Delaware
|
| |
6162
|
| |
47-1776572
|
(State or other jurisdiction of incorporation or organization)
|
| |
(Primary Standard Industrial Classification Code Number)
|
| |
(I.R.S. Employer Identification Number)
|
Joseph H. Kaufman, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
(212) 455-2000
|
| |
Michael Kaplan, Esq.
Shane Tintle, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
|
Large accelerated filer
|
| |
☐
|
| |
Accelerated filer
|
| |
☐
|
Non-accelerated filer
|
| |
☒
|
| |
Smaller reporting company
|
| |
☐
|
|
| |
|
| |
Emerging growth company
|
| |
☒
|
Title of Each Class of Securities to be Registered
|
| |
Proposed Maximum
Aggregate Offering Price(1)(2)
|
| |
Amount of
Registration Fee
|
Common stock, par value $0.01 per share
|
| |
$100,000,000
|
| |
$10,910
|
(1)
|
Includes additional shares of common stock that the underwriters have the option to purchase. See “Underwriting (Conflicts of Interest).”
|
(2)
|
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended.
|
|
| |
Per Share
|
| |
Total
|
Price to the public
|
| |
$
|
| |
$
|
Underwriting discounts and commissions(1)
|
| |
$
|
| |
$
|
Proceeds to us (before expenses)
|
| |
$
|
| |
$
|
Proceeds to the selling stockholders (before expenses)
|
| |
$
|
| |
$
|
(1)
|
See “Underwriting (Conflicts of Interest)” for additional information regarding underwriter compensation.
|
Goldman Sachs & Co. LLC
|
| |
Wells Fargo Securities
|
| |
Morgan Stanley
|
| |
UBS Investment Bank
|
Credit Suisse
|
| |
J.P. Morgan
|
| |
BofA Securities
|
JMP Securities
|
| |
Piper Sandler
|
| |
R. Seelaus & Co., LLC
|
| |
SPC Capital Markets LLC
|
Wedbush Securities
|
| |
Zelman Partners LLC
|
|
| |
Page
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•
|
“An Agency” or “Agencies” refers to Ginnie Mae, the FHA, the VA, the USDA and/or GSEs.
|
•
|
“CFPB” refers to the Consumer Financial Protection Bureau.
|
•
|
“Fannie Mae” refers to the Federal National Mortgage Association.
|
•
|
“FHA” refers to the Federal Housing Administration.
|
•
|
“Freddie Mac” refers to the Federal Home Loan Mortgage Corporation.
|
•
|
“Ginnie Mae” refers to the Government National Mortgage Association.
|
•
|
“GSE” refers to Government-Sponsored Enterprises, such as Fannie Mae and Freddie Mac.
|
•
|
“Holdings” refers to Home Point Capital LP, a Delaware limited partnership, the direct parent of Home Point Capital Inc.
|
•
|
“HUD” refers to the U.S. Department of Housing and Urban Development.
|
•
|
“MBS” refers to mortgage-backed securities—a type of asset-backed security that is secured by a group of mortgage loans.
|
•
|
“MSRs” refers to mortgage servicing rights—the right and obligation to service a loan or pool of loans and to receive a servicing fee as well as certain ancillary income. MSRs may be bought and sold, resulting in the transfer of loan servicing obligations. MSRs are designated as such when the benefits of servicing the loans are expected to adequately compensate the servicer for performing the servicing.
|
•
|
“Sponsor” or “Stone Point Capital” refers to Stone Point Capital LLC.
|
•
|
“Trident Stockholders” refers, collectively, to one or more investment entities directly or indirectly managed by Stone Point Capital, including Trident VI, L.P., Trident VI Parallel Fund, L.P., Trident VI DE Parallel Fund, L.P. and Trident VI Professionals Fund, L.P.
|
•
|
“USDA” means the U.S. Department of Agriculture.
|
•
|
“VA” means the U.S. Department of Veterans Affairs.
|
(1)
|
Total origination volume excludes origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(2)
|
Origination volume figures used to calculate market share include $1.0 billion of Distributed Retail originations in our results of operations for the year ended December 31, 2018.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
•
|
provide us efficient access to both purchase and refinance transactions throughout market cycles;
|
•
|
benefit from the premise that in-market advisors will continue to be a cornerstone of the mortgage origination process;
|
•
|
are highly scalable and flexible; and
|
•
|
provide an optimized experience for our customers.
|
(1)
|
Total origination volume excludes origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(2)
|
Third Party Partners includes both Broker Partners and Correspondent Partners.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
Activation Rate by Broker Partner Cohort
|
| |
Wallet Share Growth by Broker Partner
Cohort Following Initial Onboarding
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
(1)
|
Third Party Partners includes both Broker Partners and Correspondent Partners.
|
(2)
|
Active broker market coverage is calculated as the total number of active brokers at Home Point divided by the total number of brokers in the market.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
•
|
economies of scale: allows brokers to benefit from the scale of a larger organization while being able to run their business at a size that can be most responsive to their customers;
|
•
|
optimal choice: rather than needing to work with one originator, brokers have the ability to partner with multiple lenders to determine the best financing alternative for their customers; and
|
•
|
scalability of cost structure: reduce cost per loan and limited overhead.
|
•
|
the spread of the COVID-19 (as defined below) outbreak and severe disruptions in the U.S. and global economy and financial markets it has caused;
|
•
|
our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business;
|
•
|
the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions;
|
•
|
the requirement to repurchase mortgage loans or indemnify investors if we breach representations and warranties;
|
•
|
counterparty risk;
|
•
|
the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances;
|
•
|
competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns;
|
•
|
our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume;
|
•
|
competition in the industry in which we operate;
|
•
|
our ability to acquire loans and sell the resulting MBS in the secondary markets on favorable terms in our production activities;
|
•
|
our being a “controlled company” within the meaning of rules and, as a result, qualifying for exemptions from certain corporate governance requirements; and
|
•
|
our Sponsor controlling us and its interests conflicting with ours or yours in the future.
|
•
|
the last day of the year following the fifth anniversary of this offering;
|
•
|
the last day of the first year in which our annual gross revenues exceed an amount specified by regulation (currently $1.07 billion);
|
•
|
the day we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second quarter of such year; and
|
•
|
the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding three-year period.
|
•
|
no exercise of the underwriters’ option to purchase additional shares of our common stock;
|
•
|
an initial public offering price of $ per share of common stock, which is the midpoint of the estimated price range set forth on the cover page of this prospectus;
|
•
|
the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws immediately prior to the consummation of this offering;
|
•
|
the -for-one stock split of our common stock, which we intend to effectuate prior to the effectiveness of the registration statement of which this prospectus forms a part; and
|
•
|
the merger of Holdings with and into the Company concurrent with the consummation of this offering, with the Company as the surviving entity.
|
•
|
shares of common stock issuable upon exercise of outstanding options, (i) of which are vested, with a weighted-average exercise price of $ per share, and (ii) of which are not vested, with a weighted-average exercise price of $ per share, in each case, issued under our 2015 Option Plan. See “Executive Compensation—Narrative Disclosure to Summary Compensation Table—Equity Awards”; and
|
•
|
shares of common stock reserved for future issuance under the 2021 Incentive Plan and shares of common stock reserved for future issuance under the 2021 Employee Stock Purchase Plan, each of which we intend to adopt in connection with this offering. See “Executive Compensation—Actions in Connection with this Offering.”
|
|
| |
Nine months ended
September 30,
|
| |
Year ended
December 31,
|
||||||
(In thousands, except shares and per share amounts)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
| |
(unaudited)
|
| |
(audited)
|
||||||
Statement of Operations Data
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$962,778
|
| |
$135,495
|
| |
$199,501
|
| |
$84,068
|
Loan fee income
|
| |
60,630
|
| |
19,829
|
| |
32,112
|
| |
19,603
|
Interest income
|
| |
42,370
|
| |
35,101
|
| |
51,801
|
| |
35,179
|
Interest expense
|
| |
(47,845)
|
| |
(41,933)
|
| |
(57,942)
|
| |
(47,486)
|
Interest loss, net
|
| |
(5,475)
|
| |
(6,832)
|
| |
(6,141)
|
| |
(12,307)
|
Loan servicing fees
|
| |
133,904
|
| |
104,089
|
| |
144,228
|
| |
119,049
|
Change in fair value of mortgage servicing rights
|
| |
(230,524)
|
| |
(151,168)
|
| |
(173,134)
|
| |
(47,312)
|
Other income
|
| |
1,022
|
| |
1,591
|
| |
3,159
|
| |
1,156
|
Total net revenue
|
| |
922,335
|
| |
103,004
|
| |
199,725
|
| |
164,257
|
|
| |
|
| |
|
| |
|
| |
|
Compensation and benefits
|
| |
251,462
|
| |
104,571
|
| |
156,197
|
| |
109,577
|
Loan expense
|
| |
28,581
|
| |
10,182
|
| |
15,626
|
| |
16,882
|
Loan servicing expense
|
| |
22,742
|
| |
15,781
|
| |
20,924
|
| |
18,488
|
Occupancy and equipment
|
| |
17,006
|
| |
12,567
|
| |
16,768
|
| |
20,521
|
General and administrative
|
| |
28,373
|
| |
14,687
|
| |
21,407
|
| |
29,165
|
Depreciation and amortization
|
| |
4,222
|
| |
4,394
|
| |
5,918
|
| |
7,612
|
Other expenses
|
| |
12,087
|
| |
2,770
|
| |
4,296
|
| |
4,060
|
Total expenses
|
| |
364,473
|
| |
164,952
|
| |
241,136
|
| |
206,305
|
|
| |
|
| |
|
| |
|
| |
|
Income (loss) from continuing operations before income tax
|
| |
557,862
|
| |
(61,948)
|
| |
(41,411)
|
| |
(42,048)
|
Income tax expense (benefit) from continuing operations
|
| |
149,306
|
| |
(14,080)
|
| |
(9,500)
|
| |
(10,485)
|
Income from equity method investment
|
| |
14,050
|
| |
2,591
|
| |
2,701
|
| |
209
|
Net income (loss) from continuing operations
|
| |
422,606
|
| |
(45,277)
|
| |
(29,210)
|
| |
(31,354)
|
Net income from discontinued operations before tax
|
| |
—
|
| |
—
|
| |
—
|
| |
9,707
|
Income tax provision
|
| |
—
|
| |
—
|
| |
—
|
| |
2,550
|
Income from discontinued operations, net of tax
|
| |
—
|
| |
—
|
| |
—
|
| |
7,157
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
| |
$(29,210)
|
| |
$(24,197)
|
|
| |
Nine months ended
September 30,
|
| |
Year ended
December 31,
|
||||||
(In thousands, except shares and per share amounts)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
| |
(unaudited)
|
| |
(audited)
|
||||||
Basic and diluted earnings per share
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted income (loss) per share from continuing operations
|
| |
$4,226
|
| |
$(453)
|
| |
$(292)
|
| |
$(314)
|
Basic and diluted earnings per share from discontinued operations
|
| |
—
|
| |
—
|
| |
—
|
| |
72
|
Basic and diluted total net income (loss) per share
|
| |
$4,226
|
| |
$(453)
|
| |
$(292)
|
| |
$(242)
|
Weighted average shares of common stock outstanding
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted
|
| |
100
|
| |
100
|
| |
100
|
| |
100
|
|
| |
September 30,
|
| |
December 31,
|
|||
(In thousands, except shares and per share amounts)
|
| |
2020
|
| |
2019
|
| |
2018
|
|
| |
(unaudited)
|
| |
(audited)
|
|||
Balance Sheet Data:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$271,483
|
| |
$30,630
|
| |
$44,010
|
Restricted cash
|
| |
41,907
|
| |
51,101
|
| |
38,234
|
Cash and cash equivalents and restricted cash
|
| |
313,390
|
| |
81,731
|
| |
82,244
|
Mortgage loans held for sale (at fair value)
|
| |
2,281,835
|
| |
1,554,230
|
| |
421,754
|
Mortgage servicing rights (at fair value)
|
| |
583,263
|
| |
575,035
|
| |
532,526
|
Property and equipment, net
|
| |
18,595
|
| |
12,051
|
| |
10,075
|
Accounts receivable, net
|
| |
79,320
|
| |
57,872
|
| |
44,422
|
Derivative assets
|
| |
314,794
|
| |
40,544
|
| |
18,990
|
Goodwill and intangibles
|
| |
11,083
|
| |
11,935
|
| |
10,957
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
499,207
|
| |
451,209
|
Other assets
|
| |
65,745
|
| |
76,162
|
| |
64,214
|
Total assets
|
| |
$6,587,906
|
| |
$2,908,767
|
| |
$1,636,391
|
|
| |
|
| |
|
| |
|
Liabilities and Shareholder’s equity:
|
| |
|
| |
|
| |
|
Liabilities:
|
| |
|
| |
|
| |
|
Warehouse lines of credit
|
| |
$2,092,477
|
| |
$1,478,183
|
| |
$404,237
|
Term debt and other borrowings, net
|
| |
374,090
|
| |
424,958
|
| |
276,277
|
Accounts payable and accrued expenses
|
| |
269,016
|
| |
39,739
|
| |
21,243
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
499,207
|
| |
451,209
|
Other liabilities
|
| |
189,700
|
| |
56,368
|
| |
44,654
|
Total liabilities
|
| |
$5,845,164
|
| |
2,498,455
|
| |
1,197,620
|
|
| |
|
| |
|
| |
|
Shareholder’s equity:
|
| |
|
| |
|
| |
|
Common stock (100 shares issued and outstanding, par value $0.01 per share)
|
| |
—
|
| |
—
|
| |
—
|
Additional paid-in-capital
|
| |
519,177
|
| |
454,861
|
| |
454,110
|
Accumulated deficit
|
| |
223,565
|
| |
(44,549)
|
| |
(15,339)
|
Total shareholder’s equity
|
| |
742,742
|
| |
410,312
|
| |
438,771
|
Total liabilities and shareholder’s equity
|
| |
$6,587,906
|
| |
$2,908,767
|
| |
$1,636,391
|
|
| |
Nine months ended
September 30,
|
| |
Year ended
December 31,
|
||||||
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Other financial data
|
| |
|
| |
|
| |
|
| |
|
Adjusted revenue(1)
|
| |
$1,034,687
|
| |
$190,522
|
| |
$276,907
|
| |
$154,118
|
Adjusted net income (loss)(1)
|
| |
494,598
|
| |
20,347
|
| |
28,185
|
| |
(32,006)
|
Adjusted EBITDA(1)
|
| |
688,847
|
| |
52,288
|
| |
69,410
|
| |
(19,613)
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018(2)
|
Origination Segment KPIs
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
Origination Volume by Channel
|
| |
|
| |
|
| |
|
| |
|
Wholesale(3)
|
| |
$23,772,112
|
| |
$7,023,411
|
| |
$11,564,971
|
| |
$4,889,220
|
Correspondent(3)
|
| |
12,696,815
|
| |
6,676,458
|
| |
10,215,300
|
| |
5,081,719
|
Direct(3)
|
| |
1,576,959
|
| |
291,302
|
| |
487,322
|
| |
608,148
|
Origination volume(3)
|
| |
$38,045,886
|
| |
$13,991,171
|
| |
$22,267,593
|
| |
$10,579,087
|
|
| |
|
| |
|
| |
|
| |
|
Gain on sale margin
|
| |
|
| |
|
| |
|
| |
|
Gain on sale margin (bps)(4)
|
| |
253.1
|
| |
96.8
|
| |
89.6
|
| |
79.5
|
|
| |
|
| |
|
| |
|
| |
|
Market Share
|
| |
|
| |
|
| |
|
| |
|
Overall share of origination market(5)
|
| |
1.4%
|
| |
0.9%
|
| |
1.0%
|
| |
0.7%
|
Share of wholesale channel(6)
|
| |
6.4%
|
| |
3.0%
|
| |
3.5%
|
| |
2.6%
|
|
| |
|
| |
|
| |
|
| |
|
Origination Volume by Purpose(7)
|
| |
|
| |
|
| |
|
| |
|
Purchase
|
| |
31.7%
|
| |
54.4%
|
| |
50.6%
|
| |
66.5%
|
Refinance
|
| |
68.3%
|
| |
45.6%
|
| |
49.4%
|
| |
33.5%
|
|
| |
|
| |
|
| |
|
| |
|
Third Party Partners
|
| |
|
| |
|
| |
|
| |
|
Number of Broker Partners(8)
|
| |
4,921
|
| |
2,684
|
| |
3,085
|
| |
1,623
|
Number of Correspondent Partners(9)
|
| |
594
|
| |
516
|
| |
537
|
| |
451
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018(2)
|
Servicing Segment KPIs
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
Mortgage Servicing
|
| |
|
| |
|
| |
|
| |
|
MSR servicing portfolio - UPB(10)
|
| |
$73,951,042
|
| |
$47,887,643
|
| |
$52,600,546
|
| |
$41,423,825
|
Servicing portfolio - Units(11)
|
| |
307,236
|
| |
217,558
|
| |
236,362
|
| |
189,513
|
|
| |
|
| |
|
| |
|
| |
|
60 days or more delinquent(12)
|
| |
6.6%
|
| |
2.0%
|
| |
1.7%
|
| |
2.3%
|
|
| |
|
| |
|
| |
|
| |
|
MSR Portfolio
|
| |
|
| |
|
| |
|
| |
|
MSR multiple(13)
|
| |
2.6x
|
| |
3.2x
|
| |
3.4x
|
| |
4.3x
|
(1)
|
We define Adjusted revenue as Total net revenue exclusive of the impact of the change in fair value of MSRs related to changes in valuation inputs and assumptions, net of MSRs hedge and adjusted for Income from equity method investment.
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Total net revenue
|
| |
$922,335
|
| |
$103,004
|
| |
$199,725
|
| |
$164,257
|
Income from equity method investment
|
| |
14,050
|
| |
2,591
|
| |
2,701
|
| |
209
|
Change in fair value of MSR (due to inputs and assumptions), net of hedge
|
| |
98,302
|
| |
84,927
|
| |
74,481
|
| |
(10,348)
|
Adjusted revenue
|
| |
$1,034,687
|
| |
$190,522
|
| |
$276,907
|
| |
$154,118
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
| |
$(29,210)
|
| |
$(24,197)
|
Change in fair value of MSR (due to inputs and assumptions), net of hedge
|
| |
98,302
|
| |
84,927
|
| |
74,481
|
| |
(10,348)
|
Income tax effect of change in fair value of MSR (due to inputs and assumptions), net of hedge
|
| |
(26,310)
|
| |
(19,303)
|
| |
(17,086)
|
| |
2,539
|
Adjusted net income (loss)
|
| |
$494,598
|
| |
$20,347
|
| |
$28,185
|
| |
$(32,006)
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
| |
$(29,210)
|
| |
$(24,197)
|
Income from discontinued operations, net of tax
|
| |
—
|
| |
—
|
| |
—
|
| |
(7,157)
|
Interest expense on corporate debt
|
| |
14,411
|
| |
22,324
|
| |
27,721
|
| |
24,962
|
Income tax expense (benefit) from continuing operations
|
| |
149,306
|
| |
(14,080)
|
| |
(9,500)
|
| |
(10,485)
|
Depreciation and amortization
|
| |
4,222
|
| |
4,394
|
| |
5,918
|
| |
7,612
|
Change in fair value of MSR (due to inputs and assumptions), net of hedge
|
| |
98,302
|
| |
84,927
|
| |
74,481
|
| |
(10,348)
|
Adjusted EBITDA
|
| |
$688,847
|
| |
$52,288
|
| |
$69,410
|
| |
$(19,613)
|
(2)
|
Unless otherwise indicated, our Distributed Retail channel was included in discontinued operations in our results of operations for the year ended December 31, 2018 and as such it has been excluded from our key performance indicators for the year ended December 31, 2018.
|
(3)
|
Origination dollar value of new loans funded by channel. Origination volume excludes Origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(4)
|
Calculated as Gain on sale, net divided by Origination volume.
|
(5)
|
Calculated as the Company’s originations dollar value for the year divided by the total residential originations in the United States of America per Inside Mortgage Finance, a third party provider of residential mortgage industry news and statistics each year. Origination volume figures used to calculate market share include $1 billion of Distributed Retail originations in our results of operations for the year ended December 31, 2018.
|
(6)
|
Calculated as the Company’s originations dollar value for the year divided by the total wholesale originations in the United States of America per Inside Mortgage Finance, each year.
|
(7)
|
Origination volume excludes Origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(8)
|
Number of Broker Partners with whom the Company sources loans from.
|
(9)
|
Number of Correspondent Partners from whom the Company purchases loans from.
|
(10)
|
The unpaid principal balance of loans we service on behalf of Ginnie Mae, Fannie Mae, Freddie Mae and others, at period end.
|
(11)
|
Number of loans in our serving portfolio at period end.
|
(12)
|
Total balances of outstanding loan principals for which installment payments are at least 60 days past due as a percentage of the outstanding loan principal as of a specified date.
|
(13)
|
Calculated as the MSR fair market value as of a specified date divided by the related UPB divided by the weighted average service fee.
|
•
|
a general decline in business activity;
|
•
|
negatively impacting demand for our mortgage loan products, as well as borrowers’ ability to fulfill their loan obligations leading to an increase in delinquency rates, which could have a significant impact on the value of our mortgage assets;
|
•
|
the requirement for us to advance material amounts of cash for delinquent principal, interest, taxes and insurance typically paid by borrowers, which may not be reimbursed for an extended period of time;
|
•
|
the costs of preserving and liquidating defaulted properties, as a result of increased serious delinquencies and defaults;
|
•
|
the destabilization of the real estate and mortgage markets, which could negatively impact fair value of our assets, reduce our loan production volume, reduce the profitability of servicing mortgages or adversely affect our ability to sell mortgage loans;
|
•
|
difficulty accessing the capital markets on attractive terms, or at all, and a severe disruption and instability in the global financial markets, including the MBS market, or deteriorations in credit and financing conditions which could affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis;
|
•
|
the inability to promptly foreclose on defaulted mortgage loans and liquidate the underlying real property due to the rapidly changing regulatory and administrative climate, including the suspension of foreclosures and evictions as mandated by governmental bodies;
|
•
|
the potential negative impact on the health of our highly qualified personnel, in particular skilled managers, loan servicers, debt default specialists and underwriters, especially if a significant number of them are impacted; and
|
•
|
a deterioration in our ability to ensure business continuity during a disruption.
|
•
|
restrictive covenants and borrowing conditions in our existing or future financing arrangements that may limit our ability to raise additional debt;
|
•
|
a decline in the liquidity in the credit markets;
|
•
|
prevailing interest rates;
|
•
|
the financial strength of our lenders;
|
•
|
the decisions of lenders from whom we borrow to reduce their exposure to mortgage loans; and
|
•
|
accounting changes that impact the calculations of covenants in our debt agreements.
|
•
|
an increase in the number of similar loans available for sale;
|
•
|
conditions in the loan securitization market or in the secondary market for loans in general or for our loans in particular, which could make our loans less desirable to potential investors;
|
•
|
defaults under loans in general;
|
•
|
loan-level pricing adjustments imposed by Fannie Mae and Freddie Mac, including the recently imposed adjustments for the purchase of loans in forbearance and, although deferred for later implementation, refinancing loans;
|
•
|
the types and volume of loans being originated or sold by us;
|
•
|
the level and volatility of interest rates; and
|
•
|
the quality of loans previously sold by us.
|
•
|
loss of our licenses and approvals to engage in our servicing and lending/loan purchasing businesses;
|
•
|
damage to our reputation in the industry;
|
•
|
governmental investigations and enforcement actions;
|
•
|
administrative fines and penalties and litigation;
|
•
|
civil and criminal liability, including class action lawsuits;
|
•
|
diminished ability to sell loans that we originate or purchase, requirements to sell such loans at a discount compared to other loans or repurchase or address indemnification claims from purchasers of such loans, including the GSEs;
|
•
|
inability to raise capital; and
|
•
|
inability to execute on our business strategy, including our growth plans.
|
•
|
underwriting standards and credit standards for mortgage loans;
|
•
|
our staffing levels and other servicing practices;
|
•
|
the servicing and ancillary fees that we may charge;
|
•
|
our modification standards and procedures;
|
•
|
the amount of reimbursable and non-reimbursable advances that we may make; and
|
•
|
the types of loan products that are eligible for sale or securitization.
|
•
|
a majority of our board of directors consist of “independent directors” as defined under the rules of NASDAQ;
|
•
|
our director nominees be selected, or recommended for our board of directors’ selection by a nominating/governance committee comprised solely of independent directors; and
|
•
|
the compensation of our executive officers be determined, or recommended to our board of directors for determination, by a compensation committee comprised solely of independent directors.
|
•
|
we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act,
|
•
|
we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and
|
•
|
we will not be required to hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.
|
•
|
results of operations that vary from the expectations of securities analysts and investors;
|
•
|
results of operations that vary from those of our competitors;
|
•
|
changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;
|
•
|
changes in economic conditions for companies in our industry;
|
•
|
changes in market valuations of, or earnings and other announcements by, companies in our industry;
|
•
|
declines in the market prices of stocks generally, particularly those of companies in our industry;
|
•
|
additions or departures of key management personnel;
|
•
|
strategic actions by us or our competitors;
|
•
|
announcements by us, our competitors, our suppliers of significant contracts, price reductions, new products or technologies, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;
|
•
|
changes in preference of our customers and our market share;
|
•
|
changes in general economic or market conditions or trends in our industry or the economy as a whole;
|
•
|
changes in business or regulatory conditions;
|
•
|
future sales of our common stock or other securities;
|
•
|
investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives;
|
•
|
changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industry;
|
•
|
the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
|
•
|
changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business;
|
•
|
announcements relating to litigation or governmental investigations;
|
•
|
guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
|
•
|
the development and sustainability of an active trading market for our common stock;
|
•
|
exchange rate fluctuations;
|
•
|
tax developments;
|
•
|
changes in accounting principles; and
|
•
|
other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, war, acts of terrorism, civil unrest or responses to these events.
|
•
|
a classified board of directors, as a result of which our board of directors will be divided into three classes, with each class serving for staggered three-year terms;
|
•
|
the ability of our board of directors to issue one or more series of preferred stock;
|
•
|
advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
|
•
|
certain limitations on convening special stockholder meetings;
|
•
|
the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors if our Sponsor and its affiliates cease to beneficially own at least 40% of shares of common stock entitled to vote generally in the election of directors; and
|
•
|
that certain provisions may be amended only by the affirmative vote of at least 66 2/3% of shares of common stock entitled to vote generally in the election of directors if our Sponsor and its affiliates cease to beneficially own at least 40% of shares of common stock entitled to vote generally in the election of directors.
|
•
|
the spread of the COVID-19 outbreak and severe disruptions in the U.S. and global economy and financial markets it has caused;
|
•
|
our reliance on our financing arrangements to fund mortgage loans and otherwise operate our business;
|
•
|
the dependence of our loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions;
|
•
|
the requirement to repurchase mortgage loans or indemnify investors if we breach representations and warranties;
|
•
|
counterparty risk;
|
•
|
the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances;
|
•
|
competition for mortgage assets that may limit the availability of desirable originations, acquisitions and result in reduced risk-adjusted returns;
|
•
|
our ability to continue to grow our loan origination business or effectively manage significant increases in our loan production volume;
|
•
|
competition in the industry in which we operate;
|
•
|
our success and growth of our production and servicing activities and the dependence upon our ability to adapt to and implement technological changes;
|
•
|
the effectiveness of our risk management efforts;
|
•
|
our ability to detect misconduct and fraud;
|
•
|
any failure to attract and retain a highly skilled workforce, including our senior executives;
|
•
|
our ability to obtain, maintain, protect and enforce our intellectual property;
|
•
|
any cybersecurity risks, cyber incidents and technology failures;
|
•
|
material changes to the laws, regulations or practices applicable to reverse mortgage programs operated by FHA and HUD;
|
•
|
our vendor relationships;
|
•
|
our failure to deal appropriately with various issues that may give rise to reputational risk, including legal and regulatory requirements;
|
•
|
any employment litigation and related unfavorable publicity;
|
•
|
exposure to new risks and increased costs as a result of initiating new business activities or strategies or significantly expanding existing business activities or strategies;
|
•
|
any failure to comply with the significant amount of regulation applicable to our new investment management subsidiary;
|
•
|
the impact of changes in political or economic stability or by government policies on our material vendors with operations in India;
|
•
|
our ability to fully utilize our NOL and other tax carryforwards;
|
•
|
any challenge by the IRS of the amount, timing and/or use of our NOL carryforwards;
|
•
|
possible changes in legislation and the effect on our ability to use the tax benefits associated with our NOL carryforwards;
|
•
|
the impact of other changes in tax laws;
|
•
|
the impact of interest rate fluctuations;
|
•
|
risks associated with hedging against interest rate exposure;
|
•
|
the impact of any prolonged economic slowdown, recession or declining real estate values;
|
•
|
risks associated with financing our assets with borrowings;
|
•
|
risks associated with a decrease in value of our collateral;
|
•
|
the dependence of our operations on access to our financing arrangements, which are mostly uncommitted;
|
•
|
risks associated with the financial and restrictive covenants included in our financing agreements;
|
•
|
our exposure to volatility in the London Inter-Bank Offered Rate;
|
•
|
our ability to raise the debt or equity capital required to finance our assets and grow our business;
|
•
|
risks associated with higher risk loans that we service;
|
•
|
risks associated with derivative financial instruments;
|
•
|
our ability to foreclose on our mortgage assets in a timely manner or at all;
|
•
|
our ability to obtain and/or maintain licenses and other approvals in those jurisdictions where required to conduct our business;
|
•
|
the impact of revised rules and regulations and enforcement of existing rules and regulations by the CFPB;
|
•
|
legislative and regulatory changes that impact the mortgage loan industry or housing market;
|
•
|
changes in regulations or the occurrence of other events that impact the business, operations or prospects of government agencies such as Ginnie Mae, the FHA or the VA, the USDA, or GSEs such as Fannie Mae or Freddie Mac, or such changes that increase the cost of doing business with such entities;
|
•
|
the Dodd-Frank Act and its implementing regulations and regulatory agencies, and any other legislative and regulatory changes that impact the business, operations or governance of mortgage lenders;
|
•
|
the CFPB, and its issued and future rules and the enforcement thereof;
|
•
|
changes in government support of homeownership;
|
•
|
changes in government or government sponsored home affordability programs;
|
•
|
changes in governmental regulations, accounting treatment, tax rates and similar matters;
|
•
|
risks associated with our acquisition of MSRs;
|
•
|
the impact of our counterparties terminating our servicing rights under which we conduct servicing activities; and
|
•
|
our failure to deal appropriately with issues that may give rise to reputational risk.
|
•
|
on an actual basis;
|
•
|
on a pro forma basis, giving effect to the Debt Transaction; and
|
•
|
on a pro forma as adjusted basis, giving effect to the Debt Transaction, as well as (i) the stock split and the merger of Holdings into the Company described elsewhere in this prospectus and (ii) this offering and the use of proceeds received by us therefrom, assuming an initial public offering price of $ per share of common stock, which is the mid-point of the estimated offering price range set forth on the cover page of this prospectus, and after deducting the underwriting discounts and commissions and estimated offering expenses.
|
|
| |
September 30, 2020
|
||||||
(Unaudited)
(In thousands, except shares and per share data)
|
| |
Actual
|
| |
Pro Forma
for Debt
Transaction
|
| |
Pro Forma
As Adjusted
for the Debt
Transaction and
this Offering
|
Cash and cash equivalents(1)
|
| |
$271,483
|
| |
$ (3)
|
| |
$
|
|
| |
|
| |
|
| |
|
Debt
|
| |
|
| |
|
| |
|
Warehouse lines of credit
|
| |
$2,092,477
|
| |
$
|
| |
$
|
Operating line of credit
|
| |
1,000
|
| |
|
| |
|
Advance facilities
|
| |
18,250
|
| |
|
| |
|
Term debt, net(2)
|
| |
354,840
|
| |
|
| |
|
Senior Unsecured Notes
|
| |
—
|
| |
|
| |
|
Total debt
|
| |
$2,466,567
|
| |
$
|
| |
|
|
| |
|
| |
|
| |
|
Stockholder’s equity
|
| |
|
| |
|
| |
|
Common stock, par value $0.01 per share (100 shares authorized, issued and outstanding, actual and pro forma; and shares authorized, shares issued and outstanding, pro forma as adjusted)
|
| |
$—
|
| |
$
|
| |
$
|
Additional paid in capital
|
| |
519,177
|
| |
|
| |
|
Retained earnings
|
| |
223,565
|
| |
|
| |
|
Total stockholder’s equity
|
| |
742,742
|
| |
$
|
| |
$
|
|
| |
|
| |
|
| |
|
Total capitalization
|
| |
$3,209,309
|
| |
$
|
| |
$
|
(1)
|
Does not include Restricted cash. Also excludes the impact of the cash dividend declared by our board of directors on September 30, 2020 in the amount of $154.5 million, which was paid to Holdings, the sole stockholder, on October 5, 2020. See “Prospectus Summary—Recent Developments—Payment of Cash Dividend.”
|
(2)
|
Net of issuance costs.
|
(3)
|
A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the amount of net proceeds to us from this offering by $ , assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
|
Assumed initial public offering price per share of common stock
|
| |
$
|
Pro forma net tangible book value (deficit) per share of common stock as of September 30, 2020 before this offering
|
| |
|
Increase in pro forma net tangible book value per share of common stock attributable to investors in this offering
|
| |
|
Pro forma net tangible book value (deficit) per share of common stock after this offering
|
| |
|
Dilution per share of common stock to investors in this offering
|
| |
$
|
|
| |
Shares Purchased
|
| |
Total Consideration
|
| |
Average Price
Per Share
|
||||||
Name of Beneficial Owners
|
| |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||
Existing owners
|
| |
|
| |
|
| |
|
| |
|
| |
|
New investors in this offering
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total
|
| |
|
| |
|
| |
|
| |
|
| |
|
•
|
the issuance in January 2021 of $ aggregate principal amount of Senior Unsecured Notes;
|
•
|
the use of approximately $ of the net proceeds from the issuance of the Senior Unsecured Notes to repay outstanding amounts under our MSR Facility;
|
•
|
the use of approximately $ of the net proceeds from the issuance of the Senior Unsecured Notes to fund a distribution to our existing shareholders; and
|
•
|
this offering and the application of the estimated net proceeds from this offering received by us as described under “Use of Proceeds”.
|
|
| |
As Reported
|
| |
Pro Forma
Adjustments
Related to Debt
Transaction
|
| |
Footnotes
|
| |
Pro Forma
for Debt
Transaction
|
| |
Pro Forma
Adjustments
Related to This
Offering
|
| |
Footnotes
|
| |
Pro Forma As
Adjusted
|
Assets:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$271,483
|
| |
|
| |
(A)
|
| |
|
| |
|
| |
(F)
|
| |
|
Restricted cash
|
| |
41,907
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Cash and cash equivalents and restricted cash
|
| |
313,390
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Mortgage loans held for sale (at fair value)
|
| |
2,281,835
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Mortgage servicing rights (at fair value)
|
| |
583,263
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Property and equipment, net
|
| |
18,595
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Accounts receivable, net
|
| |
79,320
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Derivative assets
|
| |
314,794
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Goodwill and intangibles
|
| |
11,083
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Other assets
|
| |
65,745
|
| |
|
| |
|
| |
|
| |
|
| |
(G)
|
| |
|
Total assets
|
| |
$6,587,906
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Liabilities and Shareholders’ Equity:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Liabilities:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Warehouse lines of credit
|
| |
$2,092,477
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Term debt and other borrowings, net
|
| |
374,090
|
| |
|
| |
(C)
|
| |
|
| |
|
| |
|
| |
|
Accounts payable and accrued expenses
|
| |
269,017
|
| |
|
| |
(B)
|
| |
|
| |
|
| |
(H)
|
| |
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Other liabilities
|
| |
189,700
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total liabilities
|
| |
$5,845,165
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Shareholders’ Equity:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Common stock (100 shares issued and outstanding, par value $0.01 per share)
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
(F)
|
| |
|
Additional paid-in capital
|
| |
519,177
|
| |
|
| |
(E)
|
| |
|
| |
|
| |
(I)
|
| |
|
Retained earnings (accumulated deficit)
|
| |
223,565
|
| |
|
| |
(D)
|
| |
|
| |
|
| |
(H)
|
| |
|
Total shareholders' equity
|
| |
742,742
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total liabilities and shareholders' equity
|
| |
$6,587,906
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
As Reported
|
| |
Pro Forma
Adjustments
Related to Debt
Transaction
|
| |
Footnotes
|
| |
Pro Forma
for Debt
Transaction
|
| |
Pro Forma
Adjustments
Related to This
Offering
|
| |
Footnotes
|
| |
Pro Forma As
Adjusted
|
Revenue:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$962,778
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan fee income
|
| |
60,630
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Interest income
|
| |
42,370
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Interest expense
|
| |
(47,845)
|
| |
|
| |
(A)
|
| |
|
| |
|
| |
|
| |
|
Interest loss, net
|
| |
(5,476)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan servicing fees
|
| |
133,904
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Change in fair value of mortgage servicing rights
|
| |
(230,524)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Other income
|
| |
1,022
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total net revenue
|
| |
922,335
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Expenses:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Compensation and benefits
|
| |
251,462
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan expense
|
| |
28,581
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan servicing expense
|
| |
22,742
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Occupancy and equipment
|
| |
17,006
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
General and administrative
|
| |
28,373
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Depreciation and amortization
|
| |
4,222
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Other expenses
|
| |
12,087
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total expenses
|
| |
364,473
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Income (loss) before income tax
|
| |
557,862
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Income tax expense (benefit)
|
| |
149,306
|
| |
|
| |
(B)
|
| |
|
| |
|
| |
|
| |
|
Income from equity method investment
|
| |
14,050
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total net income (loss)
|
| |
$422,606
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Earnings Per Share:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted earnings per share
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
(C)
|
| |
—
|
|
| |
As Reported
|
| |
Pro Forma
Adjustments
Related to Debt
Transaction
|
| |
Footnotes
|
| |
Pro Forma
for Debt
Transaction
|
| |
Pro Forma
Adjustments
Related to This
Offering
|
| |
Footnotes
|
| |
Pro Forma As
Adjusted
|
Revenue:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$199,501
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan fee income
|
| |
32,112
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Interest income
|
| |
51,801
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Interest expense
|
| |
(57,942)
|
| |
|
| |
(A)
|
| |
|
| |
|
| |
|
| |
|
Interest loss, net
|
| |
(6,141)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan servicing fees
|
| |
144,228
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Change in fair value of mortgage servicing rights
|
| |
(173,134)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Other income
|
| |
3,159
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total net revenue
|
| |
199,725
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Expenses:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Compensation and benefits
|
| |
156,197
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan expense
|
| |
15,626
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Loan servicing expense
|
| |
20,924
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Occupancy and equipment
|
| |
16,768
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
General and administrative
|
| |
21,407
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Depreciation and amortization
|
| |
5,918
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Other expenses
|
| |
4,296
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total expenses
|
| |
241,136
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Income (loss) before income tax
|
| |
(41,411)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Income tax expense (benefit)
|
| |
(9,500)
|
| |
|
| |
(B)
|
| |
|
| |
|
| |
|
| |
|
Income from equity method investment
|
| |
2,701
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total net income (loss)
|
| |
$(29,210)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Earnings Per Share:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted earnings per share
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
(C)
|
| |
—
|
(A)
|
Represents the net adjustment to Cash and cash equivalents to reflect (i) the net cash proceeds of $ million received from the issuance of the Senior Unsecured Notes and the payment of $ million to repay a portion of the MSR Facility as discussed in note (C), (ii) $ million distributed to our existing shareholder, (iii) $ million used to pay debt issuance costs related to the issuance of the Senior Unsecured Notes; and (iv) $ million used to pay accrued interest related to the MSR Facility as discussed in note (B).
|
(B)
|
Represents the adjustment to Accounts payable and accrued expenses to reflect the payment of $ million of accrued interest associated with the repayment of a portion of the MSR Facility.
|
(C)
|
Represents the issuance of $ million aggregate principal amount of Senior Unsecured Notes, a portion of the net proceeds of which was used to pay down $ million of the MSR Facility. As a result, Term debt and other borrowings, net decreased by $ million.
|
Issuance of the Senior Unsecured Notes
|
| |
$
|
Debt issuance costs of Senior Unsecured Notes
|
| |
|
Repayment of portion of the MSR Facility
|
| |
|
Net adjustment to Term debt and other borrowings, net
|
| |
$
|
(D)
|
Represents the adjustment to reduce retained earnings to zero to reflect the $ million of the total $ million distribution paid to our existing shareholder from the net proceeds of the Senior Unsecured Notes. The remainder of the distribution, $ million, has been reflected as a decrease to Additional paid-in capital as discussed in note (E).
|
(E)
|
Represents the adjustment to reduce Additional paid-in capital in excess of Retained earnings balance by $ million as a result of the distribution paid to our existing shareholder from the net proceeds of the Senior Unsecured Notes.
|
(F)
|
Represents the estimated net proceeds received by us in the offering, approximately $ million based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting $ of assumed underwriting discounts and commissions. We intend to use the net proceeds received by us from this offering for general corporate purposes. We will not receive any proceeds from the sale of shares by the selling stockholders. Of the total proceeds received by us of $ million, $ million will be reflected as an increase to our Common stock with the remaining $ increasing Additional paid-in capital. See “Use of Proceeds” for further information.
|
Gross proceeds from the offering
|
| |
$
|
| |
|
Underwriting discounts and commissions
|
| |
|
| |
|
Change in pro forma cash from the offering
|
| |
$
|
| |
|
(G)
|
Represents an adjustment in Other assets to reflect certain deferred costs related to the offering which are primarily related to legal, accounting and other direct costs. Upon completion of this offering, these deferred costs will be charged against the proceeds from this offering with a corresponding reduction to Additional paid-in capital as discussed in note (I). As of September 30, 2020, on an actual basis, $ million of deferred offering costs were recorded in Other assets.
|
(H)
|
Subsequent to September 30, 2020, an additional $ million of capitalizable costs were incurred which were recorded in Accounts payable and accrued expenses with a corresponding reduction to Additional paid-in capital as discussed in note (I). After September 30, 2020, the Company incurred an additional $ million of costs associated with this offering that were not eligible for capitalization. These costs were expensed as incurred and were recorded to Accounts payable and accrued expenses and Retained earnings.
|
(I)
|
The following table is a reconciliation of the adjustments impacting Additional paid-in-capital after giving effect to the Pro Forma Transactions (in thousands):
|
Net proceeds from offering of common stock
|
| |
$
|
| |
(F)
|
Reclassification of deferred costs incurred in this offering to Additional paid-in capital
|
| |
|
| |
(G), (H)
|
Net Additional paid-in capital pro forma adjustment
|
| |
$
|
| |
|
(A)
|
Represents the net adjustment to Interest expense associated with the payment of a portion of the MSR Facility and the issuance of the Senior Unsecured Notes (in thousands):
|
|
| |
Nine months ended
September 30, 2020
|
| |
Year ended
December 31, 2019
|
Interest expense — Senior Unsecured Notes
|
| |
|
| |
|
Interest expense — MSR Facility
|
| |
|
| |
|
Net adjustments to Interest expense
|
| |
|
| |
|
(B)
|
Represents a reduction of $ million and $ million in Income tax expense for the nine months ended September 30, 2020 and for the year ended December 31, 2019, respectively. The adjustment was based on the statutory tax rate of %. The adjustment is the result of the net increase in pro forma Interest expense arising from the issuance of the Senior Unsecured Notes partially offset by the repayment of a portion of the MSR Facility.
|
(C)
|
Pro forma Basic and diluted earnings per share has been calculated based on the number of shares assumed to be outstanding, assuming such shares were outstanding for the full periods presented and reflects shares of common stock outstanding. The following table sets forth the computation of unaudited pro forma Basic and diluted earnings per share (in thousands, except for share and per share data):
|
|
| |
Nine months ended
September 30, 2020
|
| |
Year ended
December 31, 2019
|
Numerator
|
| |
|
| |
|
Pro forma net income (basic and diluted)
|
| |
|
| |
|
Denominator
|
| |
|
| |
|
Weighted average of common stock outstanding
|
| |
|
| |
|
Assumed shares sold in this offering sufficient to pay dividends in excess of current year earnings
|
| |
|
| |
|
Assumed shares sold in this offering sufficient to partially repay debt
|
| |
|
| |
|
Weighted average shares of common stock outstanding (basic and dilutive)
|
| |
|
| |
|
Pro forma net income per share (basic and dilutive)
|
| |
|
| |
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31,
|
||||||
(In thousands, except shares and per share amounts)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
| |
(unaudited)
|
| |
(audited)
|
||||||
Statement of Operations Data
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$962,778
|
| |
$135,495
|
| |
$199,501
|
| |
$84,068
|
Loan fee income
|
| |
60,630
|
| |
19,829
|
| |
32,112
|
| |
19,603
|
Interest income
|
| |
42,370
|
| |
35,101
|
| |
51,801
|
| |
35,179
|
Interest expense
|
| |
(47,845)
|
| |
(41,933)
|
| |
(57,942)
|
| |
(47,486)
|
Interest loss, net
|
| |
(5,475)
|
| |
(6,832)
|
| |
(6,141)
|
| |
(12,307)
|
Loan servicing fees
|
| |
133,904
|
| |
104,089
|
| |
144,228
|
| |
119,049
|
Change in fair value of mortgage servicing rights
|
| |
(230,524)
|
| |
(151,168)
|
| |
(173,134)
|
| |
(47,312)
|
Other income
|
| |
1,022
|
| |
1,591
|
| |
3,159
|
| |
1,156
|
Total net revenue
|
| |
922,335
|
| |
103,004
|
| |
199,725
|
| |
164,257
|
|
| |
|
| |
|
| |
|
| |
|
Compensation and benefits
|
| |
251,462
|
| |
104,571
|
| |
156,197
|
| |
109,577
|
Loan expense
|
| |
28,581
|
| |
10,182
|
| |
15,626
|
| |
16,882
|
Loan servicing expense
|
| |
22,742
|
| |
15,781
|
| |
20,924
|
| |
18,488
|
Occupancy and equipment
|
| |
17,006
|
| |
12,567
|
| |
16,768
|
| |
20,521
|
General and administrative
|
| |
28,373
|
| |
14,687
|
| |
21,407
|
| |
29,165
|
Depreciation and amortization
|
| |
4,222
|
| |
4,394
|
| |
5,918
|
| |
7,612
|
Other expenses
|
| |
12,087
|
| |
2,770
|
| |
4,296
|
| |
4,060
|
Total expenses
|
| |
364,473
|
| |
164,952
|
| |
241,136
|
| |
206,305
|
|
| |
|
| |
|
| |
|
| |
|
Income (loss) from continuing operations before income tax
|
| |
557,862
|
| |
(61,948)
|
| |
(41,411)
|
| |
(42,048)
|
Income tax expense (benefit) from continuing operations
|
| |
149,306
|
| |
(14,080)
|
| |
(9,500)
|
| |
(10,485)
|
Net income (loss) from continuing operations
|
| |
408,556
|
| |
(47,868)
|
| |
(31,911)
|
| |
(31,563)
|
Net income from discontinued operations before tax
|
| |
—
|
| |
—
|
| |
—
|
| |
9,707
|
Income tax provision
|
| |
—
|
| |
—
|
| |
—
|
| |
2,550
|
Income from discontinued operations, net of tax
|
| |
—
|
| |
—
|
| |
—
|
| |
7,157
|
Income from equity method investment
|
| |
14,050
|
| |
2,591
|
| |
2,701
|
| |
209
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
| |
$(29,210)
|
| |
$(24,197)
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31,
|
||||||
(In thousands, except shares and per share amounts)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
| |
(unaudited)
|
| |
(audited)
|
||||||
Basic and diluted loss earnings per share:
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted income (loss) per share from continuing operations
|
| |
$4,226
|
| |
$(453)
|
| |
$(319)
|
| |
$(316)
|
Basic and diluted earnings per share from discontinued operations
|
| |
—
|
| |
—
|
| |
—
|
| |
72
|
Basic and diluted total net income (loss) per share
|
| |
$4,226
|
| |
$(453)
|
| |
$(292)
|
| |
$(242)
|
Weighted average shares of common stock outstanding
|
| |
|
| |
|
| |
|
| |
|
Basic and diluted
|
| |
100
|
| |
100
|
| |
100
|
| |
100
|
|
| |
September 30,
|
| |
December 31,
|
|||
(In thousands, except shares and per share amounts)
|
| |
2020
|
| |
2019
|
| |
2018
|
|
| |
(unaudited)
|
| |
(audited)
|
|||
Balance Sheet Data
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$271,483
|
| |
$30,630
|
| |
$44,010
|
Restricted cash
|
| |
41,907
|
| |
51,101
|
| |
38,234
|
Cash and cash equivalents and restricted cash
|
| |
313,390
|
| |
81,731
|
| |
82,244
|
Mortgage loans held for sale (at fair value)
|
| |
2,281,835
|
| |
1,554,230
|
| |
421,754
|
Mortgage servicing rights (at fair value)
|
| |
583,263
|
| |
575,035
|
| |
532,526
|
Property and equipment, net
|
| |
18,595
|
| |
12,051
|
| |
10,075
|
Accounts receivable, net
|
| |
79,320
|
| |
57,872
|
| |
44,422
|
Derivative assets
|
| |
314,794
|
| |
40,544
|
| |
18,990
|
Goodwill and intangibles
|
| |
11,083
|
| |
11,935
|
| |
10,957
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
499,207
|
| |
451,209
|
Other assets
|
| |
65,745
|
| |
76,162
|
| |
64,214
|
Total assets
|
| |
$6,587,906
|
| |
$2,908,767
|
| |
$1,636,391
|
|
| |
|
| |
|
| |
|
Liabilities and Shareholder’s equity:
|
| |
|
| |
|
| |
|
Liabilities:
|
| |
|
| |
|
| |
|
Warehouse lines of credit
|
| |
$2,092,477
|
| |
$1,478,183
|
| |
$404,237
|
Term debt and other borrowings, net
|
| |
374,090
|
| |
424,958
|
| |
276,277
|
Accounts payable and accrued expenses
|
| |
269,016
|
| |
39,739
|
| |
21,243
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
499,207
|
| |
451,209
|
Other liabilities
|
| |
189,700
|
| |
56,368
|
| |
44,654
|
Total liabilities
|
| |
$5,845,164
|
| |
2,498,455
|
| |
1,197,620
|
|
| |
|
| |
|
| |
|
Shareholder’s equity:
|
| |
|
| |
|
| |
|
Common stock (100 shares issued and outstanding, par value $0.01 per share)
|
| |
—
|
| |
—
|
| |
—
|
Additional paid-in-capital
|
| |
519,177
|
| |
454,861
|
| |
454,110
|
Accumulated deficit
|
| |
223,565
|
| |
(44,549)
|
| |
(15,339)
|
Total shareholder’s equity
|
| |
742,742
|
| |
410,312
|
| |
438,771
|
Total liabilities and shareholder’s equity
|
| |
$6,587,906
|
| |
$2,908,767
|
| |
$1,636,391
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018(a)
|
Origination Volume by Channel
|
| |
|
| |
|
| |
|
| |
|
Wholesale(b)
|
| |
$23,772,112
|
| |
$7,023,411
|
| |
$11,564,971
|
| |
$4,889,220
|
Correspondent(b)
|
| |
12,696,815
|
| |
6,676,458
|
| |
10,215,300
|
| |
5,081,719
|
Direct(b)
|
| |
1,576,959
|
| |
291,302
|
| |
487,322
|
| |
608,148
|
Origination volume(b)
|
| |
$38,045,886
|
| |
$13,991,171
|
| |
$22,267,593
|
| |
$10,579,087
|
|
| |
|
| |
|
| |
|
| |
|
Gain on sale margin
|
| |
|
| |
|
| |
|
| |
|
Gain on sale margin (bps)(c)
|
| |
253.1
|
| |
96.8
|
| |
89.6
|
| |
79.5
|
|
| |
|
| |
|
| |
|
| |
|
Market Share
|
| |
|
| |
|
| |
|
| |
|
Overall share of origination market(d)
|
| |
1.4%
|
| |
0.9%
|
| |
1.0%
|
| |
0.7%
|
Share of wholesale channel(e)
|
| |
6.4%
|
| |
3.0%
|
| |
3.5%
|
| |
2.6%
|
|
| |
|
| |
|
| |
|
| |
|
Origination Volume by Purpose(f)
|
| |
|
| |
|
| |
|
| |
|
Purchase
|
| |
31.7%
|
| |
54.4%
|
| |
50.6%
|
| |
66.5%
|
Refinance
|
| |
68.3%
|
| |
45.6%
|
| |
49.4%
|
| |
33.5%
|
|
| |
|
| |
|
| |
|
| |
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018(a)
|
Third Party Partners
|
| |
|
| |
|
| |
|
| |
|
Number of Broker Partners(g)
|
| |
4,921
|
| |
2,684
|
| |
3,085
|
| |
1,623
|
Number of Correspondent Partners(h)
|
| |
594
|
| |
516
|
| |
537
|
| |
451
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended
December 31
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019(a)
|
| |
2019
|
| |
2018(a)
|
Mortgage Servicing
|
| |
|
| |
|
| |
|
| |
|
MSR Servicing Portfolio - UPB(i)
|
| |
$73,951,042
|
| |
$47,887,643
|
| |
$52,600,546
|
| |
$41,423,825
|
MSR Servicing Portfolio - Units(j)
|
| |
307,236
|
| |
217,558
|
| |
236,362
|
| |
189,513
|
|
| |
|
| |
|
| |
|
| |
|
60 days or more delinquent(k)
|
| |
6.6%
|
| |
2.0%
|
| |
1.7%
|
| |
2.3%
|
|
| |
|
| |
|
| |
|
| |
|
MSR Portfolio
|
| |
|
| |
|
| |
|
| |
|
MSR multiple(l)
|
| |
2.6x
|
| |
3.2x
|
| |
3.4x
|
| |
4.3x
|
(a)
|
Unless otherwise indicated, our Distributed Retail channel was included in discontinued operations in our results of operations for the year ended December 31, 2018 and as such it has been excluded from our key performance indicators for the year ended December 31, 2018.
|
(b)
|
Origination dollar value of new loans funded by channel. Origination volume excludes Origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(c)
|
Calculated as Gain on sale, net divided by Origination volume.
|
(d)
|
Calculated as the Company’s originations dollar value for the year divided by the total residential originations in the United States of America per Inside Mortgage Finance, a third party provider of residential mortgage industry news and statistics each year. Origination volume figures used to calculate market share include $1 billion of Distributed Retail originations in our results of operations for the year ended December 31, 2018.
|
(e)
|
Calculated as the Company’s originations dollar value for the year divided by the total wholesale originations in the United States of America per Inside Mortgage Finance, each year.
|
(f)
|
Origination volume excludes Origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(g)
|
Number of Broker Partners with whom the Company sources loans from.
|
(h)
|
Number of Correspondent Partners from whom the Company purchases loans.
|
(i)
|
The unpaid principal balance of loans we service on behalf of Ginnie Mae, Fannie Mae, Freddie Mae and others, at period end.
|
(j)
|
Number of loans in our serving portfolio at period end.
|
(k)
|
Total balances of outstanding loan principals for which installment payments are at least 60 days past due as a percentage of the outstanding loan principal as of a specified date.
|
(l)
|
Calculated as the MSR fair market value as of a specified date divided by the related UPB divided by the weighted average service fee.
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Total net revenue
|
| |
$922,335
|
| |
$103,004
|
| |
$199,725
|
| |
$164,257
|
Income from equity method investment
|
| |
14,050
|
| |
2,591
|
| |
2,701
|
| |
209
|
Change in fair value of MSR (due to inputs and assumptions), net of hedge(a)
|
| |
98,302
|
| |
84,927
|
| |
74,481
|
| |
(10,348)
|
Adjusted revenue
|
| |
$1,034,687
|
| |
$190,522
|
| |
$276,907
|
| |
$154,118
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
| |
$(29,210)
|
| |
$(24,197)
|
Change in fair value of MSR (due to inputs and assumptions), net of hedge(a)
|
| |
98,302
|
| |
84,927
|
| |
74,481
|
| |
(10,348)
|
Income tax effect of change in fair value of MSR (due to inputs and assumptions), net of hedge(b)
|
| |
(26,310)
|
| |
(19,303)
|
| |
(17,086)
|
| |
2,539
|
Adjusted net income (loss)
|
| |
$494,598
|
| |
$20,347
|
| |
$28,185
|
| |
$(32,006)
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
| |
$(29,210)
|
| |
$(24,197)
|
Income from discontinued operations, net of tax
|
| |
—
|
| |
—
|
| |
—
|
| |
(7,157)
|
Interest expense on corporate debt
|
| |
14,411
|
| |
22,324
|
| |
27,721
|
| |
24,962
|
Income tax expense (benefit) from continuing operations
|
| |
149,306
|
| |
(14,080)
|
| |
(9,500)
|
| |
(10,485)
|
Depreciation and amortization
|
| |
4,222
|
| |
4,394
|
| |
5,918
|
| |
7,612
|
Change in fair value of MSR (due to inputs and assumptions), net of hedge(a)
|
| |
98,302
|
| |
84,927
|
| |
74,481
|
| |
(10,348)
|
Adjusted EBITDA
|
| |
$688,847
|
| |
$52,288
|
| |
$69,410
|
| |
$(19,613)
|
(a)
|
MSR fair value changes due to valuation inputs and assumptions are measured using a stochastic discounted cash flow model that includes assumptions such as prepayment speeds, delinquencies, discount rates, and effects of changes in market interest rates. Refer to “Note 2, Basis of Presentation and Significant Accounting Policies” and “Note 5, Mortgage Servicing Rights” to our unaudited condensed consolidated financial statements included elsewhere in this prospectus and to “Note 2, Basis of Presentation and Significant Accounting Policies” and “Note 7, Mortgage Servicing Rights” to our audited consolidated financial statements included elsewhere in this prospectus. The change in the value of the MSR hedge is measured based on third party market values and cash settlement. Refer to “Note 14, Fair Value Measurements”, to our unaudited condensed consolidated financial statements included elsewhere in this prospectus and “Note 18, Fair Value Measurements” to our audited consolidated financial statements included elsewhere in this prospectus. We exclude changes in fair value of MSRs, net of hedge from Adjusted revenue as they add volatility and we believe that they are not indicative of the Company’s operating performance or results of operations. This adjustment does not include changes in fair value of MSRs due to realization of cash flows, which remain in Adjusted EBITDA. Realization of cash flows occurs when cash is collected as customers make scheduled payments, partial prepayments of principal, or pay their mortgage in full.
|
(b)
|
The income tax effect of change in fair value of MSR (due to inputs and assumptions), net of hedge is calculated as the MSR valuation change, net of hedge multiplied by the quotient of Income tax expense (benefit) divided by Income (loss) before income tax.
|
|
| |
Nine Months Ended September 30,
|
| |
|
| |
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
$ Change
|
| |
% Change
|
Gain on loans, net
|
| |
962,778
|
| |
135,495
|
| |
827,283
|
| |
610.6%
|
Loan fee income
|
| |
60,630
|
| |
19,829
|
| |
40,801
|
| |
205.8%
|
Interest income
|
| |
42,370
|
| |
35,101
|
| |
7,269
|
| |
20.7%
|
Interest expense
|
| |
(47,845)
|
| |
(41,933)
|
| |
(5,912)
|
| |
14.1%
|
Interest loss, net
|
| |
(5,475)
|
| |
(6,832)
|
| |
1,357
|
| |
19.9%
|
Loan servicing fees
|
| |
133,904
|
| |
104,089
|
| |
29,815
|
| |
28.6%
|
Change in fair value of mortgage servicing rights
|
| |
(230,524)
|
| |
(151,168)
|
| |
(79,356)
|
| |
52.5%
|
Other income
|
| |
1,022
|
| |
1,591
|
| |
(569)
|
| |
(35.8)%
|
Total net revenue
|
| |
922,335
|
| |
103,004
|
| |
819,331
|
| |
795.4%
|
|
| |
|
| |
|
| |
|
| |
|
Compensation and benefits
|
| |
251,462
|
| |
104,571
|
| |
146,891
|
| |
140.5%
|
Loan expense
|
| |
28,581
|
| |
10,182
|
| |
18,399
|
| |
180.7%
|
Loan servicing expense
|
| |
22,742
|
| |
15,781
|
| |
6,961
|
| |
44.1%
|
Occupancy and equipment
|
| |
17,006
|
| |
12,567
|
| |
4,439
|
| |
35.3%
|
General and administrative
|
| |
28,373
|
| |
14,687
|
| |
13,686
|
| |
93.2%
|
Depreciation and amortization
|
| |
4,222
|
| |
4,394
|
| |
(172)
|
| |
(3.9)%
|
Other expenses
|
| |
12,087
|
| |
2,770
|
| |
9,317
|
| |
336.4%
|
Total expenses
|
| |
364,473
|
| |
164,952
|
| |
199,521
|
| |
121.0%
|
|
| |
|
| |
|
| |
|
| |
|
Income (loss) before income tax
|
| |
557,862
|
| |
(61,948)
|
| |
619,810
|
| |
1,000.5%
|
Income tax expense (benefit)
|
| |
149,306
|
| |
(14,080)
|
| |
163,386
|
| |
1,160.4%
|
Income from equity method investment
|
| |
14,050
|
| |
2,591
|
| |
11,459
|
| |
442.3%
|
Total net income (loss)
|
| |
422,606
|
| |
(45,277)
|
| |
467,883
|
| |
1,033.4%
|
|
| |
Nine Months Ended September 30,
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
Gain on sales, net(a)
|
| |
$657,355
|
| |
$(37,127)
|
Origination of mortgage service rights
|
| |
352,118
|
| |
175,756
|
Change in fair value of loans held for sale, IRLCs, and related hedges
|
| |
301,173
|
| |
55,599
|
Realized and unrealized gain (loss) from derivative financial instruments
|
| |
(330,851)
|
| |
(56,569)
|
Provision for losses relating to representations and warranties
|
| |
(17,017)
|
| |
(2,164)
|
Gain on loans, net
|
| |
$962,778
|
| |
$135,495
|
(a)
|
The Gain on sales, net includes income related to originations of mortgage servicing rights.
|
Nine Months Ended September 30,
|
| |||||
(in thousands)
|
| |
2020
|
| |
2019
|
Origination volume
|
| |
38,045,886
|
| |
13,991,171
|
Originated MSR - UPB
|
| |
37,066,235
|
| |
12,678,916
|
Gain on sale margin(a)
|
| |
253.1
|
| |
96.8
|
Retained servicing (UPB)(b)
|
| |
99.2%
|
| |
96.2 %
|
(a)
|
Gain on sale margin represents the margin on loans sold, including the realized and unrealized gains and losses on sales of mortgage loans, as well as the changes in fair value of all loan-related derivatives, including interest rate lock commitments, freestanding loan-related derivatives, and representation and warranty reserve, and is calculated as the ratio of Gain on loans, net to the Sales volume UPB.
|
(b)
|
Represents the percentage of our loan sales UPBs for which we retained the underlying servicing UPB during the period.
|
|
| |
Nine Months Ended September 30,
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
Retained servicing fees, net of guarantees
|
| |
$135,813
|
| |
$101,138
|
Late fees and other
|
| |
(1,909)
|
| |
2,951
|
Loan servicing fees
|
| |
$133,904
|
| |
$104,089
|
|
| |
Nine Months Ended September 30,
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
MSR Servicing Portfolio - UPB
|
| |
$73,951,042
|
| |
$47,887,643
|
Average MSR Servicing Portfolio - UPB
|
| |
$63,275,795
|
| |
$44,655,734
|
MSR Servicing Portfolio – units
|
| |
307,236
|
| |
217,558
|
MSRs Fair Value Multiple (x)
|
| |
2.57x
|
| |
3.15x
|
Delinquency Rates (%)
|
| |
12.6%
|
| |
2.2%
|
Weighted average credit score
|
| |
734
|
| |
721
|
Weighted average servicing fee, net (bps)
|
| |
0.3
|
| |
0.3
|
|
| |
Nine Months Ended September 30,
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
Realization of cash flows
|
| |
$(132,222)
|
| |
$(66,241)
|
Valuation inputs and assumptions
|
| |
(211,667)
|
| |
(163,025)
|
Hedge
|
| |
113,365
|
| |
78,098
|
Change in fair value of MSRs
|
| |
(230,524)
|
| |
(151,168)
|
|
| |
Nine Months Ended September 30,
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
Interest income
|
| |
42,370
|
| |
35,101
|
Interest expense
|
| |
(47,845)
|
| |
(41,933)
|
Interest loss, net
|
| |
(5,475)
|
| |
(6,832)
|
•
|
Our Origination segment consists of a combination of retail and third-party loan production operations. The increase in revenues for the Origination segment was primarily driven by an increase in loan Origination volume.
|
•
|
Our Servicing segment consists of servicing loans the Company had initially originated and subsequently sold, for which the Company retained servicing rights as well as MSRs the Company occasionally purchases from others. The decrease in revenues for the Servicing segment was primarily driven by a decrease in interest rates.
|
|
| |
Nine Months Ended September 30,
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
Gain on loans, net
|
| |
962,778
|
| |
135,853
|
Loan fee income
|
| |
60,630
|
| |
19,788
|
Loan servings fees
|
| |
(1,982)
|
| |
(459)
|
Interest income
|
| |
1,804
|
| |
2,237
|
Change in FV of MSRs
|
| |
—
|
| |
—
|
Other income
|
| |
—
|
| |
—
|
Total Origination segment revenue
|
| |
1,023,230
|
| |
157,419
|
Directly attributable expense
|
| |
231,315
|
| |
97,041
|
Contribution margin
|
| |
791,915
|
| |
60,378
|
|
| |
Nine Months Ended September 30,
|
|||
($ in thousands)
|
| |
2020
|
| |
2019
|
Gain on loans, net
|
| |
$—
|
| |
$(358)
|
Loan servicing fees
|
| |
135,886
|
| |
104,548
|
Change in fair value of mortgage servicing rights
|
| |
(230,524)
|
| |
(151,168)
|
Interest income
|
| |
7,130
|
| |
13,255
|
Other income
|
| |
205
|
| |
4
|
Total Servicing segment revenue
|
| |
(87,303)
|
| |
(33,719)
|
Change in mortgage servicing rights due to valuation, net of hedge
|
| |
(98,302)
|
| |
(84,927)
|
Directly attributable expense
|
| |
42,664
|
| |
29,754
|
Contribution margin
|
| |
$(31,665)
|
| |
$21,454
|
|
| |
Year Ended December 31,
|
| |
|
| |
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
| |
$ Change
|
| |
% Change
|
Gain on loans, net
|
| |
$199,501
|
| |
$84,068
|
| |
$115,433
|
| |
137.3%
|
Loan fee income
|
| |
32,112
|
| |
19,603
|
| |
12,509
|
| |
64.0%
|
Interest income
|
| |
51,801
|
| |
35,179
|
| |
16,622
|
| |
47.2%
|
Interest expense
|
| |
(57,942)
|
| |
(47,486)
|
| |
(10,456)
|
| |
22.0%
|
Interest loss, net
|
| |
(6,141)
|
| |
(12,307)
|
| |
6,166
|
| |
-50.1%
|
Loan servicing fees
|
| |
144,228
|
| |
119,049
|
| |
25,179
|
| |
21.2%
|
Change in fair value of mortgage servicing rights
|
| |
(173,134)
|
| |
(47,312)
|
| |
(125,822)
|
| |
265.9%
|
Other income
|
| |
3,159
|
| |
1,156
|
| |
2,003
|
| |
173.3%
|
Total net revenue
|
| |
199,725
|
| |
164,257
|
| |
35,468
|
| |
21.6%
|
|
| |
|
| |
|
| |
|
| |
|
Compensation and benefits
|
| |
156,197
|
| |
109,577
|
| |
46,620
|
| |
42.5%
|
Loan expense
|
| |
15,626
|
| |
16,882
|
| |
(1,256)
|
| |
-7.4%
|
Loan servicing expense
|
| |
20,924
|
| |
18,488
|
| |
2,436
|
| |
13.2%
|
Occupancy and equipment
|
| |
16,768
|
| |
20,521
|
| |
(3,753)
|
| |
-18.3%
|
General and administrative
|
| |
21,407
|
| |
29,165
|
| |
(7,758)
|
| |
-26.6%
|
Depreciation and amortization
|
| |
5,918
|
| |
7,612
|
| |
(1,694)
|
| |
-22.3%
|
Other expenses
|
| |
4,296
|
| |
4,060
|
| |
236
|
| |
5.8%
|
Total expenses
|
| |
241,136
|
| |
206,305
|
| |
34,833
|
| |
16.9%
|
|
| |
|
| |
|
| |
|
| |
|
Loss from continuing operations before income tax
|
| |
(41,411)
|
| |
(42,048)
|
| |
637
|
| |
-1.5%
|
Income tax benefit from continuing operations
|
| |
(9,500)
|
| |
(10,485)
|
| |
985
|
| |
-9.4%
|
Income from equity method investments
|
| |
2,701
|
| |
209
|
| |
2,492
|
| |
1,192.3%
|
Net loss from continuing operations
|
| |
(29,210)
|
| |
(31,354)
|
| |
2,144
|
| |
-6.8%
|
Net income from discontinued operations before tax
|
| |
—
|
| |
9,707
|
| |
(9,707)
|
| |
N/M
|
Income tax provision from discontinued operations
|
| |
—
|
| |
2,550
|
| |
(2,550)
|
| |
N/M
|
Income from discontinued operations, net of tax
|
| |
—
|
| |
7,157
|
| |
(7,157)
|
| |
N/M
|
Total net loss
|
| |
$(29,210)
|
| |
$(24,197)
|
| |
$(5,013)
|
| |
20.7%
|
|
| |
Year Ended December 31,
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
Gain on sales, net(a)
|
| |
$209,261
|
| |
$80,536
|
Change in fair value of loans held for sale, IRLCs, and related hedges
|
| |
54,723
|
| |
(17,818)
|
Realized and unrealized gain (loss) from derivative financial instruments
|
| |
(60,290)
|
| |
22,717
|
Provision for losses relating to representations and warranties
|
| |
(4,193)
|
| |
(1,367)
|
Gain on loans, net
|
| |
$199,501
|
| |
$84,068
|
(a)
|
The Gain on sales, net includes income related to originations of mortgage servicing rights.
|
|
| |
Year Ended December 31,
|
|||
(in thousands)
|
| |
2019
|
| |
2018
|
Origination volume(a)
|
| |
22,267,593
|
| |
10,579,087
|
Originated MSR UPB
|
| |
20,484,918
|
| |
11,690,884
|
Gain on sale margin(a)(b)
|
| |
89.6
|
| |
79.5
|
Retained servicing (UPB)(c)
|
| |
96.8%
|
| |
97.4%
|
(a)
|
Origination volume excludes Origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(b)
|
Gain on sale margin represents the margin on loans sold, including the realized and unrealized gains and losses on sales of mortgage loans, as well as the changes in fair value of all loan-related derivatives, including interest rate lock commitments, freestanding loan-related derivatives, and representation and warranty reserve, and is calculated as the ratio of Gain on loans, net to the Sales volume UPB
|
(c)
|
Represents the percentage of our loan sales UPBs for which we retained the underlying servicing UPB during the period
|
|
| |
Year Ended December 31,
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
Retained servicing fees, net of guarantees
|
| |
$141,195
|
| |
$118,096
|
Late fees and other
|
| |
3,033
|
| |
953
|
Loan servicing fees
|
| |
$144,228
|
| |
$119,049
|
|
| |
Year Ended December 31,
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
MSR Servicing Portfolio (UPB)
|
| |
$52,600,546
|
| |
$41,423,825
|
Average MSR Servicing Portfolio (UPB)
|
| |
$47,012,186
|
| |
$37,037,889
|
MSR Servicing Portfolio (Loan Count)
|
| |
236,362
|
| |
189,513
|
MSRs Fair Value Multiple (x)
|
| |
3.4x
|
| |
4.3x
|
Delinquency Rates (%)
|
| |
3.5
|
| |
3.8
|
Weighted average credit score
|
| |
722
|
| |
721
|
Weighted average servicing fee, net (bps)
|
| |
0.3
|
| |
0.3
|
|
| |
Year Ended December 31,
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
Realization of cash flows
|
| |
$(98,650)
|
| |
(57,659)
|
Valuation inputs and assumptions
|
| |
(133,997)
|
| |
(9,903)
|
Hedge
|
| |
59,513
|
| |
20,250
|
Change in fair value of MSRs
|
| |
(173,134)
|
| |
(47,312)
|
|
| |
Year Ended December 31,
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
Interest income
|
| |
51,801
|
| |
35,179
|
Interest expense
|
| |
(57,942)
|
| |
(47,486)
|
Interest (loss), net
|
| |
(6,141)
|
| |
(12,307)
|
•
|
Our Origination segment consists of a combination of retail and third-party loan production operations. The increase in revenues for the Origination segment was primarily driven by an increase in loan Origination volume.
|
•
|
Our Servicing segment consists of servicing loans the Company had initially originated and subsequently sold, for which the Company retained servicing rights as well as MSRs the Company occasionally purchases from others. The decrease in revenues for the Servicing segment was primarily driven by a decrease in interest rates.
|
|
| |
Year Ended December 31,
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
Gain on loans, net
|
| |
$200,646
|
| |
$84,127
|
Loan fee income
|
| |
32,072
|
| |
18,462
|
Loan servings fees
|
| |
(846)
|
| |
—
|
Interest income
|
| |
2,697
|
| |
6,028
|
Other income
|
| |
—
|
| |
44
|
Total Origination segment revenue
|
| |
234,569
|
| |
108,661
|
Directly attributable expense
|
| |
145,113
|
| |
108,410
|
Contribution margin
|
| |
$89,456
|
| |
$251
|
|
| |
Year Ended December 31,
|
|||
($ in thousands)
|
| |
2019
|
| |
2018
|
Gain on loans, net(a)
|
| |
$(1,145)
|
| |
$(59)
|
Loan servicing fees
|
| |
145,074
|
| |
119,049
|
Change in fair value of mortgage servicing rights
|
| |
(173,134)
|
| |
(47,312)
|
Interest income
|
| |
18,883
|
| |
2,228
|
Other income
|
| |
13
|
| |
(98)
|
Total Servicing segment revenue
|
| |
(10,309)
|
| |
73,808
|
Change in mortgage servicing rights due to valuation, net of hedge
|
| |
(74,481)
|
| |
10,348
|
Directly attributable expense
|
| |
39,579
|
| |
37,280
|
Contribution margin
|
| |
$24,593
|
| |
$26,180
|
(a)
|
Gain on loans, net includes a loss on a prior sale of servicing that we reserved for the year ended December 31, 2019. For the year ended December 31, 2018, the loss is from a loss on GNMA note modifications completed by Servicing.
|
•
|
Borrowings, including under our warehouse funding facilities and other secured and unsecured financing facilities
|
•
|
Cash flow from our operations, including:
|
•
|
Sale of mortgage loans held for sale
|
•
|
Loan origination fees
|
•
|
Servicing fee income
|
•
|
Interest income on loans held for sale, and
|
•
|
Cash and marketable securities on hand
|
•
|
Origination of loans
|
•
|
Payment of interest expense
|
•
|
Repayment of debt
|
•
|
Payment of operating expenses, and
|
•
|
Changes in margin requirements for derivative contracts
|
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended December 31,
|
||||||
($ in thousands)
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Net cash (used in) provided by operating activities
|
| |
$(385,095)
|
| |
$(975,613)
|
| |
$(1,206,693)
|
| |
$262,832
|
Net cash (used in) provided by investing activities
|
| |
(9,914)
|
| |
(5,401)
|
| |
(10,608)
|
| |
149,281
|
Net cash provided by (used in) financing activities
|
| |
626,668
|
| |
986,606
|
| |
1,216,788
|
| |
(412,457)
|
Net increase (decrease) in Cash and cash equivalents and restricted cash
|
| |
231,659
|
| |
5,592
|
| |
(513)
|
| |
(344)
|
Cash and cash equivalents and restricted cash at end of period
|
| |
$313,390
|
| |
$87,836
|
| |
81,731
|
| |
82,244
|
($ in thousands)
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended December 31,
|
||||||
Cash flows from:
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Mortgage loans held for sale (at fair value)
|
| |
$51,131
|
| |
$(904,170)
|
| |
$(1,113,232)
|
| |
$380,500
|
Other operating sources
|
| |
(436,226)
|
| |
(71,443)
|
| |
(93,461)
|
| |
(117,668)
|
Net cash (used in) provided by operating activities
|
| |
(385,095)
|
| |
(975,613)
|
| |
(1,206,693)
|
| |
262,832
|
($ in thousands)
|
| |
Nine Months Ended
September 30,
|
| |
Year Ended December 31,
|
||||||
Cash flows from:
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
Warehouse borrowings
|
| |
$614,294
|
| |
$931,498
|
| |
1,073,946
|
| |
(521,784)
|
Other financing sources
|
| |
12,374
|
| |
55,108
|
| |
142,842
|
| |
109,327
|
Net cash provided by (used in) financing activities
|
| |
626,668
|
| |
986,606
|
| |
1,216,788
|
| |
(412,457)
|
($ in thousands)
|
| |
Total
|
| |
Less than
1 year
|
| |
1-3
years
|
| |
3-5
years
|
| |
More than
5 years
|
Term debt(a)
|
| |
366,708
|
| |
—
|
| |
366,708
|
| |
—
|
| |
—
|
Interest on long term debt
|
| |
52,673
|
| |
20,348
|
| |
32,325
|
| |
—
|
| |
—
|
Advance facilities(b)
|
| |
48,250
|
| |
48,250
|
| |
—
|
| |
—
|
| |
—
|
Warehouse facilities(b)
|
| |
1,478,183
|
| |
1,478,183
|
| |
—
|
| |
—
|
| |
—
|
Operating line of credit(b)
|
| |
10,000
|
| |
10,000
|
| |
—
|
| |
—
|
| |
—
|
Mortgage-backed securities forward trades
|
| |
3,350,161
|
| |
3,350,161
|
| |
|
| |
|
| |
|
Interest rate lock commitments
|
| |
3,171,868
|
| |
3,171,868
|
| |
|
| |
|
| |
|
Operating Leases(c)
|
| |
23,320
|
| |
7,512
|
| |
13,320
|
| |
2,488
|
| |
—
|
Total
|
| |
8,501,163
|
| |
8,086,322
|
| |
412,353
|
| |
2,488
|
| |
—
|
(a)
|
The rate used to estimate interest was the rate as of December 31, 2019. The rate is based on the LIBOR rate and there has been a significant decline in the rate in 2020 which is not reflected above. Term debt is net of debt issuance costs.
|
(b)
|
Interest expense on advance, warehouse facilities and operating lines of credit is not presented in this table due to the short-term nature of these facilities.
|
(c)
|
Payments due for our leases of office space and equipment expiring at various dates through 2025. The payments represent future minimum rental payments under the leases having an initial or remaining non-cancelable term in excess of one year.
|
(1)
|
Total origination volume excludes origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(2)
|
Origination volume figures used to calculate market share include $1.0 billion of Distributed Retail originations in our results of operations for the year ended December 31, 2018.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
•
|
provide us efficient access to both purchase and refinance transactions throughout market cycles;
|
•
|
benefit from the premise that in-market advisors will continue to be a cornerstone of the mortgage origination process;
|
•
|
are highly scalable and flexible; and
|
•
|
provide an optimized experience for our customers.
|
(1)
|
Total origination volume excludes origination volume from the Distributed Retail channel, which was included in discontinued operations in our results of operations for the year ended December 31, 2018.
|
(2)
|
Third Party Partners includes both Broker Partners and Correspondent Partners.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
Activation Rate by Broker Partner Cohort
|
| |
Wallet Share Growth by Broker Partner
Cohort Following Initial Onboarding
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
(1)
|
Third Party Partners includes both Broker Partners and Correspondent Partners.
|
(2)
|
Active broker market coverage is calculated as the total number of active brokers at Home Point divided by the total number of brokers in the market.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
*
|
LTM 3Q’20 represents the twelve months ended September 30, 2020.
|
(1)
|
Freddie Mac Primary Mortgage Market Survey, August 1, 2020. 50bps buffer represents an assumption on the cost of refinancing.
|
•
|
economies of scale: allows brokers to benefit from the scale of a larger organization while being able to run their business at a size that can be most responsive to their customers;
|
•
|
optimal choice: rather than needing to work with one originator, brokers have the ability to partner with multiple lenders to determine the best financing alternative for their customers; and
|
•
|
scalability of cost structure: reduce cost per loan and limited overhead.
|
•
|
the Real Estate Settlement Procedures Act and Regulation X, which (1) require certain disclosures to be made to the borrower at application, as to the lender’s good faith estimate of loan origination costs, and at closing with respect to the real estate settlement statement, (2) apply to certain loan servicing practices including escrow accounts, customer complaints, servicing transfers, lender-placed insurance, error resolution and loss mitigation, and (3) prohibit giving or accepting any fee, kickback or a thing of a thing of value for the referral of real estate settlement services;
|
•
|
The Truth In Lending Act, or TILA, Home Ownership and Equity Protection Act of 1994, and Regulation Z, which regulate mortgage loan origination activities, require certain disclosures be made to borrowers throughout the loan process regarding terms of mortgage financing, provide for a three-day right to rescind some transactions, regulate certain higher-priced and high-cost mortgages, require lenders to make a reasonable and good faith determination that consumers have the ability to repay the loan, mandate home ownership counseling for mortgage applicants, impose restrictions on loan originator compensation, and apply to certain loan servicing practices;
|
•
|
Regulation N, which prohibits certain unfair and deceptive acts and practices related to mortgage advertising;
|
•
|
certain provisions of the Dodd-Frank Act, including the Consumer Financial Protection Act, which, among other things, prohibit unfair, deceptive or abusive acts or practices;
|
•
|
the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, and Regulation V, which regulate the use and reporting of information related to the credit history of consumers, require disclosures to consumers regarding the use of credit report information in certain credit decisions and require lenders to undertake remedial actions if there is a breach in the lender’s data security;
|
•
|
the Equal Credit Opportunity Act and Regulation B, which prohibit discrimination on the basis of age, race and certain other characteristics in the extension of credit and require certain disclosures to applicants for credit;
|
•
|
the Homeowners Protection Act, which requires certain disclosures and the cancellation or termination of mortgage insurance once certain equity levels are reached;
|
•
|
the Home Mortgage Disclosure Act and Regulation C, which require reporting of loan origination data, including the number of loan applications taken, approved, denied and withdrawn;
|
•
|
the Fair Housing Act, which prohibits discrimination in housing on the basis of race, sex, national origin, and certain other characteristics;
|
•
|
the Fair Debt Collection Practices Act, which regulates the timing and content of third-party debt collection communications;
|
•
|
the Gramm-Leach-Bliley Act, which requires initial and periodic communication with consumers on privacy matters and the maintenance of privacy regarding certain consumer data in our possession;
|
•
|
the Bank Secrecy Act and related regulations from the Office of Foreign Assets Control, and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, or the USA PATRIOT Act, which impose certain due diligence and recordkeeping requirements on lenders to detect and block money laundering that could support terrorist or other illegal activities;
|
•
|
the Secure and Fair Enforcement for Mortgage Licensing Act, or the SAFE Act, which imposes state licensing requirements on mortgage loan originators;
|
•
|
the Military Lending Act, or MLA, which restricts, among other things, the interest rate and other terms that can be offered to active military personnel and their dependents on most types of consumer credit, requires certain disclosures and prohibits certain terms, such as mandatory arbitration if a dispute arises concerning the consumer credit product;
|
•
|
the Servicemembers Civil Relief Act, which provides financial protections for eligible service members;
|
•
|
the Federal Trade Commission Act, the FTC Credit Practices Rules and the FTC Telemarketing Sales Rule, which prohibit unfair or deceptive acts or practices and certain related practices;
|
•
|
the Telephone Consumer Protection Act, which restricts telephone and text solicitations and communications and the use of automatic telephone equipment;
|
•
|
the Electronic Signatures in Global and National Commerce Act, or ESIGN, and similar state laws, particularly the Uniform Electronic Transactions Act, or UETA, which require businesses that use electronic records or signatures in consumer transactions and provide required disclosures to consumers electronically, to obtain the consumer’s consent to receive information electronically;
|
•
|
the Electronic Fund Transfer Act of 1978, or EFTA, and Regulation E, which protect consumers engaging in electronic fund transfers;
|
•
|
the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 and the FTC’s rules promulgated pursuant to such Act, or the CAN-SPAM Act, which establish requirements for certain “commercial messages” and “transactional or relationship messages” transmitted via email; and
|
•
|
the Bankruptcy Code and bankruptcy injunctions and stays, which can restrict collection of debts.
|
•
|
loss of our licenses and approvals to engage in our servicing and lending businesses;
|
•
|
governmental investigations and enforcement actions;
|
•
|
administrative fines and penalties and litigation;
|
•
|
civil and criminal liability, including class action lawsuits and actions to recover incentive and other payments made by governmental entities;
|
•
|
breaches of covenants and representations resulting in defaults and cross-defaults under our servicing and trade agreements and financing arrangements;
|
•
|
damage to our reputation;
|
•
|
inability to obtain new financing and maintain existing financing;
|
•
|
inability to raise capital; or
|
•
|
inability to execute on our business strategy.
|
Name
|
| |
Age
|
| |
Position
|
William A. Newman
|
| |
56
|
| |
Director, President and Chief Executive Officer
|
Mark E. Elbaum
|
| |
58
|
| |
Chief Financial Officer
|
Maria N. Fregosi
|
| |
55
|
| |
Chief Investment Officer
|
Phillip R. Shoemaker Jr.
|
| |
41
|
| |
President of Originations
|
Phillip M. Miller
|
| |
51
|
| |
Chief Operating Officer
|
Brian R. Ludtke
|
| |
53
|
| |
Chief Administrative Officer and Corporate Secretary
|
Perry Hilzendeger
|
| |
53
|
| |
President of Servicing
|
Laurie S. Goodman
|
| |
65
|
| |
Director Nominee*
|
Agha S. Khan
|
| |
41
|
| |
Director
|
Stephen A. Levey
|
| |
46
|
| |
Director
|
Timothy R. Morse
|
| |
51
|
| |
Director Nominee*
|
Eric L. Rosenzweig
|
| |
38
|
| |
Director
|
*
|
To be elected to the board upon or before the consummation of this offering.
|
•
|
any breach of the director’s duty of loyalty to us or our stockholders;
|
•
|
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
|
•
|
unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or
|
•
|
any transaction from which the director derived an improper personal benefit.
|
•
|
selecting, evaluating, compensating and overseeing the independent registered public accounting firm;
|
•
|
overseeing our financial reporting activities and the accounting standards and principles followed;
|
•
|
reviewing and discussing with management and the independent auditor, as appropriate, the effectiveness of our internal control over financial reporting;
|
•
|
as required by the listing standards of NASDAQ, reviewing our major financial risk exposures (and the steps management has taken to monitor and control these risks) and our risk assessment and risk management practices and the guidelines, policies and processes for risk assessment and risk management;
|
•
|
approving audit and non-audit services provided by the independent registered public accounting firm;
|
•
|
reviewing and, if appropriate, approving or ratifying transactions with related persons required to be disclosed under SEC rules;
|
•
|
meeting with management and the independent registered public accounting firm to review and discuss our financial statements and other matters;
|
•
|
overseeing our internal audit function, including reviewing its organization, performance and audit findings, and reviewing our internal controls;
|
•
|
monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
|
•
|
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal controls, auditing or compliance matters;
|
•
|
reviewing proposed waivers of the code of conduct for directors and executive officers; and
|
•
|
reviewing the audit committee charter and the committee’s performance at least annually.
|
•
|
will serve as the chairperson of the audit committee. We believe that will qualify as independent directors according to the rules and regulations of the SEC and the listing rules of NASDAQ with respect to audit committee membership. Not later than the first anniversary of the effectiveness of the registration statement, all members of the audit committee will be independent.
|
•
|
select, or recommend that our board of directors select, the director nominees to stand for election at each annual general meeting of our stockholders or to fill vacancies on our board of directors;
|
•
|
develop and recommend to our board of directors a set of corporate governance guidelines applicable to us and monitor compliance with such guidelines; and
|
•
|
oversee the annual performance evaluation of our board of directors (and any committees thereof) and management.
|
•
|
review and approve, or recommend to the full board of directors, the goals and objectives relating to the compensation of our executive officers, including any long-term incentive components of our compensation programs;
|
•
|
evaluate the performance of our executive officers in light of the goals and objectives of our compensation programs and approve, or recommend to the full board of directors, each executive officer’s compensation based on such evaluation;
|
•
|
oversee the evaluation of each of our executive officers’ performance;
|
•
|
review and approve, or recommend to the full board of directors, subject, if applicable, to stockholder approval, our compensation programs;
|
•
|
review the operation and efficacy of our executive compensation programs in light of their goals and objectives;
|
•
|
review and assess risks arising from our compensation programs;
|
•
|
periodically review that our executive compensation programs comport with the compensation committee’s stated compensation philosophy;
|
•
|
review our management succession planning;
|
•
|
review and recommend to the board of directors the appropriate structure and amount of compensation for our directors;
|
•
|
establish and periodically review policies for the administration of our equity compensation plans; and
|
•
|
review the adequacy of the compensation committee and its charter and recommend any proposed changes to the board of directors not less than annually.
|
Name and Principal
Position
|
| |
Year
|
| |
Salary
($)(1)
|
| |
Bonus
($)(2)
|
| |
Option
Awards
($)(3)
|
| |
Non-Equity
Incentive Plan
Compensation
($)
|
| |
All Other
Compensation
($)
|
| |
Total ($)
|
William Newman
President and Chief Executive Officer
|
| |
2020
|
| |
400,000
|
| |
1,125,000
|
| |
—
|
| |
—
|
| |
—
|
| |
1,525,000
|
Maria Fregosi
Chief Investment Officer(4)
|
| |
2020
|
| |
350,000
|
| |
223,500
|
| |
—
|
| |
—
|
| |
—
|
| |
573,500
|
Phil Shoemaker
President of Originations
|
| |
2020
|
| |
375,000
|
| |
120,000
|
| |
—
|
| |
—
|
| |
—
|
| |
495,000
|
(1)
|
The amounts reported represent the named executive officer’s base salary earned during the fiscal year covered.
|
(2)
|
The amounts reported represent the 2020 Special Bonuses in an amount equal to: $1,125,000 for Mr. Newman, $223,500 for Ms. Fregosi and $125,000 for Mr. Shoemaker. See “—Special Bonus Agreement” below. The named executive officers are also eligible to receive a discretionary bonus based on fiscal 2020 performance. We expect that such bonuses will be determined and paid in March 2021.
|
(3)
|
The amounts reported represent the aggregate grant-date fair value of performance-vesting options awarded to the named executive officer in 2020, calculated in accordance with FASB ASC Topic 718 (“Topic 718”), utilizing the assumptions discussed in Note 20 – Stock Options, to our consolidated financial statements included elsewhere in this prospectus. The performance-vesting options are subject to market conditions and an implied performance condition as defined under applicable accounting standards. The grant date fair value of the performance-vesting options was computed based upon the probable outcome of the performance conditions as of the grant date in accordance with Topic 718. Achievement of the performance conditions for the performance-vesting options was not deemed probable on the grant date and, accordingly, no value is included in the table for these awards pursuant to the SEC’s disclosure rules. Assuming achievement of the performance conditions, the aggregate grant date fair values of the performance-vesting options granted in fiscal 2020 to each of our named executive officers would have been: Mr. Newman ($342,322); Ms. Fregosi ($224,757); and Mr. Shoemaker ($273,857).
|
(4)
|
Until December 2020, Ms. Fregosi served as our Chief Financial Officer.
|
•
|
A portion of the special incentive bonus was paid to each of the named executive officers on October 9, 2020 (the “2020 Special Bonus”).
|
•
|
A portion of the special incentive bonus will be paid to Ms. Fregosi and Mr. Shoemaker in equal installments on the first payroll date after the end of each fiscal quarter of the Company beginning on December 31, 2020 and continuing until December 31, 2023 (the “Time-Vesting Bonus”).
|
•
|
A portion of the special incentive bonus will be paid to each of the named executive officers upon the consummation of a “sponsor exit transaction” or a “public offering” (each as defined in the 2015 Option Plan), subject to the satisfaction of specified transfer and financial targets in connection with the sponsor exit transaction or public offering (the “Performance-Vesting Bonus”).
|
Executive
|
| |
2020
Special
Bonus
($)
|
| |
Time-
Vesting
Bonus
($)
|
| |
Performance-
Vesting Bonus
($)
|
| |
Total
Special
Incentive
Bonus
($)
|
William Newman
|
| |
1,125,000
|
| |
—
|
| |
1,875,000
|
| |
3,000,000
|
Maria Fregosi
|
| |
223,500
|
| |
76,500
|
| |
600,000
|
| |
900,000
|
Phil Shoemaker
|
| |
120,000
|
| |
480,000
|
| |
1,200,000
|
| |
1,800,000
|
|
| |
Number of
Substitute
Options
(#)
|
| |
Exercise
Price
($)
|
William Newman
|
| |
|
| |
|
Maria Fregosi
|
| |
|
| |
|
Phil Shoemaker
|
| |
|
| |
|
•
|
50% of the common units granted pursuant to each option are “time-vesting options,” which generally vest in annual installments over the first five years of the grant date, except that all unvested time-vesting options vest on a “sponsor exit transaction” (as defined in the 2015 Option Plan); and
|
•
|
50% of the common units granted pursuant to the options are “performance-vesting options” that vest only upon the consummation of a “sponsor exit transaction” (as defined in the 2015 Option Plan) or certain initial public offerings of equity securities of Holdings or any of its subsidiaries pursuant to an effective registration statement under the Securities Act (a “public offering”) and only if specified transfer and financial targets are satisfied. For substitute options, sales of our common stock by the Sponsor Partners (as defined in the 2015 Option Plan) after this offering will also be included in determining whether a sponsor exit transaction has occurred, and the financial targets will be tested once the Sponsor Partners have sold at least 50% of their common units of Holdings (or shares of our common stock into which such common units have been converted in connection with the merger and this offering) and at each subsequent sale by the Sponsor Partners.
|
|
| |
Option Awards
|
|||||||||||||||
Name
|
| |
Date of
Grant
|
| |
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1)
|
| |
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(2)
|
| |
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)(3)
|
| |
Option
Exercise
Price
($)
|
| |
Option
Expiration
Date
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
William Newman
|
| |
4/1/15
|
| |
375,000
|
| |
—
|
| |
375,000
|
| |
10.00
|
| |
4/1/25
|
|
2/28/20
|
| |
—
|
| |
—
|
| |
250,000
|
| |
10.50
|
| |
2/28/30
|
||
Maria Fregosi
|
| |
4/1/15
|
| |
62,500
|
| |
—
|
| |
62,500
|
| |
10.00
|
| |
4/1/25
|
|
2/16/16
|
| |
5,000
|
| |
—
|
| |
5,000
|
| |
10.00
|
| |
2/16/26
|
||
|
4/16/18
|
| |
3,000
|
| |
4,500
|
| |
7,500
|
| |
10.46
|
| |
4/16/28
|
||
|
12/5/18
|
| |
10,000
|
| |
15,000
|
| |
25,000
|
| |
10.25
|
| |
12/5/28
|
||
|
2/28/20
|
| |
—
|
| |
—
|
| |
50,000
|
| |
10.50
|
| |
2/28/30
|
||
|
6/15/20
|
| |
—
|
| |
—
|
| |
50,000
|
| |
10.50
|
| |
6/15/30
|
||
Phil Shoemaker
|
| |
12/5/18
|
| |
80,000
|
| |
120,000
|
| |
200,000
|
| |
10.25
|
| |
12/5/28
|
|
2/28/20
|
| |
—
|
| |
—
|
| |
200,000
|
| |
10.50
|
| |
2/28/30
|
(1)
|
The numbers in this column represent vested and exercisable time-vesting options.
|
(2)
|
The numbers in this column represent unvested outstanding time-vesting options.
|
(3)
|
The numbers in this column represent unvested outstanding performance-vesting options. The vesting terms of these options are described above under “Narrative Disclosure to Summary Compensation Table.”
|
|
| |
Shares of common stock
beneficially owned prior to
this offering
|
| |
|
| |
Shares of common stock
beneficially owned after this
offering assuming no exercise
of underwriters’ option
|
| |
Shares of common stock
beneficially owned after this
offering assuming full exercise
of underwriters’ option
|
|||||||||
Name of Beneficial Owners(1)
|
| |
Shares of
common
stock
|
| |
Percentage
of Total
Outstanding
Common
Stock (%)
|
| |
Number of
Shares
Being Sold
in this
Offering
|
| |
Shares of
common
stock
|
| |
Percentage of
Total
Outstanding
Common
Stock (%)
|
| |
Shares of
common
stock
|
| |
Percentage
of Total
Outstanding
Common
Stock (%)
|
Greater than 5% Stockholders
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Trident Stockholders(2)
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Named Executive Officers
|
| ||||||||||||||||||||
William A. Newman
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
Maria N. Fregosi
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
Phillip R. Shoemaker Jr.
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Directors and Director Nominees
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Laurie S. Goodman(3)
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
Agha S. Khan
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
Stephen A. Levey
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
Timothy R. Morse(3)
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
Eric L. Rosenzweig
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Directors, Director Nominees and Executive Officers as a group ( persons)
|
| |
|
| |
%
|
| |
|
| |
|
| |
%
|
| |
|
| |
%
|
*
|
Less than 1% of common stock outstanding.
|
(1)
|
Unless otherwise indicated below, the address of each of the individuals named above is: c/o Home Point Capital Inc., 2211 Old Earhart Road, Suite 250, Ann Arbor, Michigan 48105.
|
(2)
|
Following the consummation of this offering, Trident VI, L.P. (“Trident VI”), Trident VI Parallel Fund, L.P. (“Trident VI Parallel”), Trident VI DE Parallel Fund, L.P. (“Trident VI DE”) and Trident VI Professionals Fund, L.P. (“Trident VI Professionals”) will hold shares of our common stock. Each of Trident VI, Trident VI Parallel, Trident VI DE and Trident VI Professionals and each of their respective general partners, as well as Stone Point Capital, the manager of Trident VI, Trident VI Parallel, Trident VI DE and Trident VI Professionals, also may be deemed to be the beneficial owners having shared voting power and shared investment power over the securities described in this footnote. Agha S. Khan, Stephen A. Levey and Eric L. Rosenzweig, each of whom is a member of our Board, are employees of Stone Point Capital. The principal business address of each of the entities identified in this footnote is c/o Stone Point Capital LLC, 20 Horseneck Lane, Greenwich, CT 06830.
|
(3)
|
To be elected to the board upon or before the consummation of this offering.
|
•
|
the designation of the series;
|
•
|
the number of shares of the series, which our board of directors may, except where otherwise provided in the preferred stock designation, increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding);
|
•
|
whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;
|
•
|
the dates at which dividends, if any, will be payable;
|
•
|
the redemption rights and price or prices, if any, for shares of the series;
|
•
|
the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;
|
•
|
the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Company;
|
•
|
whether the shares of the series will be convertible into shares of any other class or series, or any other security, of the Company or any other corporation and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made;
|
•
|
restrictions on the issuance of shares of the same series or of any other class or series; and
|
•
|
the voting rights, if any, of the holders of the series.
|
•
|
prior to such time, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
•
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least % of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or
|
•
|
at or subsequent to that time, the business combination is approved by our board of directors and by the affirmative vote of holders of at least 66 2⁄3% of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
the provision requiring a 66 2/3% supermajority vote for stockholders to amend our amended and restated bylaws;
|
•
|
the provisions providing for a classified board of directors (the election and term of our directors);
|
•
|
the provisions regarding resignation and removal of directors;
|
•
|
the provisions regarding competition and corporate opportunities;
|
•
|
the provisions regarding entering into business combinations with interested stockholders;
|
•
|
the provisions regarding stockholder action by written consent;
|
•
|
the provisions regarding calling special meetings of stockholders;
|
•
|
the provisions regarding filling vacancies on our board of directors and newly created directorships;
|
•
|
the provisions eliminating monetary damages for breaches of fiduciary duty by a director; and
|
•
|
the amendment provision requiring that the above provisions be amended only with a 66 2/3% supermajority vote.
|
•
|
1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering; or
|
•
|
the average reported weekly trading volume of our common stock on NASDAQ during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.
|
•
|
an individual citizen or resident of the United States;
|
•
|
a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
•
|
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
|
•
|
a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons as defined under the Code, have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.
|
•
|
the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder);
|
•
|
the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or
|
•
|
we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes, at any time within the five-year period preceding the disposition or the non-U.S. holder’s holding period, which period is shorter and certain other conditions are met.
|
Underwriter
|
| |
Number of Shares
|
Goldman Sachs & Co. LLC
|
| |
|
Wells Fargo Securities, LLC
|
| |
|
Morgan Stanley & Co. LLC
|
| |
|
UBS Securities LLC
|
| |
|
Credit Suisse Securities (USA) LLC
|
| |
|
J.P. Morgan Securities LLC
|
| |
|
BofA Securities, Inc.
|
| |
|
JMP Securities LLC
|
| |
|
Piper Sandler & Co.
|
| |
|
R. Seelaus & Co., LLC
|
| |
|
SPC Capital Markets LLC
|
| |
|
Wedbush Securities Inc.
|
| |
|
Zelman Partners LLC
|
| |
|
Total
|
| |
|
|
| |
No Exercise
|
| |
Full Exercise
|
Per Share
|
| |
$
|
| |
$
|
Total
|
| |
$
|
| |
$
|
|
| |
No Exercise
|
| |
Full Exercise
|
Per Share
|
| |
$
|
| |
$
|
Total
|
| |
$
|
| |
$
|
(a)
|
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
|
(b)
|
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation); or
|
(c)
|
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
|
(a)
|
to any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation;
|
(b)
|
to fewer than 150 natural or legal persons (other than qualified investors as defined in Article 2 of the UK Prospectus Regulation); or
|
(c)
|
in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000 (“FSMA”),
|
•
|
does not constitute a disclosure document or a prospectus under Chapter 6D.2 of the Corporations Act 2001 (Cth) (the “Corporations Act”);
|
•
|
has not been, and will not be, lodged with the Australian Securities and Investments Commission (“ASIC”), as a disclosure document for the purposes of the Corporations Act and does not purport to include the information required of a disclosure document for the purposes of the Corporations Act; and
|
•
|
may only be provided in Australia to select investors who are able to demonstrate that they fall within one or more of the categories of investors, available under section 708 of the Corporations Act (“Exempt Investors”).
|
|
| |
September 30, 2020
(unaudited)
|
| |
Pro forma
September 30,
2020
(unaudited)
|
| |
December 31,
2019
|
Assets:
|
| |
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$271,483
|
| |
|
| |
$30,630
|
Restricted cash
|
| |
41,907
|
| |
|
| |
51,101
|
Cash and cash equivalents and Restricted cash
|
| |
313,390
|
| |
|
| |
81,731
|
Mortgage loans held for sale (at fair value)
|
| |
2,281,835
|
| |
|
| |
1,554,230
|
Mortgage servicing rights (at fair value)
|
| |
583,263
|
| |
|
| |
575,035
|
Property and equipment, net
|
| |
18,595
|
| |
|
| |
12,051
|
Accounts receivable, net
|
| |
79,320
|
| |
|
| |
57,872
|
Derivative assets
|
| |
314,794
|
| |
|
| |
40,544
|
Goodwill and intangibles
|
| |
11,083
|
| |
|
| |
11,935
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
|
| |
499,207
|
Other assets
|
| |
65,745
|
| |
|
| |
76,162
|
Total assets
|
| |
$6,587,906
|
| |
|
| |
$2,908,767
|
Liabilities and Shareholders’ Equity:
|
| |
|
| |
|
| |
|
Liabilities:
|
| |
|
| |
|
| |
|
Warehouse lines of credit
|
| |
$2,092,477
|
| |
|
| |
$1,478,183
|
Term debt and other borrowings, net
|
| |
374,090
|
| |
|
| |
424,958
|
Accounts payable and accrued expenses
|
| |
269,016
|
| |
|
| |
39,739
|
GNMA loans eligible for repurchase
|
| |
2,919,881
|
| |
|
| |
499,207
|
Other liabilities
|
| |
189,700
|
| |
|
| |
56,368
|
Total liabilities
|
| |
$5,845,164
|
| |
|
| |
$2,498,455
|
Commitments and Contingencies (Note 11)
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
Shareholders’ Equity:
|
| |
|
| |
|
| |
|
Common stock (100 shares issued and outstanding, par value $0.01 per share)
|
| |
—
|
| |
|
| |
—
|
Additional paid-in capital
|
| |
519,177
|
| |
|
| |
454,861
|
Retained earnings (accumulated deficit)
|
| |
223,565
|
| |
|
| |
(44,549)
|
Total shareholders' equity
|
| |
742,742
|
| |
|
| |
410,312
|
Total liabilities and shareholders' equity
|
| |
$6,587,906
|
| |
|
| |
$2,908,767
|
|
| |
Nine months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Revenue:
|
| |
|
| |
|
Gain on loans, net
|
| |
$962,778
|
| |
$135,495
|
Loan fee income
|
| |
60,630
|
| |
19,829
|
Interest income
|
| |
42,370
|
| |
35,101
|
Interest expense
|
| |
(47,845)
|
| |
(41,933)
|
Interest loss, net
|
| |
(5,475)
|
| |
(6,832)
|
Loan servicing fees
|
| |
133,904
|
| |
104,089
|
Change in fair value of mortgage servicing rights
|
| |
(230,524)
|
| |
(151,168)
|
Other income
|
| |
1,022
|
| |
1,591
|
Total net revenue
|
| |
$922,335
|
| |
$103,004
|
Expenses:
|
| |
|
| |
|
Compensation and benefits
|
| |
251,462
|
| |
104,571
|
Loan expense
|
| |
28,581
|
| |
10,182
|
Loan servicing expense
|
| |
22,742
|
| |
15,781
|
Occupancy and equipment
|
| |
17,006
|
| |
12,567
|
General and administrative
|
| |
28,373
|
| |
14,687
|
Depreciation and amortization
|
| |
4,222
|
| |
4,394
|
Other expenses
|
| |
12,087
|
| |
2,770
|
Total expenses
|
| |
$364,473
|
| |
$164,952
|
Income (loss) before income tax
|
| |
557,862
|
| |
(61,948)
|
Income tax expense (benefit)
|
| |
149,306
|
| |
(14,080)
|
Income from equity method investment
|
| |
14,050
|
| |
2,591
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
|
| |
|
| |
|
Basic and diluted loss earnings per share:
|
| |
|
| |
|
Basic and diluted total net income (loss) per share
|
| |
$4,226
|
| |
$(453)
|
|
| |
Common Stock
|
| |
Additional
Paid in Capital
|
| |
Retained
Earnings
(Accumulated
Deficit)
|
| |
Total
Shareholders’
Equity
|
|||
|
| |
Shares
|
| |
Amount
|
| ||||||||
Ending balance, December 31, 2018
|
| |
100
|
| |
—
|
| |
$454,110
|
| |
$(15,339)
|
| |
$438,771
|
Stock based compensation
|
| |
—
|
| |
—
|
| |
534
|
| |
—
|
| |
534
|
Net loss
|
| |
—
|
| |
—
|
| |
—
|
| |
(45,277)
|
| |
(45,277)
|
Ending balance, September 30, 2019
|
| |
100
|
| |
—
|
| |
$454,644
|
| |
$(60,616)
|
| |
$394,028
|
Ending balance, December 31, 2019
|
| |
100
|
| |
—
|
| |
$454,861
|
| |
$(44,549)
|
| |
$410,312
|
Capital contributions from parent
|
| |
—
|
| |
—
|
| |
63,774
|
| |
—
|
| |
63,774
|
Cash dividends declared
|
| |
—
|
| |
—
|
| |
—
|
| |
(154,492)
|
| |
(154,492)
|
Stock based compensation
|
| |
—
|
| |
—
|
| |
542
|
| |
—
|
| |
542
|
Net income
|
| |
—
|
| |
—
|
| |
—
|
| |
422,606
|
| |
422,606
|
Ending balance, September 30, 2020
|
| |
100
|
| |
—
|
| |
$519,177
|
| |
$223,565
|
| |
$742,742
|
|
| |
Nine months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Operating activities:
|
| |
|
| |
|
Net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
Adjustments to reconcile net income (loss) to cash used in operating activities:
|
| |
|
| |
|
Depreciation
|
| |
3,370
|
| |
2,779
|
Amortization of intangible assets
|
| |
852
|
| |
1,615
|
Amortization of debt issuance costs
|
| |
531
|
| |
5,669
|
Gain on loans, net
|
| |
(962,778)
|
| |
(135,495)
|
Provision for representation and warranty reserve
|
| |
10,025
|
| |
900
|
Stock based compensation expense
|
| |
542
|
| |
534
|
Deferred income tax
|
| |
133,645
|
| |
(15,046)
|
Gain on equity investment
|
| |
(14,050)
|
| |
(2,591)
|
Origination of mortgage loans held for sale
|
| |
(38,534,747)
|
| |
(14,735,416)
|
Proceeds on sale and payments from mortgage loans held for sale
|
| |
38,585,878
|
| |
13,831,246
|
Change in fair value of mortgage servicing rights
|
| |
230,524
|
| |
151,168
|
Change in fair value of mortgage loans held for sale
|
| |
(54,709)
|
| |
(31,013)
|
Change in fair value of derivative assets
|
| |
(274,250)
|
| |
(31,340)
|
Changes in operating assets and liabilities:
|
| |
|
| |
|
Increase in accounts receivable, net
|
| |
(21,448)
|
| |
(2,518)
|
Decrease in other assets
|
| |
3,798
|
| |
705
|
Increase in accounts payable and accrued expenses
|
| |
74,787
|
| |
11,081
|
Increase in other liabilities
|
| |
10,329
|
| |
17,386
|
Net cash used in operating activities
|
| |
$(385,095)
|
| |
$(975,613)
|
|
| |
|
| |
|
Investing activities:
|
| |
|
| |
|
Purchases of property and equipment, net of disposals
|
| |
(9,914)
|
| |
(3,633)
|
Equity method investment
|
| |
|
| |
5
|
Business acquisitions, net of cash acquired
|
| |
|
| |
(1,773)
|
Net cash used in investing activities
|
| |
$(9,914)
|
| |
$(5,401)
|
|
| |
|
| |
|
Financing activities:
|
| |
|
| |
|
Proceeds from warehouse borrowings
|
| |
38,381,219
|
| |
14,697,210
|
Payments on warehouse borrowings
|
| |
(37,766,925)
|
| |
(13,765,712)
|
Proceeds from term debt borrowings
|
| |
47,600
|
| |
309,000
|
Payments on term debt borrowings
|
| |
(60,000)
|
| |
(245,156)
|
Proceeds from other borrowings
|
| |
64,500
|
| |
159,600
|
Payments on other borrowings
|
| |
(103,500)
|
| |
(166,000)
|
Payments of debt issuance costs
|
| |
|
| |
(2,336)
|
Capital contributions from parent
|
| |
63,774
|
| |
—
|
Net cash provided by financing activities
|
| |
626,668
|
| |
986,606
|
Net increase in cash, cash equivalents and restricted cash
|
| |
$231,659
|
| |
$5,592
|
Cash, cash equivalents and restricted cash at beginning of period
|
| |
81,731
|
| |
82,244
|
Cash, cash equivalents and restricted cash at end of period
|
| |
$313,390
|
| |
$87,836
|
Supplemental disclosure:
|
| |
|
| |
|
Cash paid for interest
|
| |
46,715
|
| |
35,054
|
Cash paid for taxes
|
| |
22,034
|
| |
966
|
1.
|
All of Platinum Mortgage, Inc.’s rights and ownership in certain tangible and intangible property, including but not limited to information, books, and records of the Platinum Mortgage, Inc. such as filers, invoices, credit and sales records, personnel records, and all agreements to which Platinum Mortgage, Inc. is a party and identified as material contracts;
|
2.
|
Employees, including underwriters, closers, account managers, administrative staff;
|
3.
|
Building lease and all related facilities contracts;
|
4.
|
Retained assets, including office furniture and computer equipment.
|
Fair value of assets acquired:
|
| |
|
Fixed assets
|
| |
$93
|
Consideration transferred:
|
| |
|
Cash
|
| |
124
|
Earnout
|
| |
1,648
|
|
| |
$1,772
|
Goodwill
|
| |
$1,679
|
|
| |
September 30, 2020
|
||||||
|
| |
Unpaid
Principal
|
| |
Fair Value
Adjustment
|
| |
Total
Fair Value
|
Conventional(1)
|
| |
$1,479,984
|
| |
$66,285
|
| |
$1,546,269
|
Government(2)
|
| |
699,775
|
| |
35,599
|
| |
735,374
|
Reverse(3)
|
| |
275
|
| |
(83)
|
| |
192
|
Total
|
| |
$2,180,034
|
| |
$101,801
|
| |
$2,281,835
|
(1)
|
Conventional includes FNMA and FHLMC mortgage loans.
|
(2)
|
Government includes GNMA mortgage loans (including Federal Housing Administration, Department of Veterans Affairs, and United States Department of Agriculture).
|
(3)
|
Reverse loan presented in Mortgage loans held for sale on the condensed consolidated balance sheets as a result of a repurchase
|
|
| |
December 31, 2019
|
||||||
|
| |
Unpaid
Principal
|
| |
Fair Value
Adjustment
|
| |
Total
Fair Value
|
Conventional(1)
|
| |
$454,225
|
| |
$8,787
|
| |
$463,012
|
Government(2)
|
| |
1,052,638
|
| |
38,388
|
| |
1,091,026
|
Reverse(3)
|
| |
275
|
| |
(83)
|
| |
192
|
Total
|
| |
$1,507,138
|
| |
$47,092
|
| |
$1,554,230
|
(1)
|
Conventional includes FNMA and FHLMC mortgage loans.
|
(2)
|
Government includes GNMA mortgage loans (including Federal Housing Administration, Department of Veterans Affairs and United States Department of Agriculture).
|
(3)
|
Reverse loan presented in Mortgage loans held for sale on the condensed consolidated balance sheets as a result of a repurchase
|
|
| |
Nine Months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Fair value at beginning of period
|
| |
$1,554,230
|
| |
$421,754
|
Mortgage loans originated and purchased(1)
|
| |
38,534,747
|
| |
14,735,416
|
Proceeds on sales and payments received(1)
|
| |
(38,585,878)
|
| |
(13,831,246)
|
Change in fair value
|
| |
54,709
|
| |
31,013
|
Gain on loans(2)
|
| |
724,027
|
| |
37,837
|
Fair value at end of period
|
| |
$2,281,835
|
| |
$1,394,774
|
(1)
|
This line as presented on the condensed consolidated statements of cash flows for the nine months ended September 30, 2019, excludes the portion related to HPMAC, which is included in Business acquisitions within Investing activities. The portion related to HPMAC is recorded on Business acquisitions, net of cash acquired line. This schedule contains HPMAC.
|
(2)
|
This line as presented on the condensed consolidated statements of cash flows excludes OMSR and MSR hedging.
|
|
| |
Nine Months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Balance at beginning of period
|
| |
$575,035
|
| |
$532,526
|
MSRs originated
|
| |
352,118
|
| |
175,756
|
Changes in valuation model inputs
|
| |
(211,668)
|
| |
(163,026)
|
Change in cash payoffs and principal amortization
|
| |
(132,222)
|
| |
(66,240)
|
Balance at end of period
|
| |
$583,263
|
| |
$479,016
|
|
| |
|
| |
|
|
| |
September 30,
2020
|
| |
December 31,
2019
|
Ginnie Mae
|
| |
$26,319,278
|
| |
$24,611,487
|
Fannie Mae
|
| |
29,140,239
|
| |
14,895,853
|
Freddie Mac
|
| |
18,432,195
|
| |
13,021,778
|
Other
|
| |
59,330
|
| |
71,428
|
Total mortgage servicing portfolio
|
| |
$73,951,042
|
| |
$52,600,546
|
MSR balance
|
| |
$583,263
|
| |
$575,035
|
MSR balance as % of unpaid mortgage principal balance
|
| |
0.79%
|
| |
1.09%
|
|
| |
Discount Rate
|
| |
Prepayment Speeds
|
||||||
|
| |
100 BPS
Adverse Change
|
| |
200 BPS
Adverse Change
|
| |
10% Adverse
Change
|
| |
20% Adverse
Change
|
September 30, 2020
|
| |
|
| |
|
| |
|
| |
|
HPF Portfolio
|
| |
$(19,124)
|
| |
$(36,901)
|
| |
$(37,208)
|
| |
$(70,451)
|
HPMAC Portfolio
|
| |
(27)
|
| |
(51)
|
| |
(59)
|
| |
(112)
|
December 31, 2019
|
| |
|
| |
|
| |
|
| |
|
HPF Portfolio
|
| |
$(20,938)
|
| |
$(40,288)
|
| |
$(29,530)
|
| |
$(56,176)
|
HPMAC Portfolio
|
| |
(52)
|
| |
(100)
|
| |
(81)
|
| |
(154)
|
|
| |
September 30,
2020
|
| |
December 31,
2019
|
Total unpaid principal balance
|
| |
$75,248,444
|
| |
$54,329,300
|
Loans 30-89 days delinquent
|
| |
1,509,076
|
| |
1,308,095
|
Loans delinquent 90 or more days or in foreclosure(1)
|
| |
4,335,046
|
| |
735,282
|
(1)
|
Of the $4.3 billion of loans delinquent 90 days or more, approximately $3.8 billion are in forbearance primarily related to COVID-19 forbearance provided under the CARES Act.
|
|
| |
Nine Months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Contractual servicing fees
|
| |
$135,813
|
| |
$101,138
|
Late fees
|
| |
4,564
|
| |
4,437
|
Other
|
| |
(6,473)
|
| |
(1,486)
|
Loan servicing fees
|
| |
$133,904
|
| |
$104,089
|
|
| |
Nine Months Ended September 30, 2020
|
|||||||||
|
| |
Notional
Value
|
| |
Derivative
Asset
|
| |
Derivative
Liability
|
| |
Recorded
Gain/(Loss)
|
Mortgage-backed securities forward trades
|
| |
9,848,702
|
| |
$2,793
|
| |
23,586
|
| |
$(16,565)
|
Interest rate lock commitments
|
| |
15,103,027
|
| |
272,837
|
| |
—
|
| |
252,274
|
Hedging Mortgage Servicing Rights
|
| |
4,306,000
|
| |
8,730
|
| |
—
|
| |
73,489
|
Margin
|
| |
|
| |
30,434
|
| |
|
| |
|
Total
|
| |
|
| |
314,794
|
| |
23,586
|
| |
|
Cash placed with counterparties, net
|
| |
|
| |
30,435
|
| |
|
| |
|
|
| |
Nine Months Ended September 30, 2019
|
|||||||||
|
| |
Notional
Value
|
| |
Derivative
Asset
|
| |
Derivative
Liability
|
| |
Recorded
Gain
|
Mortgage-backed securities forward trades
|
| |
3,182,711
|
| |
$4,580
|
| |
$6,941
|
| |
$4,786
|
Interest rate lock commitments
|
| |
3,690,218
|
| |
31,626
|
| |
—
|
| |
23,636
|
Hedging Mortgage Servicing Rights
|
| |
1,355,000
|
| |
14,124
|
| |
—
|
| |
57,811
|
Margin
|
| |
|
| |
|
| |
4,330
|
| |
|
Total
|
| |
|
| |
50,330
|
| |
11,271
|
| |
|
Cash held from counterparties, net
|
| |
|
| |
|
| |
4,330
|
| |
|
|
| |
September 30, 2020
|
||||||
|
| |
Gross Amount of
Recognized Assets
(liabilities)
|
| |
Gross Offset
|
| |
Net Assets
(Liabilities)
|
Balance at September 30, 2020
|
| |
|
| |
|
| |
|
Derivatives subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
$2,793
|
| |
$(17,749)
|
| |
$(14,956)
|
Hedging mortgage servicing rights
|
| |
1,893
|
| |
(40)
|
| |
1,853
|
Margin (cash placed with counterparties)
|
| |
30,434
|
| |
(1,926)
|
| |
28,508
|
Liabilities:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
(23,546)
|
| |
17,749
|
| |
(5,797)
|
Hedging mortgage servicing rights
|
| |
(40)
|
| |
40
|
| |
—
|
Margin (cash placed with counterparties)
|
| |
—
|
| |
1,926
|
| |
1,926
|
|
| |
|
| |
|
| |
|
Derivatives not subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Interest rate lock commitments
|
| |
272,837
|
| |
—
|
| |
272,837
|
Hedging Mortgage Servicing Rights
|
| |
6,837
|
| |
—
|
| |
6,837
|
Total derivatives
|
| |
|
| |
|
| |
|
Assets
|
| |
314,794
|
| |
(19,715)
|
| |
295,079
|
Liabilities
|
| |
(23,586)
|
| |
19,715
|
| |
(3,871)
|
|
| |
December 31, 2019
|
||||||
|
| |
Gross Amount of
Recognized Assets
(liabilities)
|
| |
Gross Offset
|
| |
Net Assets
(Liabilities)
|
Balance at December 31, 2019
|
| |
|
| |
|
| |
|
Derivatives subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
$1,443
|
| |
$(1,061)
|
| |
$382
|
Hedging mortgage servicing rights
|
| |
1,005
|
| |
(2)
|
| |
1,003
|
Margin (cash placed with counterparties)
|
| |
—
|
| |
706
|
| |
706
|
Liabilities:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
(5,632)
|
| |
1,061
|
| |
(4,571)
|
Hedging mortgage servicing rights
|
| |
(2)
|
| |
2
|
| |
—
|
Margin (cash placed with counterparties)
|
| |
3,372
|
| |
(706)
|
| |
2,666
|
|
| |
|
| |
|
| |
|
Derivatives not subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Interest rate lock commitments
|
| |
25,618
|
| |
|
| |
25,618
|
Hedging Mortgage Servicing Rights
|
| |
12,478
|
| |
|
| |
12,478
|
Total derivatives
|
| |
|
| |
|
| |
|
Assets
|
| |
$40,544
|
| |
$(357)
|
| |
$40,187
|
Liabilities
|
| |
$(2,262)
|
| |
$357
|
| |
$(1,905)
|
|
| |
As of September 30,
2020
|
| |
As of December 31,
2019
|
Prepaid and other
|
| |
$20,298
|
| |
$24,098
|
Equity method investments
|
| |
45,447
|
| |
31,397
|
Deferred tax asset, net
|
| |
—
|
| |
20,667
|
Total
|
| |
$65,745
|
| |
$76,162
|
|
| |
As of September 30,
2020
|
| |
As of December 31,
2019
|
Servicing advance receivable
|
| |
$69,427
|
| |
$53,531
|
Servicing advance reserves
|
| |
(7,263)
|
| |
(4,308)
|
Servicing receivable-general
|
| |
922
|
| |
3,523
|
Income tax receivable
|
| |
13,900
|
| |
1,031
|
Interest on servicing deposits
|
| |
86
|
| |
1,105
|
Other
|
| |
2,248
|
| |
2,990
|
Accounts receivable, net
|
| |
79,320
|
| |
$57,872
|
|
| |
Maturity Date
|
| |
Balance at
September 30, 2020
|
$300M Warehouse Facility
|
| |
August 2021
|
| |
$262.9 million
|
$500M Warehouse Facility
|
| |
September 2021
|
| |
$353.4 million
|
$300M Warehouse Facility
|
| |
Evergreen
|
| |
$213.7 million
|
$800M Warehouse Facility
|
| |
May 2021
|
| |
$485.9 million
|
$500M Warehouse Facility
|
| |
September 2021
|
| |
$318.3 million
|
$300M Warehouse Facility
|
| |
June 2021
|
| |
$201.7 million
|
$400M Warehouse Facility
|
| |
August 2021
|
| |
$256.6 million
|
Total warehouse lines of credit
|
| |
|
| |
$2,092.5 million
|
|
| |
Maturity Date
|
| |
Balance at
December 31, 2019
|
$300M Warehouse Facility(1)
|
| |
July 2020
|
| |
$299.3 million
|
$300M Warehouse Facility(2)
|
| |
September 2020
|
| |
$292.5 million
|
$200M Warehouse Facility(3)
|
| |
Evergreen
|
| |
$143.0 million
|
$600M Warehouse Facility(4)
|
| |
May 2020
|
| |
$501.8 million
|
$250M Warehouse Facility(5)
|
| |
May 2020
|
| |
$238.9 million
|
$0.8M Warehouse Facility(6)
|
| |
Feb 2020
|
| |
$0.8 million
|
$50M Warehouse Facility(7)
|
| |
Evergreen
|
| |
$1.9 million
|
Total warehouse lines of credit
|
| |
|
| |
$1,478.2 million
|
(1)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of August 2021.
|
(2)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of September 2021 and an increased capacity up to $500 million.
|
(3)
|
Subsequent to December 31, 2019, this facility was amended with an increased capacity up to $300 million.
|
(4)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of May 2021 and an increased capacity up to $800 million.
|
(5)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of September 2021 and an increased capacity up to $500 million.
|
(6)
|
Subsequent to December 31, 2019, this facility was not renewed upon maturity.
|
(7)
|
Subsequent to December 31, 2019, this facility was closed in May 2020.
|
|
| |
Maturity Date
|
| |
Collateral
|
| |
Balance at
September 30, 2020
|
| |
Balance at
December 31, 2019
|
$500M MSR Line of Credit
|
| |
January 2023
|
| |
Mortgage Servicing Rights
|
| |
$356.6 million
|
| |
$369.0 million
|
$85M Servicing Advance Facility
|
| |
May 2021
|
| |
Servicing Advances
|
| |
$18.3 million
|
| |
$48.2 million
|
$10M Operating Line of Credit
|
| |
May 2021
|
| |
Mortgage loans
|
| |
$1.0 million
|
| |
$10.0 million
|
Total
|
| |
|
| |
|
| |
$375.9 million
|
| |
$427.2 million
|
Debt issuance costs
|
| |
|
| |
|
| |
$(1.8) million
|
| |
$(2.3) million
|
Term debt and other borrowings, net
|
| |
|
| |
|
| |
$374.1 million
|
| |
$424.9 million
|
•
|
Base of $2,500 plus 25 basis points of outstanding UPB for total loans serviced.
|
•
|
Adjusted/Tangible Net Worth comprises of total equity less goodwill, intangible assets, affiliate receivables, deferred tax assets and certain pledged assets.
|
•
|
Base of $2,500 plus 35 basis points of the issuer’s total single-family effective outstanding obligations.
|
•
|
Adjusted/Tangible Net Worth comprises of total equity less goodwill, intangible assets, affiliate receivables, deferred tax assets and certain pledged assets.
|
•
|
3.5 basis points of total Agency servicing.
|
•
|
Incremental 200 basis points of total nonperforming Agency, measured as 90 plus day delinquencies, servicing in excess of 6% of the total Agency servicing UPB.
|
•
|
Allowable assets for liquidity may include: cash and cash equivalents (unrestricted); available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of Government Sponsored Entities (“GSE”), US Treasury Obligations); and unused/available portion of committed servicing advance lines.
|
•
|
Maintain liquid assets equal to the greater of $1,000 or 10 basis points of our outstanding single-family MBS.
|
|
| |
Nine Months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Repurchase reserve, at beginning of period
|
| |
$3,964
|
| |
$3,429
|
Additions
|
| |
17,017
|
| |
2,165
|
Charge-offs
|
| |
(6,992)
|
| |
(1,265)
|
Repurchase reserves, at end of period
|
| |
$13,989
|
| |
$4,329
|
Level Input:
|
| |
Input Definition:
|
|
| |
|
Level 1
|
| |
Unadjusted, quoted prices in active markets for identical assets or liabilities.
|
|
| |
|
Level 2
|
| |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability and are developed based on market data obtained from sources independent of the Company. These may include quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk and others.
|
|
| |
|
Level 3
|
| |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity), unobservable inputs may be used. Unobservable inputs reflect the Company's own assumptions about the factors that market participants would use in pricing the asset or liability and are based on the best information available in the circumstances.
|
|
| |
September 30, 2020
|
|||||||||
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
Assets:
|
| |
|
| |
|
| |
|
| |
|
Mortgage loans held for sale
|
| |
$—
|
| |
$2,281,835
|
| |
$—
|
| |
$2,281,835
|
Derivative assets (IRLCs)
|
| |
—
|
| |
—
|
| |
272,837
|
| |
272,837
|
Derivative assets (MBS forward trades)
|
| |
—
|
| |
3,625
|
| |
—
|
| |
3,625
|
Derivative assets (MSRs)
|
| |
—
|
| |
7,897
|
| |
—
|
| |
7,897
|
Mortgage servicing rights
|
| |
—
|
| |
—
|
| |
583,263
|
| |
583,263
|
Total assets
|
| |
$—
|
| |
$2,293,357
|
| |
$856,100
|
| |
$3,149,457
|
|
| |
September 30, 2020
|
|||||||||
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
Liabilities:
|
| |
|
| |
|
| |
|
| |
|
Derivative liabilities (MBS forward trades)
|
| |
$—
|
| |
$23,586
|
| |
$—
|
| |
$23,586
|
Total liabilities
|
| |
$—
|
| |
$23,586
|
| |
$—
|
| |
$23,586
|
|
| |
December 31, 2019
|
|||||||||
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
Assets:
|
| |
|
| |
|
| |
|
| |
|
Mortgage loans held for sale
|
| |
$—
|
| |
$1,551,136
|
| |
$—
|
| |
$1,551,136
|
Mortgage loans held for sale – EBO
|
| |
—
|
| |
—
|
| |
3,094
|
| |
3,094
|
Derivative assets (IRLCs)
|
| |
—
|
| |
—
|
| |
25,618
|
| |
25,618
|
Derivative assets (MBS forward trades)
|
| |
—
|
| |
1,750
|
| |
—
|
| |
1,750
|
Derivative assets (MSRs)
|
| |
—
|
| |
13,176
|
| |
—
|
| |
13,176
|
Mortgage servicing rights
|
| |
—
|
| |
—
|
| |
575,035
|
| |
575,035
|
Total assets
|
| |
$—
|
| |
$1,566,062
|
| |
$603,747
|
| |
$2,169,809
|
Liabilities:
|
| |
|
| |
|
| |
|
| |
|
Derivative liabilities (MBS forward trades)
|
| |
$—
|
| |
$5,634
|
| |
$—
|
| |
$5,634
|
Total liabilities
|
| |
$—
|
| |
$5,634
|
| |
$—
|
| |
$5,634
|
|
| |
Nine Months Ended September 30, 2020
|
||||||
|
| |
MSRs
|
| |
IRLC
|
| |
EBO
|
Balance at beginning of period
|
| |
$575,035
|
| |
$25,618
|
| |
$3,094
|
Purchases, sales, issuances, contributions and settlements
|
| |
352,118
|
| |
—
|
| |
(2,171)
|
Change in fair value
|
| |
(343,890)
|
| |
247,219
|
| |
—
|
Transfers in/out(1)
|
| |
—
|
| |
—
|
| |
(923)
|
Balance at end of period
|
| |
$583,263
|
| |
$272,837
|
| |
$—
|
|
| |
Nine Months Ended September 30, 2019
|
||||||
|
| |
MSRs
|
| |
IRLC
|
| |
EBO
|
Balance at beginning of period
|
| |
$532,526
|
| |
$7,517
|
| |
$5,232
|
Purchases, Sales, Issuances, Contributions and Settlements
|
| |
175,756
|
| |
—
|
| |
(481)
|
Change in fair value
|
| |
(229,266)
|
| |
24,109
|
| |
(21)
|
Transfers in/out(1)
|
| |
—
|
| |
—
|
| |
(727)
|
Balance at end of period
|
| |
$479,016
|
| |
$31,626
|
| |
$4,003
|
(1)
|
Transfers in/out represents acquired assets and assets transferred out due to reclassification as real estate owned, foreclosure or claims.
|
|
| |
Fair Value
|
| |
Principal
Amount Due
Upon Maturity
|
| |
Difference(1)
|
Balance at September 30, 2020
|
| |
$2,281,835
|
| |
$2,180,034
|
| |
$101,801
|
Balance at December 31, 2019
|
| |
$1,551,136
|
| |
$1,507,139
|
| |
$43,997
|
(1)
|
Represents the amount of gains related to changes in fair value of items accounted for using the fair value option included in Gain on loans, net within the condensed consolidated statements of operations.
|
|
| |
|
| |
September 30, 2020
|
|||
Asset
|
| |
Key Input
|
| |
Range
|
| |
Weighted Average
|
Mortgage servicing rights
|
| |
Discount rate
|
| |
9.0% - 12.2%
|
| |
9.6%
|
|
| |
Prepayment speeds
|
| |
15.5% - 18.3%
|
| |
16.1%
|
Interest rate lock commitments
|
| |
Pull-through rate
|
| |
17% - 100%
|
| |
72%
|
|
| |
|
| |
December 31, 2019
|
|||
Asset
|
| |
Key Input
|
| |
Range
|
| |
Weighted Average
|
Mortgage servicing rights
|
| |
Discount rate
|
| |
9.0% - 12.2%
|
| |
9.8%
|
|
| |
Prepayment speeds
|
| |
11.1% - 13.3%
|
| |
12.5%
|
Interest rate lock commitments
|
| |
Pull-through rate
|
| |
19% - 100%
|
| |
82%
|
|
| |
Number of
Shares
|
| |
Weighted
Average
Exercise
Price
|
| |
Weighted
Average
Contractual
Life (Years)
|
| |
Weighted
Average
Grant Date
Fair Value
|
Outstanding at December 31, 2019
|
| |
3,291,875
|
| |
$10.12
|
| |
7.15
|
| |
$2.41
|
Granted
|
| |
1,606,500
|
| |
$11.26
|
| |
9.56
|
| |
$2.10
|
Exercised
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Forfeited
|
| |
(276,500)
|
| |
$10.27
|
| |
6.85
|
| |
$2.02
|
Outstanding at September 30, 2020
|
| |
4,621,875
|
| |
$10.50
|
| |
7.36
|
| |
$2.33
|
|
| |
Number of
Shares
|
| |
Weighted Average
Grant Date
Fair Value
|
Non-vested at December 31, 2019
|
| |
2,555,487
|
| |
$2.46
|
Granted
|
| |
1,606,500
|
| |
$2.10
|
Vested
|
| |
(203,187)
|
| |
$2.24
|
Exercised
|
| |
—
|
| |
—
|
Forfeited
|
| |
(276,500)
|
| |
$2.02
|
Non-vested at September 30, 2020
|
| |
3,682,300
|
| |
$2.35
|
|
| |
Nine Months Ended September 30
|
|||
|
| |
2020
|
| |
2019
|
Income (loss) before income taxes
|
| |
$557,862
|
| |
$(61,948)
|
Total provision/(benefit) from income taxes
|
| |
149,306
|
| |
(14,080)
|
Effective tax provision rate
|
| |
26.8%
|
| |
22.7%
|
|
| |
Nine Month Ended September 30, 2020
|
||||||||||||||||||
|
| |
Origination
|
| |
Servicing
|
| |
Segments
Total
|
| |
All Other
|
| |
Total
|
| |
Reconciliation
Item(1)
|
| |
Total
Consolidated
|
Revenue
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$962,778
|
| |
$—
|
| |
$962,778
|
| |
|
| |
$962,778
|
| |
|
| |
$962,778
|
Loan fee income
|
| |
60,630
|
| |
—
|
| |
60,630
|
| |
|
| |
60,630
|
| |
|
| |
60,630
|
Loan servicing fees
|
| |
(1,982)
|
| |
135,886
|
| |
133,904
|
| |
|
| |
133,904
|
| |
|
| |
133,904
|
Change in FV of MSRs
|
| |
—
|
| |
(230,524)
|
| |
(230,524)
|
| |
|
| |
(230,524)
|
| |
|
| |
(230,524)
|
Interest income (loss), net
|
| |
1,804
|
| |
7,130
|
| |
8,934
|
| |
(14,409)
|
| |
(5,475)
|
| |
|
| |
(5,475)
|
Other income
|
| |
—
|
| |
205
|
| |
205
|
| |
14,867
|
| |
15,072
|
| |
(14,050)
|
| |
1,022
|
Total U.S. GAAP Revenue
|
| |
1,023,230
|
| |
(87,303)
|
| |
935,927
|
| |
458
|
| |
936,385
|
| |
(14,050)
|
| |
922,335
|
Contribution margin
|
| |
$791,915
|
| |
$(31,665)
|
| |
$760,250
|
| |
$(90,036)
|
| |
$670,214
|
| |
|
| |
—
|
(1)
|
The Company includes the income from its equity method investments in the All Other category. In order to reconcile to Total net revenue on the condensed consolidated statements of operations, it must be removed as is presented above.
|
|
| |
Nine Months Ended September 30, 2019
|
||||||||||||||||||
|
| |
Origination
|
| |
Servicing
|
| |
Segments
Total
|
| |
All Other
|
| |
Total
|
| |
Reconciliation
Item(1)
|
| |
Total
Consolidated
|
Revenue
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$135,853
|
| |
$(358)
|
| |
$135,495
|
| |
$—
|
| |
$135,495
|
| |
|
| |
$135,495
|
Loan fee income
|
| |
19,788
|
| |
—
|
| |
19,788
|
| |
41
|
| |
19,829
|
| |
|
| |
19,829
|
Loan servicing fees
|
| |
(459)
|
| |
104,548
|
| |
104,089
|
| |
—
|
| |
104,089
|
| |
|
| |
104,089
|
Change in FV of MSRs
|
| |
—
|
| |
(151,168)
|
| |
(151,168)
|
| |
—
|
| |
(151,168)
|
| |
|
| |
(151,168)
|
Interest income (loss), net
|
| |
2,237
|
| |
13,255
|
| |
15,492
|
| |
(22,324)
|
| |
(6,832)
|
| |
|
| |
(6,832)
|
Other income
|
| |
—
|
| |
4
|
| |
4
|
| |
4,178
|
| |
4,182
|
| |
(2,591)
|
| |
1,591
|
Total U.S. GAAP Revenue
|
| |
157,419
|
| |
(33,719)
|
| |
123,700
|
| |
(18,105)
|
| |
105,595
|
| |
(2,591)
|
| |
103,004
|
Contribution margin
|
| |
$60,378
|
| |
$21,454
|
| |
$81,832
|
| |
$(56,262)
|
| |
$25,570
|
| |
|
| |
—
|
(1)
|
The Company includes the income from its equity method investments in the All Other segment. In order to reconcile to Total net revenue on the condensed consolidated statements of operations, it must be removed as is presented above.
|
|
| |
Nine Months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Income (loss) before income tax
|
| |
$557,862
|
| |
$(61,948)
|
Decrease (increase) in MSRs due to valuation assumptions
|
| |
98,302
|
| |
84,927
|
Income from equity method investment
|
| |
14,050
|
| |
2,591
|
Contribution margin, excluding change in MSRs due to valuation assumption
|
| |
$670,214
|
| |
$25,570
|
|
| |
September 30,
2020
(unaudited)
|
| |
December 31,
2019
|
Cash and cash equivalents
|
| |
$41
|
| |
$202
|
Investment in subsidiary
|
| |
703,516
|
| |
380,961
|
Equity method investment
|
| |
45,447
|
| |
31,283
|
Other assets
|
| |
4,280
|
| |
486
|
Total assets
|
| |
$753,284
|
| |
$412,932
|
Accounts payable
|
| |
$2,362
|
| |
$2,137
|
Deferred tax liabilities
|
| |
8,180
|
| |
483
|
Total liabilities
|
| |
10,542
|
| |
2,620
|
|
| |
|
| |
|
Equity:
|
| |
|
| |
|
Common stock (100 shares issued and outstanding, par value $.01 per share)
|
| |
—
|
| |
—
|
Additional paid in capital
|
| |
519,177
|
| |
454,861
|
Accumulated deficit
|
| |
223,565
|
| |
(44,549)
|
Total liabilities and equity
|
| |
$753,284
|
| |
$412,932
|
|
| |
Nine Months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Interest income
|
| |
$2
|
| |
$2
|
Other income
|
| |
5
|
| |
—
|
Net gain (loss) of subsidiaries
|
| |
412,673
|
| |
(46,987)
|
Total gain (loss)
|
| |
412,680
|
| |
(46,985)
|
Total expenses
|
| |
655
|
| |
241
|
Income (loss) before tax
|
| |
412,025
|
| |
(47,226)
|
Income tax provision
|
| |
3,469
|
| |
642
|
Income from equity method investments
|
| |
14,050
|
| |
2,591
|
Total net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
|
| |
Nine Months Ended September 30,
|
|||
|
| |
2020
|
| |
2019
|
Operating activities:
|
| |
|
| |
|
Net income (loss)
|
| |
$422,606
|
| |
$(45,277)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
| |
|
| |
|
Net income (loss) of subsidiaries
|
| |
(412,673)
|
| |
46,987
|
(Gain) on equity investment
|
| |
(14,050)
|
| |
(2,591)
|
Decrease in deferred taxes
|
| |
7,696
|
| |
589
|
(Increase) decrease in prepaid expenses and other assets
|
| |
(3,794)
|
| |
353
|
Decrease in accounts payable and other assets
|
| |
224
|
| |
1,546
|
Net cash provided by operating cash flows activities
|
| |
9
|
| |
1,607
|
|
| |
|
| |
|
Investing activities:
|
| |
|
| |
|
Investment in subsidiaries
|
| |
(63,945)
|
| |
(1,840)
|
Net cash used in investing cash flows activities
|
| |
(63,945)
|
| |
(1,840)
|
|
| |
|
| |
|
Financing activities:
|
| |
|
| |
|
Capital contributions from parent
|
| |
63,774
|
| |
—
|
Net cash provided by financing activities
|
| |
63,774
|
| |
—
|
|
| |
|
| |
|
Net increase in cash, cash equivalents and restricted cash
|
| |
(162)
|
| |
(233)
|
Cash, cash equivalents and restricted cash at beginning of period
|
| |
203
|
| |
460
|
Cash, cash equivalents and restricted cash at end of period
|
| |
41
|
| |
227
|
|
| |
|
| |
|
Cash paid for interest
|
| |
—
|
| |
—
|
Cash paid for income taxes
|
| |
—
|
| |
54
|
|
| |
December 31,
|
|||
|
| |
2019
|
| |
2018
|
Assets:
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$30,630
|
| |
$44,010
|
Restricted cash
|
| |
51,101
|
| |
38,234
|
Cash and cash equivalents and Restricted cash
|
| |
81,731
|
| |
82,244
|
Mortgage loans held for sale (at fair value)
|
| |
1,554,230
|
| |
421,754
|
Mortgage servicing rights (at fair value)
|
| |
575,035
|
| |
532,526
|
Property and equipment, net
|
| |
12,051
|
| |
10,075
|
Accounts receivable, net
|
| |
57,872
|
| |
44,422
|
Derivative assets
|
| |
40,544
|
| |
18,990
|
Goodwill and intangibles
|
| |
11,935
|
| |
10,957
|
GNMA loans eligible for repurchase
|
| |
499,207
|
| |
451,209
|
Other assets
|
| |
76,162
|
| |
64,214
|
Total assets
|
| |
$2,908,767
|
| |
$1,636,391
|
Liabilities and Shareholders’ Equity:
|
| |
|
| |
|
Liabilities:
|
| |
|
| |
|
Warehouse lines of credit
|
| |
$1,478,183
|
| |
$404,237
|
Term debt and other borrowings, net
|
| |
424,958
|
| |
276,277
|
Accounts payable and accrued expenses
|
| |
39,739
|
| |
21,243
|
GNMA loans eligible for repurchase
|
| |
499,207
|
| |
451,209
|
Other liabilities
|
| |
56,368
|
| |
44,654
|
Total liabilities
|
| |
2,498,455
|
| |
1,197,620
|
Commitments and Contingencies (Note 15)
|
| |
|
| |
|
|
| |
|
| |
|
Shareholders’ Equity:
|
| |
|
| |
|
Common stock (100 shares issued and outstanding, par value $0.01 per share)
|
| |
—
|
| |
—
|
Additional paid-in capital
|
| |
454,861
|
| |
454,110
|
Accumulated deficit
|
| |
(44,549)
|
| |
(15,339)
|
Total shareholders' equity
|
| |
410,312
|
| |
438,771
|
Total liabilities and shareholders' equity
|
| |
$2,908,767
|
| |
$1,636,391
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Revenue:
|
| |
|
| |
|
Gain on loans, net
|
| |
$199,501
|
| |
$84,068
|
Loan fee income
|
| |
32,112
|
| |
19,603
|
Interest income
|
| |
51,801
|
| |
35,179
|
Interest expense
|
| |
(57,942)
|
| |
(47,486)
|
Interest loss, net
|
| |
(6,141)
|
| |
(12,307)
|
Loan servicing fees
|
| |
144,228
|
| |
119,049
|
Change in fair value of mortgage servicing rights
|
| |
(173,134)
|
| |
(47,312)
|
Other income
|
| |
3,159
|
| |
1,156
|
Total net revenue
|
| |
199,725
|
| |
164,257
|
Expenses:
|
| |
|
| |
|
Compensation and benefits
|
| |
156,197
|
| |
109,577
|
Loan expense
|
| |
15,626
|
| |
16,882
|
Loan servicing expense
|
| |
20,924
|
| |
18,488
|
Occupancy and equipment
|
| |
16,768
|
| |
20,521
|
General and administrative
|
| |
21,407
|
| |
29,165
|
Depreciation and amortization
|
| |
5,918
|
| |
7,612
|
Other expenses
|
| |
4,296
|
| |
4,060
|
Total expenses
|
| |
241,136
|
| |
206,305
|
Loss from continuing operations before income tax
|
| |
(41,411)
|
| |
(42,048)
|
Income tax benefit from continuing operations
|
| |
(9,500)
|
| |
(10,485)
|
Income from equity method investments
|
| |
2,701
|
| |
209
|
Net loss from continuing operations
|
| |
(29,210)
|
| |
(31,354)
|
Net income from discontinued operations before tax
|
| |
—
|
| |
9,707
|
Income tax provision
|
| |
—
|
| |
2,550
|
Income from discontinued operations, net of tax
|
| |
—
|
| |
7,157
|
Total net loss
|
| |
$(29,210)
|
| |
$(24,197)
|
|
| |
|
| |
|
Basic and diluted loss earnings per share:
|
| |
|
| |
|
Basic and diluted loss per share from continuing operations
|
| |
$(292)
|
| |
$(314)
|
Basic and diluted earnings per share from discontinued operations
|
| |
—
|
| |
72
|
Basic and diluted total net loss per share
|
| |
$(292)
|
| |
$(242)
|
|
| |
Common Stock
|
| |
Additional
Paid in Capital
|
| |
Retained
Earnings
(Accumulated
Deficit)
|
| |
Total
Shareholders’
Equity
|
|||
|
| |
Shares
|
| |
Amount
|
| ||||||||
Balance January 1, 2018
|
| |
100
|
| |
—
|
| |
$410,758
|
| |
$8,858
|
| |
$419,616
|
Contributed capital
|
| |
—
|
| |
—
|
| |
42,970
|
| |
—
|
| |
42,970
|
Stock based compensation
|
| |
—
|
| |
—
|
| |
382
|
| |
—
|
| |
382
|
Net loss
|
| |
—
|
| |
—
|
| |
—
|
| |
(24,197)
|
| |
(24,197)
|
Ending balance, December 31, 2018
|
| |
100
|
| |
—
|
| |
454,110
|
| |
(15,339)
|
| |
438,771
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Contributed capital
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Stock based compensation
|
| |
—
|
| |
—
|
| |
751
|
| |
—
|
| |
751
|
Net loss
|
| |
—
|
| |
—
|
| |
—
|
| |
(29,210)
|
| |
(29,210)
|
Ending balance, December 31, 2019
|
| |
100
|
| |
—
|
| |
$454,861
|
| |
$(44,549)
|
| |
$410,312
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Operating activities:
|
| |
|
| |
|
Net loss
|
| |
$(29,210)
|
| |
$(24,197)
|
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
|
| |
|
| |
|
Depreciation
|
| |
3,807
|
| |
4,110
|
Amortization of intangible assets
|
| |
2,111
|
| |
3,564
|
Amortization of debt issuance costs
|
| |
5,839
|
| |
1,386
|
Gain on loans, net
|
| |
(199,501)
|
| |
(116,228)
|
Gain on sale of Natty Mac
|
| |
—
|
| |
(909)
|
Provision for representation and warranty reserve
|
| |
451
|
| |
(770)
|
Stock based compensation expense
|
| |
751
|
| |
382
|
Deferred income tax
|
| |
(9,144)
|
| |
(7,047)
|
Gain on equity investment
|
| |
(2,701)
|
| |
(209)
|
Origination of mortgage loans held for sale
|
| |
(23,116,236)
|
| |
(12,067,560)
|
Proceeds on sale and payments from mortgage loans held for sale
|
| |
22,003,004
|
| |
12,448,060
|
Change in fair value of mortgage servicing rights
|
| |
173,134
|
| |
47,312
|
Change in fair value of mortgage loans held for sale
|
| |
(33,643)
|
| |
11,429
|
Change in fair value of derivative assets
|
| |
(21,554)
|
| |
(6,815)
|
Changes in operating assets and liabilities:
|
| |
|
| ||
Increase in accounts receivable, net
|
| |
(13,238)
|
| |
(11,670)
|
Increase (decrease) in other assets
|
| |
188
|
| |
(10,740)
|
Increase in accounts payable and accrued expenses
|
| |
18,071
|
| |
(16,255)
|
Decrease in assets and liabilities – discontinued operations
|
| |
—
|
| |
396
|
Increase in other liabilities – discontinued operations
|
| |
—
|
| |
(262)
|
Increase in other liabilities
|
| |
11,178
|
| |
8,855
|
Net cash (used in) provided by operating activities
|
| |
(1,206,693)
|
| |
262,832
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Investing activities:
|
| |
|
| |
|
Purchases of property and equipment, net of disposals
|
| |
(5,690)
|
| |
(3,499)
|
Purchases of property and equipment, net of disposals- discontinued operations
|
| |
—
|
| |
751
|
Proceeds from sale of mortgage servicing rights
|
| |
—
|
| |
40,939
|
Business acquisitions, net of cash acquired
|
| |
(4,923)
|
| |
—
|
Disposition of intangible assets
|
| |
—
|
| |
191
|
Proceeds from sale of Natty Mac
|
| |
—
|
| |
2,500
|
Purchases of mortgage servicing rights
|
| |
—
|
| |
(7,044)
|
Equity method investment
|
| |
5
|
| |
(2,500)
|
Decrease in warehouse lending receivables
|
| |
—
|
| |
117,943
|
Net cash (used in) provided by investing activities
|
| |
(10,608)
|
| |
149,281
|
|
| |
|
| |
|
Financing activities:
|
| |
|
| |
|
Proceeds from warehouse borrowings
|
| |
23,012,034
|
| |
12,537,123
|
Payments on warehouse borrowings
|
| |
(21,938,088)
|
| |
(13,058,907)
|
Proceeds from term debt borrowings
|
| |
369,000
|
| |
15,000
|
Payments on term debt borrowings
|
| |
(245,156)
|
| |
(4,844)
|
Proceeds from other borrowings
|
| |
21,850
|
| |
26,400
|
Payments of debt issuance costs
|
| |
(2,852)
|
| |
(199)
|
Decrease in subordinated debt
|
| |
—
|
| |
30,000
|
Capital contributions from parent
|
| |
—
|
| |
42,970
|
Net cash provided by (used in) financing activities
|
| |
1,216,788
|
| |
(412,457)
|
Net decrease in cash, cash equivalents and restricted cash
|
| |
(513)
|
| |
(344)
|
Cash, cash equivalents and restricted cash at beginning of period
|
| |
82,244
|
| |
82,588
|
Cash, cash equivalents and restricted cash at end of period
|
| |
$81,731
|
| |
$82,244
|
Supplemental disclosure:
|
| |
|
| |
|
Cash paid for interest
|
| |
$50,518
|
| |
$48,551
|
Cash paid for taxes
|
| |
330
|
| |
2
|
1.
|
All of Platinum Mortgage, Inc.’s rights and ownership in certain tangible and intangible property, including but not limited to information, books, and records of the Platinum Mortgage, Inc. such as filers, invoices, credit and sales records, personnel records, and all agreements to which Platinum Mortgage, Inc. is a party and identified as material contracts;
|
2.
|
Employees, including underwriters, closers, account managers, administrative staff;
|
3.
|
Building lease and all related facilities contracts;
|
4.
|
Retained assets, including office furniture and computer equipment.
|
Fair value of assets acquired:
|
| |
|
Fixed assets
|
| |
$93
|
Consideration transferred:
|
| |
|
Cash
|
| |
124
|
Earnout
|
| |
1,648
|
|
| |
$1,772
|
Goodwill
|
| |
$1,679
|
Representation and warranty reserve
|
| |
85
|
Accrued expenses
|
| |
424
|
Deferred tax liability, net
|
| |
304
|
GNMA loans eligible for repurchase
|
| |
1,580
|
Total liabilities
|
| |
2,393
|
|
| |
|
Net assets
|
| |
1,744
|
|
| |
|
Consideration transferred:
|
| |
|
Cash
|
| |
2,152
|
Holdback
|
| |
1,000
|
Goodwill
|
| |
$1,408
|
Consideration received
|
| |
$2,500
|
Less: Fair value of assets
|
| |
(1,591)
|
Gain on sale
|
| |
$909
|
1.
|
Buyer 1: The purchase price was an earnout payment which equaled five basis points per the aggregate loan volume funded (not to exceed $41.0 million) that was produced by transfer employees while employed by the Buyer. The payments were paid quarterly during 2019, in February, April, July, and October.
|
2.
|
Buyer 2: The purchase price consisted of 0.17% of aggregate unpaid principal balance (“UPB”) of all first-lien residential mortgage loans that are originated by transferred employees, closed in the buyer’s name on or after September 1, 2018 for a period of 12 months. Certain fixed assets were considered to be included in the earnout rate.
|
|
| |
Year Ended
December 31, 2018
|
Gain on loans, net
|
| |
$32,160
|
Loan fee income
|
| |
5,932
|
Total Revenue
|
| |
$38,092
|
Compensation and benefits
|
| |
$(21,778)
|
Occupancy and equipment
|
| |
(3,131)
|
General and administrative
|
| |
(2,398)
|
Amortization and depreciation
|
| |
(253)
|
Other expenses
|
| |
(825)
|
Income before income tax expense
|
| |
9,707
|
Income tax expense
|
| |
(2,550)
|
Net income from discontinued operations
|
| |
$7,157
|
|
| |
Year Ended December 31, 2019
|
||||||
|
| |
Unpaid
Principal
|
| |
Fair Value
Adjustment
|
| |
Total
Fair Value
|
Conventional(1)
|
| |
$454,225
|
| |
$8,787
|
| |
$463,012
|
Government(2)
|
| |
1,052,638
|
| |
38,388
|
| |
1,091,026
|
Reverse(3)
|
| |
275
|
| |
(83)
|
| |
192
|
Total
|
| |
$1,507,138
|
| |
$47,092
|
| |
$1,554,230
|
(1)
|
Conventional includes FNMA and FHLMC mortgage loans.
|
(2)
|
Government includes GNMA mortgage loans (including Federal Housing Administration, Department of Veterans Affairs and United States Department of Agricultural mortgage loans).
|
(3)
|
Reverse loan presented in Mortgage loans held for sale on the consolidated balance sheets as a result of a repurchase
|
|
| |
Year Ended December 31, 2018
|
||||||
|
| |
Unpaid
Principal
|
| |
Fair Value
Adjustment
|
| |
Total
Fair Value
|
Conventional(1)
|
| |
$128,255
|
| |
$2,932
|
| |
$131,187
|
Government(2)
|
| |
279,742
|
| |
10,630
|
| |
290,372
|
Reverse(3)
|
| |
279
|
| |
(84)
|
| |
195
|
Total
|
| |
$408,276
|
| |
$13,478
|
| |
$421,754
|
(1)
|
Conventional includes FNMA and FHLMC mortgage loans.
|
(2)
|
Government includes GNMA mortgage loans (including Federal Housing Administration, Department of Veterans Affairs and United States Department of Agricultural mortgage loans).
|
(3)
|
Reverse loan presented in Mortgage loans held for sale on the consolidated balance sheets as a result of a repurchase
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Fair value at beginning of period
|
| |
$421,754
|
| |
$847,897
|
Mortgage loans originated and purchased(1)
|
| |
23,116,236
|
| |
12,067,560
|
Proceeds on sales and payments received(1)
|
| |
(22,003,004)
|
| |
(12,448,060)
|
Change in fair value
|
| |
33,643
|
| |
(11,429)
|
Gain on Sale(2)
|
| |
(14,399)
|
| |
(34,214)
|
Fair value at end of period
|
| |
$1,554,230
|
| |
$421,754
|
(1)
|
This line as presented on the 2019 consolidated statements of cash flows excludes the portion related to HPMAC, which is included in Business acquisitions within Investing activities. The portion related to HPMAC is recorded on Business acquisitions, net of cash acquired line. This schedule contains HPMAC.
|
(2)
|
This line as presented on the consolidated statements of cash flows excludes OMSR and MSR hedging.
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Balance at beginning of period
|
| |
$532,526
|
| |
$463,291
|
MSRs originated
|
| |
273,628
|
| |
170,692
|
MSRs purchased
|
| |
1,528
|
| |
7,044
|
MSRs sold
|
| |
—
|
| |
(40,939)
|
Changes in valuation model inputs
|
| |
(133,997)
|
| |
(9,903)
|
Change in cash payoffs and principal amortization
|
| |
(98,650)
|
| |
(57,659)
|
Balance at end of period
|
| |
$575,035
|
| |
$532,526
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Ginnie Mae
|
| |
$24,611,487
|
| |
$ 18,762,163
|
Fannie Mae
|
| |
14,895,853
|
| |
10,681,477
|
Freddie Mac
|
| |
13,021,778
|
| |
11,905,232
|
Other
|
| |
71,428
|
| |
74,953
|
Total mortgage servicing portfolio
|
| |
$ 52,600,546
|
| |
$ 41,423,825
|
|
| |
|
| |
|
MSR balance
|
| |
$575,035
|
| |
$532,526
|
MSR balance as % of unpaid mortgage principal balance
|
| |
1.09%
|
| |
1.29%
|
|
| |
Discount Rate
|
| |
Prepayment Speeds
|
||||||
|
| |
100 BPS
Adverse Change
|
| |
200 BPS
Adverse Change
|
| |
10% Adverse
Change
|
| |
20% Adverse
Change
|
2019
|
| |
|
| |
|
| |
|
| |
|
HPF Portfolio
|
| |
$(20,938)
|
| |
$(40,288)
|
| |
$(29,530)
|
| |
$(56,176)
|
HPMAC Portfolio
|
| |
(52)
|
| |
(100)
|
| |
(81)
|
| |
(154)
|
2018
|
| |
|
| |
|
| |
|
| |
|
HPF Portfolio
|
| |
(20,838)
|
| |
(40,213)
|
| |
(22,221)
|
| |
(42,721)
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Total unpaid principal balance
|
| |
$54,329,300
|
| |
$41,895,379
|
Loans 30-89 days delinquent
|
| |
1,308,095
|
| |
1,068,685
|
Loans delinquent 90 or more days or in foreclosure
|
| |
735,282
|
| |
639,761
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Contractual servicing fees
|
| |
$141,195
|
| |
$118,096
|
Late fees
|
| |
6,291
|
| |
4,033
|
Other
|
| |
(3,258)
|
| |
(3,080)
|
Loan servicing fees
|
| |
$144,228
|
| |
$119,049
|
|
| |
Year Ended December 31, 2019
|
|||||||||
|
| |
Notional
Value
|
| |
Derivative
Asset
|
| |
Derivative
Liability
|
| |
Recorded
Gain/(Loss)
|
Balance at December 31, 2019
|
| |
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
$3,350,161
|
| |
$1,443
|
| |
$5,634
|
| |
$2,764
|
Interest rate lock commitments
|
| |
3,171,868
|
| |
25,618
|
| |
—
|
| |
17,424
|
Hedging Mortgage Servicing Rights
|
| |
3,140,000
|
| |
13,483
|
| |
—
|
| |
40,364
|
Margin
|
| |
|
| |
—
|
| |
(3,372)
|
| |
|
Derivatives before netting
|
| |
|
| |
$40,544
|
| |
$2,262
|
| |
|
Cash placed with counterparties, net
|
| |
|
| |
|
| |
$3,372
|
| |
|
|
| |
Year Ended December 31, 2018
|
|||||||||
|
| |
Notional
Value
|
| |
Derivative
Asset
|
| |
Derivative
Liability
|
| |
Recorded
Gain/(Loss)
|
Balance at December 31, 2018
|
| |
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
$736,000
|
| |
$28
|
| |
$6,980
|
| |
$(6,529)
|
Interest rate lock commitments
|
| |
814,133
|
| |
7,516
|
| |
—
|
| |
(4,980)
|
Hedging Mortgage Servicing Rights
|
| |
863,021
|
| |
11,446
|
| |
—
|
| |
19,464
|
Margin
|
| |
|
| |
—
|
| |
(6,163)
|
| |
|
Total
|
| |
|
| |
$18,990
|
| |
$817
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
Cash placed with counterparties, net
|
| |
|
| |
|
| |
$6,163
|
| |
|
|
| |
Year Ended December 31, 2019
|
||||||
|
| |
Gross Amount of
Recognized Assets
(liabilities)
|
| |
Gross Offset
|
| |
Net Assets
(Liabilities)
|
Balance at December 31, 2019
|
| |
|
| |
|
| |
|
Derivatives subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
$1,443
|
| |
$(1,061)
|
| |
$382
|
Hedging mortgage servicing rights
|
| |
1,005
|
| |
(2)
|
| |
1,003
|
Margin (cash placed with counterparties)
|
| |
—
|
| |
706
|
| |
706
|
Liabilities:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
(5,632)
|
| |
1,061
|
| |
(4,571)
|
Hedging mortgage servicing rights
|
| |
(2)
|
| |
2
|
| |
—
|
Margin (cash placed with counterparties)
|
| |
3,372
|
| |
(706)
|
| |
2,666
|
|
| |
|
| |
|
| |
|
Derivatives not subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Interest rate lock commitments
|
| |
25,618
|
| |
|
| |
25,618
|
Hedging Mortgage Servicing Rights
|
| |
12,478
|
| |
|
| |
12,478
|
Total derivatives
|
| |
|
| |
|
| |
|
Assets
|
| |
$40,544
|
| |
$(357)
|
| |
$40,187
|
Liabilities
|
| |
$(2,262)
|
| |
$357
|
| |
$(1,905)
|
|
| |
Year Ended December 31, 2018
|
||||||
|
| |
Gross Amount of
Recognized Assets
(liabilities)
|
| |
Gross Offset
|
| |
Net Assets
(Liabilities)
|
Balance at December 31, 2018
|
| |
|
| |
|
| |
|
Derivatives subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
$28
|
| |
$(6)
|
| |
$22
|
Hedging mortgage servicing rights
|
| |
2,975
|
| |
—
|
| |
2,975
|
Margin (cash placed with counterparties)
|
| |
—
|
| |
639
|
| |
639
|
Liabilities:
|
| |
|
| |
|
| |
|
Mortgage-backed securities forward trades
|
| |
(6,980)
|
| |
6
|
| |
(6,974)
|
Margin (cash placed with counterparties)
|
| |
6,163
|
| |
(639)
|
| |
5,524
|
Derivatives not subject to master netting agreements:
|
| |
|
| |
|
| |
|
Assets:
|
| |
|
| |
|
| |
|
Interest rate lock commitments
|
| |
7,517
|
| |
|
| |
7,517
|
Hedging Mortgage Servicing Rights
|
| |
8,470
|
| |
|
| |
8,470
|
Total derivatives
|
| |
|
| |
|
| |
|
Assets
|
| |
$18,990
|
| |
$633
|
| |
$19,623
|
Liabilities
|
| |
$(817)
|
| |
$(633)
|
| |
$(1,450)
|
|
| |
Origination
|
| |
Servicing
|
| |
Total
|
Goodwill as of December 31, 2018
|
| |
$5,604
|
| |
$2,098
|
| |
$7,702
|
Acquisitions
|
| |
1,408
|
| |
1,679
|
| |
3,087
|
Goodwill as of December 31, 2019
|
| |
$7,012
|
| |
$3,777
|
| |
10,789
|
|
| |
Year Ended December 31, 2019
|
||||||||||||
|
| |
Amortization
Period
(months)
|
| |
Gross
Carrying
Value
|
| |
Accumulated
Amortization
|
| |
Impairment
Charges
|
| |
Net
Carrying
Value
|
Customer relationships
|
| |
36
|
| |
$5,700
|
| |
$(4,908)
|
| |
—
|
| |
$792
|
Lease intangible
|
| |
84
|
| |
1,330
|
| |
(390)
|
| |
(586)
|
| |
354
|
Total finite-lived intangibles
|
| |
|
| |
7,030
|
| |
$(5,298)
|
| |
$(586)
|
| |
$1,146
|
|
| |
Year Ended December 31, 2018
|
||||||||||||
|
| |
Amortization
Period
(months)
|
| |
Gross
Carrying
Value
|
| |
Accumulated
Amortization
|
| |
Impairment
Charges
|
| |
Net
Carrying
Value
|
Customer relationships
|
| |
36
|
| |
$5,700
|
| |
$(3,009)
|
| |
—
|
| |
$2,691
|
Lease intangible
|
| |
84
|
| |
1,330
|
| |
(300)
|
| |
(466)
|
| |
564
|
Total finite-lived intangibles
|
| |
|
| |
7,030
|
| |
$(3,309)
|
| |
$(466)
|
| |
$3,255
|
|
| |
Year Ended
December 31, 2019
|
2020
|
| |
$873
|
2021
|
| |
80
|
2022
|
| |
80
|
2023
|
| |
80
|
2024
|
| |
33
|
|
| |
$1,146
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Prepaid expenses
|
| |
$24,098
|
| |
$23,983
|
Equity method investments
|
| |
31,397
|
| |
28,700
|
Deferred tax asset, net
|
| |
20,667
|
| |
11,531
|
Total
|
| |
$76,162
|
| |
$64,214
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Computer and telephone
|
| |
$10,546
|
| |
$7,171
|
Office furniture and equipment
|
| |
4,605
|
| |
4,333
|
Leasehold improvements
|
| |
5,286
|
| |
4,949
|
Work-in-process for internal use software
|
| |
1,748
|
| |
79
|
Total
|
| |
22,185
|
| |
16,532
|
Less accumulated depreciation
|
| |
(10,134)
|
| |
(6,457)
|
Property and equipment, net
|
| |
$12,051
|
| |
$10,075
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Servicing advance receivable
|
| |
$53,531
|
| |
$41,424
|
Servicing advance reserves
|
| |
(4,308)
|
| |
(4,609)
|
Servicing receivable-general
|
| |
3,523
|
| |
2,682
|
Interest on servicing deposits
|
| |
1,105
|
| |
1,006
|
Other
|
| |
4,021
|
| |
3,919
|
Accounts receivable, net at end of period
|
| |
$57,872
|
| |
$44,422
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Servicing advance reserve, at beginning of period
|
| |
($4,609)
|
| |
($10,153)
|
Additions
|
| |
(3,137)
|
| |
(1,767)
|
Charge-offs
|
| |
3,438
|
| |
7,311
|
Servicing advance reserve, at end of period
|
| |
($4,308)
|
| |
($4,609)
|
Year Ended December 31, 2019
|
||||||||||||
|
| |
Interest Rate
|
| |
Maturity Date
|
| |
Collateral(8)
|
| |
Balance at
December 31, 2019
|
$300M Warehouse Facility(1)
|
| |
One Month Libor
+ 1.50% or 3%
|
| |
July 2020
|
| |
Mortgage loans
|
| |
$299.3 million
|
$300M Warehouse Facility(2)
|
| |
One Month Libor
+ 1.75%*
|
| |
September 2020
|
| |
Mortgage loans
|
| |
$292.5 million
|
$200M Warehouse Facility(3)
|
| |
One Month Libor
+ 1.50%*
|
| |
Evergreen
|
| |
Mortgage loans
|
| |
$143.0 million
|
$600M Warehouse Facility(4)
|
| |
Weighted Average Coupon less 1% or 3.5%
|
| |
May 2020
|
| |
Mortgage loans
|
| |
$501.8 million
|
$250M Warehouse Facility(5)
|
| |
One Month Libor
-0.55%
|
| |
May 2020
|
| |
Mortgage loans
|
| |
$238.9 million
|
$0.8M Warehouse Facility(6)
|
| |
Borrowing rate
+ debenture rate
|
| |
Feb 2020
|
| |
Mortgage loans
|
| |
$0.8 million
|
$50M Warehouse Facility(7)
|
| |
One Month Libor
+ 2.50% or 4.75%
|
| |
Evergreen
|
| |
Mortgage loans
|
| |
$1.9 million
|
Total warehouse lines of credit
|
| |
|
| |
|
| |
|
| |
$1,478.2 million
|
*
|
Pricing incentives given for average utilization greater than a threshold.
|
(1)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of August 2021.
|
(2)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of September 2021 and an increased capacity up to $500 million.
|
(3)
|
Subsequent to December 31, 2019, this facility was amended with an increased capacity up to $300 million.
|
(4)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of May 2021 and an increased capacity up to $800 million. Additionally, the interest rate changed from weighted average coupon less 1% or 3.5% to weighted average coupon less 1% or 3%
|
(5)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of September 2021 and an increased capacity up to $500 million. Additionally, the interest rate changed from one month LIBOR + .55% to one month LIBOR + 1.5%.
|
(6)
|
Subsequent to December 31, 2019, this facility was not renewed upon maturity.
|
(7)
|
Subsequent to December 31, 2019, this facility was closed in May 2020.
|
(8)
|
The Company’s borrowings are 100% secured by the fair value of the mortgage loans held for sale at fair value.
|
Year Ended December 31, 2018
|
||||||||||||
|
| |
Interest Rate
|
| |
Maturity Date
|
| |
Collateral(1)
|
| |
Balance at
December 31, 2018
|
$200M Warehouse Facility
|
| |
One Month Libor
+ 1.50%
|
| |
July 2019
|
| |
Mortgage loans
|
| |
$65.1 million
|
$125M Warehouse Facility
|
| |
One Month Libor
+ 1.75%
|
| |
September 2019
|
| |
Mortgage loans
|
| |
$16.4 million
|
$100M Warehouse Facility
|
| |
One Month Libor
+ 1.75%
|
| |
Evergreen
|
| |
Mortgage loans
|
| |
$11.6 million
|
$600M Warehouse Facility
|
| |
Weighted Average Coupon less 1.25%
|
| |
May 2019
|
| |
Mortgage loans
|
| |
$233.3 million
|
$100M Warehouse Facility
|
| |
One Month Libor
+ 0.25%
|
| |
May 2019
|
| |
Mortgage loans
|
| |
$69.3 million
|
$8.3M Warehouse Facility
|
| |
Borrowing rate
+ debenture rate
|
| |
Evergreen
|
| |
Mortgage loans
|
| |
$8.3 million
|
$2M Warehouse Facility
|
| |
Prime + 1.00%
or 4.00% min
|
| |
May 2019
|
| |
Mortgage loans
|
| |
$0.2 million
|
Total warehouse lines of credit
|
| |
|
| |
|
| |
|
| |
$404.2 million
|
(1)
|
The Company’s borrowings are 100% secured by the fair value of the mortgage loans held for sale.
|
$300M Warehouse Facility
|
| |
June 2020
|
$400M Warehouse Facility
|
| |
August 2020
|
$500M Warehouse Facility
|
| |
October 2020
|
$50M Warehouse Facility (GNMA FHA EBO)
|
| |
October 2020
|
$150M Gestation Facility
|
| |
October 2020
|
|
| |
Year Ended
December 31, 2019
|
|
| |
|
2020
|
| |
$—
|
2021
|
| |
—
|
2022
|
| |
338,250
|
2023
|
| |
30,750
|
2024 and Thereafter
|
| |
—
|
|
| |
$369,000
|
Year Ended December 31, 2019
|
||||||||||||
|
| |
Interest Rate
|
| |
Maturity Date
|
| |
Collateral
|
| |
Balance at
December 31, 2019
|
$10M Operating Line of Credit(1)
|
| |
Prime or 4.00% min
|
| |
May 2020
|
| |
Mortgage loans
|
| |
$10.0 million
|
$70M Servicing Advance Facility(2)
|
| |
Libor +3.50%
|
| |
May 2020
|
| |
Servicing Advances
|
| |
$48.2 million
|
$500M Line of Credit
|
| |
3-month LIBOR
(floored at 1%)
plus 3.50% and
3.75% annualized
cost of funds for FNMA/FHLMC and GNMA collateral
|
| |
January 2023
|
| |
Servicing Advances
|
| |
$369.0 million
|
Total
|
| |
|
| |
|
| |
|
| |
$427.2 million
|
Debt issuance costs
|
| |
|
| |
|
| |
|
| |
$ (2.3) million
|
Term debt and other borrowings, net
|
| |
|
| |
|
| |
|
| |
$424.9 million
|
(1)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of May 2021. Additionally, the interest rate changed from Prime or 4.00% to Prime or 3.25%.
|
(2)
|
Subsequent to December 31, 2019, this facility was amended with a maturity date of June 2021 and an increased capacity up to $85 million.
|
Year Ended December 31, 2018
|
||||||||||||
|
| |
Interest Rate
|
| |
Maturity Date
|
| |
Collateral
|
| |
Balance at
December 31, 2018
|
$10M Operating Line of Credit
|
| |
Prime or 4.00% min
|
| |
May 2019
|
| |
Mortgage loans
|
| |
$10.0 million
|
$50M Servicing Advance Facility
|
| |
Libor +3.50%
|
| |
January 2019
|
| |
Servicing Advances
|
| |
$26.4 million
|
$250M Term Debt
|
| |
One Month LIBOR (floored at 1%)
+ 7% annualized
cost of funds
|
| |
October 2022
|
| |
Servicing Advances
|
| |
$245.2 million
|
Total
|
| |
|
| |
|
| |
|
| |
$281.6 million
|
Debt issuance costs
|
| |
|
| |
|
| |
|
| |
$ (5.3) million
|
Term debt and other borrowings, net
|
| |
|
| |
|
| |
|
| |
$ 276.3 million
|
|
| |
Year Ended
December 31, 2019
|
2020
|
| |
$7,512
|
2021
|
| |
5,830
|
2022
|
| |
4,814
|
2023
|
| |
2,676
|
2024
|
| |
1,634
|
Thereafter
|
| |
854
|
Total
|
| |
$23,320
|
•
|
Base of $2,500 plus 25 basis points of outstanding UPB for total loans serviced.
|
•
|
Adjusted/Tangible Net Worth comprises of total equity less goodwill, intangible assets, affiliate receivables, deferred tax assets and certain pledged assets.
|
•
|
Base of $2,500 plus 35 basis points of the issuer’s total single-family effective outstanding obligations.
|
•
|
Adjusted/Tangible Net Worth comprises of total equity less goodwill, intangible assets, affiliate receivables, deferred tax assets and certain pledged assets.
|
•
|
3.5 basis points of total Agency servicing.
|
•
|
Incremental 200 basis points of total nonperforming Agency, measured as 90 plus day delinquencies, servicing in excess of 6% of the total Agency servicing UPB.
|
•
|
Allowable assets for liquidity may include: cash and cash equivalents (unrestricted); available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of GSEs, US Treasury Obligations); and unused/available portion of committed servicing advance lines.
|
•
|
Maintain liquid assets equal to the greater of $1,000 or 10 basis points of our outstanding single-family MBS.
|
Home Point Financial Corporation
|
||||||
|
| |
Adjusted Net Worth
|
| |
Net Worth Required
|
HUD
|
| |
$366,250
|
| |
$2,500
|
Ginnie Mae
|
| |
$366,250
|
| |
$93,583
|
Fannie Mae
|
| |
$366,250
|
| |
$137,945
|
Freddie Mac
|
| |
$366,250
|
| |
$137,945
|
Various States
|
| |
$366,250
|
| |
$0 - 1,000
|
|
| |
Year Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Repurchase reserve, at beginning of period
|
| |
$3,429
|
| |
$4,199
|
Additions
|
| |
4,276
|
| |
1,367
|
Charge-offs
|
| |
(3,741)
|
| |
(2,137)
|
Repurchase reserves, at end of period
|
| |
$3,964
|
| |
$3,429
|
Level Input:
|
| |
Input Definition:
|
Level 1
|
| |
Unadjusted, quoted prices in active markets for identical assets or liabilities.
|
Level 2
|
| |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability and are developed based on market data obtained from sources independent of the Company. These may include quoted prices for similar assets and liabilities, interest rates, prepayment speeds, credit risk and others.
|
Level 3
|
| |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity), unobservable inputs may be used. Unobservable inputs reflect the Company's own assumptions about the factors that market participants would use in pricing the asset or liability and are based on the best information available in the circumstances.
|
|
| |
Year Ended December 31, 2019
|
|||||||||
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
Assets:
|
| |
|
| |
|
| |
|
| |
|
Mortgage loans held for sale
|
| |
$—
|
| |
$1,551,136
|
| |
$—
|
| |
$1,551,136
|
Mortgage loans held for sale – EBO
|
| |
—
|
| |
—
|
| |
3,094
|
| |
3,094
|
Derivative assets (IRLCs)
|
| |
—
|
| |
—
|
| |
25,618
|
| |
25,618
|
Derivative assets (MBS forward trades)
|
| |
—
|
| |
1,750
|
| |
—
|
| |
1,750
|
Derivative assets (MSRs)
|
| |
—
|
| |
13,176
|
| |
—
|
| |
13,176
|
Mortgage servicing rights
|
| |
—
|
| |
—
|
| |
575,035
|
| |
575,035
|
Total assets
|
| |
$—
|
| |
$1,566,062
|
| |
$603,747
|
| |
$2,169,809
|
Liabilities:
|
| |
|
| |
|
| |
|
| |
|
Derivative liabilities (MBS forward trades)
|
| |
$—
|
| |
$5,634
|
| |
$—
|
| |
$5,634
|
Total liabilities
|
| |
$—
|
| |
$5,634
|
| |
$—
|
| |
$5,634
|
|
| |
Year Ended December 31, 2018
|
|||||||||
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
Assets:
|
| |
|
| |
|
| |
|
| |
|
Mortgage loans held for sale
|
| |
$—
|
| |
$416,522
|
| |
$—
|
| |
$416,522
|
Mortgage loans held for sale – EBO
|
| |
—
|
| |
—
|
| |
5,232
|
| |
5,232
|
Derivative assets (IRLCs)
|
| |
—
|
| |
—
|
| |
7,517
|
| |
7,517
|
Derivative assets (MBS forward trades)
|
| |
—
|
| |
28
|
| |
—
|
| |
28
|
Derivative assets (MSRs)
|
| |
—
|
| |
11,445
|
| |
—
|
| |
11,445
|
Mortgage servicing rights
|
| |
—
|
| |
—
|
| |
532,526
|
| |
532,526
|
Total assets
|
| |
$—
|
| |
$427,995
|
| |
$545,275
|
| |
$973,270
|
Liabilities:
|
| |
|
| |
|
| |
|
| |
|
Derivative liabilities (MBS forward trades)
|
| |
$—
|
| |
$6,980
|
| |
$—
|
| |
$6,980
|
Total liabilities
|
| |
$—
|
| |
$6,980
|
| |
$—
|
| |
$6,980
|
|
| |
Year Ended December 31, 2019
|
||||||
|
| |
MSRs
|
| |
IRLC
|
| |
EBO
|
Balance at beginning of period
|
| |
$532,526
|
| |
$7,517
|
| |
$5,232
|
Purchases, Sales, Issuances, Contributions and Settlements
|
| |
273,628
|
| |
—
|
| |
(1,358)
|
Change in fair value
|
| |
(232,647)
|
| |
18,101
|
| |
(63)
|
Transfers In/Out(1)
|
| |
1,528
|
| |
|
| |
(716)
|
Balance at end of period
|
| |
$575,035
|
| |
$25,618
|
| |
$3,095
|
|
| |
Year Ended December 31, 2018
|
||||||
|
| |
MSRs
|
| |
IRLC
|
| |
EBO
|
Balance at beginning of period
|
| |
$463,291
|
| |
$11,142
|
| |
$9,670
|
Purchases, Sales, Issuances, Contributions and Settlements
|
| |
129,753
|
| |
—
|
| |
(1,448)
|
Change in fair value
|
| |
(67,562)
|
| |
(3,625)
|
| |
1,097
|
Transfers In/Out(1)
|
| |
7,044
|
| |
|
| |
(4,087)
|
Balance at end of period
|
| |
$532,526
|
| |
$7,517
|
| |
$5,232
|
(1)
|
Transfers In/Out represents acquired assets and assets transferred out due to reclassification as REO, foreclosure or claims.
|
|
| |
Fair Value
|
| |
Principal
Amount Due
Upon Maturity
|
| |
Difference(1)
|
Balance at December 31, 2019
|
| |
$1,551,136
|
| |
$1,507,139
|
| |
$43,997
|
Balance at December 31, 2018
|
| |
$416,522
|
| |
$408,276
|
| |
$8,246
|
(1)
|
Represents the amount of gains related to changes in fair value of items accounted for using the fair value option included in Gain on sale, net within the consolidated statements of operations.
|
|
| |
Number of
Shares
|
| |
Weighted
Average
Exercise
Price
|
| |
Weighted
Average
Contractual
Life (Years)
|
| |
Weighted
Average
Grant Date
Fair Value
|
Outstanding at January 1, 2018
|
| |
2,707,200
|
| |
$10.00
|
| |
8.07
|
| |
$2.23
|
Granted
|
| |
1,350,625
|
| |
$10.26
|
| |
9.55
|
| |
$3.15
|
Exercised
|
| |
(3,000)
|
| |
$10.00
|
| |
—
|
| |
$3.07
|
Forfeited
|
| |
(815,625)
|
| |
$10.05
|
| |
7.41
|
| |
$2.59
|
Outstanding at December 31, 2018
|
| |
3,239,200
|
| |
$10.10
|
| |
7.48
|
| |
$2.52
|
Granted
|
| |
427,500
|
| |
$10.20
|
| |
9.67
|
| |
$1.88
|
Exercised
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Forfeited
|
| |
(374,825)
|
| |
$10.05
|
| |
6.15
|
| |
$2.56
|
Outstanding at December 31, 2019
|
| |
3,291,875
|
| |
$10.12
|
| |
7.15
|
| |
$2.41
|
|
| |
Number of
Shares
|
| |
Weighted Average
Grant Date
Fair Value
|
Non-vested at January 1, 2018
|
| |
2,361,600
|
| |
$2.25
|
Granted
|
| |
1,350,625
|
| |
$3.15
|
Vested
|
| |
(181,400)
|
| |
$2.10
|
Exercised
|
| |
(3,000)
|
| |
$3.07
|
Forfeited
|
| |
(815,625)
|
| |
$2.59
|
Non-vested at December 31, 2018
|
| |
2,712,200
|
| |
$2.60
|
Granted
|
| |
427,500
|
| |
$1.88
|
Vested
|
| |
(209,388)
|
| |
$2.24
|
Exercised
|
| |
—
|
| |
—
|
Forfeited
|
| |
(374,825)
|
| |
$2.56
|
Non-vested at December 31, 2019
|
| |
2,555,487
|
| |
$2.46
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Expected life (in years)
|
| |
8.3
|
| |
8.3
|
Risk-free interest rate
|
| |
1.70%-2.59%
|
| |
2.33%-2.95%
|
Expected volatility
|
| |
23.3%
|
| |
23.3%
|
Dividend yield
|
| |
—
|
| |
—
|
|
| |
Year Ended December 31, 2019
|
||||||
|
| |
Federal
|
| |
State
|
| |
Total
|
Current
|
| |
$(378)
|
| |
$22
|
| |
$(356)
|
Deferred
|
| |
(6,658)
|
| |
(2,486)
|
| |
(9,144)
|
Total income tax expense (benefit)
|
| |
$(7,036)
|
| |
$(2,464)
|
| |
$(9,500)
|
|
| |
Year Ended December 31, 2018
|
||||||
|
| |
Federal
|
| |
State
|
| |
Total
|
Current
|
| |
$(887)
|
| |
$—
|
| |
$(887)
|
Deferred
|
| |
(5,296)
|
| |
(1,752)
|
| |
(7,048)
|
Total income tax expense (benefit)
|
| |
$(6,183)
|
| |
$(1,752)
|
| |
$(7,935)
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Income/(Loss) before income taxes
|
| |
$(41,411)
|
| |
$(42,048)
|
Statutory federal income tax (21%)
|
| |
(8,697)
|
| |
(8,830)
|
State income tax expense, net of federal tax
|
| |
(2,073)
|
| |
(2,185)
|
Change in valuation allowance
|
| |
(64)
|
| |
(581)
|
Impact of tax rate change
|
| |
54
|
| |
924
|
Impact of equity investments
|
| |
705
|
| |
55
|
Other
|
| |
575
|
| |
132
|
Total income tax expense (benefit)
|
| |
$(9,500)
|
| |
$(10,485)
|
Effective tax rate
|
| |
22.9%
|
| |
24.9%
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Deferred tax asset
|
| |
|
| |
|
Federal NOL carryforward
|
| |
$62,988
|
| |
$60,069
|
State NOL carryforward
|
| |
14,062
|
| |
13,551
|
Installment sale – Natty Mac
|
| |
—
|
| |
24,473
|
Interest expense
|
| |
—
|
| |
1,330
|
Other
|
| |
5,873
|
| |
5,208
|
Total deferred tax asset
|
| |
82,923
|
| |
104,631
|
Deferred tax liability
|
| |
|
| |
|
MSR
|
| |
(49,205)
|
| |
(88,647)
|
Derivatives
|
| |
(6,687)
|
| |
(1,975)
|
Investment in Longbridge
|
| |
(4,457)
|
| |
—
|
Other
|
| |
—
|
| |
(507)
|
Total deferred tax liability
|
| |
(60,349)
|
| |
(91,129)
|
Valuation Allowance
|
| |
(1,907)
|
| |
(1,971)
|
Net tax asset
|
| |
$20,667
|
| |
$11,531
|
|
| |
Year Ended December 31, 2019
|
||||||||||||||||||
|
| |
Origination
|
| |
Servicing
|
| |
Segments
Total
|
| |
All Other
|
| |
Total
|
| |
Reconciliation
Item(1)
|
| |
Total
Consolidated
|
Revenue
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$200,646
|
| |
$(1,145)
|
| |
$199,501
|
| |
$—
|
| |
$199,501
|
| |
|
| |
$199,501
|
Loan fee income
|
| |
32,072
|
| |
—
|
| |
32,072
|
| |
40
|
| |
32,112
|
| |
|
| |
32,112
|
Loan servicing fees
|
| |
(846)
|
| |
145,074
|
| |
144,228
|
| |
—
|
| |
144,228
|
| |
|
| |
144,228
|
Change in FV of MSRs
|
| |
—
|
| |
(173,134)
|
| |
(173,134)
|
| |
—
|
| |
(173,134)
|
| |
|
| |
(173,134)
|
Interest income
|
| |
2,697
|
| |
18,883
|
| |
21,580
|
| |
(27,721)
|
| |
(6,141)
|
| |
|
| |
(6,141)
|
Other income
|
| |
—
|
| |
13
|
| |
13
|
| |
5,847
|
| |
5,847
|
| |
(2,701)
|
| |
3,159
|
Total U.S. GAAP Revenue
|
| |
$234,569
|
| |
$(10,309)
|
| |
$224,260
|
| |
$(21,834)
|
| |
$202,426
|
| |
$(2,701)
|
| |
$199,725
|
Contribution margin
|
| |
$89,456
|
| |
$24,593
|
| |
$114,049
|
| |
$(78,278)
|
| |
$35,771
|
| |
|
| |
|
(1)
|
The Company includes the income from its equity method investments in the All Other category. In order to reconcile to Total net revenue on the consolidated statements of operations, it must be removed as is presented above.
|
|
| |
Year Ended December 31, 2018
|
||||||||||||||||||
|
| |
Origination
|
| |
Servicing
|
| |
Segments
Total
|
| |
All Other
|
| |
Total
|
| |
Reconciliation
Item(1)
|
| |
Total
Consolidated
|
Revenue
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gain on loans, net
|
| |
$84,127
|
| |
$(59)
|
| |
$84,068
|
| |
$—
|
| |
$84,068
|
| |
|
| |
$84,068
|
Loan fee income
|
| |
18,462
|
| |
—
|
| |
18,462
|
| |
1,141
|
| |
19,603
|
| |
|
| |
19,603
|
Loan servicing fees
|
| |
—
|
| |
119,049
|
| |
119,049
|
| |
—
|
| |
119,049
|
| |
|
| |
119,049
|
Change in FV of MSRs
|
| |
—
|
| |
(47,312)
|
| |
(47,312)
|
| |
—
|
| |
(47,312)
|
| |
|
| |
(47,312)
|
Interest income
|
| |
6,028
|
| |
2,228
|
| |
8,256
|
| |
(20,563)
|
| |
(12,307)
|
| |
|
| |
(12,307)
|
Other income
|
| |
44
|
| |
(98)
|
| |
(54)
|
| |
1,419
|
| |
1,365
|
| |
(209)
|
| |
1,156
|
Total U.S. GAAP Revenue
|
| |
$108,661
|
| |
$73,808
|
| |
$182,469
|
| |
$(18,003)
|
| |
$164,466
|
| |
$(209)
|
| |
$164,257
|
Contribution margin
|
| |
$251
|
| |
$26,180
|
| |
$26,431
|
| |
$(78,618)
|
| |
$(52,187)
|
| |
|
| |
|
(1)
|
The Company includes the income from its equity method investments in the All Other segment. In order to reconcile to Total net revenue on the consolidated statements of operations, it must be removed as is presented above.
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Loss from continuing operations before income tax
|
| |
$(41,411)
|
| |
$(42,048)
|
Decrease (increase) in MSRs due to valuation assumptions
|
| |
74,481
|
| |
(10,348)
|
Income from equity method investment
|
| |
2,701
|
| |
209
|
Contribution margin, excluding change in MSRs due to valuation assumption
|
| |
$35,771
|
| |
$(52,187)
|
|
| |
December 31,
|
|||
|
| |
2019
|
| |
2018
|
Cash and cash equivalents
|
| |
$202
|
| |
$460
|
Investment in subsidiary
|
| |
380,961
|
| |
409,068
|
Equity method investment
|
| |
31,283
|
| |
28,701
|
Other assets
|
| |
486
|
| |
566
|
Total assets
|
| |
$412,932
|
| |
$438,795
|
Accounts payable
|
| |
$2,137
|
| |
$24
|
Deferred tax liabilities
|
| |
483
|
| |
—
|
Total liabilities
|
| |
2,620
|
| |
24
|
|
| |
|
| |
|
Equity:
|
| |
|
| |
|
Common stock (100 shares issued and outstanding, par value $.01 per share)
|
| |
—
|
| |
—
|
Additional paid in capital
|
| |
454,861
|
| |
454,110
|
Accumulated deficit
|
| |
(44,549)
|
| |
(15,339)
|
Total liabilities and equity
|
| |
$412,932
|
| |
$438,795
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Interest income
|
| |
$3
|
| |
$3
|
Net loss of subsidiaries
|
| |
(30,873)
|
| |
(24,494)
|
Total loss
|
| |
$(30,870)
|
| |
$(24,491)
|
Total expenses
|
| |
390
|
| |
(201)
|
Income (loss) before tax
|
| |
(31,260)
|
| |
(24,290)
|
Income tax provision
|
| |
(651)
|
| |
(116)
|
Income from equity method investments
|
| |
2,701
|
| |
209
|
Total net loss
|
| |
$(29,210)
|
| |
$(24,197)
|
|
| |
Years Ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Cash flows from operating activities:
|
| |
|
| |
|
Net Income
|
| |
$(29,210)
|
| |
$(24,197)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
| |
|
| |
|
Net loss of subsidiaries
|
| |
30,873
|
| |
24,494
|
Depreciation
|
| |
—
|
| |
13
|
(Gain) on equity investment
|
| |
(2,701)
|
| |
(2,709)
|
Decrease in deferred taxes, net
|
| |
1,032
|
| |
51
|
Increase in prepaid expenses and other assets
|
| |
(468)
|
| |
(1,428)
|
(Decrease) increase in accounts payable and other assets
|
| |
2,113
|
| |
(282)
|
Total operating cash flows
|
| |
$1,639
|
| |
$(4,058)
|
|
| |
|
| |
|
Cash flows from investing activities:
|
| |
|
| |
|
Purchases of property and equipment, net of disposals
|
| |
—
|
| |
23
|
Investment in subsidiaries
|
| |
(1,896)
|
| |
(38,944)
|
Total investing cash flows
|
| |
$(1,896)
|
| |
$ (38,921)
|
|
| |
|
| |
|
Cash flows from financing activities:
|
| |
|
| |
|
Capital contributions from parent
|
| |
—
|
| |
42,970
|
Investment in subsidiaries
|
| |
|
| |
|
Total net cash (used in) provided by financing activities
|
| |
$—
|
| |
$42,970
|
|
| |
|
| |
|
Net increase in cash, cash equivalents and restricted cash
|
| |
$(257)
|
| |
$(9)
|
Cash, cash equivalents and restricted cash at beginning of period
|
| |
$460
|
| |
$469
|
Cash, cash equivalents and restricted cash at end of period
|
| |
$203
|
| |
$460
|
|
| |
|
| |
|
Cash paid for interest
|
| |
—
|
| |
—
|
Cash paid for income taxes
|
| |
—
|
| |
54
|
|
| |
Percentage of
Origination
|
2019
|
| |
|
State:
|
| |
|
California
|
| |
22.9%
|
Florida
|
| |
7.0%
|
New Jersey
|
| |
5.2%
|
2018
|
| |
|
State:
|
| |
|
California
|
| |
22.2%
|
Florida
|
| |
9.7%
|
New Jersey
|
| |
8.3%
|
Illinois
|
| |
7.0%
|
|
| |
Years Ended December 31,
|
|||||||||
|
| |
2019
|
| |
2018
|
||||||
GNMA
|
| |
$ 10,066,347
|
| |
47.5%
|
| |
$5,000,967
|
| |
41.6%
|
FNMA
|
| |
6,609,090
|
| |
31.2%
|
| |
2,684,593
|
| |
22.0%
|
FHLMC
|
| |
3,691,617
|
| |
17.4%
|
| |
3,994,671
|
| |
33.3%
|
Other
|
| |
816,779
|
| |
3.9%
|
| |
368,447
|
| |
3.1%
|
|
| |
$ 21,183,833
|
| |
100%
|
| |
$ 12,012,678
|
| |
100%
|
|
| |
As Reported
December 31,
2019
|
| |
Dividends
Adjustment(1)
|
| |
Pro Forma
|
Accounts payable and accrued expenses
|
| |
$39,793
|
| |
154,500
|
| |
194,239
|
Total liabilities
|
| |
$ 2,498,455
|
| |
154,500
|
| |
2,652,955
|
Total shareholder’s equity
|
| |
$410,312
|
| |
(154,500)
|
| |
255,812
|
(1)
|
The Company paid a dividend on October 5, 2020 of $154.5 million, which was fully funded through the use of cash on hand. For purposes of the unaudited pro forma combined balance sheets, the payment of the dividend is reflected as a reduction to shareholders’ equity of $154.5 million and the recognition of a payable of $154.5 million.
|
Item 13.
|
Other Expenses of Issuance and Distribution.
|
|
| |
Amount to
be paid
|
SEC registration fee
|
| |
$10,910
|
FINRA filing fee
|
| |
15,500
|
Nasdaq listing fee
|
| |
*
|
Legal fees and expenses
|
| |
*
|
Accounting fees and expenses
|
| |
*
|
Printing and engraving expenses
|
| |
*
|
Transfer agent and registrar fees
|
| |
*
|
Miscellaneous fees and expenses
|
| |
*
|
Total
|
| |
$*
|
*
|
To be completed by amendment.
|
Item 14.
|
Indemnification of Directors and Officers.
|
Item 15.
|
Recent Sales of Unregistered Securities.
|
Item 16.
|
Exhibits and Financial Statement Schedules.
|
(A)
|
Exhibits.
|
Exhibit Number
|
| |
Description
|
1.1**
|
| |
Form of Underwriting Agreement.
|
3.1**
|
| |
Form of Amended and Restated Certificate of Incorporation of the Registrant.
|
3.2**
|
| |
Form of Amended and Restated Bylaws of the Registrant.
|
4.1**
|
| |
Form of Registration Rights Agreement among the Registrant and certain of its stockholders.
|
5.1**
|
| |
Opinion of Simpson Thacher & Bartlett LLP.
|
| |
Master Participation Agreement, dated as of May 31, 2017, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant.
|
|
| |
Confirmation and Amendment of Participation Agreement, dated as of May 29, 2020, by and between Home Point Financial Corporation, as seller, and Merchants Bank of Indiana, as participant.
|
|
| |
Master Repurchase Agreement and Securities Contract, dated as of June 3, 2020, by and between Home Point Financial Corporation, as seller, Morgan Stanley Bank, N.A., as buyer, and Morgan Stanley Mortgage Capital Holdings LLC, as agent.
|
|
| |
Amendment No. 1 to Master Repurchase Agreement and Securities Contract, dated as of August 14, 2020, by and between Home Point Financial Corporation, as seller, Morgan Stanley Bank, N.A., as buyer, and Morgan Stanley Mortgage Capital Holdings LLC, as agent.
|
Exhibit Number
|
| |
Description
|
| |
Amendment No. 2 to Master Repurchase Agreement and Securities Contract, dated as of November 18, 2020, by and between Home Point Financial Corporation, as seller, Morgan Stanley Bank, N.A., as buyer, and Morgan Stanley Mortgage Capital Holdings LLC, as agent.
|
|
| |
Amendment No. 3 to Master Repurchase Agreement and Securities Contract, dated as of December 23, 2020, by and between Home Point Financial Corporation, as seller, Morgan Stanley Bank, N.A., as buyer, and Morgan Stanley Mortgage Capital Holdings LLC, as agent.
|
|
| |
Master Repurchase Agreement, dated as of October 23, 2020, by and among Credit Suisse First Boston Mortgage Capital LLC, as administrative agent, Credit Suisse AG, as buyer, Alpine Securitization LTD, as buyer, the other buyers from time to time party thereto, Home Point Financial Corporation, as seller, and each underlying entity joined thereto from time to time.
|
|
| |
Mortgage Warehouse Agreement, dated as of August 5, 2020, by and between Home Point Financial Corporation, as seller, and Texas Capital Bank, National Association.
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Addendum to Mortgage Warehouse Agreement (New York Committed Facility), effective as of September 2, 2020, by and between Home Point Financial Corporation, as seller, and Texas Capital Bank, National Association.
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Amended and Restated Master Repurchase Agreement, dated as of September 18, 2020, by and among Home Point Financial Corporation, as seller, TIAA, FSB, as administrative agent and a buyer, and the other buyers from time to time party thereto.
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Amendment No. 1 to Amended and Restated Master Repurchase Agreement and Amended and Restated Pricing Letter, dated as of December 15, 2020, by and among Home Point Financial Corporation, as seller, TIAA, FSB, as administrative agent and a buyer, and Capital One, National Association, as a buyer.
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Master Repurchase Agreement, dated as of October 28, 2015, by and between UBS Bank USA, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 1 to Master Repurchase Agreement, dated as of May 4, 2016, by and between UBS Bank USA, as buyer, and Home Point Financial Corporation, as seller.
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Assignment and Amendment No. 2 to Master Repurchase Agreement and Assignment and Amendment No. 8 to Pricing Letter, dated September 15, 2016, by and among Home Point Financial Corporation, as seller, UBS Bank USA, as assignor, and UBS AG, as assignee.
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Amendment No. 3 to Master Repurchase Agreement, dated as of September 28, 2016, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 4 to Master Repurchase Agreement, dated as of January 5, 2017, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 5 to Master Repurchase Agreement, dated as of October 6, 2017, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 6 to Master Repurchase Agreement, dated as of November 9, 2017, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 7 to Master Repurchase Agreement, dated as of May 7, 2018, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 8 to Master Repurchase Agreement, dated as of July 16, 2018, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 9 to Master Repurchase Agreement, dated as of October 19, 2018, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 10 to Master Repurchase Agreement, dated as of February 25, 2019, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 11 to Master Repurchase Agreement, dated as of September 20, 2019, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 12 to Master Repurchase Agreement, dated as of December 12, 2019, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 13 to Master Repurchase Agreement, dated as of July 6, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 14 to Master Repurchase Agreement, dated as of September 18, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Exhibit Number
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Description
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Amendment No. 15 to Master Repurchase Agreement, dated as of October 6, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Amendment No. 16 to Master Repurchase Agreement, dated as of December 22, 2020, by and between UBS AG, as buyer, and Home Point Financial Corporation, as seller.
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Master Repurchase Agreement and Securities Contract, dated as of November 23, 2015, by and between Wells Fargo Bank, N.A., as buyer, and Home Point Financial Corporation, as seller.
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Master Repurchase Agreement, dated as of October 1, 2020, by and between Amherst Pierpont Securities LLC, as buyer, and Home Point Financial Corporation, as seller.
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Master Repurchase Agreement, dated as of August 14, 2020, by and between Barclays Bank PLC, as purchaser and agent, and Home Point Financial Corporation, as seller.
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Amended and Restated Credit Agreement, dated as of July 11, 2019, by and among Home Point Financial Corporation, as borrower, Home Point Capital Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto.
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First Amendment to Amended and Restated Credit Agreement, dated as of November 27, 2019, by and among Home Point Financial Corporation, as borrower, Home Point Capital Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto.
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Second Amendment to Amended and Restated Credit Agreement, dated as of August 5, 2020, by and among Home Point Financial Corporation, as borrower, Home Point Capital Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto.
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10.11**
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Form of Stockholders Agreement.
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Employment Agreement, dated March 31, 2015, by and between Home Point Capital Inc. and William A. Newman.
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Home Point Capital LP 2015 Option Plan, dated as of March 31, 2015.
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Amendment No. 1 to Home Point Capital LP 2015 Option Plan, dated January 31, 2020.
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10.15**†
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Form of the 2021 Incentive Plan.
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10.16**†
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Form of Substitute Option Agreement under the 2021 Incentive Plan.
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10.17**†
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Form of 2021 Employee Stock Purchase Plan.
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Subsidiaries of the Registrant.
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Consent of BDO USA, LLP.
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23.2**
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Consent of Simpson Thacher & Bartlett LLP (included as part of Exhibit 5.1).
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Consent of Laurie S. Goodman to be named as a director nominee.
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Consent of Timothy R. Morse to be named as a director nominee.
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Power of Attorney (included on signature pages to this registration statement).
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*
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Filed herewith.
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**
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To be filed by amendment.
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†
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Compensatory arrangements for director(s) and/or executive officer(s).
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+
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Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.
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(B)
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Financial Statement Schedules.
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Item 17.
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Undertakings.
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(1)
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For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus as filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
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(2)
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For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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Home Point Capital Inc.
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By:
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/s/ William A. Newman
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Name:
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William A. Newman
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Title:
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President and Chief Executive Officer
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Signature
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Capacity
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/s/ William A. Newman
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President, Chief Executive Officer and Director
(Principal Executive Officer)
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William A. Newman
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/s/ Mark E. Elbaum
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Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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Mark E. Elbaum
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/s/ Agha S. Khan
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Director
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Agha S. Khan
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/s/ Stephen A. Levey
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Director
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Stephen A. Levey
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/s/ Eric L. Rosenzweig
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Director
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Eric L. Rosenzweig
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Exhibit 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.
MASTER PARTICIPATION AGREEMENT
between
HOME POINT FINANCIAL CORPORATION
(“Seller”)
and
MERCHANTS BANK OF INDIANA
(“Participant”)
May 31, 2017
MASTER PARTICIPATION AGREEMENT
THIS MASTER PARTICIPATION AGREEMENT (the “Agreement”) is made as of May 31, 2017, by and between HOME POINT FINANCIAL CORPORATION, having a principal place of business at 1194 Oak Valley Drive, Suite 80, Ann Arbor, Michigan 48108; Attention: [***] (“Seller”), and MERCHANTS BANK OF INDIANA, having an office at 11555 N. Meridian Street, Suite 400, Carmel, Indiana 46032; Attention: [***] (“Participant”).
WITNESSETH:
WHEREAS, Seller is in the business of originating qualifying, single-family mortgage loans, including conforming Federal National Mortgage Association (“FNMA”) loans, Federal Home Loan Mortgage Corporation (“FHLMC”) loans, and loans insured by the Federal Housing Administration (“FHA”) or guaranteed by the Veterans Administration (“VA”), or the United States Department of Agriculture (“USDA”), and single-family mortgage loans that comply with all applicable Agency requirements other than loan amount (“Jumbo Loans”), specifically excluding, in each case, any and all construction loans, loans secured by manufactured homes, co-operatives and high-cost loans (each hereinafter referred to individually as a “Mortgage Loan” and collectively as the “Mortgage Loans”) (“FNMA”, “FHLMC”, “FHA”, “VA”, and “USDA” are hereinafter from time to time referred to individually as an “Agency” or collectively as the “Agencies”, and Mortgage Loans that conform with applicable FNMA or FHLMC underwriting requirements, or are insured by the FHA, or guaranteed by the VA or USDA are referred to individually as an “Agency Loan” and collectively as “Agency Loans”);
WHEREAS, Seller from time to time wishes to sell to Participant and Participant from time to time wishes to purchase an undivided beneficial ownership interest in Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, Seller and Participant agree as follows:
I. OWNERSHIP INTEREST; PARTICIPATION CERTIFICATES.
l.l Acquisition by Participant. Subject to the terms and conditions of this Agreement and in reliance on representations, warranties and covenants contained herein, Participant establishes with Seller the terms on which Participant shall purchase an undivided beneficial ownership interest in a Mortgage Loan when Participant so elects. The percentage of Participant’s undivided interest in any Mortgage Loan shall be the percentage that is equal at any time to the percentage that the unpaid balance of the amount paid by Participant bears to the unpaid balance of the Mortgage Loan (the “Ownership Interest”). Participant’s Ownership Interest for any Mortgage Loan may vary from time to time. Each date of Participant’s acquisition of an Ownership Interest is referred to as a “Funding Date”. The purchase of an Ownership Interest in a Mortgage Loan shall be subject to (a) the review and approval by Participant of the Mortgage Loan Documents (hereinafter defined) and such other documents relating to the Mortgage Loan as Participant deems appropriate, (b) the delivery to Participant of
an original Participation Certificate, hereinafter defined, for Participant’s Ownership Interest, (c) Participant’s satisfaction with Seller’s ability to dispose of the Mortgage Loan through a sale or securitization of the Mortgage Loan pursuant to one or more binding agreements with an independent third party or parties (the “Take-Out”) to an investor acceptable to Participant (the “Investor”), (d) Participant’s satisfaction with the borrower’s creditworthiness, and (e) the Mortgage Loan having terms acceptable to Participant. The purchase price for the Ownership Interest in each Mortgage Loan shall be an amount equal to (a) the least of (i) Participant’s Ownership Interest of the unpaid principal balance of the Mortgage Loan, (ii) the amount advanced by Seller at the closing of the Mortgage Loan net of all amounts credited to Seller or (iii) the amount to be paid by the Investor in accordance with Section 2.2(gg), plus (b) the percentage of Participant ’s Ownership Interest of the amount of interest accrued on the Mortgage Loan. As a guidance to Participant (and not as a commitment), Participant does not expect the aggregate amount of all of its Ownership Interests hereunder ever to exceed Six Hundred Million and 00/100 Dollars ($600,000,000.00).
1.2 Purchase and Sale Treatment. It is the intention of the parties that each transaction described in this Agreement shall constitute a purchase and sale of the Ownership Interest and not a loan with pledge of security.
1.3 Seller to Assign Mortgage Loan Documents. Subject to compliance with the requirements of the Investor, Seller shall transfer and assign to Participant originals of all documents relating to each Mortgage Loan including without limitation, the related Note (defined hereinafter), Mortgage or Deed of Trust (the “Mortgage”), other security documents, UCC financing statements, title and hazard insurance policies (the “Mortgage Loan Documents”) within two (2) business days following the Funding Date. The title company handling the closing of any Mortgage Loan shall be party to a current Funds Recipient Agreement (or similar agreement) with Participant (the “Funds Receipt Agreement”), evidence of such shall be provided to Participant upon request. The transfer and assignment of the Note shall be by an assignment in blank executed by Seller pursuant to security procedures and in accordance with industry standards. At the election of Participant, the Mortgage Loan Documents either shall be delivered directly to a custodian or delivered to Participant for later delivery to a custodian. The title company shall be directed to deliver the Mortgage Loan Documents (with the exception of the original Mortgage which will be delivered to be recorded) to Lender within two (2) business days of the applicable Funding Date and in accordance with the Funds Recipient Agreement between the Title Company and Participant.
1.4 Examination of Mortgage File. Prior to the Funding Date, if requested to do so by the Participant, the Seller shall deliver to the Participant or its designee, for examination, copies of the Mortgage Loan Documents to be executed by the mortgagor and the Seller pertaining to each Mortgage Loan.
1.5 Participation Certificates.
(a) The Ownership Interest for each Mortgage Loan shall be evidenced by one or more certificates substantially in the form attached hereto as Exhibit B (each a “Participation Certificate”).
(b) A Participation Certificate shall set forth for the Mortgage Loan (i) the name of the mortgagor; (ii) description and address of mortgaged property and any improvement thereon
(“Mortgaged Property”); (iii) the outstanding principal balance of the related promissory note (“Note”); (iv) the interest rate borne by such Note; and (v) such other data as Participant may from time to time request.
(c) Seller shall maintain at its office a certificate register (the “Certificate Register”) showing all pertinent information with respect to each Participation Certificate.
(d) Seller shall provide a copy of the Certificate Register to Participant upon request.
(e) Any Participation Certificate may be re-issued in the event of a transfer by Participant. Prior to due presentation of a Participation Certificate for registration of transfer, Seller shall treat Participant as the owner of such Participation Certificate and the Ownership Interest relating thereto.
(f) In the event of any mutilated, lost, destroyed, or stolen Participation Certificate, Seller shall execute and deliver a replacement Participation Certificate of like tenor and interest, upon Participant: (i) either surrendering any mutilated Participation Certificate to Seller, or (ii) providing evidence to Seller’s satisfaction of the loss, destruction, or theft of any Participation Certificate, as applicable and delivering a representation regarding such loss, destruction or theft, together with such indemnity as may be required by Seller, Seller shall issue a replacement Participation Certificate. Any replacement Participation Certificate issued as provided herein shall constitute, absent fraud, complete and indisputable evidence of ownership of the Ownership Interest as if originally issued, whether or not the mutilated, destroyed, lost, or stolen Participation Certificate shall be subsequently found at any time.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS.
2.1 General Representations, Warranties and Covenants of Seller. Seller represents, warrants, and covenants to Participant that at the time of this Agreement and at the time of each purchase of an Ownership Interest:
(a) Seller is duly organized, and is and shall continue to be existing, under the laws of the jurisdiction of its organization;
(b) Seller is, and to the extent necessary to perform its obligations under this Agreement shall continue to be, duly authorized and qualified to transact business in the jurisdictions where the Mortgaged Properties are located or not required to be so authorized; Seller possesses and shall continue to possess all requisite authority, power, licenses, permits, franchises, and approvals to conduct its business and to execute, deliver, and comply with its obligations under this Agreement;
(c) The execution, delivery and performance of this Agreement by Seller will not: (i) violate the articles of incorporation or by-laws of Seller or any resolution or other instrument governing its operations or any laws which violation could have any material adverse effect upon the validity, performance, and enforceability of any of the terms of this Agreement applicable to Seller, or (ii) constitute a default (or any event which, with notice or lapse of time or both, would
constitute a default) under any contract, agreement, or other instrument to which Seller is a party or which is applicable to any of its assets;
(d) This Agreement constitutes a valid, legal, and binding obligation of Seller, enforceable in accordance with its terms and no consent, approval or authorization of any governmental authority is required for the execution, delivery or performance of, or compliance by Seller with, this Agreement or the consummation of any other transaction contemplated hereby, except as has been duly obtained; and
(e) The Seller is, and throughout the term of this Agreement shall remain, approved and in good standing with the Agencies, qualified under applicable Agency requirements to service Agency insured or guaranteed mortgage loans; the Seller shall not do anything or permit any action, directly or indirectly, which may result in Seller’s loss of qualification as an Agency approved mortgagee or issuer in good standing or which may result in a negative designation from an Agency or an Investor, including without limitation, anything which could result in the Seller being debarred or placed on a watch-list.
(f) Upon request, the Seller shall provide Participant a weekly written analysis of the status of the then existing Mortgage Loans and corresponding Take-outs and a weekly pipeline report.
2.2 Mortgage Loan Representations, Warranties and Covenants of Seller. Seller further represents, warrants, and covenants to Participant that with respect to each Mortgage Loan as of each Funding Date:
(a) The information pertaining to such Mortgage Loan set forth in the Participation Certificate is true, correct and complete in all material respects as of the date provided, to the best of Seller’s knowledge.
(b) The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Loan and there has been no delinquency in any payment by the mortgagor thereunder.
(c) There are no delinquent taxes, ground rents, water charges, sewer rents, assessments or other outstanding charges affecting the Mortgaged Property.
(d) The terms of the Note and the Mortgage have not been impaired, waived, altered or modified in any respect. No mortgagor has been released, in whole or in part.
(e) The Note and the Mortgage are not subject to any right of rescission, set-off, abatement, diminution, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Note or the Mortgage, or the exercise of any right thereunder, render the Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, abatement, diminution, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, abatement, diminution, counterclaim or defense has been asserted with respect thereto.
(f) All improvements constituting a part of the Mortgaged Property are insured by a policy from an insurer acceptable to the Investor and, in the case of an Agency Loan, the applicable Agency, against loss by fire and other hazards. Such policy is generally acceptable to prudent mortgage lending institutions and has a term and is an amount as required by the Investor and, in the case of an Agency Loan, the applicable Agency. If the Mortgaged Property is in an area then identified in the Federal Register by the Flood Emergency Management Agency as having special flood hazards (and such flood insurance is then available), there is in effect a flood insurance policy meeting the requirements, in the case of an Agency Loan, of the applicable Agency, and in all cases, of the Investor and the current guidelines of the Federal Insurance Administration with a financially responsible insurance carrier that satisfies the requirements of the Investor and, in the case of an Agency Loan, the applicable Agency. All such individual insurance policies (collectively, the “hazard insurance policy”) shall contain a “standard” or “New York” mortgagee clause naming the Seller, its successors and assigns as mortgagee, provide for at least thirty (30) days’ prior written notice to the Seller of any cancellation thereof, and all premiums thereon have been paid. The Mortgage obligates the mortgagor thereunder to maintain the hazard insurance policy at the mortgagor’s cost and expense, and upon the mortgagor’s failure to do so, authorizes the holder of the mortgage to obtain and maintain such insurance at the mortgagor’s cost and expense and to seek reimbursement therefor from the mortgagor.
(g) 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.
(h) The Mortgage has not been satisfied, canceled, subordinated or rescinded, 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 satisfaction, cancellation, subordination, rescission or release.
(i) Unless otherwise agreed to by Participant, the mortgagor has fee simple estate in and to the Mortgaged Property and the Mortgaged Property consists of a single parcel of real property with a detached single family residence erected thereon, or an individual residential condominium unit, all of which constitute real property under the laws of the State in which the Mortgaged Property is located and Seller is qualified to do business.
(j) The Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged Property (including, without limitation, all buildings constituting a part of the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or affixed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing). Such lien is subject only to (a) the lien of current real property taxes and assessments not yet due and payable, (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording which are (i) acceptable to mortgage lending institutions generally and any applicable Agency, (ii) specifically referred to in the Participant’s title insurance policy delivered to Seller and (iii) referred to or otherwise considered in the appraisal made for Seller or which do not adversely affect the appraised value of the Mortgage Property as set forth in such appraisal and (c) 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, the use, enjoyment, value or marketability of the related Mortgaged Property, or prevent realization of the benefits provided by any mortgage insurance or guaranty. 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.
(k) The Note and the Mortgage are genuine, and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally.
(i) All parties to any agreement affecting the Mortgage Loan, including, but not limited to the mortgagor, had legal capacity to enter into such agreement and to execute and deliver such agreement and each such agreement has been duly and properly authorized, executed and delivered by such parties.
(m) The proceeds of the Mortgage Loan have been fully disbursed and there is no obligation or requirement for future advances thereunder by the holder of the Mortgage Loan, 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 complied with.
(n) The Note and the Mortgage have not been assigned or pledged by the Seller except to Participant as provided herein. The Seller or the correspondent lender from which it purchased the Mortgage Loan, or their respective agents, or the title company handling the closing of the Mortgage Loan, have had continuous sole and complete possession of all the Mortgage Loan Documents prior to the Funding Date. At the time of the sale of the Ownership Interest in the Mortgage Loan to Participant, the Seller had good and marketable title thereto. Seller shall not sell a participation or other interest in the Mortgage Loan to any party other than Participant without Participant’s prior written consent.
(o) In the case of a conventional Mortgage Loan, (a) the Loan-to-Value Ratio either (i) is not more than [***] or (ii) is not more than [***] and the excess over [***] is and will be insured by a policy of primary mortgage guaranty insurance issued by a mortgage guaranty insurer acceptable to FNMA or FHLMC until the Loan-to-Value Ratio is reduced below [***] or otherwise meets guidelines for an applicable FNMA or FHLMC product (e.g., DU Refi Plus), (b) the mortgage interest rate for the Mortgage Loan as set forth on the Participation Certificate is net of any such insurance premium, and (c) all provisions of any primary mortgage guaranty insurance policy have been and are being complied with and such policy is in full force and effect and all premiums due thereunder have been paid. Any Mortgage Loan subject to any such policy of primary mortgage guaranty insurance obligates the mortgagor thereunder to maintain such insurance and to pay all premiums and charges in connection therewith. In the case of a Jumbo Loan, the Loan-to-Value Ratio is within the limits set forth in the underwriting guidelines of the Investor.
(p) Each Mortgage Loan is covered by an American Land Title Association form of title insurance policy or other generally acceptable form of title insurance policy acceptable, in the case of an Agency Loan, to the applicable Agency, and to any applicable insurer or guarantor
of the Mortgage Loan, issued by a title insurer acceptable, in the case of an Agency Loan, to the applicable Agency, and that is qualified to do business in the state of the Mortgaged Property, insuring the Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan. The Seller is the sole insured under such title insurance policy, and such title insurance policy is in full force and effect. No claims have been made under such title insurance policy and no holder of the Mortgage Loan, including the Seller, has done or omitted to do anything which would impair the coverage of such title insurance policy.
(q) If the Mortgage Loan is insured by the FHA or guaranteed by the VA, or USDA, it shall be guaranteed or insured for the maximum amount permitted and all necessary steps shall be taken to make and keep such guaranty or insurance valid, binding and enforceable, and such guaranty or insurance is the valid, binding and enforceable obligation of the VA, USDA or the FHA, as the case may be, to the full extent thereof, without surcharge, set-off or defense.
(r) There is no default, breach, violation, or event of acceleration existing under the Note or Mortgage and no event which, with the passage of time or the giving of notice, or both, would constitute such a default, breach, violation or event of acceleration; and neither the Seller nor any person having or having had an interest therein has waived any such default, breach, violation or event of acceleration.
(s) There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that could give rise to any such lien) affecting the related Mortgaged Property which are or may be liens prior to, or equal with, the lien of the related Mortgage and the Mortgage requires the mortgagor promptly to cause any such liens, as well as liens which are junior to the lien of the Mortgage, to be removed.
(t) All improvements which were considered in determining the appraised value of the related Mortgaged Property lie wholly within the boundary and building restriction lines of the Mortgaged Property and no improvements on adjoining properties encroached upon the Mortgaged Property in any respect so as to affect the marketability of the Mortgaged Property.
(u) The Mortgage Loan was originated by or through the Seller.
(v) The Note is payable monthly in self-amortizing installments of principal and interest, with interest payable in arrears, providing for full amortization by maturity or a balloon payment, over an original term in compliance with the requirements of the applicable Agency. The original principal amount of the Note was not more than the amount prescribed by Participant. The Mortgage contains customary and enforceable provisions for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event the related Mortgaged Property is sold without the prior consent of the mortgagee thereunder.
(w) The Mortgaged Property is free of damage and waste and there is no proceeding pending or, to the best of the knowledge of the Seller, threatened, for the total or partial condemnation or taking by eminent domain thereof.
(x) The Mortgage contains customary and enforceable provisions that are sufficient for the realization against the Mortgaged Property of the benefits of the security provided
thereby. There is no homestead or other exemption available to the mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or under a power of sale, or the right to foreclose the Mortgage.
(y) The Mortgage Loan Documents relating to the Mortgage Loan include all of the documents required by, and such documents are in the form required by, all applicable underwriting guidelines of the Participant and, in the case of an Agency Loan, the applicable Agency.
(z) The Mortgage Loan Documents relating to the Mortgage Loan satisfy all of the terms and conditions required by the Investor.
(aa) The Note is not, and has not been, secured by any collateral except the lien of the related Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (j) above and the Mortgage was not given as collateral or security for the performance of obligations of any person other than the mortgagor.
(bb) The Mortgage Loan meets the requirements of the Investor.
(cc) Neither the Seller nor the mortgagor has made any statement or taken any other action that would impair or invalidate the coverage provided by any private mortgage guaranty insurance, FHA insurance, or VA or USDA guaranty, or any hazard, title or other insurance policy relating to the Mortgage Loan or the Mortgaged Property.
(dd) The Seller has no knowledge of any circumstance or condition with respect to the Mortgage Loan, the Mortgaged Property, the mortgagor or the mortgagor’s credit standing that can reasonably be expected to cause the Mortgage Loan to become delinquent or adversely affect the value or marketability of the Mortgage Loan.
(ee) Seller’s interest in the Mortgage Loan is hereby duly and validly pledged by the Seller under this Agreement to provide evidence and notice of Participant’s Ownership Interest and to secure Seller’s obligations in the event of a breach of any representation, warranty or covenant of Seller under this Agreement, and this Agreement, together with such pledge and delivery, creates a valid and perfected first priority security interest in respect of Seller’s interest in the Mortgage Loan and all proceeds, products and profits derived therefrom, and incidents thereto, including, without limitation, all accounts, general intangibles, instruments, moneys, goods, insurance proceeds and other tangible or intangible property received upon liquidation thereof and, except for the filing by Participant of a financing statement on Form UCCI in the appropriate recording office, no further action is required to create, preserve and perfect such security interest. The foregoing pledge by Seller to Participant of a security interest shall not be dispositive as to the accounting treatment of the transactions contemplated hereby.
(ff) There is no litigation pending or, to the Seller’s knowledge, threatened, which, if determined adversely to the Seller, would adversely affect the execution, delivery or enforceability of this Agreement, assignment of Mortgage, the sale of a participation interest in any Mortgage Loan to Participant or the ability of the Seller to service the Mortgage Loans hereunder in accordance with the terms hereof or which would have a material adverse effect on the financial condition of the Seller.
(gg) Seller has entered into one or more binding agreements with an Investor that will result in the purchase or securitization of the Mortgage Loan for an amount equal to or greater than the balance of the Mortgage Loan and interest thereon; Seller shall at all times be approved and in good standing with the Agencies with full right to take such actions and discharge such responsibilities as are conferred by such status, and in particular to originate the Mortgage Loan and deliver it to the Investor, and the Mortgage Loan and all Mortgage Loan Documents shall comply in all respects with the requirements of the Investor.
(hh) Seller shall sell each Mortgage Loan or issue mortgage-backed securities for the Mortgage Loan to an Investor for an amount equal to or greater than the unpaid balance of the Mortgage Loan and interest thereon (the “Minimum Price”) within [***] days of the Funding Date for the Ownership Interest; provided, however, if a Mortgage Loan has not been sold to an Investor within [***] of the Funding Date as required, then on the [***] day following the Funding Date, Seller shall pay to Participant the Minimum Price with respect to such Mortgage Loan calculated as of such date.
(ii) All necessary actions have been taken to qualify the Mortgage Loans for funding by the Investor. The sale of the Ownership Interest in the Mortgage Loans, as evidenced by the Participation Certificate, shall at all times be permitted by applicable regulations of the Investor or by a waiver of such regulations.
2.3 Participant in Reliance; Survival. Participant is purchasing the Ownership Interest in reliance upon the representations, covenants and warranties of Seller, and Seller’s full and faithful compliance with all of the terms, covenants and conditions of this Agreement. The representations, warranties, and covenants of Seller set forth in this Section shall survive this Agreement and shall be reaffirmed by Seller upon the execution of the Commitment Letter.
3. SERVICING.
3.1 Servicing Standards. Seller shall take all actions necessary to service the Mortgage Loans in accordance with customary mortgage banking practices of prudent lending institutions and such actions as a reasonably prudent lender would take in regard to loans held for its own account, all subject to and in accordance with the provisions of this Agreement. Subservicing of a Mortgage Loan by a third party shall not occur without Participant’s written consent. Seller may, with prior written approval of Participant, service the Mortgage Loan through a subservicer or retain an independent contractor to perform certain servicing functions; provided, however, in the event any servicing is performed by such subservicer or any functions performed by such independent contractor, Seller shall remain liable for its servicing duties and obligations under this Agreement and for the manner in which they are exercised by such subservicer or independent contractor.
3.2 Collections and Application of Mortgage Payments; Certification. Seller shall:
(a) Proceed diligently to collect all payments due under the Mortgage Loan Documents as they come due and to assure the performance of all material terms, covenants and conditions of the Mortgage Loan Documents;
(b) In the case of an Agency Loan, timely file a claim for and collect the applicable Agency guaranty or insurance in the event of a default in a Mortgage Loan (in filing a claim, Seller shall not elect to receive debentures).
(c) Hold and appropriately monitor and disburse all Mortgage Loan escrows;
(d) Keep a complete and accurate account of all sums collected by Seller from the mortgagor and the application of sums;
(e) Accept prepayments on the Note from the mortgagor only to the extent expressly permitted in the Note or Mortgage and then only if such prepayments include any applicable prepayment penalty or other fee, and accept condemnation and hazard insurance proceeds in accordance with the Mortgage Loan Documents and applicable law;
(f) Segregate all funds received pursuant to the Mortgage Loan Documents and deposit such funds in a trust or custodial account with an institution whose accounts are insured by an agency or instrumentality of the United States government which institution shall satisfy the requirements of the Investor for the deposit of similar funds by approved seller-servicers, which depository requirements may be modified, only by request of the Seller, which requests must be approved by the Participant. Seller shall maintain such records and take all such actions as may be necessary to secure and obtain the maximum insurance for such account.
(g) Seller shall remit to Participant its Ownership Interest percentage of all payments of principal, prepayment premiums or penalties and interest on the Note, and all prepayments of principal made in accordance with the terms of the Note and Mortgage; Seller shall remit such amounts to Participant, in accordance with the written instructions of Participant, on receipt by Seller. If requested, Seller shall provide Participant with a statement of payment of mortgage insurance premiums, and escrow account balances thereunder, and any release from the reserve fund for replacements (and the purpose of such release) for each Mortgage Loan. Seller shall, with respect to each Mortgage Loan, hold and appropriately monitor all mortgage escrows, including without limitation all operating deficit, on-site or off-site escrows, and, in the case of an Agency Loan, any other such escrows required by the applicable Agency, in a manner to avoid negative escrow balances, and if requested by Participant with respect to an Agency Loan, provide Participant with copies of all Agency approvals of release of any escrowed funds.
(h) Provide Participant, on or before the fifteenth (15th) day of each month (or the business day immediately following the fifteenth (15th) day, if the fifteenth (15th) day is not a business day), with a statement setting forth, as of the tenth (10th) day of such month, the outstanding balance of the Notes after recordation of the current month’s financial activity, itemization of principal, interest and any other payments collected, any delinquency in payments, any advances made by Seller pursuant to Section 3.7 hereof, and the remittance to Participant.
(i) Provide to Participant, on an annual basis, such additional information regarding the Mortgage Loans as Participant shall reasonably request.
All funds received by Seller with respect to the Mortgage Loans, other than amounts constituting servicing compensation, reimbursement for Seller advances, or escrowed funds
belonging to the mortgagors, shall be held by Seller in trust for Participant to the extent of Participant’s Ownership Interest as required by this Agreement
3.3 Insurance; Condemnation.
(a) Seller shall assure that the Mortgaged Property is kept insured against loss by fire and such other hazards, casualties, and contingencies as required, in the case of an Agency Loan, by the applicable Agency, and in the case of a Jumbo Loan, by the Investor, and as generally shall be required by reasonably prudent lenders in similar transactions. Such insurance shall be pursuant to a broad form all-risk policy and shall name Seller and Participant as additional insureds pursuant to a standard mortgagee clause. The insurance carrier providing the insurance shall be chosen by the mortgagor subject to Seller’s approval; such carrier shall meet the minimum rating requirements of the Investor for carriers of hazard insurance.
(b) Seller shall receive the proceeds of all such insurance, or any award for the condemnation of all or any part of the Mortgaged Property, and to the extent required obtain the consent of the applicable Agency to the disposition thereof. Such proceeds shall be deposited with Participant. During the term of this Agreement, Seller will retain custody of all insurance policies or renewals thereof which are required to be provided by each mortgagor under its Mortgage Loan Documents and maintained by Seller under the requirements of the applicable Agency. To the extent that any such insurance proceeds or condemnation award shall be applied as a prepayment on the Mortgage Loan it shall be held in trust by Seller for the benefit of Participant and remitted pursuant to Section 3.2(f) hereof.
(c) To the extent any insurance coverages described above are not maintained by the mortgagor, Seller shall advance funds to obtain such coverages and obtain reimbursement.
3.4 Material Change to Mortgaged Property. Seller shall, if and as soon as such information comes to its attention, promptly notify Participant of any material change in the condition of the Mortgaged Property, any sale or transfer by the mortgagor of the legal or equitable title to the Mortgaged Property or any abandonment of the Mortgaged Property, and shall take any action in regard thereto as Participant shall direct, the costs of which shall be paid by Participant.
3.5 Fidelity Bond: Errors and Omissions Insurance. Seller agrees to keep, at no cost to Participant, fidelity bond, errors and omissions and any other insurance required by the Agencies in amounts required by the Agencies and reasonably satisfactory to Participant as to form, substance and company. Seller shall furnish a certificate evidencing such insurance coverage to Participant, upon request, and shall notify Participant if such fidelity bond coverage is decreased or exhausted.
3.6 No Variation of Mortgage Loan Documents. Seller shall not be authorized or empowered to waive or vary any terms of any Mortgage Loan Document or consent to any postponement, delay or other deviation from strict compliance by a mortgagor with any provision of any Mortgage Loan Document or consent to any secondary financing, except as specifically authorized in writing by Participant. Seller shall promptly forward to Participant all requests for such waiver, variance or consent, and any related documentation received from a mortgagor. Participant shall use its best efforts to respond promptly to Seller’s request.
3.7 Advances by Seller. To the extent payment of a Note has not been made by the mortgagor as of the date when due, the Seller will advance from its own funds such payment; provided, however, that Seller shall not be obligated to make more than one such advance for which it has not been reimbursed.
3.8 Mortgage Loan Default. If the mortgagor shall fail to make any payment due pursuant to the respective Mortgage Loan or shall fail to comply with any other covenant of any Mortgage Loan Document, which failure shall give rise to Seller’s right, as mortgagee, to accelerate the Mortgage Loan, Seller shall, within [* * * ] thereafter, so notify Participant in writing. Seller shall consult with Participant as to the course of action to be taken and Seller shall proceed as directed by Participant.
In all cases, Seller shall take such action as is necessary to obtain the maximum benefit of the applicable Agency insurance, guaranty or other credit enhancement benefits and in all events, Seller will act in accordance with any written instructions given by Participant with respect to such default or claim and shall make no settlement without the express written consent of Participant.
3.9 Acquisition of Title to the Mortgaged Property. Seller shall not elect to acquire the Mortgaged Property in the event of a default in a Mortgage Loan but shall instead, in the case of an Agency Loan, file a claim on the applicable Agency guaranty or insurance of the Mortgage Loan as herein provided. In the event however, that title to the Mortgaged Property is to be acquired, title shall be taken in the name of the Participant or its designee, which may be Seller. Following acquisition of title to the Mortgaged Property, Seller shall, either itself or through an agent of its choosing, manage and operate the Mortgaged Property for the benefit of Participant. Seller shall maintain the Mortgaged Property pursuant to such practices as are customary in the locality where the Mortgaged Property is located, and in accordance with procedures employed by prudent property owners acting for their own account. Seller shall collect all rents for the benefit of Participant and remit to Participant on the fifteenth (15th) day of each month all Mortgaged Property income after expenses, including reimbursement of Seller advances, including but not limited to advances of principle and interest, third party fees and legal fees incurred with respect to the enforcement of Section 3.8 herein, and payment of Seller’s management fee described below. Seller shall cooperate with Participant in the sale of the Mortgaged Property. Any such sale shall be pursuant to terms and conditions acceptable to Participant in its sole discretion. The proceeds of any such sale shall be paid to Seller and remitted to Participant pursuant to Section 3.2(f) of this Agreement. In the event that Participant shall elect to accept a note or other noncash compensation in the sale of the Mortgaged Property, Participant agrees to pay to Seller upon such sale any amounts then owing to Seller pursuant to this Agreement.
3.10 Compliance with Law. Seller shall comply with all applicable federal, state and local law and regulations, including, without limitation, in the case of an Agency Loan, all applicable Agency requirements. Without limiting the generality of the preceding sentence, Seller will, in servicing and administering each Agency Loan under this Agreement, comply with all applicable Agency requirements as the same may from time to time be amended, and with respect to all Mortgage Loans serviced hereunder, promptly discharge all of the obligations of the mortgagee under the applicable Mortgage, including the timely giving of notices thereunder.
3.11 Servicing Compensation. Seller shall be paid a fee for each Mortgage Loan equal to the amount set forth in the fee schedule attached hereto as Schedule I (the “Fee Schedule”) for servicing the Mortgage Loan (the “Servicing Fee”), subject to adjustment as contemplated in Section 5.3.
3.12 Books and Records. Seller shall keep proper books of account and records reflecting the interest of Participant in the Mortgage, which books and records shall be available for inspection by Participant at all reasonable times during normal business hours. The accounts and records of Seller relating to the Mortgage Loans, the Mortgaged Property, and the servicing relating thereto shall be maintained in accordance with generally accepted accounting principles.
3.13 Provision of Information. Not more often than annually, Seller shall provide to Participant such information as Participant shall reasonably request regarding Seller’s compliance with this Agreement, including, but not limited to the requirements of Sections 3.2, 3.3, 3.4 and 3.5 hereof.
3.14 Seller Certification. The Seller shall provide periodic certifications and reports to the Participant as described on Exhibit C attached hereto (“Seller’s Certification”).
4. | TERM; TERMINATION; TRANSFER. |
4.1 Term of Agreement. Unless sooner terminated as provided in this Agreement, this Agreement shall continue until the Mortgage Loans have been paid in full and Seller has completed all obligations under this Agreement regarding the management and sale of the Mortgaged Property. Notwithstanding the foregoing, Participant’s commitment to purchase Mortgage Loans pursuant to the terms of this Agreement shall expire on May 31, 2018.
4.2 Termination. This agreement may be terminated upon the happening of any Seller Default (as defined in Section 6 hereof), at the option of the Participant, without the payment of a termination fee or compensation of any kind to the Seller. Provided that Participant does not hold an Ownership Interest in any Mortgage Loan, Seller may terminate this Agreement upon ten (10) business days written notice to Participant.
4.3 Transfer by Participant. Participant will have the right to assign, transfer, convey, pledge, hypothecate or otherwise dispose of a Participation Certificate. In the event of such assignment, transfer, conveyance, hypothecation or disposition, Seller will re-register the Participation Certificate upon request by Participant’s transferee. Seller specifically acknowledges that Participant may (and shall have the right to) pledge an Ownership Interest in a Mortgage Loan to the Federal Home Loan Bank of Indianapolis (“FHLBI”) as collateral under an Advances, Pledge and Security Agreement by and between Participant and FHLBI (the “APSA”). Notwithstanding anything in this Agreement to the contrary, Seller further acknowledges and agrees that during such time as this Certificate is pledged to the FHLBI, (i) Participant and Seller will hold the Mortgage Loan Documents in trust for the benefit of both Participant and the FHLBI, as their interests may appear, and (ii) the FHLBI shall have the right to take possession and ownership of the Ownership Interest pursuant to the APSA. Seller further agrees to provide the FHLBI with duplicate copies of all notices or other communications to or
from Participant pursuant to this Agreement with respect to such Ownership Interest. Participant also will have the right to sub-participate its Ownership lnterest to one or more sub-participants.
5. | CONTROL OF MORTGAGE LOANS BY PARTICIPANT. |
5.1 Control of Mortgage Loans. By the mutual agreement of Seller and Participant, each Mortgage Loan in which Participant purchases an Ownership Interest either shall be sold to an Investor or mortgage-backed securities for the Mortgage Loan shall be sold to an Investor. Such agreement does not evidence any element of retained control of the Mortgage Loan by Seller. Seller has represented and warranted that there will be a commitment to sell the Mortgage Loan to an Investor for an amount equal to or greater than the unpaid balance of the Mortgage Loan and interest thereon for each Mortgage Loan in which Participant purchases an Ownership Interest. In the event of a breach of this representation and warranty, Participant shall have all rights and remedies existing at law or equity and under this Agreement. It is the intention of Seller and Participant that Participant have such control of a Mortgage Loan as shall be necessary for Participant’s Ownership Interest to be accounted for as a sale by Seller to Participant. Delivery of the Note to Participant for each Mortgage Loan is intended to make Participant a holder of the Mortgage Loan under the Uniform Commercial Code and to vest in Participant the ability to exercise its control of a Mortgage Loan.
5.2 Bailee Letter. Seller shall provide instructions to Participant for the delivery of the Mortgage Loan Documents to Investor in accordance with a bailee letter in the form attached hereto as Exhibit D which shall be attached to the front of every Note to facilitate the sale of a Mortgage Loan or mortgage-backed securities to the Investor pursuant to the terms of such letter (the “Bailee Letter”),
5.3 Payment of Proceeds to Participant. The Investor shall be directed to pay the purchase price for the sale of each Mortgage Loan or mortgage-backed securities for the Mortgage Loan by wire transfer to the Participant. Such direction shall state that it may not be rescinded or modifìed without the written consent of Participant. A copy of such direction shall be delivered to the Seller. Participant shall apply the proceeds from the sale of the Mortgage Loan or mortgage-backed securities for the Mortgage Loan in accordance with the Participant’s and Seller’s respective Ownership Interests in the Mortgage Loan. To the extent that the proceeds from the sale of the Mortgage Loan exceed the Seller’s and Participant’s pro rata interests in the unpaid principal balance of the Mortgage Loan and interest thereon, Participant shall remit to Seller by wire transfer the amount of such excess as Seller’s compensation for originating the Mortgage Loan. To the extent that Participant’s share of such proceeds is less than the amount necessary to pay Participant for its pro rata interest in the unpaid principal balance of the Mortgage Loan and interest thereon in breach of Seller’s representations and warranties, Seller shall be liable to Participant for such shortfall, which Participant may recover from Seller’s share of the proceeds. Seller shall immediately remit or cause a third party to remit any remaining deficiency to the Participant by wire transfer.
6. | SELLER DEFAULT; REMEDIES |
(a) | The occurrence of any of the following shall be a “Seller Default”: |
(i) (1) Seller shall fail to make remittances as provided in Section 3.2(g) hereof; (2) Seller breaches its representation at Section 2.2(hh) and fails to pay to Participant all loss or damage suffered or incurred by Participant as a result thereof, including, without limitation, reasonable attorneys’ fees and expenses and costs of collection within [***] of such breach or failure; or (3) Seller breaches any of its other representations, warranties or covenants, or fails to perform any of its other duties hereunder in any material respect and shall fail, within [***] after written notice from Participant, to correct or cure such failure;
(ii) Seller shall assign, hypothecate, pledge or transfer in any manner this Agreement or any of Seller’s rights hereunder, or suffer the creation of any lien upon, or security interest in, or the transfer of, any of Seller’s rights hereunder, by operation of law or otherwise in favor of an assignee, transferee, pledgee, or secured party other than a lending bank of Seller reasonably acceptable to Participant;
(iii) Seller shall institute proceedings for voluntary bankruptcy, or shall file a petition seeking reorganization under the Federal Bankruptcy Laws or for relief under any other law for the relief of debtors, or shall consent to the appointment of a conservator or receiver of all or substantially all of its property, or shall make a general assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts as they become due, or shall be adjudged bankrupt or insolvent by a court of competent jurisdiction appointing a receiver, liquidator or trustee of Seller or of all or substantially all of its property or approving any petition filed against Seller for its recorganization, and such adjudication or order shall remain in force or unstayed for a period of [***] or a final judgment or decree for the payment of money is entered against Seller and such judgment or decree is not discharged or stayed within [***] from the date of entry thereof;
(iv) Any creditor of Seller files a petition to reorganize or liquidate Seller and such petition is not discharged or dismissed within [***] after the date on which it is filed;
(v) A default in any other agreement by and between Participant and Seller or under any other obligation of Seller to Participant;
(vi) A default by Seller and a failure to cure within any applicable cure period under any material loan agreement, mortgage, indenture, agreement or lease with another party;
(vii) A failure by Seller to maintain its status as an Agency-approved mortgagee in good standing.
(b) In the event of a Seller Default, Participant shall have all remedies existing at law or equity including but not limited to the following remedies which may be exercised by Participant at its election in any order (i) have Seller purchase the Ownership Interests upon demand of Participant, for a price equal to the sum of the following: (A) the outstanding principal balance of the Participation Certificate, (B) interest on such amount calculated from the Funding Date at a rate equal to the rate or rates set forth on the respective Note or Notes (minus any interest on the Participation Certificate previously paid by the Seller to the Participant), and (C) any costs or expenses incurred by Participant relating to the purchase and the fee, if any, paid
to Seller under this Agreement for the Ownership Interests (“Default Price”); (ii) have Seller sell or assign the Mortgage Loans and the related Mortgages and other Mortgage Loan Documents then serviced under this Agreement to an Agency-approved mortgagee designated by Participant, deliver such notices of assignment as may be required by sound and prudent mortgage banking practice, and give Participant an accounting for all funds and other property in connection with such sale or assignment. Upon such sale or assignment under this Section 6(b), the designated mortgagee will become the mortgagee under this Agreement in the place and stead of Seller, with all the powers and obligations conferred or imposed by this Agreement on Seller hereunder, but without any obligation as to acts committed or omitted to be taken prior to such assignment. Further, in the event of a Seller Default, Seller will be liable to Participant for any damages, costs and expenses, including reasonable attorney’s fees, which Participant may incur.
(c) Seller shall be liable to Participant for, and shall promptly pay to Participant, any damages incurred or suffered as a result of a Seller Default or remaining after the exercise of any right or remedy provided herein and Seller shall indemnify Participant and Participant’s officers, directors, employees and agents (collectively, the “lndemnitees”) and hold the lndemnitees harmless from any claim loss, damage, liability or expense whatsoever (including without limitation, reasonable attorney’s fees) suffered or incurred by any of them and arising out of or resulting from or attributable to any Seller Default. The indemnification obligation set forth herein shall survive the termination of this Agreement. All rights and remedies of Participant herein specified are cumulative and are in addition to, not in limitation of, any rights and remedies Participant may have by law or at equity. No waiver of any default or failure or delay to exercise any right or remedy by Participant shall operate as a waiver of any other default or of the same default in the future or of any right or remedy with respect to the same or any other occurrence.
7. | MISCELLANEOUS |
7.1 Assignment. Except as otherwise provided for herein or agreed to by the parties hereto, Seller shall not assign, sell, transfer or subparticipate its rights and obligations under this Agreement without the prior written consent of Participant.
7.2 Default Damages. For each Mortgage Loan in which Participant purchases an Ownership Interest, Seller has represented and warranted that there will be either a sale of the Mortgage Loan or mortgage-backed securities for the Mortgage Loan for an amount equal to or greater than the unpaid principal balance of the Mortgage Loan and interest thereon. Any loss or damage resulting from a breach of this representation and warranty, including without limitation any loss incurred in the disposition of such Mortgage Loan to an Investor on the secondary market, shall be borne by Seller, Such loss or damage shall be recoverable by Participant as provided herein. Seller, where possible, shall give Participant advance notice of any such loss or damage. Notwithstanding the foregoing, Seller and Participant shall be liable for their own expenses, including legal expenses, relating to the execution and performance of this Agreement. Seller shall pay the expenses of servicing the Mortgage Loans.
7.3 Participation not Partnership or Loan. Neither the execution of this Agreement, nor any sharing in the benefits and burdens by Seller and Participant in respect of the Mortgage Loans or in the proceeds thereof, is intended nor shall be construed to constitute the formation of a partnership or joint venture between Seller and Participant, nor shall it be construed to be an
extension of credit or a loan by Participant to Seller. It is agreed that Participant shall be the holder of the Ownership Interest.
7.4 Recordation of Participation Agreement. Upon the request of Participant, the parties hereto agree that a Memorandum of this Agreement may be prepared in a form acceptable to both parties and recorded in the county where Seller’s principal office is located and in the land records of the jurisdictions where the Mortgaged Property is located; provided, however, upon transfer of the Participation Certificate by Participant, Participant shall deliver to Seller for recordation a termination or amendment of such recorded document.
7.5 Amendment. No amendment or modification of this Agreement shall be valid unless evidenced by an instrument, in writing, signed by Seller and Participant.
7.6 Severability. If any one or more of the covenants, agreements, provisions, or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.
7.7 Waiver. Any waiver by a party of any obligation or forbearance to exercise any right hereunder shall in no event be deemed to be binding upon such party in future instances where such right may be available to it.
7.8 Notice. Notices hereunder shall be in writing, and may be delivered by hand, first class, registered or certified mail, express delivery, or email or other telecommunication device capable of confirmation of receipt, addressed to Participant or Seller at the addresses set forth in the first paragraph of this Agreement or at such other address as each party may furnish to the other in writing.
7.9 Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Indiana.
7.10 Counterparts. This Agreement may be executed and delivered in two or more counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.
7.11 Authority. The undersigned person executing this Agreement for and on behalf of Seller represents and certifies that he or she is an authorized representative of Seller and has been fully empowered, and all necessary action has been taken, to execute and deliver this Agreement. The undersigned person executing this Agreement for and on behalf of Participant represents and certifies that he or she is an authorized representative of Participant and has been fully empowered, and all necessary action has been taken, to execute and deliver this Agreement.
[Remainder of page intentionally blank; signatures on following page]
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first written above.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | /s/ Howard Nathan | |
Name: | Howard Nathan | |
Its: | CFO | |
PARTICIPANT: | ||
MERCHANTS BANK OF INDIANA | ||
By: | ||
Name: | ||
Its: |
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first written above.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Its: | ||
PARTICIPANT: | ||
MERCHANTS BANK OF INDIANA | ||
By: | /s/ Michael J. Dunlap | |
Name: | Michael J. Dunlap | |
Its: | PRESIDENT |
SCHEDULE I
Fee Schedule
For the purposes of this Schedule, the following term used herein shall be defined as follows:
“Monthly Home Point Loans” shall mean average Mortgage Loans acquired by Participant during a given calendar month.
“Monthly Deposits” shall mean average deposits of Seller held by Participant during a given calendar month.
“Monthly Natty Mac Loans” shall mean the average mortgage loans of Natty Mac Funding, LLC during a given calendar month.
“Difference” shall mean Monthly Deposits minus Monthly Natty Mac Loans.
“Combined Loans” shall mean the Monthly Home Point Loans plus Monthly Natty Mac Loans.
On a monthly basis, Participant shall pay Seller a fee equal to (i) [***] of the Participant ‘s Ownership Interest with respect to the Monthly Home Point Loans during such calendar month up to the amount of the Difference, plus (ii) either (a) in the event Monthly Home Point Loans exceed the amount of the Difference, [***] of the amount equal to Monthly Home Point Loans minus the Difference, or (b) in the event Monthly Deposits exceed Combined Loans, [***] of the amount equal to Monthly Deposits minus the Combined Loans.
EXHIBIT A
Intentionally Omitted
- End of Exhibit A -
EXHIBIT B
Form of Participation Certificate
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE. ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT AND SUCH LAWS MAY ONLY BE MADE IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS AND IN ACCORDANCE WITH THE PARTICIPATION AGREEMENT REFERRED TO HEREIN.
PARTICIPATION CERTIFICATE
evidencing a participation in
a mortgage loan insured [guaranteed] by the
and held and serviced by
HOME POINT FINANCIAL CORPORATION [Seller]
THIS CERTIFIES THAT MERCHANTS BANK OF INDIANA (“Participant”) is the registered owner of the undivided participation ownership interest (“Ownership Interest”) in the __________ [insured/guaranteed] mortgage loan identified above (the “Mortgage Loan”) and more particularly described on Schedule I attached hereto and by reference incorporated herein held by HOME POINT FINANCIAL CORPORATION (“Seller”) as mortgagee of record and servicer, pursuant to the Master Participation Agreement. Participant’s Ownership Interest shall be the percentage that is equal at any time to the percentage that the unpaid balance of the amount paid by Participant bears to the unpaid balance of the Mortgage Loan. This Participation Certificate is issued under and is subject to the terms, provisions and conditions of the Master Participation Agreement dated as of ___________, 2017, entered into by Seller and Participant (the “Agreement”).
Seller certifies to Participant that, as of the date hereof, the information set forth in Schedule I hereto is correct.
This Participation Certificate does not represent an obligation of, or an interest in, Seller and is not insured or guaranteed by any government agency. This Participation Certificate is limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth in the Agreement.
Seller acknowledges that Participant may (and shall have the right to) pledge the Ownership Interest, as evidenced by this Participation Certificate, to the Federal Home Loan Bank of Indianapolis (“FHLBI”) as collateral under an Advances, Pledge and Security Agreement dated as of April 13, 2000 (the “APSA”), and that such pledge shall remain in effect until such time as Seller reacquires the Ownership Interest according to the terms of the Agreement. Seller further acknowledges and agrees that during such time as this Participation Certificate is pledged to the FHLBI, (i) Seller will hold the Mortgage Loan Documents in trust for the benefit of both Participant and the FHLBI, as their interests may appear, and (ii) the FHLBI shall have the right to take possession and ownership of the Ownership Interest pursuant to the APSA. Seller further agrees to provide the FHLBI with duplicate copies of all notices or other communications to or from Participant pursuant to the Agreement with respect to the Ownership Interest. Capitalized terms used in this Participation Certificate but not defined herein shall have the meaning ascribed to them in the Agreement.
IN WITNESS WHEREOF, Seller has caused this Participation Certificate to be duly executed by its duly authorized officer.
HOME POINT FINANCIAL CORPORATION | ||
By: | --------------------------Specimen Only------------------------- | |
Name: | ||
Its: |
Dated: _______________
SCHEDULE I
1. | Address of Mortgaged Property: |
2. | Mortgagor: |
3. | Mortgage Loan Amount: |
4. | Purchase Price: |
5. | Note Rate: |
6. | Pass-through Rate: |
7. | Lockout/Prepayment Penalties/Yield Maintenance: |
8. | Loan Term: |
9. | Amortization Term: |
10. | Anticipated Funding Date: |
11. | Investor: |
12. | Interest Calculation Method: |
- End of Exhibit B -
EXHIBIT C
Seller’s Certification
1. Home Point Financial Corporation (“Seller”) shall provide Merchants Bank of Indiana (“Participant”) with a copy of the Seller’s Balance Sheet, as contained in the Seller’s annual audited Financial Statements, certified to be true and correct by an authorized officer of the Seller, within ninety (90) days after the end of each fiscal year. In addition, simultaneously, Seller shall provide Participant an annual certification, executed by an authorized officer of the Seller, certifying that “During the preceding twelve (12) months, no financial event has occurred, other than as specified in this Certification, the effect of which has materially, adversely affected the Seller’s ability to perform its obligations pursuant to the Master Participation Agreement, dated as of _____________, 2017, by and between Seller and MERCHANTS BANK OF INDIANA.”
2. Seller shall provide Merchants Bank of Indiana (“the Participant”) with an annual certification that all insurance coverage required by the Master Participation Agreement is in full force and effect.
3. Seller shall provide the Participant with an annual certification that fidelity bond and errors and omissions insurance required by the Master Participation Agreement is in full force and effect.
- End of Exhibit C -
EXHIBIT D
Form of Bailee Letter
BAILEE LETTER
Loan Name/Number: | _______________ |
Loan Amount: | _______________ |
Dear Investor:
Merchants Bank of Indiana (the “Participant”) owns a participation interest in the Mortgage Note(s), Mortgage(s) and other documents enclosed herewith (the “Loan Documents”) and the Loan Documents have been assigned and pledged to the Participant to secure payment of all sums owing the Participant by Home Point Financial Corporation (the “Seller”) arising under that certain Master Participation Agreement dated __________, 2017, and certain related security agreements.
The Loan Documents, whether now or hereafter delivered to you, is to be held by you as a bailee in possession on behalf of and for the benefit of the Participant, for the purpose of perfecting the right, title and interest of the Participant in such Loan Documents, and subject to the Participant’s direction and control. It is our mutual understanding that the Loan Documents constitute collateral securing the obligations of Seller to the Participant and that all proceeds thereof (the “Purchase Price”) should be promptly paid to the Participant for application to such obligations. The Loan Documents held by you hereunder for any period shall at all times be segregated from other property owned or held by you.
In no event should the Loan Documents be delivered to any party other than the Participant, or otherwise dealt with by you, without the prior written consent of Participant.
Participant hereby agrees that, upon receipt of the Purchase Price, it automatically releases all rights, interest or lien of any kind it may have with respect to the Mortgage Loan without any further action required by Participant. Remittance of the Purchase Price shall be by wire transfer pursuant to the wiring instructions below.
Pending the purchase of each Mortgage Loan and until the Purchase Price is received by Participant directly from you, the aforesaid interest in the Mortgage Loan will remain in full force and effect, and you shall hold possession of such Note(s) and the documentation evidencing same as custodian, agent and bailee for and on behalf of the Participant. In the event that any Mortgage Loan is unacceptable for purchase, return the rejected item directly to us at the address set forth below. The Mortgage Loan must be returned or Purchase Price remitted in full no later than fourteen (14) days from the date hereof. If you are unable to comply with the above instructions, please so advise the undersigned immediately.
NOTE: BY ACCEPTING THE MORTGAGE LOAN DELIVERED TO YOU WITH THIS LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE PARTICIPANT ON THE TERMS DESCRIBED IN THIS LETTER. THE UNDERSIGNED REQUESTS THAT YOU ACKNOWLEDGE RECEIPT OF THE ENCLOSED MORTGAGE LOAN AND THIS LETTER BY SIGNING AND RETURNING THE ENCLOSED COPY OF THIS LETTER TO THE UNDERSIGNED; HOWEVER, YOUR FAlLURE TO DO SO DOES NOT NULLIFY SUCH CONSENT.
Participant’s Wiring Instructions: | Participant’s Mailing Address: | ||
Merchants Bank of Indiana |
Merchants Bank of Indiana
11555 N. Meridian Street Suite 400 Carmel, Indiana 46032 |
||
ABA# | |||
If the terms hereof are acceptable to you, please have an authorized officer of your institution execute the enclosed copy of this letter in the space provided below and promptly return such executed copy to the Participant at the above address.
PARTICIPANT: | ||
MERCHANTS BANK OF INDIANA | ||
By: | ||
Name: | ||
Its: |
Acceptance by Investor:
All terms and conditions acknowledged, agreed
and accepted as of the __ day of __________, 20__. |
|
By: | ||
Name: | ||
Its |
- End of Exhibit D -
Exhibit 10.1.1
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.
CONFIRMATION AND AMENDMENT OF PARTICIPATION AGREEMENT
THIS CONFIRMATION AND AMENDMENT OF PARTICIPATION AGREEMENT (“Confirmation and Amendment”), is executed to be effective as of May 29, 2020, by and between HOME POINT FINANCIAL CORPORATION, a New Jersey corporation (hereinafter referred to as “Seller”), and MERCHANTS BANK OF INDIANA (hereinafter referred to as “Participant”);
W I T N E S S E S T H A T:
WHEREAS, Seller and Participant entered into that certain Master Participation Agreement dated May 31, 2017 for a participation facility in the amount of Six Hundred Million and 00/100 Dollars ($600,000,000.00) (as heretofore amended, modified or restated, referred to as the “Participation Agreement”);
WHEREAS, among other terms specifically identified herein, Seller and Participant have agreed to modify certain terms of the Participation Agreement as more particularly described herein;
WHEREAS, Participant is willing to modify the Participation Agreement subject to, inter alia, the terms and conditions hereinafter specified and upon the condition that Seller makes the acknowledgements, agreements and confirmations set forth herein and executes all documents reasonably required by Participant to effectuate such modification.
NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Participant agree as follows:
1. Seller and Participant hereby agree that the term of the Participation Agreement and any termination, expiration or maturity date contained therein is hereby extended to May 27, 2021.
2. Seller and Participant hereby agree that the as of the date hereof the maximum aggregate outstanding balance of Ownership Interests as set forth in Section 1.1 of the Participation Agreement is increased from Six Hundred Million and 00/100 Dollars ($600,000,000.00) to Eight Hundred Million and 00/100 Dollars ($800,000,000.00), all on the terms and conditions, subject to the limitations set forth in the Participation Agreement, with a maximum Scratch and Dent sublimit of [***].
3. Notwithstanding anything to the contrary, Schedule I attached to the Participation Agreement is hereby deleted and the “Schedule I” attached hereto is hereby inserted in lieu thereof.
4. Notwithstanding anything to the contrary, Participant’s Ownership Interest for any Scratch and Dent Mortgage Loan shall not exceed [***].
5. Seller hereby covenants and agrees with Participant that at the end of each calendar month Seller shall have an Adjusted Tangible Net Worth of at least [***] (“Net Worth Requirement”). For the purposes hereof, “Adjusted Tangible Net Worth” shall mean Seller’s net worth as determined by generally accepted accounting principles less intangible assets and receivables from affiliates and shareholders.
6. Seller hereby covenants and agrees with Participant that at all times hereunder Seller shall have Liquidity of not less than [***]. For the purposes hereof, “Liquidity” shall mean, at any particular time, the sum of Seller’s cash, cash equivalents (certificates of deposit and other depository accounts established at FDIC-insured banks), United States government-issued securities and other registered, unrestricted equity or debt securities which are publicly traded on a recognized United States exchange and which, in all events, are held in Seller’s name and are free and clear of all liens (except liens in favor of Participant).
7. Seller hereby covenants and agrees with Participant that at the end of each calendar month Seller shall maintain a Leverage Ratio no greater than [***]. For the purposes hereof, “Leverage Ratio” shall mean the ratio of Borrower’s debt to its Adjusted Tangible Net Worth.
8. Seller hereby covenants and agrees with Participant that Seller shall maintain a minimum fiscal quarterly profitability of not less than [***].
9. Seller agrees to provide Participant not less than ninety (90) days’ written notice prior to withdrawing any escrows held by Participant.
10. Seller acknowledges and confirms that the Participation Agreement continues in full force and effect. Seller reaffirms and ratifies all warranties, representations, provisions, conditions, terms, covenants and agreements set forth in the Participation Agreement.
11. Seller represents and warrants to Participant that (a) as of the effective date hereof, there exists no event of default under the Participation Agreement, or any condition that, with the giving of notice, lapse of time, or both, would constitute an event of default under the Participation Agreement, and (b) Seller has no defenses, offsets, claims or counterclaims against Participant under the Participation Agreement, or any other agreement, instrument, document or event executed or occurring in connection therewith.
12. This Confirmation and Amendment shall be binding upon and inure to the benefit of Seller and Participant and their respective successors, assigns and legal representatives.
13. The undersigned, executing this Confirmation and Amendment for and on behalf of Seller, certifies and represents to Participant that s/he is duly authorized by all action necessary on the part of Seller to execute and deliver this document and that this document constitutes a legal, valid and binding obligation of Seller in accordance with its terms. This agreement may be executed and delivered in multiple counterparts, each of which when so executed and delivered shall be an original, and all of which together shall constitute one and the same instrument.
14. This Confirmation and Amendment shall be governed by and construed in accordance with the laws of the State of Indiana.
[Remainder of page intentionally blank; signatures on following page(s)]
IN WITNESS WHEREOF, the undersigned have caused this Confirmation and Amendment of Participation Agreement to be executed effective as of the date first above written.
Seller: | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | /s/ Joseph Ruhlin | |
Name: Joseph Ruhlin | ||
Title: Treasurer | ||
Participant: | ||
MERCHANTS BANK OF INDIANA | ||
By: |
/s/ Kelly Horvath | |
Name: | Kelly Horvath | |
Title: | Vice President |
SCHEDULE I
Fee Schedule
On a monthly basis, Participant shall pay Seller (i) a service fee equal to [***] of the Participant’s Ownership Interest with respect to the average monthly balance of Mortgage Loans acquired by Participant, plus (ii) a custodial credit equal to (a) the per annum interest rate (based on a year of 360 days and actual days elapsed) from time to time announced by the Wall Street Journal as the “One Month LIBOR” [***], with each change in such interest rate to occur automatically effective as of the date of each such change multiplied by (b) the average deposits of Seller held by Participant during a given calendar month (collectively, the “Servicing Fee”).
Seller shall pay Participant a fee equal to [***] for each Mortgage Loan acquired by Participant (“Funding Fee”).
At Take-Out of each Mortgage Loan, Seller shall pay Participant a “Participation Fee” equal to the greater of (i) the difference between (a) [***] and (b) the Note Rate minus the Servicing Fee for any period outstanding, or (ii) [***].
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.
MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT
Dated as of June 3, 2020
HOME POINT FINANCIAL CORPORATION,
the Seller,
MORGAN STANLEY BANK, N.A.,
the Buyer
and
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC,
the Agent
TABLE OF CONTENTS
Page | ||||
Section 1. | Definitions and Accounting Matters | 1 | ||
1.01 | Certain Defined Terms | 1 | ||
1.02 | Accounting Terms and Determinations | 29 | ||
1.03 | Interpretation | 29 | ||
Section 2. | No Commitment, Initiation of Transactions, Confirmation | 30 | ||
2.01 | No Commitment | 30 | ||
2.02 | Transaction Request Procedure (Transactions other than Wet-Ink Transactions) | 31 | ||
2.03 | Transaction Request Procedure (Wet-Ink Transactions) | 32 | ||
2.04 | [Reserved.] | 33 | ||
2.05 | Repurchase and Repurchase Price | 33 | ||
2.06 | Conversion of Applicable Interest Rates | 35 | ||
2.07 | Margin Maintenance | 36 | ||
Section 3. | Payments; Requirements of Law; Commitment Fee, Non-Utilization Fee, Etc. | 36 | ||
3.01 | Payments | 36 | ||
3.02 | Requirements of Law | 38 | ||
3.03 | Commitment Fee | 39 | ||
3.04 | Non-Utilization Fee | 39 | ||
Section 4. | Purchased Items | 40 | ||
4.01 | Purchased Items; Security Interest | 40 | ||
4.02 | Further Documentation | 42 | ||
4.03 | Changes in Locations, Name, etc | 42 | ||
4.04 | The Buyer’s Appointment as Attorney-in-Fact | 42 | ||
4.05 | Performance by The Buyer of The Seller’s Repurchase Obligations | 44 | ||
4.06 | Proceeds | 44 | ||
4.07 | Remedies | 44 | ||
4.08 | Limitation on Duties Regarding Preservation of Purchased Items | 45 | ||
4.09 | Powers Coupled with an Interest | 45 | ||
4.10 | Release of Security Interest | 45 | ||
4.11 | Cash Reporting | 46 | ||
4.12 | Taxes; Tax Treatment | 46 | ||
Section 5. | Conditions Precedent | 48 | ||
5.01 | Conditions Precedent to Initial Transaction | 48 | ||
5.02 | Conditions Precedent to all Transactions | 49 | ||
Section 6. | Representations and Warranties | 52 | ||
6.01 | Legal Name | 52 | ||
6.02 | Existence | 52 | ||
6.03 | Financial Condition | 52 |
6.04 | Litigation | 53 | |
6.05 | No Breach | 53 | |
6.06 | Action | 53 | |
6.07 | Approvals | 54 | |
6.08 | Margin Regulations | 54 | |
6.09 | Taxes | 54 | |
6.10 | Investment Company Act | 54 | |
6.11 | Purchased Items; Security | 54 | |
6.12 | Chief Executive Office/Jurisdiction of Organization | 55 | |
6.13 | Location of Books and Records | 55 | |
6.14 | Hedging | 55 | |
6.15 | True and Complete Disclosure | 55 | |
6.16 | Tangible Net Worth | 56 | |
6.17 | ERISA | 56 | |
6.18 | Delivery of Mortgage Loans | 56 | |
6.19 | Subsidiaries | 56 | |
6.20 | Regulatory Status | 56 | |
6.21 | Takeout Commitments; Takeout Assignments | 57 | |
6.22 | No Prohibited Persons | 57 | |
6.23 | Identification of Servicer(s) | 57 | |
6.24 | Solvency | 57 | |
6.25 | Massachusetts Subprime Loans, Nevada Subprime Loans and Loans Subject to Consent or Other Orders | 58 | |
6.26 | [Reserved] | 58 | |
6.27 | True Sales | 58 | |
6.28 | Anti-Money Laundering Laws | 58 | |
6.29 | No Burdensome Restrictions | 58 | |
6.30 | Origination and Acquisition of Mortgage Loans | 58 | |
6.31 | No Broker | 58 | |
Section 7. | Covenants of the Seller | 59 | |
7.01 | Financial Statements | 59 | |
7.02 | Litigation | 61 | |
7.03 | Existence, etc. | 61 | |
7.04 | Prohibition of Fundamental Changes | 62 | |
7.05 | Margin Deficiency | 62 | |
7.06 | Notices | 62 | |
7.07 | Interest Rate Protection Agreements | 63 | |
7.08 | Reports | 63 | |
7.09 | Underwriting Guidelines | 64 | |
7.10 | Transactions with Affiliates | 64 | |
7.11 | Limitation on Liens | 64 | |
7.12 | Limitation on Guarantees | 64 | |
7.13 | Limitation on Distributions | 64 | |
7.14 | Maintenance of Tangible Net Worth | 64 | |
7.15 | Maintenance of Ratio of Total Indebtedness to Tangible Net Worth | 65 | |
7.16 | Maintenance of Profitability | 65 |
7.17 | Servicer; Servicing File | 65 | |
7.18 | Maintenance of Liquidity | 65 | |
7.19 | Required Filings | 65 | |
7.20 | No Adverse Selection | 65 | |
7.22 | Remittance of Prepayments in Full | 65 | |
7.23 | Agency Approvals | 66 | |
7.24 | [Reserved] | 66 | |
7.25 | Maintenance of Property; Insurance | 66 | |
7.26 | MERS Designated Mortgage Loans | 66 | |
7.27 | Loan Purchase Agreements | 66 | |
7.28 | Reserved | 66 | |
7.29 | Power of Attorney | 66 | |
7.30 | Quality Control | 66 | |
7.31 | Maintenance of Papers, Records and Files | 67 | |
7.32 | Taxes, Etc. | 67 | |
7.33 | Reserved | 68 | |
7.34 | MERS | 68 | |
7.35 | Maintenance of Financial Covenants and Reporting Requirements | 68 | |
7.36 | FHA/VA/RHS Loans | 68 | |
7.37 | Protection of the Buyer’s Interests in the Purchased Loans | 68 | |
7.38 | Division of Limited Liability Company | 68 | |
Section 8. | Events of Default | 69 | |
Section 9. | Remedies Upon Default | 73 | |
Section 10. | No Duty of The Buyer | 74 | |
Section 11. | Recognition of the US Special Resolution Regimes | 74 | |
Section 12. | Reserved | 74 | |
Section 13. | The Agent | 74 | |
13.01 | Appointment | 74 | |
13.02 | Duties of Agent | 75 | |
13.03 | Delegation of Duties | 75 | |
13.04 | Exculpatory Provisions | 75 | |
13.05 | Reliance by Agent | 75 | |
13.06 | Notices | 76 | |
13.07 | Non Reliance by Buyer | 76 | |
13.08 | Indemnification | 77 | |
13.09 | Successor Agent | 77 | |
Section 14. | Miscellaneous | 77 | |
14.01 | Delay Not Waiver; Remedies Are Cumulative | 77 | |
14.02 | Notices | 78 | |
14.03 | Use of Employee Plan Assets | 78 |
14.04 | Indemnification and Expenses | 78 | |
14.05 | Waiver of Redemption and Deficiency Rights | 80 | |
14.06 | Reimbursement | 80 | |
14.07 | Termination and Survival | 80 | |
14.08 | Severability | 81 | |
14.09 | Amendments and Waivers | 81 | |
14.10 | Assignments and Participations | 82 | |
14.11 | Successors and Assigns | 83 | |
14.12 | Reserved | 83 | |
14.13 | Captions | 84 | |
14.14 | Counterparts | 84 | |
14.15 | Governing Law; Repurchase Agreement Constitutes Security Agreement | 84 | |
14.16 | Reserved | 84 | |
14.17 | Electronic Signatures | 84 | |
14.18 | Submission To Jurisdiction; Waivers | 84 | |
14.19 | WAIVER OF JURY TRIAL | 85 | |
14.20 | Acknowledgments | 85 | |
14.21 | Hypothecation or Pledge of Purchased Items | 85 | |
14.22 | Servicing | 85 | |
14.23 | Periodic Due Diligence Review | 88 | |
14.24 | [Reserved] | 89 | |
14.25 | Set-Off | 89 | |
14.26 | Single Agreement | 90 | |
14.27 | Intent | 90 | |
14.28 | Confidentiality | 91 | |
14.29 | Entire Agreement | 92 |
SCHEDULES
SCHEDULE 1 | Representations and Warranties re: Eligible Mortgage Loans |
SCHEDULE 2 | Filing Jurisdictions and Offices |
SCHEDULE 3 | Previous Names, Assumed Names or Trade Names used by the Seller |
SCHEDULE 4 | Cooperative Mortgage Loan Documents |
SCHEDULE 5 | Information for Servicer Reports |
SCHEDULE 6 | Excluded States |
EXHIBITS
EXHIBIT A | Takeout Investors |
EXHIBIT B | Underwriting Guidelines |
EXHIBIT C | Form of Servicer Notice |
EXHIBIT D | Form of Takeout Assignment |
EXHIBIT E | Form of Assignment and Acceptance |
EXHIBIT F | Form of Takeout Proceeds Identification Letter |
EXHIBIT G | [RESERVED] |
EXHIBIT H | Form of Compliance Certificate |
MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT
MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT, dated as of June 3, 2020 (as amended, restated, supplemented or otherwise modified and in effect from time to time, this “Repurchase Agreement”), by and between HOME POINT FINANCIAL CORPORATION, a New Jersey corporation (the “Seller”), MORGAN STANLEY BANK, N.A., a national banking association (the “Buyer”) and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company, as agent for the Buyer (together with any successor agent appointed from time to time in accordance with the terms of Section 13.09, the “Agent”).
RECITALS
Buyer shall, with respect to the Committed Amount, and may, with respect to the Uncommitted Amount, from time to time, upon the terms and conditions set forth herein, agree to enter into transactions in which Seller transfers to Buyer Eligible Mortgage Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Purchased Loans at a date certain, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction,” and, unless otherwise agreed in writing, shall be governed by this Repurchase Agreement.
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Repurchase Agreement in the singular to have the same meanings when used in the plural and vice versa):
“1934 Act” shall mean the Securities and Exchange Act of 1934, as amended from time to time.
“Acceptable State” shall mean any state other than those listed on Schedule 6 as such Schedule may be amended, revised or otherwise modified from time to time by mutual written agreement (which may be via email) between the Buyer and the Seller.
“Accepted Servicing Practices” shall mean with respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) of prudent mortgage lending institutions that service mortgage loans of the same type as the Eligible Mortgage Loans in the jurisdiction where the related Mortgaged Property is located, and, to the extent related to Agency Mortgage Loans, which are in accordance with the applicable FHA Regulations, VA Regulations, RHS, Ginnie Mae, Freddie Mac or Fannie Mae servicing practices and procedures for MBS pool mortgages, as defined in the applicable FHA, VA, RHS, Ginnie Mae, Freddie Mac and Fannie Mae servicing guides including future updates, and in a manner at least equal in quality to the servicing the Seller or the Seller’s designee provides to mortgage loans which it owns in its own portfolio.
“Accrual Period” shall mean (a) with respect to any Payment Date as to which the Non-Utilization Fee is calculated, the period beginning on a Payment Date and ending on the day before the third following Payment Date, and (b) with respect to the Termination
Date, the period beginning on the last Payment Date as to which a Non-Utilization Fee was calculated and ending on the day before the Termination Date.
“Affiliate” shall mean with respect to any Person, any other Person which, directly or indirectly, controls, is controlled by, or is under common control with, such 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 purposes of this definition, “control” (together with the correlative meanings of “controlled by” and “under common control with”) means possession, directly or indirectly, of the power (a) to vote 20% or more of the securities (on a fully diluted basis) having ordinary voting power for the directors or managing general partners (or their equivalent) of such Person, or (b) to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.
“Agency” shall mean Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA, RHS and any other government mortgage loan program acceptable to the Buyer (or the Agent on the Buyer’s behalf) or any successors thereto.
“Agency Approvals” shall mean approval by the Agencies as an approved issuer in good standing, as more particularly defined in Section 6.07(b) hereof.
“Agency Guide” shall mean, with respect to Fannie Mae securities and Fannie Mae eligible Mortgage Loans, the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide, with respect to Freddie Mac securities and Freddie Mac eligible Mortgage Loans, the Freddie Mac Sellers’ and Servicers’ Guide; and with respect to any other Agency, the relevant guide or guidelines or regulations, in each case including all exhibits thereto, as such guide may be amended, supplemented or otherwise modified from time to time.
“Agency Mortgage Loan” shall mean a Mortgage Loan which is eligible to be sold to Fannie Mae or Freddie Mac or which is a FHA Loan, VA Loan or RHS Loan, or is otherwise eligible to be sold to, or insured by, any other Agency pursuant to any mortgage loan program acceptable to Buyer.
“Agency Renovation Loan” shall mean any Agency Mortgage Loan that is an FHA §203(h) Loan, an FHA §203(k) 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” shall have the meaning set forth in the preamble to this Repurchase Agreement.
“Aggregate Utilization Ratio” for any Accrual Period shall mean, as of any date of determination, the ratio obtained by dividing (i) the sum of the Purchase Prices outstanding on each date during such Accrual Period by (ii) the sum of the Maximum Amount in effect on each day during such Accrual Period.
“ALTA” shall mean the American Land Title Association.
“Applicable Index” shall mean (i) initially, LIBOR, and (ii) on and after an Index Transition Date, the Replacement Index in effect on such Index Transition Date.
“Applicable Law” shall mean, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.
“Applicable Pricing Spread” shall mean, for each Type of Eligible Mortgage Loan, the applicable pricing spread set forth in the Pricing Side Letter.
“Applicable Purchase Rate” shall mean, for each Type of Eligible Mortgage Loan, the applicable purchase rate set forth in the Pricing Side Letter.
“Appraised Value” shall mean the value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.
“Assignment and Acceptance” shall have the meaning set forth in Section 14.10(a) hereof.
“Assignment of Mortgage” shall mean, 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 and pledge of the mortgage.
“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time.
“Best’s” shall mean Best’s Key Rating Guide, as the same shall be amended from time to time.
“BHC Act Affiliate” shall have the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Blocked Account” shall have the meaning set forth in Section 3.01(b) hereof.
“Blocked Account Agreement” shall mean the collection account control agreement to be entered into by the Buyer, the Agent, the Seller and the related depository bank in form and substance acceptable to Buyer with respect to the Blocked Account, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a legal holiday in the State of New York, the State of Texas or the State of Michigan, or (iii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New York or the Custodian is authorized or obligated by law or executive order to be closed.
“Buyer” shall have the meaning provided in the introductory paragraph hereto.
“Calculation Period” shall mean, with respect to any Transaction, (a) initially, the period commencing on the related Purchase Date to but excluding the first day of the following calendar month; and (b) thereafter, each period commencing on the first day of the calendar month to and including the last day of such calendar month. Notwithstanding the foregoing, no Calculation Period may end after the Termination Date.
“Capital Lease Obligations” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Repurchase Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Capital Stock” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all similar ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing.
“Cash Equivalents” shall mean (a) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of [***] or less from the date of acquisition and overnight bank deposits of any commercial bank having capital and surplus in excess of [***] (c) repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than [***] with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within [***] after the day of acquisition, (e) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of [***] or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (b) of this definition, or (g) shares of money market, mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.
“Change of Control” shall mean, with respect to Seller, Home Point Capital Inc., ceasing to own directly or indirectly more than [***] 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.
“Closing Agent” shall mean, with respect to any Wet-Ink Transaction, an entity reasonably satisfactory to the Buyer (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) to which the proceeds of such Wet-Ink Transaction are to be wired pursuant to the instructions of the Seller. Unless the Buyer notifies the Seller (electronically or in writing) that a Closing Agent is unsatisfactory, each Closing Agent utilized by the Seller shall be deemed satisfactory; provided, that the Buyer shall instruct the Custodian that no funds shall be transferred to the account of any Closing Agent after the date that is five (5) Business Days following the date that notice is delivered to the Seller that such Closing Agent is unsatisfactory, and provided, further, that the Recognized Value shall be deemed to be zero with respect to each Mortgage Loan, for so long as such Mortgage Loan is a Wet-Ink Mortgage Loan, as to which the proceeds of such Mortgage Loan were wired to a Closing Agent with respect to which the Buyer has notified the Seller at any time (both before and after the related Purchase Date without regard to the five (5) Business Day period referenced above) that such Closing Agent is not satisfactory.
“Code” shall mean the Internal Revenue Code of 1986.
“Commitment Fee” shall have the meaning assigned thereto in the Pricing Side Letter.
“Committed Amount” shall have the meaning assigned thereto in the Pricing Side Letter.
“Compliance Certificate” shall have the meaning set forth in Section 7.01 hereof.
“Compounded SOFR” shall mean the compounded average of SOFR, as calculated and published by, or at the direction of, a Relevant Governmental Body.
“Confirmation” shall mean, with respect to any Transaction, a confirmation of such Transaction by the Buyer (or the Agent) delivered pursuant to Section 2.02.
“Conforming Changes” shall mean any technical, administrative or operational change the Buyer determines, in its discretion, is both (i) appropriate to implement the Index Transition and (ii) consistent with Market Practice.
“Contractual Obligation” shall mean as to any Person, any provision of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound or any provision of any security issued by such Person.
“Cooperative Corporation” shall mean the cooperative apartment corporation that holds legal title to a Cooperative Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
“Cooperative Mortgage Loan” shall mean a Mortgage Loan that is secured by a first lien on a perfected security interest in Cooperative Shares and the related Proprietary Lease granting exclusive rights to occupy the related Cooperative Unit in the building owned by the related Cooperative Corporation.
“Cooperative Mortgage Loan Documents” shall mean the documents listed on Schedule 4 attached hereto, if applicable, or as otherwise mutually agreed.
“Cooperative Mortgage Note” shall mean the original executed promissory note or other evidence of the indebtedness of a Mortgagor with respect to a Cooperative Mortgage Loan.
“Cooperative Project” shall mean all real property owned by a Cooperative Corporation in the State of New York including the land, separate dwelling units and all common elements.
“Cooperative Shares” shall mean the shares of stock issued by a Cooperative Corporation and allocated to a Cooperative Unit and represented by a stock certificate.
“Cooperative Unit” shall mean a specific unit in a Cooperative Project.
“Custodial and Disbursement Agreement” shall mean the Custodial and Disbursement Agreement, dated as of the date hereof, among the Seller, the Custodian, the Disbursement Agent, the Agent and the Buyer, as the same shall be amended, restated, supplemented or otherwise modified and in effect from time to time, and any other custodial agreement entered into pursuant to this Repurchase Agreement.
“Custodian” shall mean U.S. Bank National Association, as custodian under the Custodial and Disbursement Agreement, and its successors and permitted assigns thereunder.
“Cut-Off Date” shall mean the first day of the month in which the related Purchase Date occurs.
“Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Default Right” shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Determination Date” shall mean, with respect to any Interest Period: (i) if the Applicable Index with respect to such Interest Period is LIBOR, the date set forth in the related definitions; or (ii) if the Applicable Index with respect to such Interest Period is a Replacement Index, the date the Buyer determines, on or prior to the applicable Index Transition Date, is consistent with Market Practice in implementing the applicable Index Transition.
“Disbursement Account” shall mean 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 the Buyer, the Agent, the Disbursement Agent and the Seller with respect to the Disbursement Account (as defined in the Custodial and Disbursement Agreement).
“Disbursement Agent” shall mean U.S. Bank National Association, as disbursement agent under the Custodial and Disbursement Agreement, and its successors and permitted assigns thereunder.
“Dollars” and “$” shall mean lawful money of the United States of America.
“Due Date” shall mean the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
“Due Diligence Review” shall mean the performance by the Buyer (or the Agent on behalf of the Buyer) of any or all of the reviews permitted under Section 14.23 hereof with respect to any or all of the Purchased Loans, as desired by the Buyer and the Agent from time to time.
“Early Repurchase Date” shall have the meaning provided in Section 2.05(d) hereof.
“Early Monthly Payment Amount” shall have the meaning provided in Section 3.01(a).
“Effective Date” shall mean the date upon which the conditions precedent set forth in Section 5.01 hereof shall have been satisfied.
“Electronic Agent” shall mean Merscorp Holdings, Inc., as electronic agent under the Electronic Tracking Agreement, and its successors and permitted assigns thereunder.
“Electronic Tracking Agreement” shall mean the Electronic Tracking Agreement, dated as of June 3, 2020, among the Seller, the Buyer, the Agent, the Electronic Agent and MERS, as the same shall be amended, restated, supplemented or otherwise modified from time to time.
“Eligible Mortgage Loans” shall have the meaning assigned thereto in the Pricing Side Letter.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” shall mean any Person which, together with the Seller, is treated as a single employer under Section 414(b) or (c) of the Code or solely for purposes of
Section 302 of ERISA and Section 412 of the Code is treated as a single employer described in Section 414(b), (c), (m), or (o) of the Code.
“Escrow Payments” shall mean with respect to any Mortgage Loan, the amounts constituting ground rents, Taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“Eurocurrency Liabilities” shall have the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
“Event of Default” shall have the meaning provided in Section 8 hereof.
“Exception” shall have the meaning specified in the Custodial and Disbursement Agreement.
“Exception Report” shall mean the portion of the Mortgage Loan Schedule and Exception Report detailing Exceptions in respect of each Mortgage Loan.
“Excess Proceeds” shall have the meaning provided in Section 2.05(d) hereof.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to or required to be withheld from a payment to the Buyer (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of the recipient being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of the Buyer, U.S. federal withholding Taxes imposed on amounts payable to or for the account of the Buyer with respect to an applicable interest in each Transaction pursuant to a law in effect on the date on which the Buyer acquires such interest in such Transactions or the Buyer changes its lending office, except, in each case, to the extent such Taxes were payable to either such Buyer’s assignor immediately before such Buyer became a party hereto (c) Taxes attributable to Buyer’s failure to comply with Section 4.12(e), and (d) U.S. federal withholding Taxes imposed under FATCA.
“Fannie Mae” shall mean the Federal National Mortgage Association, or any successor thereto.
“Fannie Mae HomeStyle Loan” shall mean 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.
“FATCA” shall mean sections 1471 through 1474 of the Code, as of the date of this Repurchase Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices
adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such sections of the Code.
“Federal Funds Rate” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Buyer from three federal funds brokers of recognized standing selected by it.
“FHA” shall mean the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
“FHA Approved Mortgagee” shall mean an institution which is approved by FHA to act as servicer and mortgagee of record pursuant to FHA Regulations.
“FHA Insurance Contract” shall mean the contractual obligation of FHA respecting the insurance of an FHA Loan pursuant to the National Housing Act, as amended.
“FHA Loan” shall mean a Mortgage Loan that is the subject of an FHA Insurance Contract as evidenced by a Mortgage Insurance Certificate.
“FHA Regulations” shall mean the regulations promulgated by HUD under the National Housing Act, codified in 24 Code of Federal Regulations, and other HUD issuances relating to FHA Loans, including the related handbooks, Circulars, Notices and Mortgagee Letters.
“FHA Streamline Loan” shall mean a FHA Loan originated pursuant to the FHA Streamline Refinance” program in compliance with FHA Regulations, including HUD Handbook 4155.1.6.C.
“FHA §203(h) Loan” shall mean a closed-end first lien FHA Loan with the following characteristics:
(a) a portion of the proceeds of which will be used for the purpose of acquiring, rehabilitating or repairing the related single family property;
(b) which satisfies the applicable requirements of Section 203(h) of the National Housing Act and any applicable regulations; and
the payment of which is insured by the FHA under the National Housing Act or with respect to which a current binding and enforceable commitment for such insurance has been issued by the FHA.
“FHA §203(k) Loan” shall mean a closed-end first lien FHA Loan with the following characteristics:
(c) a portion of the proceeds of which will be used for the purpose of rehabilitating or repairing the related single family property;
(d) which satisfies the definition of “rehabilitation loan” under 24 C.F.R. 203.50(a); and
(e) the payment of which is insured by the FHA under the National Housing Act or with respect to which a current binding and enforceable commitment for such insurance has been issued by the FHA.
“FICO Score” shall mean the credit score provided by Fair, Isaac & Company, Inc. or such other organization providing credit scores.
“FMV Adjustments” shall mean adjustments to the capitalized value of Seller’s servicing rights resulting from changes in valuation inputs for assumptions used in the valuation model.
“Freddie Mac” shall mean the Federal Home Loan Mortgage Corporation, or any successor thereto.
“GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States.
“Ginnie Mae” shall mean the Government National Mortgage Association, or any successor thereto.
“Governmental Authority” shall mean 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, accounting board or authority having jurisdiction over the Seller, any of its Subsidiaries or any of its properties.
“Gross Margin” shall mean with respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note.
“Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent Taxes and insurance or other obligations in respect of a Mortgaged Property, to the extent required by the Buyer. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Income” shall mean, with respect to any Purchased Loan at any time, any principal and/or interest thereon and all dividends, sale proceeds (including, without limitation, any proceeds from the liquidation or securitization of such Purchased Loan or other disposition thereof), rent and other collections and distributions thereon (including, without limitation, any proceeds received in respect of mortgage insurance), but not including any Escrow Payment or any commitment fees, origination fees and/or servicing fees accrued in respect of periods on or after the initial Purchase Date with respect to such Purchased Loan.
“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Seller under any Repurchase Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indebtedness” shall mean, for any Person without duplication: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days after the date the respective goods are delivered or the respective services are rendered; (c) indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (g) indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; and (i) indebtedness of general partnerships of which such Person is a general partner.
“Index” shall mean Term SOFR, Compounded SOFR, the ISDA Fallback Rate and any other interest rate benchmark published for use by the Buyer in, among others, similar repurchase agreements with substantially similar assets.
“Index Rate” shall mean, with respect to an applicable Interest Period and Determination Date, a per annum rate of interest equal to the greater of (i) one percent (1.00%) and (ii) the Applicable Index.
“Index Transition” shall mean a transition or replacement of a Pricing Index with a Replacement Index as the Applicable Index following an Index Transition Event.
“Index Transition Date” shall mean the next subsequent Determination Date following an Index Transition Notice.
“Index Transition Event” shall mean the occurrence of a determination by the Buyer that one of the following events has occurred with respect to the then-current Applicable Index:
(a) a public statement or publication of information by or on behalf of the administrator of such Applicable Index announcing that the administrator has ceased or will cease to provide such Applicable Index permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Applicable Index;
(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Applicable Index, a Relevant Governmental Body, an insolvency official with jurisdiction over the administrator for such Applicable Index, a resolution authority with jurisdiction over the administrator for such Applicable Index or a court or an entity with similar insolvency or resolution authority over the administrator for such Applicable Index, which states that the administrator of such Applicable Index has ceased or will cease to provide such Applicable Index permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Applicable Index;
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Applicable Index announcing that such Applicable Index is no longer representative;
(d) a majority of similar transactions entered into in the previous calendar quarter reference a single Index other than such Applicable Index, as determined by Buyer in a manner that is consistent with Buyer’s determinations with respect to other repurchase facilities with similarly situated counterparties and with substantially similar assets subject thereto; or
(e) any change in any Requirements of Law prohibiting, restricting or limiting the use of such Applicable Index.
“Index Transition Notice” shall mean a notice given by the Buyer which sets forth in reasonable detail the circumstances of the Index Transition, designates an Index Transition Date and, if feasible, identifies other Interest Determinations and Conforming Changes to implement such Index Transition.
“Insurance Proceeds” shall mean with respect to each Mortgage Loan, proceeds of insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
“Insured Depository Institution” shall have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the United States Code, as amended from time to time.
“Interest Determination” shall mean any determination related to an Index or an Index Transition.
“Interest Period” shall mean, with respect to a Payment Date during which the Applicable Index is: (i) LIBOR, the Calculation Period; or (ii) a Replacement Index, a period the Buyer determines is consistent with Market Practice implementing the applicable Index Transition.
“Intangible Assets” shall mean the excess of the cost over book value of assets acquired, patents, trademarks, trade names, copyrights, franchises and other intangible assets (excluding in any event the value of any residual securities and the value of any owned or purchased mortgage servicing rights).
“Interest Rate Adjustment Date” shall mean with respect to each adjustable rate Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage Loan Schedule, on which the Mortgage Note Interest Rate is adjusted.
“Interest Rate Protection Agreement” shall mean, with respect to any or all of the Purchased Loans, any short sale of US Treasury Securities, futures contract, mortgage related security, eurodollar futures contract, options related contract, interest rate swap, cap or collar agreement or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by the Seller.
“ISDA” shall mean the International Swaps and Derivatives Association, Inc.
“ISDA Definitions” shall mean the 2006 ISDA Definitions published by ISDA 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.
“ISDA Fallback Adjustment” shall mean the adjustment (which may be zero or a positive or negative value) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an Index Transition.
“ISDA Fallback Rate” shall mean, with respect to any Index Transition, the Index identified by ISDA as a fallback for derivatives transactions referencing a London interbank offered rate.
“Laws” shall mean, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“LIBOR” shall mean, with respect to any date of determination, the LIBOR Rate.
“LIBOR Base Rate” shall mean, with respect to each day any Transaction is outstanding, the greater of (a) [***] and (b) the rate per annum equal to the rate appearing on Reuters Screen LIBOR01 Page as one-month LIBOR on such date (and if such date is not a Business Day, the rate quoted as one-month LIBOR on the Business Day immediately preceding such date), and if such rate shall not be so quoted, the rate per annum at which the Buyer is offered Dollar deposits at or about 10:00 A.M., New York City time, on such date by prime banks in the interbank eurodollar market where the eurodollar and foreign currency exchange operations in respect of the Transactions are then being conducted for delivery on such day for a period of thirty (30) days and in an amount comparable to the aggregate Purchase Price of all Transactions outstanding on such day.
