0001830197FALSE00018301972022-02-282022-02-28
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2022
Home Point Capital Inc.
(Exact name of registrant as specified in its charter)
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| Delaware | 001-39964 | 90-1116426 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
2211 Old Earhart Road, Suite 250
Ann Arbor, Michigan 48105
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (888) 616-6866
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8−K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| o | Soliciting material pursuant to Rule 14a−12 under the Exchange Act (17 CFR 240.14a−12) |
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| o | Pre−commencement communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR 240.14d−2(b)) |
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| o | Pre−commencement communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR 240.13e− 4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol | | Name of each exchange on which
registered |
Common Stock, par value $0.0000000072 per share | | HMPT | | The Nasdaq Stock Market LLC (The Nasdaq Global Select Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 1.01Entry into a Material Definitive Agreement.
Amendment No. 6 to Credit Suisse Master Repurchase Agreement
On February 28, 2022, Home Point Financial Corporation (“HPF”), a wholly owned subsidiary of Home Point Capital Inc. (the “Company”), entered into Amendment No. 6 (the “CS Amendment”) to its Master Repurchase Agreement (the “CS Master Repurchase Agreement”), dated as of October 23, 2020, with Credit Suisse First Boston Mortgage Capital LLC (“CSFB”), as administrative agent, Credit Suisse AG, acting through its Cayman Islands Branch (“CSCIB”), as a buyer, Alpine Securitization LTD (“Alpine”), as a buyer, and the other buyers from time to time party thereto.
Pursuant to the CS Amendment and certain ancillary agreements thereto, the maturity date of the CS Master Repurchase Agreement was extended to February 27, 2023 and certain other technical changes to the CS Master Repurchase Agreement, including changes to certain definitions replacing LIBOR with SOFR for interest rate calculations thereunder, were effectuated.
Certain affiliates of CSFB, CSCIB, and Alpine have performed commercial banking, investment banking, or advisory services for the Company from time to time for which they have received customary fees and reimbursement of expenses. They may, from time to time, engage in transactions with and perform services for the Company in the ordinary course of its business for which they may receive customary fees and reimbursement of expenses.
The foregoing description of the CS Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the CS Amendment attached hereto as Exhibit 10.1, which is incorporated herein by reference.
Amendment No. 1 to BMO Master Repurchase Agreement and Securities Contract
On March 1, 2022, HPF entered into Amendment No. 1 (the “BMO Amendment”) to its Master Repurchase Agreement and Securities Contract (the “BMO Master Repurchase Agreement”), dated as of January 8, 2021, with Bank of Montreal, a Canadian Chartered bank acting through its Chicago Branch (“BMO”), as buyer.
Pursuant to the BMO Amendment and certain ancillary agreements thereto, the maximum aggregate purchase price provided for under the BMO Master Repurchase agreement was decreased from $500.0 million to $400.0 million, the maturity date of the BMO Master Repurchase Agreement was extended to March 6, 2023, and certain other technical changes to the BMO Master Repurchase Agreement, including changes to certain definitions replacing LIBOR with SOFR for interest rate calculations thereunder, were effectuated.
BMO and certain affiliates of BMO may, from time to time, engage in transactions with and perform services for the Company in the ordinary course of its business for which they may receive customary fees and reimbursement of expenses.
The foregoing description of the BMO Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the BMO Amendment attached hereto as Exhibit 10.2, which is incorporated herein by reference.
Amendment No. 8 to MS Master Repurchase Agreement
On March 4, 2022, HPF entered into Amendment No. 8 (the “MS Amendment”) to its Master Repurchase Agreement and Securities Contract (the “MS Master Repurchase Agreement”), dated as of June 3, 2020, with Morgan Stanley Bank, N.A., a national banking association (“MS”), as buyer, and Morgan Stanley Mortgage Capital Holdings LLC, a New York limited liability company (“MS Mortgage Capital”), as agent for the buyer.
Pursuant to the terms of the MS Amendment and certain ancillary agreements thereto, the maximum aggregate purchase price provided for under the MS Master Repurchase Agreement was decreased from $500.0 million to $325.0 million, the committed financing under the MS Master Repurchase Agreement was decreased from $250.0 million to $162.5 million, and certain other technical changes to the MS Master Repurchase Agreement were effectuated. The maturity date of the MS Master Repurchase Agreement was also extended to March 3, 2023.
MS and certain affiliates of MS and MS Mortgage Capital have performed commercial banking, investment banking, or advisory services for the Company from time to time for which they have received customary fees and reimbursement of expenses. They may, from time to time, engage in transactions with and perform services for the Company in the ordinary course of its business for which they may receive customary fees and reimbursement of expenses.
The foregoing description of the MS Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the MS Amendment attached hereto as Exhibit 10.3, which is incorporated herein by reference.
Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 8.01Other Events.
On February 28, 2022 (the “Sale Date”), HPF completed the sale of servicing rights relating to certain single family mortgage loans (“MSRs”) serviced for the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the “Agencies”) with an aggregate unpaid principal balance of approximately $4.4 billion (the “Servicing Rights”) to an approved Agency seller and servicer. The total purchase price for the Servicing Rights was approximately $44.2 million, which is subject to certain customary holdbacks and adjustments. The sale represents approximately 3.4% of HPF’s total mortgage servicing portfolio as of December 31, 2021. The Agencies consented to the transfer of the Servicing Rights.
Cautionary Note on Forward-Looking Statements
This communication contains certain “forward-looking statements,” as that term is defined in the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995, including statements regarding potential purchase price holdbacks and adjustments. All statements other than statements of historical facts contained in this communication, including among others, statements relating to potential purchase price holdbacks and adjustments and other similar matters are forward-looking statements. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should” and the negative of these terms or other comparable terminology often identify forward-looking statements. These forward-looking statements, which are based on currently available information, operating plans, and projections about future events and trends, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, including the risks discussed in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed on March 12, 2021. Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those contemplated by forward-looking statements include, among others: (1) the dependence of HPF’s loan origination and servicing revenues on macroeconomic and U.S. residential real estate market conditions; (2) counterparty risk; (3) the requirement to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances; (4) HPF’s ability to detect misconduct and fraud; (5) risks associated with higher risk loans that HPF services; (6) risks associated with HPF’s acquisition of mortgage servicing rights; (7) the impact of HPF’s counterparties terminating HPF’s servicing rights under which HPF conducts servicing activities; and (8) the spread of the COVID-19 outbreak and severe disruptions in the U.S. and global economy and financial markets it has caused. Many of the important factors that will determine these results are beyond the Company’s ability to control or predict. Readers are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date of this communication. Except as otherwise required by law, the Company does not assume any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits.
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| Exhibit No. | | Description |
| | Amendment No. 6 to the Master Repurchase Agreement, dated as of February 28, 2022, by and among Credit Suisse First Boston Mortgage Capital LLC, as administrative agent, Credit Suisse AG, acting through its Cayman Islands Branch, as buyer, Alpine Securitization LTD, as buyer, and Home Point Financial Corporation, as seller.
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| | Amendment No. 1 to the Master Repurchase Agreement and Securities Contract, dated as of March 1, 2022, by and between Bank of Montreal, as buyer, and Home Point Financial Corporation, as seller.
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| | Amendment No. 8 to Master Repurchase Agreement and Securities Contract, dated as of March 4, 2022, 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.
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| 104 | | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
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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. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| HOME POINT CAPITAL INC. |
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| Date: March 4, 2022 | | |
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| By: | /s/ Maria N. Fregosi |
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| Name: | Maria N. Fregosi |
| Title: | Chief Investment Officer |
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. 6 TO MASTER REPURCHASE AGREEMENT
Amendment No. 6 to Master Repurchase Agreement, dated as of February 28, 2022 (this “Amendment”), among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Administrative Agent”), CREDIT SUISSE AG, a company incorporated in Switzerland, acting through its Cayman Islands Branch (“CS Cayman”, and a “Buyer”), ALPINE SECURITIZATION LTD (“Alpine” and a “Buyer”) and other Buyers joined thereto from time to time (the “Buyers”) and Home Point Financial Corporation (the “Seller”).
RECITALS
The Administrative Agent, Buyers and Seller are parties to that certain (i) Master Repurchase Agreement, dated as of October 23, 2020 (as amended by Amendment No. 1, dated as of March 2, 2021, Amendment No. 2, dated as of April 30, 2021, Amendment No. 3, dated as of June 16, 2021, Amendment No. 4, dated as of June 30, 2021 and Amendment No. 5, dated as of December 29, 2021, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (ii) Pricing Side Letter, dated as of October 23, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Side Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement or the Pricing Side Letter, as applicable.
The Administrative Agent, Buyers and 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 Administrative Agent, Buyers and Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement are hereby amended as follows:
1. Amendment to the Existing Repurchase Agreement. Effective as of the date hereof, the Existing Repurchase Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto. The parties hereto further acknowledge and agree that Exhibit A constitutes the Repurchase Agreement as amended and modified by the terms set forth herein.
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:
a. Delivered Documents. On the Amendment Effective Date, the Administrative Agent on behalf of the Buyers shall have received the following documents, each of which shall be satisfactory to the Administrative Agent in form and substance:
(1) this Amendment, executed and delivered by the duly authorized officers of the Administrative Agent, Buyers and Seller; and
(2) such other documents as the Administrative Agent or counsel to the Administrative Agent may reasonably request.
3. Representations and Warranties. Seller hereby represents and warrants to the Administrative Agent and Buyers 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 Event of Default has occurred or is continuing, and Seller hereby confirms and reaffirms the representations and warranties contained in Section 13 of the Repurchase Agreement.
4. 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.
5. 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.
6. 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. 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 Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq, 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.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.
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CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Administrative Agent |
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| By: | /s/ Margaret Dellafera |
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| Name: | Margaret Dellafera |
| Title: | Vice President |
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Buyer |
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| By: | /s/ Margaret Dellafera |
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| Name: | Margaret Dellafera |
| Title: | Vice President |
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| By: | /s/ Elie Chau |
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| Name: | Elie Chau |
| Title: | Vice President |
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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 |
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| Name: | Elie Chau |
| Title: | Vice President |
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| By: | /s/ Patrick Duggan |
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| Name: | Patrick Duggan |
| Title: | Director |
Signature Page to Amendment No. 6 to Master Repurchase Agreement
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HOME POINT FINANCIAL CORPORATION, as Seller |
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| By: | /s/ Maria Fregosi |
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| Name: | Maria Fregosi |
| Title: | Chief Investment Officer |
Signature Page to Amendment No. 6 to Master Repurchase Agreement
Exhibit A
REPURCHASE AGREEMENT
(See attached)
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CONFORMED THROUGH AMENDMENT NO. 56 |
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 2829
4. Repurchase; Conversion to REO Property 2930
5. Price Differential 31
6. Margin Maintenance; Reallocation of Purchase Price 3132
7. Income Payments 3233
8. Security Interest 3435
9. Payment and Transfer 3738
10. Conditions Precedent 3839
11. Program; Costs 4243
12. Servicing 4546
13. Representations and Warranties 4748
14. Covenants 5152
15. Events of Default 58
16. Remedies Upon Default 60
17. Reports 6263
18. Repurchase Transactions 66
19. Single Agreement 6667
20. Notices and Other Communications 6667
21. Entire Agreement; Severability 6869
22. Non assignability 6869
23. Set-off 6970
24. Binding Effect; Governing Law; Jurisdiction 6970
25. No Waivers, Etc. 7071
26. Intent 7071
27. Disclosure Relating to Certain Federal Protections 7172
28. Power of Attorney 72
29. Buyers May Act Through Administrative Agent 7273
30. Indemnification; Obligations 7273
31. Counterparts 7374
32. Confidentiality 7374
33. Recording of Communications 75
34. Periodic Due Diligence Review 75
35. Authorizations 7576
36. Acknowledgment of Assignment and Administration of Repurchase Agreement 7576
37. Acknowledgement of Anti-Predatory Lending Policies 7677
38. Documents Mutually Drafted 7677
39. General Interpretive Principles 7677
40. Conflicts 7778
41. Pool Subdivisions 7778
42. Bankruptcy Non-Petition 7778
43. Limited Recourse 7778
44. Nominee 7879
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 paysother Buyers pay the Purchase Price-Incremental 1 and Purchase Price-Incremental 2, as applicable, and, 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 subject to the terms set forth herein.
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 Daily Simple SOFR” means an interest rate per annum equal to (i) Daily Simple SOFR, plus (ii) the Benchmark Adjustment.
“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 aggregate outstanding Purchase Price-Base for a Purchased Asset and/or Contributed Asset.
“Aggregate Purchase Price-Incremental 1” means, as of any date of determination, the aggregate outstanding Purchase Price-Incremental 1 for a Purchased Asset and/or Contributed Asset.
“Aggregate Purchase Price-Incremental 2” means, as of any date of determination, the excess if any of (a) the aggregate outstanding Purchase Price of allPrice-Incremental 2 for a Purchased AssetsAsset and/or Contributed Assets on such date over (b) the Aggregate Purchase Price-Base on such dateAsset.
“Agreement” means this Master Repurchase Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Allocated Percentage” means, with respect to a Purchased Asset and/or Contributed Asset, the percentage obtained by (a) with respect to the Purchase Price-Base, [***] divided by [***]; (b) with respect to the Purchase Price-Incremental 1, [***] divided by [***]; (c) with respect to the Purchase Price-Incremental 2, [***] divided by [***].
“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, the Asset Value-Incremental 1 and the Asset Value-Incremental 2.
“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 1” 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 2” 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.
“Benchmark Adjustment” means, for any day, the spread adjustment for such Pricing Period that has been selected or recommended by the Relevant Governmental Body for the tenor of 1 month. For the avoidance of doubt, the “Benchmark Adjustment” means, for any day, the value as reported on the display designated as “YUS0001M” on Bloomberg, or such other display as may replace “YUS0001M”.
“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 (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 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 Simple SOFR” means, for any day, SOFR, with conventions (including, without limitation, a lookback) established by the Administrative Agent in its sole discretion in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR”; provided that, if the Administrative Agent determines that any such convention is not administratively, operationally, or technically feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its sole discretion.
“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 on the Asset Matrix or otherwise by Administrative Agent as eligible for both a Purchase Price-Base and, a Purchase Price-Incremental 1 and/or a Purchase Price-Incremental 2.
“Disqualification Event” means, with respect to a Designated Asset which has Purchase Price-Incremental 2, 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 2 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.
“E-Sign” means the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.
“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-BasePrice 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 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.
“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 Mortgage Loan” means a Mortgage Loan other than an Early Buyout Loan that (a) is not a Non-Agency Non-QM Mortgage Loan; (b) either (i) does not meet the criteria for an Agency Mortgage Loan or (ii) is an Agency Mortgage Loan that is aggregated for placement into a private label securitization or for sale to a Take-out Investor other than an Agency; (c) meets all applicable criteria as set forth in the Asset Guidelines and (d) is otherwise acceptable toidentified as a Non-Agency Mortgage Loan by Administrative Agent in its sole discretionand Seller.
“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-Performing Mortgage Loan” means a Mortgage Loan (other than a Second Lien Mortgage Loan, HELOC, HECM Loan, or Private Label Reverse Mortgage Loan or BPL – Multi-Family) that is [***] 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 1 and Price Differential-Incremental 2 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 1” means, with respect to each Purchased Asset or Contributed Asset as of any date of determination, an amount equal to the product of [***] and [***].
“Price Differential-Incremental 2” 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 [***]; (b) with respect to the Purchase Price-Incremental 1, if any, [***] and (c) with respect to the Purchase Price-Incremental 2, if any, [***].
“Pricing Rate-Base” means with respect to the Purchase Price-Base, the sum of [***] and [***] plus [***].
“Pricing Rate-Incremental 1” means with respect to the Purchase Price-Incremental 1, the sum of (a) the greater of [***] and [***] plus [***].
“Pricing Rate-Incremental 2” means with respect to the Purchase Price-Incremental 2, the sum 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 1, if any plus the Purchase Price-Incremental 2, 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 1 and additional Purchase Price-Incremental 2 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 and 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, anthe amount equal toremitted by Administrative Agent, on behalf of Buyers, to Seller Parties which shall not exceed the product of [***] and [***] and (b) on any day after the applicable Purchase Date, [***].
“Purchase Price-Incremental 1” means, with respect to any Purchased Asset or Contributed Asset: (a) on the applicable Purchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller Parties which shall not exceed the product of [***] and [***], and (b) on any day after the applicable Purchase Date, [***].
“Purchase Price-Incremental 2” 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 in excess of the applicable Asset Value-Base, an amount equal toPurchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller Parties which shall not exceed the product of [***] and [***], and (b) on any day after the applicable date the Buyers make an advance described in clause (a), thePurchase Date, [***].
“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, the Purchase Price Percentage-Base and; (b) with respect to the Purchase Price-Incremental 1, if any, the Purchase Price Percentage-Incremental 1 and (c) with respect to the Purchase Price-Incremental 2, if any, the Purchase Price Percentage-Incremental 2.
“Purchase Price Percentage-Base” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-Incremental 1” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-Incremental 2” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-IncrementalPercentage - Total” means, with respect to each Purchased Asset and/or Contributed Asset, the percentage equal to (a) the applicable Purchase Price-Incremental divided by (b) the applicable Maximum Value Amountsum of (a) the Purchase Price Percentage-Base, plus (b) the Purchase Price Percentage-Incremental 1 and (c) the Purchase Price Percentage-Incremental 2.
“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 LIBORAdjusted Daily Simple SOFR, 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.
“Relevant Governmental Body” means 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 of any of the foregoing.
“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.
“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, or 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.
“SOFR” means, with respect to any SOFR Business Day, a rate per annum equal to the secured overnight financing rate for such SOFR Business Day published by the SOFR Administrator on the SOFR Administrator’s Website at approximately 8:00 a.m. (New York City time) on the immediately succeeding SOFR Business Day.
“SOFR Administrator” means the Federal Reserve Bank of New York (or any successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the SOFR Administrator’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SOFR Business Day” means a day on which banks are open for dealing in foreign currency and exchange in London, New York City and Washington, D.C.
“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 changestechnical, administrative or operational change (including any change to the timing and frequency of determining rates and making payments of interest and other, 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 as) that the Administrative Agent decides, in its sole discretion, may be appropriate, in the discretion of Administrative Agent, to reflect the adoption and implementation of such Successor Rate 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 such Successor Rate exists, in such other manner of administration as the Administrative Agent decides, in its sole discretion, is reasonably necessary in connection with the administration of this Agreement or any other Program Agreement).
“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; Allocation of Purchase Price
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 of 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 the Aggregateaggregate outstanding Purchase Price-Base and the Aggregate, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 shall not exceed the Maximum Aggregate Purchase Price.
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 outstanding 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. On each Purchase Date and Purchase Price Increase Date, the Administrative Agent shall allocate the Purchase Price for such Purchased Asset and/or Contributed Asset among the Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price Incremental 2 according to the Allocated Percentages attributable thereto.
h. 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 and Contributed 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).
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.
f. With respect to any Purchased Asset and Contributed Asset, Administrative Agent shall allocate any Repurchase Price and Release Price in respect thereof (x) prior to an Event of Default, pro rata among the Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 based upon the Allocated Percentage of each; and (y) on and after an Event of Default, first to the Buyers of the Purchase Price-Base until all Obligations in respect of the Purchase Price-Base are reduced to zero, second to the Purchase Price-Incremental 1 until all Obligations in respect of the Purchase Price-Incremental 1are reduced to zero and third to the Purchase Price-Incremental 2 until all Obligations in respect of the Purchase Price-Incremental 2 are reduced to zero.
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. Prior to the occurrence and continuance of an Event of Default, the Administrative Agent shall apply all payments of Price Differential in respect of any Purchased Asset and Contributed Asset pro rata among the Price Differential-Base, the Price Differential-Incremental 1 and the Price Differential-Incremental 2 based upon the Allocated Percentage of each. On and after an Event of Default, any application of Price Differential will first be attributed to the Price Differential-Base then due and owing until reduced to zero, second to the Price Differential-Incremental 1 then due and owning until reduced to zero and third to the Price Differential-Incremental 2 then due and owning until reduced to zero.
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, (i) adequate and reasonable means do not exist for ascertaining LIBOR, LIBORthe Reference Rate; (ii) the
Reference Rate is no longer in existence, or; (iii) continued implementation of the Reference Rate is no longer operationally, administratively or technically feasible or no significant market practice for the administration of the Reference Rate exists, (iv) the Reference Rate will not adequately and fairly reflect the cost to Administrative Agent and Buyers of purchasing or maintaining Transactions or (v) the administrator of LIBORthe Reference Rate or a Governmental Authority having jurisdiction over Administrative Agent has made a public statement identifying a specific date after which LIBORthe Reference Rate 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 LIBORthe Reference Rate for such period, and for all subsequent periods until such notice has been withdrawn by Administrative Agent, shall be the greater of (ix) an alternative benchmark rate (including any mathematical or other adjustments to the benchmark rate (if any) incorporated therein) and (iiy) zero, 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 five (5) Business Days’ 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.
d. To the extent Administrative Agent implements a Successor Rate and Successor Rate Conforming Changes it will promptly notify Seller Parties of the effectiveness of any such changes. Any determination of a Successor Rate and the adoption of Successor Rate Conforming Changes shall be made by Administrative Agent in a manner substantially consistent with market practice with respect to similarly situated counterparties with substantially similar assets in similar facilities and any such Successor Rate Conforming Changes will become effective without any further action or consent of Seller Parties to this Agreement or the other Program Agreements.
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.
