demand deposit account for the benefit of Guarantor and shall at all times (including after the withdrawal of the
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related Haircut Amount) maintain a balance in the Wire-out Account of not less than $0.00.
(b) Deposits. Guarantor shall deposit funds into the Wire-out Account in accordance with the terms of this Agreement, including Section 3.4(a) and the Custodial and Disbursement Agreement.
(c) Failure to Maintain Balance. If, at any time, Seller or Guarantor fails to maintain in the Wire-out Account a minimum balance of $0.00 as required hereunder and under the Custodial and Disbursement Agreement, Buyer shall have the right to immediately stop entering into Transactions with Seller that would require amounts from the Wire-out Account until such time as Seller or Guarantor has made an appropriate deposit into the Wire-out Account such that a minimum balance of $0.00 is on deposit in the Wire-out Account as required hereunder and the Custodial and Disbursement Agreement.
(d) Location of Wire-out Account. Neither Seller nor Guarantor shall change the identity or location of the Wire-out Account without thirty (30) calendar days prior notice to the Disbursement Agent and Buyer.
3.5 Payment of Purchase Price.
(a) Payment of Purchase Price. On the Purchase Date for each Transaction, ownership of the Purchased Assets shall be transferred to Buyer against the simultaneous transfer of the Purchase Price to Seller, or on behalf of Seller to an Approved Payee, as applicable, and simultaneously with the delivery to Buyer (or the Custodian on its behalf) of the Purchased Assets, the Mortgage Loan Documents and Purchased Items relating to each Transaction. With respect to the Purchased Assets being sold by Seller on the Purchase Date, Seller hereby sells, transfers, conveys and assigns to Buyer or its designee without recourse all of Seller’s right, title and interest in and to the Purchased Assets, together with all right, title and interest of Seller in and to all amounts due and payable under the terms of such Purchased Assets.
(b) Methods of Payment. On or prior to the Purchase Date for each Transaction, subject to the satisfaction of all conditions precedent set forth in Section 7.1(b) (with respect to the initial Transaction) and Section 7.2 (with respect to all Transactions) and as otherwise set forth in this Agreement, Buyer shall remit or cause to be remitted by wire transfer of same day funds the Purchase Price for all Transactions described in the applicable Transaction Request to the Disbursement Account on or prior to [***] (New York City time) on such Purchase Date. Upon receipt of such funds and the receipt of the Haircut with respect to such Transactions pursuant to the Custodial and Disbursement Agreement, as applicable, and the related Transaction Request, the Disbursement Agent shall remit such funds by wire transfer in accordance with Seller’s wire instructions set forth in the applicable Transaction Request to Seller or to its Approved Payee, as applicable. Notwithstanding the foregoing, Buyer shall not be obligated to direct the Disbursement Agent to pay, and the Disbursement Agent shall not be obligated to pay in accordance with such direction of Buyer, the Purchase Price and the related Haircut, as applicable, under any method of payment to any Person that is not an Approved Payee. Further, the payment of the Purchase Price and the related Haircut, as applicable, by the Disbursement Agent to any Person that is not an Approved Payee shall not make such
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Person an Approved Payee. Any funds disbursed by Buyer to the Disbursement Account or by the Disbursement Agent to Seller, Guarantor or an Approved Payee shall be subject to all applicable federal, state and local laws, including, without limitation, regulations and policies of the Board of Governors of the Federal Reserve System on Reduction of Payments System Risk. Each of Guarantor and Seller acknowledges that as a result of Buyer’s or Disbursement Agent’s compliance with such applicable laws, regulations and policies, equipment malfunction beyond the reasonable control of Buyer or the Disbursement Agent, Buyer’s or the Disbursement Agent’s approval procedures or circumstances beyond the reasonable control of Buyer or the Disbursement Agent, the payment of a Purchase Price and the related Haircut, as applicable, may be delayed. Buyer or the Disbursement Agent shall not be liable to Seller or Guarantor for any costs, losses or damages arising from or relating to any such delays.
(c) Transaction Limitations and Other Restrictions Relating to Closing Agents. Notwithstanding that a particular Transaction Request will not exceed the Aggregate Transaction Limit or applicable Type Sublimit, if the payment of the Purchase Price for such Transaction to the related Closing Agent will violate Applicable Law, Buyer may, upon prior notice to a Responsible Officer of Seller, refuse to direct the Disbursement Agent to pay, and the Disbursement Agent shall not pay in accordance with such direction of Buyer, the Purchase Price to such Closing Agent. Any obligation to enter into Transactions hereunder shall be subject to the further limitations set forth in the Custodial and Disbursement Agreement.
(d) Return of Purchase Price. If a Wet Mortgage Loan subject to a Transaction is not closed on the same day on which the Purchase Price was funded, the funds shall be returned to Buyer pursuant to Section 11(g) of the Custodial and Disbursement Agreement. Seller shall pay Buyer all fees and expenses incurred by Buyer in connection with the funding of the Purchase Price for such Wet Mortgage Loan and, from the date of such funding up to but excluding the date such Purchase Price is returned to Buyer. Seller shall also pay Buyer any Price Differential accrued on such Purchase Price promptly upon notification from Buyer; provided, however, that Price Differential shall continue to accrue until the Purchase Price is returned to Buyer.
(e) Disbursement Account.
(i) In accordance with the Custodial and Disbursement Agreement, the Disbursement Agent has established and shall maintain a segregated time or demand deposit account with the Account Bank for and on behalf of Guarantor (the “Disbursement Account”).
(ii) Each of Seller and Guarantor hereby grants to Buyer a continuing first-priority security interest in (1) all right, title and interest in and to the Disbursement Account and (2) any funds of Seller or Guarantor at any time deposited or held in the Disbursement Account, whether such funds are required to be deposited and held in the Disbursement Account or otherwise. Seller and Guarantor shall, as a condition precedent to Buyer’s obligation to enter into any Transaction hereunder, cause the Account Bank to enter into the Disbursement Account Control Agreement with respect to the Disbursement Account. The pledge and security interest contained in this paragraph shall be considered “a security
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agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Bankruptcy Code Sections 101(38A)(A), 101(47)(a)(v) and 741(7)(A)(x). Seller and Guarantor each understands and agrees that the Disbursement Account shall be subject to a Disbursement Account Control Agreement. Each of Seller and Guarantor shall from time to time, at its own cost and expense, execute such directions and other papers, documents or instruments as may be reasonably requested by Buyer to reflect Buyer's security interest in the Disbursement Account.
3.6 Approved Payees and Approved Originators.
(a) Closing Agents. With respect to Wet Mortgage Loans (other than any such Mortgage Loan originated in the State of New York), following Seller’s or Guarantor’s receipt of the Closing Protection Letter and Seller’s or Guarantor’s distribution of the Escrow Instruction Letter to the Closing Agent, the Disbursement Agent will aggregate and disburse funds directly to the loan closing with respect to the Wet Mortgage Loans that are subject to a Transaction hereunder. With respect to Mortgage Loans originated in the state of New York, following Seller’s or Guarantor’s receipt of the related fidelity bond and Seller’s or Guarantor’s distribution of the Escrow Instruction Letter to the Closing Agent, the Disbursement Agent will aggregate and disburse funds directly to the loan closing with respect to the Wet Mortgage Loans that are subject to a Transaction hereunder .
(b) Closing Agent Approval Process. Upon delivery of the documents as required under Section 3.6(a), the related Closing Agent shall be an Approved Payee with respect to such Purchase Price. Buyer may withdraw its approval of any Closing Agent as an Approved Payee if Buyer becomes aware of any facts or circumstances at any time related to such Closing Agent which Buyer determines adversely affects the Closing Agent or otherwise makes the Closing Agent unacceptable as an Approved Payee. Buyer shall promptly notify Seller of any withdrawal of approval of an Approved Payee.
(c) Correspondent of Guarantor. In order for a correspondent of Guarantor to be designated an Approved Originator with respect to any Mortgage Loan, such correspondent must be approved by Guarantor.
3.7 Delivery of Mortgage-Backed Securities. With respect to Related Mortgage Loans that are Pooled Mortgage Loans, Buyer shall release its interests in the Related Mortgage Loan related to such Pooled Mortgage Loans simultaneously with the Settlement Date of a Mortgage-Backed Security backed by a Pool containing Related Mortgage Loans, with any such release subject to the terms of the related Joint Securities Account Control Agreement, and/or Intercreditor Agreement. Provided that such Mortgage-Backed Security has been issued to the Depository in the name of Buyer or Buyer’s nominee, from and after such Settlement Date, the Mortgage-Backed Security shall replace the applicable Related Mortgage Loan as asset related to the Asset that is subject to the related Transaction.
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ARTICLE 4
REPURCHASE
REPURCHASE
4.1 Repurchase Price.
(a) Payment of Repurchase Price. The Repurchase Price for each applicable Purchased Asset shall be payable in full by wire transfer of immediately available funds to the Funding Deposit Account in accordance with Buyer’s wire instructions set forth on Exhibit F upon the earliest to occur of (i) the Repurchase Date of the related Purchased Asset, (ii) at Buyer’s sole option, upon the occurrence and continuance of any Repurchase Acceleration Event with respect to such Purchased Asset, (iii) at Buyer’s sole option, upon the occurrence and continuance of an Event of Default, or (iv) the Facility Termination Date. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Asset. While it is anticipated that Seller will repurchase each Purchased Asset on its related Repurchase Date, Seller may repurchase a Purchased Asset (without any prepayment penalty or premium) upon written notice to Buyer of such proposed repurchase. In such circumstance, Buyer shall direct the Calculation Agent to apply the Repurchase Price received from Seller in accordance with Section 4.8.
(b) Effect of Payment of Repurchase Price. On the Repurchase Date (or such other date on which the Repurchase Price is received in full by Buyer), termination of the related Transaction will be effected by the repurchase by Seller or its designee of the Purchased Assets and any related Purchased Items and the simultaneous transfer of the Repurchase Price to an account of Buyer (in each case subject to the provisions of Section 6.4), and all of Buyer’s rights, title and interests therein shall then be conveyed to Seller or its designee; provided that, Buyer shall not be deemed to have terminated or conveyed its interest in such Purchased Assets and any related Purchased Items if an Event of Default shall then be continuing or shall be caused by such repurchase or if such repurchase gives rise to or perpetuates a Margin Deficit that is not satisfied in accordance with Section 6.3(b). With respect to Related Mortgage Loans, Seller is obligated to obtain the related Mortgage Loan Documents from the Custodian at Seller’s sole cost and expense on or following the Repurchase Date. Upon Buyer’s confirmation that it received the Repurchase Price for the related Purchased Assets, or as otherwise agreed in any Joint Securities Account Control Agreement or Intercreditor Agreement related to the repurchase of such Purchased Assets, Buyer shall be deemed to have released its security interest in the related Purchased Asset and any related Purchased Items in each case without any further action by Buyer or any other Person and such Purchased Asset and any related Purchased Items shall be transferred to Seller (or its designee) free and clear of any liens, pledges or encumbrances. On the Repurchase Date (or such other date on which the Repurchase Price is received in full by Buyer), Seller shall, with the prior written consent of Buyer, take such action, if any, that is necessary to revise the Participation Certificate (as defined in the Participation Agreement) to reflect the removal of the applicable Related Mortgage Loans or Mortgage- Backed Securities, as applicable, with respect to the applicable Purchased Assets and any related Purchased Items to the extent such Related Mortgage Loans are not removed from the Trust Receipt incorporated by reference into the Participation Certificate pursuant to Section 2(c) of the Participation Agreement, and Seller shall provide Buyer with evidence of the same. To the extent any Uniform Commercial Code financing statement filed against Seller by
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Buyer specifically identifies such Purchased Asset and any related Purchased Items upon Seller’s request, and at the sole cost and expense of Seller and within reasonable time to file such Uniform Commercial Code financing statement, Buyer shall deliver an amendment thereto or termination thereof evidencing the release of such Purchased Asset and any related Purchased Items from Buyer’s security interest therein. Any such transfer or release shall be without recourse to Buyer and without representation or warranty by Buyer, other than that Buyer shall be deemed to represent and warrant to Seller that, immediately prior to the release of the related Mortgage Loan, and to the extent that good title was transferred and assigned by Seller to Buyer hereunder on the related Purchase Date, that the condition of title to the Mortgage Loan and lien on the related Mortgaged Property shall be substantially the same as conveyed to the Buyer, unless such change was the result of the Seller’s actions.
4.2 Repurchase Acceleration Events. In respect of any Purchased Asset, the occurrence of any of the following events shall be a Repurchase Acceleration Event with respect to one or more Purchased Assets, as the case may be:
(a) Buyer has determined that the Purchased Asset is a Defective Asset;
(b) [***] calendar days elapse from the date the related Mortgage Loan Documents were delivered to an Approved Investor and such Approved Investor has not returned such Mortgage Loan Documents or purchased such Purchased Asset, unless an extension is granted by Buyer in its sole and absolute discretion;
(c) [***] Business Days elapse from the date of a related Mortgage Loan Document was delivered to Seller or the related Servicer for correction or completion or for servicing purposes pursuant to Section 5 of the Custodial and Disbursement Agreement, without being returned to Buyer or the Custodian;
(d) with respect to a Wet Mortgage Loan, Seller fails to deliver to Buyer the related Mortgage Loan Documents pursuant to the Custodial and Disbursement Agreement on or prior to the expiration of the Maximum Dwell Time with respect to Seller’s obligation to deliver the related Mortgage Loan Documents in accordance with the Custodial and Disbursement Agreement;
(e) regardless of whether a Purchased Asset is a Defective Asset, a foreclosure or similar type of proceeding is initiated with respect to such Related Mortgage Loan;
(f) the further sale of a Purchased Asset or Related Mortgage Loan by Seller or Guarantor to any party other than an Approved Investor;
(g) [reserved];
(h) with respect to any Pooled Mortgage Loan, if the applicable Agency has not issued the related Mortgage-Backed Security in accordance with the Joint Securities Account Control Agreement on the related Settlement Date;
(i) with respect to any Mortgage-Backed Security that is subject to a Transaction pursuant to Section 3.7, if Buyer (or its designee) has not received the related Takeout Price from the
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Approved Investor on the related Settlement Date set forth in the related Purchase Commitment, as applicable.
4.3 [Reserved]
4.4 Illegality. Notwithstanding anything to the contrary in this Agreement, if Buyer determines that any law, regulation, treaty or directive or any change therein or in the interpretation or application thereof, or any circumstance materially and adversely affecting the London interbank market, the repurchase market for mortgage loans or mortgage-backed securities or the source or cost of Buyer’s funds, in any case shall make it unlawful for Buyer to enter into or maintain Transactions as contemplated by this Agreement, (a) Buyer shall cease to have any obligation hereunder to enter into or to continue to maintain Transactions and any such obligations shall be cancelled, (b) the Repurchase Price for each Transaction then outstanding shall be due and payable upon the earliest to occur of (i) the date required by any financial institution providing funds to Buyer, (ii) the sale of the Purchased Assets in accordance with and subject to the terms of this Agreement; it being understood that this clause (ii) does not expand Buyer’s rights to sell such Purchased Assets beyond the rights otherwise afforded to Buyer pursuant to this Agreement and (iii) the date as of which Buyer determines that such Transactions are unlawful to maintain. Buyer shall not be liable to Seller for any costs, losses or damages arising from or relating to any actions taken by Buyer pursuant to this Section 4.4 and (c) Seller’s obligation to pay any Non-Usage Fee or Minimum Utilization Fee shall terminate upon such determination and Buyer shall reimburse Seller a pro-rated portion of the Upfront Fee based on the number of days remaining prior to the Expiration Date.
4.5 Increased Costs.
(a) Notwithstanding anything to the contrary in this Agreement, if Buyer determines in good faith that any change in any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority or any change in the interpretation or application thereof or compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof (i) subjects Buyer to any tax of any kind whatsoever with respect to this Agreement or any Purchased Assets or changes the basis of taxation of payments to Buyer in respect thereof, in each case excluding any Indemnified Taxes (which shall be governed by Section 12.3), Taxes described in clauses (b) through (d) of the definition of Excluded Taxes, and Connection Income Taxes, (ii) imposes, modifies or holds applicable any reserve, special deposit, compulsory advance or similar requirement against assets held by deposits or other liabilities in or for the account of Transactions or extensions of credit by, or any other acquisition of funds by any office of Buyer which is not otherwise included in the determination of the Applicable Pricing Rate hereunder, or (iii) imposes on Buyer any other condition, the result of which is to increase the cost to Buyer, by an amount which Buyer reasonably deems to be material, of effecting or maintaining purchases hereunder, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, Seller shall, at its option and in its sole and absolute discretion, either (1) terminate all of the Transactions and repurchase all of the Purchased Assets or (2) promptly pay Buyer such additional amount or amounts as will compensate Buyer for such increased cost or reduced amount receivable thereafter incurred.
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(b) If Buyer has determined in good faith that the adoption of or any change in any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof has the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer to be material, then from time to time, Seller shall, at its option and in its sole and absolute discretion, either (1) terminate all of the Transactions and repurchase all of the Purchased Assets or (2) promptly pay Buyer such additional amount or amounts as will thereafter compensate Buyer for such reduction.
If Buyer becomes entitled to claim any additional amounts pursuant to this Section 4.5, it shall promptly notify Seller of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by Buyer to Seller shall be conclusive in the absence of manifest error, provided that if Buyer fails to give notice to Seller of the imposition of any Indemnified Taxes within 120 days following its receipt of actual written notice of the imposition of such Taxes, there will be no obligation for Seller to pay interest or penalties attributable to the period beginning after such 120th day and ending seven (7) days after Seller receives notice from Buyer.
4.6 Effect of Benchmark Transition Event.
(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Principal Agreements, if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Principal Agreement in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Principal Agreement and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Principal Agreement in respect of any Benchmark setting at or after 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to a Responsible Officer of Seller without any amendment to this Agreement or further action or consent of Seller.
(b) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Buyer will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Principal Agreement, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Seller.
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(c) Notices; Standards for Decisions and Determinations. The Buyer will promptly notify the Seller of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Upon its receipt of such notice, Seller shall, at its option and in its sole and absolute discretion, either (1) terminate all of the Transactions and repurchase all of the Purchased Assets without being required to pay any Non-Use Fees or (2) agree to such Benchmark Replacement. Any determination, decision or election that may be made by Buyer pursuant to this Section 4.6, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding and may be made in Buyer’s sole and absolute discretion.
(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Principal Agreement, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or LIBOR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by Buyer or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Buyer may modify the definition of “Collection Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above, either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Buyer may modify the definition of “Collection Period” for all determinations of interest at or after such time to reinstate such previously removed tenor.
4.7 Payments Pursuant to Sale to Approved Investors. Seller or Guarantor shall direct each Approved Investor purchasing a Purchased Asset, Mortgage-Backed Security with respect to a Purchased Asset or Related Mortgage Loan to pay directly to Buyer or its designee in accordance with Buyer’s wire instructions set forth on Exhibit F or the Joint Securities Account Control Agreement and Intercreditor Agreement as directed by Buyer, by wire transfer of immediately available funds to the Funding Deposit Account, the applicable Takeout Price in full and without set-off on the date set forth in the applicable Purchase Commitment. In addition, Seller or Guarantor shall provide Buyer with a Purchase Advice relating to such payment. Neither Seller nor Guarantor shall direct the Approved Investor to pay to Buyer an amount less than the full Takeout Price or modify or otherwise change the wire instructions for payment of the Takeout Price provided to Approved Investor by Buyer. Buyer shall apply all amounts received from an Approved Investor for the account of Seller in accordance with Section 4.8, subject to Section 4.13. Buyer may reject any such shortfalls, any amount received from an Approved Investor and not release the related Purchased Asset, Mortgage-Backed Security with respect to a Purchased Asset or Related Mortgage Loan if (a) Buyer does not receive a Purchase Advice in respect of any wire transfer, (b) Buyer does not receive the full Takeout Price, without set-off or
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(c) the amount received from the Approved Investor and, if applicable, Seller is not sufficient to pay the related Repurchase Price in full. Alternatively, in lieu of rejecting an amount received by Buyer from an Approved Investor, at Buyer’s option, if the amount received from the Approved Investor does not equal or exceed the related Repurchase Price, Buyer may accept the amount received from the Approved Investor and demand payment of such remaining amount from Seller and Seller, upon receipt of such demand from Buyer, shall promptly pay Buyer on the date of such demand such remaining amount; provided that if such demand is received after [***] on a Business Day, such amounts shall be paid to Buyer on the next Business Day. If Seller or Guarantor receives any funds intended for Buyer, Seller or Guarantor shall segregate and hold such funds in trust for Buyer and promptly pay to Buyer all such amounts by wire transfer of immediately available funds to the Funding Deposit Account in accordance with Buyer’s wire instructions set forth on Exhibit F together with providing Buyer with a settlement statement for the transaction; provided that if such amounts are received after [***] on a Business Day, such amounts shall be paid to Buyer on the next Business Day.
4.8 Distributions of Funds from the Funding Deposit Account. Buyer shall cause funds paid by Seller, any Servicer or an Approved Investor and on deposit in the Funding Deposit Account to be applied by the Funding Deposit Account Bank on the same day that such funds were deposited in the Funding Deposit Account as follows:
(a) first, to Buyer the outstanding Repurchase Price of any Resolved Asset; provided, however, that Buyer shall be entitled, in its sole and absolute discretion, to not apply any portion of such Repurchase Price included in the Repurchase Price pursuant to clause (c) of the definition of “Repurchase Price” and instead, to include such portion of such Repurchase Price in a subsequent invoice provided by Buyer to Seller pursuant to Section 2.6(b);
(b) second, to satisfy any outstanding Margin Deficit as provided in Section 6.3(b); and
(c) third, subject to Section 4.13, to Seller, by remitting such amounts to Guarantor’s operating account as directed in writing by Guarantor to Buyer, or, if an Event of Default has occurred and is continuing, to the Collection Account (as defined in the Credit Agreement).
Buyer and Seller intend and agree that all such payments shall be “settlement payments” as such term is defined in Bankruptcy Code Section 741(8).
4.9 Method of Payment. Except as otherwise specifically provided herein, all payments hereunder must be received by Buyer on the date when due and shall be made in United States dollars by wire transfer of immediately available funds to the Funding Deposit Account in accordance with Buyer’s wire instructions set forth on Exhibit F. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the due date thereof shall be the succeeding Business Day, and with respect to payments of the Purchase Price, the Price Differential thereon shall be payable at an annual rate equal to the sum of the Applicable Pricing Rate plus the applicable Type Margin during such extension. All payments made by or on behalf of Seller with respect to any Transaction shall be applied in accordance with Section 4.13 and Section 4.8 and shall be made in such amounts as may be necessary in order that all such payments after withholding for or on account of any present or future Indemnified Taxes imposed by any Governmental Authority, compensate Buyer for any additional cost or reduced amount
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receivable of making or maintaining Transactions as a result of such Indemnified Taxes, as set forth, and subject to, Sections 4.5 and 12.3. All payments to be made by or on behalf of Seller with respect to any Transaction shall be made without set-off, counterclaim or other defense, unless otherwise expressly permitted by Buyer in writing in Buyer’s sole and absolute discretion.
4.10 [Reserved]
4.11 [Reserved].
4.12 Full Recourse. The obligations of Seller from time to time to pay the Repurchase Price, Margin Deficit payments, settlement payments and all other amounts due under this Agreement shall be full recourse obligations of Seller.
4.13 Payments to Seller. Buyer shall pay, or cause to be paid to, Seller all amounts in excess of those amounts due to Buyer in accordance with the Principal Agreements on the date on which both (1) a payment by Guarantor, Seller or an Approved Investor pursuant to a Purchase Commitment and (2) a Purchase Advice relating to such payment without discrepancy has been made to the Funding Deposit Account in accordance with Buyer’s wire instructions set forth on Exhibit F; provided, however, that funds and Purchase Advices received by Buyer after [***] (New York City time) shall be deemed to have been received on the next Business Day. Buyer shall use commercially reasonable efforts to notify Seller if there is a discrepancy between a wire transfer and the related Purchase Advice, and thereafter, Seller shall notify Buyer as to whether Buyer should accept such settlement payment despite the discrepancy between the amount received and the related Purchase Advice; provided, however, that if an Event of Default or Default has occurred and is continuing, Buyer is not obligated to receive approval from Seller prior to accepting any amounts received and releasing the related Purchased Assets.
ARTICLE 5
FEES
FEES
5.1 Payment of Fees. Seller shall promptly pay to Buyer those fees set forth in this Agreement and the Transactions Terms Letter when they become due and owing. Without limiting the generality of the foregoing, the Upfront Fee shall be paid on or before the Initial Closing Date. In addition, Seller shall pay any fees payable to the Disbursement Agent pursuant to the Custodial and Disbursement Agreement and shall pay any fees payable to any Calculation Agent appointed by Buyer, or reimburse Buyer for any such fees payable to any such Calculation Agent, based upon invoices, from time to time, provided by Buyer to Seller.
ARTICLE 6
SECURITY; SERVICING; MARGIN ACCOUNT MAINTENANCE; CUSTODY OF MORTGAGE LOAN DOCUMENTS; REPURCHASE TRANSACTIONS; DUE DILIGENCE
SECURITY; SERVICING; MARGIN ACCOUNT MAINTENANCE; CUSTODY OF MORTGAGE LOAN DOCUMENTS; REPURCHASE TRANSACTIONS; DUE DILIGENCE
6.1 Precautionary Grant of Security Interest in Purchased Assets and Purchased Items. With respect to the Purchased Assets, although the parties intend that all Transactions hereunder be sales and purchases (other than for accounting and tax purposes) and not loans, and without prejudice to the provisions of Section 6.5 and the expressed intent of the parties, in the event any such Transactions are deemed to be loans or a court or other forum recharacterizes the Transactions hereunder as other than sales, and in any event, Seller and Guarantor hereby pledge, assign and grant to Buyer, as security for the performance of Seller’s obligations hereunder, and Guarantor’s obligations under the Guaranty, and each of Guarantor and Seller hereby pledges, assigns and
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grants to Buyer as security for the performance of Seller’s obligations hereunder and as additional credit enhancement, in each case, a first priority security interest in and lien in all of their respective right, title and interest to, in and under the Purchased Assets (including the related Servicing Rights) and related Purchased Items and Buyer shall have all the rights and remedies of a “secured party” under the Uniform Commercial Code with respect to the Purchased Assets, related Purchased Items, the Related Mortgage Loans and Principal Agreements. Possession of any promissory notes, instruments or documents by the Custodian shall constitute possession on behalf of Buyer. Each of Seller and Guarantor acknowledges that Buyer is the owner of a Participation Interest in the Servicing Rights related to any Related Mortgage Loan, but, for the avoidance of doubt, Buyer acknowledges that Guarantor retains legal title to the Servicing Rights in respect of the Mortgage Loans constituting the Purchased Assets. Without limiting the generality of the foregoing and for the avoidance of doubt, if any determination is made that a Participation Interest in the Servicing Rights related to any Related Mortgage Loan were not sold to Buyer or that the Servicing Rights are not an interest in such Related Mortgage Loan and are severable from such Related Mortgage Loan despite Buyer’s, Guarantor’s and Seller’s express intent herein and the other Principal Agreement to treat a Participation Interest in them as included in the purchase and sale transaction, each of Guarantor and Seller hereby pledges, assigns and grants to Buyer a continuing first priority security interest in and lien upon the Servicing Rights related to such Related Mortgage Loans, and Buyer shall have all the rights and remedies of a “secured party” under the Uniform Commercial Code with respect thereto. In addition, each of Seller and Guarantor further grants, assigns and pledges to Buyer a first priority security interest in each of its respective right, title and interest in, and a lien upon, its rights to (i) all documentation and rights to receive documentation related to the Servicing Rights and the servicing of each of the Related Mortgage Loans, (ii) all Income related to the Purchased Assets received by Guarantor or Seller, (iii) all rights to receive such Income, (iv) all other Purchased Items, and (v) all products, proceeds and distributions relating to or constituting any or all of the foregoing (collectively, and together with the pledge of Servicing Rights in the immediately preceding sentence, the “Related Credit Enhancement”). The Related Credit Enhancement is hereby pledged as further security for Guarantor’s and Seller’s obligations to Buyer hereunder and under any other Principal Agreement.
At any time and from time to time, upon the written request of Buyer, and at the sole cost and expense of Seller and Guarantor, Seller and Guarantor will promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents (including any additional security agreements to effect the terms herein that Buyer determines to be necessary), and take such further action as Buyer may request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, and necessary to fully perfect the Buyer’s security interest created hereby, including the filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the Purchased Assets and related Purchased Items and the liens created hereby. Each of Seller and Guarantor also hereby authorizes Buyer to file any such financing or continuation statement in a manner consistent with this Agreement to the extent permitted by Applicable Law. Each of Seller and Guarantor acknowledges and agrees that its rights with respect to the Related Credit Enhancements are and shall continue to be at all times junior and subordinate to the rights of Buyer hereunder. For purposes of the Uniform Commercial Code and all other relevant purposes, this Agreement shall constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
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6.2 Servicing.
(a) Servicing. In recognition that Guarantor retains bare legal title to the Servicing Rights in respect of each Related Mortgage Loan, subject to paragraphs (b) and (c) below, Guarantor shall continue to service the Related Mortgage Loans directly or another Servicer shall service the Related Mortgage Loans pursuant to the applicable Servicing Agreement and Servicer Notice.
(b) Appointment of Servicer. Upon the occurrence of an Event of Default and for so long as the Event of Default is continuing, Buyer shall have the right to direct the servicing of the Related Mortgage Loans subject to the applicable Servicing Agreement and Servicer Notice, if any, and in the event Guarantor is servicing such Mortgage Loans directly (i.e., without the use of any other Servicer), then Buyer may, in its sole and absolute discretion, appoint a successor servicer to service any Related Mortgage Loan (each a “Successor Servicer”). In the event of such an appointment, Guarantor and Seller, as applicable, shall perform all acts and take all action so that any part of the Mortgage Loan File and related Servicing Records held by Guarantor or Seller, together with all funds in the Custodial Account and other receipts relating to such Related Mortgage Loan, are promptly delivered to the Successor Servicer. Guarantor and Seller shall have no claim for servicing fees, lost profits or other damages if Buyer appoints a Successor Servicer in accordance with this Section 6.2(b). The fact that a Servicer may be entitled to a servicing fee for interim servicing of the Related Mortgage Loans or that Buyer may provide a separate notice of default to a Servicer regarding the servicing of the Related Mortgage Loans shall not affect or otherwise change Buyer’s ownership of a Participation Interest in the Servicing Rights related to the Related Mortgage Loans.
(c) Interim Servicing Period; No Servicing Fee or Income. Buyer shall have no right to terminate Guarantor or Servicer, as applicable, as the interim servicer other than during the existence and continuance of an Event of Default, subject to Seller’s appointment right set forth in the first sentence of Section 6.2(m).
(d) Servicing Agreement. If there is a Servicer of the Related Mortgage Loans other than Seller or Guarantor, Seller or Guarantor may, in either case in its discretion, enter into a Servicing Agreement and a Servicer Notice with such Servicer, which such Servicing Agreement shall be acceptable to Buyer in its sole and absolute discretion, and such Servicer Notice shall be substantially in the form attached hereto as Exhibit G or such other form approved by Buyer in its sole and absolute discretion. Without the prior written consent of Buyer, exercised in Buyer’s, neither Guarantor nor Seller shall agree to (1) any material, in Buyer’s sole and absolute discretion, modification, amendment or waiver of any Servicing Agreement, (2) any termination of any Servicing Agreement or (3) the assignment, transfer, amendment, or material deletion of any of its rights or obligations (in respect of any Related Mortgage Loan) under any Servicing Agreement.
(e) Servicing Obligations of Seller and Guarantor. Guarantor shall, or pursuant to the applicable Servicing Agreement, Seller or Guarantor, as applicable, shall cause, each Servicer to:
(i) service and administer the Related Mortgage Loans in accordance with Accepted Servicing Practices, the requirements of any private mortgage insurer, as
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applicable, and the requirements of any applicable Purchase Commitment and the related Approved Investor, so that neither the eligibility of the Related Mortgage Loan and any related Mortgage-Backed Security for purchase under such Purchase Commitment nor the FHA Mortgage Insurance, VA Loan Guaranty Agreement, RD Loan Guaranty Agreement or any other applicable insurance or guarantee in respect of any such Related Mortgage Loan, if any, is voided or reduced by such servicing and administration;
(ii) subject to Section 6.2(g), and to the extent not otherwise held by the Custodian, at all times maintain and safeguard the Mortgage Loan Documents for the Related Mortgage Loan in accordance with Accepted Servicing Practices and shall hold such Mortgage Loan File in trust for Buyer, and in any event shall maintain and safeguard photocopies of the documents delivered to Buyer or Custodian, as applicable, pursuant to Section 3.2, and accurate and complete records of its servicing of the Related Mortgage Loan; Guarantor’s, Seller’s or Servicer’s possession of such Mortgage Loan File is for the sole purpose of servicing such Related Mortgage Loan and such retention and possession by Guarantor, Seller or such Servicer is in a custodial capacity only
(iii) subject to Section 6.6, allow Buyer to, and Buyer may, at any time during Guarantor’s, Seller’s or Servicer’s business hours on reasonable notice, examine and make copies of such documents and records, and Guarantor or Seller or such Servicer shall deliver the originals of such documents and records to Buyer or its designee;
(iv) promptly deliver to Buyer monthly by the [***] calendar day of each month reports regarding the status of any Related Mortgage Loan being serviced by it, which reports shall be substantially in the form attached hereto as Exhibit L; and
(v) advance all reasonable, customary and/or necessary “out of pocket” costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Servicer in accordance with Accepted Servicing Practices.
(f) [Reserved]
(g) Release of Mortgage Loan Files. Guarantor or Seller shall release its custody of the contents of any Mortgage Loan File only in accordance in accordance with this Agreement and/or the Custodial and Disbursement Agreement.
(h) Custodial Account.
(i) Guarantor shall establish and maintain (or cause each Servicer to establish and maintain) a segregated time or demand deposit account with the Account Bank for the benefit of Buyer (the “Custodial Account”) and, following an Event of Default that has occurred and is continuing, shall promptly deposit or cause Servicer to deposit within [***] Business Days of receipt thereof into the Custodial Account all Income received with respect to each Purchased Asset sold hereunder. The Custodial Account may not be a deposit account that is established to serve as a custodial account for mortgage loans that Servicer services for other parties. Under no circumstances shall Servicer deposit any of
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its own funds into a Custodial Account or otherwise commingle its own funds, or funds belonging to the Seller, with funds belonging to Buyer as owner of any Purchased Asset. If Servicer fails to segregate any funds and commingles them with any source in breach of this Agreement, each of Seller and Guarantor agrees that its respective share of the commingled funds is assumed to have been spent first with any remaining balance to be deemed to belong to Buyer.