“LIBOR Rate” shall mean with respect to each day during each Calculation Period pertaining to a LIBOR Transaction, a rate per annum determined for such day equal to the LIBOR Base Rate.
“LIBOR Transaction” shall mean a Transaction with respect to which the related Pricing Rate is determined by reference to the LIBOR Rate.
“Lien” shall mean any mortgage, lien, pledge, charge, security interest or similar encumbrance.
“Liquidity” shall mean with respect to any Person, the sum of (i) its unrestricted cash, plus (ii) its unrestricted Cash Equivalents, plus (iii) the aggregate amount of unused capacity available to such Person (taking into account applicable haircuts) under committed mortgage loan warehouse and servicer advance facilities for which such Person has unencumbered eligible collateral to pledge thereunder.
“Loan Guaranty Certificate” shall mean, with respect to any VA Loan, the physical or electronic certificate evidencing the VA Loan Guaranty Agreement.
“Loan Loss Reserves” shall mean funds held by the Seller to cover potential losses in connection with the mortgage loans owned in the Seller’s portfolio, including without limitation any amounts required to be maintained and held as a loan loss reserve in accordance with GAAP and any other regulatory requirement applicable to the Seller.
“Loan-to-Value Ratio” or “LTV” shall mean with respect to any Mortgage Loan, as of any date of determination, (i) with respect to any Agency Mortgage Loan, the loan to value ratio of such Mortgage Loan as determined in accordance with the Agency Guides of the Agency which is insuring or guaranteeing such Mortgage Loan or to which such Mortgage Loan is eligible to be sold, or (ii) with respect to any Mortgage Loan that is not an Agency Mortgage Loan, the ratio of (a) the outstanding principal amount of such Mortgage Loan, to (b) the Property Value of the Mortgaged Property securing such Mortgage Loan.
“Margin Base” shall mean the aggregate Recognized Value of all Purchased Loans.
“Margin Deficiency” shall have the meaning provided in Section 2.07(b) hereof.
“Margin Threshold” shall mean an amount equal to [***].
“Market Practice” shall mean the practice and course of dealing by lenders and buyers, including the manner of implementing Index Transitions, within the residential mortgage warehouse lending market with respect to other warehouse and repurchase facilities with similarly situated counterparties to Seller and with substantially similar assets to the Eligible Mortgage Loans.
“Market Value” shall mean, as of any date with respect to any Eligible Mortgage Loan or Purchased Loan, the price at which such Eligible Mortgage Loan or Purchased Loan could readily be sold as determined by the Agent in its sole good faith discretion, which price may be determined to be zero. The Agent’s determination of Market Value shall be conclusive upon the parties absent manifest error on the part of the Agent.
“Massachusetts Subprime Loan” shall mean a Mortgage Loan to a Mortgagor with a FICO Score of [***] or less at the time of origination if such Mortgage Loan is secured by a residence located in Massachusetts or made to a Mortgagor whose primary residence is in Massachusetts.
“Master Trust Receipt” shall have the meaning provided thereto in the Custodial and Disbursement Agreement.
“Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations, or financial condition of any Person, (b) the ability of the any Person to perform its obligations under any of the Repurchase Documents to which it is a party, (c) the validity, legality, binding effect, or enforceability of any of the Repurchase Documents or any security interest granted thereunder, (d) the rights and remedies of the Buyer under any of the Repurchase Documents, (e) the timely payment of the Repurchase Price or the Price Differential on the Transactions or other amounts payable in connection therewith or (f) the Purchased Items taken as a whole.
“Maximum Amount” shall have the meaning assigned thereto in the Pricing Side Letter.
“MBA Method of Delinquency” shall mean the methodology used by the Mortgage Bankers Association for calculating the delinquency of mortgage loans. For the avoidance of doubt, in applying the MBA Method of Delinquency, a Mortgage Loan is considered “30 Days Delinquent” if the monthly payment is not received prior to the close of business on the day that immediately precedes the due date on which the next monthly payment is due. For example, a mortgage loan will be considered sixty (60) Days Delinquent if the monthly payment originally due on May 1 is not received by the close of business on June 30.
“MERS” shall mean Mortgage Electronic Registration Systems, Inc. and its successors in interest.
“MERS Designated Mortgage Loan” shall have the meaning assigned to such term in Section 3 of the Electronic Tracking Agreement.
“MERS Procedures Manual” shall mean the MERS Procedures Manual attached as Exhibit B to the Electronic Tracking Agreement, as it may be amended, supplemented or otherwise modified from time to time.
“MERS® System” shall mean the Electronic Agent’s mortgage electronic registry system, as more particularly described in the MERS Procedures Manual.
“Minimum Price Differential” means, for each Accrual Period, the amount obtained by daily application of the Pricing Rate to an amount equal to sixty percent (60%) of the Maximum Amount in effect for each day in such Accrual Period.
“Monthly Payment” shall mean the scheduled monthly payment of principal and interest on a Mortgage Loan as adjusted in accordance with changes in the Mortgage Note Interest Rate pursuant to the provisions of the Mortgage Note for an adjustable rate Mortgage Loan.
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Mortgage” shall mean the mortgage, deed of trust or other instrument securing a Mortgage Note, which creates a first lien on the fee in real property securing the Mortgage Note.
“Mortgage File” shall have the meaning assigned thereto in the Custodial Agreement.
“Mortgage Insurance Certificate” shall mean the physical or electronic certificate evidencing an FHA Insurance Contract.
“Mortgage Loan” shall mean a mortgage loan which the Seller has sold to the Buyer pursuant hereto and which the Custodian has been instructed to hold for the Buyer pursuant to the Custodial and Disbursement Agreement, and which Mortgage Loan includes, without limitation, (i) a Mortgage Note and related Mortgage, (ii) all right, title and interest of the Seller in and to the Mortgaged Property covered by such Mortgage and (iii) the related Servicing Rights.
“Mortgage Loan Data File” shall mean a computer-readable file containing information with respect to each Purchased Loan, to be delivered by the Seller to the Agent pursuant to Section 2.02(a) hereof, the data fields of which are identified on Annex 1 to the Custodial and Disbursement Agreement.
“Mortgage Loan Documents” shall mean, with respect to each Purchased Loan, the documents comprising the Mortgage File for such Purchased Loan, as applicable.
“Mortgage Loan Issue” shall mean, with respect to any Purchased Loan, a breach of the representations and warranties set forth in Section 6.11(a), Section 6.25, or Schedule 1, which, to the extent such representations and warranties prove to have been incorrect, untrue, or false or intentionally misleading in any material respect with respect to one or more individual Purchased Loans (and not all Purchased Loans collectively) shall be
considered solely for the purpose of determining the Recognized Value of the Purchased Loans; unless (i) the Seller 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 the Buyer in its sole discretion to be materially false or misleading on a regular basis.
“Mortgage Loan Schedule” shall have the meaning assigned thereto in the Custodial and Disbursement Agreement.
“Mortgage Loan Schedule and Exception Report” shall mean the mortgage loan schedule and exception report prepared by the Custodian pursuant to the Custodial and Disbursement Agreement.
“Mortgage Note” shall mean the original executed promissory note or other evidence of the indebtedness of a Mortgagor with respect to a Mortgage Loan.
“Mortgage Note Index” shall mean with respect to each adjustable rate Mortgage Loan, the index set forth in the related Mortgage Note for the purpose of calculating the interest rate thereon.
“Mortgage Note Interest Rate” shall mean the annual rate of interest borne on the Mortgage Note, which shall be adjusted from time to time with respect to adjustable rate Mortgage Loans.
“Mortgage Note Interest Rate Cap” shall mean with respect to an adjustable rate Mortgage Loan, the limit on each Mortgage Note Interest Rate adjustment as set forth in the related Mortgage Note.
“Mortgaged Property” shall mean the real property (including all improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the debt evidenced by a Mortgage Note or, in the case of any Cooperative Mortgage Loan, the Cooperative Shares and the Proprietary Lease.
“Mortgagee” shall mean the Seller or any subsequent holder of a Mortgage Loan.
“Mortgagor” shall mean the obligor on a Mortgage Note.
“MS&Co.” shall mean Morgan Stanley & Co. LLC, a registered broker-dealer.
“MS Indebtedness” shall mean any indebtedness of the Seller hereunder and under any other arrangement (other than this Repurchase Agreement) between the Seller on the one hand and the Buyer or an Affiliate of the Buyer on the other hand (including, without limitation, the amount of any loans, interest due and default interest, termination payments, hedging costs, structuring or other facility fees and expenses).
“Multiemployer Plan” shall mean a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been (or were required to be made) within the
last six (6) years or are currently required to be made by the Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.
“Net Income” shall mean, for any period, the net income of the Seller for such period as determined in accordance with GAAP, excluding FMV Adjustments.
“Nevada Subprime Loan” shall mean a Mortgage Loan to a Mortgagor with a FICO Score of [***] or less at the time of origination if such Mortgage Loan is secured by a residence located in Nevada or made to a Mortgagor whose primary residence is in Nevada.
“Non-QM Mortgage Loan” shall mean a Mortgage Loan that is not a “qualified mortgage” as defined by 12 CFR 1026.43(e) because either (i) the debt-to-income ratio of the related Mortgagor is greater than forty-three percent (43%) or (ii) such Mortgage Loan is an “interest-only” Mortgage Loan.
“Non-Utilization Fee” shall have the meaning provided in Section 3.04 hereof.
“OFAC” shall mean the Office of Foreign Assets Control of the United States Department of the Treasury.
“OFAC-Administered Sanction” shall have the meaning set forth in Section 6.22 hereof.
“Origination Date” shall mean, with respect to each Mortgage Loan, the date of the Mortgage Note relating to such Mortgage Loan, unless such information is not provided by the Seller with respect to such Mortgage Loan.
“Other Connection Taxes” means, with respect to any Buyer, Taxes imposed as a result of a present or former connection between such Buyer and the jurisdiction imposing such Tax (other than connections arising from such Buyer 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 Repurchase Document, or sold or assigned an interest in any Purchased Item or Repurchase Document).
“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Repurchase Document.
“Participant Register” shall have the meaning provided in Section 14.10(d) hereof.
“Payment Date” shall mean, with respect to each Transaction, the sixth (6th) Business Day of each calendar month, commencing with the first such date after the related Purchase Date.
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof).
“Plan” shall mean an employee pension benefit plan established or maintained by the Seller or any ERISA Affiliate and subject to Title IV of ERISA, other than a Multiemployer Plan.
“PMI Policy” or “Primary Insurance Policy” shall mean a policy of primary mortgage guaranty insurance issued by a Qualified Insurer.
“Post-Default Rate” shall have the meaning assigned thereto in the Pricing Side Letter.
“Predatory Lending Practices” shall mean any and all underwriting and lending policies, procedures and practices defined or enumerated in any local or municipal ordinance or regulation or any state or federal regulation or statute prohibiting, limiting or otherwise relating to the protection of consumers from such policies, procedures and practices. Such policies, practices and procedures may include, without limitation, charging excessive loan, broker, and closing fees, charging excessive rates of loan interest, making loans without regard to a consumer’s ability to re-pay the loan, refinancing loans with no material benefit to the consumer, charging fees for services not actually performed, discriminating against consumers on the basis of race, gender, or age, failing to make proper disclosures to the consumer of the consumer’s rights under federal and state law, and any other predatory lending policy, practice or procedure as defined by ordinance, regulation or statute.
“Prescribed Laws” shall mean, collectively, (a) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the USA PATRIOT Act), (b) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) the International Emergency Economic Power Act, 50 U.S.C. §1701 et. seq. and (d) all other Requirements of Law relating to money laundering or terrorism, including without limitation, the USA PATRIOT Act and all regulations and executive orders promulgated with respect to money laundering or terrorism, including, without limitation, those promulgated by the OFAC.
“Price Differential” shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate (or, in during the continuation of an Event of Default, the daily application of the Post-Default Rate) for such Transaction to the Purchase Price for such Transaction, calculated on the basis of a three hundred sixty (360) day year and the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending
on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by the Seller to the Buyer, prior to such date, with respect to such Transaction).
“Pricing Rate” shall have the meaning assigned thereto in the Pricing Side Letter.
“Pricing Side Letter” shall mean the pricing side letter, dated as of the date hereof, among the Seller, the Buyer and the Agent, as the same may be amended, supplemented or modified from time to time.
“Prime Jumbo Mortgage Loan” shall mean a Mortgage Loan where the original outstanding principal amount of such Mortgage Loan exceeds the eligibility limits for purchases by Freddie Mac or Fannie Mae, but which otherwise would be eligible to be sold to Fannie Mae or Freddie Mac.
“Principal” shall have the meaning assigned thereto in Annex I.
“Prohibited Person” shall have the meaning set forth in Section 6.22 hereof.
“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Lease” shall mean a lease on (or occupancy agreement with respect to) a Cooperative Unit evidencing the possessory interest of the owner of the Cooperative Shares or the Seller in such Cooperative Unit.
“Purchase Advice” shall have the meaning provided in Section 2.05(d) hereof.
“Purchase Advice Deficiency” shall have the meaning provided in Section 2.05(d) hereof.
“Purchase Date” shall mean the date on which a Transaction is entered into hereunder.
“Purchase Price” shall mean, with respect to each Purchased Loan, (i) on each Purchase Date therefor, an amount equal to the lesser of (a) the product of (x) the Applicable Purchase Rate times (y) the Market Value of such Purchased Loan, and (b) the product of (x) the Applicable Purchase Rate times (y) the outstanding principal balance of such Purchased Loan on such Purchase Date and (ii) thereafter, such amount decreased by the amount of any payments made by the Seller hereunder that are applied in reduction of such amount.
“Purchased Items” shall have the meaning provided in Section 4.01(b) hereof.
“Purchased Loans” shall mean the Mortgage Loans sold by the Seller on a servicing-released basis to the Buyer, in Transactions hereunder that have not been repurchased by the Seller in accordance with the terms of this Agreement (together with any additional Mortgage Loans transferred pursuant to Section 2.07) together with the
related Records, the related Servicing Rights (which, for the avoidance of doubt, were sold by the Seller and purchased by the Buyer on the related Purchase Date), the related Takeout Commitment, if any, and with respect to each Mortgage Loan, any related FHA Insurance Contract, any related VA Loan Guaranty Agreement, any related Rural Housing Service Guaranty, the Seller’s rights under any related escrow letter and/or insured closing letter, the Seller’s rights under any takeout commitment related to the Mortgage Loans and other Purchased Items with respect to the Mortgage Loans, such other property, rights, titles or interest as are specified on a Transaction Request, and all instruments, chattel paper, and general intangibles comprising or relating to all of the foregoing.
“Qualified Insurer” means an insurance company acceptable to Fannie Mae.
“Qualified Mortgage” shall mean a “qualified mortgage” as such term is defined under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended, and any regulations, rulings, interpretations or orders promulgated by any Governmental Authority thereunder.
“Qualified Originator” shall mean the Seller or a correspondent of the Seller approved by the Seller in accordance with the Seller’s correspondent approval process.
“Rate Adjustment” shall mean, an adjustment which may be zero or a positive or negative value, and:
(a) if the Applicable Index is LIBOR, than equal to zero;
(b) if the Index Transition is a transition from LIBOR to:
(i) Term SOFR, then the adjustment that has been selected, endorsed or recommended by the Relevant Governmental Body for such Index Transition;
(ii) Compounded SOFR, then the adjustment that has been selected, endorsed or recommended by the Relevant Governmental Body for such Index Transition;
(iii) the ISDA Fallback Rate, then the ISDA Fallback Adjustment;
(iv) a Replacement Index other than Term SOFR, Compounded SOFR, or the ISDA Fallback Rate, an adjustment, consistent with Market Practice for handling such Index Transition, selected by the Buyer;
(c) if the Index Transition is a transition from an Index other than LIBOR to another Index, an adjustment, consistent with Market Practice for handling such Index Transition, selected by the Buyer.
“Recognition Agreement” shall mean, with respect to a Cooperative Mortgage Loan, an agreement executed by a Cooperative Corporation which, among other things, acknowledges the lien of the Mortgage on the Mortgaged Property in question.
“Recognized Value” shall mean, with respect to each Purchased Loan the lesser of (a) the Applicable Purchase Rate of the Market Value of such Purchased Loan and (b) the Applicable Purchase Rate of the outstanding principal balance of such Purchased Loan. Recognized Value shall be zero with respect to each Purchased Loan that is not an Eligible Mortgage Loan.
“Records” shall mean, with respect to any Purchased Loan, all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by the Seller or any other person or entity on behalf of the Seller or the Custodian with respect to a Purchased Loan. Records shall include without limitation, the Mortgage Notes, any Mortgages, the Mortgage Loan Documents, the Servicing File, the Servicing Records and any other instruments necessary to document or service a Mortgage Loan that is a Purchased Loan, including, without limitation, the complete payment and modification history of each Purchased Loan.
“Register” shall have the meaning provided in Section 14.10(d) hereof.
“Related Credit Enhancement” shall have the meaning assigned to such term in Section 4.01(c).
“Regulation T, U or X” shall mean Regulation T, U or X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.
“Relevant Governmental Body” shall mean (i) the Federal Reserve Board or the Federal Reserve Bank of New York, or (ii) a committee officially endorsed or convened by the Federal Reserve Board or the Federal Reserve Bank of New York or any successor thereto.
“Remittance Amount” shall have the meaning provided in Section 2.05(d) hereof.
“Replacement Index” shall mean, as of the relevant Index Transition Date and thereafter until a subsequent Index Transition Date or the Termination Date, the first alternative Index set forth in the order below the Buyer determines is available, appropriate for repurchase facilities and consistent with Market Practice:
(a) Term SOFR;
(b) Compounded SOFR;
(c) an Index selected or recommended by the Relevant Governmental Body as the replacement for the then-current Applicable Index;
(d) the ISDA Fallback Rate; or
(e) an Index selected by the Buyer.
“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty (30) day notice period is waived by regulation (provided that a failure to meet the minimum funding standard of Section 412 of the Code or Sections 302 or 303 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(c) of the Code).
“Repurchase Agreement” shall have the meaning assigned in the introductory paragraph hereof.
“Repurchase Date” shall mean with respect to any Purchased Items the earliest to occur of (i) the Termination Date, (ii) any Early Repurchase Date, or (iii) any other date set forth in any Transaction Request, pursuant to the terms of this Repurchase Agreement.
“Repurchase Documents” shall mean, collectively, this Repurchase Agreement, the Custodial and Disbursement Agreement, the Pricing Side Letter, the Electronic Tracking Agreement, each Transaction Request, each Confirmation, if any, the Blocked Account Agreement, the Disbursement Account Control Agreement, any Servicer Notice, and any other related account control agreement.
“Repurchase Obligations” shall mean (a) all of the Seller’s obligation to pay the Repurchase Price on the Repurchase Date and other obligations and liabilities (including, without limitation, the obligation to pay the Commitment Fee, Non-Utilization Fee and any other fees and expenses hereunder) of the Seller to the Buyer, its Affiliates, Custodian or any other Person arising under, or in connection with, the Repurchase Documents or directly related to the Purchased Loans, whether now existing or hereafter arising; (b) any and all sums paid by the Buyer or on behalf of the Buyer following an Event of Default pursuant to the Repurchase Documents in order to preserve any Purchased Loan or its interest therein; (c) in the event of any proceeding for the collection or enforcement of any of the Seller’s indebtedness, obligations or liabilities referred to in clause (a), the reasonable expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Loan, or of any exercise by the Buyer, the Agent or any Affiliate of the Buyer of any of their respective rights under the Repurchase Documents, including without limitation, reasonable attorneys’ fees and disbursements and court costs; and (d) all of the Seller’s indemnity obligations to the Buyer and the Agent pursuant to the Repurchase Documents.
“Repurchase Price” shall mean, with respect to each Purchased Loan, the price at which such Purchased Loan is to be transferred from the Buyer or its designee (including the Custodian) to the Seller upon termination of the related Transaction on the Repurchase Date, which price will be determined in each case as the sum of the unpaid Purchase Price related to such Purchased Loan, the amount of any accrued and unpaid Price Differential that has accrued with respect to such Transaction and the amount of any fees or expenses due and payable under the Repurchase Documents.
“Requirement of Law” shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law (including, without duplication, Prescribed Laws and all laws with respect to unfair and deceptive lending practices and Predatory Lending Practices), 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” shall mean, as to any Person, the chief executive officer, the chief financial officer, the chief accounting officer, the treasurer or the chief operating officer of such Person; provided, that in the event any such officer is unavailable at any time he or she is required to take any action hereunder, Responsible Officer shall mean any officer authorized to act on such officer’s behalf as demonstrated by a certificate of corporate resolution.
“RHS Loan” shall mean a Mortgage Loan originated in accordance with the Rural Housing Service Section 502 Single Family Housing Guaranteed Loan Program, which Mortgage Loan is subject to a Rural Housing Service Guaranty and eligible for delivery to an Agency for inclusion in a loan pool securitized.
“Rural Housing Service” or “RHS” shall mean the Rural Housing Service of the USDA.
“Rural Housing Service Approved Lender” shall mean a lender which is approved by Rural Housing Service to act as a lender in connection with the origination of RHS Loans.
“Rural Housing Service Guaranty” shall mean with respect to a RHS Loan, the agreements evidencing the guaranty of such Loan by the Rural Housing Service.
“Rural Housing Service Regulations” shall mean the regulations, guidelines, instructions, policies and procedures adopted and implemented by the Rural Housing Service and applicable to (i) the origination and servicing of RHS Loans and (ii) the issuance and validity of Rural Housing Service Guaranties, in each case as such regulations, guidelines, instructions, policies and procedures may be revised or modified and in effect from time to time.
“Section 404 Notice” shall mean 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 related Mortgagor within thirty (30) days after the date on which such mortgage loan is sold or assigned to such creditor.
“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
“Security Agreement” shall mean the specific security agreement creating a security interest on and pledge of the Cooperative Shares and the appurtenant Proprietary Lease securing a Cooperative Mortgage Loan.
“Seller” shall have the meaning provided in the introductory paragraph hereof.
“Servicer” shall have the meaning provided in Section 14.22(d) hereof.
“Servicer Account” shall mean those certain custodial accounts established by a Servicer under the applicable Servicing Agreement and Servicer Notice for the benefit of the Buyer into which all Income collected by such Servicer on the Purchased Items serviced by such Servicer is remitted.
“Servicer Notice and Agreement” shall have the meaning provided in Section 14.22(d) hereof.
“Servicer Report” shall mean a list (in computer readable form) of Purchased Loans serviced by the Servicer, providing as to each such Purchased Loan the applicable information specified in Schedule 5 to this Repurchase Agreement.
“Servicer Termination Event” shall mean the occurrence of any of the following (a) any event of default (howsoever defined) by the Servicer under the Servicing Agreement, (b) a breach by Servicer of the Servicer Notice, (c) the Servicer’s FHA servicing eligibility is suspended, revoked or becomes subject to an investigation by the FHA or (d) the occurrence of an Event of Default that has not been waived.
“Servicing Agreement” shall have the meaning provided in Section 14.22(d) hereof.
“Servicing File” shall mean with respect to each Mortgage Loan, the file retained by or on behalf of the Seller consisting of originals of all documents in the Mortgage File which are not delivered to a Custodian and copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial and Disbursement Agreement and all Servicing Records.
“Servicing Records” shall have the meaning provided in Section 14.22(c) hereof.
“Servicing Rights” shall mean contractual, possessory or other rights of the Seller or any other Person to service or subservice a Mortgage Loan, whether arising under the Servicing Agreement, the Custodial and Disbursement Agreement or otherwise, to administer or service a Purchased Loan or to possess related Servicing Records.
“Settlement Date” shall mean, with respect to any Purchased Loan, the actual date on which the Takeout Price for such Purchased Loan is received by the Buyer, for the benefit of the Buyer, or the Seller pursuant to a Takeout Commitment or on which the purchase price paid for such Purchased Loan by the Takeout Investor is otherwise received by the Buyer, for the benefit of the Buyer, or the Seller.
“SOFR” shall mean the secured overnight financing rate published by the Relevant Governmental Body.
“Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by 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.
“System” shall mean all hardware or software, or any system consisting of one or more thereof, including, without limitation, any and all enhancements, upgrades, customizations, modifications and the like utilized by any Person for the benefit of such Person to perform its obligations and to administer and track, store, process, provide, and where appropriate, insert, true and accurate dates and calculations for dates and spans with respect to the Mortgage Loans.
“Takeout Assignment” shall mean an assignment executed by the Seller, whereby the Seller irrevocably assigns its rights and obligations under a Takeout Commitment, and which assignment shall be substantially in the form and content of Exhibit Error! Reference source not found. hereto.
“Takeout Commitment” shall mean a trade confirmation from a Takeout Investor to the Seller confirming the details of a forward trade between the Takeout Investor (as the buyer) and the Seller (as the seller) constituting a valid, binding and enforceable mandatory delivery commitment by a Takeout Investor to purchase on the anticipated Settlement Date and at a given Takeout Price described therein, and with respect to any Takeout Commitment related to Prime Jumbo Mortgage Loans or Non-QM Mortgage Loans, approved by the Buyer.
“Takeout Investor” shall mean a securities broker-dealer, Agency or other institution set forth on Exhibit A attached hereto or such other institution as mutually agreed in writing (which may be via email) by the Agent and the Seller.
“Takeout Price” shall mean as to each Takeout Commitment the purchase price (expressed as a percentage of par) set forth therein.
“Takeout Proceeds” shall mean as to each Purchased Loan which is subject to a Takeout Commitment, the actual amount of proceeds delivered to the Buyer, for the account of the Buyer, by the applicable Takeout Investor for the purchase of such Purchased Loan.
“Takeout Proceeds Identification Letter” shall mean a takeout proceeds identification letter, substantially in the form of Exhibit Error! Reference source not found. hereto.
“Tangible Net Worth” shall mean, as of a particular date,
(a) all amounts which would be included under equity on a balance sheet of the Seller at such date, determined in accordance with GAAP, less
(b) (i) amounts owing to the Seller from Affiliates and (ii) Intangible Assets.
“Tax” or “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” shall mean an Index that the Buyer determines meets each of the following criteria:
(a) is a forward-looking term rate;
(b) is based on SOFR;
(c) has a tenor of one month (disregarding business day adjustment); and
(d) has been selected, recommended or endorsed by the Relevant Governmental Body.
“Termination Date” shall mean the earliest of (i) June 2, 2021, or (ii) such earlier date on which this Repurchase Agreement shall terminate in accordance with the provisions hereof or by operation of law.
“Total Indebtedness” shall mean, for any period, the aggregate Indebtedness of the Seller during such period less the amount of any nonspecific balance sheet reserves maintained in accordance with GAAP.
“Transaction” shall have the meaning provided in the Recitals hereof.
“Transaction Request” shall mean a Transaction Request submitted electronically through the Buyer’s FTP site in a form acceptable to the Buyer.
“Type” shall mean each type of Mortgage Loan identified in the definition of Applicable Pricing Spread.
“Uncommitted Amount” shall have the meaning assigned thereto in the Pricing Side Letter.
“Underwriting Guidelines” shall mean the underwriting guidelines attached as Exhibit Error! Reference source not found. hereto, pursuant to which the Mortgage Loans were underwritten or acquired, which to the extent related to (i) Agency Mortgage Loans, conform to, and comply with, all current requirements of the applicable Agency, and (ii) Prime Jumbo Mortgage Loans or Non-QM Mortgage Loans, comply with all
requirements of the related Takeout Investor, in each case, in effect as of the date of this Repurchase Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with terms of this Repurchase Agreement.
“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest or the renewal or enforcement thereof in any Purchased Items is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.
“U.S. Special Resolution Regime” shall mean each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
“USDA” shall mean the United States Department of Agriculture.
“VA” shall mean the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.
“VA Approved Lender” shall mean a lender which is approved by VA to act as a lender in connection with the origination of VA loans.
“VA Loan” shall mean a Mortgage Loan that, as of the closing of such Mortgage Loan, is the subject of a VA Loan Guaranty Agreement and that will be evidenced by a physical or electronic Loan Guaranty Certificate delivered after closing of such Mortgage Loan.
“VA Loan Guaranty Agreement” shall mean 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, as amended.
“VA Regulations” shall mean the regulations promulgated by the Veterans Administration pursuant to the Serviceman’s Readjustment Act, as amended, codified in 36 Code of Federal Regulations, and other VA issuances relating to VA loans, including related Handbooks, Circulars and Notices.
“VA Streamline Loan” shall mean a VA Loan originated pursuant to the VA “Interest Rate Reduction Refinance Loan” program and in compliance with VA Regulations.
“Wet-Aged Report” shall have the meaning specified in the Custodial and Disbursement Agreement.
“Wet-Ink Mortgage Loan” shall mean a Mortgage Loan for which the related Mortgage File (i) has not been delivered to Custodian or (ii) has been delivered to Custodian but has a Fatal Exception(s) (as such term is defined in the Custodial and Disbursement Agreement).
“Wet-Ink Transaction” shall mean a Transaction in which a Wet-Ink Mortgage Loan is the Purchased Loan. A Wet-Ink Transaction shall cease to be a Wet-Ink Transaction on the date that the underlying Wet-Ink Mortgage Loan ceases to be a Wet-Ink Mortgage Loan (in accordance with the definition thereof).
“Whole Loan Transfer” shall mean the sale or transfer of some or all of the Mortgage Loans to a Takeout Investor in a whole loan transaction.
1.02 Accounting Terms and Determinations. Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Buyer hereunder shall be prepared, in accordance with GAAP.
1.03 Interpretation. The following rules of this subsection 1.03 apply unless the context requires otherwise or as otherwise provided in this Repurchase Agreement. 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 Repurchase Agreement. A reference to an agreement or document (including any Repurchase Document) is to the agreement or document as amended, modified, novated, supplemented or replaced, except to the extent prohibited thereby or by any Repurchase Document and in effect from time to time in accordance with the terms thereof. A reference to legislation or to a provision of legislation includes any amendment, modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it. 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 Repurchase Agreement as a whole and not to any particular provision of this Repurchase 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 Repurchase Agreement, any determination, consent, approval, statement or certificate made or confirmed in writing with notice to the Seller by the Buyer or the Agent on the Buyer’s behalf or an authorized officer of the Buyer or the Agent provided for in this Repurchase Agreement shall be made in good faith and 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.
This Repurchase Agreement is the result of negotiations among, and has been reviewed by counsel to, the Buyer, the Agent and the Seller, and is the product of all parties. In the interpretation of this Repurchase 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 Repurchase Agreement or this Repurchase Agreement itself. Except where otherwise expressly stated, the Buyer or the Agent on behalf of the Buyer may give or withhold, or give conditionally, approvals and consents and may form opinions and make determinations at its absolute discretion. Any requirement of good faith, discretion or judgment by the Buyer or the Agent shall not be construed to require the Buyer or the Agent to request or await receipt of information or documentation not immediately available from or with respect to the Seller, a servicer of the Purchased Loans, any other Person or the Purchased Loans themselves.
With respect to any Transaction, the Buyer and the Agent may conclusively rely upon, and shall incur no liability to the Seller in acting upon, any request or other communication that the Buyer or the Agent reasonably believes to have been given or made by a person authorized to enter into a Transaction on the Seller’s behalf.
Section 2. No Commitment, Initiation of Transactions, Confirmation.
2.01 No Commitment.
(a) It is acknowledged and agreed that, notwithstanding any other provision of this Repurchase Agreement to the contrary, except with respect to the Committed Amount and solely with respect to Agency Mortgage Loans, the facility provided under this Repurchase Agreement is an uncommitted facility, and the Buyer shall have no obligation to enter into any Transactions hereunder in excess of the Committed Amount. Subject to the terms and conditions of the Repurchase Documents and provided that no Default or Event of Default shall have occurred and be continuing hereunder, the Buyer shall, with respect to Agency Mortgage Loans up to the Committed Amount, and may, with respect to the Uncommitted Amount, at the sole discretion of the Buyer or the Agent, from time to time as requested by the Seller, enter into Transactions with an aggregate Purchase Price for all Purchased Loans acquired by the Buyer not to exceed the lesser of (i) the Maximum Amount and (ii) the Margin Base as in effect from time to time (after giving effect to the purchase of such Eligible Mortgage Loans). The Buyer shall have the obligation, subject to the terms and conditions of the Repurchase Documents, to enter into Transactions up to the Committed Amount solely with respect to Agency Mortgage Loans, and shall have no obligation to enter into Transactions with respect to the Uncommitted Amount or with respect to Prime Jumbo Mortgage Loans or Non-QM Mortgage Loans, which Transactions shall be entered into in the sole discretion of Buyer. All purchases of Mortgage Loans hereunder, including with respect to Prime Jumbo Mortgage Loans and Non-QM Mortgage Loans, shall be first deemed committed up to the Committed Amount and then the remainder, if any, shall be deemed uncommitted up to the Uncommitted Amount.
(b) A Confirmation (including all schedules related thereto), together with this Repurchase Agreement, may, at the option of Buyer, be executed by Buyer and Seller and if so executed shall constitute conclusive evidence of the terms agreed between the Seller and the Buyer (or the Agent on behalf of the Buyer) with respect to the Transaction to which such Confirmation relates, and the Seller’s acceptance of the related proceeds of a Transaction shall constitute Seller’s agreement to the terms of such Confirmation. It is the intention of the parties that each Confirmation shall not be separate from this Repurchase Agreement but shall be made a part hereof. In the event of any conflict between this Repurchase Agreement and a Confirmation, the
terms of this Repurchase Agreement shall control with respect to the related Transaction. A Confirmation, and any terms and conditions therein, shall be applicable solely with respect to the related Transaction and shall not constitute a course of dealing between the Seller and the Buyer.
2.02 Transaction Request Procedure (Transactions other than Wet-Ink Transactions).
(a) The Seller may request a Transaction hereunder, which request shall be submitted electronically through Buyer’s FTP site, on any Business Day during the period from and including the Effective Date to and including the Termination Date by delivering to the Agent, with a copy to the Custodian, a Transaction Request, which Transaction Request must be received by the Agent no later than [***], New York City time, on the Business Day of the requested Purchase Date. Such Transaction Request shall (i) attach a schedule identifying the Eligible Mortgage Loans that the Seller proposes to sell to the Buyer hereunder in connection with such Transaction, (ii) specify the requested Purchase Date, and (iii) include (unless the same has been submitted previously) a Mortgage Loan Data File containing information with respect to the Eligible Mortgage Loans that the Seller proposes to sell to the Buyer hereunder in connection with such Transaction.
(b) Upon receipt from the Seller of a Transaction Request pursuant to Section 2.02(a), upon satisfaction of all applicable conditions precedent set forth in Sections 5.01 and 5.02 hereof and provided that no Default or Event of Default shall have occurred and be continuing, the Buyer may, with respect to the Uncommitted Amount and shall, with respect to the Committed Amount, enter into such Transaction with the Seller. In the event that the Buyer (or the Agent on behalf of the Buyer) determines, in its sole discretion with respect to the Uncommitted Amount, to enter into a Transaction, the Buyer (or the Agent) shall specify the terms for such proposed Transaction, including the Purchase Price for the applicable Eligible Mortgage Loans, the Pricing Rate for the Transaction, the Market Value for the applicable Eligible Mortgage Loans, the Repurchase Date in respect of such Transaction and any additional terms or conditions of the Transaction, in a Confirmation to be delivered to the Seller on or prior to the applicable Purchase Date.
(c) The Seller shall deliver to the Custodian, in accordance with the terms and conditions of the Custodial and Disbursement Agreement, the Mortgage File pertaining to each Eligible Mortgage Loan to be sold to the Buyer hereunder on the requested Purchase Date.
(d) [Reserved].
(e) Subject to Section 5 hereof and provided that no Default or Event of Default shall have occurred and be continuing, and the Buyer determines, with respect to the Uncommitted Amount, in its sole discretion to enter into a Transaction, such Transaction will then be entered into by the Buyer on the terms set forth in the Transaction Request or as otherwise agreed by Buyer and Seller, which agreement may be set forth in a Confirmation, transferring, via wire transfer, to the account specified by Seller on a Transaction Request, an amount equal to the aggregate Purchase Price for such Transaction in funds immediately available to the Seller, less any amount retained by the Buyer to cure an outstanding Margin Deficiency.
2.03 Transaction Request Procedure (Wet-Ink Transactions).
(a) Seller may request a Wet-Ink Transaction hereunder, which request shall be submitted electronically through Buyer’s FTP site, on any Business Day during the period from and including the Effective Date to and excluding the Termination Date.
(b) On the requested Purchase Date for a Wet-Ink Transaction, the Seller may deliver to the Agent with a copy to the Custodian, no more than [***] transmissions, which transmissions shall (i) attach a Transaction Request, (ii) attach a schedule identifying the Eligible Mortgage Loans that the Seller proposes to sell to the Buyer hereunder in connection with such Transaction, and (iii) be accompanied by a Mortgage Loan Data File from the Custodian, pursuant to the Custodial and Disbursement Agreement, in respect of all Wet-Ink Mortgage Loans sold to the Buyer on such Purchase Date. The latest transmission must be received by the Agent no later than [***] New York City time, on such Purchase Date. Such Transaction Request shall specify the requested Purchase Date.
(c) The Seller shall deliver (or cause to be delivered) and release to the Custodian the Mortgage File pertaining to such Wet-Ink Mortgage Loan on the next Business Day following receipt of such Mortgage File by the Seller, but in any event no later than [***] Business Days following the applicable Origination Date in accordance with the terms and conditions of the Custodial and Disbursement Agreement. On the applicable Purchase Date and on each Business Day following the applicable Purchase Date, no later than [***], New York City time, pursuant to the Custodial and Disbursement Agreement, the Custodian shall deliver to the Agent a schedule listing each Wet-Ink Mortgage Loan with respect to which the complete Mortgage File has not been received by the Custodian (the “Wet-Aged Report”). The Agent may confirm that the information in the Wet-Aged Report is consistent with the information provided to the Agent pursuant to Section 2.03(b).
(d) Upon the Seller’s request for a Transaction pursuant to Section 2.03(a), and upon satisfaction of all conditions precedent set forth in Sections 5.01 and 5.02 hereof, and provided that no Default or Event of Default shall have occurred and be continuing, the Buyer may, with respect to the Uncommitted Amount and shall, with respect to the Committed Amount, enter into a Transaction with the Seller on the requested Purchase Date, in the amount so requested.
(e) Subject to Section 5 hereof, such Purchase Price will then be made available by the Custodian transferring at the direction of the Buyer (or the Agent on behalf of the Buyer), via wire transfer, the amount of such Purchase Price from the account of the Buyer maintained with the Custodian to the account of the designated Closing Agent pursuant to disbursement instructions provided by the Seller on the electronic system maintained by the Custodian; provided, however, that (i) the Buyer (or the Agent on behalf of the Buyer) has been provided such disbursement instructions and shall not have rejected, in its sole discretion, any wiring location, (ii) the Custodian shall not, in any event, (A) transfer funds to the Seller or any Affiliate of the Seller or (B) transfer funds in excess of the original principal balance of the related Wet-Ink Mortgage Loan. Upon notice from the Closing Agent to the Seller that the related Wet-Ink Mortgage Loan was not originated, the Wet-Ink Mortgage Loan shall be removed from the list of Eligible Mortgage Loans and the Closing Agent shall immediately return the funds via wire transfer to the account of the Buyer maintained with the Custodian. The Seller shall notify the
Agent if a Wet-Ink Mortgage Loan was not originated and has been removed from the list of Eligible Mortgage Loans.
2.04 [Reserved.]
2.05 Repurchase and Repurchase Price. The Seller hereby promises to pay in full on the Termination Date the aggregate Repurchase Price of all Transactions then outstanding. In addition, as of any date of determination, to the extent that the Purchase Price of all Transactions then outstanding exceeds the Maximum Amount, then the Seller shall either remit an amount to the Buyer equal to such excess in accordance with Section 3 hereof or repurchase the Purchased Items in an amount equal to such excess. Such obligation to make a payment or repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Loan or liquidation with respect to any Mortgage Loan; provided, that any liquidation proceeds received by the Buyer shall be applied to reduce the Purchase Price for the Mortgage Loans on the date received by the Buyer except as otherwise provided herein.
(a) The Seller hereby promises to pay in full on the Termination Date the aggregate Repurchase Price of all Transactions then outstanding. In addition, the Seller shall repurchase the related Purchased Loans from Buyer on each related Repurchase Date. Each obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Loan. The Seller is obligated to obtain the related Purchased Loans from the Buyer or its designee (including Custodian) at Seller’s expense on (or after) the related Repurchase Date.
(b) The Seller hereby promises to pay to the Buyer, Price Differential on the unpaid Repurchase Price of each Transaction on a monthly basis pursuant to Section 3.01 at a rate per annum equal to the Pricing Rate; provided, that in no event shall such rate per annum exceed the maximum rate permitted by law. Notwithstanding the foregoing, the Seller hereby promises to pay to the Buyer, interest at the applicable Post-Default Rate on any Repurchase Price (without duplication of any application Post-Default Rate under the definition of “Price Differential”) and on any other amount payable by the Seller hereunder that shall not be paid in full when due (whether at stated maturity, by acceleration or by mandatory prepayment or otherwise) for the period from and including the due date thereof to but excluding the date the same is paid in full. Notwithstanding anything to the contrary herein, costs and expenses of the Buyer incurred for on-site due diligence of the Seller and fees and expenses of the Buyer’s outside counsel, in each case, incurred but not paid prior the occurrence of an Event of Default, shall not accrue interest at the Post-Default Rate. Accrued Price Differential on each Transaction shall be payable monthly on or before the Payment Date each month and for the last month of the Repurchase Agreement on the Payment Date of such last month and on the Termination Date; provided, that the Buyer may, in its sole discretion, require accrued Price Differential to be paid simultaneously with any prepayment of Repurchase Price that is made by the Seller on a day other than the Termination Date, including any Early Repurchase Date. Interest payable at the Post-Default Rate shall accrue daily and shall be payable upon such accrual. Promptly after the determination of any interest rate provided for herein or any change therein, the Buyer (or the Agent on behalf of the Buyer) shall give notice thereof to the Seller.
(c) It is understood and agreed that, unless and until a Default or Event of Default shall have occurred and be continuing, the Seller shall be entitled to the proceeds of the Purchased Loans subject to Transactions outstanding hereunder subject to the terms and provisions of this Repurchase Agreement.
(d) With respect to each Purchased Loan subject to a Takeout Commitment, the Seller shall instruct the related Takeout Investor to remit directly to the Buyer no later than [***], New York City time, on a Business Day all Takeout Proceeds in an amount equal to the Repurchase Price for such Purchased Loan. Simultaneously, the Seller shall deliver to the Buyer via facsimile or electronic mail a purchase advice (the “Purchase Advice”) and shall indicate on such Purchase Advice the Mortgage Loan identification number which identified the applicable Eligible Mortgage Loan when it was purchased by the Buyer hereunder. A portion of the Takeout Proceeds in an amount equal to the Recognized Value of such Purchased Loan shall be applied to the Repurchase Price of the outstanding Transactions. Upon receipt by the Buyer of payment of the Repurchase Price in respect of such Purchased Loan, the Buyer shall release and remit to the Seller the amount of any Takeout Proceeds in excess of the Recognized Value of such Purchased Loans (the “Remittance Amount”); 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 Repurchase Agreement or any other Repurchase Document and (ii) there is no Margin Deficiency. To the extent that a Margin Deficiency exists or would be created by the release of the Remittance Amount or a Default or an Event of Default has occurred and is continuing, the Buyer shall be entitled to retain the Remittance Amount, and the Seller thereupon shall have no further rights, title, or interest in and to such Remittance Amount. In the event that the Purchase Advice indicates that some of the proceeds forwarded to the Buyer do not belong to the Buyer or the Seller (such amount, the “Excess Proceeds”), then (i) the Seller shall provide the Buyer with a Takeout Proceeds Identification Letter, and (ii) upon confirmation by the Buyer that the information set forth in the Purchase Advice matches the information that the Buyer has in its possession with respect to the Purchased Loans, the Buyer shall promptly remit by wire transfer the Excess Proceeds in accordance with the Seller’s instructions. If funds are received after [***], New York City time on a Business Day, but either (A) no Purchase Advice is received or (B) such funds are not properly identified on the related Purchase Advice (a “Purchase Advice Deficiency”), then such funds shall be retained by the Buyer, and the Transactions made in respect of the related Purchased Loans shall continue to accrue Price Differential under this Repurchase Agreement, until such Purchase Advice Deficiency is remedied, and the Mortgage Loan subject to such Purchase Advice shall not be released until such Purchase Advice Deficiency is remedied. In no event shall such Purchase Advice be back-dated to the date of its issuance. The Buyer shall not be liable to the Seller or any other Person to the extent that the Buyer follows instructions given to it by the Seller in a Takeout Proceeds Identification Letter
(e) In addition, the Seller may repurchase any related Purchased Loan on any date (the date of such repurchase, an “Early Repurchase Date”) without any penalty or premium to the extent there is no Default (unless such Default is solely caused by either (i) a Purchased Loan no longer being an Eligible Mortgage Loan or (ii) a Margin Deficiency, and such Default would no longer exists after such repurchase) or Event of Default that has not been waived by Buyer. If Seller intends to effect a repurchase or a partial repurchase, Seller shall give at least [***] prior written notice to the Buyer, designating the Purchased Loans to be repurchased. If such notice is given, the amount specified in such notice shall be due and payable
on the date specified therein, and, on receipt, such amount shall be applied to the Repurchase Price for the designated Purchased Loans and the Buyer shall release its ownership interest hereunder in the Purchased Loans and shall authorize the related Custodian to release any related Mortgage File to Seller pursuant to the related Custodial and Disbursement Agreement as provided in Section 2.05(c).
(f) On the Repurchase Date, termination of such Transaction will be effected by reassignment to the applicable Seller or its designee of the related Purchased Loans and any Income in respect thereof received by the Buyer not previously credited or transferred to, or applied to the obligations of, the Seller pursuant to Section 3.01 against the simultaneous transfer of the Repurchase Price for such Transaction an account of the Buyer in each case without any further action by the Buyer or any other Person and such Purchased Loan shall be transferred to Seller free and clear of any liens, pledges or encumbrances. Upon receipt of the Repurchase Price for such Purchased Loan, Buyer shall authorize the applicable Custodian to release any related Mortgage File to such Seller pursuant to the related Custodial and Disbursement Agreement.
(g) Any such transfer or release shall be without recourse to the Buyer and without representation or warranty by the Buyer, except that the Buyer shall represent to the Seller, to the extent that good title was transferred and assigned by Seller to the Buyer hereunder on the related Purchase Date, that Buyer is the sole owner of such Purchased Loan, free and clear of any other interests or Liens caused by the Buyer’s actions. Prior to an Event of Default that is continuing, any Income with respect to such repurchased Purchased Loan received by the Buyer after receipt of the Repurchase Price in full therefor shall be remitted to the Seller. Buyer shall reasonably cooperate with respect to sales of the related Purchased Loans by Seller to third party purchasers, including, without limitation, acceptance of wire transfers of the Repurchase Price related thereto through escrow arrangements acceptable to the Buyer.
2.06 Conversion of Applicable Interest Rates.
(a) Applicable Index. The Applicable Index shall initially be LIBOR.
(b) Index Transition Event. Upon the Buyer’s determination that an Index Transition Event has occurred:
(i) the Buyer shall, within three (3) Business Days of such occurrence, provide an Index Transition Notice;
(ii) the Applicable Index shall transition, on and after the Index Transition Date, to a Replacement Index identified in accordance with the definition thereof and the provisions hereof; and
(iii) the Rate Adjustment shall transition in accordance with the definition thereof.
(c) Conforming Changes. In connection with the implementation of an Index Transition, the Buyer shall have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Repurchase Document, any
amendments implementing such Conforming Changes shall become effective without any further action or consent.
2.07 Margin Maintenance.
(a) The Buyer shall have the right to determine and re-determine the Market Value of any of the Purchased Loans on a daily basis in its sole discretion, which determination shall be conclusive and may affect the Recognized Value of such Purchased Loans,
(b) If, at any time, the aggregate Purchase Price of all Transactions then outstanding hereunder exceeds the aggregate Recognized Value of all Purchased Loans subject to such Transactions as of such date (a “Margin Deficiency”), as determined by the Buyer (or the Agent on behalf of the Buyer) in its sole discretion and as to which the Buyer (or the Agent) notifies the Seller on any Business Day, and such Margin Deficiency exceeds the Margin Threshold, the Seller shall no later than one (1) Business Day after receipt of such notice, either make a payment in cash or Cash Equivalents to the Buyer, in respect of the aggregate Purchase Price or at the Seller’s option, but with the Buyer’s written consent, to transfer to the Buyer additional Eligible Mortgage Loans that are in all respects acceptable to the Buyer in its sole discretion (which additional Eligible Mortgage Loans shall be deemed to be Purchased Loans subject to the then existing Transaction under the Repurchase Documents) such that after giving effect to such payment or transfer no Margin Deficiency shall then exist.
(c) If at any time the aggregate Purchase Price of all Transactions then outstanding hereunder exceeds the Maximum Amount then in effect, the Seller shall at such time make a payment to the Buyer, in respect of the aggregate Repurchase Price such that, after giving effect to such payment, the aggregate Repurchase Price of all Transactions then outstanding hereunder shall not exceed the Maximum Amount then in effect.
Section 3. Payments; Requirements of Law; Commitment Fee, Non-Utilization Fee, Etc.
3.01 Payments.
(a) The Seller promises to pay to the Buyer on or before each Payment Date, the Price Differential on the unpaid Repurchase Price of all outstanding Transactions for the prior calendar month or, if the Purchase Date for any such Transactions occurred on any day during the prior calendar month, from the applicable Purchase Date for such Transactions through the last day of such calendar month, at a rate per annum equal to the Pricing Rate until the date on which the Repurchase Price is paid in full; provided, that in no event shall such rate per annum exceed the maximum rate permitted by law. Notwithstanding the foregoing, the Seller shall pay to the Buyer, interest at the applicable Post-Default Rate on any Repurchase Price, any Price Differential (without duplication of any application of the Post-Default Rate under the definition of “Price Differential”), and on any other amount payable by the Seller hereunder that shall not be paid in full when due (whether at stated maturity, by acceleration or by mandatory prepayment or otherwise) for the period from and including the due date thereof to but excluding the date the same is paid in full. Notwithstanding anything to the contrary herein, costs and expenses of the Buyer incurred for on-site due diligence of the Seller and fees and expenses of the Buyer’s outside
counsel, in each case, incurred but not paid prior the occurrence of an Event of Default, shall not accrue interest at the Post-Default Rate. The Buyer shall provide an invoice to the Seller on a monthly basis by no later than [***] Business Days prior to the related Payment Date setting forth the accrued and unpaid Price Differential in immediately available funds for the related period and any other amounts then due and owing under this Agreement (collectively the “Early Monthly Payment Amount”); provided, that the failure of the Buyer to provide any such invoice by such time shall not limit the Seller’s Repurchase Obligations or obligation to make a timely payment on the related Payment Date in any way; provided, further, that the Buyer may, in its sole discretion, require accrued Price Differential to be paid simultaneously with any prepayment of Repurchase Price that is made by the Seller on a day other than the Termination Date, including on any Early Repurchase Date. Seller shall pay to the Buyer each Early Monthly Payment Amount on or before 3:00 p.m. New York City time on the related Payment Date. Interest payable at the Post-Default Rate shall accrue daily and shall be payable upon such accrual. Promptly after the determination of any interest rate provided for herein or any change therein, the Buyer (or the Agent) shall give notice thereof to the Seller.
(b) Within thirty (30) days following the Effective Date (or such later date as approved by the Buyer in writing), Seller shall establish and maintain a segregated time or demand deposit account for the benefit of the Buyer (the “Blocked Account”) with the Buyer or an Insured Depository Institution acceptable to the Buyer in its reasonable discretion, with respect to which Merchants Bank of Indiana and TIAA, FSB shall each be deemed acceptable. The Blocked Account shall be named “Home Point Financial Corporation in trust for the benefit of Morgan Stanley Bank, N.A.” and such account shall be subject to the Blocked Account Agreement. Upon the occurrence of an Event of Default that is continuing, the Seller shall deposit into the Blocked Account, within two (2) Business Days of receipt, all Income received with respect to each Mortgage Loan hereunder. Under no circumstances shall the Seller deposit any of its own funds into the Blocked Account or otherwise comingle its own funds into the Blocked Account.
(c) Notwithstanding any provision to the contrary in this Section 3.01, if an Event of Default shall have occurred and be continuing, all Income on deposit in the Blocked Account in respect of the Purchased Items shall be applied as determined in the Buyer’s sole discretion until all such Repurchase Obligations have been paid in full, and thereafter to the Seller.
(d) Except to the extent otherwise provided herein, all payments of Repurchase Price, Price Differential, and other amounts to be paid by the Seller under this Repurchase Agreement, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Agent, at the following account maintained by the Agent: [***] not later than [***] New York City time, on the date on which such payment shall become due (and each such payment made after such time on such due date shall be deemed to have been made on the next succeeding Business Day). The Seller acknowledges that it has no rights of withdrawal from the foregoing account.
(e) Except to the extent otherwise expressly provided herein, if the due date of any payment under this Repurchase Agreement would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and Price Differential shall
accrue with respect to the amount of any Purchase Price so extended for the period of such extension.
3.02 Requirements of Law.
(a) If the introduction or adoption of or any change in any Requirement of Law (other than with respect to any amendment made to the Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) or any change in the interpretation or application thereof or compliance by the Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject the Buyer and the Agent (or the Buyer or the Agent, as the case may be) to any Tax of any kind whatsoever with respect to this Repurchase Agreement or any Transaction entered into by it (excluding Indemnified Taxes, Other Connection Taxes that are imposed on or measured by net income (however determined) or that are franchise Taxes or branch profits Taxes, and clauses (b)-(d) of Excluded Taxes);
(ii) shall impose, modify or hold applicable to any Transaction any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans, Transactions or other extensions of credit by, or any other acquisition of funds by, any office of the Buyer and the Agent (or the Buyer or the Agent, as the case may be) which is not otherwise included in the determination of LIBOR hereunder;
(iii) shall impose on the Buyer and the Agent (or the Buyer or the Agent, as the case may be) any other condition;
and the result of any of the foregoing is to increase the cost to the Buyer and the Agent (or the Buyer or the Agent, as the case may be), by an amount which the Buyer and the Agent (or the Buyer or the Agent, as the case may be) deem to be material, of making, participating in, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, to the extent similar increased costs have been imposed by the Buyer or the Agent on similarly situated sellers, in any such case, the Seller shall promptly pay the Buyer and the Agent (or the Buyer or the Agent, as the case may be) such additional amount or amounts as will compensate the Buyer and the Agent (or the Buyer or the Agent, as the case may be) for such increased cost or reduced amount receivable, and thereafter, the Seller may elect to terminate the Repurchase Agreement in order to not incur additional increased costs.
(b) If the Buyer and the Agent (or the Buyer or the Agent, as the case may be) shall have determined that the adoption of or any change in any Requirement of Law applicable to the Buyer and the Agent (or the Buyer or the Agent, as the case may be)(other than with respect to any amendment made to the Buyer’s or the Agent’s certificate of incorporation and by-laws or other organizational or governing documents) regarding capital adequacy or in the interpretation or application thereof or compliance by the Buyer and the Agent (or the Buyer or the Agent, as the case may be) or any corporation controlling the Buyer and the Agent (or the Buyer or the Agent, as the case may be) with any request or directive regarding capital adequacy (whether or not having
the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on the Buyer’s or the Agent’s, as applicable, or such corporation’s capital as a consequence of its actions hereunder to a level below that which the Buyer and the Agent (or the Buyer or the Agent, as the case may be) or such corporation could have achieved but for such adoption, change or compliance (taking into consideration the Buyer’s or the Agent’s, as applicable, or such corporation’s policies with respect to capital adequacy) by an amount deemed by the Buyer and the Agent (or the Buyer or the Agent, as the case may be) to be material, then from time to time, to the extent similar increased costs have been imposed by the Buyer or the Agent on similarly situated sellers, the Seller shall promptly pay to the Buyer and the Agent (or the Buyer or the Agent, as the case may be) such additional amount or amounts as will compensate the Buyer and the Agent (or the Buyer or the Agent, as the case may be) for such reduction, and thereafter, the Seller may elect to terminate the Repurchase Agreement in order to not incur additional increased costs.
(c) If the Buyer and the Agent (or the Buyer or the Agent, as the case may be) become entitled to claim any additional amounts pursuant to this Section 3.02, it shall promptly notify the Seller of the event by reason of which it has become so entitled; provided that Seller shall only be obligated to pay those amounts pursuant to this Section 3.02 to the extent incurred by Buyer or Agent during the 90-day period prior to Seller’s receipt of written notice thereof. A certificate as to any additional amounts payable pursuant to this Section 3.02 submitted by the Buyer or the Agent, as applicable, to the Seller shall be conclusive in the absence of manifest error.
3.03 Commitment Fee.
The Seller agrees to pay the Commitment Fee to the Buyer, such payment to be made in Dollars in immediately available funds, without deduction, set off or counterclaim, to Buyer as provided in the Pricing Side Letter. The Seller also hereby agrees to pay to the Buyer any other fees provided in the Pricing Side Letter as specified therein. Each of such fees shall be deemed to be fully earned and non-refundable when paid; provided, that notwithstanding the foregoing or anything else to the contrary here, to the extent that the Buyer elects not to enter into any Transaction in respect of the Committed Amount solely due to the occurrence of one of the events described in Section 5.02(k), Section 5.02(p) or Section 8(p) the Buyer shall promptly refund to the Seller a pro-rated portion of the Committed Amount for the period from the date of such election through the Termination Date.
3.04 Non-Utilization Fee.
On the Payment Date occurring in September 2020, and on each third Payment Date thereafter and on the Termination Date, the Buyer shall determine the Aggregate Utilization Ratio for the related Accrual Period and, if such Aggregate Utilization ratio is less than [***] the Seller shall promptly pay to the Buyer following Seller’s receipt of an invoice therefor on such Payment Date or Termination Date, as applicable, a fee (the “Non-Utilization Fee”) equal to the difference, if greater than $0, between (i) the Minimum Price Differential for the related Accrual Period and (ii) the actual Price Differential paid by the Seller to the Buyer for the related Accrual Period. All such payments shall be made to the Buyer in Dollars, in immediately available funds, without deduction, setoff or counterclaim. Solely to the extent that the Non-Utilization Fee remains unpaid for [***] Business Days following the related due date therefor, the Buyer may,
in its sole discretion, net such Non-Utilization Fee from the proceeds of any Purchase Price paid to the Seller. Notwithstanding the foregoing or anything else to the contrary here, to the extent that the Buyer elects not to enter into any Transaction solely due to the occurrence of one of the events described in Section 5.02(k), Section 5.02(p) or Section 8(p), no Non-Utilization Fee shall accrue from the date of such election through the earlier of (i) the Termination Date or (ii) the first date after such election when the Seller enters into a new Transaction.
Section 4. Purchased Items.
4.01 Purchased Items; Security Interest.
(a) Pursuant to the Custodial and Disbursement Agreement, the Custodian shall hold the Mortgage Loan Documents as exclusive bailee and agent for the benefit of the Buyer pursuant to terms of the Custodial and Disbursement Agreement and shall deliver to the Buyer the Master Trust Receipt to the effect that it has reviewed such Mortgage Loan Documents in the manner and to the extent required by the Custodial and Disbursement Agreement and identifying any deficiencies in such Mortgage Loan Documents as so reviewed.
(b) All of the Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, is hereinafter referred to as the “Purchased Items.”
(i) all Purchased Loans (including, without limitation, the related Servicing Rights);
(ii) all Mortgage Loan Documents, including without limitation all promissory notes, and all Servicing Records, any Servicing Agreements and any other collateral pledged or otherwise solely relating to such Purchased Loans, together with all files, documents, instruments, surveys, certificates, correspondence, appraisals, computer programs, computer storage media, accounting records and other books and records relating thereto, including electronic records;
(iii) all rights of Seller to receive from any third party or to take delivery of any Servicing Records or other documents which constitute a part of the Mortgage File related to such Purchased Loans or Servicing File, all rights of Seller to receive from any third party or to take delivery of any Records or other documents which constitute a part of the Mortgage File related to such Purchased Loans;
(iv) to the extent assignable, all mortgage guaranties and insurance (issued by governmental agencies or otherwise) and any mortgage insurance certificate or other document evidencing such mortgage guaranties or insurance relating to any Purchased Loan and all claims and payments thereunder;
(v) to the extent assignable, all other insurance policies and insurance proceeds relating to any Purchased Loan or the related Mortgaged Property;
(vi) to the extent assignable, all purchase agreements or other agreements, contracts (and all rights to receive documentation relating thereto) or any related
Takeout Commitments now existing or hereafter arising, solely covering any part of the foregoing Purchased Items, all rights to deliver such Mortgage Loans to Takeout Investors or to permanent investors and other purchasers pursuant thereto and all proceeds resulting from the disposition of such Purchased Items pursuant thereto, including the Seller’s right and entitlement to receive the entire Takeout Price specified in each Takeout Commitment;
(vii) [Reserved];
(viii) the Blocked Account and the Disbursement Account and all monies from time to time on deposit in the Blocked Account and the Disbursement Account;
(ix) [Reserved];
(x) [Reserved];
(xi) all “accounts,” “chattel paper,” “commercial tort claims,” “deposit accounts,” “documents,” “equipment,” “general intangibles,” “goods,” “instruments,” “inventory,” “investment property,” “letter of credit rights,” and “securities’ accounts” as each of those terms is defined in the Uniform Commercial Code and all cash and Cash Equivalents and all products and proceeds solely relating to any or all of the foregoing; and
(xii) any and all replacements, substitutions, distributions on or proceeds of to the extent solely related to any and all of the foregoing.
(c) The Seller and the Buyer intend that the Transactions hereunder be sales to the Buyer of the Purchased Items (including, without limitation, the related Servicing Rights) and not loans from the Buyer to the Seller secured by the Purchased Items. However, in order to preserve the Buyer’s rights under this Repurchase Agreement and the other Repurchase Documents in the event that a court or other forum recharacterizes the Transactions hereunder as loans, and as security for the performance by the Seller of all of the Seller’s obligations to the Buyer under the Repurchase Documents and the Transactions entered into hereunder, the Seller hereby assigns, pledges and grants a fully perfected, first priority security interest in all of its right, title and interest in, to and under the Purchased Items to the Buyer, to secure the payment of the Repurchase Price on all Transactions and all other amounts owing to the Buyer hereunder and under the other Repurchase Documents (collectively, and together with the pledge of Servicing Rights in the immediately preceding sentence, the “Related Credit Enhancement”). The Related Credit Enhancement is hereby pledged as further security for Seller’s Repurchase Obligations to Buyer hereunder. The Seller agrees to mark its computer records and tapes to evidence the interests granted to the Buyer hereunder. For the avoidance of doubt, it is acknowledged and agreed by the Seller that the grant of a security interest by the Seller to the Buyer in any Purchased Loan shall not be released or otherwise affected solely due to the fact that any Purchased Loan is not an Eligible Mortgage Loan or that the Recognized Value thereof is zero dollars or is reduced, including if it is reduced to zero dollars, at any time.
(d) Without limiting the generality of the foregoing clauses (b) and (c) and for the avoidance of doubt, in the event that the Seller deemed to retain any residual Servicing Rights, such Seller Entity, as applicable, grants, assigns, and pledges to the Buyer a security interest in such Servicing Rights and proceeds related thereto in all instances, whether now owned or
hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Repurchase Agreement and Transactions hereunder as defined in Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
4.02 Further Documentation. At any time and from time to time, upon the written request of the Buyer (or the Agent on behalf of the Buyer), and at the sole expense of the Seller, the Seller will promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents and take such further action as the Buyer (or the Agent on behalf of the Buyer) may reasonably request for the purpose of obtaining or preserving the full benefits of this Repurchase Agreement and of the rights and powers herein granted, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the Liens created hereby. The Seller also hereby authorizes the Buyer to file any such financing or continuation statement without the signature of the Seller to the extent permitted by applicable law. A photographic or other reproduction of this Repurchase Agreement shall be sufficient as a financing statement for filing in any jurisdiction.
4.03 Changes in Locations, Name, etc. The Seller shall not (i) change the location of its chief executive office/chief place of business or mailing address from that specified in Section 6 hereof, (ii) change its name, identity or corporate structure (or the equivalent) or change the location where it maintains its records with respect to the Purchased Items or (iii) reincorporate or reorganize under the laws of another jurisdiction unless it shall have given the Buyer at least thirty (30) days prior written notice thereof and shall have delivered to the Buyer all Uniform Commercial Code financing statements and amendments thereto as the Buyer shall reasonably request and taken all other actions deemed reasonably necessary by the Buyer to continue its perfected status in the Purchased Items with the same or better priority. The Seller shall promptly notify the Buyer of any change in such federal tax identification number.
4.04 The Buyer’s Appointment as Attorney-in-Fact.
(a) The Seller hereby irrevocably constitutes and appoints the Buyer and any officer or agent thereof, following the occurrence of an Event of Default that has not been waived 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 the Seller and in the name of the Seller or in its own name, from time to time in the Buyer’s discretion, for the purpose of carrying out the terms of this Repurchase Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Repurchase Agreement, and, without limiting the generality of the foregoing, the Seller hereby gives the Buyer the power and right, on behalf of the Seller, without assent by, but with notice to, the Seller, if an Event of Default shall have occurred and be continuing, to do the following:
(i) in the name of the Seller or 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 under any mortgage insurance or payable on or on account of any other Purchased Items and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Buyer for the purpose of collecting any
and all such moneys due under any such mortgage insurance or with respect to any other Purchased Items whenever payable;
(ii) to pay or discharge Taxes and Liens levied or placed on or threatened against the Purchased Items; and
(iii) (A) to direct any party liable for any payment under any Purchased Items to make payment of any and all moneys due or to become due thereunder directly to the Buyer or as the Buyer shall direct, including, without limitation, to send “goodbye” letters and Section 404 notices on behalf of the Seller and any applicable Servicer; (B) 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 Items; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any of the Purchased Items; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Purchased Items or any portion thereof or proceeds thereof and to enforce any other right in respect of any Purchased Items; (E) to defend any suit, action or proceeding brought against the Seller with respect to any Purchased Items; (F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Buyer may deem appropriate; and (G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Purchased Items as fully and completely as though the Buyer were the absolute owner thereof for all purposes, and to do, at the Buyer’s option and the Seller’s expense, at any time, and from time to time, all acts and things which the Buyer deems necessary to protect, preserve or realize upon the Purchased Items and the Buyer’s Liens thereon and to effect the intent of this Repurchase Agreement, all as fully and effectively as the Seller might do.
The 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, shall have no expiration date and shall survive termination of this Repurchase Agreement. This power of attorney shall not revoke any prior powers of attorney granted by the Seller.
(b) The Seller also authorizes the Buyer, at any time and from time to time, following the occurrence of an Event of Default that has not been waived (i) to execute, in connection with any sale provided for in Section 4.07 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Purchased Items and (ii) to file any initial financing statements, amendments thereto and continuation statements with or without the signature of the Seller as authorized by applicable law, as applicable to all or any part of the Purchased Items.
(c) The powers conferred on the Buyer are solely to protect the interests of the Buyer in the Purchased Items and shall not impose any duty upon the Buyer to exercise any such powers. The Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Buyer nor any of its officers, directors, employees or agents shall be responsible to the Seller for any act or failure to act hereunder, except for its own gross negligence or willful misconduct.
4.05 Performance by The Buyer of The Seller’s Repurchase Obligations. If after the occurrence of an Event of Default that has not been waived, the Seller fails to perform or comply with any of its agreements contained in the Repurchase Documents and the Buyer itself performs or complies, or otherwise causes performance or compliance, with such agreement, the out-of-pocket expenses of the Buyer incurred in connection with such performance or compliance, together with interest thereon at a rate per annum equal to the Post-Default Rate, shall be payable by the Seller to the Buyer upon five (5) days’ notice that such amounts are due and payable, unless an Event of Default shall have occurred and is continuing, in which case such amounts shall be due and payable on demand and, in either case, shall constitute Repurchase Obligations. Notwithstanding the foregoing, costs and expenses of the Buyer incurred for on-site due diligence of the Seller and fees and expenses of the Buyer’s outside counsel, in each case, incurred but not paid prior the occurrence of an Event of Default, shall not accrue interest at the Post-Default Rate.
4.06 Proceeds. If an Event of Default shall occur and be continuing, (a) all Income and other proceeds of Purchased Items received by the Seller consisting of cash, checks and other near-cash items shall be held by the Seller in trust for the Buyer, segregated from other funds of the Seller, and shall forthwith upon receipt by the Seller be turned over to the Buyer in the exact form received by the Seller (duly endorsed by the Seller to the Buyer, if required) and (b) any and all such proceeds received by the Buyer (whether from the Seller or otherwise) may, in the sole discretion of the Buyer, be held by the Buyer as collateral security for, and/or then or at any time thereafter may be applied by the Buyer against, the Repurchase Obligations (whether matured or unmatured), such application to be in such order as the Buyer shall elect. Any balance of such proceeds remaining after the Repurchase Obligations shall have been paid in full and this Repurchase Agreement shall have been terminated shall be paid over to the Seller or to whomsoever may be lawfully entitled to receive the same. For purposes hereof, proceeds shall include, but not be limited to, all principal and interest payments, all prepayments and payoffs, insurance claims, condemnation awards, sale proceeds, real estate owned rents and any other income and all other amounts received with respect to the Purchased Items.
4.07 Remedies. If a Default shall occur and be continuing, the Buyer may, at its option, enter into one or more interest rate protection agreements or other hedging arrangements covering all or a portion of the Purchased Loans purchased by the Buyer hereunder, and the Seller shall be responsible for all damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against the Buyer relating to or arising out of such Interest Rate Protection Agreements, including without limitation any net losses (after giving effect to any gain in the sale of the related Mortgage Loans) resulting from such Interest Rate Protection Agreements. If an Event of Default shall occur and be continuing, the Buyer may exercise, in addition to all other rights and remedies granted to it in this Repurchase Agreement and in any other instrument or agreement securing, evidencing or relating to the Repurchase Obligations, all rights and remedies of a secured party under the Uniform Commercial Code. Without limiting the generality of the foregoing, the Buyer without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon the Seller or any other Person (each and all of which demands, presentments, protests, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Purchased Items, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Purchased Items or any part thereof (or contract to do any of the foregoing), in
one or more parcels or as an entirety at public or private sale or sales, at any exchange, broker’s board or office of the Buyer or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Buyer shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Purchased Items so sold, free of any right or equity of redemption in the Seller, which right or equity is hereby waived or released. The Seller further agrees, at the Buyer’s request, to assemble the Purchased Items and make them available to the Buyer at places which the Buyer shall reasonably select, whether at the Seller’s premises or elsewhere. The Buyer shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all costs and expenses of every kind incurred therein or incidental to the care or safekeeping of any of the Purchased Items or in any way relating to the Purchased Items or the rights of the Buyer hereunder, including without limitation attorneys’ fees and disbursements, to the payment in whole or in part of the Repurchase Obligations, in such order as the Buyer may elect, and only after such application and after the payment by the Buyer of any other amount required or permitted by any provision of law, including without limitation Sections 9-608(a) and 9-615(a) of the Uniform Commercial Code, need the Buyer account for the surplus, if any, to the Seller. To the extent permitted by applicable law, the Seller waives all claims, damages and demands the Seller may acquire against the Buyer arising out of the exercise by the Buyer of any of its rights hereunder, other than those claims, damages and demands arising from the gross negligence or willful misconduct of the Buyer. If any notice of a proposed sale or other disposition of Purchased Items shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) Business Days before such sale or other disposition. The Seller shall remain liable for any deficiency (plus accrued interest thereon at the Post-Default Rate) if the proceeds of any sale or other disposition of the Purchased Items are insufficient to pay the Repurchase Obligations and the fees and disbursements of any attorneys employed by the Buyer to collect such deficiency.
4.08 Limitation on Duties Regarding Preservation of Purchased Items. The Buyer’s duty with respect to the custody, safekeeping and physical preservation of the Purchased Items in its possession, under Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with it in the same manner as the Buyer deals with similar property for its own account. Subject to the immediately preceding sentence, neither the Buyer nor any of its respective directors, officers or employees shall be liable for failure to demand, collect or realize upon all or any part of the Purchased Items or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Purchased Items upon the request of the Seller or otherwise.
4.09 Powers Coupled with an Interest. All authorizations and agencies herein contained with respect to the Purchased Items are irrevocable and are powers coupled with an interest.
4.10 Release of Security Interest. Upon termination of this Repurchase Agreement and payment to the Buyer of all Repurchase Obligations and the performance of all obligations under the Transactions and the Repurchase Documents the Buyer shall be deemed to have been reconveyed all Purchased Items to the Seller and release its security interest in any remaining Purchased Items.
4.11 Cash Reporting. Upon the written request of the Buyer, the Seller shall provide, or cause to be provided, to the Buyer, a report of all cash and other collections activity with respect to each Purchased Loan and the amount of the Loan Loss Reserves maintained by the Seller. Such report shall be delivered to Buyer not later than three (3) Business Days following the Buyer’s written request therefor.
4.12 Taxes; Tax Treatment.
(a) All payments made by the Seller under this Repurchase Agreement shall be made free and clear of, and without deduction or withholding for or on account of any Taxes except as required by Applicable Law. If the Seller is required by Applicable Law to deduct or withhold any Taxes from or in respect of any amount payable hereunder, it shall: (1) make such deduction or withholding; (2) pay the amount so deducted or withheld to the appropriate Governmental Authority not later than the date when due; (3) deliver to the Buyer, promptly, original Tax receipts and other evidence satisfactory to the Buyer of the payment when due of the full amount of such Taxes; and (4) in the case of Indemnified Taxes as defined herein, pay to the Buyer such additional amounts as may be necessary so that the Buyer receives, free and clear of all Indemnified Taxes, a net amount equal to the amount it would have received under this Repurchase Agreement, as if no such deduction or withholding had been made. In addition, the Seller agrees to pay to the relevant Governmental Authority in accordance with Applicable Law any Other Taxes.
(b) The Seller agrees to indemnify and hold the Buyer harmless for the full amount of Indemnified Taxes (including additional amounts payable hereunder with respect thereto), and the full amount of Indemnified Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 4.12, and any liability (in each case, including penalties, interest, additions thereto and expenses) arising therefrom or with respect thereto, provided that the Buyer shall have provided the Seller with evidence, reasonably satisfactory to the Seller, of payment of Indemnified Taxes.
(c) Without prejudice to the survival or any other agreement of the Seller hereunder, the agreements, covenants and obligations of the Seller contained in this Section 4.12 shall survive the termination of this Repurchase Agreement. Nothing contained in this Section 4.12 shall require the Buyer to make available any of its Tax returns or other information that it deems to be confidential or proprietary or to incur additional costs or regulatory burdens that the Buyer considers in its good faith reasonable judgment to be material.
(d) Each party to this Repurchase Agreement acknowledges that it is its intent for purposes of U.S. federal, and relevant state and local income and franchise Taxes to treat each Transaction as indebtedness of the Seller that is secured by the Purchased Loans and that the Purchased Loans are owned by the Seller in the absence of an Event of Default or any event under Section 14.21 of this Repurchase Agreement which the Buyer determines to be inconsistent with such treatment. All parties to this Repurchase Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by Law.
(e) Buyer or any assignee in respect of a Transaction that is entitled to an exemption from or reduction of withholding Tax with respect to payments made, or deemed made, by Seller in respect of such Transaction shall deliver to the Seller, at the time or times reasonably
requested by the Seller, such properly completed and executed documentation reasonably requested by the Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Buyer or any assignee, if reasonably requested by the Seller, shall deliver such other documentation prescribed by Applicable Law or reasonably re-quested by the Seller as will enable the Seller to determine whether such Buyer or assignee is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Buyer’s or assignee’s reasonable judgment such completion, execution or submission would subject such Buyer or assignee to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Buyer or assignee.
Without limiting the generality of the foregoing, in the event that the Seller is a U.S. Person, if a payment made, or deemed made, to a Buyer or an assignee hereunder would be subject to U.S. federal withholding Tax imposed by FATCA if such Buyer or assignee 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 or assignee shall deliver to the Seller at the time or times prescribed by Law and at such time or times reasonably requested by the Seller such documentation prescribed by Applicable Law (including as prescribed by to determine that such Buyer or assignee has complied with such Buyer’s or assignee’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (1), “FATCA” shall include any amendments made to FATCA after the date of this Repurchase Agreement.
The Buyer and each assignee agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Seller in writing of its legal inability to do so.
(f) If the Buyer, in its sole 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 (including by the payment of additional amounts pursuant to this Section 4.12), it shall pay to the Seller an amount equal to such refund (but only to the extent of indemnity payments made under this Section 4.12 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of the Buyer and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). The Seller, upon the request of the Buyer, shall repay to the Buyer the amount paid over pursuant to this Section 14.12(f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that the Buyer is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 14.12(f), in no event will the Buyer be required to pay any amount to the Seller pursuant to this Section 14.12(f) the payment of which would place the Buyer in a less favorable net after-Tax position than the 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 or additional amounts with respect to such Tax had never been paid. This Section 14.12(f) shall not be construed to require Buyer to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Seller or any other Person.
Section 5. Conditions Precedent.
5.01 Conditions Precedent to Initial Transaction. The Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that the Buyer shall have received all of the following documents, each of which shall be satisfactory to the Buyer and its counsel in form and substance:
(a) Repurchase Documents. The Repurchase Documents (other than the Blocked Account Agreement, which shall be executed and delivered in accordance with Section 3.01(b)), duly executed and delivered by the parties thereto;
(b) Organizational Documents. An officer’s certificate of the Seller, together with good standing certificates dated as of a recent date, but in no event more than ten (10) days prior to the date hereof and certified copies of the charter and by-laws (or equivalent documents) of the Seller and of all corporate or other authority for the Seller with respect to the execution, delivery and performance of the Repurchase Documents and each other document to be delivered by the Seller from time to time in connection herewith (and the Buyer may conclusively rely on such certificate until it receives notice in writing from the Seller to the contrary);
(c) Legal Opinion. Opinions of outside counsel to the Seller as to such matters as the Buyer may request, in form and substance reasonably satisfactory to the Buyer including, without limitation, with respect to (i) the Buyer’s perfected lien on the Purchased Items, (ii) non-contravention with applicable laws, enforceability, corporate matters opinions with respect to the Seller, (iii) [reserved], (iv) the inapplicability of the Investment Company Act of 1940, as amended, (v) the applicability of the Bankruptcy Code safe harbors to this Repurchase Agreement;
(d) Master Trust Receipt and Mortgage Loan Schedule and Exception Report. A Master Trust Receipt, substantially in the form of Annex 2 of the Custodial and Disbursement Agreement, dated the Effective Date, from the Custodian, duly completed, with a Mortgage Loan Schedule and Exception Report attached thereto;
(e) Approval of Servicing Agreement; Servicer Notice. The Buyer shall have, in its sole discretion, approved (i) each Servicing Agreement, and such Servicing Agreement shall have been certified as a true, correct and complete copy of the original, and (ii) each fully executed Servicer Notice, and, if the Servicer is not the Seller or an Affiliate of the Seller, a letter, acceptable to the Buyer in its sole discretion, from the applicable Servicer consenting to termination of such Servicing Agreement upon the occurrence of an Event of Default that has not been waived or Servicer Termination Event;
(f) Filings, Registrations, Recordings; Lien Searches. (i) Any documents (including, without limitation, financing statements) required to be filed, registered or recorded in order to create, in favor of the Buyer, a perfected, first-priority security interest in the Purchased Items, subject to no Liens other than those created hereunder, shall have been properly prepared and executed for filing (including the applicable county(ies) if the Buyer determines such filings are necessary in its sole discretion), registration or recording in each office in each jurisdiction in
which such filings, registrations and recordations are required to perfect such first-priority security interest;
(ii) UCC lien searches in such jurisdictions as shall be applicable to the Seller and the Purchased Items, the results of which shall be satisfaction to the Buyer;
(g) Financial Statements. The financial statements referenced in Section 6.03;
(h) Underwriting Guidelines. A copy of the Underwriting Guidelines;
(i) Consents, Licenses, Approvals, etc. The Buyer shall have received copies of all consents, licenses and approvals, if any, required in connection with the execution, delivery and performance by the Seller of, and the validity and enforceability of, the Mortgage Loan Documents and Repurchase Documents, which consents, licenses and approvals shall be in full force and effect, including but not limited to, evidence of the following, to the extent applicable, Fannie Mae, Freddie Mac, Ginnie Mae, VA and RHS approval as lender, evidence of FHA approval as Mortgagee and FHA, Fannie Mae, Freddie Mac, Ginnie Mae, RHS and VA approval as servicer of the Mortgage Loans, as well as approval by FHA, Fannie Mae, Freddie Mac, Ginnie Mae, RHS and VA of any Servicer of the Mortgage Loans;
(j) Insurance. The Buyer shall have received evidence in form and substance satisfactory to the Buyer showing compliance by the Seller as of such initial Purchase Date with Section 7.25 hereof;
(k) Demonstration of Liquidity. The Buyer shall have received evidence in form and substance satisfactory to the Buyer that Seller has Liquidity in an amount of not less than [***] of which Liquidity at least [***] is unrestricted cash;
(l) Commitment Fee. The Buyer shall have received the Commitment Fee; and
(m) [Reserved]; and
(n) KYC. The Buyer has completed to its satisfaction such due diligence (including the Buyer’s “Know Your Customer” and Prescribed Laws diligence) and modeling as the Buyer may require, in its sole discretion.
5.02 Conditions Precedent to all Transactions. Upon satisfaction of the conditions set forth in this Section 5.02, the Buyer shall, with respect to the Committed Amount, or may, in its sole discretion, with respect to the Uncommitted Amount, enter into a Transaction with the Seller. The entering into by the Buyer of each Transaction (including the initial Transaction) on any Business Day is subject to the satisfaction of the following further conditions precedent, both immediately prior to the entering into of such Transaction and also after giving effect thereto and to the intended use of the Purchase Price paid to the Seller in respect thereof:
(a) No Default. No Default or Event of Default shall have occurred and be continuing;
(b) Representations and Warranties. Both immediately prior to the entering into of such Transaction and also after giving effect thereto and to the intended use of the Purchase Price paid to the Seller in respect thereof, the representations and warranties made by the Seller in Section 6 and Schedule 1 hereof, and elsewhere in each of the Repurchase Documents, shall be true and correct in all material respects on and as of the date of the making of such Transaction (in the case of the representations and warranties in Section 6.11, Section 6.24 and Schedule 1, solely with respect to Purchased Loans subject to outstanding Transactions) with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);
(c) Margin Maintenance. No Margin Deficiency in excess of the Margin Threshold shall exist;
(d) Due Diligence. Subject to the Buyer’s right to perform one or more Due Diligence Reviews pursuant to Section 14.23 hereof, the Buyer (or the Agent on behalf of the Buyer) shall have completed its due diligence review of the Mortgage Loan Documents for each Transaction and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Mortgage Loans as the Buyer (or the Agent on behalf of the Buyer) in its sole discretion deems appropriate to review and such review shall be satisfactory to the Buyer (or the Agent on behalf of the Buyer) in its sole discretion;
(e) Mortgage Loan Schedule and Exception Report. The Buyer shall have received from the Custodian a Mortgage Loan Schedule and Exception Report with Exceptions as are acceptable to the Buyer in its sole discretion in respect of Eligible Mortgage Loans to be purchased hereunder on such Business Day;
(f) Release Letter. The Agent shall have received from the Seller a Warehouse Lender’s Release Letter (as defined in the Custodial and Disbursement Agreement), if applicable, in form and substance acceptable to the Buyer or the Agent covering each Eligible Mortgage Loan to be sold to the Buyer;
(g) Chief Executive Officer. Willie Newman shall be the Chief Executive Officer of the Seller;
(h) Fees and Expenses. The Buyer shall have received all invoiced fees and expenses payable by the Seller that are then due and owing (including, without limitation the amount of any Commitment Fee and Non-Utilization Fee then due and owing, and all of the Buyer’s reasonable attorney fees and expenses as contemplated by Section 14.04(c) and due diligence expenses then due and owing) which amount, at the Buyer’s option, may be netted from the amount of Purchase Price to be paid to the Seller in connection with any Transaction entered into under this Repurchase Agreement;
(i) Takeout Assignment. Upon the reasonable request of the Buyer and to the extent not expressly prohibited under the terms of such Takeout Commitment, the Buyer shall have received a Takeout Assignment for each Takeout Commitment relating to any Purchased Loan subject to a Transaction outstanding as of the Purchase Date;
(j) Master Trust Receipt and Mortgage Loan Schedule and Exception Report. A Master Trust Receipt, substantially in the form of Annex 2 of the Custodial and Disbursement Agreement, dated as of the related Purchase Date, from the Custodian, duly completed, with a Mortgage Loan Schedule and Exception Report attached thereto;
(k) No Market Events. None of the following shall have occurred and/or be continuing:
(i) an event or events shall have occurred 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 the Buyer not being able to finance any 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;
(ii) 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 the Buyer not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events;
(iii) there shall have occurred a material adverse change in the financial condition of the Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of the Buyer to fund its obligations under this Repurchase Agreement; or
(iv) an event beyond the control of the Buyer which the Buyer reasonably determines may result in the Buyer’s inability to perform its obligations under this Repurchase Agreement including, without limitation, acts of God, strikes, lockouts, riots, acts of war or terrorism, epidemics, nationalization, expropriation, currency restrictions, fire, communication line failures, computer viruses, power failures, earthquakes, or other disasters of a similar nature to the foregoing shall have occurred or be continuing.
(l) Filings, Registrations, Recordings. Any documents (including, without limitation, financing statements) required to be filed, registered or recorded in order to create and maintain, in favor of the Buyer, a perfected, first-priority security interest in the Purchased Items, subject to no Liens other than those created hereunder, shall have been properly prepared and executed for filing (including the applicable county(ies) if the Buyer determines such filings are necessary in its sole discretion), registration or recording in each office in each jurisdiction in which such filings, registrations and recordations are required to create and maintain such perfected, first-priority security interest; provided, that assignments of the Mortgages securing or related to the Mortgage Loans shall not be required to be recorded prior to the occurrence of an Event of Default that has not been waived.
(m) No Adverse Litigation. The Buyer (or the Agent) shall not have determined that there is any action, proceeding or investigation by or before any Governmental Authority affecting the Seller, or any of its Affiliates or Property (including, without limitation, any Purchased Loan), which is reasonably likely to be adversely determined and which, if decided
adversely, would have a reasonable likelihood of having a Material Adverse Effect with respect to Seller.
(n) Legal Sale. With respect to any Mortgage Loan that was funded in the name of an Affiliate of the Seller, the Buyer may, in its sole discretion, require the Seller to provide evidence sufficient to satisfy the Buyer that such Mortgage Loan was acquired in a legal sale, including without limitation, an opinion, in form and substance and from an attorney, in both cases, acceptable to the Buyer in its sole discretion, that such Mortgage Loan was acquired in a legal sale.
(o) No Material Adverse Effect. None of the following has occurred, as determined by Buyer in its sole discretion: (i) a Material Adverse Effect with respect to Seller or (ii) a Material Adverse Effect solely with respect to clause (a) of the definition thereof with respect to Seller or any of its Affiliates.
(p) Other Documents. Such other documents related to the financial condition of the Seller or the Mortgage Loans subject to the proposed Transaction as the Buyer may reasonably request consistent with market practices in form and substance acceptable to the Buyer.
Each request for a Transaction by the Seller hereunder shall constitute a certification by the Seller that all the conditions set forth in this Section 5 (other than Section 5.02(i) and (j)) have been satisfied (both as of the date of such notice, Transaction Request or Confirmation and as of the Purchase Date therefor).
Section 6. Representations and Warranties. The Seller represents and warrants to the Buyer as of the Effective Date and as of each Purchase Date that:
6.01 Legal Name. On the Effective Date, the exact legal name of the Seller is Home Point Financial Corporation, and since March 31, 2015 the Seller has not used any previous names, assumed names or trade names except as set forth on Schedule 3 attached hereto.
6.02 Existence. The Seller (a) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect with respect to Seller; and (c) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect with respect to Seller.
6.03 Financial Condition. The Seller has heretofore furnished to the Buyer a copy of (a) its consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for the fiscal year of the Seller ended December 31, 2019 (the “Financial Statement Date”) and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of BDO and (b) its consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for
the quarterly fiscal periods of the Seller ended March 31, 2020, and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such quarterly fiscal periods, setting forth in each case in comparative form the figures for the previous year. All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial condition of the Seller and its Subsidiaries and the consolidated results of their operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. Since the Financial Statement Date, there has been no material adverse change in the consolidated business, operations or financial condition of the Seller and its consolidated Subsidiaries taken as a whole from that set forth in the financial statements delivered for the fiscal year of the Seller ending on such date.
6.04 Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened) or other legal or arbitrable proceedings affecting the Seller or any of its Subsidiaries or affecting any of the Property of any of them before any Governmental Authority or any material developments in any of the foregoing that (i) questions or challenges the validity or enforceability of any of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) individually or in the aggregate, if adversely determined against Seller, would result in a judgment against Seller in excess of [***] (provided that this Section 6.04(ii) shall not include any routine actions brought by or on behalf of an individual Mortgagor with respect to which Seller is acting in its capacity as servicer (which shall include without limitation, contested foreclosures, contested actions or bankruptcy proceedings), except putative class action proceedings and proceedings commenced by any Governmental Authority), (iii) individually or in the aggregate, if adversely determined, could reasonably be likely to have a Material Adverse Effect with respect to Seller, or (iv) requires filing with the Securities and Exchange Commission in accordance with the 1934 Act or any rules thereunder.
6.05 No Breach. Neither (a) the execution and delivery of the Repurchase Documents nor (b) the consummation of the transactions therein contemplated in compliance with the terms and provisions thereof will conflict with or result in a breach of the charter or by-laws of the Seller, or any applicable law (including, without limitation, Prescribed Laws), rule or regulation, or any order, writ, injunction or decree of any Governmental Authority, or any Servicing Agreement or other material agreement or instrument to which the Seller or any of its Subsidiaries is a party or by which any of them or any of their Property is bound or to which any of them is subject, or constitute a default under any such material agreement or instrument or result in the creation or imposition of any Lien (except for the Liens created pursuant to this Repurchase Agreement) upon any Property of the Seller or any of its Subsidiaries pursuant to the terms of any such agreement or instrument.
6.06 Action. The Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Repurchase Documents; the execution, delivery and performance by the Seller of each of the Repurchase Documents have been duly authorized by all necessary corporate or other action on its part; and each Repurchase Document has been duly and validly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.
6.07 Approvals.
(a) No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by the Seller of the Repurchase Documents or for the legality, validity or enforceability thereof, except for filings and recordings in respect of the Liens created pursuant to this Repurchase Agreement.
(b) The Seller is approved by Fannie Mae, Freddie Mac and Ginnie Mae as an approved lender, the Seller and each Servicer is approved by Fannie Mae, Freddie Mac and Ginnie Mae as an approved seller and servicer and the Seller has all other approvals required with respect to the FHA, VA, RHS and any other Agency, in each case is in good standing (such collective approvals and conditions, “Agency Approvals”), with no event having occurred or the Seller having any reason whatsoever to believe or suspect will occur (including, without limitation, a change in insurance coverage) which would either make the Seller (or any Servicer) unable to comply with the eligibility requirements for maintaining all such applicable Agency Approvals or which would require notification to the relevant Agency of the occurrence of any event that would impact the Seller’s good standing or otherwise materially restrict Seller’s Agency Approvals in any manner: provided that the foregoing representations with respect to RHS Agency Approvals, shall only apply when any RHS Loan is subject to a Transaction, except for the representation that Seller is in good standing with RHS, which shall apply at all times that any Purchased Loan is subject to a Transaction. The Seller (and any Servicer) has adequate financial standing, servicing facilities, procedures and experienced personnel necessary to service mortgage loans of the same types as may from time to time constitute Mortgage Loans in accordance with Accepted Servicing Practices.
6.08 Margin Regulations. Neither the making of any Transaction hereunder, nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulation T, U or X.
6.09 Taxes. The Seller and its Subsidiaries have timely filed all federal Tax and all state and local income Tax returns and all other material Tax returns that are required to be filed by them and have paid all Taxes due and payable (whether or not reflected on such tax returns), except (a) for any such Taxes as are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided, or (b) to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect with respect to Seller. The charges, accruals and reserves on the books of the Seller and its Subsidiaries in respect of Taxes and other governmental charges are, in the reasonable opinion of the Seller, adequate.
6.10 Investment Company Act. Neither the Seller nor any of its Subsidiaries is an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
6.11 Purchased Items; Security.
(a) The Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased Loan to any other Person, and immediately prior to the sale of such Purchased Loan to the Buyer, the Seller was the sole owner of such Purchased Loan and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released simultaneously with the sale to the Buyer hereunder and Liens granted in favor of the Buyer hereunder. No Purchased Loan sold to the Buyer hereunder was acquired (by purchase or otherwise) by the Seller from an Affiliate of the Seller.
(b) The provisions of this Repurchase Agreement are effective to create in favor of the Buyer a valid security interest in all right, title and interest of the Seller in, to and under the Purchased Items.
(c) Upon (i) receipt by the Custodian of each Mortgage Note endorsed in blank, and each assignment of the related Mortgage, assigned in blank, by a duly authorized officer of the Seller unless the related Mortgage Loan is registered in the MERS System in which case the Seller shall provide evidence of such registration, and (ii) the issuance by the Custodian to the Buyer of the Master Trust Receipt and Mortgage Loan Schedule therefor, the Buyer shall have a fully perfected first priority security interest therein, in the Purchased Loan evidenced thereby and in the Seller’s interest in the related Mortgaged Property, in the event that any Transaction was construed to constitute a financing rather than a sale.
(d) Upon the filing of financing statements on Form UCC-1 naming the Buyer as “Secured Party” and the Seller as “Debtor,” and describing the Purchased Items as the “Collateral,” in the jurisdictions and recording offices listed on Schedule 2 attached hereto, the security interests granted hereunder in the Purchased Items will constitute fully perfected first priority security interests under the Uniform Commercial Code in all right, title and interest of the Seller in, to and under such Purchased Items which can be perfected by filing under the Uniform Commercial Code, in the event that any Transaction is construed to constitute a financing rather than a sale.
6.12 Chief Executive Office/Jurisdiction of Organization. On the Effective Date, the Seller’s chief executive office is located at 2211 Old Earhart Road, Suite 250, Ann Arbor, Michigan 48105. On the Effective Date, the Seller’s jurisdiction of organization is New Jersey.
6.13 Location of Books and Records. The location where the Seller keeps its physical books and records, including all computer tapes and records relating to the Purchased Items but excluding the Mortgage Files is its chief executive office.
6.14 Hedging. The Seller has entered into Interest Rate Protection Agreements, having a notional amount not less than required by reasonable market practices taking into account the aggregate unpaid principal amount of the Purchased Loans.
6.15 True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the Seller to the Buyer in connection with the negotiation, preparation or delivery of this Repurchase Agreement and the other Repurchase Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of the Seller to the Buyer in connection with this Repurchase Agreement and the other Repurchase Documents and the transactions contemplated hereby and thereby will be true and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to a Responsible Officer of the Seller that could reasonably be expected to have a Material Adverse Effect with respect to Seller that has not been disclosed herein, in the other Repurchase Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Buyer for use in connection with the transactions contemplated hereby. No fraud that involves management or other employees who have a significant role in the internal controls of the Seller over financial reporting has occurred.
6.16 Tangible Net Worth. On the Effective Date, the Tangible Net Worth of the Seller is not less than [***].
6.17 ERISA. Each Plan to which the Seller or its Subsidiaries make direct contributions, and, to the Seller’s knowledge, each other Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other applicable Federal or State law. Seller and its Subsidiaries, and to Seller’s knowledge, its ERISA Affiliates, are in substantial compliance with its respective contribution obligations with respect to any Multiemployer Plan. No event or condition has occurred and is continuing as to which the Seller would be under an obligation to furnish a report to the Buyer under Section 7.01(d) hereof and which is reasonably expected to result in a Material Adverse Effect with respect to Seller. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of ACS 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all Plans (based on the assumptions used for purposes of ACS 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such Plans in an amount that would reasonably be expected to result in a Material Adverse Effect with respect to Seller. The Seller and its Subsidiaries do not provide any material medical or health benefits to former employees other than as required by the Consolidated Omnibus Budget Reconciliation Act, as amended, or similar state or local law at no cost to the employer.
6.18 Delivery of Mortgage Loans. The Seller has no reason to believe, after reasonable and diligent inquiry respecting (among other things) the relevant Mortgage Loan Documents, the characteristics and quality of the Mortgage Loans, that the transfer will not occur as required pursuant to this Repurchase Agreement.
6.19 Subsidiaries. As of the Effective Date, the Seller has no Subsidiaries other than NM Holdings LLC. On or after the Effective Date, the Seller has no Subsidiaries other than those disclosed to Buyer in writing in accordance with Section 7.06(f).
6.20 Regulatory Status. The Seller is not a “bank holding company” or a direct or indirect subsidiary of a “bank holding company” as defined in the Bank Holding Company Act
of 1956, as amended, and Regulation Y thereunder of the Board of Governors of the Federal Reserve System.
6.21 Takeout Commitments; Takeout Assignments. Each Takeout Commitment (if any) has been delivered by the Seller and constitutes a valid, binding and existing obligation of a Takeout Investor, enforceable against the Seller and the Takeout Investor, respectively, in accordance with its terms (subject to bankruptcy laws and other similar laws of general application affecting rights of creditors and subject to the application of the rules of equity, including those relating to specific performance). If requested by the Buyer and to the extent not expressly prohibited under the terms of such Takeout Commitment, each Takeout Commitment (if any) has been duly and validly assigned by the Seller to the Buyer pursuant to a Takeout Assignment.
6.22 No Prohibited Persons. Neither the Seller, to the knowledge of the Seller, any director, officer, or employee of the Seller, or any of its subsidiaries is an individual or entity (“Prohibited Person”) that is currently the subject of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC-Administered Sanctions”), or is located, organized or resident in a country or territory that is the subject of OFAC-Administered Sanctions, and the Seller will not use the proceeds of the Transactions under the Repurchase Agreement, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Prohibited Person, to fund activities of or business with any Prohibited Person, or in any country or territory, that at the time of such funding or facilitation, is the subject of OFAC-Administered Sanctions.
6.23 Identification of Servicer(s). Each Servicer of any Mortgage Loans shall be identified in writing to the Buyer and must be acceptable to the Buyer in its sole reasonable discretion.
6.24 Solvency. After giving effect to each Transaction (i) the amount of the “present fair saleable value” of the assets of the Seller and of the Seller and its Subsidiaries, taken as a whole, will, as of such date, exceed the amount of all “liabilities of the Seller and of the Seller and its Subsidiaries, taken as a whole, contingent or otherwise,” as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (ii) the present fair saleable value of the assets of the Seller and of the Seller and its Subsidiaries, taken as a whole, will, as of such date, be greater than the amount that will be required to pay the liabilities of the Seller and of the Seller and its Subsidiaries, taken as a whole, on their respective debts as such debts become absolute and matured, (iii) neither the Seller, nor the Seller and its Subsidiaries, taken as a whole, will have, as of such date, an unreasonably small amount of capital with which to conduct their respective businesses, and (iv) the Seller and the Seller and its Subsidiaries, taken as a whole, will be able to pay their respective debts as they mature. The Seller does not intend to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. The 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 the Seller or any of its assets. The Seller is not transferring any Mortgage Loans with any intent to hinder, delay or defraud any of its creditors. For purposes of this Section, “debt” means “liability on a claim,” “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured, and (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
6.25 Massachusetts Subprime Loans, Nevada Subprime Loans and Loans Subject to Consent or Other Orders. No Purchased Loan which is a Massachusetts Subprime Loan violates the Massachusetts Borrower’s Best Interest Statute (M.G.L. 183 § 28c) or is presumptively unfair under M.G.L. c 93A, as such term is defined in Massachusetts law and court decisions, no Purchased Loan is a Nevada Subprime Loan.
6.26 [Reserved].
6.27 True Sales. Any and all interest of a Qualified Originator in, to and under any Mortgage funded in the name of or acquired by such Qualified Originator or seller which is an Affiliate of the Seller has been sold, transferred, conveyed and assigned to the Seller pursuant to a legal sale and such Qualified Originator retains no interest in such Loan, and if so requested by the Buyer, such sale is covered by an opinion of counsel to that effect in form and substance acceptable to the Buyer.
6.28 Anti-Money Laundering Laws. The Seller and each of the Seller’s Affiliates has complied with all Prescribed Laws.
6.29 No Burdensome Restrictions. No Requirement of Law or Contractual Obligation of the Seller has a Material Adverse Effect with respect to Seller.
6.30 Origination and Acquisition of Mortgage Loans. The Mortgage Loans were originated by the Seller or a Qualified Originator, and the origination and collection practices used by the Seller or Qualified Originator, as applicable, with respect to the Mortgage Loans have been, in all material respects legal and in compliance with all laws with respect to unfair and deceptive lending practices and Predatory Lending Practices, proper, prudent and customary in the residential mortgage loan origination and servicing business, and in accordance with FHA, VA, RHS, Ginnie Mae, Fannie Mae and Freddie Mac standards as applicable, and in accordance with the Underwriting Guidelines. All Mortgage Loans are in conformity with the Underwriting Guidelines and, with respect to Agency Mortgage Loans, are eligible for sale to Ginnie Mae, Fannie Mae or Freddie Mac or for guaranty by the VA or the RHS or for insurance by the FHA, and satisfy all applicable requirements for delivery to the appropriate Agency. Each of the Agency Mortgage Loans complies with the representations and warranties listed in Schedule 1 hereto.
6.31 No Broker. The Seller has not dealt with any broker, investment banker, agent, or other person, except for the Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Loans pursuant to this Repurchase Agreement; provided, that if the Seller has dealt with any broker, investment banker, agent, or other person, except for the Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Loans pursuant to this Repurchase Agreement, such commission or compensation shall have been paid in full by the Seller.
Section 7. Covenants of the Seller. The Seller covenants and agrees with the Buyer that at all times, so long as any Transaction is outstanding and until payment in full of all Repurchase Obligations:
7.01 Financial Statements. The Seller shall deliver to the Buyer:
(a) as soon as available, and in any event not later than thirty (30) days after the end of each calendar month (other than months that are also the end of a calendar quarter), the unaudited consolidated balance sheet of the Seller and its consolidated Subsidiaries as at the end of such month and the related unaudited consolidated statement of income and retained earnings and consolidated statement of equity of the Seller and its consolidated Subsidiaries for such month and the portion of the fiscal year through the end of such month, setting forth in each case in comparative form the figures for the previous year, accompanied by a certificate of a Responsible Officer of the Seller, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Seller and its consolidated Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within forty-five (45) days after the end of each of the first three quarterly fiscal periods of each fiscal year of the Seller, the unaudited consolidated balance sheet of the Seller and its consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statement of income and retained earnings, consolidated statement of cash flows for such period and the portion of the fiscal year through the end of such period, setting forth in each case in comparative form the figures for the previous year, accompanied by a certificate of a Responsible Officer of the Seller, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Seller and its consolidated Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments);
(c) as soon as available and in any event within ninety (90) days after the end of each fiscal year of the Seller, the consolidated balance sheet of the Seller and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statement of income and retained earnings, consolidated statement of cash flows and consolidated statement of equity for the Seller and its consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall not be qualified as to scope of audit or going concern and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Seller and its consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any Default or Event of Default;
(d) from time to time such other information regarding the financial condition, operations, or business of the Seller as the Buyer may reasonably request; and
(e) as soon as reasonably possible, and in any event within thirty (30) days after a Responsible Officer of the Seller knows, or with respect to any Plan or Multiemployer Plan to which the Seller or any of its Subsidiaries makes direct contributions, has reason to believe, that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a senior financial officer of the Seller setting forth details respecting such event or condition and the action, if any, that the Seller or its ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by the Seller or an ERISA Affiliate with respect to such event or condition):
(i) any Reportable Event; and any request for a waiver under Section 412 of the Code for any Plan;
(ii) the distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by the Seller or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Seller or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan by the Seller or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by the Seller or any ERISA Affiliate of notice from a Multiemployer Plan that it is insolvent pursuant to Section 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA; and
(v) the institution of a proceeding by a fiduciary of any Multiemployer Plan against the Seller or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed within thirty (30) days.
The Seller will furnish to the Buyer, at the time it furnishes each set of financial statements pursuant to paragraphs (a) above, an officer’s certificate in the form of Exhibit Error! Reference source not found. hereto (each a “Compliance Certificate”) signed by a Responsible Officer of the Seller (i) certifying that, both immediately prior to the entering into of each Transaction that has been entered into during the period since the delivery to the Buyer of the immediately preceding Compliance Certificate (or, with respect to the first such certificate, since the Effective Date) and also after giving effect to each such Transaction and to the intended use of the Purchase Price paid to the Seller in respect thereof, the representations and warranties made by the Seller in Section 6 and Schedule 1 hereof, and elsewhere in each of the Repurchase Documents, were true and correct in all material respects on and as of the date of the making of each such Transaction (in the case of the representations and warranties in Section 6.11, Section 6.25 and Schedule 1, solely with respect to Purchased Loans subject to such outstanding Transactions) with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), (ii) certifying
that Seller is, and as of the date of each Transaction that was entered during the period since the delivery to Buyer of the immediately preceding Compliance Certificate (or, with respect to the first such certificate, since the Effective Date) was, in compliance with all governmental licenses and authorizations, statutory and regulatory requirements, and qualified to do business and in good standing in all required jurisdictions, in each case, except where failure to be so licensed, authorized or qualified would not be reasonably likely to result in a Material Adverse Effect with respect to Seller, (iii) stating that, to the best of such Responsible Officer’s knowledge, the Seller during such fiscal period or year has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Repurchase Agreement and the other Repurchase Documents to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default that has not been waived except as specified in such certificate (and, if any Default or Event of Default has occurred and is continuing, describing the same in reasonable detail and describing the action the Seller has taken or proposes to take with respect thereto), and (iv) showing in detail the calculations supporting such Responsible Officer’s certification of the Seller’s compliance with the requirements of Sections 7.14, 7.15, 7.16 and 7.18.
7.02 Litigation. The Seller will promptly, and in any event within ten (10) days after service of process on any of the following, give to the Buyer notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which, to the knowledge of a Responsible Officer of the Seller, are pending or threatened) or other legal or arbitrable proceedings affecting the Seller or any of its Subsidiaries or affecting any of the Property of any of them before any Governmental Authority or any material developments of any of the foregoing that (i) questions or challenges the validity or enforceability of any of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) individually or in the aggregate, if adversely determined against Seller, would result in a judgment against Seller in excess of $10,000,000 (provided that this Section 7.02 shall not include any routine actions brought by or on behalf of an individual Mortgagor with respect to which Seller is acting in its capacity as servicer (which shall include without limitation, contested foreclosures, contested actions or bankruptcy proceedings), except putative class action proceedings and proceedings commenced by any Governmental Authority), (iii) individually or in the aggregate, if adversely determined, could reasonably be likely to have a Material Adverse Effect with respect to Seller, or (iv) requires filing with the Securities and Exchange Commission in accordance with the 1934 Act or any rules thereunder.
7.03 Existence, etc. The Seller will:
(a) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises (including, but not limited to, any FHA, VA or RHS licenses; provided that the foregoing obligation with respect to RHS licenses, shall only apply when any RHS Loan is subject to a Transaction) or approvals (provided that nothing in this Section 7.03(a) shall prohibit any transaction expressly permitted under Section 7.04 hereof), except where failure to do so, with respect to any rights, privileges, licenses or franchises, would not be reasonably likely to result in a Material Adverse Effect with respect to Seller;
(b) comply with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without limitation, Prescribed Laws, all
environmental laws, all laws with respect to unfair and deceptive lending practices and Predatory Lending Practices) if failure to comply with such requirements would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect with respect to Seller;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied;
(d) not change its jurisdiction of organization from the jurisdiction referred to in Section 6.12 unless it shall have provided the Buyer thirty (30) days’ prior written notice of such change;
(e) [reserved]; and
(f) subject to the limitations set forth in Section 14.23, permit representatives of the Buyer, during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by the Buyer.
7.04 Prohibition of Fundamental Changes. The Seller shall not (i) enter into any transaction of merger or consolidation or amalgamation unless Seller will be the surviving entity and provided that Seller provides notice of such transaction within five (5) Business Days of the occurrence thereof, or (ii) liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution). The Seller shall not, without the prior written consent of the Buyer, directly or indirectly make any material change in the nature of its business as carried on at the date hereof. The Seller shall not convey, sell, lease, assign, transfer or otherwise dispose of (collectively, “Transfer”), all or substantially all of its Property, business or assets (including, without limitation, receivables and leasehold interests) whether now owned or hereafter acquired or allow any Subsidiary to Transfer substantially all of its assets to any Person (except as contemplated in ordinary course whole loan sales, servicing rights sales or securitizations); provided, that the Seller may after prior written notice to the Buyer allow such action with respect to any Subsidiary which is not a material part of the Seller’s overall business operations.
7.05 Margin Deficiency. If at any time there exists a Margin Deficiency, the Seller shall cure such Margin Deficiency in accordance with Section 2.07 hereof.
7.06 Notices. The Seller shall give notice to the Buyer and the Agent:
(a) promptly upon receipt of notice or knowledge of the occurrence of any Default or Event of Default;
(b) with respect to any Purchased Loan sold to the Buyer hereunder, within three (3) Business Days following receipt of any payment in full of principal relating to such Purchased Loan;
(c) with respect to any Purchased Loan sold to the Buyer hereunder, promptly upon receipt of notice or knowledge that the underlying Mortgaged Property has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or
otherwise damaged so as to affect adversely the Market Value of such Purchased Loan or that such Purchased Loan breaches any representation or warranty listed on Schedule 1 hereto;
(d) promptly upon receipt of notice or knowledge of (i) any default related to any Purchased Items, (ii) any Lien or security interest (other than security interests created hereby or by the other Repurchase Documents) on, or claim asserted against, any of the Purchased Items or (iii) any event or change in circumstances which could reasonably be expected to have a Material Adverse Effect with respect to Seller, or (iv) any fraud that involves management or other employees who have a significant role in the internal controls of Seller over financial reporting;
(e) promptly upon any material change in the market value of any Purchased Loan or a material portion of the Seller’s assets, including Seller’s servicing rights portfolio;
(f) in the event the Seller creates a Subsidiary after the Effective Date, such notice to be provided to the Buyer in the Seller’s next Compliance Certificate delivered to the Buyer following the date when such Subsidiary was created;
(g) promptly upon notice or knowledge of the occurrence of any material Reportable Event; and
(h) promptly upon any change in the name or ownership of Seller.
Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Seller setting forth details of the occurrence referred to therein and stating what action the Seller has taken or proposes to take with respect thereto.
7.07 Interest Rate Protection Agreements. The Seller shall at all times maintain Interest Rate Protection Agreements with MS&Co. or any other counterparty that enters into Interest Rate Protection Agreement in the ordinary course of its business, having terms with respect to protection against fluctuations in interest rates reasonably comparable to other Interest Rate Protection Agreement that may exist in the industry for similarly situated counterparties. The Seller shall deliver to the Buyer monthly a written summary of the notional amount of all outstanding Interest Rate Protection Agreements.
7.08 Reports. The Seller shall provide the Buyer with a quarterly report, which report shall include, among other items, a summary of the Seller’s delinquency and loss experience with respect to mortgage loans serviced by the Seller, any Servicer or any designee of either, plus any such additional reports as the Buyer may reasonably request with respect to the Seller’s or any Servicer’s servicing portfolio or pending originations of mortgage loans. The Seller shall provide notice upon becoming aware of any penalties, sanctions or charges levied, or threatened to be levied, against it or any change or threatened change in approval status, or the commencement of any Agency audit (other than an audit conducted for due diligence purposes in the normal course of business by an Agency in accordance with the Agency’s policies) or investigation, or the institution of any action or the threat of institution of any action against Seller by any Agency, HUD or any other agency, or any supervisory or regulatory Governmental Authority supervising or regulating the origination or servicing of mortgage loans by, or the issuer or seller status of, the Seller.
7.09 Underwriting Guidelines.
(a) In the event that the Seller makes any amendment or modification to the Underwriting Guidelines that relate to Prime Jumbo Mortgage Loans or Non-QM Mortgage Loans, the Seller shall immediately notify the Agent of such change and shall promptly deliver to the Agent a complete copy of the amended or modified Underwriting Guidelines. If the Buyer (or the Agent on behalf of the Buyer) determines, in its sole discretion, that a proposed amendment or modification to the Underwriting Guidelines with respect to Prime Jumbo Mortgage Loans or Non-QM Mortgage Loans is material, the Buyer shall have no obligation to enter into any Transactions with respect to any Mortgage Loans acquired pursuant to the such modified or amended Underwriting Guidelines.
(b) The Seller shall originate Mortgage Loans in a manner which is consistent with sound underwriting and appraisal practices, and in compliance with applicable federal and state consumer protection laws including, without limitation, all laws with respect to unfair or deceptive practices and all laws relating to Predatory Lending Practices.
7.10 Transactions with Affiliates. The Seller will not enter into any transaction, including without limitation any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (a) otherwise not prohibited under this Repurchase Agreement, (b) in the ordinary course of the Seller’s business and (c) upon fair and reasonable terms no less favorable to the Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate, or make a payment that is not otherwise permitted by this Section 7.10 to any Affiliate. In no event shall the Seller sell to the Buyer hereunder any Purchased Loan acquired by the Seller from an Affiliate of the Seller.
7.11 Limitation on Liens. The Seller will defend the Purchased Items against, and will take such other action as is necessary to remove, any Lien, security interest or claim on or to the Purchased Items, other than the security interests created under this Repurchase Agreement, and the Seller will defend the right, title and interest of the Buyer in and to any of the Purchased Items against the claims and demands of all persons whomsoever.
7.12 Limitation on Guarantees. The Seller shall not create, incur, assume or suffer to exist any Guarantees.
7.13 Limitation on Distributions. Following the occurrence of a Default or Event of Default that has not been waived, the Seller shall not declare or pay any dividends upon any shares of the Seller’s stock, including Capital Stock, now or hereafter outstanding, nor shall the Seller set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity or partnership interest of the Seller, whether now or hereafter outstanding, or make any other distribution in respect of any of the foregoing or to any shareholder or equity owner of the Seller, either directly or indirectly, whether in cash or property or in obligations of the Seller or any of the Seller’s consolidated Subsidiaries.
7.14 Maintenance of Tangible Net Worth. The Seller shall not permit its Tangible Net Worth at any time to be less than [***].
7.15 Maintenance of Ratio of Total Indebtedness to Tangible Net Worth. The Seller shall not permit the ratio of Total Indebtedness to Tangible Net Worth at any time to be greater than [***].
7.16 Maintenance of Profitability. The Seller shall not permit Net Income (before income Taxes), generated over a consecutive three-month period, measured on the last day of each fiscal quarter, to be less than [***].
7.17 Servicer; Servicing File. The Seller shall provide to the Agent on the fifth Business Day of each month a computer readable file containing servicing information, including without limitation those fields specified by the Agent from time to time, on a loan-by-loan basis and in the aggregate, with respect to the Mortgage Loans serviced hereunder by the Seller or any Servicer. The Seller shall not cause the Mortgage Loans to be serviced by any servicer other than a Servicer expressly approved in writing by the Buyer.
7.18 Maintenance of Liquidity. The Seller shall ensure that it maintains unrestricted cash and Cash Equivalents in an amount of not less than [***] at all times, as measured at the end of each calendar month; provided that solely for the period beginning on and including the Effective Date and ending on but excluding the earlier of (i) sixty (60) days after the Effective Date or (ii) July 31, 2020, such amount shall not be less than [***] of unrestricted cash and Cash Equivalents at all times.
7.19 Required Filings. The Seller shall promptly provide the Buyer and the Agent with copies of all documents which the Seller or any Affiliate of the Seller is required to file with the Securities and Exchange Commission in accordance with the 1934 Act or any rules thereunder.
7.20 No Adverse Selection. The Seller has not selected any Purchased Item in a manner so as to adversely affect the Buyer’s interests when compared to mortgage loans similar to the Eligible Loans.
7.21 Massachusetts Subprime Loans, Nevada Subprime Loans and Loans subject to Consent or Other Orders. If the Buyer determines, in its sole discretion, that any Purchased Loan breaches the representation and warranty in Section 6.24 of this Repurchase Agreement (whether or not such breach is material), or if the Buyer determines, in its sole discretion, that a Purchased Loan is a Massachusetts Subprime Loan or a Nevada Subprime Loan which suffers from a compliance exception resulting from a systematic or recurring fault in the Seller’s or any Qualified Originator’s origination practices, then the Seller shall immediately, and in no case later than three (3) Business Days following notice to Seller of such breach, repurchase such Mortgage Loan at the related Repurchase Price. The date on which the Seller repurchases such Mortgage Loan will be considered the “Repurchase Date” for such Mortgage Loan.
7.22 Remittance of Prepayments in Full. Following an Event of Default that is continuing, the Seller shall remit, or cause to be remitted, to the Blocked Account, all principal prepayments in full that the Seller has received with in two (2) Business Days of receipt. Following an Event of Default that is continuing, on each Thursday (or the next Business Day if such Thursday is not a Business Day), the Seller shall provide to buyer information in sufficient
detail to enable the Buyer to appropriately identify the Purchased Loan to which any remitted principal amount applies for all remittances made during the previous week, if any.
7.23 Agency Approvals. Should the Seller, for any reason, cease to possess all applicable Agency Approvals, the Seller shall so notify the Buyer immediately in writing; provided that the foregoing obligation shall only apply to Approval with respect to RHS when any RHS Loan is subject to a Transaction. Notwithstanding the preceding sentence, the Seller shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Repurchase Agreement and so long as any Transaction remains outstanding.
7.24 [Reserved].
7.25 Maintenance of Property; Insurance. The Seller shall keep all property useful and necessary in its business in good working order and condition. The Seller shall maintain errors and omissions insurance and/or mortgage impairment insurance and blanket bond coverage in such amounts as are in effect on the Effective Date and are customarily required by Fannie Mae and Freddie Mac (as disclosed to the Buyer in writing). Seller shall maintain endorsements for theft of warehouse lender money and collateral naming the Buyer as a loss payee under its bond coverage or other fidelity insurance and as a direct loss payee/right of action under its bond or other fidelity insurance policy.
7.26 MERS Designated Mortgage Loans. With respect to each MERS Designated Mortgage Loan, the Seller shall not identify, or permit to be identified, any party other than Buyer in the field “interim funder” on the MERS® system without the express written consent of the Buyer. Seller shall identify Buyer in the field “interim funder” on the MERS system within ten (10) days of the related Purchase Date. The Buyer shall have the right to require the Seller, at the sole cost and expense of the Seller, to deregister each MERS Designated Mortgage Loan from the MERS® system and require MERS to prepare assignments of mortgage as specified by the Buyer.
7.27 Loan Purchase Agreements. With respect to each Purchased Loan that is subject to a Takeout Commitment, the Seller shall maintain at least one whole loan purchase agreement with at least one third party purchaser or Agency, pursuant to which such third party purchaser or Agency has agreed to purchase Eligible Mortgage Loans from the Seller. The Seller shall not be in default under any purchase agreement with any third party purchaser or Agency. The Seller shall ensure that each Mortgage Loan sold to the Buyer in a Transaction hereunder which is subject to a Takeout Commitment with a third party purchaser is eligible for sale to such third party purchaser or Agency pursuant to the related purchase agreement.
7.28 Reserved.
7.29 Power of Attorney. The Seller shall, from time to time at the reasonable request of the Buyer, deliver to the Buyer any powers of attorney or other documentation required by the Buyer to ensure the enforceability under applicable law of any rights and/or powers granted to the Buyer in Section 4.04 of this Repurchase Agreement.
7.30 Quality Control. The Seller shall maintain an internal quality control program that evaluates and monitors, on a regular basis, the overall quality of (i) its origination
activities (including its compliance with all requirements of the Freddie Mac Loan Prospector (LP) or the Fannie Mae DeskTop Underwriting (DU) program, and all applicable laws and regulations with respect to unfair and deceptive lending practices, including Predatory Lending Practices and (ii) its servicing activities and that ensures that the Mortgage Loans are serviced in accordance with Accepted Servicing Practices and are serviced in accordance with all applicable Agency Guides; guards against dishonest, fraudulent or negligent acts; and guards against (i) dishonest, fraudulent, or negligent acts; and (ii) errors, omissions, by its employees, officers, directors, and other persons authorized to act on behalf of the Seller.
7.31 Maintenance of Papers, Records and Files.
(a) The Seller shall acquire, and the Seller shall build, maintain and have available, a complete imaged file in accordance with lending industry custom and practice for each Purchased Loan. The Seller shall maintain imaged copies of all such Records not in the possession of Custodian or the Buyer in good and complete condition for so long as the related Mortgage Loan is subject to a Transaction hereunder and preserve them against loss or destruction.
(b) The Seller shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Loans in accordance with industry custom and practice, including those maintained pursuant to subsection (a), and all such Records to the extent they are part of the Mortgage File shall be in Custodian’s possession unless permitted to be in the possession of a third-party in accordance with the terms of the Custodial and Disbursement Agreement.
(c) For so long as the Buyer has an interest in or lien on any Purchased Loan, the Seller will hold or cause to be held all related Records in trust for the Buyer.
(d) Subject to the limitations set forth in Section 14.23, upon reasonable advance notice from Custodian or the Buyer, the Seller shall (x) make any and all such Records available to Custodian or the Buyer to examine any such Records, 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 the Buyer or its authorized agents to discuss the affairs, finances and accounts of the Seller with its respective chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of the Seller with its independent certified public accountants.
7.32 Taxes, Etc. (i) The Seller shall pay and discharge or cause to be paid and discharged, when due, all Taxes, assessments and governmental charges or levies imposed upon the Seller or upon its income and profits or upon any of its property, real, personal or mixed (including without limitation, the Purchased Loans) 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, unless 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, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect with respect to Seller. (ii) The Seller shall file on a timely basis all federal, state and local Tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it.
7.33 Reserved.
7.34 MERS. The Seller (and the Servicer, if any) is a member of MERS in good standing and current in the payment of all fees and assessments imposed by MERS, and shall comply with all rules and procedures of MERS in connection with the servicing of MERS Loans for as long as such Purchased Loans are registered with MERS.
7.35 [***]
7.36 FHA/VA/RHS Loans. The Seller will maintain the FHA insurance on any FHA Loan, the Rural Housing Service Guaranty on any RHS Loan and the VA guaranty on any VA Loan, including without limitation, the payment of any premium owed thereunder. Seller shall make, or cause to be made, all advances and other payments and provide all such reports and notices as are required under the FHA Regulations, Rural Housing Service Regulations or VA Regulations, as applicable, and otherwise take all actions necessary to maintain and keep in full force and effect, during the term of this Repurchase Agreement, the FHA Insurance Contract, Rural Housing Service Guaranty or VA Guaranty Agreement, as applicable, including providing any notices required to be delivered to the FHA, RHS or the VA, as the case may be, in connection with the servicing of the Purchased Loans pursuant hereto.
7.37 Protection of the Buyer’s Interests in the Purchased Loans. The Seller will promptly at its expense, execute and deliver such instruments and documents and take such other actions as the Agent may reasonably request from time to time in order to perfect, protect, evidence, exercise and enforce the Agent’s and the Buyer’s rights and remedies under and with respect to the Repurchase Documents, the Transactions, the Purchased Loans). The Seller shall, promptly upon the Agent’s request, deliver documentation in form and substance reasonably satisfactory to the Agent.
7.38 Division of Limited Liability Company. The Seller shall not effect a “Division” into two or more domestic limited liability companies pursuant to and in accordance
with Section 18-217 of Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended.
Section 8. Events of Default. Each of the following events shall constitute an event of default (an “Event of Default”) hereunder:
(a) the Seller shall fail to repurchase one or more Purchased Items on the Repurchase Date;
(b) the Seller shall fail to pay any Repurchase Price or Price Differential on any Transaction when due (whether at stated maturity, upon acceleration or at mandatory or optional prepayment or repurchase) or any Price Differential on any Transaction or any Margin Deficiency when due; or
(c) [reserved]; or
(d) the Seller shall default in the payment of any other amount (other than Repurchase Price, Price Differential, Margin Deficiency, or required under Section 3.01) payable by it hereunder or under any other Repurchase Document after notification by the Buyer of such default, and such default shall have continued unremedied for [***]; or
(e) (i) any representation, warranty or certification made or deemed made herein by the Seller or any certificate furnished to the Buyer pursuant to the following provisions shall prove to have been incorrect, untrue, or false or intentionally misleading in any material respect as of the time made, repeated, or furnished (other than a Mortgage Loan Issue): Sections 6.02 (Existence)(except with respect to Seller’s good standing), 6.04(i), (iii) and (iv) (Litigation), 6.05 (No Breach), 6.06 (Action), 6.08 (Margin Regulations), 6.10 (Investment Company Act), 6.17 (ERISA), 6.22 (No Prohibited Person), 6.24 (Solvency), 6.28 (Anti-Money Laundering Laws); or (ii) any representation, warranty or certification made or deemed made herein by the Seller or any certificate furnished to the Buyer pursuant to the following provisions and not identified in Section 8(e)(i) shall prove to have been incorrect, untrue, or false or intentionally misleading in any material respect as of the time made, repeated, or furnished (other than a Mortgage Loan Issue) and if such default is capable of being remedied, such failure to observe or perform shall continue unremedied for a period of [***]: Sections 6.02 (Existence)(solely with respect to Seller’s good standing), 6.07 (Approvals), and 6.15 (True and Complete Disclosure); or
(f) any representation, warranty or certification made or deemed made herein or in any other Repurchase Document and not identified in Section 8(e) by the Seller or any certificate furnished to the Buyer pursuant to the provisions hereof or thereof or any information with respect to any Purchased Items furnished in writing by or on behalf of the Seller shall prove to have been incorrect, untrue, or false or intentionally misleading in any material respect as of the time made, repeated, or furnished, and if such default is capable of being remedied, such failure to observe or perform shall continue unremedied for a period of [***] (other than a Mortgage Loan Issue); or
(g) the Seller shall fail to comply with the requirements of Section 7.03(a), Section 7.04, Section 7.05, Section 7.06, Sections 7.09 through 7.36, or Section 7.18 through 7.25,
Section 7.27 through 7.30, Section 7.32(i), or Section 7.35 through 7.36 hereof; or the Seller shall otherwise fail to comply with the requirements of Section 7.03, Section 7.17, Section 7.26, Section 7.32(ii) or Section 7.34 hereof and such default, if capable of being remedied, shall continue unremedied for a period of five (5) Business Days; or the Seller shall fail to comply with the requirements of Section 7.01, Section 7.02, Section 7.03(b), (c), (d), (e), and (f), or Section 7.07 and such default or failure, if capable of being remedied, shall continue unremedied for a period of ten (10) Business Days, or the Seller shall fail to observe or perform any other covenant or agreement contained in this Repurchase Agreement or any other Repurchase Document and such default or failure to observe or perform, if capable of being remedied, shall continue unremedied for a period of [***]; or
(h) a final judgment or judgments for the payment of money in excess of [***] in the aggregate shall be rendered against the Seller or any of its Affiliates other than Longbridge Financial LLC by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] from the date of entry thereof, and the Seller or any such Affiliate 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; or
(i) a Responsible Officer of the Seller shall admit in writing the Seller’s inability to pay its debts as such debts become due; or
(j) the Seller or any of its Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator or the like of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code or (vi) take any corporate or other action for the purpose of effecting any of the foregoing; or
(k) a proceeding or case shall be commenced, without the application or consent of the Seller or any of its Subsidiaries, in any court of competent jurisdiction, seeking (i) its reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of its debts, (ii) the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner, liquidator or the like of the Seller or any such Subsidiaries or of all or any substantial part of its property, or (iii) similar relief in respect of the Seller or any such Subsidiaries under any law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of [***]; or an order for relief against the Seller or any such Subsidiaries shall be entered in an involuntary case under the Bankruptcy Code; or
(l) the Custodial and Disbursement Agreement or any Repurchase Document shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by the Seller; provided that it shall not be an Event of Default under this Section 8(l) if Buyer terminates or otherwise directly causes such Custodial and Disbursement Agreement or other Repurchase Agreement to cease to be in full force and effect; or
(m) the Seller shall grant, or suffer to exist, any Lien on any Purchased Items except the Liens contemplated hereby; or the Liens contemplated hereby shall cease to be first priority perfected Liens on the Purchased Items in favor of the Buyer, or shall be Liens in favor of any Person other than the Buyer; or
(n) the Seller or any of the Seller’s Affiliates shall be in default under, or fail to perform as required under, any note, indenture, repurchase agreement, loan and security agreement, credit facility, guaranty, swap agreement or any other Indebtedness contract to which it is a party in excess of [***] including, without limitation, any MS Indebtedness in any amount, which default (i) involves the failure to pay a matured obligation, or (ii) permits the acceleration of the maturity of obligations or will obligate the prepayment of any indebtedness thereunder by any other party to or beneficiary of such note, indenture, repurchase agreement, guaranty, swap agreement or other contract; or
(o) [reserved]; or
(p) the discovery by the Buyer of a condition or event which existed at or prior to the execution hereof and which the Buyer, in its sole good faith discretion, determines materially and adversely affects: (i) the condition (financial or otherwise) of the Seller, its Subsidiaries or Affiliates; or (ii) the ability of either the Seller or the Buyer to fulfill its respective obligations under this Repurchase Agreement; or
(q) (1) Seller, or to the Seller’s knowledge, any other Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code) involving any Plan, (2) failure to satisfy the minimum funding standards of Section 302 of ERISA, whether or not waived, shall exist with respect to any Plan, (3) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or institution of proceedings is, in the reasonable opinion of the Buyer, likely to result in the termination of such Plan for purposes of Title IV of ERISA, and, in the case of a Reportable Event, the continuance of such Reportable Event unremedied for [***] after notice of such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given or the continuance of such proceedings for [***] after commencement thereof, as the case may be, (4) any Plan shall terminate for purposes of Title IV of ERISA, (5) any withdrawal liability to a Multiemployer Plan shall be incurred by the Seller or any of its Subsidiaries or (6) any other event or condition involving a Plan or Multiemployer Plan shall occur or exist; and in each case in clauses (1) through (6) above, such event of condition, together with all other such events or conditions, if any, is likely to subject the Seller or any of its Subsidiaries to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations, property or financial or other condition of the Seller or any of its Subsidiaries; or
(r) the Electronic Tracking Agreement shall for whatever reason be terminated or cease to be in full force and effect or the Seller’s membership in MERS is terminated for any reason and the Buyer shall not have received an Assignment of Mortgage with respect to each MERS Designated Mortgage Loan identified by the Buyer, in blank, in recordable form, but unrecorded; or
(s) a Change of Control of the Seller shall have occurred without the prior consent of the Buyer; or
(t) the Buyer shall reasonably request, specifying the reasons for such request, reasonable information, and/or written responses to such requests, regarding the financial well-being of the Seller (including but not limited to any information regarding any repurchase and indemnity requests or demands made upon the Seller by any third-party investors (including any Agency)) and such reasonable information and/or responses shall not have been provided within [***] or such longer period agreed to by Buyer in writing; or
(u) [reserved]; or
(v) [reserved]; or
(w) [reserved]; or
(x) [reserved]; or
(y) [reserved]; or
(z) a Servicer Termination Event has occurred and a successor servicer approved in writing by the Buyer in its sole discretion has not been (i) appointed within [***] of the date of such Servicer Termination Event and (ii) assumed the servicing obligations within [***] of such Servicer Termination Event or such longer period approved by the Buyer in writing; or
(aa) any Agency terminates, revokes or suspends the Seller’s approval to sell and service loans to such Agency (including but not limited to its approval to use DU or LP to underwrite mortgage loans); or
(bb) the Seller shall cease to be approved by or its approval shall be revoked, suspended, rescinded, halted, eliminated, withdrawn, annulled, repealed, voided or terminated by (i) Ginnie Mae as an approved issuer, (ii) HUD, pursuant to Sections 203 and 211 of the National Housing Act, (iii) the FHA, as an FHA Approved Mortgagee or servicer, (iv) the VA as a VA Approved Lender or servicer, or (v) Fannie Mae, Freddie Mac or RHS as an approved seller, servicer or lender; or
(cc) [reserved]; or
(dd) all or a material portion of the Seller’s servicing portfolio consisting of Fannie Mae or Freddie Mac loans is seized or the servicing of all or a portion of such loans is otherwise transferred away from the Seller; or
(ee) [reserved]; or
(ff) the Seller’s status as an FHA Approved Mortgagee is suspended, revoked by the FHA; or
(gg) the Seller’s status as an VA Approved Lender is suspended, revoked by the VA; or
(hh) to the extent that any Purchased Loan at such time is an RHS Loan, the Seller’s status as a Rural Housing Service Approved Lender is suspended or revoked; or
(ii) [reserved]; or
(jj) [reserved]; or
(kk) [reserved]; or
(ll) [reserved]; or
(mm) the “compare ratio” assigned to the Seller by FHA under its “Neighborhood Watch” program is greater than [***] provided, however, that the Buyer may, by providing prior written notice to the Seller in the Buyer’s sole discretion, adopt a different threshold for such ratio or other statistic based upon the adoption by FHA of any change in the methodology under such program, and in such event, there shall be an Event of Default hereunder if the “compare ratio” or such other statistic assigned to the Seller by FHA is less favorable than such threshold adopted by the Buyer.
Section 9. Remedies Upon Default.
(a) An Event of Default shall be deemed to be continuing unless expressly waived in writing by the Buyer; provided that an Event of Default shall be deemed to be no longer continuing once expressly waived by the Buyer in writing. Upon the occurrence and during the continuance of one or more Events of Default hereunder, the Buyer’s obligation to enter into any additional Transactions hereunder shall automatically terminate without further action by any Person. Upon the occurrence and during the continuance of one or more Events of Default other than those referred to in Section 8(g) or (h), the Buyer may immediately declare the Repurchase Price of the Transactions then outstanding to be immediately due and payable, together with all Price Differential thereon and fees and expenses accruing under this Repurchase Agreement. Upon the occurrence and during the continuance of an Event of Default referred to in Section 8(g) or (h), such amounts shall immediately and automatically become due and payable without any further action by any Person. Upon such declaration or such automatic acceleration, the balance then outstanding shall become immediately due and payable, without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Seller.
(b) Upon the occurrence and during the continuance of one or more Events of Default and if the Buyer shall have exercised its rights to accelerate or an automatic acceleration shall have occurred pursuant to Section 9(a) hereof, the Buyer shall have the right to obtain physical possession of, for the benefit of the Buyer, the Servicing Records and all other files of the
Seller relating to the Purchased Items and all documents relating to the Purchased Items which are then or may thereafter come in to the possession of the Seller or any third party acting for the Seller and the Seller shall deliver to the Buyer such assignments as the Buyer shall request. The Buyer shall be entitled to specific performance of all agreements of the Seller contained in this Repurchase Agreement.
Section 10. No Duty of The Buyer. The powers conferred on the Buyer hereunder are solely to protect the Buyer’s interests in the Purchased Items and shall not impose any duty upon it to exercise any such powers. The Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to the Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
Section 11. Recognition of the US Special Resolution Regimes.
(a) In the event that the Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Buyer of this Repurchase Agreement and/or the Repurchase Documents, and any interest and obligation in or under this Repurchase Agreement and/or the Repurchase Documents, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Repurchase Agreement and/or the Repurchase Documents, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that the Buyer or a BHC Act Affiliate of the Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Repurchase Agreement and/or the Repurchase Documents that may be exercised against the Buyer are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Repurchase Agreement and/or the Repurchase Documents were governed by the laws of the United States or a state of the United States.
Section 12. Reserved.
Section 13. The Agent.
13.01 Appointment. The Buyer hereby irrevocably designates and appoints Morgan Stanley Mortgage Capital Holdings LLC as its Agent under this Repurchase Agreement and the other Repurchase Documents, and the Buyer irrevocably authorizes the Agent, in such capacity, to take such action on its behalf under the provisions of this Repurchase Agreement and the other Repurchase Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Repurchase Agreement and the other Repurchase Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Repurchase Agreement, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with the Buyer, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Repurchase Agreement or any other Repurchase Document or otherwise exist against the Agent. The provisions of this Section 12 are solely for
the benefit of the Agent and the Buyer, and the Seller shall not have rights as a third party beneficiary of any of such provisions.
13.02 Duties of Agent. In accordance with the terms of this Repurchase Agreement, the Agent shall:
(a) upon receipt of a Transaction Request pursuant to and in accordance with Section 2.02, promptly transmit such Transaction Request to the Buyer and, upon approval by and at the instruction of the Buyer, enter into the Transactions and purchase the applicable Loans on the Buyer’s behalf;
(b) upon receipt of a Confirmation from the Buyer pursuant to and in accordance with Section 2.02(d), promptly transmit such Confirmation to the Seller; and
(c) upon receipt of any payments of Repurchase Price and other amounts to be paid by the Seller or any other party under the Repurchase Agreement or the other Repurchase Documents, promptly deliver such payments to the Buyer at the following account (or such other account of which the Buyer may from time to time notify the Agent pursuant to Section 13.06): [***].
13.03 Delegation of Duties. The Agent may execute any of its duties under this Repurchase Agreement and the other Repurchase Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
13.04 Exculpatory Provisions. Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Repurchase Agreement or any other Repurchase Document (except for its or such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to the Buyer for any recitals, statements, representations or warranties made by the Seller or any officer thereof contained in this Repurchase Agreement or any other Repurchase Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Repurchase Agreement or any other Repurchase Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Repurchase Agreement or any other Repurchase Document or for any failure of the Seller to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to the Buyer to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Repurchase Agreement or any other Repurchase Document, or to inspect the properties, books or records of the Seller.
13.05 Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Seller), independent accountants and other experts selected by the Agent. As between the Agent and the Buyer, the Agent shall be fully justified in failing or refusing to take any action under this Repurchase Agreement or any other Repurchase Document unless it shall first receive such advice or concurrence of the Buyer as it deems appropriate or it shall first be indemnified to its satisfaction by the Buyer against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. As between the Agent and the Buyer, the Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Repurchase Agreement and the other Repurchase Documents in accordance with a request of the Buyer, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Buyer and all future holders of the Purchased Loans.
13.06 Notices. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Agent has received notice from the Buyer or the Seller referring to this Repurchase Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.” In the event that the Agent receives such a notice, the Agent shall give notice thereof to the Buyer. The Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Buyer; provided that unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Buyer. Seller hereby acknowledges that all notices and other communications required to be delivered by the Seller to the Agent will not be valid if delivered solely to the Buyer; such notices and communications must be delivered as required herein. Notices that are be delivered to Agent shall be delivered to 1585 Broadway, New York, New York 10036, Attention: SPG Mortgage Finance, Facsimile No.: 212-761-0093, Telephone No.: 212-761-4480.
13.07 Non Reliance by Buyer. The Buyer expressly acknowledges that neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of the Seller, shall be deemed to constitute any representation or warranty by the Agent to the Buyer. The Buyer represents to the Agent that it has, independently and without reliance upon the Agent, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Seller and made its own decision to enter into Transactions and enter into this Repurchase Agreement. The Buyer also represents that it will, independently and without reliance upon the Agent, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Repurchase Agreement and the other Repurchase Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Seller. Except for notices, reports and other documents expressly required to be furnished by the Seller to the Agent hereunder or under the other Repurchase Documents, which the Agent must distribute promptly to the Buyer, the Agent shall not have any duty or responsibility to provide the Buyer with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Seller which may come into the possession of the Agent or any of its officers, directors, employees, attorneys-in-fact or Affiliates.
13.08 Indemnification. The Buyer agrees to indemnify the Agent (to the extent not reimbursed by the Seller and without limiting the obligation of the Seller to do so) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Repurchase Price) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of, the Transactions, this Repurchase Agreement, any of the other Repurchase Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided that the Buyer shall not be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the Agent’s gross negligence or willful misconduct. The agreements in this Section 13.08 shall survive the payment of the Repurchase Prices and all other amounts payable hereunder.
13.09 Successor Agent. The Agent may resign as Agent upon thirty (30) calendar days’ notice to the Buyer and the Seller. If the Agent shall resign as Agent under this Repurchase Agreement and the other Repurchase Documents, then the Buyer shall appoint a successor Agent, which successor Agent shall be approved by the Seller (unless an Event of Default has occurred and is continuing), and any such successor Agent shall succeed to the rights, powers and duties of the Agent, and the term “Agent” shall mean such successor Agent effective upon such appointment and approval, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Repurchase Agreement or any holders of the Purchased Loans. If no successor Agent has been appointed and shall have accepted such appointment within thirty (30) calendar days after the retiring Agent’s giving notice of its resignation, then the retiring Agent, on behalf of the Buyer, may appoint an Agent which shall (unless an Event of Default has occurred and is continuing) be reasonably acceptable to the Seller. Upon the acceptance of any appointment as the Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations, under this Repurchase Agreement and the other Repurchase Documents. After any retiring Agent’s resignation as Agent, the provisions of this Section 13 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Repurchase Agreement and the other Repurchase Documents.
Section 14. Miscellaneous.
14.01 Delay Not Waiver; Remedies Are Cumulative. No failure on the part of the Buyer and the Agent (or the Buyer or the Agent, as the case may be) to exercise, and no delay in exercising, and no course of dealing with respect to, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Buyer and the Agent (or the Buyer or the Agent, as the case may be) of any right, power or remedy under any Repurchase Document preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All rights and remedies of the Buyer provided for herein are cumulative and in addition to any and all other rights and remedies provided by law, the Repurchase Documents and the other instruments and agreements contemplated hereby and thereby, and are not conditional or contingent on any attempt by the Buyer and the Agent (or the Buyer or the Agent, as the case may
be) to exercise any of its rights under any other related document. The Buyer and the Agent (or the Buyer or the Agent, as the case may be) may exercise at any time after the occurrence of an Event of Default one or more remedies, as they so desire, and may thereafter at any time and from time to time exercise any other remedy or remedies.
14.02 Notices. Except as otherwise expressly permitted by this Repurchase Agreement, all notices, requests and other communications provided for herein and under the Custodial and Disbursement Agreement (including without limitation any modifications of, or waivers, requests or consents under, this Repurchase Agreement) shall be given or made in writing (including without limitation by email or facsimile) delivered to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party provided, that a copy of all notices given under Section 7.01 shall simultaneously be delivered to Credit Department, Morgan Stanley, 1585 Broadway, New York, New York 10036, Attention: SPG Mortgage Finance with a copy to Morgan Stanley Bank, N.A., One Utah Center, 201 South Main Street, Salt Lake City, Utah 84111. Except as otherwise provided in this Repurchase Agreement and except for notices given under Section 1 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when transmitted by email or facsimile (unless an electronic notice of non-delivery is received) or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.
14.03 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.
14.04 Indemnification and Expenses.
(a) Except to the extent expressly set forth in Section 4.12 and Section 3.02 (to the extent such Indemnified Party’s rights under this Section 14.04(a) would arise as a result of amounts being incurred prior to the 90-day period set forth in Section 3.02(c) or as a result of costs not being imposed on similarly situated sellers in Sections 3.02(a) or (b)), and without duplication of any amounts paid to Buyer by Seller under Section 3.02 or Section 4.12, the Seller agrees to hold the Buyer and the Agent (or the Buyer or the Agent, as the case may be) and each of its Affiliates and their officers, directors, employees, agents and advisors (each an “Indemnified Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, the “Costs”) relating to or arising out of this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby (including, without limitation, any Takeout Proceeds Identification Letter), that, in each case, results from anything other than any Indemnified Party’s gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Purchased Loans relating to or arising out of any violation or alleged violation of any environmental law, rule or regulation or any consumer credit laws, including without limitation laws with respect to unfair or deceptive lending practices and Predatory Lending
Practices, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act, that, in each case, results from anything other than such Indemnified Party’s gross negligence or willful misconduct.
(b) In any suit, proceeding or action brought by an Indemnified Party in connection with any Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan, the Seller will save, indemnify and hold such Indemnified Party harmless from and against all expense, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction of liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by the Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from the Seller. The Seller also agrees to reimburse an Indemnified Party for all such Indemnified Party’s costs and expenses incurred in connection with the enforcement or the preservation of such Indemnified Party’s rights under this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, including without limitation the fees and disbursements of its counsel as and when billed by such Indemnified Party.
(c) The Seller agrees to pay within [***] following receipt of an invoice therefor from the Buyer and the Agent (or the Buyer or the Agent, as the case may be) all of the out-of-pocket costs and expenses incurred by the Buyer and the Agent (or the Buyer or the Agent, as the case may be) in connection with the development, preparation, negotiation and execution of, and any amendment, supplement or modification to, this Repurchase Agreement, any other Repurchase Document or any other documents prepared in connection herewith or therewith. The Seller agrees to pay within [***] following receipt of an invoice therefor from the Buyer and the Agent (or the Buyer or the Agent, as the case may be) all of the out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation (i) all the reasonable fees, disbursements and expenses of counsel to the Buyer and (ii) all the due diligence, inspection, testing and review costs and expenses incurred by the Buyer and the Agent (or the Buyer or the Agent, as the case may be) with respect to Purchased Items under this Repurchase Agreement, including, but not limited to, those costs and expenses incurred by the Buyer pursuant to Sections 14.04(a), 14.06 and 14.23 hereof. The Seller also agrees not to assert any claim against the Buyer and the Agent (or the Buyer or the Agent, as the case may be) 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 Repurchase Documents, the actual or proposed use of the proceeds of the Transactions, this Repurchase Agreement or any of the transactions contemplated hereby or thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
(d) If the Seller fails to pay when due any costs, expenses or other amounts payable by it under this Repurchase Agreement, including, without limitation, reasonable fees and expenses of counsel and indemnities, such amount may be paid on behalf of the Seller by the Buyer and the Agent (or the Buyer or the Agent, as the case may be) (including without limitation by the Buyer netting such amount from the proceeds of any Purchase Price paid by the Buyer to the Seller
hereunder), in its sole discretion and the Seller shall remain liable for any such payments by the Buyer. No such payment by the Buyer shall be deemed a waiver of any of the Buyer’s rights under the Repurchase Documents.
(e) Without prejudice to the survival of any other agreement of the Seller hereunder, the covenants and obligations of the Seller contained in this Section 14.04 shall survive the termination of this Repurchase Agreement, the payment in full of the Repurchase Price and all other amounts payable hereunder and delivery of the Purchased Loans by the Buyer against full payment therefor.
(f) This Section 14.04 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
14.05 Waiver of Redemption and Deficiency Rights. The 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 Items as a result of restrictions upon the Buyer, the Agent or Custodian contained in the Repurchase Documents or any other instrument delivered in connection therewith, and any right that it may have to direct the order in which any of the Purchased Items shall be disposed of in the event of any disposition pursuant hereto.
14.06 Reimbursement. All sums reasonably expended by the Buyer and the Agent (or the Buyer or the Agent, as the case may be) in connection with the exercise of any right or remedy provided for herein shall be and remain the Seller’s obligation (unless and to the extent that the Seller is the prevailing party in any dispute, claim or action relating thereto). The Seller agrees to pay, with interest at the Post-Default Rate to the extent that an Event of Default has occurred, the reasonable out-of-pocket expenses and reasonable attorneys’ fees incurred by the Buyer and/or Custodian in connection with the preparation, negotiation, enforcement (including any waivers), administration and amendment of the Repurchase 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 the Buyer and/or Custodian pursuant thereto, any “due diligence” or loan agent reviews conducted by the Buyer or on its behalf or by refinancing or restructuring in the nature of a “workout”; provided, that notwithstanding the foregoing, due diligence costs and expenses of the Buyer and fees and expenses of the Buyer’s outside counsel, in each case, incurred but not paid prior the occurrence of an Event of Default shall not accrue interest at the Post-Default Rate.
14.07 Termination and Survival. This Repurchase Agreement shall remain in effect until the Termination Date. However, no such termination shall affect the Seller’s outstanding obligations to the Buyer at the time of such termination. The Seller’s obligations under Section 3.03, Section 4.12, Section 6, Section 7, Section 14.04 and Section 14.06 and any other reimbursement or indemnity obligation of the Seller to the Buyer pursuant to this Repurchase Agreement or any other Repurchase Documents shall survive the payment of the Repurchase Obligations relating to all Transactions and the termination of this Repurchase Agreement. In addition, each representation and warranty made or deemed to be made by a request for a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and the Buyer shall not be deemed to have waived, by reason of making any Transaction, any Default that may arise because any such representation or warranty shall have proved to be
false or misleading, notwithstanding that the Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such Transaction was made.
14.08 Severability. If any provision of any Repurchase Document is declared invalid by any court of competent jurisdiction, such invalidity shall not affect any other provision of the Repurchase Documents, and each Repurchase Document shall be enforced to the fullest extent permitted by law.
14.09 Amendments and Waivers.
Except as otherwise expressly provided in this Repurchase Agreement, any provision of this Repurchase Agreement may be modified or supplemented only by an instrument in writing signed by the Seller, the Buyer and the Agent. A waiver of any provision of this Repurchase Agreement may be made only in writing and approved by the Buyer, in its sole discretion, and if approved.
Neither this Repurchase Agreement nor any other Repurchase Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 14.09. The Buyer and the Agent (or the Buyer or the Agent, as the case may be) may, from time to time, (a) enter into with the Seller written amendments, supplements or modifications hereto and to the other Repurchase Documents for the purpose of adding any provisions to this Repurchase Agreement or the other Repurchase Documents or changing in any manner the rights of the Buyer or of the Seller hereunder or thereunder or (b) waive, on such terms and conditions as the Buyer and the Agent (or the Buyer or the Agent, as the case may be) may specify in such instrument, any of the requirements of this Repurchase Agreement or the other Repurchase Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall:
(i) reduce the amount or extend the scheduled date of maturity of any Transaction or of any payment made in respect thereof, or reduce the stated rate of any interest or fee payable hereunder or extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of this Repurchase Agreement or any Transaction, in each case without the consent of the Buyer and the Agent (or the Buyer or the Agent, as the case may be), or
(ii) amend, modify or waive any provision of this Section 14.09 or consent to the assignment or transfer by the Seller of any of its rights and obligations under this Repurchase Agreement and the other Repurchase Documents or release all or substantially all of the Purchased Items (except in accordance with this Repurchase Agreement upon repayment of all amounts owing under the Repurchase Documents in respect thereof), in each case without the written consent of the Buyer and the Agent (or the Buyer or the Agent, as the case may be);
provided, that any waiver, amendment, supplement or modification shall apply to the Buyer and shall be binding upon the Seller, the Buyer, the Agent and their respective permitted successors and assigns and, in the case of any waiver, the Seller, the Buyer and the Agent shall be restored to their former positions and rights hereunder and under the other Repurchase Documents, and any
Default or Event of Default waived shall be deemed to be cured and not continuing, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.
14.10 Assignments and Participations.
(a) With the prior written consent of the Seller, the Buyer may assign to one or more Persons all or a portion of its rights and obligations under this Repurchase Agreement; provided, however, that in the case of any such assignment to an Affiliate of the Buyer or upon the occurrence of any Event of Default (that has not been waived), the Seller’s written consent shall not be required, but the Buyer shall provide the Seller prompt written notice of any such assignment; provided, further, that the parties to each such assignment shall execute and deliver an Assignment and Acceptance substantially in the form of Exhibit Error! Reference source not found., with appropriate completions (an “Assignment and Acceptance”).
(b) Upon such execution and delivery, from and after the effective date specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of the Buyer hereunder, (ii) the Buyer assignor thereunder shall, to the extent that any rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Repurchase Agreement, and (iii) the Seller shall bear no additional costs or expenses solely resulting from such assignment.
(c) With the prior written consent of the Seller, the Buyer may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Repurchase Agreement; provided, however, that in the case of any such sale of a participation to an Affiliate of the Buyer or upon the occurrence of any Event of Default (that has not been waived), the Seller’s written consent shall not be required, but the Buyer shall provide the Seller prompt written notice of any such participation sale; provided, further, that (i) the Buyer’s obligations under this Repurchase Agreement shall remain unchanged, (ii) the Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Seller shall continue to deal solely and directly with the Buyer in connection with the Buyer’s rights and obligations under and in respect of this Repurchase Agreement and the other Repurchase Documents, and (iv) the Seller shall bear no additional costs or expenses solely resulting from such sale of a participation. Notwithstanding the terms of Section 3.03 (without duplication of such amounts paid to the Buyer), each participant of the Buyer shall be entitled to the additional compensation and other rights and protections afforded the Buyer under Section 3.03 to the same extent as the Buyer would have been entitled to receive them with respect to the participation sold to such participant. No participant shall not be entitled to receive any greater payment under Section 3.01 or Section 4.12, with respect to any participation, that the Buyer would have been entitled to receive under the terms of this Agreement.
(d) The Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 14.10, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to the Seller or any of its Subsidiaries or to any aspect of the Transactions that has been furnished to the
Buyer by or on behalf of the Seller or any of its Subsidiaries. The Buyer (or the Agent, acting solely for this purpose as an agent of the Seller), shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Buyer(s), and the commitments of, and principal amounts (and stated interest) of the obligations owing to, each Buyer pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Buyer, the Agent and the 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 Repurchase Agreement. The Register shall be available for inspection by the Buyer and Seller, at any reasonable time and from time to time upon reasonable prior notice. Each Buyer that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Seller, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Purchased Loans or other obligations under the Repurchase Documents (the “Participant Register”); provided that no 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 Repurchase Agreement) to any person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Buyer shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Repurchase Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.
(e) The Buyer may at any time create a security interest in all or any portion of its rights under this Repurchase Agreement (including, without limitation, the Repurchase Obligations owing to it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the assigning the Buyer from its obligations hereunder.
(f) Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default, the Buyer may assign all or any portion of its rights and obligations hereunder to any Person, provided that upon the effective date of such assignment such Person shall become a party hereto and the Buyer hereunder and shall be (A) entitled to all the rights, benefits and privileges accorded the Buyer under the Repurchase Documents, and (B) subject to all the duties and obligations of the Buyer under the Repurchase Documents.
14.11 Successors and Assigns. This Repurchase Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The Seller may not assign any of its rights or obligations hereunder without the prior written consent of the Buyer.
14.12 Reserved.
14.13 Captions. The table of contents and captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Repurchase Agreement.
14.14 Counterparts. This Repurchase Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Repurchase Agreement by signing any such counterpart.
14.15 Governing Law; Repurchase Agreement Constitutes Security Agreement. This Repurchase Agreement and any claim, controversy or dispute arising under or related to or in connection with this Repurchase Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York and shall constitute a security agreement within the meaning of the Uniform Commercial Code.
14.16 Reserved.
14.17 Electronic Signatures. The parties agree that this Repurchase Agreement, any documents to be delivered pursuant to this Repurchase Agreement and any notices hereunder may be transmitted between them by e-mail or electronically through Buyer’s FTP site. The parties intend that electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. Each party shall send to the other original signatures for any document that is transmitted by e-mail.
14.18 Submission To Jurisdiction; Waivers. Each of the Seller, the Agent and the Buyer hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS REPURCHASE AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) 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 UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED; AND
(D) 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.
14.19 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, EACH OF THE SELLER, THE AGENT AND THE 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 REPURCHASE AGREEMENT, ANY OTHER REPURCHASE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.20 Acknowledgments. Each of the Seller, the Buyer and the Agent hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Repurchase Agreement and the other Repurchase Documents;
(b) the Buyer and the Agent have no fiduciary relationship to the Seller, and the relationship between the Seller, on the one hand, and the Buyer (and the Agent of the Buyer, as applicable), on the other hand, is solely that of the Seller and the Buyer (and the Agent of the Buyer, as applicable); and
(c) no joint venture exists between the Buyer (including the Agent) and the Seller.
14.21 Hypothecation or Pledge of Purchased Items. Subject to the Buyer’s obligation to reconvey the related Purchased Loans on the applicable Repurchase Date, the Buyer, in its sole election and without the Seller’s consent, shall have free and unrestricted use of all of the Purchased Items and nothing in this Repurchase Agreement shall preclude the Buyer from engaging in repurchase transactions with the Purchased Items or otherwise selling, pledging, repledging, transferring, assigning, hypothecating, rehypothecating or otherwise conveying the Purchased Items. Nothing contained in this Repurchase Agreement shall obligate the Buyer to segregate any Purchased Items delivered to the Buyer by the Seller. Notwithstanding anything to the contrary in this Repurchase Agreement, nothing in this Repurchase Agreement shall prevent or prohibit the Buyer from pledging its interest in the Purchased Items hereunder to a Federal Reserve Bank in support of borrowings made by the Buyer from such Federal Reserve Bank.
14.22 Servicing.
(a) With respect to the Servicing Rights appurtenant to each Purchased Loan, the Buyer shall own, and the Seller shall deliver, such Servicing Rights to the Buyer on the related Purchase Date. The Seller covenants to maintain or cause the servicing of the Purchased Loans to be maintained in conformity with Accepted Servicing Practices. The Seller and the Buyer hereby
agree and confirm that from and after the date hereof, only such Servicing Agreements that have been approved by Buyer shall govern the servicing of the Purchased Items and any prior agreement between the Seller and any other Person or otherwise with respect to such servicing is hereby superseded in all respects. Provided that the Buyer shall have received a duly executed Servicer Notice, prior to an Event of Default that has not been waived, the Seller may retain a Servicer, on behalf of the Buyer, to service the Purchased Items for the benefit of or on behalf of the Buyer; provided, however, that the obligation of such Servicer to service any Purchased Items for the benefit of or on behalf of Buyer as aforesaid shall cease upon the repurchase of such Purchased Items Loan by Seller in accordance with the provisions of this Repurchase Agreement or as otherwise provided in the Servicer Notice In the event that the preceding language is interpreted as constituting one or more servicing contracts, each such servicing contract and the related Servicing Rights shall terminate automatically upon the earliest of (i) an Event of Default, (ii) [***] after the Effective Date, and every [***] thereafter, in each case, unless the Seller receives written notice of non-termination from the Buyer prior to the end of such [***] period, (iii) the date on which all the Repurchase Obligations have been paid in full or (iv) the transfer of servicing approved by the Seller. Upon any such termination, Seller shall comply with the requirements set forth in Section 7.31 as to the delivery of the Servicing Records and the physical servicing of each Purchased Loan.
(b) Upon any termination of the Seller, or Servicer as the servicer, the Seller shall deliver (or cause the related Servicer to deliver) the Servicing Records (as defined below) and, to the extent applicable, the physical and contractual servicing of each Purchased Item to the Buyer or its designee within thirty (30) days of such termination of the Seller, or Servicer as the servicer. The Seller’s, or Servicer’s transfer of the Servicing Rights, Servicing Records and the physical and contractual servicing shall be in accordance with customary standards in the industry and such transfer shall include the transfer of the gross amount of all escrows held for the related mortgagors (without reduction for unreimbursed advances or “negative escrows”).
(c) During the period the Seller or Servicer is servicing the Purchased Loans, (i) the Seller agrees that the Buyer is the owner of the Servicing Rights and all 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 Purchased Loans (the “Servicing Records”), and (ii) the Seller grants the Buyer a security interest in all servicing fees and rights relating to the Purchased Loans and all Servicing Records to secure the obligation of the Seller or its designee to service in conformity with this Section 14.22 and any other obligation of the Seller to the Buyer. At all times during the term of this Repurchase Agreement, the Seller covenants to hold such Servicing Records in trust for the Buyer and to safeguard, or cause each Servicer to safeguard, such Servicing Records and to deliver them, or cause any such Servicer to deliver them to the extent permitted under the related Servicing Agreement promptly to the Buyer or its designee (including Custodian) at the Buyer’s request or otherwise as required by operation of Section 7.31 hereof. It is understood and agreed by the parties that prior to an Event of Default, the Seller, as servicer shall retain the servicing fees with respect to the Purchased Loans.
(d) If the Purchased Loans are, at any time during the term of this Repurchase Agreement, serviced by a third party servicer (such third party servicer, the “Servicer”), such
Servicer must be acceptable to RHS, Fannie Mae, Freddie Mac, FHA or VA, as applicable, and each Seller (i) shall provide a copy of the servicing agreement to the Buyer, which shall be in form and substance acceptable to the Buyer (the “Servicing Agreement”), and (ii) shall provide a Servicer Notice and Agreement to the Servicer substantially in the form of Exhibit Error! Reference source not found. hereto (a “Servicer Notice and Agreement”) and shall cause the Servicer to acknowledge and agree to the same. Any successor or assignee of a Servicer shall be approved in writing by the Buyer and shall acknowledge and agree to a Servicer Notice and Agreement prior to such successor’s assumption of servicing obligations with respect to the Mortgage Loans. Any transfer of servicing of Mortgage Loans to any Servicer in accordance with this Section 14.22(d), shall be subject to the Buyer’s ownership and security interest in the Servicing Rights, (including, without limitation, the security interest created under Section 4.01(b)), the Buyer’s security interest in any payments received or to be received by the Seller in connection with such transfer or to any payments of any kind with respect to the Mortgage Loans being serviced by the Servicer and such transfer shall be subject to the Buyer’s right to terminate the Servicing Agreement with such transferee and to cause such transferee to transfer the servicing rights to the Buyer’s designee, in each case as more particularly set forth in this Section 14.22(d).
(e) If the servicer of the Purchased Loans is the Seller or the Servicer is an Affiliate of the Seller, the Seller shall provide to the Buyer a letter from the Seller or the Servicer, as the case may be, to the effect that upon the occurrence of an Event of Default that has not been waived, the Buyer may terminate any Servicing Agreement and in any event transfer servicing to the Buyer’s designee, at no cost or expense to the Buyer, it being agreed that the Seller will pay any and all fees required to terminate the Servicing Agreement and to effectuate the transfer of servicing to the designee of the Buyer.
(f) In addition to the rights provided in Section 14.22(a), the Buyer shall have the right, exercisable at any time in its sole discretion, upon sixty (60) days prior written notice, to the Seller or the Servicer, as applicable, to terminate the Seller or any Servicers as servicer, respectively, of any Purchased Loans and any related Servicing Agreement. Upon any such termination, the Seller shall transfer or shall cause Servicer to transfer such servicing with respect to such Purchased Loans to the Buyer or its designee, at no cost or expense to the Buyer. The Seller agrees to cooperate with the Buyer in connection with the transfer of servicing.
(g) After the Purchase Date for any Purchased Loan, until such Purchased Loan is repurchased by the Seller and possession thereof is relinquished by the Custodian, the Seller will have no right to modify or alter the terms of such Purchased Loan and the Seller will have no obligation or right to repossess such Purchased Loan or substitute another Purchased Loan, except as provided in the Custodial and Disbursement Agreement.
(h) In the event the Seller or its Affiliate is servicing the Purchased Loans, the Seller shall permit the Buyer from time to time to inspect the Seller’s or its Affiliate’s servicing facilities, as the case may be, for the purpose of satisfying the Buyer that the Seller or its Affiliate, as the case may be, has the ability to service the Purchased Loans as provided in this Repurchase Agreement.
(i) The Buyer shall have the right in its sole discretion to appoint a third party to perform due diligence with respect to the Seller’s servicing facilities at any time. The Seller
shall cooperate with the Buyer and/or its designees to provide access to the Seller’s servicing facilities including without limitation its books and records with respect to the Seller’s servicing portfolio and the Purchased Loans. In addition to the foregoing, the Seller shall permit the Buyer to inspect upon reasonable prior written notice at a mutually convenient time, the Seller’s or its Affiliate’s servicing facilities, as the case may be, for the purpose of satisfying the Buyer that the Seller or its Affiliate, as the case may be, has the ability to service the Mortgage Loans as provided in this Repurchase Agreement. In addition, with respect to any Servicer which is not an Affiliate of the Seller, the Seller shall use its best efforts to enable the Buyer to inspect the servicing facilities of such Servicer and to cause such Servicer to cooperate with the Buyer and/or its designees in connection with any due diligence performed by the Buyer and/or such designees in accordance with this Section 14.22(i). The Seller and the Buyer further agree that all reasonable out-of-pocket costs and expenses incurred by the Buyer in connection with any due diligence or inspection performed pursuant to this Section 14.22(i) shall be paid by the Buyer.
14.23 Periodic Due Diligence Review.
(a) Purchased Loans. The Seller acknowledges that the Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Loans and the manner in which they were originated, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and the Seller agrees that, unless an Event of Default has occurred and has not been waived (in which case no notice is required), upon reasonable (but no less than [***]) prior notice to the Seller, the Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Mortgage Files in the possession or under the control of the Seller and/or the Custodian; provided, that prior to the occurrence of an Event of Default hereunder, Buyer shall be entitled to conduct an on-site due diligence review no more than one (1) time per calendar year, or such additional times with the consent of Seller, in each case, at the expense of the Seller. The Seller also shall make available to the Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Mortgage Loans. Without limiting the generality of the foregoing, the Seller acknowledges that the Buyer may make Transactions to the Seller based solely upon the information provided by the Seller to the Buyer in the Mortgage Loan Data File and the representations, warranties and covenants contained herein, and that the Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Loans relating to such Transaction, including without limitation ordering new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan. The Buyer may underwrite such Purchased Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. The Seller agrees to cooperate with the Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing the Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Loans in the possession, or under the control, of the Seller.
(b) The Seller. The Seller acknowledges that the Buyer has the right to perform due diligence reviews of the Seller’s operations, including, but not limited to, a review of (1) the financial condition of the Seller, (2) loan origination and servicing guidelines, and (3) other
corporate due diligence matters at the discretion of the Buyer. In connection therewith, the Seller agrees that upon reasonable (but no less than three (3) Business Day’s) prior written notice to the Seller (provided, that if an Event of Default has occurred and is continuing, no such notice shall be required), the Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of all documents, records, agreements, instruments or information relating to the Seller which are in possession or under the control of the Seller, as the Buyer may reasonably request; provided, that prior to the occurrence of an Event of Default has occurred and has not been waived, Buyer shall be entitled to conduct an on-site due diligence review no more than one (1) time per calendar year, or such additional times with the consent of seller, in each case, at the expense of the Seller. The Seller shall also make available to the Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the financial condition of the Seller and make available to the Buyer an officer of the Seller for the purpose of answering questions respecting other corporate due diligence matters.
(c) Fees and Expenses. The Seller further agrees that the Seller shall reimburse the Buyer for any and all out-of-pocket costs and expenses in an amount not to exceed [***], in the aggregate, in any calendar year, incurred by the Buyer in connection with their activities pursuant to this Section 14.23 within thirty (30) days following receipt of an invoice therefor from the Buyer; provided that upon the occurrence of an Event of Default that has not been waived, the foregoing [***] limitation shall not apply.
14.24 [Reserved].
14.25 Set-Off. The Seller hereby acknowledges, admits and agrees that the Seller’s obligations under this Repurchase Agreement are recourse obligations of the Seller to which the Seller pledges its full faith and credit. In addition to any rights and remedies of the Buyer, the Agent and any of their Affiliates (or the Buyer or the Agent or any of their Affiliates, as the case may be) provided by this Repurchase Agreement and by law, the Buyer, the Agent and any of their Affiliates (or the Buyer or the Agent or any of their Affiliates, as the case may be) shall have the right, solely after an Event of Default that has not been waived, and without prior notice to the Seller, any such notice being expressly waived by the Seller to the extent permitted by applicable law, upon any amount becoming due and payable by the Seller hereunder (without giving effect to any grace period, and whether at the stated maturity, by acceleration or otherwise), to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness, amounts or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Buyer, the Agent or any of their Affiliates (or the Buyer or the Agent or any of their Affiliates, as the case may be) to or for the credit or the account of the Seller under the Repurchase Agreement or any other agreement between the Seller or its Affiliates on the one hand and the Buyer, the Agent or any of their Affiliates on the other, whether or not such obligations are then due, without prejudice to the Agent’s or the Buyer’s or any of their Affiliate’s right to recover any deficiency. For the avoidance of doubt, and without limitation, the Seller acknowledges and agrees that any proceeds or amounts under any agreement between Seller on the one hand, and the Buyer, the Agent or any of their Affiliates on the other, which exceed the amount due under such agreement, shall be available to satisfy any obligations of the Seller which are owed to the Buyer or the Agent or their Affiliate under this Agreement or any other agreement between Seller on the one hand, and the Buyer, the Agent or any of their
Affiliates on the other. The Buyer, the Agent and any of their Affiliates (or the Buyer or the Agent or any of their Affiliates, as the case may be) agree promptly to notify the Seller after any such set-off and application made by the Buyer, the Agent and any of their Affiliates (or the Buyer or the Agent or any of their Affiliates, as the case may be); provided that the failure to give such notice shall not affect the validity of such set-off and application
14.26 Single Agreement. The Seller, the Agent and the Buyer 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, the Seller, the Agent and the Buyer 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.
14.27 Intent.
(a) Seller, Buyer 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 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 Loan constitutes either a “mortgage loan” or “an interest in a mortgage” as such terms are used in the Bankruptcy Code; and (iv) the pledge of the Related Credit Enhancement in Section 4.01(c) 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, Buyer and Agent further intend and acknowledge that (i)(1) for so long as Buyer 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, Buyer shall be entitled to, without limitation, the liquidation, termination, acceleration, netting, set-off, and non-avoidability rights afforded to parties such as Buyer 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) Buyer’s right to liquidate the Purchased Loans 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 9 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 applicable, and (ii) Buyer’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 Buyer to or for the credit of the account of any Affiliate against and on account of the obligations and liabilities of Seller pursuant to Section 14.25 hereof is a contractual right as described in Bankruptcy Code Sections 553 and 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 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 statement thereunder.
(d) It is understood and agreed Seller, Buyer 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, Buyer and Agent agree that this Agreement is intended to create mutuality of obligations among the parties, and as such, the Agreement constitutes a contract that (i) is between all of the parties and (ii) places each party in the same right and capacity.
14.28 Confidentiality.
(a) The Repurchase Documents and their respective terms, provisions, supplements and amendments, and transactions and notices thereunder, are proprietary to the Seller, the Buyer and the Agent and shall be held by each such party in strict confidence and shall not be disclosed to any third party without the consent of the other parties except for (i) disclosure to such party’s Affiliates, directors, attorneys, agents or accountants (the “Representatives”), provided that such party shall (A) inform each of its Representatives receiving any Repurchase Documents of the confidential nature of the Repurchase Documents, (B) direct its Representatives
to treat the Repurchase Documents confidentially, and (C) be responsible for any improper use of the Repurchase Documents by such party or its Representatives or (ii) upon prior written notice to the other parties, if permitted by law, disclosure required by law, rule, regulation or order of a court or other regulatory body or (iii) upon prior written notice to the other parties, disclosure to any approved hedge counterparty to the extent necessary to obtain any Interest Rate Protection Agreement hereunder or (iv) any disclosures or filing required under Securities and Exchange Commission (“SEC”) or state securities’ laws; provided that in the case of disclosure by any party pursuant to the foregoing clauses (ii), (iii) or (iv), such party shall provide the other parties with prior written notice to permit such parties to seek a protective order to take other appropriate action; provided further that in the case of clause (iv), such party shall not file any of the Repurchase Documents other than the Repurchase Agreement with the SEC or state securities office unless such party shall have provided at least thirty (30) days (or such lesser time as may be demanded by the SEC or state securities office) prior written notice of such filing to the other parties, and provided further that the notice in clause (ii) above shall not be required in the case of disclosures required by a Governmental Authority (including, for the avoidance of doubt, bank and securities examiners). Such party shall use its commercially reasonable efforts to cooperate in the other parties’ efforts to obtain a protective order or other reasonable assurance that confidential treatment will be accorded the Repurchase Documents. If, in the absence of a protective order, such party or any of its Representatives is compelled as a matter of law to disclose any such information, such party may disclose to the party compelling disclosure only the part of the Repurchase Documents as is required by law to be disclosed (in which case, prior to such disclosure, such party shall use its commercially reasonable efforts to advise and consult with the other parties and its counsel as to such disclosure and the nature and wording of such disclosure) and such party shall use its commercially reasonable best efforts to obtain confidential treatment therefor. The parties hereto acknowledge that this Repurchase Agreement may be filed with the SEC; provided that, the disclosing party shall redact any pricing and other confidential provisions, including, without limitation, the amount of any fees, Commitment Fee, Non-Utilization Fee, Applicable Pricing Spread and Applicable Purchase Rate from such filed Agreement.
(b) Notwithstanding anything in this Repurchase Agreement to the contrary, each party shall, with respect to the Mortgage Loans and/or any applicable terms of this Agreement (the “Confidential Information”) comply with all privacy and data protection law, rules and regulations that are applicable to the Confidential Information comprised of “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “GLB Act”), and each such party 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.
(c) Notwithstanding anything else herein, nothing in this Repurchase Agreement shall require any party to provide any notice, information, investigation, audit, correspondence, or any other communication (collectively, “Information”) to any other party if providing such Information is prohibited by applicable Laws, or if such party is required not to disclose such Information by any Governmental Authority or any Agency.
14.29 Entire Agreement. This Repurchase Agreement and the other Repurchase Documents embody the entire agreement and understanding of the parties hereto and thereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein and therein. No alteration, waiver, amendments, or change or supplement
hereto shall be binding or effective unless the same is set forth in writing by a duly authorized representative of each party hereto. This Repurchase Agreement and the other Repurchase Documents represent the agreement of the Buyer, the Agent and the Seller with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Buyer or the Agent relative to the subject matter hereof or thereof not expressly set forth or referred to herein or in the other Repurchase Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Repurchase Agreement to be duly executed and delivered as of the day and year first above written.
SELLER | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | /s/ Maria Fregosi | |
Maria Fregosi, Chief Financial Officer | ||
Address for Notices: | ||
2211 Old Earhart Road, Suite 250 | ||
Ann Arbor, MI 48105 | ||
Attention: [***] | ||
Telephone: [***] | ||
E-mail: [***] | ||
With a copy to: | ||
Legal | ||
E-mail: [***] |
Master Repurchase Agreement and Securities Contract
BUYER | ||
MORGAN STANLEY BANK, N.A. | ||
By: | /s/ Michael A. Calandra, Jr. | |
Title: Michael A. Calandra, Jr. | ||
Authorized Signatory | ||
Address for Notices: | ||
1585 Broadway | ||
New York, New York 10036 | ||
Attention: SPG Mortgage Finance | ||
Facsimile No.: [***] | ||
Telephone No.: [***] | ||
With a copy to: | ||
One Utah Center, | ||
201 South Main Street | ||
Salt Lake City, Utah 84111 | ||
AGENT | ||
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC | ||
By: | /s/ Christopher Schmidt | |
Title: Christopher Schmidt | ||
Authorized Signatory | ||
Address for Notices: | ||
1585 Broadway | ||
New York, New York 10036 | ||
Attention: SPG Mortgage Finance | ||
Facsimile No.: [***] | ||
Telephone No.: [***] |
[Signature Page – MS-Home Point Master Repurchase Agreement]
Schedule 1
REPRESENTATIONS AND WARRANTIES RE: ELIGIBLE MORTGAGE LOANS
As to each Mortgage Loan that is a Purchased Loan subject to any Transaction outstanding on a Purchase Date (and the related Mortgage, Mortgage Note, Assignment of Mortgage and Mortgaged Property), the Seller shall be deemed to make the following representations and warranties to the Buyer as of such date and at all times a Purchased Loan is subject to a Transaction. With respect to any representations and warranties made to the best of the Seller’s knowledge, in the event that it is discovered that the circumstances with respect to the related Mortgage Loan are not accurately reflected in such representation and warranty notwithstanding that such representation and warranty is made to the best of the Seller’s knowledge, such Mortgage Loan shall be assigned a Recognized Value of zero.
(a) Mortgage Loans as Described. The information set forth in the Mortgage Loan Schedule with respect to the Mortgage Loan is true and correct in all material respects.
(b) Payments Current. All payments required to be made up to the Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have been made and credited. No payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent 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 no later than the last day of the calendar month of the Due Date, all in accordance with the terms of the related Mortgage Note.
(c) No Outstanding Charges. There are no defaults in complying with the terms of the Mortgage securing the Mortgage Loan, and all Taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Neither the Seller nor the Qualified Originator from which the Seller acquired the Mortgage Loan 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 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.
(d) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of the Buyer, and which has been delivered to the Custodian and the terms of which are reflected in the Mortgage Loan Schedule. The substance of any such waiver, alteration or modification has been approved by the insurer under the Primary Insurance Policy, if any, and the title insurer, to the extent required, and, with respect to the FHA, RHS and VA Loans, has been approved by the FHA, to the extent required by the FHA Insurance Contract, the RHS to the extent required of the Rural Housing Service Guaranty or the VA, to the extent of the VA Guaranty
Agreement, and its terms are reflected on the Mortgage Loan Schedule. 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 insurer under the Primary Insurance Policy, if any, and the title insurer, to the extent required by such policy and with respect to any FHA Loan, the FHA to the extent required by the FHA Insurance Contract or FHA Regulations, or with respect to any VA Loan, the VA to the extent of the VA Guaranty Agreement, or with respect to any RHS Loan, the RHS to the extent of the Rural Housing Service Guaranty, and which assumption agreement is part of the Mortgage File delivered to the Custodian and the terms of which are reflected in the Mortgage Loan Schedule.
(e) 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 or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor in respect of the Mortgage Loan was a debtor in any state or Federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated, or with respect to the Mortgagor of any Prime Jumbo Mortgage Loan or Non-QM Mortgage Loan at any time during the two-year period prior to the related Origination Date. The 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. With respect to any Prime Jumbo Mortgage Loan or Non-QM Mortgage Loan, the Mortgagor has not owned a property at any time during the two-year period prior to the related Origination Date that has been subject of a foreclosure, deed-in-lieu or other similar proceeding.
(f) Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by the Seller as of the date of origination consistent with the Underwriting Guidelines, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than 100% of the replacement cost of all improvements to the Mortgaged Property and consistent with the amount that would have been required as of the date of origination in accordance with the Underwriting Guidelines. 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 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 the Seller, its successors and assigns (including without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without 30 days’ prior written notice to the mortgagee. No such notice has been received by the Seller. 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 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. The Seller has not engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by the Seller.
(g) Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, laws with respect to unfair and deceptive lending practices and Predatory Lending Practices 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 the Seller shall maintain or shall cause its agent to maintain in its possession, available for the inspection of the Buyer, and shall deliver to the Buyer, upon demand, evidence of compliance with all such requirements.
(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. The Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has the Seller waived any default resulting from any action or inaction by the Mortgagor.
(i) Location and Type of Mortgaged Property. The Mortgaged Property is located in an Acceptable State as identified in the Mortgage Loan Schedule and consists of a single parcel of real property with a dwelling which is acceptable to the related Agency pursuant to the applicable Agency Guide. No residence or dwelling is a mobile home or a manufactured dwelling. No portion of the Mortgaged Property is used for commercial purposes; provided that Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes. The Mortgage Loan is not secured by an industrial, agricultural, mixed use, undeveloped property, or by a condominium unit that was part of a condominium development that operated as, or held itself out to be, a condominium hotel, regardless of whether the unit itself was being used as a condotel unit.
(j) Valid First Lien. The Mortgage is a valid, subsisting, enforceable and perfected first lien on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to:
(1) the lien of current real property Taxes and assessments not yet due and payable;
(2) 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 to any applicable Agency, and specifically referred to in the lender’s title insurance policy delivered to the applicable Agency, and originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal; and
(3) 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, and which will not in any way prevent realization of the full benefits of any FHA Insurance Contract, VA Guaranty Agreement or Rural Housing Service Guaranty.
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 the Seller has full right to pledge and assign the same to the 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.
(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. The Seller has reviewed all of the documents constituting the Mortgage File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. For each Mortgage Loan with respect to which the related Mortgagor electronically executed any Mortgage Loan Document, received related disclosure electronically or otherwise engaged in an electronic transaction in connection with the origination of the related Mortgage Loan, the Mortgagor consented, as required pursuant to the Electronic Signatures in Global and National Commerce Act (“E-Sign Act”), Title 15, United States Code, Sections 7001 et seq., the Uniform Electronic
Transaction Act (“UETA”) and any applicable state law, to electronically execute any Mortgage Loan Document, receive related disclosure electronically and otherwise engage in an electronic transaction in connection with the origination of the related Mortgage Loan, as applicable. The Seller or any Qualified Originator, as applicable, complied in all material respects with the E-Sign Act, UETA and any applicable state law when collecting electronic signatures from, electronically distributing disclosure to and otherwise engaging in an electronic transaction with any Mortgagor, as applicable.
(l) Full Disbursement of Proceeds. The Mortgage Loan (unless it is an FHA §203(k) Loan) has been closed and the proceeds of the Mortgage Loan have been fully disbursed and there is no further requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.
(m) Ownership. The Seller is the sole owner and holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible and marketable title thereto, and has full right to transfer, pledge and assign the Mortgage Loan to the Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to assign, transfer and pledge each Mortgage Loan pursuant to this Repurchase Agreement and following the pledge of each Mortgage Loan, the Buyer will hold such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Repurchase Agreement.
(n) 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 all applicable Agency Guides, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state.
(o) LTV. No Agency Mortgage Loan has an LTV greater than the percentage permitted by Fannie Mae, Freddie Mac, Ginnie Mae, FHA or VA, as applicable. No Jumbo Mortgage Loan has an LTV greater than [***]. No Non-QM Mortgage Loan has an LTV greater than [***]. Each Mortgage Loan which is required to be subject to a Primary Insurance Policy pursuant to the Agency Guide of the applicable Agency is and will be subject to such a Primary Insurance Policy, issued by a Qualified Insurer, which insures that portion of the Mortgage Loan in excess of the portion of the Appraised Value of the Mortgaged Property as required by such Agency. All provisions of such Primary Insurance Policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. Any Mortgage subject to any such Primary Insurance Policy obligates the Mortgagor thereunder to maintain such insurance and to pay all premiums and charges in connection therewith. The Mortgage Interest Rate for the Mortgage Loan does not include any such insurance premium.
(p) Title Insurance. Other than each Cooperative Mortgage Loan, the Mortgage Loan is covered by either (i) an attorney’s opinion of title and abstract of title, the form and substance of which is 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 in accordance with the Underwriting Guidelines, with respect to each Agency Mortgage loan, acceptable to the applicable Agency, and with respect to FHA Loans, RHS Loans and VA Loans, the FHA, RHS or VA, as the case may be, and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae or Freddie Mac, as applicable, and with respect to FHA Loans, RHS Loans and VA Loans, the FHA, RHS or the VA, as the case may be, and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring the Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (1), (2) and (3) of paragraph (j) of this Schedule 1, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. The Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Repurchase Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including the Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by the Seller.
(q) 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 Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither the Seller nor its predecessors have waived any default, breach, violation or event of acceleration.
(r) Environmental Matters. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule, or regulation is an issue.
(s) No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(t) Location of Improvements; No Encroachments. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.
(u) Origination; Payment Terms. 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. Monthly Payments on the Mortgage Loan commenced no more than sixty (60) days after funds were disbursed in connection with the Mortgage Loan. The Mortgage Note Interest Rate is adjusted, with respect to adjustable rate Mortgage Loans, on each Interest Rate Adjustment Date to equal the Mortgage Note Index plus the Gross Margin (rounded up or down to the nearest .125%), subject to the Mortgage Note Interest Rate Cap. The Mortgage Note is payable on the first day of each month. Other than with respect to a Mortgage Loan identified on the related Mortgage Loan Schedule as an interest-only Mortgage Loan, the Mortgage Loan is payable in equal monthly installments of principal and interest, which installments of interest, with respect to adjustable rate Mortgage Loans, are subject to change due to the adjustments to the Mortgage Note Interest Rate on each Interest Rate Adjustment Date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty (30) years from commencement of amortization. With respect to each Mortgage Loan identified on the Mortgage Loan Schedule as an interest-only Mortgage Loan, the interest-only period shall not exceed ten (10) years (or such other period specified on the Mortgage Loan Schedule) and following the expiration of such interest-only period, the remaining Monthly Payments shall be sufficient to fully amortize the original principal balance over the remaining term of the Mortgage Loan and to pay interest at the related Mortgage Interest Rate. The term of any Mortgage Loan shall not exceed thirty (30) years.
(v) 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 foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage.
(w) Conformance with Underwriting Guidelines and Agency Standards. The Mortgage Loan was underwritten in accordance with the Underwriting Guidelines. The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac, Fannie Mae or Ginnie Mae, as applicable, and the Seller has not made any representations to a Mortgagor that are inconsistent with the mortgage instruments used.
(x) Occupancy of the Mortgaged Property or Cooperative Unit. As of the Purchase Date the Mortgaged Property or Cooperative Unit is lawfully occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. The Seller has not received notification from any Governmental Authority that the Mortgaged Property or Cooperative Unit 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. The Seller has not 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 Mortgage Property as the Mortgagor’s primary residence.
(y) No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (j) above.
(z) 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 the Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered under the Custodial and Disbursement Agreement for each Mortgage Loan (other than Wet-Ink Mortgage Loans) have been delivered to the Custodian. The Seller or its agent is in possession of a complete, true and accurate Mortgage File in compliance with the Custodial and Disbursement Agreement, except for such documents the originals of which have been delivered to the Custodian.
(bb) Transfer of Mortgage Loans. With respect to each Mortgage Loan other than a Cooperative Mortgage Loan, The Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located with respect to each Cooperative Mortgage Loan, the UCC-3 assignment is in a form suitable for filing in the jurisdiction in which the Mortgaged Property is located.
(cc) Due-On-Sale. The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property or Cooperative Unit, as applicable, is sold or transferred without the prior written consent of the Mortgagee thereunder.
(dd) No Buydown Provisions; No Graduated Payments or Contingent Interests. The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.
(ee) Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. With respect to each Mortgage Loan other than a Cooperative Mortgage Loan, the lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the Mortgagee’s consolidated interest or by other title evidence in accordance with the Underwriting Guidelines and, with respect to each Agency Mortgage Loan, acceptable to the related Agency. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.
(ff) Mortgaged Property Undamaged. The Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property or Cooperative Unit as security for the Mortgage Loan or the use for which the premises were intended and each Mortgaged Property is in good repair. There have not been any condemnation proceedings with respect to the Mortgaged Property and the Seller has no knowledge of any such proceedings.
(gg) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The origination and collection practices used by the originator, each servicer of the Mortgage Loan and the Seller with respect to the Mortgage Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper and each FHA Loan, RHS Loan and VA Loan has been serviced in accordance with all FHA, RHS and VA policies and regulations, as applicable. With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of, the Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and, where required under the applicable Underwriting Guidelines or requested by the related Mortgagor, (for Mortgage Loans other than Cooperative Mortgage Loans) has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due the Seller have been capitalized under the Mortgage or the Mortgage Note. All Mortgage Note Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited. The Mortgage Loan was originated and has been serviced in a manner such that the Mortgage Loan will be eligible for the maximum amount of insurance made available by the FHA, RHS or VA, as the case may be, without any right of offset, counterclaim or defense by the FHA, the RHS or VA, as the case may be.
(hh) Conversion to Fixed Interest Rate. With respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
(ii) Other Insurance Policies. No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, PMI Policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by the Seller or by any officer, director, or employee of the Seller or any designee of the Seller or any corporation in which the Seller or any officer, director, or employee had a financial interest at the time of placement of such insurance.
(jj) Servicemembers Civil Relief Act. The Mortgagor has not notified the Seller, and the Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003 (formerly known as the Soldiers’ and Sailors’ Civil Relief Act of 1940).
(kk) Appraisal. With respect to each Mortgage Loan for which the related Agency has not granted a property inspection waiver, the Mortgage File contains an appraisal of the related Mortgaged Property or Cooperative Unit signed prior to the approval of the Mortgage Loan application by a qualified appraiser, duly appointed by the Seller, who had no interest, direct or indirect in the Mortgaged Property or Cooperative Unit or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy (i) with respect to each Agency Mortgage Loan, the requirements of Fannie Mae, Freddie Mac, Ginnie Mae, FHA, RHS or VA, as applicable, and (ii) Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.
(ll) Disclosure Materials. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and the Seller maintains such statement in the Mortgage File.
(mm) Construction or Rehabilitation of Mortgaged Property. No Mortgage Loan (other than an FHA §203(k) 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.
(nn) No Defense to Insurance Coverage. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to the Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any PMI Policy (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of the Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.
(oo) Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.
(pp) No Equity Participation. No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and the Seller has not financed nor does it own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
(qq) 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 the Seller or any Affiliate or correspondent of the Seller except in connection with a refinanced Mortgage Loan where the original Mortgage Loan was held by the Seller.
(rr) Withdrawn Mortgage Loans. If the Mortgage Loan has been released to the Seller pursuant to a Request for Release as permitted under the Custodial and Disbursement Agreement, then the promissory note relating to the Mortgage Loan has been or will be returned to the Custodian within the time period required under the Custodial and Disbursement Agreement.
(ss) Origination Date. With respect to any Mortgage Loan originated by the Seller, the Origination Date is no earlier than [***] prior to the date the Mortgage Loan is first included as a Purchased Loan under the Repurchase Agreement. With respect to any Mortgage Loan originated by a Qualified Originator other than the Seller, the Origination Date is no earlier than [***] prior to the date the Mortgage Loan is first included as a Purchased Loan under the Repurchase Agreement.
(tt) No Exception. The Custodian has not noted any material exceptions on an Exception Report (as defined in the Custodial and Disbursement Agreement) with respect to the Mortgage Loan which would materially adversely affect the Mortgage Loan or the security interest granted by the Seller in the Mortgage Loan to the Buyer under the Repurchase Agreement.
(uu) Qualified Originator. The Mortgage Loan has been originated by a Qualified Originator.
(vv) 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.
(ww) Value of Mortgaged Property. Seller has no knowledge of any circumstances existing that should reasonably be expected to materially and adversely affect the value or the marketability of the Mortgaged Property or the Mortgage Loan or to cause the Mortgage Loan to prepay during any period materially faster or slower than the mortgage loans originated by Seller generally.
(xx) HOEPA. No Mortgage Loan is (a) subject to the provisions of the Homeownership and Equity Protection Act of 1994 as amended (“HOEPA”), (b) a “high cost” mortgage loan, “covered” mortgage loan, “high risk home” mortgage loan, or “predatory”
mortgage loan or any other comparable term, no matter how defined under any federal, state or local law, (c) subject to any comparable federal, state or local statutes or regulations, or any other statute or regulation providing for heightened regulatory scrutiny or assignee liability to holders of such mortgage loans, or (d) a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the current Standard & Poor’s LEVELS® Glossary Revised, Appendix E).
(yy) [Reserved].
(zz) [Reserved].
(aaa) Compliance with Subprime Statement. No Purchased Loan that is an adjustable rate Mortgage Loan and that has a residential loan application date on or after September 13, 2007, is subject to the Interagency Statement on Subprime Mortgage Lending, 72 FR 37569 (July 10, 2007) as defined by Fannie Mae in the Lender Letter 03-07 (August 15, 2007) or by Freddie Mac in Freddie Mac Single Family Advisory (September 7, 2007) and Freddie Mac Bulletin 2007-4);
(bbb) MERS Loans. With respect to each MERS Designated Mortgage Loan, a Mortgage Identification Number has been assigned by MERS and such Mortgage Identification Number is accurately provided on the Mortgage Loan Schedule. The related Assignment of Mortgage to MERS has been duly and properly recorded. With respect to each MERS Designated Mortgage Loan, the 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;
(ccc) No Prohibited Persons. To the best of the Seller’s knowledge, no Mortgagor is a Prohibited Person that is currently the subject of any OFAC-Administered Sanctions, nor is located, organized or resident in a country or territory that is the subject of OFAC-Administered Sanctions; and, to the best of the Seller’s knowledge, no Mortgagor will directly or indirectly lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Prohibited Person, to fund activities of or business with any Prohibited Person, or in any country or territory, that at the time of such funding or facilitation, is the subject of OFAC-Administered Sanctions, or in a manner that would otherwise cause any Prohibited Person (including any Prohibited Person involved in the Transactions under the Agreement) to violate any OFAC-Administered Sanctions;
(ddd) Cooperative Mortgage Loans. With respect to each Cooperative Mortgage Loan, the Seller represents and warrants:
(1) the Cooperative Mortgage Loan is secured by a valid, subsisting, enforceable and perfected first lien on the Cooperative Shares issued to the related Mortgagor with respect to such Cooperative Mortgage Loan. The lien of the Security Agreement is subject only to the Cooperative Corporation’s lien against such corporation stock, shares or membership certificate for unpaid assessments of the Cooperative Corporation to the extent required by applicable law. Any Security Agreement, chattel mortgage or equivalent document related to and delivered in connection with the Cooperative Mortgage Loan establishes and creates a valid, subsisting and enforceable first lien and first priority security interest on the
property described therein and the Seller has full right to sell and assign the same to the Buyer. The Cooperative Unit was not, as of the date of origination of the Cooperative 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 Security Agreement.
(2) (i) the term of the related Proprietary Lease is longer than the term of the Cooperative Mortgage Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Cooperative Shares owned by such Mortgagor first to the Cooperative, (iii) there is no prohibition in any Proprietary Lease against pledging the Cooperative Shares or assigning the Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement published by the Aztech Document Systems, Inc. or includes provisions which are no less favorable to the lender than those contained in such agreement.
(3) There is no proceeding pending or threatened for the total or partial condemnation of the building owned by the applicable Cooperative Corporation (the “Underlying Mortgaged Property”). The Underlying Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Underlying Mortgaged Property as security for the mortgage loan on such Underlying Mortgaged Property (the “Cooperative Mortgage”) or the use for which the premises were intended.
(4) There is no default, breach, violation or event of acceleration existing under the Cooperative Mortgage or the mortgage note related thereto and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration.
(5) The Cooperative Corporation has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its formation. The Cooperative Corporation has requisite power and authority to (i) own its properties, and (ii) transact the business in which it is now engaged. The Cooperative Corporation possesses all rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle it to own its properties and to transact the businesses in which is now engaged.
(6) The Cooperative Corporation complies in all material respects with all applicable legal requirements. The Cooperative Corporation is not in default or violation of any order, writ, injunction, decree or demand of any governmental authority, the violation of which might materially adversely affect the condition (financial or otherwise) or business of the Cooperative Corporation.
(7) The Seller has delivered to the Buyer or its designee each of the following documents (collectively, the “Cooperative Loan Documents”): (i) the Cooperative Mortgage Note, duly endorsed in accordance with the endorsement
requirements for Mortgage Notes set forth in this Repurchase Agreement, (ii) the Security Agreement, (iii) the Cooperative Shares accompanied by a stock power which authorizes the Buyer to transfer the Cooperative Shares in the event of a default under the Cooperative Loan Documents, (iv) the Proprietary Lease or occupancy agreement, accompanied by an assignment in blank of such Proprietary Lease, (v) a recognition agreement executed by the Cooperative Corporation, which requires the Cooperative Corporation to recognize the rights of the lender and its successors in interest and assigns, under the Cooperative Mortgage Loan, accompanied by an assignment of such recognition agreement in blank, (vi) UCC-1 financing statements with recording information thereon from the appropriate state and county recording offices if necessary to perfect the security interest of the Cooperative Mortgage Loan under the Uniform Commercial Code in the state in which the Cooperative Project is located, accompanied by UCC-3 financing statements executed in blank for recordation of the change in the secured party thereunder, and (vii) any guarantees, if applicable. The Cooperative Loan Documents are assignable to the Buyer and its successors and assigns and have been duly assigned to the Buyer in accordance with this sub-section (7).
(8) The Security Agreement contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Cooperative Shares of the benefits of the security provided thereby.
(9) As of the date of origination the related Cooperative Project is insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Cooperative Project is located.
(eee) FHA/VA/ RHS Loans. With respect to each FHA Loan and VA Loan, the Seller represents and warrants:
(1) All parties which have had any interest in an FHA Loan, RHS Loan or a VA Loan, whether as mortgagee or assignee, are (or, during the period in which they held and disposed of such interest, were) an FHA Approved Mortgagee, Rural Housing Service Approved Lender or VA Approved Lender;
(2) The Mortgage is either guaranteed by the VA or the RHS to the maximum extent permitted by law or is fully insured by the FHA and all necessary steps have been taken to make and keep such guaranty or insurance valid, binding and enforceable and the applicable insurance or guaranty agreement is the binding, valid and enforceable obligation of the FHA, RHS or VA, as the case may be, to the full extent thereof, without surcharge, set-off or defense;
(3) In the case of an FHA Loan, no claim for insurance benefits, full or partial, has been filed with respect to such Mortgage Loan and, in the case of a VA Loan or RHS Loan, no claim for guarantee has been filed;
(4) No Mortgage Loan is (a) an active subsidy loan originated under the 203K program (24 C.F.R. 203.50), a Section 235 subsidy loan (24 C.F.R. 235), or a graduated loan under Section 245 (24 C.F.R. 203.45 and 24 C.F.R. 203.436), (b) an advance claim loan, or (c) a VA Vendee loan;
(5) Neither the Seller, its servicer, nor any prior holder or servicer of the Mortgage Loan has engaged in any action or inaction which would result in the curtailment of a payment (or nonpayment thereof) by the FHA, RHS or the VA; and
(6) All actions required to be taken by the Seller or the related Qualified Originator (if different from the Seller) to cause the Buyer, as owner of the FHA Loan, VA Loan or RHS Loan, to be eligible for the full benefits available under the applicable insurance or guaranty agreement have been taken by such entity.
(fff) Qualified Mortgage. Each Mortgage Loan that is an Agency Mortgage Loan is a Qualified Mortgage.
(ggg) Closing Protection Letter. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan (other than any such Mortgage Loan originated in the State of New York), Seller has obtained an ALTA closing protection letter which provides indemnification for the Buyer for losses arising from the related Closing Agent’s fraud, theft, dishonesty, negligence or failure to follow written closing instructions, in form and substance acceptable to the Buyer. If such closing protection letter is not addressed to Buyer, such closing protection letter shall provide that the Buyer and any assignee of Buyer are protected by such letter as if it were addressed directly to them.
Schedule 2
FILING JURISDICTIONS AND OFFICES
[To be Provided by Counsel to the Seller]
Schedule 3
PREVIOUS NAMES, ASSUMED NAMES OR
TRADE NAMES USED BY THE SELLER
NONE
Schedule 4
COOPERATIVE MORTGAGE LOAN DOCUMENTS
(i) Cooperative Mortgage Note;
(ii) Security Agreement and the original Assignment of the Security Agreement;
(iii) Cooperative Shares and related Stock Power, in blank, executed by the Mortgagor with such signature guaranteed and original Stock Power, in blank executed by the Seller;
(iv) Proprietary Lease or occupancy agreement and the Assignment of the Proprietary Lease executed by the Mortgagor in blank or if the Proprietary Lease has been assigned by the Mortgagor to the Seller, then the Seller must execute an assignment of the Assignment of the Proprietary Lease in blank;
(v) Recognition Agreement and the original Assignment of the Recognition Agreement;
(vi) UCC-1 financing statements with recording information thereon from the appropriate state and county recording offices if necessary to perfect the security interest of the Cooperative Mortgage Loan under the Uniform Commercial Code in the state in which the Cooperative Project is located (or a copy thereof, together with an officer’s certificate of the Seller certifying that such represents a true and correct copy of the original and that such original has been submitted for filing in the appropriate UCC filing office of the jurisdiction where the Cooperative Project is located), accompanied by UCC-3 financing statements executed in blank for recordation of the change in the secured party thereunder;
(vii) an Estoppel Letter and/or Consent;
(viii) the Cooperative Lien Search; and
(ix) any guarantees, if applicable.
Schedule 5
INFORMATION FOR SERVICER REPORTS
Field Name | Field Description | Sample Data |
[***]
|
[***]
|
[***]
|
Schedule 6
EXCLUDED STATES
NONE
EXHIBIT A
TAKEOUT INVESTORS
1. | [***] |
2. | [***] |
3. | [***] |
4. | [***] |
5. | [***] |
6. | [***] |
7. | [***] |
8. | [***] |
EXHIBIT B
UNDERWRITING GUIDELINES
[TO BE PROVIDED BY THE SELLER]
EXHIBIT C
FORM OF SERVICER NOTICE
__________ __, 20__
[SERVICER], as Servicer
[ADDRESS]
Attention: ___________
Re: | Master Repurchase Agreement and Securities Contract, dated as of June 3, 2020 (the “Repurchase Agreement”), by and among Home Point Financial Corporation (the “Seller”), Morgan Stanley Mortgage Capital Holdings LLC (the “Agent”) and Morgan Stanley Bank, N.A. (the “Buyer”) |
Ladies and Gentlemen:
[SERVICER] (the “Servicer”) is servicing certain mortgage loans for the Seller pursuant to certain Servicing Agreements between the Servicer and the Seller. Pursuant to the Repurchase Agreement among the Buyer, the Agent and the Seller, the Servicer is hereby notified that the Seller has granted a security interest to the Buyer in certain mortgage loans which are serviced by Servicer.
Upon receipt of a Notice of Event of Default from the Buyer in which the Buyer shall identify the mortgage loans which are then sold to the Buyer under the Repurchase Agreement (the “Purchased Loans”), the Servicer shall segregate all amounts collected on account of such Purchased Loans, hold them in trust for the sole and exclusive benefit of the Buyer, and remit such collections in accordance with the Buyer’s written instructions. Following such Notice of Event of Default, the Servicer shall follow the instructions of the Buyer with respect to the Purchased Loans, and shall deliver to the Buyer any information with respect to the Pledged Mortgage Loans reasonably requested by the Buyer.
[If the Servicer is an Affiliate of the Seller, this letter shall include: Upon the occurrence of an Event of Default that has not been waived, the Buyer (or the Agent, on behalf of the Buyer), may terminate any Servicing Agreement and in any event transfer servicing to the Buyer’s designee, at no cost or expense to the Buyer, it being agreed that the Seller will pay any and all fees required to terminate the Servicing Agreement and to effectuate the transfer of servicing to the designee of the Buyer.]
Notwithstanding any contrary information or direction which may be delivered to the Servicer by the Seller, the Servicer may conclusively rely on any information, direction or notice of an Event of Default delivered by the Buyer (or the Agent, on behalf of the Buyer), and the Seller shall indemnify and hold the Servicer harmless for any and all claims asserted against the Servicer for any actions taken in good faith by the Servicer in connection with the delivery of such information or Notice of Event of Default.
No provision of this letter may be amended, countermanded or otherwise modified without the prior written consent of the Buyer. The Buyer is an intended third party beneficiary of this letter.
Please acknowledge receipt and your agreement to the terms of this instruction letter by signing in the signature block below and forwarding an executed copy to the Buyer promptly upon receipt. Any notices to the Buyer should be delivered to the following address: 1585 Broadway, New York, New York 10036; Attention: ________________; Telephone: __________; Facsimile: ____________]; with a copy to: Morgan Stanley Bank, N.A., One Utah Center, 201 South Main Street, Salt Lake City, Utah 84111.
Very truly yours, | ||
[__________________________] | ||
By: | ||
Name: | ||
Title: |
ACKNOWLEDGED AND AGREED TO:
as Servicer | ||
By: | ||
Title: | ||
Telephone: | ||
Facsimile: |
EXHIBIT D
(FORM OF BLANKET TAKEOUT ASSIGNMENT (THE SELLER’S LETTERHEAD)
(Date)
[TAKE-OUT THE BUYER]
[ADDRESS]
________________________
Attention
Dear : __________
With respect to each whole loan trade made by us with your firm from time to time, the undersigned hereby assigns each such trade to Morgan Stanley Bank, N.A. (the “Buyer”) unless and until such time as such assignment is revoked by a written notice from us and the Buyer to you. For each transaction, you hereby agree to accept delivery from, and pay the purchase price directly to the Buyer, whose acceptance of each trade assignment is indicated below. Accordingly, the Buyer is obligated to make delivery of such mortgage loans to you, and you will establish each trade as a buy transaction from the Buyer or its designee.
All confirmations pertaining to each trade should be sent to the Buyer, at 1585 Broadway, New York, New York 10036, Attention: ________________.
Please execute this letter in the space provided below and send it by facsimile to the Buyer.
Very truly yours, | |||
[____________] | |||
By: | |||
Date: |
Agreed: | |||
[TAKE-OUT THE BUYER] | |||
By: | |||
Date: | |||
Acceptance of Takeout Assignment: | |||
MORGAN STANLEY BANK, N.A. | |||
By: | |||
Date: |
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Master Repurchase Agreement and Securities Contract dated as of June 3, 2020 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”) by and between Home Point Financial Corporation, a New Jersey corporation (the “Seller”), Morgan Stanley Mortgage Capital Holdings LLC (the “Agent”) and Morgan Stanley Bank, N.A. (the “Buyer”). Capitalized terms not otherwise defined herein shall have the same meanings as specified therefor in the Repurchase Agreement.
Each “Assignor” referred to on Schedule I hereto (each, an “Assignor”) and each “Assignee” referred to on Schedule I hereto (each an “Assignee”) hereby agrees severally with respect to all information relating to it and its assignment hereunder and on Schedule I hereto as follows:
Subject to the provisions of Section 14.11 of the Repurchase Agreement, such Assignor hereby sells and assigns, without recourse except as to the representations and warranties made by it herein, to such Assignee, and such Assignee hereby purchases and assumes from such Assignor, an interest in and to such Assignor’s rights and obligations under the Repurchase Agreement as of the Effective Date (as hereinafter defined) equal to the percentage interest specified on Schedule I hereto of all outstanding rights and obligations under the Repurchase Agreement (collectively, the “Assigned Interests”).
Such Assignor:
(a) hereby represents and warrants that its name set forth on Schedule I hereto is its legal name, that it is the legal and beneficial owner of the Assigned Interest and that such Assigned Interest is free and clear of any adverse claim;
(b) other than as provided herein, makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Repurchase Agreement or any of the other Repurchase Documents, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, the Repurchase Agreement or any of the other Repurchase Documents, or any other instrument or document furnished pursuant thereto; and
(c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Seller or any of the other parties or the performance or observance by the Seller or any of the other parties of any of its Obligations under or in respect of any of the Repurchase Documents, or any other instrument or document furnished pursuant thereto.
Such Assignee:
(a) confirms that it has received a copy of the Repurchase Agreement, together with copies of the financial statements referred to in Section 9.01 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance;
(b) agrees that it will, independently and without reliance upon the Buyer and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Repurchase Agreement;
(c) represents and warrants that its name set forth on Schedule I hereto is its legal name;
(d) agrees that, from and after the Effective Date, it will be bound by the provisions of the Repurchase Agreement and the other Repurchase Documents and, to the extent of the Assigned Interest, it will perform in accordance with their terms all of the obligations that by the terms of the Repurchase Agreement are required to be performed by it as a Buyer; and
(e) The effective date for this Assignment and Acceptance (the “Effective Date”) shall be the date specified on Schedule I hereto.
As of the Effective Date, (a) such Assignee shall be a party to the Repurchase Agreement and, to the extent that rights and obligations under the Repurchase Agreement have been assigned to it pursuant to this Assignment and Acceptance, have the rights and obligations of a Buyer thereunder and (b) such Assignor shall, to the extent that any rights and obligations under the Repurchase Agreement have been assigned by it pursuant to this Assignment and Acceptance, relinquish its rights (other than provisions of the Repurchase Documents that are specified under the terms of such Repurchase Documents to survive the payment in full of the Obligations of the Seller under or in respect of the Repurchase Documents) and be released from its obligations under the Repurchase Agreement (and, if this Assignment and Acceptance covers all or the remaining rights and obligations of such Assignor under the Repurchase Agreement, such Assignor shall cease to be a party thereto).
From and after the Effective Date, the Seller shall make all payments under the Repurchase Agreement in respect of the Assigned Interest to such Assignee. Such Assignor and such Assignee shall make all appropriate adjustments in payments under the Repurchase Agreement for periods prior to the Effective Date directly between themselves.
This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.
This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of Schedule I hereto by facsimile shall be effective as delivery of an originally executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, each Assignor and each Assignee have caused Schedule I hereto to be executed by their respective officers thereunto duly authorized, as of the date specified thereon.
Schedule I
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned | % | % | % | % | % |
Amount of Maximum Amount assigned | $ | $ | $ | $ | $ |
Aggregate outstanding principal amount of Purchased Loans assigned | $ | $ | $ | $ | $ |
Effective Date: | ________ __, ____ |
Assignor | ||
_______________________________, as Assignor | ||
[Type or print legal name of Assignor] | ||
By | ||
Name: | ||
Title: | ||
Dated: ________ __, ____ | ||
Assignee | ||
_______________________________, as Assignee | ||
[Type or print legal name of Assignee] | ||
By | ||
Name: | ||
Title: | ||
Dated: ________ __, ____ | ||
Domestic Lending Office: | ||
LIBOR Lending Office: |
EXHIBIT F
TAKEOUT PROCEEDS IDENTIFICATION LETTER
[Date]
Morgan Stanley Bank, N.A.
1585 Broadway
New York, New York 10036
Attention: ____________
Facsimile: (___) ___-____
Ladies and Gentlemen:
Reference is made to that certain Master Repurchase Agreement and Securities Contract, dated as of June 3, 2020 (the “Repurchase Agreement”), by and between Home Point Financial Corporation (the “Seller”), Morgan Stanley Mortgage Capital Holdings LLC (the “Agent”) and Morgan Stanley Bank, N.A. (the “Buyer”). Capitalized terms used but not otherwise defined in this letter agreement (“Letter Agreement”) shall have the meanings given to them in the Repurchase Agreement.
On [date] the Takeout Investor previously identified to you with respect to the Mortgage Loan(s) referenced on Exhibit A attached hereto wired to your account at ________________, [total amount of wire]. Contained within the total amount of the wire was a disbursement amount of _________. This amount represents proceeds for one or more mortgage loans which were not financed under the Repurchase Agreement, the details of which are:
Mortgage loan #: | |
Obligor’s name: | |
Mortgage loan #: | |
Obligor’s name: |
[list additional mortgage loans, if necessary]
Please wire these funds to:
[insert wire instructions here]
All costs and expenses incurred in carrying out, or as a consequence of having carried out, these instructions shall be borne by the undersigned, including, without limitation, all wire transfer fees and any related Costs.
Very truly yours, | |||
By: | |||
Name: |
Title: |
EXHIBIT G
RESERVED
EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
[_______]
Reference is made to the Master Repurchase Agreement and Securities Contract, dated as of June 3, 2020 (the “Repurchase Agreement”), by and among Home Point Financial Corporation (the “Seller”), Morgan Stanley Mortgage Capital Holdings LLC (the “Agent”) and Morgan Stanley Bank, N.A. (the “Buyer”),
The undersigned hereby certifies to the Buyer on behalf of the Seller, as of [_____], 20[__], that:
(a) both immediately prior to the entering into of each Transaction that has been entered into during the period since the delivery to Buyer of the immediately preceding Compliance Certificate (or, with respect to the first such certificate, since the Effective Date) and also after giving effect to each such Transaction and to the intended use of the Purchase Price paid to the Seller in respect thereof, the representations and warranties made by the Seller in Section 6 and Schedule 1 of the Repurchase Agreement, and elsewhere in each of the Repurchase Documents, were true and correct in all material respects on and as of the date of the making of each such Transaction (in the case of the representations and warranties in Section 6.11, Section 6.25 and Schedule 1 of the Repurchase Agreement, solely with respect to Purchased Loans subject to such outstanding Transactions) with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);
(b) Seller is, and as of the date of each Transaction that was entered into during the period since the delivery to Buyer of the immediately preceding Compliance Certificate (or, with respect to the first such certificate, since the Effective Date) was in compliance with all governmental licenses and authorizations, statutory and regulatory requirements, and qualified to do business and in good standing in all required jurisdictions;
(c) Seller has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in the Repurchase Agreement and the other Repurchase Documents to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default [except as specified below:][ if any Default or Event of Default has occurred and is continuing, Seller shall describe the same in reasonable detail and describing the action the Seller has taken or proposes to take with respect thereto];
(d) the below calculations support the undersigned’s certification of the Seller’s compliance with the requirements of Sections 7.14, 7.15, 7.16 and 7.18 of the Repurchase Agreement; and
(e) [***]
(f) [As of the date hereof, Seller has not formed any new Subsidiaries since the date of delivery of the immediately preceding Compliance Certificate.][Seller has formed the following new Subsidiaries since the date of delivery of the immediately preceding Compliance Certificate: [___]].
Responsible Officer Certification: | ||
By: | ||
Name: | ||
Title: |
Exhibit H-2
Exhibit 10.2.1
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 NUMBER ONE
to the
MASTER REPURCHASE AGREEMENT
Dated as of June 3, 2020,
among
HOME POINT FINANCIAL CORPORATION,
MORGAN STANLEY BANK. N.A.,
and
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC
This AMENDMENT NUMBER ONE (this “Amendment”) is made this 14th day of August, 2020, among HOME POINT FINANCIAL CORPORATION, a New Jersey corporation, as seller (“Home Point”), MORGAN STANLEY BANK, N.A., a national banking association, as buyer (“Buyer”) and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company, as agent for the Buyer (“Agent”), to the Master Repurchase Agreement, dated as of June 3, 2020, among Seller, Buyer and Agent, as such agreement may be amended from time to time (as amended, modified or supplemented from time to time, the “Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
RECITALS
WHEREAS, Seller, Buyer and Agent have agreed to amend the Agreement as more specifically set forth herein; and
WHEREAS, as of the date hereof, Seller represents to Buyer and Agent that Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. Amendment. The Agreement is hereby amended as follows (changes to the original text of the Agreement are reflected in italics solely for review purposes):
Section 1.01 Section 5.02 of the Agreement is hereby amended by adding the following subsection “(q)”:
(q) Compare Ratio. The “compare ratio” assigned to the Seller by FHA under its “Neighborhood Watch” program is less than or equal to [***].
Section 1.02 Section 8 (mm) of the Agreement is hereby amended and restated in its entirety as follows:
(mm) the “compare ratio” assigned to the Seller by FHA under its “Neighborhood Watch” program is greater than [***]; provided, however, that the Buyer may, by providing prior written notice to the Seller in the Buyer’s sole discretion, adopt a different threshold for such ratio or other statistic based upon the adoption by FHA of any change in the methodology under such program, and in such event, there shall be an Event of Default
hereunder if the “compare ratio” or such other statistic assigned to the Seller by FHA is less favorable than such threshold adopted by the Buyer.
SECTION 2. Effective Date. This Amendment shall become effective as of the date (the “Amendment Effective Date”) that the Agent shall have received counterparts hereof duly executed by each of the parties hereto.
SECTION 3. Fees and Expenses. Seller agrees to pay to Buyer and Agent all reasonable out-of-pocket costs and expenses incurred by Buyer or Agent in connection with this Amendment (including all reasonable fees and out-of-pocket costs and expenses of Buyer’s or Agent’s legal counsel) in accordance with Section 14.04 and 14.06 of the Agreement.
SECTION 4. Representations. Seller hereby represents to Buyer and Agent that as of the date hereof, Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
SECTION 5. Binding Effect; Governing Law. THIS AMENDMENT SHALL BE BINDING AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS. 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 WHICH SHALL GOVERN).
SECTION 6. Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties.
SECTION 7. Limited Effect. Except as amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment need not be made in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby.
[Signature Page Follows]
IN WITNESS WHEREOF, Sellers, Buyer and Agent have caused this Amendment to be executed and delivered by their duly authorized officers as of the date set forth above.
HOME POINT FINANCIAL CORPORATION,
as Seller |
||
By: | /s/ Joseph Ruhlin | |
Name: | Joseph Ruhlin | |
Title: | Treasurer |
MORGAN STANLEY BANK, N.A.,
as Buyer |
||
By: | ||
Name: | ||
Title: |
[Signature page to Amendment No. 1 to MRA]
IN WITNESS WHEREOF, Sellers, Buyer and Agent have caused this Amendment to be executed and delivered by their duly authorized officers as of the date set forth above.
HOME POINT FINANCIAL CORPORATION,
as Seller |
||
By: | ||
Name: | ||
Title: |
MORGAN STANLEY BANK, N.A.,
as Buyer |
||
By: | /s/ Christopher Schmidt | |
Name: | Christopher Schmidt | |
Title: | Authorized Signatory |
[Signature page to Amendment No. 1 to MRA]
Exhibit 10.2.2
EXECUTION
AMENDMENT NUMBER TWO
to the
MASTER REPURCHASE AGREEMENT
Dated as of June 3, 2020,
among
HOME POINT FINANCIAL CORPORATION,
MORGAN STANLEY BANK. N.A.,
and
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC
This AMENDMENT NUMBER TWO (this “Amendment”) is made this 18th day of November, 2020, among HOME POINT FINANCIAL CORPORATION, a New Jersey corporation, as seller (“Home Point”), MORGAN STANLEY BANK, N.A., a national banking association, as buyer (“Buyer”) and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company, as agent for the Buyer (“Agent”), to the Master Repurchase Agreement, dated as of June 3, 2020, as amended by that certain Amendment Number One to the Master Repurchase Agreement, dated as of August 14, 2020 (as may be amended, modified or supplemented from time to time, the “Agreement”), among Seller, Buyer and Agent, as such agreement may be further amended from time to time. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
RECITALS
WHEREAS, Seller, Buyer and Agent have agreed to amend the Agreement as more specifically set forth herein; and
WHEREAS, as of the date hereof, Seller represents to Buyer and Agent that Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. Amendment. The Agreement is hereby amended as follows:
Section 1.01 Schedule 1 of the Agreement is hereby amended by deleting clause (ss) in its entirety and replacing it with the following:
(ss) Origination Date. With respect to any Mortgage Loan originated by the Seller, the Origination Date is no earlier than 30 days prior to the date the Mortgage Loan is first included as a Purchased Loan under the Repurchase Agreement. With respect to any Mortgage Loan originated by a Qualified Originator other than the Seller, the Origination Date is no earlier than 90 days prior to the date the Mortgage Loan is first included as a Purchased Loan under the Repurchase Agreement.
SECTION 2. Effective Date. This Amendment shall become effective as of the date (the “Amendment Effective Date”) that the Agent shall have received counterparts hereof duly executed by each of the parties hereto.
SECTION 3. Fees and Expenses. Seller agrees to pay to Buyer and Agent all reasonable out-of-pocket costs and expenses incurred by Buyer or Agent in connection with this Amendment (including all reasonable fees and out-of-pocket costs and expenses of Buyer’s or Agent’s legal counsel) in accordance with Section 14.04 and 14.06 of the Agreement.
SECTION 4. Representations. Seller hereby represents to Buyer and Agent that as of the date hereof, Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
SECTION 5. Binding Effect; Governing Law. THIS AMENDMENT SHALL BE BINDING AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS. 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 WHICH SHALL GOVERN).
SECTION 6. Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties.
SECTION 7. Limited Effect. Except as expressly amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment need not be made in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby. The parties hereto have entered into this Amendment solely to amend the terms of the Agreement and do not intend this Amendment or the transactions contemplated hereby to be, and this Amendment and the transactions contemplated hereby shall not be construed to be, a novation of any of the obligations owing by Seller or any other party under or in connection with the Agreement or any of the other Transaction Documents. It is the intention and agreement of each of the parties hereto that (i) the perfection and priority of all security interests securing the payment of the Repurchase Obligations of the parties under the Agreement are preserved, (ii) the liens and security interests granted under the Agreement continue in full force and effect, and (iii) any reference to the Agreement in any such Transaction Documents shall be deemed to reference to this Amendment.
[Signature Page Follows]
2
IN WITNESS WHEREOF, Sellers, Buyer and Agent have caused this Amendment to be executed and delivered by their duly authorized officers as of the date set forth above.
HOME POINT FINANCIAL CORPORATION, | ||
as Seller | ||
By: | /s/ Joseph Ruhlin | |
Name: Joseph Ruhlin | ||
Title: Treasurer | ||
MORGAN STANLEY BANK, N.A., | ||
as Buyer | ||
By: | /s/ Michael Calandra | |
Name: Michael Calandra | ||
Title: Authorized Signatory | ||
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, | ||
as Agent | ||
By: | /s/ Christopher Schmidt | |
Name: Christopher Schmidt | ||
Title: Authorized Signatory |
[Signature page to Amendment No. 2 to MRA]
Exhibit 10.2.3
EXECUTION |
AMENDMENT NUMBER THREE
to the
MASTER REPURCHASE AGREEMENT
Dated
as of June 3, 2020,
among
HOME
POINT FINANCIAL CORPORATION,
MORGAN STANLEY BANK. N.A.,
and
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC
This AMENDMENT NUMBER THREE (this “Amendment”) is made this twenty-third day of December, 2020 and effective as of January 5, 2021, among HOME POINT FINANCIAL CORPORATION, a New Jersey corporation, as seller (“Home Point”), MORGAN STANLEY BANK, N.A., a national banking association, as buyer (“Buyer”) and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company, as agent for the Buyer (“Agent”), to the Master Repurchase Agreement, dated as of June 3, 2020, as amended by that certain Amendment Number One to the Master Repurchase Agreement, dated as of August 14, 2020, and by that certain Amendment Number Two to the Master Repurchase Agreement, dated as of November 18, 2020 (as amended, modified or supplemented from time to time, the “Agreement”), among Seller, Buyer and Agent, as such agreement may be further amended from time to time. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
RECITALS
WHEREAS, Seller, Buyer and Agent have agreed to amend the Agreement as more specifically set forth herein; and
WHEREAS, as of the date hereof and January 5, 2021, Seller represents to Buyer and Agent that Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. Amendment. The Agreement is hereby amended as follows:
Section 1.01 Section 1.01 of the Agreement is hereby amended by deleting the definitions of “Applicable Index,” “Conforming Changes,” “Determination Date,” “Index Rate,” “Index Transition,” “Index Transition Date,” “Index Transition Notice,” “Interest Determination,” “Interest Period,” “ISDA,” “ISDA Definitions,” “ISDA Fallback Adjustment,” “ISDA Fallback Rate,” “Market Practice,” “Rate Adjustment” and “Replacement Index.”
Section 1.02 Section 1.01 of the Agreement is hereby amended by adding the following definitions in their proper alphabetical order:
“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Index, any tenor for such Index or payment period for interest calculated with reference to such Index, as applicable, that is or may be used for determining the length of a Calculation Period pursuant to this Repurchase Agreement as of such date.
“Corresponding Tenor” with respect to any Available Tenor shall mean, 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.
“Daily Simple SOFR” shall mean, for any day, SOFR, with the conventions for this rate (which may include a lookback) being established by the Buyer (or the Agent on behalf of the Buyer) in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans at such times; provided that, if the Buyer (or the Agent on behalf of the Buyer) decides that any such convention is not administratively feasible, then the Buyer (or the Agent on behalf of the Buyer) may establish another convention in its reasonable discretion.
“Early Opt-in Election” shall mean, if the then-current Index is LIBOR Rate, the occurrence of the joint election by the Buyer (or the Agent on behalf of the Buyer) and the Seller to trigger a fallback from LIBOR Rate.
“Floor” shall mean, for any transaction under this Repurchase Agreement, the Index rate floor (which may be zero), if any, provided for in this Repurchase Agreement with respect to LIBOR Rate as determined for such transaction.
“Index Replacement” shall mean, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Buyer (or the Agent on behalf of the Buyer) on the applicable Index Replacement Date:
(1) the sum of: (a) Term SOFR and (b) the Index Replacement Adjustment with respect thereto;
(2) the sum of: (a) either (i) Compounded SOFR or (ii) Daily Simple SOFR, as selected by the Buyer (or the Agent on behalf of the Buyer) to be the then-prevailing market convention for determining an Index rate as a replacement for the then-current Index for the applicable loan market and (b) the applicable Index Replacement Adjustment;
(3) the sum of: (a) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Index for the applicable Corresponding Tenor and (b) the Index Replacement Adjustment; or
(4) the sum of: (a) the alternate rate of interest that has been selected by the Buyer (or the Agent on behalf of the Buyer) as the replacement for the then-current Index for the applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest as a replacement for the then-current Index for U.S. dollar denominated secured financings or securitizations relating to the relevant asset class, as applicable at such time and (b) the Index Replacement Adjustment;
provided that, in the case of clause (1) of this definition, such Unadjusted Index Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Buyer (or the Agent on behalf of the Buyer) in its reasonable discretion.
If at any time the Index Replacement as determined pursuant to clause (1), (2), (3) or (4) of this definition would be less than the Floor, the Index Replacement will be deemed to be the Floor for the purposes of this Repurchase Agreement.
2
“Index Replacement Adjustment” shall mean the first alternative set forth in the order below that can be determined by the Buyer (or the Agent on behalf of the Buyer) as of the Index Replacement Date:
(1) 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, endorsed or recommended by the Relevant Governmental Body for the applicable Unadjusted Index Replacement; or
(2) the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Buyer (or the Agent on behalf of the Buyer) giving due consideration to any industry-accepted spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Index with the applicable Unadjusted Index Replacement for U.S. dollar denominated secured financing or securitization transactions relating to the relevant asset class, as applicable at such time.
“Index Replacement Conforming Changes” shall mean, with respect to any Index Replacement, any technical, administrative or operational changes (including but not limited to changes to the definition of “Business Day,” the definition of “Calculation Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Buyer (or the Agent on behalf of the Buyer) decides may be appropriate to reflect the adoption and implementation of such Index Replacement and to permit the administration thereof by the Buyer (or the Agent on behalf of the Buyer) in a manner substantially consistent with market practice (or, if the Buyer (or the Agent on behalf of the Buyer) decides that adoption of any portion of such market practice is not administratively feasible or if the Buyer (or the Agent on behalf of the Buyer) determines that no market practice for the administration of such Index Replacement exists, in such other manner of administration as the Buyer (or the Agent on behalf of the Buyer) determines is reasonably necessary in connection with the administration of this Repurchase Agreement).
“Index Replacement Date” means the earliest to occur of the following events with respect to the then-current Index:
(1) in the case of clause (1) or (2) of the definition of “Index Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and
(b) the date on which the administrator of such Index (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Index (or such component thereof);
(2) in the case of clause (3) of the definition of “Index Transition Event,” the date of the public statement or publication of information referenced therein; or
(3) in the case of an Early Opt-in Election, the 5th (fifth) Business Day after the date of the joint election by the Buyer (or the Agent on behalf of the Buyer) and the Seller to trigger a fallback from LIBOR Rate.
For the avoidance of doubt, (i) if the event giving rise to the Index Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Index Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Index Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Index upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Index (or the published component used in the calculation thereof).
3
“Reference Time” shall mean, with respect to any setting of the then-current Index, (1) if such Index is the LIBOR Rate, 11:00 a.m. (London time) on the day of such setting, and (2) if such Index is not the LIBOR Rate, the time determined by the Buyer (or the Agent on behalf of the Buyer) in accordance with the Index Replacement Conforming Changes.
“Third Amendment Effective Date” shall mean January 5, 2021.
“Unadjusted Index Replacement” shall mean the applicable Index Replacement excluding the Index Replacement Adjustment with respect thereto.
Section 1.03 Section 1.01 of the Agreement is hereby amended by amending and restating the definition of “Compounded SOFR,” “Index,” “Index Transition Event,” “Relevant Government Body,” “SOFR,” “Term SOFR” and “Termination Date” each in their entirety as follows:
“Compounded SOFR” shall mean the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate (which, for example, may be compounded in arrears with a lookback and/or suspension period as a mechanism to determine the interest amount payable prior to the end of each Calculation Period or compounded in advance) being established by the Buyer (or the Agent on behalf of the Buyer) in accordance with:
(1) the rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining Compounded SOFR; provided that:
(2) if, and to the extent that, the Buyer (or the Agent on behalf of the Buyer) determines that Compounded SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology for this rate, and conventions for this rate that have been selected by the Buyer (or the Agent on behalf of the Buyer) giving due consideration to any industry-accepted market practice for similar U.S. dollar denominated secured financing or securitization transactions relating to the relevant asset class, as applicable at such time.
“Index” shall mean, initially, LIBOR Rate; provided that, if an Index Transition Event or, as the case may be, an Early Opt-in Election and the Index Replacement Date with respect thereto have occurred with respect to LIBOR Rate or the then-current Index, then “Index” means the applicable Index Replacement.
“Index Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Index:
(1) a public statement or publication of information by or on behalf of the administrator of such Index (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 Index (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 Index (or such component thereof);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Index (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Index (or such component), a resolution authority with jurisdiction over the administrator for such Index (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Index (or such component), which states that the administrator of such Index (or such component) has ceased or will cease to provide all Available Tenors of such Index (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 Index (or such component thereof); or
4
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Index (or the published component used in the calculation thereof) announcing that all Available Tenors of such Index (or such component thereof) are no longer representative.
For the avoidance of doubt, an “Index Transition Event” will be deemed to have occurred with respect to any Index if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Index (or the published component used in the calculation thereof).
“Relevant Governmental Body” shall mean the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“SOFR” shall mean, with respect to any day, the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the Index (or a successor administrator) on the Federal Reserve Bank of New York’s website.
“Term SOFR” shall mean, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Termination Date” shall mean the earliest of (i) January 4, 2022, or (ii) such earlier date on which this Repurchase Agreement shall terminate in accordance with the provisions hereof or by operation of law.
Section 1.04 Section 2.06 of the Agreement is hereby amended and restated in its entirety as follows:
2.06 Conversion of Applicable Interest Rates.
(a) Index Replacement. Notwithstanding anything to the contrary herein or in any other Repurchase Document, if:
(i) (A) an Index Transition Event or, as the case may be, an Early Opt-in Election and (B) an Index Replacement Date with respect thereto have occurred prior to the Reference Time in connection with any setting of the then-current Index, then such Index Replacement will replace the then-current Index for all purposes under this Repurchase Agreement and under any other Repurchase Document in respect of such Index setting and subsequent Index settings without requiring any amendment to, or requiring any further action by or consent of any other party to, this Repurchase Agreement or any other Repurchase Document, or
5
(ii) (A) an Index Transition Event or, as the case may be, an Early Opt-in Election and the Index Replacement Date with respect thereto has already occurred prior to the Reference Time for any setting of the then-current Index and as a result the then- current Index is being determined in accordance with clauses (2), (3) or (4) of the definition of “Index Replacement”; and
(B) the Buyer (or the Agent on behalf of Buyer) subsequently determines, that (w) Term SOFR and an Index Replacement Adjustment with respect thereto is or has becomes available and the Index Replacement Date with respect thereto has occurred, (x) there is currently a market for U.S. dollar- denominated transactions utilizing Term SOFR as an Index and for determining the Index Replacement Adjustment with respect thereto, (y) Term SOFR is being recommended as the Index for U.S. dollar-denominated syndicated credit facilities by the Relevant Governmental Body and (z) in any event, Term SOFR, the Index Replacement Adjustment with respect thereto and the application thereof is administratively feasible for the Buyer (or the Agent on behalf of Buyer) (as determined by the Buyer (or the Agent on behalf of Buyer)), then clause (1) of the definition of “Index Replacement” shall, without requiring any amendment to, or requiring any further action by or consent of any other party to, this Repurchase Agreement or any other Repurchase Document, replace such then-current Index for all purposes hereunder and under any other Repurchase Document in respect of such Index setting and subsequent Index settings on and from the beginning of the next Calculation Period or, as the case may be, Available Tenor so long as the Buyer (or the Agent on behalf of the Buyer) notifies all the parties hereto prior to the commencement of such next Calculation Period or, as the case may be, Available Tenor.
(b) Index Replacement Conforming Changes. In connection with the implementation of an Index Replacement, the Buyer (or the Agent on behalf of the Buyer) will have the right to make Index Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Repurchase Document, any amendments implementing such Index Replacement Conforming Changes will become effective without requiring any further action by or consent of any other party to this Repurchase Agreement or any other Repurchase Document.
(c) Notices; Standards for Decisions and Determinations. The Buyer (or the Agent on behalf of the Buyer) will promptly notify all the parties hereto of (i) any occurrence of (A) an Index Transition Event or, as the case may be, an Early Opt-in Election and (B) the Index Replacement Date with respect thereto, (ii) the implementation of any Index Replacement, and (iii) the effectiveness of any Index Replacement Conforming Changes.
Any determination, decision or election that may be made by the Buyer (or the Agent on behalf of the Buyer) pursuant to this Section 2.06, 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, shall also be made by the Buyer (or the Agent on behalf of the Buyer) with respect to other repurchase facilities with similarly situated counterparties and with substantially similar assets subject thereto and shall be conclusive and binding absent manifest error and may be made in the Buyer’s (or the Agent’s on behalf of the Buyer) sole discretion and without consent from any other party to this Repurchase Agreement or any other Repurchase Document.
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Section 1.05 Section 3.03 is hereby deleted in its entirety and replaced as follows:
The Seller agrees to pay the Commitment Fee to the Buyer, such payment to be made in Dollars in immediately available funds, without deduction, set off or counterclaim, to Buyer as provided in the Pricing Side Letter. The Seller also hereby agrees to pay to the Buyer any other fees provided in the Pricing Side Letter as specified therein. Each of such fees shall be deemed to be fully earned and non- refundable when paid; provided, that notwithstanding the foregoing or anything else to the contrary here, to the extent that the Buyer elects not to enter into any Transaction in respect of the Committed Amount solely due to the occurrence of one of the events described in Section 5.02(k), Section 5.02(p) or Section 8(p) the Buyer shall promptly refund to the Seller a pro-rated portion of the Committed Amount for the period from the date of such election through the Termination Date. Notwithstanding anything to the contrary in this Section 3.03, any portion of the Commitment Fee that was paid prior to the Third Amendment Effective Date, but not yet recognized as of the Third Amendment Effective Date (the “Applicable Commitment Fee”), will be deemed to be credited to the account of Sellers and such amount shall then be immediately applied by Buyer in payment of such Applicable Commitment Fee on the Third Amendment Effective Date. Such payment shall not be made available in cash but shall be effected by way of book-entry by Buyer in full and final payment of such Applicable Commitment Fee. Once deemed to be credited pursuant to this paragraph, the parties hereto agree that such Applicable Commitment Fee shall have been fully earned as of the Third Amendment Effective Date.
Section 1.06 Section 7.17 of the Agreement is hereby amended by (i) deleting the text “fifth Business Day” and (ii) replacing such text with “tenth (10th) calendar day”.
SECTION 2. Effective Date. This Amendment shall become effective as of the date (the “Amendment Effective Date”) that the Agent shall have received counterparts hereof duly executed by each of the parties hereto.
SECTION 3. Fees and Expenses. Seller agrees to pay to Buyer and Agent all reasonable out-of-pocket costs and expenses incurred by Buyer or Agent in connection with this Amendment (including all reasonable fees and out-of-pocket costs and expenses of Buyer’s or Agent’s legal counsel) in accordance with Section 14.04 and 14.06 of the Agreement.
SECTION 4. Representations. Seller hereby represents to Buyer and Agent that as of the date hereof and January 5, 2021, Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
SECTION 5. Binding Effect; Governing Law. THIS AMENDMENT SHALL BE BINDING AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS. 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 WHICH SHALL GOVERN).
SECTION 6. Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties.
7
SECTION 7. Limited Effect. Except as expressly amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment need not be made in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby. The parties hereto have entered into this Amendment solely to amend the terms of the Agreement and do not intend this Amendment or the transactions contemplated hereby to be, and this Amendment and the transactions contemplated hereby shall not be construed to be, a novation of any of the obligations owing by Seller or any other party under or in connection with the Agreement or any of the other Transaction Documents. It is the intention and agreement of each of the parties hereto that (i) the perfection and priority of all security interests securing the payment of the Repurchase Obligations of the parties under the Agreement are preserved, (ii) the liens and security interests granted under the Agreement continue in full force and effect, and (iii) any reference to the Agreement in any such Transaction Documents shall be deemed to reference to this Amendment.
[Signature Page Follows]
8
IN WITNESS WHEREOF, Sellers, Buyer and Agent have caused this Amendment to be executed and delivered by their duly authorized officers as of the date set forth above.
HOME POINT FINANCIAL CORPORATION,
as Seller |
||
By: | /s/ Joseph Ruhlin | |
Name: Joseph Ruhlin | ||
Title: Senior Managing Director - Treasurer | ||
MORGAN STANLEY BANK, N.A.,
as Buyer |
||
By: | ||
Name: | ||
Title: | ||
MORGAN STANLEY MORTGAGE CAPITAL
HOLDINGS LLC,
as Agent |
||
By: | ||
Name: | ||
Title: |
[Signature page to Amendment No. 3 to MRA]
IN WITNESS WHEREOF, Sellers, Buyer and Agent have caused this Amendment to be executed and delivered by their duly authorized officers as of the date set forth above.
HOME POINT FINANCIAL CORPORATION,
as Seller |
||
By: | ||
Name: | ||
Title: | ||
MORGAN STANLEY BANK, N.A.,
as Buyer |
||
By: | /s/ Christopher Schmidt | |
Name: Christopher Schmidt | ||
Title: Authorized Signatory | ||
MORGAN STANLEY MORTGAGE CAPITAL
HOLDINGS LLC,
as Agent |
||
By: | /s/ Michael Calandra | |
Name: Michael Calandra |
||
Title: Authorized Signatory |
[Signature page to Amendment No. 3 to MRA]
Exhibit 10.3
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
MASTER REPURCHASE AGREEMENT
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as administrative agent,
CREDIT SUISSE AG, a company incorporated in Switzerland, acting through its CAYMAN ISLANDS BRANCH, as buyer, ALPINE SECURITIZATION LTD, as buyer and other Buyers from time to time,
HOME POINT FINANCIAL CORPORATION, as seller and
each Underlying Entity joined hereto from time to time.
Dated October 23, 2020
TABLE OF CONTENTS
Page
1. | Applicability | 1 |
2. | Definitions | 1 |
3. | Program; Initiation of Transactions | 29 |
4. | Repurchase; Conversion to REO Property | 30 |
5. | Price Differential | 31 |
6. | Margin Maintenance; Reallocation of Purchase Price | 32 |
7. | Income Payments | 33 |
8. | Security Interest | 35 |
9. | Payment and Transfer | 38 |
10. | Conditions Precedent | 39 |
11. | Program; Costs | 43 |
12. | Servicing | 46 |
13. | Representations and Warranties | 48 |
14. | Covenants | 52 |
15. | Events of Default | 58 |
16. | Remedies Upon Default | 61 |
17. | Reports | 63 |
18. | Repurchase Transactions | 66 |
19. | Single Agreement | 67 |
20. | Notices and Other Communications | 67 |
21. | Entire Agreement; Severability | 69 |
22. | Non assignability | 69 |
23. | Set-off | 70 |
24. | Binding Effect; Governing Law; Jurisdiction | 70 |
25. | No Waivers, Etc. | 71 |
26. | Intent | 71 |
27. | Disclosure Relating to Certain Federal Protections | 72 |
28. | Power of Attorney | 72 |
29. | Buyers May Act Through Administrative Agent | 73 |
30. | Indemnification; Obligations | 73 |
31. | Counterparts | 74 |
32. | Confidentiality | 74 |
33. | Recording of Communications | 75 |
34. | Periodic Due Diligence Review | 75 |
35. | Authorizations | 76 |
36. | Acknowledgment of Assignment and Administration of Repurchase Agreement | 76 |
37. | Acknowledgement of Anti-Predatory Lending Policies | 77 |
38. | Documents Mutually Drafted | 77 |
39. | General Interpretive Principles | 77 |
40. | Conflicts | 78 |
41. | Pool Subdivisions | 78 |
42. | Bankruptcy Non-Petition | 78 |
43. | Limited Recourse | 78 |
44. | Nominee | 79 |
45. | Joint and Several | 86 |
SCHEDULES | |
Schedule 1-A – | Representations and Warranties with Respect to Purchased Mortgage Loans and Contributed Mortgage Loans |
Schedule 1-B – | Representations and Warranties with Respect to Contributed REO Property |
Schedule 1-C – | Representations and Warranties with Respect to Purchased Certificates |
Schedule 2 – Authorized Representatives |
EXHIBITS | |
Exhibit A | Form of Power of Attorney (Seller Parties) |
Exhibit B | Escrow Instruction Letter |
Exhibit C | Form of Officer’s Compliance Certificate |
Exhibit D | Schedule of Indebtedness |
This is a MASTER REPURCHASE AGREEMENT, dated as of October 23, 2020, by and among Credit Suisse First Boston Mortgage Capital LLC, (“Administrative Agent”) on behalf of Buyers, including but not limited to Credit Suisse AG, a company incorporated in Switzerland, acting through its Cayman Islands Branch (“CS Cayman” and a “Buyer”) and Alpine Securitization LTD (“Alpine” and a “Buyer”), Home Point Financial Corporation (“Seller”) and each Underlying Entity joined hereto from time to time (each, an “Underlying Entity”, and together with the Seller, each a “Seller Party” and collectively, the “Seller Parties”).
1. | Applicability |
a. From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Administrative Agent on behalf of Buyers certain Purchased Assets (including, without limitation, the related Contributed Assets) (as hereinafter defined) on a servicing released basis against the transfer of funds by Administrative Agent, with a simultaneous agreement by Administrative Agent on behalf of Buyers to transfer to Seller such Purchased Assets on a servicing released basis at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder. For the avoidance of doubt, and for administrative and tracking purposes, (a) the purchase and sale of each Purchased Asset and each Contributed Asset shall be deemed a separate Transaction and (b) with respect to each Designated Asset, such Designated Asset may, at Buyers’ option, be sold to different Buyers on a pro rata basis, such that one Buyer pays the Purchase Price-Base and another Buyer pays the Purchase Price-Incremental, in which case, the Administrative Agent shall own the Designated Asset, for the benefit of the purchasing Buyers, on a pro rata, pari passu basis.
b. From time to time and upon an Underlying Entity’s joinder hereto, the Administrative Agent on behalf of Buyers shall purchase the Purchased Certificates from the Seller in connection with the related Transaction. On and after the Purchase Date of any Purchased Certificate, the Seller may request and Administrative Agent on behalf of Buyers may fund, subject to the terms and conditions of this Agreement, a Purchase Price Increase (as defined hereinafter) for the Transactions in respect of the Purchased Certificate based upon the acquisition of additional Contributed Assets by the Underlying Entity. From time to time, the Seller may make an Optional Prepayment to Administrative Agent on behalf of Buyers in accordance with Section 4.b hereof.
c. To the extent a type of Mortgage Loan or Contributed Asset is referenced in the Program Agreements, those provisions shall only be applicable to the extent the box adjacent to the Approved Product Type is checked on the Asset Matrix.
d. To the extent a provision refers to a Guarantor and/or the Guaranty, such provision shall only be applicable to the extent the parties enter into a Guaranty with a Guarantor in connection with the Program Agreements.
2. | Definitions |
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings; provided that any terms used but not otherwise defined herein shall have the meanings given to them in the Pricing Side Letter:
“1933 Act” means the Securities Act of 1933, as amended from time to time.
“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Acceptable State” means any state acceptable pursuant to Seller’s Asset Guidelines.
“Accepted Servicing Practices” means, with respect to any Purchased Mortgage Loan or Contributed Asset, as applicable, those mortgage servicing practices and REO property management practices of prudent mortgage lending institutions which service mortgage loans or manage real property, as applicable, of the same type as such Purchased Mortgage Loan or Contributed Asset in the jurisdiction where the related Mortgaged Property or Contributed Asset is located in accordance with applicable law.
“Acquisition Guidelines” means, with respect to any Mortgage Loan or Contributed Asset, the standards, procedures and guidelines of the Seller for acquiring Mortgage Loans and Contributed Assets.
“Act” has the meaning set forth in Section 32.b hereof.
“Act of Insolvency” means, with respect to any Person or its Affiliates, (a) the filing of a petition, commencing, or authorizing the commencement of any case or proceeding, or the voluntary joining 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 which is consented to, not timely contested or results in entry of an order for relief; (b) the seeking of the appointment of a receiver, trustee, custodian or similar official for such party or an Affiliate or any substantial part of the property of either; (c) the appointment of a receiver, conservator, or manager for such party or an Affiliate by any governmental agency or authority having the jurisdiction to do so; (d) the making or offering by such party or an Affiliate of a composition with its creditors or a general assignment for the benefit of creditors; (e) the admission by such party or an Affiliate of such party of its inability to pay its debts or discharge its obligations as they become due or mature; or (f) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority 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 such party or of any of its Affiliates, or shall have taken any action to displace the management of such party or of any of its Affiliates or to curtail its authority in the conduct of the business of such party or of any of its Affiliates; provided, however, with respect to any such involuntary filing, appointment, or proceeding, such filing, appointment or proceeding shall not have been dismissed within forty-five (45) calendar days.
“Additional Buyers” has the meaning set forth in Section 36 hereof.
“Adjusted Net Income” means, for any Person, such Person’s Net Income excluding any positive or negative market-to-market adjustments made in connection with mortgage loans held for investment and any mortgage servicing rights, in each instance, on such Person’s balance sheet.
“Adjusted Tangible Net Worth” means, for any Person, Net Worth of such Person plus Subordinated Debt (provided such Subordinated Debt shall be approved by Administrative Agent in writing), minus (a) Restricted Cash (other than any portion of Restricted Cash that has a corresponding offsetting current liability); (b) [***] of investment securities; (c) [***] of all mortgage loans held for investment; (d) [***] of REO Property and (e) all intangible assets, including (without duplication) goodwill, patents, tradenames, trademarks, copyrights, franchises, any organizational expenses, deferred taxes and expenses, prepaid expenses, prepaid assets, deposits, receivables from shareholders, Affiliates or employees, and any other asset as shown as an intangible asset on the balance sheet of such Person on a consolidated basis as determined at a particular date in accordance with GAAP (other than any portion of such assets that has a corresponding offsetting current liability).
“Administration Agreement” means that certain Repo Administration and Allocation Agreement, dated as of the date hereof, by and among Seller Parties, Guarantor, if any, CSFBMC as administrative agent and certain Buyers identified therein, as amended, restated, supplemented or otherwise modified from time to time.
“Administrative Agent” means CSFBMC or any successor thereto under the Administration Agreement.
“Affiliate” means, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code, which shall also include, for the avoidance of doubt, with respect to Administrative Agent only, any CP Conduit; 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.
“Agency” means Freddie Mac, Fannie Mae or GNMA, as applicable.
“Agency Approvals” has the meaning set forth in Section 13.a(24) hereof.
“Agency Guide” means (a) the Fannie Mae MBS Selling and Servicing Guide, (b) the Freddie Mac Sellers’ and Servicers’ Guide or (c) the Ginnie Mae Mortgage-Backed Securities Guide, in each case, as such Agency Guide may hereafter from time to time be amended, supplemented or modified, as applicable, including, for the avoidance of doubt, any amendments, supplements, waivers or other modifications as between the applicable Agency and Seller.
“Agency Mortgage Loan” means, collectively, Conforming Mortgage Loans, State Agency Program Loans, USDA Loans, FHA Loans, VA Loans and HECM Loans (but not Early Buyout Loans).
“Agency Security” means a mortgage-backed security issued or guaranteed by an Agency.
“Aggregate Purchase Price-Base” means, as of any date of determination, the lesser of [***] and [***].
“Aggregate Purchase Price-Incremental” means, as of any date of determination, the excess if any of [***] on such date over [***].
“Agreement” means this Master Repurchase Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“ALTA” means American Land Title Association.
“Appraised Value” means the “as is” value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.
“Approved Product Type” has the meaning assigned to such term in the Pricing Side Letter.
“Asset File” means, with respect to a Purchased Mortgage Loan or a Contributed Asset, as applicable, the documents and instruments relating thereto and set forth in an exhibit to the Custodial Agreement.
“Asset Guidelines” means, to the extent the Seller Parties (a) originate Mortgage Loans or Contributed Assets, the Origination Guidelines and (b) purchase Mortgage Loans or Contributed Assets, the Acquisition Guidelines; in each case, other than with respect to any Origination Guidelines or Acquisition Guidelines related to Agency Mortgage Loans, which are set forth in the written policies and procedures of the Seller Parties, a copy of which have been provided to and approved by Administrative Agent in writing.
“Asset Matrix” has the meaning assigned to such term in the Pricing Side Letter.
“Asset Schedule” means, with respect to any Transaction as of any date, an asset schedule in the form of a computer tape or other electronic medium generated by Seller Parties, and delivered to Administrative Agent and Custodian, which provides information required by Administrative Agent to enter into Transactions relating to the Purchased Mortgage Loan and Contributed Asset in a format acceptable to Administrative Agent.
“Asset Value” means with respect to any Purchased Asset or Contributed Asset, the sum of the Asset Value-Base and the Asset Value-Incremental.
“Asset Value-Base” means, with respect to any Purchased Asset or Contributed Asset as of any date of determination, an amount equal to the product of [***] and [***].
“Asset Value-Incremental” means, with respect to any Purchased Asset or Contributed Asset as of any date of determination, an amount equal to the product of [***] and [***].
“Assignment and Acceptance” has the meaning assigned to such term in Section 22.a hereof.
“Assignment of Leases and Rents” has the meaning set forth in paragraph (xxx) of Schedule 1-A hereto.
“Assignment of Mortgage” means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage.
“Assignment of Proprietary Lease” means the specific agreement creating a first lien on and pledge of the Co-op Shares and the appurtenant Proprietary Lease securing a Co-op Loan.
“Attorney Bailee Letter” has the meaning assigned to such term in the Custodial Agreement.
“Bailee Letter” has the meaning assigned to such term in the Custodial Agreement.
“Bank” means Merchants Bank of Indiana, or as otherwise mutually agreed upon between Seller and Administrative Agent.
“Bankruptcy Code” means Title 11 of the United States Bankruptcy Code of 1978, as amended from time to time.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BPL – Holdback” means a Business Purpose Mortgage Loan with respect to which there exists a Holdback Amount which may be funded and on deposit in the Holdback Account for the related Mortgagor to improve and rehabilitate the related Mortgaged Property.
“BPL – Long” means a Business Purpose Mortgage Loan with respect to which (a) the related Mortgaged Property consists of (i) eight (8) units or less or (ii) between nine (9) and twenty-nine (29) units and with an original outstanding principal amount less than [***] and (b) the related maturity date is [***] or more from the date of the Mortgage Note.
“BPL – Multi-Family” means a Business Purpose Mortgage Loan which is secured by a residential Mortgaged Property consisting of (a) thirty (30) units or more or (b) between nine (9) and twenty-nine (29) units and with an original outstanding principal amount of [***] or more, in each case, principally used for lease to residential tenants occupying the same or consisting of a mixed-use property.
“BPL – Multi-Family – Long” means a BPL – Multi-Family with a maturity date that is [***] or more from the date of the Mortgage Note.
“BPL – Multi-Family – Short” means a BPL – Multi-Family with a maturity date that is less than [***] from the date of the Mortgage Note.
“BPL – Short” means a Business Purpose Mortgage Loan with respect to which (a) the related Mortgaged Property consists of not more than eight (8) units and (b) the related maturity date is less than [***] from the date of the Mortgage Note.
“BPO” means an opinion of the fair market value of a Mortgaged Property or an REO Property given by a licensed real estate agent or broker in conformity with customary and usual business practices, which includes comparable sales and comparable listings and complies with the criteria set forth in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 for an “appraisal” or an “evaluation” as applicable.
“Business Day” means any day other than (i) a Saturday or Sunday; (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New York or the Custodian is authorized or obligated by law or executive order to be closed or (iii) a public or bank holiday in New York City, the State of Texas, the State of Michigan or the State of Florida.
“Business Purpose Mortgage Loan” means a Mortgage Loan with respect to which the related Mortgaged Property (a) is non-owner occupied; (b) is primarily used for business or commercial purposes (as referenced in the Truth and Lending Act and its implementing regulation, Regulation Z); and (c) has been originated or acquired in accordance with Asset Guidelines.
“Buyer” means CS Cayman, Alpine and each buyer identified by the Administrative Agent from time to time pursuant to the Administration Agreement and their successors in interest and assigns pursuant to Section 22 hereof and, with respect to Section 11 hereof, its participants.
“Capital Lease Obligations” means, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Capital Stock” means, as to any Person, any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including, without limitation, any and all member or other equivalent interests in any limited liability company, limited partnership, trust, and any and all warrants or options to purchase any of the foregoing, in each case, designated as “securities” (as defined in Section 8-102 of the Uniform Commercial Code) in such Person, including, without limitation, all rights to participate in the operation or management of such Person and all rights to such Person’s properties, assets, interests and distributions under the related organizational documents in respect of such Person. “Capital Stock” also includes (i) all accounts receivable arising out of the related organizational documents of such Person; (ii) all general intangibles arising out of the related organizational documents of such Person; and (iii) to the extent not otherwise included, all proceeds of any and all of the foregoing (including within proceeds, whether or not otherwise included therein, any and all contractual rights under any revenue sharing or similar agreement to receive all or any portion of the revenues or profits of such Person).
“Cash Equivalents” means (a) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of [***] or less from the date of acquisition and overnight bank deposits of Administrative Agent or of any commercial bank having capital and surplus in excess of [***], (c) repurchase obligations of Administrative Agent or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within [***] after the day of acquisition, (e) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of [***] or less from the date of acquisition backed by standby letters of credit issued by Administrative Agent or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.
“Change in Control” means:
(a) any transaction or event as a result of which Home Point Capital Inc. ceases to directly or indirectly own, beneficially or of record, at least 50% of the Capital Stock of Seller;
(b) any transaction or event as a result of which Seller ceases to directly own 100% of the Capital Stock of any Underlying Entity (other than as set forth herein);
(c) if such Seller Party or Guarantor is a Delaware limited liability company, such Seller Party or Guarantor, as applicable, enters into any transaction or series of transactions to adopt, file, effect or consummate a Division, or otherwise permits any such Division to be adopted, filed, effected or consummated; or
(d) the sale, transfer, or other disposition of all or substantially all of any Seller Party’s or Guarantor’s assets (excluding any such action taken in connection with any securitization transaction).
“Clearing Account” means the account into which HUD, VA and USDA remit all Income (including, without limitation, claims and proceeds) on account of Early Buyout Loans.
“Code” means the Internal Revenue Code of 1986, as amended.
“Confidential Information” has the meaning set forth in Section 32.b hereof.
“Conforming Mortgage Loan” means a first lien Mortgage Loan, including State Agency Program Loans, originated in accordance with the criteria of an Agency for purchase of Mortgage Loans, including, without limitation, conventional Mortgage Loans.
“Contributed Asset” means a Contributed REO Property and/or a Contributed Mortgage Loan.
“Contributed Mortgage Loan” means the individual or collective reference to the Mortgage Loans, legal title of which is held by an Underlying Entity, which are subject to a Transaction hereunder and/or listed on the related Asset Schedule attached to the related Transaction Request, in each case, that satisfies the representations and warranties set forth on Schedule 1-A hereto which such Asset Files the Custodian has been instructed to hold pursuant to the Custodial Agreement.
“Contributed Repurchase Assets” has the meaning assigned thereto in Section 8.a(2) hereof.
“Contributed REO Property” means the individual or collective reference to the REO Property, legal title of which is held by the applicable Underlying Entity, which are subject to a Transaction hereunder and/or listed on the related Asset Schedule attached to the related Transaction Request, in each case, that satisfies the representations and warranties set forth on Schedule 1-B hereto which such Asset Files the Custodian has been instructed to hold pursuant to the Custodial Agreement.
“Co-op Corporation” means, with respect to any Co-op Loan, the cooperative apartment corporation that holds legal title to the related Co-op Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
“Co-op Loan” means a Mortgage Loan secured by the pledge of Co-op Shares allocated to a Co-op Unit in a Co-op Corporation and collateral assignment of the related Proprietary Lease.
“Co-op Project” means, with respect to any Co-op Loan, all real property and improvements thereto and rights therein and thereto owned by a Co-op Corporation including without limitation the land, separate dwelling units and all common elements.
“Co-op Shares” means, with respect to any Co-op Loan, the shares of stock issued by a Co-op Corporation and allocated to a Co-op Unit and represented by a Stock Certificate.
“Co-op Unit” means, with respect to any Co-op Loan, a specific unit in a Co-op Project.
“CP Conduit” means a commercial paper conduit, including but not limited to Alpine Securitization LTD, administered, managed or supported by CSFBMC or an Affiliate of CSFBMC.
“Credit Limit” means, with respect to each HELOC, the maximum amount permitted under the terms of the related Credit Line Agreement as identified in the related Asset Schedule.
“Credit Line Agreement” means, with respect to each HELOC, the related home equity line of credit agreement, account agreement and promissory note (if any) executed by the related Mortgagor and any amendment or modification thereof.
“CSFBMC” means Credit Suisse First Boston Mortgage Capital LLC, or any successors or assigns.
“Custodial Account” means the account held by Bank pursuant to the terms of the applicable Custodial Account Control Agreement, if any, in each case, into which any amounts with respect to Early Buyout Loans may be deposited and held. Administrative Agent shall have a perfected security interest in all such accounts and Seller Parties acknowledge that Administrative Agent shall have no obligations of any kind to remit any additional amounts into the related Custodial Account.
“Custodial Account Control Agreement” means that certain account control agreement among Administrative Agent, the Bank and the other parties thereto, providing for the Administrative Agent’s control over the related Custodial Account.
“Custodial Agreement” means the custodial agreement, dated as of the date hereof, among Seller Parties, Administrative Agent, Buyers and Custodian identified therein, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Custodial Asset Schedule” has the meaning assigned to such term in the Custodial Agreement.
“Custodian” means the Person identified as such in the Custodial Agreement or such other party specified by Administrative Agent and agreed to by Seller Parties, which approval shall not be unreasonably withheld, conditioned or delayed.
“Daily Weighted Average Price Differential-Base” means, with respect to all Purchased Assets and Contributed Assets as of any date of determination, an amount equal to the product of [***] and [***].
“Daily Weighted Average Price Differential-Incremental” means, with respect to all Purchased Assets and Contributed Assets as of any date of determination, an amount equal to the product of [***] and [***].
“DE Compare Ratio” means the Two Year FHA Direct Endorsement Lender Compare Ratio, excluding streamline FHA refinancings, as made publicly available by HUD.
“Debtor Relief Law” means any law, administration, or regulation relating to reorganization, winding up, administration, composition or adjustment of debts or otherwise relating to bankruptcy or insolvency.
“Default” means an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Delinquency Advance” means any advance made by Seller or Servicer pursuant to the Servicing Agreements, to cover due, but uncollected or unavailable as a result of funds not yet being cleared, principal and interest payments on the Early Buyout Loans included in the portfolio of Mortgage Loans serviced by Seller or Servicer pursuant to the Servicing Agreements, including Early Buyout Loans with respect to which the related Mortgaged Property is being held pending liquidation.
“Designated Asset” means a Purchased Asset and/or Contributed Asset that is identified by Administrative Agent as eligible for both a Purchase Price-Base and a Purchase Price-Incremental.
“Disqualification Event” means the occurrence of any of the following events: (a) a Participant materially breaches the applicable Participation Agreement, (b) an Act of Insolvency occurs with respect to a Participant, (c) the failure of a Participant to purchase the participation interest pursuant to a Participation Agreement with respect to a Designated Asset, (d) the Administrative Agent, a Participant or a Buyer shall 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 Administrative Agent, any Participant or any Buyer has made it unlawful, for Administrative Agent, any Participant or any Buyer to purchase Purchased Assets or Contributed Asset or participations in Transactions, or (e) the Administrative Agent determines in its sole discretion, that it will no longer enter into Transactions comprised of Purchase Price-Incremental on account of a Purchased Asset or Contributed Asset.
“Division” means the division of a limited liability company into two or more limited liability companies pursuant to and in accordance with Section 18-217 of Chapter 18 of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended.
“Dollars” and “$” means dollars in lawful currency of the United States of America.
“Draw” means, with respect to each HELOC, an additional borrowing by the Mortgagor in accordance with the related Credit Line Agreement.
“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.
“Early Buyout” means the purchase of a defaulted FHA Loan, VA Loan or USDA Loan by Seller from a GNMA Security.
“Early Buyout Loans” means an FHA Loan, USDA Loan or VA Loan which is subject to an Early Buyout and is a Purchased Mortgage Loan or Contributed Mortgage Loan.
“E-Sign” means the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.
“Effective Date” means the date upon which the conditions precedent set forth in Section 10 hereof shall have been satisfied.
“Electronic Tracking Agreement” means an Electronic Tracking Agreement among Administrative Agent, Seller Parties, MERS and MERSCORP Holdings, Inc., to the extent applicable as the same may be amended, restated, supplemented or otherwise modified from time to time.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and administrative rulings issued thereunder.
“ERISA Affiliate” means any corporation or trade or business that, together with Seller is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as single employer described in Sections 414(b), (c), (m) or (o) of the Code.
“Escrow Instruction Letter” means the Escrow Instruction Letter from Seller to the Settlement Agent, in the form of Exhibit B hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Escrow Payments” means, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“Event of Default” has the meaning specified in Section 15 hereof.
“Event of Termination” means with respect to any Seller Party or Guarantor (a) with respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event; (b) the withdrawal of any Seller Party, Guarantor or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the failure by any Seller Party, Guarantor or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA; (d) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by any Seller Party, Guarantor or any ERISA Affiliate thereof to terminate any Plan; (e) the failure to meet requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code; (f) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (g) the receipt by any Seller Party, Guarantor or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (f) has been taken by the PBGC with respect to such Multiemployer Plan; or (h) any event or circumstance exists which may reasonably be expected to constitute grounds for any Seller Party, Guarantor or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412 or 430(k) of the Code with respect to any Plan.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Buyer or other recipient of any payment hereunder or required to be withheld or deducted from a payment to such Buyer or such other recipient: (a) Taxes based on (or measured by) net income or net profits, franchise Taxes and branch profits Taxes that are imposed on a Buyer or other recipient of any payment hereunder as a result of (i) being organized under the laws of, or having its principal office or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) that are Other Connection Taxes; (b) any Tax imposed on a Buyer or other recipient of a payment hereunder that is attributable to such Buyer’s or other recipient’s failure to comply with relevant requirements set forth in Section 11.e(ii) hereof; (c) any U.S. federal withholding Tax that is imposed on amounts payable to or for the account of such Buyer or other recipient of a payment hereunder pursuant to a law in effect on the date such person becomes a party to or under this Agreement, or such person changes its lending office, except
in each case to the extent that amounts with respect to Taxes were payable either to such person’s assignor immediately before such person became a party hereto or to such person immediately before it changed its lending office; and (d) any withholding Taxes imposed under FATCA.
“Fannie Mae” means the Federal National Mortgage Association or any successor thereto.
“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 and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any intergovernmental agreement entered into in connection with the implementation of the foregoing express provisions of the Code and any fiscal or regulatory legislation or rules adopted pursuant to such intergovernmental agreement.
“FDIA” has the meaning set forth in Section 26.d hereof.
“FDICIA” has the meaning set forth in Section 26.e hereof.
“FHA” means the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
“FHA Approved Mortgagee” means a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.
“FHA Connection System” means the FHA Connection system, together with any successor FHA electronic access portal.
“FHA Loan” means a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract.
“FHA Mortgage Insurance” means, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.
“FHA Mortgage Insurance Contract” means the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
“FHA Regulations” means the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO” means Fair Isaac & Co., or any successor thereto.
“Fidelity Insurance” means insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud.
“Freddie Mac” means the Federal Home Loan Mortgage Corporation or any successor thereto.
“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America and applied on a consistent basis.
“GNMA” means the Government National Mortgage Association and any successor thereto.
“GNMA Guidelines” means the GNMA Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by GNMA.
“GNMA Haircut Amount” means, with respect to a Simultaneously Funded Early Buyout Loan, an amount equal to (i) the amount due to GNMA to repurchase such Mortgage Loan from GNMA less (ii) the Purchase Price-Base for such Mortgage Loan.
“GNMA Security” means a mortgage-backed security guaranteed by GNMA pursuant to the GNMA Guidelines.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions over any Seller Party, Guarantor, any Servicer, Administrative Agent or any Buyer, as applicable.
“Gross Margin” means, with respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note.
“Guarantee” means, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (a) endorsements for collection or deposit in the ordinary course of business, or (b) obligations to make servicing advances for delinquent taxes and insurance or other obligations in respect of a Mortgage Loan or Mortgaged Property, to the extent required by Administrative Agent. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Guarantor” means the Person identified as such in the Guaranty.
“Guaranty” means, if entered into, the guaranty of Guarantor in favor of the Administrative Agent for the benefit of Buyers as the same may be amended, restated, supplemented or otherwise modified from time to time, pursuant to which the Guarantor fully and unconditionally guarantees the obligations of the Seller Parties hereunder.
“HECM Loan” means a home equity conversion Mortgage Loan which is (a) secured by a first lien and (b) is eligible to be insured by FHA.
“HECM Principal Balance” means the principal balance of a HECM Loan (including without limitation all related servicing fees, scheduled payments and/or unscheduled payments, accrued interest and MIP Payments) reduced by all amounts received or collected in respect of principal on such HECM Loan.
“HELOC” means a home equity revolving line of credit secured by a first lien or second lien on the related Mortgaged Property.
“High Cost Mortgage Loan” means a Mortgage Loan (other than an Early Buyout Loa) (a) classified as a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; (b) classified as a “high cost,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees) or (c) having a percentage listed under the Indicative Loss Severity Column (the column that appears in the S&P Anti-Predatory Lending Law Update Table, included in the then-current S&P’s LEVELS® Glossary of Terms on Appendix E).
“Holdback Account” means the account held by Servicer pursuant to the terms of the applicable Servicing Agreement, if any, in each case, into which any Holdback Amounts with respect to BPL – Holdback may be deposited and held. Administrative Agent shall have a perfected security interest in all such accounts and Seller Party acknowledges that Administrative Agent shall have no obligations of any kind to remit any additional amounts into the related Holdback Account.
“Holdback Account Control Agreement” means those certain blocked account control agreements among Administrative Agent, the related Servicer, the related depository bank and the other parties thereto, providing for the Administrative Agent’s control over the related Holdback Account.
“Holdback Amount” means, with respect to a BPL – Holdback, such escrow or holdback amounts that are advanced by the related originator but not disbursed to the related Mortgagor at such Mortgage Loan’s origination date, with such undisbursed amounts being held by the applicable Servicer in the related Holdback Account for funding amounts for the related Mortgagor to improve and rehabilitate the related Mortgaged Property in accordance with the related Servicing Agreement and Mortgage Loan Documents.
“HUD” means the United States Department of Housing and Urban Development or any successor thereto.
“Income” means, with respect to any Purchased Asset or Contributed Asset, without duplication, all principal and income or dividends or distributions received with respect thereto, including any sale or liquidation premiums, Liquidation Proceeds, insurance proceeds, dividends or other distributions payable thereon net of any servicing fees, reimbursements and expenses and any escrow payments related to such Purchased Asset or Contributed Asset.
“Indebtedness” means, for any Person: at any time, and only to the extent outstanding at such time: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business, so long as such trade accounts payable are payable within [***] after the date the respective goods are delivered or the respective services are rendered; (c) indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) payment obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements, including, without limitation, any
Indebtedness arising hereunder; (g) indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (i) indebtedness of general partnerships of which such Person is a general partner and (j) with respect to clauses (a)-(i) above both on and off balance sheet; provided, however, that the foregoing shall exclude Non-Recourse Debt.
“Indemnified Party” has the meaning specified in Section 30.a hereof.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Seller Parties hereunder or under any Program Agreement and (b) to the extent not otherwise described in (a), Other Taxes.
“Independent Manager” means, with respect to each Underlying Entity that is not a trust, the independent manager appointed in accordance with the organizational documents of the Underlying Entity Agreement.
“Index” means, with respect to any adjustable rate Mortgage Loan, the index identified on the Asset Schedule and set forth in the related Mortgage Note for the purpose of calculating the applicable Mortgage Interest Rate.
“Interest Rate Adjustment Date” means the date on which an adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.
“Interest Rate Protection Agreement” means, with respect to any or all of the Purchased Assets, or any short sale of a U.S. Treasury Security, or futures contract, or mortgage related security, or eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement or Take-out Commitment, or similar arrangement, if any, providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by a Seller Party and an Affiliate of Administrative Agent or such other party acceptable to Administrative Agent in its sole discretion, which agreement is acceptable to Administrative Agent in its sole discretion.
“Investment Company Act” means the Investment Company Act of 1940, as amended.
“IRS” means the United States Internal Revenue Service.
“Lender Insurance Authority” means the permission granted to certain FHA-approved lenders to process single family mortgage applications without first submitting documentation to the United States Department of Housing and Urban Development as set forth in 12 U.S.C. § 1715z-21 and the regulations enacted thereunder set forth in 24 CFR § 203.6.
“LIBOR” means for each day, the rate of interest (calculated on a per annum basis) equal to the one month ICE Benchmark Administration (or any successor institution or replacement institution used to administer LIBOR) as reported on the display designated as “BBAM” “Page DG8 4a” on Bloomberg (or such other display as may replace “BBAM” “Page DG8 4a” on Bloomberg) on such date of determination, and if such rate shall not be so quoted, the rate per annum at which Administrative Agent or its affiliates are offered Dollar deposits at or about 11:00 a.m., (New York City time), on such day, by prime banks in the interbank eurodollar market where the eurodollar and foreign currency exchange operations in respect of its loans are then being conducted for delivery on such day for a period of one month, and in an amount comparable to the amount of the Purchase Price of Transactions to be outstanding on such day. “Lien” means any mortgage, lien, pledge, charge, security interest or similar encumbrance.
“Liquidated Asset” means (i) a Purchased Mortgage Loan or Contributed Mortgage Loan that has been sold or refinanced or was subject to a short sale or with respect to which the Mortgaged Property has been sold or (ii) a Contributed REO Property that has been sold.
“Liquidation Proceeds” means, for any Purchased Mortgage Loan or Contributed Asset that becomes a Liquidated Asset, the proceeds received on account of the liquidation thereof.
“Liquidity” means the sum of (a) cash (other than Restricted Cash) and (b) unrestricted and unencumbered Cash Equivalents.
“Loan to Value Ratio” or “LTV” means with respect to any Mortgage Loan, the ratio of the original outstanding principal amount of such Mortgage Loan to the lesser of (a) the Appraised Value of the Mortgaged Property at origination; (b) if the Mortgaged Property was purchased within twelve (12) months of the origination of such Mortgage Loan, the purchase price of the Mortgaged Property and (c) with respect to a HECM Loan, the current HECM Principal Balance.
“Margin Call” has the meaning specified in Section 6.a hereof.
“Margin Deadline” has the meaning specified in Section 6.b hereof.
“Margin Deficit” has the meaning specified in Section 6.a hereof.
“Market Value” has the meaning assigned to such term in the Pricing Side Letter.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business or financial condition of any Seller Party, Guarantor or any Affiliate that is a party to any Program Agreement taken as a whole; (b) a material impairment of the ability of any Seller Party, Guarantor or any Affiliate that is a party to any Program Agreement to perform under any Program Agreement and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Agreement against any Seller Party, Guarantor or any Affiliate that is a party to any Program Agreement, in each case as determined by the Administrative Agent in its good faith discretion.
“Maximum Aggregate Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Aggregate Purchase Price-Incremental” means, [***], (b) in all other instances, [***].
“Maximum Purchase Price-Incremental” means, on each date of determination, for each Purchased Asset and Contributed Asset, an amount equal to the product of [***] and [***].
“Maximum Purchase Price Percentage-Incremental” has the meaning set forth in the Asset Matrix.
“Maximum Value Amount” means, on each date of determination, an amount equal to (a) with respect to any Purchased Asset or Contributed Asset (other than a Business Purpose Mortgage Loan), as of any date of determination, [***] or [***] and (b) with respect to a Business Purpose Mortgage Loan, an amount equal to the least of [***], and [***].
“MERS” means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS System” means the system of recording transfers of mortgages electronically maintained by MERS.
“MIP Payments” means, with respect to a HECM Loan, all mortgage insurance premiums payable to either HUD or a private mortgage insurer, as set forth in the related Asset File.
“Minimum Purchase Price-Incremental” means, on each date of determination, an amount equal to the product of [***] and [***].
“Minimum Purchase Price Percentage-Incremental” has the meaning set forth in the Asset Matrix.
“Monthly Payment” means the scheduled monthly payment of principal and/or interest on a Mortgage Loan.
“Moody’s” means Moody’s Investors Service, Inc. or any successors thereto.
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“Mortgage” means each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a first or second lien on real property and other property and rights incidental thereto, unless such Mortgage is granted in connection with a Co-op Loan, in which case the first lien position is in the Co-op Shares and in the Proprietary Lease relating to such Co-op Shares.
“Mortgage Interest Rate” means the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.
“Mortgage Interest Rate Cap” means, with respect to an adjustable rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the related Mortgage Note.
“Mortgage Loan” means any Approved Product Type which is a mortgage loan (including a home equity loan) evidenced by a Mortgage Note and secured by a first or second lien mortgage, which satisfies the requirements set forth in the Asset Guidelines and Section 13.b hereof; provided, however, that, Mortgage Loans shall not include any High Cost Mortgage Loans.
“Mortgage Loan Documents” means, with respect to each Mortgage Loan, the documents in the related Asset File to be delivered to the Custodian.
“Mortgage Note” means the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
“Mortgaged Property” means the real property or other Co-op Loan collateral securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor” means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.
“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are required to be made by Seller or any ERISA Affiliate and that is subject to Title IV of ERISA.
“Net Income” means, for any period and any Person, the net income of such Person for such period as determined in accordance with GAAP.
“Netting Agreement” means that certain Netting Agreement among Credit Suisse Securities (USA) LLC, CS Group (as such term is defined in the Netting Agreement) and Seller, dated as of the date hereof, as may be amended, restated, supplemented or otherwise modified from time to time.
“Net Worth” means, with respect to any Person, an amount equal to, on a consolidated basis, such Person’s stockholder equity (determined in accordance with GAAP).
“Nominee” means Seller, or any successor Nominee appointed by Administrative Agent following an Event of Default that has occurred and is continuing.
“Non-Agency Non-QM Mortgage Loan” means a Mortgage Loan other than an Early Buyout Loan that (a) does not meet the criteria for a Qualified Mortgage Loan and; (b) meets all applicable criteria as set forth in the Asset Guidelines and (c) is otherwise acceptable to Administrative Agent in its sole discretion.
“Non-Agency QM Mortgage Loan” means a Mortgage Loan other than an Early Buyout Loan that (a) does not meet the criteria for an Agency Mortgage Loan; (b) meets all applicable criteria as set forth in the Asset Guidelines and (c) is otherwise acceptable to Administrative Agent in its sole discretion.
“Non-Participated Purchase Price-Incremental” means any Purchase Price-Incremental that has not been sold to a Participant under a Participation Agreement.
“Non-Performing Mortgage Loan” means a Mortgage Loan (other than a Second Lien Mortgage Loan, HELOC, HECM Loan, Private Label Reverse Mortgage Loan or BPL – Multi-Family) that is [***] days or more delinquent as determined using the Mortgage Bankers Association method of delinquency.
“Non-Recourse Debt” means, with reference to any Indebtedness for which such Person or any Subsidiary thereof as obligor thereunder, the holder of such Indebtedness may not look to such person personally for repayment other than to the extent of any security therefor, and subject to such usual and
customary limited exceptions to the non-recourse nature of such obligation or liability, such as fraud, misappropriation and misapplication.
“Non-QM – Low FICO Mortgage Loan” means a Mortgage Loan (a) that is a Non-Agency Non-QM Mortgage Loan and (b) for which the Mortgagor’s FICO score at the time of origination was at least [***] but not greater than [***].
“Obligations” means (a) all of each Seller Party’s indebtedness, obligations to pay the Repurchase Price on the Repurchase Date, the Price Differential on each Payment Date, and other obligations and liabilities, to Administrative Agent and Buyers or Custodian arising under, or in connection with, the Program Agreements, whether now existing or hereafter arising; (b) any and all sums paid by Administrative Agent, Buyers, or Administrative Agent on behalf of Buyers in order to preserve any Purchased Asset, Contributed Asset or its interest therein; (c) in the event of any proceeding for the collection or enforcement of any of a Seller Party’s indebtedness, obligations or liabilities referred to in clause (a), the reasonable expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Asset or Contributed Asset, or of any exercise by Administrative Agent or Buyers of their rights under the Program Agreements, including, without limitation, attorneys’ fees and disbursements and court costs; and (d) all of the Seller Parties’ indemnity obligations to Administrative Agent, Buyers, any Servicer and Custodian pursuant to the Program Agreements.
“OFAC” has the meaning set forth in Section 13.a(27) hereof.
“Officer’s Compliance Certificate” means the certificate attached hereto as Exhibit C.
“Optional Prepayment” has the meaning specified in Section 4.b hereof.
“Optional Prepayment Date” has the meaning specified in Section 4.b hereof.
“Origination Guidelines” means, with respect to any Mortgage Loan, the standards, procedures and guidelines of the Seller Party for originating Mortgage Loans.
“Other Connection Taxes” means, with respect to Administrative Agent, any Buyer or other recipient, Taxes imposed as a result of a present or former connection between Administrative Agent, such Buyer or other recipient and the jurisdiction imposing such Tax (other than connections arising from Administrative Agent, such Buyer or other recipient 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 under this Agreement or any Program Agreement, or sold or assigned an interest in any Purchased Mortgage Loan or Contributed Asset).
“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes or any excise, sales, goods and services or transfer taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Program Agreement, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made with Seller’s consent).
“Participant” means any participant as contemplated by Section 22.b of this Agreement which has entered into a Participation Agreement.
“Participant Register” has the meaning assigned to such term in Section 22.b hereof.
“Participated Purchase Price-Incremental” means any Purchase Price-Incremental that has been sold to a Participant under a Participation Agreement.
“Participation Agreement” means a participation agreement by and among a Participant, the Administrative Agent and the Buyers in form and substance acceptable to Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Payment Date” means, (a) with respect to the payment of Price Differential, the fifth (5th) day of the month and (b) with respect to the payment of all other amounts due hereunder, the tenth (10th) day of the month; provided, that, in the case of clauses (a) and (b) if any such day is not a Business Day, the Payment Date shall be the next succeeding Business Day and provided, further, the final Payment Date shall be the related Repurchase Date or the Optional Prepayment Date, as applicable.
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Plan” means an employee pension benefit plan as defined in Section 3(2) of ERISA, established or maintained by Seller, Guarantor or any ERISA Affiliate and subject to Title IV of ERISA, other than a Multiemployer Plan.
“Pool” means a subset of Purchased Assets or Contributed Assets subject to Transactions which shall be identified from time to time by the Administrative Agent.
“Pool Subdivision Notice” means a written notice delivered by Administrative Agent to Seller Parties, which shall identify the discrete Purchased Assets or Contributed Assets which shall be allocated to different Pools.
“Post Default Rate” means an annual rate of interest equal to the sum of (a) the Pricing Rate plus (b) an additional [***].
“Power of Attorney” means a Power of Attorney substantially in the form of Exhibit A hereto.
“Price Differential” means, for each Purchased Asset and Contributed Asset, and each Pricing Period, the sum of the Daily Weighted Average Price Differential-Base and the Daily Weighted Average Price Differential-Incremental for such Pricing Period.
“Price Differential-Base” means, with respect to each Purchased Asset and Contributed Asset as of any date of determination, an amount equal to the product of [***] and [***].
“Price Differential-Incremental” means, with respect to each Purchased Asset or Contributed Asset as of any date of determination, an amount equal to the product of [***] and [***].
“Pricing Floor” has the meaning assigned to such term in the Pricing Side Letter.
“Pricing Period” means, with respect to each Payment Date, the period commencing on (and including) the date that is the first calendar day of the preceding month and terminating on (and including) the last calendar day of the preceding month; provided, that the initial Pricing Period shall commence on the initial Purchase Date; provided, further, that if a Purchased Asset or Contributed Asset was repurchased at the full Repurchase Price during such Pricing Period, the Pricing Period for such Purchased Asset or Contributed Asset shall terminate on (and include) such Repurchase Date.
“Pricing Rate” means with respect to each Purchased Asset and Contributed Asset, the sum of [***] and (b) with respect to the Purchase Price-Incremental, if any, [***].
“Pricing Rate-Base” means with respect to the Purchase Price-Base, the sum of (a) the greater of [***] and [***] plus [***].
“Pricing Rate-Incremental” means with respect to the Purchase Price-Incremental, the sum of (a) the greater of [***] and [***] plus [***].
“Pricing Side Letter” means, the letter agreement dated as of the date hereof, among Administrative Agent, Buyers, Seller Parties and the Guarantor, if any, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
“Private Label Reverse Mortgage Loan” means a reverse mortgage loan which (a) is not a HECM Loan; (b) has been acquired in accordance with the Asset Guidelines and (c) is otherwise acceptable to Administrative Agent in its sole discretion.
“Program Account” means the account set forth in Section 9 hereof.
“Program Agreements” means, collectively, this Agreement, the Guaranty, if any, the Custodial Agreement, the Pricing Side Letter, each Underlying Entity Agreement, if any, the Administration Agreement, the Electronic Tracking Agreement, if any, the Netting Agreement, the Custodial Account Control Agreement, each Holdback Account Control Agreement, if any, each Power of Attorney, each Servicing Agreement, if any, and each Servicer Notice, if any.
“Prohibited Person” has the meaning set forth in Section 13.a(27) hereof.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Lease” means the lease on a Co-op Unit evidencing the possessory interest of the owner in the Co-op Shares in such Co-op Unit.
“Protective Advance” means any servicing advance (including, but not limited to, any advance made to pay taxes and insurance premiums; any advance to pay the costs of protecting the value of any real property or other security for a mortgage loan; and any advance to pay the costs of realizing on the value of any such security) made by Seller or Servicer in connection with any Early Buyout Loan that is a Purchased Mortgage Loan.
“Purchase Date” means the date on which Purchased Assets are to be transferred by Seller to Administrative Agent for the benefit of Buyers or a Purchase Price Increase Date, as applicable.
“Purchase Price” means the price at which each Purchased Asset or Contributed Asset is transferred by or contributed to a Seller Party, as applicable, to Administrative Agent for the benefit of Buyers, which shall equal:
(a) on the applicable Purchase Date or Purchase Price Increase Date, the applicable Purchase Price-Base plus the Purchase Price-Incremental, if any;
(b) on any day after the Purchase Date or Purchase Price Increase Date, except where Administrative Agent for the benefit of Buyers and such Seller Party agree otherwise, the amount determined under the immediately preceding clause (a), (i) increased by the amount of any (A) additional Purchase Price-Incremental advanced pursuant to this Agreement plus (B) the amount of any Purchase Price Increase since the initial Transaction and (ii) decreased by the amount of any cash transferred by Seller applied to reduce Seller’s Obligations in accordance with this Agreement.
For the avoidance of doubt, in determining what portion of the Purchase Price is attributable to the Purchase Price-Base or the Purchase Price-Incremental, (x) any increase in the Purchase Price will first be attributed to the Purchase Price Base up to the Asset Value-Base and any excess of Purchase Price over the Asset Value-Base shall be attributed to Purchase Price-Incremental, and (y) (1) prior to the occurrence and continuance of an Event of Default, any decrease in the Purchase Price will first be attributed to the Purchase Price-Incremental until such Purchase Price-Incremental is reduced to zero and any further reduction shall then be applied to the Purchase Price-Base, and (2) on and after the occurrence and continuance of an Event of Default, any decrease in the Purchase Price will first be attributed to the Purchase Price-Base until such Purchase Price-Base is reduced to zero and any further reduction shall then be applied to the Purchase Price-Incremental.
“Purchase Price-Base” means, with respect to any Purchased Asset or Contributed Asset: (a) on the applicable Purchase Date, an amount equal to the product of [***], and [***], and (b) on any day after the applicable Purchase Date, [***].
“Purchase Price-Incremental” means, with respect to any Purchased Asset or Contributed Asset: (a) on the applicable date the Buyer makes an additional advance to the applicable Seller Party or as a reallocation pursuant to Section 6.d of this Agreement in excess of the applicable Asset Value-Base, the amount of [***], and (b) on any day after the applicable date the Buyers make an advance described in clause [***].
“Purchase Price Increase” means (a) an increase in the Purchase Price for a Purchased Certificate based upon the Underlying Entity acquiring additional Contributed Assets to which such portion of the Purchase Price is allocated, as requested by any Seller pursuant to Section 3.b hereof; (b) an increase in the Purchase Price of a HELOC in connection with a Draw, as requested by any Seller Party pursuant to Section 3.b hereof or (c) to the extent a Seller Party previously requested a Purchase Price less than the Asset Value on such prior Purchase Date, such increased portion of the Purchase Price for such Purchased Asset not to exceed the applicable Asset Value on such subsequent Purchase Date.
“Purchase Price Increase Date” means the date on which a Purchase Price Increase is made.
“Purchase Price Percentage” means the sum of (a) with respect to the Purchase Price-Base, [***] and [***].
“Purchase Price Percentage-Base” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-Incremental” means, with respect to each Purchased Asset or Contributed Asset, the percentage equal to [***].
“Purchased Assets” means the Purchased Mortgage Loans and the Purchased Certificates (together with the beneficial ownership interest in the Contributed Assets represented thereby).
“Purchased Certificate” means each Underlying Entity Certificate with respect to each Underlying Entity transferred by Seller to Administrative Agent for the benefit of Buyers in a Transaction hereunder and listed the related Transaction Request.
“Purchased Mortgage Loans” means the collective reference to Mortgage Loans together with the Repurchase Assets related to such Mortgage Loans transferred by Seller to Administrative Agent for the benefit of Buyers in a Transaction hereunder, and/or listed on the related Asset Schedule attached to the related Transaction Request, the Asset File for which such Mortgage Loans the Custodian has been instructed to hold for the benefit of Administrative Agent pursuant to the Custodial Agreement, and which has not been repurchased by the Seller pursuant to the terms of this Agreement.
“Qualified Insurer” means an insurance company duly authorized and licensed where required by law to transact insurance business and approved as an insurer by Fannie Mae or Freddie Mac or GNMA, as applicable.
“Qualified Mortgage Loan” means a Mortgage Loan which is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e).
“Qualified Originator” means an originator of Mortgage Loans which is acceptable under the Asset Guidelines.
“Recognition Agreement” means, an agreement among a Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
“Records” means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by any Seller Party, Guarantor, Servicer or any other Person with respect to a Purchased Asset or Contributed Asset, as applicable. Records shall include the Mortgage Notes, any Mortgages, the Asset Files, the credit files related to the Purchased Asset or Contributed Asset, as applicable and any other instruments necessary to document or service or manage a Purchased Asset or Contributed Asset, as applicable.
“Reference Rate” means LIBOR, or a Successor Rate pursuant to Section 5(c) of this Agreement.
“Register” has the meaning assigned to such term in Section 22 hereof.
“Remittance Date” means the date on which each Servicer is required to remit funds to the Program Account in respect of the Purchased Assets pursuant to the applicable Servicing Agreement and Servicer Notice, as applicable.
“Release Price” means, with respect to each Contributed Asset and on any date of determination, the sum of (a) the outstanding Purchase Price for such Contributed Asset and (b) accrued unpaid Price Differential related to such Contributed Asset, as applicable, in each case, as of the date of such determination.
“REO Property” means real property acquired by or transferred to an Underlying Entity, including a Mortgaged Property (other than a BPL – Multi-Family) acquired through foreclosure of a Purchased Mortgage Loan or Contributed Mortgage Loan or by deed in lieu of such foreclosure, the fee title of which is held by the applicable Underlying Entity.
“REO Repurchase Assets” has the meaning assigned thereto in Section 8.a(3) hereof.
“Re-Performing Mortgage Loan” means a Mortgage Loan (other than a Second Lien Mortgage Loan, HELOC, HECM Loan, Private Label Reverse Mortgage Loan or BPL – Multi-Family) that was previously a Non-Performing Mortgage Loan that is less than sixty (60) days past due as of the last day of a calendar month immediately preceding such date of determination.
“Repledge Transaction” has the meaning set forth in Section 18 hereof.
“Repledgee” means each Repledgee identified by the Administrative Agent from time to time pursuant to the Administration Agreement and Section 18 hereof.
“Reporting Date” means the Business Day prior to the Payment Date as determined in accordance with clause (b) of the definition thereof.
“Repurchase Assets” has the meaning assigned thereto in Section 8.a(3) hereof.
“Repurchase Date” means the earlier of (a) the Termination Date, (b) the date requested pursuant to Section 4.a hereof or (c) the date determined by application of Section 16 hereof.
“Repurchase Price” means the price at which Purchased Assets are to be transferred from the Administrative Agent for the benefit of Buyers to Seller or its designee upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the outstanding Purchase Price and the accrued but unpaid Price Differential invoiced as of the date of such determination or a portion of which may be repaid in connection with an Optional Prepayment by application of the related proceeds.
“Request for Certification” means a notice sent to the Custodian reflecting the sale or contribution of one (1) or more Purchased Mortgage Loans or Contributed Assets to Administrative Agent for the benefit of Buyers hereunder.
“Requirement of Law” means, with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court or other Governmental Authority, 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 as to any Person, the chief executive officer, treasurer, or, with respect to financial matters, the chief financial officer of such Person.
“Restricted Cash” means for any Person, any amount of cash of such Person that is subject to a lien or other encumbrance or is contractually required to be set aside, segregated or otherwise reserved.
“S&P” means Standard & Poor’s Ratings Services, or any successor thereto.
“Scratch and Dent Mortgage Loan” means a first lien Mortgage Loan that (i) is a Mortgage Loan that is eligible for a Transaction and is eligible for sale to a Take-out Investor (other than the Agencies) at the time it becomes a Purchased Asset; (ii) has never had a delinquent payment; (iii) has never had any compliance defects; and (iv) is acceptable to Buyers or Administrative Agent in their sole discretion.
“SEC” means the Securities and Exchange Commission, or any successor thereto.
“Seasoned Performing Loan” means a Mortgage Loan that (i) is not a Non-Performing Mortgage Loan, Re-Performing Mortgage Loan, Business Purpose Mortgage Loan, HELOC, HECM Loan, Early Buyout Loan or Private Label Reverse Mortgage Loan and (ii) for which no payment of principal or interest has been [***] or more days delinquent (determined using the Mortgage Bankers Association method of delinquency) at any time during the [***] month period preceding any date of determination.
“Second Lien Mortgage Loan” means a closed-end Mortgage Loan or HELOC secured by a second lien on the related Mortgaged Property.
“Seller” means Home Point Financial Corporation or its permitted successors and assigns.
“Seller Party” means each Seller and each Underlying Entity.
“Seller Repurchase Assets” has the meaning assigned thereto in Section 8.a(1) hereof.
“Servicer” means Seller or Subservicer.
“Servicer Account” means with respect to Purchased Mortgage Loans and Contributed Assets serviced by any Subservicer, the account as identified in the related Servicing Agreement into which the Servicer deposits Income and related collections.
“Servicer Advance” means a Delinquency Advance or a Protective Advance.
“Servicer Notice” means any servicer notice and acknowledgement, in form and substance acceptable to Administrative Agent in its sole discretion, executed and delivered to Administrative Agent by a Subservicer as the same may be amended, restated, supplemented, or otherwise modified from time to time.
“Servicer Termination Event” means, with respect to a Subservicer, the occurrence of any of the following conditions or events:
(a) such Subservicer becomes subject to any penalties and/or sanctions by any Governmental Authority that could materially and adversely affect such Subservicer’s ability to service the applicable Purchased Mortgage Loans or Contributed Assets in accordance with the related Servicing Agreement;
(b) such Subservicer fails to service the Purchased Mortgage Loans and Contributed Assets subject to Transactions materially in accordance with the related Servicing Agreement in all material respects or otherwise defaults under the related Servicing Agreement or related Servicer Notice, after giving effect to any applicable notice or grace periods;
(c) such Subservicer fails to maintain all state and federal licenses necessary to do business in any jurisdiction where Mortgaged Property or REO Property is located if such license is required, or to be in material compliance with any licensing laws of any jurisdiction where Mortgaged Property or REO Property is located applicable to such Purchased Mortgage Loans and Contributed Assets;
(d) such Subservicer 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;
(e) an event of default occurs under the related Servicing Agreement with respect to such Subservicer;
(f) an Act of Insolvency shall have occurred with respect to such Subservicer; or
(g) a Material Adverse Effect shall occur with respect to such Subservicer.