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 Mortgage Loans.
d. If any Event of Default has occurred and is continuing, with respect to Agency Mortgage Loans, Non-Agency 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 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, pro rata, 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 as set forth in Section 4(f) hereof;
(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 the order of priority as determined in accordance with Section 5(a) hereof, 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 the order of priority as determined in accordance with Section 4(f) 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 Agreementin the order of priority set forth in Section 4(f); 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 and in the order of priority set forth in Section 4(f);
(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 and in the order of priority set forth in Section 4(f);
(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 in the order of priority set forth in Section 4(f); 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) Reserved.Designated Assets – Purchase Price Incremental 2. With respect to each proposed Transaction the subject of which is a Designated Asset which is eligible for Purchase Price-Incremental 2, no Disqualification Event shall have occurred and be continuing.
(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 or in the aggregate 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 or in the aggregate 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(4) 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 Adjusted Net Income for any Test Period, before income taxes for such Test Period and distributions made during such Test Period, to be [***].
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)Section 7(j) hereof, 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 and in the order of priority set forth in Section 7(j) hereof.
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) as soon as available and in any event within forty-five (45) calendar days after the end of each fiscal quarter, 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 and retained earnings and of cash flows 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, year-end adjustments) consistently applied, as at the end of, and for, such period;
(4) at the time Seller furnishes each set of financial statements pursuant to Section 17.b(1), (2) or (3) above, an Officer’s Compliance Certificate of a Responsible Officer of Seller;
(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(4) 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 Purchase Price, 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-IncrementalAsset Value, Maximum Value Amount, 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 partythe Administrative Agent.
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.
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CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Administrative Agent |
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Buyer |
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ALPINE SECURITIZATION LTD as a Buyer, by Credit Suisse AG, New York Branch as Attorney-in-Fact |
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Signature Page to the Master Repurchase Agreement
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HOME POINT FINANCIAL CORPORATION, as Seller |
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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
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:
Authorized Representatives for execution of Program Agreements and amendments
Authorized Representatives for execution of Transaction Requests and day-to-day operational functions
Authorized Representatives to the 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:
Authorized Representatives to the 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
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 Adjusted Net Income for any Test Period, before income taxes for such Test Period and distributions made during such Test Period, to be [***].
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 | $ |
| | | | |
| Indemnifications | Total # of 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
[***]
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 1 TO MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT
THIS AMENDMENT NUMBER 1 TO MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT, dated as of March 1, 2022 (this “Amendment”), is by and between HOME POINT FINANCIAL CORPORATION, a New Jersey corporation (“Seller”), and BANK OF MONTREAL, a Canadian Chartered bank acting through its Chicago Branch (“Buyer”). Unless otherwise defined herein, capitalized terms used in this Amendment have the meanings assigned to such terms in the Master Repurchase Agreement and Securities Contract, dated as of January 8, 2021 (as amended, restated, supplemented or otherwise modified to the date hereof and by this Amendment, the “Repurchase Agreement”), between the Seller and the Buyer.
RECITALS
WHEREAS, the Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Repurchase Agreement be amended to reflect certain agreed upon changes;
NOW, THEREFORE, in consideration of the mutual covenants made herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Repurchase Agreement. Effective as of the date hereof, the Repurchase Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto.
SECTION 2. Agreement in Full Force and Effect as Amended. As specifically amended hereby, the Repurchase Agreement and each of the other Facility Documents remains in full force and effect. All references to the Repurchase Agreement or any other Facility Document shall be deemed to mean the Repurchase Agreement or such Facility Document as supplemented and amended pursuant to this Amendment. This Amendment shall not constitute a novation of the Repurchase Agreement or any other Facility Document, but is a supplement thereto. The parties hereto agree to be bound by the terms and conditions of the Repurchase Agreement and Facility Documents, each as amended or supplemented by this Amendment, to the same effect as if such terms and conditions were set forth herein verbatim.
SECTION 3. Conditions to Effectiveness of this Amendment. This Amendment shall become effective on the day when the Buyer has received a copy of this Amendment, duly executed by each of the parties hereto.
SECTION 4. Miscellaneous.
(i) This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. The parties agree that 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. Counterparts may be delivered electronically.
The parties agree that this Amendment 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.
(ii) The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.
(iii) This Amendment may not be amended or otherwise modified other than by an agreement in writing signed by each of the parties hereto.
(iv) THIS AMENDMENT AND ANY CLAIM, DISPUTE OR CONTROVERSY ARISING UNDER OR RELATED TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.
(The remainder of this page is intentionally blank.)
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date first above written.
| | | | | | | | |
| SELLER: HOME POINT FINANCIAL CORPORATION |
| | |
| | |
| | |
| By: | /s/ Maria Fregosi |
| | |
| Name: | Maria Fregosi |
| Title: | Chief Investment Officer |
ACKNOWLEDGED AND AGREED TO:
| | | | | | | | |
| BUYER: BANK OF MONTREAL |
| | |
| | |
| | |
| By: | /s/ Ari Lash |
| | |
| Name: | Ari Lash |
| Title: | Managing Director |
EXHIBIT A
[see attached]
EXECUTIONCONFORMED VERSION through:
Amendment No. 1, dated March 1, 2022
MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT
between
BANK OF MONTREAL,
as Buyer
and
HOME POINT FINANCIAL CORPORATION,
as Seller
Dated as of January 8, 2021
TABLE OF CONTENTS
Page(s)
Section 1. Applicability; Transaction Overview 1
Section 2. Definitions 1
Section 3. No Commitment; Initiation; Termination. 24
Section 4. Repurchases. 30
Section 5. Income Payments; Price Differential. 32
Section 6. Requirements Of Law. 33
Section 7. Margin Maintenance. 34
Section 8. Taxes. 35
Section 9. Security Interest; Buyer’s Appointment as Attorney-in-Fact. 39
Section 10. Payment, Transfer and Remittance. 41
Section 11. Hypothecation or Pledge of Purchased Mortgage Loans 42
Section 12. [Reserved]. 42
Section 13. Representations 42
Section 14. Covenants Of Seller 48
Section 15. Events Of Default 56
Section 16. Remedies. 58
Section 17. Indemnification and Expenses. 61
Section 18. Servicing 63
Section 19. Recording of Communications 64
Section 20. Due Diligence 64
Section 21. Assignability. 65
Section 22. Transfer and Maintenance of Register. 66
Section 23. Tax Treatment 66
Section 24. Set-Off. 66
Section 25. Terminability 67
Section 26. Notices And Other Communications 67
Section 27. Entire Agreement; Severability; Single Agreement. 67
Section 28. GOVERNING LAW 68
Section 29. SUBMISSION TO JURISDICTION; WAIVERS 68
Section 30. No Waivers, etc 69
Section 31. Netting 69
Section 32. Confidentiality. 69
Section 33. Intent. 71
Section 34. Conflicts 72
Section 35. Authorizations 72
Section 36. Miscellaneous. 72
Section 37. Recognition of the U.S. Special Resolution Regimes 73
Section 38. Effect of Benchmark Transition Event. 73
Section 39. General Interpretive Principles 74
SCHEDULE 1-A REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS
SCHEDULE 1-B REPRESENTATIONS AND WARRANTIES RE: POOLED MORTGAGE LOANS
SCHEDULE 2 AUTHORIZED REPRESENTATIVES
SCHEDULE 3 INDEBTEDNESS OF SELLER
EXHIBIT A [RESERVED]
EXHIBIT B [RESERVED]
EXHIBIT C EVIDENCE OF BUYER LISTED AS LOSS PAYEE OF FIDELITY INSURANCE POLICY, ERRORS AND OMISSIONS INSURANCE POLICY, AND PROFESSIONAL LIABILITY INSURANCE POLICY
EXHIBIT D FORM OF SECTION 8 CERTIFICATE
EXHIBIT E ASSET SCHEDULE FIELDS
EXHIBIT F FORM OF POWER OF ATTORNEY
EXHIBIT G FORM OF OFFICER’S COMPLIANCE CERTIFICATE
MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT
This is a MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT, dated as of January 8, 2021, between Home Point Financial Corporation, a New Jersey corporation (“Seller”), and BANK OF MONTREAL, a Canadian Chartered bank acting through its Chicago Branch (“Buyer”).
Section 1. Applicability; Transaction Overview. From time to time, upon the terms and conditions set forth herein, the parties hereto may enter into transactions, on an uncommitted basis, in which Seller agrees to transfer to Buyer certain Mortgage Loans and all right, title and interest (including the Servicing Rights (as hereinafter defined)) in and to the Mortgage Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans against the transfer of funds by Seller. Each such transaction involving the transfer of Mortgage Loans 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. This Agreement is not a commitment by Buyer to engage in the Transactions, but sets forth the requirements under which Buyer would consider entering into Transactions set forth herein.
Section 2. Definitions. As used herein, the following terms shall have the following meanings.
“Accelerated Repurchase Date” shall have the meaning set forth in Section 16(a)(i) hereof.
“Acceptable State” shall mean any state acceptable pursuant to the Underwriting Guidelines in which Seller is licensed to originate Mortgage Loans.
“Accepted Servicing Practices” shall mean, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans (a) of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, (b) serviced in accordance with Fannie Mae, Freddie Mac, or Government Agency servicing practices and procedures, as applicable, (c) in accordance with the terms of the related Mortgage Note and Mortgage, and (d) in accordance with applicable law and regulations, including the servicing standards promulgated by the Consumer Financial Protection Bureau.
“Adjusted Tangible Net Worth” shall mean, 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, tradenames, trademarks, copyrights, franchises, any organizational expenses, 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.
“Affiliate” shall mean 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 Approvals” shall have the meaning set forth in Section 13(ff) hereof.
“Agency Eligible Mortgage Loan” means a Mortgage Loan that is in compliance with the eligibility requirements for swap or purchase by an Agency, under the applicable Agency guidelines and/or Agency Program.
“Agency Program” means the specific mortgage backed securities swap program under the applicable Agency guidelines or as otherwise approved by an Agency pursuant to which the Agency Security is to be issued.
“Agency Security” means a mortgage-backed security issued by an Agency.
“Aggregate Facility Purchase Price” shall mean, as of any date of determination, the sum of the Purchase Prices (as of such date of determination) of all Purchased Mortgage Loans then subject to a Transaction.
“Agreement” shall mean this Master Repurchase Agreement and Securities Contract between Buyer and Seller, dated as of the date hereof as the same may be amended, restated, supplemented or otherwise modified in accordance with the terms hereof.
“Anti-Corruption Laws” shall have the meaning set forth in Section 13(cc) hereof.
“Anti-Money Laundering Laws” shall have the meaning set forth in Section 13(aa) hereof.
“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.
“Asset Schedule” shall mean with respect to any Transaction as of any date, an asset schedule in the form of a computer tape or other electronic medium (including an Excel spreadsheet) generated by Seller and delivered to Buyer and the Custodian, which provides information (including, without limitation, the information set forth on Exhibit E attached hereto) relating to the Purchased Mortgage Loans in a format reasonably acceptable to Buyer.
“Asset Value” means with respect to any Purchased Mortgage Loan that is a Government Mortgage Loan or a Jumbo Mortgage Loan, as of any date of determination, an amount equal to the product of (i) the Purchase Price Percentage for the applicable Purchased Mortgage Loan and (ii) the lesser of (a) the outstanding principal balance of such Purchased Mortgage Loan or (b) the Market Value of such Purchased Mortgage Loan. Without limiting the generality of the foregoing, Seller acknowledges that the Asset Value of a Purchased Mortgage Loan may be reduced to zero by Buyer if:
(i) a Purchased Mortgage Loan Issue has occurred and such Purchased Mortgage Loan has not been repurchased by Seller;
(ii) the related Mortgage File has been released from the possession of the Custodian under the Custodial and Disbursement Agreement for a period in excess of the time permitted therefor under the Custodial and Disbursement Agreement;
(iii) such Purchased Mortgage Loan has been subject to a Transaction hereunder for a period of greater than the Maximum Transaction Duration identified on the Pricing Side Letter for such Purchased Mortgage Loan;
(iv) Buyer has determined in its good faith discretion that such Purchased Mortgage Loan is not eligible for whole loan sale or securitization in a transaction consistent with the prevailing sale and securitization industry;
(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;
(vi) when the Purchase Price for such Purchased Mortgage Loan is added to the Purchase Price for all Purchased Mortgage Loans, the aggregate Purchase Price of all Wet-Ink Mortgage Loansany loan type exceeds the Wet-Ink Mortgage Loanapplicable Concentration Limit; or
(vii) when the Purchase Price of 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.
“Assignment and Acceptance” shall have the meaning set forth in Section 21 hereof.
“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.
“Authorized Representative” shall mean, for the purposes of this Agreement only, an agent or Responsible Officer of Seller and Buyer listed on Schedule 2 hereto, as such Schedule 2 may be amended from time to time.
“Bailee Letter” shall mean a bailee letter substantially in the form prescribed by the Custodial and Disbursement Agreement or otherwise approved in writing by Buyer in its sole discretion.
“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time.
“Benchmark Replacement” shall mean the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by Buyer 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 the LIBOR RateTerm SOFR for U.S. dollar-denominated syndicated or bilateral 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, with respect to any replacement of the LIBOR RateTerm SOFR with an Unadjusted Benchmark Replacement for each applicable Price Differential Collection 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 Buyer 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 the LIBOR RateTerm SOFR 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 the LIBOR RateTerm SOFR with the applicable
Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral 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 timing and frequency of determining rates and making payments of Price Differential, prepayment provisions, and other administrative matters) that Buyer decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Buyer in a manner substantially consistent with market practice (or, if Buyer decides that adoption of any portion of such market practice is not administratively feasible or if Buyer determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as Buyer decides is reasonably necessary in connection with the administration of this Agreement).
“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to the LIBOR RateTerm SOFR:
(a) 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 the LIBOR RateTerm SOFR Administrator permanently or indefinitely ceases to provide the LIBOR RateTerm SOFR; or
(b) 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 LIBORTerm SOFR:
(1) a public statement or publication of information by or on behalf of the administrator of the LIBOR RateTerm SOFR Administrator announcing that such administrator has ceased or will cease to provide the LIBOR RateTerm SOFR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR RateTerm SOFR;
(2) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR RateTerm SOFR Administrator, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBORTerm SOFR Administrator, a resolution authority with jurisdiction over the administrator for the LIBOR RateTerm SOFR Administrator or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBOR RateTerm SOFR Administrator, which states that the administrator of the LIBOR RateTerm SOFR Administrator has ceased or will cease to provide the LIBOR RateTerm SOFR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR RateTerm SOFR; or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR RateTerm SOFR Administrator announcing that the LIBOR RateTerm SOFR 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 [***] 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 [***] 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 notice to a Responsible Officer of Seller.
“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBORTerm SOFR and solely to the extent that LIBORTerm SOFR 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 LIBORTerm SOFR for all purposes hereunder in accordance with this Agreement and (y) ending at the time that a Benchmark Replacement has replaced LIBORTerm SOFR for all purposes hereunder pursuant to this Agreement.
“Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a day upon which the Federal Reserve Bank of New York is closed or banking and savings and loan institutions in the States of New York, Minnesota, Michigan, Texas, California, Illinois or the City of New York are closed, or (iii) 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.
“Buyer” shall mean Bank of Montreal, its successors in interest and permitted assigns, and with respect to Section 8, its participants.
“Capital Lease” shall mean, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.
“Capital Lease Obligations” shall mean, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.
“Cash Equivalents” shall mean (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers’ acceptance issued or accepted by (i) Buyer or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) “adequately capitalized” (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of [***] and (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of [***] and (iii) has obtained from either S&P or Moody’s the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of clauses (a), (b), (c) or (d) above shall not exceed [***].
“Change in Control” shall mean with respect to Seller, (a) Home Point Capital Inc. ceasing to own directly or indirectly more than [***] of the Equity Interests in and to Seller or (b) the sale, transfer, or other disposition (each, a “Disposition”) of all or substantially all of Seller’s assets (other than any Disposition permitted under this Agreement). 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 deemed satisfactory to 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 Seller. Unless Buyer notifies Seller (electronically or in writing) that a Closing Agent is unsatisfactory, each Closing Agent utilized by Seller shall be deemed satisfactory.
“Closing Date” shall mean January 8, 2021.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Committed Mortgage Loan” means a Purchased Mortgage Loan which is the subject of a Take-out Commitment with a Take-out Investor.
“Concentration Limit” shall have the meaning set forth in the Pricing Side Letter.
“Confidential Information” shall have the meaning set forth in Section 32(a) hereof.
“Contractual Obligations” shall mean, as to any Person, any provision of any security (whether in the nature of stock or other equity interests, or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Facility Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.
“Correspondent Mortgage Loan” means a Mortgage Loan which is (i) originated by a Correspondent Seller and underwritten in accordance with the Underwriting Guidelines and (ii) acquired by the Seller from a Correspondent Seller in the ordinary course of business, for sale to the Buyer pursuant to this Agreement.
“Correspondent Seller” means a mortgage loan originator that sells Mortgage Loans originated by it to Seller as a “correspondent” client.
“Costs” shall have the meaning set forth in Section 17(a) hereof.
“Custodial and Disbursement Agreement” shall mean, that certain Custodial and Disbursement Agreement dated as of the date hereof, among Seller, Buyer and Custodian, as may be amended from time to time.
“Custodian” shall mean U.S. Bank National Association and any successor thereto under the Custodial and Disbursement Agreement, or, prior to the occurrence and continuance of an Event of Default, such other entity as mutually agreed upon by Seller and Buyer; provided, however, that following the occurrence and continuance of an Event of Default, such other entity as may be determined by Buyer in its sole discretion.
“Cut-off Date” means, with respect to Pooled Mortgage Loans, the first calendar day of the month in which the related Settlement Date is to occur.
“Cut-off Date Principal Balance” means, with respect to Pooled Mortgage Loans, the outstanding principal balance of such Pooled Mortgage Loans on the Cut-off Date after giving effect to payments of principal and interest due on or prior to the Cut-off Date whether or not such payments are received.
“DE Compare Ratio” means 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.
“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.
“Defaulting Party” shall have the meaning set forth in Section 31(b) hereof.
“Disbursement Account” shall have the meaning set forth in the Custodial and Disbursement Agreement.
“Disbursement Agent” shall mean U.S. Bank National Association, and any successor thereto under the Custodial and Disbursement Agreement, or, prior to the occurrence and continuance of an Event of Default, such other entity as mutually agreed upon by Seller and Buyer; provided, however, that following the occurrence and continuance of an Event of Default, such other entity as may be determined by Buyer in its sole discretion.
“Dollars” and “$” shall mean lawful money of the United States of America.
“DU Refi Plus” shall mean the Fannie Mae DU Refi Plus program.
“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 Documents” shall have the meaning set forth in Section 20 hereof.
“Early Opt-in Election” shall mean the occurrence of:
(1) a determination by Buyer that at least [***] currently outstanding U.S. dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) as a benchmark interest rate (excluding, for the avoidance of doubt, the LIBOR Rate), in lieu of the LIBOR RateTerm SOFR, a new benchmark interest rate to replace the LIBOR RateTerm SOFR, and
(2) the election by Buyer to declare that an Early Opt-in Election has occurred and the provision by Buyer of written notice of such election to Seller;
Provided, that in either case Buyer is making a similar early opt-in election with respect to similarly situated counterparties with similar U.S. dollar-denominated bilateral repurchase facilities secured by residential mortgage loan collateral similar to that in connection with this Agreement.
“Effective Date” shall mean the date upon which the conditions precedent set forth in Section 3(a) shall have been satisfied.
“Electronic Tracking Agreement” shall mean an Electronic Tracking Agreement that is entered into among Buyer, Seller, MERS and MERSCORP Holdings, Inc., to the extent applicable as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Eligible Mortgage Loan” shall mean a Mortgage Loan which:
(a) has been approved by Buyer in its sole and absolute discretion on the related Purchase Date;
(b) complies with the representations and warranties set forth on Schedule 1-A; and
(c) with respect to each Pooled Mortgage Loan, complies with the representations and warranties set forth on Schedule 1-B.
“Environmental Issue” shall mean any environmental issue with respect to any Mortgaged Property, as determined by Buyer in its sole discretion, including without limitation, the violation of any Environmental Laws.
“Environmental Laws” shall mean all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.
“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 mean any Person, whether or not incorporated, that is a member of any group of organizations described in Section 414(b), (c), (m) or (o) of the Code of which the Seller is a member.
“Errors and Omissions Insurance Policy” means an errors and omissions insurance policy to be maintained by the Seller.
“E-Sign” shall mean the federal Electronic Signatures in Global and National Commerce Act, as amended from time to time.
“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 15 hereof.
“Event of ERISA Termination” shall 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 determination that any Plan is or is expected to be in “at-risk” status, within the meaning of Section 430 of the Code or Section 303 of ERISA or (vi) 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 (vii) 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 (viii) 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 (vii) has been taken by the PBGC with respect to such Multiemployer Plan, or a determination that a Multiemployer Plan is, or is expected to be “insolvent” (within the meaning of Section 4245 of ERISA) or in “endangered” or “critical status” (within the meaning of Section 432 of the Code or Section 305 of ERISA); or (ix) the imposition of any Lien in favor of the PBGC or a Plan shall arise on the assets of Seller or any ERISA Affiliate thereof or (x) any event or circumstance exists which may reasonably be expected to constitute grounds for Seller to incur liability under Title IV of ERISA or under Sections 412(b) or 430 (k) of the Code with respect to any Plan.
“Exception Report” shall have the meaning set forth in the Custodial and Disbursement Agreement.
“Excluded Taxes” shall have the meaning set forth in Section 8(a) hereof.
“Executive Order” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg. 49079).
“Facility Documents” shall mean this Agreement, the Pricing Side Letter, the Custodial and Disbursement Agreement, any Electronic Tracking Agreement, the Reserve Account Control Agreement, the Joint Securities Account Control Agreement, the Intercreditor Agreement, each Power of Attorney and any and all other documents and agreements executed and delivered by Seller in connection with this Agreement or any Transactions hereunder, as the same may be amended, restated or otherwise modified from time to time.
“Fannie Mae” shall mean the Federal National Mortgage Association or any successor thereto.
“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.
“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.