(ii) Seller and Guarantor hereby grant (or cause each Servicer to grant) Buyer a continuing first priority security interest in (1) all right, title, and interest in and to each Custodial Account and (2) any funds of Seller or Guarantor at any time deposited or held in each Custodial Account, whether such funds are required to be deposited and held in each Custodial Account or otherwise. Each of Seller and Guarantor agree that it will hold in trust for Buyer any amounts received by such party with respect to the Purchased Assets. Seller and Guarantor shall, as a condition precedent to Buyer’s obligation to enter into any Transaction hereunder, cause the Account Bank to enter into the Custodial Account Control Agreement with respect to the Custodial Account. The pledge and security interest contained in this paragraph shall be considered “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Bankruptcy Code Sections 101(38A)(A), 101(47)(a)(v) and 741(7)(A)(x). Each of Seller and Guarantor understands and agrees that the Custodial Account shall be subject to a Custodial Account Control Agreement.
(i) Location of Custodial Account. Each of Seller and Guarantor shall ensure that there is no change in the identity or the location of the Custodial Account without the prior written consent of Buyer.
(j) Accounting of Custodial Account. Seller and Guarantor shall provide, and shall cause Servicer to provide, Buyer with read-only access to the Custodial Account. Guarantor or Seller shall promptly deliver to each of Buyer and the Disbursement Agent photocopies of all periodic bank statements and other records relating to the Custodial Account as Buyer may from time to time request.
(k) Servicer Notice. As a condition precedent to Buyer funding the Purchase Price for any Purchased Asset with a Related Mortgage Loan serviced by a Servicer other than Guarantor or Seller, Buyer, Guarantor or Seller shall provide to Buyer a Servicer Notice addressed to and agreed to by the Servicer, advising the Servicer of such matters as Buyer may reasonably request, including, without limitation, recognition by the Servicer of Buyer’s ownership of the Related Mortgage Loans and ownership of a Participation Interest in the related Servicing Rights related thereto and the Servicer’s agreement that upon receipt of notice of an Event of Default or Servicer Termination Event, subject to Guarantor’s appointment right set forth in the first sentence of Section 6.2(m), from Buyer, it will follow the instructions of Buyer with respect to the servicing of the applicable Related Mortgage Loans.
(l) Notification of Servicer Defaults. If Seller or Guarantor should discover that for any reason whatsoever, any entity responsible to Guarantor or Seller by contract for managing or servicing any Related Mortgage Loan has failed to perform fully
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Guarantor’s or Seller’s obligations with respect to the management or servicing of such Related Mortgage Loan as required under this Agreement or any of the obligations of such entities with respect to the Related Mortgage Loan as delegated by Seller or Guarantor pursuant to any Servicing Agreement, Guarantor or Seller shall promptly notify Buyer.
(m) Termination. If a Servicer Termination Event with respect to a Servicer other than Guarantor shall occur (which has not been waived by Buyer in its sole and absolute discretion) and no Event of Default has occurred and is continuing, then Guarantor shall have the right to designate a successor Servicer acceptable to Buyer, in Buyer’s sole and absolute discretion, by proposing the identity of such successor Servicer to Buyer in writing no later than five (5) Business Days following the applicable Servicer Termination Event. If (x) Guarantor has not proposed a successor Servicer to Buyer in writing within five (5) Business Days following the applicable Servicer Termination Event in accordance with the immediately preceding sentence; (y) Buyer has not accepted, in Buyer’s sole and absolute discretion, the successor Servicer proposed by Guarantor to Buyer in accordance with the immediately preceding sentence within five (5) Business Days following such applicable Servicer Termination Event; or (z) the actual servicing of the Related Mortgage Loans has not been transferred to the successor Servicer proposed by Guarantor and in accordance with the immediately preceding sentence and accepted by Buyer, in Buyer’s sole and absolute discretion, within thirty (30) calendar days following the applicable Servicer Termination Event, then Buyer shall have the right at any time to immediately terminate, and Guarantor and Seller shall terminate any Servicer’s (as applicable) right to service the Related Mortgage Loans due to a Servicer Termination Event without payment of any penalty or termination fee. Seller and Guarantor (including Guarantor as Servicer) shall cooperate cause the applicable Servicer (other than Guarantor) to cooperate, in transferring the servicing of the Related Mortgage Loans to a successor servicer appointed or accepted, as applicable, by Buyer in accordance with the terms hereof. For the avoidance of doubt, any termination of a Servicer’s rights to service by Buyer as a result of an Event of Default of the type stated in Section 11.1(q) that has not been waived shall be deemed part of an exercise of Buyer’s rights to cause the liquidation, termination or acceleration of this Agreement.
(n) Buyer’s Right to Service. Buyer’s designee, upon the occurrence and during the continuance of an Event of Default or, subject to Guarantor’s appointment right set forth in the first sentence of Section 6.2(m), a Servicer Termination Event, shall be entitled to service some or all of the Related Mortgage Loans, including, without limitation, receiving and collecting all sums payable in respect of same. Upon Buyer’s determination and written notice to a Responsible Officer of Seller or a Servicer, with a copy to Guarantor, as applicable, that Buyer desires its designee to service some or all of the Related Mortgage Loans following the occurrence and during the continuance of an Event of Default, or, subject to Guarantor’s appointment right set forth in the first sentence of Section 6.2(m), a Servicer Termination Event, Seller and Guarantor shall promptly cooperate, and Seller and Guarantor shall cause the Servicer to promptly cooperate, with all instructions of Buyer and do or accomplish all acts or things necessary to effect the transfer of the servicing to Buyer’s designee, at Seller’s or Guarantor’s sole expense. Upon Buyer’s designee’s servicing of the Related Mortgage Loans, (i) Buyer may, in its own name, in the name of Guarantor or Seller, or otherwise demand, sue for,
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collect or receive any money or property at any time payable or receivable on account of or in exchange for such Related Mortgage Loan(s), but shall be under no obligation to do so; (ii) Guarantor or Seller shall, if Buyer so requests, pay to Buyer all amounts received by Guarantor or Seller upon or in respect of such Related Mortgage Loan(s) or other Purchased Assets, advising Buyer and its designee as to the source of such funds; and (iii) all amounts so received and collected by Buyer shall be held as part of the Purchased Assets or applied against any outstanding Repurchase Price owed Buyer.
(o) All Transactions Include a Participation Interest in Servicing Rights. Notwithstanding anything to the contrary in this Agreement or any other Principal Agreement, upon payment of the Purchase Price by Buyer to Seller, Buyer becomes the owner of a Purchased Asset, which includes a Participation Interest in the Servicing Rights related thereto. Notwithstanding anything to the contrary in this Agreement or any other Principal Agreement, the Servicing Rights related to the Purchased Assets are not severable from or to be separated from the Mortgage Loans related to the Purchased Assets and such Servicing Rights and other servicing provisions of this Agreement and any other Principal Agreement constitute (a) “related terms” under this Agreement within the meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security agreement or other arrangement or other credit enhancement related to the Principal Agreements. Buyer acknowledges that Guarantor retains legal title to the Mortgage Loans constituting the Purchased Assets and legal title to the Servicing Rights in respect of the Mortgage Loans constituting the Purchased Assets, and that the sale of the Participation Interest in the Servicing Rights does not sever the Servicing Rights from the Related Mortgage Loans.
6.3 Margin Account Maintenance.
(a) Asset Value. Buyer shall have the right to determine, in its sole and absolute discretion, the Asset Value of each Purchased Asset at any time in accordance with the terms hereof.
(b) Margin Deficit and Margin Call. If Buyer or its designee shall determine, in its sole and absolute discretion, at the close of business on any Business Day that the Minimum Maintenance Amount with respect to the Purchased Assets is less than the Aggregate Outstanding Purchase Price of all Transactions by an amount that exceeds $[***] (in any such case, a “Margin Deficit”), then Buyer may at in its sole and absolute discretion, and by notice to Seller (as such notice is more particularly set forth below, a “Margin Call”), require Seller to either:
(i) deposit cash into the Margin Call Reserve Account so that the Minimum Maintenance Amount will thereupon equal or exceed the Aggregate Outstanding Purchase Price (for purposes of clarity, after giving effect to any credit to the Purchase Price of the related Transaction(s) pursuant to Section 6.3(d)) of all Transactions; or
(ii) pay one or more Repurchase Prices in accordance with Section 6.4, as applicable, in an amount sufficient to reduce the related Purchase Price so that the Aggregate Outstanding Purchase Price of all Transactions is less than or equal to the Minimum Maintenance Amount.
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If Buyer delivers a Margin Call to Seller on any Business Day, then Seller shall transfer cash to Buyer no later than [***] (New York City time) on the next subsequent Business Day. Notice of a Margin Call may be provided by Buyer to Seller electronically or in writing, such as via electronic mail.
(c) Buyer’s Discretion. Buyer’s election not to make a Margin Call at any time there is a Margin Deficit shall not in any way limit or impair its right to make a Margin Call at any time a Margin Deficit exists.
(d) Credit to Repurchase Price. Any cash transferred to the Margin Call Reserve Account pursuant to this Section 6.3 shall be credited to the Purchase Price of the related Transaction(s).
6.4 Repurchase and Release of Purchased Assets. Provided that no Event of Default has occurred and is continuing Seller may repurchase a Purchased Asset by paying, or causing an Approved Investor to pay, to Buyer by depositing cash into the Funding Deposit Account in accordance with Buyer’s wire instructions set forth on Exhibit F, subject to Sections 4.6 and 4.7, the Repurchase Price, as calculated by Buyer in its sole and absolute discretion.
Upon receipt of the applicable Repurchase Price and, in the event the applicable Repurchase Price is received pursuant to Section 6.3(b)(ii), upon written request from Seller to Buyer, as applicable, as set forth above, Buyer shall (i) with respect to Related Mortgage Loans, deliver or shall cause the Custodian to deliver the related Mortgage Loan Documents to Seller or its designee, if such documents have not already been delivered pursuant to the related Bailee Agreement and (ii) with respect to related Mortgage-Backed Securities, deliver (or cause the delivery of) the Mortgage-Backed Security to Seller, its designee or Approved Investor, as applicable, on a delivery versus payment basis. In no event shall Buyer obligated to provide more releases on each Business Day than are required under the Custodial and Disbursement Agreement. If any such release gives rise to or perpetuates a Margin Deficit, Buyer shall notify Seller of the amount thereof and Seller shall thereupon satisfy the Margin Deficit in the manner specified in Section 6.3(b). Buyer shall have no obligation to release a repurchased Purchased Asset or terminate its security interest in such Purchased Asset until such Margin Deficit is satisfied and, in the event the applicable amount is received pursuant to Section 6.3(b)(ii), Seller has provided a prior written request for such release.
6.5 Repurchase Transactions. Beginning on the related Purchase Date and prior to the related Repurchase Date for a Transaction, Buyer shall have free and unrestricted use of all related Purchased Assets and may in its discretion and without notice to a Responsible Officer of Seller engage in repurchase transactions with respect to any or all of such Purchased Assets or otherwise pledge, hypothecate, assign, transfer or convey any or all of such Purchased Assets (such transactions, “Repurchase Transactions”), provided that no such Repurchase Transaction shall relieve such Buyer of its obligation to transfer Purchased Assets to Seller (and not substitutions thereof) pursuant to the terms hereof. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Asset or Purchased Item delivered to Buyer by Seller. Seller shall not be responsible for any additional obligations, costs or fees in connection with such Repurchase Transactions. Other than for tax and accounting purposes, each of Seller and Guarantor shall not take any action inconsistent with Buyer’s ownership of a Purchased Asset and shall not claim any legal, beneficial or other interest in such a Purchased Asset other than the limited right and
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obligations to provide servicing of such Related Mortgage Loans where Buyer designates Guarantor as servicer as provided in Section 6.2.
6.6 Periodic Due Diligence. Each of Guarantor and Seller acknowledges that Buyer has the right at any time during the term of this Agreement to perform continuing due diligence reviews with respect to the Purchased Assets, for purposes of verifying compliance with the representations, warranties, covenants and specifications made hereunder or under any other Principal Agreement, or otherwise, and each of Guarantor and Seller agrees that upon reasonable (but no less than [***] Business Day’s with respect to Guarantor and Seller, and such time period set forth in the applicable Servicing Agreement with respect to any other Servicer) prior written notice to a Responsible Officer of Guarantor (provided that upon the occurrence of an Event of Default which has not been waived by Buyer in writing, no such prior notice shall be required other than with respect to a Servicer other than Guarantor or Seller, in which case the terms of the applicable Servicing Agreement shall govern), Buyer or its authorized representatives will be permitted during normal business hours to (i) examine, inspect, make copies of, and make extracts of, the Mortgage Loan Files, the Servicing Records and any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of Guarantor, Seller, Custodian or Servicer and (ii) discuss the business, operations, assets and financial condition of Seller and Guarantor and their respective Affiliates and Subsidiaries with its officers and employees and to examine its books of account and make copies and/or extracts thereof. Further, Guarantor will make available to Buyer, at such time and location as Buyer may reasonably request, a knowledgeable financial or accounting officer and will instruct such officer to answer candidly and fully, at no cost to Buyer, any and all reasonable questions that any authorized representative of Buyer may address to them in reference to the Mortgage Loan Files, Purchased Assets and the financial condition or affairs of each of Seller and Guarantor and their respective Affiliates and Subsidiaries. Without limiting the generality of the foregoing, each of Guarantor and Seller acknowledges that Buyer shall purchase Assets from Seller based solely upon the information provided by Seller to Buyer in the Transaction Request and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right, at any time to re-underwrite any of the Purchased Assets and/or Related Mortgage Loans itself or engage a third party underwriter to perform such re-underwriting. Each of Guarantor and Seller agrees to reasonably cooperate with Buyer and any third party underwriter in connection with such re-underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to Guarantor and Seller and such Purchased Assets and/or Related Mortgage Loans in the possession, or under the control, of Seller or Guarantor. Seller, Guarantor and Buyer further agree that all reasonable and documented out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 6.6 shall be paid by Seller.
ARTICLE 7
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT
7.1 Initial Transaction.
(a) Initial Closing Date. As conditions precedent to the initial Transaction that occurred under the Existing Repurchase Agreement on or following the Initial Closing Date, Buyer shall have received on or before the day of such initial Transaction the following:
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(i) each of the “Principal Agreements” (as such term is defined by the Existing Repurchase Agreement) duly executed by each party thereto and in full force and effect, free of any modification, breach or waiver;
(ii) an opinion of Original Seller’s and Guarantor’s counsel as to such matters as Buyer may reasonably request, including, without limitation, with respect to Buyer’s lien on, and perfected security interest in, the Purchased Assets, the Purchased Items, and the Custodial Accounts; a non-contravention with all applicable law, enforceability and corporate opinion with respect to Original Seller and Guarantor and the Principal Agreements; an opinion with respect to the inapplicability of the Investment Company Act of 1940 and the “Volcker Rule” (Section 619 of the Dodd Frank Wall Street Reform and Consumer Protection Act), with respect to Original Seller; and a Bankruptcy Code opinion concerning applicability of Bankruptcy Code “securities contract” and “master netting agreement” safe harbors to the Principal Agreements, and the other matters set forth in Section 14.18, each in form and substance acceptable to Buyer in its reasonable discretion;
(iii) a Power of Attorney each duly executed by Original Seller and Guarantor, as applicable, and notarized; it being agreed by the Buyer that it shall not exercise the rights conferred pursuant to such Power of Attorney unless an Event of Default has occurred that is continuing;
(iv) a certified copy of (a) Original Seller’s certificate of formation and operating agreement, (b) Guarantor’s certificate of formation and operating agreement, (c) a certificate of good standing issued by the appropriate official in Original Seller’s and Guarantor’s applicable jurisdiction of organization, in each case, dated no less recently than fourteen (14) days prior to the date of this Agreement;
(v) one or more certificates of Original Seller’s and Guarantor’s corporate secretary as to the incumbency and authenticity of the signatures of the officers of Original Seller and Guarantor executing the Principal Agreements and the resolutions of the board of directors of Original Seller and Guarantor (or their respective equivalent governing body or Person);
(vi) independently audited financial statements of Guarantor (and its Subsidiaries, on a consolidated basis) for each of the two (2) fiscal years most recently ended (if available), containing a balance sheet and related statements of income, stockholders’ equity and cash flows, all prepared in accordance with GAAP, applied on a basis consistent with prior periods, and otherwise acceptable to Buyer, together with an auditor’s opinion that is unqualified or otherwise is consented to in writing by Buyer;
(vii) interim financial statements of Guarantor (and its Subsidiaries, on a consolidated basis) covering the period from the first day of the current fiscal year to the last day of the most recently ended financial quarter;
(viii) copies of Guarantor’s errors and omissions insurance policy or mortgage impairment insurance policy and blanket bond coverage policy or certificates of
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insurance for such policies, all in form and content satisfactory to Buyer, showing compliance by Guarantor with Section 9.10;
(ix) any other fees then due and owing under this Agreement and the Transactions Terms Letter;
(x) a copy of the applicable Underwriting Guidelines for Mortgage Loans;
(xi) the Upfront Fee and any other fees then due and owing under this Agreement and the Transactions Terms Letter;
(xii) solely with respect to Dry Mortgage Loans subject to the initial Transaction, an executed Trust Receipt from the Custodian relating to such Dry Mortgage Loans substantially in the form as set forth in the Custodial and Disbursement Agreement.
(xiii) Buyer shall have determined that it has received satisfactory evidence that the appropriate Uniform Commercial Code Financing Statements (UCC-1) and/or such other instruments as may be necessary in order to create in favor of Buyer, a perfected first- priority security interest in the Purchased Assets and related Purchased Items should any of the Transactions be deemed to be loans, and same shall have been duly executed and appropriately filed or recorded in each office of each jurisdiction in which such filings and recordations are required to perfect such first-priority security interest;
(xiv) Buyer shall have determined that it has satisfactorily completed its due diligence review of Original Seller’s operations, business, financial condition and underwriting and origination of Mortgage Loans; and
(xv) Guarantor and Seller shall have provided evidence, satisfactory to Buyer, that each of Seller and Guarantor has all of its Approvals and such Approvals are in good standing.
(b) Effective Date. As conditions precedent to Buyer considering whether to enter into the initial Transaction hereunder on or after the Effective Date:
(i) each of the Principal Agreements duly executed by each party thereto and in full force and effect, free of any modification, breach or waiver;
(ii) an opinion of Seller’s and Guarantor’s counsel as to such matters as Buyer may reasonably request, including, without limitation, with respect to Buyer’s lien on, and perfected security interest in, the Purchased Assets, the Purchased Items, and the Custodial Accounts; a non-contravention with all applicable law, enforceability and corporate opinion with respect to Seller and Guarantor and the Principal Agreements; an opinion with respect to the inapplicability of the Investment Company Act of 1940 and the “Volcker Rule” (Section 619 of the Dodd Frank Wall Street Reform and Consumer Protection Act), with respect to Seller; and a Bankruptcy Code opinion concerning applicability of Bankruptcy Code “securities contract” and “master netting agreement” safe harbors to the
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Principal Agreements, and the other matters set forth in Section 14.18, each in form and substance acceptable to Buyer in its reasonable discretion;
(iii) a Power of Attorney each duly executed by Seller and Guarantor, as applicable, and notarized; it being agreed by the Buyer that it shall not exercise the rights conferred pursuant to such Power of Attorney unless an Event of Default has occurred that is continuing;
(iv) a certified copy of (a) Seller’s certificate of formation and operating agreement, (b) Guarantor’s certificate of formation and operating agreement, (c) a certificate of good standing issued by the appropriate official in Seller’s and Guarantor’s applicable jurisdiction of organization, in each case, dated no less recently than fourteen (14) days prior to the date of this Agreement;
(v) one or more certificates of Seller’s and Guarantor’s corporate secretary as to the incumbency and authenticity of the signatures of the officers of Seller and Guarantor executing the Principal Agreements and the resolutions of the board of directors of Seller and Guarantor (or their respective equivalent governing body or Person);
(vi) [Reserved];
(vii) [Reserved];
(viii) copies of Guarantor’s errors and omissions insurance policy or mortgage impairment insurance policy and blanket bond coverage policy or certificates of insurance for such policies, all in form and content satisfactory to Buyer, showing compliance by Guarantor with Section 9.10;
(ix) any other fees then due and owing under this Agreement and the Transactions Terms Letter;
(x) [Reserved];
(xi) [Reserved];
(xii) solely with respect to Dry Mortgage Loans subject to the initial Transaction, an executed Trust Receipt from the Custodian relating to such Dry Mortgage Loans substantially in the form as set forth in the Custodial and Disbursement Agreement;
(xiii) Buyer shall have determined that it has received satisfactory evidence that the appropriate Uniform Commercial Code Financing Statements (UCC-1) and/or such other instruments as may be necessary in order to create in favor of Buyer, a perfected first- priority security interest in the Purchased Assets and related Purchased Items should any of the Transactions be deemed to be loans, and same shall have been duly executed and appropriately filed or recorded in each office of each jurisdiction in which such filings and recordations are required to perfect such first-priority security interest;
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(xiv) Buyer shall have determined that it has satisfactorily completed its due diligence review of Seller’s operations, business, financial condition and underwriting and origination of Mortgage Loans; and
(xv) the Participation Certificate registered in the name of Buyer.
7.2 All Transactions. As conditions precedent to Buyer considering whether to enter into any Transaction hereunder (including the initial Transaction under the Existing Repurchase Agreement), or whether to continue a Transaction, in the case of a Transaction in respect of Mortgage Loans which convert to Pooled Mortgage Loans on the related Pooling Date or a Transaction in respect of Pooled Mortgage Loans which convert to a Mortgage-Backed Security on the related Settlement Date, as applicable:
(a) Seller shall have delivered to Buyer and Disbursement Agent, as applicable, in form and substance satisfactory to Buyer and not later than [***] (New York City time) on the requested Purchase Date:
(i) a Transaction Request for the Assets subject to the proposed Transaction; and
to the Custodian, a complete Mortgage Loan File for each Mortgage Loan subject to the proposed Transaction, unless such Mortgage Loan is a Wet Mortgage Loan.
(b) Pursuant to Section 3.1, Seller shall have delivered to Buyer a Prefunding Request on the Business Day prior to the Purchase Date for the Transactions with respect to which Seller anticipates that Seller will deliver, or has delivered, Transaction Requests with respect to such Purchase Date;
(c) an amount equal to the Haircut for all Mortgage Loans proposed to be sold under such Transaction shall be on deposit in the Wire-out Account;
(d) for all Wet Mortgage Loans proposed to be sold under such Transaction, the documents required to be delivered as required pursuant to Section 3.6(a);
(e) solely with respect to Dry Mortgage Loans, an executed Trust Receipt from the Custodian relating to such Dry Mortgage Loans in form and substance as set forth in the Custodial and Disbursement Agreement;
(f) [Reserved];
(g) [Reserved];
(h) Seller shall have paid all fees (including Non-Usage Fees, Minimum Utilization Fees, Margin Deficits and Upfront Fees), expenses, indemnity payments and other amounts that are then due and owing under the Principal Agreements;
(i) no rescission notice and/or notice of right to cancel shall have been improperly delivered to the Mortgagor in respect of any Eligible Mortgage Loan, and the rescission period related to such Eligible Mortgage Loan shall have expired, except in all cases for Mortgage Loans that no longer constitute Related Mortgage Loans;
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(j) Seller shall have designated an Approved Payee, if applicable, to whom such funds shall be delivered;
(k) the representations and warranties of Guarantor and Seller set forth in Article 8 hereof shall be true and correct in all material respects as if made on and as of the date of each Transaction;
(l) Seller and Guarantor shall have performed all agreements to be performed by them hereunder and under the Principal Agreements, respectively;
(m) no Default, Event of Default or Material Adverse Effect with respect to Seller or Guarantor shall have occurred and be continuing or would result from such Transaction;
(n) no Servicer Termination Event shall have occurred and be continuing and, at any time at which Seller or Guarantor is not the Servicer, to the extent not already provided, a Servicing Agreement duly executed by the applicable Servicer and Seller or Guarantor, as applicable, or a Servicer Notice, if applicable, shall have been delivered to Buyer and the current Servicer has been approved by Buyer;
(o) [Reserved];
(p) Guarantor or Seller shall have deposited (or have caused the Servicer to deposit) all amounts required under Section 6.2(h) into the Custodial Account;
(q) [Reserved];
(r) the Purchase Price for each proposed Transaction shall not cause (i) the Aggregate Outstanding Purchase Price to exceed the Aggregate Transaction Limit, and (ii) the Aggregate Outstanding Purchase Price for all relevant Purchased Assets to exceed the product of the applicable Type Sublimit (expressed as a decimal and as determined by the Type of Purchased Asset) and the Aggregate Outstanding Purchase Price;
(s) [Reserved];
(t) [Reserved];
(u) no unfulfilled claim has been made by Buyer under the Guaranty and Security Agreement; and
(v) as determined by Buyer in its sole and absolute discretion exercised in good faith, (A) no Material Adverse Effect shall have occurred and be continuing, or (B) there shall not have occurred any event or circumstance that would reasonably be expected to have a Material Adverse Effect.
For the avoidance of doubt, notwithstanding that the foregoing conditions may be satisfied with respect to any Transaction with respect to the Uncommitted Amount request, Buyer shall be under no obligation to enter into any Transaction with respect to the Uncommitted Amount and whether Buyer enters into any Transaction shall be at the discretion of Buyer.
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7.3 Satisfaction of Conditions. The entering into of any Transaction prior to or without the fulfillment by Guarantor and Seller of all the conditions precedent thereto, whether or not known to Buyer, shall not constitute a waiver by Buyer of the requirements that all conditions, including the non- performed conditions, shall be required to be satisfied with respect to all Transactions. All conditions precedent hereunder are imposed solely and exclusively for the benefit of Buyer and may be freely waived or modified in whole or in part by Buyer. Any waiver or modification asserted by Seller or Guarantor to have been agreed by Buyer must be in writing. Buyer shall not be liable to Seller or Guarantor for any costs, losses or damages arising from Buyer’s determination that Seller or Guarantor has not satisfactorily complied with any applicable condition precedent.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties Concerning Seller and Guarantor. Each of Seller and Guarantor represents and warrants to and covenants with Buyer that the following representations and warranties are true and correct (i) solely with respect to the Guarantor, from the Initial Closing Date and (ii) with respect to both Seller and Guarantor, from the Effective Date, in each case through and until the date on which all obligations of Seller and Guarantor under the Principal Agreements are fully satisfied:
(a) Due Formation and Good Standing; Equity Interests and Ownership. Each of Seller and Guarantor (i) is a duly organized and validly existing corporation or statutory trust, in good standing under the laws of its jurisdiction of organization, (ii) has the corporate power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage, and (iii) is duly qualified, in good standing and is authorized to do business in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and would not be reasonably expected to have, a Material Adverse Effect. Schedule 2 correctly sets forth the ownership interest of Seller and Guarantor and each of their Subsidiaries and Affiliates in their respective Subsidiaries as of the Effective Date.
(b) Authorization; Enforceable Obligation. Each of Seller and Guarantor has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Principal Agreements to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Principal Agreements to which it is party. Each of Seller and Guarantor has duly executed and delivered each Principal Agreement to which it is party and each Principal Agreement to which it is party constitutes the legal, valid and binding agreement and obligation of it enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(c) No Conflict. The execution, delivery and performance by each of Seller and Guarantor of the Principal Agreements to which it is a party and the consummation of the transactions contemplated by the Principal Agreements do not and shall not (a) violate (i) any
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Applicable Law which violation would reasonably be expected to have a Material Adverse Effect, (ii) any of the organizational documents of Seller or Guarantor, (iii) any order, judgment, injunction or decree of any court or other agency of government binding on Seller or Guarantor, or (iv) any indenture, loan agreement, warehouse line of credit, repurchase agreement, mortgage, deed of trust, servicing contract or any other material contractual obligation of Seller or Guarantor except to the extent such violation would not reasonably be expected to have a Material Adverse Effect; (b) result in or require the creation or imposition of any Lien upon any of the properties or assets of Seller or Guarantor (other than any Liens created under any of the Principal Agreements in favor of the Buyer); or (c) require any approval of stockholders, members or partners or any approval or consent of any Person under any material contractual obligation of Seller or Guarantor, except for such approvals or consents which have been obtained on or before the Effective Date.
(d) Government Approvals. Except any which have been obtained, no order, consent, authorization, approval, license, or validation of, or filing recording, registration with, or exemption by, any Governmental Authority is required to authorize or is required as a condition to: (i) the execution, delivery and performance by Seller or Guarantor of any Principal Agreement to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Principal Agreement to which Seller or Guarantor is a party.
(e) Agreements. It is not a party to any agreement, instrument, or indenture or subject to any restriction that materially and adversely affects its business, operations, assets or financial condition, except, with respect to Guarantor, as disclosed in the financial statements described in Section 8.1(f). It is not in breach or default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement, instrument, or indenture which default would reasonably be expected to have a Material Adverse Effect on it. There are no breaches or defaults under the Principal Agreements to which it is a party.
(f) Financial Condition. The financial statements of Guarantor delivered to the Buyer on or prior to the Effective Date fairly present in all material respects on a consolidated basis the assets, liabilities and financial position of Guarantor as at the dates of such financial statements, and the results of the operations and changes of financial position for the periods then ended (other than customary year-end adjustments for unaudited financial statements). For the avoidance of doubt, the financial statements described in the preceding sentence (the receipt of which is hereby acknowledged by Buyer) consist of copies of (i) each of Guarantor’s balance sheets for the fiscal years of Guarantor ended December 31, 2018 and December 31, 2019 and the related statements of income, cash flows, and shareholders’ equity for Guarantor for such fiscal years, with the opinion thereon of Seller’s and Guarantor’s independent accountants and (ii) Guarantor’s balance sheet for the quarterly fiscal period of Seller ended December 31, 2020 and the related statement of income for Seller and Guarantor for such quarterly fiscal period. All such financial statements are complete and correct and fairly present, in all material respects, the financial condition of Guarantor and the results of their respective operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. Since the date of the most recent financial statements referenced above for each Guarantor, there has been no Material Adverse Change in the consolidated
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business, operations or financial condition of Guarantor from that set forth in such financial statements nor is Guarantor aware of any state of facts which (with notice or the lapse of time) reasonably would be expected to result in any such Material Adverse Change. Guarantor has, on the date of the statements delivered pursuant to this clause (f) no material liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or material 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 Guarantor except as heretofore disclosed to the Buyer in writing.
(g) [Reserved].
(h) [Reserved].
(i) Litigation. There is no action, proceeding or investigation pending involving Seller or Guarantor or, to the best of Seller’s and Guarantor’s knowledge, threatened in writing against Seller or Guarantor before any Governmental Authority or Agency (A) asserting the invalidity of this Agreement, any Principal Agreement or any transaction contemplated hereunder, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, any Principal Agreement or any transaction contemplated hereunder or (C) making a claim individually or in the aggregate that would reasonably be expected to result in a Material Adverse Effect.
(j) Payment of Taxes. Each of Seller and Guarantor and their respective Subsidiaries have duly and timely filed or caused to be duly and timely filed all federal, state, provincial, territorial, foreign and other Tax returns and reports required to be filed under Applicable Law, and has timely paid all federal, state, provincial, territorial, foreign and other Taxes levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP or to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect. No material tax lien or similar adverse claim has been filed, and no claim is being asserted, with respect to any material amount of such Tax, except to the extent that such tax lien or similar adverse claim would not reasonably be expected to result in a Material Adverse Effect.
(k) Environmental Matters. Neither Seller, Guarantor nor any of their respective facilities or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials activity that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Neither Seller nor Guarantor has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law. To each of Seller’s and Guarantor’s knowledge, there are and have been no conditions, occurrences, or Hazardous Materials activities which would reasonably be expected to form the basis of an Environmental Claim against Seller or Guarantor that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. None of Seller, Guarantor, or to their knowledge, any
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of their respective predecessors, have filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Mortgaged Property, and none of Seller’s or Guarantor’s operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent. Compliance with all current or reasonably foreseeable future requirements pursuant to or under Environmental Laws would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. To each of Seller’s and Guarantor’s knowledge, no event or condition has occurred or is occurring with respect to Seller or Guarantor relating to any Environmental Law, any release of Hazardous Materials or any Hazardous Materials activity which individually or in the aggregate has had, or would reasonably be expected to have, a Material Adverse Effect. No Lien imposed pursuant to any Environmental Law has attached to any Purchased Assets or other Purchased Items or the Related Mortgage Loans and, to the knowledge of Seller and Guarantor, no conditions exist that would reasonably be expected to result in the imposition of such a Lien thereon.
(l) ERISA. Except as would not reasonably be expected to result in a Material Adverse Effect no ERISA Event has occurred or is reasonably expected to occur. Neither Seller nor Guarantor is (or is acting on behalf of) (i) an employee benefit plan as defined in Section 3(3) of Title I of ERISA that is subject to Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code or a “governmental plan” within the meaning of Section 3(32) of ERISA, or (ii) an entity the underlying assets of which constitute “plan assets” within the meaning of the Plan Asset Regulations. The transactions contemplated by this Agreement are not in violation of any state statute, applicable to Seller or Guarantor, that regulates investments of and fiduciary obligations with respect to governmental plan and that is similar to Section 406 of ERISA or Section 4975 of the Code.
(m) True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of Seller, Guarantor or any Affiliate thereof furnished or to be furnished to Buyer in connection with the initial or any ongoing due diligence of Seller, Guarantor or any Affiliate thereof, or the negotiation, preparation, or delivery of the Principal Agreements, are true and complete in all material respects. The written information (other than financial projections, forward looking statements, and information of a general economic or industry specific nature) that has been made available to the Buyer by or on behalf of Seller, Guarantor or any Affiliate thereof in connection with the Transactions hereunder, when taken as a whole, does not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in the light of the circumstances under which such statements are made; provided that with respect to projected financial information, Seller represents on behalf of itself and each Subsidiary, only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time, it being understood that such projections as to future events are not to be viewed as facts and that actual financials during the period or periods covered by any such projections may differ from the projected results.
(n) [Reserved]
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(o) Investment Company Act. None of Seller or Guarantor is required to register as an “investment company” under the Investment Company Act of 1940 (as amended, the “Investment Company Act”). None of Seller or Guarantor is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended.
(p) Filing Jurisdictions; Relevant States. Schedule 1 hereto sets forth all of the jurisdictions and filing offices in which a financing statement should be filed in order for Buyer to perfect its security interest in the Purchased Assets and other Purchased Items and the Related Mortgage Loans (including the Servicing Rights related to the Related Mortgage Loans); provided that the list of such jurisdictions and filing offices may change upon notice by Seller or Guarantor to Buyer in accordance with Section 9.9.