“Servicing Agreement” means each subservicing agreement entered into among Seller and a Subservicer in form and substance acceptable to Administrative Agent in its sole discretion, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Servicing Rights” means the rights of any Person to administer, service or subservice, the Purchased Mortgage Loans or Contributed Assets or to possess related Records.
“Settlement Agent” means, with respect to any Transaction the subject of which is a Wet Mortgage Loan, the entity approved by Administrative 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 Mortgage Loan is being originated. A Settlement Agent is deemed approved unless Administrative Agent notifies Seller otherwise at any time electronically or in writing.
“Severance Notice” has the meaning set forth in Section 19 hereof.
“Simultaneously Funded Early Buyout Loan” means an Early Buyout Loan which Seller intends to be repurchased from GNMA substantially concurrently with the funding of the related Transaction hereunder.
“SIPA” means the Securities Investor Protection Act of 1970, as amended from time to time.
“State Agency Program Loan” means a mortgage loan originated or acquired by Seller in accordance with the applicable guidelines of, and in anticipation of sale to, the state housing authorities in Acceptable States and as approved by Administrative Agent in writing in its sole discretion.
“Stock Certificate” means, with respect to a Co-op Loan, the certificates evidencing ownership of the Co-op Shares issued by the Co-op Corporation.
“Stock Power” means, with respect to a Co-op Loan, an assignment of the Stock Certificate or an assignment of the Co-op Shares issued by the Co-op Corporation.
“Subordinated Debt” means, for any Person, Indebtedness of such Person which is (a) unsecured, (b) no part of the principal of such Indebtedness is required to be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior to the date which is one year following the Termination Date and (c) the payment of the principal of and interest on such Indebtedness and other obligations of such Person in respect of such Indebtedness are subordinated to the prior payment in full of the principal of and interest (including post-petition obligations) on the Transactions and all other obligations and liabilities of such Person to Administrative Agent and Buyers hereunder on terms and conditions approved in writing by Administrative Agent and all other terms and conditions of which are satisfactory in form and substance to Administrative Agent.
“Subservicer” means any subservicer engaged by a Seller Party and Servicer and approved by Administrative Agent in its sole discretion.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, 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 (1) or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
“Successor Rate” means a rate determined by Administrative Agent in accordance with Section 5.c hereof.
“Successor Rate Conforming Changes” means with respect to any proposed Successor Rate, any spread adjustments or other conforming changes to the timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of Administrative Agent, to reflect the adoption of such Successor Rate and to permit the administration thereof by Administrative Agent in a manner substantially consistent with market practice.
“Take-out Commitment” means a commitment of Seller to either (a) sell one (1) or more identified Mortgage Loans to a Take-out Investor or (b) (i) swap one (1) or more identified Mortgage Loans with a Take-out Investor that is an Agency for an Agency Security, and (ii) sell the related Agency Security to a Take-out Investor, and in each case, the corresponding Take-out Investor’s commitment back to Seller to effectuate any of the foregoing, as applicable.
“Take-out Investor” means (a) an Agency or (b) other institution which has made a Take-out Commitment and has been approved by Administrative Agent for the benefit of Buyers.
“Taxes” means any and all present or future taxes (including social security contributions and value added taxes), levies, imposts, duties (including stamp duties), deductions, charges (including ad valorem charges), withholdings (including backup withholding), assessments, fees or other charges of any nature whatsoever imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Termination Date” has the meaning assigned to such term in the Pricing Side Letter.
“Test Period” means any prior calendar quarter.
“Third Party Evaluator” means an appraiser approved by Administrative Agent in its sole good faith discretion.
“TILA-RESPA Integrated Disclosure Rule” means the Truth-in-Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure Rule, adopted by the Bureau of Consumer Financial Protection, which is effective for residential mortgage loan applications received on or after October 3, 2015.
“Transaction” has the meaning set forth in Section 1 hereof.
“Transaction Request” means a request via email from a Seller Party to Administrative Agent notifying Administrative Agent that such Seller Party wishes to enter into a Transaction hereunder that indicates that it is a Transaction Request under this Agreement. For the avoidance of doubt, a Transaction Request may refer to multiple Purchased Assets and Contributed Assets; provided that each Purchased Asset and Contributed Asset shall be deemed to be subject to its own Transaction.
“Trust Receipt” means, with respect to any Transaction as of any date, a receipt in the form attached as an exhibit to the Custodial Agreement.
“UETA” means the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.
“Underlying Entity” means any subsidiary of a Seller joined hereto from time to time or its permitted successors or assigns as approved by Administrative Agent in its sole discretion.
“Underlying Entity Agreement” means those certain organizational documents of the applicable Underlying Entity.
“Underlying Entity Assignment Agreement” means any agreement pursuant to which an Underlying Entity acquires Contributed Assets.
“Underlying Entity Certificate” means any certificate evidencing 100% of the Underlying Entity Interests for an Underlying Entity.
“Underlying Entity Interests” means, with respect to each Underlying Entity, any and all of the Capital Stock in such Underlying Entity, including, without limitation, all its rights to participate in the operation or management of such Underlying Entity and all its rights to properties, assets, interests and distributions under the Underlying Entity Agreement in respect of such trust interests. “Underlying Entity Interests” also includes (i) all accounts receivable arising out of the Underlying Entity Agreement; (ii) all general intangibles arising out of the Underlying Entity Agreement; and (iii) to the extent not otherwise included, all proceeds of any and all of the foregoing (including within proceeds, whether or not otherwise included therein, any and all contractual rights of the applicable Seller under any revenue sharing or similar agreement to receive all or any portion of the revenues or profits of the Underlying Entity).
“Uniform Commercial Code” or “UCC” means 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.
“U.S. Person” means any Person that is a “United States person” as defined in section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning set forth in Section 11.e(ii)(B) hereof.
“USDA” means the United States Department of Agriculture or any successor thereto.
“USDA Approved Lender” means a lender which is approved by the USDA to act as a lender in connection with the origination of USDA Loans.
“USDA LINC” means the USDA Lender Interactive Network Connection, together with any successor USDA electronic access portal.
“USDA Loan” means a first lien Mortgage Loan guaranteed by and originated in accordance with the criteria established by the USDA pursuant to the USDA Rural Development Guaranteed Housing Loan Program.
“USDA Loan Guaranty Agreement” means the agreement evidencing the contractual obligation of the USDA respecting the guaranty of an USDA Loan.
“VA” means the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.
“VA Approved Lender” means a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.
“VA Loan” means a Mortgage Loan which is the subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate, or a Mortgage Loan which is a vendor loan sold by the VA.
“VA Loan Guaranty Agreement” means 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, as amended.
“Value Reduction Event” has the meaning assigned to such term in the Pricing Side Letter.
“Weighted Average Pricing Rate-Base” means, with respect to all Purchased Assets and Contributed Assets as of any date of determination, an amount equal to [***].
“Weighted Average Pricing Rate-Incremental” means, with respect to all Purchased Assets or Contributed Assets as of any date of determination, an amount equal to [***].
“Wet Delivery Date” has the meaning set forth in the Pricing Side Letter.
“Wet Mortgage Loan” means a Mortgage Loan (other than an Early Buyout Loan) that Seller is selling to Administrative Agent for the benefit of Buyers simultaneously with the origination thereof.
3. | Program; Initiation of Transactions |
a. From time to time, in the sole discretion of Buyers, Administrative Agent (for the benefit of Buyers) may facilitate the purchase by Buyers from Seller certain Mortgage Loans and Contributed Assets that have been originated and/or purchased by Seller Parties. This Agreement is not a commitment by Administrative Agent on behalf of Buyers to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for Administrative Agent on behalf of Buyers to enter into Transactions with Seller. Seller hereby acknowledges that Administrative Agent on behalf of Buyers is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement. All Purchased Mortgage Loans and Contributed Assets shall exceed or meet the Asset Guidelines, and shall be serviced by Seller or Servicer, as applicable. The sum of (i) the Aggregate Purchase Price-Base and (ii) the Aggregate Purchase Price-Incremental for all Non-Participated Purchase Price-Incremental for all outstanding Transactions shall not exceed the Maximum Aggregate Purchase Price. The Aggregate Purchase Price-Incremental of Purchased Mortgage Loans and Contributed Assets subject to outstanding Transactions shall not exceed the Maximum Aggregate Purchase Price-Incremental.
b. From time to time Administrative Agent, on behalf of Buyers, may purchase the Underlying Entity Certificates from Seller. From time to time and in accordance with Section 3.c below, (i) any Seller Party may request and Administrative Agent, on behalf of Buyers, may fund additional Purchase Price Increases in connection with the acquisition of additional Contributed Assets by the applicable Underlying Entity and the corresponding increases of the Purchase Price on account of the Purchased Certificates; (ii) any Seller Party may request and Administrative Agent, on behalf of Buyers, may fund additional Purchase Price Increases in connection with a request to fund additional Purchase Price for a Purchased Asset or Contributed Asset that was not purchased at the full Asset Value on the original Purchase Date and (iii) any Seller Party may request and Administrative Agent, on behalf of Buyers, may fund additional Purchase Price Increases with respect to a HELOC in connection with a Draw. The aggregate Purchase Price of Purchased Assets subject to outstanding Transactions shall not exceed the Maximum Aggregate Purchase Price.
c. Seller shall request that Administrative Agent enter into a Transaction by delivering (i) to Administrative Agent, a Transaction Request by [***] (New York City time) on the proposed Purchase Date for all Mortgage Loans and (ii) to Administrative Agent and Custodian an Asset Schedule, in accordance with the Custodial Agreement. In the event the Asset Schedule provided by a Seller Party contains erroneous computer data, is not formatted properly, or the computer fields are otherwise improperly aligned, Administrative Agent shall provide written or electronic notice to Seller describing such error and Seller shall correct the computer data, reformat, or properly align the computer fields itself and resubmit the Asset Schedule as required herein.
d. Upon transfer of a Purchased Certificate to Administrative Agent for the benefit of Buyers as set forth herein and until termination of such Transaction as set forth herein, ownership of such Purchased Certificate is vested in the Administrative Agent on behalf of Buyers, and record title to each Contributed Asset shall be retained by applicable Underlying Entity.
e. With respect to a Simultaneously Funded Early Buyout Loan for which any Seller Party has submitted a Transaction Request, provided that the GNMA Haircut Amount has been remitted to the Administrative Agent, Administrative Agent shall remit the purchase price due to GNMA for such Simultaneously Funded Early Buyout Loan to Servicer. Such Seller Party shall cause Servicer to repurchase such Simultaneously Funded Early Buyout Loan from GNMA no later than the Business Day following the date of remittance of proceeds by Administrative Agent to
Servicer. In the event that Servicer fails to repurchase such Simultaneously Funded Early Buyout Loan, such Seller Party shall cause Servicer to remit the Purchase Price for such Simultaneously Funded Early Buyout Loan to the Program Account within three (3) Business Days following the related Purchase Date. Notwithstanding the foregoing, when a Simultaneously Funded Early Buyout Loan is repurchased, the Purchase Date hereunder shall be deemed the date of remittance of proceeds by Administrative Agent to Servicer.
f. Upon the satisfaction of the applicable conditions precedent set forth in Section 10 hereof, all of Seller Parties’ interest in the Repurchase Assets shall pass to Administrative Agent on behalf of Buyers on the Purchase Date, against the transfer of the Purchase Price to Seller Parties. Upon transfer of the Purchased Assets to Administrative Agent on behalf of Buyers as set forth in this Section and until termination of any related Transactions as set forth in Section 4 or 16 hereof, ownership of each Purchased Asset, including each document in the related Asset File and Records, is vested in the Buyers identified under the Administration Agreement. For the avoidance of doubt, the parties acknowledge and agree that the Purchased Assets shall be held by the Administrative Agent for the benefit of Buyers, as more particularly set forth in the Administration Agreement.
g. With respect to each Wet Mortgage Loan, by no later than the Wet Delivery Date, Seller shall cause the related Settlement Agent to deliver to the Custodian the remaining documents in the Asset File, as more particularly set forth in the Custodial Agreement.
4. | Repurchase; Conversion to REO Property |
a. Seller shall repurchase the related Purchased Assets from Administrative Agent for the benefit of Buyers on each related Repurchase Date. In addition, Seller may repurchase Purchased Assets without penalty or premium on any date. If Seller intends to make such a repurchase, Seller shall give same day prior written notice to Administrative Agent, designating the Purchased Assets to be repurchased. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Asset or Contributed Asset (but Liquidation Proceeds received by Administrative Agent shall be applied to reduce the Repurchase Price for such Purchased Asset on each Payment Date except as otherwise provided herein). Seller is obligated to repurchase and take physical possession of the Purchased Assets from Administrative Agent or its designee (including the Custodian) at Seller’s expense on the related Repurchase Date and Administrative Agent or its designee shall make such Purchased Asset available to Seller for repurchase on the related Repurchase Date to the extent the Repurchase Price is received prior to [***] (New York City time). For the avoidance of doubt, in connection with a payment of the Repurchase Price with respect to any Designated Asset, Sellers shall only be entitled to pay either (a) the full Repurchase Price or (b) a portion of the Repurchase Price so long as the remaining outstanding Repurchase Price is at least equal to the Minimum Purchase Price-Incremental.
b. When the Contributed Assets supporting a portion of the Purchase Price of the Transaction related to a Purchased Certificate is desired to be sold or otherwise liquidated, the Seller shall make payment to Administrative Agent in order to prepay the Repurchase Price (an “Optional Prepayment”) in an amount equal to the Release Price on each date such Contributed Assets are desired to be sold or otherwise liquidated (each, an “Optional Prepayment Date”). Such payment shall serve as a partial prepayment of the Repurchase Price in connection with the Transaction in respect of the related Purchased Certificate. Seller shall pay the Optional Prepayment and take (or cause its designee to take) physical possession of the Contributed Assets from the Underlying Entity or its designee (including the Custodian) at the Seller’s expense on the related Optional Prepayment Date.
c. Provided that no Default shall have occurred and is continuing, and Administrative Agent has received the related Repurchase Price (excluding accrued and unpaid Price Differential, which, for the avoidance of doubt, shall be paid on the next succeeding Payment Date) upon repurchase of the Purchased Assets or Contributed Assets, as applicable, Administrative Agent and Buyers will each be deemed to have released their respective interests hereunder in the Purchased Assets and other Repurchase Assets related thereto, as applicable.
d. With respect to a Liquidated Asset, the related Seller Party agrees to, within one (1) Business Day of such liquidation, (i) provide Administrative Agent with a copy of a report from the applicable Servicer (or Seller Party if Seller Party is the Servicer) indicating that such Purchased Mortgage Loan or Contributed REO Property has been liquidated, (ii) remit or cause the Servicer to remit the Repurchase Price or Optional Prepayment, as applicable in accordance herewith and (iii) provide Administrative Agent a notice specifying each Purchased Mortgage Loan or Contributed Asset that has been liquidated. Provided that no Event of Default shall have occurred and is continuing, Administrative Agent acting on behalf of Buyers agrees to permit the release of the Liquidated Asset to the applicable Seller Party concurrently with receipt of confirmation that proceeds have been received by Seller Party or the applicable Servicer.
e. With respect to a Purchased Mortgage Loan or Contributed Mortgage Loan becoming a REO Property as contemplated by Section 8 hereof, Seller shall, on the next subsequent Reporting Date, (i) notify Administrative Agent in writing that such Purchased Mortgage Loan or Contributed Mortgage Loan has become a REO Property and the value attributed to such Contributed REO Property by Seller; (ii) deliver to Administrative Agent and Custodian an Asset Schedule with respect to such REO Property; (iii) be deemed to make the representations and warranties listed on Schedule 1-B hereto with respect to such REO Property; and (iv) without limiting the requirements set forth in the definition of Asset Value, deliver to Administrative Agent a true and complete copy of a BPO of such REO Property dated no greater than [***] from such date. The acquisition of such Contributed REO Property by the applicable Underlying Entity shall result in an applicable change in the value of the Underlying Entity Certificate (as determined in accordance with the definition of Asset Value) and any Purchase Price Increase or Margin Deficit attributed to any change in category shall be paid by the Seller.
5. | Price Differential |
a. On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential for the preceding Pricing Period shall be settled in cash on each related Payment Date. [***] Business Days prior to the Payment Date, Administrative Agent shall give Seller written or electronic notice of the amount of the Price Differential due on such Payment Date. On the Payment Date, Seller shall pay to Administrative Agent the Price Differential for the benefit of Buyers for such Payment Date (along with any other amounts then due and owing pursuant to Section 7 hereof, and Section 3 of the Pricing Side Letter), by wire transfer in immediately available funds.
b. If Seller fails to pay all or part of the Price Differential by [***] (New York City time) on the related Payment Date, with respect to any Purchased Asset, Seller shall be obligated to pay to Administrative Agent for the benefit of Buyers (in addition to, and together with, the amount of such Price Differential) interest on the unpaid Repurchase Price at a rate per annum equal to the Post Default Rate until the Price Differential is received in full by Administrative Agent for the benefit of Buyers.
c. If prior to any Payment Date, Administrative Agent determines in its sole discretion that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining LIBOR, LIBOR is no longer in existence, or the administrator of LIBOR or a Governmental Authority having jurisdiction over Administrative Agent has made a public statement identifying a specific date after which LIBOR shall no longer be made available or used for determining the interest rate of loans, Administrative Agent may give prompt notice thereof to Seller, whereupon the rate for such period that will replace LIBOR for such period, and for all subsequent periods until such notice has been withdrawn by Administrative Agent, shall be the greater of (i) an alternative benchmark rate (including any mathematical or other adjustments to the benchmark rate (if any) incorporated therein) and (ii) [***], together with any proposed Successor Rate Conforming Changes, as determined by Administrative Agent in its sole discretion (any such rate, a “Successor Rate”). If Administrative Agent shall exercise its rights under this Section 5.c, then Seller shall have the right to terminate this Agreement and all Transactions hereunder upon [***] prior written notice to Administrative Agent by payment in full to Administrative Agent of the then outstanding Repurchase Price of all Purchased Assets without payment of penalty. For the avoidance of doubt, no Make Whole Amount shall be due for the month in which Seller terminates this Agreement and repurchases all Transactions hereunder pursuant to this this Section 5.c.
6. | Margin Maintenance; Reallocation of Purchase Price |
a. If at any time the outstanding Purchase Price of any Purchased Asset and Contributed Asset subject to a Transaction is greater than the Asset Value of such Purchased Asset and Contributed Asset subject to a Transaction (a “Margin Deficit”), then Administrative Agent may by notice to Seller require Seller to transfer to Administrative Agent for the benefit of Buyers cash in an amount at least equal to the Margin Deficit (such requirement, a “Margin Call”).
b. Notice delivered pursuant to Section 6.a above may be given by any written or electronic means. Any notice given (i) before [***] (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than [***] (New York City time) on such Business Day and (ii) after [***] (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than [***] (New York City time) on the following Business Day (the foregoing time requirements for satisfaction of a Margin Call are referred to as the “Margin Deadlines”). The failure of Administrative Agent, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Administrative Agent to do so at a later date. Seller and Administrative Agent each agree that a failure or delay by Administrative Agent to exercise its rights hereunder shall not limit or waive Administrative Agent’s or Buyers’ rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller. Any cash transferred to Buyer pursuant to Section 6.b shall be credited to the Repurchase Price of the related Transaction.
c. In the event that a Margin Deficit exists with respect to any Purchased Asset or Contributed Asset, Administrative Agent may retain any funds received by it to which the Seller would otherwise be entitled hereunder, which funds (i) shall be held by Administrative Agent against the related Margin Deficit and (ii) may be applied by Administrative Agent against the Repurchase Price of any such Purchased Asset or Contributed Asset for which the related Margin Deficit remains otherwise unsatisfied. Notwithstanding the foregoing, the Administrative Agent retains the right, in its sole discretion, to make a Margin Call in accordance with the provisions of this Section 6.
d. If at any time the outstanding Purchase Price-Base of any Purchased Mortgage Loan or Contributed Asset which is subject to a Transaction is greater than the Asset Value-Base of
such Purchased Mortgage Loan or Contributed Asset (a “Purchase Price Deficit-Base”), and such Purchase Price Deficit-Base does not constitute a Margin Deficit, then the amount of such Purchase Price Deficit-Base shall be reallocated by the Administrative Agent and added to the Purchase Price-Incremental; provided that the Administrative Agent agrees to promptly notify (which for this purpose may be by electronic communication) the Seller after such reallocation; provided further that the failure to give such notice shall not affect the validity of such reallocation and application of such funds.
7. | Income Payments |
a. If Income is paid in respect of any Purchased Asset or Contributed Asset during the term of a Transaction, such Income shall be held in trust for the Administrative Agent and Buyers and shall constitute the property of the applicable Buyers except for tax purposes as to which it shall be treated as income and property of Seller.
b. Seller shall, and to the extent it engages a Subservicer shall cause such Subservicer to, deposit all applicable Income with respect to Purchased Assets and Contributed Assets into the related Custodial Account and Servicer Account, as applicable, in accordance with the applicable Servicing Agreement and Servicer Notice.
c. Provided no Event of Default has occurred and is continuing, and the Price Differential has been paid to Administrative Agent for the benefit of Buyers in accordance with Section 5 hereof, Seller shall be entitled to the remittance of all Income related to Purchased Assets and Contributed Assets that are Agency Mortgage Loans and Non-Agency QM Mortgage Loans.
d. If any Event of Default has occurred and is continuing, with respect to Agency Mortgage Loans, Non-Agency QM Mortgage Loans and Early Buyout Loans, Seller shall remit all Income in its possession to the Program Account.
e. Provided no Event of Default has occurred and is continuing other than Agency Mortgage Loans, Non-Agency QM Mortgage Loans and Early Buyout Loans, Seller shall and to the extent it engages a Subservicer shall cause such Subservicer to deposit all Income (net of any servicing fees and advances then due and owing pursuant to the terms of the applicable Servicing Agreement related to such Subservicer) to the Program Account (x) with respect to any Subservicer, on each Remittance Date and (y) to the extent Seller is the Servicer, within two (2) Business Days of receipt thereof.
f. Notwithstanding any provision to the contrary in this Section 7, within three (3) Business Days of receipt by Seller or any Subservicer of any prepayment of principal in full, with respect to a Purchased Asset or Contributed Asset, Seller shall or shall cause such Subservicer to remit such amount to the Program Account and Administrative Agent shall immediately apply any such amount received by Buyers or the Administrative Agent to reduce the amount of the Repurchase Price due upon termination of the related Transaction.
g. With respect to each Early Buyout Loan, the Nominee shall be listed as the mortgagee of record. All Income (including, without limitation, claims and proceeds) received from HUD, VA or USDA, as applicable, on account of each Early Buyout Loan shall be deposited into the Clearing Account within one (1) Business Day of receipt thereof. Seller shall and shall cause the Nominee to remit all such funds from the Clearing Account to the Custodial Account within two (2) Business Days. To the extent HUD, VA or USDA deducts any amounts owing to it by Seller, any Servicer or Nominee, Seller shall (A) give prompt written notice thereof to Administrative
Agent and (B) within one (1) Business Day following settlement date of the claim, deposit such deducted amounts into the Custodial Account.
h. Provided that no Event of Default has occurred and is continuing, on each Repurchase Date, Administrative Agent shall remit all Income received with respect to the Purchased Assets and Contributed Assets to the Program Account as follows:
(1) first, to Administrative Agent, for the benefit of the applicable Buyers, in reduction of the Repurchase Price of any liquidation, pay-off or repurchase of any Purchased Asset up to the amount advanced by Administrative Agent on behalf of Buyers;
(2) second, without limiting the rights of Administrative Agent under Section 6 hereof, to Administrative Agent for the benefit of Buyers, in the amount of any unpaid Margin Deficit; and
(3) third, to, or at the direction of Sellers, any remaining amounts.
i. Provided that no Event of Default has occurred and is continuing, on each Payment Date, Administrative Agent shall remit all Income received to the Program Account with respect to the Purchased Assets and Contributed Assets as follows:
(1) first, to Administrative Agent, for the benefit of Buyers, in payment of any accrued and unpaid Price Differential, to the extent not paid by Seller to Administrative Agent pursuant to Section 5 hereof;
(2) second, to Administrative Agent, for the benefit of the applicable Buyers, in reduction of the Repurchase Price of any liquidation, pay-off or repurchase of any Purchased Asset up to the amount advanced by Administrative Agent on behalf of Buyers;
(3) third, without limiting the rights of Administrative Agent under Section 6 hereof, to Administrative Agent for the benefit of Buyers, in the amount of any unpaid Margin Deficit;
(4) fourth, to the payment of all other Obligations then due and owing to Administrative Agent and Buyers pursuant to this Agreement; and
(5) fifth, to, or at the direction of Seller, any remaining amounts.
j. On the Termination Date or upon the occurrence of an Event of Default that has occurred and is continuing, all Income received with respect to the Purchased Assets and Contributed Assets shall be allocated as directed by Administrative Agent as follows:
(1) first, to Administrative Agent in payment of any accrued and unpaid Price Differential, to the extent not paid by the Seller to Administrative Agent pursuant to Section 5;
(2) second, to Administrative Agent, for the benefit of the applicable Buyers, in reduction of the Repurchase Price of any liquidation, pay-off or repurchase of any Purchased Asset up to the amount advanced by Administrative Agent on behalf of Buyers;
(3) third, without limiting the rights of Administrative Agent under Section 6 hereof, to Administrative Agent for the benefit of Buyers, in the amount of any unpaid Margin Deficit;
(4) fourth, to the payment of all other Obligations until paid in full; and
(5) fifth, to, or at the direction of Seller, any remaining amounts.
k. To the extent that Administrative Agent receives any funds from a Take-out Investor with respect to the purchase by such Take-out Investor of a Purchased Asset or Contributed Asset, the Administrative Agent shall promptly apply such funds to the Repurchase Price of the Purchased Asset or Contributed Asset purchased by such Take-out Investor and shall promptly remit any excess to the applicable Seller.
8. | Security Interest |
a. Repurchase Assets.
(1) On each Purchase Date, Seller hereby sells, assigns and conveys all rights and interests in the Purchased Assets identified on the related Asset Schedule or delivered to the Administrative Agent for the benefit of Buyers and Repledgees. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and in any event, Seller hereby pledges to Administrative Agent for the benefit of Buyers as security for the performance by Seller of the Obligations and hereby grants, assigns and pledges to Administrative Agent for the benefit of Buyers a fully perfected first priority security interest in the Purchased Assets, any Agency Security or right to receive such Agency Security when issued to the extent backed by any of the Purchased Mortgage Loans, the Records solely to the extent related to such Purchased Assets, and all related Servicing Rights, the rights to reimbursement of Servicer Advances, solely with respect to such Purchased Assets, the Program Agreements (to the extent such Program Agreements and Seller’s right thereunder relate to the Purchased Assets and related Contributed Assets), each Underlying Entity Agreement to the extent assignable and to the extent related to such Purchased Assets, the obligations of Seller to deliver and convey each Contributed Asset to the applicable Underlying Entity, any related Take-out Commitment (to the extent assignable), any Property relating to the Purchased Assets, all insurance policies and insurance proceeds relating to any Purchased Asset or the related Mortgaged Property (to the extent assignable), including, but not limited to, any payments or proceeds under any related primary insurance and hazard insurance and FHA Mortgage Insurance Contracts, VA Loan Guaranty Agreements and USDA Loan Guaranty Agreements (if any, including for the avoidance of doubt all debenture interest payable by HUD on account of any Early Buyout Loan), Income, Interest Rate Protection Agreements (to the extent assignable and related to the Purchased Assets), accounts (including any interest of Seller in escrow accounts) relating solely to any Purchased Asset, the Custodial Account and all amounts deposited therein, each Holdback Account and any amounts deposited therein, instruments, payments, rights to payment (including payments of interest or finance charges), any contract rights, general intangibles and other assets, in each case, relating solely to the Purchased Assets (including, without limitation, any other accounts) or any interest in the Purchased Assets, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Transaction Request and/or Trust Receipt, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Seller Repurchase Assets”).
(2) On each Purchase Date, the applicable Underlying Entity hereby sells, assigns and conveys all rights and interests in the Contributed Mortgage Loans identified on the related Asset Schedule or delivered to the Administrative Agent for the benefit of Buyers and Repledgees. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and in any event, such Underlying Entity hereby pledges to Administrative Agent for the benefit of Buyers as security for the performance by such Underlying Entity of the Obligations and hereby grants, assigns and pledges to Administrative Agent for the benefit of Buyers a fully perfected first priority security interest in the Contributed Mortgage Loans, any Agency Security or right to receive such Agency Security when issued to the extent backed by any of the Contributed Mortgage Loans, the Records, and all related Servicing Rights, the Program Agreements (to the extent such Program Agreements and such Underlying Entity’s right thereunder relate to the related Contributed Mortgage Loans), the applicable Underlying Entity Agreement, any related Take-out Commitment, any Property relating to the Contributed Mortgage Loans, all insurance policies and insurance proceeds relating to any Contributed Mortgage Loan or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance and hazard insurance and FHA Mortgage Insurance Contracts, VA Loan Guaranty Agreements and USDA Loan Guaranty Agreements (if any), Income, Interest Rate Protection Agreements, accounts (including any interest of such Underlying Entity in escrow accounts) relating to any Contributed Mortgage Loan, the Custodial Account and all amounts deposited therein, instruments, payments, rights to payment (including payments of interest or finance charges), any contract rights, general intangibles and other assets, in each case, relating to the Contributed Mortgage Loans (including, without limitation, any other accounts) or any interest in the Contributed Mortgage Loans, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Transaction Request and/or Trust Receipt, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Contributed Repurchase Assets”).
(3) In order to further secure the Obligations hereunder, each Underlying Entity hereby grants, assigns and pledges all rights and interests in the Contributed REO Properties identified on the related Asset Schedule or delivered to the Administrative Agent for the benefit of Buyers and Repledgees. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and in any event, such Underlying Entity hereby pledges to Administrative Agent for the benefit of Buyers as security for the performance by such Underlying Entity of the Obligations and hereby grants, assigns and pledges to Administrative Agent for the benefit of Buyers a fully perfected first priority security interest in the Contributed REO Properties, the Records, and all related Servicing Rights, the Program Agreements (to the extent such Program Agreements and such Underlying Entity’s right thereunder relate to the Contributed REO Properties), the applicable Underlying Entity Agreement, the obligations of such Underlying Entity to deliver and convey each Contributed REO Property to such Underlying Entity, any related Take-out Commitment, any REO Property relating to the Contributed REO Properties, all insurance policies and insurance proceeds relating to any Contributed REO Property or the related REO Property, including, but not limited to, any payments or proceeds under any related primary insurance and hazard insurance (if any), Income, Interest Rate Protection Agreements, accounts (including any interest of such Underlying Entity in escrow accounts) relating to any Contributed REO Property, the Custodial Account and all amounts deposited therein, instruments, payments, rights to payment (including payments of interest or finance charges), any contract rights, general intangibles and other assets, in each case, relating to the Contributed REO Properties (including, without limitation, any other accounts) or any interest in the Contributed REO Properties, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests
as are specified on a Transaction Request and/or Trust Receipt, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “REO Repurchase Assets” and together with the Seller Repurchase Assets and the Contributed Repurchase Assets, the “Repurchase Assets”).
b. Acquisition of REO Property. If an Underlying Entity acquires any REO Property by acquiring any Mortgage Note in connection with the foreclosure of the related Purchased Mortgage Loan or Contributed Asset, transferring the real property underlying the Mortgage Note in lieu of foreclosure or otherwise transferring of such real property, such Underlying Entity shall cause such real property to be taken by deed, or by means of such instruments as is provided by the Governmental Authority governing the transfer, or right to request transfer and issuance of the deed, or such instrument as is provided by the related Governmental Authority, or to be acquired through foreclosure sale in the jurisdiction in which the REO Property is located.
c. Servicing Rights. Each Seller Party acknowledges that it has no rights to service the Purchased Mortgage Loans or Contributed Assets, but only has rights as a party to the applicable Servicing Agreement. Without limiting the generality of the foregoing and in the event that a Seller Party is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, each Seller Party grants, assigns and pledges to Administrative Agent a security interest in the Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
d. Additional Interests. If Seller shall, as a result of ownership of the Underlying Entity Interests, become entitled to receive or shall receive any certificate evidencing any Underlying Entity Interests or other equity interest, any option rights, or any equity interest in the Underlying Entity Interests, whether in addition to, in substitution for, as a conversion of, or in exchange for the Underlying Entity Interests, or otherwise in respect thereof, Seller shall accept the same as the Administrative Agent’s agent, hold the same in trust for the Administrative Agent and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by the Seller to the Administrative Agent, if required, together with an undated transfer power, if required, covering such certificate duly executed in blank, or if requested, deliver such Purchased Certificate re-registered in the name of Administrative Agent, to be held by the Administrative Agent subject to the terms hereof as additional security for the Obligations. Any sums paid upon or in respect of the Underlying Entity Interests upon the liquidation or dissolution of the applicable Underlying Entity, or otherwise shall be paid over to the Administrative Agent as additional security for the Obligations. If following the occurrence and during the continuation of an Event of Default, any sums of money or property so paid or distributed in respect of the Underlying Entity Interests shall be received by Seller, Seller shall, until such money or property is paid or delivered to the Administrative Agent for the benefit of Buyers, hold such money or property in trust for the Administrative Agent segregated from other funds of Seller as additional security for the Obligations. Administrative Agent shall cooperate with Seller and promptly take any action required pursuant to the applicable Program Agreements in accordance with its policies to cause any Purchased Certificate registered in the name of Administrative Agent to be re-registered and delivered to Seller upon repurchase of such Purchased Certificate by Seller.
e. Underlying Entity Interests as Securities. The parties acknowledge and agree that the Underlying Entity Interests shall constitute and remain “securities” as defined in Section 8-102 of the Uniform Commercial Code; Seller Parties covenant and agree that (i) the Underlying Entity Interests are not and will not be dealt in or traded on securities exchanges or securities markets and
(ii) the Underlying Entity Interests are not and will not be investment company securities within the meaning of Section 8-103 of the Uniform Commercial Code. Seller shall, at its sole cost and expense, take all steps as may be necessary in connection with the delivery of the Purchased Certificates to Administrative Agent, with the appropriate documents to transfer power, dated and executed in blank, and the pledge of all Underlying Entity Interests to Administrative Agent on behalf of Buyers.
f. Cash Dividends; Voting Rights. Subject to this Section, after the occurrence and continuance of an Event of Default, Administrative Agent as the holder shall exercise all voting rights with respect to the Purchased Certificates, as applicable. Prior to the occurrence and continuance of an Event of Default, the Seller shall exercise all voting rights with respect to the Purchased Certificates, but subject in all events to the consent rights of Administrative Agent as set forth in each Underlying Entity Agreement. In no event shall any vote be cast or other action taken which would impair the Repurchase Assets or Purchased Certificates, as applicable, or which would result in a violation of any provision of this Agreement. Without limiting the generality of the foregoing, Administrative Agent shall have no obligation to (i) vote to enable, or take any other action to permit the Underlying Entity to issue any Capital Stock of any nature or to issue any other Capital Stock convertible into or granting the right to purchase or exchange for any trust interests of the Underlying Entity; (ii) sell, assign, transfer, exchange or otherwise dispose of, or grant any option with respect to, the Purchased Certificates; (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, the Purchased Certificates, the Repurchase Assets, or any interest therein, except for the Lien provided for by this Agreement; or (iv) enter into any agreement (other than each Underlying Entity Agreement and this Agreement and any agreements contemplated hereunder) or undertaking restricting the right or ability of Seller to sell, assign or transfer any Purchased Certificate.
g. Financing Statements. Each Seller Party agrees to execute, deliver and/or file such documents and perform such acts as may be reasonably necessary to fully perfect Administrative Agent’s security interest created hereby. Furthermore, the Seller Parties hereby authorize the Administrative Agent to file financing statements relating to (i) the Seller Repurchase Assets as the Administrative Agent, at its option, may deem appropriate and (ii) solely with respect to Underlying Entities, the Contributed Repurchase Assets and REO Repurchase Assets, as the Administrative Agent, at its option, may deem appropriate, describing the collateral as “all assets of the Debtor” or words to that effect, and any limitations on such collateral description, notwithstanding that such collateral description may be broader in scope than the Contributed Repurchase Assets and REO Repurchase Assets described in this Agreement; provided, that, in each case, the Seller Parties shall have the right to review and consent to such financing statements. The Seller Parties shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 8.
9. | Payment and Transfer |
Unless otherwise mutually agreed in writing or as otherwise set forth in Section 7 hereof, all transfers of funds to be made by Seller Parties hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent at the following account (the “Program Account”) maintained by Administrative Agent: [***] or such other account as Administrative Agent shall specify to Seller Parties in writing. Each Seller Party acknowledges that it has no rights of withdrawal from the foregoing account. All Purchased Assets transferred by one party hereto to the other party shall be in the case of a purchase by a Buyer in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as Administrative Agent may reasonably request. All
Purchased Assets and Contributed Assets shall be evidenced by a Trust Receipt. Any Repurchase Price received by Administrative Agent after 4:30 p.m. (New York City time) shall be deemed received on the next succeeding Business Day.
10. | Conditions Precedent |
a. Initial Transaction. As conditions precedent to the initial Transaction, Administrative Agent shall have received on or before the day of such initial Transaction the following, in form and substance satisfactory to Administrative Agent:
(1) Program Agreements. The Program Agreements duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.
(2) Security Interest. Evidence that all other actions necessary or, in the opinion of Administrative Agent, desirable to perfect and protect Administrative Agent’s and Buyers’ interest in the Purchased Assets, Contributed Assets and other Repurchase Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.
(3) Organizational Documents. A certificate of the company secretary of each of Seller Party and Guarantor substantially in form and substance acceptable to Administrative Agent in its sole good faith discretion, attaching certified copies of each Seller Party’s and Guarantor’s organizational documents and resolutions approving the Program Agreements 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 Agreements.
(4) Good Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of each Seller Party and Guarantor, dated as of no earlier than thirty (30) calendar days prior to the Effective Date.
(5) Incumbency Certificate. An incumbency certificate of the company secretary of each Seller Party and Guarantor, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.
(6) Opinion of Counsel. An opinion of each Seller Party’s and Guarantor’s counsel, as to such matters as Administrative Agent may request and in form and substance acceptable to Administrative Agent in its sole discretion, including, without limitation, with respect to (i) Administrative Agent’s lien on and perfected security interest in the Purchased Assets, Contributed Assets, and Repurchase Assets; (ii) the non-contravention, enforceability and corporate opinions with respect to each Seller Party and Guarantor, including an opinion in form and substance reasonably acceptable to Administrative Agent on behalf of Buyers, indicating that as of the date hereof, each of Seller Parties and Guarantor are not required to register as an “investment company,” as such term is defined in the Investment Company Act, as amended, and with respect to each Underlying Entity, for specified reasons other than the exemption provided by Section 3(c)(1) or Section 3(c)(7) thereof; (iii) a Bankruptcy Code opinion of counsel to each Seller Party and Guarantor with respect to the matters outlined in Section 26 hereof and the Guaranty and (iv) matters of Delaware law with respect to each Seller Party that organized under the laws of the State of Delaware and Trustee.
(7) Asset Guidelines. A true and correct copy of the Asset Guidelines.
(8) Fees. Payment of any fees due to Administrative Agent and Buyers hereunder.
(9) Insurance. Evidence that Seller has added Administrative Agent as an additional loss payee under the Seller’s Fidelity Insurance.
b. All Transactions. The obligation of the Administrative Agent for the benefit of Buyers to enter into each Transaction pursuant to this Agreement is subject to the following conditions precedent:
(1) Due Diligence Review. Without limiting the generality of Section 34 hereof, Administrative Agent and Buyers shall have completed, to their satisfaction, their due diligence review of the related Purchased Assets and Contributed Assets and Seller Parties, Guarantor and the Servicer.
(2) Required Documents.
(a) With respect to each Purchased Asset which is not a Wet Mortgage Loan and Contributed Asset, the Asset File has been delivered to the Custodian in accordance with the Custodial Agreement.
(b) With respect to each Wet Mortgage Loan, the Asset Schedule has been delivered to Administrative Agent or Custodian, as the case may be, in accordance with the Custodial Agreement.
(3) Transaction Documents. Administrative Agent or its designee shall have received on or before the day of such Transaction (unless otherwise specified in this Agreement) the following, in form and substance satisfactory to Administrative Agent and (if applicable) duly executed:
(a) A Transaction Request and Asset Schedule delivered by a Seller Party pursuant to Section 3.c hereof.
(b) The Request for Certification and the related Asset Schedule delivered by a Seller Party, and (i) with respect to Mortgage Loans other than Simultaneously Funded Early Buyout Loans, the Trust Receipt and Custodial Asset Schedule or (ii) with respect to Mortgage Loans that are Simultaneously Funded Early Buyout Loans, a preliminary Custodial Asset Schedule, in each case, delivered by Custodian.
(c) Such certificates, opinions of counsel or other documents as Administrative Agent may reasonably request.
(4) No Default. No Default or Event of Default shall have occurred and be continuing.
(5) Requirements of Law. Neither Administrative Agent nor Buyers shall 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 Administrative Agent or any Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Administrative Agent or any Buyer to enter into Transactions with a Pricing Rate based on the Reference Rate.
(6) Representations and Warranties. Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by each Seller Party and Guarantor in each Program Agreement shall be true and correct on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
(7) Electronic Tracking Agreement. To the extent Seller is selling Mortgage Loans which are registered on the MERS System, an Electronic Tracking Agreement entered into, duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.
(8) DE Compare Ratio. To the extent FHA Loans are subject to a Transaction, the applicable Seller Party’s DE Compare Ratio is less than 250%.
(9) No HUD Suspension. To the extent FHA Loans are subject to a Transaction, HUD has not suspended the applicable Seller Party’s ability to originate FHA Loans in any jurisdiction.
(10) Approval of Servicing Agreement. To the extent not previously delivered and approved, Administrative Agent shall have, in its sole discretion, approved each Servicing Agreement pursuant to which any Mortgage Loan or Contributed Asset that is subject to the proposed Transaction is to be serviced during the term of such Transaction.
(11) Servicer Notices. To the extent Seller Parties engage an unaffiliated Servicer to service a Purchased Asset or Contributed Asset, Seller Parties shall (i) notify Administrative Agent; (ii) deliver a fully executed Servicing Agreement in form and substance acceptable to Administrative Agent; and (iii) cause Servicer to enter into a Servicer Notice in form and substance acceptable to Administrative Agent.
(12) Material Adverse Effect. None of the following shall have occurred and/or is continuing:
(a) Credit Suisse AG, New York Branch’s corporate bond rating as calculated by S&P or Moody’s has been lowered or downgraded to a rating below investment grade by S&P or Moody’s;
(b) an event or events shall have occurred in the good faith determination of a Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in such Buyer not being able to finance Purchased Assets or Contributed Assets 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;
(c) 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 such Buyer not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events;
(d) there shall have occurred (i) a material change in financial markets, an outbreak or escalation of hostilities or a material change in national or international political, financial or economic conditions; (ii) a general suspension of trading on major stock exchanges; or (iii) a disruption in or moratorium on commercial banking activities or securities settlement services; or
(e) there shall have occurred a material adverse change in the financial condition of a Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of such Buyer to fund its obligations under this Agreement.
(13) Business Purpose Mortgage Loans. Solely with respect to Business Purpose Mortgage Loans:
(a) that are BPL – Holdbacks, Administrative Agent shall have reviewed and approved the escrow arrangements and documentation therefor;
(b) that are BPL – Holdbacks whereby the Seller Parties request the Holdback Amounts to be included in the Purchase Price prior to disbursement to the related Mortgagor, Administrative Agent shall have received the related Holdback Account Control Agreement, in form and substance acceptable to Administrative Agent, duly executed by the parties thereof; and
(c) Administrative Agent shall have received a letter agreement, in form and substance acceptable to Administrative Agent, executed by Administrative Agent, Seller and the applicable Qualified Originator.
(14) Designated Assets. With respect to each proposed Transaction for which the Purchase Price-Incremental for a Designated Asset will be funded, (x) no Disqualification Event shall have occurred and is continuing, and (y) the Purchase Price-Base shall be fully drawn and Purchase Price for such Designated Asset shall be increased by an amount at least equal to the Minimum Purchase Price-Incremental but shall not exceed the Maximum Purchase Price-Incremental.
(15) Underlying Entity. With respect to any Underlying Entity to be added after the Effective Date:
(a) The items to be delivered pursuant to Sections 10.a(1)-(5) above, as applicable;
(b) An opinion of such Underlying Entity’s counsel, as to such matters as Administrative Agent may request and in form and substance acceptable to Administrative Agent in its sole discretion, including, without limitation, with respect to (i) Administrative Agent’s lien on and perfected security interest in the Contributed Assets
and related Repurchase Assets; (ii) the non-contravention, enforceability and corporate opinions with respect to such Underlying Entity, including an opinion in form and substance reasonably acceptable to Administrative Agent on behalf of Buyers, indicating that as of the date hereof, such Underlying Entity is not required to register as an “investment company,” as such term is defined in the Investment Company Act for specified reasons other than the exemption provided by Section 3(c)(1) or Section 3(c)(7) thereof; and (iii) a Bankruptcy Code opinion of counsel to Underlying Entity with respect to the matters outlined in Section 26 hereof;
(c) Seller shall deliver to the Administrative Agent the original of the Underlying Entity Certificate registered in the name of the Administrative Agent together with original undated transfer powers, duly executed in blank;
(d) A joinder agreement, duly executed by the parties hereto, joining the Underlying Entity to the applicable Program Agreements;
(e) With respect to any Underlying Entity that is not a trust, evidence that an Independent Manager has been appointed in accordance with the Underlying Entity Agreement; and
(f) Any other document required to be delivered by Administrative Agent in form and substance acceptable to Administrative Agent.
(16) Early Buyout Loans. Prior to the funding of any Transactions, the subject of which are Early Buyout Loans, Seller shall deliver to Administrative Agent a Custodial Account Control Agreement, duly executed by the parties thereto and in form and substance satisfactory to Administrative Agent.
11. | Program; Costs |
a. The Seller Parties shall reimburse Administrative Agent and Buyers for any of Administrative Agent’s and Buyers’ reasonable and documented out-of-pocket costs, including due diligence review costs and reasonable attorneys’ fees, incurred by Administrative Agent and Buyers in determining the acceptability to Administrative Agent and Buyers of any Purchased Asset or REO Property. The Seller Parties shall also pay, or reimburse Administrative Agent and Buyers if Administrative Agent or Buyers shall pay, any termination fee, which may be due any Servicer. The Seller Parties shall pay the reasonable and documented out-of-pocket fees and expenses of Administrative Agent’s and Buyers’ counsel in connection with the Program Agreements. Reasonable and documented legal fees for any subsequent amendments to this Agreement or related documents shall be borne by the Seller Parties. The Seller Parties shall pay ongoing custodial fees and expenses as set forth in the Custodial Agreement, and any other ongoing fees and expenses payable in accordance with any other Program Agreement. Without limiting the foregoing, the Seller Parties shall pay all fees as and when required under the Pricing Side Letter.
b. If any Buyer determines that, due to the introduction of, any change in, or the compliance by such Buyer 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 such Buyer in engaging in the present or any future Transactions, then, to the extent each Seller Party and Guarantor received notice of such amounts no later than thirty (30) days after the incurrence of such costs, then each Seller Party and Guarantor may, at its option and in its sole discretion, either (i)
terminate this Agreement and repurchase the Purchased Assets and pay costs or (ii) promptly pay such Buyer the actual cost of additional amounts as specified by such Buyer to compensate such Buyer for such increased costs; provided, however, that any such determination by any Buyer must also be made in a manner substantially consistent with respect to similarly situated counterparties with substantially similar assets in similar facilities.
c. With respect to any Transaction, Administrative Agent and Buyers may conclusively rely upon, and shall incur no liability to any Seller Party or Guarantor in acting upon, any request or other communication that Administrative Agent and Buyers reasonably believe to have been given or made by a person authorized to enter into a Transaction on each Seller Party’s behalf, whether or not such person is listed on the certificate delivered pursuant to Section 10.a(5) hereof.
d. Notwithstanding the assignment of the Program Agreements with respect to each Purchased Asset to Administrative Agent for the benefit of Buyers, Seller Parties and Guarantor agrees and covenants with Administrative Agent and Buyers to reasonably enforce in a commercially reasonable manner Seller Parties’ and Guarantor’s rights and remedies with respect to parties other than Administrative Agent and Buyers set forth in the Program Agreements.
e. (i) Any payments made by a Seller Party or Guarantor to Administrative Agent or a Buyer or a Buyer assignee or participant hereunder or any Program Agreement shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable law. If a Seller Party or Guarantor shall be required by applicable law (as determined in the good faith discretion of the applicable withholding agent) to deduct or withhold any Tax from any sums payable to Administrative Agent or a Buyer or Buyer assignee or participant, then (1) a Seller Party or Guarantor shall make such deductions or withholdings and pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law; (2) to the extent the withheld or deducted Tax is an Indemnified Tax, the sum payable shall be increased as necessary so that after making such deductions and withholdings (including such deductions and withholdings applicable to additional sums payable under this Section 11.e Administrative Agent or a Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made; and (3) a Seller Party shall notify the Administrative Agent of the amount paid and shall provide the original or a certified copy of a receipt issued by the relevant Governmental Authority evidencing such payment within ten (10) days thereafter. Seller Parties and Guarantor shall otherwise indemnify Administrative Agent and such Buyer, within ten (10) days after demand therefor, for any Indemnified Taxes imposed on Administrative Agent or such Buyer (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 11.e and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted by the relevant Governmental Authority.
(ii) Administrative Agent shall cause each Buyer and Buyer assignee and participant to deliver to a Seller Party and Guarantor, at the time or times reasonably requested by a Seller Party or Guarantor, such properly completed and executed documentation reasonably requested by a Seller Party or Guarantor as will permit payments made hereunder to be made without withholding or at a reduced rate of withholding. In addition, Administrative Agent shall cause each Buyer and Buyer assignee and participant, if reasonably requested by a Seller Party or Guarantor, to deliver such other documentation prescribed by applicable law or reasonably requested by a Seller Party or Guarantor as will enable a Seller Party or Guarantor to determine whether or not such Buyer or Buyer assignee or participant is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in this Section 11, the completion, execution and submission of such documentation (other than such documentation in
Section 11.e(ii)(A), (B) and (C) below) shall not be required if in the Buyer’s or any Buyer’s assignee’s or participant’s judgment such completion, execution or submission would subject such Buyer or Buyer assignee or participant to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Buyer or Buyer assignee or participant. Without limiting the generality of the foregoing, Administrative Agent shall cause a Buyer or Buyer assignee or participant to deliver to each of Seller Parties and Guarantor, to the extent legally entitled to do so:
(A) in the case of a Buyer or Buyer assignee or participant which is a U.S. Person, a properly completed and executed IRS Form W-9 certifying that it is not subject to U.S. federal backup withholding tax;
(B) in the case of a Buyer or Buyer assignee or participant which is not a U.S. Person: (I) a properly completed and executed IRS Form W-8BEN, W-8BENE-E or W-8ECI, as appropriate, evidencing entitlement to a zero percent or reduced rate of U.S. federal income tax withholding on any payments made hereunder, (II) in the case of such non-U.S. Person claiming exemption from the withholding of U.S. federal income tax under Code sections 871(h) or 881(c) with respect to payments of “portfolio interest,” a duly executed certificate (a “U.S. Tax Compliance Certificate”) to the effect that such non-U.S. Person is not (x) a “bank” within the meaning of Code section 881(c)(3)(A), (y) a “10 percent shareholder” of a Seller Party, Guarantor or Affiliate thereof, within the meaning of Code section 881(c)(3)(B), or (z) a “controlled foreign corporation” described in Code section 881(c)(3)(C), (III) to the extent such non-U.S. Person is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if such non-U.S. Person is a partnership and one (1) or more direct or indirect partners of such non-U.S. Person are claiming the portfolio interest exemption, such non-U.S. Person may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner, and (IV) in the case of a Buyer or Buyer assignee or participant which is not a U.S. Person, executed originals of any other form or supplementary documentation prescribed by law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by law to permit a Seller Party or Guarantor to determine the withholding or deduction required to be made.
(C) if a payment made to a Buyer or Buyer assignee or participant under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Buyer or assignee or participant were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Administrative Agent on behalf of such Buyer or assignee or participant shall deliver to the Seller Parties or Guarantor at the time or times prescribed by law and at such time or times reasonably requested by a Seller Party 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 a Seller Party as may be necessary for such Seller Party to comply with their obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 11.e, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
The applicable IRS forms referred to above shall be delivered by Administrative Agent on behalf of each applicable Buyer or Buyer assignee or participant on or prior to the date on which such person becomes a Buyer or Buyer assignee or participant under this Agreement, as the case may be, and upon the obsolescence or invalidity of any IRS form previously delivered by it hereunder.
f. Any indemnification payable by a Seller Party or Guarantor to Administrative Agent or a Buyer or Buyer assignee or participant for Indemnified Taxes that are imposed on such Buyer or Buyer assignee or participant, as described in Section 11.e(i) hereof, shall be paid by a Seller Party or Guarantor within ten (10) days after demand therefor from Administrative Agent. A certificate as to the amount of such payment or liability delivered to a Seller Party or Guarantor by the Administrative Agent on behalf of a Buyer or Buyer assignee or participant shall be conclusive absent manifest error.
g. If any party determines, in its sole 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 (including by the payment of additional amounts pursuant to this Section 11), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 11 with respect to the Taxes giving rise to such refund), net of all out of pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 11.g (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 11.g, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 11.g the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party 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 or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
h. Each party’s obligations under this Section 11 shall survive any assignment of rights by, or the replacement of, a Buyer or a Buyer assignee or participant, and the repayment, satisfaction or discharge of all obligations under any Program Agreement.
i. Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets and Contributed Assets as owned by Seller and the applicable Underlying Entity in the absence of an Event of Default by Seller. Administrative Agent on behalf of Buyers and Seller agree that they will treat and report for all tax purposes the Transactions entered into hereunder as one or more loans from a Buyer to Seller secured by the Purchased Assets and Contributed Assets, unless otherwise prohibited by law or upon a final determination by any taxing authority that the Transactions are not loans for tax purposes.
12. | Servicing |
a. Each Seller Party, on Administrative Agent’s and Buyers’ behalf, shall contract with a Servicer to, or if Seller is Servicer, Seller shall, service the Purchased Mortgage Loans and Contributed Assets consistent with the degree of skill and care that such Seller Party customarily
requires with respect to similar Mortgage Loans and Contributed Assets owned or managed by it and in accordance with Accepted Servicing Practices. Each Seller Party shall ensure that Servicer (i) complies with all applicable federal, state and local laws and regulations, (ii) maintains all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and (iii) does not impair the rights of Administrative Agent or Buyers in any Purchased Mortgage Loan or Contributed Asset or any payment thereunder. Administrative Agent may terminate the servicing of any Purchased Mortgage Loan or Contributed Asset with the then existing Servicer in accordance with Section 12.e hereof.
b. With respect to Mortgage Loans other than BPL – Holdbacks, Seller shall and shall cause the Servicer to hold or cause to be held all escrow funds collected by Seller and Servicer with respect to any Purchased Assets or Contributed Assets in trust accounts and shall apply the same for the purposes for which such funds were collected. With respect to BPL – Holdbacks, Seller shall and shall cause the originator or Servicer to hold or cause to be held all Holdback Amounts collected by the Seller or Servicer with respect to any Purchased Assets in the Holdback Account and shall apply the same to improve and rehabilitate the related Mortgaged Property.
c. On the Remittance Date, Seller shall and shall cause each Servicer to deposit all Income (net of any servicing fees and advances then due and owing pursuant to the terms of the applicable Servicing Agreement) received by such Servicer on the Purchased Assets in the Program Account.
d. Other than if the Servicer is a Seller Party, Seller Parties shall provide promptly to Administrative Agent a Servicer Notice, addressed to and agreed to by the Servicer of the related Purchased Mortgage Loans and Contributed Assets, advising such Servicer of such matters as Administrative Agent may reasonably request, including, without limitation, recognition by the Servicer of Administrative Agent’s and Buyers’ interest in such Purchased Mortgage Loans and Contributed Assets and the Servicer’s agreement that upon receipt of notice of an Event of Default that has occurred and is continuing from Administrative Agent, it will follow the instructions of Administrative Agent with respect to the Purchased Mortgage Loans and Contributed Assets and any related Income with respect thereto.
e. Upon the occurrence and continuance of an Event of Default hereunder, a Servicer Termination Event or a material default under the Servicing Agreement, Administrative Agent shall have the right to immediately terminate the Servicer’s right to service the Purchased Mortgage Loans and Contributed Assets under the Servicing Agreement without payment of any penalty or termination fee as set forth in the related Servicer Notice. Seller Parties and the Servicer shall cooperate in transferring the servicing of the Purchased Mortgage Loans and Contributed Assets to a successor servicer appointed by Administrative Agent on behalf of Buyers in its sole discretion. For the avoidance of doubt, any termination of the Servicer’s rights to service by the Administrative Agent as a result of the occurrence and continuation of an Event of Default shall be deemed part of an exercise of the Administrative Agent’s rights to cause the liquidation, termination or acceleration of this Agreement.
f. If a Seller Party should discover that, for any reason whatsoever, such Seller Party or any entity responsible to a Seller Party for managing or servicing any such Purchased Mortgage Loans or Contributed Assets has failed to perform fully a Seller Party’s obligations under the Program Agreements or any of the obligations of such entities with respect to the Purchased Mortgage Loans and Contributed Assets, such Seller Party shall promptly notify Administrative Agent.
g. For the avoidance of doubt, with respect to Purchased Mortgage Loans and Contributed Assets sold or contributed on a servicing released basis, no Seller Party retains economic rights to the servicing of the Purchased Mortgage Loans and Contributed Assets; provided that the Seller Parties shall and shall cause the Servicer to continue to service the Purchased Mortgage Loans and Contributed Assets hereunder as part of the Obligations hereunder. As such, the Seller Parties expressly acknowledge that the Purchased Mortgage Loans and Contributed Assets are sold or contributed to Administrative Agent for the benefit of Buyers on a “servicing released” basis with such servicing retained by the Servicer.
13. | Representations and Warranties |
a. Each Seller Party represents and warrants to Administrative Agent and Buyers as of the date hereof and as of each Purchase Date for any Transaction that:
(1) Seller Party Existence. Each Seller Party has been duly organized, is validly existing and is in good standing under the laws of the state of its jurisdiction.
(2) Licenses. Each Seller Party is duly licensed or is otherwise qualified in each jurisdiction in which it transacts business for the business which it conducts and is not in default of any applicable material federal, state or local laws, rules and regulations.
(3) Power. Each Seller Party has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect.
(4) Due Authorization. Each Seller Party has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Program Agreements, as applicable. Each Program Agreement has been (or, in the case of Program Agreements not yet executed, will be) duly authorized, executed and delivered by each Seller Party, all requisite or other corporate action having been taken, and each is valid, binding and enforceable against each Seller Party in accordance with its terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or by general principles of equity.
(5) Financial Statements. The Seller has heretofore furnished to Administrative Agent a copy of (a) its consolidated balance sheet for the most recent fiscal year-end, and the related consolidated statements of income and retained earnings and of cash flows for the Seller for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of a nationally recognized accounting firm reasonably acceptable to Administrative Agent and (b) its consolidated balance sheet for the most recent quarterly fiscal period of the Seller and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such quarterly fiscal period, setting forth in each case in comparative form the figures for the previous year. All such financial statements fairly present, in all material respects, the consolidated financial condition of the Seller and its Subsidiaries and the consolidated results of its operations as at such dates and for such fiscal periods, all in accordance with GAAP (other than monthly financial statements solely with respect to footnotes, year-end adjustments and cash flow statements) applied on a consistent basis. Since the most recent fiscal quarter-end, there has been no material adverse change in the consolidated business, operations or financial condition of the Seller and its consolidated Subsidiaries taken as a whole from that set forth in said financial statements nor is Seller aware of
any state of facts which (with notice or the lapse of time) would or could result in any such material adverse change. The Seller has, on the date of the statements delivered pursuant to this Section (the “Statement Date”) no liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of Seller except as heretofore disclosed to Administrative Agent in writing.
(6) Reserved.
(7) Solvency. Each Seller Party is solvent and will not be rendered insolvent by any Transaction and, after giving effect to such Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business. The sale of the Purchased Assets to Administrative Agent for the benefit of Buyers will not cause the Seller to incur debts beyond its ability to pay such debts as they mature or is contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. The amount of consideration being received by the Seller Parties upon the sale of the Purchased Assets to Administrative Agent for the benefit of Buyers constitutes reasonably equivalent value and fair consideration for such Purchased Assets. The Seller Parties are not transferring any Purchased Assets with any intent to hinder, delay or defraud any of its creditors.
(8) No Conflicts. The execution, delivery and performance by each Seller Party of each Program Agreement do not conflict with any term or provision of the formation or other governing documents of such Seller Party or any law, rule, regulation, order, judgment, writ, injunction or decree applicable to such Seller Party of any court, regulatory body, administrative agency or governmental body having jurisdiction over Seller, which conflict would have a Material Adverse Effect.
(9) True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of each Seller Party, any Affiliate thereof or any of their officers furnished or to be furnished to Administrative Agent or Buyers in connection with the initial or any ongoing due diligence of such Seller Party or any Affiliate or officer thereof, and the negotiation, preparation, or delivery of the Program Agreements, as of the date of delivery to Administrative Agent or Buyers, when taken as a whole do not contain any untrue statement of material fact or omit to state any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading.
(10) Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to any Governmental Authority or court is required under applicable law in connection with the execution, delivery and performance by any Seller Party of each Program Agreement or if required, such consent, approval, authorization or order of, registration or filing has been obtained on or prior to the Closing Date, except for any filings and recordings in respect of the Liens created pursuant to the Program Agreements.
(11) Litigation. There is no action, proceeding or investigation pending with respect to which any Seller Party has received service of process or, to the knowledge of a Responsible Officer of a Seller Party threatened in writing against it before any court, administrative agency or other tribunal (A) asserting the invalidity of any Program Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated by any Program
Agreement, (C) making a non-frivolous claim individually in an amount greater than (i) with respect to Seller, [***] and (ii) with respect to an Underlying Entity, [***] provided, that, this clause (C) shall not include any routine actions brought by or on behalf of an individual Mortgagor with respect to which Seller is acting in its capacity as servicer (which shall include without limitation, contested foreclosures, contested actions or bankruptcy proceedings) or (D) which would be reasonably likely to materially and adversely affect the validity of a material portion of the Mortgage Loans, Purchased Certificates or REO Property or the performance by it of its obligations under, or the validity or enforceability of any Program Agreement.
(12) Reserved.
(13) Ownership. The Seller has not assigned, pledged, or otherwise conveyed or encumbered the Purchased Assets to any other Person, and immediately prior to the sale of the Purchased Assets to the Administrative Agent on behalf of the Buyers, Seller was the sole owner of the Purchased Assets and had good and marketable title thereto, free and clear of all Liens, in each case expect for Liens to be released simultaneously with the sale to Administrative Agent and Buyers hereunder.
(14) Asset Guidelines. The Asset Guidelines provided to Administrative Agent are the true and correct Asset Guidelines of the applicable Seller Party except as otherwise modified pursuant to the terms of this Agreement.
(15) Taxes. Each Seller Party and its Subsidiaries have timely filed all federal tax returns and all other material tax returns that are required to be filed by them and have paid all material taxes, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided.
(16) Investment Company. No Seller Party is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act and with respect to each Underlying Entity for specified reasons other than the exemption provided by Section 3(c)(1) or Section 3(c)(7) thereof.
(17) Chief Executive Office; Jurisdiction of Organization. On the Effective Date, Seller Parties’ chief executive office, is, and has been, located at 2211 Old Earhart Road, Suite 250, Ann Arbor, Michigan 48105. On the Effective Date, Seller Parties’ jurisdiction of organization is the State of New Jersey. Seller Parties shall provide Administrative Agent with [***] advance notice of any change in any Seller Parties’ principal office or place of business, legal name or jurisdiction. No Seller Party has a trade name. During the preceding five (5) years, no Seller Party filed or had filed against it any bankruptcy receivership or similar petitions nor has it made any assignments for the benefit of creditors.
(18) Location of Books and Records. The location where Seller Parties keep their books and records, including all computer tapes and records relating to the Purchased Assets, Contributed Assets and the related Repurchase Assets, other than any such books, records or computer tapes held by the Custodian, is its chief executive office.
(19) Reserved.
(20) ERISA. Each Plan to which each Seller Party or its Subsidiaries make direct contributions, and, to the knowledge of such Seller Party, each other Plan and each
Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law.
(21) Adverse Selection. No Seller Party has selected the Purchased Assets or Contributed Assets in a manner so as to adversely affect Buyers’ interests.
(22) Reserved.
(23) Indebtedness. The Indebtedness of each Seller Party is set forth on Exhibit D hereto, as updated from time pursuant to the Officer’s Compliance Certificate.
(24) Agency Approvals. To the extent any Purchased Asset consists of an Agency Security or Agency Mortgage Loan, with respect to each Agency Security and to the extent necessary, the applicable Seller Party is (i) an FHA Approved Mortgagee; (ii) a VA Approved Lender; (iii) approved by GNMA as an approved lender and approved issuer; (iv) approved by Fannie Mae as an approved seller/servicer; (v) approved by Freddie Mac as an approved seller/servicer and/or (vi) approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. In each such case, such Seller Party is in good standing, with no event having occurred or such Seller Party having any reason whatsoever to believe or suspect will occur prior to the issuance of the Agency Security or the consummation of the Take-out Commitment, as the case may be, including, without limitation, a change in insurance coverage which would either make such Seller Party unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency or to the Department of Housing and Urban Development, FHA or VA. Should such Seller Party for any reason cease to possess all such applicable approvals, or should notification of the occurrence of any event that would impact Seller’s good standing or otherwise materially restrict Seller’s Agency Approvals in any manner to the relevant Agency or to the Department of Housing and Urban Development, FHA or VA be required, Seller Parties shall so notify Administrative Agent within [***] in writing.
(25) No Reliance. Each Seller Party has made its own independent decisions to enter into the Program Agreements and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. No Seller Party is relying upon any advice from Administrative Agent or Buyers as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(26) Plan Assets. No Seller Party is 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, and the Purchased Assets are not “plan assets” within the meaning of 29 CFR § 2510.3- 101, as amended by Section 3(42) of ERISA, in Seller’s hands, and the Transactions contemplated by this Agreement are not in violation of any state or local statute, applicable to a Seller Party, that regulates investments or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA and that is substantially similar to Section 406 of ERISA or Section 4975 of the Code.
(27) No Prohibited Persons. No Seller Party nor, to the knowledge of Seller, any of their Subsidiaries, officers, directors, partners or members, is a Person (or to such Seller
Party’s knowledge, fifty percent (50%) or greater owned by a Person): (i) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, https://www.treasury.gov/ofac/downloads/sdnlist.pdf); or (ii) is otherwise the target of sanctions administered by OFAC (any and all parties or persons described in clauses (i) and (ii) above are herein referred to as a “Prohibited Person”).
(28) Compliance with 1933 Act. Except as contemplated herein, no Seller Party nor anyone acting on its behalf has offered, transferred, pledged, sold, or otherwise disposed of any Purchased Certificate, any interest in any Purchased Certificate or any other similar security to, or solicited any offer to buy or accept a transfer, pledge, or other disposition of any Purchased Certificate, any interest in any Purchased Certificate or any other similar security from, or otherwise approached or negotiated with respect to any Purchased Certificate, any interest in any Purchased Certificate or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action which would constitute a distribution of any certificate under the 1933 Act or which would render the disposition of any Purchased Certificate a violation of Section 5 of the 1933 Act or require registration pursuant thereto.
b. With respect to each Purchased Asset and Contributed Asset, each Seller Party represents and warrants to Administrative Agent and Buyers as of the applicable Purchase Date for any Transaction and each date thereafter that each representation and warranty set forth on Schedule 1-A, 1-B and 1-C, hereto is true and correct in all material respects.
c. The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Assets (including the beneficial interests in the Contributed Assets) to Administrative Agent for the benefit of Buyers and to each Buyer and shall continue for so long as the Purchased Assets and Contributed Assets are subject to this Agreement. Upon discovery by a Responsible Officer of Seller Party, Servicer or Administrative Agent of that any of the representations or warranties set forth in this Agreement was untrue when made, the discovering party shall promptly give notice of such discovery to the others. Administrative Agent has the right to require, such Seller Party to repurchase or remit the Release Price within one (1) Business Day after receipt of notice from Administrative Agent any Purchased Asset or Contributed Asset for which a breach of one or more of the representations and warranties referenced in Section 13.b hereof exists and which breach has a material adverse effect on the value of such Mortgage Loan or the interests of Administrative Agent or Buyers, and such repurchase shall occur within one (1) Business Day after receipt of notice from Administrative Agent requesting the same.
14. | Covenants |
Each Seller Party covenants with Administrative Agent and Buyers that, during the term of this facility:
a. Litigation. To the extent not prohibited from disclosing, Seller, in the Officer’s Compliance Certificate and with such information provided as noted in the applicable Schedule to the Officer’s Compliance Certificate, shall provide Administrative Agent a list of all material litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which, to the knowledge of a Responsible Officer of Seller, are threatened in writing or pending) before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Program Agreements or any action to be taken in connection with the
transactions contemplated hereby, (ii) makes a non-frivolous claim individually in an amount greater than (x) with respect to Seller, [***] and (y) with respect to an Underlying Entity, [***] provided, that, this clause (ii) shall not include any routine actions brought by or on behalf of an individual Mortgagor with respect to which Seller is acting in its capacity as servicer (which shall include without limitation, contested foreclosures, contested actions or bankruptcy proceedings) or (iii) which, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect. Each Seller Party will promptly provide notice of any judgment, which with the passage of time, could cause an Event of Default hereunder.
b. Prohibition of Fundamental Changes. No Seller Party, without the prior written consent of Buyer, shall enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets; provided, that a Seller Party may merge or consolidate with any other Person if the Seller Party is the surviving corporation; and provided further, that if after giving effect thereto, no Event of Default would exist hereunder.
c. Servicing. No Seller Party shall cause the Purchased Assets or Contributed Assets to be serviced by any Servicer other than a Servicer expressly approved in writing by Administrative Agent on behalf of Buyers. For the avoidance of doubt, the Seller is an approved servicer.
d. 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 Administrative Agent on request information as to such insurance as reasonably requested by Administrative Agent, and provide within [***] after receipt of such reasonable request the certificates or other documents evidencing renewal of each such policy. Seller shall continue to maintain, for itself and its Subsidiaries, Fidelity Insurance in an aggregate amount at least equal to such amount as is required by each Agency.
e. No Adverse Claims. Each Seller Party warrants and will defend, and shall cause any Servicer to defend, the right, title and interest of Administrative Agent and Buyers in and to all Purchased Assets, Contributed Assets and the related Repurchase Assets against all adverse claims and demands.
f. Reserved.
g. Security Interest. Seller Parties shall do all things necessary to preserve the Purchased Assets, Contributed Assets and the related Repurchase Assets, as applicable, so that they remain subject to a first priority perfected security interest hereunder.
h. Records.
(1) Seller Parties shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Assets and Contributed Assets in accordance with industry custom and practice for assets similar to the Purchased Assets and Contributed Assets, including those maintained pursuant to the preceding subparagraph, and all such Records shall be in Seller’s, Servicer’s or Custodian’s possession or control unless pursuant to the Custodial Agreement or Administrative Agent otherwise approves. Except in accordance with the Custodial Agreement, no Seller Party shall allow any such papers, records or files that are an original or an only copy to leave Seller’s, Servicer’s or Custodian’s possession or control, except for individual
items removed in connection with servicing a specific Purchased Asset or Contributed Asset, in which event such Seller Party will obtain or cause to be obtained a receipt from a financially responsible person for any such paper, record or file.
(2) For so long as Administrative Agent has an interest in or lien on any Purchased Asset and Contributed Asset, each Seller Party will hold or cause to be held all related Records in trust for Administrative Agent. Each Seller Party shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Administrative Agent granted hereby.
(3) Upon reasonable advance notice from Custodian or Administrative Agent, each Seller Party shall (x) make any and all such Records available to Custodian, Administrative Agent and a Buyer to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit Administrative Agent or a Buyer or its authorized agents to discuss the affairs, finances and accounts of such Seller Party with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of such Seller Party with its independent certified public accountants.
i. Books. Each Seller Party shall keep or cause to be kept in reasonable detail books and records of account of its assets and business and shall clearly reflect therein the transfer or contribution, as applicable, of Purchased Assets and Contributed Assets to Administrative Agent for the benefit of Buyers.
j. Approvals. Each Seller Party shall maintain all licenses, permits or other approvals necessary for such Seller Party to conduct its business and to perform its obligations under the Program Agreements except where failure to so maintain would not result in a Material Adverse Effect.
k. Material Change in Business. No Seller Party shall make any material change in the nature of its business as carried on at the date hereof without consent of Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed), 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. For the avoidance of doubt, the acquisition by Seller of a mortgage origination business, by itself would not be considered a material change for purposes of this Section 14.k.
l. Asset Guidelines. Seller shall promptly inform Administrative Agent in writing of any material modifications to the Asset Guidelines that relate to Non-Agency Non-QM Mortgage Loans and shall promptly deliver to Administrative Agent a complete copy of the amended or modified Asset Guidelines.
m. Distributions. If an Event of Default has occurred and is continuing or a Margin Deficit exists, no Seller Party shall pay any dividends with respect to any capital stock or other equity interests in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of such Seller Party.
n. Applicable Law. Each Seller Party shall comply with the requirements of all applicable material laws, rules, regulations and orders of any Governmental Authority.
o. Existence. Each Seller Party shall preserve and maintain (i) its legal existence and (ii) all of its material rights, privileges, licenses and franchises, except where the lack of such rights, privileges, licenses or franchises would not be reasonably likely to have a Material Adverse Effect.
p. Chief Executive Office; Jurisdiction of Organization. Seller Parties shall not move their chief executive office from the address referred to in Section 13.a(17) hereof, change its jurisdiction of organization from the jurisdiction referred to in Section 13.a(17) hereof or change its name or organizational identification number, unless it shall have provided Administrative Agent thirty (30) days’ prior written notice of such change.
q. Taxes. Each Seller Party shall timely file all federal tax returns and other material tax returns that are required to be filed by it and shall timely pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained.
r. Transactions with Affiliates. Except as contemplated by the Program Agreements, no Seller Party shall enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (a) otherwise permitted under the Program Agreements or (b) in the ordinary course of such Seller Party’s business.
s. Guarantees. No Seller Party shall create, incur, assume or suffer to exist any Guarantees, except (i) to the extent reflected in Seller’s financial statements or notes thereto and (ii) to the extent the aggregate Guarantees of Seller do not exceed [***] without providing prior written notice to Administrative Agent.
t. Indebtedness. Except with respect to increases in amounts of existing Indebtedness, no Seller Party shall incur any additional material Indebtedness, including without limitation, any Indebtedness relating to any mortgage servicing rights or corporate or servicing advances, (other than (i) Indebtedness existing on the Effective Date and (ii) usual and customary accounts payable for a mortgage company) without prior written notice to Administrative Agent.
u. Hedging. Each Seller Party, as applicable, has entered into Interest Rate Protection Agreements or other arrangements with respect to the Purchased Assets, having terms with respect to protection against fluctuations in interest rates consistent with prevailing market standards in effect at the time such arrangements are entered into.
v. True and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of each Seller Party, any Affiliate thereof or any of their officers furnished to Administrative Agent and/or Buyers hereunder and during Administrative Agent’s and/or Buyers’ diligence of such Seller Party as of the date of delivery to Administrative Agent or Buyers, when taken as a whole, do not contain any untrue statement of material fact and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by each Seller Party to Administrative Agent and/or Buyers pursuant to this Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to SEC filings, the appropriate SEC accounting regulations.
w. Take-out Payments. To the extent any Agency Mortgage Loan is subject to a Transaction, Seller shall arrange that all payments under the related take-out commitment shall be paid directly to Administrative Agent at the account set forth in Section 9 hereof, or to an account approved by Administrative Agent in writing prior to such payment. With respect to any take-out commitment with an Agency, if applicable, (1) with respect to the wire transfer instructions as set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse Delivery) such wire transfer instructions are identical to Administrative Agent’s wire instructions or Administrative Agent has approved such wire transfer instructions in writing in its sole discretion, or (2) the Payee Number set forth on Fannie Mae Form 1068 (Fixed Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable, shall be identical to the Payee Number that has been identified by Administrative Agent in writing as Administrative Agent’s Payee Number or Administrative Agent has previously approved the related Payee Number in writing in its sole discretion.
x. Agency Approvals. To the extent any Transaction consists of an Agency Mortgage Loan, the applicable Seller Party shall maintain its status with each Agency as set forth in Section 13.a(24) (the “Agency Approvals”) and each Seller Party, as applicable, shall service all such Agency Mortgage Loans which in accordance with the applicable Agency Guide. To the extent any Transaction consists of an Agency Mortgage Loan, should any Seller Party, for any reason, cease to possess all such applicable Agency Approvals, or should notification of the occurrence of any event that would impact Seller’s good standing or otherwise materially restrict Seller’s Agency Approvals in any manner to the relevant Agency or to the Department of Housing and Urban Development, FHA, VA or USDA be required, such Seller Party shall so notify Administrative Agent promptly, and in any event, within one (1) Business Day, in writing. Notwithstanding the preceding sentence, to the extent any Transaction consists of an Agency Mortgage Loan, the applicable Seller Party shall take all necessary action to maintain all of their applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.
y. No Pledge. Except as contemplated herein, no Seller Party shall pledge, transfer or convey any security interest in any Holdback Account or Custodial Account to any Person without the express written consent of Administrative Agent.
z. Plan Assets. No Seller Party shall be 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 and such Seller Party shall not use “plan assets” within the meaning of 29 CFR §2510.3-101, as amended by Section 3(42) of ERISA to engage in this Agreement or any Transaction hereunder. The Transactions contemplated by this Agreement shall not violate any state or local statute, applicable to a Seller Party, that regulates investments of or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA and that is substantially similar to Section 406 of ERISA or Section 4975 of the Code.
aa. Reserved.
bb. Beneficial Ownership Certification. Each Seller Party shall (i) deliver a Beneficial Ownership Certification on or prior to the Effective Date, and (ii) to the extent any information in any previously delivered Beneficial Ownership Certification is no longer true or correct, deliver an updated Beneficial Ownership Certification with the next delivered Officer’s Compliance Certificate. All information contained in each Beneficial Ownership Certification shall be true and correct in all respects as of the date delivered.
cc. No Prohibited Persons. No Seller Party nor any of its officers, directors, partners or members, shall be a Prohibited Person.
dd. Quality Control. Seller shall 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 Mortgage Loans and shall provide a report on the results of such quality control program in the Officer’s Compliance Certificate provided pursuant to Section 17.b(3) hereof. Such program shall be capable of evaluating and monitoring the overall quality of Seller’s loan production and servicing activities. Such program shall (i) ensure that the Mortgage Loans are originated, acquired and serviced in accordance with prudent mortgage banking practices and accounting principles; (ii) guard against dishonest, fraudulent, or negligent acts; and (iii) guard against errors and omissions by officers, employees, or other authorized persons.
ee. Lender Insurance Authority. In the event that Seller has on the date hereof or subsequently receives Lender Insurance Authority, such authority shall not be revoked or suspended.
ff. [***]
gg. Investment Company. No Seller Party shall be an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act and with respect to each Underlying Entity for specified reasons other than the exemption provided by Section 3(c)(1) or Section 3(c)(7) thereof.
hh. SPE Covenant Separateness. Each Underlying Entity shall (a) own no assets, and will not engage in any business, other than the assets and transactions specifically contemplated by this Agreement; (b) not incur any Indebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than pursuant hereto; (c) not make any loans or advances to any third party, and shall not acquire obligations or securities of its affiliates; (d) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets; (e) comply with the provisions of its organizational documents; (f) do all things necessary to observe organizational formalities and to preserve its existence, and will not amend, modify or otherwise change its organizational documents, or suffer same to be amended, modified or otherwise changed, without the prior written consent of Administrative Agent on behalf of Buyers; (g) maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates; (h) be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its affiliates as a division or part of the other and
shall maintain and utilize a separate telephone number and separate stationery, invoices and checks; (i) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; (j) not engage in or suffer any change of ownership, dissolution, winding up, liquidation, consolidation or merger in whole or in part; (k) not commingle its funds or other assets with those of any Affiliate or any other Person; (l) maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any affiliate or any other person; (m) not and will not hold itself out to be responsible for the debts or obligations of any other Person; (n) cause each of its direct and indirect owners to agree not to (i) file or consent to the filing of any bankruptcy, insolvency or reorganization case or proceeding with respect to such Underlying Entity; institute any proceedings under any applicable insolvency law or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally with respect to such Underlying Entity (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for Seller or a substantial portion of its properties; or (iii) make any assignment for the benefit of Seller’s creditors, with respect to an Underlying Entity other than a trust and in the case of each of clause (i), (ii), and (iii), without the prior written consent of the Independent Manager.
ii. Reserved.
jj. Financial Covenants. Seller shall satisfy the following financial covenants (each tested on a consolidated basis):
(1) Adjusted Tangible Net Worth. As of the end of each calendar month, Seller shall maintain an Adjusted Tangible Net Worth of at least [***].
(2) Maintenance of Liquidity. At all times, Seller shall ensure that it has Liquidity in an amount not less than [***].
(3) Indebtedness to Adjusted Tangible Net Worth Ratio. As of the end of each calendar month, Seller’s ratio of Indebtedness (on and off balance sheet) to Adjusted Tangible Net Worth shall not exceed [***].
(4) Maintenance of Profitability. Seller shall not permit, for any Test Period, Adjusted Net Income for such Test Period, before income taxes for such Test Period and distributions made during such Test Period, to be less than [***].
kk. HUD and FHA Matters. With respect to each Early Buyout Loan that is or was an FHA Loan, the Seller shall be listed as the servicer on FHA Connection System and the Nominee to be identified as the mortgagee of record on such system under the mortgagee number provided in writing by Seller to Administrative Agent. With respect to each Early Buyout Loan that is or was a VA Loan, the Seller shall be listed as the servicer on the VALERI system. With respect to each Early Buyout Loan that is or was a USDA Loan, the Seller shall be listed as the servicer and Seller as the holding lender on the USDA LINC system. All claims to HUD, VA and USDA under such applicable numbers for remittance of amounts shall be directed to the Clearing Account.
15. | Events of Default |
Each of the following shall constitute an “Event of Default” hereunder:
a. Payment Failure. Failure of any Seller Party to pay any of the following, whether by acceleration or otherwise, under the terms of this Agreement or any other Program Agreement:
(i) any payment of Price Differential on a Price Differential Payment Date;
(ii) any payment of Repurchase Price on a Repurchase Date;
(iii) any payment of any other sum which has become due, within [***] of the due date; or
(iv) any payment to cure any Margin Deficit when due pursuant to Section 6 hereof.
b. Cross Default. Any Seller Party, Guarantor or any of their Subsidiaries shall be in default under (i) any Indebtedness, in the aggregate, in excess of (A) [***] with respect to Seller or (B) [***] with respect to an Underlying Entity, Guarantor or of such Subsidiary, in each case, which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, or (ii) any other contract or contracts, in the aggregate in excess of (A) [***] to which Seller is a party or (B) [***] to which an Underlying Entity, Guarantor or such Subsidiary is a party, in each case, which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract.
c. Assignment. Assignment by any Seller Party or Guarantor of this Agreement or any Program Agreement or any rights hereunder without first obtaining the specific written consent of Administrative Agent, or the granting by any Seller Party of any security interest, lien or other encumbrances on any Purchased Assets to any person other than Administrative Agent.
d. Insolvency. An Act of Insolvency shall have occurred with respect to any Seller Party, Guarantor or any Affiliate thereof.
e. Material Adverse Effect. The occurrence of a Material Adverse Effect.
f. Breach of Specified Representation or Covenant or Obligation. A breach by any Seller Party of any of the representations, warranties or covenants or obligations set forth in Sections 13.a(1) (Seller Party Existence), 13.a(7) (Solvency), 14.b (Prohibition of Fundamental Changes), 14.m (Distributions), 14.o (Existence), 14.y (No Pledge), 14.z (Plan Assets) or14.jj (Financial Covenants) of this Agreement.
g. Breach of Non-Financial Representation or Covenant. A breach by any Seller Party Guarantor of any other material representation, warranty or covenant set forth in this Agreement (and not otherwise specified in Section 15.f above) or any other Program Agreement, if such breach is not cured within [***] of knowledge of a Responsible Officer of such Seller Party or Guarantor (other than the representations and warranties set forth in Schedule 1-A, 1-B, or 1-C hereto), which shall be considered solely for the purpose of determining the Asset Value, unless (i) such party shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made, (ii) any such representations and warranties have been determined by Administrative Agent in its sole discretion to be materially false or misleading on a regular basis.
h. Change of Control. The occurrence of a Change in Control, without the prior written consent of the Administrative Agent.
i. Failure to Transfer. A Seller Party fails to transfer the Purchased Assets to Administrative Agent for the benefit of the applicable Buyer (or with respect to Contributed Assets, fails to transfer such Contributed Assets to the applicable Underlying Entity) on the applicable Purchase Date (provided the Administrative Agent, on behalf of the applicable Buyer, has tendered the related Purchase Price).
j. Judgment. A final judgment or judgments for the payment of money in excess of (i) [***] individually or in the aggregate shall be rendered against Seller or (ii) [***] individually or in the aggregate shall be rendered against an Underlying Subsidiary, the Guarantor or any of its Subsidiaries, in each case, by one (1) or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] from the date of entry thereof.
k. Government Action. Any Governmental Authority or any person, agency or entity acting under governmental authority 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 any Seller Party, Guarantor or any Affiliate thereof, or shall have taken any action to displace the management of such Seller Party, Guarantor or any Affiliate thereof or to curtail its authority in the conduct of the business of such Seller Party or Guarantor, and such action provided for in this Section 15.k shall not have been discontinued or stayed within [***].
l. FHA and HUD. Seller is subject to FHA or HUD fees or penalties which have not been paid or is subject to a set off by either of FHA or HUD which failure or failures occur on a persistent and material basis after notice or knowledge thereof (regardless of any subsequent cure).
m. Inability to Perform. An officer of a Seller Party or Guarantor shall admit in writing its inability to, or its intention not to, perform any of such Seller Party’s Obligations hereunder or Guarantor’s obligations hereunder or under the Guaranty.
n. Security Interest. This Agreement shall for any reason cease to create a valid, first priority security interest in any material portion of the Purchased Assets, Contributed Assets or other Repurchase Assets purported to be covered hereby.
o. Financial Statements. A Seller Party’s or Guarantor’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of such Seller Party or Guarantor as a “going concern” or a reference of similar import.
p. Guarantor Breach. Any repudiation of the Guaranty by the Guarantor, or if the Guaranty is not enforceable against the Guarantor.
q. Underlying Entity Breach. A breach by any Underlying Entity of any material representation, warranty or covenant set forth in the related Underlying Entity Assignment Agreement, or any other Program Agreement, any repudiation of such Underlying Entity Assignment Agreement by such Underlying Entity, as applicable, or if such Underlying Entity Assignment Agreement is not enforceable against the applicable Underlying Entity.
r. Servicer Termination Event. A Servicer Termination Event shall have occurred with respect to any Servicer and Seller Parties have not appointed a successor servicer acceptable to Administrative Agent within [***] following such Servicer Termination Event.
An Event of Default shall be deemed to be continuing unless expressly waived by Administrative Agent in writing. If Administrative Agent expressly waives an Event of Default in writing, then such Event of Default shall be deemed to no longer exist or be continuing.
16. | Remedies Upon Default |
In the event that an Event of Default shall have occurred and is continuing:
a. Administrative Agent may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency of any Seller Party or Guarantor), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, 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). Administrative Agent shall (except upon the occurrence of an Act of Insolvency of any Seller Party or Guarantor) give notice to Seller Parties and Guarantor of the exercise of such option as promptly as practicable.
b. If Administrative Agent exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Section, (i) any Seller Party’s obligations in such Transactions to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Section, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by Administrative Agent and applied, in Administrative Agent’s sole discretion, to the aggregate unpaid Repurchase Prices for all outstanding Transactions and any other amounts owing by any Seller Party hereunder and in accordance with the Administration Agreement (provided that any determination with respect to what portion of the Purchase Price is contributed to the Purchase Price-Base or Purchase Price-Incremental shall be made in accordance with the Purchase Price definition), and (iii) any Seller Party shall immediately deliver to Administrative Agent the Asset Files relating to any Purchased Assets or Contributed Assets subject to such Transactions then in any Seller Party’s possession or control.
c. Administrative Agent also shall have the right to obtain physical possession, and to commence an action to obtain physical possession, of all Records and files of any Seller Party relating to the Purchased Assets, Contributed Assets and Repurchase Assets and all documents relating to the Purchased Assets and Contributed Assets (including, without limitation, any legal, credit or servicing files with respect to such Purchased Assets, Contributed Assets and Repurchase Assets) which are then or may thereafter come in to the possession of a Seller Party or any third party acting for such Seller Party. To obtain physical possession of any Purchased Assets and Contributed Assets held by Custodian, Administrative Agent shall present to Custodian a Trust Receipt. Without limiting the rights of Administrative Agent hereto to pursue all other legal and equitable rights available to Administrative Agent for any Seller Party’s failure to perform its obligations under this Agreement, each Seller Party acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Administrative Agent shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Administrative Agent from pursuing any other remedies for such breach, including the recovery of monetary damages.
d. Administrative Agent shall have the right to direct all Servicers then servicing any Purchased Assets and Contributed Assets to remit all Income thereon to Administrative Agent, and if any such payments are received by any Seller Party, Seller shall not commingle the amounts received with other funds of any Seller Party and shall promptly pay them over to Administrative Agent. Administrative Agent shall also have the right to terminate any one (1) or all of the Servicers then servicing any Purchased Mortgage Loans and Contributed Assets with or without cause. In addition, Administrative Agent shall have the right to immediately sell the Purchased Assets and liquidate all Repurchase Assets. Such disposition of Purchased Assets and Contributed Assets may be, at Administrative Agent’s option on a servicing-released basis. Administrative Agent shall not be required to give any warranties as to the Purchased Assets and Contributed Assets with respect to any such disposition thereof. Administrative Agent may specifically disclaim or modify any warranties of title or the like relating to the Purchased Assets and Contributed Assets. The foregoing procedure for disposition of the Purchased Assets and Contributed Assets and liquidation of the Repurchase Assets shall not be considered to adversely affect the commercial reasonableness of any sale thereof. Each Seller Party agrees that it would not be commercially unreasonable for Administrative Agent to dispose of the Purchased Assets, Contributed Assets or the Repurchase Assets or any portion thereof by using internet sites that provide for the auction of assets similar to the Purchased Assets, Contributed Assets or the Repurchase Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Administrative Agent shall be entitled to place the Purchased Assets and Contributed Assets in a pool for issuance of mortgage-backed securities at the then-prevailing price for such securities and to sell such securities for such prevailing price in the open market. Administrative Agent shall also be entitled to sell any or all of such Purchased Assets and Contributed Assets individually for the prevailing price. Administrative Agent shall also be entitled, in its sole discretion to elect, in lieu of selling all or a portion of such Purchased Assets and Contributed Assets, to give such Seller Party credit for such Purchased Assets, Contributed Assets and the Repurchase Assets in an amount equal to the Asset Value of the Purchased Assets and Contributed Assets against the aggregate unpaid Repurchase Price and any other amounts owing by the Seller Parties hereunder.
e. Upon the occurrence of one (1) or more Events of Default, Administrative Agent may apply any proceeds from the liquidation of the Purchased Assets, Contributed Assets and Repurchase Assets to the Repurchase Prices hereunder and all other Obligations in the manner Administrative Agent deems appropriate in its sole discretion and subject to the Administration Agreement; provided, however, the excess of any proceeds upon satisfaction of the Obligations shall be remitted to the Seller subject to the terms of the Netting Agreement.
f. Each Seller Party shall be liable to Administrative Agent and each Buyer for (i) the amount of all reasonable and documented legal or other expenses (including, without limitation, all costs and expenses of Administrative Agent and each Buyer in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel of Administrative Agent and Buyers) incurred in connection with or as a result of the occurrence and continuation of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) entering into or terminating hedge transactions in connection with or as a result of the occurrence and continuation of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence and continuance of an Event of Default in respect of a Transaction.
g. Each Seller Party further recognizes that Administrative Agent may be unable to effect a public sale of any or all of the Underlying Entity Interests by reason of certain prohibitions
contained in the 1934 Act and applicable state securities laws or otherwise, and may be compelled to resort to one (1) or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not a view to the distribution or resale thereof. In view of the nature of the Underlying Entity Interests, each Seller Party agrees that liquidation of any Underlying Entity Interests may be conducted in a private sale and at such price as Administrative Agent may deem commercially reasonable. Administrative Agent shall be under no obligation to delay a sale of any of the Underlying Entity Interests for the period of time necessary to permit the Administrative Agent to register the Underlying Entity Interests for public sale under the 1934 Act, or under applicable state securities laws, even if Administrative Agent would agree to do so.
h. To the extent permitted by applicable law, each Seller Party shall be liable to Administrative Agent and each Buyer for interest on any amounts owing by such Seller Party hereunder, upon the occurrence and continuance of an Event of Default, from the date such Seller Party becomes liable for such amounts hereunder until such amounts are (i) paid in full by such Seller Party or (ii) satisfied in full by the exercise of Administrative Agent’s and Buyers’ rights hereunder. Interest on any sum payable by a Seller Party under this Section 16.h shall accrue at a rate equal to the Post Default Rate.
i. Administrative Agent shall have, in addition to its rights hereunder, any rights otherwise available to it under any other Program Agreement or applicable law.
j. Administrative Agent may exercise one (1) or more of the remedies available to Administrative Agent immediately upon the occurrence and continuance of an Event of Default and, except to the extent provided in subsections (a) and (d) of this Section, at any time thereafter without notice to Seller Parties. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Administrative Agent may have.
k. Administrative Agent may enforce its rights and remedies hereunder without prior judicial process or hearing, and each Seller Party hereby expressly waives any defenses such Seller Party might otherwise have to require Administrative Agent to enforce its rights by judicial process. Each Seller Party also waives any defense (other than a defense of payment or performance) such Seller Party might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Each Seller Party 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.
l. Administrative Agent shall have the right to perform reasonable due diligence with respect to Seller Parties and the Purchased Assets and Contributed Assets, which review shall be at the expense of Seller.
17. | Reports |
a. Default Notices. Each Seller Party shall furnish and shall cause Guarantor to furnish to Administrative Agent immediately, notice of the occurrence of any (A) Event of Default hereunder, (B) default or breach by such Seller Party or any Servicer or Guarantor of any obligation under any Program Agreement or (C) event or circumstance that such party reasonably expects has resulted in, or will, with the passage of time, result in, a Material Adverse Effect or an Event of Default by such party.
b. Financial Notices. Each Seller Party shall furnish:
(1) as soon as available and in any event within (A) except with respect to the last calendar month of the fiscal year, thirty (30) calendar days and (B), with respect to the last calendar month of the fiscal year, forty-five (45) days, in each case, after the end of each calendar month, the unaudited consolidated balance sheets of Seller and its consolidated Subsidiaries as of the end of such period and the related unaudited consolidated statements of income for the Seller and its consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of Seller and its consolidated Subsidiaries in accordance with GAAP (other than solely with respect to footnotes and year-end adjustments) consistently applied, as at the end of, and for, such period;
(2) as soon as available and in any event within ninety (90) days after the end of each fiscal year of Seller, the consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings for the Seller and its consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, shall have no “going concern” qualification and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Seller and its respective consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;
(3) at the time Seller furnishes each set of financial statements pursuant to Section 17.b(1) or (2) above, an Officer’s Compliance Certificate of a Responsible Officer of Seller;
(4) reserved;
(5) as soon as available and in any event within thirty (30) days of receipt thereof:
(a) if applicable, copies of any 10-Ks, 10-Qs, registration statements and other “corporate finance” SEC filings by Seller Parties and Guarantor, within five (5) Business Days of their filing with the SEC; provided, that, Seller Parties and Guarantor or any Subsidiary will provide Administrative Agent with a copy of the annual 10-K filed with the SEC by Seller Parties and Guarantor or its Subsidiaries, no later than ninety (90) days after the end of the year;
(b) to the extent not prohibited by any Governmental Authority, copies of relevant portions of all final written Governmental Authority 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 Party and Guarantor’s operations;
(c) such other information regarding the financial condition, operations, or business of such Seller Party and Guarantor as Administrative Agent may reasonably request; and
(d) the particulars of any Event of Termination in reasonable detail.
(6) reserved;
(7) Seller shall provide Administrative Agent, as part of the Officer’s Compliance Certificate, a list of all material litigation, actions, suits, arbitrations or investigations pursuant to Section 14.a; and
(8) Seller shall provide the market value analysis for the valuation of its mortgage servicing rights as determined by a Third Party Evaluator for each month, in all instances as set forth in the Officer’s Compliance Certificate.
c. Notices of Certain Events. As soon as possible and in any event within [***] (unless otherwise noted below) of knowledge of a Responsible Officer of the Seller thereof, each Seller Party shall furnish to Administrative Agent notice of the following events:
(1) a material and adverse change in the insurance coverage required of such Seller Party or any other Person pursuant to any Program Agreement, with a copy of evidence of same attached that is not otherwise required by the Agencies;
(2) to the extent not prohibited by any Governmental Authority, any material dispute, litigation, investigation, proceeding or suspension between such Seller Party, Guarantor or Servicer, on the one hand, and any Governmental Authority;
(3) any material change in accounting policies or financial reporting practices of Seller or Guarantor;
(4) within [***] of knowledge of a Responsible Officer of Seller thereof, each Seller shall furnish to Administrative Agent notice of the following events with respect to any Purchased Asset or Contributed Asset, that the underlying Mortgaged Property or REO Property, as applicable, has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as to affect adversely the value of such Purchased Mortgage Loan or Contributed Asset;
(5) to the extent not prohibited by any Governmental Authority, any material penalties, sanctions or charges levied, or threatened to be levied, against Seller, any material change in approval status, or material adverse actions taken against Seller by any Government Authority supervising or regulating the origination or servicing of mortgage loans by, or the issuer status of, Seller;
(6) reserved;
(7) any default related to any Repurchase Asset or any lien or security interest (other than security interests created hereby or by the other Program Agreements) on, or claim asserted against, any of the Purchased Assets or Contributed Assets; and
(8) any other event, circumstance or condition that has resulted, or has a reasonable likelihood of resulting, in a Material Adverse Effect with respect to such Seller Party, Guarantor or Servicer
d. Servicing Tape. On or prior to the [***] of each calendar month, each Seller Party will furnish to Administrative Agent (i) an electronic Purchased Mortgage Loans and Contributed Assets performance data, including, without limitation, delinquency reports and volume information, broken down by product (i.e., delinquency, foreclosure and net charge off reports) and (ii) electronically, in a format mutually acceptable to Administrative Agent and such Seller Party, servicing information, including, without limitation, those fields reasonably requested by Administrative Agent from time to time, on a loan by loan basis and in the aggregate, with respect to the Purchased Mortgage Loans and Contributed Assets serviced by such Seller or any Servicer for the month (or any portion thereof) prior to the Reporting Date. In addition to the foregoing information on each Reporting Date, each Seller Party will furnish to Administrative Agent such information upon the occurrence and continuation of an Event of Default.
e. Other Reports. Each Seller Party shall deliver to Administrative Agent any other reports or information reasonably requested by Administrative Agent or as otherwise required pursuant to this Agreement or as set forth in the Officer’s Compliance Certificate delivered pursuant to Section 17.b(3) above.
f. DE Compare Ratio and HUD Reports. To the extent Purchased Assets and/or Contributed Assets consist of FHA Loans or VA Loans, the Seller Parties shall furnish to Administrative Agent the following notices:
1. | In the event the applicable Seller Party’s DE Compare Ratio equals or exceeds [***], such Seller Party shall provide Buyer with written notice of such occurrence within [***], which notice shall include a written summary of actions Seller Party is taking to correct its DE Compare Ratio. |
2. | In the event applicable Seller Party receives any inquiry or notice from HUD regarding its DE Compare Ratio, such Seller Party shall provide Buyer with written notice of such inquiry or notice within [***], regardless of Seller Party’s current DE Compare Ratio. |
3. | In the event of any action plan with respect to such Seller Party’s DE Compare Ratio is agreed to between Seller Party and HUD or imposed upon Seller Party by HUD, such Seller Party shall provide Buyer with a written summary of such agreement or imposition, as applicable, within [***] |
18. | Repurchase Transactions |
A Buyer may, in its sole election, engage in repurchase transactions (as “seller” thereunder) with any or all of the Purchased Assets and/or Repurchase Assets or pledge, hypothecate, assign, transfer or otherwise convey any or all of the Purchased Assets and/or Repurchase Assets with a counterparty of Buyers’ choice (such transaction, a “Repledge Transaction”). Any Repledge Transaction shall be effected by notice to the Administrative Agent, and shall be reflected on the books and records of the Administrative Agent. No such Repledge Transaction shall relieve such Buyer of its obligations to transfer Purchased Assets and Repurchase Assets to Seller (and not substitutions thereof) pursuant to the terms hereof. In
furtherance, and not by limitation of, the foregoing, it is acknowledged that each counterparty under a Repledge Transaction (a “Repledgee”), is a repledgee as contemplated by Sections 9-207 and 9-623 of the UCC (and the relevant Official Comments thereunder). Administrative Agent and Buyers are each hereby authorized to share this Agreement, the Program Agreements and any information delivered hereunder with the Repledgee or any potential Repledgee, so long as such Repledgee or potential Repledgee is subject to confidentiality provisions substantially similar to those provided herein and covering the terms of this Agreement and the other Program Agreements.
19. | Single Agreement |
Administrative Agent, Buyers and Seller Parties acknowledge they have 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, each of Administrative Agent, Buyers and Seller Parties 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) 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. Notwithstanding anything in this Agreement to the contrary, in the event that (a) a Buyer is not an Affiliate of Administrative Agent, Alpine or CS Cayman (a “Non-Affiliate Buyer”), (b) an Event of Default shall have occurred and is continuing and (c) Administrative Agent provides written notice to the Seller to sever each Non-Affiliate Buyer’s Transactions (the “Non-Affiliate Transactions”) and treat such Non-Affiliate Transactions as separate Transactions under this Agreement (a “Severance Notice”), then Administrative Agent, Buyers and Seller Parties acknowledge that each such Non-Affiliate Transaction shall be deemed a separate Transaction under a separate and distinct agreement with the same terms and conditions as set forth herein (each a “Non-Affiliate MRA”), and each such Non-Affiliate Buyer shall be deemed to be the administrative agent with respect to its respective Non-Affiliate Transactions under its respective Non-Affiliate MRA; provided, that Transactions owned by Administrative Agent, Alpine and CS Cayman or any respective Affiliate shall continue to be deemed a single Transaction with Administrative Agent serving as the administrative agent for Alpine, CS Cayman or any respective Affiliate, in each case, pursuant to the terms and conditions of this Agreement.
20. | Notices and Other Communications |
Any and all notices (with the exception of Transaction Requests, which shall be delivered via electronic mail or other electronic medium agreed to by the Administrative Agent and the Seller Parties), statements, demands or other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.
If to Seller Parties:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: Maria Fregosi, Chief Financial Officer
Email: [***]
with a copy to:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: [***]
Telephone: [***]
E-mail: [***]
with a copy to:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: Legal
E-mail: [***]
If to Administrative Agent:
For Transaction Requests:
CSFBMC LLC
c/o Credit Suisse Securities (USA) LLC
One Madison Avenue, 2nd floor
New York, New York 10010
Attention: [***]
Phone: [***]
E-mail: [***]
with a copy to:
Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 4th Floor
New York, New York 10010
Attention: [***]
E-mail: [***]
For all other Notices:
Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 4th Floor
New York, New York 10010
Attention: [***]
Phone Number: [***]
Fax Number: [***]
E-mail: [***]
with a copy to:
Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 11th Floor
New York, New York 10010
Attention: [***]
Fax Number: [***]
21. | Entire Agreement; Severability |
This Agreement and the Administration Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
22. | Non assignability |
a. Assignments. The Program Agreements are not assignable by any Seller Party or any Guarantor. Subject to Section 36 hereof (Acknowledgement of Assignment and Administration of Repurchase Agreement) and at no cost of expense to the Seller, each of Administrative Agent and Buyers may from time to time assign all or a portion of their rights and obligations under this Agreement and the Program Agreements pursuant to the Administration Agreement; provided, however that Administrative Agent shall notify Seller of any such assignment and shall maintain, solely for this purpose as a non-fiduciary agent of Seller Parties, for review by Seller Parties upon written request, a register of assignees and participants (the “Register”) and a copy of an executed assignment and acceptance by Administrative Agent and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. The entries in the Register shall be conclusive absent manifest error, and the Seller Parties, Guarantor, Administrative Agent and Buyers shall treat each Person whose name is recorded in the Register pursuant to the preceding sentence as a Buyer hereunder. Upon such assignment and recordation in the Register, (a) such assignee shall be a party hereto and to each Program Agreement 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 Administrative Agent and Buyers hereunder, as applicable, and (b) Administrative Agent and Buyer, as applicable, shall be released from its obligations hereunder and under the Program Agreements. Any assignment hereunder shall be deemed a joinder of such assignee as a Buyer hereto. Unless otherwise stated in the Assignment and Acceptance, each Seller Party shall continue to take directions solely from Administrative Agent unless otherwise notified by Administrative Agent in writing. Administrative Agent and Buyers may distribute to any prospective or actual assignee this Agreement, the other Program Agreements, any document or other information delivered to Administrative Agent and/or Buyers by Seller Parties.
b. Participations. At no cost of expense to the Seller, any Buyer may sell participations to one (1) or more Persons in or to all or a portion of its rights and obligations under this Agreement and under the Program Agreements; provided, however, that (i) such Buyer shall notify Seller of such sale, (ii) such Buyer’s obligations under this Agreement or in any Transaction under this Agreement and the other Program Agreements shall remain unchanged, (iii) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations; (iv) such Participant shall not be entitled to receive
any greater payment under Section 11, with respect to any participation, than its participating Lender would have been entitled to receive; and (v) Seller Parties shall continue to deal solely and directly with Administrative Agent and/or Buyers in connection with such Buyer’s rights and obligations under this Agreement and the other Program Agreements. Administrative Agent and Buyers may distribute to any prospective or actual Participant this Agreement, the other Program Agreements any document or other information delivered to Administrative Agent and/or Buyers by Seller Parties. Each Buyer that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Seller Parties, maintain a register on which it enters the name and address of each Participant and the Purchase Price (and stated interest) of the Transactions entered into by Buyer (the “Participant Register”). If Buyer sells a participation in any Transaction, it shall provide Seller, or maintain as agent of Seller, the information described in this paragraph and permit Seller to review such information as reasonably needed for Seller to comply with its obligations under this Agreement or under any applicable law or governmental regulation or procedure, including, without limitation, as necessary to establish that such Transaction is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The information maintained by a Buyer or by the Seller with respect to participations shall be conclusive absent manifest error, and Buyer shall treat each Person whose name is recorded in such participant registers as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
23. | Set-off |
In addition to any rights and remedies of the Administrative Agent and Buyers hereunder and by law, the Administrative Agent and Buyers shall have the right, solely after an Event of Default has occurred and is continuing, without prior notice to the Seller Parties or Guarantor, any such notice being expressly waived by the Seller Parties and Guarantor to the extent permitted by applicable law to set-off and appropriate and apply against any Obligation from any Seller Party, Guarantor or any Affiliate thereof to a Buyer or any of its Affiliates any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from a Buyer or any Affiliate thereof to or for the credit or the account of any Seller Party, Guarantor or any Affiliate thereof. All such set-offs shall be subject to the priorities set forth in the Administration Agreement. Administrative Agent or such Buyer agrees promptly to notify Seller Parties and Guarantor after any such set off and application made by Administrative Agent or such Buyer; provided that the failure to give such notice shall not affect the validity of such set off and application.
24. | Binding Effect; Governing Law; Jurisdiction |
a. This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Each Seller Party acknowledges that the obligations of Administrative Agent and Buyers hereunder or otherwise are not the subject of any guaranty by, or recourse to, any direct or indirect parent or other Affiliate of Administrative Agent and Buyers. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN).
b. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY. EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS TO THE 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, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR PROCEEDING. EACH PARTY HERETO HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, 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 AGREEMENTS.
25. | No Waivers, Etc. |
No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Section 6.a or Section 16.a hereof or otherwise, will not constitute a waiver of any right to do so at a later date.
26. | Intent |
a. The parties intend and recognize that (i) each Transaction is a “repurchase agreement” as that term is defined in Section 101 of the Bankruptcy Code, a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code, and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, (ii) all payments hereunder are deemed “margin payments” or “settlement payments” as defined in the Bankruptcy Code, (iii) the pledge of the Repurchase Assets 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 , and (iv) the Guaranty 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. Each Seller Party, Administrative Agent and Buyers 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 any Transaction under this Agreement or this Agreement as a “securities contract” and/or “master netting agreement” within the meaning of the Bankruptcy Code.
b. Each Seller Party, Administrative Agent and Buyers 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).
c. Administrative Agent’s or a Buyer’s right to liquidate the Purchased Assets and Contributed 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 16 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 362(b)(6), 362(b)(7), 362(b)(27), 546(e), 546(f), 546(j), 555, 559 and 561; Administrative Agent’s or a Buyer’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 Buyer to or for the credit of the account of any Affiliate against and on account of the obligations and liabilities of Seller pursuant to Section 23 hereof is a contractual right as described in Bankruptcy Code Sections 553 and 561; and; any payments or transfers of property made with respect to this
Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” or “settlement payment” as such terms are defined in Bankruptcy Code Sections 741(5) and 741(8).
d. The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in 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).
e. It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one (1) or both of the parties is not a “financial institution” as that term is defined in FDICIA).
f. This Agreement is intended to be a “repurchase agreement”, “master netting agreement” and a “securities contract,” within the meaning of Section 101(47), Section 555, Section 559 and Section 741 under the Bankruptcy Code.
g. Each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, this Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.
27. | Disclosure Relating to Certain Federal Protections |
The parties acknowledge that they have been advised that:
a. in the case of Transactions in which one of the parties is a broker or dealer registered with the SEC under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the SIPA do not protect the other party with respect to any Transaction hereunder;
b. in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and
c. in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
28. | Power of Attorney |
Each Seller Party hereby authorizes Administrative Agent to file such financing statement or statements relating to the Repurchase Assets as Administrative Agent, at its option, may deem appropriate. Each Seller Party hereby appoints Administrative Agent as such Seller Party’s agent and attorney-in-fact to execute any such financing statement or statements in such Seller Party’s name and to perform all other acts which Administrative Agent deems appropriate to perfect and continue its ownership interest in and/or the security interest granted hereby, if applicable, and to protect, preserve and realize upon the Repurchase Assets, including, but not limited to, the right to endorse notes, complete blanks in
documents, transfer servicing, and sign assignments on behalf of such Seller Party as its agent and attorney-in-fact. This agency and power of attorney is coupled with an interest and is irrevocable without Administrative Agent’s consent. Notwithstanding the foregoing, the power of attorney hereby granted may be exercised only during the occurrence and continuance of any Event of Default hereunder. Each Seller Party shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 28. In addition to the foregoing, each Seller Party agrees to execute a Power of Attorney, in the form of Exhibit A hereto, to be delivered on the date hereof; provided that Administrative Agent shall not exercise such Power of Attorney unless an Event of Default has occurred and is continuing.
29. | Buyers May Act Through Administrative Agent |
Each Buyer has designated the Administrative Agent under the Administration Agreement for the purpose of performing any action hereunder.
30. | Indemnification; Obligations |
a. Each Seller Party and Guarantor agrees to hold Administrative Agent, Buyers and each of their respective Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) harmless from and indemnify each Indemnified Party (and will reimburse each Indemnified Party as the same is incurred) against all liabilities, losses, damages, judgments, and reasonable and documented, out-of-pocket costs and expenses (including, without limitation, reasonable fees and expenses of counsel) of any kind which may be imposed on, incurred by, or asserted against any Indemnified Party relating to or arising out of this Agreement, any Transaction Request, any Program Agreement or any transaction contemplated hereby or thereby (including, without limitation, (i) any such liabilities, losses, damages, judgments, costs and expenses arising from any acts or omissions of such party and (ii) any wire fraud or data or systems intrusions which causes Administrative Agent or Buyers to suffer any such liability, loss, damage, judgment, cost and/or expense), resulting from anything other than the Indemnified Party’s fraud, bad faith, gross negligence or willful misconduct. Each Seller Party and Guarantor also agrees to reimburse each Indemnified Party for all reasonable and documented, out-of-pocket expenses in connection with the enforcement of this Agreement and the exercise of any right or remedy provided for herein, any Transaction Request and any Program Agreement, including, without limitation, the reasonable fees and disbursements of counsel. Each Seller Party’s and Guarantor’s agreements in this Section 30 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. Each Seller Party and Guarantor hereby acknowledges that its obligations hereunder are recourse obligations of each Seller Party and Guarantor and are not limited to recoveries each Indemnified Party may have with respect to the Purchased Assets. Each Seller Party and Guarantor also agrees not to assert any claim against Administrative Agent, each Buyer 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 facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. This Section 30.a shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. 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.
b. Without limitation to the provisions of Section 4 hereof, if any payment of the Repurchase Price of any Transaction is made by any Seller Party other than on the then scheduled Repurchase Date thereto as a result of an acceleration of the Repurchase Date pursuant to Section
16 hereof or for any other reason, such Seller Party shall, upon demand by Administrative Agent, pay to Administrative Agent on behalf of Buyers an amount sufficient to compensate Buyers for any losses, costs or expenses that they may reasonably incur as of a result of such payment.
c. Without limiting the provisions of Section 30.a hereof, if a Seller Party fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Seller Party by Administrative Agent (subject to reimbursement by such Seller Party) in its sole discretion.
31. | 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. Delivery of an executed counterpart of a signature page of this Agreement in a Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the 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 providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.
32. | Confidentiality |
a. This Agreement and its terms, provisions, supplements and amendments, and notices hereunder, are proprietary to Administrative Agent and Buyers and shall be held by each Seller Party and Guarantor in strict confidence and shall not be disclosed to any third party without the written consent of Administrative Agent except for (i) disclosure to such party’s direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence or (ii) disclosure required by any Requirement of Law. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreement, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that such party may not disclose the name of or identifying information with respect to the other parties or any pricing terms (including, without limitation, the Pricing Rate, Purchase Price Percentage, Aggregate Purchase Price-Base, Aggregate Purchase Price-Incremental, Asset Value-Base, Price Differential-Base, Pricing Rate-Base, Purchase Price-Base, Purchase Price Percentage-Base, Daily Weighted Average Price Differential-Base, Daily Weighted Average Price Differential-Incremental, Asset Value-Incremental, Price Differential-Incremental, Pricing Rate-Incremental, Purchase Price-Incremental, Purchase Price Percentage-Incremental, Maximum Purchase Price-Incremental, Maximum Purchase Price Percentage-Incremental, Minimum Purchase Price-Incremental, Minimum Purchase Price Percentage-Incremental, Maximum Value Amount, Maximum Aggregate
Purchase Price-Incremental, Weighted Average Pricing Rate-Base, Weighted Average Pricing Rate-Incremental and any other fees specified in the Pricing Side Letter) 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 such other party.
b. Notwithstanding anything in this Agreement to the contrary, each Seller Party 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, Contributed Assets and/or any applicable terms of this Agreement (the “Confidential Information”). Each Seller Party understands 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 “Act”), and each Seller Party agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the Act and other applicable federal and state privacy laws. The Seller Parties 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 Act) of Administrative Agent and Buyers or any Affiliate of Administrative Agent or Buyers which the a Seller Party holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Each Seller Party represents and warrants that it has implemented appropriate measures to meet the objectives of Section 501(b) of the Act and of the applicable standards adopted pursuant thereto, as now or hereafter in effect. Upon request, each Seller Party will provide evidence reasonably satisfactory to allow Administrative Agent and/or Buyers to confirm that the providing party has satisfied its obligations as required under this Section. Without limitation, this may include Administrative Agent’s or Buyers’ review of audits, summaries of test results, and other equivalent evaluations of a Seller Party. Each Seller Party shall notify Administrative Agent immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Administrative Agent, Buyers or any Affiliate of Buyers provided directly to such Seller Party by Administrative Agent, Buyers or such Affiliate. Each Seller Party shall provide such notice to Administrative Agent by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual.
c. Notwithstanding anything else herein, nothing in this Agreement shall require any party to provide any notice, information, investigation, audit, correspondence, and any other communication (collectively, “Information”) to any other party if providing such Information is prohibited by applicable laws, or if such party is required to not disclose such Information by a governmental authority or Agency.
33. | Recording of Communications |
Administrative Agent, Buyers, each Seller Party and Guarantor shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its employees and those of the other party with respect to Transactions. Administrative Agent, Buyers, each Seller Party and Guarantor consent to the admissibility of such tape recordings in any court, arbitration, or other proceedings. The parties agree that a duly authenticated transcript of such a tape recording shall be deemed to be a writing conclusively evidencing the parties’ agreement.
34. | Periodic Due Diligence Review |
Each Seller Party and Guarantor acknowledges that Administrative Agent and Buyers have the right to perform continuing due diligence reviews with respect to the Seller Parties and Guarantors, the Purchased Assets and Contributed Assets, for purposes of verifying compliance with the representations, warranties, and specifications made hereunder, for the purpose of performing quality control review of the Purchased Assets and Contributed Assets or otherwise, and each Seller Party agrees that upon reasonable (but no less than two (2) Business Day’s) prior notice unless an Event of Default shall have occurred, in which case no notice is required, to any Seller Party, Administrative Agent, Buyers or their authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Asset Files and any and all documents, data, records, agreements, instruments or information relating to such Purchased Assets and Contributed Assets (including, without limitation, quality control review) in the possession or under the control of a Seller Party, a Servicer, the Guarantor and/or the Custodian. Each Seller Party also shall make available to Administrative Agent and Buyers a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Asset Files, the Purchased Assets and Contributed Assets. Without limiting the generality of the foregoing, each Seller Party acknowledges that Administrative Agent and Buyers may purchase Purchased Assets and Contributed Assets from a Seller Party based solely upon the information provided by such Seller Party to Administrative Agent and Buyers in the Asset Schedule and the representations, warranties and covenants contained herein, and that Administrative Agent or Buyers, at their option, have the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets and Contributed Assets purchased in a Transaction, including, without limitation, ordering BPOs, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Purchased Assets and Contributed Assets. Administrative Agent or Buyers may underwrite such Purchased Assets and Contributed Assets itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Each Seller Party agrees to cooperate with Administrative Agent, Buyers and any third party underwriter in connection with such underwriting, including, but not limited to, providing Administrative Agent, Buyers and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets and Contributed Assets in the possession, or under the control, of Seller Parties. Each Seller Party further agrees that Seller Parties shall pay all costs and expenses incurred by Administrative Agent and Buyers in connection with Administrative Agent’s and Buyers’ activities pursuant to this Section 34.
35. | Authorizations |
Any of the persons whose signatures and titles appear on Schedule 2 hereto are authorized, acting singly, to act for Seller Parties or Administrative Agent to the extent set forth therein, as the case may be, under this Agreement. The Seller Parties may amend Schedule 2 hereto from time to time by delivering a revised Schedule 2 to Administrative Agent and expressly stating that such revised Schedule 2 shall replace the existing Schedule 2 hereto.
36. | Acknowledgment of Assignment and Administration of Repurchase Agreement |
Pursuant to Section 22 above (Non-assignability) of this Agreement, Administrative Agent may sell, transfer and convey or allocate certain Purchased Assets and Contributed Assets and the related Repurchase Assets and related Transactions to certain affiliates of Administrative Agent and/or one (1) or more CP Conduits (the “Additional Buyers”). Each Seller Party hereby acknowledges and agrees to the joinder of such Additional Buyers and the assignments and the terms and provisions set forth in the Administration Agreement. The Administrative Agent shall administer the provisions of this Agreement, subject to the terms of the Administration Agreement for the benefit of the Buyers and any Repledgees, as applicable. For the avoidance of doubt, all payments, notices, communications and agreements pursuant to this Agreement shall be delivered to, and entered into by, the Administrative Agent for the benefit of the Buyers and/or the Repledgees, as applicable. Furthermore, to the extent that the Administrative Agent
exercises remedies pursuant to this Agreement, any of the Administrative Agent and/or any Buyer will have the right to bid on and/or purchase any of the Repurchase Assets pursuant to Section 16 above (Remedies Upon Default). The benefit of all representations, rights, remedies and covenants set forth in this Agreement shall inure to the benefit of the Administrative Agent on behalf of each Buyer and Repledgees, as applicable. All provisions of this Agreement shall survive the transfers contemplated herein (including any Repledge Transactions) and in the Administration Agreement, except to the extent such provisions are modified by the Administration Agreement. In the event of a conflict between the Administration Agreement and this Agreement, the terms of the Administration Agreement shall control. Notwithstanding that multiple Buyers may purchase individual Purchased Mortgage Loans and Contributed Assets subject to Transactions entered into under this Agreement, all Transactions shall continue to be deemed a single Transaction and all of the Repurchase Assets shall be security for all of the Obligations hereunder, subject to the priority of payments provisions set forth in the Administration Agreement.
37. | Acknowledgement of Anti-Predatory Lending Policies |
Administrative Agent has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan.
38. | Documents Mutually Drafted |
Each Seller Party, the Guarantor, the Administrative Agent and the Buyers agree that this Agreement and each other Program Agreement prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.
39. | General Interpretive Principles |
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
a. the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
b. accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
c. references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
d. a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
e. the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
f. the term “include” or “including” shall mean without limitation by reason of enumeration;
g. all times specified herein or in any other Program Agreement (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated;
h. all references herein or in any Program Agreement to “good faith” means good faith as defined in Section 1-201(b)(20) of the UCC as in effect in the State of New York; and
i. an Event of Default shall be deemed continuing unless such Event of Default has been waived in writing.
40. | Conflicts |
In the event of any conflict between the terms of this Agreement and any other Program Agreement, the documents shall control in the following order of priority: first, the terms of the Pricing Side Letter shall prevail, then the terms of the Administration Agreement, then the terms of this Agreement shall prevail, and then the terms of the other Program Agreements shall prevail.
41. | Pool Subdivisions |
The Administrative Agent may from time to time deliver to Seller Parties a Pool Subdivision Notice which notice shall identify a Pool of Purchased Assets and/or Contributed Assets that shall be treated separately from the remaining Purchased Assets and/or Contributed Assets (which remaining Purchased Assets and/or Contributed Assets shall constitute another Pool). The Administrative Agent may modify any such Pool Subdivision Notice from time to time to readjust the composition of the Pools identified therein. Following delivery of a Pool Subdivision Notice, the calculations with respect to Price Differential (and all of the component calculations used in determining such calculation) shall be calculated separately on the basis of the Purchased Assets comprising each Pool, which shall result in a separate Price Differential for each Pool. For the avoidance of doubt, a Pool Subdivision Notice shall not (a) modify or otherwise affect the rights and obligations of the parties under the Program Agreements except as expressly contemplated in this Section 41; and (b) shall not be construed as a Severance Notice as contemplated by Section 19 of this Agreement.
42. | Bankruptcy Non-Petition |
The parties hereby agree that they shall not institute against, or join any other person in instituting against, any Buyer that is a CP Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one (1) year and one (1) day after the latest maturing commercial paper note issued by the applicable CP Conduit is paid in full.
43. | Limited Recourse |
The obligations of each Buyer under this Agreement or any other Program Agreement are solely the corporate obligations of such Buyer. No recourse shall be had for the payment of any amount owing by any Buyer under this Agreement, or for the payment by any Buyer of any fee in respect hereof or any other obligation or claim of or against such Buyer arising out of or based on this Agreement, against any stockholder, partner, member, employee, officer, director or incorporator or other authorized person of such Buyer. In addition, notwithstanding any other provision of this Agreement, the parties agree that all payment obligations of any Buyer that is a CP Conduit under this Agreement shall be limited recourse obligations of such Buyer, payable solely from the funds of such Buyer available for such purpose in accordance with its commercial paper program documents. Each party waives payment of any amount which such Buyer does not pay pursuant to the operation of the preceding sentence until the day which is
at least one (1) year and one (1) day after the payment in full of the latest maturing commercial paper note (and waives any “claim” against such Buyer within the meaning of Section 101(5) of the Bankruptcy Code or any other Debtor Relief Law for any such insufficiency until such date).
44. | Nominee |
a. Seller Parties, Administrative Agent and the Buyers hereby acknowledge and agree, and Seller Parties hereby appoint, the Nominee as (i) their nominee as mortgagee of record and payee on the FHA Connection System with respect to each Early Buyout Loan, and the Nominee hereby accepts such appointment, and (ii) as nominee and agent of Seller Parties, Administrative Agent and the Buyers as set forth herein, to the extent applicable.
b. Following receipt by Nominee of written notice of the occurrence and continuation of an Event of Default, the Nominee agrees to take direction from the Administrative Agent with respect to the FHA Loans, Early Buyout Loans and Contributed REO Properties.
c. It is the intent of the Seller Parties, Servicer, Administrative Agent and the Buyers that the Nominee retains bare legal title to the Early Buyout Loans, and Contributed REO Properties for all purposes including, without limitation, for purposes of Section 541(d) of the Bankruptcy Code and accordingly, Nominee, in their capacity as a nominee, shall have no property right to the Contributed REO Properties.
d. Administrative Agent may, upon notice to the Seller Parties, terminate the Nominee and appoint itself or another person as the successor nominee following an Event of Default that is continuing.
45. | Joint and Several |
Seller Parties, Administrative Agent and Buyers hereby acknowledge and agree that Seller Parties are each jointly and severally liable to Administrative Agent and Buyers for all of their respective Obligations hereunder. Accordingly, each Seller Party waives any and all notice of creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Administrative Agent upon such Seller Party’s joint and several liability. Each Seller Party waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon such Seller Party with respect to the Obligations. When pursuing its rights and remedies hereunder against any Seller Party, Administrative Agent may, but shall be under no obligation to, pursue such rights and remedies hereunder against any Seller Party or against any collateral security for the Obligations or any right of offset with respect thereto, and any failure by Administrative Agent to pursue such other rights or remedies or to collect any payments from such Seller Party to realize upon any such collateral security or to exercise any such right of offset, or any release of such Seller Party or any such collateral security, or right of offset, shall not relieve such Seller Party of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Administrative Agent against such Seller Party.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Administrative Agent |
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By: | /s/ Margaret Dellafera | ||
Name: | Margaret Dellafera | ||
Title: | Vice President |
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Buyer |
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By: | /s/ Margaret Dellafera | ||
Name: | Margaret Dellafera | ||
Title: | Vice President |
By: | /s/ Ernest Calabrese | ||
Name: | Ernest Calabrese | ||
Title: | Authorized Signatory |
ALPINE SECURITIZATION LTD as a Buyer, by Credit Suisse AG, New York Branch as Attorney-in-Fact |
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By: | /s/ Elie Chau | ||
Name: | Elie Chau | ||
Title: | Vice President |
By: | /s/ Patrick Duggan | ||
Name: | Patrick Duggan | ||
Title: | Vice President |
Signature Page to the Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | |||
By: | /s/ Maria Fregosi | ||
Name: | Maria Fregosi | ||
Title: | Chief Financial Officer |
Signature Page to the Master Repurchase Agreement
SCHEDULE 1-A
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED MORTGAGE LOANS AND CONTRIBUTED MORTGAGE LOANS
Each Seller Party makes the following representations and warranties to Administrative Agent with respect to each Purchased Mortgage Loan and Contributed Mortgage Loan that is at all times subject to a Transaction hereunder and at all times while the Program Agreements and any Transaction hereunder is in full force and effect. With respect to those representations and warranties which are made to the best of such Seller Party’s knowledge, if it is discovered by such Seller Party or Administrative Agent that the substance of such representation and warranty is inaccurate, notwithstanding such Seller Party’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 Asset Value.
a. Payments Current. Except with respect to a Mortgage Loan that is an Early Buyout Loan, Non-Performing Mortgage Loan or a Re-Performing Mortgage Loan, all payments required to be made up to the Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have been made and credited. With respect to a Mortgage Loan other than an Early Buyout Loan, Non-Performing Mortgage Loan or a Re-Performing Mortgage Loan, no payment required under the Mortgage Loan is more than sixty (60) days delinquent using the Mortgage Bankers Association method of determining delinquency nor has any payment under the Mortgage Loan been delinquent more than sixty (60) days at any time since the origination of the Mortgage Loan and, if the Mortgage Loan is a Co-op Loan (other than a Non-Performing Mortgage Loan or a Re-Performing Mortgage Loan), no foreclosure action or private or public sale under the Uniform Commercial Code has ever to the knowledge of the related Seller Party, been threatened or commenced with respect to the Co-op Loan. Except with respect to a Mortgage Loan that is a Non-Performing Mortgage Loan or a Re-Performing Mortgage Loan, the first Monthly Payment shall be made, or shall have been made, with respect to the Mortgage Loan by the next due date.
b. No Outstanding Charges. Except with respect to Non-Performing Mortgage Loans and Re-Performing Mortgage Loans, 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. No Seller Party nor the originator from which such Seller Party acquired the Mortgage Loan 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 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.
c. Type of Loan. With respect to each Business Purpose Mortgage Loan, (i) the Mortgage Loan is primarily for business or commercial purposes (as referenced in the Truth and Lending Act and its implementing regulation, Regulation Z) and not primarily for personal, family or household purposes and (ii) the Mortgaged Property securing the related Mortgage is non-owner occupied. Such Business Purpose Mortgage Loan is not subject to the Truth in Lending Act and its implementing regulation, Regulation Z, and the Real Estate Settlement Procedures Act and its implementing regulation, Regulation X. The Mortgagor has executed a business purpose affidavit stating that the Business Purpose Mortgage Loan is for commercial, business or investment purposes only and that the Mortgagor is not and will not occupy or claim the property as a primary or secondary residence.
d. Income/Employment/Assets. With respect to each Business Purpose Mortgage Loan, the originator verified the Mortgagor’s income, employment, and assets in accordance with the Acquisition Guidelines.
e. Original Terms Unmodified. Other than with respect to Early Buyout Loans, Non-Performing Mortgage Loans and Re-Performing Mortgage Loans, the terms of the Mortgage Note (and the Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyers, and which has been delivered to the Custodian and the terms of which are reflected in the Custodial Asset Schedule and approved by the Administrative Agent. 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 on the Custodial Asset Schedule. 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 Asset File delivered to the Custodian and the terms of which are reflected in the Custodial Asset Schedule.
f. No Defenses. The Mortgage Loan (and the Assignment of Proprietary Lease related to each Co-op Loan) is not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part 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. Except with respect to a Mortgage Loan that is an Early Buyout Loan, Non-Performing Mortgage Loan or a Re-Performing Mortgage Loan, no Seller Party has 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. Except that the Mortgage Loan may not be a Qualified Mortgage Loan and may be a “higher cost mortgage loan” as defined under 12 CFR 1026.35, no Seller Party has knowledge of any circumstances or condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that could reasonably be expected to cause the Mortgage Loan to become delinquent or materially adversely affect the value or marketability of the Mortgage Loan.
g. Hazard and Flood Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by the applicable Seller Party as of the date of origination consistent with the Acquisition Guidelines, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than the greatest of (i) 100% of the replacement cost of all improvements to the Mortgaged Property, (ii) the outstanding principal balance of the Mortgage Loan, or (iii) the amount necessary to avoid the operation of any co-insurance provisions with respect to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in accordance with the Acquisition Guidelines. 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 National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1973. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming the related Seller Party or its servicer, and 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 any Seller Party. 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 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. No Seller Party has engaged in, or has 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, any unlawful fee, commission, kickback or other unlawful compensation or value of any kind having been or will be received, retained or realized by any attorney, firm or other Person, or that such unlawful items have been received, retained or realized by such Seller Party.
h. Environmental Compliance. To the best of the applicable Seller Party’s knowledge, there does not exist on the Mortgaged Property any hazardous substances, hazardous materials, hazardous wastes, solid wastes or other pollutants, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., or other applicable federal, state or local environmental laws including, without limitation, asbestos, in each case in excess of the permitted limits and allowances set forth in such environmental laws to the extent such laws are applicable to the Mortgaged Property. To the best of the applicable Seller Party’s knowledge with respect to each of the following clauses, there is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any applicable environmental law (including, without limitation, asbestos), rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property.
i. Compliance with Applicable Law. At the time of origination, or if modified, the date of modification, 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 the related Seller Party shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Administrative Agent, and shall deliver to Administrative Agent, upon demand, evidence of compliance with all such requirements.
j. No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. Except with respect to a Mortgage Loan that is an Early Buyout Loan, no Seller Party 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 any Seller Party waived any default resulting from any action or inaction by the Mortgagor.
k. Source of Loan Payments. With respect to Business Purpose Mortgage Loans, no payments due and payable under the terms of the Mortgage Note and Mortgage, have been paid by any person (other than the Mortgagor and any guarantor) who was involved in, or benefited from, the sale or
purchase of the Mortgaged Property or the origination, refinancing, sale, purchase or servicing of the Mortgage Loan.
l. Location and Type of Mortgaged Property. The Mortgaged Property is located in an Acceptable State as identified in the Asset Schedule and consists of a single parcel of real property with a dwelling which is acceptable to the related Agency pursuant to the applicable Agency Guide. No residence or dwelling is a mobile home or a manufactured dwelling. No portion of the Mortgaged Property is used for commercial purposes; provided that Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes. The Mortgage Loan is not secured by an industrial, agricultural, mixed use, undeveloped property, or by a condominium unit that was part of a condominium development that operated as, or held itself out to be, a condominium hotel, regardless of whether the unit itself was being used as a condotel unit.
m. Validity of Lien. The Mortgage is a valid, subsisting, enforceable and perfected, and with respect to each Mortgage Loan other than a Second Lien Mortgage Loan, first priority lien and first priority security interest or, with respect to a Second Lien Mortgage Loan, a second lien or a second priority security interest, in each case, on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to:
(i) | the lien of current real property taxes, water charges, sewer runts, homeowners’ association dues and fees and other 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 lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal; |
(iii) | the exceptions (general and specific) and exclusions, if any, set forth in the title policy; |
(iv) | 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; and |
(v) | with respect to Second Lien Mortgage Loans, a first lien. |
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 (a) with respect to Mortgage Loans other than Second Lien Mortgage Loans, first lien and first priority security interest and (b) with respect to Second Lien Mortgage Loans, second lien and second priority interest, in each case, on the property described therein and the related Seller Party has full right to pledge and assign the same to Administrative Agent. 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, except in accordance with the Acquisition Guidelines.
n. Validity of Mortgage Loan Documents. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms, subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. The related Seller Party has reviewed all of the documents constituting the Asset File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein.
o. Full Disbursement of Proceeds. Other than with respect to Holdback Amounts in the related Holdback Account, HELOCs, HECM Loans and Private Label Reverse Mortgage Loans, and any escrow holdback amounts with respect to weather-related or seasonal improvement costs, fees or expenses, the proceeds of the Mortgage Loan have been fully disbursed and there is no further requirement for future advances thereunder, and, other than with respect to Business Purpose Mortgage Loans, any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage. All broker fees have been properly assessed to the Mortgagor and no claims will arise as to broker fees that are double charged and for which the Mortgagor would be entitled to reimbursement.
p. Ownership. The applicable Seller Party has full right to sell the Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority, subject to no interest or participation of, or agreement with, any other party, to sell such Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, Buyers will own such Mortgage Loan (and with respect to any Co-op Loan, the sole owner of the related Assignment of Proprietary Lease) 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. The applicable Seller Party intends to relinquish all rights to possess, control and monitor the Mortgage Loan. Other than with respect to an Agency Mortgage Loan, 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.
q. Doing Business. All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state, in each case, to the extent non-compliance would have a material adverse effect on such Mortgage Loan or on the Administrative Agent or Buyers’ rights thereunder.
r. Title Insurance. The Mortgage Loan is covered by either (i) an attorney’s opinion of title and abstract of title, the form and substance of which is 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 in accordance with the Asset Guidelines, with respect to each Agency Mortgage Loan, acceptable to Fannie Mae or Freddie Mac, as applicable, and with respect to FHA Loans, USDA Loans and VA Loans, the FHA, USDA or the VA, as the case may be, and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae or Freddie Mac, as applicable, and with respect to FHA Loans, USDA Loans and VA Loans, the FHA, USDA or the VA, as the case may be, and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring the applicable Seller Party, its successors and assigns, as to the first priority lien of the Mortgage other than Second Lien Mortgage Loans, and with respect to Second Lien Mortgage Loans as to the second priority lien of the related Mortgage, as applicable, in the original principal amount of the Mortgage Loan, with respect to a Mortgage Loan (or to the extent a Mortgage Note provides for negative amortization, the maximum amount of negative amortization in accordance with the Mortgage), subject only to the exceptions contained in clauses (i) - (v) of paragraph (m) of this Schedule 1-A, and in the case of an adjustable rate Mortgage Loan, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. The applicable Seller Party, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including the related Seller Party, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by such Seller Party.
s. No Defaults. Except with respect to an Early Buyout Loan, Non-Performing Mortgage Loan, other than a Monthly Payment no more than sixty (60) days delinquent, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and no Seller Party nor its predecessors have waived any default, breach, violation or event of acceleration; and no Seller Party nor any of its Affiliates nor any of their respective predecessors, have waived any default, breach, violation or event which would permit acceleration; and with respect to each Co-op Loan other than an Early Buyout Loan or Non-Performing Mortgage Loan, there is no default in complying with the terms of the Mortgage Note, the Assignment of Proprietary Lease and the Proprietary Lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been paid, and the related Seller Party has the right under the terms of the Mortgage Note, Assignment of Proprietary Lease and Recognition Agreement to pay any maintenance charges or assessments owed by the Mortgagor, except with respect to a Mortgage Loan that is an Early Buyout Loan.
t. No Mechanics’ Liens. Except as insured against by the related title insurance policy, to the applicable Seller Party’s best knowledge, there are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and, other than with respect to HECM Loans and Private Label Reverse Mortgage Loans, no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
u. Location of Improvements; Encroachments. Except as insured against by the related title insurance policy, 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, no improvements on adjoining properties encroach upon the Mortgaged Property, and no improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.
v. Origination; Payment Terms. With respect to any Agency Mortgage Loan, 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. Other than with respect to HELOCs, principal and/or interest payments on the Mortgage Loan commenced or will commence no more than sixty (60) days after funds were disbursed in connection with the Mortgage Loan. Other than with respect to a Business Purpose Mortgage Loan or as otherwise permitted by the applicable Agency Guide, no Mortgage Loan has a balloon payment feature. The Mortgagor contributed a percentage amount equal to or greater than the amount required pursuant to the applicable Agency Guide of the purchase price for the Mortgaged Property from their own funds. Interest on the Mortgage Loan is calculated on the basis of a 360-day year consisting of twelve (12) 30-day months. With respect to adjustable rate Mortgage Loans, the Mortgage Interest Rate is adjusted on each Interest Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or down to the nearest .125%), subject to the Mortgage Interest Rate Cap. Other than with respect to HELOCs, HECM Loans and Private Label Reverse Mortgage Loans, the Mortgage Note is payable on the first day of each month in equal monthly installments of principal and interest, which installments of interest with respect to adjustable rate Mortgage Loans, are subject to change on the Interest Rate Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty (30) years from commencement of amortization.
w. 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 foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to the Mortgagor that would interfere with such right of foreclosure. The Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or Freddie Mac, as applicable.
x. Occupancy of the Mortgaged Property. As of the Purchase Date the Mortgaged Property is, or, in the case of Mortgaged Property which is a second or vacation home or investment property, capable of being lawfully occupied under applicable law. Other than with respect to Business Purpose Mortgage Loans, all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. No Seller Party 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. No Seller Party has received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. Other than with respect to a Business Purpose Mortgage Loan, with respect to any Mortgage Loan originated with an “owner-occupied” Mortgaged
Property, 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.
y. No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (m) above.
z. Data. The information on the Asset Schedule correctly and accurately reflects the information contained in the applicable Seller Party’s records (including, without limitation, the Asset File, as applicable) in all material respects. The information contained under each of the headings in the Asset Schedule for such Mortgage Loan is true, complete and correct in all material respects.
aa. 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 Administrative Agent to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
bb. Transfer of Mortgage Loans. Except with respect to a Mortgage Loan registered with MERS or intended for purchase by GNMA, the related Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.
cc. Due-on-Sale. Except with respect to a Mortgage Loan intended for purchase by GNMA, and subject to the federal Garn-St. Germain Depository Institutions Act of 1982 and similar state laws restricting the enforceability of “due on sale” provisions, 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.
dd. No Graduated Payments or Contingent Interests. 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. No Mortgage Loan has a negative amortization feature.
ee. Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority with respect to Mortgage Loans other than Second Lien Mortgage Loans, or second lien priority with respect to Second Lien Mortgage Loans, in each case, by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence in accordance with the Asset Guidelines and, with respect to each Agency Mortgage Loan, acceptable to the related Agency. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.
ff. No Condemnation Proceeding/No Damage. Subsequent to the origination of the Mortgage Loan, to each Seller Party’s best knowledge, there have not been any condemnation proceedings with respect to the Mortgaged Property and no Seller Party has knowledge of any such proceedings. Except with respect to Non-Performing Mortgage Loans and Re-Performing Mortgage Loans, to the best of each Seller Party’s knowledge, the Mortgaged Property is undamaged by water, fire, earthquake, earth movement other than earthquake, windstorm, flood, tornado, or similar casualty (excluding casualty from the presence of hazardous wastes or hazardous substances) to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan as reflected in the value of the Mortgage Loan.
gg. Servicing and Collection Practices; Escrow Deposits; Holdback Amounts. The servicing and collection practices used by the applicable Seller Party with respect to each Mortgage Loan have been in accordance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper. With respect to (i) each Mortgage Loan for which there are escrow deposits and Holdback Amounts, all such payments are held in the related Holdback Account in trust for the related Seller Party and (ii) all such payments in respect of escrow deposits and Escrow Payments are in the possession of, or under the control of, the related Seller Party and, in each case, no deficiencies exist in connection therewith for which customary arrangements for repayment thereof have not been made. Holdback Amounts and Escrow Payments, have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and, where required by applicable law, has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits, Escrow Payments or Holdback Amounts or other charges or payments due the related Seller Party have been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.
hh. Conversion to Fixed Interest Rate. Except as allowed by Fannie Mae or Freddie Mac or otherwise as expressly approved in writing by Administrative Agent, with respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
ii. Other Insurance Policies. No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, private mortgage insurance policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by the related Seller Party or by any officer, director, or employee of such Seller Party or any designee of such Seller Party or any corporation in which such Seller Party or any officer, director, or employee had a financial interest at the time of placement of such insurance.
jj. Servicemembers Civil Relief Act. The Mortgagor has not notified the related Seller Party, and no Seller Party has knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.
kk. Property Valuation. Each Asset File for a Mortgage Loan contains a written BPO or appraisal that sets forth an “as is” value prepared by a third-party appraiser licensed or certified by the applicable governmental body in which the mortgaged property is located and in accordance with the requirements of Title XI of FIRREA. The appraisal for such Mortgage Loan satisfies, with respect to each Agency Mortgage Loan, the requirements of Fannie Mae, Freddie Mac, Ginnie Mae, FHA, or VA, as applicable, and applicable legal and regulatory requirements, and was made and signed prior to the final approval of the Mortgage Loan application. The person performing such property valuation (including an appraiser) received no benefit from, and such person’s compensation or flow of business from the originator from which the related Seller Party purchased the related Mortgage Loan was not affected by, the approval or disapproval of such Mortgage Loan. All improvements which were considered in determining the appraised value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. With respect to Second Lien Mortgage Loans, the related Asset File contains a review appraisal approved by Administrative Agent in its sole discretion was conducted and executed prior to the funding of the Mortgage Loan by a qualified third party appraiser who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan.
ll. Disclosure Materials. The Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and the related Seller Party maintains copies of such disclosure materials in the Asset File.
mm. Construction or Rehabilitation of Mortgaged Property. Other than with respect to a Business Purpose 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. No Business Purpose Mortgage Loan was made in connection with the ground up construction of a Mortgaged Property.
nn. No Defense to Insurance Coverage. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to any Seller Party on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance, if any, (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of any Seller Party, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.
oo. Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.
pp. No Equity Participation. No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and no Seller Party has financed nor does it own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
qq. 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 the related Seller Party or any Affiliate or correspondent of such Seller Party, except in connection with a refinanced Mortgage Loan.
rr. Origination Date. Other than with respect to Early Buyout Loans, Non-Performing Mortgage Loans, Re-Performing Mortgage Loans, Scratch and Dent Mortgage Loans and Seasoned Performing Loans, the Purchase Date is no more than one-hundred and eighty (180) days following the origination date.
ss. Reserved.
tt. 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.
uu. Documents Genuine. The Mortgage Loan and all Mortgage Loan Documents are complete and authentic and all signatures thereon are genuine and such Mortgage Loan is (i) a “closed” loan and (ii)
other than with respect to a BPL – Holdback, HECM Loan, Private Label Reverse Mortgage Loan or HELOC, fully funded by the related Seller Party and held in such Seller Party’s name.
vv. Reserved.
ww. Description. The Mortgage Loan conforms to the description thereof as set forth on the related Asset Schedule delivered to the Custodian and Administrative Agent.
xx. Located in U.S. No collateral (including, without limitation, the related real 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 or the District of Columbia.
yy. Acquisition Guidelines. The Mortgage Loan has been acquired in accordance with the Acquisition Guidelines (including all supplements or amendments thereto) previously provided to Administrative Agent, other than with respect to any Agency Mortgage Loan, which has been acquired in accordance with the applicable Agency Guide.
zz. Primary Mortgage Guaranty Insurance. If so indicated on the related Asset Schedule, each Mortgage Loan is insured as to payment defaults by a policy of primary mortgage guaranty insurance in the amount required where applicable, and by an insurer approved, by the applicable take-out investor, if applicable, and all provisions of such primary mortgage guaranty insurance have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. Each Mortgage Loan which is represented to Administrative Agent to have, or to be eligible for, FHA insurance is insured, or eligible to be insured, pursuant to the National Housing Act. Each Mortgage Loan which is represented by the related Seller Party to be guaranteed, or to be eligible for guaranty, by the VA is guaranteed, or eligible to be guaranteed, under the provisions of Chapter 37 of Title 38 of the United States Code. As to each FHA insurance certificate or each VA guaranty certificate, the related Seller Party has complied with applicable provisions of the insurance for guaranty contract and federal statutes and regulations, all premiums or other charges due in connection with such insurance or guarantee have been paid, there has been no act or omission which would or may invalidate any such insurance or guaranty, and the insurance or guaranty is, or when issued, will be, in full force and effect with respect to each Mortgage Loan. There are no defenses, counterclaims, or rights of setoff affecting the Mortgage Loans or affecting the validity or enforceability of any private mortgage insurance or FHA insurance applicable to the Mortgage Loans or any VA guaranty with respect to the Mortgage Loans.
aaa. Reserved.
bbb. Predatory Lending Regulations; High Cost Loans. No Mortgage Loan (a) is subject to Section 226.32 of Regulation Z or any similar state law (relating to high interest rate credit/lending transactions), (b) is a High Cost Mortgage Loan or (c) contains any term or condition, or involves any loan origination practice, that has been defined as “predatory” under any applicable federal, state, county or municipal law, or that has been expressly categorized as an “unfair” or “deceptive” term, condition or practice in any such applicable federal, state, county or municipal law. No predatory or deceptive lending practices, including, without limitation, the extension of credit without regard to the ability of the Mortgagor to repay and the extension of credit which has no apparent benefit to the Mortgagor, were employed in the origination of the Mortgage Loan.
ccc. Credit Score and Reporting. Other than with respect to Early Buyout Loans, as of the date of the Mortgage Note, the Mortgagor’s credit score as listed on the Asset Schedule is no more than ninety (90) days old, or as otherwise permitted by the applicable Agency. In connection with the servicing of the Mortgage Loan (other than Early Buyout Loans), full, complete and accurate information with respect to
the Mortgagor’s credit file has been or will be furnished to Equifax, Experian and Trans Union Credit Information in accordance with the Fair Credit Reporting Act and its implementing regulations.
ddd. FHA Mortgage Insurance; VA Loan Guaranty; USDA Loan Guaranty. With respect to the FHA Loans, the FHA Mortgage Insurance Contract is or eligible to be in full force and effect and there exists no impairment to full recovery without indemnity to the Department of Housing and Urban Development or the FHA under FHA Mortgage Insurance. With respect to the VA Loans, the VA Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein. With respect to the USDA Loans, the USDA Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein. 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, USDA and the VA, respectively, to the full extent thereof, without surcharge, set-off or defense. Each FHA Loan, USDA Loan and VA Loan was originated in accordance with the criteria of an Agency for purchase of such Mortgage Loans.
eee. Asset Schedule. The information set forth in the related Asset Schedule and all other information or data furnished by, or on behalf of, the applicable Seller Party to Administrative Agent is complete, true and correct in all material respects.
fff. Qualified Mortgage. Notwithstanding anything to the contrary set forth in this Agreement, on and after January 10, 2014 (or such later date as set forth in the relevant regulations), (i) the originator made a reasonable and good faith determination that the Mortgagor had a reasonable ability to repay the loan according to its terms, in accordance with 12 CFR 1026.43(c) and (ii) except with respect to Non-Agency Non-QM Mortgage Loans, Scratch and Dent Mortgage Loans or unless otherwise approved in writing by Administrative Agent in its sole discretion, each Mortgage Loan is a Qualified Mortgage Loan.
ggg. TRID Compliance. Other than with respect to a Business Purpose Mortgage Loan or Second Lien Mortgage Loan, with respect to each Mortgage Loan where the Mortgagor’s loan application for the Mortgage Loan was taken on or after October 3, 2015, such Mortgage Loan was originated in compliance with the TILA-RESPA Integrated Disclosure Rule.
hhh. Co-op Loan: Valid First Lien. With respect to each Co-op Loan that is an Early Buyout Loan where the related Mortgaged Property has been sold to a third party and the FHA Mortgage Insurance claim proceeds have not yet been received, the related Mortgage is a valid, enforceable and subsisting first security interest on the related Co-op Shares securing the related Proprietary Lease, subject only to (a) liens of the Co-op Corporation for unpaid assessments representing the Mortgagor’s pro rata share of the Co-op Corporation’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the security interest. With respect to each Co-op Loan that is not an Early Buyout Loan, the related Mortgage is a valid, enforceable and subsisting first security interest on the related Co-op Shares securing the related Proprietary Lease, subject only to (a) liens of the Co-op Corporation for unpaid assessments representing the Mortgagor’s pro rata share of the Co-op Corporation’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the security interest. There are no liens against or security interests in the Co-op Shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority equal to or over the related Seller Party’s security interest in such Co-op Shares.
iii. Co-op Loan: Compliance with Law. With respect to each Co-op Loan, the related Co-op Corporation that owns title to the related Co-op Project is a “cooperative housing corporation” within the meaning of Section 216 of the Internal Revenue Code, and is in material compliance with applicable federal, state and local laws which, if not complied with, could have a material adverse effect on the Mortgaged Property.
jjj. Co-op Loan: No Pledge. With respect to each Co-op Loan, there is no prohibition against pledging the Co-op Shares or assigning the Proprietary Lease. With respect to each Co-op Loan, (i) the term of the related Proprietary Lease is longer than the term of the Co-op Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Co-op Shares owned by such Mortgagor first to the Co-op Corporation, (iii) there is no prohibition in any Proprietary Lease against pledging the Co-op Shares or assigning the Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement published by Aztech Document Systems, Inc. as of the date hereof or includes provisions which are no less favorable to the lender than those contained in such agreement.
kkk. Co-op Loan: Acceleration of Payment. With respect to each Co-op Loan, each Assignment of Proprietary Lease contains enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization of the material benefits of the security provided thereby. The Assignment of Proprietary Lease contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Note in the event the Co-op Unit is transferred or sold without the consent of the holder thereof.
lll. Compliance with Anti-Money Laundering Laws. To the knowledge of a Responsible Officer of the Seller, each originator from which any Seller Party has purchased any Mortgage Loan has complied with all applicable anti-money laundering laws and regulations, including without limitation the PATRIOT Act with respect to the origination of each Mortgage Loan and has established an anti-money laundering compliance program if required by applicable anti-money laundering laws and regulations and has conducted the requisite due diligence in connection with the origination of each Mortgage Loan for purposes of all applicable anti-money laundering laws, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by the Mortgagor to purchase the property in question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of all applicable anti-money laundering laws. To the knowledge of a Responsible Officer of the Seller, no Mortgage Loan is in violation of Executive Order 13224 or the regulations promulgated by the Office of Foreign Assets Control of the United States Department of the Treasury (the “OFAC Regulations”), and no Mortgagor or guarantor on the Mortgage Loan is listed as a “specially designated national” or “blocked person” for purposes of the OFAC Regulations.
mmm. Access; Utilities; Separate Tax Lots. With respect to each Business Purpose Mortgage Loan, each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and electricity all of which are appropriate for the current use of such Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of such Mortgaged Property or is subject to an endorsement under the related title policy insuring such Mortgaged Property.
nnn. Local Law Compliance. With respect to each Business Purpose Mortgage Loan, the terms of the related loan documents require the related Mortgagor to cause the Mortgaged Property to comply in all material respects with all applicable governmental regulations, zoning and building laws.
ooo. Licenses and Permits. With respect to each Business Purpose Mortgage Loan, each Mortgagor covenants in the loan documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of each related Mortgaged Property in full force and effect, and all such licenses, permits and applicable governmental authorizations are in effect. No Seller Party is aware of any Mortgagor, guarantor or other obligor on any Business Purpose Mortgage Loan having received notice of any noncompliance with any use or occupancy law, ordinance, regulation, standard, license or certificate with respect to any Mortgaged Property.
ppp. Mortgage Provisions. With respect to each Business Purpose Mortgage Loan, the Mortgage Note or the Mortgage contain provisions regarding the rights and remedies of the holder thereof for the realization against the related Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure, subject to receivership, bankruptcy, insolvency, moratorium and other laws and principles of equity affecting the rights of creditors, whether considered in a proceeding at law or in equity.
qqq. Litigation. To the knowledge of a Responsible Officer of the Seller, there is no litigation, proceeding or governmental investigation pending, or any order, injunction or decree outstanding, existing or relating to the Mortgage Loan or the related Mortgaged Property.
rrr. Complete Asset Files. For each Mortgage Loan, all of the required Mortgage Loan documents have been delivered to the Custodian in accordance with the Custodial Agreement and all Mortgage Loan documents necessary to foreclose on the Mortgaged Property are included in the Asset File delivered to the Custodian. No material documentation is missing from the Asset File in possession of Custodian, unless such documentation is subject to a Servicer request for release of documents and a foreclosure attorney acknowledgment in form and substance acceptable to Administrative Agent. Each of the documents and instruments specified to be included in the Asset File is executed and in due and proper form, and each such document or instrument is in form acceptable to the applicable federal or state regulatory agency.
sss. Holdback Amounts: With respect to any Mortgage Loan for which there are Holdback Amounts, such Holdback Amounts have been deposited in the Holdback Account.
ttt. No Ground Leases. No Mortgaged Property is subject to a ground lease, it being understood that the term ground lease does not refer to the leasehold interests that have been approved by the Administrative Agent in accordance with the terms of the Program Agreements.
uuu. Advance-Paid Periodic Payments. Except with respect to any interest reserve amounts, no Mortgage Loan contains a provision requiring more than two (2) monthly or other scheduled periodic payments by the Mortgagor on the Mortgage Loan to be paid in advance from the proceeds of the Mortgage Loan.
vvv. General Liability Insurance. With respect to each Business Purpose Mortgage Loan, the related Mortgaged Property is required pursuant to the related Mortgage to be (or the holder of the Mortgage can require that the Mortgaged Property be), and at origination the related Seller Party received evidence that such Mortgaged Property was, insured by a hazard and rental loss insurance policy (as applicable) in amounts as required for similar properties in accordance with the Acquisition Guidelines.
www. Cross-Collateralization. Except as approved by Administrative Agent, no Mortgage Loan is cross-collateralized or provides for cross-default against any other Mortgage Loan unless such Mortgage Loan is cross-collateralized and cross-defaulted with another Mortgage Loan sold by the applicable Seller
Party to the Administrative Agent with the same Mortgagor or an Affiliate thereof controlled by the person or persons controlling the Mortgagor or controlled by any guarantor of such Mortgagor.
xxx. Assignment of Leases and Rents. With respect to each Business Purpose Mortgage Loan, any assignment of leases, rents and profits or similar document or instrument executed by the related Mortgagor in connection with the origination of the related Mortgage Loan, as such document may be amended, modified, renewed or extended from time to time (the “Assignment of Leases and Rents”) was duly executed, acknowledged and delivered and establishes and creates a valid and enforceable first priority collateral assignment of, or lien on, the related Mortgagor’s interest in all leases, sub-leases, licenses or other agreements pursuant to which any person is entitled to occupy, use or possess all or any portion of the real property subject to the related Mortgage, subject to legal limitations of general applicability to mortgage loans similar to the Mortgage Loan, and the Mortgagor and each assignor of such Assignment of Leases and Rents to the related Seller Party have the full right to assign the same. Each Business Purpose Mortgage Loan contains an Assignment of Leases and Rents, and such Assignment of Leases and Rents is included either in the related Mortgage or in a related separate assignment document. The related assignment of any Assignment of Leases and Rents not included in the related Mortgage has been executed and delivered to the Administrative Agent in blank, is otherwise in recordable form and constitutes a legal, valid and binding assignment, sufficient to convey to the assignee named therein (assuming that the assignee has the capacity to acquire such Assignment of Leases and Rents) all of the assignor’s right, title and interest in, to and under such Assignment of Leases and Rents.
yyy. Non-conforming Uses. With respect to each Business Purpose Mortgage Loan, if the Mortgaged Property constitutes a legal nonconforming use, the nonconforming improvements may be rebuilt to current density and used and occupied for such nonconforming purposes if damaged or destroyed or ordinance and law endorsement to hazard policy unless otherwise disclosed to Administrative Agent in writing.
zzz. No Releases. With respect to each Business Purpose Mortgage Loan, no Mortgage Note or Mortgage requires the mortgagee to release all or any material portion of the related Mortgaged Property that was included in the valuation for such Mortgaged Property, and/or generates income, from the lien of the related Mortgage except upon payment in full of all amounts due under the related Business Purpose Mortgage Loan.
aaaa. No Prior Modifications. With respect to a Non-Performing Mortgage Loan or Re-Performing Mortgage Loan, if such Mortgage Loan has been modified after acquisition by the related Seller Party, the current and applicable modified terms are reflected on the Asset Schedule and the signed modification documents are in the related loan file and are approved by the Administrative Agent.
bbbb. Leases. Other than with respect to an Agency Mortgage Loan, if a Mortgage Loan is secured by a long-term residential lease, to the best of each Seller Party’s knowledge: (A) the terms of such lease expressly permit the mortgaging of the leasehold estate, the assignment of the lease without the lessor’s consent (or the lessor’s consent has been obtained and such consent is in the Asset File), and the acquisition by the holder of the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of foreclosure or provide the holder of the Mortgage with substantially similar protection; (B) the terms of such lease do not allow the termination thereof upon the lessee’s default without the holder of the Mortgage being entitled to receive written notice of, and opportunity to cure, such default or prohibit the holder of the Mortgage from being insured under the hazard insurance policy related to the Mortgaged Property; (C) the original term of such lease is not less than fifteen (15) years; (D) the term of such lease does not terminate earlier than five years after the maturity date of the Mortgage Note; and (E) the Mortgaged Property is located in a jurisdiction in which the use of leasehold estates for residential properties is an accepted
practice. With respect to an Agency Mortgage Loan, such lease complies with the applicable Agency Guidelines.
cccc. HELOC Terms. With respect to HELOCs, the related Mortgagor may request advances up to the Credit Limit within the first (1st) ten (10) years following the date of origination.
dddd. Revolving Term. Each HELOC provides for an initial period (the “Revolving Period”) during which the Mortgagor is required to make monthly payments of interest payable in arrears and requires repayment of the unpaid principal balance thereof over a period following the Revolving Period (the “Repayment Period”) which is not in excess of one hundred twenty (120) months. As of the Purchase Date no HELOC was in its Repayment Period. The Mortgage Interest Rate on each Mortgage Loan adjusts periodically in accordance with the Credit Line Agreement. On each Interest Rate Adjustment Date the related Seller Party has made interest rate adjustments on the Mortgage Loan which are in compliance with the related Mortgage, Mortgage Note and Credit Line Agreement and applicable law.
eeee. Draws In Compliance With Laws. Each Draw under the HELOC has been disbursed in accordance with all applicable laws, rules and regulations, including, without limitation, all state and local licensing requirements.
ffff. Enforcement of Remedies. Each Credit Line Agreement permits the holder to enforce its full remedies, with respect to, among other things, material events of default by the Mortgagor, declines in the value of the related Mortgaged Property and material changes in the Mortgagor’s financial circumstances.
gggg. FICO Scores. With respect to each Non-Agency Non-QM Mortgage Loan (other than a Non-QM – Low FICO Mortgage Loan), the Mortgagor’s FICO score at the time of origination was [***] or greater. With respect to each Non-QM – Low FICO Mortgage Loan, the Mortgagor’s FICO score at the time of origination was at least [***] but not greater than [***].
hhhh. Credit Limits. With respect to each HELOC, if the related Seller Party has increased a Mortgagor’s Credit Limit, (i) such Seller Party has notified the Administrative Agent in writing of such Seller Party’s decision to increase a Mortgagor’s Credit Limit in accordance with Mortgage Loan Documents, (ii) such increase has been effected by such Seller Party through modification of the Mortgage Loan with the Mortgagor; (iii) the related Seller Party has delivered to the Administrative Agent an updated Asset Schedule reflecting the modification to the Mortgage Loan and (iv) the related Seller Party has delivered to the Custodian any modified Mortgage Loan documents. Notwithstanding anything to the contrary herein, in no event shall Administrative Agent or Buyers have any obligation to fund any Draws with respect to any HELOC, which obligations shall be retained by the Seller Parties.
SCHEDULE 1-B
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO CONTRIBUTED REO PROPERTY
Each Seller Party makes the following representations and warranties to Administrative Agent with respect to each Contributed REO Property that is at all times subject to a Transaction hereunder and at all times while the Program Agreements and any Transaction hereunder is in full force and effect. With respect to those representations and warranties which are made to the best of such Seller Party’s knowledge, if it is discovered by such Seller Party or Administrative Agent that the substance of such representation and warranty is inaccurate, notwithstanding such Seller Party’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 Asset Value.
(a) Asset File. (i) The related deed in the name of the Underlying Entity shall have been submitted for recording, (ii) a copy of the recorded deed if returned by the recording office shall be delivered to the applicable Custodian within fifteen (15) Business Days of such REO Property being acquired by the Underlying Entity, and (iii) all other documents required to be delivered as part of the Asset File shall be delivered to the applicable Custodian within fifteen (15) Business Days of such REO Property being acquired by the Underlying Entity or held by an attorney in connection with a foreclosure pursuant to an Attorney Bailee Letter.
(b) Ownership. The Underlying Entity is the sole owner and holder of the REO Property and the Servicing Rights related thereto. The Underlying Entity has not assigned or pledged the REO Property and the related Servicing Rights except as contemplated in this Agreement, and, except as otherwise disclosed to Administrative Agent in writing, the REO Property is free and clear of any lien or encumbrance other than (A) liens for real estate taxes not yet due and payable, (B) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of the related security instrument, such exceptions appearing of record being acceptable to mortgage lending institutions generally, and (C) other matters to which like properties are commonly subject which do not, individually or in the aggregate, materially interfere with the use, enjoyment or marketability of the REO Property.
(c) Title. Each deed is genuine, constitutes the legal, valid and binding conveyance of the REO Property in fee simple to the Underlying Entity or its designee.
(d) REO Property as Described. The information set forth in the related Asset Schedule and all other information or data furnished by, or on behalf of, the Seller Parties to Administrative Agent is true and correct in all material respects as of the date or dates on which such information is furnished.
(e) Taxes and Assessments. There are no property taxes, governmental charges, levies or governmental assessments with respect to any REO Property that are delinquent by more than thirty (30) days; provided, however, that a disclosure of outstanding charges provided to Administrative Agent may include the total amount without specifying the related categories of outstanding charges.
(f) No Litigation. Other than any customary claim or counterclaim arising out of any eviction, foreclosure or collection proceeding relating to any REO Property or as otherwise disclosed in writing to Administrative Agent, there is no litigation, proceeding or governmental investigation pending, or any order, injunction or decree outstanding, existing or relating to each Seller Party or any of their
Subsidiaries with respect to the REO Property that would materially and adversely affect the value of the REO Property.
(g) Hazard Insurance. All buildings or other customarily insured improvements upon the Contributed REO Property are insured by an insurer against loss by fire, hazards of extended coverage and such other hazards in an amount not less than the lesser of the maximum insurable value and the BPO value.
(h) No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the REO Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(i) No Damage. The REO Property is undamaged by water, fire, earthquake, earth movement other than earthquake, windstorm, flood, tornado, defective construction materials or work, or similar casualty which would cause such REO Property to become uninhabitable.
(j) No Condemnation. There is no proceeding pending, or to Seller Party’s knowledge, threatened, for the total or partial condemnation of the REO Property.
(k) Environmental Laws. The REO Property is currently in material compliance with all applicable environmental laws pertaining to environmental hazards including, without limitation, asbestos.
(l) Location and Type of REO Property. Each REO Property is located in the U.S. or a territory of the U.S. and consists of a one- to four-unit residential property, which may include, but is not limited to, a single-family dwelling, townhouse, condominium unit, or unit in a planned unit development.
(m) No Fraudulent Acts. No fraudulent acts were committed by any Seller Party in connection with the acquisition of such REO Property.
(n) Acquisition of REO Property. With respect to each such REO Property, (i) such REO Property is a Mortgaged Property acquired by Underlying Entity through foreclosure or by deed in lieu of foreclosure or otherwise, and (ii) with respect to each such REO Property, upon the consummation of the related Transaction, the applicable Custodian shall have received the related Asset File and such Asset File shall not have been released from the possession of the applicable Custodian for longer than the time periods permitted under the related Custodial Agreement.
(o) No Occupants. Except as otherwise disclosed in writing to Administrative Agent, no tenant or other party has any right to occupy or is currently occupying any REO Property.
(p) Title Policy. From and after the date that is one (1) Business Day following the conversion of a Mortgage Loan to a REO Property, the REO Property is insured by either an ALTA title insurance policy or other generally acceptable form of policy of title insurance acceptable to prudent mortgage lending institutions in the area where the related REO Property is located, issued by a title insurer acceptable to prudent mortgage lenders. With respect to each REO Property, Underlying Entity is the sole insured of such policy, and such policy is in full force and effect and will be in full force and effect and inure to the benefit of each Seller Party and its successors. No claims have been made under such policy and no prior holder of the REO Property, including Underlying Entity, has done by act or omission, anything that would impair the coverage of such policy.
(q) No Environmental Issue. All uses and operations on or of the REO Properties are not in violation of any environmental laws and in compliance with permits issued pursuant thereto and the REO Property is free and clear of all Liens and other encumbrances that may be imposed as a result of any violation of an environmental law, whether due to any act or omission of Underlying Entity or any other person or entity.
SCHEDULE 1-C
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PURCHASED CERTIFICATES
Each Seller Party makes the following representations and warranties to Administrative Agent with respect to each Purchased Certificate that is at all times subject to a Transaction hereunder and at all times while the Program Agreements and any Transaction hereunder is in full force and effect. With respect to those representations and warranties which are made to the best of such Seller Party’s knowledge, if it is discovered by such Seller Party or Administrative Agent that the substance of such representation and warranty is inaccurate, notwithstanding such Seller Party’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 Asset Value.
(a) Ownership. Each Underlying Entity Certificate constitutes all the issued and outstanding beneficial interests of all classes of the applicable Underlying Entity, as applicable, and such interests are certificated.
(b) Compliance with Law. Each Underlying Entity Certificate complies in all respects with, or are exempt from, all applicable requirements of federal, state or local law relating to such Underlying Entity Certificate.
(c) Good Title. Immediately prior to the sale, transfer and assignment to Administrative Agent thereof, the related Seller has good title to, and is the sole owner and holder of, such Underlying Entity Certificate, and such Seller is transferring such Underlying Entity Certificate free and clear of any and all liens, pledges, encumbrances, charges, security interests or any other ownership interests of any nature encumbering such Underlying Entity Certificate.
(d) No Fraud. No fraudulent acts were committed by the Sellers or any of their respective Affiliates in connection with the issuance of the Underlying Entity Certificate.
(e) No Defaults. No (i) monetary default, breach or violation exists with respect to any agreement or other document governing or pertaining to such Underlying Entity Certificate, or (ii) event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation of such Underlying Entity Certificate.
(f) No Modifications. Except as expressly contemplated herein, no Seller Party is a party to any document, instrument or agreement, and there is no document, that by its terms modifies or affects the rights and obligations of any holder of such Underlying Entity Certificate and no Seller Party has consented to any material change or waiver to any term or provision of any such document, instrument or agreement and no such change or waiver exists.
(g) Power and Authority. The applicable Seller Party has full right, power and authority to sell and assign the applicable Underlying Entity Certificate and such Underlying Entity Certificate has not been cancelled, satisfied or rescinded in whole or part nor has any instrument been executed that would effect a cancellation, satisfaction or rescission thereof.
(h) Consents and Approvals. Other than consents and approvals obtained as of the related Purchase Date or those already granted in the documents governing such Underlying Entity Certificate, no consent or approval by any Person is required in connection with the related Seller’s sale and/or
Administrative Agent’s acquisition of such Underlying Entity Certificate, for Administrative Agent’s exercise of any rights or remedies in respect of the applicable Underlying Entity Certificate or for Administrative Agent’s sale, pledge or other disposition of such Underlying Entity Certificate. No third party holds any “right of first refusal”, “right of first negotiation”, “right of first offer”, purchase option, or other similar rights of any kind, and no other impediment exists to any such transfer or exercise of rights or remedies with respect to such Underlying Entity Certificate.
(i) No Governmental Approvals. No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over Sellers is required for any transfer or assignment by the holder of such Underlying Entity Certificate to the Administrative Agent.
(j) Original Certificate. The applicable Seller has delivered to Administrative Agent the original Underlying Entity Certificate or other similar indicia of ownership of the Purchased Certificate, however denominated, re-registered in Administrative Agent’s name as required hereunder or as otherwise agreed to by Administrative Agent.
(k) Duly and Validly Issued. Each Underlying Entity Certificate has been duly and validly issued in the name of Administrative Agent.
(l) No Notices. No Seller Party has received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of such Underlying Entity Certificate is or may become obligated.
(m) REO Certificate as a Security. Each Underlying Entity Certificate (a) constitutes “securities” as defined in Section 8-102 of the Uniform Commercial Code (b) is not dealt in or traded on securities exchanges or in securities markets, (c) does not constitute an investment company security (within the meaning of Section 8-103(c) of the Uniform Commercial Code) and (d) is not held in a securities account (within the meaning of Section 8-103(c) of the Uniform Commercial Code).
(n) No Distributions. There are (x) no outstanding rights, options, warrants or agreements for a purchase, sale or issuance, in connection with any Underlying Entity Certificate (except as expressly contemplated or permitted by this Agreement), (y) no agreements on the part of the related Seller to issue, sell or distribute such Underlying Entity Certificate (except as expressly contemplated or permitted by this Agreement), and (z) no obligations on the part of such Seller (contingent or otherwise) to purchase, repurchase, redeem or otherwise acquire any securities or any interest therein (other than from Administrative Agent or as expressly contemplated by this Agreement) or to pay any dividend or make any distribution in respect of such Underlying Entity Certificate (other than to Administrative Agent or as expressly contemplated by this Agreement until the repurchase of such Underlying Entity Certificate).
(o) Conveyance; First Priority Lien. Upon delivery to the Administrative Agent of the applicable Underlying Entity Certificate (and assuming the continuing possession by the Administrative Agent of the Purchased Asset in accordance with the requirements of applicable law) and the filing of a financing statement covering such Underlying Entity Certificate in the appropriate jurisdictions and naming the related Seller as debtor and the Administrative Agent as secured party, such Seller has conveyed and transferred to Administrative Agent all of its right, title and interest to such Underlying Entity Certificate, including taking all steps as may be necessary in connection with the endorsement, transfer of power, delivery and pledge of such Underlying Entity Certificate as a “security” (as defined in Section 8-102 of the Uniform Commercial Code) to Administrative Agent. Upon delivery of such Underlying Entity Certificate to Administrative Agent the Lien granted hereunder is a first priority Lien on such Underlying Entity Certificate.
(p) No Waiver. No Seller has waived or agreed to any waiver under, or agreed to any amendment or other modification of the related Underlying Entity Agreement, as applicable, except as expressly contemplated herein or otherwise agreed to by Administrative Agent in writing.
(q) Status of Underlying Entity. Since the date of its organization until the date of this Agreement, no Underlying Entity, has been engaged in any business or activity and has not owned any assets other than the assets made subject to Transactions hereunder.
SCHEDULE 2
AUTHORIZED REPRESENTATIVES OF SELLER
Name | Title | Authorized Signature | ||
William A. Newman | President and Chief Executive Officer | [***] | ||
Maria Fregosi | Chief Financial Officer | [***] | ||
Brian Ludtke | Chief Administrative Officer and Corporate Secretary | [***] | ||
Phillip Miller |
Chief Operating Officer |
[***] | ||
William Fischer | Controller/ Chief Accounting Officer | [***] | ||
Joseph Ruhlin | Treasurer | [***] |
Authorized Representatives to Master Repurchase Agreement
ADMINISTRATIVE AGENT AND BUYER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below, including any other authorized officers, are authorized, acting singly, to act for Administrative Agent and/or Buyers under this Agreement:
Name | Title | Signature | ||
Margaret Dellafera | Vice President | [***] | ||
Elie Chau | Vice President | [***] | ||
Robert Durden | Vice President | [***] | ||
Pete Sack | Vice President | [***] | ||
Kwaw De Graft-Johnson | Vice President | [***] | ||
Dominic Obaditch | Vice President | [***] | ||
Sean Walker | Vice President | [***] | ||
Ernest Calabrese | Vice President | [***] | ||
Jonathan Braus | Vice President | [***] | ||
Charles Trombley | Vice President | [***] |
Authorized Representatives to Master Repurchase Agreement
EXHIBIT A
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that [Home Point Financial Corporation] [Underlying Entity] [(“Seller”)] [(“Underlying Entity”)] hereby irrevocably constitutes and appoints Credit Suisse First Boston Mortgage Capital LLC (“Administrative Agent”) 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] [Underlying Entity] and in the name of [Seller] [Underlying Entity] or in its own name, from time to time in Administrative Agent’s discretion:
(a) in the name of [Seller] [Underlying Entity], or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased or contributed by Administrative Agent on behalf of certain Buyers and/or Repledgees under the Master Repurchase Agreement (as amended, restated, supplemented or otherwise modified from time to time) dated October 23, 2020 (the “Assets”) and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Administrative Agent for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;
(b) to pay or discharge taxes and liens levied or placed on or threatened against the Assets;
(c) (i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Administrative Agent or as Administrative Agent shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against [Seller] [Underlying Entity] with respect to any Assets; (vi) to settle, compromise or adjust any suit, action or proceeding described in clause (v) above and, in connection therewith, to give such discharges or releases as Administrative Agent may deem appropriate; (vii) to cause the mortgagee of record to be changed to Administrative Agent on the FHA, VA or USDA system, as applicable and (viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Administrative Agent were the absolute owner thereof for all purposes, and to do, at Administrative Agent’s option and [Seller] [Underlying Entity]’s expense, at any time, and from time to time, all acts and things which Administrative Agent deems necessary to protect, preserve or realize upon the Assets and Administrative Agent’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as [Seller] [Underlying Entity] might do;
(d) for the purpose of carrying out the transfer of servicing with respect to the Assets from [Seller] [Underlying Entity] to a successor servicer appointed by Administrative Agent in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, [Seller] [Underlying Entity] hereby gives Administrative Agent the power and right, on behalf of [Seller] [Underlying Entity], without assent by [Seller] [Underlying Entity], to, in the name of [Seller] [Underlying Entity] or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Administrative Agent in its sole discretion; and
(e) for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.
[Seller] [Underlying Entity] 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] [Underlying Entity] also authorizes Administrative Agent, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.
The powers conferred on Administrative Agent hereunder are solely to protect Administrative Agent’s interests in the Assets and shall not impose any duty upon it to exercise any such powers. Administrative Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to [Seller] [Underlying Entity] for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, [SELLER] [UNDERLYING ENTITY] HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND ADMINISTRATIVE AGENT ON ITS OWN BEHALF AND ON BEHALF OF ADMINISTRATIVE AGENT’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES FOLLOW.]
IN WITNESS WHEREOF [Seller] [Underlying Entity] has caused this Power of Attorney to be executed and [Seller] [Underlying Entity]’s seal to be affixed this ______ day of ____________, 202___.
[HOME POINT FINANCIAL CORPORATION] | ||
[Underlying Entity], as [Seller] [Underlying Entity] | ||
By: | ||
Name: | ||
Title: |
Signature Page to Power of Attorney
STATE OF | ) | |
) | ss.: | |
COUNTY OF | ) |
On the day of , 20 before me, a Notary Public in and for said State, personally appeared ________________________________, known to me to be _____________________________________ of [Home Point Financial Corporation] [Underlying Entity], the institution that executed the within instrument and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.
_____________________________
Notary Public
My Commission expires ________________________________
Signature Page to Power of Attorney
EXHIBIT B
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”):
Credit Suisse First Boston Mortgage Capital LLC (the “Administrative Agent”), has agreed to provide funds (“Escrow Funds”) to [Seller] to finance certain mortgage loans (the “Mortgage Loans”) for which you are acting as Escrow Agent.
You hereby agree that (a) you shall receive such Escrow Funds from Administrative Agent to be disbursed 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 Administrative Agent until such Escrow Funds are fully disbursed on behalf of Administrative Agent 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 the 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 Administrative 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 Administrative Agent’s incoming wire transfer.
You further agree that, upon disbursement of the Escrow Funds, you will hold all Mortgage Loan Documents specified in the Escrow Instruction Letter in escrow as agent and bailee for Administrative Agent, and will forward the Mortgage Loan Documents and original Escrow Instruction Letter in connection with such Mortgage Loans by overnight courier to the Custodian within five (5) Business Days following the date of origination.
You agree that all fees, charges and expenses regarding your services to be performed pursuant to the Escrow Instruction Letter are to be paid by Seller or its borrowers, and Administrative Agent shall have no liability with respect thereto.
You represent, warrant and covenant that you are not an affiliate of or otherwise controlled by Seller, and that you are acting as an independent contractor and not as an agent of Seller.
The provisions of this Escrow Instruction Letter may not be modified, amended or altered, except by written instrument, executed by the parties hereto and Administrative Agent. You understand that Administrative Agent shall act in reliance upon the provisions set forth in this Escrow Instruction Letter, and that Administrative Agent on behalf of Buyers and certain Repledgees is an intended third party beneficiary hereof.
Whether or not an Escrow Instruction Letter executed by you is received by the Custodian, your acceptance of the Escrow Funds shall be deemed to constitute your acceptance of the Escrow Instruction Letter.
EXHIBIT C
OFFICER’S COMPLIANCE CERTIFICATE
I, ___________________, do hereby certify that I am the [duly elected, qualified and authorized] [CFO/TREASURER/FINANCIAL OFFICER] of Home Point Financial Corporation (“Seller”). This Certificate is delivered to you in connection with Section 17 of the Master Repurchase Agreement dated as of October 23, 2020, among Seller, any Underlying Entity joined thereto from time to time, Credit Suisse AG, a company incorporated in Switzerland, acting through its Cayman Islands Branch, Alpine Securitization LTD and Credit Suisse First Boston Mortgage Capital LLC (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), as the same may have been amended from time to time. I hereby certify that, as of the date of the financial statements attached hereto and as of the date hereof, Seller and Guarantor are and have been in compliance with all the terms of this Agreement and, without limiting the generality of the foregoing, I certify that:
Adjusted Tangible Net Worth. As of the end of each calendar month, Seller has maintained an Adjusted Tangible Net Worth of at least [***]. A calculation of Seller’s actual Adjusted Tangible Net Worth is provided in Schedule 1 hereto.
Maintenance of Liquidity. At all times, Seller has maintained Liquidity in an amount not less than [***]. A calculation of Seller’s actual Liquidity is provided in Schedule 1 hereto.
Indebtedness to Adjusted Tangible Net Worth Ratio. As of the end of each calendar month, Seller’s ratio of Indebtedness (on and off balance sheet) to Adjusted Tangible Net Worth has not exceeded [***]. A calculation of Seller’s actual Indebtedness to Adjusted Tangible Net Worth is provided in Schedule 1 hereto.
Maintenance of Profitability. Seller has not permitted, for any Test Period, Adjusted Net Income for such Test Period, before income taxes for such Test Period and distributions made during such Test Period, to be less than [***]. A calculation of Seller’s actual Profitability is provided in Schedule 1 hereto.
Insurance. Seller, or its Affiliates, have maintained, for Seller Parties and their Subsidiaries, insurance coverage with respect to employee dishonesty, forgery or alteration, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud or an aggregate amount of at least $1,000,000. The actual amount of such coverage is $_____________.
Financial Statements. The financial statements attached hereto are accurate and complete, accurately reflect the financial condition of Seller, and do not omit any material fact as of the date(s) thereof.
Documentation. Seller Parties have performed the documentation procedures required by its operational guidelines with respect to endorsements and assignments, including the recordation of assignments, or has verified that such documentation procedures have been performed by a prior holder of such Purchased Asset and Contributed Asset.
Compliance. Seller Parties have observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Program Agreements to be observed, performed and satisfied by it. [If a
covenant or other agreement or condition has not been complied with, Seller Parties shall describe such lack of compliance and provide the date of any related waiver thereof.]
Regulatory Action. Except as otherwise disclosed to Administrative Agent or to the extent prohibited from disclosing by any Governmental Authority, no Seller Party is currently under investigation or, to best of Seller Parties’ knowledge, no investigation by any federal, state or local government agency is threatened. Except to the extent prohibited from disclosing by any Governmental Authority, neither Seller Party has been the subject of any government investigation which has resulted in the voluntary or involuntary suspension of a license, a cease and desist order, or such other action as could adversely impact Seller Parties’ business. [If so, Seller Parties shall describe the situation in reasonable detail and describe the action that Seller Parties have taken or proposes to take in connection therewith.]
No Default. No Default or Event of Default has occurred or is continuing. [If any Default or Event of Default has occurred and is continuing, Seller Parties shall describe the same in reasonable detail and describe the action Seller Parties have taken or proposes to take with respect thereto, and if such Default or Event of Default has been expressly waived by Administrative Agent in writing, Seller Parties shall describe the Default or Event of Default and provide the date of the related waiver.]
Distributions. If an Event of Default has occurred and is continuing, no Seller Party has paid any dividends greater than Net Income in any given calendar year.
Indebtedness. All Indebtedness (other than Indebtedness evidenced by the Repurchase Agreement) of Seller Parties existing on the date hereof is listed on Schedule 2 hereto.
[Originations][Acquisitions]. Attached hereto as Schedule 3 is a true and correct summary of all Mortgage Loans [originated][acquired] by Seller Parties for the calendar month ending [DATE] and for the year to date ending [DATE].
Hedging. Attached hereto as Schedule 4 is a true and correct summary of all Interest Rate Protection Agreements entered into or maintained by Seller Parties during the calendar month ending on [DATE].
Repurchases and Early Payment Default Requests. Attached hereto as Schedule 5 is a true and correct summary of the portfolio performance including representation breaches, missing document breaches, repurchases due to fraud, early payment default requests, and Mortgage Loans subject to other warehouse lines in excess of sixty (60) days summarized on the basis of (a) pending repurchase demands (including weighted average duration of outstanding request), (b) satisfied repurchase demands and (c) total repurchase demands.
Quality Control. Attached hereto as Schedule 6 is a true and correct copy of the internal quality control maintained by Seller Parties.
Litigation Summary. To the extent Seller is not prohibited from disclosing, attached hereto as Schedule 7 is a true and correct summary of all material actions, notices, proceedings and investigations pending with respect to which Seller Parties have received service of process or other form of notice or, to the best of Seller Parties’ knowledge, threatened against it, before any court, administrative or governmental agency or other regulatory body or tribunal that (i) questions or challenges the validity or enforceability of any of the
Program Agreements or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a non-frivolous claim individually in an amount greater than (x) with respect to Seller, [***] and (y) with respect to an Underlying Entity, [***]; provided, that, this clause (ii) shall not include any routine actions brought by or on behalf of an individual Mortgagor with respect to which Seller is acting in its capacity as servicer (which shall include without limitation, contested foreclosures, contested actions or bankruptcy proceedings) or (iii) which, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect, as of the calendar month ending [DATE].
Beneficial Ownership Certification. To the extent the information contained in the previously delivered Beneficial Ownership Certification is no longer true or correct, an updated true and correct Beneficial Ownership Certification is attached here to as Schedule 8 hereto.
IN WITNESS WHEREOF, I have set my hand this _____ day of ________, ________.
HOME POINT FINANCIAL CORPORATION, as Seller | |||
By: | |||
Name: | |||
Title: |
SCHEDULE 1 TO OFFICER’S COMPLIANCE CERTIFICATE
CALCULATIONS OF FINANCIAL COVENANTS
As of the calendar month ended [DATE] or quarter ended [DATE]
SCHEDULE 2 TO OFFICER’S COMPLIANCE CERTIFICATE
INDEBTEDNESS AS OF _________________________
LENDER |
TOTAL FACILITY SIZE |
FACILITY TYPE (i.e. EFP, Repurchase, etc) |
$ AMOUNT COMMITTED |
OUTSTANDING INDEBTEDNESS |
EXPIRATION DATE |
SCHEDULE 3 TO OFFICER’S COMPLIANCE CERTIFICATE
CURRENT MONTHLY OVERALL MORTGAGE LOAN [ORIGINATIONS - ORIGNATIONS] [ACQUISITIONS – PURCHASES]
[Monthly] | [Quarterly] | [YTD] | |
UPB | UPB | UPB | |
CONV | [__] | [__] | [__] |
EDGE | [__] | [__] | [__] |
FHA | [__] | [__] | [__] |
Other | [__] | [__] | [__] |
USDA | [__] | [__] | [__] |
VA | [__] | [__] | [__] |
Grand Total | [__] | [__] | [__] |
By Channel | [Monthly] | [Quarterly] | [YTD] |
Broker | [__]% | [__]% | [__]% |
Consumer Direct | [__]% | [__]% | [__]% |
Correspondent Del | [__]% | [__]% | [__]% |
Correspondent Non | [__]% | [__]% | [__]% |
Del |
|
||
Grand Total | 100.00% | 100.00% | 100.00% |
By Type | [Monthly] | [Quarterly] | [YTD] |
Cash-Out Refinance | [__]% | [__]% | [__]% |
NoCash-Out Refinance | [__]% | [__]% | [__]% |
Purchase | [__]% | [__]% | [__]% |
Grand Total | 100.00% | 100.00% | 100.00% |
SCHEDULE 4 TO OFFICER’S COMPLIANCE CERTIFICATE
INTEREST RATE PROTECTION AGREEMENTS
SCHEDULE 5 TO OFFICER’S COMPLIANCE CERTIFICATE
REPURCHASES AND EARLY PAYMENT DEFAULT REQUESTS
Repurchases | YTD UPB | YTD Count | |
Open repurchase requests | $ | ||
Open repurchases being contested | $ | ||
Repurchases settled YTD | $ | ||
Repurchases settled EOY 2019 | $ | ||
Repurchases settled EOY 2018 | $ | ||
Repurchases settled EOY 2017 | $ | ||
Total # of | |||
Indemnifications | Loans | Indemnifications ($) | |
All-Time | $ |
SCHEDULE 6 TO OFFICER’S COMPLIANCE CERTIFICATE
QUALITY CONTROL RESULTS
SCHEDULE 7 TO OFFICER’S COMPLIANCE CERTIFICATE
LITIGATION SUMMARY
Case Caption |
Filing Date |
Court / Regulator |
Case No. |
Nature of Claims |
Damages / Penalties Alleged |
Plaintiff’s Counsel |
Customer’s counsel |
Status |
Customer’s Reserve Amount |
SCHEDULE 8 TO OFFICER’S COMPLIANCE CERTIFICATE
BENEFICIAL OWNERSHIP CERTIFICATION
[ATTACHED]
EXHIBIT D
SCHEDULE OF INDEBTEDNESS
See Attached.
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Exhibit 10.4
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
MORTGAGE WAREHOUSE AGREEMENT
by and between
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION,
and
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION
AGREEMENT DATE:
AUGUST 5, 2020
AGREEMENT NO.:
4916
MORTGAGE WAREHOUSE AGREEMENT
THIS MORTGAGE WAREHOUSE AGREEMENT (this “Agreement”) is made and entered into as of AUGUST 5, 2020 (the “Agreement Date”) (but effective as of the Effective Date) between HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION (“Seller”) and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION.
RECITALS
A.
Seller is actively engaged in Mortgage Loan Activities.
B.
Seller is seeking additional funding sources for its Mortgage Loan Activities through the sale of Participation Interests in Mortgage Loans generated by such Mortgage Loan Activities.
C.
Bank is, among other things, in the business of purchasing participation interests in Mortgage Loans.
D.
Seller shall have no obligation to offer for sale, and Bank shall have no obligation to purchase, Participation Interests in such Mortgage Loans. However, Seller and Bank desire to set forth the terms under which such offers and purchases, if any, can be made.
AGREEMENT
NOW, THEREFORE, for and in consideration of the covenants, representations, warranties and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Specific Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
“Advance Request Termination Date” shall mean the final day on which Seller may submit to Bank a Request. The Advance Request Termination Date is the earlier to occur of: (a) the date which is twelve (12) months after the Effective Date; or (b) the date on which Seller’s rights hereunder to submit any and all Requests to Bank shall terminate pursuant to the provisions of this Agreement or any other Warehouse Document (including, pursuant to Section 5.2, 5.3 or 9.2).
“Bank Document Deliverables” shall mean, with respect to any Participated Mortgage Loan, (a) the original of the fully executed Mortgage Note for such Participated Mortgage Loan, together with the Required Endorsements related thereto (including, without limitation, each original executed allonge required by Bank in connection therewith), (b) the Required Document Custodian Deliverables (as defined in the Section of Exhibit F entitled “Third-Party Document Custodian”) related to such Participated Mortgage Loan, but only if (and only during such time as) Seller is permitted pursuant to such Section to deliver or cause to be delivered to the Person defined in such Section as the “Document Custodian” any Bank Document Deliverables, and (c) any other agreements, files, records and other documents related to such Participated Mortgage Loan which are required to be delivered to Bank in connection with the purchase of the
Participation Interest in such Participated Mortgage Loan pursuant to the Warehouse Program Guide in effect as of the related Purchase Date.
“Broker Originated Mortgage Loan” shall mean any Mortgage Loan which: (a) is closed in the name of a mortgage broker as lender; and (b) is simultaneously transferred and assigned by such mortgage broker to Seller at closing, and upon such transfer and assignment Seller shall be the holder of the Mortgage Note for such Mortgage Loan and otherwise own all rights, titles and interests in and to such Mortgage Loan.
“Correspondent Originated Mortgage Loan” shall mean any Mortgage Loan which: (a) was not originated by Seller; (b) is not a Broker Originated Mortgage Loan; and (c) has or will be purchased by Seller from the holder of the Mortgage Note for such Mortgage Loan, and upon such purchase Seller shall be the holder of the Mortgage Note for such Mortgage Loan and otherwise own all rights, titles and interests in and to such Mortgage Loan.
“Document Custodian” shall mean: (a) the Person defined as the “Document Custodian” in the Section of Exhibit F entitled “Third-Party Document Custodian” if (and only during such time as) Seller is permitted pursuant to such Section to deliver or cause to be delivered to such Person any Bank Document Deliverables; or (b) Bank if (and during such time as) Seller is not permitted pursuant to the Section of Exhibit F entitled “Third-Party Document Custodian” to deliver or cause to be delivered to the Person defined as the “Document Custodian” in such Section any Bank Document Deliverables.
“Eligible Mortgage Loan” shall mean any Mortgage Loan: (a) that is a Seller Originated Mortgage Loan or a Third-Party Originated Mortgage Loan; (b) that is in all respects in compliance with the provisions of the Warehouse Program Guide applicable to such Mortgage Loan; (c) for which all of the representations and warranties set forth in Section 6.10 shall be true, complete and correct on and as of the Purchase Date of a Participation Interest in such Mortgage Loan and at all times thereafter (other than those representations and warranties which are, by their terms, expressly limited to the date or time period specified therein) and (d) which is otherwise acceptable to Bank in its sole and absolute discretion on and as of such Purchase Date.
“Funding Fee” shall mean a fee payable by Seller to Bank in an amount equal to [***] for each Participated Mortgage Loan. Subject to applicable Law, Bank may, in its sole and absolute discretion, adjust the Funding Fee applicable to Participated Mortgage Loans upon thirty (30) days advance written notice to Seller, in which case, commencing upon the thirty-first (31st) day after the date of such notice, the Funding Fee set forth in such written notice shall apply to any and all Mortgage Loans in which Bank elects to purchase Participation Interests on or after such thirty-first (31st) day.
“Maximum Participation Amount” shall mean an amount equal to THREE HUNDRED MILLION and No/100 Dollars ($300,000,000.00); provided, however, that during any Overline Period, the Maximum Participation Amount shall be the amount set forth for the same in the related Overline Confirmation for such Overline Period.
“Minimum Pledged Balance” shall mean good funds in an amount not less than [***] of the Maximum Participation Amount; provided, however, that during any Overline Period, the Minimum Pledged Balance shall be the amount set for the same in the related Overline Confirmation for such Overline Period.
“Mortgage Loan Activities” shall mean the purchasing, processing, origination, administration, servicing and selling of Mortgage Loans by Seller and any other business activities related thereto or contemplated by this Agreement (including any activities related to Mortgage Loan Transactions).
“Mortgage Loan Transaction” shall mean: (a) with respect to any Mortgage Loan that is a Seller Originated Mortgage Loan, the closing and funding of such Mortgage Loan by the applicable Escrow Agent; and (b) with respect to any Mortgage Loan that is a Third-Party Originated Mortgage Loan: (i) the purchase and sale transaction pursuant to which Seller shall have purchased, fully paid for and shall own all rights, titles and interests in and to such Mortgage Loan (if a Correspondent Originated Mortgage Loan); or (ii) the transaction pursuant to which such Mortgage Loan (if a Broker Originated Mortgage Loan) is closed in the name of the applicable mortgage broker as lender and funded by the applicable Escrow Agent, and all rights, titles and interests of such mortgage broker in and to such Mortgage Loan are simultaneously transferred and assigned by such mortgage broker to Seller at closing.
“Participation Interest Rate” shall mean, with respect to any Participated Mortgage Loan, the per annum rate of interest payable to Bank in connection with such Participated Mortgage Loan and its Participation Interest therein, which rate shall be calculated as a variable rate equal to the greater of: (a) the LIBOR Rate as of the related Purchase Date, as the LIBOR Rate may vary from day to day thereafter, Plus [***]; or (b) the Participation Interest Rate Floor; provided, however, that the Participation Interest Rate for any Participated Mortgage Loan shall not at any time be greater than the maximum rate permitted under applicable Law. Subject to applicable Law, Bank may, in its sole and absolute discretion, adjust the Participation Interest Rate applicable to Participated Mortgage Loans upon thirty (30) days advance written notice to Seller, in which case, commencing upon the thirty-first (31st) day after the date of such notice, the Participation Interest Rate for any and all Mortgage Loans in which Bank elects to purchase Participation Interests on or after such thirty-first (31st) day shall be the lesser of (a) the rate of interest set forth in such written notice or (b) the maximum rate permitted under applicable Law for the applicable Participated Mortgage Loan. For purposes of determining the Participation Interest Rate for any Participated Mortgage Loan, the “LIBOR Rate” means, with respect to a period of thirty (30) days, the London Interbank Offered Rate for deposits in United States Dollars (expressed as a percentage per annum) that is published or announced from time to time by Bloomberg or such other recognized commercial service selected by Bank, in its sole discretion; provided, however, if such rate is not available or, in Bank’s sole discretion, becomes unreliable, the LIBOR Rate will be determined by an alternate method reasonably selected by Bank. Notwithstanding anything herein to the contrary, in no event shall the LIBOR Rate be less than [***] per annum. All interest hereunder shall be calculated on the basis of a three hundred sixty (360) day year and shall accrue on the actual number of days elapsed for any whole or partial month in which interest is being calculated.
“Participation Interest Rate Floor” shall mean an interest rate equal to [***] per annum. Subject to applicable Law, Bank may, in its sole and absolute discretion, adjust the Participation Interest Rate Floor applicable to Participated Mortgage Loans upon thirty (30) days advance written notice to Seller, in which case, commencing upon the thirty-first (31st) day after the date of such notice, the Participation Interest Rate Floor set forth in such written notice shall apply to any and all Mortgage Loans in which Bank elects to purchase Participation Interests on or after such thirty-first (31st) day.
“Repayment Account” shall mean the deposit account established, owned and controlled by Bank, into which all proceeds from each sale of any Participated Mortgage Loan by Bank and
Seller to a Take-Out Purchaser shall be funded and deposited, and such account and all funds deposited or maintained therein shall be disbursed and applied by Bank pursuant to the terms of this Agreement. The account number for the Repayment Account is [***] or such other deposit account number designated by Bank from time to time as the Repayment Account in a written notice delivered by Bank to Seller pursuant to this Agreement.
“Required Endorsements” shall mean: (a) with respect to any Mortgage Note related to a Third-Party Originated Mortgage Loan, the endorsement pursuant to applicable Law of such Mortgage Note by the original payee and any and all subsequent holders thereof prior to the purchase of such Mortgage Note by Seller; and (b) with respect any Mortgage Note related to a Third-Party Originated Mortgage Loan or a Seller Originated Mortgage Loan, at Bank’s election, either (i) the endorsement pursuant to applicable Law of such Mortgage Note in blank by Seller (which may, in Bank’s discretion, be evidenced by an original allonge, in form and content acceptable to Bank, executed by Seller and affixed to such Mortgage Note) or (ii) no endorsement of such Mortgage Note by Seller, if Bank shall have received and accepted a valid power of attorney, in form and content satisfactory to Bank, authorizing Bank to endorse such Mortgage Note for and on behalf of Seller (provided that prior to any delivery of such Mortgage Note by Bank to a Take-Out Purchaser, such Mortgage Note shall be endorsed in favor of such Take-Out Purchaser by Bank as agent for Seller under such power of attorney).
“Standard Participation Percentage” shall mean a percentage equal to [***].
“Target Usage Amount” shall mean an amount equal to [***] of the Maximum Participation Amount.
“Third-Party Originated Mortgage Loan” shall mean any Correspondent Originated Mortgage Loan or any Broker Originated Mortgage Loan.
1.2 General Defined Terms. In addition to the terms defined in Section 1.1, as used in this Agreement, the following terms shall have the meanings set forth below:
“Accepted Lending Practices” shall mean the loan origination practices to be observed by the originators of the Mortgage Loans, which practices shall be conducted: (a) in a commercially reasonable manner and in good faith; (b) in accordance with the provisions of this Agreement; (c) in accordance with all applicable Laws; (d) in accordance with the requirements (if any) of the Warehouse Program Guide; and (e) in a manner consistent with customary and usual standards of practice of prudent originators of residential mortgage loans.
“Accepted Servicing Practices” shall mean the loan servicing practices to be observed by Seller in connection with Participated Mortgage Loans, which practices shall be conducted: (a) in a commercially reasonable manner and in good faith; (b) in accordance with the provisions of this Agreement; (c) in accordance with all applicable Laws; (d) in accordance with the Warehouse Program Guide; (e) in a manner consistent with customary and usual standards of practice of prudent servicers of residential mortgage loans; and (f) to the extent consistent with the foregoing, in a manner to maximize the timely and complete recovery of all Mortgage Loan Collections.
“Account” or “Accounts” shall mean any of the deposit accounts to be established and maintained pursuant to this Agreement, including: (a) the Participation Account; (b) the Pledged Account; (c) the Remittance Account; (d) the Repayment Account; and (e) such other accounts as
Bank may require Seller to establish pursuant to or in connection with this Agreement or any other Warehouse Document.
“Advance” shall mean each payment of funds by Bank to Seller pursuant to the terms of this Agreement to pay the Purchase Price for the purchase of a Participation Interest. Such payment by Bank to Seller of the Purchase Price for a Participation Interest shall be effected through the delivery by Bank on behalf of Seller of the proceeds of the related Advance directly to the applicable Funding Recipient, which proceeds shall be applied towards satisfying Seller’s obligations with respect to the applicable Mortgage Loan Transaction. With respect to any Participated Mortgage Loan, an Advance shall be deemed to be made on the date on which funds are wired or otherwise transferred by Bank to the related Funding Recipient regardless of whether funds are actually received by such Funding Recipient on the date of the initiation of such wire or other transfer.
“Aged Participated Mortgage Loan” shall mean any Participated Mortgage Loan which does not constitute a Retired Participated Mortgage Loan on or after the thirtieth (30th) day after the Purchase Date for such Participated Mortgage Loan.
“Agency” shall mean FHA, FHLMC, FNMA, GNMA, VA or USDA.
“Agency Approvals” shall mean: (a) all approvals and requirements of FNMA necessary for Seller to sell Eligible Mortgage Loans to FNMA and/or to service Eligible Mortgage Loans; (b) all approvals and requirements of FHLMC necessary for Seller to sell Eligible Mortgage Loans to FHLMC and/or to service Eligible Mortgage Loans; and (c) all approvals and requirements of GNMA for Seller to be an approved issuer of securities comprising any Eligible Mortgage Loans.
“Agreement Date” shall have the meaning given to such term in the first paragraph of this Agreement. The Agreement Date is for reference purposes only in order to identify in the Warehouse Documents the date of this Agreement. The effective date of this Agreement shall be the Effective Date.
“Agreement Termination Date” shall mean the date on which this Agreement shall terminate and cease to be in force and effect (except with respect to the provisions of this Agreement which expressly survive termination). The Agreement Termination Date is the earlier to occur of: (a) the date on which this Agreement shall terminate pursuant to Section 5.2(c); or (b) the date on which this Agreement shall otherwise terminate in accordance with the express terms of this Agreement or any other Warehouse Document.
“Bank” shall mean TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, and its successors and assigns.
“Bank Payment Deliverables” shall mean any and all checks, commercial paper, notes, cash or other forms of payment of any and all sums: (a) required to be paid to Bank hereunder but which have been received by Seller (including any and all proceeds received by Seller from the sale of any Participated Mortgage Loan to a Take-Out Purchaser); or (b) received by Seller during the occurrence of an Event of Default which sums relate to any Participated Mortgage Loan.
“Bankruptcy Code” shall mean Title 11 of the United States Code, as now or hereafter in effect.
“Bailee Letter” shall mean a letter, in such form and content required by Bank, delivered or caused to be delivered by Bank to any Take-Out Purchaser in connection with the proposed purchase of a Participated Mortgage Loan by such Take-Out Purchaser or its designee, which letter, among other things, directs such Take-Out Purchaser to hold, as bailee for Bank, the Mortgage Loan Documents for such Participated Mortgage Loan.
“Blanket Assignment” shall mean an assignment agreement in the form of Exhibit I, or in such other form required by Bank, executed and acknowledged by Seller and Bank, which evidences, among other things, the sale, transfer, assignment and conveyance by Seller to Bank of any and all Participation Interests in the Participated Mortgage Loans and the Mortgage Loan Documents related thereto now or hereafter purchased by Bank from Seller.
“Borrower” shall mean any Person who is an obligor on or under a Mortgage Loan.
“Business Day” shall mean any day other than a Saturday, Sunday or day on which commercial banks are authorized or required to be closed under the Laws of the State of Texas. Unless otherwise provided herein, the term “day” means a calendar day.
“Collateral” shall have the meaning given to such term in the UCC-1 financing statement attached hereto as Exhibit D
“Effective Date” shall mean the date of Seller’s execution of this Agreement, as set forth below Seller’s signature block hereto; provided that this Agreement shall not be effective until fully executed by both Seller and Bank.
“Escrow Agent” shall mean, with respect to any Mortgage Loan, the title company or agency, approved in advance by Bank, which is responsible for the closing and funding of such Mortgage Loan.
“Event of Default” shall mean any of the events specified in Section 9.1.
“FHA” shall mean the Federal Housing Administration, or its successor.
“FHLMC” shall mean the Federal Home Loan Mortgage Corporation, or its successor.
“FNMA” shall mean the Federal National Mortgage Association, or its successor.
“Funding Recipient” shall mean, with respect to any Participated Mortgage Loan, the Person to whom Bank shall directly pay the Purchase Price for the purchase of a Participation Interest in such Participated Mortgage Loan, as set forth in the related Request, provided that such Person meets the qualifications set forth in the Warehouse Program Guide for being a Funding Recipient with respect to such Participated Mortgage Loan.
“Generally Accepted Accounting Principles” or “GAAP” shall mean those generally accepted accounting principles and practices which are recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof and which are consistently applied for all applicable periods, except that any accounting principle or practice required to be changed by the said Accounting Principles Board or Financial Accounting Standards Board (or other appropriate board or committee of the said Boards) in order to continue as a generally accepted accounting principle or practice may be so changed.
“GNMA” shall mean the Government National Mortgage Association, or its successor.
“Governmental Authority” shall mean any and all (domestic or foreign) federal, state, county, municipal, city or other government department, commission, board, court, agency or any other instrumentality of any of them (including any Agency) having jurisdiction over Bank, Seller, the Mortgage Loans or any of the transactions contemplated herein.
“Investor” shall mean any Person (other than a Securitizer), approved in advance by Bank, who purchases or agrees to purchase any Participated Mortgage Loan from Seller and Bank pursuant to an Investor Loan Purchase Agreement.
“Investor Loan Purchase Agreement” shall mean, with respect to any Participated Mortgage Loan to be sold by Seller and Bank to any Investor, a current, valid, binding and enforceable commitment issued by such Investor in favor of Seller, and/or other written agreement or arrangement between such Investor and Seller, to purchase such Participated Mortgage Loan (including any such commitment or agreement which does not specifically identify such Participated Mortgage Loan but which contemplates the purchase of Mortgage Loans by such Investor from time to time on a best-efforts basis), which Investor Loan Purchase Agreement provides for a purchase price to be paid by such Investor of not less than the Take-Out Purchase Price for such Participated Mortgage Loan and which is otherwise on terms and in such form and content acceptable to Bank.
“Law” or “law” shall mean any and all present and future law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, guideline, authorization or other direction or requirement of the United States, or of any city or municipality, state, commonwealth, nation, country, territory or possession or of any court or governmental department, commission, board, bureau, agency or instrumentality. The terms “Law” and “law” include: (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. Law No. 111-203, 124 Stat. 1376 (2010), and any and all Laws issued thereunder or in connection therewith, as may be amended from time to time (collectively, the “Dodd-Frank Act”); (b) the Interagency Appraisal and Evaluation Guidelines jointly issued on December 2, 2010 by the Office of the Comptroller of Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration, as the same may be amended from time to time (collectively, the “Interagency Appraisal Guidelines”); (c) the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. §§ 5101 et seq.) and any and all applicable state Laws related thereto, as may be amended from time to time (collectively, the “S.A.F.E. Act”); (d) any and all similar Laws from time to time in effect; (e) any and all interpretations, rules, and regulations promulgated by any Government Authority in connection with the foregoing; and (f) any and all amendments to or replacements of the foregoing.
“Lien” shall mean any lien, mortgage, security interest, assignment, tax lien, pledge or encumbrance, or conditional sale or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, or any other interest in Property designed to secure the repayment of indebtedness.
“Loan Application” shall mean a completed application for the applicable Mortgage Loan in its final form, signed by all applicable Borrowers, and which is in compliance with all applicable Laws.
“Material Adverse Effect” shall mean any set of circumstances or event which with respect to any Person: (a) could reasonably be expected to have a material adverse effect upon the validity, performance, or enforceability of any Warehouse Document against such Person; (b) is or could reasonably be expected to have a material adverse effect upon the condition (financial or otherwise), properties, liabilities (actual or contingent), business operations or prospects of such Person taken as a whole; (c) could reasonably be expected to materially impair the ability of such Person to perform its obligations under any Warehouse Document to which it is a party; or (d) could reasonably be expected to cause an Event of Default.
“Maximum Judgment Amount” shall mean the lesser of: (a) [***]; or (b) at any particular time, the amount equal to [***] of the sum of Seller’s cash, cash equivalents (certificates of deposit and other depository accounts established at FDIC-insured banks), United States government-issued securities and other registered, unrestricted equity or debt securities which are publicly traded on a recognized United States exchange and have been approved by Bank, in its sole and absolute discretion and which, in all events, are held in Seller’s name and are free and clear of all Liens (except Liens in favor of Bank).
“Mortgage Loan” shall mean a residential mortgage loan evidenced by a Mortgage Note and secured by a Security Instrument.
“Mortgage Loan Collections” shall mean all checks, instruments, funds, and other property from time to time paid on, under or with respect to any Participated Mortgage Loan under any Mortgage Loan Document or otherwise related thereto, including, without limitation, all payments of principal, interest, fees, charges, costs, expenses, indemnities and other amounts, and all proceeds of sale of such Participated Mortgage Loan.
“Mortgage Loan Documents” shall mean, with respect to any Mortgage Loan, the Mortgage Note evidencing such Mortgage Loan, the Security Instrument securing such Mortgage Loan, and all other agreements, instruments and documents governing, evidencing, guaranteeing or relating to such Mortgage Loan, Mortgage Note or Security Instrument.
“Mortgage Loan File” shall mean, with respect to any Participated Mortgage Loan, any and all Mortgage Loan Documents and other agreements, files, records and other documents related to such Participated Mortgage Loan (including the related credit file and underwriting standards under which Seller approved such Participated Mortgage Loan).
“Mortgage Note” shall mean, with respect to any Mortgage Loan, a full recourse promissory note evidencing such Mortgage Loan and secured by a Security Instrument.
“Mortgage Note Rate” shall mean, with respect to any Mortgage Loan, the per annum rate of interest in effect and accruing from time to time on the outstanding principal balance of such Mortgage Loan, as set forth in the Mortgage Note evidencing such Mortgage Loan.
“Mortgaged Property” shall mean, with respect to any Mortgage Loan, the Residential Real Property subject to a Security Instrument securing such Mortgage Loan.
“Outstanding Participation Balance” shall mean, at any given time, an amount, as reflected on Bank’s books and records, equal to the aggregate sum of the outstanding Advances hereunder made by Bank for the purchase of Participated Mortgage Loans which do not at such time constitute Retired Participated Mortgage Loans.
“Participated Mortgage Loan” shall mean any Mortgage Loan in which Bank has elected to purchase a Participation Interest from Seller pursuant to the terms and conditions of this Agreement. A Mortgage Loan in which Bank has purchased a Participation Interest shall cease to be a Participated Mortgage Loan hereunder at such time as such Mortgage Loan is a Retired Participated Mortgage Loan.
“Participation Account” shall mean the deposit account established and maintained by Seller at Bank for the purpose of holding funds of Seller to be used to pay Seller’s Funding Amounts. The account number for the Participation Account is identified in Schedule 1 to the Pledge Agreement.
“Participation Interest” shall mean, with respect to any Mortgage Loan, an undivided percentage ownership interest in all rights, titles and interests in, to and under such Mortgage Loan (including, all Mortgage Loan Collections payable on, and with respect to such Mortgage Loan, all of such Mortgage Loan Documents and all other obligations thereunder, all claims, suits, causes of action, and any other rights, known or unknown, against any of the related Borrower, guarantor or other Person relating to any of the foregoing, all collateral, guarantees and other security of or provided by any of the related Borrower or any other Person of any kind for or in respect to any and all of the foregoing, and all proceeds of any and all of the foregoing) purchased by Bank from Seller hereunder and owned by Bank. The undivided percentage ownership interest of Bank in any such Mortgage Loan shall be equal to the Participation Percentage for such Mortgage Loan in effect from time to time.
“Participation Percentage” shall mean, with respect to any Participation Interest in a Participated Mortgage Loan, a percentage of undivided ownership interest in such Participated Mortgage Loan equal to: (a) the Standard Participation Percentage; or (b) if Bank elects, in its sole discretion, to make an Advance for the purchase of such Participation Interest which is greater or less than the amount equal to the Standard Participation Percentage multiplied by the outstanding principal amount of such Participated Mortgage Loan as of the related Purchase Date, then the amount of such Advance divided by such outstanding principal amount, expressed as a percentage; as the Participation Percentage for such Participated Mortgage Loan is reflected on Bank’s books and records. Upon any repurchase of all or any portion of Bank’s outstanding Participation Interest in any Participated Mortgage Loan by Seller hereunder, Bank’s then-current Participation Percentage in such Participated Mortgage Loan shall be adjusted pursuant to this Agreement to give effect to such repurchase. The Participation Percentage for any Participated Mortgage Loan shall be the percentage reflected on Bank’s books and records from time to time for such Participation Percentage, absent manifest error conclusively established by Seller.
“Party” shall mean each of Seller and Bank.
“Permitted Encumbrances” shall mean, with respect to any Mortgage Loan: (a) the Lien of current real property taxes and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording being acceptable pursuant to Accepted Lending Practices and specifically referred to in the lender’s title insurance policy delivered to the originator of such Mortgage Loan and which do not adversely affect the appraised value of the Mortgaged Property for such Mortgage Loan; and (c) other matters to which like properties are commonly subject which are acceptable pursuant to Accepted Lending Practices and do not, individually or in the aggregate, materially interfere with the benefits of the security intended to be provided by the Security Instrument for such Mortgage Loan or the use, enjoyment, value or marketability of the related Mortgaged Property.
“Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other form of entity.
“Pledge Agreement” shall mean, individually and collectively, each pledge or security agreement, in such form and content required by Bank, now or hereafter executed for the benefit of Bank in connection with this Agreement and the transactions contemplated hereby, including each agreement attached hereto as Exhibit B.
“Pledged Account” shall mean the depository account or accounts established and maintained by Seller at Bank for the purpose of holding funds of Seller to be used as a source of funds to pay the Repurchase/Sale Obligations. The account number for the Pledged Account is identified in Schedule 1 to the Pledge Agreement.
“Proceeding” means any action, claim, investigation, lawsuit or other proceeding.
“Property” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“Purchase Date” shall mean, with respect to any Participated Mortgage Loan, the date and time of the Advance for the purchase by Bank of a Participation Interest in such Participated Mortgage Loan.
“Purchase Price” shall mean, with respect to a Participation Interest in any Mortgage Loan to be purchased by Bank, an amount equal to the outstanding principal amount of such Mortgage Loan on the related Purchase Date multiplied by the Bank’s Participation Percentage for such Participation Interest in such Mortgage Loan.
“Remittance Account” shall mean the deposit account established and maintained by Seller at Bank into which Bank shall deposit any and all funds received by Bank from time to time which are attributable hereunder to Seller’s Retained Percentage in any Participated Mortgage Loan and which are required to be paid by Bank to Seller hereunder.
“Repurchase Participation Percentage” shall mean, with respect to a Participation Interest in any Participated Mortgage Loan: (a) the portion of Bank’s outstanding Participation Percentage in such Participated Mortgage Loan which is required by Bank to be repurchased by Seller from Bank pursuant to Section 4.7, expressed as a percentage (for example, if Bank’s Participation Percentage immediately prior to the repurchase is [***], and Bank’s Participation Percentage is required to be reduced to [***] in connection with the repurchase, then the Repurchase Participation Percentage would equal [***]); or (b) [***] of Bank’s outstanding Participation Percentage in such Mortgage Loan which is required by Bank to be repurchased in its entirety by Seller from Bank pursuant to Section 4.8 (for example, if Bank’s Participation Percentage immediately prior to the repurchase is [***], and Bank’s Participation Percentage is required to be reduced to [***] in connection with the repurchase, then the Repurchase Participation Percentage would equal [***]).
“Repurchase Price” shall mean, with respect to a Participation Interest in any Participated Mortgage Loan, the amount to be paid by Seller to Bank for the repurchase of all or any portion of such Participation Interest which is required by Bank to be repurchased by Seller from Bank pursuant to Sections 4.7 or 4.8, which amount shall be equal to: (a) the amount of any then-earned and unpaid Funding Fee payable by Seller to Bank hereunder with respect to such Participated
Mortgage Loan as of the date of such repurchase; plus (b) an amount equal to (i) the outstanding principal amount of such Participated Mortgage Loan on the related Purchase Date, multiplied by (ii) the Repurchase Participation Percentage for such Participated Mortgage Loan; plus (c) the amount of Bank’s pro rata share of accrued interest on such Participated Mortgage Loan (which is allocable to the portion of the Participation Interest that is required to be repurchased by Seller), determined at the Participation Interest Rate for such Participated Mortgage Loan, during the period of time commencing on the Purchase Date for such Participated Mortgage Loan and ending on the date of such repurchase; plus (d) any and all other amounts related to such Participated Mortgage Loan which are then due and payable by Seller to Bank under this Agreement as of the date of such repurchase (including, without limitation, any and all costs and expenses of Bank incurred in enforcing its rights and remedies hereunder in connection with the related Mortgage Loan); less (e) all amounts (if any) received and applied by Bank hereunder, as of the date of such repurchase, towards payment of Bank’s pro rata share (determined in accordance with Bank’s Participation Percentage in effect from time to time with respect to such Participation Interest) of principal and interest (determined at the applicable Participation Interest Rate) on such Participated Mortgage Loan.
“Repurchase/Sale Obligations” shall mean: (a) any and all obligations of Seller, whether now existing or hereafter arising, to (i) arrange for the sale by and on behalf of the Parties of each Participated Mortgage Loan to a Take-Out Purchaser, and complete each such sale, as and when required pursuant to the terms and conditions of this Agreement and (ii) repurchase all or any portion of Bank’s Participation Interest in each Participated Mortgage Loan as and when required pursuant to the terms and conditions of this Agreement; (b) any and all liabilities of Seller to Bank in connection with the obligations described in clause (a) of this sentence; and (c) any and all costs and expenses incurred by Bank in connection with the collection, administration or enforcement of all or any part of the obligations and liabilities described in clauses (a) and (b) of this sentence or the protection or preservation of, or realization upon, any collateral securing all or any part of such liabilities and obligations, including, without limitation, all reasonable attorneys’ fees.
“Request” shall mean any request by Seller to Bank for the purchase by Bank from Seller of a Participation Interest in an Eligible Mortgage Loan and the Advance by Bank of funds for the Purchase Price for such Participation Interest, which Request shall be delivered by Seller to Bank in such manner and shall contain such information as may be required by Bank from time to time.
“Residential Real Property” shall mean a single platted lot of land improved with a one-to-four family residence.
“Restricted Accounts” shall mean the Participation Account and the Pledged Account.
“Retained Percentage” shall mean, with respect to any Participated Mortgage Loan, the percentage of undivided ownership interest retained by Seller in such Participated Mortgage Loan, after giving effect to the sale by Seller and purchase by Bank of such Participation Interest hereunder, which percentage shall be, for any such Mortgage Loan, equal to the difference of [***] less the Bank’s Participation Percentage in such Participated Mortgage Loan. Upon any repurchase of all or any portion of Bank’s outstanding Participation Interest in any Participated Mortgage Loan by Seller hereunder, Seller’s then-current Retained Percentage in such Participated Mortgage Loan shall be adjusted to give effect to such repurchase. The Retained Percentage for any Participated Mortgage Loan shall be the percentage reflected on Bank’s books and records from time to time for such Retained Percentage, absent manifest error conclusively established by Seller.
“Retired Participated Mortgage Loan” shall mean any Mortgage Loan in which Bank has purchased a Participation Interest: (a) which has been subsequently sold in its entirety to a Take-Out Purchaser and the full amount of the Take-Out Purchase Price for such sale has been received and applied by Bank (as reflected on the Bank’s books and records), all pursuant to the terms of this Agreement; (b) for which the Participation Interest in such Mortgage Loan has been subsequently repurchased in its entirety by Seller from Bank and the full amount of the Repurchase Price for such repurchase has been received and applied by Bank (as reflected on the Bank’s books and records), all pursuant to the terms of this Agreement; or (c) for which the entire principal balance and all accrued interest for such Mortgage Loan has been subsequently paid in full by the related Borrower, and Bank’s pro rata share of such amounts (determined in accordance with Bank’s Participation Percentage and the Participation Interest Rate in effect from time to time with respect to such Mortgage Loan) have been received and applied by Bank (as reflected on the Bank’s books and records), all pursuant to the terms of this Agreement.
“Security Instrument” shall mean, with respect to any Mortgage Loan, a full recourse mortgage or deed of trust securing such Mortgage Loan and granting a perfected first priority lien on the Residential Real Property related thereto.
“Securitizer” shall mean any Person, approved in advance by Bank in its sole and absolute discretion, who or which purchases or agrees to purchase any Participated Mortgage Loan from Seller and Bank pursuant to a Securitizer Loan Purchase Agreement in connection with the securitization of a pool of mortgage loans.
“Securitizer Loan Purchase Agreement” shall mean, with respect to any Participated Mortgage Loan to be sold by Seller and Bank to a Securitizer, a current, valid, binding and enforceable mortgage loan purchase and sale agreement and/or other written agreement between the Securitizer and Seller regarding the sale of mortgage loans by Seller to, and purchase by, the Securitizer in connection with the securitization of a pool of residential mortgage loans, which Securitizer Loan Purchase Agreement provides for a purchase price to be paid by the Securitizer of not less than the Take-Out Purchase Price for such Participated Mortgage Loan and which is otherwise on terms and in such form and content acceptable to Bank in its sole and absolute discretion.
“Seller’s Funding Amount” shall mean, with respect to any Participated Mortgage Loan and the related Mortgage Loan Transaction, the total amount to be paid by Seller (through sources other than an Advance) in connection with such Mortgage Loan Transaction, which Seller’s Funding Amount shall be equal to the Total Funding Amount for such Participated Mortgage Loan less the Purchase Price for the Participation Interest therein.
“Seller Originated Mortgage Loan” shall mean any Mortgage Loan: (a) originated by Seller and closed in the name of Seller as lender; and (b) with respect to which Seller is (or shall be upon the closing thereof) the holder of the Mortgage Note for such Mortgage Loan and otherwise owns all rights, titles and interests in and to such Mortgage Loan.
“Take-Out Purchase Agreement” shall mean any Investor Loan Purchase Agreement or Securitizer Loan Purchase Agreement.
“Take-Out Purchase Price” shall mean, with respect to any Participated Mortgage Loan to be sold by Seller and Bank to a Take-Out Purchaser pursuant to a Take-Out Purchase Agreement, an amount which is not less than: (a) as of the date of such sale, the outstanding principal balance of such Mortgage Loan plus any and all accrued and unpaid interest thereon; or (b) such other
amount approved by Bank as confirmed in writing by Bank to Seller prior to such sale.
“Take-Out Purchaser” shall mean any Securitizer or any Investor approved in advance by Bank in its sole and absolute discretion for the purchase of a Mortgage Loan from Seller and Bank.
“Title Policy” shall mean, with respect to any Participated Mortgage Loan, a title insurance policy relating to such Participated Mortgage Loan, in such form acceptable to Bank, which title insurance policy: (a) is issued by a nationally recognized title insurance company acceptable to Bank; (b) provides insurance to the lender named therein, and such lender’s successors and assigns, in the full amount of such Participated Mortgage Loan and insures that that the lien of the Security Instrument for such Participated Mortgage Loan is a first and prior lien upon the related Mortgaged Property, without any exceptions, except for Permitted Encumbrances; (c) includes such endorsements thereto which are consistent with Accepted Lending Practices; and (d) satisfies the requirements (if any) of the Warehouse Program Guide.
“Total Funding Amount” shall mean, with respect to any Participated Mortgage Loan and the related Mortgage Loan Transaction, the total amount to be paid by Seller in connection with such Mortgage Loan Transaction (including amounts to be provided on behalf of Seller by Bank through the making of an Advance for the purchase of a Participation Interest in such Participated Mortgage Loan), as set forth in the related Request.
“UCC” shall mean the Uniform Commercial Code of the State of Texas or other applicable jurisdiction, as it may be amended from time to time.
“USDA” shall mean the United States Department of Agriculture, or its successor.
“VA” shall mean the United States Department of Veterans Affairs, or its successor.
“Warehouse Documents” shall mean this Agreement, the Blanket Assignment, the Pledge Agreement and any and all other agreements, instruments and documents evidencing, securing or pertaining to Bank’s discretionary purchase of Participation Interests in Mortgage Loans from Seller hereunder, as shall from time to time be executed and delivered to Bank by Seller, pursuant to or in connection with this Agreement or the transactions contemplated hereby, including each addendum to this Agreement (if any) executed by Bank and Seller, any future amendments hereto, or restatements hereof, together with any and all renewals, extensions, and restatements of, and amendments and modifications to, any such agreements, documents and instruments.
“Warehouse Program Guide” shall mean, collectively, the “Warehouse Lending Program Guide” issued by Bank and made available to Seller pursuant to the provisions of this Agreement, as amended, modified or supplemented from time to time by Bank, and including any notices or bulletins issued by Bank concerning the guidelines, procedures and requirements for the transactions contemplated by this Agreement.
1.3 Other Defined Terms. In addition to the terms defined in Section 1.1 and Section 1.2, as used in this Agreement, other capitalized terms contained in this Agreement shall have the meanings assigned to them.
1.4 Other Definitional Provisions.
(a)
All terms defined in this Agreement shall have the herein defined meanings when used in any document, certificate, report or other document, instrument, or writing made or delivered pursuant to this Agreement or any other Warehouse Document, unless the context therein shall otherwise require.
(b)
Words used herein in the singular, where the context so permits, shall be deemed to include the plural and vice versa. The definitions of words in the singular herein shall apply to such words when used in the plural where the context so permits and vice versa.
(c)
The words “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” when used in this Agreement shall refer to the entire Agreement and not to any particular provision or section; and the word “including,” as used herein, shall mean “including, without limitation.”
(d)
All references herein to “Articles” and “Sections” are, unless specified otherwise, references to articles and sections of this Agreement. All references herein to an “Exhibit,” “Schedule” or “Addendum” are references to exhibits, schedules or addenda attached hereto, all of which are made a part hereof for all purposes, the same as if set forth herein verbatim, it being understood that if any exhibit, schedule or addendum attached hereto, which is to be executed and delivered, contains blanks, the same shall be completed correctly and in accordance with the terms and provisions contained and as contemplated herein prior to or at the time of the execution and delivery thereof.
ARTICLE 2
PURCHASE OF PARTICIPATION INTERESTS
2.1 Request for Purchase.
(a)
At any time prior to the Advance Request Termination Date, Seller may submit a Request to Bank for Bank to purchase a Participation Interest in one or more Eligible Mortgage Loans from Seller hereunder by delivering or causing to be delivered to Bank, by electronic data submission or in such other manner, as may be required by Bank from time to time, the information and other items for such Eligible Mortgage Loans required by Bank pursuant to the Warehouse Program Guide.
(b)
To assist Bank in making its decision whether to purchase a Participation Interest in any particular Eligible Mortgage Loan, Seller will timely provide Bank or Bank’s agents with the information and other items for such Eligible Mortgage Loan required by Bank pursuant to the Warehouse Program Guide.
(c)
Each submission of a Request shall be deemed to constitute a representation and warranty by Seller to Bank on the date of such Request and on the date of an Advance made by Bank to purchase a Participation Interest in any Mortgage Loan in connection with such Request that: (i) such Request relates to an Eligible Mortgage Loan; and (ii) the information and materials submitted to Bank in connection with such Mortgage Loan and such Request are true, correct and complete in all respects.
(d)
Each submission of a Request shall constitute Seller’s agreement and reaffirmation of the terms of the Blanket Assignment, such that, if Bank elects to purchase from Seller a Participation Interest in the Mortgage Loan referenced in such Request, then effective upon payment by Bank to Seller of the Purchase Price for such Participation Interest pursuant to
the terms of this Agreement, Seller shall have (and shall be conclusively deemed to have) irrevocably and unconditionally sold, transferred, assigned and conveyed to Bank, and Bank shall have (and shall be conclusively deemed to have) purchased and accepted from Seller, all of Seller’s rights, titles, and interests in, to and under such Participation Interest in such Mortgage Loan and the related Mortgage Loan Documents, and such sale, transfer, assignment and conveyance shall be evidenced by the Blanket Assignment (including the Schedule thereto which shall be updated and maintained by Bank, and which Seller hereby confirms and accepts, and shall be conclusive absent manifest error conclusively established by Seller).
2.2 Decision to Purchase. Each decision of Bank whether to purchase any Participation Interest in any Mortgage Loan from Seller hereunder shall be made by Bank in its sole and absolute discretion. Bank shall be under no obligation hereunder to purchase any Participation Interest in any Mortgage Loan nor shall Bank have any obligation hereunder to purchase any minimum amount of Participation Interests in Mortgage Loans. In each instance where a Request is submitted to Bank, Bank will make an independent decision whether to purchase a Participation Interest in any Mortgage Loan contemplated by the Request. Bank may decline to purchase any Participation Interest in any Mortgage Loan for any reason or for no reason whatsoever. The election of Bank to purchase a Participation Interest in any Mortgage Loan shall be evidenced by the making of an Advance by Bank for the payment of the Purchase Price related thereto. If for any reason whatsoever Bank fails to make an Advance for the payment of the Purchase Price for a Participation Interest in any Mortgage Loan, then it shall be conclusive evidence of Bank’s election not to purchase a Participation Interest in such Mortgage Loan.
2.3 Conditions to Each Purchase. As a condition precedent to any purchase of a Participation Interest by Bank from Seller hereunder, in addition to all other requirements set forth herein, Seller shall deliver to Bank all of the following, each being duly executed, endorsed, notarized where applicable and delivered and in form and content satisfactory to Bank in its sole and absolute discretion:
(a)
The information and other items required to be delivered to Bank pursuant to Section 2.1;
(b)
If requested by Bank, a written certification from Seller to Bank that the representations and warranties of Seller contained in this Agreement and each other Warehouse Document (other than those representations and warranties which are, by their terms, expressly limited to the date of the agreement in which they were initially made) are true and correct in all material respects on and as of the date of such purchase;
(c)
If requested by Bank, a written certification from Seller that no Event of Default has occurred or is continuing as of the date of the Advance;
(d)
Seller has adequate available funds on deposit in the Participation Account in an amount not less than Seller’s Funding Amount for such Mortgage Loan; and
(e)
Such other documents as Bank may reasonably request at any time at or prior to the date of the first Advance hereunder or as a condition to any subsequent Advance hereunder, including any and each Pledge Agreement required by Bank to be executed in connection with the transactions contemplated by this Agreement.
Each submission of a Request shall be deemed to constitute a representation and warranty by Seller to Bank on the date of such Request and on the date of the applicable Advance made to purchase a Participation Interest in connection with such Request as to the facts and statements specified in clauses (a), (b), (c) and (d) immediately above and in Sections 5.1(e), (g) and (h) are true and correct. It is
understood and agreed that Bank shall not make any Advance for the Purchase Price of any Participation Interest unless with respect thereto Bank is in receipt of all agreements and documents required to be delivered to Bank under this Agreement and all other conditions precedent and requirements set forth herein are satisfied or waived by Bank in writing.
All conditions precedent hereunder to the purchase of a Participation Interest are solely for the benefit of Bank. Bank’s election, in its sole discretion, to waive any condition precedent hereunder for the purchase of any Participation Interest shall not constitute a waiver of the satisfaction of such condition precedent for any subsequent purchase of any other Participation Interest. No such condition precedent shall be deemed waived unless waived in writing by Bank.
2.4 Funding of Mortgage Loan Transactions; Purchase of Participation Interests. With respect to each Participated Mortgage Loan, Bank and Seller agree that:
(a)
Bank shall (and is authorized to) debit funds from the Participation Account in an amount equal to Seller’s Funding Amount for such Participated Mortgage Loan and deliver on behalf of Seller by wire transfer such funds directly to the account of the Funding Recipient designated in the related Request (provided, however, if such Funding Recipient is an Escrow Agent, then such account shall be an escrow account) or deliver such funds on behalf of Seller to such Funding Recipient in any other manner acceptable to Bank. Bank shall not make an Advance for the purchase of a Participation Interest in any Mortgage Loan unless Seller has good funds on deposit in the Participation Account in an amount not less than Seller’s Funding Amount for such Mortgage Loan;
(b)
As payment by Bank to Seller for the purchase of a Participation Interest in such Participated Mortgage Loan, Bank shall make an Advance in an amount equal to the related Purchase Price. Seller hereby irrevocably and unconditionally instructs Bank, with respect to any such Advance, to deliver by wire transfer the proceeds of such Advance on behalf of Seller directly to the account of the Funding Recipient designated in the related Request or to deliver such proceeds on behalf of Seller to such Funding Recipient in any other manner acceptable to Bank; and
(c)
Upon the making of an Advance by Bank to or on behalf of Seller for the purchase of a Participation Interest in such Participated Mortgage Loan as described above in this Section: (i) Bank shall immediately have purchased such Participation Interest from Seller, and shall immediately have become fully vested with, an undivided percentage ownership interest in all of Seller’s rights, titles and interests in and to such Participated Mortgage Loan and the related Mortgage Loan Documents, which undivided percentage ownership interest shall equal the Participation Percentage for such Participated Mortgage Loan; and (ii) Seller shall immediately make proper entries on its books and records disclosing the absolute sale by Seller to Bank of such Participation Interest in such Participated Mortgage Loan and the related Mortgage Loan Documents. The purchase and sale of a Participation Interest in any Participated Mortgage Loan hereunder shall be conclusively established by the making of an Advance by Bank for the Purchase Price for such Participation Interest as and in the manner provided in this Section and shall be evidenced by the Blanket Assignment.
2.5 Failure to Complete Mortgage Loan Transaction. Each Advance made by Bank to purchase a Participation Interest from Seller in a Mortgage Loan is intended by Bank and Seller to be made in connection with a Mortgage Loan Transaction, which Mortgage Loan Transaction is to occur on or about the date on which the related Request for such Advance is submitted by Seller to Bank for Bank to purchase a Participation Interest in such Mortgage Loan or on such date otherwise specified in such
Request. With respect to any Mortgage Loan for which Seller has submitted a Request to Bank for Bank to purchase a Participation Interest therein, if the Mortgage Loan Transaction related thereto is not expected by Seller to occur or fails to occur within two (2) days of such Request then Seller shall immediately provide notice thereof to Bank. Should the Mortgage Loan Transaction related to any Mortgage Loan not be expected by Seller to occur or fail to occur within two (2) days of the Request to Bank for Bank to purchase a Participation Interest therein and Bank shall have delivered on behalf of Seller to the related Funding Recipient the proceeds of the Advance for the purchase by Bank of such Participation Interest, then: (a) the proceeds of such Advance shall immediately be returned directly to Bank and Bank may instruct such Funding Recipient to immediately return such proceeds directly to Bank; and (b) Seller shall (i) immediately instruct and cause such Funding Recipient to return the proceeds of such Advance directly to Bank and (ii) cooperate with Bank to effect the immediate return of the proceeds of such Advance directly to Bank and, at the request of Bank, take such actions and do such things deemed necessary or appropriate by Bank to effect the immediate return directly to Bank of the proceeds of such Advance.
2.6 Funding Fee. Seller shall pay to Bank a Funding Fee for each Participated Mortgage Loan as compensation for Bank’s costs and expenses incurred in connection with underwriting and processing its purchase of the Participation Interest in such Participated Mortgage Loan and administering such Participation Interest hereunder. The Funding Fee with respect to any Participated Mortgage Loan shall be: (a) earned in full by Bank on the related Purchase Date; and (b) payable to Bank by Seller upon the earlier to occur of the date on which: (i) all or any portion of the related Participation Interest is to be repurchased by Seller from Bank as contemplated by and in accordance with the terms of this Agreement; (ii) such Participated Mortgage Loan is sold to a Take-Out Purchaser as contemplated by and in accordance with the terms of this Agreement; or (iii) the entire principal balance of such Participated Mortgage Loan has been paid in full by the related Borrower.
2.7 Maximum Participation Amount. Notwithstanding anything to the contrary contained herein, Bank shall not purchase and hold, at any one time, Participation Interests such that the Outstanding Participation Balance exceeds the Maximum Participation Amount; provided, however, that Bank may, in its sole and absolute discretion, elect to temporarily increase the Maximum Participation Amount upon written notice to Seller pursuant to Section 2.8. Nothing contained in this Section shall limit, impair or affect the provisions of Section 2.2.
2.8 Overline Facility Increases. Upon Seller’s request from time to time, Bank may, in its sole and absolute discretion, elect to temporarily increase the amount of the Maximum Participation Amount (each, an “Overline Facility Increase”) by providing written notice thereof to Seller (each, an “Overline Confirmation”). Each Overline Confirmation shall set forth the terms on which Bank agrees to temporarily increase the Maximum Participation Amount, including: (a) the amount to which the Maximum Participation Amount will be temporarily increased; (b) the date on which such temporary increase in the Maximum Participation Amount shall commence and terminate (the “Overline Period”); and (c) the amount to which the Minimum Pledged Balance shall be increased in connection with such Overline Facility Increase. As a condition precedent to the effectiveness of any Overline Facility Increase, Seller shall deposit into the Pledged Account good funds in such amount required in order to maintain therein the Minimum Pledged Balance set forth in the related Overline Confirmation. During any Overline Period, the Maximum Participation Amount and Minimum Pledged Balance shall equal the respective amounts set forth on the Overline Confirmation and, upon the expiration of the Overline Period, the Maximum Participation Amount and Minimum Pledged Balance shall automatically be reduced to the respective amounts in effect prior to the commencement of any Overline Period.
2.9 Client-to-Client Funding. If Seller submits a Request to Bank for Bank to purchase a Participation Interest in a Mortgage Loan from Seller hereunder to pay off a Mortgage Loan in which
Bank already holds an ownership interest pursuant to a separate agreement with a different mortgage company (each, a “Client-to-Client Funding”), then Seller: (a) shall provide any and all documents and information Bank requests regarding or related to such Participation Interest representing the Client-to-Client Funding; and (b) acknowledges and agrees that, without limiting any other provision in this Article 2 relating to the purchase of such Participation Interest, any such Client-to-Client Funding shall be conditioned upon the timely satisfaction of all other conditions Bank may in its sole and absolute discretion determine to be necessary or appropriate, including the consent of the original mortgage company to the Client-to-Client Funding and Bank’s agreement to the application of the funds advanced under the Client-to-Client Funding.
ARTICLE 3
DELIVERY OF BANK DOCUMENT DELIVERABLES
3.1 Documents to be Delivered to the Document Custodian After an Advance. Subject to Sections 3.2 and 3.3, within five (5) Business Days after the Purchase Date for any Participated Mortgage Loan, Seller shall deliver or cause to be delivered to the Document Custodian all of the Bank Document Deliverables for such Participated Mortgage Loan. Bank reserves the right to require copies of any of the Bank Document Deliverables for review prior to making any Advance for the purchase of a Participation Interest in any specific Mortgage Loan.
3.2 Procedure for Delivery of Bank Document Deliverables. Seller shall cause the Bank Document Deliverables for each Participated Mortgage Loan to be: (i) delivered directly to Seller (and, in the event that the applicable Funding Recipient for such Participated Mortgage Loan is or is required hereunder to be an Escrow Agent, such Bank Document Deliverables shall be delivered directly to Seller from escrow by the Escrow Agent for such Participated Mortgage Loan); and (ii) thereafter, delivered directly to the Document Custodian by Seller within five (5) Business Days after the Purchase Date for such Participated Mortgage Loan, unless otherwise expressly provided by Bank in writing to Seller with respect to such Participated Mortgage Loan (it being understood that any such writing from Bank shall only apply to the specific Participated Mortgage Loan referenced therein). Seller acknowledges and agrees that the foregoing arrangement (which allows for Seller, subject to Subsection (c) of this Section, to directly deliver to the Document Custodian the Bank Document Deliverables within five (5) Business Days after the Purchase Date for the related Participated Mortgage Loan) is being made as an accommodation to Seller and that Bank may, in its sole discretion, by providing written notice to Seller: (i) terminate Seller’s authorization to deliver directly to the Document Custodian any or all of the Bank Document Deliverables; and (ii) require that within (2) two Business Days after the Purchase Date for any Participated Mortgage Loan, any or all Bank Document Deliverables shall be delivered directly to the Document Custodian (and, in the event that the applicable Funding Recipient for such Participated Mortgage Loan is or is required hereunder to be an Escrow Agent, such Bank Document Deliverables shall be delivered directly to the Document Custodian from escrow by the Escrow Agent for such Participated Mortgage Loan).
3.3 Bank Document Deliverables Held By Seller. Without limiting the requirements set forth in Section 3.2, Seller acknowledges and agrees that each and every Bank Document Deliverable for any Participated Mortgage Loan which is at any time in the custody, possession or control of Seller after Bank’s purchase of a Participation Interest in such Participated Mortgage Loan shall be held and delivered to the Document Custodian pursuant to the terms and conditions of Section 5.11 of the Warehouse Agreement. Nothing contained in this Section authorizes or permits the delivery to Seller or any other Person (other than the Document Custodian) of any of the Bank Document Deliverables which are required to be delivered directly to the Document Custodian pursuant to the provisions of this Section.
ARTICLE 4
SALE OF LOANS TO TAKE-OUT PURCHASERS;
AGED LOANS; REPURCHASE OBLIGATIONS
4.1 Short Term Nature of Investment.
(a)
It is understood that each Participation Interest which Bank purchases in any Mortgage Loan shall be purchased by Bank for its own account for the short term investment of its capital and in reliance of Seller’s agreement hereunder that: (i) Seller shall arrange and complete the sale by and on behalf of the Parties of the related Participated Mortgage Loan as and when required pursuant to the terms of this Agreement; or (ii) repurchase all or any portion of such Participation Interest as and when required pursuant to the terms of this Agreement, if such sale is not arranged and completed by Seller as and when required pursuant to the terms of this Agreement. In order to secure the prompt and complete performance by Seller of its Repurchase/Sale Obligations, Seller does hereby pledge, assign and grant to Bank a continuing security interest in and to the Collateral. For this purpose, this Agreement shall constitute a security agreement in accordance with the UCC, and Bank shall have all the rights of a secured creditor with respect to such security.
(b)
For each Participated Mortgage Loan, it is the intention of Bank and Seller that such Participated Mortgage Loan and the related Mortgage Loan Documents will be sold and delivered to a Take-Out Purchaser, and for such Take-Out Purchaser to have paid the full amount of the Take-Out Purchase Price for such Participated Mortgage Loan, within thirty (30) days of the Purchase Date for such Participated Mortgage Loan. Notwithstanding the foregoing, it is understood and agreed that Bank shall not have and does not undertake any duty, obligation or liability arising from or related to any Take-Out Purchase Agreement or any Take-Out Purchaser.
4.2 Sale of Participated Mortgage Loans to Take-Out Purchasers.
(a)
The sale of each Participated Mortgage Loan by Seller and Bank to any Take-Out Purchaser shall be in accordance with the terms of the related Take-Out Purchase Agreement. If a Take-Out Purchaser fails to perform or anticipatorily breaches its obligations under a Take-Out Purchase Agreement to purchase any Participated Mortgage Loan, then Seller shall promptly locate and consummate the sale by Bank and Seller of such Participated Mortgage Loan to another Take-Out Purchaser acceptable to Bank at a price which is not less than the Take-Out Purchase Price for such Participated Mortgage Loan; provided, however, that the foregoing shall not limit or qualify any other rights or remedies available to Bank hereunder with respect to such Participated Mortgage Loan or any Participation Interest therein.
(b)
Notwithstanding anything to the contrary in any Take-Out Purchase Agreement, the procedures of sale to a Take-Out Purchaser by Seller and Bank of any Participated Mortgage Loan shall be as follows:
(i)
Seller shall deliver to the Take-Out Purchaser the Mortgage Loan Documents for such Participated Mortgage Loan (other than the related Mortgage Note and other Mortgage Loan Documents, if any, which are then being held by the Document Custodian). Such Mortgage Loan Documents shall be delivered by Seller to the Take-Out Purchaser under the provisions of the Take-Out Purchase Agreement which govern the Take-Out Purchaser’s custody and possession of such Mortgage Loan Documents or under such other written custodial or similar agreement between Seller and the Take-Out
Purchaser acceptable to Bank. Seller shall provide prompt written notice to Bank of the transmittal and delivery of such Mortgage Loan Documents to the Take-Out Purchaser.
(ii)
Bank shall deliver or cause to be delivered to the Take-Out Purchaser, under a Bailee Letter, the Mortgage Loan Documents for such Participated Mortgage Loan which are then held by the Document Custodian pursuant to this Agreement, including the original Mortgage Note for such Participated Mortgage Loan accompanied by: (A) the Required Endorsements; and (B) if such Mortgage Note was not endorsed in blank by Seller, an allonge endorsed in favor of such Take-Out Purchaser by Bank, as agent for Seller, pursuant to (and if and to the extent that Bank shall have received and accepted) a valid power of attorney, in form and content satisfactory to Bank, authorizing Bank to endorse such Mortgage Note for and on behalf of Seller.
(c)
Within a period of time acceptable to Bank, but in no event more than twenty (20) days after the delivery by the Document Custodian to the Take-Out Purchaser of the Mortgage Note evidencing such Participated Mortgage Loan, Seller shall cause the Take-Out Purchaser to pay or cause to be paid directly to Bank, as payment to Seller and Bank for the purchase by the Take-Out Purchaser of such Participated Mortgage Loan, immediately available funds in an amount not less than the Take-Out Purchase Price for such Participated Mortgage Loan.
(d)
All of the proceeds from the sale by Seller and Bank of a Participated Mortgage Loan to a Take-Out Purchaser shall be paid directly to Bank pursuant to Section 4.3 and shall be applied by Bank on behalf of Bank and Seller in accordance with Section 4.4.
(e)
Subject to Section 4.4(b), Bank and Seller’s ownership interests in any Participated Mortgage Loan to be sold to a Take-Out Purchaser shall continue in full force and effect, and Bank and Seller shall not have (and shall not be deemed to have) sold such Participated Mortgage Loan to a Take-Out Purchaser unless and until such time as Bank shall have received immediately available funds from the Take-Out Purchaser for such sale in an amount not less than the Take-Out Purchase Price for such Participated Mortgage Loan and applied such funds in accordance with Section 5.12.
4.3 Payments From Take-Out Purchasers. In connection with each sale of a Participated Mortgage Loan by Seller and Bank to a Take-Out Purchaser, Seller shall cause the Take-Out Purchase Price to be paid by the Take-Out Purchaser for the purchase of the Participated Mortgage Loan to be paid by the Take-Out Purchaser, in immediately available funds, directly to Bank into the Repayment Account.
4.4 Processing Payments From Take-Out Purchasers. With respect to any immediately available funds on deposit in the Repayment Account which constitute the proceeds of any Take-Out Purchase Price (each a “Take-Out Purchaser Payment”):
(a)
Seller shall promptly confirm to Bank the Participated Mortgage Loan to which such Take-Out Purchaser Payment applies; provided, however, that if Seller shall not have provided such confirmation to Bank by the last Business Day of the calendar month in which Bank provided notice to Seller of the Take-Out Purchaser Payment, then Bank may, in its sole discretion, determine and designate the Participated Mortgage Loan to which such Take-Out Purchaser Payment applies to the extent Bank is able to make such a determination based on information available to it;
(b)
Bank reserves the right, in its sole discretion, to determine whether to accept or reject such Take-Out Purchaser Payment in the event that insufficient funds were delivered by the Take-Out Purchaser to Bank to fully pay the Take-Out Purchase Price for the Participated Mortgage Loan to which the Take-Out Purchaser Payment applies. Seller acknowledges and agrees that: (i) if Bank elects, in its sole discretion, to reject a Take-Out Purchaser Payment for which insufficient funds were delivered, then Bank’s related Participation Interest shall not have been sold (and shall be deemed to not have been sold) to such Take-Out Purchaser, and Seller shall immediately notify such Take-Out Purchaser that no sale of such Participated Mortgage Loan by Bank and Seller to such Take-Out Purchaser has occurred; and (ii) if Bank elects, in its sole discretion, not to reject a Take-Out Purchaser Payment for which insufficient funds were delivered, then Bank shall have the right to offset any amounts in any Account in order to effect full payment of Bank’s share of such Take-Out Purchase Price; and
(c)
If such Take-Out Purchaser Payment is accepted by Bank, the proceeds of the Take-Out Purchaser Payment shall be applied by Bank pursuant to Section 5.12.
All notices to be given and actions to be taken pursuant to this Section shall be effectuated electronically or in such other manner, as required by Bank from time to time pursuant to the Warehouse Program Guide.
4.5 Reserved.
4.6 Participation Interest Rate for Aged Participated Mortgage Loans.
(a)
With respect to any Aged Participated Mortgage Loan, to the extent permitted by applicable Law, Bank may from time to time, in its sole discretion, increase the then-current Participation Interest Rate with respect to such Aged Participated Mortgage Loan by an amount, as determined by Bank, in accordance with the following:
Number of days elapsed since the
Purchase Date for the Participation Interest in the Aged Participated Mortgage Loan |
Maximum aggregate
total
amount by which Bank may increase the applicable Participation Interest Rate pursuant to this Section |
Date on which
the
increase (if any) in the Participation Interest Rate is effective |
60 days or more |
[***] |
60th day following the Purchase Date of the Participation Interest |
(b)
Notwithstanding anything herein to the contrary, the Participation Interest Rate for any Participated Mortgage Loan shall not at any time exceed the maximum rate permitted under applicable Law.
(c)
The provisions of this Section shall not limit or qualify any rights or remedies of Bank hereunder (including, without limitation, any rights or remedies of Bank under Sections 4.7 or 4.8).
[Remainder of Page Intentionally Left Blank]
4.7
Curtailment of Aged Participated Mortgage Loans.
(a)
With respect to any Aged Participated Mortgage Loan, to the extent permitted by applicable Law, Bank may from time to time, in its sole and absolute discretion, require Seller to repurchase from Bank any portion of the Participation Interest then owned by Bank in such Aged Participated Mortgage Loan, as determined by Bank, in accordance with the following table:
Number of days elapsed since the Purchase Date for the Participation Interest in the Aged Participated Mortgage Loan |
Maximum aggregate total portion of the Participation Percentage (as of the Purchase Date for the related Participation Interest) in the applicable Aged Participated Mortgage Loan which Bank may require to be repurchased by Seller pursuant to this Section
|
60 days or more but less than 90 days | [***] |
(b)
To effect the repurchase by Seller from Bank of any portion of a Participation Interest required by Bank to be repurchased under this Section, Seller shall pay to Bank an amount equal to the applicable Repurchase Price for such portion of such Participation Interest, which amount shall be due and payable upon any demand therefor made by Bank pursuant to the terms of this Section. Bank shall have the right to offset any amounts in the Pledged Account in order to effect full payment of any Repurchase Price when due and payable under this Section, and upon any such offset, Seller shall immediately deposit funds into the Pledged Account in the amount required to fully restore the Minimum Pledged Balance.
(c)
Upon Bank’s receipt from Seller of the full amount of the Repurchase Price for the portion of the Participation Interest in any Aged Participated Mortgage Loan required to be repurchased by Seller from Bank pursuant to this Section, effective as of the date of receipt of such funds and the application by Bank of such funds pursuant to the terms of this Agreement, Seller shall have repurchased from Bank such portion of such Participation Interest equal to the Repurchase Participation Percentage for such Participation Interest, and Bank’s respective Participation Percentage in such Aged Participated Mortgage Loan and Seller’s respective Retained Percentage in such Aged Participated Mortgage Loan shall be correspondingly adjusted, all as indicated on the Bank’s books and records.
(d)
The provisions of this Section shall not limit or qualify any rights or remedies of Bank hereunder (including, without limitation, any rights or remedies of Bank under Sections 4.6 or 4.8).
4.8
Full Repurchase of Participation Interests.
(a)
With respect to any specific Participated Mortgage Loan, Bank shall have the right to require Seller, upon demand by Bank, to repurchase from Bank, in its entirety, all of Bank’s then-outstanding Participation Interest in such Participated Mortgage Loan, if Bank reasonably determines at any time, that: (i) any representation or warranty made or deemed made by Seller to Bank under Sections 2.1 or 6.10 as to such Participated Mortgage Loan was false, misleading, or erroneous in any respect at the time on or as of the Purchase Date for such Participated Mortgage Loan; (ii) such Participated Mortgage Loan was not an Eligible Mortgage Loan on or as of the Purchase Date for such Participated Mortgage Loan or no longer qualifies as an Eligible Mortgage Loan anytime thereafter; (iii) any Mortgage Loan Document related to such Participated Mortgage Loan was erroneous, unsigned or incomplete in any material respect on the
Purchase Date for such Participated Mortgage Loan and such error, lack of signature or incompleteness has not been corrected to the reasonable satisfaction of Bank within a commercially reasonable time period following such Purchase Date; (iv) any fraud occurred on the part of Seller or its agents or employees or of Borrower or any other Person with respect to the origination, underwriting, closing or funding of such Mortgage Loan; or (v) any of the Bank Document Deliverables for such Participated Mortgage Loan have not been delivered to the Document Custodian as and when required pursuant to the provisions of this Agreement. In addition, if an Event of Default shall have occurred, Bank shall have the right to require Seller, upon demand by Bank, to repurchase from Bank, in their entirety, all of Bank’s then-outstanding Participation Interests in the Participated Mortgage Loans identified in such demand.
(b)
In Bank’s sole and absolute discretion, Seller shall automatically be required to immediately repurchase from Bank, in its entirety, all of Bank’s then-outstanding Participation Interest in any Aged Participated Mortgage Loan on the ninetieth (90th) day after the Purchase Date for such Participation Interest if such Aged Participated Mortgage Loan does not constitute a Retired Participated Mortgage Loan by such ninetieth (90th) day. In addition, Seller shall automatically be required, whether or not Bank has made demand therefor, to immediately repurchase from Bank, in their entirety, all of Bank’s then-outstanding Participation Interests in any and all Participated Mortgage Loan upon the occurrence of an Event of Default under Sections 9.1(e) or (f) with respect to Seller.
(c)
To effect the repurchase of any Participation Interest required under this Section, Seller shall pay to Bank an amount equal to the applicable Repurchase Price for such Participation Interest, which amount shall be due and payable: (i) on the date Bank has made demand for the repurchase of such Participation Interest, if such repurchase is required pursuant to Section 4.8(a); or (ii) on the ninetieth (90th) day after the Purchase Date for such Participation Interest, if such repurchase is required pursuant to Section 4.8(b). Bank shall have the right to offset any amounts in the Pledged Account in order to effect full payment of any Repurchase Price when due and payable under this Section, and upon any such offset, Seller shall immediately deposit funds into the Pledged Account in the amount required to fully restore the Minimum Pledged Balance.
(d)
Upon Bank’s receipt from Seller of the full amount of the Repurchase Price for the Participation Interest in any Participated Mortgage Loan to be repurchased in its entirety by Seller from Bank pursuant to this Section, and so long as such payment is not disgorged or revoked by a court of competent jurisdiction: (i) effective as of the date of receipt of such funds and the application by Bank of such funds pursuant to the terms of this Agreement, Seller shall have repurchased from Bank such Participation Interest in its entirety, and Bank’s respective Participation Percentage in such Participated Mortgage Loan and Seller’s respective Retained Percentage in such Participated Mortgage Loan shall be correspondingly adjusted, all as indicated on the Bank’s books and records; and (ii) Bank shall thereafter deliver or cause to be delivered to Seller the Mortgage Note and any other Mortgage Loan Documents for such Participated Mortgage Loan then in the Document Custodian’s possession.
(e)
The provisions of this Section shall not limit or qualify any rights or remedies of Bank hereunder (including, without limitation, any rights or remedies of Bank under Sections 4.6 or 4.7).
4.9 Bank’s Direct Contact with Take-Out Purchasers. Seller irrevocably authorizes Bank and its agents and representatives to directly deliver all pertinent documentation to, and communicate with, disclose to, receive from and share information with, any Take-Out Purchaser, which is related to
any Participated Mortgage Loan which is to be purchased or has been purchased by such Take-Out Purchaser.
ARTICLE 5
GENERAL PROVISIONS
5.1 Conditions to Effectiveness of Agreement. As a condition precedent to effectiveness of this Agreement, in addition to all other requirements set forth herein, Seller shall deliver to Bank all of the following, each being duly executed, endorsed, notarized where applicable and delivered and in form and content satisfactory to Bank in its sole and absolute discretion:
(a)
This Agreement, the Blanket Assignment, and the Pledge Agreement;
(b)
One (1) or more limited power of attorney in the form of Exhibit A executed by Seller;
(c)
All financing statements required by Bank, including a UCC-1 financing statement identifying Seller, as debtor, and Bank, as secured party, which covers the Collateral, and Seller hereby authorizes Bank and its representatives to execute, deliver and file of record all such financing statements;
(d)
Such signature cards, depository account agreements, USA PATRIOT Act forms and information, and such other documents and instruments, as Bank may require for Seller to establish at Bank, the Pledged Account, the Participation Account and the Remittance Account or to otherwise implement the arrangements contemplated herein;
(e)
Evidence that all necessary action on the part of Seller has been taken with respect to the execution and delivery of the Warehouse Documents and the performance of the matters contemplated thereby, so that this Agreement and all of the other Warehouse Documents shall be valid and binding upon each Person executing and delivering the same. Such evidence shall include certified organizational documents, certified resolutions, and certificates of incumbency for Seller and each other Obligated Party that is not a natural person;
(f)
For Seller, a copy, certified as true, complete and correct, by an authorized officer, partner, member, manager or other representative of such entity, of the documents evidencing the formation and governance of the operations and affairs of such entity, together with all amendments thereto;
(g)
For Seller, a certificate of existence and good standing showing that such entity is in good standing under the Laws of the state of its formation and certificates indicating that such entity has qualified to transact business and is in good standing in all other states where it transacts business;
(h)
Evidence that Seller has received any and all licenses, permits, approvals and other consents under any and all applicable Laws to permit Seller to lawfully engage in the Mortgage Loan Activities, and evidence that the same are currently in existence and good standing; and
(i)
Such other documents, information and materials as Bank may require to be delivered or caused to be delivered by Seller to Bank prior to the execution of this Agreement by Bank.
5.2
Termination; Burn-Down.
(a)
Seller’s rights hereunder to submit any Request to Bank shall automatically terminate on the Advance Request Termination Date.
(b)
Notwithstanding anything herein to the contrary, and without limiting Bank’s rights and remedies under Section 9.2, prior to the Advance Request Termination Date, either Party may immediately terminate for any reason whatsoever Seller’s rights hereunder to submit any Request to Bank to purchase a Participation Interest by providing written notice thereof to the other Party. It is understood that the Parties intend the continuation of this Agreement by Bank (and, accordingly, the continuation of Seller’s rights hereunder to submit any Request to Bank for Bank to purchase a Participation Interest) will be based upon the quality of the Mortgage Loans owned by Seller and Seller’s performance of its obligations in connection therewith and herewith and also based upon market conditions and the business objectives of Bank and Seller which may change from time to time.
(c)
Any and all outstanding Participation Interests in Participated Mortgage Loans owned by Bank on or before the Advance Request Termination Date shall continue to be subject to the terms and conditions of this Agreement. Unless extended by a written agreement executed by Seller and Bank, this Agreement shall automatically terminate and cease to be in force and effect (except with respect to the provisions of this Agreement which expressly survive termination) without any action or notice upon such time as: (i) Seller shall no longer have any rights hereunder to submit any Request to Bank to purchase a Participation Interest; (ii) each Participated Mortgage Loan constitutes a Retired Participated Mortgage Loan; (iii) Bank has received full, final and indefeasible payment of all other amounts due and payable by Seller to Bank pursuant to the terms hereof and any other Warehouse Document; (iv) Seller has fully performed and discharged each of its duties, covenants and obligations under each Warehouse Document; and (v) Bank has remitted to Seller all amounts, if any, required hereunder to be remitted by Bank to Seller hereunder.
5.3 Target Usage; Termination for Non-Usage. While pursuant to Section 2.2, Bank is not obligated to purchase, and Seller is not obligated to sell, any Participation Interests, or any minimum amount of Participation Interests, Bank and Seller contemplate that Seller shall sell, and Bank shall purchase, Participation Interests such that, at any given time, the Outstanding Participation Balance shall equal or exceed the Target Usage Amount. Should for any calendar quarter, the Outstanding Participation Balance, on average for such calendar quarter, not equal or exceed the Target Usage Amount, Bank may elect to increase the Participation Interest Rate Floor or, pursuant to Section 5.2(b), terminate Seller’s right hereunder to submit any Request to Bank to purchase a Participation Interest.
5.4 Seller’s Accounts.
(a)
Seller shall at all times during the term of this Agreement maintain each Restricted Account with Bank. With respect to each Restricted Account, Seller may deposit funds into the Restricted Account, however Seller shall not be permitted to withdraw, transfer or otherwise exercise any rights to access any funds held therein and Seller shall have no rights to exercise dominion or control over the Restricted Account.
(b)
Seller shall at all times during the term of this Agreement maintain the Remittance Account with Bank. Subject to the terms and conditions of this Agreement and the other Warehouse Documents, Seller shall be permitted to withdraw, transfer and otherwise exercise rights to access any funds held therein; provided, that notwithstanding the foregoing,
upon the occurrence of an Event of Default, Seller shall not be permitted to withdraw, transfer or otherwise exercise any rights to access any funds held therein and Seller shall have no rights to exercise dominion or control over the Remittance Account.
(c)
Concurrently with the execution hereof Seller shall deposit into the Pledged Account, and thereafter for the duration of this Agreement Seller shall maintain in the Pledged Account, good funds in an amount not less than the Minimum Pledged Balance. Seller shall replenish funds in the Pledged Account, such that the Pledged Account is fully restored to the Minimum Pledged Balance, in the event Bank shall offset or apply funds from the Pledged Account in accordance with the terms of this Agreement.
(d)
In order to secure the prompt and complete performance by Seller of its Repurchase/Sale Obligations, Seller does hereby pledge, assign and grant to Bank a continuing security interest in and to the Restricted Accounts, the Remittance Account and the other Collateral. For this purpose, this Agreement shall constitute a security agreement in accordance with the UCC, and Bank shall have all the rights of a secured creditor with respect to such security, and Bank shall have the right to hold and “freeze” such Accounts and the funds maintained therein upon the occurrence of an Event of Default. Without limiting any rights and remedies available to Bank hereunder, Bank may exercise the right to offset and apply all or any portion of the funds of Seller held in one or more of the Accounts towards the payment of all or any portion of any amount due and payable by Seller to Bank hereunder in connection with Seller’s Repurchase/Sale Obligations. Bank is hereby authorized to debit funds from the Accounts in accordance with the provisions of this Agreement without any notice to or permission from Seller.
5.5
Subordination. It is expressly understood and agreed that all of Seller’s rights, title and interests in and to any Participated Mortgage Loan (including Seller’s servicing rights, if any) are subordinate and inferior to Bank’s Participation Interest in such Participated Mortgage Loan, from and after the Purchase Date for such Participated Mortgage Loan.
5.6
Power of Attorney. Seller hereby irrevocably appoints Bank and each officer of Bank as its attorney-in-fact, with full power of substitution, for, on behalf of, and in the name of Seller, to: (a) endorse and deliver to any Person any notes, checks, drafts, money orders or other instruments of payment coming into Bank’s possession and representing any payment made on or with respect to any Participated Mortgage Loan or otherwise received in connection with any Participated Mortgage Loan (including the proceeds from the sale of any such Participated Mortgage Loan received from a Take-Out Purchaser), and any collateral and any Take-Out Purchase Agreement therefor; (b) prepare, complete, execute, deliver and record, and do anything else necessary or desirable to effect, (i) any endorsement to Bank, any Take-Out Purchaser or any other Person, of any Mortgage Note evidencing a Participated Mortgage Loan, or (ii) any transfer, assignment or conveyance to Bank, any Take-Out Purchaser or any other Person, of any or all rights, titles and interests in and to any Mortgage Note and the Mortgage Loan Documents related thereto in which Bank has purchased a Participation Interest (including servicing rights); (c) do anything necessary or desirable to effect the sale, transfer, assignment or conveyance, of any or all rights, titles and interests of Seller and/or Bank in and to any Participated Mortgage Loan and the related Mortgage Loan Documents related thereto to any Take-Out Purchaser or any other Person; (d) commence, prosecute, settle, discontinue, defend, or otherwise dispose of any claim relating to any Take- Out Purchase Agreement or any Participated Mortgage Loan; (e) sign Seller’s name wherever appropriate, as determined by Bank, to effectuate the purposes of this Agreement; and (f) to take any such further action as Bank may deem appropriate, and to act under changed circumstances, the exact nature of which may not be currently foreseen or foreseeable, in order to fully and completely effectuate Bank’s rights under this Agreement. The powers and authorities herein conferred on Bank may be exercised by Bank
through any Person who, at the time of the execution of a particular instrument, is an officer of Bank. The limited power of attorney conferred by this Section is granted for a valuable consideration and is coupled with an interest and, therefore, is irrevocable so long as any duties or obligations to Bank under this Agreement or any other Warehouse Document, or any part thereof, shall remain unpaid or otherwise unsatisfied, and so long as Bank may elect to purchase any Participation Interests hereunder. The limited power of attorney conferred hereunder shall not be affected by any subsequent disability or incapacity of the principal or by the lapse of time. To facilitate processing, Bank may request that Seller execute and deliver a separate, limited power of attorney in such form and content required by Bank, but any failure of Bank to request or obtain any such separate power of attorney instrument shall not mitigate or undermine the rights and powers conferred under this Section.
5.7
Private Recording Systems. Bank reserves the right to require or permit that any or all Participated Mortgage Loans be registered and processed on the MERS® System and/or any other similar mortgage registration or processing system (collectively, “Private Recording System”). Should Bank require or permit the registration or processing of any or all Participated Mortgage Loans on any Private Recording System: (a) each such Participated Mortgage Loan shall be registered and processed on the Private Recording System approved by Bank in accordance with the requirements of the Warehouse Program Guide; and (b) Bank may terminate and revoke any such requirement or permission regarding the registration and processing of any such Participated Mortgage Loans on any Private Recording System.
5.8
Regulatory Compliance. With respect to each Participated Mortgage Loan, Seller hereby represents, warrants and certifies to Bank that such Participated Mortgage Loan and each related Mortgage Loan Document was originated, made, negotiated, executed and delivered pursuant to and in accordance with the applicable terms and provisions of the Federal Truth in Lending Act, the Real Estate Settlement Procedures Act, the Equal Credit Opportunity Act, Dodd-Frank Act, the Interagency Appraisal Guidelines, and all other applicable Laws relating to the financing of Residential Real Property, each of which Laws have been fully satisfied and strictly complied with by Seller and such other applicable parties, and that Bank shall have no obligation with respect to the compliance with any such Laws, or the filing of any reports, certifications or other documents or items with or to any Borrower, any Governmental Authority, or any other Person whatsoever. IN THIS RESPECT, SELLER WILL RELEASE, HOLD HARMLESS AND INDEMNIFY EACH INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL LOSSES WHICH ARE INCURRED BY OR ASSERTED AGAINST BANK IN CONNECTION WITH ANY BREACH OR INACCURACY OF THE TERMS CONTAINED IN THIS SECTION.
5.9
Verifications. Bank shall have the right and authority to re-verify all information obtained by Seller regarding any Borrower, including verification of employment, verification of deposit and all information included in each related Loan Application. Seller shall cooperate with Bank in such re-verification process. Further, Bank shall have full right and authority to obtain an updated credit report on any Borrower. In such verification process, Seller shall, upon the request of Bank, supply a copy of Borrower’s handwritten, typed or signed Loan Application.
5.10
Servicing Responsibilities.
(a)
Seller shall administer, manage, collect and enforce each Participated Mortgage Loan for and on behalf of and for the benefit of Bank and Seller in accordance with Accepted Servicing Practices (collectively, the “Mortgage Loan Services”). With respect to each Participated Mortgage Loan, Seller shall promptly take any and all actions, and exercise any and all available remedies, under the related Mortgage Loan Documents or otherwise which are necessary or advisable to perform the Mortgage Loan Services pursuant to this Agreement.
(b)
At the request of Bank: (i) Seller shall promptly provide to Bank such information requested by Bank regarding any default, breach, violation or event of acceleration related to any Participated Mortgage Loan, and the actions which Seller has taken or proposes to take in connection therewith; and (ii) Seller shall promptly take any and all actions, and exercise any and all remedies, under the Mortgage Loan Documents or otherwise for any Participated Mortgage Loan which Bank shall deem, in its discretion, reasonably necessary or advisable to effect the provisions of this Section.
(c)
With respect to any Participated Mortgage Loan, any and all Mortgage Loan Collections received by Seller from the exercise of any rights or remedies under the related Mortgage Loan Documents or in connection with the full repayment of the outstanding principal balance and all accrued and unpaid interest for such Participated Mortgage Loan shall (i) be immediately transferred or delivered by Seller to Bank (and, if required by Bank, into the Repayment Account) and (ii) upon receipt by Bank, be applied pursuant to the provisions of this Agreement.
(d)
Notwithstanding anything herein to the contrary, upon the occurrence of an Event of Default: (i) Seller shall not exercise any remedies under any of the Mortgage Loan Documents for any Participated Mortgage Loan without the prior written consent of Bank; and (ii) Bank may at any time: (A) provide written notice to Seller terminating any or all rights, duties and obligations of Seller to provide Mortgage Loan Services with respect to any Participated Mortgage Loan (each, a “Servicing Termination Notice”); and/or (B) require that Seller instruct in writing any Borrower or other Person obligated on any Participated Mortgage Loan to deliver any and all payments to be made by such Borrower or such other Person on or in respect of such Participated Mortgage Loan directly to Bank or to the Repayment Account, and Seller shall not make any changes to any such instructions so provided without first obtaining the prior written consent of Bank. With respect to each Participated Mortgage Loan specified in any Servicing Termination Notice, Seller shall at its expense: (i) immediately turn over to Bank or its designee all books, records and other documents related to the Mortgage Loan Services for such Participated Mortgage Loan; (ii) cooperate with Bank in the immediate and orderly transfer of the administration and servicing responsibilities for such Participated Mortgage Loan to Bank or its designee; and (iii) upon Bank’s request, immediately execute and deliver to Bank all documents, agreements and instruments, and take such other actions and do such other things, deemed necessary or advisable by Bank in connection with the transfer to Bank of the administration and servicing responsibilities for such Participated Mortgage Loan.
5.11
Trust Provisions.
(a)
Any and all amounts required hereunder to be paid to Bank shall be paid to Bank pursuant to the terms and conditions of this Agreement. Without limiting the foregoing, any and all Bank Payment Deliverables received by Seller at any time (and any and all Bank Payment Deliverables that are or are deemed to be in or under the custody, possession or control of Seller at any time) shall be held in trust by Seller as the property and for the benefit of Bank. In such event, Seller shall, and Seller has a fiduciary duty to Bank, (i) to hold in trust, as the property and for the benefit of Bank, the Bank Payment Deliverables and (ii) (A) to immediately turn over and deliver to Bank each Bank Payment Deliverable, in kind, and in the exact form received, no later than one (1) Business Day after receipt thereof, and concurrently, endorse to Bank any instrument or other form of payment payable to Seller, but which is to be paid to Bank under this Agreement, (B) not to release any Bank Payment Deliverable to any other Person without Bank’s prior written consent, and (C) not to negotiate or otherwise seek to convert to cash any Bank Payment Deliverables which are in the form of a check or other form of payment without Bank’s prior
written consent. Nothing contained in this Section authorizes or permits payment to Seller or any other Person (other than Bank) of any amounts which are required under this Agreement to be paid directly to Bank.
(b)
Any and all Bank Document Deliverables required hereunder to be delivered to the Document Custodian shall be delivered to the Document Custodian pursuant to the terms and conditions of this Agreement. Without limiting the foregoing, any and all Bank Document Deliverables received by Seller at any time (and any and all Bank Document Deliverables that are or are deemed to be in or under the custody, possession or control of Seller at any time) shall be held in trust by Seller as the property and for the benefit of Bank. In such event, Seller shall, and Seller has a fiduciary duty to Bank, (i) to hold in trust for Bank, and as the property and for the benefit of Bank, the Bank Document Deliverables and (ii) (A) to immediately turn over and deliver to the Document Custodian each Bank Document Deliverable no later than one (1) Business Day after receipt thereof (except that Seller may deliver the applicable Bank Document Deliverables to the Document Custodian by such later time, if any, permitted by the express terms of this Agreement) and (B) not to release any Bank Document Deliverable to any Person (other than the Document Custodian). Nothing contained in this Section authorizes or permits the delivery to Seller or any other Person (other than the Document Custodian) of any Bank Document Deliverables which are required under this Agreement to be delivered directly to the Document Custodian.
(c)
The Mortgage Loan Files for Participated Mortgage Loans (other than any portions thereof which constitute Bank Document Deliverables or which have been delivered to Bank) shall be held in trust by Seller as the property and for the benefit of Bank. Seller shall, and Seller has a fiduciary duty to Bank, (i) to hold in trust for Bank, and as the property and for the benefit of Bank, such Mortgage Loan Files and (ii) (A) to turn over and deliver to Bank such Mortgage Loan Files no later than one (1) Business Day after Bank’s request and (B) not to release such Mortgage Loan Files to any Person (other than Bank) except as otherwise expressly permitted hereunder.
5.12 Application of Payments.
(a)
Except as expressly provided otherwise herein, any and all Mortgage Loan Collections received by Bank with respect to any Participated Mortgage Loan (each, a “Payment”), including all proceeds from the sale of such Participated Mortgage Loan by Seller and Bank to a Take-Out Purchaser, shall be credited and applied in the following order of priority upon Bank’s actual receipt of such sums, and Seller hereby instructs Bank to so apply such proceeds:
(i)
To the payment of any then-earned and outstanding Funding Fees payable by Seller to Bank hereunder in connection with such Participated Mortgage Loan;
(ii)
To the payment of any other outstanding fees, costs and expenses assessed or incurred by Bank and payable by Seller to Bank under this Agreement or any other Warehouse Document with respect to such Mortgage Loan;
(iii)
To the reimbursement of all outstanding amounts (other than the Advance made by Bank to purchase a Participation Interest in such Participated Mortgage Loan), if any, disbursed by Bank in connection with such Participated Mortgage Loan;
(iv)
To the payment of Bank’s pro rata share (determined in accordance with the Participation Interest Rate in effect from time to time for such Participated Mortgage Loan) of all interest that accrued on such Participated Mortgage Loan from and after the related Purchase Date, but which has not been previously paid to Bank;
(v)
To the repayment of Bank’s pro rata share (determined in accordance with Bank’s Participation Percentage in effect from time to time for such Participated Mortgage Loan) of the outstanding principal amount of such Participated Mortgage Loan (as of the related Purchase Date) which has not been previously paid to Bank;
(vi)
Upon the occurrence of an Event of Default, if required by Bank, to the payment of any of the amounts set forth above with respect to any other Participated Mortgage Loan, to be applied in the same order of priority as set forth above;
(vii)
To any other amounts payable by Seller to Bank;
(viii)
To restoring (in whole or in part) the Minimum Pledged Balance of the Pledged Account if the balance thereof is less than the Minimum Pledged Balance. Any such funds shall be deposited directly by Bank into the Pledged Account;
(ix)
To the payment of Seller’s pro rata share (determined in accordance with the Seller’s Retained Percentage in effect from time to time with respect to such Participated Mortgage Loan) of: (A) the outstanding principal amount of such Participated Mortgage Loan (as of the related Purchase Date) which has not been previously paid to or otherwise received by Seller; and (B) interest that has accrued on such Participated Mortgage Loan from and after the related Purchase Date (including any portion of such interest that accrued at a rate in excess of the Participation Interest Rate in effect from time to time for such Participated Mortgage Loan), but which has not been previously paid to or otherwise received by Seller. Any and all of the foregoing amounts due to Seller shall be paid by Bank to Seller on or before the next Business Day after receipt by Bank of the applicable Payment and shall be disbursed by Bank into the Remittance Account; and
(x)
Thereafter, as otherwise required to be in compliance with this Agreement.
(b)
Notwithstanding anything to the contrary in Section 5.12(a), with respect to any Participated Mortgage Loan, Bank may elect, in its sole and absolute discretion, to defer applying any proceeds of any Payment to any of the items described in Section 5.12(a)(i), (ii) or (iii), in which case Bank reserves the right to satisfy any outstanding amount for such items with the proceeds of any future Payment with respect to such Participated Mortgage Loan.
(c)
If the amount of any Take-Out Purchaser Payment received by Bank in connection with the sale of any Participated Mortgage Loan to a Take-Out Purchaser is insufficient to pay any and all amounts payable to Bank under Section 5.12(a) with respect to such Participated Mortgage Loan, then Bank shall be entitled to offset and apply available funds in the Pledged Account to satisfy the deficiency in such amounts payable to Bank. In such event, if after resorting the foregoing described sources of payment, any amounts remain payable to Bank under Section 5.12(a) with respect to such Participated Mortgage Loan, then Seller shall immediately pay such amounts to Bank upon demand.
(d)
In the event that Bank offsets or applies any funds in the Pledged Account to satisfy amounts payable to Bank, then Seller shall immediately deposit funds into the Pledged Account in the amount required to fully restore the Minimum Pledged Balance. Bank shall have no duty or obligation at any time to apply any amounts due from any Take-Out Purchaser or from any other Person with respect to any purchase of any Participated Mortgage Loan until Bank has actually received such amounts in immediately available funds. Further, notwithstanding anything herein to the contrary, Bank shall be under no duty at any time to apply any amounts representing Take-Out Purchaser Payments except pursuant to the procedures set forth in Section 4.4.
5.13 Warehouse Program Guide.
(a)
Seller agrees to comply at all times with all of the provisions of the Warehouse Program Guide in effect from time to time. Notwithstanding anything herein to the contrary, each Participated Mortgage Loan: (i) shall be subject to the provisions of the Warehouse Program Guide in effect as of the Purchase Date for such Participated Mortgage Loan; and (ii) shall not be subject to any material amendment, modification or supplement to the Warehouse Program Guide which occurs after the Purchase Date for such Participated Mortgage Loan. The Warehouse Program Guide is hereby incorporated into this Agreement by reference as if it was fully set forth herein.
(b)
Bank shall make available to Seller the Warehouse Program Guide by: (i) posting the Warehouse Program Guide on a web portal or website (including the Electronic Platform) to which Seller will be granted access (if Bank shall elect to maintain a web portal or web site for such purpose and if Bank shall grant Seller access thereto); or (ii) by providing a written copy of the Warehouse Program Guide to Seller. Bank may, in its sole discretion, amend, modify or supplement the Warehouse Program Guide from time to time. If Bank shall have granted Seller access to a web portal or website on which the Warehouse Program Guide is posted, then: (i) any amendments, modifications or supplements to the Warehouse Program Guide shall become effective as to Seller upon such time as the same are posted on such web portal or website, without any further action or notice by Bank; and (ii) Seller shall be solely responsible for monitoring such web site or web portal for any amendments, modifications or supplements to the Warehouse Program Guide. If Bank shall have provided to Seller written copies of any amendments, modifications or supplements to the Warehouse Program Guide, then such amendments, modifications or supplements to the Warehouse Program Guide shall become effective as to Seller upon Seller’s receipt thereof (unless Bank shall have also granted Seller access to a web portal or website to which such amendments, modifications or supplements are posted, in which case, such amendments, modifications or supplements shall become effective as to Seller upon the earlier of the posting thereof on such web portal or website or Seller’s receipt of written copies thereof).
(c)
Each submission of a Request by Seller to Bank shall constitute: (i) the ratification by Seller of the provisions of the Warehouse Program Guide in effect as of the Purchase Date (if any) for the Mortgage Loan that is the subject of the Request; and (ii) the agreement by Seller to be bound by all of the provisions of the Warehouse Program Guide (which is in effect as of such Purchase Date) applicable to the Mortgage Loan that is the subject of the Request.
5.14 Financial Covenants. At all times prior to the Agreement Termination Date (and thereafter if expressly required), Seller shall promptly and fully perform, observe and comply with the provisions set forth in Exhibit E.
5.15 Supplemental Provisions. At all times prior to the Agreement Termination Date (and thereafter if expressly required), Seller shall promptly and fully perform, observe and comply with the provisions set forth in Exhibit F.
5.16 Other Warehousing Facilities. Seller represents and warrants to Bank that any and all mortgage warehousing facilities of Seller (other than with Bank) in effect as of the Effective Date hereof are identified on Exhibit G. Seller covenants and agrees to: (a) notify Bank in writing prior to entering into any other mortgage warehousing facilities; and (b) promptly notify Bank in writing regarding any material change in any mortgage warehousing facility of Seller (including as to the maximum amount of any such facility and as to any termination, suspension or non-renewal of any such facility) or any default by Seller under any such mortgage warehousing facility.
5.17 Affiliate Escrow Agents. Seller represents and warrants to Bank that any and all title companies and other Persons that provide closing services in connection with residential mortgage loan transactions which are directly or indirectly owned or controlled by Seller or under common ownership or control with Seller (each an “Affiliate Escrow Agent”) as of the Effective Date are identified on Exhibit H. Seller represents and warrants that, prior to the Effective Date, Seller has delivered to Bank true, correct and complete copies of the financial statements for each Affiliate Escrow Agent. Seller covenants and agrees to promptly notify Bank in writing regarding any new Affiliate Escrow Agents arising after the Effective Date.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Bank as of the Effective Date and thereafter:
6.1 Organization and Good Standing. Seller is duly organized, validly existing, and in good standing under the Laws of the state of its formation, and is duly qualified to transact business and is in good standing in each jurisdiction where the nature and extent of Seller’s business and property requires the same.
6.2 Authorization and Power. Seller has: (a) the requisite power and authority to, and has taken all action necessary to authorize it to, execute, deliver and perform this Agreement, the other Warehouse Documents to which Seller is a party, and all of the other documents herein contemplated to be executed by Seller or otherwise to be executed by Seller from time to time in connection herewith; (b) all requisite authority, power, licenses, permits and franchises to conduct its business; and (c) received, has in its possession, and will maintain in full force and effect and in good standing, any and all federal, state and local licenses or approvals which may be necessary for Seller to undertake the actions required of it pursuant to this Agreement and to conduct its business. No consent or approval of any Person is required (other than such consents and approvals already obtained by Seller) in order for Seller to legally execute, deliver, and comply with the terms of the Warehouse Documents to which it is a party.
6.3 No Conflicts. Not the execution and delivery of this Agreement, the other Warehouse Documents to which Seller is a party, or any other documents to be executed in connection herewith, nor the consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or with the terms and provisions thereof, will contravene or materially conflict with any applicable Law, or any loan agreement, lease, promissory note, indenture, mortgage, deed of trust, or other agreement or instrument to which Seller is a party or by which Seller or any of its Property may be bound or be subject, or violate any provision of the documents creating or governing Seller.
6.4 Enforceable Obligations. This Agreement and each other Warehouse Document to which Seller is or will become a party are or upon execution will be the legal, valid and binding obligations of Seller, are enforceable in accordance with their respective terms, except as limited by bankruptcy, insolvency or other Laws of general application relating to the enforcement of creditors’ rights.
6.5 Financial Condition. Seller has delivered to Bank copies of its most recent balance sheet, and the related statements of income, stockholders’ equity and changes in financial position for the year ending on the date indicated therein, audited by independent certified public accountants; such financial statements are true and correct, fairly present the financial condition of Seller as of such date and have been prepared in accordance with GAAP as of the date hereof; there are no obligations, liabilities or indebtedness (including contingent and indirect liabilities and obligations or unusual forward or long term commitments) of Seller which are not reflected in such financial statements; and no change having a material adverse effect has occurred in the financial condition or business of Seller since the date of such financial statements.
6.6 Material Agreements. To the best of Seller’s knowledge, Seller is not in default under any material agreement or obligation to which it is a party or by which any of its Properties is bound, and the execution of this Agreement and the other Warehouse Documents to which Seller is a party, and Seller’s performance of its duties and obligations hereunder and thereunder, will not cause a default under any material agreement or obligation to which Seller is a party or by which any of its Properties is bound.
6.7 Disclosure of Proceedings. Except as previously disclosed to Bank in writing prior to the Effective Date or pursuant to Section 7.15, there are no: (a) (i) Proceedings by any Governmental Authority pending, or to the knowledge of Seller, threatened against Seller or (ii) any other Proceedings pending, or to the knowledge of Seller, threatened against Seller which, if determined adversely to Seller, may have a Material Adverse Effect; or (b) outstanding or unpaid material judgments against Seller.
6.8 Taxes. All tax returns required to be filed by Seller in any jurisdiction have been filed. All taxes, assessments, fees and other governmental charges upon Seller or upon any of its Properties, income or franchises have been paid (if applicable, prior to the time that such taxes, assessments, fees or other governmental charges could give rise to a Lien), other than those being protested in good faith by appropriate proceedings, with respect to which no Lien exists and for which Seller has set aside adequate reserves.
6.9 No Approvals Required. Neither the execution and delivery of this Agreement and the other Warehouse Documents to which Seller is a party, nor the consummation of any of the transactions contemplated hereby or thereby, requires the consent or approval of, the giving of notice to, or the registration, recording or filing of any document with, or the taking of any other action in respect of, any Governmental Authority or other Person.
6.10 Representations Regarding Participated Mortgage Loans. Each Participated Mortgage Loan is in all respects in compliance with the provisions of the Warehouse Program Guide. Without limiting the generality of the foregoing, Seller hereby represents and warrants to Bank with respect to each Participated Mortgage Loan:
(a)
Except for the Participation Interest in such Participated Mortgage Loan and any and all other rights, titles or interests of Bank in or to such Participated Mortgage Loan and the related Mortgage Loan Documents: (i) Seller is the sole direct, legal and beneficial owner of all rights, titles and interests in and to such Participated Mortgage Loan and the related Mortgage Loan Documents; (ii) such Participated Mortgage Loan and the related Mortgage Loan
Documents are free and clear of all Liens; and (iii) no right, title, or interest in or to such Participated Mortgage Loan or the related Mortgage Loan Documents, or any part thereof, has been transferred, assigned or conveyed to any Person. Seller has the full right to sell to Bank a Participation Interest in such Participated Mortgage Loan and the related Mortgage Loan Documents free and clear of any Lien;
(b)
Bank is the sole legal and beneficial owner of a Participation Interest in such Mortgage Loan, having an undivided percentage ownership interest equal to the Participation Percentage therefor;
(c)
The Mortgage Note evidencing such Participated Mortgage Loan contains the Required Endorsements. The endorsement of such Mortgage Note pursuant to the Required Endorsements (including any endorsement of such Mortgage Note on behalf of Seller pursuant to the power of attorney granted herein or such other power of attorney delivered by Seller to Bank in accordance with this Agreement) and the assignment of such Mortgage Note and the other Mortgage Loan Documents related to such Participated Mortgage Loan (whether executed by Seller or by Bank pursuant to the general power of attorney herein granted or such other power of attorney delivered by Seller to Bank in accordance with this Agreement) is or will be valid and enforceable under all applicable Law;
(d)
Any and all portions of the Participated Mortgage Loan required hereunder to be funded by Seller have been funded from sources other than any loan, credit facility or other financing or sale arrangement;
(e)
(i) The Mortgage Loan Documents for such Participated Mortgage Loan have been duly executed and delivered by the related Borrower, and where applicable, acknowledged, and recorded; and (ii) such Participated Mortgage Loan was valid and complied with all applicable lending Laws applicable to the related Borrower, Seller and Bank and the Mortgaged Property securing such Participated Mortgage Loan as of origination;
(f)
(i) Such Participated Mortgage Loan is secured by a valid first Lien on the Mortgaged Property described in the Security Instrument for such Participated Mortgage Loan; (ii) such Mortgaged Property is free and clear of all Liens, claims and encumbrances having priority over the Lien of the Security Instrument which secures such Participated Mortgage Loan, except for Permitted Encumbrances; and (iii) there is no subordinate Lien encumbering such Mortgaged Property;
(g)
A Title Policy has been obtained by Seller, in the full amount of such Participated Mortgage Loan, which provides insurance to Seller (and its successors and/or assigns) that the Lien of the Security Instrument securing such Participated Mortgage Loan is a first and prior Lien upon the related Mortgaged Property, without any exceptions, except for Permitted Encumbrances, and which Title Policy includes such endorsements thereto which are consistent with Accepted Lending Practices;
(h)
Such Participated Mortgage Loan and the related Mortgage Loan Documents are valid, binding and enforceable in accordance with their respective terms, in full force and effect, except as such enforceability may be limited by bankruptcy, insolvency or other Laws of general application relating to the enforcement of creditors’ rights;
(i)
The Mortgage Note evidencing such Participated Mortgage Loan is genuine in all respects as appearing on its face and as represented in the books and records of Seller, and all
information set forth therein is true and correct as of origination;
(j)
(i) The Mortgage Loan Documents evidencing such Participated Mortgage Loan contain the entire agreement of the parties thereto with respect to the subject matter thereof, have not been modified or amended in any respect not expressed in writing therein and are free of concessions or understandings with the obligor thereon of any kind not expressed in writing therein; and (ii) such Participated Mortgage Loan and the related Mortgage Loan Documents are in all respects consistent with, and contain the same terms as represented by Seller to Bank in, the related Request, except as disclosed by Seller to Bank in writing prior to the time of the Purchase Date for such Participated Mortgage Loan;
(k)
No default or breach has occurred under any Mortgage Loan Document relating to such Participated Mortgage Loan;
(l)
(i) Such Participated Mortgage Loan is in all respects in compliance with all Laws applicable thereto, including all Laws then applicable to the processing, origination, underwriting, closing and funding of such Participated Mortgage Loan at the time of the relevant activity; and (ii) without limiting the forgoing, Seller is in compliance with all Laws applicable to Seller in connection with such Participated Mortgage Loan;
(m)
(i) The full principal amount of such Participated Mortgage Loan has been advanced; (ii) the outstanding principal balance of such Participated Mortgage Loan as of the Purchase Date related thereto is as stated in the related Request; and (iii) all costs, fees and expenses incurred in making, closing and recording such Participated Mortgage Loan have been paid;
(n)
(i) All payments and other deposits made with respect to such Participated Mortgage Loan have been paid in cash by the related Borrower; (ii) Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds by a Person other than such Borrower, directly or indirectly, for the payment of any amount required by such Participated Mortgage Loan, except for interest accruing from the date of the disbursement of the proceeds of such Participated Mortgage Loan to the day which precedes by one (1) month the due date of the first installment of principal and interest thereunder; and (iii) other than as disclosed to Bank in writing, there have been no prepayments made on such Participated Mortgage Loan;
(o)
To the best of Seller’s knowledge, all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges (relating to any of the Mortgaged Property for such Participated Mortgage Loan) which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid;
(p)
Such Participated Mortgage Loan which Seller represents to be insured by a private mortgage insurer is so insured;
(q)
With respect to such Participated Mortgage Loan, all conditions as to the validity of the applicable insurance as required by applicable Law, the related Mortgage Loan Documents and by private mortgage insurance companies or other insurers, if and to the extent applicable, have been properly satisfied, and said insurance is valid and enforceable;
(r)
To the best of Seller’s knowledge: (i) the Mortgaged Property for such Participated Mortgage Loan is (A) in good repair and (B) free from damage (normal wear and
tear excepted) since the date of the origination of such Participated Mortgage Loan; and (ii) there is no proceeding pending for the total or partial condemnation of any portion of such Mortgaged Property;
(s)
(i) Seller has arranged to sell such Participated Mortgage Loan to a Take-Out Purchaser pursuant to a Take-Out Purchase Agreement, which sale is to be completed pursuant to the terms of such Take-Out Purchase Agreement no later than thirty (30) days after the Purchase Date for such Participated Mortgage Loan; and (ii) such Participated Mortgage Loan satisfies the eligibility, qualifications and other requirements under such Take-Out Purchase Agreement for the purchase thereunder by such Take-Out Purchaser;
(t)
(i) If such Participated Mortgage Loan shall have been represented by Seller to Bank to be a Mortgage Loan eligible for purchase by any Agency or is required by Bank pursuant to the Warehouse Program Guide to be eligible for purchase by any Agency, (A) Seller has fully complied with the underwriting requirements of such Agency (in effect at the time such Participated Mortgage Loan was made) and such other underwriting requirements of the Warehouse Program Guide (in effect as of the date of the Purchase Date for such Participated Mortgage Loan) and (B) such Participated Mortgage Loan is otherwise in compliance with any and all other rules, regulations, policies, procedures and other requirements of such Agency for the purchase of such Participated Mortgage Loan; or (ii) if such Participated Mortgage Loan shall not have been represented by Seller to Bank to be a Mortgage Loan eligible for purchase by any Agency or is not required by Bank pursuant to the Warehouse Program Guide to be eligible for purchase by any Agency, Seller has fully complied with the underwriting requirements of the applicable Take-Out Purchaser for such Participated Mortgage Loan and complied with the underwriting requirements of the “general overlays” within the Warehouse Program Guide (in effect as of the date of the Purchase Date for such Participated Mortgage Loan);
(u)
Except as otherwise provided in this Agreement, Seller has obtained, and has in its possession, in due form, fully executed originals of all of the Mortgage Loan Documents relating to such Participated Mortgage Loan required to legally effect such Participated Mortgage Loan, and all such Mortgage Loan Documents will be held and delivered by Seller pursuant to the terms and conditions of this Agreement;
(v)
To the best of Seller’s knowledge, all of the improvements which are included for the purpose of determining the appraised value of the Mortgaged Property related to such Participated Mortgage Loan lie wholly within the boundaries of such Mortgaged Property and do not encroach upon building restriction lines, and no improvements on adjoining properties encroach upon such Mortgaged Property. Seller has obtained a Title Policy without exceptions for boundary line and building line encroachments;
(w)
To the best of Seller’s knowledge, no circumstances or conditions exist with respect to such Participated Mortgage Loan, the related Mortgaged Property or the related Borrower (including its credit standing) that could be reasonably expected: (i) to cause the Take-Out Purchaser committed to purchase such Participated Mortgage Loan from Seller to not purchase such Participated Mortgage Loan; (ii) to cause the occurrence of a default under the related Mortgage Loan Documents; or (iii) to adversely affect the value or marketability of such Participated Mortgage Loan;
(x)
The information regarding such Participated Mortgage Loan (including with regard to the related Borrower) provided to Bank is true, complete and correct as of the Purchase Date for such Participated Mortgage Loan; and
(y)
The Mortgage Loan Transaction for such Participated Mortgage Loan shall have been completed on and as of the Purchase Date related thereto.