“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” shall mean Fair Isaac & Co., or any successor thereto.
“Fidelity Insurance Policy” 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.
“Freddie Mac” shall mean the 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” means the Government National Mortgage Association and any successor thereto.
“GLB Act” shall have the meaning set forth in Section 32(b) hereof.
“Government Agency” shall mean Ginnie Mae, Fannie Mae, Freddie Mac, USDA, FHA, VA or other Governmental Authority governing such Government Mortgage Loan.
“Government Mortgage Loan” means a first lien Mortgage Loan originated in accordance with the criteria of Ginnie Mae, Fannie Mae, Freddie Mac, USDA, FHA, VA or other Government Agency for purchase of Mortgage Loans.
“Governmental Authority” shall mean any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).
“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 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.
“High Cost Mortgage Loan” shall mean a mortgage loan classified as (a) a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; or (b) 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).
“HUD” shall mean the United States Department of Housing and Urban Development.
“Income” shall mean, with respect to any Purchased Mortgage Loan, without duplication, all principal and income or dividends or distributions or other amounts received with respect to such Purchased Mortgage Loan, including any insurance proceeds or interest payable thereon or any fees or payments of any kind, or other amounts received, but excluding any Escrow Payments and any and all fees, reimbursement and income entitled to be retained by a Servicer pursuant to the related Servicing Agreement.
“Indebtedness” shall mean, with respect to any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (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 [***] of 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) 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 (if applicable) of which such Person is a general partner; provided, however, that the foregoing shall exclude non-recourse debt.
“Indemnified Party” shall have the meaning set forth in Section 17(a) hereof.
“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.
“Insolvency Event” shall mean, for any Person:
(a) that such Person shall discontinue or abandon operation of its business; or
(b) that such Person shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or
(c) a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person in an involuntary
case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or for the winding-up or liquidation of its affairs, and any such proceeding is not dismissed within [***] of filing; or
(d) the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such Person’s consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit of creditors; or
(e) that such Person shall become insolvent; or
(f) such Person, or any of its 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).
“Intellectual Property” shall mean all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law.
“Intercreditor Agreement” means that certain Amended and Restated Intercreditor Agreement, dated as of February 27, 2015, by and among Seller, Buyer and the other parties thereto, as may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Interest Rate Adjustment Date” shall mean 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, 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 Seller.
“Investment Company Act” shall mean the Investment Company Act of 1940, as amended from time to time.
“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, Buyer and the other parties thereto, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“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.
“LIBOR Rate” shall mean, the rate determined by Buyer on each Business Day a Transaction is outstanding equal to the higher of (a) [***] per annum, and (b) the offered rate per annum for one-month deposits of Dollars that appears on Bloomberg Screen US0001M Page, as of 11:00 A.M. (New York time) on suchany date. If no such offered rate exists, such rate will be
the rate of interest per annum, as determined by Buyer in its sole discretion at which deposits of Dollars in immediately available funds are offered at 11:00 A.M. (New York time) on such date by major financial institutions reasonably satisfactory to Buyer in the London interbank market for a period of one month and in an amount comparable to the amount of the Aggregate Facility Purchase Price on such date of determination.
“Lien” shall mean any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance.
“Loan Program Authority” shall mean, with respect to Government Mortgage Loans, the applicable Government Agency, and with respect to Jumbo Mortgage Loans, the applicable Take-out Investor.
“Manufactured Home” shall mean any dwelling unit built on a permanent chassis and attached to a permanent foundation system.
“Margin Call” shall have the meaning assigned thereto in Section 7(a) hereof.
“Margin Deficit” shall have the meaning assigned thereto in Section 7(a) hereof.
“Margin Payment” shall have the meaning assigned thereto in Section 7(a) hereof.
“Market Value” shall mean, as of any date of determination, for each Purchased Mortgage Loan, the whole-loan servicing released fair market value of such Purchased Mortgage Loan as may be reasonably determined by Buyer (or an Affiliate thereof) (which determination may be performed on a daily basis, at Buyer’s reasonable discretion and may take into account such factors as Buyer deems appropriate); provided, however, that the methodology for such determination is consistent with Buyer’s determination with respect to those similar mortgage loans it has purchased from unaffiliated sellers pursuant to similar warehousing facilities.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, when taken as a whole, the Property, business or financial operations of Seller, (b) a material impairment of the ability of Seller to perform its obligations under any of the Facility Documents to which it is a party and to avoid any Event of Default or (c) a material adverse effect upon the validity or enforceability of any of the Facility Documents.
“Maximum Aggregate Purchase Price” shall have the meaning assigned thereto in the Pricing Side Letter.
“Maximum Transaction Duration” means the number of days that a Purchased Mortgage Loan can be subject to a Transaction as set forth on Exhibit A to the Pricing Side 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 Designated Mortgage Loan” shall mean any Mortgage Loan registered with MERS on the MERS System.
“MERS System” shall mean the system of recording transfers of mortgages electronically maintained by MERS.
“Minimum Margin Threshold” shall mean [***].
“MOM Mortgage Loan” shall mean 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” shall mean the scheduled monthly payment of principal and interest on a Mortgage Loan.
“Moody’s” shall mean Moody’s Investors Service, Inc. or any successors thereto.
“Mortgage” shall mean each mortgage, or deed of trust, security agreement and fixture filing, deed to secure debt, or similar instrument creating and evidencing a first Lien on real property and other property and rights incidental thereto.
“Mortgage File” shall have the meaning set forth in the Custodial and Disbursement 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 Interest Rate Cap” shall mean, 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” shall mean any Government Mortgage Loan or Jumbo Mortgage Loan, which is a fixed or floating-rate, one-to-four-family residential loan evidenced by a Mortgage Note and secured by a Mortgage.
“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 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.
“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 3(37) of ERISA as to which Seller or any ERISA Affiliate thereof has made contributions during the current year or the immediately preceding five (5) years or is required to make contributions or has any actual liability.
“Negative Amortization” shall mean 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.
“Net Income” shall mean, for any period and any Person, the net income of such Person for such period determined in accordance with GAAP, but excluding extraordinary gains.
“Net Operating Income” shall mean, with respect to any Person, such Person’s Net Income before tax plus depreciation.
“Net Worth” shall mean, with respect to any Person, an amount equal to, on a consolidated basis, such Person’s owner equity (determined in accordance with GAAP).
“Nondefaulting Party” shall have the meaning set forth in Section 31(b) hereof.
“Non-Excluded Taxes” shall have the meaning set forth in Section 8(a) hereof.
“Non-Exempt Buyer” shall have the meaning set forth in Section 8(e) hereof.
“Obligations” shall mean any amounts due and payable by Seller to Buyer in connection with any or all Transactions 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 due and payable to Buyer hereunder or under any of the Facility Documents.
“OFAC” shall have the meaning set forth in Section 13(bb) hereof.
“Officer’s Compliance Certificate” shall mean a certificate of a Responsible Officer of Seller in the form of Exhibit G hereto.
“Other Taxes” shall have the meaning set forth in Section 8(b) hereof.
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Permits” shall mean, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“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 benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) that is subject to the provisions of Title IV of ERISA or Section 412 of the Code that is or was at any time during the current year or immediately preceding five (5) years established, maintained or contributed to by Seller or any ERISA Affiliate thereof or with respect to which Seller or any ERISA Affiliate thereof has any actual liability.
“Pooled Mortgage Loan” means any Mortgage Loan that is subject to a Transaction hereunder and is part of a pool of Mortgage Loans certified by the Custodian to an Agency for the purpose of being swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of guidelines issued by such Agency.
“Post-Default Rate” shall have the meaning assigned thereto in the Pricing Side Letter.
“Power of Attorney” shall mean a power of attorney in the form of Exhibit F hereto delivered by Seller.
“Price Differential” shall mean, with respect to any Purchased Mortgage Loan as of any date, the aggregate amount obtained by daily application of the applicable Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for the related Purchased Mortgage Loan to the Purchase Price for such Purchased Mortgage Loan 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 Purchased Mortgage Loan and ending on (but excluding) the Repurchase Date for such Purchased Mortgage Loan.
“Price Differential Collection Period” shall mean, with respect to each Purchased Mortgage Loan and Price Differential Payment Date (except for the initial Price Differential Payment Date for such Purchased Mortgage Loan), the period that commences on the first (1st) day of the preceding month and ends on the last day of such month. The Price Differential Collection Period with respect to the initial Price Differential Payment Date for a Purchased Mortgage Loan shall be the period that commences on the applicable Purchase Date and ends on the last day of such month.
“Price Differential Payment Date” shall mean (i) the fifth (5th) calendar day of the month, or the next succeeding Business Day, if such calendar day shall not be a Business Day and (ii) the Termination Date.
“Pricing Rate” shall have the meaning assigned thereto in the Pricing Side Letter.
“Pricing Side Letter” shall mean that certain letter agreement between Buyer and Seller, dated as of the date hereof, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Professional Liability Insurance Policy” shall mean a professional liability insurance policy to be maintained by the Seller.
“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 the date on which Purchased Mortgage Loans are transferred by Seller to Buyer or its designee.
“Purchase Price” means, with respect to each Purchased Mortgage Loan, the price at which such Purchased Mortgage Loan is transferred by Seller to Buyer, which shall equal:
(a) on the Purchase Date, the Asset Value of such Purchased Mortgage Loan as of the Purchase Date;
(b) on any day after the related Purchase Date, the amount determined under the immediately preceding clause (a) decreased by the amount of any cash previously transferred by the Seller to Buyer and applied to reduce the Purchase Price of such Purchased Mortgage Loan.
“Purchase Price Percentage” shall have the meaning assigned thereto in the Pricing Side Letter.
“Purchased Mortgage Loan Issue” shall mean, with respect to any Purchased Mortgage Loan as determined in Buyer’s good faith discretion, (i) the related Mortgage Note, Mortgage or related guarantee, if any, are determined to be unenforceable; (ii) there has occurred and is continuing a Representation Issue; (iii) the underlying Mortgaged Property is found to have an Environmental Issue, for which Seller or the related Mortgagor does not promptly set up an escrowed reserve in an amount acceptable to Buyer; (iv) federal, state or local law enforcement agencies have seized the underlying Mortgaged Property or (v) such Purchased Mortgage Loan is either in active forbearance or has been more than thirty (30) days contractually past due.
“Purchased Mortgage Loans” shall mean the collective reference to the Eligible Mortgage Loans that are purchased by Buyer and listed on the Asset Schedule attached to the related
Transaction Notice (as Appendix I or otherwise), including the related Mortgage Files for which the Custodian has been instructed to hold pursuant to the Custodial and Disbursement Agreement, to the extent such Mortgage Loans have not been repurchased in accordance with the terms of this Agreement.
“Qualified Originator” shall mean an originator of Mortgage Loans which is acceptable under the Underwriting Guidelines.
“Rating Agency” shall mean, each of Fitch, Inc., Moody’s and S&P, as applicable.
“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 the Mortgage Loan and any other instruments necessary to document or service a Mortgage Loan.
“Register” shall have the meaning set forth in Section 22(b) hereof.
“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.
“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.
“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 PBGC Reg. § 4043.
“Reporting Period” means the thirtieth (30th) calendar day after the end of each calendar month.
“Representation Issue” shall mean Buyer’s determination that there is a breach of a representation and warranty with respect to a Purchased Mortgage Loan (including a breach of any representation set forth on Schedule 1-A or Schedule 1-B hereof, as applicable), which breach adversely affects the value of such Mortgage Loan or Buyer’s interest therein, as determined by Buyer in its sole discretion.
“Repurchase Assets” shall have the meaning provided in Section 9(a) hereof.
“Repurchase Date” shall mean the earliest of (x) the Termination Date, (y) any date determined by application of the respective Maximum Transaction Duration, (z) the date on which Seller is to repurchase the Purchased Mortgage Loans subject to a Transaction from Buyer on a date requested pursuant to Section 4 hereof, including any date determined by application of the provisions of Sections 3 or 4 or 15 hereof.
“Repurchase Notice” shall have the meaning provided in Section 4(c) hereof.
“Repurchase Price” shall mean, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the applicable Purchase Price minus (A) any payments made by or on behalf of Seller in reduction of the outstanding Repurchase Price in each case before or as of such determination date with respect to such Purchased Mortgage Loan, plus (B) the sum of (i) any accrued and unpaid Price Differential, (ii) any increased costs, indemnification
amounts, taxes and breakage fees allocable to the repurchase of such Purchased Mortgage Loan, and (iii) any other amounts due and payable under this Agreement with respect to such Purchased Mortgage Loan, pursuant to the Pricing Side Letter.
“Required Insurance Policy” shall mean any Fidelity Insurance Policy, Errors and Omissions Insurance Policy or Professional Liability Insurance Policy.
“Requirement of Law” shall mean with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are 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” shall mean a segregated account established at the Reserve Account Bank, in the name of Seller and subject to a Reserve Account Control Agreement with Buyer which shall at all times contain a balance in an amount equal or greater than the Reserve Account Threshold, as such amount may be subject to set off by Buyer, following the occurrence and continuance of an Event of Default, with respect to any Obligations.
“Reserve Account Bank” shall mean BMO Harris Bank N.A., and any successor thereto under the Reserve Account Control Agreement.
“Reserve Account Control Agreement” shall mean a blocked account control agreement providing the Buyer with control at all times over the Reserve Account.
“Reserve Account Threshold” shall have the meaning set forth in the Pricing Side Letter.
“Responsible Officer” shall mean (i) as to any Person, the Chief Executive Officer or, with respect to financial matters, the Chief Financial Officer or Chief Accounting Officer or any other officer of such Person whose responsibilities are substantially consistent with those of any of the foregoing or are tasked with acting on behalf of any of the foregoing and (ii) as to Seller, President, Chief Administrative Officer, Treasurer, Senior Managing Counsel or any other executive managing member.
“S&P” shall mean Standard & Poor’s Ratings Services, or any successor thereto.
“Sanctioned Country” shall have the meaning set forth in Section 13(bb) hereof.
“Sanctions” shall have the meaning set forth in Section 13(bb) hereof.
“SDN List” shall have the meaning set forth in Section 13(bb) hereof.
“Section 4402” shall have the meaning set forth in Section 31 hereof.
“Section 8 Certificate” shall have the meaning set forth in Section 8(e)(ii) hereof.
“Securities Issuance Failure” the failure of a pool of Pooled Mortgage Loans to back the issuance of an Agency Security.
“Seller” shall mean Home Point Financial Corporation.
“Seller Employees” shall have the meaning set forth in Section 14(m) hereof.
“Servicer” shall mean any servicer or subservicer appointed by Seller and approved by Buyer in its good faith discretion, which may be Seller.
“Servicer Side Letter” shall have the meaning set forth in Section 18(c) hereof.
“Servicer Termination Event” shall mean (i) an Event of Default hereunder or (ii) with respect to any Servicer (1) an event of default under the related Servicing Agreement, (2) such Servicer shall become the subject of an Insolvency Event, (3) such Servicer shall admit its inability to, or its intention not to, perform any of its obligations under the Facility Documents, or (4) the failure of such Servicer to perform its obligations under any of the Facility Documents to which it is a party or the related Servicing Agreement, including, without limitation, the failure of such Servicer to (A) remit funds in accordance with Section 5(a)(i) hereof, or (B) deliver reports to Seller when required.
“Servicing Agreement” shall mean any servicing agreement entered into between Seller and a third party servicer, which form and substance has been approved by Buyer, as the same may be amended from time to time of which Buyer shall be an intended third party beneficiary.
“Servicing Rights” shall mean rights of Seller or any other Person to administer, manage, service or subservice, the Purchased Mortgage Loans or to possess related Records.
“Settlement Date” means, with respect to Pooled Mortgage Loans subject to a Transaction, that date specified as the contractual delivery and settlement date in the related Take-out Commitment pursuant to which Buyer or its designee under the Joint Securities Account Control Agreement has the right to deliver Agency Securities to the Take-out Investor.
“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 benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.
“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 Buyer hereunder, in each case, on terms and conditions approved in writing by Buyer and all other terms and conditions of which are satisfactory in form and substance to Buyer.
“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.
“Take-out Commitment” shall mean a commitment of Seller to sell one or more Purchased Mortgage Loans to a Take-out Investor in an arms-length, all cash transaction, and the corresponding Take-out Investor’s commitment back to Seller to effectuate the foregoing.
“Take-out Investor” shall mean any Person (other than an Affiliate of Seller) that has entered into a Take-out Commitment; provided that to the extent Purchased Mortgage Loans are sent pursuant to a Bailee Letter with a third party bailee that is not a nationally known bank prior to purchase, such third party bailee must be approved by Buyer in its good faith discretion.
“Taxes” shall have the meaning set forth in Section 8(a) hereof.
“Term SOFR” shall mean, with respect to any Transaction for any day, the Term SOFR Reference Rate for a one month tenor, as such rate is published by the Term SOFR Administrator for such day at 6:00 a.m. (New York City time); provided, however, that if as of 5:00 p.m. (New York City time) the Term SOFR Reference Rate for the foregoing tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to Term SOFR has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator.
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by Buyer in its sole discretion).
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“Term SOFR” shall mean the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Termination Date” shall have the meaning assigned thereto in the Pricing Side Letter.
“Transaction” shall have the meaning set forth in Section 1 hereof.
“Transaction Notice” shall mean a request from Seller to Buyer, which may be by electronic means (including e-mail), to enter into a Transaction.
“Trust Receipt” shall have the meaning set forth in the Custodial and Disbursement Agreement.
“UETA” shall mean 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.
“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“Underwriting Guidelines” means the standards, procedures and guidelines of Seller for underwriting and acquiring Mortgage Loans, which are set forth in the written policies and procedures of Seller, which have previously been provided and such other guidelines as are identified and provided to Buyer.
“Underwriting Package” shall mean with respect to any proposed Purchased Mortgage Loan, the Asset Schedule listing such proposed Purchased Mortgage Loan and such other
computer readable file or other information requested by Buyer during the course of its due diligence and delivered prior to the date of a Transaction for such proposed Purchased Mortgage Loan containing, with respect to the related proposed Purchased Mortgage Loan, information in form and substance acceptable to Buyer in its reasonable discretion, together with a certification that Seller has no actual knowledge of any information concerning such proposed Purchased Mortgage Loan which is not reflected in such file or otherwise disclosed to Buyer in writing.
“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 hereof relating to such perfection or effect of perfection or non-perfection.
“U.S. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“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.
“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended.
“USDA” means the United States Department of Agriculture.
“USDA Mortgage Loan” means a first lien Mortgage Loan originated in accordance with the criteria established by and guaranteed by the USDA.
“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” means a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.
“VA Loan” shall mean a Mortgage Loan which is subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate.
“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.
“Wet-Ink Mortgage Loan Document Receipt Date” shall mean the [***] Business Day following the applicable Purchase Date.
“Wet-Ink Mortgage Loan” shall mean a Mortgage Loan originated by Seller in a transaction table-funded by Buyer, which origination or table funding is financed in part or in whole with proceeds of Transactions and as to which the Custodian has not yet received the related Mortgage File. A Mortgage Loan shall cease to be a Wet-Ink Mortgage Loan on the date on which Buyer has received a Trust Receipt and Exception Report from the Custodian with
respect to such Mortgage Loan confirming that the Custodian has physical possession of the related Mortgage File (as defined in the Custodial and Disbursement Agreement) and that there are no Exceptions (as defined in the Custodial and Disbursement Agreement) with respect to such Mortgage Loan.
“Wet-Ink Transaction” shall mean a Transaction in which a Wet-Ink Mortgage Loan is the Purchased Mortgage 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).
Section 3. No Commitment; Initiation; Termination.
Prior to the occurrence and continuation of an Event of Default and subject to the terms and conditions set forth herein, Buyer agrees that it may, in its sole discretion, enter into Transactions with Seller from time to time in an aggregate principal amount that will not result in the Aggregate Facility Purchase Price for all Purchased Mortgage Loans subject to then outstanding Transactions under this Agreement, together with any Eligible Mortgage Loans that are being offered by Seller for purchase under such Transaction to exceed, as of any date determination, the Maximum Aggregate Purchase Price. Within the foregoing limits and subject to the terms and conditions set forth herein, Seller and Buyer may enter into Transactions. This Agreement is not a commitment by Buyer to enter into Transactions with Seller but sets forth the requirements under which Buyer would consider entering into Transactions as set forth herein. For the sake of clarity, Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement.
(a) Conditions Precedent to Initial Transaction. Buyer’s agreement (if any) 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 due and payable hereunder, and all of the following documents, each of which shall be satisfactory to Buyer and its counsel in form and substance:
(i) Facility Documents. The Facility Documents, duly executed by the parties thereto;
(ii) Opinions of Counsel. (A) A security interest creation and perfection, general corporate, Investment Company Act and enforceability opinion or opinions of counsel to Seller and (B) a Bankruptcy Code opinion of outside counsel to Seller with respect to matters outlined in Section 33, each of which shall be in a form acceptable to Buyer in its reasonable discretion;
(iii) Organizational Documents. A certified copy of the articles of incorporation of Seller from the jurisdiction of organization of Seller delivered to Buyer prior to the Effective Date and copies of the organizational documents of Seller and evidence of all corporate or other authority for Seller with respect to the execution, delivery and performance of the Facility Documents to which it is a party and each other document to be delivered by Seller from time to time in connection herewith;
(iv) Good Standing Certificates. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date that is fifteen (15) Business Days prior to the date hereof;
(v) Incumbency Certificates. An incumbency certificate of the manager, member, director or other similar officer of Seller certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Facility Documents to which it is a party;
(vi) Security Interest. Evidence that all other actions necessary to perfect and protect the sale, transfer, conveyance and assignment by Seller to Buyer or its designee, subject to the terms of this Agreement, of all of Seller’s right, title and interest it may have in and to the Purchased Mortgage Loans, the Repurchase Assets, and other items pledged under Section 9(a) together with all right, title and interest in and to the proceeds of any related Repurchase Assets have been taken, including in each case performing UCC searches and duly authorized and filing Uniform Commercial Code financing statements on Form UCC-1;
(vii) Insurance. Evidence that the Seller has added Buyer as an additional loss payee under the Seller’s Fidelity Insurance Policy and as a direct loss payee with right of action under the Errors and Omissions Insurance Policy or Professional Liability Insurance Policy, copies of which are attached hereto as Exhibit C;
(viii) [Reserved];
(ix) Reserve Account. Evidence that the Reserve Account has been established, per the terms of this Agreement, and contains at least the Reserve Account Threshold; and
(x) Other Documents. Such other documents as Buyer may request, in form and substance acceptable to Buyer.