(q) Solvent; Fraudulent Conveyance. Each of Seller and Guarantor is solvent and will not be rendered insolvent as a result of entering into any Transaction and, after giving effect to each Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business. None of Seller or Guarantor intends to incur, nor believe that it has incurred, debts beyond its ability to pay such debts as they mature and is not contemplating, and is not aware of any Person threatening, 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. None of Seller or Guarantor is selling and/or pledging any Assets with any intent to hinder, delay or defraud any of its creditors.
(r) Custodial Account. All funds required pursuant to this Agreement, any Servicing Agreement or any Servicer Notice, if applicable, to be segregated and deposited into the Custodial Account have been so segregated and deposited as required by, and in accordance with this Agreement.
(s) Chief Executive Office. Except as identified pursuant to a notice delivered in accordance with Section 9.9, its chief executive office is located at 2211 Old Earhart Road, Suite 250, Ann Arbor, MI 48105.
(t) No Adverse Selection. Neither Guarantor nor Seller used any selection procedures that identified Assets offered for sale to Buyer hereunder as being less desirable or valuable than other comparable Assets owned by it.
(u) MERS. Guarantor is a member of MERS in good standing.
(v) Agency Approvals. Guarantor has all requisite Approvals and is in good standing with each Agency; and in each case, with no event having occurred (including, without limitation, a change in insurance coverage) that would either make it unable to comply with the eligibility requirements for maintaining all such applicable Approvals or require notification to the relevant Agency, or to HUD, the FHA, the VA or the RD, of a material change that would be reasonably likely to result in the termination of such Approval, as applicable.
(w) No Adverse Actions. To the extent approved by an Agency, HUD, the FHA, the VA or the RD, it has not received from any Agency, HUD, the FHA, the VA or the RD a notice of extinguishment or a notice indicating material breach, default or material non-compliance which would be reasonably likely to cause such Agency or HUD, the FHA,
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the VA or the RD to terminate, suspend, sanction or levy penalties against it, or a notice from any Agency, HUD, the FHA, the VA or the RD indicating any adverse fact or circumstance in respect of it which would be reasonably likely to cause such Agency or HUD, the FHA, the VA, or the RD, as the case may be, to revoke any of its Approvals or otherwise terminate, suspend it as an approved issuer, seller or servicer, as applicable, or with respect to which such adverse fact or circumstance has caused any Agency, HUD, the FHA, the VA or the RD to terminate it.
(x) Accuracy of Wire Instructions. With respect to each Related Mortgage Loan subject to a Purchase Commitment by an Agency, as applicable, either (1) the wire transfer instructions as set forth on the settlement documents applicable for such Agency are identical to Buyer’s (or the Account Bank under the Joint Securities Account Control Agreement) designated wire instructions or Buyer has approved such wire transfer instructions in writing in its sole and absolute discretion, or (2) the payee number set forth on the settlement documents applicable for such Agency is identical to the payee number that has been identified by Buyer in writing as Buyer’s (or the Account Bank under the Joint Securities Account Control Agreement) payee number or Buyer has approved the related payee number in writing in its sole and absolute discretion. With respect to each Pooled Mortgage Loan, the documents required for such Agency settlement are duly executed by it and designate Buyer or its designee (or the Securities Intermediary under the Joint Securities Account Control Agreement) as the party authorized to receive the related Mortgage-Backed Securities.
(y) Anti-Money Laundering Laws. It has complied with all applicable anti-money laundering laws and regulations, including without limitation the Patriot Act (collectively, the “Anti-Money Laundering Laws”); it has established an anti-money laundering compliance program as required by the Anti-Money Laundering Laws, has conducted the requisite due diligence in connection with the acquisition of each Mortgage Loan for purposes of the Anti-Money Laundering Laws, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.
(z) Anti-Terrorism; OFAC.
(i) None of Seller, Guarantor or any of their respective officers, directors or employees appears on the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”) or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States, unless authorized by OFAC. None of Seller or Guarantor conducts business or completes transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. None of Seller or Guarantor will directly or indirectly use the proceeds from this Agreement, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. None of Seller or
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Guarantor is in violation of Executive Order No. 13224 (the “Executive Order”) or the PATRIOT Act.
(ii) None of Seller or Guarantor, or any director, officer, agent or employee of Seller or Guarantor, has used any of the proceeds of the Purchase Price (i) for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) to make any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) to violate any provision of the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which either Seller or Guarantor conducts its business and to which they are lawfully subject or (iv) to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(aa) Servicing Rights. Notwithstanding anything to the contrary in this Agreement or any other Principal Agreement, it has not severed or separated the Servicing Rights and other servicing provisions related to the Related Mortgage Loans from the Related Mortgage Loans and such Servicing Rights and other servicing provisions of this Agreement and any other Principal Agreement constitute (a) “related terms” under this Agreement within the meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security agreement or other arrangement or other credit enhancement related to the Principal Agreements.
(bb) Risk Management Policy. Guarantor has duly adopted, in accordance with its internal risk policies, a risk management policy, which is in full force and effect.
(cc) Plan Assets; Prohibited Transactions. Neither Guarantor, Seller or any of their respective Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither the execution, delivery nor performance of the transactions contemplated under this Agreement will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.
(dd) Use of Proceeds. Seller will only use the proceeds of any Purchased Asset as permitted under Section 2.5. No part of the proceeds of any Purchase Price will be used directly or indirectly to purchase or carry Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, in violation of any of the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System. Neither Seller nor Guarantor is engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. At no time would more than 25% of the value of the assets of Seller or Guarantor that are subject to any “arrangement” (as such term is used in Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock. Seller shall not, to its actual knowledge, use the proceeds of any Transaction to purchase any asset or securities from, or otherwise transfer the proceeds of the Transaction to, an “affiliate” of Buyer , as such term is defined in 12 C.F.R. Part 223.
8.2 Representations and Warranties Concerning Purchased Assets. Seller and Guarantor each represents and warrants to and covenants with Buyer that the representations and warranties contained on Exhibit H hereto are true and correct with respect to each Purchased Asset as of the related Purchase Date through and until the related Repurchase Date.
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8.3 Continuing Representations and Warranties. By submitting a Transaction Request, Seller and Guarantor shall be deemed to have represented and warranted the truthfulness, correctness and completeness of the representations and warranties set forth in Exhibit H hereto.
ARTICLE 9
AFFIRMATIVE COVENANTS
AFFIRMATIVE COVENANTS
Each of Seller and Guarantor hereby covenants and agrees with Buyer that (i) solely with respect to the Guarantor, from the Initial Closing Date and (ii) with respect to the Seller and Guarantor, from the Effective Date, and, in each case, during the term of this Agreement and for so long as there remain any obligations of Seller or Guarantor to be paid or performed under this Agreement and the other Principal Agreements:
9.1 Financial Statements and Other Reports. Guarantor will furnish to Buyer:
(a) Monthly Statements. Within thirty (30) days after the end of each calendar month, other than the last calendar month of each fiscal quarter, the unaudited balance sheets of Guarantor as at the end of such calendar month, the related unaudited consolidated statements of income for Guarantor, for such month and the portion of the fiscal year through the end of such month, accompanied by the Officer’s Certificate (including all specified schedules), executed by a Responsible Officer of Guarantor, which certificate shall state that said financial statements and schedules fairly present in all material respects the financial condition and results of operations of Guarantor, in accordance with GAAP, consistently applied, as at the end of, and for, such month (subject to normal year-end adjustments);
(b) Quarterly Statements. Within forty five (45) days after the end of each of its fiscal quarters other than the fiscal quarter ending December 31 of each fiscal year, the unaudited consolidated balance sheets and income statements for such fiscal quarter on a year to date basis for Guarantor and its consolidated subsidiaries;
(c) Annual Statements. Within one hundred twenty (120) days after the close of each fiscal year of Guarantor, the unqualified audited consolidated balance sheet of Guarantor and its consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, of stockholders’ equity (which shall be on a consolidated basis and there shall be no consolidating statements of stockholders’ equity required hereunder) and of cash flows for such fiscal year (which shall be on a consolidated basis and there shall be no consolidating statements of cash flows required hereunder), in each case, setting forth comparative figures for the preceding fiscal year, prepared in accordance with GAAP prepared by a Nationally Recognized Accounting Firm;
(d) Officer’s Certificate. With the delivery of the financial statements set forth in the preceding clauses (a), (b) or (c), Guarantor shall deliver to Buyer an officer’s certificate substantially in a form attached as Exhibit B to the Transactions Terms Letter, which shall include information related to repurchases and early payment defaults, a list of all mortgage financing facilities including, without limitation, any warehouse, repurchase, purchase or off-balance sheet facilities, that were entered into by Guarantor in the preceding month, and evidence of compliance with all Financial Covenants;
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(e) Seller shall provide reasonable cooperation with any requests by Buyer for additional documents or information necessary to confirm that a Mortgage Loan subject to a Transaction hereunder is an Eligible Mortgage Loan.
9.2 Notice.
(a) Within [***] or, solely with respect to the occurrence of a Default, promptly, upon a Responsible Officer of Seller or Guarantor obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to Seller or Guarantor with respect thereto; (ii) of any condition or event that constitutes an “event of default” under any Debt or that notice has been given to any party thereunder with respect thereto; (iii) of the occurrence of any ERISA Event that, either individually or together with any other ERISA Events, could reasonably be expected to have a Material Adverse Effect or (iv) of the occurrence of any event or change that has results in or could reasonably be expected to result in a Material Adverse Effect, Guarantor or Seller shall deliver to Buyer a certificate of a Responsible Officer specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, “event of default”, event or change, and what action Seller and/or Guarantor has taken, is taking and proposes to take with respect thereto; provided that this clause (a) shall not be deemed accelerate or otherwise modify any provision respect to the timing of Buyer’s ability to declare an Event of Default under Section 11.1.
(b) [Reserved].
(c) Each of Seller and Guarantor shall give Buyer prompt (but in no event later than [***] Business Days after a Responsible Officer of Seller or Guarantor obtaining knowledge, except for clause (ix), with respect to which notice shall be provided immediately upon a Responsible Officer of Seller or Guarantor obtaining knowledge) written notice, in reasonable detail, of:
(i) any action, suit, material investigation specifically relating to Seller’s or Guarantor’s origination or servicing practices or proceeding in any federal, state or foreign court or before any commission or other regulatory body (federal, state or local, foreign or domestic) (other than any investigation or proceeding conducted in the ordinary course of business by such regulatory body, such as a general “street-sweep” of relevant market participants), or any such action, suit or proceeding threatened in writing against Seller or Guarantor, in any case, if such action, suit or proceeding questions or challenges compliance (x) with respect to any Related Mortgage Loans Purchased Asset (whether such Related Mortgage Loans or Purchased Assets are specifically identified or not) with the Ability to Repay Rule or (y) with respect to any Related Mortgage Loans, Purchased Assets (whether such Related Mortgage Loans or Purchased Assets are specifically identified or not) with the QM Rule;
(ii) the filing, recording or assessment of any federal, state or local tax lien against Seller or Guarantor, or any of Seller’s or Guarantor’s assets, unless such filing, recording or assessment could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect with respect to Seller or Guarantor;
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(iii) the actual, or threatened in writing, material suspension, revocation or termination (other than a termination by Guarantor without cause) of Seller’s or Guarantor’s licensing or eligibility, if any, in any respect, as an approved, licensed lender, seller, mortgagee or servicer of assets similar to the Purchased Assets or Related Mortgage Loans, unless such disclosure would be expressly prohibited by any Agency or Governmental Authority, or HUD, the FHA, the VA or the RD, as applicable;
(iv) any Purchased Asset ceases to be an Eligible Asset or is a Defective Asset;
(v) any Approved Investor provides written notice to Seller that it will set-off amounts owed by Seller or Guarantor to such Approved Investor as a result of a payment failure, non-ordinary course obligations owed by Seller or Guarantor or other allegation of wrongdoing against the purchase proceeds owed by the Approved Investor to Seller or Guarantor for the Related Mortgage Loans and/or Mortgage-Backed Securities with respect to the Purchased Assets (excluding amounts owed by Seller or Guarantor to the Approved Investor which are directly related to Purchased Assets and which are expressly allowed to be set-off by the Approved Investor pursuant to the related Bailee Agreement or Purchase Commitment);
(vi) to the extent not prohibited by any Agency or Governmental Authority, or HUD, the FHA, the VA or the RD, copies of relevant portions of all final written Agency or Governmental Authority, or HUD, the FHA, the VA or the RD and investor audits, examinations, evaluations, monitoring reviews and reports of its operations (including those prepared on a contract basis) which provide for or relate to (i) material corrective action required, (ii) material sanctions proposed, imposed or required, including without limitation notices of defaults, notices of termination of approved status, notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non-renewal or (iii) “report cards,” “grades” or other classifications of the quality of such Seller and Guarantor’s operations;
(vii) it or any Servicer will change the identity or location of the Custodial Account; or
(viii) any termination or termination threatened in writing by any Agency of the Custodian as an eligible custodian,
Notwithstanding anything in this Agreement to the contrary, neither Seller or Guarantor shall have any obligation to provide any notice, report or other information to the extent Seller or Guarantor is prohibited from doing so by any Governmental Authority, Agency, the FHA, the VA or the RD, or by any Applicable Law. The obligation of Seller and Guarantor to deliver any report or information under this Agreement or any other Principal Agreement shall be deemed to have been satisfied if, and as of such date, such report or information is filed by Home Point Financial Corporation with the SEC pursuant to the SEC's Electronic Data Gathering & Analysis Recovery system.
9.3 Existence and Rights; Compliance with Laws; Agency Approvals. Each of Seller and Guarantor shall preserve and keep in full force and effect its corporate existence, and any rights, permits,
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patents, franchises, licenses, approvals and qualifications required for it to conduct its business activities, except as would not be reasonably likely to have a Material Adverse Effect. Seller and Guarantor shall maintain adequate financial standing, servicing facilities, procedures, and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices, except as would not be reasonably likely to have a Material Adverse Effect. Each of Seller and Guarantor shall comply with all Applicable Laws except to the extent that the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
9.4 Maintenance of Properties. Each of Seller and Guarantor shall ensure that its material properties and equipment used or useful in its business in whosoever’s possession they may be, are kept in reasonably good repair, working order and condition, normal wear and tear and casualty excepted, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.
9.5 Taxes. Each of Guarantor, Seller and its Subsidiaries shall duly and timely file or cause to be duly and timely filed, all federal, state, provincial, territorial, foreign and other income Tax returns and all other tax returns required to be filed under Applicable Law, and shall pay when due all Taxes imposed upon it or any of its respective properties or which it is required to withhold and pay over, and provide evidence of such payment to the Buyer if requested; provided that neither Seller nor Guarantor shall be required to pay any such Tax that is being contested in good faith by proper actions diligently conducted if (i) it has maintained adequate reserves with respect thereto in accordance with GAAP and (ii) in the case of a Tax that has or may become a Lien that is not a Lien permitted hereunder against any of the Collateral, such proceedings conclusively operate to stay the sale of any portion of the Purchase Price to satisfy such Tax, , in each case except where the failure to file or pay any Tax would not reasonably be expected to result in a Material Adverse Effect.
9.6 Servicing of Mortgage Loans. Subject to Section 6.2, each of Seller and Guarantor shall, and pursuant to the applicable Servicing Agreement, each of Seller and Guarantor shall cause each Servicer to, service all Related Mortgage Loans at Guarantor’s and Seller’s expense and without charge of any kind to Buyer. Guarantor and Seller may delegate its obligations hereunder to service the Related Mortgage Loans (subject to Section 6.2) to one or more Servicers; provided that any such Servicer has been approved by Buyer and such Servicer has executed a Servicing Agreement, in a form acceptable to Buyer, with Guarantor. The failure of Guarantor and Seller to obtain the prior approval of Buyer regarding the delegation of its servicing obligations to a Servicer shall be considered an Event of Default hereunder. In any event, each of Guarantor or its delegate shall service such Related Mortgage Loans with the degree of care and in accordance with the servicing standards generally prevailing in the industry, including those required by Fannie Mae, Freddie Mac or Ginnie Mae, as applicable.
9.7 Evidence of Purchased Assets. Each of Seller and Guarantor shall indicate on its electronic books and records (including its computer records) that each Purchased Asset has been pledged to Buyer.
9.8 Defense of Title; Protection of Purchased Items. Each of Seller and Guarantor warrants and will defend the right, title and interest of Buyer in and to all Purchased Items against all adverse claims and demands of all Persons whomsoever. After the occurrence and continuance of an Event of Default, Guarantor and Seller shall allow Buyer to initiate, commence, appear in, defend
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or intervene in any proceeding, foreclosure, action or bankruptcy which would reasonably be expected to affect Buyer’s ownership or security of the Purchased Assets or Purchased Items or the value thereof, or the rights and powers of Buyer.
9.9 Further Assurances; UCC Matters; Protection and Perfection of Security Interests. With respect to Seller and Guarantor, each of Seller and Guarantor agree promptly to notify Buyer in writing of any change (i) in the legal name, (ii) in the identity or type of organization or (iii) in the jurisdiction of organization, in each case, within ten (10) Business Days of such change. Seller and Guarantor agree that from time to time, at Seller’s or Guarantor’s cost and expense, to promptly execute and deliver all further instruments and documents, and take all further action reasonably required by the Buyer (a) to perfect, protect or more fully evidence the Buyer’s security interest in the Purchased Assets and other Purchased Items and the related Mortgage Loans or (b) to enable the Buyer to exercise or enforce any of its rights hereunder, under any other Principal Agreement. Without limiting Seller’s obligation to do so, Seller and Guarantor hereby irrevocably authorize the filing of such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as Buyer may reasonably require. Each of Seller and Guarantor hereby authorizes Buyer to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming Seller or Guarantor as debtor, relative to all or any of Purchased Assets and other Purchased Items and the Related Mortgage Loans now existing or hereafter arising without the signature of Seller or Guarantor where permitted by law. A carbon, photographic or other reproduction of this Agreement, or any financing statement covering the Purchased Assets and other Purchased Items and the Related Mortgage Loans or any part thereof shall be sufficient as a financing statement.
9.10 Fidelity Bonds and Insurance. Seller and Guarantor shall maintain or cause to be maintained, at its own expense, insurance coverage as is customary, reasonable and prudent in light of the size and nature of Seller’s and Guarantor’s business as of any date after the Initial Closing Date. Seller and Guarantor shall be deemed to have complied with this provision if one of its Affiliates has such policy coverage and, by the terms of any such policies, the coverage afforded thereunder extends to Guarantor. Upon the request of Buyer at any time subsequent to the Effective Date, Seller and Guarantor shall cause to be delivered to Buyer, a certification evidencing Seller’s and Guarantor’s coverage under any such policies. Guarantor shall not amend, cancel, suspend or otherwise change such policy in a manner prohibited by any applicable Agency without the prior written consent of Buyer.
9.11 [Reserved].
9.12 Additional Repurchase or Warehouse Facilities. Guarantor shall maintain throughout the term of this Agreement, with nationally recognized and established counterparties (other than Buyer) mortgage loan repurchase or warehouse facilities that, in the aggregate: (a) provide funding in an amount equal to at least the Aggregate Transaction Limit; (b) provide funding on a committed basis in an amount equal to at least the Committed Amount; and (c) accommodate wet mortgage loans in an amount not less than the amount provided hereunder.
9.13 MERS. Guarantor will comply in all material respects with the rules and procedures of MERS in connection with the servicing of all Related Mortgage Loans that are registered with MERS for as long as such Related Mortgage Loans are so registered.
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9.14 Agency Audit and Approval Maintenance. Guarantor shall (i) at all times maintain copies of relevant portions of all final written Agency Audits in which there are material adverse findings, including without limitation notices of defaults, notices of termination of approved status, notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non-renewal, and all necessary approvals from each Agency and (ii) take all actions necessary to maintain its respective Approvals.
9.15 Financial Covenants. Guarantor shall comply with the Financial Covenants.
9.16 Quality Control. Guarantor shall, at all times, maintain an internal quality control program that verifies, on a regular basis, the existence and accuracy of all legal documents, credit documents, property appraisals, and underwriting decisions related to the Purchased Assets.
9.17 Post-Closing Deliverables (Principal Agreements). Seller and Guarantor shall make commercially reasonable efforts to deliver to Buyer, within [***] of the Effective Date and, in any event, within [***] of the Effective Date (or such other later date agreed by Buyer in writing in its sole and absolute discretion), (i) the Disbursement Agreement Account Control Agreement, in form and substance satisfactory to Buyer in its sole and absolute discretion and fully executed by all parties thereto, (ii) the Custodial Account Control Agreement, in form and substance satisfactory to Buyer in its sole and absolute discretion and fully executed by all parties thereto, (iii) an amendment to the Joint Securities Account Control Agreement, in form and substance satisfactory to Buyer in its sole and absolute discretion and fully executed by all parties thereto, (iv) an amendment to the Intercreditor Agreement, in form and substance satisfactory to Buyer in its sole and absolute discretion and fully executed by all parties thereto and (v) an opinion of counsel, in form and substance satisfactory to Repo Agent, as to (A) enforceability of the agreements described in clauses (i), (ii), (iii) and (iv) above, and (B) the first priority perfected security interest with respect to the accounts referenced in the agreements described in clauses (i) and (ii) above.
9.18 Post-Closing Deliverables (Other Documents). Seller and Guarantor shall make commercially reasonable efforts to deliver to Buyer, within [***] of the Effective Date and, in any event, within [***] of the Effective Date (or such other later date agreed by Buyer in writing in its sole and absolute discretion), a copy of Guarantor’s errors and omissions insurance policy or mortgage, amended to include Seller, pursuant to Section 7.1(b)(viii).
ARTICLE 10
NEGATIVE COVENANTS
NEGATIVE COVENANTS
Each of Seller and Guarantor hereby covenants and agrees with Buyer that (i) solely with respect to the Guarantor, from the Initial Closing Date and (ii) with respect to the Seller and Guarantor, from the Effective Date, and, in each case, during the term of this Agreement and for so long as there remain any obligations of Seller or Guarantor to be paid or performed under this Agreement and the other Principal Agreements, each of Seller and Guarantor shall comply with the following:
10.1 Lines of Business. None of Seller or Guarantor shall make any material change in the nature of its business as carried on at the Effective Date and business activities that are reasonably related, ancillary or complementary thereto or reasonable developments or extensions thereof.
10.2 Dividends, Etc. Each of Seller and Guarantor shall not make, directly or indirectly, declare or pay any dividends or make any other payment or distribution (in cash, property, or obligations)
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on account of Seller’s or Guarantor’s Equity Interests, or redeem, purchase, retire, or otherwise acquire any of its Equity Interests, or set apart any money for a sinking or other analogous fund for any dividend or other distribution on its Equity Interests or for any redemption, purchase, retirement, or other acquisition of any of its Equity Interests, or undertake any new obligation (contingent or otherwise) to do any of the foregoing if any Default or Event of Default exists or will exist after giving effect thereto; provided that, notwithstanding the foregoing, Seller shall be permitted to make such a dividend, payment or distribution with Buyer’s written consent.
10.3 Liens on Purchased Assets and Purchased Items. Each of Seller and Guarantor acknowledge that with respect to each Transaction, Seller shall have sold the Purchased Assets and related Purchased Items and Seller shall have granted a first priority security interest in its right, title and interest in, to and under such Purchased Assets and Purchased Items, and Guarantor shall have granted to Buyer a first priority security interest in its right, title and interest in, to and under the Purchased Assets and other Purchased Items and the Related Mortgage Loans (including the Servicing Rights related to the Related Mortgage Loans) in the event such Transaction is deemed a loan. Accordingly, neither Seller nor Guarantor shall grant, create, incur or suffer to exist any Lien upon the Purchased Assets and other Purchased Items and the Related Mortgage Loans (including the Servicing Rights related to the Related Mortgage Loans), other than any Lien that constitutes a Permitted Collateral Lien.
10.4 Transactions with Affiliates. Except as contemplated herein with respect to transactions between Seller and Guarantor, neither Seller nor Guarantor shall enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Principal Agreements, (ii) any other transactions (including the lease of office space or computer equipment or software by Seller or Guarantor from an Affiliate and the sharing of employees and employee resources and benefits) (a) in the ordinary course of business or as otherwise permitted hereunder, (b) pursuant to the reasonable requirements and purposes of Seller’s business or Guarantor’s business, as applicable, (c) upon fair and reasonable terms (and, to the extent material, pursuant to written agreements) that are consistent with market terms for any such transaction, (d) permitted by Sections 10.1, 10.2, 10.3 or 10.5, (iii) employment and severance arrangements and health, disability and similar insurance or benefit plans between Seller or Guarantor and their respective directors, officers, employees in the ordinary course of business, (iv) transactions pursuant to the Asset Management Strategy and (v) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, managers, consultants, officers and employees of Seller or Guarantor to the extent attributable to the ownership or operation of Seller or Guarantor.
10.5 Consolidation, Merger, Sale of Assets and Change of Control. None of Seller or Guarantor shall (i) merge or consolidate or amalgamate, or divide, liquidate, wind up or dissolve itself (or suffer any division, liquidation, winding up or dissolution) unless (x) such merger, consolidation or amalgamation does not result in a Change of Control or (y) Seller or Guarantor, as applicable, is the sole surviving entity of such merger, consolidation or amalgamation, or (ii) sell all or substantially all of its assets.
10.6 [Reserved].
10.7 Servicing Rights. Notwithstanding anything to the contrary in this Agreement or any other Principal Agreement, each of Seller and Guarantor shall not, directly or indirectly, sever or separate the Servicing Rights and other servicing provisions related to the Related Mortgage
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Loans from the Related Mortgage Loans and shall not take any action inconsistent with such Servicing Rights and other servicing provisions of this Agreement and any other Principal Agreement constituting (a) “related terms” under this Agreement within the meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security agreement or other arrangement or other credit enhancement related to the Principal Agreements.
10.8 Change in Organizational Documents. None of Seller or Guarantor shall amend modify or otherwise change any of its Governing Documents in any material respect, except any such amendments, modifications or changes or any such new agreements or arrangements that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
10.9 [Reserved].
10.10 Fiscal Year. Each of Seller and Guarantor shall not change its fiscal year-end from December 31 or change its method of determining fiscal quarters, without providing notice to the Buyer.
10.11 Pooled Mortgage Loans. Notwithstanding anything to the contrary in this Agreement or any other Principal Agreement, each of Seller and Guarantor shall not, directly or indirectly, replace any Related Mortgage Loan with a Mortgage-Backed Security pursuant to Section 3.7 that includes any mortgage loans in the related Pool that do not include such Related Mortgage Loans that such Mortgage-Backed Security replaced.
10.12 [***]. With respect to any repurchase agreement or credit facility secured by mortgage loan-related collateral in which Seller or Guarantor or their respective Subsidiaries, are parties to as seller, borrower or any other type of obligor, [***].
ARTICLE 11
DEFAULTS AND REMEDIES
DEFAULTS AND REMEDIES
11.1 Events of Default. The occurrence of any of the following conditions or events shall be an Event of Default:
(a) any failure of Seller to transfer the Purchased Assets to Buyer on the applicable Purchase Date (provided that Buyer has tendered the related Purchase Price) that (i) is not otherwise remedied (a) pursuant to Section 6.3 by Seller’s payment thereunder of the resulting Margin Call caused by such delivery failure or (b) the return of the related Purchase Price to the Wire-Out Account pursuant to the Custodial and Disbursement Agreement or (ii) or is caused by the willful misconduct, recklessness, fraud or gross negligence of Seller or Guarantor; or
(b) failure of Guarantor to perform its obligations under Section 6.2(h)(i); or
(c) failure of Seller to (i) repurchase the Purchased Assets on the applicable Repurchase Date, (ii) perform its obligations under Section 6.3(b), (iii) make any required payment of Non-Usage Fees or Minimum Utilization Fees when due hereunder and such failure and such failure remains unremedied for a period of [***] Business Days after the earlier of (x) written notice of such failure shall have been given to Seller by Buyer or (y) the date upon which a Responsible Officer of Seller or Guarantor obtained actual knowledge of such failure or (ii) make any required payment of any other fee or other amount payable hereunder or under any other Principal Agreement when due and such failure remains
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unremedied for a period of [***] Business Days after the earlier of (x) written notice of such failure shall have been given to Seller or Guarantor by Buyer or (y) the date upon which a Responsible Officer of Seller obtained actual knowledge of such failure; or
(d) failure of Seller, any Servicer or Guarantor to deliver any report (including financial statements) required to be delivered hereunder or under any Principal Agreement or Servicing Agreement and such failure continues for a period of [***] Business Days after the earlier of (x) written notice of such failure shall have been given to Seller, Guarantor or the related Servicer by Buyer or (y) the date upon which a Responsible Officer of Seller or Guarantor obtained actual knowledge of such failure; or
(e) Seller or Guarantor shall fail to comply with Section 14.5; or
(f) [Reserved]; or
(g) (i) Seller, Guarantor or any of their respective direct or indirect Subsidiaries shall default under, or fail to perform as required under, or shall otherwise breach (after expiration of all applicable grace periods) the terms of any instrument, agreement or contract involving outstanding unpaid obligations of $[***] or more owing by any such Person to Buyer or any of Buyer’s Affiliates; (ii) the failure of Seller or Guarantor to make any payment when due (after expiration of all applicable grace periods) on any of Debt of Seller or Guarantor having an aggregate principal amount outstanding of $[***] or more (each, a “Material Debt Facility”) or (iii) knowledge of an occurrence of any other “event of default” under any Material Debt Facility, which is continuing and has not been waived by the holders of such Debt within [***] Business days of the occurrence of any such “event of default”; or
(h) any representation, warranty or certification made or deemed made herein or in any other Principal Agreement by Seller or Guarantor or any certificate furnished to Buyer pursuant to the provisions thereof (after giving effect to any qualification as to materiality set forth therein, if any), shall prove to have been false or misleading in any material respect as of the time made or furnished and continues for a period of [***] Business Days after the earlier of (x) written notice of such failure shall have been given to Seller, Guarantor or the related Servicer by Buyer or (y) the date upon which a Responsible Officer of Seller or Guarantor obtained actual knowledge; provided that the representations and warranties set forth in Section 8.2 and Section 8.3 shall be considered solely for the purpose of determining the Asset Value of the Purchased Assets, unless (i) Seller or Guarantor shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made or (ii) any such representations and warranties have been determined by Buyer in good faith to be materially false or misleading on a regular basis; or
(i) (i) Seller or Guarantor shall fail to perform or observe the Financial Covenants or any negative covenant under Section 10, (ii) Seller or Guarantor shall fail to perform or observe the covenants set forth in Sections 9.1, 9.2, 9.3, 9.9 (solely with respect to any notice requirements therein), 9.6, 9.8, 9.11 or 9.13, and such failure shall continue unremedied for [***] Business Days after the earlier of (A) a written notice of such failure shall have been given to Seller or Guarantor by the Buyer or (B) the date upon which a Responsible Officer of Seller or Guarantor obtained knowledge of such failure
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(and giving effect to any grace or other cure periods set forth therein), or (iii) except as set forth in clauses (i) and (ii) hereof, Seller or Guarantor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or in any other Principal Agreement, and, such failure shall continue unremedied for [***] days after the earlier of (A) a written notice of such failure shall have been given to Seller or Guarantor by the Buyer or (B) the date upon which a Responsible Officer of Seller or Guarantor obtained knowledge of such failure; or
(j) an Insolvency Event shall have occurred with respect to Seller or Guarantor; or
(k) there shall remain in force, undischarged, unsatisfied, unbonded and unstayed for more than [***] consecutive days, or, if a stay of execution is procured, [***] days from the date such stay is lifted, any final non-appealable monetary judgment against Seller or Guarantor in excess of $[***] over and above the amount of insurance coverage available from a financially sound insurer that has not denied coverage; or
(l) any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to (i) condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property or assets of Seller or Guarantor or any of their respective Affiliates; (ii) displace the management of Seller or Guarantor or any of their respective Affiliates or to curtail its authority in the conduct of their respective business; or (iii) to remove, limit or restrict the approval of Seller or Guarantor or any of their respective Affiliates or Subsidiaries as an issuer, buyer or a seller/servicer of Mortgage Loans or securities backed thereby; or
(m) Seller or Guarantor shall disavow or deny its obligations hereunder or shall contest the validity or enforceability of (i) the Principal Agreements or (ii) Buyer’s interest in any Purchased Assets or other Purchased Items; or
(n) a default by Seller or Guarantor shall occur and be continuing for [***] Business Days beyond the expiration of any applicable grace period under any other Principal Agreement; provided (i) that if such default would otherwise lead to an Event of Default hereunder in the absence of the application of this clause (n), this clause have no effect or (ii) if such Principal Agreement provides for a shorter period before a default may be declared under such Principal Agreement, the terms of such Principal Agreement shall apply notwithstanding anything to the contrary in this clause (n); or
(o) any (i) Principal Agreement shall for whatever reason (including an event of default thereunder) be terminated or cease to be in full force and effect (other than by the occurrence of the Facility Termination Date) or shall be declared null and void (in each case for any reason other than the failure of the Buyer to take any action within its control), without the consent of Buyer (other than, with respect to the Custodial and Disbursement Agreement, due to the resignation of the Custodian for reasons other than a breach by Seller of the Custodial and Disbursement Agreement), or the Lien granted herein to Buyer shall for any reason cease to be a valid, first priority lien upon the Purchased Assets or the Purchased Items or this Agreement shall for any reason cease to create a valid, first priority security interest or ownership interest upon transfer of any of the Purchased Items or (ii) Seller or Guarantor shall deny in writing that it has any further liability under any Principal Agreement to which it is a party or shall contest the validity
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or perfection of any Lien covered by this Agreement or any other Principal Agreement; or
(p) [Reserved];
(q) Seller or Guarantor shall fail to maintain [***] or more Approvals relating to Purchased Assets or Related Mortgage Loans; provided that if Seller or Guarantor fail to maintain [***] relating to the Purchased Assets or Related Mortgage Loans, such failure shall only be an Event of Default if the Related Mortgage Loans requiring such Approval have not been repurchased within [***]; or
(r) a Change of Control shall occur; or
(s) a Servicer Termination Event shall occur and, either (i) such Servicer Termination Event shall not have been cured within [***] calendar days or (ii) with respect to a Servicer Termination Event with respect to a Servicer other than Guarantor or Seller or Guarantor has not appointed a successor Servicer acceptable to Buyer and delivered a fully executed Servicing Agreement and Servicer Notice, if applicable, with such successor Servicer, in each case within [***] calendar days following the occurrence of such breach or Servicer Termination Event; or
(t) Seller’s or Guarantor’s membership in MERS is terminated for any reason; or
(u) a Servicer fails to make any Servicing Advance required to be made under the related Servicing Agreement, the related Servicer Notice, or this Agreement, as applicable, with respect to the Purchased Assets; or
(v) Seller or Guarantor becomes, or becomes Controlled by, an entity required to register as an “investment company” under the 1940 Act; or
(w) [Reserved];
(x) an ERISA Event shall have occurred that, in the opinion of Buyer, when taken together with all other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect.