6.11 Survival of Representations. All representations and warranties by Seller herein shall survive the termination or expiration of this Agreement and the making of any and all Advances. Any and all investigations at any time made by or on behalf of Bank shall not limit, impair or diminish Bank’s right to rely on any and all representations and warranties by Seller herein.
ARTICLE 7
AFFIRMATIVE COVENANTS
At all times prior to the Agreement Termination Date (and thereafter if expressly required hereunder), Seller covenants and agrees with Bank that:
7.1 Financial Statements and Reports. Seller shall furnish to Bank the following, all in form and detail satisfactory to Bank:
(a) Promptly after becoming available, and in any event within ninety (90) days after the close of each fiscal year of Seller, an audited balance sheet of Seller as of the end of such year, and an audited statement of income and retained earnings of Seller for such year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, accompanied by the related report of independent certified public accountants acceptable to Bank, which report shall be to the effect that such statements have been prepared in accordance with GAAP;
(b) If requested by Bank, on or before the thirtieth (30th) day of any calendar month: (i) a statement of income and expenses of Seller for the prior calendar month; and (ii) a statement, in form and content acceptable to Bank, setting forth the status, as of the last day of the prior calendar month, of all Loan Applications being processed by Seller for closing;
(c) Promptly after becoming available, and in any event within forty-five (45) days after the close of each fiscal quarter of Seller, a balance sheet of Seller as of the end of such fiscal quarter, a statement of income and retained earnings for such fiscal quarter and an operating statement of Seller for such fiscal quarter setting forth in each case in comparative form the corresponding figures for the corresponding fiscal quarter of the preceding fiscal year, prepared in accordance with GAAP and certified by the principal financial officer of Seller;
(d) If Seller has been approved by Bank to sell Mortgage Loans to Securitizers, weekly hedging reports, in such form and content required by Bank;
(e) Promptly upon request therefor by Bank, a copy of the most recent report submitted to Seller by independent accountants in connection with any annual, interim or special audit of the books of Seller; and
(f) Such other information concerning the business, Properties or financial condition of Seller, or regarding any Participated Mortgage Loan, as Bank may reasonably request.
7.2 Taxes and Other Liens. Seller shall pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon it or upon its income or upon any of its Property as well as all claims of any kind (including claims for labor, materials, supplies and rent) which, if unpaid, might become a Lien upon any or all of its Property or the Mortgage Loans; provided, however, Seller
shall not be required to pay any such tax, assessment, charge, levy or claim regarding its Property (other than with respect to Participated Mortgage Loans) if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings diligently conducted by or on behalf of Seller and if Seller shall have set up reserves therefor adequate under GAAP.
7.3 Maintenance. Seller shall: (a) maintain its existence and all of its licenses, permits, franchises, qualifications and rights that are necessary in order for Seller to conduct its business; and (b) observe and comply in all material respects with all applicable Laws. Without limiting the generality of the foregoing, Seller shall at all times maintain all Agency Approvals in good standing, and none of the Agency Approvals shall at any time be suspended or terminated.
7.4 Further Assurances. Seller shall promptly cure any defects in the execution and delivery of this Agreement and any other Warehouse Document. Seller shall, at its expense, promptly execute and deliver to Bank, upon Bank’s reasonable request, all such other and further documents, agreements and instruments in compliance with or accomplishment of the covenants and agreements of Seller in this Agreement, the other Warehouse Documents and all documents executed in connection herewith. In addition, Seller will provide Bank with any and all documentation and other information required by Bank relating to the business and background of Seller and its directors, officers, employees and representatives, and any certifications reasonably required by Bank to verify Seller’s compliance with any applicable Laws.
7.5 Accounts. To facilitate the transfer of funds contemplated by this Agreement, Seller shall establish and maintain at Bank each of the Accounts. All other deposit accounts, certificate of deposit and other similar account of Seller shall be maintained only in accounts at federally insured financial institutions.
7.6 Use of Electronic Platform. Seller shall be required to use the Internet-based electronic platform established by Bank (as modified, replaced, enhanced or upgraded by Bank from time to time, the “Electronic Platform”) in connection with the purchase and sale of Participation Interests and the other transactions contemplated in this Agreement, subject to the following:
(a) Bank hereby grants to Seller a revocable, non-exclusive, non-transferable license to access and use the Electronic Platform solely for the limited purpose of facilitating the sale by Seller to Bank of Participation Interests and the other transactions contemplated by this Agreement. Seller shall not permit any Person to utilize the Electronic Platform other than employees of Seller who have been approved in advance by Bank in writing (each an “Authorized User”). Seller shall immediately notify Bank of any unauthorized use of the Electronic Platform.
(b) Seller shall take all reasonable precautions to prevent unauthorized Persons related to Seller (including any employee, contractor agent or other Person which may obtain access to the Electronic Platform by or through Seller) (“Unauthorized Seller Persons”) from obtaining access to or use of the Electronic Platform. Bank shall have the right to rely upon any information received in the Electronic Platform from any Person using a password assigned to an Authorized User, and will incur no liability for such reliance. Seller shall be responsible for securing such passwords and shall be responsible for any actions taken using such passwords. In the event of any breach of the security measures established by Bank, including use of the Electronic Platform by any Unauthorized Seller Persons, Bank shall have the right to immediately terminate or suspend access to the affected portion of the Electronic Platform by Seller and their Authorized Users until such time such breach has been secured to Bank’s satisfaction.
(c) Bank shall not be required to perpetually license, maintain, service or support the Electronic Platform. Bank may at any time discontinue the Electronic Platform by providing written notice thereof to Seller. In addition, Bank may at any time terminate the license granted to Seller to use, and Seller’s access to, the Electronic Platform by providing written notice thereof to Seller. Bank reserves the right to modify, replace, enhance or upgrade the Electronic Platform from time to time in Bank’s sole discretion.
(d) SELLER UNDERSTANDS AND AGREES THAT THE ELECTRONIC PLATFORM IS BEING LICENSED, DELIVERED AND MADE AVAILABLE “AS IS”, “WHERE IS”, “WITH ALL FAULTS”, AND WITH ANY AND ALL LATENT AND PATENT DEFECTS, WITHOUT ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY BY BANK, AND BANK HEREBY DISCLAIMS ANY AND ALL IMPLIED REPRESENTATIONS, WARRANTIES AND COVENANTS. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 7.6, BANK HAS NOT MADE AND DOES NOT HEREBY MAKE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND BANK HEREBY DISCLAIMS AND RENOUNCES ANY AND ALL SUCH REPRESENTATIONS AND WARRANTIES.
(e) Seller is fully aware of the inherent security risks of any Internet-based application (such as the Electronic Platform) and, in particular, the risk that unauthorized third- parties may through unauthorized use, “hacking”, “Trojan horses”, viruses or otherwise be able to access and manipulate the use of the Electronic Platform and the data made available thereby without Bank in any way being aware that the user is not Seller. Seller voluntarily assumes all such risks to the extent caused by Unauthorized Seller Persons.
(f) Notwithstanding anything in this Section to the apparent contrary, the provisions of this Section shall not be deemed to limit or release Bank from its obligations under Section 10.26.
(g) Bank agrees to exercise commercially reasonable efforts to maintain the Electronic Platform in a manner consistent with Bank’s internal policies and procedures regarding the maintenance of data security; provided, notwithstanding anything herein to the apparent contrary, Bank shall not have any liability to Seller with respect to any failure to comply with the provisions of this Section 7.6(g) other than if such failure is due to the gross negligence, bad faith or intentional misconduct of Bank.
7.7 Reimbursement of Expenses. Seller shall pay, upon demand by Bank, any and all out of pocket fees and expenses incurred by Bank in negotiating or entering into, or in administering or enforcing its rights or remedies, under this Agreement or any other Warehouse Document, which amounts shall include all court costs, attorneys’ fees (including for trial, appeal or other proceedings), fees of auditors and accountants, and investigation expenses reasonably incurred by Bank in connection with any such matters. Seller and Bank shall otherwise each be responsible for their own out of pocket expenses unless expressly provided otherwise in this Agreement or any other Warehouse Document.
7.8 Insurance. Seller shall at all times maintain in force and effect such insurance required under the Warehouse Program Guide. Without limiting the generality of the foregoing, such insurance shall be issued by such insurers, insure against such risks, be in such form, have such coverage amounts,
deductibles, limits and retentions, contain such endorsements and otherwise be in such form, as required under the Warehouse Program Guide.
7.9 Accounts and Records. Seller shall keep books of record and account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and activities, including the sale of any Participation Interests to Bank, in accordance with GAAP.
7.10 Books and Records. Seller agrees to maintain customary books and records relating to the Participation Interests sold by Seller to Bank hereunder. Seller shall properly reflect in its books and records the sale by Seller to Bank of all Participation Interests sold to Bank and the Percentage Interests of Bank in such Participation Interests. Upon request, Seller shall furnish to Bank copies of any of Seller’s books and records and financial statements relating to the Participation Interests purchased by Bank from Seller hereunder.
7.11 Mortgage Loan Files. Except as expressly permitted or required hereunder, and subject to the provisions of Section 5.11, at all times after the Purchase Date for any Participated Mortgage Loan, Seller shall have and maintain in its direct custody and possession the Mortgage File for such Participated Mortgage Loan.
7.12 Document Retention. With respect to each Participated Mortgage Loan, Seller will maintain in its files all records relating to such Participated Mortgage Loan for the period of time required by applicable Law, but in no event for less than twenty-five (25) months from the Purchase Date for such Participated Mortgage Loan. Within one (1) Business Day following any demand therefor, Seller will supply Bank with copies, certified copies or originals of any such records.
7.13 Right of Inspection. Seller shall permit any officer, employee, agent or representative of Bank: (a) with at least [***] written notice, to examine (at any office of Seller selected by Bank) Seller’s books and records, accounts and any and all files, records and documents relating to the Mortgage Loans in which Bank has purchased or will purchase Participation Interests (including any in- file credit reports), and to make copies and extracts of any and all of the foregoing; and (b) to discuss the affairs, finances, books and records, and accounts of Seller with Seller’s officers, accountants and auditors and other representatives.
7.14 Audit. Seller shall permit any third-party consultant engaged by Bank (each an “Auditor”), at the expense of Seller, to inspect and conduct an audit of Seller’s business operations and records related thereto; provided, however, if such audit is conducted by Bank more than once during any fiscal year, and such additional audit is not the result of the occurrence of an Event of Default, Bank shall be responsible for the fee payable to the Auditor that performed such additional audit. In connection with each audit, Bank will provide reasonable prior notice to Seller and Seller shall cooperate with the Auditor and will cause Seller’s employees, agents and contractors to cooperate with the Auditor, and Seller shall furnish or cause to be furnished to the Auditor such information and documentation the Auditor may reasonably consider necessary or useful in connection with the performance of the audit.
7.15 Notice from Seller of Certain Events.
(a) Seller shall promptly, but in any event within [***] of obtaining knowledge thereof (or by such earlier time if expressly required hereunder), notify Bank in writing of any event or circumstance or notice thereof which has had, or could reasonably be expected to have, a Material Adverse Effect upon Seller. Without limiting the generality of the foregoing and to the extent permitted to be disclosed:
(i) Seller shall promptly, but in any event within [***] of obtaining knowledge thereof, notify Bank in writing of: (A) any Proceeding by any Governmental Authority pending, or to the knowledge of Seller, threatened against Seller; and (B) any other Proceeding pending, or to the knowledge of Seller, threatened against Seller which, if determined adversely to Seller, may have a Material Adverse Effect upon Seller. Seller shall immediately notify Bank in writing upon obtaining any knowledge thereof of any judgment, decision, order, finding, determination or other disposition in connection with a Proceeding that has resulted in a Material Adverse Effect upon Seller.
(ii) Seller shall promptly, but in any event within [***] of receipt, deliver to Bank copies of all notices and other documents and correspondence from any Governmental Authority regarding any alleged non-compliance or potential non-compliance with the Dodd-Frank Act or any other applicable Law related to the financing and sale of Mortgage Loans.
(b) If there is any pending or, to knowledge of Seller, threatened audit or investigation of Seller by any applicable Agency, or any other Proceeding involving Seller, which could reasonably be expected to result in any Agency Approval being suspended or terminated (including due to the failure of Seller to comply with the results or findings of any such audit or investigation), then Seller shall provide written notice thereof to Bank within [***] of Seller obtaining any knowledge thereof. If any Agency Approval is not in good standing or is otherwise suspended or terminated, then Seller shall provide immediate written notice thereof to Bank.
(c) Seller shall furnish to Bank immediately upon becoming aware of the existence of any Event of Default, a written notice specifying the nature and period of existence thereof and the action which Seller is taking or proposes to take with respect thereto.
7.16 Compliance with Warehouse Documents. Seller shall promptly and fully perform, observe and comply with any and all provisions of this Agreement and the other Warehouse Documents to which Seller is a party.
7.17 Reserved.
7.18 INDEMNIFICATION. SELLER SHALL INDEMNIFY, DEFEND, PROTECT AND HOLD HARMLESS BANK, BANK’S PARENTS, SUBSIDIARIES AND AFFILIATES, AND ALL DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS, SUCCESSORS AND ASSIGNS OF ANY OF THE FOREGOING (EACH AN “INDEMNIFIED PARTY”) FROM AND AGAINST ANY AND ALL LOSSES, LIABILITIES, DAMAGES, CLAIMS, PENALTIES, JUDGMENTS, OBLIGATIONS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES), ACTIONS, PROCEEDINGS OR DISPUTES (COLLECTIVELY, “LOSSES”) INCURRED BY ANY INDEMNIFIED PARTY OR TO WHICH ANY INDEMNIFIED PARTY MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO THIS AGREEMENT, ANY OTHER WAREHOUSE DOCUMENT, ANY PARTICIPATED MORTGAGE LOAN OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER WAREHOUSE DOCUMENT, INCLUDING ANY AND ALL LOSSES DUE TO: (A) ANY NEGLIGENT OR FRAUDULENT ACT OR OMISSION OF SELLER OR ANY OF ITS AGENTS, REPRESENTATIVES OR EMPLOYEES; (B) ANY MATERIAL BREACH BY SELLER OF ANY REPRESENTATION OR WARRANTY CONTAINED HEREIN; (C) ANY MATERIAL BREACH BY SELLER OF ANY PROVISION OF
THIS AGREEMENT OR ANY OTHER WAREHOUSE DOCUMENT; (D) ANY EVENT OF DEFAULT; (E) SELLER’S USE FOR ANY MORTGAGE LOAN OF ANY FORM OR DOCUMENT NOT PROVIDED OR APPROVED BY BANK; (F) [Reserved] (G) ANY MATERIAL FAILURE BY SELLER TO COMPLY WITH ANY APPLICABLE LAW; AND (I) ANY UNAUTHORIZED ACCESS TO OR USE OF THE ELECTRONIC PLATFORM OR THE INFORMATION MADE AVAILABLE THEREBY DUE TO ANY ACT OR OMISSION OF SELLER. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY TO BE INDEMNIFIED UNDER THIS SECTION OR ANY OTHER SECTION OF THIS AGREEMENT (INCLUDING, SECTIONS 5.8, 7.6 AND 10.23) OR UNDER ANY OTHER WAREHOUSE DOCUMENT SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT OF, THE NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT LIABILITY OF SUCH INDEMNIFIED PARTY; PROVIDED, HOWEVER, THAT SUCH INDEMNITIES SHALL NOT APPLY TO A PARTICULAR INDEMNIFIED PARTY WITH REGARD TO, AND TO THE EXTENT OF THE AMOUNT OF, THOSE CERTAIN LOSSES (IF ANY) WHICH ARE DETERMINED BY A FINAL NON-APPEALABLE ORDER OF A COURT OF COMPETENT JURISDICTION TO HAVE BEEN PROXIMATELY CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY. Each Indemnified Party may employ an attorney or attorneys to protect or enforce its respective rights, remedies and recourses under this Agreement and any other Warehouse Documents, and to advise and defend it with respect to any such actions and other matters. Seller shall reimburse each Indemnified Party for its respective reasonable attorneys’ fees and expenses (including expenses and costs for experts) immediately upon receipt of a written demand therefor, whether on a monthly or other time interval, and whether or not an action is actually commenced or concluded. The provisions of this Section and the other indemnity and hold harmless provisions of this Agreement (including Sections 5.8, 7.6 and 10.23) and the other Warehouse Documents shall survive the termination of this Agreement.
7.19 Interest Rate Hedging. Seller shall at all times hedge against the interest rate risk associated with any and all Mortgage Loans owned in whole or in part by Seller, as may be reasonably required by Bank from time to time.
7.20 Reserved.
ARTICLE 8
NEGATIVE COVENANTS
At all times prior to the Agreement Termination Date (and thereafter if expressly required hereunder), Seller covenants and agrees with Bank that:
8.1 Management or Control. Without the prior written notice to Bank: (a) there shall not be any change in direct or indirect management or control of Seller; and (b) Seller, and each entity which directly or indirectly manages or controls Seller, shall not cease to maintain key management and executive personnel at a level of experience and ability equivalent to the present executive management and executive personnel as of the date hereof.
8.2 Transfer of Ownership Interest. Without the prior written notice to Bank, which consent shall not be unreasonably withheld or delayed, there shall not be any sale, transfer or assignment to any Person of the direct or indirect ownership interest in Seller if such sale, transfer or assignment shall result in such Person holding, directly or indirectly, [***] or more of the total outstanding ownership interest in Seller.
8.3 Merger. Without the prior written consent of Bank, Seller shall not: (a) become a party to any merger or consolidation without Seller being the surviving and controlling legal entity; (b) sell or otherwise sell, transfer or assign all or substantially all of the assets or Properties of Seller to any other Person; or (c) wind-up, dissolve or liquidate.
8.4 Fiscal Year; Method of Accounting. Seller shall not, without giving prior written notice to Bank, change its fiscal year or method of accounting.
8.5 Actions with respect to Mortgage Loans. Seller shall not:
(a) Release the Lien of any Security Instrument of any Participated Mortgage Loan;
(b) Other than to correct errors, Amend, modify or supplement in any material respect any Mortgage Loan Document related to any Participated Mortgage Loan;
(c) Grant, create, incur, permit or suffer to exist any Lien upon the Mortgaged Property which is security for any Participated Mortgage Loan, except for the Lien granted under the Security Instrument for such Participated Mortgage Loan; or
(d) Sell, transfer or assign any of Seller’s rights, titles or interests in or to any Participated Mortgage Loan to any Person except as expressly provided in this Agreement, or otherwise with the prior written consent of Bank.
8.6 Compliance with Material Agreements. Seller shall not permit any default to occur with respect to any material agreement, indenture, mortgage or document binding on it or affecting its Property or business, if such default may have a Material Adverse Effect upon Seller.
8.7 Representations Regarding Interests Sold. Seller will not represent to any Person that Seller owns all or any portion of the Participation Interests purchased by Bank under this Agreement.
ARTICLE 9
EVENTS OF DEFAULT;
CERTAIN RIGHTS AND REMEDIES OF BANK
9.1 Events of Default. An Event of Default shall exist if any one or more of the following occurs:
(a) Seller shall fail to punctually make any payment of fees or other sums when due hereunder, or under any other Warehouse Document to which it is a party, and such failure shall continue for a period of [***] thereafter (provided that Bank shall not be required to provide any such [***] grace period more than [***] times in any twelve (12)-month period);
(b) The failure or refusal of Seller to perform, observe or comply with any covenant or agreement contained in this Agreement or any other Warehouse Document to which it is a party, which failure or refusal is not otherwise addressed in this Section, and such failure or refusal continues for a period of [***] (provided that Bank shall not be required to provide any such [***] grace period more than [***] times in any twelve (12)-month period);
(c) Any material statement, warranty or representation made at any time by or on behalf of Seller in this Agreement or any other Warehouse Document, or in any writing or
communication (including any Request), or any statement or representation made in any certificate, report, or opinion delivered to Bank pursuant to or in connection with this Agreement or any other Warehouse Document to which it is a party, is false, calculated to mislead or misleading in any material respect at the time made;
(d) Default shall occur (after the expiration of any applicable grace and cure periods): (i) in the punctual payment of any material indebtedness of Seller owing to any Person (other than Bank), or in the performance, observance or compliance with any other covenant, agreement or obligation of any agreement executed in connection therewith; or (ii) in the performance of any other material agreement binding upon Seller;
(e) Seller shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian, intervenor or liquidator of such Person or of all or a substantial part of its assets; (ii) file a voluntary petition in bankruptcy, admit in writing that it is unable to pay its debts as they become due or generally not pay its debts as they become due; (iii) make a general assignment for the benefit of creditors; (iv) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws; (v) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; or (vi) take any action for the purpose of effecting any of the foregoing;
(f) An involuntary petition or complaint shall be filed against Seller seeking bankruptcy or reorganization of such Person or the appointment of a receiver, custodian, trustee, intervenor or liquidator of it, or of all or substantially all of its assets, and such petition or complaint shall not have been dismissed within [***] of the filing thereof; or an order, order for relief, judgment or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition or complaint seeking reorganization of such Person or appointing a receiver, custodian, trustee, intervenor or liquidator of such Person, or of all or substantially all of its assets, and such order, judgment or decree shall continue unstayed and in effect for a period of [***];
(g) Seller shall fail within [***] to pay, bond or otherwise discharge any judgment or order for payment of money in excess of the Maximum Judgment Amount that is not otherwise being satisfied in accordance with its terms and is not stayed on appeal or otherwise being contested in good faith;
(h) Any default or event of default shall occur (after the expiration of any applicable grace and cure periods) under any indebtedness of Seller to Bank (other than arising out of or pursuant to this Agreement) or under any document evidencing, securing or pertaining to any indebtedness of Seller to Bank;
(i) Any Person shall levy on, seize, or attach all or any material portion of the Property of Seller which is not permanently dismissed or discharged within [***] after commencement of such action;
(j) The failure of Seller to repurchase any Participation Interest (or any portion thereof) as and when required pursuant to the provisions of this Agreement;
(k) The dissolution of Seller that is an entity for any reason;
(l) [Reserved];
(m) If (i) any Agency Approval is not in good standing, (ii) any Agency Approval is suspended or terminated, or (iii) Seller failed to provide any written notice as and when required pursuant to Section 7.15(b);
(n) If (i) there is any Proceeding by any Governmental Authority pending, or to knowledge of Seller, threatened against Seller which, if determined adversely to Seller, may have a Material Adverse Effect, (ii) there is any judgment, decision, order, finding, determination or other disposition in connection with a Proceeding that has resulted in a Material Adverse Effect upon Seller, or (iii) Seller failed to provide any written notice as and when required pursuant to Section 7.15(a)(i);
(o) (i) Unless previously disclosed to Bank in writing, Any change in the financial condition of Seller from the condition shown on the financial statements submitted to Bank and relied upon by Bank in connection with the execution of this Agreement, which change would have a Material Adverse Effect upon Seller, the materiality and adverse effect of such change in financial condition to be reasonably determined by Bank in accordance with its credit standards and underwriting practices in effect at the time of making such determination; or (ii) if Bank in good faith believes that any other act, event, condition or circumstance exists or has occurred (including a material management or organizational change in Seller) that would have a Material Adverse Effect upon Seller; or
(p) Any Warehouse Document ceases to be in full force and effect, or to be enforceable in accordance with its terms, other than due to the fault of Bank.
9.2 Default Remedies. Upon the occurrence of an Event of Default, without any presentment, demand, protest, notice of protest and nonpayment, or other notice of any kind, all of which are hereby expressly waived by Seller, Bank may, in its sole and absolute discretion, immediately: (a) terminate or suspend Seller’s right hereunder to submit any Request to Bank for Bank to purchase Participation Interests; (b) pursuant to the power of attorney conferred to Bank by Seller in connection with this Agreement (and in reliance of Section 10.18 in the event that Bank exercises the following remedy after the occurrence of an Event of Default specified in Sections 9.1(e) or (f)), sell in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as Bank shall reasonably deem satisfactory, any or all rights, titles and interest of Bank and Seller in and to any or all Participated Mortgage Loans and apply the proceeds thereof to the aggregate outstanding Advances made by Bank in connection with such Participated Mortgage Loans and to any other amounts payable to Bank in connection with this Agreement or any other Warehouse Document, in such order and amounts determined by Bank; (c) exercise its rights and remedies under any Pledge Agreement or other Warehouse Document; and/or (d) exercise any other right or remedy otherwise available to Bank under this Agreement or any other Warehouse Document or at law or in equity. Notwithstanding the foregoing, if an Event of Default specified in Sections 9.1(e) or (f) occurs, fees and other sums due hereunder shall become automatically and immediately due and payable, both without any action by Bank and without presentment, demand, protest, notice of protest and nonpayment, notice of acceleration or of intent to accelerate, or any other notice of any kind, all of which are hereby expressly waived, notwithstanding anything contained herein to the contrary.
9.3 Option to Purchase Retained Percentage. Without limiting the generality of Section 9.2, upon the occurrence of an Event of Default, Bank shall have the right at any time, in its sole and absolute discretion, to purchase from Seller the Retained Percentage in any or all Participated Mortgage Loans (the “Retained Interest Purchase Option”). To effect the purchase by Bank from Seller of the Retained Percentage in any Participated Mortgage Loan in connection with the Bank’s exercise of the Retained Interest Purchase Option, Bank shall pay to Seller an amount (the “Retained Interest Purchase
Price”) equal to (a) the then outstanding principal balance of such Participated Mortgage Loan, as of the date of the exercise by Bank of the Retained Interest Purchase Option, multiplied by the Retained Percentage of Seller therein as of such date, less (b) the amount of Bank’s pro rata share of any and all principal payments (which are allocable to Bank’s Participation Interest in such Participated Mortgage Loan), determined in accordance with Bank’s Participation Percentage in effect from time to time for such Participated Mortgage Loan, made on such Participated Mortgage Loan during the period of time commencing on the Purchase Date for such Participated Mortgage Loan and ending on the date of the exercise by Bank of the Retained Interest Purchase Option, but that have not been previously paid to Bank, less (c) the amount of Bank’s pro rata share of any and all interest payments (which are allocable to Bank’s Participation Interest in such Participated Mortgage Loan), determined in accordance with the Participation Interest Rate in effect from time to time for such Participated Mortgage Loan, made on such Participated Mortgage Loan during the period of time commencing on the Purchase Date for such Participated Mortgage Loan and ending on the date of the exercise by Bank of the Retained Interest Purchase Option, but that have not been previously paid to Bank, less (d) the amount of any then-earned and unpaid Funding Fee payable by Seller to Bank hereunder with respect to such Participated Mortgage Loan as of the date of the exercise by Bank of the Retained Interest Purchase Option, less (e) the amount of any and all then-earned and unpaid Administrative Fees payable by Seller to Bank hereunder with respect to such Participated Mortgage Loan as of the date of the exercise by Bank of the Retained Interest Purchase Option, less (f) any other amounts due and payable by Seller to Bank hereunder as of the date of the exercise by Bank of the Retained Interest Purchase Option, by depositing the Retained Interest Purchase Price into the Remittance Account. Effective immediately upon Bank’s deposit into the Remittance Account of the Retained Interest Purchase Price for the Retained Percentage in any Participated Mortgage Loan, without any further action by or notice to any Person, Bank shall have purchased from Seller such Retained Percentage as reflected on Bank’s books and records.
ARTICLE 10
MISCELLANEOUS
10.1 Accounting Principles. Where the character or amount of any asset or liability or item of income or expense is required to be determined or other financial or accounting computation is required to be made for the purposes of this Agreement or any other Warehouse Document, such determination shall be made in accordance with GAAP, except where such principles are inconsistent with the requirements of this Agreement or such other Warehouse Document. In addition, any accounting term used in this Agreement or any other Warehouse Document shall have, unless otherwise specifically provided therein, the meaning customarily given to such term in accordance with GAAP or other method of accounting acceptable to Bank.
10.2 Time. Time is of the essence of each and every term of this Agreement and the other Warehouse Documents.
10.3 Titles of Articles, Sections and Subsections. All titles or headings to articles, sections, subsections or other divisions of this Agreement or any other Warehouse Document or the exhibits or addenda hereto or thereto are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the content of such articles, sections, subsections or other divisions, such content being controlling as to the agreement between the parties hereto.
10.4 Seller’s Status. It is agreed that the relationship of Seller and Bank hereunder shall be that of the seller and purchaser of interests in Mortgage Loans. Seller and Bank are not partners or joint venturers, and nothing contained herein shall be construed to create a partnership, joint venture or similar relationship between the parties. Seller shall not act as or hold itself out to the public as being an agent for Bank, but is to act in all loan origination, administration and servicing matters hereunder for itself and
in its name only, except to the extent that Seller is required under this Agreement to act as a trustee with fiduciary duties to hold for the benefit of Bank the Participated Mortgage Loans and the related Mortgage Loan Documents, and any and all funds and receipts, whether as principal, interest, escrows or otherwise, in respect of any Participated Mortgage Loan, and to make the remittances of any and all such documents and funds as specified in this Agreement. It further is agreed that Seller, as trustee, shall not assign its responsibilities under this Agreement except in accordance with this Agreement.
10.5 Notices. Any and all notices, requests and other communications required or permitted to be given under or in connection with this Agreement or any other Warehouse Document, except as otherwise provided herein or therein, shall be in writing and mailed or sent by electronic mail to the respective address, and to the attention of the designated recipient, provided below for Bank and provided on the signature page of this Agreement for Seller (or to such other address or to such designated recipient, as either party may designate in a written notice to the other party furnished pursuant to this Section). Such notices, requests and other communications so sent shall be deemed to have been given immediately if made by electronic mail (confirmed by concurrent written notice sent first class U.S. mail, postage prepaid), or one (1) day after sending by recognized national overnight courier company, signature of recipient required if to Seller or Bank; any notice, request and other communication sent by any other means shall be deemed made when actually received in writing by the designated recipient of the party to which notice is provided in accordance with this Section. Notwithstanding the foregoing, Requests or communications related to a Request shall not be effective until actually received by Bank. Bank’s address for notices is:
TEXAS CAPITAL BANK, N.A. | ||
2221 Lakeside Boulevard, Suite 800 | ||
Richardson, Texas 75082 | ||
Attention: [***] | ||
E-mail: [***] |
10.6 Amendments and Waivers. Subject to Section 10.7, any provision of this Agreement or any other Warehouse Document may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by all the parties to this Agreement, such Warehouse Document or such other documents, as the case may be. The acceptance of Bank at any time and from time to time of part payment on any amounts payable to Bank hereunder shall not be deemed to be a waiver of the balance of such amounts. No waiver by Bank of any Event of Default shall be deemed to be a waiver of any other then-existing or subsequent Event of Default. No waiver by Bank of any of its rights or remedies under this Agreement, any other Warehouse Document, or otherwise, shall be considered a waiver of any other or subsequent right or remedy of Bank. No delay or omission by Bank in exercising any right or remedy under this Agreement or any other Warehouse Document shall impair such right or remedy or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such right or remedy preclude other or further exercise thereof, or the exercise of any other right or remedy under this Agreement, any other Warehouse Document or otherwise.
10.7 Amendment Due to Government Regulation. Both Bank and Seller understand that Bank is subject to the supervision of various Governmental Authorities. Should any Governmental Authority direct Bank to discontinue any practice set forth herein or to amend the terms hereof, Bank shall take immediate action to do so and shall notify Seller of such action. Seller hereby consents to such action and agrees to enter into any amendment or termination hereof as may be reasonably required by Bank to bring Bank into full compliance with applicable Laws.
10.8 Participations. Seller agrees that Bank may elect, at any time and in its sole discretion, to sell, assign and convey an undivided percentage ownership interest, or grant an undivided participation
interest, in all or any portion of the Participation Interests (or any portion of any such Participation Interest) to one or more financial institutions, private investors and/or other Persons (collectively, “Participants”). Seller further agrees, that Bank may disseminate to any such actual or potential Participants all documents and information (including any and all financial information) which has been or is hereafter provided to or known to Bank in connection with this Agreement and the other Warehouse Documents and the transactions contemplated hereby and thereby, including, information with respect to Seller and each Mortgage Loan in which Bank has purchased a Participation Interest.
10.9 Invalidity. In the event that any one or more of the provisions contained in this Agreement or any other Warehouse Document, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement or the other Warehouse Documents.
10.10 Survival. All covenants, agreements, representations and warranties made herein and in any other Warehouse Document shall continue in full force and effect as long as Bank has the right to purchase Participation Interests hereunder and until all obligations to Bank hereunder and thereunder have been fully satisfied and discharged. Without limiting the generality of the foregoing, termination of this Agreement by either party pursuant to the terms of this Agreement shall not relieve Seller of: (a) its duties, obligations, representations, warranties, covenants, agreements or indemnities which accrued under this Agreement prior to the Advance Request Termination Date or the Agreement Termination Date; or (b) performance of its duties and obligations hereunder so long as there is any Participated Mortgage Loan which does not constitute a Retired Participated Mortgage Loan.
10.11 Successors and Assigns. All covenants and agreements contained by or on behalf of Seller in this Agreement or any Warehouse Document shall bind Seller’s successors and assigns and shall inure to the benefit of Bank and its successors and assigns. Seller shall not, however, have the right to assign its rights under this Agreement or any interest herein, without the prior written consent of Bank, which consent may be withheld by Bank for any reason.
10.12 Renewal. If, as of the Effective Date, Bank holds any outstanding undivided percentage ownership interests (each an “Existing Participation Interest”) in any Mortgage Loan purchased by Bank from Seller pursuant to a written mortgage warehouse agreement or similar written agreement executed by Bank and Seller prior to the Effective Date (as amended or modified from time to time, the “Existing Warehouse Agreement”), then, as of the Effective Date, unless expressly agreed to otherwise by Seller and Bank in writing after the date of the Existing Warehouse Agreement: (a) Seller shall not have any rights under the Existing Warehouse Agreement to request Bank to purchase additional undivided percentage ownership interests in Mortgage Loans, and any and all such requests and purchases on or after the Effective Date shall be governed by the terms and conditions of this Agreement; (b) any and all Existing Participation Interests shall continue to be subject to the terms and conditions of the Existing Warehouse Agreement; (c) the Existing Warehouse Agreement shall automatically terminate and cease to be in force and effect (except with respect to the provisions of the Existing Warehouse Agreement which expressly survive termination) without any action or notice upon such time as (i) pursuant to the terms and conditions of the Existing Warehouse Agreement, with respect to each Mortgage Loan in which Bank purchased an Existing Participation Interest (A) such Mortgage Loan has been sold in its entirety and the full amount of the proceeds of such sale have been received and applied by Bank thereunder or (B) the Existing Participation Interest in such Mortgage Loan has been repurchased in its entirety by Seller and the full amount of the proceeds of such repurchase have been received and applied by Bank thereunder, (ii) Bank has received full and indefeasible payment of all amounts due and payable to Bank pursuant to the Existing Warehouse Agreement, and (iii) Bank has remitted to Seller all sums, if any, required by the Existing Warehouse Agreement to be remitted by Bank to Seller; and (d) the Maximum Participation Amount shall be reduced by the sum, as such sum may vary from time to time, of (i) the Outstanding
Participation Balance calculated with respect to the outstanding Existing Participation Interests plus (ii) all other amounts due and payable to Bank pursuant to the Existing Warehouse Agreement. The terms of this Section supersede and modify any and all inconsistent provisions in any Existing Warehouse Agreement.
10.13 Bank’s Consent or Approval. Except where otherwise expressly provided in this Agreement or the other Warehouse Documents, in any instance under this Agreement or the other Warehouse Documents where the approval, consent or the exercise of judgment of Bank is required: (a) the granting or denial of such approval or consent and the exercise of such judgment shall be (i) within the sole and absolute discretion of Bank and (ii) deemed to have been given only by a specific writing intended for that purpose and executed by Bank; and (b) in order to be effective, such approval, consent or exercise of judgment must be given by Bank prior to the applicable action to be taken by Seller which requires Bank’s approval, consent or exercise of judgment, unless otherwise agreed to in writing by Bank. Each provision for consent, approval, inspection, review, or verification by Bank is for Bank’s own purposes and benefit only.
10.14 Cumulative Rights. The rights and remedies of Bank under this Agreement and any other Warehouse Document shall be cumulative, and shall be in addition to any rights and remedies of Bank at law or in equity.
10.15 Acceptance of Agreement in Texas; Governing Law. Seller has signed this Agreement and submits it to Bank for acceptance at Bank’s offices in Richardson, Collin County, Texas. Seller and Bank shall make all payments and perform all other obligations arising hereunder at Collin County, Texas, and this Agreement is made and entered into at Collin County, Texas. This Agreement and all of the terms and conditions hereof and the rights of the parties hereto shall be governed by and interpreted in accordance with the Laws of the State of Texas and venue for any legal action brought hereunder shall lie in Collin County, Texas or Dallas County, Texas.
10.16 Seller’s Understanding. Seller has read this Agreement and has had the opportunity to seek and/or receive counsel from an attorney of Seller’s choice as to the effects hereof.
10.17 Nature of Transactions.
(a) The relationship established by this Agreement and the other Warehouse Documents between Bank and Seller is that of a seller and purchaser of Participation Interests in Mortgage Loans, and not that of a lender and borrower. Subject to Section 10.17(b), it is the intention of Bank and Seller that: (i) the purchase and sale of each Participation Interest hereunder shall be treated and construed as a sale by Seller to Bank, and the purchase by Bank from Seller, of a certain undivided percentage ownership interest in the related Mortgage Loan and the related Mortgage Loan Documents; and (ii) each sale of a Participation Interest by Seller to Bank, and each purchase of a Participation Interest by Bank from Seller, is a sale of an undivided interest in a promissory note to Bank, and that pursuant to Section 9.109 of the UCC of the State of Texas, Bank and Seller’s characterization of each such sale and purchase of a Participation Interest as a purchase and sale of such Participation Interest shall be conclusive that (A) the transaction is a sale and is not a secured transaction and (B) legal and equitable title has passed to Bank in the Mortgage Loan and Mortgage Loan Documents in which Bank acquired such Participation Interest.
(b) Neither Party has made or hereby makes any representations or warranties to the other Party, and hereby disclaims any such representations or warranties, regarding the accounting or tax treatment to be applied to any Participation Interest (including whether any
such Participation Interest qualifies for “sale” treatment under any applicable accounting rules, regulations or standards). Each Party hereby agrees that it has and will make its own independent determination regarding the accounting and tax treatment to be applied to each Participation Interest, and has not relied upon the other Party in any manner in making such determination. The accounting or tax treatment applied by any Party with respect to any Participation Interest shall not be binding upon the other Party, shall not be used by the other Party in any manner inconsistent with, and shall not affect, the Parties’ intent hereunder that any and all transaction pursuant to which Bank pays a Purchase Price to Seller is for a sale by Seller to Bank, and the purchase by Bank from Seller, of a certain undivided percentage ownership interest in the related Mortgage Loan and Mortgage Loan Documents and that legal and equitable title has passed to Bank in the Mortgage Loan in which Bank acquired such Participation Interest.
(c) If any court of competent jurisdiction shall deem any transaction involving Bank, Seller or any Participation Interest governed by this Agreement to be a loan, extension of credit or a secured financing, or if any court of competent jurisdiction shall determine that any purported Participation Interest in any purported Participated Mortgage Loan (or any portion thereof) is the property of Seller or shall otherwise not have been sold by Seller to, and purchased by, Bank, as contemplated herein, then notwithstanding anything herein or in any other Warehouse Document to the contrary: (i) as of the Effective Date, Bank shall have (and Seller shall have been deemed to have pledged, assigned and granted to Bank) a first priority security interest in and to the Collateral to secure the prompt and complete payment and performance of any and all of Seller’s indebtedness and obligations to Bank under this Agreement and the other Warehouse Documents; and (ii) any and all amounts received by Bank with respect to any Participated Mortgage Loan may be applied in such order and priority as Bank may determine. For this purpose, this Agreement shall constitute a security agreement in accordance with the UCC, and Bank shall have all the rights of a secured creditor with respect to such security.
10.18 Repurchase Agreement. It is expressly stipulated to be the intent of Bank and Seller, and understood and agreed by Bank and Seller, that (a) this Agreement constitutes a “repurchase agreement” under Section 101(47) of the Bankruptcy Code and (b) pursuant to Sections 362(b), 555 and 559 of the Bankruptcy Code, the rights of Bank under this Agreement related to the sale and repurchase of Mortgage Loans (including, the rights of Bank hereunder, upon the occurrence of an Event of Default, to liquidate and/or foreclose on the Mortgage Loans in which it holds Participation Interests) shall not be stayed, avoided or otherwise limited by the operation of any provision of the Bankruptcy Code.
10.19 Usury Savings Provision. It is expressly stipulated to be the intent of Bank and Seller, and understood and agreed by Bank and Seller, that this Agreement: (a) does not represent a loan from Bank to Seller; and (b) allows Bank to purchase the Participation Interests for its own account and for a short term investment. If, notwithstanding the foregoing or the terms of this Agreement, a court of competent jurisdiction establishes a loan or extension of credit within this Agreement from Bank to Seller, then the parties to this Agreement hereby understand, acknowledge and agree that in such event: (a) Seller shall be the underlying obligor of that loan or extension of credit established by such court of competent jurisdiction; (b) Seller is utilizing the proceeds of that loan or extension of credit established by such court of competent jurisdiction for business, commercial, investment, or similar purposes; and (c) Seller has determined that it is beneficial to use any and all proceeds of that loan or extension of credit established by such court of competent jurisdiction to establish collateral for that loan or extension of credit established by such court of competent jurisdiction by: (i) making deposits at Bank; (ii) purchasing certificates of deposit from Bank; and/or (iii) establishing other accounts at Bank. Furthermore, it is Bank’s and Seller’s intention and agreement that if a court of competent jurisdiction establishes a loan or extension of credit from Bank to Seller under this Agreement, then any proceeds of that loan or extension of credit established by such court of competent jurisdiction deposited with Bank as additional collateral
for that loan or extension of credit: (a) shall be considered a compensating balance under and pursuant to Section 276.003 of the Texas Finance Code; and (b) shall not be considered a reduction in the amount of the proceeds of that loan and/or extension of credit from Bank to Seller. Additionally, it is the stipulated, understood and agreed to be the intent of Bank and Seller that this Agreement shall at all times comply strictly with the applicable Texas law governing the maximum rate or amount of interest payable on the Indebtedness (as hereinafter defined), if any, or applicable United States federal law to the extent that such law permits Bank to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law. For purposes of this provision, “Indebtedness” shall mean all indebtedness, if any, evidenced, referenced, described, or established by a court of competent jurisdiction under this Agreement, and all amounts payable in the performance of any covenant or obligation in any of the other documents or any other communication or writing by or between Bank and Seller related to the transaction or transactions that are the subject matter of this Agreement, or any part of such Indebtedness, if any. If the applicable law is ever judicially interpreted so as to render usurious any amount contracted for, charged, taken, reserved or received in respect of the Indebtedness, if any, including by reason of the acceleration of the maturity or the prepayment thereof, then it is Bank’s and Seller’s express intent that all amounts charged in excess of the Maximum Lawful Rate (as hereinafter defined), if any, shall be automatically canceled, ab initio, and all amounts in excess of the Maximum Lawful Rate theretofore collected by Bank, if any, shall be credited on the principal balance of the Indebtedness, if any, or, if the Indebtedness, if any, has been or would thereby be paid in full, refunded to Seller, and the provisions of this Agreement and any underlying documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable laws, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, if the Indebtedness has been paid in full before the end of the stated term hereof, then Bank and Seller agree that Bank shall, with reasonable promptness after Bank discovers or is advised by Seller that interest was received in an amount in excess of the Maximum Lawful Rate, either credit such excess interest against the Indebtedness then owing by Seller to Bank and/or refund such excess interest to Seller. If and to the extent Indebtedness is determined to exist by a court of competent jurisdiction, then Seller hereby agrees that as a condition precedent to any claim seeking usury penalties against Bank, Seller will provide written notice to Bank, advising Bank in reasonable detail of the nature and amount of the violation, and Bank shall have sixty (60) days after receipt of such notice in which to correct such usury violation, if any, by either refunding such excess interest to Seller or crediting such excess interest against the Indebtedness, if any, then owing by Seller to Bank. All sums contracted for, charged, taken, reserved or received by Bank for the use, forbearance or detention of Indebtedness, if any, shall, to the extent permitted by applicable law, be amortized, prorated, allocated or spread, using the actuarial method, throughout the stated term of this Agreement (including any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of the Indebtedness, if any, does not exceed the Maximum Lawful Rate from time to time in effect and applicable to the Indebtedness, if any, for so long as debt is outstanding. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving tri-party accounts) apply to this Agreement or any other part of the Indebtedness, if any. If and to the extent any Indebtedness is determined to exist under this Agreement by a court of competent jurisdiction, then notwithstanding anything to the contrary contained herein or in any of underlying documents referenced herein, it is not the intention of Bank to accelerate the maturity of any interest, if any, that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. If and to the extent any Indebtedness is determined to exist under this Agreement by a court of competent jurisdiction, then the terms and provisions of this paragraph shall control and supersede every other term, covenant or provision contained herein, in any of the other underlying documents referenced within this Agreement or in any other document or instrument pertaining to the Indebtedness. As used herein, the term “Maximum Lawful Rate” shall mean the maximum lawful rate of interest which may be contracted for, charged, taken, received or reserved in accordance with the applicable Laws of the State of Texas (or applicable United States federal law to the
extent that such law permits Bank to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law), taking into account all fees, charges and any other value whatsoever made in connection with the transaction evidenced by this Agreement. To the extent United States federal law permits contracting for, charging, taking, receiving or reserving a greater amount of interest than under Texas law, then such United States federal law will be relied upon instead of Texas law for the purpose of determining the Maximum Lawful Rate. Additionally, if and to the extent any Indebtedness is determined to exist under this Agreement by a court of competent jurisdiction, to the extent permitted by applicable law now or hereafter in effect, Bank may, at its option and from time to time utilize any other method of establishing the Maximum Lawful Rate under Texas law or under other applicable law by giving notice, if required, to Seller as provided by such applicable law now or hereafter in effect.
10.20 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER WAREHOUSE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
10.21 Joint and Several Liability. The liability of all Persons obligated to Bank in any manner under this Agreement shall be joint and several. If more than one Person shall execute this Agreement as “Seller”, then the term “Seller” as used herein and in the other Warehouse Documents shall refer both to each such Person individually and to all such Persons collectively.
10.22 Electronic Processing.
(a) Seller acknowledges that Bank may employ one or more electronic processes and systems with respect to the transactions contemplated by this Agreement, including the purchase of Participation Interests in Mortgage Loans and the sale of such Participation Interests to Take-Out Purchasers. Seller shall cooperate with Bank with respect to the implementation of any such electronic document processes or systems.
(b) With respect to the Mortgage Loan Documents for Participated Mortgage Loans, Seller may use electronic services, process and systems for the execution thereof only with the Bank’s prior written consent, which approval may be conditioned by Bank upon, among other things, the following: (i) full, unrestricted access by Bank to all electronic reports, records and data related thereto; (ii) cooperation on the part of Seller with respect to access and turnover of such reports, records and data to Bank; and (iii) recognition agreements with third party service providers and vendors, in form and content satisfactory to Bank.
10.23 Electronic Transmission of Data. Bank and Seller agree that certain data related to Mortgage Loans (including confidential information, documents, applications and reports) and the transactions contemplated by this Agreement may be transmitted electronically, including over the Internet and/or through the use of the Electronic Platform. This data may be transmitted to, received from or circulated among agents and representatives of Seller and/or Bank and their affiliates, and other Persons involved with the subject matter of this Agreement.
10.24 Force Majeure. Bank shall not be responsible for any failure or delay of Bank in its performance hereunder by reason of fire, flood or other acts of God, lockout, acts of public enemy, riot, insurrection or any interruption, failure or defects in Internet, telephone or other interconnection service or in electronic or mechanical equipment or any other cause beyond the reasonable control of Bank
(“Force Majeure Event”). During the duration of any Force Majeure Event, Bank will use commercially reasonable efforts to avoid or remove such Force Majeure Event and will take reasonable steps to resume its performance under this Agreement with the least possible delay.
10.25 Limitation of Liability. Neither each Party hereto shall have any liability with respect to, and the other Party hereto hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, consequential or punitive damages suffered or incurred by the other Party in connection with, arising out of, or in any way related to, this Agreement or any of the other Warehouse Document, or any of the transactions contemplated by this Agreement or any of the Warehouse Document.
10.26 Confidentiality.
(a) The Parties hereby acknowledge and agree that all information provided on, before, or after the Effective Date by or on behalf of one Party or its affiliates, officers, directors, employees, representatives, agents or advisors (collectively, the “Disclosing Party”) to the other Party or its Permitted Recipients (collectively, the “Receiving Party”) in connection with any Warehouse Document or the transactions contemplated hereby which the Receiving Party knows or reasonably should know is the confidential or proprietary information of the Disclosing Party, including (i) all information relating to the business, operations and affairs of the Disclosing Party (including internal operating procedures, methodologies, strategies, trade secrets, sales data, vendor data and customer lists, financial plans, projections and reports), (ii) all property owned, licensed and/or developed by or for the Disclosing Party or its affiliates, such as computer systems, programs, software and devices (including information about the design, methodology and documentation therefor), (iii) the terms of this Agreement and the other Warehouse Documents (including the outline of the proposed terms of the transactions contemplated hereby contained in any and all term sheets provided by Bank to Seller); and (iv) all “nonpublic personal information” of “customers” and “consumers” (as each is defined in the GLB Act) (collectively “Confidential Information”), shall be kept confidential by the Receiving Party and shall not be divulged by the Receiving Party to any Person without the prior written consent of the Disclosing Party except to the extent set forth in Section 10.26(b). Notwithstanding anything herein to the contrary, Confidential Information shall not include information of the Disclosing Party that: (i) is expressly permitted to be disclosed by the Receiving Party pursuant to and in accordance with any other provisions of this Agreement or the other Warehouse Documents; (ii) is or becomes generally available to the public (through no action or inaction in breach of this Agreement by the Receiving Party); (iii) was in the Receiving Party’s possession or known by the Receiving Party without obligations of confidentiality owed to the Disclosing Party prior to receipt from the Disclosing Party; (iv) was rightfully disclosed to the Receiving Party by a third-party without obligations of confidentiality owed to the Disclosing Party, or (v) was independently developed by the Receiving Party without use or access to the Confidential Information. Each Party agrees to take reasonable precautions to protect Confidential Information from disclosure in violation of this Section.
(b) Any Receiving Party shall be permitted to disclose, on a confidential basis, Confidential Information to: (i) its officers, directors, employees, legal counsel and auditors (“Permitted Recipients”), but only to the extent necessary in connection with the transactions contemplated hereby; (ii) taxing authorities and of Governmental Authorities, but only to the extent necessary to comply with applicable Law; (iii) any bank examiner, auditor or regulatory authority or supervisory authority that has jurisdiction over such Receiving Party or otherwise in connection with any audit or examination of such Receiving Party by any such bank examiner, auditor or authority. Any Receiving Party may disclose Confidential Information in connection
with any litigation or other legal proceeding if required under applicable Law, and subject to the following: (i) to the extent permitted by applicable Law, the Receiving Party shall promptly notify the Disclosing Party in writing of the litigation or other proceeding involving the potential disclosure of Confidential Information, whereupon the Disclosing Party may seek an appropriate protective order or other relief (at the Disclosing Party’s sole expense) and the Receiving Party shall cooperate with the Disclosing Party (at the Disclosing Party’s sole expense) to obtain such order or relief; and (ii) Receiving Party shall exercise reasonable efforts to limit the disclosure to only that portion of the Confidential Information which is necessary to comply with applicable Law. In addition, Bank may disclose Confidential Information: (i) to an actual Participant or to a potential Participant pursuant to the provisions of Section 10.8; (ii) if an Event of Default has occurred and Bank has determined that the disclosure of Confidential Information is necessary or desirable in connection with the marketing and sale of Participated Mortgage Loans or the enforcement or exercise of Bank’s rights or remedies under the Warehouse Documents.
(c) The Parties 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 Party agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable privacy and data protection Laws binding upon such Party. Each Party shall implement such physical and other security measures as shall be necessary to: (i) ensure the security and confidentiality of the “nonpublic personal information” of “customers” and “consumers” (as those terms are defined in the GLB Act); (ii) protect against any threats or hazards to the security and integrity of such nonpublic personal information; and (iii) protect against any unauthorized access to or use of such nonpublic personal information. Each Party shall, at a minimum establish and maintain such data security program as is necessary to meet the objectives of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth in the Code of Federal Regulations at 12 C.F.R. Parts 30, 168, 208, 211, 225, 263, 308 and 364. Upon request, each Party will provide evidence reasonably satisfactory to allow the other Party to confirm that the providing Party has satisfied its obligations as required under this Section. Each Party shall notify the other Party immediately following discovery of any breach or compromise of the security, confidentiality or integrity of nonpublic personal information of customers and consumers related to the Confidential Information.
10.27 Other Facilities.
(a) Reserved.
(b) Any and all Liens at any time securing the Other Obligations shall also secure any and all obligations and liabilities of Seller under the Warehouse Documents. Any and all Liens at any time securing the obligations and liabilities of Seller under the Warehouse Documents shall also secure the Other Obligations.
(c) The documents evidencing, securing or otherwise governing or pertaining to the Other Obligations in effect as of the Effective Date hereof are hereby modified and amended in accordance with the provisions of this Section.
10.28 Inconsistencies. To the extent of any conflict between the provisions of this Agreement and the provisions of any other Warehouse Document, the provisions of this Agreement shall govern and control. To the extent of any conflict between the provisions of any Warehouse Document and the provisions of the Warehouse Program Guide, subject to Section 5.13(a), the provisions of the Warehouse Program Guide shall govern and control.
10.29 Counterparts. To facilitate execution, this Agreement may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all Persons required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto. Any signature page to any counterpart may be detached from such counterpart without impairing the legal effect of the signatures thereon and thereafter attached to another counterpart identical thereto except having attached to it additional signature pages.
10.30 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER WAREHOUSE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Signature Pages Follow]
EXECUTED by Seller to be effective as of the Effective Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION | ||
By: | /s/ JOSEPH RUHLIN | |
Name: | JOSEPH RUHLIN | |
Title: | TREASURER | |
Execution Date: September 2 , 2020 |
Seller’s Contact Information for Notices: | ||
HOME POINT FINANCIAL CORPORATION | ||
2211 OLD EARHART ROAD, SUITE 250 | ||
ANN ARBOR, MI 48105 | ||
Attention: |
JOSEPH RUHLIN
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Phone: |
[***]
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E-mail: |
[***]
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WITH A COPY TO:
CHIEF LEGAL OFFICER [***] |
[Bank’s Signature Page Follows]
ACCEPTED AND AGREED to by Bank at Richardson, Collin County, Texas, and executed to be effective as the Effective Date.
BANK: | ||
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION | ||
By: | /s/ Heather Crawford | |
Name: | Heather Crawford | |
Title: | Vice President | |
Execution Date: September 3 , 2020 |
EXHIBIT LIST
Exhibit A | - | Power of Attorney |
Exhibit B | - | Pledge Agreement |
Exhibit C | - | Reserved |
Exhibit D | - | UCC-1 Financing Statement |
Exhibit E | - | Financial Covenants Addendum |
Exhibit F | - | Supplemental Provisions Addendum |
Exhibit G | - | List of Current Warehouse Facilities |
Exhibit H | - | List of Current Affiliate Escrow Agents |
Exhibit I | - | Blanket Assignment |
EXHIBIT A
(TO MORTGAGE WAREHOUSE AGREEMENT)
POWER OF ATTORNEY
[Follows This Cover Page]
LIMITED POWER OF ATTORNEY
Pursuant to that certain Mortgage Warehouse Agreement (as amended or modified from time to time, the “Warehouse Agreement”) entered into as of AUGUST 5, 2020 by the undersigned (“Seller”) and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”), relating to Bank’s discretionary purchase of Participation Interests in Mortgage Loans, Seller hereby irrevocably appoints Bank and each officer of Bank as its attorney-in-fact, with full power of substitution, for, on behalf of, and in the name of Seller, to: (a) endorse and deliver to any Person any notes, checks, drafts, money orders or other instruments of payment coming into Bank's possession and representing any payment made on or with respect to any Participated Mortgage Loan or otherwise received in connection with any Participated Mortgage Loan (including the proceeds from the sale of any such Participated Mortgage Loan received from a Take-Out Purchaser), and any collateral and any Take-Out Purchase Agreement therefor; (b) prepare, complete, execute, deliver and record, and do anything else necessary or desirable to effect, (i) any endorsement to Bank, any Take-Out Purchaser or any other Person, of any Mortgage Note evidencing a Participated Mortgage Loan, or (ii) any transfer, assignment or conveyance to Bank, any Take-Out Purchaser or any other Person, of any or all rights, titles and interests in and to any Mortgage Note and the Mortgage Loan Documents related thereto in which Bank has purchased a Participation Interest (including servicing rights); (c) do anything necessary or desirable to effect the sale, transfer, assignment or conveyance, of any or all rights, titles and interests of Seller and/or Bank in and to any Participated Mortgage Loan and the related Mortgage Loan Documents related thereto to any Take-Out Purchaser or any other Person; (d) commence, prosecute, settle, discontinue, defend, or otherwise dispose of any claim relating to any Take-Out Purchase Agreement or any Participated Mortgage Loan; (e) sign Seller's name wherever appropriate, as determined by Bank, to effectuate the purposes of the Warehouse Agreement; and (f) to take any such further action as Bank may deem appropriate, and to act under changed circumstances, the exact nature of which may not be currently foreseen or foreseeable, in order to fully and completely effectuate Bank's rights under tile Warehouse Agreement. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Warehouse Agreement.
The powers and authorities herein conferred on Bank may be exercised by Bank through any Person who, at the time of the execution of a particular instrument, is an officer of Bank. The limited power of attorney conferred herein is granted for a valuable consideration and is coupled with an interest and, therefore, is irrevocable so long as any duties or obligations to Bank under the Warehouse Agreement or the other Warehouse Documents, or any part thereof, shall remain unpaid or otherwise unsatisfied, and so long as Bank may elect to purchase Participation Interests under the Warehouse Agreement.
This appointment shall be construed in accordance with the Laws of the State of Texas, and venue for any proceeding hereunder shall lie exclusively in Collin County, Texas or Dallas County, Texas.
Dated effective as of the Effective Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | /s/ JOSEPH RUHLIN | |
Name: | JOSEPH RUHLIN | |
Title: | TREASURER |
***
STATE OF Michigan | § |
§ | |
COUNTY OF Washtenaw | § |
This document was acknowledged before me on the 2nd day of September, 2020, by JOSEPH RUHLIN, TREASURER of HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION, known to me to be the person who executed this document in the capacity and for the purposes therein stated.
[***] | /s/ [***] |
Notary Public, State of Michigan | Notary Public, State of Michigan |
County of Oakland | |
My Commission Expires [***] | |
Acting in the county of Washtenaw | |
[NOTARY STAMP] |
EXHIBIT B
(TO MORTGAGE WAREHOUSE AGREEMENT)
PLEDGE AGREEMENT
[Follows This Cover Page]
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this “Pledge Agreement”) is executed made and entered into as of AUGUST 5, 2020 (but effective as of the Effective Date), by HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION (“Seller”), and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”).
RECITALS
A. Pursuant to that certain Mortgage Warehouse Agreement entered into as of AUGUST 5, 2020 by Bank and Seller, as may have been amended or modified from time to time (the “Warehouse Agreement”), Bank has agreed, on a discretionary basis, to purchase Participation Interests in various Mortgage Loans subject to the terms and conditions of the Warehouse Agreement.
B. As partial consideration for Bank entering into the Warehouse Agreement and/or for Bank to now or hereafter elect to purchase Participation Interests subject to the terms and conditions of the Warehouse Agreement, Seller has agreed, pursuant to the terms and conditions of this Pledge Agreement, to assign and pledge to Bank, and grant Bank a security interest in and to, the Collateral described herein.
AGREEMENT
NOW, THEREFORE, for and in consideration of the matters set forth above and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Warehouse Agreement. In addition, as used in this Pledge Agreement, the following terms shall have the meanings set forth below:
“Collateral” shall mean: (a) all rights, titles and interests of Seller in and to each depository and other account established by Seller at Bank, and all funds therein contained and all earnings thereon and proceeds thereof, including, without limitation, the Accounts more particularly described on Schedule 1 attached hereto (collectively, the “Accounts”); and (b) any and all other property included in the definition of “Collateral” as such term is defined in the Warehouse Agreement.
“Event of Default” shall mean any “Event of Default” as such term is defined in the Warehouse Agreement or any other Warehouse Document.
“Secured Obligations” shall mean the Repurchase/Sale Obligations and any and all other indebtedness, obligations and liabilities of Seller to Bank of any kind or character under the Warehouse Agreement or any other Warehouse Document, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several.
2. Seller hereby pledges and assigns and grants to Bank a continuing security interest in and to the Collateral to secure the prompt and complete payment and performance of the Secured Obligations.
3. If any Event of Default should occur, then Bank may enforce this Pledge Agreement in any manner provided hereunder or at Law or in equity or otherwise. Without limiting the generality of
the foregoing, if an Event of Default shall have occurred, then Bank may, at its discretion, apply or use any cash held in the Accounts (to the extent of the withdraw value of each Account), and any cash proceeds received by Bank in respect of any sale or other disposition of, collection from, or other realization upon all or any part of the Collateral, towards the satisfaction of the Secured Obligations (provided that Seller shall continue to be liable for any unsatisfied portion of the Secured Obligations). Should an Event of Default occur, Bank may proceed against the Collateral without exhausting its remedies against any Person liable under or with respect to the Warehouse Agreement or any other Warehouse Document or against any other security therefor, whether in court, by foreclosure, by private sale or otherwise, at which Bank may be a purchaser, and without making any election.
4. Except for Liens in favor of Bank: (a) as of the Effective Date, no Lien exists on any of the Collateral; and (b) at all times on and after the Effective Date, Seller will not create, incur or suffer to exist any Lien on any of the Collateral.
5. Nothing in this Pledge Agreement shall be construed as requiring Bank to enforce this Pledge Agreement. Bank's failure to do so on one or more occasions shall not affect Bank's right so to do; nor will enforcement of this Pledge Agreement for less than the full value of any Account impair the effectiveness of this Pledge Agreement as to the remaining value thereof. Bank may elect to enforce its rights under the Warehouse Agreement or any other Warehouse Document without resort to the remedies provided in this Pledge Agreement.
6. From and after the occurrence of an Event of Default, Seller authorizes Bank, at Bank's option, to collect and receive any and all sums becoming due upon the Collateral, such sums to be held by Bank without liability for interest thereon and applied toward the Secured Obligations. Subject to the terms hereof and the Warehouse Agreement, Bank shall have the full control of each Account until it is released in accordance herewith. All interest, if any, earned on the Accounts prior to an Event of Default shall be paid to Seller.
7. Included within Bank's rights and remedies provided for herein is the right of Bank to sell the Collateral at public or private sale to the highest bidder for cash pursuant to the requirements of the UCC. Notice of each such sale shall be provided, and such sale shall be conducted, by Bank in accordance with the requirements of the UCC. Bank shall transfer to the purchaser at such sale said Collateral, and the recitals in such transfer shall be prima facie evidence of the truth of the matters therein stated, and all prerequisites to such sale required hereunder and under the Laws of Texas shall be presumed to have been performed. The proceeds of the sale shall be applied as follows: (a) first, to Bank's reasonable expenses of the sale; (b) then, towards the satisfaction of the Secured Obligations and/or any other amounts secured hereby; and (c) the balance, if any, including any surplus, to Seller. Bank shall have the right to purchase at such public sale, being the highest bidder thereof.
8. Bank, in addition to the rights and remedies provided for in the preceding paragraphs, shall have all other rights and remedies of a secured party under the UCC, and shall have the common law rights of set off and banker's lien, and Bank shall be entitled to avail itself of all such other rights and remedies as may be now or hereafter existing at Law or in equity for the performance of the Secured Obligations, and the foreclosure of the security interest created hereby and the resort to any remedy provided hereunder or provided by the UCC, or by any other Law of the State of Texas, shall not prevent the concurrent exercise or enforcement of any other appropriate remedy or remedies.
9. The requirement of reasonable notice to Seller of the time and place of any public sale of the Collateral, or of the time after which any private sale or any other intended disposition thereof is to be made, shall be met if such notice is mailed, postage prepaid, to Seller at the notice address set forth in the
Warehouse Agreement, at least ten (10) days before the date of any public sale or at least ten (10) days before the time after which any private sale or other disposition is to be made.
10. Nothing in the foregoing shall be construed as requiring Bank to enforce this security or to resort to the security hereof in any particular manner excluding other rights or remedies. Bank's failure to enforce this security in any fashion on one or more occasions shall not affect its right so to do; nor will enforcement hereof for less than the full extent or value of the Account impair the effectiveness of the security hereof as to any remaining value or interest thereof. Bank may proceed first to enforce the Secured Obligations without resort to the remedies provided in this Pledge Agreement; in such event the terms of the Warehouse Agreement and the other Warehouse Documents alone shall be controlling and no provisions hereof shall be construed as requiring Bank to perform any condition precedent to the enforcement of such duties and obligations and the security therefor against any and all Persons liable therefor nor prevent the continued holding of the Accounts or other Collateral and the collection of sums thereunder for proper application to the duties and obligations of the Warehouse Agreement.
11. Bank may remedy any Event of Default, without waiving the same, or may waive any Event of Default without waiving any prior or subsequent Event of Default.
12. The security interest herein created shall not be affected by or affect any other security taken for the performance of the duties or obligations under the Warehouse Agreement hereby secured, or any part thereof, and any extensions may be made for the performance of such duties and obligations without affecting the priority of this Pledge Agreement or the validity thereof. Bank and its successors shall not be limited by any election of remedies if it chooses to foreclose this security interest by suit. The right to sell under the terms hereof shall also exist cumulative with said suit and one method shall not bar the other, but both may be exercised at the same or different times; provided; however that one shall not be a defense to the other.
13. Seller represents to and covenants and agrees with Bank that Seller will at any time or from time to time, upon the written request of Bank, execute and deliver such further documents and do such other acts and things as Bank may specify for the purpose of further assurance and of effecting the purposes of this Pledge Agreement, and otherwise do any and all things and acts whatsoever which Bank may request in order to perfect this Pledge Agreement and the security interests created thereby.
14. The Law governing this Pledge Agreement shall be the UCC and other applicable Laws of the State of Texas, and this Pledge Agreement shall be performable in Collin County, Texas. Except as otherwise provided herein, all terms used herein which, are defined in the Texas Business and Commerce Code shall have the same meaning herein as in said Code.
15. If any clause or provision of this Pledge Agreement is illegal, invalid, or unenforceable, under present or future Laws effective during the term hereof, then it is the intention of the parties hereto that the remainder of this Pledge Agreement shall not be affected thereby. It is also the intention of the parties hereto that in lieu of each clause or provision that is illegal, invalid or unenforceable, there be added as a part of this Pledge Agreement a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable.
16. The Accounts are delivered herewith or are authorized to be held by Bank.
17. The term of this Pledge Agreement shall begin on the Effective Date and shall expire ten (10) days after the date on which: (a) the Warehouse Agreement has terminated in accordance with its terms; and (b) all of the Secured Obligations, and all other indebtedness, obligations and liabilities (if any) secured hereby, have been fully satisfied, paid and performed, as confirmed in writing by Bank on or after
the termination date of the Warehouse Agreement. This Pledge Agreement shall be binding upon Seller and inure to the benefit of Bank and its successors and assigns. Seller may not transfer or assign its duties or obligations hereunder without the prior written consent of Bank.
18. The liability of all Persons obligated to Bank in any manner under this Pledge Agreement shall be joint and several. If more than one Person shall execute this Pledge Agreement as “Seller”, then the term “Seller” as used herein shall refer both to each such Person individually and to all such Persons collectively.
19. THIS WRITTEN AGREEMENT AND THE OTHER WAREHOUSE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Signature Page Follows]
EXECUTED by Seller to be effective as of the Effective Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION | ||
By: | /s/ JOSEPH RUHLIN | |
Name: | JOSEPH RUHLIN | |
Title: | TREASURER |
AGREED TO AND ACCEPTED BY BANK AT RICHARDSON,
COLLIN COUNTY, TEXAS, AS OF THE EFFECTIVE DATE:
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION | ||
By: | /s/ Heather Crawford | |
Name: | Heather Crawford | |
Title: | Vice President |
SCHEDULE 1
(TO PLEDGE AGREEMENT)
LIST OF ACCOUNTS
Account Name | Account Number |
Pledged Account | [***] |
Participation Account | [***] |
Remittance Account | [***] |
EXHIBIT C
(TO MORTGAGE WAREHOUSE AGREEMENT)
[Reserved]
EXHIBIT D
(TO MORTGAGE WAREHOUSE AGREEMENT)
UCC-1 FINANCING STATEMENT
[Follows This Cover Page]
UCC-1 FINANCING STATEMENT
SCHEDULE OF COLLATERAL
DEBTOR: | HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION |
SECURED PARTY: | TEXAS CAPITAL BANK, NATIONAL ASSOCIATION |
Capitalized terms used but not otherwise defined in this UCC-1 Financing Statement Schedule of Collateral shall have the meanings given to such terms in the UCC-1 Financing Statement Schedule of Defined Terms attached hereto and made a part hereof for all purposes. Unless otherwise defined in the UCC-1 Financing Statement Schedule of Defined Terms or in this UCC-1 Financing Statement Schedule of Collateral, all capitalized terms used herein shall have the meanings given to such terms in the UCC.
This Financing Statement covers any and all rights, titles and interests of Debtor in and to any and all Participated Mortgage Loans, wherever the foregoing is located, in which Debtor now has or at any time hereafter has or acquires any right, title or interest, and all Product and Proceeds thereof (collectively, the “Collateral”). Without limiting the generality of the foregoing, the term Collateral shall include all rights, titles and interests of Debtor in and to the following, wherever the following is located, in which Debtor now has or at any time hereafter has or acquires any right, title or interest, and all Products and Proceeds thereof:
1. | (a) the Mortgage Notes evidencing the Participated Mortgage Loans; (b) the Security Instruments securing the Participated Mortgage Loans and the other Mortgage Loan Documents related to the Participated Mortgage Loans; and (c) any and all other documents relating to the Participated Mortgage Loans (including, without limitation, any and all surveys, appraisals and title insurance commitments and policies); |
2. | (a) all of the rights of Debtor to the payment of money (including, without limitation, tax refund, insurance proceeds and condemnation proceeds) relating to the Participated Mortgage Loans or the Residential Real Properties securing same; and (b) any other rights ancillary to or securing or relating to the Participated Mortgage Loans; |
3. | all guaranties, bonds, insurance policies and commitments relating to the Participated Mortgage Loans; |
4. | all agreements entered into by Debtor relating to the Participated Mortgage Loans; |
5. | (a) all Take-Out Purchase Agreements related to the Participated Mortgage Loans; and (b) all rights to sell and deliver Participated Mortgage Loans to purchasers thereof; |
6. | all proceeds from the sale, financing or other disposition of the Participated Mortgage Loans; |
7. | all Mortgage Backed Securities secured by, created from or representing any interest in the Participated Mortgage Loans; |
8. | (a) all rights to service, administer or collect the Participated Mortgage Loans; and (b) (i) all agreements pursuant to which Debtor undertakes to service, administer or collect the Participated |
Mortgage Loans and (ii) all rights to the payment of money on account of such servicing, administration or collection activities; | |
9. | all purchase agreements, credit agreement or other agreements pursuant to which Debtor acquired the Participated Mortgage Loans and all other agreements, documents or instruments executed in connection therewith; |
10. | the Deposit Accounts and any and all funds now or hereafter deposited in or otherwise contained in the Deposit Accounts, including, without limitation, any and all interest and other earnings thereon; |
11. | all data, files (including, without limitation, credit files), books, records (including, without limitation, servicing records), correspondence and accounting records, whether in electronic or written form, and software, computer files, computer programs, printouts and other electronic materials or records related to the Participated Mortgage Loans (including, without limitation, all of the foregoing items necessary to administer, service and collect the Participated Mortgage Loans); and |
12. | all Accounts, chattel paper, commercial tort claims, deposit accounts, documents, financial assets, general intangibles, instruments, investment property, securities, securities accounts and other personal property of Debtor of any kind or type, in each case related to the Participated Mortgage Loans. |
UCC-1 FINANCING STATEMENT
SCHEDULE OF DEFINED TERMS
“Borrower” shall mean any Person who is an obligor on or under a Mortgage Loan.
“Debtor” (whether one or more) shall mean each Person identified as “Debtor” in the UCC-1 Financing Statement Schedule of Collateral to which this UCC-1 Financing Statement Schedule of Defined Terms is attached. If the term “Debtor” includes more than one Person, then the term “Debtor” as used herein shall refer both to each such Person individually and to all such Persons collectively.
“Deposit Accounts” shall mean those certain deposit accounts established by Debtor and maintained at Secured Party pursuant to the Warehouse Agreement.
“Laws” shall mean all statutes, laws, ordinances, regulations, rules, orders, writs, injunctions or decrees of the United States, any city or municipality, state, commonwealth, nation, country, territory, possession, or any Tribunal.
“Mortgage Backed Security” shall mean a mortgage pass-through security, collateralized mortgage obligation, real estate mortgage investment conduit or other security that: (a) is based on and backed by an underlying pool of mortgage loans; and (b) provides for payment by its issuer to its holder of a specified principal installments and/or fixed or floating rate of interest on the unpaid balance and for all prepayments to be passed through to its holder.
“Mortgage Loan” shall mean a residential mortgage loan evidenced by a Mortgage Note and secured by a Security Instrument.
“Mortgage Loan Documents” shall mean, with respect to any Mortgage Loan, the Mortgage Note evidencing such Mortgage Loan, the Security Instrument securing such Mortgage Loan and all other agreements, instruments and documents governing, evidencing, guaranteeing or relating to such Mortgage Loan, Mortgage Note or Security Instrument.
“Mortgage Note” shall mean, with respect to any Mortgage Loan, a full recourse promissory note evidencing such Mortgage Loan and secured by a Security Instrument.
“Participated Mortgage Loan” shall mean any Mortgage Loan in which Secured Party has elected to purchase a Participation Interest from Debtor pursuant to the terms and conditions of the Warehouse Agreement. A Mortgage Loan in which Secured Party has purchased a Participation Interest shall cease to be a Participated Mortgage Loan under the Warehouse Agreement (and shall cease to be a Participated Mortgage Loan for purposes of the UCC-1 Financing Statement Schedule of Collateral to which this UCC-1 Financing Statement Schedule of Defined Terms is attached) at such time as such Mortgage Loan is a Retired Participated Mortgage Loan.
“Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other form of entity.
“Products and Proceeds” shall mean: (a) any and all “proceeds,” as such term is defined in Chapter 9 of the UCC and, in any event, shall include, but not be limited to (i) any and all proceeds of any insurance, indemnity, warranty, or guaranty payable to Debtor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure, or forfeiture of
all or any part of the Collateral by any Tribunal (or any person acting under color of Tribunal) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral; and (b) any and all additions, substitutions, replacements and products of any of the Collateral.
“Residential Real Property” shall mean a single platted lot of land improved with a one-to-four family residence.
“Retired Participated Mortgage Loan” shall mean any Mortgage Loan in which Secured Party has purchased a Participation Interest: (a) which has been subsequently sold in its entirety to a Take-Out Purchaser and the full amount of the purchase price for such sale has been received and applied by Secured Party (as reflected on the Secured Party's books and records), all pursuant to the terms of the Warehouse Agreement; (b) for which the Participation Interest in such Mortgage Loan has been subsequently repurchased in its entirety by Debtor from Secured Party and the full amount of the repurchase price for such repurchase has been received and applied by Secured Party (as reflected on the Secured Party's books and records), all pursuant to the terms of the Warehouse Agreement; or (c) for which the entire principal balance and all accrued interest for such Mortgage Loan has been subsequently paid in full by the related Borrower (as reflected on the Secured Party's books and records), and Secured Party's pro rata share of such amounts have been received and applied by Secured Party, all pursuant to the terms of the Warehouse Agreement.
“Secured Party” shall mean Texas Capital Bank, National Association.
“Security Instrument” shall mean, with respect to any Mortgage Loan, a full recourse mortgage or deed of trust securing such Mortgage Loan and granting a perfected first priority lien on the Residential Real Property related thereto.
“Take-Out Purchase Agreement” shall mean, with respect to any Participated Mortgage Loan, any and all agreements, commitments or other arrangements for Debtor to sell such Participated Mortgage Loan to any Take-Out Purchaser.
“Take-Out Purchaser” shall mean any Person approved by Secured Party (pursuant to the Warehouse Agreement) for the purchase of any Participated Mortgage Loan.
“Tribunal” shall mean any state, commonwealth, federal, foreign, territorial or other court or governmental department, commission, board, bureau, agency or instrumentality.
“UCC” shall mean the Uniform Commercial Code of the State of Texas, or other applicable jurisdiction, as it may be amended from time to time.
“Warehouse Agreement” shall mean that certain Mortgage Warehouse Agreement most recently executed by Debtor and Secured Party on or before the date of the filing of this UCC-1 Financing Statement, as the same may from time to time be modified, amended, supplemented, renewed, extended or replaced.
EXHIBIT E
(TO MORTGAGE WAREHOUSE AGREEMENT)
FINANCIAL COVENANTS ADDENDUM
[Follows This Cover Page (If Applicable1)]
1 If an Additional Warehouse Facility Covenants Addendum does not follow this cover page, then this addendum is not applicable unless such an addendum is subsequently executed by Bank and Seller.
FINANCIAL COVENANTS ADDENDUM
THIS FINANCIAL COVENANTS ADDENDUM (this “Addendum”) is entered into as of AUGUST 5, 2020 (but effective as of the Effective Date) by the undersigned executing this Addendum as “Seller” and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”) concurrently with, and as a condition to the effectiveness of, that certain Mortgage Warehouse Agreement (as amended and modified from time to time, the “Warehouse Agreement”) dated of even date herewith, executed by Bank and Seller. Accordingly, Bank and Seller agree as follows:
1. Financial Covenants. Seller covenants and agrees that, until the Agreement Termination Date, Seller will, at all times, observe, perform and comply with each of the following covenant(s):
(a) Minimum Tangible Net Worth. Seller shall maintain Tangible Net Worth of not less than [***] “Tangible Net Worth” means, at any particular time, all amounts which, in conformity with GAAP, would be properly included as owner's equity on Seller's balance sheet, but excluding (i) all assets which are properly classified as intangible assets, and (ii) loans or advances to, or receivables from, any owner, officer or employee of Seller.
(b) Minimum Liquid Assets. Seller shall maintain Total Eligible Liquidity of not less than [***] “Total Eligible Liquidity” means, at any particular time, the sum of Seller's cash, cash equivalents (certificates of deposit and other depository accounts established at FDIC-insured banks), United States government-issued securities and other registered, unrestricted equity or debt securities which are publicly traded on a recognized United States exchange and have been approved by Bank, in its sole and absolute discretion and which, in all events, are held in Seller's name and are free and clear of all Liens (except Liens in favor of Bank), as calculated and determined as set forth in Exhibit E-1 attached hereto.
(c) Minimum Pre-Tax Net Income. Seller shall maintain, on a rolling four quarter basis, minimum pre-tax net income of not less than [***] excluding any markup or markdown of mortgage servicing rights.
If Seller is required or permitted under the Warehouse Agreement to deliver to Bank quarterly consolidated financial statements, then the above-described financial covenants will be tested and calculated by Bank based on the consolidated financial information of Seller and each other entity whose financial information is required or permitted by Bank to be set forth on such consolidated financial statements.
After the Effective Date, Seller and Bank may, in their sole discretion, enter into certain written agreements executed by Seller and Bank evidencing or otherwise governing one or more credit facilities extended by Bank to Seller in addition to the financial accommodations evidenced and governed by the Warehouse Agreement (collectively, “Credit Agreements”), which Credit Agreements may include (a) certain financial covenants pertaining to Seller in addition to those contained in this Addendum (each a “New Financial Covenant”) and (b) one or more of the same financial covenants contained in this Addendum, but with certain modified terms pertaining to Seller with respect to each such financial covenant (each a “Modified Financial Covenant”). In such event, unless otherwise agreed to by Bank, the financial covenants contained in this Addendum shall automatically be modified and amended from time to time (a) to include each New Financial Covenant and (b) to include the most recent terms of each Modified Financial Covenant to the extent inconsistent with those contained in this Addendum. Except as modified and amended in accordance with the terms of the previous sentence, this Addendum shall continue in full force and effect as originally executed and delivered. The modifications and amendments
contemplated hereby shall not be affected by the termination of any Credit Agreement, and shall survive the termination of each Credit Agreement.
2. Intentionally Omitted.
3. Compliance Certificates. Seller acknowledges Bank has requested, and Seller shall timely prepare and furnish to Bank, the financial statements and reports described in the Warehouse Agreement, plus such additional financial reports and information as Bank may from time to time request. In addition, Seller shall prepare and submit to Bank, on a quarterly basis and no later than forty-five (45) days after the close of each fiscal quarter, a compliance certificate executed by Seller, demonstrating Seller's compliance with the covenants set forth in Section 1 of this Addendum and the provisions of the Warehouse Agreement, and such substantiation thereof as may be required by Bank, all in such form and content required by Bank from time to time. A copy of Bank's current required form of compliance certificate is attached hereto as Exhibit E-1. Although compliance certificates are to be delivered to Bank on a quarterly basis, Seller shall at all times comply with all covenants set forth in Section 1 of this Addendum and the provisions of the Warehouse Agreement and Bank may test Seller's compliance with such covenants and provisions at any time.
4. Miscellaneous. This Addendum is made a part of and is incorporated into the Warehouse Agreement. The provisions of this Addendum supersede, modify and amend any and all inconsistent or conflicting provisions in the Warehouse Agreement. Except as hereby modified and amended, the Warehouse Agreement shall remain in full force and effect. Capitalized terms not otherwise defined in this Addendum shall have the meanings set forth in the Warehouse Agreement. The liability of all Persons obligated to Bank in any manner under this Addendum shall be joint and several. If more than one Person shall execute this Addendum as “Seller”, then the term “Seller” as used herein shall refer both to each such Person individually and to all such Persons collectively.
[Signature Page Follows]
EXECUTED by Seller to be effective as of the Effective Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION | ||
By: | /s/ JOSEPH RUHLIN | |
Name: | JOSEPH RUHLIN | |
Title: | TREASURER |
AGREED TO AND ACCEPTED BY BANK AT RICHARDSON,
COLLIN COUNTY, TEXAS, AS OF THE EFFECTIVE DATE:
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION | ||
By: | /s/ Heather Crawford | |
Name: | Heather Crawford | |
Title: | Vice President |
EXHIBIT E-1
(TO FINANCIAL COVENANTS ADDENDUM
TO MORTGAGE WAREHOUSE AGREEMENT)
COMPLIANCE CERTIFICATE
[Follows This Cover Page]
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION
COMPLIANCE CERTIFICATE
REPORTING PERIOD: __________, 20___ through __________, 20___
This Compliance Certificate (this “Certificate”) is being delivered in connection with that certain Mortgage Warehouse Agreement (as amended and modified from time to time, and including all addenda and exhibits thereto, the “Agreement”) entered into as of AUGUST 5, 2020 executed by TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”) and the undersigned executing this Certificate as “Seller”. Capitalized terms used in this Certificate shall, unless otherwise indicated herein, have the meanings set forth in the Agreement. On behalf of Seller, the undersigned certifies to Bank as of the last day of the reporting period indicated above (the “Determination Date”) that: (a) no Event of Default has occurred and is continuing; (b) all representations and warranties of Seller contained in the Agreement and in the other Warehouse Documents are true and correct in all material respects; and (c) the information set forth below and all documents provided to Bank to substantiate the same are true, correct and complete.
Minimum Tangible Net Worth:
Actual Tangible Net Worth | Required minimum | |
(as of the Determination Date) | Tangible Net Worth | |
(pursuant to the Agreement) | ||
GAAP Net Worth | $___________________ | |
Less: | ||
[***] | ($__________________) | |
[***] | ($__________________) | |
[***] | ($__________________) | |
[***] | ($__________________) | |
TOTAL TANGIBLE NET WORTH: | $___________________ | [***] |
Minimum Liquid Assets:
Actual Liquid Assets | Required minimum | ||
(as of the Determination Date) | Liquid Assets | ||
(pursuant to the Agreement) | |||
Total Liquidity | $___________________ | ||
Less: | |||
[***] | ($__________________) | ||
[***] | ($__________________) | ||
Plus: | |||
[***] | |||
[***] | $___________________ | ||
TOTAL ELIGIBLE LIQUIDITY: | $___________________ | [***] |
[Additional Covenants Follows]
Compliance Certificate page 2
Minimum Pre-Tax Net Income (on a rolling four-quarter basis):
Actual Quarterly Pre-Tax Net Income (Loss) | ||||
(as of the Determination Date) | ||||
Current QTR | Previous QTR | Previous QTR | Previous QTR | |
Pre-Tax Net Income | $___________ | $____________ | $____________ | $___________ |
(Loss) | ||||
Less: | ||||
[***] | ($__________) | ($___________) | ($___________) | ($___________) |
ACTUAL PRE-TAX | ||||
NET INCOME | ||||
EXCLUDING MSR | ||||
FAIR VALUE | ||||
ADJUSTMENT: | $___________ | $_____________ | $_____________ | $____________ |
Total rolling four-quarter pre-tax net income | Required minimum rolling four-quarter pre-tax net |
(as of the Determination Date) | income |
(pursuant to the Agreement) | |
$____________________________ | [***] |
[Additional Covenants and Signature Page Follows]
Compliance Certificate page 3
Other Warehousing Facilities: Seller represents and warrants to Bank that any and all mortgage warehousing facilities of Seller (other than with Bank) in effect as of the date hereof are identified on the schedule appearing immediately below. Further, Seller represents and warrants to Bank that no default has occurred under any of the mortgage warehousing facilities of Seller identified in such schedule. Pursuant to the Agreement, Seller covenants and agrees to: (a) notify Bank in writing prior to entering into any other mortgage warehousing facilities; and (b) promptly notify Bank in writing regarding any material change in any mortgage warehousing facility of Seller (including as to the maximum amount of any such facility and as to any termination, suspension or non-renewal of any such facility) or any default by Seller under any such mortgage warehousing facility.
Warehouse Lender | Maximum Facility Amount | Facility Expiration Date |
[***] | $_______________________________ | _______________________________ |
[***] | $_______________________________ | _______________________________ |
[***] | $_______________________________ | _______________________________ |
[***] | $_______________________________ | _______________________________ |
EXECUTED by Seller as of the Determination Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION | ||
By: | ||
Name: | ||
Title: |
EXHIBIT F
(TO MORTGAGE WAREHOUSE AGREEMENT)
SUPPLEMENTAL PROVISIONS ADDENDUM
[Follows This Cover Page]
SUPPLEMENTAL PROVISIONS ADDENDUM
THIS SUPPLEMENTAL PROVISIONS ADDENDUM (this “Addendum”) is entered into as of AUGUST 5, 2020 (but effective as of the Effective Date) by the undersigned executing this Addendum as “Seller” and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”) concurrently with, and as a condition to the effectiveness of, that certain Mortgage Warehouse Agreement (as amended and modified from time to time, the “Warehouse Agreement”) of even date herewith, executed by Bank and Seller. Accordingly, Bank and Seller agree as follows:
1. Third-Party Document Custodian.
(a) As used in this Section, the following terms shall have the meanings set forth below:
“Custodial Agreement” means that certain CUSTODIAL AGREEMENT dated October 12, 2017, executed by Bank, Seller and the U.S. BANK, NATIONAL ASSOCIATION as agreement may be amended, supplemented, replaced or modified from time to time pursuant to the provisions of this Addendum.
“Document Custodian” means U.S. BANK, NATIONAL ASSOCIATION, in its capacity as custodian for Bank under Custodial Agreement.
“Permitted Document Custodian Deliverables” means, with respect to any Participated Mortgage Loan, such agreements, files, records and other documents related to such Participated Mortgage Loan (other than any Required Document Custodian Deliverables) permitted to be delivered to the Document Custodian pursuant to the Custodial Agreement.
“Required Document Custodian Deliverables” means, with respect to any Participated Mortgage Loan, such agreements, files, records and other documents related to such Participated Mortgage Loan required to be delivered to the Document Custodian pursuant to the Custodial Agreement.
(b) Subject to the provisions of Subsection (c) of this Section, Seller shall deliver or cause to be delivered to the Document Custodian the Bank Document Deliverables for each Participated Mortgage Loan pursuant to the provisions of the Warehouse Agreement. All Bank Document Deliverables (including all Required Document Custodian Deliverables), Permitted Document Custodian Deliverables and other Mortgage Loan Files (without implying that Seller is permitted to deliver any such other Mortgage Loan Files to the Document Custodian other than pursuant to the provisions of this Section and the Warehouse Agreement) delivered to the Document Custodian shall be held by the Document Custodian, as custodian and bailee for the Bank, for the exclusive use and benefit of the Bank, pursuant to the provisions of the Custodial Agreement and the Warehouse Agreement.
(c) Notwithstanding anything herein to the contrary:
(i) Seller shall not be permitted to deliver or cause to be delivered to the Document Custodian any Bank Document Deliverables (including any Required Document Custodian Deliverables) or Permitted Document Custodian Deliverables until such time as Bank shall have received a fully executed copy of the Custodial Agreement, in such form and content acceptable to Bank.
(ii) If the Custodial Agreement shall terminate (including if Bank shall terminate the Custodial Agreement in accordance with its terms), then effective as the date of such termination (without any further action by, or notice to, any Party): (A) Seller shall not be permitted to deliver or cause to be delivered to the Document Custodian any Bank Document Deliverables (including any Required Document Custodian Deliverables) or Permitted Document Custodian Deliverables; and (B) (I) all Bank Document Deliverables shall be delivered to Bank (and not the Document Custodian) pursuant to the provisions of the Warehouse Agreement and (II) all other Mortgage Loan Files (excluding any portions thereof which constitute Bank Document Deliverables) shall be delivered to, and held and maintained by, Seller (and not the Document Custodian) pursuant to the provisions of the Warehouse Agreement.
(iii) Bank may at any time, in its sole and absolute discretion, require that Seller cease delivering or causing to be delivered to the Document Custodian any and all Bank Document Deliverables (including any Required Document Custodian Deliverables) and Permitted Document Custodian Deliverables by providing written notice thereof to Seller, in which case, effective as of the date set forth in such written notice: (A) Seller shall not be permitted to deliver or cause to be delivered to the Document Custodian any Bank Document Deliverables (including any Required Document Custodian Deliverables) or Permitted Document Custodian Deliverables; and (B) (I) all Bank Document Deliverables shall be delivered to Bank (and not the Document Custodian) pursuant to the provisions of the Warehouse Agreement and (II) all other Mortgage Loan Files (excluding any portions thereof which constitute Bank Document Deliverables) shall be delivered to, and held and maintained by, Seller (and not the Document Custodian) pursuant to the provisions of the Warehouse Agreement.
(iv) Bank may at any time, in its sole and absolute discretion, require that any or all of the Bank Document Deliverables (including any Required Document Custodian Deliverables), Permitted Document Custodian Deliverables and other Mortgage Loan Files (without implying that Seller is permitted to deliver any such other Mortgage Loan Files to the Document Custodian other than pursuant to the provisions of this Section and the Warehouse Agreement) (A) in the possession of the Document Custodian be released by the Document Custodian directly to Bank, in which case Bank shall be deemed to be the Document Custodian for such items, or (B) in the custody, possession or control of Seller pursuant to Section 5.11(b) of the Warehouse Agreement be delivered directly to Bank (and not the Document Custodian) by Seller, in which case Bank shall be deemed to be the Document Custodian for such items.
Seller agrees to cooperate with Bank, and take such actions and do such other things deemed necessary or advisable by Bank, in connection with effecting the provisions of Subsections (c)(ii), (iii) and (iv) of this Section.
(d) Seller shall at all times comply with the provisions of the Custodial Agreement. Notwithstanding anything in the Custodial Agreement to the contrary, the Custodial Agreement or any other agreement related thereto shall not: (i) be amended, supplemented, replaced or modified or terminated without the prior written consent of Bank; and (ii) adversely affect or impair Seller's duties, obligations or agreements under the Warehouse Agreement (including, this Addendum).
(e) SELLER WILL RELEASE, HOLD HARMLESS AND INDEMNIFY EACH INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL LOSSES WHICH ARE RELATED TO THE CUSTODIAL AGREEMENT.
2. Additional Provisions Related to Third-Party Originated Mortgage Loans.
(a) The provisions of this Section are in addition to all other representations, warranties, covenants and agreements of Seller in the Warehouse Agreement and shall not limit the applicability thereof.
(b) With respect to any Third-Party Originated Mortgage Loan in which Bank elects to purchase a Participation Interest, Seller shall cause the Person from whom Seller acquired such Third-Party Originated Mortgage Loan to deliver the related Bank Document Deliverables directly to Seller or the Document Custodian, as applicable, pursuant to the provisions of the Warehouse Agreement.
(c) With respect to each Correspondent Originated Mortgage Loan in which Bank elects to purchase a Participation Interest, Seller represents and warrants to Bank that: (i) Seller is not a “mortgage originator” or “loan originator” under applicable Law with respect to such Correspondent Originated Mortgage Loan; and (ii) the originator of such Correspondent Originated Mortgage Loan is a registered and licensed “mortgage originator” and “loan originator” under applicable Law with respect to such Correspondent Originated Mortgage Loan, and to Seller's knowledge, such originator is in compliance with all other applicable Laws with respect to such Correspondent Originated Mortgage Loan.
(d) With respect to each Broker Originated Mortgage Loan, Seller represents and warrants to Bank that: (i) Seller and the related mortgage loan broker are each a “mortgage originator” or “loan originator” under applicable Law with respect to such Broker Originated Mortgage Loan; and (ii) the mortgage loan broker for such Broker Originated Mortgage Loan is a registered and licensed “mortgage originator” and “loan originator” under applicable Law with respect to such Broker Originated Mortgage Loan, and to Seller's knowledge, such mortgage loan broker is in compliance with all other applicable Laws with respect to such Broker Originated Mortgage Loan.
3. Miscellaneous. This Addendum is made a part of and is incorporated into the Warehouse Agreement. The provisions of this Addendum supersede, modify and amend any and all inconsistent or conflicting provisions in the Warehouse Agreement. Except as hereby modified and amended, the Warehouse Agreement shall remain in full force and effect. Capitalized terms not otherwise defined in this Addendum shall have the meanings set forth in the Warehouse Agreement. The liability of all Persons obligated to Bank in any manner under this Addendum shall be joint and several.
[Signature Page Follows]
EXECUTED by Seller to be effective as of the Effective Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION | ||
By: | /s/ JOSEPH RUHLIN | |
Name: | JOSEPH RUHLIN | |
Title: | TREASURER |
AGREED TO AND ACCEPTED BY BANK AT RICHARDSON,
COLLIN COUNTY, TEXAS, AS OF THE EFFECTIVE DATE:
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION | ||
By: | /s/ Heather Crawford | |
Name: | Heather Crawford | |
Title: | Vice President |
EXHIBIT G
(TO MORTGAGE WAREHOUSE AGREEMENT)
LIST OF CURRENT WAREHOUSE FACILITIES
Warehouse Lender | Maximum Facility Amount |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
EXHIBIT H
(TO MORTGAGE WAREHOUSE AGREEMENT)
LIST OF CURRENT AFFILIATE ESCROW AGENTS
Name of Affiliate Escrow Agent | Address |
(including any d/b/a) | |
NOT APPLICABLE | NOT APPLICABLE |
EXHIBIT I
(TO MORTGAGE WAREHOUSE AGREEMENT)
BLANKET ASSIGNMENT
[Follows This Cover Page]
(Space Above For Recorder's Use)
ASSIGNMENT OF INTERESTS IN MORTGAGE LOANS
THIS ASSIGNMENT OF INTERESTS IN MORTGAGE LOANS (this “Agreement”) is made and entered into as of AUGUST 5, 2020 (but effective as of the Effective Date) between HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION (“the foregoing are each individually and collectively referred to herein as “Seller”) and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (together with its successors and assigns, “Bank”).
RECITALS
A. Seller and Bank have executed that certain Mortgage Warehouse Agreement (as amended or modified from time to time, the “Warehouse Agreement”) entered into as of even date herewith, relating to Bank's discretionary purchase from time to time of Participation Interests from Seller in Mortgage Loans. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Warehouse Agreement.
B. Pursuant to the terms and conditions of the Warehouse Agreement, Seller shall sell, transfer, assign and convey to Bank a Participation Interest in each Mortgage Loan and Mortgage Loan Document related thereto in which Bank elects to purchase a Participation Interest under the Warehouse Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises, recitals and the agreements contained in this Agreement and the Warehouse Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Seller and Bank agree as follows:
1. Seller does hereby irrevocably, absolutely and unconditionally sell, transfer, assign and convey to Bank any and all of Seller's rights, titles and interests in and to any and all Participation Interests in Mortgage Loans now or hereafter purchased by Bank from Seller pursuant to the terms of the Warehouse Agreement. With respect to any Participation Interest purchased by Bank from Seller under the Warehouse Agreement, the sale, transfer, assignment and conveyance by Seller to Bank of all of Seller's rights, titles and interests in and to such Participation Interest in such Mortgage Loan shall be automatically effective, and shall be deemed conclusively to have occurred as of the Purchase Date for such Participation Interest, without further action by either party hereto, by operation of the applicable terms and provisions of the Warehouse Agreement.
2. Bank may from time to time append and attach hereto as Schedule A (the “Participation Interest Schedule”) information identifying each Participated Mortgage Loan and Bank's Participation Interest therein (“Participation Interest Information”), which Participation Interest Information may include with respect to each Participated Mortgage Loan: (a) the name of the related Borrower; (b) the principal amount of the Participated Mortgage Loan; (c) the related Purchase Date; (d) Bank's related Participation Percentage; (e) Seller's related Retained Percentage; (f) a description of the related Residential Real Property; and (g) the recording information for the related Security Instrument. Bank may from time to time attach hereto an updated Participation Interest Schedule which reflects the then-current Participation Interest Information.
3. Bank may at any time elect to record this Agreement (with a corresponding Participation Interest Schedule) in any real property records of any jurisdiction deemed appropriate from time to time by Bank. However, any failure by Bank to so record this Agreement shall not limit, impair or otherwise affect the provisions of the Warehouse Agreement or this Agreement. If Bank at any time requires additional executed originals of this Agreement in order to effect the recording of this Agreement (with any corresponding Participation Interest Schedule) in any jurisdiction deemed appropriate by Bank or for any other reason, Seller shall promptly upon request by Bank execute additional originals of this Agreement as and when required by Bank, and Bank may execute additional copies of this Agreement on Seller's behalf, as Seller's attorney-in-fact, pursuant to any power of attorney granted to Bank by Seller under the Warehouse Agreement or any other Warehouse Document.
4. The liability of all Persons obligated to Bank in any manner under this Agreement shall be joint and several. If more than one Person shall execute this Addendum as “Seller”, then the term “Seller” as used herein shall refer both to each such Person individually and to all such Persons collectively.
5. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Seller and Bank. Neither party hereto may sell, assign or transfer any right, title or interest hereunder except in accordance with the Warehouse Agreement or with the prior written consent of the other party hereto. Further, Seller shall not sell, assign or transfer any right, title or interest in the Participated Mortgage Loans in violation of any applicable provisions of the Warehouse Agreement.
6. This Agreement may be executed in several identical counterparts, and by the parties hereto on separate counterparts, and each counterpart, when so executed and delivered, shall constitute an original instrument, and all such separate counterparts shall constitute but one and the same instrument.
7. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Texas, without regard to the principles of conflicts of laws thereof.
[Signature Pages Follow]
IN WITNESS WHEREOF, each of the parties hereto have duly executed and delivered this Agreement effective as of the Effective Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION | ||
By: | /s/ JOSEPH RUHLIN | |
Name: | JOSEPH RUHLIN | |
Title: | TREASURER |
***
STATE OF Michigan | § |
§ | |
COUNTY OF Washtenaw | § |
This document was acknowledged before me on the day of 2nd day of September, 2020, by JOSEPH RUHLIN, TREASURER of HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION, known to me to be the person who executed this document in the capacity and for the purposes therein stated.
[***] | /s/ [***] |
Notary Public, State of Michigan | Notary Public, State of Michigan |
County of Oakland | |
My Commission Expires [***] | |
Acting in the county of Washtenaw | |
[NOTARY STAMP] |
AGREED TO AND ACCEPTED by Bank at Richardson, Collin County, Texas, as of the Effective Date.
BANK: | ||
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION | ||
By: | ||
Name: | ||
Title: |
***
STATE OF _____________ | § |
§ | |
COUNTY OF _____________ | § |
This document was acknowledged before me on the ____ day of __________________, 20___, by _________________________________, _________________________________ of TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, known to me to be the person who executed this document in the capacity and for the purposes therein stated.
Notary Public, State of _______________________________ | |
[NOTARY STAMP] |
SCHEDULE A
(TO ASSIGNMENT OF INTERESTS IN MORTGAGE LOANS)
PARTICIPATION INTEREST SCHEDULE
[To Be Attached and Updated By Bank From Time to Time]
Page 5
Exhibit 10.4.1
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.
ADDENDUM TO MORTGAGE WAREHOUSE AGREEMENT
(New York Committed Facility)
THIS ADDENDUM TO MORTGAGE WAREHOUSE AGREEMENT (this “Addendum”) is made and entered into by the undersigned executing this Addendum as “Seller” and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Bank”), and is effective as of the Effective Date.
RECITALS
A.
Seller and Bank have entered into, or are otherwise bound under, that certain Mortgage Warehouse Agreement (as modified or amended from time to time prior to the Effective Date, and including all addenda and exhibits to each of the foregoing, the “Warehouse Agreement”) entered into as of AUGUST 5, 2020, which governs a mortgage warehouse facility (the “Warehouse Facility”) pursuant to which (prior to the modifications and amendments made pursuant to this Addendum) Bank may elect, subject to the provisions of the Warehouse Agreement, to purchase Participation Interests in certain Mortgage Loans pursuant to the Warehouse Agreement.
B.
Seller is active in the business of originating Mortgage Loans, including in the State of New York. The State of New York currently requires that Seller maintain a committed warehouse facility in an amount not less than $1,000,000.00 in order to maintain Seller’s license in the State of New York to engage in the business of mortgage banking (the “New York Committed Facility Requirement”).
C.
Seller and Bank now desire to supplement, modify and amend certain terms and provisions of the Warehouse Agreement to provide for the Committed Facility Amount, as more particularly described herein. Accordingly, subject to the terms of this Addendum and the Warehouse Agreement (as modified and amended by this Addendum), Bank will from time to time during the term of the Warehouse Agreement purchase Participation Interests from Seller in Eligible Mortgage Loans having a total aggregate amount of related Purchase Prices of at least the Committed Facility Amount.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the covenants, representations, warranties and/or agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows:
1.
Defined Terms. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Warehouse Agreement.
2.
Committed Facility.
(a) A portion of the Maximum Participation Amount of the Warehouse Facility, in the amount of $1,000,000.00 (the “Committed Facility Amount”), is a committed facility (the “Committed Facility”) under the Warehouse Facility for the purchase by Bank from Seller of Participation Interests pursuant to the provisions of Section 2(b) of this Addendum. Accordingly, subject to the provisions of Section 2(b) of this Addendum, Bank agrees that it will from time to time during the term of the Warehouse Agreement purchase Participation Interests from Seller in Eligible Mortgage Loans having a total aggregate amount of related Purchase Prices of at least the Committed Facility Amount. Notwithstanding anything herein to the apparent contrary, the remaining portion of the Maximum Participation Amount of the Warehouse Facility (which does not constitute part of the Committed Facility) shall not, and does not, constitute a committed facility.
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(b) Bank shall purchase, under the Committed Facility, Participation Interests in Eligible Mortgage Loans having a total aggregate amount of related Purchase Prices not exceeding the Committed Facility Amount, provided that the purchase of each Participation Interest under the Committed Facility shall be subject to the following: (i) prior to the Advance Request Termination Date, Bank shall have received a Request from Seller to purchase such Participation Interest under the Committed Facility of a Participation at least one (1) Business Day prior to the date of the related Advance and otherwise pursuant to the provisions of the Warehouse Agreement; (ii) no Event of Default has occurred; (iii) all of the other provisions of the Warehouse Agreement for the purchase of such Participation Interests (other than the provisions of Section 2.2 of the Warehouse Agreement) shall have been satisfied; and (iv) the Advance under the Committed Facility for the purchase of such Participation Interest shall be made in accordance with the provisions of Section 2(c) of this Addendum and the other provisions of the Warehouse Agreement.
(c) Seller shall, at least one (1) Business Day prior to the date of each proposed Advance under the Committed Facility, deliver to Bank a Request and such other documents and information required under the Warehouse Agreement for such Advance. The proceeds of an Advance under the Committed Facility must be used by Seller to fund the origination (or, if permitted under the Warehouse Agreement, acquisition) of the related Eligible Mortgage Loan. The proceeds of an Advance under the Committed Facility shall be disbursed by wire transfer per wire instructions delivered to Bank for the net amount necessary to close (or, if permitted under the Warehouse Agreement, acquire) the related Eligible Mortgage Loan, as more particularly set forth in the Warehouse Agreement. An Advance under the Committed Facility will be made to the applicable closing agent constituting the Funding Recipient for the sole purpose of wet funding (or, if permitted under the Warehouse Agreement, acquiring) the related Eligible Mortgage Loans made to third parties which are secured by one-to-four family residential properties. Bank is not obliged to make any Advance under the Committed Facility if a condition or event exists which could constitute a Default. As used herein, “wet funding” means that closing funds are available for distribution at the closing of the applicable Eligible Mortgage Loan.
3. Termination. This Addendum shall automatically terminate, without any notice to or action by any party, upon such time as Seller shall no longer be required to comply with the New York Committed Facility Requirement. For the avoidance of doubt, this Addendum shall also terminate on the Agreement Termination Date.
4. Miscellaneous.
(a) Effective as of the Effective Date, the Warehouse Agreement and the other Warehouse Documents are hereby supplemented, amended and modified as provided herein. The provisions of this Addendum supersede, modify and amend any and all inconsistent or conflicting provisions in the Warehouse Agreement and the other Warehouse Documents. Except as hereby supplemented, amended or modified, the Warehouse Agreement and the other Warehouse Documents shall remain in full force and effect.
(b) Seller represents and warrants that it has the power and authority required to enter into and perform its obligations under this Addendum and to make the agreements set forth herein. This Addendum represents the entire agreement between Bank and Seller regarding the subject matter dealt with herein, and it may not be modified, amended or discharged except by written amendment executed by Seller and Bank. The terms and provisions of this Addendum shall be binding upon any successors and assigns of Seller permitted pursuant to the terms of the
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Warehouse Agreement and shall benefit the successors and assigns of Bank. This Addendum may be executed in multiple counterparts, each to constitute a separate agreement, but all, taken together, to constitute one and the same agreement. This Addendum shall be governed by and construed in accordance with Texas law and applicable federal law.
(c) The liability of all Persons obligated to Bank in any manner under this Addendum shall be joint and several. If more than one Person shall execute this Addendum as “Seller”, then the term “Seller” as used herein shall refer both to each such Person individually and to all such Persons collectively.
(d) THIS WRITTEN AGREEMENT AND THE OTHER WAREHOUSE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Signature Pages Follow]
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EXECUTED to be effective as of the Effective Date.
SELLER: | ||
HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION | ||
By: | /s/ Joseph Ruhlin | |
Name: | Joseph Ruhlin | |
Title: | Treasurer |
* * *
STATE OF | MICHIGAN | § | |
§ | |||
COUNTY OF | WASHTENAW | § |
This document was acknowledged before me on the 2nd day of September, 2020, by JOSEPH RUHLIN, TREASURER of HOME POINT FINANCIAL CORPORATION, A NEW JERSEY CORPORATION, known to me to be the person who executed this document in the capacity and for the purposes therein stated.
[***] | |
Notary Public, State of Michigan |
My commission expires: | |
8/26/22 |
[NOTARY STAMP]
[***]
Notary Public, State of Michigan
County of Oakland
My Commission Expires [***]
Acting in the County of Washtenaw [Bank’s Signature Page Follows]
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ACCEPTED AND AGREED to by Bank at Richardson, Collin County, Texas, and executed to be effective as the Effective Date.
BANK: | ||
TEXAS CAPITAL BANK, | ||
NATIONAL ASSOCIATION | ||
By: | /s/ Heather Crawford | |
Name: | Heather Crawford | |
Title: | Vice President |
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Exhibit 10.5
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
By and Among:
TIAA, FSB, as Administrative Agent and a Buyer,
the other Buyers from time to time party hereto
and
HOME POINT FINANCIAL CORPORATION, as Seller
Dated as of September 18, 2020
TABLE OF CONTENTS
Page | ||
SECTION 1. | APPLICABILITY; INCORPORATION OF WAREHOUSE CUSTOMER GUIDE AND PRICING LETTER | 1 |
SECTION 2. | DEFINITIONS | 2 |
SECTION 3. | INITIATION; TERMINATION | 26 |
SECTION 4. | MARGIN AMOUNT MAINTENANCE | 33 |
SECTION 5. | COLLECTIONS; INCOME PAYMENTS | 34 |
SECTION 6. | REQUIREMENTS OF LAW | 34 |
SECTION 7. | TAXES | 35 |
SECTION 8. | SECURITY INTEREST; APPOINTMENT AS ATTORNEY-IN-FACT | 38 |
SECTION 9. | PAYMENT, TRANSFER; ACCOUNTS AND CUSTODY | 41 |
SECTION 10. | DELIVERY OF DOCUMENTS | 43 |
SECTION 11. | REPRESENTATIONS | 44 |
SECTION 12. | COVENANTS | 50 |
SECTION 13. | EVENTS OF DEFAULT | 57 |
SECTION 14. | REMEDIES | 60 |
SECTION 15. | INDEMNIFICATION AND EXPENSES; RECOURSE | 62 |
SECTION 16. | SERVICING | 63 |
SECTION 17. | DUE DILIGENCE | 65 |
SECTION 18. | SUCCESSORS AND ASSIGNS | 66 |
SECTION 19. | AGENCY | 69 |
SECTION 20. | HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOANS | 76 |
SECTION 21. | TAX AND ACCOUNTING TREATMENT | 76 |
SECTION 22. | SET-OFF | 76 |
SECTION 23. | TERMINABILITY | 77 |
SECTION 24. | NOTICES AND OTHER COMMUNICATIONS | 77 |
SECTION 25. | USE OF THE WAREHOUSE ELECTRONIC SYSTEM AND OTHER ELECTRONIC MEDIA | 77 |
SECTION 26. | ENTIRE AGREEMENT; SEVERABILITY; SINGLE AGREEMENT | 79 |
SECTION 27. | GOVERNING LAW | 80 |
SECTION 28. | SUBMISSION TO JURISDICTION; WAIVERS | 80 |
SECTION 29. | NO WAIVERS, ETC. | 81 |
SECTION 30. | CONFIDENTIALITY | 81 |
SECTION 31. | INTENT | 82 |
SECTION 32. | DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS | 83 |
SECTION 33. | AUTHORIZATIONS | 83 |
SECTION 34. | ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES | 83 |
SECTION 35. | MISCELLANEOUS | 84 |
SECTION 36. | GENERAL INTERPRETIVE PRINCIPLES | 87 |
SCHEDULES AND EXHIBITS
SCHEDULE 1 | Schedule of Representations and Warranties with Respect to the Mortgage Loans |
EXHIBIT A | Form of Opinion Letter |
EXHIBIT B | Form of Servicer Notice |
EXHIBIT C | Form of Power of Attorney |
AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
This AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (this “Agreement”), dated as of September 18, 2020, is made and entered into by and among HOME POINT FINANCIAL CORPORATION, a New Jersey corporation (“Seller”), the Buyers from time to time party hereto (“Buyer”), and TIAA, FSB, formerly known as EverBank, as a Buyer and swing line lender (in such capacity, “TIAA”), and as administrative agent (in such capacity, the “Administrative Agent”) for the Buyers.
RECITALS
A. The Seller and the Administrative Agent entered into a Master Repurchase Agreement dated as of May 31, 2017 (as the same has been amended, restated, or otherwise modified from time to time, the “Existing MRA”); and
B. The parties desire to amend and restate the Existing MRA in its entirety, as set forth herein.
SECTION 1. | APPLICABILITY; INCORPORATION OF WAREHOUSE CUSTOMER GUIDE AND PRICING LETTER |
From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to the Administrative Agent, for the benefit of the Buyers, Eligible Mortgage Loans on a servicing released basis against the transfer of funds by Buyers, with a simultaneous agreement by the Administrative Agent to transfer to Seller such Eligible Mortgage Loans on a servicing released basis at a date certain after the related Purchase Date, against the transfer of funds by Seller. Each such transaction (including any Swing Line Transactions) shall be referred to herein as a “Transaction” and shall be governed by this Agreement (including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder), unless otherwise agreed in writing. This Agreement is not a commitment by any Buyer to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for each Buyer to enter into Transactions with Seller. Seller hereby acknowledges that no Buyer is under any obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement.
In accordance with Section 2, Seller may request that TIAA, in its discretion, enter into Swing Line Transactions to initially and temporarily purchase Eligible Mortgage Loans pending the Buyers’ discretionary purchase of such Eligible Mortgage Loans as Regular Transactions pursuant to this Agreement.
Except as otherwise expressly set forth herein, the Warehouse Customer Guide is one of the Facility Documents as defined below. The Warehouse Customer Guide is incorporated by reference into this Agreement and Seller agrees to adhere to all terms, conditions and requirements of the Warehouse Customer Guide. The Administrative Agent may amend the Warehouse Customer Guide from time to time as provided in Section 35(e). In the event of a conflict or inconsistency between this Agreement and the Warehouse Customer Guide, the terms of this Agreement shall govern. Seller’s execution and delivery of this Agreement constitutes
Seller’s acknowledgment of receipt of the Warehouse Customer Guide and Seller’s agreement to the terms and conditions set forth therein and herein with respect thereto.
The Pricing Letter is one of the Facility Documents as defined below. The Pricing Letter is incorporated by reference into this Agreement and Seller agrees to adhere to all terms, conditions and requirements of the Pricing Letter as incorporated herein. In the event of a conflict or inconsistency between this Agreement and the Pricing Letter, the terms of the Pricing Letter shall govern.
SECTION 2. | DEFINITIONS |
Capitalized terms used but not defined herein shall have the respective meanings set forth in the Pricing Letter. As used herein, the following terms shall have the following meanings (all terms defined in this Section 2 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa):
“1934 Act” shall have the meaning set forth in Section 32 hereof.
“Accepted Servicing Practices” shall mean, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located.
“Adjustable Rate Loan” shall mean a Mortgage Loan that provides for the adjustment of the Mortgage Interest Rate payable in connection with such Mortgage Loan.
“Adjusted Tangible Net Worth” shall mean, with respect to any Person at any date, the Net Worth of such Person plus (a) (i) all unpaid principal of all Subordinated Debt of such Person at such date; and (ii) the MSR Value at such date; minus: (b) (i) the aggregate book value of all intangible assets of such Person and its consolidated Subsidiaries (as determined in accordance with GAAP), including, without limitation, goodwill; trademarks, trade names, service marks, copyrights, patents, licenses and franchises; capitalized Servicing Rights; organizational expenses and deferred expenses; (ii) receivables from equity owners, Affiliates or employees; (iii) advances of loans to Affiliates; (iv) investments in Affiliates; (v) assets pledged to secure any liabilities not included in the Indebtedness of such Person; and (vi) any other assets which would be deemed by HUD to be unacceptable in calculating adjusted tangible net worth; in all cases, calculated on a consolidated basis and determined in accordance with GAAP consistent with those applied in the preparation of the Financial Statements referred to herein.
“Administrative Agent” means TIAA BANK, in its capacity as administrative agent under any of the Facility Documents, or any successor administrative agent.
“Administrative Agent Fee” shall be equal to the sum of the Pro-Rata Fees plus the Ancillary Income.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by or otherwise acceptable to the Administrative Agent.
“Affiliate” shall mean with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code. Notwithstanding the foregoing, neither Stone Point Capital nor any of its Trident Funds shall be considered an “Affiliate” of Seller as defined under this Agreement.
“Agency” shall mean Freddie Mac, Fannie Mae or Ginnie Mae, as applicable.
“Agency-Required eNote Legend” means the legend or paragraph required by Fannie Mae or Freddie Mac, as applicable, to be set forth in the text of an eNote, as may be amended from time to time by Fannie Mae or Freddie Mac, as applicable.
“Aging Limit” shall have the meaning specified in the Pricing Letter.
“Agreement” shall mean this Amended and Restated Master Repurchase Agreement between the Administrative Agent, Buyers and Seller, dated as of the date hereof, as the same may be amended, supplemented or otherwise modified in accordance with the terms hereof.
“ALTA” shall mean the American Land Title Association, or any successors thereto.
“Ancillary Income” shall mean the Warehouse Fees set forth in Schedule 1 of the Pricing Letter.
“Annual Financial Statement Date” shall have the meaning set forth in the Pricing Letter.
“Anti-Money Laundering Laws” shall have the meaning set forth in Section 11(z) hereof.
“Appraisal” shall mean an appraisal by a licensed appraiser selected in accordance with Agency guidelines and not identified to Seller as an unacceptable appraiser by an Agency, and who is experienced in estimating the value of property of that same type in the community where it is located, a signed copy of the written report of which Appraisal is in the possession of Seller or the Subservicer.
“Appraised Value” shall mean the value set forth in an Appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.
“Appropriate Federal Banking Agency” shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the United States Code, as amended from time to time.
“Approved CPA” shall mean a certified public accountant approved by the Administrative Agent in writing in its commercially reasonable discretion (it being understood that KPMG LLP or any other accounting firm of nationally recognized standing shall be deemed acceptable).
“Approved Fund” means any Fund that is administered or managed by (a) a Buyer, (b) an Affiliate of a Buyer or (c) an entity or an Affiliate of an entity that administers or manages a Buyer.
“Approved Mortgage Product” shall have the meaning specified in the Pricing Letter.
“Approved Servicing Appraiser” shall mean an independent appraiser that is nationally known as an expert in the evaluation of Servicing Rights, and is pre-approved in writing by the Administrative Agent from time to time, in its commercially reasonable discretion. As of the date hereof, Mountainview Capital Markets is Borrower’s Approved Servicing Appraiser for the purposes of this Agreement. Administrative Agent reserves the right at any time in its commercially reasonable discretion to withdraw such approval on a prospective basis by written notice to Borrower.
“Approved Tax Service Contract Provider” shall mean any tax service contract provider as approved from time to time by the Administrative Agent, in its reasonable discretion.
“Asset Value” shall mean:
(A) | with respect to each Purchased Mortgage Loan that is: |
(i) an Eligible Mortgage Loan, the applicable Purchase Price Percentage for such Purchased Mortgage Loan multiplied by the least of (i) the Market Value of such Mortgage Loan, (ii) the outstanding principal balance of such Mortgage Loan, and (iii) the purchase price for such Mortgage Loan set forth in the related Takeout Commitment;
(ii) | a Defective Mortgage Loan, at the time the Transaction is initiated, zero; and |
(iii) | not an Eligible Mortgage Loan, zero. |
(B) Notwithstanding and without limiting the generality of the foregoing, Seller acknowledges that the Asset Value of a Purchased Mortgage Loan may be reduced to zero by the Administrative Agent, in its sole discretion, without notice, if:
(i) | Reserved; |
(ii) | the Purchased Mortgage Loan has been released from the possession of Custodian (other than to a Takeout Investor pursuant to a Bailee Letter or, in the case of eMortgage Loans, pursuant to an equivalent agreement) for a period in excess of 10 Business Days; |
(iii) | the Purchased Mortgage Loan has been released from the possession of Custodian to a Takeout Investor pursuant to a Bailee Letter (or, in the case of eMortgage Loans, pursuant to an equivalent agreement) for a period in excess of 45 calendar days; |
(iv) | the Purchased Mortgage Loan is a Wet Mortgage Loan for which the related Mortgage File has not been received by Custodian by the Wet Delivery Deadline for such Purchased Mortgage Loan; |
(v) | such Purchased Mortgage Loan is rejected by the related Takeout Investor for reasons other than a defect that materially impacts the Purchased Mortgage Loan’s market value, and an acceptable alternative Takeout Investor has not been identified; or |
(vi) | such Purchased Mortgage Loan has been subject to a Transaction hereunder for a period of greater than the applicable Transaction Term Limitation. |
(C) If Administrative Agent is aware of any of the following, the Asset Value of a Purchased Mortgage Loan shall be reduced to zero by the Administrative Agent, without requiring notice to the Seller, unless (x) the Administrative Agent otherwise determines in its discretion under Section 19(m), or (y) the Administrative Agent notifies all Buyers in writing by noon eastern time of its intent to do otherwise and does not receive a Buyer’s written objection by 5:00 pm eastern time on such day (or if notice is received by Buyers after noon eastern time, a Buyer’s written objection by 5:00 pm eastern time on the following business day):
(i) | the Purchased Mortgage Loan becomes a Defective Mortgage Loan, other than as described in (B)(v) above, subsequent to a Transaction hereunder; |
(ii) | such Purchased Mortgage Loan contains a breach of a representation or warranty made by Seller in this Agreement; |
(iii) | such Purchased Mortgage Loan is or becomes a Delinquent Mortgage Loan; or |
(iv) | the Administrative Agent has determined in its commercially reasonable discretion in a manner that is consistent with its determination for other similarly situated sellers that the Purchased Mortgage Loan is not eligible for whole loan sale or securitization in a transaction consistent with the prevailing sale and securitization industry with respect to substantially similar Mortgage Loans. |
The aggregate Asset Value of Mortgage Loans included in any Concentration Category shall not exceed the Concentration Limit applicable to such Concentration Category.
“Assignment and Acceptance” means an assignment and acceptance entered into by a Buyer and an assignee (with the consent of any party whose consent is required by Section 18(b)), in form and substance approved by the Administrative Agent.
“Assignment of Proprietary Lease” shall mean the specific agreement creating a first Lien on and pledge of the Co-op Shares and appurtenant Proprietary Lease securing a Co-op Loan.
“Bailee Letter” shall have the meaning assigned to such term in the Custodial Agreement.
“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time.
“Business Day” shall mean a day other than (i) a Saturday or a Sunday, (ii) a day on which the New York Stock Exchange or the Federal Reserve Bank of New York is closed, (iii) a day on which banks in New York, New York, Boston Massachusetts, Indianapolis, Indiana, or Jacksonville, Florida are authorized or obligated to close their regular banking business, or (iv) any day on which the offices of the Custodian are closed.
“Buyer” is defined in the introductory paragraph of this Agreement and includes such Person’s successors in interest and assigns and, with respect to Section 7, its participants.
“Buyer’s Facility Sum” shall have the meaning specified in the Pricing Letter.
“Capital Lease Obligations” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Capital One” shall mean Capital One, National Association.
“Cash Equivalents” shall mean (a) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of [***] or less from the date of acquisition and overnight bank deposits of any Buyer or its Affiliates or of any commercial bank having capital and surplus in excess of [***], (c) repurchase obligations of any Buyer or its Affiliates or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within [***] after the day of acquisition, (e) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of [***] or less from the date of acquisition backed by standby letters of credit issued by any Buyer or any commercial bank satisfying the requirements of clause (b) of this definition, or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.
“Central Elements” means and includes the value of a substantial part of the Purchased Mortgage Loans; the prospects for payment of the Repurchase Price, when due; the
validity or enforceability of this Agreement and the other Facility Documents and, as to any Person referred to in any reference to the Central Elements, such Person’s and its consolidated Subsidiaries’ property, business operations, financial condition and ability to fulfill and perform its obligations under this Agreement and the other Facility Documents to which it is a party, each taken as a whole, and such Person’s prospects of continuing in business as a going concern.
“Change in Control” shall have the meaning specified in the Pricing Letter.
“Closing Protection Letter” shall mean a letter of indemnification from a title insurer addressed to Seller and/or the Administrative Agent or for which the Administrative Agent and each Buyer is a third party beneficiary, with coverage that is customarily acceptable to Persons engaged in the origination of mortgage loans, identifying the Settlement Agent covered thereby and indemnifying Seller, the Administrative Agent and each Buyer (directly or as a third party beneficiary) against losses incurred due to malfeasance or fraud by the Settlement Agent or the failure of the Settlement Agent to follow the specific escrow instructions specified by Seller to the Settlement Agent or otherwise by the Administrative Agent and each Buyer with respect to the closing of the Mortgage Loan. The Closing Protection Letter shall be either with respect to the individual Mortgage Loan being purchased pursuant hereto or a blanket Closing Protection Letter which covers closings conducted by the Settlement Agent in the jurisdiction in which the closing of such Mortgage Loan takes place.
“CLTA” shall mean the California Land Title Association, or any successors thereto.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Concentration Category” shall have the meaning specified in the Pricing Letter.
“Concentration Limit” shall mean, for each Concentration Category, the applicable limitation set forth in the Pricing Letter.
“Confidential Terms” shall have the meaning set forth in Section 30 hereof.
“Confidential Information” shall have the meaning set forth in Section 30 hereof.
“Conforming Mortgage Loan” shall have the meaning set forth in the Pricing Letter.
“Control Failure” means, with respect to an eMortgage, (i) Buyer shall not be designated as the Controller of the eNote in the MERS eRegistry by the Controller Status Transfer Deadline, (ii) the Custodian shall not be designated as the Location and Delegatee or the eNote in the MERS eRegistry by the Controller Status Transfer Deadline, (iii) the eVault shall have released the Authoritative Copy of an eNote without the prior direction of Buyer or the Custodian, or (iv) if the Custodian initiated any changes on the MERS eRegistry in contravention of the terms of the Custodial Agreement.
“Controller” means, with respect to an eNote, the party designated in the MERS eRegistry as the “Controller”.
“Controller Status Transfer Deadline” means __ Business Days after the Purchase Date.
“Conventional Mortgage Loan” shall mean a Conforming Mortgage Loan other than a Government Mortgage Loan.
“Co-op Corporation” shall mean, with respect to any Co-op Loan, the cooperative apartment corporation that holds legal title to the related Co-op Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
“Co-op Loan” shall mean a Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and the collateral assignment of the related Proprietary Lease.
“Co-op Project” shall mean, with respect to any Co-op Loan, all real property and improvements thereto and rights therein and thereto owned by a Co-op Corporation including without limitation the land, separate dwelling units and all common elements.
“Co-op Shares” shall mean, with respect to any Co-op Loan, the shares of stock issued by a Co-op Corporation and allocated to a Co-op Unit and represented by a stock certificate or certificates.
“Co-op Unit” shall mean, with respect to any Co-op Loan, a specific unit in a Co-op Project.
“Costs” shall have the meaning set forth in Section 15(a) hereof.
“Covenant Net Income” shall mean Net Income excluding FMV Adjustments.
“Credit File” shall mean with respect to each Mortgage Loan, the documents and instruments relating to the origination and administration of such Mortgage Loan.
“Custodial Agreement” shall mean that certain Custodial Agreement dated as of November 10, 2015, among Seller, the Administrative Agent and Custodian, as amended by that certain First Amendment to Custodian Agreement, dated as of July 1, 2019, as the same may be amended from time to time.
“Custodial Loan Transmission” shall have the meaning set forth in the Custodial Agreement.
“Custodian” shall mean U.S. Bank National Association, or any successor thereto under the Custodial Agreement.
“Daily Activity Report” shall mean for each Business Day, the daily activity pursuant to this Agreement reflected on the Warehouse Electronic System, including without limitation, any purchases of Mortgage Loans, any repurchases of Mortgage Loans, any payments received by the Administrative Agent or in the Inbound Account with respect to the Purchased Mortgage Loans, and the activity in each of the Inbound and Haircut Accounts.
“Debt for Borrowed Money Arrangements” shall have the meaning set forth in Section 11(o) hereof.
“Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Defaulting Buyer” means, subject to Section 35(g), any Buyer that, unless such Buyer has notified the Administrative Agent at least 24 hours in advance, in writing (which may include e-mail), of its intent not to fund Transactions, (a) has failed to (i) fund all its pro rata portion of any Transaction within one (1) Business Day of the date such Transaction was required to be funded hereunder unless such Buyer notifies the Administrative Agent and the Seller in writing that such failure is the result of such Buyer’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Buyer any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Seller, the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Buyer’s obligation to fund a Loan hereunder and states that such position is based on such Buyer’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Seller, to confirm in writing to the Administrative Agent and the Seller that it will comply with its prospective funding obligations hereunder (provided that such Buyer shall cease to be a Defaulting Buyer pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Seller), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Event, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Buyer shall not be a Defaulting Buyer solely by virtue of the ownership or acquisition of any equity interest in that Buyer or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Buyer with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Buyer (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Buyer. Any determination by the Administrative Agent that a Buyer is a Defaulting Buyer under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Buyer shall be deemed to be a Defaulting Buyer upon delivery of written notice of such determination to the Seller and each Buyer.
“Defective Mortgage Loan” shall mean a Mortgage Loan (a) which is in foreclosure, has been foreclosed upon or has been converted to real estate owned property, (b) for which the Mortgagor is in bankruptcy, (c) that is not either (i) subject to a valid and binding Takeout Commitment or (ii) unless a Takeout Commitment is required for the applicable Approved Mortgage Product type, covered within Seller’s hedging program, as approved by the Administrative Agent, (d) that is subject to a Takeout Commitment with respect to which Seller is
in default, (e) that is rejected or excluded for any reason from the related Takeout Commitment by the Takeout Investor, (f) that is not purchased by the Takeout Investor in compliance with the Takeout Commitment at or prior to the expiration or termination of the Takeout Commitment for any reason, or (g) that is not repurchased by Seller in compliance with the provisions of this Agreement, or (h) which was, but ceases to be, an Eligible Mortgage Loan, including if the representations and warranties set forth in Schedule 1 to this Agreement cease to be true and correct with respect to such Mortgage Loan.
“Delegatee” means, with respect to an eNote, the party designated in the MERS eRegistry as the “Delegatee” or “Delegatee for Transfers” of the Administrative Agent, who in such capacity is authorized by the Administrative Agent to perform certain MERS eRegistry transactions on behalf of the Administrative Agent.
“Delinquent Mortgage Loan” shall mean any Mortgage Loan as to which any Monthly Payment, or part thereof, remains unpaid for 30 days or more following the original Due Date for such Monthly Payment.
“Dollars” and “$” shall mean lawful money of the United States of America.
“Due Date” shall mean the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
“Due Diligence Costs” shall have the meaning set forth in Section 17 hereof.
“Due Diligence Review” shall mean the performance by a Buyer of any or all of the reviews permitted under Section 17 hereof with respect to Seller, any or all of the Purchased Mortgage Loans, or any Mortgage Loans submitted for purchase hereunder, as desired by the Buyer from time to time.
“E-Sign” shall mean the federal Electronic Signatures in Global and National Commerce Act, as amended from time to time.
“Effective Date” shall mean September 18, 2020.
“Electronic Record” shall mean “Record” and “Electronic Record,” both as defined in E-Sign, and shall include, but not be limited to, recorded telephone conversations, fax copies or electronic transmissions, including, without limitation, those involving the Warehouse Electronic System. With respect to an eMortgage Loan, “Electronic Record” means the related eNote and all other documents comprising the Asset File electronically created and that are stored in an electronic format, if any.
“Electronic Signature” shall have the meaning set forth in E-Sign.
“Electronic Tracking Agreement” shall mean that certain Electronic Tracking Agreement dated as of July 26, 2016 among Buyer, Seller, MERS and MERSCORP, Inc., as the same may be amended from time to time.
“Electronic Transactions” shall mean transactions conducted using Electronic Records and/or Electronic Signatures or fax copies of signatures.
“Eligible Mortgage Loan” shall mean a Mortgage Loan which (a) is an Approved Mortgage Product, and (b) complies with the representations and warranties set forth on Schedule 1 hereto.
“eMortgage Loan” means a Mortgage Loan with respect to which there is an eNote and as to which some or all of the other documents comprising the related Required Documents and Records may be created electronically and not by traditional paper documentation with a pen and ink signature.
“eNote” means, with respect to any eMortgage Loan, the electronically created and stored Note that is a Transferable Record.
“eNote Delivery Requirement” has the meaning assigned to such term in Section 10(a).
“eVault” means an electronic repository identified by Custodian and established and maintained by an eVault Provider for delivery and storage of eNotes. eNotes held in the eVault shall be registered on, and subject to, the MERS eRegistry
“eVault Provider” has the meaning set forth in the Custodial Agreement.
“EO13224” shall have the meaning set forth in Section 11(aa) hereof.
“ERISA” shall mean 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.
“ERISA Affiliate” shall, with respect to Seller, mean any Person which is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as a single employer described in Section 414(m) or (o) of the Code.
“ERISA Liability Threshold” shall have the meaning specified in the Pricing Letter.
“Escrow Amount” shall mean any amounts paid by the Mortgagor or retained by Seller with respect to the Mortgage Loan that constitute escrowed funds, which shall include any amounts representing Escrow Payments or unapplied principal prepayments.
“Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“Event of Default” shall have the meaning specified in Section 13 hereof.
“Event of ERISA Termination” shall, with respect to Seller or any ERISA Affiliate, mean (i) with respect to any Plan, a Reportable Event, or (ii) the withdrawal of Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) the failure by Seller or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA, or (iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by Seller or any ERISA Affiliate thereof to terminate any Plan, or (v) the failure to meet the requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or (vi) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (vii) the receipt by Seller or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (vi) has been taken by the PBGC with respect to such Multiemployer Plan, or (viii) any event or circumstance exists which may reasonably be expected to constitute grounds for Seller or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412(b) or 430 (k) of the Code with respect to any Plan.
“Excess Proceeds” shall mean the excess, if any, of the proceeds received in the Inbound Account with respect to a purchase or repurchase of a Purchased Mortgage Loan over the Repurchase Price for such Purchased Mortgage Loan.
“Existing Subordinated Debt” shall mean all Subordinated Debt, if any, existing as of the Effective Date, as set forth on Schedule 6 to the Pricing Letter.
“Expenses” shall mean all present and future expenses incurred by or on behalf of the Administrative Agent, any Buyer or the Custodian in connection with this Agreement or any of the other Facility Documents and any amendment, supplement or other modification or waiver related hereto or thereto, whether incurred heretofore or hereafter, which expenses shall include without limitation the cost of title, lien, judgment and other record searches; attorneys’ fees; and costs of preparing and recording any UCC financing statements or other filings necessary to perfect the security interest created hereby.
“Facility Documents” shall mean this Agreement, the Pricing Letter, the Warehouse Customer Guide, the Electronic Tracking Agreement, the Custodial Agreement, each Servicer Notice, if any, the Power of Attorney, and each Subordination Agreement, if any.
“Facility Termination Threshold” shall have the meaning specified in the Pricing Letter.
“Fannie Mae” shall mean Fannie Mae, or any successor thereto.
“FATCA” shall mean 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 current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“FCPA” shall have the meaning set forth in Section 11(ee) hereof.
“FDIA” shall have the meaning set forth in Section 31 hereof.
“FDICIA” shall have the meaning set forth in Section 31 hereof.
“FHA” shall mean the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
“FHA Loan” shall mean a Mortgage Loan which is the subject of an FHA Mortgage Insurance Certificate.
“FHA Mortgage Insurance Certificate” shall mean the certificate evidencing the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
“FHA Regulations” shall mean the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO” shall mean Fair Isaac Corporation, or any successor thereto.
“Fidelity Insurance” shall mean, collectively, whether or not provided in the same policy or policies, insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount reasonably acceptable to the Administrative Agent. Compliance with FNMA requirements shall be deemed acceptable by the Administrative Agent under this Agreement.
“Financial Condition Covenants” shall mean each of the covenants set forth in Section 3 of the Pricing Letter.
“Financial Reporting Party” shall have the meaning specified in the Pricing Letter.
“Financial Statements” shall mean the consolidated financial statements of the Financial Reporting Party prepared in accordance with GAAP for the year or other period then ended. Such financial statements will be audited, in the case of annual statements, by an Approved CPA.
“Fitch” shall mean Fitch Ratings, Inc., or any successor thereto.
“Flood Policy Insurer” shall mean any of the insurers employed by Seller in the ordinary course of its business that are reasonably acceptable to the Administrative Agent.
“FMV Adjustments” shall mean adjustments to the capitalized value of Seller’s Servicing Rights resulting from changes in valuation inputs or assumptions used in the valuation model.
“Freddie Mac” shall mean Freddie Mac, or any successor thereto.
“Funding Share” means, for each Buyer, that proportion of the sum of the original Purchase Price for any Mortgage Loan to be purchased in a Transaction that bears the same ratio to the total amount of such sum as that Buyer’s Facility Sum bears to the Maximum Purchase Amount.
“GAAP” shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors.
“Ginnie Mae” shall mean the Government National Mortgage Association, or any successor thereto.
“Ginnie Mae Buyout Loan” shall have the meaning set forth in the Pricing Letter.
“Ginnie Mae MBS Guide” shall mean the Ginnie Mae Mortgage-Backed Securities Guide (Ginnie Mae 5500.3, Rev. 1).
“GLB Act” shall have the meaning set forth in Section 30 hereof.
“Government Mortgage Loan” shall mean a first Lien Mortgage Loan that is (a) eligible for FHA mortgage insurance and is so insured, is subject to, or an application has been or will be submitted for, a binding and enforceable commitment for such insurance pursuant to the provisions of the National Housing Act, as amended, and is originated in compliance with the requirements of Ginnie Mae and is eligible for inclusion in a Ginnie Mae mortgage-backed security pool; or (b) eligible to be guaranteed by the VA and is so guaranteed, is subject to, or an application has been or will be submitted for, a binding and enforceable commitment for such guarantee pursuant to the provisions of the Servicemen’s Readjustment Act, as amended, and is otherwise eligible for inclusion in a Ginnie Mae mortgage-backed security pool.
“Governmental Authority” shall mean any nation or government, any state, county, municipality or other political subdivision thereof or any governmental body, agency, authority, department or commission (including, without limitation, any taxing authority) or any instrumentality or officer of any of the foregoing (including, without limitation, any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or indirectly owned by or controlled by the foregoing (including without limitation the Appropriate Federal Banking Agency).
“Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such
Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Haircut Account” shall mean the account established pursuant to Section 9(e) hereof.
“Haircut Amount” shall mean the excess of the outstanding principal balance of the Purchased Mortgage Loan being purchased on the Purchase Date over the Purchase Price for such Purchased Mortgage Loan.
“Hash Value” means, with respect to an eNote, the unique, tamper-evident digital signature of such eNote that is stored with MERS.
“Hedge Agreement” shall mean, with respect to any Mortgage Loans, any short sale of a United States Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal or notional interest obligations, either generally or under specific contingencies.
“High Cost Mortgage Loan” shall mean a mortgage loan classified as (a) a “high cost” or “higher priced” loan under the Home Ownership and Equity Protection Act of 1994 or (b) a “high cost,” “high risk,” “high rate,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).
“HUD” shall mean the Department of Housing and Urban Development.
“Inbound Account” shall mean the account established pursuant to Section 9(d) hereof.
“Income” shall mean, with respect to any Mortgage Loan at any time, any principal thereof then payable, and all interest, dividends or other distributions payable thereon and all proceeds thereof other than any amounts designated as payment for escrows items thereunder.
“Indebtedness” shall mean, with respect to any Person, total liabilities, as reported on that Person’s balance sheet, and calculated on a consolidated basis in accordance with GAAP.
“Indemnified Party” shall have the meaning set forth in Section 15(a) hereof.
“Initial Haircut Account Funded Amount” shall mean, with respect to any Purchased Mortgage Loan, the amount deposited by Seller into the Haircut Account on or prior to the related Purchase Date, which amount shall equal the Haircut Amount plus any Escrow Amount related to the Purchased Mortgage Loan.
“Insolvency Event” shall mean, for any Person, (1) it shall commence any case, proceeding or other action (i) relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or it shall make a general assignment for the benefit of its creditors; or (2) there shall be commenced against it any case, proceeding or other action of a nature referred to in clause (1) above which (i) results in the entry of an order for relief or any such adjudication or appointment, or (ii) remains undismissed, undischarged or unbonded for a period of thirty (30) days; or (3) there shall be commenced against it any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed, satisfied or bonded pending appeal within thirty (30) days from the entry thereof; or (4) it shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in (other than in connection with a final settlement), any of the acts set forth in clauses (1), (2) or (3) above; or (5) it shall generally not, or shall be unable to, or shall admit in writing its inability to pay its debts as they become due.
“Interest Expense” shall mean, for any period, total interest expense (including that attributable to Capital Lease Obligations) of such Person and its Subsidiaries for such period with respect to all outstanding Indebtedness of such Person and its Subsidiaries (including, without limitation, all commissions, discounts and other fees and charges owed by such Person with respect to letters of credit and bankers’ acceptance financing and net costs of such Person under Hedge Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP).
“LIBOR Floor” shall have the meaning set forth in the Pricing Letter.
“LIBOR Rate” shall mean, with respect to each day a Transaction is outstanding, the rate per annum equal to the greater of (a) the rate appearing at Reuters Screen LIBOR01 Page (or such other page as may replace the Reuters LIBOR01 Page on such service or such other service as may be designated by the Administrative Agent for the purpose of displaying London interbank offered rates for U.S. Dollar deposits) as one month LIBOR on such date (and if such date is not a Business Day, LIBOR in effect on the Business Day immediately preceding such date) (“LIBOR”), and (b) the LIBOR Floor. Notwithstanding the foregoing, if (i) LIBOR ceases to exist or be published by ICE Benchmark Administration Limited (or any successor or substitute), (ii) there is a material disruption to LIBOR, including but not limited to other lenders in the industry switching from LIBOR to another interest rate, (iii) there is a change in the methodology of calculating LIBOR or (iv) in the reasonable expectation of the Administrative Agent, any of the events specified in clause (i), (ii) or (iii) will occur; then the rate for the applicable interest period will be determined by such alternate method designed to measure interest rates in a
similar manner, as determined by the Administrative Agent who shall make such determination consistent with other credit facilities that are substantially the same with similarly situated counterparties and with substantially similar assets subject thereto. In order to account for the relationship of the replacement index to the original LIBOR, such alternate method will incorporate any spread to any replacement index as is necessary to ensure that Seller and the Administrative Agent are in a similar economic position as compared to the original LIBOR Rate.
“Lien” shall mean any security interest, mortgage, pledge, lien, claim on property, charge or encumbrance (including any conditional sale or other title retention agreement) or any lease in the nature thereof.
“Litigation Threshold” shall have the meaning specified in the Pricing Letter.
“Location” means, with respect to an eNote, the location of such eNote which is established by reference to the MERS eRegistry.
“Loan-to-Value Ratio” or “LTV” shall mean with respect to any Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan to the Appraised Value of the Mortgaged Property at origination.
“Margin Call” shall have the meaning specified in Section 4.
“Margin Deficit” shall have the meaning specified in Section 4.
“Market Value” shall mean, as of any date with respect to any Purchased Mortgage Loan, the price at which such Mortgage Loan could readily be sold as determined by the Administrative Agent in its sole discretion, provided, however, that the “Market Value” of any Mortgage Loan that is not an Eligible Mortgage Loan is zero.
“Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations, or financial condition of Seller and its Subsidiaries taken as a whole, (b) the ability of Seller to perform its obligations under any of the Facility Documents to which it is a party, (c) the validity or enforceability of any of the Facility Documents (other than the Warehouse Customer Guide), (d) the rights and remedies of the Administrative Agent, any Buyer or any Affiliate under any of the Facility Documents (other than the Warehouse Customer Guide), (e) the timely payment of any amounts payable under the Facility Documents or (f) the Asset Value of the Purchased Mortgage Loans taken as a whole.
“Maturity Event” shall mean with respect to a Mortgage Loan, the earliest to occur of: (a) the Mortgaged Property is sold or transferred; (b) the death of the last remaining Mortgagor; (c) the Mortgaged Property ceases to be the principal residence of a Mortgagor for reasons other than death and the Mortgaged Property is not the principal residence of at least one other Mortgagor, together with the required FHA approval; (d) for a period of longer than twelve (12) consecutive months, a Mortgagor fails to occupy the Mortgaged Property because of physical or mental illness and the Mortgaged Property is not the principal residence of at least one other Mortgagor, together with the required FHA approval; or (e) Mortgagor violates any other covenant of the Mortgage or Mortgage Note and is unable (or refuses) to correct the violation, together with the required FHA approval.
“Maximum Purchase Amount” shall have the meaning specified in the Pricing Letter.
“MERS” shall mean Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS eRegistry” means the electronic registry operated by MERSCORP Holdings, Inc. that acts as the legal system of record that identifies the Controller, Delegatee and Location of the Authoritative Copy of registered eNotes.
“MERS System” shall mean the system of recording transfers of mortgages electronically maintained by MERS.
“Monthly Payment” shall mean the scheduled monthly payment of principal and interest on a Mortgage Loan.
“Moody’s” shall mean Moody’s Investor’s Service, Inc. or any successors thereto.
“Mortgage” shall mean each mortgage, assignment of rents, security agreement and fixture filing, deed of trust, deed to secure debt, or similar instrument creating and evidencing a lien on real property and other property and rights incidental thereto, unless such Mortgage is granted in connection with a Co-op Loan, in which case the first lien position is in the Co-op Shares of the subject Co-op Corporation and in the tenant’s rights in the Proprietary Lease relating to such Co-op Shares.
“Mortgage File” shall mean, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in the Warehouse Customer Guide and the Custodial Agreement.
“Mortgage Interest Rate” shall mean the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.
“Mortgage Loan” shall mean any first lien, one-to-four-family residential mortgage loan evidenced by a Mortgage Note and secured by a Mortgage.
“Mortgage Loan Schedule” shall mean with respect to any Transaction as of any date, a mortgage loan schedule in the form of a computer tape or other electronic medium generated by Seller and delivered to the Administrative Agent via the Warehouse Electronic System and to Custodian as specified in the Custodial Agreement, which provides information (including, without limitation, the information required pursuant to the Warehouse Customer Guide) relating to the Purchased Mortgage Loans in a format required pursuant to the Warehouse Customer Guide.
“Mortgage Note” shall mean the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
“Mortgaged Property” shall mean the real property securing repayment, or other Co-op Loan collateral, of the debt evidenced by a Mortgage Note.
“Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder.
“MSR Appraised Value” means, as of any date of determination, the fair market value of Seller’s Servicing Rights at such time, calculated as a percentage (using the mid-point if expressed as a range) of the then unpaid principal balances of each category of Mortgage Loan then being serviced, as set forth in a Servicing Rights Appraisal. For the avoidance of doubt, in order to take into account changes in the unpaid principal balances of Mortgage Loans from the date of a particular appraisal to the date of any later determination of MSR Value for purposes of calculating Adjusted Tangible Net Worth at any time, the applicable value percentage shall be applied to the then (updated) unpaid principal balance of Mortgage Loans then included in Seller’s capitalized Servicing Rights within each applicable category of Mortgage Loans of the date of such later determination of MSR Value.
“MSR Value” shall mean, as of any date of determination, the lesser of (a) Seller’s capitalized Servicing Rights at such time, and (b) as applicable, and with respect to the same Servicing Rights (i) the MSR Appraised Value, at such time, with respect to those Mortgage Loans then included in Seller’s capitalized Servicing Rights, or (ii) if the applicable Servicing Rights Appraisal has not been timely delivered to the Administrative Agent, such amount as the Administrative Agent shall determine in its commercially reasonable discretion, using such means of valuation as it deems appropriate under the circumstances.
“Multiemployer Plan” shall mean, with respect to Seller, a “multiemployer plan” as defined in Section 3(37) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to (or required to be contributed to) by Seller or any ERISA Affiliate thereof on behalf of its employees and which is covered by Title IV of ERISA.
“Net Account Funded Amount” shall mean, for each Purchased Mortgage Loan, the Initial Haircut Account Funded Amount minus the Haircut Amount withdrawn from the Haircut Account by the Administrative Agent plus all additional amounts received in the Haircut Account related to the applicable Purchased Mortgage Loan, including amounts on account of Repurchase Price (including, without duplication, Excess Proceeds) minus any Shortfall Proceeds withdrawn by the Administrative Agent on account of the applicable Purchased Mortgage Loan, minus all Warehouse Fees withdrawn by the Administrative Agent on account of the applicable Purchased Mortgage Loan minus any additional amounts withdrawn by the Administrative Agent as permitted under Section 9(e) or otherwise, and attributed (in the sole discretion of the Administrative Agent) to such Purchased Mortgage Loan.
“Net Income” shall mean, for any Person for any period, the net income of such Person for such period as determined on a consolidated basis in accordance with GAAP.
“Net Worth” shall mean, with respect to any Person, an amount equal to, on a consolidated basis, such Person’s stockholder equity (determined in accordance with GAAP).
“Non-Defaulting Buyer” means, at any time, each Buyer that is not a Defaulting Buyer at such time.
“Non-Excluded Taxes” shall have the meaning set forth in Section 7(a) hereof.
“Obligations” shall mean any amounts owed by Seller to the Administrative Agent or any Buyer in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and all other fees or expenses which are payable hereunder or under any of the Facility Documents.
“OFAC” has the meaning specified in Section 11(aa) hereof.
“Other Taxes” shall have the meaning set forth in Section 7(b) hereof.
“Participant” has the meaning specified in Section 18(d).
“Participant Register” has the meaning specified in Section 18(d).
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof).
“Plan” shall mean any employee pension benefit plan within the meaning of section 3(2) of ERISA that is or was at any time during the current year or immediately preceding five years established, maintained or contributed to by either Seller or any ERISA Affiliate thereof and that is covered by Title IV of ERISA, other than a Multiemployer Plan.
“Pledge Instruments” shall mean the Assignment of Proprietary Lease and the stock power related to the Co-op Shares.
“Post-Default Rate” shall have the meaning specified in the Pricing Letter.
“Power of Attorney” shall mean that certain Power of Attorney dated as of September 18, 2020, executed by the Seller in favor of the Administrative Agent.
“Pro-Rata Fees” shall mean the sum of (i) the Price Differential less the Pro-Rata Price Differential, and (ii) one-half of the Due Diligence Costs not collected from Seller.
“Pro-Rata Price Differential” shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate less [***] (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to the Buyers with respect to such Transaction).
“Price Differential” shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for such
Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to the Buyers with respect to such Transaction).
“Pricing Letter” shall mean that certain letter agreement between the Buyers and Seller, dated as of the date hereof, as the same may be amended from time to time.
“Pricing Rate” shall mean a rate per annum equal to the sum of (a) the LIBOR Rate plus (b) the Pricing Spread.
“Pricing Spread” shall have the meaning specified in the Pricing Letter.
“Prohibited Person” shall have the meaning set forth in Section 11(aa) hereof.
“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Lease” shall mean the lease of a Co-op Unit evidencing the possessory interest of the owner of the Co-op Shares in such Co-op Unit.
“Purchase Date” shall mean the date on which Purchased Mortgage Loans are transferred by Seller to Buyers.
“Purchase Price” shall have the meaning specified in the Pricing Letter.
“Purchase Price Percentage” shall have the meaning specified in the Pricing Letter.
“Purchased Mortgage Loan” shall mean each Mortgage Loan sold by Seller to the Buyers in a Transaction, as reflected in the Warehouse Electronic System and as evidenced by the Daily Activity Report, prior to the time repurchased by Seller in accordance with the terms hereof.
“Qualified Insurer” shall mean a mortgage guaranty insurance company duly authorized and licensed where required by law to transact mortgage guaranty insurance business and acceptable under the Underwriting Guidelines.
“Rating Agency” shall mean any of S&P, Moody’s or Fitch.
“Recognition Agreement” shall mean an agreement among a Co-op Corporation, a lender, and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
“Records” shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller or any other person or entity with respect to a Mortgage Loan. Records shall include the Mortgage Notes, any Mortgages, the Mortgage Files, the credit files related to a Mortgage Loan and any other instruments necessary to document or service a Mortgage Loan.
“Register” shall have the meaning set forth in Section 19(b) hereof.
“Regular Transaction” shall mean a Transaction funded by all Buyers, rather than by TIAA under the Swing Line.
“Regulations T, U and X” shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Reportable Event” shall mean any of the events set forth in Section 4043 of ERISA, other than those events as to which the thirty day notice period is waived under PBGC Reg. § 4043.
“Repurchase Assets” shall have the meaning provided in Section 8(a) hereof.
“Repurchase Date” shall mean the date on which Seller is to repurchase the Purchased Mortgage Loans, or any particular Purchased Mortgage Loan, subject to a Transaction from the Buyers, which shall be the earliest of (a) the date specified pursuant to Section 3(e)(i), (b) a date no later than the applicable Aging Limit, (c) one (1) Business Day after such Purchased Mortgage Loan is no longer an Eligible Mortgage Loan, (d) the Termination Date, or (e) any date determined by application of the provisions of Sections 3(d) or 14.
“Repurchase Price” shall mean the price at which Purchased Mortgage Loans are to be transferred from the Buyers to Seller upon termination of a Transaction, which will be determined in each case as to any Purchased Mortgage Loan as the sum of (a) the Purchase Price for such Purchased Mortgage Loan as of the date of such determination, plus (b) any accrued and unpaid Price Differential with respect to such Purchased Mortgage Loan as of the date of such determination, plus (c) any other accrued and unpaid fees, expenses, indemnities, and other amounts then due and owing to the Buyers with respect to such Purchased Mortgage Loan.
“Required Buyers” means, for any day, Buyers (a) whose Buyer’s Facility Sums comprise more than 50% of the Maximum Purchase Amount under this Agreement, or (b) if the Termination Date has occurred, who own more than 50% of the Purchased Mortgage Loans owned by the Buyers; provided, for purposes of (a) and (b) of this definition, that at any time there is more than one Buyer (excluding Defaulting Buyers), “Required Buyers” shall include at least two Buyers. The Buyer’s Facility Sum and the ownership percentage of the Purchased Mortgage Loans of any Defaulting Buyer shall be disregarded in determining Required Buyers at any time. To the extent that any action is required by Buyers under this Agreement, the Administrative Agent shall so coordinate such action.
“Requirements of Law” shall mean as to any Person, all requirements and prohibitions contained in the Certificate of Incorporation, Bylaws, Certificate of Formation, Operating Agreement or other organizational or governing documents of such Person, and of any law, treaty, rule, regulation, procedure or any determination of an arbitrator or a determination of
a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property, or to which such Person or any of its Property is subject.
“Responsible Officer” shall mean, as to the Administrative Agent, any Buyer and Seller, respectively, an officer or other authorized representative of such Person listed on Schedule 3 to the Pricing Letter, as such Schedule 3 may be amended from time to time.
“Restricted Cash” shall mean for any Person, any amount of cash or Cash Equivalents of such Person that is contractually required to be set aside, segregated or otherwise reserved.
“S&P” shall mean Standard & Poor’s Ratings Services, or any successor thereto.
“SEC” shall have the meaning set forth in Section 32 hereof.
“Seller” is defined in the introductory paragraph of this Agreement, and includes any permitted successor in interest thereto.
“Servicer Notice” shall mean a notice acknowledged by each Subservicer, if any, substantially in the form of Exhibit B hereto.
“Servicing Rights” shall mean the rights of any Person to administer, service or subservice Mortgage Loans, to collect Income thereon, or to possess related Records.
“Servicing Rights Appraisal” shall mean a written appraisal or evaluation by an Approved Servicing Appraiser evaluating the MSR Appraised Value of all of the Servicing Rights as of a date stated in the written report of such evaluation, each such evaluation and report to be made at Seller’s expense, to be addressed to the Administrative Agent and to be in form and substance acceptable to the Administrative Agent in its commercially reasonable discretion.
“Settlement Agent” shall mean, with respect to any Transaction, the entity approved by the Administrative Agent, in its sole discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the proceeds of the related Mortgage Loan are being disbursed.
“Shortfall Proceeds” shall mean the shortfall, if any, between the proceeds received in the Inbound Account with respect to a purchase or repurchase of a Purchased Mortgage Loan and the Repurchase Price for such Purchased Mortgage Loan.
“SIPA” shall have the meaning set forth in Section 32 hereof.
“Subordinated Debt” means, Indebtedness of Seller (i) which is unsecured, (ii) no part of the principal of such Indebtedness is required to be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior to the date which is one year following the Termination Date and (iii) the payment of the principal of and interest on such Indebtedness and other obligations of Seller in respect of such Indebtedness is subordinated to the prior payment in full of the principal of and interest (including post-petition obligations) on the Transactions and all Obligations on terms and conditions that are satisfactory
in form and substance to the Administrative Agent in its commercially reasonable discretion. Subordinated Debt, if any, outstanding as of the Effective Date is as set forth on Schedule 6 to the Pricing Letter.
“Subordination Agreement” shall mean an agreement, among the Administrative Agent, Seller, and all applicable third parties as the same may be amended from time to time which satisfies the requirements of clause (iii) of the definition of “Subordinated Debt.”
“Subservicer” shall have the meaning set forth in Section 16(c) hereof, and includes the permitted successors and assigns of each such Person, including any Successor Servicer. The Subservicer, if any, on the Effective Date is identified on Schedule 5 to the Pricing Letter.
“Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by 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.
“Successor Servicer” shall have the meaning set forth in Section 16(h) hereof.
“Surplus Amount” shall have the meaning specified in the Pricing Letter.
“Swing Line” shall mean the short term revolving Eligible Mortgage Loans discretionary purchase facility provided for in Section 3(c) under which TIAA will fund purchases of Eligible Mortgage Loans to bridge the Seller’s daily Transactions.
“Swing Line Limit” shall mean [***].
“Swing Line Refunding Due Date” for each Transaction funded under the Swing Line shall mean one (1) Business Day following the Business Day when TIAA funds such Transaction under the Swing Line.
“Swing Line Transaction” means a Transaction funded by TIAA under the Swing Line.
“Takeout Commitment” shall mean a commitment of Seller to sell one or more Mortgage Loans to a Takeout Investor, and the corresponding Takeout Investor’s commitment back to Seller to effectuate the foregoing.
“Takeout Investor” shall mean any institution which has made a Takeout Commitment and has been approved by the Administrative Agent, in its sole and absolute discretion.
“Takeout Investor Purchase Advice” shall mean a summary of the purchase and sale of a Purchased Mortgage Loan to a Takeout Investor and shall specify the proceeds to be paid by the Takeout Investor and shall direct such proceeds to be paid into the Inbound Account.
“Taxes” shall have the meaning set forth in Section 7(a) hereof.
“Termination Date” shall have the meaning specified in the Pricing Letter.
“Test Date” shall have the meaning specified in the Pricing Letter.
“TIAA Bank” means TIAA, FSB, formerly known as EverBank.
“Transaction” shall have the meaning specified in Section 1.
“Transaction Request” shall mean a request from Seller to the Administrative Agent to enter into a Transaction, which shall be submitted electronically to the Administrative Agent through the Warehouse Electronic System in accordance with the Warehouse Customer Guide and to Custodian in accordance with the Custodial Agreement.
“Transaction Term Limitation” shall have the meaning specified in the Pricing Letter.
“Trust Receipt” shall have the meaning set forth in the Custodial Agreement.
“Underwriting Guidelines” shall mean the standards, procedures and guidelines of the Seller for underwriting and acquiring Mortgage Loans, which are set forth in the written policies and procedures of the Seller, as in effect from time to time, a copy of which shall have been provided to the Administrative Agent as required hereunder and such other (i) guidelines mandated by federal regulations, with notice to the Administrative Agent of such guidelines, and (ii) guidelines as are identified and approved in writing by the Administrative Agent in its commercially reasonable discretion.
“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Repurchase Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.
“USPAP Guidelines” shall mean the Uniform Standards of Professional Appraisal Practice, as approved by the Appraisal Standards Board of The Appraisal Foundation, as revised, interpreted and amended from time to time.
“VA” shall mean the Veterans Administration and any successor agency.
“Warehouse Customer Guide” shall mean the guidelines and other information provided to Seller by the Administrative Agent from time to time, setting forth the policies and procedures to be followed by Seller when utilizing the facility contemplated under this Agreement, including without limitation information and parameters input into the Warehouse Electronic System regarding LTV limitations as established by the Administrative Agent from time to time.
“Warehouse Electronic System” shall mean the system utilized by the Administrative Agent either directly, or through its vendors, and which may be accessed by Seller in connection with delivering and obtaining information and requests as described further in the Warehouse Customer Guide.
“Warehouse Facility” shall mean any loan, repurchase or other arrangement for incurring Indebtedness secured by Seller’s Mortgage Loans.
“Warehouse Fees” shall have the meaning specified in the Pricing Letter.
“Wet Delivery Deadline” shall have the meaning specified in the Pricing Letter.
“Wet File” shall mean, with respect to a Wet Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in the Warehouse Customer Guide.
“Wet Mortgage Loan” shall mean an Eligible Mortgage Loan which Seller is selling to the Buyers simultaneously with the origination thereof and for which the Mortgage File has not been delivered to Custodian.
SECTION 3. | INITIATION; SWING LINE TRANSACTIONS; TERMINATION |
(a) Conditions Precedent to Initial Transaction. Each Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the condition precedent that the Administrative Agent shall have received from Seller any fees and expenses payable hereunder, and all of the following documents, each of which shall be satisfactory to the Buyers and their counsel in form and substance:
(i) | The following Facility Documents, duly executed and delivered to the Administrative Agent: |
(A) | Agreement. This Agreement, duly executed by the parties thereto. |
(B) | Electronic Tracking Agreement. The Electronic Tracking Agreement and any and all similar agreements executed in connection with the Existing MRA shall remain in full force and effect. |
(C) | Pricing Letter. The Pricing Letter, duly executed by the parties thereto. |
(D) | Custodial Agreement. The Custodial Agreement and any and all similar agreements executed in connection with the Existing MRA shall remain in full force and effect. |
(E) | Power of Attorney. The Power of Attorney and any and all similar agreements executed in connection with the Existing MRA shall remain in full force and effect. |
(F) | Subordination Agreements. The Subordination Agreements and any and all similar agreements executed in connection with the Existing MRA shall remain in full force and effect. |
(G) | Intercreditor Agreement. Any and all intercreditor agreements executed in connection with the Existing MRA shall remain in full force and effect. |
(H) | Servicing Agreement(s). The Servicing Agreement(s) and any and all similar agreements executed in connection with the Existing MRA shall remain in full force and effect. |
(ii) Organizational Documents. A certificate of corporate or other applicable entity existence of Seller and certified copies of the charter and bylaws (or equivalent documents) of Seller and of all corporate or other applicable authority documents for Seller with respect to the execution, delivery and performance of the Facility Documents and each other document to be delivered by Seller from time to time in connection herewith.
(iii) Good Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date 10 Business Days prior to the Effective Date.
(iv) Incumbency Certificate. An incumbency certificate of the corporate secretary of Seller, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Facility Documents.
(v) Security Interest. Evidence that all other actions necessary or, in the opinion of the Administrative Agent, desirable to perfect and protect the Administrative Agent’s interest in the Purchased Mortgage Loans and other Repurchase Assets have been taken, including, without limitation, UCC searches and duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.
(vi) Insurance. Evidence that Seller has added endorsements for theft of warehouse lender money and collateral, naming the Administrative Agent, as agent for the Buyers, as a loss payee under its Fidelity Insurance and as a direct loss payee/right of action under its errors and omissions insurance policy.
(vii) Fees. Payment of any fees and other costs and expenses due to Buyers and invoiced by the Administrative Agent hereunder and to Custodian under the Custodial Agreement.
(viii) Payment of Pro-Rata Share. Capital One has funded its pro-rata share of the Transactions that were subject to the Existing MRA.
(ix) Other Documents. Such other documents as the Administrative Agent may reasonably request on behalf of itself or either Buyer, in form and substance reasonably acceptable to the Administrative Agent.
(b) Conditions Precedent to all Transactions. Upon satisfaction of the conditions set forth in this Section 3(b), the Buyers may, in their discretion, enter into a Transaction with Seller. Entry into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof:
(i) Due Diligence Review. Without limiting the generality of Section 17 hereof, the Buyers shall have completed, to their satisfaction, any due diligence review of the related Mortgage Loans and Seller.
(ii) No Default. No Default or Event of Default shall have occurred and be continuing under, and such Transaction is in full compliance with all applicable terms and conditions of, the Facility Documents.
(iii) Representations and Warranties. Both immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in Section 11 hereof and by Seller in any other Facility Document to which they respectively are a party, shall be true and accurate on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
(iv) Maximum Purchase Price. After giving effect to the requested Transaction, the aggregate outstanding Purchase Price for all Purchased Mortgage Loans subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Purchase Amount.
(v) No Margin Deficit. Both immediately prior to, and after giving effect to, the requested Transaction, there shall be no Margin Deficit.
(vi) Transaction Request. Seller shall have delivered to the Administrative Agent, in accordance with the timeframes and in the manner set forth in the Warehouse Customer Guide, and to Custodian, in accordance with the timeframes and in the manner set forth in the Custodial Agreement, (a) a Transaction Request and (b) a Mortgage Loan Schedule with respect to all Mortgage Loans subject to the requested Transaction.
(vii) Delivery of Wet File and Mortgage File. Seller shall have delivered to Custodian, in accordance with the timeframes set forth in the Custodial Agreement, with respect to each Mortgage Loan subject to the requested Transaction (a) which is not a Wet Mortgage Loan, the Mortgage File with respect to each such Mortgage Loan and (b) with respect to each Wet Mortgage Loan, (1) the Wet File with respect to each such Mortgage Loan and (2) on or prior to the Wet Delivery Deadline, the Mortgage File.
(viii) Delivery of Trust Receipt. Custodian shall have delivered to the Administrative Agent, in accordance with the timeframes set forth in the Custodial Agreement, a
Trust Receipt (accompanied by a Custodial Loan Transmission) with respect to each Mortgage Loan subject to the requested Transaction.
(ix) Fees and Expenses. The Buyers shall have received all properly invoiced and undisputed fees and expenses of counsel to the Buyers as contemplated by and in accordance with Sections 9 and 15(b), which amounts, at the Buyers’ option so long as an invoice has been received by Seller at least five (5) Business Days prior to the related Purchase Date, may be withheld from the proceeds remitted by the Administrative Agent to Seller pursuant to any Transaction hereunder.
(x) No Material Adverse Change. None of the following shall have occurred and/or be continuing:
(A) an event or events shall have occurred in the good faith determination of the Administrative Agent resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by securities or an event or events shall have occurred resulting in any Buyer not being able to finance Purchased 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 any Buyer not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events; or
(C) there shall have occurred a material adverse change in the financial condition of any Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of any Buyer to fund its obligations under this Agreement; or
(D) there shall have occurred (i) a material change in financial markets, an outbreak or escalation of hostilities or a material change in national or international political, financial or economic conditions; (ii) a general suspension of trading on major stock exchanges; or (iii) a disruption in or moratorium on commercial banking activities or securities settlement services.
Each Transaction Request delivered by Seller hereunder shall constitute a certification by Seller that all the conditions set forth in this Section 3(b) (other than clauses (i), (v), (ix) and (x) hereof) have been satisfied (both as of the date of such notice or request and as of Purchase Date).
(c) | Swing Line Transactions. |
(i) Swing Line Facility. The Seller may request TIAA to fund revolving Swing Line Transactions for aggregate Purchase Prices which do not on any day exceed the Swing Line Limit for the purpose of initially funding requested Transactions. Any Swing Line Transactions shall be in the discretion of TIAA.
(ii) Conditions Precedent to Swing Line Transactions. The Seller may request a Swing Line Transaction if:
(A) Such Swing Line Transaction fully qualifies in all respects for funding pursuant to Section 3(b) except that it may have been requested later in the day;
(B) No Default has occurred that has not been cured before it has become an Event of Default, and no Event of Default has occurred that the Administrative Agent, at the direction of the Required Buyers, has not declared in writing to have been waived or cured and all conditions precedent in Section 3(b) have been satisfied; and
(C) | The Swing Line Limit is not exceeded. |
(iii) All Swing Line Transactions shall have a Price Differential from the date funded until the date repaid and the Repurchase Price therefor shall be due and payable to TIAA at the same rate(s) as would be applicable if such Swing Line Transactions had been funded as Regular Transactions by all Buyers, instead of having been funded by TIAA alone as Swing Line Transactions.
(iv) Each Buyer may refund each Swing Line Transaction by paying the Administrative Agent, before the Swing Line Refunding Due Date, such Buyer’s Funding Share for the Swing Line Transaction (as if such Swing Line Transaction were a Regular Transaction). The Administrative Agent shall then pay TIAA such refunded portion of the Swing Line Transaction, and upon receipt of all Buyers’ Funding Share for the applicable Swing Line Transaction, such Swing Line Transaction shall be deemed to be a Regular Transaction, provided that if the Seller shall not have delivered a new Mortgage File to the Administrative Agent and the Custodian for such Regular Transaction, then such Swing Line Transaction shall accrue interest at the Pricing Rate. Notwithstanding anything to the contrary herein, Capital One shall provide the Administrative Agent written notice thereof, at least twenty four hours in advance, before Capital One shall be permitted to decline to refund a Swing Line Transaction.
(d) | Initiation. |
(i) Seller shall deliver a Transaction Request through the Warehouse Electronic System to the Administrative Agent, and pursuant to the Custodial Agreement to the Custodian, on or prior to the date and time set forth in Section 3(b)(vi) prior to entering into any Transaction. Such Transaction Request shall include all information required by the Administrative Agent pursuant to the Warehouse Customer Guide and by the Custodian pursuant to the Custody Agreement.
(A) If the Seller submits a Transaction Request and Mortgage Loan Schedule to the Administrative Agent and Custodian that are received prior to 2:00 p.m.. on the proposed Purchase Date, the Administrative Agent will submit to each Buyer such Transaction Request for purchase on such Purchase Date. If such documents are received after 2:00 p.m. on any Business Day, the Administrative Agent will submit to each Buyer such Transaction Request for purchase on the following Business Day (unless another Purchase Date is designated in such Transaction Request); provided that in its sole discretion TIAA may elect to fund such purchase on the Purchase Date as a Swing Line Transaction.
(B) When a Transaction Request is received by the Administrative Agent for a Transaction to be funded on a Purchase Date, the Administrative Agent shall give notice electronically to each Buyer of the requested Transaction and that Buyer’s Funding Share thereof, by 3:00 p.m. on the Business Day when the requested Transaction is to be funded by the Buyers. If each Buyer agrees to fund its Funding Share, each Buyer shall cause its Funding Share to be transferred to the Administrative Agent in accordance with the Administrative Agent’s instructions, so that the Administrative Agent receives such Funding Share in immediately available funds within two hours after receiving such notice and in any case by 5:00 p.m. on such Business Day. The Administrative Agent shall transfer the sum of the Purchase Prices for the Transaction to the Funding Account and disburse the sum of the Purchase Prices for the Transaction to the Seller or to its designee(s) for their account. Each of Buyer’s funding the Purchase Price of the Transaction and Seller’s acceptance thereof will constitute the parties agreement to enter into such Transaction. The Administrative Agent shall confirm the terms of each Transaction on the Warehouse Electronic System, including information that sets forth (A) the Purchase Date, (B) the Purchase Price, (C) the Repurchase Date, (D) the Pricing Rate applicable to the Transaction, (E) the applicable Purchase Price Percentages, and (F) additional terms or conditions not inconsistent with this Agreement; provided that the Administrative Agent’s failure to enter the information into the Warehouse Electronic System shall not affect the obligations of Seller with respect to such Transaction.
(C) If TIAA elects to fund a purchase as a Swing Line Transaction, TIAA shall notify each Buyer no later than 10:00 a.m. on each Swing Line Refunding Due Date of such Buyer’s Funding Share of the Swing Line Transactions with that Swing Line Refunding Due Date. The other Buyers may elect to fund their respective Funding Shares of such Swing Line Transactions so that (a) the Swing Line is paid down in full and (b) all Swing Line Transactions are converted to Regular Transactions with each Buyer having funded its Funding Share thereof. All Price Differential accrued on Swing Line Transactions to the applicable Swing Line Refunding Due Date (or the Termination Date if any Buyer elects not to refund its Funding Share) shall be due and payable by the Seller to the Administrative Agent (for distribution to TIAA) in the manner applicable to Regular Transactions but in no event later than the Termination Date. All amounts paid by the Buyers under this Section 3(d)(i)(A) shall be transmitted by federal funds wire transfer in accordance with the Administrative Agent’s instructions. The Administrative Agent shall disburse to TIAA an amount equal to the sum of any Funding Shares received from the Buyers on any day against each Transaction that was initially funded as a Swing Line Transaction (excluding TIAA’s own Funding Share thereof); provided that if a Buyer other than TIAA advises the Administrative Agent by telephone and confirms by fax that such Buyer has placed its Funding Share on the federal funds wire to the account designated by the Administrative Agent, the Administrative Agent shall continue to keep the Swing Line Transaction outstanding until such Buyer’s Funding Share is received, and the Administrative Agent shall then repay TIAA that still-outstanding portion of the Swing Line Transaction from such funds, and the Price Differential accrued at the Pricing Rate(s) applicable to the Transaction on that Funding Share for the period from (and including) the relevant Swing Line Refunding Due Date to (but excluding) the date such Buyer’s Funding Share is received by the Administrative Agent shall belong to TIAA; provided, further that in no event shall TIAA have any obligation to continue such portion of any Swing Line Transaction outstanding if and to the extent, if any, that doing so would cause the total amount funded by TIAA and outstanding to exceed the Swing Line Limit.
(D) This Agreement is not a commitment by any Buyer to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for the Buyers to enter into Transactions with Seller. Seller hereby acknowledges that no Buyer is under any obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement.
(ii) The information entered into the Warehouse Electronic System with respect to any Transaction, together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby unless objected to in writing by Seller no more than two (2) Business Days after the Purchase Date of the Transaction. An objection sent by Seller must state specifically that such writing is an objection, must specify the provision(s) being objected to by Seller, must set forth such provision(s) in the manner that Seller believes they should be stated, and must be received by the Administrative Agent no more than two (2) Business Days after the Purchase Date for the Transaction. Notwithstanding the foregoing, to the extent that Seller accepts funding of the Transaction, Seller shall be deemed to have consented to the terms of the Transaction as set forth in the Warehouse Electronic System. All Transactions entered into on any Business Day shall be reflected in the Daily Activity Report on such Business Day.
(iii) Except as otherwise provided in the definition of Termination Date, the Repurchase Date for each Transaction shall not be later than the Termination Date.
(iv) Subject to the terms and conditions of this Agreement, prior to the Termination Date, Seller may sell, repurchase and resell Eligible Mortgage Loans hereunder.
(v) No later than the date and time set forth in the Custodial Agreement, Seller shall deliver to Custodian (x) the Mortgage Loan File pertaining to each Eligible Mortgage Loan (other than Wet Mortgage Loans) to be purchased by Buyers, and (y) the Wet File for each Wet Mortgage Loan to be purchased by Buyers.
(vi) Upon the Administrative Agent’s receipt of the Trust Receipt (accompanied by a Custodial Loan Transmission) in accordance with the Custodial Agreement and subject to the provisions of this Section 3, the Purchase Price will then be made available to Seller by the Administrative Agent transferring, via wire transfer, in the aggregate amount of such Purchase Price in funds immediately available, as provided in Section 9(b).
(vii) In addition to the other payment and performance obligations of Seller under this Agreement and the other Facility Documents, in the event that the Administrative Agent transfers any amounts for the purchase of a Mortgage Loan as provided herein, Seller shall be fully, absolutely, and unconditionally obligated and liable to repay to the Buyers the full amount thereof if (x) on the related scheduled Purchase Date such Mortgage Loan does not close, or (y) such Mortgage Loan otherwise fails to become a Purchased Mortgage Loan. Any amounts due pursuant to this Section 3(c)(vii) shall be payable on demand, and the unpaid amount thereof shall accrue interest at the Post-Default Rate from the date so transferred until paid in full.
(e) | Repurchase; Purchase by a Takeout Investor. |
(i) Seller may repurchase Purchased Mortgage Loans without penalty or premium on any date. Such repurchase may occur simultaneously with a sale of the Purchased
Mortgage Loan to a Takeout Investor. If Seller intends to make such a repurchase, Seller shall give written notice thereof to the Administrative Agent through the Warehouse Electronic System in accordance with the Warehouse Customer Guide, and to Custodian in accordance with the Custodial Agreement, designating the Purchased Mortgage Loans to be repurchased and providing such other information required pursuant thereto, including, without limitation, delivery of a Takeout Investor Purchase Advice to the extent that such Purchased Mortgage Loan shall be purchased by a Takeout Investor. If such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, and, on receipt, such amount shall be applied to the Repurchase Price for the designated Purchased Mortgage Loans.
(ii) On the Repurchase Date, termination of the Transaction will be effected by reassignment to Seller or its designee of the Purchased Mortgage Loans (including the related Servicing Rights and any Income in respect thereof received by Buyers not previously credited or transferred to, or applied to the Obligations of, Seller) against the simultaneous transfer of the Repurchase Price to an account of the Administrative Agent. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Mortgage Loan (but liquidation or foreclosure proceeds received by the Administrative Agent shall be applied to reduce the Repurchase Price for such Purchased Mortgage Loan except as otherwise provided herein). Seller shall comply with all of the provisions of the Warehouse Customer Guide and the Custodial Agreement in order to effectuate a repurchase hereunder. Seller is obligated to obtain the Mortgage Files from the Administrative Agent or its designee at Seller’s expense on the Repurchase Date. All repurchases effected on any Business Day shall be reflected in the Daily Activity Report for such Business Day. On each Repurchase Date, upon the Administrative Agent’s receipt of the Repurchase Price with respect to the applicable Purchased Mortgage Loan, the Administrative Agent shall be deemed to have simultaneously released its interest in the applicable Purchased Mortgage Loan in accordance with the relevant Bailee Letter (or, in the case of eMortgage Loans, in accordance with an equivalent agreement) if applicable, and otherwise without any further action by the Administrative Agent or any other Person and such Purchased Mortgage Loan shall be transferred to the Seller or its designee free and clear of any liens, pledges or encumbrances of the Administrative Agent or any Buyer hereunder.
SECTION 4. | MARGIN AMOUNT MAINTENANCE |
(a) The Administrative Agent shall determine the Asset Value of each Purchased Mortgage Loan at such intervals as determined by the Administrative Agent in its sole discretion.
(b) If at any time the Asset Value of any Purchased Mortgage Loans subject to a Transaction is less than the Purchase Price for such Transaction, or any applicable Concentration Limit has been exceeded (a “Margin Deficit”), then the Administrative Agent may by notice to Seller (as such notice is more particularly set forth below, a “Margin Call”), require Seller to transfer to the Administrative Agent or its designee cash so that, as applicable, (i) the Asset Value of the Purchased Mortgage Loans will thereupon equal or exceed the Purchase Price for such Transaction, and (ii) no Concentration Limit will be exceeded.
(c) Notice delivered pursuant to Section 4(b) may be given by any written or electronic means. Any notice given before [***] (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than [***] (New York City time) on such
Business Day; notice given after [***] (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than [***] (New York City time) on the following Business Day (the foregoing time requirements for satisfaction of a Margin Call are referred to as the “Margin Deadlines”).
(d) The failure of the Administrative Agent, on any one or more occasions, to exercise its rights under this Section 4, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of the Administrative Agent to do so at a later date. Seller and the Buyers each agree that a failure or delay by the Administrative Agent to exercise its rights under this Section 4 shall not limit or waive the Administrative Agent’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.
(e) Any cash transferred to the Administrative Agent pursuant to Section 4(b) above shall be credited to the Repurchase Price of the related Transactions.
SECTION 5. | COLLECTIONS; INCOME PAYMENTS |
(a) All Income, and all rights to Income, of, on, or otherwise with respect to all Purchased Mortgage Loans is the sole and exclusive property of the Buyers as the owner thereof, pending repurchase on the related Repurchase Date. Notwithstanding the foregoing, and provided no Default has occurred and is continuing, the Buyers agree that Seller shall be entitled to receive, solely from such Income, an amount equal to all Income received in respect of the Purchased Assets; provided, however, that any Income received by or on behalf of Seller while the related Transaction is outstanding shall be deemed held by Seller solely in trust for the Buyers pending the repurchase on the related Repurchase Date.
(b) In the event that a Default has occurred and is continuing, notwithstanding any provision set forth herein, Seller shall remit to the Administrative Agent, by wire transfer in accordance with wire transfer instructions previously given to Seller by the Administrative Agent, all Income received with respect to each Purchased Mortgage Loan on such date or dates as the Administrative Agent notifies Seller in writing.
(c) All amounts required to be paid or remitted by Seller to the Administrative Agent which are not made when due shall bear interest from the due date until the remittance, transfer or payment is made, payable by Seller, at the lesser of the Post-Default Rate or the maximum rate of interest permitted by law. If there is no maximum rate of interest specified by applicable law, interest on such sums shall accrue at the Post-Default Rate.
SECTION 6. | REQUIREMENTS OF LAW |
(a) If any Requirement of Law (other than with respect to any amendment made to a Buyer’s certificate of incorporation and bylaws or other organizational or governing documents) or any change in the governmental or judicial interpretation or application thereof or compliance by the Administrative Agent or a Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Buyer to any Tax or increased Tax of any kind whatsoever with respect to this Agreement or any Transaction or change the basis of taxation of payments to any Buyer in respect thereof (other than Taxes described in clauses (I) through (IV) of Section 7(a);
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of any Buyer which is not otherwise included in the determination of the LIBOR Rate hereunder; or
(iii) shall impose on any Buyer any other condition;
and the result of any of the foregoing is to increase the cost to any Buyer, by an amount which such Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, in any such case, Seller shall promptly pay to such Buyer such additional amount or amounts as calculated by such Buyer in good faith as will compensate such Buyer for such increased cost or reduced amount receivable.
(b) If any Buyer shall have determined that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made to such Buyer’s certificate of incorporation and bylaws or other organizational or governing documents) regarding capital adequacy or in the interpretation or application thereof or compliance by such Buyer or any corporation controlling such Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Buyer to be material, then from time to time, Seller shall promptly pay to such Buyer such additional amount or amounts as will compensate such Buyer for such reduction.
(c) If any Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify Seller and the Administrative Agent of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section submitted by a Buyer to Seller shall be conclusive in the absence of manifest error.
SECTION 7. | TAXES |
(a) Any and all payments by Seller under or in respect of this Agreement or any other Facility Documents to which Seller is a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority (collectively, “Taxes”), unless required by law. If Seller shall be required under any applicable Requirement of Law to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of
the other Facility Documents to any Buyer, (i) Seller shall make all such deductions and withholdings in respect of Taxes, (ii) Seller shall pay the full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance with any applicable Requirement of Law, and (iii) the sum payable by Seller shall be increased as may be necessary so that after Seller has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable under this Section 7) each Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of Non-Excluded Taxes. For purposes of this Agreement the term “Non-Excluded Taxes” are Taxes imposed on or with respect to any payment made by or on account of any obligation of the Seller under this Agreement or any of the other Facility Documents other than (I) Taxes imposed on or measured by overall Net Income, franchise Taxes, and branch profits Taxes, in each case, (x) imposed as a result of such Buyer or any other recipient of the payment being organized under the laws of, or having its applicable lending office in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (y) imposed as a result of a present or former connection between such Buyer or any other recipient of the payment and the jurisdiction imposing such Tax (other than connection arising from such person having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Facility Documents (in which case such Taxes will be treated as Non-Excluded Taxes), (II) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Buyer or other recipient of a payment hereunder pursuant to a law in effect on the date such person becomes a party to this Agreement or such person changes its lending office, except to the extent that, pursuant to Section 7, amounts were payable to such person’s assignor immediately before such person becomes a party to this Agreement or were payable before such person changed its lending office, (III) Taxes attributable to a failure by such Buyer to comply with Section 7(e), and (IV) any U.S. federal withholding Taxes imposed under FATCA.
(b) In addition, Seller hereby agrees to pay any present or future stamp, recording, documentary, excise, property or value-added taxes, or similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Facility Document or from the execution, delivery or registration of, any performance under, or otherwise with respect to, this Agreement or any other Facility Document, except any such Taxes that are imposed with respect to an assignment as a result of a present or former connection between any Buyer and the jurisdiction imposing such Tax (other than connection arising from such person having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Facility Documents) (collectively, “Other Taxes”).
(c) Seller hereby agrees to indemnify each Buyer for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 7 imposed on or paid by such Buyer and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. The indemnity by Seller provided for in this Section 7(c) shall apply and be made whether or not the Non-Excluded Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally asserted. Amounts payable by Seller under the indemnity set forth in this Section 7(c) shall be paid within ten (10) days from the date on which such Buyer makes written demand therefor.
(d) Within thirty (30) days after the date of any payment of Taxes, Seller (or any Person making such payment on behalf of Seller) shall furnish to such Buyer for its own account a certified copy of the original official receipt evidencing payment thereof, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Buyer.
(e) Each Buyer and any assignee shall deliver to Seller a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 (or any successor form) certifying that it is not subject to backup withholding. If a payment made to a Buyer or Buyer assignee under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Buyer or assignee 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 or assignee shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by the 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 the Seller as may be necessary for the Seller to comply with their obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 7(e)(C), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f) If any Buyer determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by Seller or with respect to which the Seller has paid additional amounts pursuant to Section 7(a), it shall pay to Seller an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by Seller under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by such Buyer and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that Seller, upon the request of such Buyer, agrees to repay the amount paid over to the it (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such Buyer is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 7(f), in no event will the indemnified party be required to pay any amount to Seller pursuant to this Section 7(f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party 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 or additional amounts with respect to such Tax had never been paid.
(g) Without prejudice to the survival of any other agreement of Seller hereunder, the agreements and obligations of Seller contained in this Section 7 shall survive the termination of this Agreement. Nothing contained in this Section 7 shall require any Buyer to make available any of its tax returns or any other information that it deems to be confidential or proprietary.
(h) Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes, to treat the Transaction as indebtedness of Seller that is secured by the Purchased Mortgage Loans and the Purchased Mortgage Loans as owned by Seller for federal income tax purposes in the absence of a Default by Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law.
SECTION 8. | SECURITY INTEREST; APPOINTMENT AS ATTORNEY-IN-FACT |
(a) Security Interest. On each Purchase Date, Seller hereby sells, assigns and conveys all rights, title, and interests in, to, and under the Purchased Mortgage Loans identified on the related Mortgage Loan Schedule or as to which the Buyers otherwise pay the Purchase Price as provided herein, including the related Mortgage File and Servicing Rights and all Income therefrom. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and, in any event, as security for the performance by Seller of its Obligations, Seller hereby pledges to the Administrative Agent, as agent for the Buyers, and hereby grants, assigns and pledges to the Administrative Agent, as agent for the Buyers, a fully perfected first priority security interest in all of the Seller’s right, title, and interest in, to, and under the following, in all instances whether now owned or hereafter acquired, now existing or hereafter created and wherever located (collectively, the “Repurchase Assets”):
(i) | the Purchased Mortgage Loans; |
(ii) | the Mortgage File and Records related to the Purchased Mortgage Loans; |
(iii) | all Servicing Rights related to the Purchased Mortgage Loans; |
(iv) the Facility Documents (to the extent such Facility Documents and Seller’s rights thereunder relate to the Purchased Mortgage Loans);
(v) | any Property relating to any Purchased Mortgage Loan or the related Mortgaged Property; |
(vi) | any Takeout Commitments relating to any Purchased Mortgage Loan; |
(vii) | any Closing Protection Letter relating to any Purchased Mortgage Loan; |
(viii) all insurance policies and insurance proceeds relating to any Purchased Mortgage Loan or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance or hazard insurance;
(ix) | all Income relating to any Purchased Mortgage Loan; |
(x) | the Inbound Account; |
(xi) | the Haircut Account; |
(xii) | any Hedge Agreements relating to any Purchased Mortgage Loan; |
(xiii) any other contract rights, accounts, deposit accounts (including any interest of Seller in escrow accounts), payments, rights to payment (including payments of interest or finance charges), and general intangibles to the extent that any of the foregoing relates to any Purchased Mortgage Loan,
(xiv) any other assets relating to the Purchased Mortgage Loans (including, without limitation, any other deposit accounts) or any interest in the Purchased Mortgage Loans;
(xv) any and all replacements or substitutions for, proceeds (including the related securitization proceeds) of, and distributions on or with respect to any of the foregoing; and
(xvi) any other property, rights, title or interests as are specified on a Mortgage Loan Schedule and/or Transaction Request and/or in the Warehouse Electronic System.
Seller acknowledges that it has no rights to service the Purchased Mortgage Loans. Without limiting the generality of the foregoing and in the event that Seller is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, Seller grants, assigns and pledges to the Administrative Agent, as agent for the Buyers, a security interest in the Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to the Agreement and Transactions hereunder as defined under Sections 101(47)(v) and 741(7)(x) of the Bankruptcy Code.
Seller hereby authorizes the Administrative Agent to file such financing statement or statements relating to the Repurchase Assets and the Servicing Rights as the Administrative Agent, at its option, may deem appropriate, without the signature of Seller thereon. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 8.
(b) Administrative Agent’s Appointment as Attorney in Fact. Seller hereby irrevocably constitutes and appoints the Administrative Agent 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 the Administrative Agent’s discretion, 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 gives the Administrative Agent the power and right, on behalf of Seller, without assent by, but with notice to, Seller, if an Event of Default shall have occurred and be continuing, to do the following:
(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 other Repurchase Assets and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due with respect to any other Repurchase Assets whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or threatened against the Repurchase Assets;
(iii) (A) to direct any party liable for any payment under any Repurchase Assets to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (B) 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 Repurchase Assets; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase Assets; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Repurchase Assets or any proceeds thereof and to enforce any other right in respect of any Repurchase Assets; (E) to defend any suit, action or proceeding brought against Seller with respect to any Repurchase Assets; (F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Administrative Agent may deem appropriate; and (G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Repurchase Assets as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and to do, at the Administrative Agent’s option and Seller’s expense, at any time, and from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Repurchase Assets and the Administrative Agent’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do;
(iv) for the purpose of carrying out the transfer of servicing with respect to the Mortgage Loans from Seller to a successor servicer appointed by the Administrative Agent in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives the Administrative Agent the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Mortgage Loans substantially in the form required pursuant to applicable Requirements of Law, transferring the servicing of the Mortgage Loans to a successor servicer appointed by the Administrative Agent in its sole discretion; and
(v) to deliver notices of sale to Mortgagors or other third parties, including without limitation, those required by law.
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. In addition to the foregoing, Seller agrees to execute a Power of Attorney to be delivered on the date hereof.
Seller also authorizes the Administrative Agent, if an Event of Default shall have occurred and be continuing, from time to time, to execute, in connection with any sale provided for in Section 14 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Repurchase Assets.
The powers conferred on the Administrative Agent hereunder are solely to protect the Buyers’ interests in the Repurchase Assets and shall not impose any duty upon it to exercise any such powers. The Administrative Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any Buyer nor any of their officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent shall be entitled to all remedies available to a secured creditor under the Uniform Commercial Code and shall have the right to apply the Repurchase Assets or any proceeds therefrom to all Obligations.
SECTION 9. | PAYMENT, TRANSFER; ACCOUNTS AND CUSTODY |
(a) Administrative Agent’s Account. Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set off or counterclaim, to the Administrative Agent at the account maintained and indicated by the Administrative Agent not later than [***] New York City time, on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been made on the next succeeding Business Day). Seller acknowledges that it has no rights of withdrawal from the foregoing account.
(b) Remittance of Purchase Price. On the Purchase Date for each Transaction, ownership of the Purchased Mortgage Loans shall be transferred to the Buyers or their designee against the simultaneous transfer of the Purchase Price to the applicable Settlement Agent. With respect to the Purchased Mortgage Loans being sold by Seller on a Purchase Date, Seller hereby sells, transfers, conveys and assigns to the Buyers or their designee without recourse, but subject to the terms of this Agreement, all of the right, title and interest of Seller in and to the Purchased Mortgage Loans, including the related Mortgage File and Servicing Rights and all Income thereon, and all right, title, and interest of Seller in and to the proceeds of any related Repurchase Assets. The Administrative Agent may confirm that the Initial Haircut Account Funded Amount has been deposited into the Haircut Account prior to its remittance of any amounts in accordance herewith. Subject to the Administrative Agent’s verification of necessary cleared funds in the Haircut Account, the Administrative Agent shall remit to the Settlement Agent the full amount of the outstanding principal balance of such Purchased Mortgage Loan and shall withdraw and retain from the Haircut Account, the Haircut Amount.
(c) Reserved.
(d) Inbound Account. Seller shall establish and maintain an Inbound Account identified in the Pricing Letter, in the form of a deposit account. The Inbound Account shall be established with TIAA BANK. The Administrative Agent shall have exclusive withdrawal rights from such Inbound Account. Funds deposited in the Inbound Account may be transferred as set forth herein. Any interest or other earnings on the investment of funds held in the Inbound Account shall be deposited in the Inbound Account, subject to withdrawal pursuant hereto. All amounts on deposit in the Inbound Account shall be held as cash margin and collateral for all Obligations under this Agreement (such amount, to the extent not applied to Obligations under the Agreement, the “Repurchase Proceeds”). In connection with any repurchase or purchase by a Takeout Investor of a Purchased Mortgage Loan, Seller shall direct remittance of the proceeds therefor into the Inbound Account. Seller shall be required to comply with all requirements in connection with any repurchase and remittance into the Inbound Account. Upon receipt of any Repurchase Proceeds in the Inbound Account, the Administrative Agent shall apply such Repurchase Proceeds to the Repurchase Price for the related Purchased Mortgage Loans. Any Repurchase Proceeds in excess of the Repurchase Price for the related Purchased Mortgage Loans shall be remitted to the Haircut
Account, for application as contemplated pursuant to Section 9(e). Without limiting the generality of the foregoing, in the event that a Margin Call or a Default has occurred and is continuing, the Administrative Agent shall be entitled to use any or all of the Repurchase Proceeds to cure such circumstance or otherwise exercise remedies available to the Administrative Agent without prior notice to, or consent from, Seller.
(e) Haircut Account. Seller shall establish and maintain a Haircut Account identified in the Pricing Letter, in the form of a deposit account. The Haircut Account shall be established with TIAA Bank. The Administrative Agent shall have exclusive withdrawal rights from such Haircut Account. Any interest or other earnings on the investment of funds held in the Haircut Account shall be deposited in the Haircut Account, subject to withdrawal pursuant hereto. The Administrative Agent is hereby authorized and instructed by Seller to withdraw from the Haircut Account any and all amounts contemplated herein. On each Purchase Date, Seller shall deposit the Initial Haircut Account Funded Amount into the Haircut Account. Upon purchase by Buyers of the related Purchased Mortgage Loan, the Administrative Agent shall withdraw the Haircut Amount to reimburse itself for the difference between the actual amount remitted by the Administrative Agent on the Purchase Date on account of the Purchased Mortgage Loan and the Purchase Price for such Purchased Mortgage Loan. Upon repurchase by Seller, or purchase by a Takeout Investor, of any Purchased Mortgage Loan, if there remain on deposit in the Inbound Account Excess Proceeds with respect to such Mortgage Loan, then the Administrative Agent shall remit the Excess Proceeds to the Haircut Account and such Excess Proceeds shall be added to the Net Account Funded Amount for such Mortgage Loan. Upon repurchase by Seller, or purchase by a Takeout Investor, of any Purchased Mortgage Loan, if there exists in the Inbound Account Shortfall Proceeds with respect to such Mortgage Loan, then the Administrative Agent may withdraw from the Haircut Account the amount of any Shortfall Proceeds and such amount shall be deducted from the Net Account Funded Amount. In addition to the foregoing, the Administrative Agent shall be entitled to deduct and withdraw from the Haircut Account all Warehouse Fees. To the extent that, following application of all deposits and withdrawals as contemplated herein with respect to a Purchased Mortgage Loan that is repurchased by Seller or purchased by a Takeout Investor, (i) the Net Account Funded Amount for any such Mortgage Loan is a positive number, then such Net Account Funded Amount for such Mortgage Loan shall, subject to this section, be available for remittance to Seller upon written request therefor; and (ii) the Net Account Funded Amount for any such repurchased Mortgage Loan is a negative number, then Seller shall promptly remit to the Administrative Agent the amount of such Net Account Funded Amount for such Mortgage Loan. Without limiting the foregoing, to the extent that the Net Account Funded Amount for any repurchased Mortgage Loan is a negative number, the Administrative Agent shall be entitled to withdraw, retain and apply any amounts on deposit in the Haircut Account up to the amount of such negative Net Account Funded Amount. To the extent that the aggregate Net Account Funded Amounts (net of any amounts withdrawn as contemplated herein) for all repurchased Mortgage Loans exceeds the Surplus Amount, then Seller may, no more than once per Business Day, deliver a written request prior to 2:00 p.m. (New York Time) for the Administrative Agent to remit any amount in excess of the Surplus Amount to Seller. To the extent that there exists no Default, the Administrative Agent shall, upon receipt of such written request, remit any such amount in excess of the Surplus Amount to Seller. Any interest or other earnings on the investment of funds deposited in the Haircut Account shall be deposited in the Haircut Account, subject to withdrawal pursuant hereto. Without limiting the generality of the foregoing, in the event that a Margin Call or other Default exists, the Administrative Agent shall
be entitled to use any or all of the amounts on deposit in the Haircut Account to cure such circumstance or otherwise exercise remedies available to the Administrative Agent without prior notice to, or consent from, Seller.
(f) Fees. Seller shall pay in immediately available funds to the Administrative Agent and Custodian all fees, including without limitation, the Warehouse Fees, as and when required hereunder and under the Custodial Agreement. All such payments shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Administrative Agent at such account designated by the Administrative Agent or to the Custodian at such account designated by the Custodian. Without limiting the generality of the foregoing or any other provision of this Agreement, the Administrative Agent may withdraw and retain from the Haircut Account any Warehouse Fees due and owing to the Buyers.
SECTION 10. | DELIVERY OF DOCUMENTS |
(a) Custody of Mortgage Files. In connection with the sale, transfer, conveyance and assignment of Purchased Mortgage Loans, on or prior to each Purchase Date in accordance with the terms of the Custodial Agreement and the Warehouse Customer Guide, Seller shall deliver or cause to be delivered and released to Custodian, as custodian for the Administrative Agent, the Mortgage File or Wet File, as applicable for the related Purchased Mortgage Loans. No eMortgage Loan can be the subject of a Transaction until the Custody Agreement has been amended to provide for completion of the eNote Delivery Requirements by the Custodian.
With respect to any eMortgage Loan, Seller shall cause (A) the Authoritative Copy of the related eNote to be held in the eVault as a secure electronic file, (B) the Controller status of the related eNote to be transferred to Administrative Agent by the Controller Status Transfer Deadline, (C) the Location status of the related eNote to be transferred to the Custodian by the Controller Status Transfer Deadline, (D) the Delegatee status of the related eNote to be transferred to Custodian by the Controller Status Transfer Deadline, and (E) the Servicing Agent status of the related eNote to remain blank, in the case of subsections (B) – (E) on the MERS eRegistry (collectively, the “eNote Delivery Requirements”). In addition, all Required Documents that are Electronic Records must be delivered to Custodian electronically, and all other Required Documents must be delivered physically, as required by the Custodial Agreement.
Seller shall be solely responsible for providing each and every document required for each Mortgage File to Custodian in a timely manner and for completing or correcting any missing, incomplete or inconsistent documents, and neither Custodian, the Administrative Agent nor any Buyer shall be responsible or liable for taking any such action, causing Seller or any other person or entity to do so or notifying any Person that any such action has or has not been taken.
(b) Release of Mortgage Files. From time to time as appropriate for the sale or repurchase of any of the Purchased Mortgage Loans, provided that no Event of Default shall have occurred and be continuing, the Administrative Agent shall, upon receipt of a request for release through the Warehouse Electronic System and compliance with the requirements of the Warehouse Customer Guide and the Custodial Agreement, release or cause Custodian to release to Seller the related Mortgage File or the documents of the related Mortgage File set forth in such request for release. All Mortgage Files or documents from Mortgage Files so released to Seller shall be held
by Seller in trust for the benefit of the Administrative Agent until the relevant Purchased Mortgage Loan is repurchased by Seller hereunder.
In connection with the payment in full, sale or repurchase of any Mortgage Loan, and upon receipt by the Administrative Agent of such information through the Warehouse Electronic System, and subject to the Administrative Agent receiving all amounts due on account of the Repurchase Price hereunder, and there existing no Event of Default has occurred and is continuing, the Administrative Agent shall promptly release or cause the Custodian to release the related Mortgage File to Seller.
(c) Purchase By Takeout Investor. Seller shall provide to the Administrative Agent a completed request for release of documents with respect to the related Mortgage Loans to be purchased by a Takeout Investor through the Warehouse Electronic System and as otherwise required by the Custodian and shall comply with all other requirements set forth in the Warehouse Customer Guide and the Custodial Agreement. Subject to the terms hereof and of the Custodial Agreement, the Mortgage Files relating to the Mortgage Loans included in a request for release shall be sent for delivery by Custodian to the applicable Takeout Investor specified by Seller to the Administrative Agent in the Warehouse Electronic System and to Custodian as required by the Custodial Agreement; provided that such Mortgage File shall be accompanied by a fully completed Bailee Letter (or, in the case of eMortgage Loans, sent pursuant to an equivalent agreement). The Administrative Agent shall not instruct Custodian to deliver or approve the delivery of any Mortgage File to any potential Takeout Investor unless such Takeout Investor was identified by Seller to the Administrative Agent in the Warehouse Electronic System.
In the event that a Takeout Investor rejects a Mortgage Loan for purchase pursuant to a Takeout Commitment for any reason whatsoever, Seller shall promptly notify the Administrative Agent via the Warehouse Electronic System upon receipt of notification from the Takeout Investor.
(d) Written Instructions as to the method of shipment and shipper(s) that Custodian is directed to utilize in connection with transmission of Mortgage Files shall be delivered by Seller to Custodian and the Administrative Agent as required by the Custodial Agreement.
SECTION 11. | REPRESENTATIONS |
Seller represents and warrants to the Administrative Agent and each Buyer that as of the Purchase Date for any Purchased Mortgage Loans by the Buyers from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while the Facility Documents are in full force and effect and/or any Transaction hereunder is outstanding:
(a) Acting as Principal. Seller will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal).
(b) No Broker. Seller has not dealt with any broker, investment banker, agent, or other person, except for the Administrative Agent and the Buyers, who may be entitled to any commission or compensation based on or arising from the sale of Purchased Mortgage Loans by Seller to Buyers pursuant to this Agreement. The foregoing representation and warranty does not
relate to third party mortgage brokers to whom compensation may be payable by Seller for the origination of a Purchased Mortgage Loan, such payments being the sole responsibility of Seller.
(c) Financial Statements. The Financial Reporting Party has heretofore furnished to the Administrative Agent a copy of its (a) consolidated and consolidating balance sheet and the consolidated and consolidating balance sheets of its consolidated Subsidiaries for the fiscal year ended the Annual Financial Statement Date and the related consolidated statements of income and retained earnings and of cash flows for the Financial Reporting Party and its consolidated Subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of an Approved CPA and (b) consolidated and consolidating balance sheet and the consolidated and consolidating balance sheets of its consolidated Subsidiaries for the quarterly fiscal period of the Financial Reporting Party ended on the Monthly Financial Statement Date, and the related consolidated statements of income and retained earnings and of cash flows for the Financial Reporting Party and its consolidated Subsidiaries for such quarterly fiscal period, setting forth in each case in comparative form the figures for the previous year. All such Financial Statements are true and correct and fairly present, in all material respects, the consolidated financial condition of the Financial Reporting Party and its Subsidiaries and the consolidated results of their operations as at such dates and for such monthly periods, all in accordance with GAAP applied on a consistent basis. Since the Annual Financial Statement Date, there has been no material adverse change in the consolidated business, operations or financial condition of the Financial Reporting Party and its consolidated Subsidiaries taken as a whole from that set forth in said Financial Statements nor is Seller aware of any state of facts which (without notice or the lapse of time) would be reasonably likely to result in any such material adverse change or would be reasonably likely to have a Material Adverse Effect. The Financial Reporting Party does not have, on the Annual Financial Statement Date, any liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of the Financial Reporting Party except as heretofore disclosed to the Buyers in writing.
(d) Organization, Etc. Seller: (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (ii) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; (iii) is duly licensed or is otherwise qualified in each jurisdiction in which qualification is required to transact business for the business which it conducts and is not in default of any applicable federal, state or local laws, rules and regulations unless, in either instance, the failure to take such action is not reasonably likely (either individually or in the aggregate) to cause a Material Adverse Effect; and (iv) has full power and authority to execute, deliver and perform its obligations under the Facility Documents.
(e) Authorization, Compliance, Approvals. The execution and delivery of, and the performance by Seller of its obligations under, the Facility Documents to which it is a party (a) are within Seller’s powers, (b) have been duly authorized by all requisite action, (c) do not violate any provision of any applicable Requirement of Law, rule or regulation, or any order, writ, injunction
or decree of any court or other Governmental Authority to which Seller or its property is subject, or its organizational documents, (d) do not violate any indenture, agreement, document or instrument to which Seller or any of its Subsidiaries is a party, or by which any of them or any of their properties, any of the Repurchase Assets is bound or to which any of them is subject and (e) are not in conflict with, do not result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or except as may be provided by any Facility Document, result in the creation or imposition of any Lien upon any of the property or assets of Seller or any of its Subsidiaries pursuant to, any such indenture, agreement, document or instrument. Seller is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the consummation of the Transactions contemplated herein and the execution, delivery or performance of the Facility Documents to which it is a party, or if required, such consent, approval or authorization or other action has been obtained prior to the Effective Date. With respect to any and all Records or Electronic Records submitted or transmitted to the Administrative Agent or any Buyer including, but not limited to, fax copies of Records or Electronic Records, Seller represents and warrants that any party who submitted or transmitted Records or Electronic Records or who submitted or transmitted Records or Electronic Records containing Seller’s signature or Seller’s Electronic Signature was authorized to do so.
(f) Litigation. Except as described in Schedule 7 to the Pricing Letter or as otherwise set forth in a certificate delivered pursuant to Section 12(d)(ii), there are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or, to the knowledge of Seller, threatened) or other legal or arbitration proceedings against Seller or any of its Subsidiaries or affecting any of the Repurchase Assets before any Governmental Authority which (i) questions or challenges the validity or enforceability of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) individually or in the aggregate, would be reasonably likely to be adversely determined and if adversely determined, would have a Material Adverse Effect or (iii) relates to any violation of the Home Ownership and Equity Protection Act or any state, city or district high cost home mortgage or predatory lending law and that would be reasonably likely to be adversely determined and if adversely determined, would have a Material Adverse Effect.
(g) | Purchased Mortgage Loans. |
(i) With respect to each Mortgage Loan to be sold hereunder by Seller to the Buyers, such Mortgage Loan is an Eligible Mortgage Loan, including that all applicable representations and warranties set forth in Schedule 1 hereto are true, correct, and complete.
(ii) Seller has not assigned, pledged, or otherwise conveyed or encumbered to or in favor of any Person other than the Administrative Agent and the Buyers any Mortgage Loan to be sold to Buyers hereunder, and immediately prior to the sale of such Mortgage Loan to Buyers, Seller was the sole owner of such Mortgage Loan and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released simultaneously with the sale to Buyers hereunder and the Liens in favor of the Administrative Agent and the Buyers.
(iii) The provisions of this Agreement are effective to either constitute a sale of Repurchase Assets to the Buyers or to create in favor of the Administrative Agent, as agent for the
Buyers a valid security interest in all right, title and interest of Seller in, to and under the Repurchase Assets.
(h) Proper Names; Chief Executive Office/Jurisdiction of Organization. Seller does not operate in any jurisdiction under a trade name, division name or name other than those names previously disclosed in writing by Seller to the Administrative Agent. On the Effective Date, Seller’s chief executive office is, and has been, located as specified on the signature page hereto. Seller’s jurisdiction of organization is as set forth in the Pricing Letter.
(i) Location of Books and Records. The location where Seller keeps its books and records, other than those relating to Serviced Loans or the servicing of other Mortgage Loans, is its chief executive office. The location where Seller keeps its books, computer tapes and records relating to the Serviced Loans and the servicing of other Mortgage Loans is its servicing center, located at 11511 Luna Road, 2nd and 3rd floors, Farmer’s Branch, Texas.
(j) Enforceability. This Agreement and all of the other Facility Documents executed and delivered by Seller in connection herewith are legal, valid and binding obligations of Seller and are enforceable against Seller in accordance with their terms, except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Requirements of Law affecting creditors’ rights generally, and (ii) general principles of equity.
(k) Ability to Perform. Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the Facility Documents to which it is a party on its part to be performed.
(l) | No Event of Default. No Event of Default has occurred and is continuing. |
(m) No Adverse Selection. Seller has not selected the Purchased Mortgage Loans in a manner so as to adversely affect any Buyer’s interests.
(n) Adjusted Tangible Net Worth. On the initial Purchase Date, the Adjusted Tangible Net Worth of Seller is not less than the Adjusted Tangible Net Worth required of Seller in the Pricing Letter.
(o) Debt for Borrowed Money. All credit facilities, repurchase facilities or substantially similar facilities or other debt for borrowed money of Seller in the aggregate principal amount of [***] or more (the “Debt for Borrowed Money Arrangements”) which are presently in effect and/or outstanding are listed on Schedule 2 to the Pricing Letter or the Seller has otherwise notified the Administrative Agent with reasonable promptness thereof and no events of default exist thereunder.
(p) Accurate and Complete Disclosure. The information, reports, Financial Statements, exhibits and schedules furnished in writing by or on behalf of Seller to the Buyers in connection with the negotiation, preparation or delivery of this Agreement or performance hereof and the other Facility Documents to which it is a party or included herein or therein or delivered pursuant hereto or thereto, as of the date provided, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were made, not misleading. There is no fact known to Seller, after due inquiry, that would reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Facility Documents or in a report, Financial Statement, exhibit, schedule, disclosure letter or other writing furnished to the Administrative Agent or the Buyers for use in connection with the transactions contemplated hereby or thereby.
(q) Margin Regulations. The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.
(r) Investment Company. Neither Seller nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(s) Solvency. As of the date hereof and immediately after giving effect to each Transaction, Seller and its Subsidiaries, taken as a whole, are solvent and, after giving effect to each Transaction will not be rendered insolvent by such Transaction or left with an unreasonably small amount of capital with which to engage in their business. Seller does not intend to incur, nor does it believe that it has incurred, debts beyond its ability to pay such debts as they mature. Seller is not contemplating the commencement of an insolvency, bankruptcy, liquidation, or consolidation proceeding or the appointment of a receiver, liquidator, conservator, trustee, or similar official in respect of itself or any of its property.
(t) | ERISA. |
(i) No liability under Section 4062, 4063, 4064 or 4069 of ERISA has been or is reasonably expected by Seller to be incurred by Seller or any ERISA Affiliate thereof with respect to any Plan in an amount that could reasonably be expected to have a Material Adverse Effect.
(ii) Neither Seller nor any of its ERISA Affiliates have, with respect to any Plan, failed to satisfy the minimum funding standards of Section 412 of the Code or Section 302 of ERISA, whether or not waived, as of the last day of the most recent fiscal year of such Plan ended prior to the date hereof, and no such plan which is subject to Section 412 of the Code failed to meet the requirements of Section 436 of the Code as of such last day. Neither Seller nor any ERISA Affiliate thereof is subject to a Lien in favor of such a Plan as described in Section 430(k) of the Code or Section 303(k) of ERISA.
(iii) Each Plan is in compliance with the applicable provisions of ERISA and the Code, except where the failure to comply would not result in any Material Adverse Effect.
(iv) Neither Seller nor any of its Subsidiaries has incurred a tax liability under Chapter 43 of the Code or a penalty under Section 502 of ERISA which has not been paid in full, except where the incurrence of such tax or penalty would not result in a Material Adverse Effect.
(v) Neither Seller nor any ERISA Affiliate thereof has incurred or reasonably expects to incur any withdrawal liability under Section 4201 of ERISA as a result of a complete or partial withdrawal from a Multiemployer Plan in an amount that could reasonably be expected to have a Material Adverse Effect.
(u) Taxes. Seller and its Subsidiaries have timely filed all tax returns that are required to be filed by them and have timely paid all Taxes due, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which is has established adequate reserves. There are no Liens for Taxes, except for statutory liens for Taxes not yet due and payable.
(v) No Reliance. Seller has made its own independent decisions to enter into the Facility Documents and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Seller is not relying upon any advice from the Administrative Agent, any Buyer or Custodian as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(w) Plan Assets. Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased Mortgage Loans are not “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, in Seller’s hands and transactions by or with Seller are not subject to any state or local statute regulating investments of, or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA.
(x) Agency and Governmental Authority Approvals. Seller is approved by those Agencies and Governmental Authorities set forth on Schedule 8 to the Pricing Letter for the origination, sale, and/or servicing of Mortgage Loans. In each such case, Seller is in good standing, with no material adverse event having occurred that which would either make Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency or Governmental Authority other than in the ordinary course.
(y) Ability to Service Mortgage Loans; Servicing Agreements. Seller has or if Seller is not the Servicer shall cause the Subservicer to have 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 Purchased Mortgage Loans and in accordance with Accepted Servicing Practices. Seller is not a party to any servicing agreements with respect to any of its Mortgage Loans except as set forth on Schedule 5 to the Pricing Letter as the same may be updated from time to time by Seller providing notice to the Administrative Agent thereof, true and complete copies of which servicing agreements have been furnished to the Administrative Agent. Except as set forth on Schedule 5 of the Pricing Letter, no Purchased Mortgage Loans will be subject to any such servicing agreements.
(z) Anti-Money Laundering Laws. Seller has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”); Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has conducted the requisite due diligence in connection with the origination of each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by the said Mortgagor to purchase the property in question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.
(aa) No Prohibited Persons. Neither Seller nor any of its Affiliates, officers, directors, partners or members is an entity or person (or to the Seller’s knowledge, owned or controlled by an entity or person): (i) that is listed in the Annex to, or is otherwise subject to the provisions of Executive Order 13224 issued on September 24, 2001 (“EO13224”); (ii) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO13224; or (iv) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in clauses (i) through (iv) above are herein referred to as a “Prohibited Person”).
(bb) Hedging. Seller has established a formal hedging policy and program, with respect to all of its Mortgage Loans, other than those in respect of which Seller has entered into a Takeout Commitment.
(cc) Subordinated Debt. Administrative Agent with true Subordinated Debt. If Seller has any Subordinated Debt, Seller has provided the and complete copies of all documents evidencing such
SECTION 12. | COVENANTS |
On and as of the date of this Agreement and each Purchase Date and at all times until this Agreement is no longer in force, Seller covenants as follows:
(a) | Preservation of Existence; Compliance with Law. Seller shall: |
(i) Preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business;
(ii) Comply with the requirements of all applicable Requirements of Law, whether now in effect or hereafter enacted or promulgated by any applicable Governmental Authority (including, without limitation, all environmental laws);
(iii) Maintain all licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Facility Documents, and conduct its business in accordance with applicable Requirements of Law;
(iv) Keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied; and
(v) Permit representatives of the Buyers, upon reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case, no prior notice shall be required), during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by the Administrative Agent, subject to the provisions set forth in Section 17 hereof.
(b) Taxes. Seller shall timely file all tax returns that are required to be filed by it and shall timely pay all Taxes due, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted with respect to which it has established adequate reserves.
(c) Notice of Proceedings or Adverse Change. Seller shall give notice to the Administrative Agent of any of the following within the specified time:
(i) Immediately after a Responsible Officer of Seller has any knowledge of the occurrence of any Default or Event of Default;
(ii) As soon as reasonably possible but in no event later than [***] after a Responsible Officer of Seller has any knowledge of:
(A) any (x) default or event of default under any Indebtedness in excess of [***] of Seller, (y) litigation, investigation, regulatory action or proceeding that is pending or, to the knowledge of Seller, threatened by or against Seller in any federal or state court or before any Governmental Authority which would be reasonably likely to be adversely determined and if adversely determined, would reasonably be expected to have a Material Adverse Effect or constitute a Default or Event of Default, or (z) Material Adverse Effect with respect to any Seller;
(B) any litigation or proceeding that is pending or, to the knowledge of Seller, threatened (x) against Seller in which the amount involved exceeds the Litigation Threshold, in which injunctive or similar relief is sought, or which would be reasonably likely to be adversely determined and if adversely determined, would reasonably be expected to have a Material Adverse Effect, and (y) in connection with any of the Repurchase Assets, which, would be reasonably likely to be adversely determined and if adversely determined, would reasonably be expected to have a Material Adverse Effect; or
(C) any Lien or security interest (other than security interests created hereby or under any other Facility Document) on, or claim asserted against, any of the Repurchase Assets;
(iii) | As soon as reasonably possible, notice of any of the following events: |
(A) a material, adverse change in the insurance coverage of Seller, with a copy of evidence of same attached, other than changes in conformity with the requirements of FNMA related thereto;
(B) any material change in accounting policies or financial reporting practices of Seller;
(C) the termination or nonrenewal of any debt facilities of Seller which have a maximum principal amount (or equivalent) available of more than the Facility Termination Threshold;
(D) any Change in Control;
(E) any other event, circumstance or condition that has resulted in, or would reasonably be expected to result in, a Material Adverse Effect; or
(F) any Purchased Mortgage Loan has become a Defective Mortgage Loan, including that any applicable representations and warranties set forth on Schedule 1 hereto ceases to be true, correct, and complete (and providing all applicable details thereof);
(iv) Promptly, but no later than [***] after Seller receives any of the same, deliver to the Administrative Agent a true, complete, and correct copy of any schedule, report, notice, or any other document delivered to Seller by any Person pursuant to, or in connection with, any of the Repurchase Assets that would reasonably be expected to have a Material Adverse Effect on the specified Repurchase Asset or Repurchase Assets; and
(v) Promptly, but no later than [***] after Seller receives notice of the same, (A) any Mortgage Loan submitted for inclusion into an Agency security and rejected by that Agency for inclusion in such Agency security or (B) any Mortgage Loan submitted to a Takeout Investor (whole loan or securitization) and rejected for purchase by such Takeout Investor.
(d) Financial Reporting. Seller shall furnish or cause to be furnished to the Administrative Agent and Buyers, in each case, to the extent not publicly filed and available without cost to the Buyers in the time frame provided:
(i) Within ninety (90) days after the end of its respective fiscal year, audited financial statements, including statements of income and retained earnings and a balance sheet with all related notes, all in reasonable detail and prepared in conformity with GAAP, applied on a basis consistent with that of the preceding year; all examined by an Approved CPA, showing its respective financial condition at the close of each year and the results of its operations during the year. Any qualification as to scope or going concern exception to the opinion by the accountant shall render the acceptability of the financial statements subject to the Administrative Agent approval;
(ii) Within forty-five (45) days after the end of each fiscal month, financial statements for such month, including statements of income and retained earnings and a balance sheet with all related notes, all in reasonable detail and prepared in conformity with GAAP applied on a basis consistent with that of the preceding year showing the financial condition of Seller at the close of each month and the results of operations of Seller during such month;
(iii) Simultaneously with the furnishing of each of the Financial Statements to be delivered pursuant to subsections (i) and (ii) above, (x) a certificate in the form of Exhibit A to the Pricing Letter and certified by an executive officer of the Financial Reporting Party, and (y) when the end of the subject reporting period coincides with the end of a fiscal quarter, a Servicing Rights Appraisal. All Servicing Rights Appraisals shall be delivered to the Administrative Agent no later than thirty (30) days after the applicable “as of” date therefor. The Administrative Agent reserves the right to require at any time that Seller obtain and deliver current Servicing Rights Appraisals during the pendency of an Event of Default; and
(iv) Promptly, from time to time, such other information regarding the business affairs, operations and financial condition of Seller as any Buyer may reasonably request.
(e) Visitation and Inspection Rights. Seller shall permit the Buyers to inspect and take all other actions permitted under Section 17 hereof.
(f) Reimbursement of Expenses. Seller shall promptly reimburse the Administrative Agent and the Buyers for all reasonable and documented expenses as the same are incurred by the Administrative Agent or any Buyer as required by Sections 15(b) and 17 hereof.
(g) Further Assurances. Seller shall execute and deliver to the Administrative Agent all further documents, financing statements, agreements and instruments, and take all further actions that may be required under applicable Requirements of Law, or that the Administrative Agent may reasonably request, in order to effectuate the transactions contemplated by this Agreement and the Facility Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created hereby. Seller shall do all things necessary to preserve the Repurchase Assets so that they remain subject to a first priority perfected security interest hereunder. Without limiting the foregoing, Seller will comply with all applicable Requirements of Law. Seller will not allow any default for which Seller is responsible to occur under any Repurchase Assets or any Facility Document and Seller shall perform or cause to be performed when due all of its obligations under any Repurchase Assets or the Facility Documents; provided that with respect to the Warehouse Customer Guide, Seller shall have a commercially reasonable amount of time to implement any change resulting from amendments or modifications to the Warehouse Customer Guide unless such amendment or modification is required by a Governmental Authority and such Governmental Authority mandates immediate implementation.
(h) True and Correct Information. All information, reports, exhibits, schedules, Financial Statements or certificates of Seller or any of its Affiliates or any of their respective officers furnished to the Administrative Agent hereunder and during the Administrative Agent’s diligence of Seller will be, as of the date provided, true and correct in all material respects and will not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required Financial Statements, information and reports delivered by or on behalf of Seller to the Buyers pursuant to this Agreement shall be prepared in accordance with GAAP, as applicable.
(i) | ERISA Events. |
(i) Promptly upon becoming aware of the occurrence of any Event of ERISA Termination which together with all other Events of ERISA Termination occurring within the prior 12 months involve a payment of money by or a potential aggregate liability of Seller or any ERISA Affiliate thereof or any combination of such entities in excess of the ERISA Liability Threshold, Seller shall give the Administrative Agent a written notice specifying the nature thereof, what action Seller or any ERISA Affiliate thereof has taken and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto;
(ii) Promptly upon receipt thereof, Seller shall furnish to the Administrative Agent copies of (i) all notices received by Seller or any ERISA Affiliate thereof of the PBGC’s intent to terminate any Plan or to have a trustee appointed to administer any Plan; (ii) all notices received by Seller or any ERISA Affiliate thereof from the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA involving withdrawal liability in excess of the ERISA Liability Threshold; and (iii) all funding waiver requests filed by Seller or any ERISA Affiliate thereof with the Internal Revenue Service with respect to any Plan, the accrued benefits of which exceed the present value of the plan assets as of the date the waiver request is filed, and all communications received by Seller or any ERISA Affiliate thereof from the Internal Revenue Service with respect to any such funding waiver request.
(j) Financial Condition Covenants. Seller shall comply with the Financial Condition Covenants.
(k) Hedging. Seller shall at all times maintain, implement, and adhere to a formal hedging policy and program, reasonably acceptable to the Administrative Agent, using appropriate Hedge Agreements, covering all of Seller’s Mortgage Loans, other than those subject to a Takeout Commitment. Seller shall hedge all of its Mortgage Loans in accordance with Seller’s hedging policies. Seller shall review its hedging policies periodically to confirm that they are being complied with in all material respects and are adequate to meet Seller’s business objectives. In the event Seller makes any material amendment or material modification to its hedging policies, Seller shall promptly notify the Administrative Agent of such amendment or modification, and within 30 days after such amendment or modification shall deliver to the Administrative Agent a complete copy of the amended or modified hedging policies. Additionally, the Administrative Agent may in its reasonable discretion request a current copy of its hedging policies at any time. By Thursday of each week, Seller shall furnish the Buyers with a hedging report as of the end of the immediately preceding week, to be in such form and to contain such information as shall be specified from time to time by the Administrative Agent, including, without limitation, Seller’s then locked pipeline, notional hedge positions, and historical pull-throughs.
(l) No Adverse Selection. Seller shall not select Eligible Mortgage Loans to be sold to the Buyers as Purchased Mortgage Loans using any type of adverse selection criteria which would adversely affect any Buyer’s interests.
(m) Servicer Approval. Seller shall not cause or permit the Purchased Mortgage Loans to be serviced by any servicer other than a servicer expressly approved in writing by the Administrative Agent, which approval shall be deemed granted by the Administrative Agent with
respect to Seller and any Subservicer identified on Schedule 5 to the Pricing Letter (subject to revocation of such approval as provided in this Agreement) with the execution of this Agreement.
(n) Insurance. Seller shall obtain and maintain insurance with responsible companies in such amounts and against such risks as are reasonably acceptable to the Administrative Agent, including, without limitation, errors and omissions coverage and fidelity coverage in amount, form and substance acceptable under Fannie Mae, Freddie Mac or Ginnie Mae guidelines, and furnish the Administrative Agent on request full information as to all such insurance, and to provide within five (5) days after request by the Administrative Agent, certificates or other documents evidencing the renewal of each such policy. Such insurance shall be underwritten by a company acceptable under Fannie Mae, Freddie Mac or Ginnie Mae guidelines, and must protect Seller against losses resulting from dishonest or fraudulent acts committed by Seller’s employees and agents, and against losses resulting from the negligence, errors or omissions of Seller’s employees and agents in the performance of Seller’s normal loan origination duties. The Administrative Agent, on behalf of the Buyers, shall be a named an additional named insured or a lender loss payee, as appropriate, under each such insurance policy.
(o) Books and Records. Seller shall, to the extent practicable, maintain and implement administrative and operating procedures in accordance with industry practices for similarly situated mortgage originators, and keep and maintain or obtain, as and when required, all documents, books, records and other information reasonably necessary or advisable for the collection of all Repurchase Assets in accordance with industry practices for similarly situated mortgage originators.
(p) Illegal Activities. Seller shall not engage in any conduct or activity that could subject its assets to forfeiture or seizure.
(q) Material Change in Business. Seller shall not make any material change in the nature of its business as carried on at the date hereof.
(r) Limitation on Dividends and Distributions. Seller shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Seller or for the payment of Subordinated Debt, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Seller, either directly or indirectly, whether in cash or property or in obligations of Seller or any of Seller’s consolidated Subsidiaries at any time (i) following the occurrence and during the continuation of an Event of Default, (ii) in violation of any applicable Subordination Agreement, or (iii) if, on a pro forma basis giving effect thereto, an Event of Default would then exist or result therefrom, including but not limited to any Default or Event of Default arising out of a violation of a covenant which results from such distribution or dividend.
(s) Disposition of Assets; Liens. Seller shall not create, incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other encumbrance of any nature whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than the Liens created in connection with the transactions contemplated by this Agreement; nor shall Seller cause any of the Purchased Mortgage Loans to be sold, pledged, assigned or transferred (which
prohibition shall not, however, prevent Seller from arranging for Takeout Commitments or purchases pursuant thereto).
(t) Transactions with Affiliates. Seller shall not enter into any transaction, including, without limitation, the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any Affiliate (other than service agreements with a wholly-owned Subsidiary) unless such transaction is (i) not otherwise prohibited in this Agreement, (ii) in the ordinary course of Seller’s business, and (iii) upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.
(u) | ERISA Matters. |
(i) Seller shall not permit any event or condition which is described in the definition of “Event of ERISA Termination” to occur or exist with respect to any Plan or Multiemployer Plan if such event or condition, together with all other events or conditions described in the definition of Event of ERISA Termination occurring within the prior 12 months, involves the payment of money by or an incurrence of liability of Seller or any ERISA Affiliate thereof, or any combination of such entities in an amount in excess of the ERISA Liability Threshold.
(ii) Seller shall not be an employee benefit plan as defined in Section 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 and Seller shall not use “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, to engage in this Agreement or the Transactions hereunder and transactions by or with Seller are not subject to any state or local statute regulating investments of, or fiduciary obligations with respect to any governmental plans within the meaning of Section 3(32) of ERISA.
(v) Consolidations, Mergers and Sales of Assets. Without the prior written consent of the Administrative Agent, Seller shall not (i) consolidate or merge with or into any other Person unless Seller is the surviving and controlling entity, or (ii) sell, lease or otherwise transfer all or substantially all of its assets to any other Person, other than the sale of Mortgage Loans and related Servicing Rights in the ordinary course of business or in connection with an asset-based financing or other secondary market transaction related to the Seller’s assets (excluding the Repurchase Assets) in the ordinary course of Seller’s business. Seller shall not (i) cause or permit any change to be made in its name, organizational identification number, identity or corporate structure, each as described in Section 11(h), or (ii) change its jurisdiction of organization, unless it shall have provided the Administrative Agent thirty (30) days’ prior written notice of such change and shall have first taken all action required by the Administrative Agent for the purpose of perfecting or protecting the lien and security interest of the Administrative Agent established hereunder.
(w) Mortgage Loan Reports. On the Reporting Date, Seller will furnish to the Administrative Agent monthly electronic Mortgage Loan performance data, including, without limitation, a Mortgage Loan Schedule, delinquency reports, pool analytic reports and static pool reports (i.e., delinquency, foreclosure and net charge off reports) and monthly stratification reports summarizing the characteristics of the Mortgage Loans.
(x) Underwriting Guidelines. Without the prior written notice to the Administrative Agent, Seller shall not deviate in any material respect from the Underwriting Guidelines, as in effect from time to time, in connection with its origination of Purchased Mortgage Loans. Seller shall provide the Administrative Agent prompt written notice of any material changes to Seller’s then Underwriting Guidelines, including therewith a complete copy of Seller’s updated Underwriting Guidelines and a summary of the changes from the then most recent Underwriting Guidelines.
(y) No Amendment or Compromise. Without the Administrative Agent’s prior written consent Seller or those acting on behalf of Seller shall not amend or modify, or waive any term or condition of, or settle or compromise any claim in respect of, any item of the Purchased Mortgage Loans, provided that a Purchased Mortgage Loan may be amended or modified if such amendment or modification does not affect the amount or timing of any payment of principal or interest, extend its scheduled maturity date, modify its interest rate, or constitute a cancellation or discharge of its outstanding principal balance and does not materially and adversely affect the security afforded the Mortgaged Property securing the Mortgage Loan.
(z) Agency Approvals. Seller shall maintain its status and approvals as set forth in Section 11(x), in each case in good standing (each such approval, an “Approval”). Should Seller, for any reason, cease to possess all such applicable Approvals to the extent necessary, Seller shall so notify the Administrative Agent immediately in writing. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of its applicable Approvals at all times during the term of this Agreement and each outstanding Transaction.
(aa) Sharing of Information. Seller hereby allows and consents to each of the Administrative Agent and the Buyers exchanging information related to Seller, its credit and the Transactions hereunder with Seller’s other third party lenders or facility providers and Seller shall permit, and hereby authorizes, each such third party lender or facility provider to share such information with the Administrative Agent and the Buyers.
(bb) Indebtedness. Seller shall provide the Administrative Agent notice of any new credit facility, Warehouse Facility, servicing rights financing facility or similar facility (however structured) under which the maximum outstanding amount constituting Indebtedness may exceed [***]. Without the prior written consent of the Administrative Agent, as directed by the Required Buyers, Seller shall not create, incur, assume or suffer to exist, or otherwise become or be liable in respect to any Indebtedness, other than Indebtedness under a Warehouse Facility or the Existing Indebtedness.
SECTION 13. | EVENTS OF DEFAULT |
If any of the following events (each an “Event of Default”) occur, the Administrative Agent, at the direction of the Required Buyers, shall have the rights set forth in Section 14, as applicable:
(a) Payment Default. Seller shall default in the payment of (A) any Repurchase Price or Price Differential payable by it hereunder or under any other Facility Document, including, without limitation, the failure to satisfy any Margin Call by the applicable Margin Deadline,
(B) Expenses (and such failure to pay Expenses shall continue for more than [***] or (C) any other Obligations, when the same shall become due and payable, whether at the due date thereof, or by acceleration or otherwise (and such failure shall continue for more than [***] or
(b) Representation and Warranty Breach. Any representation, warranty or certification made or deemed made herein or in any other Facility Document by Seller or any certificate furnished to the Administrative Agent pursuant to the provisions hereof or thereof or any information with respect to the Purchased Mortgage Loans furnished in writing by or on behalf of Seller shall prove to have been untrue or misleading in any material respect as of the time made or furnished; provided, however, that with respect to a Purchased Mortgage Loan, unless such breach is knowing and intentional, a breach of the representation or warranty set forth in Section 11(g)(i) or a breach of the covenant set forth in Section 12(h) shall result in the subject Mortgage Loan being a Defective Mortgage Loan and shall not in and of itself constitute an Event of Default; or
(c) Immediate Covenant Default. The failure of Seller to perform, comply with or observe any term, covenant or agreement applicable to Seller contained in any of: Sections 12(a)(Preservation of Existence; Compliance with Law); (h)(True and Correct Information) (subject to Section 13(b) above); 12(j)(Financial Condition Covenants); 12(l)(No Adverse Selection); 12(p)(Illegal Activities); 12(q)(Material Change in Business); 12(r)(Limitation on Dividends and Distributions); 12(s)(Disposition of Assets; Liens); 12(v)(Consolidations, Mergers and Sales of Assets); or 12(z)(Agency Approvals; Servicing); or
(d) Additional Covenant Defaults. Seller shall fail to observe or perform any other covenant or agreement contained in this Agreement (and not identified in clause (c) of Section 13), and if such default shall be capable of being remedied, such failure to observe or perform shall continue unremedied for a period of [***] or
(e) Judgments. A judgment or judgments for the payment of money in excess of the Litigation Threshold in the aggregate shall be rendered against Seller by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] after the date of entry thereof, and Seller 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; or
(f) Cross Default. Any “event of default” or any other default which permits a demand for, or requires, the early repayment of obligations due by Seller or Seller’s Affiliates under any agreement (after the expiration of any applicable grace period under any such agreement) relating to any Indebtedness in the aggregate principal amount of [***] or more of Seller or any Affiliate, as applicable, or any default under any Obligation not described in Section 13(a) (after the expiration of any applicable grace period); or
(g) Insolvency Event. An Insolvency Event shall have occurred with respect to Seller or any Subsidiary of Seller; or
(h) Enforceability. For any reason, any Facility Document to which the Seller is a party at any time shall not be in full force and effect in all material respects or shall not be enforceable in all material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected and, except with respect to the Repurchase Assets identified in Section 8(a)(xv), of first priority, or any Person (other than the Buyers) shall contest the validity, enforceability, perfection or priority of any Lien granted pursuant thereto, or any party thereto (other than the Buyers) shall seek to disaffirm, terminate, limit or reduce its obligations thereunder; or
(i) Liens. (i) Seller shall grant, or suffer to exist, any Lien on any Repurchase Asset (except any Lien in favor of the Administrative Agent or the Buyers or any Lien permitted pursuant to Section 12(s)); or (ii) neither one of the following is true (A) the Repurchase Assets shall have been sold to Buyers, or (B) except with respect to the Repurchase Assets identified in Section 8(a)(xv), the Liens contemplated hereby are first priority perfected Liens on the Repurchase Assets in favor of the Administrative Agent as agent for the Buyers and are not Liens in favor of any Person other than the Administrative Agent; or
(j) Material Adverse Effect. The Administrative Agent, at the direction of the Required Buyers, shall have reasonably determined that a Material Adverse Effect has occurred; or
(k) ERISA. (i) Seller shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any failure to satisfy the minimum funding standards of Section 412 of the Code or Section 302 of ERISA, whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of Seller or any ERISA Affiliate, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, a Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Buyers, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) a Plan shall terminate for purposes of Title IV of ERISA, (v) Seller or any ERISA Affiliate shall, or in the reasonable opinion of the Administrative Agent, at the direction of the Required Buyers, is likely to, incur any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan, or (vi) ERISA Event of Termination shall occur or exist, and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or
(l) | Change in Control. A Change in Control shall have occurred; or |
(m) Going Concern. Any Financial Reporting Party’s audited Financial Statements or notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of such Financial Reporting Party as a “going concern” or reference of similar import; or
(n) | Reserved; or |
(o) Investigations. There shall occur the initiation of any investigation, audit, examination or review of Seller by an Agency or any Governmental Authority relating to the
origination, sale or servicing of Mortgage Loans by Seller or the Seller’s business operations, with the exception of normally scheduled audits or examinations by Seller’s regulators, any Agency or any Governmental Authority, if the Administrative Agent, at the direction of the Required Buyers, believes in its good faith commercially reasonable discretion that such investigation, audit, examination, or review is likely to result in a Material Adverse Effect.
SECTION 14. | REMEDIES |
(a) If an Event of Default occurs which is continuing, the following rights and remedies are available to the Administrative Agent, at the direction of the Required Buyers; provided, that an Event of Default shall be deemed to be continuing unless expressly waived by the Administrative Agent at the direction of the Required Buyers, in writing:
(i) The Administrative Agent may, or at the direction of the Required Buyers shall, upon written notice to Seller, declare the Repurchase Date for each Transaction hereunder to have occurred, if it has not already occurred. The Administrative Agent shall (except upon the occurrence of an Insolvency Event of Seller) give notice to Seller of the exercise of such option as promptly as practicable. The Repurchase Date for each Transaction shall occur immediately upon the occurrence of an Insolvency Event of Seller, without notice by the Administrative Agent or any Buyer.
(ii) If the Administrative Agent, at the direction of the Required Buyers, exercises the option referred to in subsection (a)(i) of this Section, or if an Insolvency Event of Seller shall have occurred,
(A) Seller’s obligations in such Transactions to repurchase all Purchased Mortgage Loans, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subsection (a)(i) of this Section, (1) shall thereupon become immediately due and payable and (2) all Income paid after such exercise or deemed exercise shall be retained by the Administrative Agent and applied to the aggregate unpaid Repurchase Price and any other amounts owed by Seller hereunder with any excess proceeds remitted to Seller or to such Person as may be designated by any Governmental Authority;
(B) to the extent permitted by applicable Requirements of Law, the Repurchase Price with respect to each such Transaction shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Repurchase Date as determined pursuant to subsection (a)(i) of this Section (decreased as of any day by (i) any amounts actually in the possession of the Administrative Agent pursuant to clause (C) of this subsection, and (ii) any proceeds from the sale of Purchased Mortgage Loans applied to the Repurchase Price pursuant to subsection (a)(iv) of this Section); and
(C) all Income actually received by the Administrative Agent pursuant to Section 5 shall be applied to the aggregate unpaid Obligations owed by Seller with any excess
proceeds remitted to Seller or to such Person as may be designated by any Governmental Authority.
(iii) Upon the occurrence of one or more Events of Default that are continuing, the Administrative Agent shall have the right to obtain physical possession of all Credit Files and Mortgage Files of Seller relating to the Purchased Mortgage Loans and the Repurchase Assets and all documents relating to the Purchased Mortgage Loans which are then or may thereafter come into the possession of Seller or any third party acting for Seller and Seller shall deliver to the Administrative Agent such assignments as the Administrative Agent shall request. The Administrative Agent shall be entitled to specific performance of all agreements of Seller contained in the Facility Documents.
(iv) At any time on the Business Day following notice to Seller (which notice may be the notice given under subsection (a)(i) of this Section), in the event Seller has not repurchased all Purchased Mortgage Loans, the Administrative Agent may (A) immediately sell, without demand or further notice of any kind, at a public or private sale and at such price or prices as the Administrative Agent, at the direction of the Required Buyers, may deem satisfactory any or all Purchased Mortgage Loans and the Repurchase Assets subject to a such Transactions hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by Seller hereunder or (B) at the direction of the Required Buyers, elect, in lieu of selling all or a portion of such Purchased Mortgage Loans, to give Seller credit for such Purchased Mortgage Loans and the Repurchase Assets in an amount equal to the Market Value of the Purchased Mortgage Loans against the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder. The proceeds of any disposition of Purchased Mortgage Loans and the Repurchase Assets shall be applied as determined by the Administrative Agent, at the direction of the Required Buyers.
(v) Seller shall be liable to the Administrative Agent and each Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel) incurred in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.
(vi) Whether or not the Buyers have exercised any one or more of its other rights and remedies, the Administrative Agent, at the direction of the Required Buyers may elect to increase the Pricing Rate to equal the Post-Default Rate.
(vii) The Administrative Agent and the Buyers shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable Requirements of Law.
(b) All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which the Administrative Agent and the Buyers may have.
(c) The Administrative Agent and the Buyers may enforce their rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require the Administrative Agent or the Buyers to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) Seller might otherwise have arising from the use of non-judicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Seller recognizes that non-judicial 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.
(d) To the extent permitted by applicable Requirements of Law, Seller shall be liable to the Buyers for interest on any amounts owing by Seller hereunder, from the date Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of the Administrative Agent’s rights hereunder. Interest on any sum payable by Seller to the Buyers under this paragraph 14(d) shall be at a rate equal to the Post-Default Rate.
(e) Without limiting the rights of the Administrative Agent or the Buyers to pursue all other legal and equitable rights available to the Administrative Agent or the Buyers for Seller’s failure to perform its obligations under this Agreement, Seller acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and the Administrative Agent and the Buyers shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit the Administrative Agent or the Buyers from pursuing any other remedies for such breach, including the recovery of monetary damages.
SECTION 15. | INDEMNIFICATION AND EXPENSES; RECOURSE |
(a) Seller agrees to hold the Administrative Agent, each Buyer, their Affiliates, and its and their respective officers, directors, employees, agents and advisors (each an “Indemnified Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, “Costs”), relating to or arising out of this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct. Without limiting the generality of the foregoing, Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Mortgage Loans relating to or arising out of any taxes incurred or assessed in connection with the ownership of the Mortgage Loans, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party in connection with any Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan, Seller will save, indemnify and hold harmless such Indemnified Party from and against all expense, loss or damage suffered
by reason of any defense, set off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller. Seller also agrees to reimburse an Indemnified Party promptly after being billed by such Indemnified Party for all the Indemnified Party’s costs and expenses incurred in connection with the enforcement or the preservation of any Indemnified Party’s rights under this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, including, without limitation, the reasonable fees and expenses of its counsel.
(b) Seller agrees to pay promptly after being billed by the Administrative Agent all of the reasonable and documented out-of-pocket costs and expenses incurred by the Administrative Agent and each Buyer in connection with any amendment, supplement or modification to this Agreement, any other Facility Document (other than the Warehouse Customer Guide) or any other documents prepared in connection herewith or therewith. Seller agrees to pay promptly after being billed by the Administrative Agent all of the reasonable and documented out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including, without limitation, filing fees and all the reasonable fees and expenses of counsel to the Administrative Agent and each Buyer, without duplication. Seller agrees to pay the Administrative Agent and each Buyer all the reasonable and documented out of pocket due diligence, inspection, testing and review costs and expenses incurred by the Administrative Agent and each Buyer with respect to Mortgage Loans submitted by Seller for purchase under this Agreement, including, but not limited to, those out of pocket costs and expenses incurred by the Administrative Agent and each Buyer pursuant to Sections 15(a) and 17 hereof, subject to the limitations set forth therein. For the avoidance of doubt, Seller shall not be responsible for any Expenses, including legal fees and expenses, due to conflicts or communications solely between Buyers, unless such conflicts occur after the declaration of an Event of Default and an acceleration of the Obligations owed under this Agreement.
(c) The obligations of Seller from time to time to pay the Repurchase Price (including all Price Differential) and all other amounts due under this Agreement shall be full recourse obligations of Seller.
(d) The obligations of Seller under this Section 15 hereof shall survive the termination of this Agreement.
SECTION 16. | SERVICING |
(a) As a condition of purchasing a Mortgage Loan, the Administrative Agent may require Seller to service such Mortgage Loan as agent for the Buyers for a term of thirty (30) days (the “Servicing Term”), which is renewable as provided in clause (d) below, on the following terms and conditions:
(b) Seller shall service and administer the Purchased Mortgage Loans on behalf of the Buyers in accordance with Accepted Servicing Practices, and in accordance with all applicable requirements of the Agencies, Requirements of Law, the provisions of any applicable servicing agreement, and the requirements of any applicable Takeout Commitment and the Takeout Investor,
so that the eligibility of the Purchased Mortgage Loan for purchase under such Takeout Commitment is not voided or reduced by such servicing and administration.
(c) If any Mortgage Loan that is proposed to be sold on a Purchase Date is serviced by a servicer other than Seller or any of its Affiliates (a “Subservicer”), or if the servicing of any such Mortgage Loan is to be transferred to a Subservicer, Seller shall provide a copy of the related servicing agreement and a Servicer Notice executed by such Subservicer (collectively, the “Servicing Agreement”) to the Administrative Agent prior to such Purchase Date or servicing transfer date, as applicable. Each such Servicing Agreement shall be in form and substance reasonably acceptable to the Administrative Agent. In addition, Seller shall have obtained the prior written consent of the Administrative Agent, on behalf of the Required Buyers, for such Subservicer to subservice the Purchased Mortgage Loans, which consent may be withheld in its sole discretion. In no event shall Seller’s use of a Subservicer relieve Seller of its obligations hereunder, and Seller shall remain liable under this Agreement as if Seller were servicing such Mortgage Loans directly.
(d) Seller shall deliver the physical and contractual master servicing of each Purchased Mortgage Loan, together with all of the related Records in its possession, to the Administrative Agent’s designee upon the earliest of (w) the occurrence of an Event of Default hereunder which is continuing, (x) the termination of Seller as servicer by the Administrative Agent, on behalf of the Required Buyers, pursuant to this Agreement, (y) the expiration (and non-renewal) of the Servicing Term, or (z) the transfer of servicing to any entity approved by the Administrative Agent, on behalf of the Required Buyers, and the assumption thereof by such entity. The Administrative Agent, on behalf of the Required Buyers, shall have the right to terminate Seller as master servicer (and any Subservicer as subservicer) of any of the Purchased Mortgage Loans, which right shall be exercisable at any time in the Administrative Agent’s sole discretion, upon written notice. In addition, Seller shall deliver the physical and contractual master servicing of each Purchased Mortgage Loan, together with all of the related Records in its possession to the Administrative Agent’s designee, upon expiration of the Servicing Term; provided that the Servicing Term and such delivery requirement will be deemed renewed for a like period on the last day of the Servicing Term, and on the last day of each such renewed Servicing Term, in the absence of directions to the contrary from the Administrative Agent; provided further that such delivery requirement will no longer apply to any Mortgage Loan, and Seller shall have no further obligation to service such Mortgage Loan as agent for the Buyers, upon receipt by the Administrative Agent of the Repurchase Price therefor. Seller’s transfer of the Records and the physical and contractual servicing under this Section shall be in accordance with customary standards in the industry and such transfer shall include the transfer of the gross amount of all escrows held for the related mortgagors (without reduction for unreimbursed advances or “negative escrows”).
(e) During the period Seller is servicing the Purchased Mortgage Loans as agent for the Buyers, Seller agrees that the Buyers are the owners of the related Credit Files and Records and Seller shall at all times maintain and safeguard and cause any Subservicer to maintain and safeguard the Credit File for the Purchased Mortgage Loan (including photocopies or images of the documents delivered to the Administrative Agent), and accurate and complete records of its servicing of the Mortgage Loan; Seller’s possession of the Credit Files and Servicing Records being for the sole purpose of master servicing such Mortgage Loans and such retention and possession by Seller being in a custodial capacity only. Seller hereby grants the Administrative
Agent, as agent for the Buyers, a security interest in all servicing fees to secure the obligations of Seller and any Subservicer to service in conformity with this Section and any related Servicing Agreement.
(f) At the Administrative Agent’s reasonable request, Seller shall promptly deliver to the Administrative Agent reports regarding the status of any Mortgage Loan being serviced by Seller, which reports shall include, but shall not be limited to, a description of any default thereunder for more than thirty (30) days or such other circumstances that are reasonably likely to cause a Material Adverse Effect on such Mortgage Loan, the Buyers’ title to such Mortgage Loan or the collateral securing such Mortgage Loan; Seller may be required to deliver such reports until the repurchase of the Mortgage Loan by Seller. Seller shall immediately notify the Administrative Agent if it becomes aware of any payment default that occurs under the Mortgage Loan or any default under any Servicing Agreement that would materially and adversely affect any Mortgage Loan subject thereto.
(g) Seller shall release its custody of the contents of any Credit File or Mortgage File only (i) in accordance with the written instructions of the Administrative Agent, (ii) upon the consent of the Administrative Agent when such release is required as incidental to Seller’s servicing of the Mortgage Loan, is required to complete the Takeout Commitment or comply with the Takeout Commitment requirements, or (iii) as required by Requirements of Law.
(h) The Administrative Agent, at the direction of the Required Buyers reserves the right to appoint a successor servicer at any time to service any Purchased Mortgage Loan (each a “Successor Servicer”) . If the Administrative Agent elects to make such an appointment due to an Event of Default that is continuing, Seller shall be assessed all costs and expenses incurred by the Buyers associated with transferring the Purchased Mortgage Loans to the Successor Servicer. In the event of such an appointment, Seller shall perform all acts and take all action so that any part of the Credit File and related Records held by Seller, together with all Income and other receipts relating to such Purchased Mortgage Loan, are promptly delivered to Successor Servicer, and shall otherwise reasonably cooperate with the Administrative Agent in effectuating such transfer. Seller shall have no claim for lost servicing income, lost profits or other damages if the Administrative Agent appoints a Successor Servicer hereunder and the servicing fee is reduced or eliminated.
(i) For the avoidance of doubt, Seller retains no economic rights to the servicing of the Purchased Mortgage Loans provided that Seller shall continue to service the Purchased Mortgage Loans hereunder as part of its Obligations hereunder. As such, Seller expressly acknowledges that the Purchased Mortgage Loans are sold to the Buyers on a “servicing released” basis. Upon Seller’s repurchase of any Purchased Mortgage Loan pursuant hereto, the transfer of such Mortgage Loan back to Seller shall likewise be on a “servicing released” basis.
SECTION 17. | DUE DILIGENCE |
Seller acknowledges that each Buyer or any third party designated by a Buyer (including a Buyer’s regulators) has the right to perform continuing due diligence reviews with respect to the Mortgage Loans and Seller, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable prior notice unless an Event of Default shall have occurred and be continuing, in
which case no notice is required, to Seller, each Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession or under the control of Seller or Custodian. Seller also shall make available to each Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that the Buyers may purchase Mortgage Loans from Seller based solely upon the information provided by Seller to the Administrative Agent in the Mortgage Loan Schedule and the representations, warranties and covenants contained herein, and that each Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans purchased in a Transaction, including, without limitation, ordering broker’s price opinions, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re generating the information used to originate such Mortgage Loan. Each Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with the Buyers and any third party underwriter in connection with such underwriting, including, but not limited to, providing each Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller or Custodian. Seller further agrees that Seller shall pay all reasonable and documented out-of-pocket costs and expenses incurred by a Buyer or the Custodian in connection with activities pursuant to this Section 17 subject to a cap with respect to the Buyers of $5,000 each for any twelve (12) month period (“Due Diligence Costs”); provided that the Due Diligence Cap shall not apply at any time that a Default shall have occurred and be continuing.
SECTION 18. | SUCCESSORS AND ASSIGNS |
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Seller may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Buyer (and any other attempted assignment or transfer by any party hereto shall be null and void), and no Buyer may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Buyers) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Buyers. Any Buyer may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of Transactions at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) | Minimum Amounts. |
(A) in the case of an assignment of the entire amount of the Buyer’s Facility Sum of the assigning Buyer and the Transactions at the time outstanding, or contemporaneous assignments by a Buyer and related Approved Funds (determined after giving effect to such assignments) of their Buyer’s Facility Sums in an amount not less than the amount specified in paragraph (b)(i)(B) of this Section in the aggregate, or in the case of an assignment to another Buyer, an Affiliate of a Buyer or an Approved Fund, no minimum amount need be assigned;
(B) in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Buyer’s Facility Sum and the Transactions at the time outstanding (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent or, if a “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than [***], unless, so long as no Default or Event of Default has occurred and is continuing, the Seller otherwise consents (such consent not to be unreasonably withheld or delayed); and
(C) such assignment is consented to by the Administrative Agent, such consent not to be unreasonably withheld or delayed.
(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Buyer’s rights and obligations under this Agreement with respect to all Transactions.
(iii) Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) and (C) of this Section.
(iv) Assignment and Acceptance. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of [***]; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Buyer, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons. No such assignment shall be made to the Seller or any of the Seller’s Affiliates, Subsidiaries or Related Parties.
(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person).
Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Buyer under this Agreement, and the assigning Buyer thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Buyer’s rights and obligations
under this Agreement, such Buyer shall cease to be a party hereto) but shall continue to be entitled to the benefits of Section 6 and Section 15 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Buyer of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Buyer of a participation in such rights and obligations in accordance with paragraph (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Seller, shall maintain at one of its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Buyers, and the pro rata of, and amounts of the Transactions owing to, each Buyer pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Seller, the Administrative Agent and the Buyers 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. The Register shall be available for inspection by the Seller and any Buyer, at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Buyer may at any time, without the consent of, or notice to, the Seller or the Administrative Agent, sell participations to any Person (other than a natural person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person, or the Seller or any of the Seller’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Buyer’s rights and/or obligations under this Agreement (including all or a portion of the Transactions owing to it); provided that (i) such Buyer’s obligations under this Agreement shall remain unchanged, (ii) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Seller, the Administrative Agent and Buyers shall continue to deal solely and directly with such Buyer in connection with such Buyer’s rights and obligations under this Agreement. For the avoidance of doubt, each Buyer shall be responsible for the indemnity under Section 15 with respect to any payments made by such Buyer to its Participant(s).
Any agreement or instrument pursuant to which a Buyer sells such a participation shall provide that such Buyer shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Buyer will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 35(e) that affects such Participant. The Seller agrees that each Participant shall be entitled to the benefits of Sections 6 and 7 (subject to the requirements and limitations therein) to the same extent as if it were a Buyer and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant shall not be entitled to receive any greater payment under Section 6 or 7, with respect to any participation, than its participating Buyer would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a change in Requirements of Law that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 22 as though it were a Buyer; provided that such Participant agrees to be subject to Section 19(k) as though it were a Buyer. Each Buyer that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Seller, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Facility Documents (the “Participant Register”); provided that no 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 or its other obligations under any Facility Document) 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. The entries in the Participant Register shall be conclusive absent manifest error, and such 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. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(e) Certain Pledges. Any Buyer may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Buyer, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Buyer from any of its obligations hereunder or substitute any such pledgee or assignee for such Buyer as a party hereto.
SECTION 19. | AGENCY |
(a) | Appointment and Authority. |
(i) Each of the Buyers hereby irrevocably appoints TIAA BANK to act on its behalf as the Administrative Agent hereunder and under the other Facility Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent and the Buyers, and the Seller shall not have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Facility Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Requirement of Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
(ii) In its capacity as Administrative Agent until all Purchased Mortgage Loans have all been repurchased by the Seller, all other Obligations have been satisfied and the Buyers have no further Commitments or other obligations under this Agreement and the other Facility Documents, the Administrative Agent shall:
(A) hold the Facility Documents and (by the Custodian’s holding the Purchased Mortgage Loans as bailee for the Administrative Agent) the Purchased Mortgage Loans for the benefit of each Buyer, and each Buyer (including TIAA BANK) shall be deemed to have an interest in the Facility Documents on any day in proportion to its pro rata undivided ownership interest in the Purchased Mortgage Loans on that day;
(B) send timely bills to the Seller for sums due and receive all sums on account of the Purchased Mortgage Loans or with respect to them;
(C) use reasonable diligence to obtain from the Seller and promptly remit to each Buyer such Buyer’s pro rata share of Repurchase Prices for Purchased Mortgage Loans and other sums received by the Administrative Agent on account of the Purchased Mortgage Loans or with respect to them, in accordance with this Agreement, less any applicable Administrative Agent Fee;
(D) use reasonable diligence to recover from the Seller all expenses incurred that are reimbursable by the Seller, and promptly remit to each Buyer its pro rata share (if any) thereof;
(E) hold the Purchased Mortgage Loans and all security interests established hereby ratably for itself as Administrative Agent and representative of the Buyers; and
(F) request from the Seller, and promptly forward to the Buyers, such information as any of the Buyers may reasonably request Administrative Agent to obtain from the Seller, consistent with the terms of this Agreement.
Notwithstanding the foregoing, the Administrative Agent shall coordinate the actions of Buyers, as applicable.
(b) Rights as a Buyer. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Buyer as any other Buyer and may exercise the same as though it were not the Administrative Agent, and the term “Buyer” or “Buyers” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Seller or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Buyers.
(c) | Exculpatory Provisions. |
(i) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Facility Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
(A) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(B) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Facility Documents that the Administrative Agent is required to exercise as directed in writing by the Required Buyers (or such other number or percentage of the Buyers as shall be expressly provided for herein or in the other Facility Documents); provided that the Administrative
Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Facility Document or Requirement of Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under the Bankruptcy Code or any other debtor relief law; and
(C) shall not, except as expressly set forth herein and in the other Facility Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Seller or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
(ii) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Buyers (or such other number or percentage of the Buyers as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 13 and 35(e)), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Seller or a Buyer.
(iii) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Facility Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Facility Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Section 3 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
(d) Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the entry into a Transaction that by its terms must be fulfilled to the satisfaction of a Buyer, the Administrative Agent may presume that such condition is satisfactory to such Buyer unless the Administrative Agent shall have received notice to the contrary from such Buyer prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Seller), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
(e) Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Facility Document by or
through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the Loan Facility as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub agents.
(f) | Resignation of Administrative Agent. |
(i) The Administrative Agent may at any time give notice of its resignation to the Buyers and the Seller. Upon receipt of any such notice of resignation, the Required Buyers shall have the right, in consultation with the Seller, to appoint a successor. If no such successor shall have been so appointed by the Required Buyers and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Buyers) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Buyers, appoint a successor Administrative Agent. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.
(ii) With effect from the Resignation Effective Date (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Facility Documents and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Buyer directly, until such time, if any, as the Required Buyers appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Facility Documents. The fees payable by the Seller to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Seller and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Facility Documents, the provisions of this Article and Section 15 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.
(g) Non-Reliance on Agents and Other Buyers. Each Buyer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Buyer or any of their Related Parties and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each Buyer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Buyer or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Facility Document or any related agreement or any document furnished hereunder or thereunder.
(h) No Other Duties. Anything herein to the contrary notwithstanding, no arrangers or any other titles listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Facility Documents, except in its capacity, as applicable, as the Administrative Agent or a Buyer hereunder.
(i) Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under the Bankruptcy Code or any other judicial proceeding relative to the Seller, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Seller) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Transactions and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Buyers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Buyers and the Administrative Agent and their respective agents and counsel and all other amounts due the Buyers and the Administrative Agent under Section 15) allowed in such judicial proceeding; and
(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Buyer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Buyers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 15.
(j) | Certain ERISA Matters. |
(i) Each Buyer (x) represents and warrants, as of the date such Person became a Buyer party hereto, to, and (y) covenants, from the date such Person became a Buyer party hereto to the date such Person ceases being a Buyer party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Seller, that at least one of the following is and will be true:
(A) such Buyer is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Buyer’s
entrance into, participation in, administration of and performance of the Transactions or this Agreement,
(B) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Buyer’s entrance into, participation in, administration of and performance of the Transactions and this Agreement,
(C) (A) such Buyer is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Buyer to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Buyer, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Buyer’s entrance into, participation in, administration of and performance of the Transactions and this Agreement, or
(D) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Buyer.
In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Buyer or (2) a Buyer has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Buyer further (x) represents and warrants, as of the date such Person became a Buyer party hereto, to, and (y) covenants, from the date such Person became a Buyer party hereto to the date such Person ceases being a Buyer party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Seller, that the Administrative Agent is not a fiduciary with respect to the assets of such Buyer involved in such Buyer’s entrance into, participation in, administration of and performance of the Transactions and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Facility Document or any documents related hereto or thereto).
(k) Sharing of Payments. If any Buyer shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any Transaction or other obligations hereunder resulting in such Buyer receiving payment of a proportion of the aggregate amount of any Transaction or other such obligations greater than its pro rata share thereof as provided herein, then the Buyer receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Transactions and such other obligations of the other Buyers, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Buyers ratably in accordance with the aggregate amount of the Transactions and other amounts owing them; provided that:
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to (x) any payment made by the Seller pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Buyer as consideration for the assignment of or sale of a participation in any Transaction to any assignee or participant, other than to the Seller or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).
(l) Enforcement. Notwithstanding anything to the contrary contained herein or in any other Facility Document, the authority to enforce rights and remedies hereunder and under the other Facility Documents against the Seller shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 13 for the benefit of all the Buyers; provided that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Facility Documents, (ii) any Buyer from exercising setoff rights in accordance with Section 22 (subject to the terms of Section 19(k)) or (iii) any Buyer from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Seller under any Insolvency Event; provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Facility Documents, then (x) the Required Buyers shall have the rights otherwise provided to the Administrative Agent pursuant to Section 13 and (y) in addition to the matters set forth in clauses (ii) and (iii) of the preceding proviso and subject to Section 19(k), any Buyer may, with the consent of the Required Buyers, enforce any rights or remedies available to it and as authorized by the Required Buyers.
(m) Administrative Agent’s Discretionary Actions. Subject to the limitations of Section 35(e), in its capacity as Administrative Agent and without seeking or obtaining the consent of any of the other Buyers (although it may elect to obtain such consent before acting it if deems that desirable), the Administrative Agent may:
(i) agree or consent to any change in the aggregate not involving more than [***] of the Purchased Mortgage Loans at any time in the handling of the Purchased Mortgage Loans and which in the Administrative Agent’s reasonable judgment is unlikely to have a material adverse effect on any of the Central Elements in respect of the Seller or any of its Subsidiaries;
(ii) reconvey, exchange or otherwise change, in whole or in part, any Purchased Mortgage Loans which are required to be reconveyed, exchanged or changed in accordance with the Facility Documents;
(iii) | exercise any options or approval rights expressly provided in this Agreement; and |
(iv) do or perform any act or thing which, in the Administrative Agent’s reasonable judgment, is necessary or appropriate to enable the Administrative Agent to properly discharge and perform its duties under this Agreement or the Custody Agreement, or which in its reasonable judgment is necessary or appropriate to preserve or protect the validity, integrity or enforceability of the Purchased Mortgage Loans and/or the Facility Documents, the Buyers’ pro rata undivided ownership interests in and to the Purchased Mortgage Loans, the Lien created by this Agreement and its priority, or any of the Central Elements in respect of the Seller or any of its Subsidiaries, or to preserve and protect the interest of the Buyers in any of the foregoing..
SECTION 20. | HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOANS |
Title to all Purchased Mortgage Loans and Repurchase Assets shall pass to the Buyers, and the Buyers shall have free and unrestricted use of all Purchased Mortgage Loans. Nothing in this Agreement shall preclude the Buyers from engaging in repurchase transactions with the Purchased Mortgage Loans or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Mortgage Loans to any Person, including without limitation, the Federal Home Loan Bank. Nothing contained in this Agreement shall obligate the Administrative Agent to segregate any Purchased Mortgage Loans delivered to the Administrative Agent by Seller.
SECTION 21. | TAX AND ACCOUNTING TREATMENT |
Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes, and for accounting purposes, to treat each Transaction as indebtedness of Seller that is secured by the Purchased Mortgage Loans and that the Purchased Mortgage Loans are owned by Seller in the absence of a Default by Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by applicable Requirements of Law or GAAP.
SECTION 22. | SET-OFF |
In addition to any rights and remedies of the Administrative Agent and the Buyers hereunder and by law, each Buyer shall have the right during such times as an Event of Default has occurred and is continuing, without prior notice to Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law, to set-off and appropriate and apply against any Obligation from Seller, or any Affiliate thereof to such Buyer or any of its Affiliates any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims or cash, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from such Buyer or any Affiliate thereof to or for the credit or the account of Seller or any Affiliate thereof. Each Buyer agrees promptly to notify the Administrative Agent and the Seller after any such set off and application made by such Buyer; provided that the failure to give such notice shall not affect the validity of such set off and application.
SECTION 23. | TERMINABILITY |
Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and neither the Administrative Agent nor any Buyer shall be deemed to have waived any Default or Event of Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that such Person may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made. Notwithstanding any such termination or the occurrence of an Event of Default, all of the representations and warranties and covenants hereunder shall continue and survive.
SECTION 24. | NOTICES AND OTHER COMMUNICATIONS |
Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by electronic transmission) delivered to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person. Except as otherwise provided in this Agreement and except for notices given under Section 3 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given (a) when transmitted during business hours at the recipient’s place of business by email (if an email address for such purpose is provided for such Person), (b) when delivered, if delivered by hand (including by courier or overnight delivery service), or (c) in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. For the avoidance of doubt, unless specified otherwise herein, any notice required to be made by Seller is deemed effective upon delivery of such notice to the Administrative Agent.
SECTION 25. | USE OF THE WAREHOUSE ELECTRONIC SYSTEM AND OTHER ELECTRONIC MEDIA |
Seller acknowledges and agrees that the Administrative Agent and the Buyers may require or permit certain transactions be conducted electronically using Electronic Records and/or Electronic Signatures. Seller consents to the use of Electronic Records and/or Electronic Signatures whenever expressly required or permitted by the Administrative Agent and acknowledges and agrees that Seller shall be bound by its Electronic Signature and by the terms, conditions, requirements, information and/or instructions contained in any such Electronic Records.
Seller agrees to adopt as its Electronic Signature its user identification codes, passwords, personal identification numbers, access codes, a facsimile image of a written signature and/or other symbols or processes as provided or required by the Administrative Agent from time
to time (as a group, any subgroup thereof or individually, hereinafter referred to as Seller’s Electronic Signature). Seller acknowledges that the Administrative Agent and the Buyers will rely on any and all Electronic Records and on Seller’s Electronic Signature transmitted or submitted by Seller.
Neither the Administrative Agent nor any Buyer shall be liable for the failure of either its or Seller’s internet service provider, or any other telecommunications company, telephone company, satellite company or cable company to timely, properly and accurately transmit any Electronic Record or fax copy.
Before engaging in Electronic Transactions with Seller, the Administrative Agent may provide Seller, or require Seller to create, user identification codes, passwords, personal identification numbers and/or access codes, as applicable, to permit access to the Administrative Agent’s computer information processing system. Each Person permitted access to the Warehouse Electronic System must have a separate identification code and password. Seller shall be fully responsible for protecting and safeguarding any and all user identification codes, passwords, personal identification numbers and access codes provided or required by the Administrative Agent. Seller shall adopt and maintain security measures to prevent the loss, theft or unauthorized or improper disclosure or use of any and all user identification codes, passwords, personal identification numbers and/or access codes by Persons other than the individual Person who is authorized to use such information. Seller shall notify the Administrative Agent immediately in the event (a) of any loss, theft or unauthorized disclosure or use of any of the user identification codes, passwords, personal identification numbers and/or access codes or (b) Seller has any reason to believe there has been a breach of security or that its access to Warehouse Electronic System is no longer secure for any reason.
Seller understands and agrees that it shall be fully responsible for protecting and safeguarding its computer hardware and software from any and all (x) computer “viruses,” “time bombs,” “trojan horses” or other harmful computer information, commands, codes or programs that may cause or facilitate the destruction, corruption, malfunction or appropriation of, or damage or change to, any of Seller’s or the Administrative Agent’s computer information processing systems, including without limitation, all hardware, software, Electronic Records, information, data and/or codes and (y) computer “worms,” “trap doors” or other harmful computer information, commands, codes or programs that enable unauthorized access to Seller’s and/or the Administrative Agent’s computer information processing systems, including without limitation, all hardware, software, Electronic Records, information, data and/or codes.
Seller agrees that the Administrative Agent may, in its sole discretion and from time to time, without limiting Seller’s liability set forth herein, establish minimum security standards that Seller must, at a minimum, comply with in an effort to (aa) protect and safeguard any and all user identification codes, passwords, personal identification numbers and/or access codes from loss, theft or unauthorized disclosure or use; and (bb) prevent the infiltration and “infection” of Seller’s hardware and/or software by any and all computer “viruses,” “time bombs,” “trojan horses,” “worms,” “trapdoors” or other harmful computer codes or programs.
If the Administrative Agent, from time to time, establishes minimum security standards, Seller shall comply with such minimum security standards within the time period
established by the Administrative Agent. The Administrative Agent shall have the right to confirm Seller’s compliance with any such minimum security standards. Seller’s compliance with such minimum security standards shall not relieve Seller from any of its liability set forth herein.
Whether or not the Administrative Agent establishes minimum security standards, Seller shall continue to be fully responsible for adopting and maintaining security measures that are consistent with the risks associated with conducting electronic transactions with the Administrative Agent and the Buyers. Seller’s failure to adopt and maintain appropriate security measures or to comply with any minimum security standards established by the Administrative Agent may result in, among other things, termination of Seller’s access to the Administrative Agent’s computer information processing systems.
Seller understands and agrees that certain elements or components of the Warehouse Electronic System may be provided by third party vendors, and, absent gross negligence or willful misconduct on the part of Administrative Agent, hereby holds the Administrative Agent and each Buyer harmless from any liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against Seller relating to or arising out of Seller’s use of the Warehouse System including, without limitation, the use or failure of any elements or components provided by third party vendors. Nothing herein shall, however, deprive Seller of any remedies it may have against such third party vendors.
SECTION 26. | ENTIRE AGREEMENT; SEVERABILITY; SINGLE AGREEMENT |
This Agreement, together with the Facility Documents, constitute the entire agreement and understanding between the Administrative Agent, the Buyers and Seller with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Mortgage Loans. By acceptance of this Agreement, the Administrative Agent, the Buyers and Seller each acknowledge that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
The Administrative Agent, the Buyers and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of the Administrative Agent, the Buyers and Seller agrees (a) 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, (b) that each Buyer shall be entitled to set off claims and apply property held by it in respect of any Transaction against obligations owing to it in respect of any other Transaction hereunder, (c) that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments,
deliveries, and other transfers may be applied against each other and netted, and (d) to promptly provide notice to the other after any such set off or application.
SECTION 27. | GOVERNING LAW |
THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN THE ADMINISTRATIVE AGENT, THE BUYERS AND SELLER SHALL BE GOVERNED BY E-SIGN.
SECTION 28. | SUBMISSION TO JURISDICTION; WAIVERS |
THE ADMINISTRATIVE AGENT, EACH BUYER AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTY SHALL HAVE BEEN NOTIFIED;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(v) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 29. | NO WAIVERS, ETC. |
No failure on the part of the Administrative Agent or any Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Facility Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Facility Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. An Event of Default shall be deemed to be continuing unless expressly waived by the Administrative Agent in writing, as directed by the Required Buyers, and an Event of Default that has been waived by the Administrative Agent in writing, as directed by the Required Buyers, shall be deemed to be not continuing.
SECTION 30. | CONFIDENTIALITY |
Each of the Administrative Agent, the Buyers and Seller hereby acknowledge and agree that all written or computer-readable information provided by one party to any other regarding the terms set forth in any of the Facility Documents or the Transactions contemplated thereby (the “Confidential Terms”) shall be kept confidential and shall not be divulged to any Person (other than the Custodian) without the prior written consent of such other party except to the extent that (a) it is necessary to do so in working with legal counsel, auditors, taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, process, or the rules and regulations of any stock exchange, (b) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, (c) any assignee or participant or any prospective assignee or prospective participant who has agreed in a written contract to comply with the requirements of this Section 30 or (d) in the event of an Event of Default that is continuing the Administrative Agent or the Required Buyers determine such information to be necessary to disclose in connection with the marketing and sales of the Purchased Mortgage Loans or otherwise to enforce or exercise the Administrative Agent’s and the Buyer’s rights hereunder. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Facility Document, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that neither Seller, the Administrative Agent nor any Buyer may disclose the name of or identifying information with respect to the other or any pricing terms (including, without limitation, the Pricing Rate, Warehouse Fees, Purchase Price Percentage and Purchase Price) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior
written consent of the other, provided that Seller may identify the Buyers and the Maximum Purchase Amount to its lenders under other facilities and its other third party creditors. The provisions set forth in this Section 30 shall survive the termination of this Agreement.
Notwithstanding anything in this Agreement to the contrary, all parties hereto 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/or any applicable terms of this Agreement (the “Confidential Information”). Each party hereto understands 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. Each party hereto shall each implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the GLB Act) of such party or any Affiliate of such party which that party holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Each party hereto shall, at a minimum establish and maintain such data security program as is necessary to meet the objectives of the Standards for Safeguarding Customer Information issued by the Federal Trade Commission as set forth in the Code of Federal Regulations at 16 C.F.R. Part 314 or Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth in the Code of Federal Regulations at 12 C.F.R. Parts 30, 168, 170, 208, 211, 225, 263, 308, and 364. Upon request, each party hereto, as applicable will provide evidence reasonably satisfactory to allow the requesting party to confirm that the non-requesting party has satisfied its obligations as required under this Section. Without limitation, this may include the requesting party’s review of audits, summaries of test results, and other equivalent evaluations of the non-requesting party. Each party hereto shall notify the other parties promptly following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of the non-notifying party or any Affiliate of the non-notifying party provided directly to the notifying party by the non-notifying party or such Affiliate. The notifying party shall provide such notice to the non-notifying party by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual. The provisions set forth in this Section 30 shall survive the termination of this Agreement.
SECTION 31. | INTENT |
(a) The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended and that all payments hereunder are deemed “margin payments” or “settlement payments” as defined in Title 11 of the United States Code.
(b) It is understood that either party’s right to liquidate Purchased Mortgage Loans delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Section 14 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended.
(c) The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” a “repurchase agreement” and a “securities contract” as such terms are defined in FDIA and any rules, orders or policy statements thereunder.
(d) 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).
SECTION 32. | DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS |
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
SECTION 33. | AUTHORIZATIONS |
Any of the persons whose signatures and titles appear on Schedule 3 to the Pricing Letter are authorized, acting singly, to act for Seller or Buyer, as the case may be, under this Agreement.
SECTION 34. | ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES |
Each Buyer has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan.
SECTION 35. | MISCELLANEOUS |
(a) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed counterpart of this Agreement by e-mailed “.pdf file” or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by e-mailed “.pdf file” or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.
(b) Captions. The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.
(c) | Acknowledgment. Seller hereby acknowledges that: |
(i) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Facility Documents to which it is a party;
(ii) neither the Administrative Agent nor any Buyer has any fiduciary relationship to Seller; and
(iii) | no joint venture exists between the Administrative Agent or any Buyer and Seller. |
(d) Documents Mutually Drafted. Each party hereto agrees that this Agreement each other Facility Document (other than the Warehouse Customer Guide) prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.
(e) Amendments. Except as otherwise expressly set forth in this Agreement, no amendment or waiver of any provision of this Agreement or any other Facility Document, and no consent to any departure by the Seller therefrom, shall be effective unless in writing executed by the Seller and the Administrative Agent, as directed by the Required Buyers, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that the following actions shall require the consent of all Buyers:
(i) | Increases the Maximum Purchase Amount; |
(ii) Agrees to any reduction in any Pricing Rate, Repurchase Price or fee provisions of this Agreement, excluding the provisions relating to the Administrative Agent’s fees;
(iii) Acknowledges termination of the Buyers’ ownership interest in the Purchased Loans or releases any Lien held under the Repurchase Documents other than in accordance with the Repurchase Documents;
(iv) Changes any Buyer’s pro rata share of ownership of the Purchased Loans other than in accordance with the express provisions of the Repurchase Documents;
(v) Agrees to any change to the definition of “Required Buyers” or to any provisions of this Agreement or any of the other Repurchase Documents that requires the consent, approval or satisfaction of all of the Buyers or each of the Buyers;
(vi) Extends the Termination Date or the due date of any required payment other than in accordance with the express provisions of the Repurchase Documents;
(vii) | Agrees to any change in this Section 35(e); |
(viii) | Agrees to any change in the definition of “Purchase Price Percentage”; |
(ix) Releases the Seller from any of its obligations other than in accordance with the express conditions of the Repurchase Documents or changes any amount due under the terms of the Repurchase Documents, or replaces or adds any Seller;
(x) | Agrees to any change in the sharing provisions of Section 5(e); or |
(xi) | Agrees to any change in the definition “Eligible Loans”. |
provided, further, that no such amendment, waiver or consent shall amend, modify or otherwise affect the rights or duties hereunder or under any other Facility Document of the Administrative Agent, unless in writing executed by the Administrative Agent, in each case in addition to the Seller and the Buyers required above. No amendment to any provision of this Agreement relating to the Swing Line Loans shall be effective without the written consent of TIAA. For the avoidance of doubt, should Seller request an amendment, waiver or consent under this Agreement, it is understood that such request shall be made to the Administrative Agent, who will then, in good faith, coordinate the acceptance or rejection of such amendment, waiver or consent amongst the Buyers.
(f) PATRIOT Act. Each Buyer subject to the PATRIOT Act hereby notifies the Seller that, pursuant to the requirements of the PATRIOT Act, it may be 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 such Buyer to identify the Seller in accordance with the PATRIOT Act.
(g) | Defaulting Buyers. |
(i) Defaulting Buyer Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Buyer becomes a Defaulting Buyer, then, until such time as such Buyer is no longer a Defaulting Buyer, to the extent permitted by Requirements of Law:
(A) Waivers and Amendments. Such Defaulting Buyer’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Buyers and Section 35(e).
(B) Defaulting Buyer Waterfall. Any payment on the Obligations received by the Administrative Agent for the account of such Defaulting Buyer (whether voluntary or mandatory, at maturity or otherwise) or received by the Administrative Agent from a Defaulting Buyer pursuant to Section 22 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Buyer to the Administrative Agent hereunder; second, as the Seller may request (so long as no Default or Event of Default exists), to the funding of any Transaction in respect of which such Defaulting Buyer has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, to the payment of any amounts owing to the Buyers as a result of any judgment of a court of competent jurisdiction obtained by any Buyer against such Defaulting Buyer as a result of such Defaulting Buyer’s breach of its obligations under this Agreement; fourth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Seller as a result of any judgment of a court of competent jurisdiction obtained by the Seller against such Defaulting Buyer as a result of such Defaulting Buyer’s breach of its obligations under this Agreement; and fifth, to such Defaulting Buyer or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the amount of any Transaction in respect of which such Defaulting Buyer has not fully funded its appropriate share, and (y) such Transaction was funded at a time when the conditions set forth in Section 3(b) were satisfied or waived, such payment shall be applied solely to pay the Obligations related owed to, all Non-Defaulting Buyers on a pro rata basis prior to being applied to the payment of any Obligations owed to, such Defaulting Buyer until such time as all Transactions are held by the Buyers pro rata in accordance with the Buyers’ pro rata share of the Maximum Purchase Amount without giving effect to clause (iv) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Buyer that are applied (or held) to pay amounts owed by a Defaulting Buyer pursuant to this Section shall be deemed paid to and redirected by such Defaulting Buyer, and each Buyer irrevocably consents hereto.
(C) Defaulting Buyer Cure. If the Seller and the Administrative Agent and agree in writing that a Buyer is no longer a Defaulting Buyer, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Buyer will, to the extent applicable, purchase at par that portion of outstanding Transactions of the other Buyers or take such other actions as the Administrative Agent may determine to be necessary to cause the Transactions to be held pro rata by the Buyers in accordance with the Maximum Purchase Amount, whereupon, such Buyer will cease to be a Defaulting Buyer; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Seller while that Buyer was a Defaulting Buyer; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Buyer to Buyer will constitute a waiver or release of any claim of any party hereunder arising from that Buyer’s having been a Defaulting Buyer.
In addition, notwithstanding anything in this Section to the contrary, if the Administrative Agent and the Seller shall have jointly identified an obvious error or any error or omission of a technical nature, in each case, in any provision of the Facility Documents, then the Administrative Agent and the Seller shall be permitted to amend such provision, and, in each case, such amendment shall become effective without any further action, direction or consent of any other party to any Facility
Document if the same is not objected to in writing by the Required Buyers to the Administrative Agent within ten Business Days following receipt of notice thereof.
SECTION 36. | GENERAL INTERPRETIVE PRINCIPLES |
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(c) references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
(f) | the term “include” or “including” shall mean without limitation by reason of enumeration; |
(g) all times specified herein or in any other Facility Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated;
(h) all references herein or in any Facility Document to “good faith” means good faith as defined in Section 1-201(19) of the Uniform Commercial Code as in effect in the State of New York;
(i) any Default or Event of Default shall be deemed to not be continuing once waived by the Administrative Agent, at the direction of the Required Buyers, in writing; and
(j) any determination made by any party hereto pursuant to this Agreement, whether in such Person’s sole discretion or otherwise, shall be made in good faith.
SECTION 37. | EXISTING MRA |
Effective as of the Effective Date, this Agreement amends, replaces, and restates the Existing MRA in its entirety. The terms and conditions of this Agreement supersede, effective as of the Effective Date, the terms and conditions of the Existing MRA, provided, however, that the obligations incurred under the Existing MRA shall not in any circumstance be terminated,
extinguished or discharged hereby but shall hereafter be governed by the terms of this Agreement. This Agreement is not intended to constitute a novation.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.
ADMINISTRATIVE AGENT: | ||
TIAA, FSB | ||
By: | /s/ Mark Bucior | |
Name: Mark Bucior | ||
Title: Vice President | ||
TIAA Bank | ||
301 W. Bay Street | ||
Jacksonville, FL 32202 | ||
Attn: [***]
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With a copy to: | ||
TIAA Bank | ||
501 Riverside Avenue, 12th Floor | ||
Jacksonville, FL | ||
Attn: Office of the General Counsel | ||
Signature Page to the Amended and Restated Master Repurchase Agreement
SELLER: | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | /s/ Joseph Ruhlin | |
Name: Joseph Ruhlin | ||
Title: Senior Managing Director and Treasurer | ||
Address for Notices: | ||
Home Point Financial Corporation | ||
2211 Old Earhart Road, Suite 250, | ||
Ann Arbor MI 48105 | ||
Attention: Joseph Ruhlin | ||
E-mail: [***]
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Telephone No.: [***]
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Signature Page to the Amended and Restated Master Repurchase Agreement
BUYER: | ||
CAPITAL ONE, NATIONAL ASSOCIATION | ||
By: | /s/ Paul Spiridigliozzi | |
Name: Paul Spiridigliozzi | ||
Title: Managing Director | ||
Address for Notices: | ||
Capital One, National Association | ||
2 Bethesda Metro Center, 7th Floor | ||
Bethesda, Maryland 20814 | ||
Attention: [***]
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Email: [***]
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With a copy to: | ||
Capital One, National Association | ||
299 Park Avenue | ||
New York, New York 10171 | ||
Attention: [***]
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Email: [***]
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Signature Page to the Amended and Restated Master Repurchase Agreement
SCHEDULE 1
SCHEDULE OF REPRESENTATIONS AND WARRANTIES REGARDING MORTGAGE LOANS
Seller represents and warrants to the Buyers, with respect to each Mortgage Loan submitted for purchase under the Agreement, that as of the Purchase Date for the purchase of such Mortgage Loans and as of the date of this Agreement and any Transaction hereunder and at all times while the Facility Documents and any Transaction hereunder is in full force and effect, that the following are true and correct. For purposes of this Schedule 1 and the representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to a Mortgage Loan if and when Seller has taken or caused to be taken action such that the event, circumstance or condition that gave rise to such breach no longer adversely affects such Mortgage Loan. With respect to those representations and warranties which are made to the best of Seller’s knowledge, if it is discovered by Seller, any Buyer or the Administrative Agent 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 the purposes of this Schedule 1, Seller agrees that (i) all references to acts and omissions of “Seller” shall be deemed to include all acts and omissions of any third party from whom Seller acquired any Mortgage Loan and (ii) to the extent that any representation or warranty is made to the Seller’s knowledge or to the best of Seller’s knowledge, such qualification shall not be applicable with respect to the acts or omissions of such third party from whom Seller acquired any Mortgage Loan.
A. Underwriting Guidelines. Each Mortgage Loan conforms to the specifications set forth by this Agreement, including, but not limited to, the Underwriting Guidelines, any Buyer, Takeout Investor, Agency, and any insurer regulations, rules, guides and handbooks for loans eligible for sale to, insurance by or pooling to back securities issued or guaranteed by, a Takeout Investor, any Buyer, an Agency, or insurer, as applicable. Each Conforming Mortgage Loan is eligible as collateral for Ginnie Mae mortgage backed securities or is eligible for purchase by an Agency.
B. Mortgage Loans as Described. The information set forth in the Mortgage Loan Schedule is complete, true and correct.
C. No Defenses. The Mortgage Loan, and the Assignment of Proprietary Lease related to each Co-op Loan, is not subject to any right of rescission, set off, counterclaim or defense, including without limitation the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or insolvency proceeding at, or subsequent to, the time the Mortgage Loan was originated.
D. Disbursement. The Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been fully disbursed, there is no requirement for future advances thereunder, any and all requirements as to completion of any on-site or off-site improvements have
been complied with, and any disbursements of any escrow funds have been made. All costs, fees and expenses incurred in making, or closing the Mortgage Loan and the recording of the Mortgage were paid to the appropriate parties, the mortgage insurance premium or the VA guarantee fee has been paid as applicable, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.
E. Payments and Advances. Seller has not, and to the best of Seller’s knowledge no Person has, advanced funds, or induced, solicited or received any advance of funds by a Person other than the Mortgagor, directly or indirectly, for the payment of any amount required under or to obtain the Mortgage Loan, or any tax, insurance, special assessment, sewer, utility or similar payments with respect to the Mortgaged Property. The Mortgagor has made any down payment required in connection with the Mortgage Loan, and has received no concession from Seller, the seller of the Mortgaged Property or any other third Person, except as clearly disclosed in the Mortgage File and in writing to the Administrative Agent. No subordinate financing was used in the Mortgagor’s acquisition of the property securing the Mortgage Loan other than subordinate financing acceptable to the Administrative Agent, Fannie Mae, Freddie Mac, Ginnie Mae, HUD, VA or applicable Takeout Investor pursuant to their requirements in effect at the time of purchase of the Mortgage Loan by the Administrative Agent.
F. Compliance with Requirements of Law. Any and all Requirements of Law, including, but not limited to, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, disclosure, unfair and deceptive practices laws or privacy laws, applicable to the Mortgage Loan have been satisfied and complied with, and the consummation of the transactions contemplated hereby will not involve the violation of any Requirements of Law. Seller shall maintain in its possession, available for the Administrative Agent’s inspection, and shall deliver to the Administrative Agent upon reasonable demand, evidence of compliance with all applicable Requirements of Law.
G. Co-op Loan: Compliance with Law. With respect to each Co-op Loan, the related cooperative corporation that owns title to the related cooperative apartment building is a “cooperative housing corporation” within the meaning of Section 216 of the Code, and is in material compliance with applicable Requirements of Law which, if not complied with, could have a material adverse effect on the Mortgaged Property.
H. Mortgage Insurance. There are no defenses, counterclaims, or rights of setoff, or other facts or circumstances affecting the eligibility of the Mortgage Loans for insurance by an insurer, or affecting the validity or enforceability of any mortgage insurance or mortgage guaranty with respect to the Mortgage Loan as a result of any act, error or omission of Seller or of any other Person including, but not limited to, the FHA insurance. The related FHA policy calls for the assignment of the Mortgage Loan to FHA as opposed to the co-insurance option. The entire amount of the insurance premium has been paid to FHA in accordance with the FHA Regulations and no portion of such premium is shared with or by Seller or, if the monthly premium option has been chosen for such Mortgage Loan, all such premiums due on or before the related Purchase Date have been duly and timely paid.
I. Damage; Condemnation. There is no proceeding pending for the total or partial condemnation of the Mortgaged Property and such Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan, the use for which the Mortgaged Property was intended or the eligibility of the Mortgage Loan for full payment of insurance benefits, and there are no pending or, to the knowledge of Seller, threatened proceedings for total or partial condemnation of the Mortgaged Property. Each Mortgaged Property is in good repair. Seller has completed any property inspections required by FHA Regulations, other Requirements of Law, and such inspections, if any, show no evidence of property damage or deferred maintenance, unless the property damage and deferred maintenance was considered part of the initial Repair Set Aside Account disclosed in the Mortgage File at closing.
J. Type of Mortgaged Property. The Mortgaged Property is located in the state identified in the Mortgage File and consists of a single parcel of real property with a detached single-family residence erected thereon, or a two-to-four-family dwelling, a townhouse, or an individual condominium unit in a condominium, or a Co-op Unit, or an individual unit in a planned unit development, or an individual or a manufactured home on owned or leased land; provided, however, that any condominium unit, Co-op Project or planned unit development conforms with Takeout Investor and insurer requirements with respect to such dwellings, and that no residence or dwelling is a mobile home. If the Mortgaged Property is a condominium unit or a unit in a planned unit development (other than a de minimis planned unit development) or a Co-op Unit such condominium or planned unit development project is (i) acceptable to Fannie Mae or Freddie Mac or (ii) located in a condominium or planned unit development project which has received project approval from Fannie Mae or Freddie Mac. The representations and warranties required by Fannie Mae with respect to such condominium or planned unit development have been satisfied and remain true and correct. No portion of the Mortgaged Property is used for commercial purposes provided, that Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes.
K. Leaseholds. If the Mortgage Loan is secured by a long term residential lease, (1) the lessor under the lease holds a fee simple interest in the land; (2) the terms of such lease expressly permit the mortgaging of the leasehold estate, the assignment of the lease without the lessor’s consent and the acquisition by the holder of the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of foreclosure or provide the holder of the Mortgage with substantially similar protections; (3) the terms of such lease do not (a) allow the termination thereof upon the lessee’s default without the holder of the Mortgage being entitled to receive written notice of, and opportunity to cure, such default, (b) allow the termination of the lease in the event of damage or destruction as long as the Mortgage is in existence, (c) prohibit the holder of the Mortgage from being insured (or receiving proceeds of insurance) under the hazard insurance policy or policies relating to the Mortgaged Property or (d) permit any increase in rent other than pre-established increases set forth in the lease; (4) the original term of such lease is not less than 15 years; (5) the term of such lease does not terminate earlier than five years after the maturity date of the Mortgage Note; and (6) the Mortgaged Property is located in a jurisdiction in which the use of leasehold estates in transferring ownership in residential properties is a widely accepted practice.
L. Good Title. Immediately prior to the transfer and assignment of the Mortgage Loan to the Buyers, the Mortgage Loan is not assigned or pledged, and Seller has good, indefeasible, and marketable title thereto, and Seller is the sole owner and holder of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note (and with respect to any Co-op Loan, the sole owner of the related Assignment of Proprietary Lease), free and clear of any and all Liens, of any nature, and there has been no other sale, transfer, or assignment of security interest granted by the Seller to any other party, nor are there any other restrictions limiting the transfer of the Mortgage Loan, and Seller has full right, title and authority, subject to no interest or participation of, agreement with, or approval of, any other Person, to sell, assign and transfer the Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, the Buyers will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, Lien, pledge, charge, claim or security interest. Seller intends to relinquish all rights to possess, control and monitor each Mortgage Loan.
M. Co-op Loan: No Pledge. With respect to each Co-op Loan, there is no prohibition against pledging the shares of the cooperative corporation or assigning the Proprietary Lease. With respect to each Co-op Loan, (i) the term of the related Proprietary Lease is longer than the term of the Co-op Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Co-op Shares owned by such Mortgagor first to the Co-op Corporation, (iii) there is no prohibition in any Proprietary Lease against pledging the Co-op Shares or assigning the Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement published by Aztech Document Systems, Inc. as of the date hereof or includes provisions which are no less favorable to the lender than those contained in such agreement.
N. No Litigation. There is no pending and, to the knowledge of Seller, no threatened litigation, which may affect in any way, by attachment or otherwise, the title or interest of the Seller in and to the Mortgage Loan, the property securing the Mortgage Loan, or any related note or security instrument.
O. Mortgage File. The Mortgage File contains each of the documents and instruments required by the Custodial Agreement and by applicable Requirements of Law or the related Takeout Investor or insurer requirements, duly executed and in due and proper form and each such document or instrument is genuine and in form acceptable to Takeout Investors and insurers and the information contained therein is true, accurate and complete. The Mortgage Loan was originated in accordance with Takeout Investor and insurer underwriting standards in effect at the time the Mortgage Loan was originated.
P. Occupancy; Inspection. As of the Purchase Date, the Mortgaged Property is or will be lawfully occupied under all applicable Requirements of Law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities.
Q. No Outstanding Charges. There are no defaults in complying with the terms of the Mortgage Loan, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due
and owing have been paid, or an escrow of funds or a tax and insurance set-aside has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable.
R. Original Terms Unmodified. The terms of the Mortgage Note (and the Proprietary Lease and the Pledge Instruments with respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered or modified in any respect, except by a written instrument that has: (a) been recorded, if necessary to protect the interests of the Buyers; and (b) been delivered to the Custodian. The substance of any such waiver, alteration or modification has been approved by the issuer of any related mortgage insurance and the title insurer, to the extent required by the policy, and, as applicable, its terms are reflected on the Mortgage Loan Schedule. No Mortgagor has been released in whole or in part, except in connection with an assumption agreement approved by the issuer of any related private mortgage insurance policy and the title insurer to the extent required by the policy, and which assumption agreement is part of the Mortgage File delivered to the Custodian and the terms of which are reflected in the Mortgage Loan Schedule.
S. No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the Lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
T. Valid First Lien. The Mortgage is a valid, subsisting, enforceable and perfected first 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. There is no delinquent tax or assessment Lien against the Mortgaged Property, and the Seller has paid all property tax bills. The Lien of the Mortgage is subject only to:
(i) the Lien of current real property taxes and assessments not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and: (i) referred to or to otherwise considered in the Appraisal relating to the Mortgage Loan; or (ii) that do not adversely affect the Appraised Value of the Mortgaged Property set forth in such Appraisal; and
(iii) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting, enforceable and perfected first priority Lien on the Mortgaged Property described therein and Seller has full right to sell and assign the same to the Buyers in accordance with the Requirements of Law and any and all contractual obligations. The Mortgaged Property was not, as of the date of origination of the Mortgage Loan, unless otherwise indicated, 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.
U. Co-op Loan: Valid First Lien. With respect to each Co-op Loan, the related Mortgage is a valid, enforceable and subsisting first security interest on the related cooperative shares securing the related cooperative note and lease, subject only to (a) liens of the cooperative for unpaid assessments representing the Mortgagor’s pro rata share of the cooperative’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the security interest. There are no liens against or security interests in the cooperative shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority equal to or over the Seller’s security interest in such Co-op Shares.
V. No Fraud. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms. All parties to the Mortgage Note and the Mortgage and any other related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage and any other related agreement, and the Mortgage Note and the Mortgage and any other such related agreement have been duly and properly executed by such Persons. No fraud, error, omission, misrepresentation, negligence or similar occurrence having a material adverse impact was committed in connection with the origination of the Mortgage Loan.
W. Title Insurance. Each Mortgage Loan is covered by an ALTA lender’s title insurance policy, or with respect to any Mortgage Loan for which the related Mortgaged Property is located in California, a CLTA lender’s title insurance policy, or other generally acceptable form of policy of insurance, issued by a title insurer qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns: (a) as to the first priority Lien of the Mortgage; and (b) against any loss by reason of the invalidity or unenforceability of the Lien resulting from the provisions of the Mortgage providing for adjustment in the Mortgage Interest Rate and Monthly Payment with respect to each Adjustable Rate Loan, subject only to the exceptions contained in clauses (a), (b), and (c) of Part T of this Schedule 1. Where required by state Requirements of Law applicable to Seller, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress, and against encroachments by or upon the Mortgaged Property or any interest therein. The Seller, and its successors and assigns, are the sole insured of such lender’s title insurance policy, and such lender’s title insurance policy is valid and in full force and effect and will be in force and effect
upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder of the Mortgage, including Seller, has done, by act or omission, anything that would impair the coverage of such lender’s title insurance policy. With respect to each manufactured home, a search for filings of financing statements has been made by a company competent to do same and such search has not found anything which would materially and adversely affect the Mortgage Loan secured by a manufactured home including, but not limited to, the priority of the Lien or perfection of the Mortgage Loan secured by a manufactured home.
X. Hazard Insurance. For each Mortgage Loan, pursuant to the terms of the Mortgage, all buildings or other improvements upon the Mortgaged Property are insured by an insurer acceptable to the Administrative Agent against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located, as are provided for by Fannie Mae or by Freddie Mac, as well as all additional requirements set forth in the Underwriting Guidelines. Mortgagor has obtained coverage in an amount which is at least equal to the full insurable value of the improvements on the Mortgaged Property. The policy either includes provisions for inflation adjustments or guaranteed replacement cost coverage of the Mortgaged Property. In the case of flood insurance, Mortgagor has obtained the maximum amount of insurance that is available under the National Flood Insurance Act of 1968. If upon origination of the Mortgage Loan, the Mortgaged Property was in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect which policy conforms to all Requirements of Law and applicable insurer and Takeout Investor requirements. All individual insurance policies contain a standard mortgagee clause naming Seller and its successors and assigns as mortgagee, and all premiums thereon have been paid. The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and expense, and to seek reimbursement therefor from the Mortgagor. Where required by state Requirements of Law applicable to Seller, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of the Buyers upon the consummation of the transactions contemplated by this Agreement. Seller has not engaged in, and has no knowledge of the Mortgagor’s or any servicer’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either.
Y. No Default. The Mortgage Loan is current and all payments have been made within the month such payments were due, and if the Mortgage Loan is a Co-op Loan, no foreclosure action or private or public sale under the Uniform Commercial Code has ever, to the knowledge of the Seller, been threatened or commenced with respect to the Co-op Loan. There is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event that, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration. With
respect to each Co-op Loan, there is no default in complying with the terms of the Mortgage Note, the Assignment of Proprietary Lease and the Proprietary Lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been paid, and the Seller has the right under the terms of the Mortgage Note, Assignment of Proprietary Lease and Recognition Agreement to pay any maintenance charges or assessments owed by the Mortgagor.
Z. No Mechanics’ Liens. There are no mechanics’ or similar Liens or claims that have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such Liens) affecting the related Mortgaged Property that are or may be Liens prior to, or equal or coordinate with, the Lien of the related Mortgage.
AA. Location of Improvements. All improvements that were considered in determining the Appraised Value of the Mortgaged Property lay wholly within the boundaries and building restriction lines of the Mortgaged Property and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning law or regulation.
BB. Customary Provisions. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including: (a) in the case of a Mortgage designated as a deed of trust, by trustee’s sale; and (b) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption or other right available to a Mortgagor that would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage. If the Mortgage Loan is an eMortgage Loan, the related eNote contains the Agency-Required eNote Legend.
CC. No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the Lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in Sections T and U of this Schedule 1.
DD. Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under the Requirements of Law and Takeout Investor and insurer requirements 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 Buyers to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
EE. Acceptable Investment. There are no circumstances or conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that may cause the Mortgage Loan to become a Delinquent Mortgage Loan or adversely affect the value or marketability of the Mortgage Loan.
FF. FICO Scores. Each Mortgage Loan has a non-zero FICO score.
GG. Due on Sale. The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder.
HH. Co-op Loans: Acceleration of Payment. With respect to each Co-op Loan, each Assignment of Proprietary Lease contains enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization of the material benefits of the security provided thereby. The Assignment of Proprietary Lease contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Note in the event the Co-op Unit is transferred or sold without the consent of the holder thereof.
II. Origination and Collection Practices. The origination, servicing and collection practices used with respect to the Mortgage Loan have been in accordance with Accepted Servicing Practices and the terms of the Mortgage File, the Requirements of Law and any and all contractual obligations of Seller (including those obligations contained in this Agreement), including the FHA Regulations relating to loss mitigation, and Takeout Investor or insurer guidelines, and have been in all respects legal, proper and prudent in the mortgage origination and servicing business. All Mortgage Interest Rate adjustments have been made in compliance with applicable state and federal law and the terms of the related Mortgage and Mortgage Note on the related adjustment date. Seller executed and delivered any and all notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and any payment adjustments. All advances required to be made under the Mortgage Notes have been made within the time frame therein specified and in accordance with the Mortgage File, FHA Regulations and Requirements of Law. Any interest required to be paid pursuant to applicable state, federal and local law has been properly paid and credited. The terms of the Mortgage Loan do not require the owner of the Mortgage Loan to make escrow payments on behalf of the Mortgagor. All escrow deposits and escrow payments, if any, are in the possession of, or under the control of, Seller or Subservicer and have been collected and handled in full compliance with all Requirements of Law and the provisions of the related Mortgage Note and Mortgage, and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. No escrow deposits or escrow payments or other charges or payments due the Seller have been capitalized under the Mortgage Note.
JJ. Appraisal. The Mortgage File contains an Appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by a qualified appraiser, duly appointed by Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof; and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the Appraisal and appraiser both satisfy the requirements of Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder, and all Requirements of Law and Takeout Investor or insurer requirements, each as in effect on the date the Mortgage Loan was originated. Seller has no knowledge of any circumstances or condition which might indicate that the Appraisal is incomplete or inaccurate. In addition, the Appraisal was prepared in accordance with USPAP Guidelines. The appraiser for the Mortgage Loan was duly licensed or certified under the applicable law where the Mortgage Loan was originated, and for each Government Mortgage Loan was acceptable to the FHA or VA, as applicable, and for each Conventional Mortgage Loan was
acceptable to Fannie Mae, Freddie Mac and/or the Takeout Investor, as applicable. The Seller will maintain documentation evidencing each appraiser’s qualification and licensing or certification, which will promptly be provided to the Administrative Agent upon request.
KK. Servicemembers Civil Relief Act. The Mortgagor has not notified Seller, and Seller has no knowledge of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act or any similar state statute or regulation.
LL. Environmental Matters. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue. To the best of Seller’s knowledge, the Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation.
MM. No Denial of Insurance. No action, inaction, or event has occurred and no state of fact exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable pool insurance policy, special hazard insurance policy, private mortgage insurance or other mortgage insurance policy, including, but not limited to FHA mortgage insurance, or bankruptcy bond, irrespective of the cause of such failure of coverage.
NN. Conversion to Fixed Interest Rate. With respect to each Adjustable Rate Loan, the Mortgage Note does not contain a provision permitting or requiring conversion to a fixed interest rate Mortgage Loan.
OO. Tax Service Contract. Seller has obtained a life of loan, transferable real estate tax service contract with an Approved Tax Service Contract Provider on each Mortgage Loan and such contract is assignable to the Buyers, and their successors and assigns, without cost.
PP. Flood Certification Contract. Seller has obtained a life of loan, transferable flood certification contract for each Mortgage Loan with a Flood Policy Insurer, and such contract is assignable to the Buyers, and their successors and assigns, without cost.
QQ. Underwriting and Origination. The Mortgage Loan was completely underwritten and originated by or through Seller.
RR. Reserved.
SS. MERS. Such Mortgage Loan (a) meets the definition of MERS Designated Loan in the Electronic Tracking Agreement, (b) was properly registered in the MERS System at the time of its origination and has continuously remained so registered, and (c) has MERS as the record mortgagee or beneficiary.
TT. Repairs and Improvements. All repairs or improvements which if not made would result in the loss of any insurance coverage, including FHA insurance, on the related Mortgaged Property have been made to such Mortgaged Property, or set-aside amounts for such repairs or improvements have been included in the related Mortgage and Mortgage Note, all in compliance with the Requirements of Law, including, but not limited to, the applicable requirements of FHA Regulations. Except as otherwise disclosed in writing to the Administrative
Agent, any repairs for which an advance has been made were completed and passed an inspection in accordance with the FHA Regulations.
UU. Interest Calculation. Interest on each Mortgage Loan is calculated in accordance with the related Mortgage Note and the Requirements of Law, including, but not limited to, the applicable FHA Regulations. None of the Mortgage Loans provide for simple interest calculation.
VV. Construction or Rehabilitation of Mortgaged Property. Either (i) the Mortgage Loan was not made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property or (ii) the Mortgaged Property has a certificate of completion if such Mortgage Loan was made in connection with the construction or rehabilitation of the related Mortgaged Property.
WW. Qualified Mortgage. The Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended.
XX. FEMA Designations. Except as otherwise disclosed in writing to the Administrative Agent, no Mortgaged Property (i) is in a zip code declared by the Federal Emergency Management Agency or any successor agency (“FEMA”) as a federal disaster area and (ii) has been declared by FEMA as being an “Individual Assistance” property or “Category 1” property (or such similar term(s) or classification(s) that may be used by FEMA from time to time).
YY. Credit Information. As to each consumer report (as defined in the Fair Credit Reporting Act, Public Law 91-508) or other credit information furnished by the Seller to the Administrative Agent in connection with a Mortgage Loan, Seller has full right and authority and is not precluded by law or contract from furnishing such information to the Administrative Agent.
ZZ. Predatory Lending Regulations. No Mortgage Loan is a High Cost Mortgage Loan. No predatory or deceptive lending practices, including, without limitation, the extension of credit without regard to the ability of the Mortgagor to repay and the extension of credit which has no apparent benefit to the Mortgagor, were employed in the origination of the Mortgage Loan.
AAA. Compliance with Anti-Money Laundering Laws. Seller has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”) with respect to the Mortgage Loans; Seller has established an anti-money laundering compliance program as required by the Anti-Money Laundering Laws, has conducted the requisite due diligence in connection with the origination of each Mortgage Loan for purposes of the Anti-Money Laundering Laws as applicable as of the origination date, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by the said Mortgagor to purchase the property in question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.
BBB. Purchase of Insurance. No Mortgagor was required to purchase any credit life, disability, accident or health insurance product as a condition of obtaining the extension of
credit. No Mortgagor obtained a prepaid single-premium credit life, disability, accident or health insurance policy in connection with the origination of the Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase single premium credit insurance policies as part of the origination of, or as a condition to closing, such Mortgage Loan.
CCC. Governmental Requirements. Each Government Mortgage Loan conforms with all applicable FHA or VA underwriting, lending, selling and servicing requirements and with all Ginnie Mae requirements for the inclusion of the Mortgage Loan in a Ginnie Mae mortgage-backed security pool, and the Seller will comply with all documentation requirements of the Administrative Agent and the document custodian within the time limitations described in the Facility Documents. If a Takeout Commitment requires the Mortgage Loan to be FHA-insured, the Mortgage Loan is fully eligible for FHA insurance and is, or within 60 days after disbursement of the proceeds by the Seller will be, fully insured by the FHA. If a Takeout Commitment requires the Mortgage Loan to be guaranteed by VA, the Mortgage Loan is fully-eligible for VA guaranty, and is, or within 60 days after disbursement of the proceeds by the Seller will be, fully guaranteed by VA.
DDD. Conventional Mortgage Loan Requirements. Each Conventional Mortgage Loan conforms with all applicable requirements of the Administrative Agent, Agencies or applicable Takeout Investor, including, but not limited to, all requirements for the inclusion of such Conventional Mortgage Loans in any pool of loans or private security as designated by the Administrative Agent, Freddie Mac and Fannie Mae, and each Conventional Mortgage Loan conforms with all pooling requirements of the Agency or Takeout Investor. If a Takeout Commitment requires the Mortgage Loan to be insured by a policy of private mortgage insurance, the Mortgage Loan is fully eligible and qualified to be insured by such policy of private mortgage insurance, such policy is in full force and effect, and no event or condition exists which could give rise to or result in a revocation of or defense to the policy.
EEE. No Buydown Provisions; No Graduated Payments or Contingent Interests. The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.
FFF. Regarding the Mortgagor. The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such “living trust” is in compliance with Fannie Mae guidelines for such trusts.
GGG. High Interest Rate Credit/Lending Transactions. The Mortgage Loan is not subject to Section 226.32 of Regulation Z or any similar state Requirement of Law (relating to high interest rate credit/lending transactions).
HHH. Qualified Mortgage. (i) Before the consummation of each Purchased Mortgage Loan, Seller made a reasonable and good faith determination that the Mortgagor has a reasonable ability to repay the Purchased Mortgage Loan according to its terms, and at a minimum,
Seller underwrote such Purchased Mortgage Loan in accordance with the eight underwriting factors set forth in 12 CFR 1026.43(c); and (ii) each Purchased Mortgage Loan is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e), and in particular: (A) each Purchased Mortgage Loan provides for regular, substantially equal periodic payments (allowing for payment changes on adjustable rate mortgages or loans with step rate features) and does not result in negative amortization, allow the consumer to defer repayment of principal or result in balloon payments; (B) the loan term does not exceed 30 years and (C) for Purchased Mortgage Loans with note amounts of $100,000 or greater, the total points and fees do not exceed 3% of the total loan amount.
III. Ginnie Mae Buyout Loans. Each Ginnie Mae Buyout Loan meets the criteria set forth in the definition thereof as set forth in this Agreement.
JJJ. eMortgage Loans. With respect to each eMortgage Loan, the related eNote satisfies all of the following criteria:
(i) the eNote bears a digital or Electronic Signature;
(ii) the Hash Value of the eNote indicated in the MERS eRegistry matches the Hash Value of the eNote as reflected in the eVault;
(iii) there is a single Authoritative Copy of the eNote, within the meaning of Section 16 of the UETA or Section 7021 of E-SIGN, as applicable, that is held in the eVault;
(iv) the Location status of the eNote on the MERS eRegistry reflects the MERS Org ID of the Custodian;
(v) the Controller status of the eNote on the MERS eRegistry reflects the MERS Org ID of Buyer;
(vi) the Delegatee status of the eNote on the MERS eRegistry reflects the MERS Org ID of Custodian;
(vii) the Servicing Agent status of the eNote on the MERS eRegistry is blank until being changed to Servicer in connection with a Transfer of Control to a Take-out Investor;
(viii) there is no Control Failure with respect to such eNote; and
(ix) the single Authoritative Copy of the eNote is maintained electronically and has not been papered-out, nor is there another paper representation of such eNote.
EXHIBIT A
[RESERVED]
EXHIBIT B
FORM OF SERVICER NOTICE
[Date] | ||
[________________], | as | Servicer |
[ADDRESS] | ||
Attention: ___________ |
Re: | Amended and Restated Master Repurchase Agreement, dated as of September [_], 2020 (the “Agreement”), by and between [Seller] (the “Seller”), the Buyers, and TIAA, FSB, formerly known as EverBank, as a Buyer and as administrative agent (the “Administrative Agent”). |
Ladies and Gentlemen:
[___________________] (the “Servicer”) is servicing certain mortgage loans for Seller pursuant to that certain Servicing Agreement between the Servicer and Seller. Pursuant to the Agreement, the Servicer is hereby notified that Seller has sold and pledged to the Buyers certain mortgage loans which are serviced by Servicer.
Upon receipt of a notice of an event of default under the Agreement (a “Notice of Event of Default”) from the Administrative Agent in which the Administrative Agent shall identify the mortgage loans which are then owned by and/or pledged to the Buyers under the Agreement (the “Mortgage Loans”), the Servicer shall segregate all amounts collected on account of such Mortgage Loans, hold them in trust for the sole and exclusive benefit of the Buyers, and remit such collections in accordance with the Administrative Agent’s written instructions. Following such Notice of Event of Default, Servicer shall follow the instructions of the Administrative Agent with respect to the Mortgage Loans, and shall deliver to the Administrative Agent any information with respect to the Mortgage Loans reasonably requested by the Administrative Agent or which Servicer is obligated to provide to Seller.
In addition, and notwithstanding anything to the contrary in the Servicing Agreement, the Administrative Agent may terminate the Servicing Agreement, as pertaining to the Mortgage Loans, without payment of any penalty or termination fee, in which event the Servicer shall cooperate, at no cost to the Buyers, in transferring the servicing of the Mortgage Loans to a successor servicer appointed by the Administrative Agent.
Notwithstanding any contrary information which may be delivered to the Servicer by Seller, the Servicer may conclusively rely on any information or Notice of Event of Default delivered by the Administrative Agent, and Seller shall indemnify and hold the Servicer harmless for any and all claims asserted against it for any actions taken in good faith by the Servicer in connection with the delivery of such information or Notice of Event of Default.
Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed copy to the Administrative Agent promptly upon receipt. Any notices to the Administrative Agent or the Buyers should be delivered to the following addresses:
[______________], [___________________], Attention: _____________; Telephone: (___) ___- ____; Facsimile: (___) ___-____.
Very truly yours, | ||
[____________________] | ||
By: | ||
Name: | ||
Title: | ||
ACKNOWLEDGED: | ||
[__________________], | ||
as Servicer |
EXHIBIT C
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that, effective as of September [_], 2020, Home Point Financial Corporation (the “Seller”) hereby irrevocably constitutes and appoints TIAA, FSB, formerly known as EverBank, as administrative agent (the “Administrative Agent”) for the Buyers, 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 the Administrative Agent’s discretion:
(a) to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets (the “Repurchase Assets”) conveyed to the Administrative Agent under the Amended and Restated Master Repurchase Agreement dated as of September [_], 2020, between Seller, the Buyers and the Administrative Agent, and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due with respect to any other Repurchase Assets whenever payable;
(b) to pay or discharge taxes and Liens levied or placed on or threatened against the Repurchase Assets;
(c) to direct any party liable for any payment under any Repurchase Assets to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct;
(d) 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 Repurchase Assets;
(e) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase Assets;
(f) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Repurchase Assets or any proceeds thereof and to enforce any other right in respect of any Repurchase Assets;
(g) to defend any suit, action or proceeding brought against Seller with respect to any Repurchase Assets;
(h) to settle, compromise or adjust any suit, action or proceeding described in clause (g) above and, in connection therewith, to give such discharges or releases as the Administrative Agent may deem appropriate; and
(i) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Repurchase Assets as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and to do, at the Administrative Agent’s option and Seller’s expense, at any time, and from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Repurchase Assets and the Administrative Agent’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do; to effectuate a transfer of servicing with respect to the Repurchase Assets; and for the purpose of carrying out the transfer of servicing with respect to the Repurchase Assets and Mortgage Loans from Seller to a successor servicer appointed by the Administrative Agent in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives the Administrative Agent the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Repurchase Assets and Mortgage Loans, transferring the servicing of the Repurchase Assets and Mortgage Loans to a successor servicer appointed by the Administrative Agent in its sole discretion.
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.
Any capitalized term used but not defined herein shall have the meaning assigned to such term in the Agreement.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS OWN BEHALF AND ON BEHALF OF BUYER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and Seller’s seal to be affixed as of the date first above written.
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Title: |
STATE OF _______________ | ) | |
) ss.: | ||
COUNTY OF _____________ | ) |
On the ____ day of __________, 2020 before me, a Notary Public in and for said State, personally appeared _______________, known to me to be _______________ of Home Point Financial Corporation, the entity that executed the within instrument and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.
_____________________________
Notary Public
My Commission expires_________________________
Exh. C-4
Exhibit 10.5.1
TIAA BANK
Warehouse Finance
301 W. Bay Street
Jacksonville, FL 32202
December 15, 2020
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor MI 48105
Attention: Joseph Ruhlin
Email: [***]
Re: | First Amendment to the Amended and Restated Master Repurchase Agreement and Amended and Restated Pricing Letter (“ First Amendment”). |
Ladies and Gentlemen:
This First Amendment, effective as of December 15, 2020 (the “Amendment Effective Date”), amends that certain Amended and Restated Pricing Letter dated September 18, 2020, as amended, (the “Pricing Letter”), and that Amended and Restated Master Repurchase Agreement dated September 18, 2020, as amended (the “Repurchase Agreement”) by and between Home Point Financial Corporation (the “Seller), TIAA, FSB, formerly known as EverBank (as Administrative Agent for the Buyers and as “Buyer”) and Capital One, National Association (as “Buyer”). The Repurchase Agreement and Pricing Letter are sometimes collectively referred to herein as the, “Agreement”.
WHEREAS, Seller and Buyer have agreed to amend the Agreement as set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments.
(a) The following definition contained in the Repurchase Agreement is hereby amended and restated in their entirety as follows:
““Indebtedness” shall mean, with respect to any Person, total liabilities, as reported on that Person’s balance sheet and calculated in accordance with GAAP, excluding liabilities associated with Mortgage Loans serviced by Seller that are eligible for repurchase pursuant to Chapter 18 of the Ginnie Mae MBS Guide.”
SECTION 2. Defined Terms. Any terms capitalized but not otherwise defined herein should have the respective meanings set forth in the Agreement.
SECTION 3. Limited Effect. Except as amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this First Amendment need not be made
in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby.
SECTION 4. Representations. In order to induce Buyers to execute and deliver this First Amendment, Seller hereby represents and warrants to Buyers that as of the date hereof, except as otherwise expressly waived by Buyers in writing, Seller is in full compliance with all of the terms and conditions of the Facility Documents, including without limitation all of the representations and warranties and all of the affirmative and negative covenants, and no Default or Event of Default has occurred and is continuing under the Agreement.
SECTION 5. Governing Law. This First Amendment and any claim, controversy or dispute arising under or related to or in connection with this First Amendment, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties will be governed by the laws of the State of New York without regard to any conflicts of law principles other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, which shall govern.
SECTION 6. Counterparts. This First Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same agreement. This First Amendment, to the extent signed and delivered by facsimile or other electronic means, shall be treated in all manner and respects as an original agreement and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No signatory to this First Amendment shall raise the use of a facsimile machine or other electronic means to deliver a signature or the fact that any signature or agreement was transmitted or communicated through the use of a facsimile machine or other electronic means as a defense to the formation or enforceability of a contract and each such Person forever waives any such defense.
SECTION 7. Fees. There are no transaction, document or modification fees due and owing as a result of this First Amendment.
THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK
IN WITNESS WHEREOF, Seller and Buyer have caused this First Amendment to be executed and delivered by their duly authorized officers as of the Amendment Effective Date.
HOME POINT FINANCIAL CORPORATION
as Seller
By: | /s/ Joseph Ruhlin | |
Name: | Joseph Ruhlin | |
Title: | Treasurer |
TIAA, FSB, f/k/a EVERBANK
as Buyer
By: | /s/ Mark Bucior | |
Name: | Mark Bucior | |
Title: | Vice President |
CAPITAL ONE, NATIONAL ASSOCIATION
as Buyer
By: | /s/ Paul Spiridigliozzi | |
Name: | Paul Spiridigliozzi | |
Title: | Managing Director |
Signature Page to the First Amendment to the Pricing Letter – Home Point Financial Corporation
|
Exhibit 10.6
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.
MASTER REPURCHASE AGREEMENT
Between:
UBS BANK USA, as Buyer
and
HOME POINT FINANCIAL CORPORATION, as Seller
Dated as of October 28, 2015
TABLE OF CONTENTS
Page
SECTION 1. | APPLICABILITY | 1 |
SECTION 2. | DEFINITIONS | 1 |
SECTION 3. | INITIATION; TERMINATION | 21 |
SECTION 4. | MARGIN AMOUNT MAINTENANCE | 27 |
SECTION 5. | COLLECTIONS; INCOME PAYMENTS | 27 |
SECTION 6. | REQUIREMENT OF LAW | 28 |
SECTION 7. | TAXES | 29 |
SECTION 8. | SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY- IN-FACT | 33 |
SECTION 9. | PAYMENT, TRANSFER; ACCOUNTS | 34 |
SECTION 10. | REPRESENTATIONS | 37 |
SECTION 11. | COVENANTS | 42 |
SECTION 12. | EVENTS OF DEFAULT | 49 |
SECTION 13. | REMEDIES | 51 |
SECTION 14. | INDEMNIFICATION AND EXPENSES; RECOURSE | 54 |
SECTION 15. | SERVICING | 55 |
SECTION 16. | DUE DILIGENCE | 56 |
SECTION 17. | ASSIGNABILITY | 57 |
SECTION 18. | TRANSFER AND MAINTENANCE OF REGISTER | 58 |
SECTION 19. | HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS | 58 |
SECTION 20. | TAX TREATMENT | 59 |
SECTION 21. | SET-OFF | 59 |
SECTION 22. | TERMINABILITY | 59 |
SECTION 23. | NOTICES AND OTHER COMMUNICATIONS | 60 |
SECTION 24. | USE OF THE WAREHOUSE ELECTRONIC SYSTEM AND OTHER ELECTRONIC MEDIA | 61 |
SECTION 25. | ENTIRE AGREEMENT; SEVERABILITY; SINGLE AGREEMENT | 62 |
SECTION 26. | GOVERNING LAW | 63 |
SECTION 27. | SUBMISSION TO JURISDICTION; WAIVERS | 63 |
SECTION 28. | NO WAIVERS, ETC. | 64 |
SECTION 29. | NETTING | 64 |
SECTION 30. | CONFIDENTIALITY | 65 |
SECTION 31. | INTENT | 65 |
SECTION 32. | DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS | 66 |
SECTION 33. | CONFLICTS | 67 |
SECTION 34. | MISCELLANEOUS | 67 |
SECTION 35. | GENERAL INTERPRETIVE PRINCIPLES | 67 |
SCHEDULES AND EXHIBITS
SCHEDULE 1 | Representations and Warranties |
SCHEDULE 2 | Responsible Officers |
SCHEDULE 3 | Scheduled Indebtedness |
SCHEDULE 4 | Agency Approvals |
EXHIBIT A | Required Opinions |
EXHIBIT B | Form of Seller Party’s Officer’s Certificate |
EXHIBIT C | Form of Servicer Notice |
EXHIBIT D | Form of Trade Assignment |
EXHIBIT E | Form of Power of Attorney |
EXHIBIT F | Form of Tax Compliance Certificate |
EXHIBIT G | Form of Temporary Increase Request |
MASTER REPURCHASE AGREEMENT
This is a MASTER REPURCHASE AGREEMENT (the “Agreement”), dated as of October 28, 2015, between Home Point Financial Corporation, a New Jersey corporation (the “Seller”) and UBS Bank USA, a Utah corporation (the “Buyer”).
SECTION 1. APPLICABILITY
From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer Mortgage Loans on a servicing released basis against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans on a servicing released basis or Agency Securities backed by such Mortgage Loans on the Repurchase Date, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and shall be governed by this Agreement (including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder), unless otherwise agreed in writing. This Agreement is not a commitment by Buyer to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for Buyer to enter into Transactions with Seller. Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement. Any commitment to enter into Transactions shall be set forth in the Pricing Letter, and shall be subject to satisfaction of all terms and conditions of this Agreement.
The Pricing Letter is one of the Program Documents as defined below. The Pricing Letter is incorporated by reference into this Agreement and each Seller Party agrees to adhere to all terms, conditions and requirements of the Pricing Letter as incorporated herein. In the event of a conflict or inconsistency between this Agreement and the Pricing Letter, the terms of the Pricing Letter shall govern.
SECTION 2. DEFINITIONS
As used herein, the defined terms set forth below shall have the meanings set forth herein. Additionally, as used herein, the following terms shall have the meanings defined in the Uniform Commercial Code: accounts, chattel paper (including electronic chattel paper), goods (including inventory and equipment and any accessions thereto), instruments (including promissory notes), documents, investment property, general intangibles (including payment intangibles and software), and supporting obligations, products and proceeds.
“1934 Act” shall have the meaning set forth in Section 32 of the Agreement.
“Ability to Repay Rule” shall mean 12 CFR 1026.43(c), including all applicable official staff commentary.
“Accepted Servicing Practices” shall mean, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located.
“Affiliate” shall mean with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.
“Agency” shall mean Freddie Mac, Fannie Mae or Ginnie Mae, as applicable.
“Agency Approval” shall have the meaning set forth in Section 11(w) of the Agreement.
“Agency Certified Mortgage Loan” shall mean any Purchased Mortgage Loan that is subject to a Transaction hereunder and is part of a pool of Purchased Mortgage Loans certified by an Agency’s custodian to such Agency as eligible to be either (a) purchased by such Agency or (b) swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of the guidelines issued by the applicable Agency.
“Agency Security” shall mean a security issued in exchange for Purchased Mortgage Loans and backed by such Purchased Mortgage Loans that is (a) guaranteed by Ginnie Mae or (b) issued by Fannie Mae or Freddie Mac.
“Agency Security Issuance Failure” shall mean the failure of an Agency to cause the Delivery of an Agency Security in accordance with a Takeout Commitment.
“Aging Limit” shall have the meaning specified in the Pricing Letter.
“Agreement” shall mean this Master Repurchase Agreement between Buyer and each Seller Party, dated as of the date hereof, as the same may be further amended, restated, supplemented or otherwise modified in accordance with the terms of this Agreement.
“ALTA” shall mean American Land Title Association, or any successor thereto.
“Annual Financial Statement Date” shall have the meaning set forth in the Pricing Letter.
“Anti-Money Laundering Laws” shall have the meaning set forth in Section 10(x) of the Agreement.
“Application” shall mean the application delivered by Seller to Buyer in connection with Buyer’s approval of Seller for the program evidenced by the Agreement and any renewal thereof.
“Appraisal” shall mean an appraisal meeting the requirements of the representations and warranties set forth in paragraph (oo) on Schedule 1 hereto.
“Appraised Value” shall mean the value set forth in an Appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.
“Appropriate Federal Banking Agency” shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the United States Code, as amended from time to time.
“Approved CPA” shall mean a certified public accountant approved by Buyer in writing in its sole discretion.
“Approved Investor” shall mean any institution which has made a Takeout Commitment and has been approved by Buyer and not subsequently disapproved by Buyer.
“Approved Mortgage Product” shall mean each Mortgage Product approved by Buyer as identified in the Pricing Letter. Notwithstanding any reference to a Mortgage Product herein, such Mortgage Product shall not be an Approved Mortgage Product unless expressly identified as such in the Pricing Letter.
“Approved Underwriting Guidelines” shall mean the underwriting guidelines approved by Buyer in its sole discretion which may include the underwriting guidelines of Agency, the FHA, VA or RD.
“Asset Value” shall, with respect to each Eligible Mortgage Loan or Agency Security, as of any date of determination, have the meaning specified under the heading “Asset Value” on Schedule 1 to the Pricing Letter subject to modification pursuant to the terms below. Where a Purchased Asset may qualify for two or more Asset Values hereunder, unless otherwise expressly agreed to by the Buyer in writing, such Purchased Asset shall be assigned the lower Asset Value. Without limiting the generality of the foregoing, Seller acknowledges that:
(a) | the Asset Value of a Purchased Asset may be reduced to zero by Buyer if: |
(i)
|
such Purchased Asset is a Purchased Mortgage Loan that ceases to be an Eligible Mortgage Loan;
|
(ii)
|
such Mortgage Note related to a Purchased Asset that is a Purchased Mortgage Loan has been released from the possession of Buyer (other than to an Approved Investor
pursuant to a Bailee Letter) for a period in excess of ten (10) calendar days;
|
(iii)
|
such Purchased Asset is a Purchased Mortgage Loan that has been released from the possession of Buyer to an Approved Investor pursuant to a Bailee Letter for a period in
excess of twenty (20) calendar days;
|
(iv)
|
such Purchased Asset is a Purchased Mortgage Loan that is a Wet Loan for which the related Mortgage File has not been received by Buyer on or prior to the end of the
Aging Limit for such Wet Loan; or
|
(v)
|
such Purchased Asset is rejected by the related Approved Investor or there shall occur a Takeout Failure;
|
(vi)
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such Purchased Asset is not properly registered on the MERS® System in accordance with the Electronic Tracking Agreement within (x) with respect to Purchased Mortgage Loans other than Correspondent Mortgage Loans, five (5) Business Days of the related Purchase Date and (y) with respect to Purchased Mortgage Loans that are Correspondent Mortgage Loans, fifteen (15) Business Days of the related Purchase Date; |
(vii)
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such Purchased Asset is a Purchased Mortgage Loan that is a Delinquent Mortgage Loan;
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(viii)
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such Purchased Asset has been subject to Transactions hereunder for a period of greater than its applicable Aging Limit;
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(ix)
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such Purchased Asset is a Purchased Mortgage Loan that Buyer has determined in its sole discretion is not eligible for whole loan sale or securitization in a transaction
consistent with the prevailing sale and securitization industry with respect to substantially similar Mortgage Loans; or
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(x)
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such Purchased Asset contains a breach of a representation warranty made by Seller in this Agreement; and
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(b)
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the aggregate Asset Value of each Approved Mortgage Product shall not exceed the Concentration Limit for such applicable Approved Mortgage Product. If the aggregate Asset
Value for any Approved Mortgage Product exceeds the applicable Concentration Limit, Buyer may, in its sole discretion, reduce the value of any related Purchased Assets selected by Buyer to zero until the aggregate Asset Value for such Approved
Mortgage Product is less than or equal to the applicable Concentration Limit.
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“Assignment and Acceptance” shall have the meaning set forth in Section 17 of the Agreement.
“Assignment of Mortgage” shall mean an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage.
“Assignment of Proprietary Lease” shall mean the specific agreement creating a first lien on and pledge of the Co-op Shares and the appurtenant Proprietary Lease securing a Co-op Loan.
“Bailee Letter” shall have the meaning assigned to such term in the Custodial Agreement.
“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time.
“Beneficial Tax Owners” shall have the meaning set forth in Section 7(e)(v) of the Agreement.
“Business Day” shall mean a day other than (a) a Saturday or Sunday or (b) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the State of New York or the State of California.
“Buydown Amount” shall mean amounts held in the Operating Account to the extent not applied to Obligations under this Agreement.
“Buyer” shall mean UBS Bank USA, its successors in interest and assigns pursuant to Section 17 and, with respect to Section 7, its participants.
“Capitalized Mortgage Servicing Rights” shall have the meaning specified in the Pricing Letter.
“Change in Control” shall mean:
(a)
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any transaction or event as a result of which Stone Point Capital LLC ceases to own, directly or indirectly, 51% of the stock of Seller; or
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(b) | the sale, transfer, or other disposition of all or substantially all of any Seller Party’s assets (excluding any such action taken in connection with any securitization transaction); or |
(c) | the consummation of a merger or consolidation of a Seller Party with or into another entity or any other corporate reorganization (in one transaction or in a series of transactions), if 50% or more of the combined voting power of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not stockholders of Seller Party immediately prior to such merger, consolidation or other reorganization; or |
(d) | William Newman shall (i) no longer be employed by Seller or (ii) shall no longer be involved in the day to day operations of Seller; or |
(e) | there is a change in the majority of the board of directors of Seller during any twelve month period. |
“Closing Protection Letter” shall mean a letter of indemnification from a title insurer addressed to Seller and/or Buyer or for which Buyer is a third party beneficiary, with coverage that is customarily acceptable to Persons engaged in the origination of mortgage loans, identifying the Settlement Agent covered thereby and indemnifying Seller and/or Buyer (directly or as a third party beneficiary) against losses incurred due to malfeasance or fraud by the Settlement Agent or the failure of the Settlement Agent to follow the specific escrow instructions specified by Seller to the Settlement Agent or otherwise by Buyer with respect to the closing of the Mortgage Loan. The Closing Protection Letter shall be either with respect to the individual Mortgage Loan being purchased pursuant hereto or a blanket Closing Protection Letter which covers closings conducted by the Settlement Agent in the jurisdiction in which the closing of such Mortgage Loan takes place.
“CLTA” shall mean California Land Title Association, or any successor thereto.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Concentration Limit” shall have the meaning specified in the Pricing Letter.
“Confidential Information” shall have the meaning set forth in Section 11(u) of the Agreement.
“Confidential Terms” shall have the meaning set forth in Section 30 of the Agreement.
“Confirmation” shall mean an electronic confirmation of a Transaction delivered by Buyer to Seller in accordance with Section 3(c)(v) hereof.
“Conforming Mortgage Loan” shall mean a Mortgage Loan other than a HECM Loan, which is secured by a first lien, such Mortgage Loan (a) conforms to the requirements of an Agency for securitization or cash purchase and has (i) a minimum FICO score of [***], (ii) a DTI not more than [***] and (iii) a LTV not greater than [***] or (b) is eligible to be insured by FHA, guaranteed by VA or guaranteed by RD (excluding any Mortgage Loan which exceeds Agency guidelines for maximum general conventional loan amount) and (i) has a minimum FICO score of [***]; (ii) has a DTI not more than [***] and (iii) has a LTV not greater than [***].
“Co-op Corporation” shall mean, with respect to any Co-op Loan, the cooperative apartment corporation that holds legal title to the related Co-op Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
“Co-op Loan” shall mean a Mortgage Loan secured by the pledge of stock allocated to a Co-op Unit in a Co-op Corporation and collateral assignment of the related Proprietary Lease.
“Co-op Project” shall mean, with respect to any Co-op Loan, all real property and improvements thereto and rights therein and thereto owned by a Co-op Corporation including without limitation the land, separate dwelling units and all common elements.
“Co-op Shares” shall mean, with respect to any Co-op Loan, the shares of stock issued by a Co-op Corporation and allocated to a Co-op Unit and represented by a Stock Certificate.
“Co-op Unit” shall mean, with respect to any Co-op Loan, a specific unit in a Co-op Project.
“Correspondent Mortgage Loan” shall mean a Mortgage Loan originated by a third party originator and acquired by Seller in accordance with Seller’s correspondent Mortgage Loan program.
“Costs” shall have the meaning set forth in Section 14(a) of the Agreement.
“Credit File” shall mean with respect to each Mortgage Loan, the documents and instruments relating to the origination and administration of such Mortgage Loan.
“Custodial Account” shall have the meaning set forth in Section 5(b) of the Agreement.
“Custodial Agreement” shall mean that certain Custodial Agreement dated as of the date hereof, among Seller, Buyer and Custodian as the same may be amended from time to time.
“Custodial Loan Transmission” shall have the meaning set forth in the Custodial Agreement.
“Custodian” shall mean Deutsche Bank National Trust Company, or any successor thereto under the Custodial Agreement.
“DE Compare Ratio” shall mean the Two Year FHA Direct Endorsement Lender Compare Ratio, excluding streamline FHA refinancings, as made publicly available by HUD.
“Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Defaulting Party” shall have the meaning set forth in Section 29 of the Agreement.
“Defective Mortgage Loan” shall mean a Mortgage Loan (a) which is in foreclosure, has been foreclosed upon or has been converted to real estate owned property, (b) for which the Mortgagor is in bankruptcy, (c) that is not subject to a valid and binding Takeout Commitment, (d) that is subject to a Takeout Commitment with respect to which Seller or Approved Investor is in default, (e) that is rejected or excluded for any reason from the related Takeout Commitment by the Approved Investor, (f) that is not purchased by the Approved Investor in compliance with the Takeout Commitment at or prior to the expiration or termination of the Takeout Commitment for any reason, or (g) that is not repurchased by Seller in compliance with the provisions of Section 3(e).
“Delinquent Mortgage Loan” shall mean any Mortgage Loan as to which any Monthly Payment, or part thereof, remains unpaid for thirty (30) days or more following the original Due Date for such Monthly Payment.
“Delivery” shall mean (a) with respect to any Agency Security issued by Ginnie Mae, when Buyer is registered as the registered owner of such Agency Security on Ginnie Mae's central registry and (b) with respect to any Agency Security issued by Fannie Mae or Freddie Mac, the later to occur of (i) the issuance of such Agency Security and (ii) the transfer of all of the right, title and ownership interest in such Agency Security to Buyer or its designee. An Agency Security shall be deemed to be “Delivered” upon Delivery in accordance herewith.
“Depository” shall have the meaning set forth in Section 9(d) of the Agreement.
“Dollars” and “$” shall mean lawful money of the United States of America.
“DTI” shall mean with respect to any Mortgagor, the ratio of the Mortgagor’s average monthly debt obligations to the Mortgagor’s average monthly gross income.
“Due Date” shall mean the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
“E-Sign” shall mean the federal Electronic Signatures in Global and National Commerce Act, as amended from time to time.
“Effective Date” shall mean the date upon which the conditions precedent set forth in Section 3(a) shall have been satisfied.
“Electronic Record” shall mean “Record” and “Electronic Record,” both as defined in E-Sign, and shall include but not be limited to, recorded telephone conversations, fax copies or electronic transmissions, including without limitation, those involving the Warehouse Electronic System.
“Electronic Signature” shall have the meaning set forth in E-Sign.
“Electronic Tracking Agreement” shall mean an Electronic Tracking Agreement among Buyer, Seller, MERS and MERSCORP Holdings, Inc., as the same may be amended from time to time.
“Electronic Transactions” shall mean transactions conducted using Electronic Records and/or Electronic Signatures or fax copies of signatures.
“Eligible Mortgage Loan” shall mean a Purchased Asset that is a Purchased Mortgage Loan which (a) is an Approved Mortgage Product (unless otherwise approved by Buyer), (b) complies with the representations and warranties set forth on Schedule 1 hereto (assuming that they are made as of each date of determination) (unless otherwise approved by Buyer), (c) is not a Defective Mortgage Loan and (d) is not a Delinquent Mortgage Loan.
“ERISA” shall, with respect to any Person, mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and administrative rulings issued thereunder.
“ERISA Affiliate” shall, with respect to any Person, mean any Person which is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as a single employer described in Section 414 of the Code.
“Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“Event of Default” shall have the meaning set forth in Section 12 of the Agreement.
“Excess Proceeds” shall have the meaning set forth in Section 3(e) of the Agreement.
“Excluded Taxes” shall have the meaning set forth in Section 7(e) of the Agreement.
“Expenses” shall mean all present and future expenses incurred by or on behalf of Buyer in connection with this Agreement or any of the other Program Documents and any amendment, supplement or other modification or waiver related hereto or thereto, whether incurred heretofore or hereafter, which expenses shall include the cost of title, lien, judgment and other record searches; attorneys’ fees; and costs of preparing and recording any UCC financing statements or other filings necessary to perfect the security interest created hereby.
“Facility Termination Threshold” shall have the meaning specified in the Pricing Letter.
“Fannie Mae” shall mean the Federal National Mortgage Association, or any successor thereto.
“FATCA” shall have the meaning set forth in Section 7(a) of the Agreement.
“FDIA” shall have the meaning set forth in Section 31(d) of the Agreement.
“FDICIA” shall have the meaning set forth in Section 31(e) of the Agreement.
“FHA” shall mean the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
“FHA Loan” shall mean a Mortgage Loan which is the subject of an FHA Mortgage Insurance Certificate.
“FHA Mortgage Insurance Certificate” shall mean the certificate evidencing the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
“FHA Regulations” shall mean the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO” shall mean Fair Isaac & Co., or any successor thereto.
“Fidelity Insurance” shall mean insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Buyer.
“Financial Condition Covenants” shall mean the financial covenants of the Financial Reporting Party as set forth in Section 3 of the Pricing Letter.
“Financial Reporting Party” shall have the meaning specified in the Pricing Letter.
“Financial Statements” shall have the meaning set forth in Section 11(d) of the Agreement.
“Freddie Mac” shall mean Federal Home Loan Mortgage Corporation, or any successor thereto.
“GAAP” shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors.
“Ginnie Mae” shall mean the Government National Mortgage Association, or any successor thereto.
“GLB Act” shall have the meaning set forth in Section 11(u) of the Agreement.
“Governmental Authority” shall mean any nation or government, any state, county, municipality or other political subdivision thereof or any governmental body, agency, authority, department or commission (including, without limitation, any taxing authority) or any instrumentality or officer of any of the foregoing (including, without limitation, any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or indirectly owned by or controlled by the foregoing and with respect to any insured depository institution, including without limitation the Appropriate Federal Banking Agency.
“Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“HARP Mortgage Loan” shall mean a Mortgage Loan, which (a) is secured by a first lien, (b) conforms to the requirements of an Agency for securitization or cash purchase but does not otherwise meet all of the requirements of a Conforming Mortgage Loan as set forth in the Program Documents and (c) is a refinance Mortgage Loan originated in accordance with and pursuant to HARP 2.0.
“HARP 2.0” shall mean the Home Affordable Refinance Program 2.0.
“HECM Loan” shall mean a home equity conversion Mortgage Loan which is (a) secured by a first lien and (b) is eligible to be insured by FHA.
“Hedge Agreement” shall mean, with respect to any or all of the Purchased Assets, any short sale of a US Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement or Takeout Commitment, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller with a party and with terms, both acceptable to Buyer.
“High Balance Mortgage Loan” shall mean a Mortgage Loan other than a HECM Loan, which is secured by a first lien, and such Mortgage Loan (a) conforms to the requirements of an Agency for securitization or cash purchase; (b) has an original Mortgage Loan principal balance in excess of general conventional loan amounts for Conforming Mortgage Loans; (c) has an original Mortgage Loan principal balance that is less than the maximum high balance county limit for the county in which the related Mortgaged Property is located and (d) has a minimum FICO score of [***]
“High Cost Mortgage Loan” shall mean a Mortgage Loan (a) classified as a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; (b) classified as a “high cost,” “high risk,” “high rate,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees) or (c) having a percentage listed under the Indicative Loss Severity Column (the column that appears in the S&P Anti-Predatory Lending Law Update Table, included in the then-current S&P’s LEVELS® Glossary of Terms on Appendix E).
“HUD” shall mean the Department of Housing and Urban Development or any successor thereto.
“Income” shall mean, with respect to any Mortgage Loan at any time, any principal thereof then payable and all interest, dividends or other distributions payable thereon.
“Indebtedness” shall mean (a) all indebtedness for borrowed money or for the deferred purchase price of property or services and all obligations under leases which are or should be under GAAP, recorded as capital leases, in respect of which a person is directly or contingently liable as borrower, guarantor, endorser or otherwise, or in respect of which a person otherwise assures a creditor against loss, (b) all obligations for borrowed money or for the
deferred purchase price of a property or services secured by (or for which the holder has an existing right, contingent or otherwise, to be secured by) any lien upon property (including without limitation accounts receivable and contract rights) owned by a person, whether or not such person has assumed or become liable for the payment thereof, and (c) all other liabilities and obligations which would be classified in accordance with GAAP as liabilities on a balance sheet or to which reference should be made in footnotes thereto.
“Indemnified Party” shall have the meaning set forth in Section 14(a) of the Agreement.
“Insolvency Event” shall mean, for any Person:
(a)
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that such Person or any Affiliate shall discontinue or abandon operation of its business; or
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(b)
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that such Person or any Affiliate shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or
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(c)
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a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person or any Affiliate in
an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar Requirement of Law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person or any Affiliate, or for any substantial part of its property, or for the winding-up or liquidation of its affairs; or
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(d)
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the commencement by such Person or any Affiliate of a voluntary case under any applicable bankruptcy, insolvency or other similar Requirement of Law now or hereafter in
effect, or such Person’s or any Affiliate’s consent to the entry of an order for relief in an involuntary case under any such Requirement of Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit of creditors; or
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(e) | that such Person or any Affiliate shall become insolvent; or |
(f)
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if such Person or any Affiliate is a corporation, such Person or any Affiliate, or any of their Subsidiaries, shall take any corporate action in furtherance of, or the
action of which would result in any of the actions set forth in the preceding clauses (a), (b), (c), (d) or (e).
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“Insured Depository Institution” shall have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the United States Code, as amended from time to time.
“Jumbo Mortgage Loan” shall mean a Mortgage Loan which is secured by a first lien Mortgage that (a) has an original Mortgage Loan principal balance in excess of general Conforming Mortgage Loan limits but not in excess of [***] or such other amount agreed to by Buyer in its sole discretion, (b) has an original Mortgage Loan principal balance in excess
of the maximum high balance county limit for the county that the subject property is located in but not in excess of [***] or such other amount agreed to by Buyer in its sole discretion; (c) meets the eligibility requirements of Buyer as determined in its sole discretion and (d) has a Takeout Commitment from an Approved Investor which (i) shall include evidence of an underwriting approval, with no conditions outstanding to close the Mortgage Loan and a Takeout Price, purchase price commitment number and purchase price commitment expiration date for the Mortgage Loan or (ii) is in form and substance acceptable to Buyer in its sole discretion.
“Lien” shall mean any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance.
“Litigation Threshold” shall have the meaning specified in the Pricing Letter.
“LTV” shall mean (a) with respect to any Mortgage Loan other than a HARP Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan to the Appraised Value of the Mortgaged Property at origination and (b) with respect to any Mortgage Loan that is a HARP Mortgage Loan, the ratio of the original outstanding principal amount of the HARP Mortgage Loan to the Appraised Value of the Mortgaged Property as of the date such Mortgage Loan is funded as a refinanced Mortgage Loan under HARP 2.0.
“Maintenance Fee Rate” shall have the meaning specified in the Pricing Letter.
“Manufactured Home Mortgage Loans” shall have the meaning specified in paragraph (k) on Schedule 1.
“Margin Call” shall have the meaning specified in Section 4(b) of the Agreement.
“Margin Deficit” shall have the meaning specified in Section 4(b) of the Agreement.
“Market Value” shall mean, as of any date with respect to any Purchased Asset, the price at which such Purchased Asset could readily be sold as determined by Buyer in its sole discretion which price may be determined to be zero. Seller acknowledges that Buyer’s determination of Market Value is for the limited purpose of determining the value of the Purchased Assets for the purposes hereunder without the ability to perform customary Buyer’s due diligence and is not necessarily equivalent to a determination of the fair market value of the Purchased Assets achieved by obtaining competing bids in an orderly market in which the originator/servicer is not in default hereunder and the bidders have adequate opportunity to perform customary loan and servicing due diligence. Buyer’s determination of Market Value shall be conclusive upon the parties absent manifest error.
“Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations, financial condition or prospects of any Seller Party or any Affiliate, (b) the ability of any Seller Party or any Affiliate to perform its obligations under any of the Program Documents to which it is a party, (c) the validity or enforceability of any of the Program Documents, (d) the rights and remedies of Buyer or any Affiliate under any of the Program Documents, (e) the timely payment of any amounts payable under the Program Documents or (f) the Asset Value of the Purchased Assets taken as a whole.
“Maximum Aggregate Purchase Price” shall have the meaning set forth in the Pricing Letter.
“MERS” shall mean Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS System” shall mean the system of recording transfers of mortgages electronically maintained by MERS.
“Minimum Balance Requirement” shall have the meaning set forth in the Pricing Letter.
“Monthly Financial Statement Date” shall have the meaning set forth in the Pricing Letter.
“Monthly Payment” shall mean the scheduled monthly payment of principal and interest on a Mortgage Loan.
[***]
“Mortgage” shall mean each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a first lien on real property and other property and rights incidental thereto, unless such Mortgage is granted in connection with a Co-op Loan, in which case the first lien position is in the Co-op Shares and in the Proprietary Lease relating to such Co-op Shares.
“Mortgage File” shall mean, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in the Custodial Agreement.
“Mortgage Interest Rate” shall mean the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.
“Mortgage Loan” shall mean any first lien, one-to-four-family residential mortgage loan evidenced by a Mortgage Note and secured by a Mortgage, which Mortgage Loan is subject to a Transaction hereunder, which in no event shall include any mortgage loan which (a) is subject to Section 226.32 of Regulation Z or any similar state law (relating to high interest rate credit/lending transactions), (b) includes any single premium credit, life or accident and health insurance or disability insurance, or (c) is a High Cost Mortgage Loan.
“Mortgage Loan Schedule” shall mean with respect to any Transaction as of any date, a mortgage loan schedule in the form of a computer tape or other electronic medium generated by Seller and delivered to Buyer via the Warehouse Electronic System and to Custodian as specified in the Custodial Agreement, which provides information relating to the Purchased Assets in a format required by Buyer.
“Mortgage Note” shall mean the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
“Mortgage Product” shall have the meaning set forth in the Pricing Letter.
“Mortgaged Property” shall mean the real property or other Co-op Loan collateral securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder.
“Net Income” shall mean, for any Person for any period, the net income of such Person for such period as determined in accordance with GAAP.
“Non-Excluded Taxes” shall have the meaning set forth in Section 7(a) of the Agreement.
“Non-Exempt Buyer” shall have the meaning set forth in Section 7(e) of the Agreement.
“Nondefaulting Party” shall have the meaning set forth in Section 29 of the Agreement.
“Obligations” shall mean (a) any amounts owed by Seller to Buyer in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and all other fees or expenses which are payable hereunder or under any of the Program Documents and (b) all other obligations or amounts owed by Seller to Buyer or an Affiliate of Buyer under any other contract or agreement, in each case, whether such amounts or obligations owed are direct or indirect, absolute or contingent, matured or unmatured.
“Omnibus Account” shall mean the account established pursuant to Section 9(d) of the Agreement.
“Operating Account” shall mean the account established pursuant to Section 9(d) of the Agreement.
“Operating Account Rate” shall have the meaning specified in the Pricing Letter.
“Other Conforming Mortgage Loan” shall mean a Mortgage Loan, which is secured by a first lien, such Mortgage Loan either (a) conforms to the requirements of an Agency for securitization or cash purchase or (b) is eligible to be insured by FHA, guaranteed by VA or guaranteed by RD (excluding any Mortgage Loan which exceeds Agency guidelines for maximum general conventional loan amount) but does not otherwise meet all of the requirements of a Conforming Mortgage Loan as set forth herein.
“Other Taxes” shall have the meaning set forth in Section 7(b) of the Agreement.
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof).
“Plan” shall have the meaning set forth in Section 10(s) of the Agreement.
“PMI Policy” shall mean a policy of primary mortgage guaranty insurance issued by a Qualified Insurer, as required by this Agreement with respect to certain Mortgage Loans.
“Post-Default Rate” shall have the meaning set forth in the Pricing Letter.
“Power of Attorney” shall have the meaning set forth in Section 8(d) of the Agreement.
“Price Differential” shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction).
“Pricing Letter” shall mean that certain letter agreement among Buyer and each Seller Party, dated as of the date hereof, as the same may be amended from time to time.
“Pricing Rate” shall have the meaning set forth in the Pricing Letter.
“Program Documents” shall mean this Agreement, the Pricing Letter, the Custodial Agreement, the Electronic Tracking Agreement, the Application, a Servicer Notice, if any, and the Power of Attorney.
“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Lease” shall mean the lease on a Co-op Unit evidencing the possessory interest of the owner in the Co-op Shares in such Co-op Unit.
“Purchase Advice” shall mean a list of Purchased Assets that are requested to be repurchased in connection with a sale to an Approved Investor which shall set forth the loan identification numbers and related Takeout Price on a loan-by-loan and aggregate basis in an electronic format agreed to by Buyer.
“Purchase Advice Deficiency” shall have the meaning set forth in Section 3(e) of the Agreement.
“Purchase Date” shall mean the date on which Purchased Assets are transferred by Seller to Buyer or its designee.
“Purchase Price” shall have the meaning set forth in the Pricing Letter.
“Purchased Agency Security” shall mean each Agency Security that is subject to a Transaction and which has not been repurchased by Seller hereunder.
“Purchased Assets” shall mean the Purchased Mortgage Loans and the Purchased Agency Securities.
“Purchased Mortgage Loan” shall mean each Mortgage Loan sold by Seller to Buyer in a Transaction, as reflected in the Confirmation, and which has not been repurchased by Seller hereunder.
“QM Rule” shall mean 12 CFR 1026.43(e), including all applicable official staff commentary.
“Qualified Insurer” shall mean a mortgage guaranty insurance company duly authorized and licensed where required by law to transact mortgage guaranty insurance business and acceptable under the Approved Underwriting Guidelines.
“Qualified Mortgage” shall mean a Mortgage Loan that satisfies the criteria for a “qualified mortgage” as set forth in the QM Rule.
“RD” shall mean the United States Department of Agriculture Rural Development and any successor thereto.
“Recognition Agreement” shall mean, an agreement among a Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
“Records” shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller or any other person or entity with respect to a Purchased Asset. Records shall include the Mortgage Notes, any Mortgages, the Mortgage Files, the credit files related to the Purchased Asset and any other instruments necessary to document or service a Mortgage Loan.
“Register” shall have the meaning set forth in Section 18(b) of the Agreement.
“Regulations T, U and X” shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.
“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .21, .22, .24, .26, .27 or .28 of PBGC Reg. § 4043.
“Reporting Period” shall have the meaning provided in Section 10(s) of the Agreement.
“Repurchase Assets” shall have the meaning provided in Section 8(a) of the Agreement.
“Repurchase Date” shall mean the date on which Seller is to repurchase the Purchased Assets subject to a Transaction from Buyer which shall be the earliest of (i) the Termination Date or (ii) any date determined by application of the provisions of Sections 3(e) or 13.
“Repurchase Price” shall mean the price at which Purchased Assets are to be transferred from Buyer or its designee to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of (a) the Purchase Price; (b) any unpaid Price Differential plus (c) any Warehouse Fees or other fees due as of the date of such determination.
“Requirement of Law” shall mean as to any Person, the certificate of incorporation and bylaws or other organizational or governing documents of such Person, and any law, treaty, rule, regulation, procedure or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its Property is subject.
“Responsible Officer” shall mean an officer of Seller Party listed on Schedule 2 hereto, as such Schedule 2 may be amended from time to time.
“S&P” shall mean Standard & Poor’s Ratings Services, or any successor thereto.
“Sanctions” shall have the meaning set forth in Section 10(y) of the Agreement.
“Scheduled Indebtedness” shall have the meaning set forth in Section 10(n) of the Agreement.
“SEC” shall have the meaning set forth in Section 32 of the Agreement.
“Section 4402” shall have the meaning set forth in Section 29 of the Agreement.
“Seller” shall mean Home Point Financial Corporation, or any successor in interest thereto.
“Seller Party” shall mean each of Seller and the Guarantor, if any, and collectively, Seller Parties.
“Servicer” shall mean Seller, its successors in interest and assigns as approved by Buyer.
“Servicer Notice” shall mean to the extent applicable, the notice acknowledged by the third party Servicer substantially in the form of Exhibit C hereto.
“Servicing Agreement” shall have the meaning set forth in Section 15(b) of the Agreement.
“Servicing Rights” shall mean the rights of any Person to administer, service or subservice, the Purchased Assets or to possess related Records.
“Servicing Term” shall have the meaning set forth in Section 15(a) of the Agreement.
“Settlement Agent” shall mean a closing agent or a title insurance company or its agent which has not been disapproved by Buyer in its sole discretion.
“SIPA” shall have the meaning set forth in Section 32 of the Agreement.
“Stock Certificate” shall mean, with respect to a Co-op Loan, the certificates evidencing ownership of the Co-op Shares issued by the Co-op Corporation.
“Stock Power” shall mean, with respect to a Co-op Loan, an assignment of the Stock Certificate or an assignment of the Co-op Shares issued by the Co-op Corporation.
“Subservicer” shall have the meaning set forth in Section 15(b) of the Agreement.
“Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by 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.
“Successor Servicer” shall have the meaning set forth in Section 15(g) of the Agreement.
“Takeout Commitment” shall mean (a) with respect to Purchased Assets other than Jumbo Mortgage Loans and Purchased Agency Securities, either (i) a commitment of Seller to sell one or more such Purchased Assets to an Approved Investor (including an Agency) and the corresponding Approved Investor’s (including an Agency’s) commitment back to Seller to effectuate the foregoing, which commitment may be in the form of a “to be allocated” (TBA) commitment for which the related Purchased Assets are allocated or (ii) a commitment of an Agency to swap one or more Purchased Mortgage Loans for an Agency Security, which commitment may be in the form of a “to be allocated” (TBA) commitment for which the related Purchased Mortgage Loans are allocated; (b) with respect to Purchased Assets that are Jumbo Mortgage Loans, (i) a commitment of Seller to sell one or more such Purchased Assets to an Approved Investor and the corresponding Approved Investor’s commitment back to Seller to effectuate the foregoing, or (ii) evidence that the Seller is granted delegated authority by the Approved Investor, which in each instance meets the requirements set forth in the definition of
“Jumbo Mortgage Loan”; and (c) with respect to Purchased Agency Securities, a commitment of Seller to sell one or more Purchased Agency Securities to an Approved Investor and the corresponding Approved Investor’s commitment back to Seller to effectuate the foregoing; and in each case, the expiration date of such commitment has not occurred.
“Takeout Failure” shall mean, with respect to any Takeout Commitment (a) for the purchase of a Purchased Asset, the failure of the Approved Investor to purchase such Purchased Asset pursuant to such Takeout Commitment and (b) for the swap of a Purchased Mortgage Loan for an Agency Security backed by such Purchased Mortgage Loan, an Agency Security Issuance Failure.
“Takeout Price” shall mean the price at which the Approved Investor has agreed to purchase a Purchased Asset from the Seller.
“Tax Compliance Certificate” shall have the meaning set forth in Section 7(e)(ii) hereof.
“Taxes” shall have the meaning set forth in Section 7(a) of the Agreement.
“Temporary Increase” shall have the meaning set forth in Section 3(f) of the Agreement.
“Temporary Increase Request” shall mean a request by a Seller Party for a Temporary Increase in the form of Exhibit G hereto.
“Temporary Maximum Aggregate Purchase Price” shall have the meaning set forth in Section 3(f) of the Agreement.
“Termination Date” shall have the meaning set forth in the Pricing Letter.
“Third Party Participants” shall have the meaning set forth in Section 11(x) of the Agreement.
“Third Party Transaction Parties” shall have the meaning set forth in Section 16 of the Agreement.
“Trade Assignment” shall mean an assignment to Buyer of a forward trade between an Approved Investor and Seller with respect to one or more Purchased Agency Securities substantially in the form of Exhibit D hereto.
“Transaction” shall have the meaning specified in Section 1 of the Agreement.
“Transaction Request” shall mean a request from Seller to Buyer to enter into a Transaction, which shall be submitted electronically through the Warehouse Electronic System.
“Trust Receipt” shall mean the “Master Trust Receipt” as defined in the Custodial Agreement.
“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Repurchase Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of the Agreement relating to such perfection or effect of perfection or non-perfection.
“U.S. Treasury Regulations” shall mean regulations promulgated by the U.S. Department of the Treasury under the Code.
“VA” shall mean the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.
“Warehouse Accounts” shall have the meaning set forth in Section 9(c) of the Agreement.
“Warehouse Electronic System” shall mean the system utilized by Buyer either directly, or through its vendors, and which may be accessed by Seller in connection with delivering and obtaining information and requests in connection with the Program Documents.
“Warehouse Fees” shall have the meaning set forth in the Pricing Letter.
“Wet Delivery Deadline” shall have the meaning set forth in the Pricing Letter.
“Wet Loan” shall mean a Mortgage Loan which Seller is selling to Buyer simultaneously with the origination thereof.
“Wiring Instructions” shall mean the wiring instructions of Buyer and Seller as provided to the other party in writing, as applicable.
SECTION 3. INITIATION; TERMINATION
(a)
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Conditions Precedent to Initial Transaction. Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to
or concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from Seller any fees and expenses payable hereunder, and all of the following documents, each of which shall be satisfactory to Buyer
and its counsel in form and substance:
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(i)
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Program Documents. The Program Documents duly executed and delivered by the parties thereto.
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(ii)
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Officer’s Certificate. An officer’s certificate of each Seller Party substantially in the form of Exhibit B attached hereto which shall include (A) certified copies of the organizational documents of each Seller Party and (B) a certified copy of a good standing certificate from the jurisdiction of organization of each Seller Party, dated as of no earlier than the date ten (10) Business Days prior to the Purchase Date with respect to the initial Transaction hereunder. |
(iii) |
Opinion of Counsel. An opinion of each Seller Party’s counsel addressing those matters as set forth on Exhibit A attached hereto.
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(iv) | Security Interest. Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect Buyer’s interest in the Purchased Assets and other Repurchase Assets have been taken, including, without limitation, UCC searches and duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1. |
(v)
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Insurance. Evidence that Seller has added endorsements for theft of warehouse lender money and collateral, naming Buyer as a loss payee under its Fidelity
Insurance and as a direct loss payee/right of action under its errors and omissions insurance policy.
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(vi)
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Warehouse Fees. Payment of any Warehouse Fees and other costs and expenses due and payable to Buyer hereunder.
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(vii)
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Other Documents. Such other documents as Buyer may reasonably request, in form and substance reasonably acceptable to Buyer.
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(b)
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Conditions Precedent to all Transactions. Upon satisfaction of the conditions set forth in this Section 3(b), Buyer may enter into a Transaction with Seller.
Buyer’s entering into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect
thereto to the intended use thereof:
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(i)
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Due Diligence Review.
Without limiting the generality of Section 16 of the Agreement, Buyer shall have completed, to its satisfaction, its preliminary due diligence review of the related Mortgage Loans and Seller Parties.
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(ii)
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No Default. No Default or Event of Default shall have occurred and be continuing under the Program Documents.
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(iii)
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Representations and Warranties. Both immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations
and warranties made by each Seller Party in Section 10 of the Agreement, shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any
such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
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(iv)
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Maximum Aggregate Purchase Price. After giving effect to the requested Transaction, the aggregate outstanding Purchase Price for all Purchased Assets subject to
then outstanding Transactions under this Agreement shall not exceed the Maximum Aggregate Purchase Price.
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(v)
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No Margin Deficit. After giving effect to the requested Transaction, the Asset Value of all Purchased Assets exceeds the aggregate Purchase Price for such
Transactions.
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(vi)
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Transaction Request. Seller shall have delivered to Buyer a Mortgage Loan Schedule with respect to all Mortgage Loans subject to the requested Transaction pursuant
to the timeframes set forth in Section 3(c) hereof.
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(vii)
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Delivery of Mortgage File. Seller shall have delivered to Custodian the Mortgage File with respect to each Mortgage Loan (other than a Wet Loan) subject to the
requested Transaction in accordance with the timeframes set forth in the Custodial Agreement.
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(viii)
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Delivery of Trust Receipt. Custodian shall have delivered to Buyer, in accordance with the timeframes set forth in the Custodial Agreement, a Trust Receipt and a
Custodial Loan Transmission with respect to each Mortgage Loan subject to the requested Transaction.
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(ix)
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Release Documentation. If requested by Buyer, Seller shall have delivered to Buyer (a) with respect to a Correspondent Mortgage Loan, a bailee letter from the
third party originator or its designee; (b) with respect to a Mortgage Loan that has been subject to a third party warehouse agreement (as approved by Buyer), a release from the related warehouse lender and (c) with respect a Mortgage Loan that
Buyer is purchasing directly from Seller (as approved by Buyer), a release from Seller, in each case in form and substance acceptable to Buyer in its sole discretion.
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(x)
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Fees and Expenses. Buyer shall have received all fees and expenses as contemplated by Sections 9 and 14(b) which amounts, at Buyer’s option, may be withheld from
the proceeds remitted by Buyer to Seller pursuant to any Transaction hereunder; and
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(xi)
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No Violation of Law. If any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of incorporation and bylaws or other organizational or governing documents) or any change in the interpretation or application of any Requirement of Law thereof or compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof shall result in Buyer’s entering into any Transaction to be a violation of such Requirement of Law. |
(xii)
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No Material Adverse Change. None of the following shall have occurred and/or be continuing:
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(A)
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an event or events shall have occurred in the good faith determination of Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Mortgage Loans through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or |
(B)
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an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by mortgage loans or an event or events shall
have occurred resulting in Buyer not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events; or
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(C)
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there shall have occurred a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement; or |
(D)
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there shall have occurred (i) a material change in financial markets, an outbreak or escalation of hostilities or a material change in national or international
political, financial or economic conditions; (ii) a general suspension of trading on major stock exchanges; or (iii) a disruption in or moratorium on commercial banking activities or securities settlement services.
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(xiii) | Maintenance of DE Compare Ratio. Seller’s DE Compare Ratio as of the most recent calendar quarter has not exceeded [***] |
Each Transaction Request delivered by Seller hereunder shall constitute a certification by Seller that all the conditions set forth in this Section 3(b) (other than clause (xii) hereof) have been satisfied (both as of the date of such notice or request and as of Purchase Date).
(c) | Initiation. |
(i) |
Throughout each Business Day, Seller may request that Buyer enter into Transactions hereunder by delivering a Mortgage Loan Schedule with respect to all Mortgage Loans
subject to the requested Transaction on or prior to (A) with respect to Wet Loans, [***] (New York City time) on the requested Purchase Date and (B) with respect to Mortgage Loans other than Wet Loans, [***] (New York City time) on the Business
Day prior to the requested Purchase Date.
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(ii) | Seller shall deliver to Custodian the Mortgage File with respect to each Mortgage Loan subject to the requested Transaction (A) which is not a Wet Loan, in accordance with the timeframes set forth in the Custodial Agreement, and (B) with respect to each Wet Loan, on or prior to the Wet Delivery Deadline. |
(iii) | Following receipt of such request, Buyer shall agree to enter into such requested Transaction so long as the conditions set forth herein are satisfied and after giving effect to the requested Transaction the aggregate outstanding Purchase Price does not exceed the Maximum Committed Purchase Price, in which case Buyer shall remit the Purchase Price pursuant to the Seller’s Wiring Instructions. |
(iv) |
Buyer’s remittance of the Purchase Price in connection with the Transaction and Seller’s acceptance thereof, will constitute the parties agreement to enter into such
Transaction. Upon remittance of the Purchase Price to Seller, Seller hereby grants, assigns, conveys and transfers all rights in and to the Purchased Assets evidenced on the related Mortgage Loan Schedule submitted through the Warehouse
Electronic System.
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(v) |
Buyer shall confirm the terms of each Transaction by posting a Confirmation on the Warehouse Electronic System by the end of the day on each Purchase Date. Each
Confirmation together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby unless objected to in writing by Seller no more than two (2) Business Days after the date such Confirmation was posted on
the Warehouse Electronic System or unless a corrected Confirmation is posted by Buyer; provided that Buyer’s failure to post a Confirmation shall not affect the obligations of Seller under any Transaction. An objection sent by Seller must state
specifically that such writing which is an objection, must specify the provision(s) being objected to by Seller, must set forth such provision(s) in the manner that Seller believes they should be stated, and must be received by Buyer no more
than two (2) Business Days after the Confirmation was posted on the Warehouse Electronic System.
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(vi) |
The Repurchase Date for each Transaction shall not be later than the Termination Date.
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(d)
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Issuance of Agency Securities. Upon the written approval of Buyer and subject to (x) Seller’s prompt delivery to the applicable Agency any and all documents
necessary to enable such Agency to make Delivery to Buyer or its designee of an Agency Security backed by the related Purchased Mortgage Loans and (y) receipt of the applicable Trade Assignment, Seller may cause Purchased Mortgage Loans to be
pooled for the purpose of backing an Agency Security. At such time as an Agency Security backed by a pool of Purchased Mortgage Loans is delivered to Buyer by the applicable Agency, (a) such Agency Security shall immediately and with no further
action on the part of Buyer, Seller or Custodian become subject to a Transaction hereunder and (b) the pool of Purchased Mortgage Loans backing such Agency Security shall immediately and with no further action on the part of Buyer, Seller or
Custodian no longer be subject to a Transaction hereunder and Buyer shall have been deemed to release any ownership and/or security interest it has in such pool of Purchased Mortgage Loans.
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(e) | Repurchase; Purchase by an Approved Investor. |
(i) |
Seller may repurchase Purchased Assets without penalty or premium on any date by remitting to Buyer the applicable Repurchase Price pursuant to the Buyer’s Wiring
Instructions.
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(ii)
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Any repurchase of Purchased Assets may occur simultaneously with a sale of the Purchased Asset to an Approved Investor subject to the following procedures:
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(A)
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Seller shall instruct the Approved Investor to remit directly to Buyer pursuant to Buyer’s Wiring Instructions no later than [***] (New YorkCity time) on any Business Day the Takeout Price in an amount equal to the Repurchase Price for such Purchased Asset. |
(B)
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Simultaneously, Seller shall deliver to Buyer electronically the related Purchase Advice. The Takeout Price received by Buyer must equal the amount set forth on the
Purchase Advice.
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(C)
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The Takeout Price shall be applied to reduce the Repurchase Price in respect of the Purchased Assets listed on the Purchase Advice. In the event the Takeout Price is less
than the Repurchase Price, the Buyer shall withdraw funds from the Operating Account and Warehouse Accounts such that no deficiency exists. For the avoidance of doubt, Buyer shall not release its interests in any Purchased Asset until such time
as it receives the Repurchase Price in full.
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(D)
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In the event Buyer receives the Takeout Price on or prior to [***] (New York City time) and either (x) no Purchase Advice is received or (y) the Takeout Price does not
match the amount on the Purchase Advice (a “Purchase Advice Deficiency”), then Buyer shall retain the Takeout Price and the related Purchased Assets shall not be released and the Transactions shall continue to accrue Price Differential
under this Agreement until the Purchase Advice Deficiency is remedied. In the event the Takeout Price matches the amount set forth in the Purchase Advice but are in excess of the Repurchase Price (such amount, the “Excess Proceeds”)
provided that no Default or Event of Default exists, Buyer shall remit such Excess Proceeds to the Operating Account or as otherwise agreed to by Buyer and Seller.
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(iii)
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On the Repurchase Date, termination of the Transaction will be effected by reassignment to Seller or its designee of the Purchased Assets against the simultaneous
transfer of the Repurchase Price as described in this Section 3(e). Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Asset.
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(f)
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Request for Temporary Increase. A Seller Party may request a temporary increase of the Maximum Aggregate Purchase Price (a “Temporary Increase”) by
submitting to Buyer an executed Temporary Increase Request, setting forth the requested increased Maximum Aggregate Purchase Price (such increased amount, the “Temporary Maximum Aggregate Purchase Price”) and the effective date and
expiration date of such Temporary Increase. Buyer may from time to time, in its sole and absolute discretion, consent to such Temporary Increase, by returning to such Seller Party a countersigned Temporary Increase Request. At any time that a
Temporary Increase is in effect, the Maximum Aggregate Purchase Price shall equal the Temporary Maximum Aggregate Purchase Price for all purposes of this Agreement and all calculations and provisions relating to the Maximum Aggregate Purchase
Price shall refer to the Temporary Maximum Aggregate Purchase Price. Upon the termination of a Temporary Increase, Seller shall repurchase Purchased Assets in order to reduce the aggregate outstanding Purchase Price of all Transactions to the
Maximum Aggregate Purchase Price (as reduced by the termination of such Temporary Increase).
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SECTION 4. MARGIN AMOUNT MAINTENANCE
(a)
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Buyer shall determine the Market Value of each Purchased Asset at such intervals as determined by Buyer in its sole discretion.
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(b)
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If at any time the aggregate Asset Values of Purchased Assets then subject to Transactions are less than the aggregate Purchase Prices for such Purchased Assets (a “Margin
Deficit”), then Buyer may by notice to Seller (as such notice is more particularly set forth below, a “Margin Call”), require Seller to transfer to Buyer or its designee cash in the amount of the Margin Deficit.
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(c)
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Notice delivered pursuant to Section 4(b) may be given by any written or electronic means. Any notice given before [***] (New York City time) on a Business Day
shall be met, and the related Margin Call satisfied, no later than [***] (New York City time) on such Business Day; notice given after [***] (New York City time) on a Business Day shall be met, and the related Margin Call
satisfied, no later than [***] (New York City time) on the following Business Day.
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(d)
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The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is
subject or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by
law or in any way create additional rights for Seller.
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(e)
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Any cash transferred to Buyer pursuant to Section 4(b) above shall be held as unsegregated cash margin and collateral for all Obligations under this Agreement.
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SECTION 5. COLLECTIONS; INCOME PAYMENTS
(a)
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On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential shall be
settled in cash on each related Repurchase Date. To the extent a Purchased Asset is subject to a Transaction for a period in excess of [***], at Buyer’s sole option, Price Differential shall be settled in cash on such date and thereafter as
more frequently requested by Buyer.
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(b)
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Upon request of Buyer, Seller shall establish and maintain a segregated time or demand deposit account for the benefit of Buyer (the “Custodial Account”) with
Buyer, UBS AG Stamford Branch or an Insured Depository Institution acceptable to Buyer in its sole discretion and shall deposit into the Custodial Account, within two (2) Business Days of receipt, all Income received with respect to each
Mortgage Loan sold hereunder. Seller shall cause all Income received with respect to the Purchased Assets by any Servicer to be remitted directly to the Custodial Account. Under no circumstances shall Seller deposit any of its own funds into
the Custodial Account or otherwise commingle its own funds with funds belonging to Buyer as owner of any Mortgage Loans. Seller shall name the Custodial Account “Home Point Financial Corporation in trust for the benefit of UBS Bank USA.”
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(c)
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All Income received with respect to a Mortgage Loan purchased hereunder, whether or not deposited in the Custodial Account, shall be held in trust for the exclusive
benefit of Buyer as the owner of such Mortgage Loan.
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(d)
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Following an Event of Default, Seller shall remit to Buyer all Income and any funds in the Custodial Account as instructed by Buyer in writing. Such remittances shall be
by wire transfer in accordance with wire transfer instructions previously given to Seller by Buyer.
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(e)
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Seller authorizes Buyer to withdraw any Income otherwise due Buyer hereunder from any of the Warehouse Accounts and the Operating Account.
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(f) |
Seller shall not change the identity or location of the Custodial Account. Seller shall from time to time, at its own cost and expense, execute such directions to Buyer,
and other papers, documents or instruments as may be reasonably requested by Buyer.
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(g) |
If Buyer so requests, Seller shall promptly notify Buyer of each deposit in the Custodial Account, and each withdrawal from the Custodial Account, made by it with respect
to Mortgage Loans owned by Buyer and serviced by Seller. Seller shall also promptly deliver to Buyer photocopies of all periodic bank statements and other records relating to the Custodial Account as Buyer may from time to time request.
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(h)
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The amount required to be paid or remitted by Seller to Buyer, not made when due shall bear interest from the due date until the remittance, transfer or payment is made,
payable by Seller, at the lesser of the Post-Default Rate or the maximum rate of interest permitted by law. If there is no maximum rate of interest specified by applicable law, interest on such sums shall accrue at the Post-Default Rate.
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SECTION 6. REQUIREMENT OF LAW
(a)
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If any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of incorporation and bylaws or other organizational or governing
documents) including those regarding capital adequacy or liquidity, or any change in the interpretation or application of any Requirement of Law thereof or compliance by Buyer with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to the date hereof:
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(i)
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shall subject Buyer to any Tax or increased Tax of any kind whatsoever or change the basis of taxation of payments to Buyer (other than Excluded Taxes and Taxes for which
Seller is required to indemnify Buyer under Section 7 below);
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(ii)
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shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or
for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of Buyer;
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(iii)
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shall impose on Buyer or the London interbank market any other condition, cost or expense (other than Taxes) affecting the Transaction, this Agreement or any interest
therein;
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and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, or shall have the effect of reducing Buyer’s rate of return then, in any such case, Seller shall promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such increased cost or reduced amount receivable on an after-tax basis.
(b)
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If Buyer shall have determined that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of
incorporation and by-laws or other organizational or governing documents) regarding capital adequacy or liquidity requirements or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any
request or directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on
Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer to be material, then from time to time, Seller shall promptly pay to Buyer such additional amount or amounts as will compensate Buyer for such reduction;
provided, that Seller shall have no obligation to pay Buyer for any amounts incurred in connection with such adoption or change in Requirement of Law which was incurred by Buyer in excess of nine months prior to such date of determination
(except that if the adoption or change in Requirement of Law giving rise to such reduction is retroactive, then the nine-month period shall be extended to include the period of retroactive effect thereof).
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(c)
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If Buyer becomes entitled to claim any additional amounts pursuant to this Section 6, it shall promptly notify Seller of the event by reason of which it has become so
entitled, provided that other than with respect to the nine-month limitation referenced above, a failure or delay on the part of Buyer to demand compensation pursuant to this Section shall not constitute a waiver of Buyer’s right to demand such
compensation. A certificate as to any additional amounts payable pursuant to this Section 6 submitted by Buyer to Seller shall be conclusive in the absence of manifest error. Seller shall pay Buyer the amount shown as due on any such
certificate within 10 days after receipt thereof.
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SECTION 7. TAXES.
(a)
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Any and all payments by or on behalf of any Seller Party under or in respect of this Agreement or any other Program Documents to which any Seller Party is a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes, levies, imposts, duties, deductions, assessments, fees, charges or withholdings (including backup withholdings), and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority (collectively, “Taxes”), unless required by law. If any Person shall be required under any applicable Requirement of Law to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Program Documents to Buyer (including, for purposes of Section 6 and this Section 7, any agent, assignee, successor or participant), (i) Seller Party shall make all such deductions and withholdings in respect of Taxes, (ii) Seller Party shall timely pay the full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance with any Requirement of Law, and (iii) the sum payable by Seller Party shall be increased as may be necessary so that after Seller Party has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable under this Section 7) such Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of Non-Excluded Taxes. For purposes of this Agreement the term “Non-Excluded Taxes” are Taxes other than, in the case of a Buyer, (i) Taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the jurisdiction under the laws of which such Buyer is organized or of its applicable lending office, or any political subdivision thereof, unless such Taxes are imposed as a result of such Buyer having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Program Documents (in which case such Taxes will be treated as Non-Excluded Taxes), and (ii) Taxes imposed as a result of its failure to comply with the requirements of Sections 1471 through 1474 of the Code (as in effect on the date hereof) and any U.S. Treasury Regulations promulgated thereunder (“FATCA”). |
(b)
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In addition, each Seller Party hereby agrees to timely pay or, at the Buyer’s option, timely reimburse it for payment of, any present or future stamp, court, recording,
documentary, excise, filing, intangible, property or value-added taxes, or similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Program Document or from the execution, delivery,
enforcement or registration of, any performance, receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Program Document (collectively, “Other Taxes”).
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(c)
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Each Seller Party hereby agrees to indemnify Buyer (including its Beneficial Tax Owners) for, and to hold it harmless against, the full amount of Non-Excluded Taxes and
Other Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 7 imposed on, paid, deducted or withheld by such Buyer (or any Beneficial Tax Owners thereof) and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. A certificate as to the amount of such Taxes or liabilities delivered to the Seller Party by Buyer shall be conclusive absent manifest error. The
indemnity by each Seller Party provided for in this Section 7(c) shall apply and be made whether or not the Non-Excluded Taxes, Other Taxes or any other liabilities for which indemnification hereunder is sought have been correctly or legally
asserted. Amounts payable by a Seller Party under the indemnity set forth in this Section 7(c) shall be paid within ten (10) days from the date on which Buyer makes written demand therefor.
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(d)
|
Within thirty (30) days of request of Buyer, Seller Party (or any Person making such payment on behalf of Seller Party) shall furnish to Buyer for its own account a certified copy of the original official receipt evidencing payment thereof. |
(e)
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For purposes of this Section 7(e), the terms “United States” and “United States person” shall have the meanings specified in Section 7701 of the Code. Each Buyer
(including for avoidance of doubt any assignee, successor or participant) that either (i) is not organized under the laws of the United States, any State thereof, or the District of Columbia or (ii) whose name does not include “Incorporated,” “Inc.,” “Corporation,” “Corp.,” “P.C.,” “insurance company,” or “assurance company” (a “Non-Exempt Buyer”) shall deliver or cause to be delivered to Seller
the following properly completed and duly executed documents:
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(i)
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in the case of a Non-Exempt Buyer that is not a United States person or is a disregarded entity for U.S. federal income tax purposes owned by a person that is not a
United States person, a complete and executed (x) U.S. Internal Revenue Service Form W-8BEN with Part II completed in which such Buyer claims the benefits of a tax treaty with the United States providing for a zero or reduced rate of
withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor forms thereto); or
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(ii)
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in the case of a Non-Exempt Buyer that is an individual, (x) for non-United States persons, a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any
successor forms thereto) and a certificate substantially in the form of Exhibit F (a “Tax Compliance Certificate”) or (y) for United States persons, a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor
forms thereto); or
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(iii)
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in the case of a Non-Exempt Buyer that is organized under the laws of the United States, any State thereof, or the District of Columbia and that is not a disregarded
entity for U.S. federal income tax purposes owned by a person that is not a United States person, a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto); or
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(iv)
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in the case of a Non-Exempt Buyer that (x) is not organized under the laws of the United States, any State thereof, or the District of Columbia and (y) is treated as a
corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a Tax Compliance Certificate; or
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(v)
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in the case of a Non-Exempt Buyer that (A) is treated as a partnership or other non-corporate entity, and (B) is not organized under the laws of the United States, any
State thereof, or the District of Columbia, (x)(i) a complete and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments) and (ii) a Tax Compliance Certificate, and
(y) in the case of a non-withholding foreign partnership or trust, without duplication, with respect to each of its beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or
entities that are treated as corporations for U.S. federal income tax purposes (all such owners, “Beneficial Tax Owners”), the documents that would be provided by each such Beneficial Tax Owner if such Beneficial Tax Owner were Buyer; or
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(vi)
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in the case of a Non-Exempt Buyer that is disregarded for U.S. federal income tax purposes, the document that would be required by clause (i), (ii), (iii), (iv), (v),
(vii) and/or this clause (vi) of this Section 7(e) with respect to its Beneficial Tax Owner if such Beneficial Tax Owner were Buyer; or
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(vii)
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in the case of a Non-Exempt Buyer that (A) is not a United States person and (B) is acting in the capacity of an “intermediary” (as defined in U.S. Treasury Regulations),
(x)(i) a U.S. Internal Revenue Service Form W-8IMY (or any successor form thereto) (including all required documents and attachments) and (ii) a Tax Compliance Certificate, and (y) if the intermediary is a “non-qualified intermediary” (as
defined in U.S. Treasury Regulations), from each person upon whose behalf the “non-qualified intermediary” is acting the documents that would be required by clause (i), (ii), (iii), (iv), (v), (vi), and/or this clause (vii) with respect to each
such person if each such person were Buyer; and
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(viii)
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if a payment made to a Buyer under this Agreement or any other Program Documents would be subject to U.S. federal withholding Tax imposed by FATCA if such Buyer were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Buyer shall deliver to Seller at the time or times prescribed by law and at such time
or times reasonably requested by Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for a
Seller Party to comply with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (viii), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.
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If Buyer provides a form pursuant to Section 7(e)(i)(x) and the form provided by the Buyer at the time such Buyer first becomes a party to this Agreement or, with respect to a grant of a participation, the effective date thereof, indicates a United States interest withholding tax rate under the tax treaty in excess of zero, withholding tax at such rate shall be treated as Taxes other than “Non-Excluded Taxes” (“Excluded Taxes”) and shall not qualify as Non-Excluded Taxes unless and until such Buyer provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered Excluded Taxes solely for the periods governed by such form. If, however, on the date a Person becomes an assignee, successor or participant to this Agreement, the Buyer transferor was entitled to indemnification or additional amounts under this Section 7, then the Buyer assignee, successor or participant shall be entitled to indemnification or additional amounts to the extent that the Buyer transferor was entitled to such indemnification or additional amounts for Non-Excluded Taxes, and the Buyer assignee, successor or participant shall be entitled to additional indemnification or additional amounts for any other or additional Non-Excluded Taxes.
(f)
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For any period with respect to which a Buyer has failed to provide Seller with the appropriate form, certificate or other document described in Section 7(e) (other than if such failure is due to a change in any Requirement of Law, or in the interpretation or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided), such Buyer shall not be entitled to indemnification or additional amounts under subsection (a) or (c) of this Section 7 with respect to Non-Excluded Taxes imposed by the United States by reason of such failure; provided, however, that should a Buyer become subject to Non-Excluded Taxes because of its failure to deliver a form, certificate or other document required hereunder, Seller shall take such steps as such Buyer shall reasonably request, to assist such Buyer in recovering such Non-Excluded Taxes. |
(g)
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Without prejudice to the survival of any other agreement of any Seller Party hereunder, the agreements and obligations of each Seller Party contained in this Section 7
shall survive the termination of this Agreement and the other Program Documents. Nothing contained in Section 6 or this Section 7 shall require Buyer to complete, execute or make available any of its Tax returns or any other information that it
deems to be confidential or proprietary, or whose completion, execution or submission would, in Buyer’s judgment, materially prejudice Buyer’s legal or commercial position.
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SECTION 8. SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT
(a)
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Security Interest. On each Purchase Date, Seller hereby sells, assigns and conveys all rights and interests in the Purchased Assets identified on the related
Mortgage Loan Schedule and the Repurchase Assets related thereto. Although the parties intend that all Transactions hereunder be sales and purchases and not loans (other than as set forth in Section 20 for U.S. tax purposes), in the event any
such Transactions are deemed to be loans, and in any event Seller hereby pledges to Buyer as security for the performance by Seller of its Obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security
interest in:
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(i) | the Purchased Assets; |
(ii) | the Records related to the Purchased Assets; |
(iii) | the Program Documents (to the extent such Program Documents and Seller’s right thereunder relate to the Purchased Assets); |
(iv) | any Property relating to any Purchased Asset or the related Mortgaged Property; |
(v) | any Takeout Commitments relating to any Purchased Assets; |
(vi) | any Closing Protection Letter, escrow letter or settlement agreement relating to any Purchased Asset; |
(vii) | any Servicing Rights relating to any Purchased Asset; |
(viii) | all insurance policies and insurance proceeds relating to any Purchased Asset or the related Mortgaged Property, including but not limited to any payments or proceeds under any related primary insurance or hazard insurance; |
(ix) | any Income relating to any Purchased Asset; |
(x) | the Custodial Account; |
(xi) | the Warehouse Accounts; |
(xii) | the Operating Account; |
(xiii) | any other contract rights, accounts (including any interest of Seller in escrow accounts) and any other payments, rights to payment (including payments of interest or finance charges) and general intangibles to the extent that the foregoing relates to any Purchased Asset; |
(xiv) | any other assets relating to the Purchased Assets (including, without limitation, any other accounts) or any interest in the Purchased Assets; |
(xv) | accounts, chattel paper (including electronic chattel paper), goods (including inventory and equipment and any accessions thereto), instruments (including promissory notes), documents, investment property, general intangibles (including payment intangibles and software) in each case related to the Purchased Assets; and |
(xvi)
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together with all accessions and additions thereto, substitutions and replacements therefor, and all products and proceeds of the foregoing, in all instances, whether now
owned or hereafter acquired, now existing or hereafter created and wherever located (collectively, the “Repurchase Assets”).
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(b)
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Servicing Rights. Seller acknowledges that it has sold the Purchased Assets to Buyer on a servicing released basis and it has no rights to service the Purchased
Assets. Without limiting the generality of the foregoing and in the event that Seller is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, Seller grants, assigns and pledges to Buyer a security interest in the
Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other
credit enhancement related to the Agreement and Transactions hereunder as defined under Sections 101(47)(v) and 741(7)(xi) of the Bankruptcy Code.
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(c)
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Financing Statements. Seller hereby authorizes Buyer to file such financing statement or statements relating to the Repurchase Assets and the Servicing Rights as
Buyer, at its option, may deem appropriate. Seller shall pay the searching and filing costs for any financing statement or statements prepared or searched pursuant to this Agreement.
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(d)
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Buyer’s Appointment as Attorney in Fact. Seller agrees to execute a Power of Attorney, the form of Exhibit E hereto (the “Power of Attorney”), to be
delivered on the date hereof.
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SECTION 9. PAYMENT, TRANSFER; ACCOUNTS
(a)
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Payments and Transfers of Funds. Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set off or counterclaim, to Buyer pursuant to the Wiring Instructions, on the date on which such payment shall become due. |
(b)
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Remittance of Purchase Price. On the Purchase Date for each Transaction, ownership of the Purchased Assets shall be transferred to Buyer or its designee against
the simultaneous transfer of the Purchase Price pursuant to Seller’s Wiring Instructions. With respect to the Purchased Assets being sold by Seller on a Purchase Date, Seller hereby sells, transfers, conveys and assigns to Buyer or its designee
without recourse, but subject to the terms of this Agreement, all the right, title and interest of Seller in and to the Purchased Assets together with all right, title and interest in and to the proceeds of any related Repurchase Assets.
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(c)
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Warehouse Accounts. Buyer or the Buyer’s designee shall maintain for Seller an inbound account and a margin account (the “Warehouse Accounts”). The
Warehouse Accounts shall be in the form of non-interest bearing book-entry accounts. Buyer shall have exclusive withdrawal rights from the Warehouse Accounts. All amounts on deposit in the Warehouse Accounts shall be held as cash margin and
collateral for all Obligations under this Agreement. Without limiting the generality of the foregoing, in the event that a Margin Call or other Default exists, Buyer shall be entitled to use any or all of the amounts on deposit in any Warehouse
Account to cure such circumstance or otherwise exercise remedies available to Buyer without prior notice to, or consent from, Seller. Notwithstanding the foregoing, Seller acknowledges that (i) amounts in the Warehouse Accounts are not insured
by the Federal Deposit Insurance Corporation, any governmental entity or otherwise and (ii) Buyer is not required to segregate funds in the Warehouse Accounts from its own funds or from funds held for others.
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(d)
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Operating Account. From time to time, Seller may provide funds to Buyer for deposit to an interest bearing account (the “Operating Account”) in accordance
with this Section 9. The Operating Account shall be a subaccount of an interest-bearing savings account (the “Omnibus Account”) maintained by Buyer as agent for the benefit of Seller and other sellers of mortgage related assets with a
bank determined by Buyer its sole discretion (the “Depository”). The Buyer shall have non-exclusive withdrawal rights from the Operating Account. Seller acknowledges that Buyer acts as Seller’s agent for the limited purpose of placing
funds with the Depository, and that funds held by Buyer as Seller’s agent are not a deposit account or other liability of Buyer. Buyer shall maintain records of Seller’s interest in the funds maintained in the Omnibus Account. Withdrawals may
be paid by wire transfer or any other means chosen by Buyer from time to time in its sole discretion.
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(e)
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Depository. Unless otherwise designated in writing by Buyer, the Depository shall be UBS AG, Stamford Branch. Funds on deposit at the UBS AG, Stamford Branch are not insured by the Federal Deposit Insurance Corporation, Securities Investor Protection Corporation or any governmental agency of the United States, Switzerland or any other jurisdiction. The Omnibus Account and Operating Account are obligations of the UBS AG, Stamford Branch only, and are not obligations of UBS AG generally or of any of its other affiliates. The payment of principal and interest on the Operating Account at the UBS AG, Stamford Branch is subject to the creditworthiness of UBS AG. The Operating Account is not a deposit account or other liability of Buyer. In the unlikely event of the failure of the UBS AG, Stamford Branch, the Seller acknowledges that it will be a general unsecured creditor of UBS AG. |
(f)
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Buydown Amount. The Buydown Amount shall be held as unsegregated cash margin and collateral for all Obligations under this Agreement. Without limiting the
generality of the foregoing, in the event that a Margin Call or other Default exists, the Buyer shall be entitled to use any or all of the Buydown Amount and to withdraw such amount from the Operating Account in Buyer’s sole discretion to cure
such circumstance or otherwise exercise remedies available to the Buyer without prior notice to, or consent from, Seller. Regardless of whether a Margin Call or other Default exists, Buyer also may withdraw interest paid to the Operating
Account in its discretion from time to time, and without prior notice to or consent from the Seller, as a full or partial off-set to Seller’s obligation hereunder to pay the Price Differential. Within two (2) Business Days’ receipt of written
request from Seller, and provided no Margin Call or other Default exists, Buyer shall withdraw any portion of such Buydown Amount from the Operating Account and remit such amount back to Seller; provided that in the event any request to
withdraw funds would result in amounts in the Operating Account to be less than the Minimum Balance Requirement, Seller shall provide Buyer with thirty (30) days prior written notice of such request.
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(g)
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Operating Account Interest. Subject to Section 9(h), the Buydown Amount will accrue interest at the Operating Account Rate; provided that in no event shall
interest accrue on (i) the Buydown Amount if (x) on any day the Buydown Amount is less than the Minimum Balance Requirement or (y) the average balance of funds in the Operating Account during any calendar month is less than the Minimum Balance
Requirement and (ii) that portion of the Buydown Amount that is in excess of the lesser of (a) the aggregate outstanding Purchase Price of all Transactions during any calendar month or (b) [***]. Unless otherwise set forth in the
Pricing Letter:
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(i)
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The Depository calculates interest accrual daily on the basis of funds credited to the Operating Account, but credits interest monthly. As a result, interest will not
begin to compound until credited in the month following its accrual. The Depository credits interest to the Operating Account in the month following its accrual on a schedule set by Depository from time to time, which may result in a delay in
interest crediting as late as the twentieth (20th) day of the calendar month.
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(ii)
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The Depository accrues interest on funds deposited to the Operating Account beginning on the day on which such funds are received in the Operating Account, and through,
but not including, the day on which funds are withdrawn from the Operating Account.
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(iii)
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Interest paid on funds in the Operating Account at the Operating Account Rate shall be credited to the Operating Account unless otherwise withdrawn by Buyer at the
direction of Seller as provided herein.
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(h)
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Maintenance of Balances. If Seller shall fail to maintain with Buyer during any calendar month deposits in the Operating Account in the average, after charges to compensate Buyer for services rendered to Seller, equal to at least the Minimum Balance Requirement, Seller shall pay to Buyer a fee equal to the amount of such deficit multiplied by the Maintenance Fee Rate. |
(i)
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Fees. Seller shall pay in immediately available funds to Buyer all fees, including without limitation, the Warehouse Fees, as and when required hereunder. All such
payments shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at such account designated by Buyer. Without limiting the generality of the foregoing or any other provision of this
Agreement, Buyer may withdraw and retain from the Warehouse Accounts and Operating Account any Warehouse Fees due and owing to Buyer.
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SECTION 10. REPRESENTATIONS
Each Seller Party, jointly and severally, represents and warrants to Buyer that as of the Purchase Date for any Purchased Assets, as of the date of this Agreement and any Transaction hereunder and at all times while the Program Documents are in full force and effect and/or any Transaction hereunder is outstanding:
(a)
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Acting as Principal. Seller will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as
agent for a disclosed principal).
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(b)
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No Broker. Seller has not dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation
in connection with the sale of Purchased Assets pursuant to this Agreement.
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(c)
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Financial Statements. The Financial Reporting Party has heretofore furnished to Buyer a copy, certified by its president, chief financial officer or other officer
acceptable to Buyer, of its (a) Financial Statements for the Financial Reporting Party for the fiscal year ended the Annual Financial Statement Date, setting forth in each case in comparative form the figures for the previous year, with an
unqualified opinion thereon of an Approved CPA and (b) Financial Statements for the Financial Reporting Party for such monthly period(s), of the Financial Reporting Party up until Monthly Financial Statement Date, setting forth in each case in
comparative form the figures for the previous month and year-to-date. All such Financial Statements are complete and correct and fairly present, in all material respects, the consolidated and consolidating financial condition of the Financial
Reporting Party and the consolidated and consolidating results of its operations as at such dates and for such monthly periods, all in accordance with GAAP. Since the Annual Financial Statement Date, there has been no material adverse change in
the consolidated business, operations or financial condition of the Financial Reporting Party taken as a whole from that set forth in said Financial Statements nor is any Seller Party aware of any state of facts which (without notice or the
lapse of time) would or could result in any such material adverse change or could have a Material Adverse Effect. The Financial Reporting Party does not have, on the Annual Financial Statement Date, any liabilities, direct or indirect, fixed or
contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present
time there are no material unrealized or anticipated losses from any loans, advances or other commitments of the Financial Reporting Party except as heretofore disclosed to Buyer in writing.
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(d)
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Organization, Etc. Each Seller Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Seller
Party (a) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its
business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; (b) is qualified to do business and is in
good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have
a Material Adverse Effect; and (c) has full power and authority to execute, deliver and perform its obligations under the Program Documents.
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(e)
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Authorization, Compliance, Approvals. The execution and delivery of, and the performance by each Seller Party of its obligations under, the Program Documents to which it is a party (a) are within Seller Party’s powers, (b) have been duly authorized by all requisite action, (c) do not violate any provision of applicable law, rule or regulation, or any order, writ, injunction or decree of any court or other Governmental Authority, or its organizational documents, (d) do not violate any indenture, agreement, document or instrument to which Seller Party or any of its Subsidiaries is a party, or by which any of them or any of their properties, any of the Repurchase Assets is bound or to which any of them is subject and (e) are not in conflict with, do not result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or except as may be provided by any Program Document, result in the creation or imposition of any Lien upon any of the property or assets of Seller Party or any of its Subsidiaries pursuant to, any such indenture, agreement, document or instrument. Seller Party is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the consummation of the Transactions contemplated herein and the execution, delivery or performance of the Program Documents to which it is a party. |
(f)
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Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened) or
other legal or arbitrable proceedings affecting Seller Party or any of its Subsidiaries or affecting any of the Repurchase Assets or any of the other properties of Seller Party before any Governmental Authority which (i) questions or challenges
the validity or enforceability of the Program Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) except as disclosed to Buyer,
makes a claim or claims in an aggregate amount greater than the Litigation Threshold, (iii) individually or in the aggregate, if adversely determined, would be reasonably likely to have a Material Adverse Effect, (iv) requires filing with the
SEC in accordance with its regulations or (v) relates to any violation of the Home Ownership and Equity Protection Act or any state, city or district high cost home mortgage or predatory lending law.
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(g) | Purchased Assets. |
(i)
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Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased Asset to any other Person, and immediately prior to the sale of such Purchased Asset to Buyer, Seller was the sole owner of such Purchased Asset and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released simultaneously with the sale to Buyer hereunder. |
(ii)
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The provisions of this Agreement are effective to either constitute a sale of Repurchase Assets to Buyer or to create in favor of Buyer a valid first priority security
interest in all right, title and interest of Seller in, to and under the Repurchase Assets.
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(h)
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Proper Names; Chief Executive Office/Jurisdiction of Organization. Seller does not operate in any jurisdiction under a trade name, division name or name other than
those names previously disclosed in writing by Seller to Buyer. On the Effective Date, Seller’s chief executive office is, and has been, located as specified in Section 23 hereto. Seller’s jurisdiction of organization, type of organization and
organizational identification number is as set forth in the Pricing Letter.
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(i)
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Location of Books and Records. The location where Seller keeps its books and records, including all computer tapes, computer systems and storage media and records
related to the Repurchase Assets is its chief executive office.
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(j)
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Enforceability. This Agreement and all of the other Program Documents executed and delivered by each Seller Party in connection herewith are legal, valid and
binding obligations of Seller Party and are enforceable against Seller Party in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar Requirement of Law affecting creditors’ rights generally and (ii) general principles of equity.
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(k)
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Ability to Perform. Seller Party does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the
Program Documents to which it is a party on its part to be performed.
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(l) | No Default. No Default or Event of Default has occurred and is continuing. |
(m)
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No Adverse Selection. Seller has not selected the Purchased Assets in a manner so as to adversely affect Buyer’s interests.
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(n)
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Scheduled Indebtedness. All Indebtedness which is presently in effect and/or outstanding is listed on Schedule 3 hereto (the “Scheduled Indebtedness”) and
no defaults or events of default exist thereunder. The financial covenants hereunder are at least equal to those Seller makes under each of its Scheduled Indebtedness.
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(o)
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Accurate and Complete Disclosure. The information, reports, Financial Statements, exhibits and schedules furnished in writing by or on behalf of each Seller Party to Buyer in connection with the negotiation, preparation or delivery of this Agreement or performance hereof and the other Program Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of each Seller Party to Buyer in connection with this Agreement and the other Program Documents and the transactions contemplated hereby and thereby including without limitation, the information set forth in the related Mortgage Loan Schedule, will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to Seller, after due inquiry, that could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Program Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer for use in connection with the transactions contemplated hereby or thereby. |
(p)
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Margin Regulations. The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by
the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.
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(q)
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Investment Company. Neither Seller Party nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
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(r)
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Solvency. As of the date hereof and immediately after giving effect to each Transaction, the fair value of the assets of Seller is greater than the fair value of
the liabilities (including, without limitation, contingent liabilities if and to the extent required to be recorded as a liability on the Financial Statements of Seller in accordance with GAAP) of Seller and Seller is solvent and, after giving
effect to the transactions contemplated by this Agreement and the other Program Documents, will not be rendered insolvent or left with an unreasonably small amount of capital with which to conduct its business and perform its obligations.
Seller does not intend to incur, nor does it believe that it has incurred, debts beyond its ability to pay such debts as they mature. Seller Party is not contemplating the commencement of an insolvency, bankruptcy, liquidation, or consolidation
proceeding or the appointment of a receiver, liquidator, conservator, trustee, or similar official in respect of itself or any of its property.
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(s)
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ERISA. From the fifth fiscal year preceding the current year through the termination of this Agreement (the “Reporting Period”), with respect to any plan within the meaning of Section 3(3) of ERISA that is sponsored or maintained by Seller Party or any ERISA Affiliate, or to which Seller Party or any ERISA Affiliate contributes or has contributed (each, a “Plan”), the benefits under which Plan are guaranteed, in whole or in part, by the PBGC (i) Seller Party and each ERISA Affiliate has funded and will continue to fund each Plan as required by the provisions of Section 412 of the Code; (ii) Seller Party and each ERISA Affiliate has caused and will continue to cause (directly or indirectly) each Plan to pay all benefits when due; (iii) neither Seller Party nor any ERISA Affiliate has been or is obligated to contribute to any multiemployer plan as defined in Section 3(37) of ERISA; (iv) Seller Party (on behalf of ERISA Affiliate, if applicable) will provide to Buyer (A) no later than the date of submission to the PBGC, a copy of any notice of a Plan’s termination (B) no later than the date of submission to the Department of Labor or to the Internal Revenue Service, as the case may be, a copy of any request for waiver from the funding standards or extension of the amortization periods required by Section 412 of the Code and (C) notice of any Reportable Event as such term is defined in ERISA (and has, prior to the date of this Agreement, provided to Buyer a copy of any document described in clauses (iv)(A), (B) or (C) relating to any date in the Reporting Period prior to the date of this Agreement); and (v) Seller Party and each ERISA Affiliate will subscribe from the date of this Agreement to the termination of this Agreement to any contingent liability insurance provided by the PBGC to protect against employer liability upon termination of a guaranteed pension plan, if available to Seller Party or ERISA Affiliate, as applicable. |
(t) | Taxes. |
(i)
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Seller Party and its Subsidiaries have timely filed all material income, franchise and other Tax returns that are required to be filed by them and have timely paid all Taxes due and payable by them or imposed with respect to any of their property and all other material fees and other charges imposed on them or any of their property by any Governmental Authority, except for any such Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP. |
(ii)
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There are no Liens for Taxes with respect to any assets of any Seller Party or its Subsidiaries, and no claim is being asserted with respect to Taxes of any Seller Party
or its Subsidiaries, except for statutory Liens for Taxes not yet due and payable or for Taxes the amount or validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and, in each case, with
respect to which adequate reserves have been provided in accordance with GAAP.
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(iii) | Seller is treated as a corporation for U.S. federal income tax purposes. |
(u)
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No Reliance. Seller Party has made its own independent decisions to enter into the Program Documents and each Transaction and as to whether such Transaction is
appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Seller Party is not relying upon any advice from Buyer as to
any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
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(v)
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Plan Assets. Seller Party is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and
the Purchased Assets are not “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, in Seller Party’s hands and transactions by or with Seller Party are not subject to any foreign state or local statute
regulating investments of, or fiduciary obligations with respect to, governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.
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(w)
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Agency Approvals. With respect to each Agency Approval, Seller is in good standing, with no event having occurred or Seller having any reason whatsoever to believe
or suspect will occur, including, without limitation, a change in insurance coverage which would either make Seller unable to comply with the eligibility requirements for maintaining all such Agency Approvals or require notification to the
relevant Agency.
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(x)
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Anti-Money Laundering Laws. Seller Party has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot
Act of 2001 (collectively, the “Anti-Money Laundering Laws”); Seller Party has established an anti-money laundering compliance program as required by the Anti-Money Laundering Laws, has conducted the requisite due diligence in connection
with the origination of each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.
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(y)
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No Sanctions. No Seller Party nor any of their Affiliates, officers, directors, partners or members, (i) is an entity or person (or to the Seller’s knowledge,
owned or controlled by an entity or person) that (A) is currently subject to any economic sanctions or trade embargoes administered or imposed by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department
of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or any other relevant authority (collectively, “Sanctions”) or (B) resides, is organized or chartered, or has a place of business in a country or
territory that is currently the subject of Sanctions and (ii) will directly or indirectly use the proceeds of any Transactions contemplated hereunder, or lend, contribute or otherwise make available such proceeds to or for the benefit of any
person or entity, for the purpose of financing or supporting, directly or indirectly, the activities of any person or entity that is currently the subject of Sanctions.
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(z)
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Takeout Commitments. With respect to any Takeout Commitment with an Agency, if applicable, (1) with respect to the wire transfer instructions as set forth in
Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse Delivery) such wire transfer instructions are identical to Buyer’s wire instructions or the Buyer has approved such wire transfer instructions in writing in its sole
discretion, or (2) the Payee Number set forth on Fannie Mae Form 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable, is identical to the
Payee Number that has been identified by Buyer in writing as Buyer’s Payee Number or the Buyer has approved the related Payee Number in writing in its sole discretion. With respect to any Takeout Commitment with an Agency for which the Agency
is swapping the related Purchased Mortgage Loans for a mortgage backed security, the applicable Agency documents list Buyer or its designee as sole subscriber.
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SECTION 11. COVENANTS
Each Seller Party, jointly and severally, covenants to Buyer that as of the Purchase Date for any Purchased Asset, as of the date of this Agreement and any Transaction hereunder and at all times while the Program Documents are in full force and effect and/or any Transaction thereunder is outstanding, as follows:
(a)
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Preservation of Existence; Compliance with Law. Seller Party shall (i) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business; (ii) comply with any applicable Requirement of Law, rules, regulations and orders, whether now in effect or hereafter enacted or promulgated by any applicable Governmental Authority (including, without limitation, all environmental laws); (iii) maintain all licenses, permits or other approvals necessary for Seller Party to conduct its business and to perform its obligations under the Program Documents, and shall conduct its business strictly in accordance with any applicable Requirement of Law; and (iv) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied. |
(b) | Taxes. |
(i)
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Seller Party and its Subsidiaries shall timely file all income, franchise and other material Tax returns that are required to be filed by them and shall timely pay all
Taxes due and payable by them or imposed with respect to any of their property and all other material fees and other charges imposed on them or any of their property by any Governmental Authority, except for any such Taxes the amount or
validity of which is currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.
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(ii)
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Seller will be treated as a corporation for U.S. federal income tax purposes.
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(c)
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Notice of Proceedings or Adverse Change. Seller Party shall give notice to Buyer or cause notice to be given to Buyer:
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(i) | immediately after a Responsible Officer of Seller Party has any knowledge of: |
(A) | the occurrence of any Default or Event of Default; |
(B) | any (a) default or event of default under any Indebtedness of Seller Party or (b) litigation, investigation, regulatory action or proceeding that is pending or threatened by or against Seller Party in any federal or state court or before any Governmental Authority which, if not cured or if adversely determined, would reasonably be expected to have a Material Adverse Effect or constitute a Default or Event of Default, and (c) any Material Adverse Effect with respect to Seller Party; |
(C) |
any litigation or proceeding that is pending or threatened (a) against Seller Party in which the amount involved exceeds the Litigation Threshold and is not covered by
insurance, in which injunctive or similar relief is sought, or which, would reasonably be expected to have a Material Adverse Effect, (b) in connection with any of the Repurchase Assets, which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect and (c) that questions or challenges compliance of any Mortgage Loan with the Ability to Repay Rule or QM Rule;
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(D)
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as soon as reasonably possible, notice of any of the following events: (A) a change in the insurance coverage of Seller Party, with a copy of evidence of same attached;
(B) any material change in accounting policies or financial reporting practices of Seller Party; (C) promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other
Program Document) on, or claim asserted against, any of the Repurchase Assets; (D) the termination or nonrenewal of any debt facilities of Seller Party which have a maximum principal amount (or equivalent) available of more than the Facility
Termination Threshold; (E) any Change in Control or any change in direct or indirect ownership or controlling interest of any Seller Party’s direct or indirect owner; and (F) any other event, circumstance or condition that has resulted, or has
a possibility of resulting, in a Material Adverse Effect; and
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(ii)
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Promptly, but no later than [***] after Seller receives notice of the same, (A) any Mortgage Loan submitted for inclusion into an Agency Security and rejected by
that Agency for inclusion in such Agency Security or (B) any Mortgage Loan submitted to an Approved Investor (whole loan or securitization) and rejected for purchase by such Approved Investor; or (C) the termination or suspension of approval of
Seller to sell any Mortgage Loans to any Approved Investor.
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(d)
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Financial Reporting. Seller Party shall maintain a system of accounting established and administered in accordance with GAAP consistently applied, and furnish to
Buyer, with a certification by the president, chief financial officer or designee as approved by Buyer of the Financial Reporting Party (the following hereinafter referred to as the “Financial Statements”):
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(i)
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Within ninety (90) days after the close of each fiscal year, audited consolidated and consolidating balance sheets and the related consolidated and consolidating
statements of income and retained earnings and of cash flows as at the end of such year for the Financial Reporting Party for the fiscal year, setting forth in each case in comparative form the figures for the previous year, with an unqualified
opinion thereon of an Approved CPA;
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(ii) | Reserved; |
(iii)
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Within thirty (30) days after the end of each month, the consolidated and consolidating balance sheets and the related consolidated and consolidating statements of
income, a calculation schedule of Financial Condition Covenants, and as may be reasonably requested by Buyer, the statement of retained earnings and the statement of cash flows for the Financial Reporting Party for such monthly period(s), of
the Financial Reporting Party;
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(iv)
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Unless otherwise waived by Buyer in writing, simultaneously with the furnishing of each of the Financial Statements to be delivered pursuant to subsection (i) and (iii) above, submission of a certificate in the form of Exhibit A to the Pricing Letter and certified by the president, chief financial officer, or designee as approved by Buyer of the Financial Reporting Party, which includes detailed reporting to the materials set forth therein including without limitation, any request for repurchase of or indemnification for a Mortgage Loan purchased by a third party investor, the valuation of the Seller’s Capitalized Mortgage Servicing Rights by any third-party evaluator and a quarterly legal compliance questionnaire; |
(v)
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If applicable and at the request of Buyer, copies of any 10-Ks, 10-Qs, registration statements and other “corporate finance” SEC filings (other than 8-Ks) by
Seller Party; provided, that, Seller Party or any Affiliate will provide Buyer with a copy of the annual 10-K filed with the SEC by Seller Party or its Affiliates, no later than 90 days after the end of the year unless otherwise agreed to by
Buyer in its sole discretion; and
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(vi)
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Promptly, from time to time, such other information regarding the business affairs, operations and financial condition of Seller Party as Buyer may reasonably request or
as set forth in the certificate delivered pursuant to Section 11(d)(iv) above.
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(e)
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Further Assurances. Seller Party shall execute and deliver to Buyer all further documents, financing statements, agreements and instruments, and take all further
actions that may be required under any applicable Requirement of Law, or that Buyer may reasonably request, in order to effectuate the transactions contemplated by this Agreement and the Program Documents or, without limiting any of the
foregoing, to grant, preserve, protect and perfect the validity and first-priority of the security interests created or intended to be created hereby.
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(f)
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True and Correct Information. All information, reports, exhibits, schedules, Financial Statements or certificates of Seller Party or any of its Affiliates thereof
or any of their officers furnished to Buyer hereunder and during Buyer’s diligence of Seller Party will be true and complete and will not omit to disclose any material facts necessary to make the statements herein or therein, in light of the
circumstances in which they are made, not misleading. All required Financial Statements, information and reports delivered by Seller Party to Buyer pursuant to this Agreement shall be prepared in accordance with GAAP, or as applicable, to SEC
filings, the appropriate SEC accounting requirements.
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(g)
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ERISA Events. Seller Party shall not and shall not permit any ERISA Affiliate to be in violation of any provision of Section 10(s) of this Agreement and Seller
Party shall not be in violation of Section 10(v) of this Agreement.
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(h)
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Financial Condition Covenants. The applicable Seller Parties shall comply with the Financial Condition Covenants set forth in the Pricing Letter.
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(i)
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Hedging. Seller shall hedge all Purchased Assets in accordance with Seller’s hedging policies. Unless otherwise requested by Buyer, Seller shall deliver to Buyer once per week, a hedging report, in a form reasonably satisfactory to Buyer. Seller shall (i) review the hedging policies periodically to confirm that they are being complied with in all material respects and are adequate to meet Seller’s business objectives and (ii) in the event Seller makes any amendment or modification to the hedging policies, upon request of Buyer, deliver to Buyer a complete copy of the amended or modified hedging policies. Additionally, Buyer may in its reasonable discretion request a current copy of Seller’s hedging policies at any time. |
(j)
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Servicer Approval. Seller shall not cause the Mortgage Loans to be serviced by any servicer other than a servicer expressly approved in writing by Buyer, which
approval shall be deemed granted by Buyer with respect to Seller with the execution of this Agreement.
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(k) |
Insurance. Seller shall maintain Fidelity Insurance and errors and omissions insurance in respect of its officers, employees and agents in such amounts acceptable
to Buyer, which shall include a provision that such policies cannot be terminated or materially modified without at least 30 days’ prior notice to Buyer. Seller shall notify Buyer of any material change in the terms of any such insurance.
Seller shall maintain endorsements for theft of warehouse lender money and collateral, naming Buyer as a loss payee under its Fidelity Insurance and as a direct loss payee/right of action under its errors and omissions insurance policy.
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(l)
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Books and Records. Seller shall, to the extent practicable, maintain and implement administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep and maintain or obtain, as and when required, all documents, books, records and other information reasonably
necessary or advisable for the collection of all Repurchase Assets
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(m) |
Illegal Activities. Seller Party shall not engage in any conduct or activity that could subject its assets to forfeiture or seizure.
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(n) | Material Change in Business. Seller Party shall not make any material change in the nature of its business as carried on at the date hereof. |
(o)
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Limitation on Dividends and Distributions. Except as permitted by Buyer in writing, Financial Reporting Party shall not make any payment on account of, or set
apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Financial Reporting Party, whether now or hereafter outstanding, or make any other
distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Financial Reporting Party, either directly or indirectly, whether in cash or property or in obligations of Financial Reporting Party or any of
Financial Reporting Party’s consolidated Subsidiaries in any calendar year in excess of [***] of the Net Income of Financial Reporting Party for the preceding calendar year (determined in accordance with GAAP); provided that no such
payments, dividends or other distributions may be made at any time following the occurrence and during the continuation of an Event of Default.
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(p)
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Scheduled Indebtedness. Scheduled Indebtedness. Without the prior written (i) consent of Buyer, Seller shall not incur any additional material Indebtedness
(other than (x) the Scheduled Indebtedness listed under the definition thereof and (y) usual and customary accounts payable for a mortgage company) and (ii) notice to Buyer, Seller shall not incur Indebtedness under a Warehouse Facility.
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(q)
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Disposition of Assets; Liens. Seller shall not create, incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other encumbrance of any nature
whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than the Liens created in connection with the transactions contemplated by this Agreement; nor shall Seller cause any of the Purchased
Assets to be sold, pledged, assigned or transferred except as permitted hereunder.
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(r)
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Transactions with Affiliates. Seller Party shall not enter into any transaction, including, without limitation, the purchase, sale, lease or exchange of property
or assets or the rendering or accepting of any service with any Affiliate unless such transaction is (i) not otherwise prohibited in this Agreement, (ii) in the ordinary course of Seller Party’s business and (iii) upon fair and reasonable
terms no less favorable to Seller Party, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.
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(s)
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Organization. Seller Party shall not (i) cause or permit any change to be made in its name, organizational identification number, identity or corporate structure,
each as described in Section 10(h) or (ii) change its jurisdiction of organization, unless it shall have provided Buyer thirty (30) days’ prior written notice of such change and shall have first taken all action required by Buyer for the
purpose of perfecting or protecting the lien and security interest of Buyer established hereunder.
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(t)
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Mortgage Loan Reports. Upon request of Buyer, Seller will furnish to Buyer monthly electronic Mortgage Loan performance data, including, without limitation, a
Mortgage Loan Schedule, delinquency reports, pool analytic reports and static pool reports (i.e., delinquency, foreclosure and net charge off reports) and monthly stratification reports summarizing the characteristics of the Mortgage Loans.
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(u)
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Confidentiality. Each Seller Party 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/or any applicable terms of this Agreement (the “Confidential Information”). Seller Party understands 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 Seller Party 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 Party 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 which Buyer holds (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller Party shall, at a minimum establish and maintain such data security program as is necessary to meet the objectives of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth in the Code of Federal Regulations at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568 and 570. Upon request, Seller Party will provide evidence reasonably satisfactory to allow Buyer to confirm that Seller Party has satisfied its obligations as required under this Section 11. Without limitation, this may include Buyer’s review of audits, summaries of test results, and other equivalent evaluations of Seller Party. Seller Party shall notify Buyer immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Buyer or any Affiliate of Buyer provided directly to Seller Party by Buyer or such Affiliate. Seller Party shall provide such notice to Buyer by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual. |
(v)
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Approved Underwriting Guidelines. Seller shall not submit to Buyer for purchase, and Buyer shall have no obligation to purchase, any Mortgage Loan underwritten in
accordance with underwriting guidelines, including amendments to Approved Underwriting Guidelines not expressly approved by Buyer, other than Approved Underwriting Guidelines.
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(w) |
Agency Approvals; Servicing. To the extent previously approved, Seller shall maintain all Agency Approvals and in each case shall remain in good standing with
respect to such Agency Approvals. Should Seller, for any reason, cease to possess all such applicable Agency Approvals to the extent necessary, should Seller experience any change in its delegated underwriting authority from any Agency, or
should notification of an adverse occurrence to the relevant Agency or to HUD, FHA, VA or RD be required, Seller shall so notify Buyer immediately in writing. Notwithstanding the preceding sentence and to the extent previously approved, Seller
shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction. Seller 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.
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(x)
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Sharing of Information. Seller Party hereby allows and consents to Buyer, subject to applicable law, exchanging information related to Seller Party, its credit,
its mortgage loan originations and the Transactions hereunder with third party lenders, facility providers and Approved Investors (collectively, “Third Party Participants”), and Seller Party shall permit each Third Party Participant to
share such similar information with Buyer. In furtherance of the foregoing, Seller Party shall use its best efforts to provide Buyer access to each Third Party Participant’s electronic system to retrieve the information described herein.
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(y)
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[***]
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(z)
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Takeout Payments. With respect to each Purchased Asset subject to a Takeout Commitment, the Seller shall arrange that all payments under the related Takeout
Commitment shall be paid directly to the Buyer pursuant to Section 3(e) hereof.
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(aa)
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Issuance of Agency Securities. If Purchased Mortgage Loans are pooled for the purpose of backing an Agency Security, Seller shall promptly deliver to the
applicable Agency any and all documents necessary to enable such Agency to make Delivery to Buyer or its designee of an Agency Security backed by the related Purchased Mortgage Loans. Seller shall not revoke such instructions to an Agency.
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(bb)
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QM/ATR Reporting. Seller shall deliver to Buyer, with reasonable promptness upon Buyer’s request, copies of all documentation in connection with the underwriting
and origination of any Purchased Mortgage Loan that evidences compliance with the Ability to Repay Rule and the QM Rule.
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(cc)
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Trade Assignment. Upon Custodian certifying a Purchased Mortgage Loan to an Agency for the issuance of an Agency Security backed by such Purchased Mortgage Loan
and which Buyer is purchasing such Agency Security hereunder, Seller shall deliver to Buyer a Trade Assignment executed by Seller with respect to such Agency Security.
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(dd)
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Use of Proceeds. Seller shall not use the proceeds of any Transaction hereunder to (i) pay any obligation of or amounts due to any Affiliate of Buyer, (ii)
purchase any assets from or any assets financed by any Affiliate of Buyer; or (iii) purchase any securities issued by any Affiliate of Buyer.
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SECTION 12. EVENTS OF DEFAULT
If any of the following events (each an “Event of Default”) occur, Buyer shall have the rights set forth in Section 13, as applicable:
(a)
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Payment Default. Seller Party shall default in the payment of (i) any amount payable by it hereunder or under any other Program Document, (ii) Expenses (and such
failure to pay Expenses shall continue for more than [***]) or (iii) any other Obligations, when the same shall become due and payable, whether at the due date thereof, or by acceleration or otherwise; or
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(b)
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Representation and Warranty Breach. Any representation, warranty or certification made or deemed made herein or in any other Program Document by a Seller Party or
any certificate furnished to Buyer pursuant to the provisions hereof or thereof or any information with respect to the Mortgage Loans furnished in writing by or on behalf of Seller Party shall prove to have been untrue or misleading in any
material respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Market Value of the Purchased Assets; unless
(i) Seller shall have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made; or (ii) any such representations and warranties have been determined in good faith by Buyer
in its sole discretion to be materially false or misleading on a regular basis); or
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(c)
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Immediate Covenant Default. The failure of a Seller Party to perform, comply with or observe any term, covenant or agreement applicable to Seller contained in any of Sections 11(a) (Preservation of Existence; Compliance with Law); (f) (True and Correct Information); (g) (ERISA Events); (h) (Financial Condition Covenants); (k) (Insurance); (m) (Illegal Activities.); (n) (Material Change in Business); (o) (Limitation on Dividends and Distributions); (q) (Disposition of Assets; Liens); (r) (Transactions with Affiliates); (s) (Organization); (v) (Approved Underwriting Guidelines);(w) (Agency Approvals; Servicing); (z) (Takeout Payments) or (cc) (Trade Assignment); or |
(d)
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Additional Covenant Defaults. A Seller Party shall fail to observe or perform any other covenant or agreement contained in this Agreement (and not identified in
Section 12(c)) or any other Program Document, and if such default shall be capable of being remedied, and such failure to observe or perform shall continue unremedied for a period of [***]; or
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(e)
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Judgments. A judgment or judgments for the payment of money in excess of the Litigation Threshold in the aggregate shall be rendered against a Seller Party or any
of its Affiliates by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof
shall not be procured, within [***] from the date of entry thereof, and Seller Party or any such Affiliate 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; or
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(f)
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Buyer Affiliate Cross-Default. Any “event of default” or any other default which permits a demand for, or requires, the early repayment of obligations due by a
Seller Party or its Affiliates under any agreement with Buyer or its Affiliates relating to any Indebtedness of Seller Party or any Affiliate, as applicable, or any default under any obligation when due with Buyer or its Affiliates; or
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(g)
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Other Cross-Default. Any “event of default” or any other default which permits a demand for, or requires, the early repayment of obligations due by a Seller Party
or its Affiliates under any note, indenture, loan agreement, guaranty, swap agreement, Hedge Agreement or other Indebtedness of Seller Party or any Affiliate ; or
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(h)
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Insolvency Event. An Insolvency Event shall have occurred with respect to a Seller Party or any Affiliate; or
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(i)
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Enforceability. For any reason, this Agreement at any time shall not be in full force and effect in all material respects or shall not be enforceable in all
material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected and of first priority, or any Person (other than Buyer) shall contest the validity, enforceability, perfection or priority of any
Lien granted pursuant thereto, or any party thereto (other than Buyer) shall seek to disaffirm, terminate, limit or reduce its obligations hereunder; or
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(j)
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Liens. Any Seller Party shall grant, or suffer to exist, any Lien on any Repurchase Asset (except any Lien in favor of Buyer); or at least one of the following
fails to be true (A) the Repurchase Assets shall have been sold to Buyer, or (B) the Liens contemplated hereby are first priority perfected Liens on any Repurchase Assets in favor of Buyer; or
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(k)
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Material Adverse Effect. A Material Adverse Effect shall occur as determined by Buyer in its sole discretion; or
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(l) | Change in Control. A Change in Control shall have occurred; or |
(m)
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Going Concern. Any Financial Reporting Party’s audited Financial Statements or notes thereto or other opinions or conclusions stated therein shall be qualified or
limited by reference to the status of Seller Party as a “going concern” or reference of similar import; or
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(n)
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Investigations. There shall occur the initiation of any investigation, audit, examination or review of a Seller Party by an Agency, any Governmental Authority, any
trade association or consumer advocacy group relating to the origination, sale or servicing of mortgage loans by such Seller Party or the business operations of such Seller Party, with the exception of normally scheduled audits or examinations
by such Seller Party’s regulators; or
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(o)
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Inability to Perform. An officer of Seller shall admit its inability to, or its intention not to, perform any of Seller’s obligations; or
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(p) |
Governmental Action. Seller Party shall become the subject of a cease and desist order of the Appropriate Federal Banking Agency or any other Governmental
Authority or enter into a memorandum of understanding or consent agreement with the Appropriate Federal Banking Agency or other Governmental Authority, any of which, would have, or is purportedly the result of any condition which would be
reasonably likely to have, a Material Adverse Effect.
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SECTION 13. REMEDIES
(a)
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If an Event of Default occurs, the following rights and remedies are available to Buyer; provided, that an Event of Default shall be deemed to be continuing unless
expressly waived by Buyer in writing.
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(i)
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At the option of Buyer, exercised by written or electronic notice to Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately
upon the occurrence of an Insolvency Event of a Seller Party or any Affiliate), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur.
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(ii)
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If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of this Section 13,
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(A)
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Seller’s obligations in such Transactions to repurchase all Purchased Assets, at the Repurchase Price therefor on the Repurchase Date determined in accordance with
subsection (a)(i) of this Section 13, (1) shall thereupon become immediately due and payable and (2) all Income paid after such exercise or deemed exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Price and any
other Obligations;
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(B)
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to the extent permitted by any applicable Requirement of Law, the Repurchase Price with respect to each such Transaction shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Repurchase Date as determined pursuant to subsection (a)(i) of this Section 13 (decreased as of any day by (i) any amounts applied by Buyer pursuant to clause (C) of this subsection, and (ii) any proceeds from the sale of Purchased Assets applied to the Repurchase Price pursuant to subsection (a)(iv) of this Section 13; and |
(C)
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all Income actually received by Buyer pursuant to Section 5 shall be applied to the aggregate unpaid Obligations owed by Seller Parties.
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(iii)
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Upon the occurrence of one or more Events of Default, Buyer shall have the right to obtain (A) a physical transfer of the servicing of the Purchased Assets in accordance
with Section 15(c) and (B) physical possession of all files of Seller relating to the Purchased Assets and the Repurchase Assets and all documents relating to the Purchased Assets which are then or may thereafter come in to the possession of
Seller or any third party acting for Seller (including any Servicer) and Seller shall deliver to Buyer such assignments as Buyer shall request. Buyer shall be entitled to specific performance of all agreements of Seller contained in the Program
Documents.
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(iv)
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At any time on the Business Day following notice to Seller (which notice need not be given if an Event of Default under Section 12(h) shall have occurred with respect to
any Seller Party or any Affiliate thereof and may be the notice given under subsection (a)(i) of this Section 13), in the event Seller has not repurchased all Purchased Assets, Buyer may (A) immediately sell, without demand or further notice of
any kind, at a public or private sale, without any representations or warranties of Buyer and at such price or prices as Buyer may deem satisfactory any or all Purchased Assets and the Repurchase Assets subject to a such Transactions hereunder
and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by Seller hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller credit
for such Purchased Assets and the Repurchase Assets in an amount equal to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other Obligations of Seller. The proceeds of any disposition of Purchased
Assets and the Repurchase Assets shall be applied to Seller’s Obligations as determined by Buyer in its sole discretion.
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(v)
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Seller shall be liable to Buyer for (A) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Buyer in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel of Buyer) incurred in connection with or as a result of an Event of Default, (B) damages in an amount equal to the cost (including all fees, expenses and commissions) of Buyer entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (C) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction. |
(vi)
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Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or any applicable Requirement of Law.
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(b)
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Buyer may exercise one or more of the remedies available hereunder immediately upon the occurrence of an Event of Default and at any time thereafter without notice to
Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have.
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(c)
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Seller recognizes that the market for the Purchased Assets may not be liquid and as a result it may not be possible for Buyer to sell all of the Purchased Assets on a
particular Business Day, or in a transaction with the same purchaser, or in the same manner. In view of the nature of the Purchased Assets, the Seller agrees that liquidation of any Purchased Asset may be conducted in a private sale. Seller
acknowledges and agrees that any such private sale may result in prices and other terms less favorable to Buyer than if such sale were a public sale, and notwithstanding such circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner. Seller further agrees that it would not be commercially unreasonable for Buyer to dispose of any Purchased Asset by using internet sites that provide for the auction or sale of assets similar
to the Purchased Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets.
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(d)
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Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and each Seller Party hereby expressly waives any defenses Seller Party
might otherwise have to require Buyer to enforce its rights by judicial process. Seller Party also waives any defense (other than a defense of payment or performance) Seller Party might otherwise have arising from the use of nonjudicial
process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Seller Party 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.
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(e)
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To the extent permitted by any applicable Requirement of Law, Seller shall be liable to Buyer for interest (including post-petition interest) on any amounts owing by
Seller hereunder, from the date Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on any sum payable by Seller to
Buyer under this Section 13(e) shall be at a rate equal to the Post-Default Rate.
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(f) | Without limiting the rights of Buyer hereto to pursue all other legal and equitable rights available to Buyer for Seller Party’s failure to perform its obligations under this Agreement, Seller Party acknowledges and agree that the remedy at law for any failure to perform obligations hereunder would be inadequate and Buyer shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages. |
SECTION 14. INDEMNIFICATION AND EXPENSES; RECOURSE
(a)
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Each Seller Party agrees to hold Buyer, and its Affiliates and their officers, directors, employees, agents and advisors (each an “Indemnified Party”) harmless
from and indemnify, on an after-Tax basis, any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (collectively,
“Costs”), relating to or arising out of this Agreement (including, without limitation, as a result of a breach of any representation or warranty contained on Schedule 1), any other Program Document or any transaction contemplated
hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Program Document or any transaction contemplated hereby or thereby, that, in each case, results from
anything other than the Indemnified Party’s gross negligence or willful misconduct. Without limiting the generality of the foregoing, each Seller Party agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party, on
an after-Tax basis, against all Costs and Taxes incurred or assessed as a result of or otherwise in connection with the holding of the Mortgage Loans or Agency Securities or any failure by any Seller Party or Subsidiary thereof to pay when due
any Taxes for which such Person is liable, that result from anything other than the Indemnified Party’s gross negligence or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party in connection with this Agreement,
any Mortgage Loan or Agency Security for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan or Agency Security, Seller Party will save, indemnify on an after-Tax basis and hold such Indemnified Party harmless from and
against all expense, loss or damage suffered by reason of any defense, set off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller Party of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller Party. Seller Party also agrees to reimburse an Indemnified Party as
and when billed by such Indemnified Party for all the Indemnified Party’s costs and expenses incurred in connection with the enforcement or the preservation of Buyer’s rights under this Agreement, any other Program Document or any transaction
contemplated hereby or thereby, including without limitation the reasonable fees and disbursements of its counsel.
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(b)
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Seller Party agrees to pay as and when billed by Buyer all of the out-of-pocket costs and expenses incurred by Buyer in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement, any other Program Document or any other documents prepared in connection herewith or therewith. Seller Party agrees to pay as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation search and filing fees and all the reasonable fees, disbursements and expenses of counsel to Buyer. Seller Party agrees to pay Buyer all the reasonable out of pocket due diligence, inspection, testing and review costs and expenses incurred by Buyer with respect to Mortgage Loans submitted by Seller for purchase under this Agreement, including, but not limited to, those out of pocket costs and expenses incurred by Buyer pursuant to Sections 14(a) and 16 hereof; provided, however, that Buyer shall be responsible for all costs and expenses incurred by Buyer in connection with Buyer’s initial on-site due diligence, inspection, testing and review of Seller Party. |
(c)
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The obligations of Seller Parties from time to time to pay the Repurchase Price, the Price Differential, the Obligations and all other amounts due under this Agreement
shall be full recourse obligations of each Seller Party.
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SECTION 15. SERVICING
(a)
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Seller shall service the Purchased Mortgage Loans as agent for Buyer and in accordance with prudent mortgage loan servicing standards and procedures generally accepted in
the mortgage banking industry and in accordance with all applicable requirements of the Agencies, Requirement of Law, the provisions of any applicable servicing agreement, and the requirements of any applicable Takeout Commitment and the
Approved Investor, so that the eligibility of the Mortgage Loan for purchase under such Takeout Commitment is not voided or reduced by such servicing and administration.
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(b)
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If any Mortgage Loan that is proposed to be sold on a Purchase Date is serviced by a servicer other than Seller (a “Subservicer”), or if the servicing of any
Mortgage Loan is to be transferred to a Subservicer, Seller shall provide a copy of the related servicing agreement and a Servicer Notice executed by such Subservicer (collectively, the “Servicing Agreement”) to Buyer prior to such
Purchase Date or servicing transfer date, as applicable. Each such Servicing Agreement shall be in form and substance acceptable to Buyer. In addition, Seller shall have obtained the prior written consent of Buyer for such Subservicer to
subservice the Mortgage Loans, which consent may be withheld in Buyer’s sole discretion. In no event shall Seller’s use of a Subservicer relieve Seller of its obligations hereunder, and Seller shall remain liable under this Agreement as if
Seller were servicing such Mortgage Loans directly.
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(c)
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Seller shall transfer actual servicing of each Purchased Mortgage Loan, together with all of the related Records in its possession, to Buyer’s designee and designate
Buyer’s designee as the servicer in the MERS System upon the earliest of (i) the occurrence of a Default or Event of Default hereunder, (ii) the termination of Seller as interim servicer by Buyer pursuant to this Agreement, (iii) the expiration
(and non-renewal) of the Servicing Term, or (iv) transfer of servicing to any entity approved by Buyer and the assumption thereof by such entity. Buyer shall have the right to terminate Seller as interim servicer of any of the Purchased
Mortgage Loans, which right shall be exercisable at any time in Buyer’s sole discretion, upon written notice. Seller’s transfer of the Records and servicing under this Section 15 shall be in accordance with customary standards in the industry
and such transfer shall include the transfer of the gross amount of all escrows held for the related mortgagors (without reduction for unreimbursed advances or “negative escrows”).
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(d)
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During the period Seller is servicing the Purchased Mortgage Loans as agent for Buyer, Seller agrees that Buyer is the owner of the related Credit Files and Records and Seller shall at all times maintain and safeguard and cause the Subservicer to maintain and safeguard the Credit File for the Purchased Mortgage Loans (including photocopies or images of the documents delivered to Buyer), and accurate and complete records of its servicing of the Purchased Mortgage Loan; Seller’s possession of the Credit Files and Records being for the sole purpose of servicing such Purchased Mortgage Loan and such retention and possession by Seller being in a custodial capacity only. |
(e)
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At Buyer’s request, Seller shall promptly deliver to Buyer reports regarding the status of any Purchased Mortgage Loan being serviced by Seller, which reports shall
include, but shall not be limited to, a description of any default thereunder for more than thirty (30) days or such other circumstances that could cause a material adverse effect on such Purchased Mortgage Loan, Buyer’s title to such Purchased
Mortgage Loan or the collateral securing such Purchased Mortgage Loan; Seller may be required to deliver such reports until the repurchase of the Purchased Mortgage Loan by Seller. Seller shall immediately notify Buyer if it becomes aware of
any payment default that occurs under the Purchased Mortgage Loan or any default under any Servicing Agreement that would materially and adversely affect any Purchased Mortgage Loan subject thereto.
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(f)
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Seller shall release its custody of the contents of any Credit File or Mortgage File only (i) in accordance with the written instructions of Buyer, (ii) upon the consent
of Buyer when such release is required as incidental to Seller’s servicing of the Purchased Mortgage Loan, is required to complete the Takeout Commitment or comply with the Takeout Commitment requirements, or (iii) as required by any applicable
Requirement of Law.
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(g)
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Buyer reserves the right to appoint a successor servicer at any time to service any Purchased Mortgage Loan (each a “Successor Servicer”) in its sole discretion.
If Buyer elects to make such an appointment due to a Default or Event of Default, Seller shall be assessed all costs and expenses incurred by Buyer associated with transferring the servicing of the Purchased Mortgage Loans to the Successor
Servicer. In the event of such an appointment, Seller shall perform all acts and take all action so that any part of the Credit File and related Records held by Seller, together with all funds in the Custodial Account and other receipts
relating to such Purchased Mortgage Loan, are promptly delivered to Successor Servicer, and shall otherwise reasonably cooperate with Buyer in effectuating such transfer. Seller shall have no claim for lost servicing income, lost profits or
other damages if Buyer appoints a Successor Servicer hereunder and the servicing fee is reduced or eliminated. For the avoidance of doubt any termination of the Servicer’s rights to service by the Buyer as a result of a Default or an Event of
Default shall be deemed part of an exercise of the Buyer’s rights to cause the liquidation, termination or acceleration of this Agreement.
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(h)
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For the avoidance of doubt, Seller retains no economic rights to the servicing of the Purchased Mortgage Loans provided that Seller shall continue to service the
Purchased Mortgage Loans hereunder as part of its Obligations hereunder. As such, Seller expressly acknowledges that the Purchased Mortgage Loans are sold to Buyer on a “servicing released” basis.
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SECTION 16. DUE DILIGENCE
Each Seller Party acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Mortgage Loans, Seller Parties, Settlement Agents, Approved Investors and other parties which may be involved in or related to Transactions (collectively, “Third Party Transaction Parties”), from time to time, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and the Seller Parties agree that upon reasonable prior notice to the Seller Parties, unless an Event of Default shall have occurred, in which case no notice is required, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession or under the control of any Seller Party. The Seller Parties will use best efforts to cause Third Party Transaction Parties to cooperate with any due diligence requests of Buyer. The Seller Parties shall also make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Mortgage Loans from Seller based solely upon the information provided by Seller to Buyer in the Mortgage Loan Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans purchased in a Transaction, including, without limitation, ordering broker’s price opinions, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan. Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller. Each Seller Party further agrees that it shall pay all out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 16.
SECTION 17. ASSIGNABILITY
The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by any Seller Party without the prior written consent of Buyer. Buyer may from time to time, with the consent of Seller (such consent to not be unreasonably withheld; provided that consent shall not be required if Buyer assigns its rights or obligations (x) to an Affiliate of Buyer or (ii) upon the occurrence of an Event of Default), assign all or a portion of its rights and obligations under this Agreement and the Program Documents to any party, including, without limitation, any affiliate of Buyer, pursuant to an executed assignment and acceptance by Buyer and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. 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 Buyer hereunder, and (b) Buyer shall, to the extent that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Program Documents. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in this Agreement express or implied, shall give to any Person, other than the parties to this Agreement and their successors hereunder, any benefit of any legal or equitable right, power,
remedy or claim under this Agreement. Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller.
Buyer may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement; provided, however, that (i) Buyer’s obligations under this Agreement shall remain unchanged, (ii) Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under this Agreement and the other Program Documents except as provided in Section 7.
Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 17, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to Seller or any of its Subsidiaries or to any aspect of the Transactions that has been furnished to Buyer by or on behalf of Seller or any of its Subsidiaries; provided that such assignee or participant agrees to hold such information subject to the confidentiality provisions of this Agreement.
In the event Buyer assigns all or a portion of its rights and obligations under this Agreement, the parties hereto agree to negotiate in good faith an amendment to this Agreement to add agency provisions similar to those included in agreements for similar syndicated repurchase facilities.
SECTION 18. TRANSFER AND MAINTENANCE OF REGISTER.
(a)
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Subject to acceptance and recording thereof pursuant to Section 18(b), from and after the effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of Buyer under this Agreement. Any assignment or transfer by Buyer of rights or obligations under
this Agreement that does not comply with this Section 17 and Section 18 shall be treated for purposes of this Agreement as a sale by such Buyer of a participation in such rights and obligations in accordance with Section 17 hereof.
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(b)
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Buyer shall maintain, on Seller’s behalf, a register (the “Register”) on which it will record each Assignment and Acceptance and participation. The Register shall
include the names and addresses of Buyer (including all assignees, successors and participants) and the percentage or portion of such rights and obligations assigned. Failure to make any such recordation, or any error in such recordation shall
not affect Seller’s obligations in respect of such rights.
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SECTION 19. HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS
Title to all Purchased Assets and Repurchase Assets shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets. Nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased
Assets to any Person, including without limitation, the Federal Home Loan Bank. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets delivered to Buyer by Seller.
SECTION 20. TAX TREATMENT
Notwithstanding anything to the contrary in this Agreement or any other Program Documents, each party to this Agreement acknowledges that it is its intent for U.S. federal, state and local income and franchise tax purposes to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets and the Purchased Assets as owned by Seller in the absence of a Default by Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by any Requirement of Law (in which case such party shall promptly notify the other party of such Requirement of Law).
SECTION 21. SET-OFF
In addition to any rights and remedies of Buyer hereunder and by law, Buyer shall have the right, without prior notice to any Seller Party, any such notice being expressly waived by each Seller Party to the extent permitted by applicable law to set off and appropriate and apply against any Obligation from any Seller Party or any Affiliate thereof to Buyer or any of its Affiliates any and all Property and deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims or cash, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from Buyer or any Affiliate thereof to or for the credit or the account of any Seller Party or any Affiliate thereof. Buyer may set-off cash, the proceeds of the liquidation of any Repurchase Assets and all other sums or obligations owed by Buyer or its Affiliates to a Seller Party or its Affiliates against all of Seller Party’s or its Affiliate’s obligations to Buyer or its Affiliates, whether under this Agreement or under any other agreement between the parties or between a Seller Party or its Affiliate and Buyer and any Affiliate of Buyer, or otherwise, whether or not such obligations are then due, without prejudice to Buyer’s or its Affiliate’s right to recover any deficiency. Buyer agrees promptly to notify the Seller Parties after any such set-off and application made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application.
Buyer shall at any time have the right, in each case until such time as Buyer determines otherwise, to retain, to suspend payment or performance of, or to decline to remit, any amount or property that Buyer would otherwise be obligated to pay, remit or deliver to Seller hereunder if an Event of Default or Default has occurred.
SECTION 22. TERMINABILITY
Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that Buyer may have had notice or knowledge or reason to believe that such representation or
warranty was false or misleading at the time the Transaction was made. Notwithstanding any such termination or the occurrence of an Event of Default, all of the representations and warranties and covenants hereunder shall continue and survive. The obligations of each Seller Party under Section 14 hereof shall survive the termination of this Agreement.
SECTION 23. NOTICES AND OTHER COMMUNICATIONS
Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by electronic transmission) delivered to the intended recipient at the addresses set forth below. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person. Except as otherwise provided in this Agreement and except for notices given under Section 3 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when transmitted electronically or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.
If to Seller:
Home Point Financial Corporation
1194 Oak Valley Drive, Suite 80
Ann Arbor, MI 48108
Attention: [***]
Telephone: [***]
Facsimile: [***]
Email: [***]
If to Buyer:
UBS Bank USA
1285 Avenue of the Americas
New York, NY 10019
Attention: [***]
Telephone: [***]
Facsimile: [***]
Email: [***]
With a copy to:
UBS Bank USA
153 West 51st Street
New York, NY 10019
Attention: [***]
Telephone: [***]
Email: [***]
And:
[***]
SECTION 24. USE OF THE WAREHOUSE ELECTRONIC SYSTEM AND OTHER ELECTRONIC MEDIA
Seller acknowledges and agrees that Buyer may require or permit certain transactions with Buyer be conducted electronically using Electronic Records and/or Electronic Signatures. Seller consents to the use of Electronic Records and/or Electronic Signatures whenever expressly required or permitted by Buyer and acknowledges and agrees that Seller shall be bound by its Electronic Signature and by the terms, conditions, requirements, information and/or instructions contained in any such Electronic Records.
Seller agrees to adopt as its Electronic Signature its user identification codes, passwords, personal identification numbers, access codes, a facsimile image of a written signature and/or other symbols or processes as provided or required by Buyer from time to time (as a group, any subgroup thereof or individually, hereinafter referred to as Seller’s Electronic Signature). Seller acknowledges that Buyer will rely on any and all Electronic Records and on Seller’s Electronic Signature transmitted or submitted to Buyer.
Buyer shall not be liable for the failure of either its or Seller’s internet service provider, or any other telecommunications company, telephone company, satellite company or cable company to timely, properly and accurately transmit any Electronic Record or fax copy.
Before engaging in Electronic Transactions with Seller, Buyer may provide Seller, or require Seller to create, user identification codes, passwords, personal identification numbers and/or access codes, as applicable, to permit access to Buyer’s computer information processing system. Each Person permitted access to the Warehouse Electronic System must have a separate identification code and password. Seller shall be fully responsible for protecting and safeguarding any and all user identification codes, passwords, personal identification numbers and access codes provided or required by Buyer. Seller shall adopt and maintain security measures to prevent the loss, theft or unauthorized or improper disclosure or use of any and all user identification codes, passwords, personal identification numbers and/or access codes by Persons other than the individual Person who is authorized to use such information. Seller shall notify Buyer immediately in the event (i) of any loss, theft or unauthorized disclosure or use of any of the user identification codes, passwords, personal identification numbers and/or access codes or (ii) Seller has any reason to believe there has been a breach of security or that its access to Warehouse Electronic System is no longer secure for any reason.
Seller understands and agrees that it shall be fully responsible for protecting and safeguarding its computer hardware and software from any and all (a) computer “viruses,” “time bombs,” “trojan horses” or other harmful computer information, commands, codes or programs that may cause or facilitate the destruction, corruption, malfunction or appropriation of, or damage or change to, any of Seller’s or Buyer’s computer information processing systems,
including without limitation, all hardware, software, Electronic Records, information, data and/or codes and (b) computer “worms,” “trap doors” or other harmful computer information, commands, codes or programs that enable unauthorized access to Seller’s and/or Buyer’s computer information processing systems, including without limitation, all hardware, software, Electronic Records, information, data and/or codes.
Seller agrees that Buyer may, in its sole discretion and from time to time, without limiting Seller’s liability set forth herein, establish minimum security standards that Seller must, at a minimum, comply with in an effort to (x) protect and safeguard any and all user identification codes, passwords, personal identification numbers and/or access codes from loss, theft or unauthorized disclosure or use; and (y) prevent the infiltration and “infection” of Seller’s hardware and/or software by any and all computer “viruses,” “time bombs,” “trojan horses,” “worms,” “trapdoors” or other harmful computer codes or programs.
If Buyer, from time to time, establishes minimum security standards, Seller shall comply with such minimum security standards within the time period established by Buyer. Buyer shall have the right to confirm Seller’s compliance with any such minimum security standards. Seller’s compliance with such minimum security standards shall not relieve Seller from any of its liability set forth herein.
Whether or not Buyer establishes minimum security standards, Seller shall continue to be fully responsible for adopting and maintaining security measures that are consistent with the risks associated with conducting electronic transactions with Buyer. Seller’s failure to adopt and maintain appropriate security measures or to comply with any minimum security standards established by Buyer may result in, among other things, termination of Seller’s access to Buyer’s computer information processing systems.
Each Seller Party understands and agrees that certain elements or components of the Warehouse Electronic System may be provided by third party vendors, and hereby holds Buyer harmless from any liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against Seller Party relating to or arising out of Seller’s use of the Warehouse Electronic System including without limitation, the use of any elements or components provided by third party vendors.
SECTION 25. ENTIRE AGREEMENT; SEVERABILITY; SINGLE AGREEMENT
This Agreement, together with the Program Documents, constitute the entire understanding between Buyer and Seller Parties with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Assets. By acceptance of this Agreement, Buyer and Seller Parties each acknowledge that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and each Seller Party agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that Buyer shall be entitled to set off claims and apply property held by it in respect of any Transaction against obligations owing to it in respect of any other Transaction hereunder; (iii) that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (iv) to promptly provide notice to the other after any such set off or application.
SECTION 26. GOVERNING LAW
THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AGREEMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER PARTY SHALL BE GOVERNED BY E-SIGN.
SECTION 27. SUBMISSION TO JURISDICTION; WAIVERS
BUYER AND EACH SELLER PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER PROGRAM DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 23 HEREOF OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTY SHALL HAVE BEEN NOTIFIED;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(v) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER PROGRAM DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 28. NO WAIVERS, ETC.
No failure on the part of Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Program Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Program Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.
SECTION 29. NETTING
If Buyer and Seller are “financial institutions” as now or hereinafter defined in Section 4402 of Title 12 of the United States Code (“Section 4402”) and any rules or regulations promulgated thereunder (a) all amounts to be paid or advanced by one party to or on behalf of the other under this Agreement or any Transaction hereunder shall be deemed to be “payment obligations” and all amounts to be received by or on behalf of one party from the other under this Agreement or any Transaction hereunder shall be deemed to be “payment entitlements” within the meaning of Section 4402, and this Agreement shall be deemed to be a “netting contract” as defined in Section 4402; (b) the payment obligations and the payment entitlements of the parties hereto pursuant to this Agreement and any Transaction hereunder shall be netted as follows. In
the event that either party (the “Defaulting Party”) shall fail to honor any payment obligation under this Agreement or any Transaction hereunder, the other party (the “Nondefaulting Party”) shall be entitled to reduce the amount of any payment to be made by the Nondefaulting Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor.
SECTION 30. CONFIDENTIALITY
Buyer and each Seller Party hereby acknowledge and agree that all written or computer-readable information provided by one party to any other regarding the terms set forth in any of the Program Documents or the Transactions contemplated thereby (the “Confidential Terms”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to do so in working with legal counsel, auditors, taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, (ii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, (iii) in the event of an Event of Default Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Assets or otherwise to enforce or exercise Buyer’s rights hereunder or (iv) by Buyer in connection with any marketing material undertaken by Buyer.
Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Document, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that no Seller Party or Subsidiary or Affiliate thereof may disclose the name of or identifying information with respect to Buyer, its Affiliates or any other Indemnified Party, or any pricing terms (including, without limitation, the Pricing Rate, Warehouse Fees and, Purchase Price) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior written consent of Buyer. The provisions set forth in this Section 30 shall survive the termination of this Agreement.
SECTION 31. INTENT
(a)
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The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the Bankruptcy Code, as amended and a “securities contract” as that term is defined in Section 741 of Title 11 of the Bankruptcy Code, as amended and that all payments hereunder are deemed “margin payments” or “settlement payments” as defined in Title 11 of the Bankruptcy Code and that the pledge of the Repurchase Assets constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. The parties further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a). |
(b)
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This Agreement is intended to be a “repurchase agreement” and a “securities contract,” within the meaning of Section 555 and Section 559 under the Bankruptcy Code. It is
understood that either party’s right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Section 13 hereof is a contractual right to liquidate such Transaction as
described in Sections 555 and 559 of Title 11 of the Bankruptcy Code, as amended; any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” as
such term is defined in Bankruptcy Code Section 741(5).
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(c)
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The parties hereby agree that any provisions hereof or in any other document, agreement or instrument that is related in any way to the servicing of the Purchased
Mortgage Loans shall be deemed “related to” this Agreement within the meaning of Sections 101(38A)(A) and 101(47)(A)(v) of the Bankruptcy Code and part of the “contract” as such term is used in Section 741 of the Bankruptcy Code.
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(d)
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The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended
(“FDIA”), then each Transaction hereunder is a “qualified financial contract,” a “repurchase agreement” and a “securities contract” as such terms are defined in FDIA and any rules, orders or policy statements thereunder.
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(e)
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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).
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(f)
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Each party intends that this Agreement constitutes and shall be construed and interpreted as a “master netting agreement” within the meaning of and as such terms are used
in Section 561 of the Bankruptcy Code and each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, this Agreement constitutes a contract which (i) is between all of the parties and
(ii) places each party in the same right and capacity.
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SECTION 32. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that (a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder and (b) in the case of Transactions in which one of the
parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
SECTION 33. CONFLICTS
In the event of any conflict between the terms of this Agreement, any other Program Document and any Confirmation, the documents shall control in the following order of priority: first, the terms of the Confirmation shall prevail, then the terms of this Agreement shall prevail, and then the terms of the other Program Document shall prevail.
SECTION 34. MISCELLANEOUS
(a)
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Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed counterpart of a signature page of this Agreement in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a
manually executed original counterpart of this Agreement.
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(b)
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Captions. The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any
provision of this Agreement.
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(c)
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Acknowledgment. Each Seller Party hereby acknowledges that (i) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the
other Program Documents; (ii) Buyer has no fiduciary relationship to Seller Party; and (iii) no joint venture exists between Buyer and Seller Party.
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(d)
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Documents Mutually Drafted. Seller Parties and Buyer agree that this Agreement each other Program Document prepared in connection with the Transactions set forth
herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.
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(e)
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Amendments. This Agreement and each other Program Document may be amended from time to time, in writing and duly executed by the parties hereto.
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(f)
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Acknowledgement of Anti Predatory Lending Policies. Buyer has in place internal policies and procedures that expressly prohibit its purchase of any High Cost
Mortgage Loan.
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(g)
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Authorizations. Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for Seller Party, under this Agreement. |
SECTION 35. GENERAL INTERPRETIVE PRINCIPLES
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender; (b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (c) references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement; (d) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions; (e) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; (f) the term “include” or “including” shall mean without limitation by reason of enumeration; (g) all times specified herein or in any other Program Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and (h) all references herein or in any Program Document to “good faith” means good faith as defined in Section 1-201(19) of the UCC as in effect in the State of New York.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.
BUYER: | ||
UBS BANK USA | ||
By: | /s/ Gary Timmerman | |
Name: Gary Timmerman | ||
Title: Managing Director | ||
By: | /s/ Steve Stewert | |
Name: Steve Stewert | ||
Title: CCO |
Signature Page to the Master Repurchase Agreement
SELLER: | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | /s/ William A. Newman | |
Name: William A. Newman | ||
Title: CEO/President |
Signature Page to the Master Repurchase Agreement
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer, with respect to each Mortgage Loan, that as of the Purchase Date for the purchase of any Purchased Mortgage Loans by Buyer from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while the Program Documents and any Transaction hereunder is in full force and effect, that the following are true and correct. For purposes of this Schedule 1 and the representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to a Mortgage Loan if and when Seller has taken or caused to be taken action such that the event, circumstance or condition that gave rise to such breach no longer adversely affects such Mortgage Loan. With respect to those representations and warranties which are made to the best of Seller’s knowledge, if it is discovered by Seller or Buyer that the substance of such representation and warranty is inaccurate, notwithstanding Seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation and warranty.
(a)
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Mortgage Loans as Described. The information set forth in the Mortgage Loan Schedule is complete, true and correct.
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(b)
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Payments Current. No payment required under the Mortgage Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan been 30 days or more delinquent
at any time since the origination of the Mortgage Loan; and, if the Mortgage Loan is a Co-op Loan, no foreclosure action or private or public sale under the Uniform Commercial Code has ever to the knowledge of Seller, been threatened or commenced
with respect to the Co-op Loan.
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(c)
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Origination Date. Unless otherwise approved by Buyer, the initial Purchase Date is no more than (i) with respect to Mortgage Loans other than Correspondent Mortgage
Loans in non-escrow states, [***] following the origination date of the Mortgage Note; (ii) with respect to Mortgage Loans other than Correspondent Mortgage Loans in escrow states, [***] following the origination date of the Mortgage Note and
(iii) with respect to Correspondent Mortgage Loans, [***] following the origination date of the Mortgage Note.
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(d)
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Approved Underwriting Guidelines. The Mortgage Loan satisfies the Approved Underwriting Guidelines.
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(e)
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No Outstanding Charges. There are no defaults in complying with the terms of the Mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest. |
Sch. 1-1
(f)
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Original Terms Unmodified. The terms of the Mortgage Note (and the Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with respect to each Co-op
Loan) and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been
delivered to the Custodian or to such other Person as Buyer shall designate in writing, and the terms of which are reflected in the Mortgage Loan Schedule. The substance of any such waiver, alteration or modification has been approved by the
issuer of any related PMI Policy and the title insurer, if any, to the extent required by the policy, and its terms are reflected on the Mortgage Loan Schedule, if applicable. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement, approved by the issuer of any related PMI Policy and the issuer of the title insurer, to the extent required by the policy, and which assumption agreement is part of the Mortgage File delivered to the
Custodian or to such other Person as Buyer shall designate in writing and the terms of which are reflected in the Mortgage Loan Schedule.
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(g)
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No Defenses. The Mortgage Loan (and the Assignment of Proprietary Lease related to each Co-op Loan) is not subject to any right of rescission, set-off, counterclaim or
defense, including without limitation the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including without limitation the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect
thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or insolvency proceeding at, or subsequent to, the time the Mortgage Loan was originated.
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(h)
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Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings or other improvements upon the Mortgaged Property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are provided for in the Fannie Mae guides or by Freddie Mac, as well as all additional requirements set forth in the Approved Underwriting Guidelines. If required by the National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration as in effect which policy conforms to Fannie Mae and Freddie Mac, as well as all additional requirements set forth in the Servicing Agreement. All individual insurance policies contain a standard mortgagee clause naming Seller and its successors and assigns as mortgagee, and all premiums thereon have been paid and such policies may not be reduced, terminated or cancelled without 30 days’ prior written notice to the mortgagee. The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and expense, and to seek reimbursement therefor from the Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of Buyer upon the consummation of the transactions contemplated by this Agreement. Seller has not engaged in, and has no knowledge of the Mortgagor’s or any servicer’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of such policy, including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by Seller. |
Sch. 1-2
(i)
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Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, anti-predatory lending laws, laws covering fair housing, fair credit reporting, community reinvestment, homeowners equity protection, equal credit opportunity, mortgage reform and disclosure laws
or unfair and deceptive practices laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations. Seller shall maintain in its
possession, available for Buyer’s inspection, and shall deliver to Buyer upon demand, evidence of compliance with all requirements set forth herein.
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(j)
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No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission. Seller has not waived the performance by the Mortgagor of any action,
if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
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(k)
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Location and Type of Mortgaged Property. The Mortgaged Property is a fee simple property located in the state identified in the Mortgage Loan Schedule except that with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, the Mortgaged Property may be a leasehold estate and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual residential condominium or Co-op Unit in a low-rise or high-rise condominium or Co-op Project, or an individual unit in a planned unit development and that no residence or dwelling is (i) a mobile home or (ii) a manufactured home, provided, however, that any condominium or Co-op Unit or planned unit development shall not fall within any of the “Ineligible Projects” of part VIII, Section 102 of the Fannie Mae Selling Guide and shall conform with the Approved Underwriting Guidelines. The Mortgaged Property is not raw land. In the case of any Mortgaged Properties that are manufactured homes (a “Manufactured Home Mortgage Loans”), (i) such Manufactured Home Mortgage Loan conforms with the applicable FHA, VA, RD, Fannie Mae or Freddie Mac requirements regarding mortgage loans related to manufactured dwellings, (ii) the related manufactured dwelling is permanently affixed to the land, (iii) the related manufactured dwelling and the related land are subject to a Mortgage properly filed in the appropriate public recording office and naming Seller as mortgagee, (iv) the applicable laws of the jurisdiction in which the related Mortgaged Property is located will deem the manufactured dwelling located on such Mortgaged Property to be a part of the real property on which such dwelling is located, and (v) such Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the Code and (y) secured by manufactured housing treated as a single family residence under Section 25(e)(10) of the Code. As of the date of origination, no portion of the Mortgaged Property was used for commercial purposes, and since the date of origination, no portion of the Mortgaged Property has been used for commercial purposes; provided, that Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other than those commonly used for homeowner repair, maintenance and/or household purposes. |
Sch. 1-3
(l)
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Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to such Mortgage Loan is
located in any jurisdiction other than the United States of America or the District of Columbia.
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(m)
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Valid First Lien. Each Mortgage is a valid and subsisting first lien of record on a single parcel of real estate constituting the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at
any time, subject in all cases to the exceptions to title set forth in the title insurance policy with respect to the related Mortgage Loan, which exceptions are generally acceptable to prudent mortgage lending companies, and such other
exceptions to which similar properties are commonly subject and which do not individually, or in the aggregate, materially and adversely affect the benefits of the security intended to be provided by such Mortgage. The lien of the Mortgage is
subject only to:
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(i)
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the lien of current real property taxes and assessments not yet due and payable.
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(ii)
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covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) specifically referred to or otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal; and
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(iii)
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other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property.
|
Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting, enforceable and perfected first lien and first priority security interest on the property described therein and Seller has full right to sell and assign the same to Buyer. The Mortgaged Property was not, as of the
Sch. 1-4
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.
(n)
|
Validity of Mortgage Documents. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor in connection with a Mortgage Loan are
genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by other such related parties. The
documents, instruments and agreements submitted for loan underwriting were not falsified and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and
statements therein not misleading. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the origination or servicing of the Mortgage Loan or in the application or any insurance in relation to such Mortgage Loan. Seller has reviewed all of the documents constituting
the Mortgage File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein.
|
(o)
|
Full Disbursement of Proceeds. The Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future
advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage. All points and fees related to each Mortgage Loan were disclosed in writing
to the Mortgagor in accordance with applicable state and federal law and regulation. No Mortgagor was charged “points and fees” (whether or not financed) in an amount that exceeds 3% of the total loan amount (or such other applicable limits for
lower balance Mortgages) as specified under 12 CFR 1026.43(e)(3), and the points and fees were calculated using the calculation required for qualified mortgages under 12 CFR 1026.32(b) to determine compliance with applicable requirements.
|
(p)
|
Ownership. Seller is the sole owner of record and holder of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage Loans to Buyer, Seller will retain the Mortgage Files or any part thereof with respect thereto not delivered to the Custodian, Buyer or Buyer’s designee, in trust only for the purpose of servicing and supervising the servicing of each Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Seller has good, indefeasible and marketable title thereto, and has full right to transfer and sell the Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign each Mortgage Loan (and with respect to any Co-op Loan, the sole owner of the related Assignment of Proprietary Lease) pursuant to this Agreement and following the sale of each Mortgage Loan, Buyer will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest. Seller intends to relinquish all rights to possess, control and monitor the Mortgage Loan. |
Sch. 1-5
(q)
|
Doing Business. All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (1) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (2) either (i) organized under the laws of such state, or
(ii) qualified to do business in such state, or (iii) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (3) not doing business in such state.
|
(r)
|
LTV, PMI Policy. No Conforming Mortgage Loan has an LTV greater than [***] The LTV of the Conforming Mortgage Loan either is not more than [***] or the excess over
[***] of the Appraised Value is and will be insured as to payment defaults by a PMI Policy until the LTV of such Conforming Mortgage Loan is reduced to [***]. All provisions of such PMI Policy have been and are being complied with, such policy is
in full force and effect, and all premiums due thereunder have been paid. No action, inaction, or event has occurred and no state of facts exists that has, or will result in the exclusion from, denial of, or defense to coverage. Any Conforming
Mortgage Loan subject to a PMI Policy obligates the Mortgagor thereunder to maintain the PMI Policy and to pay all premiums and charges in connection therewith. The Mortgage Interest Rate for the Conforming Mortgage Loan as set forth on the
Mortgage Loan Schedule is net of any such insurance premium. The LTV of any HARP Mortgage Loan is no greater than [***] if such Mortgage Loan is (i) a fixed-rate Mortgage Loan with a term in excess of [***] or (ii) an adjustable-rate Mortgage
Loan with an initial fixed period greater than or equal to five years, unless otherwise approved by Buyer in its sole discretion.
|
(s)
|
Title Insurance. The Mortgage Loan is covered by an ALTA lender’s title insurance policy, or with respect to any Mortgage Loan for which the related Mortgaged Property is located in California a CLTA lender’s title insurance policy, or other generally acceptable form of policy or insurance acceptable to Fannie Mae or Freddie Mac and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (i), (ii) and (iii) of paragraph (m) of this Schedule 1, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress, and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder of the related Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person or entity, and no such unlawful items have been received, retained or realized by Seller. |
Sch. 1-6
(t)
|
No Defaults. Other than payments due but not yet 30 days or more delinquent, there is no default, breach, violation or event which would permit acceleration existing
under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event which would permit acceleration, and
neither Seller nor any of its affiliates nor any of their respective predecessors, have waived any default, breach, violation or event which would permit acceleration; and with respect to each Co-op Loan, there is no default in complying with the
terms of the Mortgage Note, the Assignment of Proprietary Lease and the Proprietary Lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been
paid, and Seller has the right under the terms of the Mortgage Note, Assignment of Proprietary Lease and Recognition Agreement to pay any maintenance charges or assessments owed by the Mortgagor.
|
(u)
|
No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage.
|
(v)
|
Location of Improvements; No Encroachments. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation.
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(w)
|
Origination; Payment Terms. Except with respect to a Correspondent Mortgage Loan, the Mortgage Loan was originated by Seller. Seller is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or other similar institution which is supervised and examined by a federal or state authority. The documents, instruments and agreements submitted for loan underwriting were not falsified and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading. No Mortgage Loan contains terms or provisions which would result in negative amortization. Principal payments on the Mortgage Loan commenced no more than sixty days after funds were disbursed in connection with the Mortgage Loan. The mortgage interest rate as well as the lifetime rate cap and the periodic cap are as set forth on the Mortgage Loan Schedule. The Mortgage Note is payable in equal monthly installments of principal and interest, which installments of interest, with respect to adjustable rate Mortgage Loans, are subject to change due to the adjustments to the mortgage interest rate on each interest rate adjustment date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty years from commencement of amortization. Unless otherwise specified, the Mortgage Loan is payable on the first day of each month. There are no Mortgage Loans which contain a provision allowing the Mortgagor to convert the Mortgage Note from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note. |
Sch. 1-7
(x)
|
Customary Provisions. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a
Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There
is no homestead or other exemption or other right available to the Mortgagor or any other person, or restriction on Seller or any other person, including without limitation, any federal, state or local, law, ordinance, decree, regulation,
guidance, attorney general action, or other pronouncement, whether temporary or permanent in nature, that would interfere with, restrict or delay, either (y) the ability of Seller, Buyer or any servicer or any successor servicer to sell the
related Mortgaged Property at a trustee’s sale or otherwise, or (z) the ability of Seller, Buyer or any servicer or any successor servicer to foreclose on the related Mortgage.
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(y)
|
Conformance with Agency and Approved Underwriting Guidelines. The Mortgage Loan was underwritten in accordance with the Approved Underwriting Guidelines (a copy of
which has been delivered to Buyer). The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac, Fannie Mae or FHA, as applicable, and Seller has not made any representations to a Mortgagor that are inconsistent with the mortgage
instruments used. The methodology used in underwriting the extension of credit for each Mortgage Loan employs objective quantitative principles which relate the Mortgagor’s credit characteristics, income, assets and liabilities (as applicable to
a particular underwriting program) to the proposed payment, and such underwriting methodology does not rely on the extent of the Mortgagor’s equity in the collateral as the principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination (application/approval) the Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan.
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(z)
|
Occupancy of the Mortgaged Property. The Mortgaged Property is lawfully occupied under applicable law. All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained
from the appropriate authorities.
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(aa)
|
No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of
any applicable security agreement or chattel mortgage referred to in clause (j) above.
|
Sch. 1-8
(bb)
|
Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
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(cc)
|
Acceptable Investment. There are no circumstances or conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage File or the
Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during any period materially faster or slower than the mortgage loans originated by Seller generally.
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(dd)
|
Delivery of Mortgage Documents. The Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered under the Custodial
Agreement for each Mortgage Loan have been delivered to the Custodian. Seller is in possession of a complete, true and accurate Mortgage File, except for such documents the originals of which have been delivered to the Custodian.
|
(ee)
|
Condominiums/Planned Unit Developments. If the Mortgaged Property is a condominium unit or a planned unit development (other than a de minimis planned unit development)
such condominium or planned unit development project is (i) acceptable to Fannie Mae or Freddie Mac or (ii) located in a condominium or planned unit development project which has received project approval from Fannie Mae or Freddie Mac. The
representations and warranties required by Fannie Mae with respect to such condominium or planned unit development have been satisfied and remain true and correct.
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(ff)
|
Transfer of Mortgage Loans. The Assignment of Mortgage with respect to each Mortgage Loan is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located. The transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by Seller are not subject to the bulk transfer or similar statutory provisions in effect in any applicable
jurisdiction.
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(gg)
|
Due-On-Sale. The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder, and to the best of Seller’s knowledge, such provision is enforceable.
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(hh)
|
Assumability. No Mortgage Loan is assumable.
|
(ii)
|
No Buydown Provisions; No Graduated Payments or Contingent Interests. Unless otherwise permitted by an Agency, the Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature. |
Sch. 1-9
(jj)
|
Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien
priority by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae and Freddie Mac and/or FHA, as applicable. The consolidated principal amount
does not exceed the original principal amount of the Mortgage Loan.
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(kk)
|
Mortgaged Property Undamaged; No Condemnation Proceedings. There is no proceeding pending or threatened for the total or partial condemnation of the Mortgaged Property.
The Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair.
|
(ll)
|
Collection Practices; Escrow Deposits; Interest Rate Adjustments. The origination, servicing and collection practices used by Seller with respect to the Mortgage Loan
have been in all respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper and prudent in the mortgage origination and servicing business. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of, or under the control of, Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal law and the provisions of the related Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due Seller have been capitalized under the Mortgage or the Mortgage
Note. All mortgage interest rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage and Mortgage Note on the related interest rate adjustment date. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the mortgage interest rate, the same index was used with respect to each Mortgage Note which required a new index to be selected, and such selection did not conflict with the terms of the
related Mortgage Note. Seller executed and delivered any and all notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the mortgage interest rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly paid and credited.
|
(mm)
|
No Violation of Environmental Laws. The Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any environmental law, rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property. |
Sch. 1-10
(nn)
|
Servicemembers Civil Relief Act of 2003. The Mortgagor has not notified Seller, and Seller has no knowledge of any relief requested or allowed to the Mortgagor under
the Servicemembers Civil Relief Act of 2003.
|
(oo)
|
Appraisal. The Mortgage File contains an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by a qualified
appraiser, duly appointed by Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and
the appraisal and appraiser both satisfy the requirements of Fannie Mae, Freddie Mac or FHA and Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated, or with respect to a HARP Mortgage Loan, a duly executed property inspection waiver, fieldwork waiver, or other such similar document as required by the applicable Agency.
|
(pp)
|
Disclosure Materials. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by, and Seller has complied
with, all applicable law with respect to the making of the Mortgage Loans. Seller shall maintain such statement in the Mortgage File.
|
(qq)
|
Construction or Rehabilitation of Mortgaged Property. Unless otherwise approved by Buyer in writing and other than with respect to FHA 203k and 203b Mortgage Loans and
the Fannie Mae re-hab program, 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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(rr)
|
Value of Mortgaged Property. Seller has no knowledge of any circumstances existing that could reasonably be expected to adversely affect the value or the marketability
of any Mortgaged Property or Mortgage Loan or to cause the Mortgage Loans to prepay during any period materially faster or slower than similar mortgage loans held by Seller generally secured by properties in the same geographic area as the
related Mortgaged Property.
|
(ss)
|
No Defense to Insurance Coverage. Seller has caused or will cause to be performed any and all acts required to preserve the rights and remedies of Buyer in any insurance policies applicable to the Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of coinsured, joint loss payee and mortgagee rights in favor of Buyer. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any applicable, special hazard insurance policy, or applicable PMI Policy or bankruptcy bond (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay. |
Sch. 1-11
(tt)
|
Escrow Analysis. With respect to each Mortgage, Seller has within the last twelve months (unless such Mortgage was originated within such twelve month period) analyzed
the required Escrow Payments for each Mortgage and adjusted the amount of such payments so that, assuming all required payments are timely made, any deficiency will be eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with Real Estate Settlement Procedures Act and any other applicable law.
|
(uu) |
Prior Servicing. Each Mortgage Loan has been serviced in all material respects in strict compliance with Accepted Servicing Practices.
|
(vv)
|
Credit Information. As to each consumer report (as defined in the Fair Credit Reporting Act, Public Law 91-508) or other credit information furnished by Seller to
Buyer, that Seller has full right and authority and is not precluded by law or contract from furnishing such information to Buyer and Buyer is not precluded from furnishing the same to any subsequent or prospective purchaser of such Mortgage.
Seller shall hold Buyer harmless from any and all damages, losses, costs and expenses (including attorney’s fees) arising from disclosure of credit information in connection with Buyer’s secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto.
|
(ww)
|
Leaseholds. If the Mortgage Loan is secured by a long-term residential lease, (1) the lessor under the lease holds a fee simple interest in the land; (2) the terms of
such lease expressly permit the mortgaging of the leasehold estate, the assignment of the lease without the lessor’s consent and the acquisition by the holder of the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially similar protections; (3) the terms of such lease do not (A) allow the termination thereof upon the lessee’s default without the holder of the Mortgage being entitled to receive
written notice of, and opportunity to cure, such default, (B) allow the termination of the lease in the event of damage or destruction as long as the Mortgage is in existence, (C) prohibit the holder of the Mortgage from being insured (or
receiving proceeds of insurance) under the hazard insurance policy or policies relating to the Mortgaged Property or (D) permit any increase in rent other than pre-established increases set forth in the lease; (4) the original term of such lease
is not less than 15 years; (5) the term of such lease does not terminate earlier than five years after the maturity date of the Mortgage Note; and (6) the Mortgaged Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice.
|
Sch. 1-12
(xx)
|
Prepayment Penalty. No Mortgage Loan is subject to a prepayment penalty such that an amount in excess of the unpaid principal balance is due by the Mortgagor if
Mortgagor prepays the Mortgage Loan prior to the maturity date of such Mortgage Loan.
|
(yy)
|
Predatory Lending Regulations; High Cost Loans. No Mortgage Loan (i) is classified as High Cost Mortgage Loans or (ii) is subject to Section 226.32 of Regulation Z or
any similar state law (relating to high interest rate credit/lending transactions). No Mortgagor was encouraged or required to select a Mortgage Loan product offered by Seller or the originator which is a higher cost product designed for less
creditworthy borrowers, unless at the time of the Mortgage Loan’s origination, such Mortgagor did not qualify taking into account credit history and debt to income ratios for a lower cost credit product then offered by Seller or originator. If,
at the time of loan application, the Mortgagor qualified for a lower cost credit product then offered by Seller or the originator’s standard mortgage channel (if applicable), Seller or the originator directed the Mortgagor towards such standard
mortgage channel, or offered such lower-cost credit product to the Mortgagor.
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(zz)
|
Ohio Stated Income Exclusion. Each Mortgage Loan with an origination date on or after January 1, 2007 which is secured by Mortgaged Property located in Ohio was
originated pursuant to a program which requires verification of the borrower’s income in accordance with “Full and Alternative Documentation” programs as described within the Approved Underwriting Guidelines.
|
(aaa)
|
Origination. No predatory or deceptive lending practices, including, without limitation, the extension of credit without regard to the ability of the Mortgagor to repay
and the extension of credit which has no apparent benefit to the Mortgagor, were employed in the origination of the Mortgage Loan.
|
(bbb)
|
Single-premium Credit or Life Insurance Policy. In connection with the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were used to purchase any
single premium credit insurance policy (e.g., life, mortgage, disability, accident, unemployment, or health insurance product) or debt cancellation agreement as a condition of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit insurance policy (e.g., life, mortgage, disability, accident, unemployment, or health insurance product) or debt cancellation agreement in connection with the origination of the Mortgage Loan; No proceeds from any Mortgage
Loan were used to purchase single premium credit insurance policies (e.g., life, mortgage, disability, accident, unemployment, or health insurance product) or debt cancellation agreements as part of the origination of, or as a condition to
closing, such Mortgage Loan.
|
(ccc)
|
Tax Service Contract; Flood Certification Contract. Each Mortgage Loan is covered by a paid in full, life of loan, tax service contract and a paid in full, life of
loan, flood certification contract and each of these contracts is assignable to Buyer.
|
(ddd)
|
Qualified Mortgage. Each Mortgage Loan satisfies the following criteria: (i) such Mortgage Loan is a Qualified Mortgage; (ii) prior to the origination of such Mortgage Loan, the related originator made a reasonable and good faith determination that the related Mortgagor would have a reasonable ability to repay such Mortgage Loan according to its terms, in accordance with, at a minimum, the eight underwriting factors set forth in 12 CFR 1026.43(c)(2); and (iii) such Mortgage Loan is supported by documentation that evidences compliance with the Ability to Repay Rule and the QM Rule. |
Sch. 1-13
(eee)
|
Ability to Repay Determination. There is no action, suit or proceeding instituted by or against or threatened against Seller in any federal or state court or before any commission or other regulatory body (federal, state or local, foreign or domestic) that questions or challenges the compliance of such Mortgage Loan (or the related underwriting) with the Ability to Repay Rule or the QM Rule. |
(fff)
|
Regarding the Mortgagor. The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such “living
trust” is in compliance with Fannie Mae guidelines for such trusts.
|
(ggg)
|
Recordation. Each original Mortgage was recorded and, except for those Mortgage Loans subject to the MERS identification system, all subsequent assignments of the
original Mortgage (other than the assignment to Buyer) have been recorded in the appropriate jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of Seller, or is in the process of being recorded.
|
(hhh)
|
FICO Scores. Other than with respect to (i) FHA, VA and RD streamlined Mortgage Loans or as permitted by the Agencies and (ii) Mortgage Loans where the related
Mortgagor is a foreign national, each Mortgage Loan has a non-zero FICO score.
|
(iii)
|
Georgia Mortgage Loans. There is no Mortgage Loan that was originated on or after March 7, 2003 that is a “high cost home loan” as defined under the Georgia Fair
Lending Act.
|
(jjj)
|
Illinois Mortgage Loans. All Mortgage Loans originated on or after September 1, 2006 secured by property located in Cook County, Illinois are recordable at the time of
origination.
|
(kkk)
|
Subprime Mortgage Loans. No Mortgage Loan is a “Subprime Home Loan” as defined in New York Banking Law 6-m, effective September 1, 2008.
|
(lll)
|
Balloon Mortgage Loans. No Mortgage Loan is a balloon mortgage loan that has an original stated maturity of less than seven (7) years.
|
(mmm)
|
Adjustable Rate Mortgage Loans. Each Mortgage Loan that is an adjustable rate Mortgage Loan and that has a residential loan application date on or after September 13,
2007, complies in all material respects with the Interagency Statement on Subprime Mortgage Lending, 72 FR 37569 (July 10, 2007), regardless of whether the Mortgage Loan’s originator or Seller is subject to such statement as a matter of law.
|
(nnn)
|
Agency Mortgage Loans. Each Mortgage Loan that is subject to a Takeout Commitment with an Agency as the Approved Investor had a principal balance at its origination
that did not exceed such Agency’s conforming loan limits as of the Purchase Date.
|
Sch. 1-14
(ooo)
|
Nontraditional Mortgage Loan. Each Mortgage Loan that is a “nontraditional mortgage loan” within the meaning of the Interagency Guidance on Nontraditional Mortgage
Product Risks, 71 FR 58609 (October 4, 2006), and that has a residential loan application date on or after September 13, 2007, complies in all material respects with such guidance, regardless of whether the Mortgage Loan’s originator or Seller is
subject to such guidance as a matter of law.
|
(ppp)
|
Mandatory Arbitration. No Mortgage Loan is subject to mandatory arbitration.
|
(qqq)
|
Federal Home Loan Bank. No Mortgage Loan sold by Seller hereunder is expressly prohibited by the Federal Home Loan Bank of New York’s Member Products Guide.
|
(rrr)
|
Wet Loans. With respect to each Mortgage Loan that is a Wet Loan, (i) if requested by Buyer, such Mortgage Loan (other than a Mortgage Loan originated in the State of
New York) is covered by a duly authorized, executed, delivered and enforceable Closing Protection Letter, and (ii) the Settlement Agent has been instructed in writing by the applicable Seller to hold the related Mortgage Loan documents as agent
and bailee for Buyer or Buyer agent and to promptly forward such Mortgage Loan documents to Custodian.
|
(sss)
|
Takeout Commitment. Unless otherwise approved by Buyer, each Purchased Asset is (a) eligible for sale to at least two (2) Approved Investors or (b) covered by a Takeout
Commitment (i) that does not exceed the availability under such Takeout Commitment (taking into consideration mortgage loans which have been purchased by the respective Approved Investor under the Takeout Commitment and mortgage loan which Seller
has identified to Buyer as covered by such Takeout Commitment); (ii) conforms to the requirements and the specifications set forth in such Takeout Commitment and the related regulations, rules, requirements and/or handbooks of the applicable
Approved Investor and (iii) is eligible for sale to and insurance or guaranty by, respectively the applicable Approved Investor and applicable insurer. Each Takeout Commitment is a legal, valid and binding obligation of Seller enforceable against
it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
|
(ttt)
|
Prior Financing. Other than with respect to a Correspondent Mortgage Loan and unless otherwise agreed to by Buyer, no Mortgage Loan has been subject to any other
repurchase agreement or credit facility prior to the initial Purchase Date of such Mortgage Loan.
|
(uuu)
|
HECM Loans. With respect to each HECM Loan (i) all of the related Mortgage Loan documents, including the Mortgage Note, are in a form required by, or acceptable under, the HUD handbook provisions relating to reverse mortgage loans; (ii) all requirements as to any improvement and/or repair to the Mortgaged Property and to the disbursement of set-aside amounts for such HECM Loan have been complied with; (iii) all advances of principal secured by the related Mortgage are consolidated and such consolidated principal amount bears a single interest rate as set forth in the Mortgage Loan Schedule; (iv) no portion of any proceeds of such HECM Loan received by the related Mortgagor on the closing date of such HECM Loan were disbursed at the closing for any purpose prohibited under the HUD handbook provisions relating to reverse mortgage loans (including, without limitation, for estate planning purposes); (v) the outstanding principal balance of the HECM Loan does not exceed the lesser of (x) 98% of the maximum claim amount and (y) the related principal limit; (vi) all advances of principal made on such HECM Loan (A) shall automatically become subject to a Transaction under this Agreement without the requirement of Buyer to remit any additional Purchase Price and (B) with the Seller disbursing such advances of principal to the related Mortgagor with its own funds and not the funds of any third party lender; (vii) such HECM Loan is eligible to be pooled into an HECM mortgage-backed security, but no participation in such HECM Loan shall have been pooled into an HECM mortgage-backed securitization; (viii) the related Mortgaged Property is lawfully occupied by the Mortgagor as such Mortgagor’s primary residence; (ix) the related principal limit, all scheduled payments and other calculation terms have each been calculated in accordance with and comply with all requirements of the HUD handbook provisions relating to reverse mortgage loans; (x) such HECM Loan bears interest at a rate of interest permitted in accordance with the provisions of the HUD handbook provisions relating to reverse mortgage loans; (xi) no Mortgagor under such HECM Loan is less than sixty-two (62) years old and is otherwise an eligible Mortgagor in accordance with the requirements of the HUD handbook provisions relating to reverse mortgage loans; (xii) each Mortgagor has received all counseling required under the HUD handbook provisions relating to reverse mortgage loans and (xiii) the Custodian holds the related Mortgage Note (except for Wet Loans). |
Sch. 1-15
(vvv)
|
Borrower Benefit. Each HARP Mortgage Loan, as of the date of origination, meets the borrower benefit requirements as defined by the Agency.
|
(www)
|
Co-op Loan: Valid First Lien. With respect to each Co-op Loan, the related Mortgage is a valid, enforceable and subsisting first security interest on the related Co-op
Shares securing the related Proprietary Lease, subject only to (a) liens of the Co-op Corporation for unpaid assessments representing the Mortgagor’s pro rata share of the Co-op Corporation’s payments for its blanket mortgage, current and future
real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of
the security intended to be provided by the security interest. There are no liens against or security interests in the Co-op Shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related
cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority equal to or over Seller’s security interest in such Co-op Shares.
|
(xxx)
|
Co-op Loan: Compliance with Law. With respect to each Co-op Loan, the related Co-op Corporation that owns title to the related Co-op Project is a “cooperative housing
corporation” within the meaning of Section 216 of the Internal Revenue Code, and is in material compliance with applicable federal, state and local laws which, if not complied with, could have a material adverse effect on the Mortgaged Property.
|
(yyy)
|
Co-op Loan: No Pledge. With respect to each Co-op Loan, there is no prohibition against pledging the Co-op Shares or assigning the Proprietary Lease. With respect to each Co-op Loan, (i) the term of the related Proprietary Lease is longer than the term of the Co-op Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Co-op Shares owned by such Mortgagor first to the Co-op Corporation, (iii) there is no prohibition in any Proprietary Lease against pledging the Co-op Shares or assigning the Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement published by Aztech Document Systems, Inc. as of the date hereof or includes provisions which are no less favorable to the lender than those contained in such agreement. |
Sch. 1-16
(zzz)
|
Co-op Loan: Acceleration of Payment. With respect to each Co-op Loan, each Assignment of Proprietary Lease contains enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for the realization of the material benefits of the security provided thereby. The Assignment of Proprietary Lease contains an enforceable provision for the acceleration of the payment of the unpaid
principal balance of the Mortgage Note in the event the Co-op Unit is transferred or sold without the consent of the holder thereof.
|
Sch. 1-17
SCHEDULE 2
RESPONSIBLE OFFICERS
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:
Name | Title | Signature | ||
William A. Newman | President and CEO | [***] | ||
Michael Jones | Head of Finance | [***] | ||
Maria Fregosi | Chief Strategy Officer | [***] | ||
Douglas McClary | Capital Markets Leads | [***] |
BUYER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Buyer under this Agreement:
AUTHORIZED REPRESENTATIVES OF UBS BANK USA
Name | Title | Signature | ||
Gary Timmerman | Managing Director | [***] | ||
Ari Lash | Executive Director | [***] | ||
Chi Ma | Director | [***] | ||
Steve Stewart | CCO | [***] |
SCHEDULE 3
SCHEDULED INDEBTEDNESS
Counterparty | Type | Maximum Amount |
[***] | [***] | [***] |
[***] | [***] | [***] |
[***] | [***] | [***] |
SCHEDULE 4
LIST OF AGENCY APPROVALS
AGENCY | APPROVAL |
Fannie Mae |
Seller/Servicer [***] |
FHA/HUD |
Unconditional Direct Endorsement Approval [***] |
Freddie Mac |
Seller/Servicer [***] |
Ginnie Mae |
Ginnie Mae Issuer in the Ginnie Mae I and II single family mortgage-backed securities program [***] |
USDA/RD |
USDA Rural Development Single Family Housing Guaranteed Loan Program Approved Lender [***] |
VA |
VA Automatic Authority Lender [***] |
EXHIBIT A
REQUIRED LEGAL OPINIONS
1. | “Corporate” and “due diligence” opinions |
(a) | Opinion party(ies) entity status (due formation, existence and good standing) under constitutive laws |
(b) | Opinion party(ies) entity general power and authority |
(c) | Entity action (authorization, execution and delivery of transaction agreements) |
(d) | No-conflicts with charter and by-laws or other constitutive documents |
(e) | No conflicts with agreements |
(f) | No conflicts with judgments, orders or decrees No litigation or proceedings challenging the opinion party(ies) execution, delivery or performance of the transaction agreements |
(g) | Opinion party(ies) not required to register under Investment Company Act |
2. | Enforceability and related opinions |
(a) | Enforceability of transaction agreements - legal, valid and binding obligations of and enforceable against opinion part(ies) signatory thereto |
(b) | No conflicts with applicable laws |
(c) | No governmental approvals, filings or notices required for opinion party(ies) execution, delivery and performance of transaction agreements |
3. | Perfection and other UCC opinions |
(a) | Creation of security interest under transaction agreements in opinion party(ies) right, title and interest in UCC Article 9 collateral |
(b) | Filing-perfection of security interest in filing collateral |
(c) | Possession-perfection and priority of security interest in mortgage notes and certificated securities (trust certificates of beneficial interest and pledged securities) |
(d) | Control-perfection and priority of security interest in securities account(s) and deposit account(s) (if applicable) |
EXHIBIT B
FORM OF SELLER’S OFFICER’S CERTIFICATE
The undersigned, ____________ of Seller, a [STATE] [corporation] (the “Seller”), hereby certifies as follows:
1. Attached hereto as Exhibit 1 is a copy of the formation documents of the Seller, as certified by the Secretary of State of the State of [STATE].
2. Neither any amendment to the formation documents of the Seller nor any other charter document with respect to the Seller has been filed, recorded or executed since _______ __, ____, and no authorization for the filing, recording or execution of any such amendment or other charter document is outstanding.
3. Attached hereto as Exhibit 2 is a true, correct and complete copy of the Bylaws of the Seller as in effect as of the date hereof and at all times since _______ __, ____.
4. Attached hereto as Exhibit 3 is a true, correct and complete copy of resolutions adopted by the Board of Directors of the Seller by unanimous written consent on _______ __, 20__ (the “Resolutions”). The Resolutions have not been further amended, modified or rescinded and are in full force and effect in the form adopted, and they are the only resolutions adopted by the Board of Directors of the Seller or by any committee of or designated by such Board of Directors relating to the execution and delivery of, and performance of the transactions contemplated by the Master Repurchase Agreement dated as of October 28, 2015 (the “Repurchase Agreement”), between the Seller and UBS Bank USA (the “Buyer”).
5. The Repurchase Agreement are substantially in the form approved by the Resolutions or pursuant to authority duly granted by the Resolutions.
6. The undersigned, as a officers of the Seller or as attorney-in-fact, are authorized to and have signed manually the Repurchase Agreement or any other document delivered in connection with the transactions contemplated thereby, were duly elected or appointed, were qualified and acting as such officer or attorney-in-fact at the respective times of the signing and delivery thereof, and were duly authorized to sign such document on behalf of the Seller, and the signature of each such person appearing on any such document is the genuine signature of each such person.
Name | Title | Signature |
IN WITNESS WHEREOF, the undersigned has hereunto executed this Certificate as of the __ day of __________, 20__.
Home Point Financial Corporation, as Seller | ||
By: | ||
Name: | ||
Title: |
Exhibit 3 to Officer’s Certificate of the Seller
RESOLUTIONS OF SELLER
Action of the Board of Directors
Without a Meeting Pursuant to
Section ______ of ________
The undersigned, being the directors of Home Point Financial Corporation, a corporation (the “Company”), do hereby consent to the taking of the following action without a meeting and do hereby adopt the following resolutions by written consent pursuant to Section ____________ of ______________ of the State of __________:
WHEREAS, it is in the best interests of the Company to transfer from time to time to Buyer Mortgage Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Company such Mortgage Loans at a date certain or on demand, against the transfer of funds by Company pursuant to the terms of the Repurchase Agreement (as defined below).
NOW, THEREFORE, be it
RESOLVED, that the execution, delivery and performance by the Company of the Master Repurchase Agreement (the “Repurchase Agreement”) to be entered into by the Company and UBS Bank USA, as Buyer, substantially in the form of the draft dated ___________, 20__, attached hereto as Exhibit A, are hereby authorized and approved and that the [President] or any [Vice President] (collectively, the “Authorized Officers”) of the Company be and each of them hereby is authorized and directed to execute and deliver the Repurchase Agreement to the Buyer with such changes as the officer executing the same shall approve, his execution and delivery thereof to be conclusive evidence of such approval;
RESOLVED, that the Authorized Officers hereby are, and each hereby is, authorized to execute and deliver all such aforementioned agreements on behalf of the Company and to do or cause to be done, in the name and on behalf of the Company, any and all such acts and things, and to execute, deliver and file in the name and on behalf of the Company, any and all such agreements, applications, certificates, instructions, receipts and other documents and instruments, as such Authorized Officer may deem necessary, advisable or appropriate in order to carry out the purposes of the foregoing resolutions.
RESOLVED, that the proper officers, agents and counsel of the Company are, and each of such officers, agents and counsel is, hereby authorized for and in the name and on behalf of the Company to take all such further actions and to execute and deliver all such other agreements, instruments and documents, and to make all governmental filings, in the name and on behalf of the Company and such officers are authorized to pay such fees, taxes and expenses, as advisable in order to fully carry out the intent and accomplish the purposes of the resolutions heretofore adopted hereby.
Dated as of: ___________ ___, 20__
EXHIBIT C
FORM OF SERVICER NOTICE
[Date]
[________________], as Servicer
[ADDRESS]
Attention: ___________
Re: | Master Repurchase Agreement, dated as of October 28, 2015 (the “Agreement”), between Home Point Financial Corporation (the “Seller”) and UBS Bank USA (the “Buyer”). |
Ladies and Gentlemen:
[___________________] (the “Servicer”) is servicing certain mortgage loans for Seller pursuant to that certain [_______________] (the “Servicing Agreement”) between the Servicer and Seller. Pursuant to the Agreement, the Servicer is hereby notified that Seller has pledged to Buyer certain mortgage loans which are serviced by Servicer which are subject to a security interest in favor of Buyer.
Upon receipt of a notice that an Event of Default has occurred under the Repurchase Agreement (a “Notice of Event of Default”) from Buyer in which Buyer shall identify the mortgage loans which are then pledged to Buyer under the Agreement (the “Subject Mortgage Loans”), the Servicer shall segregate all amounts collected on account of such Subject Mortgage Loans, hold them in trust for the sole and exclusive benefit of Buyer, and remit such collections in accordance with Buyer’s written instructions. Following such Notice of Event of Default, Servicer shall follow the instructions of Buyer with respect to the Subject Mortgage Loans, and shall deliver to Buyer any information with respect to the Subject Mortgage Loans reasonably requested by Buyer.
Notwithstanding any contrary information which may be delivered to the Servicer by Seller, the Servicer may conclusively rely on any information or Notice of Event of Default delivered by Buyer, and Seller shall indemnify and hold the Servicer harmless for any and all claims asserted against it for any actions taken in good faith by the Servicer in connection with the delivery of such information or Notice of Event of Default.
Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed copy to Buyer promptly upon receipt. Any notices to Buyer should be delivered to the following addresses: UBS Bank USA, 1285 Avenue of the Americas, New York, NY 10019; Attention: [***]; Telephone: [***]; Facsimile: [***].
Very truly yours, | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Title: |
ACKNOWLEDGED AND AGREED: | ||
[__________________], | ||
as Servicer | ||
By: | ||
Name: | ||
Title: | ||
UBS Bank USA, | ||
as Buyer | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
EXHIBIT D
FORM OF TRADE ASSIGNMENT
__________ (“Approved Investor”)
[Insert Address and notice info]
Dear Ladies and Gentlemen :
Attached to this Trade Assignment is a correct and complete copy of your confirmation of commitment (the “Commitment”), [insert trade date], to purchase [insert original trade quantity] of [insert description of Agency MBS] mortgage-backed pass-through securities (“Agency Securities”) at a purchase price of ___________ from ___________ on [insert Settlement Date] (the “Settlement Date”).
Pursuant to this Trade Assignment, we assign $_____ of this Commitment’s full amount to UBS Securities LLC (“UBS”), which assignment shall be effective and shall be fully enforceable by UBS on the Settlement Date.
This is to confirm that (i) the form of this assignment conforms to the SIFMA guidelines, (ii) the Commitment is in full force and effect, (iii) the Commitment has been assigned to UBS as security for the obligations of Home
Point Financial Corporation, the “Seller” under that certain Master Repurchase Agreement, dated as of October 28, 2015, between Home Point Financial Corporation and UBS, whose acceptance of such assignment is indicated below, [and] (iv) upon delivery
of this trade assignment to you by UBS you will accept Seller’s direction set forth herein to pay UBS for such Agency Securities, [(v) you will accept delivery of such Agency Securities directly from UBS, (vi) UBS is obligated to make delivery of
such Agency Securities to you in accordance with the attached Commitment and (vii) you have released Seller from its obligation to deliver the Agency Securities to you under the Commitment.] Payment will be made “delivery versus payment (DVP)” to UBS in immediately available funds.
If you have any questions, please call [SELLER CONTACT] at (___) ___-____ immediately or contact him by fax at (___) ___-____.
Very truly yours, | ||
Home Point Financial Corporation | ||
By: | ||
Name: | ||
Title: |
Accepted and Agreed to: | ||||
UBS SECURITIES LLC | ||||
By: | ||||
Name: | ||||
Title: | ||||
By: | ||||
Name: | ||||
Title: |
EXHIBIT E
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Home Point Financial Corporation (“Seller”) hereby irrevocably constitutes and appoints UBS Bank USA (“Buyer”) and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Buyer’s discretion:
(a) in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Buyer under the Master Repurchase Agreement (as amended, restated or modified) dated October 28, 2015 (the “Assets”) and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;
(b) to pay or discharge taxes and liens levied or placed on or threatened against the Assets;
(c) (i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against Seller with respect to any Assets; (vi) to settle, compromise or adjust any suit, action or proceeding described in clause (v) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; and (vii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and Seller’s expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Assets and Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do;
(d) for the purpose of carrying out the transfer of servicing with respect to the Assets from Seller to a successor servicer appointed by Buyer in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and
send or cause to be sent “good-bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Buyer in its sole discretion;
(e) for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.
Seller also authorizes Buyer, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.
The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Assets and shall not impose any duty upon it to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS OWN BEHALF AND ON BEHALF OF BUYER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES FOLLOW.]
IN WITNESS WHEREOF Seller has caused this power of attorney to be executed and Seller’s seal to be affixed this __ day of _____, 20__.
Home Point Financial Corporation | ||
(Seller) | ||
By: | ||
Name: | ||
Title: |
Signature Page to the Power of Attorney
Acknowledgment of Execution by Seller (Principal):
STATE OF _____________________ | ) | |||
) | ss.: | |||
COUNTY OF ___________________ | ) | |||
On the __ day of ____________________, 20__ before me, the undersigned, a Notary Public in and for said State, personally appeared ________________________________,personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity as ______________________ for Home Point Financial Corporation and that by his signature on the instrument, the person upon behalf of which the individual acted, executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.
Notary Public | |
My Commission expires __________________ |
Signature Page to the Power of Attorney
EXHIBIT F
FORM OF TAX COMPLIANCE CERTIFICATE
Reference is hereby made to the Master Repurchase Agreement dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), between Home Point Financial Corporation (the “Seller”) and UBS Bank USA (the “Buyer”). Pursuant to the provisions of Section 7 of the Agreement, the undersigned hereby certifies that:
1. | It is a ___ natural individual person, ____ treated as a corporation for U.S. federal income tax purposes, ____ disregarded for U.S. federal income tax purposes (in which case a copy of this Tax Compliance Certificate is attached in respect of its sole beneficial owner), or ____ treated as a partnership for U.S. federal income tax purposes (one must be checked). |
2. | It is the beneficial owner of amounts received pursuant to the Agreement. |
3. | It is not a bank, as such term is used in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), or the Agreement is not, with respect to the undersigned, a loan agreement entered into in the ordinary course of its trade or business, within the meaning of such section. |
4. | It is not a 10-percent shareholder of Seller within the meaning of section 871(h)(3) or 881(c)(3)(B) of the Code. |
5. | It is not a controlled foreign corporation that is related to Seller within the meaning of section 881(c)(3)(C) of the Code. |
6. | Amounts paid to it under the Agreement and the other Program Documents (as defined in the Agreement) are not effectively connected with its conduct of a trade or business in the United States. |
Dated:
[NAME OF UNDERSIGNED] | ||
By: | ||
Name: | ||
Title: |
EXHIBIT G
FORM OF TEMPORARY INCREASE REQUEST
UBS Bank USA
1285 Avenue of the Americas
New York, NY 10019
Attention: [***]
Telephone: [***]
Facsimile: [***]
Email: [***]
Re: The Master Repurchase Agreement, dated as of October 28, 2015 (the “Repurchase Agreement”), between UBS Bank USA (“Buyer”) and Home Point Financial Corporation (“Seller”)
Ladies and Gentlemen:
In accordance with Section 3(f) of the Repurchase Agreement, Buyer hereby consents to a Temporary Increase of the Maximum Aggregate Purchase Price or the Maximum Committed Purchase Price as further set forth below:
Amount of Temporary Increase: $__________________.
Temporary Maximum Aggregate Purchase Price: $__________________.
Temporary Maximum Committed Purchase Price: $__________________.
Effective date: [ ]
Expiration date: [ ]
On and after the effective date indicated above and until the expiration date indicated above, the Maximum Aggregate Purchase Price and/or Maximum Committed Purchase Price (if applicable) shall equal the Temporary Maximum Aggregate Purchase Price and/or Temporary Maximum Committed Purchase Price, respectively, indicated above for all purposes of the Repurchase Agreement and all calculations and provisions relating to the Maximum Aggregate Purchase Price and/or Maximum Committed Purchase Price shall refer to the Temporary Maximum Aggregate Purchase Price and/or Temporary Maximum Committed Purchase Price, respectively, including without limitation, Concentration Limits.
Unless otherwise terminated pursuant to the Repurchase Agreement, this Temporary Increase shall terminate on the expiration date indicated above. Upon the termination of this Temporary Increase, Seller shall repurchase Purchased Assets such that (i) the aggregate outstanding Purchase Price of all Transactions does not exceed the Maximum Aggregate
Purchase Price and (ii) the applicable portion of the aggregate outstanding Purchase Price of all Transactions does not exceed any Concentration Limit.
All terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Repurchase Agreement.
HOME POINT FINANCIAL CORPORATION, as | ||
Seller | ||
By: | ||
Name: | ||
Title: | ||
Agreed and Consented by: | ||
UBS BANK USA, as Buyer | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Date: ________________
Exh. G-2
Exhibit 10.6.1
EXECUTION VERSION
AMENDMENT NO. 1 TO MASTER REPURCHASE AGREEMENT
Amendment No. 1 to Master Repurchase Agreement, dated as of May 4, 2016 (this “Amendment”), between UBS BANK USA (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (the “Existing Repurchase Agreement”; as amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Financial Reporting. Section 11(d) of the Existing Repurchase Agreement is hereby amended by deleting subsection (iv) in its entirety and replacing it with the following:
(iv) Unless otherwise waived by Buyer in writing, simultaneously with the furnishing of each of the Financial Statements to be delivered pursuant to subsection (i) and (iii) above, submission of a certificate in the form of Exhibit A to the Pricing Letter and certified by the president, chief financial officer, or designee as approved by Buyer of the Financial Reporting Party, which includes detailed reporting to the materials set forth therein including without limitation, any request for repurchase of or indemnification for a Mortgage Loan purchased by a third party investor, the valuation of the Seller’s Capitalized Mortgage Servicing Rights by any third-party evaluator and a quarterly legal compliance questionnaire certified by the general counsel or chief/head of compliance;
SECTION 2. Status. Section 11(y) of the Existing Repurchase Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:
(y) [***]
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SECTION 3. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
3.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 5 to Pricing Letter, executed and delivered by the Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 4. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 5. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 6. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 7. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 8. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of
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an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 9. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 10. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS BANK USA, as Buyer | |||
By: | /s/ Gary Timmerman | ||
Name:
|
Gary Timmerman
|
||
Title:
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Managing Director
|
||
By: | /s/ Ari Lash | ||
Name:
|
Ari Lash
|
||
Title:
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Executive Director
|
||
HOME POINT FINANCIAL CORPORATION, | |||
as Seller | |||
By: | /s/ Howard Nathan | ||
Name:
|
Howard Nathan
|
||
Title: |
Signature Page to Amendment No. 1 to Master Repurchase Agreement
Exhibit 10.6.2
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.
ASSIGNMENT AND AMENDMENT NO. 2
TO MASTER REPURCHASE AGREEMENT AND
ASSIGNMENT AND AMENDMENT NO. 8 TO PRICING LETTER
Assignment and Amendment No. 2 to Master Repurchase Agreement and Assignment and Amendment No. 8 to Pricing Letter, dated September 15, 2016 (this “Amendment”) among HOME POINT FINANCIAL CORPORATION (the “Seller”), UBS BANK USA (“Assignor”) and UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Assignee” and “UBS 1285”).
WITNESSETH
Assignor and Seller are parties to that certain (a) Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, the “Existing Repurchase Agreement”, and as further amended by this Amendment, the “Repurchase Agreement”) and (b) Pricing Letter, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of January 27, 2016, Amendment No. 2, dated as of March 9, 2016, Amendment No. 3, dated as of March 31, 2016, Amendment No. 4, dated as of April 20, 2016, Amendment No. 5, dated as of May 4, 2016, Amendment No. 6 to Pricing Letter, dated as of June 29, 2016 and Amendment No. 7 to Pricing Letter, dated as of August 25, 2016, the “Existing Pricing Letter”, and as further amended by this Amendment, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Existing Pricing Letter, as applicable.
Assignor wishes to assign to UBS 1285 and UBS 1285 wishes to assume all of the Assignor’s interest in the Repurchase Agreement, the Pricing Letter, the other Program Documents and all future and outstanding Transactions thereunder.
Assignor, UBS 1285 and Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement and Existing Pricing Letter be amended to reflect certain agreed upon revisions to the terms thereof.
Accordingly, Assignor, UBS 1285 and Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein contained (the receipt and sufficiency of which are hereby acknowledged by each of the parties), that the Existing Repurchase Agreement and Existing Pricing Letter are hereby amended as follows:
SECTION 1. Assignment. In consideration of the Repurchase Price outstanding as of the date hereof, Assignor hereby assigns and UBS 1285 hereby assumes all of Assignor’s rights and obligations, as Buyer, with respect to the Existing Repurchase Agreement, the Existing Pricing Letter and all future and outstanding Transactions thereunder. For the avoidance of doubt, each outstanding Transaction is a continuing transaction and has not been, and shall not be, considered terminated in any respect. From and after the date hereof, (a) UBS 1285 shall be a party to the Repurchase Agreement and Pricing Letter and shall have the rights and obligations of Assignor as Buyer thereunder and shall be bound by the provisions thereof and (b) Assignor shall relinquish its rights and be released from its obligations under the Repurchase Agreement and Pricing Letter and all future and outstanding Transactions thereunder except for those Obligations
of Seller to Assignor (including, without limitation, any indemnification obligations) that survive which shall continue for the benefit of the Assignor.
SECTION 2. Repurchase Agreement Amendments.
2.1 Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Buyer” in its entirety and replacing it with the following:
“Buyer” shall mean UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, its successors in interest and assigns pursuant to Section 17 and, with respect to Section 7, its participants.
2.2 References. The Existing Repurchase Agreement is hereby amended by replacing all references to “UBS BANK USA” with “UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York”.
2.3 Buyer Authorizations. The Existing Repurchase Agreement is hereby amended by deleting Buyer’s Authorizations on Schedule 2 in its entirety and replacing it with Annex A attached hereto.
SECTION 3. Pricing Letter Amendments. The Existing Pricing Letter is hereby amended by replacing all references to “UBS BANK USA” with “UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York”.
SECTION 4. Seller Authorized Persons. In addition to the Responsible Officers of Seller set forth in the Repurchase Agreement, UBS 1285 requires that Seller provide a list of additional employees that are designated as authorized representatives for the purpose of wire verification and additional documentation (documentation includes but is not limited to: (i) insured closing protection letters; (ii) wire instructions on closing agent’s letterhead; and (iii) any other documentation as needed by UBS 1285 on a one time basis for new closing agents). Seller hereby confirms that the persons listed on Annex B hereto are so authorized to act on behalf of Seller.
SECTION 5. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Assignment Effective Date”), subject to the satisfaction of the following conditions precedent:
5.1 Delivered Documents. The parties hereto shall have received the following documents, each of which shall be satisfactory to the Assignor and UBS 1285, as applicable, in form and substance:
(a) this Amendment, executed and delivered by the parties hereto;
(b) amendments to the other Program Documents as required by UBS 1285 in its sole discretion, executed and delivered by the parties thereto;
(c) on or prior to the date hereof, Seller shall permit UBS 1285 and Assignor to take all steps as it may deem necessary in connection with UCC searches and filing duly
2
authorized and filed Uniform Commercial Code financing statements on Form UCC-1 and UCC-3 as applicable, as is necessary or, in the opinion of UBS 1285, desirable to perfect UBS 1285’s interests in the Purchased Assets and other Repurchase Assets; and
(d) such other documents as UBS 1285 or counsel to UBS 1285 may reasonably request.
SECTION 6. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement and Existing Pricing Letter are in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 7. Representations and Warranties. The Seller hereby represents and warrants to the Buyer and Assignee that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 8. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 9. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 10. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 11. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 12. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES
3
THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION AMONG ASSIGNOR, SELLER AND UBS 1285 SHALL BE GOVERNED BY E-SIGN.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their representative officers their under duty authorized, as of the date first above written.
UBS BANK USA | ||
By: | /s/ GARY TIMMERMAN | |
Name: GARY TIMMERMAN | ||
Title: MANAGING DIRECTOR |
By: | /s/ Ari Lash | |
Name: Ari Lash | ||
Title: Executive Director |
UBS AG, by and through its branch office at
1285 Avenue of the Americas, New York, New York, as Assignee and UBS 1285 |
||
By: | /s/ Hye-Eun Cheong | |
Name: Hye-Eun Cheong | ||
Title: Authorized Signatory |
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Authorized Signatory |
Signature Page to
Assignment and Amendment No. 2 to Master Repurchase Agreement and
Assignment and Amendment No. 8 to Pricing Letter
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Howard Nathan | |
Name: Howard Nathan | ||
Title: CFO |
Signature Page to
Assignment and Amendment No. 2 to Master Repurchase Agreement and
Assignment and Amendment No. 8 to Pricing Letter
Annex A to Amendment
BUYER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Buyer under this Agreement.
Name | Title | Signature | ||
Gary Timmerman | Managing Director | [***] | ||
Kimberly Browne | Managing Director | [***] | ||
Ari Lash | Executive Director | [***] | ||
Chi Ma | Director | [***] | ||
Hye-Eun Cheong | Director | [***] |
Sch. 2-2
Annex B to Amendment
See Attached
UBS Bank USA
299 Main Street, Suite 2275 Salt Lake City, Utah USA 84111 Tel. +1-801-741-0310 Fax +1-801-741-0311 www.ubs.com |
Schedule A
● | Include a minimum of three authorized representatives |
● | Include at least one officer |
Name: [***]
|
Position / Title:
Chief Accounting Officer/Controller |
Email: [***]
|
Contact Phone Number: [***]
|
Name: [***]
|
Position / Title:
Assistant Controller |
Email: [***]
|
Contact Phone Number: [***]
|
Name: [***]
|
Position / Title:
Director – Funding Manager |
Email: [***]
|
Contact Phone Number: [***]
|
Name: [***]
|
Position / Title:
Director – Capital Markets |
Email: [***]
|
Contact Phone Number: [***]
|
Name: [***]
|
Position / Title:
Associate - Accounting |
Email: [***]
|
Contact Phone Number: [***]
|
Name: [***]
|
Position / Title:
Managing Director – Post Origination Lead |
Email: [***]
|
Contact Phone Number: [***]
|
Authorized Name: | William Newman |
Authorized Signature: | [***] |
Date: | 1/25/2016 |
UBS Bank USA is a subsidiary of UBS AG.
Exhibit 10.6.3
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.
EXECUTION VERSION
AMENDMENT NO. 3 TO MASTER REPURCHASE AGREEMENT
Amendment No. 3 to Master Repurchase Agreement, dated as of September 28, 2016 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016 and Amendment No. 2, dated as of September 15, 2016, the “Existing Repurchase Agreement”; as amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by:
1.1 deleting the definitions of “Agency Approval” and “Change in Control” in their entirety and replacing them with the following:
“Agency Approval” shall mean the approvals of Seller from the relevant Agencies as set forth on Schedule 4 hereof.
“Change in Control” shall mean:
(a) any transaction or event as a result of which Stone Point Capital LLC ceases to own, directly or indirectly, 51% or more of the stock of Seller; or
(b) the sale, transfer, or other disposition of all or substantially all of any Seller Party’s assets (excluding any such action taken in connection with any securitization transaction); or
(c) the consummation of a merger or consolidation of a Seller Party with or into another entity or any other corporate reorganization (in one transaction or in a series of transactions), if 50% or more of the combined voting power of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation or such
1
other reorganization is owned by persons who were not stockholders of Seller Party immediately prior to such merger, consolidation or other reorganization; or
(d) William Newman shall (i) no longer be employed by Seller or (ii) shall no longer be involved in the day to day operations of Seller; or
(e) there is a change in the majority of the board of directors of Seller during any twelve month period.
1.2 adding the following definition of “Warehouse Facility” in its proper alphabetical order:
“Warehouse Facility” shall have the meaning set forth in the Pricing Letter.
SECTION 2. Initiation. Section 3(c) of the Existing Repurchase Agreement is hereby amended by deleting subsection (iii) in its entirety and replacing it with the following:
(iii) Following receipt of such request, Buyer may agree to enter into such requested Transaction so long as the conditions set forth herein are satisfied and after giving effect to the requested Transaction the aggregate outstanding Purchase Price does not exceed the Maximum Aggregate Purchase Price, in which case Buyer shall remit the Purchase Price pursuant to the Seller’s Wiring Instructions.
SECTION 3. Operating Account Interest. Section 9(g) of the Existing Repurchase Agreement is hereby amended by deleting the first paragraph thereof and replacing it with the following:
(g) Operating Account Interest. Subject to Section 9(h), the Buydown Amount will accrue interest at the Operating Account Rate; provided that in no event shall interest accrue on (i) the Buydown Amount if (x) on any day the Buydown Amount is less than the Minimum Balance Requirement or (y) the average balance of funds in the Operating Account during any calendar month is less than the Minimum Balance Requirement and (ii) that portion of the Buydown Amount that is in excess of the lesser of (a) the aggregate outstanding Purchase Price of all Transactions during any calendar month or (b) the Minimum Balance Requirement. Unless otherwise set forth in the Pricing Letter:
SECTION 4. Covenants. Section 11(c) of the Existing Repurchase Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:
(c) Notice of Proceedings or Adverse Change. Seller Party shall give notice to Buyer or cause notice to be given to Buyer:
(i) immediately after a Responsible Officer, president, vice president, chief executive officer, chief financial officer, chief operating officer, secretary, treasurer or controller of Seller Party has any knowledge of:
(A) the occurrence of any Default or Event of Default;
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(B) any (a) default or event of default under any Indebtedness of Seller Party or (b) material litigation, investigation, regulatory action or proceeding that is pending or threatened by or against Seller Party in any federal or state court or before any Governmental Authority and (c) any Material Adverse Effect with respect to Seller Party;
(C) any litigation or proceeding that is pending or threatened (a) against Seller Party in which the amount involved exceeds the Litigation Threshold and is not covered by insurance, in which injunctive or similar relief is sought, or which, would reasonably be expected to have a Material Adverse Effect, (b) in connection with any of the Repurchase Assets, which, if adversely determined, would reasonably be expected to have a Material Adverse Effect and (c) that questions or challenges compliance of any Mortgage Loan with the Ability to Repay Rule or QM Rule;
(D) as soon as reasonably possible, notice of any of the following events: (A) a change in the insurance coverage of Seller Party, with a copy of evidence of same attached; (B) any material change in accounting policies or financial reporting practices of Seller Party; (C) promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Program Document) on, or claim asserted against, any of the Repurchase Assets; (D) the termination or nonrenewal of any debt facilities of Seller Party which have a maximum principal amount (or equivalent) available of more than the Facility Termination Threshold; (E) any Change in Control or any change in direct or indirect ownership or controlling interest of any Seller Party’s direct or indirect owner; and (F) any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect; and
(ii) Promptly, but no later than [***] after Seller receives notice of the same, (A) any Mortgage Loan submitted for inclusion into an Agency Security and rejected by that Agency for inclusion in such Agency Security or (B) any Mortgage Loan submitted to an Approved Investor (whole loan or securitization) and rejected for purchase by such Approved Investor; or (C) the termination or suspension of approval of Seller to sell any Mortgage Loans to any Approved Investor.
SECTION 5. Notices. Section 23 of the Existing Repurchase Agreement is hereby amended by deleting the notice information for the Buyer in its entirety and replacing it with the following:
If to Buyer:
UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York
1285 Avenue of the Americas
New York, NY 10019
Attention: [***]
3
Telephone: [***]
Facsimile: [***]
Email: [***]
With a copy to:
UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York
153 West 51st Street
New York, NY 10019
Attention: [***]
Telephone: [***]
Email: [***]
And:
OL-SGMF-Business@ubs.com
SECTION 6. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
6.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 10 to Pricing Letter, executed and delivered by the Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 7. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 8. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
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SECTION 9. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 10. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 11. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 12. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 13. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, | |||
as Buyer | |||
By: | /s/ Chi Ma | ||
Name: |
Chi Ma
|
||
Title: |
Authorized Signatory
|
||
By: | /s/ Ari Lash | ||
Name: |
Ari Lash
|
||
Title: |
Authorized Signatory
|
||
HOME POINT FINANCIAL CORPORATION,
as Seller |
|||
By: | /s/ Howard Nathan | ||
Name:
|
Howard Nathan
|
||
Title:
|
CFO
|
Signature Page to Amendment No. 3 to Master Repurchase Agreement
Exhibit 10.6.4
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. 4 TO MASTER REPURCHASE AGREEMENT
Amendment No. 4 to Master Repurchase Agreement, dated as of January 5, 2017 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, and Amendment No. 3, dated as of September 28, 2016, the “Existing Repurchase Agreement”; as amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Notices. Section 23 of the Existing Repurchase Agreement is hereby amended by deleting the notice information for the Seller in its entirety and replacing it with the following:
If to Seller:
Home Point Financial Corporation
1194 Oak Valley Drive, Suite 80
Ann Arbor, MI 48108
Attention: [***]
Telephone: [***]
Facsimile: [***]
Email: [***]
With a copy to:
Home Point Financial Corporation
1194 Oak Valley Drive, Suite 80
Ann Arbor, MI 48108
Attention: [***]
Telephone: [***]
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Facsimile: [***]
Email: [***]
SECTION 2. Seller Authorizations. The Existing Repurchase Agreement is hereby amended by deleting Seller's Authorizations on Schedule 2 in its entirety and replacing it with Annex A attached hereto.
SECTION 3. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
3.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 4. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 5. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 6. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 7. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 8. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format
(PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 9. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 10. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E- SIGN.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH | ||
OFFICE AT 1285 AVENUE OF THE
AMERICAS, NEW YORK, NEW YORK, as Buyer |
||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director | ||
By: | /s/ Ari Lash | |
Name: Ari Lash | ||
Title: Executive Director | ||
HOME POINT FINANCIAL CORPORATION, | ||
as Seller | ||
By | /s/ William A. Newman | |
Name: William A. Newman | ||
Title: Chief Executive Officer and President |
Signature Page to Amendment No. 4 to Master Repurchase Agreement
ANNEX A
SCHEDULE 2
RESPONSIBLE OFFICERS
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:
Name | Title | Signature | ||
William A. Newman | President and CEO | [***] | ||
Howard Nathan | Head of Finance | [***] | ||
Maria Fregosi | Chief Strategy Officer | [***] | ||
William Fischer | Controller/Chief Accounting Officer | [***] | ||
Douglas McClary | Managing Director, Capital Markets | [***] |
Exhibit 10.6.5
EXECUTION
AMENDMENT NO. 5 TO MASTER REPURCHASE AGREEMENT
Amendment No. 5 to Master Repurchase Agreement, dated as of October 6, 2017 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, and Amendment No. 4, dated as of January 5, 2017 the “Existing Repurchase Agreement”; as amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by:
1.1 deleting the definition of “Servicing Term” in its entirety and all references thereto;
1.2 adding the following definitions of “HomePath Mortgage Loan”, “HomePath Renovation Mortgage Loan” and “HomeStyle Renovation Mortgage Loan” in their proper alphabetical order:
“HomePath Mortgage Loan” shall mean a Mortgage Loan that is originated in compliance with Fannie Mae’s HomePath mortgage loan program (as such program is amended, supplemented or otherwise modified, from time to time).
“HomePath Renovation Mortgage Loan” shall mean a Mortgage Loan that is originated in compliance with Fannie Mae’s HomePath mortgage loan program (as such program is amended, supplemented or otherwise modified, from time to time).
“HomeStyle Renovation Mortgage Loan” shall mean a Mortgage Loan that is originated in compliance with Fannie Mae’s HomeStyle Renovation mortgage loan program (as such program is amended, supplemented or otherwise modified, from time to time).
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SECTION 2. Servicing. Section 15 of the Existing Repurchase Agreement is hereby amended by deleting subsection (c) in its entirety and replacing it with the following:
(c) Seller shall transfer actual servicing of each Purchased Mortgage Loan, together with all of the related Records in its possession, to Buyer’s designee and designate Buyer’s designee as the servicer in the MERS System upon the earliest of (i) the occurrence of a Default or Event of Default hereunder, (ii) the termination of Seller as interim servicer by Buyer pursuant to this Agreement, or (iii) transfer of servicing to any entity approved by Buyer and the assumption thereof by such entity. Buyer shall have the right to terminate Seller as interim servicer of any of the Purchased Mortgage Loans, which right shall be exercisable at any time in Buyer’s sole discretion, upon written notice. Seller’s transfer of the Records and servicing under this Section 15 shall be in accordance with customary standards in the industry and such transfer shall include the transfer of the gross amount of all escrows held for the related mortgagors (without reduction for unreimbursed advances or “negative escrows”).
SECTION 3. General Interpretive Principles. Section 35 of the Existing Repurchase Agreement is hereby amended by deleting the reference to “Section 1-201(19)” and replacing it with “Section 5-102(7)”.
SECTION 4. Schedule 1 Amendment. Schedule 1 to the Existing Repurchase Agreement is hereby amended by deleting subsections (o) and (fff) in their entirety and replacing them with the following:
(o) Full Disbursement of Proceeds. The Mortgage Loan has been closed and, except with respect to, Homestyle Renovation Mortgage Loans or HomePath Renovation Mortgage Loans, the proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. With respect to Homestyle Renovation Mortgage Loans and HomePath Renovation Mortgage Loans, Seller has made all 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 advanced or disbursed from Seller’s own funds and not from the funds representing any Purchase Price paid by Buyer to Seller hereunder. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage. All points and fees related to each Mortgage Loan were disclosed in writing to the Mortgagor in accordance with applicable state and federal law and regulation. No Mortgagor was charged “points and fees” (whether or not financed) in an amount that exceeds 3% of the total loan amount (or such other applicable limits for lower balance Mortgages) as specified under 12 CFR 1026.43(e)(3), and the points and fees were calculated using the calculation required for qualified mortgages under 12 CFR 1026.32(b) to determine compliance with applicable requirements.
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(fff) Regarding the Mortgagor. The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” or “revocable trust” and such “living trust” or “revocable trust” is in compliance with Fannie Mae or Freddie Mac guidelines, as applicable, for such trusts.
SECTION 5. Condition Subsequent. Within fifteen (15) calendar days of the Amendment Effective Date, Buyer shall have received, satisfactory evidence that Uniform Commercial Code Financing Statement (UCC-1) No. 52277733, filed with the Department of Treasury in the State of New Jersey, has been modified, amended or terminated pursuant to a filed UCC-3 in form and substance acceptable to Buyer in its sole discretion.
SECTION 6. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
6.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 14 to Pricing Letter, executed and delivered by the Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 7. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 8. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 9. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 10. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
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SECTION 11. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 12. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 13. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, | ||
as Buyer | ||
By: | /s/ Ari Lash | |
Name: Ari Lash | ||
Title: Executive Director | ||
By: | /s/ Hye-Eun Cheong | |
Name: Hye-Eun Cheong | ||
Title: Director | ||
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Howard Nathan | |
Name: Howard Nathan | ||
Title: CFO |
Signature Page to Amendment No. 5 to Master Repurchase Agreement
Exhibit 10.6.6
EXECUTION
AMENDMENT NO. 6 TO MASTER REPURCHASE AGREEMENT
Amendment No. 6 to Master Repurchase Agreement, dated as of November 9, 2017 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, and Amendment No. 5, dated as of October 6, 2017, the “Existing Repurchase Agreement”; as amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definitions of “Custodian” and “Custodial Agreement” in their entirety and replacing them with the following:
“Custodial Agreement” shall mean each Custodial Agreement among Seller, Buyer, and the respective Custodian as the same may be amended from time to time.
“Custodian” shall mean Deutsche Bank National Trust Company, U.S. Bank National Association, or any successor thereto under the applicable Custodial Agreement.
SECTION 2. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
2.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
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(b) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 3. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 4. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 5. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 6. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 7. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 8. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 9. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE
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CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, | ||
as Buyer | ||
By: | /s/ Gary Timmerman | |
Name: Gary Timmerman | ||
Title: Managing Director | ||
By: | /s/ Hye-Eun Cheong | |
Name: Hye-Eun Cheong | ||
Title: Director | ||
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Howard Nathan | |
Name: Howard Nathan | ||
Title: CFO |
Signature Page to Amendment No. 6 to Master Repurchase Agreement
Exhibit 10.6.7
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. 7 TO MASTER REPURCHASE AGREEMENT
Amendment No. 7 to Master Repurchase Agreement, dated as of May 7, 2018 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017 and Amendment No. 6, dated as of November 9, 2017, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Notice and Other Communications. Section 23 of the Existing Repurchase Agreement is hereby amended by deleting the notice information for Seller and replacing it with the following:
If to Seller:
Home Point Financial Corporation | |
1194 Oak Valley Drive, Suite 80 | |
Ann Arbor, MI 48108 | |
Attention: [***] | |
Email: [***] | |
with a copy to: | |
Chief Legal Officer | |
1194 Oak Valley Drive, Suite 80 | |
Ann Arbor, MI 48108 | |
Email: [***] |
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SECTION 2. Seller Authorizations. Schedule 2 to the Existing Repurchase Agreement is hereby amended by deleting such schedule in its entirety and replacing it with Annex A hereto.
SECTION 3. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
3.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 4. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 5. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 6. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 7. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 8. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
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SECTION 9. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 10. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E- SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH
OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer |
||
By: | /s/ GARY TIMMERMAN | |
Name: GARY TIMMERMAN | ||
Title: MANAGING DIRECTOR | ||
By: | /s/ Ari Lash | |
Name: Ari Lash | ||
Title: Executive Director |
Signature Page to Amendment No. 7 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Richard Bradfield | |
Name: Richard Bradfield | ||
Title: Chief Financial Officer |
Signature Page to Amendment No. 7 to Master Repurchase Agreement
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:
Name | Title | Signature | ||
William A. Newman | President and CEO | |||
Richard Bradfield | Chief Financial Officer | [***] | ||
Maria Fregosi | Chief Capital Markets Officer | |||
William Fischer | Controller/Chief Accounting Officer | |||
Exhibit 10.6.8
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. 8 TO MASTER REPURCHASE AGREEMENT
Amendment No. 8 to Master Repurchase Agreement, dated as of July 16, 2018 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017 and Amendment No. 7, dated as of May 7, 2018, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by adding the following definitions of “Buydown Application Request”, “Buydown Availability”, “Buydown Determination Date”, “Buydown Determination Period” and “Buydown Utilization Threshold” in their proper alphabetical order.
“Buydown Application Request” shall have the meaning set forth in Section 9(f) hereof.
“Buydown Availability” shall mean that portion of the Buydown Amount in excess of the Minimum Balance Requirement.
“Buydown Determination Date” shall mean the first day of each calendar month; provided that if such day is not a Business Day, the preceding Business Day.
“Buydown Determination Period” shall mean the thirty (30) calendar days prior to any Buydown Determination Date.
“Buydown Utilization Threshold” shall mean, for the applicable Buydown Determination Period, (a) through and including April 13, 2018, [***] and (b) on and after April 14, 2018, the average aggregate outstanding Purchase Price of all Purchased
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Assets subject to Transactions hereunder exceeds [***] of the Maximum Aggregate Purchase Price.
SECTION 2. Payment, Transfer; Accounts. Section 9 of the Existing Repurchase Agreement is hereby amended by deleting subsection (f) in its entirety and replacing it with the following:
(f) Buydown Amount. The Buydown Amount shall be held as unsegregated cash margin and collateral for all Obligations under this Agreement.
(i) Provided that no Default or Event of Default exists, upon one (1) Business Day’s prior notice (received on or before 5:00 p.m. Eastern time), no more than once per calendar week and to the extent the Buydown Utilization Threshold is met, the Seller may submit a written request in the form of Exhibit H hereto (a “Buydown Application Request”) requesting Buyer apply the Buydown Availability to new Transactions pursuant to the terms identified therein; provided that in no event shall the Buyer apply the Buydown Availability to the extent it would cause the Purchase Price Percentage for such Purchased Assets to be less than [***] To the extent that the Buydown Utilization Threshold is not met on any Buydown Determination Date, all Transactions entered into on the following Business Day and thereafter (until such time that the Buydown Utilization Threshold is met and Seller delivers a Buydown Application Request) shall be at the applicable Asset Value as set forth in the Pricing Letter without consideration of any prior Buydown Application Request.
(ii) During the requested period of time that the application of the Buydown Availability is effective (as identified in the Buydown Application Request), the Buyer shall apply the Buydown Availability from the Operating Account and shall allocate such amount to the outstanding Purchase Price of the Purchased Assets that become subject to Transactions during such time to match the applicable Buydown Application Request. To the extent there are insufficient funds in the Operating Account, Seller shall wire such funds at least one (1) Business Day prior to the effective date of any Buydown Application Request.
(iii) Provided that no Default or Event of Default exists, upon two (2) Business Days’ prior notice, no more than [***] per calendar week and to the extent the Buyer previously applied the Buydown Availability pursuant to the terms hereof, the Seller may submit a Buydown Application Request, requesting that Buyer no longer apply such amounts to the outstanding Purchase Price of all Purchased Assets. Upon the effective date thereof as set forth in the Buydown Availability Request, all Transactions shall revert to the applicable Asset Value as set forth in the Pricing Letter and Buyer shall return such previously applied amounts to the Operating Account.
(iv) A Buydown Application Request shall be effective only upon Buyer’s written acceptance thereof which may be by email.
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(v) Any application of the Buydown Availability or return of the Buydown Availability to the Operating Account shall be subject to the terms of the Program Documents, including, without limitation, Schedule 1 of the Pricing Letter.
(vi) Without limiting the generality of the foregoing, in the event that a breach of a Concentration Limit, a Margin Call or other Default exists, the Buyer shall be entitled to use any or all of the Buydown Amount (which for the avoidance of doubt, shall include amounts of Buydown Availability applied to the outstanding Purchase Price of Purchased Assets pursuant to the terms hereof) and to withdraw such amounts from the Operating Account or re-apply amounts previously applied to the outstanding Purchase Price in Buyer’s sole discretion to cure such circumstance or otherwise exercise remedies available to the Buyer without prior notice to, or consent from, Seller.
(vii) Regardless of whether a Margin Call or other Default exists, Buyer also may withdraw interest paid to the Operating Account in its discretion from time to time, and without prior notice to or consent from the Seller, as a full or partial off-set to Seller’s obligation hereunder to pay the Price Differential.
(viii) Within two (2) Business Days’ receipt of written request from Seller, and provided no Margin Call or other Default exists, Buyer shall withdraw any portion of such Buydown Amount from the Operating Account and remit such amount back to Seller; provided that in the event any request to withdraw funds would result in amounts in the Operating Account to be less than the Minimum Balance Requirement, Seller shall provide Buyer with thirty (30) days prior written notice of such request.
SECTION 3. Responsible Officers. Schedule 2 to the Existing Repurchase Agreement is hereby amended be deleting “Seller Authorizations” in its entirety and replacing it with Annex A attached hereto.
SECTION 4. Exhibits. The Existing Repurchase Agreement is hereby amended by adding Exhibit H attached hereto as Annex B in its proper alphabetical order.
SECTION 5. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
5.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 20 to Pricing Letter, executed and delivered by the Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
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SECTION 6. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 7. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 8. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 9. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 10. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 11. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 12. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC
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TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer | ||
By: | /s/ GARY TIMMERMAN | |
Name: GARY TIMMERMAN | ||
Title: MANAGING DIRECTOR | ||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director |
Signature Page to Amendment No. 8 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Richard Bradfield | |
Name: Richard Bradfield | ||
Title: Executive Managing Director - CFO |
Signature Page to Amendment No. 8 to Master Repurchase Agreement
ANNEX A TO THE AMENDMENT
SCHEDULE 2
RESPONSIBLE OFFICERS
SELLER AUTHORIZATIONS1
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:
[See Attached]
1 Effective as of July 16, 2018.
Schedule 2
AUTHORIZED REPRESENTATIVES OF SELLER
Name | Title | Authorized Signature | ||
President and Chief | ||||
William A. Newman | Executive Officer | [***] | ||
Richard Bradfield | Chief Financial Officer | |||
Maria Fregosi | Chief Capital Markets Officer | |||
Sheryl Johnson | Chief Legal Officer | [***] | ||
Controller/ Chief Accounting | ||||
William Fischer | Officer | |||
Courtney Tereszcuk | Treasurer |
AUTHORIZED REPRESENTATIVES OF SELLER
Name | Title | Authorized Signature | ||
President and Chief | ||||
William A. Newman | Executive Officer | |||
Richard Bradfield | Chief Financial Officer | [***] | ||
Maria Fregosi | Chief Capital Markets Officer | |||
Sheryl Johnson | Chief Legal Officer | |||
Controller/ Chief Accounting | ||||
William Fischer | Officer | |||
Courtney Tereszcuk | Treasurer | [***] |
AUTHORIZED REPRESENTATIVES OF SELLER
Name | Title | Authorized Signature | ||
President and Chief | ||||
William A. Newman | Executive Officer | |||
Richard Bradfield | Chief Financial Officer | |||
Maria Fregosi | Chief Capital Markets Officer | [***] | ||
Sheryl Johnson | Chief Legal Officer | |||
Controller/ Chief Accounting | ||||
William Fischer | Officer | |||
Courtney Tereszcuk | Treasurer |
AUTHORIZED REPRESENTATIVES OF SELLER
Name | Title | Authorized Signature | ||
President and Chief | ||||
William A. Newman | Executive Officer | |||
Richard Bradfield | Chief Financial Officer | |||
Maria Fregosi | Chief Capital Markets Officer | |||
Sheryl Johnson | Chief Legal Officer | |||
Controller/ Chief Accounting | ||||
William Fischer | Officer | [***] | ||
Courtney Tereszcuk | Treasurer |
ANNEX B TO THE AMENDMENT
EXHIBIT H
FORM OF BUYDOWN APPLICATION REQUEST
UBS AG
1285 Avenue of the Americas
New York, NY 10019
Attention: UBS Warehouse Lending Operations
Email: OL-mosg-funding@ubs.com
With a copy to:
UBS Warehouse Finance Group
Email: OL-SGMF-business@ubs.com
Re: | The Master Repurchase Agreement, dated as of October 28, 2015 (the “Repurchase Agreement”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“Buyer”) and Home Point Financial Corporation (“Seller”) |
Ladies and Gentlemen:
In accordance with Section 9(f) of the Repurchase Agreement, Seller hereby requests [that the Buydown Availability be applied to the outstanding Purchase Price] [previously applied amounts of the Buydown Availability be returned to the Operating Account] as further set forth below:
[Terms to Application of Buydown Availability:]
Temporary Purchase Price Percentage: _________%. (no decimal points)
Effective Date: [ ]
Expiration Date: [ ]
Amount of Fund to be wired to Operating Account (if any): $[ ]
Unless otherwise terminated pursuant to the Repurchase Agreement, this Buydown Application Request shall terminate on the Expiration Date indicated above.]
[Return of Previously Applied Buydown Availability:]
Return to Contractual Purchase Price Percentage: _________. (check)
Effective Date: [ ]
Exh. H-1
All terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Repurchase Agreement.
As of the date hereof, this Buydown Availability Request shall supersede all previous Buydown Availability Requests entered into between Buyer and Seller in all respects including, without limitation, with respect to Purchased Mortgage Loans that are subject to Transactions that are outstanding as of the date hereof.
Home Point Financial Corporation, as Seller | ||
By: | ||
Name: | ||
Title: |
Request Date: _______________
Exh. H-2
Exhibit 10.6.9
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.
EXECUTION
AMENDMENT NO. 9 TO MASTER REPURCHASE AGREEMENT
Amendment No. 9 to Master Repurchase Agreement, dated as of October 19, 2018 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017, Amendment No. 7, dated as of May 7, 2018, and Amendment No. 8, dated as of July 16, 2018, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by adding the following definitions of “Beneficial Ownership Certification”, “Beneficial Ownership Regulation”, “Ginnie Mae Modified Loan”, “Modification Agreement”, “RD Loan”, “RD Loan Guaranty Agreement”, “Settlement Threshold”, “VA Loan” and “VA Loan Guaranty Agreement” in their proper alphabetical order:
“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership meeting the requirements of the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
“Ginnie Mae Modified Loan” shall mean a FHA Loan, VA Loan or RD Loan that (i) is modified in accordance with the Ginnie Mae guide, (ii) conforms to the requirements of Ginnie Mae for securitization; (iii) is not a Wet Loan and (iv) is otherwise acceptable to Buyer in its sole discretion.
“Modification Agreement” shall mean, with respect to a Ginnie Mae Modified Loan, the agreement that modifies the terms of the Mortgage Loan in accordance with the Ginnie Mae guide.
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“RD Loan” shall mean a Mortgage Loan which is the subject of a RD Loan Guaranty Agreement as evidenced by a loan guaranty.
“RD Loan Guaranty Agreement” shall mean the agreement evidencing the contractual obligation of the RD respecting the guaranty of an RD Loan.
“Settlement Threshold” shall have the meaning specified in the Pricing Letter.
“VA Loan” shall mean a Mortgage Loan which is the subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate.
“VA Loan Guaranty Agreement” shall mean the agreement evidencing the contractual obligation of the VA respecting the guaranty of a VA Loan.
SECTION 2. Covenants. Section 11 of the Existing Repurchase Agreement is hereby amended by:
2.1 (i) deleting the “and” at the end of subsection (c)(i)(D); and (ii) adding the following new subsection (c)(i)(E):
(E) (1) entering into any settlement with any third party, including, without limitation, a Governmental Authority, or (2) the issuance of a consent order by any Governmental Authority, in which in the case of clauses (1) or (2), the fines, penalties, settlement amounts or any other amounts, individually or in the aggregate, owed by the Seller Party thereunder exceeds the Settlement Threshold in the twelve (12) month period preceding the Termination Date; and
2.2 adding the following new subsection (ee) at the end thereof:
(ee) Beneficial Ownership Certification. Seller shall at all times either (i) ensure that the Seller has delivered to Buyer a Beneficial Ownership Certification, if applicable, and that the information contained therein is true and correct in all respects or (ii) deliver to Buyer an updated Beneficial Ownership Certification within five (5) Business Days following the date on which the information contained in any previously delivered Beneficial Ownership Certification ceases to be true and correct in all respects. To the extent Seller believes that it is excluded from the requirements of the Beneficial Ownership Regulation, Seller shall certify as such and provide the specific exclusion relied on.
SECTION 3. Notices and Other Communications. Section 23 of the Existing Repurchase Agreement is hereby amended by deleting Buyer’s and Seller’s notice information in their entirety and replacing them with the following:
If to Buyer:
UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York
1285 Avenue of the Americas
New York, NY 10019
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Attention: [***]
Telephone: [***]
Facsimile: [***]
Email: [***]
With a copy to:
Chad Eisenberger
Executive Director & Counsel
UBS Business Solutions LLC
1285 Avenue of the Americas
New York, NY 10019
Telephone: [***]
Email: [***]
And:
[***]
If to Seller:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: [***]
Telephone: [***]
Email: [***]
With a copy to:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: Chief Legal Officer
Email: [***]
SECTION 4. General Interpretive Principles. Section 35 of the Existing Repurchase Agreement is hereby amended by deleting the reference to Section 5-102(7) and replacing it with a reference to Section l-201(b)(20).
SECTION 5. Representations and Warranties. Schedule 1 to the Existing Repurchase Agreement is hereby amended by:
5.1 deleting paragraphs (b), (c), (e), (f), (g), (h), (j), (t), (w), (dd), (kk), (ggg) and (ttt) in their entirety and replacing them with the following:
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(b) Payments Current. No payment required under the Mortgage Loan is thirty (30) days or more delinquent nor has any payment under the Mortgage Loan (other than a Ginnie Mae Modified Loan) been thirty (30) days or more delinquent at any time since the origination of the Mortgage Loan; and, if the Mortgage Loan is a Co-op Loan, no foreclosure action or private or public sale under the Uniform Commercial Code has ever to the knowledge of Seller, been threatened or commenced with respect to the Co-op Loan.
(c) Origination Date. Unless otherwise approved by Buyer and other than with respect to a Ginnie Mae Modified Loan, the initial Purchase Date is no more than (i) with respect to Mortgage Loans other than Correspondent Mortgage Loans in non-escrow states, thirty (30) days following the origination date of the Mortgage Note; (ii) with respect to Mortgage Loans other than Correspondent Mortgage Loans in escrow states, forty-five (45) days following the origination date of the Mortgage Note and (iii) with respect to Correspondent Mortgage Loans, sixty (60) days following the origination date of the Mortgage Note.
(e) No Outstanding Charges. Other than with respect to a Ginnie Mae Modified Loan, there are no defaults in complying with the terms of the Mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Other than with respect to a Ginnie Mae Modified Loan, Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest.
(f) Original Terms Unmodified. Other than with respect to a Ginnie Mae Modified Loan, the terms of the Mortgage Note (and the Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been delivered to the Custodian or to such other Person as Buyer shall designate in writing, and the terms of which are reflected in the Mortgage Loan Schedule. The substance of any such waiver, alteration or modification has been approved by the issuer of any related PMI Policy and the title insurer, if any, to the extent required by the policy, and its terms are reflected on the Mortgage Loan Schedule, if applicable. No Mortgagor has been released, in whole or in part, except in connection with an assumption agreement, approved by the issuer of any related PMI Policy and the issuer of the title insurer, to the extent required by the policy, and which assumption agreement is part of the Mortgage File delivered to the Custodian or to such other Person as Buyer shall designate in writing and the terms of which are reflected in the Mortgage Loan Schedule. Each Ginnie Mae Modified Loan has been modified in accordance with the Ginnie Mae guide.
(g) No Defenses. The Mortgage Loan (and the Assignment of Proprietary Lease related to each Co-op Loan) is not subject to any right of rescission, set-off, counterclaim
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or defense, including without limitation the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage or with respect to a Ginnie Mae Modified Loan, the terms of the Modification Agreement, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage or with respect to a Ginnie Mae Modified Loan, the Modification Agreement unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including without limitation the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or insolvency proceeding at, or subsequent to, the time the Mortgage Loan was originated or with respect to a Ginnie Mae Modified Loan, at the time the Modification Agreement was entered into.
(h) Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings or other improvements upon the Mortgaged Property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are provided for in the Fannie Mae guides or by Freddie Mac, as well as all additional requirements set forth in the Approved Underwriting Guidelines. If required by the National Flood Insurance Act of 1968, as amended, and the Flood Disaster Protection Act of 1973, as amended, each Mortgage Loan is covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration as in effect which policy conforms to Fannie Mae and Freddie Mac, as well as all additional requirements set forth in the Servicing Agreement. All individual insurance policies contain a standard mortgagee clause naming Seller and its successors and assigns as mortgagee, and all premiums thereon have been paid and such policies may not be reduced, terminated or cancelled without thirty (30) days’ prior written notice to the mortgagee. The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and expense, and to seek reimbursement therefor from the Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of Buyer upon the consummation of the transactions contemplated by this Agreement. Seller has not engaged in, and has no knowledge of the Mortgagor’s or any servicer’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of such policy, including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by Seller.
(j) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or, other than with respect to a Ginnie Mae Modified Loan, in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or, other than with respect to a Ginnie Mae Modified Loan, in part, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission. Other than with respect to a Ginnie Mae Modified Loan, Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action
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would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
(t) No Defaults. Other than payments due but not yet thirty (30) days or more delinquent, there is no default, breach, violation or event which would permit acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event which would permit acceleration, and neither Seller nor any of its affiliates nor any of their respective predecessors, have waived any default, breach, violation or event which would permit acceleration other than with respect to a Ginnie Mae Modified Loan in accordance with the Ginnie Mae guide and the Modification Agreement; and with respect to each Co-op Loan, there is no default in complying with the terms of the Mortgage Note, the Assignment of Proprietary Lease and the Proprietary Lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been paid, and Seller has the right under the terms of the Mortgage Note, Assignment of Proprietary Lease and Recognition Agreement to pay any maintenance charges or assessments owed by the Mortgagor.
(w) Origination; Payment Terms. Except with respect to a Correspondent Mortgage Loan, the Mortgage Loan was originated by Seller. Seller is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or other similar institution which is supervised and examined by a federal or state authority. The documents, instruments and agreements submitted for loan underwriting were not falsified and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading. No Mortgage Loan contains terms or provisions which would result in negative amortization. Principal payments on the Mortgage Loan that is not a Ginnie Mae Modified Loan commenced no more than sixty (60) days after funds were disbursed in connection with the Mortgage Loan. The mortgage interest rate as well as the lifetime rate cap and the periodic cap are as set forth on the Mortgage Loan Schedule. The Mortgage Note is payable in equal monthly installments of principal and interest, which installments of interest, with respect to adjustable rate Mortgage Loans, are subject to change due to the adjustments to the mortgage interest rate on each interest rate adjustment date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty (30) years from commencement of amortization. Unless otherwise specified, the Mortgage Loan is payable on the first (1st) day of each month. There are no Mortgage Loans which contain a provision allowing the Mortgagor to convert the Mortgage Note from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note.
(dd) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered under the Custodial Agreement for each Mortgage Loan have been delivered to the Custodian, including, the Modification Agreement with respect to a Ginnie Mae Modified Loan. Seller is in possession of a complete, true and accurate Mortgage File, except for such documents the originals of which have been delivered to the Custodian.
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(kk) Mortgaged Property Undamaged; No Condemnation Proceedings. There is no proceeding pending or threatened for the total or partial condemnation of the Mortgaged Property. Other than with respect to a Ginnie Mae Modified Loan, the Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended and each Mortgaged Property is in good repair.
(ggg) Recordation. Each original Mortgage was recorded and, except for those Mortgage Loans subject to the MERS identification system, all subsequent assignments of the original Mortgage (other than the assignment to Buyer) have been recorded in the appropriate jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of Seller, or is in the process of being recorded. With respect to each Ginnie Mae Modified Loan, the related Modification Agreement has been recorded or has been sent for recordation.
(ttt) Prior Financing. Other than with respect to a Correspondent Mortgage Loan or a Ginnie Mae Modified Loan and unless otherwise agreed to by Buyer, no Mortgage Loan has been subject to any other repurchase agreement or credit facility prior to the initial Purchase Date of such Mortgage Loan.
5.2 adding the following new paragraphs (aaaa) and (bbbb) at the end thereof:
(aaaa) Ginnie Mae Modified Loan. Each Ginnie Mae Modified Loan (i) was modified in accordance with the Ginnie Mae guide; (ii) with respect to (x) a FHA Loan, is fully insured by the FHA pursuant to a FHA Mortgage Insurance Certificate; (y) a VA Loan, is guaranteed by the VA pursuant to a VA Loan Guaranty Agreement and (z) a RD Loan, is guaranteed by the RD pursuant to a RD Loan Guaranty Agreement and (iii) conforms to the requirements of Ginnie Mae for securitization.
(bbbb) FHA Loans, VA Loans and RD Loans. With respect to each FHA Loan, VA Loan and RD Loan, as applicable, (i) the FHA Mortgage Insurance Certificate is in full force and effect, there exists no impairment to full recovery, the VA Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein and there exists no impairment to full recovery thereunder and the RD Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein and there exists no impairment to full recovery thereunder, (ii) 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 and RD, as applicable, to the full extent thereof, without surcharge, set-off or defense, (iii) such FHA Loan is insured, or eligible to be insured, pursuant to the National Housing Act and such VA Loan is guaranteed, or eligible to be guaranteed, under the provisions of Chapter 37 of Title 38 of the United States Code, as applicable, (iv) with respect to each FHA Mortgage Insurance Certificate, VA Loan Guaranty Agreement and RD Loan Guaranty Agreement, as applicable, Seller has complied with applicable provisions of the insurance for guaranty contract and federal statutes and regulations, all premiums or other charges due in connection with such insurance or guarantee have been paid, there has been no act or omission which would or may invalidate any such insurance or guaranty, and the insurance or guaranty is, or when issued, will be, in full force and effect with respect to such Mortgage Loan and (v) Seller has no knowledge of any
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circumstance which would cause such FHA Loan to be ineligible for FHA mortgage insurance, such VA Loan to be ineligible for a VA loan guaranty, such RD Loan to be ineligible for a RD loan guaranty or cause the FHA, the VA or RD to deny or reject the related Mortgagor’s application for FHA mortgage insurance, a VA loan guaranty or RD loan guaranty, as applicable.
SECTION 6. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
6.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 24 to Pricing Letter, executed and delivered by the Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 7. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 8. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 9. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 10. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 11. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of
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an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 12. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 13. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer | ||
By: | /s/ Gary Timmerman | |
Name: Gary Timmerman | ||
Title: Managing Director | ||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director |
Signature Page to Amendment No. 9 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Courtney Tereszcuk | |
Name: Courtney Tereszcuk | ||
Title: Treasurer |
Signature Page to Amendment No. 9 to Master Repurchase Agreement
Exhibit 10.6.10
EXECUTION
AMENDMENT NO. 10 TO MASTER REPURCHASE AGREEMENT
Amendment No. 10 to Master Repurchase Agreement, dated as of February 25, 2019 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017, Amendment No. 7, dated as of May 7, 2018, Amendment No. 8, dated as of July 16, 2018 and Amendment No. 9, dated as of October 19, 2018, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of October 28, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by deleting the definition of “Wet Loan” in its entirety and replacing it with the following:
“Wet Loan” shall mean a Mortgage Loan (a) which Seller is selling to Buyer simultaneously with the origination thereof or (b) that is a Correspondent Mortgage Loan, for which the Mortgage File has been delivered to Custodian but a Trust Receipt and a Custodial Loan Transmission has not been delivered to Buyer in accordance with the terms of the Custodial Agreement.
SECTION 2. Covenants. Section 11 of the Existing Repurchase Agreement is hereby amended by:
2.1 adding the following new subsection (ff) at the end thereof:
(ff) Mortgage File for Correspondent Mortgage Loans. With respect to each Correspondent Mortgage Loan that is a Wet Mortgage Loan, as of the related Purchase Date, the Mortgage File for such Correspondent Mortgage Loan is held by the Custodian, on behalf of Seller, pursuant to the terms of a separate custodial agreement between Seller and Custodian;
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provided that the Custodian shall issue a Trust Receipt and a Custodial Loan Transmission to Buyer in accordance with the terms of the Custodial Agreement.
2.2 adding the following new subsection (gg) at the end thereof:
(gg) Correspondent Mortgage Loans. With respect to each Correspondent Mortgage Loan that is a Wet Mortgage Loan, Seller shall provide Buyer (i) with wiring instructions of the related warehouse bank from whom the Seller and Buyer are purchasing such Correspondent Mortgage Loan; or (ii) with wiring instructions of the related correspondent originator and, if requested by Buyer, a security interest release executed by such correspondent originator in form and substance acceptable to Buyer.
SECTION 3. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
3.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller; and
(b) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 4. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 5. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 6. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 7. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
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SECTION 8. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 9. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 10. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer | ||
By: | /s/ Ari Lash | |
Name: Ari Lash | ||
Title: Executive Director | ||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director |
Signature Page to Amendment No. 10 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Courtney Tereszcuk | |
Name: Courtney Tereszcuk | ||
Title: Managing Director - Treasurer |
Signature Page to Amendment No. 10 to Master Repurchase Agreement
Exhibit 10.6.11
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.
EXECUTION
AMENDMENT NO. 11 TO MASTER REPURCHASE AGREEMENT
Amendment No. 11 to Master Repurchase Agreement, dated as of September 20, 2019 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017, Amendment No. 7, dated as of May 7, 2018, Amendment No. 8, dated as of July 16, 2018, Amendment No. 9, dated as of October 19, 2018 and Amendment No. 10, dated as of February 29, 2019, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of September 20, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by:
1.1 adding the following definitions in their proper alphabetical order:
“Agency High LTV Mortgage Loan” shall mean a Mortgage Loan, which is secured by a first lien, and such Mortgage Loan (a) conforms to the requirements of an Agency for securitization or cash purchase and (b) has a LTV in excess of the amounts for Conforming Mortgage Loans but otherwise meets the requirements of the “High LTV Refinance Option” program implemented by Fannie Mae or the “Enhanced Relief Refinance” program implemented by Freddie Mac, as applicable.
“FHA, VA and RD Streamlined Mortgage Loan” shall mean a refinance Mortgage Loan available to Mortgagors with existing FHA Loans, VA Loans and RD Loans and that is the subject of a FHA Mortgage Insurance Certificate, VA Loan Guaranty Agreement or RD Loan Guaranty Agreement, as applicable.
1.2 deleting the definition of “LTV” and replacing it with the following:
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“LTV” shall mean (a) with respect to any Mortgage Loan other than an Agency High LTV Mortgage Loan or HARP Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan to the Appraised Value of the Mortgaged Property at origination and (b) with respect to any Mortgage Loan that is a HARP Mortgage Loan, the ratio of the original outstanding principal amount of the HARP Mortgage Loan to the Appraised Value of the Mortgaged Property as of the date such Mortgage Loan is funded as a refinanced Mortgage Loan under HARP 2.0 and (c) with respect to any Mortgage Loan that is an Agency High LTV Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan to the Appraised Value of the Mortgaged Property as of the date such Mortgage Loan is funded as a refinanced Mortgage Loan under the “High LTV Refinance Option” program implemented by Fannie Mae or the “Enhanced Relief Refinance” program implemented by Freddie Mac, as applicable.
SECTION 2. Representations and Warranties. Schedule 1 to the Existing Repurchase Agreement is hereby amended by deleting subsection (r) in its entirety and replacing it with the following:
(r) LTV, PMI Policy. No Conforming Mortgage Loan has an LTV greater than [***]. The LTV of the Conforming Mortgage Loan either is not more than [***] or the excess over [***] of the Appraised Value is and will be insured as to payment defaults by a PMI Policy until the LTV of such Conforming Mortgage Loan is reduced to [***]. All provisions of such PMI Policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. No action, inaction, or event has occurred and no state of facts exists that has, or will result in the exclusion from, denial of, or defense to coverage. Any Conforming Mortgage Loan subject to a PMI Policy obligates the Mortgagor thereunder to maintain the PMI Policy and to pay all premiums and charges in connection therewith. The Mortgage Interest Rate for the Conforming Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such insurance premium. The LTV of any HARP Mortgage Loan is no greater than [***] if such Mortgage Loan is (i) a fixed-rate Mortgage Loan with a term in excess of 30 years, or (ii) an adjustable-rate Mortgage Loan with an initial fixed period greater than or equal to five years, unless otherwise approved by Buyer in its sole discretion. The LTV of any Agency High LTV Mortgage Loan meets the requirements of the “High LTV Refinance Option” program implemented by Fannie Mae or the “Enhanced Relief Refinance” program implemented by Freddie Mac, as applicable.
SECTION 3. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
3.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) the Pricing Letter, dated as of the date hereof, executed and delivered by Buyer and Seller; and
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(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 4. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 5. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 6. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 7. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 8. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 9. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 10. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE
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CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer | ||
By: | /s/ Gary Timmerman | |
Name: Gary Timmerman | ||
Title: Managing Director | ||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director |
Signature Page to Amendment No. 11 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Courtney Tereszcuk | |
Name: Courtney Tereszcuk | ||
Title: Treasurer |
Signature Page to Amendment No. 11 to Master Repurchase Agreement
Exhibit 10.6.12
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. 12 TO MASTER REPURCHASE AGREEMENT
Amendment No. 12 to Master Repurchase Agreement, dated as of December 12, 2019 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017, Amendment No. 7, dated as of May 7, 2018, Amendment No. 8, dated as of July 16, 2018, Amendment No. 9, dated as of October 19, 2018, Amendment No. 10, dated as of February 29, 2019 and Amendment No. 11, dated as of September 20, 2019, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of September 20, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Dividends and Distributions. Section 11 to the Existing Repurchase Agreement is hereby amended by deleting subsection (o) in its entirety and replacing it with the following:
(o) Limitation on Dividends and Distributions. Except as permitted by Buyer in writing, Financial Reporting Party shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Financial Reporting Party, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Financial Reporting Party, either directly or indirectly, whether in cash or property or in obligations of Financial Reporting Party or any of its consolidated Subsidiaries in any calendar year in excess of (i) [***] for the calendar year ending December 31, 2019 and (ii) thereafter, [***] of the Net Income of Financial Reporting Party for the preceding calendar year (determined in accordance with GAAP); provided that no such payments, dividends or other distributions may be made at any time following the occurrence and during the continuation of an Event of Default.
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SECTION 2. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
2.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 1 to the Pricing Letter, dated as of the date hereof, executed and delivered by Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 3. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 4. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 5. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 6. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 7. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
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SECTION 8. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 9. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS | ||
BRANCH OFFICE AT 1285 AVENUE
OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer |
||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director | ||
By: | /s/ Hye-Eun Cheong | |
Name: Hye-Eun Cheong | ||
Title: Director |
Signature Page to Amendment No. 12 to Master Repurchase Agreement
HOME POINT FINANCIAL | ||
CORPORATION, as Seller | ||
By: | /s/ Courtney Tereszcuk | |
Name: Courtney Tereszcuk | ||
Title: Managing Director - Treasurer |
Signature Page to Amendment No. 12 to Master Repurchase Agreement
Exhibit 10.6.13
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. 13 TO MASTER REPURCHASE AGREEMENT
Amendment No. 13 to Master Repurchase Agreement, dated as of July 6, 2020 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017, Amendment No. 7, dated as of May 7, 2018, Amendment No. 8, dated as of July 16, 2018, Amendment No. 9, dated as of October 19, 2018, Amendment No. 10, dated as of February 29, 2019, Amendment No. 11, dated as of September 20, 2019 and Amendment No. 12, dated as of December 12, 2019, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of September 20, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Dividends and Distributions. Section 11 to the Existing Repurchase Agreement is hereby amended by deleting subsection (o) in its entirety and replacing it with the following:
(o) Limitation on Dividends and Distributions. Except as permitted by Buyer in writing, Financial Reporting Party shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Financial Reporting Party, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Financial Reporting Party, either directly or indirectly, whether in cash or property or in obligations of Financial Reporting Party or any of its consolidated Subsidiaries in excess of (i) for the calendar year ending December 31, 2019, [***] (ii) for the calendar year ending December 31, 2020, [***] and (iii) thereafter, [***] of the Net Income of Financial Reporting Party for the preceding calendar year (determined in accordance with GAAP); provided that no such payments, dividends or other
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distributions may be made at any time following the occurrence and during the continuation of an Event of Default.
SECTION 2. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
2.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 3 to the Pricing Letter, dated as of the date hereof, executed and delivered by Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 3. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 4. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 5. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 6. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 7. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart
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of this Amendment. The parties agree that this Amendment, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999 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 providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature. The original documents shall be promptly delivered, if requested.
SECTION 8. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 9. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND
THROUGH ITS
BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer |
||
By: | /s/ GARY TIMMERMAN | |
Name: GARY TIMMERMAN | ||
Title: MANAGING DIRECTOR |
By: | /s/ Ari Lash | |
Name: Ari Lash | ||
Title: Executive Director |
Signature Page to Amendment No. 13 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Joseph Ruhlin | |
Name: Joseph Ruhlin | ||
Title: Treasurer |
Signature Page to Amendment No. 13 to Master Repurchase Agreement
Exhibit 10.6.14
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.
EXECUTION
AMENDMENT NO. 14 TO MASTER REPURCHASE AGREEMENT
Amendment No. 14 to Master Repurchase Agreement, dated as of September 18, 2020 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017, Amendment No. 7, dated as of May 7, 2018, Amendment No. 8, dated as of July 16, 2018, Amendment No. 9, dated as of October 19, 2018, Amendment No. 10, dated as of February 29, 2019, Amendment No. 11, dated as of September 20, 2019, Amendment No. 12, dated as of December 12, 2019 and Amendment No. 13, dated as of July 6, 2020, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of September 20, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement is hereby amended by adding the following definitions in their proper alphabetical order:
“Index Rate” shall have the meaning set forth in the Pricing Letter.
“One-Month LIBOR” shall have the meaning set forth in the Pricing Letter.
“Overnight LIBOR” shall have the meaning set forth in the Pricing Letter.
“Successor Rate” shall mean a rate determined by Buyer in accordance with Section 5(i) hereof.
“UETA” means the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.
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SECTION 2. Collections; Income Payments. Section 5 of the Existing Repurchase Agreement is hereby amended by adding the following new subsection at the end thereof:
(i) If Buyer determines that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining One-Month LIBOR or Overnight LIBOR, Buyer shall give prompt notice thereof to Seller, whereupon the Index Rate and Operating Account Rate, until such notice has been withdrawn by Buyer, shall be an alternative per annum rate based on an index approximating the behavior of One-Month LIBOR or Overnight LIBOR, as applicable, as determined by Buyer in its sole good faith discretion (such rate, a “Successor Rate”).
SECTION 3. Security Interest. The first paragraph of Section 8(a) of the Existing Repurchase Agreement is hereby amended by deleting such paragraph in its entirety and replacing it with the following:
(a) Security Interest. On each Purchase Date, Seller hereby sells, assigns and conveys all rights and interests in the Purchased Assets identified on the related Mortgage Loan Schedule and the Repurchase Assets related thereto. Although the parties intend that all Transactions hereunder be sales and purchases and not loans (other than as set forth in Section 20 for U.S. tax purposes), in the event any such Transactions are deemed to be loans, and in any event Seller hereby pledges to Buyer as security for the performance by Seller of the Obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in:
SECTION 4. Notices and Other Communications. Section 23 of the Existing Repurchase Agreement is hereby amended by deleting Seller’s notice information in its entirety and replacing it with the following:
If to Seller:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: [***]
Telephone: [***]
Email: [***]
With a copy to:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: Legal
Email: [***]
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SECTION 5. Counterparts. Section 34(a) of the Existing Repurchase Agreement is hereby amended by deleting such paragraph in its entirety and replacing it with the following:
(a) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed counterpart of a signature page of this Agreement in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the 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 providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.
SECTION 6. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
6.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 4 to the Pricing Letter, dated as of the date hereof, executed and delivered by Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 7. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 8. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents
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and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 9. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 10. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 11. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The parties agree that this Amendment, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the 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 providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature. The original documents shall be promptly delivered, if requested.
SECTION 12. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 13. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF
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ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer | ||
By: | /s/ Gary Timmerman | |
Name: Gary Timmerman | ||
Title: Managing Director | ||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director |
Signature Page to Amendment No. 14 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Joseph Ruhlin | |
Name: Joseph Ruhlin | ||
Title: Treasurer |
Signature Page to Amendment No. 14 to Master Repurchase Agreement
Exhibit 10.6.15
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. 15 TO MASTER REPURCHASE AGREEMENT
Amendment No. 15 to Master Repurchase Agreement, dated as of October 6, 2020 (this “Amendment”), between UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (the “Buyer”) and HOME POINT FINANCIAL CORPORATION (the “Seller”).
RECITALS
The Buyer and the Seller are parties to (a) that certain Master Repurchase Agreement, dated as of October 28, 2015 (as amended by Amendment No. 1, dated as of May 4, 2016, Amendment No. 2, dated as of September 15, 2016, Amendment No. 3, dated as of September 28, 2016, Amendment No. 4, dated as of January 5, 2017, Amendment No. 5, dated as of October 6, 2017, Amendment No. 6, dated as of November 9, 2017, Amendment No. 7, dated as of May 7, 2018, Amendment No. 8, dated as of July 16, 2018, Amendment No. 9, dated as of October 19, 2018, Amendment No. 10, dated as of February 29, 2019, Amendment No. 11, dated as of September 20, 2019, Amendment No. 12, dated as of December 12, 2019, Amendment No. 13, dated as of July 6, 2020 and Amendment No. 14, dated as of September 18, 2020, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) that certain Pricing Letter, dated as of September 20, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement and Pricing Letter, as applicable.
The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Limitation on Dividends and Distributions. Section 11(o) of the Existing Repurchase Agreement is hereby amended by deleting such Section in its entirety and replacing it with the following:
(o) Limitation on Dividends and Distributions. Except as permitted by Buyer in writing, Financial Reporting Party shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Financial Reporting Party, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Financial Reporting Party, either directly or indirectly, whether in cash or property or in obligations of Financial Reporting Party or any of its consolidated Subsidiaries in excess of (i) for the calendar year ending December 31, 2019, [***] (ii) for the calendar year ending December 31, 2020, [***] (iii) for the calendar year ending December 31, 2021, [***] less any
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amounts distributed in the calendar year ending December 31, 2020; and (iv) thereafter, [***] of the Net Income of Financial Reporting Party for the preceding calendar year (determined in accordance with GAAP); provided that no such payments, dividends or other distributions may be made at any time following the occurrence and during the continuation of an Event of Default.
SECTION 2. Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:
2.1 Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by the Buyer and Seller;
(b) Amendment No. 5 to the Pricing Letter, dated as of the date hereof, executed and delivered by Buyer and Seller; and
(c) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 3. Ratification of Agreement. As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 4. Representations and Warranties. The Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 10 of the Repurchase Agreement. The Seller hereby represents and warrants that this Amendment has been duly and validly executed and delivered by it, and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 5. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 6. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 7. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any
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notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The parties agree that this Amendment, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the 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 providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature. The original documents shall be promptly delivered, if requested.
SECTION 8. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 9. GOVERNING LAW. THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER SHALL BE GOVERNED BY E-SIGN.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Buyer and the Seller have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
UBS AG, BY AND THROUGH ITS
BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK, as Buyer |
||
By: | /s/ Gary Timmerman | |
Name: Gary Timmerman | ||
Title: Managing Director | ||
By: | /s/ Chi Ma | |
Name: Chi Ma | ||
Title: Director |
Signature Page to Amendment No. 15 to Master Repurchase Agreement
HOME POINT FINANCIAL CORPORATION, as Seller | ||
By: | /s/ Joseph Ruhlin | |
Name: Joseph Ruhlin | ||
Title: Treasurer |
Signature Page to Amendment No. 15 to Master Repurchase Agreement
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(a) |
this Amendment, executed and delivered by the Buyer and Seller;
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(b) |
Amendment No. 7 to the Pricing Letter, dated as of the date hereof, executed and delivered by Buyer and Seller; and
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(c) |
such other documents as the Buyer or counsel to the Buyer may reasonably request.
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UBS AG, BY AND THROUGH ITS
BRANCH OFFICE AT 1285 AVENUE
OF THE AMERICAS, NEW YORK,
NEW YORK, as Buyer
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By:
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/s/ Gary Timmerman | ||
Name:
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Gary Timmerman
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Title:
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Managing Director
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By:
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/s/ Chi Ma | ||
Name:
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Chi Ma
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Title:
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Director
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HOME POINT FINANCIAL
CORPORATION, as Seller
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By:
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Joseph Ruhlin | ||
Name:
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Joseph Ruhlin
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Title:
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Treasurer
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Exhibit 10.7
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.
MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT
BETWEEN
Wells Fargo Bank, N.A., as buyer (“Buyer”)
The Sellers identified on the Addendum, as seller (“Seller”)
The Guarantors, if identified on the Addendum, as guarantor (“Guarantor”)
Dated as of the Effective Date set forth in the Addendum
TABLE OF CONTENTS
Page | ||
1. | Applicability | 1 |
2. | Definitions | 1 |
3. | Program; Initiation of Transactions | 25 |
4. | Repurchase | 26 |
5. | [Reserved.] | 27 |
6. | Margin Maintenance | 27 |
7. | Income Payments | 28 |
8. | Payment and Transfer | 30 |
9. | Conditions Precedent | 30 |
10. | Program; Costs | 33 |
11. | Servicing | 35 |
12. | Representations and Warranties | 36 |
13. | Covenants | 41 |
14. | Events of Default | 47 |
15. | Remedies Upon Default | 50 |
16. | Reports | 52 |
17. | Buyer’s Policies and Procedures Manual | 54 |
18. | Repurchase Transactions | 55 |
19. | Custodial Responsibilities | 55 |
20. | Single Agreement | 56 |
21. | Notices and Other Communications | 56 |
22. | Entire Agreement; Severability | 56 |
23. | Non-assignability | 56 |
24. | Set-off | 57 |
25. | Binding Effect; Governing Law; Jurisdiction | 57 |
26. | No Waivers, Etc. | 58 |
27. | Intent | 58 |
28. | Power of Attorney | 59 |
29. | Buyer May Act Through Affiliates | 59 |
30. | Indemnification; Obligations | 59 |
31. | Counterparts | 60 |
32. | Confidentiality | 60 |
33. | Recording of Communications | 61 |
34. | Periodic Due Diligence Review | 61 |
35. | Authorizations | 62 |
36. | Documents Mutually Drafted | 62 |
37. | Joint and Several | 62 |
38. | Security Interest | 62 |
39. | Agency Security Takeout | 62 |
40. | Physical Possession of Records and Files relating to the Purchased Assets | 64 |
ANNEXES
Annex A | Financial Covenants |
SCHEDULES
Schedule 1 | Representations and Warranties with Respect to Purchased Mortgage Loans |
EXHIBITS
Exhibit A | Officer’s Compliance Certificate |
Exhibit B | Certificate of an Officer of the Seller, including a Form of Resolutions |
Exhibit C | Form of Power of Attorney |
Exhibit D | Form of Guaranty |
Exhibit E | Form of Incumbency Certificate |
Exhibit F | Form of Servicer Side Letter |
This Master Repurchase Agreement and Securities Contract is dated as of the Effective Date by and among the Buyer, the Seller and the Guarantor.
1. Applicability
From time to time the parties hereto may enter into transactions in which Seller agrees to sell all right, title and interest (including, without limitation, the Servicing Rights (as hereinafter defined)) in and to the Mortgage Loans and, if applicable, Agency Securities (each as hereinafter defined) to Buyer in exchange for the transfer of funds by Buyer to Seller, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans and Agency Securities (if applicable) at a date certain or on demand, in exchange for the transfer of funds by Seller to Buyer. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement. All sales of Mortgage Loans from Seller to Buyer will be on a servicing-released basis. In addition, the Guarantor agrees to provide the Guaranty (as hereinafter defined) guarantying certain obligations of the Seller.
2. Definitions
a. Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Acceptable State” means any state, commonwealth, or federal district acceptable to Buyer in which the Seller is licensed to originate Mortgage Loans.
“Accepted Servicing Practices” means, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, and, with respect to any Mortgage Loan other than a Government Mortgage Loan, serviced in accordance with Fannie Mae servicing practices and procedures, as defined in the Fannie Mae servicing guidelines (as may be amended or updated from time to time) and, with respect to Government Mortgage Loans, in accordance with HUD servicing guidelines, and in each case, as set forth in this Agreement and the Manual.
“Accounts Receivable Rate” means the interest rate set forth on the Addendum for such term.
“Act of Insolvency” means, with respect to any Person or its Affiliates, (i) the filing of a petition, commencing, or authorizing the commencement of any case or proceeding, or the voluntary joining 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 which is consented to, not timely contested or results in entry of an order for relief; (ii) the seeking of the appointment of a receiver, trustee, custodian or similar official for such party or an Affiliate or any substantial part of the property of either; (iii) the appointment of a receiver, conservator, or manager for such party or an Affiliate by any governmental agency or authority having the jurisdiction to do so;
(iv) the making or offering by such party or an Affiliate of a composition with its creditors or a general assignment for the benefit of creditors; (v) the admission by such party or an Affiliate of such party of its inability to pay its debts or discharge its obligations as they become due or mature; or (vi) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority 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 such party or of any of its Affiliates, or shall have taken any action to displace the management of such party or of any of its Affiliates or to curtail its authority in the conduct of the business of such party or of any of its Affiliates.
“Addendum” means that certain Addendum hereto entered into contemporaneously with this Agreement, dated as of the Effective Date, among the Buyer, the Seller and the Guarantor, as may be amended or restated from time to time.
“Additional Covenants and Conditions” means the “Other Covenants and Conditions” and the “Financial Covenants” (to the extent that such covenants are not already specifically set forth in this Agreement), as set forth in the Addendum.
“Affiliate” means, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.
“Agency” means Ginnie Mae, Freddie Mac or Fannie Mae, as applicable.
“Agency Custodian” means the custodian designated in (i) the Master Ginnie Mae Custodial Agreement, (ii) the Master Fannie Mae Custodial Agreement or (iii) the Master Freddie Mac Custodial Agreement, as applicable, which will be Wells Fargo Bank, N.A. or any other Agency Custodian approved by Buyer in its sole discretion as set forth in the Addendum.
“Agency Document Custodian Manual” means, collectively, (i) the Ginnie Mae Mortgage-Backed Securities Program Document Custodian Manual as found in Appendix V-l of the Ginnie Mae Guide, (ii) the Fannie Mae Requirements for Document Custodians or (iii) the Freddie Mac Document Custody Procedures Handbook, as applicable.
“Agency Security” means a Ginnie Mae Security, a Fannie Mae Security or a Freddie Mac Security, as applicable, and, in each case, is backed by one-to-four-family residential mortgage loans.
“Agency Security Margin” means the margin set forth in the Sublimit, Rate and Term Schedule of the Addendum for such term; provided, however, that upon the occurrence of an Event of Default, the Agency Security Margin shall automatically be increased by the Post Default Rate Margin, even if the Buyer forebears exercising any of its rights and remedies as a result of such Event of Default.
“Agency Security Purchase Commitment” means a written commitment, in form and substance satisfactory to Buyer, issued in favor of Seller by a Takeout Broker Dealer pursuant to which that Takeout Broker Dealer commits to purchase one or more Agency Securities.
“Agency Security Purchase Price” means, in the case of any Purchased Agency Security, (a) as of [***] for such Purchased Agency Security, an amount equal to [***].
“Agency Security Sublimit” means the amount set forth on the Addendum for such term.
“Aggregate Claim Threshold” means the amount set forth on the Addendum for such term.
“Aggregate Purchase Price” means the sum of (i) the Purchase Price of all Purchased Mortgage Loans subject to outstanding Transactions and (ii) the Purchase Price of all Purchased Agency Securities subject to outstanding Transactions.
“Agreement” means, collectively, this Master Repurchase Agreement and Securities Contract, the Addendum, and each Schedule and Exhibit hereto and thereto, as such agreement may be amended, supplemented or otherwise modified from time to time.
“Anti-Terrorism Laws” means, any Requirements of Law relating to money laundering or terrorism, including Executive Order 13224 signed into law on September 23, 2001, the regulations promulgated by OFAC, and the Patriot Act.
“Appraised Value” means the value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.
“Asset Tape” means a remittance report containing servicing information, including, without limitation, those fields reasonably requested by Buyer from time to time, on a loan-by-loan basis and in the aggregate, with respect to the Purchased Mortgage Loans serviced by Seller or any Servicer for the immediately prior month or months, as applicable (or any portion thereof).
“Assignment of Mortgage” means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage to Buyer.
“Authorized Funds Recipient” means the entity approved by Buyer, 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 Mortgage Loan is being originated, or in the case of a Correspondent Mortgage Loan, any warehouse bank or correspondent which has been approved by Buyer, which may receive funds on behalf of Seller. Any transfer by Buyer to an Authorized Funds Recipient shall be considered a transfer of funds by Buyer to Seller,
“Bankruptcy Code” means the United States Bankruptcy Code of 1978, as amended from time to time.
“Business Day” means any day other than (A) a Saturday or Sunday and (B) a public or bank holiday in New York City during which financial institutions are authorized or required to close.
“Buyer” has the meaning set forth on the first page of this Agreement.
“Capital Lease Obligations” means, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Change in Control” means:
(A) the sale, transfer, or other disposition of all or an amount equivalent to [***] or more of any Seller’s or any Guarantor’s assets (excluding any such action taken in connection with any securitization or whole loan transaction); or, if applicable, the sale, transfer, or other disposition of all or an amount equivalent to [***] or more of the Manager’s, General Partner’s or Limited Partner’s assets (excluding any such action taken in connection with any securitization or whole loan transaction); or
(B) the consummation of a merger or consolidation of Seller or Guarantor (or, if applicable, the Manager, General Partner or Limited Partner) with or into another entity or any other corporate reorganization, if more than [***] of the combined voting power of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation or such other reorganization is owned by Persons who were not stockholders of Seller or Guarantor (or, if applicable, the Manager, General Partner or Limited Partner) immediately prior to such merger, consolidation or other reorganization.
“Closing Instruction Letter” means the Closing Instruction Letter from Seller to the Authorized Funds Recipient, in a form substantially similar to the form provided in the Manual, as the same may be modified, supplemented and in effect from time to time.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral Documents” means the documents in the Mortgage File delivered to the Custodian.
“Collection Account” means one or more accounts identified on the Addendum and established by or on behalf of the Servicer or Seller for the benefit of Buyer or assigned to the Buyer, into which all collections and proceeds on or in respect of the Purchased Assets shall be deposited by Servicer or Seller and subject to a Collection Account Control Agreement.
“Collection Account Control Agreement” means a blocked account agreement providing the Buyer with control at all times over the Collection Account.
“Combined Loan-to-Value Ratio” or “CLTV” means with respect to any Mortgage Loan, the ratio of (i)(a) the original outstanding principal amount of the Mortgage Loan, plus (b) the unpaid principal balance of any related subordinate mortgage loan or loans secured by the Mortgaged Property, to (ii) the lesser of (a) the Appraised Value of the related Mortgaged Property at origination or (b) if the Mortgaged Property was purchased within twelve (12) months of the origination of such Mortgage Loan, the purchase price of the related Mortgaged Property.
“Conforming Mortgage Loan” means a first lien mortgage loan originated in accordance with the most recently published underwriting and eligibility criteria of Fannie Mae or Freddie Mac for purchase of mortgage loans, as determined by Buyer in its sole discretion.
“Cooperative Corporation” means with respect to any Cooperative Mortgage Loan, the cooperative apartment corporation that holds legal title to the related Cooperative Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
“Cooperative Mortgage Loan” means a mortgage loan that is secured by a first lien on and perfected security interest in Cooperative Shares and the related Proprietary Lease granting exclusive rights to occupy the related Cooperative Unit in the building owned by the related Cooperative Corporation.
“Cooperative Project” means, with respect to any Cooperative Mortgage Loan, all real property and improvements thereto and rights therein and thereto owned by a Cooperative Corporation including, without limitation, the land, separate dwelling units and all common elements.
“Cooperative Shares” means, with respect to any Cooperative Mortgage Loan, the shares of stock issued by a Cooperative Corporation and allocated to a Cooperative Unit and represented by a stock certificate.
“Cooperative Unit” means, with respect to a Cooperative Mortgage Loan, a specific unit or apartment in a Cooperative Project.
“Correspondent Mortgage Loan” means a mortgage loan purchased from a licensed mortgage lender who is approved by the Seller and for which Seller does not appear as the lender on the Mortgage Note.
“Cross Default Threshold” means [***] or such other amount set forth on the Addendum for such term.
“Custodial Agreement” means the custodial agreement between Buyer and Custodian, as the same may be amended from time to time.
“Custodian” means Wells Fargo Bank, National Association or such other party agreed to by Buyer and, prior to an Event of Default, Seller.
“Default” means an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Delivery Date” means any day which the Buyer, Seller or an agent of the Seller delivers a Mortgage File to the Custodian.
“Dollars” and “$” means dollars in lawful currency 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.
“Effective Date” means the date set forth on the Addendum.
“Electronic Tracking Agreement” means an Electronic Tracking Agreement among Buyer, Seller, Servicer (if applicable), MERS and MERSCORP Holdings, Inc., to the extent applicable as the same may be amended from time to time.
“ERISA” means the Employee Retirement Income Security Act of 1974 and any successor thereto.
“ERISA Affiliate” means each person (as defined in Section 3(9) of ERISA) which, together with Seller, would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and regulations thereunder with respect to any Plan (excluding those for which the thirty (30) day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 303 of ERISA with respect to any Plan or the failure to timely make a required installment under Section 430(j) of the Code with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Plan pursuant to Section 4041 of ERISA of a notice of intent to terminate such plan in a distress termination described under Section 4041(c ) of ERISA; (iv) the imposition on Seller or any Affiliate of any liability (including any contingent liability) to or on account of any Plan pursuant to Section 4062, 4063, 4064, 4201 or 4104 of ERISA; (v) the institution by the PBGC of proceedings for the termination of, or the appointment of a trustee to administer, any Plan; (vi) the imposition of liability on Seller or any Affiliate pursuant to Section 4062 or 4069 of ERISA pursuant to Section 4212 of ERISA; (vii) the receipt by Seller or its ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 of ERISA or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA and (ix) the imposition of a lien pursuant to Section 430(k) of the Code with respect to a Plan.
“Errors and Omissions Insurance Policy” means, if applicable, an errors and omissions insurance policy to be maintained by the Seller pursuant to Section 13(e) hereof.
“Escrow Payments” means, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“Event of Default” has the meaning specified in Section 14 hereof.
“Fannie Mae” means Fannie Mae, the government sponsored enterprise formerly known as the Federal National Mortgage Association or any successor thereto.
“Fannie Mae Guide” means, together, the Fannie Mae MBS Selling Guide and the Fannie Mae Servicing Guide, as such guides may hereafter from time to time be amended.
“Fannie Mae Security” means a mortgage-backed security received in exchange for mortgage loans sold by the Seller to Fannie Mae and issued by Fannie Mae.
“Fannie Mae Seller” means a business organization that is approved to sell mortgages to, and service on behalf of, Fannie Mae.
“Federal Book Account” means the securities clearing account identified on the Addendum owned by the Buyer.
“FHA” means the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
“FHA Approved Mortgagee” means a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.
“FHA Loan” means a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract, or eligible for such FHA Mortgage Insurance Contract and will be submitted for such contract immediately after its origination.
“FHA Mortgage Insurance” means, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.
“FHA Mortgage Insurance Certificate” means the contractual obligation of the FHA with respect to the insurance of a Mortgage Loan.
“FHA Regulations” means the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time, and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO” means Fair Isaac & Co., or any successor thereto.
“Fidelity Insurance Policy” means, if applicable, a fidelity insurance policy to be maintained by the Seller pursuant to Section 13(e) hereof.
“Financial Covenants” means the covenants set forth on Annex A to this Agreement and the “Financial Covenants” (to the extent that such covenants are not already specifically set forth in this Agreement) set forth in the Addendum.
“Freddie Mac” means Freddie Mac, the government sponsored enterprise formerly known as the Federal Home Loan Mortgage Corporation or any successor thereto.
“Freddie Mac Guide” means the Freddie Mac Sellers’ and Servicers’ Guide, as such Guide may hereafter from time to time be amended.
“Freddie Mac Security” means a mortgage-backed security received in exchange for mortgage loans sold by the Seller to Freddie Mac and issued by Freddie Mac.
“Freddie Mac Seller” means a business organization that is approved to sell mortgages to, and service on behalf of, Freddie Mac.
“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America and applied on a consistent basis.
“General Partner” means, if applicable, the Person identified on the Addendum for such term.
“Ginnie Mae” means the Government National Mortgage Association and any successor thereto.
“Ginnie Mae Guide” means the Ginnie Mae Mortgage-Backed Securities Guide, including the Ginnie Mae Document Custodian Manual, as such Ginnie Mae Guide may hereafter from time to time be amended.
“Ginnie Mae Issuer” or the “Issuer” means a business organization that, having met certain criteria, has been approved to issue securities guaranteed by Ginnie Mae and service the mortgage loans related to such securities.
“Ginnie Mae Security” means a mortgage-backed security issued by the Seller for which the timely payment of principal and interest is guaranteed by Ginnie Mae.
“Governing Documents” means, with respect to any Person, its articles or certificate of incorporation or formation, by-laws, memorandum and articles of association, partnership, limited liability company, operating or trust agreement and/or other organizational, charter or governing documents, together with any amendments, restatement or supplements thereto.
“Government Mortgage Loan” means a first lien mortgage loan originated in accordance with the criteria of USDA, FHA, VA or other Governmental Authority for purchase of mortgage loans, including, without limitation, USDA Mortgage Loans, FHA Loans and VA Loans, as determined by Buyer in its sole discretion.
“Governmental Authority” means any (a) nation or government, any state or other political subdivision thereof, (b) Person, agency, authority, instrumentality, court, regulatory body, central bank or other body or entity exercising executive, legislative, judicial, taxing, quasi-judicial, quasi-legislative, regulatory or administrative functions or powers of or pertaining to government, (c) court or arbitrator having jurisdiction over such Person, its Affiliates or its assets or properties, (d) stock exchange on which shares of stock of such Person are listed or admitted for trading or (e) accounting board or authority that is responsible for the establishment or interpretation of national or international accounting principles.
“Gross Margin” means, with respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note.
“Guarantee” means, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided, that the term “Guarantee” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance or other obligations in respect of a Mortgaged Property, to the extent required by Buyer. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Guarantor”, if applicable, has the meaning set forth in the Guaranty Addendum.
“Guaranty” means, if applicable, the guaranty in the form of Exhibit D hereto, as supplemented by the Guaranty Addendum, of each Guarantor dated as of the date set forth on the Guaranty Addendum as the same may be amended from time to time, pursuant to which each Guarantor fully and unconditionally guarantees the obligations of the Seller hereunder.
“Guaranty Addendum” means that certain addendum to the Guaranty, if applicable, dated as of the date set forth thereon, between the Buyer and the Seller.
“Guide” means, collectively, (i) the Ginnie Mae Guide, (ii) the Finnie Mae Fuide or (iii) the Freddie Mac Guide, as applicable and including the applicable Agency Document Custodian Manual, as such Guide may hereafter from time to time be amended.
“High Cost Mortgage Loan” means a mortgage loan classified as (a) a “high cost” loan under the Home Ownership and Equity Protection Act of 1994, as amended, or (b) a “high cost,” “threshold,” “covered,” “abusive,” “high risk” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).
“HUD” means the U.S. Department of Housing and Urban Development.
“Income” means with respect to any Purchased Asset, all of the following (in each case with respect to the entire par amount of the Purchased Asset represented by such Purchased Asset and not just with respect to the portion of the par amount represented by the Purchase Price advanced against such Purchased Asset): (a) all Principal Payments, (b) all Interest Payments, (c) all other income, distributions, receipts, payments, collections, prepayments, recoveries, proceeds (including insurance and condemnation proceeds) and other payments or amounts of any kind paid, received, collected, recovered or distributed on, in connection with or in respect of such Purchased Asset, including prepayment fees, extension fees, exit fees, any rental payments, if any, transfer fees, make whole fees, late charges, late fees and all other fees or charges of any kind or nature, premiums, yield maintenance charges, penalties, default interest, dividends, gains, receipts, allocations, rents, interests, profits, payments in kind, returns or repayment of contributions, net sale, foreclosure, liquidation, securitization or other disposition proceeds, insurance payments, settlements and proceeds, (d) all payments received from hedge counterparties pursuant to interest rate protection agreements related to such Purchased Mortgage Loans; and (e) all other “proceeds” as defined in Section 9-102(64) of the UCC, including all collections or distributions thereon or other income or receipts therefrom or in respect thereof; provided, that any amounts that under the applicable Mortgage Loan Documents are required to be deposited into and held in escrow or reserve to be used for a specific purpose, such as taxes and insurance, shall not be included in the term “Income” unless and until (i) an event of default exists under such Mortgage Loan Documents, (ii) the holder of the related Purchased Mortgage Loan has exercised or is entitled to exercise rights and remedies with respect to such amounts, (iii) such amounts are no longer required to be held for such purpose under such Mortgage Loan Documents, or (iv) such amounts may be applied to all or a portion of the outstanding indebtedness under such Mortgage Loan Documents.
“Indebtedness” means, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary
course of business, so long as such trade accounts payable are payable within ninety (90) days after the date the respective goods are delivered or the respective services are rendered; (c) indebtedness to others
secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase agreements, sale/buy-back agreements, early purchase
agreements, or like arrangements; (g) indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (i) indebtedness of general
partnerships of which such Person is a general partner; and (j) to the extent not already included in clauses (a) through (i) above, any amounts either existing or reported on the financial statements of Seller, that Buyer determines, in its sole
discretion, are obligations of such Person that should be included as “Indebtedness” hereunder.
“Index” means, with respect to any adjustable rate Mortgage Loan, the index identified on the Mortgage Loan Schedule and set forth in the related Mortgage Note for the purpose of calculating the applicable Mortgage Interest Rate.
“Index Floor” means the rate set forth on the Addendum for such term.
“Individual Claim Threshold” means the amount set forth on the Addendum for such term.
“Interest Only Adjustment Date” means, with respect to each Interest Only Loan, the date, specified in the related Mortgage Note on which the Monthly Payment will be adjusted to include principal as well as interest.
“Interest Only Loan” means a Mortgage Loan which only requires payments of interest for a period of time specified in the related Mortgage Note.
“Interest Payments” means with respect to any Purchased Asset, all payments of interest, income, receipts, dividends, and any other collections and distributions received from time to time in connection with any such Purchased Asset.
“Interest Rate Adjustment Date” means the date on which an adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.
“Interest Rate Protection Agreement” means, with respect to any or all of the Purchased Mortgage Loans, any short sale of a US Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, interest rate lock agreement or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller and an Affiliate of Buyer or such other party acceptable to Buyer in its sole discretion, which agreement is acceptable to Buyer in its sole discretion.
“Judgment Threshold” means the amount set forth on the Addendum for such term.
“Jumbo Mortgage Loan” means a mortgage loan with an original unpaid principal amount in excess of the lesser of the applicable conventional conforming loan limits set by Fannie Mae and Freddie Mac.
“Key Personnel” means the people or positions set forth on the Addendum for such term.
“LIBOR” means the rate determined on the first (1st) Business Day of each week by Buyer on the basis of the offered rate for one-month or three-month (as set forth on the Addendum) U.S. dollar deposits, as such rate appears on Bloomberg Screen US0001M Page, as of 11:00 a.m. (London time) on such date [***]; provided, that if such rate does not appear on Bloomberg Screen US0001M Page, the rate for such date will be the rate determined by reference to such other comparable publicly available service publishing such rates as may be selected by Buyer in its sole discretion and communicated to Seller; provided, further, that if Buyer determines that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining LIBOR, then Buyer shall provide Seller with prompt notice thereof and Buyer shall use such other comparable rate that is being used in the relevant market until otherwise communicated to Seller. Notwithstanding anything to the contrary herein, Buyer shall have the option in its sole discretion, to re-set LIBOR on a daily basis.
“Lien” means any mortgage, lien, pledge, charge, security interest or similar encumbrance.
“Limited Partner” means, if applicable, the Person identified on the Addendum for such term.
“Loan Margin” means the loan margin for the applicable Mortgage Loan set forth in the Sublimit, Rate and Term Schedule of the Addendum; provided, however, that upon the occurrence of a Default or Event of Default, the Loan Margin shall automatically be increased by the Post Default Rate Margin, even if the Buyer forebears exercising any of its rights and remedies as a result of such Default or Event of Default.
“Loan to Value Ratio” or “LTV” means with respect to any Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan, to the lesser of (a) the Appraised Value of the related Mortgaged Property at origination or (b) if the Mortgaged Property was purchased within twelve (12) months of the origination of such Mortgage Loan, the purchase price of the related Mortgaged Property.
“Manager” means the managing member or non-member manager of Seller, if any.
“Manual” has the meaning set forth in Section 17 hereof.
“Manufactured Home” means any dwelling unit built on a permanent chassis and attached to a permanent foundation system.
“Margin Call” has the meaning specified in Section 6(a) hereof.
“Margin Deadlines” has the meaning specified in Section 6(c) hereof.
“Margin Deficit” has the meaning specified in Section 6(a) hereof.
“Margin Stock” has the meaning assigned to that term in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.
“Market Value” means, with respect to any Purchased Mortgage Loan as of any date of determination, the whole loan servicing released fair market value of such Purchased Mortgage Loan on such date as determined by Buyer (or an Affiliate thereof) in its sole discretion, and with respect to any Purchased Agency Security as of any date of determination the fair market value of such Purchased Agency Security on such date as determined by Buyer (or an Affiliate thereof) in its sole discretion; provided, however, that the methodology for such determination is consistent with Wells Fargo Securities, LLC’s determination with respect to its own portfolio of mortgage loans or agency securities, to which such a determination would be applicable. Without limiting the generality of the foregoing, Seller acknowledges that the Market Value of a Purchased Mortgage Loan or Purchased Agency Security may be reduced to zero by Buyer if:
(i) a breach of a representation, warranty or covenant made by Seller in this Agreement (including, without limitation, any representation, warranty or covenant made on a Schedule or Exhibit including, without limitation, Schedule 1) with respect to such Purchased Mortgage Loan or Purchased Agency Security has occurred and is continuing;
(ii) such Purchased Mortgage Loan is or becomes a Sub-Performing Mortgage Loan;
(iii) such Purchased Mortgage Loan has been released from the possession of the Custodian under the Custodial Agreement for a period in excess of ten (10) days for a servicing-related issue or twenty (20) days if provided under a bailee letter;
(iv) such Purchased Mortgage Loan has been subject to a Transaction hereunder for a period of greater than the Maximum Transaction Duration identified on the Addendum for the relevant loan type or such Purchased Agency Security has been subject to a Transaction hereunder for a period greater than the Maximum Transaction Duration identified on the Addendum for Purchased Agency Securities; provided, however, that in no event shall a Purchased Mortgage Loan or Purchased Agency Security be subject to a Transaction for greater than 364 days;
(v) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the Mortgage File has not been delivered to the Custodian on or prior to the Wet-Ink Mortgage Loan Document Receipt Date after the related Purchase Date;
(vi) such Purchased Mortgage Loan is no longer acceptable for purchase by a Takeout Investor under any of the flow purchase or conduit programs for which Seller has been approved, or a Takeout Investor conditions the purchase of such Purchased Mortgage Loan and, in each case, in Buyer’s sole determination, such ineligibility or conditions demonstrate an impairment of the marketability of such Purchased Mortgage Loan, or, if such Purchased Mortgage Loan has not been offered to a Takeout Investor, Buyer determines that there is a flaw in such Purchased Mortgage Loan which materially impacts the marketability of such Purchased Mortgage Loan; provided, that, in the case of a Purchased Mortgage Loan that has not been offered to a Takeout Investor, if Buyer determines that there is a flaw that materially impacts the marketability of such Purchased Mortgage Loan, Buyer shall notify Seller of such flaw and allow the Seller two (2) Business Days to cure such flaw if, in Buyer’s sole determination, allowing Seller time to cure such flaw does not materially impact Buyer’s interests in, or marketability of, such Purchase Mortgage Loan;
(vii) when the Purchase Price for a Purchased Mortgage Loan is added to other Purchased Mortgage Loans that are of the same type of Mortgage Loan, the aggregate Purchase Price of all such type of Purchased Mortgage Loans exceeds the applicable Sublimit for such type of Mortgage Loans;
(viii) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Purchased Mortgage Loans exceeds the Maximum Aggregate Purchase Price;
(ix) when the Purchase Price for such Purchased Agency Security is added to other Purchased Agency Securities, the aggregate Purchase Price for all Purchased Agency Securities exceeds the Agency Security Sublimit;
(x) when the Purchase Price for such Purchased Mortgage Loan or such Purchased Agency Security, as applicable, is added to other Purchased Assets, the Aggregate Purchase Price of all Purchased Assets exceeds the Maximum Aggregate Purchase Price; or
(xi) such Purchased Agency Security is no longer acceptable for purchase by a Takeout Broker Dealer under any of the flow purchase or conduit programs for which Seller has been approved, or a Takeout Broker Dealer conditions the purchase of such Agency Security and, in each case, in Buyer’s sole determination, such ineligibility or conditions demonstrate an impairment of the marketability of such Purchased Agency Security, or, if such Purchased Agency Security has not been offered to a Takeout Broker Dealer, Buyer determines that there is a flaw in such Purchased Agency Security which materially impacts the marketability of such Purchased Agency Security; provided, that, in the case of a Purchased Agency Security that has not been offered to a Takeout Broker Dealer, if Buyer determines that there is a flaw that materially impacts the marketability of such Purchased Agency Security, Buyer shall notify Seller of such flaw and allow the Seller two (2) Business Days to cure such flaw if, in Buyer’s sole determination, allowing Seller time to cure such flaw does not materially impact Buyer’s interests in, or marketability of, such Purchase Agency Security.
“Master Agency Custodial Agreement” means (i) the Master Fannie Mae Custodial Agreement, (ii) the Master Freddie Mac Custodial Agreement or (iii) the Master Ginnie Mae Custodial Agreement, as applicable.
“Master Fannie Mae Custodial Agreement” means Fannie Mae Form 2003.
“Master Freddie Mac Custodial Agreement” means Freddie Mac Form 1035.
“Master Ginnie Mae Custodial Agreement” means form HUD-11715.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of any Seller, any Guarantor, any Manager, any General Partner, any Limited Partner or any Affiliate that is a party to any Program Agreement taken as a whole; (b) a material impairment of the ability of any Seller, any Guarantor or any Affiliate that is a party to any Program Agreement to perform under any Program Agreement and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Agreement against Seller, any Guarantor, any Manager, any General Partner, any Limited Partner or any Affiliate that is a party to any Program Agreement.
“Maximum Aggregate Purchase Price” means the amount set forth on the Addendum for such term,
“Maximum Transaction Duration” means the number of days that a Purchased Mortgage Loan or Purchased Agency Security can be subject to a Transaction as set forth on the Sublimit, Rate and Term Schedule of the Addendum.
“MBS Sweep Mortgage Loan” means a Conforming Mortgage Loan or a Government Mortgage Loan originated or purchased by Seller, which prior to being subject to a Transaction was purchased or financed by a third-party’s facility, and such mortgage loan received a pre-certification from the Custodian certifying that such loan is eligible, pursuant to Buyer’s published guidelines for such loans, as a “MBS Sweep Mortgage Loan” for sale to an Agency in exchange for an Agency Security.
“MERS” means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS Designated Mortgage Loan” means a mortgage loan for which (a) the Seller has designated or will designate MERS as, and has taken or will take such action as is necessary to cause MERS to be, the mortgagee of record, as nominee for the Seller, in accordance with MERS Procedures Manual and (b) the Seller has designated or shall promptly designate the Seller as the servicer or subservicer in the MERS System.
“MERS System” means the system of recording transfers of mortgages electronically maintained by MERS.
“MOM Mortgage Loan” means any mortgage loan as to which MERS is acting as mortgagee, solely as nominee for the originator of such mortgage loan and its successors and assigns.
“Monthly Payment” means the scheduled monthly payment of principal and/or interest on a Mortgage Loan.
“Mortgage” means each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a lien on real property and other property and rights incidental thereto.
“Mortgage File” means, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan and in the form set forth in the Manual.
“Mortgage Interest Rate” means the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.
“Mortgage Interest Rate Cap” means, with respect to an adjustable rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the related Mortgage Note.
“Mortgage Loan” means any fixed or floating rate, one-to-four-family residential mortgage loan that is evidenced by a Mortgage Note and secured by a Mortgage; provided, however, that such mortgage loan will only be considered a “Mortgage Loan” for the purposes of this Agreement if such mortgage loan is of the type listed on the Sublimit, Rate and Term Schedule of the Addendum under the heading “Mortgage Loans” which may include the following types of mortgage loans: Conforming Mortgage Loan, Correspondent Mortgage Loan, Government Mortgage Loan, Jumbo Mortgage Loan, MBS Sweep Mortgage Loan, Retail Mortgage Loan, Specialized Mortgage Loan or Wholesale Mortgage Loan. If a type of mortgage loan is not listed in the Sublimit, Rate and Term Schedule of the Addendum, such types of mortgage loans shall not be purchased by the Buyer hereunder and the sublimit, pricing and purchase price categories shall be inapplicable.
“Mortgage Loan Documents” means the documents in the related Mortgage File to be delivered to the Custodian.
“Mortgage Loan Schedule” means with respect to any Transaction as of any date, a mortgage loan schedule in the form of either (a) the schedule attached to the Manual or (b) a computer tape or other electronic medium generated by Seller and delivered to Buyer and Custodian, which provides information (including, without limitation, the information in the schedule attached to the Manual) relating to the Purchased Mortgage Loans in a format acceptable to Buyer.
“Mortgage Note” means the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
“Mortgaged Property” means the real property (and with respect to any Cooperative Mortgage Loan, the Cooperative Unit) securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor” means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder,
“Multiemployer Plan” means any employee benefit plan (within the meaning of Section 3(3) of ERISA) that is a multiemployer plan as defined in Section 3(37) of ERISA to which the Seller or any of its ERISA Affiliates makes or is obligated to make contributions or to which the Seller or any of its ERISA Affiliates within the last six (6) preceding plan years has made or been obligated to make contributions.
“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 the Mortgage Loan.
“NRSRO” means a nationally recognized statistical rating organization.
“Obligations” means (a) all of Seller’s indebtedness, obligations to pay the Repurchase Price on the Repurchase Date, the Price Differential on each Repurchase Date, and other obligations and liabilities, to Buyer, its Affiliates or Custodian arising under, or in connection with, the Program Agreements, whether now existing or hereafter arising; (b) any sums paid by Buyer or on behalf of Buyer in order to preserve any Purchased Assets or Buyer’s 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 of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Assets, or of any exercise by Buyer of its rights under the Program Agreements, including, without limitation, attorneys’ fees and disbursements and court costs; and (d) all of Seller’s indemnity obligations to Buyer or Custodian or both pursuant to the Program Agreements.
“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Officer’s Compliance Certificate” means a certificate of a Responsible Officer of Seller in the form of Exhibit A hereto.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Person” means an individual, partnership (general, limited or otherwise), corporation (including a business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA that is subject to Title IV of ERISA other than a Multiemployer Plan to which the Seller or any of its ERISA Affiliates makes or is obligated to make contributions or to which the Seller or any of its ERISA Affiliates within the last six (6) preceding plan years has made or been obligated to make contributions.
“Post Default Rate Margin” means the percentage set forth on the Addendum for such term.
“Price Differential” means with respect to any Transaction as of any date of determination, an amount equal to the product of (A) the Pricing Rate for such Transaction and (B) the Purchase Price for such Transaction, calculated daily on the basis of a three hundred sixty (360) day year for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the Repurchase Date.
“Pricing Rate” means a rate per annum equal to the greater of (A) Index Floor or (B) LIBOR, plus (1) the applicable Loan Margin for such Purchased Mortgage Loan or (2) the Agency Security Margin with respect to Transactions the subject of which are Purchased Agency Securities. The Pricing Rate shall change in accordance with LIBOR, and shall be reset on the first (1st) Business Day of each week that a Purchased Mortgage Loan or Purchased Agency Security is subject to a Transaction.
“Principal Payments” means for any Purchased Asset, all payments and prepayments of principal received and applied as principal toward the Purchase Price for such Purchased Asset, including insurance and condemnation proceeds and recoveries from liquidation or foreclosure.
“Processing Agent” shall mean each such Person so designated pursuant to Section 13(jj) hereof.
“Professional Liability Insurance Policy” means, if applicable, a professional liability insurance policy to be maintained by the Seller pursuant to Section 13(e) hereof.
“Program Agreements” means, collectively, the Servicing Agreement, if any, the Servicer Side Letter, if any, the Custodial Agreement, this Agreement, the Collection Account Control Agreement, the Seller’s Clearing Account Control Agreement, the Reserve Account Control Agreement, the Electronic Tracking Agreement, if any, and the Guaranty, if any, and any other agreements entered into in connection herewith between the Buyer and the Seller.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Lease” means the lease on a Cooperative Unit evidencing the possessory interest of the owner of the Cooperative Shares in such Cooperative Unit.
“Purchase Confirmation” means a confirmation of a Transaction, in the form attached to the Manual.
“Purchase Date” means, with respect to each Transaction, the date on which Purchased Mortgage Loans or Purchased Agency Securities, as applicable, are sold by Seller to the Buyer hereunder.
“Purchase Price” means, in the case of any Purchased Mortgage Loan, (a) as of [***] for such Purchased Mortgage Loan, an amount equal to [***].
“Purchase Price Percentage” means, the maximum allowable percentage determined by Buyer for a Purchased Mortgage Loan or Purchased Agency Security, as applicable, in accordance with the Sublimit, Rate and Term Schedule of the Addendum, and in accordance with the Manual with respect to aged loan curtailments. The Purchase Price Percentage may be reduced to zero for any Mortgage Loan that becomes an ineligible Mortgage Loan.
“Purchased Agency Securities” means the collective reference to Agency Securities sold by Seller to Buyer in a Transaction hereunder.
“Purchased Assets” means the Purchased Mortgage Loans, the Records, and all related Servicing Rights, the Purchased Agency Securities, the Program Agreements (to the extent such Program Agreements and Seller’s right thereunder relate to the Purchased Mortgage Loans or the Purchased Agency Securities), any Mortgaged Property relating to the Purchased Mortgage Loans or the Purchased Agency Securities, all insurance policies and insurance proceeds relating to any Purchased Mortgage Loan or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts (if any) and VA Loan Guaranty Agreements (if any), Income, all amounts in the Collection Account, all amounts in the Seller’s Clearing Account and the Reserve Account, and any account to which such amount is deposited, Interest Rate Protection Agreements, accounts (including any interest of Seller in escrow accounts) and any other contract rights, instruments, accounts, payments, rights to payment (including payments of interest or finance charges) general intangibles and other assets relating to the Purchased Assets (including, without limitation, any other accounts) or any interest in the Purchased Assets, and any proceeds (including the related securitization proceeds) and
distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Transaction Request and/or Trust Receipt, in all instances, whether now owned or hereafter acquired, now existing or hereafter created.
“Purchased Mortgage Loans” means the collective reference to Mortgage Loans sold by Seller to Buyer in a Transaction hereunder, listed on the related Mortgage Loan Schedule attached to the related Transaction Request, which such Mortgage Loans the Custodian has been instructed to hold pursuant to the Custodial Agreement.
“Qualified Insurer” means a mortgage guaranty insurance company duly authorized and licensed where required by law to transact mortgage guaranty insurance business and approved as an insurer by Fannie Mae or Freddie Mac.
“Qualified Originator” means an originator of Mortgage Loans which is acceptable under the Underwriting Guidelines.
“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, Servicer or any other person or entity with respect to a Purchased Mortgage Loan and/or Purchased Agency Security. Records shall include the Mortgage Notes, any Mortgages, the Mortgage Files, the credit files related to the Purchased Mortgage Loan, the Purchased Agency Security and any other instruments necessary to document or service a Mortgage Loan.
“Release of Security Interest” means form HUD-11711A, Fannie Mae Form 2004A, Freddie Mac Form 996 or Freddie Mac Form 996E, as applicable.
“Reporting Date” means the fifth (5th) day of each month or, if such day is not a Business Day, the next succeeding Business Day or such other time period set forth in the Addendum for such term.
“Reporting Period” means the time period set forth in the Addendum for such term.
“Repurchase Date” means the date occurring on the earliest of (i) the Termination Date, (ii) the date determined by application of Section 15 hereof, (iii) any date determined by application of the respective Maximum Transaction Duration, (iv) any other date communicated by Buyer to Seller in connection with the funding of a Transaction or (v) any other date communicated by Buyer to Seller in connection with a Margin Deficit as set forth in Section 6(b) hereof.
“Repurchase Price” means the price at which Purchased Assets are to be transferred from Buyer to Seller upon termination of a Transaction, on the Repurchase Date or at any other time specified in this Agreement, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price for such Purchased Assets and the accrued but unpaid Price Differential as of the date of such determination and any fees and expenses charged by the Buyer and payable by the Seller as set forth on the Addendum and any custodial fees as set forth on the Addendum with respect to such Purchased Assets and all other fees and expenses incurred by the Buyer.
“Required Insurance Amount” means the amount set forth on the Addendum for such term.
“Required Insurance Policy” means any Fidelity Insurance Policy, Errors and Omissions Insurance Policy, Professional Liability Insurance Policy or any other insurance policy that may be required by Buyer, in each case, as set forth in the Addendum.
“Requirements of Law” means, with respect to any Person, all Governing Documents and existing and future laws, treaties, rules, regulations, statutes, codes, ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority, judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other Governmental Authority, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Reserve Account” means an account established at Wells Fargo Bank, N.A. or one of its Affiliates, in the name of the Person set forth on the Addendum and subject to a Reserve Account Control Agreement with Buyer which shall at all times contain a balance at least equal to the Reserve Account Threshold, as such amount may be adjusted from time to time by Buyer in its sole discretion, and subject to set off by Buyer with respect to any Obligations.
“Reserve Account Control Agreement” means a blocked account agreement providing the Buyer with control at all times over the Reserve Account.
“Reserve Account Threshold” means the amount set forth on the Addendum for such term.
“Responsible Officer” means as to any Person, the chief executive officer, president, general partner, managing member, non-member manager, or, with respect to financial matters, the chief financial officer of such Person, or if such positions do not exist, any such similar positions.
“Retail Mortgage Loan” means a mortgage loan originated by the Seller for which the Seller took the borrower’s loan application, and for which Seller appears as the lender on the Mortgage Note.
“Sanctioned Entity” or “Sanctioned Entities” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, or (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.
“SEC” means the Securities and Exchange Commission, or any successor thereto.
“Seller” has the meaning set forth on the Addendum.
“Seller’s Account for Remittance” means an account identified on the Addendum and established in the name of Seller into which Buyer will remit funds in accordance with Section 8 hereof.
“Seller’s Acquisition Price” means the price that the Seller paid a third party for a Mortgage Loan in the event that the Seller did not originate such Mortgage Loan.
“Seller’s Clearing Account” means an account identified on the Addendum and established at Wells Fargo Bank, N.A. or one of its Affiliates, in the name of Seller and subject to a Seller’s Clearing Account Control Agreement with Buyer or another insured financial institution, into which certain amounts shall be deposited or withdrawn, which shall at all times contain a balance at least equal to the Seller’s Clearing Account Threshold, as such amount may be adjusted from time to time by Buyer in its sole discretion, and subject to set off by Buyer with respect to any Obligations.
“Seller’s Clearing Account Control Agreement” means a blocked account agreement providing the Buyer with control at all times over the Seller’s Clearing Account.
“Seller’s Clearing Account Threshold” means the amount set forth on the Addendum for such term; if no such amount is specified on the Addendum then such amount is zero.
“Servicer” means any servicer approved by Buyer in its sole discretion to service Purchased Mortgage Loans on behalf of Buyer, which may be Seller or such other third party as set forth on the Addendum that has executed a Servicing Agreement.
“Servicer Side Letter” has the meaning set forth in Section 11(d) hereof.
“Servicing Agreement” means a separate written agreement with a third party servicer to service the Purchased Mortgage Loans.
“Servicing Rights” means contractual, possessory or other rights of the Seller or any third party servicer to administer or service the Purchased Mortgage Loans, including, without limitation, the right to collect Monthly Payments.
“Settlement Account” means one or more accounts established at Wells Fargo Bank, N.A. or one of its Affiliates, by and in the name of the Buyer, into which (i) all Income shall be deposited or transferred from the Collection Account; (ii) the Takeout Investor remits funds pursuant to the Takeout Commitment; and (iii) the Takeout Broker Dealer remits funds pursuant to the Agency Security Purchase Commitment.
“Shipment Order” means an electronically transmitted request for shipment of Collateral Documents, substantially in the form attached to the Custodial Agreement.
“Specialized Mortgage Loan” means the definition as set forth in the Addendum.
“Sublimit” means the limit for the applicable Mortgage Loan type set forth in the Sublimit, Rate and Term Schedule of the Addendum. For a Purchased Mortgage Loan that is a Wet-Ink Mortgage Loan, such Mortgage Loan shall be subject to both the Sublimit for a Wet-Ink Mortgage Loan and the Sublimit applicable to such Mortgage Loan type. For a Purchased Mortgage Loan that is a Cooperative Mortgage Loan, such Mortgage Loan shall be subject to the
Sublimit for a Wet-Ink Mortgage Loan, Conforming Mortgage Loan or Jumbo Mortgage Loan, as applicable.
“Sublimit, Rate and Term Schedule” means Schedule 3 of the Addendum.
“Sub-Performing Mortgage Loan” means a mortgage loan that is or has been more than thirty (30) days contractually past due.
“Subsidiary” or “Subsidiaries” 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 Broker Dealer” means any broker dealer pre-approved in writing by Buyer, in its sole discretion, to purchase mortgage backed securities from Seller and who issues an Agency Security Purchase Commitment relating to an Agency Security. Takeout Broker Dealers approved by Buyer may be listed in the Manual or specifically approved in an electronic communication sent by Buyer to Seller.
“Takeout Commitment” means a written commitment, in form and substance satisfactory to Buyer, issued in favor of Seller by a Takeout Investor pursuant to which such Takeout Investor commits to purchase one or more Mortgage Loans. The Takeout Commitment may take the form of (1) a “clear to close” approval from the Takeout Investor confirming that such specific Mortgage Loans are approved for purchase by the Takeout Investor, (2) an automatic underwrite system “AUS” with a Seller internal clear to close per delegated authorities of the Takeout Investor, (3) a mortgage insurer clear to close per delegated authorities of the Takeout Investor, (4) a clear to close approval issued by an FHA Direct Endorsement underwriter, or (5) another form approved by Buyer as set forth on the Addendum.
“Takeout Investor” means any investor pre-approved in writing by Buyer, in its sole discretion, to purchase Mortgage Loans from Seller and who issues a Takeout Commitment relating to a Mortgage Loan. Takeout Investors approved by Buyer are listed in an electronic form by the Buyer or electronically submitted by the Seller to the Buyer.
“Termination Date” has the meaning set forth on the Addendum or any other earlier date determined by the Buyer in its sole discretion; provided, however, that in the case of an Event of Default hereunder, the date immediately upon which such Event of Default has occurred.
“Transaction” has the meaning set forth in Section 1 hereof.
“Transaction Request” means a request from Seller to Buyer to enter into a Transaction, submitted through Buyer’s on-line warehouse loan system.
“Transmittal Letter” means a letter describing a Purchased Mortgage Loan delivered or to be delivered to the Custodian hereunder, in the form attached to the Custodial Agreement.
“Trust Receipt” means, with respect to any Transaction as of any date, a receipt and certification in the form attached as an exhibit to the Custodial Agreement.
“UCC” means the Uniform Commercial Code as in effect on the Effective Date in the State of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.
“Underwriting Guidelines” means the standards, procedures and guidelines of the Seller for underwriting and acquiring Mortgage Loans, which are set forth in the written policies and procedures of the Seller.
“USDA” means the United States Department of Agriculture.
“USDA Mortgage Loan” means a mortgage loan which is guaranteed by the USDA evidenced by a loan guaranty certificate.
“US Treasury Security” means a negotiable debt obligation issued by the U.S. government for a specific amount and maturity, with any related income being exempt from state and local tax income tax.
“VA” means the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.
“VA Loan” means a Mortgage Loan which is subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate, or which is eligible for such VA Loan Guaranty Agreement and will be submitted for such loan guaranty certificate immediately after its origination, or a Mortgage Loan which is a vender loan sold by the VA.
“VA Loan Guaranty Agreement” means 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, as amended.
“Wet-Ink Documents” means, with respect to any Wet-Ink Mortgage Loan, the (a) Transaction Request, (b) the Mortgage Loan Schedule and (c) any other documents required by the Manual.
“Wet-Ink Mortgage Loan” means a mortgage loan for which the Trust Receipt has not been issued as of the Purchase Date.
“Wet-Ink Mortgage Loan Document Receipt Date” means the date that the Custodian receives the Mortgage Loan Documents for a Wet-Ink Mortgage Loan which shall in no event be later than the date set forth on the Addendum.
“Wholesale Mortgage Loan” means a mortgage loan which was submitted to Seller by a mortgage broker who is not an employee of Seller, but for which Seller’s funds were used as the Mortgage Loan proceeds at the closing, and for which Seller appears as the lender on the Mortgage Note.
b. Headings are for convenience only and do not affect interpretation. The singular includes the plural and conversely. Where a word or phrase is defined, its other grammatical forms have a corresponding meaning. A reference to a Section, Subsection, Paragraph, Subparagraph, Clause, Addendum, Annex, Schedule or Exhibit is, unless otherwise specified, a reference to a Section, Subsection, Paragraph, Subparagraph or Clause of, or Addendum, Annex, Schedule or Exhibit to, this Agreement, all of which are hereby incorporated herein by this reference and made a part hereof. The word “any” is not limiting and means “any and all” unless the context clearly requires or the language provides otherwise. 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.” The words “will” and “shall” have the same meaning and effect, A reference to day or days without further qualification means calendar days, Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed in accordance with GAAP, and all accounting determinations, financial computations and financial statements required hereunder shall be made in accordance with GAAP, without duplication of amounts, and on a consolidated basis with all Subsidiaries.
3. Program; Initiation of Transactions
a. From time to time, in the sole discretion of Buyer, (i) Buyer may purchase from Seller all right, title and interest in and to certain Mortgage Loans (including, without limitation, the Servicing Rights) that have been either originated by Seller or, if approved by Buyer, purchased by Seller from other originators, and (ii) Buyer may purchase from Seller all right, title and interest in and to certain Agency Securities. The Mortgage Loans shall be sold on a servicing-released basis. This Agreement is not a commitment by Buyer to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for Buyer to enter into Transactions with Seller. Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement. All Purchased Mortgage Loans shall exceed or meet the Underwriting Guidelines, and shall be serviced by Servicer on the behalf of Buyer. The Aggregate Purchase Price shall not exceed the Maximum Aggregate Purchase Price.
b. With respect to each Transaction, Seller shall provide notice of a proposed sale and comply with the procedures set forth in the Manual. Following receipt of such request, Buyer may enter into such requested Transaction or may notify Seller of its intention not to enter into such Transaction for any reason. In the event the Mortgage Loan Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Buyer shall provide written or electronic notice to Seller describing such error and Seller may either (a) give Buyer written or electronic authority to correct the computer data, reformat the Mortgage Loans or properly align the computer fields or (b) correct the computer data, reformat or properly align the computer fields itself and resubmit the Mortgage Loan Schedule as required herein.
In the event that the Seller gives Buyer authority to correct the computer data, reformat the Mortgage Loan Schedule or properly align the computer fields, the Seller shall pay an amount set forth in the fee schedule attached to the Manual and any other direct expenses incurred by Buyer; provided, that upon thirty (30) days’ notice to the Seller, Buyer may change such computer correction fee. The Seller shall hold Buyer harmless for such correction, reformatting or realigning, as applicable, except as otherwise expressly provided herein.
In the event that Seller requires the return of any Collateral Documents, upon its execution of a release pursuant to the terms of the Custodial Agreement, the Buyer may authorize the Custodian to deliver any Collateral Documents to the Seller for correction. The Seller shall be fully liable for any failure or delay in the return or handling of any documents delivered to the Seller in accordance with the terms of such release.
c. Upon the satisfaction of the applicable conditions precedent set forth in Section 9 hereof, all of Seller’s right, title and interest in the Purchased Assets shall pass to Buyer on the Purchase Date, against the transfer of the Purchase Price to Seller or through the transfer of the Purchase Price to an Authorized Funds Recipient. The Purchased Assets shall be sold by the Seller to the Buyer on a servicing-released basis. In the event that Seller requests that the Buyer remit by wire transfer an amount in excess of the Purchase Price in connection with the purchase of any Purchased Assets, such excess amount shall be remitted from the Seller’s Clearing Account to the Buyer, provided that such remittance does not leave the Seller’s Clearing Account with less than the Seller’s Clearing Account Threshold. Upon transfer of the Purchased Assets to Buyer as set forth in this Section 3 and until termination of any related Transactions as set forth in Sections 4 or 15 of this Agreement, ownership of each Purchased Asset, including each document in the related Mortgage File and Records, is vested in Buyer; provided that, prior to the recordation by the Custodian as provided for in the Custodial Agreement, record title in the name of Seller to each Purchased Mortgage Loan shall be retained by Seller in trust, for the benefit of Buyer, for the sole purpose of facilitating the servicing and the supervision of the servicing of the Purchased Mortgage Loans.
d. With respect to each Wet-Ink Mortgage Loan, by no later than 12:00 noon (New York City time) on the Wet-Ink Mortgage Loan Document Receipt Date following the applicable Purchase Date, Seller shall deliver or cause the related Authorized Funds Recipient to deliver to the Custodian the remaining documents in the Mortgage File.
4. Repurchase
a. Seller shall repurchase the related Purchased Assets from Buyer on each related Repurchase Date at the Repurchase Price. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Asset (but liquidation or foreclosure proceeds received by Buyer shall be applied to reduce the Repurchase Price for such Purchased Asset on each Repurchase Date except as otherwise provided herein). Seller is obligated to repurchase and take physical possession of the Purchased Assets from Buyer or its designee (including the Custodian) at Seller’s expense on the related Repurchase Date.
b. Provided that no Default shall have occurred and is continuing, and Buyer has received the related Repurchase Price upon repurchase of the Purchased Assets, Buyer agrees to release its ownership interest hereunder in the Purchased Assets. With respect to payments in full by the related Mortgagor of a Purchased Mortgage Loan, Seller agrees to (i) immediately provide Buyer with a copy of a report from the related Servicer indicating that such Purchased Mortgage Loan has been paid in full, (ii) remit to Buyer, within two (2) Business Days, the Repurchase Price with respect to such Purchased Mortgage Loans and (iii) provide Buyer a notice specifying each Purchased Mortgage Loan that has been prepaid in full. Buyer agrees to release its ownership interest in Purchased Mortgage Loans which have been prepaid in full after receipt of evidence of compliance with clauses (i) through (iii) of the immediately preceding sentence.
c. Seller shall repurchase the related Purchased Agency Securities from Buyer on each related Repurchase Date at the Repurchase Price so long as the Purchased Agency Securities remain on the Buyer’s Federal Book Account and have not previously been purchased by a Takeout Broker Dealer.
5. [Reserved.]
6. Margin Maintenance
a. If on any date, and at Buyer’s discretion, the product of either (A) the lesser of (i) the current Market Value of a Purchased Asset, or (ii) the unpaid principal balance underlying any individual Purchased Asset, times the current Purchase Price Percentage for such Purchased Asset, or (B) the current Market Value of all Purchased Assets times the current Purchase Price Percentage for all Purchased Assets, is less than the then current Purchase Price with respect to such Purchased Asset(s) as of such date (such deficit, a “Margin Deficit”), Buyer may provide notice to Seller (as such notice is more particularly set forth below and in Sections 6(b) and 6(c) below, a “Margin Call”) of such Margin Deficit.
b. In connection with the issuance of a Margin Call, Buyer may, in Buyer’s sole and absolute discretion, require Seller to (i) transfer cash to Buyer to satisfy the Margin Deficit, or (ii) repurchase the affected Purchased Assets at the Repurchase Price thereof. If Seller has not satisfied the Margin Deficit within the applicable Margin Deadline (as more particularly set forth in Section 6(c)), then Buyer may, in its sole and absolute discretion, either (i) notify Seller that Buyer is exercising its rights to sell the affected Purchased Assets as more particularly set forth in Section 6(e) below or (ii) exercise its remedies under Section 15 hereof. In connection with exercising remedies pursuant to this Section 6(b), Buyer shall apply funds received in connection with a Margin Call in such manner as Buyer determines to eliminate the Margin Deficit. If Buyer exercises its rights to sell the related Purchased Assets as set forth in Section 6(e) and the proceeds of such sale are insufficient to satisfy the Margin Deficit, Buyer may in its discretion require Seller to transfer cash to Buyer to eliminate such Margin Deficit. Once a Margin Deficit has been eliminated, the related Margin Call shall have been satisfied.
c. A Margin Call may be given by any written or electronic means. Notice given before [***] (New York City time) on a Business Day shall be met, and the related Margin Deficit satisfied, no later than [***] (New York City time) on such Business Day or such
later time as may be communicated by Buyer to Seller in its sole discretion; notice given after [***] (New York City time) on a Business Day shall be met, and the related Margin Deficit satisfied, no later than [***] (New York City time) on the following Business Day or such later time as may be communicated by Buyer to Seller in its sole discretion (the foregoing time requirements for satisfying a Margin Deficit, the “Margin Deadlines”). The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller. Any late payments, other than those directly related to a Mortgage Loan or Agency Security, shall accrue interest at rate equal to the Accounts Receivable Rate. Any late payments directly related to a Mortgage Loan shall accrue interest at the then applicable Loan Margin, or any late payments directly related to an Agency Security shall accrue interest at the then applicable Agency Security Margin.
d. In the event that a Margin Deficit exists or any other funds are due and payable to Buyer, Buyer may retain any funds received by it to which the Seller would otherwise be entitled hereunder or exercise control over any funds in the Seller’s Clearing Account and remit such funds to the Settlement Account, which funds shall be held and applied by Buyer against such Margin Deficit, may be applied by Buyer against amounts due and owing, or any shortfall, with respect to any Purchased Asset. Notwithstanding the foregoing, the Buyer retains the right, in its discretion, to make a Margin Call in accordance with the provisions of this Section 6.
e. If Buyer elects to exercise its rights set forth in Section 6(b) above to sell the affected Purchased Assets, Buyer shall have the right to sell the affected Purchased Mortgage Loans (including, without limitation, the Servicing Rights) or Purchased Agency Securities. Such disposition of a Purchased Mortgage Loan may be, at Buyer’s option, on either a servicing-released or a servicing-retained basis. Buyer shall not be required to give any warranties as to the Purchased Mortgage Loans or the Purchased Agency Securities with respect to any such disposition thereof. Buyer may specifically disclaim or modify any warranties of title or the like relating to the Purchased Mortgage Loans or the Purchased Agency Securities. The foregoing procedure for disposition of the Purchased Mortgage Loan or the Purchased Agency Security shall not be considered to adversely affect the commercial reasonableness of any sale thereof. Seller agrees that it would not be commercially unreasonable for Buyer to dispose of the Purchased Mortgage Loan or Purchased Agency Security or any portion thereof by using Internet sites that provide for the auction of assets similar to the Purchased Mortgage Loan or the Purchased Agency Security, or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Buyer shall be entitled to place the Purchased Mortgage Loans in a pool for issuance of mortgage-backed securities at the then-prevailing price for such securities and to sell such securities for such prevailing price in the open market. Buyer shall also be entitled to sell any or all of such Purchased Mortgage Loans individually for the prevailing price.
7. Income Payments
a. If Income is paid in respect of any Purchased Asset during the term of a Transaction, such Income shall be the property of Buyer and shall be deposited in the Collection
Account by either the Seller or the applicable Servicer. All deposits contained in the Collection Account (other than any Income relating to prepayments of principal in full which will be paid in accordance with Section 7(d) below) will be transferred to the Settlement Account on a monthly basis in accordance with Section 11(c) or by the Buyer at any other time.
b. Prior to an Event of Default, upon the termination of any Transaction, Buyer shall apply payments received from a Takeout Investor or Takeout Broker Dealer or otherwise, including those payments contemplated in Sections 6, 7(a) and 7(d), as follows (provided that Buyer shall have no obligation to apply payments in the event that it is unable to identify the Purchased Mortgage Loans or Purchased Agency Securities to which such payments correspond or there are insufficient funds in the Settlement Account or the Seller’s Clearing Account, and the related Repurchase Price will continue to accrue interest as if no payment had been made):
First, to the payment of the Repurchase Price for each outstanding Purchased Asset owed by the Seller under this Agreement;
Second, to the payment of all other amounts owed by the Seller under the Program Agreements;
Third, to the payment of related costs and expenses owed under the Program Agreements, including reasonable compensation to Buyer’s agents and counsel, and all expenses, liabilities and advances made or incurred by or on behalf of Buyer in connection therewith;
Fourth, to the payment of any other amounts owed by the Seller or any Affiliate to the Buyer under any other instrument or agreement, in accordance with Section 24;
Fifth, to the Servicer, if and only if such party is a third party, costs and fees it is entitled to under the related Servicing Agreement; and
Sixth, to the Seller, any remainder, by remittance to the Seller’s Clearing Account.
c. If an Event of Default has occurred, notwithstanding any provision set forth herein, Buyer may apply Income contained in the Collection Account for the payment of all outstanding Obligations under this Agreement including, any related costs and expenses owed under the Program Agreements, including reasonable compensation to Buyer’s agents and counsel, and all expenses, liabilities and advances made or incurred by or on behalf of Buyer in connection therewith. After all Obligations under this Agreement have been paid in full, Buyer may, in its sole discretion, distribute to Seller any remaining Income; provided, however, that if Seller has failed to repurchase the Purchased Assets and Buyer has exercised its rights in a “deemed sale” of the Purchased Assets as set forth in Section 15 herein, then Seller shall not be entitled to any remaining Income.
d. Seller shall, or cause Servicer to, deposit within two (2) Business Days after the receipt of any prepayment of principal in full into the Collection Account, with respect to a Purchased Mortgage Loan. Buyer shall apply upon receipt any such amount to reduce the amount of the Repurchase Price due upon termination of the related Transaction.
e. Notwithstanding anything to the contrary set forth herein, to the extent that any Income (excluding principal prepayments in full) is not deposited in the Collection Account, upon notice by Buyer to Seller, Seller shall immediately remit to the Settlement Account all such Income received by Servicer or Seller in respect of the Purchased Assets.
8. Payment and Transfer
Unless otherwise mutually agreed in writing, all transfers of funds to be made by the Seller, the Takeout Investor or Takeout Broker Dealer hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at the Settlement Account or such other account as Buyer shall specify to Seller, Takeout Investor or Takeout Broker Dealer in writing. Seller acknowledges that it has no rights of withdrawal from the Settlement Account; however, Buyer, in its discretion, may, by written notice, allow Seller to withdraw money from the Settlement Account in accordance with the terms of the Manual. All Purchased Assets shall be evidenced by a Purchase Confirmation. Any Repurchase Price received by Buyer in the Settlement Account after 2:00 p.m. (New York City time) shall be deemed received on the next succeeding Business Day. From time to time, the Seller may request in writing that a wire transfer be made from the Seller’s Clearing Account and Buyer may approve such request (provided that the Seller’s Clearing Account Threshold is maintained and there are sufficient funds remaining to satisfy any other amounts that are currently due and payable under this Agreement). Upon approval of such a request, the Buyer will remit funds to Seller’s Account for Remittance.
9. Conditions Precedent
a. Initial Transaction. As conditions precedent to the initial Transaction, Buyer shall have received on or before the day of such initial Transaction the following, in form and substance satisfactory to Buyer and duly executed by each Seller where applicable, each Guarantor and each other party thereto:
(1) Program Agreements. The Program Agreements duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver, except with respect to the Electronic Tracking Agreement, which shall be duly executed and delivered by the parties thereto and shall be in full force and effect, free of any modification, breach or waiver within thirty (30) days of the Effective Date.
(2) Security Interest. Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect Buyer’s interest in the Purchased Mortgage Loans, Purchased Agency Securities and other Purchased Assets have been taken, including, without limitation, duly authorized and filed UCC financing statements on Form UCC 1.
(3) Governing Documents. A certificate of a Responsible Officer of Seller substantially in the form of Exhibit B hereto, attaching certified copies of Seller’s Governing Documents and corporate or other resolutions approving the Program Agreements 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 Agreements.
(4) Good Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date which is thirty (30) days prior to the Effective Date with respect to the initial Transaction hereunder,
(5) Incumbency Certificate. An incumbency certificate of the corporate secretary, general partner or other similar person of each Seller, substantially in the form of Exhibit E hereto, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.
(6) Underwriting Guidelines. A true and correct copy of the Underwriting Guidelines of the Seller.
(7) Legal Opinion. If requested by Buyer, Seller shall provide a legal opinion in form and substance acceptable to Buyer,
(8) Fees. Payment of any fees due to Buyer hereunder.
(9) Manual. Seller shall have received, reviewed and agreed to comply with the Manual.
(10) Collection Account. Evidence that the Collection Account has been established by the Seller or the Servicer, and the fully executed Collection Account Control Agreement.
(11) Settlement Account. The Settlement Account has been established by Buyer.
(12) Seller’s Clearing Account. Evidence that the Seller’s Clearing Account has been established by the Seller and contains at least the Seller’s Clearing Account Threshold, and the fully executed Seller’s Clearing Account Control Agreement.
(13) Reserve Account. Evidence that the Reserve Account has been established, per the terms of the Addendum, and contains at least the Reserve Account Threshold, and the fully executed Reserve Account Control Agreement.
b. All Transactions. Buyer will not enter into a Transaction unless all of the following conditions precedent are satisfied:
(1) Due Diligence Review. Without limiting the generality of Section 34 hereof, Buyer shall have completed, to its satisfaction, its due diligence review of the related Purchased Mortgage Loans and Purchased Agency Securities and each Seller, each Guarantor and the Servicer.
(2) Required Documents.
(a) With respect to each Purchased Mortgage Loan which is not a Wet-Ink Mortgage Loan, the Mortgage File has been delivered to the Custodian (i) with respect to any purchase of twenty-five (25) or fewer Mortgage Loans on a single Purchase Date, on or prior to 10:30 a.m. (New York City time) on the Purchase Date, and (ii) with respect to any purchase of twenty-six (26) or more Mortgage Loans on a single Purchase Date, at least twenty-four (24) hours prior to the Purchase Date;
(b) With respect to each Wet-Ink Mortgage Loan, the Wet-Ink Documents have been delivered to Buyer or Custodian, as the case may be, by 2:00 p.m. (New York City time) on the Purchase Date; and
(c) With respect to each Purchased Agency Security, necessary deliveries as specified in the Manual.
(3) Transaction Documents. Buyer or its designee shall have received, within the timeframe specified in the Manual, the following, in form and substance satisfactory to Buyer and (if applicable) duly executed:
(a) A Transaction Request and a Takeout Commitment or an Agency Security Commitment.
(b) The related Mortgage Loan Schedule, and the Trust Receipt.
(c) Any other documents required to be delivered by the Manual.
(d) Such certificates, opinions of counsel or other documents as Buyer may reasonably request.
(4) No Default. No Default shall have occurred and be continuing;
(5) Requirements of Law. Buyer shall not have determined that the introduction of or a change in any Requirements of Law or in the interpretation or administration of any Requirements of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into the Transactions contemplated by this Agreement.
(6) Representations and Warranties. Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties (excluding, the representations and warranties set forth on Schedule 1, which shall result in a Margin Call or repurchase in the event of a breach) made by Seller in each Program Agreement shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
(7) Electronic Tracking Agreement. To the extent Seller is selling Mortgage Loans which are registered on the MERS® System, an Electronic Tracking Agreement entered into, duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver within thirty (30) days of the Effective Date.
(8) Material Adverse Change. None of the following shall have occurred and/or be continuing:
(a) there shall have occurred a material adverse change in the financial condition of Buyer which causes, or would be likely to cause, a material adverse effect on the ability of the Buyer to fund its obligations under this Agreement, including, but not limited to, Buyer’s corporate bond rating, if applicable, as calculated by a NRSRO has been lowered or downgraded to a rating below investment grade by such NRSRO.
(b) an event or events shall have occurred in the good faith determination of Buyer resulting in: (i) the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Purchased 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 event; or (ii) the effective absence of a “whole loan market”, “securities market” for securities backed by mortgage loans or an event or events shall have occurred, resulting in Buyer not being able to sell whole loans or securities backed by mortgage loans at prices which would have been reasonable prior to such event or event.
(9) Manual. Seller shall have received and reviewed any changes to the Manual since the initial closing hereunder.
(10) Seller’s Clearing Account. Evidence that the Seller’s Clearing Account contains at least the Seller’s Clearing Account Threshold.
(11) Reserve Account. Evidence that the Reserve Account, established pursuant to the terms of the Addendum, contains at least the Reserve Account Threshold.
c. The failure of Seller to satisfy any of the conditions precedent in this Section 9 with respect to any Transaction or Purchased Asset shall, unless such failure was waived in writing by Buyer on or before the related Purchase Date, give rise to the right of Buyer at any time to rescind the related Transaction, whereupon Seller shall immediately pay to Buyer the Repurchase Price of such Purchased Asset.
10. Program; Costs
a. Seller shall reimburse Buyer for any of Buyer’s reasonable out of pocket costs, including due diligence review costs and reasonable attorney’s fees, incurred by Buyer in determining the acceptability to Buyer of any Mortgage Loans or Agency Securities or incurred
in connection with entering into, amending or modifying the Program Agreements. Seller shall also pay, or reimburse Buyer if Buyer shall pay, any termination fee, which may be due any Servicer. Seller shall pay the fees and expenses of Buyer’s counsel in connection with the Program Agreements. Further, Seller shall pay, or reimburse Custodian for, any shipping costs incurred by Custodian upon delivery of an invoice following the delivery by Custodian of certain Mortgage Files relating to the Purchased Mortgage Loans. Legal fees for any subsequent amendments to this Agreement or related documents shall be borne by Seller. Seller shall pay ongoing custodial and bank fees and any other fees and expenses as set forth on the Addendum, and any other ongoing fees and expenses under any other Program Agreements. Seller shall indemnify, hold harmless and defend the Custodian with respect to any damages or costs and expenses incurred by the Custodian. The Custodian shall be considered a third party beneficiary of the rights set forth in the prior sentence. Any of the foregoing fees shall be invoiced and delivered to the Seller and must be paid by the due date. If there is no due date specified on the invoice, the invoice amount is due within thirty (30) days. Any late payment will accrue interest at the Accounts Receivable Rate.
b. If Buyer determines that, due to the introduction of, any change in, or the compliance by Buyer with 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 Buyer in engaging in the present or any future Transactions, then Seller agrees to pay to Buyer, from time to time, upon demand by Buyer the actual cost of additional amounts as specified by Buyer to compensate Buyer for such increased costs.
c. With respect to any Transaction, Buyer may conclusively rely upon, and shall incur no liability to Seller in acting upon, any request or other communication that Buyer reasonably believes to have been given or made by a person authorized to enter into a Transaction on Seller’s behalf, whether or not such person is listed on the certificate delivered pursuant to Section 9(a)(5) hereof. In each such case, Seller hereby waives the right to dispute Buyer’s record of the terms of the Purchase Confirmation, request or other communication.
d. Notwithstanding the assignment of the Mortgage Loan Documents and any other agreements that relate to Mortgage Loans with respect to each Purchased Asset to Buyer, Seller agrees and covenants with Buyer to enforce diligently Seller’s rights and remedies set forth in the Program Agreements.
e. Any payments made by Seller or Guarantor to Buyer shall be free and clear of, and without deduction or withholding for, any taxes; provided, however, that if such payer shall be required by law to deduct or withhold any taxes from any sums payable to Buyer, then such payer shall (A) make such deductions or withholdings and pay such amounts to the relevant authority in accordance with applicable law, (B) pay to Buyer the sum that would have been payable had such deduction or withholding not been made, and (C) at the time Price Differential is paid, pay to Buyer all additional amounts as specified by Buyer to preserve the after-tax yield Buyer would have received if such tax had not been imposed, and otherwise indemnify Buyer for any such taxes imposed (and, costs and expenses, if any, related thereto).
11. Servicing
a. Seller, on Buyer’s behalf, shall contract with Servicer to, or if Seller is the Servicer, Seller shall, interim service the Mortgage Loans consistent with the degree of skill and care that Seller customarily requires with respect to similar Mortgage Loans owned or managed by it and in accordance with Accepted Servicing Practices. The Servicer shall (i) comply with all applicable Federal, State and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and (iii) not impair the rights of Buyer in any Mortgage Loans or any payment thereunder.
b. Seller shall, or shall cause the Servicer to, hold or cause to be held all escrow funds collected by Servicer with respect to any Purchased Mortgage Loans in segregated trust accounts, separate and apart from any of Seller’s corporate funds, and shall apply the same for the purposes for which such funds were collected.
c. Seller shall, or shall cause the Servicer to, deposit all Income, excluding any prepayments in full as set forth in Section 7(d), received by Servicer on the Purchased Assets in the Collection Account no later than the fifth (5th) Business Day following receipt; provided, however, that any amounts required to be remitted to Buyer shall be deposited in the Collection Account on or prior to the day on which such remittance is to occur. Any such amounts deposited in the Collection Account shall then be remitted to the Settlement Account on a monthly basis, on the fifth (5th) calendar day (or next succeeding Business Day in the event that any such calendar day is not a Business Day), and on any other day Buyer directs such a transfer in its discretion.
d. If any Mortgage Loan that is proposed to be sold on a Purchase Date is serviced by a servicer other than Seller, or if the servicing of any Purchased Mortgage Loan is to be transferred from Seller to a Servicer other than Seller, Seller shall, prior to such Purchase Date or servicing transfer date, as applicable, provide to Buyer the related Servicing Agreement and a servicer notice or letter agreement, executed by Buyer, Seller and such Servicer (each, a “Servicer Side Letter”), in form and substance substantially similar to Exhibit F hereto.
e. The Buyer shall have the right to immediately terminate the Servicer’s right to service the Purchased Mortgage Loans under the Servicing Agreement without payment of any penalty or termination fee, Seller and the Servicer shall cooperate in transferring the servicing and all Records of the Purchased Mortgage Loans to a successor servicer appointed by Buyer in its discretion.
f. If Seller should discover that, for any reason whatsoever, Seller or any entity responsible to Seller for managing or servicing any such Purchased Mortgage Loan has failed to perform fully Seller’s obligations under the Program Agreements or any of the obligations of such entities with respect to the Purchased Mortgage Loans, Seller shall promptly notify Buyer and promptly remedy any non-compliance.
g. The Servicer’s rights and obligations to interim service the Purchased Mortgage Loans shall terminate on the twentieth (20th) day of each calendar month (and if such day is not a Business Day, the next succeeding Business Day), unless otherwise directed in writing by the
Buyer prior to such date. For purposes of this provision, notice provided by electronic mail shall constitute written notice. Upon termination, the Servicer shall transfer servicing, including, without limitation, delivery of all servicing files to the designee of the Buyer. The Servicer’s delivery of servicing files shall be in accordance with Accepted Servicing Practices. The Seller and Servicer shall have no right to select a subservicer or successor servicer. After the servicing terminates and until the servicing transfer date, the Servicer shall service the Purchased Mortgage Loans in accordance with the terms of this Agreement and for the benefit of the Buyer.
h. If Seller at any time uses or intends to use, as applicable, an independent third party subservicer to fulfill its obligations as Servicer hereunder, Seller shall, prior to the related Purchase Date or servicing transfer date, as applicable, (i) provide Buyer with the related Servicing Agreement pursuant to which such subservicer shall service such Mortgage Loans, which Servicing Agreement shall be acceptable to Buyer in all respects, (ii) obtain Buyer’s prior written consent to the use of such subservicer in the performance of such servicing duties and obligations, which consent may be withheld in Buyer’s sole discretion and (iii) provide Buyer with a fully executed Servicer Side Letter with respect to such subservicer. In no event shall Seller’s use of a subservicer relieve Seller of its obligations hereunder, and Seller shall remain liable under this Agreement as if Seller were servicing such Mortgage Loans directly,
i. Seller hereby agrees and acknowledges, and shall cause any third-party subservicer to agree and acknowledge, that Buyer or its designees shall have the right to conduct examinations and audits of the Servicer with respect to the servicing of the Purchased Mortgage Loans. Buyer shall also have the right to obtain copies of all Records and files of the Servicer relating to the Purchased Assets, including all documents relating to the Purchased Mortgage Loans and the servicing thereof.
12. Representations and Warranties
a. Each Seller represents and warrants to Buyer as of the Effective Date and at all times thereafter:
(1) Due Organization and Qualification. Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction under whose laws it is organized. Seller is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals necessary for the conduct of its business as currently conducted and the performance of its obligations under the Program Agreements except where any failure to obtain such a license, permit, charter, registration or approval would not cause or be likely to cause a Material Adverse Effect or impair the enforceability of any Purchased Asset.
(2) Power and Authority. Seller has all necessary power and authority to conduct its business as currently conducted, to execute, deliver and perform its obligations under the Program Agreements, any electronic transmissions contemplated hereunder, and to consummate the Transactions.
(3) Due Authorization. The execution, delivery and performance of the Program Agreements, any electronic transmissions contemplated hereunder, by Seller
have been duly authorized by all necessary 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.
(4) Non-contravention. None of the execution and delivery of the Program Agreements, any electronic transmissions contemplated hereunder, by Seller or the consummation of the Transactions and transactions thereunder:
(a) conflicts with, breaches or violates any provision of the Governing Documents or material agreements of Seller or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having applicability to Seller or its properties;
(b) constitutes a material default by Seller under any loan or repurchase agreement, mortgage, indenture or other agreement or instrument to which Seller is a party or by which it or any of its properties is or may be bound or affected; or
(c) results in or requires the creation of any lien upon or in respect of any of the assets of Seller except the lien relating to the Program Agreements.
(5) Legal Proceeding. There is no action, proceeding or investigation by or before any court, governmental or administrative agency or arbitrator affecting any of the Purchased Assets, Seller or any of its Affiliates, pending or threatened, which, if decided adversely, would have a Material Adverse Effect.
(6) Valid and Binding Obligations. Each of the Program Agreements, and any electronic transmissions contemplated hereunder, to which Seller is a party, when executed and delivered by Seller, will constitute the legal, valid and binding obligations of Seller, enforceable against Seller, in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law).
(7) Financial Statements. The financial statements of Seller, copies of which have been furnished to Buyer, (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 event or circumstance that would be likely to cause a Material Adverse Effect with respect to Seller. Except as disclosed in such financial statements, Seller is not subject to any contingent liabilities or commitments (including, but not limited to, any potential or current repurchase demands, any potential or current indemnification claims or notice of any actual or potential fines
or penalty fees) that, individually or in the aggregate, have a possibility of causing a Material Adverse Effect with respect to Seller.
(8) Accuracy of Information. Neither this Agreement nor any of the documents or information prepared by or on behalf of Seller and provided by Seller to Buyer contain any statement of a material fact with respect to Seller or the Transactions that was untrue or misleading in any material respect when made. Since Seller’s initial discussions with Buyer regarding the terms of this Agreement and the furnishing of such documents or information, there has been no change, nor any development or event involving a prospective change known to Seller, that would (i) render any of the Program Agreements, such documents or information untrue or misleading in any material respect or (ii) adversely affect the property, business, operations or conditions (financial or otherwise) of Seller.
(9) No Consents. No consent, license, approval or authorization from, or registration, filing or declaration with, any Governmental Authority, 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 or consummation by Seller of this Agreement or any other Program Agreements, other than any that have heretofore been obtained, given or made.
(10) Compliance With Law, Etc. Seller has complied in all respects with all Requirements of Laws. None of Seller, Guarantor or any Affiliate of Seller or Guarantor (a) is an “enemy” or an “ally of the enemy” as defined in the Trading with the Enemy Act of 1917, (b) is in violation of any Anti-Terrorism Laws, (c) is a blocked person described in Section 1 of Executive Order 13224 or to its knowledge engages in any dealings or transactions or is otherwise associated with any such blocked person, (d) is in violation of any country or list based economic and trade sanction administered and enforced by OFAC, (e) is a Sanctioned Entity, (f) has more than 10% of its assets located in Sanctioned Entities, or (g) derives more than 10% of its operating income from investments in or transactions with Sanctioned Entities. The proceeds of any Transaction have not been and will not be used to fund any operations in, finance any investments or activities in or make any payments to a Sanctioned Entity. None of Seller, Guarantor or any Affiliate of Seller or Guarantor (a) is a “broker” or “dealer” as defined in, or could be subject to a liquidation proceeding under, the Securities Investor Protection Act of 1970, or (b) is subject to regulation by any Governmental Authority limiting its ability to incur the Obligations. Each of Seller, Guarantor and all of their respective Affiliates are in compliance with the Foreign Corrupt Practices Act of 1977 and any foreign counterpart thereto. None of Seller, Guarantor or any Affiliate of Seller or Guarantor has made, offered, promised or authorized a payment of money or anything else of value (a) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (b) to any foreign official, foreign political party, party official or candidate for foreign political office, or (c) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to Seller, Guarantor, any Affiliate of Seller or Guarantor or any other Person, in violation of the Foreign Corrupt Practices Act of 1977.
(11) Solvency; Fraudulent Conveyance. Seller is solvent and will not be rendered insolvent by any Transaction and, after giving effect to each such Transaction, each 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, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. Seller and, if applicable, the Manager, the General Partner and the Limited Partner, 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 amount of consideration being received by Seller upon the sale of the Purchased Assets to Buyer constitutes reasonably equivalent value and fair consideration for such Purchased Assets. Seller is not transferring any Purchased Assets with any intent to hinder, delay or defraud any of its creditors.
(12) Investment Company Act Compliance. Seller is not required to be registered as an “investment company” as defined under the Investment Company Act nor as an entity under the control of an “investment company” as defined under the Investment Company Act.
(13) Taxes. Seller has filed all federal and state tax returns which are required to be filed and paid all taxes (including, without limitation, any applicable franchise taxes), including any assessments received by it, to the extent that such taxes have become due (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, or which otherwise have become due, in connection with a Transaction and the execution and delivery of the Program Agreements have been paid.
(14) Additional Representations. With respect to each Purchased Mortgage Loan, Seller hereby makes all of the applicable representations and warranties set forth in Schedule 1 hereto as of the related Purchase Date and continuously while such Purchased Mortgage Loan 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 transaction notice (as referenced in the Manual), any such exception to identify the applicable representation or warranty and specify in reasonable detail the related knowledge of Seller. In addition, Seller agrees to make the representations and warranties set forth in Schedule 1 hereto as of the “cutoff date” of the securitization or whole loan sale of the related Mortgage Loans by Seller or Buyer, as applicable; provided, however, that to the extent that Seller has at the time of such securitization or whole loan sale actual knowledge of any facts or circumstances that would render any of such representations and warranties materially false, Seller shall have no obligation to make such materially false representation and warranty.
(15) No Broker. Seller has not dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement; provided, that if Seller 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 Seller.
(16) Hedging. Seller has entered into hedge or swap agreements pursuant to its customary hedging procedures and in accordance with Buyer’s policies and procedures.
(17) Takeout Commitment and Agency Security Purchase Commitment. If required by Buyer prior to entering into a Transaction, Seller has entered into the required Takeout Commitment for each Purchased Mortgage Loan. If not required by Buyer prior to entering into a Transaction, Seller shall enter into a Takeout Commitment with a Takeout Investor for each Purchased Mortgage Loan upon Buyer’s request. Such Takeout Commitment shall be irrevocable in full force and effect and fully enforceable against such Takeout Investor. If required by Buyer prior to entering into a Transaction, Seller shall enter into the required Agency Security Purchase Commitment for each Purchased Agency Security. If not required by Buyer prior to entering into a Transaction, Seller shall enter into an Agency Security Purchase Commitment with a Takeout Broker Dealer for each Purchased Agency Security upon Buyer’s request. Such Agency Security Purchase Commitment shall be irrevocable in full force and effect and fully enforceable against such Takeout Broker Dealer.
(18) Regulation U. Seller is not engaged principally, or as one of its major activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Transactions hereunder will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.
(19) ERISA. Each employee benefit plan as defined in Section 3(3) of ERISA sponsored or maintained by Seller or any ERISA Affiliate or with respect to which Seller or any ERISA Affiliate has any liability, contingent or otherwise, is in material compliance with all applicable provisions of ERISA and the Code except as would not reasonably be expected to cause a Material Adverse Effect. Neither Seller nor any ERISA Affiliate has engaged in a non-exempt prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code. No ERISA Event has occurred and no condition exists which presents a material risk to Seller or any Affiliate of incurring a liability, fine or penalty with respect to or on account of any Plan or Multiemployer Plan pursuant to Title IV of ERISA except to the extent any such condition would not reasonably be expected to result in a Material Adverse Effect,
(20) Other Approvals. Seller is licensed as a mortgage lender in the state in which the related Mortgaged Property is located (to the extent such state has licensing requirements), with the facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same type as the Purchased Mortgage Loans, and no event has occurred, including but not limited to a change in insurance coverage, any notice of any fines, penalty charges or other regulatory action, which would make Seller unable to comply with applicable Agency and HUD eligibility requirements or
relevant state licensing requirements which would require notification to any Agency and HUD or the related state regulatory authority.
(21) Subsidiaries and Trade Names. Seller, and, if applicable, the Manager, the General Partner and Limited Partner, have no Subsidiaries, Affiliates or trade names other than those listed on the Addendum, or if a Subsidiary, Affiliate or trade name is established after the date of this Agreement, as provided to Buyer in the immediately following Officer’s Compliance Certificate.
(22) Other Credit Facilities and Debts. Seller is not an obligor under any master repurchase facilities or similar warehouse facilities that are not listed on the Addendum or on the schedule to the most recent Officer’s Compliance Certificate. Seller has notified its other lenders with respect to this Agreement, to the extent that such notification is necessary.
(23) Title to Properties. Seller has good, valid insurable (in the case of real property) and marketable title to all of its properties and assets.
(24) Additional Covenants and Conditions. All of the Additional Covenants and Conditions are true and correct at all times, and continue to be maintained as set forth in the Addendum.
b. The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Assets to Buyer and shall continue for so long as the Purchased Assets are subject to this Agreement.
13. Covenants
Each Seller covenants with Buyer that, at all times during the term of this facility:
a. Litigation. Seller will promptly, and in any event within [***] after service of process on any of the following, give to Buyer notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries or affecting any of the Property of any of them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Program Agreements or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim individually in an amount greater than the Individual Claim Threshold or in an aggregate amount greater than the Aggregate Claim Threshold, or (iii) which, individually or in the aggregate, if adversely determined, could be reasonably likely to have a Material Adverse Effect. Seller will promptly provide notice of any judgment, which with the passage of time, could cause an Event of Default hereunder.
b. [Reserved.]
c. [Reserved.]
d. Servicer; Asset Tape. Upon the occurrence of any of the following (a) the occurrence and continuation of an Event of Default, (b) upon any Purchased Mortgage Loan exceeding its Maximum Transaction Duration, or (c) upon the request of Buyer, Seller shall cause Servicer to provide to Buyer, electronically, in a format mutually acceptable to Buyer and Seller, an Asset Tape by no later than the Reporting Date. Seller shall not cause the Purchased Mortgage Loans to be serviced by any servicer other than a servicer expressly approved in writing by Buyer.
e. Maintenance of Insurance. The Seller shall continue to maintain, for Seller and its Subsidiaries, with responsible companies, at its own expense, the Required Insurance Policy, in each case, in a form acceptable to Buyer, with broad coverage on all officers, employees or other persons (if applicable, including, without limitation, employees or other person of the Manager or the General Partner who act on behalf of Seller in handling funds, money, documents or papers relating to the Purchased Assets) (“Seller Employees”) acting in any capacity requiring such persons to handle funds, money, documents or papers relating to the Purchased Assets, with respect to any claims made in connection with all or any portion of the Purchased Assets. Any such Required Insurance Policy shall protect and insure the Seller against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such Seller Employees, and such policies also shall protect and insure the Seller against losses in connection with the release or satisfaction of a Purchased Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 13(e) requiring such Required Insurance Policy shall diminish or relieve the Seller from its duties and obligations as set forth in this Agreement. The minimum coverage under any such Required Insurance Policy shall be at least equal to the Required Insurance Amount as set forth on the Addendum. Upon the request of the Buyer, the Seller shall cause to be delivered to the Buyer a certificate of insurance for such Required Insurance Policy and a statement from the insurer that such Required Insurance Policy shall in no event be terminated or materially modified without thirty (30) days’ prior written notice to the Buyer. Seller shall name Buyer as a loss payee under any applicable Fidelity Insurance Policy and as a direct loss payee with right of action under any applicable Errors and Omissions Insurance Policy or Professional Liability Insurance Policy.
f. No Adverse Claims. Seller warrants and will defend, and shall cause any Servicer to defend, the right, title and interest of Buyer in and to all Purchased Assets against all Liens and any other adverse claims and demands.
g. Assignment. Except as permitted herein, neither Seller nor any Servicer shall 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 Agreements), any of the Purchased Assets or any interest therein, provided, that this Section 13(g) shall not prevent any transfer of Purchased Assets in accordance with the Program Agreements.
h. Security Interest. Seller shall do all things necessary to preserve the Purchased Assets so that they remain subject to a first priority perfected security interest hereunder. Without limiting the foregoing, Seller will comply with all rules, regulations and other laws of any Governmental Authority and cause the Purchased Assets to comply with all applicable rules,
regulations and other laws. Seller will not allow any default for which Seller is responsible to occur under any Purchased Assets or any Program Agreement and Seller shall fully perform or cause to be performed when due all of its obligations under any Purchased Assets and any Program Agreement.
i. Records.
(1) Seller shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Mortgage Loans in accordance with industry custom and practice for assets similar to the Purchased Mortgage Loans, including those maintained pursuant to the preceding subparagraph, and all such Records shall be in Custodian’s possession unless Buyer otherwise approves. Seller will not consent to or request 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 a financially responsible person for any such paper, record or file. Seller or the Servicer of the Purchased Mortgage Loans will maintain all such Records not in the possession of Custodian in good and complete condition in accordance with industry practices for assets similar to the Purchased Mortgage Loans and preserve them against loss.
(2) For so long as Buyer has an interest in or lien on any Purchased Mortgage Loan, Seller will hold or cause to be held all related Records in trust for Buyer. Seller shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Buyer granted hereby.
(3) Upon reasonable advance notice from Custodian or Buyer, Seller or Servicer, if such files are in the Servicer’s possession, shall (x) provide Buyer or Custodian with a certified copy of all Records, (y) make any such Records available to Custodian or Buyer to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (z) permit Buyer 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.
j. Books. Seller shall keep or cause to be kept in reasonable detail books and records of account of its assets and business and shall clearly reflect therein the transfer of Purchased Assets to Buyer.
k. Approvals. Seller shall maintain all licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Program Agreements, and Seller shall conduct its business strictly in accordance with Requirements of Law.
1. Material Change in Business. Seller shall not liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets or make any material change in the nature of its business as carried on at the Effective Date.
Seller shall not enter into any transaction of merger or consolidation or amalgamation without giving Buyer notice of such transaction within [***] of entering into such agreement.
m. Underwriting Guidelines. Seller shall not amend or otherwise modify the Underwriting Guidelines in any material respect without ten (10) Business Days’ prior written notice to Buyer. Without limiting the foregoing, in the event that Seller makes any amendment or modification to the Underwriting Guidelines, Seller shall promptly deliver to Buyer a complete copy of the amended or modified Underwriting Guidelines. Buyer reserves the right to accept or reject such amended or modified Underwriting Guidelines and shall be under no obligation to purchase Mortgage Loans originated under the amended or modified Underwriting Guidelines. Buyer’s decision of whether to accept or reject the amended or modified Underwriting Guidelines shall be communicated to Seller within five (5) Business Days of delivery of such amended or modified Underwriting Guidelines by Seller to Buyer; provided, that the failure to communicate such decision shall not be deemed an approval by Buyer.
n. Distributions. If an Event of Default has occurred and is continuing or the payment of a distribution would cause, or would be likely to cause, a violation of a Financial Covenant herein, Seller shall not pay any dividends with respect to any capital stock or other equity interests in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller.
o. Applicable Law. Seller shall comply with the requirements of all Requirements of Law and orders of any Governmental Authority.
p. Existence. Seller shall preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises.
q. Chief Executive Office; Jurisdiction of Organization. Seller shall not (i) move its chief executive office from the address referred to on the Addendum, (ii) change its jurisdiction of organization or (iii) cause or permit any change to be made in its name, organizational identification number, Governing Documents or structure, unless it shall have provided Buyer thirty (30) days’ prior written notice of such change and Seller shall have first taken all action required by Buyer for the purpose of perfecting or protecting the lien and security interest of Buyer established hereunder.
r. Taxes. Seller shall timely file all tax returns that are required to be filed by it and shall timely pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which such taxes are due without penalties or interest, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained.
s. Transactions with Affiliates. Seller will not enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (a) otherwise permitted under the Program
Agreements, (b) in the ordinary course of Seller’s business and (c) upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate, or make a payment that is not otherwise permitted by this Section 13(s) to any Affiliate.
t. True and Correct Information. All information, reports, exhibits, schedules, financial statements (including, without limitation, any schedules) or certificates of Seller, any Affiliate or any of its officers furnished to Buyer hereunder and during Buyer’s diligence of Seller is and will be true and complete and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by Seller to Buyer pursuant to this Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to SEC filings, the appropriate SEC accounting regulations.
u. Takeout Investors, Takeout Broker Dealers and Agency Approvals; Servicing. Unless otherwise approved by Buyer in advance, Seller shall maintain its status with at least three (3) Buyer-approved Takeout Investors for each type of Mortgage Loan listed on the Sublimit, Rate and Term Schedule of the Addendum, and, if applicable, Takeout Broker Dealers or its status with Fannie Mae as an approved lender and/or Freddie Mac as an approved seller/servicer, in all cases in good standing. Should Seller, for any reason, cease to be in good standing with any of the foregoing, or, if in order to remain in good standing, should Seller be required by any Takeout Investor, Takeout Broker Dealer or Fannie Mae or Freddie Mac to provide any notification to the relevant Takeout Investor, Takeout Broker Dealer, Fannie Mae or Freddie Mac or to the Department of Housing and Urban Development, FHA or VA, such Seller shall also notify Buyer immediately in writing of such notification. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of their applicable Agency approvals at all times during the term of this Agreement and each outstanding Transaction. Seller has 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 Purchased Mortgage Loans and in accordance with Accepted Servicing Practices.
v. No Pledge. Seller shall not pledge, transfer or convey any security interest in the Collection Account or the Seller’s Clearing Account to any Person without the express written consent of Buyer.
w. [Reserved.]
x. [Reserved.]
y. [Reserved.]
z. Seller’s Clearing Account and Reserve Account. The Seller’s Clearing Account Threshold and the Reserve Account Threshold, if a Reserve Account is required per the terms of the Addendum, shall be maintained at all times.
aa. [Reserved.]
bb. Documentation. Seller has performed the documentation procedures required by its operational guidelines with respect to endorsements and assignments, including the recordation of assignments, or has verified that such documentation procedures have been performed by a prior holder of such Purchased Mortgage Loan.
cc. Compliance. Seller has observed or performed and shall continue to observe and perform in all material respects all of its covenants and other agreements, and Seller has satisfied every condition, contained in this Agreement and the other Program Agreements to be observed, performed and satisfied by it.
dd. Regulatory Action. Seller is not currently under investigation and no investigation by any federal, state or local government agency is threatened. Seller has not been the subject of any government investigation which has resulted in the voluntary or involuntary suspension of a license, a cease and desist order, or such other action as could adversely impact Seller’s business.
ee. No Default. No Default or Event of Default has occurred or is continuing.
ff. [Reserved.]
gg. Hedging. An accurate and true summary of all Interest Rate Protection Agreements entered into or maintained by Seller during the most recent calendar month end and all preceding months shall be provided to Buyer (unless Buyer gives notice to Seller that such summary is not required); and any documentation related to such Interest Rate Protection Agreements as required by the Manual and such other documents requested by Buyer shall be provided to Buyer.
hh. Notification. Seller will notify Buyer (1) promptly of any repurchase requests or demands, indemnification requests it received, or is reasonably likely to receive, from its secondary market investors, including any Takeout Investors or any Governmental Authority or Agency, and (2) immediately of any suspension notices or termination notices it received, or is reasonably likely to receive, from its secondary market investors, including any Takeout Investors, Takeout Broker Dealers or any Governmental Authority or Agency.
ii. Mortgage Loan Schedule. Each Mortgage Loan Schedule is true and correct in all respects; each of Custodian and Buyer must be provided with notice of any changes thereto.
jj. Processing Agent. If so required by Buyer, Seller shall retain and use the services of Persons experienced in the processing of transactions in the secondary mortgage market to facilitate the Transactions contemplated hereunder. Each Processing Agent shall be acceptable to Buyer in its sole discretion.
kk. Interim Funder. Seller shall ensure that Buyer will be named as the “interim funder” with MERS.
ll. Additional Covenants and Conditions. Seller shall ensure compliance with the Additional Covenants and Conditions.
mm. Partnership Change in Financial Relationship. If applicable, Seller shall promptly notify Buyer if either the General Partner or the Seller obtain separate tax identification numbers and/or begin filing separate tax returns from the other.
nn. Financial Covenants. Seller shall comply with all the Financial Covenants.
oo. Key Personnel. There shall be no material change in the Key Personnel of Seller unless Buyer receives adequate assurances from Seller within [***] of such material change that such Key Personnel position will be filled or covered to the reasonable satisfaction of Buyer and in a timeframe to the reasonable satisfaction of Buyer, and Seller shall so fill or cover the position in such manner and timeframe.
14. Events of Default
Each of the following shall constitute an “Event of Default” hereunder:
a. Payment Failure. Failure of any Seller to (i) make any payment of Price Differential or Repurchase Price or any other sum which has become due, on a Repurchase Date or otherwise, whether by acceleration or otherwise, under the terms of this Agreement, any other warehouse and security agreement or any other document evidencing or securing Indebtedness of Seller to Buyer or to any Affiliate of Buyer, or (ii) cure any Margin Deficit when due pursuant to Section 6 hereof.
b. Cross Default. (i) Seller or any of Seller’s Affiliates shall be in default under (A) any Indebtedness of any Seller or of such Affiliate which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, or (B) any other contract to which any Seller or such Affiliate is a party which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract; provided, that it shall not be an Event of Default under this subsection (B) if such disputed amount or obligation is less than the Cross Default Threshold. (ii) A breach by any Guarantor of the terms of its Guaranty or its related addendum, including but not limited to, a guarantor event of default or term of similar import or a breach of a financial covenant or the failure to timely provide any financial or other reporting.
c. Assignment. Assignment or attempted assignment by any Seller of this Agreement or any rights hereunder without first obtaining the specific written consent of Buyer, or the granting by any Seller of any security interest, lien or other encumbrances on any Purchased Assets to any person other than Buyer.
d. Insolvency. An Act of Insolvency shall have occurred with respect to any Seller or any Affiliate, or, if applicable, the Manager, the General Partner or Limited Partner.
e. Material Adverse Effect. Any Material Adverse Effect as determined by Buyer in its sole good faith discretion, or any other condition shall exist which, in Buyer’s sole good faith discretion, constitutes a material impairment of any Seller’s ability to perform its obligations under this Agreement or any other Program Agreement or would be likely to cause a Material Adverse Effect.
f. Breach of Representation, Covenant or Obligation.
(1) A breach by Seller of any of the representations, warranties, covenants or obligations set forth in Sections 12(a)(1), 12(a)(3), 12(a)(6), 12(a)(10), 12(a)(12), 12(a)(13), 12(a)(15), 12(a)(17), 12(a)(19), 12(a)(24), 13(g), 13(h), 13(1), 13(n), 13(o), 13(r), 13(s), 13(v), 13(z), 13(ee), 13(ll), 13(nn) or 13(oo) of this Agreement.
(2) A breach by any Seller of any other representation, warranty, covenant or any other obligation set forth in this Agreement (and not otherwise specified in Sections 14(f)(1) or 14(f)(3)) or any other failure to perform under this Agreement, if such breach is not cured within [***] (other than a breach of the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Market Value, the existence of a Margin Deficit, the obligation to repurchase such Mortgage Loan and the right of Buyer to sell such Mortgage Loan as set forth in Section 6(e) hereof, unless (1) such party shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made, or (2) any such representations and warranties have been determined by Buyer in its discretion to be materially false or misleading on a regular basis, then such breach shall constitute an Event of Default for purposes of this Section 14(f)(2)), unless (i) such party shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made, (ii) any such representations and warranties have been determined by Buyer in its discretion to be materially false or misleading on a regular basis, or (iii) Buyer, in its discretion, determines that such breach of a material representation, warranty or covenant materially and adversely affects (A) the condition (financial or otherwise) of such party, its Subsidiaries or Affiliates, or (B) Buyer’s determination to enter into this Agreement or Transactions with such party, then such breach shall constitute an immediate Event of Default and Seller shall have no cure right hereunder.
(3) A breach by any Seller of any of the representations, warranties, covenants or obligations set forth in Sections 12(a)(9), 13(k), 13(q), 13(u), 13(cc), 13(jj) or 13(kk) of this Agreement if such breach is not cured within [***].
g. ERISA. (i) Seller or any ERISA Affiliate shall engage in a non-exempt prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code involving any Plan or (ii) one or more ERISA Events shall occur or reasonably could be expected to occur; and, in the case of clauses (i) and (ii), such condition or event, together with all other conditions or events, if any, is reasonably expected to result in a Material Adverse Effect.
h. Change in Control. The occurrence of a Change in Control or any individuals determined to be critical executives of Seller, or, if applicable, the Manager, the General Partner or Limited Partner, in the sole discretion of the Buyer cease to be the employees of the Seller, the Manager, the General Parmer or the Limited Partner, as applicable.
i. Failure to Transfer. Any Seller fails to transfer the Purchased Assets to Buyer on the applicable Purchase Date (provided Buyer has tendered the related Purchase Price).
j. Judgment. A judgment or judgments for the payment of money in excess of the Judgment Threshold shall be rendered against any Seller or any of its Affiliates by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] from the date of entry thereof.
k. Government Action, Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority 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 any Seller, Guarantor or Affiliate thereof, or shall have taken any action to displace the management of any Seller, Guarantor or Affiliate thereof or to curtail its authority in the conduct of the business of any Seller, Guarantor or Affiliate thereof, or takes any action in the nature of enforcement to remove, limit or restrict the approval of any Seller, Guarantor or Affiliate thereof as an issuer, buyer or a seller/servicer of Mortgage Loans or Agency Securities, and such action provided for in this subparagraph (1) shall not have been discontinued or stayed within [***].
1. Inability to Perform. An officer of any Seller or Guarantor shall admit its inability to, or its intention not to, perform any of any Seller’s Obligations or Guarantor’s obligations hereunder or the Guaranty.
m. Security Interest. In the event that this Agreement is recharacterized by a court of competent jurisdiction as a secured loan or similar financing, the Agreement shall for any reason cease to create a valid, first priority security interest in any material portion of the Purchased Mortgage Loans or other Purchased Assets purported to be covered hereby.
n. Financial Statements. Any Seller’s or Guarantor’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Seller or Guarantor as a “going concern” or a reference of similar import.
o. Violation of Manual. Failure by any Seller to comply with the Manual pursuant to Section 17 after written notice by Buyer; provided, however, that any change to the Manual shall only apply to Transactions occurring on and after the date Seller receives written notice of such change to the Manual and no such change shall apply to or otherwise affect previously consummated Transactions.
p. Material Adverse Effect Upon the Servicer. A material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of the Servicer.
An Event of Default shall be deemed to be continuing unless Buyer expressly waives such Event of Default or acknowledges that such Event of Default has been subsequently cured by Seller, in each case, in writing.
15. Remedies Upon Default
In the event that an Event of Default shall have occurred:
a. Buyer may, at its option, declare an Event of Default to have occurred hereunder (which option shall be deemed to have been exercised immediately and without any notice upon the occurrence of an Event of Default pursuant to Section 14(d)) and, upon the exercise or deemed exercise of such option, 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). Buyer shall give written notice to each Seller and Guarantor of the exercise of such option as promptly as practicable; provided, however, that Buyer shall not provide written notice upon the occurrence of an Event of Default pursuant to Section 14(d), which shall constitute an immediate Event of Default without any further action or notice by Buyer. (For purposes of this provision, notice provided by electronic mail shall constitute written notice.)
b. If Buyer exercises or is deemed to have exercised the option referred to in paragraph (a) of this Section 15, (i) Seller’s obligations in such Transactions to repurchase all Purchased Assets, at the Repurchase Price therefor on the Repurchase Date determined in accordance with paragraph (a) of this Section 15, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by Buyer, or, to the extent not yet transferred to the Collection Account, the Seller’s Clearing Account or the Reserve Account, remitted to Buyer, and in any case applied, in Buyer’s discretion, to the aggregate unpaid Repurchase Prices for all outstanding Transactions and any other amounts owing by any Seller hereunder, (iii) Seller shall immediately comply with the further instructions of Buyer with respect to holding or delivering any of the Mortgage Files relating to any Purchased Assets subject to such Transactions then in Seller’s possession or control; and (iv) the Agency Security Margin and the Loan Margin shall automatically be increased by the Post Default Rate Margin. In addition, Buyer shall have the right to satisfy any Obligations with funds remaining in the Seller’s Clearing Account or the Reserve Account.
c. Buyer shall have the right to direct all Servicers then servicing any Purchased Mortgage Loans to remit all collections thereon to Buyer to the extent that any such Servicer is not currently remitting to the Buyer, and if any such payments are received by Seller, Seller shall not commingle the amounts received with other funds of Seller and shall promptly pay them over to Buyer. Buyer shall also have the right to terminate any one or all of the Servicers then servicing any Purchased Mortgage Loans with or without cause.
d. If Buyer exercises or is deemed to have exercised the option referred to in paragraph (a) of this Section 15, Buyer shall have the right to immediately sell and liquidate the Purchased Mortgage Loans (including, without limitation, the Servicing Rights), Purchased Agency Securities and all other Purchased Assets. Such disposition of Purchased Mortgage Loans may be, at Buyer’s option, on either a servicing-released or a servicing-retained basis. Buyer shall not be required to give any warranties as to the Purchased Mortgage Loans or Purchased Agency Securities with respect to any such disposition thereof. Buyer may specifically disclaim or modify any warranties of title or the like relating to the Purchased
Assets. The foregoing procedure for disposition and liquidation of the Purchased Assets shall not be considered to adversely affect the commercial reasonableness of any sale thereof. Seller agrees that it would not be commercially unreasonable for Buyer to dispose of the Purchased Assets or any portion thereof by using Internet sites that provide for the auction of assets similar to such Purchased Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Buyer shall be entitled to place the Purchased Mortgage Loans in a pool for issuance of mortgage-backed securities at the then-prevailing price for such securities and to sell such securities for such prevailing price in the open market. Buyer shall also be entitled to sell any or all of such Purchased Mortgage Loans individually for the prevailing price. Buyer shall also be entitled, in its discretion to elect, in lieu of selling all or a portion of such Purchased Assets, to give the Seller credit for such Purchased Assets in an amount equal to the current market value of such Purchased Assets (as determined by Buyer (or an Affiliate thereof) in its discretion using methodology consistent with Buyer’s determination with respect to similar portfolios) against the aggregate unpaid Repurchase Price and any other amounts owing by the Seller hereunder.
e. Upon the happening of one or more Events of Default, Buyer may apply any proceeds from the liquidation of the Purchased Assets to the Repurchase Price hereunder and all other Obligations in the manner Buyer deems appropriate in its sole discretion.
f. Seller shall be liable to Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Buyer in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal and external counsel of Buyer) incurred in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.
g. Seller shall be liable to Buyer for the Repurchase Price related to a Transaction, and, to the extent permitted by applicable law, Seller shall be liable to Buyer for interest on any other amounts owing by Seller hereunder, from the date Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on any sum payable by Seller under this paragraph (g) shall be at a rate equal to the Post Default Rate Margin or the Accounts Receivable Rate, as applicable.
h. Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law, including, without limitation, any equitable remedies.
i. Buyer may exercise one or more of the remedies available to Buyer immediately upon the occurrence of an Event of Default and, except to the extent provided in paragraph (a) of this Section 15, at any time thereafter without notice to Seller. All rights and remedies arising
under this Agreement amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have.
j. Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and as permitted by law Seller hereby expressly waives any defenses Seller might otherwise have to require Buyer to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) Seller might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the 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.
k. If Buyer exercises or is deemed to have exercised the option referred to in paragraph (a) of this Section 15, Buyer shall have the right to terminate this Agreement; provided, however, that no such termination shall affect Seller’s outstanding obligations to Buyer at the time of such termination, nor shall it affect the survivability of any provisions in this Agreement that, by their express terms, are intended to survive the termination of this Agreement or any of the other Program Agreements and the repayment in full of all outstanding Obligations.
16. Reports
a. Notices. Each Seller and Guarantor shall furnish to Buyer (w) promptly, copies of any material and adverse notices (including, without limitation, notices of defaults, breaches, potential defaults or potential breaches) and any material financial information that is not otherwise required to be provided by Seller hereunder which is given to Seller’s lenders, (x) immediately, notice of the occurrence of any Event of Default hereunder or default or breach by any Seller, Servicer or Guarantor of any obligation under any Program Agreement or any material contract or agreement of any Seller, Servicer or Guarantor or the occurrence of any event or circumstance that such party reasonably expects has resulted in, or will, with the passage of time, result in, a Material Adverse Effect or an Event of Default, (y) immediately, notice of a Takeout Investor’s cancellation of a Takeout Commitment or notice of a Takeout Broker Dealer’s cancellation of Agency Security Purchase Commitment and (z) the following:
(1) as soon as available and in any event within the Reporting Period, the unaudited balance sheets of Seller and Guarantor (if elected in the Guaranty Addendum with respect to the Guarantor) as at the end of such period, the unaudited balance sheets, related unaudited consolidated statements of income and retained earnings and of cash flows for the Seller and Guarantor, if applicable, for such period and the portion of the fiscal year through the end of such period, accompanied by the Officer’s Compliance Certificate, executed by a Responsible Officer of Seller and Guarantor, if applicable, which certificate shall state that said financial statements and schedules fairly present in all material respects the financial condition and results of operations of Seller and Guarantor, if applicable, in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end adjustments);
(2) as soon as available and in any event within one hundred twenty (120) days after the end of the Seller’s fiscal year, the audited balance sheets and the related
statements of income for the Seller and Guarantor (if elected in the Guaranty Addendum with respect to the Guarantor) as at the end of such fiscal year, with such balance sheets and statements of income being audited if required by Buyer but in any event prepared by a certified public accountant in accordance with GAAP, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall have no “going concern” qualification and shall state that said financial statements fairly present the financial condition and results of operations of Seller and Guarantor, if applicable, as at the end of, and for, such fiscal year in accordance with GAAP;
(3) to the extent permitted by Governmental Authority and as soon as available, or otherwise stipulated in this Agreement, copies of relevant portions of all final written Fannie Mae, Freddie Mac, FHA, VA, Governmental Authority 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 Seller’s operations;
(4) from time to time such other information regarding the financial condition, operations, or business of the Seller or the Guarantor as Buyer may reasonably request;
(5) as soon as reasonably possible or as otherwise set forth in this Agreement, notice of any of the following events:
(a) change in the insurance coverage required of Seller, Servicer or any other Person pursuant to any Program Agreement, with a copy of evidence of same attached;
(b) any material claim, dispute, litigation, investigation, proceeding or suspension between Seller, Guarantor or Servicer, on the one hand, and any Governmental Authority, Takeout Investor, third party loan purchaser or any other Person on the other;
(c) any material change in accounting policies or financial reporting practices of Seller, Guarantor or Servicer;
(d) with respect to any Purchased Mortgage Loan, immediately upon receipt of notice or knowledge thereof, that the value of the underlying Mortgaged Property or such Mortgage Loan has been adversely affected for any reason, including, without limitation, damage by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty;
(e) any material issues raised upon examination of Seller, Guarantor or Seller’s facilities by any Governmental Authority;
(f) any material change in the Indebtedness of the Seller or Guarantor, including, without limitation, any default, renewal, non-renewal, termination, increase in available amount or decrease in available amount related thereto;
(g) any breach of a representation or warranty set forth in Schedule 1 hereto;
(h) any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect with respect to Seller or Servicer, including, without limitation, any claims of predatory lending or any early payment default, buy-back, repurchase or similar requests, notices or claims by third party purchasers that would likely or actually require the Seller to repurchase mortgage loans or pay any amounts to such third party purchaser with respect to any sold mortgage loan; and
(i) Any repurchase requests or demands, indemnification requests, suspension notices or termination notices Seller received, or is reasonably likely to receive, from its secondary market investors, including any Takeout Investors,
b. Officer’s Compliance Certificate. Seller will furnish to Buyer, at the time the Seller furnishes each set of financial statements pursuant to Sections 16(a)(1) or (2) above, a certificate of a Responsible Officer of Seller in the form of Exhibit A hereto, along with all schedules required by Buyer. If elected in the Guaranty Addendum with respect to the Guarantor, Guarantor will furnish to Buyer, at the time the Guarantor furnishes each set of financial statements pursuant to Sections 16(a)(1) or (2) above, a certificate of a Responsible Officer of Guarantor in the form attached to the Guaranty.
c. Mortgage Loan Reports. At the request of Buyer, Seller will furnish to Buyer monthly electronic Mortgage Loan performance data, including, without limitation, delinquency reports (i.e., delinquency, foreclosure and net charge-off reports).
d. Asset Tape. On a monthly basis or within two (2) Business Days following a request from Buyer, Seller shall provide to Buyer or Custodian, electronically, in a format mutually acceptable to Buyer and Seller, an Asset Tape.
e. Other. Sellers and Guarantor shall deliver to Buyer any other reports or information reasonably requested by Buyer or as otherwise required pursuant to this Agreement.
17. Buyer’s Policies and Procedures Manual
Seller shall comply with Buyer’s manual of procedures and policies, including, without limitation, any Mortgage Banker Finance Group guidelines (and any updates related thereto) (collectively, the “Manual”), as such Manual may be updated from time to time by Buyer in its sole discretion.
18. Repurchase Transactions
Buyer may, in its sole election, engage in repurchase transactions with the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or otherwise convey the Purchased Assets with a counterparty of Buyer’s choice. Upon receipt of the Repurchase Price and all fees and expenses related to any Purchased Asset, Buyer is obliged to transfer Purchased Assets to Seller pursuant to Section 4 hereof and credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Section 7 hereof; provided, that in each instance an Event of Default shall not have occurred. In the event Buyer engages in a repurchase transaction with any of the Purchased Assets or otherwise pledges or hypothecates any of the Purchased Assets, Buyer shall have the right to assign to Buyer’s counterparty any of the applicable representations or warranties herein and the remedies for breach thereof, as they relate to the Purchased Assets that are subject to such repurchase transaction.
19. Custodial Responsibilities
a. On the Purchase Date, or Delivery Date if different from the Purchase Date, the Seller shall deliver to the Custodian the Mortgage File, together with a Transmittal Letter upon which the Custodian shall be entitled to rely conclusively until expressly notified to the contrary in writing by the Buyer. The Mortgage Loan Schedule, relating to all of the Purchased Mortgage Loans delivered to the Custodian on the related Purchase Date (or the related Delivery Date), shall be delivered electronically to the Custodian by Buyer on such Purchase Date or Delivery Date, as applicable, in accordance with the terms of the Manual.
b. From time to time Seller may request Shipment Orders from the Buyer. Once Buyer has indicated that the Custodian has received all the Mortgage Loan Documents from the Seller, Buyer shall electronically transmit any Shipment Orders to the Custodian and the Custodian shall deliver the specified Collateral Documents or reports in its possession to the Takeout Investor (or its custodian) in the manner directed in the Custodial Agreement and such Shipment Order. The Seller is responsible for determining whether all Mortgage Loan Documents are on the current forms required by the Takeout Investor, in compliance with any related Takeout Commitment, or otherwise sufficient for the Takeout Investor. Neither the Buyer nor the Custodian shall have any obligation to prepare, assemble, correct or sign any documents included in the Shipment Order.
c. In the event that the Custodian delivers any Collateral Documents to the Seller upon the written authorization of the Buyer and pursuant to the Seller’s delivery to the Custodian of an executed request for the release of such Collateral Documents pursuant to the terms of the Custodial Agreement, the Seller shall be solely responsible for the safe, prompt return of such Collateral Documents in the timeframe specified in the release request (or other similar document) upon making any correction deemed necessary by Buyer or the Seller.
d. In the event that the Custodian pays for the shipment of the package of Collateral Documents, Seller will reimburse Custodian for all actual shipment costs related to such Seller upon receipt of an invoice; provided, that in any event Buyer shall not be held responsible or liable for recovery of shipment costs incurred pursuant to this Section 19.
20. Single Agreement
Buyer and Seller acknowledge that, and have entered hereunto, 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, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set-off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.
21. Notices and Other Communications
Any notices (with the exception of Transaction Requests or Purchase Confirmations, which shall be delivered in the manner set forth in the Manual), statements, demands or other communications hereunder may be given by a party to the other by electronic mail, facsimile, messenger or otherwise to the Seller and Buyer’s addresses specified on the Addendum, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. Notice provided by electronic mail or facsimile shall be deemed to be given upon transmission provided that an electronic notice of non-transmission is not received. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence.
22. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
23. Non-assignability
The Program Agreements are not assignable by any Seller or Guarantor, as applicable. Buyer may from time to time assign all or a portion of its rights and obligations under this Agreement and the Program Agreements; provided, however, that Buyer shall maintain as agent of Seller, for review by Seller upon written request, a register of assignees and a copy of an executed assignment and acceptance by Buyer and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. Upon such assignment, (a) such assignee shall be a party hereto and to each Program Agreement to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Buyer hereunder, and (b) Buyer shall be
released from its obligations hereunder and under the Program Agreements to the extent of the percentage or portion set forth in the Assignment and Acceptance. Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller.
24. Set-off
In addition to any rights and remedies of Buyer provided by law, Buyer shall have the right, without prior notice to Seller or Guarantor, any such notice being expressly waived by Seller or Guarantor to the extent permitted by applicable law, upon any amount becoming due and payable by any Seller or Guarantor hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Buyer, Buyer’s Affiliates (including, without limitation Wells Fargo & Company and its Affiliates) or any branch or agency thereof to or for the credit or the account of Seller or Guarantor under any other agreement. Buyer agrees promptly to notify each Seller and Guarantor after any such set-off and application made by Buyer; provided, that the failure to give such notice shall not affect the validity of such set-off and application. For avoidance of doubt and not as a limitation, Buyer may set-off any amounts in the Seller’s Clearing Account and the Reserve Account.
Buyer shall at any time, unless and until all Obligations under this Agreement have been paid in full, have the right to retain, to suspend payment or performance of, or to decline to remit, any amount or property that Buyer would otherwise be obligated to pay, remit or deliver to Seller or Guarantor hereunder if an Event of Default or Default has occurred.
25. Binding Effect; Governing Law; Jurisdiction
a. This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Seller acknowledges that the obligations of Buyer hereunder or otherwise are not the subject of any guaranty by, or recourse to, any direct or indirect parent or other Affiliate of Buyer. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
b. EACH SELLER AND GUARANTOR HEREBY WAIVE TRIAL BY JURY. SELLER AND GUARANTOR HEREBY IRREVOCABLY CONSENT TO THE 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, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR PROCEEDING. EACH SELLER AND GUARANTOR HEREBY SUBMITS TO, AND
WAIVES ANY OBJECTION THEY MAY HAVE TO, 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 AGREEMENTS.
c. TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, SELLER HEREBY WAIVES ANY RIGHT TO CLAIM OR RECOVER IN ANY LITIGATION WHATSOEVER INVOLVING ANY INDEMNIFIED PARTY, ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER SUCH WAIVED DAMAGES ARE BASED ON STATUTE, CONTRACT, TORT, COMMON LAW OR ANY OTHER LEGAL THEORY, WHETHER THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF ACTION. NO INDEMNIFIED PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS.
d. SELLER ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTION 25 ARE A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT SUCH PARTY HAS ALREADY RELIED ON SUCH WAIVERS IN ENTERING INTO THE PROGRAM AGREEMENTS, AND THAT SUCH PARTY WILL CONTINUE TO RELY ON SUCH WAIVERS IN THEIR RELATED FUTURE DEALINGS UNDER THE PROGRAM AGREEMENTS.
e. THE PROVISIONS OF THIS SECTION 25 SHALL SURVIVE TERMINATION OF THE PROGRAM AGREEMENTS AND THE PAYMENT IN FULL OF THE OBLIGATIONS.
26. No Waivers, Etc.
No express or implied waiver of any Event of Default by Buyer shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Section 6(a), Section 15(a) or otherwise, will not constitute a waiver of any right to do so at a later date.
27. Intent
a. THE PARTIES RECOGNIZE THAT EACH TRANSACTION IS A “REPURCHASE AGREEMENT” AS THAT TERM IS DEFINED IN SECTION 101 OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED, AND A “SECURITIES CONTRACT” AS THAT TERM IS DEFINED IN SECTION 741 OF TITLE 11 OF THE
UNITED STATES CODE, AS AMENDED, AND A “MASTER NETTING AGREEMENT” AS THAT TERM IS DEFINED IN SECTION 101 OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED.
b. IT IS UNDERSTOOD THAT ANY PARTY’S RIGHT TO LIQUIDATE PURCHASED ASSETS DELIVERED TO IT IN CONNECTION WITH TRANSACTIONS HEREUNDER OR TO EXERCISE ANY OTHER REMEDIES PURSUANT TO SECTION 15 HEREOF IS A CONTRACTUAL RIGHT TO LIQUIDATE SUCH TRANSACTION AS DESCRIBED IN SECTIONS 555, 559 AND 561 OF TITLE 11 OF THE UNITED STATES CODE.
28. Power of Attorney
Seller hereby authorizes Buyer to file such financing statement or statements relating to the Purchased Assets without Seller’s signature thereon as Buyer, at its option, may deem appropriate. Seller hereby appoints Buyer as Seller’s attorney-in-fact to execute any such financing statement or statements in Seller’s name and to perform all other acts which Buyer deems appropriate to perfect and continue its ownership interest in and/or the security interest granted hereby, if applicable, and to protect, preserve and realize upon the Purchased Assets, including, but not limited to, the right to endorse notes, complete blanks in documents, transfer servicing, providing “good-bye” letters to the Mortgagor in the form set forth in the Manual, sign assignments on behalf of Seller as its attorney-in-fact, and sell a Purchased Asset “as is where is” in the name and on behalf of Seller. This power of attorney is coupled with an interest and given as security and is irrevocable without Buyer’s consent. At Buyer’s request, Seller shall immediately execute all powers of attorney in favor of Buyer in the form attached hereto as Exhibit C. In addition, Seller shall direct by board resolution attached as part of Exhibit B hereto that, pursuant to its execution and delivery of such a power of attorney, certain personnel of Buyer may take certain actions on behalf of Seller as its attorney-in-fact, with such resolution to survive until all obligations of Seller hereunder are satisfied. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 28.
29. Buyer May Act Through Affiliates
Buyer may, from time to time, designate one or more Affiliates for the purpose of performing any action hereunder.
30. Indemnification; Obligations
a, Each Seller agrees to hold Buyer and each of its respective Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) harmless from and indemnify each Indemnified Party (and will reimburse each Indemnified Party as the same is incurred) against all liabilities, losses, damages, judgments, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) of any kind which may be imposed on, incurred by, or asserted against any Indemnified Party relating to or arising out of this Agreement, any Transaction Request, Interest Rate Protection Agreement, any Program Agreement or any transaction contemplated hereby or thereby resulting from anything other than the Indemnified Party’s gross negligence or willful misconduct. Seller also agrees to reimburse
each Indemnified Party for all reasonable expenses in connection with the enforcement of this Agreement and the exercise of any right or remedy provided for herein, any Transaction Request, Purchase Confirmation and any Program Agreement, including, without limitation, the reasonable fees and disbursements of counsel. Seller’s agreements in this Section 30 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. Each Seller hereby acknowledges that its obligations hereunder are recourse obligations of Seller and are not limited to recoveries each Indemnified Party may have with respect to the Purchased Mortgage Loans. Each Seller also agrees not to assert any claim against Buyer 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 facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. THE INDEMNITY IN THE IMMEDIATELY PRECEDING SENTENCE EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
b. Without limiting the provisions of paragraph (a) of this Section 30, if any Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Buyer, in its discretion. Seller shall reimburse Buyer for any such costs, including, without limitation, per diem interest at the Post Default Rate Margin.
31. 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. Each counterpart delivered by email or facsimile transmission shall be effective as an original.
32. Confidentiality
This Agreement and its terms, provisions, supplements and amendments, and notices hereunder, are proprietary to Buyer and its Affiliates and shall be held by each Seller and Guarantor in strict confidence and shall not be disclosed to any third party without the written consent of Buyer except for (i) disclosure to Seller’s or Guarantor’s direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence, (ii) disclosure required by law, rule, regulation or order of a court or other regulatory body or (iii) disclosure to any potential Takeout Investor but only with respect to the following: (1) the current Repurchase Price, (2) whether or not there are any defaults or terminations of the facility known to Seller, or (3) the Repurchase Date. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreement, the parties hereto may disclose to any Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided, that Seller may not disclose the name of or identifying information with respect to Buyer or an
Affiliate or any pricing terms (including, without limitation, the Pricing Rate, and Purchase Price) or other nonpublic business or financial information (including any sublimits and Financial Covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior written consent of the Buyer.
33. Recording of Communications
Buyer, Seller and Guarantor consent to the tape recordings of communications between its employees and those of the other party with respect to Transactions and such tape recordings of communications may be used in any court, arbitration, or other proceedings to the extent permitted by law.
34. Periodic Due Diligence Review
Each Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Seller and the Mortgage Loans and Agency Securities, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, to review the servicing of the Mortgage Loans, or otherwise, and Seller agrees that upon reasonable (but no less than three (3) Business Days) prior notice unless an Event of Default shall have occurred, in which case no notice is required, to Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Files and any documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession or under the control of Seller and/or the Custodian. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Mortgage Loans from Seller based solely upon the information provided by Seller to Buyer in the Mortgage Loan Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans purchased in a Transaction, including, without limitation, ordering Broker’s price opinions, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan, which such information may be used by Buyer to calculate Market Value. Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller. Seller further agrees that Seller shall pay all out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 34 (“Due Diligence Costs”).
35. Authorizations
Any of the persons whose signatures and titles appear on Schedule 5 of the Addendum are authorized, acting singly, to act for Guarantor, Seller or Buyer, as the case may be, under this Agreement.
36. Documents Mutually Drafted
The Seller and the Buyer agree that this Agreement and each other Program Agreement prepared in connection with the Transactions set forth herein have been mutually negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.
37. Joint and Several
If there are multiple Guarantors or Sellers, such Guarantors, such Sellers and Buyer hereby acknowledge and agree that Sellers and Guarantors, as applicable, are each jointly and severally liable to Buyer for all of their respective obligations hereunder.
38. Security Interest
Although the parties intend that all Transactions hereunder be sales and purchases and not loans, Seller hereby pledges to Buyer as security for performance by Seller of its obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in the Purchased Assets. Seller agrees to execute, deliver and/or file such documents and perform such acts as may be reasonably necessary to fully perfect Buyer’s security interest created hereby. Furthermore, the Seller hereby authorizes the Buyer to file financing statements relating to the Purchased Assets, as the Buyer may deem appropriate. The Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 38.
39. Agency Security Takeout
a. Prior to an Event of Default, from time to time, the Seller, as an approved Issuer of Ginnie Mae Securities, may agree to issue Ginnie Mae Securities backed by certain of the Purchased Mortgage Loans or, as an approved Fannie Mae Seller or Freddie Mac Seller, may agree to sell Purchased Mortgage Loans to Fannie Mae or Freddie Mac, as applicable, in exchange for Fannie Mae Securities or Freddie Mac Securities, as applicable. Buyer will agree to sell the related Purchased Mortgage Loans back to the Seller in satisfaction of the related Repurchase Price and will simultaneously purchase the related Agency Securities (the proceeds from such sale will be used to satisfy the Repurchase Price with respect to the Purchased Mortgage Loans) from the Seller in a new Transaction. The Agency Securities will be delivered to the Federal Book Account of Buyer, at which time they will be considered Purchased Agency Securities hereunder. The Seller shall arrange for the sale of the Purchased Agency Securities to a Takeout Broker Dealer, the proceeds of such sale to be credited to Buyer’s account as further provided herein to satisfy the Repurchase Price with respect to the Purchased Agency Securities.
b. As a condition precedent to Buyer agreeing to accept such Agency Securities as Purchased Agency Securities hereunder, the Seller must comply with all of the following conditions: (i) the Seller shall at all times be (A) a Ginnie Mae Issuer in good standing with the authority to issue securities, (B) a Fannie Mae Seller in good standing with the authority to sell mortgages or (C) a Freddie Mac Seller in good standing with the authority to sell mortgages, as applicable; (ii) the Agency Custodian shall be the same entity that serves as Custodian under the Agreement for so long as the Purchased Assets are subject to the Agreement; (iii) the Agency Custodian and the Seller shall have entered into the Master Agency Custodial Agreement, which shall be in full force and effect at all times; (iv) Seller and the Agency Custodian shall comply with all applicable requirements set forth in the Guide and the Master Agency Custodial Agreement as hereafter amended, modified or superseded and (v) the related Purchased Mortgage Loans must be subject to an Agency Security Purchase Commitment with a Takeout Broker Dealer.
c. The Seller agrees to comply with the following additional protocol with respect to the Buyer’s purchase of Purchased Agency Securities:
(1) The Agency Security Purchase Commitment will not describe specific Purchased Mortgage Loans that will underlie the Purchased Agency Security, but instead shall solely provide for delivery of a Purchased Agency Security.
(2) Seller shall inform Buyer of the Purchased Mortgage Loans that Seller intends to pool in a related Purchased Agency Security. Buyer shall cause the Custodian to make available to the Agency Custodian the Mortgage Files related to such Purchased Mortgage Loans to enable the Agency Custodian to complete the initial certification(s) pursuant to the Guide. Such Mortgage Files shall at all times remain in the custody of the Custodian or the Agency Custodian.
(3) Seller shall designate on (i) the Schedule of Subscribers and Ginnie Mae Guaranty Agreement (HUD-11705) (A) the Buyer exclusively as the Subscriber/Participant, (B) the Buyer exclusively as the Name of the Individual or Organization Authorized to Take Delivery, and (C) the Buyer’s Fed Member Bank Information and no other; (ii) the Fannie Mae Delivery Schedule (Fannie Mae Form 2014) the Buyer’s Depository Institution and Telegraphic Abbreviation, ABA Number and Account Name and Account Number and no other and (iii) the Freddie Mac Delivery Authorization (Freddie Mac Form 939) (A) the Buyer exclusively as the Warehouse Lender and (B) the Buyer’s Security Wire Instructions and no other. Seller shall ensure that the Purchased Agency Securities are delivered to the Buyer’s Federal Book Account free from obligation or repayment. Seller shall cause a copy of the final completed Schedule of Subscribers and Ginnie Mae Guaranty Agreement, Freddie Mac Delivery Authorization and Fannie Mae Delivery Schedule to be delivered to the Buyer upon its request.
(4) The Buyer shall provide an executed copy of the Release of Security Interest to the Ginnie Mae Agency Custodian, in the case of Ginnie Mae, and to Fannie Mae or Freddie Mac, as applicable, in the case of Fannie Mae or Freddie Mac, to be held in escrow with respect to any pool of Purchased Mortgage Loans prior to the issuance of
the related Purchased Agency Securities. Any Purchased Mortgage Loans that are not included in the related Purchased Agency Security shall continue to be Purchased Mortgage Loans under the Agreement and the Release of Security Interest shall not apply to such Purchased Mortgage Loans.
(5) All pool and loan packages relating to Purchased Assets are required to be submitted in electronic form using (i) the GinnieNET system, (ii) MIDANET or the Selling System (Freddie) or (iii) MORNET or Loan Delivery (Fannie), as applicable (such terms as defined in the Guide).
(6) Simultaneously upon the transfer of the Purchased Agency Security to the Buyer, (i) the Seller shall be construed to have transferred the Repurchase Price to the Buyer for the related pooled Purchased Mortgage Loans backing such Purchased Agency Security; (ii) the Seller and Buyer shall have entered into a new Transaction with respect such Purchased Agency Security; (iii) the Buyer shall be construed to have transferred the Purchase Price for the related Purchased Agency Securities to the Seller; and (iv) the Buyer shall be deemed to automatically release the Release of Security Interest from escrow.
(7) Buyer shall deliver the related Purchased Agency Security to the Takeout Broker Dealer, in accordance with the “delivery vs. payment” procedures of Depositary Trust Company (DTC), simultaneously upon payment for such Purchased Agency Security to the Buyer’s Federal Book Account.
40. Physical Possession of Records and Files relating to the Purchased Assets
Buyer shall have the right to obtain physical possession, and to commence an action to obtain physical possession, of all Records and files of Seller relating to the Purchased Assets and all documents relating to the Purchased Assets (including, without limitation, any legal, credit or servicing files with respect to the Purchased Mortgage Loans) which are then or may thereafter come in to the possession of Seller or any third party acting for Seller. Buyer shall be entitled to specific performance of all agreements of Seller contained in this Agreement.
[Signature page to follow]
IN WITNESS WHEREOF, the Seller and the Buyer have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.
WELLS FARGO BANK, N.A., as Buyer | ||
By: | /s/ Kenneth D. Logan | |
Name: Kenneth D. Logan | ||
Title: Managing Director | ||
Date: November 23, 2015 |
Home Point Financial Corporation, as Seller | ||
By: | /s/ William Newman | |
Name: William Newman | ||
Title: Chief Executive Officer and President | ||
Date: November 23, 2015 |
ANNEX A
[See Attached]
ANNEX A
FINANCIAL COVENANTS
Definitions:
Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. Whenever used in this Annex A or the Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
“Adjusted Tangible Net Worth” means, for any Person, Net Worth of such Person plus Subordinated Debt (if approved for purposes of this calculation by Buyer in its sole discretion), minus all intangible assets, goodwill, patents, trade names, trademarks, copyrights, franchises, any organizational expenses, deferred expenses, prepaid expenses, prepaid assets, receivables from shareholders, Affiliates or employees, any other asset as shown as an intangible asset on the balance sheet of such Person on a consolidated basis as determined at a particular date in accordance with GAAP, and any other assets that Buyer deems, at any time, in its reasonable discretion, as intangible assets or overstated assets. For the avoidance of doubt, Buyer may deem, in its reasonable discretion, any asset as intangible or overstated at any time after the delivery of the most recent Officer’s Compliance Certificate. Buyer agrees to use reasonable efforts to notify Seller of assets deemed by Buyer to be intangible or materially overstated.
“Cash Equivalents” means (a) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of [***] or less from the date of acquisition and overnight bank deposits with Buyer or any commercial bank having capital and surplus in excess of [***] plus such deposits in an amount up to the current FDIC-insured limit with any commercial bank having capital and surplus less than or equal to [***] (c) repurchase obligations of Buyer or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than [***] with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-l or the equivalent thereof by S&P or P-l or the equivalent thereof by Moody’s and in either case maturing within [***] after the day of acquisition, (e) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of [***] or less from the date of acquisition backed by standby letters of credit issued by Buyer or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.
“Indebtedness Limit” means [***] or such other amount as specified in the Addendum.
“Liquidity” means the sum of (i) Unrestricted Cash, (ii) Cash Equivalents, (iii) any other assets that Buyer deems, in its reasonable discretion, as liquid, less (iv) net borrower escrow liability on any mortgage loans owned or serviced by the Seller and (v) any other such liabilities or obligations of Seller that Buyer determines, in its reasonable discretion, will result in claims against Seller’s cash within the next sixty (60) days.
“Liquidity Overhead Coverage” means Liquidity divided by Seller’s Total Expenses.
“Maximum Financial Exposure” means the difference between the market value of all hedges and the sum of the market value of all closed loans plus the pipeline of unclosed loans, adjusted for pull through.
“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.
“Net Operating Income” means, with respect to Seller or Guarantor, as applicable, pre-tax net income from continuing operations for the applicable period then being measured, determined in accordance with GAAP, but excluding depreciation, amortization, changes in fair value of mortgage servicing rights, gains and losses associated with hedging transactions in respect of mortgage servicing rights, extraordinary items, cumulative effects of changes in accounting principles and impairment of intangible assets.
“Net Worth” means, with respect to any Person, an amount equal to, on a consolidated basis, such Person’s stockholder equity, or, if applicable, value of membership or partnership interests, or similar calculations (all determined in accordance with GAAP).
“Quick Ratio” means Liquidity divided by the sum of: total net current liabilities minus current outstanding warehouse lines minus borrower escrow liability on any mortgage loans owned or serviced by the Seller.
“S&P” means Standard and Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, which is a part of McGraw Hill Financial, Inc., or any successor thereto.
“Subordinated Debt” means, Indebtedness of Seller which (i) is unsecured, (ii) no part of the principal of such Indebtedness is required to be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior to the date which is one year following the Termination Date, (iii) the payment of the principal of and interest on such Indebtedness and other obligations of Seller in respect of such Indebtedness are subordinated to the prior payment in full of the principal of and interest (including post-petition obligations) on the Transactions and all other obligations and liabilities of Seller to Buyer hereunder, (iv) is not encumbered in any manner, (v) does not impose any duties on the Buyer and (vi) all other terms or conditions are acceptable to Buyer. Buyer must specifically approve any Subordinated Debt for purposes of inclusion in any impacted Financial Covenants.
“Test Period” means any calendar quarter, or as otherwise set forth in the Addendum, following the Effective Date.
“Total Expenses” means a Seller’s total expenses (excluding depreciation, amortization, warehouse line interest, loan officer commissions, broker commissions, tax payments made, extraordinary, non-recurring items, and non-cash adjustments, which include, but are not limited to, changes to capitalized mortgage servicing rights and changes to loan loss reserve) as set forth on the financial statements submitted for the related Reporting Period.
“Unrestricted Cash” means cash that is not controlled by or subject to any lien or other preferential arrangement in favor of any creditor.
Covenants:
Each Seller covenants with Buyer that, at all times during the term of this facility:
a. Indebtedness. No Indebtedness of Seller exists in an aggregate amount in excess of the Indebtedness Limit other than (i) any Indebtedness listed on Schedule 2 of the Addendum, (ii) any Indebtedness set forth on the schedule to the most recent Officer’s Compliance Certificate, (iii) any Indebtedness otherwise disclosed to Buyer in writing within five (5) Business Days following the existence of such Indebtedness and (iv) usual and customary accounts payable for a mortgage and servicing company or any forward or other delayed delivery transaction arrangements involving mortgage backed securities with a Takeout Investor.
b. Maintenance of Profitability. Seller shall not permit, for any Test Period, Net Operating Income for such Test Period, before income taxes for such Test Period and distributions made during such Test Period, to be less than [***].
c. Adjusted Tangible Net Worth Threshold. Seller shall maintain at all times an Adjusted Tangible Net Worth amount equal to or greater than the amount set forth on the Addendum for such term.
d. Indebtedness to Adjusted Tangible Net Worth Ratio. Seller shall maintain at all times a ratio of Indebtedness to Adjusted Tangible Net Worth equal to or less than the amount set forth on the Addendum.
e. Liquidity Threshold. Seller shall maintain at all times a Liquidity amount equal to or greater than the amount set forth on the Addendum for such term.
f. Liquidity Overhead Coverage Ratio. Seller shall maintain at all times a Liquidity Overhead Coverage ratio equal to or greater than the amount set forth on the Addendum.
g. Maximum Financial Exposure. Seller shall maintain at all times a Maximum Financial Exposure amount equal to or less than the amount set forth on the Addendum for such term.
h. Quick Ratio. Seller shall maintain at all times a Quick Ratio in an amount equal to or greater than the amount set forth on the Addendum for such term.
i. Unrestricted Cash Threshold. Seller shall maintain at all times Unrestricted Cash in an amount equal to or greater than the amount set forth on the Addendum for such term.
SCHEDULE 1
REPRESENTATIONS AND
WARRANTIES WITH RESPECT TO
PURCHASED MORTGAGE LOANS
(a) Payments Current. All payments required to be made up to the Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have been made and credited. No payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent 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) days thereof, all in accordance with the terms of the related Mortgage Note.
(b) No Outstanding Charges. All taxes and governmental assessments or other similar charges, levies or assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Neither Seller nor the Qualified Originator from which Seller acquired the Mortgage Loan 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 required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or dale of disbursement of the proceeds of the Mortgage Loan, whichever is earlier, to the day which precedes by one (1) month the Due Date of the first installment of principal and/or interest thereunder.
(c) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage have not been impaired, waited, 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 Mortgage Loan Schedule. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required, and its terms arc reflected on the Mortgage Loan Schedule. 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 File delivered to the Custodian and the terms of which are reflected in the Mortgage Loan Schedule. The related Mortgage and Mortgage Note contain the entire agreement of the parties and all of the obligations of the Seller under the Purchased Mortgage Loan,
(d) 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 or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor in respect of the Mortgage Loan was a debtor in any state or Federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated. 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.
(e) Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of origination consistent with the Guide, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than one hundred percent (100)% of the replacement cost of all improvements to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in accordance with the Guide. 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 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 Seller, its successors and assigns (including, without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ prior written notice to the mortgagee. No such notice has been received by Seller. 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 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. Seller has not engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.
(f) Compliance with Applicable Laws. Any 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 shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, upon demand, evidence of compliance with all such requirements.
(g) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission. Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
(h) Location and Type of Mortgaged Property. The Mortgaged Property is located in an Acceptable State and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit in a low-rise condominium project, or an individual unit in a planned unit development or a de minimis planned unit development; provided, however, that any condominium unit or planned unit development shall conform with the applicable Fannie Mac and Freddie Mac requirements regarding such dwellings or shall conform to underwriting guidelines acceptable to Buyer in its discretion, that a de minimis percentage of the Mortgage Loans may be Cooperative Mortgage Loans and that no residence or dwelling is a (i) a mobile home or manufactured housing unit (other than a Manufactured Home) not secured by real property, (ii) a log home, (iii) an earthen home, (iv) an underground home, (v) any dwelling situated on more than ten (10) acres of property and (vi) any dwelling situated on a leasehold estate. No portion of the Mortgaged Property is used for commercial purposes; provided, that, the Mortgaged Property may be a mixed use property if such Mortgaged Property conforms to underwriting guidelines acceptable to Buyer in its discretion With respect to each Loan that is a Manufactured Home, such unit is a “single family residence” within the meaning of Section 25(e)(1) of the Code, and has a minimum of four hundred (400) square feet of living space, a minimum width of one hundred two (102) inches and is of a kind customarily used at a fixed location. The fair market value of the Manufactured Home securing each contract was at least equal to [***] of the total price of the contract (including land) at either (i) the time the contract was originated (determined pursuant to the REM1C Provisions) or (ii) the time the contract is transferred to the purchaser.
(i) Valid First Lien, The Mortgage is a valid, subsisting, enforceable and perfected first priority lien and first priority security interest on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing and with respect to Cooperative Mortgage Loans, including the Proprietary Lease and the Cooperative Shares. The lien of the Mortgage is subject only to:
a. the lien of current real property taxes and assessments not yet due and payable;
b. covenants, conditions and restrictions, rights of way, easements 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 Buyer’s title insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in
the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal; and
c. 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 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.
(j) Validity of Mortgage Documents. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. Seller has reviewed all of the documents constituting the Mortgage File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. To the best of Seller’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.
(k) Full Disbursement of Proceeds. There is no further requirement for future advances under the Mortgage Loan, and any requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.
(1) Ownership. Seller has full right to sell the Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell each Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, Buyer will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement.
(m) 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 applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state.
(n) 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 Fannie Mae or Freddie Mac and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns, as to the first priority lien of the Mortgage, as applicable, in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (a), (b) and (c) of paragraph (i) of this Schedule 1, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.
(o) No Defaults. There is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration.
(p) No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(q) Location of Improvements; No Encroachments. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.
(r) Payment Terms. Principal and/or interest payments on the Mortgage Loan commenced no more than sixty (60) days after funds were disbursed in connection with the Mortgage Loan. With respect to adjustable rate Mortgage Loans, the Mortgage Interest Rate is adjusted on each Interest Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or down to the nearest .125%), subject to the Mortgage Interest Rate Cap. The Mortgage Note is payable on the first (1st) day of each month in equal monthly installments of principal and/or interest (subject to an “interest only” period in the case of Interest Only Loans), which installments of interest (a) with respect to adjustable rate Mortgage Loans are subject to change on the Interest Rate Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date and (b) with respect to Interest Only Loans are subject to change on the Interest Only Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Only Adjustment Date, in both cases with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty (30) years from commencement of amortization. The Due Date of the first payment under the Mortgage Note is no more than sixty (60) days from the date of the Mortgage Note. The Mortgage Note does not permit Negative Amortization.
(s) 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 foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage. The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Fannie Mae.
(t) Occupancy of the Mortgaged Property. As of the Purchase Date the Mortgaged Property is lawfully permitted to be occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. Seller has not 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. Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. With respect to any Mortgage Loan originated with an “owner-occupied” Mortgaged
Property, 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.
(u) No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (i) above.
(v) 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.
(w) Transfer of Mortgage Loans. Except with respect to Mortgage Loans registered with MERS, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located. With respect to each MOM Mortgage Loan, the related Assignment of Mortgage to MERS has been duly and properly recorded, or has been delivered for recording to the applicable recording office.
(x) Due-On-Sale. The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder.
(y) No Buydown Provisions; No Graduated Payments or Contingent Interests. The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.
(z) Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.
(aa) Mortgaged Property Undamaged. The related Mortgaged Property is free of damage and waste; and there is no proceeding pending for the total or partial condemnation of such Mortgaged Property.
(bb) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The origination and collection practices used by the originator, each servicer of the Mortgage Loan
and Seller with respect to the Mortgage Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper. With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of, Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due Seller have been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.
(cc) Conversion to Fixed Interest Rate. Except as allowed by Fannie Mae or Freddie Mac or otherwise as expressly approved in writing by Buyer, with respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
(dd) Other Insurance Policies. No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, PMI Policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by Seller or by any officer, director, or employee of Seller or any designee of Seller or any corporation in which Seller or any officer, director, or employee had a financial interest at the time of placement of such insurance.
(ee) Servicemembers Civil Relief Act. The Mortgagor has not notified Seller, and Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.
(ff) Appraisal. The Mortgage File with respect to such Mortgage Loan contains an appraisal of the related Mortgaged Property made and signed, prior to the approval of the application for such Mortgage Loan, by a qualified appraiser (a) who, at the time of such appraisal, met the minimum qualifications of Fannie Mae or Freddie Mac and the requirements of the Seller’s appraisal policy and (b) who satisfied (and which appraisal was conducted in accordance with) all of the applicable requirements of the Uniform Standards of Professional Appraisal Practice and all applicable federal and state laws and regulations in effect at the time of such appraisal and procedures. Such appraiser was licensed in the state where the Mortgaged Property is located, had no interest, direct or indirect, in such Mortgaged Property or in any loan made on the security thereof, and such appraiser’s compensation was not affected by the approval or disapproval of such Mortgage Loan. The appraisal shall have been made within one hundred eighty (180) days of the origination of the Mortgage Loan. If the appraisal was made more than one hundred twenty (120) days before the origination of the Mortgage Loan, Seller shall have received and included in the servicing file a recertification of the appraisal.
(gg) Disclosure Materials. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and Seller maintains such statement in the Mortgage File.
(hh) Construction or Rehabilitation of Mortgaged Property. No Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property.
(ii) No Defense to Insurance Coverage. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.
(jj) Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.
(kk) No Equity Participation. No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and Seller has not financed nor does Seller own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
(ll) 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 or any Affiliate or correspondent of Seller, except in connection with a refinanced Mortgage Loan.
(mm) Origination Date. The origination date of a Mortgage Loan is no earlier than [***] prior to the related Purchase Date.
(nn) No Exception. The Custodian has not noted any material exceptions on a Mortgage Loan Schedule with respect to the Mortgage Loan which would materially adversely affect the Mortgage Loan or Buyer’s interest in the Mortgage Loan.
(oo) 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.
(pp) Documents Genuine. Such Purchased Mortgage Loan and all accompanying Collateral Documents are complete and authentic and all signatures thereon are genuine.
(qq) Bona Fide Loan. Such Purchased 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.
(rr) Other Encumbrances. Any property subject to any security interest given in connection with such Purchased Mortgage Loan is not subject to any other encumbrances other than a stated first mortgage, if applicable, and encumbrances which may be allowed under the Guide.
(ss) Description. Each Purchased Mortgage Loan conforms to the description thereof as set forth on the related Mortgage Loan Schedule delivered to the Custodian and Buyer.
(tt) Underwriting Guidelines. Each Purchased Mortgage Loan has been originated in accordance with the Underwriting Guidelines (including all supplements or amendments thereto) in effect as of the date the Transaction is entered into and as previously provided to Buyer.
(uu) Primary Mortgage Guaranty Insurance. After the funding of the Purchased Mortgage Loan and payment of any premium thereafter, each Mortgage Loan is insured as to payment defaults by a policy of primary mortgage guaranty insurance in the amount required where applicable, and by an insurer approved, by the applicable Takeout Investor, if applicable, and all provisions of such primary mortgage guaranty insurance have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. Each Mortgage Loan which is represented to Buyer to have, or to be eligible for, FHA insurance is insured, or eligible to be insured, pursuant to the National Housing Act. Each Mortgage Loan which is represented by Seller to be guaranteed, or to be eligible for guaranty, by the VA is guaranteed, or eligible to be guaranteed, under the provisions of Chapter 37 of Title 38 of the United States Code. As to each FHA insurance certificate or each VA guaranty certificate, Seller has complied with applicable provisions of the insurance for guaranty contract and federal statutes and regulations, all premiums or other charges due in connection with such insurance or guarantee have been paid, there has been no act or omission which would or may invalidate any such insurance or guaranty, and the insurance or guaranty is, or when issued, will be, in full force and effect with respect to each Mortgage Loan. There are no defenses, counterclaims, or rights of setoff affecting the Mortgage Loans or affecting the validity or enforceability of any private mortgage insurance or FHA insurance applicable to the Mortgage Loans or any VA guaranty with respect to the Mortgage Loans.
(vv) Predatory Lending Regulations; High Cost Loans. None of the Mortgage Loans are classified as High Cost Mortgage Loans.
(ww) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Authorized Funds Recipient has been instructed in writing by Seller to (a) hold the related Mortgage Loan Documents as agent and bailee for Buyer and to promptly
forward such Mortgage Loan Documents in accordance with the provisions of the Custodial Agreement and the Closing Instruction Letter and (b) return Buyer’s payment in the event that the Mortgage Loan does not close within twenty-four (24) hours of receipt of Buyer’s funds.
(xx) FHA Mortgage Insurance; VA Loan Guaranty. With respect to the FHA Loans, the FHA Mortgage Insurance Contract is in full force and effect or all required documentation has been successfully submitted to the appropriate insuring agency within fifteen (15) days of the date of a Transaction. There has been no notice, indication of ineligibility or rejection of the loan and there exists no impairment to full recovery without indemnity to the Department of Housing and Urban Development or the FHA under FHA Mortgage Insurance. With respect to the VA Loans, after the funding of the Purchased Mortgage Loan and payment of any premium thereafter, the VA Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein or all required documentation has been successfully submitted to the appropriate agency within fifteen (15) days of the date of a Transaction. All necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the FHA and the VA, respectively, to the full extent thereof, without surcharge, set-off or defense. Each FHA Loan and VA Loan was originated in accordance with the criteria of an acceptable Takeout Investor approved by Buyer.
(yy) Cooperative Mortgage Loans. With respect to each Cooperative Mortgage Loan, (i) the term of the related Proprietary Lease is longer than the term of the Cooperative Mortgage Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Cooperative Shares owned by such Mortgagor first to the Cooperative Corporation, (iii) there is no prohibition in any Proprietary Lease against pledging the Cooperative Shares or assigning the Proprietary Lease and (iv) the recognition agreement is on a form of agreement published by the Aztech Document Systems, Inc. or includes provisions which are no less favorable to the lender than those contained in such agreement.
(zz) Cooperative Filings. With respect to each Cooperative Mortgage Loan, each original UCC financing statement, continuation statement or other governmental filing or recordation necessary to create or preserve the perfection and priority of the first priority lien and security interest in the Cooperative Shares and Proprietary Lease has been timely and properly made. Any security agreement, chattel mortgage or equivalent document related to the Cooperative Mortgage Loan and delivered to Seller or its designee establishes in Seller a valid and subsisting perfected first lien on and security interest in the Mortgaged Property described therein, and Seller has full right to sell and assign the same.
(aaa) Cooperative Assignment. With respect to each Cooperative Mortgage Loan, each acceptance of assignment and assumption of lease agreement contains enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization of the benefits of the security provided thereby. The acceptance of assignment and assumption of lease agreement contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Note in the event the Cooperative Unit is transferred or sold without the consent of the holder thereof.
(bbb) LTV; CLTV. The LTV and CLTV, as applicable, of any Purchased Mortgage Loan at origination was in accordance with the applicable Guide, unless otherwise
specified in the Manual, or if such percentage is not set forth in the Manual, then the percentage set forth in the Addendum.
(ccc) No Adverse Selection. Such Mortgage Loan was not intentionally selected by the Seller in a manner intended to adversely affect the interest of the Buyer. The Seller used no selection procedures that identified such Mortgage Loan as being less desirable or valuable than other comparable Mortgage Loans originated by the Seller. Such Mortgage Loans, collectively with the other Mortgage Loans included on such Mortgage Loan Schedule, is representative of the Seller’s portfolio of Mortgage Loans.
(ddd) Single Original Mortgage Note. There is only one originally executed Mortgage Note; provided, however, that if there is more than one signed note, then each page of such additional note will have “Duplicate,” “Copy” or similar language clearly stamped on it.
(eee) Acceptable Investment. The Mortgagor is not in bankruptcy or insolvent and Seller has no knowledge of any circumstances or conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become a Sub-Performing Mortgage Loan, or adversely affect the value or marketability of the Mortgage Loan.
(fff) Environmental Matters. The Mortgaged Property is free from any toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation. There is no pending action or proceeding directly involving any Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation existing as a prerequisite to use and enjoyment of said property.
(ggg) Regarding the Mortgagor. The Mortgagor is one or more natural persons or a trustee under a “living trust” and such “living trust” is in compliance with the applicable Takeout Investor guidelines for such trusts.
(hhh) Insurance. Seller has caused or will cause to be performed any acts required to preserve the rights and remedies of Buyer in any insurance policies applicable to the Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of coinsured, joint loss payee and mortgagee rights in favor of Buyer.
(iii) Simple Interest Mortgage Loans. None of the Mortgage Loans are simple interest Mortgage Loans.
(jjj) Prepayment Fee. 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 will be enforced by Seller for the benefit of Buyer, and is only payable during the first three (3) years of the term of the Mortgage Loan. The Mortgagor received a benefit in exchange for accepting such prepayment fee.
(kkk) Flood Certification Contract. Seller shall have obtained a life of loan, transferable flood certification contract for each Mortgage Loan and shall assign all such contracts to Buyer.
(lll) Endorsements. Each Mortgage Note has been endorsed by a duly authorized officer of Seller for its own account and not as a fiduciary, trustee, trustor or beneficiary under a trust agreement.
(mmm) Accuracy of Information. All information provided to Buyer by Seller with respect to the Mortgage Loans is accurate in all material respects.
(nnn) Single Premium Credit Insurance. No Mortgagor is offered or required to purchase single premium credit insurance in connection with the origination of the related Mortgage Loan.
(ooo) MIP Insurance. With respect to each Mortgage Loan to be insured by HUD or the VA, after the funding of the Purchased Mortgage Loan and payment of any premium thereafter, all insurance premiums (“MIP”) payable to HUD or the VA, as applicable, in connection with such Mortgage Loan were paid within the timeframe required by such agency to avoid the imposition of any late fees or penalty fees.
(ppp) MIP Insurance Certificate. With respect to each Mortgage Loan to be insured by HUD or the VA, after the funding of the Purchased Mortgage Loan and payment of any premium thereafter, Seller has received the related insurance certificate from the applicable agency evidencing such insurance within sixty (60) days of the origination date of such Mortgage Loan.
(qqq) MIP Documents. With respect to each Mortgage Loan to be insured by HUD or the VA, after the funding of the Purchased Mortgage Loan and payment of any premium thereafter, Seller has submitted all documents required by the applicable agency to insure such Mortgage Loan (regardless of whether such documents are required to be contained in the related servicing file) within thirty (30) days of the origination date of such Mortgage Loan.
(rrr) MIP Access. With respect to each Mortgage Loan to be insured by HUD or the VA, after the funding of the Purchased Mortgage Loan and payment of any premium thereafter, Seller has provided access to Buyer to the lender number, password or any other information that may be required by the applicable agency or otherwise for Buyer to verify that the related MIP payments have been made.
(sss) Patriot Act. The Seller has complied with all applicable anti money laundering laws and regulations, including, without limitation, the Patriot Act. No Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the “Executive Order”) or the regulations promulgated by OFAC (the “OFAC Regulations”) or in violation of the Executive Order or the OFAC Regulations, and no Mortgagor is subject to the provisions of such Executive Order or the OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC Regulations.
(ttt) MERS Designated Mortgage Loans. With respect to each MERS Designated Mortgage Loans, a mortgage identification number has been assigned by MERS and such mortgage identification number is accurately provided on the Mortgage Loan Schedule. The related Assignment of Mortgage to MERS has been duly and properly recorded. With respect to each MERS Mortgage Loan, no Mortgagor 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.
(uuu) MOM Mortgage Loans. With respect to each MOM Loan, the 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.
(vvv) Fully Funded. Such Purchased Mortgage Loan is a “closed” loan. Each Purchased Mortgage Loan is fully funded.
(www) Authorized Funds Recipient. Any related settlement or closing agent has fully disbursed all proceeds received from the Buyer in accordance with the related HUD-1 form.
(xxx) Qualified Mortgage. Notwithstanding anything to the contrary set forth in the Agreement, on and after January 10, 2014 (or such later date as the relevant regulations may go into effect) (i) before the consummation of each mortgage loan, the originator made a reasonable and good faith determination that the borrower has a reasonable ability to repay the loan according to its terms, and that at a minimum, the originator underwrote the loan in accordance with 12 CFR 1026.43(c) as may be amended from time to time; and (ii) such mortgage loan is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e) as may be amended from time to time.
(yyy) No Interest Only Loans. Notwithstanding anything to the contrary set forth in the Agreement, on and after January 10, 2014, no Purchased Mortgage Loan is an Interest Only Loan.
EXHIBIT A
OFFICER’S COMPLIANCE CERTIFICATE
I, ___________________ , do hereby certify that I am the duly elected, qualified and authorized _____________________ of Home Point Financial Corporation (“Seller”). This Certificate is delivered to you in connection with Section 16(b) of the Master Repurchase Agreement and Securities Contract and Addendum, both dated as of November 23, 2015, each such document being among the Seller and Wells Fargo Bank, NA. (“Buyer”) (together, as amended from time to time, the “Agreement”). I hereby certify that, as of the date of the financial statements attached hereto and as of the date hereof, Seller is and has been in compliance with all the terms of the Agreement except as otherwise noted in a schedule attached hereto1 and, without limiting the generality of the foregoing, I certify that:
Litigation, Investigations, Proceedings. Seller has promptly, and in any event within [***] after service of process on any of the following, given to Buyer notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries or affecting any of the Property of any of them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Program Agreements or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim individually in an amount greater than the Individual Claim Threshold or in an aggregate amount greater than the Aggregate Claim Threshold, or (iii) which, individually or in the aggregate, if adversely determined, could be reasonably likely to have a Material Adverse Effect. Seller will promptly provide notice of any judgment, which with the passage of time, could cause an Event of Default hereunder.
Financial Covenants. Seller has complied with all the Financial Covenants.
Insurance. Seller has maintained, for Seller and its Subsidiaries, with responsible companies, at its own expense, the Required Insurance Policy, in each case, in a form acceptable to Buyer, with broad coverage on all officers, employees or other persons (if applicable, including, without limitation, employees or other person of the Manager or the General Partner who act on behalf of Seller in handling funds, money, documents or papers relating to the Purchased Assets) (“Seller Employees”) acting in any capacity requiring such persons to handle funds, money, documents or papers relating to the Purchased Assets, with respect to any claims made in connection with all or any portion of the Purchased Assets. Any such Required Insurance Policy shall protect and insure the Seller against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such Seller Employees, and such policies also shall protect and insure the Seller against losses in connection with the release or satisfaction of a Purchased Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. The minimum coverage under any such Required Insurance Policy shall be at least equal to the Required Insurance Amount as set forth on the Addendum.
1 Buyer’s acceptance of this schedule is not, and shall not be construed as, a waiver by Buyer of any of the items identified on the schedule, including items that may be, or with the passage of time may become, an Event of Default. Buyer, in its sole and absolute discretion, will elect whether to provide any such waiver and will do so by a separate writing.
Seller has named Buyer as a loss payee under any applicable Fidelity Insurance Policy and as a direct loss payee with right of action under any applicable Errors and Omissions Insurance Policy or Professional Liability Insurance Policy.
Financial Statements. The financial statements and schedules attached hereto fairly present in all material respects the financial condition and results of operations of Seller and Guarantor, if applicable, in accordance with GAAP, consistently applied, as of the date(s) thereof.
Documentation. Seller has performed the documentation procedures required by its operational guidelines with respect to endorsements and assignments, including the recordation of assignments, or has verified that such documentation procedures have been performed by a prior holder of such Purchased Mortgage Loan.
Compliance, Seller has observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition, contained in the Agreement and the other Program Agreements to be observed, performed and satisfied by it. If a covenant or other agreement or condition has not been complied with, Seller shall describe such lack of compliance and provide the date of any related waiver thereof.
Regulatory Action. Seller is not currently under investigation and no investigation by any federal, state or local government agency is threatened. Seller has not been the subject of any government investigation which has resulted in the voluntary or involuntary suspension of a license, a cease and desist order, or such other action as could adversely impact Seller’s business. If so, Seller shall describe the situation in reasonable detail and describe the action that Seller has taken or proposes to take in connection therewith.
No Default. No Default or Event of Default has occurred or is continuing.
Indebtedness. All Indebtedness (other than Indebtedness evidenced by the Agreement) of Seller existing on the date hereof is listed on the schedules attached hereto.
Hedging. An accurate and true summary of all Interest Rate Protection Agreements entered into or maintained by Seller during the most recent calendar month end and all preceding months has been provided to Buyer (unless Buyer gives notice to Seller that such summary is not required); and any documentation related to such Interest Rate Protection Agreements as required by the Manual and such other documents requested by Buyer has been provided to Buyer.
Distributions. Seller has not pay any dividends with respect to any capital stock or other equity interests in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller, if an Event of Default has occurred and is continuing, or the payment of a distribution would cause, or would be likely to cause, a violation of a Financial Covenant herein.
Notifications. Seller has notified Buyer of any repurchase requests or demands, indemnification requests, suspension notices or termination notices it received, or is reasonably likely to receive, from its secondary market investors, including any Takeout Investors.
Other Notices. Seller has notified Buyer of any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect with respect to Seller or Servicer, including, without limitation, any claims of predatory lending or any early payment default, buy-back, repurchase or similar requests.
IN WITNESS WHEREOF, I have set my hand this ______ day of_________ ,________ .
By: | ||||
Name: | ||||
Title: |
EXHIBIT B
CERTIFICATE OF AN OFFICER OF THE SELLER
The undersigned, Chief Risk Officer/Assistant Secretary of Home Point Financial Corporation, a New Jersey corporation (the “Seller”), hereby certifies as follows:
1. Attached here as Exhibit A is a copy of the Certificate of Incorporation of the Seller, as certified by the Secretary of State of the State of New Jersey.
2. Neither any amendment to the Certificate of Incorporation of the Seller nor any other charter document with respect to the Seller has been filed, recorded or executed since March 31, 2015, and no authorization for the filing, recording or execution of any such amendment or other charter document is outstanding.
3. Attached hereto as Exhibit B is a true, correct and complete copy of the Amended and Restated Bylaws of the Seller as in effect as of the date hereof and at all times since March 31, 2015.
4. Attached hereto as Exhibit C is a true, correct and complete copy of resolutions adopted by the Board of Directors of the Seller by unanimous written consent on November 23, 2015 (the “Resolutions”). The Resolutions have not been further amended, modified or rescinded and are in full force and effect in the form adopted, and they are the only resolutions adopted by the Board of Directors of the Seller relating to the execution and delivery of, and performance of the transactions contemplated by the Master Repurchase Agreement and Securities Contract and Addendum (the “Repurchase Agreement”), each dated as of November 23, 2015 and between the Seller and Wells Fargo Bank, N.A. (the “Buyer”).
5. Attached hereto as Exhibit D is a copy of a Certificate of Good Standing of Seller, as certified by the Secretary of State of the State of New Jersey.
6. The Repurchase Agreement is substantially in the form approved by the Resolutions or pursuant to authority duly granted by the Resolutions.
7. The undersigned, as officers of the Seller or as attorney-in-fact, are authorized to and have signed manually the Repurchase Agreement or any other document delivered in connection with the transactions contemplated thereby, were duly elected or appointed, were qualified and acting as such officer or attorney-in-fact at the respective times of the signing and delivery thereof, and were duly authorized to sign such document on behalf of the Seller and the signature of each such person appearing on any such documents is the genuine signature of each such person.
Name | Title | Signature | ||
William Newman | Chief Executive Officer and President |
[***] |
||
Maria Fregosi | Chief Strategy Officer | [***] | ||
Mike Jones | Head of Finance | [***] | ||
Douglas McClary | Senior Director, Capital Markets | [***] | ||
William Fischer | Managing Director – Controller/Chief Accounting Officer | [***] |
IN WITNESS WHEREOF, the undersigned has hereunto executed this Certificate as of the 23rd day of November, 2015.
HOME POINT FINANCIAL
CORPORATION, as Seller |
||
By: | /s/ Robert Spellman | |
Name: Robert Spellman | ||
Title: Assistant Secretary/Chief Risk Officer |
EXHIBIT B
CERTIFICATE OF AN OFFICER OF THE SELLER (CONTINUED)
Exhibit C to Officer's Certificate of the Seller
WRITTEN CONSENT IN LIEU OF A MEETING
OF THE BOARD OF DIRECTORS OF Home Point Financial Corporation
The undersigned, being all of the members of the Board of Directors of Home Point Financial Corporation, a New Jersey corporation (the “Seller”), do hereby consent to the adoption of the following resolutions taking or authorizing the actions specified therein:
WHEREAS, it is in the best interests of the Seller to transfer from time to time to Wells Fargo Bank, N.A. (the “Buyer”) certain mortgage loans in exchange for the transfer of funds by Buyer to Seller, with a simultaneous agreement by Buyer to transfer to Seller such mortgage loans at a date certain or on demand, in exchange for the transfer of funds by Seller pursuant to the terms of the Repurchase Agreement (as defined below).
NOW, THEREFORE, be it
RESOLVED, that the execution, delivery and performance by the Seller of the Master Repurchase Agreement and Securities Contract and Addendum (the “Repurchase Agreement”) to be entered into by the Seller and Buyer, substantially in the form of the drafts each dated November 23, 2015, and attached hereto as Exhibit A, are hereby authorized and approved and that the Chief Executive Officer and President, the Head of Finance, the Chief Strategy Officer, the Senior Director - Capital Markets or the Managing Director - Controller/Chief Accounting Officer (collectively, the “Authorized Officers”) of the Seller be and each of them hereby is authorized and directed to execute and deliver the Repurchase Agreement to the Buyer with such changes as the officer executing the same shall approve, his execution and delivery thereof to be conclusive evidence of such approval;
RESOLVED, that the execution, delivery and performance by the Seller of the Electronic Tracking Agreement (the “Tracking Agreement”) to be entered into by the Seller, the Buyer, Mortgage Electronic Registration Systems, Inc. and MERSCORP Holdings, Inc. substantially in the form of the draft, attached hereto as Exhibit B, are hereby authorized and approved and that the Authorized Officers of the Seller be and each of them hereby is authorized and directed to execute and deliver the Tracking Agreement to the Buyer, Mortgage Electronic Registration Systems, Inc. and MERSCORP Holdings, Inc. with such changes as the officer executing the same shall approve, his execution and delivery thereof to be conclusive evidence of such approval;
RESOLVED, that the execution and delivery by the Seller of one or more copies of a Power of Attorney (“Power of Attorney”) authorizing certain personnel of Buyer and its affiliates to take certain actions, as set forth substantially in the form attached to the Repurchase Agreement and irrevocable except with the consent of Buyer, are hereby authorized and approved and that the Authorized Officers of the Seller be and each of them hereby is authorized and directed to execute and deliver the Power of Attorney to the Buyer immediately upon any
request of Buyer for so long as any obligations of the Seller under the Repurchase Agreement remain unsatisfied, with such changes as the officer executing the same shall approve, his execution and delivery thereof to be conclusive evidence of such approval, and the termination of this resolution requiring the consent of the Buyer;
RESOLVED, that the Authorized Officers hereby are, and each hereby is, authorized to execute and deliver all such aforementioned agreements on behalf of the Seller and to do or cause to be done, in the name and on behalf of the Seller, any and all such acts and things, and to execute, deliver and file in the name and on behalf of the Seller, any and all such agreements, applications, certificates, instructions, receipts and other documents and instruments, as such Authorized Officer may deem necessary, advisable or appropriate in order to carry out the purposes of the foregoing resolutions;
RESOLVED, that all actions taken by any of the Authorized Officers before the date of this consent for the purpose of effecting any of the actions authorized by this consent be, and they hereby are, approved and ratified in all respects;
RESOLVED, that the proper officers, agents and counsel of the Seller are, and each of such officers, agents and counsel is, hereby authorized for and in the name and on behalf of the Seller to take all such further actions and to execute and deliver all such other agreements, instruments and documents, and to make all governmental filings, in the name and on behalf of the Seller and such officers are authorized to pay such fees, taxes and expenses, as advisable in order to fully carry out the intent and accomplish the purposes of the resolutions heretofore adopted hereby,
Dated as of: November 23, 2015 | ||||
Name | Title | Signature | ||
William Newman | Director | [***] | ||
Eric Rosenzweig | Director | [***] | ||
Stephen Levey | Director | [***] | ||
Agha Khan | Director | [***] |
request of Buyer for so long as any obligations of the Seller under the Repurchase Agreement remain unsatisfied, with such changes as the officer executing the same shall approve, his execution and delivery thereof to be conclusive evidence of such approval, and the termination of this resolution requiring the consent of the Buyer;
RESOLVED, that the Authorized Officers hereby are, and each hereby is, authorized to execute and deliver all such aforementioned agreements on behalf of the Seller and to do or cause to be done, in the name and on behalf of the Seller, any and all such acts and things, and to execute, deliver and file in the name and on behalf of the Seller, any and all such agreements, applications, certificates, instructions, receipts and other documents and instruments, as such Authorized Officer may deem necessary, advisable or appropriate in order to carry out the purposes of the foregoing resolutions;
RESOLVED, that all actions taken by any of the Authorized Officers before the date of this consent for the purpose of effecting any of the actions authorized by this consent be, and they hereby are, approved and ratified in all respects;
RESOLVED, that the proper officers, agents and counsel of the Seller are, and each of such officers, agents and counsel is, hereby authorized for and in the name and on behalf of the Seller to take all such further actions and to execute and deliver all such other agreements, instruments and documents, and to make all governmental filings, in the name and on behalf of the Seller and such officers are authorized to pay such fees, taxes and expenses, as advisable in order to fully carry out the intent and accomplish the purposes of the resolutions heretofore adopted hereby.
Dated as of: November 23, 2015
Name | Title | Signature | ||
Director | [***] | |||
Director | ||||
Director |
EXHIBIT C
FORM OF POWER OF ATTORNEY
Wells Fargo Bank, N.A.
c/o Wells Fargo Securities
Mortgage Banker Finance Group
2500 Northwinds Parkway, Suite 200
Alpharetta, Georgia 30009
Attention: [***]
Telephone: [***]
Re: | Master Repurchase Agreement and Securities Contract and Addendum, each dated as of November 23, 2015 (as amended from time to time, the “Agreement”) and among Home Point Financial Corporation (the “Seller”) and Wells Fargo Bank, N.A. (the “Buyer”) |
Ladies and Gentlemen:
KNOW ALL MEN BY THESE PRESENTS, that Seller hereby irrevocably constitutes and appoints the Buyer and any officer or director of the Buyer or Wells Fargo Securities, with full power of substitution, as its true and lawful attorney-in-fact with full 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 the Buyer's discretion, to: (1) execute, witness, attest and deliver, on behalf of the Seller, (a) all mortgage documents reasonably necessary or appropriate to properly effect the transfer of the Mortgage Loans from the Seller to Buyer, (b) all release or satisfaction documents reasonably necessary or appropriate to properly effect the release or satisfaction of mortgages, deeds of trust or other similar security instruments with respect to the Mortgage Loans, and (c) all documents reasonably necessary to correct or otherwise remedy any errors or deficiencies contained in any documents contemplated by part (a) above; (2) take any action to carry out the transfer of servicing with respect to the Mortgage Loans from Seller to a successor servicer appointed by the Buyer in its discretion, in the name of Seller or its own name, or otherwise, and prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Mortgage Loans, transferring the servicing of the Mortgage Loans to a successor servicer appointed by the Buyer in its discretion, and (3) preserve any rights of the Buyer under the Agreement and any other agreement related to the transactions contemplated thereby, and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such reservation of rights.
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.
Any capitalized term used but not defined herein shall have the meaning assigned to such term in the Agreement.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY
OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SELLER ON ITS OWN BEHALF AND ON BEHALF OF SELLER'S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and Seller's seal to be affixed this 23rd day of November, 2015.
Home Point Financial Corporation | ||
By: | /s/ William Newman | |
Name: William Newman | ||
Title: Chief Executive Officer and President |
STATE OF [Michigan] | ) | |
) | ss.: | |
COUNTY OF [Washtenaw] | ) |
On the 23rd day of November, 2015 before me, a Notary Public in and for said State, personally appeared William Newman, known to me to be Chief Executive Officer and President of Home Point Financial Corporation, the institution that executed the within instrument and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.
[***]
|
|
Notary Public of Michigan | |
Macomb County | |
Expires [***]
|
|
Acting in the County of Washtenaw |
[***]
Notary Public |
My Commission expires | 3/23/2019 |
EXHIBIT E
CERTIFICATE OF INCUMBENCY OF OFFICERS AND OF
AUTORIZED PERSONS OF SELLER
I, Robert Spellman, Assistant Secretary/Chief Risk Officer, Secretary of Home Point Financial Corporation, a New Jersey corporation (hereinafter called the “Company”), do hereby certify that the below-named individuals have been duly elected and qualified as, and are this day, officers of the Company holding the respective offices set forth opposite their names and the signatures below set opposite their names are their genuine signatures:
Name | Title | Signature | ||
William Newman | Chief Executive Officer and President | [***] | ||
William Fischer | Managing Director - Controller/Chief Accounting Officer | [***] | ||
Maria Fregosi | Chief Strategy Officer | [***] | ||
Mike Jones | Head of Finance | [***] | ||
Douglas McClary | Senior Director - Capital Markets | [***] |
I DO FURTHER CERTIFY that as Assistant Secretary / Chief Risk Officer of the Company, I am hereby authorized and from time to time directed to execute a certificate of incumbency and obtain specimen signatures of persons holding the offices referred to in the Corporate Resolutions, and of the officers or persons named in the Corporate Resolutions, and to file such certified copy, and such certificate or certificates, and specimen signatures.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Company this 23rd day of November, 2015.
Robert Spellman | |
Assistant Secretary/Chief Risk Officer |
ELECTRONIC TRACKING AGREEMENT
WELLS FARGO BANK, N.A. – MORTGAGE BANKER FINANCE GROUP: 1006404
Home Point Financial: 1006611
THIS ELECTRONIC TRACKING AGREEMENT dated as of [____], 20[__] (this “Agreement”) among WELLS FARGO BANK, N.A. (“Buyer”), MERSCORP HOLDINGS, INC. (“Electronic Agent”), MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (“MERS”) and Home Point Financial (“Seller”).
WHEREAS, the Buyer has agreed to purchase from Seller, from time to time at Buyer's election, certain residential mortgage loans (the “Mortgage Loans”) pursuant to the terms and conditions of a Master Repurchase Agreement Securities Contract and an Addendum, each dated as of November 23, 2015, each by and among the Buyer and the Seller (as amended, restated, supplemented and otherwise modified from time to time, the “Repurchase Agreement”); and
WHEREAS, the Buyer and the Seller desire to have certain Mortgage Loans registered on the MERS® System (defined below) such that the mortgagee of record under each Mortgage (defined below) shall be identified as MERS.
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
1. | Definitions. |
Capitalized terms used in this Agreement shall have the meanings ascribed to them below.
“Affected Loans” shall have the meaning assigned to such term in Section 4(b).
“Assignment of Mortgage” shall mean, 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 effect the assignment of the Mortgage upon recordation.
“Event of Default” shall mean a default that is not cured within any applicable grace periods as defined in the Repurchase Agreement,
“MERS Procedures Manual” shall mean the MERS Procedures Manual attached as Exhibit B hereto, as it may be amended from time to time.
“MERS Designated Mortgage Loan” shall have the meaning assigned to such term in Section 3. For purposes herein and to the extent applicable, a MOM Mortgage Loan shall be considered to be a MERS Designated Mortgage Loan.
“MERS Mortgage Identification Number” shall mean the unique 18 digit number assigned to a new security instrument such as a Mortgage, Deed of Trust, or Security Deed registered on the MERS® System.
“MERS® System” shall mean the Electronic Agent's mortgage electronic registry system, as more particularly described in the MERS Procedures Manual.
“MOM Mortgage Loan” means any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for the originator of such Mortgage Loan and its successors and assigns.
“Mortgage” shall mean each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a lien on real property and other property and rights incidental thereto.
“Mortgage Loan” shall mean any Mortgage Loan, evidenced by a promissory note and secured by a mortgage, purchased by the Buyer pursuant to the Repurchase Agreement.
“Mortgage Loan Documents” means the documents relating to such Mortgage Loan to be delivered to the Buyer or Wells Fargo Bank, National Association as custodian for the Buyer.
“Mortgage Note” shall mean a promissory note or other evidence of indebtedness of a Mortgagor secured by a Mortgage.
“Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.
“Notice of Default” shall mean a notice from the Buyer that an Event of Default has occurred and is continuing.
“Opinion of Counsel” shall mean a written opinion of counsel in form and substance reasonably acceptable to the Buyer.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof).
2. | Appointment of the Electronic Agent. |
(a) The Buyer and the Seller, by execution and delivery of this Agreement, each does hereby appoint MERSCORP Holdings, Inc. as the Electronic Agent, subject to the terms of this Agreement, to perform the obligations set forth herein.
(b) MERSCORP Holdings, Inc., by execution and delivery of this Agreement, does hereby (i) agree with the Buyer and the Seller subject to the terms of this Agreement to perform the services set forth herein, and (ii) accepts its appointment as the Electronic Agent.
3. Designation of MERS as Mortgagee of Record; Designation of Investor and Servicer of Record in MERS.
The Seller represents and warrants that (a) it has designated or shall designate MERS as, and has taken or will take such action as is necessary to cause MERS to be, the mortgagee of record, as nominee for the Seller, with respect to the Mortgage Loans in accordance with the MERS Procedures Manual and (b) it has designated or will promptly designate the Seller as the servicer or subservicer in the MERS® System for each such Mortgage Loan (each Mortgage Loan, so designated is a “MERS Designated Mortgage Loan”), and has designated or will promptly designate the Buyer as the interim funder on the MERS® System with respect to each MERS Designated Mortgage Loan.
4. Obligations of the Electronic Agent.
(a) The Electronic Agent shall ensure that MERS, as the mortgagee of record under each MERS Designated Mortgage Loan, shall promptly forward all properly identified notices MERS receives in such capacity to the person or persons identified in the MERS® System as the servicer or if a subservicer is identified in the MERS® System, the subservicer for such MERS Designated Mortgage Loan.
(b) Upon receipt of a Notice of Default, in the form of Exhibit C, from the Buyer in which the Buyer shall identify the MERS Designated Mortgage Loans with respect to which the Seller’s right to act as servicer or subservicer thereof has been terminated by the Buyer in the Buyer’s capacity as owner of such Mortgage Loans (the “Affected Loans”), the Electronic Agent shall modify the investor fields and/or servicer fields to reflect the investor and/or servicer on the MERS® System as the Buyer or the Buyer’s designee with respect to such Affected Loans. Following such Notice of Default, the Electronic Agent shall follow the instructions of the Buyer with respect to the Affected Loans without further consent of the Seller, and shall deliver to the Buyer any documents and/or information (to the extent such documents or information are in the possession or control of the Electronic Agent) with respect to the Affected Loans requested by the Buyer.
(c) Upon the Buyer’s request and instructions, and at the Seller’s sole cost and expense, the Electronic Agent shall deliver to the Buyer or the Buyer’s designee, an Assignment of Mortgage from MERS, in blank, in recordable form but unrecorded with respect to each Affected Loan; provided however, that the Electronic Agent shall not be required to comply with the foregoing unless the costs of doing so shall be paid by the Seller or a third party.
(d) The Electronic Agent shall promptly notify the Buyer if it has actual knowledge that any mortgage, pledge, lien, security interest or other charge or encumbrance exists with respect to any of the Mortgage Loans. Upon the reasonable request of the Buyer, the Electronic Agent shall review the field designated “interim funder” and shall notify the Buyer if any Person (other than the Buyer) is identified in the field designated “interim funder”.
(e) In the event that (i) the Seller, the Electronic Agent or MERS shall be served by a third party with any type of levy, attachment, writ or court order with respect to any MERS Designated Mortgage Loan or (ii) a third party shall institute any court proceeding by which any
MERS Designated Mortgage Loan shall be required to be delivered otherwise than in accordance with the provisions of this Agreement, the Electronic Agent shall promptly deliver or cause to be delivered to the other parties to this Agreement copies of all court papers, orders, documents and other materials concerning such proceedings.
(f) Upon the request of the Buyer, the Electronic Agent shall run a query with respect to any and all specified fields with respect to any or all of the MERS Designated Mortgage Loans and, if requested by the Buyer, shall change the information in such fields in accordance with the Buyer’s instructions.
(g) MERS, as mortgagee of record for the MERS Designated Mortgage Loans, shall take all such actions as may be required by a mortgagee in connection with servicing the MERS Designated Mortgage Loans at the request of the applicable servicer identified on the MERS® System, including, but not limited to, executing and/or recording, any modification, waiver, subordination agreement, instrument of satisfaction or cancellation, partial or full release, discharge or any other comparable instruments, at the sole cost and expense of the Seller.
(h) MERS has caused certain officers of the Buyer to be appointed signing officers of MERS, with the authority to wield all of the powers specified in the corporate resolution of MERS, with respect to the MERS Designated Mortgage Loans. The corporate resolution may be modified, amended, replaced, or revoked, and any authorizations and powers specified therein may be subject to change.
5. Access to Information.
Upon the Buyer’s request, the Electronic Agent shall furnish the Buyer or its auditors information in its possession with respect to the MERS Designated Mortgage Loans and shall permit them to inspect the Electronic Agent’s and MERS’ records relating to the MERS Designated Mortgage Loans at all reasonable times during regular business hours. The Buyer has the right to access all of Seller’s Mortgage Loans registered on the MERS® system in order to determine who has been designated as interim funder with respect to each MERS Designated Mortgage Loan.
6. Representations of the Electronic Agent and MERS.
The Electronic Agent and MERS hereby represent and warrant as of the date hereof that:
(a) each of the Electronic Agent and MERS has the corporate power and authority and the legal right to execute and deliver, and to perform its obligations under this Agreement, and has taken all necessary corporate action to authorize its execution, delivery and performance of this Agreement;
(b) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement;
(c) this Agreement has been duly executed and delivered on behalf of the Electronic Agent and MERS and constitutes a legal, valid and binding obligation of the Electronic Agent
and MERS enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought in proceedings in equity or at law);
(d) the Electronic Agent and MERS will maintain at all times insurance policies for fidelity and errors and omissions in amounts of at least three million dollars ($3,000,000) and five million dollars ($5,000,000) respectively, and a certificate and policy of the insurer shall be furnished to the Buyer upon request and shall contain a statement of the insurer that such insurance will not be terminated prior to 30 days’ written notice to the Buyer.
7. Covenants of MERS.
(a) MERS shall (A) not incur any indebtedness other than in the ordinary course of its business, (B) not engage in any dissolution, liquidation, consolidation, merger or sale of assets, (C) not engage in any business activity in which it is not currently engaged, (D) not take any action that might cause MERS to become insolvent, (E) not form, or cause to be formed, any subsidiaries, (F) maintain books and records separate from any other person or entity, (G) maintain its bank accounts separate from any other person or entity, (H) not commingle its assets with those of any other person or entity and hold all of its assets in its own name, (I) conduct its own business in its own name, (J) pay its own liabilities and expenses only out of its own funds, (K) observe all corporate formalities, (L) enter into transactions with affiliates only on each such transaction is intrinsically fair, commercially reasonable, and on the same terms as would be available in an arm’s length transaction with a person or entity that is not an affiliate, (M) pay the salaries of its own employees from its own funds, (N) maintain a sufficient number of employees in light of its contemplated business operations, (O) not guarantee or become obligated for the debts of any other entity or person, (P) not hold out its credit as being available to satisfy the obligation of any other person or entity, (Q) not acquire the obligations or securities of its affiliates or owners, including partners, members or shareholders, as appropriate, (R) not make loans to any other person or entity or buy or hold evidence of indebtedness issued by any other person or entity (except for cash and investment-grade securities), (S) allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including paying for office space and services performed by any employee of any affiliate, (T) use separate stationery, invoices, and checks bearing its own name, (U) not pledge its assets for the benefit of any other person or entity, (V) hold itself out as a separate identity, (W) correct any known misunderstanding regarding its separate identity, (X) not identify itself as a division of any other person or entity, and (Y) maintain adequate capital in light of its contemplated business operations.
(b) MERS agrees that in no event shall MERS’ status as mortgagee of record with respect to any MERS Designated Mortgage Loan confer upon MERS any rights or obligations as an owner of any MERS Designated Mortgage Loan or the servicing rights related thereto, and MERS will not exercise such rights unless directed to do so by the Buyer.
8. Covenants of Seller.
(a) The Seller covenants and agrees with the Buyer that with respect to each MERS Designated Mortgage Loan, it will not identify or cause to be identified any party except the Buyer in the field “interim funder” on the MERS® System.
(b) The Seller will provide or will cause to be provided to the Buyer with MERS Identification Numbers for each MERS Designated Mortgage Loan that the Buyer has purchased which MERS is the mortgagee of record.
(c) The Seller covenants that it is and will continue to be a member of the MERS® System in good standing for as long as any Mortgage Loans are MERS Designated Mortgage Loans.
9. No Adverse Interest of the Electronic Agent or MERS.
By execution of this Agreement, the Electronic Agent and MERS each represents and warrants that it currently holds, and during the existence of this Agreement shall hold, no adverse interest, by way of security or otherwise, in any MERS Designated Mortgage Loan. The MERS Designated Mortgage Loans shall not be subject to any security interest, lien or right to set-off by the Electronic Agent, MERS, or any third party claiming through the Electronic Agent or MERS, and neither the Electronic Agent nor MERS shall pledge, encumber, hypothecate, transfer, dispose of, or otherwise grant any third party interest in, the MERS Designated Mortgage Loans.
10. Indemnification of the Buyer.
The Electronic Agent agrees to indemnify and hold the Buyer and its designees harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements, including reasonable attorneys’ fees, that the Buyer may sustain arising out of any breach by the Electronic Agent of this Agreement, the Electronic Agent’s negligence, bad faith or willful misconduct, its failure to comply with the Buyer’s instructions hereunder or to the extent caused by delays or failures arising out of the inability of the Buyer or the Electronic Agent to access information on the MERS® System. The foregoing indemnification shall survive any termination or assignment of this Agreement.
11. Reliance of the Electronic Agent.
(a) In the absence of bad faith on the part of the Electronic Agent, the Electronic Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any request, instruction, certificate or other document furnished to the Electronic Agent, reasonably believed by the Electronic Agent to be genuine and to have been signed or presented by the proper party or parties and conforming to the requirements of this Agreement.
(b) Notwithstanding any contrary information which may be delivered to the Electronic Agent by the Seller, the Electronic Agent may conclusively rely on any information or Notice of Default delivered by the Buyer, and the Seller shall indemnify and hold the Electronic
Agent harmless for any and all claims asserted against it for any actions taken in good faith by the Electronic Agent in connection with the delivery of such information or Notice of Default.
12. Fees.
It is understood that the Electronic Agent or its successor will charge such fees and expenses for its services hereunder as set forth in a separate agreement between the Electronic Agent and the Seller. The Electronic Agent shall give prompt written notice of any disciplinary action instituted with respect to Seller’s failure to pay any fees required in connection with its use of the MERS® System, and will give written notice to Seller at least thirty (30) days prior to any revocation of Seller’s membership in the MERS® System.
13. Resignation of the Electronic Agent; Termination.
(a) The Buyer has entered into this Agreement with the Electronic Agent and MERS in reliance upon the independent status of the Electronic Agent and MERS, and the representations as to the adequacy of their facilities, personnel, records and procedures, its integrity, reputation and financial standing, and the continuance thereof. Neither the Electronic Agent nor MERS shall assign this Agreement or the responsibilities hereunder or delegate their rights or duties hereunder (except as expressly disclosed in writing to, and approved by, the Buyer) or any portion hereof or sell or otherwise dispose of all or substantially all of its property or assets without (i) providing the Buyer with at least 60 days’ prior written notice thereof.
(b) Neither the Electronic Agent nor MERS shall resign from the obligations and duties hereby imposed on them except by mutual consent of the Electronic Agent, MERS and the Buyer, or upon the determination that the duties of the Electronic Agent and MERS hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Electronic Agent and MERS. Any such determination permitting the resignation of the Electronic Agent and MERS shall be evidenced by an Opinion of Counsel to such effect delivered to the Buyer which Opinion of Counsel shall be in form and substance acceptable to the Buyer. No such resignation shall become effective until the Electronic Agent and MERS have delivered to the Buyer all of the Assignments of Mortgage, in blank, in recordable form but unrecorded for each MERS Designated Mortgage Loan identified by the Buyer as purchased by the Buyer.
14. Removal of the Electronic Agent.
(a) The Buyer, with or without cause, may remove and discharge the Electronic Agent and MERS from the performance of its duties under this Agreement with respect to some or all of the MERS Designated Mortgage Loans by written notice from the Buyer to the Electronic Agent and the Seller.
(b) In the event of termination of this Agreement, at the Seller’s sole cost and expense, the Electronic Agent shall follow the instructions of the Buyer for the disposition of the documents in its possession pursuant to this Agreement, and deliver to the Buyer an Assignment of Mortgage, in blank, in recordable form but unrecorded for each MERS Designated Mortgage Loan identified by the Buyer as purchased by the Buyer. Notwithstanding the foregoing, in the event that the Buyer terminates this Agreement with respect to some, but not all, of the MERS
Designated Mortgage Loans, this Agreement shall remain in full force and effect with respect to any MERS Designated Mortgage Loans for which this Agreement is not terminated hereunder. Notwithstanding any termination of this Agreement, the provisions of Sections 10 shall survive any termination.
15. Notices.
All written communications hereunder shall be delivered, via facsimile or by overnight courier, to the Electronic Agent and/or the Buyer and/or the Seller as indicated on the signature page hereto, or at such other address as designated by such party in a written notice to the other parties. All such communications shall be deemed to have been duly given when transmitted by facsimile, or in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.
16. Term of Agreement.
(a) This Agreement shall continue to be in effect until terminated by either the Buyer pursuant to Section 14(a) hereof or the Electronic Agent pursuant to Section 13(b) hereof or by mutual written agreement of the parties hereto.
(b) Upon the termination of this Agreement by the Electronic Agent pursuant to Section 13 hereof, or by the Buyer due to the breach by the Electronic Agent of its obligations hereunder pursuant to Section 14 hereof, the Electronic Agent shall, at the Electronic Agent’s sole cost and expense, execute and deliver to the Buyer or its designee an Assignment of Mortgage with respect to each MERS Designated Mortgage Loan identified by the Buyer, in blank, in recordable form but unrecorded. In the event that this Agreement is terminated by the Buyer without cause, the duties of the Electronic Agent in the preceding sentence shall be at the sole cost and expense of the Seller. In addition, the Buyer and the Electronic Agent may, at the sole option of the Buyer, enter into a separate agreement which shall be mutually acceptable to the parties with respect to any or all of the MERS Designated Mortgage Loans with respect to which this Agreement is terminated,
17. Authorizations.
Any of the persons whose signatures and titles appear on Exhibit A hereto are authorized, acting singly, to act for the Buyer, the Seller or the Electronic Agent, as the case may be, under this Agreement. The parties may change the information on Exhibit A hereto from time to time but each of the parties shall be entitled to rely conclusively on the then current exhibit until receipt of a superseding exhibit.
18. Amendments.
This Agreement may be amended from time to time only by written agreement of the Buyer, the Seller and the Electronic Agent.
19. Severability.
If any provision of this Agreement is declared invalid by any court of competent jurisdiction, such invalidity shall not affect any other provision, and this Agreement shall be enforced to the fullest extent required by law.
20. Binding Effect.
This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and assigns.
21. Governing Law.
THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
THE BUYER, THE SELLER, THE ELECTRONIC AGENT AND MERS EACH IRREVOCABLY AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR IN ANY MANNER RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY COURT OF THE STATE OF NEW YORK, OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT EXPRESSLY AND IRREVOCABLY ASSENT AND SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF ANY SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING.
22. Waiver of Jury Trial.
THE BUYER, THE SELLER, THE ELECTRONIC AGENT AND MERS EACH IRREVOCABLY AGREES TO WAIVE ITS RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING AGAINST IT ARISING OUT OF, OR RELATED IN ANY MANNER TO, THIS AGREEMENT OR ANY RELATED AGREEMENT.
23. Execution.
This Agreement may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement.
24. Cumulative Rights.
The rights, powers and remedies of the Electronic Agent, MERS, the Seller and the Buyer under this Agreement shall be in addition to all rights, powers and remedies given to the Electronic Agent, MERS, the Seller and the Buyer by virtue of any statute or rule of law, or any
other agreement, all of which rights, powers and remedies shall be cumulative and may be exercised successively or concurrently without impairing the Buyer’s rights in the Mortgage Loans.
25. Status of Electronic Agent.
Nothing herein contained shall be deemed or construed to create a partnership, joint venture between the parties hereto and the services of the Electronic Agent and MERS shall be rendered as independent contractors for the Buyer and the Seller. Other than the obligations of the Electronic Agent and MERS expressly set forth herein, the Electronic Agent and MERS shall have no power or authority to act as agent for the Buyer and the Seller pursuant to any grant of authority made under or pursuant to this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Buyer, the Seller, the Electronic Agent and MERS have duly executed this Agreement as of the date first above written.
Home Point Financial Corporation,
as Seller |
||
By: | /s/ William Newman | |
Name: William Newman | ||
Title: Chief Executive Officer and President | ||
Address for Notices: | ||
1194 Oak Valley Drive, Suite 80 | ||
Ann Arbor, Michigan 48108 | ||
WELLS FARGO BANK, N.A.,
as Buyer |
||
By: | /s/ Kenneth D. Logan | |
Name: Kenneth D. Logan | ||
Title: Managing Director |
Address for Notices: | |
Wells Fargo Bank, N.A. | |
c/o Wells Fargo Securities | |
Mortgage Banker Finance | |
2500 Northwinds Parkway | |
Suite 200 | |
Alpharetta, Georgia 30009 | |
Attention: [***]
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Telephone No.: [***]
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Telecopier No.: [***]
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With a copy to: | |
Wells Fargo Bank, N.A. | |
375 Park Avenue | |
New York, New York 10152 | |
Attention: [***]
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Telephone No.: [***]
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Telecopier No.: [***]
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ELECTRONIC AGENT: | ||
MERSCORP HOLDINGS, INC. | ||
By: | ||
Name: Sharon McGann Horstkamp | ||
Title: Senior Vice President |
Address for Notices: | |
MERSCORP Holdings, Inc. | |
1818 Library Street, Suite 300 | |
Reston,VA 20190 | |
Attention: [***]
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Telephone No.: [***]
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Facsimile No.: [***]
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MERS: |
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. | ||
By: | ||
Name: Thomas Frosina | ||
Title: Vice President |
Address for Notices: | |
Mortgage Electronic Registration Systems, Inc. | |
1818 Library Street, Suite 300 | |
Reston,VA 20190 | |
Attention: [***]
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Telephone No.: [***]
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Facsimile No.: [***]
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EXHIBIT A
LIST OF AUTHORIZED PERSONS
BUYER AUTHORIZATIONS:
Any of the persons whose signatures and titles appear below, or attached hereto, are authorized, acting singly to act for the Buyer under this Agreement:
By: | [***] | By: | [***] | By: | |||||
Name: Kenneth D. Logan | Name: William C. Buss | Name: | |||||||
Title: Managing Director | Title: Vice President | Title: |
SELLER AUTHORIZATIONS:
Any of the persons whose signatures and titles appear below, or attached hereto, are authorized, acting singly, to act for the Seller under this Agreement:
By: | [***] | By: | By: | ||||||||
Name: William Newman | Name: | Name: | |||||||||
Title: Chief Executive Officer and President | Title: | Title: |
EXHIBIT A CONTINUED
LIST OF AUTHORIZED PERSONS
ELECTRONIC AGENT AUTHORIZATIONS:
Any of the persons whose signatures and titles appear below, or attached hereto, are authorized, acting singly, to act for the Electronic Agent under this Agreement:
By: | ||
Sharon McGann Horstkamp | ||
Senior Vice President |
MERS AUTHORIZATIONS:
Any of the persons whose signatures and titles appear below, or attached hereto, are authorized, acting singly, to act for MERS under this Agreement:
By: | ||
Thomas Frosina | ||
Vice President |
EXHIBIT B
MERS PROCEDURES MANUAL
Shall be found on the MERS website at: http://www.mersinc.org
EXHIBIT C
NOTICE OF DEFAULT
[__________ ___, 20__]
Attention: [Sharon M, Horstkamp]
MERSCORP Holdings, Inc.
1818 Library Street
Reston, VA 22182
Ladies and Gentlemen:
Please be advised that this Notice of Default is being issued pursuant to Section 4(b) of that certain Electronic Tracking Agreement (the “Electronic Tracking Agreement”), dated as of [________], 20[__], by and among WELLS FARGO BANK, NA. (the “Buyer”), Home Point Financial Corporation (the “Seller”), MERSCORP Holdings, Inc. (the “Electronic Agent”) and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (“MERS”). The Affected Loans are listed on the Schedule 1 attached hereto (including the mortgage identification numbers). Accordingly, the Electronic Agent shall not accept instructions from the Seller, any subservicer and from no party other than the Buyer with respect to such Mortgage Loans, until otherwise notified by the Buyer.
Any terms used herein and not otherwise defined shall have such meaning specified in the Electronic Tracking Agreement.
WELLS FARGO BANK, N.A. | |||
By: | |||
Title: |
EXHIBIT A
UCC-1 FINANCING STATEMENT
ATTACHED TO AND MADE PART OF UNIFORM COMMERCIAL CODE (“UCC”)
FINANCING STATEMENT, FORM UCC-1
Debtor: |
Home Point Financial Corporation 1194 Oak Valley Drive, Suite 80 Ann Arbor, Michigan 48108 Attention: William Newman |
Secured Party: |
Wells Fargo Bank, N.A. c/o Wells Fargo Securities Mortgage Banker Finance Group 2500 Northwinds Parkway, Suite 200 Alpharetta, Georgia 30009
Attention: [***]
|
The parties intend that the transactions under the Agreement (defined below) constitute absolute assignments. The UCC Financing Statement, Form UCC-1, to which this Exhibit A is attached and forms a part, covers all of the Debtor’s right, title and interest in, to and under the Purchased Assets (as defined below), whether now owned or hereafter acquired, now existing or hereafter created and wherever located, including, without limitation, all “accounts,” “chattel paper”, “general intangibles”, “instruments” or “investment property” (in each case as defined in the Uniform Commercial Code as in effect from time to time) constituting or relating to the Purchased Assets, and any and all substitutions and exchanges for, and products and proceeds of, the foregoing. The Agreement provides for the release by Buyer of its interest in a Purchased Asset upon its repurchase by the Seller in accordance with the terms of the Agreement.
Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
As used herein, the following terms shall have the following meanings:
“Agency Security”: A Ginnie Mae Security, a Fannie Mae Security or a Freddie Mac Security, as applicable.
“Agreement”: Collectively, the Master Repurchase Agreement and Securities Contract, dated as of November 23, 2015, between the Debtor and the Secured Party, the Addendum, dated as of November 23, 2015, between the Debtor and the Secured Party, and each Schedule and Exhibit thereto, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.
“Collection Account”: One or more accounts established by the Servicer or the Debtor for the benefit of Secured Party or assigned to the Secured Party, into which all collections and proceeds on or in respect of the Purchased Assets shall be deposited by Servicer or the Debtor and subject to a Collection Account Control Agreement.
“Fannie Mae Security”: A mortgage-backed security received in exchange for mortgage loans sold by the Debtor to Fannie Mae and issued by Fannie Mae.
“Freddie Mac Security”: A mortgage-backed security received in exchange for mortgage loans sold by the Debtor to Freddie Mac and issued by Freddie Mac.
“Ginnie Mae Security”: A mortgage-backed security issued by the Debtor for which the timely payment of principal and interest is guaranteed by the Government National Mortgage Association.
“Income”: With respect to any Purchased Asset, all of the following (in each case with respect to the entire par amount of the Purchased Asset represented by such Purchased Asset and not just with respect to the portion of the par amount represented by the Purchase Price advanced against such Purchased Asset): (a) all Principal Payments, (b) all Interest Payments, (c) all other income, distributions, receipts, payments, collections, prepayments, recoveries, proceeds (including insurance and condemnation proceeds) and other payments or amounts of any kind paid, received, collected, recovered or distributed on, in connection with or in respect of such Purchased Asset, including prepayment fees, extension fees, exit fees, any rental payments, if any, transfer fees, make whole fees, late charges, late fees and all other fees or charges of any kind or nature, premiums, yield maintenance charges, penalties, default interest, dividends, gains, receipts, allocations, rents, interests, profits, payments in kind, returns or repayment of contributions, net sale, foreclosure, liquidation, securitization or other disposition proceeds, insurance payments, settlements and proceeds, (d) all payments received from hedge counterparties pursuant to interest rate protection agreements related to such Purchased Mortgage Loans; and (e) all other “proceeds” as defined in Section 9-102(64) of the UCC, including all collections or distributions thereon or other income or receipts therefrom or in respect thereof; provided, that any amounts that under the applicable Mortgage Loan Documents are required to be deposited into and held in escrow or reserve to be used for a specific purpose, such as taxes and insurance, shall not be included in the term “Income” unless and until (i) an event of default exists under such Mortgage Loan Documents, (ii) the holder of the related Purchased Mortgage Loan has exercised or is entitled to exercise rights and remedies with respect to such amounts, (iii) such amounts are no longer required to be held for such purpose under such Mortgage Loan Documents, or (iv) such amounts may be applied to all or a portion of the outstanding indebtedness under such Mortgage Loan Documents.
“Interest Rate Protection Agreement”: With respect to any or all of the Purchased Mortgage Loans, any short sale of a US Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, interest rate lock agreement or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Debtor and an Affiliate of Secured Party or such other party acceptable to Secured Party in its sole discretion, which agreement is acceptable to Secured Party in its sole discretion.
“Program Agreements”: Collectively, the Servicing Agreement, if any, the Servicer Side Letter, if any, the Custodial Agreement, the Agreement, the Collection Account Control Agreement, the Seller’s Clearing Account Control Agreement, the Reserve Account Control
Agreement, the Electronic Tracking Agreement, if any, and the Guaranty, if any, and any other agreements entered into in connection with the Agreement between the Secured Party and the Debtor.
“Purchased Agency Securities”: The collective reference to Agency Securities sold by Debtor to Secured Party in a Transaction under the Agreement.
“Purchased Assets”: Each of the following items or types of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located: the Purchased Mortgage Loans, the Records, and all related Servicing Rights, the Purchased Agency Securities, the Program Agreements (to the extent such Program Agreements and Debtor’s right thereunder relate to the Purchased Mortgage Loans or the Purchased Agency Securities), any Mortgaged Property relating to the Purchased Mortgage Loans or the Purchased Agency Securities, all insurance policies and insurance proceeds relating to any Purchased Mortgage Loan or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts (if any) and VA Loan Guaranty Agreements (if any), Income, all amounts in the Collection Account, all amounts in the Seller’s Clearing Account and the Reserve Account, and any account to which such amount is deposited, Interest Rate Protection Agreements, accounts (including any interest of Debtor in escrow accounts) and any other contract rights, instruments, accounts, payments, rights to payment (including payments of interest or finance charges) general intangibles and other assets relating to the Purchased Assets (including, without limitation, any other accounts) or any interest in the Purchased Assets, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests relating to any of the foregoing as are specified on a Transaction Request and/or Trust Receipt, in all instances, whether now owned or hereafter acquired, now existing or hereafter created.
“Purchased Mortgage Loans”: The collective reference to Mortgage Loans sold by the Debtor to the Secured Party in a Transaction under the Agreement, listed on the related Mortgage Loan Schedule attached to the related Transaction Request, which such Mortgage Loans the Custodian has been instructed to hold pursuant to the Custodial Agreement.
“Servicing Rights”: The contractual possessory or other rights of the Debtor or any third party servicer to administer or service the Purchased Mortgage Loans, including, without limitation, the right to collect Monthly Payments.
“Transaction Request”: A request from the Debtor to the Secured Party to enter into a Transaction, submitted through Secured Party’s on-line warehouse loan system.
THIS FINANCING STATEMENT IS FILED FOR PRECAUTIONARY PURPOSES ONLY. THE PARTIES INTEND THAT THE TRANSACTIONS UNDER THE AGREEMENT CONSTITUTE PURCHASES AND SALES. THIS UCC-1 FINANCING STATEMENT IS INTENDED TO PERFECT A SALE OF ACCOUNTS, TO THE EXTENT THE PROPERTY DESCRIBED ABOVE CONSTITUTES ACCOUNTS, AND TO PERFECT A SECURITY INTEREST IN THE PROPERTY DESCRIBED ABOVE IF, NOTWITHSTANDING THE PARTIES’ INTENT, THE TRANSACTIONS
UNDER THE AGREEMENT ARE RECHARACTERIZED AS A SECURED FINANCING.
Filing Office(s)
New Jersey
Exhibit 10.8
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.
MASTER REPURCHASE AGREEMENT
between
Amherst Pierpont Securities LLC, as the Buyer,
and
Home Point Financial Corporation, as the Seller
Dated as of October 1, 2020
TABLE OF CONTENTS
Page | ||
ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS | 1 | |
Section 1.01 | Definitions | 1 |
Section 1.02 | Accounting Terms and Determinations | 12 |
ARTICLE II INITIATION; TERMINATION | 12 | |
Section 2.01 | Conditions Precedent to Initial Transaction | 12 |
Section 2.02 | Conditions Precedent to all Transactions | 13 |
Section 2.03 | Procedure for Requesting Transactions | 14 |
Section 2.04 | Confirmations; Transactions; Settlement Statements | 15 |
Section 2.05 | Delivery of GNMA Securities | 15 |
Section 2.06 | Delivery Failure; Mini Close-Out | 16 |
Section 2.07 | Repurchase | 16 |
Section 2.08 | Termination | 17 |
ARTICLE III MARGIN MAINTENANCE; NETTING | 17 | |
Section 3.01 | Margin Deficit and Margin Excess | 17 |
ARTICLE IV INCOME PAYMENTS | 18 | |
Section 4.01 | Income Payments | 18 |
Section 4.02 | Application of Income | 18 |
ARTICLE V TAXES | 19 | |
Section 5.01 | Tax Treatment | 19 |
Section 5.02 | Taxes. | 19 |
ARTICLE VI SECURITY INTEREST | 20 | |
Section 6.01 | Purchased Assets | 20 |
Section 6.02 | Security Interest | 21 |
Section 6.03 | [Reserved] | 21 |
Section 6.04 | Further Documentation | 21 |
Section 6.05 | Proceeds | 21 |
Section 6.06 | Conditional Release of Eligible Mortgage Loans | 22 |
Section 6.07 | Confirmation of Intended Sale/Security Interest | 22 |
ARTICLE VII PAYMENT, TRANSFER AND CUSTODY | 23 | |
Section 7.01 | Payments to the Buyer | 23 |
Section 7.02 | Ownership of Purchased Assets | 23 |
ARTICLE VIII SELLER REPRESENTATIONS | 24 | |
Section 8.01 | Solvency | 24 |
Section 8.02 | Ability to Perform | 24 |
Section 8.03 | No Defaults | 24 |
Section 8.04 | Legal Name; Existence | 24 |
Section 8.05 | Litigation | 24 |
Section 8.06 | No Breach | 25 |
Section 8.07 | Action | 25 |
Section 8.08 | Approvals | 25 |
Section 8.09 | Margin Regulations | 25 |
Section 8.10 | Investment Company Act | 25 |
Section 8.11 | Purchased Assets; No Liens | 25 |
Section 8.12 | Location of Chief Executive Offices | 26 |
Section 8.13 | Location of Books and Records | 26 |
Section 8.14 | Reserved | 26 |
Section 8.15 | Anti-Money Laundering Law | 26 |
Section 8.16 | Agency Approvals | 26 |
Section 8.17 | Information Furnished | 26 |
Section 8.18 | Eligible Mortgage Loan | 26 |
ARTICLE IX COVENANTS OF THE SELLER | 27 | |
Section 9.01 | Litigation | 27 |
Section 9.02 | Existence, etc | 27 |
Section 9.03 | Notices and Reports | 27 |
Section 9.04 | Limitation on Liens | 28 |
Section 9.05 | MERS | 28 |
Section 9.06 | Preservation of Security Interest | 28 |
Section 9.07 | Compliance with Law | 28 |
Section 9.08 | Obligations with Respect to Purchased Assets | 28 |
Section 9.09 | Conveyance of Certified Pools; Security Interests | 28 |
Section 9.10 | Further Assurances | 29 |
Section 9.11 | Taxes | 29 |
Section 9.12 | Servicing | 29 |
Section 9.13 | Custodian | 30 |
Section 9.14 | Reimbursement of Ongoing Expenses | 30 |
ARTICLE X EVENTS OF DEFAULT; REMEDIES | 30 | |
Section 10.01 | Events of Default | 30 |
Section 10.02 | Remedies Upon Default | 31 |
Section 10.03 | Remedies Cumulative | 34 |
ARTICLE XI MISCELLANEOUS | 35 | |
Section 11.01 | Indemnification | 35 |
Section 11.02 | Single Agreement | 35 |
Section 11.03 | Notices and Other Communications | 35 |
Section 11.04 | Entire Agreement; Severability | 36 |
Section 11.05 | Assignability and Hypothecation | 36 |
Section 11.06 | Survival | 37 |
Section 11.07 | GOVERNING LAW | 37 |
Section 11.08 | SUBMISSION TO JURISDICTION; WAIVERS | 37 |
Section 11.09 | No Waivers, Etc | 38 |
Section 11.10 | Intent | 38 |
Section 11.11 | Periodic Due Diligence Review | 40 |
Section 11.12 | Buyer’s Appointment As Attorney-In-Fact | 40 |
Section 11.13 | Conflicts | 41 |
Section 11.14 | Counterparts | 41 |
Section 11.15 | Captions | 41 |
Section 11.16 | Acknowledgments | 41 |
Section 11.17 | Confidentiality | 42 |
Section 11.18 | Set-Off | 43 |
Section 11.19 | Amendment | 43 |
Section 11.20 | Third-Party Beneficiaries | 43 |
Section 11.21 | Limitation of Liability | 43 |
Section 11.22 | Non-Reliance | 43 |
Section 11.23 | Register | 44 |
EXHIBITS | |
SCHEDULE 1 | [Reserved] |
EXHIBIT I | Transaction Request |
EXHIBIT II | [Reserved] |
EXHIBIT III | Form of Settlement Statement |
MASTER REPURCHASE AGREEMENT
MASTER REPURCHASE AGREEMENT, dated as of October 1, 2020 (as amended, supplemented or otherwise modified from time to time, this “Agreement”), by and between Amherst Pierpont Securities LLC, a Delaware limited liability company (the “Buyer”) and Home Point Financial Corporation, a New Jersey corporation (the “Seller”).
RECITALS
From time to time the Seller and the Buyer may enter into transactions in which the Seller agrees to sell to the Buyer Certified Pools and other assets as more particularly described below in the definition of “Purchased Assets” and the Buyer agrees to purchase such Certified Pools in accordance with the terms and conditions set forth herein, subject to the Seller’s obligations to repurchase such Certified Pools. Each such transaction shall be referred to herein as a “Transaction” and, collectively, the “Transactions” and shall be governed by this Agreement.
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Definitions. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa). Terms otherwise not defined herein shall have the meanings assigned thereto in the Custodial Agreement.
“Act of Insolvency” shall mean, with respect to any Person, the occurrence of any of the following with respect to such Person:
(a) Such Person shall admit in writing its inability to pay its debts as such debts become due; or
(b) Such Person shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator or the like of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code or (vi) take any other action for the purpose of effecting any of the foregoing; or
(c) A proceeding or case shall be commenced, without the application or consent of such Person in any court of competent jurisdiction, seeking (i) the reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of such Person’s debts, (ii) the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner, liquidator or the like of such Person or of all or any substantial part of its property, or (iii) similar relief in respect of
such Person under any law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or adjustment of debts and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of [***] or more days; or an order for relief against such Person shall be entered in an involuntary case under the Bankruptcy Code.
“Affiliate” shall mean with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code, in effect from time to time; 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.
“Agency Approvals” shall have the meaning specified in Section 8.16(a).
“Agreement” shall have the meaning specified in the preamble hereto.
“Applicable Law” means, as to any Person, all applicable laws binding upon such Person or to which such a Person is subject.
“Banking Department” shall have the meaning specified in Section 8.16(b).
“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, Title 11 U.S.C. Section 101 et. seq., as amended from time to time.
“Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which banks in the States of New York, Texas or Michigan or the state in which the Custodian is located are authorized or obligated by law or executive order to be closed, or (iii) any day on which either the Buyer or Seller is closed for business.
“Buyer” shall have the meaning specified in the preamble hereto.
“Buyer Confidential Information” shall have the meaning specified in Section 11.17(a).
“Buyer’s Margin Amount” shall mean, with respect to any Transaction as of any date, the amount obtained by application of the Buyer’s Margin Percentage to the Repurchase Price (ignoring for this purpose only any component of the Repurchase Price representing Expenses and/or indemnity amounts) for such Transaction as of such date.
“Buyer’s Margin Percentage” shall mean, with respect to any Transaction as of any date, a percentage agreed to by Buyer and Seller or, in the absence of such agreement the percentage obtained by dividing the Market Value of the Certified Pools and the related Purchased Assets as of the Purchase Date by the Purchase Price for such Purchased Assets on the related Purchase Date for such Transaction.
“Capital Lease Obligations” shall mean for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Cash Equivalents” shall mean (a) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of [***] or less from the date of acquisition and overnight bank deposits of any commercial bank having capital and surplus in excess of [***] (c) repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than [***] with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within [***] after the day of acquisition, (e) securities with maturities of [***] or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of [***] or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.
“Certified Mortgage Loan” shall mean a Mortgage Loan that the Custodian has initially certified to Ginnie Mae in accordance with Section 3 of the Custodial Agreement.
“Certified Pools” shall mean each Pool of Eligible Mortgage Loans that is the subject of an “initial certification” by the Custodian to Ginnie Mae in accordance with the GNMA Guide. Each Certified Pool shall contain all property rights in and to all Purchased Assets contained in such Certified Pool. Notwithstanding anything to the contrary herein, all right, title and interest of the Buyer in any Certified Pool shall adhere and attach herein only for so long as such Certified Pool is subject to a Transaction hereunder.
“Closing Date” shall mean October 1, 2020.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Collateral Confirm” shall mean a Collateral Confirm issued by the Custodian to the Buyer pursuant to the Custodial Agreement confirming the Custodian’s possession of the Mortgage Files.
“Collection Account” means, as the context may require, either or both of the two accounts, as applicable, established by the Seller at Merchants Bank of Indiana, ABA Number [***] and having the account number [***] (for principal and interest) and the account number [***] (for Taxes and insurance).
“Confirmation” shall have the meaning specified in Section 2.04(a).
“Costs” shall have the meaning specified in Section 11.01.
”Credit File” shall mean all papers and records of whatever kind or description, whether developed or originated by the Seller or others, required to document a Mortgage Loan; provided, however, that such Mortgage Loan papers, documents and records shall not include any Mortgage Loan papers, documents or records which are contained in the Mortgage File.
“Custodial Agreement” means the Tri-Party Custody Agreement, dated as of October 1, 2020 among the Buyer, the Seller and the Custodian, as amended, supplemented or otherwise modified from time to time.
“Custodian” shall mean U.S. Bank, National Association, a national banking association, and its successors in interest, as custodian under the Custodial Agreement, and any successor custodian under the Custodial Agreement.
“Default” shall mean an event that, with the giving of notice or the passage of time or both, would constitute an Event of Default.
“Disputes” shall have the meaning specified in Section 8.05.
“Dollars” and “$” shall mean lawful money of the United States of America.
“Electronic Agent” shall mean MERSCORP Holdings, Inc., and its successors and assigns.
“Electronic Tracking Agreement” shall mean that certain Electronic Tracking Agreement, if any, among the Buyer, the Seller, the Electronic Agent and Mortgage Electronic Registration Systems, Inc.; provided that if no Mortgage Loans are or will be MERS Designated Mortgage Loans, all references herein to the Electronic Tracking Agreement shall be disregarded.
“Electronic Transmission” shall mean the delivery of information in an electronic format reasonably acceptable to the applicable recipient thereof.
“Eligible Mortgage Loan” shall mean a Mortgage Loan:
(a) Which is secured by a Mortgage;
(b) Which is secured by a first lien on real property;
(c) Which was originated in accordance with underwriting guidelines acceptable to FHA, VA, RD, or the PIH, as applicable, and to GNMA;
(d) Which is eligible for insurance by the FHA or for guaranty by the VA or guaranty or issuance by RD or PIH;
(e) The proceeds of which have been fully disbursed to the Mortgagor and there is no obligation for the mortgagee or its agent to advance additional funds thereunder unless required per FHA, VA, RD, PIH or GNMA requirements for a GNMA Securitization;
(f) The servicing rights appurtenant to which are not pledged to or otherwise encumbered by, any Person other than the Buyer (or as otherwise required by GNMA), unless such pledge or encumbrance will be removed upon the payment of the applicable repurchase price to any prior warehouse lender or other financing party out of the Purchase Price);
(g) [reserved.]
(h) Which the Custodian has designated as being a Certified Mortgage Loan;
(i) Which is contained in a pool that has the associated pool number and CUSIP indicated on the Custodian Loan Transmission delivered by the Custodian; and
(j) Which meets any other requirements agreed to between the Seller and the Buyer with respect to any Transaction hereunder.
“Event of Default” shall have the meaning specified in Section 10.01 hereof.
“Executive Order” shall have the meaning specified in Section 8.15 hereof.
“Expenses “ shall mean Ongoing Expenses and Upfront Expenses.
“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 and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
“FDIA” shall have the meaning specified in Section 11.10(c).
“FDICIA” shall have the meaning specified in Section 11.01(d).
“FHA” shall mean the Federal Housing Administration or any successor thereto.
“FHA Mortgage Loan” means any mortgage loan which is originated in compliance with applicable FHA guidelines and upon the origination of such mortgage loan and the submission thereof by the related originator to the FHA, the related originator received the necessary endorsements and approvals by the FHA, as evidenced by the FHA mortgage insurance certificate.
“Final Repurchase Date” shall mean, for any Transaction, the earlier to occur of (a) the related Repurchase Date and (b) the Termination Date.
“Forward Exposure” shall mean with respect to any party and a Transaction on any date, (i) the amount of loss, if any, such party would incur upon canceling such Transaction and entering into a replacement transaction by reference to the price for such replacement transaction on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, or (ii) if such Transaction has been the subject of a Related Transaction under Section 11.05 hereof, the costs to Buyer of unwinding such Related Transaction, plus the applicable Price Differential for the number of days elapsed from the Purchase Date to the date of the mini close-out payment under Section 2.06.
“GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States.
“GinnieNET” means Ginnie Mae’s web-based application that accommodates electronic pooling and investor reporting via the internet.
“Ginnie Mae” or “GNMA” shall mean the Government National Mortgage Association or any successor thereto.
“GNMA Guide” shall mean Ginnie Mae’s “MBS Guide” as in effect from time to time.
“GNMA Lien” shall mean the Lien of Ginnie Mae on Certified Mortgage Loans included in a Certified Pool, which such Lien attaches during the pool processing as provided in HUD Form 11711A and which Lien continues for so long as the Mortgage Loans remain as Certified Mortgage Loans included in a GNMA Security.
“GNMA Securitization” shall mean a securitization pursuant to which GNMA Securities are issued.
“GNMA Security” shall mean a Ginnie Mae security backed by Mortgage Loans, which is issued by Seller or by another Ginnie Mae-approved issuer and guaranteed by Ginnie Mae.
“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over the Seller or any of its Subsidiaries, or any of their properties.
“HUD” shall mean the United States Department of Housing and Urban Development or any successor thereto.
“Income” shall mean, with respect to any Purchased Asset at any time, all prepayments and payoffs, sale proceeds, insurance claims, condemnation awards, real estate owned rents and any other income and all other amounts received with respect to such Purchased Asset; provided, that Income shall not include any escrow payments or mortgage servicing fees
or the proceeds of the sale by the Seller of any mortgage servicing rights relating to any of the Mortgage Loans.
“Indemnified Party” shall have the meaning specified in Section 11.01.
“Lien” shall mean any mortgage, lien, deed of trust, pledge, charge, security interest or similar encumbrance.
“Loan Level Representation” shall mean any representation or warranty in Sections 6.07(d) or 8.18.
“Margin Call” shall have the meaning specified in Section 3.01(a).
“Margin Deficit” shall have the meaning specified in Section 3.01(a).
“Margin Excess” shall have the meaning specified in Section 3.01(b).
“Margin Notice Deadline” shall mean [***] New York City time on the applicable Business Day.
“Market Value” shall mean, as of any date, with respect to any Certified Pool or any specific Purchased Asset, the value of such Certified Pool or specific Purchased Asset, as marked to market by the Buyer in accordance with a commercially reasonable methodology; provided that the following Mortgage Loans shall have a Market Value of zero: (a) any Mortgage Loan that is not eligible to be included in a GNMA Securitization, and (b) any Mortgage Loan that is not an Eligible Mortgage Loan.
“Material Adverse Effect” shall mean a material adverse effect on (a) the ability of the Seller to perform its obligations under any of the Repurchase Documents, (b) the validity or enforceability of any of the Repurchase Documents, (c) the rights and remedies of the Buyer against Seller under any of the Repurchase Documents, (d) the Market Value of all or any significant portion of the Certified Pools and/or the Purchased Assets, (e) the Buyer’s ownership or security interest in all or any significant portion of the Certified Pools and/or the Purchased Assets.
“MERS” means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS® System” shall mean MERS mortgage electronic registry system, as more particularly described in the MERS Procedures Manual.
“Moody’s” means Moody’s Investors Service, Inc. or any successors thereto.
“Mortgage” shall mean with respect to a Mortgage Loan, the mortgage, deed of trust or other instrument securing a Mortgage Note, which creates a first Lien on a fee simple residential Mortgaged Property securing the Mortgage Note or a leasehold estate with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely accepted practice.
“Mortgage File” shall mean, as to each Mortgage Loan, those documents that are delivered to the Custodian or which at any time come into the possession of the Custodian pursuant to the Custodial Agreement.
“Mortgage Loan” shall mean a FHA Mortgage Loan, a VA Mortgage Loan, a RD Mortgage Loan or a PIH Mortgage Loan, with respect to which the Custodian has been instructed to hold the related Mortgage File pursuant to the Custodial Agreement; provided, that, for the avoidance of doubt, such Mortgage Loan includes, without limitation, the Mortgage Note, the related Mortgage and all associated Servicing Rights.
“Mortgage Note” shall mean the original executed promissory note or other evidence of the indebtedness of a Mortgagor with respect to a Mortgage Loan.
“Mortgaged Property” shall mean, with respect to a Mortgage Loan, a fee simple interest in, or a leasehold estate (to the extent the use of leasehold estates for residential properties in such jurisdictions is a widely accepted practice) with respect to, the real property (including all improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.
“OFAC Regulations” shall have the meaning specified in Section 8.15 hereof.
“Ongoing Expenses” shall mean all expenses (excluding Upfront Expenses and Taxes) incurred by or on behalf of the Buyer in connection with this Agreement or any Repurchase Document and any amendment, supplement or other modification or waiver related thereto, including without limitation, the reasonable costs and expenses incurred in connection with the enforcement of this Agreement or any Repurchase Document and any reasonable and documented attorney’s fees.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof).
“PIH” means the United States Department of Housing and Urban Development’s Office of Public and Indian Housing.
“PIH Mortgage Loan” means any mortgage loan which is originated in compliance with applicable PIH guidelines and requirements and is insured or guaranteed by the PIH.
“Pool” shall have the meaning specified for such term in the “Definitions of Terms” section of “Ginnie Mae MBS Loan-Level Disclosure Definitions” in the GNMA Guide, which, as of the date of this Agreement, means “[a] collection of mortgage loans, which is the basis for a mortgage-backed security”.
“Pool Settlement Date” shall mean, with respect to any Certified Pool, any date on which the GNMA Securities related to such Certified Pool are credited to the securities account referenced in section 2.05 hereof.
“Price Differential” shall mean with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by the Seller to the Buyer with respect to such Transaction).
“Pricing Rate” shall mean, for any Transaction the per annum percentage rate for determination of the Price Differential as set forth in the related Confirmation.
“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Purchase Date” shall mean, with respect to each Transaction, the date on which Purchased Assets are sold by the Seller to the Buyer hereunder.
“Purchase Price” shall mean the price at which a Certified Pool and the related Purchased Assets is transferred by the Seller to the Buyer or its designee (including the Custodian) on the related Purchase Date.
“Purchased Assets” has the meaning specified in Section 6.01.
“RD” means the United States Department of Agriculture Rural Development.
“RD Mortgage Loan” means any mortgage loan which is originated in compliance with applicable RD guidelines and requirements and is insured or guaranteed by the RD.
“Register” has the meaning specified in Section 11.23.
“Regulations T, U and X” shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.
“Related Transaction” has the meaning specified in Section 11.05(b).
“Repurchase Date” shall mean the earlier to occur of (a) the date specified as such in the related Confirmation (which shall in no event be more the 364 days from the Closing Date and which shall be the related Pool Settlement Date following the related Purchase Date unless otherwise mutually agreed by the parties hereto, or (b) the earlier date specified by the Buyer following the occurrence of an Event of Default, if any date is so specified.
“Repurchase Documents” shall mean this Agreement, the Custodial Agreement, the Electronic Tracking Agreement, if any, and any other agreement entered into between the Seller and the Buyer in connection herewith.
“Repurchase Obligations” shall have the meaning specified in Section 2.07.
“Repurchase Price” means, with respect to a Certified Pool and the related Purchased Assets, the sum of (a) the portion of the Purchase Price not yet repaid, and (b) the portion of accrued and unpaid Price Differential, overdue Expenses and overdue indemnity amounts due from the Seller under this Agreement related to such Certified Pool and the related Purchased Assets, as reduced by all related amounts, if any, previously credited or transferred to the Buyer pursuant to Section 4.02 upon the occurrence of an Event of Default.
“Requirement of Law” shall mean as to any Person, the organization documents of such Person, and any law, treaty, rule, binding guidance 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” shall mean, as to any Person, the chief executive officer, the chief financial officer or the chief operating officer of such Person.
“S&P” means S&P Global Ratings, a division of S&P Global Inc., or any successor thereto.
“Seller” shall mean with respect to any Transaction, Home Point Financial Corporation, a New Jersey corporation, and its successors in interest and permitted assigns.
“Seller Confidential Information” shall have the meaning specified in Section 11.17(b).
“Seller’s Margin Amount” shall mean with respect to any Transaction as of any date, the amount obtained by application of the Seller’s Margin Percentage to the Repurchase Price for such Transaction as of such date.
“Seller’s Margin Call” shall have the meaning specified in Section 3.01(b).
“Seller’s Margin Percentage” shall mean with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by the Buyer and the Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Certified Pools and the related Purchased Assets as of the Purchase Date by the Purchase Price for such Purchased Assets on the related Purchase Date for such Transaction.
“Servicing Records” shall mean 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 Mortgage Loans whether maintained in paper or electronic format and including electronic images of any such records.
“Servicing Rights” shall mean, with respect to each Mortgage Loan, the right to do any and all of the following: (a) service and administer such Mortgage Loan; (b) collect any payments or monies payable or received for servicing such Mortgage Loan; (c) collect any late
fees, assumption fees, penalties or similar payments with respect to such Mortgage Loan; (d) enforce the provisions of all agreements or documents creating, defining or evidencing any such servicing rights and all rights of the servicer thereunder, including, but not limited to, any clean-up calls and termination options; (e) collect and apply any escrow payments or other similar payments with respect to such Mortgage Loan; (f) control and maintain all accounts and other rights of payments related to any of the property described in the other clauses of this definition; (g) possess and use any and all documents, files, records, servicing files, servicing documents, Servicing Records, data tapes, computer records, or other information pertaining to such Mortgage Loan or pertaining to the past, present or prospective servicing of such Mortgage Loan; and (h) enforce any and all rights, powers and privileges incident to any of the foregoing.
“Settlement Statement” shall mean each schedule in substantially the form of Exhibit III hereto, prepared by the Buyer with respect to each Pool Settlement Date and issuance of GNMA Securities and detailing, among other things, the Repurchase Price for the related Certified Pool, the proceeds of the sale of the related GNMA Securities and the application of such proceeds, and whether any Margin Excess or Margin Deficit would exist following the application of such proceeds.
“Sub-Servicer” shall have the meaning specified in Section 9.12(b).
“Subsidiary” shall mean, with respect to any Person, any corporation, partnership, limited liability company 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, limited liability company 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.
“Tax” or “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Termination Date” shall mean the earlier to occur of (a) the date specified by the Buyer following the occurrence of an Event of Default that is not waived by the Buyer in writing, if any date is so specified, and (b) the date on which the parties agree to terminate this Agreement.
“Third-Party Diligence Expenses” shall mean reasonable and invoiced expenses incurred by the Buyer in retaining third-party diligence providers to review the Seller’s policies and procedures with respect to data integrity, legal compliance and other customary diligence matters relating to the extension of consumer credit, warehouse financing and securitization of mortgage loans in connection with Ginnie Mae’s MBS programs.
“Transaction” or “Transactions” has the meaning specified in the Recitals hereto.
“Transaction Request” means a request delivered in accordance with Section 2.03(b) from the Seller to the Buyer, in the form attached as Exhibit I hereto, to enter into a Transaction.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as enacted in each applicable state as in effect on the date hereof.
“Upfront Expenses” shall mean all reasonable invoiced out of pocket expenses (excluding Ongoing Expenses, and Taxes) incurred by or on behalf of Buyer associated with the start-up of this facility (including the expenses incurred for the initial onboard and set up of the facility), the preparation, execution, delivery and administration of the Repurchase Documents and including the reasonable fees, disbursements and other charges of Buyer’s counsel and Third-Party Diligence Expenses.
“Upfront Expense Cap” shall mean a maximum of [***].
“VA” means the United States Department of Veterans Affairs or any successor thereto.
“VA Mortgage Loan” means any mortgage loan originated in compliance with applicable VA guidelines and upon the origination of such mortgage loan and the submission thereof by the related originator to the VA, the related originator received the necessary endorsements and approvals by the VA, as evidenced by the VA loan guaranty certificate.
Section 1.02 Accounting Terms and Determinations. Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Buyer hereunder shall be prepared, in accordance with GAAP.
ARTICLE II
INITIATION; TERMINATION
Section 2.01 Conditions Precedent to Initial Transaction. The Buyer may enter into the initial Transaction only following the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the following conditions (unless any such condition is otherwise waived by Buyer):
(a) The Buyer shall have received from the Seller the following documents, each of which shall be satisfactory in form and substance to the Buyer and its counsel:
(i) Master Repurchase Agreement. This Agreement, duly completed and executed by the parties hereto;
(ii) Custodial Agreement. The Custodial Agreement, duly executed and delivered by each party thereto;
(iii) UCC Financing Statements. Evidence that all other actions necessary or, in the opinion of the Buyer, desirable to perfect and protect the Buyer’s interest in the Certified Pools and the related Purchased Assets have been taken, including, without limitation, filed UCC Financing Statements naming the Seller as debtor and the Buyer or its assigns as Secured Party and describing the Certified Pools and the related Purchased Assets, including by reference to this Agreement;
(iv) Seller’s Officer’s Initial Purchase Certificate. An Officer’s Certificate in such form as agreed between the parties;
(v) Status of Seller. Evidence of Seller’s status as an FHA and VA approved mortgagee and a GNMA approved issuer;
(vi) Legal Opinions. Legal opinions as to the due authorization, execution and delivery and enforceability with respect to the Seller of the Repurchase Documents; the status of this Agreement as either a “securities contract” under Section 741(7) of the Bankruptcy Code or a “repurchase agreement” under Section 101(47) of the Bankruptcy Code; and as to the Buyer’s status as the holder of a perfected security interest in the Purchased Assets under the UCC; and
(vii) Other Ancillary Documents. Such other ancillary documents as the Buyer may reasonably request, in form and substance reasonably acceptable to the Buyer to effectuate the Transactions contemplated hereunder. In addition, the Seller shall have taken such other action as the Buyer shall have reasonably requested in order to transfer the Purchased Assets pursuant to this Agreement.
(b) Reimbursement of Expenses. If, by the earlier to occur of the date that is, nine months from the date hereof or six months from the date of the first Transaction, the aggregate, cumulative Purchase Price of all Transactions during such time is less than [***] Seller shall reimburse Purchaser for all Upfront Expenses incurred by the Buyer on or prior to such date subject to the Upfront Expense Cap, within thirty (30) days of its receipt of an invoice therefore.
Section 2.02 Conditions Precedent to all Transactions. The Buyer may enter into each Transaction (including the initial Transaction) only following the satisfaction of the following further conditions precedent, in each case, both immediately prior to entering into such Transaction and also after giving effect to the consummation thereof and the intended use of the proceeds of the sale (unless any such condition is otherwise waived by Buyer):
(a) The Seller shall have delivered or caused to be delivered a Transaction Request via Electronic Transmission in accordance with the procedures set forth in Section 2.03(b);
(b) The Seller shall have caused to be delivered to the Custodian a Mortgage Loan Schedule (as defined in the Custodial Agreement);
(c) The Seller shall have sufficient “Commitment Authority” with Ginnie Mae as of the requested Purchase Date to allow Ginnie Mae to attach its guaranty to the full amount of the related GNMA Securities to be backed by the related Certified Pool(s).
(d) No Default or Event of Default with respect to Seller shall have occurred and be continuing under the Repurchase Documents;
(e) The Certified Pools and the related Purchased Assets shall be free of all Liens on and as of the related Purchase Date, other than liens released in connection with the funding of the related Transaction. The Buyer acknowledges that during the pool processing period for each Certified Pool the Buyer’s interest in the related Certified Mortgage Loans will be relinquished in favor of the GNMA Lien, except with respect to any Mortgage Loans that subsequently become Non-Certified Loans. No such relinquishment shall affect the Buyer’s interest in the proceeds of such Mortgage Loans, including the resulting GNMA Security to be backed by such Mortgage Loans;
(f) The Buyer shall have received from the Seller by Electronic Transmission Ginnie Mae Form 11705 showing transfer status as “certified”, Ginnie Mae Form 11706 showing transfer status as initially “certified” and Ginnie Mae Form 11711B.
(g) The Buyer shall have received from the Custodian the related Collateral Confirm, Custodian Loan Transmission and Exception Report (each as defined in the Custodial Agreement);
(h) Both immediately prior to the Transaction (other than the Initial Transaction) and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and
(i) The Seller shall have provided such other ancillary documents to the Buyer as it may have reasonably requested, in form and substance reasonably acceptable to the Buyer.
Each Transaction Request delivered by the Seller hereunder shall constitute a certification by the Seller that all the conditions set forth in this Section 2.02 have been satisfied (both as of the date of such notice or request (if applicable) and as of the corresponding Purchase Date).
Section 2.03 Procedure for Requesting Transactions.
(a) Subject to the satisfaction of the conditions specified in Sections 2.01 and 2.02, the Seller, at its option, may, from time to time in accordance with the terms hereof and upon agreement by Buyer, sell to the Buyer a Certified Pool and the related Purchased Assets that it originated, acquired or is currently acquiring and the Buyer agrees to purchase such Certified Pool and the related Purchased Assets as agreed from time to time.
(b) The Seller shall request a Transaction by delivering or causing to be delivered to the Custodian and the Buyer via Electronic Transmission (i) a request in the form of Exhibit I attached hereto (a “Transaction Request”), and (ii) the related Collateral Confirm, Custodian Loan Transmission and Exception Report (each as defined in the Custodial Agreement), no later than 11:00 a.m., New York City time, two Business Days prior to the requested Purchase Date.
(c) On the requested Purchase Date (and subject to the terms and conditions set forth in this Agreement), the Buyer shall cause to be remitted via wire transfer the Purchase Price against delivery of the related Certified Pool, in immediately available funds, to the account designated by Seller.
(d) In no event shall a Transaction be entered into when any Default or Event of Default with respect to Seller has occurred and is continuing.
(e) The Seller shall not submit Transaction Requests more often than once each Business Day
Section 2.04 Confirmations; Transactions; Settlement Statements.
(a) In the event that the Buyer and Seller agree to enter into a Transaction, the Buyer shall promptly thereafter forward to the Seller a confirmation (a “Confirmation”) by Electronic Transmission setting forth with respect to each Transaction funded on such date the information described in the following sentence. The Confirmation shall describe (i) the Certified Pool and the related Purchased Assets (including loan numbers, pool numbers and CUSIPs) (ii) the Purchase Date, (which the Seller shall confirm is a Business Day for purposes of this Agreement) (iii) the Purchase Price, (iv) the Repurchase Date, (which the Seller shall confirm is a Business Day for purposes of this Agreement) (v) the Pricing Rate or Repurchase Price applicable to the Transaction, (vi) the account to which the related GNMA Securities are to be delivered, as required by Section 2.05 hereof and (vii) any additional terms or conditions of the Transaction not inconsistent with this Agreement.
(b) Each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between the Buyer and the Seller with respect to the Transaction to which the Confirmation relates, and the Seller’s written acceptance of the Confirmation shall constitute the Seller’s agreement to the terms of such Confirmation. It is the intention of the parties that each Confirmation shall not be separate from this Agreement but shall be, and hereby are, made a part of this Agreement.
(c) By [***], New York City time, on each Repurchase Date, the Buyer shall furnish the Seller with a Settlement Statement with respect to the related Certified Pools and GNMA Securities.
Section 2.05 Delivery of GNMA Securities. With respect to each Transaction, the Seller shall instruct Ginnie Mae to deliver all GNMA Securities issued with respect to the Certified Pool(s) relating to such Transaction to the account specified by the Buyer in the Confirmation related to such Transaction. The Seller shall note such account on the “deliver to”
field of the related GinnieNET submission. The Seller shall not change such account delivery instructions unless directed to do so by the Buyer.
Section 2.06 Delivery Failure; Mini Close-Out. If Seller fails to deliver to the Buyer by [***] New York City time, on the Business Day preceding the requested Purchase Date, the items listed in paragraphs (f) and (g) of Section 2.02 hereof with respect to a Transaction, then Buyer (in its sole discretion) may take any of the following actions: (i) if it has made any payment to Seller in connection with such Transaction, require Seller to repay the sum so paid; (ii) if Buyer has Forward Exposure to Seller in respect of the Transaction, require Seller to transfer cash in an amount equal to such Forward Exposure; and (iii) at any time while such delivery failure continues, terminate such Transaction by giving notice to Seller and electing to have the provisions of Section 10.01 of this Agreement apply as if an Event of Default had occurred with respect to Seller and such Transaction were the sole Transaction under the Agreement.
Section 2.07 Repurchase. Except as the parties otherwise agree, the Seller’s obligations to repurchase Purchased Assets are set forth in this Section 2.07 (the “Repurchase Obligations”).
(a) The Seller shall fully satisfy its obligation to repurchase each Certified Pool and the related Purchased Assets from the Buyer on the related Repurchase Date and the Final Repurchase Date by delivering all of the GNMA Securities relating to such Certified Pools to Buyer’s designated securities account referenced in Section 2.05 hereof. If the Seller is unable to deliver GNMA Securities relating to a Certified Pool because GNMA did not issue such GNMA Securities for any reason, the Seller shall remit the Repurchase Price in cash to the Buyer or its designee by wire transfer in accordance with Section 7.01 hereof or, if the Seller is unable to remit the full Repurchase Price by the time required by Section 7.01, then the Seller shall direct the Custodian to deliver all of the related Mortgage Loans, all Mortgage Files relating to such Certified Pool, and any other Purchased Asset relating to such Transaction to the Buyer or its designee. Each obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Asset.
(b) Seller hereby assigns to Buyer, and Buyer hereby accepts, Seller’s rights and obligations with respect to settling each purchase of GNMA Securities related to a Transaction hereunder with the ultimate purchasers of such GNMA Securities other than Buyer (including, without limitation, the right to collect the purchase price from and deliver GNMA Securities to such purchasers) on the related Pool Settlement Date. Any unpaid Repurchase Price due and owing to the Buyer on such Pool Settlement Date shall be netted against the settlement payments to be paid by the Buyer (either for its own account or as settlement agent with respect to purchase price payable by other purchasers of the GNMA Securities) to the Seller in connection with the issuance and sale of such GNMA Securities prior to the Buyer remitting any excess settlement payment amount over the amount of such Repurchase Price to the Seller. The Buyer shall remit any such excess amount to the Seller by the close of business on the related Pool Settlement Date.
(c) Subject to compliance with Section 6.06 hereof to the extent applicable, upon payment or other satisfaction (as provided in this Agreement) in full of the Repurchase Price with respect to a Certified Pool and the related Purchased Assets, then (i) all of Buyer’s Liens on and security interests in such Certified Pool and Purchased Assets shall be, and as of the time of such compliance (to the extent applicable) and payment or satisfaction, hereby is, automatically terminated and released, and such Certified Pool and the related Purchased Assets shall be, and as of the time of such compliance (to the extent applicable) and payment or satisfaction, hereby is, assigned to Seller, and Seller shall be deemed to have reacquired ownership of such Certified Pool and Purchased Assets free and clear of all Liens arising by or through the Buyer or any of its assignees, without any further action required on the part of any party, and (ii) Buyer shall, or shall direct Custodian to, release such Certified Pool and Purchased Assets (including, without limitation, but subject to Section 3.02 hereof, any Margin Excess being held by Buyer pursuant to Section 3.01 hereof) to Seller or its designee. The Buyer shall deliver all physical Purchased Assets in its possession or control to the Seller or its designee and transfer all electronic files on its systems to the Seller or its designee, in each case on the date of any such release or transfer. At any time and from time to time, upon the written request of the Seller, the Buyer will promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents and take such further action as the Seller may reasonably request for the purpose of obtaining or preserving the full benefits of this termination and release of Liens on and security interests in, and assignment back to Seller of, such Certified Pool(s) and Purchased Assets The Buyer also hereby authorizes the Seller to file any Uniform Commercial Code termination statement or amendment to the extent necessary to evidence or give effect to any such release, termination or re-assignment without the signature of the Buyer.
Section 2.08 Termination. On the Final Repurchase Date, termination of the Transactions will be effected upon payment of the Repurchase Price in the manner contemplated by Section 2.07 hereof. To the extent a net amount is owed to one party, the other party shall pay such amount to such party.
ARTICLE III
MARGIN MAINTENANCE; NETTING
Section 3.01 Margin Deficit and Margin Excess.
(a) If at any time the aggregate Market Value of all Certified Pools and the related Purchased Assets subject to all Transactions, together, without duplication, with any cash previously transferred by the Seller to the Buyer pursuant to this Section 3.01(a) and not yet returned pursuant to Section 3.01(b), is less than the aggregate Buyer’s Margin Amount for all such Transactions: (a “Margin Deficit”), then the Buyer may by notice (a “Margin Call”) to the Seller require the Seller to transfer to the Buyer cash in an amount equal to such Margin Deficit.
(b) If at any time the aggregate Market Value of all Certified Pools and the related Purchased Assets subject to all Transactions, together, without duplication, with any cash previously transferred by the Seller to the Buyer pursuant to Section 3.01(a) and not yet returned pursuant to this Section 3.01(b), exceeds the aggregate Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”), then the Seller may by notice (a “Seller’s Margin Call”) to the Buyer require Buyer to transfer to the Seller cash in an amount equal to such Margin Excess.
(c) If any notice is given by the Buyer or the Seller under subparagraph (a) or (b) of this Section 3.01 at or before the Margin Notice Deadline on any Business Day, the party receiving such notice shall transfer cash as provided in such subparagraph no later than [***] such Business Day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash no later than [***] on the next Business Day following such notice.
(d) Each party’s election not to deliver a Margin Call or Seller’s Margin Call at any time there is a Margin Deficit or Margin Excess, as the case may be, shall not waive the Margin Deficit or Margin Excess or in any way limit or impair such party’s right to deliver a Margin Call or Seller’s Margin Call at any time when the same or any other Margin Deficit or Margin Excess, as the case may be, exists. Each party’s rights under this Section 3.01 are in addition to and not in lieu of any other rights of such party under the Repurchase Documents or Requirements of Law.
(e) Notwithstanding anything to the contrary contained herein, the parties agree that the Purchase Price will not be increased or decreased by the amount of cash transferred pursuant to this Section 3.01 and that such cash will be deemed to have a Market Value equal to the U.S. dollar amount of such cash. Any cash so held by Buyer shall bear interest at the federal funds effective rate.
ARTICLE IV
INCOME PAYMENTS
Section 4.01 Income Payments. Where a particular Transaction’s term extends over a date on which Income is received with respect to the Purchased Assets related to that Transaction, 100% of such Income shall be deposited in the Collection Account within the time period required by Ginnie Mae. Pending payment by Seller of the applicable Repurchase Price, all such Income shall be held in trust for the Buyer, shall constitute the property of the Buyer and shall not be commingled with other property of the Seller or any affiliate of the Seller except as expressly permitted above.
Section 4.02 Application of Income. In the absence of the occurrence of an Event of Default by the Seller that is not waived by the Buyer in writing, during the term of the related Transaction (which term shall end upon payment by the Seller of the applicable Repurchase Price) the Seller shall retain all Income in trust for the Buyer, and the amount of any Income generated on account of any Certified Pool shall not be credited as an offset against the Repurchase Price for such Certified Pool. Upon the occurrence of an Event of Default by the
Seller that is not waived by the Buyer in writing, all Income on account of all Certified Pools shall be remitted to the Buyer as provided in Section 10.02(c)(ii) hereof.
ARTICLE V
TAXES
Section 5.01 Tax Treatment. Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal and relevant state and local income and franchise Taxes to treat each Transaction as indebtedness of the Seller that is secured by the Certified Pools and the related Purchased Assets and that, for such tax purposes, the Certified Pools and the related Purchased Assets are owned by the 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.
Section 5.02 Taxes.
(a) Payments Free of Taxes. In the event that any amount in respect of Taxes is required to be deducted or withheld from payments made, or deemed made, by the Seller hereunder pursuant to Applicable Law, Seller shall be under no obligation to gross-up such payment, indemnify Buyer or any other party in respect of such Taxes, or otherwise pay additional amounts in respect of such Taxes.
(b) Status of Buyer.
(i) Buyer or any assignee in respect of a Transaction that is entitled to an exemption from or reduction of withholding Tax with respect to payments made, or deemed made, by Seller in respect of such Transaction shall deliver to the Seller, at the time or times reasonably requested by the Seller, such properly completed and executed documentation reasonably requested by the Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Buyer or any assignee, if reasonably requested by the Seller, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Seller as will enable the Seller to determine whether such Buyer or assignee is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Buyer’s or assignee’s reasonable judgment such completion, execution or submission would subject such Buyer or assignee to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Buyer or assignee.
(ii) Without limiting the generality of the foregoing, in the event that the Seller is a U.S. Person, if a payment made, or deemed made, to a Buyer or an assignee hereunder would be subject to U.S. federal withholding Tax imposed by FATCA if such Buyer or assignee 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 or assignee shall deliver to the
Seller at the time or times prescribed by law and at such time or times reasonably requested by the 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 the Seller as may be necessary for the Seller to comply with its obligations under FATCA and to determine that such Buyer or assignee has complied with such Buyer’s or assignee’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (1), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(iii) The Buyer and each assignee agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Seller in writing of its legal inability to do so.
ARTICLE VI
SECURITY INTEREST
Section 6.01 Purchased Assets. Each Certified Pool subject to a Transaction, and which has not been repurchased by the Seller pursuant to the terms hereunder, shall contain the following items or types of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located which property, collectively, is hereinafter referred to as constituting the “Purchased Assets” relating solely to such Certified Pool: all Mortgage Files, including without limitation all promissory notes, all Mortgage Notes, all Mortgages, all Credit Files, all of the Seller’s rights in the related Eligible Mortgage Loans and the associated Servicing Rights, including any Servicing Rights under any servicing, sub-servicing or backup servicing agreements relating to such Eligible Mortgage Loans (to the extent assignable), all related Servicing Records and any other collateral pledged or otherwise relating to such Eligible Mortgage Loans, together with all files, documents, instruments, surveys, certificates, correspondence, appraisals, computer programs, computer storage media, accounting records and other books and records solely to the extent relating thereto, all mortgage guaranties and insurance (issued by governmental agencies or otherwise and to the extent assignable) and any mortgage insurance certificate or other document evidencing such mortgage guaranties or insurance (to the extent assignable) relating solely to such Eligible Mortgage Loans and all claims and payments thereunder, all other insurance policies and insurance proceeds relating to any such Eligible Mortgage Loans or the related Mortgaged Property, all Income relating to or constituting any and all of the foregoing, all of the Seller’s rights as the owner of the foregoing Purchased Asset under any other agreements or contracts relating to, constituting, or otherwise governing, any or all of the foregoing solely to the extent they relate to the foregoing Purchased Assets including the right to receive principal and interest payments, if applicable, with respect to the foregoing Purchased Assets and the right to enforce such payments, all take-out commitments entered with respect to the foregoing Purchased Assets or the related GNMA Securities, all contract rights and all “general intangibles”, “accounts”, “chattel paper”, “deposit accounts” and “investment property” as defined in the Uniform Commercial Code as in effect from time to time relating to or constituting any and all of the foregoing, and any and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing, including the related GNMA Securities.
Section 6.02 Security Interest. Although the Buyer and the Seller intend that, for other than tax and accounting purposes, the Transactions hereunder be sales to the Buyer of the Certified Pools and the related Purchased Assets and not loans from the Buyer to the Seller secured by the Certified Pools and the related Purchased Assets, in the event that a court or other forum recharacterizes the Transactions hereunder as, or otherwise finds or determines them to be, loans, in order to preserve the Buyer’s rights under this Agreement and as security for the performance by the Seller of all of the Seller’s obligations to the Buyer hereunder and the Transactions entered into hereunder, the Seller hereby assigns, pledges and grants to the Buyer a first priority security interest in all of its right, title and interest in, to and under the Certified Pools and the related Purchased Assets (other than with respect to Certified Mortgage Loans subject to any GNMA Lien) to secure the Repurchase Obligations, including, without limitation, the repayment of all amounts owing to the Buyer hereunder. The Seller agrees to mark its computer records and tapes to evidence the interests granted to the Buyer hereunder. All Certified Pools and the related Purchased Assets shall secure the payment of all obligations of the Seller now or hereafter existing under this Agreement, including, without limitation, the Seller’s obligation to repurchase Certified Pools and the related Purchased Assets, or if such obligation is so recharacterized as or found or otherwise determined to be a loan by a court or other forum, to repay such loan, for the Repurchase Price and to pay any and all other amounts owing to the Buyer hereunder.
Section 6.03 [Reserved].
Section 6.04 Further Documentation. At any time and from time to time, upon the written request of the Buyer, the Seller will promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents and take such further action as the Buyer may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the Liens created hereby. The Seller also hereby authorizes the Buyer to file any such financing or continuation statement without the signature of the Seller to the extent permitted by Applicable Law. A carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement for filing in any jurisdiction.
Section 6.05 Proceeds. Subject to Section 4.02, all Income payments shall be deposited in the Collection Account as set forth in Section 4.01 hereof.
(a) All proceeds of Certified Pools and the related Purchased Assets received by the Seller consisting of cash, checks and other Cash Equivalents shall be remitted to the Collection Account within the time period required by Ginnie Mae) in the exact form received by the Seller or its Sub-Servicers (duly endorsed to the Buyer). For purposes hereof, proceeds shall include, but not be limited to, all principal and interest payments, all prepayments and payoffs, insurance claims, condemnation awards, sale proceeds, real estate owned rents and any other income and all other amounts received with respect to the Purchased Assets.
Section 6.06 Conditional Release of Eligible Mortgage Loans. Upon Seller’s submission to GinnieNET of any Eligible Mortgage Loans subject to a Transaction for purposes of issuing GNMA Securities, such Eligible Mortgage Loans and related Purchased Assets shall automatically and simultaneously be deemed released by the Buyer, and are, as of such submission, hereby released, and shall no longer be subject to any Lien on such Eligible Mortgage Loans and related Purchased Assets created by this Agreement, any such Lien shall be deemed released, and, as of such submission, is hereby released, and the Seller shall, including for purposes of the GinnieNET submission, be deemed to have reacquired ownership of such Eligible Mortgage Loans and related Purchased Assets; provided, however, that if the Buyer has not, within two (2) Business Days of such submission, received notice from the Seller that the related GNMA Securities have been posted to Ginnie Mae’s “central registry” in accordance with the pool processing steps outlined in Ginnie Mae’s “All Participants Bulletin 10-10”, the release and transfer of ownership of such Eligible Mortgage Loans and related Purchased Assets contemplated under this Section 6.06 shall no longer be effective and shall be deemed null and void. In order to effectuate a release and transfer of ownership under this Section 6.06, the Seller must provide prior written notice to the Buyer of the submission of each Eligible Mortgage Loans to GinnieNET for purposes of issuing GNMA Securities. The Seller shall promptly forward to the Buyer each notice it received from Ginnie Mae or its Pool Processing Agent with respect to the posting of each Certified Pool to Ginnie Mae’s “central registry”.
Section 6.07 Confirmation of Intended Sale/Security Interest. It is the intention of the parties hereto that:
(a) The provisions of this Agreement are effective either to constitute a sale of the Certified Pools and the related Purchased Assets to the Buyer or, as provided in Section 6.02, to create in favor of the Buyer a valid security interest in all right, title and interest of the Seller in, to and under the Certified Pools and the related Purchased Assets.
(b) Upon receipt by the Custodian of each Mortgage Note, endorsed in blank in accordance with the provisions of the Custodial Agreement, either a purchase shall have been completed by the Buyer of each Mortgage Note or, as provided in Section 6.02, the Buyer shall have a valid and fully perfected first priority security interest in the applicable Mortgage Note and in the Seller’s interest in the related Mortgaged Property.
(c) Upon the filing of financing statements on Form UCC-1 naming the Buyer or its assigns as “Secured Party”, the Seller as a “Debtor” and describing the Purchased Assets, with the Secretary of State of the State of New Jersey, the security interests granted hereunder in the Certified Pools and the related Purchased Assets will constitute fully perfected security interests under the Uniform Commercial Code in all right, title and interest of the Seller in, to and under such Certified Pools and the related Purchased Assets, which can be perfected by filing under the Uniform Commercial Code.
(d) Each Mortgage Loan underlying Purchased Assets is an Eligible Mortgage Loan and the information set forth in the Mortgage Loan Schedule and all other amounts and information in respect of such Mortgage Loan prepared by Seller in connection therewith with respect to the Mortgage Loan is true and correct in all material respects and, to the knowledge of a Responsible Officer of the Seller, undisputed by the Mortgagor thereon or any guarantor thereof.
ARTICLE VII
PAYMENT, TRANSFER AND CUSTODY
Section 7.01 Payments to the Buyer. Unless otherwise mutually agreed in writing all transfers of funds to be made by the Seller hereunder shall be made in Dollars, in immediately available funds, not later than [***], New York City time on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been made on the next succeeding Business Day). Notwithstanding the foregoing, but subject to Section 2.07 hereof, the delivery of GNMA Securities to the Custodian after the occurrence of a GNMA Securitization of a Certified Pool with respect to any Transaction shall constitute full and complete payment of the Repurchase Price by the Seller to the Buyer; or if such issuance does not occur for any reason or does not occur with respect to the entire Transaction, the return of the Certified Pool and the related Purchased Assets and underlying Mortgage Loans (or any portion thereof not subject to the GNMA Securitization) in accordance with Section 2.07 shall constitute complete payment of the Repurchase Price.
Section 7.02 Ownership of Purchased Assets.
(a) On the Purchase Date for each Transaction, other than for tax and accounting purposes, ownership of the applicable Certified Pool and the related Purchased Assets shall be transferred to the Buyer or its designee against the simultaneous transfer of the Purchase Price. Upon satisfaction of the requirements of Sections 2.03 and 2.04 hereof with respect to each Transaction, the Seller hereby sells, transfers, conveys and assigns to the Buyer or its designee (including the Custodian) all the right, title and interest of the Seller in and to the applicable Certified Pool and the related Purchased Assets together with all right, title and interest in and to the proceeds thereof.
(b) In connection with such sale, transfer, conveyance and assignment, in accordance with the requirements set forth in the Custodial Agreement, the Seller shall deliver or cause to be delivered and released to the Buyer or its designee (including the Custodian) the Mortgage File and the other documents identified in the Custodial Agreement.
(c) Any Mortgage Files and Credit Files not delivered to the Buyer or its designee (including the Custodian) are and shall be held in trust by the Seller or its designee for the benefit of the Buyer as the owner thereof. The Seller or its designee shall maintain a copy of the Mortgage File and the originals of the Mortgage File not delivered to the Buyer or its designee (including the Custodian). The possession of any Mortgage File and/or any Credit File by the Seller or its designee is at the will of the Buyer for the sole purpose of servicing the related Eligible Mortgage Loans in accordance with the terms of this Agreement, and such retention and possession by the Seller or its designee is in a custodial capacity only. Each Mortgage File and each Credit File retained or held by the Seller or its designee shall be segregated on the Seller’s books and records from the other assets of the Seller or its designee and the books and records of the Seller shall be marked appropriately to reflect clearly the sale of the related Purchased Asset to the Buyer. The Seller or its designee shall release its custody of any
Mortgage File and/or any Credit File only in accordance with written instructions from the Buyer, unless such release is required as incidental to the servicing of the related Eligible Mortgage Loans in connection with a repurchase of any Purchased Asset by the Seller.
ARTICLE VIII
SELLER REPRESENTATIONS
The Seller represents and warrants to the Buyer that as of each Purchase Date for the purchase of any Certified Pools and the related Purchased Assets by the Buyer from the Seller and as of the Closing Date of this Agreement:
Section 8.01 Solvency. Neither the Repurchase Documents nor any Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of the Seller’s creditors. The transfer of the Certified Pools and the related Purchased Assets subject hereto and the obligation to repurchase such Certified Pools and the related Purchased Assets is not undertaken with the intent to hinder, delay or defraud any of the Seller’s creditors. The Seller is (i) not insolvent within the meaning of Bankruptcy Code Section 101(32) or any successor provision thereof and the transfer and sale of the Certified Pools and the related Purchased Assets pursuant hereto and the obligation to repurchase such Certified Pools and the related Purchased Assets will not cause the Seller to become insolvent, (ii) will not result in the Seller having unreasonably small capital as determined by Buyer, and (iii) will not result in debts that would be beyond the Seller’s ability to pay as the same mature. The Seller received reasonably equivalent value in exchange for the transfer and sale of the Certified Pools and the related Purchased Assets.
Section 8.02 Ability to Perform. The Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the Repurchase Documents applicable to it to which it is a party.
Section 8.03 No Defaults. No Event of Default with respect to Seller has occurred and is continuing hereunder.
Section 8.04 Legal Name; Existence. The legal name of the Seller is Home Point Financial Corporation and the Seller (a) is a New Jersey corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, except where the lack of such good standing would not be reasonably likely to have a Material Adverse Effect (b) has all requisite corporation power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; and (c) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where the lack of such qualifications would not be reasonably likely to have a Material Adverse Effect.
Section 8.05 Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, to the knowledge of the Responsible Officer of the Seller, any of
the foregoing which are pending or threatened in writing) or other legal or arbitral proceedings (individually and collectively, whether pending or threatened, “Disputes”) affecting the Seller or any of its Property before any Governmental Authority that question or challenge the validity or enforceability of any of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby which requires filing with Ginnie Mae, HUD, the FHA, or the VA.
Section 8.06 No Breach. Neither (a) the execution and delivery of the Repurchase Documents nor (b) the consummation of the transactions therein contemplated in compliance with the terms and provisions thereof will violate the constitutional documents of the Seller, or any law, rule or regulation, or any order, writ, injunction or decree of any Governmental Authority applicable to Seller, or any material agreement or instrument to which the Seller is a party or by which any of its Property is bound.
Section 8.07 Action. The Seller has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under each of the Repurchase Documents; the execution, delivery and performance by the Seller of each of the Repurchase Documents have been duly authorized by all necessary action on its part; and each Repurchase Document has been duly and validly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject as to enforceability to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Section 8.08 Approvals. Except to the extent previously obtained, no authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by the Seller of the Repurchase Documents or for the legality, validity or enforceability thereof, including, without limitation, any approvals or consents from the Office of Thrift Supervision, the National Credit Union Administration, the Federal Deposit Insurance Corporation, HUD, FHA, VA, GNMA, RD, PIH or other federal agency, as applicable, except for filings and recordings in respect of the Liens created pursuant to the Repurchase Documents.
Section 8.09 Margin Regulations. Neither any Transaction hereunder, nor the use of the proceeds thereof, will violate the provisions of Regulation T, U or X.
Section 8.10 Investment Company Act. The Seller is not an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.
Section 8.11 Purchased Assets; No Liens.
(a) The Seller has not assigned, pledged, or otherwise conveyed or encumbered any Certified Pool or any Purchased Asset to any other Person, and immediately prior to the sale of such Certified Pool or any Purchased Asset to the Buyer, the Seller was the sole owner of such Purchased Asset or such other Purchased Items and had good and marketable title thereto, free and clear of all Liens known to the Seller, in each case except for Liens to be released in connection with the sale to the Buyer
hereunder. The Buyer acknowledges that during the pool processing period for each Certified Pool the Buyer’s interest in the related Mortgage Loans will be relinquished in favor of the GNMA Lien, except with respect to any Mortgage Loans that subsequently become Non-Certified Loans. No such relinquishment shall affect the Buyer’s interest in the proceeds of such Mortgage Loans, including the resulting GNMA Security to be backed by such Mortgage Loans.
(b) All information in respect of such Mortgage Loan prepared by the Seller and delivered to the Buyer in connection therewith with respect to the Mortgage Loan is true and correct in all material respects.
Section 8.12 Location of Chief Executive Offices. The Seller’s chief executive offices are located at 2211 Old Earhart Road, Suite 250, Ann Arbor, MI 48105.
Section 8.13 Location of Books and Records. The location where the Seller keeps its physical books and records, including all computer tapes and records related to the Purchased Assets but excluding the Mortgage Files, is its chief executive office set forth in Section 8.12.
Section 8.14 Reserved.
Section 8.15 Anti-Money Laundering Law. The Seller has complied in all material respects with all applicable anti-money laundering laws and regulations. To Seller’s knowledge, no Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the “Executive Order”) or the regulations promulgated by the Office of Foreign Assets Control of the United States Department of the Treasury (the “OFAC Regulations”) or in violation of the Executive Order or the OFAC Regulations, and, to the knowledge of a Responsible Officer of the Seller, no Mortgagor is subject to the provisions of such Executive Order or the OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC Regulations.
Section 8.16 Agency Approvals. The Seller is approved by FHA, VA and RD as an approved mortgagee, and once so approved by PIH shall remain as an approved mortgagee by PIH, by HUD as an approved servicer and by GNMA as a Ginnie Mae-approved issuer, in each case in good standing (such collective approvals and conditions, “Agency Approvals”). No event has occurred which would make the Seller unable to comply with the eligibility requirements for maintaining all such Agency Approvals, nor has the Seller received notice from any of such agencies that any Agency Approval is at material risk of withdrawal. Should the Seller, for any reason, cease to possess all such Agency Approvals, or should receive any such notification the Seller shall so notify the Buyer immediately in writing. Notwithstanding the preceding sentence, the Seller shall take all necessary action to maintain all of its Agency Approvals at all times during the term of this Agreement.
Section 8.17 Information Furnished. All information or data furnished by, or on behalf of, the Seller to the Buyer regarding the Certified Pools or Purchased Assets is true and correct in all material respects.
Section 8.18 Eligible Mortgage Loan. Each Mortgage Loan is an Eligible Mortgage Loan.
ARTICLE IX
COVENANTS OF THE SELLER
As of each Purchase Date for the purchase of any Certified Pool and the related Purchased Assets by the Buyer from the Seller and as of the date of this Agreement and any Transaction hereunder and at all times while the Repurchase Documents and any Transaction hereunder are in full force and effect:, the Seller covenants that:
Section 9.01 Litigation. To the extent not otherwise prohibited by Applicable Law or any Governmental Authority from providing, the Seller will promptly give to the Buyer notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or, to the knowledge of a Responsible Officer of the Seller, threatened in writing) or other legal or arbitral proceedings affecting the Seller or its Property before any Governmental Authority that questions or challenges the validity or enforceability of any of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby or thereby.
Section 9.02 Existence, etc. The Seller will:
(a) Preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business except where failure to do so would not be reasonably likely to result in a Material Adverse Effect; and
(b) Not (i) move its chief executive office from the address referred to in Section 8.12 or (ii) change its name or jurisdiction of organization, unless it shall have provided the Buyer [***] prior written notice of such change and shall have first taken all action required by the Buyer for the purpose of perfecting or protecting the lien and security interest of the Buyer established hereunder.
Section 9.03 Notices and Reports. To the extent not otherwise prohibited by Applicable Law or any Governmental Authority from providing, the Seller shall give notice to the Buyer:
(a) Promptly upon receipt of actual notice or actual knowledge by a Responsible Officer of Seller of the occurrence of any Default or Event of Default with respect to Seller;
(b) Promptly upon receipt of actual notice or actual knowledge by a Responsible Officer of Seller that a material portion of the Mortgaged Property underlying the related Purchased Asset has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as to affect materially and adversely the Market Value of the Purchased Assets taken as a whole; and
(c) Promptly upon receipt of actual notice or actual knowledge by a Responsible Officer of Seller of (y) any default related to any Purchased Asset, (y) any Lien or security interest on, or claim asserted against, (other than any GNMA Lien) any
Purchased Asset or (z) any event or change in circumstances which could reasonably be expected to have a Material Adverse Effect on Seller.
Section 9.04 Limitation on Liens. Immediately upon notice of a Lien (other than any GNMA Lien) or any circumstance which would be reasonably likely to give rise to a Lien (other than any GNMA Lien) on any Certified Pool or Purchased Asset, at Buyer’s expense, the Seller will defend or cause to be defended such Certified Pool or Purchased Asset, as applicable, against, and will permit the Buyer to take or cause to be taken such other action as is necessary to remove, any such Lien, security interest or claim on or to such Certified Pool or Purchased Asset, as applicable, (other than any security interest created or permitted under the Repurchase Documents), and the Seller will defend or cause to be defended the right, title and interest of the Buyer in and to any of the Certified Pools or Purchased Assets and its own right, title and interest in and to any interest in the Certified Pools or Purchased Assets retained by the Seller against the interests, claims and demands of all persons whomsoever, other than the interest of Ginnie Mae in Certified Mortgage Loans subject to any GNMA Lien.
Section 9.05 MERS. The Seller shall comply, and shall cause each Sub-Servicer to comply, in all material respects with the rules and procedures of MERS in connection with the servicing of any Eligible Mortgage Loans that are subject to a Transaction and registered with MERS.
Section 9.06 Preservation of Security Interest. The Seller hereby consents to the preparation and filing of UCC-1 financing statements by the Buyer and its successors and assigns naming the Seller as debtor and the Certified Pools and the related Purchased Assets as collateral, and consents to the preparation and filing of such continuation statements, all in such manner and in such places as may be required by law or determined to be necessary by the Buyer and its successors and assigns in its reasonable discretion to fully to preserve, maintain, and protect the respective right, title and interest of the Buyer in the Purchased Assets.
Section 9.07 Compliance with Law. The Seller will comply, in all material respects, with all laws, acts, rules, requisitions, orders, decrees and directions of any Governmental Authority applicable to the Certified Pools and the related Purchased Assets or any part thereof; provided, however, that the Seller may contest any law, act, regulation, order, decree or direction in any reasonable manner which shall not materially and adversely affect the rights or interests of the Buyer in the Mortgage Loans.
Section 9.08 Obligations with Respect to Purchased Assets. The Seller will duly fulfill all obligations on its respective part to be fulfilled under this Agreement or in connection with each Certified Pool and each Purchased Asset, and will do nothing to impair in any material respect the rights of the Buyer in any of the Certified Pools or Purchased Assets.
Section 9.09 Conveyance of Certified Pools; Security Interests. Except for the Liens of Ginnie Mae that will attach to the Mortgage Loans in Certified Pools during the pool processing period and for long as such Mortgage Loans do not thereafter become Non-Certified Loans, and the transfers, conveyances and Liens under or permitted in this Agreement or any other Repurchase Document, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, or incur any Lien, on any Certified Pool subject to a Transaction, any
Purchased Asset, or any interest therein except to the Buyer as set forth herein, and the Seller shall (at Buyer’s cost and expense) defend (a) the right, title, and interest of the Buyer and its successors and assigns in, to, and under the Certified Pools and the related Purchased Assets and (b) its own right, title and interest in and to any interests in any Purchased Assets retained by the Seller, against all claims of third parties claiming, through or under the Seller; provided, however, that nothing in this Section shall prevent or be deemed to prohibit the Seller from suffering to exist upon any of the Purchased Assets any Liens for municipal or other local Taxes if such Taxes shall not at the time be due and payable or if the Seller shall concurrently be contesting the validity thereof in good faith by appropriate proceedings and shall have set aside on its books adequate reserves with respect thereto and such contests pose no risk of forfeiture.
Section 9.10 Further Assurances. The Seller will make, execute or endorse, acknowledge and file or deliver to the Buyer and the Custodian from time to time such schedules, confirmatory assignments, conveyances, transfers, endorsements, powers of attorney, certificates, reports and other assurances or instruments and take such further steps relating to the Certified Pools and the related Purchased Assets and other rights covered by this Agreement, as the Buyer or the Custodian may reasonably request and reasonably require to effectuate the Transactions contemplated herein.
Section 9.11 Taxes. The Buyer shall promptly pay all applicable Taxes required to be paid in connection with the assignment of the Certified Pools and the related Purchased Assets and Seller’s ownership of the Purchased Assets (expressly excluding any income or other Taxes attributable to the income received by the Seller from the Transactions) and acknowledges that the Seller shall have no responsibility with respect thereto.
Section 9.12 Servicing.
(a) The Buyer agrees to appoint the Seller to service each Eligible Mortgage Loan that is the subject of a Transaction on behalf of the Buyer for a period of 30 days commencing on the related Purchase Date, which appointment will be automatically be renewed, without further action, upon the expiration of such 30 day period unless Seller receives written notice from Buyer prior to the expiration of such 30 day period that such appointment is terminated by or on behalf of the Buyer.
(b) For so long as any Eligible Mortgage Loan is subject to a Transaction, the Seller shall service such Eligible Mortgage Loan on behalf of the Buyer, either directly or through a Ginnie Mae approved sub-servicer (the “Sub-Servicer”). The Seller shall service, either directly or through a Sub-Servicer, all such Eligible Mortgage Loans in accordance with accepted servicing practices of prudent mortgage loan servicers and in accordance with FHA or VA (as applicable) and GNMA requirements and shall not resign or transfer the servicing of any such Eligible Mortgage Loans without the prior written consent of Buyer. Such standard of care shall not be lower than that which the Seller customarily employs and exercises in servicing and administering mortgage loans similar to the Eligible Mortgage Loans for its own account. The Seller shall deposit, and shall cause each Sub-Servicer to deposit, all Income with respect to Eligible Mortgage Loans that are the subject of a Transaction received by the Seller or such Sub-Servicer, as
applicable, directly into the Collection Account within the time period required by Ginnie Mae.
Section 9.13 Custodian. The Seller shall give the Buyer at least ten (10) Business Days’ prior notice if the Seller intends to appoint an entity other than the Custodian as a custodian of any Mortgage Loans or as a “pool processing agent” for the Seller’s Ginnie Mae program.
Section 9.14 Reimbursement of Ongoing Expenses. From and after the date of the initial Transaction, the Seller shall reimburse the Buyer for all Ongoing Expenses as the same are incurred by the Buyer within thirty (30) days of the receipt of invoices therefor.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. If any of the following events (each, an “Event of Default”) shall occur with respect to the Seller, then the Buyer shall have the rights set forth in Section 10.02:
(a) Any representation, warranty or certification made or deemed made herein or in any other Repurchase Document by the Seller or any certificate furnished to the Buyer pursuant to the provisions hereof or thereof or any information with respect to the Purchased Assets furnished in writing by or on behalf of the Seller shall prove to have been false or misleading in any material respect as of the time made or furnished; provided, that if any Loan Level Representation when made was false or misleading in any material respect, then such false or misleading Loan Level Representation will not cause a Default or Event of Default hereunder unless such false or misleading Loan Level Representation materially and adversely affects the Market Value of a material portion of the Purchased Assets was known at the time such Loan Level Representation was made to have been false or misleading; or
(b) The Seller shall default in the payment of, or shall admit its inability or intention not to pay, any Repurchase Price due, or any amount under Article II or Article IV or any Margin Deficit due under Article III when such amount was due and payable (whether at stated maturity, upon acceleration or at mandatory or optional prepayment); or
(c) The failure of the Seller to deliver the applicable Certified Pool and the related Purchased Assets set forth in any Confirmation; or
(d) The Seller shall change the account delivery instructions on GinnieNET for any GNMA Securities, as described in Section 2.05, except upon a direction from the Buyer to do so; or
(e) The Seller or any Sub-Servicer shall fail to deposit into the Collection Account any Income with respect to a Certified Pool or related Purchased Assets held by the Seller within the time period required by Ginnie Mae; or
(f) The Seller shall fail to comply with or admits in writing its inability or intention not to comply with any of the requirements of this Agreement; the Seller shall otherwise fail to observe or perform any other covenant or agreement contained in this Agreement or any other Repurchase Document and not otherwise specifically referenced in this Section 10.01 and, unless the Buyer reasonably determines that the situation is not susceptible to cure, such failure shall remain uncured for a period of [***] after Buyer provides notice thereof to Seller; or
(g) An Act of Insolvency shall occur with respect to the Seller; or
(h) The Seller fails to maintain its status as an FHA, RD, PIH (once PIH approval has been received) or VA-approved mortgagee and a Ginnie Mae or HUD-approved seller and servicer or if any such agency will no longer accept deliveries of, insure or guaranty, as applicable, Mortgage Loans from the Seller; or
(i) Any Repurchase Document shall for whatever reason be terminated (other than by the Buyer) without the prior signed written consent of the Buyer or cease to be in full force and effect, or the enforceability thereof shall be contested in writing by the Seller; or
(j) The Seller shall grant, or suffer to exist, any Lien on any Purchased Asset (except any Lien in favor of the Buyer or its successors or assigns or otherwise permitted or contemplated by any Repurchase Document and except any GNMA Lien on Certified Mortgages), or this Agreement does not constitute a “repurchase agreement” as such term is defined under the Bankruptcy Code or the Liens contemplated hereby in favor of the Buyer or its successors or assigns shall cease or fail to be first priority perfected Liens on any Purchased Assets (other than on any Certified Mortgages subject to any GNMA Lien) in favor of the Buyer or its successors or assigns or shall be Liens in favor of any Person other than the Buyer or its successors or assigns due to the actions of the Seller or the failure of the Seller to comply with Section 9.02(b) hereof; or
(k) The Seller shall commit any fraud in connection with this facility; or
(l) The occurrence of an event of default or any similar event with respect to the Seller or any of its Affiliates under any Global Master Repurchase Agreement, or similar master agreement with the Buyer or any of the Buyer’s Affiliates; or
(m) The Buyer shall have reasonably determined that a Material Adverse Effect shall have occurred.
Section 10.02 Remedies Upon Default. Upon the occurrence and during the continuation of an Event of Default, the following rights and remedies shall be available to the Buyer:
(a) The Buyer shall have the set-off rights provided to it pursuant to Section 11.18.
(b) At the option of the Buyer, exercised by written notice to the Seller, which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of the event specified in Section 10.01(g), the Final Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur and the Buyer shall have no further obligation to purchase offered Purchased Assets hereunder.
(c) If the Buyer exercises its option described in paragraph (b) above, or such option is deemed to have been exercised:
(i) The Seller’s obligations in such Transactions to repurchase all Certified Pools and all Purchased Assets, at the Repurchase Price therefor on the Final Repurchase Date, (1) shall thereupon become immediately due and payable, (2) all Income on Certified Pools and Purchased Assets paid after such exercise or deemed exercise, shall be deposited in the Collection Account and applied to the aggregate unpaid Repurchase Price and any other amounts owed by the Seller hereunder and (3) the Seller shall immediately deliver to the Buyer or its designee any Certified Pools and the related Purchased Assets subject to such Transactions then in Seller’s possession or control provided that if the Mortgage Loans have been delivered to GNMA pursuant to Section 6.06 hereof, the Seller shall deliver the GNMA Securities upon issuance to the Buyer or its designee; and
(ii) All Income deposited in the Collection Account pursuant to Section 4.01 shall be applied to the aggregate unpaid Repurchase Price owed by the Seller.
(d) Upon the occurrence of one or more Events of Default, the Buyer shall have the right to obtain physical possession of the Servicing Records, Mortgage Files, Credit Files and all other files of the Seller relating to the Purchased Assets and all documents relating to the Purchased Assets which are then or may thereafter come in to the possession of the Seller or any third party acting for the Seller and the Seller shall deliver to the Buyer such assignments as the Buyer shall request and the Buyer shall have the right (subject to all rights of Ginnie Mae, FHA, RD, PIH and VA) to appoint any Person to service the Eligible Mortgage Loans. The Buyer shall have the right to be identified as the “Investor” and “Warehouse Gestation Lender” on the MERS® System and to put in place an Electronic Tracking Agreement covering the Mortgage Loans. The Buyer shall be entitled (i) to invoke any and all rights it may have under any Repurchase Document and (ii) to specific performance of all agreements of the Seller contained in the Repurchase Documents.
(e) To the extent the Seller fails to perform any of its other obligations under Section 10.02(c) within one (1) Business Day of the Buyer’s declaration of an Event of Default, the Buyer may (i) immediately sell, on a servicing-released basis, without demand or further notice of any kind, at a public or private sale and at such price or
prices as the Buyer may deem satisfactory, any or all of the Certified Pools and the related Purchased Assets and apply the proceeds thereof to the aggregate unpaid Repurchase Price and any other amounts owing by the Seller under the Repurchase Documents; (ii) in its sole discretion elect, in lieu of selling all or a portion of such Certified Pools and the related Purchased Assets, to retain such Certified Pools and the related Purchased Assets and give the Seller credit for same in an amount equal to the Market Value of the related Certified Pools and related Purchased Assets against the aggregate unpaid Repurchase Price for such Certified Pools and related Purchased Assets and any other amounts owing by such Seller hereunder; or (iii) take any other actions or remedies available to a secured creditor. If the Seller has failed to perform its obligations under Section 10.02(c), the Seller shall remain liable to the Buyer for any amounts that remain owing to the Buyer following a sale or credit under the preceding sentence.
(f) Neither the Buyer nor any of its Affiliates shall incur any liability as a result of the sale of any of the Certified Pools and the related Purchased Assets at any private sale except arising out of its gross negligence or willful misconduct. The Seller hereby waives (i) any claims against the Buyer or any of its Affiliates arising because the price at which the Purchased Assets may have been sold at a private sale was less than the price that might have been obtained at a public sale or was less than the aggregate amount of the Repurchase Obligations even if Buyer accepts the first offer received and does not offer the Certified Pools and the related Purchased Assets to more than one offeree and (ii) all rights of redemption, stay, or appraisal which it has under any rule of law or (to the extent permitted) statute whether now existing or hereafter adopted.
(g) The Seller shall be liable to the Buyer for (i) the amount of all actual expenses, including reasonable documented legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default, (ii) all actual costs incurred in connection with covering transactions or hedging transactions entered into by Buyer in connection with the occurrence of an Event of Default, and (iii) any other actual loss, damage, cost or expense arising or resulting from the occurrence of an Event of Default.
(h) The Seller acknowledges and agrees that (i) in the absence of a generally recognized source for prices or bid or offer quotations for any Certified Pools and/or any Purchased Assets, the Buyer may establish the source therefor in its sole discretion and (ii) all prices, bids and offers shall be determined together with accrued Income. The Seller recognizes that it may not be possible to purchase or sell all of the Certified Pools and/or any 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 Certified Pools and/or any Purchased Assets may not be liquid at such time (including illiquidity resulting from the Event of Default). In view of the nature of the Certified Pools and/or any Purchased Assets, the Seller agrees that liquidation of a Transaction or the 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, the Buyer may elect, in its sole discretion, the time and manner of liquidating any Certified Pools and/or any Purchased Assets, and nothing contained herein shall (A) obligate the Buyer to liquidate any Certified Pools and/or any Purchased
Assets on the occurrence and during the continuation of an Event of Default or to liquidate all of the Purchased Assets in the same manner or on the same Business Day or (B) constitute a waiver of any right or remedy of Buyer. The Buyer may exercise one or more of the remedies available hereunder immediately upon the occurrence of an Event of Default and at any time thereafter without notice to the Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which the Buyer may have.
(i) The Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and the Seller hereby expressly waives any defenses the Seller might otherwise have to require Buyer to enforce its rights by judicial process. The Seller also waives any defense (other than a defense of payment or performance) the Seller might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Purchased Assets, or from any other election of remedies. The 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.
(j) Without limiting the rights of the Buyer hereto to pursue all other legal and equitable rights available to the Buyer for the Seller failure to perform its obligations under this Agreement, the Seller acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and the Buyer shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit the Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages.
(k) The Buyer shall have, in addition to its rights and remedies hereunder, all of the rights and remedies provided by applicable federal, state, foreign, and local laws (including, without limitation, if the Transactions are recharacterized as or otherwise found or determined by a court or other forum to be loans, the rights and remedies of a secured party under the UCC of the State of New York, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), in equity, and under any other agreement between Buyer and the Seller. Without limiting the generality of the foregoing, the Buyer shall be entitled to set off the proceeds of the liquidation of the Certified Pools and/or the Purchased Assets against all of the Seller’s obligations to the Buyer, whether or not such obligations are then due, without prejudice to the Buyer’s right to recover any deficiency.
Section 10.03 Remedies Cumulative. The Buyer may exercise one or more of the remedies available to the Buyer immediately upon the occurrence of an Event of Default and, except to the extent otherwise provided in paragraph (b) of Section 10.02, at any time thereafter without notice to the Seller. All rights and remedies of the Buyer arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which the Buyer may have.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Indemnification. Except as otherwise set forth herein to the contrary, the Seller agrees to hold the Buyer and its Affiliates and their present and former respective officers, directors, employees, agents, advisors and other representatives (each, an “Indemnified Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind, including counsel fees and disbursements, but expressly excluding Taxes (collectively, “Costs”) which may be imposed on, incurred by or asserted against such Indemnified Party, relating to or arising out of a third-party claim involving this Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby in all cases resulting from a breach of any representation, covenant or obligation of the Seller hereunder; provided that such indemnity shall not, as to any Indemnified Party, be available to the extent that such Costs have resulted from the gross negligence or willful misconduct of such Indemnified Party. The Seller shall pay to the Indemnified Parties any indemnity amounts within thirty (30) days of Seller’s receipt of an invoice therefor, containing reasonable details of the related costs.
Section 11.02 Single Agreement. The Buyer and the Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of the Buyer and the Seller agrees (a) 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, (b) that each party hereto shall be entitled to set off claims and apply property held by it in respect of any Transaction against obligations owing to such party in respect of any other Transaction hereunder, in each case, in accordance with Section 11.18; (c) that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (d) to promptly provide notice to the other after any such set-off or application.
Section 11.03 Notices and Other Communications. Except as otherwise expressly permitted by this Agreement and in respect of notices of default, all notices, requests and other communications provided for herein and the other Repurchase Documents (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made orally or in writing (including without limitation by email, telex or telecopy) delivered to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when successfully transmitted by e-mail or telecopy or personally delivered or, in the case of a mailed
notice, upon receipt. Notices, demands and requests made orally shall be promptly confirmed in writing by other communications.
Section 11.04 Entire Agreement; Severability. This Agreement together with the other Repurchase Documents constitute the entire understanding between the Buyer and the Seller with respect to the subject matter it covers and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Assets. By acceptance of this Agreement, the Buyer and the Seller acknowledge that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
Section 11.05 Assignability and Hypothecation.
(a) The rights and obligations of the Seller under this Agreement and under any Transaction shall not be assigned to any other Person without the prior written consent of the Buyer. Subject to Section 11.05(b) below, the rights and obligations of the Buyer under this Agreement and under any Transaction shall not be assigned to any other Person without the prior written consent of the Seller, provided that no such consent shall be required following the occurrence of an Event of Default hereunder that is not waived by the Buyer. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. Subject to Section 11.05(b) below, nothing in this Agreement express or implied, shall give to any Person, other than the parties to this Agreement and their successors hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Agreement.
(b) The Buyer shall have free and unrestricted use of all Certified Pools and the related Purchased Assets. Nothing in this Agreement shall preclude the Buyer from engaging in assignments, participations, repurchase transactions, pledges, repledges, transfers, hypothecations or rehypothecations with respect to the Certified Pools and the related Purchased Assets (each, a “Related Transaction”). Notwithstanding the foregoing, nothing in this Section 11.05 or in this Agreement shall relieve the Buyer of its obligations to return the specific Certified Pools and related Purchased Assets related to each Transaction free and clear of all Liens as provided in this Agreement to the Seller upon payment or other satisfaction (as provided herein) of the applicable Repurchase Price by the Seller on the related Repurchase Date. Nothing contained in this Agreement shall obligate the Buyer to segregate any Certified Pools and/or any Purchased Assets delivered to the Buyer by the Seller. In the event the Buyer engages in an assignment, participation, repurchase transaction or other hypothecation with any of the Certified Pools and/or any Purchased Assets or otherwise pledges or hypothecates any of the Certified Pools and/or any Purchased Assets, the Buyer shall have the right to assign to the Buyer’s counterparty any of the Seller’s representations, warranties and covenants in this Agreement and the remedies for breach thereof, as they relate to the Certified Pools and/or any Purchased Assets that are subject to such repurchase transaction.
(c) The Buyer may, in connection with any Related Transaction pursuant to this Section 11.05, disclose to the applicable counterparty any information relating to the Seller or any aspect of the Transactions that has been furnished to the Buyer by or on behalf of the Seller in connection with the Repurchase Documents or the Transactions thereunder; provided that such counterparty agrees in writing to hold such information subject to the confidentiality provisions of this Agreement.
(d) Unless an Event of Default has occurred hereunder and has not been waived by the Buyer, no Related Transaction executed by the Buyer shall result in the Seller having privity of contract with any counterparty to the Buyer, it being understood by the parties that the Seller, unless it shall otherwise consent, shall deal solely with the Buyer and the Buyer shall remain solely liable for the performance of its obligations under the Repurchase Documents and each Transaction hereunder, notwithstanding any such Related Transaction.
Section 11.06 Survival. Each Transaction hereunder shall terminate not later than 364 days from the Purchase Date of such Transaction. Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto, shall survive the making of such representation and warranty, and the Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false or misleading in any material respect, notwithstanding that the Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading in any material respect at the time the Transaction was made. Notwithstanding any such termination or the occurrence of an Event of Default, all of the provisions of Sections 11.01 and 11.17 hereof shall continue and survive.
Section 11.07 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
Section 11.08 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 AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK LOCATED WITHIN THE COUNTY OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR
THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) 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 UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(e) 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 REPURCHASE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 11.09 No Waivers, Etc. No failure on the part of either party to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Repurchase Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Repurchase Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.
Section 11.10 Intent.
(a) The parties intend and acknowledge that (i) each Transaction and the Agreement 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) and a “master netting agreement” as that term is defined in Section 101(38A)(A) 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); (ii) all payments hereunder are deemed “margin payments” or “settlement payments” as defined in the Bankruptcy Code; (iii) each Purchased Asset constitutes either a “mortgage loan” or “an interest in a mortgage” as such terms are used in the Bankruptcy Code and (iv) the grant of the security interest/pledge of the Purchased Assets in Section 6 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. Without limiting the generality of the foregoing, the parties recognize and intend
that each Transaction is a “repurchase transaction” or “reverse repurchase transaction” on “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) The parties intend and acknowledge that (i)(1) for so long as Buyer 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, Buyer shall be entitled to, without limitation, the liquidation, termination, acceleration, netting, set-off, and non-avoidability rights afforded to parties such as Buyer 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 and “master netting agreements” pursuant to Sections 561, 362(b)(27) and 546(j) of the Bankruptcy Code, and (2) Buyer’s right to liquidate the Purchased Assets and other 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 10.02 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561; (ii) Buyer’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 Buyer to or for the credit of the account of any Affiliate against and on account of the obligations and liabilities of Seller pursuant to Section 11.18 hereof is a contractual right as described in Bankruptcy Code Section 561; and (iii) any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” or “settlement payment” as such terms are defined in Bankruptcy Code Sections 741(5) and 741(8)..
(c) 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 FDIA and any rules, orders or policy statements thereunder.
(d) 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 or regulations promulgated thereunder).
(e) Each party agrees 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.
Section 11.11 Periodic Due Diligence Review The Seller acknowledges that the Buyer has the right, at the Buyer’s sole expense and during the Seller’s regular business hours, to perform continuing due diligence reviews with respect to the Purchased Assets for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and the Seller agrees that upon reasonable (but not less than five (5) Business Days’) prior notice to Seller (provided that upon the occurrence of an Event of Default that has not been waived by the Buyer in writing, no such prior notice shall be required), the Buyer or its authorized representatives will be permitted during normal business hours to conduct such a review.
Section 11.12 Buyer’s Appointment As Attorney-In-Fact. The Seller hereby irrevocably constitutes and appoints the Buyer and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Seller and in the name of the Seller or in its own name, from time to time following the occurrence of an Event of Default that has not been waived by the Buyer in writing, in the Buyer’s discretion, 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, to file such financing statement or statements relating to the Certified Pools and the Purchased Assets without the Seller’s signature thereon as the Buyer at its option may deem appropriate, and, without limiting the generality of the foregoing, the Seller hereby gives the Buyer the power and right, on behalf of the Seller, without assent by, but with notice to, the Seller, to do the following after the occurrence and continuance of an Event of Default:
(a) In the name of the 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 under any FHA, RD or PIH insurance or VA guaranty constituting part of the Purchased Assets or with respect to any other Purchased Assets and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Buyer for the purpose of collecting any and all such moneys due under any such mortgage insurance or with respect to any other Purchased Assets whenever payable;
(b) To pay or discharge Taxes and Liens levied or placed on or threatened against the Purchased Assets;
(c) (i) 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 the Buyer or as the Buyer shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Purchased Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Purchased Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Purchased Assets or any proceeds thereof and to enforce any other right in respect of any Purchased Assets; (v) to defend any suit, action or proceeding brought against the Seller with respect to any Purchased Assets; (vi) to settle, compromise or adjust any suit, action or proceeding in
clause (v) above and, in connection therewith, to give such discharges or releases as the Buyer may deem appropriate; and (vii) 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 the Buyer were the absolute owner thereof for all purposes, and to do, at the Buyer’s option and the Seller’s expense, at any time, and from time to time, all acts and things which the Buyer deems necessary to protect, preserve or realize upon the Certified Pools and the related Purchased Assets and the Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as the Seller might do;
(d) To direct the actions of the Custodian with respect to the Certified Pools and the related Purchased Assets under the Custodial Agreement; and
(e) To execute, from time to time, in connection with any sale provided for in Section 10.02, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Purchased Assets.
The 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. Notwithstanding the foregoing, such power of attorney shall automatically expire and be of no further force or effect with respect to each Certified Pool and the related Purchased Assets upon Seller paying or otherwise satisfying (as provided herein) the Repurchase Price to Buyer with respect to same.
The powers conferred on the Buyer hereunder are solely to protect the Buyer’s interests in the Certified Pools and the related Purchased Assets and shall not impose any duty upon it to exercise any such powers. The Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers.
Section 11.13 Conflicts. In the event of any conflict between the terms of this Agreement, any other Repurchase Document and any Confirmation, the documents shall control in the following order of priority: first, the terms of the Confirmation shall prevail, then the terms of this Agreement shall prevail, and then the terms of the other Repurchase Documents shall prevail.
Section 11.14 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.
Section 11.15 Captions. The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.
Section 11.16 Acknowledgments. The Seller hereby acknowledges that:
(a) It has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Repurchase Documents;
(b) The Buyer has no fiduciary relationship to the Seller; and
(c) No joint venture exists between the Buyer and the Seller.
Section 11.17 Confidentiality.
(a) The Seller hereby acknowledges and agrees that (i) all pricing information concerning this repurchase facility and all written or computer-readable information provided by the Buyer to the Seller regarding the Buyer and (ii) the terms of this Agreement and any other Repurchase Document (the “Buyer Confidential Information”), shall be kept confidential and each of their respective contents will not be divulged to any party without the Buyer’s consent except to the extent that (i) the Seller deems appropriate to do so in working with legal counsel, auditors, taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, (ii) any portion of the Buyer Confidential Information is in the public domain other than due to a breach of this covenant, (iii) the Seller deems appropriate in connection with exercising any or all of the Seller’s rights or remedies or complying with any obligations under this Agreement or (iv) as requested or required by any court, tribunal, arbitrator, governmental authority, self-regulating body, law, regulation, legal process, litigation, or arbitration, provided, however, that, Buyer Confidential Information does not preclude the Seller from filing this Agreement with the Securities and Exchange Commission to the extent required under federal securities regulations.
(b) The Buyer hereby acknowledges and agrees that (i) all pricing information concerning this repurchase facility and all written or computer-readable information provided by the Seller to the Buyer regarding the Seller and (ii) the terms of this Agreement and any other Repurchase Document and (iii) any aspect of any Transaction hereunder (collectively, the “Seller Confidential Information”), shall be kept confidential and each of their respective contents will not be divulged to any party without the Seller’s consent except to the extent that (i) the Buyer deems appropriate to do so in working with legal counsel, auditors, taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, (ii) any portion of the Seller Confidential Information is in the public domain other than due to a breach of this covenant, (iii) the Buyer deems appropriate in connection with exercising any or all of the Buyer’s rights or remedies or complying with any obligations under this Agreement or (iv) as requested or required by any court, tribunal, arbitrator, governmental authority, self-regulating body, law, regulation, legal process, litigation, or arbitration, provided, however, that, Seller Confidential Information does not preclude the Buyer from filing this Agreement with the Securities and Exchange Commission to the extent required under federal securities regulations.
(c) Notwithstanding anything in this Agreement to the contrary, Seller and Buyer 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, including information relating to any Eligible Mortgage Loan (the “Confidential Mortgage Information”). Seller and Buyer understand that the Confidential Mortgage 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 (with respect to Buyer, to the extent the GLB Act is applicable to the Buyer) and other applicable federal and state privacy laws. Seller and Buyer 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 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 and Buyer 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.
The provisions set forth in this Section shall survive the termination of this Agreement for a period of one year following such termination.
Section 11.18 Set-Off. In addition to any rights and remedies of the Buyer provided by this Agreement and by law, upon the occurrence and continuance of an Event of Default, the Buyer shall have the right, without prior notice to the Seller, any such notice being expressly waived by the Seller to the extent permitted by Applicable Law, to set-off and appropriate and apply against any amount due and payable by the Seller or any Affiliate thereof any and all property and deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Buyer or any Affiliate thereof to or for the credit or the account of the Seller or any Affiliate thereof, whether under this Agreement or under any other agreements or transactions entered into between such parties. The Buyer agrees promptly to notify the Seller after any such set-off and application made by it; provided that the failure to give such notice shall not affect the validity of such set-off and application. The exercise of any such right of set-off shall be without prejudice to the Buyer’s or its Affiliates’ right to recover any deficiency.
Section 11.19 Amendment. This Agreement may only be amended in writing executed by the Seller and the Buyer.
Section 11.20 Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto and their permitted assigns.
Section 11.21 Limitation of Liability. No party shall be required to pay or be liable to the other party for, any consequential, special, indirect or punitive damages, opportunity costs or lost profits (whether or not arising from its negligence.)
Section 11.22 Non-Reliance. Each party represents and warrants, as of each Purchase Date for each Transaction, that: (i) it understands the terms, conditions and risks of such Transaction and is willing to assume (financially and otherwise) those risks; and (ii) it has made its own decision regarding the entering into such Transaction based upon its own judgment and upon advice from such professional advisers as it has deemed it necessary to consult, and is not relying on any advice (whether written or oral) of the other party.
Section 11.23 Register. The Seller shall maintain at one of its U.S. offices a register for the recordation of the names and address of Buyer 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”); it being acknowledged and agreed that a Person to which the Seller rehypothecates any Transaction hereunder by means of a repurchase agreement shall not be considered an “assignee” for purposes of this Section 11.23. The entries in the Register shall be conclusive absent manifest error, and the Seller and the Buyer 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. The Register shall be available for inspection by the Seller and any Buyer, at any reasonable time and from time to time upon reasonable prior notice.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have duly entered into this Agreement as of the date set forth above.
BUYER:
AMHERST PIERPONT SECURITIES LLC | ||
By: | /s/ Xavter Negroni | |
Name: Xavter Negroni | ||
Title: Senior Managing Director |
Buyer’s Address for Notices:
Amherst Pierpont Securities LLC
245 Park Avenue, 15th Floor
New York, New York 10167
Telephone: [***]
Email: [***]
[Signature Page to the Master Repurchase Agreement]
SELLER:
HOME POINT FINANCIAL CORPORATION |
By: | /s/ Maria Fregosi | |
Name: | ||
Title: |
Seller’s Address for Notices:
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention Joe Ruhlin
Telephone: [***]
E-mail: [***]
With a copy to: legal@hpfc.com
[Signature Page to the Master Repurchase Agreement]
SCHEDULE 1
[Reserved]
EXHIBIT I
FORM OF TRANSACTION REQUEST
[Date]
[_________________]
Confirmation No.:________________________________
Ladies/Gentlemen:
This letter is a request for you to purchase from us the offered Purchased Assets listed in Appendix I hereto, pursuant to the Master Repurchase Agreement governing purchases and sales of such assets between us, dated as of October 1, 2020 (the “Agreement”), as follows:
Buyer: Amherst Pierpont Securities LLC
Seller: Home Point Financial Corporation
Date of Request: [________________]
Requested Purchase Date: [________________]
Repurchase Date: [________________]
Number of offered Purchased Assets:[________________]
Aggregate Unpaid Principal Balance of Eligible Mortgage Loans: $ [___________]
Number of Certified Pools: [________________]
Individual Pool Number for each Certified Pool offered for purchase: [________]
Unpaid Principal Balance for each Certified Pool offered for purchase:[________]
Seller’s Ginnie Mae Commitment Authority as of the Requested Purchase Date: [___________]
Names and addresses for communications:
Buyer: Amherst Pierpont Securities LLC
245 Park Avenue, 15th Floor
New York, New York 10167
Seller:
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention [***]
Telephone: [***]
E-mail: [***]
With a copy to: [***]
I hereby certify as an Officer of Home Point Financial Corporation, and not in my individual capacity, that to my knowledge the following conditions are true and accurate as of the date of this Transaction Request:
1. No Default or Event of Default with respect to Seller has occurred and is continuing on the date hereof nor will occur after giving effect to such Transaction as a result of such Transaction.
2. All of the representations and warranties of the Seller contained in the Agreement and each Repurchase Document were true and correct in all material respects as of the date of the Agreement and are true and correct in all material respects as of the date hereof and the Seller has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the date hereof.
3. The Seller is in compliance in all material respects with all governmental licenses and authorizations and is qualified to do business and is in good standing in all required jurisdictions except where failure to hold one or more qualifications would not reasonably be expected to result in a Material Adverse Effect with respect to Seller.
4. The wire instructions listed on the loan data tape are true and correct.
6. The Seller has performed all of its duties and has satisfied all the material conditions on its part to be performed or satisfied pursuant to the Agreement on or prior to the date hereof.
7. There are no actions, suits or proceedings pending or, to my knowledge, threatened in writing, against or affecting the Seller which, if adversely determined either individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect with respect to Seller.
8. No proceedings that could result in the liquidation or dissolution of the Seller are pending or contemplated.
All capitalized terms used herein shall have the meaning assigned thereto in the Agreement.
Requested and certified by:
Home Point Financial Corporation
By: |
||
Name:
Title: |
EXHIBIT II
[Reserved.]
EXHIBIT III
FORM OF SETTLEMENT STATEMENT
G-Repo Settlement
Repo Start |
||||||||||||||||
APS Cusip | Purchase Date | Pool Settlement Date | Cpty | Group Num | QTY | Price | Price Differential /Haircut | Purchase Price | Repo Rate | Product | Group Num | Multi Pool # | Cusip | Repurchase Price | Gross proceeds | Net excess |
Total | ||||||||||||||||
Repo Unwind | ||||||||||||||||
APS Cusip | Purchase Date | Pool Settlement Date | Cpty | Group Num | QTY | Price | Price Differential /Haircut | Purchase Price | Repo Rate | Product | Group Num | Multi Pool # | Cusip | Repurchase Price | Gross proceeds | Net excess |
Total | ||||||||||||||||
Copyright ©2016 Pierpont Capital Holdings LLC and its affiliates (“Amherst Pierpont”) All rights reserved. Amherst Pierpont Securities LLC is a member FINRA and SIPC. This presentation is intended for discussion purposes only and is not meant to be, nor shall it be construed, as an offer or commitment by Amherst Pierpont or any of its affiliates to enter into any transaction. Should Amherst Pierpont subsequently seek to enter into any transaction, any such transaction would be subject to the conditions stated in the documentation therefore at that time, including, but not limited to, market conditions. In connection with any decision to purchase securities or other financial instruments, any recipient is advised to undertake an independent review of the potential legal, tax, regulatory and accounting implications of any transaction described herein to determine whether such a structure would be suitable for such recipient’s particular situations. Certain information in this presentation may be based on statistics and other information from third-party sources the Amherst Pierpont believes reliable, but Amherst Pierpont is not responsible for the accuracy or completeness of, and is under no duty to verify independently, any of this information. This presentation is confidential to the recipient hereof and may not under any circumstances be shown, copied, transmitted or otherwise given to any person other than such recipient’s authorized representatives, who shall be bound by the same restrictions applicable to recipient. |
Exhibit 10.9
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.
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 | 20 |
4. | CONFIRMATION | 23 |
5. | TAKEOUT COMMITMENTS | 24 |
6. | PAYMENT AND TRANSFER | 24 |
7. | MARGIN MAINTENANCE | 24 |
8. | TAXES; TAX TREATMENT | 25 |
9. | SECURITY INTEREST; PURCHASER’S APPOINTMENT AS ATTORNEY-IN-FACT | 27 |
10. | CONDITIONS PRECEDENT | 29 |
11. | RELEASE OF PURCHASED ASSETS | 33 |
12. | RELIANCE | 33 |
13. | REPRESENTATIONS AND WARRANTIES | 33 |
14. | COVENANTS OF SELLER | 37 |
15. | REPURCHASE OF PURCHASED ASSETS | 45 |
16. | SERVICING OF THE MORTGAGE LOANS; SERVICER TERMINATION | 45 |
17. | EVENTS OF DEFAULT | 49 |
18. | REMEDIES | 51 |
19. | DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE | 53 |
20. | USE OF EMPLOYEE PLAN ASSETS | 54 |
21. | INDEMNITY | 54 |
22. | WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS | 55 |
23. | REIMBURSEMENT; SET-OFF | 55 |
24. | FURTHER ASSURANCES | 57 |
25. | ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION | 57 |
26. | TERMINATION | 57 |
27. | REHYPOTHECATION; ASSIGNMENT | 57 |
28. | AMENDMENTS, ETC | 58 |
29. | SEVERABILITY | 58 |
30. | BINDING EFFECT; GOVERNING LAW | 58 |
31. | WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS | 59 |
32. | SINGLE AGREEMENT | 59 |
33. | INTENT | 60 |
34. | NOTICES AND OTHER COMMUNICATIONS | 61 |
35. | CONFIDENTIALITY | 63 |
36. | DUE DILIGENCE | 64 |
37. | USA PATRIOT ACT; OFAC AND ANTI-TERRORISM | 64 |
38. | EXECUTION IN COUNTERPARTS | 65 |
39. | CONTRACTUAL RECOGNITION OF BAIL-IN | 65 |
40. | CONTRACTUAL RECOGNITION OF UK STAY IN RESOLUTION | 66 |
41. | NOTICE REGARDING CLIENT MONEY RULES | 66 |
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) |
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.
“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.
“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.
“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.
“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.
“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.
“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.
“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.
“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
(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.
“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 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.
“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).
“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 at approximately 11:00 a.m., London time, on the applicable date of determination, or such interpolated rate as determined by the Agent.
“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.
“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.
“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 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).
“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) 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) the greater of LIBOR and the LIBOR Floor 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 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.
“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 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.
“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).
“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.
“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 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.
(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 of 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), the Purchaser shall subsequently respond via email to Seller and Disbursement Agent to confirm or contest 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), Seller shall subsequently initiate a wire for the amount of such Proposed Seller Refund from the Disbursement Account. Disbursement Agent shall verify that (i) Purchaser has confirmed Seller’s calculation of the Proposed Seller Refund and (ii) the amount of such wire matches the amount of the Proposed Seller Refund and, upon verification of clauses (i) and (ii), shall release the wire to Seller pursuant to the wire instructions Seller provides. To the extent Purchaser contests or does not otherwise confirm the Proposed Seller Refund, Seller shall not initiate any wires from the Disbursement Account. With respect to any amounts remaining in the Disbursement Account at [***] (New York City time) on each Business Day, Disbursement Agent shall sweep such amount 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 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.
(j) 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 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 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 Repurchase 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.
(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.
(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.
(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 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.
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;
(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 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;
(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;
(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 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 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.
(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 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).
(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.
(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 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 Error! Reference source not found. 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 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 Error! Reference source not found. 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;
(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.
(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.
(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 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 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 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 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 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 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 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”:
(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;
(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 Purchase 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.
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 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, 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.
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 Error! Reference source not found.; provided, however, that any breach by Seller of Section Error! Reference source not found. or Section Error! Reference source not found. 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.
(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 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.
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 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).
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.
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 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:
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: [***]
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 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 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 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 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 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.
[SIGNATURE PAGE FOLLOWS]
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: | /s/ Maria Fregosi | |
Name: Maria Fregosi | ||
Title: Chief Financial Officer | ||
BARCLAYS BANK PLC, as Purchaser and Agent | ||
By: | /s/ Jhoana Ocampo | |
Name: Jhoana Ocampo | ||
Title: Director |
Signature Page to Master Repurchase Agreement
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: | /s/ Jhoana Ocampo | |
Name: Jhoana Ocampo | ||
Title: Director |
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]
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: |
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 Error! Reference source not found.. |
[Signature Page Follows]
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: |
SCHEDULE ONE TO EXHIBIT A
OTHER FINANCIAL COVENANTS
EXHIBIT B
REPRESENTATIONS AND WARRANTIES
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 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 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;
(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.
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:
(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 ______.
Very truly yours, | |||
HOME POINT FINANCIAL CORPORATION | |||
By: | |||
Name: | |||
Title: |
SCHEDULE 1 TO TRANSACTION NOTICE
LIST OF REPURCHASE PRICES AND REPURCHASE DATES
[SEE ATTACHMENT]
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.
Sincerely,
Loan Servicing Department
Home Point Financial Corporation
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.
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.
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, | ||
[WAREHOUSE LENDER] |
By: | |||
Name: | |||
Title: |
[SCHEDULE A TO EXHIBIT E – LIST OF MORTGAGE LOANS TO BE RELEASED]
EXHIBIT F
LIST OF DISAPPROVED MEMBERS OF THE MORTGAGE BACKED SECURITIES
DIVISION OF THE FIXED INCOME CLEARING CORPORATION
[NONE]
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.
[SELLER SIGNATURE BLOCK]
[ESCROW AGENT/SETTLEMENT AGENT SIGNATURE BLOCK]
EXHIBIT H
FORM OF SELLER MORTGAGE LOAN SCHEDULE
[TO BE PROVIDED BY BARCLAYS]
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 [***]] in connection with our subsequent 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 |
EXHIBIT J
FORM OF SELLER FINANCIAL STATEMENTS (ANNUAL)
EXHIBIT K
FORM OF SELLER FINANCIAL STATEMENTS (PERIODIC)
Exhibit 10.10
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 CREDIT AGREEMENT
among
HOME POINT FINANCIAL CORPORATION
as Borrower,
HOME POINT CAPITAL INC.
as Guarantor,
GOLDMAN SACHS BANK USA,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders,
and
LENDERS
from time to time party hereto
dated as of July 11, 2019
TABLE OF CONTENTS
Page | ||
ARTICLE I | ||
CERTAIN DEFINITIONS | ||
Section 1.1 | Certain Defined Terms | 2 |
Section 1.2 | Computation of Time Periods | 40 |
Section 1.3 | Construction | 40 |
Section 1.4 | Accounting Terms | 40 |
ARTICLE II | ||
AMOUNTS AND TERMS OF THE ADVANCES | ||
Section 2.1 | Establishment of the Credit Facility | 41 |
Section 2.2 | The Advances | 41 |
Section 2.3 | Use of Proceeds | 41 |
Section 2.4 | Making the Advances | 41 |
Section 2.5 | Fees | 42 |
Section 2.6 | Borrowing Base | 42 |
Section 2.7 | Repayment of the Advances | 43 |
Section 2.9 | Mandatory Prepayments of Advances | 44 |
Section 2.10 | Optional Prepayments; Removal of Collateral | 45 |
Section 2.11 | Breakage Costs; Increased Costs; Capital Adequacy; Additional Indemnifications; LIBOR Unavailability; Illegality | 46 |
Section 2.12 | Payments and Computations | 49 |
Section 2.13 | Payment on Non-Business Days | 49 |
Section 2.14 | Extension of Availability Period | 50 |
Section 2.15 | Taxes | 50 |
Section 2.16 | Defaulting Lenders | 54 |
Section 2.17 | Security Interest | 54 |
Section 2.18 | Limited Pledge of Fannie Mae Servicing | 56 |
Section 2.19 | Limited Pledge of Freddie Mac Servicing | 57 |
Section 2.20 | Limited Pledge of Ginnie Mae Servicing | 58 |
Section 2.21 | Commitment Increase | 59 |
Section 2.22 | Base Servicing Fee Increases | 59 |
ARTICLE III | ||
CONDITIONS OF LENDING AND CLOSING | ||
Section 3.1 | Conditions Precedent to Closing | 60 |
Section 3.2 | Conditions Precedent to All Advances | 61 |
ARTICLE IV | ||
REPRESENTATIONS AND WARRANTIES | ||
Section 4.1 | Representations and Warranties of the Borrower and the Guarantor | 62 |
ARTICLE V | ||
COVENANTS | ||
Section 5.1 | Affirmative Covenants | 70 |
Section 5.2 | Negative Covenants | 77 |
ARTICLE VI | ||
EVENTS OF DEFAULT | ||
Section 6.1 | Events of Default | 79 |
Section 6.2 | Remedies | 82 |
ARTICLE VII | ||
THE ADMINISTRATIVE AGENT | ||
Section 7.1 | Appointment; Nature of Relationship | 84 |
Section 7.2 | Powers | 85 |
Section 7.3 | General Immunity | 85 |
Section 7.4 | No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. | 85 |
Section 7.5 | Action on Instruction of Lenders | 86 |
Section 7.6 | Employment of Agents and Counsel | 86 |
Section 7.7 | Reliance on Documents; Counsel | 86 |
Section 7.8 | The Administrative Agent’s Reimbursement and Indemnification | 86 |
Section 7.9 | Rights as a Lender | 87 |
Section 7.10 | Lender Credit Decision | 87 |
Section 7.11 | Successor Agent | 87 |
Section 7.12 | Transaction Documents | 88 |
ARTICLE VIII | ||
COLLECTION ACCOUNT | ||
Section 8.1 | Collection Account | 88 |
ARTICLE IX | ||
GUARANTY | ||
Section 9.1 | Guaranty | 89 |
Section 9.2 | Subrogation | 89 |
Section 9.3 | Amendments, etc. with Respect to the Guaranteed Obligations | 90 |
Section 9.4 | Guaranty Absolute and Unconditional | 90 |
Section 9.5 | Reinstatement | 92 |
Section 9.6 | Payments | 92 |
Section 9.7 | Events of Default | 92 |
ARTICLE X | ||
MISCELLANEOUS | ||
Section 10.1 | Survival | 92 |
Section 10.2 | Amendments, Etc. | 92 |
Section 10.3 | Notices, Etc. | 93 |
Section 10.4 | No Waiver; Remedies | 94 |
Section 10.5 | Indemnification | 94 |
Section 10.6 | Costs, Expenses and Taxes | 94 |
Section 10.7 | Right of Set-off; Ratable Payments; Relations Among Lenders | 95 |
Section 10.8 | Binding Effect; Assignment | 96 |
Section 10.9 | Governing Law | 98 |
Section 10.10 | Jurisdiction | 98 |
Section 10.11 | Waiver of Jury Trial | 98 |
Section 10.12 | Section Headings | 98 |
Section 10.13 | Tax Characterization | 98 |
Section 10.14 | Execution | 98 |
Section 10.15 | Limitations on Liability | 98 |
Section 10.17 | Merger | 100 |
Section 10.18 | Lien Release | 100 |
Section 10.19 | Customer Identification - USA Patriot Act Notice | 100 |
Section 10.20 | Administrative Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations | 100 |
SCHEDULES
Schedule I | Borrower’s Account, Collection Account and Administrative Agent’s Account |
Schedule II | [Reserved] |
Schedule III | Valuation Agents |
Schedule IV | Dealers |
Schedule V | Minimum Haircut Trigger Event |
Schedule 4.1(c) | Ownership Structure of the Borrower and its Subsidiaries |
Schedule 4.1(q) | Indebtedness of the Borrower and the Guarantor |
Schedule 5.2(a) | Liens |
Schedule 10.3 | Notice Addresses |
EXHIBITS
EXHIBIT A | -- | Form of Compliance Certificate |
EXHIBIT B | -- | Form of Notice of Borrowing |
EXHIBIT C | -- | Form of Loan Note |
EXHIBIT D | -- | Form Assignment and Assumption |
EXHIBIT E | -- | Commitments |
EXHIBIT F | -- | Form of Monthly Report |
EXHIBIT G | -- | Reserved |
EXHIBIT H | -- | Form of Notice of Prepayment |
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of July 11, 2019, by and among Home Point Financial Corporation a New Jersey corporation, as borrower (the “Borrower”), Home Point Capital Inc., a Delaware corporation (the “Guarantor”), the financial institutions that may from time to time become parties hereto (each such financial institution, a “Lender” and collectively, the “Lenders”) and GOLDMAN SACHS BANK USA (“GS Bank”), as administrative agent (the “Administrative Agent”).
RECITALS
WHEREAS, the Borrower, each of the Lenders under the Original Credit Agreement (as defined below) (together, the “Original Lenders”) and GS Bank, as Administrative Agent, are parties to that certain Credit Agreement, dated as of January 31, 2019 (the “Original Credit Agreement”);
WHEREAS, the Original Lenders are the Majority Lenders under the Original Credit Agreement;
WHEREAS, pursuant to Section 10.2(a)(i) and (iii) of the Original Credit Agreement, the Borrower, the Original Lenders and the Administrative Agent desire to amend and restate the Original Credit Agreement as set forth in this Agreement;
WHEREAS, the Borrower owns and in the future will hold, certain MSRs (as defined herein) for the Agencies;
WHEREAS, the Borrower has requested that the Lenders provide financing for the MSRs held by the Borrower;
WHEREAS, the Guarantor has agreed to guarantee the obligations of the Borrower hereunder; and
WHEREAS, the Lenders are willing to provide financing upon the terms and subject to the conditions set forth herein, including the Guaranty of the Guaranteed Obligations by the Guarantor.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Defined Terms. Capitalized terms used but not otherwise defined herein have the meanings set forth below:
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“5 Year Swap Rate” shall mean, as of any date of determination, the average of the mid- market par swap rates for interest rate swaps with a maturity of five years offered by the Dealers.
“Accepted Servicing Practices” shall mean (i) with respect to any Mortgage Loan, the customary and usual standards of mortgage servicing practices of prudent mortgage lending institutions servicing mortgage loans for itself or for other third-party portfolios of mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located; and (ii) with respect to all MSRs related to the Servicing Contract of any Agency, those practices required by such Agency (including the Fannie Mae Agency Guide, the Freddie Mac Agency Guide, and the Ginnie Mae Agency Guide as applicable); provided, however, that in all cases the accepted servicing practices must (i) comply with the terms of Applicable Laws and the related loan documents and (ii) meet a standard of care not less than customary, reasonable and usual standards of practice for institutions that service loans that are similar to the Mortgage Loans.
“Account Bank” shall mean a financial institution identified in writing to the Administrative Agent where the Collection Account is housed.
“Account Control Agreement” shall mean a Deposit Account Agreement, dated as of the Closing Date, by and among the Borrower, the Account Bank and the Administrative Agent, pursuant to which the Administrative Agent shall be granted “control” (as defined in Section 9-104 of the UCC) of the Collection Account.
“Acknowledgment Agreement” shall mean each of the Fannie Mae Acknowledgment Agreement, the Freddie Mac Acknowledgment Agreement, and the Ginnie Mae Acknowledgment Agreement, as applicable.
“Acknowledgment Agreement Holiday Period” shall mean, with respect to any Agency, the period of time beginning on the Closing Date and ending on the earlier of (i) the related Acknowledgment Agreement Trigger Date, and (ii) such time that the applicable Acknowledgment Agreement is finalized by the parties thereto.
“Acknowledgment Agreement Trigger Date” shall mean, as applicable, the Freddie AA Trigger Date and the Ginnie AA Trigger Date.
“Acknowledgment Agreement Trigger Period” shall mean, as applicable, the Freddie AA Trigger Period, and the Ginnie Mae Trigger Period.
“Activation Notice” shall have the meaning set forth in the Account Control Agreement.
“Additional Collateral” shall mean all right, title and interest in, to and under all personal property of the Borrower, including but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located: (a) Accounts, (b) Contracts; (c) Chattel Paper, (d) Documents, (e) General Intangibles, (f) Goods (including all of its Equipment, Fixtures and Inventory), together with all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor, (g) Instruments, (h) Insurance, (i) Intellectual Property, (j) Investment Related Property (including, without limitation, Deposit Accounts), (k) Letter of Credit Rights, (l) Money, (m) Receivables and Receivables Records, (n) Commercial Tort Claims, (o) any other investments and investment property, (p) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing; and (q) to the extent not otherwise included in the foregoing, all Proceeds, products, accessions, rents and profits of or in respect of any of (a) through (p); provided, however, that Additional Collateral shall not include Excluded Collateral or (for so long as such remains applicable) any of the foregoing to the extent that a security interest therein is prohibited by or in violation of any law, rule, or regulation, or the contractual terms or provisions related thereto.
Capitalized terms used in this definition shall have the meaning given thereto in Article 9 of the UCC.
“Additional Guarantor Collateral” shall mean all right, title and interest in, to and under all personal property of the Guarantor, including but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located: (a) Accounts, (b) Contracts, (c) Chattel Paper, (d) Documents, (e) General Intangibles, (f) Goods (including all of its Equipment, Fixtures and Inventory), together with all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor, (g) Instruments, (h) Insurance, (i) Intellectual Property, (j) Investment Related Property (including, without limitation, Deposit Accounts), (k) Letter of Credit Rights, (l) Money, (m) Receivables and Receivables Records, (n) Commercial Tort Claims, (o) any other investments and investment property (including its interests in Longbridge Financial, LLC and the Borrower), (p) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing, (q) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing, and (r) to the extent not otherwise included in the foregoing, all Proceeds, products, accessions, rents and profits of or in respect of any of (a) through (q); provided, however, that Additional Guarantor Collateral shall not include Excluded Collateral or (for so long as such remains applicable) any of the foregoing to the extent that a security interest therein is prohibited by or in violation of any law, rule, or regulation, or the contractual terms or provisions related thereto.
Capitalized terms used in this definition shall have the meaning given thereto in Article 9 of the UCC.
“Additional Principal Amortization Amount” shall mean an amount due and payable on each Additional Principal Amortization Date equal to the quotient of (i) the Advances outstanding on the Availability Period End Date divided by (ii) 12.
“Additional Principal Amortization Date” shall mean the Monthly Payment Date occurring in the calendar month in which the Availability Period End Date occurs, and each Monthly Payment Date thereafter through the Maturity Date, as applicable.
“Adjusted LIBOR Rate” shall mean a rate per annum equal to the rate (rounded upwards, if necessary, to the next higher 1/100 of 1%) obtained by dividing (a) LIBOR by (b) a percentage equal to [***] minus the reserve percentage (rounded upward to the next 1/100th of 1%) in effect on such day and applicable to any Lender for which this rate is calculated under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”). The Adjusted LIBOR Rate shall be adjusted automatically as of the effective date of any change in such reserve percentage.
“Adjusted Tangible Net Worth” shall mean, with respect to the Borrower, the Guarantor and their respective Subsidiaries, an amount equal to, on a consolidated basis, the stockholder or members’ equity, including capital stock or member interests, additional paid-in capital, retained earnings, deferred income, capitalized mortgage loan servicing rights and capitalized excess mortgage loan servicing fees, but excluding treasury stock, if any, and any intangible assets of the Borrower, the Guarantor and their respective Subsidiaries (determined on a consolidated basis in accordance with GAAP).
“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Administrative Agent Asset Value” shall mean, as of any date of determination, the sum of (i) the Administrative Agent Fannie Mae Asset Value, (ii) the Administrative Agent Freddie Mac Asset Value, and (iii) the Administrative Agent Ginnie Mae Asset Value; provided, however, that during the Ginnie AA Trigger Period the Administrative Agent Asset Value shall not exceed the product of (a) the sum of (1) the Administrative Agent Fannie Mae Market Value Percentage multiplied by the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, and (2) the Administrative Agent Freddie Mac Market Value Percentage multiplied by the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs, and (b) [***] and provided further, that the Administrative Agent Ginnie Mae Asset Value of Ginnie Mae MSRs shall be reduced to the extent necessary such that the Ginnie Mae Borrowing Base remains at or below the Ginnie Mae Concentration Limit.
“Administrative Agent Fannie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Fannie Mae Advance Rate, (ii) the Administrative Agent Fannie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs.
“Administrative Agent Fannie Mae Market Value Percentage” shall mean, with respect to any Fannie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Fannie Mae MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Fannie Mae Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Fee Letter” shall mean that certain side letter, dated as of the Closing Date, by and between the Borrower, Guarantor, and the Administrative Agent, with respect to certain pricing terms of the facility established hereby.
“Administrative Agent Freddie Mac Asset Value” shall mean, as of any date of determination, the product of (i) the Freddie Mac Advance Rate, (ii) the Administrative Agent Freddie Mac Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs.
“Administrative Agent Freddie Mac Market Value Percentage” shall mean, with respect to any Freddie Mac MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Freddie Mac MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Freddie Mac Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Ginnie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Ginnie Mae Advance Rate, (ii) the Administrative Agent Ginnie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs.
“Administrative Agent Ginnie Mae Market Value Percentage” shall mean, with respect to any Ginnie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Ginnie Mae MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Ginnie Mae Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Methodology” shall mean, with respect to any Administrative Agent Fannie Mae Market Value Percentage, Administrative Agent Freddie Mac Market Value Percentage, or Administrative Agent Ginnie Mae Market Value Percentage calculated by the Administrative Agent, the assumptions, factors, parameters, methodology and calculations employed by the Administrative Agent in determining such Administrative Agent Fannie Mae Market Value Percentage, Administrative Agent Freddie Mac Market Value Percentage, or Administrative Agent Ginnie Mae Market Value Percentage for purposes of determining the Borrowing Base, which assumptions, factors, parameters, methodology and calculations shall be determined by the Administrative Agent in its sole discretion. Without
limiting the foregoing, if as a result of a change by the Administrative Agent of its Administrative Agent Methodology, the aggregate of the Administrative Agent Fannie Mae Market Value Percentage, Administrative Agent Freddie Mac Market Value Percentage, and Administrative Agent Ginnie Mae Market Value Percentage changes by more than five percent (5%) over the course of one (1) Business Day, then upon request by the Borrower the Administrative Agent shall provide the Borrower with an explanation of the basis for such change; provided, however, that, except pursuant to a Borrowing Base Dispute under Section 2.6(b), neither such change in market value nor the Administrative Agent’s failure to provide information related thereto shall affect the validity of the Administrative Agent Methodology or Administrative Agent Asset Value.
“Administrative Agent’s Account” shall mean the Administrative Agent’s bank account, described on Schedule I attached hereto, designated by the Administrative Agent from time to time by written notice to the Borrower.
“Advance” shall mean any advance of funds by any Lender to the Borrower, made pursuant to Article II of this Agreement.
“Advance Rate Cap” shall mean each of the Fannie Mae Advance Rate Cap, Freddie Mac Advance Rate Cap, and Ginnie Mae Advance Rate Cap.
“Advance Reimbursement Amount” shall mean all amounts reimbursable to the Borrower pursuant to the terms of a Servicing Contract in respect of Servicer Advances required to be made in accordance with and pursuant to the terms of such Servicing Contract.
“Affected Party” shall have the meaning set forth in Section 2.11(b).
“Affiliate” shall mean, 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 any Lender. 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 the Borrower, 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 the Borrower or Guarantor.
“Agency” shall mean Fannie Mae, Freddie Mac, and/or Ginnie Mae, as applicable.
“Agency Approvals” shall have the meaning set forth in Section 5.1(l).
“Agency Fee Letter” shall mean that certain side letter, dated as of the Closing Date, by and between the Borrower, Guarantor, and the Administrative Agent, with respect to certain pricing terms of the facility created hereby, the Fannie Mae MSRs, the Freddie Mac MSRs, and the Ginnie Mae MSRs.
“Agency Guide” shall mean the Fannie Mae Agency Guide, the Freddie Mac Agency Guide, and/or the Ginnie Mae Agency Guide, as applicable.
“Agency Requirements” shall mean, collectively, the Fannie Mae Requirements, the Freddie Mac Requirements, and the Ginnie Mae Requirements.
“Agency Servicing Rights” shall mean, with respect to each Mortgage Loan, all of the Borrower’s right, title and interest in, to and under the related Servicing Contracts, whether now or hereafter existing, acquired or created, whether or not yet accrued, earned, due or payable, as well as all other present and future right and interest under such Servicing Contracts.
“Aggregate Commitment” shall mean at any time, the sum of the Commitments then in effect. The initial Aggregate Commitment as of the Closing Date shall be equal to [***].
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“Alternative Rate” shall have the meaning set forth in Section 2.11(f).
“Ancillary Income” shall mean all income derived from a Mortgage Loan, other than payments or collections in respect of principal, interest, escrow payments and prepayment penalties.
“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 Percentage” shall mean with respect to the Commitment of any Lender at any time, a percentage equal to a fraction, the numerator of which is such Lender’s Commitment at such time and the denominator of which is the Aggregate Commitment at such time (provided that if the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the aggregate Advances at such time). In the case of Section 2.16, when a Defaulting Lender shall exist, the Applicable Percentage shall be calculated without inclusion of such Defaulting Lender’s Commitment.
“Asset” shall mean all Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs of the Borrower, all of which are pledged to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) pursuant to the terms hereof. For the avoidance of doubt, the Assets shall be identified on the Schedule of Assets and updated no less frequently than monthly and delivered to the Administrative Agent as a schedule to the Compliance Certificate in accordance with Section 5.1(bb).
“Asset Management Strategy” shall mean the off-balance sheet asset management strategy disclosed by the Borrower to the Administrative Agent prior to the Closing Date, which strategy may be updated, from time to time, upon Borrower disclosing such updated strategy to the Administrative Agent; provided, however, that if such proposed strategy is
substantially inconsistent with the strategy disclosed prior to the Closing Date, then such proposed strategy shall not constitute the “Asset Management Strategy” for purposes of this Agreement without prior consent of the Administrative Agent (such consent not to be unreasonably withheld).
“Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.8), and accepted by the Administrative Agent, in substantially the form of Exhibit D hereto or any other form approved by the Administrative Agent.
“Availability Period” shall mean, unless otherwise extended pursuant to and in accordance with Section 2.2, the period from the Closing Date until the earlier to occur of (i) an Event of Default, and (ii) the Availability Period End Date.
“Availability Period End Date” shall mean the Monthly Payment Date occurring in the 36th month following the Closing Date, or January 31, 2022, as such date may be extended pursuant to Section 2.14.
“Base Servicing Fee” shall mean, with respect to the Portfolio of Mortgage Loans for each Agency and each Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans for such Agency included in such Portfolio as of the first day of such Collection Period multiplied by (B) one-twelfth of the Base Servicing Fee Rate; provided, however, that (1) with respect to all Mortgage Loans in the Portfolio for such Agency, if the initial Collection Period is less than a full month, such fee for each such Mortgage Loan shall be an amount equal to the product of the fee otherwise described above multiplied by a fraction, the numerator of which is the number of days in such initial Collection Period and the denominator of which is 30; (2) if any Fannie Mae Mortgage Loan, Freddie Mac Mortgage Loan, or Ginnie Mae Mortgage Loan, as applicable, ceases to be part of such Portfolio during such Collection Period as a result of a termination of the Borrower’s duties as servicer under the applicable Servicing Contract, the portion of such amount that is attributable to such Fannie Mae Mortgage Loan, Freddie Mac Mortgage Loan, or Ginnie Mae Mortgage Loan, as applicable, shall be adjusted to an amount equal to the product of the fee otherwise described above multiplied by a fraction, the numerator of which is the number of days in such Collection Period during which such Mortgage Loan was included in such Portfolio and denominator of which is 30.
“Base Servicing Fee Rate” means (i) with respect to any Mortgage Loan serviced for Fannie Mae pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum, (ii) with respect to any Mortgage Loan serviced for Freddie Mac pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum, and (iii) with respect to any Mortgage Loan serviced for Ginnie Mae pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum.
“Bankruptcy Code” shall mean the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended.
“Basel III” shall mean Basel III: A global regulatory framework for more resilient banks and banking systems prepared by the Basel Committee on Banking Supervision, and all national implementations thereof.
“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrower’s Account” shall mean (i) the Borrower’s bank account, described on Schedule I attached hereto, for the account of the Borrower or (ii) such other account as may be designated by the Borrower from time to time by at least ten (10) Business Days’ prior written notice to the Administrative Agent and the Lenders, so long as such other account is acceptable to the Administrative Agent in its sole and absolute discretion.
“Borrower Collateral” shall have the meaning set forth in Section 2.17.
“Borrowing Base” shall mean, as of any date of determination, with respect to MSRs that are Eligible Assets, the sum of:
(a) | if a Borrowing Base Dispute has not been initiated with respect to such date, or a Borrowing Base Dispute has been initiated but the Valuation Agent Asset Value has not yet been determined pursuant to Section 2.6(b), the Administrative Agent Asset Value thereof; and |
(b) | if a Borrowing Base Dispute has been initiated and the Valuation Agent Asset Value has been determined pursuant to Section 2.6(b), the lesser of (1) the Valuation Agent Asset Value (provided that the value attributed to that portion of the Valuation Agent Asset Value pertaining to Ginnie Mae MSRs shall be reduced such that the Ginnie Mae Borrowing Base remains at or below the Ginnie Mae Concentration Limit), and (2) the Borrowing Base Cap, in each case, in respect of such MSRs. |
“Borrowing Base Cap” shall mean the sum of (1) the product of (A) the most recently determined Administrative Agent Fannie Mae Market Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, and (C) the Fannie Mae Advance Rate Cap, (2) the product of (A) the most recently determined Administrative Agent Freddie Mac Market Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs, and (C) the Freddie Mac Advance Rate Cap, and (3) the product of (A) the most recently determined Administrative Agent Ginnie Mae Market Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs, and (C) the Ginnie Mae Advance Rate Cap; provided however, that the Administrative Agent Ginnie Mae Asset Value of Ginnie Mae MSRs shall be reduced such that the Ginnie Mae Borrowing Base remains at or below the Ginnie Mae Concentration Limit.
“Borrowing Base Certificate” shall mean the certificate in the form of Exhibit A attached to each Notice of Borrowing.
“Borrowing Base Deficiency” shall exist with respect to the Borrowing Base on any date on which (i) the aggregate amount of Advances exceeds the Aggregate Commitments related thereto, (ii) if no Borrowing Base Dispute has been initiated and is outstanding, the Effective Advance Rate with respect to the MSRs of any Agency exceeds the Fannie Mae Advance Rate, Freddie Mac Advance Rate, or Ginnie Mae Advance Rate, as applicable, by [***] or more, (iii) if a Borrowing Base Dispute has been initiated but the Valuation Agent Asset Value has not yet been determined pursuant to Section 2.6(b), the Effective Advance Rate with respect to the MSRs of any Agency exceeds that portion of the Borrowing Base Cap attributed to the MSRs of such Agency, (iv) if a Borrowing Base Dispute has been initiated, the Valuation Agent Asset Value has been determined pursuant to Section 2.6(b), and the Borrowing Base is being calculated pursuant to (b)(1) of the definition thereof, the Effective Advance Rate with respect to the MSRs of any Agency exceeds (a) the Fannie Mae Advance Rate, Freddie Mac Advance Rate, or Ginnie Mae Advance Rate, as applicable, by [***] or more, or (b) that portion of the Borrowing Base Cap attributed to the MSRs of such Agency, (v) if a Borrowing Base Dispute has been initiated, the Valuation Agent Asset Value has been determined pursuant to Section 2.6(b), and the Borrowing Base is being calculated pursuant to (b)(2) of the definition thereof, the Effective Advance Rate with respect to the MSRs of any Agency exceeds that portion of the Borrowing Base Cap attributed to the MSRs of such Agency, or (vi) there exists a Minimum Haircut Trigger Event.
“Borrowing Base Deficiency Notice” shall have the meaning set forth in Section 2.6.
“Borrowing Base Dispute” shall have the meaning set forth in Section 2.6(b).
“Borrowing Base Required Payment” shall mean the greater of an amount necessary to (i) cause the aggregate amount of Advances outstanding to equal the lesser of the Aggregate Commitment and the Borrowing Base, or (ii) eliminate any existing Minimum Haircut Trigger Event.
“Borrowing Date” shall mean, with respect to any Advance, the date of the making of such Advance, which date shall in any case be a Business Day.
“Breakage Costs” shall mean, with respect to a failure by the Borrower, for any reason, to borrow any proposed Advance on the date specified in the applicable Notice of Borrowing (including as a result of the Borrower’s failure to satisfy any conditions precedent to such borrowing) after providing such Notice of Borrowing, the resulting loss, cost, expense or liability (excluding loss of anticipated profits) incurred by reason of the liquidation or reemployment of deposits, actually sustained by any Lender or the Administrative Agent, and with respect to any Optional Prepayment, any loss, cost, expense, or liability sustained by any Lender or the Administrative Agent as a result of such Optional Prepayment, in each case as certified in any written demand for payment by a Lender or the Administrative Agent setting forth in reasonable detail the basis for calculating such compensation.
“Business Day” shall mean (i) any day excluding Saturday, Sunday, any day which is a legal holiday under the laws of the State of New York, the State of Michigan or the State of Texas, any day on which banking institutions located in either such state are authorized or required by law or other governmental action to close, and any day on which the New York Stock Exchange
or the Federal Reserve Bank of New York is authorized or obligated by law or executive order to be closed, and (ii) with respect to all notices, determinations, fundings and payments in connection with Advances bearing interest at the Adjusted LIBOR Rate so long as LIBOR is in effect, the term “Business Day” shall mean any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.
“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting) of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) or any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, but in no event will Capital Stock include any debt securities convertible or exchangeable into equity unless and until actually converted or exchanged.
“Capitalized Lease Obligation” shall mean, for any Person, the amount of Indebtedness 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.
“Cash” shall mean money, currency or a credit balance on hand or in any demand or deposit account.
“Cash Equivalents” shall mean, as at 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 one year 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 any Lender 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 in Law” shall mean (i) the adoption or taking effect of any Law after the date of this Agreement, (ii) any change in Law or in the administration, interpretation, application or implementation thereof by any Governmental Authority after the date of this Agreement, (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement or (iv) compliance by any Affected Party, by any lending office of such Affected Party or by such Affected Party’s holding company, if any, 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; provided that notwithstanding anything herein to the contrary, (a) the Dodd-Frank Act, (b) Basel III and (c) all requests, rules, guidelines and directives under either of the Dodd-Frank Act or Basel III or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date implemented, enacted, adopted or issued.
“Change of Control” shall occur at any time the Permitted Holders fail to collectively own, directly or indirectly, at least (i) 50.01% of the Equity Interests of the Borrower and of the Guarantor, and (ii) a majority of the aggregate ordinary voting power for the election of directors (or persons performing similar functions) of the Borrower and of the Guarantor.
“Closing Date” shall mean January 31, 2019.
“Collateral” shall have the meaning set forth in Section 2.17.
“Collection Account” shall mean a deposit account established by the Borrower with the Account Bank, or such other replacement collection account as may be established at a financial institution reasonably acceptable to the Administrative Agent.
“Collection Period” shall mean, with respect to a Monthly Payment Date occurring during an Acknowledgment Agreement Trigger Period or following the occurrence and during the continuance of an Event of Default, the calendar month preceding the month in which such Monthly Payment Date occurs.
“Collections” shall mean, with respect to any Asset with respect to a Collection Period, any servicing fees or subservicing fees (other than retained yield, Ancillary Income and, after the occurrence of an Event of Default, the applicable Base Servicing Fee) that the Borrower as servicer is entitled to receive free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, pursuant to the Servicing Contracts during such Collection Period.
“Commitment” shall mean the obligation of a Lender to fund Advances hereunder, as set forth on Exhibit E attached hereto, as increased pursuant to Section 2.21, and as amended in connection with assignments made by Lenders pursuant to Section 10.8. If, from time to time, any Lender other than Goldman Sachs Bank USA becomes a party to this Agreement as a Lender, then the Administrative Agent shall deliver to the Borrower an amended Exhibit E setting forth the revised Commitments of the Lenders.
“Compliance Certificate” shall mean a Compliance Certificate substantially in the form of Exhibit A attached hereto, which provides detailed calculations of, among other things compliance by the Borrower and the Guarantor with the Financial Covenants.
“Confidential Information” shall have the meaning set forth in Section 10.16.
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
“Corporate Debt” shall mean, as of any date of determination, the aggregate stated balance sheet amount of all Indebtedness of the Guarantor, the Borrower and its Subsidiaries (or, if higher, the par value of stated face amount of all such Indebtedness) determined on a consolidated basis in accordance with GAAP; provided that Indebtedness in connection with Permitted Warehouse Financings and Permitted Servicing Advance Facility Indebtedness shall not be included in “Corporate Debt”.
“Corporate Debt to Tangible Net Worth Ratio” shall mean the ratio as of the last day of each calendar month (commencing with the first full month ending after the Closing Date) of (a) Corporate Debt as of such date to (b) Adjusted Tangible Net Worth as of such date; provided, however, that for purposes of this calculation the proportion of any assets constituting the asset base for any Permitted Warehouse Financings or Permitted Servicing Advance Facility Indebtedness that is not financed by the applicable lender under such Permitted Warehouse Financing or Permitted Servicing Advance Facility shall not be included in “Adjusted Tangible Net Worth”.
“Cost of Funds” shall mean, with respect to any Interest Accrual Period, the amount of interest accrued with respect to the portion of the aggregate outstanding principal balance of all Advances funded by any Lender at the Cost of Funds Rate.
“Cost of Funds Rate” shall mean the sum of (i) either the Adjusted LIBOR Rate or, if a LIBOR Unavailability Notice has been delivered and has not otherwise been rescinded in accordance with Section 2.11(f)(iii), the Alternative Rate, and (ii)(A) with respect to Advances in respect of Fannie Mae MSRs, the Fannie Mae Margin Rate, (B) with respect to Advances in respect of Freddie Mac MSRs, the Freddie Mac Margin Rate, and (C) with respect to Advances in respect of Ginnie Mae MSRs, the Ginnie Mae Margin Rate.
“Credit Enhancement Agreement” shall mean, collectively, any documents, instruments, guarantees or agreements entered into by the Borrower, any of its Subsidiaries, or any Securitization Entity for the purpose of providing credit support (that is reasonably customary as determined by the Borrower’s senior management) with respect to any Indebtedness or Securitization.
“Credit Manager” shall mean Weston Portfolio Group, LLC and any successor thereto in such capacity.
“Credit Manager Agreement” shall mean the Credit Manager Agreement, dated as of the Closing Date among Credit Manager, the Borrower and Administrative Agent.
“Credit Manager Fees” shall mean the fees due and owing to the Credit Manager as set forth in the Credit Manager Agreement or in any successor agreement thereto, which shall not in any event exceed [***] per annum.
“Dealer” shall mean any mid-market dealer in hedging, swap or similar derivatives contracts identified on Schedule IV hereto, as may be amended from time to time by the Administrative Agent, the Borrower and the Majority Lenders.
“Defaulting Lender” shall mean any Lender, as determined by the Administrative Agent, that has (a) failed to fund any portion of its Advances within three (3) Business Days of the date required to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three (3) Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Advances (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such confirmation in writing by the Administrative Agent and the Borrower), (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a good faith dispute or (e)(i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority of the United States of America or instrumentality thereof so long as such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“Derivatives Contract” shall mean 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. Notwithstanding anything herein to the contrary, neither Administrative Agent nor the Lenders
shall have any rights in any Derivative Contract entered into between the Borrower and any Agency.
“Disposition” and “Disposed” mean, with respect to any Person, any sale or other whole or partial conveyance of all or any portion of such Person’s Property, or any direct or indirect interest therein to a third party, including the granting of any purchase options, rights of first refusal, rights of first offer or similar rights in respect of any portion of such assets or the subjecting of any portion of such assets to restrictions on transfer.
“Distributable Amounts” shall mean, with respect to each Monthly Payment Date, (i) all costs, expenses, reimbursements and indemnification amounts required to be paid to the Administrative Agent and the Lenders pursuant to the terms of the Transaction Documents; (ii) the Credit Manager Fees with respect to such Monthly Payment Date and all costs, expenses, reimbursements and indemnification amounts of the Credit Manager; (iii) the Interest Distribution Amount with respect to such Monthly Payment Date and the Non-Usage Fee, if any, with respect to such Monthly Payment Date; (iv) to the extent a Borrowing Base Deficiency exists as of such Monthly Payment Date, the Borrowing Base Required Payment; (v) with respect to each Monthly Payment Date occurring after the Availability Period End Date, any Additional Principal Amortization Amounts due and payable on such Monthly Payment Date; and (vi) all Breakage Cost and other amounts that are then due and payable pursuant to Section 2.11.
“Dodd-Frank Act” shall mean the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“Dollar”, “Dollars”, “U.S. Dollars” and the symbol “$” shall mean the lawful currency of the United States.
“Effective Advance Rate” shall mean, with respect to the MSRs of any Agency, the quotient of (i) the outstanding Advances with respect to the MSRs of such Agency, divided by (ii) that portion of the Borrowing Base attributed to the value of Fannie Mae MSRs, Freddie Mac MSRs, or Ginnie Mae MSRs, as applicable.
“Eligible Asset” shall mean any Asset that satisfies each of the following criteria, in each case, as of the related Borrowing Date:
(a) for which the Borrower is acting in the capacity of servicer under a Servicing Contract, which Servicing Contract (i) is in full force and effect, and (ii) with respect to which the Borrower is not in default in any material respect thereunder;
(b) which complies with all Applicable Laws in all material respects;
(c) which is genuine and constitutes a legal, valid, binding and irrevocable payment obligation, enforceable in accordance with the terms of the related Servicing Contract, under which it has arisen, subject to no offsets, counterclaims or defenses;
(d) which provides for payment in Dollars;
(e) which was not originated in or subject to the Laws of a jurisdiction whose Laws would make such Asset, the related Servicing Contract or the financing thereof contemplated hereby unlawful, invalid or unenforceable; and is not subject to any legal limitation on transfer;
(f) which is owned solely by the Borrower, subject to a Servicing Contract, and is free and clear of all Liens other than Permitted MSR Collateral Liens and has not been sold, conveyed, pledged or assigned to any other lender, purchaser or Person;
(g) which is not an obligation of the United States of America, any State or any agency or instrumentality or political subdivision thereof (other than an Agency);
(h) in respect of which the information set forth in the Schedule of Assets and the related Servicing Contract is true and correct in all material respects;
(i) in respect of which, each of the representations and warranties set forth on Section 4.1(aa) are true and correct in all material respects;
(j) such Asset constitutes a “general intangible” as defined in the UCC and is not evidenced by an “instrument” or “security” as defined in the UCC as so in effect;
(k) the Borrower has all required licenses and registrations necessary to own the Asset and to service the Mortgage Loan (including to collect amounts owing with respect thereto) in the jurisdiction where the Mortgaged Property is located;
(l) other than pursuant to this Agreement, there exist no Liens, pledges, assignments, or financings of any kind secured by the MSRs (or any portion thereof) of the applicable Agency to which the respective Asset relates; provided, however, that nothing in this clause (l) shall cause any MSR to cease to be an Eligible Asset solely because Advance Reimbursement Amounts related to such MSR have been pledged in connection with Permitted Servicing Advance Facility Indebtedness;
(m) with respect to Fannie Mae MSRs, the Fannie Mae Acknowledgment Agreement has been executed by the parties, and the pledge of such Asset is consented to thereunder;
(n) with respect to Freddie Mac MSRs, (i) either (x) the Initial Freddie Mac Acknowledgment Agreement has been executed by the parties and has not expired pursuant to its terms, or (y) the Freddie Mac Acknowledgment Agreement has been executed by the parties, and (ii) the pledge of such Asset is permitted pursuant to the terms of the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable); and
(o) with respect to Ginnie Mae MSRs, either the Ginnie Mae Acknowledgment Agreement has been executed by the parties, or the Ginnie AA Deadline has not yet occurred.
“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 (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; or (ii) 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, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to the Guarantor, the Borrower or any of their Subsidiaries or any Mortgaged Property.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA), which together with the Borrower is a “single employer” within the meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code or Sections 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” shall mean (i) that a Reportable Event has occurred with respect to any Single-Employer Plan; (ii) the institution of any steps by the Borrower, the 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; (iii) the institution of any steps by the Borrower, the Guarantor, or any ERISA Affiliate to withdraw from any Multi-Employer Plan or written notification of the Borrower or any ERISA Affiliate concerning the imposition of withdrawal liability; (iv) a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code in connection with any Single-Employer Plan or Multi-Employer Plan; (v) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (vi) with respect to a Single-Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived; (vii) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single-Employer Plan; (viii) 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 Internal Revenue Code or Section 303(i)(4) of ERISA); (ix) the insolvency of a Multi-Employer Plan, written notification that a Multi-Employer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA), or any failure by the Borrower or any ERISA Affiliate to make any required payment or contribution to a Multi-Employer Plan; or (x) 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.
“Equity Interests” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“Escrow Account” shall mean any account established by the Borrower into which it deposits and retains therein all collections from mortgagors of the related mortgage loans for the payment of taxes, assessments, insurance premiums or comparable items for the account of such mortgagors.
“Event of Default” shall mean any of the Events of Default described in Section 6.1.
“Excluded Accounts” shall mean (i) all Related Principal and Interest Custodial Accounts (ii) Escrow Accounts and (iii) any segregated deposit accounts or securities account containing solely deposits that constitute pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation, in each case, to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property.
“Excluded Collateral” shall mean (i) all Warehoused Mortgage Loans, all ancillary rights, including Agency Servicing Rights relating to such Warehoused Mortgage Loans, all collection accounts and rights to proceeds relating to such Warehoused Mortgage Loans, all hedge agreements relating to such Warehoused Mortgage Loans, and all purchase agreements relating to such Warehoused Mortgage Loans, in each case, that are subject to such Warehousing Facility with a warehousing party, during such time, but only for such time, as such Warehoused Mortgage Loans are subject to the Warehousing Facility; (ii) all Advance Reimbursement Amounts, servicer advance receivables securing or backing Permitted Servicing Advance Facility Indebtedness, all collection accounts and rights to proceeds relating solely to the securing or backing of Permitted Servicing Advance Facility Indebtedness, and all hedge agreements relating to Permitted Servicing Advance Facility Indebtedness entered into in the ordinary course of business; (iii) any of the Borrower’s or such Subsidiary’s right, title or interest in any lease, permit, license, license agreement, contract or agreement to which the Borrower or such Subsidiary is a party as of the Closing Date or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would, under the express terms of such lease, permit, license, license agreement, contract or agreement on the Closing Date result in a breach of the terms of, or constitute a default under, such lease, permit, license, license agreement, contract or agreement (other than to the extent that (A) any such term has been waived, (B) the consent of the other party to such lease, permit, license, license agreement, contract or agreement has been obtained, or (C) any such term would be rendered ineffective pursuant to Sections 9-406, 9-408, 9-409 of the UCC or other applicable provisions of the UCC of any relevant jurisdiction or any other Applicable Law (including the Bankruptcy Code) or principles of equity); provided, that (x) immediately upon the ineffectiveness, lapse, termination or waiver of any such provision, the Collateral shall include, and the Borrower or the Guarantor shall be deemed to have granted a security interest in, all such right, title and interest as if such provision had never been in effect and (y) the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Administrative Agent’s
unconditional continuing security interest in and liens upon any rights or interests of the Borrower or the Guarantor in or to (1) the proceeds of, or any monies due or to become due under, any such lease, permit, license, license agreement, contract or agreement (including any Accounts, proceeds of Inventory or Equity Interests), and (2) the proceeds from the sale, license, lease, or other dispositions of any such lease, permit, license, license agreement, contract or agreement; (iv) any intent-to-use United States trademark applications for which an amendment to allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office, provided, that, upon such filing and acceptance, such intent- to-use applications shall be included in the definition of Collateral; (v) any Excluded Accounts; and (vi) any fee owned real property and all leasehold property interests (including REO Assets).
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance or Commitment pursuant to a Law in effect on the date on which (a) such Lender acquires such interest in the Advance or Commitment or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.15, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to such Recipient’s failure to comply with Section 2.15(g) and (iv) any withholding Taxes imposed under FATCA.
“Exit Fee” shall have the meaning set forth in the Administrative Agent Fee Letter.
“Fannie Mae” shall mean the Federal National Mortgage Association, its successors and permitted assigns.
“Fannie Mae Acknowledgment Agreement” shall mean the Acknowledgment Agreement to be entered into by and among Fannie Mae, the Borrower and the Administrative Agent on or about the Closing Date, pursuant to which Fannie Mae acknowledges the pledge of the Fannie MSRs under this Agreement.
“Fannie Mae Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Fannie Mae Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Fannie Mae Agency Guide” shall mean with respect to any Fannie Mae Mortgage Loan, the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide, as amended
from time to time, and any related announcements, directives and correspondence issued by Fannie Mae.
“Fannie Mae Contract” shall have the meaning set forth in Section 2.18.
“Fannie Mae Lender Contract” shall mean the Mortgage Selling and Servicing Contract (as mentioned in the Fannie Mae Acknowledgment Agreement), the Fannie Mae Selling Guide (as defined as Selling Guide in the Fannie Mae Acknowledgment Agreement), the Fannie Mae Servicing Guide and all supplemental servicing instructions or directives provided by Fannie Mae, all applicable master agreements, recourse agreements, repurchase agreements, indemnification agreements, loss-sharing agreements, and any other agreements between Fannie Mae and the Borrower, and all as amended, restated or supplemented from time to time (collectively, the “Fannie Mae Lender Contract”), which rights include the right of Fannie Mae to terminate the Fannie Mae Lender Contract with or without cause and the right to sell, or have transferred, the Servicing Rights (as defined in the Fannie Mae Acknowledgment Agreement).
“Fannie Mae Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Fannie Mae Mortgage Loan” shall mean the mortgage loans underlying Fannie Mae MSRs, which shall be identified as “Fannie Mae Mortgage Loans” on the Schedule of Assets.
“Fannie Mae MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, Fannie Mae and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement.
“Fannie Mae Requirements” shall mean the rights and interests of Fannie Mae in and to the Assets arising under the Servicing Contract, Fannie Mae Acknowledgment Agreement, the Fannie Mae Agency Guide, or any other agreement between the Borrower and Fannie Mae.
“Fannie Mae Servicing Guide” shall have the meaning of Servicing Guide as set forth in the Fannie Mae Acknowledgment Agreement.
“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue 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 current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements entered into in connection with the implementation of such sections of the Internal Revenue Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreements, treaty or convention among Governmental Authorities and implementing such sections of the Internal Revenue Code.
“Fee Letter” shall mean the Agency Fee Letter and the Administrative Agent Fee Letter.
“FHA” shall mean The Federal Housing Administration.
“Financial Covenants” shall mean those financial covenants set forth in Section 5.1(a).
“Freddie AA Trigger Date” shall mean April 30, 2019.
“Freddie AA Trigger Event” shall mean the failure of the parties to execute the Freddie Mac Acknowledgment Agreement by the Freddie AA Trigger Date.
“Freddie AA Trigger Period” shall mean, in the event that a Freddie AA Trigger Event has occurred, the period of time beginning on the Freddie AA Trigger Date and ending on such date that the Freddie Mac Acknowledgment Agreement has been executed by the parties.
“Freddie Mac” shall mean the Federal Home Loan Mortgage Corporation, its successors and permitted assigns.
“Freddie Mac Acknowledgment Agreement” shall mean the Amended and Restated Acknowledgment Agreement to be entered into by and among Freddie Mac, the Borrower and the Administrative Agent, which amends and restates the Initial Freddie Mac Acknowledgment Agreement in its entirety.
“Freddie Mac Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Freddie Mac Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Freddie Mac Agency Guide” shall mean with respect to any Freddie Mac Mortgage Loan, the Freddie Mac Single-Family Seller/Servicer Guide, as it may be amended from time to time.
“Freddie Mac MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, Freddie Mac and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement and the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable).
“Freddie Mac Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Freddie Mac Mortgage Loan” shall mean the mortgage loans underlying Freddie Mac MSRs, which shall be identified as “Freddie Mac Mortgage Loans” on the Schedule of Assets.
“Freddie Mac Purchase Documents” has the meaning given to the term “Purchase Documents” in the Freddie Mac Agency Guide.
“Freddie Mac Requirements” shall mean the rights and interests of Freddie Mac in and to the Assets arising under the Servicing Contract, the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable), the Freddie Mac Agency Guide, or any other agreement between the Borrower and Freddie Mac.
“Freddie Mac Servicing Contract” shall mean collectively, with respect to each Freddie Mac Mortgage Loan, the servicing agreement, the Freddie Mac Agency Guide and the Freddie Mac Purchase Documents.
“Funding Base Deficiency” shall exist with respect to the Borrowing Base on any date on which the aggregate amount of Advances outstanding exceeds the lesser of the Aggregate Commitment and the Borrowing Base.
“Futures Account” shall mean an account, if any, opened in the name of Borrower under an agreement governing futures and options on futures transactions between Borrower and a financial institution to be determined by the Borrower and for which an account control agreement shall be entered into by and among the Borrower, such financial institution and the Administrative Agent, pursuant to which the Administrative Agent shall be granted control (as defined in Section 9- 106(b) of the UCC) and the ability to direct such financial institution with respect to permitted withdrawals from the Futures Account following an Event of Default hereunder.
“GAAP” shall mean generally accepted accounting principles as are in effect from time to time and applied on a consistent basis (except for changes in application in which the Borrower’s or Guarantor’s, as applicable, independent certified public accountants and the Administrative Agent reasonably agree) both as to classification of items and amounts.
“Ginnie AA Deadline” shall mean September 30, 2019.
“Ginnie AA Trigger Date” shall mean July 30, 2019.
“Ginnie AA Trigger Event” shall mean the failure of the parties to execute the Ginnie Mae Acknowledgment Agreement by the Ginnie AA Trigger Date.
“Ginnie AA Trigger Period” shall mean, in the event that a Ginnie AA Trigger Event has occurred, the period of time beginning on the Ginnie AA Trigger Date and ending on the earlier of (i) such date that the Ginnie Mae Acknowledgment Agreement has been executed by the parties, and (ii) the Ginnie AA Deadline.
“Ginnie Mae” shall mean the Government National Mortgage Association, its successors and permitted assigns.
“Ginnie Mae Agency Guide” shall mean the Ginnie Mae Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by Ginnie Mae.
“Ginnie Mae Acknowledgment Agreement” shall mean the Acknowledgment Agreement to be entered into by and among Ginnie Mae, the Borrower and the Administrative
Agent, pursuant to which Ginnie Mae acknowledges the terms of this Agreement, and the security interest in Ginnie Mae MSRs being pledged hereunder.
“Ginnie Mae Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Borrowing Base” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Concentration Limit” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Contract” shall have the meaning set forth in Section 2.20.
“Ginnie Mae Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Mortgage Loans” shall mean the mortgage loans underlying Ginnie Mae MSRs, which shall be identified as “Ginnie Mae Mortgage Loans” on the Schedule of Assets.
“Ginnie Mae MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans that have been securitized in mortgage-backed Securitization transactions guaranteed by Ginnie Mae and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement and the Ginnie Mae Acknowledgment Agreement.
“Ginnie Mae Requirements” shall mean the rights and interests of Ginnie Mae under the Ginnie Mae Servicing Contract, the Acknowledgment Agreement, or any other agreement between the Borrower and Ginnie Mae.
“Ginnie Mae Servicing Contract” shall mean the Ginnie Mae Contract as defined in the Ginnie Mae Acknowledgment Agreement.
“GLB Act” has the meaning set forth in Section 10.16(b).
“Governmental Authority” shall mean any national, federal, state, local or other government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
“Governmental Authorization” shall mean any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.
“GS Bank” shall have the meaning set forth in the introductory paragraph hereof.
“Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance or other obligations in respect of a mortgaged property. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Guaranteed Obligations” shall mean, (i) the Borrower’s obligation to repay the Advances, all accrued interest thereon, all required principal payments, and all other amounts payable by the Borrower to the Lenders pursuant to this Agreement, the Loan Note or any other Transaction Document; (ii) in the event of any proceeding for the collection or enforcement of the Borrower’s indebtedness, obligations or liabilities referred to in clause (i), the expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Administrative Agent of its rights under the Transaction Documents, including without limitation, attorneys’ fees and disbursements and court costs; (iii) all of the Borrower’s indemnity obligations to the Indemnitees pursuant to the Transaction Documents; and (iv) to the extent not otherwise included in (i)-(iii) above, any other Obligations under the Transaction Documents.
“Guarantor” shall have the meaning set forth in the introductory paragraph hereof.
“Guaranty” shall mean the Guarantee of the Guaranteed Obligations pursuant to the terms set forth in Article IX hereof.
“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 or other Governmental Authorization, (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.
“Hedge Agreement” shall mean any and all master securities forward transaction agreement(s) between Borrower and a financial institution to be determined by the Borrower, as
such agreement(s) may be amended, restated or otherwise modified from time to time, or any ISDA agreement entered into by the Borrower and any other financial institution on or after the date of this Agreement that the Borrower and the Administrative Agent agree in writing constitutes a replacement thereto.
“HUD” shall mean the United States Department of Housing and Urban Development or any successor thereto.
“Indebtedness” shall mean, as to any Person at any time, as to any Person, (i) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (ii) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business; (iii) indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (iv) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (v) Capitalized Lease Obligations of such Person; (vi) obligations of such Person under repurchase agreements or like arrangements; (vii) indebtedness of others guaranteed by such Person; (viii) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (ix) indebtedness of general partnerships of which such Person is a general partner; and (x) any other indebtedness of such Person by a note, bond, debenture or similar instrument.
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Indemnitees” shall have the meaning set forth in Section 10.5.
“Initial Acknowledgment Agreement” shall mean the Initial Freddie Mac Acknowledgment Agreement.
“Initial Freddie Mac Acknowledgment Agreement” shall mean that certain Acknowledgment Agreement entered into by and among Freddie Mac, the Borrower and the Administrative Agent, on or about the Closing Date, pursuant to which Freddie Mac acknowledges the terms of this Agreement, and the Freddie Mac MSRs being pledged hereunder.
“Insolvency Event” shall mean, 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 [***] 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 [***]; 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.
“Interest Accrual Period” shall mean for each Monthly Payment Date, the calendar month preceding the month in which such Monthly Payment Date occurs; provided, however, that with respect to the first Monthly Payment Date, the Interest Accrual Period shall be the period from and including the Closing Date to the end of the calendar month preceding such Monthly Payment Date.
“Interest Distribution Amount” shall mean for each Loan Note on any Monthly Payment Date, an amount equal to (A) the Cost of Funds for the related Interest Accrual Period with respect to each Lender, as such amount is reported to the Borrower by the Administrative Agent, and (B) any unpaid Interest Distribution Amounts from prior Monthly Payment Dates plus, to the extent permitted by law, interest thereon at the Cost of Funds Rate for the related Interest Accrual Period.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, or any successor statute, and the rules and regulations thereunder, as the same are from time to time in effect.
“Investment” shall mean (i) any direct or indirect purchase or other acquisition by the Borrower, the Guarantor, or any of their Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (other than the Borrower or any Subsidiary); (ii) any direct or indirect loan, advance (other than mortgage loans in the ordinary course of business, warehouse loans secured by mortgage loans and related assets, advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by the Borrower, the Guarantor, or any of their Subsidiaries to any other Person (other than the Borrower or any Subsidiary), including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business, (iii) all investments consisting of any exchange traded or over the counter derivative transaction, including any Derivatives Contract, whether entered into for hedging or speculative purposes, and (iv) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of any Person. The amount of any Investment of the type described in clauses (i), (ii) and (iv) shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.
“IRS” shall mean the Internal Revenue Service of the United States of America.
“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.
“Lenders” shall have the meaning set forth in the introductory paragraph hereof.
“LIBOR” shall mean, for any Interest Accrual Period, an interest rate per annum equal to the rate appearing on the applicable Bloomberg screen page (the “Service”) (or on any successor or substitute page of the Service providing rate quotations comparable to those currently provided on such page of the Service, as reasonably determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) at approximately 11:00 A.M., London time, on the date two (2) Business Days preceding the commencement of such Interest Accrual Period, as the rate for U.S. Dollar deposits with a maturity of three (3) months; provided that LIBOR for the initial Monthly Payment Date shall be two (2) Business Days prior to the Closing Date; provided, further, that if at any time LIBOR shall be less than [***], then LIBOR shall be deemed to be [***] at such time.
“LIBOR Unavailability Notice” shall have the meaning set forth in Section 2.11(f)(i).
“Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and
any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Loan Note” shall mean each Loan Note of the Borrower in the form of Exhibit C attached hereto, payable to the order of a Lender, in the aggregate face amount of up to such Lender’s Commitment.
“Majority Lenders” shall mean, as of any date of determination, the Lenders (other than Defaulting Lenders) that have made Advances with an outstanding principal balance in excess of fifty percent (50%) of the aggregate principal balance of all the Advances outstanding hereunder.
“Margin Rate” shall mean the Fannie Mae Margin Rate, the Freddie Mac Margin Rate, or the Ginnie Mae Margin Rate, as applicable.
“Margin Stock” shall have the meaning set forth in Regulation U.
“Material Adverse Change” shall mean 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” shall mean, any event or circumstance having a material adverse effect on any of the following: (i) the business, property, assets, operations or financial condition of the Borrower or the Guarantor, taken as a whole, (ii) the ability of the Borrower or the Guarantor to perform its respective obligations under the Transaction Documents, (iii) the validity or enforceability of this Agreement or any other Transaction Document to which the Borrower or the Guarantor is a party, or (iv) the existence, perfection, priority or enforceability of the Administrative Agent’s security interest in a material portion of the Collateral.
“Material Debt Facility” shall have the meaning set forth in Section 6.1(j).
“Maturity Date” shall mean the Monthly Payment Date that occurs on the twelfth (12th) month following the Availability Period End Date.
“Maximum Fannie/Freddie DQ Rate” shall mean [***].
“Maximum Ginnie DQ Rate” shall mean [***].
“Minimum Haircut Trigger Event” shall exist at any time that (i) the sum of (1) the product of the most recently determined Administrative Agent Fannie Mae Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, (2) the product of the most recently determined Administrative Agent Freddie Mac Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs, and (3) the product of the most recently determined Administrative Agent Ginnie Mae Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs; less (ii) the outstanding Advances hereunder, does not exceed (iii) [***] of the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs (as reflected in the most recently delivered Monthly Report), calculated as set forth on Schedule V hereto.
“Minimum Liquidity Amount” shall have the meaning set forth in Section 5.1(a)(i).
“Monthly Payment Date” shall mean the 20th day of each calendar month or, if such 20th day is not a Business Day, the next succeeding Business Day, commencing March 20, 2019.
“Monthly Report” shall have the meaning set forth in Section 5.1(bb).
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“Mortgage Loan” shall mean the mortgage loans underlying each Asset, which shall be listed on the Schedule of Assets.
“Mortgaged Property” shall mean the real property (including all improvements, buildings, fixtures and building equipment thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the related Mortgage Loan.
“MSR Collateral” shall have the meaning set forth in Section 2.17.
“MSRs” shall mean mortgage servicing rights, excluding any rights to Advance Reimbursement Amounts, of the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, any Agency, provided that with respect to Freddie Mac MSRs, “MSRs” means the indivisible, conditional, non-delegable right and obligation of Servicer to service the Mortgage Loans for and on behalf of Freddie Mac.
“Multi-Employer Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any of its ERISA Affiliates has contributed, or has been obligated to contribute.
“Nationally Recognized Accounting Firm” shall mean (A) any of PricewaterhouseCoopers LLP, Ernst & Young LLP, KPMG LLC, Deloitte LLP, BDO USA LLC and any successors to any such firm and (B) any other public accounting firm designated by the Borrower and approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.
“NHA” shall mean the National Housing Act.
“Non-Usage Fee” shall have the meaning set forth in Section 2.5(a).
“Non-Usage Fee Percentage” shall have the meaning set forth in the Agency Fee Letter.
“Notice of Borrowing” shall have the meaning set forth in Section 2.4(a).
“Obligations” shall mean and include, with respect to the Borrower, all loans, advances, debts, liabilities, obligations, covenants and duties owing to the Administrative Agent, any Lender or any other Person by the Borrower of any kind or nature, present or future, arising under this Agreement, the Loan Notes or any of the other Transaction Documents, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. The term includes the principal amount of all Advances, together with interest, charges, expenses, fees and expenses chargeable to the Borrower pursuant to this Agreement or any other Transaction Document.
“OFAC” shall have the meaning set forth in Section 4.1(w).
“Optional Prepayment” shall have the meaning set forth in Section 2.10.
“Optional Prepayment Amount” shall have the meaning set forth in Section 2.10.
“Original Credit Agreement” shall have the meaning set forth in the Recitals.
“Original Lenders” shall have the meaning set forth in the Recitals.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient 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 Transaction Document, or sold or assigned an interest in any Asset or Transaction Document).
“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“Participant” shall have the meaning set forth in Section 10.8.
“Participant Register” shall have the meaning set forth in Section 10.8.
“Patriot Act” shall have the meaning set forth in Section 10.19.
“Permitted Collateral Liens” shall mean: (i) the security interest granted hereunder in favor of the Administrative Agent; (ii) interests of any Agency in the Collateral which are pursuant and/or subject to the Agency Guides, Servicing Contracts and/or the Initial Acknowledgment Agreement or Acknowledgment Agreements (as applicable); (iii) banker’s Liens in the nature of rights of setoff arising in the ordinary course of business of the Borrower or the Guarantor, as applicable; (iv) Liens for Taxes (x) not yet due and payable or (y) that are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP; (v) Liens securing judgments not constituting an Event of Default under Section 6.1(f); (vi) Liens on Excluded Collateral of the type described in clause (i) of such definition securing any Permitted Warehouse Financing; (vii) Liens
on Excluded Collateral of the type described in clause (ii) of such definition relating to any Permitted Servicing Advance Facility Indebtedness; (viii) Liens described on Schedule 5.2(a); provided that any such Liens shall only secure the Indebtedness that it secured on the Closing Date and an permitted refinancing thereof; (ix) purchase money Liens on equipment acquired or held by the Borrower or a Subsidiary in the ordinary course of its business to secure Permitted Purchase Money Indebtedness so long as such Lien only (a) attaches to such property and (b) secures the Indebtedness that was incurred to acquire such property or any permitted refinancing in respect thereof; (x) deposits and pledges of cash securing (a) obligations incurred in respect of workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (b) the performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory obligations or (c) obligations on surety or appeal bonds, but only to the extent such deposits or pledges are made or otherwise arise in the ordinary course of business and secure obligations not past due; (xi) Liens of landlords and mortgagees of landlords (a) arising by statute or under any lease or related contractual obligation entered into in the ordinary course of business, (b) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (c) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and (d) for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP; (xii) the title and interest of a lessor or sublessor in and to property leased or subleased (other than through a Capitalized Lease Obligation in the ordinary course of business), in each case extending only to such property; (xiii) Liens that are customary contractual rights of setoff relating to pooled deposit or sweep accounts of any of the Borrower, the Guarantor, or any of their respective Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business; (xiv) following execution of Acknowledgment Agreements with all Agencies, other Liens securing Indebtedness or other obligations in an aggregate principal amount not to exceed [***], which (a) are not on assets included in the Borrowing Base, and (b) are subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms reasonably acceptable to the Administrative Agent; (xv) easements, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions, matters which would be disclosed by an accurate survey or inspection of any real property and other, similar encumbrances and minor title defects affecting real property that do not in the aggregate materially interfere with the ordinary conduct of the business of the Borrower, the Guarantor, or any of their respective Subsidiaries; (xvi) statutory or common law Liens of warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business securing obligations that are not overdue by more than 90 days or that are being contested in good faith by appropriate proceedings, and in respect of which, if applicable, the Borrower, the Guarantor, or any of their respective Subsidiaries shall have set aside on its books reserves in accordance with GAAP; and (xvii) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business in an aggregate amount at any time not to exceed [***]; provided that any such leases, licenses, subleases or sublicenses do not (x) interfere in any material respect with the business of the Borrower, the Guarantor, or any of their respective Subsidiaries or (y) secure any Indebtedness.
“Permitted Disposition” shall mean (i) subject to Section 2.10, sales of Agency Servicing Rights (including sales of delinquent Agency Servicing Rights); (ii) Dispositions of Mortgage Loans and other assets in the ordinary course of business on market terms; provided that
no less than [***] the consideration received for such assets shall be paid in cash; (iii) Subject to Section 2.10 (to the extent relating to any Assets), Dispositions of Collateral to the extent required by any Agency if the failure to comply with such requirement could result in the loss of eligibility to service Mortgage Loans for the related Agency; (iv) any involuntary loss, damage or destruction of property; (v) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property; (vi) Dispositions of obsolete or worn-out equipment in the ordinary course of business; (vii) Dispositions in connection with a Warehousing Facility or Permitted Servicing Advance Facility Indebtedness; (viii) Dispositions pursuant to the Asset Management Strategy and (ix) other Dispositions of assets as long as the value of the assets Disposed does not exceed [***] in any fiscal year.
“Permitted Holders” shall mean Stone Point Capital LLC and/or its Affiliates.
“Permitted Indebtedness” shall mean (i) any Indebtedness owing to the Administrative Agent or any Lender under this Agreement and the other Loan Documents, (ii) existing Indebtedness and any permitted refinancing of such Indebtedness; provided that such Indebtedness shall be listed on Schedule 4.1(q) if such Indebtedness is borrowed money, or the aggregate principal amount of such Indebtedness exceeds [***], (iii) Permitted Purchase Money Indebtedness and any permitted refinancing in respect of such Indebtedness, (iv) Indebtedness in connection with any Permitted Warehouse Financing, (v) Permitted Servicing Advance Facility Indebtedness, (vi) Indebtedness under Hedge Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with the Borrower’s or a Subsidiary’s operations and not for speculative purposes, (vii) Indebtedness in the form of Capitalized Lease Obligations and Equipment and/or loans to finance Capital Expenditures, (viii) cash management obligations and Indebtedness incurred by the Borrower or any Subsidiary in respect of netting services, overdraft protections, commercial credit cards and treasury management services, automated clearing-house arrangements, employee credit card programs, controlled disbursement, ACH transactions, return items, interstate deposit network services, dealer incentive, in each case entered into in the ordinary course of business in connection with cash management, (ix) Indebtedness between or among Loan Parties, (x) intercompany Indebtedness among Persons not a party to this Agreement, (xi) following execution of Acknowledgment Agreements with all Agencies, intercompany Indebtedness between the Borrower, the Guarantor, or their respective Subsidiaries and any Person not a party to this Agreement in an aggregate outstanding amount not to exceed [***] as long as such Indebtedness cannot be repaid prior to payments due under this Agreement upon the occurrence and continuation of an Event of Default (and such Indebtedness is subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms reasonably acceptable to the Administrative Agent) and (xii) following execution of Acknowledgment Agreements with all Agencies, unsecured Indebtedness in an aggregate principal amount not to exceed [***], as long as such unsecured Indebtedness cannot be repaid prior to payments due under this Agreement upon the occurrence and continuation of an Event of Default.
“Permitted MSR Collateral Liens” shall mean: (i) the security interest granted hereunder in favor of the Administrative Agent; (ii) interests of any Agency in the Collateral which are pursuant and/or subject to the Servicing Contract and/or the Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable); (iii) banker’s Liens in the nature of
rights of setoff arising in the ordinary course of business of the Borrower or the Guarantor, as applicable; (iv) Liens for Taxes not yet due and payable; (v) Liens securing judgments not constituting an Event of Default under Section 6.1(f) that are, expressly or by operation of law, subordinate to the Administrative Agent’s Lien; and (vi) Liens securing Permitted Servicing Advance Facility Indebtedness.
“Permitted Purchase Money Indebtedness” shall mean, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred to finance the acquisition of any fixed assets secured by a Lien permitted under clause (ix) of the definition of “Permitted Collateral Liens”; provided, that (a) such Indebtedness is incurred within 20 days after such acquisition, (b) such Indebtedness when incurred shall not exceed the purchase price of the asset financed and (c) the aggregate principal amount of all such Indebtedness shall not exceed [***] at any time outstanding.
“Permitted Servicing Advance Facility Indebtedness” shall mean any Indebtedness of the Borrower incurred under a Servicing Advance Facility.
“Permitted Warehouse Financing” shall mean any warehouse, purchase, repurchase, participation or other similar financing transaction (including any new or existing early buyout line) whereby the warehousing party extends a facility to the Borrower or any Subsidiary to finance the funding or acquisition of mortgage loans, on an interim basis, pending the repurchase of such mortgage loans by the Borrower or such Subsidiary or the subsequent sale and delivery of such mortgage loans, or interests therein, to a third party investor or through a mortgage backed security, which facility is secured by such mortgage loans, or interest therein, or through purchase of such mortgage loans, or interests therein, from the Borrower or such Subsidiary by such warehousing party, but only for such time as such mortgage loan remains financed under such Permitted Warehouse Financing, and which financing is made on prevailing market terms, including with respect to advance rates, financial covenants, and interest rates.
“Person” shall mean any individual, corporation (including a business trust), partnership, limited liability company, joint-stock company, trust, unincorporated organization or association, joint venture, government or political subdivision or agency thereof, or any other entity.
“Pool” means a group of Mortgage Loans, which are the security for a mortgage-backed security issued or guaranteed by an Agency.
“Portfolio” shall mean, with respect to any Agency, all of the Mortgage Loans owned by such Agency and serviced by the Borrower pursuant to the terms of the related Servicing Contract.
“Portfolio Delinquency Rate” means, as of any date of determination, the ratio of (i) the unpaid principal balance of all residential mortgage loans which are serviced by the Borrower for any Agency that have monthly payments that are 60 days or more past due (calculated in accordance with the relevant Agency delinquency calculation methodology) to (ii) the unpaid principal balance of all residential mortgage loans which are serviced by the Borrower for any Agency, in each case, as of the last calendar day of the immediately preceding month.
“Portfolio Hedges” shall mean (i) transactions entered into pursuant to a Hedge Agreement, if any; (ii) transactions entered into in the Futures Account, if any; and (iii) such other transactions as Administrative Agent and Borrower may agree constitute Portfolio Hedges; provided, however, that the term “Portfolio Hedges” shall not include any of the foregoing to the extent such is subject to netting or set-off provisions pursuant to transactions referenced as Excluded Collateral.
“Potential Event of Default” shall mean any occurrence or event that, with the giving of notice, the passage of time or both, would constitute an Event of Default.
“Prepayment Premium” shall have the meaning set forth in the Agency Fee Letter.
“Proceeding” shall mean any claim, litigation, investigation or proceeding.
“Proceeds” shall mean “proceeds” as defined in Section 9-102(a)(64) of the UCC.
“Recipient” shall mean the Administrative Agent, the Lenders or any other recipient of any payment to be made by or on account of any obligation of the Borrower or the Guarantor under this Agreement or any other Transaction Document.
“Records” shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by the Borrower, or any other person or entity with respect to the Assets.
“Redemption Date” shall have the meaning set forth in Section 10.8.
“Register” shall have the meaning set forth in Section 10.8.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Related Principal and Interest Custodial Accounts” means all principal and interest custodial accounts (other than the Collection Account) maintained in the ordinary course of business by the Borrower that relate solely to any Mortgage Loan or Pool that (I)(a) is subject to a Permitted Warehouse Financing, (b) maintained in accordance with an applicable Servicing Contract, or (iii) maintained in connection with the servicing of third party mortgage loans, and (II) do not have deposited therein, with respect to any Assets, any servicing fees or subservicing fees (other than retained yield, Ancillary Income and, after the occurrence of an Event of Default, the applicable Base Servicing Fee) that the Borrower as servicer is entitled to receive free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, pursuant to the Servicing Contracts.
“Related Security” shall mean with respect to any Asset, (a) all security interests or Liens and property subject thereto from time to time, if any, purporting to secure payment of such Asset, whether pursuant to the Servicing Contract related to such Asset or otherwise, together with all financing statements covering any collateral securing such Asset; (b) all guarantees,
indemnities, letters of credit, insurance or other agreements or arrangements of any kind from time to time supporting or securing payment of such Asset whether pursuant to the Servicing Contract related to such Asset or otherwise; and (c) any and all Proceeds of the foregoing.
“REO Assets” shall mean 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.
“Reportable Event” shall mean 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 Pension Benefit Guaranty Corporation 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.
“Responsible Officer” shall mean, with respect to any corporation, limited liability company or partnership, the chief executive officer, chief financial officer, any executive vice president or any senior vice president (the duties of which vice president include the administration of this Agreement, the Transaction Documents or the transactions contemplated hereby or thereby), and the treasurer.
“Schedule of Assets” shall mean the schedule of Assets attached to each Notice of Borrowing that meet the criteria of an Eligible Asset and which includes identifying information relating to such Assets as agreed to between the Borrower and the Administrative Agent, which schedule may be updated from time to time in accordance with the terms of this Agreement.
“Schedule of Ineligible Assets” shall mean the schedule of Assets attached to each Notice of Borrowing that do not meet the criteria of an Eligible Asset, which schedule may be updated from time to time in accordance with the terms of this Agreement.
“Secured Parties” shall mean the Administrative Agent and each Lender.
“Securities” shall mean any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
“Securitization” shall mean a public or private transfer, sale or financing of (i) Servicer Advances or MSRs, (ii) mortgage loans, (iii) installment contracts, (iv) deferred servicing fees; (v) other loans and related assets, and/or (vi) any other assets capable of being securitized, (clauses (i) – (vi) above, collectively, the “Securitization Assets”) by which the Borrower, the Guarantor, or any of their Subsidiaries directly or indirectly securitizes a pool of specified Securitization Assets including, without limitation, any such transaction involving the sale of specified Servicer Advances or mortgage loans to a Securitization Entity.
“Securitization Assets” shall have meaning specified in the definition of “Securitization.”
“Securitization Entity” shall mean (i) any Person other than the Borrower or the Guarantor (whether or not a Subsidiary of the Borrower or the Guarantor) established for the purpose of issuing asset-backed or mortgaged-backed or mortgage pass-through securities of any kind (including collateralized mortgage obligations and net interest margin securities), (ii) any special purpose Subsidiary established for the purpose of selling, depositing or contributing Securitization Assets into a Person described in clause (i) or holding securities in any related Securitization Entity, regardless of whether such person is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Borrower, the Guarantor, or any Subsidiary and (iii) any special purpose Subsidiary of the Borrower or the Guarantor formed exclusively for the purpose of satisfying the requirements of Credit Enhancement Agreements and regardless of whether such Subsidiary is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Borrower, the Guarantor, or any of their Subsidiaries other than under Credit Enhancement Agreements.
“Servicer Advance” shall mean advances made or required to be made by the Borrower or any of its Subsidiaries in its capacity as servicer under a Servicing Contract 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 REO Assets; or that the Borrower or any of its Subsidiaries otherwise advances in its capacity as servicer under such Servicing Contract.
“Servicer Termination Event” shall mean any default, event of default or similar occurrence under the terms of a Servicing Contract, pursuant to which the Borrower may be terminated in its capacity as servicer in accordance with and pursuant to the terms of such Servicing Contract.
“Servicing Advance Facility” shall mean any funding arrangement with a lender, lenders or an indenture trustee, acting on behalf of noteholders, secured by the right to be reimbursed for Servicer Advances made by the Borrower or a special purpose subsidiary of the Borrower as servicer under one or more Servicing Contracts under which financing advances are made to the Borrower based on such advance reimbursement rights (whether or not covered by an Acknowledgment Agreement).
“Servicing Contract” shall mean each of the Fannie Mae Lender Contract, the Freddie Mac Servicing Contract, and the Ginnie Mae Servicing Contract, as applicable.
“Servicing Fee” shall mean, with respect to any Mortgage Loan, the aggregate monthly fee payable to the Borrower in servicing such Mortgage Loan pursuant to the related Servicing Contract, not including any Ancillary Income.
“Single-Employer Plan” shall mean any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multi-Employer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or for which the Borrower 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.
“Specified Contribution” shall have the meaning assigned to such term in Section 6.3.
“Stone Point” shall mean Trident VI, L.P., Trident VI Parallel Fund L.P., Trident VI DE Parallel Fund, L.P. or Trident VI Professionals Fund, L.P.
“Subsidiary” shall mean, with respect to any Person at any time, (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding Capital Stock or shares of beneficial interest normally entitled to vote for the election of one or more directors, managers or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s subsidiaries, or any partnership of which such Person or any of such Peron’s Subsidiaries is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s subsidiaries and (ii) any corporation, trust, partnership or other entity which is Controlled or capable of being Controlled by such Person or one or more of such Person’s subsidiaries.
“Supermajority Lenders” shall mean, as of any date of determination, the Lenders (other than Defaulting Lenders) that have made Advances with an outstanding principal balance in excess of sixty-six and two thirds percent (66 2/3%) of the aggregate principal balance of all the Advances outstanding hereunder.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, and including any interest, additions to tax or penalties applicable thereto.
“Transactions” shall mean, collectively, the transactions to occur on or prior to the Closing Date and thereafter on each Borrowing Date pursuant to the Transaction Documents, including (a) the execution, delivery and performance of the Transaction Documents and the Advances hereunder and (b) the payment of all fees and expenses due and owing in connection with the foregoing.
“Transaction Documents” shall mean this Agreement, the Loan Notes, the Fee Letters, the Account Control Agreement, the Initial Acknowledgment Agreement, the Acknowledgment Agreements, and any other agreements, instruments, certificates or documents delivered or contemplated to be delivered hereunder or thereunder or in connection herewith or therewith, as the same may be supplemented or amended from time to time hereafter in accordance herewith or therewith, and “Transaction Document” shall mean any of the Transaction Documents.
“Trigger Event” shall mean the occurrence and continuation of any of the following:
(i) The average of the three (3) most recent monthly Portfolio Delinquency Rates with respect to the Borrower’s servicing portfolio relating to Fannie Mae and Freddie Mac is greater than the Maximum Fannie/Freddie DQ Rate;
(ii) The average of the three (3) most recent monthly Portfolio Delinquency Rates with respect to the Borrower’s servicing portfolio relating to Ginnie Mae is greater than the Maximum Ginnie DQ Rate; or
(iii) Two year “compare ratio” assigned to the Borrower by FHA under its “Neighborhood Watch” program exceeds [***];
provided that the Trigger Event shall be deemed to be cured if (a) in the case of (i) and (ii) above, the foregoing delinquency rates returning and remaining below the specified Maximum Rate for a period of [***] and (b) in the case of (iii) above during any period when clause (iii) is applicable, immediately upon the foregoing “compare ratio” decreasing below [***]; provided further that in no event will such Trigger Event be deemed to have been satisfied at any time when an Event of Default shall have occurred and be continuing.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in any applicable jurisdiction.
“United States” shall mean the United States of America.
“Unused Portion” shall mean, with respect to a Lender’s Commitment as of any day, the excess of (x) the Commitment of such Lender as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Advances of such Lender as of 5:00 P.M. (New York City time) on such day.
“Upfront Fee” shall have the meaning set forth in the Administrative Agent Fee Letter.
“U.S. Person” shall mean any Person who is a U.S. person within the meaning of Section 7701(a)(30) of the Internal Revenue Code.
“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.15(G)(ii)(B)(3).
“VA” shall mean the U.S. Department of Veterans Affairs.
“Valuation Agent” shall mean the valuation service providers identified on Schedule III hereto, as may be amended from time to time by the Administrative Agent, the Borrower and the Majority Lenders.
“Valuation Agent Asset Value” shall mean, as of any date of determination, the sum of (i) the Valuation Agent Fannie Mae Asset Value, (ii) the Valuation Agent Freddie Mac Asset Value, and (iii) the Valuation Agent Ginnie Mae Asset Value.
“Valuation Agent Fannie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Fannie Mae Advance Rate, (ii) the Valuation Agent Fannie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs.
“Valuation Agent Fannie Mae Market Value Percentage” shall mean, with respect to any Fannie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Fannie Mae MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Fannie Mae Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Freddie Mac Asset Value” shall mean, as of any date of determination, the product of (i) the Freddie Mac Advance Rate, (ii) the Valuation Agent Freddie Mac Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs.
“Valuation Agent Freddie Mac Market Value Percentage” shall mean, with respect to any Freddie Mac MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Freddie Mac MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Freddie Mac Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Ginnie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Ginnie Mae Advance Rate, (ii) the Valuation Agent Ginnie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs.
“Valuation Agent Ginnie Mae Market Value Percentage” shall mean, with respect to any Ginnie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Ginnie Mae MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Ginnie Mae Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Market Value Percentage” means the Valuation Agent Fannie Mae Market Value Percentage, the Valuation Agent Freddie Mac Market Value Percentage, or the Valuation Agent Ginnie Mae Market Value Percentage, as applicable.
“Warehoused Mortgage Loans” shall mean Mortgage Loans which have been pledged to or purchased by a warehousing party or in which the warehousing party has acquired a participation interest pursuant to a Permitted Warehouse Financing.
Section 1.2 Computation of Time Periods. In this Agreement, 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 means “to but excluding” and the word “through” means “through and including.”
Section 1.3 Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein), (B) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (C) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (D) all references herein to Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (E) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing, (F) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re-enacted or expressly replaced, (G) “or” is not exclusive, and (H) capitalized terms used herein and not defined, but which are defined in the Agency Fee Letter or the Administrative Agent Fee Letter shall have the meaning specified in such Fee Letter.
Section 1.4 Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein; provided that if the Borrower notifies the Administrative Agent that the Borrower or the Guarantor wishes to amend any Financial Covenant to eliminate the effect of any change in GAAP on the operation of such covenant, then the Borrower’s or Guarantor’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower or Guarantor, as applicable, and the Administrative Agent.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1 Establishment of the Credit Facility. On the Closing Date, and subject to and upon the terms and conditions set forth in this Agreement and the other Transaction Documents, the Administrative Agent and the Lenders agree to establish the credit facility set forth in this Agreement for the benefit of the Borrower.
Section 2.2 The Advances . Upon the terms and subject to the conditions hereinafter set forth, the Lenders, severally but not jointly, shall from time to time during the Availability Period, make loans to the Borrower on a revolving basis that are secured by the Collateral. Each such Advance shall be made by a Lender in respect of its revolving Commitment; provided, however, that no such Advance shall cause (i) a Borrowing Base Deficiency or a Funding Base Deficiency; (ii) with respect to any Lender, to exceed such Lender’s Commitment; or (iii) following the Closing Date and the initial Advance, [***] or more of the Aggregate Commitment to be drawn in any rolling thirty (30) day period, unless otherwise agreed by the Administrative Agent. Within the limits of each Lender’s Commitment, any Advances prepaid may be reborrowed under this Section 2.2.
Section 2.3 Use of Proceeds. Except as otherwise provided in Section 2.18, Section 2.19, and Section 2.20 herein, proceeds of Advances shall only be used by the Borrower to (A) purchase, in the ordinary course of business, Agency eligible MSRs and related assets, (B) pay certain fees and expenses incurred in connection with the establishment of the credit facility set forth in this Agreement, (C) subject to Section 2.19, make cash distributions from time to time pursuant to Section 5.2(d) in an amount not exceeding the excess of the Borrowing Base over the outstanding principal amount of the Advances and (D) for general corporate purposes.
Section 2.4 Making the Advances. (a) Except as otherwise provided herein, the Borrower may request the Lenders to make Advances to the Borrower no more frequently than [***] per week by the delivery to the Administrative Agent, not later than [***] (New York City time) on any Business Day of a written notice of such request substantially in the form of Exhibit B attached hereto (each such notice, a “Notice of Borrowing”), together with a duly completed Borrowing Base Certificate, signed by a Responsible Officer and including a Schedule of Assets and Schedule of Ineligible Assets. Any Notice of Borrowing or Borrowing Base Certificate received by the Administrative Agent after the time specified in the immediately preceding sentence shall be deemed to have been received by the Administrative Agent on the next Business Day, and to the extent that results in the proposed Borrowing Date being earlier than three (3) Business Days after the date of delivery of such Notice of Borrowing, then the date specified in such Notice of Borrowing as the proposed Borrowing Date of an Advance shall be deemed to be the Business Day immediately succeeding the proposed Borrowing Date of such Advance originally specified in such Notice of Borrowing. The proposed Borrowing Date specified in a Notice of Borrowing shall be no earlier than three (3) Business Days after the date of delivery of such Notice of Borrowing and may be up to a maximum of thirty (30) days after the date of delivery of such Notice of Borrowing. Unless otherwise provided herein, each Notice of Borrowing shall be irrevocable and shall specify (i) the aggregate principal amount of the Advance requested, and (ii) the Borrowing Date (which shall be a Business Day).
(b) The aggregate principal amount of each Advance shall not be less than [***].
(c) Upon receipt by the Administrative Agent of a Notice of Borrowing and a Borrowing Base Certificate from the Borrower, the Administrative Agent shall promptly (on the date of its deemed receipt of the related Borrowing Base Certificate) deliver to each Lender a copy of such Notice of Borrowing and a written notice specifying each Lender’s Applicable Percentage of the amount requested by the Borrower pursuant to the applicable Notice of Borrowing. Thereafter, each Lender shall make Advances in an aggregate amount equal to its Applicable Percentage of the amount requested by the Borrower pursuant to the applicable Notice of Borrowing to the Administrative Agent’s Account by no later than [***] (New York City time) on the Borrowing Date specified or deemed specified in such Notice of Borrowing, and the Administrative Agent shall promptly make such Advance available to the Borrower in U.S. Dollars to the Borrower’s Account.
Section 2.5 Fees.
(a) Non-Usage Fee. On each Monthly Payment Date during the Availability Period, the Borrower agrees to pay to the Administrative Agent, for the ratable benefit of the Lenders and as consideration for each Lender’s Commitment hereunder, a non-usage fee in Dollars (the “Non-Usage Fee”) in an amount equal to the (1) the applicable Non-Usage Fee Percentage as described in the Agency Fee Letter, if any, multiplied by (2) the daily average Unused Portion of the Aggregate Commitment in the immediately preceding calendar month. Accrued Non-Usage Fees shall be due and payable in arrears on each Monthly Payment Date, and on the last day of the Availability Period. Computations of the Non-Usage Fee shall be made by the Administrative Agent on the basis of a year of 360 days and for the actual number of days elapsed, and, with respect to each Lender, pro rata based on such Lender’s Commitment.
Section 2.6 Borrowing Base. (a) The Administrative Agent may, in its sole and absolute discretion, and shall, at the request of the Majority Lenders, on any date, calculate the Borrowing Base and shall provide written notice thereof to the Borrower. To the extent any such calculation results in a Borrowing Base Deficiency, the Administrative Agent shall deliver a notice to the Borrower and each Lender (a “Borrowing Base Deficiency Notice”), setting forth the calculation thereof (which shall be conclusive absent manifest error), and the Borrowing Base Required Payment to be made by the Borrower as a result of such calculation (which amount shall be paid in accordance with Section 2.9). At the Administrative Agent’s discretion, the Administrative Agent may obtain valuation reports with respect to the Administrative Agent Asset Value from a Valuation Agent, at any time and from time to time on a non-binding basis; provided that the Borrower shall not be responsible for payment of any costs, expenses, fees or other amounts in connection with such valuation report except in connection with a Borrowing Base Dispute pursuant to Section 2.6(b).
(b) Notwithstanding the foregoing or anything to the contrary contained herein, except during an Acknowledgment Agreement Trigger Period, the Borrower shall have the right to dispute the Administrative Agent’s calculation of the Administrative Agent Asset Value by notifying the Administrative Agent and the Lenders within three (3) Business Days after the Borrower receives a Borrowing Base Deficiency Notice (a “Borrowing Base Dispute”). If the
Borrower initiates a Borrowing Base Dispute, then the Administrative Agent, on one hand, and the Borrower, on the other hand, shall each promptly direct separate Valuation Agents, to prepare a valuation report with respect to such Administrative Agent Asset Value. The average of the midpoint values indicated in the two valuation reports submitted by the Valuation Agents shall become the conclusive Valuation Agent Market Value Percentage of the related MSRs that constitute Eligible Assets, binding upon all Parties, absent manifest error.
(c) Any costs, expenses, fees and other amounts due and owing to any Valuation Agent or Dealer in connection with the engagement of such Valuation Agent or Dealer in connection with a Borrowing Base Dispute pursuant to Section 2.6(b) shall be an Obligation of the Borrower and shall become due and payable on the immediately succeeding Monthly Payment Date in accordance with Section 2.7.
Section 2.7 Repayment of the Advances. (a) The outstanding principal balance of the Advances and the other Obligations owing under this Agreement, together with all accrued but unpaid interest thereon, shall be due and payable on the Maturity Date.
(b) On each Monthly Payment Date, except during any Acknowledgment Agreement Trigger Period or following the occurrence and during the continuation of an Event of Default, the Borrower shall cause the payment in full of all Distributable Amounts to the Administrative Agent for payment to the applicable Parties; provided that the Borrower shall pay the Credit Manager Fees directly to the Credit Manager on or prior to each Monthly Payment Date as provided in the Credit Manager Agreement.
(c) On each Monthly Payment Date during any Acknowledgment Agreement Trigger Period or following the occurrence and during the continuation of an Event of Default, amounts on deposit in the Collection Account, including Collections deposited therein during the related Collection Period shall, at the direction of the Administrative Agent, be disbursed by the Account Bank from the Collection Account and applied on such Monthly Payment Date in the following order of priority:
(i) first, to the Borrower, the Base Servicing Fee with respect to the related Collection Period;
(ii)
second, ratably (a) to the Administrative Agent, all costs, expenses, reimbursements and indemnification amounts owed to the Administrative Agent pursuant to the terms hereof, and (b) to the Credit Manager, the Credit Manager Fees with respect to such Monthly Payment Date and all costs, expenses, reimbursements and indemnification amounts owed to the Credit Manager pursuant to the terms of the Credit Manager Agreement;
(iii) third, to the Administrative Agent, on behalf of the Lenders, the Interest Distribution Amount with respect to such Monthly Payment Date;
(iv) fourth, to the Administrative Agent, on behalf of the Lenders, the payment of the Non-Usage Fee with respect to such Monthly Payment Date;
(v) fifth, to the Administrative Agent, on behalf of the Lenders, pro rata, based on the Advances held by such Lender, all remaining amounts to be applied to the reduction of such Advances to zero on such date;
(vi) sixth, to the Administrative Agent, on behalf of the applicable party, all Breakage Cost and other amounts that are then due and payable pursuant to Section 2.11;
(vii) seventh, to the Administrative Agent, on behalf of the applicable party, all fees, expenses, indemnitees and other amounts that are due and payable by the Borrower and incurred in connection with this Agreement and required to be paid or reimbursed hereunder, the financing, management, operation or maintenance of the Assets or the Transaction Documents, including to consultants and experts retained by the Borrower (including attorneys and accountants) and verification agents and Dealers retained pursuant to the terms hereof;
(viii) eighth, to the Administrative Agent, on behalf of any applicable party, the ratable payment of all other Obligations that are past due or payable on such date; and
(ix) ninth, all remaining amounts to the Borrower’s Account on such date.
Notwithstanding anything to the contrary in this Agreement or any of the other Transaction Documents, all terms and provisions of this Agreement and the other Transaction Documents are and shall be subject to the terms and provisions of each Acknowledgment Agreement. To the extent that any conflict necessarily exists or shall be adjudged to exist between the terms and provisions of this Agreement and those of the applicable Acknowledgment Agreement, solely with respect to the relationship and agreements between Borrower and/or Administrative Agent, on the one hand, and the applicable Agency, on the other hand, the terms and provisions of the applicable Acknowledgment Agreement shall govern and control.
(d) Notwithstanding the foregoing, (1) during an Acknowledgment Agreement Trigger Period, in the event that amounts available for distribution from the Collection Account pursuant to Section 2.7(c) are insufficient to pay in full all Distributable Amounts due and owing on any Monthly Payment Date, then the Borrower shall cause the payment in full of the applicable deficiency to the Administrative Agent for payment to the applicable Parties, and (2) following the occurrence and during the continuation of an Event of Default, in the event that amounts available for distribution from the Collection Account pursuant to Section 2.7(c) are insufficient to pay in full all Obligations then due and owing on any day, then the Borrower shall cause the payment in full of the applicable deficiency to the Administrative Agent for payment to the applicable Parties.
Section 2.8 [Reserved].
Section 2.9 Mandatory Prepayments of Advances.
(a) Borrowing Base Deficiency.
(i) If a Borrowing Base Deficiency exists on any date, the Borrower shall pay to the Administrative Agent, for the account of the Lenders, the Borrowing Base Required Payment, together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment. All such amounts shall become due and payable (i) no later than 5:00 p.m. (New York City time) on the [***] following the Borrower’s receipt of a Borrowing Base Deficiency Notice, or (ii) if Stone Point provides Lender a guarantee of payment for the amounts due hereunder, in such form as is acceptable to Lender in its sole discretion, then such amounts shall be due and payable no later than 5:00 p.m. (New York City time) on such date that is [***] following the Borrower’s receipt of a Borrowing Base Deficiency Notice. For the avoidance of doubt, the [***] period during which the Borrower may dispute the Administrative Agent’s determination of the Administrative Agent Asset Value set forth in Section 2.6 shall not operate to extend the cure periods referenced in the preceding sentence.
(ii) In lieu of making any prepayment in accordance with clause (i) above to eliminate a Borrowing Base Deficiency, if such Borrowing Base Deficiency occurs during the Availability Period the Borrower may identify as Collateral additional Fannie Mae MSRs, Freddie Mac MSRs, or Ginnie Mae MSRs, as applicable, in an amount equal to the Borrowing Base Required Payment. Upon such identification, such MSRs shall be Collateral hereunder without any further action by the Administrative Agent or the Lenders; provided that, immediately prior to and immediately after giving effect to such contribution, (i) no Event of Default exists, and (ii) each of the representations, warranties, covenants and agreements made or deemed to be made by the Borrower under or in connection with this Agreement and the Transaction Documents is true and correct in all material respects as of such date.
Section 2.10 Optional Prepayments; Removal of Collateral.
(a) Optional Prepayments. At any time, the Borrower may, at its option, prepay all or any portion of the Advances outstanding (an “Optional Prepayment”) on any date (the “Redemption Date”) upon prior written notice delivered to the Administrative Agent not later than 12:00 p.m. (New York City time) three (3) Business Days prior to the date of such payment; provided that the Borrower shall be permitted to deliver such notice no more frequently than [***] times during any week. Each such notice shall be in the form attached hereto as Exhibit H and shall specify (i) the aggregate amount of the prepayment to be made on the Advances outstanding (such amount, if applicable, the “Optional Prepayment Amount”), (ii) the Redemption Date, and (iii) if applicable, the Collateral to be released on such Redemption Date, and shall include a duly completed Borrowing Base Certificate containing information accurate as of such date. Each Optional Prepayment shall be in a minimum principal amount equal to [***] and in integral multiples of [***] in excess thereof. Any prepayment of the Advances outstanding shall be accompanied by a payment of all accrued and unpaid interest on the amount prepaid, all Breakage Costs, Exit Fees, any applicable Prepayment Premiums and all outstanding indemnity Obligations of the Borrower, then due and owing under this Agreement through such Redemption Date; provided that the Prepayment Premium shall only be payable on the dates as set forth in the definition thereof.
(b) Removal of Collateral. Notwithstanding language herein to the contrary, after giving effect to any release of Collateral (whether in connection with an Optional Prepayment pursuant to Section 2.10(a) above or pursuant to any other provision of this Agreement), the following conditions must be satisfied:
(i) no selection procedures are used with respect to identification of Assets to be released or retained that are materially adverse to the Secured Parties;
(ii) no Borrowing Base Deficiency, Potential Event of Default or Event of Default shall exist either prior to, or after giving effect to the prepayment of the applicable portion of the Advances outstanding and/or the release of the related Collateral (unless, in the case of a Borrowing Base Deficiency or Funding Base Deficiency, (x) the amount of such deficiency is eliminated as a result of such prepayment and release or (y) the release is in connection with a sale to an unaffiliated third-party purchaser and the following conditions are satisfied (i) the purchaser has agreed to pay the purchase price for the released Collateral to the Administrative Agent as a prepayment of the Advances, and (ii) after giving effect to such prepayment, the weighted average of the Effective Advance Rates for the Agencies is the same or lower as it had been prior to the release of the related Collateral); and
(iii) the representations and warranties set forth in Article IV are true and correct as of such Redemption Date (except to the extent such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) after giving effect to the prepayment of the applicable portion of the Advances outstanding and release of the related Collateral.
Section 2.11 Breakage Costs; Increased Costs; Capital Adequacy; Additional Indemnifications; LIBOR Unavailability; Illegality.
(a) Breakage Costs. (i) If an Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower hereby agrees to pay any Breakage Costs resulting therefrom on the next Monthly Payment Date promptly following the date on which such Breakage Costs are incurred in accordance with Section 2.7 and written demand is received from any such Lender (setting forth in reasonable detail the basis for calculating such compensation).
(ii) Reserved.
(b) Increased Costs. If (i) the introduction of or any change (including any change by way of imposition or increase of reserve requirements) in or in the interpretation of any law or regulation by a Governmental Authority, (ii) the compliance by any Lender or the Administrative Agent (each of which, an “Affected Party”) with any guideline or request from any Governmental Authority (whether or not having the force of law) or (iii) any Change in Law, (a) shall subject any Affected Party to any Taxes (other than (x) Indemnified Taxes, (y) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (z) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto or (b) shall impose, modify or deem
applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party or (b) shall impose any other condition affecting the rights of any Lender and the Administrative Agent hereunder, the result of which is to increase the cost to any Affected Party under this Agreement or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement below that which such Affected Party would have received but for such occurrence, then within 30 days following the receipt of written demand by such Affected Party (provided that such Affected Party shall provide the Borrower with notice within a reasonable period of time following such Affected Party’s discovery of such increased costs or reductions and shall include calculations of such compensation in reasonable detail), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered to the extent such additional or increased costs or reduction are incurred or suffered in connection with any obligation to make Advances hereunder, any of the rights of such Lender or the Administrative Agent hereunder, or any payment made hereunder.
(c) Capital Adequacy. If (i) the introduction of or any change after the Closing Date in or in the interpretation of any law, guideline, rule, regulation, directive or request, (ii) compliance by any Affected Party after the Closing Date with any law, guideline, rule, regulation, directive or request from any central bank or other Governmental Authority or agency (whether or not having the force of law), including compliance by an Affected Party with any request or directive regarding capital adequacy or (iii) any other Change in Law has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such introduction, change, compliance or Change in Law (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then within 30 days following the receipt of written demand by such Affected Party (which written demand shall be accompanied by a statement setting forth the basis for such demand in reasonable detail), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such reduction.
(d) If as a result of any event or circumstance similar to those described in Sections 2.11(a), 2.11(b) or 2.11(c), any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then within 30 days following the receipt of written demand by such Affected Party (which written demand shall be accompanied by a statement setting forth the basis for such demand in reasonable detail), the Borrower shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts actually paid by it.
(e) In determining any amount provided for in this Section 2.11, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a
claim under this Section 2.11 shall submit to the Borrower a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent manifest error.
(f) LIBOR Unavailability. Notwithstanding anything to the contrary,
(i) in the event that the Administrative Agent shall have reasonably determined in good faith that U.S. Dollar deposits in the principal amounts of the Advances are not generally available in the London interbank market, or that the Administrative Agent has been notified in writing by the Majority Lenders that the rates at which such U.S. Dollar deposits are being offered will not adequately and fairly in good faith reflect the cost to the Majority Lenders of making or maintaining loans at LIBOR, or that reasonable means do not exist for ascertaining LIBOR, the Administrative Agent shall, as soon as practicable thereafter, notify the Borrower and the Lenders of such determination (a “LIBOR Unavailability Notice”). The Administrative Agent may rescind any such LIBOR Unavailability Notice in the event that the circumstances giving rise to such notice no longer exist (such notice to be provided by the Administrative Agent promptly upon written notice of the Majority Lenders that the circumstances giving rise to such LIBOR Unavailability Notice have ceased to exist).
(ii) In the event that LIBOR is phased out, and a new benchmark is established or administered by the Financial Conduct Authority or ICE Benchmark Administration or other comparable authority, and such new benchmark with a three-month maturity is readily available through Bloomberg or a comparable medium, then the Administrative Agent shall utilize such new benchmark with a three-month maturity for all purposes hereof in place of LIBOR.
(iii) If a LIBOR Unavailability Notice has been delivered but not rescinded, LIBOR cannot be determined or has been phased out and no new benchmark under clause (ii) has been established, the Administrative Agent and the Borrower shall endeavor to designate a comparable alternative benchmark (the “Alternative Rate”), which may include reference to the arithmetic average of the rates of interest per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds are offered to the Administrative Agent at 11:00 a.m. (London, England time) two (2) London business days before the beginning of such three-month period by three (3) or more major banks in the interbank Eurodollar market selected by the Administrative Agent for delivery on the first day of and for a period equal to such three-month period and in an amount equal or comparable to the principal amount of the portion of the Advance on which “LIBOR” is being calculated, and shall give notice thereof to the Borrower by telephone, facsimile, or other electronic means as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower that the circumstances giving rise to the determination of the Alternative Rate no longer exist or that LIBOR can be determined or a new benchmark under clause (ii) has been established, all calculations of interest by reference to LIBOR hereunder shall instead be made by reference to the Alternative Rate.
(g) Illegality. Notwithstanding any other provision of this Agreement, in the event that any Lender shall have reasonably determined in good faith that any Change in Law shall
make it unlawful for such Lender to fund or maintain any Advance by compliance by such Lender in good faith with any Law, then such Lender shall promptly notify the Administrative Agent and the Borrower, following which (a) such Lender’s obligation to fund any Advance shall be suspended until such time as such Lender may again fund and maintain its Advances hereunder, (b) if a Notice of Borrowing has been submitted pursuant to Section 2.4(a) but the affected Advance has not been funded, the Borrower may revoke such Notice of Borrowing by giving written notice to the Administrative Agent thereof on the same day that the Borrower was notified by the Lender pursuant to this Section 2.11(g) and (c) if such Law shall so mandate, such Lender’s outstanding Advances shall be prepaid by the Borrower, together with accrued and unpaid interest thereon and all other amounts payable by the Borrower to such Lender under this Agreement, on the last day of the Interest Accrual Period with respect to such Advances (or before such date as shall be mandated by such Law), it being acknowledged that any amounts prepaid pursuant to clause (c) above may be paid with an Advance or Advances made with an interest rate calculated pursuant to the Alternative Rate.
Section 2.12 Payments and Computations. (a) The Borrower (through the Administrative Agent pursuant to Section 2.7) shall make each payment and prepayment hereunder and under the Loan Notes in respect of principal, interest, expenses, indemnities, fees or other Obligations due from the Borrower to the Administrative Agent or any Lender not later than 3:00 P.M. (New York City time) on the day when due in U.S. Dollars to the Administrative Agent at its address referred to in Section 10.3 or to the Administrative Agent’s Account in immediately available, same-day funds. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the other Transaction Documents to more than one Lender, then to such Lenders ratably in accordance with the amounts of such respective Obligations then payable to such Lenders and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender, then to such Lender, in each case to be applied in accordance with Section 2.7. All computations of interest shall be made by the Administrative Agent on the basis of a year of 360 days in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(b) All payments to be made in respect of fees due hereunder to the Administrative Agent or any Lender from the Borrower shall be made pursuant to Section 2.7, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature (other than with respect to Taxes pursuant to Section 2.15), and an action therefor shall immediately accrue.
Section 2.13 Payment on Non-Business Days. Whenever any payment hereunder or under the Loan Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.
Section 2.14 Extension of Availability Period. (a) The Borrower may, by notice to the Administrative Agent following the two year anniversary of the Closing Date, request the Administrative Agent to extend the Availability Period End Date.
(b) The Administrative Agent, with the written consent of each Lender (other than any Defaulting Lender), shall advise the Borrower whether the Lenders agree to any requested extension of the Availability Period End Date within thirty (30) days after the Borrower has given notice to the Administrative Agent that it requests an extension of the Availability Period End Date; provided, that if the Lenders do not agree to any requested extension, the Borrower may renew its request for an extension at any time or from time to time prior to the end of the Availability Period End Date then in effect; provided further, that the Administrative Agent’s failure to respond within such period shall constitute the Administrative Agent’s denial of the requested extension.
(c) Any such request to extend the Availability Period End Date shall be effective only upon the written agreement of the Administrative Agent, the Lenders, the Borrower, and the Guarantor. Upon entering into such written agreement, the date referenced in the definition of “Availability Period End Date” shall be automatically extended for the amount of time agreed to by the Administrative Agent, the Lenders, the Borrower, and the Guarantor. This Section shall supersede any provisions in Section 10.2 to the contrary.
Section 2.15 Taxes.
(a) Defined Terms. For purposes of this Section 2.15 the term “applicable Law” includes FATCA.
(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d) Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment
to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Recipient (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.
(e) Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.8 relating to the maintenance of the Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Transaction Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 2.15(e).
(f) Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.15, the Borrower shall deliver to the Administrative Agent 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 the Administrative Agent.
(g) Status of Recipients.
(i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.15(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.
(ii) Without limiting the generality of the foregoing,
(A) any Recipient that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Recipient is exempt from U.S. federal backup withholding tax;
(B) any Recipient that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the Borrower or Administrative Agent) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of a Recipient claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Transaction Document, executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Transaction Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed originals of IRS Form W-8ECI;
(3) in the case of a Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate (in a form reasonably acceptable to the Borrower) to the effect that such Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable; or
(4) to the extent a Recipient is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9 or other certification documents from each beneficial owner, as applicable; provided that if the Recipient is a partnership and one or more direct or indirect partners of such Recipient are claiming the portfolio interest exemption, such Recipient may provide a
U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
(C) any Recipient which is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Recipient under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (d), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h) [Reserved].
(i) Treatment of Certain Refunds. If any party determines, in its sole 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 2.15 (including by the payment of additional amounts pursuant to this Section 2.15), it shall pay to the indemnifying party 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 such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.15(i) (plus
any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.15(i), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.15(i) the payment of which would place the indemnified party in a less favorable net after -Tax position than the indemnified party 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 or additional amounts with respect to such Tax had never been paid. This Section 2.15(i) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(j) Survival. Each party’s obligations under this Section 2.15 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.
Section 2.16 Defaulting Lenders. (a) Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(i) The Non-Usage Fee shall cease to accrue on the Commitment of such Defaulting Lender pursuant to Section 2.5; and
(ii) the Commitment of such Defaulting Lender shall not be included in determining whether all Lenders or the Majority Lenders, as applicable, have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 10.2); provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender.
(b) If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent shall so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender shall purchase at par such of the Advances of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Advances in accordance with its Applicable Percentage, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender having been a Defaulting Lender.
Section 2.17 Security Interest. (a) Subject to the terms of the Initial Acknowledgment Agreement and the Acknowledgment Agreements (as applicable), the Borrower hereby grants, pledges and assigns to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) as security for the payment and performance by the Borrower of
the Obligations, a security interest in all of the Borrower’s right, title and interest in, to and under, in any case, whether now held or hereafter acquired (i) all Fannie Mae MSRs; (ii) all Freddie Mac MSRs; (iii) all Ginnie Mae MSRs; (iv) the Borrower’s rights (but not its obligations) under the Transaction Documents including without limitation, any rights to receive payments thereunder or any rights to collateral thereunder whether now held or hereafter acquired, now existing or hereafter created; (v) all collateral however defined or described under the Transaction Documents to the extent not otherwise included above; (vi) all Related Security; (vii) [reserved]; (viii) all Records relating to and all proceeds of the foregoing (collectively, (i)-(viii), the “MSR Collateral”), and (ix) all Additional Collateral (collectively, the “Borrower Collateral”). Notwithstanding anything herein to the contrary, the term “Borrower Collateral” shall not include, and the grant, pledge and assignment of a security interest contained in this Section 2.17 shall not include a security interest in any Excluded Collateral.
(b) Additionally, the Guarantor hereby grants, pledges and assigns to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) as security for the payment and performance by the Borrower of the Obligations and the Guarantor of the Guaranteed Obligations, a security interest in all of the Guarantor’s right, title and interest in, to and under, in any case, whether now owned or hereafter acquired, all Additional Guarantor Collateral (together with the Borrower Collateral, the “Collateral”). For the avoidance of doubt, each grant, pledge, or assignment of the Collateral hereunder shall, subject to the rights of Freddie Mac under the Initial Freddie Mac Acknowledgment Agreement and the Freddie Mac Acknowledgment Agreement (as applicable), include all of the Borrower’s and Guarantor’s rights, but not its obligations, with respect to such Collateral.
(c) The parties acknowledge that the Agencies have certain rights under the Initial Acknowledgment Agreement and Acknowledgment Agreements (as applicable), including the right to cause the Borrower to transfer servicing to a transferee servicer under certain circumstances as more particularly set forth therein. The transferee servicer shall have all the rights and remedies against the Borrower and the Collateral as set forth herein and under the UCC.
(d) [Reserved.]
(e) Each of the Borrower and the Guarantor will promptly, at its respective expense, execute and deliver such instruments, financing and continuation statements and documents and take such other actions as the Administrative Agent may reasonably request from time to time in order to perfect, protect, evidence, exercise and enforce the Administrative Agent’s and each Lender’s interests, rights and remedies under and with respect to the Transaction Documents, the Advances and the Assets. To the extent the Borrower or the Guarantor has filed or caused the filing of any document as provided above, the Borrower or the Guarantor, as applicable, shall deliver to the Administrative Agent file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing.
(f) If the Borrower fails to perform any of its Obligations, then the Administrative Agent may (but shall not be required to) perform or cause to be performed such Obligation, and the costs and expenses incurred by the Administrative Agent in connection therewith shall be payable by the Borrower. Without limiting the generality of the foregoing, if
the Borrower fails to perform any of its Obligations, the Borrower authorizes the Administrative Agent, at the option of the Administrative Agent and the expense of the Borrower, at any time and from time to time, to take all actions and pay all amounts that the Administrative Agent reasonably deems necessary or appropriate to protect, enforce, preserve, insure, service, administer, manage, perform, maintain, safeguard, collect or realize on the Assets, including the right to liquidate the Assets, and the Administrative Agent’s Liens and interests therein or thereon and to give effect to the intent of the Transaction Documents. No Potential Event of Default or Event of Default shall be cured by the payment or performance of any Obligation by the Administrative Agent on behalf of the Borrower. The Administrative Agent may make any such payment in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, Tax Lien, title or claim except to the extent such payment is being contested in good faith by the Borrower in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.
(g) Upon termination of this Agreement, Administrative Agent shall release its security interests in the Collateral and promptly file termination statements with respect to each financing statement filed pursuant to this Section 2.17 and take such other action as may reasonably be requested by the Borrower or Guarantor to evidence such release. If evidence of filing such termination statements has not been delivered to the Borrower or Guarantor, as applicable, within ten (10) days of termination of this Agreement, the Administrative Agent hereby authorizes the Borrower or the Guarantor, as applicable, to file such termination statements.
Section 2.18 Limited Pledge of Fannie Mae Servicing. Notwithstanding anything to the contrary contained herein or in any of the other Transaction Documents, the pledge of the Borrower’s right, title and interest in the Fannie Mae MSRs under the Fannie Mae Lender Contract identified on the Schedule of Assets shall only secure the Borrower’s indebtedness and obligations to the Administrative Agent and each Lender incurred for (i) the purposes of securing (a) a warehouse line of credit and used for one of the purposes set forth in clauses (b) or (c), (b) a loan whose proceeds have been or will be used to acquire or retain through its origination activities rights in the Fannie Mae Lender Contract in accordance with the provisions of the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide by the Borrower, (c) a loan whose proceeds have been or will be used to purchase from another mortgage banking company the contract right to service Mortgage Loans, or to purchase assets of, or stock issued by, such company, or (ii) any other purpose which Fannie Mae, in its sole and absolute discretion, considers to be consistent with the purposes of the Fannie Mae Acknowledgment Agreement to be executed among the Borrower, the Administrative Agent and Fannie Mae; provided, that the foregoing provisions of this paragraph shall be deemed automatically supplemented or amended if and to the extent Fannie Mae supplements or amends the corresponding requirement, whether in its rules, regulations, guides, Fannie Mae Lender Contract, Fannie Mae Acknowledgment Agreement or published announcements or otherwise waives or grants exceptions from such requirement, and in each instance, with the same substantive force and effect; and provided further that the security interest created hereby is and shall be subject to the following condition and such provision below shall be included in each financing statement filed in respect hereof (defined terms used below shall have the meaning set forth in the Fannie Mae Acknowledgment Agreement):
“The Security Interest described in this financing statement is subordinate to all rights of Fannie Mae under (i) the terms of an Acknowledgment Agreement, with respect to the Security Interest among Fannie Mae, Home Point Financial Corporation (the “Debtor”) and Goldman Sachs Bank USA, as Administrative Agent for Lenders and (ii) the Mortgage Selling and Servicing Contract, the Fannie Mae Selling Guide, the Fannie Mae Servicing Guide and all supplemental servicing instructions or directives provided by Fannie Mae, all applicable master agreements, recourse agreements, repurchase agreements, indemnification agreements, loss-sharing agreements, and any other agreements between Fannie Mae and the Debtor, and all as amended, restated or supplemented from time to time (collectively, the “Fannie Mae Lender Contract”), which rights include the right of Fannie Mae to terminate the Fannie Mae Lender Contract with or without cause and the right to sell, or have transferred, the Servicing Rights.”
Section 2.19 Limited Pledge of Freddie Mac Servicing. Notwithstanding anything to the contrary contained herein or in any of the other Transaction Documents, the pledge of the Borrower’s right, title and interest in the Freddie Mac MSRs under the Freddie Mac Servicing Contract identified on the Schedule of Assets shall only secure the Borrower’s indebtedness and obligations to the Administrative Agent and each Lender incurred for the following limited purposes: (i) to fund the Borrower’s purchase of additional servicing portfolios; (ii) to effect the Borrower’s purchase of a mortgage banking company; (iii) to fund the Borrower’s working capital consistent with its residential mortgage business operations or (iv) any other purpose which Freddie Mac, in its sole and absolute discretion, considers to be consistent with the purposes of the Initial Freddie Mac Acknowledgment Agreement or the Freddie Mac Acknowledgment Agreement, as applicable; provided, that the foregoing provisions of this paragraph shall be deemed automatically supplemented or amended if and to the extent Freddie Mac supplements or amends the corresponding requirement, whether in its rules, regulations, guides, Freddie Mac Servicing Contract, Initial Freddie Mac Acknowledgment Agreement, Freddie Mac Acknowledgment Agreement or published announcements or otherwise waives or grants exceptions from such requirement, and in each instance, with the same substantive force and effect; and provided further that the security interest created hereby shall, following execution of the Initial Freddie Mac Acknowledgment Agreement, and the Freddie Mac Acknowledgment Agreement, as applicable be subject to the following condition and such provision below shall be included in each financing statement filed in respect hereof after execution of the Initial Freddie Mac Acknowledgment Agreement and the Freddie Mac Acknowledgment Agreement, as applicable (defined terms used below shall have the meaning set forth in the Initial Freddie Mac Acknowledgment Agreement and the Freddie Mac Acknowledgment Agreement, once executed):
“Notwithstanding anything to the contrary herein, the security interest publicized or perfected by this financing statement is subject and subordinate in each and every respect (a) to all rights, powers and prerogatives of the Federal Home Loan Mortgage Corporation (“Freddie Mac”) under and in connection with the Purchase
Documents, as that term is defined in the Freddie Mac Single-Family Seller/Servicer Guide, which rights include, without limitation, the right of Freddie Mac to disqualify (in whole or in part) the debtor named herein as an approved Freddie Mac Seller/Servicer, with or without cause, and the right to terminate (in whole or in part) the unitary, indivisible master servicing contract and to transfer and sell all or any portion of said servicing contract rights, as provided in the Purchase Documents; and (b) to all claims of Freddie Mac arising out of or relating to any and all breaches, defaults and outstanding obligations of the debtor to Freddie Mac.”
Section 2.20 Limited Pledge of Ginnie Mae Servicing. The Administrative Agent and each additional Lender acknowledge and agree that (x) the Borrower is entitled to servicing income with respect to a given mortgage pool only so long as Borrower is a Ginnie Mae approved issuer; (y) upon the Borrower’s loss of such approved issuer status, the Administrative Agent and each additional Lender’s rights to any servicing income related to a given mortgage pool also terminate; and (z) the pledge of the Borrower’s rights to servicing income conveys no rights (such as a right to become a substitute servicer or issuer) that are not otherwise specifically provided for in the Ginnie Mae Contract, provided that this sentence shall automatically be deemed amended or modified if and to the extent Ginnie Mae amends the Ginnie Mae Contract, the applicable Acknowledgment Agreement, if any, or published announcements and provided further that the security interest created hereby is subject to the following provision to be included in each financing statement filed in respect hereof:
Notwithstanding anything to the contrary set forth herein:
(a) The property subject to the security interest reflected in this instrument includes all of the right, title and interest of Home Point Financial Corporation (“Debtor”) in certain mortgages and/or participation interests related to such mortgages (“Pooled Mortgages”), and pooled under the mortgage-backed securities program of the Government National Mortgage Association (“Ginnie Mae”), pursuant to section 306(g) of the National Housing Act, 12 U.S.C. § 1721(g);
(b) To the extent that the security interest reflected in this instrument relates in any way to the Pooled Mortgages, such security interest is subject and subordinate to all rights, powers and prerogatives of Ginnie Mae, whether now existing or hereafter arising, under and in connection with: (i) 12 U.S.C. § 1721(g) and any implementing regulations; (ii) the terms and conditions of that certain Acknowledgment Agreement, dated as of July 11, 2019, with respect to the Security Interest, by and among Ginnie Mae, Debtor and Goldman Sachs Bank USA, as administrative agent; (iii) applicable Guaranty Agreements and contractual agreements between Ginnie Mae and the Debtor; and (iv) the Ginnie Mae Mortgage-Backed Securities Guide, Handbook 5500.3 Rev. 1, and other applicable guides (items (i), (iii) and (iv), collectively, the “Ginnie Mae Contract”);
(c) Such rights, powers and prerogatives of Ginnie Mae include, but are not limited to, Ginnie Mae’s right, by issuing a letter of extinguishment to Debtor, to
effect and complete the extinguishment of all redemption, equitable, legal or other right, title or interest of the Debtor in the Pooled Mortgages, in which event the security interest as it relates in any way to the Pooled Mortgages shall instantly and automatically be extinguished as well; and
(d) For purposes of clarification, “subject and subordinate” in clause (2) above means, among other things, that any cash held by Goldman Sachs Bank USA as collateral and any cash proceeds received by Goldman Sachs Bank USA in respect of any sale or other disposition of, collection from, or other realization upon, all or any part of the collateral may only be applied by Goldman Sachs Bank USA to the extent that such proceeds have been received by, or for the account of, the Debtor free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines; provided that this clause (4) shall not be interpreted as establishing rights in favor of Ginnie Mae except to the extent that such rights are reflected in, or arise under, the Ginnie Mae Contract.
Section 2.21 Commitment Increase. Following execution of Acknowledgment Agreements with all Agencies, the Borrower may request an increase to the Aggregate Commitment, provided that any such request shall be subject to the following conditions: (a) any such increase of the Aggregate Commitment will be effective only upon the written agreement of the Administrative Agent, the applicable Lenders that will commit to the increase, the Borrower, and the Guarantor, and (b) the Administrative Agent shall have the right to elect to take all or any portion of the amount of such requested increase notwithstanding its percentage of the Aggregate Commitment at the time of such request. The Administrative Agent will respond to any such request, on behalf of the applicable Lenders, within fifteen (15) Business Days; provided, that the Administrative Agent’s failure to respond within such period shall be deemed to be a rejection of the requested increase. In the event that an increase requested in accordance with the terms of this Section 2.21 shall be rejected, or deemed rejected, then an additional Lender identified by the Borrower may be made party to this Agreement; provided, however, that (i) GS Bank shall retain majority voting rights hereunder, and (ii) the addition of such Lender must be consented to in writing by the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed).
Section 2.22 Base Servicing Fee Increases. Upon written notice to the Borrower by any Agency of the need to improve or maintain adequate performance of servicing activities or to comply with the applicable Agency Requirements, the Borrower shall deliver such notice to the Administrative Agent within five (5) Business Days of receipt. Such notice from the Borrower shall include a request to increase the Base Servicing Fee Rate. The Base Servicing Fee Rate shall be adjusted to address the necessary additional costs required to comply with such notice from the applicable Agency. The Base Servicing Fee Rate shall become effective on the next Monthly Payment Date, but no less than thirty (30) days after delivery of such notice from Borrower to the Administrative Agent and no more than sixty (60) days from the date of delivery of such notice from such Agency. Upon request therefor by the Administrative Agent, the Borrower shall deliver to the Administrative Agent a written notice setting forth in reasonable detail the basis for any such proposed increase.
ARTICLE III
CONDITIONS OF LENDING AND CLOSING
Section 3.1 Conditions Precedent to Closing . The effectiveness of this Agreement and the obligations of the parties hereto are subject to the condition precedent that the Lenders shall have received or waived receipt of the following on or prior to the Closing Date (unless otherwise noted):
(a) Transaction Documents and other Closing Documents. Each of the Transaction Documents (other than the Freddie Mac Acknowledgment Agreement and the Ginnie Mae Acknowledgment Agreement) shall be executed on or before the Closing Date, shall be in full force and effect and all consents, waivers and approvals necessary for the consummation of the transactions contemplated thereby shall have been obtained and shall be in full force and effect, and the Administrative Agent shall have received a duly executed counterpart thereof; provided that, to the extent the Borrower has used commercially reasonable efforts to obtain the Account Control Agreement prior to the Closing Date and is unable to do so without undue burden or expense, the Account Control Agreement may be delivered no later than thirty (30) days (or such later date as may be reasonably agreed by the Administrative Agent) after the Closing Date.
(b) Receipt of Loan Notes. The Administrative Agent shall have received a duly executed Loan Note for each Lender that has requested the same.
(c) Reserved.
(d) Know Your Customer Information. The Administrative Agent shall have received all documentation and other information required by regulatory authorities under applicable “Know Your Customer” and anti-money laundering rules and regulations, including the Patriot Act.
(e) Payment of Fees. On or prior to the Closing Date, the Borrower shall have paid all fees, including the Upfront Fee, previously agreed in writing to be paid on or prior to the Closing Date.
(f) Enforceability of Loan Note. Each Loan Note shall be entitled to the benefit of the security provided herein and shall constitute the legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally or general principals of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)).
(g) Evidence of Insurance. The Administrative Agent shall have received certification evidencing coverage under the insurance policies referred to in Section 5.1(w) and evidence that the Borrower and the Guarantor have added Administrative Agent as an additional loss payee under the insurance policies referred to in Section 5.1(w).
(h) Security Interest. Evidence that all other actions necessary or, in the opinion of Administrative Agent, desirable to perfect and protect Administrative Agent’s interest in the Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.
(i) Organizational Documents. A certificate of the corporate secretary of the Borrower and of the Guarantor in form and substance acceptable to Administrative Agent, attaching certified copies of the Borrower’s and the Guarantor’s charter, bylaws and corporate resolutions approving the Transaction 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 Transaction Documents.
(j) Good Standing Certificate. A certified copy of a good standing certificate or equivalent from the jurisdiction of organization of the Borrower and the Guarantor, dated no earlier than the date ten (10) Business Days prior to the Closing Date.
(k) Incumbency Certificate. An incumbency certificate of the corporate secretary of the Borrower and of the Guarantor, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Transaction Documents.
(l) Due Diligence Review. The Administrative Agent shall have completed, to its satisfaction, its due diligence review of the Borrower, the Guarantor, the Assets, the Agencies and such other matters as the Administrative Agent and the Lenders shall have determined in the exercise of their reasonable discretion are necessary and proper for the execution, deliver and performance under this Agreement and the Transaction Documents.
(m) Legal Opinions. The Administrative Agent shall have received usual and customary legal opinions in form and substance satisfactory to Administrative Agent and its counsel (including, but not limited to, those regarding corporate matters, enforceability and security interest perfection).
Section 3.2 Conditions Precedent to All Advances. The obligation of each Lender to make or participate in each Advance (including the initial Advances hereunder) shall be subject, at the time thereof, to the satisfaction of the following conditions:
(a) Representations and Warranties. All of the representations and warranties of the Borrower and of the Guarantor contained in this Agreement and the other Transaction Documents shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) with the same effect as though such representations and warranties had been made on and as of the date of such Advance, 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 (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date when made or for the respective period, as the case may be.
(b) No Event of Default; No Potential Event of Default. No Potential Event of Default or Event of Default has occurred and is continuing or would occur or be continuing immediately after giving effect to such Advance.
(c) [Reserved].
(d) No Borrowing Base Deficiency or Funding Base Deficiency. No Borrowing Base Deficiency or Funding Base Deficiency shall exist immediately prior and after giving effect to such Transaction.
(e) Availability Period. The Availability Period shall not have terminated, nor shall it have terminated immediately after giving effect to such Advance.
(f) Notice of Borrowing. In accordance with Section 2.4, the Administrative Agent shall have received a properly completed Notice of Borrowing and a Borrowing Base Certificate, including a Schedule of Assets and a Schedule of Ineligible Assets from the Borrower.
(g) Requirements of Law. None of the Administrative Agent or any Lender shall have determined that the introduction of any Applicable Law or a Change in Law or in the interpretation or administration of any Applicable Law applicable to the Administrative Agent or such Lender has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for the Administrative Agent or such Lender to make any Advance.
(h) No Material Adverse Change. Since the Closing Date, there has been no Material Adverse Change.
(i) Fees. Each Lender shall have received payment in full of all fees and expenses which are due and payable hereunder to such Lender on or before such date.
(j) Maximum Draw. After the Closing Date and the initial Advance, no more than [***] of the Aggregate Commitment may be drawn in any rolling thirty (30) day period, unless otherwise agreed by the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Borrower and the Guarantor. Each of the Borrower and the Guarantor represents and warrants to the Administrative Agent and each Lender as of the Closing Date, as of each Borrowing Date and as of each Monthly Payment Date, as follows:
(a) Organization; Corporate Powers. Each of the Borrower and the Guarantor (i) is a duly organized and validly existing corporation, in good standing under the laws of the State of New Jersey and the State of Delaware, as applicable, (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.
(b) Authority and Enforceability. Each of the Borrower and the Guarantor has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Transaction Documents to which it is party. Each of the Borrower and the Guarantor has duly executed and delivered each Transaction Document to which it is party and each Transaction Document 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) Equity Interests and Ownership. Schedule 4.1(c) correctly sets forth the ownership interest of the Borrower, the Guarantor, and each of their Subsidiaries in their respective Subsidiaries as of the Closing Date. Except as set forth on Schedule 4.1(c), as of the Closing Date, there is no existing option, warrant, call, right, commitment or other agreement to which the Borrower or the Guarantor is a party requiring, and there is no membership interest or other Equity Interests of the Borrower or the Guarantor outstanding which upon conversion, exchange or exercise would require, the issuance by the Borrower or the Guarantor of any additional membership interests or other Equity Interests of the Borrower or the Guarantor or other Securities convertible into or exchangeable or exercisable for or evidencing the right to subscribe for or purchase, a membership interest or other Equity Interests of the Borrower or the Guarantor, and no Securities or obligations evidencing any such rights are authorized, issued or outstanding.
(d) No Conflict. The execution, delivery and performance by each of the Borrower and the Guarantor of the Transaction Documents to which it is a party and the consummation of the transactions contemplated by the Transaction Documents do not and shall not (a) violate (i) any Applicable Law which violation would reasonably be expected to have a Material Adverse Effect, (ii) any of the organizational documents of the Borrower or the Guarantor, (iii) any order, judgment, injunction or decree of any court or other agency of government binding on the Borrower or the 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 the Borrower or the 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 the Borrower or the Guarantor (other than any Liens created under any of the Transaction Documents in favor of the Administrative Agent on behalf of the Secured Parties); or (c) require any approval of stockholders, members or partners or any approval or consent of any Person under any material contractual obligation of the Borrower or the Guarantor, except for such approvals or consents which have been obtained on or before the Closing Date.
(e) 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 the Borrower or the Guarantor of any Transaction Document to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which the Borrower or the Guarantor is a party.
(f) Solvency. Each of the Borrower and the 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. Borrower and Guarantor neither intend 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. Neither Borrower nor Guarantor is selling and/or pledging any Assets with any intent to hinder, delay or defraud any of its creditors.
(g) True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of the Borrower, the Guarantor, or any Affiliate thereof furnished or to be furnished to the Administrative Agent in connection with the initial or any ongoing due diligence of the Borrower, the Guarantor, or any Affiliate thereof, or the negotiation, preparation, or delivery of the Transaction Documents, 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 Administrative Agent or any Lender by or on behalf of the Borrower, the 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, the Borrower 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.
(h) Financial Statements. The financial statements of the Borrower and of the Guarantor delivered to the Administrative Agent on or prior to the Closing Date fairly present in all material respects on a consolidated basis the assets, liabilities and financial position of the Borrower and the 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 the Administrative Agent) consist of copies of (a) each of the Borrower’s and Guarantor’s balance sheets for the fiscal years of Borrower and Guarantor ended December 31, 2016 and December 31, 2017 and the related statements of income, cash flows, and shareholders’ equity for Borrower and Guarantor for such fiscal years, with the opinion thereon of Borrower’s and Guarantor’s independent accountants and (b) the Borrower’s balance sheet for the quarterly fiscal period of
Borrower ended September 30, 2018 and the related statement of income for the Borrower for such quarterly fiscal period. All such financial statements are complete and correct and fairly present, in all material respects, the financial condition of the Borrower and the 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 of the Borrower and the Guarantor, there has been no Material Adverse Change in the consolidated business, operations or financial condition of the Borrower or the Guarantor from that set forth in such financial statements nor is the Borrower or the Guarantor aware of any state of facts which (with notice or the lapse of time) would or could result in any such Material Adverse Change. The Borrower and the Guarantor each have, on the date of the statements delivered pursuant to this clause (h) 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 the Borrower or the Guarantor except as heretofore disclosed to the Administrative Agent in writing.
(i) Litigation. There is no action, proceeding or investigation pending involving the Borrower or the Guarantor or, to the best of its knowledge, threatened against the Borrower or the Guarantor before any Governmental Authority or Agency (A) asserting the invalidity of this Agreement, any Transaction Document or any transaction contemplated hereunder, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, any Transaction Document or any transaction contemplated hereunder, (C) making a claim individually or in the aggregate that would reasonably be expected to result in a Material Adverse Effect if adversely determined, (D) which requires filing with the SEC in accordance with the Exchange Act or any rules thereunder or (E) which might materially and adversely affect the validity of the Assets, the Servicing Contracts or the performance by it of its obligations under, or the validity or enforceability of, this Agreement, any Transaction Document or any Transaction contemplated hereunder.
(j) Use of Proceeds. Each Transaction will be used to (A) purchase, in the ordinary course of business, Agency eligible MSRs and related assets, (B) pay certain fees and expenses incurred in connection with the establishment of the credit facility set forth in this Agreement, (C) subject to the provisions of Section 2.19, make cash distributions from time to time pursuant to Section 5.2(d) in an amount not exceeding the excess of the Borrowing Base over the outstanding principal amount of the Advances and (D) for general corporate purposes. The Borrower will only use the proceeds of any Advance as permitted under Section 2.3. No part of the proceeds of any Advance 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 the Borrower nor the 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 the Borrower or the 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. The Borrower 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 any Lender, as such term is defined in 12 C.F.R. Part 223.
(k) Accounts. The account number of the Borrower’s Account is specified on Schedule I attached hereto, as updated pursuant to Section 8.1. Borrower will keep the Collection Account and the Borrower’s Account segregated and such accounts will not be commingled.
(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 the Borrower nor the Guarantor is (i) an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans or (iii) holding assets that constitute “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101, as modified in application by Section 3(42) of ERISA.
(m) The Servicing Contracts. The Borrower has delivered to the Administrative Agent a copy of (x) each of the Servicing Contracts, the Initial Acknowledgment Agreement or Acknowledgment Agreements (as applicable) and (y) all amendments, restatements, supplements or other modifications thereto that could reasonably be expected to adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect, and the Borrower hereby certifies that the copies delivered to the Administrative Agent by the Borrower are true, correct and complete. Each such document to which the Borrower is a party has been duly executed and delivered by the Borrower and is in full force and effect, and no default or event of default (howsoever defined) has occurred and is continuing thereunder, except where the occurrence and continuance of such default or event of default would not reasonably be expected to result in a Material Adverse Effect.
(n) Forms of Servicing Contracts. Each of the Servicing Contracts have been executed on the respective Agency’s standard forms, which incorporates the related Agency Guide with no amendment to such Servicing Contract that would grant the related Agency additional or more favorable rights to terminate the servicer from those rights specified in the related Agency Guide.
(o) Taxes. Each of the Borrower, the Guarantor, and their respective Subsidiaries have duly and timely filed or caused to be duly and timely filed all material federal, state, provincial, territorial, foreign and other tax returns and reports required to be filed under applicable law, and has timely paid all material 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. 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.
(p) Agreements. None of the Borrower, the Guarantor, nor any Subsidiary of the Borrower is a party to any agreement, instrument, or indenture or subject to any restriction materially and adversely affecting its business, operations, assets or financial condition, except as
disclosed in the financial statements described in Section 4.1(h). None of the Borrower, the Guarantor, nor any Subsidiary of the Borrower is 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 could have a Material Adverse Effect on the Borrower or the Guarantor. There are no breaches or defaults under the Transaction Documents to which it is a party or the Servicing Contracts. No holder of any indebtedness of the Borrower, the Guarantor, or any of their Subsidiaries has given notice of any asserted default thereunder.
(q) Other Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Borrower and of the Guarantor existing on the Closing Date is as described in Schedule 4.1(q).
(r) No Material Adverse Effect. Since September 30, 2018, there has been no event or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.
(s) Investment Company Act. Neither the Borrower nor the Guarantor is required to register as an “investment company” within the meaning of the 1940 Act. Borrower and Guarantor are relying on Section 3(c)(5)(c) or Section 3(c)(6) as the exemption from the definition of “investment company” of the 1940 Act.
(t) Covered Fund. Neither the Borrower nor the Guarantor is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended.
(u) Properties; Security Interest. Each of the Borrower and Guarantor has good title to, valid leasehold interests in, or valid licenses to use, all of its properties and assets necessary in the ordinary conduct of its business, including all of the Collateral, and (i) the MSR Collateral is free and clear of Liens other than Permitted MSR Collateral Liens, and (ii) all other Collateral is free and clear of Liens other than Permitted Collateral Liens. Once executed and delivered, this Agreement creates, as security for the Obligations, a valid and enforceable and (coupled with the Account Control Agreement and the taking of all actions required hereunder and thereunder) perfected security interest in and Lien on all of the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, superior to and prior to the rights of all third persons and subject to no other Liens, except that the Collateral may be subject to the Agency Requirements.
(v) Environmental Matters. None of the Borrower, the 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 the Borrower nor the 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 the Borrower’s and the 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 the Borrower or the Guarantor that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. None of the Borrower, the Guarantor, or to their knowledge, any 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 the Borrower’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 could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. To each of the Borrower’s and Guarantor’s knowledge, no event or condition has occurred or is occurring with respect to the Borrower or the 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 Collateral or MSRs and, to the knowledge of the Borrower and the Guarantor, no conditions exist that would reasonably be expected to result in the imposition of such a Lien on any Collateral or MSRs.
(w) OFAC and PATRIOT Act. None of the Borrower, the Guarantor, nor any of their 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. Neither the Borrower nor the Guarantor conducts business or complete transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. Neither the Borrower nor the 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. Neither the Borrower nor the Guarantor is in violation of Executive Order No. 13224 or the PATRIOT Act.
(x) Foreign Corrupt Practices Act. None of the Borrower, the Guarantor, or any director, officer, agent or employee of the Borrower or Guarantor, has used any of the proceeds of any Advance (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 the Borrower 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.
(y) Servicing Contracts. Each Servicing Contract is in full force and effect, and Borrower has not been terminated as the servicer under any Servicing Contract.
(z) Risk Management Policy. The Borrower has duly adopted, in accordance with its internal risk policies, a risk management policy, which is in full force and effect. A copy of such risk management policy has been previously delivered to Administrative Agent (for distribution to Lenders), and certified by a Responsible Officer of the Borrower as being a true and correct copy in full force and effect.
(aa) Agency Approvals; Servicing Facilities. The Borrower has 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. The Borrower is approved by each of Fannie Mae and Freddie Mac as an approved seller/servicer, approved by Ginnie Mae as an approved issuer, and, to the extent necessary, approved by the Secretary of HUD pursuant to Sections 203 and 211 of the National Housing Act, as amended. In each such case, the Borrower is in good standing, with no event having occurred, including a change in insurance coverage which would either make the Borrower unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to any Agency or to HUD, FHA or VA. Should the Borrower for any reason cease to possess all such applicable approvals, or should notification to any Agency or to HUD, FHA or VA be required, the Borrower shall immediately notify Administrative Agent immediately in writing.
(bb) Representations Concerning the Collateral. (1) Neither the Borrower nor the Guarantor has assigned, pledged, conveyed, or encumbered any Collateral hereunder to any other Person (except to the extent any such pledge has been released prior to the grant of any security interest thereon hereunder), and immediately prior to the pledge of any such Collateral, the Borrower or the Guarantor, as applicable, was the sole owner of such Collateral and had good and marketable title thereto, free and clear of all Liens other than a first priority Lien in favor of the Administrative Agent.
(i) All information concerning all Collateral set forth on the Schedule of Assets were, are or will be (as applicable) pledged to the Administrative Agent, for the benefit of the Lenders will be complete and correct in all material respects as of the date of such Schedule of Assets.
(ii) Upon the filing of financing statements on Form UCC-1 naming the Administrative Agent as “Secured Party” and the Borrower or the Guarantor (as applicable) as “Debtor”, and describing the Collateral, in the appropriate jurisdictions, the Administrative Agent, for the benefit of the Lenders, will have a duly perfected first priority security interest under the UCC in all right, title, and interest of the Borrower and the Guarantor in, to and under, subject, in all cases, to the Agency Requirements, the Collateral to the extent a security interest therein can be perfected by a UCC filing.
(iii) All filings and other actions necessary to perfect the security interest in the Collateral created under this Agreement under the UCC have been duly made or taken and are in full force and effect. Subject to the Agency Requirements, the Borrower and the Guarantor are the legal and beneficial owners of the Collateral hereunder free and clear of any Lien, other than as permitted by and any rights retained by the Agencies pursuant to the Agency Requirements.
(iv) Subject only to the Agency Requirements, the Borrower and the Guarantor have the full right, power and authority to pledge the Collateral.
ARTICLE V
COVENANTS
Section 5.1 Affirmative Covenants. Each of the Borrower and the Guarantor covenants and agrees that, until each Loan Note and all other Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated:
(a) Financial Covenants.
(i) Minimum Liquidity. Each of the Borrower and its Subsidiaries and the Guarantor shall ensure that, as of the last day of each calendar month ending after the Closing Date, it has Cash and Cash Equivalents at such time in an amount not less than the greater of (i) [***], or (ii) such amount as is set forth in any repurchase agreement or credit facility that the Borrower, the Guarantor, or any of their respective Subsidiaries has in place with any Person other than the Administrative Agent or an Affiliate of Administrative Agent (such amount, the “Minimum Liquidity Amount”).
(ii) Minimum Adjusted Tangible Net Worth. Each of the Borrower and its Subsidiaries and the Guarantor shall maintain, as of the last day of each calendar month ending after the Closing Date, Adjusted Tangible Net Worth not less than the greater of (i) [***], or (ii) such amount as is set forth in any repurchase agreement or credit facility that the Borrower, the Guarantor, or any of their respective Subsidiaries has in place with any Person other than the Administrative Agent or an Affiliate of Administrative Agent.
(iii) Corporate Debt to Tangible Net Worth. Each of the Borrower and its Subsidaries and the Guarantor shall maintain, as of the last day of each calendar month ending after the Closing Date, a Corporate Debt to Tangible Net Worth Ratio not to exceed the lesser of (i) [***], or (ii) such amount as is set forth in any repurchase agreement or credit facility that the Borrower, the Guarantor, or any of their respective Subsidiaries has in place with any Person other than the Administrative Agent or an Affiliate of Administrative Agent.
(b) Reporting Requirements. The Borrower and the Guarantor will furnish to the Administrative Agent for delivery to each Lender:
(i) within (a) 120 days after the close of each fiscal year of the Borrower and the Guarantor, the unqualified audited consolidated balance sheet of the Borrower and of the Guarantor and their 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 and
(b) 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 the Borrower and the Guarantor and their consolidated subsidiaries;
(ii) promptly, copies of any annual financial projections prepared by or on behalf of the Borrower or Guarantor and approved by the board of directors of the Borrower or Guarantor, as applicable;
(iii) [reserved]; and
(iv) at the time of delivery of the financial statements described pursuant to clause (i), the Borrower and Guarantor shall deliver to the Administrative Agent and each Lender a Compliance Certificate that (a) attaches an updated Schedule of Assets as of the preceding fiscal quarter or date of such Advance and (b) certifies that the representations and warranties set forth in Section 4.1 are true and correct on and as of the date of such certification; provided that, with the consent of the Administrative Agent not to be unreasonably withheld the Borrower may, but shall not be obligated to, deliver to the Administrative Agent updated versions of the Schedule of Assets on a more frequent basis if it chooses to do so.
(c) Acknowledgment Agreements. The Borrowers shall make commercially reasonable efforts to enter into the Acknowledgment Agreements with each Agency as soon as possible. Such Acknowledgment Agreements shall be in form and substance reasonably satisfactory to the Lender.
(d) Servicing Contract and Acknowledgment Agreement Amendments. Within five (5) Business Days after a Responsible Officer of the Borrower or the Guarantor becomes aware of an amendment to the Servicing Contracts or the Initial Acknowledgment Agreement or Acknowledgment Agreements (as applicable) that could reasonably be expected to materially and adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect, to the extent permitted by the applicable Agency, the Borrower shall deliver to the Administrative Agent for delivery to each Lender copies of any such amendments; provided that the Borrower shall cooperate with any requests by the Administrative Agent to deliver copies of each amendment, restatement, supplement or other modification to the Servicing Contracts or the Initial Acknowledgment Agreement or Acknowledgment Agreements (as applicable) that the Administrative Agent shall reasonably request, to the extent permitted by the applicable Agency.
(e) Change in Responsible Officer. Promptly, but in any event within ten (10) days after there is any change in any of the chief executive officer, chief financial officer, or the head of servicing operations of the Borrower or the Guarantor, the Borrower or the Guarantor, as applicable, shall notify the Administrative Agent thereof.
(f) Notice of Default. Promptly (but in any event within [***]) upon a Responsible Officer of the Borrower or of the Guarantor obtaining knowledge (i) of any condition or event that constitutes an Event of Default or that notice has been given to the Borrower or the Guarantor with respect thereto; (ii) of any condition or event that constitutes an “event of
default” under any Indebtedness 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 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, 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, Potential Event of Default, default, event or condition, and what action the Borrower and/or the Guarantor has taken, is taking and proposes to take with respect thereto.
(g) Maintenance of List Assets. Borrower shall at all times maintain a current list (which may be stored in electronic form) of all Assets.
(h) Records. (1) Borrower shall collect and maintain or cause to be collected and maintained all Records relating to the Assets in accordance with industry custom and practice for assets similar to the Assets, including those maintained pursuant to Section 5.1(i), and all such Records shall be in the Borrower’s possession unless otherwise consented to in writing by the Administrative Agent. The Borrower will not allow any such papers, records or files that are an original or an only copy to leave the Borrower’s possession, except for individual items removed in connection with servicing a specific Mortgage Loan, in which event Borrower will obtain or cause to be obtained a bailee letter from a financially responsible person for any such paper, record or file. The Borrower will maintain all such Records in good and complete condition in accordance with industry practices for assets similar to the Assets and preserve them against loss.
(i) For so long as the Administrative Agent has an interest in or lien on any Asset, Borrower will hold or cause to be held all related Records in trust for the Administrative Agent. The Borrower shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Administrative Agent granted hereby.
(ii) Upon reasonable advance notice from the Administrative Agent, Borrower shall (x) make any and all such Records available to the Administrative Agent to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit the Administrative Agent or its authorized agents to discuss the affairs, finances and accounts of the Borrower with its chief operating officer, chief financial officer and the independent certified public accountants of the Borrower.
(i) Books. Borrower and Guarantor shall keep or cause to be kept in reasonable detail books and records of account of its assets and business.
(j) UCC Matters; Protection and Perfection of Security Interests. Each of the Borrower and the Guarantor agree promptly to notify the Administrative Agent in writing of any change (i) in its legal name, (ii) in its identity or type of organization or corporate structure or (iii) in the jurisdiction of its organization, in each case, within ten (10) days of such change. The Borrower and the Guarantor agree that from time to time, at the Borrower’s cost and expense, to promptly execute and deliver all further instruments and documents, and take all further action
reasonably required by the Agent (a) to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Assets acquired by the Borrower or (b) to enable the Administrative Agent to exercise or enforce any of its rights hereunder, under any other Transaction Document. Without limiting the Borrower’s obligation to do so, the Borrower and the 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 the Administrative Agent may reasonably require. Each of the Borrower and the Guarantor hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming the Borrower or the Guarantor as debtor, relative to all or any of the Collateral now existing or hereafter arising without the signature of the Borrower or the Guarantor where permitted by law. A carbon, photographic or other reproduction of this Agreement, or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement.
(k) Access to Certain Documentation and Information Regarding the Assets. The Borrower and Guarantor shall permit the Administrative Agent or its duly authorized representatives or independent contractors, upon reasonable advance notice to the Borrower or Guarantor, as applicable, and subject to all applicable Agency procedures and restrictions, (i) access to documentation that the Borrower or Guarantor may possess regarding the Eligible Assets, (ii) to visit the Borrower or Guarantor, and to discuss its affairs, finances and accounts (as they relate to their respective obligations under this Agreement and the other Transaction Documents) with the Borrower, the Guarantor, their respective officers, and independent accountants (subject to such accountants’ customary policies and procedures) and (iii) to examine the books of account and records of the Borrower and the Guarantor, as they relate to the Assets, to make copies thereof or extracts therefrom, all at such reasonable times and during regular business hours of the Borrower or the Guarantor (as applicable). The Administrative Agent may perform the functions set forth above no more than once per year for each of the Borrower and Guarantor, or at any time following a Potential Event of Default or an Event or Default, at the Administrative Agent’s determination, and under any circumstance, at the cost and expense of the Borrower. Such representatives or independent contractors shall use commercially reasonable efforts to avoid interruption of the normal business operations of the Borrower and Guarantor. Notwithstanding anything to the contrary in this Section 5.1(k), (i) the Borrower and Guarantor, will not be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non-financial trade secrets or nonfinancial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding confidentiality agreement or (z) is subject to attorney-client or similar privilege or constitutes attorney work product and (ii) so long as an Event of Default has not occurred, the Borrower and the Guarantor shall have the opportunity to participate in any discussions with the Borrower’s and the Guarantor’s independent accountants.
(l) Existence and Rights; Compliance with Laws; Agency Approvals. Each of the Borrower and the Guarantor shall (i) preserve and keep in full force and effect its corporate existence, and any material rights, permits, patents, franchises, licenses, approvals and qualifications required for it to conduct its business activities, and (ii) 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, in all material respects, with Accepted Servicing Practice sand the terms of the Servicing Contracts. Each of the Borrower and the 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. The Borrower shall maintain its status with each Agency as an approved seller/servicer, and shall be in good standing with each Agency in accordance with Applicable Law and all rules, policies, procedures and standards of such Agency (collectively, “Agency Approvals”). The Borrower shall service all Assets in accordance with the Agency Guides in all material respects. Should the Borrower, (i) receive written notice of any default or notice of termination of servicing for cause under a Servicing Contract, or (ii) for any reason, cease to possess all such applicable Agency Approvals, or should notification to the relevant Agency or to HUD, FHA or VA as described in Section 4.1(aa) be required, the Borrower shall so notify Administrative Agent in writing within three (3) Business Days. Notwithstanding the preceding sentence, the Borrower shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement.
(m) Taxes. Each of the Guarantor, the Borrower and its Subsidiaries shall duly and timely file or cause to be duly and timely filed, all material federal, state, provincial, territorial, foreign and other income Tax returns and all other material 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 Administrative Agent if requested; provided that neither the Borrower nor the 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 Collateral to satisfy such Tax.
(n) Maintenance of Properties. Each of the Borrower and the 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 could not reasonably be expected to have a Material Adverse Effect.
(o) Servicing Portfolio. Borrower shall not permit the Portfolio Delinquency Rate with respect to any three-month period for its Fannie Mae or Freddie Mac servicing portfolios to exceed [***]. Borrower shall not permit the Portfolio Delinquency Rate with respect to any three-month period for its Ginnie Mae servicing portfolios to exceed [***].
(p) Trigger Event Asset Sale. The Borrower shall, within one (1) Business Day notify the Administrative Agent in the event that it has voluntarily relinquished or delivered notice of its intent to sell or transfer Servicing Contract rights constituting more than [***] of the aggregate Servicing Contract rights of the Borrower with respect to any Agency, in any event without the Administrative Agent’s prior express written consent.
(q) [Reserved].
(r) Modification of the Servicing Contracts. Unless required by an Agency or to the extent necessary to maintain Agency Approvals pursuant to Section 5.1(l), the Borrower shall not consent with respect to the Servicing Contract related to any Asset to amend, modify, waive any provision of or otherwise change any Servicing Contract or enter into any new Servicing Contract related to any Asset, except any such amendments, modifications, waivers or changes or any such new agreements or arrangements that could not reasonably be expected, individually or in the aggregate, to materially and adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect.
(s) No Subservicing. Borrower shall not permit any of the Assets to be subject to any servicing contract or subservicing arrangement, other than as permitted by a Servicing Contract and subject to the prior written consent of Administrative Agent.
(t) Quality Control. Borrower shall 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 MSRs and Advanced Reimbursement Amounts. Such program shall be capable of evaluating and monitoring the overall quality of the Borrower’s servicing activities. Such program shall guard against (i) dishonest, fraudulent, or negligent acts; and (ii) errors and omissions by officers, employees, or other authorized persons.
(u) [Reserved].
(v) [Reserved].
(w) Insurance. The Borrower and the 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 the Borrower’s and Guarantor’s business as of any date after the Closing Date. Each of the Borrower and the 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 the Borrower or the Guarantor, as applicable. Upon the request of the Administrative Agent at any time subsequent to the Closing Date, the Borrower and the Guarantor shall cause to be delivered to the Administrative Agent, a certification evidencing the Borrower’s and the Guarantor’s coverage under any such policies.
(x) [***]
(y) [Reserved.]
(z) [Reserved.]
(aa) [Reserved.]
(bb) Monthly Report. No later than the fifteenth (15th) day of each calendar month or, if such fifteenth (15th) day is not a Business Day, the next succeeding Business Day, Borrower shall deliver to the Administrative Agent a report substantially in the form set forth on Exhibit F attached hereto (the “Monthly Report”) which shall contain:
(i) a detailed accounting of Collections for the immediately preceding Collection Period, as applicable;
(ii) the number of Mortgage Loans contained in each Portfolio subject to this Agreement as of the last date of the calendar month preceding the delivery of such Monthly Report;
(iii) the unpaid principal balance of all Portfolios serviced by the Borrower;
(iv) the payments made with respect to each Portfolio and Mortgage Loans contained therein, shown as a change in their unpaid principal balance;
(v) the payoff with respect to the existing Portfolios serviced by the Borrower and Mortgage Loans contained therein, shown as a change in their unpaid principal balance;
(vi) the number of Mortgage Loans contained in each Portfolio that have been added or paid off, including their paid off principal balance;
(vii) a detailed calculation of the Financial Covenants, and accompanying Compliance Certificate;
(viii) copies of all internal and external valuations of the Borrower’s Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs since delivery of the prior Monthly Report; for the avoidance of doubt, this includes the results of all third-party valuation reports prepared by or on behalf of the Borrower upon which any internal valuations of the Borrower’s Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs were made;
(ix) compliance with the Events of Default hereunder as of the last day of the immediately preceding month; and
(x) a copy of the most recently received monthly account statement relating to the Collection Account described in the Account Control Agreement.
● With respect to Section 5.1(bb)(vii), Section 5.1(bb)(viii) such financial calculation shall be based on the Borrower’s most recently available unaudited monthly financial statements, which shall be as of the end of the last day of the second immediately preceding month. Notwithstanding the foregoing, the Monthly Report provided to an Agency shall be based upon, and shall include information only with respect to Mortgage Loans included in the applicable Portfolio subject to the Servicing Contract with such Agency, except that the portions of such report referred to in clauses (ii) and (iv) above shall apply to all Mortgage Loans included in any portfolio.
Section 5.2 Negative Covenants. Each of the Borrower and the Guarantor covenants and agrees that, until each Loan Note and all other Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated, the Borrower and the Guarantor will not:
(a) Sales, Liens, Etc. Except as permitted hereunder, sell, assign (by operation of law or otherwise) or otherwise Dispose of, or create or suffer to exist any Lien upon or with respect to, the Collateral; provided that notwithstanding anything to the contrary herein, this Section 5.2(a) shall not prohibit (i) (x) any Lien on MSR Collateral that constitutes a Permitted MSR Collateral Lien, or (y) any Lien on any other Collateral that constitutes a Permitted Collateral Lien, (ii) any sale, assignment or disposition that is not expressly restricted pursuant to the terms hereof, or (iii) any Permitted Disposition.
(b) Additional Indebtedness. Neither the Borrower nor the Guarantor shall enter into any Indebtedness other than Permitted Indebtedness.
(c) [Reserved].
(d) Dividends, Etc. Make, directly or indirectly, declare or pay any dividends or make any other payment or distribution (in cash, property, or obligations) on account of the Borrower’s or the 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 Potential Event of Default or Event of Default exists or will exist after giving effect thereto, or during an Acknowledgment Agreement Holiday Period or an Acknowledgment Agreement Trigger Period.
(e) Prohibition of Fundamental Changes. (i) Merge or consolidate or amalgamate, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) unless (x) such merger, consolidation or amalgamation does not result in a Change of Control or (y) the Borrower or the Guarantor (as applicable) is the sole surviving entity of such merger, consolidation or amalgamation, or (ii) sell all or substantially all of its assets; provided
that notwithstanding anything to the contrary herein, this Section 5.2(e) shall not prohibit the dissolution of NM Holdings LLC after the Closing Date.
(f) Material Change in Business. The Borrower and the Guarantor shall not make any material change in the nature of its business as carried on at the Closing Date and business activities that are reasonably related, ancillary or complementary thereto or reasonable developments or extensions thereof or in connection with the Asset Management Strategy.
(g) Change in Organizational Documents. Amend, modify or otherwise change any of its organizational 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; provided that, the Borrower and the Guarantor shall deliver written notice to the Administrative Agent within thirty (30) days of any material amendment to its organizational documents.
(h) Transactions with Affiliates. Enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Transaction Documents, (ii) any other transactions (including the lease of office space or computer equipment or software by the Borrower or the 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 the Borrower’s business or the 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 and (d) permitted by Sections 5.2(a), (d), (e) or (f), (iii) employment and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower or the 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 the Borrower or the Guarantor to the extent attributable to the ownership or operation of the Borrower or the Guarantor.
(i) Sale and Lease-Backs. Enter into any arrangement, directly or indirectly, with any Person whereby the Borrower or the Guarantor shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred if any Potential Event of Default or Event of Default exists or will exist after giving effect thereto (including that no Borrowing Base Deficiency or Funding Base Deficiency shall have occurred and be continuing at such time).
(j) Amendments to Transaction Documents. Amend, modify, supplement or otherwise change, waive or grant any consent in respect of any of the terms or provisions of any Transaction Document other than amendments, modifications, supplements or other changes made in accordance with the terms of the applicable Transaction Document.
(k) Fiscal Year. Change its fiscal year-end from December 31 or change its method of determining fiscal quarters.
(l) Collection Account. (i) Close the Collection Account, (ii) permit (A) any property that is not Collateral to be deposited in the Collection Account or (B) any Collateral (other than the Base Servicing Fee) to be deposited into an account other than the Collection Account free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, or (iii) during an Acknowledgment Agreement Trigger Period or following (A) delivery of an Activation Notice by the Administrative Agent, (B) the Availability Period, or (C) the occurrence and during the continuation of an Event of Default, withdraw funds from the Collection Account for any purpose without the Administrative Agent’s consent.
(m) Assignment. Except as expressly permitted herein and in the Transaction Documents, 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 as otherwise permitted by this Agreement and the other Transaction Documents), any of the Assets or any interest therein, provided, that the Borrower may encumber, sell, transfer or otherwise dispose of any MSRs or other Assets which have been released from the Collateral. Notwithstanding the foregoing, but subject to Section 2.10, (A) (i) the Borrower shall have the right to sell, assign or otherwise transfer to any Person any and all Mortgage Loans on a “servicing-released” basis, (ii) the servicing rights related thereto shall not be MSRs, and (iii) the servicing and other rights related thereto shall in no event be included as Collateral or in a Portfolio or be subject to the Liens of the Administrative Agent, and (B) the Borrower shall have the right to sell, assign or otherwise transfer to any Person the servicing rights related to any and all Mortgage Loans (and the servicing rights thereto shall not be MSRs and shall in no event be included as Collateral or be subject to the Liens of the Administrative Agent), to the extent such transaction is a voluntary partial cancellation of the applicable Servicing Contract pertaining to delinquent Mortgage Loans.
(n) Investments. None of the Borrower, the Guarantor, or their respective Subsidiaries shall enter into any new Investments in the event that a Borrowing Base Deficiency has occurred and is continuing or would occur after giving effect to any new Investment.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.1 Events of Default. The occurrence of any of the following specified events shall constitute an event of default under this Agreement (each, an “Event of Default”):
(a) Non-Payment. The Borrower or the Guarantor shall fail to (i) make any payment required pursuant to Section 2.9(a) beyond the applicable dates on which such payment is due (after giving effect to any grace or cure period set forth in Section 2.9), (ii) make any required payment of principal when due hereunder and such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure, (iii) make any required payment of any interest or Non-Usage Fee when due and such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such
failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure, or (iv) make any required payment of any other fee or other amount payable hereunder or under any other Transaction Document when due and such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure.
(b) Representations. Any representation or warranty made or deemed made by any of the Borrower or Guarantor herein or in any other Transaction Document (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have been false and misleading when made or any Monthly Report or Compliance Certificate delivered hereunder shall prove to have been false and misleading in any material respect when made (other than the representations and warranties set forth in Section 4.1(bb) which shall be considered solely for the purpose of determining the Administrative Agent Asset Value of the Eligible Assets, unless the Borrower or the Guarantor shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made).
(c) Covenants. (i) The Borrower or the Guarantor shall fail to perform or observe the Financial Covenants (subject to Section 6.3) or any negative covenant under Section 5.2, (ii) the Borrower or the Guarantor shall fail to perform or observe the covenants set forth in Sections 5.1(b), (d)-(f), (j), (l) (solely with respect to any notice requirements therein), (p), or (bb), and such failure shall continue unremedied for [***] after the earlier of (A) a written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (B) the date upon which a Responsible Officer of the Borrower or Guarantor obtained knowledge of such failure (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, the Borrower or the Guarantor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or in any other Transaction Document, and, such failure shall continue unremedied for [***] after the earlier of (A) a written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (B) the date upon which a Responsible Officer of the Borrower or Guarantor obtained knowledge of such failure.
(d) Insolvency Event. An Insolvency Event shall have occurred with respect to the Borrower or the Guarantor.
(e) Security Interest. The Administrative Agent, for the benefit of the Lenders, ceases to have a first priority perfected security interest in any portion of the Collateral.
(f) Judgments. There shall remain in force, undischarged (or provisions shall not be made for such discharge), unsatisfied, unbonded and unstayed for more than [***], or, if a stay of execution is procured, [***] from the date such stay is lifted, any final non-appealable monetary judgment against the Borrower or the Guarantor in excess of [***] over and above the amount of insurance coverage available from a financially sound insurer that has not denied coverage.
(g) 1940 Act. The Borrower or the Guarantor becomes, or becomes Controlled by, an entity required to register as an “investment company” under the 1940 Act.
(h) Tax Event. The Borrower or the Guarantor shall become taxable as an entity other than as it is presently taxable.
(i) Change of Control. The occurrence of a Change of Control.
(j) Cross Default. The Borrower, the Guarantor, or any of their 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 the Lender or any of the Lender’s Affiliates (including, for the avoidance of doubt, with respect to the Portfolio Hedges and any other derivatives contracts to which such Person is a party); (ii) the failure of the Borrower or the Guarantor to make any payment when due (after expiration of all applicable grace periods) on any Indebtedness of the Borrower or the Guarantor having an aggregate principal amount outstanding of [***] or more (each, a “Material Debt Facility”) or (iii) the 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 Indebtedness.
(k) [Reserved].
(l) Transaction Documents. At any time after the execution and delivery thereof, (i) this Agreement or any Transaction Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations in accordance with the terms hereof) or shall be declared null and void, in each case for any reason other than the failure of the Administrative Agent or any Secured Party to take any action within its control or (ii) the Borrower or Guarantor shall contest the validity or enforceability of any Transaction Document in writing or deny in writing that it has any further liability under any Transaction Document to which it is a party or shall contest the validity or perfection of any Lien in any Collateral purported to be covered by this Agreement or any other Transaction Document;
(m) Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority 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 the Borrower, the Guarantor, or any Affiliate thereof, or shall have taken any action to displace the management of the Borrower, the Guarantor, or any Affiliate thereof or to curtail its authority in the conduct of the business of the Borrower, the Guarantor, or any Affiliate thereof, or takes any action in the nature of enforcement to remove, limit or restrict the approval of Borrower, the Guarantor, or Affiliate thereof as an issuer, buyer or a seller/servicer of Mortgage Loans or securities backed thereby.
(n) Material Adverse Effect; Material Impairment. Any Material Adverse Effect shall occur, in each case as determined by Administrative Agent in its sole discretion, or any other condition shall exist which, in Administrative Agent’s sole discretion, constitutes a
material impairment of Borrower’s or the Guarantor’s ability to perform its obligations under this Agreement or any other Transaction Document.
(o) [Reserved.]
(p) Approved Mortgagee; Approved Servicer.
(i) Borrower ceases to be:
(A) a HUD approved mortgagee pursuant to Section 203 of the NHA or
(B) a Freddie Mac approved servicer, a Fannie Mae approved servicer, a Ginnie Mae approved issuer, an FHA approved mortgagee, or a VA approved lender;
(ii) HUD, FHA, VA, Fannie Mae, Freddie Mac, or Ginnie Mae, as applicable, suspends, rescinds, halts, eliminates, withdraws, annuls, repeals, voids or terminates the status of Borrower as either (1) a HUD approved mortgagee pursuant to Section 203 of the NHA or an FHA approved mortgagee pursuant to the NHA, (2) a VA approved lender, (3) a Freddie Mac approved servicer, (4) a Fannie Mae approved servicer, or (5) a Ginnie Mae approved issuer.
(iii) Borrower receives a written notice that HUD, FHA or VA intends to take such action set forth in clauses (i) or (ii) above and such notice has not been revoked or withdrawn within fourteen (14) days.
(iv) As distinct from and in addition to any loss of approval or actions taken by HUD, FHA, VA, Fannie Mae, Freddie Mac, or Ginnie Mae, as applicable, described in (i)-(iii), the occurrence of a Servicer Termination Event that has not been cured by the thirtieth (30th) day following the occurrence of such Servicer Termination Event.
(q) Fraud; Violation of Requirements. (i) Borrower or Guarantor engages or has engaged in fraud or other reckless or intentional wrongdoing in connection herewith or any other Transaction Document, or any document submitted pursuant thereto or otherwise in connection with any mortgage-backed securitization, or in connection with any federal mortgage insurance or loan guaranty program, or other federal program related to any of the Mortgage Loans; or (ii) Borrower has used any payments, collections, recoveries or other funds pertaining in any way to the Mortgage Loans in violation of the requirements of a Servicing Contract.
(r) Change to the Servicing Contracts. Any change to or default under a Servicing Contract that would result in a Material Adverse Effect on Borrower or the Guarantor.
(s) Reserved.
Section 6.2 Remedies. (a) If any Event of Default shall then be continuing, the Administrative Agent may, in its discretion or shall, upon the written request of the Majority Lenders, by written notice to the Borrower, the Guarantor, and the Lenders, take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender to enforce its claims against the Borrower or the Guarantor in any manner permitted under applicable law:
(i) declare the Commitments terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately without any other notice of any kind; or
(ii) declare the principal of and any accrued interest in respect of all Advances and all other Obligations owing hereunder and thereunder to be, whereupon the same shall become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and Guarantor;
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provided further, that (1) upon the occurrence of any Event of Default described in Section 6.1(d), automatically, and (2) upon the occurrence of any other Event of Default, at the request of (or with the consent of) the Majority Lenders, upon notice to the Borrower by the Administrative Agent, (A) each of the following shall immediately become due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by the Borrower: (I) the unpaid principal amount of and accrued interest on the Advances, and (II) all other Obligations; and (B) the Administrative Agent may enforce any and all Liens and security interests created pursuant to this Agreement and any other Transaction Document, subject to the Fannie Mae Requirements and the Freddie Mac Requirements.
(b) Without limiting the foregoing, upon any acceleration of the Obligations pursuant to this Section 6.2, the Administrative Agent, in addition to all other rights and remedies under this Agreement or otherwise, shall have all other rights and remedies provided under the UCC of each applicable jurisdiction and other Applicable Laws, which rights shall be cumulative. The Borrower and the Guarantor agree, upon the occurrence of an Event of Default and notice from the Administrative Agent, to assemble, at their expense, all of the Collateral that is in their possession (whether by return, repossession, or otherwise) at a place designated by the Administrative Agent. All out-of-pocket costs incurred by the Administrative Agent in the collection of all Obligations, and the enforcement of its rights hereunder, including attorneys’ fees and legal expenses, shall be paid by the Borrower and guaranteed by the Guarantor. Without limiting the foregoing, upon the occurrence of an Event of Default and the acceleration of the Loans pursuant to this Section 6.2, the Administrative Agent may, to the fullest extent permitted by Applicable Law, without notice, advertisement, hearing or process of law of any kind, (i) enter upon any premises where any of the Collateral which is in the possession of the Borrower or the Guarantor (whether by return, repossession, or otherwise) may be located and take possession of and remove such Collateral, (ii) sell any or all of such Collateral, free of all rights and claims of the Borrower or the Guarantor therein and thereto, at any public or private sale, and (iii) bid for and purchase any or all of such Collateral at any such sale. Any such sale shall be conducted in a commercially reasonable manner and in accordance with Applicable Law. The Borrower and Guarantor hereby expressly waive, to the fullest extent permitted by Applicable Law, any and all notices, advertisements, hearings or process of law in connection with the exercise by the Administrative Agent of any of its rights and remedies upon the occurrence of an Event of Default. The Administrative Agent and each Lender shall have the right (but not the obligation) to bid for and purchase any or all Collateral at any public or private sale. The Borrower and the Guarantor hereby agree that in any sale of any of the Collateral, the Administrative Agent is hereby authorized
to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of Applicable Law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any Governmental Authority, and the Borrower and Guarantor further agree that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner. The Administrative Agent shall not be liable for any sale, private or public, conducted in accordance with this Section 6.2(b).
(c) The exercise of remedies under this Section 6.2 shall be subject to the terms and conditions of the Acknowledgment Agreements.
Section 6.3 Equity Cure. Notwithstanding anything to the contrary contained in Section 6.1, for purposes of determining whether an Event of Default has occurred under Section 5.1(a)(iii) , any cash contribution (in the form of common equity or subordinated debt) made to the Borrower after the last day of any calendar month and on or prior to the day that is fifteen (15) Business Days after written notice from the Administrative Agent that the Borrower is not in compliance with Section 5.1(a)(iii) as of the end of the most recently ended calendar month will, at the request of the Borrower and to the extent so requested, be included in the calculation of such covenants by increasing the Adjusted Tangible Net Worth of the Borrower (or reducing the amount of Corporate Debt to the extent such amounts are utilized to pay down Corporate Debt) solely for the purpose of determining compliance with the Corporate Debt to Tangible Net Worth Ratio covenant set forth at Section 5.1(a)(iii) at the end of such period and any subsequent period that includes such period (any such cash contribution to the extent so requested by the Borrower to be included, a “Specified Contribution”); provided that (i) no more than eight Specified Contributions will be made in the aggregate, and (ii) all Specified Contributions will be disregarded for all other purposes under the Transaction Documents (including for purposes of determining other items governed by reference to any of the Financial Covenants or the components thereof); and provided further that with respect to any Specified Contribution in the form of subordinated debt, (i) it does not mature prior to the Maturity Date, (ii) it is subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms reasonably acceptable to the Administrative Agent, (iii) the interest thereon is payable-in-kind (allowing for deferment of interest payments and/or payment in the form of additional debt rather in cash), and (iv) it is otherwise on terms reasonably acceptable to the Administrative Agent.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.1 Appointment; Nature of Relationship. The Administrative Agent is appointed by the Lenders as the Administrative Agent hereunder and under each other Transaction Document, and each of the Lenders irrevocably authorizes the Administrative Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and
in the other Transaction Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement and that the Administrative Agent is merely acting as the representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the Lenders’ contractual representative, the Administrative Agent (A) does not assume any fiduciary duties to any of the Lenders, (B) is a “representative” of the Lenders within the meaning of Section 9-102 of the UCC as in effect in the State of New York and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Lenders agrees to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives. The Administrative Agent shall deliver to any Lender any written information delivered by or on behalf of the Borrower or the Guarantor to the Administrative Agent in connection with the transactions contemplated by this Agreement and the other Transaction Documents promptly after any Lender’s reasonable request therefor.
Section 7.2 Powers. The Administrative Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties or fiduciary duties to the Lenders, or any obligation to the Lenders to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by the Administrative Agent.
Section 7.3 General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, Guarantor, or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.
Section 7.4 No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Transaction Document or any borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Event of Default or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. The Administrative Agent shall not be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the
execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations (including the Guarantor), the Borrower or any of their respective Affiliates.
Section 7.5 Action on Instruction of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by the Majority Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Loan Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.6 Employment of Agents and Counsel. The Administrative Agent may execute any of its duties as the Administrative Agent hereunder and under any other Transaction Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Lenders and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Transaction Document.
Section 7.7 Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.
Section 7.8 The Administrative Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse and indemnify (on a pro rata basis based upon their Applicable Percentage) the Administrative Agent (A) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Transaction Documents, (B) for any other expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Transaction Documents and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents; provided, each Lender agrees to reimburse and indemnify the Administrative Agent for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in
connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents related to such Lender failing to maintain the confidentiality of any materials provided by the Credit Manager and/or for taking any actions that cause the Administrative Agent to be liable to Freddie Mac under the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable); and provided further that in each case no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of the Administrative Agent.
Section 7.9 Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes issued to it, in its capacity as a Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders”, as applicable, shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower, the Guarantor, or any of their Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.10 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and the Guarantor, and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Transaction Documents.
Section 7.11 Successor Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders, Fannie Mae, Freddie Mac, the Borrower, and the Guarantor. Notwithstanding anything herein to the contrary, following Freddie Mac’s execution of the Initial Freddie Mac Acknowledgment Agreement and Freddie Mac’s Acknowledgment Agreement, as applicable, no resignation of the Administrative Agent shall be effective until the following conditions have been satisfied: (x) receipt of Freddie Mac’s express written consent to such resignation and satisfaction of the other terms and conditions of this Section 7.11 and of the Initial Freddie Mac Acknowledgment Agreement and Freddie Mac Acknowledgment Agreement, as applicable and (y) execution by the successor Administrative Agent, Borrower and Fannie Mae of an acknowledgment agreement (or an amendment or modification to the Fannie Mae Acknowledgment Agreement) satisfactory to Fannie Mae. The Administrative Agent may be removed at any time for cause by written notice received by the Administrative Agent from all of the other Lenders. Upon any such resignation or removal, the Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Lenders and shall have
accepted such appointment within thirty (30) days after the exiting Administrative Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent (but only if such successor is reasonably acceptable to each Lender) or petition a court of competent jurisdiction to appoint a successor Agent. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent and the execution by such successor Administrative Agent, Borrower and Fannie Mae of an acknowledgment agreement (or an amendment or modification to the Fannie Mae Acknowledgment Agreement) satisfactory to Fannie Mae, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Administrative Agent, and the exiting Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Transaction Documents.
Section 7.12 Transaction Documents. Each Lender authorizes the Administrative Agent to enter into each of the Transaction Documents to which it is a party and each Lender authorizes the Administrative Agent to take all action contemplated by such documents in its capacity as Administrative Agent; provided that, with respect to the Credit Manager Agreement, each Lender hereunder shall execute and deliver a joinder or related agreement acknowledging acceptance of the terms thereof, on or prior to becoming a Lender hereunder. Each Lender agrees that no Lender shall have the right individually to seek to realize upon the security granted by any Transaction Document or seek to enforce or have standing to exercise any remedy against any Agency directly, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Lenders upon the terms of the Transaction Documents.
ARTICLE VIII
COLLECTION ACCOUNT
Section 8.1 Collection Account.
(a) The Borrower shall establish and maintain or cause to be maintained at the Account Bank, a segregated non-interest bearing account titled “Home Point Financial Corporation in trust for Goldman Sachs Bank USA, as Administrative Agent – FNMA/FMAC/GNMA Collection Account”, which account has been established by the Borrower for the purpose of holding cash proceeds of the Assets (including any income from the Assets related thereto other than the Base Servicing Fee from and after an Event of Default, and as to proceeds from any Transfer of Servicing limited only to Surplus Proceeds or Net Proceeds, as applicable and as defined in the Initial Acknowledgment Agreement or Acknowledgment Agreements, as applicable) for the benefit of the Lenders (such account, the “Collection Account”), such account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Secured Parties. The Collection Account shall be subject at all times to the Account Control Agreement and may not be a “zero balance” account.
(b) On each Monthly Payment Date during any Acknowledgment Agreement Trigger Period, or following (A) delivery of an Activation Notice by the Administrative Agent or (B) the occurrence and continuation of an Event of Default, the Borrower shall cause all Servicing Fees (other than the Base Servicing Fee) and other proceeds of MSR Collateral (limited to Surplus Proceeds or Net Proceeds, as applicable, in the event of a Transfer of Servicing) to be remitted, free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, to the Collection Account no later than two (2) Business Days following receipt thereof. The Borrower may withdraw funds from the Collection Account in its discretion in the ordinary course of business, subject to the covenants set forth in Section 5.2(l). On each Monthly Payment Date during any Acknowledgment Agreement Trigger Period, or following (A) delivery of an Activation Notice by the Administrative Agent or (B) the occurrence and during the continuation of an Event of Default, all amounts on deposit in the Collection Account shall be applied pursuant to Section 2.7(c).
ARTICLE IX
GUARANTY
Section 9.1 Guaranty. (a) Guarantor hereby unconditionally and irrevocably guarantees the prompt and complete payment and performance of the Guaranteed Obligations when due (whether at the stated maturity, by acceleration or otherwise). This Guaranty is a guarantee of payment and performance and not merely a guaranty of collection.
(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 the Administrative Agent 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, the 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 the Borrower may be free from any due and payable Obligations.
Section 9.2 Subrogation. Notwithstanding any payment or payments made by the Guarantor hereunder or any set-off or application of funds of the Guarantor by the Administrative Agent or the Lenders, the Guarantor shall not be entitled to be subrogated to any of the rights of the Administrative Agent or the Lenders against the Borrower or any other guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or the Lenders for the payment of the Guaranteed Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other guarantor or Person in respect of payments made by the Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders on account of the Guaranteed Obligations are paid in full. If any amount shall be paid to the 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 the Administrative Agent, on behalf of the Lenders, and shall forthwith be paid to the Administrative Agent, to be credited and applied against the Guaranteed Obligations.
Section 9.3 Amendments, etc. with Respect to the Guaranteed Obligations. Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Guarantor, and without notice to or further assent by the Guarantor, any demand for payment of any of the Guaranteed Obligations made by the Administrative Agent or the Lenders may be rescinded by the Administrative Agent or the Lenders, 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 the Administrative Agent or the Lenders, and this Agreement, the other Transaction Documents 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 the Administrative Agent and Lenders, may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or the Lenders, for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor the Lenders shall 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 the Guarantor, the Administrative Agent may, but shall be under no obligation to, make a similar demand on the Borrower, and any failure by the Administrative Agent to make any such demand or to collect any payments from the Borrower or any release of the Borrower or such other guarantor shall not relieve the 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 the Administrative Agent, on behalf of the Lenders, against the Guarantor. For the purposes hereof “demand” shall include, but shall not be limited to, the commencement and continuance of any legal proceedings.
Section 9.4 Guaranty Absolute and Unconditional. (a) 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 the Administrative Agent or the Lenders, 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 the Borrower or the Guarantor, on the one hand, and the Administrative Agent and the Lenders, 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 the Borrower 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 Transaction Documents, 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 the Administrative Agent or the Lenders, (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 the Borrower against the Administrative Agent or the Lenders, (iii) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or the Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Guaranteed Obligations, or of the 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 against the Guarantor, the Administrative Agent may, but shall be under no obligation, to pursue such rights and remedies that it may have against the Borrower 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 the Administrative Agent to pursue such other rights or remedies or to collect any payments from the Borrower 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 the Borrower or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve the 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 the Administrative Agent against the Guarantor. This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantor and its successors and assigns thereof, and shall inure to the benefit of the Administrative Agent, the Lenders, and their successors, permitted endorsees, permitted transferees and permitted assigns, until all the Obligations and the Guaranteed Obligations of the 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, the Borrower may be free from any due and payable Obligations.
(b) Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to the Administrative Agent and the Lenders as follows:
(i) To the extent permitted by law, Guarantor hereby waives any defense arising by reason of, and any and all right to assert against the Administrative Agent or the Lenders, any claim or defense based upon, an election of remedies by the Administrative Agent which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against the Borrower for reimbursement or contribution, and/or any other rights of the Guarantor to proceed against the Borrower, or against any other person or security.
(ii) Guarantor is presently informed of the financial condition of the Borrower and of all other circumstances which diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations. The Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed of the financial condition of the Borrower, of all other circumstances which bear upon the risk of nonpayment and that it will continue to rely upon sources other than the Administrative Agent and the Lenders for such information and will not rely upon the Administrative Agent or the Lenders for any such information. Guarantor hereby waives its right, if any, to require the Administrative Agent or the Lenders 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.
(iii) Guarantor has independently reviewed this Agreement and related Transaction Documents and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Agreement, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any Liens or security interests of any kind or nature granted by the Borrower
or any other guarantor or Person to the Administrative Agent, now or at any time and from time to time in the future.
Section 9.5 Reinstatement. In the event that any payment on account of any of the Guaranteed Obligations is ever required to be returned by the Administrative Agent or the Lenders, for any reason (including, without limitation, bankruptcy or reorganization of the Borrower 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.
Section 9.6 Payments. Guarantor hereby agrees that any payments hereunder will be promptly paid to the Administrative Agent, on behalf of the Lenders, 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 the Administrative Agent, on behalf of the Lenders.
Section 9.7 Events of Default. If an Event of Default shall have occurred and be continuing, Guarantor agrees that, as between Guarantor, on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Obligations and Guaranteed Obligations may be declared to be due for purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any such declaration as against a Borrower and that, in the event of any such declaration (or attempted declaration), such Obligations and Guaranteed Obligations shall forthwith become due by Guarantor for purposes of this Guaranty.
ARTICLE X
MISCELLANEOUS
Section 10.1 Survival . All representations and warranties made by the parties herein, all indemnification obligations of the Borrower and Guarantor hereunder, and all terms of the Guaranty made by the Guarantor, shall survive, and shall continue in full force and effect, after the making and the repayment of the Advances hereunder and the termination of this Agreement.
Section 10.2 Amendments, Etc. (a) Neither this Agreement nor any other Transaction Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower, the Administrative Agent and the Majority Lenders, except in the case of any agreement, amendment or modification required to effectuate an increase in the Commitments then in effect, which agreement, amendment or modification shall require the consent of the Borrower, the Guarantor, the Administrative Agent and each Lender consenting to such increase in the Commitments, (ii) in the case of any other Transaction Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Borrower, with the consent of the Majority Lenders, or (iii) with respect to certain matters relating to the Collection
Account, as provided in Section 5.2(m); provided that no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (B) reduce or forgive the principal amount of any Advance or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby, (C) postpone any scheduled date of payment of the principal amount of any Advance, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby, (D) change any of the provisions of this Section or the definition of “Majority Lenders” or any other provision of any Transaction Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (E) change Section 10.7(b), (F) change the provisions of Section 2.14 relating to the extension of the Availability Period End Date, or the consent requirements with respect thereto, except with the consent of each Lender (other than any Defaulting Lender), or (G) release all or substantially all of the Collateral without the written consent of each Lender (other than any Defaulting Lender); provided, further, that no such agreement shall amend or modify the definition of “Borrowing Base” or any constituent term thereof in a manner that is adverse to the Lenders without the written consent of each Lender (other than any Defaulting Lender); provided, further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent (it being understood that any amendment to Section 10.7 shall require the consent of the Administrative Agent). The Administrative Agent may also amend Exhibit E attached hereto to reflect assignments entered into pursuant to Section 10.8. Notwithstanding anything herein to the contrary, no Loan Note nor Exhibit C attached hereto may be amended without the prior express written consent of Freddie Mac.
(b) The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Borrower or the Guarantor on any Collateral (i) upon the termination of all of the Commitments, payment and satisfaction in full in cash of all Obligations (other than contingent obligations), (ii) constituting property being sold or disposed of if the sale or disposition is made in compliance with the terms of this Agreement, or (iii) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VI. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Majority Lenders. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Borrower or the Guarantor in respect of) all interests retained by the Borrower or Guarantor, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.
Section 10.3 Notices, Etc. All notices and other communications provided to any Party hereunder shall be in writing and mailed or delivered by courier or facsimile at the address
for such party set forth in Schedule 10.3 hereto or in the case of any party, at such address or other address as shall be designated by such party in a written notice to each of the other parties hereto. Notwithstanding the foregoing, (i) the Schedule of Assets may be delivered by posting to a FTP site and (ii) each Monthly Report described in Section 5.1(b), any notice obligations required by Section 5.1(f), each Borrowing Base Certificate described in Section 2.4(a) and any funding request and other reporting may be delivered by electronic mail; provided that such electronic mail is sent by a Responsible Officer and each such Monthly Report or Borrowing Base Certificate is accompanied by an electronic reproduction of the signature of a Responsible Officer. All such notices and communications shall be effective, upon receipt; provided that notice by facsimile or email shall be effective upon electronic or telephonic confirmation of receipt from the recipient.
Section 10.4 No Waiver; Remedies. No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under the Loan Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 10.5 Indemnification. The Borrower agrees to indemnify the Administrative Agent, each Lender, and their respective Related Parties (collectively, the “Indemnitees”) from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses to which such Indemnitee may become subject arising out of, resulting from or in connection with any of the Transaction Documents or any other agreement, document, instrument or transaction related thereto, the use of proceeds thereof and the transactions contemplated hereby, and to reimburse each Indemnitee upon written demand therefor (together with reasonable back-up documentation supporting such reimbursement request) for any reasonable and documented legal or other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing of one counsel to such Indemnitees, taken as a whole, and, in the case of a conflict of interest, of one additional counsel to the affected Indemnitee taken as a whole (and, if reasonably necessary, of one local counsel or one regulatory counsel in any material relevant jurisdiction); provided that the foregoing indemnity and reimbursement obligation will not, as to any Indemnitee, apply to (A) losses, claims, damages, liabilities or related expenses to the extent they are found in a final non-appealable judgment of a court of competent jurisdiction to arise from the willful misconduct, bad faith or gross negligence of such Indemnitee or any of its affiliates or Controlling persons or any of the officers, directors, employees, advisors or agents of any of the foregoing or (B) any settlement entered into by such Indemnitee without the Borrower’s written consent (such consent not to be unreasonably withheld or delayed). This Section 10.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax Proceeding. Each party hereto, waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding against any other party hereto arising out of or relating to this Agreement or any other Transaction Document any special, exemplary, indirect, punitive or consequential damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement).
Section 10.6 Costs, Expenses and Taxes. The Borrower agrees to pay all reasonable and documented costs and expenses in connection with the preparation, execution,
delivery, filing, recording, administration, modification, amendment or waiver of this Agreement, the Loan Notes and the other documents to be delivered hereunder, including the reasonable and documented fees and out-of-pocket expenses of counsel for the Administrative Agent (limited to one primary counsel) with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement and the other Transaction Documents; provided that the Borrower’s obligations in respect of amounts incurred prior to the Closing Date through the date on which the Acknowledgment Agreements are obtained shall not exceed [***]. The Borrower further agrees to pay on demand all reasonable and documented costs and expenses, if any (including reasonable and documented counsel fees and expenses) (A) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Loan Notes and the other documents to be delivered hereunder and (B) incurred by the Administrative Agent (subject to the limitation in the immediately preceding sentence) in connection with the transactions described herein and in the other Transaction Documents (including in connection with diligence performed with respect to the Collateral), including in any case reasonable and documented counsel fees and expenses in connection with the enforcement of rights under this Section 10.6. In addition, the Borrower shall pay any and all Other Taxes and agrees to save the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such Other Taxes.
Section 10.7 Right of Set-off; Ratable Payments; Relations Among Lenders. (a) Upon the occurrence and during the continuance of any Event of Default, each of the Administrative Agent and the Lenders are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Administrative Agent or such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Loan Notes, whether or not the Administrative Agent or such Lenders shall have made any demand under this Agreement or the Loan Notes and although such obligations may be unmatured. The Administrative Agent and each Lender agrees promptly to notify the Borrower after any such set-off and application; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and the Lenders under this Section 10.7(a) are in addition to other rights and remedies (including other rights of set-off) which the Administrative Agent and the Lenders may have.
(b) If any Lender, whether by setoff or otherwise, has payment made to it upon its Advances in a greater proportion than that received by any other Lender, such other Lender agrees, promptly upon demand, to purchase a portion of the Advances held by the Lenders so that after such purchase each Lender will hold its ratable share of Advances. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon written demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to the obligations owing to them. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.
(c) Except with respect to the exercise of set-off rights of any Lender in accordance with Section 10.7(a), the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or any other obligor hereunder or with respect to any Collateral or Transaction Document, without the prior written consent of the other Lenders or, as may be provided in this Agreement or the other Transaction Documents, at the direction of the Administrative Agent.
(d) The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.
Section 10.8 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Guarantor, the Administrative Agent and each Lender, and their respective successors and permitted assigns, except that the Borrower and the Guarantor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Administrative Agent and the Lenders, and any assignment by the Borrower or Guarantor in violation of this Section 10.8 shall be null and void. Notwithstanding anything to the contrary in the first sentence of this Section 10.8, any Lender may at any time, without the consent of the Administrative Agent, assign all or any portion of its rights under this Agreement and any Loan Note to a Federal Reserve Bank; provided that no such assignment or pledge shall release the transferor Lender from its obligations hereunder. Subject to the terms of the Initial Acknowledgment Agreement and Acknowledgment Agreements, as applicable, each Lender may assign to one or more banks or other entities all or any part or portion of, or may grant participations to one or more banks or other entities in all or any part or portion of its rights and obligations hereunder (including its Commitment, its Loan Notes or its Advances); provided that (A) each party to such assignment shall execute and deliver an Assignment and Assumption to the Administrative Agent, (B) shall be to (x) a bank, other financial institution or lender which is reasonably acceptable to the Administrative Agent, or (y) a “qualified institutional buyer”, as defined in Rule 144A under the Securities Act of 1933, as amended, reasonably acceptable to the Administrative Agent, and (C) unless an Event of Default has occurred and is continuing, the Borrower shall have the right to consent to any assignment of the Lender’s rights and obligations under this Agreement, such consent not to be unreasonably withheld, conditioned or delayed; provided that no such consent of the Administrative Agent or the Borrower shall be required for an assignment to any Lender or an Affiliate of a Lender.
Upon, and to the extent of, any assignment (unless otherwise stated therein) made by any Lender hereunder, the assignee or purchaser of such assignment shall be a Lender hereunder for all purposes of this Agreement and shall have all the rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.15(g)) of a Lender hereunder. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a register (the “Register”) for the recordation of the names and addresses of the Lenders, the Commitment of and outstanding principal amounts (and accrued interest) of the Advances owing to each Lender pursuant to the terms hereof from time to time and any assignment of such Commitment or outstanding Advances. The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
Any Lender may sell participation interests in its Advances and obligations hereunder (each such recipient of a participation a “Participant”); provided that after giving effect to the sale of such participation, such Lender’s obligations hereunder and rights to consent to any waiver hereunder or amendment hereof shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable to such Lender hereunder and all rights to consent to any waiver hereunder or amendment hereof shall be determined as if such Lender had not sold such participation interest, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender and not be obligated to deal with such participant. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, 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 Advances or other obligations under the Transaction Documents (the “Participant Register”); provided that no Lender 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 Transaction Document) 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 such Lender 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. For the avoidance of doubt, the Administrative Agent shall have no responsibility for maintaining a Participant Register. Each recipient of a participation shall, to the fullest extent permitted by law, have the same rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.15(g) (it being understood that the documentation required under Section 2.15(g) shall be delivered to the participating Lender)), hereunder with respect to the rights and benefits so participated as it would have if it were a Lender hereunder, except that no Participant shall be entitled to receive any greater payment under Sections 2.11 or 2.15 than its participating Lender 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.
Notwithstanding any other provision of this Agreement to the contrary, a Lender may pledge as collateral, or grant a security interest in, all or any portion of its rights in, to and under this Agreement to (i) a security trustee in connection with the funding by such Lender of Advances or (ii) a Federal Reserve Bank to secure obligations to such Federal Reserve Bank, in each case without the consent of the Borrower; provided that no such pledge or grant shall release such Lender from its obligations under this Agreement.
Section 10.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 10.10 Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK (NEW YORK COUNTY) OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 10.11 Waiver of Jury Trial. ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.
Section 10.12 Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Agreement.
Section 10.13 Tax Characterization. The parties hereto intend for the transactions effected hereunder to constitute indebtedness of the Borrower to the Lenders, secured by the Collateral, for U.S. federal income tax purposes.
Section 10.14 Execution. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 10.15 Limitations on Liability. None of the members, managers, general or limited partners, officers, employees, agents, shareholders, directors, Affiliates or holders of
corporate interests of or in the Borrower or the Guarantor shall be under any liability to the Administrative Agent or the Lenders, respectively, any of their successors or assigns, or any other Person for any action taken or for refraining from the taking of any action in such capacities or otherwise pursuant to this Agreement or for any obligation or covenant under this Agreement, it being understood that this Agreement and the obligations created hereunder shall be, to the fullest extent permitted under applicable law, with respect to the Borrower or the Guarantor, solely the corporate obligations of the Borrower or the Guarantor, as applicable. The Borrower, the Guarantor, and any member, manager, partner, officer, employee, agent, shareholder, director, Affiliate or holder of a corporate interest of or in the Borrower or Guarantor, as applicable, may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Borrower or the Guarantor) respecting any matters arising hereunder.
Section 10.16 Confidentiality. (a) This Agreement and its terms, provisions, supplements and amendments, and notices and reports delivered hereunder or under any other Transaction Document, are proprietary to the Administrative Agent, the Lenders, the Borrower, and the 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 Administrative Agent (at the written direction of the applicable Lender), the Borrower, or the Guarantor, as applicable, except for (i) disclosure to Administrative Agent, any Lender’s assignees, participants, prospective assignees or prospective participants, any Lender’s, Guarantor’s, or Borrower’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 10.16, 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 Transaction Documents, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that neither the Borrower nor the Guarantor may disclose the name of or identifying information with respect the Administrative Agent or the Lenders 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 the Administrative Agent (at the written direction of the applicable Lender).
(b) Notwithstanding anything in this Agreement to the contrary, the Administrative Agent and each Lender 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 Assets and/or any applicable terms of this Agreement (the “Confidential Information”). The Administrative Agent and each Lender 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 the Administrative Agent and each Lender agree to maintain such nonpublic personal information that it receives hereunder
in accordance with the GLB Act and other applicable federal and state privacy laws. Notwithstanding the foregoing, the Administrative Agent and the Lenders may disclose Confidential Information expressly for marketing purposes, as and to the extent permitted by the GLB Act. The Administrative Agent and each Lender 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 any Lender, the Administrative Agent or any Affiliate of the Administrative Agent which the Administrative Agent or any Lender 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. The Administrative Agent and each Lender each 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 effect. The Administrative Agent shall notify the Borrower promptly following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of the Borrower or any Affiliate of the Borrower.
Section 10.17 Merger. This Agreement, the exhibits and schedules hereto, the other Transaction Documents and the agreements, documents and instruments to be executed and delivered in connection herewith and therewith contain the final, complete and exclusive statement of the agreement between the parties with respect to the transactions contemplated herein and all other prior or contemporaneous oral communications (including, for avoidance of doubt, communications in connection with the preparation of this Agreement and the other Transaction Documents) and agreements, and all prior written communications (including, for avoidance of doubt, written drafts of this Agreement and the other Transaction Documents) and agreements, with respect to the subject matter hereof are merged herein and superseded.
Section 10.18 Lien Release. When any portion of the Collateral is transferred as permitted by the terms hereof, the security interest in and the Lien on such Collateral shall automatically be released, and the Secured Parties will no longer have any security interest in, lien on, or claim against such Collateral. The Administrative Agent agrees to file termination statements and take all other action reasonably requested by the Borrower (at the Borrower’s expense) to evidence such release.
Section 10.19 Customer Identification - USA Patriot Act Notice. The Administrative Agent and each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Patriot Act”), and the Administrative Agent’s and each Lender’s policies and practices, the Administrative Agent and the Lenders are required to obtain, verify and record certain information and documentation that identifies the Borrower, which information includes the name and address of the Borrower and such other information that will allow the Administrative Agent or such Lender to identify the Borrower in accordance with the Patriot Act.
Section 10.20 Administrative Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations. In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to funding of terrorist activities and money laundering, the Administrative Agent is
required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Administrative Agent. Accordingly, each of the parties agrees to provide to the Administrative Agent upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Administrative Agent to comply with such laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including the USA Patriot Act and any other laws relating to funding of terrorist activities and money laundering.
Section 10.21 No Novation. This Agreement is not intended to, and does not, novate the Original Credit Agreement, and the Borrower reaffirms that the existing security interest created by the Original Credit Agreement and each other Transaction Document is and remains in full force and effect.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
HOME POINT FINANCIAL CORPORATION, | ||
as Borrower | ||
By: | /s/ Maria Fregosi | |
Name: Maria Fregosi | ||
Title: Chief Financial Officer |
GS - HOME POINT: AMENDED AND RESTATED CREDIT AGREEMENT
HOME POINT CAPITAL INC., as Guarantor | ||
By: | /s/ Maria Fregosi | |
Name: Maria Fregosi | ||
Title: Chief Financial Officer |
GS - HOME POINT: AMENDED AND RESTATED CREDIT AGREEMENT
GOLDMAN SACHS BANK USA, as | ||
Administrative Agent | ||
By: | /s/ BRYAN HOLT | |
Name: Bryan Holt | ||
Title: AUTHORIZED PERSON |
GS - HOME POINT: AMENDED AND RESTATED CREDIT AGREEMENT
GOLDMAN SACHS BANK USA, as Lender | ||
By: | /s/ BRYAN HOLT | |
Name: Bryan Holt | ||
Title: AUTHORIZED PERSON |
GS - HOME POINT: AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBIT A
Form of Compliance Certificate
Compliance
Certificate for the
[Quarter] [Month]
Ended
To: Goldman Sachs Bank USA
200 West Street
New York, NY 10282
Attention: Resi Structured Finance /
Structured Finance Investing & Lending
Telephone No.:[***]
Email: [***]
Goldman Sachs Warehouse Covenants
2001 Ross Ave, Suite 2800
Dallas, TX 75201
Attention: [***]
Telephone No.: [***]
Email: [***]
Structured Finance Asset Management
2001 Ross Ave, Suite 2800
Dallas, TX 75201
Attention: [***]
Telephone No.: [***]
Email: [***]
Re: | Compliance Certificate |
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement, dated as of July 11, 2019, by and between Home Point Financial Corporation, as borrower (“Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as administrative agent (“Agent”) and the lenders from time to time party thereto (as amended, supplemented or restated from time to time, the “Agreement”); capitalized terms used herein without definition shall have the meanings assigned those terms in the Agreement.
This Certificate is furnished to the Agent pursuant to Section 5.1(a), Section 5.1(b)(iii) and Section 5.1(bb)(vii) of the Agreement.
1. Authority. I am the duly elected, qualified and acting [__] of [ Borrower][Guarantor] and hereby certify that the information provided in this Certificate is true, correct and complete.
2. Fiscal Period. This Certificate is for the fiscal period ended [__] (the “Certification Date”).
3. Financial Statements. The accompanying financial statements fairly present, in all material respects, the financial condition and results of operations of [ Borrower][Guarantor] in accordance with GAAP, consistently applied, as at the end of, and for the fiscal [quarter][year] ended on, the Certification Date (subject to normal year-end audit adjustments).
4. No Default. To my knowledge, no Event of Default or Potential Event of Default under the Agreement has occurred or is continuing as of the date of this Certificate.
5. Minimum Liquidity. [ Borrower][Guarantor] has, as of the last day of each calendar month ending after the Closing Date, complied with the liquidity covenant pursuant to Section 5.1(a)(i) of the Agreement during the fiscal [quarter][month] ending on the Certification Date. The information provided below is true, complete and correct as of the Certification Date:
(A) Cash: | $[__].[__] |
(B) Cash Equivalents: | $[__].[__] |
(C) Availability under Agreement: | $[__].[__] |
--- | (A), (B) and (C) is equal to or greater than [________________]. |
6. Minimum Adjusted Tangible Net Worth. [ Borrower][Guarantor] has at the end of each calendar month complied with the minimum Adjusted Tangible Net Worth covenant pursuant to Section 5.1(a)(ii) of the Agreement during the fiscal [quarter][month] ending on the Certification Date. The information provided below is true, complete and accurate as of the Certification Date:
(A) Total Assets: | $[__].[__] |
(B) Adjusted Tangible Net Worth: | $[__].[__] |
--- (B) is at least equal to or greater than [$____________]. |
7. Corporate Debt to Tangible Net Worth. [ Borrower][Guarantor] has at the end of each calendar month complied with the Corporate Debt to Tangible Net Worth Ratio covenant pursuant to Section 5.1(a)(iii) of the Agreement during the fiscal [quarter] [month] ending on the Certification Date. The information provided below is true, complete and accurate as of the Certification Date:
(A) Corporate Debt: $[ ].[ ] | |
(B) Adjusted Tangible Net Worth: | $[__].[__] |
(A) | over (B) is at least equal to or greater than [***]. |
In Witness Whereof, the undersigned has executed this Certificate on the date set forth below.
Name: | ||
Title: | ||
Date: |
SCHEDULE 1
[ATTACH UPDATED SCHEDULE OF ASSETS AS OF CERTIFICATION DATE]
EXHIBIT B
Form of Notice of Borrowing
_______________, 20 __
To: Goldman Sachs Bank USA as Administrative Agent
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement, dated as of July 11, 2019 (the “Credit Agreement”), by and among Home Point Financial Corporation, as Borrower (the “Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), and the Lenders. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Lenders provide an Advance based on the following criteria:
Aggregate principal amount of Advance requested: $ ___________________
Requested Borrowing Date: ___________, 20 __ 1
● Account(s) to which Agent should wire the balance of the requested funds:
Bank Name:
ABA No.:
Account Name:
Account No.:
Reference:
Attached to this notice as Exhibit A is the Borrowing Base Certificate in connection with this Advance.
The Borrower hereby represents and warrants that the conditions set forth in Section 3.2 of the Credit Agreement have been satisfied on and as of the date hereof.
1 No earlier than three Business Days after the date of delivery of this Notice of Borrowing.
Very truly yours, | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Title: |
EXHIBIT A TO NOTICE OF BORROWING
Form of Borrowing Base Certificate
BORROWING BASE CERTIFICATE
HOME POINT FINANCIAL CORPORATION
[___________], 20[_]
In connection with that certain Amended and Restated Credit Agreement, dated as of July 11, 2019 (the “Credit Agreement”), among Home Point Financial Corporation, as Borrower (the “Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as administrative agent for the financial institutions that may become parties thereto as Lenders, and the Lenders, the Borrower hereby certifies that:
The sum of all outstanding Advances will not exceed the related Aggregate Commitment plus any Advances approved in excess of such Aggregate Commitment pursuant to Section 2.6 of the Credit Agreement, after giving effect to the Advance requested in the attached Borrowing Notice.
The attached Schedule I sets forth the borrowing base calculations (the “Borrowing Base Calculations”) reflecting a Borrowing Base that equals or exceeds the sum of the outstanding Advances relating to the Commitments after giving effect to the Advance requested and provides all data used, in Excel format, to calculate the foregoing as of the Borrowing Date and the computations reflected in the Borrowing Base Calculations are true, correct and complete.
The attached Schedule of Assets and Schedule of Ineligible Assets includes all Assets pledged to the Administrative Agent pursuant to the terms of the Credit Agreement, and that all information contained therein is true, accurate and complete.
Capitalized terms used but not defined herein shall have the meanings specified in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first written above.
HOME POINT FINANCIAL CORPORATION, as Borrower | ||
By: | ||
Name: | ||
Title: |
EXHIBIT C
Form of Loan Note
LOAN NOTE
● | C |
ommitment up to $[●] | [●], 201[_] |
New York, New York |
● THE HOLDER OF THIS NOTE SHALL BE (I) SUBJECT TO, AND BY ACCEPTANCE OF SUCH LOAN NOTE RATIFIES AND REAFFIRMS, THE PROVISIONS CONTAINED IN THE CREDIT AGREEMENT (AS DEFINED BELOW), AND (II) SUBORDINATE TO (A) ALL RIGHTS, POWERS AND PREROGATIVES OF THE AGENCIES; AND (B) CLAIMS OF THE AGENCIES ARISING OUT OF ANY AND ALL DEFAULTS UNDER A SERVICING CONTRACT WITH THE AGENCIES, AND OUTSTANDING PREROGATIVES OF THE AGENCIES, ALL AS MORE PARTICULARLY SET FORTH IN THE INITIAL ACKNOWLEDGMENT AGREEMENT OR ACKNOWLEDGMENT AGREEMENTS (AS APPLICABLE) AND THE CREDIT AGREEMENT.
● THE RIGHTS, POWERS AND PREROGATIVES OF THE AGENCIES INCLUDE THE RIGHT OF THE AGENCIES TO DISQUALIFY (IN WHOLE OR IN PART) THE BORROWER FROM PARTICIPATING IN A MORTGAGE SELLING OR SERVICING PROGRAM OR A SECURITIES GUARANTY PROGRAM WITH THE AGENCIES; THE RIGHT TO TERMINATE (IN WHOLE OR IN PART) SERVICING CONTRACT RIGHTS OF THE BORROWER RELATING TO SUCH MORTGAGE SELLING OR SERVICING PROGRAM OR SECURITIES GUARANTY PROGRAM; AND THE RIGHT TO TRANSFER AND SELL ALL OR ANY PORTION OF THE SERVICING CONTRACT RIGHTS FOLLOWING THE TERMINATION OF THOSE RIGHTS.
NO LOAN NOTE MAY BE TRANSFERRED EXCEPT IN STRICT COMPLIANCE WITH THE RESTRICTIONS ON ASSIGNMENTS, AND SUBJECT TO THE LIMITATIONS, SET FORTH IN SECTION 10.8 OF THE CREDIT AGREEMENT. PARTICIPATIONS IN ANY LOAN NOTE MAY ONLY BE CONVEYED IN STRICT COMPLIANCE WITH, AND SUBJECT TO THE LIMITATIONS SET FORTH IN, SECTION 10.8 OF THE CREDIT AGREEMENT. ANY PURPORTED TRANSFER OF ANY LOAN NOTE OR ANY BENEFICIAL INTERESTS THEREIN THAT IS IN BREACH, AT THE TIME MADE, OF ANY TRANSFER RESTRICTIONS SET FORTH IN THE CREDIT AGREEMENT IS VOID AB INITIO.
Reference is made to that certain Amended and Restated Credit Agreement, dated as of July 11, 2019 (as may be amended from time to time, the “Credit Agreement”), by and
among Home Point Financial Corporation (the “Borrower”), Home Point Capital Inc. (the “Guarantor”), Goldman Sachs Bank USA, as administrative agent for the Lenders that may become parties thereto (the “Administrative Agent”), and the Lenders. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay [●], as a Lender (the “Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement (whether or not shown on Schedule I attached hereto (or such electronic counterpart)), in immediately available funds in lawful money of the United States the principal amount of up to $[●] or, if less, the aggregate unpaid principal amount of all Advances made by the Lenders to the Borrower pursuant to the Credit Agreement, together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Loan Note Holder, on the unpaid principal amount of each such Advance from time to time from the date of each such Advance until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral including the Assets.
In the event of any inconsistency between the provisions of this Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS LOAN NOTE.
Subject to the terms of Section 10.8 of the Credit Agreement, this Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with any applicable law. This Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.
No Lender shall have any right individually to realize upon any of the Collateral, it being understood and agreed that (i) all powers, rights and remedies under the Credit Agreement may be exercised solely by the Administrative Agent, on behalf of Lenders in accordance with the terms of the Credit Agreement and all powers, rights and remedies under the Transaction Documents may be exercised solely by the Administrative Agent, (ii) in the event any notice is due from an Agency pursuant to its Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable) or otherwise, the Agency shall be deemed to have complied to the extent the notice is provided to the Administrative Agent under such Agency’s Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable); and the Lender, by its acceptance of this Loan Note, acknowledges and agrees that only the Administrative Agent will receive such notice and that no Lender has a right to require an Agency to send it a copy of such notice or otherwise communicate with it, and (iii) any disputes, claims or suits against an Agency arising out of or relating to the Credit Agreement or such Agency’s Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable) may be submitted and pursued only by the Administrative Agent and not by any Lender directly.
In the event of any dispute, claim or suit between the Lenders, the Borrower, the Guarantor, and/or the Administrative Agent, on the one hand, and an Agency, on the other, including without limitation, any claim made or position taken by a Lender in a Borrower bankruptcy proceeding, the Lender, by acceptance of this Note, acknowledges and agrees that for all purposes of the Credit Agreement the Borrower and the Administrative Agent are the sole Persons with any right to deal with an Agency with respect to the Credit Agreement or the applicable Initial Acknowledgment Agreement or Acknowledgment Agreement.
Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]
IN WITNESS WHEREOF, this Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Title: |
Schedule I
INCREASES AND DECREASES
Date |
Agency |
Unpaid Principal Amount |
Increase |
Decrease |
Total |
Cost of Funds |
Interest Accrual Period |
Notation made by: |
EXHIBIT D
Assignment and Assumption
ANY HOLDER OF A LOAN NOTE (AS SUCH TERM IS DEFINED IN THE CREDIT AGREEMENT, WHICH IS DEFINED BELOW) SHALL BE (I) SUBJECT TO, AND BY ACCEPTANCE OF SUCH LOAN NOTE RATIFIES AND REAFFIRMS, THE PROVISIONS CONTAINED IN THE CREDIT AGREEMENT (AS DEFINED BELOW), AND (II) SUBORDINATE TO (A) ALL RIGHTS, POWERS AND PREROGATIVES OF THE AGENCIES; AND (B) CLAIMS OF THE AGENCIES ARISING OUT OF ANY AND ALL DEFAULTS UNDER A SERVICING CONTRACT WITH THE AGENCIES, AND OUTSTANDING PREROGATIVES OF THE AGENCIES, ALL AS MORE PARTICULARLY SET FORTH IN THE INITIAL ACKNOWLEDGMENT AGREEMENT OR ACKNOWLEDGMENT AGREEMENTS (AS APPLICABLE) AND THE CREDIT AGREEMENT.
● THE RIGHTS, POWERS AND PREROGATIVES OF THE AGENCIES INCLUDE THE RIGHT OF THE AGENCIES TO DISQUALIFY (IN WHOLE OR IN PART) THE BORROWER FROM PARTICIPATING IN A MORTGAGE SELLING OR SERVICING PROGRAM OR A SECURITIES GUARANTY PROGRAM WITH THE AGENCIES; THE RIGHT TO TERMINATE (IN WHOLE OR IN PART) SERVICING CONTRACT RIGHTS OF THE BORROWER RELATING TO SUCH MORTGAGE SELLING OR SERVICING PROGRAM OR SECURITIES GUARANTY PROGRAM; AND THE RIGHT TO TRANSFER AND SELL ALL OR ANY PORTION OF THE SERVICING CONTRACT RIGHTS FOLLOWING THE TERMINATION OF THOSE RIGHTS.
● NO LOAN NOTE MAY BE TRANSFERRED EXCEPT IN STRICT COMPLIANCE WITH THE RESTRICTIONS ON ASSIGNMENTS, AND SUBJECT TO THE LIMITATIONS, SET FORTH IN SECTION 10.8 OF THE CREDIT AGREEMENT. PARTICIPATIONS IN ANY LOAN NOTE MAY ONLY BE CONVEYED IN STRICT COMPLIANCE WITH, AND SUBJECT TO THE LIMITATIONS SET FORTH IN, SECTION 10.8 OF THE CREDIT AGREEMENT. ANY PURPORTED TRANSFER OF ANY LOAN NOTE OR ANY BENEFICIAL INTERESTS THEREIN THAT IS IN BREACH, AT THE TIME MADE, OF ANY TRANSFER RESTRICTIONS SET FORTH IN THE CREDIT AGREEMENT IS VOID AB INITIO.
ASSIGNMENT AND ASSUMPTION dated [______________], between [______________________] (the “Assignor”) and [______________________] (the “Assignee”).
PRELIMINARY STATEMENTS
Reference is made to the Amended and Restated Credit Agreement, dated as of July 11, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Home Point Financial Corporation, as the borrower (the “Borrower”), Home
Point Capital Inc. (the “Guarantor”), the Lenders a party thereto from time to time and Goldman Sachs Bank USA, as the administrative agent (in such capacity, the “Administrative Agent”). Terms defined in the Credit Agreement and not otherwise defined herein are used herein with the meanings ascribed thereto in the Credit Agreement.
WHEREAS, the Assignor is a Lender under the Credit Agreement and desires to sell and assign to the Assignee, and the Assignee desires to purchase and assume from the Assignor, on the terms and conditions set forth below, a [____] percent [(_____ %)] interest in such Lender’s aggregate portion of the Aggregate Commitment (including any Advances thereunder) and rights and obligations under the Credit Agreement and the other Transaction Documents (the “Assigned Percentage”).
NOW, THEREFORE, the Assignor and the Assignee hereby agree as follows:
In consideration of the Assignee’s payment to the Assignor of [$ ______________], the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, as of the “Effective Date” (as defined below), the Assigned Percentage, together (a) with all of the Assignor’s rights and obligations under the Credit Agreement and the other Transaction Documents with respect to such Assigned Percentage and (b) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as the Lender) against any Person, whether known or unknown arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuant to clauses (a) and (b) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Transaction Document (other than those made in clause (a) above), (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any collateral thereunder, (iii) the financial condition of the Borrower, the Guarantor, any of their Affiliates or any other Person obligated in respect of any Transaction Document or (iv) the performance or observance by the Borrower, the Guarantor, or any of their Affiliates or any other Person of any of their respective obligations under any Transaction Document.
The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) from and after the Effective Date (as defined below), it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iii) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1(b) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Assignor, (iv) if it is an entity that is not created or organized under the laws of the United States or a political subdivision thereof, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly contemplated and executed by the Assignee and (v) it is an “Eligible Assignee” (as defined in the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement, as applicable); and (b) agrees that (i) it will, independently and without reliance on the Assignor, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Transaction Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Transaction Documents are required to be performed by it as a Lender.
This Assignment and Assumption shall become effective as of [______________] (the“Effective Date”), following the execution of this Assignment and Assumption.
From and after the Effective Date, the Administrative Agent or the Assignee, as applicable, shall make all payments under the Credit Agreement in respect of the Assigned Interest (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves.
This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.
THIS ASSIGNMENT AND ASSUMPTION SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned has caused this Assignment and Assumption to be executed on its behalf by its officer thereunto duly authorized, as of [________________].
[NAME OF ASSIGNOR], as Assignor | ||
By: | ||
Name: | ||
Title: |
[NAME OF ASSIGNEE], as Assignee | ||
By: | ||
Name: | ||
Title: |
Notice Address for Assignee:
EXHIBIT E
Commitments
Lenders | Commitment | |
Goldman Sachs Bank USA |
[***] |
EXHIBIT F
Form of Monthly Report
EXHIBIT G
Reserved
EXHIBIT H
FORM OF NOTICE OF PREPAYMENT
[Date]
Goldman Sachs Bank USA, as Administrative Agent
200 West Street
New York, New York 10282
Attention: [___]
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement, dated as of July 11, 2019, (the “Credit Agreement”), among Home Point Financial Corporation, as borrower (the “Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as administrative agent (the “Administrative Agent”) and the Lender from time to time party thereto. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Credit Agreement. The Borrower hereby gives you irrevocable notice, pursuant to Section 2.10 the Credit Agreement, that it proposes to prepay the Advances outstanding thereunder. The Borrower sets forth below the information related to such prepayment:
(i) The aggregate amount of the prepayment requested is $ ______________, relating to the Aggregate Commitments.
(ii) The Redemption Date of the prepayment requested is ______________, 20 ___.
(iii) Attached is a Schedule of Assets identifying the Assets that the Borrower proposes to release under the Credit Agreement in connection with such prepayment.
In accordance with Section 2.10 of the Credit Agreement, the undersigned, a duly appointed officer of the Borrower, hereby certifies that, after giving effect to the prepayment requested hereunder:
no selection procedures are used with respect to identification of Assets to be released or retained that are materially adverse to the Lenders;
no Borrowing Base Deficiency, Funding Base Deficiency, Potential Event of Default or Event of Default shall exist either prior to, or after giving effect to the prepayment of the applicable portion of the Advances outstanding and the release of the related Collateral (unless, in the case of a Borrowing Base Deficiency or Funding Base Deficiency, the amount of such deficiency is eliminated as a result of such prepayment and release); and
the representations and warranties set forth in Article IV are true and correct as of such Redemption Date (except to the extent such representations and warranties relate
solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date) after giving effect to such prepayment and release.
Very truly yours, | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Title: |
Schedule I
1. | Borrower’s Account |
[***] | |
[***] | |
[***] | |
[***] | |
[***] | |
[***] | |
[***] |
2. | Administrative Agent’s Account |
[***] | |
[***] | |
[***] | |
[***] | |
[***] | |
[***] | |
[***] |
Schedule II
[Reserved]
Schedule III
Valuation Agents
[***] | ||
[***] | ||
[***] | ||
[***] |
Schedule IV
Dealers
[***] |
Schedule V
Minimum Haircut Trigger Event Schedule
[***]
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
2 The figures included in this Schedule V (other than [***] ) are illustrative, and do not necessarily reflect actual values.
Schedule 4.1(c)
Ownership Structure of the Borrower, the Guarantor, and their Subsidiaries
Issuer |
Record Owner |
Certificate No. |
No. Shares Issued and Outstanding |
Percent Owned |
||
Home Point Financial Corporation |
Home Point Capital Inc. |
[***] |
[***] |
100% |
||
HPC Insurance Agency LLC |
Home Point Capital Inc. |
[***] |
[***] |
100% |
||
HPC Title LLC |
Home Point Capital Inc. |
[***] | [***] |
100% |
||
NM Holdings LLC (f/k/a NattyMac, LLC) | Home Point Financial Corporation | [***] |
[***] |
100% |
||
Schedule 4.1(q)
Indebtedness of the Borrower and the Guarantor
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
Schedule 5.2(a)
Liens
1. | Uniform Commercial Code financing statements 50898732, 51023843, 52434802, 51022693, 52924242, 50875214, 51024680, 50887444 and 50743582 in each case filed against Home Point Financial Corporation, as debtor, in favor of U.S. Bank Equipment Finance as secured party. |
2. | Uniform Commercial Code financing statements 52893681 and 52893643 in each case filed against Home Point Financial Corporation, as debtor, in favor of Cisco Systems Capital as secured party. |
3. | Uniform Commercial Code financing statements 52277740, 52277733, 52621512 and 52277740 in each case filed against Home Point Financial Corporation, as debtor, in favor of Merchants Bank of Indiana as secured party. |
4. | Uniform Commercial Code financing statement 52815124 filed against Home Point Financial Corporation, as debtor, in favor of Deutsche Bank AG Cayman Islands Branch as secured party. |
5. | Uniform Commercial Code financing statement 51387334 filed against Home Point Financial Corporation, as debtor, in favor of UBS Bank USA as secured party. |
6. | Uniform Commercial Code financing statement 51862701 filed against Home Point Financial Corporation, as debtor, in favor of UBS AG as secured party. |
7. | Uniform Commercial Code financing statement 52434134 filed against Home Point Financial Corporation, as debtor, in favor of TIAA, FSB as secured party. |
8. | Uniform Commercial Code financing statement 52449970 filed against Home Point Financial Corporation, as debtor, in favor of Texas Capital Bank, National Association as secured party. |
9. | Uniform Commercial Code financing statement 51488901 filed against Home Point Financial Corporation, as debtor, in favor of Wells Fargo Bank, N.A. C/O Wells Fargo Securities, LLC Mortgage Banker Finance Group as secured party. |
Schedule 10.3
Notice Addresses
(a) If to the Borrower or Guarantor:
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: Chief Legal Officer
Email: [***]
(b) If to the Administrative Agent and/or the Initial Lender:
Goldman Sachs Bank USA
200 West Street
New York, New York 10282
E-mail: [***]
with a copy to: [***]
and for calculations of interest, principal and delivery of Monthly Reports, with a copy to: [***]
10.3-1
Exhibit 10.10.1
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.
FIRST AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), is entered into as of November 27, 2019, by and among HOME POINT FINANCIAL CORPORATION, a New Jersey corporation, as borrower (the “Borrower”), HOME POINT CAPITAL INC., a Delaware corporation, as guarantor (the “Guarantor”), the financial institutions that are parties hereto as lenders (each such financial institution, a “Lender” and collectively, the “Lenders”) and GOLDMAN SACHS BANK USA (“GS Bank”), as administrative agent (the “Administrative Agent”).
WHEREAS, the Borrower and the Guarantor have entered into that certain Amended and Restated Credit Agreement, dated as of July 11, 2019, by and among the Borrower, the Guarantor, the Administrative Agent and Goldman Sachs Bank USA, as the initial Lender (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders agree to amend the Credit Agreement to make certain changes as provided herein (the Credit Agreement, as amended by this Amendment, being referred to herein as the “Amended Credit Agreement”); and
WHEREAS, subject to the terms and conditions set forth in this Amendment, the Agent and the Lenders are willing to amend the Credit Agreement pursuant to Section 10.2(a)(i) and (iii) of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
1. Definitions and Construction. Unless otherwise defined or provided herein, capitalized terms used herein have the respective meanings attributed thereto in, or by reference in, the Credit Agreement. The rules of construction in Article I of the Credit Agreement shall apply mutatis mutandis to this Amendment.
2. Amendment to the Credit Agreement. Upon satisfaction of the conditions set forth in Section 3 hereof, the parties hereto hereby agree that the Credit Agreement is hereby amended by incorporating the changes shown on the marked copy of the Credit Agreement attached hereto as Exhibit A (it being understood that language which appears “struck out” has been deleted and language which appears as “double-underlined” has been added).
3. Conditions to Effectiveness. This Amendment shall be effective as of the date first above written upon the Administrative Agent’s receipt of the following:
(a) counterparts of this Amendment executed by the Borrower, the Guarantor and the Lender;
(b) a duly executed Amended and Restated Loan Note substantially in the form of Exhibit C to the Credit Agreement for each Lender that has requested same;
(c) a certificate of the corporate secretary of the Borrower and of the Guarantor, in form and substance acceptable to Administrative Agent, attaching resolutions approving this Amendment (either specifically or by general resolution), and all documents evidencing other necessary corporate action or governmental approvals as may be required in connection with this Amendment (including the written consent of Freddie Mac);
(d) Confirmation that the Administrative Agent and each Lender shall have received payment in full of all fees and expenses, including the Upsize Fee (as defined in the Administrative Agent Fee Letter (as amended and restated as of the date hereof) and reasonable accrued fees and expenses of counsel to the Administrative Agent, which are due and payable under the Transaction Documents on or before the date hereof; and
(e) usual and customary legal opinions, in form and substance satisfactory to Administrative Agent and its counsel, regarding corporate matters, enforceability and no conflicts or consents.
4. Certain Representations and Warranties. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower and the Guarantor each hereby represent and warrant to the Administrative Agent and each Lender as of the date hereof, as follows:
(a) | Authorization. It has the power and authority to execute and deliver this Amendment and perform its obligations under the Amended Credit Agreement. It has taken all necessary action to authorize its execution and delivery of this Amendment and performance of the Amended Credit Agreement. |
(b) | Consents. No consent, approval or authorization of, or declaration or filing with, any governmental authority, and no consent of any other Person, is required in connection with its execution and delivery of this Amendment and performance of the Amended Credit Agreement except for those already obtained. |
(c) | Execution, No Conflict. This Amendment has been duly executed and delivered by it and the Amended Credit Agreement constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally (regardless of whether such enforceability is considered in a proceeding in equity or at law). Its execution and delivery of the Amendment or performance of the Amended Credit Agreement does not conflict with, or constitute a violation or breach of, or constitute a default under, the terms of (i) any material contract, mortgage, lease, agreement or instrument to which it is a party or which is binding upon it, (ii) any law or regulation or order or decree of any court applicable to it in any material respect or (iii) the organizational documents of it. |
(d) | No Defaults. As of the date hereof and after giving effect to this Amendment, no Potential Event of Default or Event of Default has occurred and is continuing. |
(e) | Representations and Warranties. The representations and warranties made by the Borrower and the Guarantor in the Credit Agreement and each of the other Transaction Documents to which either is a party are true and correct as of the date hereof (except to the extent such representations and warranties relate solely to an earlier date and then as of such earlier date). |
5. Reference to, and Effect on, the Credit Agreement and the Transaction Documents.
(a) This Amendment constitutes a Transaction Document for all purposes of, or in connection with, the Credit Agreement and the other Transaction Documents.
(b) Except as expressly set forth herein, all of the terms, conditions and covenants of the Credit Agreement and the other Transaction Documents are hereby ratified and confirmed in all respects by each of the parties hereto and shall remain in full force and effect in accordance with its terms.
(c) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “this Credit Agreement”, “hereunder”, “hereof” or words of like import referring to the Agreement, and each reference in each of the other Transaction Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Amended Credit Agreement.
(d) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of or amendment to, any right, power or remedy of the Administrative Agent under, nor constitute a waiver of or amendment to, any other provision of, the Amended Credit Agreement or any other Transaction Document.
(e) The relationship of Administrative Agent and the Lender, on the one hand, and the Borrower, on the other hand, has been and shall continue to be, at all times, that of creditor and debtor and not as joint venturers or partners. Nothing contained in this Amendment, any instrument, document or agreement delivered in connection herewith or in the Credit Agreement or any of the other Transaction Documents shall be deemed or construed to create a fiduciary relationship between or among the parties.
6. No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement or any other Transaction Document or an accord and satisfaction in regard thereto and the Borrower reaffirms that the existing security interest created by the Credit Agreement and each other Transaction Document is and remains in full force and effect.
7. Amendment of Agency Fee Letter and Administrative Agent Fee Letter. The Lenders hereby consent to the amendment and restatement of the Agency Fee Letter and the Administrative Agent Fee Letter as of the date hereof pursuant to Section 10.2(a)(ii) of the Credit Agreement.
8. Miscellaneous. The provisions of Section 10.9 (Governing Law), Section 10.10 (Jurisdiction) and Section 10.11 (Waiver of Jury Trial) of the Credit Agreement are incorporated into this Amendment as if fully set forth herein, mutatis mutandis.
9. Entire Agreement. This Amendment constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all other understandings, oral or written, with respect to the subject matter hereof.
10. Severability. In case any provision in or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
11. Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Amendment.
12. General. This Amendment shall be binding on and shall inure to the benefit of the Borrower, the Guarantor, the Administrative Agent, the Lenders and their respective successors and permitted assigns under the Transaction Documents.
13. Execution. This Amendment may be executed in any number of counterparts and by each party hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.
(Signature pages follow)
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Amended and Restarted Credit Agreement be executed by their respective officers thereunto duly authorized, as of the date first above written.
HOME POINT FINANCIAL CORPORATION, | ||
as Borrower | ||
By: | /s/ William A. Newman | |
Name: William A. Newman | ||
Title: President and Chief Executive Officer | ||
HOME POINT CAPITAL INC., Guarantor | ||
By: | /s/ William A. Newman | |
Name: William A. Newman | ||
Title: President and Chief Executive Officer |
[Home Point - First Amendment to Amended and Restated Credit Agreement]
GOLDMAN SACHS BANK USA, as
Administrative Agent |
||
By: | /s/ Thomas M. Manning | |
Name: Thomas M. Manning | ||
Title: Authorized Signatory | ||
GOLDMAN SACHS BANK USA, as Lender | ||
By: | /s/ Thomas M. Manning | |
Name: Thomas M. Manning | ||
Title: Authorized Signatory |
EXHIBIT A
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
[See Attached]
EXECUTION VERSION
As amended by the First Amendment dated as of November 27, 2019
AMENDED AND RESTATED CREDIT AGREEMENT
among
HOME POINT FINANCIAL CORPORATION
as Borrower,
HOME POINT CAPITAL INC.
as Guarantor,
GOLDMAN SACHS BANK USA,
as Administrative Agent for the financial institutions
that may from time to time become parties hereto as Lenders,
and
LENDERS
from time to time party hereto
dated as of July 11, 2019
TABLE OF CONTENTS
Page | ||||
ARTICLE I | ||||
CERTAIN DEFINITIONS 1 | ||||
Section 1.1 | Certain Defined Terms |
|
||
Section 1.2 | Computation of Time Periods |
|
||
Section 1.3 | Construction |
|
||
Section 1.4 | Accounting Terms |
|
||
ARTICLE II | ||||
AMOUNTS AND TERMS OF THE ADVANCES 44 | ||||
Section 2.1 | Establishment of the Credit Facility |
|
||
Section 2.2 | The Advances |
|
||
Section 2.3 | Use of Proceeds |
|
||
Section 2.4 | Making the Advances |
|
||
Section 2.5 |
|
|
||
Section 2.6 | Borrowing Base |
|
||
Section 2.7 | Repayment of the Advances |
|
||
Section 2.8 | Application of Prepayment of Advances | 49 | ||
Section 2.9 | Mandatory Prepayments of Advances |
|
||
Section 2.10 | Optional Prepayments; Removal of Collateral |
|
||
Section 2.11 | Breakage Costs; Increased Costs; Capital Adequacy; Additional Indemnifications; LIBOR Unavailability; Illegality |
|
||
Section 2.12 | Payments and Computations |
|
||
Section 2.13 | Payment on Non-Business Days |
|
||
Section 2.14 | Extension of Availability Period |
|
||
Section 2.15 | Taxes |
|
||
Section 2.16 | Defaulting Lenders |
|
||
Section 2.17 | Security Interest |
|
||
Section 2.18 | Limited Pledge of Fannie Mae Servicing |
|
||
Section 2.19 | Limited Pledge of Freddie Mac Servicing |
|
||
Section 2.20 | Limited Pledge of Ginnie Mae Servicing |
|
||
Section 2.21 | Commitment Increase |
|
||
Section 2.22 | Base Servicing Fee Increases |
|
||
ARTICLE III | ||||
CONDITIONS OF LENDING AND CLOSING 64 | ||||
Section 3.1 | Conditions Precedent to Closing |
|
||
Section 3.2 | Conditions Precedent to All Advances |
|
ARTICLE IV | ||||
REPRESENTATIONS AND WARRANTIES 67 | ||||
Section 4.1 | Representations and Warranties of the Borrower and the Guarantor |
|
||
ARTICLE V | ||||
COVENANTS 74 | ||||
Section 5.1 | Affirmative Covenants |
|
||
Section 5.2 | Negative Covenants |
|
||
ARTICLE VI | ||||
EVENTS OF DEFAULT 84 | ||||
Section 6.1 | Events of Default |
|
||
Section 6.2 | Remedies |
|
||
Section 6.3 | Equity Cure | 89 | ||
ARTICLE VII | ||||
THE ADMINISTRATIVE AGENT 89 | ||||
Section 7.1 | Appointment; Nature of Relationship |
|
||
Section 7.2 | Powers |
|
||
Section 7.3 | General Immunity |
|
||
Section 7.4 | No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. |
|
||
Section 7.5 | Action on Instruction of Lenders |
|
||
Section 7.6 | Employment of Agents and Counsel |
|
||
Section 7.7 | Reliance on Documents; Counsel |
|
||
Section 7.8 | The Administrative Agent’s Reimbursement and Indemnification |
|
||
Section 7.9 | Rights as a Lender |
|
||
Section 7.10 | Lender Credit Decision |
|
||
Section 7.11 | Successor Agent |
|
||
Section 7.12 | Transaction Documents |
|
||
ARTICLE VIII | ||||
COLLECTION ACCOUNT 93 | ||||
Section 8.1 |
Collection Account |
93 | ||
ARTICLE IX | ||||
GUARANTY 94 | ||||
Section 9.1 | Guaranty |
|
||
Section 9.2 | Subrogation |
|
||
Section 9.3 | Amendments, etc. with Respect to the Guaranteed Obligations |
|
Section 9.4 | Guaranty Absolute and Unconditional |
|
||
Section 9.5 | Reinstatement |
|
||
Section 9.6 | Payments |
|
||
Section 9.7 | Events of Default |
|
||
ARTICLE X | ||||
MISCELLANEOUS 97 | ||||
Section 10.1 | Survival |
|
||
Section 10.2 | Amendments, Etc. |
|
||
Section 10.3 | Notices, Etc. |
|
||
Section 10.4 | No Waiver; Remedies |
|
||
Section 10.5 | Indemnification |
|
||
Section 10.6 | Costs, Expenses and Taxes |
|
||
Section 10.7 | Right of Set-off; Ratable Payments; Relations Among Lenders |
|
||
Section 10.8 | Binding Effect; Assignment |
|
||
Section 10.9 | Governing Law |
|
||
Section 10.10 | Jurisdiction |
|
||
Section 10.11 | Waiver of Jury Trial |
|
||
Section 10.12 | Section Headings |
|
||
Section 10.13 | Tax Characterization |
|
||
Section 10.14 | Execution |
|
||
Section 10.15 | Limitations on Liability |
|
||
Section 10.16 | Confidentiality | 104 | ||
Section 10.17 | Merger |
|
||
Section 10.18 | Lien Release |
|
||
Section 10.19 | Customer Identification - USA Patriot Act Notice |
|
||
Section 10.20 | Administrative Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations |
|
||
Section 10.21 | No Novation | 106 |
SCHEDULES
Schedule I | Borrower’s Account, Collection Account and Administrative Agent’s Account |
Schedule II | [Reserved] |
Schedule III | Valuation Agents |
Schedule IV | Dealers |
Schedule V | Minimum Haircut Trigger Event |
Schedule 4.1(c) | Ownership Structure of the Borrower and its Subsidiaries |
Schedule 4.1(q) | Indebtedness of the Borrower and the Guarantor |
Schedule 5.2(a) | Liens |
Schedule 10.3 | Notice Addresses |
EXHIBITS
EXHIBIT A | -- | Form of Compliance Certificate |
EXHIBIT B | -- | Form of Notice of Borrowing |
EXHIBIT C | -- | Form of Loan Note |
EXHIBIT D | -- | Form Assignment and Assumption |
EXHIBIT E | -- | Commitments |
EXHIBIT F | -- | Form of Monthly Report |
EXHIBIT G | -- | Reserved |
EXHIBIT H | -- | Form of Notice of Prepayment |
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of July 11, 2019, by and among Home Point Financial Corporation a New Jersey corporation, as borrower (the “Borrower”), Home Point Capital Inc., a Delaware corporation (the “Guarantor”), the financial institutions that may from time to time become parties hereto (each such financial institution, a “Lender” and collectively, the “Lenders”) and GOLDMAN SACHS BANK USA (“GS Bank”), as administrative agent (the “Administrative Agent”).
RECITALS
WHEREAS, the Borrower, each of the Lenders under the Original Credit Agreement (as defined below) (together, the “Original Lenders”) and GS Bank, as Administrative Agent, are parties to that certain Credit Agreement, dated as of January 31, 2019 (the “Original Credit Agreement”);
WHEREAS, the Original Lenders are the Majority Lenders under the Original Credit Agreement;
WHEREAS, pursuant to Section 10.2(a)(i) and (iii) of the Original Credit Agreement, the Borrower, the Original Lenders and the Administrative Agent desire to amend and restate the Original Credit Agreement as set forth in this Agreement;
WHEREAS, the Borrower owns and in the future will hold, certain MSRs (as defined herein) for the Agencies;
WHEREAS, the Borrower has requested that the Lenders provide financing for the MSRs held by the Borrower;
WHEREAS, the Guarantor has agreed to guarantee the obligations of the Borrower hereunder; and
WHEREAS, the Lenders are willing to provide financing upon the terms and subject to the conditions set forth herein, including the Guaranty of the Guaranteed Obligations by the Guarantor.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE IARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Defined Terms. Capitalized terms used but not otherwise defined herein have the meanings set forth below:
“1940 Act” shall mean the Investment Company Act of 1940, as amended.
“5 Year Swap Rate” shall mean, as of any date of determination, the average of the mid-market par swap rates for interest rate swaps with a maturity of five years offered by the Dealers.
“Accepted Servicing Practices” shall mean (i) with respect to any Mortgage Loan, the customary and usual standards of mortgage servicing practices of prudent mortgage lending institutions servicing mortgage loans for itself or for other third-party portfolios of mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located; and (ii) with respect to all MSRs related to the Servicing Contract of any Agency, those practices required by such Agency (including the Fannie Mae Agency Guide, the Freddie Mac Agency Guide, and the Ginnie Mae Agency Guide as applicable); provided, however, that in all cases the accepted servicing practices must (i) comply with the terms of Applicable Laws and the related loan documents and (ii) meet a standard of care not less than customary, reasonable and usual standards of practice for institutions that service loans that are similar to the Mortgage Loans.
“Account Bank” shall mean [***] financial institution, reasonably acceptable to the Administrative Agent, identified in writing to the Administrative Agent where the Collection Account is housed.
“Account Control Agreement” shall mean a Deposit Account Agreement, dated as of the Closing Date, by and among the Borrower, the Account Bank and the Administrative Agent, pursuant to which the Administrative Agent shall be granted “control” (as defined in Section 9-104 of the UCC) of the Collection Account.
“Acknowledgment Agreement” shall mean each of the Fannie Mae Acknowledgment Agreement, the Freddie Mac Acknowledgment Agreement, and the Ginnie Mae Acknowledgment Agreement, as applicable.
“Acknowledgment Agreement Holiday Period” shall mean, with respect to any Agency, the period of time beginning on the Closing Date and ending on the earlier of (i) the related Acknowledgment Agreement Trigger Date, and (ii) such time that the applicable Acknowledgment Agreement is finalized by the parties thereto.
“Acknowledgment Agreement Trigger Date” shall mean, as applicable, the Freddie AA Trigger Date and the Ginnie AA Trigger Date.
“Acknowledgment Agreement Trigger Period” shall mean, as applicable, the Freddie AA Trigger Period, and the Ginnie Mae Trigger Period.
“Activation Notice” shall have the meaning set forth in the Account Control Agreement.
“Additional Collateral” shall mean all right, title and interest in, to and under all personal property of the Borrower, including but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located: (a) Accounts, (b) Contracts; (c) Chattel Paper, (d) Documents, (e) General Intangibles, (f) Goods (including all of its Equipment, Fixtures and Inventory), together with all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor, (g) Instruments, (h) Insurance, (i) Intellectual Property, (j) Investment Related Property (including, without limitation, Deposit Accounts), (k) Letter of Credit Rights, (l) Money, (m) Receivables and Receivables Records, (n) Commercial Tort Claims, (o) any other investments and investment property, (p) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing; and (q) to the extent not otherwise included in the foregoing, all Proceeds, products, accessions, rents and profits of or in respect of any of (a) through (p); provided, however, that Additional Collateral shall not include Excluded Collateral or (for so long as such remains applicable) any of the foregoing to the extent that a security interest therein is prohibited by or in violation of any law, rule, or regulation, or the contractual terms or provisions related thereto.
Capitalized terms used in this definition shall have the meaning given thereto in Article 9 of the UCC.
“Additional Guarantor Collateral” shall mean all right, title and interest in, to and under all personal property of the Guarantor, including but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located: (a) Accounts, (b) Contracts, (c) Chattel Paper, (d) Documents, (e) General Intangibles, (f) Goods (including all of its Equipment, Fixtures and Inventory), together with all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor, (g) Instruments, (h) Insurance, (i) Intellectual Property, (j) Investment Related Property (including, without limitation, Deposit Accounts), (k) Letter of Credit Rights, (l) Money, (m) Receivables and Receivables Records, (n) Commercial Tort Claims, (o) any other investments and investment property (including its interests in Longbridge Financial, LLC and the Borrower), (p) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing, (q) to the extent not otherwise included in the foregoing, all other personal property of any kind and all Collateral Records, Collateral support and Supporting Obligations relating to any of the foregoing, and (r) to the extent not otherwise included in the foregoing, all Proceeds, products, accessions, rents and profits of or in respect of any of (a) through (q); provided, however, that Additional Guarantor Collateral shall not include Excluded Collateral or (for so long as such remains applicable) any of the foregoing to the extent that a security interest therein is prohibited by or in violation of any law, rule, or regulation, or the contractual terms or provisions related thereto.
Capitalized terms used in this definition shall have the meaning given thereto in Article 9 of the UCC.
“Additional Principal Amortization Amount” shall mean an amount due and payable on each Additional Principal Amortization Date equal to the quotient of (i) the Advances outstanding on the Availability Period End Date divided by (ii) 12.
“Additional Principal Amortization Date” shall mean the Monthly Payment Date occurring in the calendar month in which the Availability Period End Date occurs, and each Monthly Payment Date thereafter through the Maturity Date, as applicable.
“Adjusted LIBOR Rate” shall mean a rate per annum equal to the rate (rounded upwards, if necessary, to the next higher 1/100 of 1%) obtained by dividing (a) LIBOR by (b) a percentage equal to [***] minus the reserve percentage (rounded upward to the next 1/100th of 1%) in effect on such day and applicable to any Lender for which this rate is calculated under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”). The Adjusted LIBOR Rate shall be adjusted automatically as of the effective date of any change in such reserve percentage.
“Adjusted Tangible Net Worth” shall mean, with respect to the Borrower, the Guarantor and their respective Subsidiaries, an amount equal to, on a consolidated basis, the stockholder or members’ equity, including capital stock or member interests, additional paid-in capital, retained earnings, deferred income, capitalized mortgage loan servicing rights and capitalized excess mortgage loan servicing fees, but excluding treasury stock, if any, and any intangible assets of the Borrower, the Guarantor and their respective Subsidiaries (determined on a consolidated basis in accordance with GAAP).
“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.
“Administrative Agent Asset Value” shall mean, as of any date of determination, the sum of (i) the Administrative Agent Fannie Mae Asset Value, (ii) the Administrative Agent Freddie Mac Asset Value, and (iii) the Administrative Agent Ginnie Mae Asset Value; provided, however, that during the Ginnie AA Trigger Period the Administrative Agent Asset Value shall not exceed the product of (a) the sum of (1) the Administrative Agent Fannie Mae Market Value Percentage multiplied by the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, and (2) the Administrative Agent Freddie Mac Market Value Percentage multiplied by the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs, and (b) [***] and provided further, that the Administrative Agent Ginnie Mae Asset Value of Ginnie Mae MSRs shall be reduced to the extent necessary such that the Ginnie Mae Borrowing Base remains at or below the Ginnie Mae Concentration Limit.
“Administrative Agent Fannie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Fannie Mae Advance Rate, (ii) the Administrative Agent
Fannie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs.
“Administrative Agent Fannie Mae Market Value Percentage” shall mean, with respect to any Fannie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Fannie Mae MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Fannie Mae Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Fee Letter” shall mean that certain side letter, dated as of the Closing Date, by and between the Borrower, Guarantor, and the Administrative Agent, with respect to certain pricing terms of the facility established hereby.
“Administrative Agent Freddie Mac Asset Value” shall mean, as of any date of determination, the product of (i) the Freddie Mac Advance Rate, (ii) the Administrative Agent Freddie Mac Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs.
“Administrative Agent Freddie Mac Market Value Percentage” shall mean, with respect to any Freddie Mac MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Freddie Mac MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Freddie Mac Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Ginnie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Ginnie Mae Advance Rate, (ii) the Administrative Agent Ginnie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs.
“Administrative Agent Ginnie Mae Market Value Percentage” shall mean, with respect to any Ginnie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans to arrive at the fair market value of such Ginnie Mae MSR, as most recently determined by the Administrative Agent pursuant to Section 2.6 and in accordance with the Administrative Agent Methodology; provided that, in no event shall the Administrative Agent Ginnie Mae Market Value Percentage be greater than the market value thereof implying a zero option-adjusted spread.
“Administrative Agent Methodology” shall mean, with respect to any Administrative Agent Fannie Mae Market Value Percentage, Administrative Agent Freddie Mac Market Value Percentage, or Administrative Agent Ginnie Mae Market Value Percentage calculated by the Administrative Agent, the assumptions, factors, parameters, methodology and calculations employed by the Administrative Agent in determining such Administrative Agent
Fannie Mae Market Value Percentage, Administrative Agent Freddie Mac Market Value Percentage, or Administrative Agent Ginnie Mae Market Value Percentage for purposes of determining the Borrowing Base, which assumptions, factors, parameters, methodology and calculations shall be determined by the Administrative Agent in its sole discretion. Without limiting the foregoing, if as a result of a change by the Administrative Agent of its Administrative Agent Methodology, the aggregate of the Administrative Agent Fannie Mae Market Value Percentage, Administrative Agent Freddie Mac Market Value Percentage, and Administrative Agent Ginnie Mae Market Value Percentage changes by more than five percent (5%) over the course of one (1) Business Day, then upon request by the Borrower the Administrative Agent shall provide the Borrower with an explanation of the basis for such change; provided, however, that, except pursuant to a Borrowing Base Dispute under Section 2.6(b), neither such change in market value nor the Administrative Agent’s failure to provide information related thereto shall affect the validity of the Administrative Agent Methodology or Administrative Agent Asset Value.
“Administrative Agent’s Account” shall mean the Administrative Agent’s bank account, described on Schedule I attached hereto, designated by the Administrative Agent from time to time by written notice to the Borrower.
“Advance” shall mean any advance of funds by any Lender to the Borrower, made pursuant to Article II of this Agreement.
“Aggregate Advance Rate Cap” shall mean each of the Fannie Mae Advance Rate Cap, Freddie Mac Advance Rate Cap, and Ginnie Mae Advance Rate Cap. have the meaning set forth in the Agency Fee Letter.
“Advance Reimbursement Amount” shall mean all amounts reimbursable to the Borrower pursuant to the terms of a Servicing Contract in respect of Servicer Advances required to be made in accordance with and pursuant to the terms of such Servicing Contract.
“Affected Party” shall have the meaning set forth in Section 2.11(b).
“Affiliate” shall mean, 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 any Lender. 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 the Borrower, 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 the Borrower or Guarantor.
“Agency” shall mean Fannie Mae, Freddie Mac, and/or Ginnie Mae, as applicable.
“Agency Approvals” shall have the meaning set forth in Section 5.1(l).
“Agency Fee Letter” shall mean that certain side letter, dated as of the Closing Date, by and between the Borrower, Guarantor, and the Administrative Agent, with respect to certain pricing terms of the facility created hereby, the Fannie Mae MSRs, the Freddie Mac MSRs, and the Ginnie Mae MSRs.
“Agency Guide” shall mean the Fannie Mae Agency Guide, the Freddie Mac Agency Guide, and/or the Ginnie Mae Agency Guide, as applicable.
“Agency Requirements” shall mean, collectively, the Fannie Mae Requirements, the Freddie Mac Requirements, and the Ginnie Mae Requirements.
“Agency Servicing Rights” shall mean, with respect to each Mortgage Loan, all of the Borrower’s right, title and interest in, to and under the related Servicing Contracts, whether now or hereafter existing, acquired or created, whether or not yet accrued, earned, due or payable, as well as all other present and future right and interest under such Servicing Contracts.
“Aggregate Commitment” shall
mean at any time, the sum of the Commitments then in effect. The initial Aggregate Commitment as of the Closing Date shall be equal to [***][***]
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“Alternative Rate” shall have the meaning set forth in Section 2.11(f). mean, for any day, a rate per annum equal to the sum of (a) [***]
and (b) the rate calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public
website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided that if such rate is not published for any day that is a Business Day, the rate for
a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, that if at any time the Alternative Rate shall be less than [***] then
the Alternative Rate shall be deemed to be [***] at such time.
“Ancillary Income” shall mean all income derived from a Mortgage Loan, other than payments or collections in respect of principal, interest, escrow payments and prepayment penalties.
“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 Percentage” shall
mean with respect to the Commitment of, for any Lender at any time, a percentage equal to a fraction, (a) the numerator of which is such Lender’s Commitment at such time andplus, the amount of any Advances of such Lender in excess of such Lender’s Commitment then outstanding and (b) the denominator of which is the Aggregate Commitment at such time plus, the Uncommitted Advance Amount at such time (provided that if the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon
such Lender’s share of the aggregate Advances at such time). In the case of Section 2.16, when a Defaulting Lender shall exist, the Applicable Percentage shall be calculated without inclusion of such Defaulting Lender’s Commitment and Advances.
“Asset” shall mean all Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs of the Borrower, all of which are pledged to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) pursuant to the terms hereof. For the avoidance of doubt, the Assets shall be identified on the Schedule of Assets or the Schedule of Ineligible Assets and updated no less frequently than monthly and delivered to the Administrative Agent as a schedule to the Compliance Certificate in accordance with Section 5.1(bb).
“Asset Management Strategy” shall mean the off-balance sheet asset management strategy disclosed by the Borrower to the Administrative Agent prior to the Closing Date, which strategy may be updated, from time to time, upon Borrower disclosing such updated strategy to the Administrative Agent; provided, however, that if such proposed strategy is substantially inconsistent with the strategy disclosed prior to the Closing Date, then such proposed strategy shall not constitute the “Asset Management Strategy” for purposes of this Agreement without prior consent of the Administrative Agent (such consent not to be unreasonably withheld).
“Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.8), and accepted by the Administrative Agent, in substantially the form of Exhibit D hereto or any other form approved by the Administrative Agent.
“Availability Period” shall
mean, unless otherwise extended pursuant to and in accordance with Section 2.2,2.14, the period from
the Closing Date until the earlier to occur of (i) an Event of Default, and (ii) the Availability Period End Date.
“Availability Period End Date” shall mean the Monthly Payment Date occurring in the 36th month following the Closing Date, or January 31, 2022, as such date may be extended pursuant to Section 2.14.
“Base Servicing Fee” shall mean, with respect to the Portfolio of Mortgage Loans for each Agency and each Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans for such Agency included in such Portfolio as of the first day of such Collection Period multiplied by (B) one-twelfth of the Base Servicing
Fee Rate; provided, however, that (1) with respect to all Mortgage Loans in the Portfolio for such Agency, if the initial Collection Period is less than a full month, such fee for each such Mortgage Loan shall be an amount equal to the product of the fee otherwise described above multiplied by a fraction, the numerator of which is the number of days in such initial Collection Period and the denominator of which is 30; (2) if any Fannie Mae Mortgage Loan, Freddie Mac Mortgage Loan, or Ginnie Mae Mortgage Loan, as applicable, ceases to be part of such Portfolio during such Collection Period as a result of a termination of the Borrower’s duties as servicer under the applicable Servicing Contract, the portion of such amount that is attributable to such Fannie Mae Mortgage Loan, Freddie Mac Mortgage Loan, or Ginnie Mae Mortgage Loan, as applicable, shall be adjusted to an amount equal to the product of the fee otherwise described above multiplied by a fraction, the numerator of which is the number of days in such Collection Period during which such Mortgage Loan was included in such Portfolio and denominator of which is 30.
“Base Servicing Fee Rate” means (i) with respect to any Mortgage Loan serviced for Fannie Mae pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum, (ii) with respect to any Mortgage Loan serviced for Freddie Mac pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum, and (iii) with respect to any Mortgage Loan serviced for Ginnie Mae pursuant to the applicable Servicing Contract, unless otherwise adjusted pursuant to and in accordance with Section 2.22, [***] per annum.
“Bankruptcy Code” shall mean the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., as amended.
“Basel III” shall mean Basel III: A global regulatory framework for more resilient banks and banking systems prepared by the Basel Committee on Banking Supervision, and all national implementations thereof.
“Benchmark Replacement” shall mean the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR Rate for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.
“Benchmark Replacement Adjustment” shall mean, for any Interest Accrual Period, with respect to any replacement of LIBOR with an Unadjusted Benchmark Replacement for each applicable Interest Period, 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 the Administrative Agent and the Borrower 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 LIBOR with the applicable Unadjusted
Benchmark Replacement by the Relevant Governmental Body 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 LIBOR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Interest Accrual Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement).
“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to LIBOR:
(1) | in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; or |
(2) | in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein. |
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to LIBOR:
(1) | a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; |
(2) | a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely, provided that, at the time of such statement or |
publication, there is no successor administrator that will continue to provide LIBOR; or
(3) | a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative. |
“Benchmark Transition Start Date” shall mean (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Majority Lenders, as applicable, by notice to the Borrower, the Administrative Agent (in the case of such notice by the Majority Lenders) and the Lenders.
“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with the Section titled “Effect of Benchmark Transition Event” and (y) ending at the time that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to Section 2.11(g).
“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrower’s Account” shall mean (i) the Borrower’s bank account, described on Schedule I attached hereto, for the account of the Borrower or (ii) such other account as may be designated by the Borrower from time to time by at least ten (10) Business Days’ prior written notice to the Administrative Agent and the Lenders, so long as such other account is acceptable to the Administrative Agent in its sole and absolute discretion.
“Borrower Collateral” shall have the meaning set forth in Section 2.17.
“Borrowing Base” shall mean, as of any date of determination, with
respect to MSRs that are Eligible Assets, the sum ofclause (a) or (b) below, as applicable:
(a) if a Borrowing Base Dispute has not been initiated with respect to such date, or a Borrowing Base Dispute has been initiated but the Valuation Agent Asset Value has not yet been
determined pursuant to Section 2.6(b), the Administrative Agent Asset Value thereof; andor
(b) if a Borrowing Base Dispute has been initiated and the Valuation Agent Asset Value has been determined pursuant to Section 2.6(b), the lesser of (1) the Valuation Agent Asset Value (provided that the value attributed to that portion of the Valuation
Agent Asset Value pertaining to Ginnie Mae MSRs
shall be reduced such that the Ginnie Mae Borrowing Base remains at or below the Ginnie Mae Concentration Limit), and (2) the Borrowing Base Cap, in each case, in respect of such MSRs.
“Borrowing Base Cap” shall
mean the sum of (1)lesser of (a) the sum of (1) Borrowing Base Cap Fannie Amount, (2) the Borrowing Base Cap Freddie Amount, and
(3) the Borrowing Base Cap Ginnie Amount and (b) the Borrowing Base Advance Rate Cap Amount.
“Borrowing Base Cap Fannie Amount” shall mean the product of (A) the most recently determined Administrative Agent Fannie Mae Market
Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, and (C) the Fannie Mae Advance Rate Cap, (2).
“Borrowing Base Cap Freddie Amount” shall mean the product of (A) the most recently determined Administrative Agent Freddie Mac Market
Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs, and (C) the Freddie Mac Advance Rate Cap, and (3).
“Borrowing Base Cap Ginnie Amount” shall mean the product of (A) the most recently determined Administrative Agent Ginnie Mae Market Value Percentage, (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs, and (C) the Ginnie Mae Advance Rate Cap; provided however, that the Administrative Agent Ginnie Mae Asset Value of Ginnie Mae MSRs shall be reduced such that the Ginnie Mae Borrowing Base remains at or below the Ginnie Mae Concentration Limit.
“Borrowing Base Advance Rate Cap Amount” shall mean the product of (a) the sum of (1) the product of (A) the most recently determined Administrative Agent Fannie Mae Market Value Percentage, and (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, (2) the product of (A) the most recently determined Administrative Agent Freddie Mac Market Value Percentage, and (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs, and (3) the product of (A) the most recently determined Administrative Agent Ginnie Mae Market Value Percentage, and (B) the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs; provided however, that the Administrative Agent Ginnie Mae Asset Value of Ginnie Mae MSRs shall be reduced such that the Ginnie Mae Borrowing Base remains at or below the Ginnie Mae Concentration Limit and (b) the Aggregate Advance Rate Cap.
“Borrowing Base Certificate”
” shall mean the certificate in the form of Exhibit A attached to each Notice of Borrowing.
“Borrowing Base Deficiency” shall exist with respect to the Borrowing Base on any date on which (i) the aggregate amount of Advances exceeds the Aggregate Commitments related thereto plus the Uncommitted Advance Amount on such date, (ii) if no Borrowing Base Dispute has been initiated and is outstanding, the Effective Advance Rate with respect to the MSRs of any Agency exceeds the Fannie Mae Advance Rate, Freddie Mac Advance Rate, or Ginnie Mae Advance Rate, as applicable, by [***] or more, (iii) if a Borrowing Base Dispute has
been initiated but the Valuation Agent Asset Value has
not yet been determined pursuant to Section 2.6(b), the Effective Advance Rate with respect to the MSRs of any Agency exceeds that portion of the Borrowing Base Cap attributed to the MSRs of such Agencythe Fannie Mae Advance Rate Cap, the Freddie Mac Advance Rate Cap or the Ginnie Mae Advance Rate Cap, as applicable, (iv) if a Borrowing Base Dispute has been initiated, the
Valuation Agent Asset Value has been determined pursuant to Section 2.6(b), and the Borrowing Base is being calculated pursuant to clause (b)(1) of the definition thereof, (a) the Effective Advance Rate with respect to the MSRs of any Agency exceeds (a) the Fannie Mae Advance Rate, Freddie Mac Advance Rate, or the Ginnie Mae Advance Rate, as applicable, by [***] or more, or
(b) that portion of the Borrowing Base Cap attributed to the MSRs of such Agency, (v) if a Borrowing Base Dispute has been initiated, the Valuation Agent Asset Value has been determined pursuant to Section
2.6(b), and the Borrowing Base is being calculated pursuant to (b)(2) of the definition thereof,the portion of Advances relating to the MSRs of any Agency exceeds the Borrowing Base Cap Fannie Amount, the Borrowing Base Cap Freddie Amount or the Borrowing Base
Cap Ginnie Amount, as applicable, (v) the Effective Advance Rate with respect toof the MSRs of any Agencyall Agencies exceeds that portion of the Borrowing Base Cap attributed to
the MSRs of such Agency,the Aggregate Advance Rate Cap or (vi) there exists a Minimum Haircut Trigger Event.
“Borrowing Base Deficiency Notice” shall have the meaning set forth in Section 2.6.
“Borrowing Base Dispute” shall have the meaning set forth in Section 2.6(b).
“Borrowing Base Required Payment”
shall mean the greater of an amount necessary to (i) cause the aggregate amount of Advances outstanding to equal the lesser of (A) the Aggregate Commitment andplus the Uncommitted Advance Amount as of such date and (B) the Borrowing Base, or (ii) eliminate any
existing Minimum Haircut Trigger Event.
“Borrowing Date” shall mean, with respect to any Advance, the date of the making of such Advance, which date shall in any case be a Business Day.
“Breakage Costs” shall mean, with respect to a failure by the Borrower, for any reason, to borrow any proposed Advance on the date specified in the applicable Notice of Borrowing (including as a result of the Borrower’s failure to satisfy any conditions precedent to such borrowing) after providing such Notice of Borrowing, the resulting loss, cost, expense or liability (excluding loss of anticipated profits) incurred by reason of the liquidation or reemployment of deposits, actually sustained by any Lender or the Administrative Agent, and with respect to any Optional Prepayment, any loss, cost, expense, or liability sustained by any Lender or the Administrative Agent as a result of such Optional Prepayment, in each case as certified in any written demand for payment by a Lender or the Administrative Agent setting forth in reasonable detail the basis for calculating such compensation.
“Business Day” shall mean (i)
any day excluding Saturday, Sunday, any day which is a legal holiday under the laws of the State of New York, the State of Michigan or the State of Texas, any day on which banking institutions located in eitherany such state are
authorized or required by law or other governmental action to close, and any day on which the New York Stock Exchange or the Federal Reserve Bank of New York is authorized or obligated by law or executive order to be closed, and (ii) with respect to all notices, determinations, fundings and payments in connection with Advances bearing interest at the Adjusted LIBOR Rate so long as LIBOR is in effect, the term “Business Day” shall mean any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.
“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting) of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) or any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, but in no event will Capital Stock include any debt securities convertible or exchangeable into equity unless and until actually converted or exchanged.
“Capitalized Lease Obligation” shall mean, for any Person, the amount of Indebtedness 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.
“Cash” shall mean money, currency or a credit balance on hand or in any demand or deposit account.
“Cash Equivalents” shall mean, as at 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 one year 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 any Lender 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 in Law” shall mean (i) the adoption or taking effect of any Law after the date of this Agreement, (ii) any change in Law or in the administration, interpretation, application or implementation thereof by any Governmental Authority after the date of this Agreement, (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement or (iv) compliance by any Affected Party, by any lending office of such Affected Party or by such Affected Party’s holding company, if any, 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; provided that notwithstanding anything herein to the contrary, (a) the Dodd-Frank Act, (b) Basel III and (c) all requests, rules, guidelines and directives under either of the Dodd-Frank Act or Basel III or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date implemented, enacted, adopted or issued.
“Change of Control” shall occur at any time the Permitted Holders fail to collectively own, directly or indirectly, at least (i) 50.01% of the Equity Interests of the Borrower and of the Guarantor, and (ii) a majority of the aggregate ordinary voting power for the election of directors (or persons performing similar functions) of the Borrower and of the Guarantor.
“Closing Date” shall mean January 31, 2019.
“Collateral” shall have the meaning set forth in Section 2.17.
“Collection Account” shall
mean a deposit account established by the Borrower with the Account Bank, or such other replacement collection account as may be established at a financial institution reasonably acceptable to the Administrative Agent.
“Collection Period” shall mean, with respect to a Monthly Payment Date occurring during an Acknowledgment Agreement Trigger Period or following the occurrence and during the continuance of an Event of Default, the calendar month preceding the month in which such Monthly Payment Date occurs.
“Collections” shall mean, with respect to any Asset with respect to a Collection Period, any servicing fees or subservicing fees (other than retained yield, Ancillary Income and, after the occurrence of an Event of Default, the applicable Base Servicing Fee) that the Borrower as servicer is entitled to receive free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, pursuant to the Servicing Contracts during such Collection Period.
“Commitment” shall mean the
obligation of a Lender to fund Advances hereunderpursuant to Section 2.2(a), as set forth on Exhibit E
attached hereto, as increased pursuant to Section 2.21, and as amended in connection with assignments made by Lenders pursuant to Section 10.8. If, from time to time, any Lender other than Goldman Sachs Bank USA becomes a party to this Agreement as a
Lender, then the Administrative Agent shall deliver to the Borrower an amended Exhibit E setting forth the revised Commitments of the Lenders.
“Commitment Percentage” shall mean, a percentage equal to a fraction, the numerator of which is such Lender’s Commitment at such time and the denominator of which is the Aggregate Commitment at such time. In the case of Section 2.16, when a Defaulting Lender shall exist, the Commitment Percentage shall be calculated without inclusion of such Defaulting Lender’s Commitment.
“Compliance Certificate” shall mean a Compliance Certificate substantially in the form of Exhibit A attached hereto, which provides detailed calculations of, among other things compliance by the Borrower and the Guarantor with the Financial Covenants.
“Confidential Information” shall have the meaning set forth in Section 10.16.
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
“Corporate Debt” shall mean, as of any date of determination, the aggregate stated balance sheet amount of all Indebtedness of the Guarantor, the Borrower and its Subsidiaries (or, if higher, the par value of stated face amount of all such Indebtedness) determined on a consolidated basis in accordance with GAAP; provided that Indebtedness in connection with Permitted Warehouse Financings and Permitted Servicing Advance Facility Indebtedness shall not be included in “Corporate Debt”.
“Corporate Debt to Tangible Net Worth Ratio” shall mean the ratio as of the last day of each calendar month (commencing with the first full month ending after the Closing Date) of (a) Corporate Debt as of such date to (b) Adjusted Tangible Net Worth as of such date; provided, however, that for purposes of this calculation the proportion of any assets constituting the asset base for any Permitted Warehouse Financings or Permitted Servicing Advance Facility Indebtedness that is not financed by the applicable lender under such Permitted Warehouse Financing or Permitted Servicing Advance Facility shall not be included in “Adjusted Tangible Net Worth”.
“Cost of Funds” shall mean, with respect to any Interest Accrual Period, the amount of interest accrued with respect to the portion of the aggregate outstanding principal balance of all Advances funded by any Lender at the Cost of Funds Rate.
“Cost of Funds Rate” shall
mean the sum of (i) either the Adjusted LIBOR Rate or, if a LIBOR Unavailability Notice has been delivered and has not otherwise been rescinded in accordance with Section 2.11(f)(iii), the
Alternative Rate, and (ii)(A) with respect to Advances in respect of Fannie Mae MSRs, the Fannie Mae Margin Rate, (B) with respect to Advances in
respect of Freddie Mac MSRs, the Freddie Mac Margin Rate, and (C) with respect to Advances in respect of Ginnie Mae MSRs, the Ginnie Mae Margin Rate.
“Credit Enhancement Agreement” shall mean, collectively, any documents, instruments, guarantees or agreements entered into by the Borrower, any of its Subsidiaries, or any Securitization Entity for the purpose of providing credit support (that is reasonably customary as determined by the Borrower’s senior management) with respect to any Indebtedness or Securitization.
“Credit Manager” shall mean Weston Portfolio Group, LLC and any successor thereto in such capacity.
“Credit Manager Agreement” shall mean the Credit Manager Agreement, dated as of the Closing Date among Credit Manager, the Borrower and Administrative Agent.
“Credit Manager Fees” shall mean the fees due and owing to the Credit Manager as set forth in the Credit Manager Agreement or in any successor agreement thereto, which shall not in any event exceed [***] per annum.
“Dealer” shall mean any mid-market dealer in hedging, swap or similar derivatives contracts identified on Schedule IV hereto, as may be amended from time to time by the Administrative Agent, the Borrower and the Majority Lenders.
“Defaulting Lender” shall mean any Lender, as determined by the Administrative Agent, that has (a) failed to fund any portion of its Advances within three (3) Business Days of the date required to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three (3) Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Advances (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such confirmation in writing by the Administrative Agent and the Borrower), (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a good faith dispute or (e)(i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that
a Lender shall not be a Defaulting Lender solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority of the United States of America or instrumentality thereof so long as such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person. For the avoidance of doubt, without any implication to the contrary, no determination by a Lender not to fund an Advance in excess of such Lender’s Commitment (which may be made in the sole and absolute discretion of such Lender) may cause such Lender to constitute a Defaulting Lender.
“Derivatives Contract” shall mean 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. Notwithstanding anything herein to the contrary, neither Administrative Agent nor the Lenders shall have any rights in any Derivative Contract entered into between the Borrower and any Agency.
“Disposition” and “Disposed” mean, with respect to any Person, any sale or other whole or partial conveyance of all or any portion of such Person’s Property, or any direct or indirect interest therein to a third party, including the granting of any purchase options, rights of first refusal, rights of first offer or similar rights in respect of any portion of such assets or the subjecting of any portion of such assets to restrictions on transfer.
“Distributable Amounts” shall mean, with respect to each Monthly Payment Date, (i) all costs, expenses, reimbursements and indemnification amounts required to be paid to the Administrative Agent and the Lenders pursuant to the terms of the Transaction Documents; (ii) the Credit Manager Fees with respect to such Monthly Payment Date and all costs, expenses, reimbursements and indemnification amounts of the Credit Manager; (iii) the Interest Distribution Amount with respect to such Monthly Payment Date and the Non-Usage Fee, if any, with respect to such Monthly Payment Date; (iv) to the extent a Borrowing Base Deficiency exists as of such Monthly Payment Date, the Borrowing Base Required Payment; (v) with respect to each Monthly Payment Date occurring after the Availability Period End Date, any Additional Principal Amortization Amounts due and payable on such Monthly Payment Date; and (vi) all Breakage Cost and other amounts that are then due and payable pursuant to Section 2.11.
“Dodd-Frank Act” shall mean the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“Dollar”, “Dollars”, “U.S. Dollars” and the symbol “$” shall mean the lawful currency of the United States.
“Early Opt-in Election” shall mean the occurrence of:
(1) (i) a determination by the Administrative Agent or (ii) a notification by the Majority Lenders to the Administrative Agent (with a copy to the Borrower) that the Majority Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in Section 2.11(g) are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace LIBOR, and
(2) (i) the election by the Administrative Agent or (ii) the election by the Majority Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrower and the Lenders or by the Majority Lenders of written notice of such election to the Administrative Agent.
“Effective Advance Rate” shall mean, (a) with respect to the MSRs of any Agency, the quotient of (i) the outstanding Advances with respect to the MSRs of such Agency, divided by (ii) that portion of the Borrowing Base attributed to the value of Fannie Mae MSRs, Freddie Mac MSRs, or Ginnie Mae MSRs, as applicable and (b) with respect to the MSRs of all Agencies, (i) the outstanding Advances, divided by (ii) the Borrowing Base.
“Eligible Asset” shall mean any Asset that satisfies each of the following criteria, in each case, as of the related Borrowing Date:
(a) for which the Borrower is acting in the capacity of servicer under a Servicing Contract, which Servicing Contract (i) is in full force and effect, and (ii) with respect to which the Borrower is not in default in any material respect thereunder;
(b) which complies with all Applicable Laws in all material respects;
(c) which is genuine and constitutes a legal, valid, binding and irrevocable payment obligation, enforceable in accordance with the terms of the related Servicing Contract, under which it has arisen, subject to no offsets, counterclaims or defenses;
(d) which provides for payment in Dollars;
(e) which was not originated in or subject to the Laws of a jurisdiction whose Laws would make such Asset, the related Servicing Contract or the financing thereof contemplated hereby unlawful, invalid or unenforceable; and is not subject to any legal limitation on transfer;
(f) which is owned solely by the Borrower, subject to a Servicing Contract, and is free and clear of all Liens other than Permitted MSR Collateral Liens and has not been sold, conveyed, pledged or assigned to any other lender, purchaser or Person;
(g) which is not an obligation of the United States of America, any State or any agency or instrumentality or political subdivision thereof (other than an Agency);
(h) in respect of which the information set forth in the Schedule of Assets and the related Servicing Contract is true and correct in all material respects;
(i) in respect of which, each of the representations and warranties set forth on Section 4.1(aa) are true and correct in all material respects;
(j) such Asset constitutes a “general intangible” as defined in the UCC and is not evidenced by an “instrument” or “security” as defined in the UCC as so in effect;
(k) the Borrower has all required licenses and registrations necessary to own the Asset and to service the Mortgage Loan (including to collect amounts owing with respect thereto) in the jurisdiction where the Mortgaged Property is located;
(l) other than pursuant to this Agreement, there exist no Liens, pledges, assignments, or financings of any kind secured by the MSRs (or any portion thereof) of the applicable Agency to which the respective Asset relates; provided, however, that nothing in this clause (l) shall cause any MSR to cease to be an Eligible Asset solely because Advance Reimbursement Amounts related to such MSR have been pledged in connection with Permitted Servicing Advance Facility Indebtedness;
(m) with respect to Fannie Mae MSRs, the Fannie Mae Acknowledgment Agreement has been executed by the parties, and the pledge of such Asset is consented to thereunder;
(n) with respect to Freddie Mac MSRs, (i) either (x) the Initial Freddie Mac Acknowledgment Agreement has been executed by the parties and has not expired pursuant to its terms, or (y) the Freddie Mac Acknowledgment Agreement has been executed by the parties, and (ii) the pledge of such Asset is permitted pursuant to the terms of the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable); and
(o) with respect to Ginnie Mae MSRs, either the Ginnie Mae Acknowledgment Agreement has been executed by the parties, or the Ginnie AA Deadline has not yet occurred.
“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 (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; or (ii) 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, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to the Guarantor, the Borrower or any of their Subsidiaries or any Mortgaged Property.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA), which together with the Borrower is a “single employer” within the meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code or Sections 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” shall mean (i) that a Reportable Event has occurred with respect to any Single-Employer Plan; (ii) the institution of any steps by the Borrower, the 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; (iii) the institution of any steps by the Borrower, the Guarantor, or any ERISA Affiliate to withdraw from any Multi-Employer Plan or written notification of the Borrower or any ERISA Affiliate concerning the imposition of withdrawal liability; (iv) a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code in connection with any Single-Employer Plan or Multi-Employer Plan; (v) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (vi) with respect to a Single-Employer Plan, a failure to satisfy the minimum funding standard under Section 412 of the Internal Revenue Code or Section 302 of ERISA, whether or not waived; (vii) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Single-Employer Plan; (viii) 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 Internal Revenue Code or Section 303(i)(4) of ERISA); (ix) the insolvency of a Multi-Employer Plan, written notification that a Multi-Employer Plan is in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA), or any failure by the Borrower or any ERISA Affiliate to make any required payment or contribution to a Multi-Employer Plan; or (x) 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.
“Equity Interests” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and
membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“Escrow Account” shall mean any account established by the Borrower into which it deposits and retains therein all collections from mortgagors of the related mortgage loans for the payment of taxes, assessments, insurance premiums or comparable items for the account of such mortgagors.
“Event of Default” shall mean any of the Events of Default described in Section 6.1.
“Excluded Accounts” shall mean (i) all Related Principal and Interest Custodial Accounts (ii) Escrow Accounts and (iii) any segregated deposit accounts or securities account containing solely deposits that constitute pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation, in each case, to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property.
“Excluded Collateral” shall mean (i) all Warehoused Mortgage Loans, all ancillary rights, including Agency Servicing Rights relating to such Warehoused Mortgage Loans, all collection accounts and rights to proceeds relating to such Warehoused Mortgage Loans, all hedge agreements relating to such Warehoused Mortgage Loans, and all purchase agreements relating to such Warehoused Mortgage Loans, in each case, that are subject to such Warehousing Facility with a warehousing party, during such time, but only for such time, as such Warehoused Mortgage Loans are subject to the Warehousing Facility; (ii) all Advance Reimbursement Amounts, servicer advance receivables securing or backing Permitted Servicing Advance Facility Indebtedness, all collection accounts and rights to proceeds relating solely to the securing or backing of Permitted Servicing Advance Facility Indebtedness, and all hedge agreements relating to Permitted Servicing Advance Facility Indebtedness entered into in the ordinary course of business; (iii) any of the Borrower’s or such Subsidiary’s right, title or interest in any lease, permit, license, license agreement, contract or agreement to which the Borrower or such Subsidiary is a party as of the Closing Date or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would, under the express terms of such lease, permit, license, license agreement, contract or agreement on the Closing Date result in a breach of the terms of, or constitute a default under, such lease, permit, license, license agreement, contract or agreement (other than to the extent that (A) any such term has been waived, (B) the consent of the other party to such lease, permit, license, license agreement, contract or agreement has been obtained, or (C) any such term would be rendered ineffective pursuant to Sections 9-406, 9-408, 9-409 of the UCC or other applicable provisions of the UCC of any relevant jurisdiction or any other Applicable Law (including the Bankruptcy Code) or principles of equity); provided, that (x) immediately upon the ineffectiveness, lapse, termination or waiver of any such provision, the Collateral shall include, and the Borrower or the Guarantor shall be deemed to have granted a security interest in, all such right, title and interest as if such provision had never been in effect and (y) the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Administrative Agent’s unconditional continuing security interest in and liens upon any rights or interests of the Borrower or the Guarantor in or to (1) the
proceeds of, or any monies due or to become due under, any such lease, permit, license, license agreement, contract or agreement (including any Accounts, proceeds of Inventory or Equity Interests), and (2) the proceeds from the sale, license, lease, or other dispositions of any such lease, permit, license, license agreement, contract or agreement; (iv) any intent-to-use United States trademark applications for which an amendment to allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office, provided, that, upon such filing and acceptance, such intent-to-use applications shall be included in the definition of Collateral; (v) any Excluded Accounts; and (vi) any fee owned real property and all leasehold property interests (including REO Assets).
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of such Recipient being organized under the Laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance or Commitment pursuant to a Law in effect on the date on which (a) such Lender acquires such interest in the Advance or Commitment or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.15, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to such Recipient’s failure to comply with Section 2.15(g) and (iv) any withholding Taxes imposed under FATCA.
“Exit Fee” shall have the meaning set forth in the Administrative Agent Fee Letter.
“Fannie Mae” shall mean the Federal National Mortgage Association, its successors and permitted assigns.
“Fannie Mae Acknowledgment Agreement” shall mean the Acknowledgment Agreement to be entered into by and among Fannie Mae, the Borrower and the Administrative Agent on or about the Closing Date, pursuant to which Fannie Mae acknowledges the pledge of the Fannie MSRs under this Agreement.
“Fannie Mae Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Fannie Mae Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Fannie Mae Agency Guide” shall mean with respect to any Fannie Mae Mortgage Loan, the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide, as amended from time to time, and any related announcements, directives and correspondence issued by Fannie Mae.
“Fannie Mae Contract” shall have the meaning set forth in Section 2.18.
“Fannie Mae Lender Contract” shall mean the Mortgage Selling and Servicing Contract (as mentioned in the Fannie Mae Acknowledgment Agreement), the Fannie Mae Selling Guide (as defined as Selling Guide in the Fannie Mae Acknowledgment Agreement), the Fannie Mae Servicing Guide and all supplemental servicing instructions or directives provided by Fannie Mae, all applicable master agreements, recourse agreements, repurchase agreements, indemnification agreements, loss-sharing agreements, and any other agreements between Fannie Mae and the Borrower, and all as amended, restated or supplemented from time to time (collectively, the “Fannie Mae Lender Contract”), which rights include the right of Fannie Mae to terminate the Fannie Mae Lender Contract with or without cause and the right to sell, or have transferred, the Servicing Rights (as defined in the Fannie Mae Acknowledgment Agreement).
“Fannie Mae Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Fannie Mae Mortgage Loan” shall mean the mortgage loans underlying Fannie Mae MSRs, which shall be identified as “Fannie Mae Mortgage Loans” on the Schedule of Assets.
“Fannie Mae MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, Fannie Mae and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement.
“Fannie Mae Requirements” shall mean the rights and interests of Fannie Mae in and to the Assets arising under the Servicing Contract, Fannie Mae Acknowledgment Agreement, the Fannie Mae Agency Guide, or any other agreement between the Borrower and Fannie Mae.
“Fannie Mae Servicing Guide” shall have the meaning of Servicing Guide as set forth in the Fannie Mae Acknowledgment Agreement.
“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue 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 current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any intergovernmental agreements entered into in connection with the implementation of such sections of the Internal Revenue Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreements, treaty or
convention among Governmental Authorities and implementing such sections of the Internal Revenue Code.
“Federal Reserve Bank of New York’s Website” shall mean the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“Fee Letter” shall mean the Agency Fee Letter and the Administrative Agent Fee Letter.
“FHA” shall mean The Federal Housing Administration.
“Financial Covenants” shall mean those financial covenants set forth in Section 5.1(a).
“First Amendment Effective Date” shall mean November 27, 2019.
“Freddie AA Trigger Date” shall mean April 30, 2019.
“Freddie AA Trigger Event” shall mean the failure of the parties to execute the Freddie Mac Acknowledgment Agreement by the Freddie AA Trigger Date.
“Freddie AA Trigger Period” shall mean, in the event that a Freddie AA Trigger Event has occurred, the period of time beginning on the Freddie AA Trigger Date and ending on such date that the Freddie Mac Acknowledgment Agreement has been executed by the parties.
“Freddie Mac” shall mean the Federal Home Loan Mortgage Corporation, its successors and permitted assigns.
“Freddie Mac Acknowledgment Agreement” shall mean the Amended and Restated Acknowledgment Agreement to be entered into by and among Freddie Mac, the Borrower and the Administrative Agent, which amends and restates the Initial Freddie Mac Acknowledgment Agreement in its entirety.
“Freddie Mac Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Freddie Mac Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Freddie Mac Agency Guide” shall mean with respect to any Freddie Mac Mortgage Loan, the Freddie Mac Single-Family Seller/Servicer Guide, as it may be amended from time to time.
“Freddie Mac MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, Freddie Mac and pledged to the Administrative Agent, for the benefit
of the Lenders, pursuant to this Agreement and the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable).
“Freddie Mac Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Freddie Mac Mortgage Loan” shall mean the mortgage loans underlying Freddie Mac MSRs, which shall be identified as “Freddie Mac Mortgage Loans” on the Schedule of Assets.
“Freddie Mac Purchase Documents” has the meaning given to the term “Purchase Documents” in the Freddie Mac Agency Guide.
“Freddie Mac Requirements” shall mean the rights and interests of Freddie Mac in and to the Assets arising under the Servicing Contract, the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable), the Freddie Mac Agency Guide, or any other agreement between the Borrower and Freddie Mac.
“Freddie Mac Servicing Contract” shall mean collectively, with respect to each Freddie Mac Mortgage Loan, the servicing agreement, the Freddie Mac Agency Guide and the Freddie Mac Purchase Documents.
“Funding Base Deficiency” shall exist with
respect to the Borrowing Base on any date on which the aggregate amount of Advances outstanding exceeds the lesser of (a) the Aggregate Commitment andplus the Uncommitted Advance Amount on such date and (b) the Borrowing Base.
“Futures Account” shall mean an account, if any, opened in the name of Borrower under an agreement governing futures and options on futures transactions between Borrower and a financial institution to be determined by the Borrower and for which an account control agreement shall be entered into by and among the Borrower, such financial institution and the Administrative Agent, pursuant to which the Administrative Agent shall be granted control (as defined in Section 9-106(b) of the UCC) and the ability to direct such financial institution with respect to permitted withdrawals from the Futures Account following an Event of Default hereunder.
“GAAP” shall mean generally accepted accounting principles as are in effect from time to time and applied on a consistent basis (except for changes in application in which the Borrower’s or Guarantor’s, as applicable, independent certified public accountants and the Administrative Agent reasonably agree) both as to classification of items and amounts.
“Ginnie AA Deadline” shall mean September 30, 2019.
“Ginnie AA Trigger Date” shall mean July 30, 2019.
“Ginnie AA Trigger Event” shall mean the failure of the parties to execute the Ginnie Mae Acknowledgment Agreement by the Ginnie AA Trigger Date.
“Ginnie AA Trigger Period” shall mean, in the event that a Ginnie AA Trigger Event has occurred, the period of time beginning on the Ginnie AA Trigger Date and ending on the earlier of (i) such date that the Ginnie Mae Acknowledgment Agreement has been executed by the parties, and (ii) the Ginnie AA Deadline.
“Ginnie Mae” shall mean the Government National Mortgage Association, its successors and permitted assigns.
“Ginnie Mae Agency Guide” shall mean the Ginnie Mae Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by Ginnie Mae.
“Ginnie Mae Acknowledgment Agreement” shall mean the Acknowledgment Agreement to be entered into by and among Ginnie Mae, the Borrower and the Administrative Agent, pursuant to which Ginnie Mae acknowledges the terms of this Agreement, and the security interest in Ginnie Mae MSRs being pledged hereunder.
“Ginnie Mae Advance Rate” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Advance Rate Cap” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Borrowing Base” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Concentration Limit” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Contract” shall have the meaning set forth in Section 2.20.
“Ginnie Mae Margin Rate” shall have the meaning set forth in the Agency Fee Letter.
“Ginnie Mae Mortgage Loans” shall mean the mortgage loans underlying Ginnie Mae MSRs, which shall be identified as “Ginnie Mae Mortgage Loans” on the Schedule of Assets.
“Ginnie Mae MSRs” shall mean MSRs held by the Borrower with respect to Mortgage Loans that have been securitized in mortgage-backed Securitization transactions guaranteed by Ginnie Mae and pledged to the Administrative Agent, for the benefit of the Lenders, pursuant to this Agreement and the Ginnie Mae Acknowledgment Agreement.
“Ginnie Mae Requirements” shall mean the rights and interests of Ginnie Mae under the Ginnie Mae Servicing Contract, the Acknowledgment Agreement, or any other agreement between the Borrower and Ginnie Mae.
“Ginnie Mae Servicing Contract” shall mean the Ginnie Mae Contract as defined in the Ginnie Mae Acknowledgment Agreement.
“GLB Act” has the meaning set forth in Section 10.16(b).
“Governmental Authority” shall mean any national, federal, state, local or other government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
“Governmental Authorization” shall mean any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.
“GS Bank” shall have the meaning set forth in the introductory paragraph hereof.
“Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance or other obligations in respect of a mortgaged property. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Guaranteed Obligations” shall mean, (i) the Borrower’s obligation to repay the Advances, all accrued interest thereon, all required principal payments, and all other amounts payable by the Borrower to the Lenders pursuant to this Agreement, the Loan Note or any other Transaction Document; (ii) in the event of any proceeding for the collection or enforcement of the Borrower’s indebtedness, obligations or liabilities referred to in clause (i), the expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Administrative Agent of its rights under the Transaction Documents, including without limitation, attorneys’ fees and disbursements and court costs; (iii) all of the Borrower’s indemnity obligations to the Indemnitees pursuant to the Transaction Documents; and (iv) to the extent not otherwise included in (i)-(iii) above, any other Obligations under the Transaction Documents.
“Guarantor” shall have the meaning set forth in the introductory paragraph hereof.
“Guaranty” shall mean the Guarantee of the Guaranteed Obligations pursuant to the terms set forth in Article IX hereof.
“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 or other Governmental Authorization, (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.
“Hedge Agreement” shall mean any and all master securities forward transaction agreement(s) between Borrower and a financial institution to be determined by the Borrower, as such agreement(s) may be amended, restated or otherwise modified from time to time, or any ISDA agreement entered into by the Borrower and any other financial institution on or after the date of this Agreement that the Borrower and the Administrative Agent agree in writing constitutes a replacement thereto.
“HUD” shall mean the United States Department of Housing and Urban Development or any successor thereto.
“Indebtedness” shall mean, as to any Person at any time, as to any Person, (i) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (ii) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business; (iii) indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (iv) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (v) Capitalized Lease Obligations of such Person; (vi) obligations of such Person under repurchase agreements or like arrangements; (vii) indebtedness of others guaranteed by such Person; (viii) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (ix) indebtedness of general partnerships of which such Person is a general partner; and (x) any other indebtedness of such Person by a note, bond, debenture or similar instrument.
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (ii) to the extent not otherwise described in clause (i), Other Taxes.
“Indemnitees” shall have the meaning set forth in Section 10.5.
“Initial Acknowledgment Agreement” shall mean the Initial Freddie Mac Acknowledgment Agreement.
“Initial Freddie Mac Acknowledgment Agreement” shall mean that certain Acknowledgment Agreement entered into by and among Freddie Mac, the Borrower and the Administrative Agent, on or about the Closing Date, pursuant to which Freddie Mac acknowledges the terms of this Agreement, and the Freddie Mac MSRs being pledged hereunder.
“Insolvency Event” shall mean, 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 [***] 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 [***]; 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.
“Interest Accrual Period” shall mean for each Monthly Payment Date, the calendar month preceding the month in which such Monthly Payment Date occurs; provided, however, that with respect to the first Monthly Payment Date, the Interest Accrual Period shall be the period from and including the Closing Date to the end of the calendar month preceding such Monthly Payment Date.
“Interest Distribution Amount” shall mean for each Loan Note on any Monthly Payment Date, an amount equal to (A) the Cost of Funds for the related Interest Accrual Period with respect to each Lender, as such amount is reported to the Borrower by the Administrative Agent, and (B) any unpaid Interest Distribution Amounts from prior Monthly Payment Dates plus, to the extent permitted by law, interest thereon at the Cost of Funds Rate for the related Interest Accrual Period.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, or any successor statute, and the rules and regulations thereunder, as the same are from time to time in effect.
“Investment” shall mean (i) any direct or indirect purchase or other acquisition by the Borrower, the Guarantor, or any of their Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (other than the Borrower or any Subsidiary); (ii) any direct or indirect loan, advance (other than mortgage loans in the ordinary course of business, warehouse loans secured by mortgage loans and related assets, advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by the Borrower, the Guarantor, or any of their Subsidiaries to any other Person (other than the Borrower or any Subsidiary), including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business, (iii) all investments consisting of any exchange traded or over the counter derivative transaction, including any Derivatives Contract, whether entered into for hedging or speculative purposes, and (iv) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of any Person. The amount of any Investment of the type described in clauses (i), (ii) and (iv) shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.
“IRS” shall mean the Internal Revenue Service of the United States of America.
“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.
“Lenders” shall have the meaning set forth in the introductory paragraph hereof.
“LIBOR” shall mean, for any Interest Accrual Period, an interest rate per annum equal to the rate appearing on the applicable Bloomberg screen page (the “Service”) (or on any successor or substitute page of the Service providing rate quotations comparable to those currently provided on such page of the Service, as reasonably determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) at approximately 11:00 A.M., London time, on the date two (2) Business Days preceding the commencement of such Interest Accrual Period, as the rate for U.S. Dollar deposits with a maturity of three (3) months; provided that LIBOR for the initial Monthly Payment Date shall be two (2) Business Days prior to the Closing Date; provided, further, that if at any time LIBOR shall be less than [***], then LIBOR shall be deemed to be [***] at such time.
“LIBOR Unavailability Notice” shall have the meaning set forth in Section 2.11(f)(i).
“Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Loan Note” shall mean each Loan Note of the
Borrower in the form of Exhibit C attached hereto, payable to the order of a Lender, in the aggregate face amount of up to such Lender’s Commitment.
“Majority Lenders” shall mean, as of any date
of determination, the Lenders (other than Defaulting Lenders) that have made Advances with an outstanding principal balance in excess of fifty percent (50%)
of the aggregate principal balance of all the Advances outstanding hereunderhaving Applicable Percentages of more than 50%.
“Margin Rate” shall mean the Fannie Mae Margin Rate, the Freddie Mac Margin Rate, or the Ginnie Mae Margin Rate, as applicable.
“Margin Stock” shall have the meaning set forth in Regulation U.
“Material Adverse Change” shall mean 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” shall mean, any event or circumstance having a material adverse effect on any of the following: (i) the business, property, assets, operations or financial condition of the Borrower or the Guarantor, taken as a whole, (ii) the ability of the Borrower or the Guarantor to perform its respective obligations under the Transaction Documents, (iii) the validity or enforceability of this Agreement or any other Transaction Document to which the Borrower or the Guarantor is a party, or (iv) the existence, perfection, priority or enforceability of the Administrative Agent’s security interest in a material portion of the Collateral.
“Material Debt Facility” shall have the meaning set forth in Section 6.1(j).
“Maturity Date” shall mean the Monthly Payment Date that occurs on the twelfth (12th) month following the Availability Period End Date.
“Maximum Fannie/Freddie DQ Rate” shall mean [***].
“Maximum Ginnie DQ Rate” shall mean [***].