(b) Conditions Precedent to all Transactions. Upon satisfaction of the conditions set forth in Section 3(a) hereof, and subject to the limitations set forth in the first paragraph of Section 3, Buyer may, in its sole discretion, enter into a Transaction with Seller. Buyer’s entering into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof:
(i) Due Diligence Review. Without limiting the generality of Section 20 hereof, Buyer shall have completed, to its satisfaction, its due diligence review of the related Mortgage Loans and Seller;
(ii) No Default. No Default or Event of Default shall have occurred and be continuing under the Facility Documents;
(iii) Representations and Warranties; Eligible Mortgage Loans. 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 13 hereof and on Schedule 1-A and Schedule 1-B hereto, as applicable, in respect of the related Purchased Mortgage Loan, shall be true, correct and complete on and as of such Purchase Date in all 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 Facility Purchase Price subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Aggregate Purchase Price;
(v) No Purchased Mortgage Loan Issue; No Margin Deficit. As of the related Purchase Date, (A) Seller shall not have failed to repurchase any Purchased Mortgage Loan pursuant to a repurchase request by Buyer pursuant to Section 4 hereof following the occurrence of a Purchased Mortgage Loan Issue with respect to such Purchased Mortgage Loan, and (B) no Margin Deficit shall have occurred and be continuing with respect to any Purchased Mortgage Loans. Additionally, after giving effect to the requested Transaction, no Purchased Mortgage Loan Issue or Margin Deficit shall have occurred or be continuing with respect to the related Purchased Mortgage Loans;
(vi) Transaction Notice. Seller shall have delivered to Buyer (a) a Transaction Notice and (b) an Asset Schedule;
(vii) Delivery of Mortgage File. Seller shall have delivered to the Custodian the Mortgage File with respect to each Mortgage Loan that is not a Wet-Ink Mortgage Loan and that is subject to the proposed Transaction, and the Custodian shall have issued a Trust Receipt showing no exceptions with respect to each such Mortgage Loan to Buyer as of the related Purchase Date all subject to and in accordance with the Custodial and Disbursement Agreement;
(viii) [Reserved].
(ix) Approval of Servicing Agreement. To the extent not previously delivered and approved, Buyer shall have, in its sole reasonable discretion, approved each Servicing Agreement pursuant to which any Mortgage Loan that is subject to such Transaction is to be serviced during the term of such Transaction;
(x) Servicer Side Letter. To the extent the related Purchased Mortgage Loans are to be serviced or sub-serviced by a Servicer other than Seller, Buyer shall have received (a) a Servicer Side Letter with respect to Purchased Mortgage Loans serviced by each Servicer and (b) if Buyer so requests in its sole reasonable discretion, an opinion of Seller’s counsel as to the enforceability of such Servicer Side Letter, in form and substance acceptable to Buyer;
(xi) [Reserved.]
(xii) Requirements of Law. Buyer shall not have determined in good faith 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 Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions hereunder, and Buyer shall have made a similar determination with respect to similarly situated counterparties with similar collateral;
(xiii) No Material Adverse Change. None of the following shall have occurred and/or be continuing:
(A) an event or events shall have occurred in the good faith determination of Buyer resulting in the effective absence of a “repo
market” or comparable “lending market” for financing debt obligations secured by 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) an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by Mortgage Loans or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by Mortgage Loans at prices which would have been reasonable prior to such event or events; or
(C) there shall have occurred a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement; or
(D) there shall have occurred (i) a material change in financial markets, a material 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;
(xiv) Certification. Each Transaction Notice delivered by Seller hereunder shall constitute a certification by Seller that all the conditions set forth in this Section 3(b) have been, or will be on the related Purchase Date, satisfied (both as of the date of such notice or request and as of Purchase Date);
(xv) Repurchase Date. The Repurchase Date for each Transaction shall not be later than the then current Termination Date;
(xvi) Reserve Account. Evidence that the Reserve Account contains at least the Reserve Account Threshold;
(xvii) [Reserved].
(xviii) Correspondent Seller. With respect to each Correspondent Mortgage Loan, Seller shall not have received notice from Buyer that the related Correspondent Seller is not approved;
(xix) Pooled Mortgage Loans. Prior to giving effect to any Transaction with respect to any Pooled Mortgage Loan, Buyer shall be added as a party to (i) the Intercreditor Agreement and (ii) the Joint Securities Account Control Agreement, in each case, duly executed and delivered by the parties thereto;
(xx) Other Documents. Such other documents as Buyer may request, consistent with market practices, in form and substance reasonably acceptable to Buyer; and
(xxi) Security Release Certification. With respect to each Purchased Mortgage Loan that is subject to a security interest (including any precautionary security interest) immediately prior to the Purchase Date, Seller shall have
received adequate documentation necessary to release the related secured party’s security interest in such Purchased Mortgage Loan and upon request shall provide such documentation to Buyer. If necessary, such secured party shall have filed UCC termination statements in respect of any UCC filings made in respect of such Purchased Mortgage Loan, and each such release and UCC termination statement has been delivered to Buyer prior to each Transaction and to the Custodian as part of the Mortgage File.
(c) Initiation (Transactions other than Wet-Ink Transactions).
(i) Unless otherwise agreed, Seller may request that Buyer enter into a Transaction with respect to any Eligible Mortgage Loans on any Business Day during the period from the Effective Date to and excluding the Termination Date, by delivering to Buyer, with a copy to the Custodian, a (i) Transaction Notice, which must be received no later than [***] (New York City time) on the Business Day prior to the requested Purchase Date, and (ii) an Asset Schedule, which must be received no later than [***] (New York City time) on the requested Purchase Date. The delivery of such Transaction Notice shall be deemed a representation and warranty that Seller has no actual knowledge of any material information concerning such Eligible Mortgage Loan which is not reflected in such Asset Schedule or Transaction Notice or other information or otherwise disclosed to Buyer in writing. Buyer shall have the right to review the information set forth on the Transaction Notice and accompanying Asset Schedule, the Underwriting Package and the Eligible Mortgage Loans proposed to be subject to a Transaction as Buyer determines during normal business hours. In the event the Asset 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 a Responsible Officer of Seller describing such error and Seller may either (a) give Buyer written or electronic authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields or (b) correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein. In the event that Seller gives Buyer authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields, Seller shall hold Buyer harmless for such correction, reformatting or realigning, as applicable, except as otherwise expressly provided herein.
(ii) Upon Seller’s request to enter into a Transaction pursuant to Section 3(c)(i) and assuming all conditions precedent set forth in this Section 3 and have been met, on the requested Purchase Date, Buyer may, in its sole discretion purchase the Eligible Mortgage Loans included in the related Transaction Notice pursuant to the terms of this Agreement.
(iii) Each Transaction Notice together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby.
(iv) Subject to the terms and conditions of this Agreement, during such period Seller may sell to, repurchase from and resell to Buyer Eligible Mortgage Loans hereunder.
(v) Seller shall deliver to the Custodian, in accordance with the terms of the Custodial and Disbursement Agreement, the Mortgage File pertaining to each Mortgage Loan to be sold to Buyer hereunder on the requested Purchase Date. Upon Buyer’s receipt of the Trust Receipt in accordance with the Custodial
and Disbursement Agreement and subject to the provisions of this Section 3, to the extent that Buyer agrees in its sole discretion to fund the related Purchase Price on the Purchase Date, such aggregate Purchase Price for the related Transaction shall then be made available to Seller by Buyer transferring, via wire transfer, in the aggregate amount of such Purchase Prices in funds immediately available in accordance with Section 10(b).
(d) Initiation (Wet-Ink Transactions).
(i) Seller may request a Wet-Ink Transaction hereunder, on any Business Day during the period from the Effective Date to and excluding the Termination Date, by delivering to Buyer, with a copy to the Custodian, a transmission or transmissions which shall attach (i) a Transaction Notice with respect to the related Mortgage Loans, which shall be received no later than [***] (New York City time) on the Business Day prior to the requested Purchase Date and (ii) an Asset Schedule with respect to the related Mortgage Loans, the latest transmission of which must be received by the Buyer and Custodian no later than [***] (New York City time) on such Purchase Date. Such Transaction Notice shall specify the requested Purchase Date. In the event the Asset 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 a Responsible Officer of Seller describing such error and Seller may either (a) give Buyer written or electronic authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields or (b) correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein. In the event that Seller gives Buyer authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields, Seller shall hold Buyer harmless for such correction, reformatting or realigning, as applicable, except as otherwise expressly provided herein.
(ii) Seller shall deliver (or cause to be delivered) and release to the Custodian the Mortgage File pertaining to such Wet-Ink Mortgage Loans no later than the Wet-Ink Mortgage Loan Document Receipt Date in accordance with the terms and conditions of the Custodial and Disbursement Agreement.
(iii) Upon the Seller’s request for a Transaction pursuant to Section 3(d)(i), the Buyer may, upon satisfaction of all conditions precedent set forth in Sections 3(a) and 3(b) hereof, and provided that no Default or Event of Default shall have occurred and be continuing, enter into a Transaction with Seller on the requested Purchase Date, in the amount so requested.
(iv) Upon notice from the Closing Agent to Seller that a Wet-Ink Mortgage Loan was not originated, such Wet-Ink Mortgage Loan shall be removed from the list of Eligible Mortgage Loans. The Seller shall notify Buyer in writing if a Wet-Ink Mortgage Loan was not originated and has been removed from the list of Eligible Mortgage Loans.
Section 4. Repurchases.
(a) Seller shall repurchase the related Purchased Mortgage Loans from Buyer without penalty or premium on each related Repurchase Date. On the Repurchase Date for any Transaction, termination of such Transaction will be effected by reassignment to Seller or its designee of the Purchased Mortgage Loans subject to such Transaction
against the simultaneous transfer of the Repurchase Price (excluding the amounts identified in clause (B) of the definition of Repurchase Price, which, for the avoidance of doubt, shall be paid on the next succeeding Price Differential Payment Date) to the account of the Buyer that is referenced in Section 10(a) of this Agreement. Buyer shall instruct the Custodian to release the Mortgage Files with respect to each repurchased Purchased Mortgage Loan to Seller or its designee at Seller’s expense on the related Repurchase Date.
(b) So long as no Default or Event of Default has occurred or is continuing, Seller may effect a repurchase in connection with the sale or disposition of Purchased Mortgage Loans to a Take-out Investor or other applicable buyer; provided, that Seller shall be permitted to effect such a repurchase if a Default has occurred and is continuing only if such repurchase would cure such Default; provided, further, that Seller shall not be permitted to repurchase any Purchased Mortgage Loan if the release of such Purchased Mortgage Loans would result in a Margin Deficit unless such Margin Deficit is simultaneously cured by Seller in connection with such repurchase by payment by Seller. If Seller intends to make such a repurchase, by no later than [***] (New York City time) on the desired Repurchase Date, Seller shall or shall cause the Take-out Investor or other applicable buyer to (i) provide Buyer with a purchase advice notice identifying the Purchased Mortgage Loan(s) being repurchased and the related take-out price(s), and (ii) make payment directly to the account of the Buyer that is referenced in Section 10(a) of this Agreement in an amount equal to the aggregate net proceeds to be received by Seller in connection with the related sale. Buyer shall, on the same Business Day of receipt of such funds, apply such funds to the Repurchase Price of the related Mortgage Loans and shall, on the same Business Day of receipt of such funds, remit any excess to Seller; provided, that Buyer shall have no obligation to apply payments in the event that it is unable to identify the Purchased Mortgage Loans to which such payments correspond. Upon repurchase of the related Purchased Assets, Buyer will be deemed to have released its interests hereunder in such Purchased Assets, and Buyer shall represent to Seller, to the extent that good title was transferred and assigned by Seller to Buyer hereunder on the related Purchase Date, that Buyer is the sole owner of such Purchased Asset, free and clear of any other interests or liens caused by the Buyer’s actions or inactions.
(c) Without limiting Buyer’s rights and remedies under Section 7 hereof or otherwise, if at any time there has occurred a Purchased Mortgage Loan Issue with respect to any Purchased Mortgage Loan, Buyer may, at its option, by notice to a Responsible Officer of Seller (as such notice is more particularly set forth below, a “Repurchase Notice”), require Seller or its designee to repurchase such Purchased Mortgage Loan by remitting the related Repurchase Price (excluding the amounts identified in clause (B) of the definition of Repurchase Price, which, for the avoidance of doubt, shall be paid on the next succeeding Price Differential Payment Date) to the Disbursement Account of Buyer as soon as is practicable but, in any case, not more than two (2) Business Days after Buyer has delivered such Repurchase Notice to a Responsible Officer of Seller.
(d) Buyer’s election, in its sole and absolute discretion, not to send a Repurchase Notice at any time a Purchased Mortgage Loan is no longer an Eligible Mortgage Loan shall not in any way limit or impair its right to send a Repurchase Notice at a later time.
(e) The fact that Buyer has conducted or has failed to conduct any partial or complete due diligence investigation in connection with its purchase of any Purchased Mortgage Loan shall not affect Buyer’s right to demand repurchase or any other remedy as permitted under this Agreement.
Section 5. Income Payments; Price Differential.
(a) Income Payments.
(i) If Income is paid in respect of any Purchased Mortgage Loans during the term of a Transaction, such Income shall be the property of Buyer. Upon the occurrence and during the continuance of an Event of Default, within two (2) Business Days of receipt and identification thereof, Seller shall, and shall cause Servicer to, deposit all Income into the account set forth in Section 10(a) hereof.
(ii) Notwithstanding any provision to the contrary in this Section 5, within three (3) Business Days of receipt by Seller or Servicer of any prepayment of principal in full, with respect to a Purchased Mortgage Loan, Seller shall or shall cause Servicer to remit such amount directly to the Disbursement Account of Buyer and Buyer shall immediately apply any such amount received to reduce the amount of the Repurchase Price due upon termination of the related Transaction and shall promptly remit any excess to Seller; provided, that Buyer shall have no obligation to apply payments in the event that it is unable to identify the Purchased Mortgage Loans to which such payments correspond.
(iii) Notwithstanding the preceding provisions, if an Event of Default has occurred and is continuing, all funds received by Buyer pursuant to this Section 5 shall be applied to reduce the Obligations as determined by Buyer in its sole discretion.
(b) Price Differential.
(i) 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 each Price Differential Collection Period shall be settled in cash on the following Price Differential Payment Date. Two (2) Business Days prior to the Price Differential Payment Date, Buyer shall give Seller written or electronic notice of the amount of the Price Differential due on such Price Differential Payment Date. On the Price Differential Payment Date, Seller shall pay to Buyer the Price Differential for such Price Differential Payment Date (along with any other amounts due from Seller under this Agreement or any other Facility Document), by wire transfer in immediately available funds.
(ii) If Seller fails to pay all or part of the Price Differential by [***] (New York City time) on the related Price Differential Payment Date, with respect to any Purchased Mortgage Loans, Seller shall be obligated to pay to Buyer (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 Buyer. For the avoidance of doubt, Seller’s obligation to pay any Price Differential to Buyer shall not be deemed to be satisfied (and such Price Differential shall not deemed to be paid to Buyer) until the amount of such Price Differential is actually received by Buyer in the account of Buyer that is referenced in Section 10(a) of this Agreement (and not the Disbursement Account or any other account).
Section 6. Requirements Of Law.
(a) If any Requirement of Law or any change in the interpretation or application thereof or compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject Buyer to any Tax or increased Tax of any kind whatsoever (other than Excluded Taxes) with respect to this Agreement or any Transaction or change the basis of taxation of payments to Buyer in respect thereof;
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of Buyer which is not otherwise included in the determination of the LIBOR RateTerm SOFR hereunder; or
(iii) shall impose on Buyer any other material condition;
and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, in any such case, (A) Buyer shall give Seller prompt notice thereof and (B) Seller shall, at its option, either (1) promptly repurchase all Purchased Mortgage Loans then subject to a Transaction or (2) 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; provided that in making a determination of increased cost pursuant to this Section 6(a), Buyer shall treat Seller in substantially the same manner Buyer treats similarly situated counterparties for similar collateral; provided, further, that Seller shall not be responsible for any amounts under this Section 6(a) if such increased costs or reduced amount receivables are incurred by Buyer prior to the date that is ninety (90) days prior to Buyer’s notice to a Responsible Officer of Seller of such costs.
(b) If Buyer shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Buyer to be material, then from time to time, Seller shall, at its option, either (1) promptly repurchase all Purchased Mortgage Loans then subject to a Transaction or (2) 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; provided that in making a determination of increased cost pursuant to this Section 6(b), Buyer shall treat Seller in substantially the same manner Buyer treats similarly situated counterparties for similar collateral; provided, further, that Seller shall not be responsible for any amounts under this Section 6(b) if such increased costs or reduced amount receivables are incurred by Buyer prior to the date that is ninety (90) days prior to Buyer’s notice to a Responsible Officer of Seller of such costs.
(c) If Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify Seller of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this Section submitted by Buyer to Seller shall be conclusive in the absence of manifest error.
Section 7. Margin Maintenance.
(a) If at any time the aggregate outstanding Purchase Price of all Purchased Mortgage Loans subject to Transactions is greater than the aggregate Asset Value of such Purchased Mortgage Loans subject to Transactions (a “Margin Deficit”), and such Margin Deficit is greater than the Minimum Margin Threshold, then Buyer may by notice to a Responsible Officer of Seller (as such notice is more particularly set forth below, a “Margin Call”), require Seller to transfer to Buyer cash in an amount at least equal to the Margin Deficit (such amount, a “Margin Payment”).
(b) If Buyer delivers a Margin Call to Seller on or prior to [***] (New York City time) on any Business Day, then Seller shall transfer the Margin Payment to Buyer or its designee no later than [***] (New York City time) on such Business Day. In the event Buyer delivers a Margin Call to Seller after [***] (New York City time) on any Business Day, Seller shall be required to transfer the Margin Payment no later than [***] (New York City time) on the following Business Day.
(c) Seller shall transfer any Margin Payment to the account of Buyer that is referenced in Section 10(a) of this Agreement.
(d) In the event that a Margin Deficit exists with respect to any Purchased Mortgage Loans, Buyer may retain any funds received by it to which the Seller would otherwise be entitled hereunder, which funds (i) shall be held by Buyer against the related Margin Deficit and (ii) may be applied by Buyer against the Repurchase Price of any Purchased Mortgage Loan for which the related Margin Deficit remains otherwise unsatisfied. Notwithstanding the foregoing, Buyer retains the right, in its sole discretion, to make a Margin Call in accordance with the provisions of this Section 7.
(e) The failure of Buyer, 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 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.
Section 8. 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 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 8) 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 Buyer (including for avoidance of doubt any assignee, successor or participant), (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 Buyer is organized or of its applicable lending office, or any political subdivision thereof, (ii) any other Taxes imposed as a result of a present or former connection (other than a connection arising from Buyer or Buyer’s assignor having executed, delivered, or performed its obligations or received payments under, or enforced, this Agreement or any other Facility Documents) between Buyer or Buyer-transferor, as applicable, and the jurisdiction imposing the Tax, (iii) Taxes as a result of Buyer or Buyer-transferor, as applicable, changing its lending office after the Effective Date, (iv) Taxes attributable to Buyer or Buyer-transferor, as applicable, failing to comply with Section 8(e), and (v) any withholding Taxes imposed under FATCA (such Taxes that are expressly excluded from Non-Excluded Taxes, “Excluded Taxes”).
(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 Taxes imposed as a result of a present or former connection between the Buyer and the jurisdiction imposing the Tax (collectively, “Other Taxes”).
(c) Seller hereby agrees to indemnify Buyer for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the full amount of Non-Excluded Taxes or Other Taxes imposed on amounts payable by Seller under this Section 8 imposed on or paid by 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 8(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 imposed or asserted. Amounts payable by Seller under the indemnity set forth in this Section 8(c) shall be paid within ten (10) days from the date on which Buyer makes written demand therefor.
(d) Within thirty (30) days after the date of any payment of Taxes, Seller (or any Person making such payment on behalf of Seller) shall furnish to Buyer for its own account a certified copy of the original official receipt evidencing payment thereof.