With respect to any Event of Default which requires a determination to be made as to whether such Event of Default has occurred, such determination shall be made in Buyer’s sole and absolute discretion and Guarantor and Seller hereby agrees to be bound by and comply with any such determination by Buyer. If Buyer expressly waives an Event of Default in writing, then such Event of Default shall be deemed to not be continuing.
11.2 [Reserved].
11.3 Remedies. Upon the occurrence and during the continuance of an Event of Default, Buyer may, by notice to a Responsible Officer of Seller and Guarantor, declare all or any portion of the Repurchase Prices related to the outstanding Transactions to be immediately due and payable, whereupon the same shall become immediately due and payable, and the obligation of Buyer to enter into Transactions shall thereupon terminate; provided that the acceleration of all Repurchase Prices and termination of Buyer’s obligation to enter into Transactions shall immediately occur
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upon the occurrence of an Event of Default under Section 11.1, (j), (l) and (m), notwithstanding that Buyer may not have provided any such notice to a Responsible Officer of Seller and Guarantor. Further, it is understood and agreed that upon the occurrence and during the continuance of an Event of Default, each of Guarantor and Seller shall strictly comply with the negative covenants contained in Article 10 hereunder and in no event shall Guarantor or Seller declare and pay any dividends, incur additional Debt, make payments on existing Debt or otherwise distribute or transfer any of Guarantor’s or Seller’s property and assets to any Person without the prior written consent of Buyer. Upon the occurrence and during the continuance of any Event of Default, Buyer may also, at its option, exercise any or all of the following rights and remedies (including any such rights and remedies that relate to the Participation Interests represented by the Participation Certificate issued under the Participation Agreement):
(a) to take possession of any of the Purchased Items including any records that pertain to the Purchased Items, or to commence an action to take possession of such records. Without limiting the rights of Buyer to pursue all other legal and equitable rights available to Buyer for Seller’s failure to perform its obligations under this Agreement, Seller and Guarantor acknowledge and agree that the remedy at law for any failure to perform obligations hereunder would be inadequate and Buyer shall each be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages;
(b) assign legal title to the Purchased Assets and/or the Related Mortgage Loans to Buyer;
(c) after assigning legal title to the Purchased Assets and/or Related Mortgage Loans to Buyer, communicate with and notify Mortgagors of the Related Mortgage Loans and obligors under other Purchased Assets or on any portion thereof, whether such communications and notifications are in oral, written or electronic form, including, without limitation, communications and notifications that the Purchased Assets and/or Related Mortgage Loans have been assigned to Buyer and that all payments thereon are to be made directly to Buyer or its designee (subject to the rights of any Servicer under any Servicing Agreement);
(d) settle compromise, or release, in whole or in part, any amounts owing on the Related Mortgage Loans, Purchased Assets or other Purchased Items or any portion of the Purchased Items, on terms acceptable to Buyer; enforce payment and prosecute any action or proceeding with respect to any and all Related Mortgage Loans, Purchased Assets or other Purchased Items; and where any Related Mortgage Loans, Purchased Asset or other Purchased Item is in default, foreclose upon and enforce security interests in, such Related Mortgage Loans, Purchased Asset or other Purchased Item by any available judicial procedure or without judicial process and sell property acquired as a result of any such foreclosure;
(e) exercise any of its rights set forth herein in respect of the applicable Servicing Agreements or the Servicer Notices, if applicable, collect payments from Mortgagors and/or contract with a third party to subservice, any or all Related Mortgage Loans requiring servicing and/or perform any obligations required in connection with Purchase Commitments, with all of any such third party’s fees to be paid by Seller or Guarantor. In connection with collecting payments from Mortgagors and/or replacing the Servicer of
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any or all Related Mortgage Loans, Buyer may take possession of and open any mail addressed to Seller, remove, collect and apply all payments for Seller, sign Seller’s name to any receipts, checks, notes, agreements or other instruments or letters or appoint an agent to exercise and perform any of these rights. If Buyer so requests, Guarantor and Seller shall promptly forward (to the extent in Guarantor’s or Seller’s possession), or cause to be forwarded to Buyer or its designee, all further mail and all “trailing” documents, such as title insurance policies, deeds of trust, and other documents, and all loan payment histories, in electronic format, in each case, as same relate to the Purchased Assets;
(f) proceed against Seller under this Agreement or against Guarantor under the Guaranty and Security Agreement, or both;
(g) (i) sell, without notice or demand of any kind, at a public or private sale and at such price or prices as Buyer may deem to be commercially reasonable for cash or for future delivery without assumption of any credit risk, any or all or portions of the Related Mortgage Loans (after obtaining title thereto) or Purchased Assets on a servicing-retained or servicing-released basis; provided that Buyer may purchase any or all of the Related Mortgage Loans or Purchased Assets at any public or private sale or (ii) in its sole and absolute discretion elect, in lieu of selling all or a portion of such Related Mortgage Loans (after obtaining title thereto) or Purchased Assets, to give Seller credit for such Mortgage Loans or Purchased Assets in an amount equal to the Market Value of the Related Mortgage Loans or Related Mortgage Loans against the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder; provided further that Seller shall remain liable to Buyer for any amounts that remain owing to Buyer following any such sale and/or credit;
(h) enter into one or more hedging arrangements covering all or a portion of the Purchased Assets and/or Related Mortgage Loans; and/or
(i) pursue any rights and/or remedies available at law or in equity against Seller and/or Guarantor.
11.4 Treatment of Custodial Account. Notwithstanding any other provision of this Agreement, neither Guarantor nor Seller shall have any right to withdraw or release any funds in the Custodial Account to itself or for its benefit, nor shall it have any right to set-off any amount owed to it by Buyer against funds held by it for Buyer in the Custodial Account. During the continuance of an Event of Default, each of Guarantor and Seller shall, and/or shall cause the applicable Servicer, pursuant to the applicable Servicing Agreement, and Servicer Notice, if applicable, to promptly remit all funds related to the Purchased Assets in the Custodial Account to or at the direction of Buyer.
11.5 Sale of Related Mortgage Loans or Purchased Assets. With respect to any sale of Related Mortgage Loans or Purchased Assets pursuant to Section 11.3(g), each of Guarantor and Seller acknowledges and agrees that it may not be possible to purchase or sell all of the Related Mortgage Loans or Purchased Assets on a particular Business Day, or in a single transaction with the same purchaser, or in the same manner because the market for such Related Mortgage Loans or Purchased Assets may not be liquid. Seller further agrees that in view of the nature of the Related Mortgage Loans or Purchased Assets, liquidation of a Transaction or the underlying
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Related Mortgage Loans or Purchased Assets does not require a public purchase or sale. Accordingly, Buyer may elect the time and manner of liquidating any Related Mortgage Loan or Purchased Asset and nothing contained herein shall obligate Buyer to liquidate any Related Mortgage Loan or Purchased Asset on the occurrence and during the continuance of an Event of Default, to liquidate all Related Mortgage Loans or Purchased Assets in the same manner or on the same Business Day, or constitute a waiver of any right or remedy of Buyer. Guarantor and Seller hereby waives any claims it may have against Buyer arising by reason of the fact that the price at which the Related Mortgage Loans or Purchased Assets may have been sold at such private sale was less than the price which might have been obtained at a public sale or was less than the aggregate Repurchase Price amount of the outstanding Transactions, even if Buyer accepts the first offer received and does not offer the Related Mortgage Loans or Purchased Assets, or any part thereof, to more than one offeree. Each of Guarantor and Seller hereby agrees that the procedures outlined in Section 11.3(e) and this Section 11.5 for disposition and liquidation of the Related Mortgage Loans or Purchased Assets are commercially reasonable. Each of Guarantor and Seller further agrees that it would not be commercially unreasonable for Buyer to dispose of the Related Mortgage Loans or Purchased Assets or any portion thereof by using internet sites that provide for the auction of assets similar to the Related Mortgage Loans or Purchased Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets.
11.6 No Obligation to Pursue Remedy. Buyer shall have the right to exercise any of its rights and/or remedies without presentment, demand, protest or further notice of any kind other than as expressly set forth herein, all of which are hereby expressly waived by Guarantor and Seller. Guarantor and Seller further waive any right to require Buyer to (a) proceed against any Person, (b) proceed against or exhaust all or any of the Mortgage Loans or Purchased Assets or pursue its rights and remedies as against the Mortgage Loans or Purchased Assets in any particular order, or (c) pursue any other remedy in its power. Buyer shall not be required to take any steps necessary to preserve any rights of Guarantor or Seller against holders of mortgages prior in lien to the lien of any Mortgage Loan or Purchased Asset or to preserve rights against prior parties. No failure on the part of Buyer to exercise, and no delay in exercising, any right, power or remedy provided hereunder, at law or in equity shall operate as a waiver thereof; nor shall any single or partial exercise by Buyer of any right, power or remedy provided hereunder, at law or in equity preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Without intending to limit the foregoing, all defenses based on the statute of limitations are hereby waived by Guarantor and Seller. The remedies herein provided are cumulative and are not exclusive of any remedies provided at law or in equity.
11.7 No Judicial Process. Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Guarantor and Seller hereby expressly waives, to the extent permitted by law, any right that Guarantor or Seller might otherwise have to require Buyer to enforce its rights by judicial process. Guarantor and Seller also waive, to the extent permitted by law, any defense that Guarantor or Seller might otherwise have to its obligations under this Agreement arising from use of nonjudicial process, enforcement and sale of all or any portion of the Mortgage Loans or Purchased Assets or from any other election of remedies. Guarantor and Seller recognize that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.
11.8 Reimbursement of Costs and Expenses. Buyer may, but shall not be obligated to, advance any sums or do any act or thing necessary to uphold and enforce the lien and priority of, or the
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security intended to be afforded by, any Mortgage Loan or Purchased Asset, including, without limitation, payment of delinquent taxes or assessments and insurance premiums. All advances, charges, reasonable and documented costs and expenses, including reasonable attorneys’ fees and disbursements and losses resulting from any hedging arrangements entered into by Buyer pursuant to Section 11.3(h), incurred or paid by Buyer in exercising any right, power or remedy conferred by this Agreement, or in the enforcement hereof, together with interest thereon, at the Default Rate, from the time of payment until repaid, shall become a part of the Repurchase Price.
11.9 Application of Proceeds. The proceeds of any sale or other enforcement of Buyer’s interest in all or any part of the Related Mortgage Loans or Purchased Assets shall be applied by Buyer:
(a) first, to the payment of the costs and expenses of such sale or enforcement, including reasonable compensation to Buyer’s agents and counsel, and all reasonable and documented expenses, liabilities and advances made or incurred by or on behalf of Buyer in connection therewith;
(b) second, to the costs of cover and/or related hedging transactions;
(c) third, to the payment of any other amounts due to Buyer under this Agreement other than the aggregate Repurchase Price;
(d) fourth, to the payment of the aggregate Repurchase Price;
(e) fifth, to all other obligations owed by Seller or Guarantor under this Agreement and the other Principal Agreements;
(f) sixth, in accordance with Buyer’s exercise of its rights under Section 11.10 hereof; and
(g) seventh, the remainder to (or at the direction of) Seller.
11.10 Rights of Set-Off. Buyer and its Affiliates (the “Buyer Parties”) shall have the right, after the occurrence and continuance of an Event of Default, to set-off claims and to appropriate or apply any and all deposits of money or property or any other Debt at any time held or owing by Buyer Parties to or for the credit of the account of Guarantor or Seller against and on account of the obligations and liabilities of Guarantor or Seller under this Agreement or the Credit Agreement, irrespective of whether or not Buyer shall have made any demand hereunder and whether or not said obligations and liabilities shall have become due; provided, however, that the aforesaid right to set-off shall not apply to any deposits of escrow monies being held on behalf of the Mortgagors related to the Related Mortgage Loans or other third parties. Without limiting the generality of the foregoing, the Buyer Parties shall be entitled to apply property held by Buyer Parties with respect to any Transaction against obligations and liabilities owed by Guarantor or Seller to the Buyer Parties with respect to any “Transaction” under the Credit Agreement, but for the avoidance of doubt, the Buyer Parties shall not be entitled to apply property held by Buyer Parties with respect to any “Transaction” under the Credit Agreement against obligations and liabilities owed by Guarantor or Seller to the Buyer Parties with respect to any Transaction under the Agreement. The Buyer Parties may set off cash, the proceeds of any liquidation of the Related Mortgage Loans or Purchased Assets and all other sums or obligations owed by the Buyer Parties to Seller or Guarantor against all of Guarantor’s or Seller’s obligations to the Buyer Parties, whether under this Agreement, under a Transaction, or under any other agreement between the parties (including the Credit Agreement), or otherwise, whether or not such obligations are then
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due, without prejudice to the Buyer Parties’ right to recover any deficiency. Buyer agrees promptly to notify Guarantor or Seller after any such set-off and application made by the Buyer Parties; provided that the failure to give such notice shall not affect the validity of such set-off and application.
Notwithstanding anything to the contrary contained herein or in any Principal Agreement, if Seller, Guarantor or any of their respective Affiliates (each such entity, a “Seller Entity”) owes any obligation to Buyer, GS&Co. or any Affiliate thereof, including in its capacity as Buyer (each such entity, an “Buyer Entity”), such Buyer Entity may, during the occurrence and continuance of a Default or an Event of Default, setoff and net: (i) any collateral pledged by any Seller Entity to any Buyer Entity or held or carried for any Seller Entity by any Buyer Entity; and (ii) any collateral required to be paid or returned by any Seller Entity to any Buyer Entity. Buyer agrees promptly to notify Seller after any such set-off and application made by any Buyer Entity; provided that the failure to give such notice shall not affect the validity of such set-off and application.
Buyer, Guarantor and Seller each intends and agrees that all such payments pursuant to this Section 11.10 shall be “settlement payments” as such term is defined in Bankruptcy Code Section 741(8).
ARTICLE 12
INDEMNIFICATION
INDEMNIFICATION
12.1 Indemnification. Except as expressly otherwise set forth in this Agreement to the contrary, each of Seller and Guarantor shall indemnify and hold harmless each of the Buyer Parties and any of their respective partners, officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against any and all liabilities, obligations, losses, claims damages, penalties, judgments, suits, costs, expenses and disbursements of any kind whatsoever (including without limitation reasonable fees and disbursements of any of its counsel) (“Losses”) that may at any time (including, without limitation, such time as this Agreement shall no longer be in effect and the Transaction shall have been repaid in full) be imposed upon, incurred by or asserted against such Indemnified Party in any way relating to or arising out of (i) the execution or delivery of this Agreement or any other Principal Agreement or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the transactions contemplated thereby, (ii) the use of the proceeds of the Purchased Assets or the Transactions or Seller’s and Guarantor’s obligations thereunder, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnified Party is a party thereto (and regardless of whether such matter is initiated by a third party or by Seller, Guarantor or any of their respective Affiliates or Subsidiaries), except to the extent that such Losses have been found in a final, non-appealable judgment by a court of competent jurisdiction (or, should the parties mutually agree to binding arbitration, a final determination of the arbitrator) to have resulted directly and solely from the Indemnified Party’s gross negligence, or willful misconduct, (iv) any breach of a representation, warranty or covenant of a Seller, Guarantor or their officers, directors or employees in this Agreement, any other Principal Agreement or in any officer’s certificate or other document delivered pursuant hereto or thereto, and any and all actions taken or omissions pursuant hereto or thereto; provided, that, in the case of any representation or warranty set forth in Exhibit H, all determinations as to the existence of a breach of any such representation or warranty shall be made without reference to any qualification as to Seller’s or Guarantor’s knowledge, it being
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understood that all such qualifications are made in the interest of full and fair disclosure and to preclude claim of fraud and misrepresentation, but are not intended to limit the remedies available under this Section 12.1 for breach of any such representation or warranty), (v) the actual or alleged violation of any federal, state, municipal or local predatory lending laws and (vi) the actual or alleged presence of hazardous materials on any Mortgaged Property or any environmental action relating in any way to any Mortgaged Property. Each of Seller and Guarantor also agrees to reimburse an Indemnified Party within thirty (30) days following a receipt of an invoice therefor from such Indemnified Party for all such Indemnified Party’s reasonable and documented costs and expenses incurred in connection with the enforcement or the preservation of such Indemnified Party’s rights under this Agreement, any other Principal Agreement (provided that if the terms of any Principal Agreement conflict with the foregoing, the terms of the Principal Agreement shall control) or any transaction contemplated hereby or thereby, including without limitation the reasonable fees and documented, out-of-pocket disbursements of its external counsel. To the fullest extent permitted by any applicable law, each party hereto shall not assert, and hereby waives, any claim, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, the Principal Agreements or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Transaction or the use of the proceeds thereof. The agreements in this Section 12.1 shall survive the repayment, satisfaction or discharge of all the other obligations and liabilities of the parties under the Principal Agreements. All amounts due under this Section 12.1 shall be fully payable within ten (10) calendar days after demand therefor. This Section 12.1 shall not apply to any amounts due and owing pursuant to Section 4.5 or with respect to Taxes other than Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
12.2 Reimbursement. Each of Seller and Guarantor (without duplication) agrees to pay within thirty (30) days following a receipt of an invoice therefor from Buyer, all of the reasonable and documented out-of-pocket costs and expenses incurred by Buyer in connection with (i) the consummation and administration of the transactions contemplated hereby including, without limitation, all the due diligence, inspection, testing and review costs and expenses incurred by Buyer with respect to Purchased Assets prior to the Initial Closing Date or pursuant to Section 6.6, or otherwise (including any fees payable to any Disbursement Agent or Calculation Agent appointed by Buyer based upon invoices, from time to time, provided by Buyer to Seller and Guarantor, provided by Buyer to Seller), (ii) the development, preparation and execution of, and any amendment, supplement, waiver, increase of the Aggregate Transaction Limit or modification to, any Principal Agreement or any other documents prepared in connection therewith, and (iv) all the reasonable and documented fees, disbursements and expenses of counsel to Buyer incurred in connection with any of the foregoing.
12.3 Payment of Taxes.
(a) All payments made by or on account of any obligation of Guarantor or Seller under this Agreement or any other Principal Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, levies, imposts, duties, deductions, charges, assessments, fees or withholdings (including backup withholdings), and all liabilities (including penalties, interest and additions to tax) with respect thereto imposed by any Governmental Authority (collectively, “Taxes”), except as required by applicable law. If Guarantor or Seller is required by law or regulation to deduct or withhold any Taxes from or in respect of any amount payable hereunder, it
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shall: (i) make such deduction or withholding; (ii) pay the amount so deducted or withheld to the appropriate Governmental Authority not later than the date when due; (iii) deliver to Buyer, promptly, original tax receipts and other evidence satisfactory to Buyer of the payment when due of the full amount of such Taxes; and (iv) if such Tax is an Indemnified Tax (as defined below), pay to Buyer such additional amounts as may be necessary so that Buyer receives, free and clear of all such Indemnified Taxes (including such deductions and withholdings applicable to additional sums payable under this Section), a net amount equal to the amount it would have received under this Agreement, as if no such deduction or withholding had been made. In addition, Guarantor and Seller agree to timely pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp, court or documentary taxes, intangible, filing or similar Taxes (including, without limitation, mortgage recording taxes, transfer taxes and similar fees) imposed by any Governmental Authority that arise from any payment made hereunder or from the execution, delivery, performance or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement except any such Taxes imposed on Buyer with respect to an assignment, other than an assignment made at the request of Seller or Guarantor, by a jurisdiction (or political subdivision thereof) having a present or former connection with Buyer (other than any connection arising from executing, delivering, being party to, engaging in any transaction pursuant to, performing its obligations under or enforcing this Agreement) (“Other Taxes”). Other Taxes and Taxes (other than Excluded Taxes) imposed on or with respect to any payment made by or on account of any obligation of Guarantor or Seller under this Agreement shall be referred to in this Agreement as “Indemnified Taxes.”
(b) Seller and Guarantor shall within thirty (30) calendar days after demand therefor, indemnify Buyer for the full amount of any and all Indemnified Taxes (including any Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 12.3) arising with respect to the Purchased Assets, the Principal Agreements and other documents related thereto and fully indemnify and hold Buyer harmless from and against any and all liabilities or reasonable expenses with respect to or resulting from any delay or omission to pay such Taxes, whether or not such Indemnified Taxes were correctly or legally imposed or assessed by the relevant Governmental Authority provided that if Buyer fails to give notice to Seller and Guarantor of the imposition of any Indemnified Taxes within 120 days following Buyer’s receipt of actual written notice of the imposition of such Taxes, there will be no obligation for Seller and Guarantor to pay interest or penalties attributable to the period beginning after such 120th day and ending seven (7) days after Seller or Guarantor receives notice from Buyer. A certificate as to the amount of any payment or liability of Buyer with respect to such Indemnified Taxes delivered to Seller by Buyer shall be conclusive absent manifest error. As soon as practicable after any payment of Taxes by Seller or Guarantor to a Governmental Authority pursuant to this Section 12.3, Seller or Guarantor shall deliver to Buyer the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Buyer, and provided further that in no event shall Buyer be required to complete, execute or submit to Seller any of the documentation listed in Section 12.3(d) if there is a change in United States law prohibiting provision of any such documentation which occurs subsequent to the date on which applicable
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documentation listed under Section 12.3(d) was previously provided by Buyer to Seller in accordance with the requirements of Section 12.3(d).
(c) If Buyer is entitled to an exemption or reduction of withholding Tax with respect to payments made under this Agreement, Buyer shall deliver to Seller and Guarantor, as applicable, at the time or times reasonably requested by Seller or Guarantor, such properly completed and executed documentation reasonably requested by Seller as will permit such payments to be made without withholding or at a reduced rate of withholding; provided that the completion, execution and submission of such documentation (other than the documentation listed in Section 12.3(d)) shall not be required if in Buyer’s reasonable judgment such completion, execution or submission would subject Buyer to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Buyer.
(d) Without limiting the generality of Section 12.3(c), if Buyer is (i) not incorporated under the laws of the United States, any State thereof, or the District of Columbia or (ii) not otherwise treated as a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “Foreign Buyer”) and is entitled to an exemption from or reduction of U.S. federal withholding Taxes with respect to payments made under this Agreement, Buyer shall provide Seller with an original, properly completed and duly executed United States Internal Revenue Service (“IRS”) Form W-8BEN, W-8BEN-E, W-8IMY or W-8ECI or any successor form prescribed by the IRS, together with any necessary attachments, (i) certifying that such Foreign Buyer is entitled to benefits under an income tax treaty to which the United States is a party which reduces or eliminates the rate of withholding tax on payments of interest or setting forth a basis to claim the benefits of the exemptions from U.S. withholding taxes for portfolio interest under Section 881(c) of the Code or (ii) certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States on or prior to the date upon which each such Foreign Buyer becomes a Buyer. If an IRS form previously delivered expires or becomes obsolete or inaccurate in any respect, each Foreign Buyer will update such form or promptly notify Seller of its legal inability to do so. Should a Foreign Buyer, which is otherwise exempt from a withholding tax, become subject to Taxes because of its failure to deliver an IRS form required hereunder, Seller shall, at no cost or expense to Seller, take such steps as such Foreign Buyer shall reasonably request to assist such Foreign Buyer to recover such Taxes. Upon the execution of this Agreement or otherwise becoming a Buyer, each Buyer that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to Seller an original, properly completed and duly executed IRS Form W-9 or such other documentation or information prescribed by applicable laws or reasonably requested by Seller as will enable Seller to determine whether or not such Buyer is subject to backup withholding or information reporting requirements.
(e) Nothing contained in this Section 12.3 shall require Buyer to make available any of its Tax returns or other information that it deems to be confidential or proprietary or otherwise subject Buyer to any material unreimbursed cost or expense or materially prejudice the legal or commercial position of Buyer, except for such IRS forms Buyer is required to deliver to Seller under Section 12.3(d).
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(f) If a payment made to Buyer under this Agreement would be subject to U.S. federal withholding tax imposed under FATCA if such Buyer were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Buyer shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. For purposes of this clause, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(g) If Buyer determines, in its discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 12.3 (which amounts shall include the payment of additional amounts pursuant to this section), it shall pay to Seller an amount equal to such refund (but only to the extent of indemnity payments made under this section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of Buyer and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Seller, upon the request of Buyer, shall repay to Buyer the amount paid over pursuant to this Section 12.3(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that Buyer is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 12.3(g), in no event will Buyer be required to pay any amount to Seller pursuant to this Section 12.3(g) the payment of which would place Buyer in a less favorable net after-Tax position than Buyer would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments had never been paid.
(h) Buyer shall indemnify Seller, within ten (10) days after demand therefore, for any Taxes attributable to Buyer’s failure to comply with the provisions of Section 14.7 relating to the maintenance of a Participant Register.
(i) Each party’s obligations under this Section 12.3 shall survive any assignment of rights by, or the replacement of, Buyer, and the repayment, satisfaction or discharge of all obligations under any Principal Agreement.
12.4 Buyer Payment. If Seller fails to pay when due any costs, expenses or other amounts payable by it under this Article 12, such amount may be paid on behalf of Seller by Buyer, in its discretion and Seller shall remain liable for any such payments by Buyer. No such payment by Buyer shall be deemed a waiver of any of Buyer’s rights under any of the Principal Agreements.
12.5 Agreement not to Assert Claims. Each of Guarantor and Seller agrees not to assert any claim against any Indemnified Party on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Principal Agreements, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated hereby or thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE
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NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
12.6 Survival. Without prejudice to the survival of any other agreement of Guarantor or Seller hereunder, the covenants and obligations of Guarantor and Seller contained in this Article 12 shall survive the payment in full of the Repurchase Prices and all other amounts payable hereunder and delivery of the Purchased Assets by Buyer against full payment therefor.
ARTICLE 13
TERM AND TERMINATION
TERM AND TERMINATION
13.1 Term. Provided that no Event of Default has occurred and is continuing, and except as otherwise provided for herein, this Agreement shall commence on the Initial Closing Date and continue until the Facility Termination Date. On the date of expiration or termination of this Agreement, all amounts due Buyer under the Principal Agreements shall be immediately due and payable without notice to Guarantor or Seller and without presentment, demand, protest, notice of protest or dishonor, or other notice of default, and without formally placing Guarantor or Seller in default, all of which are hereby expressly waived by Guarantor and Seller.
13.2 Termination.
(a) This Agreement may be, without cause and for any reason whatsoever, terminated by mutual agreement between Buyer, Seller and Guarantor.
(b) Upon termination of this Agreement in accordance with this Agreement, all outstanding amounts due to Buyer under the Principal Agreements shall be immediately due and payable without notice (except as expressly set forth in this Agreement) to Guarantor or Seller and without presentment, demand, protest, notice of protest or dishonor, or other notice of default, and without formally placing Guarantor or Seller in default, all of which are hereby expressly waived by Guarantor and Seller. Further, any termination of this Agreement shall not affect the outstanding obligations of Seller under this Agreement or any other Principal Agreement and all such outstanding obligations and the rights and remedies afforded Buyer in connection therewith, including, without limitation, those rights and remedies afforded Buyer under this Agreement, shall survive any termination of this Agreement. Buyer shall not be liable to Seller for any costs, loss or damages arising from or relating to a termination by Buyer in accordance with any subsection of this Section 13.2.
13.3 Extension of Term. Upon mutual agreement of Seller, Guarantor and Buyer, the term of this Agreement may be extended. Such extension may be made subject to the terms and conditions hereunder and to any other terms and conditions as Buyer may determine to be necessary or advisable. Under no circumstances shall such an extension by Buyer be interpreted or construed as a forfeiture by Buyer of any of its rights, entitlements or interest created hereunder. Each of Seller and Guarantor acknowledge and understand that Buyer is under no obligation whatsoever to extend the term of this Agreement beyond the initial term.
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ARTICLE 14
GENERAL
GENERAL
14.1 Integration; Servicing Provisions Integral and Non-Severable. This Agreement, together with the other Principal Agreements, and all other documents executed pursuant to the terms hereof and thereof, constitute the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications with respect to the subject matter hereof, all of which such communications are merged herein. All Transactions hereunder constitute a single business and contractual relationship and each Transaction has been entered into in consideration of the other Transactions. Accordingly, each of Buyer, Guarantor and Seller agrees that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted. Without limiting the generality of the foregoing, the provisions of this Agreement related to the servicing and the Participation Interest in the Servicing Rights of the Related Mortgage Loans are integral, interrelated, and are non-severable from the purchase and sale provisions of the Agreement. Buyer has relied upon such provisions as being integral and non-severable in determining whether to enter into this Agreement and in determining the Purchase Price methodology for such Mortgage Loans. The integration of these servicing provisions is necessary to enable Buyer to obtain the maximum value from the sale of the Purchased Assets or Related Mortgage Loans by having the ability to sell the Participation Interest in the Servicing Rights related to the Related Mortgage Loans free from any claims or encumbrances. Further, the fact that Seller, Guarantor or any Servicer may be entitled to a servicing fee for interim servicing of the Related Mortgage Loans or that Buyer may provide a separate notice of default to Guarantor or Seller or any Servicer regarding the servicing of the Related Mortgage Loans shall not affect or otherwise change the intent of Guarantor, Seller and Buyer regarding the integral and non-severable nature of the provisions in the Agreement related to servicing and Servicing Rights nor will such facts affect or otherwise change Buyer’s ownership of a Participation Interest in the Servicing Rights related to the Related Mortgage Loans.
14.2 Amendments. Other than as contemplated by Section 9.15, no modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is in writing and signed by the party against whom the enforcement of such modification, waiver, amendment, discharge or change is sought.
14.3 No Waiver. No failure or delay on the part of Seller, Guarantor or Buyer in exercising any right, power or privilege hereunder and no course of dealing between Seller, Guarantor and Buyer shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer.
14.4 Remedies Cumulative. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies that Guarantor, Seller or Buyer would otherwise have. No notice or demand on Seller or Guarantor in any case shall entitle Seller or Guarantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Buyer to any other or further action in any circumstances without notice or demand.
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14.5 Rehypothecation; Assignment. The Principal Agreements may not be assigned by Guarantor or Seller. The applicable Principal Agreements, along with Buyer’s right, title and interest, including its security interest, in any or all of the Related Mortgage Loans, Purchased Assets and other Purchased Items, may, at any time, be transferred or assigned, in whole or in part, by Buyer (including but not limited to any such transfer or assignment to a Federal Reserve Bank or Federal Home Loan Bank); provided that no such assignment or pledge shall release the transferor Buyer from its obligations hereunder. Any transferee or assignee of Buyer may enforce any such Principal Agreements and such security interest directly against Seller and Guarantor.
Buyer shall have free and unrestricted use of all Purchased Assets and nothing shall preclude Buyer from engaging in repurchase transactions with such Purchased Assets or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating such Purchased Assets; provided, that no such transaction shall affect the obligations of Buyer to transfer the Purchased Assets to Seller on the Repurchase Date free and clear of any pledge, Lien, security interest, encumbrance, charge or other adverse claim as set forth in Section 6.5.
Buyer, acting solely for this purpose as a non-fiduciary agent of Seller, shall maintain a register (the “Register”) on which it shall record the rights of Buyer and any assignee of Buyer under this Agreement, and each assignment. The Register shall include the names and addresses of Buyer (including all assignees or successors) and the percentage or portion of such rights and obligations assigned. The entries in the Register shall be conclusive absent manifest error, and Buyer and Seller shall treat each person whose name is recorded in the Register pursuant to the terms hereof as a Buyer hereunder for all purposes of this agreement; provided, however, that a failure to make any such recordation, or any error in such recordation shall not affect Seller’s obligations in respect of such rights. The Register shall be available for inspection by Seller at any reasonable time and from time to time upon reasonable advance notice.
Notwithstanding any other provision of this Agreement to the contrary, Buyer may pledge as collateral, or grant a security interest in, all or any portion of its rights in, to and under this Agreement and any other Principal Agreement, to (i) a security trustee in connection with the funding by Buyer of Transactions or (ii) a Federal Reserve Bank to secure obligations to such Federal Reserve Bank, in each case without the consent of Seller; provided that no such pledge or grant shall release Buyer from its obligations under this Agreement.
14.6 Successors and Assigns. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
14.7 Participations. Buyer may sell participation interests in its obligations hereunder (each such recipient of a participation a “Participant”); provided that after giving effect to the sale of such participation, Buyer’s obligations hereunder and rights to consent to any waiver hereunder or amendment hereof shall remain unchanged, Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable to Buyer hereunder and all rights to consent to any waiver hereunder or amendment hereof shall be determined as if Buyer had not sold such participation interest, and Guarantor and Seller shall continue to deal solely and directly with Buyer. If Buyer sells a participation it shall, acting solely for this purpose as a non-fiduciary agent of Seller, maintain a register on which it enters the name and address of each Participant and the outstanding principal amounts (and accrued interest) of each Participant’s interest in the Purchased Assets or other obligations under the Principal Agreements
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(the “Participant Register”); provided that Buyer shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Principal Agreement) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations and Proposed Treasury Regulations Section 1.163-5(b) (or any amended or successor version). The entries in the Participant Register shall be conclusive absent manifest error, and Buyer shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. Each recipient of a participation shall, to the fullest extent permitted by law, have the same rights, benefits and obligations, hereunder with respect to the rights and benefits so participated as it would have if it were Buyer hereunder, except that no Participant shall be entitled to receive any greater payment than Buyer would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a change in law that occurs after the Participant acquired the applicable participation.
14.8 Invalidity. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been included.
14.9 Additional Instruments. Guarantor and Seller shall execute and deliver such further instruments and shall do and perform all matters and things necessary or expedient to be done or observed for the purpose of effectively creating, maintaining and preserving the security and benefits intended to be afforded by this Agreement.
14.10 Survival. All representations, warranties, covenants and agreements herein contained on the part of Guarantor and Seller shall survive any Transaction and shall be effective so long as this Agreement is in effect or there remains any obligation of Seller hereunder to be performed.