“Minimum Haircut Trigger Event” shall exist at any time that (i) the sum of (1) the product of the most recently determined Administrative Agent Fannie Mae Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, (2) the product of the most recently determined Administrative Agent Freddie Mac Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs, and (3) the product of the most recently determined Administrative Agent Ginnie Mae Market Value Percentage and the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs; less (ii) the outstanding Advances hereunder, does not exceed (iii) [***] of the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs (as reflected in the most recently delivered Monthly Report), calculated as set forth on Schedule V hereto.
“Minimum Liquidity Amount” shall have the meaning set forth in Section 5.1(a)(i).
“Monthly Payment Date” shall mean the 20th day of each calendar month or, if such 20th day is not a Business Day, the next succeeding Business Day, commencing March 20, 2019.
“Monthly Report” shall have the meaning set forth in Section 5.1(bb).
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“Mortgage Loan” shall mean the mortgage loans underlying each Asset, which shall be listed on the Schedule of Assets.
“Mortgaged Property” shall mean the real property (including all improvements, buildings, fixtures and building equipment thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the related Mortgage Loan.
“MSR Collateral” shall have the meaning set forth in Section 2.17.
“MSRs” shall mean mortgage servicing rights, excluding any rights to Advance Reimbursement Amounts, of the Borrower with respect to Mortgage Loans owned, or that have been securitized in mortgage-backed Securitization transactions guaranteed by, any Agency, provided that with respect to Freddie Mac MSRs, “MSRs” means the indivisible, conditional, non-delegable right and obligation of Servicer to service the Mortgage Loans for and on behalf of Freddie Mac.
“Multi-Employer Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any of its ERISA Affiliates has contributed, or has been obligated to contribute.
“Nationally Recognized Accounting Firm” shall mean (A) any of PricewaterhouseCoopers LLP, Ernst & Young LLP, KPMG LLC, Deloitte LLP, BDO USA LLC and any successors to any such firm and (B) any other public accounting firm designated by the Borrower and approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.
“NHA” shall mean the National Housing Act.
“Non-Usage Fee” shall have the meaning set forth in Section 2.5(a).
“Non-Usage Fee Percentage” shall have the meaning set forth in the Agency Fee Letter.
“Notice of Borrowing” shall have the meaning set forth in Section 2.4(a).
“Obligations” shall mean and include, with respect to the Borrower, all loans, advances, debts, liabilities, obligations, covenants and duties owing to the Administrative Agent, any Lender or any other Person by the Borrower of any kind or nature, present or future, arising under this Agreement, the Loan Notes or any of the other Transaction Documents, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. The term includes the principal amount of all Advances, together with interest, charges, expenses, fees and expenses chargeable to the Borrower pursuant to this Agreement or any other Transaction Document.
“OFAC” shall have the meaning set forth in Section 4.1(w).
“Optional Prepayment” shall have the meaning set forth in Section 2.10.
“Optional Prepayment Amount” shall have the meaning set forth in Section 2.10.
“Original Credit Agreement” shall have the meaning set forth in the Recitals.
“Original Lenders” shall have the meaning set forth in the Recitals.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient 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 Transaction Document, or sold or assigned an interest in any Asset or Transaction Document).
“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“Participant” shall have the meaning set forth in Section 10.8.
“Participant Register” shall have the meaning set forth in Section 10.8.
“Patriot Act” shall have the meaning set forth in Section 10.19.
“Permitted Collateral Liens” shall mean: (i) the security interest granted hereunder in favor of the Administrative Agent; (ii) interests of any Agency in the Collateral which are pursuant and/or subject to the Agency Guides, Servicing Contracts and/or the Initial Acknowledgment Agreement or Acknowledgment Agreements (as applicable); (iii) banker’s Liens in the nature of rights of setoff arising in the ordinary course of business of the Borrower or the Guarantor, as applicable; (iv) Liens for Taxes (x) not yet due and payable or (y) that are being contested in good faith by appropriate actions diligently conducted and for which adequate reserves have been provided in accordance with GAAP; (v) Liens securing judgments not constituting an Event of Default under Section 6.1(f); (vi) Liens on Excluded Collateral of the type described in clause (i) of such definition securing any Permitted Warehouse Financing; (vii) Liens on Excluded Collateral of the type described in clause (ii) of such definition relating to any Permitted Servicing Advance Facility Indebtedness; (viii) Liens described on Schedule 5.2(a); provided that any such Liens shall only secure the Indebtedness that it secured on the Closing Date and an permitted refinancing thereof; (ix) purchase money Liens on equipment acquired or held by the Borrower or a Subsidiary in the ordinary course of its business to secure Permitted Purchase Money Indebtedness so long as such Lien only (a) attaches to such property and (b) secures the Indebtedness that was incurred to acquire such property or any permitted refinancing in respect thereof; (x) deposits and pledges of cash securing (a) obligations incurred in respect of
workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (b) the performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory obligations or (c) obligations on surety or appeal bonds, but only to the extent such deposits or pledges are made or otherwise arise in the ordinary course of business and secure obligations not past due; (xi) Liens of landlords and mortgagees of landlords (a) arising by statute or under any lease or related contractual obligation entered into in the ordinary course of business, (b) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (c) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and (d) for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP; (xii) the title and interest of a lessor or sublessor in and to property leased or subleased (other than through a Capitalized Lease Obligation in the ordinary course of business), in each case extending only to such property; (xiii) Liens that are customary contractual rights of setoff relating to pooled deposit or sweep accounts of any of the Borrower, the Guarantor, or any of their respective Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business; (xiv) following execution of Acknowledgment Agreements with all Agencies, other Liens securing Indebtedness or other obligations in an aggregate principal amount not to exceed [***] which (a) are not on assets included in the Borrowing Base, and (b) are subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms reasonably acceptable to the Administrative Agent; (xv) easements, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions, matters which would be disclosed by an accurate survey or inspection of any real property and other, similar encumbrances and minor title defects affecting real property that do not in the aggregate materially interfere with the ordinary conduct of the business of the Borrower, the Guarantor, or any of their respective Subsidiaries; (xvi) statutory or common law Liens of warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business securing obligations that are not overdue by more than 90 days or that are being contested in good faith by appropriate proceedings, and in respect of which, if applicable, the Borrower, the Guarantor, or any of their respective Subsidiaries shall have set aside on its books reserves in accordance with GAAP; and (xvii) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business in an aggregate amount at any time not to exceed [***] provided that any such leases, licenses, subleases or sublicenses do not (x) interfere in any material respect with the business of the Borrower, the Guarantor, or any of their respective Subsidiaries or (y) secure any Indebtedness.
“Permitted Disposition” shall mean (i) subject to Section 2.10, sales of Agency Servicing Rights (including sales of delinquent Agency Servicing Rights); (ii) Dispositions of Mortgage Loans and other assets in the ordinary course of business on market terms; provided that no less than [***] the consideration received for such assets shall be paid in cash; (iii) Subject to Section 2.10 (to the extent relating to any Assets), Dispositions of Collateral to the extent required by any Agency if the failure to comply with such requirement could result in the loss of eligibility to service Mortgage Loans for the related Agency; (iv) any involuntary loss, damage or destruction of property; (v) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property; (vi) Dispositions of obsolete or worn-out equipment in the ordinary course of business; (vii)
Dispositions in connection with a Warehousing Facility or Permitted Servicing Advance Facility Indebtedness; (viii) Dispositions pursuant to the Asset Management Strategy and (ix) other Dispositions of assets as long as the value of the assets Disposed does not exceed [***] in any fiscal year.
“Permitted Holders” shall mean Stone Point Capital LLC and/or its Affiliates.
“Permitted Indebtedness”
shall mean (i) any Indebtedness owing to the Administrative Agent or any Lender under this Agreement and the other LoanTransaction
Documents, (ii) existing Indebtedness and any permitted refinancing of such Indebtedness; provided that such Indebtedness shall be listed on Schedule 4.1(q) if such Indebtedness is borrowed money, or the aggregate principal
amount of such Indebtedness exceeds [***] (iii) Permitted Purchase Money Indebtedness and any permitted refinancing in respect of such Indebtedness, (iv) Indebtedness in connection with any Permitted Warehouse Financing, (v) Permitted
Servicing Advance Facility Indebtedness, (vi) Indebtedness under Hedge Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with the Borrower’s or a Subsidiary’s
operations and not for speculative purposes, (vii) Indebtedness in the form of Capitalized Lease Obligations and Equipment and/or loans to finance Capital Expenditures, (viii) cash management obligations and Indebtedness incurred by the Borrower or
any Subsidiary in respect of netting services, overdraft protections, commercial credit cards and treasury management services, automated clearing-house arrangements, employee credit card programs, controlled disbursement, ACH transactions, return
items, interstate deposit network services, dealer incentive, in each case entered into in the ordinary course of business in connection with cash management, (ix) Indebtedness between or among Loan Partiesthe Borrower and the Guarantor, (x) intercompany Indebtedness among Persons not a party to this Agreement, (xi) following execution of Acknowledgment Agreements with all
Agencies, intercompany Indebtedness between the Borrower, the Guarantor, or their respective Subsidiaries and any Person not a party to this Agreement in an aggregate outstanding amount not to exceed [***] as long as such Indebtedness cannot
be repaid prior to payments due under this Agreement upon the occurrence and continuation of an Event of Default (and such Indebtedness is subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms
reasonably acceptable to the Administrative Agent) and (xii) following execution of Acknowledgment Agreements with all Agencies, unsecured Indebtedness in an aggregate principal amount not to exceed [***] as long as such unsecured
Indebtedness cannot be repaid prior to payments due under this Agreement upon the occurrence and continuation of an Event of Default.
“Permitted MSR Collateral Liens” shall mean: (i) the security interest granted hereunder in favor of the Administrative Agent; (ii) interests of any Agency in the Collateral which are pursuant and/or subject to the Servicing Contract and/or the Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable); (iii) banker’s Liens in the nature of rights of setoff arising in the ordinary course of business of the Borrower or the Guarantor, as applicable; (iv) Liens for Taxes not yet due and payable; (v) Liens securing judgments not constituting an Event of Default under Section 6.1(f) that are, expressly or by operation of law, subordinate to the Administrative Agent’s Lien; and (vi) Liens securing Permitted Servicing Advance Facility Indebtedness.
“Permitted Purchase Money Indebtedness” shall mean, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred to finance the acquisition of any fixed assets secured by a Lien permitted under clause (ix) of the definition of “Permitted Collateral Liens”; provided, that (a) such Indebtedness is incurred within 20 days after such acquisition, (b) such Indebtedness when incurred shall not exceed the purchase price of the asset financed and (c) the aggregate principal amount of all such Indebtedness shall not exceed [***] at any time outstanding.
“Permitted Servicing Advance Facility Indebtedness” shall mean any Indebtedness of the Borrower incurred under a Servicing Advance Facility.
“Permitted Warehouse Financing” shall mean any warehouse, purchase, repurchase, participation or other similar financing transaction (including any new or existing early buyout line) whereby the warehousing party extends a facility to the Borrower or any Subsidiary to finance the funding or acquisition of mortgage loans, on an interim basis, pending the repurchase of such mortgage loans by the Borrower or such Subsidiary or the subsequent sale and delivery of such mortgage loans, or interests therein, to a third party investor or through a mortgage backed security, which facility is secured by such mortgage loans, or interest therein, or through purchase of such mortgage loans, or interests therein, from the Borrower or such Subsidiary by such warehousing party, but only for such time as such mortgage loan remains financed under such Permitted Warehouse Financing, and which financing is made on prevailing market terms, including with respect to advance rates, financial covenants, and interest rates.
“Person” shall mean any individual, corporation (including a business trust), partnership, limited liability company, joint-stock company, trust, unincorporated organization or association, joint venture, government or political subdivision or agency thereof, or any other entity.
“Pool” means a group of Mortgage Loans, which are the security for a mortgage-backed security issued or guaranteed by an Agency.
“Portfolio” shall mean, with respect to any Agency, all of the Mortgage Loans owned by such Agency and serviced by the Borrower pursuant to the terms of the related Servicing Contract.
“Portfolio Delinquency Rate” means, as of any date of determination, the ratio of (i) the unpaid principal balance of all residential mortgage loans which are serviced by the Borrower for any Agency that have monthly payments that are 60 days or more past due (calculated in accordance with the relevant Agency delinquency calculation methodology) to (ii) the unpaid principal balance of all residential mortgage loans which are serviced by the Borrower for any Agency, in each case, as of the last calendar day of the immediately preceding month.
“Portfolio Hedges” shall mean (i) transactions entered into pursuant to a Hedge Agreement, if any; (ii) transactions entered into in the Futures Account, if any; and (iii) such other transactions as Administrative Agent and Borrower may agree constitute Portfolio Hedges;
provided, however, that the term “Portfolio Hedges” shall not include any of the foregoing to the extent such is subject to netting or set-off provisions pursuant to transactions referenced as Excluded Collateral.
“Potential Event of Default” shall mean any occurrence or event that, with the giving of notice, the passage of time or both, would constitute an Event of Default.
“Prepayment Premium” shall have the meaning set forth in the Agency Fee Letter.
“Proceeding” shall mean any claim, litigation, investigation or proceeding.
“Proceeds” shall mean “proceeds” as defined in Section 9-102(a)(64) of the UCC.
“Recipient” shall mean the Administrative Agent, the Lenders or any other recipient of any payment to be made by or on account of any obligation of the Borrower or the Guarantor under this Agreement or any other Transaction Document.
“Records” shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by the Borrower, or any other person or entity with respect to the Assets.
“Redemption Date” shall have the meaning set forth in Section 10.8.
“Register” shall have the meaning set forth in Section 10.8.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Related Principal and Interest Custodial Accounts” means all principal and interest custodial accounts (other than the Collection Account) maintained in the ordinary course of business by the Borrower that relate solely to any Mortgage Loan or Pool that (I)(a) is subject to a Permitted Warehouse Financing, (b) maintained in accordance with an applicable Servicing Contract, or (iii) maintained in connection with the servicing of third party mortgage loans, and (II) do not have deposited therein, with respect to any Assets, any servicing fees or subservicing fees (other than retained yield, Ancillary Income and, after the occurrence of an Event of Default, the applicable Base Servicing Fee) that the Borrower as servicer is entitled to receive free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, pursuant to the Servicing Contracts.
“Related Security” shall mean with respect to any Asset, (a) all security interests or Liens and property subject thereto from time to time, if any, purporting to secure payment of such Asset, whether pursuant to the Servicing Contract related to such Asset or otherwise, together with all financing statements covering any collateral securing such Asset; (b) all guarantees, indemnities, letters of credit, insurance or other agreements or arrangements of any kind from time to time supporting or securing payment of such Asset whether pursuant to the
Servicing Contract related to such Asset or otherwise; and (c) any and all Proceeds of the foregoing.
“Relevant Governmental Body” shall mean 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.
“REO Assets” shall mean 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.
“Reportable Event” shall mean 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 Pension Benefit Guaranty Corporation 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.
“Responsible Officer” shall mean, with respect to any corporation, limited liability company or partnership, the chief executive officer, chief financial officer, any executive vice president or any senior vice president (the duties of which vice president include the administration of this Agreement, the Transaction Documents or the transactions contemplated hereby or thereby), and the treasurer.
“Schedule of Assets” shall mean the schedule of Assets attached to each Notice of Borrowing that meet the criteria of an Eligible Asset and which includes identifying information relating to such Assets as agreed to between the Borrower and the Administrative Agent, which schedule may be updated from time to time in accordance with the terms of this Agreement.
“Schedule of Ineligible Assets” shall mean the schedule of Assets attached to each Notice of Borrowing that do not meet the criteria of an Eligible Asset, which schedule may be updated from time to time in accordance with the terms of this Agreement.
“Secured Parties” shall mean the Administrative Agent and each Lender.
“Securities” shall mean any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
“Securitization” shall mean a public or private transfer, sale or financing of (i) Servicer Advances or MSRs, (ii) mortgage loans, (iii) installment contracts, (iv) deferred servicing fees; (v) other loans and related assets, and/or (vi) any other assets capable of being securitized, (clauses (i) – (vi) above, collectively, the “Securitization Assets”) by which the
Borrower, the Guarantor, or any of their Subsidiaries directly or indirectly securitizes a pool of specified Securitization Assets including, without limitation, any such transaction involving the sale of specified Servicer Advances or mortgage loans to a Securitization Entity.
“Securitization Assets” shall have meaning specified in the definition of “Securitization.”
“Securitization Entity” shall mean (i) any Person other than the Borrower or the Guarantor (whether or not a Subsidiary of the Borrower or the Guarantor) established for the purpose of issuing asset-backed or mortgaged-backed or mortgage pass-through securities of any kind (including collateralized mortgage obligations and net interest margin securities), (ii) any special purpose Subsidiary established for the purpose of selling, depositing or contributing Securitization Assets into a Person described in clause (i) or holding securities in any related Securitization Entity, regardless of whether such person is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Borrower, the Guarantor, or any Subsidiary and (iii) any special purpose Subsidiary of the Borrower or the Guarantor formed exclusively for the purpose of satisfying the requirements of Credit Enhancement Agreements and regardless of whether such Subsidiary is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of the Borrower, the Guarantor, or any of their Subsidiaries other than under Credit Enhancement Agreements.
“Servicer Advance” shall mean advances made or required to be made by the Borrower or any of its Subsidiaries in its capacity as servicer under a Servicing Contract 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 REO Assets; or that the Borrower or any of its Subsidiaries otherwise advances in its capacity as servicer under such Servicing Contract.
“Servicer Termination Event” shall mean any default, event of default or similar occurrence under the terms of a Servicing Contract, pursuant to which the Borrower may be terminated in its capacity as servicer in accordance with and pursuant to the terms of such Servicing Contract.
“Servicing Advance Facility” shall mean any funding arrangement with a lender, lenders or an indenture trustee, acting on behalf of noteholders, secured by the right to be reimbursed for Servicer Advances made by the Borrower or a special purpose subsidiary of the Borrower as servicer under one or more Servicing Contracts under which financing advances are made to the Borrower based on such advance reimbursement rights (whether or not covered by an Acknowledgment Agreement).
“Servicing Contract” shall mean each of the Fannie Mae Lender Contract, the Freddie Mac Servicing Contract, and the Ginnie Mae Servicing Contract, as applicable.
“Servicing Fee” shall mean, with respect to any Mortgage Loan, the aggregate monthly fee payable to the Borrower in servicing such Mortgage Loan pursuant to the related Servicing Contract, not including any Ancillary Income.
“Single-Employer Plan” shall mean any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multi-Employer Plan, that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code and is sponsored or maintained by the Borrower or any ERISA Affiliate or for which the Borrower 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 day shall mean the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.
“Specified Contribution” shall have the meaning assigned to such term in Section 6.3.
“Stone Point” shall mean Trident VI, L.P., Trident VI Parallel Fund L.P., Trident VI DE Parallel Fund, L.P. or Trident VI Professionals Fund, L.P.
“Subsidiary” shall mean, with respect to any Person at any time, (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding Capital Stock or shares of beneficial interest normally entitled to vote for the election of one or more directors, managers or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s subsidiaries, or any partnership of which such Person or any of such Peron’s Subsidiaries is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s subsidiaries and (ii) any corporation, trust, partnership or other entity which is Controlled or capable of being Controlled by such Person or one or more of such Person’s subsidiaries.
“Supermajority Lenders” shall mean, as of any date of determination, the Lenders (other
than Defaulting Lenders) that have made Advances with an outstanding principal balance in excess of sixty-six and two thirds percent (66 2/3%) of the aggregate principal balance of all the Advances outstanding
hereunder having Applicable Percentages of more than 66 2/3%.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, and including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” shall mean the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Transactions” shall mean, collectively, the transactions to occur on or prior to the Closing Date and thereafter on each Borrowing Date pursuant to the Transaction Documents,
including (a) the execution, delivery and performance of the Transaction Documents and the Advances hereunder and (b) the payment of all fees and expenses due and owing in connection with the foregoing.
“Transaction Documents” shall mean this Agreement, the Loan Notes, the Fee Letters, the Account Control Agreement, the Initial Acknowledgment Agreement, the Acknowledgment Agreements, and any other agreements, instruments, certificates or documents delivered or contemplated to be delivered hereunder or thereunder or in connection herewith or therewith, as the same may be supplemented or amended from time to time hereafter in accordance herewith or therewith, and “Transaction Document” shall mean any of the Transaction Documents.
“Trigger Event” shall mean the occurrence and continuation of any of the following:
(i) The average of the three (3) most recent monthly Portfolio Delinquency Rates with respect to the Borrower’s servicing portfolio relating to Fannie Mae and Freddie Mac is greater than the Maximum Fannie/Freddie DQ Rate;
(ii) The average of the three (3) most recent monthly Portfolio Delinquency Rates with respect to the Borrower’s servicing portfolio relating to Ginnie Mae is greater than the Maximum Ginnie DQ Rate; or
(iii) Two year “compare ratio” assigned to the Borrower by FHA under its “Neighborhood Watch” program exceeds [***];
provided that the Trigger Event shall be deemed to be cured if (a) in the case of (i) and (ii) above, the foregoing delinquency rates returning and remaining below the specified Maximum Rate for a period of [***] and (b) in the case of (iii) above during any period when clause (iii) is applicable, immediately upon the foregoing “compare ratio” decreasing below [***]; provided further that in no event will such Trigger Event be deemed to have been satisfied at any time when an Event of Default shall have occurred and be continuing.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in any applicable jurisdiction.
“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“Uncommitted Amount” means [***].
“Uncommitted Advance Amount” means, as of any date, the amount of Advances outstanding in excess of the Aggregate Commitment.
“United States” shall mean the United States of America.
“Unused Portion” shall mean, with respect to a Lender’s Commitment as of any day, the excess, if any, of (x) the Commitment of such Lender as of 5:00 P.M. (New York City time) on such day, over (y) the sum of the aggregate outstanding principal balance of the Advances of such Lender as of 5:00 P.M. (New York City time) on such day.
“Upfront Fee” shall have the meaning set forth in the Administrative Agent Fee Letter.
“U.S. Person” shall mean any Person who is a U.S. person within the meaning of Section 7701(a)(30) of the Internal Revenue Code.
“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.15(G)(ii)(B)(3).
“VA” shall mean the U.S. Department of Veterans Affairs.
“Valuation Agent” shall mean the valuation service providers identified on Schedule III hereto, as may be amended from time to time by the Administrative Agent, the Borrower and the Majority Lenders.
“Valuation Agent Asset Value” shall mean, as of any date of determination, the sum of (i) the Valuation Agent Fannie Mae Asset Value, (ii) the Valuation Agent Freddie Mac Asset Value, and (iii) the Valuation Agent Ginnie Mae Asset Value.
“Valuation Agent Fannie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Fannie Mae Advance Rate, (ii) the Valuation Agent Fannie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Fannie Mae MSRs.
“Valuation Agent Fannie Mae Market Value Percentage” shall mean, with respect to any Fannie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Fannie Mae MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Fannie Mae Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Freddie Mac Asset Value” shall mean, as of any date of determination, the product of (i) the Freddie Mac Advance Rate, (ii) the Valuation Agent Freddie Mac Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Freddie Mac MSRs.
“Valuation Agent Freddie Mac Market Value Percentage” shall mean, with respect to any Freddie Mac MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Freddie Mac MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Freddie Mac Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Ginnie Mae Asset Value” shall mean, as of any date of determination, the product of (i) the Ginnie Mae Advance Rate, (ii) the Valuation Agent Ginnie Mae Market Value Percentage, and (iii) the aggregate unpaid principal balance of the Mortgage Loans related to the Ginnie Mae MSRs.
“Valuation Agent Ginnie Mae Market Value Percentage” shall mean, with respect to any Ginnie Mae MSR as of any date of determination, the percentage to be applied to the unpaid principal balance of the applicable Mortgage Loans, to arrive at the fair market value of such Ginnie Mae MSR, as most recently determined by a Valuation Agent in accordance with Section 2.6, provided that, in no event shall the Valuation Agent Ginnie Mae Market Value Percentage be greater than (i) an amount equal to the market value thereof implying a discount rate which is the sum of the 5 Year Swap Rate and [***] (if using a static model), or (ii) the market value thereof implying a zero option-adjusted spread.
“Valuation Agent Market Value Percentage” means the Valuation Agent Fannie Mae Market Value Percentage, the Valuation Agent Freddie Mac Market Value Percentage, or the Valuation Agent Ginnie Mae Market Value Percentage, as applicable.
“Warehoused Mortgage Loans” shall mean Mortgage Loans which have been pledged to or purchased by a warehousing party or in which the warehousing party has acquired a participation interest pursuant to a Permitted Warehouse Financing.
Section 1.2 Computation of Time Periods. In this Agreement, 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 means “to but excluding” and the word “through” means “through and including.”
Section 1.3 Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth therein), (B) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (C) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (D) all references herein to Sections, Schedules and Exhibits shall be construed to refer to Sections of, and Schedules and Exhibits to, this Agreement, (E) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real property, tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and interests in any of the foregoing, (F) any reference to a statute, rule or regulation is to that statute, rule or regulation as now enacted or as the same may from time to time be amended, re-enacted or expressly replaced, (G) “or” is not exclusive, and (H) capitalized terms used herein and not defined, but which are defined in the Agency Fee Letter or the Administrative Agent Fee Letter shall have the meaning specified in such Fee Letter.
Section 1.4 Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein; provided that if the Borrower notifies the Administrative Agent that the Borrower or the Guarantor wishes to amend any Financial Covenant to eliminate the effect of any change in GAAP on the operation of such covenant, then the Borrower’s or Guarantor’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower or Guarantor, as applicable, and the Administrative Agent.
ARTICLE IIARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1 Establishment of the Credit Facility. On the Closing Date, and subject to and upon the terms and conditions set forth in this Agreement and the other Transaction Documents, the Administrative Agent and the Lenders agree to establish the credit facility set forth in this Agreement for the benefit of the Borrower.
Section 2.2 The Advances. (a) Upon the terms and subject to the conditions hereinafter set
forth, the Lenders, severally but not jointly, shall from time to time during the Availability Period, make loans to the Borrower on a revolving basis that are secured by the Collateral. Each such Advance shall be made by a Lender in respect of its
revolving Commitment; provided, however, that no such Advance shall cause (i) a Borrowing Base Deficiency or a Funding Base Deficiency; (ii) the aggregate outstanding
principal balance of the Advances to exceed the Aggregate Commitment except as permitted under Section 2.2(b) below; (iii) with respect to any Lender, to exceed such Lender’s Commitment; or (iiiiv) following the Closing Date and the initial Advance, [***] or more of the Aggregate Commitment to be drawn in any rolling thirty (30) day period, unless otherwise
agreed by the Administrative Agent. Within
the limits of each Lender’s Commitment, any Advancesto the extent the aggregate outstanding principal balance of any Advance is prepaid, such amount may be reborrowed under this Section 2.2.2.2(a).
(b) To the extent any Notice of Borrowing requests Advances, the making of which would cause the aggregate amount of Advances to be in excess of the Aggregate Commitment on the relevant Borrowing Date, upon the terms and subject to the conditions hereinafter set forth, each Lender may, in its sole and absolute discretion, from time to time during the Availability Period, with respect to the amount of such requested Advances that would cause the aggregate outstanding principal balance of the Advances to be in excess of the Aggregate Commitment on the relevant Borrowing Date, make such Advance to the Borrower that is secured by the Collateral: provided, however, that no such Advance shall cause (i) the aggregate outstanding principal balance of the Advances to exceed the sum of the Aggregate Commitment and the Uncommitted Amount or (ii) a Borrowing Base Deficiency or a Funding Base Deficiency. The Borrower hereby acknowledges and agrees that, notwithstanding any provision of this Agreement, or any other Transaction Document, no Lender has any obligation to make any Advances in excess of the Aggregate Commitment or such Lender’s Commitment and this Agreement does not create, and shall not be construed to create, any contractual or other commitment by any Lender to make any Advance in excess of the Aggregate Commitment or such Lender’s Commitment.
Section 2.3 Use of Proceeds. Except as otherwise provided in Section 2.18, Section 2.19, and Section 2.20 herein, proceeds of Advances shall only be used by the Borrower to (A) purchase, in the ordinary course of business, Agency eligible MSRs and related assets, (B) pay certain fees and expenses incurred in connection with the establishment of the credit facility set forth in this Agreement, (C) subject to Section 2.19, make cash distributions from time to time pursuant to Section 5.2(d) in an amount not exceeding the excess of the Borrowing Base over the outstanding principal amount of the Advances and (D) for general corporate purposes.
Section 2.4 Making the Advances. (a) Except as otherwise provided herein, the Borrower may request the Lenders to make Advances to the Borrower no more frequently than [***] per week by the delivery to the Administrative Agent, not later than [***] (New York City time) on any Business Day of a written notice of such request substantially in the form of Exhibit B attached hereto (each such notice, a “Notice of Borrowing”), together with a duly completed Borrowing Base Certificate, signed by a Responsible Officer and including a Schedule of Assets and Schedule of Ineligible Assets. Any Notice of Borrowing or Borrowing Base Certificate received by the Administrative Agent after the time specified in the immediately preceding sentence shall be deemed to have been received by the Administrative Agent on the next Business Day, and to the extent that results in the proposed Borrowing Date being earlier than three (3) Business Days after the date of delivery of such Notice of Borrowing, then the date specified in such Notice of Borrowing as the proposed Borrowing Date of an Advance shall be deemed to be the Business Day immediately succeeding the proposed Borrowing Date of such Advance originally specified in such Notice of Borrowing. The proposed Borrowing Date specified in a Notice of Borrowing shall be no earlier than three (3) Business Days after the date of delivery of such Notice of Borrowing and may be up to a maximum of thirty (30) days after the date of delivery of such Notice of Borrowing. Unless otherwise provided herein, each Notice
of Borrowing shall be irrevocable and shall specify (i) the aggregate principal amount of the Advance requested, and (ii) the Borrowing Date (which shall be a Business Day).
(b) The aggregate principal amount of each Advance shall not be less than [***].
(c) Upon receipt by the
Administrative Agent of a Notice of Borrowing and a Borrowing Base Certificate from the Borrower, the Administrative Agent shall promptly (on the date of its deemed receipt of the Notice
of Borrowing and the related Borrowing Base Certificate) deliver to each Lender a copy of such Notice of Borrowing and a written notice specifying each Lender’s ApplicableCommitment Percentage of the amount requested by the Borrower pursuant to the applicable Notice of Borrowing. Thereafter, each Lender shall make Advances in an aggregate amount
equal to its ApplicableCommitment Percentage of the amount requested by the Borrower pursuant to the applicable Notice
of Borrowing; provided that to the extent the Notice of Borrowing requests Advances, the making of which would cause the aggregate amount of Advances to be in excess of the Aggregate
Commitment on the relevant Borrowing Date, each Lender may, in its sole and absolute discretion, with respect to the portion of such requested Advance that would constitute an Uncommitted Advance Amount on the relevant Borrowing Date, make such
portion of the Advance in an amount equal to its Commitment Percentage, provided further, that if any Lender elects, in its sole and absolute discretion, not to provide all or any portion of a requested Advance that would constitute an
Uncommitted Advance Amount, the other Lenders (on a pro rata basis or such other basis as may be agreed by the Lenders) may agree to provide all or any portion of such Advance. The Lenders shall make such Advances to the Administrative
Agent’s Account by no later than [***] (New York City time) on the Borrowing Date specified or deemed specified in such Notice of Borrowing, and the. The Administrative Agent shall promptly make such Advance available to the Borrower in U.S. Dollars to the Borrower’s Account. For avoidance of doubt,
nothing herein shall be deemed to oblige any Lender to fund any Advance in excess of the Aggregate Commitment or such Lender’s Commitment.
Section 2.5 Fees.
Section 2.5 (a) Non-Usage Fee. On each Monthly Payment Date during the Availability Period, the Borrower agrees to pay to the Administrative Agent,for the ratable benefit of
the Lenders and as consideration for each Lender’s Commitment hereunder, a non-usage fee in Dollars (the “Non-Usage Fee”) in an amount equal to the (1) the applicable Non-Usage Fee Percentage as described in the Agency Fee Letter, if any,
multiplied by (2) the daily average Unused Portion of the Aggregate Commitment in the immediately preceding calendar month. Accrued Non-Usage Fees shall be due and payable in arrears on each Monthly Payment Date, and on the last day of the Availability
Period. Computations of the Non-Usage Fee shall be made by the Administrative Agent on the basis of a year of 360 days and for the actual number of days elapsed, and, with respect to each Lender, pro rata based on such Lender’s Commitment.
Section 2.6 Borrowing Base. (a) (a)
The Administrative Agent may, in its sole and absolute discretion, and shall, at the request of the Majority Lenders, on any date, calculate the Borrowing Base and shall provide written notice thereof to the Borrower. To the extent any
such calculation results in a Borrowing Base Deficiency, the Administrative Agent shall deliver a notice to the Borrower and each Lender (a “Borrowing Base Deficiency Notice”), setting forth the calculation thereof (which shall be conclusive absent manifest error), and the Borrowing Base Required Payment to be made by the Borrower as a result of such calculation (which amount shall be paid in accordance with Section 2.9). At the Administrative Agent’s discretion, the Administrative Agent may obtain valuation reports with respect to the Administrative Agent Asset Value from a Valuation Agent, at any time and from time to time on a non-binding basis; provided that the Borrower shall not be responsible for payment of any costs, expenses, fees or other amounts in connection with such valuation report except in connection with a Borrowing Base Dispute pursuant to Section 2.6(b).
(b) Notwithstanding the foregoing or anything to the contrary contained herein, except during an Acknowledgment Agreement Trigger Period, the Borrower shall have the right to dispute the Administrative Agent’s calculation of the Administrative Agent Asset Value by notifying the Administrative Agent and the Lenders within three (3) Business Days after the Borrower receives a Borrowing Base Deficiency Notice (a “Borrowing Base Dispute”). If the Borrower initiates a Borrowing Base Dispute, then the Administrative Agent, on one hand, and the Borrower, on the other hand, shall each promptly direct separate Valuation Agents, to prepare a valuation report with respect to such Administrative Agent Asset Value. The average of the midpoint values indicated in the two valuation reports submitted by the Valuation Agents shall become the conclusive Valuation Agent Market Value Percentage of the related MSRs that constitute Eligible Assets, binding upon all Parties, absent manifest error.
(c) Any costs, expenses, fees and other amounts due and owing to any Valuation Agent or Dealer in connection with the engagement of such Valuation Agent or Dealer in connection with a Borrowing Base Dispute pursuant to Section 2.6(b) shall be an Obligation of the Borrower and shall become due and payable on the immediately succeeding Monthly Payment Date in accordance with Section 2.7.
Section 2.7 Repayment of the Advances. (a) The outstanding principal balance of the Advances and the other Obligations owing under this Agreement, together with all accrued but unpaid interest thereon, shall be due and payable on the Maturity Date.
(b) On each Monthly Payment Date, except during any Acknowledgment Agreement Trigger Period or following the occurrence and during the continuation of an Event of Default, the Borrower shall cause the payment in full of all Distributable Amounts to the Administrative Agent for payment to the applicable Parties; provided that the Borrower shall pay the Credit Manager Fees directly to the Credit Manager on or prior to each Monthly Payment Date as provided in the Credit Manager Agreement.
(c) On each Monthly Payment Date during any Acknowledgment Agreement Trigger Period or following the occurrence and during the continuation of an Event of Default, amounts on deposit in the Collection Account, including Collections deposited therein during the related Collection Period shall, at the direction of the Administrative Agent, be disbursed by the Account Bank from the Collection Account and applied on such Monthly Payment Date in the following order of priority:
(i) first, to the Borrower, the Base Servicing Fee with respect to the related Collection Period;
(ii) second, ratably (a) to the Administrative Agent, all costs, expenses, reimbursements and indemnification amounts owed to the Administrative Agent pursuant to the terms hereof, and (b) to the Credit Manager, the Credit Manager Fees with respect to such Monthly Payment Date and all costs, expenses, reimbursements and indemnification amounts owed to the Credit Manager pursuant to the terms of the Credit Manager Agreement;
(iii) third, to the Administrative Agent, on behalf of the Lenders, the Interest Distribution Amount with respect to such Monthly Payment Date;
(iv) fourth, to the Administrative Agent, on behalf of the Lenders, the payment of the Non-Usage Fee with respect to such Monthly Payment Date;
(v) fifth, to the Administrative Agent, on behalf of the Lenders, pro rata, based on the Advances held by such Lender, all remaining amounts to be applied to the reduction of such Advances to zero on such date;
(vi) sixth, to the
Administrative Agent, on behalf of the applicable party, all Breakage CostCosts and other amounts that are then due and
payable pursuant to Section 2.11;
(vii) seventh, to the Administrative Agent, on behalf of the applicable party, all fees, expenses, indemnitees and other amounts that are due and payable by the Borrower and incurred in connection with this Agreement and required to be paid or reimbursed hereunder, the financing, management, operation or maintenance of the Assets or the Transaction Documents, including to consultants and experts retained by the Borrower (including attorneys and accountants) and verification agents and Dealers retained pursuant to the terms hereof;
(viii) eighth, to the Administrative Agent, on behalf of any applicable party, the ratable payment of all other Obligations that are past due or payable on such date; and
(ix) ninth, all remaining amounts to the Borrower’s Account on such date.
Notwithstanding anything to the contrary in this Agreement or any of the other Transaction Documents, all terms and provisions of this Agreement and the other Transaction Documents are and shall be subject to the terms and provisions of each Acknowledgment Agreement. To the extent that any conflict necessarily exists or shall be adjudged to exist between the terms and provisions of this Agreement and those of the applicable Acknowledgment Agreement, solely with respect to the relationship and agreements between Borrower and/or Administrative Agent, on the one hand, and the applicable Agency, on the other hand, the terms and provisions of the applicable Acknowledgment Agreement shall govern and control.
(d) Notwithstanding the foregoing, (1) during an Acknowledgment Agreement Trigger Period, in the event that amounts available for distribution from the Collection Account pursuant to Section 2.7(c) are insufficient to pay in full all Distributable Amounts due and owing on any Monthly Payment Date, then the Borrower shall cause the payment in full of the applicable deficiency to the Administrative Agent for payment to the applicable Parties, and (2) following the occurrence and during the continuation of an Event of Default, in the event that amounts available for distribution from the Collection Account pursuant to Section 2.7(c) are insufficient to pay in full all Obligations then due and owing on any day, then the Borrower shall cause the payment in full of the applicable deficiency to the Administrative Agent for payment to the applicable Parties.
Section 2.8 Application
of
Prepayment of AdvancesSection 2.8 [Reserved].. Each repayment of Advances pursuant to Section 2.7 and each
prepayment of Advances pursuant to Section 2.9 or 2.10 shall be applied to prepay the Advances outstanding on a pro rata basis until paid in full.
Section 2.9 Mandatory Prepayments of Advances.
(a) Borrowing Base Deficiency.
(i) If a Borrowing Base Deficiency exists on any date, the Borrower shall pay to the Administrative Agent, for the account of the Lenders, the Borrowing Base Required Payment, together with accrued but unpaid interest on the amount required to be so prepaid to the date of such prepayment. All such amounts shall become due and payable (i) no later than 5:00 p.m. (New York City time) on the [***] following the Borrower’s receipt of a Borrowing Base Deficiency Notice, or (ii) if Stone Point provides Lender a guarantee of payment for the amounts due hereunder, in such form as is acceptable to Lender in its sole discretion, then such amounts shall be due and payable no later than 5:00 p.m. (New York City time) on such date that is [***] following the Borrower’s receipt of a Borrowing Base Deficiency Notice. For the avoidance of doubt, the [***] period during which the Borrower may dispute the Administrative Agent’s determination of the Administrative Agent Asset Value set forth in Section 2.6 shall not operate to extend the cure periods referenced in the preceding sentence.
(ii) In lieu of making any
prepayment in accordance with clause (i) above to eliminate a Borrowing Base Deficiency, if such Borrowing Base Deficiency occurs during the Availability Period the Borrower may identify as Collateral additional Fannie
Mae MSRs, Freddie Mac MSRs, or Ginnie Mae MSRs, as applicable,Eligible Assets in an amount equal to the Borrowing Base Required Payment. Upon such
identification, such MSRs shall be Collateral hereunder without any further action by the Administrative Agent or the Lenders; provided that, immediately prior to and immediately after giving effect to such contribution, (i) no Event of Default
exists, and (ii) each of the representations, warranties, covenants and agreements made or deemed to be made by the Borrower under or in connection with this Agreement and the Transaction Documents is true and correct in all material respects as of
such date.
Section 2.10 Optional Prepayments; Removal of Collateral.
(a) Optional Prepayments. At any time, the Borrower may, at its option, prepay all or any portion of the Advances outstanding (an “Optional Prepayment”) on any date (the “Redemption Date”) upon prior written notice delivered to the Administrative Agent not later than 12:00 p.m. (New York City time) three (3) Business Days prior to the date of such payment; provided that the Borrower shall be permitted to deliver such notice no more frequently than [***] times during any week. Each such notice shall be in the form attached hereto as Exhibit H and shall specify (i) the aggregate amount of the prepayment to be made on the Advances outstanding (such amount, if applicable, the “Optional Prepayment Amount”), (ii) the Redemption Date, and (iii) if applicable, the Collateral to be released on such Redemption Date, and shall include a duly completed Borrowing Base Certificate containing information accurate as of such date. Each Optional Prepayment shall be in a minimum principal amount equal to [***] and in integral multiples of [***] in excess thereof. Any prepayment of the Advances outstanding shall be accompanied by a payment of all accrued and unpaid interest on the amount prepaid, all Breakage Costs, Exit Fees, any applicable Prepayment Premiums and all outstanding indemnity Obligations of the Borrower, then due and owing under this Agreement through such Redemption Date; provided that the Prepayment Premium shall only be payable on the dates as set forth in the definition thereof.
(b) Removal of Collateral. Notwithstanding language herein to the contrary, after giving effect to any release of Collateral (whether in connection with an Optional Prepayment pursuant to Section 2.10(a) above or pursuant to any other provision of this Agreement), the following conditions must be satisfied:
(i) no selection procedures are used with respect to identification of Assets to be released or retained that are materially adverse to the Secured Parties;
(ii) no Borrowing Base Deficiency, Potential Event of Default or Event of Default shall exist either prior to, or after giving effect to the prepayment of the applicable portion of the Advances outstanding and/or the release of the related Collateral (unless, in the case of a Borrowing Base Deficiency or Funding Base Deficiency, (x) the amount of such deficiency is eliminated as a result of such prepayment and release or (y) the release is in connection with a sale to an unaffiliated third-party purchaser and the following conditions are satisfied (i) the purchaser has agreed to pay the purchase price for the released Collateral to the Administrative Agent as a prepayment of the Advances, and (ii) after giving effect to such prepayment, the weighted average of the Effective Advance Rates for the Agencies is the same or lower as it had been prior to the release of the related Collateral); and
(iii) the representations and warranties set forth in Article IV are true and correct as of such Redemption Date (except to the extent such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) after giving effect to the prepayment of the applicable portion of the Advances outstanding and release of the related Collateral.
Section 2.11 Breakage Costs; Increased Costs; Capital Adequacy; Additional Indemnifications; LIBOR Unavailability; Illegality.
(a) Breakage Costs. If an Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower hereby agrees to pay any Breakage Costs resulting therefrom on the next Monthly Payment Date promptly following the date on which such Breakage Costs are incurred in accordance with Section 2.7 and written demand is received from any such Lender (setting forth in reasonable detail the basis for calculating such compensation).
(ii) Reserved.
(b) Increased Costs. If (i) the introduction of or any change (including any change by way of imposition or increase of reserve requirements) in or in the interpretation of any law or regulation by a Governmental Authority, (ii) the compliance by any Lender or the Administrative Agent (each of which, an “Affected Party”) with any guideline or request from any Governmental Authority (whether or not having the force of law) or (iii) any Change in Law, (a) shall subject any Affected Party to any Taxes (other than (x) Indemnified Taxes, (y) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (z) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto or (b) shall impose, modify or deem applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party or (b) shall impose any other condition affecting the rights of any Lender and the Administrative Agent hereunder, the result of which is to increase the cost to any Affected Party under this Agreement or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement below that which such Affected Party would have received but for such occurrence, then within 30 days following the receipt of written demand by such Affected Party (provided that such Affected Party shall provide the Borrower with notice within a reasonable period of time following such Affected Party’s discovery of such increased costs or reductions and shall include calculations of such compensation in reasonable detail), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered to the extent such additional or increased costs or reduction are incurred or suffered in connection with any obligation to make Advances hereunder, any of the rights of such Lender or the Administrative Agent hereunder, or any payment made hereunder.
(c) Capital Adequacy. If (i) the introduction of or any change after the Closing Date in or in the interpretation of any law, guideline, rule, regulation, directive or request, (ii) compliance by any Affected Party after the Closing Date with any law, guideline, rule, regulation, directive or request from any central bank or other Governmental Authority or agency (whether or not having the force of law), including compliance by an Affected Party with any request or directive regarding capital adequacy or liquidity or (iii) any other Change in Law has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such introduction, change,
compliance or Change in Law (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then within 30 days following the receipt of written demand by such Affected Party (which written demand shall be accompanied by a statement setting forth the basis for such demand in reasonable detail), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such reduction.
(d) If as a result of any event or circumstance similar to those described in Sections 2.11(a), 2.11(b) or 2.11(c), any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then within 30 days following the receipt of written demand by such Affected Party (which written demand shall be accompanied by a statement setting forth the basis for such demand in reasonable detail), the Borrower shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts actually paid by it.
(e) In determining any amount provided for in this Section 2.11, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim under this Section 2.11 shall submit to the Borrower a certificate as to such additional or increased cost or reduction, which certificate shall be conclusive absent manifest error.
(f) LIBOR Unavailability. Notwithstanding anything to the
contrary,(i) in the event that the Administrative Agent shall have reasonably determined in good faith that U.S. Dollar deposits in the principal amounts of the Advances are not generally
available in the London interbank market, or that the Administrative Agent has been notified in writing by the Majority Lenders that the rates at which such U.S. Dollar deposits are being offered will not adequately and fairly in good faith reflect the
cost to the Majority Lenders of making or maintaining loans at LIBOR, or that reasonable means do not exist for ascertaining LIBOR, the Administrative Agent shall, as soon as practicable thereafter, notify the Borrower and the Lenders of such
determination (a “LIBOR Unavailability Notice”). The Administrative Agent may rescind any such LIBOR Unavailability Notice in the event that the circumstances giving rise to such notice no longer exist (such notice to be provided by the
Administrative Agent promptly upon written notice of the Majority Lenders that the circumstances giving rise to such LIBOR Unavailability Notice have ceased to exist). Upon the
Borrower’s receipt of a LIBOR Unavailability Notice, the Borrower may revoke any pending request for an Advance.
(g) Effect of Benchmark Transition Event.
(i) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Transaction Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Borrower so long as the
Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Majority Lenders. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Majority Lenders have delivered to the Administrative Agent written notice that such Majority Lenders accept such amendment. No replacement of LIBOR with a Benchmark Replacement pursuant to this Section 2.11(g) will occur prior to the applicable Benchmark Transition Start Date.
(ii) In the event that LIBOR is phased out, and a new benchmark is established or administered by the Financial Conduct Authority or ICE Benchmark Administration or other comparable authority, and such new benchmark with a three-month
maturity is readily available through Bloomberg or a comparable medium, then the Administrative Agent shall utilize such new benchmark with a three-month maturity for all purposes hereof in place of LIBOR.Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative 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 Transaction Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other
party to this Agreement.
(iii) If a LIBOR Unavailability Notice has been delivered but not rescinded, LIBOR cannot be determined or has been phased out and no new benchmark under clause (ii) has been established, the Administrative Agent and the Borrower shall endeavor to designate a comparable alternative benchmark (the “Alternative Rate”), which may include reference to the arithmetic average of
the rates of interest per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds are offered to the Administrative Agent at 11:00 a.m. (London, England time) two (2)
London business days before the beginning of such three-month period by three (3) or more major banks in the interbank Eurodollar market selected by the Administrative Agent for delivery on the first day of and for a period equal to such
three-month period and in an amount equal or comparable to the principal amount of the portion of the Advance on which “LIBOR” is being calculated, and shall give notice thereof to the Borrower by telephone, facsimile, or other electronic means as
promptly as practicable thereafter and, untilNotices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the
Lenders of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the implementation of any Benchmark Replacement, (iii)
the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent notifies the Borrower that the circumstances giving rise to the determination of the Alternative Rate no longer exist or that LIBOR can be determined or a new benchmark under clause (ii) has been established,
all calculations of interest by reference to LIBOR hereunder shall instead be made by reference to the Alternative Rate. or Lenders pursuant
to this Section 2.11(g), 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 2.11(g).
(h)
(g) Illegality. Notwithstanding any other provision of this Agreement, in the event that any Lender shall have reasonably determined in good faith that any Change in Law shall make it
unlawful for such Lender to fund or maintain any Advance by compliance by such Lender in good faith with any Law, then such Lender shall promptly notify the Administrative Agent and the Borrower, following which (ai) such Lender’s obligation to fund any Advance shall be suspended until such time as such Lender may again fund and maintain its Advances hereunder, (bii) if a Notice of Borrowing has been submitted pursuant to Section 2.4(a) but the affected Advance has not been funded, the
Borrower may revoke such Notice of Borrowing by giving written notice to the Administrative Agent thereof on the same day that the Borrower was notified by the Lender pursuant to this Section 2.11(gh) and (ciii) if such Law shall so mandate, such
Lender’s outstanding Advances shall be prepaid by the Borrower, together with accrued and unpaid interest thereon and all other amounts payable by the Borrower to such Lender under this Agreement, on the last day of the Interest Accrual Period with
respect to such Advances (or before such date as shall be mandated by such Law), it being acknowledged that any amounts prepaid pursuant to clause (c) above may be paid with an Advance or Advances made with an interest rate calculated pursuantby reference to the Alternative Rate.
Section 2.12 Payments and Computations. (a) The Borrower (through the Administrative Agent pursuant to Section 2.7) shall make each payment and prepayment hereunder and under the Loan Notes in respect of principal, interest, expenses, indemnities, fees or other Obligations due from the Borrower to the Administrative Agent or any Lender not later than 3:00 P.M. (New York City time) on the day when due in U.S. Dollars to the Administrative Agent at its address referred to in Section 10.3 or to the Administrative Agent’s Account in immediately available, same-day funds. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the other Transaction Documents to more than one Lender, then to such Lenders ratably in accordance with the amounts of such respective Obligations then payable to such Lenders and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender, then to such Lender, in each case to be applied in accordance with Section 2.7. All computations of interest based on LIBOR shall be made by the Administrative Agent on the basis of a year of 360 days in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. All computations of interest based on the Alternative Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(b) All payments to be made in respect of fees due hereunder to the Administrative Agent or any Lender from the Borrower shall be made pursuant to Section 2.7, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other deduction of any nature (other than with respect to Taxes pursuant to Section 2.15), and an action therefor shall immediately accrue.
Section 2.13 Payment on Non-Business Days. Whenever any payment hereunder or under the Loan Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.
Section 2.14 Extension of Availability Period. (a) The Borrower may, by notice to the Administrative Agent following the two year anniversary of the Closing Date, request the Administrative Agent to extend the Availability Period End Date.
(b) The Administrative Agent, with the written consent of each Lender (other than any Defaulting Lender), shall advise the Borrower whether the Lenders agree to any requested extension of the Availability Period End Date within thirty (30) days after the Borrower has given notice to the Administrative Agent that it requests an extension of the Availability Period End Date; provided, that if the Lenders do not agree to any requested extension, the Borrower may renew its request for an extension at any time or from time to time prior to the end of the Availability Period End Date then in effect; provided further, that the Administrative Agent’s failure to respond within such period shall constitute the Administrative Agent’s denial of the requested extension.
(c) Any such request to extend the Availability Period End Date shall be effective only upon the written agreement of the Administrative Agent, the Lenders, the Borrower, and the Guarantor. Upon entering into such written agreement, the date referenced in the definition of “Availability Period End Date” shall be automatically extended for the amount of time agreed to by the Administrative Agent, the Lenders, the Borrower, and the Guarantor. This Section shall supersede any provisions in Section 10.2 to the contrary.
Section 2.15 Taxes.
(a) Defined Terms. For purposes of this Section 2.15 the term “applicable Law” includes FATCA.
(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Transaction Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by
the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d) Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Recipient (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Recipient, shall be conclusive absent manifest error.
(e) Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.8 relating to the maintenance of the Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Transaction Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 2.15(e).
(f) Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.15, the Borrower shall deliver to the Administrative Agent 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 the Administrative Agent.
(g) Status of Recipients.
(i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall
deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.15(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.
(ii) Without limiting the generality of the foregoing,
(A) any Recipient that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Recipient is exempt from U.S. federal backup withholding tax;
(B) any Recipient that is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the Borrower or Administrative Agent) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of a Recipient claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Transaction Document, executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Transaction Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed originals of IRS Form W-8ECI;
(3) in the case of a Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate (in a form reasonably acceptable to the Borrower) to the effect that such Recipient is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable; or
(4) to the extent a Recipient is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9 or other certification documents from each beneficial owner, as applicable; provided that if the Recipient is a partnership and one or more direct or indirect partners of such Recipient are claiming the portfolio interest exemption, such Recipient may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
(C) any Recipient which is not a U.S. Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Recipient under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Recipient shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (d), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h) [Reserved].
(i) Treatment of Certain Refunds. If any party determines, in its sole 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 2.15 (including by the payment of additional amounts pursuant to this Section 2.15), it shall pay to the indemnifying party 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 such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.15(i) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.15(i), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.15(i) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party 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 or additional amounts with respect to such Tax had never been paid. This Section 2.15(i) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(j) Survival. Each party’s obligations under this Section 2.15 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.
Section 2.16 Defaulting Lenders. (a) Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(i) The Non-Usage Fee shall cease to accrue on the Commitment of such Defaulting Lender pursuant to Section 2.5; and
(ii) the CommitmentCommitments and Advances of such Defaulting Lender shall not be included in determining whether all Lenders, the Supermajority Lenders or the Majority Lenders, as applicable, have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section
10.2); provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such
Defaulting Lender.
(b) If the Borrower and the
Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent shall so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth
therein, that Lender shall purchase at par such of the Advances of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Advances in accordance with its Applicable
PercentageCommitment, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender having been a Defaulting Lender.
Section 2.17 Security Interest. (a) Subject to the terms of the Initial Acknowledgment Agreement and the Acknowledgment Agreements (as applicable), the Borrower hereby grants, pledges and assigns to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) as security for the payment and performance by the Borrower of the Obligations, a security interest in all of the Borrower’s right, title and interest in, to and under, in any case, whether now held or hereafter acquired (i) all Fannie Mae MSRs; (ii) all Freddie Mac MSRs; (iii) all Ginnie Mae MSRs; (iv) the Borrower’s rights (but not its obligations) under the Transaction Documents including without limitation, any rights to receive payments thereunder or any rights to collateral thereunder whether now held or hereafter acquired, now existing or hereafter created; (v) all collateral however defined or described under the Transaction Documents to the extent not otherwise included above; (vi) all Related Security; (vii) [reserved]; (viii) all Records relating to and all proceeds of the foregoing (collectively, (i)-(viii), the “MSR Collateral”), and (ix) all Additional Collateral (collectively, the “Borrower Collateral”). Notwithstanding anything herein to the contrary, the term “Borrower Collateral” shall not include, and the grant, pledge and assignment of a security interest contained in this Section 2.17 shall not include a security interest in any Excluded Collateral.
(b) Additionally, the Guarantor hereby grants, pledges and assigns to the Administrative Agent (on behalf of and for the ratable benefit of each Secured Party) as security for the payment and performance by the Borrower of the Obligations and the Guarantor of the Guaranteed Obligations, a security interest in all of the Guarantor’s right, title and interest in, to and under, in any case, whether now owned or hereafter acquired, all Additional Guarantor Collateral (together with the Borrower Collateral, the “Collateral”). For the avoidance of doubt, each grant, pledge, or assignment of the Collateral hereunder shall, subject to the rights of Freddie Mac under the Initial Freddie Mac Acknowledgment Agreement and the Freddie Mac Acknowledgment Agreement (as applicable), include all of the Borrower’s and Guarantor’s rights, but not its obligations, with respect to such Collateral.
(c) The parties acknowledge that the Agencies have certain rights under the Initial Acknowledgment Agreement and Acknowledgment Agreements (as applicable), including the right to cause the Borrower to transfer servicing to a transferee servicer under certain circumstances as more particularly set forth therein. The transferee servicer shall have all the rights and remedies against the Borrower and the Collateral as set forth herein and under the UCC.
(d) [Reserved.]
(e) Each of the Borrower and the Guarantor will promptly, at its respective expense, execute and deliver such instruments, financing and continuation statements and documents and take such other actions as the Administrative Agent may reasonably request from
time to time in order to perfect, protect, evidence, exercise and enforce the Administrative Agent’s and each Lender’s interests, rights and remedies under and with respect to the Transaction Documents, the Advances and the Assets. To the extent the Borrower or the Guarantor has filed or caused the filing of any document as provided above, the Borrower or the Guarantor, as applicable, shall deliver to the Administrative Agent file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing.
(f) If the Borrower fails to perform any of its Obligations, then the Administrative Agent may (but shall not be required to) perform or cause to be performed such Obligation, and the costs and expenses incurred by the Administrative Agent in connection therewith shall be payable by the Borrower. Without limiting the generality of the foregoing, if the Borrower fails to perform any of its Obligations, the Borrower authorizes the Administrative Agent, at the option of the Administrative Agent and the expense of the Borrower, at any time and from time to time, to take all actions and pay all amounts that the Administrative Agent reasonably deems necessary or appropriate to protect, enforce, preserve, insure, service, administer, manage, perform, maintain, safeguard, collect or realize on the Assets, including the right to liquidate the Assets, and the Administrative Agent’s Liens and interests therein or thereon and to give effect to the intent of the Transaction Documents. No Potential Event of Default or Event of Default shall be cured by the payment or performance of any Obligation by the Administrative Agent on behalf of the Borrower. The Administrative Agent may make any such payment in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, Tax Lien, title or claim except to the extent such payment is being contested in good faith by the Borrower in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.
(g) Upon termination of this Agreement and payment in full of all Obligations (other than contingent obligations not then due), Administrative Agent shall release its security interests in the Collateral and promptly file termination statements with respect to each financing statement filed pursuant to this Section 2.17 and take such other action as may reasonably be requested by the Borrower or Guarantor to evidence such release. If evidence of filing such termination statements has not been delivered to the Borrower or Guarantor, as applicable, within ten (10) days of termination of this Agreement and payment in full of all Obligations (other than contingent obligations not then due), the Administrative Agent hereby authorizes the Borrower or the Guarantor, as applicable, to file such termination statements.
Section 2.18 Limited Pledge of Fannie Mae Servicing. Notwithstanding anything to the contrary contained herein or in any of the other Transaction Documents, the pledge of the Borrower’s right, title and interest in the Fannie Mae MSRs under the Fannie Mae Lender Contract identified on the Schedule of Assets shall only secure the Borrower’s indebtedness and obligations to the Administrative Agent and each Lender incurred for (i) the purposes of securing (a) a warehouse line of credit and used for one of the purposes set forth in clauses (b) or (c), (b) a loan whose proceeds have been or will be used to acquire or retain through its origination activities rights in the Fannie Mae Lender Contract in accordance with the
provisions of the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide by the Borrower, (c) a loan whose proceeds have been or will be used to purchase from another mortgage banking company the contract right to service Mortgage Loans, or to purchase assets of, or stock issued by, such company, or (ii) any other purpose which Fannie Mae, in its sole and absolute discretion, considers to be consistent with the purposes of the Fannie Mae Acknowledgment Agreement to be executed among the Borrower, the Administrative Agent and Fannie Mae; provided, that the foregoing provisions of this paragraph shall be deemed automatically supplemented or amended if and to the extent Fannie Mae supplements or amends the corresponding requirement, whether in its rules, regulations, guides, Fannie Mae Lender Contract, Fannie Mae Acknowledgment Agreement or published announcements or otherwise waives or grants exceptions from such requirement, and in each instance, with the same substantive force and effect; and provided further that the security interest created hereby is and shall be subject to the following condition and such provision below shall be included in each financing statement filed in respect hereof (defined terms used below shall have the meaning set forth in the Fannie Mae Acknowledgment Agreement):
“The Security Interest described in this financing statement is subordinate to all rights of Fannie Mae under (i) the terms of an Acknowledgment Agreement, with respect to the Security Interest among Fannie Mae, Home Point Financial Corporation (the “Debtor”) and Goldman Sachs Bank USA, as Administrative Agent for Lenders and (ii) the Mortgage Selling and Servicing Contract, the Fannie Mae Selling Guide, the Fannie Mae Servicing Guide and all supplemental servicing instructions or directives provided by Fannie Mae, all applicable master agreements, recourse agreements, repurchase agreements, indemnification agreements, loss-sharing agreements, and any other agreements between Fannie Mae and the Debtor, and all as amended, restated or supplemented from time to time (collectively, the “Fannie Mae Lender Contract”), which rights include the right of Fannie Mae to terminate the Fannie Mae Lender Contract with or without cause and the right to sell, or have transferred, the Servicing Rights.”
Section 2.19 Limited Pledge of Freddie Mac Servicing. Notwithstanding anything to the contrary contained herein or in any of the other Transaction Documents, the pledge of the Borrower’s right, title and interest in the Freddie Mac MSRs under the Freddie Mac Servicing Contract identified on the Schedule of Assets shall only secure the Borrower’s indebtedness and obligations to the Administrative Agent and each Lender incurred for the following limited purposes: (i) to fund the Borrower’s purchase of additional servicing portfolios; (ii) to effect the Borrower’s purchase of a mortgage banking company; (iii) to fund the Borrower’s working capital consistent with its residential mortgage business operations or (iv) any other purpose which Freddie Mac, in its sole and absolute discretion, considers to be consistent with the purposes of the Initial Freddie Mac Acknowledgment Agreement or the Freddie Mac Acknowledgment Agreement, as applicable; provided, that the foregoing provisions of this paragraph shall be deemed automatically supplemented or amended if and to the extent
Freddie Mac supplements or amends the corresponding requirement, whether in its rules, regulations, guides, Freddie Mac Servicing Contract, Initial Freddie Mac Acknowledgment Agreement, Freddie Mac Acknowledgment Agreement or published announcements or otherwise waives or grants exceptions from such requirement, and in each instance, with the same substantive force and effect; and provided further that the security interest created hereby shall, following execution of the Initial Freddie Mac Acknowledgment Agreement, and the Freddie Mac Acknowledgment Agreement, as applicable be subject to the following condition and such provision below shall be included in each financing statement filed in respect hereof after execution of the Initial Freddie Mac Acknowledgment Agreement and the Freddie Mac Acknowledgment Agreement, as applicable (defined terms used below shall have the meaning set forth in the Initial Freddie Mac Acknowledgment Agreement and the Freddie Mac Acknowledgment Agreement, once executed):
“Notwithstanding anything to the contrary herein, the security interest publicized or perfected by this financing statement is subject and subordinate in each and every respect (a) to all rights, powers and prerogatives of the Federal Home Loan Mortgage Corporation (“Freddie Mac”) under and in connection with the Purchase Documents, as that term is defined in the Freddie Mac Single-Family Seller/Servicer Guide, which rights include, without limitation, the right of Freddie Mac to disqualify (in whole or in part) the debtor named herein as an approved Freddie Mac Seller/Servicer, with or without cause, and the right to terminate (in whole or in part) the unitary, indivisible master servicing contract and to transfer and sell all or any portion of said servicing contract rights, as provided in the Purchase Documents; and (b) to all claims of Freddie Mac arising out of or relating to any and all breaches, defaults and outstanding obligations of the debtor to Freddie Mac.”
Section 2.20 Limited Pledge of Ginnie Mae Servicing. The Administrative Agent and each additional Lender acknowledge and agree that (x) the Borrower is entitled to servicing income with respect to a given mortgage pool only so long as Borrower is a Ginnie Mae approved issuer; (y) upon the Borrower’s loss of such approved issuer status, the Administrative Agent and each additional Lender’s rights to any servicing income related to a given mortgage pool also terminate; and (z) the pledge of the Borrower’s rights to servicing income conveys no rights (such as a right to become a substitute servicer or issuer) that are not otherwise specifically provided for in the Ginnie Mae Contract, provided that this sentence shall automatically be deemed amended or modified if and to the extent Ginnie Mae amends the Ginnie Mae Contract, the applicable Acknowledgment Agreement, if any, or published announcements and provided further that the security interest created hereby is subject to the following provision to be included in each financing statement filed in respect hereof:
Notwithstanding anything to the contrary set forth herein:
(a) The property subject to the security interest reflected in this instrument includes all of the right, title and interest of Home Point Financial Corporation (“Debtor”) in certain mortgages and/or participation interests related to such mortgages (“Pooled Mortgages”), and pooled under the mortgage-backed securities program of the Government National Mortgage Association (“Ginnie Mae”), pursuant to section 306(g) of the National Housing Act, 12 U.S.C. § 1721(g);
(b) To the extent that the security interest reflected in this instrument relates in any way to the Pooled Mortgages, such security interest is subject and subordinate to all rights, powers and prerogatives of Ginnie Mae, whether now existing or hereafter arising, under and in connection with: (i) 12 U.S.C. § 1721(g) and any implementing regulations; (ii) the terms and conditions of that certain Acknowledgment Agreement, dated as of July 11, 2019, with respect to the Security Interest, by and among Ginnie Mae, Debtor and Goldman Sachs Bank USA, as administrative agent; (iii) applicable Guaranty Agreements and contractual agreements between Ginnie Mae and the Debtor; and (iv) the Ginnie Mae Mortgage-Backed Securities Guide, Handbook 5500.3 Rev. 1, and other applicable guides (items (i), (iii) and (iv), collectively, the “Ginnie Mae Contract”);
(c) Such rights, powers and prerogatives of Ginnie Mae include, but are not limited to, Ginnie Mae’s right, by issuing a letter of extinguishment to Debtor, to effect and complete the extinguishment of all redemption, equitable, legal or other right, title or interest of the Debtor in the Pooled Mortgages, in which event the security interest as it relates in any way to the Pooled Mortgages shall instantly and automatically be extinguished as well; and
(d) For purposes of clarification, “subject and subordinate” in clause (2) above means, among other things, that any cash held by Goldman Sachs Bank USA as collateral and any cash proceeds received by Goldman Sachs Bank USA in respect of any sale or other disposition of, collection from, or other realization upon, all or any part of the collateral may only be applied by Goldman Sachs Bank USA to the extent that such proceeds have been received by, or for the account of, the Debtor free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines; provided that this clause (4) shall not be interpreted as establishing rights in favor of Ginnie Mae except to the extent that such rights are reflected in, or arise under, the Ginnie Mae Contract.
Section 2.21 Commitment Increase. Following execution of Acknowledgment Agreements with all Agencies, the Borrower may request an increase to the Aggregate Commitment, provided that any such request shall be subject to the following conditions: (a) any such increase of the Aggregate Commitment will be effective only upon the written agreement of the Administrative Agent, the applicable Lenders that will commit to the increase, the Borrower, and the Guarantor, and (b) the Administrative Agent shall have the right to elect to take all or any portion of the amount of such requested increase notwithstanding its percentage of the Aggregate Commitment at the time of such request. The Administrative Agent will respond to any such request, on behalf of the applicable Lenders, within fifteen (15) Business Days; provided, that the Administrative Agent’s failure to respond within such period shall be deemed to be a rejection of the requested increase. In the event that an increase requested in accordance with the terms of this Section 2.21 shall be rejected, or deemed rejected, then an additional Lender identified by the
Borrower may be made party to this Agreement; provided, however, that (i) GS Bank shall retain majority voting rights hereunder, and (ii) the addition of such Lender must be consented to in writing by the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed).
Section 2.22 Base Servicing Fee Increases. Upon written notice to the Borrower by any Agency of the need to improve or maintain adequate performance of servicing activities or to comply with the applicable Agency Requirements, the Borrower shall deliver such notice to the Administrative Agent within five (5) Business Days of receipt. Such notice from the Borrower shall include a request to increase the Base Servicing Fee Rate. The Base Servicing Fee Rate shall be adjusted to address the necessary additional costs required to comply with such notice from the applicable Agency. The Base Servicing Fee Rate shall become effective on the next Monthly Payment Date, but no less than thirty (30) days after delivery of such notice from Borrower to the Administrative Agent and no more than sixty (60) days from the date of delivery of such notice from such Agency. Upon request therefor by the Administrative Agent, the Borrower shall deliver to the Administrative Agent a written notice setting forth in reasonable detail the basis for any such proposed increase.
ARTICLE IIIARTICLE III
CONDITIONS OF LENDING AND CLOSING
Section 3.1 Conditions Precedent to Closing. The effectiveness of this Agreement and the obligations of the parties hereto are subject to the condition precedent that the Lenders shall have received or waived receipt of the following on or prior to the Closing Date (unless otherwise noted):
(a) Transaction Documents and other Closing Documents. Each of the Transaction Documents (other than the Freddie Mac Acknowledgment Agreement and the Ginnie Mae Acknowledgment Agreement) shall be executed on or before the Closing Date, shall be in full force and effect and all consents, waivers and approvals necessary for the consummation of the transactions contemplated thereby shall have been obtained and shall be in full force and effect, and the Administrative Agent shall have received a duly executed counterpart thereof; provided that, to the extent the Borrower has used commercially reasonable efforts to obtain the Account Control Agreement prior to the Closing Date and is unable to do so without undue burden or expense, the Account Control Agreement may be delivered no later than thirty (30) days (or such later date as may be reasonably agreed by the Administrative Agent) after the Closing Date.
(b) Receipt of Loan Notes. The Administrative Agent shall have received a duly executed Loan Note for each Lender that has requested the same.
(c) Reserved.
(d) Know Your Customer Information. The Administrative Agent shall have received all documentation and other information required by regulatory authorities under
applicable “Know Your Customer” and anti-money laundering rules and regulations, including the Patriot Act.
(e) Payment of Fees. On or prior to the Closing Date, the Borrower shall have paid all fees, including the Upfront Fee, previously agreed in writing to be paid on or prior to the Closing Date.
(f) Enforceability of Loan Note. Each Loan Note shall be entitled to the benefit of the security provided herein and shall constitute the legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally or general principals of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)).
(g) Evidence of Insurance. The Administrative Agent shall have received certification evidencing coverage under the insurance policies referred to in Section 5.1(w) and evidence that the Borrower and the Guarantor have added Administrative Agent as an additional loss payee under the insurance policies referred to in Section 5.1(w).
(h) Security Interest. Evidence that all other actions necessary or, in the opinion of Administrative Agent, desirable to perfect and protect Administrative Agent’s interest in the Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.
(i) Organizational Documents. A certificate of the corporate secretary of the Borrower and of the Guarantor in form and substance acceptable to Administrative Agent, attaching certified copies of the Borrower’s and the Guarantor’s charter, bylaws and corporate resolutions approving the Transaction 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 Transaction Documents.
(j) Good Standing Certificate. A certified copy of a good standing certificate or equivalent from the jurisdiction of organization of the Borrower and the Guarantor, dated no earlier than the date ten (10) Business Days prior to the Closing Date.
(k) Incumbency Certificate. An incumbency certificate of the corporate secretary of the Borrower and of the Guarantor, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Transaction Documents.
(l) Due Diligence Review. The Administrative Agent shall have completed, to its satisfaction, its due diligence review of the Borrower, the Guarantor, the Assets, the Agencies and such other matters as the Administrative Agent and the Lenders shall have
determined in the exercise of their reasonable discretion are necessary and proper for the execution, deliver and performance under this Agreement and the Transaction Documents.
(m) Legal Opinions. The Administrative Agent shall have received usual and customary legal opinions in form and substance satisfactory to Administrative Agent and its counsel (including, but not limited to, those regarding corporate matters, enforceability and security interest perfection).
Section 3.2 Conditions Precedent to All Advances. The obligation of each Lender to make or participate in each Advance (including the initial Advances hereunder) shall be subject, at the time thereof, to the satisfaction of the following conditions:
(a) Representations and Warranties. All of the representations and warranties of the Borrower and of the Guarantor contained in this Agreement and the other Transaction Documents shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) with the same effect as though such representations and warranties had been made on and as of the date of such Advance, 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 (except for those representations and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date when made or for the respective period, as the case may be.
(b) No Event of Default; No Potential Event of Default. No Potential Event of Default or Event of Default has occurred and is continuing or would occur or be continuing immediately after giving effect to such Advance.
(c) [Reserved].
(d) No Borrowing Base Deficiency or Funding Base Deficiency. No Borrowing Base Deficiency or Funding Base Deficiency shall exist immediately prior and after giving effect to such Transaction.
(e) Availability Period. The Availability Period shall not have terminated, nor shall it have terminated immediately after giving effect to such Advance.
(f) Notice of Borrowing. In accordance with Section 2.4, the Administrative Agent shall have received a properly completed Notice of Borrowing and a Borrowing Base Certificate, including a Schedule of Assets and a Schedule of Ineligible Assets from the Borrower.
(g) Requirements of Law. None of the Administrative Agent or any Lender shall have determined that the introduction of any Applicable Law or a Change in Law or in the interpretation or administration of any Applicable Law applicable to the Administrative Agent or such Lender has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for the Administrative Agent or such Lender to make any Advance.
(h) No Material Adverse Change. Since the Closing Date, there has been no Material Adverse Change.
(i) Fees. EachThe Administrative Agent and each Lender shall have received payment in full of all fees and expenses which are due and payable
hereunder to the Administrative Agent or such Lender on or before such date.__
(j) Maximum Draw. After the Closing Date and the initial Advance, no more than [***] of the Aggregate Commitment may be drawn in any rolling thirty (30) day period, unless otherwise agreed by the Administrative Agent.
ARTICLE IVARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Borrower and the Guarantor. Each of the Borrower and the Guarantor represents and warrants to the Administrative Agent and each Lender as of the Closing Date, as of each Borrowing Date and as of each Monthly Payment Date, as follows:
(a) Organization; Corporate Powers. Each of the Borrower and the Guarantor (i) is a duly organized and validly existing corporation, in good standing under the laws of the State of New Jersey and the State of Delaware, as applicable, (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.
(b) Authority and Enforceability. Each of the Borrower and the Guarantor has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is party and has taken all necessary company or other organizational action to authorize the execution, delivery and performance of the Transaction Documents to which it is party. Each of the Borrower and the Guarantor has duly executed and delivered each Transaction Document to which it is party and each Transaction Document 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) Equity Interests and Ownership. Schedule 4.1(c) correctly sets forth the ownership interest of the Borrower, the Guarantor, and each of their Subsidiaries in their respective Subsidiaries as of the Closing Date. Except as set forth on Schedule 4.1(c), as of the Closing Date, there is no existing option, warrant, call, right, commitment or other agreement to which the Borrower or the Guarantor is a party requiring, and there is no membership interest or
other Equity Interests of the Borrower or the Guarantor outstanding which upon conversion, exchange or exercise would require, the issuance by the Borrower or the Guarantor of any additional membership interests or other Equity Interests of the Borrower or the Guarantor or other Securities convertible into or exchangeable or exercisable for or evidencing the right to subscribe for or purchase, a membership interest or other Equity Interests of the Borrower or the Guarantor, and no Securities or obligations evidencing any such rights are authorized, issued or outstanding.
(d) No Conflict. The execution, delivery and performance by each of the Borrower and the Guarantor of the Transaction Documents to which it is a party and the consummation of the transactions contemplated by the Transaction Documents do not and shall not (a) violate (i) any Applicable Law which violation would reasonably be expected to have a Material Adverse Effect, (ii) any of the organizational documents of the Borrower or the Guarantor, (iii) any order, judgment, injunction or decree of any court or other agency of government binding on the Borrower or the 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 the Borrower or the 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 the Borrower or the Guarantor (other than any Liens created under any of the Transaction Documents in favor of the Administrative Agent on behalf of the Secured Parties); or (c) require any approval of stockholders, members or partners or any approval or consent of any Person under any material contractual obligation of the Borrower or the Guarantor, except for such approvals or consents which have been obtained on or before the Closing Date.
(e) 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 the Borrower or the Guarantor of any Transaction Document to which it is a party or any of its obligations thereunder or (ii) the legality, validity, binding effect or enforceability of any Transaction Document to which the Borrower or the Guarantor is a party.
(f) Solvency. Each of the
Borrower and the 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. Neither Borrower andnor the
Guarantor neither intend 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. Neither the Borrower nor the Guarantor is selling and/or pledging any Assets with any intent to hinder,
delay or defraud any of its creditors.
(g) True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of the Borrower, the Guarantor, or any Affiliate
thereof furnished or to be furnished to the Administrative Agent in connection with the initial or any ongoing due diligence of the Borrower, the Guarantor, or any Affiliate thereof, or the negotiation, preparation, or delivery of the Transaction Documents, 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 Administrative Agent or any Lender by or on behalf of the Borrower, the 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, the Borrower 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.
(h) Financial Statements. The
financial statements of the Borrower and of the Guarantor delivered to the Administrative Agent on or prior to the Closing Date fairly present in all material respects on a consolidated basis the assets, liabilities and financial position of the
Borrower and the 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 the Administrative Agent) consist of copies of (ai) each of the Borrower’s and Guarantor’s balance sheets for the fiscal years of Borrower and Guarantor ended December 31, 2016 and December 31, 2017 and the related statements
of income, cash flows, and shareholders’ equity for Borrower and Guarantor for such fiscal years, with the opinion thereon of Borrower’s and Guarantor’s independent accountants and (bii) the Borrower’s balance sheet for the quarterly fiscal period of Borrower ended September 30, 2018 and the related statement of income for the Borrower for such quarterly
fiscal period. All such financial statements are complete and correct and fairly present, in all material respects, the financial condition of the Borrower and the 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 of the Borrower and the Guarantor, there has been no Material Adverse Change in the consolidated
business, operations or financial condition of the Borrower or the Guarantor from that set forth in such financial statements nor is the Borrower or the Guarantor aware of any state of facts which (with notice or the lapse of time) would or could
result in any such Material Adverse Change. The Borrower and the Guarantor each have, on the date of the statements delivered pursuant to this clause (h) 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 the Borrower or the Guarantor except as heretofore disclosed to the Administrative Agent in writing.
(i) Litigation. There is no action, proceeding or investigation pending involving the Borrower or the Guarantor or, to the best of its knowledge, threatened against the Borrower or the Guarantor before any Governmental Authority or Agency (A) asserting the invalidity of this Agreement, any Transaction Document or any transaction contemplated hereunder, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, any Transaction Document or any transaction contemplated hereunder, (C) making a claim individually or in the aggregate that would reasonably be expected to result in a Material Adverse Effect if adversely determined, (D) which requires filing with the SEC in accordance with the Exchange Act or any rules thereunder or (E) which might materially and adversely affect the validity of the Assets, the Servicing Contracts or the performance by it of its obligations under, or the validity or enforceability of, this Agreement, any Transaction Document or any Transaction contemplated hereunder.
(j) Use of Proceeds. Each TransactionAdvance will be used to (A) purchase, in the ordinary course of business, Agency eligible MSRs and related assets,
(B) pay certain fees and expenses incurred in connection with the establishment of the credit facility set forth in this Agreement, (C) subject to the provisions of Section 2.19, make cash distributions from time to time pursuant to Section
5.2(d) in an amount not exceeding the excess of the Borrowing Base over the outstanding principal amount of the Advances and (D) for general corporate purposes. The Borrower will only use the proceeds of any Advance as permitted under Section
2.3. No part of the proceeds of any Advance 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 the Borrower nor the 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 the Borrower or the 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. The Borrower 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 any Lender, as such term is defined in 12 C.F.R. Part 223.
(k) Accounts. The account number of the Borrower’s Account is specified on Schedule I attached hereto, as updated pursuant to Section 8.1. Borrower will keep the Collection Account and the Borrower’s Account segregated and such accounts will not be commingled.
(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 the Borrower nor the Guarantor is (i) an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans or (iii) holding assets that constitute “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101, as modified in application by Section 3(42) of ERISA.
(m) The Servicing Contracts. The Borrower has delivered to the Administrative Agent a copy of (x) each of the Servicing Contracts, the Initial Acknowledgment Agreement or Acknowledgment Agreements (as applicable) and (y) all amendments, restatements, supplements or other modifications thereto that could reasonably be expected to adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect, and the Borrower hereby certifies that the copies delivered to the Administrative Agent by the Borrower are true, correct and complete. Each such document to which the Borrower is a party has been duly executed and delivered by the Borrower and is in full force and effect, and no default or event of default (howsoever defined) has occurred and is continuing thereunder, except where the occurrence and continuance of such default or event of default would not reasonably be expected to result in a Material Adverse Effect.
(n) Forms of Servicing Contracts. Each of the Servicing Contracts have been executed on the respective Agency’s standard forms, which incorporates the related Agency Guide with no amendment to such Servicing Contract that would grant the related Agency additional or more favorable rights to terminate the servicer from those rights specified in the related Agency Guide.
(o) Taxes. Each of the Borrower, the Guarantor, and their respective Subsidiaries have duly and timely filed or caused to be duly and timely filed all material federal, state, provincial, territorial, foreign and other tax returns and reports required to be filed under applicable law, and has timely paid all material 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. 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.
(p) Agreements. None of the Borrower, the Guarantor, nor any Subsidiary of the Borrower is a party to any agreement, instrument, or indenture or subject to any restriction materially and adversely affecting its business, operations, assets or financial condition, except as disclosed in the financial statements described in Section 4.1(h). None of the Borrower, the Guarantor, nor any Subsidiary of the Borrower is 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 could have a Material Adverse Effect on the Borrower or the Guarantor. There are no breaches or defaults under the Transaction Documents to which it is a party or the Servicing Contracts. No holder of any indebtedness of the Borrower, the Guarantor, or any of their Subsidiaries has given notice of any asserted default thereunder.
(q) Other Indebtedness. All
Indebtedness (other than Indebtedness evidenced by this Agreement) of Borrower and of the Guarantor existing on the ClosingFirst
Amendment Effective Date is as described in Schedule 4.1(q).
(r) No Material Adverse Effect. Since September 30, 2018, there has been no event or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.
(s) Investment Company Act. Neither the Borrower nor the Guarantor is required to register as an “investment company” within the meaning of the 1940 Act. Borrower and Guarantor are relying on Section 3(c)(5)(c) or Section 3(c)(6) as the exemption from the definition of “investment company” of the 1940 Act.
(t) Covered Fund. Neither the Borrower nor the Guarantor is a “covered fund” under Section 13 of the Bank Holding Company Act of 1956, as amended.
(u) Properties; Security Interest. Each of the Borrower and Guarantor has good title to, valid leasehold interests in, or valid licenses to use, all of its properties and assets necessary in the ordinary conduct of its business, including all of the Collateral, and (i) the MSR Collateral is free and clear of Liens other than Permitted MSR Collateral Liens, and (ii) all other Collateral is free and clear of Liens other than Permitted Collateral Liens. Once executed and delivered, this Agreement creates, as security for the Obligations, a valid and enforceable and (coupled with the Account Control Agreement and the taking of all actions required hereunder and thereunder) perfected security interest in and Lien on all of the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, superior to and prior to the rights of all third persons and subject to no other Liens, except that the Collateral may be subject to the Agency Requirements.
(v) Environmental Matters. None of the Borrower, the 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 the Borrower nor the 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 the Borrower’s and the 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 the Borrower or the Guarantor that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. None of the Borrower, the Guarantor, or to their knowledge, any 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 the Borrower’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 could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. To each of the Borrower’s and Guarantor’s knowledge, no event or condition has occurred or is occurring with respect to the Borrower or the 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 Collateral or MSRs and, to the knowledge of the Borrower and the Guarantor, no conditions exist that would reasonably be expected to result in the imposition of such a Lien on any Collateral or MSRs.
(w) OFAC and PATRIOT Act. None of the Borrower, the Guarantor, nor any of their 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. Neither the Borrower nor the Guarantor conducts business or complete transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. Neither the Borrower nor the 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. Neither the Borrower nor the Guarantor is in violation of Executive Order No. 13224 or the PATRIOT Act.
(x) Foreign Corrupt Practices Act. None of the Borrower, the Guarantor, or any director, officer, agent or employee of the Borrower or Guarantor, has used any of the proceeds of any Advance (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 the Borrower 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.
(y) Servicing Contracts. Each Servicing Contract is in full force and effect, and Borrower has not been terminated as the servicer under any Servicing Contract.
(z) Risk Management Policy. The Borrower has duly adopted, in accordance with its internal risk policies, a risk management policy, which is in full force and effect. A copy of such risk management policy has been previously delivered to Administrative Agent (for distribution to Lenders), and certified by a Responsible Officer of the Borrower as being a true and correct copy in full force and effect.
(aa) Agency Approvals; Servicing Facilities. The Borrower has 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. The Borrower is approved by each of Fannie Mae and Freddie Mac as an approved seller/servicer, approved by Ginnie Mae as an approved issuer, and, to the extent necessary, approved by the Secretary of HUD pursuant to Sections 203 and 211 of the National Housing Act, as amended. In each such case, the Borrower is in good standing, with no event having occurred, including a change in insurance coverage which would either make the Borrower unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to any Agency or to HUD, FHA or VA. Should the Borrower for any reason cease to possess all such applicable approvals, or should notification to any Agency or to HUD, FHA or VA be required, the Borrower shall immediately notify Administrative Agent immediately in writing.
(bb) Representations Concerning the Collateral. (1) Neither the Borrower nor the Guarantor has assigned, pledged, conveyed, or encumbered any Collateral hereunder to any other Person (except to the extent any such pledge has been released prior to the grant of any security interest thereon hereunder), and immediately prior to the pledge of any such Collateral, the Borrower or the Guarantor, as applicable, was the sole owner of such Collateral and had good and marketable title thereto, free and clear of all Liens other than a first priority Lien in favor of the Administrative Agent.
(i) All information concerning all Collateral set forth on the Schedule of Assets were, are or will be (as applicable) pledged to the Administrative Agent, for the benefit of the Lenders will be complete and correct in all material respects as of the date of such Schedule of Assets.
(ii) Upon the filing of financing statements on Form UCC-1 naming the Administrative Agent as “Secured Party” and the Borrower or the Guarantor (as applicable) as “Debtor”, and describing the Collateral, in the appropriate jurisdictions, the Administrative Agent, for the benefit of the Lenders, will have a duly perfected first priority security interest under the UCC in all right, title, and interest of the Borrower and the Guarantor in, to and under, subject, in all cases, to the Agency Requirements, the Collateral to the extent a security interest therein can be perfected by a UCC filing.
(iii) All filings and other actions necessary to perfect the security interest in the Collateral created under this Agreement under the UCC have been duly made or taken and are in full force and effect. Subject to the Agency Requirements, the Borrower and the Guarantor are the legal and beneficial owners of the Collateral hereunder free and clear of any Lien, other than as permitted by and any rights retained by the Agencies pursuant to the Agency Requirements.
(iv) Subject only to the Agency Requirements, the Borrower and the Guarantor have the full right, power and authority to pledge the Collateral.
ARTICLE VARTICLE V
COVENANTS
Section 5.1 Affirmative Covenants. Each of the Borrower and the Guarantor covenants and agrees that, until each Loan Note and all other Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated:
(a) Financial Covenants.
(i) Minimum Liquidity. Each of the Borrower and its Subsidiaries and the Guarantor shall ensure that, as of the last day of each calendar month ending after the Closing Date, it has Cash and Cash Equivalents at such time in an amount not less than the greater of (i) [***], or (ii) such amount as is set forth in any repurchase
agreement or credit facility that the Borrower, the Guarantor, or any of their respective Subsidiaries has in place with any Person other than the Administrative Agent or an Affiliate of Administrative Agent (such amount, the “Minimum Liquidity Amount”).
(ii) Minimum Adjusted Tangible Net Worth. Each of the Borrower and its Subsidiaries and the Guarantor shall maintain, as of the last day of each calendar month ending after the Closing Date, Adjusted Tangible Net Worth not less than the greater of (i) [***], or (ii) such amount as is set forth in any repurchase agreement or credit facility that the Borrower, the Guarantor, or any of their respective Subsidiaries has in place with any Person other than the Administrative Agent or an Affiliate of Administrative Agent.
(iii) Corporate Debt to
Tangible Net Worth. Each of the Borrower and its SubsidariesSubsidiaries and the Guarantor shall maintain, as of
the last day of each calendar month ending after the Closing Date, a Corporate Debt to Tangible Net Worth Ratio not to exceed the lesser of (i) [***], or (ii) such amount as is set forth in any repurchase agreement or credit facility that the
Borrower, the Guarantor, or any of their respective Subsidiaries has in place with any Person other than the Administrative Agent or an Affiliate of Administrative Agent.
(b) Reporting Requirements. The Borrower and the Guarantor will furnish to the Administrative Agent for delivery to each Lender:
(i) within (aA) 120 days after the close of each fiscal year of the Borrower and the Guarantor, the unqualified audited consolidated
balance sheet of the Borrower and of the Guarantor and their 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 and (bB) 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 the Borrower and the Guarantor and their consolidated subsidiaries;
(ii) romptly, copies of any annual financial projections prepared by or on behalf of the Borrower or Guarantor and approved by the board of directors of the Borrower or Guarantor, as applicable;
(iii) [reserved]; and
(iv) at the time of
delivery of the financial statements described pursuant to clause (i), the Borrower and Guarantor shall deliver to the Administrative Agent and each Lender a Compliance Certificate that (aA) attaches an updated Schedule of Assets as of
the preceding fiscal quarter or date of such Advance and (bB) certifies that the representations and warranties set forth in Section 4.1 are true and correct on and as of the date of such certification; provided that, with the consent of the
Administrative Agent not to be unreasonably withheld the Borrower may, but shall not be obligated to, deliver to the Administrative Agent updated versions of the Schedule of Assets on a more frequent basis if it chooses to do so.
(c) Acknowledgment Agreements.
The BorrowersBorrower shall make commercially reasonable efforts to enter into the Acknowledgment Agreements with each
Agency as soon as possible. Such Acknowledgment Agreements shall be in form and substance reasonably satisfactory to the Lender.
(d) Servicing Contract and Acknowledgment Agreement Amendments. Within five (5) Business Days after a Responsible Officer of the Borrower or the Guarantor becomes aware of an amendment to the Servicing Contracts or the Initial Acknowledgment Agreement or any Acknowledgment Agreements (as applicable) that could reasonably be expected to materially and adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect, to the extent permitted by the applicable Agency, the Borrower shall deliver to the Administrative Agent for delivery to each Lender copies of any such amendments; provided that the Borrower shall cooperate with any requests by the Administrative Agent to deliver copies of each amendment, restatement, supplement or other modification to the Servicing Contracts or the Initial Acknowledgment Agreement or Acknowledgment Agreements (as applicable) that the Administrative Agent shall reasonably request, to the extent permitted by the applicable Agency.
(e) Change in Responsible Officer. Promptly, but in any event within ten (10) days after there is any change in any of the chief executive officer, chief financial officer, or the head of servicing operations of the Borrower or the Guarantor, the Borrower or the Guarantor, as applicable, shall notify the Administrative Agent thereof.
(f) Notice of Default. Promptly (but in any event within [***] upon a Responsible Officer of the Borrower or of the Guarantor obtaining knowledge (i) of any condition or event that constitutes an Event of Default or that notice has been given to the Borrower or the Guarantor with respect thereto; (ii) of any condition or event that constitutes an “event of default” under any Indebtedness 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 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, 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, Potential Event of Default, default, event or condition, and what action the Borrower and/or the Guarantor has taken, is taking and proposes to take with respect thereto.
(g) Maintenance of List Assets. Borrower shall at all times maintain a current list (which may be stored in electronic form) of all Assets.
(h) Records. Borrower shall collect and maintain or cause to be collected and maintained all Records relating to the Assets in accordance with industry custom and practice for assets similar to the Assets, including those maintained pursuant to Section 5.1(i), and all such Records shall be in the Borrower’s possession unless otherwise consented to in writing by the Administrative Agent. The Borrower will not allow any such papers, records or files that are an original or an only copy to leave the Borrower’s possession, except for individual items removed in connection with servicing a specific Mortgage Loan, in which event Borrower will obtain or cause to be obtained a bailee letter from a financially responsible person for any such paper, record or file. The Borrower will maintain all such Records in good and complete condition in accordance with industry practices for assets similar to the Assets and preserve them against loss.
(i) For so long as the Administrative Agent has an interest in or lien on any Asset, Borrower will hold or cause to be held all related Records in trust for the Administrative Agent. The Borrower shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Administrative Agent granted hereby.
(ii) Upon reasonable advance notice from the Administrative Agent, Borrower shall (x) make any and all such Records available to the Administrative Agent to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit the Administrative Agent or its authorized agents to discuss the affairs, finances and accounts of the Borrower with its chief operating officer, chief financial officer and the independent certified public accountants of the Borrower.
(i) Books. Borrower and Guarantor shall keep or cause to be kept in reasonable detail books and records of account of its assets and business.
(j) UCC Matters; Protection and Perfection of Security Interests. Each of the Borrower and the Guarantor agree promptly to notify the Administrative Agent in writing of any change (i) in its legal name, (ii) in its identity or type of organization or corporate structure or (iii) in the jurisdiction of its organization, in each case, within ten (10) days of such change. The Borrower and the Guarantor agree that from time to time, at the Borrower’s cost and expense, to promptly execute and deliver all further instruments and documents, and take all further action reasonably required by the Administrative Agent (a) to perfect, protect or more fully evidence the Administrative Agent’s security interest in the Assets acquired by the Borrower or (b) to enable the Administrative Agent to exercise or enforce any of its rights hereunder, under any other Transaction Document. Without limiting the Borrower’s obligation to do so, the Borrower and the 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 the Administrative Agent may reasonably require. Each of the Borrower and the Guarantor hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, naming the Borrower or the Guarantor as debtor, relative to all or any of the Collateral now existing or hereafter arising without the signature of the Borrower or the Guarantor where permitted by law. A carbon,
photographic or other reproduction of this Agreement, or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement.
(k) Access to Certain Documentation
and Information Regarding the Assets. The Borrower and Guarantor shall permit the Administrative Agent or its duly authorized representatives or independent contractors, upon reasonable advance notice to the Borrower or Guarantor, as applicable,
and subject to all applicable Agency procedures and restrictions, (i) access to documentation that the Borrower or Guarantor may possess regarding the Eligible Assets, (ii) to visit the Borrower or Guarantor, and to discuss its affairs, finances and
accounts (as they relate to their respective obligations under this Agreement and the other Transaction Documents) with the Borrower, the Guarantor, their respective officers, and independent accountants (subject to such accountants’ customary policies
and procedures) and (iii) to examine the books of account and records of the Borrower and the Guarantor, as they relate to the Assets, to make copies thereof or extracts therefrom, all at such reasonable times and during regular business hours of the
Borrower or the Guarantor (as applicable). The Administrative Agent may perform the functions set forth above no more than once per year for each of the Borrower and Guarantor, or at any time following a Potential Event of Default or an Event or
Default, at the Administrative Agent’s determination, and under any circumstance, at the cost and expense of the Borrower. Such representatives or independent contractors shall use commercially reasonable efforts to avoid interruption of the normal
business operations of the Borrower and Guarantor. Notwithstanding anything to the contrary in this Section 5.1(k), (iA)
the Borrower and Guarantor, will not be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non-financial trade secrets or nonfinancial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law
or any binding confidentiality agreement or (z) is subject to attorney-client or similar privilege or constitutes attorney work product and (iiB) so long as an Event of Default has not occurred, the Borrower and the Guarantor shall have the opportunity to participate in any discussions with the Borrower’s and the
Guarantor’s independent accountants.
(l) Existence and Rights;
Compliance with Laws; Agency Approvals. Each of the Borrower and the Guarantor shall (i) preserve and keep in full force and effect its corporate existence, and any material rights, permits, patents, franchises, licenses, approvals and
qualifications required for it to conduct its business activities, and (ii) 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, in all material respects, with Accepted Servicing Practice sand the terms of the Servicing Contracts. Each of the Borrower and the 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. The Borrower shall maintain its status with each Agency as an approved seller/servicer, and shall be in good standing with each Agency
in accordance with Applicable Law and all rules, policies, procedures and standards of such Agency (collectively, “Agency Approvals”). The Borrower shall service all Assets in accordance with the Agency Guides in all material respects. Should
the Borrower, (iA) receive written notice of any default or notice of termination of servicing for cause under a
Servicing
Contract, or (iiB) for any reason,
cease to possess all such applicable Agency Approvals, or should notification to the relevant Agency or to HUD, FHA or VA as described in Section 4.1(aa) be required, the Borrower shall so notify Administrative Agent in writing within three (3)
Business Days. Notwithstanding the preceding sentence, the Borrower shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement.
(m) Taxes. Each of the Guarantor, the Borrower and its Subsidiaries shall duly and timely file or cause to be duly and timely filed, all material federal, state, provincial, territorial, foreign and other income Tax returns and all other material 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 Administrative Agent if requested; provided that neither the Borrower nor the 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 Collateral to satisfy such Tax.
(n) Maintenance of Properties. Each of the Borrower and the 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 could not reasonably be expected to have a Material Adverse Effect.
(o) Servicing Portfolio. Borrower shall not permit the Portfolio Delinquency Rate with respect to any three-month period for its Fannie Mae or Freddie Mac servicing portfolios to exceed [***]. Borrower shall not permit the Portfolio Delinquency Rate with respect to any three-month period for its Ginnie Mae servicing portfolios to exceed [***].
(p) Trigger Event Asset Sale. The Borrower shall, within one (1) Business Day notify the Administrative Agent in the event that it has voluntarily relinquished or delivered notice of its intent to sell or transfer Servicing Contract rights constituting more than [***] of the aggregate Servicing Contract rights of the Borrower with respect to any Agency, in any event without the Administrative Agent’s prior express written consent.
(q) [Reserved].
(r) Modification of the Servicing Contracts. Unless required by an Agency or to the extent necessary to maintain Agency Approvals pursuant to Section 5.1(l), the Borrower shall not consent with respect to the Servicing Contract related to any Asset to amend, modify, waive any provision of or otherwise change any Servicing Contract or enter into any new Servicing Contract related to any Asset, except any such amendments, modifications, waivers or changes or any such new agreements or arrangements that could not reasonably be expected, individually or in the aggregate, to materially and adversely affect the Collateral or the Administrative Agent’s interest therein or result in a Material Adverse Effect.
(s) No Subservicing. Borrower shall not permit any of the Assets to be subject to any servicing contract or subservicing arrangement, other than as permitted by a Servicing Contract and subject to the prior written consent of Administrative Agent.
(t) Quality Control. Borrower shall 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 MSRs and Advanced Reimbursement Amounts. Such program shall be capable of evaluating and monitoring the overall quality of the Borrower’s servicing activities. Such program shall guard against (i) dishonest, fraudulent, or negligent acts; and (ii) errors and omissions by officers, employees, or other authorized persons.
(u) [Reserved].
(v) [Reserved].
(w) Insurance. The Borrower and the 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 the Borrower’s and Guarantor’s business as of any date after the Closing Date. Each of the Borrower and the 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 the Borrower or the Guarantor, as applicable. Upon the request of the Administrative Agent at any time subsequent to the Closing Date, the Borrower and the Guarantor shall cause to be delivered to the Administrative Agent, a certification evidencing the Borrower’s and the Guarantor’s coverage under any such policies.
(x) [***]
(y) [Reserved.]
(z) [Reserved.]
(aa) [Reserved.]
(bb) Monthly Report. No later than the fifteenth (15th) day of each calendar month or, if such fifteenth (15th) day is not a Business Day, the next succeeding Business Day, Borrower shall deliver to the Administrative Agent a report substantially in the form set forth on Exhibit F attached hereto (the “Monthly Report”) which shall contain:
(i) detailed accounting of Collections for the immediately preceding Collection Period, as applicable;
(ii) the number of Mortgage Loans contained in each Portfolio subject to this Agreement as of the last date of the calendar month preceding the delivery of such Monthly Report;
(iii) the unpaid principal balance of all Portfolios serviced by the Borrower;
(iv) the payments made with respect to each Portfolio and Mortgage Loans contained therein, shown as a change in their unpaid principal balance;
(v) the payoff with respect to the existing Portfolios serviced by the Borrower and Mortgage Loans contained therein, shown as a change in their unpaid principal balance;
(vi) the number of Mortgage Loans contained in each Portfolio that have been added or paid off, including their paid off principal balance;
(vii) a detailed calculation of the Financial Covenants, and accompanying Compliance Certificate;
(viii) copies of all internal and external valuations of the Borrower’s Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs since delivery of the prior Monthly Report; for the avoidance of doubt, this includes the results of all third-party valuation reports prepared by or on behalf of the Borrower upon which any internal valuations of the Borrower’s Fannie Mae MSRs, Freddie Mac MSRs, and Ginnie Mae MSRs were made;
(ix) compliance with the Events of Default hereunder as of the last day of the immediately preceding month; and
(x) a copy of the most recently received monthly account statement relating to the Collection Account described in the Account Control Agreement.
● With respect to Section 5.1(bb)(vii),
Section 5.1(bb)(viii) such financial calculation shall be based on the Borrower’s most recently available unaudited monthly financial statements, which shall be as of the end of the last day of the second immediately preceding month.
Notwithstanding the foregoing, the Monthly Report provided to an Agency shall be based upon, and shall include information only with respect to Mortgage Loans included in the applicable Portfolio subject to the Servicing Contract with such Agency,
except that the portions of such report referred to in clauses (ii) and (iv) above shall apply to all Mortgage Loans included in any portfolio.
Section 5.2 Negative Covenants. Each of the Borrower and the Guarantor covenants and agrees that, until each Loan Note and all other Obligations (other than contingent obligations not then due) hereunder have been paid in full and the Commitments have been terminated, the Borrower and the Guarantor will not:
(a) Sales, Liens, Etc. Except as permitted hereunder, sell, assign (by operation of law or otherwise) or otherwise Dispose of, or create or suffer to exist any Lien upon or with respect to, the Collateral; provided that notwithstanding anything to the contrary herein, this Section 5.2(a) shall not prohibit (i) (x) any Lien on MSR Collateral that constitutes a Permitted MSR Collateral Lien, or (y) any Lien on any other Collateral that constitutes a Permitted Collateral Lien, (ii) any sale, assignment or disposition that is not expressly restricted pursuant to the terms hereof, or (iii) any Permitted Disposition.
(b) Additional Indebtedness. Neither the Borrower nor the Guarantor shall enter into any Indebtedness other than Permitted Indebtedness.
(c) [Reserved].
(d) Dividends, Etc. Make, directly or indirectly, declare or pay any dividends or make any other payment or distribution (in cash, property, or obligations) on account of the Borrower’s or the 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 Potential Event of Default or Event of Default exists or will exist after giving effect thereto, or during an Acknowledgment Agreement Holiday Period or an Acknowledgment Agreement Trigger Period.
(e) Prohibition of Fundamental Changes. (i) Merge or consolidate or amalgamate, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) unless (x) such merger, consolidation or amalgamation does not result in a Change of Control or (y) the Borrower or the Guarantor (as applicable) is the sole surviving entity of such merger, consolidation or amalgamation, or (ii) sell all or substantially all of its assets; provided
that notwithstanding anything to the contrary herein, this Section 5.2(e) shall not prohibit the dissolution of NM Holdings LLC after the Closing Date.
(f) Material Change in Business. The Borrower and the Guarantor shall not make any material change in the nature of its business as carried on at the Closing Date and business activities that are reasonably related, ancillary or complementary thereto or reasonable developments or extensions thereof or in connection with the Asset Management Strategy.
(g) Change in Organizational Documents. Amend, modify or otherwise change any of its organizational 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; provided that, the Borrower and the Guarantor shall deliver written notice to the Administrative Agent within thirty (30) days of any material amendment to its organizational documents.
(h) Transactions with Affiliates. Enter into, or be a party to, any transaction with any of its Affiliates, except (i) the transactions contemplated by the Transaction Documents, (ii) any other transactions (including the lease of office space or computer equipment or software by the Borrower or the 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 the Borrower’s business or the 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 and (d) permitted by Sections 5.2(a), (d), (e) or (f), (iii) employment and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower or the 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 the Borrower or the Guarantor to the extent attributable to the ownership or operation of the Borrower or the Guarantor.
(i) Sale and Lease-Backs. Enter into any arrangement, directly or indirectly, with any Person whereby the Borrower or the Guarantor shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred if any Potential Event of Default or Event of Default exists or will exist after giving effect thereto (including that no Borrowing Base Deficiency or Funding Base Deficiency shall have occurred and be continuing at such time).
(j) Amendments to Transaction Documents. Amend, modify, supplement or otherwise change, waive or grant any consent in respect of any of the terms or provisions of any Transaction Document other than amendments, modifications, supplements or other changes made in accordance with the terms of the applicable Transaction Document.
(k) Fiscal Year. Change its fiscal year-end from December 31 or change its method of determining fiscal quarters.
(l) Collection Account. (i) Close the Collection Account, (ii) permit (A) any property that is not Collateral to be deposited in the Collection Account or (B) any Collateral (other than the Base Servicing Fee) to be deposited into an account other than the Collection Account free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, or (iii) during an Acknowledgment Agreement Trigger Period or following (A) delivery of an Activation Notice by the Administrative Agent, (B) the Availability Period, or (C) the occurrence and during the continuation of an Event of Default, withdraw funds from the Collection Account for any purpose without the Administrative Agent’s consent.
(m) Assignment. Except as expressly permitted herein and in the Transaction Documents, 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 as otherwise permitted by this Agreement and the other Transaction Documents), any of the Assets or any interest therein, provided, that the Borrower may encumber, sell, transfer or otherwise dispose of any MSRs or other Assets which have been released from the Collateral. Notwithstanding the foregoing, but subject to Section 2.10, (A) (i) the Borrower shall have the right to sell, assign or otherwise transfer to any Person any and all Mortgage Loans on a “servicing-released” basis, (ii) the servicing rights related thereto shall not be MSRs, and (iii) the servicing and other rights related thereto shall in no event be included as Collateral or in a Portfolio or be subject to the Liens of the Administrative Agent, and (B) the Borrower shall have the right to sell, assign or otherwise transfer to any Person the servicing rights related to any and all Mortgage Loans (and the servicing rights thereto shall not be MSRs and shall in no event be included as Collateral or be subject to the Liens of the Administrative Agent), to the extent such transaction is a voluntary partial cancellation of the applicable Servicing Contract pertaining to delinquent Mortgage Loans.
(n) Investments. None of the Borrower, the Guarantor, or their respective Subsidiaries shall enter into any new Investments in the event that a Borrowing Base Deficiency has occurred and is continuing or would occur after giving effect to any new Investment.
ARTICLE VIARTICLE VI
EVENTS OF DEFAULT
Section 6.1 Events of Default. The occurrence of any of the following specified events shall constitute an event of default under this Agreement (each, an “Event of Default”):
(a) Non-Payment. The Borrower or the Guarantor shall fail to (i) make any payment required pursuant to Section 2.9(a) beyond the applicable dates on which such payment is due (after giving effect to any grace or cure period set forth in Section 2.9), (ii) make any required payment of principal when due hereunder and such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure, (iii) make any required payment of any interest or Non-Usage Fee when due and
such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure, or (iv) make any required payment of any other fee or other amount payable hereunder or under any other Transaction Document when due and such failure remains unremedied for a period of [***] after the earlier of (a) written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (b) the date upon which a Responsible Officer of the Borrower or the Guarantor obtained knowledge of such failure.
(b) Representations. Any representation or warranty made or deemed made by any of the Borrower or Guarantor herein or in any other Transaction Document (after giving effect to any qualification as to materiality set forth therein, if any) shall prove to have been false and misleading when made or any Monthly Report or Compliance Certificate delivered hereunder shall prove to have been false and misleading in any material respect when made (other than the representations and warranties set forth in Section 4.1(bb) which shall be considered solely for the purpose of determining the Administrative Agent Asset Value of the Eligible Assets, unless the Borrower or the Guarantor shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made).
(c) Covenants. (i) The Borrower or the Guarantor shall fail to perform or observe the Financial Covenants (subject to Section 6.3) or any negative covenant under Section 5.2, (ii) the Borrower or the Guarantor shall fail to perform or observe the covenants set forth in Sections 5.1(b), (d)-(f), (j), (l) (solely with respect to any notice requirements therein), (p), or (bb), and such failure shall continue unremedied for [***] after the earlier of (A) a written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (B) the date upon which a Responsible Officer of the Borrower or Guarantor obtained knowledge of such failure (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, the Borrower or the Guarantor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or in any other Transaction Document, and, such failure shall continue unremedied for [***] after the earlier of (A) a written notice of such failure shall have been given to the Borrower or the Guarantor by the Administrative Agent or any Lender or (B) the date upon which a Responsible Officer of the Borrower or Guarantor obtained knowledge of such failure.
(d) Insolvency Event. An Insolvency Event shall have occurred with respect to the Borrower or the Guarantor.
(e) Security Interest. The Administrative Agent, for the benefit of the Lenders, ceases to have a first priority perfected security interest in any portion of the Collateral.
(f) Judgments. There shall remain in force, undischarged (or provisions shall not be made for such discharge), 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 the Borrower or the Guarantor in
excess of [***] over and above the amount of insurance coverage available from a financially sound insurer that has not denied coverage.
(g) 1940 Act. The Borrower or the Guarantor becomes, or becomes Controlled by, an entity required to register as an “investment company” under the 1940 Act.
(h) Tax Event. The Borrower or the Guarantor shall become taxable as an entity other than as it is presently taxable.
(i) Change of Control. The occurrence of a Change of Control.
(j) Cross Default. The Borrower, the Guarantor, or any of their 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 the Lender or any of the Lender’s Affiliates (including, for the avoidance of doubt, with respect to the Portfolio Hedges and any other derivatives contracts to which such Person is a party); (ii) the failure of the Borrower or the Guarantor to make any payment when due (after expiration of all applicable grace periods) on any Indebtedness of the Borrower or the Guarantor having an aggregate principal amount outstanding of [***] or more (each, a “Material Debt Facility”) or (iii) the 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 Indebtedness.
(k) [Reserved].
(l) Transaction Documents. At any time after the execution and delivery thereof, (i) this Agreement or any Transaction Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations in accordance with the terms hereof) or shall be declared null and void, in each case for any reason other than the failure of the Administrative Agent or any Secured Party to take any action within its control or (ii) the Borrower or Guarantor shall contest the validity or enforceability of any Transaction Document in writing or deny in writing that it has any further liability under any Transaction Document to which it is a party or shall contest the validity or perfection of any Lien in any Collateral purported to be covered by this Agreement or any other Transaction Document;
(m) Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority 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 the Borrower, the Guarantor, or any Affiliate thereof, or shall have taken any action to displace the management of the Borrower, the Guarantor, or any Affiliate thereof or to curtail its authority in the conduct of the business of the Borrower, the Guarantor, or any Affiliate thereof, or takes any action in the nature of enforcement to remove, limit or restrict the approval of Borrower, the Guarantor, or Affiliate thereof as an issuer, buyer or a seller/servicer of Mortgage Loans or securities backed thereby.
(n) Material Adverse Effect; Material Impairment. Any Material Adverse Effect shall occur, in each case as determined by Administrative Agent in its sole discretion, or any other condition shall exist which, in Administrative Agent’s sole discretion, constitutes a material impairment of Borrower’s or the Guarantor’s ability to perform its obligations under this Agreement or any other Transaction Document.
(o) [Reserved.]
(p) Approved Mortgagee; Approved Servicer.
(i) Borrower ceases to be:
(A) a HUD approved mortgagee pursuant to Section 203 of the NHA or
(B) a Freddie Mac approved servicer, a Fannie Mae approved servicer, a Ginnie Mae approved issuer, an FHA approved mortgagee, or a VA approved lender;
(ii) HUD, FHA, VA, Fannie Mae, Freddie Mac, or Ginnie Mae, as applicable, suspends, rescinds, halts, eliminates, withdraws, annuls, repeals, voids or terminates the status of Borrower as either (1) a HUD approved mortgagee pursuant to Section 203 of the NHA or an FHA approved mortgagee pursuant to the NHA, (2) a VA approved lender, (3) a Freddie Mac approved servicer, (4) a Fannie Mae approved servicer, or (5) a Ginnie Mae approved issuer.
(iii) Borrower receives a written notice that HUD, FHA or VA intends to take such action set forth in clauses (i) or (ii) above and such notice has not been revoked or withdrawn within fourteen (14) days.
(iv) As distinct from and in addition to any loss of approval or actions taken by HUD, FHA, VA, Fannie Mae, Freddie Mac, or Ginnie Mae, as applicable, described in (i)-(iii), the occurrence of a Servicer Termination Event that has not been cured by the thirtieth (30th) day following the occurrence of such Servicer Termination Event.
(q) Fraud; Violation of Requirements. (i) Borrower or Guarantor engages or has engaged in fraud or other reckless or intentional wrongdoing in connection herewith or any other Transaction Document, or any document submitted pursuant thereto or otherwise in connection with any mortgage-backed securitization, or in connection with any federal mortgage insurance or loan guaranty program, or other federal program related to any of the Mortgage Loans; or (ii) Borrower has used any payments, collections, recoveries or other funds pertaining in any way to the Mortgage Loans in violation of the requirements of a Servicing Contract.
(r) Change to the Servicing Contracts. Any change to or default under a Servicing Contract that would result in a Material Adverse Effect on Borrower or the Guarantor.
(s) Reserved.
Section 6.2 Remedies. (a)(a) If any Event of Default shall then be continuing, the Administrative Agent may, in its discretion or shall, upon the written request of the Majority Lenders, by written notice to the Borrower,
the Guarantor, and the Lenders, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims
against the Borrower or the Guarantor in any manner permitted under applicable law:
(i) declare the Commitments terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately without any other notice of any kind; or
(ii) declare the principal of and any accrued interest in respect of all Advances and all other Obligations owing hereunder and thereunder to be, whereupon the same shall become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and Guarantor;
● provided further, that (1) upon the occurrence of any Event of Default
described in Section 6.1(d), automatically, and (2) upon the occurrence of any other Event of Default, at the request of (or with the consent of) the Majority Lenders, upon notice to the Borrower by the Administrative Agent, (A) each of the
following shall immediately become due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by the Borrower: (I) the unpaid principal amount of and accrued interest
on the Advances, and (II) all other Obligations; and (B) the Administrative Agent may enforce any and all Liens and security interests created pursuant to this Agreement and any other Transaction Document, subject to the Fannie Mae Requirements and the
Freddie Mac Requirements.
(b) Without limiting the foregoing, upon any acceleration of the Obligations pursuant to this Section 6.2, the Administrative Agent, in addition to all other rights and remedies under this Agreement or otherwise, shall have all other rights and remedies provided under the UCC of each applicable jurisdiction and other Applicable Laws, which rights shall be cumulative. The Borrower and the Guarantor agree, upon the occurrence of an Event of Default and notice from the Administrative Agent, to assemble, at their expense, all of the Collateral that is in their possession (whether by return, repossession, or otherwise) at a place designated by the Administrative Agent. All out-of-pocket costs incurred by the Administrative Agent in the collection of all Obligations, and the enforcement of its rights hereunder, including attorneys’ fees and legal expenses, shall be paid by the Borrower and guaranteed by the Guarantor. Without limiting the foregoing, upon the occurrence of an Event of Default and the acceleration of the Loans pursuant to this Section 6.2, the Administrative Agent may, to the fullest extent permitted by Applicable Law, without notice, advertisement, hearing or process of law of any kind, (i) enter upon any premises where any of the Collateral which is in the possession of the Borrower or the Guarantor (whether by return, repossession, or otherwise) may be located and take possession of and remove such Collateral, (ii) sell any or all of such Collateral, free of all rights and claims of the Borrower or the Guarantor therein and thereto, at any public or private sale, and (iii) bid for and purchase any or all of such Collateral at any such sale. Any such sale shall be conducted in a commercially reasonable manner and in accordance with Applicable Law. The Borrower and Guarantor hereby expressly waive, to the fullest extent permitted by Applicable Law, any and all
notices, advertisements, hearings or process of law in connection with the exercise by the Administrative Agent of any of its rights and remedies upon the occurrence of an Event of Default. The Administrative Agent and each Lender shall have the right (but not the obligation) to bid for and purchase any or all Collateral at any public or private sale. The Borrower and the Guarantor hereby agree that in any sale of any of the Collateral, the Administrative Agent is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of Applicable Law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any Governmental Authority, and the Borrower and Guarantor further agree that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner. The Administrative Agent shall not be liable for any sale, private or public, conducted in accordance with this Section 6.2(b).
(c) The exercise of remedies under this Section 6.2 shall be subject to the terms and conditions of the Acknowledgment Agreements.
Section 6.3 Equity Cure. Notwithstanding anything to the contrary contained in Section 6.1, for purposes of determining whether an Event of Default has occurred under Section 5.1(a)(iii), any cash contribution (in the form of common equity or subordinated debt) made to the Borrower after the last day of any calendar month and on or prior to the day that is fifteen (15) Business Days after written notice from the Administrative Agent that the Borrower is not in compliance with Section 5.1(a)(iii) as of the end of the most recently ended calendar month will, at the request of the Borrower and to the extent so requested, be included in the calculation of such covenants by increasing the Adjusted Tangible Net Worth of the Borrower (or reducing the amount of Corporate Debt to the extent such amounts are utilized to pay down Corporate Debt) solely for the purpose of determining compliance with the Corporate Debt to Tangible Net Worth Ratio covenant set forth at Section 5.1(a)(iii) at the end of such period and any subsequent period that includes such period (any such cash contribution to the extent so requested by the Borrower to be included, a “Specified Contribution”); provided that (i) no more than eight Specified Contributions will be made in the aggregate, and (ii) all Specified Contributions will be disregarded for all other purposes under the Transaction Documents (including for purposes of determining other items governed by reference to any of the Financial Covenants or the components thereof); and provided further that with respect to any Specified Contribution in the form of subordinated debt, (i) it does not mature prior to the Maturity Date, (ii) it is subordinated to the Liens securing the Obligations created pursuant to the terms of this Agreement on terms reasonably acceptable to the Administrative Agent, (iii) the interest thereon is payable-in-kind (allowing for deferment of interest payments and/or payment in the form of additional debt rather in cash), and (iv) it is otherwise on terms reasonably acceptable to the Administrative Agent.
ARTICLE VIIARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.1 Appointment; Nature of Relationship. The Administrative Agent is appointed by the Lenders as the Administrative Agent hereunder and under each other Transaction Document, and each of the Lenders irrevocably authorizes the Administrative Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Transaction Documents. The Administrative Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Administrative Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement and that the Administrative Agent is merely acting as the representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the Lenders’ contractual representative, the Administrative Agent (A) does not assume any fiduciary duties to any of the Lenders, (B) is a “representative” of the Lenders within the meaning of Section 9-102 of the UCC as in effect in the State of New York and (C) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Lenders agrees to assert no claim against the Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender waives. The Administrative Agent shall deliver to any Lender any written information delivered by or on behalf of the Borrower or the Guarantor to the Administrative Agent in connection with the transactions contemplated by this Agreement and the other Transaction Documents promptly after any Lender’s reasonable request therefor.
Section 7.2 Powers. The Administrative Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties or fiduciary duties to the Lenders, or any obligation to the Lenders to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by the Administrative Agent.
Section 7.3 General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, Guarantor, or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Transaction Document or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from (A) the gross negligence or willful misconduct of such Person or (B) breach of contract by such Person with respect to the Transaction Documents.
Section 7.4 No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (A) any statement, warranty or representation made in connection with any Transaction Document or any
borrowing hereunder, (B) the performance or observance of any of the covenants or agreements of any obligor under any Transaction Document, (C) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered solely to the Administrative Agent, (D) the existence or possible existence of any Event of Default or (E) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. The Administrative Agent shall not be responsible to any Lender for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectability, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations (including the Guarantor), the Borrower or any of their respective Affiliates.
Section 7.5 Action on Instruction of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by the Majority Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Loan Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
Section 7.6 Employment of Agents and Counsel. The Administrative Agent may execute any of its duties as the Administrative Agent hereunder and under any other Transaction Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning the contractual arrangement between the Administrative Agent and the Lenders and all matters pertaining to the Administrative Agent’s duties hereunder and under any other Transaction Document.
Section 7.7 Reliance on Documents; Counsel. The Administrative Agent shall be entitled to rely upon any Loan Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.
Section 7.8 The Administrative Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse and indemnify (on a pro rata basis based upon their Applicable Percentage) the Administrative Agent (A) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Transaction Documents, (B) for any other expenses incurred by the Administrative Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and
enforcement of the Transaction Documents and (C) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents; provided, each Lender agrees to reimburse and indemnify the Administrative Agent for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Transaction Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents related to such Lender failing to maintain the confidentiality of any materials provided by the Credit Manager and/or for taking any actions that cause the Administrative Agent to be liable to Freddie Mac under the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement (as applicable); and provided further that in each case no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the gross negligence or willful misconduct of the Administrative Agent.
Section 7.9 Rights as a Lender. With respect to its Commitment and Advances made by it and the Loan Notes issued to it, in its capacity as a Lender, the Administrative Agent shall have the same rights and powers hereunder and under any other Transaction Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders”, as applicable, shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Transaction Document, with the Borrower, the Guarantor, or any of their Affiliates in which such Person is not prohibited hereby from engaging with any other Person.
Section 7.10 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and the Guarantor, and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Transaction Documents.
Section 7.11 Successor Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders, Fannie Mae, Freddie Mac, the Borrower, and the Guarantor. Notwithstanding anything herein to the contrary, following Freddie Mac’s execution of the Initial Freddie Mac Acknowledgment Agreement and Freddie Mac’s Acknowledgment Agreement, as applicable, no resignation of the Administrative Agent shall be
effective until the following conditions have been satisfied: (x) receipt of Freddie Mac’s express written consent to such resignation and satisfaction of the other terms and conditions of this Section 7.11 and of the Initial Freddie Mac Acknowledgment Agreement and Freddie Mac Acknowledgment Agreement, as applicable and (y) execution by the successor Administrative Agent, Borrower and Fannie Mae of an acknowledgment agreement (or an amendment or modification to the Fannie Mae Acknowledgment Agreement) satisfactory to Fannie Mae. The Administrative Agent may be removed at any time for cause by written notice received by the Administrative Agent from all of the other Lenders. Upon any such resignation or removal, the Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Lenders and shall have accepted such appointment within thirty (30) days after the exiting Administrative Agent’s giving notice of resignation or receipt of notice of removal, then the exiting Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent (but only if such successor is reasonably acceptable to each Lender) or petition a court of competent jurisdiction to appoint a successor Agent. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent and the execution by such successor Administrative Agent, Borrower and Fannie Mae of an acknowledgment agreement (or an amendment or modification to the Fannie Mae Acknowledgment Agreement) satisfactory to Fannie Mae, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the exiting Administrative Agent, and the exiting Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents. After any exiting Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Transaction Documents.
Section 7.12 Transaction Documents. Each Lender authorizes the Administrative Agent to enter into each of the Transaction Documents to which it is a party and each Lender authorizes the Administrative Agent to take all action contemplated by such documents in its capacity as Administrative Agent; provided that, with respect to the Credit Manager Agreement, each Lender hereunder shall execute and deliver a joinder or related agreement acknowledging acceptance of the terms thereof, on or prior to becoming a Lender hereunder. Each Lender agrees that no Lender shall have the right individually to seek to realize upon the security granted by any Transaction Document or seek to enforce or have standing to exercise any remedy against any Agency directly, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Lenders upon the terms of the Transaction Documents.
ARTICLE VIIIARTICLE VIII
COLLECTION ACCOUNT
Section 8.1 Collection Account.
(a) The Borrower shall establish and maintain or cause to be maintained at the Account Bank, a segregated non-interest bearing account titled “Home Point Financial Corporation in trust for Goldman Sachs Bank USA, as Administrative Agent – FNMA/FMAC/GNMA Collection Account”, which account has been established by the Borrower for the purpose of holding cash proceeds of the Assets (including any income from the Assets related thereto other than the Base Servicing Fee from and after an Event of Default, and as to proceeds from any Transfer of Servicing limited only to Surplus Proceeds or Net Proceeds, as applicable and as defined in the Initial Acknowledgment Agreement or Acknowledgment Agreements, as applicable) for the benefit of the Lenders (such account, the “Collection Account”), such account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Secured Parties. The Collection Account shall be subject at all times to the Account Control Agreement and may not be a “zero balance” account.
(b) On each Monthly Payment Date during any Acknowledgment Agreement Trigger Period, or following (A) delivery of an Activation Notice by the Administrative Agent or (B) the occurrence and continuation of an Event of Default, the Borrower shall cause all Servicing Fees (other than the Base Servicing Fee) and other proceeds of MSR Collateral (limited to Surplus Proceeds or Net Proceeds, as applicable, in the event of a Transfer of Servicing) to be remitted, free and clear of all Ginnie Mae rights and other restrictions on transfer under applicable Ginnie Mae guidelines, to the Collection Account no later than two (2) Business Days following receipt thereof. The Borrower may withdraw funds from the Collection Account in its discretion in the ordinary course of business, subject to the covenants set forth in Section 5.2(l). On each Monthly Payment Date during any Acknowledgment Agreement Trigger Period, or following (A) delivery of an Activation Notice by the Administrative Agent or (B) the occurrence and during the continuation of an Event of Default, all amounts on deposit in the Collection Account shall be applied pursuant to Section 2.7(c).
ARTICLE IXARTICLE IX
GUARANTY
Section 9.1 Guaranty. (a) Guarantor hereby unconditionally and irrevocably guarantees the prompt and complete payment and performance of the Guaranteed Obligations when due (whether at the stated maturity, by acceleration or otherwise). This Guaranty is a guarantee of payment and performance and not merely a guaranty of collection.
(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 the Administrative Agent 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, the 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 the Borrower may be free from any due and payable Obligations.
Section 9.2 Subrogation. Notwithstanding any payment or payments made by the Guarantor hereunder or any set-off or application of funds of the Guarantor by the Administrative Agent or the Lenders, the Guarantor shall not be entitled to be subrogated to any of the rights of the Administrative Agent or the Lenders against the Borrower or any other guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or the Lenders for the payment of the Guaranteed Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other guarantor or Person in respect of payments made by the Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders on account of the Guaranteed Obligations are paid in full. If any amount shall be paid to the 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 the Administrative Agent, on behalf of the Lenders, and shall forthwith be paid to the Administrative Agent, to be credited and applied against the Guaranteed Obligations.
Section 9.3 Amendments, etc. with Respect to the Guaranteed Obligations. Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Guarantor, and without notice to or further assent by the Guarantor, any demand for payment of any of the Guaranteed Obligations made by the Administrative Agent or the Lenders may be rescinded by the Administrative Agent or the Lenders, 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 the Administrative Agent or the Lenders, and this Agreement, the other Transaction Documents 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 the Administrative Agent and Lenders, may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or the Lenders, for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor the Lenders shall 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 the Guarantor, the Administrative Agent may, but shall be under no obligation to, make a similar demand on the Borrower, and any failure by the Administrative Agent to make any such demand or to collect any payments from the Borrower or any release of the Borrower or such other guarantor shall not relieve the 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 the Administrative Agent, on behalf of the Lenders, against the Guarantor. For the purposes hereof “demand” shall include, but shall not be limited to, the commencement and continuance of any legal proceedings.
Section 9.4 Guaranty Absolute and Unconditional. (a) 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 the Administrative Agent or the Lenders, 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 the Borrower or the Guarantor, on the one hand, and the Administrative Agent and the Lenders, 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 the Borrower 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 Transaction Documents, 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 the Administrative Agent or the Lenders, (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 the Borrower against the Administrative Agent or the Lenders, (iii) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or the Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Guaranteed Obligations, or of the 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 against the Guarantor, the Administrative Agent may, but shall be under no obligation, to pursue such rights and remedies that it may have against the Borrower 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 the Administrative Agent to pursue such other rights or remedies or to collect any payments from the Borrower 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 the Borrower or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve the 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 the Administrative Agent against the Guarantor. This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantor and its successors and assigns thereof, and shall inure to the benefit of the Administrative Agent, the Lenders, and their successors, permitted endorsees, permitted transferees and permitted assigns, until all the Obligations and the Guaranteed Obligations of the 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, the Borrower may be free from any due and payable Obligations.
(b) Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to the Administrative Agent and the Lenders as follows:
(i) To the extent permitted by law, Guarantor hereby waives any defense arising by reason of, and any and all right to assert against the Administrative Agent or the Lenders, any claim or defense based upon, an election of remedies by the Administrative Agent which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against the Borrower for reimbursement or contribution, and/or any other rights of the Guarantor to proceed against the Borrower, or against any other person or security.
(ii) Guarantor is presently informed of the financial condition of the Borrower and of all other circumstances which diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations. The Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed of the financial condition of the Borrower, of all other circumstances which bear upon the risk of nonpayment and that it will continue to rely upon sources other than the Administrative Agent and the Lenders for such information and will not rely upon the Administrative Agent or the Lenders for any such information. Guarantor hereby waives its right, if any, to require the Administrative Agent or the Lenders 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.
(iii) Guarantor has independently reviewed this Agreement and related Transaction Documents and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Agreement, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any Liens or security interests of any kind or nature granted by the Borrower or any other guarantor or Person to the Administrative Agent, now or at any time and from time to time in the future.
Section 9.5 Reinstatement. In the event that any payment on account of any of the Guaranteed Obligations is ever required to be returned by the Administrative Agent or the Lenders, for any reason (including, without limitation, bankruptcy or reorganization of the Borrower 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.
Section 9.6 Payments. Guarantor hereby agrees that any payments hereunder will be promptly paid to the Administrative Agent, on behalf of the Lenders, 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 the Administrative Agent, on behalf of the Lenders.
Section 9.7 Events of Default. If an Event of Default shall have occurred and be continuing, Guarantor agrees that, as between Guarantor, on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Obligations and Guaranteed Obligations may be declared to be due for purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any such declaration as against a Borrower and that, in the event of any such declaration (or attempted declaration), such Obligations and Guaranteed Obligations shall forthwith become due by Guarantor for purposes of this Guaranty.
ARTICLE XARTICLE X
MISCELLANEOUS
Section 10.1 Survival. All representations and warranties made by the parties herein, all indemnification obligations of the Borrower and Guarantor hereunder, and all terms of the Guaranty made by the Guarantor, shall survive, and shall continue in full force and effect, after the making and the repayment of the Advances hereunder and the termination of this Agreement.
Section 10.2 Amendments, Etc. Subject to Section 2.11(g), (a) Neitherneither this Agreement nor any other Transaction Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrower, the Administrative Agent and the Majority Lenders, except in the case of any agreement, amendment or modification required to effectuate an increase in the Commitments then in effect,
which agreement, amendment or modification shall require the consent of the Borrower, the Guarantor, the Administrative Agent and each Lender consenting to such increase in the Commitments, (ii) in the case of any other Transaction Document, pursuant
to an agreement or agreements in writing entered into by the Administrative Agent and the Borrower, with (except in the case of the Administrative Agent Fee Letter) the
consent of the Majority Lenders, or (iii) with respect to certain matters relating to the Collection Account, as provided in Section 5.2(m); provided that no such agreement shall (A) increase the Commitment of any Lender without the written
consent of such Lender (including any such Lender that is a Defaulting Lender), (B) reduce or forgive the principal amount of any Advance or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the
written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby, (C) postpone any scheduled date of payment of the principal amount of any Advance, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby, (D) change any of the provisions of this
Section or the definition of “Majority Lenders” or any other provision of any Transaction Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (E) change Section 10.7(b), (F) change the provisions of Section 2.14 relating to the extension of the Availability Period End Date,
or the consent requirements with respect thereto, except with the consent of each Lender (other than any Defaulting Lender), or (G) release all or substantially all of the Collateral without the written consent of each Lender (other than any
Defaulting Lender); provided, further, that no such agreement shall amend or modify the definition of “Borrowing Base” or any constituent term thereof in a manner that is adverse to the Lenders without the written consent of each Lender (other than
any Defaulting Lender); provided, further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent (it being understood
that any amendment to Section 10.7 shall require the consent of the Administrative Agent). The Administrative Agent may also amend Exhibit E attached hereto to reflect assignments entered into pursuant to Section
10.8. Notwithstanding anything herein to the contrary, no Loan Note nor Exhibit C attached hereto may be amended without the prior express written consent of Freddie Mac.
(b) The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Borrower or the Guarantor on any Collateral (i) upon the termination of all of the Commitments, payment and satisfaction in full in cash of all Obligations (other than contingent obligations), (ii) constituting property being sold or disposed of if the sale or disposition is made in compliance with the terms of this Agreement, or (iii) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VI. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Majority Lenders. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Borrower or the Guarantor in respect of) all interests retained by the Borrower or Guarantor, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.
Section 10.3 Notices, Etc. All notices and other communications provided to any Party hereunder shall be in writing and mailed or delivered by courier or facsimile at the address for such party set forth in Schedule 10.3 hereto or in the case of any party, at such address or other address as shall be designated by such party in a written notice to each of the other parties hereto. Notwithstanding the foregoing, (i) the Schedule of Assets may be delivered by posting to a FTP site and (ii) each Monthly Report described in Section 5.1(b), any notice obligations required by Section 5.1(f), each Borrowing Base Certificate described in Section 2.4(a) and any funding request and other reporting may be delivered by electronic mail; provided that such electronic mail is sent by a Responsible Officer and each such Monthly Report or Borrowing Base Certificate is accompanied by an electronic reproduction of the signature of a Responsible Officer. All such notices and communications shall be effective, upon receipt; provided that notice by facsimile or email shall be effective upon electronic or telephonic confirmation of receipt from the recipient.
Section 10.4 No Waiver; Remedies. No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under the Loan Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 10.5 Indemnification. The Borrower agrees to indemnify the Administrative Agent, each Lender, and their respective Related Parties (collectively, the “Indemnitees”) from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses to which such Indemnitee may become subject arising out of, resulting from or in connection with any of the Transaction Documents or any other agreement, document, instrument or transaction related thereto, the use of proceeds thereof and the transactions contemplated hereby, and to reimburse each Indemnitee upon written demand
therefor (together with reasonable back-up documentation supporting such reimbursement request) for any reasonable and documented legal or other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing of one counsel to such Indemnitees, taken as a whole, and, in the case of a conflict of interest, of one additional counsel to the affected Indemnitee taken as a whole (and, if reasonably necessary, of one local counsel or one regulatory counsel in any material relevant jurisdiction); provided that the foregoing indemnity and reimbursement obligation will not, as to any Indemnitee, apply to (A) losses, claims, damages, liabilities or related expenses to the extent they are found in a final non-appealable judgment of a court of competent jurisdiction to arise from the willful misconduct, bad faith or gross negligence of such Indemnitee or any of its affiliates or Controlling persons or any of the officers, directors, employees, advisors or agents of any of the foregoing or (B) any settlement entered into by such Indemnitee without the Borrower’s written consent (such consent not to be unreasonably withheld or delayed). This Section 10.5 shall not apply with respect to Taxes other than any Taxes that represent losses, liabilities, claims and damages arising from any non-Tax Proceeding. Each party hereto, waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding against any other party hereto arising out of or relating to this Agreement or any other Transaction Document any special, exemplary, indirect, punitive or consequential damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement).
Section 10.6 Costs, Expenses and Taxes. The Borrower agrees to pay all reasonable and documented costs and expenses in connection with the preparation, execution, delivery, filing, recording, administration, modification, amendment or waiver of this Agreement, the Loan Notes and the other documents to be delivered hereunder, including the reasonable and documented fees and out-of-pocket expenses of counsel for the Administrative Agent (limited to one primary counsel) with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement and the other Transaction Documents; provided that the Borrower’s obligations in respect of amounts incurred prior to the Closing Date through the date on which the Acknowledgment Agreements are obtained shall not exceed [***]. The Borrower further agrees to pay on demand all reasonable and documented costs and expenses, if any (including reasonable and documented counsel fees and expenses) (A) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Loan Notes and the other documents to be delivered hereunder and (B) incurred by the Administrative Agent (subject to the limitation in the immediately preceding sentence) in connection with the transactions described herein and in the other Transaction Documents (including in connection with diligence performed with respect to the Collateral), including in any case reasonable and documented counsel fees and expenses in connection with the enforcement of rights under this Section 10.6. In addition, the Borrower shall pay any and all Other Taxes and agrees to save the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such Other Taxes.
Section 10.7 Right of Set-off; Ratable Payments; Relations Among Lenders. (a) Upon the occurrence and during the continuance of any Event of Default, each of the Administrative Agent and the Lenders are hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Administrative Agent or such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Loan Notes, whether or not the Administrative Agent or such Lenders shall have made any demand under this Agreement or the Loan Notes and although such obligations may be unmatured. The Administrative Agent and each Lender agrees promptly to notify the Borrower after any such set-off and application; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and the Lenders under this Section 10.7(a) are in addition to other rights and remedies (including other rights of set-off) which the Administrative Agent and the Lenders may have.
(b) If any Lender, whether by setoff or otherwise, has payment made to it upon its Advances in a greater proportion than that received by any other Lender, such other Lender agrees, promptly upon demand, to purchase a portion of the Advances held by the Lenders so that after such purchase each Lender will hold its ratable share of Advances. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon written demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to the obligations owing to them. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made.
(c) Except with respect to the exercise of set-off rights of any Lender in accordance with Section 10.7(a), the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or any other obligor hereunder or with respect to any Collateral or Transaction Document, without the prior written consent of the other Lenders or, as may be provided in this Agreement or the other Transaction Documents, at the direction of the Administrative Agent.
(d) The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.
Section 10.8 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Guarantor, the Administrative Agent and each Lender, and their respective successors and permitted assigns, except that the Borrower and the Guarantor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Administrative Agent and the Lenders, and any assignment by the Borrower or Guarantor in violation of this Section 10.8 shall be null and void. Notwithstanding anything to the contrary in the first sentence of this Section 10.8, any Lender may at any time, without the consent of the Administrative Agent, assign all or any portion of its rights under this Agreement and any Loan Note to a Federal Reserve Bank; provided that no such assignment or pledge shall release the transferor Lender from its obligations hereunder. Subject to the terms of the Initial Acknowledgment Agreement and Acknowledgment Agreements, as applicable, each
Lender may assign to one or more banks or other entities all or any part or portion of, or may grant participations to one or more banks or other entities in all or any part or portion of its rights and obligations hereunder (including its Commitment, its Loan Notes or its Advances); provided that (A) each party to such assignment shall execute and deliver an Assignment and Assumption to the Administrative Agent, (B) shall be to (x) a bank, other financial institution or lender which is reasonably acceptable to the Administrative Agent, or (y) a “qualified institutional buyer”, as defined in Rule 144A under the Securities Act of 1933, as amended, reasonably acceptable to the Administrative Agent, and (C) unless an Event of Default has occurred and is continuing, the Borrower shall have the right to consent to any assignment of the Lender’s rights and obligations under this Agreement, such consent not to be unreasonably withheld, conditioned or delayed; provided that no such consent of the Administrative Agent or the Borrower shall be required for an assignment to any Lender or an Affiliate of a Lender.
Upon, and to the extent of, any assignment (unless otherwise stated
therein) made by any Lender hereunder, the assignee or purchaser of such assignment shall be a Lender hereunder for all purposes of this Agreement and shall have all the rights, benefits and obligations (including the obligation to provide
documentation pursuant to Section 2.15(g)) of a Lender hereunder. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a register (the “Register”) for the
recordation of the names and addresses of the Lenders, the Commitment of and outstanding principal amounts (and accrued interest) of the Advances owing to each Lender pursuant to the terms hereof
from time to time and any assignment of such Commitment or outstanding Advances. The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
Any Lender may sell participation interests in its Advances and obligations hereunder (each such recipient of a participation a “Participant”); provided that after giving effect to the sale of such participation, such Lender’s obligations hereunder and rights to consent to any waiver hereunder or amendment hereof shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, all amounts payable to such Lender hereunder and all rights to consent to any waiver hereunder or amendment hereof shall be determined as if such Lender had not sold such participation interest, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender and not be obligated to deal with such participant. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, 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 Advances or other obligations under the Transaction Documents (the “Participant Register”); provided that no Lender 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 Transaction Document) 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 such Lender 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. For the avoidance of doubt, the Administrative Agent shall have no responsibility for maintaining a Participant Register. Each recipient of a participation shall, to the fullest extent permitted by law, have the same rights, benefits and obligations (including the obligation to provide documentation pursuant to Section 2.15(g) (it being understood that the documentation required under Section 2.15(g) shall be delivered to the participating Lender)), hereunder with respect to the rights and benefits so participated as it would have if it were a Lender hereunder, except that no Participant shall be entitled to receive any greater payment under Sections 2.11 or 2.15 than its participating Lender 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.
Notwithstanding any other provision of this Agreement to the contrary, a Lender may pledge as collateral, or grant a security interest in, all or any portion of its rights in, to and under this Agreement to (i) a security trustee in connection with the funding by such Lender of Advances or (ii) a Federal Reserve Bank to secure obligations to such Federal Reserve Bank, in each case without the consent of the Borrower; provided that no such pledge or grant shall release such Lender from its obligations under this Agreement.
Section 10.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 10.10 Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK (NEW YORK COUNTY) OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 10.11 Waiver of Jury Trial. ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.
Section 10.12 Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Agreement.
Section 10.13 Tax Characterization. The parties hereto intend for the transactions effected hereunder to constitute indebtedness of the Borrower to the Lenders, secured by the Collateral, for U.S. federal income tax purposes.
Section 10.14 Execution. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 10.15 Limitations on Liability. None of the members, managers, general or limited partners, officers, employees, agents, shareholders, directors, Affiliates or holders of corporate interests of or in the Borrower or the Guarantor shall be under any liability to the Administrative Agent or the Lenders, respectively, any of their successors or assigns, or any other Person for any action taken or for refraining from the taking of any action in such capacities or otherwise pursuant to this Agreement or for any obligation or covenant under this Agreement, it being understood that this Agreement and the obligations created hereunder shall be, to the fullest extent permitted under applicable law, with respect to the Borrower or the Guarantor, solely the corporate obligations of the Borrower or the Guarantor, as applicable. The Borrower, the Guarantor, and any member, manager, partner, officer, employee, agent, shareholder, director, Affiliate or holder of a corporate interest of or in the Borrower or Guarantor, as applicable, may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Borrower or the Guarantor) respecting any matters arising hereunder.
Section 10.16 Confidentiality. (a) This Agreement and its terms, provisions, supplements and amendments, and notices and reports delivered hereunder or under any other Transaction Document, are proprietary to the Administrative Agent, the Lenders, the Borrower, and the 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 Administrative Agent (at the written direction of the applicable Lender), the Borrower, or the Guarantor, as applicable, except for (i) disclosure to Administrative Agent, any Lender’s assignees, participants, prospective assignees or prospective participants, any Lender’s, Guarantor’s, or Borrower’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 10.16, 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 Transaction Documents, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that neither the Borrower nor the Guarantor may disclose the name of or identifying information with respect the Administrative Agent or the Lenders 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 the Administrative Agent (at the written direction of the applicable Lender).
(b) Notwithstanding anything in this Agreement to the contrary, the Administrative Agent and each Lender 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 Assets and/or any applicable terms of this Agreement (the “Confidential Information”). The Administrative Agent and each Lender 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 the Administrative Agent and each Lender agree to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable federal and state privacy laws. Notwithstanding the foregoing, the Administrative Agent and the Lenders may disclose Confidential Information expressly for marketing purposes, as and to the extent permitted by the GLB Act. The Administrative Agent and each Lender 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 any Lender, the Administrative Agent or any Affiliate of the Administrative Agent which the Administrative Agent or any Lender 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. The Administrative Agent and each Lender each 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 effect. The Administrative Agent shall notify the Borrower promptly following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of the Borrower or any Affiliate of the Borrower.
Section 10.17 Merger. This Agreement, the exhibits and schedules hereto, the other Transaction Documents and the agreements, documents and instruments to be executed and delivered in connection herewith and therewith contain the final, complete and exclusive statement of the agreement between the parties with respect to the transactions contemplated
herein and all other prior or contemporaneous oral communications (including, for avoidance of doubt, communications in connection with the preparation of this Agreement and the other Transaction Documents) and agreements, and all prior written communications (including, for avoidance of doubt, written drafts of this Agreement and the other Transaction Documents) and agreements, with respect to the subject matter hereof are merged herein and superseded.
Section 10.18 Lien Release. When any portion of the Collateral is transferred as permitted by the terms hereof, the security interest in and the Lien on such Collateral shall automatically be released, and the Secured Parties will no longer have any security interest in, lien on, or claim against such Collateral. The Administrative Agent agrees to file termination statements and take all other action reasonably requested by the Borrower (at the Borrower’s expense) to evidence such release.
Section 10.19 Customer Identification - USA Patriot Act Notice. The Administrative Agent and each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Patriot Act”), and the Administrative Agent’s and each Lender’s policies and practices, the Administrative Agent and the Lenders are required to obtain, verify and record certain information and documentation that identifies the Borrower, which information includes the name and address of the Borrower and such other information that will allow the Administrative Agent or such Lender to identify the Borrower in accordance with the Patriot Act.
Section 10.20 Administrative Agent Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations. In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to funding of terrorist activities and money laundering, the Administrative Agent is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Administrative Agent. Accordingly, each of the parties agrees to provide to the Administrative Agent upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Administrative Agent to comply with such laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including the USA Patriot Act and any other laws relating to funding of terrorist activities and money laundering.
Section 10.21 No Novation. This Agreement is not intended to, and does not, novate the Original Credit Agreement, and the Borrower reaffirms that the existing security interest created by the Original Credit Agreement and each other Transaction Document is and remains in full force and effect.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
HOME POINT FINANCIAL CORPORATION, as Borrower | ||
By: | ||
Name: | ||
Title: | ||
HOME POINT CAPITAL INC., as Guarantor | ||
By: | ||
Name: | ||
Title: |
GOLDMAN SACHS BANK USA, as Administrative Agent | ||
By: | ||
Name: | ||
Title: | ||
GOLDMAN SACHS BANK USA, as Lender | ||
By: | ||
Name: | ||
Title: |
EXHIBIT A
Form of Compliance Certificate
Compliance
Certificate for the
[Quarter] [Month]
Ended
To: | Goldman Sachs Bank USA |
200 West Street
New York, NY 10282
Attention: Resi Structured Finance /
Structured Finance Investing & Lending
Telephone No.: [***]
Email: [***]
Goldman Sachs Warehouse Covenants
6011 Connection Drive
2001 Ross Ave, Suite 2800
IrvingDallas, TX 75039
75201
Attention: [***]
Telephone No.: [***]
Email: [***]
Structured Finance Asset Management
6011 Connection Drive
2001 Ross Ave, Suite 2800
Irving, TX 75039Dallas,
TX 75201
Attention: [***]
Telephone No.: [***]
Email: [***]
Re: Compliance Certificate
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement, dated as of July 11, 2019, by and between Home Point Financial Corporation, as borrower (“Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as administrative agent (“Agent”) and the lenders from time to time party thereto (as amended,
supplemented or restated from time to time, the “Agreement”); capitalized terms used herein without definition shall have the meanings assigned those terms in the Agreement.
This Certificate is furnished to the Agent pursuant to Section 5.1(a), Section 5.1(b)(iii) and Section 5.1(bb)(vii) of the Agreement.
1. Authority. I am the duly elected, qualified and acting [__] of [ Borrower][Guarantor] and hereby certify that the information provided in this Certificate is true, correct and complete.
2. Fiscal Period. This Certificate is for the fiscal period ended [__] (the “Certification Date”).
3. Financial Statements. The accompanying financial statements fairly present, in all material respects, the financial condition and results of operations of [ Borrower][Guarantor] in accordance with GAAP, consistently applied, as at the end of, and for the fiscal [ quarter][year] ended on, the Certification Date (subject to normal year-end audit adjustments).
4. No Default. To my knowledge, no Event of Default or Potential Event of Default under the Agreement has occurred or is continuing as of the date of this Certificate.
5. Minimum Liquidity. [ Borrower][Guarantor] has, as of the last day of each calendar month ending after the Closing Date, complied with the liquidity covenant pursuant to Section 5.1(a)(i) of the Agreement during the fiscal [ quarter][month] ending on the Certification Date. The information provided below is true, complete and correct as of the Certification Date:
(A) Cash: | $[__].[__] |
(B) Cash Equivalents: | $[__].[__] |
(C) Availability under Agreement: | $[__].[__] |
---(A), (B) and (C) is equal to or greater than [________________]. |
6. Minimum Adjusted Tangible Net Worth. [ Borrower][Guarantor] has at the end of each calendar month complied with the minimum Adjusted Tangible Net Worth covenant pursuant to Section 5.1(a)(ii) of the Agreement during the fiscal[ quarter][month] ending on the Certification Date. The information provided below is true, complete and accurate as of the Certification Date:
(A) Total Assets: | $[__].[__] |
(B) Adjusted Tangible Net Worth: | $[__].[__] |
--- (B) is at least equal to or greater than [$____________]. |
7. Corporate Debt to Tangible Net Worth. [ Borrower][Guarantor] has at the end of each calendar month complied with the Corporate Debt to Tangible Net Worth Ratio covenant pursuant to Section 5.1(a)(iii) of the Agreement during the fiscal [quarter] [month] ending on the Certification Date. The information provided below is true, complete and accurate as of the Certification Date:
(A) Corporate Debt: $[__].[__]
(B) Adjusted Tangible Net Worth: $[__].[__]
(A) (A) over (B) is at least equal to or greater than [***].
below.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on the date set forth below:
Name: | ||
Title: | ||
Date: |
SCHEDULE 1
[ATTACH UPDATED SCHEDULE OF ASSETS AS OF CERTIFICATION DATE]
EXHIBIT B
Form of Notice of Borrowing
__________ ___, 20__
To: Goldman Sachs Bank USA as Administrative Agent
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement, dated as of July 11, 2019 (the “Credit Agreement”), by and among Home Point Financial Corporation, as Borrower (the “Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as Administrative Agent for the financial institutions that may from time to time become parties thereto as Lenders (in such capacity, the “Administrative Agent”), and the Lenders. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
In accordance with Section 2.4 of the Credit Agreement, the Borrower hereby requests that the Lenders provide an Advance based on the following criteria:
Aggregate principal amount of Advance requested: $________________
Requested Borrowing Date: ________ ___, 20__1
• Account(s) to which Agent should wire the balance of the requested funds:
Bank Name:
ABA No.:
Account Name:
Account No.:
Reference:
Attached to this notice as Exhibit A is the Borrowing Base Certificate in connection with this Advance.
The Borrower hereby represents and warrants that the conditions set forth in Section 3.2 of the Credit Agreement have been satisfied on and as of the date hereof.
1 | No earlier than three Business Days after the date of delivery of this Notice of Borrowing. |
Very truly yours, | ||
HOME POINT FINANCIAL
CORPORATION |
||
By: | ||
Name: | ||
Title: |
EXHIBIT A TO NOTICE OF BORROWING
Form of Borrowing Base Certificate
BORROWING BASE CERTIFICATE
HOME POINT FINANCIAL CORPORATION
[_________], 20[_]
In connection with that certain Amended and Restated Credit Agreement, dated as of July 11, 2019 (the “Credit Agreement”), among Home Point Financial Corporation, as Borrower (the “Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as administrative agent for the financial institutions that may become parties thereto as Lenders, and the Lenders, the Borrower hereby certifies that:
The sum of all outstanding Advances will not exceed the related Aggregate Commitment[, plus any Advances approved in excess of such
Aggregate Commitment pursuant to Section 2.6 of the Credit Agreementthe Uncommitted Amount], after giving effect to the Advance requested in the attached
Borrowing Notice.
The attached Schedule I sets forth the borrowing base calculations
(the “Borrowing Base Calculations”) reflecting a Borrowing Base that equals or exceeds the sum of the outstanding Advances relating to the Commitments after giving effect to the Advance
requested and provides all data used, in Excel format, to calculate the foregoing as of the Borrowing Date and the computations reflected in the Borrowing Base Calculations are true, correct and complete.
The attached Schedule of Assets and Schedule of Ineligible Assets includes all Assets pledged to the Administrative Agent pursuant to the terms of the Credit Agreement, and that all information contained therein is true, accurate and complete.
Capitalized terms used but not defined herein shall have the meanings specified in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first written above.
HOME POINT FINANCIAL CORPORATION,
as Borrower |
||
By: | ||
Name: | ||
Title: |
EXHIBIT C | |||||
Form of Loan Note | |||||
LOAN NOTE | |||||
|
Commitment up to $[●] | [●], 20 | |||
New York, New York |
•THE HOLDER OF THIS
NOTE SHALL BE (I) SUBJECT TO, AND BY ACCEPTANCE OF SUCH LOAN N
•THE RIGHTS, POWERS
AND PREROGATIVES OF THE AGENCIES INCLUDE THE RIGHT OF THE AG
NO LOAN NOTE MAY BE TRANSFERRED EXCEPT IN STRICT COMPLIANCE WITH THE RESTRICTIONS ON ASSIGNMENTS, AND SUBJECT TO THE LIMITATIONS, SET FORTH IN SECTION 10.8 OF THE CREDIT AGREEMENT. PARTICIPATIONS IN ANY LOAN NOTE MAY ONLY BE CONVEYED IN STRICT COMPLIANCE WITH, AND SUBJECT TO THE LIMITATIONS SET FORTH IN, SECTION 10.8 OF THE CREDIT AGREEMENT. ANY PURPORTED TRANSFER OF ANY LOAN NOTE OR ANY BENEFICIAL INTERESTS THEREIN THAT IS IN BREACH, AT THE TIME MADE, OF ANY TRANSFER RESTRICTIONS SET FORTH IN THE CREDIT AGREEMENT IS VOID AB INITIO.
Reference is made to that certain Amended and Restated Credit Agreement, dated as of July 11, 2019 (as may be amended from time to time, the “Credit Agreement”), by and among Home Point Financial Corporation (the “Borrower”), Home Point Capital Inc. (the “Guarantor”), Goldman Sachs Bank USA, as administrative agent for the Lenders that may become parties thereto (the “Administrative Agent”), and the Lenders. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay [●], as a Lender (the “Loan Note Holder”) on the Maturity Date or such earlier date as provided in the Credit Agreement (whether or not shown on Schedule I attached hereto (or such electronic counterpart)), in immediately available funds in lawful money of the United States the principal amount of up to $[●] or, if less, the aggregate unpaid principal amount of all Advances made by the Lenders to the Borrower pursuant to the Credit Agreement, together with all accrued but unpaid interest thereon.
The Borrower also agrees to pay interest in like money to the Loan Note Holder, on the unpaid principal amount of each such Advance from time to time from the date of each such Advance until payment in full thereof at the rate or rates and on the dates set forth in the Credit Agreement.
This Loan Note is one of the Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, which, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein and is secured by the Collateral including the Assets.
In the event of any inconsistency between the provisions of this Loan Note and the provisions of the Credit Agreement, the Credit Agreement will prevail.
THIS LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS LOAN NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS LOAN NOTE, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS LOAN NOTE OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
ALL PARTIES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS LOAN NOTE.
Subject to the terms of Section 10.8 of the Credit Agreement, this Loan Note may be transferred or assigned by the holder hereof at any time, subject to compliance with any applicable law. This Loan Note shall be binding upon the Borrower and shall inure to the benefit of the holder hereof and its successors and assigns. The obligations and liabilities of the Borrower hereunder may not be assigned to any Person without the prior written consent of the holder hereof. Any such assignment in violation of this paragraph shall be void and of no force or effect.
No Lender shall have any right individually to realize upon any of the Collateral, it being understood and agreed that (i) all powers, rights and remedies under the Credit Agreement may be exercised solely by the Administrative Agent, on behalf of Lenders in accordance with the terms of the Credit Agreement and all powers, rights and remedies under the Transaction Documents may be exercised solely by the Administrative Agent, (ii) in the event any notice is due from an Agency pursuant to its Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable) or otherwise, the Agency shall be deemed to have complied to the extent the notice is provided to the Administrative Agent under such Agency’s Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable); and the Lender, by its acceptance of this Loan Note, acknowledges and agrees that only the Administrative Agent will receive such notice and that no Lender has a right to require an Agency to send it a copy of such notice or otherwise communicate with it, and (iii) any disputes, claims or suits against an Agency arising out of or relating to the Credit Agreement or such Agency’s Initial Acknowledgment Agreement or Acknowledgment Agreement (as applicable) may be submitted and pursued only by the Administrative Agent and not by any Lender directly.
In the event of any dispute, claim or suit between the Lenders, the Borrower, the Guarantor, and/or the Administrative Agent, on the one hand, and an Agency, on the other, including without limitation, any claim made or position taken by a Lender in a Borrower bankruptcy proceeding, the Lender, by acceptance of this Note, acknowledges and agrees that for all purposes of the Credit Agreement the Borrower and the Administrative Agent are the sole Persons with any right to deal with an Agency with respect to the Credit Agreement or the applicable Initial Acknowledgment Agreement or Acknowledgment Agreement.
Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.
[Signature page follows.]
IN WITNESS WHEREOF, this Loan Note has been duly executed and delivered on behalf of the Borrower by its duly authorized officer on the date and year first written above.
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Title: |
Schedule I
INCREASES AND DECREASES
Unpaid | Cost of | Interest | Notation | ||||||
Principal | Accrual | ||||||||
Date | Agency | Amount | Increase | Decrease | Total | Funds | Period | made by: | |
EXHIBIT D
Assignment and Assumption
ANY HOLDER OF A LOAN NOTE (AS SUCH TERM IS DEFINED IN THE CREDIT AGREEMENT, WHICH IS DEFINED BELOW) SHALL BE (I) SUBJECT TO, AND BY ACCEPTANCE OF SUCH LOAN NOTE RATIFIES AND REAFFIRMS, THE PROVISIONS CONTAINED IN THE CREDIT AGREEMENT (AS DEFINED BELOW), AND (II) SUBORDINATE TO (A) ALL RIGHTS, POWERS AND PREROGATIVES OF THE AGENCIES; AND (B) CLAIMS OF THE AGENCIES ARISING OUT OF ANY AND ALL DEFAULTS UNDER A SERVICING CONTRACT WITH THE AGENCIES, AND OUTSTANDING PREROGATIVES OF THE AGENCIES, ALL AS MORE PARTICULARLY SET FORTH IN THE INITIAL ACKNOWLEDGMENT AGREEMENT OR ACKNOWLEDGMENT AGREEMENTS (AS APPLICABLE) AND THE CREDIT AGREEMENT.
•THE RIGHTS, POWERS AND PREROGATIVES OF
THE AGENCIES INCLUDE THE RIGHT OF THE AG
•NO LOAN NOTE MAY BE TRANSFERRED EXCEPT
IN STRICT COMPLIANCE WITH THE RESTRICT
ASSIGNMENT AND ASSUMPTION dated [_____________], between [_______________________] (the “Assignor”) and [__________________________] (the “Assignee”).
PRELIMINARY STATEMENTS
Reference is made to the Amended and Restated Credit Agreement, dated as of July 11, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Home Point Financial Corporation, as the borrower (the “Borrower”), Home Point Capital Inc. (the “Guarantor”), the Lenders a party thereto from time to time and Goldman Sachs Bank USA, as the administrative agent (in such capacity, the “Administrative Agent”). Terms defined in the Credit Agreement and not otherwise defined herein are used herein with the meanings ascribed thereto in the Credit Agreement.
WHEREAS, the Assignor is a Lender under the Credit Agreement and desires to sell and assign to the Assignee, and the Assignee desires to purchase and assume from the Assignor, on the terms and conditions set forth below, a [___] percent [(____%)] interest in such Lender’s aggregate portion of the Aggregate Commitment (including any Advances thereunder) and rights and obligations under the Credit Agreement and the other Transaction Documents (the “Assigned Percentage”).
NOW, THEREFORE, the Assignor and the Assignee hereby agree as follows:
In consideration of the Assignee’s payment to the Assignor of [$_____________], the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, as of the “Effective Date” (as defined below), the Assigned Percentage, together (a) with all of the Assignor’s rights and obligations under the Credit Agreement and the other Transaction Documents with respect to such Assigned Percentage and (b) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as the Lender) against any Person, whether known or unknown arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuant to clauses (a) and (b) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Transaction Document (other than those made in clause (a) above), (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any collateral thereunder, (iii) the financial condition of the Borrower, the Guarantor, any of their Affiliates or any other Person obligated in respect of any Transaction Document or (iv) the performance or observance by the Borrower, the Guarantor, or any of their Affiliates or any other Person of any of their respective obligations under any Transaction Document.
The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) from and after the Effective Date (as defined below), it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iii) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1(b) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Assignor, (iv) if it is an entity that is not created or organized under the laws of the United States or a political subdivision thereof, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly contemplated and executed by the Assignee and (v) it is an “Eligible Assignee” (as defined in the Initial Freddie Mac Acknowledgment Agreement or Freddie Mac Acknowledgment Agreement, as applicable); and (b) agrees that (i) it will, independently and without reliance on the Assignor, and based on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Transaction Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Transaction Documents are required to be performed by it as a Lender.
This Assignment and Assumption shall become effective as of [_____________] (the “Effective Date”), following the execution of this Assignment and Assumption.
From and after the Effective Date, the Administrative Agent or the Assignee, as applicable, shall make all payments under the Credit Agreement in respect of the Assigned Interest (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves.
This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.
THIS ASSIGNMENT AND ASSUMPTION SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned has caused this Assignment and Assumption to be executed on its behalf by its officer thereunto duly authorized, as of [_____________].
[NAME OF ASSIGNOR], as Assignor | |||
By: |
Name: | |||
Title: |
[NAME OF ASSIGNEE], as Assignee | |||
By: |
Name: | |||
Title: |
Notice Address for Assignee: | ||
EXHIBIT E
Commitments
Lenders | Commitment |
Goldman Sachs Bank USA | [***] |
EXHIBIT F
Form of Monthly Report
[***]
EXHIBIT G
Reserved
EXHIBIT H
FORM OF NOTICE OF PREPAYMENT
[Date]
Goldman Sachs Bank USA, as Administrative Agent
200 West Street
New York, New York 10282
Attention: [__]
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement, dated as of July 11, 2019, (the “Credit Agreement”), among Home Point Financial Corporation, as borrower (the “Borrower”), Home Point Capital Inc., as guarantor (“Guarantor”), Goldman Sachs Bank USA, as administrative agent (the “Administrative Agent”) and the Lender from time to time party thereto. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Credit Agreement. The Borrower hereby gives you irrevocable notice, pursuant to Section 2.10 the Credit Agreement, that it proposes to prepay the Advances outstanding thereunder. The Borrower sets forth below the information related to such prepayment:
(i) The aggregate amount of the prepayment requested is $_______________, relating to the Aggregate Commitments.
(ii) The Redemption Date of the prepayment requested is _______________, 20__.
(iii) Attached is a Schedule of Assets identifying the Assets that the Borrower proposes to release under the Credit Agreement in connection with such prepayment.
In accordance with Section 2.10 of the Credit Agreement, the undersigned, a duly appointed officer of the Borrower, hereby certifies that, after giving effect to the prepayment requested hereunder:
no selection procedures are used with respect to identification of Assets to be released or retained that are materially adverse to the Lenders;
no Borrowing Base Deficiency, Funding Base Deficiency, Potential Event of Default or Event of Default shall exist either prior to, or after giving effect to the prepayment of the applicable portion of the Advances outstanding and the release of the related Collateral (unless, in the case of a Borrowing Base Deficiency or Funding Base Deficiency, the amount of such deficiency is eliminated as a result of such prepayment and release); and
the representations and warranties set forth in Article IV are true and correct as of such Redemption Date (except to the extent such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date) after giving effect to such prepayment and release.
Very truly yours, | ||
HOME POINT FINANCIAL CORPORATION | ||
By: | ||
Name: | ||
Title: |
Schedule I
1. | Borrower’s Account |
[***]
[***]
[***]
[***]
[***]
[***]
[***]
2. | Administrative Agent’s Account |
[***]
[***]
[***]
[***]
[***]
[***]
[***]
Schedule II
[Reserved]
Schedule III
Valuation Agents
[***]
[***]
[***]
[***]
Schedule IV
Dealers
[***]
Schedule V
Minimum Haircut Trigger Event2
(attached)
2 | The figures included in this Schedule V (other than [***] are illustrative, and do not necessarily reflect actual values. |
[***] | [***] | |||||
[***] | [***] | |||||
[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***] | [***] | [***] | [***] | [***] | [***] | [***] |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] | |
[***] | [***] | [***] | [***] | [***] | [***] |
Schedule 4.1(c)
Ownership Structure of the Borrower, the Guarantor, and their Subsidiaries
No. Shares | ||||
Issuer | Record Owner | Certificate No. | Issued and | Percent Owned |
Outstanding | ||||
Home Point Financial Corporation | Home Point Capital Inc. | [***] | [***] | 100% |
HPC Insurance Agency LLC | Home Point Capital Inc. | [***] | [***] | 100% |
HPC Title LLC | Home Point Capital Inc. | [***] | [***] | 100% |
NM Holdings LLC (f/k/a NattyMac, LLC) | Home Point Financial Corporation | [***] | [***] | 100% |
Schedule 4.1(q)
Indebtedness of the Borrower and the Guarantor
[***]
|
[***]
|
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
[***] | [***] |
Schedule 5.2(a)
Liens
1. | Uniform Commercial Code financing statements 50898732, 51023843, 52434802, 51022693, 52924242, 50875214, 51024680, 50887444 and 50743582 in each case filed against Home Point Financial Corporation, as debtor, in favor of U.S. Bank Equipment Finance as secured party. |
2. | Uniform Commercial Code financing statements 52893681 and 52893643 in each case filed against Home Point Financial Corporation, as debtor, in favor of Cisco Systems Capital as secured party. |
3. | Uniform Commercial Code financing statements 52277740, 52277733, 52621512 and 52277740 in each case filed against Home Point Financial Corporation, as debtor, in favor of Merchants Bank of Indiana as secured party. |
4. | Uniform Commercial Code financing statement 52815124 filed against Home Point Financial Corporation, as debtor, in favor of Deutsche Bank AG Cayman Islands Branch as secured party. |
5. | Uniform Commercial Code financing statement 51387334 filed against Home Point Financial Corporation, as debtor, in favor of UBS Bank USA as secured party. |
6. | Uniform Commercial Code financing statement 51862701 filed against Home Point Financial Corporation, as debtor, in favor of UBS AG as secured party. |
7. | Uniform Commercial Code financing statement 52434134 filed against Home Point Financial Corporation, as debtor, in favor of TIAA, FSB as secured party. |
8. | Uniform Commercial Code financing statement 52449970 filed against Home Point Financial Corporation, as debtor, in favor of Texas Capital Bank, National Association as secured party. |
9. | Uniform Commercial Code financing statement 51488901 filed against Home Point Financial Corporation, as debtor, in favor of Wells Fargo Bank, N.A. C/O Wells Fargo Securities, LLC Mortgage Banker Finance Group as secured party. |
TABLE OF CONTENTS
Page
Schedule 10.3
Notice Addresses
(a) | If to the Borrower or Guarantor: |
Home Point Financial Corporation
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: Chief Legal Officer
Email: [***]
(b) | If to the Administrative Agent and/or the Initial Lender: |
Goldman Sachs Bank USA
200 West Street
New York, New York 10282
E-mail: [***]
with a copy to: [***]
and for calculations of interest, principal and delivery of Monthly Reports, with a copy to:
[***]
-i-
HOME POINT FINANCIAL CORPORATION, as Borrower
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By:
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/s/ Maria Fregosi
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Name:
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Maria Fregosi
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Title:
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Chief Financial Officer
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HOME POINT CAPITAL INC., as Guarantor
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By:
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/s/ Maria Fregosi
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||
Name:
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Maria Fregosi
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||
Title:
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Chief Financial Officer
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GOLDMAN SACHS BANK USA, as Administrative Agent
|
|||
By:
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/s/ Bryan Holt
|
||
Name:
|
Bryan Holt
|
||
Title:
|
Authorized Person
|
||
GOLDMAN SACHS BANK USA, as Lender
|
|||
By:
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/s/ Bryan Holt
|
||
Name:
|
Bryan Holt
|
||
Title:
|
Authorized Person
|
Exhibit 10.12
Execution Copy
EMPLOYMENT AGREEMENT
This Employment Agreement (as the same may be amended from time to time, this “Agreement”), is entered into as of December , 2014, to be effective as of (the “Effective Date”), between Home Point Capital Inc., a Delaware corporation (the “Company”) and Home Point Capital LP (“Parent”), and William Newman, an individual (the “Executive”).
RECITALS
WHEREAS, the Company desires to employ the Executive, and the Executive has agreed to be employed by the Company, on the terms and subject to the conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Employment. The Company hereby agrees to employ the Executive to serve in the capacities described in this Agreement, and the Executive agrees to accept such employment and perform such services, upon the terms and subject to the conditions set forth herein.
2. Term. Unless the Executive’s employment shall sooner terminate pursuant to Section 8 hereof, the Company shall employ the Executive for a term commencing on the Effective Date and ending on the three (3) year anniversary of the Effective Date (the “Initial Period”). Effective upon the expiration of the Initial Period and of each Additional Period (as defined below), the Executive’s employment hereunder shall be deemed to be automatically extended, upon the same terms and conditions, for an additional period of one (1) year (each, an “Additional Period”), in each such case, commencing upon the expiration of the Initial Period or the then current Additional Period, as the case may be, unless, at least sixty (60) days prior to the expiration of the Initial Period or such Additional Period, either party shall give written notice to the other (a “Non-Extension Notice”) of its intention not to extend the Term (as defined below). The period during which the Executive is employed pursuant to this Agreement shall be referred to as the “Term”.
3. Duties and Responsibilities.
(a) Title. The Executive shall hold the title Chief Executive Officer and President of the Company and shall be responsible for the overall leadership of the Company and have such other authority and responsibility as is customary for such position consistent with the Bylaws and other constituent documents of the Company (as the same may be amended from time to time, the “Constituent Documents”) or as otherwise determined by the board of directors of the Company (the “Board”) or Parent.
(b) Standard of Care. The Executive shall at all times perform his duties and responsibilities honestly, diligently, in good faith and to the best of his ability and shall observe and comply with all of the policies and procedures established by the Company, the Board and Parent from time to time (including any employee handbook, compliance manual or code of ethics of the Company or any of its subsidiaries) that are applicable to the Company’s senior executives, and with all applicable laws, rules and regulations imposed by any governmental or regulatory authorities.
(c) Devotion of Time. The Executive will exercise his best efforts in furtherance of, and devote all of his business time (except for vacation as permitted hereunder and reasonable absence for illness) to, the operation of the business and affairs of Parent, the Company and their respective subsidiaries and affiliates; provided, however, that the foregoing shall not prevent the Executive from (i) participating in charitable, civic, educational, professional, community or industry affairs or, with approval of the Board, serving on the boards of directors or advisory boards of other companies (it being understood that Executive may serve on the board of directors of McKinley Associates Inc.) and (ii) managing his and his family’s personal investments, so long as such activities do not, individually or in the aggregate, (x) violate any covenants applicable to the Executive hereunder or under any other document, agreement or instrument to which the Executive is a party or (y) interfere with the performance of the Executive’s duties and responsibilities as an employee of the Company and its subsidiaries in accordance with the terms hereof.
(d) Situs of Work. The Executive shall be principally based at the Company’s executive headquarters in Ann Arbor, Michigan (except as described in Section 9(f)(iii) below), subject to such reasonable travel as may be necessary to fulfill his obligations under this Agreement.
4. Compensation. As compensation for his services hereunder and in consideration of the covenants set forth in this Agreement:
(a) Base Salary. The Company shall pay to the Executive an annual base salary (the “Base Salary”) equal to four hundred thousand dollars ($400,000) per annum. The Executive’s Base Salary shall be subject to annual review by the Board (or a committee of the Board) and may be increased, but not decreased (except as described in Section 9(f)(ii) below), without the consent of the Executive, from time to time by the Board (or a committee of the Board) in its sole discretion. The Base Salary shall be payable in accordance with the Company’s customary payroll practices and procedures and shall be prorated for any partial period during the Term.
(b) Annual Performance Bonus. In addition to Base Salary, the Executive shall be eligible to receive from the Company annual bonus compensation for the fiscal year ended December 31, 2015, and for each fiscal year thereafter during the Term, in an amount to be determined for each such fiscal year by the Board (or a committee of the Board) in its sole discretion based upon the Board’s (or a committee of the Board’s) assessment of the Executive during the relevant fiscal year (the bonus for each respective year, the “Annual Bonus”). The Executive’s target Annual Bonus shall be one hundred percent (100%) of his Base Salary (prorated for any partial period during the Term). Except as provided in Section 10 below, the Executive shall not be entitled to receive an Annual Bonus unless he is employed by the Company through the date such Annual Bonus is paid. Any Annual Bonus shall be paid to the Executive in cash on or before March 15 of the year following the fiscal year to which such Annual Bonus relates.
(c) Equity Incentive. As of the Effective Date, Parent shall grant Executive 750,000 Options of Parent pursuant to an Option Agreement in the form attached hereto as Exhibit B.
5. Investment. Prior to the Effective Date, the Executive has become party to the Amended and Restated Agreement of Limited Partnership of Parent (as the same may be amended from time to time, the “Parent LPA”) and related subscription agreement (the “Subscription Agreement”) and has committed to purchase $4.0 million of common units of Parent in accordance with the terms of the Parent LPA and the Subscription Agreement.
6. Executive Benefits. The Executive shall be entitled to participate in all employee benefit plans and programs (including, without limitation, retirement, medical, disability and life insurance plans and programs) that are established and made generally available by the Company or one of its subsidiaries from time to time to its senior executives, subject, however, to the applicable eligibility requirements and other provisions of such plans and programs (including, without limitation, requirements as to position, tenure, location, salary, age and health).
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7. Vacation. The Executive shall be entitled to four weeks of vacation per year in accordance with the Company’s policies for senior executives of the Company, as modified from time to time, provided that such vacation shall not adversely interfere with the Executive’s operation of the business and affairs of the Company and its subsidiaries.
8. Reimbursement of Expenses. The Company shall pay or reimburse the Executive for all reasonable, documented and necessary travel, business entertainment and other out-of-pocket expenses actually incurred by him in connection with the performance of his duties hereunder in accordance with the Company’s travel policies and expense reimbursement guidelines or such other policies, procedures and limits of the Company as in effect from time to time (as determined by the Board) including, without limitation, the submission of reasonable written verification or receipts documenting such expenses.
9. Termination. The Executive’s employment hereunder may be terminated as follows:
(a) For Cause. The Company shall have the right, in addition to any other rights and remedies that the Company may have (at law, in equity or otherwise), to immediately terminate the Term and the Executive’s employment with the Company or any of its subsidiaries hereunder by delivery of written notice to the Executive approved by the Board after the occurrence of any event constituting “Cause.” For purposes of this Agreement, “Cause” shall mean: (i) Executive refuses to comply with instructions of Parent or its general partner, the Board or the designee of any of the foregoing that are consistent with Executive’s duties to Parent, the Company and their subsidiaries and with relevant requirements of applicable law, as set forth in a written notice to Executive, such compliance to be within fifteen (15) days following such notice or such other time as may be reasonably specified by the Board for such compliance, provided, however, in the event that instructions from Parent or its general partner (or their designee) conflict with instructions from the Board (or its designee), Executive’s compliance with instructions from Parent or its general partner (or their designee) shall take precedence and Executive’s compliance with such instructions shall not constitute “Cause”; (ii) Executive engages in intentionally dishonest or willful misconduct; (iii) Executive perpetrates a fraud, theft or embezzlement or misappropriation against or affecting Parent, the Company or any of their respective subsidiaries or affiliates or any customer, client, agent, creditor, equityholder or employee of Parent, the Company or any their respective subsidiaries or affiliates; (iv) Executive breaches any material obligation owed by Executive to Parent, the Company or any of their respective subsidiaries or affiliates pursuant to this Agreement, the Constituent Documents, the Parent LPA, the Subscription Agreement or otherwise, which breach, to the extent curable, is not cured within fifteen (15) days following receipt of written notice from Parent, the Company or any of their respective subsidiaries; (v) Executive is indicted on charges of, commits or is convicted of, or enters a plea of guilty or nolo contendere to, a felony or a crime involving fraud, dishonesty or moral turpitude; (vi) Executive violates any law or regulation applicable to Parent, the Company or any of their respective subsidiaries or affiliates or breaches any of his duties to Parent, the Company or any of their respective subsidiaries or affiliates that in each case, for purposes of this clause (vi), materially and adversely affects, or would reasonably be expected to materially and adversely affect, (economically, reputationally or otherwise) Parent, the Company or any of their respective subsidiaries or affiliates, unless such action or conduct is curable and is cured within fifteen (15) days following receipt of written notice from Parent, the Company or any of their respective subsidiaries or affiliates; (vii) Executive loses or fails to maintain any personal license or approval or becomes suspended or barred by any state or federal government agency or regulatory body from serving as Chief Executive Officer and President of the Company or any of its subsidiaries or otherwise performing the services contemplated under this Agreement; or (viii) Executive habitually abuses drugs or alcohol and such abuse adversely affects the performance of Executive’s duties hereunder.
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(b) Death. The Term shall automatically terminate without notice to either party in the event of the Executive’s death.
(c) Disability. The Company shall have the right to terminate the Term and the Executive’s employment with the Company or any of its subsidiaries hereunder in the event that the Executive shall be unable to perform his material duties, by virtue of illness or physical or mental disability (from any cause or causes whatsoever) (“Disability”), for more than 180 consecutive calendar days during any period of three hundred and sixty-five consecutive calendar days.
(d) Without Cause. The Company shall have the right to terminate the Term and the Executive’s employment with the Company or any of its subsidiaries at any time without Cause on ten (10) days prior written notice to the Executive, provided that such termination is approved by a majority of the Board.
(e) Mutual Agreement. The parties may terminate the Executive’s employment with the Company or any of its subsidiaries hereunder upon their mutual written consent.
(f) Good Reason. The Executive may terminate the Term and his employment with the Company and any of its subsidiaries hereunder for good reason (“Good Reason”) following the occurrence of one or more of the events constituting “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean the occurrence of one or more of the following events that remains uncured fifteen (15) days following receipt by the Company of written demand from the Executive to cure such event: (i) the Company’s or any subsidiary’s failure to promptly pay any salary or any other material compensatory amounts due to the Executive when such payments or amounts are due or Parent’s failure to grant the options set forth in Section 4(c); (ii) a reduction in the Executive’s base salary (other than as may be consented to by Executive or due to Parent’s, the Company’s or any subsidiary’s financial performance or cash needs, and provided such reduction is applied in like proportion to all similarly situated employees); or (iii) a relocation of the Executive’s primary place of work to a site more than 25 miles from the Executive’s primary place of work as of the date hereof. Notwithstanding anything to the contrary contained in this Agreement, in order for the Executive to terminate his employment hereunder for Good Reason, the Executive must provide written notice thereof to the Company within the sixty (60) day period commencing on the date upon which Executive first becomes aware of the events that constituted such Good Reason.
(g) Without Good Reason. The Executive shall have the right to terminate the Term and the Executive’s employment with the Company and any of its subsidiaries at any time without Good Reason on ninety (90) days prior written notice to the Company. The Company, in its sole discretion, may reduce or eliminate such notice period, provided that such termination shall continue to be deemed to be by Executive without Good Reason.
(h) Effect of Termination. Effective as of any date of termination of the Executive’s employment with the Company or any of its subsidiaries, without any further action required by any party, the Executive shall be removed from, and shall no longer hold, all positions then held by him with Parent, the general partner of Parent, the Company or any of their subsidiaries. The Executive agrees that he shall execute any documentation, resignations or similar documents reasonably necessary to give effect to the provisions of this Section 9(h). Upon termination of Executive’s employment for any reason, the Options granted to the Executive pursuant to Section 4(c) shall be governed in all respects by the 2015 Option Plan of Parent (as the same may be amended from time to time, the “Option Plan”) and the applicable grant agreement and the investment made by the Executive pursuant to Section 5 shall be governed by the Parent LPA and any related documentation.
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(i) Cessation of Professional Activity. Upon delivery of a written notice of termination by any party, the Company may relieve the Executive of his duties and responsibilities and require the Executive to immediately cease all professional activity on behalf of Parent, the general partner of Parent, the Company or its subsidiaries. In addition, in the event that the Board determines that there is a reasonable basis for it to investigate whether circumstances exist that would, if true, permit the Board to terminate the Executive’s employment for Cause, the Board may relieve the Executive of his duties and responsibilities during the pendency of such investigation. During any period that the Executive is relieved of duties and responsibilities pursuant to this Section 9(i), the Executive shall continue to be entitled to all salary, benefits, reimbursements, vesting of Options and any other consideration provided for under this Agreement.
10. Payments Upon Termination.
(a) Payments Upon Termination (other than with Good Reason, without Cause or upon the Company’s delivery of a Non-Extension Notice). If the Executive’s employment with the Company or its subsidiaries shall be terminated during the Term as a result of any of the events set forth in Sections 9(a), (b), (c), (e) or (g) hereof or as a result of the Executive having terminated his employment with the Company for any reason, including the Executive’s delivery of a Non-Extension Notice (other than pursuant to Section 9(f) hereof), then the Company shall:
(i) pay to the Executive (or his heirs and/or personal representatives) his Base Salary at the time of termination earned through the date of termination (to the extent not already paid); and
(ii) reimburse the Executive for any expenses for which the Executive is entitled to reimbursement under Section 8 hereof;
provided that upon the satisfaction of its obligations in this Section 10(a), the Company shall have no further obligation to the Executive under this Agreement, except that the Options granted to the Executive pursuant to Section 4(c) shall be governed in all respects by the Option Plan and applicable grant agreement and the investment made by Executive pursuant to Section 5 shall be governed by the Parent LPA and any related documentation.
(b) Payments Upon Termination (with Good Reason, without Cause or upon the Company’s delivery of a Non-Extension Notice). If this Agreement and the Executive’s employment with the Company or its subsidiaries shall be terminated during the Term upon the Company’s delivery of a Non-Extension Notice or pursuant to Section 9(d) hereof (for a reason other than those covered by Sections 9(a), (b), (c), (e) or (g) hereof) or if the Executive shall terminate his employment pursuant to Section 9(f) hereof, then the Company shall:
(i) pay or reimburse the Executive for the amounts set forth in clauses (i) and (ii) of Section 10(a) hereof;
(ii) continue to pay the Base Salary for a period of twelve (12) months following the date of termination, with such payments made in equal installments in accordance with the Company’s standard payroll practices beginning as soon as practicable after the Executive executes and delivers the release required pursuant to Section 10(c) and such release becomes nonrevocable; and
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(iii) pay to the Executive additional compensation for the year in which such termination occurs in an amount equal to 100% of the Annual Bonus earned by the Executive in the year prior to such termination, with such amount to be paid on or before March 15 of the year following the fiscal year in which such termination occurs;
provided that, upon the satisfaction of its obligations in this Section 10(b), the Company shall have no further obligation to the Executive under this Agreement, except that the Options granted to the Executive pursuant to Section 4(c) shall be governed in all respects by the Option Plan and applicable grant agreement and the investment made by Executive pursuant to Section 5 shall be governed by the Parent LPA and any related documentation; and provided, further, that the Company’s obligation to make payments pursuant to Section 10(b)(ii) and (iii) shall terminate immediately in the event that the Executive breaches or has breached any obligation under Sections 11, 12, 13, 14 and 15 hereof.
(c) Release. The Executive agrees, as a condition to receipt of any termination payments and benefits provided for in Section 10(b)(ii), that the Executive will execute a general release agreement, in form and substance reasonably satisfactory to the Company, releasing any and all claims the Executive may have arising out of the Executive’s employment (other than enforcement of this Section 10) and deliver such executed release to the Company not later than fifty-two (52) days after the date of termination. The Company shall provide the form of release to the Executive within five (5) business days after termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason. The Executive shall not be entitled to receive any amount under Section 10(b)(ii) or (iii) unless the release has become fully enforceable and nonrevocable prior to the sixtieth (60th) day after the date of termination.
11. Confidential Information.
(a) The Executive agrees to at all times during the Term and thereafter: (i) hold in the strictest confidence and neither use in any manner detrimental to Parent, the Company or any of their subsidiaries or affiliates, nor disclose, publish or divulge, directly or indirectly, to any individual or entity, any Confidential Information; and (ii) inform all other persons or entities to whom the Executive discloses Confidential Information of the proprietary interest and nature of such Confidential Information and of the recipient’s obligations to keep such information confidential. The Executive agrees that the foregoing restrictions shall apply whether or not such information is marked “Confidential”.
(b) For purposes of this Agreement, the term “Confidential Information” shall include, with respect to each of Parent, the Company and each of their respective subsidiaries and affiliates, all data, information, reports, interpretations, forecasts and records, financial or otherwise, including all property owned by Parent, the Company and each of their respective subsidiaries and affiliates or in which any of them have any rights and information related to the business or financial affairs of Parent, the Company and each of their respective subsidiaries and affiliates, including but not limited to customer lists and accounts, prospective customer lists, customer data, brokers, systems, policies, manuals, advertising, marketing plans, marketing strategies, research, trade secrets, business plans, financial data, strategies, methods of conducting business, cost and pricing information, formulas, processes, procedures, standards, manuals, techniques, designs, technology, confidential reports, computer software, financial and performance results and other data, telephone and other contact lists, contract forms, catalogs, books, records, files and all other information, knowledge, or data of any kind or nature relating to the products, services, customers, brokers, financing sources, employees, investors or business of Parent, the Company and each of their respective subsidiaries and affiliates. The term “Confidential Information” does not include information that: (i) is or becomes generally available to the public other than as a result of a disclosure by any person having an obligation of confidentiality to Parent, the Company and each of their respective subsidiaries and affiliates; (ii) was or becomes available to the Executive on a non-confidential basis from a source other than Parent, the Company and each of their respective subsidiaries and affiliates and other than in connection with the Executive’s employment by the Company; provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to Parent, the Company or any of their respective subsidiaries and affiliates with respect to such information; (iii) is required to be disclosed by order of a court of competent jurisdiction, administrative agency or governmental body, or by any law, rule or regulation, or by subpoena, summons or any other administrative or legal process, or by applicable regulatory standards, after notice of such requirement has been given to the Company, and the Company has had a reasonable opportunity to oppose such disclosure; or (iv) is disclosed with the written approval of the Board.
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(c) If the Executive becomes legally required (whether by deposition, interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes) to disclose any Confidential Information, he will provide the Company with prompt notice thereof so that the Company may seek a protective order or other appropriate remedy and the Executive will, at the Company’s expense, cooperate with and assist the Company in securing such protective order or other remedy. In the event that such protective order is not obtained, or the Company waives compliance with the provisions of this Section 11 to permit a particular disclosure, the Executive shall furnish only that portion of the Confidential Information which he is advised by counsel in writing is legally required to be disclosed and shall exercise his reasonable best efforts to obtain reliable assurances that confidential treatment will be afforded the Confidential Information. The Executive further agrees that all memoranda, disks, files, notes, records or other documents that contain Confidential Information, whether in electronic form or hard copy, and whether created by the Executive or others, that come into his possession, shall be and shall remain the exclusive property of the Company to be used by the Executive only in the performance of his obligations hereunder.
12. Return of Documents and Property. Upon termination of the Executive’s employment with the Company or any of its subsidiaries (for any reason) or at any other time upon the request of the Company, the Executive (or his heirs or personal representatives): (a) shall deliver, or cause to be delivered, to the Company, and shall not retain, all memoranda, disks, files, notes, records, documents or other materials obtained in connection with the Executive’s employment with the Company or any of its subsidiaries or which otherwise relate to the business of the Company, its subsidiaries and affiliates (whether or not containing Confidential Information) and shall not retain any copies thereof in any format or storage medium (including computer disk or memory); (b) purge from any computer system in his possession, other than those owned by and returned to the Company or any of its subsidiaries, all computer files that contain or are based upon any Confidential Information and confirm such purging in writing to the Company; and (c) return any other property that rightfully belongs to the Company or any of its subsidiaries, including, without limitation, computers and cellular phones, in accordance with the Company’s policy in effect from time to time.
13. Non-Compete. The Executive agrees during the period commencing on the date hereof and ending (a) two (2) years following the conclusion of the Term for any reason other than due to the Company’s delivery of a Non-Extension Notice pursuant to Section 2 or (b) one (1) year following the conclusion of the Term due to the Company’s delivery of a Non-Extension Notice pursuant to Section 2 (the “Restricted Period”), not to, directly or indirectly (including through any affiliate), as an individual proprietor, partner, shareholder, member, equity holder, officer, director, manager, employee, consultant, independent contractor, joint venturer, investor or lender or otherwise, compete with the business of Parent, the Company or their respective subsidiaries and affiliates as conducted on the date of the Executive’s termination of employment (the “Business”), or (other than as a director, employee, agent, consultant, shareholder, member or manager of the Business, Parent, the Company or any of their respective subsidiaries or affiliates) as an individual proprietor, partner, shareholder, member, equity holder, officer, director, manager, employee, consultant, independent contractor, joint venturer, investor or lender or otherwise, participate in any business or enterprise engaged anywhere in the United States in the provision of any services that are the same as, substantially similar to or competitive with the services that Parent, the Company, or any of their respective subsidiaries or affiliates were designing, developing, selling or providing, or actively planning to sell or provide, during the twelve (12) months preceding the end of the Term (each, a “Competing Business”). The foregoing restrictions shall not be construed to prohibit the ownership by the Executive of not more than one percent (1%) of any class of equity securities of any corporation having a class of equity securities registered pursuant to the Securities Exchange Act of 1934 that are publicly owned and regularly traded on any national securities exchange or over-the-counter market if such ownership represents a personal investment and the Executive does not either directly or indirectly in any way manage or exercise control of any such corporation, guarantee any of its financial obligations or otherwise take part in its business other than exercising the Executive’s rights as a shareholder, or seek to do any of the foregoing. Notwithstanding the foregoing, if during the Restricted Period Parent, the Company and their respective subsidiaries and affiliates cease to engage in a separately identifiable line of business, then the Restricted Period with respect to such line of business shall immediately terminate.
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14. Non-Solicitation of Customers, Vendors, Etc. During the Restricted Period, the Executive agrees not to, except as otherwise necessary or advisable in the performance of his duties as an officer, director, manager, employee or consultant of Parent, the Company or any of their respective subsidiaries or affiliates, directly or indirectly, on his behalf or on behalf of any other person or entity:
(a) solicit or accept business from any customer, broker, client, supplier, licensee, distributor, funding source or business relationship of the Business, Parent, the Company or any of their respective subsidiaries or affiliates, or any person or entity that was a customer, broker, client, supplier, licensee, distributor, funding source or business relationship or any affiliate thereof at any time during the twelve (12) months preceding the end of the Term, relating to the provision of services constituting a Competing Business;
(b) induce or solicit any customer, broker, client, supplier, licensee, distributor, funding source or business relationship of the Business, or any person or entity that was a customer, broker, client, supplier, licensee, distributor, funding source or business relationship of the Business at any time during the twelve (12) months preceding such solicitation, to cease doing business with the Business, Parent, the Company, any of their respective subsidiaries or affiliates, or in any way negatively interfere with the relationship between any such customer, broker, client, supplier, licensee, distributor, funding source or business relationship of the Business, Parent, the Company or any of their respective subsidiaries or affiliates;
(c) other than as reasonably necessary in connection with the good faith prosecution of litigation involving the Business, Parent, the Company or any of their respective subsidiaries or affiliates and equityholders and in which Employee is either plaintiff or defendant, take any action that is intended, or could reasonably be expected, to harm, disparage, defame, slander, or lead to unwanted or unfavorable publicity to the Business, Parent, the Company or any of their respective subsidiaries, affiliates and equityholders or otherwise take any action that is intended to detrimentally affect the reputation, image, relationships or public view of the Business, Parent, the Company or any of their respective subsidiaries, affiliates or equityholders;
(d) disclose the identity of any customer, broker, supplier, subcontractor, licensee, distributor, funding source or business relation of the Business, Parent, the Company or any of their respective subsidiaries or affiliates to any person or entity if such relationship is confidential; or
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(e) attempt to do any of the foregoing, or knowingly assist, entice, induce or encourage any other person or entity to do or attempt to do any activity which, were it done by the Executive, would violate any provision of this Section 14.
15. Non-Solicitation or Hire of Employees. During the period commencing on the date hereof and ending two (2) years following the conclusion of the Term, the Executive agrees that he shall not, directly or indirectly, solicit or in any manner encourage to leave the employ of the Company or any of its or Parent’s respective subsidiaries or affiliates for an engagement in any capacity by another person or entity, or, directly or indirectly, hire any employee of the Company or any of its or Parent’s respective subsidiaries or affiliates, or any person who was an employee of the Company or any of its or Parent’s respective subsidiaries or affiliates at any time during the twelve (12) months preceding such solicitation or hiring.
16. Enforceability of Restrictive Covenants.
(a) The Executive hereby acknowledges and agrees that (i) the restrictions on his activities contained in Sections 11, 12, 13, 14 and 15 hereof are necessary for the reasonable protection of Parent, the Company and their goodwill and are a material inducement to the Company entering into this Agreement and (ii) a breach or threatened breach of any such provisions will cause irreparable harm to the Parent and the Company for which there is no adequate remedy at law.
(b) The Executive agrees that in the event of any breach or threatened breach of any provision contained in Sections 11, 12, 13, 14 and 15 hereof, the Company shall be entitled, in addition to any other rights or remedies available to the Company at law, in equity or otherwise, to a temporary, preliminary or permanent injunction or injunctions and temporary restraining order or orders to prevent breaches of such provisions and to specifically enforce the terms and provisions thereof without having to prove special damages or the inadequacy of the available remedies at law, in equity or otherwise, and without the requirement to post a bond.
(c) The parties acknowledge that the time, scope and other provisions contained in Sections 11, 12, 13, 14 and 15 hereof are reasonable and necessary to protect the goodwill and business of Parent, the Company and their respective subsidiaries and affiliates.
(d) If any covenant contained in Sections 11, 12, 13, 14 and 15 hereof is held to be unenforceable by reason of the time or scope, such covenant shall be interpreted to extend to the maximum time or scope for which it may be enforced as determined by a court making such determination, and such covenant shall only apply in its reduced form to the operation of such covenant in the particular jurisdiction in which such adjudication is made.
(e) The existence of any claim or cause of action by the Executive against Parent, the Company or any of their respective subsidiaries or affiliates predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of any provision of Sections 11, 12, 13, 14 and 15 hereof.
(f) In the event of any breach by the Executive of any of the restrictive covenants contained in Sections 11, 12, 13, 14 and 15 hereof, the running of the period of the applicable restriction shall be automatically tolled and suspended for the duration of such breach, and shall automatically recommence when such breach is remedied in order that Parent, the Company or any of their respective subsidiaries or affiliates shall receive the full benefit of the Executive’s compliance with each of the covenants contained in Sections 11, 12, 13, 14 and 15 hereof. Notwithstanding anything to the contrary contained herein, the time limits contained in Sections 11, 12, 13, 14 and 15 hereof shall not apply, and the provisions of Sections 11, 12, 13, 14 and 15 hereof shall continue to apply to the Executive without limitation in duration, with respect to any transaction or business opportunity actively being contemplated or pursued by or otherwise engaged in or for the account of Parent, the Company or any of their respective subsidiaries or affiliates as of the last day of the Restricted Period.
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(g) The provisions of Sections 11, 12, 13, 14 and 15 hereof are in addition to and supplement any other agreements, covenants or obligations to which the Executive is or may be bound from time to time, including agreements, covenants and obligations set forth in the Parent LPA, the Option Plan and any grant agreement and shall apply to the Family or Estate-Planning Transferees (as defined in the Parent LPA) of the Executive, provided that the parties acknowledge and agree that the provisions of Sections 13, 14 and 15 hereof shall supersede any provision of Section 13.1 of the Parent LPA that conflicts therewith.
17. Assignment of Work Product. The Executive acknowledges that he is executing and delivering to the Company an Assignment of Work Product in the form attached as Exhibit A to this Agreement in connection with the execution and delivery of this Agreement.
18. Representations and Warranties; Indemnity. The Executive represents and warrants to the Company that the execution and delivery of this Agreement by him and the performance by him of his obligations hereunder, shall not constitute (with or without notice or lapse of time or both) a breach or violation of a provision of any understanding, contract or commitment, written or oral, express or implied, to which the Executive is a party or to which the Executive is or may be bound, including, without limitation, any understanding, contract or commitment with any former employer, in each case, that imposes restrictions that would, or would reasonably be expected to, interfere with the Executive’s ability to perform his obligations under this Agreement. The Company acknowledges receipt of a copy of the Confidential Settlement Agreement and Release, dated as of June 27, 2014, by and among William Newman, Taylor Capital Group, Inc. and Cole Taylor Bank, and the Company acknowledges its understanding of the restrictions set forth in Section 4 thereof.
19. Taxes. Payment of all compensation and benefits to the Executive by the Company shall be subject to all legally required and customary withholdings. The Company makes no representations regarding the tax implications of the compensation and benefits to be paid to the Executive under this Agreement, including, without limitation, under Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable administrative guidance and regulations. It is intended that this Agreement will comply with Section 409A and all regulations and guidance issued thereunder to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. Notwithstanding anything in this Agreement to the contrary, in the event that the Executive is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i), no payments hereunder that are “deferred compensation” subject to Section 409A shall be made to the Executive prior to the date that is six (6) months after the date of the Executive’s “separation from service” (as defined in Section 409A and any Treasury Regulations promulgated thereunder) or, if earlier, the Executive’s date of death. Following any applicable six (6) month delay, all such delayed payments will be paid in a single lump sum on the earliest permissible payment date. For purposes of this Agreement, with respect to payments of any amounts that are considered to be “deferred compensation” subject to Section 409A, references to “termination of employment” (and substantially similar phrases) shall be interpreted and applied in a manner that is consistent with the definition of “separation from service” under Section 409A. For purposes of Section 409A, the Executive’s right to receive any installment payment pursuant to this Agreement will be treated as a right to receive a series of separate and distinct payments.
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20. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, personal representatives, successors and assigns, and the Executive consents to the assignment by the Company of its rights and obligations under this Agreement to Parent or any subsidiary of Parent or the Company or to any purchaser or assignee of all or substantially all of the stock or assets of Parent, the Company or its business. The Executive may not assign any of his rights or delegate any of his duties hereunder without the prior written consent of the Board (which may be granted or withheld in the Board’s sole discretion).
21. Entire Agreement. This Agreement and the agreements referred to herein, constitute the entire agreement and understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings, arrangements, promises and commitments, whether written or oral, express or implied, relating to the subject matter hereof and thereof, and all such prior agreements, understandings, arrangements, promises and commitments are hereby canceled and terminated.
22. Amendment. This Agreement may not be amended, supplemented or modified in whole or in part except by an instrument in writing signed by the party against whom enforcement of any such amendment, supplement or modification is sought.
23. Survival. Subject to the last sentence of Section 2, the provisions of Sections 9(h) and 10 through 34 hereof shall survive the termination or expiration of this Agreement and the Term.
24. Notices. Any notice, request or other document required or permitted to be given under this Agreement shall be in writing and shall be deemed given (a) upon actual receipt by the party to which such notice shall be directed if delivered by hand or sent by facsimile or electronic mail; (b) three (3) days after the date of deposit in the mail, postage prepaid, if mailed by U.S. certified or registered mail; or (c) on the next business day, if sent by prepaid overnight courier service, in each case, addressed as follows:
(a) If to the Executive, to:
William Newman
3000 Glazier Way, Apt. 110
Ann Arbor, MI 48105
(b) If to the Company or Parent to:
Home Point Capital LP
1194 Oak Valley Drive, Suite 80
Ann Arbor, Michigan 48108
E-mail:
with copies (which shall not constitute notice) to:
Stone Point Capital LLC
20 Horseneck Lane
Greenwich, Connecticut 06830
Attn: Stephen Levey
E-mail: slevey@stonepoint.com
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and
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10022
Attn: Howard Spilko
E-mail: hspilko@kramerlevin.com
Any party may change the address to which notice shall be sent by giving notice of such change of address to the other party in the manner provided above.
25. Waivers. The failure or delay of any party to enforce any provision of this Agreement shall in no way affect the right of such party to enforce the same or any other provision of this Agreement. The waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver by such party of any succeeding breach of such provision or a waiver by such party of a breach of any other provision. The granting of any consent or approval by any party in any one instance shall not be construed to waive or limit the need for such consent or approval in any other or subsequent instance.
26. Governing Law; Waiver of Jury Trial. This Agreement shall be construed in accordance with the laws of the State of Michigan applicable to contracts executed and to be wholly performed within such State. Each party hereby irrevocably and unconditionally consents and submits to the exclusive jurisdiction of the courts of the State of Michigan sitting in the City of Ann Arbor, County of Washtenaw, and of the United States District Court for the Eastern District of Michigan for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby and each party agrees not to commence any action, suit or proceeding relating thereto except in such courts. Each party further agrees that any service of process, summons, notice or document by U.S. registered mail to its address set forth herein shall be effective service of process for any action, suit or proceeding brought against it in any such court. Each party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in such courts, and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any action, suit or proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON STATUTE, CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREUNDER.
27. Severability. Without limiting the generality of Section 16(d), if any term or provision of this Agreement shall be determined by a court of competent jurisdiction to be illegal, invalid or unenforceable for any reason, the remaining provisions of this Agreement shall remain enforceable and the invalid, illegal or unenforceable provisions shall be modified so as to be valid and enforceable and shall be enforced.
28. Section Headings. Section headings are included in this Agreement for convenience of reference only, and shall in no way affect the meaning or interpretation of this Agreement.
29. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
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30. Number of Days. In computing the number of days for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, if the final day of any time period falls on a Saturday, Sunday or holiday on which federal banks in the United States are or may elect to be closed, then the final day shall be deemed to be the next day that is not Saturday, Sunday or such holiday.
31. Enforcement of Rights; Decisions by the Board. Any and all decisions to be made by the Company in connection with enforcing the terms and provisions of this Agreement (or exercising any right or remedy hereunder) shall be made by a vote of the majority of the Board (excluding, for any such purpose, the vote of the Executive, if he is then serving on the Board).
32. Cooperation with Regard to Litigation. The Executive agrees to cooperate with Parent and the Company, during the Term and thereafter, by being available to testify on behalf of Parent, the Company or any of their respective subsidiaries and affiliates in any action, suit or proceeding, whether civil, criminal, administrative or investigative. In addition, except to the extent that the Executive has or intends to assert in good faith an interest or position adverse to or inconsistent with the interest or position of Parent, the Company or any of their respective subsidiaries or affiliates, the Executive agrees to cooperate with Parent, the Company and their respective subsidiaries and affiliates, during the Term and thereafter to assist Parent, the Company and their respective subsidiaries and affiliates in any such action, suit or proceeding by providing information and meeting and consulting with the general partner of Parent, the Board or their respective representatives or counsel, or representatives or counsel to Parent, the Company or their respective subsidiaries and affiliates, in each case, as reasonably requested by Parent or the Company. The Company agrees to pay (or reimburse, if already paid by the Executive) all reasonable expenses actually incurred in connection with the Executive’s cooperation and assistance including, without limitation, reasonable fees and disbursements of counsel, if any, chosen by the Executive if the Executive reasonably determines in good faith, on the advice of counsel, that Parent’s, the Company’s or their subsidiaries’ or affiliates’ counsel may not ethically represent the Executive in connection with such action, suit or proceeding due to actual or potential conflicts of interests.
33. Joint Drafting. In recognition of the fact that the parties hereto had an equal opportunity to negotiate the language of, and draft, this Agreement, the parties acknowledge and agree that there is no single drafter of this Agreement and therefore, the general rule that ambiguities are to be construed against the drafter is, and shall be, inapplicable. If any language in this Agreement is found or claimed to be ambiguous, each party shall have the same opportunity to present evidence as to the actual intent of the parties with respect to any such ambiguous language without any inference or presumption being drawn against any party.
34. Cumulative Remedies. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available, whether by contract, at law, in equity or otherwise.
[Remainder of this page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year first written above.
HOME POINT CAPITAL INC. | ||
By: | /s/ Stephen Levey | |
Name: Stephen Levey | ||
Title: Director |
HOME POINT CAPITAL LP | |
By: Home Point Capital GP LLC, its general partner |
By: | /s/ Stephen Levey | |
Name: Stephen Levey | ||
Title: Manager |
EXECUTIVE | |
/s/ William Newman | |
William Newman |
[William Newman Employment Agreement – Signature Page]
EXHIBIT A
ASSIGNMENT OF WORK PRODUCT
Reference is made to that certain Employment Agreement, dated as of November , 2014, by and between Home Point Capital Inc., a Delaware corporation (the “Company”), and William Newman (the “Assignor”) (as the same may be amended, restated and/or otherwise modified from time to time, the “Agreement”). Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Agreement.
To induce the parties thereto to execute and deliver the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignor hereby acknowledges and agrees that (i) any business-related discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) relating to the Company’s or its subsidiaries’ business that are conceived, developed, contributed to, made, or reduced to practice by the Assignor (either solely or jointly with others) while employed by the Company or any subsidiary (collectively, “Work Product”), belong to the Company or such subsidiary and (ii) the Assignor hereby irrevocably assigns, and agrees to assign, all Work Product to the Company or such subsidiary. Any business-related copyrightable work prepared by the Assignor while employed by the Company or any subsidiary shall be deemed a “work made for hire” under the copyright Laws, and the Company or such subsidiary shall own all rights therein and, if the same is not a “work made for hire,” the Assignor hereby irrevocably assigns to the Company or such subsidiary all of the Assignor’s rights, title and interest to the same.
In furtherance of the agreements contained herein, the Assignor represents and warrants as follows: (a) the Assignor has all legal capacity to execute, deliver and perform its obligations under this Assignment of Work Product and (b) this Assignment of Work Product constitutes the legally valid and binding obligation of the Assignor, enforceable against the Assignor in accordance with its terms by the Company. This Assignment of Work Product shall not be interpreted to limit or affect any other remedies available to the Company or any subsidiary, at law or in equity, in connection with any action or inaction by any person or the enforcement of the Company’s rights, and the collection of all amounts due, under the Agreement or otherwise.
This Assignment of Work Product shall be construed in accordance with the internal laws of the State of Michigan applicable to agreements made and fully performed within the State of Michigan and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. Any action or other legal proceeding brought under this Assignment of Work Product will be subject to the exclusive jurisdiction of any court of competent jurisdiction in the State of Michigan or the United States District Court for the Eastern District of Michigan.
IN WITNESS WHEREOF, the Assignor has duly executed and delivered this Assignment of Work Product as of this _____ day of November 2014.
William Newman, Individually as Assignor |
[William Newman Employment Agreement – Exhibit A; Assignment of Work Product]
EXHIBIT B
FORM OF STOCK OPTION AGREEMENT
Exhibit 10.13
Execution Copy
HOME POINT CAPITAL LP
2015 OPTION PLAN
ARTICLE I
General
1.1 Purpose.
(a) The Home Point Capital LP 2015 Option Plan (as the same may hereafter be modified, amended and/or amended and restated, as the case may be, from time to time in accordance with its terms, this “Plan”) is designed to provide certain key persons, on whose initiative and efforts the successful conduct of the business of Home Point Capital LP (the “Company”), the general partner of the Company (the “General Partner”) and the Company’s and the General Partner’s direct and indirect subsidiaries (collectively, the “Company Group”) depend and who are responsible for the management, growth and protection of the business of the Company Group, with incentives to: (a) enter into and/or remain in the service of the Company Group, (b) acquire a proprietary interest in the success of the Company Group, (c) maximize their performance and (d) enhance the long-term performance of the Company Group.
1.2 Administration.
(a) Administration. This Plan shall be administered by the General Partner acting through its Board of Managers (the “Board”) or a committee of the Board designated by the Board to act on the Board’s behalf for purposes of administering this Plan. The term “Administrator” shall refer to the Board or any such committee designated to administer this Plan.
(b) Administrator’s Authority. Subject to the terms of this Plan and any applicable Option Agreement (as defined below), the Administrator shall have full authority to administer this Plan, including the authority to interpret and construe this Plan or any provision hereof and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and impose, incidental to an award of Options, conditions with respect to any such award. All such interpretations, rules, regulations and conditions shall be final, binding and conclusive on the Company and each grantee. In addition to, but without limiting the foregoing, subject to the terms of this Plan, the Administrator shall have the authority to (i) exercise all of the powers granted to it under this Plan, (ii) construe, interpret and implement this Plan and any Option Agreements, (iii) prescribe, amend and rescind rules and regulations relating to this Plan, including rules governing its own operations, (iv) make all determinations necessary or advisable in administering this Plan and the Option Agreements, (v) correct any defect, supply any omission and reconcile any inconsistency in this Plan or any Option Agreement and (vi) amend this Plan to reflect changes in applicable law.
(c) Administrator Action. Actions of the Administrator shall be taken in accordance with the terms of the amended and restated limited partnership agreement of the Company (the “LP Agreement”) and the amended and restated limited liability company agreement of the General Partner (the “GP LLC Agreement”). To the extent permitted by the LP Agreement, the GP LLC Agreement and applicable law, any action may be taken by a written instrument signed by the Administrator’s required members, and action so taken shall be fully as effective as if it had been taken by a vote at a meeting.
(d) Determinations Final. The determination of the Administrator on all matters relating to this Plan or any Option Agreement shall be final, binding and conclusive.
(e) Limit on Administrator Liability. No member of the Administrator shall be liable for any action or determination made in good faith with respect to this Plan or any Option Agreement or Option hereunder or thereunder.
(f) Third Party Advice. In administering this Plan, the Administrator may employ accountants and counsel (who may be the Company’s auditors and outside counsel) and other persons to assist or render advice to it, all at the expense of the Company.
1.3 Persons Eligible for Options. Awards of Options may be made to employees of the Company Group (including prospective employees, which Option grants shall be conditioned on the prospective employees actually becoming employees), independent directors and managers of the Company Group and consultants and other independent contractors to the Company Group (collectively, “key persons”).
1.4 Common Units Available for Options.
(a) Aggregate Number Available. Options may be issued under this Plan that are exercisable into Common Units (as defined in the LP Agreement) of the Company. The aggregate number of Common Units reserved for Options under this Plan shall be 3,750,000, subject to adjustment by the Administrator in accordance with the LP Agreement and this Plan provided, that if, on the earlier of (i) the third anniversary of the Effective Date and (ii) the consummation of a Sponsor Exit Transaction or Public Offering (the “Option Adjustment Date”), there shall have been made Capital Contributions (as defined in the LP Agreement) to the Company in an aggregate amount less than Two Hundred Million Dollars ($200,000,000), then (x) the aggregate number of Common Units reserved for issuance under then outstanding Options plus unallocated Common Units then reserved for issuance under additional grants of Options under the Plan (such number, the (“Outstanding and Available Units”) shall be reduced to an amount equal to the product of the Outstanding and Available Units as of the Option Adjustment Date and a fraction, the numerator of which is the aggregate amount of Capital Contributions made to the Company on or prior to the Option Adjustment Date and the denominator of which is Two Hundred Million Dollars ($200,000,000) and (y) the number of Common Units into which each outstanding Option granted prior to the Option Adjustment Date is exercisable shall be reduced to an amount equal to the product of the number of Common Units into which each Option was exercisable prior to the Option Adjustment Date and a fraction, the numerator of which shall be the aggregate amount of Capital Contributions made to the Company and the denominator of which is Two Hundred Million Dollars ($200,000,000). Notwithstanding the foregoing, the Administrator may provide for the reduction in Common Units reserved for issuance under the Plan by reducing only the number of unallocated Common Units then reserved for issuance under the Plan and not adjusting the number of Common Units issuable under any then outstanding Options.
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(b) Certain Common Units to Become Available Again. Any Common Units that are subject to an Option under this Plan and that remain unissued upon the cancellation, expiration, forfeiture, repurchase, redemption or termination of such Option for any reason whatsoever (other than Options surrendered as part of a “cashless exercise” of such Options) shall again become available for award under this Plan.
1.5 Definitions of Certain Terms.
(a) “Affiliate” means with respect to any person or entity, any other person or entity that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such person or entity. For purposes of this definition, “control,” when used with respect to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of equity interests, by contract or otherwise; and the terms “controlling” and “controlled” have correlative meanings to the foregoing.
(b) “Cause” means, unless otherwise defined in a written employment agreement approved by the General Partner between the applicable grantee and a member of the Company Group (in which case such other definition shall control), such grantee (i) refuses to comply with direct instructions of the General Partner or its designee (or the managing member or board of directors or managers, as the case may be, of the relevant member of the Company Group or its designee) that are consistent with such grantee’s duties to the Company Group and with relevant requirements of applicable law, as set forth in a written notice to such grantee, such compliance to be within fifteen (15) days following such notice or such other time as may be reasonably specified by the General Partner for such compliance; (ii) engages in intentionally dishonest or willful misconduct; (iii) perpetrates a fraud, theft or embezzlement or misappropriation against or affecting any member of the Company Group or any of their respective Controlled Affiliates or any customer, client, agent, creditor, equity holder or employee of any member of the Company Group or any of their respective Controlled Affiliates; (iv) breaches a material obligation, representation or warranty made in this Plan, any applicable Option Agreement to which such grantee is a party, the LP Agreement or any other written agreement entered into between the grantee or any member of the Company Group or any other material obligation that the grantee otherwise owes to any member of the Company Group or any of their respective Controlled Affiliates, which breach, to the extent curable, is not cured within fifteen (15) days following receipt of written notice from the Company or any member of the Company Group; (v) is indicted on charges of, commits, or is convicted of or enters a plea of guilty or nolo contendere to, a felony or a crime involving fraud, dishonesty or moral turpitude; (vi) violates any law or other regulations applicable to the Company Group or any of their respective Controlled Affiliates, or breaches any of his or her duties to the Company Group or any of their respective Controlled Affiliates that in each case, for purposes of this clause (vi), materially and adversely affects (economically, reputationally or otherwise) any member of the Company Group or any of their respective Controlled Affiliates, unless such action or conduct is curable and is cured within fifteen (15) days following receipt of written notice from the Company or any member of the Company Group; (vii) loses or fails to maintain any personal license or approval or becomes suspended or barred by any state or federal governmental agency or regulatory body; or (viii) habitually abuses drugs or alcohol and such abuse adversely affects the ability of such grantee to fulfill his or her duties to the Company or any member of the Company Group.
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(c) “Controlled Affiliate” of the Company Group shall mean an Affiliate of the Company Group that is controlled by the Company Group.
(d) “Disability” means, unless otherwise defined in a written employment agreement approved by the General Partner between the applicable grantee and a member of the Company Group (in which case such other definition shall control), the inability to perform because of illness or incapacity, physical or mental, the essential functions, duties and responsibilities to be performed by such grantee for a consecutive period of two (2) months or for a total period of six (6) months during any consecutive twelve (12) month period, as determined by the Administrator in its sole discretion.
(e) “employment” and “termination of employment” and similar references mean, respectively, service with and termination of service with the Company Group. For this purpose, “service” means service as an employee, independent director, manager, consultant or other independent contractor, but, with respect to non-employee services, only for periods of a continuing significant service relationship. All determinations regarding employment and service, and termination thereof (for purposes of administering this Plan or any Option Agreement), shall be made by the Administrator in its sole discretion. The Administrator may, in its reasonable discretion, determine whether any leave of absence constitutes a termination of employment for purposes of this Plan and the impact, if any, of any such leave of absence on Options granted under this Plan.
(f) “Fair Market Value” means, with respect to any asset as of any given date of determination, the fair market value thereof as reasonably determined by the Administrator, based upon usual and customary valuation analyses that are consistent with the methodologies generally used by the Sponsor Partners. The Fair Market Value of an Option will be determined by reference to the Fair Market Value of the Common Units into which such Option is exercisable after accounting for such Option’s Option Exercise Price and vesting status, as determined by the Administrator in accordance with the immediately preceding sentence. Any determination of Fair Market Value shall be consistent with Treasury Regulation 1.409A-1(b)(5)(iv).
(g) “Good Reason” means, unless otherwise defined in a written employment agreement approved by the General Partner between the applicable grantee and a member of the Company Group (in which case such other definition shall control), the occurrence of one or more of the following events on or after the Effective Date (as defined in Section 3.9(a) below) (unless such event is curable, in which case such event will not constitute Good Reason unless such event remains uncured fifteen (15) days following receipt by the Company or the member of the Company Group that employs such grantee of written demand from the applicable grantee to cure such event): (i) the Company’s or any member of the Company Group’s failure to promptly pay any salary or any other material compensatory amounts due to such grantee when such payments or amounts are due or (ii) a reduction in such grantee’s base salary (other than due to the Company’s or the applicable member of the Company Group’s financial performance or cash needs, and provided such reduction is applied in like proportion to all similarly situated employees). Notwithstanding anything to the contrary contained in this Plan, in order for a grantee to terminate his or her employment hereunder for Good Reason, such grantee must provide written notice to the Company within the thirty (30) day period commencing upon the first occurrence of the Good Reason and terminate his or her employment with the Company Group.
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(h) “Initial Sponsor Partners” means, collectively, Trident VI, L.P., a Cayman Islands exempted limited partnership, Trident VI Parallel Fund, L.P., a Cayman Islands exempted limited partnership, Trident VI DE Parallel Fund, L.P, a Delaware limited partnership and Trident VI Professionals Fund, L.P., a Cayman Islands exempted limited partnership and any of their Affiliates to whom all or a portion of any of their Interests are Transferred, at any time and in each case in compliance with the terms of the LP Agreement.
(i) “Involuntary Transfer” means any Transfer, proceeding or action by or in which a grantee shall be deprived or divested of any right, title or interest in or to any of the Options (other than due to death or Disability) resulting from (a) any seizure under levy of attachment or execution, (b) any bankruptcy, (c) any Transfer to a state or to a public officer or agency pursuant to any statute pertaining to escheat or abandoned property or (d) any Transfer pursuant to a divorce or separation agreement or a final decree of a court in a divorce action.
(j) “Public Offering” means an initial public offering of the Company or any of its subsidiaries or any holder of equity interests in the Company or any of its subsidiaries (or any successor of the Company or any equity holder or subsidiary) by means of a primary offering covering the registration of equity securities of the Company or such equity holder or subsidiary pursuant to an effective registration statement under the Securities Act of 1933, as amended, or similar rules of a non-U.S. jurisdiction.
(k) “Sale of the Company” means the first to occur of any of the following after the Effective Date: (a) the merger, reorganization, combination or consolidation of the Company into or with, or any other acquisition of the Company by, a Third Party, in any case which involves the direct or indirect Transfer by the partners holding equity interests in the Company (each, a “Partner”), collectively, of at least fifty percent (50%) of the equity interests in the Company inclusive of all vested Options (and Options that will vest on such Sale of the Company) or (b) the sale, transfer or lease, whether in a single transaction or pursuant to a series of related transactions, of Company Group property or businesses constituting all or substantially all of the property or businesses of the Company Group, taken as a whole.
(l) “Sponsor Exit Proceeds” means the total amount actually received by the Sponsor Partners in connection with a Sponsor Exit Transaction or Public Offering with respect to each Common Unit of the Company, with any non-cash consideration being valued at the applicable value assigned to such consideration in the applicable transaction.
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(m) “Sponsor Exit Transaction” means the first to occur of any of the following: (i) the merger, reorganization, combination or consolidation of the Company into or with another entity or other acquisition of the Company (or a series of such events) which involves, in the aggregate, the direct or indirect Transfer by the Sponsor Members to any non- Affiliated person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Act of 1933, as amended) of at least ninety percent (90%) of the Common Units held by the Sponsor Members collectively immediately preceding such merger, reorganization, combination, consolidation or acquisition; provided that if the Sponsor Exit Transaction is comprised of a series of such events, (x) the ninety percent (90%) determination shall be based on the aggregate number of Common Units ever owned by the Sponsor Members, (y) the date of the Sponsor Exit Transaction shall be the consummation date of the transaction with respect to which such ninety percent (90%) threshold is met and (z) the Sponsor Exit Proceeds shall take into account all proceeds received in respect of the Common Units sold or transferred in each such transaction and such definition and the definition of Sponsor Investment Amount shall be interpreted to give effect thereto mutatis mutandis or (ii) the sale, transfer or lease, whether in a single transaction or pursuant to a series of related transactions or plan, of all or substantially all the assets or business of the Company and its subsidiaries taken as a whole.
(n) “Sponsor Partners” means, collectively, the Initial Sponsor Partners and any other person or entity to whom all or a portion of any of such Initial Sponsor Partners’ respective interests in the Company are Transferred, at any time and in each case in compliance with the terms of the LP Agreement.
(o) “Third Party” means a person or entity that is not, immediately prior to the consummation of an action or transaction involving such person or entity, an Affiliate of the Initial Sponsor Partners.
(p) “Transfer” means, when used as a noun, any direct or indirect, voluntary or involuntary, sale, disposition, hypothecation, mortgage, gift, pledge, assignment, attachment or any other Transfer (including the creation of any derivative or synthetic interest, including a participation or other similar interest or any lien or encumbrance) and, when used as a verb, voluntarily (whether in fulfillment of contractual obligation or otherwise) to directly or indirectly sell, dispose, hypothecate, mortgage, gift, pledge, assign, attach or otherwise Transfer (including by creating any derivative or synthetic interest, any lien or encumbrance or any other similar participation or interest), in any case, whether by operation of law or otherwise.
ARTICLE II
Options Under the Plan
2.1 Option Agreements Evidencing Options. Each option to purchase Common Units (an “Option”) granted under this Plan shall be evidenced by a written agreement (an “Option Agreement”) which shall contain such provisions as the Administrator may in its sole discretion deem necessary or desirable. By accepting an Option pursuant to this Plan, a grantee thereby agrees that the grantee and the Option shall be subject to all of the terms and provisions of this Plan and the applicable Option Agreement. If a term in an Option Agreement irreconcilably conflicts with this Plan, the term in the Option Agreement will control with respect to that particular matter.
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2.2 Grant of Options.
(a) Option Grants. The Administrator may grant Options to purchase Common Units to key persons, in such amounts and subject to such time-based or other vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine in its sole discretion, not inconsistent with the provisions of this Plan. Options under this Plan shall not be incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
(b) Option Exercise Price. Each Option Agreement shall set forth the amount (the “Option Exercise Price”) payable by the grantee to the Company upon exercise of the Option evidenced thereby. The Option Exercise Price per Common Unit shall be determined by the Administrator in its sole discretion; provided, however, that the Option Exercise Price shall be not less than the Fair Market Value of a Common Unit on the date the Option is granted.
(c) Exercise Period. This Plan, and unless otherwise indicated in an Option Agreement, each Option shall expire and terminate on the ten (10) year anniversary of the Effective Date unless any such Options are terminated or forfeited earlier in accordance with the terms of this Plan or the applicable Option Agreement.
(d) Vesting.
(i) Unless otherwise specified in an applicable Option Agreement, fifty percent (50%) of the Options granted pursuant to an Option Agreement (“Time-Vesting Options”) shall, subject to Section 2.2(d)(iii), (x) in the case of any Time-Vesting Options granted prior to the first anniversary of the Effective Date become exercisable (“vest”) with respect to 40% of the total amount of Common Units into which such Time-Vesting Options are exercisable on the second anniversary of the grant date and with respect to 20% of the total amount of Common Units into which such Time-Vesting Options are exercisable on each of the following three anniversaries of the grant date and (y) in the case of any Time-Vesting Options granted on or after the first anniversary of the Effective Date, vest with respect to 20% of the total amount of Common Units into which such Time-Vesting Options are exercisable on each of the first five (5) anniversaries of the grant date; provided, that (A) except as set forth in 2.2(d)(iii), Time-Vesting Options will cease to continue to vest upon the occurrence of the termination of employment of the applicable grantee, and (B) all unvested Time-Vesting Options shall vest upon a Sponsor Exit Transaction. Any Options to the extent that they have vested in accordance with this Plan and the applicable Option Agreement shall be referred to as “Vested Options,” and any Options that have not so vested shall be referred to as “Unvested Options.”
(ii) Unless otherwise specified in an applicable Option Agreement, fifty percent (50%) of the Options granted pursuant to an Option Agreement (“Performance-Vesting Options”) shall vest only upon the consummation of a Sponsor Exit Transaction or a Public Offering in which the Sponsor Partners transfer at least 20% of their Common Units and only if, upon such Sponsor Exit Transaction or Public Offering, the Sponsor Exit Proceeds are equal to or greater than $20.00 (subject to adjustment as set forth below (the “Trigger Amount”)) so long as the grantee is employed by the Company on the date of such Sponsor Exit Transaction or Public Offering, provided, however that the Performance-Vesting Options shall nevertheless vest if the grantee’s employment with the Company was terminated on or following the date that is one year before such Sponsor Exit Transaction or Public Offering (i) by the Company without Cause, (ii) as a result of such grantee’s resignation with Good Reason or (iii) by reason of such grantee’s death or Disability that occurred on a date that is earlier than the date that is one year prior to the date of the consummation of such Sponsor Exit Transaction or Public Offering.
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If the Sponsor Exit Proceeds in a Sponsor Exit Transaction (but not a Public Offering) are less than the Trigger Amount for any Performance-Vesting Option, upon the consummation of such Sponsor Exit Transaction each such Performance-Vesting Option shall automatically and without any action by any person or entity or any consideration paid therefor be forfeited.
(iii) Notwithstanding anything in this Plan to the contrary, if a grantee experiences a termination of employment (x) by the Company without Cause, (y) as a result of the grantee’s resignation with Good Reason or (z) by reason of such grantee’s death or Disability, the grantee’s Time-Vesting Options shall vest on such termination of employment, with respect to the aggregate amount of Time-Vesting Options that, but for such termination of employment, would have vested on the next anniversary of the grant date of such Time-Vesting Options.
(iv) The Administrator may, in its sole discretion and for any reason at any time, take action such that any or all outstanding Unvested Options shall become Vested Options, in part or in full.
(v) The Trigger Amount with respect to any Performance-Vesting Option shall be subject to adjustment for any “corporate event” described in Section 3.4(a) below.
(e) Grantee Addresses. The address of each grantee shall be the address set forth in the applicable Option Agreement or, if no address is set forth therein, shall be the address set forth for such grantee on the Company’s books and records. Each grantee represents and warrants that such address is his or her principal personal residence or, in the case of an entity, its principal place of business.
2.3 Exercise of Options. Subject to the other provisions of this Article II, each Option shall be exercisable as follows:
(a) Exercisability of Options. Unless the applicable Option Agreement otherwise provides, once all or any portion of an Option becomes vested, such Option, to the extent exercisable, shall remain exercisable until the expiration, cancellation, repurchase, redemption or termination of the Option in accordance with the terms of the applicable Option Agreement and this Plan.
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(b) Extent of Exercise. Unless the applicable Option Agreement otherwise provides, an Option may be exercised as to all or part of the Common Units as to which such Option is then vested.
(c) Notice of Exercise. An Option shall be exercised by the filing of a written notice with the Company or the Company’s designated exchange agent (the “exchange agent”), on such form and in such manner as the Administrator shall in its sole discretion prescribe.
(d) Payment of Exercise Price. Any written notice of exercise of an Option shall be accompanied by payment for the Common Units being purchased. Such payment shall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its exchange agent) for the full Option Exercise Price; or (ii) with the consent of the Administrator and to the extent permitted by law, by such other provision, consistent with the terms of this Plan, as the Administrator may from time to time prescribe.
(e) Issuance of Common Units Upon Exercise. Promptly after receiving payment of the full Option Exercise Price, the Company shall, subject to the provisions in this Section 2.3(e) and of Section 3.2, cause the Common Units for which the Option has been exercised to be issued to the grantee. As a condition to the receipt of the Common Units, the grantee shall be required to provide (or shall have previously provided): (i) a signature page or a joinder to the LP Agreement in the form of the Instrument of Adherence attached as Exhibit B to the LP Agreement evidencing such grantee’s agreement to be bound by the terms and conditions of the LP Agreement; (ii) except as otherwise determined by the Administrator, if such grantee is an individual who is subject to the “community property laws” of such individual’s state of residence, a Spousal Consent from the spouse of such grantee, if any, in the form attached as Exhibit A to the LP Agreement; and (iii) any other instrument or document that may be reasonably requested by the Administrator or required under the LP Agreement.
(f) No Member Rights. No grantee of an Option (or other person or entity having the right to exercise such Option) shall have any of the rights of a Partner with respect to Common Units subject to such Option until the exercise of such Option in accordance with this Plan and the applicable Option Agreement and the recording of such Common Unit ownership by the Company. Except as otherwise provided herein, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary and whether in cash, securities or other property) for which the record date is prior to the date such ownership is recorded.
2.4 Termination of Employment.
(a) Unvested Options. Except as set forth in Section 2.2(d)(ii) and Section 2.2(d)(iii) or as otherwise provided in the applicable Option Agreement, upon a grantee experiencing a termination of employment, all Unvested Options as of the date of the termination of employment shall thereupon, automatically and without any action by any person or entity, be forfeited and cancelled without consideration.
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(b) Vested Options. Except to the extent otherwise provided in the applicable Option Agreement, a grantee who experiences a termination of employment may exercise any outstanding Vested Option that remains outstanding as of the exercise date on the following additional terms and conditions: (x) as of the exercise date the grantee shall not be in breach of any material obligation owed to the Company Group and (y) subject to the Company’s repurchase rights set forth in Section 2.6, as follows:
(i) if the grantee experiences a termination of employment (x) by the Company without Cause or (y) as a result of the grantee’s resignation with Good Reason, the grantee’s (x) Vested Time-Vesting Options (including any Time-Vesting Options that vested upon termination pursuant to Section 2.2(d)(iii)) shall remain outstanding and exercisable until the date that is ninety (90) days after the date of termination and (y) Performance-Vesting Options shall remain eligible to vest (and shall vest upon satisfaction of the provisions of Section 2.2(d)(ii)) until the first anniversary of such termination, but the grantee’s Vested Options may not be exercised after the date the Company delivers a Repurchase Notice as provided in Section 2.6(c), and provided that such exercise may in no event occur after the original expiration date of the Option;
(ii) if the grantee experiences a termination of employment by reason of such grantee’s death or Disability, the grantee’s (x) Vested Time-Vesting Options (including any Time-Vesting Options that vested upon termination pursuant to Section 2.2(d)(iii)) shall remain outstanding and exercisable until the date that is one (1) year after the date of termination and (y) Performance-Vesting Options shall remain eligible to vest (and shall vest upon satisfaction of the provisions of Section 2.2(d)(ii)) until the first anniversary of such termination, but the grantee’s Vested Options may not be exercised after the date the Company delivers a Repurchase Notice as provided in Section 2.6(c), and provided that such exercise may in no event occur after the original expiration date of the Option;
(iii) if the grantee experiences a termination of employment as a result of the grantee’s resignation without Good Reason, Vested Options shall remain outstanding and exercisable until the date that is ninety (90) days after the date of termination, but the grantee’s Vested Options may not be exercised after the date the Company delivers a Repurchase Notice as provided in Section 2.6(c), and provided that such exercise may in no event occur after the original expiration date of the Option; or
(iv) if the grantee experiences a termination of employment by the Company for Cause, the grantee’s Vested Options shall not be exercisable after the date of termination and, as of the date of termination of employment for Cause such Vested Options shall thereupon, automatically and without any action by any person or entity, be forfeited and cancelled without consideration.
Any Vested Option that is not exercised within the applicable time period set forth above shall, automatically and without any action by any person or entity, be forfeited and cancelled without consideration.
2.5 Transferability of Options. An Option shall not be Transferable other than by will or the laws of descent and distribution and may be exercised, during the lifetime of the grantee, only by the grantee or the grantee’s legal representative in each case, unless otherwise determined by the Administrator, including pursuant to Section 2.6. Upon the death of a grantee, the personal representative or other Transferee of the grantee’s Options shall be bound by the terms of this Plan and the applicable Option Agreement. Any Transfer in violation of this Section 2.5 shall be null and void ab initio, including any Involuntary Transfer.
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2.6 Repurchase Rights.
(a) Unless otherwise provided in the applicable Option Agreement, upon the termination of employment of any grantee (i) all Unvested Options held by such grantee at the time of such termination of employment shall be treated as provided in Section 2.4(a) and (ii) the following terms shall apply with respect to all Vested Options and/or Common Units that were issued upon exercise of an Option held by such grantee or any other person or entity to whom such grantee or his or her permitted Transferees was permitted to Transfer such Options or Common Units pursuant to this Plan, the applicable Option Agreement and the LP Agreement, as applicable, except permitted Transferees by reason of a Transfer pursuant to Section 9.6, 9.7, 9.8 or 9.9 of the LP Agreement or Section 2.7 or 2.8 of this Plan, as applicable (collectively, with the grantee and each such Transferee, the “Grantee Group Participants”) at the time of termination of employment (collectively, the “Subject Units”):
(i) if such termination of employment is (x) by reason of such grantee’s death or Disability, (y) the result of the resignation by such grantee for Good Reason or (z) by the Company without Cause, then the Company shall have the right, but not the obligation, to purchase, in accordance with this Section 2.6, all or any portion of the Subject Units held by such Grantee Group Participants at the time of termination of employment at a price equal to one-hundred percent (100%) of the Fair Market Value of such Subject Units as of the date of such termination;
(ii) if such termination of employment is (x) the result of the resignation by such grantee without Good Reason (other than as a result of such grantee’s Disability) or (y) by the Company for Cause, then all of the Subject Units upon such termination will be automatically and without any action by any person or entity, forfeited and canceled without consideration provided, however, that if any of the Subject Units are Common Units which were acquired for cash upon exercise of an Option by the grantee or his or her permitted Transferee prior to the date of such termination of employment, then such Common Units will not be forfeited or cancelled and the Company shall have the right, but not the obligation, to purchase, in accordance with this Section 2.6, all or any portion of such Common Units held by such Grantee Group Participants at the time of termination of employment at a price equal to the lesser of (A) one-hundred percent (100%) of the Fair Market Value and (B) one-hundred percent (100%) of the exercise price actually paid by such grantee or permitted Transferee for such Subject Units;
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in each case of Section 2.6(a)(i) and (ii) above, it being understood and agreed that (A) to the extent the Company exercises its right to so purchase any such Subject Units, such Grantee Group Participant shall be obligated to sell such Subject Units to the Company in accordance with the terms of this Section 2.6 and shall cease to have any rights or privileges with respect to such Subject Units to be purchased by the Company other than the right to receive the sales proceeds in respect thereof pursuant to this Section 2.6, but such Grantee Group Participants shall still continue to have all of their respective obligations under this Plan, the applicable Option Agreement and the LP Agreement, to the extent applicable and (B) the determination of the purchase price for Subject Units pursuant to this Section 2.6, in all cases, shall take into account and be reduced by (I) distributions or payments received in respect of the Subject Units to be purchased by the Company, pursuant to the LP Agreement or otherwise, to the extent applicable, after such date of termination and (II) tax distributions made pursuant to the LP Agreement in respect of the Subject Units to be purchased by the Company to the extent such tax distributions were not applied pursuant to the LP Agreement to reduce distributions to which the Grantee Group Participant would have otherwise been entitled with respect to such Subject Units, to the extent applicable.
(b) Termination of Employment. A grantee shall be deemed to have a “termination of employment” for all purposes of this Plan upon (i) the date such grantee ceases to be employed by, or to provide consulting services for, the Company or any member of the Company Group or (ii) the date the grantee ceases to be a manager on the board of managers of the General Partner, in each case, for any reason, whether due to death, Disability, resignation or otherwise; provided, however, that in the case of a grantee (x) who is, at the time of reference, both an employee or consultant and such a manager, such grantee shall be deemed to have a “termination of employment” upon the later of the dates determined pursuant to subparagraphs (i) and (ii) above or (y) who ceases to be engaged as an employee, consultant or such manager and immediately is engaged in another of such relationships with the Company, or any member of the Company Group, such grantee shall not be deemed to have a “termination of employment” until the occurrence of one of the dates determined pursuant to subparagraphs (i) and (ii) above subsequent to such reengagement. In addition, to the extent there is no employment agreement, severance or other agreement entered into as of the date of the grant by the Company of an Option or approved by the General Partner governing the relationship between a grantee and the Company or any member of the Company Group, which agreement explicitly sets forth a procedure for determining whether such grantee’s employment is (or is deemed to have been) terminated for Cause: (i) the determination of whether a grantee’s employment is (or is deemed to have been) terminated for Cause for purposes of this Plan or other purpose related to the foregoing shall be made by the Administrator in its discretion in accordance with the definition of Cause herein; (ii) any rights the Company may have hereunder in respect of the events giving rise to Cause shall be in addition to the rights the Company may have under any other agreement with a grantee or at law or in equity; (iii) if, subsequent to a voluntary termination of employment or an involuntary termination of employment without Cause, it is discovered that the grantee’s employment could have been terminated for Cause, the Administrator may deem such grantee’s employment to have been terminated for Cause and (iv) a termination of employment for Cause shall be effective as of the date of the occurrence of the event giving rise to Cause, regardless of when the determination of Cause is made. In the event of any termination of a grantee’s employment for Cause, including a deemed termination for Cause pursuant to the immediately preceding sentence, the applicable provisions of this Plan pertaining to Cause, including the applicable provisions of Section 2.4 and this Section 2.6 shall apply as if such rights were in effect as of the effective date of the termination of employment and any amounts paid to such grantee pursuant to this Plan or otherwise which are in excess of the amounts to which such grantee would have been entitled upon exercise of the Company’s repurchase right following such termination for Cause shall be immediately reimbursed by the grantee to the Company. Notwithstanding anything in this Plan, any Option Agreement or the LP Agreement to the contrary, in the event that a termination of employment occurs with respect to a grantee for a reason other than for Cause, and during the period following such termination of employment, the grantee breaches any of his or her obligations under any restrictive covenants or confidentiality obligations to which such grantee is bound with respect to the Company Group, the General Partner may deem such grantee’s employment to have been terminated for Cause and the applicable provisions of this Plan, the Option Agreement or the LP Agreement pertaining to Cause shall apply as if such rights were in effect as of the effective date of the termination of employment.
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(a) Procedures. The Company shall exercise any right to purchase Subject Units from a Grantee Group Participant pursuant to this Section 2.6 by delivery to such Grantee Group Participant, within 120 days after the termination of employment of the applicable grantee a written notice (the “Repurchase Notice”) specifying the amount and type of Subject Units to be purchased from such Grantee Group Participant and the applicable purchase price therefor. In the event of a deemed termination for Cause pursuant to Section 2.6(b), such [120]-day period shall commence on the later of the termination of employment and the date that the termination was determined to have been for Cause. Subject to Section 2.6(d), the closing of any purchase of Subject Units from any Grantee Group Participant pursuant to this Section 2.6 shall take place at the principal executive offices of the Company not later than sixty (60) days following receipt of the Repurchase Notice by the Grantee Group Participant. The Company shall give the Grantee Group Participant at least five (5) days’ advance written notice of the date of closing. Each seller of Subject Units pursuant to this Section 2.6 shall execute customary documentation as reasonably requested by the Company to evidence the sale and transfer of such Subject Units pursuant to this Section 2.6. In connection with the foregoing, each seller of Subject Units pursuant to this Section 2.6 shall (i) make customary representations, warranties and indemnities regarding the Transfer of such Subject Units, including as to seller’s authority to sell, good title to, and the absence of liens, encumbrances and restrictions on the sale of, such Subject Units, but shall not be required to make any representations or warranties with respect to the business of the Company and (ii) provide the Company and each of the Partners with a standard release of liability in a form acceptable to the Company. The Company may assign any or all of its rights to purchase Subject Units pursuant to this Section 2.6 to any person or entity designated by the General Partner.
(b) Form of Payment; Deferred Payment. The Company or its assignee will pay cash for any Subject Units to be purchased pursuant to this Section 2.6, payable by delivery of a check or wire transfer of immediately available funds; provided, that if (i) the Company is prohibited from purchasing such Subject Units by any credit agreements or other agreements or instruments governing indebtedness of the Company or any member of the Company Group (“Financing Agreements”) or by applicable law or regulation, (ii) a default has occurred under any Financing Agreement and is continuing or (iii) the purchase of such Subject Units would, or in the good faith opinion of the Administrator might, result in the occurrence of an event of default under any Financing Agreement or create a condition which would or might, with notice or lapse of time or both, result in such an event of default (any of the events or circumstances described in the foregoing clauses (i) through (iii), a “Deferral Condition”), the Company may either (x) notwithstanding Section 2.6(c), defer the closing and make such payment at the earliest practicable date on which no Deferral Condition exists, but no later than sixty (60) days following the cessation of all applicable Deferral Conditions in which event such payment shall accrue interest on a daily basis at a per annum rate equal to five percent (5%) (the “Applicable Rate”) from the latest date that closing could have taken place pursuant to Section 2.6(c) to the date such payment is made or (y) pay the purchase price for such shares of Subject Units with a subordinated note that bears interest at the Applicable Rate from such date, is fully subordinated in right of payment and exercise of remedies to the lenders’ rights under any Financing Agreements and matures on the sixtieth (60th) day following the cessation of all applicable Deferral Conditions.
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(c) Conversion to Economic Rights. Notwithstanding anything in this Plan, any Option Agreement or the LP Agreement to the contrary, immediately upon the occurrence of a termination of employment, the Grantee Group Participants in respect of such grantee subject to the termination of employment shall thereafter automatically cease to have any of the rights or privileges with respect to Common Units that are Subject Units if then held by the Grantee Group Participants (but shall in all cases remain a Partner), other than the economic rights to receive distributions with respect to such Common Units pursuant to the LP Agreement, to the extent applicable (but such Grantee Group Participants’ obligations under this Plan, any applicable Option Agreement, the LP Agreement and all other applicable agreements shall continue to apply in full force and effect) and such Common Units shall be subject to the Company’s repurchase right set forth in this Section 2.6.
2.7 Drag-Along Sales. In the event a Partner (the “Dragging Partner”) causes or seeks to cause a Sale of the Company to a Third Party (a “Drag Sale”) in accordance with Section 9.7 of the LP Agreement and requires the grantees to Transfer, directly or indirectly, all or a portion of their Options and/or take any actions as are necessary to effectuate such Sale of the Company, the grantees shall, subject to the terms and conditions applicable to holders of Options under such Section 9.7, take such actions as directed by the Administrator or the Dragging Partner to effectuate such Sale of the Company, including consenting to, and raising no objections against, the Drag Sale, and if the Drag Sale is structured as (a) a merger, conversion, exchange of units or consolidation of the Company, or a sale of all or substantially all of the Company Group property, voting in favor of the Drag Sale and waiving any appraisal rights or similar rights (in each case, to the extent applicable) in connection with the transaction or (b) a sale of interests in the Company, agreeing to sell all of its Options that are the subject of the Drag Sale, on the terms and conditions of such Drag Sale, which may include a deemed cashless exercise of such Options (if then vested and in-the-money) in exchange for consideration to which a holder of the net number of Common Units received upon such cashless exercise is entitled in the Drag Sale. The grantees shall promptly take all necessary and desirable actions, and execute and deliver such agreements, covenants, documents and other instruments, in each case reasonably requested by the Dragging Partner or the potential acquirer in connection with the consummation of the Drag Sale. Each grantee agrees to be bound by Sections 9.7 and 9.9 of the LP Agreement, which are attached hereto as Exhibit 2.7 and incorporated herein by reference (and the provisions of Exhibit 2.7 shall control in the event of a conflict with this Plan or the applicable Option Agreement).
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2.8 Public Offerings. Upon the determination of the Board to effectuate a Public Offering, each grantee shall, subject to the provisions of Section 9.8 of the LP Agreement applicable to holders of Options, take such actions as are necessary to structure such Public Offering in a manner reasonably determined by the General Partner, including exchanging Options for securities of a newly organized stock corporation or other business entity or subsidiary thereof (“IPO Co.”), causing the public offering of the equity interests in the Company or taking such steps to effect any Transfer, merger, consolidation or other restructuring as may be reasonably requested, including Transferring such grantee’s Options to IPO Co. in exchange for options of IPO Co. Each grantee agrees to be bound by Section 9.8 of the LP Agreement, which is attached hereto as Exhibit 2.8 and incorporated herein by reference (and the provisions of Exhibit 2.8 shall control in the event of a conflict with this Plan or the applicable Option Agreement).
2.9 Disclosure of Other Consideration. In connection with any Sale of the Company or other Transfer of interests in the Company or Options to a Third Party pursuant to the LP Agreement, each grantee agrees to disclose to the Company any compensation or consideration of any type, including in respect of restrictive covenants, to be received by such grantee in connection with any duties, responsibilities or obligations that such grantee will assume after consummation of such Sale of the Company or Transfer of interests or Options. In addition, without the prior approval of the Administrator, which approval will not be unreasonably withheld, conditioned or delayed, no grantee will (x) enter into any agreement with the purchaser or its Affiliates not on prevailing market terms, (y) accept compensation in excess of prevailing market rates for the duties, responsibilities and obligations that such grantee will assume after consummation of such Sale of the Company or Transfer of interests or Options or (z) accept any consideration for restrictive covenants unless such consideration is part of the distribution to Partners in connection with such Sale of the Company or Transfer of interests or Options pursuant to the LP Agreement.
2.10 Non-Disparagement. Each grantee agrees that, at all times following the grant of Options to such grantee hereunder, such grantee shall not (and shall cause its Affiliates not to), directly or indirectly, on his or her or its behalf or on behalf of any other person or entity, (a) take any action that is intended, or could reasonably be expected, to harm, disparage, defame, slander or lead to unwanted or unfavorable publicity for any member of the Company Group or any Affiliate thereof (including the Sponsor Partners), or otherwise take any action that could reasonably be expected to detrimentally affect the reputation, image, relationships or public view of any member of the Company Group or any Affiliate thereof or (b) attempt to do any of the foregoing, or assist, entice, induce or encourage any other person or entity to do or attempt to do any activity which, were it done by such grantee, would violate any provision of this Section 2.10; provided, however, that no person or entity shall be prohibited by this Section 2.10 from (x) making truthful statements when required by order of a court or other body of competent jurisdiction or as required by law or (y) taking any good faith action to enforce legal or contractual rights, or pursuing in good faith claims relating thereto, against a person or entity. The grantees acknowledge that the respective covenants contained in this Section 2.10 are reasonable and necessary to protect the legitimate interests of the Partners and the Company Group and constitute a material inducement to the Company to adopt this Plan and enter into the Option Agreements and consummate the transactions contemplated by this Plan and the Option Agreements.
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2.11 Confidential Information. Each grantee agrees to be bound by Section 14.1 of the LP Agreement, which is attached hereto as Exhibit 2.11 and incorporated herein by reference (and the provisions of Exhibit 2.11 shall control in the event of a conflict with this Plan or the applicable Option Agreement).
ARTICLE III
Miscellaneous
3.1 Amendment of the Plan; Modification of Options.
(a) Amendment of the Plan. The Administrator may from time to time suspend, discontinue, revise or amend this Plan in any respect whatsoever, including as necessary to prevent an Option from being subject to tax under Section 409A of the Code, subject to the requirements of Section 3.1(b) relating to outstanding Option Agreements.
(b) Modification of Options. Subject to the further provisions of this Section 3.1(b), the Administrator may cancel or amend any outstanding Option Agreement, including, without limitation, by amendment which would: (i) accelerate the time or times at which the Option becomes unrestricted or vested or may be exercised or (ii) waive or amend any goals, restrictions or conditions set forth in the Option Agreement, in each case, consistent with the terms of this Plan. However, any such cancellation or amendment that materially impairs the rights or materially increases the obligations of a grantee under an outstanding Option Agreement or Option shall be made only with the consent of the grantee (or, upon the grantee’s death, the person having the right to exercise the Option), subject to Sections 1.2(b)(iii), 1.2(b)(v), 1.2(b)(vi), 2.7, 2.8, 3.4 and 3.10 hereof, in which case the grantee or other person or entity shall have no such consent right if such provisions are complied with.
3.2 Consent Requirement.
(a) No Plan Action without Required Consent. If the Administrator shall at any time determine that any Consent (as hereinafter defined) is necessary or desirable as a condition of, or in connection with, the granting or repurchase of any Option, the issuance or repurchase of Common Units or the exercise of other rights hereunder or under any Option Agreement or the taking of any other action hereunder or under any Option Agreement (each such action being hereinafter referred to as a “Plan Action”), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Administrator.
(b) Consent Defined. The term “Consent” as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the disposition of Options or Common Units, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies.
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3.3 Withholding Taxes. Whenever the Company shall be obligated to withhold any amounts in respect of an Option for federal, state and other governmental tax withholding requirements, the Administrator may require as a condition to exercise that the grantee make arrangements that are acceptable to the Administrator for the satisfaction of such withholding requirements.
3.4 Adjustment Upon Changes in Capitalization.
(a) Corporate Events. In the event of any change in the number of Common Units outstanding by reason of any Common Unit dividend or split or reverse split, recapitalization, merger, consolidation, combination or exchange of Common Units or similar change to the Company’s capital structure (but not, for the avoidance of doubt, any issuance of Common Units or Options or other securities of the Company except as specified above or any increase in the number of authorized Common Units or Options or other securities of the Company or any cash or in-kind dividend or distribution except as specified above) (collectively referred to as “corporate events”), the Administrator shall make the following adjustments to the extent necessary to prevent the enlargement or dilution of rights of grantees (which may include different treatment for Vested Options relative to Unvested Options in the Administrator’s sole discretion), subject in each case to Sections 2.7, 2.8, 3.4(b), (c) and (d), which shall control in the event of a conflict:
(i) Common Units Available for Grants. The maximum number of Common Units with respect to which the Administrator may grant Options under Article II hereof, as described in Section 1.4(a), shall be appropriately adjusted by the Administrator.
(ii) Options. In the event of any increase or decrease in the number of issued Common Units or a change in the class of Common Units resulting from a corporate event, the Administrator shall proportionally adjust the number or class of Common Units subject to each outstanding Option and the exercise price-per-Common Unit of each such Option to prevent enlargement or dilution of rights of grantees. Such adjustment shall be made in accordance with the requirements of Treasury Regulation § 1.409A-1(b)(5)(v)(D).
(b) Outstanding Options – Certain Mergers. In the event of a Sale of the Company in which the Company is the surviving entity (except a Sale of the Company as a result of which the holders of Common Units receive securities of another entity and/or other property, including cash), (i) all Unvested Options and out-of-the-money Vested Options will be forfeited automatically without consideration unless otherwise determined by the Administrator in its sole discretion and (ii) subject to Sections 2.7 and 2.8, which shall control in the event of a conflict, each other Vested Option outstanding on the date of such Sale of the Company shall be exercisable for the securities which a holder of the number of Common Units subject to such Option, taking into account the Option Exercise Price of such Option, would have received in such Sale of the Company.
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(c) Outstanding Options – Certain Other Transactions. In the event of (x) a Sale of the Company in which the Company is not the surviving entity or (y) a Sale of the Company in which the Company is the surviving entity but the holders of Common Units receive securities of another entity and/or other property, including cash, (A) all Unvested Options and out-of-the-money Vested Options will be forfeited automatically without consideration unless otherwise determined by the Administrator in its sole discretion and (B) subject to Sections 2.7 and 2.8, which shall control in the event of a conflict, with respect to each other Vested Option outstanding, the Administrator shall, in its sole discretion, have the power to take any or all of the following actions:
(i) cancel, effective immediately prior to the occurrence of such event, each such Vested Option outstanding immediately prior to such event, and, in full consideration of such cancellation, pay to the holder of such Option an amount in cash or such other property, for each Common Unit subject to such Option, equal to the excess of (A) the Fair Market Value of the property (including cash) received or receivable by the holder of a Common Unit as a result of such event over (B) the Option Exercise Price of such Option; or
(ii) provide consideration for such Vested Options in the form of options in the purchasing or surviving entity having value equivalent to that of the Fair Market Value of the Options being exchanged, taking into account the Option Exercise Price and other relevant features of such Options (which options in the purchasing or surviving entity shall have the same rights and obligations as the Options exchanged in such transaction).
(d) Outstanding Options – Other Changes. In the event of any change in the capitalization of the Company or a corporate change other than those specifically referred to in Sections 3.4(a), (b) or (c) hereof, the Administrator shall make such adjustments in the number and class of Common Units or other property subject to Options outstanding on the date on which such change occurs and in the per-Common Unit exercise price of any Option as the Administrator may consider appropriate to prevent dilution or enlargement of rights.
(e) Valuation of In-Kind Distributions. In determining the Fair Market Value of any assets in connection with in-kind distributions (or exchanges into assets other than cash or securities) to be made to holders of Options pursuant to this Section 3.4, the Administrator will apply the same valuation to such assets to be distributed to or exchanged for Options as was applied to such assets in connection with a distribution or exchange with respect to Common Units.
(f) Action in Accordance with Certain Provisions and Related Matters. With respect to any action taken or determination made in accordance with this Section 3.4 or Section 2.7 or 2.8, there shall be no breach by the Administrator, any Partner, the Company or the Board of any duty or obligation to any grantee as a result thereof or of any resulting action, and no grantee shall have any basis to object to any such determination or action if consistent with this Section 3.4, Section 2.7 or 2.8 of this Plan.
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3.5 No Other Rights; Other Obligations.
(a) Except as expressly provided in this Plan, the applicable Option Agreement or the LP Agreement, as applicable, no grantee shall have any rights by reason of any subdivision or consolidation of Common Units, the payment of any dividend, distribution or any increase or decrease in the number of Common Units or Options provided in this Plan or the LP Agreement, as applicable, and no issuance by the Company of Common Units, or securities convertible into Common Units including Options, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Common Units subject to an Option or the Option Exercise Price of any Option. A grant of an Option to a grantee shall not, by itself, entitle such grantee to any additional Options at any other time and Options granted at different times to the same grantee need not contain similar provisions, except as explicitly provided herein.
(b) Notwithstanding anything contained in this Plan, any Option Agreement or under applicable principles of law to the contrary, each grantee in his or her capacity as an officer or employee, as applicable, of the Company or any member of the Company Group shall have the duties and obligations (including fiduciary duties in relation to self-dealing, corporate opportunities, care and otherwise) that would apply to such officer or employee, as applicable, of a Delaware corporation as to such corporation and its equityholders and other constituents.
3.6 Nature of Payments.
(a) Consideration for Services Performed. Any and all grants of Options and issuances of Common Units under this Plan shall be compensation in consideration of services performed for the Company by the grantee.
(b) Not Taken into Account for Benefits. All such grants and issuances shall constitute a special incentive compensation payment to the grantee and shall not be taken into account in computing the amount of salary or compensation of the grantee for the purpose of determining any benefits under any pension, retirement, profit-sharing, bonus, life insurance or other benefit plan of the Company or under any agreement between the Company and the grantee, unless such plan or agreement specifically otherwise provides.
3.7 Non-Uniform Determinations. The Administrator’s determinations under this Plan need not be uniform and may be made by it selectively among persons or entities who receive, or who are eligible to receive, Options under this Plan (whether or not such persons or entities are similarly situated). Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations and to enter into non-uniform and selective Option Agreements, as to (a) the persons or entities to receive Options under this Plan, (b) the terms and provisions of Options under this Plan and (c) the treatment of leaves of absence in accordance with Section 1.5(e).
3.8 Other Payments or Options. Nothing contained in this Plan shall be deemed in any way to limit or restrict the Company from granting any Option or making any payment to any person or entity under any other plan, arrangement or understanding, whether now existing or hereafter in effect.
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3.9 Effective Date and Term of Plan.
(a) Adoption. This Plan is effective as of [•], 2015 (the “Effective Date”).
(b) Termination of Plan. Subject to Section 2.2(c), this Plan shall remain in effect until all Common Units provided for issuance upon exercise of Options under this Plan have been issued or until the earlier termination of this Plan by the Administrator. Termination of this Plan shall not affect the terms or conditions of an award made prior to such termination unless otherwise in compliance with the terms of this Plan and the applicable Option Agreement (subject to amendment as contemplated hereby).
3.10 Deferred Compensation. Options granted under this Plan are intended not to constitute nonqualified deferred compensation for purposes of the requirements of Section 409A of the Code, and to the extent that they do constitute nonqualified deferred compensation, to comply with Section 409A of the Code, so that the grantees will not be subject to taxation under Section 409A of the Code, and this Plan and each Option Agreement shall be interpreted and/or amended accordingly.
3.11 No Right to Continued Employment/Service. Nothing contained herein or in any Option Agreement shall (a) require the Company Group to continue any grantee in its employ or service or require any grantee to continue in the employ or service of the Company Group, (b) affect any right which the Company Group may have to terminate such employment or service or (c) be deemed to give any person or entity (other than a grantee, once he or she is awarded Options) any right to participate in this Plan.
3.12 Information Rights. Without limiting the generality of the broader limitations set forth in this Plan, unless otherwise required by law, each grantee will only be entitled to access to information concerning the Company, if any, as determined by the Administrator. In no event will any grantee be entitled to any information relating to any member of the Company or any other grantee, including the amount of any awards made to any other grantee or rights associated therewith.
3.13 No Trust or Fund Created. Neither this Plan nor any award made under this Plan shall create or be construed to create a trust, partnership or fiduciary relationship between the Company or any Affiliate thereof or any Partner or the Administrator or its members, on the one hand, and a grantee or any other person or entity, on the other hand, and neither the Company nor its Partners nor the Administrator nor its members shall have any duty or obligation with respect to this Plan other than as expressly set forth herein.
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3.14 Governing Law; Venue; Waiver of Jury Trial. All questions concerning the construction, validity and interpretation of this Plan and any applicable Option Agreement, together with any dispute arising hereunder or thereunder, shall be governed by the internal laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule, notwithstanding that public policy in Delaware or any other forum or jurisdiction might indicate that the laws of that or any other jurisdiction should otherwise apply based on contacts with such state or otherwise. Any legal action or proceeding arising out of or relating to this Plan or any applicable Option Agreement shall be brought exclusively in the courts of the State of New York or any federal court of the Southern District of New York (in each case located in the Borough of Manhattan) and each grantee expressly submits to the personal jurisdiction and venue of such courts for the purposes thereof and expressly waives any claim of improper venue and any claim that such courts are an inconvenient forum. Each grantee hereby irrevocably consents to the service of process of any of the aforementioned courts in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the address provided in accordance with Section 3.15, such service to become effective ten (10) days after such mailing. EACH GRANTEE ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS PLAN OR APPLICABLE OPTION AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH GRANTEE HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT HE OR SHE MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS PLAN OR APPLICABLE OPTION AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS PLAN OR APPLICABLE OPTION AGREEMENT. EACH GRANTEE CERTIFIES AND ACKNOWLEDGES THAT (I) EACH GRANTEE UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND (II) EACH GRANTEE MAKES THIS WAIVER VOLUNTARILY.
3.15 Notifications. Any notice, demand, consent, election, offer, approval, request or other communication (collectively, a “notice”) required or permitted under this Plan or the applicable Option Agreement must be in writing and either delivered personally, sent by certified or registered mail, postage prepaid, return receipt requested or sent by recognized overnight delivery service, confirmed electronic mail (e-mail) or by confirmed facsimile transmittal. A notice must be addressed: (a) if to a grantee, to such grantee’s last known address as set forth in the applicable Option Agreement or at such other address as such grantee may designate from time to time by written notice to the Company; and (b) if to the Company, to the attention of the Chief Executive Officer at 1194 Oak Valley Drive, Suite 80, Ann Arbor, Michigan 48108. Any grantee or the Company may designate, by notice to the Company or the grantee, as applicable, substitute addresses or addressees for notices; thereafter, notices are to be directed to those substitute addresses or addressees.
3.16 Specific Performance. Each grantee recognizes that irreparable injury may result from a breach of any provision of this Plan or the applicable Option Agreement and that money damages may be inadequate to fully remedy the injury. Accordingly, in the event of a breach or threatened breach of one or more of the provisions of this Plan or the applicable Option Agreement, any party which may be injured (in addition to any other remedies which may be available to that party) shall be entitled to seek one or more preliminary or permanent orders (a) restraining and enjoining any act which would constitute a breach or (b) compelling the performance of any obligation which, if not performed, would constitute a breach, all without the need to post a bond and in an expedited hearing.
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3.17 Complete Agreement. This Plan and the applicable Option Agreement, together with the schedules and exhibits hereto and each other document, instrument and agreement executed in connection herewith, constitutes the entire agreement and understanding among the parties with respect to the subject matter hereof and thereof, and supersedes all prior agreements or arrangements (written and oral), including any prior representation, statement, condition or warranty between or among the parties relating to the subject matter hereof and thereof. This Plan and such applicable Option Agreement is binding upon, and inures to the benefit of, the Company and the applicable grantee hereto and their respective personal and legal representatives, heirs, executors, successors and permitted assigns. No Transfer by a grantee of any right or obligation under this Plan or an Option Agreement is permitted except as expressly set forth in this Plan or such Option Agreement.
3.18 Set-off Rights. Notwithstanding any provision of this Plan or the applicable Option Agreement to the contrary, after it has been determined by a court of competent jurisdiction, an independent arbitral tribunal or an agreement between Obligor and Obligee (a “Final Determination”) that any grantee (for purposes of this Section 3.18, an “Obligor”) owes amounts: (a) to the Company Group or (b) solely with respect to the Company Group or its business, any Partner or any of its or their Affiliates (each, an “Obligee”), including pursuant to or in connection with any other document, agreement or arrangement pursuant to which an Obligor or any of its Affiliates and an Obligee or any of its Affiliates are parties (any such amounts, the “Unpaid Indemnity Amount”), in addition to any other rights or remedies available to the Obligee at law or in equity or otherwise under any other document, agreement or arrangement pursuant to which an Obligor or any of its Affiliates and an Obligee or any of its Affiliates are parties, such Obligee shall have the right, to the extent permitted by applicable law, to, or to cause the Company to, set off any Unpaid Indemnity Amount against and deduct from any distributions or payments otherwise required to be made to such Obligor under this Plan or under any Option Agreement or under any other agreement to which the Company or any of its Affiliates and such Obligor or any of its Affiliates are parties and such distributions or payments shall (i) be remitted to the Obligee until such time as the entire amount of such Unpaid Indemnity Amount has been recovered by the Obligee and (ii) be treated for all purposes of this Plan or applicable Option Agreement as a distribution or payment to the applicable Obligor or applicable person or entity otherwise entitled to such amounts. The foregoing notwithstanding, (x) nothing in this Plan or applicable Option Agreement shall relieve or affect the obligation of any Obligor or any of its Affiliates or other persons or entities to make payments to the Obligee or any of its Affiliates under and in accordance with this Plan or applicable Option Agreement or any other document, agreement or arrangement pursuant to which an Obligor or any of its Affiliates and an Obligee or any of its Affiliates are parties and (y) during the pendency of any dispute that could result in a Final Determination of any Unpaid Indemnity Amount, the Company shall, and shall cause its Affiliates to, set aside any amounts otherwise distributable or payable to the Obligor or any of its Affiliates until there is a Final Determination that all or any portion of the Unpaid Indemnity Amount is required to be paid by such Obligor or any of its Affiliates.
3.19 Severability. It is expressly understood and agreed that although the parties hereto consider the restrictions and terms contained in this Plan or applicable Option Agreement to be reasonable and necessary for the purpose of, among other things, preserving the goodwill, proprietary rights and going concern value of the Company, if any provision of this Plan or applicable Option Agreement or the application of any such provision to any party or circumstance shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Plan and applicable Option Agreement, or the application of such provision to any party or circumstance other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof or thereof shall be enforced to the full extent permitted by law. If a duly appointed arbitrator or court of competent jurisdiction declares or finds that any term or provision hereof or thereof is invalid or unenforceable, the parties hereto agree that such arbitrator or court shall have the power to reduce the scope, duration or area of the term or provision, or to delete specific words or phrases, and to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Plan or applicable Option Agreement shall be enforceable as so modified.
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3.20 Rights and Remedies Cumulative. The rights and remedies provided by this Plan and the applicable Option Agreement or the LP Agreement, if applicable, are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Such rights and remedies are given in addition to any other rights the parties may have by law or otherwise.
3.21 No Third Party Beneficiaries. This Plan and the applicable Option Agreement are solely and specifically between and for the benefit of the Company and the applicable grantee, and their respective personal and legal representatives, heirs, executors, successors and permitted assigns, and no other person or entity, unless express provision is made herein or therein to the contrary, shall have any rights, interests or claims hereunder or thereunder or be entitled to any benefits under or on account of the foregoing as a third party beneficiary or otherwise.
* * * * *
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EXHIBIT 2.7
This Exhibit 2.7 sets forth Sections 9.7 and 9.9 of the LP Agreement.
Capitalized terms that are used in this Exhibit 2.7 shall have the definitions given to such terms in “Exhibit Definitions” which follows Exhibit 2.11. In the event that any such capitalized term is defined both in the Plan and in “Exhibit Definitions,” such capitalized term shall have the definition given to it in “Exhibit Definitions.”
Section 9.7 Drag-Along Rights.The Sponsor Partners (acting by Majority Vote of the Sponsor Partners) may, at any time, cause a Sale of the Partnership to a Third Party (which shall include without limitation a transaction in which a portion of the Interests are “rolled over” into equity of the Third Party purchaser or successor entity in connection with such Sale of the Partnership) (a “Drag Sale”), and, in such a case, the Sponsor Partners (the “Dragging Partners”) may require all other Partners and holders of Options and their respective Affiliates (the “Dragged Partners”) to Transfer, directly or indirectly, all or a portion of their Interests or Options and/or take such actions as are necessary to effectuate such Sale of the Partnership in accordance with this Section 9.7.
(b) Not less than thirty (30) days prior to the proposed date of consummation of a Drag Sale, the Dragging Partners shall cause written notice (a “Drag-Along Notice”) to be sent to all other Dragged Partners, which Drag-Along Notice shall set forth: (i) the intention of the Dragging Partners to initiate the drag-along rights under this Section 9.7; (ii) the name of the intended Third Party purchaser(s); (iii) the proposed amount and type of consideration to be paid in the Drag Sale; and (iv) any other information deemed to be appropriate by the Dragging Partners relating to such Drag Sale.
(c) In connection with any such Drag Sale, all Partners and holders of Options entitled to consent thereto shall consent to, and raise no objections against, the Drag Sale, and if the Drag Sale is structured as (i) a merger, conversion, exchange of Units or consolidation of the Partnership, or a sale of all or substantially all of the Partnership Property, each Dragged Partner entitled to vote thereon shall vote in favor of the Drag Sale and shall waive any appraisal rights or similar rights (to the extent applicable) in connection with the transaction, or (ii) a sale of Interests, each Dragged Partner shall agree to sell all of its Interests and/or Options that are the subject of the Drag Sale, on the terms and conditions of such Drag Sale, which in the case of the Options, may include a deemed cashless exercise of such Options (if then vested and in-the-money) in exchange for consideration to which a holder of the net number of Common Units received upon such cashless exercise is entitled in the Drag Sale determined on a Fully Diluted basis. The Dragged Partners shall promptly take all necessary and desirable actions, and execute and deliver such agreements, covenants, documents and other instruments, in each case reasonably requested by the Dragging Partners or the potential acquirer in connection with the consummation of the Drag Sale, including, without limitation, to (A) provide customary representations, warranties, indemnities and escrow/holdback arrangements relating to such Drag Sale (subject to Section 9.7(d)(iii)), in the case of this clause (A) to the extent that each other Dragged Partner and the Dragging Partners are similarly obligated; and (B) effectuate the allocation and distribution of the aggregate consideration from the Drag Sale based upon the distribution provisions of Section 5.10(c) (assuming, for this purpose, a sale of 100% of the Partnership based on the valuation implied by such transaction) on an as-exercised basis with respect to vested Options and with due regard for the Exercise Price for such Options. Unvested Options, together with out-of-the-money Vested Options, will not participate in such consideration and will be forfeited automatically without consideration upon the consummation of a Sale of the Company unless otherwise determined by the General Partner in its sole discretion.
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(d) The obligations of the Dragged Partners pursuant to this Section 9.7 are subject to the following terms and conditions:
(i) upon the consummation of the Drag Sale, each Dragged Partner shall be entitled to receive out of the proceeds from such Drag Sale an amount equal to that which such Dragged Partner would receive if all of the net proceeds from such Drag Sale were distributed in the manner set forth in Section 5.10(c) (assuming, for this purpose, a sale of 100% of the Partnership based on the valuation implied by such transaction) on an as-exercised basis with respect to vested Options and with due regard for the Exercise Price for such Options;
(ii) subject to Section 9.7(e), if any Partner is given an option as to the form and amount of consideration to be received, all Dragged Partners shall be given the same option;
(iii) no Dragged Partner shall be required to provide any representations, warranties or related indemnities for breach thereof in connection with the Drag Sale, other than customary (including with respect to qualifications) representations, warranties and indemnities, subject to any exceptions set forth on a disclosure schedule, concerning (A) such Dragged Partner’s valid title to and ownership of Units or Options, free and clear of all liens, claims and encumbrances (excluding those arising under applicable securities Laws), (B) such Dragged Partner’s authority, power and right to enter into and consummate such Drag Sale, (C) the absence of any violation, default or acceleration of any agreement to which such Dragged Partner is subject or by which its assets are bound, (D) the absence of, or compliance with, any governmental or third party consents, approvals, filings or notifications required to be obtained or made by such Dragged Partner in connection with such Drag Sale, (E) compliance by such Dragged Partner with applicable Laws and (F) other matters to the extent the Dragging Partners and each other Dragged Partner is similarly obligated, including by having a portion of the consideration being placed in escrow for the benefit of the proposed Third Party purchaser (each Partner’s or Option holder’s contributions to such escrow being proportionate based on each such Partner’s or Option holder’s pro rata share of the amount placed into escrow that each Partner or Option holder would be entitled to receive upon release of such funds from escrow in full after taking into account all prior distributions made to the Partners (excluding for such purpose the amount being contributed into escrow) in connection with the Sale of the Partnership in the manner set forth in Section 5.10(c)) on an as-exercised basis with respect to vested Options and with due regard for the Exercise Price for such Options;
(iv) no Dragged Partner shall be liable for, or obligated with respect to, the inaccuracy of any representation or warranty made by another Person (other than the Partnership) in connection with a Drag Sale (except to the extent that all or a portion of funds payable to a Dragged Partner are paid out of an escrow established for the benefit of the proposed Third Party purchaser and subject to offsets or reductions); and
(v) no Dragged Partner will have any liability in respect of such Drag Sale for any breach of representation or warranty in excess of its ratable share of any purchase price escrow, except for the Dragged Partner’s representations and warranties with respect to itself set forth in Section 9.7(d)(iii)(A) through (E), which liability for breaches of such representations and warranties will not exceed the purchase price actually received by such Dragged Partner.
(e) Notwithstanding anything to the contrary in this Section 0, if the consideration proposed to be paid to Partners or Option holders in a Drag Sale includes securities with respect to which no registration statement covering the issuance of such securities has been declared effective under the Securities Act, then each Partner or Option holder that is not then an “accredited investor” (as such term is defined in Rule 501 under the Securities Act) may be required (notwithstanding Section 9.7(d)(ii)), at the request and election of the Dragging Partners, to (i) appoint a purchaser representative (as defined in Rule 501 under the Securities Act) reasonably acceptable to such Partner or Option holder or (ii) accept cash in lieu of any securities such Partner would otherwise receive in an amount equal to the Fair Market Value of such securities.
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(f) The Dragging Partners shall have the right in connection with any such transaction (or in connection with the investigation or consideration of any such potential transaction) to require the Partnership to cooperate fully with potential Third Party purchaser(s) in such prospective Sale of the Partnership by taking all customary and other actions reasonably requested by such Dragging Partners. The Partnership and each Partner or Option holder shall provide assistance with respect to these actions as reasonably requested by the Dragging Partners.
Section 9.9 Provisions Regarding Blockers. Notwithstanding anything contained herein to the contrary, (a) so long as any Sponsor Partner elects to hold (or whose owners hold), directly or indirectly, all or any portion of its Interests through one or more Persons treated as a domestic corporation for U.S. federal income tax purposes (each, a “Blocker”), each such Sponsor Partner shall have the right to participate in or effectuate any Transfer permitted under Article IX (a “Sale Transaction”) by Transferring all or a portion of such Sponsor Partner’s (or its owners’ or Affiliates’) interest in the Blocker (a “Blocker Sale”) in lieu of the Transfer of any Interests and (b) each Partner participating in any such Sale Transaction shall take all actions reasonably requested by such Sponsor Partner to facilitate such Blocker Sale. Each Partner shall be entitled to (i) the aggregate consideration (whether made in consideration for the Blocker or for any Interests) available for distribution to the sellers allocated among them in accordance with this Agreement as if the Partners sold the Interests or Units directly and (ii) the same price for all Interests or Units of the same type whether held directly or indirectly through a Blocker, in each case, (x) regardless of whether such Transfer is structured as a Blocker Sale and (y) with the Partners hereby agreeing that the aggregate consideration received by all Partners in connection with such transaction shall be allocated and distributed based upon the distribution provisions of Section 5.10(c) (assuming, for the purposes of this Section 9.9, a sale of 100% of the Partnership based on the valuation implied by such transaction).
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EXHIBIT 2.8
This Exhibit 2.8 sets forth Section 9.8 of the LP Agreement. Capitalized terms that are used in this Exhibit 2.8 shall have the definitions given to such terms in “Exhibit Definitions” which follows Exhibit 2.11. In the event that any such capitalized term is defined both in the Plan and in “Exhibit Definitions,” such capitalized term shall have the definition given to it in “Exhibit Definitions.”
Section 9.8 Provisions Regarding Initial Public Offerings.Upon the determination of the General Partner to effectuate an initial public offering by the Partnership, any Subsidiary or any holder of equity interests in the Partnership or any Subsidiary (or any successor of the Partnership or any equity holder or Subsidiary) by means of a primary offering covering the registration of equity securities of the Partnership or such equity holder or Subsidiary thereof (or such successor) pursuant to an effective registration statement under the Securities Act, or similar rules of a non-U.S. jurisdiction, the General Partner and each Partner or Option holder shall take such actions as are necessary to structure such initial public offering in a manner reasonably determined by the General Partner, including exchanging Interests for securities of IPO Co., causing the public offering of the equity interests in the Partnership or any of the Transfers, mergers, consolidations or restructurings pursuant to clause (b) below, and making any such amendments to this Agreement as may be deemed by the General Partner to be necessary to facilitate such initial public offering.
(h) Notwithstanding anything to the contrary contained herein, in the event of a determination by the General Partner to cause (i) a Transfer of all or substantially all of the Partnership Property or the Interests to a newly organized stock corporation or other business entity or Subsidiary thereof (“IPO Co.”), (ii) a merger of the Partnership into IPO Co. by merger, consolidation or otherwise, or (iii) any other restructuring of the Interests, in any such case in anticipation of an initial public offering, as contemplated by Section 9.8(a), that is approved by the General Partner, the General Partner and each Partner and Option holder shall take such steps to effect such Transfer, merger, consolidation or other restructuring as may be requested, including, Transferring such Partner’s Interests or Option holder’s Options to IPO Co. in exchange for capital stock or Options of IPO Co. At the request of the General Partner, in structuring an initial public offering as contemplated by Section 9.8(a), the Partnership shall use commercially reasonable best efforts to effect a merger or other combination of the Partnership and one or more of the Sponsor Partners or Blockers through which the Sponsor Partners hold (directly or indirectly) their respective interests in the Partnership in a manner that is tax efficient for both the Partnership and the Sponsor Partners, including contributing or merging such Blockers into the IPO Co. in a tax-free reorganization, utilizing such Blocker as the IPO Co., or utilizing another structure so that such Sponsor Partner or its limited partners or investors is not subject to a level of corporate tax on the initial public offering or subsequent gains on the sale of shares of IPO Co.
(i) Notwithstanding anything contained herein to the contrary, but subject to the foregoing clauses (a) and (b), the restrictions set forth in this Article IX shall terminate upon consummation of an initial public offering contemplated by Section 9.8(a), except as otherwise determined by the General Partner.
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EXHIBIT 2.11
This Exhibit 2.11 sets forth Section 14.1 of the LP Agreement. Capitalized terms that are used in this Exhibit 2.11 shall have the definitions given to such terms in “Exhibit Definitions” which follows this exhibit. In the event that any such capitalized term is defined both in the Plan and in the “Exhibit Definitions,” such capitalized term shall have the definition given to it in “Exhibit Definitions”.
Section 14.1 Confidential Information.
(j) Except as otherwise necessary or advisable in the performance of his or her duties as an officer, manager, employee or consultant of the Partnership or any Affiliate thereof, each Partner agrees (and shall cause its Affiliates to) (each of the foregoing, in such capacity, the “Disclosing Person”) to:
(i) hold in the strictest confidence and not (x) use in any manner detrimental to the business of the Partnership and its Affiliates or any Partner or its Affiliates, or (y) disclose, publish or divulge, directly or indirectly, to any Person, any Confidential Information regarding the Partnership or any of its Affiliates or any Partner (each a “Protected Person”);
(ii) use such Confidential Information only in relation to the Partnership and its Affiliates and only for its and their valid business purposes; and
(iii) take such other protective measures as may be or become reasonably necessary to preserve the confidentiality of such Confidential Information.
Notwithstanding the foregoing, each Partner shall be permitted to disclose Confidential Information of the Partnership or any of its Affiliates to any of such Person’s Representatives so long as such Representative has a “need to know” such Confidential Information for a valid business purpose and has been advised of the confidential and proprietary nature of such Confidential Information and has agreed to comply with the provisions of this Section 14.1 applicable to such Confidential Information; provided that, the party disclosing any such Confidential Information to its Representatives shall be liable for any breach of this Section 14.1 by any such Representative. For purposes of this Agreement, the term “Representatives” means, with respect to a Partner, such Partner’s officers, directors, employees, shareholders, partners, members, affiliates, accountants, attorneys, consultants, co-investors, investors, potential partners, financing sources, bankers, advisors, other agents or representatives and, in the case of any Sponsor Partner, proposed transferees.
(k) For the purpose of this Agreement, the term “Confidential Information” shall include, with respect to each Protected Person, all data, information, reports, interpretations, forecasts and records, financial or otherwise, including Partnership Property and information related to the financial performance and results of the business of the Partnership and its Subsidiaries that is not available to the general public and this Agreement, the terms hereof and all agreements and documents related hereto. The term “Confidential Information” does not include information that: (i) is or becomes generally available to the public other than as a result of a disclosure by any Disclosing Person; (ii) was or becomes available to a Disclosing Person on a non-confidential basis from a source other than the Protected Person; provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to such Protected Person with respect to such information; (iii) is developed independently by the Disclosing Party without the use of any Confidential Information (other than in such Person’s capacity as an officer, manager, employee or consultant of the Partnership or its Affiliates); (iv) is required to be disclosed by order of a court of competent jurisdiction, administrative agency or governmental body, or by any Law, rule or regulation, or by subpoena, summons or any other administrative or legal process, or by applicable regulatory standards, after notice of such requirement has been given to the Protected Person, and the Protected Person has had a reasonable opportunity to oppose such disclosure; or (v) is disclosed with the written approval of (A) the General Partner with respect to Confidential Information related to the Partnership or its Affiliates, including this Agreement, the terms hereof and all agreements and documents related hereto or (B) the Protected Person if other than the Partnership or its Affiliates.
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(l) Return of Confidential Information. Upon the Partnership’s request at any time following an Employee Partner’s termination of employment or any other time as requested by the Partnership, such Employee Partner shall deliver to the Partnership (or, if requested by the Partnership, destroy and certify in writing as to such destruction), and not retain for such Person’s or any other Person’s use, any and all records, electronic data, files, memoranda, documents and materials of any type, and all copies, excerpts and notes thereof containing any Confidential Information or other information or material of or concerning any customers, prospective customers, brokers, consultants, funding sources, services, projects, programs or business of the Partnership or any Affiliate thereof, about which such Employee Partner obtains knowledge during the course of his or her employment by or relationship with the Partnership or any Affiliate thereof.
(m) Notwithstanding anything contained in this Section 14.1 to the contrary, with respect to any Employee Partner who is party to a written employment agreement with the Partnership or any Subsidiary that includes provisions regarding confidentiality that conflict with this Section 14.1 and that has been approved by the General Partner, the confidentiality provisions contained in such employment agreement that so conflict with this Section 14.1 shall supersede this Section 14.1.
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Exhibit Definitions
“Act” means the Delaware Revised Uniform Limited Partnership Act (Del. Code Ann. tit. 6, § 17-101 et seq.), as adopted by the State of Delaware and as amended from time to time.
“Affiliate” means with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such Person. For purposes of this definition, “control,” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of equity interests, by contract or otherwise; and the terms “controlling” and “controlled” have correlative meanings to the foregoing. Any investment fund of a Sponsor Partner or its Affiliates shall be deemed to be an Affiliate of such Sponsor Partner. Notwithstanding the foregoing, for purposes of this Agreement, none of the Partners (other than the General Partner) or their Affiliates, solely by virtue of being Partners of the Partnership, shall be considered Affiliates of any other Partners or such other Partners’ Affiliates or Affiliates of the Partnership or any of its Subsidiaries.
“Agreement” means this Amended and Restated Agreement of Limited Partnership of the Partnership, including the schedules and exhibits attached hereto, as the same may be amended, supplemented, modified and/or restated from time to time in accordance with the terms hereof.
“Code” means the United States Internal Revenue Code of 1986, as amended, or any corresponding provision of any succeeding Law.
“Common Units” means the common units of the Partnership designated as “Common Units” representing an Interest in the Partnership having the rights, preferences and privileges applicable to holders of Common Units hereunder.
“Exercise Price” means the “Option Exercise Price” as such term is defined in the Option Plan.
“Fair Market Value” means, with respect to any asset as of any given date of determination, the fair market value thereof as determined in good faith by the General Partner, based upon usual and customary valuation analyses that are consistent with the methodologies generally used by the Sponsor Partners.
“Fiscal Year” means each twelve (12) month period commencing on January 1 and ending on December 31, or such other period as may be required by the Code or the Regulations.
“Fully Diluted” means with respect to the Common Units, as of a particular time, the total number of outstanding Common Units as of such time, as determined by treating all outstanding options, warrants and other rights for the purchase or other acquisition of Common Units (including Options) (but only to the extent they are then vested, convertible, exercisable or exchangeable and “in-the-money”) as having been converted, exercised or exchanged in full with payment of any exercise price or its equivalent in cash in full.
“General Partner” means Home Point Capital GP LLC, a Delaware limited liability company, as the sole general partner of the Partnership,
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“General Partner Interest” means the Interests owned by the General Partner.
“Initial Sponsor Partners” means, collectively, Trident VI, L.P., a Cayman Islands exempted limited partnership, Trident VI Parallel Fund, L.P., a Cayman Islands exempted limited partnership, Trident VI DE Parallel Fund, L.P, a Delaware limited partnership, and Trident VI Professionals Fund, L.P., a Cayman Islands exempted limited partnership, and any of their Affiliates to whom all or a portion of any of their Interests are Transferred, at any time and in each case in compliance with the terms of this Agreement.
“Interest” of any Partner at any time means the entire general partner or limited partner interest, as applicable, of such Partner in the Partnership at such time, represented as either a General Partner Interest or ownership of any Units, respectively, which represents, to the extent applicable, such Partner’s rights in and to Net Income and Net Losses, distributions of Partnership assets and such other rights to which a Partner is entitled under this Agreement and the provisions of the Act that are not inconsistent with this Agreement.
“Law” means all laws, statutes, ordinances, rules and regulations of the United States, any foreign country and each state, commonwealth, city, county, municipality or other political subdivision thereof.
“Net Income and Net Loss”, and the constituent terms “Net Income” and “Net Loss”, as applicable, means the net taxable income or net taxable loss of the Partnership, respectively, as determined for federal income tax purposes, for each Fiscal Year of the Partnership, including each item of Partnership income, gain, loss or deduction, taking into account the following adjustments, and any other adjustments necessary in order to comply with Section 1.704-1(b)(2)(iv) of the Regulations: (a) any income that is exempt from federal income tax and not otherwise taken into account shall be added to such taxable income or loss; (b) any expenditure that is not deductible in computing federal taxable income and not properly chargeable to capital accounts and not otherwise taken into account shall be subtracted from such taxable income or loss; (c) any adjustments to the “book values” of Partnership Property pursuant to Section 1.704-1(b)(2)(iv) shall be treated as an item of gain or loss; and (d) other than for federal income tax purposes, depreciation with respect to, and gain or loss from the disposition of, Partnership Property shall be computed by reference to the adjusted “book values” of the Partnership Property, rather than their adjusted tax bases.
“Option” means an option to purchase Common Units pursuant to the Option Plan, subject to the terms and conditions of the Option Plan and any applicable award agreement. A holder of an Option shall not be deemed a Member or an Employee Holder solely by reason thereof, it being acknowledged that such Option must be exercised and the holder must comply with the applicable provisions of the Option Plan, any applicable award agreement and this Agreement prior to such holder becoming a Member or an Employee Holder.
“Partnership” means Home Point Capital LP, a Delaware limited partnership.
“Partnership Property” or “Partnership Properties” means all interests in property, whether real or personal, tangible or intangible, and rights of any type owned therein or held by the Partnership or any Subsidiary.
“Person” means and includes any individual, corporation, partnership, association, limited liability company, trust, estate or other entity.
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“Regulations” means the income tax regulations, including any temporary regulations, from time to time promulgated under the Code.
“Sale of the Partnership” means the first to occur of any of the following: (a) the merger, reorganization, combination or consolidation of the Partnership into or with, or any other acquisition of the Partnership by, a Third Party, in any case which involves the direct or indirect Transfer by the Partners, collectively, of at least fifty percent (50%) of the Interests on a Fully Diluted basis or (b) the sale, transfer or lease, whether in a single transaction or pursuant to a series of related transactions, of Partnership Property or businesses constituting all or substantially all of the Partnership Property or businesses of the Partnership and its Subsidiaries, taken as a whole.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Sponsor Partners” means, collectively, the Initial Sponsor Partners and any other Person to whom all or a portion of any of the foregoing Persons’ respective Interests are Transferred, at any time and in each case in compliance with the terms of this Agreement.
“Subsidiary” means (a) any corporation, partnership, limited liability company or other entity a majority of the capital stock or other equity interests of which having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is at the time owned, directly or indirectly, with power to vote, by the Partnership or any direct or indirect Subsidiary of the Partnership, (b) a partnership in which the Partnership or any direct or indirect Subsidiary is a general partner or (c) a limited liability company in which the Partnership or any direct or indirect Subsidiary is a managing member or manager.
“Transfer” means, when used as a noun, any direct or indirect, voluntary or involuntary, sale, disposition, hypothecation, mortgage, gift, pledge, assignment, attachment or any other transfer (including the creation of any derivative or synthetic interest, including a participation or other similar interest or any lien or encumbrance) and, when used as a verb, voluntarily (whether in fulfillment of contractual obligation or otherwise) to directly or indirectly sell, dispose, hypothecate, mortgage, gift, pledge, assign, attach or otherwise transfer (including by creating any derivative or synthetic interest, any lien or encumbrance) or any other similar participation or interest, in any case, whether by operation of Law or otherwise.
“Unit” means a Common Unit, or a Unit of any other type, class or series of Interests authorized by the General Partner pursuant to the terms of this Agreement.
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Exhibit 10.14
FIRST AMENDMENT
TO THE
HOME POINT CAPITAL LP
2015 OPTION PLAN
This First Amendment (this “Amendment”) to the Home Point Capital LP 2015 Option Plan, dated as of March 31, 2015 (as the same may be modified, amended, restated or amended and restated from time to time, the “Plan”) is hereby adopted by the Board of Managers (the “Board”) of Home Point Capital GP LLC, a Delaware limited liability company (“HPC GP”), as the Administrator of the Plan and the general partner of Home Point Capital LP, a Delaware limited partnership (“HPC LP”), pursuant to Sections 1.2 and 3.1 of the Plan and Section 3.10(a)(ii) of the Amended and Restated Agreement of Limited Partnership of HPC LP, dated as of March 31, 2015 (as the same may be modified, amended, restated or amended and restated from time to time, the “LP Agreement”). All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan.
WHEREAS, the Administrator has previously approved of an increase in the total number of Common Units reserved for Options under the Plan equal to 1,200,000 Common Units for a total number of 4,950,000 Common Units, with the understanding and agreement that such additional Options will be granted pursuant to Option Agreements reflecting the vesting terms set forth in Exhibit A hereto or such other vesting terms as may be agreed by the Administrator upon grant of such Options;
NOW THEREFORE, HPC LP, through HPC GP, as Administrator of the Plan, hereby amends the Plan as follows:
1. | Increase to Aggregate Number Available. The second sentence of Section 1.4(a) of the Plan is hereby deleted in its entirety and replaced with the following: |
The aggregate number of Common Units reserved for Options under the Plan shall be 4,950,000, subject to adjustment by the Administrator in accordance with the LP Agreement and this Plan.
2. | Ratification. Except as expressly modified and amended herein, all of the terms and conditions of the Plan remain unchanged and unmodified and in full force and effect. |
3. | Governing Law. This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law. |
4. | Counterparts. This Amendment may be executed in any number of counterparts and it shall be sufficient that the signature of each party appears on one or more such counterparts. All counterparts shall collectively constitute a single agreement. Signatures to this Amendment transmitted by facsimile, .pdf, electronic mail or other electronic transmission shall be treated as originals in all respects. |
IN WITNESS WHEREOF, the Board of Managers of HPC GP, as the Administrator, has cause this Amendment to be executed as of January 31, 2020.
MANAGERS: | |
/s/ William Newman | |
William Newman | |
/s/ Agha Khan | |
Agha Khan | |
/s/ Stephen Levey | |
Stephen Levey | |
/s/ Eric Rosenzweig | |
Eric Rosenzweig |
Exhibit A
Unless otherwise agreed by the Administrator at the time of grant of an Option, the 1,200,000 additional Options approved by the Administrator pursuant to this Amendment will be granted pursuant to Option Agreements reflecting the following vesting terms:
· | 0% of such Options shall be Time-Vesting Options |
· | 100% of such Options shall be Performance-Vesting Options. |
· | Upon consummation of a Sponsor Exit Transaction or a Public Offering in which the Sponsor Partners transfer at least 20% of their Common Units and in which the Sponsor Exit Proceeds is equal to or greater than: |
i. | $12.50, then 25% of the Performance-Vesting Options shall vest; |
ii. | $15.00, then an additional 25% of the Performance-Vesting Options shall vest; |
iii. | $17.50, then an additional 25% of the Performance-Vesting Options shall vest; and |
iv. | $20.00, then an additional 25% of the Performance-Vesting Options shall vest, such that upon realization of such Sponsor Exit Proceeds 100% of the Performance-Vesting Options shall have vested; |
provided, that, in each case the Participant is employed by the Company on the date of such Sponsor Exit Transaction or Public Offering, provided, however, that the Performance-Vesting Options shall nevertheless vest if the Participant’s employment with the Company was terminated on or following the date that is one year before such Sponsor Exit Transaction or Public Offering (i) by the Company without Cause, (ii) as a result of the Participant’s resignation with Good Reason or (iii) by reason of the Participant’s death or Disability that occurred on a date that is earlier than the date that is one year prior to the date of the consummation of such Sponsor Exit Transaction or Public Offering.
Entity Name
|
Jurisdiction of Incorporation or Organization
|
Home Point Asset Management LLC
|
Delaware
|
Home Point Financial Corporation
|
New Jersey
|
Home Point Mortgage Acceptance Corporation
|
Alabama
|
HPC Insurance Agency, LLC
|
Michigan
|
/s/ Laurie S. Goodman
|
|
Laurie S. Goodman
|
/s/ Timothy R. Morse
|
|
Timothy R. Morse
|