(e) For purposes of subsection (e) of this Section 8, 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 incorporated 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.,” “N.A.,” “National Association,” “insurance company,” or “assurance company” (a “Non-Exempt Buyer”) shall deliver or cause to be delivered to Seller the following properly completed and duly executed documents:
(i) in the case of a Non-Exempt Buyer that is not a United States person, or is a foreign disregarded entity for U.S. federal income tax purposes that is entitled to provide such form, a complete and executed (x) U.S. Internal
Revenue Form W-8BEN or U.S. Internal Revenue Form W-8BEN-E in which Buyer claims the benefits of a tax treaty with the United States, if applicable, providing for a zero or reduced rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor forms thereto); or
(ii) in the case of an individual, (x) a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and, if applicable, a certificate substantially in the form of Exhibit D (a “Section 8 Certificate”) or (y) a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto); or
(iii) in the case of a Non-Exempt Buyer that is organized under the laws of the United States, any State thereof, or the District of Columbia, a complete and executed U.S. Internal Revenue Service Form W-9 (or any successor forms thereto), including all appropriate attachments; or
(iv) in the case of a Non-Exempt Buyer that (x) is not organized under the laws of the United States, any State thereof, or the District of Columbia and (y) is treated as a corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN-E (or any successor forms thereto) and, if applicable, a Section 8 Certificate; or
(v) in the case of a Non-Exempt Buyer that (A) is treated as a partnership or other non-corporate entity, and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia, (x)(i) a complete and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments) and (ii) if applicable, a Section 8 Certificate, and (y) 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 owners”), the documents that would be provided by each such beneficial owner pursuant to this Section if such beneficial owner were Buyer; provided, however, that no such documents will be required with respect to a beneficial owner to the extent the actual Buyer is determined to be in compliance with the requirements for certification on behalf of its beneficial owner as may be provided in applicable U.S. Treasury regulations, or the requirements of this clause (v) are otherwise determined to be unnecessary; or
(vi) in the case of a Non-Exempt Buyer that is disregarded for U.S. federal income tax purposes, the document that would be provided by its beneficial owner pursuant to this Section if such beneficial owner were Buyer; or
(vii) in the case of a Non-Exempt Buyer that (A) is not a United States person and (B) is acting in the capacity as 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) if applicable, a Section 8 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 provided by each such person pursuant to this Section if each such person were Buyer.
Buyer agrees that if any form provided pursuant to clause (e)(i)-(vii) above 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. If Buyer has provided a form pursuant to clause (e)(i)-(vii) above and the form provided by Buyer either at the time Buyer first becomes a party to this Agreement or, with respect to a grant of a participation, at the effective date of such participation, indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be treated as Excluded Taxes and shall not cease to be Excluded Taxes, and qualify as Non-Excluded Taxes, unless and until Buyer provides the appropriate form, if any as required by Section 8(e), 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 (after the Effective Date) a Person becomes an assignee, successor or participant to this Agreement, Buyer-transferor was entitled to indemnification or additional amounts under this Section 8, then Buyer assignee, successor or participant shall be entitled to indemnification or additional amounts to the extent (and only to the extent), that Buyer transferor was entitled to such indemnification or additional amounts for Non-Excluded Taxes, and Buyer assignee, successor or participant shall be entitled to additional indemnification or additional amounts for any other or additional Non-Excluded Taxes.
(f) For any period with respect to which Buyer has failed to provide Seller with the appropriate form, certificate or other document described in subsection (e) of this Section 8, Buyer shall not be entitled to indemnification or additional amounts under subsection (a) or (c) of this Section 8 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 at Buyer’s expense as Buyer shall reasonably request, to assist Buyer in recovering such Non-Excluded Taxes.
(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), 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 paragraph (h) (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 subsection (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection (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 subsection 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) 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 Buyer to make available any of its tax returns or any other information that it deems to be confidential or proprietary.
Section 9. Security Interest; Buyer’s Appointment as Attorney-in-Fact.
(a) Security Interest. On each Purchase Date, Seller hereby sells, assigns and conveys to Buyer all right, title and interest in the Purchased Mortgage Loans listed on the related Asset Schedule to the extent of its rights therein, although the parties intend that all Transactions hereunder be sales and purchases and not loans (in each case, other than for accounting and tax purposes), in the event any such Transactions are deemed to be loans, and in any event, Seller, to the extent of its rights therein, hereby pledges to Buyer as security for the performance of the Obligations and hereby grants, assigns and pledges to Buyer a first priority security interest in Seller’s rights, title and interest in:
(i) the Purchased Mortgage Loans, the Records related to the Purchased Mortgage Loans, all Servicing Rights related to the Purchased Mortgage Loans, all Agency Securities related to Pooled Mortgage Loans that are Purchased Mortgage Loans or right to receive any such Agency Security when issued to the extent backed by any of the Purchased Mortgage Loans, the Facility Documents (to the extent such Facility Documents and Seller’s rights thereunder relate to the Purchased Mortgage Loans), any related Take-out Commitments related to such Purchased Mortgage Loans, any Property relating to any Purchased Mortgage Loan or the related Mortgaged Property, all insurance policies and insurance proceeds relating to any Purchased Mortgage Loan or any 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), any Income relating to any Purchased Mortgage Loan, Interest Rate Protection Agreements related to such Purchased Mortgage Loans, the Reserve Account, and any other 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 solely to any Purchased Mortgage Loans and any other assets to the extent relating solely to the Purchased Mortgage Loans (including, without limitation, any other accounts) or any interest in the Purchased Mortgage Loans and any proceeds and distributions and any other property, rights, title or interests as are specified on a Trust Receipt and Exception Report with respect to any of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created in each case excluding any Take-out Commitments, insurance policies and Interest Rate Protection Agreements to the extent Seller may not, pursuant to the provisions thereof, assign or transfer, or pledge or grant a security interest in, such Take-out Commitments, insurance policies or Interest Rate Protection Agreements without the consent of, or without violating its obligations to, the related Take-out Investor, insurance provider or counterparty to such Interest Rate Protection Agreement, to such but only to the extent such provisions are not rendered ineffective against the Buyer under Article 9, Part 4 of the Uniform Commercial Code (collectively, the “Repurchase Assets”).
(ii) The foregoing paragraph (i) is intended to constitute a security agreement or other arrangement or other credit enhancement related to the Agreement and transactions hereunder as defined under Section 101(47)(v) and 741(7)(xi) of the Bankruptcy Code.
(b) Servicing Rights. 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 first priority security interest in the Servicing Rights and proceeds related thereto and all of its contractual rights under the Servicing Agreement in respect of the servicing thereunder and in all instances, whether now owned or hereafter acquired, now existing or hereafter created, including all of Servicing Rights related to the Purchased Mortgage Loans, exclusive of any Purchased Mortgage Loan or contractual rights for the Purchased Mortgage Loan that, in either case, is repurchased in full by Seller in accordance with the provisions of this Agreement and therefore is no longer subject to a Transaction. 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.
(c) Financing Statements. Seller hereby authorizes Buyer to file such financing statement or statements relating to the Repurchase Assets as Buyer, at its option, may deem reasonable and appropriate to protect Buyer’s interest therein. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 9.
(d) Buyer’s Appointment as Attorney in Fact. Seller hereby irrevocably constitutes and appoints 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, for the purpose, following the occurrence and continuation of an Event of Default, of carrying out the terms of this Agreement 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 the purposes of this Agreement, in each case, subject to the terms of this Agreement. Without limiting the generality of the foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller without assent by, 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 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 Buyer for the purpose of collecting any and all such moneys due with respect to any Repurchase Assets whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or threatened in writing against the Repurchase Assets; and
(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 Buyer or as Buyer shall direct, including, without limitation, any payment agent with respect to any Repurchase Asset; (B) to send “goodbye” letters on behalf of Seller and Servicer 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 Repurchase Assets; (D) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase 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 Repurchase Assets or any proceeds thereof and to enforce any other right in respect of any Repurchase Assets; (F) to defend any suit, action or proceeding brought against Seller with respect to any Repurchase 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 Buyer may deem appropriate and (H) 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 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 Repurchase Assets and Buyer’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. In addition to the foregoing, Seller agrees to execute a Power of Attorney, the form of Exhibit F hereto, to be delivered on the date hereof. Seller and Buyer acknowledge that the Power of Attorney shall terminate on the Termination Date and satisfaction in full of the Obligations.
Seller also authorizes Buyer, if an Event of Default shall have occurred, from time to time, to execute, in connection with any sale provided for in Section 16 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Repurchase Assets.
The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Repurchase 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.
Section 10. Payment, Transfer and Remittance.
(a) Payments and Transfers of Funds. Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at the following account maintained by Buyer: [***], 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 Buyer or its designee against the simultaneous transfer of the Purchase Price to the account (or accounts) designated by Seller to Buyer simultaneously with the delivery to Buyer of the Purchased Mortgage Loans relating to such Transaction.
Section 11. Hypothecation or Pledge of Purchased Mortgage Loans. Title to all Purchased Mortgage Loans and Repurchase Assets shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Mortgage Loans and Repurchase Assets, subject to the terms of this Agreement. Buyer may engage in repurchase transactions with the Purchased Mortgage Loans or Repurchase Assets or otherwise engage in pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Mortgage Loans or Repurchase Assets. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Mortgage Loans or Repurchase Assets delivered to Buyer by Seller.
Section 12. [Reserved].
Section 13. Representations. Seller represents and warrants to Buyer that as of the Purchase Date 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 this Agreement and any Transaction hereunder is in full force and effect:
(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) Intellectual Property. Seller and its Subsidiaries owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not be expected to have, either individually or in the aggregate, a Material Adverse Effect.
(c) Solvency. Neither the Facility Documents nor any Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Seller’s creditors. The transfer of the Purchased Mortgage Loans subject hereto is not undertaken with the intent to hinder, delay or defraud any of Seller’s creditors. Seller is not insolvent within the meaning of 11 U.S.C. Section 101(32) and the transfer and sale of the Purchased Mortgage Loans pursuant hereto (i) will not cause Seller to become insolvent, (ii) will not result in any property remaining with Seller to be unreasonably small capital with which to engage in its business, and (iii) will not result in debts that would be beyond Seller’s ability to pay as same mature. Seller received reasonably equivalent value in exchange for the transfer and sale of the Purchased Mortgage Loans subject hereto.
(d) 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 Mortgage Loans pursuant to this Agreement or such other Person who has received such commission or compensation.
(e) Ability to Perform. Seller has the ability to perform each and every covenant contained in the Facility Documents to which it is a party on its part to be performed.
(f) Existence. Seller and each of its Subsidiaries: (a) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable; (b) has the power and authority and all governmental licenses, authorizations, permits, consents and approvals to (i) own its assets and carry on its business as now being or as proposed to be conducted and (ii) execute, deliver, and perform its obligations under the Facility Documents to which it is a party; (c) is duly qualified as a foreign corporation, limited liability company or limited partnership, as
applicable, and licensed and in good standing, under the laws of each jurisdiction in which the nature of the business conducted by it makes such qualification necessary; and (d) is in compliance with all Requirements of Law, in each case of clauses (a)-(d), except as would not be reasonably likely to have a Material Adverse Effect.
(g) Environmental Matters. Seller and each of its Subsidiaries is and has been in compliance with all applicable Environmental Laws, including obtaining and maintaining all Permits required by any applicable Environmental Law.
(h) No Breach. Neither (a) the execution and delivery of the Facility Documents nor (b) the consummation of the transactions therein contemplated to be entered into by Seller in compliance with the terms and provisions thereof will conflict with or result in (i) a breach of the organizational documents of Seller, or (ii) a breach of any applicable law, rule or regulation, or (iii) a breach of any order, writ, injunction or decree of any Governmental Authority, or (iv) a breach of or default under other agreement or instrument to which Seller is a party or by which Seller or any of its Property is bound or to which Seller is subject, or (v) the creation or imposition of any Lien (except for the Liens created pursuant to the Facility Documents) upon any Property of Seller pursuant to the terms of any such agreement or instrument.
(i) Action. Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Facility Documents to which it is a party; the execution, delivery and performance by Seller of each of the Facility Documents to which it is a party have been duly authorized by all necessary corporate or other action on its part; and each Facility Document to which it is a party has been duly and validly executed and delivered by Seller.
(j) Approvals. Except for those that have previously been obtained, no authorizations, approvals, exemptions 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 Seller of the Facility Documents to which it is a party or for the legality, validity or enforceability thereof, except for filings and recordings in respect of the Liens created pursuant to the Facility Documents.
(k) Enforceability. This Agreement and all of the other Facility Documents executed and delivered by Seller, as applicable, in connection herewith are legal, valid and binding obligations of Seller, as applicable, are enforceable against Seller, as applicable, 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 laws affecting creditors’ rights generally and (ii) general principles of equity.
(l) Indebtedness. As of the date of this Agreement, Seller’s Indebtedness is as set forth on Schedule 3.
(m) Labor Relations. There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of Seller or its Subsidiaries, threatened in writing) against or involving Seller or its Subsidiaries, except for those that would not, in the aggregate, be expected to have a Material Adverse Effect.
(n) No Event of Default. No Event of Default has occurred and is continuing.
(o) Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened in writing) 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 federal or state court or before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) 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, which, with respect to subsection (ii), individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect or constitute an Event of Default.
(p) Margin Regulations. The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.
(q) Taxes. Seller has timely filed all tax returns that are required to be filed by it and has timely paid all Taxes, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided or to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect. There are no material Liens for Taxes, except for statutory Liens for Taxes not yet due and payable.
(r) Investment Company Act. 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) Purchased Mortgage Loans. The provisions of this Agreement are effective to either constitute a sale of the Repurchase Assets owned by Seller to Buyer or to create in favor of Buyer a valid security interest in all right, title and interest of Seller in, to and under any Repurchase Assets owned by Seller.
(t) Chief Executive Office/Jurisdiction of Organization. On the Effective Date, Seller’s chief executive office, is, and has been located at 2211 Old Earheart Road, Suite 250, Ann Arbor, Michigan 48105. On the Effective Date, Seller’s jurisdiction of organization is New Jersey.
(u) Location of Books and Records. The location where Seller keeps its books and records, including all computer tapes and records related to the Repurchase Assets is its chief executive office.
(v) True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of Seller to Buyer in connection with the negotiation, preparation or delivery of this Agreement and the other Facility Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of fact or omit to state any 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 Seller to Buyer in connection with this Agreement and the other Facility Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every 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 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 Buyer for use in connection with the transactions contemplated hereby or thereby.
(w) ERISA.
(i) Other than as would not reasonably be expected to have a Material Adverse Effect, during the immediately preceding [***] period, Seller and any ERISA Affiliate thereof has complied in all material respects with the applicable provisions of the Code and ERISA with respect to each Plan, Seller and any ERISA Affiliate thereof has complied with the minimum funding requirements with respect to each Plan and Multiemployer Plan, and no Event of ERISA Termination has occurred resulting in any liability to Seller or any ERISA Affiliate thereof.
(ii) Seller is not currently or reasonably expects to be subject to any liability for a complete or partial withdrawal from a Multiemployer Plan, other than as would not reasonably be expected to have a Material Adverse Effect.
(iii) Seller provides medical or health benefits to former employees as required by the Consolidated Omnibus Budget Reconciliation Act, as amended, or similar state or local law (collectively, “COBRA”) at no material cost to the employer.
(iv) None of Seller or any Subsidiaries or any ERISA Affiliate thereof has incurred a tax liability under Chapter 43 of the Code or a penalty under Section 502(i) 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.
(x) [Reserved].
(y) 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 Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(z) Plan Assets. Seller is not an employee benefit plan as defined in Section 3(3) of Title I of ERISA that is subject to Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code, or an entity deemed to hold “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, and Seller is not acting on behalf of any of the foregoing. Seller is not subject to any state or local statute that regulates investments of, or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA, that is similar to Section 406 of ERISA or Section 4975 of the Code and that would be violated by the transactions contemplated by this Agreement. 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 the hands of Seller.
(aa) Anti-Money Laundering Laws. Seller and each Subsidiary of Seller is in compliance with all U.S. laws related to terrorism or money laundering (“Anti-Money Laundering Laws”) including: (i) all applicable requirements of the Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. 5311 et. seq., (the Bank Secrecy Act)), as
amended by Title III of the USA Patriot Act, (ii) the Trading with the Enemy Act, (iii) Executive Order, any other enabling legislation, executive order or regulations issued pursuant or relating thereto and (iv) other applicable federal or state laws relating to “know your customer” or anti-money laundering rules and regulations, in each case, except as could reasonably be expected to have a Material Adverse Effect. No action, suit or proceeding by or before any court or Governmental Authority with respect to compliance with such Anti-Money Laundering Laws is pending or threatened in writing to the knowledge of Seller and each Subsidiary of Seller.
(bb) Sanctions. Seller and each Subsidiary of Seller is in compliance in all respects with all U.S. economic sanctions laws, the Executive Order, any other executive orders and implementing regulations (“Sanctions”) as administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) and the U.S. State Department, except as could reasonably be expected to have a Material Adverse Effect. None of Seller nor any Subsidiary of Seller (i) is a Person on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”), (ii) is a person who is otherwise the target of U.S. economic sanctions laws such that a U.S. person cannot deal or otherwise engage in business transactions with such person, (iii) is a Person organized or resident in a country or territory subject to comprehensive Sanctions (a “Sanctioned Country”), or (iv) is owned or controlled by (including by virtue of such Person owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person on the SDN List or a government of a Sanctioned Country such that the entry into, or performance under, this Agreement or any other Facility Document would be prohibited by U.S. law. Seller and each Subsidiary of Seller has instituted and will continue to maintain policies and procedures designed to promote compliance by Seller, its Subsidiaries and their respective directors, officers, employees and agents with Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.
(cc) Seller, and each Subsidiary of Seller is in compliance in all respects with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”), (“Anti-Corruption Laws”), except as could reasonably be expected to have a Material Adverse Effect. None of Seller nor any Subsidiary of Seller, nor to the knowledge of Seller, any director, officer, agent, employee, or other person acting on behalf of Seller or any Subsidiary of Seller, has taken any action, directly or indirectly, that would result in a violation of applicable Anti-Corruption Laws.
(dd) Brokers’ Fees; Transaction Fees. Except for fees payable to Buyer, neither Seller nor any of its Subsidiaries has any obligation to any Person in respect of any finder’s, broker’s or investment banker’s fee in connection with the transactions contemplated hereby.
(ee) [Reserved].
(ff) Agency Approvals. To the extent required by applicable law and/or necessary to issue an Agency Security, Seller and Servicer is (i) an FHA Approved Mortgagee, (ii) a VA Approved Lender and approved by Ginnie Mae as an approved issuer, (iii) approved by Fannie Mae as an approved lender, (iv) approved by Freddie Mac as an approved seller/servicer, and (v) to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act (collectively, the “Agency Approvals”). In each such case, Seller is in good standing.
Section 14. Covenants Of Seller. On and as of the date of this Agreement and each Purchase Date and on each day until this Agreement is no longer in force, Seller covenants as follows:
(a) Preservation of Existence; Compliance with Law.
(i) Seller shall preserve and maintain its legal existence;
(ii) Seller shall (A) comply with all Requirements of Law (including, without limitation, all Environmental Laws) and (B) shall not engage in any conduct or activity that could subject its assets to forfeiture or seizure, in each case, except as would not be reasonably likely to have a Material Adverse Effect;
(iii) Seller shall maintain in effect and enforce policies and procedures designed to ensure compliance by Seller, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions;
(iv) Seller shall not permit any of its Subsidiaries to fail to comply with the laws, regulations and executive orders referred to in Section 13(bb). None of Seller nor any Subsidiary of Seller, nor to the knowledge of Seller, any director, officer, agent, employee, or other person acting on behalf of Seller or any Subsidiary of Seller, will request or use the proceeds of Transaction, directly or indirectly, (A) for any payments to any Person, including any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, or otherwise take any action, directly or indirectly, that would result in a violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Person on the SDN List or a government of a Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto. Furthermore, Seller will not, directly or indirectly, use the proceeds of the any Transaction, or lend, contribute or otherwise make available such proceeds to any Subsidiary, Affiliate, joint venture partner or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person participating in the transaction of any Sanctions;
(v) Seller shall preserve and maintain all rights, privileges, licenses, franchises, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Facility Documents and shall conduct its business in accordance with applicable law, except as would not be reasonably likely to have a Material Adverse Effect.; and
(vi) Seller shall keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied.
(b) Taxes. Seller shall timely file all tax returns that are required to be filed by it and shall timely pay all Taxes, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been provided or to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.
(c) Notice of Proceedings or Adverse Change. Except to the extent otherwise prohibited by any Government Agency, Governmental Authority or Requirement of Law, Seller shall give prompt notice (or notice within the timeframe as otherwise specified below) to Buyer after a Responsible Officer of Seller has any knowledge of:
(i) the occurrence of any Default or Event of Default;
(ii) [Reserved];
(iii) [Reserved];
(iv) as soon as reasonably possible, notice of any of the following events:
(A) a material modification or termination in the insurance coverage of Seller as required to be maintained pursuant to Section 14(m) hereunder, with a copy of evidence of same attached;
(B) any material change in accounting policies or financial reporting practices of Seller;
(C) should Seller, for any reason, cease to possess all such applicable Agency Approvals as required herein;
(D) promptly upon receipt of notice or knowledge of 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; provided, however, that a breach of this Section 14(c)(iv)(D) with respect to any Purchased Mortgage Loan shall only result in Seller’s obligation to repurchase such Purchased Mortgage Loan;
(E) as soon as practicable, but, in any case, no more than two (2) Business Days, after Seller has obtained knowledge of any fact that could reasonably be the basis of any Purchased Mortgage Loan Issue with respect to a Purchased Mortgage Loan, notice identifying the related Purchased Mortgage Loan with respect to which such Purchased Mortgage Loan Issue exists and detailing the cause of such potential Purchased Mortgage Loan Issue provided, however, that a breach of this Section 14(c)(iv)(E) with respect to any Purchased Mortgage Loan shall only result in Seller’s obligation to repurchase such Purchased Mortgage Loan;
(F) [Reserved];
(G) any other event, circumstance or condition that has resulted or would reasonably be expected to result in a Material Adverse Effect;
(v) promptly, but no later than [***] after Seller receives notice of, or has knowledge of, any actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are, to the best of Seller’s knowledge, pending or threatened in writing) or other legal or arbitrable proceedings, the existence of which is not required by law or regulation to remain
confidential, affecting Seller or any of its Subsidiaries or affecting any of the Property of any of them before any federal or state court or before any Governmental Authority that (A) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, or (B) 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, which, with respect to clause (B), individually or in the aggregate, would have a Material Adverse Effect or constitute an Event of Default; and
(vi) promptly, but no later than [***] after Seller receives notice of the same, any Purchased Mortgage Loan agreed to be the subject of a Take-out Commitment and delivered to a Take-out Investor (whole loan or securitization) under a Bailee Letter, and which was rejected for purchase by such Take-out Investor; provided, that upon written request from Buyer, Seller shall provide an explanation as to why such Purchased Mortgage Loan was rejected for purchase by such Take-out Investor.