14.11 Notices.
(a) All notices, demands, consents, requests and other communications required or permitted to be given or made hereunder in writing shall be mailed (first class, return receipt requested and postage prepaid) or delivered in person or by overnight delivery service or by electronic mail, addressed to the respective parties hereto at their respective addresses set forth below or, as to any such party, at such other address as may be designated by it in a notice to the other:
If to Seller: HPFC Sub 1 LLC
2211 Old Earhart Road
Suite 250
Ann Arbor, MI 48105
Attention: Legal
Email: [***]
Suite 250
Ann Arbor, MI 48105
Attention: Legal
Email: [***]
If to Guarantor: Home Point Financial Corporation
2211 Old Earhart Road
2211 Old Earhart Road
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Suite 250
Ann Arbor, MI 48105
Attention: Legal
Email: [***]
If to Buyer: Goldman Sachs Bank USA
2001 Ross Avenue, Suite 2800
Dallas, TX 75201
Attn: Warehouse Lending
Email: [***]
All written notices shall be conclusively deemed to have been properly given or made when duly delivered, if delivered in person or by overnight delivery service, or on the fifth (5th) Business Day after being deposited in the mail, if mailed in accordance herewith, or upon transmission by the sending party of an electronic mail with respect to which no delivery failure is received by such sending party, if delivered by electronic mail. Notwithstanding the foregoing, any notice of termination shall be deemed effective upon mailing, transmission, or delivery, as the case may be.
(b) All notices, demands, consents, requests and other communications required or permitted to be given or made hereunder which are not required to be in writing may also be provided electronically either (i) as an electronic mail sent and addressed to the respective parties hereto at their respective electronic mail addresses set forth below, or as to any such party, at such other electronic mail address as may be designated by it in a notice to the other or (ii) with respect to Buyer, via a posting of such notice on Buyer’s customer website(s).
If to Seller: [***]
If to Guarantor: [***]
If to Buyer: [***]
14.12 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed and enforced in accordance with and governed by the laws of the State of New York, without regard to principles of conflicts of laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).
14.13 Submission to Jurisdiction; Service of Process; Waivers. All legal actions between or among the parties regarding this Agreement, including, without limitation, legal actions to enforce this Agreement or because of a dispute, breach or default of this Agreement, shall be brought in the federal or state courts located in New York County, New York, which courts shall have sole and exclusive in personam, subject matter and other jurisdiction in connection with such legal actions. The parties hereto irrevocably consent and agree that venue in such courts shall be convenient and appropriate for all purposes and, to the extent permitted by law, waive any objection that they may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same. The parties hereto further irrevocably consent and agree that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified
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mail (or any substantially similar form of mail), postage prepaid, to its address set forth in Section 14.11(a), and that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction.
14.14 Waiver of Jury Trial. Each of Seller, Guarantor and Buyer hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement, any other Principal Agreement or the transactions contemplated hereby or thereby.
14.15 Counterparts. This Agreement may be executed in any number of counterparts by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. The parties agree that this Agreement and signature pages may be transmitted between them by electronic mail and by means of by means of (i) an original manual signature, (ii) a faxed, scanned, or photocopied manual signature, (iii) a pdf signature or (iii) any other electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the UCC (collectively, “Signature Law”), in each case to the extent applicable. Each faxed, scanned, or photocopied manual signature, or other electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any other party (whether such signature is with respect to this Agreement or any notice, officer’s certificate or other ancillary document delivered pursuant to or in connection with this Agreement) and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings.
14.16 Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning or interpretation of any provisions hereof.
14.17 Customer Information. This Agreement and its terms, provisions, supplements and amendments, and notices and reports delivered hereunder or under any other Principal Agreement, are proprietary to Buyer, Seller, and Guarantor, and shall be held by each party hereto, as applicable, in strict confidence, and shall not be disclosed to any third party without the written consent of Buyer, Seller, or Guarantor, as applicable, except for (i) disclosure to Buyer’s assignees, participants, prospective assignees or prospective participants, Buyer’s, Guarantor’s, or Seller’s direct and indirect Affiliates and Subsidiaries, agents, consultants, attorneys or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence, provided that, any such prospective assignee or prospective participant is advised of, and agrees in writing to be bound by, the provisions of this Section 14.17, or (ii) disclosure required by law, rule, regulation or order of a court or other regulatory body. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Principal Agreements, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to
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understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that neither Seller nor Guarantor may disclose the name of or identifying information with respect Buyer or any pricing terms or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior written consent of Buyer.
Each of Buyer, Seller and Guarantor understand that the Customer Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm Leach Bliley Act (the “GLB Act”), and each of Seller, Guarantor and Buyer agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act FTC’s Privacy Regulations, 16 C.F.R. Part 313, and Standards for Safeguarding Customer Information, 16 C.F.R. Part 314 and any other applicable local, federal and state privacy laws and regulations, and other applicable law of any government or agency or instrumentality thereof regarding the privacy or security of Customer Information (the “Privacy Requirements”). Each of Seller, Guarantor and Buyer agrees that it shall comply with the Privacy Requirements and shall cause all of its agents, employees, Affiliates, Subsidiaries and any other person or entity that receives the Customer Information from Seller, Guarantor or Buyer, respectively, to comply with the Privacy Requirements and Seller, Guarantor or Buyer, respectively, will promptly notify Seller, Guarantor or Buyer, as applicable, of any breach of the Privacy Requirements. Furthermore, each Seller and Guarantor shall maintain (and shall cause all of its respective agents, employees, in the case of Seller, Parent, Subsidiaries and any other person or entity that receives the Customer Information from Seller or Buyer) to maintain appropriate administrative, technical and physical safeguards to protect the security, confidentiality and integrity of Customer Information, including, if applicable, maintaining security measures designed to meet the Privacy Requirements. For purposes of this Section 14.17, “Customer Information” means any non-public personal information (as such term is defined in the FTC’s Privacy Regulations) concerning an obligor under a Related Mortgage Loan or Purchased Asset regardless of whether such information was provided by Seller, Guarantor or Buyer or was prepared by Seller, Guarantor or Buyer or any Affiliate or agent of Seller or Buyer based on or derived from the Customer Information. Any communications by Seller or Buyer with any obligor under a Related Mortgage Loan or Purchased Asset shall comply with all applicable laws, including, without limitation, the Telemarketing Sales Rule, as amended, 16 C.F.R. Part 310. Seller, Guarantor or Buyer shall permit the other and its designees, at Seller’s and Guarantor’s expense, as applicable, upon prior written notice and as reasonably agreed to by the parties hereto in timing and scope, to examine and verify compliance with the Privacy Requirements with respect to Customer Information which may include, but shall not be limited to, conducting information security assessments of such party and such party’s procedures. Notwithstanding the foregoing, Buyer may disclose Customer Information expressly for marketing purposes, as and to the extent permitted by the GLB Act. Buyer shall implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the GLB Act) of Buyer or any Affiliate of Buyer holds, (b) protect against any anticipated threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Buyer represents and warrants that it has implemented appropriate measures to meet the objectives of Section 501(b) of the GLB Act and of the applicable standards adopted pursuant thereto, as now or hereafter in
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effect. Buyer shall notify Seller promptly following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Seller or any Affiliate of Seller.
14.18 Intent. Each of Guarantor, Seller and Buyer recognize and intend that:
(a) this Agreement and each Transaction hereunder constitutes a “repurchase agreement” as that term is defined in Section 101(47)(A)(i) of the Bankruptcy Code, a “securities contract” as that term is defined in Section 741(7)(A)(i) of the Bankruptcy Code and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code and that the pledge of the Related Credit Enhancement in Section 6.1 constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. The parties intend (i) for each Transaction to qualify for the “safe harbor” treatment provided by the Bankruptcy Code and for each party to be entitled to all of the rights, benefits and protections afforded to Persons under the Bankruptcy Code with respect to a “repurchase agreement” as defined in Section 101(47) of the Bankruptcy Code, a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, and that payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Section 741 of the Bankruptcy Code, (ii) for the grant of a security interest set forth in Section 6 to also be a “securities contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy Code, a “repurchase agreement” as that term is defined in Section 101(47)(A)(v) of the Bankruptcy Code, and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, and (iii) that each party shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract,” and a “master netting agreement,” including (x) the rights, set forth in Section 11.3 and in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased Assets and terminate this Agreement, (y) the right to offset or net out as set forth in this Agreement and in Sections 362(b)(6), 362(b)(7), 362(b)(27), and 362(o) of the Bankruptcy Code, and (z) the protections set forth in Section 546 of the Bankruptcy Code.
(b) It is understood that Buyer’s right to accelerate or terminate this Agreement or to liquidate Purchased Assets and Related Mortgage Loans delivered to it in connection with the Transactions hereunder or to exercise any other remedies pursuant to Section 11.3 hereof is a contractual right to accelerate, terminate or liquidate this Agreement or the Transactions as described in Sections 555, 559 and 561 of the Bankruptcy Code. It is further understood and agreed that either party’s right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement or the Transactions hereunder is a contractual right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement as described in Section 561 of the Bankruptcy Code.
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(c) Each party hereto hereby further agrees that it shall not challenge, and hereby waives to the fullest extent available under applicable law its right to challenge, the characterization of (i) this Agreement or any Transaction as a “repurchase agreement,” “securities contract” and/or “master netting agreement” within the meaning of the Bankruptcy Code, or (ii) Buyer as a “repo participant” within the meaning of the Bankruptcy Code except insofar as the type of asset subject to the Transaction or, in the case of a “repurchase agreement,” the term of the Transactions, would render such definition inapplicable.
(d) The parties intend and acknowledge that any provisions hereof or in any other document, agreement or instrument that is related in any way to the servicing of the Purchased Assets and Related mortgage Loans shall be deemed “related to” this Agreement within the meaning of Sections 101(38A)(A), 101(47) and 741 of the Bankruptcy Code.
(e) The parties hereby understand, acknowledge and agree that all of the Purchased Assets (including cash) and Related Mortgage Loans shall qualify as eligible collateral under the definition of a “repurchase agreement” and/or “securities contract” under the Bankruptcy Code. However, to the extent that any of the Purchased Assets (including cash) and Related Mortgage Loans are determined to not qualify as eligible collateral under the definition of a “repurchase agreement”, “securities contract” or “master netting agreement” under the Bankruptcy Code, each of Seller and Guarantor hereby pledges to Buyer as security for the performance by Seller and Guarantor of its respective obligations under each Transaction, and hereby grants to Buyer a security interest in, those Purchased Assets (including cash), the Related Mortgage Loans and the Related Credit Enhancement which are determined to not qualify as eligible collateral under the definition of a “repurchase agreement”, “securities contract” or “master netting agreement” under the Bankruptcy Code. The parties intend that those Repurchase Assets (including cash), the Related Mortgage Loans and the Related Credit Enhancement which are determined to not qualify as eligible collateral under the definition of a “repurchase agreement” or “securities contract” under the Bankruptcy Code, shall be treated as collateral under a security agreement, arrangement or other credit enhancement related to this repurchase agreement, securities contract and master netting agreement under Sections 101(38A)(A), 101(47)(A)(v) 741(A)(xi) of the Bankruptcy Code, respectively. This pledge by Seller is in addition, and without prejudice, to the grant of a security interest in the Purchased Assets (including cash) under Section 6.
(f) Each of Guarantor, Seller and Buyer further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a);
(g) Any payments or transfers of property by Guarantor or Seller (i) on account of a Haircut, (ii) in partial or full satisfaction of a repurchase obligation, or (iii) fees and costs under this Agreement or under any Transaction shall in each case constitute “settlement payments” as such term is defined in Bankruptcy Code Section 741(8).
(h) Each of Guarantor, Seller and Buyer agree that the Agreement and the Transactions entered into hereunder are part of a single integrated, simultaneously-closing suite of financial contracts. Accordingly, Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, and (ii)
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that payments, deliveries and other transfers made by either Seller or Guarantor in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.
14.19 Insured Depository Institution. The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction (hereunder is a “qualified financial contract,” as that term is defined in the FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
14.20 Netting Contract. (a) It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).
14.21 Tax Treatment. Each party to this Agreement acknowledges that it is its intent, solely for U.S. federal income tax law and any relevant provisions of state or local tax law, but not for bankruptcy or any other non-tax purpose, to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets and to treat the Purchased Assets as beneficially owned by Seller in the absence of an Event of Default by Seller. All parties to this Agreement agree to such tax treatment and agree to take no action inconsistent with this treatment, unless required by law.
14.22 Examination and Oversight by Regulators. Guarantor and Seller agree that the transactions with Buyer under this Agreement may be subject to regulatory examination and oversight by one or more Governmental Authorities. Guarantor and Seller shall comply with all reasonable requests made by Buyer to assist Buyer in complying with regulatory requirements imposed on Buyer.
14.23 Anti-Money Laundering Laws Notice. Buyer hereby notifies Guarantor and Seller that pursuant to the requirements of Anti-Money Laundering Laws, it is required to obtain, verify and record information that identifies Seller or Guarantor, which information includes the name and address of Seller or Guarantor and other information that will allow it to identify Seller or Guarantor in accordance with Anti-Money Laundering Laws. Guarantor and Seller shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by Buyer in order to assist Buyer in maintaining compliance with Anti-Money Laundering Laws.
14.24 Amendment and Restatement.
(a) As of the Effective Date, the terms and provisions of the Existing Repurchase Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement.
(b) Notwithstanding the amendment and restatement of the Existing Repurchase Agreement, all amounts owing to Buyer under the Existing Repurchase Agreement whether on account of principal, interest or otherwise which remain outstanding shall constitute
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obligations owing hereunder. This Agreement is given in substitution of the Existing Repurchase Agreement, and not as payment of any amounts due by Original Seller thereunder, and is in no way intended to constitute a novation of the Existing Repurchase Agreement.
(c) Upon the effectiveness of this Agreement on the Effective Date, unless the context otherwise requires, each reference to the Existing Repurchase Agreement in any of the Principal Agreements and in each document, instrument or agreement executed and/or delivered in connection therewith shall mean and be a reference to this Agreement. Except as expressly modified as of the Effective Date, all of the other Principal Agreements shall remain in full force and effect and are hereby ratified and confirmed.
(d) Upon the effectiveness of this Agreement on the Effective Date, Original Seller is hereby released from the Existing Master Repurchase Agreement solely in its capacity as Original Seller and shall not have any further duties, obligations or liabilities as Original Seller thereunder or hereunder other than those of the Existing Master Repurchase Agreement that survive by their terms.
(Signature page to follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
BUYER: | GOLDMAN SACHS BANK USA | |||||||
| By: | /s/ Bryan Holt | |||||||
| Name: | Bryan Holt | |||||||
| Title: | Authorized Person | |||||||
SELLER: | HPFC SUB 1 LLC | |||||||
| By: | /s/ Joseph Ruhlin | |||||||
| Name: | Joseph Ruhlin | |||||||
| Title: | Treasurer | |||||||
GUARANTOR: | HOME POINT FINANCIAL CORPORATION | |||||||
| By: | /s/ Joseph Ruhlin | |||||||
| Name: | Joseph Ruhlin | |||||||
| Title: | Senior Managing Director - Treasurer | |||||||
ACKNOWLEDGED AND AGREED:
ORIGINAL SELLER: | HOME POINT FINANCIAL CORPORATION | |||||||
| By: | /s/ Joseph Ruhlin | |||||||
| Name: | Joseph Ruhlin | |||||||
| Title: | Senior Managing Director - Treasurer | |||||||
Signature Page to Master Repurchase Agreement
2
EXHIBIT A
GLOSSARY OF DEFINED TERMS
“Ability to Repay Rule”: 12 C.F.R. 1026.43(c), including all applicable official staff commentary.
“Acceptable Title Insurance Company”: A nationally recognized title insurance company that is acceptable to the Agencies and has not been disapproved by Buyer in a writing provided to Seller or Guarantor.
“Accepted Servicing Practices”: With respect to any related Mortgage Loan, those procedures (including collection procedures) that Seller customarily employs and exercises in servicing and administering similar mortgage loans for its own account and which are in accordance with (i) accepted mortgage servicing practices of prudent lending institutions for comparable mortgage loans in the jurisdiction where the related Mortgaged Property is located, (ii) Applicable Law and (iii) applicable Agency Guides, FHA Regulations, VA Regulations and RD Regulations.
“Account Bank”: (a) U.S. Bank, National Association, in its capacity as depository bank with respect to the Disbursement Account, as applicable, (b) Merchants Bank of Indiana, with respect to the Custodial Account or (c) such other party upon whom Buyer and Seller may mutually agree.
“Administrative Agent”: As defined in the Credit Agreement.
“Affiliate”: With respect to a Person, any other Person that (i) directly or indirectly through one or more intermediaries, controls, is controlled by, or is under direct or indirect common control with such Person or (ii) is an officer or director of such Person; provided that each Agency shall be specifically excluded as an Affiliate of Buyer. Solely for purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 25% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise; provided that other than Seller, Guarantor and their respective Subsidiaries (as applicable), no other portfolio company of Stone Point Capital LLC or its Affiliates shall be deemed to be an “Affiliate” of Seller or Guarantor.
“Agency”: Fannie Mae, Freddie Mac or Ginnie Mae, as applicable.
“Agency Audit”: Any Agency, HUD, FHA, VA and RD audits, examinations, evaluations, monitoring reviews and reports of its origination and servicing operations (including those prepared on a contract basis for any such Agency, HUD, FHA, VA or RD).
“Agency Eligible Mortgage Loan”: A Mortgage Loan that is originated in, and at all times remains in, Strict Compliance with the Agency Guides and the eligibility requirements specified for the applicable Agency Program, and is eligible for sale to or securitization by such Agency.
“Agency Guides”: The Ginnie Mae Guide, the Fannie Mae Guide, the Freddie Mac Guide, the FHA Regulations, the VA Regulations or the RD Regulations, as the context may require, in each case as such guidelines have been or may be amended, supplemented or otherwise modified from time to time (i) by Ginnie Mae, Fannie Mae, Freddie Mac, the FHA, the VA or the RD, as applicable, in the ordinary course of business and not at the request of Seller, Guarantor or any of their respective Affiliates and provided that any such amendment, supplement or other modification is applicable to at least one other Person that
Exhibit A-1
is not an Affiliate of Seller or Guarantor in addition to Seller and Guarantor or (ii) at the request of Guarantor to Ginnie Mae, Fannie Mae, Freddie Mac, the FHA, the VA or the RD, as applicable, and as to which with respect to this clause (ii), (x) Guarantor has given prior written notice to Buyer of any such amendment, supplement or other modification and (y) Buyer shall not have reasonably objected.
“Agency Program”: The Ginnie Mae Program, the Fannie Mae Program and/or the Freddie Mac Program, as the context may require.
“Aggregate Outstanding Purchase Price”: The aggregate outstanding Purchase Price of all Transactions or specified Purchased Assets, as the case may be, as of any date of determination. For purposes of clarity, the Aggregate Outstanding Purchase Price shall include any Purchase Price funded irrespective of whether a Wet Mortgage Loan subject to the related Transaction actually closed until such Purchase Price is returned pursuant to this Agreement.
“Aggregate Transaction Limit”: The maximum aggregate principal amount of Transactions (measured by the related outstanding Purchase Price) that may be outstanding at any one time, as set forth in the Transactions Terms Letter.
“Aging Event”: With respect to any Purchased Asset and any date of determination, the origination date for the Related Mortgage Loans with respect to such Purchased Asset is greater than sixty (60) calendar days prior to such date of determination.
“Aging Event Asset”: If applicable per the Transactions Terms Letter, as of any date of determination, a Purchased Asset that is not a Defective Asset and was not repurchased prior to the occurrence of an Aging Event with respect to such Purchased Asset.
“Anti-Money Laundering Laws”: As defined in Section 8.1(y) of this Agreement.
“Applicable Law” shall mean all applicable laws of any Governmental Authority, including laws relating to consumer leasing and protection and any ordinances, judgments, decrees, injunctions, writs and orders or like actions of any Governmental Authority and rules and regulations of any federal, regional, state, county, municipal or other Governmental Authority.
“Applicable Pricing Rate”: With respect to any date of determination, the Benchmark;
“Appraisal”: A written appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by a Qualified Appraiser, which (i) complies with the requirements of FIRREA and the Uniform Standards of Professional Appraisal Practice (as developed by the Appraisal Standards Board of the Appraisal Foundations) and (ii) was delivered prior to the final approval of the Mortgage Loan.
“Approvals”: With respect to Guarantor or any Servicer, the approvals obtained by the applicable Agency, HUD, the VA or the RD in designation of Guarantor or such Servicer, as applicable, as a Ginnie Mae-approved issuer, an FHA-approved mortgagee, a VA-approved lender, a RD-approved lender, a Fannie Mae-approved lender or a Freddie Mac-approved Seller/Servicer, as applicable, in good standing.
“Approved Investor”: Any Agency, Governmental Authority, Guarantor or Affiliate of Guarantor or, with respect to any other private institution, as approved by Buyer in its good faith discretion, purchasing such Related Mortgage Loans or Mortgage-Backed Securities on a forward basis from Guarantor or Buyer pursuant to a Purchase Commitment.
Exhibit A-2
“Approved Originator”: Seller, Guarantor or a correspondent of Guarantor approved in accordance with Section 3.6(c) of this Agreement.
“Approved Payee”: Any of (a) a Closing Agent approved in accordance with Section 3.6(b) of this Agreement or (b) a Qualified Originator.
“Asset”: A Participation Interest in a Mortgage Loan, or in the case of a Pooled Mortgage Loan, the resulting Mortgage-Backed Security pursuant to Section 3.7.
“Asset Management Strategy” shall mean the off-balance sheet asset management strategy disclosed by Guarantor to Buyer prior to the Initial Closing Date, which strategy may be updated, from time to time, upon Guarantor disclosing such updated strategy to Buyer; provided, however, that if such proposed strategy is substantially inconsistent with the strategy disclosed prior to the Initial Closing Date, then such proposed strategy shall not constitute the “Asset Management Strategy” for purposes of this Agreement without prior consent of Buyer (such consent not to be unreasonably withheld).
“Asset Value”: With respect to each Purchased Asset and any date of determination, an amount equal to the following, as applicable:
(a) if the Purchased Asset is not a Defective Asset, the lesser of (i) the product of the related Type Purchase Price Percentage and the least of (A) the Market Value of such Purchased Asset; (B) the unpaid principal balance of such Purchased Asset; (C) the purchase price paid by Seller for such Purchased Asset in an arms-length transaction with a Person that is not an Affiliate of Seller if it is a Mortgage Loan; and (D) the Takeout Price committed by the related Approved Investor, if applicable, as evidenced by the related Purchase Commitment; and (ii) the excess of (A) the Market Value of such Purchased Assets over (B) the product of (1) the excess of (a) 100% over (b) the related Type Purchase Price Percentage and (2) the unpaid principal balance of such Purchased Asset; or
(b) if the Purchased Asset is a Defective Asset, zero.
“Assignment”: A duly executed assignment to Buyer in recordable form of a Related Mortgage Loan, of the indebtedness secured thereby and of all documents and rights related to such Related Mortgage Loan.
“Assignment of Closing Protection Letter”: An assignment assigning and subrogating Buyer to all of Seller’s rights in a Closing Protection Letter, substantially in the form of Exhibit D hereto.
“Available Tenor”: As of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Collection Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Collection Period” pursuant to clause (d) of Section 4.6.
“Bailee Agreement”: A bailee agreement or bailee letter that is in a form acceptable to Buyer.
“Bankruptcy Code”: Title 11 of the United States Code, now or hereafter in effect, as amended, or any successor thereto.
Exhibit A-3
“Benchmark”: Initially, LIBOR; provided, that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to LIBOR or the then-current Benchmark, then “Benchmark” shall mean the Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (a) of Section 4.6 of this Agreement. It is understood that the Benchmark shall be adjusted at each applicable Reference Time.
“Benchmark Replacement”: For any Available Tenor, the first alternative set forth in the order below that can be determined by Buyer as for the applicable Benchmark Replacement Date:
(a) the sum of: (i) Term SOFR and (ii) and the related Benchmark Replacement Adjustment;
(b) the sum of: (i) Daily Simple SOFR and (ii) the related Benchmark Replacement Adjustment;
(c) the sum of: (i) the alternate benchmark rate that has been selected by Buyer as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S. dollar-denominated syndicated or bilateral credit facilities at such time and (ii) the related Benchmark Replacement Adjustment;
provided that, in the case of clause (a), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by Buyer in its sole and absolute discretion. If the Benchmark Replacement as determined pursuant to clause (a), (b) or (c) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement.
“Benchmark Replacement Adjustment”: With respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Accrual Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:
(a) for purposes of clauses (a) and (b) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by Buyer:
(i) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Collection Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;
(ii) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Collection Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and
Exhibit A-4
(b) for purposes of clause (c) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Buyer and Seller for the applicable Corresponding Tenor; giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time;
provided that, in the case of clause (a) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by Buyer in its sole and absolute discretion.
“Benchmark Replacement Conforming Changes”: With respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Collection Period”, timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that Buyer decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Buyer in a manner substantially consistent with market practice (or, if Buyer decides that adoption of any portion of such market practice is not administratively feasible or if Buyer determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Buyer decides is reasonably necessary in connection with the administration of this Agreement).
“Benchmark Replacement Date”: The earliest to occur of the following events with respect to the then-current Benchmark:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);;
(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein; or
(c) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to Seller, so long as the Buyer has not received, by 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to Seller, written notice of objection to such Early Opt-in Election from Seller.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark
Exhibit A-5
Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event”: The occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period”: The period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (a) or (b) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Principal Agreement in accordance with Section 4.6 and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Principal Agreement in accordance with Section 4.6.
“Borrower”: As defined in the Credit Agreement.
Exhibit A-6
“Business Day”: Any day other than (a) a Saturday or a Sunday, (b) a day on which the Federal Reserve or the New York Stock Exchange is closed, (c) a day on which banks in the States of Michigan, New York, Minnesota, California, Illinois, or Texas (or such other states in which the principal office of the Custodian or the Disbursement Agent is subsequently located, as specified in writing by the Custodian or the Disbursement Agent to the parties hereto) are closed or (d) a day on which trading in securities on the New York Stock Exchange or any other major securities exchange in the United States is not conducted
“Buyer Parties”: As defined in Section 11.10 of this Agreement.
“Calculation Agent”: U.S. Bank National Association, any of its successors or permitted assigns, or any such other party appointed by Buyer.
“Cash”: Money, currency or a credit balance on hand or in any demand or deposit account.
“Cash Equivalents”: As of any date of determination, any of the following: (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within [***] after such date and having, at the time of the acquisition thereof, a rating of at least “A-1” from S&P or at least “P-1” from Moody’s; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within [***] after such date and having, at the time of the acquisition thereof, a rating of at least “A-1” from S&P or at least “P-1” from Moody’s; (iii) certificates of deposit or bankers’ acceptances maturing within [***] after such date and issued or accepted by Buyer or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator), (b) has Tier 1 capital (as defined in such regulations) of not less than $[***] and (c) has a rating of at least “AA-” from S&P and “Aa3” from Moody’s; and (iv) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $[***] and (c) has the highest rating obtainable from either S&P or Moody’s.
“Change of Control”: With respect to Seller and Guarantor, any time the Permitted Holders fail to collectively own, directly or indirectly, at least (a) (i) 50.01% of the Equity Interests of Seller and of Guarantor, and (ii) a majority of the aggregate ordinary voting power for the election of directors (or persons performing similar functions) of Seller or Guarantor.
“Closing Agent”: The Person designated in accordance with Section 3.6, to receive Purchase Prices from Disbursement Agent, for the account of Seller, for the purpose of (i) funding a Related Mortgage Loan or (ii) in the case of a new origination Wet Mortgage Loan or Dry Mortgage Loan as to which the origination funds are being remitted to the closing table, originating such Mortgage Loan in accordance with local law and practice in the jurisdiction where such Mortgage Loan is being originated.
“Closing Protection Letter”: A document issued by a Closing Agent to Seller or Guarantor, issued by an Acceptable Title Insurance Company, which is fully assignable to Buyer to provide closing protection for one or more mortgage loan closings and to indemnify Seller or Guarantor for actual losses caused by certain kinds of misconduct by the Closing Agent that is customarily acceptable to Persons engaged in the origination of mortgage loans, which may be in the form of a blanket letter.
“Code”: The Internal Revenue Code of 1986, as amended.
Exhibit A-7
“Collection Period”: (a) Initially, the period commencing on the Initial Closing Date up to but not including the first day of the following calendar month, and (b) thereafter, the period commencing on the first day of each calendar month up to but not including the first day of the following calendar month.
“Committed Amount”: As of any date of determination, the portion of the Aggregate Transaction Limit that is committed as of such date of determination, as set forth in the Transactions Terms Letter.
“Connection Income Taxes”: Taxes that are imposed as a result of a present or former connection (other than any connection arising from executing, delivering, being party to, engaging in any transaction pursuant to, performing its obligations under or enforcing this Agreement, being the legal owner of the Purchased Assets) to the jurisdiction imposing such Tax (or any political subdivision thereof) and that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Conventional Conforming Mortgage Loan”: Unless defined otherwise in the Transactions Terms Letter, a first lien mortgage loan that fully conforms to all underwriting standards, loan amount limitations and other requirements of that standard Agency mortgage loan purchase program accepting only the highest quality mortgage loans underwritten without dependence on expanded criteria provisions, or that is approved by Fannie Mae’s Desktop Underwriter system or Freddie Mac’s Loan Prospector system.
“Corresponding Tenor”: With respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Credit Agreement”: That certain Credit Agreement, dated as of July 11, 2019, among the Borrower, Home Point Capital Inc., as guarantor, Administrative Agent and the financial institutions party thereto as lenders (as amended, restated, supplemented or otherwise modified from time to time).
“Custodial Account”: As defined in Section 6.2(h) of this Agreement.
“Custodial Account Control Agreement”: The Amended and Restated Custodial Account Control Agreement, dated as of the Effective Date or such other date set forth therein, by and among Seller, Guarantor, Buyer and the related Account Bank, to perfect Buyer’s security interest in the Custodial Account, in form and substance acceptable to Buyer in its sole and absolute discretion, as the same may be amended from time to time.
“Custodial and Disbursement Agreement”: The Amended and Restated Custodial and Disbursement Agreement, dated as of the Effective Date, by and among Buyer, Guarantor, Seller, Disbursement Agent and Custodian with respect to this Agreement, as the same shall be modified and supplemented and in effect from time to time.
“Custodian”: U.S. Bank National Association, any of its successors or permitted assigns, or any other Person as appointed by Buyer (with the consent of Seller, as required under the Custodial and Disbursement Agreement).
“Customer Information”: As defined in Section 14.17 of this Agreement.
“Daily Simple SOFR”: For any day, SOFR, with the conventions for this rate (which will include a lookback) being established by Buyer in accordance with the conventions for this rate selected or
Exhibit A-8
recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided that if Buyer decides that any such convention is not administratively feasible for Buyer, then Buyer may establish another convention in its reasonable discretion: provided, further, that if Buyer decides that any such rate, methodology or convention determined in accordance with clause (a) or clause (b) is not administratively feasible for Buyer, then Compounded SOFR will be deemed unable to be determined for purposes of the definition of “Benchmark Replacement.”
“Debt”: As to any Person at any time, all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (a) borrowed money; (b) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility; (d) reimbursement obligations under any letter of credit or Derivatives Contract (other than in connection with this Agreement); (e) obligations of such Person to pay the deferred purchase price of property or services; (f) Finance Lease Obligations; (g) any other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements, and whether structured as a borrowing, sale and leaseback or a sale of assets for accounting purposes; (h) any guarantee or endorsement of, or responsibility for, any Debt of the types described in this definition; (i) liabilities secured by any Lien on property owned or acquired, whether or not such a liability shall have been assumed; (j) unvested pension obligations; and (k) net obligations under any Derivatives Contract not entered into as a hedge against existing indebtedness; provided, however, that the foregoing shall exclude non-recourse debt accrued through a securitization sponsored by such Person.
“Default”: The occurrence of any event or existence of any condition that, but for the giving of notice, the lapse of time, or both, would constitute an Event of Default.
“Default Rate”: The lesser of (a) the Applicable Pricing Rate plus [***], or (b) the maximum non-usurious interest rate, if any, that at any time, or from time to time, may be contracted for, taken, reserved, charged or received under the laws of the United States and the State of New York, per annum.
“Defective Asset”: A Purchased Asset:
(a) that is not or at any time ceases to be an Eligible Asset;
(b) that is an interest in a Mortgage Loan and is the subject of fraud by any Person (including any Approved Originator) involved in the origination of such Mortgage Loan;
(c) that is an interest in a Mortgage Loan and the related Mortgaged Property is the subject of material damage or waste;
(d) for which any breach of a warranty or representation set forth in Section 8.2 occurs;
(e) that was rejected by the Approved Investor set forth in the related Purchase Commitment;
(f) that is a Related Mortgage Loan and it is determined to be ineligible for sale as a Related Mortgage Loan of the Type originally stipulated; or
(g) for which the Aggregate Outstanding Purchase Price for all relevant Purchased Assets exceeds the product of the applicable Type Sublimit (expressed as a decimal and as
Exhibit A-9
determined by the Type of Purchased Asset) and the Aggregate Outstanding Purchase Price.
“Delinquent Mortgage Loan”: Any mortgage loan with respect to which the related Mortgagor is greater than thirty (30) calendar days delinquent following the first date of delinquency under the MBA method of delinquency.
“Depository”: The Federal Reserve Bank of New York, or as otherwise defined in the glossary of the Ginnie Mae Guide, the Fannie Mae Guide or the Freddie Mac Guide, as applicable.
“Derivatives Contract”: Any rate swap transaction, basis swap, credit derivative transaction, forward rate transaction, commodity swap, commodity option, futures contract, forward commodity contract, mortgage-related forward pools contracts, including derivatives or “TBA’s”, equity or equity index swap or option, bond or bond price or bond index swap or option or forward bond or forward bond price or forward bond index transaction, interest rate option, forward foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot contract, or any other similar transaction or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, including any obligations or liabilities thereunder.
“Disbursement Account”: As defined in Section 3.5(e) of this Agreement.
“Disbursement Account Control Agreement”: The Amended and Restated Disbursement Account Control Agreement, dated as of the Effective Date or such other date set forth therein, by and among Buyer, Seller, Disbursement Agent and the related Account Bank with respect to this Agreement, as the same shall be modified and supplemented and in effect from time to time.
“Disbursement Agent”: U.S. Bank National Association, any of its successors or permitted assigns, or any other Person as appointed by Buyer (with the consent of Seller, as required under the Custodial and Disbursement Agreement).
“Dry Mortgage Loan”: A Mortgage Loan for which Buyer or its Custodian has possession of the related Mortgage Loan Documents, in a form and condition acceptable to Buyer (which for the avoidance of doubt could be a Wet Mortgage Loan on the related Purchase Date and convert to a Dry Mortgage Loan once all Mortgage Loan Documents have been received by Buyer or its Custodian).
“Early Opt-in Election”: If the then-current Benchmark is LIBOR, the occurrence of:
(a) the determination by Buyer that at least five currently outstanding U.S. dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated or bilateral credit facilities are identified in such notice and are publicly available for review), and
(b) the joint election by Buyer and Seller to trigger a fallback from LIBOR.
“Effective Date”: That effective date set forth in the recitals hereof
Exhibit A-10
“Electronic Tracking Agreement”: That certain Amended and Restated Electronic Tracking Agreement, dated as of the Effective Date, by and among Buyer, Guarantor, MERSCORP Holdings, Inc. and MERS, as the same may be amended from time to time.
“Eligible Asset”: With respect to any Transaction (a) from and after the related Purchase Date, a Participation Interest in an Eligible Mortgage Loan, and (b) from and after the related Pooling Date, a Participation Interest in an Eligible Mortgage Loan that is a Pooled Mortgage Loan, as the context may require.
“Eligible Mortgage Loan”: A Mortgage Loan that meets the eligibility criteria set forth in the Transactions Terms Letter.
“Environmental Claim” shall mean any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (a) pursuant to or in connection with any actual or alleged violation of any Environmental Law; or (b) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.
“Environmental Laws” shall mean any and all current or future federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, or any other requirements of Governmental Authorities relating to (a) environmental matters; (b) the generation, use, storage, transportation or disposal of Hazardous Materials; or (c) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Seller or Guarantor or any of their Subsidiaries or any Mortgaged Property.
“EPD Mortgage Loan”: Any mortgage loan with respect to which the related Mortgagor has not timely made the first monthly payment following the origination date of such mortgage loan, irrespective of any applicable grace period.
“Equity Interests”: All shares, interests, participations or other equivalents in the equity in a Person, including common stock, preferred stock, warrants, membership interests, partnership interests, limited partnership interests, convertible debentures, other debt securities which include voting rights in such Person referred to, and any and all agreements, instruments and documents convertible, in whole or in part, into any one or more of the foregoing.
“ERISA”: The Employee Retirement Income Security Act of 1974, as amended from time to time and any successor statute.
“ERISA Affiliate”: Any person (as defined in Section 3(9) of ERISA) that together with Guarantor or Seller would be deemed to be a “single employer” within the meaning of Sections 414(b), (c), (m) or (o) of the Code or ERISA Sections 4001(a)(14) or 4001(b)(1).
“ERISA Event”: (a) that a Reportable Event has occurred with respect to any Single Employer Plan; (b) the institution of any steps by Guarantor or any ERISA Affiliate, the Pension Benefit Guaranty Corporation or any other Person to terminate any Single Employer Plan or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Single Employer Plan; (c) the institution of any steps by Guarantor or any ERISA Affiliate to withdraw from any Multiemployer Plan or written notification of Guarantor or any ERISA Affiliate concerning the imposition of withdrawal liability; (d) a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code in
Exhibit A-11
connection with any Single Employer Plan or Multiemployer Plan; (e) the cessation of operations at a facility of Guarantor or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (f) with respect to a Single Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Code or Section 302 of ERISA, whether or not waived; (g) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single Employer Plan; (h) a determination that a Single Employer Plan is or is expected to be in “at-risk” status (within the meaning of Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA); (i) the insolvency of a Multiemployer Plan, written notification that a Multiemployer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA), or any failure by Guarantor or any ERISA Affiliate to make any required payment or contribution to a Multiemployer Plan; or (j) the taking of any action by, or the threatening of the taking of any action by, the IRS, the Department of Labor or the Pension Benefit Guaranty Corporation with respect to any of the foregoing.
“Escrow Instruction Letter”: The Escrow Instruction Letter from Seller or Guarantor to the Closing Agent, in the form provided by Seller or Guarantor, which shall include the wire instructions to the Closing Agent substantially in the form of Exhibit K hereto, as the same may be modified, supplemented and in effect from time to time.
“Event of Default”: Any of the conditions or events set forth in Section 11.1 of this Agreement.
“Excluded Taxes”: Any of the following Taxes imposed on or with respect to Buyer or required to be withheld or deducted from a payment to Buyer, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, imposed as a result of Buyer being organized under the laws of, having its principal office or applicable lending office located in, or having another present or former connection (other than any connection arising from executing, delivering, being party to, engaging in any transaction pursuant to, performing its obligations under or enforcing this Agreement or being the legal owner of the Purchased Assets) to, the jurisdiction imposing such Tax (or any political subdivision thereof), (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of Buyer under this Agreement pursuant to a law in effect on the date on which (i) such Buyer becomes a party hereto or (ii) such Buyer (other than at the request of Seller) changes its lending office, except, in each case, to the extent that, pursuant to Section 12.3, amounts with respect to such Taxes were payable either to Buyer’s assignor immediately before Buyer became a party hereto or to Buyer immediately before it changed its lending office, (c) Taxes attributable to Buyer’s failure to comply with Sections 12.3(c), (d) or (f) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Executive Order”: As defined in Section 8.1(z)(i) of this Agreement.
“Expiration Date”: As set forth in the Transactions Terms Letter.
“Facility Termination Date”: The earliest of (a) the Expiration Date set forth in the Transactions Terms Letter, (b) at Buyer’s option, upon the occurrence of an Event of Default that has not been waived by Buyer or, (c) the date that is twenty four (24) calendar months following the Initial Closing Date.
“Fannie Mae”: The Federal National Mortgage Association and any successor thereto.
“Fannie Mae Guide”: The Fannie Mae MBS Selling and Servicing Guide, as such guide may hereafter from time to time be amended.
Exhibit A-12
“Fannie Mae HomeStyle Loan”: A Mortgage Loan that fully conforms to Fannie Mae’s HomeStyle Renovation mortgage loan program and is referred to as a “HomeStyle® Renovation Mortgage” by Fannie Mae.
“Fannie Mae Program”: The Fannie Mae Guaranteed Mortgage-Backed Securities Programs, as described in the Fannie Mae Guide.
“FATCA”: (a) Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any associated regulations; (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States and any other jurisdiction, which (in either case) implements any law or regulation referred to in clause (a) above; and (c) any agreement pursuant to the implementation of, and any fiscal or regulatory legislation, rules or practices adopted pursuant to, any treaty, law or regulation referred to in clause (a) or (b) above with any Governmental Authority in any jurisdiction.
“FHA”: The Federal Housing Administration of the United States Department of Housing and Urban Development and any successor thereto.
“FHA 203k Mortgage Loan”: A Mortgage Loan that is eligible for FHA’s 203(k) loan program.
“FHA Mortgage Insurance”: Mortgage insurance authorized under Sections 203(b), 213, 221(d)(2), 222, and 235 of the Federal Housing Administration Act and provided by the FHA.
“FHA Mortgage Insurance Contract”: A contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
“FHA Regulations”: The regulations promulgated by HUD under the FHA Act, codified in 24 Code of Federal Regulations, and other HUD issuances relating to Government Mortgage Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO Score”: The credit score of the Mortgagor provided by Fair, Isaac & Company, Inc. or such other organization providing credit scores on the origination date of a Mortgage Loan; provided, that if (a) two separate credit scores are obtained on such origination date, the FICO Score shall be the lower credit score; and (b) three separate credit scores are obtained on such origination date, the FICO Score shall be the middle credit score.
“Finance Lease Obligation”: For any Person, the amount of Debt under a lease of property by such Person that would be shown as a liability on a balance sheet of such Person prepared for financial reporting purposes in accordance with GAAP.
“Financial Covenants”: The Financial Covenants contained in the Section of the Transactions Terms Letter titled “Financial Covenants.”
“FIRREA”: The Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time.
“Floor”: The benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to LIBOR.
Exhibit A-13
“Foreign Buyer”: As defined in Section 12.3(d) of this Agreement.
“Freddie Mac”: The Federal Home Loan Mortgage Corporation and any successor thereto.
“Freddie Mac Guide”: The Freddie Mac Seller’s and Servicers’ Guide, as such guide may hereafter from time to time be amended.
“Freddie Mac Program”: The Freddie Mac Home Mortgage Guarantor Program or the Freddie Mac FHA/VA Home Mortgage Guarantor Program, as described in the Freddie Mac Guide.
“Funding Deposit Account”: The non-interest bearing funding deposit account established and maintained by the Funding Deposit Account Bank, which includes any distinct subaccounts thereof, if applicable, bearing ABA Number: [***]; Acct. Name: [***]; Account Number: [***]; FFC: [***].
“Funding Deposit Account Bank”: U.S. Bank National Association, or such other party appointed by Buyer in its sole and absolute discretion.
“GAAP”: Generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession and that are applicable to the circumstances as of the date of determination.
“Ginnie Mae”: Government National Mortgage Association and any successor thereto.
“Ginnie Mae Guide”: The Ginnie Mae Mortgage-Backed Securities Guide I or II, as such guide may hereafter from time to time be amended.
“Ginnie Mae Program”: The Ginnie Mae Mortgage-Backed Securities Programs, as described in the Ginnie Mae Guide.
“Governing Documents”: With respect to any Person, its articles or certificate of incorporation or formation, by-laws, partnership agreement, limited liability company agreement, memorandum and articles of association, operating agreement or trust agreement and/or other organizational, charter or governing documents.
“Government Mortgage Loan”: Unless defined otherwise in the Transactions Terms Letter, a first lien mortgage loan that is:
(a) subject to FHA Mortgage Insurance under a FHA Mortgage Insurance Contract and is so insured, or is subject to a current binding and enforceable commitment for such insurance pursuant to the provisions of the National Housing Act, as amended, was originated in Strict Compliance, is eligible for inclusion in the Ginnie Mae Program, and unless otherwise agreed to by Buyer in its sole and absolute discretion, does not exceed the applicable maximum mortgage limits as set forth in the FHA Regulations;
(b) subject to a guarantee by the VA under a VA Loan Guaranty Agreement, or is subject to a current binding and enforceable commitment for such guarantee pursuant to the provisions of the Servicemen’s Readjustment Act, as amended, was originated in Strict Compliance, is eligible for inclusion in the Ginnie Mae Program, and unless otherwise
Exhibit A-14
agreed to by Buyer in its sole and absolute discretion, does not exceed the applicable maximum mortgage limits as set forth in the VA Regulations; or
(c) eligible to be guaranteed by the RD under a RD Loan Guaranty Agreement, and is so guaranteed pursuant to the provisions of the RD Regulations, and was originated in Strict Compliance, is eligible for inclusion in the Ginnie Mae Program, and unless otherwise agreed to by Buyer in its sole and absolute discretion, does not exceed the applicable maximum mortgage limits as set forth in the RD Regulations.
“Governmental Authority”: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its Subsidiaries or any of its properties.
“GS Bank”: Goldman Sachs Bank USA.
“GS&Co.”: Goldman Sachs & Co. LLC.
“Guaranty and Security Agreement”: That certain Amended and Restated Guaranty and Security Agreement, dated as of the Effective Date, by Guarantor in favor of Buyer (as amended, restated, supplemented or otherwise modified from time to time).
“Haircut”: With respect to a Mortgage Loan and as shall be detailed in the related Transaction Request, the excess of (a) the amount required to be paid to the Approved Payee over (b) the related Purchase Price.
“Hazardous Materials” shall mean any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law, (e) which are deemed to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring properties, (f) which consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance or (g) which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
“HUD”: The United States Department of Housing and Urban Development or any successor thereto.
“Income”: With respect to any Purchased Asset at any time until repurchased by Seller, any principal and/or interest thereon and all dividends, Proceeds and other collections and distributions thereon, but excluding, for the avoidance of doubt, any amounts a third-party Servicer is entitled to retain pursuant to the related Servicing Agreement and any escrow amounts, including any sale or liquidation premiums, liquidation proceeds, insurance proceeds, net rental income, interest, dividends or other distributions payable thereon or any fees or payments of any kind received by the related Servicer.
“Indemnified Party” or “Indemnified Parties”: As defined in Section 12.1 of this Agreement.
Exhibit A-15
“Indemnified Taxes”: As defined in Section 12.3(a) of this Agreement.
“Insolvency Event”: The occurrence of any of the following events with respect to any Person:
(i) the commencement of: (a) a voluntary case by such Person under the Bankruptcy Code or (b) the seeking of relief by such Person under other debtor relief Laws in any jurisdiction outside of the United States;
(ii) the commencement of an involuntary case against such Person under the Bankruptcy Code (or other debtor relief Laws) and the petition is not controverted or dismissed within sixty (60) days after commencement of the case;
(iii) a custodian (as defined in the Bankruptcy Code) (or equal term under any other debtor relief Law) is appointed for, or takes charge of, all or substantially all of the property of such Person;
(iv) such Person commences (including by way of applying for or consenting to the appointment of, or the taking of possession by, a rehabilitator, receiver, custodian, trustee, conservator or liquidator (or any equal term under any other debtor relief Laws) (collectively, a “conservator”) of such Person or all or any substantial portion of its property) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation, rehabilitation, conservatorship or similar law of any jurisdiction whether now or hereafter in effect relating to such Person;
(v) such Person is adjudicated by a court of competent jurisdiction to be insolvent or bankrupt;
(vi) any order of relief or other order approving any such case or proceeding referred to in clauses (i) or (ii) above is entered;
(vii) such Person suffers any appointment of any conservator or the like for it or any substantial part of its property that continues undischarged or unstayed for a period of sixty (60) days; or
(viii) such Person makes a compromise, arrangement or assignment for the benefit of creditors or generally does not pay its debts as such debts become due.
“Insurer”: A private mortgage insurer, which is acceptable to Buyer.
“Intercreditor Agreement”: That certain Amended and Restated Intercreditor Agreement, February 27, 2015, as amended from time to time, by and among Seller, Buyer and the other parties thereto.
“Investment Company Act”: As defined in Section 8.1(o) of this Agreement.
“ISDA Definitions”: The 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time.
Exhibit A-16
“Joint Securities Account Control Agreement”: That certain Amended and Restated Joint Securities Account Control Agreement, dated as of February 27, 2015, as amended from time to time, among Seller, Buyer and the other parties thereto.
“Jumbo Mortgage Loan”: Unless defined otherwise in the Transactions Terms Letter, a first lien Mortgage Loan (i) for which the original loan amount is greater than the applicable conventional conforming loan limits set by the Federal Housing Finance Authority in the jurisdiction where the related Mortgaged Property is located and (ii) which meets the transaction requirements set forth on Schedule 1 of the Transactions Terms Letter.
“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, guideline, judgment, injunction, writ, decree or award of any Governmental Authority.
“LIBOR”: The daily rate per annum (rounded to three (3) decimal places) for one-month U.S. dollar denominated deposits as offered to prime banks in the London interbank market, as published on the Official ICE LIBOR Fixings page by Bloomberg or in the Wall Street Journal as of the date of determination;’’ provided, that if Buyer determines that any law, regulation, treaty or directive or any change therein or in the interpretation or application thereof, or any circumstance materially and adversely affecting the London interbank market, shall make it unlawful, impractical or commercially unreasonable for Buyer to enter into or maintain Transactions as contemplated by this Agreement using LIBOR, then Buyer may, in addition to its rights under Section 4.4 and Section 4.6, select an alternative rate of interest or index in its discretion; provided further, that if at any time LIBOR shall be less than the LIBOR Floor, then LIBOR shall be deemed to be the LIBOR Floor at such time.
“LIBOR Floor”: As defined in the Transactions Terms Letter.
“Lien”: Any mortgage, lien, pledge, charge, security interest or similar encumbrance.
“Losses”: As defined in Section 12.1 of this Agreement.
“LTV”: With respect to any Mortgage Loan, the ratio of the original unpaid principal balance of the Mortgage Loan to the lesser of (i) the appraised value of the Mortgaged Property set forth in such appraisal and (ii) the sales price of the Mortgaged Property.
“Margin Call”: As defined in Section 6.3(b) of this Agreement.
“Margin Call Reserve Account”: The non-interest bearing margin call reserve account established and maintained by U.S. Bank, National Association, which includes any distinct subaccounts thereof, if applicable, bearing ABA Number: [***]; Acct. Name: [***]; Account Number: [***]; FFC: [***].
“Margin Deficit”: As defined in Section 6.3(b) of this Agreement.
“Margin Stock”: As defined in Regulation U.
“Market Value”: With respect to an Asset, the fair market value of the Asset as determined by Buyer in its good faith discretion without regard to any market value assigned to such Asset by Seller. Buyer’s determination of Market Value shall be conclusive upon the parties. At no time and in no event will the Market Value of a Related Mortgage Loan be greater than the Market Value of such Related Mortgage Loan on the initial Purchase Date. Any Mortgage Loan that is not an Eligible Mortgage Loan shall have a Market Value of zero.
Exhibit A-17
“Material Adverse Change”: The occurrence of an event or a change in circumstances that had or is reasonably likely to have a Material Adverse Effect.
“Material Adverse Effect”: Any event or circumstance having a material adverse effect on any of the following: (a) the business, assets, operations or financial condition of Seller or Guarantor, taken as a whole, (b) the ability of Seller or Guarantor to perform its respective obligations under the Principal Agreements, (c) the validity or enforceability of this Agreement or any other Principal Agreement or (d) the existence, perfection, collectability or enforceability of a material portion of the Related Mortgage Loans or the Purchased Assets or of Buyer’s security interest in a material portion of the Related Mortgage Loans, the Purchased Items or the Purchased Assets.
“Material Debt Facility”: As defined in Section 11.1(g) of this Agreement.
“Maximum Dwell Time”: For any Purchased Asset that is not a Defective Asset, the maximum number of days such Purchased Asset can be not repurchased by Seller before such Purchased Asset shall be deemed to be a Defective Asset, as set forth in the Transactions Terms Letter.
“MERS”: Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.
“Minimum Maintenance Amount”: With respect to the Purchased Assets as of the close of business on any date of determination, the aggregate Asset Value of all Purchased Assets as of such date of determination.
“Minimum Utilization Fee”: The fee set forth in the Transactions Terms Letter payable by Seller in arrears on the Price Differential Dates set forth in the Transactions Terms Letter.
“Moody’s”: Moody’s Investors Service, Inc. or any successor thereto.
[***]
“Mortgage”: A first-lien mortgage, deed of trust, security deed or similar instrument on improved real property (including for the avoidance of doubt any proprietary lease or cooperative shares in connection with cooperative loans).
“Mortgage-Backed Security”: Any fully-modified pass-through mortgage-backed security that is (a) either issued by a Guarantor and fully guaranteed by Ginnie Mae or issued and fully guaranteed with respect to timely payment of interest and ultimate payment of principal by Fannie Mae or Freddie Mac; (b) evidenced by a book-entry account in a depository institution having book-entry accounts at the applicable Depository; and (c) backed by a Pool, in substantially the principal amount and with substantially the other terms as specified with respect to such Mortgage-Backed Security in the related Purchase Commitment.
“Mortgage Loan”: Any mortgage loan of a Type identified on any schedule attached to the Transactions Terms Letter, which Mortgage Loan may be either a Dry Mortgage Loan or a Wet Mortgage Loan.
“Mortgage Loan Documents”: With respect to each Related Mortgage Loan, each document listed in Section 2 of the Custodial and Disbursement Agreement.
Exhibit A-18
“Mortgage Loan File”: With respect to each Mortgage Loan, that file that contains the Mortgage Loan Documents and is delivered to Custodian pursuant to the Custodial and Disbursement Agreement.
“Mortgage Note”: A promissory note secured by a Mortgage and evidencing a Mortgage Loan.
“Mortgaged Property”: The real property (or other collateral relating to cooperative loans) securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor”: The obligor of a Mortgage Loan.
“Multiemployer Plan”: A “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which Guarantor or any of its ERISA Affiliates has contributed, or has been obligated to contribute.
“Nationally Recognized Accounting Firm”: (a) Any of BDO USA, LLP. and any successors to any such firm and (b) any other public accounting firm designated by Guarantor and approved by Buyer, such approval not to be unreasonably withheld or delayed.
“Non-Usage Fee”: The fee set forth in the Transactions Terms Letter payable by Seller monthly in arrears on each Price Differential Date, based upon the unused portion of the Committed Amount.
“OFAC”: The U.S. Department of Treasury’s Office of Foreign Assets Control.
“Other Taxes”: As defined in Section 12.3(a) of this Agreement.
“Participant Register”: As defined in Section 14.7 of this Agreement.
“Participation Agreement”: That certain Master Participation Agreement, dated as of the Effective Date, by and between Guarantor and Seller, as the initial participant, as amended, restated, supplemented or otherwise modified from time to time.
“Participation Certificate”: The certificates evidencing 100% of the Participation Interests.
“Participation Interest”: With respect to any Related Mortgage Loan (including the Servicing Rights related to any Related Mortgage Loans) or any Purchased Item, the one hundred percent (100%) beneficial interest therein created under the Participation Agreement, but excluding, for the avoidance of doubt, bare legal title. For the avoidance of doubt, the Participation Interest includes one hundred percent (100%) beneficial interest in the Servicing Rights with respect to any such Related Mortgage Loan.
“Patriot Act”: The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56 (signed into law October 26, 2001), as amended.
“PBGC”: The Pension Benefit Guaranty Corporation and any successor thereto.
“Permitted Collateral Liens”: (i) The security interest granted hereunder in favor of Buyer; (ii) banker’s Liens in the nature of rights of setoff arising in the ordinary course of business of Guarantor; (iii) Liens for Taxes not yet due and payable; (iv) Liens securing judgments not constituting an Event of Default under Section 11.1(k) that are, expressly or by operation of law, subordinate to Buyer’s Lien; and (v) the security interest granted to the Buyer pursuant to Section 4 of the Guaranty and Security Agreement.
Exhibit A-19
“Permitted Holders”: Stone Point Capital LLC and/or its Affiliates.
“Person”: Includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.
“Plan Asset Regulations”: 29 CFR 2510.3-101, as modified by Section 3(42) of ERISA.
“Pool”: A pool of fully amortizing first lien residential Mortgage Loans eligible in the aggregate to back a Mortgage-Backed Security.
“Pooled Mortgage Loan”: Any Mortgage Loan that is part of a Pool of Mortgage Loans certified by the Custodian to an Agency that will be exchanged on the related Settlement Date for a Mortgage-Backed Security backed by such Pool in accordance with the terms of the applicable Agency Guide.
“Pooling Date”: With respect to Pooled Mortgage Loans, the date on which an Agency pool number is assigned to the related Pool.
“Power of Attorney”: A power of attorney, substantially in the form attached hereto as Exhibit E.
“Prefunding Request”: As defined in Section 3.1.
“Price Differential”: For each Purchased Asset or Transaction as of any date of determination, an amount equal to the product of (a) (i) prior to the occurrence of an Event of Default, the sum of the Applicable Pricing Rate plus the applicable Type Margin, or (ii) following the occurrence and during the continuance of an Event of Default, the Default Rate, and (b) the Purchase Price for such Purchased Asset or Transaction. Price Differential will be calculated in accordance with Section 2.6.
“Price Differential Date”: The tenth (10th) Business Day of each month (or such later date that is five (5) Business Days following Seller’s receipt of an invoice provided by Buyer pursuant to Section 2.6(b)).
“Principal Agreements”: This Agreement, the Transactions Terms Letter, the Guaranty and Security Agreement, the Participation Agreement, the Custodial and Disbursement Agreement, the Disbursement Agreement Account Control Agreement, any Servicing Agreement together with the related Servicer Notice, the Joint Securities Account Control Agreement, the Intercreditor Agreement, the Escrow Instruction Letter, any other Guarantee(s) (if required by the Transactions Terms Letter), the Custodial Account Control Agreement, the Electronic Tracking Agreement, the Seller Limited Liability Company Agreement, each Power of Attorney and related Purchase Commitments, any Transaction Request and all other documents and instruments evidencing the Transactions, as same may from time to time be supplemented, modified or amended, and any other agreement entered into between Buyer and Seller or Guarantor in connection herewith or therewith.
“Privacy Requirements”: As defined in Section 14.17 of this Agreement.
“Proceeds”: The total amount receivable or received when a Mortgage Loan and the related Purchased Asset or other Purchased Item is sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, including, without limitation, all rights to payment, including return premiums, with respect to any insurance relating thereto and all escrow withholds and escrow payments for Property Charges, as applicable.
Exhibit A-20
“Property Charges”: All taxes, fees, assessments, water, sewer and municipal charges (general or special) and all insurance premiums, leasehold payments or ground rents.
“Purchase Advice”: In connection with each wire transfer to be made to Buyer by or on behalf of Seller or an Approved Investor, a written or electronic notification setting forth (a)(i) the loan number assigned by or on behalf of Seller or last name of the Mortgagor for each Mortgage Loan that is related to the Transaction in connection with which a payment is being made, or (ii) the CUSIP of any related Mortgage-Backed Security; (b) the amount of the wire transfer to be applied in the Transaction; and (c) the total amount of the wire.
“Purchase Commitment”: A trade ticket or other written commitment issued in favor of Guarantor by an Approved Investor pursuant to which that Approved Investor commits to purchase one or more Related Mortgage Loans or Mortgage-Backed Securities with respect to the Purchased Assets, and as to which the Takeout Price (and any amount to be paid by Seller to Buyer on account of such repurchase) for such Related Mortgage Loans or Mortgage-Backed Securities with respect to the Purchased Assets is for an amount that is not less than the outstanding Repurchase Price for such Purchased Assets, together with the related correspondent, whole loan or forward purchase agreement by and between Guarantor and the Approved Investor governing the terms and conditions of any such purchases, all in form and substance satisfactory to Buyer.
“Purchase Date”: The date on which Buyer purchases a Purchased Asset from Seller. If the Purchase Price is paid by wire transfer, the Purchase Date shall be the date such funds are wired. If the Purchase Price is paid by a funding draft, the Purchase Date shall be the date that the draft is posted by the bank on which the draft is drawn.
“Purchase Price”: The price at which each Asset is transferred by Seller to Buyer which, except as otherwise may be set forth in the Transactions Terms Letter, shall be equal to the product of the applicable Type Purchase Price Percentage and the least of (a) the unpaid principal balance of such Asset, (b) the Market Value of such Asset, (c) the Takeout Price committed by the related Approved Investor, if applicable, as evidenced by the related Purchase Commitment, or (d) the purchase price paid by Seller for such Asset in an arms-length transaction with a Person that is not an Affiliate of Seller. For the sake of clarity, the Purchase Price for each Mortgage-Backed Security subject to a Transaction pursuant to Section 3.7 shall be the same Purchase Price that was paid for the Related Mortgage Loans backing such Mortgage-Backed Security.
“Purchased Assets”: Each Participation Interest. The term “Purchased Assets” with respect to any Transaction at any time shall also include Mortgage-Backed Securities that replace the Related Mortgage Loans pursuant to Section 3.7.
“Purchased Items”: All now existing and hereafter arising right, title and interest of Seller or Guarantor in, under and to the following:
(a) all Purchased Assets, including the beneficial interest in all Related Mortgage Loans, now owned or hereafter acquired for which a Transaction has been entered into between Buyer and Seller hereunder and for which the Repurchase Price has not been received by Buyer, including the beneficial interest in all Mortgage Notes and Mortgages evidencing the Related Mortgage Loans and the related Mortgage Loan Documents, which, from time to time, are delivered, or caused to be delivered, to Buyer (including delivery to a custodian
Exhibit A-21
or other third party on behalf of Buyer) as additional security for the performance of Seller’s obligations hereunder;
(b) subject to the Joint Securities Account Control Agreement, all Mortgage-Backed Securities issued in exchange for Related Mortgage Loans for which the Repurchase Price has not been received by Buyer;
(c) subject to the Joint Securities Account Control Agreement, all Income related to the Purchased Assets and all rights to receive such Income;
(d) (i) all amounts on deposit in the Custodial Account relating directly to the Related Mortgage Loans and (ii) the Disbursement Account and all amounts on deposit therein;
(e) all rights of Seller or Guarantor under all related Purchase Commitments (including the right to receive the related Takeout Price), purchase agreements or other hedging arrangements, agreements, contracts or take-out commitments relating to or constituting any or all of the foregoing, now existing and hereafter arising, covering any part of the Purchased Assets and/or Related Mortgage Loans, and all rights to receive documentation relating thereto, and all rights to deliver Related Mortgage Loans and related Mortgage-Backed Securities to permanent investors and other purchasers pursuant thereto and all Proceeds resulting from the disposition of such Purchased Assets;
(f) [Reserved];
(g) except to the extent subject to the Joint Securities Account Control Agreement all now existing and hereafter established accounts maintained with broker dealers by Guarantor for the purpose of carrying out transactions under Purchase Commitments relating to any part of the Purchased Assets and/or Related Mortgage Loans;
(h) all now existing and hereafter arising rights of Seller and Guarantor to service, administer and/or collect on the Purchased Assets or Related Mortgage Loans hereunder and any and all rights to the payment of monies on account thereof;
(i) the Participation Interests in the Servicing Rights related to the Related Mortgage Loans, all related Servicing Records, and all rights of Seller and Guarantor to receive from any third party or to take delivery of any Servicing Records or other documents which constitute a part of the Mortgage Loan Files, including all other documents relating to the Related Mortgage Loans that are in Seller’s possession or control, in each case solely to the extent related to the Purchased Assets,
(j) except to the extent subject to the Joint Securities Account Control Agreement, to the extent assignable, all now existing and hereafter arising accounts, contract rights and general intangibles constituting or relating to any of the Purchased Assets;
(k) to the extent assignable, all mortgage guarantees, insurance and commitments relating to such individual Related Mortgage Loans, issued by governmental agencies or otherwise (including, without limitation, all FHA Mortgage Insurance Contracts, VA Loan Guaranty Agreements and RD Loan Guaranty Agreements) or the related Mortgaged Property and any mortgage insurance certificate or other document evidencing such mortgage guarantees or insurance and all claims and payments solely related to such
Exhibit A-22
Related Mortgage Loans, and the right to receive all insurance proceeds and condemnation awards that may be payable in respect thereof;
(l) [Reserved];
(m) subject to the Joint Securities Account Control Agreement, to the extent assignable, all rights, but not any obligations or liabilities, of Seller and Guarantor with respect to the Approved Investors;
(n) [Reserved];
(o) all Proceeds of the Purchased Assets and/or Related Mortgage Loans;
(p) any funds of Seller and Guarantor at any time deposited or held in the Margin Call Reserve Account and the Funding Deposit Account; and
(q) the Participation Certificate.
“QM Rule”: As applicable, (i) 12 C.F.R. 1026.43(e), (ii) in the case of a Mortgage Loan insured, guaranteed, or administered by the FHA, 24 C.F.R. 203.19, or (iii) in the case of a Mortgage Loan insured, guaranteed, or administered by the VA, 38 C.F.R. 36.4300, and for each section referenced herein, all applicable official staff commentary.
“Qualified Appraiser”: With respect to each Mortgage Loan, an appraiser, duly appointed by the originator, who (i) had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, (ii) received no non-compensation benefit from, and whose compensation or flow of business is not affected by the approval or disapproval of, the related Mortgage Loan, (iii) satisfied the requirements of Fannie Mae, Freddie Mac, Ginnie Mae, FHA, RD or VA, as applicable, and the requirements of Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated and (iv) was selected independently of the broker (where applicable) and the related originator.
“Qualified Mortgage”: A Mortgage Loan that satisfies the criteria for a “qualified mortgage” as set forth in the QM Rule.
“Qualified Originator”: Guarantor or an Approved Originator.
“RD”: The United States Department of Agriculture Rural Development and any successor thereto.
“RD Loan Guaranty Agreement”: The obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor.
“RD Regulations”: The regulations promulgated by the RD under the Consolidated Farm and Rural Development Act of 1977; and other RD issuances relating to rural housing loans codified in the Code of Federal Regulations.
“Rebuttable Presumption Qualified Mortgage”: A Qualified Mortgage with an annual percentage rate that exceeds the average prime offer rate for a comparable mortgage loan as of the date the interest rate is set by 1.5 or more percentage points for a first-lien Mortgage Loan or by 3.5 or more percentage points for a subordinate-lien Mortgage Loan.
Exhibit A-23
“Reference Time”: With respect to any setting of the then-current Benchmark means (1) if such Benchmark is LIBOR, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not LIBOR, the time determined by Buyer.
“Register”: As defined in Section 14.5 of this Agreement.
“Related Credit Enhancement”: As defined in Section 6.1 of this Agreement.
“Related Mortgage Loan”: With respect to any Purchased Asset, the Mortgage Loan with respect to, and/or related to, such Purchased Asset.
“Relevant Governmental Body”: The Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Renovation Mortgage Loan”: A Government Mortgage Loan that is an FHA 203k Mortgage Loan, a Fannie Mae HomeStyle Loan, or any other Government Mortgage Loan originated in accordance with an Agency program for construction, renovation or rehabilitation of the related Mortgaged Property.
“Reportable Event”: A reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Single Employer Plan, excluding, however, such events as to which the PBGC by regulation or by public notice waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event.
“Repurchase Acceleration Event”: Any of the conditions or events set forth in Section 4.2 of this Agreement.
“Repurchase Date”: The date on which Seller is to repurchase a Purchased Asset subject to a Transaction from Buyer, which is either (a) the date specified in the related Transactions Terms Letter and/or Transaction Request or (b) the date identified to Buyer by Seller as the date that the related Purchased Asset is to be sold pursuant to a Purchase Commitment. The Repurchase Date for each Purchased Asset shall in no event occur later than two (2) years after the Purchase Date of such Purchased Asset.
“Repurchase Mortgage Loans”: Any mortgage loan that Guarantor has been required to repurchase from an Agency, any Approved Investor or any Person related in any way to a securitization, due to breaches of representations or warranties.
“Repurchase Price”: The price at which a Purchased Asset is to be transferred from Buyer or its designee to Seller or Approved Investor, as applicable, upon termination of a Transaction, which shall equal the sum of (a) the Purchase Price, (b) any applicable fees, indemnities or any other amounts owed by Seller in connection with the Purchased Asset and (c) the Price Differential due on such Purchase Price pursuant to Section 2.6 as of the date of such determination.
“Repurchase Transaction”: As defined in Section 6.5 of this Agreement.
“Resolved Asset”: Any Purchased Asset which is repaid in full, sold, repurchased, liquidated, charged-off, or otherwise disposed of.
Exhibit A-24
“Responsible Officer”: With respect to any corporation, limited liability company or partnership, the chief executive officer, president, chief financial officer, any executive vice president or any senior vice president (the duties of which senior vice president include the administration of this Agreement, the Principal Agreements or the transactions contemplated hereby or thereby), and the treasurer.
“S&P”: S&P Global Ratings, a division of S&P Global Inc., and any successor thereto.
“Safe Harbor Qualified Mortgage”: A Qualified Mortgage with an annual percentage rate that does not exceed the average prime offer rate for a comparable mortgage loan as of the date the interest rate is set by 1.5 or more percentage points for a first-lien Mortgage Loan or by 3.5 or more percentage points for a subordinate-lien Mortgage Loan.
“SEC”: The U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Securities Intermediary”: U.S. Bank National Association, or any successor thereto under the Joint Securities Account Control Agreement.
“Seller Limited Liability Company Agreement”: The Limited Liability Company Agreement of Seller entered into by Guarantor, as the sole equity member, and, as and when applicable, the Independent Manager (as defined therein), as the same shall be modified and supplemented and in effect from time to time.
“Servicer”: (i) Guarantor or (ii) such other entity responsible for servicing the Related Mortgage Loans and that has been approved by Buyer in writing in its good faith discretion, or, in each case, any successor or permitted assigns thereof.
“Servicer Notice”: The notice acknowledged by a Servicer which is substantially in the form of Exhibit G hereto.
“Servicer Termination Event”: The occurrence of any of the following conditions or events shall be a Servicer Termination Event:
(a) a Servicer ceases to meet the qualifications for maintaining any of its Approvals, such Approvals are revoked or such Approvals are materially modified;
(b) such Servicer becomes subject to any penalties and/or sanctions by any Agency, HUD, FHA, VA, or Governmental Authority that could materially and adversely affect such Servicer’s ability to service the applicable Related Mortgage Loans in accordance with the related Servicing Agreement
(c) a Servicer fails to service the Related Mortgage Loans subject to Transactions in accordance with applicable Agency Guides, the related Servicing Agreement, the related Servicer Notice, or this Agreement, as applicable, or otherwise defaults under the such document, after giving effect to any applicable notice or grace periods, which failure may include the failure to make any Servicing Advance required under the foregoing document;
(d) such Servicer fails to maintain all material state and federal licenses necessary to do business in any jurisdiction where Mortgaged Property is located if such license is
Exhibit A-25
required, or to be in material compliance with any licensing laws of any jurisdiction where Mortgaged Property is located applicable to such Related Mortgage Loans;
(e) such Servicer fails to maintain adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices
(f) an Insolvency Event shall have occurred with respect to Servicer or any of its Affiliates or Subsidiaries;
(g) a Material Adverse Effect shall occur with respect to such Servicer;
(h) Seller fails, or fails to cause any Servicer, to deposit all amounts required to be deposited into the Custodial Account by Seller with respect to the Related Mortgage Loans when due under this Agreement and the same is not corrected within two (2) Business Days of Seller’s, Guarantor’s or a Servicer’s knowledge or receipt of notice of such failure;
(i) the occurrence and continuance of an Event of Default; or
(j) an event of default occurs under the related Servicing Agreement with respect to such Servicer.
“Servicing Advance”: All customary, reasonable and necessary advances made or required to be made in connection with the servicing of a mortgage loan, including advances to fund principal, interest, escrow, foreclosure, insurance, tax or other payments or advances when the obligor on the underlying Mortgage Loan is delinquent in making payments on such receivable; to enforce remedies, manage and liquidate any real property owned by any Person and acquired as a result of the foreclosure or other enforcement of a lien on such asset securing a Mortgage Loan.
“Servicing Agreement”: If the Related Mortgage Loans are serviced by any servicer that is not Guarantor, the agreement with the third party servicer, in form and substance acceptable to Buyer.
“Servicing Records”: All servicing agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of a Mortgage Loan.
“Servicing Rights”: Any and all of the following: (a) any and all rights of Seller and/or Guarantor to administer and service the Mortgage Loans; (b) any payments to or monies received for servicing the Mortgage Loans; (c) any ancillary income with respect to the Mortgage Loans; (d) all agreements or documents creating, defining or evidencing any such servicing rights to the extent they relate to such servicing rights; (e) escrow payments or other similar payments with respect to the Mortgage Loans and any amounts actually collected with respect thereto; (f) all accounts and other rights to payment related to any of the property described in this paragraph; (g) any and all documents, files, records, servicing files, servicing documents, servicing records, data tapes, computer records, or other information pertaining to the Mortgage Loans or pertaining to the past, present or prospective servicing of the Mortgage Loans; and (h) all rights, powers and privileges incident to any of the foregoing or to the extent they relate to such rights.
Exhibit A-26
“Settlement Date”: With respect to a Mortgage-Backed Security, the date on which the applicable Agency delivers such Mortgage-Backed Security to the Depository and it is registered as a book-entry security in the name of the Depository.
“Significant Modification”: With respect to any Mortgage Loan, any waiver or modification of any material term of such Mortgage Loan, including related payment terms, interest rate or maturity date.
“Single Employer Plan”: Any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by Guarantor or any ERISA Affiliate or for which Guarantor or any ERISA Affiliate may have or have had liability within five (5) plan years preceding the date of this Agreement by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“SOFR”: With respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website at approximately 8:00 a.m. (New York City time) on the immediately succeeding Business Day.
“SOFR Administrator”: The Federal Reserve Bank of New York (or a successor administrator) of the secured overnight financing rate).
“SOFR Administrator’s Website”: The website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“Strict Compliance”: The compliance of Guarantor and Mortgage Loans that are intended to be Agency Eligible Mortgage Loans with the requirements of the applicable Agency Guide, as applicable and as amended by any agreements between Guarantor and the applicable Agency, sufficient to enable Guarantor to issue and to service and Ginnie Mae to guarantee or Fannie Mae or Freddie Mac to issue and guarantee a Mortgage-Backed Security.
“Subsidiary”: With respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person.
“Successor Servicer”: As defined in Section 6.2(b) of this Agreement.
“Takeout Price”: The purchase price to be paid for a Related Mortgage Loan or related Mortgage-Backed Security by the related Approved Investor pursuant to the related Purchase Commitment.
“Taxes”: As defined in Section 12.3(a) of this Agreement.
“TILA-RESPA Integrated Disclosure Rule”: The Truth-in-Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure Rule, adopted by the Consumer Financial Protection Bureau, which is effective for residential mortgage loan applications received on or after October 3, 2015.
Exhibit A-27
“Transaction”: As set forth in the Recitals of this Agreement.
“Transaction Request”: An electronic funding file sent via email or via such other method as may be approved by Buyer, in its sole discretion, in the format mutually agreed by Buyer and Guarantor prior to the Initial Closing Date, with such revisions or supplements incorporated pursuant to Section 3.1(b), from Seller to Disbursement Agent, Calculation Agent and Buyer notifying Disbursement Agent, Calculation Agent and Buyer that Seller wishes to enter into a Transaction hereunder; provided, that if a Purchased Asset has an Asset Value of zero by operation of clause (b) of the definition of “Asset Value” as a result of the Related Mortgage Loan with respect to such Purchased Asset that was a Wet Mortgage Loan exceeding its Maximum Dwell Time, and subsequently the Custodian provides an email notification to Buyer and Seller that the Related Mortgage Loan with respect to such Purchased Asset has become a Dry Mortgage Loan, such email notification shall be deemed to be, and Seller hereby acknowledges and agrees that such email notification shall constitute (i) notification to Buyer by Seller that Seller wishes to enter into a Transaction hereunder, (ii) a Transaction Request (and the submission of a Transaction Request hereunder in accordance with Section 3.1(a)) with respect to such Purchased Asset with a Repurchase Date and an Aggregate Outstanding Purchase Price with respect to such Purchased Asset the same as the Repurchase Date and Aggregate Outstanding Purchase Price with respect to such Purchased Asset, as applicable, with respect to the previous Transaction Request with respect to the applicable Mortgage Loan related to such Purchased Asset.
“Transactions Terms Letter”: The Amended and Restated Transactions Terms Letter dated as of the Effective Date (as amended, restated, supplemented or otherwise modified from time to time) by and among Buyer, Guarantor and Seller, referencing this Agreement and setting forth certain specific terms, and any additional terms, with respect to this Agreement.
“Trust Receipt” means, with respect to any Transaction as of any date, a receipt in the form attached as an exhibit to the Custodial and Disbursement Agreement.
“Type”: A specific type of Purchased Asset, as set forth in the Transactions Terms Letter.
“Type Margin”: With respect to each Type of Purchased Asset, the corresponding annual rate of interest for such Type as set forth in the Transactions Terms Letter that shall be added to the Applicable Pricing Rate to determine the annual rate of interest for the related Purchase Price.
“Type Purchase Price Percentage”: With respect to each Type of Purchased Asset, the corresponding purchase price percentage for such Type, as set forth in the Transactions Terms Letter.
“Type Sublimit”: Any of the applicable Type Sublimits, as set forth in the Transactions Terms Letter.
“Unadjusted Benchmark Replacement”: The Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Uncommitted Amount”: As of any date of determination, the amount of the Aggregate Transaction Limit in excess of the Committed Amount that is uncommitted as of such date of determination, as set forth in the Transactions Terms Letter, or such other greater amount as may be agreed to by Buyer in its sole and absolute discretion.
“Underwriting Guidelines”: As to any Mortgage Loan, the related written underwriting guidelines pursuant to which the Mortgage Loan was underwritten, which were provided to Buyer.
Exhibit A-28
“Uniform Commercial Code”: The Uniform Commercial Code as in effect on the date hereof in the State of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.
“Upfront Fee”: The upfront fee set forth in the Transactions Terms Letter.
“VA”: The Department of Veterans Affairs and any successor thereto.
“VA Loan Guaranty Agreement”: The obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, together with all amendments, modifications, supplements and restatements thereto.
“VA Regulations”: Regulations promulgated by the U.S. Department of Veterans Affairs pursuant to the Servicemen’s Readjustment Act, as amended, codified in 38 Code of Federal Regulations, and other VA issuances relating to Government Mortgage Loans, including related handbooks, circulars and notices.
“Wet Mortgage Loan”: A closed and fully funded Mortgage Loan with respect to which Buyer purchases a Purchased Asset from Seller on the closing date of such Mortgage Loan prior to receipt by Buyer or its Custodian of the related Mortgage Loan Documents, subject to Seller’s obligation to deliver the related Mortgage Loan Documents to Buyer or its Custodian within the applicable Maximum Dwell Time with respect to Seller’s obligation to deliver the related Mortgage Loan Documents to Buyer or its Custodian.
“Wire-out Account”: The account defined and provided for as the “Haircut Account” in the Custodial and Disbursement Agreement.
Exhibit A-29
EXHIBIT B
[RESERVED]
Exhibit B-1
EXHIBIT C
[Reserved]
Exhibit C-1
EXHIBIT D
ASSIGNMENT OF CLOSING PROTECTION LETTER
[HOME POINT FINANCIAL CORPORATION] (“Assignor”) declares that for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it does hereby convey, transfer, assign, deliver and give to Assignee, and hereby expressly subrogates GOLDMAN SACHS BANK USA (“Assignee”) unto, all of Assignor’s claims, demands, rights and causes of action, past, present or future, that Assignor has for loss or damage covered by the closing protection letter issued by [Title Company] attached hereto (“Closing Protection Letter”). Such rights being assigned by Assignor hereunder include, without limitation, the right to demand, sue, collect, receive, protect, preserve and enforce performance under the Closing Protection Letter. Assignee shall succeed to all rights of recovery of Assignor under the Closing Protection Letter and Assignor shall execute such instruments and documents necessary and proper to further secure such rights to Assignee and shall not act in any manner hereafter to prejudice or impair the rights of Assignee. Assignor hereby grants Assignee an irrevocable mandate and power of attorney coupled with an interest with full power of substitution to transact this act of assignment and subrogation. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Master Repurchase Agreement (as amended, restated, supplemented or modified from time to time) between Assignor and Assignee.
IN WITNESS WHEREOF, the Assignor has caused this assignment to be duly executed as of [_______], 202__.
[HOME POINT FINANCIAL CORPORATION] [HPFC SUB 1 LLC]
By:
Name:
Title:
Exhibit D-1
EXHIBIT E
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Goldman Sachs Bank USA (“Buyer”), HPFC SUB 1 LLC (“Seller”) and Home Point Financial Corporation (“Guarantor”) have entered into the Amended and Restated Master Repurchase Agreement, dated as of June 30, 2021 (the “Agreement”), pursuant to which Buyer has agreed to purchase from Seller certain mortgage loans from time to time, subject to the terms and conditions set forth therein; and
WHEREAS, each of Seller and Guarantor has agreed to give to Buyer a power of attorney on the terms and conditions contained herein in order for Buyer to take any action set forth below that Buyer may deem necessary or advisable to accomplish the purposes of the Agreement.
NOW, THEREFORE, [Seller] [Guarantor] hereby irrevocably constitutes and appoints Buyer as its true and lawful Attorney-in-Fact, with full power and authority hereby conferred in its name, place and stead and for its use and benefit, to do and perform any of the following actions in connection with assets purchased by Buyer from Seller under the Agreement (the “Purchased Assets”) or as otherwise provided below:
(1) to receive, endorse and collect all checks made payable to the order of Seller representing any payment on account of the Purchased Assets;
(2) to assign or endorse any mortgage, deed of trust, promissory note or other instrument relating to the Purchased Assets;
(3) to correct any assignment, mortgage, deed of trust or promissory note or other instrument relating to the Purchased Assets, including, without limitation, unendorsing and re-endorsing a promissory note to another investor;
(4) to complete and execute lost note affidavits or other lost document affidavits relating to the Purchased Assets;
(5) to issue title requests and instructions relating to the Purchased Assets; and
(6) to give notice to any individual or entity of its interest in the Purchased Assets under the Agreement.
[Seller] [Guarantor] hereby ratifies and confirms all that said Attorney-in-Fact shall lawfully do or cause to be done by authority hereof.
Third parties without actual notice may rely upon the power granted under this Power of Attorney upon the exercise of such power by the Attorney-in-Fact.
Exhibit E-1
[HOME POINT FINANCIAL CORPORATION] [HPFC SUB 1 LLC]
By:
Name:
Title:
WITNESS my hand this ____ day of _____________, 20___.
STATE OF
County of
This instrument was acknowledged, subscribed and sworn to before me this _____ day of _________, by ______________________________________
Notary Public
My Commission Expires:
Notary Seal:
[HOME POINT FINANCIAL CORPORATION] [HPFC SUB 1 LLC]
By:
Name:
Title:
WITNESS my hand this ____ day of _____________, 20___.
STATE OF
County of
This instrument was acknowledged, subscribed and sworn to before me this _____ day of _________, by ______________________________________
Notary Public
My Commission Expires:
Notary Seal:
Exhibit E-2
EXHIBIT F
WIRING INSTRUCTIONS
[***]
Exhibit F-1
EXHIBIT G
FORM OF SERVICER NOTICE
[_______], 20__
[_______________], as Servicer
[ADDRESS]
Attention: __________________
[ADDRESS]
Attention: __________________
Re: Amended and Restated Master Repurchase Agreement dated as of June 30, 2021 (the “Agreement”) among HPFC Sub 1 LLC, (“Seller”), Home Point Financial Corporation (“Guarantor”) and Goldman Sachs Bank USA (“Buyer”)
Ladies and Gentlemen:
[_______________________] (“Servicer”) is servicing certain mortgage loans for Guarantor pursuant to that certain Servicing Agreement dated as of [_______] (the “Servicing Agreement”) between Servicer and Guarantor. Pursuant to the Agreement between Buyer, Guarantor and Seller, Servicer is hereby notified that Seller may from time to time sell to Buyer a one hundred percent (100%) beneficial interest (the “Participation Interests”) in certain mortgage loans which are then currently being serviced by Servicer pursuant to the terms of the Servicing Agreement (such mortgage loans that are serviced by Servicer, the “Mortgage Loans”).
Section 1. Direction Notice.
(a) [Upon receipt of notice from Buyer (a “Direction Notice”) in which Buyer shall identify the Mortgage Loans, Servicer shall segregate all amounts collected on account of such Mortgage Loans, hold them in trust for the sole and exclusive benefit of Buyer, and remit such collections in accordance with Buyer’s written instructions. Further, Servicer shall follow the instructions of Buyer with respect to the Mortgage Loans, and shall deliver to Buyer any information with respect to the Mortgage Loans as reasonably requested by Buyer.]
(b) Notwithstanding any contrary information which may be delivered to the Servicer by Guarantor or Seller, Servicer may conclusively rely on any information delivered by Buyer, and Guarantor and Seller, jointly and severally, shall indemnify and hold the Servicer harmless for any and all claims asserted against it for any actions taken in good faith by the Servicer in connection with the delivery of such information.
Section 2. No Modification of the Servicing Agreement. Without the prior written consent of Buyer exercised in Buyer’s sole and absolute discretion, Servicer shall not agree to (a) any modification, amendment or waiver of the Servicing Agreement; (b) any termination of the Servicing Agreement or (c) the assignment, transfer, or material delegation of any of its rights or obligations under the Servicing Agreement.
Section 3. Right of Termination. Upon receipt of a Direction Notice, Buyer shall have the right to terminate the Servicer’s rights and obligations to service the Mortgage Loans under the Servicing Agreement in accordance with the terms thereof. Any fees due to the Servicer (a) in connection with any termination shall be paid by Guarantor and Seller, jointly and severally, and (b) incurred following receipt of a Direction Notice shall be paid by Buyer to the extent that such fees relate to the Mortgage Loans that
Exhibit G-1
are subject to the Servicing Agreement; provided that any fees incurred after the receipt of a Direction Notice related to transfer of servicing of the Mortgage Loans from Servicer to Buyer’s servicer shall by paid by Guarantor and Seller. Guarantor, Seller and Servicer shall cooperate in transferring the servicing with respect to such Mortgage Loans to a successor servicer appointed by Buyer in its sole and absolute discretion, subject with respect to a servicer termination event under the Agreement (but not, for purposes of clarity, with respect to an event of default under the Agreement) Guarantor’s appointment right set forth in the first sentence of Section 6.2(m) of the Agreement.
Section 4. Notices. All notices, demands, consents, requests and other communications required or permitted to be given or made hereunder in writing shall be mailed (first class, return receipt requested and postage prepaid) or delivered in person or by overnight delivery service or by e-mail or facsimile, addressed to the respective parties hereto at their respective addresses set forth below or, as to any such party, at such other address as may be designated by it in a notice to the other:
Any notices to Buyer should be delivered to the following addresses:
Goldman Sachs Bank USA
2001 Ross Avenue, Suite 2800
Dallas, TX 75201
Attn: Warehouse Lending
Email: [***]
Any notices to Servicer should be delivered to the following addresses:
[ ]
Any notices to Seller and Guarantor should be delivered to the following addresses:
HPFC Sub 1 LLC
2211 Old Earhart Road
Suite 250
Ann Arbor, MI 48105
Attention: Legal
Email: [***]
Home Point Financial Corporation
2211 Old Earhart Road
Suite 250
Ann Arbor, MI 48105
Attention: Legal
Email: [***]
Section 5. Counterparts. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.
Section 6. Entire Agreement; Severability. This agreement shall supersede any existing agreements between the parties containing general terms and conditions for the servicing of the Mortgage Loans. Each provision and agreement herein shall be treated as separate and independent from any other
Exhibit G-2
provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
Section 7. Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the State of New York, without regard to principles of conflicts of laws (other than Section 5-1401 of the New York General Obligations Law).
(b) All legal actions between or among the parties regarding this agreement, including, without limitation, legal actions to enforce this agreement or because of a dispute, breach or default of this agreement, shall be brought in the federal or state courts located in New York County, New York, which courts shall have sole and exclusive in personam, subject matter and other jurisdiction in connection with such legal actions. The parties hereto irrevocably consent and agree that venue in such courts shall be convenient and appropriate for all purposes and, to the extent permitted by law, waive any objection that they may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same. The parties hereto further irrevocably consent and agree that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to its address set forth in Section 4, and that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction.
(c) The parties hereto hereby irrevocably waive, to the fullest extent permitted by Applicable Law, any and all right to trial by jury in any legal proceeding arising out of or relating to this agreement or the transactions contemplated hereby or thereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit G-3
IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
GOLDMAN SACHS BANK USA, as Buyer
By: ____________________
Name:
Title:
Name:
Title:
HOME POINT FINANCIAL CORPORATION, as Guarantor
By: ____________________
Name:
Title:
Name:
Title:
HPFC SUB 1 LLC, as Seller
By: ____________________
Name:
Title:
Name:
Title:
[ ], as Servicer
By: ____________________
Name:
Title:
Name:
Title:
Exhibit G-4
EXHIBIT H
REPRESENTATIONS AND WARRANTIES
Representations and Warranties Concerning Purchased Assets. Seller represents and warrants to and covenants with Buyer that the following are true and correct with respect to each Purchased Asset as of the related Purchase Date through and until the date on which such Purchased Asset is repurchased by Seller. With respect to those representations and warranties which are made to Seller’s knowledge, if it is discovered by Seller or Buyer that the substance of such representation and warranty is inaccurate, notwithstanding Seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation and warranty for purposes of determining (i) Asset Value, (ii) whether a Mortgage Loan is an Eligible Mortgage Loan or (iii) or for any other purpose hereunder if Seller or Guarantor shall have made any such representation and warranty with knowledge that they were materially false or misleading at the time made. The References in the following representations and warranties to a “Mortgage Loan” or “Asset” refer to Related Mortgage Loan in which the Seller has acquired a Participation Interest represented by the related Purchased Assets.
(a) Eligible Asset. The Mortgage Loan is an Eligible Mortgage Loan. The Mortgage Loan is a legal, valid and binding obligation of the Mortgagor thereunder, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principals of equity (regardless of whether enforcement is sought in a proceeding in equity or at law), and subject to no offset, defense or counterclaim, obligating Mortgagor to make the payments specified therein.
(b) Purchase Commitment. Unless otherwise stated in the Transactions Terms Letter, each Mortgage Loan related to the Asset which is the subject of a Purchase Commitment is covered by a Purchase Commitment that (i) does not exceed the availability under such Purchase Commitment (taking into consideration mortgage loans which have been purchased by the respective Approved Investor under the Purchase Commitment and mortgage loans which Seller has identified to Buyer as covered by such Purchase Commitment), (ii) conforms to the requirements and the specifications set forth in such Purchase Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Approved Investor and (iii) is eligible for sale to and insurance or guaranty by, respectively, the applicable Approved Investor and any applicable insurer. Each Purchase Commitment is a legal valid and binding obligation of Guarantor enforceable against it in accordance with its terms, subject to applicable bankruptcy insolvency and similar laws affecting creditors’ rights generally and subject as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(c) Transaction Request. Except with respect to de minimis data transcription errors, the information contained in the Transaction Request is true, correct and complete and the Mortgage Loan conforms to the description thereof on the related Transaction Request.
(d) Origination and Servicing. The Mortgage Loan was originated by or in conjunction with 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. The Mortgage Loan has been originated and serviced in compliance with Accepted Servicing Practices, applicable Agency Guides, the
Exhibit H-1
applicable Underwriting Guidelines and Insurer requirements and all applicable federal, state and local statutes, regulations and rules, including, without limitation, the Federal Truth-in-Lending Act of 1968, as amended, and Regulation Z thereunder, the Federal Fair Credit Reporting Act, the Federal Equal Credit Opportunity Act, the Federal Real Estate Settlement Procedures Act of 1974, as amended, and Regulation X thereunder, and all applicable usury, licensing, real property, consumer protection and other laws. With respect to escrow deposits and escrow payments to the extent the Mortgage Loan requires such escrow payments, all such payments are in the possession of, or under the control of, Seller or Guarantor and any interest required to be paid pursuant to state, federal and local law has been properly paid and credited. All escrow payments have been collected in full compliance with state and federal law. No escrow deposits or escrow payments or other charges or payments due to Seller have been capitalized under the Mortgage, the Mortgage Note or any related Mortgage Loan Document. The Mortgage Loan has not been serviced by any Person other than Guarantor or a Servicer.
(e) Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and Seller and Guarantor shall maintain or shall cause their respective agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, upon demand, any evidence of compliance with all such requirements that each of Seller and Guarantor is required to maintain or cause to be maintained pursuant to such laws or the requirements of any Governmental Authority.
(f) Validity of Mortgage Documents. The Mortgage Loan is evidenced by instruments acceptable to FHA, VA, RD, Fannie Mae, Freddie Mac or the Approved Investor, as applicable, given the type of Mortgage Loan. The Mortgage Loan Documents and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan, and all signatures thereon, are complete, authentic and genuine, and each such document is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms, except as may be limited by bankruptcy or other laws affecting the enforcement of creditor’s rights generally, and there are no rights of rescission, set-offs, counterclaims or other defenses with respect thereto. All parties to the Mortgage Loan Documents and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, had legal capacity to enter into the Mortgage Loan and to execute and deliver any such instrument or agreement and such instrument or agreement has been duly and properly executed by such related parties. Seller or Guarantor have reviewed all of the documents constituting the Mortgage Loan File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. To the best of Seller and Guarantor’s knowledge, except as disclosed to Buyer in writing, all tax identifications and property descriptions are legally sufficient; and tax segregation, where required, has been completed.
(g) No Outstanding Charges. 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, to the extent permitted by law, 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. None of Seller, Guarantor or their respective Subsidiaries has 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
Exhibit H-2
required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the proceeds of the Mortgage Loan, whichever is earlier, to the day which precedes by one month the due date of the first installment of principal and interest thereunder.
(h) Private Mortgage Insurance. If required by the applicable Agency Guide, each Conventional Conforming Mortgage Loan is or will be insured by a policy of private mortgage insurance in the amount required by the applicable Agency, and by an Insurer and all provisions of such private mortgage insurance policy have been and are being complied with, such policy is or will be in full force and effect and all premiums due thereunder have been paid. There are no defenses, counterclaims or rights of setoff affecting the Conventional Conforming Mortgage Loan or affecting the validity or enforceability of any private mortgage insurance applicable to such Mortgage Loan.
(i) Original Terms Unmodified. The terms of the Mortgage Note, the Mortgage and each other related Mortgage Loan Document have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been delivered to the Custodian and the terms of which are reflected in the Asset Data Record. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required, and its terms are reflected in the Asset Data Record. No Mortgagor in respect of the Mortgage 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 Mortgage Loan File delivered to Custodian. The related Mortgage Note, Mortgage and each other related Mortgage Loan Document contain the entire agreement of the parties and all of the obligations of Guarantor under the related Mortgage Loan.
(j) No Defenses. The Mortgage Loan is not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note, the Mortgage or any other related Mortgage Loan Document, or the exercise of any right thereunder, render any of the Mortgage Note, the Mortgage or any other related Mortgage Loan Document 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. Seller has no knowledge nor has it received any notice that any Mortgagor in respect of the Mortgage Loan is a debtor in any state or federal bankruptcy or insolvency proceeding.
(k) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission. None of Seller, Guarantor or their respective Subsidiaries has waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
(l) No Defaults. Other than Mortgage Loans which are no more than thirty (30) days past due, there is no default, breach, violation or event of acceleration existing under the Mortgage or the related Mortgage Note, and no event has occurred that, with the passage of time or with notice and the
Exhibit H-3
expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller, Guarantor nor any of their respective Subsidiaries have waived any default, breach, violation or event of acceleration.
(m) Customary Provisions. The Mortgage 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 or non-judicial foreclosure, in each case subject to applicable law. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, each Mortgaged Property pursuant to the proper procedures and subject to applicable law, the holder of the Mortgage Loan will be able to deliver good and merchantable title to each Mortgaged Property. There is no homestead or other exemption available to the Mortgagor that would interfere with such right of foreclosure. The Mortgage Note and Mortgage are on forms acceptable to FHA, VA, RD, Freddie Mac or Fannie Mae, as applicable.
(n) Location and Type of Mortgaged Property. The Mortgaged Property consists of a single or adjacent parcels of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or such other dwelling(s) conforming with the applicable Fannie Mae and Freddie Mac requirements regarding such dwellings or conforming to Guarantor’s underwriting guidelines acceptable to Buyer in its sole and absolute discretion; provided that no residence or dwelling is a condominium unit (unless the related Mortgage Loan was originated in compliance with the applicable Agency Guides or the applicable Underwriting Guidelines), a cooperative apartment (unless the related Mortgage Loan was originated in compliance with the applicable Agency Guides and Guarantor’s Underwriting Guidelines), a mobile home or a manufactured home (unless the related Mortgage Loan was originated in compliance with the applicable Agency Guides and Guarantor’s underwriting guidelines). Unless otherwise permitted pursuant to the applicable Agency Guides in effect as of the applicable date of determination, no Mortgage Loan is secured by a condotel, multi-family, mixed-use or commercial property, nor is any portion of the Mortgaged Property used for commercial purposes; provided that Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgage Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes.
(o) Location of Improvements; No Encroachments. Unless otherwise permitted pursuant to the applicable Agency Guides in effect as of the applicable date of determination, 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 encroached 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 or each such improvement constitutes legal non-conforming use of structure.
(p) Occupancy of the Mortgaged Property. As of the Purchase Date the Mortgaged Property is or will be lawfully occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate
Exhibit H-4
authorities. None of Seller, the Guarantor or their respective Subsidiaries has received 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. None of Seller, Guarantor or their respective Subsidiaries has received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. The Mortgagor represented at the time of origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary residence.
(q) Lien Position. The Mortgage Loan is secured by a valid, subsisting and enforceable first priority lien on 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, under the laws of the state where the related Mortgaged Property is located, 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 (1) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (2) which do not adversely affect the appraised value of the Mortgaged Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable first lien and first priority security interest on the property described therein and Seller has full right to pledge and assign its interest in the same to Buyer. The 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.
(r) No Future Advances. The full original principal amount of each Mortgage Loan, net of any discounts, has been fully advanced or disbursed to the Mortgagor named therein, except with respect to (i) escrow holdback amounts permitted under the applicable Agency Guides for weather-related or seasonal improvement costs, fees or expenses and (ii) specific mortgage products agreed upon by Buyer in writing in its sole and absolute discretion. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage. With respect to any Mortgage Loan, the terms of which require Seller or Guarantor to make additional advances or disbursements to or on behalf of the Mortgagor named therein after the date of origination, each of Seller and Guarantor has made all such advances and disbursements in accordance with the terms of the Mortgage and/or the terms and conditions of the related mortgage loan program, and such additional amounts have been
Exhibit H-5
advanced or disbursed from Seller’s or Guarantor’s respective funds, and not from funds representing any Purchase Price paid by Buyer to such Seller hereunder. For all Mortgage Loans other than with respect to (i) escrow holdback amounts for weather-related or seasonal improvement costs, fees or expenses and (ii) specific mortgage products agreed upon by Buyer in writing in its sole and absolute discretion, there is no requirement for future advances and any and all requirements as to completion of any on-site or off-site improvements and as to disbursements of any escrow funds therefor have been satisfied.
(s) Ownership. Seller owns and has full right to sell the Asset and the related Participation Interests 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 Person other than Guarantor, to sell each Asset pursuant to this Agreement. Guarantor owns and has full right to assign the Participation Interest in the Mortgage Loan to Seller 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 Person, to sell each Related Mortgage Loan pursuant to this Agreement. Following the sale of the Asset and the related Participation Interests, Buyer will own the entire Participation Interest in the Related 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. None of Seller, Guarantor or any of their respective Subsidiaries has previously pledged, sold or otherwise transferred such Asset to any Person other than Seller, Guarantor or any of their respective Subsidiaries. This Agreement creates in favor of Buyer, a valid, enforceable first priority lien and security interest in each Purchased Assets and the Related Mortgage Loans (and other Purchased Items), prior to the rights of all third Persons and subject to no other liens (other than Permitted Collateral Liens).
(t) 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 (1) organized under the laws of such state, (2) qualified to do business in such state, (3) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (4) not doing business in such state.
(u) Hazard Insurance. The Mortgage Loan is covered by a policy of hazard insurance and insurance against other insurable risks and hazards as are customary in the area where the Mortgaged Property is located as required by the applicable Agency Guides and in accordance with Guarantor’s underwriting guidelines and the Agency Guides, as applicable, in an amount not less than the greatest of (i) 100% of the replacement cost of all improvements to the Mortgaged Property and (ii) the amount necessary to avoid the operation of any co-insurance provisions with respect to the Mortgaged Property or such maximum lesser amount as permitted by the applicable Agency Guides and applicable law, all in a form usual and customary in the industry. 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 Emergency Management Agency 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
Exhibit H-6
National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1974. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming Guarantor, 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’ prior written notice to the mortgagee. No such notice has been received by Guarantor. All premiums 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 therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance; provided that the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. None of Seller, Guarantor or their respective Subsidiaries has 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, Guarantor or their respective Subsidiaries.
(v) Title Insurance. The Mortgage Loan is covered by either (i) an irrevocable title commitment, or an attorney’s opinion of title and abstract of title, each of which must be in form and substance acceptable to prudent mortgage lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or (ii) an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance acceptable to the applicable Agency and each such title insurance policy is issued by a title insurer acceptable to the applicable Agency and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, Guarantor or their respective 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 (q) of this Exhibit H. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Guarantor, its successors and assigns, are the sole insureds of such title insurance policy, and such 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 title insurance policy, and no prior holder, servicer or subservicer of the related Mortgage, including Seller and Guarantor or their related Subsidiaries, has done, by act or omission, anything which would impair the coverage of such 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 Guarantor, Seller or their respective Subsidiaries.
(w) [Reserved].
Exhibit H-7
(x) No Fraud. No error, omission, misrepresentation, negligence, fraud or similar occurrence has taken place with respect to the Mortgage Loan on the part of any Person, including, without limitation, the Mortgagor, any appraiser, originator, any correspondent any mortgage broker, any builder or developer or any other party involved in the origination of the Mortgage Loan or in the application of any insurance in relation to such Mortgage Loan.
(y) Compliance with Guidelines. The Mortgage Loan was originated in compliance with Guarantor’s underwriting guidelines. Each Agency Eligible Mortgage Loan was originated in Strict Compliance with the applicable Agency Guide.
(z) Transfer of Mortgage Loans. Except with respect to Mortgage Loans registered with MERS, the Assignment is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.
(aa) Due-On-Sale. Except as permitted by the applicable Agency Guide, 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.
(bb) No Buydown Provisions; No Graduated Payments or Contingent Interests. Except as permitted by the applicable Agency Guide, 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 Guarantor, the Mortgagor, or anyone on behalf of 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.
(cc) No Condemnation Proceeding. There have not been any condemnation proceedings with respect to the Mortgaged Property and Seller has no knowledge of any such proceedings.
(dd) Servicemembers Civil Relief Act. The Mortgagor has not notified Seller, Guarantor or their respective Subsidiaries, and neither Seller, Guarantor or their respective Subsidiaries has knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.
(ee) Disclosure Materials. If required by applicable law, the Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law, and Seller maintains such statement in the Mortgage File.
(ff) Construction or Rehabilitation of Mortgaged Property. Except with respect to a Renovation Mortgage Loan, 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.
(gg) Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.
(hh) No Equity Participation. Except as specifically provided in this Agreement with respect to the Participation Interest specifically provided in this Agreement, no document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in
Exhibit H-8
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 Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and none of Seller, Guarantor or their respective Subsidiaries has financed or owns, directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
(ii) Proceeds of Mortgage Loan. The proceeds of the Mortgage Loan have not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to Seller, Guarantor or their respective Subsidiaries, or any correspondent of Seller, except in connection with a refinanced Mortgage Loan.
(jj) Mortgage Submitted for Recordation. The Mortgage either has been or will promptly be submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.
(kk) Other Encumbrances. To the best of Seller’s and Guarantor’s knowledge, any property subject to any security interest given in connection with a Mortgage Loan is not subject to any other encumbrances other than a first position mortgage and encumbrances which may be allowed under the applicable Agency Guides.
(ll) Located in U.S. No collateral (including, without limitation, the related Mortgaged Property and the dwellings thereon and otherwise) relating to a Mortgage Loan is located in any jurisdiction other than in one of the fifty (50) states of the United States of America, the District of Columbia or the U.S. territories.
(mm) HOEPA. No Mortgage Loan is (i) subject to the provisions of 12 CFR 226.32 of Regulation Z implementing the Homeownership and Equity Protection Act of 1994 as amended (“HOEPA”), (ii) 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, (iii) 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 (iv) a High Cost Loan (as such term is defined in the current Standard & Poor’s LEVELS® Glossary Revised, Appendix E).
(nn) 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.
(oo) Payment Defaults; Payments Current. No payment default has occurred with respect to the Mortgage Loan. All payments required to be made up to the Purchase Date for the Mortgage Loan under the terms of the Mortgage Note and each other related Mortgage Loan Document have been made and credited. No Mortgage Loan is a Delinquent Mortgage Loan nor has any Mortgage Loan been a Delinquent Mortgage Loan at any time since the origination of the Mortgage Loan. The first monthly payment shall be made, or shall have been made, with respect to the Mortgage Loan on its due date or within thirty (30) calendar days thereof, all in accordance with the terms of the related Mortgage Note.
Exhibit H-9
(pp) Mortgaged Property Undamaged. The Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to adversely affect 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.
(qq) No Exception. Unless otherwise agreed to by Buyer in writing, all documents required to be delivered as part of the Mortgage File have been, or will be delivered to the Custodian in accordance with this Agreement. No document deficiency exists with respect to the Mortgage File that would materially and adversely affect the Mortgage Loan or Buyer’s ownership and/or security interest granted by Seller and Guarantor in the Mortgage Loan.
(rr) Value of Mortgaged Property. Each of Seller and Guarantor has no knowledge of any specific circumstances or conditions existing with respect to the Mortgage, the Mortgaged Property, Mortgagor or Mortgagor’s credit standing that should reasonably be expected to materially and adversely affect the value or marketability of the Mortgage Loan in comparison to similar mortgage loans.
(ss) MERS Mortgage Loans. With respect to each Mortgage Loan registered with MERS, a mortgage identification number has been assigned by MERS and such mortgage identification number is accurately provided on the Transaction Request and/or the Asset Data Record. The related Assignment to MERS, if any, has been duly and properly recorded. With respect to each Mortgage Loan registered with MERS, neither Seller nor Guarantor has received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.
(tt) Prepayment Fees. With respect to each Mortgage Loan that has a prepayment fee feature, each such prepayment fee is enforceable and was originated in compliance with all applicable federal, state and local laws and regulations and any applicable Agency Guide.
(uu) [Reserved].
(vv) [Reserved].
(ww) [Reserved].
(xx) Environmental Matters. To the knowledge of Seller and Guarantor, 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. To the knowledge of Seller and Guarantor, there is no pending action or proceeding directly involving any Mortgaged Property in which compliance with any environmental law, rule or regulation is alleged to have been violated.
(yy) Government Mortgage Loans. With respect to each Government Mortgage Loan, (i) all insurance or guaranty premiums or payments payable pursuant to the applicable Agency Guides in connection with such Mortgage Loan were paid within the timeframe required by such Agency Guides to avoid the imposition of any late fees or penalty fees, (ii) Seller or Guarantor has submitted all documents required by and in accordance with the timeframes established by the applicable Agency Guides to insure such Mortgage Loan (regardless of whether such documents are required to be contained in the related servicing file), (iii) there has been no notice, indication of ineligibility or rejection of the Mortgage Loan and there exists no impairment to full recovery without indemnity from the FHA, the VA or the RD, as applicable, and (iv) the related insurance
Exhibit H-10
contract, guaranty agreement and each similar agreement, as applicable, (x) is in full force and effect, 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, the VA or the RD, as applicable, to the full extent thereof, without surcharge, set-off or defense, or, (y) is not yet in full force and effect, all required documentation has been successfully submitted to the appropriate agency within the time frame set forth in clause (ii) above and Seller or Guarantor has provided Buyer any evidence or information requested by Buyer necessary for Buyer to verify compliance with (ii) above and that the related insurance or guaranty premiums or payments have been made. Each of Seller and Guarantor has no knowledge of any defenses, counterclaims, or rights of setoff affecting such Government Mortgage Loan or affecting the validity or enforceability of any private mortgage insurance or FHA Mortgage Insurance, VA loan guaranty or RD loan guaranty with respect to such Government Mortgage Loan. Each of Seller and Guarantor also has no knowledge of any circumstance which would cause such Government Mortgage Loan to be ineligible for FHA Mortgage Insurance, a VA loan guaranty or an RD loan guaranty, as applicable, or cause the FHA, the VA or the RD, as applicable, to deny or reject the related Mortgagor’s application for FHA Mortgage Insurance, a VA loan guaranty or an RD loan guaranty, respectively. Each Government Mortgage Loan was originated in accordance with the applicable Agency Guides.
(zz) Pooled Mortgage Loans. Each Related Mortgage Loan that will be pooled to support a Mortgage-Backed Security is being serviced by a servicer or subservicer having all Approvals necessary to make such Related Mortgage Loan eligible to back the related Mortgage-Backed Security.
(aaa) [Reserved].
(bbb) Qualified Mortgage. Each Mortgage Loan, except for those Mortgage Loans exempt under 12 C.F.R. 1026.43(a)(3) or 12 C.F.R. 1026.3 satisfies the following criteria:
(i) Such Mortgage Loan is a Qualified Mortgage;
(ii) Prior to the origination of such Mortgage Loan, the related originator made a reasonable and good faith determination that the related Mortgagor would have a reasonable ability to repay such Mortgage Loan according to its terms, in accordance with 12 C.F.R. 1026.43(c)(2); and
(iii) Such Mortgage Loan is supported by documentation that evidences compliance with the Ability to Repay Rule and the QM Rule, as applicable.
(ccc) Ability to Repay Determination. There is no action, suit or proceeding instituted by or against or, to the knowledge of Seller or Guarantor, threatened in writing against Seller, Guarantor or their respective Subsidiaries in any federal or state court or before any commission or other regulatory body (federal, state or local, foreign or domestic) that challenges the compliance of any Mortgage Loan (or the related underwriting) with, the Ability to Repay Rule or the QM Rule.
(ddd) TRID Compliance. To the extent applicable, effective with respect to applications taken on or after October 3, 2015, each Mortgage Loan was originated in compliance with the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure Rule, except for any immaterial noncompliance that Guarantor is using commercially reasonable efforts to remedy
Exhibit H-11
such immaterial noncompliance following Guarantor or Seller obtaining knowledge of such immaterial noncompliance.
(eee) [Reserved].
(fff) No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(ggg) Payment Terms. Principal and/or interest payments on the Mortgage Loan commenced or will commence no more than [***] calendar days after funds were disbursed in connection with the Mortgage Loan. Interest on the Mortgage Note is payable on the first day of each month, with interest calculated and payable in arrears. Principal on the Mortgage Note is payable on the earlier of the maturity date of such Mortgage Note and the date on which the indebtedness thereunder becomes immediately due and payable thereunder. The Mortgage Note does not permit negative amortization and does not contain any negative amortization features. Interest on each Mortgage Loan is calculated on the basis of either (i) a 360-day year and the actual days elapsed in each calendar month or (ii) a 360-day year consisting of twelve 30-day months.
(hhh) No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement and chattel mortgage referred to in clause (q) above or other collateral specified in the related Mortgage Loan Documents. The Mortgage Loan is not cross collateralized with any Mortgage Loan and/or any loan outside of this Agreement.
(iii) 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 the Custodian or Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
(jjj) Bona Fide Loan. The Mortgage Loan arose from a bona fide loan, complying with all applicable State and Federal laws and regulations, to persons having legal capacity to contract and is not subject to any defense, set-off or counterclaim.
(kkk) LTV. The LTV of the Mortgage Loan at origination was not more than the percentage set forth in the applicable Agency Guides in effect as of such date of origination with respect to such Mortgage Loan or Guarantor’s underwriting guidelines.
(lll) No Adverse Selection. The Mortgage Loan was not selected by Seller, Guarantor or their respective Subsidiaries in a manner intended to adversely affect the interest of Buyer. Other than the applicable eligibility criteria expressly contained herein and/or in the Transactions Terms Letter, Seller, Guarantor and their respective Subsidiaries used no selection procedures that identified the Mortgage Loan as being less desirable or valuable than other comparable Mortgage Loans owned and/or originated by Guarantor. Each Mortgage Loan, collectively with the other Mortgage Loans included on such Mortgage Loan Schedule, is representative of Seller’s and Guarantor’s portfolio of Mortgage Loans.
(mmm) Single Original Mortgage Note. There is only one originally executed Mortgage Note, which is not stamped as a duplicate with respect to each Mortgage Loan.
Exhibit H-12
(nnn) [Reserved].
(ooo) Endorsements. The Mortgage Note has been (or will be as of the related Purchase Date) endorsed by a duly authorized officer of Seller or Guarantor for its respective account and not as a fiduciary, trustee, trustor or beneficiary under a trust agreement.
(ppp) Accuracy of Information. All information provided to Buyer by Seller or Guarantor and prepared by Seller or Guarantor, as applicable, with respect to the Mortgage Loan is accurate in all material respects.
(qqq) Single Premium Credit Insurance. The Mortgagor has not been offered or required to purchase single premium credit insurance in connection with the origination of the related Mortgage Loan.
(rrr) Patriot Act. Seller, Guarantor and their respective Subsidiaries have complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the Patriot Act with respect to the origination of the Mortgage Loan. The Mortgage Loan is not subject to nullification pursuant to the Executive Order or the regulations promulgated by the Office of Foreign Assets Control of the United States Department of the Treasury (the “OFAC Regulations”) or in violation of the Executive Order or the OFAC Regulations, and the Mortgagor is not subject to the provisions of such Executive Order or the OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC Regulations.
(sss) [Reserved].
(ttt) Activity. To the knowledge of Seller and Guarantor, there are no illegal activities or activities relating to any controlled substances at the Mortgaged Property.
(uuu) No Broker. None of Seller, Guarantor or their respective Subsidiaries has dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement; provided, that if it has dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement, such commission or compensation shall have been paid in full by it.
(vvv) Appraisal. Unless not required by the relevant Agency Guide or Underwriting Guidelines, an Appraisal of the related Mortgaged Property was conducted and executed prior to the funding of the Mortgage Loan by a Qualified Appraiser, duly appointed by Seller, Guarantor or the related originator of the Mortgage Loan, who had no interest, direct or indirect in the Mortgaged Property or the Mortgagor or in any loan made on the security thereof, and whose compensation was not affected by the approval or disapproval of the Mortgage Loan.
(www) [Reserved].
(xxx) Purchased Items. Unless otherwise provided in connection with a Purchase Commitment, neither Guarantor nor Seller shall resell, reassign, retransfer or otherwise dispose of, or grant any option with respect to, or pledge or otherwise encumber (except pursuant to this Agreement or the Joint Securities Account Control Agreement) any of the Purchased Assets or other Purchased Items or any interest therein.
Exhibit H-13
EXHIBIT I
[RESERVED]
Exhibit I-1
EXHIBIT J
[RESERVED]
Exhibit J-1
EXHIBIT K
The escrow instruction letter (the “Escrow Instruction Letter”) shall also include the following instruction to the Settlement Agent (the “Escrow Agent”):
Goldman Sachs Bank USA (the “Buyer”), has agreed to provide funds (“Escrow Funds”) to HPFC Sub 1 LLC (the “Seller”) to finance certain mortgage loans (the “Mortgage Loans”) for which you are acting as Escrow Agent. U.S. Bank National Association, in its capacity as funds disbursement agent (the “Disbursement Agent”), will disburse such funds on behalf of Buyer.
You hereby agree that (a) you shall receive such Escrow Funds from the Buyer to be disbursed by the Disbursement Agent in connection with this Escrow Instruction Letter, (b) you will hold such Escrow Funds in trust, without deduction, set-off or counterclaim for the sole and exclusive benefit of Buyer until such Escrow Funds are fully disbursed on behalf of Buyer in accordance with the instructions set forth herein, and (c) you will disburse such Escrow Funds on the date specified for closing (the “Closing Date”) only after you have followed this Escrow Instruction Letter’s requirements with respect to the Mortgage Loans. In the event that the Escrow Funds cannot be disbursed on the Closing Date in accordance with the Escrow Instruction Letter, you agree to promptly remit the Escrow Funds to the Disbursement Agent by re-routing via wire transfer the Escrow Funds in immediately available funds, without deduction, set-off or counterclaim, returned back to the account specified in Disbursement Agent’s incoming wire transfer.
You further agree that, upon disbursement of the Escrow Funds, you will hold the Mortgage Loan File as specified in the Escrow Instruction Letter in escrow as agent and bailee for Buyer, and will forward the Mortgage Loan File and original Escrow Instruction Letter in connection with such Mortgage Loans by overnight courier (y) to the Disbursement Agent within three (3) Business Days following the date of origination.
You agree that all fees, charges and expenses regarding your services to be performed pursuant to this Escrow Instruction Letter are to be paid by Seller or its borrowers, and Buyer shall have no liability with respect thereto.
The provisions of this Escrow Instruction Letter may not be modified, amended or altered, except by written instrument, executed by the parties hereto and Buyer. You understand that Buyer shall act in reliance upon the provisions set forth in this Escrow Instruction Letter and that the Buyer is an intended third party beneficiary hereof.
Whether or not an Escrow Instruction Letter executed by you is received by the Disbursement Agent, your acceptance of the Escrow Funds shall be deemed to constitute your acceptance of this Escrow Instruction Letter.
Exhibit K-1
[SELLER SIGNATURE BLOCK] [GUARANTOR SIGNATURE BLOCK]
[ESCROW AGENT/SETTLEMENT AGENT SIGNATURE BLOCK]
Exhibit K-2
EXHIBIT L
FORM OF MONTHLY SERVICING REPORT
[***]
Exhibit L-1
SCHEDULE 1
Filing Jurisdictions and Offices
| Entity Name | Role | Filing Office | ||||||
| Home Point Financial Corporation | Guarantor | New Jersey | ||||||
| HPFC Sub 1 LLC | Seller | Delaware | ||||||
Schedule 1-1
SCHEDULE 2
Ownership Structure of Guarantor and its Affiliates and Subsidiaries
Schedule 2-1
Exhibit 10.3
AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT
This AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT (this “Guaranty”), dated as of June 30, 2021 (the “Effective Date”), is made by Home Point Financial Corporation (“Guarantor”) in favor of Goldman Sachs Bank USA (“Buyer”).
RECITALS
WHEREAS, pursuant to that certain Amended and Restated Master Repurchase Agreement, dated as of the Effective Date (as amended, restated, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), by and among Buyer, Guarantor and HPFC Sub 1 LLC, as seller (the “Seller”), Seller and Buyer may, from time to time, enter into certain Transactions;
WHEREAS, in connection with the Master Repurchase Agreement (as amended, supplemented or otherwise modified and in effect from time to time prior to the date hereof, the “Existing Repurchase Agreement”), dated as of March 24, 2021 (the “Initial Closing Date”), by and among Buyer, Home Point Financial Corporation, as original seller and Guarantor, Guarantor executed the Guaranty and Security Agreement, dated as of the Initial Closing Date (as amended, supplemented and otherwise modified from time to time prior to the date hereof, the “Existing Guaranty”), in favor of Buyer;
WHEREAS, in connection with the execution of the Repurchase Agreement, the parties desire to amend certain provisions of the Existing Guaranty as set forth in this Guaranty, on the terms and subject to the conditions set forth herein;
WHEREAS, Guarantor derives a substantial direct and indirect benefit from Buyer entering into Transactions with Seller pursuant to the Repurchase Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor has agreed to provide this Guaranty in respect of the Guaranteed Obligations (as defined herein), and hereby agrees as follows:
1. Defined Terms.
(a) Terms used herein and not defined herein shall have the meanings given to them in the Repurchase Agreement.
“Obligations” shall mean as of any date of determination, the unsatisfied obligations and liabilities of Seller to Buyer, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, or out of or in connection with the Repurchase Agreement or any other Principal Agreement.
(b) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Guaranty shall refer to this Guaranty as a whole and not to any particular provision of this Guaranty, and section and paragraph references are to this Guaranty unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
2. Guaranty. (a) Guarantor hereby, unconditionally and irrevocably, guarantees to Buyer and its permitted successors, endorsees, transferees and assigns, the prompt and complete payment and performance of the Obligations (the “Guaranteed Obligations”) by Seller, when due (whether at the stated maturity, by acceleration or otherwise).
(b) Guarantor further agrees to pay any and all expenses (including, without limitation, all reasonable and documented out of pocket fees and disbursements of counsel) which may be paid or incurred by Buyer in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Guaranteed Obligations and/or enforcing any rights with respect to, or collecting against, Guarantor under this Guaranty. This Guaranty shall remain in full force and effect until any remaining Guaranteed Obligations are paid in full, notwithstanding that from time to time prior thereto Seller may be free from any due and payable Obligations.
(c) Except as expressly provided elsewhere in this Guaranty, no payment or payments made by Seller or any other Person (except for payments made by Guarantor in respect of the Guaranteed Obligations) or received or collected by Buyer from Seller or any other Person (except for payments received or collected from Guarantor in respect of the Guaranteed Obligations) by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder which shall, notwithstanding any such payment or payments, remain liable for the Guaranteed Obligations until the Guaranteed Obligations are paid in full and the satisfaction and discharge of the Repurchase Agreement.
(d) Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to Buyer on account of its liability hereunder, it will notify Buyer in writing that such payment is made under this Guaranty for such purpose.
3. Representations and Warranties of Guarantor; Covenants of Guarantor.
(a) Guarantor hereby represents and warrants as of the date hereof:
(i) that it has received and reviewed copies of the Principal Agreements; and
(ii) that it will benefit from the execution of the Principal Agreements; and
(iii) [Reserved];
(iv) to the extent permitted by law, Guarantor hereby waives any defense arising by reason of, and any and all right to assert against Buyer, any claim or defense based upon, an election of remedies by Buyer which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to
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proceed against Seller for reimbursement or contribution, and/or any other rights of Guarantor to proceed against Seller, or against any other person or security.
(b) Guarantor hereby covenants with Buyer that it shall, upon request of Buyer and at Guarantor’s own expense, promptly: (A) execute and deliver to Buyer all such other and further documents reasonably required by Buyer, and (B) take such other action as Buyer may reasonably require, in each case, to carry out the intent of the provisions under this Guaranty.
4. [Reserved]
5. Right of Set-off. Buyer and its Affiliates (the “Buyer Parties”) shall have the right, after the occurrence and continuance of an Event of Default, to set-off claims and to appropriate or apply any and all deposits of money or property or any other Debt at any time held or owing by Buyer Parties to or for the credit of the account of Guarantor against and on account of the obligations and liabilities of Guarantor under this Guaranty or the Credit Agreement, dated as of July 11, 2019 (the “Credit Agreement”), among the Home Point Financial Corporation (the “Borrower”), Home Point Capital Inc., as guarantor (the “Credit Agreement Guarantor”), Goldman Sachs Bank USA (as “Administrative Agent”) and the financial institutions party thereto as lenders, irrespective of whether or not Buyer shall have made any demand hereunder and whether or not said obligations and liabilities shall have become due; provided, however, that the aforesaid right to set-off shall not apply to any deposits of escrow monies being held on behalf of the Mortgagors related to the Purchased Mortgage Loans or other third parties. Without limiting the generality of the foregoing, Buyer Parties shall be entitled to apply property held by Buyer Parties with respect to any Transaction against obligations and liabilities owed by Guarantor to Buyer Parties with respect to any other Transaction or any “Transaction” under the Credit Agreement (a “Credit Agreement Transaction”) but for the avoidance of doubt, the Buyer Parties shall not be entitled to apply property held by Buyer Parties with respect to any Credit Agreement Transaction against obligations and liabilities owed by Guarantor to the Buyer Parties with respect to any Transaction under the Repurchase Agreement. Buyer Parties may set off cash, the proceeds of any liquidation of the Related Mortgage Loans or Purchased Items and all other sums or obligations owed by Buyer Parties to Guarantor against all of Guarantor’s obligations to Buyer Parties, whether under this Guaranty, under a Transaction, a Credit Agreement Transaction or under any other agreement between the parties, or otherwise, whether or not such obligations are then due, without prejudice to Buyer Parties’ right to recover any deficiency. Buyer agrees to promptly notify Guarantor after any such set-off and application made by the Buyer Parties; provided that the failure to give such notice shall not affect the validity of such set-off and application.
Buyer and Guarantor intend and agree that all such payments pursuant to this Section 5 shall be “settlement payments” as such term is defined in Bankruptcy Code Section 741(8). The rights of Buyer under this Section 5 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which it may have.
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6. No Subrogation. Notwithstanding any payment or payments made by Guarantor hereunder or any set-off or application of funds of Guarantor by Buyer, Guarantor shall not be entitled to be subrogated to any of the rights of Buyer against Seller or any other guarantor or any collateral security or guarantee or right of offset held by Buyer for the payment of the Guaranteed Obligations, nor shall Guarantor seek or be entitled to seek any contribution or reimbursement from Seller or any other guarantor or Person in respect of payments of the Guaranteed Obligations made by Guarantor hereunder, until all amounts owing to Buyer on account of the Guaranteed Obligations are paid in full. If any amount shall be paid to Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full or performed, such amount shall be held in trust for the benefit of Buyer and shall forthwith be paid to Buyer, to be credited and applied against the Guaranteed Obligations..
7. [Reserved]
8. Waiver of Rights. To the extent permitted by applicable law, Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations, and notice of or proof of reliance by Buyer upon this Guaranty or acceptance of this Guaranty; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guaranty; and all dealings between Seller and Guarantor, on the one hand, and Buyer, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guaranty. Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Guarantor and Seller with respect to the Guaranteed Obligations.
9. Guaranty Absolute and Unconditional. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by Buyer, upon this Guaranty or acceptance of this Guaranty; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guaranty; and all dealings between Seller or Guarantor, on the one hand, and Buyer, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guaranty. Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Seller or itself with respect to the Guaranteed Obligations. This Guaranty shall be construed as a continuing, absolute and unconditional guarantee of payment and performance without regard to (i) the validity or enforceability of this Agreement, the other Principal Agreements, any of the Guaranteed Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Buyer, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by it or Seller against Buyer, (iii) any other circumstance whatsoever (with or without notice to or knowledge of Seller or Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of Seller for the Guaranteed Obligations, or of Guarantor under this Guaranty, in bankruptcy or in any other instance or (iv) any other defense, set off or counterclaim of a guarantor or a surety. When pursuing its rights and remedies hereunder
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against Guarantor, Buyer may, but shall be under no obligation, to pursue such rights and remedies that it may have against Seller or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue such other rights or remedies or to collect any payments from Seller or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Seller or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law or equity, of Buyer against Guarantor. This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and its successors and assigns thereof, and shall inure to the benefit of Buyer and its successors, permitted endorsees, permitted transferees and permitted assigns, until all the Obligations and the Guaranteed Obligations of Guarantor under this Guaranty shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Credit Agreement or this Agreement, Seller may be free from any due and payable Obligations.
10. Reinstatement. In the event that any payment on account of any of the Guaranteed Obligations is ever required to be returned by Buyer, for any reason (including, without limitation, bankruptcy or reorganization of Seller, Guarantor or any other obligor) or is set aside, recovered or rescinded, the Guaranteed Obligations to which such payment was applied shall for the purposes of this Guaranty be deemed to have continued in existence, notwithstanding such application, and this Guaranty shall be enforceable as to such Guaranteed Obligations fully as if such application had never been made. The bankruptcy or insolvency of Guarantor shall not terminate this Guaranty.
11. Payments. Guarantor hereby agrees that any payments hereunder will be promptly paid to Buyer, without deduction (for taxes or otherwise), abatement, recoupment, reduction, set off or counterclaim (other than a defense of payment or performance) in U.S. dollars and in accordance with the wiring instructions of Buyer.
12. Intent. Guarantor intends and acknowledges that (i) this Guaranty is a “master netting agreement” as that term is defined in Section 101(38A) of the Bankruptcy Code (except to the extent the term of the Transactions makes such term inapplicable), a “repurchase agreement” as that term is defined in Section 101(47)(A) of the Bankruptcy Code and a “securities contract” as that term is defined in Section 741(7)(A) of the Bankruptcy Code and (ii) this Guaranty is “credit enhancement” that is “related to” and provided “in connection with” the Agreement and each transaction thereunder and is within the meaning of Sections 101(38A)(A), 101(47)(a)(v) and 741(7)(A)(xi) of the Bankruptcy Code and is, therefore, (i) a “securities contract” as that term is defined in Section 741(7)(A)(xi) of the Bankruptcy Code and (ii) a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code and payments and transfers under this Guaranty constitute transfers made by, to, or for the benefit of a “financial institution,” “financial participant” or “repo participant” within the meaning of Section 101(22), 101(22A) and 101(46) of the Bankruptcy Code. It is understood and agreed that any party’s right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in
5
connection with this Guaranty is in each case a contractual right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Guaranty as described in Section 561 of the Bankruptcy Code.
13. Notices. All notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Guaranty) shall be given or made in writing (including, without limitation, by electronic transmission, telex or telecopy) and delivered to the addresses:
if to Guarantor:
Home Point Financial Corporation
2211 Old Earhart Road
2211 Old Earhart Road
Suite 250
Ann Arbor, Michigan 48105
Attention: Legal
Email: [***]
Attention: Legal
Email: [***]
if to Buyer:
Goldman Sachs Bank USA
2001 Ross Avenue, Suite 2800
Dallas, Texas 75201
Attn: Warehouse Lending
Email: [***]
or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. All such communications shall be deemed to have been duly given when received by telex or telecopy or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.
14. Severability; Counterparts. Any provision of this Guaranty which 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. This Guaranty may be signed and delivered in more than one counterpart all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Guaranty by telecopy, emailed .pdf or any other electronic means shall be effective as delivery of a manually executed counterpart of this Guaranty. The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and
6
Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
15. Integration. This Guaranty represents the agreement of Guarantor with respect to the subject matter hereof and there are no promises or representations by Buyer relative to the subject matter hereof not reflected herein.
16. Amendments, etc. with Respect the Guaranteed Obligations. Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor, and without notice to or further assent by Guarantor, any demand for payment of any of the Guaranteed Obligations made by Buyer may be rescinded by Buyer, and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Buyer, and this Agreement, the other Principal Agreements and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, in accordance with its terms and as Buyer, may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Buyer, for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. Buyer shall not have any obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Guaranteed Obligations or for this Guaranty or any property subject thereto. When making any demand hereunder against Guarantor, Buyer may, but shall be under no obligation to, make a similar demand on Seller, and any failure by Buyer to make any such demand or to collect any payments from Seller or any release of Seller or such other guarantor shall not relieve Guarantor of its Guaranteed Obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law or equity, of Buyer, against Guarantor. For the purposes hereof “demand” shall include, but shall not be limited to, the commencement and continuance of any legal proceedings.
17. Amendments in Writing; No Waiver; Cumulative Remedies.
(a) None of the terms or provisions of this Guaranty may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Buyer.
(b) Buyer shall not by any act (except by a written instrument pursuant to Section 17(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of Buyer, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Buyer of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Buyer would otherwise have on any future occasion.
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(c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
18. Section Headings. The section headings used in this Guaranty are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Guaranty shall be binding upon the successors and permitted assigns of Guarantor and shall inure to the benefit of Buyer and its successors and assigns. This Guaranty may not be assigned by Guarantor without the express written consent of Buyer.
20. Seller’s Financial Condition. Guarantor is presently informed of the financial condition of Seller and of all other circumstances which diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations. Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed of the financial condition of Seller, of all other circumstances which bear upon the risk of nonpayment and that it will continue to rely upon sources other than Buyer for such information and will not rely upon Buyer for any such information. Guarantor hereby waives its right, if any, to require Buyer to disclose to Guarantor any information which they may now or hereafter acquire concerning such condition or circumstances including, but not limited to, the release of or revocation by any other guarantor.
21. [Reserved].
22. Rights of Buyer.
(a) If an Event of Default shall have occurred that is continuing, Buyer shall have the right to receive any and all income, distributions, proceeds or other property received or paid in respect of the Pledged Assets and make application thereof to the Guaranteed Obligations, in such order as Buyer, in its sole discretion, may elect, in accordance with the Principal Agreements.
(b) The rights of Buyer under this Guaranty shall not be conditioned or contingent upon the pursuit by Buyer of any right or remedy against Guarantor or against any other Person which may be or become liable in respect of all or any part of the Obligations or against any other security therefor, guarantee thereof or right of offset with respect thereto. Buyer shall not be liable for any failure to demand, collect or realize upon all or any part of the Pledged Assets or for any delay in doing so, nor shall it be under any obligation to sell or otherwise dispose of any Pledged Assets upon the request of Guarantor or any other Person or to take any other action whatsoever with regard to the Pledged Assets or any part thereof.
(c) Guarantor also authorizes Buyer, at any time and from time to time following the occurrence and continuation of an Event of Default, to execute, in connection with the sale provided for in Sections 22 or 23 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Pledged Assets.
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(d) The powers conferred on Buyer hereunder are solely to protect Buyer’s interest in the Pledged Assets and shall not impose any duty upon Buyer to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or Buyer shall be responsible to Guarantor for any act or failure to act hereunder.
23. Remedies. If an Event of Default shall have occurred or is occurring that is continuing, Buyer may exercise, in addition to all other rights and remedies granted in this Guaranty and in any other instrument or agreement securing, evidencing or relating to the Guaranteed Obligations:
(a) all rights and remedies of a secured party under the Uniform Commercial Code in effect in each applicable jurisdiction and such additional rights and remedies to which a secured party is entitled at law or in equity, including the right, to the maximum extent permitted by law, to exercise all voting, consensual and other powers of ownership pertaining to the Pledged Assets as if Buyer were the sole and absolute owner thereof (and Guarantor agrees to take all such action as may be reasonably appropriate to give effect to such right);
(b) Buyer may make any reasonable compromise or settlement deemed desirable with respect to any of the Pledged Assets and may extend the time of payment, arrange for payment in installments, or otherwise modify the terms of, any of the Pledged Assets;
(c) Buyer in its discretion may, in its name or in the name of Guarantor or otherwise, demand, sue for, collect, direct payment of or receive any money or property at any time payable or receivable on account of or in exchange for any of the Pledged Assets, but shall be under no obligation to do so;
(d) sell, without notice or demand of any kind, at a public or private sale and at such price or prices as Buyer may deem to be commercially reasonable for cash or for future delivery without assumption of any credit risk, any or all or portions of the Related Mortgage Loans (after obtaining title thereto) or Pledged Assets on a servicing-retained or servicing-released basis; provided that Buyer may purchase any or all of the Pledged Assets at any public or private sale or (ii) in its sole and absolute discretion elect, in lieu of selling all or a portion of such Pledged Assets, to give Seller credit for such Pledged Assets in an amount equal to the Market Value of the Pledged Assets against the aggregate unpaid Repurchase Price and any other amounts owing by Guarantor hereunder; provided further that Guarantor shall remain liable to Buyer for any amounts that remain owing to Buyer following any such sale and/or credit; and
(e) The rights, powers, privileges and remedies of Buyer under this Guaranty are cumulative and shall be in addition to all rights, powers, privileges and remedies available to Buyer at law or in equity. All such rights, powers and remedies shall be cumulative and may be exercised successively or concurrently without impairing the rights of Buyer hereunder.
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24. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
25. SUBMISSION TO JURISDICTION; WAIVERS. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND THE PRINCIPAL AGREEMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS AND AGREES THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) CONSENTS AND AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 13 OR AT SUCH OTHER ADDRESS OF WHICH EACH OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED IN WRITING; AND
(d) CONSENTS AND AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.
26. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OTHER PRINCIPAL AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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27. Amendment and Restatement; No Novation. From and after the date hereof, this Guaranty supersedes the terms of the Existing Guaranty in all respects. Guarantor hereby (i) ratifies, affirms, acknowledges and agrees that the Existing Guaranty, including as amended by this Guaranty, represents the valid and enforceable obligations of Guarantor thereunder, in each case in accordance with its terms, including as amended hereby, and (ii) acknowledges that Guarantor has no claims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Obligations and the Guaranteed Obligations. Each Guarantor hereby agrees that this Guaranty in no way acts as a release or relinquishment of the Obligations and/or the Guaranteed Obligations as defined in the Existing Guaranty, any security interest or any rights securing payment of the Obligations and/or the Guaranteed Obligations. The Obligations and the Guaranteed Obligations and the rights of Guarantor securing payment and performance of the Obligations and the Guaranteed Obligations are hereby ratified and confirmed by Guarantor in all respects and survive the amendment and restatement of the Existing Guaranty in accordance with the terms hereof. From and after the date hereof, all references in any other document to the Existing Guaranty shall hereafter be deemed to be to this Guarantee. Notwithstanding the amendment and restatement of the Existing Guaranty, all amounts owing under the Existing Guaranty which remain outstanding shall constitute obligations owing hereunder. This Guaranty is not intended to constitute a novation of the Existing Guaranty.
[signature page follows]
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IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Security Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.
HOME POINT FINANCIAL CORPORATION, as Guarantor | ||||||||
| By: | /s/ Joseph Ruhlin | |||||||
| Name: | Joseph Ruhlin | |||||||
| Title: | Senior Managing Director - Treasurer | |||||||
ACKNOWLEDGED AND AGREED:
HOME POINT FINANCIAL CORPORATION, as Guarantor | |||||
| By: | /s/ Bryan Holt | ||||
| Name: | Bryan Holt | ||||
| Title: | Authorized Person | ||||
[Signature Page to A&R Guaranty and Security Agreement]
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