(d) Reporting. Seller shall furnish to Buyer the following:
(i) within thirty (30) days after the end of each calendar month, other than the last calendar month of each fiscal quarter, the unaudited balance sheets of Seller as at the end of such calendar month, the related unaudited consolidated statements of income for the Seller, for such month and the portion of the fiscal year through the end of such month, accompanied by the Officer’s Compliance Certificate (including all specified schedules), executed by a Responsible Officer of Seller, 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, in accordance with GAAP, consistently applied, as at the end of, and for, such month (subject to normal year-end adjustments);
(ii) within forty-five (45) days after the end of the last calendar month of each fiscal quarter, the unaudited balance sheets of Seller as at the end of such calendar month, the related unaudited consolidated statements of income for such month and the portion of the fiscal year through the end of such month, the related unaudited consolidated statements of cash flows for the Seller, for such quarter and the portion of the fiscal year through the end of such quarter, accompanied by the Officer’s Compliance Certificate (including all specified Schedules), executed by a Responsible Officer of Seller, 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, in accordance with GAAP, consistently applied, as at the end of, and for, such month (subject to normal year-end adjustments);
(iii) 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 as at the end of such fiscal year, 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, if applicable, as at the end of, and for, such fiscal year in accordance with GAAP;
(iv) within [***] after any material amendment, modification or supplement has been entered into with respect to any Servicing Agreement affecting any Purchased Mortgage Loan, a fully executed copy thereof, certified by Seller to be true, correct and complete;
(v) within [***] following written request of Buyer, a monthly servicing and remittance report of each Servicer with respect to the Purchased Mortgage Loans, in form and substance acceptable to Buyer; and
(vi) except to the extent prohibited by any Government Agency, Governmental Authority or Requirement of Law, 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 (A) corrective action required, (B) 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 (C) “report cards”, “grades”, or other classifications of the quality of Seller’s operations that in the case of any of clauses (A) through (C) would be expected to have a Material Adverse Effect on such operations.
(e) Visitation and Inspection Rights. Subject to Section 32 herein and to the extent not prohibited by a Government Agency, a Governmental Authority or Requirement of Law, Seller shall permit Buyer to inspect, and to discuss with Seller’s officers, the affairs, finances, and accounts of Seller, the Repurchase Assets, OFAC sanctions scanning policies and procedures, including information relating to the method and frequency of scanning and the results of specific scans conducted on borrowers, anti-money laundering policies and procedures, and Seller’s books and records, and to make abstracts or reproductions thereof and, to the extent not prohibited by Requirements of Law, to duplicate, reduce to hard copy or otherwise use any and all computer or electronically stored information or data, in each case, (i) during normal business hours, (ii) upon reasonable notice (provided, that upon the occurrence and continuation of an Event of Default, no notice shall be required), and (iii) at the expense of Seller to discuss with Seller’s officers, its affairs, finances, and accounts.
(f) Reimbursement of Expenses. Subject to Sections 17 and 20, on the date of execution of this Agreement, Seller shall reimburse Buyer for all expenses (including legal fees) incurred by Buyer on or prior to such date. From and after such date, Seller shall promptly reimburse Buyer for all expenses as the same are incurred by Buyer upon receipt of invoices therefor.
(g) [Reserved.]
(h) Further Assurances. Seller shall execute and deliver to Buyer all further documents, financing statements, agreements and instruments, and take all further reasonable action that may be required under applicable law, or that Buyer 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 reasonably necessary to preserve the Repurchase Assets so that they remain subject to the first priority perfected security interest hereunder.
(i) True and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of Seller or any of its Affiliates thereof or any of their officers furnished to Buyer hereunder and during Buyer’s diligence of Seller are true and complete in all material respects and will not omit to disclose any facts necessary to make the statements therein 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 GAAP, or in connection with Securities and Exchange Commission filings, if any, the appropriate Securities and Exchange Commission accounting requirements.
(j) 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 twelve (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 [***], Seller shall give Buyer 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 Buyer 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 a withdrawal liability in excess of [***]; and (iii) all funding waiver requests filed by Seller or any ERISA Affiliate thereof with the Internal Revenue Service with respect to any Plan for which the amount of waived funding deficiency is reasonably expected to be more than [***], and all communications received by Seller or any ERISA Affiliate thereof from the Internal Revenue Service with respect to any such funding waiver request.
(k) Financial Covenants. Seller shall comply with the financial covenants set forth in Section 3 of the Pricing Side Letter.
(l) Investment Company Act. Neither Seller nor any of its Subsidiaries shall be an “investment company”, or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
(m) 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 applicable Agency guidelines, and will furnish Buyer upon request full information as to all such insurance, and provide within [***] 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.
(n) 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 for the collection of all Repurchase Assets.
(o) Material Change in 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.
(p) Limitation on Dividends and Distributions. Following the occurrence and during the continuation of an Event of Default or if an Event of Default would result therefrom, Seller shall not, without the prior written consent of Buyer, make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Seller, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Seller, either directly or indirectly, whether in cash or property or in obligations of Seller or any of Seller’s consolidated Subsidiaries.
(q) Disposition of Assets; Liens. Seller shall not (i) cause any of the Repurchase Assets to be sold, pledged, assigned or transferred except in compliance with the applicable Facility Documents or (ii) 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 Liens in favor of Buyer.
(r) Limitation on Accounting Changes. Seller shall not make any material change in the accounting policies or financial reporting practices of Seller or its Subsidiaries, except to the extent such change is required by GAAP, consistently applied, which would reasonably be expected to have a Material Adverse Effect.
(s) ERISA Matters.
(i) Seller shall not permit any event or condition which is described in any of clauses (i) through (x) of 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 twelve (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 [***].
(ii) Seller shall not 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 or an entity deemed to hold “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA. Seller shall not use “plan assets” within the meaning of 29 CFR Section 2510.3-101, as modified by Section 3(42) of ERISA, to engage in this Agreement or the Transactions hereunder. The Transactions contemplated by this Agreement will not violate any state or local statute, applicable to Seller, that regulates investments of, or fiduciary obligations
with respect to governmental plans within the meaning of Section 3(32) of ERISA and that are similar to Section 406 of ERISA or Section 4975 of the Code.
(t) [Reserved];
(u) Facility Documents. Seller shall not permit the amendment or modification of, the waiver of any event of default under, or the termination of any Facility Document without Buyer’s prior written consent. Seller shall not waive (or direct the waiver of) the performance by any party to any Facility Document of any action, if the failure to perform such action would adversely affect Seller or any Purchased Mortgage Loans in any respect, or waive (or direct the waiver of) any default resulting from any action or inaction by any party thereto.
(v) Illegal Activities. Seller shall not engage in any conduct or activity that would be reasonably likely to subject its assets to forfeiture or seizure.
(w) Transactions with Affiliates. Seller shall not enter into any new 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 (a) not otherwise prohibited in this Agreement, (b) in the ordinary course of Seller’s business, and (c) upon fair and reasonable terms no less favorable to Seller, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.
(x) [Reserved].
(y) Reserve Account. The Reserve Account Threshold shall be maintained at all times and Seller shall grant to Buyer any online access Seller has to the Reserve Account.
(z) Hedging. Seller has entered into Interest Rate Protection Agreements or other arrangements, having terms with respect to protection against fluctuations in interest rates consistent with the terms of Seller’s hedging program.
(aa) [Reserved.]
(bb) [Reserved.]
(cc) [Reserved.]
(dd) Agency Approvals; Servicing. Seller shall maintain its status with Fannie Mae and Freddie Mac as an approved seller/servicer, in each case in good standing. Seller shall take all commercially reasonable actions to maintain all of its applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.
(ee) Additional Agreements. At all times during the term of this Agreement, Seller shall maintain at least one repurchase agreement, warehouse facility, guaranty or similar credit facility with an aggregate facility amount greater than or equal to the Aggregate Facility Purchase Price, with any Person covering similar assets in addition to this Agreement.
Section 15. Events Of Default. If any of the following events (each an “Event of Default”) occur, Seller and Buyer shall have the rights set forth in Section 16, as applicable:
(a) Payment Default. (i) Seller fails to make any payment of (A) Repurchase Price when due (other than Price Differential), whether by acceleration, mandatory repurchase (including following the occurrence of a Purchased Mortgage Loan Issue) or otherwise or (B) Price Differential or to cure any Margin Deficit when due, under the terms of the Facility Documents, or (ii) Seller fails to make any payment of any sum (other than Repurchase Price, Price Differential or Margin Deficit) when due under the terms of the Facility Documents within [***] of Seller’s receipt of notice; or
(b) Immediate Representation and Warranty Default. Any representation, warranty or certification made or deemed to be made by Seller contained in any of Sections 13(c) (Solvency); (f)(a) (Existence); (h) (No Breach); (i) (Action); (k) (Enforceability); (p) (Margin Regulations); (r) (Investment Company Act); (v) (True and Complete Disclosure); (w) (ERISA); (y) (No Reliance); (z) (Plan Assets); (bb) (Sanctions); or (ff) (Agency Approvals), in each case, of this Agreement shall be determined by Buyer to have been untrue or misleading in any respect as of the time made or furnished; or
(c) Additional Representation and Warranty Defaults. Any representation or warranty made or deemed made herein or in any other Facility Document (and not identified in clause (b) of Section 15) by Seller shall be determined by Buyer to have been untrue or misleading in any respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1-A and Schedule 1-B; unless (A) Seller shall have made any such representations and warranties with actual knowledge of a Responsible Officer of Seller that they were materially false or misleading at the time made or (B) any such representations and warranties have been determined in good faith by Buyer in its sole reasonable discretion to be materially false or misleading on a regular basis), and if such default shall be capable of being remedied, such failure shall continue unremedied for more than [***]; or
(d) 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 14(a)(i) and (ii) (Preservation of Existence; Compliance with Law); (i) (True and Correct Information); (k) (Financial Covenants); (o) (Material Change in Business); (p) (Limitation on Dividends and Distributions); (s)(ii) (ERISA Matters); (v) (Illegal Activities); (w) (Transactions with Affiliates); or (dd) (Agency Approvals; Servicing); in each case, of this Agreement; or
(e) Additional Covenant Defaults. The failure of Seller to observe or perform any other covenant or agreement contained in the Facility Documents (and not identified in clause (d) of this Section 15), and if such default shall be capable of being remedied, such failure to observe or perform continues unremedied for more than [***]; or
(f) Judgments. A judgment or judgments for the payment of money in excess of [***] in the aggregate is rendered against Seller, in each case by one or more courts, administrative tribunals or other bodies having jurisdiction and the same is not satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof is not procured, within [***] from the date of entry thereof; or
(g) Cross-Default. Seller is in default beyond any applicable grace period (A) under any Indebtedness in excess of [***], which default involves the failure to pay a matured obligation or permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness; or (B) in making any payment when due under, or performing any other material obligation under any Indebtedness or
any other contract, between Seller, as applicable, on the one hand, and Buyer or any of its Affiliates on the other; or
(h) Insolvency Event. An Insolvency Event occurs with respect to Seller or any of its Subsidiaries; or
(i) Enforceability. For any reason (i) Seller (or an Affiliate thereof) contests the validity, enforceability, perfection or priority of any Lien granted pursuant to the Facility Documents, (ii) any Person (other than Buyer) contests the validity, enforceability, perfection or priority of any Lien granted pursuant thereto, (iii) Seller, or any Affiliate seeks to disaffirm, terminate, limit, repudiate or reduce its obligations under any Facility Document or (iv) any Facility Document at any time fails to be in full force and effect in all material respects in accordance with its terms or shall not be enforceable in all material respects in accordance with its terms; or
(j) [Reserved.]; or
(k) [Reserved.]; or
(l) Change in Control. A Change in Control occurs without the prior written consent of Buyer; or
(m) Inability to Perform. Seller admits its inability to, or its intention not to, perform any of its obligations under the Facility Documents; or
(n) Failure to Transfer. Seller fails to transfer the Purchased Mortgage Loans to Buyer on or prior to the applicable Purchase Date (provided that Buyer has tendered the related Purchase Price); or
(o) Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under Governmental Authority takes 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 takes any action to displace the management of Seller or to curtail its authority in the conduct of the business of Seller, or takes any action in the nature of enforcement to remove or materially limit or restrict the approval of Seller as an issuer, buyer or a seller of Mortgage Loans or securities backed thereby, and such action shall not have been discontinued or stayed within [***]; or
(p) Assignment. Any assignment by Seller of this Agreement or any other Facility Document or any rights hereunder or thereunder without first obtaining the specific written consent of Buyer; or
(q) [Reserved.]; or
(r) Financial Statements. Seller’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein are qualified or limited by reference to the status of Seller as a “going concern” or a reference of similar import; or
(s) Servicer Default. A Servicer Termination Event occurs with respect to a Servicer and Seller fails to transfer the servicing of the Purchased Mortgage Loans to a successor servicer that is acceptable to Buyer within [***] of such Servicer Termination Event; or
(t) Failure to Repurchase. Seller fails to repurchase a Purchased Mortgage Loan that is no longer an Eligible Mortgage Loan within [***] of notice from Buyer.
(u) (I) Seller engages in any nonexempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code), (II) the occurrence of an Event of ERISA Termination or (III) any other event or condition occurs or exists with respect to a Plan or a Multiemployer Plan; and, such event or condition, together with all other such events or conditions, if any, would reasonably be expected to have a Material Adverse Effect
Section 16. Remedies.
(a) If an Event of Default occurs and is continuing, 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 and shall be deemed to be not continuing once so waived:
(i) At the option of Buyer, exercised by written notice to a Responsible Officer of Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Insolvency Event of Seller), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur (the date on which such option is exercised or deemed to have been exercised being referred to hereinafter as the “Accelerated Repurchase Date”).
(ii) If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of this Section,
(A) Seller’s obligations in such Transactions to repurchase all Purchased 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, (2) all Income paid after such exercise or deemed exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Price and any other amounts owed by Seller hereunder, and (3) Seller shall immediately deliver to Buyer any Purchased Mortgage Loans subject to such Transactions then in Seller’s or Servicer’s possession or control, including Purchased Mortgage Loans; and
(B) to the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction (determined as of the Accelerated Repurchase Date) 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.
(iii) Upon the occurrence and during the continuance of one or more Events of Default, Buyer shall have the right to obtain physical possession of all 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 in to the possession of Seller or any third party acting for Seller 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 Facility Documents.
(iv) Upon the occurrence and during the continuance of an Event of Default, Buyer, or Buyer through its Affiliates or designees, may (A) immediately sell, without demand or further notice of any kind, at a public or private sale at such price or prices as Buyer may deem satisfactory any or all of the Purchased Mortgage Loans and Repurchase Assets or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Mortgage Loans and Repurchase Assets, to retain such Purchased Mortgage Loans and Repurchase Assets, and give Seller credit for such Purchased Mortgage Loans in an amount equal to the market value of the related Mortgage Loans (as determined and adjusted by Buyer in its sole discretion, giving such weight to the Market Value or outstanding principal balance of such Mortgage Loan as Buyer deems appropriate) against the aggregate unpaid Repurchase Price for such Purchased Mortgage Loans and Repurchase Assets and any other amounts due and owing by Seller under the Facility Documents. The proceeds of any disposition of Purchased Mortgage Loans and Repurchase Assets effected pursuant to the foregoing shall be applied as determined by Buyer.
(v) Seller shall be liable to Buyer for (A) the amount of all reasonable and documented out-of-pocket expenses, including reasonable and documented legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default, (B) all reasonable and documented out-of-pocket costs incurred in connection with covering transactions or hedging transactions, and (C) any other reasonable and documented out-of-pocket loss, damage, cost or expense arising or resulting from the occurrence and continuation of an Event of Default. In addition, Buyer shall have the right to satisfy any Obligations with funds remaining in the Reserve Account.
(vi) Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
(b) Seller acknowledges and agrees that (A) in the absence of a generally recognized source for prices or bid or offer quotations for any Purchased Mortgage Loans and Repurchase Assets, Buyer may establish the source therefor in its sole discretion and (B) all prices, bids and offers shall be determined together with accrued Income. Seller recognizes that it may not be possible to purchase or sell all of the Purchased Mortgage Loans and Repurchase 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 Mortgage Loans and Repurchase Assets may not be liquid at such time. In view of the nature of the Purchased Mortgage Loans and Repurchase Assets, Seller agrees that liquidation of a Transaction or the Purchased Mortgage Loans and Repurchase 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. Accordingly, Buyer may elect, in its sole discretion, the time and manner of liquidating any Purchased Mortgage Loans and Repurchase Assets, and nothing contained herein shall (A) obligate Buyer to liquidate any Purchased Mortgage Loans or Repurchase Assets on the occurrence and continuation of an Event of Default or to liquidate all of the Purchased Mortgage Loans or Repurchase Assets in the same manner or on the same Business Day or (B) constitute a waiver of any right or remedy of Buyer. Buyer may exercise one or more of the remedies available hereunder immediately upon the occurrence and during the continuation of an Event of Default and at any time thereafter without notice to a Responsible Officer of Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have.
(c) Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require Buyer to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) it might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.
(d) Without limiting the rights of Buyer hereto to pursue all other legal and equitable rights available to Buyer for Seller’s failure to perform its obligations under this Agreement, Seller acknowledges and agrees 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.
(e) Buyer shall have, in addition to its rights and remedies under the Facility Documents, all of the rights and remedies provided by applicable federal, state, foreign, and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, 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 Seller. Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Mortgage Loans and Repurchase Assets against all of Seller’s Obligations to Buyer, whether or not such Obligations are then due, without prejudice to Buyer’s right to recover any deficiency.
Section 17. Indemnification and Expenses.
(a) Except as expressly set forth herein to the contrary, Seller agrees to hold Buyer, and 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 (including fees of counsel) 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 (including without limitation any such liabilities, losses, damages, judgments, costs and expenses arising from any acts or omissions of a Servicer), that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct (which gross negligence or willful misconduct is determined by a court of competent jurisdiction pursuant to a final judgment). 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 Purchased Mortgage Loans, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct (which gross negligence or willful misconduct is determined by a court of competent jurisdiction pursuant to a final judgment). In any suit, proceeding or action brought by an Indemnified Party in connection with any Purchased Mortgage Loans for any sum owing thereunder, or to enforce any provisions of any Purchased Mortgage Loans, 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 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 within thirty (30) days following a receipt of an invoice therefor from 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 Facility Document or any transaction contemplated hereby or thereby, including without limitation the fees and disbursements of its counsel. Seller’s agreements in this Section 17 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. 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. 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. This Section 17(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) Seller agrees to pay within thirty (30) days following a receipt of an invoice therefor from Buyer all of the reasonable and documented out-of-pocket costs and expenses incurred by Buyer in connection with (i) the development, preparation and execution of this Agreement, any other Facility Document or any other documents prepared in connection herewith or therewith and (ii), any amendment, supplement or modification to or the enforcement of, this Agreement, any other Facility Document or
any other documents prepared in connection herewith or therewith. Seller agrees to pay within thirty (30) days following a receipt of an invoice therefor from Buyer all of the 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 fees, disbursements and expenses of counsel to Buyer which amount may be deducted from the Purchase Price paid for the first Transaction hereunder. Subject to the limitations set forth in Sections 20 and 31 hereof, Seller agrees to pay Buyer all the reasonable and documented 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 reasonable and documented out-of-pocket costs and expenses incurred by Buyer pursuant to Sections 16(b) and 20 hereof.
(c) The obligations of Seller from time to time to pay the Repurchase Price, the Price Differential, and all other amounts due under this Agreement shall be full recourse obligations of Seller.
Section 18. Servicing.
(a) Seller, on Buyer’s behalf, shall service or contract with a Servicer to interim service the Purchased Mortgage Loans consistent with the degree of skill and care that such Servicer customarily requires with respect to similar Mortgage Loans owned or managed by such Servicer and in accordance with Accepted Servicing Practices. The Servicer shall (i) comply with all applicable Requirements of Law, and (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities under the Servicing Agreement.
(b) Seller shall cause the Servicer to hold or cause to be held all escrow funds collected by Seller with respect to any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected.
(c) Seller shall, or shall cause the Servicer and any interim servicer to, deposit all collections received by Seller or Servicer on account of the Purchased Mortgage Loans in accordance with the provisions of Section 5(a).
If any Mortgage Loan that is proposed to be sold on a Purchase Date is serviced or subserviced by a servicer other than a currently approved Servicer, or if the servicing of any Purchased Mortgage Loan is to be transferred from a currently approved Servicer to another servicer, Seller shall, prior to such Purchase Date or servicing transfer date, as applicable, (i) provide Buyer with the related Servicing Agreement pursuant to which such servicer 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 servicer 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 notice or letter agreement, executed by Buyer, Seller and such Servicer (each, a “Servicer Side Letter”), in form and substance acceptable to Buyer with respect to such Servicer. In no event shall Seller’s use of a Servicer relieve Seller of its obligations hereunder, and Seller shall remain liable under this Agreement as if Seller were servicing such Mortgage Loans directly. Seller hereby agrees and acknowledges, and shall cause any Servicer 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 relating to the Purchased Mortgage Loans, including all documents relating to the Purchased Mortgage Loans and the servicing thereof.
(d) Upon the occurrence and continuation of an Event of Default hereunder or a Servicer Termination Event, Buyer shall have the right to immediately terminate the Servicer’s right to service the Purchased Mortgage Loans under the Servicing Agreement (subject to the related servicing transfer period) 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.
(e) If Seller should discover that, for any reason whatsoever, Seller or any entity responsible by contract to Seller for managing or servicing any such Purchased Mortgage Loan has failed to perform fully Seller’s obligations under the Facility Documents 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.
(f) 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. For the avoidance of doubt, this Subsection 18(f) shall no longer apply to any Purchased Mortgage Loan that is repurchased in full by Seller in accordance with the provisions of this Agreement and therefore is no longer subject to a Transaction. Upon termination in accordance with the first sentence of this Subsection 18(f), the Servicer shall transfer servicing, including, without limitation, delivery of all servicing files in Servicer’s possession 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 date the servicing is transferred, the Servicer shall service the Purchased Mortgage Loans in accordance with the terms of this Agreement and for the benefit of the Buyer.
Section 19. Recording of Communications. Buyer and Seller 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 upon notice to the other party of such recording.
Section 20. Due Diligence. Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Mortgage Loans and Seller, including, without limitation, financial information, organization documents, business plans, purchase agreements and underwriting purchase models for each pool of Purchased Mortgage Loans, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, to review the servicing of the Purchased Mortgage Loans, or otherwise, and Seller agrees that upon reasonable prior written notice to a Responsible Officer of Seller, unless an Event of Default shall have occurred, in which case no notice is required, Buyer or its Authorized Representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Purchased Mortgage Loans (the “Due Diligence Documents”) 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 Purchased Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Purchased Mortgage Loans from Seller and enter into additional Transactions with respect to the Purchased Mortgage Loans based solely upon the information provided by Seller to Buyer in the Asset 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 a reasonable portion of the Purchased Mortgage Loans purchased in a Transaction, including, without limitation, ordering new credit reports and new appraisals on the related Mortgaged Properties with respect to the Mortgage Loans and otherwise re-generating the information used to originate such Mortgage Loan, which information may be used by Buyer to calculate Market Value. Buyer may underwrite such Purchased Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer or any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer 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 due diligence activities pursuant to this Section 20, in an amount not to exceed [***] per calendar year.
Section 21. Assignability.
(a) The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer. 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. Prior to the occurrence and continuation of an Event of Default, Buyer may from time to time assign all or a portion of its rights and obligations under this Agreement and the Facility Documents to any Person 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 at least five (5) Business Days’ notice to a Responsible Officer of Seller and with the prior written consent of Seller (such consent not to be unreasonably withheld); provided, that with respect to any assignment to an Affiliate of Buyer or any assignment by Buyer during the continuation of an Event of Default, no such notice to or consent from Seller shall be required. Upon such assignment, (a) such assignee shall be a party hereto and to each Facility 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 Facility Documents. 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 solely to the extent such prospective assignee is subject to an agreement with Buyer similar in substance to what is set forth in Section 32.
(b) Buyer, upon at least five (5) Business Days’ notice to a Responsible Officer of Seller (provided that the failure to give such notice shall not affect the validity of such sale), may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement to any Person; 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 Facility Documents except as provided in Section 8; provided that no such restrictions shall apply with respect to any sale to any Affiliate of Buyer or if an Event of Default has occurred and is continuing; and provided further that Buyer shall act as agent for all
purchasers, assignees and point of contact for Seller pursuant to agency provisions to be agreed upon by Buyer, its intended purchasers and/or assignees and Seller.
(c) Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 21, 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.
Section 22. Transfer and Maintenance of Register.
(a) Subject to acceptance and recording thereof pursuant to paragraph (b) of this Section 22, 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.
(b) Seller shall maintain a register (the “Register”) on which it shall record Buyer’s rights hereunder, and 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 or participated. The entries in the Register shall be conclusive absent manifest error, and the parties 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. Failure to make any such recordation, or any error in such recordation shall not affect Seller’s obligations in respect of such rights. If Buyer sells a participation in its rights hereunder, 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 Requirement of Law.
Section 23. Tax Treatment. Each party to this Agreement acknowledges that notwithstanding anything in this Agreement to the contrary, it is its intent for purposes of U.S. federal taxes and all relevant state and local income and franchise taxes, 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 law.
Section 24. Set-Off.
(a) In addition to any rights and remedies of Buyer hereunder and by law, Buyer shall have the right during the continuation of an Event of Default, without prior notice to a Responsible Officer of Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law to set-off and appropriate and apply against any obligation from Seller to Buyer or any Affiliate thereof 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 Buyer or any Affiliate thereof to or for the credit or the account of Seller. Buyer agrees promptly to notify Seller after any such set-off and application made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application.
(b) 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 amounts or deliver any property that Buyer would otherwise be obligated to pay, remit or deliver to Seller hereunder if an Event of Default has occurred and is continuing. For avoidance of doubt and not as a limitation, Buyer may set-off any amounts in the Reserve Account against any outstanding Obligations provided an Event of Default has occurred and is continuing, but may not set-off, transfer or withdraw any amounts from the Reserve Account unless an Event of Default has occurred and is continuing.
Section 25. 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. The obligations of Seller under Section 17 hereof shall survive the termination of this Agreement.
Section 26. 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 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. Except as otherwise provided in this Agreement and except for notices given under Sections 3 and 4 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when transmitted by facsimile or electronic mail or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 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.
Section 27. Entire Agreement; Severability; Single Agreement.
(a) This Agreement and the Facility Documents collectively constitute the entire understanding between Buyer and Seller with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Mortgage Loans. By acceptance of this Agreement, Buyer and 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.
(b) Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that
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 (iii) to promptly provide notice to the other after any such set off or application.
Section 28. 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 SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.
Section 29. SUBMISSION TO JURISDICTION; WAIVERS. BUYER AND SELLER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) 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 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;
(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) BUYER AND SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 30. 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
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 hereunder shall be deemed to be not continuing once waived by the Buyer.
Section 31. 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 shall fail to honor any payment obligation under this Agreement or any Transaction hereunder (the “Defaulting Party”), 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 32. Confidentiality.
(a) Buyer and Seller each hereby acknowledges and agrees 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 or pursuant to the terms thereof, including, but not limited to, the name of, or identifying information with respect to Buyer or Seller, any pricing terms, or other nonpublic business or financial information (including, without limitation, any sub-limits, financial covenants, financial statements and performance data), the existence of this Agreement and the Transactions with Buyer (the “Confidential Information”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to disclose to its Affiliates and its and their employees, directors, officers, advisors (including legal counsel, accountants, taxing authorities, equity holders, representatives, investors, lenders, agents or auditors), representatives and servicers, (ii) it is requested or required by governmental agencies, regulatory bodies or other legal, governmental or regulatory process, in which case the disclosing party shall provide prior written notice to the other party hereto to the extent not prohibited by any Government Agency, Governmental Authority or Applicable Law or regulation; provided, however, that Buyer and Seller shall not be required to provide each other with prior written notice of disclosure of Confidential Information in connection with routine examinations by accountants or regulatory authorities, (iii) any of the Confidential Information is in the public domain other than due to a breach of this covenant, (iv) disclosure to any approved hedge counterparty to the extent necessary to obtain any Interest Rate Protection Agreement or, (v) an Event of Default has occurred and is continuing and Buyer reasonably determines in good faith such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Mortgage Loans or otherwise to enforce or exercise Buyer’s rights hereunder. Seller and Buyer shall be responsible for any breach of the terms of this Section 32(a) by any Person that it discloses Confidential Information to pursuant to clause (i) above.
Each party hereto agrees that it shall not, without the written consent of each other party hereto, make any communication, press release, public announcement or statement in any way connected to the existence or terms of this Agreement or the other Facility Documents or the Transactions contemplated hereby or thereby, except where such communication or announcement is required by law or regulation, in which event the disclosing party will consult and cooperate with each other party hereto with respect to the wording of any such announcement. 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 or tax structure of the Transactions, any fact relevant to understanding the federal, state and local tax treatment or tax structure 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 or tax structure; provided that the “tax treatment or “tax structure” shall be limited to any facts relevant to the U.S. federal, state or local tax treatment of any Transaction contemplated hereunder and specifically does not include any information relating to the identity of Buyer, Seller or any pricing terms hereunder. The provisions set forth in this Section 32(a) shall survive the termination of this Agreement for two years.
(b) Notwithstanding anything in this Agreement to the contrary, Seller and Buyer understand that Confidential Information disclosed hereunder 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 local, state and federal laws relating to privacy and data protection. Seller and Buyer shall implement administrative, technical and physical safeguards and other security measures 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. Upon request, Seller will provide evidence reasonably satisfactory to allow Buyer to confirm that Seller has satisfied its obligations as required under this Section 32(b). Without limitation, this may include Buyer’s review of audits, summaries of test results, and other equivalent evaluations of Seller. 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 the Mortgagors. Such notice shall be provided 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 32(b) shall survive the termination of this Agreement for as long as each Party retains any “nonpublic personal information” disclosed hereunder.
Section 33. Intent.
(a) The parties intend and recognize that this Agreement and each Transaction hereunder 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, that all payments hereunder are deemed “margin payments” or “settlement payments” as defined in the Bankruptcy Code, that each Purchased Mortgage Loan constitutes either a “mortgage loan” or an “interest in a mortgage” as such terms are used in the Bankruptcy Code and that the pledge of the Repurchase Assets in Section 9 of this Agreement 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. Seller and Buyer further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).
(b) The parties further intend and recognize 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 Mortgage Loans and other Repurchase 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 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 24 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) [Reserved].
(d) 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.
(e) Each party 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 as a repurchase agreement, securities contract and master netting agreement under the Bankruptcy Code.
(f) Each party agrees that this Agreement and the Facility Documents and the Transactions entered into hereunder are part of an integrated, simultaneously-closing suite of financial contracts.
Section 34. Conflicts. In the event of any conflict between the terms of this Agreement, any other Facility Document, the documents shall control in the following order of priority the terms of this Agreement shall prevail.
Section 35. Authorizations. Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for Seller or Buyer under this Agreement.
Section 36. 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. Counterparts may be delivered electronically. 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.
(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;
(ii) Buyer has no fiduciary relationship to Seller in connection with the Facility Documents;
(iii) no joint venture exists between Buyer and Seller as a result of the Facility Documents; and
(iv) it 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 and Seller is not relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(d) Documents Mutually Drafted. Seller and Buyer agree that this Agreement and each other Facility 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.
Section 37. Recognition of the U.S. Special Resolution Regimes. In the event that Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from Buyer of this Agreement and/or the Facility Documents, and any interest and obligation in or under this Agreement and/or the Facility Documents, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement and/or the Facility Documents, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
Section 38. Effect of Benchmark Transition Event.
(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Facility Document, upon the occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, Buyer may amend this Agreement to replace the LIBOR RateTerm SOFR with a Benchmark Replacement. Any such amendment will become effective at 5:30 p.m. on the [***] after Buyer has provided such amendment to Seller without any further action or consent of Seller. No replacement of the LIBOR RateTerm SOFR with a Benchmark Replacement pursuant to this Section 38 will occur prior to the applicable Benchmark Transition Start Date.
(b) Benchmark Replacement Conforming Changes. In connection with a Benchmark Replacement, Buyer will have the right to make Benchmark Replacement Conforming Changes from time to time upon prior written notice to Seller and, notwithstanding anything to the contrary herein or in any other Repurchase Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Seller.
(c) Notices; Standards for Decisions and Determinations. Buyer will promptly notify Seller 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 Buyer pursuant to this Section 38 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 Buyer’s sole discretion and without consent from Seller.
(d) Benchmark Unavailability Period. Upon Seller’s receipt of notice of the commencement of a Benchmark Unavailability Period, Seller may revoke any request for a proposed Transaction to be entered into during any Benchmark Unavailability Period.
Section 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 Facility Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and
(h) all references herein or in any Facility Document to “good faith” means good faith as defined in Section 5-102(7) of the UCC as in effect in the State of New York.
[THIS SPACE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.
BUYER:
BANK OF MONTREAL
By:
Name:
Title:
Address for Notices:
Bank of Montreal
c/o BMO Capital Markets Corp.
3 Times Square
151 West 42nd Street
New York, New York 10036
Attn: [***]
Telephone: [***]
Email: [***]
With a copy to:
Bank of Montreal
c/o BMO Capital Markets Corp.
3 Times Square
151 West 42nd Street
New York, New York 10036
Attn: [***]
[Master Repurchase Agreement (BMO-Home Point) (2021)]
SELLER:
HOME POINT FINANCIAL CORPORATION
By:
Name:
Title:
Address for Notices:
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: [***]
E-mail: [***]
[Master Repurchase Agreement (BMO-Home Point) (2021)]
[Master Repurchase Agreement (BMO-Home Point) (2021)]
SCHEDULE 1-A
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
MORTGAGE LOANS
Seller makes the following representations and warranties to Buyer with respect to each Mortgage Loan, as of the Purchase Date for such Mortgage Loan and at all times while such Mortgage Loan is subject to a Transaction hereunder. Notwithstanding any qualifications herein as to Seller’s knowledge at the time a representation or warranty is made, Seller shall be required to repurchase any Mortgage Loan that Buyer has determined breaches a representation or warranty in this Schedule 1-A regardless of whether Seller had knowledge of such breach.
(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. No payment required under the Mortgage Loan is or has ever been subject to forbearance for any reason.
(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 date 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, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been delivered to the Custodian and the terms of which are reflected in the Asset Schedule. 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 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 Mortgage File delivered to the Custodian and the terms of which are reflected in the Asset Schedule. The related Mortgage, Mortgage Note and each other document in the Mortgage File contain the entire agreement of the parties and all of the obligations of the Seller under the Purchased Mortgage Loans.
(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. To the knowledge of Seller and its Subsidiaries, the Mortgagor in respect of the Mortgage Loan is not currently 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 as defined by the applicable Loan Program Authority, 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 applicable Loan Program Authority’s requirements, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount that would have been required as of the date of origination in accordance with the applicable Loan Program Authority’s requirements. 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 or regulation 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 dwelling which is acceptable to the applicable Loan Program Authority pursuant to the applicable Loan Program Authority’s requirements. No residence or dwelling is a mobile home or manufactured housing unit (other than a Manufactured Home) not secured by real property.. 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, and provided further, 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 Manufactured Home, such unit is acceptable to the applicable Loan Program Authority pursuant to the applicable Loan Program Authority’s requirements.
(i) Valid First Lien. The Mortgage is a valid, subsisting, enforceable and perfected first priority lien and perfected 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. 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 the lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the 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; Fraud. 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. 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. Other than with respect to escrow holdback amounts for weather-related or seasonal improvement costs, fees or expenses, 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.
(l) 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 the applicable Loan Program Authority and each such title insurance policy is issued by a title insurer acceptable to the applicable Loan Program Authority 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 (1), (2) and (3) of paragraph (i) of this Schedule 1-A, 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. 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 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 or will commence no more than [***] 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 [***] plus [***]. The Mortgage Note is payable on the [***] of each month in equal monthly installments of principal and/or 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. Interest is 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 [***] from commencement of amortization. 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 marketable 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 the applicable Loan Program Authority.
(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. No Mortgage Loan is cross-collateralized or is subject to a cross-default provision with any mortgage loan that is not a Purchased Mortgage Loan.
(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, if applicable, has been duly and properly recorded, or has been delivered for recording to the applicable recording office.
(x) Due-On-Sale. Except as permitted by the applicable Loan Program Authority, 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 the applicable Loan Program Authority. 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 that would adversely affect the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended. There have not been any total or partial condemnation proceedings with respect to the Mortgage Property and, to the
knowledge of the Seller, there is no proceeding pending for the total or partial condemnation of such Mortgaged Property.
(bb) Origination; Collection Practices; Escrow Deposits; Interest Rate Adjustments. The Mortgage Loan was originated by Seller or a Correspondent Seller. 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 or Servicer 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 if an escrow deposit has been established, it 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 the applicable Loan Program Authority 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, 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 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 either an evaluation or appraisal of the related Mortgaged Property meeting the requirements set forth by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, unless such evaluation is not required by the applicable Loan Program Authority, or applicable regulatory or licensing body. Such evaluation or appraisal must have been 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 the applicable Loan Program Authority, 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 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.
(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 the Mortgage Loan is no earlier than ninety (90) days prior to the related Purchase Date.
(nn) No Exception. The Custodian has not noted any material exceptions on an Asset 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) Committed Mortgage Loans. Each Committed Mortgage Loan is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment (taking into consideration mortgage loans which have been purchased by the respective Take-out Investor under the Take-out Commitment and mortgage loan which Seller has identified to Buyer as covered by such Take-out Commitment) and conforms to the requirements and the specifications set forth in such Take-out Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Take-out Investor and is eligible for sale to and insurance or guaranty by, respectively the applicable Take-out Investor and applicable insurer. Each Take-out 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).
(ss) Credit Score and Reporting. As of the Purchase Date, the Mortgagor’s credit score as listed on the Asset Schedule is no more than one hundred twenty (120) days old, or as otherwise permitted by the applicable Loan Program Authority. Full, complete and accurate information with respect to the Mortgagor’s credit file was furnished to Equifax, Experian and Trans Union Credit Information in accordance with the Fair Credit Reporting Act and its implementing regulations.
(tt) 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 Underwriting Guidelines.
(uu) Description. Each Purchased Mortgage Loan conforms to the description thereof as set forth on the related Asset Schedule delivered to the Custodian and Buyer.
(vv) Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to a Purchased 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.
(ww) 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 of the Transaction is entered into and as previously provided to Buyer.
(xx) Primary Mortgage Guaranty Insurance. If required by the applicable Loan Program Authority, 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 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 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.
(yy) Predatory Lending Regulations; High Cost Loans. None of the Mortgage Loans are classified as High Cost Mortgage Loans.
(zz) FHA Mortgage Insurance; VA Loan Guaranty; USDA Mortgage Loan Guaranty. With respect to each Mortgage Loan to be insured or guaranteed by the FHA, the VA or the USDA, (i) all insurance or guaranty premiums or payments payable to the applicable Loan Program Authority 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, (ii) Seller has submitted all documents required by and in accordance with the timeframes established by the applicable Loan Program Authority to insure such Mortgage Loan (regardless of whether such documents are required to be contained in the related servicing file) (iii) there has been no notice, indication of ineligibility or rejection of the Mortgage Loan and there exists no impairment to full recovery without indemnity from the related Loan Program Authority, and (iv) the related insurance contract, guaranty agreement and each similar agreement, as applicable, (x) is in full force and effect, all necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the related Loan Program Authority to the full extent thereof, without surcharge, set-off or defense, or, (y) is not yet in full force and effect, all required documentation has been successfully submitted to the appropriate agency within the time frame set forth in clause (ii) above and Seller has provided Buyer any evidence or information requested by Buyer necessary for Buyer to verify compliance with (ii) above and that the related insurance or guaranty premiums or payments have been made.
(aaa) LTV; CLTV. The LTV and CLTV, as applicable, of any Purchased Mortgage Loan at origination was in accordance with the applicable Loan Program Authority’s guidelines, or such other percentage approved by the Buyer in writing.
(bbb) 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 Asset Schedule, is representative of the Seller’s portfolio of Mortgage Loans.
(ccc) 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.
(ddd) [Reserved].
(eee) Environmental Matters. To the knowledge of Seller, the Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation. To the knowledge of Seller with respect to each of the following clauses, 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.
(fff) 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 Take-out Investor guidelines for such trusts.
(ggg) [Reserved].
(hhh) [Reserved].
(iii) 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 regulations.
(jjj) Flood Certification Contract. Seller shall have obtained a life of loan, transferable flood certification contract for each Mortgage Loan and such contract is assignable to Buyer.
(kkk) Endorsements. Each Mortgage Note has been endorsed by a duly authorized representative of Seller for its own account and not as a fiduciary, trustee, trustor or beneficiary under a trust agreement.
(lll) Accuracy of Information. All information provided to Buyer by Seller with respect to the Mortgage Loans, including but not limited to, any information contained in the Mortgage File, is accurate in all material respects.
(mmm) 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.
(nnn) Patriot Act. Seller has complied with all applicable anti money laundering laws and regulations, including, without limitation, the Patriot Act. To the knowledge of the Seller, no Mortgage Loan is subject to nullification pursuant to the Executive Order or the regulations promulgated by OFAC (the “OFAC Regulations”) or in violation of the Executive Order or the OFAC Regulations, and, to the knowledge 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.
(ooo) 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 Asset Schedule. The related Assignment of Mortgage to MERS has been duly and properly recorded. With respect to each MERS Designated Mortgage Loan, Seller has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.
(ppp) MOM Mortgage Loans. With respect to each MOM Mortgage Loan, Seller has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.
(qqq) Authorized Funds Recipient. Any related settlement or closing agent has fully disbursed all proceeds received from Buyer in accordance with the related HUD-1 form or closing disclosure, as applicable.
(rrr) Ability to Repay. Before originating the Mortgage Loan, the originator made a reasonable and good faith determination that the borrower would have a reasonable ability to repay the loan according to its terms, in accordance with the “ability to repay” standards of the federal Truth in Lending Act, 15 U.S.C. 1639c(a), and Regulation Z, 12 C.F.R. 1026.43, as may be amended from time to time.
(sss) [Reserved].
(ttt) [Reserved].
(uuu) FICO Floor. With respect to Mortgage Loans (other than those originated in connection with any “streamline refinance” FHA or VA program) which are FHA Loans, VA Loans, or USDA Mortgage Loans, the applicable Mortgagor’s FICO score at the time of origination was in accordance with the applicable Loan Program Authority’s requirements. To the extent the Purchased Mortgage Loan is a Jumbo Mortgage Loan, the FICO score of such Purchased Mortgage Loan meets or exceeds the greater of (x) [***] or (y) such other FICO score allowable pursuant to the Underwriting Guidelines in effect as of the date of origination of such Mortgage Loan; provided, however, a Purchased Mortgage Loan may have a FICO score lower than as otherwise required pursuant to this paragraph (uuu), if such Mortgage Loan is approved in writing by Buyer in its sole discretion.
(vvv) TRID Compliance. 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.
(www) 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 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 Buyer. If such closing protection letter is not addressed to Buyer, such closing protection letter shall provide that Buyer and any assignee of Buyer are protected by such letter as if it were addressed directly to them.
(xxx) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Closing Agent has been instructed in writing by Seller to hold the related Mortgage File as agent and bailee for Buyer and to promptly forward such Mortgage File in accordance with the provisions of the Custodial and Disbursement Agreement and the escrow instruction letter, if any.
(yyy) No Encumbrances; Good Title. Seller has not assigned, pledged, or otherwise conveyed or encumbered any Mortgage Loan to any Person other than Buyer. Immediately prior to the sale of a Mortgage Loan to Buyer, 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 Buyer hereunder.
SCHEDULE 1-B
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
POOLED MORTGAGE LOANS
Seller makes the following representations and warranties to Buyer, to the best of Seller’s knowledge, with respect to each Pooled Mortgage Loan, as of the Purchase Date for such Pooled Mortgage Loan and at all times while such Pooled Mortgage Loan is subject to a Transaction hereunder.
(a) Agency Approvals. To the extent required by applicable law or necessary to issue and/or service, as applicable, an Agency Security, the Seller and Servicer possess all Agency Approvals and is in good standing with each Agency. No event has occurred, and neither Seller nor Servicer has any reason whatsoever to believe or suspect an event may occur, prior to the issuance of the Agency Security (including a change in insurance coverage), which would either make Seller or Servicer, as applicable, unable to comply with the eligibility requirements for maintaining all such Agency Approvals.
(b) Agency Eligibility. Each Pooled Mortgage Loan is an Agency Eligible Mortgage Loan.
(c) [Reserved].
(d) Aggregate Principal Balance. The Cut-off Date Principal Balance respecting each Pooled Mortgage Loan shall be at least equal to the original unpaid principal balance of the Agency Security for the Pooled Mortgage Loans designated to be issued.
(e) Committed Mortgage Loans. The Agency Security to be issued on account of the Pooled Mortgage Loans is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment. Each Take-out 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).
(f) Certification. With respect to Pooled Mortgage Loans being placed in an Agency Security, the Custodian has certified such Pooled Mortgage Loans to the applicable Agency for the purpose of being swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of the applicable Agency guidelines.
(g) Sole Subscriber. As to the Agency Security being issued with respect to Pooled Mortgage Loans, Buyer or the agent under the Joint Securities Account Control Agreement has been listed as the sole subscriber thereto.
(h) No Securities Issuance Failure. With respect to each Pooled Mortgage Loan being placed in an Agency Security, no Securities Issuance Failure shall have occurred.
(i) Agency Securities. With respect to any Pooled Mortgage Loans, Seller has only designated Buyer or the agent under the Joint Securities Account Control Agreement as the party authorized to receive the related Agency Security and shall designate Buyer or the agent under the Joint Securities Account Control Agreement accordingly on the applicable Form HUD 11705 (Schedule of Subscribers).
SCHEDULE 2
AUTHORIZED REPRESENTATIVES
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: [***]
E-mail: [***]
SELLER
See Authorized Representatives of Seller attached.
Schedule 2-1
[Authorized Representatives (BMO-Home Point) (2021)]
BUYER NOTICES
Bank of Montreal
c/o BMO Capital Markets Corp.
3 Times Square
151 West 42nd Street
New York, New York 10036
Attn: [***]
Telephone: [***]
Email: [***]
With a copy to:
Bank of Montreal
c/o BMO Capital Markets Corp.
3 Times Square
151 West 42nd Street
New York, New York 10036
Attn: [***]
BUYER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below, including any other authorized officers, are authorized, acting singly, to act for Buyer under this Agreement:
Schedule 2-2
[Authorized Representatives (BMO-Home Point) (2021)]
SCHEDULE 3
INDEBTEDNESS OF SELLER
| | | | | | | | |
| Lender | Type of Facility | Facility Amount |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
EXHIBIT A
[RESERVED]
EXHIBIT B
[RESERVED]
EXHIBIT C
EVIDENCE OF BUYER LISTED AS LOSS PAYEE
OF SELLER’S FIDELITY INSURANCE POLICY, ERRORS AND OMISSIONS INSURANCE POLICY, AND PROFESSIONAL LIABILITY INSURANCE POLICY
(Attached)
EXHIBIT D
FORM OF SECTION 8 CERTIFICATE
Reference is hereby made to the Master Repurchase Agreement and Securities Contract dated as of January 8, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), between Home Point Financial Corporation (the “Seller”) and Bank of Montreal (the “Buyer”). Pursuant to the provisions of Section 8 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 federal income tax purposes (in which case a copy of this Section 8 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 Facility Documents are not effectively connected with its conduct of a trade or business in the United States.
[NAME OF UNDERSIGNED]
By:
Title:
EXHIBIT E
ASSET SCHEDULE FIELDS
[***]
EXHIBIT F
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Home Point Financial Corporation (“Seller”) hereby irrevocably constitutes and appoints Bank of Montreal (“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 and Securities Contract (as amended, restated or modified) dated as of January 8, 2021 (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 send “goodbye” letters on behalf of Seller and Servicer; (iii) 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; (iv) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (v) 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; (vi) to defend any suit, action or proceeding brought against Seller with respect to any Assets; (vii) to settle, compromise or adjust any suit, action or proceeding described in clause (vi) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; 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 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 this ___ day of __________, 2021.
HOME POINT FINANCIAL CORPORATION
(Seller)
By:
Name:
Title:
Acknowledgment of Execution by Seller
(Principal):
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of _________, 2021, 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
EXHIBIT G
FORM OF 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 (“Certificate”) is delivered to you in connection with Section 14(d) of the Master Repurchase Agreement and Securities Contract, dated as of January 8, 2021 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), by and between Seller and Bank of Montreal (“Buyer”). Capitalized terms shall have the meaning set forth in 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 and, without limiting the generality of the foregoing, I certify that:
(a) Material Adverse Effect. Seller has promptly given to Buyer notice of any event, circumstance or condition that has resulted or would reasonably be expected to result in a Material Adverse Effect.
(b) Financial Covenants. Seller has complied with all the financial covenants set forth in Section 3 of the Pricing Side Letter. A detailed summary of the calculation of Adjusted Tangible Net Worth, liquidity, Indebtedness to Adjusted Tangible Net Worth ratio, and maintenance of profitability is provided in Schedule 1 hereto.
(c) Insurance. Seller has maintained, for Seller and its Subsidiaries, with responsible companies, at its own expense, insurance policies in accordance with its obligations under Section 14(m) the Agreement.
(d) Financial Statements. The financial statements and schedules attached hereto fairly present in all material respects the financial condition and results of operations of Seller, in accordance with GAAP, consistently applied, as of the date(s) thereof.
(e) 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.
(f) Compliance. Seller has observed, performed or satisfied in all material respects all of its covenants, other agreements and conditions contained in the Agreement and the other Facility Documents 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.]
(g) Regulatory Action. Seller has promptly provided Buyer with written notice of any actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are, to the best of Seller’s knowledge, pending or threatened in writing) or other legal or arbitrable proceedings, the existence of which is not required by law or regulation to remain confidential, affecting Seller or any of its Subsidiaries or affecting any of the Property of any of them before any federal or state court or before any Governmental Authority that (A) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, or (B) 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, which, with respect to clause (B), individually or in the aggregate, if not cured and if adversely determined, would have a Material Adverse Effect or constitute an Event of Default.
(h) No Default. No Default or Event of Default has occurred and is continuing. [If any Default or Event of Default has occurred and is continuing, Seller shall describe the same in reasonable detail and describe the action Seller has taken or proposes to take with respect thereto, and if such Default or Event of Default has been expressly waived by Buyer in writing, Seller shall describe the Default or Event of Default and provide the date of the related waiver.]
(i) Warehouse Lines. All warehouse lines of Seller (other than the warehouse line evidenced by the Agreement) of Seller existing on the date hereof are listed on Schedule 2 hereto, including related lender, facility size, total line amount, outstanding amount, and maturity or termination date.
(j) Distributions. Except as permitted by Buyer in writing, Seller has not made any distributions prohibited by the Agreement.
(k) Originations. Attached hereto as Schedule 3 is a true and correct summary of all Mortgage Loans originated by Seller for the calendar month ending [DATE] and for the year to date ending [DATE], stratified by loan category, loan purpose, and production channel.
(l) Repurchases and Early Payment Default Requests. Attached hereto as Schedule 4 is a true and correct summary of repurchases due to fraud, early payment defaults, or investor guidelines issues summarized on the basis of (i) pending repurchase demands and (ii) satisfied repurchase demands.
(m) MSR Valuation. A detailed summary of the market value analysis for Seller’s valuation of its mortgage servicing rights as determined by a Third Party Evaluator as of the calendar month ending [DATE] is provided in Schedule 5 hereto.
(n) DE Compare Ratio. Seller’s most recent DE Compare Ratio is listed on Schedule 6 hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, I have set my hand this _____ day of ________, ________.
By:
Name:
Title:
Schedule 1 [to Exhibit G]
Calculation of Financial Covenants
[ATTACHED]
Schedule 2 [to Exhibit G]
Warehouse Lines of Seller
| | | | | | | | | | | | | | |
| Lender | Facility Size | Total Line Amount | Outstanding Amount | Maturity/Termination Date |
| | | | |
| | | | |
| | | | |
| | | | |
Schedule 3 [to Exhibit G]
Originations
[ATTACHED]
Schedule 4 [to Exhibit G]
| | | | | | | | | | | |
| HPFC - EOM October 2020 | | | |
| | | |
| Repurchases | YTD UPB | YTD Count |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| [***] | [***] | [***] |
| | | |
| Indemnifications | Total # of Loans | Indemnifications ($) | |
| [***] | [***] | [***] | |
Schedule 5 [to Exhibit G]
MSR Valuation
[ATTACHED]
Schedule 6 [to Exhibit G]
DE Compare Ratio
[Seller to provide]
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 EIGHT
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 EIGHT (this “Amendment”) is made this 4th day of March, 2022, among HOME POINT FINANCIAL CORPORATION, a New Jersey corporation, as seller (“Seller”), 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, by that certain Amendment Number Two to the Master Repurchase Agreement, dated as of November 18, 2020, by that certain Amendment Number Three to the Master Repurchase Agreement, dated as of December 23, 2020 and effective as of January 5, 2021, by that certain Amendment Number Four to the Master Repurchase Agreement, dated as of February 11, 2021, by that certain Amendment Number Five to the Master Repurchase Agreement, dated as of March 10, 2021, by that certain Amendment Number Six to the Master Repurchase Agreement, dated as of June 29, 2021, and by that certain Amendment Number Seven to the Master Repurchase Agreement, dated as of December 23, 2021 (as further 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. Effective as of the Amendment Effective Date, the Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto.
Section 2. 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]
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/ Maria Fregosi |
| | |
| Name: | Maria Fregosi |
| Title: | Chief Investment Officer |
| | | | | | | | |
| MORGAN STANLEY BANK, N.A., as Buyer |
| | |
| | |
| | |
| By: | /s/ Darius Houseal |
| | |
| Name: | Darius Houseal |
| Title: | Authorized Signatory |
Morgan Stanley Bank, N.A.
1585 Broadway, 24th Floor
New York, New York 10036
Attention: [***]
Telephone No.: [***]
Fax: [***]
Email: [***]
With a copy to:
One Utah Center
201 South Main Street
Salt Lake City, Utah 84111
With a copy to:
Morgan Stanley Bank, N.A.
1 New York Plaza, 41st Floor
New York, New York 10004
Attention: [***]
Telephone: [***]
Email: [***]
| | | | | | | | |
| MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, as Agent |
| | |
| | |
| | |
| By: | /s/ Michael A. Calandra, Jr. |
| | |
| Name: | Michael A. Calandra, Jr. |
| Title: | Authorized Signatory |
Morgan Stanley Mortgage Capital Holdings LLC
1585 Broadway, 24th Floor
New York, New York 10036
Attention: [***]
Telephone No.: [***]
Fax: [***]
Email: [***]
EXHIBIT A
[see attached]
CONFORMED COPY through:
Amendment No. 1, dated 8/14/2020
Amendment No. 2, dated 11/18/2020
Amendment No. 3, dated 12/23/2020 and effective as of 1/5/2021
Amendment No. 4, dated 2/11/2021
Amendment No. 5, dated 3/10/2021
Amendment No. 6, dated 6/29/2021
Amendment No. 7, dated 12/23/2021
Amendment No. 8, dated 3/4/2022
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 63
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 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.
“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of a Calculation Period pursuant to this Repurchase Agreement as of such date.
“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time.
“Benchmark” shall mean, initially, Term SOFR; provided that, if a Benchmark Transition Event and the Benchmark Replacement Date with respect thereto have occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.06(a).
“Benchmark Floor” shall have the meaning set forth in the Pricing Side Letter.
“Benchmark 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 Benchmark Replacement Date:
(1) the sum of: (a) either of (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 a benchmark rate as a replacement for the then-current Benchmark for the applicable repurchase facility market and (b) the applicable Benchmark Replacement Adjustment;
(2) 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 Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment; or
(3) 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 Benchmark for the applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest as a replacement for the then-current Benchmark for U.S. dollar denominated secured financings or securitizations relating to the relevant asset class, as applicable at such time and (b) the Benchmark Replacement Adjustment.
If at any time the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) of this definition would be less than the Benchmark Floor, the Benchmark Replacement will be deemed to be the Benchmark Floor for the purposes of this Repurchase Agreement.
“Benchmark 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 Benchmark 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 Benchmark 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 Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated secured financing or securitization transactions relating to the relevant asset class, as applicable at such time.
“Benchmark Replacement Conforming Changes” shall mean, with respect to either the use or administration of Term SOFR or any Benchmark 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 Price Differential, timing of transaction 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 rate 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 rate 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).
“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to the then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark 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 Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); 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.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in
respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“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 seven (7) 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 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 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.
“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.
“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.
“Corresponding Tenor” shall mean, with respect to any Available Tenor, 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.
“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.
“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 for the Buyer, then the Buyer (or the Agent on behalf of the Buyer) may establish another convention in its reasonable discretion.
“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.
“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(e) 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.
“Eighth Amendment Effective Date” shall mean March 4, 2022.
“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.
“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.
“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.
“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.
“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 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.
“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.
“Reference Time” shall mean, with respect to any setting of the then-current Benchmark, (1) if such Benchmark is Term SOFR, the time set forth in the definition of Term SOFR, and (2) if such Benchmark is not Term SOFR, the time determined by the Buyer (or the Agent on behalf of the Buyer) in accordance with the Benchmark Replacement Conforming Changes.
“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 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.
“Remittance Amount” shall have the meaning provided in Section 2.05(d) hereof.
“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, 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 such benchmark (or a successor administrator) on the Federal Reserve Bank of New York’s website.
“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 D 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 F hereto.
“Tangible Net Worth” shall mean, as of a particular date,
(f) all amounts which would be included under equity on a balance sheet of the Seller at such date, determined in accordance with GAAP, less
(g) (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, with respect to any Transaction for any day, the Term SOFR Reference Rate for a tenor of one month, as such rate is published by the Term SOFR Administrator for such day at 6:00 a.m. (New York City time); provided, however, that if as of 5:00 p.m. (New York City time) the Term SOFR Reference Rate for the
foregoing tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator.
“Term SOFR Adjustment” shall mean a percentage equal to [***].
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Agent in its reasonable discretion).
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“Termination Date” shall mean the earliest of (i) March 43, 20222023, or (ii) such earlier date on which this Repurchase Agreement shall terminate in accordance with the provisions hereof or by operation of law.
“Third Amendment Effective Date” shall mean January 5, 2021.
“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 in a form acceptable to the Buyer, including through the Buyer’s FTP site.
“Type” shall mean each type of Mortgage Loan identified in the definition of Applicable Pricing Spread.
“Unadjusted Benchmark Replacement” shall mean the applicable Benchmark Replacement excluding the Benchmark Replacement Adjustment with respect thereto.
“Uncommitted Amount” shall have the meaning assigned thereto in the Pricing Side Letter.
“Underwriting Guidelines” shall mean the underwriting guidelines attached as Exhibit B 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. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“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) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Repurchase Document, if (A) a Benchmark Transition Event and (B) a Benchmark Replacement Date with respect thereto have occurred prior to the Reference Time in connection with any setting of the then-current Benchmark, then such Benchmark Replacement will replace the then-current Benchmark for all purposes under this Repurchase Agreement and under any other Repurchase Document in respect of such Benchmark setting and subsequent Benchmark 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.
(b) Benchmark Replacement Conforming Changes. In connection with the implementation of or administration of Term SOFR or a Benchmark Replacement, the Buyer (or the Agent on behalf of the Buyer) will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Repurchase Document, any amendments implementing such Benchmark 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) a Benchmark Transition Event and (B) the Benchmark Replacement Date with respect thereto, (ii) the implementation of any Benchmark Replacement, and (iii) the effectiveness of any Benchmark 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.
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 [***] 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);
(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. Notwithstanding anything to the contrary in this Section 3.03, any portion of the Commitment Fee that was paid prior to the ThirdEighth Amendment Effective Date, but not yet recognized as of the ThirdEighth 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 ThirdEighth 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 ThirdEighth Amendment Effective 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. Either (i) No Margin Deficiency in excess of the Margin Threshold shall exist or (ii) if a Margin Deficiency in excess of the Margin Threshold shall exist on such Business Day, (x) the Buyer (or the Agent on behalf of the Buyer) has
provided the Seller with written consent (which may be via electronic transmission) to enter into Transactions on such Business Day notwithstanding the existence of such Margin Deficiency in excess of the Margin Threshold, and (y) the Buyer (or the Agent on behalf of the Buyer) has not revoked the consent identified in clause (x) above;
(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.
(q) Compare Ratio. The “compare ratio” assigned to the Seller by FHA under its “Neighborhood Watch” program is less than or equal to [***].
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(e) 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 H 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 tenth (10th) calendar 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 [***].
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 6.25 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 7.10 through 7.16, 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 five (5) Business Days 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(i) or (j), 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(i) or (j), 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: [***], Facsimile No.: [***], Telephone No.: [***].
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.
13.10 Return of Certain Payments.
(a) Buyer hereby acknowledges and agrees that if the Agent notifies Buyer that the Agent has determined in its sole discretion that any funds (or any portion thereof) received by Buyer or any of its Affiliates (any of the foregoing, a “Recipient”) from the Agent (or any of its Affiliates) were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Recipient (whether or not known to such Recipient) (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a “Payment”) and demands the return of such Payment, such Recipient shall promptly, but in no event later than one (1) Business Day thereafter, return to the Agent the amount of any such Payment as to which such a demand was made. A notice of the Agent to any Recipient under this Section 13.10 shall be conclusive, absent manifest error.
(b) Without limitation of clause (a) above, each Recipient further acknowledges and agrees that if such Recipient receives a Payment from the Agent (or any of its Affiliates) (x) that is in an amount, or on a date different from the amount and/or date specified in a notice of payment sent by the Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”), (y) that was not preceded or accompanied by a Payment Notice, or (z) that such Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), in each case, it understands and agrees at the time of receipt of such Payment that an error has been made (and that it is deemed to have knowledge of such error) with respect to such Payment. Each Recipient agrees that, in each such case, it shall promptly notify the Agent of such occurrence and, upon demand from the Agent, it shall promptly, but in no event later than one (1) Business Day thereafter, return to the Agent the amount of any such Payment (or portion thereof) as to which such a demand was made.
(c) Any Payment required to be returned by a Recipient under this Section 13.10 shall be made in same day funds in the currency so received, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Recipient to the date such amount is repaid to the Agent at the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation from time to time in effect. Each Recipient hereby agrees that it shall not assert and, to the fullest extent permitted by applicable law, permitted by applicable law, hereby waives, any right to retain such Payment, and any claim, counterclaim, defense or right of set-off or recoupment or similar right to any demand by the Agent for the return of any Payment received, including without limitation any defense based on “discharge for value” or any similar doctrine.
(d) The Seller hereby agrees that (x) in the event any Payment (or portion thereof) is not recovered from Buyer that has received such Payment (or portion thereof) for any reason, the Agent shall be subrogated to all the rights of Buyer with respect to such amount and (y) the receipt by any Recipient of a Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Repurchase Obligations owed to Buyer by Seller.
(e) Each party’s obligations under this Section 13.10 shall survive the resignation or replacement of the Agent and the repayment, satisfaction or discharge of all Repurchase Obligations (or any portion thereof) under any Repurchase Document.
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. For the avoidance of doubt, neither (x) the failure of the Buyer (or the Agent on behalf of the Buyer), on any one or more occasions, to exercise its rights under this Repurchase Agreement with respect to a Margin Deficiency nor (y) the election of the Buyer (or the Agent on behalf of the Buyer), on any one or more occasions, to enter into Transactions notwithstanding the existence of a Margin Deficiency in excess of the Margin Threshold in accordance with Section 5.02(c)(ii) of this Repurchase Agreement, shall change or alter the terms and conditions to which this Repurchase Agreement is subject or limit the right of Buyer (or the Agent on behalf of the Buyer) to exercise its rights under this Repurchase Agreement with respect to such Margin Deficiency at a later date.
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: [***] 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 (x) any action taken in connection with this Repurchase Agreement, including, but not limited to, the payment of principal, interest and fees, and (y) 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 E, 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 via other electronic format acceptable to Buyer, including 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 C 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:
Title:
Address for Notices:
2211 Old Earhart Road, Suite 250
Ann Arbor, MI 48105
Attention: [***]
Telephone: [***]
E-mail: [***]
With a copy to:
Legal
E-mail: [***]
BUYER
MORGAN STANLEY BANK, N.A.
By:
Title:
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:
Title:
Address for Notices:
1585 Broadway
New York, New York 10036
Attention: SPG Mortgage Finance
Facsimile No.: [***]
Telephone No.: [***]
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 Financial 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 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 [***] 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
New Jersey
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:
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: