FALSE000183163100018316312024-09-252024-09-25
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 (or date of earliest event reported): September 25, 2024
_____________________
loanDepot, Inc.
(Exact Name of Registrant as Specified in its Charter)
_____________________
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| Delaware | | 001-40003 | | 85-3948939 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
6561 Irvine Center Drive
Irvine, California 92618
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (888) 337-6888
_____________________
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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| ☐ | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | | 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(s) | | Name of each exchange on which registered |
| Class A Common Stock, $0.001 Par Value | | LDI | | New York Stock Exchange |
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 ☐
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 1.01 Entry into a Material Definitive Agreement.
Mello Warehouse Securitization Trust 2024-1
On September 27, 2024, Mello Warehouse Securitization Trust 2024-1 (the “Trust”) and loanDepot.com, LLC (“loanDepot"), as servicer, both subsidiaries of loanDepot, Inc. (the “Company”), entered into an Indenture with U.S. Bank Trust Company, National Association, as indenture trustee and note calculation agent, and U.S. Bank National Association, as standby servicer and initial securities intermediary (the “Indenture”). Pursuant to the Indenture, the Trust issued $300 million of notes (the “MWST Notes”). The MWST Notes are backed by a revolving warehouse line of credit, secured by newly originated, first-lien, fixed rate or adjustable rate, residential mortgage loans which are originated in accordance with the criteria of Fannie Mae or Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans and other eligibility criteria set forth in the Master Repurchase Agreement, dated as of September 27, 2024 between loanDepot, as seller and the Trust, as buyer (the “MRA”). loanDepot’s obligations under the MRA are guaranteed by LD Holdings Group, LLC, a subsidiary of the Company, under a separate guaranty in favor of the Trust, dated as of September 27, 2024 (the “Guaranty”). Each class of MWST Notes bears interest at 30-day Term SOFR plus the applicable margin as defined in the Indenture. The MWST Notes will terminate on the earlier of (i) the two-year anniversary of the initial purchase date, (ii) upon loanDepot exercising its right to optional prepayment in full or (iii) upon an event of default which results in the acceleration of the obligations under the Indenture.
The foregoing descriptions of the Indenture, MRA, and Guaranty do not purport to be complete and are qualified in their entirety by reference to the full text of the Indenture, a copy of which is attached hereto as Exhibit 10.1, the full text of the MRA, a copy of which is attached hereto as Exhibit 10.2, and the full text of the Guaranty, a copy of which is attached hereto as Exhibit 10.3, and each is incorporated herein by reference.
Third Amendment to First Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, N.A
On September 27, 2024, loanDepot entered into the Third Amendment (the “Third Amendment”) to the First Amended and Restated Master Repurchase Agreement, dated as of September 30, 2022, with JPMorgan Chase Bank, N.A., as buyer (“JPM”), pursuant to which the loanDepot may sell to, and later repurchase from JPM certain mortgage loans. The purpose of the Third Amendment is to extend the termination date until December 26, 2024.
The foregoing description of the Third Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Third Amendment, a copy of which is attached hereto as Exhibit 10.4 and is incorporated herein by reference.
Amendment No. 6 to Series 2020-VFI Indenture Supplement with JPMorgan Chase Bank, N.A
On September 27, 2024, loanDepot, as servicer and administrator, and loanDepot Agency Advance Receivables Trust, a wholly owned subsidiary of the loanDepot (the “Advance Receivables Trust”), as issuer, entered into Amendment No. 6 to the Series 2020-VF1 Indenture Supplement (the “Indenture Supplement Amendment”), with Citibank, N.A., as indenture trustee, calculation agent, paying agent, custodian and securities intermediary, and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which the Advance Receivables Trust issued the 2020-VF1 Variable Funding Notes for the financing of servicing advance receivables with respect to residential mortgage loans serviced by loanDepot on behalf of Fannie Mae and Freddie Mac. The purpose of the Indenture Supplement Amendment is to extend the maturity date to September 26, 2025.
The foregoing description of the Indenture Supplement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Indenture Supplement Amendment, a copy of which is attached hereto as Exhibit 10.5 and is incorporated herein by reference.
Amendment No. 3 to Amended and Restated Mortgage Loan Participation Sale Agreement with JP Morgan Chase Bank, National Association
On September 27, 2024, loanDepot, as seller, entered into Amendment No. 3 (“Amendment No. 3”) to the Amended and Restated Mortgage Loan Participation Sale Agreement, dated as of November 10, 2022, with JPMorgan Chase Bank, National Association, as purchaser (“Purchaser”), pursuant to which loanDepot may sell to Purchaser participation interests in certain designated pools of fully amortizing first lien residential mortgage loans eligible to back securities and, at a later date, cause such mortgage loans to back a security issued by loanDepot, which will be delivered to Purchaser. The primary purposes of Amendment No. 3 are to extend the termination date until September 26, 2025 and to make certain administrative changes.
The foregoing description of Amendment No.3 does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No.3, a copy of which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
Termination of Mello Warehouse Securitization Trust 2021-3
On September 25, 2024, in connection with the anticipated consummation of the Mello Warehouse Securitization Trust 2024-1 transaction, loanDepot exercised its right to prepay in full its 2021-3 Securitization Facility (as defined below) and terminated (a) its Master Repurchase Agreement, dated as of October 21, 2021 (the “2021-3 MRA”), between Mello Warehouse Securitization Trust 2021-3 (“MWST 2021-3”), as buyer, and loanDepot, as seller; (b) its Indenture, dated as of October 21, 2021 (the “2021-3 Indenture”), between MWST 2021-3, as issuer, loanDepot, as servicer, and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as indenture trustee and note calculation agent, and U.S. Bank National Association, as standby servicer and initial securities intermediary; and (c) certain ancillary agreements (together with the 2021-3 Indenture and the 2021-3 MRA, the “2021-3 Securitization Facility”). Pursuant to the 2021-3 Indenture, MWST 2021-3 initially issued $500 million of notes (the “2021-3 MWST Notes”). The 2021-3 MWST Notes were backed by a revolving warehouse line of credit, secured by newly originated, first-lien, fixed rate or adjustable rate, residential mortgage loans which are originated in accordance with the criteria of Fannie Mae or Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans and other eligibility criteria set forth in the 2021-3 MRA.
No borrowings are currently outstanding under the 2021-3 Securitization Facility and loanDepot did not incur any termination penalties as a result of the termination of the 2021-3 Securitization Facility.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
All information set forth in Item 1.01 of this Form 8-K is incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit No. | Description |
| 10.1# | |
| 10.2# | |
| 10.3 | |
| 10.4 | |
| 10.5# | Amendment No. 6 to Series 2020-VF1 Indenture Supplement, dated September 27, 2024, by and among loanDepot Agency Advance Receivables Trust, as issuer, Citibank, N.A. as indenture trustee, calculation agent, paying agent, custodian and securities intermediary, loanDepot.com, LLC as servicer and administrator, JPMorgan Chase Bank, N.A., as administrative agent, and consented to by JPMorgan Chase Bank, N.A. as noteholder of the Series 2020-VF1 Variable Funding Notes. |
| 10.6# | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
# Confidential information has been omitted because it is both (i) not material and (ii) is the type of information that the Company treats as private or confidential pursuant to Item 601(b)(10) of Regulation S-K.
SIGNATURE
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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loanDepot, Inc. |
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By: | /s/ David Hayes | |
Name: David Hayes |
Title: Chief Financial Officer |
Date: September 30, 2024
Execution - Exhibit 10.1
Certain confidential information contained in this document, marked by “[***]”, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
MELLO WAREHOUSE SECURITIZATION TRUST 2024-1,
as Issuer
LOANDEPOT.COM, LLC,
as Servicer
U.S. BANK NATIONAL ASSOCIATION,
as Standby Servicer and Securities Intermediary
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Indenture Trustee and Note Calculation Agent
_____________________________
INDENTURE
Dated as of September 27, 2024
TABLE OF CONTENTS
Schedule I Perfection Representations, Warranties and Covenants
EXHIBIT A-1 Form of Rule 144a Global Note
EXHIBIT A-2 Form of Rule 144a Definitive Note
EXHIBIT B-1 Form of Monthly Payment Date Statement (Pre-Default Period)
EXHIBIT B-2 Form of Monthly Payment Date Statement (Termed out)
EXHIBIT C Form of Investor Certification
EXHIBIT D-1 Form of Monthly Servicer Report (Prior to the occurrence and continuance of an Event of Default under the Master Repurchase Agreement)
EXHIBIT D-2 Form of Monthly Servicer Report (Upon the occurrence and continuance of an Event of Default under the Master Repurchase Agreement)
Certain confidential information contained in this document, marked by “[***]”, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
This INDENTURE, dated as of September 27, 2024 (this “Indenture”), is entered into among MELLO WAREHOUSE SECURITIZATION TRUST 2024-1, a statutory trust established under the laws of Delaware, as issuer (the “Issuer”), LOANDEPOT.COM, LLC, as servicer (the “Servicer”), U.S. BANK NATIONAL ASSOCIATION, a national banking association, as Standby Servicer and Securities Intermediary, and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as indenture trustee (in such capacity, the “Indenture Trustee”) and Note Calculation Agent.
PRELIMINARY STATEMENT
WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide for the issuance of the Notes, issuable as provided in this Indenture;
WHEREAS, all things necessary have been done to make this Indenture a legal, valid and binding agreement of the Issuer, in accordance with its terms; and
WHEREAS, all things necessary have been done to make the Notes, when executed by the Issuer and authenticated and delivered by the Indenture Trustee hereunder and duly issued by the Issuer, the legal, valid and binding obligations of the Issuer as hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises and the receipt of the Notes by the Noteholders, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Noteholders, as follows:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the date hereof, for the benefit of the Indenture Trustee and the Noteholders, all of the Issuer’s right, title and interest in and to the assets of the Issuer (individually, the “Collateral” and, collectively, the “Trust Estate”), including, without limitation, the Issuer’s interest in the Purchased Assets, all Instruments evidencing Purchased Assets and the Servicing Records, all of the Issuer’s rights under the Master Repurchase Agreement and all related servicing rights, the Program Agreements (to the extent the Program Agreements and the Issuer’s rights thereunder relate to the Purchased Assets), any related Takeout Commitments, any Property relating to the Purchased Assets, all insurance policies and insurance proceeds relating to any Purchased Asset or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any), Income, the Accounts, accounts (including any interest of the Issuer in escrow accounts) and any other contract rights, instruments, payments, rights to payment (including payments of interest or finance charges), general intangibles and other assets relating to the Purchased Assets or any interest in the Purchased Assets, and any proceeds (including any securitization proceeds) and payments or distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Trust Receipt, Participation Certificate or other Instrument, in all instances, whether now owned or hereafter acquired, now existing or hereafter created.
The foregoing Grants are made to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.
In connection with the foregoing, the Issuer hereby transfers, assigns, conveys and delegates to the Indenture Trustee for the benefit of the Noteholders, without recourse and without representation or warranty from the Indenture Trustee (except as provided in the Program Agreements) all right, claim, title and interest of the Issuer in, to and under the Master Repurchase Agreement, the related transactions and confirmations evidencing the same and the related Purchased Assets. The Indenture Trustee hereby accepts the foregoing transfer and assignment in accordance with the terms hereof.
GENERAL COVENANT
IT IS HEREBY COVENANTED AND DECLARED that each Note is to be authenticated and delivered by the Indenture Trustee on the Closing Date, that the Collateral is to be held by or on behalf of the Indenture Trustee and that moneys in or from the Trust Estate are to be applied by the Indenture Trustee for the benefit of the Noteholders, subject to the further covenants, conditions and trusts hereinafter set forth, and the Issuer does hereby represent and warrant, and covenant and agree, to and with the Indenture Trustee, for the equal and proportionate benefit and security of each Noteholder, as follows:
Certain confidential information contained in this document, marked by “[***]”, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section I.1.Definitions.
Whenever used in this Indenture, the following words and phrases, unless the context otherwise requires, shall have the meanings set forth below or, if not specified in this Indenture, then in the Master Repurchase Agreement.
“Accounts” means each of the Payment Account, the Buyer’s Account and the Reserve Account.
“Administration Agreement” means the Administration Agreement, dated as of the date hereof, between the Issuer and the Administrator, as the same may be amended, supplemented or otherwise modified from time to time.
“Administrator” means loanDepot.com, LLC or its permitted successors and assigns under the Administration Agreement.
“Administrator Fee” means the annual fee payable to the Administrator for its services pursuant to the Administration Agreement, which shall be $[***] payable in October of each year beginning in October 2024.
“Affiliate” means, with respect to a Person, any other Person which directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies.
“Annual Noteholders’ Tax Statement” has the meaning set forth in Section 6.3.
“Asset Tape” has the meaning assigned to such term in the Master Repurchase Agreement.
“Auction Period” has the meaning specified in Section 9.6(b).
“Authorized Officer” means, with respect to the Issuer, any authorized employee or agent of the Administrator, or an authorized officer of the Owner Trustee.
“Available Funds Rate” means, with respect to each Class of Notes and any Payment Date following the occurrence and continuance of an Indenture Event of Default, a rate per annum (adjusted for the actual number of days in the related Interest Accrual Period) equal to the product of (x) a fraction, expressed as a percentage, the numerator of which is the amount of interest received on the Purchased Assets during the related Interest Accrual Period minus the Monthly Aggregate Fee, the Delinquent Loan Reviewer Fee, the Mortgage Loan Custodial Fee and any other amounts reimbursable by the Issuer to the Standby Servicer, the Owner Trustee,
the Collateral Agent, the Note Calculation Agent, the Delinquent Loan Reviewer or the Indenture Trustee during such Interest Accrual Period and any Extraordinary Expenses paid by the Issuer during such Interest Accrual Period, and the denominator of which is the aggregate Note Balance of the Notes immediately prior to the related Payment Date, and (y) 12.
“AVM” means a value for a Mortgaged Property based on an automated valuation model.
“Basis Risk Shortfall Amount” means, with respect to each Class of Notes and any Payment Date following the occurrence of a Repo Trigger Event or the occurrence and continuance of an Indenture Event of Default, an amount equal to the sum of (i) the excess of (a) the amount of interest that would have accrued on such Class based on the Term SOFR Rate plus the Specified Margin set forth in the definition of Note Rate over (b) the amount of interest actually accrued on such Class based on the Note Rate for such Payment Date and (ii) the unpaid portion of any Basis Risk Shortfall Amount from the prior Payment Date together with accrued interest at the related Note Rate without regard to the Available Funds Rate. Any Basis Risk Shortfall Amount for a Payment Date shall be paid on such Payment Date or future Payment Dates to the extent of funds available.
“Benchmark” means as of the Closing Date, the Term SOFR Rate; provided, that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the then-current Benchmark, then “Benchmark” shall mean the applicable Benchmark Replacement.
“Benchmark Determination Date” means with respect to a Payment Date, (i) if the Benchmark is the Term SOFR Rate, the SOFR Determination Date and (ii) if the Benchmark is any other rate, the date determined by the Administrator in accordance with the Benchmark Replacement Conforming Changes.
“Benchmark Replacement” means the first alternative set forth in the order below that can be determined by the Administrator as of the related Benchmark Replacement Date:
(i) 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; and
(ii) the sum of: (a) the alternate rate of interest that has been selected by the Administrator 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 securitizations at such time and (b) the Benchmark Replacement Adjustment.
“Benchmark Replacement Adjustment” means the first alternative set forth in the order below that can be determined by the Administrator as of the related Benchmark Replacement Date:
(i) 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; and
(ii) the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Administrator 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 securitization transactions at such time.
“Benchmark Replacement Conforming Changes” means in connection with the determination of any Benchmark Transition Event or Benchmark Replacement Date or the adoption of any Benchmark Replacement, Unadjusted Benchmark Replacement or Benchmark Replacement Adjustment, any technical, administrative or operational changes (including changes to the definition of “Accrual Period,” timing and frequency of determining rates and making payments of interest, changes to the definition of “Corresponding Tenor” and other administrative matters) that the Administrator decides may be appropriate to reflect such determination or adoption in a manner substantially consistent with market practice (or, if the Administrator decides that adoption of any portion of such market practice is not administratively feasible or if the Administrator determines that no such market practice exists), in such other manner as the Administrator determines is reasonably necessary.
“Benchmark Replacement Date” means the applicable date set forth below:
(i) in the case of clause (i) or (ii) 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 the relevant Benchmark permanently or indefinitely ceases to provide such Benchmark; or
(ii) in the case of clause (iii) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information.
For the avoidance of doubt, with respect to a Payment Date, if the Benchmark Replacement Date occurs on the same day as the related Benchmark Determination Date, the Benchmark Replacement Date shall be deemed to have occurred prior to such Benchmark Determination Date.
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(i) a public statement or publication of information by or on behalf of the administrator of the Benchmark announcing that the administrator has ceased or will cease to provide the Benchmark permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark;
(ii) a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark, the central bank for the currency of the Benchmark, an insolvency official with jurisdiction over the administrator for the Benchmark, a resolution authority with jurisdiction over the administrator for the Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark, which states that the administrator of the Benchmark has ceased or will cease to provide the Benchmark permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark; or
(iii) a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark announcing that the Benchmark is no longer representative.
“Benchmark Transition Event Notice” means as defined in Section 2.15(b)(ii).
“Benefit Plan Investor” means (i) any “employee benefit plan” as defined in and subject to Title I of ERISA, (ii) any “plan” as defined in and subject to Section 4975 of the Code, or (iii) any entity or account any of the assets of which are deemed to be “plan assets” (within the meaning of the Plan Asset Regulation).
“Book-Entry Notes” means Notes for which ownership and transfers of which shall be evidenced or made through book entries by a Clearing Agency as described in Section 2.16; provided that after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Notes are issued to the Note Owners, such Definitive Notes shall replace Book-Entry Notes.
“Book-Entry System” means the Treasury/Reserve Automated Debt Entry System maintained at The Federal Reserve Bank of New York.
“BPO” means a broker’s price opinion.
“Business Day” means any day other than (i) Saturday or Sunday, (ii) a day on which banking institutions in New York City, NY, Chicago, IL, Wilmington, DE or any other city where the corporate trust office or the principal office of the Indenture Trustee, Owner Trustee or the Collateral Agent is located, are authorized or required by law or executive order to be closed for business or (iii) a day on which the Book-Entry System and DTC are not open for business.
“Buyer” means the Issuer as buyer under the Master Repurchase Agreement and the Indenture Trustee as assignee of the Issuer through the assignment of the Master Repurchase Agreement hereunder.
“Buyer’s Account” means the account established by the Collateral Agent for the benefit of the Issuer as buyer under the Master Repurchase Agreement.
“Certificate Paying Agent” shall have the meaning assigned to such term in the Trust Agreement.
“Certificate Registrar” shall have the meaning assigned to such term in the Trust Agreement.
“Certificated Purchased Security” means, with respect to each Purchased Asset that is a Participation Certificate, the meaning specified in Section 8-102(a)(4) of the UCC.
“Certificateholder” means, with respect to the Trust Certificate, the Person in whose name such Trust Certificate is registered on the Certificate Register, as defined in the Trust Agreement.
“Class” means collectively, all of the Notes bearing the same alphabetical class designation.
“Class A Notes” means any of the Class A Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to this Indenture, substantially in the form of Exhibit A.
“Class B Notes” means any of the Class B Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to this Indenture, substantially in the form of Exhibit A.
“Class C Notes” means any of the Class C Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to this Indenture, substantially in the form of Exhibit A.
“Class D Notes” means any of the Class D Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to this Indenture, substantially in the form of Exhibit A.
“Class E Notes” means any of the Class E Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to this Indenture, substantially in the form of Exhibit A.
“Class F Notes” means any of the Class F Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to this Indenture, substantially in the form of Exhibit A.
“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act or any successor provision thereto or Euroclear and Clearstream. The initial Clearing Agencies shall be DTC, Euroclear and Clearstream.
“Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.
“Clearstream” means Clearstream Banking, société anonyme, a corporation organized under the laws of the Grand Duchy of Luxembourg.
“Closing Date” means September 27, 2024.
“Code” means the United States Internal Revenue Code of 1986, and any successor statute of similar import, in each case as in effect from time to time. References to sections of the Code also refer to any successor sections.
“Collateral” has the meaning specified in the Granting Clause hereof.
“Collateral Agent” means U.S. Bank Trust Company, National Association or its permitted successors and assigns as collateral agent under the Master Repurchase Agreement.
“Collateral Analytics” means Collateral Analytics (CA) or its permitted successors and assigns.
“Confirmation” has the meaning specified in the Master Repurchase Agreement.
“Corporate Trust Office” means the office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered which office at the date of the execution of this Indenture is located at (i) for all purposes other than Note transfers, 190 S. LaSalle Street, 7th Floor, MK-IL-SL7R, Chicago, Illinois 60603, Attention: Mello Warehouse Securitization Trust 2024-1 and (ii) for Note transfer purposes, 111 Fillmore Avenue East, St. Paul, Minnesota, 55107, Attn: Bondholder Services, EP-MN-WS2N, Mello Warehouse Securitization Trust 2024-1, or at any other time at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Issuer.
“Corresponding Tenor” means a tenor (including overnight) having the length (disregarding any business day adjustment) of 30 days or one-month, and with respect to a Benchmark Replacement, a tenor (including overnight) having approximately the same length (disregarding any business day adjustment) as the applicable tenor for the then-current Benchmark.
“Current Interest Amount” means, for each Payment Date and any Class of Notes, an amount equal to the product of (i) the Note Balance of such Class as of the day immediately preceding such Payment Date, (ii) the applicable Note Rate for the Interest Accrual Period related to such Payment Date and (iii) the actual number of days in such Interest Accrual Period divided by 360.
“Custodial Acknowledgment” means the Custodial Acknowledgment and Notice of Transfer and Pledge, dated as of the date hereof, by the Issuer, and as acknowledged and agreed to by the Mortgage Loan Custodian, loanDepot.com, LLC and U.S. Bank Trust Company, National Association, as indenture trustee.
“DBRS” means DBRS, Inc., or any successor thereto.
“Definitive Notes” means definitive, fully registered Notes of a Class.
“Delinquent Loan Reviewer” shall have the meaning set forth in Section 4.4(e) hereof.
“Delinquent Loan Reviewer Fee” means, with respect to any Payment Date, the fee payable to the Delinquent Loan Reviewer for the performance of its services hereunder.
“Delivery” means the taking of the following steps:
(a)in the case of each Certificated Purchased Security, (A) causing the delivery of such Certificated Purchased Security to the Indenture Trustee or the Collateral Agent, on behalf of the Indenture Trustee, registered in the name of the Indenture Trustee or indorsed to the Indenture Trustee or in blank by an effective endorsement, and (B) causing the Indenture Trustee or the Collateral Agent, on behalf of the Indenture Trustee, to maintain continuous possession of such Certificated Purchased Security;
(b)in the case of each financial asset (as defined in Section 8-102(a)(9) of the UCC) not covered by the foregoing clause (a), causing the transfer of such financial asset to the Indenture Trustee in accordance with applicable law and regulation and causing the Indenture Trustee to credit such financial asset to the Payment Account; and
(c)in the case of the Payment Account (which constitutes a “deposit account” under Section 9-l02(a)(29) of the UCC), causing (i) the Indenture Trustee continuously to (A) be the “Customer” with respect to such Payment Account and, (B) except as may be expressly provided herein to the contrary, have dominion and control over such account and (ii) the depository bank to agree that it will comply with instructions issued by the Indenture Trustee with respect to the disposition of funds held in such Payment Account without further consent of the Issuer.
“Diligence Provider” means Clayton Services LLC, a Delaware limited liability company, or a Qualified Successor Diligence Provider appointed by the Seller, and their respective successors and assigns under the Monitoring Agreement.
“Diligence Report” means any of the Initial Diligence Report and/or Final Diligence Report, as the context may require.
“DTC” means The Depository Trust Company.
“Due Period” means, with respect to any Payment Date, the period commencing the day following the immediately preceding Payment Date to and including such Payment Date.
“Eligible Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and holding funds deposited for the trustee in such account, so long as (i) the long term unsecured debt on the
most senior series of notes of such depository institution shall be rated at least “BBB” by DBRS (to the extent rated by DBRS) or the long-term issuer rating of such depository institution shall be at least “BBB” by DBRS (to the extent rated by DBRS) and (ii) the capital and surplus of such institution is not less than $[***]. If any account ceases to be an Eligible Account, then a best efforts attempt shall be made to transfer such Eligible Account, within [***] of notice that such account is no longer an Eligible Account, to an institution where such account would be an Eligible Account.
“Eligible Institution” means a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), which (i) meets the Eligible Institution Ratings set forth in this Indenture and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation. If so qualified, the Indenture Trustee, the Securities Intermediary, or the Owner Trustee may be considered an Eligible Institution for the purposes of this definition.
“Eligible Institution Ratings” means either (A) a long term unsecured debt rating or issuer rating of at least “AA” by DBRS (to the extent rated by DBRS) or (B) a short-term deposit or issuer rating of at least “R-1 (high)” by DBRS (to the extent rated by DBRS), or any other long term, short term or certificate of deposit or issuer rating acceptable to the Rating Agency.
“Eligible Mortgage Loans” has the meaning given to such term in the Master Repurchase Agreement.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Escrow Agent and Custodian” means Deutsche Bank National Trust Company, not in its individual capacity but solely in its capacities as (i) escrow agent under the Escrow Agreement and (ii) custodian under two mortgage loan participation purchase agreements specified in the Escrow Agreement.
“Escrow Agreement” means the Fourth Amended and Restated Escrow Agreement, dated as of August 16, 2016 among the Escrow Agent and Custodian, the Warehouse Providers and Gestation Purchasers, and the Seller, as amended.
“Escrow Agreement Joinder” means Amendment No. 16 and Joinder to the Fourth Amended and Restated Escrow Agreement, dated on or about the Closing Date among the Escrow Agent and Collateral Agent, the Warehouse Providers and Gestation Purchasers and the Seller.
“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear System.
“Event of Bankruptcy” means with respect to the Seller or the Issuer, any 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.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Expected Maturity” means the business day immediately following the Expiration Date.
“Expiration Date” means September 25, 2026, or if such date is not a Business Day, the immediately following Business Day.
“Extraordinary Expense Cap” means an annual amount equal to $[***]; provided that the Extraordinary Expense Cap will not apply (i) on the Expiration Date, (ii) on any Payment Date following the Pre-Default Period or (iii) on any Payment Date following a Sale.
“Extraordinary Expenses” means any unanticipated fees or expenses of, or indemnities owed by, the Issuer consisting of amounts payable or reimbursable to any of the Indenture Trustee (including in its capacities as Certificate Paying Agent and Certificate Registrar under the Trust Agreement), the Owner Trustee, the Standby Servicer, the Note Calculation Agent, the Collateral Agent and, following a Repo Event of Default, the Mortgage Loan Custodian, by the Issuer pursuant to the terms of any Program Agreement and any other unanticipated costs, fees, expenses, liabilities, taxes and losses borne by the Issuer for which the Issuer has not and, in the reasonable good faith judgment of the Indenture Trustee, shall not, obtain reimbursement or indemnification from any other Person. The Indenture Trustee may make withdrawals from the Payment Account to pay itself or any other party the amount of any Extraordinary Expenses in accordance with Section 6.1(d) or Section 6.1(e), as applicable.
“Failed Auction Period” means immediately following the expiration of the Auction Period, if it is determined that the Minimum Sale Price will not be received.
“Fannie Mae” means Fannie Mae, the government sponsored enterprise formerly known as the Federal National Mortgage Association.
“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 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 to provide FHA Mortgage Insurance pursuant to the National Housing Act (12 U.S.C. 1709, 1715(b)).
“FHA Mortgage Loan” shall mean a Mortgage Loan that is the subject of an FHA Mortgage Insurance Contract.
“FHA Regulations” shall mean regulations promulgated by HUD under the Federal Housing Administration Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Mortgage Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FHA Streamline Mortgage Loan” shall mean a Mortgage Loan originated under the FHA streamline program.
“Final Diligence Report” has the meaning specified in Section 4.4(a) hereof.
“Final Stated Maturity Date” means, with respect to the Notes, one (1) year after the maturity date of the latest maturing Purchased Asset, which is expected to be the Payment Date occurring in October 2057.
“Foreclosure Proceeding” means any proceeding, non-judicial sale or power of sale or other proceeding (judicial or non-judicial) for the foreclosure, sale or assignment of any Mortgage Loan, Mortgaged Property or any other Collateral under any Mortgage.
“FRBNY’s Website” means the website of the FRBNY, currently at https://www.newyorkfed.org, or at such other page as may replace such page on the FRBNY’s website.
“Freddie Mac” means the Federal Home Loan Mortgage Corporation or any successor thereto.
“GAAP” means generally accepted accounting principles set forth in the statements and pronouncements of the Financial Accounting Standards Board and opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants or in such other statements by such other entity as may be approved by a significant segment of the accounting industry.
“Global Note” shall mean any Note, ownership and transfers of which shall be made through book entries by a Clearing Agency.
“Governmental Authority” means any federal, state, local or foreign court or governmental department, commission, board, bureau, agency, authority, instrumentality or regulatory body.
“Grant” means to mortgage, pledge, bargain, sell, warrant, alienate, demise, convey, assign, transfer, create and grant a security interest in and right of set-off against, deposit, set over and confirm. A Grant of Collateral shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including, without limitation, the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of such Collateral and all other moneys and proceeds payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything which the granting party is or may be entitled to do or receive thereunder or with respect thereto.
“Guaranty” means the guaranty, dated as of the Closing Date, by LD Holdings Group LLC for the benefit of the Buyer.
“Holder” and “Noteholder” means the Person in whose name a Note is registered in the Note Register.
“HUD” shall mean the U.S. Department of Housing and Urban Development.
“Income” has the meaning given to such term in the Master Repurchase Agreement.
“Indebtedness” as applied to any Person, means, [***].
“Indenture Event of Default” means an event of default as set forth in Section 9.1.
“Indenture Trustee Fee Rate” means [***]% divided by twelve (12).
“Initial Diligence Report” has the meaning specified in Section 4.4(a) hereof.
“Initial Purchaser” means Jefferies LLC.
“Intercreditor Agreement” means the Fourth Amended and Restated Intercreditor Agreement, dated as of August 16, 2016 among the Warehouse Providers and Gestation Purchasers and the Seller, as amended.
“Intercreditor Agreement Joinder” means Amendment No. 16 and Joinder to the Fourth Amended and Restated Intercreditor Agreement, dated on or about the Closing Date, among the Warehouse Providers and Gestation Purchasers and the Seller.
“Intercreditor Documents” means the Escrow Agreement, the Escrow Agreement Joinder, the Intercreditor Agreement, the Intercreditor Agreement Joinder, the Joint Securities Account Control Agreement and the JSACA Joinder.
“Interest Accrual Period” means, with respect to any Payment Date and each Class of Notes, the period from and including the immediately preceding Payment Date (or the Closing Date in the case of the first Payment Date) to and including the day immediately preceding such Payment Date.
“Interest Coverage Amount” has the meaning given to such term in the Master Repurchase Agreement.
“Interest Payment Amount” means, for each Payment Date and a Class of Notes, an amount equal to the sum of (i) the Current Interest Amount for such Payment Date and such Class of Notes and (ii) the Interest Shortfall Amount for such Payment Date and such Class of Notes.
“Interest Shortfall Amount” means, for any Payment Date and a Class of Notes, the excess, if any of (a) the Interest Payment Amount for such Class of Notes for the immediately preceding Payment Date over (b) the amount paid to the holders of such Class of Notes in respect of the Interest Payment Amount for such Class of Notes on such immediately preceding Payment Date plus interest on that amount at the applicable Note Rate.
“Investment Company Act” means the Investment Company Act of 1940, as amended.
“Investor Certification” means a certificate (which may be in electronic form) substantially in the form of Exhibit C to this Agreement or in the form of an electronic certification contained on the Indenture Trustee’s website.
“Issuer Order” and “Issuer Request” means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee.
“Joint Securities Account Control Agreement” means the Fourth Amended and Restated Escrow Agreement, dated as of August 16, 2016 among the Joint Securities Intermediary, the Warehouse Providers and Gestation Purchasers, and the Seller, as amended.
“Joint Securities Intermediary” means Deutsche Bank National Trust Company, not in its individual capacity but solely in its capacity as securities intermediary.
“JSACA Joinder” means Amendment No. 16 and Joinder to the Fourth Amended and Restated Escrow Agreement, dated on or about the Closing Date among the Joint Securities Intermediary, the Warehouse Providers and Gestation Purchasers and the Seller.
“Level C Exception” means, [***].
“Level D Exception” means, [***].
“Lien” means, when used with respect to any Person, any interest in any real or personal property, asset or other right held, owned or being purchased or acquired by such Person which secures payment or performance of any obligation, and shall include any mortgage, lien, pledge, encumbrance, charge, retained security title of a conditional vendor or lessor, or other security interest of any kind, whether arising under a security agreement, mortgage, lease, deed of trust, chattel mortgage, assignment, pledge, retention or security title, financing or similar statement, or notice or arising as a matter of law, judicial process or otherwise.
“Margin Account” has the meaning given to such term in the Master Repurchase Agreement.
“Market Value” has the meaning given to such term in the Master Repurchase Agreement.
“Master Confirmation” means the Master Repurchase Agreement Confirmation to the Master Repurchase Agreement, dated as of the date hereof, by the Seller and as accepted, agreed
and acknowledged by the Issuer, as the same may at any time be amended, modified or supplemented.
“Master Repurchase Agreement” means the Master Repurchase Agreement, dated as of the date hereof between the Issuer and the Seller and as agreed and acknowledged by the Collateral Agent and Securities Intermediary, including all annexes thereto and as supplemented by the Master Confirmation and each individual Confirmation, as the same may at any time be amended, modified or supplemented.
“Minimum Sale Price” has the meaning specified in Section 9.6(b) hereof.
“Monitoring Agreement” means the Monitoring Agreement, dated as of the date hereof, between the Issuer and the Diligence Provider, and as acknowledged and agreed by loanDepot.com, LLC, as seller and administrator.
“Monthly Aggregate Fee” means, with respect to each Interest Accrual Period, the sum of the Monthly Collateral Agent Fee, the Monthly Indenture Trustee Fee, the Standby Servicing Fee, the Monthly Servicing Fee, the Owner Trustee Fee, the Administrator Fee and the Review Fee, if any, payable for the Payment Date relating to such Interest Accrual Period.
“Monthly Collateral Agent Fee” means, with respect to each Payment Date, the fee payable to the Collateral Agent [***].
“Monthly Indenture Trustee Fee” means, with respect to each Payment Date, the fee payable to the Indenture Trustee [***].
“Monthly Payment Date Statement” means, with respect to any Payment Date, a report setting forth (A) the amounts to be withdrawn from the Payment Account and paid pursuant to Section 6.1(d) or Section 6.1(e), as applicable, on such Payment Date, (B) the total amount to be paid to the Noteholders on such Payment Date and separately identifying the portion of such payment allocable to interest and the portion allocable to principal, which shall be prepared in accordance with Section 4.1 hereof and (C) the other matters set forth in Section 4.1, in the form attached as Exhibit B-1 for any Payment Date prior to the occurrence and continuance of a Repo Event of Default and in the form attached as Exhibit B-2 for any Payment Date upon the occurrence and continuance of a Repo Event of Default.
“Monthly Servicer Report” means with respect to each Reporting Date (i) prior to the occurrence and continuance of an Event of Default under the Master Repurchase Agreement, a report in the form of Exhibit D-1 and (ii) upon the occurrence and continuance of an Event of Default under the Master Repurchase Agreement, a report in the form of Exhibit D-2, which in each case, shall provide information regarding the Purchased Mortgage Loans as of the last day of the calendar month preceding the related Reporting Date.
“Monthly Servicing Fee” has the meaning specified in Section 4.3(e) hereof.
“Mortgage Loan Custodial and Disbursement Agreement” means the Mortgage Loan Custodial and Disbursement Agreement, dated the Closing Date, among the Seller, the Issuer and Deutsche Bank National Trust Company, as Mortgage Loan Custodian, as amended, restated or modified from time to time and in effect.
“Mortgage Loan Custodial Fee” means the monthly fee payable to Mortgage Loan Custodian for its services rendered as mortgage loan custodian and disbursement agent pursuant to the Mortgage Loan Custodial and Disbursement Agreement.
“Mortgage Loan Custodian” means Deutsche Bank National Trust Company, not in its individual capacity but solely as custodian of the Mortgage Loan Files and other evidence of the Purchased Assets or in its capacity as disbursement agent under the Mortgage Loan Custodial and Disbursement Agreement, as applicable.
“Mortgage Loan Files” has the meaning specified thereto in the Mortgage Loan Custodial and Disbursement Agreement.
“NMWHFIT” means a “Non-Mortgage Widely Held Fixed Investment Trust” as that term is defined in Treasury Regulation Section 1.671-5(b)(12) or successor provisions.
“Note Balance” means, with respect to any Class of Notes and any date of determination, the amount stated for such Class in the column “Initial Note Balance” in Section 2.1, reduced by (i) any payments of principal actually made on such Class of Notes on all previous Payment Dates and (ii) any amounts allocated to reduce the balance thereof pursuant to Section 6.4 hereof.
“Note Calculation Agent” means, with respect to any Note, U.S. Bank Trust Company, National Association, as agent for purposes of calculating the applicable Note Rate, or its designee.
“Note Owner” means, with respect to a Book-Entry Note, the Person who is the beneficial owner of such Book-Entry Note, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly or as an indirect participant, in accordance with the rules of such Clearing Agency).
“Note Purchase Agreement” means the Note Purchase Agreement, dated September 25, 2024, by and among the Issuer, loanDepot.com, LLC and Jefferies LLC as initial purchaser, as amended from time to time.
“Note Rate” means, for each Class of Notes and any Payment Date, a per annum rate equal to the sum of the Term SOFR Rate (subject to a minimum rate of 0.00%) plus the applicable Specified Margin, provided, however, that (i) following a Failed Auction Period, the Term SOFR Rate shall be capped for each Payment Date following the Failed Auction Period at a rate equal to the Term SOFR Rate on the final Payment Date during the Failed Auction Period plus an additional [***]% and (ii) if such Payment Date occurs on or after the occurrence of a Repo Trigger Event or the occurrence and continuance of an Indenture Event of Default, the
Note Rate shall be the lesser of (x) the sum of the Term SOFR Rate (subject to a minimum rate of 0.00%) plus the applicable Specified Margin and (y) the Available Funds Rate.
“Note Register” means the register maintained pursuant to Section 2.5, providing for the registration of the Notes and transfers and exchanges thereof.
“Note Registrar” has the meaning specified in Section 2.5(a).
“Notes” means, collectively, the Class A Notes, Class B Notes, Class C Notes, Class D Notes, Class E Notes and Class F Notes.
“Officer’s Certificate” means a certificate signed by an Authorized Officer of the Issuer or the Administrator on behalf of the Issuer.
“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Indenture Trustee. The counsel may be an employee of or counsel to the Issuer, unless the Required Noteholders shall notify the Indenture Trustee in writing of objection thereto prior to the effective date of the action to which such Opinion of Counsel relates.
“Optional Prepayment” shall have the meaning assigned to such term in the Confirmation.
“Outstanding Asset Balance” means, as of any date of determination, the aggregate outstanding principal balance of the Purchased Mortgage Loans on such date.
“Owner Trustee” means Wilmington Savings Fund Society, FSB, not in its individual capacity but solely in its capacity as owner trustee under the Trust Agreement, or its successor or assign in such capacity.
“Owner Trustee Fee” means the annual fee payable to the Owner Trustee for its services pursuant to the Trust Agreement, which shall be [***]
“Owner Trustee Lien” means the lien on the Owner Trust Estate granted to the Owner Trustee pursuant to Section 8.3 of the Trust Agreement, which (as provided in such section) is subject to the prior lien of the Indenture.
“Payment Account” means the account established as such pursuant to Section 5.1(a).
“Payment Date” means, with respect to the Notes the twenty-fifth (25th) day of each calendar month or if such day is not a Business Day, the next succeeding Business Day, beginning in October 2024.
“Payment Determination Date” means one Business Day prior to each Payment Date.
“Perfection Representations” shall have the meaning set forth in Schedule I hereto.
“Permitted Liens” means (i) Liens for current taxes not delinquent or for taxes being contested in good faith and by appropriate proceedings, and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP and (ii) mechanics’, materialmen’s, landlords’, warehousemen’s and carrier’s Liens, and other Liens imposed by law, securing obligations arising in the ordinary course of business that are not more than [***] past due or are being contested in good faith and by appropriate proceedings and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP.
“Person” means and includes an individual, a partnership, a corporation, a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a government or an agency or political subdivision or instrumentality thereof.
“Plan Asset Regulation” means the Department of Labor Regulation located at 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA.
“Potential Indenture Event of Default” means any occurrence or event which, with the giving of notice, the passage of time or both, would constitute an Indenture Event of Default.
“Pre-Default Period” means the period commencing on the Closing Date and ending on the earliest of (a) the business day immediately following the Expiration Date, (b) the occurrence and continuance of an Indenture Event of Default or (c) the occurrence of a Repo Trigger Event.
“Prepayment Amount” means, with respect to any Purchased Mortgage Loans subject to an Optional Prepayment, an amount equal to the principal portion of the aggregate Repurchase Price for such Purchased Mortgage Loans.
“Price Differential” has the meaning given to such term in the Master Repurchase Agreement.
“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.
“Program Agreements” means, collectively, this Indenture, the Trust Agreement, the Administration Agreement, the Master Repurchase Agreement, the Master Confirmation, the Guaranty, the Monitoring Agreement, the Note Purchase Agreement, the Mortgage Loan Custodial and Disbursement Agreement, the Custodial Acknowledgment, the Intercreditor Documents and, with respect to each Eligible Asset, the Confirmation.
“Purchased Assets” has the meaning given to such term in the Master Repurchase Agreement.
“Purchased Mortgage Loans” has the meaning given to such term in the Master Repurchase Agreement.
“Qualified Successor Diligence Provider” means any of the following diligence providers: (i) [***], (ii) [***] or (iii) any other commercially recognized third party due diligence service provider for assets similar to the Purchased Mortgage Loans for whom the Rating Agency Condition has been satisfied.
“Rating Agency” means DBRS.
“Rating Agency Condition” means, [***].
“Realized Loss Amount” has the meaning set forth in Section 6.4 hereof.
“Record Date” means, with respect to any Payment Date and each Class of Notes and the Trust Certificate, the close of business on the Business Day immediately prior to such Payment Date.
“Reference Time” means with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, [***] the related Interest Accrual Period (with respect to the first Payment Date, [***]), and (2) if such Benchmark is not the Term SOFR Rate, the time determined by the Administrator (with the consent of the Required Noteholders).
“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 thereto.
“Repo Event of Default” means an “Event of Default” as defined in the Master Repurchase Agreement.
“Repo Guarantor” means LD Holdings Group LLC, as repo guarantor under the Guaranty or any permitted successor thereunder.
“Repo Trigger Event” means a Repo Event of Default has occurred and is continuing and has not been waived by the Required Noteholders pursuant to the terms of this Indenture.
“Reporting Date” means, with respect to the Notes the nineteenth (19th) day of each calendar month or if such day is not a Business Day, the next succeeding Business Day, beginning in October 2024.
“Repurchase Date” shall have the meaning assigned to such term in the Master Repurchase Agreement.
“Repurchase Price” shall have the meaning assigned to such term in the Master Repurchase Agreement.
“Required Noteholders” means Noteholders holding 100% of the aggregate Note Balance of all Notes voting as a single class, unless the context specifically refers to a particular Class of Notes, in which case “Required Noteholders” means Noteholders holding 100% of the Note
Balance of such Class of Notes, in each case, excluding any Notes held by the Issuer, the Administrator, the Seller, the Repo Guarantor, the Servicer or any Affiliate of the Issuer, the Seller, the Repo Guarantor, the Administrator, or the Servicer.
“Required Principal Payment” means, with respect to each class of Securities, for any Payment Date, such Class’s pro rata portion of the sum of (i) the principal portion of the Prepayment Amount, if any, deposited into the Payment Account during the related Due Period and (ii) any cash withdrawn from the Buyer’s Account in respect of principal and deposited into the Payment Account pursuant to Section 5.2(a) or (b), including on the Expiration Date.
“Requirements of Law” means, with respect to any Person or any of its property, the certificate of incorporation or articles of association and by-laws or other organizational or governing documents of such Person or any of its property, and any law, treaty, rule or regulation, or determination of any arbitrator or 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, whether federal, state or local (including, without limitation, usury laws, the federal Truth in Lending Act and retail installment sales acts).
“Reserve Account” means the account established as such pursuant to Section 5.1(b).
“Reserve Deposit” has the meaning specified in Section 4.4.
“Review” has the meaning specified in the Monitoring Agreement.
“Review Date” means the 30th day following the Closing Date and every 180 days thereafter (or, if any such day is not a Business Day, the next succeeding Business Day), ending on the Expiration Date.
“Review Fee” with respect to each Payment Date, means the fee, if any, payable to the Diligence Provider for the services provided by it pursuant to the Monitoring Agreement and any expenses due to field work or out of pocket expenses pursuant to the Monitoring Agreement for the month in which such Payment Date occurs.
“Review Period” has the meaning specified in Section 4.4.
“Rule 144A” has the meaning specified in Section 2.4(a).
“Rule 144A Global Note” has the meaning specified in Section 2.4(a).
“Rule 17g-5” means Rule 17g-5 under the Exchange Act.
“Sale” means the sale of the Collateral pursuant to Section 9.6 following an Indenture Event of Default or Repo Trigger Event and satisfaction of the Minimum Sale Price.
“Securities” means, each Class of Notes and the Trust Certificates.
“Securities Act” means the Securities Act of 1933, as amended.
“Securities Intermediary” has the meaning specified in Section 8-102(a)(14) of the applicable UCC.
“Securities Monthly Payment Amount” means, for any Payment Date occurring during the Pre-Default Period, the aggregate of (i) the Interest Payment Amount on each Class of Notes and (ii) the Required Principal Payments on each class of Securities.
“Security Entitlement” has the meaning specified in Section 8-102(a)(17) of the UCC.
“Seller” means loanDepot.com, LLC, as seller under the Master Repurchase Agreement or any permitted successor thereunder.
“Servicer” means loanDepot.com, LLC, any successor or assign.
“Servicing Addendum” means the provisions set forth in Schedule II attached hereto and made a part hereof.
“Servicing Advance” has the meaning specified in Schedule II.
“Servicing Records” has the meaning assigned to such term in the Master Repurchase Agreement.
“Servicing Termination Event” has the meaning specified in Section 4.3.
“Servicing Transfer Date” has the meaning specified in Schedule II.
“Similar Law” has the meaning set forth in Section 2.4(a)(iv) hereof.
“SOFR” means 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 FRBNY’s Website.
“SOFR Adjustment Conforming Changes” means with respect to any Term SOFR Rate, any technical, administrative or operational changes (including changes to the Accrual Period, timing and frequency of determining rates and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the Administrator decides, from time to time, may be appropriate to adjust such Term SOFR Rate in a manner substantially consistent with or conforming to market practice (or, if the Administrator decides that adoption of any portion of such market practice is not administratively feasible or if the Administrator determines that no market practice exists, in such other manner as the Administrator determines is reasonably necessary).
“SOFR Determination Date” means with respect to the first Payment Date, September 25, 2024, and with respect to each subsequent Payment Date prior to the occurrence of a Benchmark
Transition Event, the second U.S. Government Securities Business Day prior to the immediately preceding Payment Date.
“Specified Margin” means (i) with respect to the Class A Notes, [***]%, (ii) with respect to the Class B Notes, [***]%, (iii) with respect to the Class C Notes, [***]%, (iv) with respect to the Class D Notes, [***]%, (v) with respect to the Class E Notes, [***]% and (vi) with respect to the Class F Notes, [***]%.
“Standby Servicer” means U.S. Bank National Association or its permitted successors and assigns.
“Standby Servicing Fee” with respect to each Payment Date, so long as the Standby Servicer is not the Servicer of any Purchased Asset, means the fee payable to the Standby Servicer. [***].
“Subsequent Recovery Amount” has the meaning set forth in Section 6.4 hereof.
“Tax Determination Event” means (1) delivery to the Indenture Trustee of an Opinion of Counsel to the effect that there has been a change in applicable tax law that would for U.S. federal or applicable state and local or franchise tax purposes (a) cause the Issuer not to be classified as a “trust,” under Treasury Regulations Section 301.7701-4(c), (b) cause the rights and obligations under the Applicable Agreements held by the Issuer not to be debt, (c) contradict the tax treatment of the Noteholders as owning undivided, beneficial interests in the Debt, or (d) have an adverse tax effect on the Issuer or the Noteholders or (2) rendering of an adverse binding determination by a governmental taxing authority on such issues.
“Tax Opinion” means in the context of any proposed amendment, modification or supplement of any Program Agreement, an Opinion of Counsel to the effect that such amendment, modification or supplement will not adversely affect the characterization of the Issuer as a “trust” under Treasury Regulations Section 301.7701-4(c).
“Term SOFR Rate” means for any Interest Accrual Period, as of the applicable Reference Time, the rate that appears on the Bloomberg ticker which displays one month Term SOFR as determined by CME Group Inc. (or such other Person that takes over the determination of such rate as recommended by the SOFR Administrator) (such ticker currently being Bloomberg ticker TSFR1M) and currently listed on the CME Group Inc. website: https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html. For purposes of calculating the Term SOFR Rate, the Term SOFR Rate shall be calculated to [***].
“Termination Date” means, the earliest of (a) the Expiration Date, (b) the Seller exercising its right to make an Optional Prepayment in full or (c) a Repo Trigger Event.
“TILA” means Truth In Lending Act of 1968, as amended.
“Transfer Agent” means U.S. Bank Trust Company, National Association or its successor in interest.
“Trust Agreement” means the Amended and Restated Trust Agreement, dated as of the date hereof, among loanDepot.com, LLC, as seller, Wilmington Savings Fund Society, FSB, as Owner Trustee and U.S. Bank Trust Company, National Association, as Certificate Registrar and Certificate Paying Agent.
“Trust Certificates” means the certificates issued by the Issuer pursuant to the Trust Agreement evidencing the equity interest in the Purchased Assets.
“Trust Estate” has the meaning specified in the Granting Clause hereof.
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.
“Trust Officer” means, with respect to the Indenture Trustee and Standby Servicer, any Vice President, Assistant Vice President, Secretary, Treasurer, or trust officer working in the Corporate Trust Office of the Indenture Trustee from which this Indenture is being administered, and with respect to a particular matter, any other officer working in the Corporate Trust Office of the Indenture Trustee to whom such matter is referred because of such officer’s knowledge and familiarity with a particular subject, in each case having direct responsibility for the administration of this Indenture.
“U.S. Government Obligations” means direct obligations of the United States of America, or any agency or instrumentality thereof for the payment of which the full faith and credit of the United States of America is pledged as to full and timely payment of such obligations.
“U.S. Person” shall have the meaning given in Regulation S under the Securities Act.
“UCC” means the Uniform Commercial Code as in effect from time to time in the specified jurisdiction.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the applicable Benchmark Replacement Adjustment.
“United States” or “U.S.” means the United States of America, its fifty states and the District of Columbia.
“United States Person” shall have the meaning assigned to such term in Section 7701(a)(30) of the Code.
“U.S. Government Securities Business Day” means any day except for a Saturday, a Sunday or a day on which the Security Industry/Financial Market Association (SIFMA) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
“VA” shall mean the Veterans Administration, an agency within HUD, or any successor thereto and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations
“VA IRRR Mortgage Loan” shall mean VA Interest Rate Reduction Refinance Loan.
“VA Loan Guaranty Agreement” means the obligation of the United States to pay a specific percentage of a Purchased Mortgage Loan (subject to a maximum amount) upon default of the mortgagor pursuant to the Servicemen’s Readjustment Act of 1944, as amended.
“Valuation Deficiency” means, [***].
“Warehouse Providers and Gestation Purchasers” means, each of the lenders identified in the Escrow Agreement, the Escrow Agreement Joinder, the Intercreditor Agreement, the Intercreditor Agreement Joinder, the Joint Securities Account Control Agreement and/or the JSACA Joinder, in each case, as amended from time to time.
“Wet Loans” means an Eligible Mortgage Loan for which the required loan documents included in the Mortgage Loan File have not yet been delivered to the Mortgage Loan Custodian.
“WHFIT” means a “Widely Held Fixed Investment Trust” as that term is defined in Treasury Regulation Section 1.671-5(b)(22) or successor provisions.
“written” or “in writing” means any form of written communication, including, without limitation, by means of telex, telecopier device, computer, electronic mail, telegraph or cable.
Section I.2.Cross-References.
Unless otherwise specified, references in this Indenture and in each other Program Agreement to any Article or Section are references to such Article or Section of this Indenture or such other Program Agreement, as the case may be and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.
Section I.3.Accounting and Financial Determinations; No Duplication.
Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any accounting computation is required to be made, for the purpose of this Indenture, such determination or calculation shall be made, to the extent applicable and except as otherwise specified in this Indenture, in accordance with GAAP. When used herein, the term “financial statement” shall include the notes and schedules thereto. All accounting determinations and computations hereunder or under any other Program Agreements shall be made without duplication.
ARTICLE II.
THE NOTES
Section II.1.Designation and Terms of Notes.
Each Note shall be substantially in the form specified in Exhibit A of this Indenture and shall bear, upon its face, the designation for such Note so selected by the Issuer and set forth in this Indenture. Subject to the conditions contained herein and in the other Program Agreements, the aggregate Note Balance of Notes which may be authenticated and delivered under this Indenture is $300,000,000 except for Notes issued authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.11 and 2.13 hereof. Such aggregate Note Balance shall be divided among six Classes having the respective Class designations, initial Note Balances, Note Rates and Final Stated Maturity Dates as follows:
| | | | | | | | | | | |
| Class Designation | Initial Note Balance | Note Rate | Final Stated Maturity Date |
| Class A | $ 201,000,000 | (1) | (2) |
| Class B | $ 3,300,000 | (1) | (2) |
| Class C | $ 31,500,000 | (1) | (2) |
| Class D | $ 28,050,000 | (1) | (2) |
| Class E | $ 24,150,000 | (1) | (2) |
| Class F | $ 12,000,000 | (1) | (2) |
| | | |
_______________
(1) See definition of Note Rate in Article I hereof.
(2) See definition of Final Stated Maturity Date in Article I hereof.
Each Note shall have a Payment Date on the twenty-fifth (25th) day of each calendar month or, if such day is not a Business Day, the next succeeding Business Day. The Notes shall be in denominations of $25,000, and in each case, integral multiples of $1 in excess thereof.
Section II.2.No Priority Among Notes.
Each Note of a particular Class shall rank pari passu with each other Note of such Class and be equally and ratably secured by the Collateral included in the Trust Estate. All Notes of a particular Class shall be substantially identical except as to denominations and as expressly permitted in this Indenture. The Holders of all Notes of a particular Class shall rank equally as to
receipt of interest and principal, with no preference or priority being afforded to the Holder of any one Note of a particular Class over the Holder of any other Note of that particular Class.
Section II.3.Execution and Authentication.
(a)An Authorized Officer shall sign the Notes for the Issuer by manual or facsimile signature. If an Authorized Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note shall nevertheless be valid. The Issuer shall deliver to the Indenture Trustee an executed Note and an authentication order each time it requests a new Note to be issued. No Note shall be entitled to any benefit under this Indenture or be valid for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein, duly executed by the Indenture Trustee by the manual signature of an authorized signatory. Such signatures on such certificate shall be conclusive evidence, and the only evidence, that a Note has been duly authenticated under this Indenture. The Indenture Trustee’s certificate of authentication shall be in substantially the following form:
This is one of the Class [A] [B] [C] [D] [E] [F] Notes referred to in the within mentioned Indenture.
[__________________________],
as Indenture Trustee
By:
Authorized Signatory
(b)Each Note shall be dated and issued as of the date of its authentication by the Indenture Trustee.
(c)Notwithstanding the foregoing, if any Note shall have been authenticated and delivered hereunder but never issued and sold by the Issuer, and the Issuer shall deliver such Note to the Indenture Trustee for cancellation as provided in Section 2.16, together with a written statement (which need not comply with Section 13.3 and need not be accompanied by an Opinion of Counsel) stating that such Note has never been issued and sold by the Issuer, for all purposes of this Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall not be entitled to the benefits of this Indenture.
Section II.4.Form of Notes; Book-Entry Provisions.
(a)Each Class of Notes may be sold to qualified institutional buyers within the meaning of, and in reliance on, Rule 144A under the Securities Act (“Rule 144A”) and shall be issued in the form of a Global Note substantially in the form of Exhibit A attached hereto (each, a “Rule 144A Global Note”) with such legends as may be applicable thereto, which shall be deposited on behalf of the subscribers for the Notes represented thereby with a custodian for DTC, and registered in the name of DTC or a nominee of DTC, duly executed by the Issuer and authenticated by the Indenture Trustee as provided in Section 2.6 for credit to the accounts of the
subscribers at DTC. The aggregate initial principal amount of a Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the records of the custodian for DTC, DTC or its nominee, as the case may be, as hereinafter provided.
Prior to any sale or any transfer of a Note for a Rule 144A Global Note, such purchaser or Note Owner shall be deemed to have represented and agreed as follows:
(i)It is a qualified institutional buyer as defined in Rule 144A and is acquiring the Notes for its own institutional account or for the account of a qualified institutional buyer;
(ii)It understands that the Notes purchased by it will be offered, and may be transferred, only in a transaction not involving any public offering within the meaning of the Securities Act and that, if in the future it decides to resell, pledge or otherwise transfer any Notes, such Notes may be resold, pledged or transferred only in accordance with the transfer restrictions set forth in Section 2.8;
(iii)It understands that the Notes will bear a legend substantially as set forth in Section 2.9; and
(iv)It understands that it will be deemed to make the representations and warranties set forth in Section 2.8(g).
In addition, such purchaser shall be responsible for providing additional information or certification, as shall be reasonably requested by the Issuer or the initial purchaser of such Notes, to support the truth and accuracy of the foregoing acknowledgments, representations and agreements, it being understood that such additional information is not intended to create additional restrictions on the transfer of the Notes.
Section II.5.Note Registrar.
(a)The Issuer shall (i) maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Note Registrar”). The Note Registrar shall keep a register of the Notes and of their transfer and exchange (the “Note Register”). The Issuer may appoint one or more co-registrars. The term “Note Registrar” includes any co-registrars. The Issuer may change any Note Registrar without prior notice to any Noteholder. The Issuer shall notify the Indenture Trustee in writing of the name and address of any agent not a party to Indenture. The Indenture Trustee is hereby initially appointed as the Note Registrar and agent for service of notices and demands in connection with the Notes. The entries in the Note Register shall be conclusive absent manifest error, and the Issuer and the Indenture Trustee shall treat each Person whose name is recorded in the Note Register pursuant to the terms hereof as a Noteholder hereunder for all purposes of this Indenture. This shall be construed so that the Notes under this Indenture are at all times maintained in “registered form” within the meaning of Section 5f.103-1(c) of the Treasury Regulations. The Note Registrar shall record the names and addresses of the Noteholders and the principal amounts and number of such Notes.
(b)The Issuer shall enter into an appropriate agency agreement with any agent not a party to this Indenture. Such agency agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Indenture Trustee in writing of the name and address of any such agent. If the Issuer fails to maintain a Note Registrar and a Trust Officer of the Indenture Trustee has actual knowledge of such failure, or if the Issuer fails to give the foregoing written notice, the Indenture Trustee shall act as such, and shall be entitled to appropriate compensation in accordance with this Indenture, until the Issuer shall appoint a replacement Note Registrar.
Section II.6.Noteholder List.
The Indenture Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of the Notes. If the Indenture Trustee is not the Note Registrar, the Issuer shall furnish to the Indenture Trustee at least [***] before each Payment Date and at such other time as the Indenture Trustee may request in writing, a list in such form and as of such date as the Indenture Trustee may reasonably require of the names and addresses of Holders of the Notes.
Section II.7.Restrictions on Transfers.
(a)Transfers of beneficial interests in any Note shall be limited to transfers to qualified institutional buyers each in accordance with the procedures set forth herein.
(b)No Note may be sold or transferred (including, without limitation, by pledge or hypothecation) unless (x) such sale or transfer is exempt from the registration requirements of the Securities Act and is exempt under applicable state securities law and (y) such sale or transfer meets the restrictions set forth in clause (a) above. Any Noteholder or Note Owner desiring to effect a transfer of Notes or interests therein shall, and does hereby agree to indemnify the Issuer, the Administrator, the Indenture Trustee and the Note Registrar against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws. Any transfer of an interest in any Note to a Person that is not a Qualified Institutional Buyer, shall be null and void and shall not be given effect for any purpose hereunder, and the Indenture Trustee shall hold any funds conveyed by the intended transferee of such interest for the transferor and shall promptly reconvey such funds to such Person in accordance with the written instructions thereof delivered to the Indenture Trustee.
(c)Neither a member of any “expanded group” (as defined in Treasury Regulation Section 1.385-1(c)(4)) that includes the Seller or a “controlled partnership” (as defined in Treasury Regulation Section 1.385-1(c)(1)) of such expanded group shall acquire any Notes from the Trust, any Affiliate, or through the marketplace prior to obtaining an opinion of U.S. federal income tax counsel stating that the acquisition or reacquisition of such Note will not cause the Master Repurchase Agreement to fail to be Indebtedness for federal income tax purposes, or cause the Trust, initially upon acquisition of such Note or subsequent to the acquisition of such Note, to be classified as an association taxable as a corporation, as a publicly traded partnership, or as any arrangement other than a trust the investors in which are treated as the owners of the trust’s assets under Section 671 of the Code. The preceding sentence shall not apply to (i) any U.S. corporate member of the same U.S. corporate affiliated group (as defined in Section 1504 of the Code) filing a consolidated federal income tax return that includes the Seller (the “Trust Consolidated Group”) or (ii) a partnership all of the partners of which are either such U.S. corporate members of the Trust Consolidated Group as described in clause (i) or partnerships all of the partners of which are such U.S. corporate members of the Trust Consolidated Group as described in clause (i). No member of any “expanded group” that includes the Seller (as defined in Treasury Regulation Section 1.385-1(b)(3)) or “controlled partnership” of such expanded group (as defined in Treasury Regulation Section 1.385-1(c)(4))
shall transfer any Notes outside the expanded group prior to obtaining an opinion of U.S. federal income tax counsel stating that the transfer of such Note will not cause the Trust to be classified as an association taxable as a corporation, as a publicly traded partnership, or as any arrangement other than a trust the investors in which are treated as the owners of the trust’s assets.
Section II.8.Transfer and Exchange.
(a)The transfer and exchange of Rule 144A Global Notes or beneficial interests therein shall be effected through the Clearing Agency, in accordance with this Indenture and the procedures of the Clearing Agency therefor, which shall include restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act.
Beneficial interests in any Rule 144A Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Rule 144A Global Note in accordance with the transfer restrictions set forth in the legends referred to in Section 2.9. No written orders or instructions shall be required to be delivered to the Note Registrar to effect the transfers described in this Section 2.8. In connection with any transfer, each such transferor of such Rule 144A Global Note shall be deemed to have represented and agreed that (x) such Rule 144A Global Note is being transferred in accordance with Rule 144A under the Securities Act to a transferee that the transferor reasonably believes is purchasing such Notes for its own account or an account with respect to which the transferee exercises sole investment discretion and each of the transferee and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, in each case in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction, and (y) each such transferee of such Note shall be deemed to have made the representations set forth in Section 2.4(a)(i) through (iv).
In addition, each such transferee of such Rule 144A Global Note shall be responsible for providing additional information or certification, as shall be reasonably requested by the Issuer or the Administrator on behalf of the Issuer or the initial purchaser of such Notes, to support the truth and accuracy of the foregoing acknowledgments, representations and agreements, it being understood that such additional information is not intended to create additional restrictions on the transfer of the Notes.
(b)The Indenture Trustee shall not register the exchange of interests in a Note for a Definitive Note or the transfer of or exchange of a Note during the period beginning on any Note Record Date and ending on the next following Payment Date.
(c)To permit registrations of transfers and exchanges, the Issuer shall execute and the Indenture Trustee shall authenticate Notes, subject to such rules as the Indenture Trustee may reasonably require. No service charge to the Noteholder shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Note Registrar may require payment of a sum sufficient to cover any transfer tax or similar government charge payable in connection therewith.
(d)All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Section 2.8 shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.
(e)Prior to due presentment for registration of transfer of any Note, the Indenture Trustee, the Note Registrar and the Issuer may deem and treat the Person in whose name any Note is registered (as of the day of determination) as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Indenture Trustee, the Note Registrar or the Issuer shall be affected by notice to the contrary.
(f)Notwithstanding any other provision of this Section 2.8, the typewritten Note or Notes representing Book-Entry Notes may be transferred, in whole but not in part, only to another nominee of the Clearing Agency, or to a successor Clearing Agency selected or approved by the Issuer or to a nominee of such successor Clearing Agency, only if in accordance with this Section 2.8 and Section 2.18.
(g)Each transferee of an interest in a Book-Entry Note shall be deemed to represent and warrant, and each transferee of an interest in a Definitive Note shall deliver a certification representing and warranting, that:
(i)With respect to the Class A, Class B, Class C and Class D Notes, either (i) it is not, and for so long as it holds any beneficial interest in any such Note will not be (w) a Benefit Plan Investor, (x) a governmental, church or non-U.S. plan that is subject to any federal, state, local or non-U.S. laws that are substantially similar to Title I of ERISA or Section 4975 of the Code (“Similar Law”), (y) an entity any of the assets of which are (or are deemed for purposes of Similar Law to be) plan assets of any such governmental, church or non-U.S. plan, or (z) any person acting on behalf of or using assets of, any of the foregoing entities or (ii) in the case of a Benefit Plan Investor or a plan subject to Similar Law, (x) its acquisition, holding and disposition of such Note (including a proportionate interest in the Issuer’s underlying assets) will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of Similar Law and such Note is rated investment grade as of the date of purchase or transfer, it acknowledges that such Note is intended to be treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulation and it agrees to so treat such Note and (y) it has, by purchase of a Note or any interest therein, (i) appointed the Seller, Owner Trustee, Initial Purchaser and the Indenture Trustee and their respective affiliates (each a “Transaction Party”) to its respective role, (ii) directed the Issuer to acquire rights under the Master Repurchase Agreement and purchase the Purchased Mortgage Loans thereunder and other related documents, accounts and agreements, (iii) directed the Transaction Parties to take all actions under the agreements governing the activities and services of the Transaction Parties, including those actions that may be specified under the agreements governing the activities and services of the Transaction Parties, and even though such actions may not be individually identified in such agreements and (iv)
acknowledged that it does not consider any Transaction Party to be a fiduciary for purposes of ERISA and Section 4975 of the Code with respect to the assets of the Benefit Plan Investor.
(ii)With respect to the Class E and Class F Notes, (x) it is not a Benefit Plan Investor, and (y) if it is a governmental, church or non-U.S. that is subject to Similar Law or an entity any of the assets of which are (or are deemed for purposes of Similar Law to be) plan assets of any such governmental, church or non-U.S. plan, its acquisition and holding of such Note will not give rise to a violation of Similar Law.
(h)It acknowledges that the Indenture Trustee, the Issuer, the initial purchaser of the Notes, and their Affiliates, and others will rely exclusively upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and shall be under no duty or obligation to verify the accuracy of the same. If it is acquiring any Notes for the account of one or more qualified institutional buyers, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account.
(i)The Indenture Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among depositary participants or beneficial owners of interests in any Rule 144A Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(j)The Issuer has structured this Indenture and the Notes have been (or will be) issued with the intention that the Issuer will be classified a trust under Treasury Regulations Section 301.7701-4(c), and any person acquiring any direct or indirect interest in any Notes will be treated as an owner of the Issuer’s assets for purposes of, and taxable on such interest under, Code Section 671. By acceptance of a Note, each holder of a Note agrees to report consistently with such treatment for United States federal, state and local income tax purposes unless otherwise required by law.
Section II.9.Legending of Notes.
Except as permitted by the last two sentences of this Section 2.9, each Note shall bear the legends set forth in Exhibit A for each form of Note in substantially the form set forth therein.
Upon any transfer, exchange or replacement of Notes bearing such legend, or if a request is made to remove such legend on a Note, the Notes so issued shall bear such legend, or such legend shall not be removed, as the case may be, unless there is delivered to the Issuer and the Indenture Trustee such satisfactory evidence, which may include an Opinion of Counsel, that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A under the Securities Act, or another
available exemption under the Securities Act. Upon provision of such satisfactory evidence, the Indenture Trustee upon receipt of an Issuer Order shall authenticate and deliver a Note that does not bear such legend.
Section II.10.Replacement Notes.
(a)If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee and Issuer receive evidence to their satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless then, in the absence of notice to the Issuer, the Note Registrar and the Indenture Trustee that such Note has been acquired by a bona fide purchaser, and provided, that the requirements of Section 8-405 of the UCC (which generally permit the Issuer to impose reasonable requirements) are met, the Issuer shall execute and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note; provided, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within [***] shall be due and payable, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable without surrender thereof. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued (or in respect of which such payment was made) presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.
(b)Upon the issuance of any replacement Note under this Section 2.10, the Issuer may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee and its counsel) connected therewith.
(c)Every replacement Note issued pursuant to this Section 2.10 in replacement of any mutilated, destroyed, lost or stolen Note shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.
(d)The provisions of this Section 2.10 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section II.11.Notes Owned by Issuer.
In determining whether the Noteholders of the required Note Balance of Noteholders have concurred in any direction, waiver or consent, Notes beneficially owned by the Issuer or the Administrator or any Affiliate of the Issuer or the Administrator shall be considered as though they are not outstanding, except that for the purpose of determining whether the Indenture Trustee shall be protected in relying on any such direction, waiver or consent, only Notes of which a Trust Officer of the Indenture Trustee has actually received written notice of such ownership shall be so disregarded. Absent written notice to the Indenture Trustee of such ownership, the Indenture Trustee shall not be deemed to have actual knowledge of the identity of the individual beneficial owners of the Notes.
Section II.12.Temporary Notes.
(a)Pending the preparation of Definitive Notes issued under Section 2.18, the Issuer may prepare and the Indenture Trustee, upon receipt of an Issuer Order, shall authenticate and deliver temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes of like Class but may have variations that are not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.
(b)If temporary Notes are issued pursuant to Section 2.12(a), the Issuer will cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 8.2, without charge to the Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.
Section II.13.Cancellation.
The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee. The Note Registrar shall forward to the Indenture Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Indenture Trustee shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation. The Issuer may not issue new Notes to replace Notes that it has redeemed or paid or that have been delivered to the Indenture Trustee for cancellation. All cancelled Notes held by the Indenture Trustee shall be disposed of in accordance with the Indenture Trustee’s standard disposition procedures.
Section II.14.Payment of Principal and Interest.
(a)Upon the occurrence of an Indenture Event of Default unless waived by the Required Noteholders, amounts received in respect of the Collateral will be applied on each Payment Date to the payment of the Notes in accordance with the priority of payments set forth in Section 6.1(e) of this Indenture; provided, however, that on the Payment Date following a Sale amounts received in respect of the Collateral will be applied to the payment of the Notes in accordance with the priority of payments set forth in Section 9.6(d) of this Indenture.
(b)Interest on each Class of Notes will accrue during each Interest Accrual Period on the Note Balance of each such Class plus the Interest Shortfall and Basis Risk Shortfall Amount for such Class, each as of the preceding Payment Date, at a per annum rate equal to the Note Rate applicable to such Class, commencing on the Closing Date.
(c)The Indenture Trustee will pay the Interest Payment Amount applicable to each Class of Notes from funds available therefor in the Payment Account pro rata to the Holders of the Notes of such Class in accordance with the priority of payments set forth in Section 6.1(d) or Section 6.1(e), as applicable. The Interest Payment Amount will be payable on each Payment Date to the Holders of the Notes as of the close of business on the related Record Date and ending on the Final Stated Maturity Date (or any Payment Date on which the Notes shall be redeemed in whole). In the event that the Indenture Trustee receives funds in an amount less than the Interest Payment Amount, additional interest on the Interest Shortfall Amount shall accrue at the applicable Note Rate. The Interest Shortfall Amount shall be paid to the Noteholders in accordance with the priority of payments set forth in Section 6.1(d) or Section 6.1(e), as applicable. In the event that any Basis Risk Shortfall Amount exists for any Payment Date, additional interest on such Basis Risk Shortfall Amount shall accrue at the applicable Note Rate. The Basis Risk Shortfall Amount shall be paid to the Noteholders in accordance with the priority of payments set forth in Section 6.1(e).
(d)[Reserved].
(e)If the Issuer defaults in the payment of interest on any Note, such interest, to the extent paid on any date that is more than [***] after the applicable due date, shall cease to be payable to the Persons who were Noteholders on the applicable Record Date, and the Issuer shall pay the defaulted interest in any lawful manner, plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Noteholders on a subsequent special record date which date shall be [***] prior to the payment date, at the rate provided in this Indenture and in such Note. The Issuer shall fix or cause to be fixed each such special record date and payment date, and [***] before the special record date, the Issuer (or the Indenture Trustee, in the name of and at the expense of the Issuer) shall mail to Noteholders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
(f)Except as provided in the following sentence, the Person in whose name any Note is registered at the close of business on any Record Date with respect to a Payment Date for such Note shall be entitled to receive the principal and interest payable on such Payment
Date notwithstanding the cancellation of such Note upon any registration of transfer, exchange or substitution of such Note subsequent to such Record Date. Any interest payable at maturity shall be paid to the Person to whom the principal of such Note is payable.
Section II.15.Calculation of Interest; Determination of Benchmark.
(a)For purposes of calculating the Note Rates and the Interest Payment Amounts, U.S. Bank Trust Company, National Association is hereby appointed as, and hereby accepts such appointment and agrees to perform the duties of, the Note Calculation Agent. If the Note Calculation Agent is unable or unwilling to act as such, or if the Note Calculation Agent fails to determine either Note Rate and the applicable Interest Payment Amount for any Interest Accrual Period, the Issuer will promptly appoint as a replacement Note Calculation Agent a leading bank with a long-term issuer rating of at least “BBB” by DBRS (to the extent rated by DBRS) which is engaged in transactions in Eurodollar deposits in the international Eurodollar market. The Note Calculation Agent may not resign its duties without a successor having been duly appointed.
(b)On each Benchmark Determination Date, the Administrator shall determine the related Benchmark for the related Accrual Period and shall deliver written notice identifying such Benchmark to the Note Calculation Agent and the Indenture Trustee. The Note Calculation Agent and the Indenture Trustee shall be entitled to rely conclusively on such written notice and the Note Calculation Agent shall calculate distributions in accordance with Section 2.14 for the related Accrual Period based on such notice.
(i)The Administrator shall also have the right at any time, in its sole discretion, to make applicable SOFR Adjustment Conforming Changes and such changes shall not require the consent of any other party hereto or any Noteholder; provided, however, to the extent any such change is not administratively feasible for the Note Calculation Agent, as reasonably determined by the Note Calculation Agent, such change will not be effective without the Note Calculation Agent’s written consent which shall not be unreasonably withheld.
(ii)If the Administrator determines that a Benchmark Transition Event has occurred, it shall provide written notice thereof to the Note Calculation Agent and the Indenture Trustee, which notice shall also include the related Benchmark Replacement Date and the Unadjusted Benchmark Replacement and Benchmark Replacement Adjustment determined by the Administrator in accordance with the definitions thereof (the “Benchmark Transition Event Notice”). Following delivery of a Benchmark Transition Event Notice, the Unadjusted Benchmark Replacement and the Benchmark Replacement Adjustment specified in such Benchmark Transition Event Notice shall replace the then-current Benchmark, as applicable, for the next Accrual Period and for each Accrual Period thereafter (unless and until a subsequent Benchmark Transition Event is determined to have occurred and written notice thereof has been given by the Administrator to the Note Calculation Agent and the Indenture Trustee).
(iii)Notwithstanding the foregoing, if the initial Unadjusted Benchmark Replacement is any rate other than Term SOFR and the Administrator later determines that
Term SOFR can be determined, the Administrator may provide written notice thereof to the Note Calculation Agent, which notice shall state that Term SOFR shall be the new Unadjusted Benchmark Replacement and shall identify the Benchmark Replacement Adjustment to be used with respect to the next following Accrual Period and each Accrual Period thereafter.
(iv)If, on any date following receipt of a Benchmark Transition Event Notice, the Note Calculation Agent reasonably determines that the related Benchmark Replacement cannot be obtained, the Note Calculation Agent shall provide written notice thereof to the Administrator. Upon receipt of such notice, the Administrator shall use commercially reasonable efforts to identify a different Benchmark Replacement in accordance with the definition thereof, and if the Administrator is unable to do so, the benchmark for the related Accrual Period and each Accrual Period thereafter shall be the last rate calculated using the then-current Benchmark, as in effect for the immediately preceding Accrual Period.
(v)In connection with any determination made by the Administrator pursuant to this Section 2.15 (or pursuant to any capitalized term used in this Section 2.15 or in any such capitalized term), the Administrator shall have the right to make Benchmark Replacement Conforming Changes at any time. In addition, the Administrator will also have the right at any time, in its sole discretion, to make applicable SOFR Adjustment Conforming Changes. Any such changes shall not require the consent of any other party hereto or any Noteholder; provided, however, to the extent any such change is not administratively feasible for the Note Calculation Agent, as reasonably determined by the Note Calculation Agent, such change will not be effective without the Note Calculation Agent’s written consent which shall not be unreasonably withheld. The Administrator shall provide written notice of any such Benchmark Replacement Conforming Changes or SOFR Adjustment Conforming Changes to the parties hereto.
(vi)Any determination made by the Administrator with respect to a Benchmark Transition Event, Benchmark Replacement, Benchmark Replacement Adjustment, Benchmark Replacement Conforming Changes, SOFR Adjustment Conforming Changes or Corresponding Tenor and any calculation by the Note Calculation Agent of the applicable Benchmark with respect to a Payment Date, in each case, shall be final and binding on the Noteholders in the absence of manifest error.
(vii)Following receipt of a Benchmark Transition Event Notice, or written notice from the Administrator of a re-determination of a Benchmark Replacement, a Benchmark Replacement Adjustment or SOFR Adjustment Conforming Changes pursuant to this Section 2.15 or the definitions thereof and/or receipt of written notice from the Administrator of any Benchmark Replacement Conforming Changes or SOFR Adjustment Conforming Changes, the Indenture Trustee shall provide notice thereof to the Noteholders in the next monthly statement to be delivered pursuant to Section 4.1. For the avoidance of doubt, neither the Indenture Trustee nor the Note Calculation Agent shall be liable for failure to include information in the monthly statement if the Administrator fails to notify the Indenture Trustee and Note Calculation Agent in accordance with the preceding sentence. Notwithstanding anything herein or in the Master Repurchase Agreement to the contrary, upon the delivery of any such notice
and the inclusion of such information in the monthly statement, this Agreement and the Master Repurchase Agreement shall be deemed to have been amended as necessary to reflect such Unadjusted Benchmark Replacement, Benchmark Replacement Adjustment or SOFR Adjustment Conforming Changes and/or Benchmark Replacement Conforming Changes, as applicable, without satisfaction of any provision of Section 12.1 or 12.2 of this Agreement and without satisfaction of any amendment provision of the Master Repurchase Agreement.
(viii)Any determination, decision or election made by the Administrator pursuant to this Section 2.15 (or pursuant to any capitalized term used in this Section 2.15 or in any such capitalized term), 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, (x) shall be conclusive and binding on the Noteholders absent manifest error, (y) may be made in the Administrator’s sole discretion, and (z) notwithstanding anything to the contrary in this Agreement or the Master Repurchase Agreement, shall be effective without the consent of any other transaction party or any Noteholder. None of the Issuer, the Administrator, the Indenture Trustee, the Owner Trustee or the Note Calculation Agent shall have any liability to any Noteholder or any other party for any losses, claims, damages, liabilities, forfeitures, fines, penalties, costs, fees or expenses sustained in connection with or as a result of (x) any determination made by the Administrator pursuant to this Section 2.15 (or pursuant to any capitalized term used in this Section 2.15 or in any such capitalized term) (including, without limitation, the determination to refrain from taking any action), or (y) any failure or delay of any party in performing its duties under this Agreement or any other document as a result the unavailability of any applicable rate, the unavailability of the methodology or conventions for calculations of any of the foregoing, or the failure or delay of any Person in making any determination hereunder, or delivering any direction, instruction, clarification, notice or information requested or contemplated by the terms of this Agreement, and each Noteholder, by its acceptance of a Note or a beneficial interest in a Note, shall be deemed to waive and release any and all claims against the Issuer, the Administrator, the Indenture Trustee, the Owner Trustee and the Note Calculation Agent relating to any such determination.
(ix)None of the Indenture Trustee, Note Calculation Agent, or Owner Trustee will be liable for any inability, failure or delay on its part to perform any of its duties set forth in the Program Agreements as a result of the unavailability of the Term SOFR Rate (or other applicable benchmark) and absence of a designated replacement benchmark, including as a result of any inability, delay, error or inaccuracy on the part of any other transaction party, including without limitation the Administrator, in providing any direction, instruction, notice or information required or contemplated by the terms of the Program Agreements and reasonably required for the performance of such duties.
(x)None of the Administrator, the Indenture Trustee, the Note Calculation Agent, or the Owner Trustee will be responsible or liable to any Noteholder for any losses, claims, damages, liabilities, forfeitures, fines, penalties, costs, fees or expenses (including attorneys’ fees) sustained by any Noteholder resulting from the Administrator’s adoption of a
Benchmark Replacement or any related actions taken as described herein provided that the Administrator will be liable for any such losses resulting from the gross negligence, bad faith or willful misconduct of the Administrator.
(xi)In no event will the Indenture Trustee, the Note Calculation Agent or the Owner Trustee be responsible or liable to Noteholders for any losses, claims, damages, liabilities, forfeitures, fines, penalties, costs, fees or expenses (including attorneys’ fees) sustained by Noteholders resulting from the Administrator’s identification of a Benchmark Replacement.
(xii)Neither the Indenture Trustee nor the Note Calculation Agent will be obligated to determine the Term SOFR Rate or the Note Rate after a Benchmark Replacement has been selected by the Administrator. [***] to each Interest Accrual Period following a Benchmark Replacement, the Administrator will notify the Note Calculation Agent and the Indenture Trustee in writing of the related Note Rate.
(xiii)In connection with each Purchased Mortgage Loan, security or other obligation of the Trust Estate that bears interest based on SOFR or Term SOFR (or any other applicable benchmark), the Administrator shall be obligated to, or to the extent applicable shall be obligated to cause the Servicer to, (i) monitor the status of SOFR, Term SOFR, or other applicable benchmark, (ii) determine whether a substitute index should or could be selected, (iii) determine the selection of any such substitute index and (iv) exercise any right related to the foregoing on behalf of the Trust Estate, the Certificateholders, the Noteholders or any other person.
Section II.16.Book-Entry Notes.
(a)For each Class of Notes to be issued in registered form, the Issuer shall duly execute the Notes, and the Indenture Trustee shall, in accordance with Section 2.3, authenticate and deliver initially one or more Rule 144A Global Notes that (a) shall be registered on the Note Register in the name of the Clearing Agency or the Clearing Agency’s nominee, and (b) shall bear additional legends substantially to the following effect:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. (“CEDE”) OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST HEREIN.
So long as the Clearing Agency or its nominee is the registered owner or holder of a Rule 144A Global Note, the Clearing Agency or its nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Rule 144A Global Note for purposes of this Indenture and such Notes. Members of, or participants in, the Clearing Agency shall have no rights under this Indenture with respect to any Rule 144A Global Note held on their behalf by the Clearing Agency, and the Clearing Agency may be treated by the Issuer, the Indenture Trustee and any agent of such entities as the absolute owner of such Rule 144A Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Indenture Trustee and any agent of such entities from giving effect to any written certification, proxy or other authorization furnished by the Clearing Agency or impair, as between the Clearing Agency and its agent members, the operation of customary practices governing the exercise of the rights of a holder of any Note. Account holders or participants in Euroclear, Clearstream or any other Clearing Agency designated by the Issuer, shall have no rights under this Indenture with respect to such Rule 144A Global Note, and the registered holder may be treated by the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee as the owner of such Rule 144A Global Note for all purposes whatsoever.
(b)Subject to Section 2.8(g), the provisions of the “Operating Procedures of the Euroclear System” and the “Terms and Conditions Governing Use of Euroclear”, the “Management Regulations” and “Instructions to Participants” of Clearstream and the operating procedures of any other Clearing Agency designated by the Issuer shall be applicable to the Rule 144A Global Note insofar as interests in a Rule 144A Global Note are held by the agent members of Euroclear, Clearstream or such other Clearing Agency designated by the Issuer. The procedures described in this paragraph, to the extent relating to actions to be taken with respect to any Rule 144A Global Note shall be the “Applicable Procedures” for such actions.
(c)Title to the Notes shall pass only by registration in the Note Register maintained by the Note Registrar pursuant to Section 2.8.
(d)Any typewritten Note or Notes representing Book-Entry Notes shall provide that they represent the aggregate or a specified amount of outstanding Notes from time to time endorsed thereon and may also provide that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced to reflect exchanges. Any endorsement of a typewritten Note or Notes representing Book-Entry Notes to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Note Owners represented thereby, shall be made in such manner and by such Person or Persons as shall be specified therein or in the Issuer Order to be delivered to the Indenture Trustee pursuant to Section 2.3. Subject to the provisions of Section 2.4, the Indenture Trustee shall deliver and redeliver any typewritten Note or Notes representing Book-Entry Notes in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Issuer Order. Any instructions by the Issuer with respect to endorsement or delivery or redelivery of a typewritten Note or Notes representing the Book-Entry Notes shall be in writing but need not comply with Section 13.3 and need not be accompanied by an Opinion of Counsel.
(e)Unless and until Definitive Notes have been issued to Note Owners pursuant to Section 2.18, the provisions of this Section 2.16 shall be in full force and effect;
(i)the Indenture Trustee and the Note Registrar and the Issuer may deal with the Clearing Agency and the Clearing Agency Participants for all purposes of this Indenture (including the making of payments on the Notes and the giving of instructions or directions hereunder) as the authorized representatives of the Note Owners;
(ii)to the extent that the provisions of this Section 2.16 conflict with any other provisions of this Indenture, the provisions of this Section 2.16 shall control;
(iii)whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the outstanding principal amount of the Notes, the applicable Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or their related Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee; and
(iv)the rights of Note Owners shall be exercised only through the applicable Clearing Agency and their related Clearing Agency Participants and shall be limited to those established by law and agreements between such Note Owners and their related Clearing Agency and/or the Clearing Agency Participants. Unless and until Definitive Notes are issued pursuant to Section 2.18, the applicable Clearing Agencies will make book-entry transfers among their related Clearing Agency Participants and receive and transmit payments of principal and interest on the Notes to such Clearing Agency Participants.
Section II.17.Notices to Clearing Agency.
Whenever notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to Note Owners pursuant to Section 2.18, the Indenture Trustee and the Issuer shall give all such notices and communications specified herein to be given to Noteholders to the applicable Clearing Agency for distribution to the Note Owners.
Section II.18.Definitive Notes.
(a)Conditions for Issuance. Interests in a Rule 144A Global Note deposited with the Clearing Agency pursuant to Section 2.16 shall be transferred to the beneficial owners thereof in the form of Definitive Notes only if (x) the Clearing Agency notifies the Issuer that it is unwilling or unable to continue as depositary for such Rule 144A Global Note or at any time ceases to be a “clearing agency” registered under the Exchange Act, and a successor depositary so registered is not appointed by the Issuer within [***] of such notice or (y) the Issuer determines that the Rule 144A Global Note shall be exchangeable for Definitive Notes, in which case Definitive Notes shall be issuable or exchangeable only in respect of such Rule 144A
Global Notes or the category of Definitive Notes represented thereby. Definitive Notes shall be issued without coupons in amounts of U.S. $25,000 and integral multiples of U.S. $1, subject to compliance with all applicable legal and regulatory requirements.
(b)Issuance. If interests in any Rule 144A Global Note are to be transferred to the beneficial owners thereof in the form of Definitive Notes pursuant to this Section 2.18, such Rule 144A Global Note shall be surrendered by the Clearing Agency to the office or agency of the Transfer Agent located in St. Paul, Minnesota, to be so transferred, without charge. The Definitive Notes transferred pursuant to this Section 2.18 shall be executed, authenticated and delivered only in the denominations specified in paragraph (a) above, and Definitive Notes shall be registered in such names as the Clearing Agency shall direct in writing. The Transfer Agent shall have at least [***] from the date of its receipt of Definitive Notes and registration information to authenticate and deliver such Definitive Notes. Any Definitive Notes delivered in exchange for an interest in a Rule 144A Global Note shall, except as otherwise provided by Section 2.9, bear, and be subject to, the legend regarding transfer restrictions set forth in Section 2.9. The Issuer will promptly make available to the Transfer Agent a reasonable supply of Definitive Notes. The Issuer shall bear the costs and expenses of printing or preparing any Definitive Notes.
(c)Transfers. The transfer of interests in any transfers of any such Definitive Notes shall not be effected unless and until the Transfer Agent has received a certificate of the proposed transferees setting forth the representations and warranties of such transferee required to be made as set forth in Section 2.8(g).
Section II.19.CUSIP Numbers.
The Issuer in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Indenture Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Noteholders; provided, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Indenture Trustee of any change in the “CUSIP” numbers.
Section II.20.Certain Tax Matters.
It is the intention of the parties hereto that solely for United States federal income tax purposes, the Issuer, the Master Repurchase Agreement, the Notes and the Holders of the Notes will be treated as set forth in paragraphs (a) through (h) and to help assure such treatment agree to the limitations set forth in paragraphs (i) and (j):
(a)The Issuer will be classified as a trust under Treasury Regulations Section 301.7701-4(c) that holds the Master Repurchase Agreement and the Notes will represent undivided, beneficial interests in the Master Repurchase Agreement.
(b)The Master Repurchase Agreement, which will be an asset of the Issuer, will be the Indebtedness of the Seller.
(c)Each Holder of a Note will own for purposes of, and be taxable under, Section 671 of the Code on the portion of the Issuer’s assets that are represented by such Note and, to the fullest extent possible, directly own such portion for reporting purposes. In general, and as more fully described in paragraph (e) of this section 2.20, a Noteholder’s portion of the Issuer will consist of (i) an undivided, proportionate share of both the principal and part of the interest payable on the Master Repurchase Agreement and (ii) a disproportionate share of the remaining interest payable on the Master Repurchase Agreement (that is a disproportionate share of the interest remaining after the allocations described in clause (ii) of this paragraph (c)).
(d)The Seller shall be treated as the owner of the Payment Account.
(e)The Specified Margin for each of the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes shall be [***]%. With respect to Holders of each Class of Notes (other than the Holders of the Class A Notes), the Noteholders will also own separately from the Holders of each other Class of Notes their proportionate share of a “stripped coupon” representing interest payable under the Master Repurchase Agreement (together the “Debt”), calculated based on a notional amount equal to the aggregate outstanding principal amount of all the Notes on each Payment Date, and in an amount equal to a per annum rate of [***]% in the case of the Class B Notes, [***]% in the case of the Class C Notes, [***]% in the case of the Class D Notes, [***]% in the case of the Class E Notes, and [***]% in the case of the Class F Notes.
Each party hereto, including each Holder of a Note by virtue of acquiring such Note, agrees, except in the case of an Indenture Event of Default or a Repo Trigger Event, to report consistently with such treatment for purposes of all income and franchise taxes and further agrees not to take any action (or refrain from taking any action) within its control that would cause the Issuer to lose its status as a “trust” within the meaning of Section 301.7701-4(c) of the Treasury Regulations that is “owned” by the Holders for purposes of, and taxable under, Section 671 of the Code.
(f)If for any period, tax authorities determine that the Indenture creates an entity (or a portion of an entity) that should be classified as a taxable mortgage pool under Section 7701(i) of the Code, the Indenture Trustee shall prepare or cause to be prepared appropriate state and federal tax returns at the expense of the Holders of the Trust Certificates. The cost of any tax due shall be allocated among the classes pursuant to Section 6.4. In the event that the Indenture is determined to create an entity that should be classified as a partnership for federal income tax purposes, the Indenture Trustee shall be designated as the partnership representative and in such capacity shall, to the extent eligible, make the election under Section 6221(b) of the Code with respect to the Indenture and take any other action such as disclosures and notifications necessary to effectuate such election. If the election described in the preceding sentence is not available, to the extent applicable, the partnership representative shall make the
election under Section 6226(a) of the Code with respect to the Indenture and take any other action such as filings, disclosures and notifications necessary to effectuate such election.
(g)The Notes will be “pass-through certificates” for purposes of Treasury Regulations Section 1.871-14(d)(1).
(h)The Issuer will be a WHFIT that is a NMWHFIT subject to certain safe harbor rules.
(i)No Noteholder or party to the Program Agreements or any agent or employee (if any) of such parties or the Issuer is authorized to, or may, file IRS Form 8832 (or such alternative or successor form) to elect to have the Issuer be classified as a corporation for U.S. federal income tax purposes or otherwise to take any action that would result in the Issuer being classified as a corporation for U.S. federal, state or local income tax purposes.
(j)Neither the Indenture Trustee, or any person acting on behalf of the Indenture Trustee shall have the “power to vary” the investment of any Noteholder in the Issuer in a manner that would prevent the Issuer from qualifying as a trust for U.S. federal income tax purposes and any rights or powers granted in any Program Agreement and any other relevant provision of any Program Agreement shall be interpreted in a manner so as to ensure that such “power to vary” does not exist.
ARTICLE III.
SECURITY
Section III.1.Security Interest.
Pursuant to this Indenture, in order to secure the Issuer’s obligations hereunder, the Issuer has pledged, assigned, conveyed, delivered, transferred and set over to the Indenture Trustee, for the benefit of the Noteholders all of the Issuer’s right, title and interest in and to all of the Collateral.
Section III.2.Stamp, Other Similar Taxes and Filing Fees.
The Issuer shall indemnify and hold harmless the Indenture Trustee and each Noteholder from any present or future claim for liability for any stamp or other similar tax and any penalties or interest with respect thereto (including the costs of defending any claim or bringing any claim to enforce this Section 3.2), that may be assessed, levied or collected by any jurisdiction in connection with this Indenture or any Collateral. The Issuer shall pay, or reimburse the Indenture Trustee for, any and all amounts in respect of, all search, filing, recording and registration fees, taxes, excise taxes and other similar imposts that may be payable or determined to be payable in respect of the execution, delivery, performance and/or enforcement of this Indenture. The foregoing shall not, however, be deemed to create any obligation whatsoever of the Indenture Trustee to pay any such amounts.
Section III.3.Release of Collateral.
Each Purchased Asset that is repurchased by the Seller under the Master Repurchase Agreement and does not become subject to a new Transaction will be released from the lien of this Indenture against receipt of the consideration required to be delivered by the Seller for such a Purchased Asset under the Master Repurchase Agreement with notice to the Mortgage Loan Custodian. The Indenture Trustee shall notify the Collateral Agent upon receipt of such consideration into the Payment Account or Buyer’s Account, as applicable. So long as no Indenture Event of Default or Repo Trigger Event has occurred and is continuing, for each Purchased Asset that does not automatically become subject to a new Transaction, and upon receipt of such consideration and provided that no Indenture Event of Default or Repo Trigger Event shall otherwise have occurred and be continuing, such Purchased Asset shall be automatically released from the lien of this Indenture with notice to the Mortgage Loan Custodian.
ARTICLE IV.
REPORTS; MASTER SERVICING; MONTHLY DILIGENCE
Section IV.1.Agreement of the Indenture Trustee to Provide Reports and Instructions.
(a)Monthly Payment Date Statement.
On each Payment Determination Date, the Indenture Trustee shall prepare a Monthly Payment Date Statement and shall make available via its internet website presently located at “[***]” on a password protected basis, such Monthly Payment Date Statement to the Rating Agency, the Holders of the Notes and the Trust Certificates and the Administrator on each Payment Date setting forth the information described below, commencing the first calendar month following the issuance of the Notes. In connection with providing access to the Indenture Trustee’s website, the Indenture Trustee may require registration and the acceptance of a waiver and disclaimer. The Indenture Trustee shall prepare such reports based solely on information provided by the Servicer, and the Indenture Trustee shall have no liability for information provided by the Servicer or the Servicer’s failure to deliver such information on a timely basis. In addition, on each Payment Determination Date, the Indenture Trustee shall make the Asset Tape received by it from the Servicer available to the Rating Agency via its internet website and shall also forward such Asset Tape to the Administrator who shall make it available on the 17g-5 Website.
The Monthly Payment Date Statement shall set forth the following:
(1)the amount of payments made on such Payment Date to the holders of the Notes allocable to principal;
(2)the amount of payments made on such Payment Date to the holders of the Notes allocable to interest;
(3)the Monthly Aggregate Fee for such Payment Date and the aggregate fee for each component of such amount;
(4)the aggregate amount of Servicing Advances, if any, reimbursed to the Standby Servicer as servicer or any other successor servicer on such Payment Date;
(5)the Note Rate for each Class of Notes for such Payment Date and the Term SOFR Rate or the Benchmark Replacement (including the Unadjusted Benchmark Replacement and the Benchmark Replacement Adjustment used to calculate the Benchmark Replacement), as applicable;
(6)any Benchmark Replacement Conforming Changes;
(7)any SOFR Adjustment Conforming Changes;
(8)the aggregate amount of Extraordinary Expenses paid on such Payment Date (a description as to the nature thereof, will be provided upon request by a Noteholder) and the aggregate amount Extraordinary Expenses paid for such calendar year;
(9)the aggregate Realized Loss Amount, if any, incurred on such Payment Date and the allocation of such Realized Loss Amount to the Trust Certificates and each Class of Notes and any Subsequent Recovery Amount for such Payment Date;
(10)the Delinquent Loan Reviewer Fee, if any, paid on such Payment Date;
(11)with respect to the Purchased Mortgage Loans, information regarding delinquencies (using the Mortgage Bankers Association methodology), foreclosures and bankruptcies as of the last day of the calendar month preceding such Payment Date;
(12)the amount on deposit in the Reserve Account on such Payment Date;
(13)the Basis Risk Shortfall Amount, if any, for such Payment Date;
(14)if the Indenture Trustee has received a notice from the Seller that the Seller repurchased any Purchased Mortgage Loan during the calendar month preceding such Payment Date by reason of such Purchased Mortgage Loan failing to constitute a Qualified Mortgage, (x) the reason that such Purchased Mortgage Loan failed to constitute a Qualified Mortgage and (y) the Repurchase Price therefor; and
(15)an Eligible Mortgage Loan report in the form attached as Exhibit A to the Master Repurchase Agreement based on the Purchased Mortgage Loans as of the last day of the calendar month preceding such Payment Date.
Assistance in using the website can be obtained by calling the Indenture Trustee’s customer service desk at [***]. Persons who wish to or are unable to use the above website are entitled to have a paper copy mailed to them via first class mail by forwarding a request in writing to the Indenture Trustee at the Corporate Trust Office. The Indenture Trustee shall have the right to change the way such reports are distributed in order to make such distribution more convenient and/or more accessible to the above parties and to Noteholders. The Indenture Trustee shall provide timely and adequate notification to all of the above parties and to the Noteholders regarding any such change.
In addition, upon written request from a Noteholder, the Indenture Trustee shall provide to, or make available electronically to, such Noteholder a compliance certificate of the Seller setting forth the level of the Seller’s compliance with the financial covenants set forth in paragraphs 8(j) through (l) of Annex I to the Master Repurchase Agreement, as of the most recent reporting date of the Seller.
(b)Nightly Reports.
Pursuant to the terms of the Custodial Acknowledgment, on each Business Day, the Indenture Trustee shall electronically provide the Mortgage Loan Custodian with a schedule of Mortgage Loans (including Mortgage Loans underlying any Participation Certificates) that are Purchased Assets, and the Mortgage Loan Custodian shall, pursuant to the terms of the Custodial Acknowledgment, issue a trust receipt confirming that it is holding such Mortgage Loans and Mortgage Loan Files (as well as the Mortgage Loans and Mortgage Loan Files underlying the Participation Certificates) for the benefit of the Issuer. Pursuant to the terms hereto, on each Business Day, the Indenture Trustee shall electronically provide the Servicer with a schedule of Mortgage Loans that are Purchased Assets.
Section IV.2.Servicing.
(a)The Servicer shall service the Purchased Mortgage Loans in accordance with Accepted Servicing Practices (as defined in the Master Repurchase Agreement) and the Servicing Addendum. The Servicer shall not resign as servicer or transfer the servicing of any Purchased Mortgage Loan without the prior written consent of the Required Noteholders and the Standby Servicer. The Servicer shall not be permitted to resign unless a successor servicer has been appointed or the Standby Servicer has assumed the role of Servicer. If the Standby Servicer is unable or unwilling to act as successor Servicer, it may petition a court of competent jurisdiction to appoint such successor. The Indenture Trustee shall provide the Rating Agency with written notice upon any resignation of the Servicer pursuant to Section 4.3. The Servicer shall hold or cause to be held all escrow funds collected with respect to the Purchased Mortgage Loans in accounts (each of which shall be an Eligible Account) for the Holders of the Notes and shall apply the same for the purposes for which such funds were collected. The Servicer will maintain all Servicing Records not in the possession of the Mortgage Loan Custodian in good and complete condition in accordance with industry practices for assets similar to the Purchased Mortgage Loans and preserve them against loss. On each Business Day, the Indenture Trustee shall electronically provide the Servicer with a schedule of Mortgage Loans subject to the Master Repurchase Agreement. In connection with the foregoing, the Servicer hereby acknowledges and agrees that, the Servicer is servicing the Mortgage Loans subject to the Master Repurchase Agreement for the benefit of Issuer and the Indenture Trustee, on behalf of the Noteholders.
(b)Except as set forth below, the Servicer shall cause all Income received by it on account of the Purchased Mortgage Loans to be deposited in the Buyer’s Account [***] of receipt; provided, however, that, if the Standby Servicer is the Servicer, such amounts shall be deposited [***] of receipt. Notwithstanding the foregoing, following the occurrence and continuance of an Event of Default or a Repo Trigger Event and a Trust Officer of the Indenture Trustee receiving written notice or having actual knowledge of such an event, the Indenture Trustee will direct the Servicer to remit all Income into the Payment Account.
(c)The Payment Account shall only contain collections on the Purchased Assets subject to this Indenture. As further provided in Section 5.1 hereof, the Payment Account shall be held at U.S. Bank, National Association, in the name of and under the sole control of the Indenture Trustee. Neither the Seller nor the Servicer shall have any right to direct any disposition of funds from the Payment Account or to give any instructions of any kind to the
Indenture Trustee with respect to the Payment Account. Upon making any deposit into Payment Account, the Servicer shall provide the Indenture Trustee with the loan identification number and the principal and interest attributable to such Mortgage Loan which shall have been deposited into the Payment Account.
(d)The Servicer shall service the Purchased Mortgage Loans [***] (the “Servicing Term”) commencing as of the date of the related initial Purchase Date. Each such Servicing Term shall be deemed to be renewed or terminated. If such Servicing Term is not renewed (which is hereby deemed renewed unless (i) a Servicing Termination Event has occurred and is continuing or (ii) if the Seller is the Servicer, a Repo Trigger Event under the Master Repurchase Agreement has occurred and is continuing), the Servicer agrees that the Indenture Trustee may terminate the Servicer as servicer hereunder at will and the Servicer shall transfer the servicing as described below.
(e)On each Reporting Date, the Servicer shall furnish to the Issuer, the Rating Agency and the Indenture Trustee the Asset Tape for the Purchased Mortgage Loans as of the last day of the calendar month preceding the related Reporting Date and a Monthly Servicer Report for such Reporting Date; provided, that, with respect to the first Reporting Date, the Asset Tape and the Monthly Servicer Report for the Purchased Mortgage Loans will be as of the Closing Date. Included in such Asset Tape shall be the delinquency status of each Purchased Mortgage Loan without including in such determination any payment holidays or skip payments. If the Servicer should discover that, for any reason whatsoever, the Servicer or any entity responsible to the Servicer for managing or servicing any such Purchased Mortgage Loan has failed to perform fully the Servicer’s obligations under the Program Agreements or any of the obligations of such entities with respect to the Purchased Mortgage Loan, the Servicer shall promptly notify the Indenture Trustee and the Standby Servicer.
(f)Neither the Servicer nor those acting on the Servicer’s behalf shall amend, modify, or waive any term or condition of, or settle or compromise any claim in respect of, any item of the Purchased Mortgage Loans or any related rights or any of the Program Agreements without the prior written consent of Holders [***] of each Class of Notes, except if such action may be taken without the consent of any Holders if such action does not (i) affect the amount or timing of any payment of principal or interest payable with respect to a Purchased Mortgage Loan, extend its scheduled maturity date, modify its interest rate, or constitute a cancellation, reduction or discharge of its outstanding principal balance or (ii) materially and adversely affect the security afforded by the real property, furnishings, fixtures, or equipment securing such Asset.
(g)The Indenture Trustee is not responsible for the Servicer’s performance of its obligations under this Indenture, the Servicer is not an agent of the Indenture Trustee, and under no circumstances shall the Indenture Trustee be liable for any action or inaction of the Servicer.
Section IV.3.Termination of Servicing.
(a)The Indenture Trustee shall be entitled, by written notice to the Servicer, to effect termination of the Servicer’s servicing rights and obligations respecting the Purchased Mortgage Loans in the event any of the following circumstances or events (“Servicing Termination Events”) occur and are continuing:
(i)failure of the Servicer to make any deposits or remittances as required under the terms of this Indenture which is not cured [***];
(ii)failure of the Servicer to perform, observe, or comply with any other material term, condition, or agreement applicable to the Servicer under this Indenture, which is not cured [***];
(iii)any case, proceeding, petition or action shall be commenced or filed, without the Servicer’s application or consent, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment or relief of debts of the Servicer, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for the Servicer or all or substantially all of the Servicer’s assets, or any assignment for the benefit of the creditors of the Servicer, or any similar case, proceeding, petition or action with respect to the Servicer under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts shall be commenced or filed against the Servicer, and such case, proceeding, petition or action shall continue undismissed, or unstayed and in effect, for a period of [***]; or an order for relief in respect of the Servicer shall be entered in an involuntary case under the Bankruptcy Code or other similar laws now or hereafter in effect;
(iv)the Servicer shall commence or file a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect (including, without limitation, under Section 301 of the Bankruptcy Code), or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for, the Servicer or for substantially all of its property, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or its board of directors or managers shall vote to implement any of the foregoing; or
(v)if the Servicer is the Seller or an Affiliate of the Seller, an Event of Default under the Master Repurchase Agreement has occurred and is continuing.
(b)Upon the receipt of written notice by a Trust Officer of the Indenture Trustee from the majority Holders of the most senior Class of Notes which contains a direction to terminate the Servicer due to the occurrence and continuance of a Servicing Termination Event, the Indenture Trustee shall appoint a successor servicer as set forth herein.
(c)If an Indenture Event of Default has occurred and is continuing or a Repo Trigger Event has occurred, and at the same time, a servicing term is not renewed, the Servicer is terminated by the Indenture Trustee or a Servicing Termination Event has occurred, the Indenture Trustee, with written notice or upon actual knowledge of a Trust Officer of the Indenture Trustee of such Indenture Event of Default, shall appoint a successor servicer for the Servicer being terminated. If, within [***] of the date on which such obligation is incurred, the Indenture Trustee has not appointed a successor servicer, the Standby Servicer will become the successor servicer; provided that the Standby Servicer shall not be required to become the successor servicer if becoming successor servicer would be prohibited by law, which shall be evidenced by an opinion of counsel. The successor servicer will have [***] from the date of appointment to complete the transfer of servicing and will not be liable to the extent the prior Servicer does not deliver required documentation or accurate data necessary to effect such transfer. Any expenses incurred as a result of transferring servicing shall be paid by the predecessor Servicer. Such successor servicer will be authorized and empowered, as attorney-in-fact or otherwise, to execute and deliver, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Purchased Mortgage Loans serviced by the Servicer and related documents, or otherwise. The terminated Servicer will be required to cooperate in transferring the servicing of the Purchased Mortgage Loans serviced by it to the successor servicer pursuant to the terms set forth in Section 4 hereto and the Servicing Addendum. On and after the completion of the transition of servicing, the successor servicer will be the successor in all respects to the terminated Servicer in its capacity as Servicer herein and the transactions set forth or provided for herein, and all the responsibilities, duties and liabilities relating thereto and arising thereafter with respect to servicing the related Purchased Mortgage Loans will be assumed by such successor servicer (subject to such successor servicer receiving complete and accurate data from the terminated Servicer).
(d)Notwithstanding anything in this Agreement to the contrary, a successor servicer shall not be responsible or liable for the servicing activities of any terminated Servicer, including for any unlawful act or omission, breach, negligence, fraud, willful misconduct or bad faith of the Servicer, including (i) no liability with respect to any obligation that was required to be performed by the predecessor Servicer prior to the date that the successor becomes the successor servicer or any claim of a third party based on any alleged action or inaction of the predecessor Servicer, (ii) no obligation to perform any repurchase or advancing obligations, if any, of the terminated Servicer, (iii) no obligation to pay any taxes required to be paid by the terminated Servicer, (iv) no obligation to pay any of the fees and expenses of any other party to this Indenture and (v) no liability or obligation with respect to any indemnification obligations of any prior Servicer.
(e)If the Standby Servicer becomes the successor servicer with respect to the Purchased Mortgage Loans or otherwise appoints a successor servicer, such successor servicer will be entitled to a monthly fee (the “Monthly Servicing Fee”), payable from amounts received in respect of the Purchased Mortgage Loans serviced by such successor servicer equal to
[***]and (ii) the beginning unpaid principal balance of the Purchased Mortgage Loan on the first day of the month prior to such month. As additional servicing compensation, a successor servicer will generally be entitled to retain (a) all servicing related fees, including fees collected in connection with assumptions, modification, late payment charges and other similar amounts to the extent collected from the borrower and (b) any investment earnings on funds held in the escrow accounts on behalf of any borrower.
(f)Notwithstanding anything to the contrary set forth in this Indenture or in any Program Agreement, if the Standby Servicer is acting as successor servicer pursuant to this Indenture, it shall have no duty as Indenture Trustee or as successor servicer to (i) monitor or determine whether a substitute index should or could be selected with respect to any adjustable-rate Purchased Mortgage Loan following a Benchmark Transition Event, (ii) determine any substitute index with respect to any adjustable-rate Purchased Mortgage Loan or (iii) exercise any right related to the foregoing on behalf of the Issuer, the Noteholders or any other person.
(g)The relationship of the Standby Servicer (and of any successor to the Standby Servicer as Standby Servicer under this Agreement) to the Issuer under this Agreement is intended by the parties to be that of an independent contractor and not that of a joint venturer, partner or agent. Other than the duties specifically set forth in this Indenture, the Standby Servicer shall have no obligations under this Indenture, including, without limitation, any obligation to supervise, verify, monitor or administer the performance of the Servicer. The Standby Servicer shall have no liability for any actions taken or omitted by any other Servicer.
(h)The Standby Servicer hereby represents and warrants to the Indenture Trustee, the Issuer and the Noteholders that:
(i)The Standby Servicer has, and at all times will have, and each of the employees that it will use to provide and perform the services required of a Servicer by this Indenture, has and will have, the necessary capacity, knowledge, skills, experience, qualifications, rights and resources to provide and perform such services in accordance with this Indenture.
(ii)The Standby Servicer is a national banking association duly organized and validly existing under the laws of United States; the Standby Servicer has the full corporate power and authority to execute and deliver this Indenture and to perform in accordance herewith; the execution, delivery and performance of this Indenture by the Standby Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Indenture evidences the valid, binding and enforceable obligation of the Standby Servicer to make this Indenture valid and binding upon the Standby Servicer in accordance with its terms, subject only to bankruptcy, reorganization, insolvency and other laws affecting the enforcement of creditor’s rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law);
(iii)Neither the execution and delivery of this Indenture, nor the fulfillment of or compliance with the terms and conditions of this Indenture, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Standby Servicer’s charter or by-laws;
(iv)There is no action, suit, proceeding, or investigation pending, or, to the knowledge of the Standby Servicer, threatened against the Standby Servicer which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Standby Servicer, or in any material impairment of the right or ability of the Standby Servicer to carry on its business substantially as now conducted, or of any action taken or to be taken in connection with the obligations of the Standby Servicer contemplated herein, or which would materially impair the ability of the Standby Servicer to perform under the terms of this Indenture; and
(v)No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Standby Servicer of or compliance by the Standby Servicer with this Indenture or the Mortgage Loans or the consummation of the transactions contemplated by this Indenture, or if required, such approval has been obtained prior to the Closing Date.
(i)All provisions affording benefits, protections, rights and indemnities of the Indenture Trustee shall apply mutatis mutandis to the Standby Servicer.
Section IV.4.Ongoing Diligence.
(a)On each Review Date, the Administrator on behalf of the Issuer is required to provide or cause to be provided to the Indenture Trustee and the Diligence Provider, an Asset Tape setting forth all Purchased Mortgage Loans subject to the Master Repurchase Agreement on such date of delivery. Within [***]of receipt of such Asset Tape, the Diligence Provider shall randomly select [***] of the Purchased Mortgage Loans (other than Wet Loans) listed thereon; provided, that the random selection of Purchased Mortgage Loans for review shall be limited to (i) Purchased Mortgage Loans acquired since the preceding Review Date and (ii) any Purchased Mortgage Loans not previously subject to a review by the Diligence Provider for purposes of this transaction, and the Administrator on behalf of the Issuer shall promptly provide (or shall cause to be provided) all data, files and information requested by the Diligence Provider to perform its review. Pursuant to the Monitoring Agreement, the Diligence Provider shall compare the Asset Tape received from the Issuer or the Administrator to the data, files and information received from the Issuer and provide the Indenture Trustee, the Issuer and the Seller with a diligence report (each, a “Diligence Report”) regarding (i) the compliance of such Purchased Mortgage Loans with the underwriting guidelines of the applicable Agency, (ii) the compliance of such Purchased Mortgage Loans with applicable federal, state and local laws, (iii) the integrity of the data regarding the Purchased Mortgage Loans, (iv) the validity of the appraisals, if applicable, with respect to such Purchased Mortgage Loans and (v) a comparison of the automated underwriting system (“AUS”) number found on the Asset Tape to the AUS number appearing in the credit file (which AUS number appearing in the credit file is generated by Fannie Mae or Freddie Mac, as applicable) provided to the Diligence Provider or, if such Purchased Mortgage Loan does not have an AUS number, a comparison of the Agency case number found on the
asset tape to the Agency case number appearing in the credit file (which Agency case number in the credit file is generated by FHA or VA, as applicable) provided to the Diligence Provider. An initial Diligence Report (each, an “Initial Diligence Report”) will be delivered by the Diligence Provider to the Indenture Trustee and the Seller no later than [***] following the delivery to the Diligence Provider of the mortgage files related to the Purchased Mortgage Loans to be reviewed. The final Diligence Report (each, a “Final Diligence Report”) will be delivered by the Diligence Provider to the Indenture Trustee and the Seller [***] the Diligence Provider shall prepare a summary of the findings contained in the Final Diligence Report (including, but not limited to, an identification of Purchased Mortgaged Loans with Level C or Level D Exceptions and a list of Purchased Mortgage Loans for which any exceptions identified by the Diligence Provider were successfully rebutted by the Seller). The Diligence Report will be based solely upon the information provided to the Diligence Provider by or on behalf of the Issuer. Each period beginning with the date on which the Diligence Provider selects the sample of Purchased Mortgage Loans to be reviewed and ending on the date of on which the Diligence Provider delivers its Final Diligence Report is referred to herein as a review period (the “Review Period”).
The Issuer, upon request, shall provide the Asset Tape to the Rating Agency [***] and shall also forward such Asset Tape to the Administrator who shall make it available on the 17g-5 Website.
(b)In the event any Level C Exception or Level D Exception is identified in an Initial Diligence Report, the Seller will have [***] to cure (or clear) such Level C Exceptions or Level D Exceptions with the Diligence Provider. To the extent that the Seller is unable to cure any Level C Exceptions within such [***] , the Diligence Provider will, [***], notify the Indenture Trustee of such failure in the related Final Diligence Report, and the Seller will be required to repurchase such Purchased Mortgage Loan for the applicable Repurchase Price [***] of such notification (to the extent such mortgage loan is still owned by the Issuer). Any Level D Exceptions identified in an Initial Diligence Report will be repurchased by the Seller within [***] of its receipt of such Initial Diligence Report (to the extent such mortgage loan is still owned by the Issuer). Notwithstanding the foregoing, to the extent that the Diligence Provider finds that any Purchased Mortgage Loan is in violation of the TILA RESPA Integrated Disclosure Rule (“TRID”), it shall notify the Seller and the Indenture Trustee of such failure in the related Diligence Report, and the Seller will be required to repurchase such Purchased Mortgage Loan for the applicable Repurchase Price within [***] of such notification.
To the extent that a Final Diligence Report for a Review Period identifies Level C Exceptions and/or Level D Exceptions which in the aggregate represent an amount greater than [***] of the Purchased Mortgage Loans reviewed, the Seller will be required to deposit additional Eligible Mortgage Loans and/or cash into the Margin Account as follows: (i) if the aggregate amount of Level C Exceptions and/or Level D Exceptions for such Review Period is greater than [***] of the Purchased Mortgage Loans reviewed but less than or equal to [***] of the Purchased Mortgage Loans reviewed, additional Eligible Mortgage Loans and/or cash equal to [***]% of the aggregate outstanding Purchase Price and (ii) if the aggregate amount of Level C Exceptions and/or Level D Exceptions for such Review Period is greater than [***] of the Purchased
Mortgage Loans reviewed, no further Eligible Mortgage Loans will be purchased pursuant to the Master Repurchase Agreement. A violation of TRID found by the Diligence Provider that constitutes a Level C Exception or a Level D Exception will not be included in the calculations set forth in the preceding sentence.
Additional Eligible Mortgage Loans or cash deposited into the Margin Account as described in the preceding paragraph are referred to herein as “Reserve Deposits.” Reserve Deposits may be released to the Seller in full or in part to the extent that the Level C Exceptions and/or Level D Exceptions for a preceding Review Period are reduced in the aggregate to below [***] of the Purchased Mortgage Loans reviewed. By way of example, if a Final Diligence Report for a Review Period included aggregate Level C Exceptions and Level D Exceptions with respect to [***] of the Purchased Mortgage Loans reviewed (which required the Seller to make a Reserve Deposit to the Margin Account in an amount equal to [***] of the aggregate outstanding Purchase Price as of such date), but a subsequent Final Diligence Report for a subsequent Review Period includes aggregate Level C Exceptions and Level D Exceptions with respect to [***] of the Purchased Mortgage Loans reviewed for such subsequent Review Period, then the Reserve Deposit would be eliminated as of such date and any additional Eligible Mortgage Loans and/or cash in excess of such amount may be released to the Seller. To the extent a Repo Event of Default has occurred and is continuing, any cash or collections from additional Eligible Mortgage Loans in the Reserve Deposit in the Margin Account will be remitted to the Payment Account and will be applied in accordance with the priority of payments with respect to the Notes.
The Diligence Provider’s valuation review of Purchased Mortgage Loans will be performed as set forth below and as further described in Exhibit A to the Monitoring Agreement.
With respect to the Diligence Provider’s valuation review of Purchased Mortgage Loans that are not FHA Streamline Mortgage Loans, VA IRRR Mortgage Loans or Mortgage Loans that are approved with a property inspection waiver, the Diligence Provider shall obtain a collateral desktop analysis or like product for each of such Purchased Mortgage Loans being reviewed. To the extent that the collateral desktop analysis or like product valuation for any such Purchased Mortgage Loan is [***] or more less than the appraised value for such Purchased Mortgage Loan, a field review shall be obtained by the Diligence Provider at the expense of the Seller.
With respect to the Diligence Provider’s valuation review of Purchased Mortgage Loans that are FHA Streamline Mortgage Loans or VA IRRR Mortgage Loans, the Diligence Provider will obtain an AVM for each such Purchased Mortgage Loan being reviewed and compare the Collateral Analytics value to that found on the AVM, or, if an AVM is not available for the related property, a BPO.
With respect to the Diligence Provider’s valuation review of Purchased Mortgage Loans that are approved with a property inspection waiver, the Diligence Provider will obtain an AVM for each such Purchased Mortgage Loan being reviewed (or, if an AVM is not available for the
related property, a BPO) and compare the AVM or BPO value, as applicable, to the AUS accepted value.
The Seller shall repurchase a Purchased Mortgage Loan with a Valuation Deficiency for the applicable Repurchase Price within [***].
With respect to the Diligence Provider’s data integrity review, to the extent that a Final Diligence Report indicates any data integrity deficiencies with respect to the Asset Tape, the Seller shall cure such deficiency in the Asset Tape (and provide such revised Asset Tape to the Diligence Provider), and if such data integrity deficiency causes the subject Mortgage Loan to no longer satisfy the requirements of an Eligible Mortgage Loan under the Master Repurchase Agreement, the Seller will be required to repurchase such Purchased Mortgage Loan for the applicable Repurchase Price within [***] of such notification.
With respect to the Diligence Provider’s review of AUS numbers and Agency case numbers, if a Final Diligence Report indicates that any Purchased Mortgage Loan does not have an AUS number or Agency case number on the Asset Tape that matches the AUS number or Agency case number, as applicable, the Seller will repurchase such Purchased Mortgage Loan for the applicable Repurchase Price within [***] of such notification.
The Seller will be obligated to repurchase any Purchased Mortgage Loan as described in this Section 4.4 pursuant to the terms of the Master Repurchase Agreement. In all cases described in this Section 4.4(b), if any Purchased Mortgage Loan requiring repurchase is no longer owned by the Issuer, no further action will be required of the Indenture Trustee.
(c)If (i) an Act of Insolvency with respect to the Diligence Provider occurs or (ii) if the Diligence Provider fails to perform its obligations when due under the Monitoring Agreement, provided that it has received timely and complete data files and information as required from the Issuer, then the Diligence Provider’s obligations pursuant to this Section 4.4 and under the Monitoring Agreement shall be automatically terminated for cause. The Administrator, on behalf of the Issuer, shall use its best efforts to promptly, and, if the termination occurs on or during the [***] prior to when the next Diligence Report is due, within [***] following such termination, hire a replacement due diligence provider at market price to perform the obligations of the Diligence Provider set forth in Sections 4.4(a), (b) and (c) hereof, on terms substantially similar to the terms hereof and in the Monitoring Agreement. The replacement diligence provider shall be a Qualified Successor Diligence Provider and shall be required to deliver its first Diligence Report on the same date that the terminated Diligence Provider was required to deliver such Diligence Report and in no event later than the [***]. If the replacement diligence provider does not deliver the Diligence Report on such date, the Issuer shall not purchase any Replacement Assets from the period when such Diligence Report was due until the date the Diligence Report is actually delivered.
(d)Upon written request and subject to the Noteholder executing a confidentiality agreement with the Diligence Provider, the Diligence Provider shall provide a Noteholder with access to redacted versions of the summary of the reports that are made
available by the Seller to the Rating Agency pursuant to Section 4.4(a) hereof. No borrower specific information or other information that would violate applicable privacy laws shall be included in any such report delivered to the Noteholder.
(e)Upon the occurrence and continuance of a Repo Event of Default, if at any time a Purchased Mortgage Loan is more than [***] , the Administrator on behalf of the Issuer shall hire a third party loan reviewer (other than the Diligence Provider) (the “Delinquent Loan Reviewer”) to review the representations, warranties and covenants made by the Seller with respect to such Purchased Mortgage Loans pursuant to the Master Repurchase Agreement on terms substantially similar to the terms of the Monitoring Agreement; provided, however, that, the Required Noteholders may waive the requirement to appoint such Delinquent Loan Reviewer in writing by providing written notice of such waiver to the Issuer and Indenture Trustee. The Administrator on behalf of the Issuer shall cause the Delinquent Loan Reviewer to deliver a report of its findings (which includes loan level detail) within [***] of the commencement of its review. If such report indicates a breach of any representation, warranty or covenant with respect to such Purchased Mortgage Loan, upon a Trust Officer of the Indenture Trustee receiving written notice or actual knowledge of such breach, the Indenture Trustee shall promptly notify the Seller of such breach and request that the Seller repurchase such Purchased Mortgage Loan at the Repurchase Price. On each Payment Date, the Delinquent Loan Reviewer shall receive the Delinquent Loan Reviewer Fee in accordance with Sections 6.1(e), as applicable and 9.6 hereof.
Section IV.5.Compliance with Rule 17g-5.
Except with respect to the Monthly Payment Date Statement, with respect to any document, notice or other information required pursuant to the Program Agreements to be sent by the Indenture Trustee to the Rating Agency, the Indenture Trustee agrees to provide any such document, notice or other information to the Administrator on behalf of the Issuer prior to delivering such document, notice or other information to the Rating Agency, for posting on the Issuer’s Rule 17g-5 compliant website related to this transaction (the “17g-5 Website”). The Issuer shall promptly post such material on the 17g-5 Website and confirm to the Indenture Trustee that any such document, notice or other information has been posted to the 17g-5 Website.
Section IV.6.Accounting and Reports to Internal Revenue Service and Others.
(a)The Indenture Trustee, on behalf of the Issuer, shall (a) maintain (or cause to be maintained) the books of the Issuer on a calendar year basis on the accrual method of accounting, (b) upon the request of the Administrator or a Noteholder, deliver to such Noteholder, as may be required by the Code and applicable Treasury Regulations or otherwise, such information as may be required to enable such Noteholder to prepare its federal income tax returns and (c) file such tax returns relating to the Issuer and make such elections as may from time to time be required or appropriate under any applicable state or federal statute or rule or regulation thereunder. The Indenture Trustee shall prepare (or cause to be prepared), and shall be solely responsible for the preparation of, all federal, New York State and New York City tax
and information returns and reports required to be filed by or in respect of the Issuer and the Indenture Trustee shall sign such returns, or any other information, statements or schedules, and file, on a timely basis, such returns and such of the above information, or any other information, statements or schedules, as may be required under applicable tax laws. In this regard, the Indenture Trustee shall, to the extent required to do so, prepare (or cause to be prepared) and furnish (or cause to be furnished) to each Noteholder and to the Internal Revenue Service and state and local taxing authorities, as applicable, such information, forms and reports as may be required by applicable law.
(b)The Indenture Trustee shall sign on behalf of the Issuer any and all tax returns of the Issuer unless applicable law requires otherwise.
ARTICLE V.
ACCOUNTS
Section V.1.Establishment of Accounts.
(a)The Securities Intermediary on behalf of the Indenture Trustee shall establish and maintain in the name of the Issuer for the benefit of the Noteholders a segregated account which is an Eligible Account, in its own name, bearing a designation clearly indicating that the funds deposited therein are held for the exclusive benefit of the Noteholders, and designated as the “[***]”. The Indenture Trustee, in accordance with the terms of this Indenture, shall have the exclusive control and sole right of withdrawal with respect to the Payment Account. All funds held in the Payment Account shall be held uninvested.
(b)The Securities Intermediary on behalf of the Indenture Trustee shall also establish and maintain in the name of the Issuer for the benefit of the Noteholders a segregated account which is an Eligible Account, in its own name, bearing a designation clearly indicating that the funds deposited therein are held for the exclusive benefit of the Noteholders, and designated as the “[***]” The Indenture Trustee, in accordance with the terms of this Indenture, shall have the exclusive control and sole right of withdrawal with respect to the Reserve Account. The Indenture Trustee shall deposit funds in the Reserve Account pursuant to the terms of Section 6.1(e) and Section 9.6. All funds held in the Reserve Account shall be held uninvested.
(c)In addition, the Indenture Trustee may establish and maintain one or more accounts and/or administrative sub-accounts to facilitate the proper allocation of payments in accordance with the terms of this Indenture. When the Indenture Trustee is required to make payments out of the Payment Account or the Reserve Account pursuant to the Indenture, the Securities Intermediary shall make such payments.
Section V.2.Deposits and Withdrawals from Accounts.
(a)During the Pre-Default Period, the Collateral Agent on behalf of the Indenture Trustee shall apply funds in the Buyer’s Account (i) to the purchase of Eligible Assets pursuant to Section 3 of the Master Repurchase Agreement, (ii) to the payment of Income to the Seller on each Repurchase Date and (iii) for the other purposes specified in the Master Repurchase Agreement. On each Repurchase Date, the Collateral Agent on behalf of the Indenture Trustee shall, upon receipt, deposit the Repurchase Price received from, or on behalf of, the Seller into the Buyer’s Account net of the aggregate Price Differential received on such date (which shall be deposited into the Payment Account). After the [***], any such Repurchase Price on deposit in the Buyer’s Account for a period of [***] and not used to purchase Replacement Assets shall be withdrawn by the Collateral Agent on behalf of the Indenture Trustee on the following Payment Date and deposited into the Payment Account prior to making
the payments set forth in Section 6.1(d). The Indenture Trustee shall cease to purchase Replacement Assets on a Termination Date.
(b)The Indenture Trustee shall, upon receipt thereof, deliver to the Securities Intermediary for deposit into the Payment Account any Price Differential, any Prepayment Amount and the principal portion of the Repurchase Price received on the Expiration Date.
(c)Following (i) the occurrence and continuance of an Indenture Event of Default or Repo Trigger Event and (ii) a Trust Officer of the Indenture Trustee receiving written notice or having actual knowledge of such an event, the Indenture Trustee shall direct the Servicer to remit all Income into the Payment Account for payment pursuant to Section 6.1(e).
(d)On each Payment Date, the Indenture Trustee shall apply amounts on deposit in the Payment Account in accordance with Section 6.1(d) or Section 6.1(e), as applicable.
Section V.3.Important Information about Procedures for Opening a New Account.
To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust, or other legal entity, the Indenture Trustee will ask for documentation to verify its formation and existence as a legal entity. The Indenture Trustee may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.
Section V.4.Delivery of Purchased Assets.
Each Purchased Mortgage Loan shall be held by the Mortgage Loan Custodian on behalf of the Indenture Trustee, pursuant to the Mortgage Loan Custodial and Disbursement Agreement. The Securities Intermediary shall credit all Purchased Assets which are Participation Certificates and pledged in accordance with this Indenture to the Payment Account established and maintained pursuant to Section 5.1.
Each time that a Participation Certificate is purchased by the Issuer pursuant to the Master Repurchase Agreement, the Administrator, on behalf of the Issuer, shall cause such Participation Certificate to be delivered in accordance with the applicable delivery requirements in the definition of “Delivery.” The security interest of the Indenture Trustee shall come into existence and continue in such Participation Certificate until repurchased by the Seller pursuant to the Master Repurchase Agreement.
Without limiting the foregoing, the Administrator, on behalf of the Issuer, will use its commercially reasonable efforts to direct the Securities Intermediary to take such different or additional action as may be necessary in order to maintain the perfection or priority of the
security interest in the event of any change in applicable law or regulation, including without limitation Articles 8 and 9 of the UCC.
ARTICLE VI.
PAYMENTS
Section VI.1.Payments in General.
(a)On each Payment Date and with respect to each Class of Notes entitled to a payment in accordance with Section 6.1(d) or Section 6.1(e), as applicable, the Indenture Trustee shall make payment of funds in the Payment Account for such Class to the Noteholders of record as of the related Record Date based on such Noteholder’s pro rata share of the aggregate Note Balance of the Notes of such Class; provided, that the final principal payment due on a Note shall only be paid to the Holder of a Note on due presentment of such Note for cancellation in accordance with the provisions of such Note.
(b)Unless otherwise specified by the Clearing Agency, amounts payable to a Noteholder pursuant to Section 6.1(d) or Section 6.1(e), as applicable, or Section 9.6 shall be payable by wire transfer of immediately available funds released by the Indenture Trustee from the Payment Account for credit to the account designated in writing by such Noteholder at least [***] prior to the relevant Payment Date or, if no such designation has been received, by first class mail to such Noteholder’s at its address of record with the Indenture Trustee.
(c)The Indenture Trustee shall promptly notify the Seller as to the amount of any accrued and unpaid expenses or indemnity amounts owing under the Program Agreements to the Indenture Trustee, the Owner Trustee, the Standby Servicer and the Collateral Agent including any Extraordinary Expenses. In addition, [***], the Indenture Trustee shall notify the Seller of the Interest Coverage Amount (assuming for purposes of this calculation that all Price Differential amounts due on the Remittance Date are received from the Seller), if any, on such Remittance Date.
(d)On each Payment Date occurring during the Pre-Default Period, the Securities Intermediary on behalf of the Indenture Trustee shall apply the amount on deposit in the Payment Account on such date to make payments in the following order of priority:
(i)if the Standby Servicer or other successor servicer is the Servicer of the Purchased Mortgage Loans, to the Standby Servicer or such other successor servicer, reimbursement for any unreimbursed advances, including transfer costs in the event such costs have not been paid by the predecessor Servicer, fees and expenses with respect to the Purchased Mortgage Loans or the related Mortgaged Properties and the earned and unpaid Monthly Servicing Fee for such Payment Date;
(ii)on a pro rata basis to the Indenture Trustee, the Collateral Agent, the Owner Trustee, the Note Calculation Agent, the Administrator, the Standby Servicer and the Diligence Provider, based on the amounts due to each such party, the earned and
unpaid Monthly Indenture Trustee Fee, Monthly Collateral Agent Fee, Owner Trustee Fee, Administrator Fee, Standby Servicing Fee and Review Fee, if any, for such Payment Date, as applicable;
(iii)on a pro rata basis to the Indenture Trustee, the Standby Servicer, the Owner Trustee, the Note Calculation Agent and the Collateral Agent, any Extraordinary Expenses due and payable to such party, to the extent not previously paid; provided that, Extraordinary Expenses will in no event exceed the Extraordinary Expense Cap; provided, further, that $[***]of the Extraordinary Expense Cap will be allocated to reimbursable expenses of the Indenture Trustee, the Standby Servicer, the Note Calculation Agent and the Collateral Agent and $[***] of the Extraordinary Expense Cap will be allocated to reimbursable expenses of the Owner Trustee (and on the Payment Date occurring in December of such calendar year, each such party shall have the right to reimbursement from any unused portion of the Extraordinary Expense Cap allocated to another party to the extent that the Extraordinary Expenses reimbursable to such party exceed the related capped amount at the end of such calendar year) (the aggregate amount, if any, owing to such parties but unpaid under this clause (iii) due to the foregoing limitations being the “Remaining Expenses”);
(iv)if sufficient funds remain in the Payment Account to pay in full the Securities Monthly Payment Amount and any Remaining Expenses, then the following amounts shall be paid without priority:
(A)on a pro rata basis to each of the Indenture Trustee, the Owner Trustee, the Standby Servicer, the Note Calculation Agent and the Collateral Agent, the portion of the Remaining Expenses, if any, owed to such party; and
(B)to the Holders of each class of Notes, the Interest Payment Amount and Required Principal Payment, if any, in respect of such Class (provided that such Required Principal Payment shall not reduce the Note Balance of such Class of Notes below zero);
(v)if insufficient funds remain in the Payment Account to pay in full the Securities Monthly Payment Amount and any Remaining Expenses, then payments shall be made in the following priority (provided that any payments of principal in reduction of the Note Balance of each Class of Notes pursuant to clause (B), (D), (F), (H), (J) or (L) below will be made on a pro rata basis based on the respective Note Balances):
(A) to the Holders of the Class A Notes, the Interest Payment Amount for the Class A Notes for such Payment Date;
(B)to the Holders of the Class A Notes, the Required Principal Payment for such Payment Date, in reduction of the Note Balance of the Class A Notes, until the Note Balance thereof has been reduced to zero;
(C)to the Holders of the Class B Notes, the Interest Payment Amount for the Class B Notes for such Payment Date;
(D)to the Holders of the Class B Notes, the Required Principal Payment for such Payment Date, in reduction of the Note Balance of the Class B Notes, until the Note Balance thereof has been reduced to zero;
(E)to the Holders of the Class C Notes, the Interest Payment Amount for the Class C Notes for such Payment Date;
(F)to the Holders of the Class C Notes, the Required Principal Payment for such Payment Date, in reduction of the Note Balance of the Class C Notes, until the Note Balance thereof has been reduced to zero;
(G)to the Holders of the Class D Notes, the Interest Payment Amount for the Class D Notes for such Payment Date;
(H)to the Holders of the Class D Notes, the Required Principal Payment for such Payment Date, in reduction of the Note Balance of the Class D Notes, until the Note Balance thereof has been reduced to zero;
(I)to the Holders of the Class E Notes, the Interest Payment Amount for the Class E Notes for such Payment Date;
(J)to the Holders of the Class E Notes, the Required Principal Payment for such Payment Date, in reduction of the Note Balance of the Class E Notes, until the Note Balance thereof has been reduced to zero;
(K)to the Holders of the Class F Notes, the Interest Payment Amount for the Class F Notes for such Payment Date;
(L)to the Holders of the Class F Notes, the Required Principal Payment for such Payment Date, in reduction of the Note Balance of the Class F Notes, until the Note Balance thereof has been reduced to zero; and
(M)on a pro rata basis, to the Indenture Trustee, the Owner Trustee, the Standby Servicer, the Note Calculation Agent and the Collateral Agent, any amounts owed to such parties but not paid due to the limitation in clause (iii) above; and
(vi)to, or at the direction of, the Holders of the Trust Certificates any remaining amounts.
On any Payment Date, each Holder of a Class of Notes and each holder of the Trust Certificates shall be entitled to its pro rata share of the Prepayment Amount or the Repurchase Price and any interest accrued thereon through the date of such payment.
(e)On each Payment Date occurring after the Pre-Default Period, other than the Payment Date following a Sale, the Securities Intermediary on behalf of the Indenture Trustee shall apply amounts on deposit in the Payment Account and the Reserve Account on such date to make payments in the following order of priority:
(i)to the Delinquent Loan Reviewer, the Delinquent Loan Reviewer Fee, if any, for such Payment Date;
(ii)if the Standby Servicer or other successor servicer is the Servicer of the Purchased Mortgage Loans, to the Standby Servicer or such other successor servicer, reimbursement for any unreimbursed advances and expenses with respect to the Purchased Mortgage Loans or the related Mortgaged Properties and the earned and unpaid Monthly Servicing Fee for such Payment Date;
(iii)on a pro rata basis to the Indenture Trustee, the Collateral Agent, the Mortgage Loan Custodian, the Owner Trustee, the Note Calculation Agent, the Administrator, the Standby Servicer and the Diligence Provider, based on the amounts due to each such party, the earned and unpaid Monthly Indenture Trustee Fee, Monthly Collateral Agent Fee, Mortgage Loan Custodial Fee, Owner Trustee Fee, Administrator Fee, Standby Servicing Fee and Review Fee, if any, for such Payment Date, as applicable;
(iv)on a pro rata basis, to the Indenture Trustee, the Standby Servicer, the Owner Trustee, the Note Calculation Agent, the Collateral Agent, and the Mortgage Loan Custodian, any Extraordinary Expenses due and payable to such party, to the extent not previously paid;
(v)if the Payment Date occurs during the Auction Period, to the Reserve Account, any collections received in respect of principal on the Purchased Mortgage Loans;
(vi)sequentially, to the Holders of the Class A, Class B, Class C, Class D and Class E Notes, in that order, the Interest Payment Amount for each such Class for such Payment Date;
(vii)to the Holders of the Class A Notes, in respect of principal, until the Note Balance of such Class of Notes has been reduced to zero;
(viii)to the Holders of the Class A Notes, any Basis Risk Shortfall Amount for such Class for such Payment Date;
(ix)to the Holders of the Class B Notes, in respect of principal, until the Note Balance of such Class of Notes has been reduced to zero;
(x)to the Holders of the Class B Notes, any Basis Risk Shortfall Amount for such Class for such Payment Date;
(xi)to the Holders of the Class C Notes, in respect of principal, until the Note Balance of such Class of Notes has been reduced to zero;
(xii)to the Holders of the Class C Notes, any Basis Risk Shortfall Amount for such Class for such Payment Date;
(xiii)to the Holders of the Class D Notes, in respect of principal, until the Note Balance of such Class of Notes has been reduced to zero;
(xiv)to the Holders of the Class D Notes, any Basis Risk Shortfall Amount for such Class for such Payment Date;
(xv)to the Holders of the Class E Notes, in respect of principal, until the Note Balance of such Class of Notes has been reduced to zero;
(xvi)to the Holders of the Class E Notes, any Basis Risk Shortfall Amount for such Class for such Payment Date;
(xvii)to the Holders of the Class F Notes, the Interest Payment Amount for such Class for such Payment Date;
(xviii)to the Holders of the Class F Notes, in respect of principal, until the Note Balance of such Class of Notes has been reduced to zero;
(xix)to the Holders of the Class F Notes, any Basis Risk Shortfall Amount for such Class for such Payment Date; and
(xx)to the Holders of the Trust Certificates any remaining amounts.
(f)The Indenture Trustee shall, upon receipt of an Issuer Order at such time as there are no Notes outstanding and all obligations of the Issuer hereunder have been satisfied, release the Collateral from the Lien of this Indenture.
Section VI.2.[Reserved].
Section VI.3.Annual Noteholders’ Tax Statement.
Upon request, and before March 31 of each calendar year, beginning with calendar year 2025, the Indenture Trustee shall furnish to each Person who at any time during the preceding calendar year was a Noteholder a statement prepared by the Issuer containing the information which is required to be contained in the Monthly Payment Date Statement with respect to each Class of Notes, aggregated for such calendar year or the applicable portion thereof during which such Person was a Noteholder, together with such other customary information as the Issuer deems necessary or desirable to enable the Noteholders to prepare their tax returns (each such statement, an “Annual Noteholders’ Tax Statement”). Such obligations of the Issuer to prepare and the Indenture Trustee to distribute the Annual Noteholders’ Tax Statement shall be deemed
to have been satisfied to the extent that substantially comparable information shall be provided by the Indenture Trustee pursuant to any requirements of the Code as from time to time in effect.
Section VI.4.Allocation of Losses.
On each Payment Date on and after the occurrence and continuance of an Indenture Event of Default or the occurrence of a Repo Trigger Event and prior to the sale of the Collateral pursuant to Section 9.6 hereof, and after all payments pursuant to Section 6.1(e) hereof for such Payment Date have been made, if the sum of the Outstanding Asset Balance on such date and all amounts on deposit in the Buyer’s Account, if any, and the Reserve Account is less than the aggregate Note Balance of all outstanding Notes (such balances determined after giving effect to all payments made on such Payment Date pursuant to Section 6.1(e)) (such shortfall, the “Realized Loss Amount”), then the Indenture Trustee shall allocate such Realized Loss Amount in the following order: first, the Note Balance of the Class F Notes, until the Note Balance thereof has been reduced to zero, second, the Note Balance of the Class E Notes, until the Note Balance thereof has been reduced to zero, third, the Note Balance of the Class D Notes, until the Note Balance thereof has been reduced to zero, fourth, the Note Balance of the Class C Notes, until the Note Balance thereof has been reduced to zero, fifth, the Note Balance of the Class B Notes, until the Note Balance thereof has been reduced to zero and sixth, the Note Balance of the Class A Notes, until the Note Balance thereof has been reduced to zero.
On each Payment Date on and after the occurrence and continuance of an Event of Default or an Indenture Event of Default or the occurrence of a Repo Trigger Event and prior to the sale of the Collateral pursuant to Section 9.6 hereof, and after all payments pursuant to Sections 6.1(e) hereof for such Payment Date have been made, if the sum of the Outstanding Asset Balance on such date and all amounts on deposit in the Buyer’s Account, if any, exceeds the sum of the Note Balances of all outstanding Notes (such balances determined after giving effect to all payments made on such Payment Date pursuant to Section 6.1(e)) (such excess, the “Subsequent Recovery Amount”), then the Indenture Trustee shall allocate such Subsequent Recovery Amount to increase the Note Balances of the Notes, after all payments pursuant to Section 6.1(e) hereof for such Payment Date have been made, in order of seniority, but not in excess of any Realized Loss Amount previously allocated to such Class of Notes.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer hereby represents and warrants to the Indenture Trustee, for the benefit of the Noteholders as of the date hereof (or such other date as is specified), that:
Section VII.1.Due Organization.
The Issuer is a statutory trust duly formed, validly existing and in good standing under the laws governing its creation and existence and has full statutory trust power and authority to own its property, to carry on its business as presently conducted, to enter into and perform its obligations under this Indenture and the other Program Agreements.
Section VII.2.No Conflicts.
The execution and delivery by the Issuer of this Indenture and the other Program Agreements do not conflict with or result in a breach of, or constitute a default under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Issuer or its properties or the certificate of trust of the Issuer or the Trust Agreement.
Section VII.3.No Consent Required.
The execution, delivery and performance by the Issuer of this Indenture and the other Program Agreements and the consummation of the transactions contemplated hereby and thereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other Governmental Authority or other Person, except such as has been obtained, given, effected or taken prior to the date hereof or as contemplated in Section 7.12.
Section VII.4.Binding Effect.
This Indenture, each other Program Agreement to which the Issuer is a party and each Note when executed and delivered in accordance with this Indenture, is a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally or by general equitable principles, whether considered in a proceeding at law or in equity, including without limitation (i) the possible unavailability of specific performance, injunctive relief or any other equitable remedy, (ii) concepts of materiality, reasonableness, good faith and fair dealing, and (iii) that certain remedial or procedural provisions contained in this Indenture may be limited or rendered unenforceable by applicable law, but such limitations do not make the remedies and procedures that are afforded to the Indenture Trustee inadequate for the practical realization of the substantive benefits purported to be provided by this Indenture).
Section VII.5.No Litigation Pending.
There are no actions, suits or proceedings pending or, to the knowledge of the Issuer, threatened against the Issuer, before or by any court, administrative agency, arbitrator or Governmental Authority (A) with respect to any of the transactions contemplated by this Indenture or any other Program Agreement or (B) with respect to any other matter which in the judgment of the Issuer will be determined adversely to the Issuer and will if determined adversely to the Issuer materially and adversely affect it or its business, assets, operations or condition, financial or otherwise, or adversely affect its ability to perform its obligations under this Indenture or any other Program Agreement.
Section VII.6.Tax Filings and Expenses.
The Issuer has filed all federal, state and local tax returns and all other tax returns which, to the knowledge of the Issuer, are required to be filed (whether informational returns or not), and has paid all taxes due, if any, pursuant to said returns or pursuant to any assessment received by the Issuer, except such taxes, if any, as are being contested in good faith and for which adequate reserves have been set aside on its books. The Issuer has paid all fees and expenses required to be paid by it in connection with the conduct of its business, the maintenance of its existence and its qualification as a foreign statutory trust authorized to do business in each state in which it is required to so qualify, except where the failure to pay any such fees and expenses is not reasonably likely to have a material adverse effect on the business, properties, assets or condition (financial or other) of the Issuer.
Section VII.7.Investment Company Act; Trust Indenture Act; Securities Act.
The Issuer is not, and is not controlled by, an “investment company” within the meaning of, and is not required to register as an “investment company” under, the Investment Company Act. It is not necessary in connection with the offer, issuance and sale of the Notes under the circumstances contemplated in this Indenture to register any security under the Securities Act or to qualify any indenture under the Trust Indenture Act.
Section VII.8.Regulations T, U and X.
The proceeds of the Notes will not be used to purchase or carry any “margin stock” (as defined or used in the regulations of the Board of Governors of the Federal Reserve System, including Regulations T, U and X thereof). The Issuer is not engaged in the business of extending credit for the purpose of purchasing or carrying any margin stock.
Section VII.9.Solvency.
Both before and after giving effect to the transactions contemplated by this Indenture and the other Program Agreements, the Issuer is solvent within the meaning of the Bankruptcy Code and the Issuer is not the subject of any voluntary or involuntary case or proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy or insolvency law, and no Event of Bankruptcy has occurred with respect to the Issuer.
Section VII.10.Subsidiary.
The Issuer shall not acquire or otherwise come to have one or more subsidiaries without the prior consent of the Indenture Trustee (on behalf of the Holders of the Notes).
Section VII.11.Security Interests.
(a)All Actions Taken. All action necessary to protect and perfect the Indenture Trustee’s security interest in the Collateral now in existence and hereafter acquired or created hereby has been duly and effectively taken.
(b)No Filings. The Issuer is not aware of (x) any financing statements against the Seller or the Issuer that include a description of collateral covering the Collateral, other than any such financing statement that has been terminated or will be released as to such Collateral upon application of the proceeds of the transfer to the Issuer or that has been filed to perfect the security interest of the Issuer pursuant to the Program Agreements, or (y) any judgment or tax lien filings against the Issuer.
(c)Valid Lien Created. This Indenture constitutes a valid and continuing Lien on the Collateral in favor of the Indenture Trustee on behalf of the Noteholders, which Lien is prior to all other Liens (other than Permitted Liens), and is enforceable as such against creditors of and purchasers from the Issuer in accordance with its terms, (except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally or by general equitable principles, whether considered in a proceeding at law or in equity, including without limitation (i) the possible unavailability of specific performance, injunctive relief or any other equitable remedy, (ii) concepts of materiality, reasonableness, good faith and fair dealing, and (iii) that certain remedial or procedural provisions contained in this Indenture may be limited or rendered unenforceable by applicable law, but such limitations do not make the remedies and procedures that are afforded to the Indenture Trustee inadequate for the practical realization of the substantive benefits purported to be provided by this Indenture).
(d)Perfection Representations. The Perfection Representations shall be part of this Indenture for all purposes under the Program Agreements.
(e)Principal Place of Business. The place where the Issuer’s records concerning the Collateral are kept is at: South Carolina. The Issuer’s “location” within the meaning of the UCC is and at all times has been the State of Delaware. The Issuer does not transact, and has not transacted, business under any other name.
(f)Authorizations. All authorizations in this Indenture for the Indenture Trustee to endorse checks, instruments and securities and to execute, deliver and file financing
statements, continuation statements, security agreements and other instruments with respect to the Collateral are powers coupled with an interest and are irrevocable.
Section VII.12.Reserved.
Section VII.13.Eligible Assets.
Based upon the representations of the Seller in the Master Repurchase Agreement, each Purchased Asset acquired by the Issuer is an Eligible Asset.
Section VII.14.Other Representations.
All representations and warranties of the Issuer made in each Program Agreement to which it is a party are true and correct and are repeated herein as though fully set forth herein.
Section VII.15.Special Purpose Entity.
The Issuer is a special purpose entity formed exclusively to enter into the Program Agreements and the transactions contemplated thereby or incident thereto.
Section VII.16.Compliance with ERISA.
The Issuer does not sponsor, contribute to, or maintain a “single employer plan” within the meaning of Section 4001(a)(15) of ERISA, and is not a member of a “controlled group” within the meaning of Section 4001(a)(14) of ERISA, any member of which sponsors, contributes to, or maintains a “single employer plan.”
ARTICLE VIII.
COVENANTS
Section VIII.1.Payment of Notes.
The Issuer shall pay the principal of (and premium, if any) and interest on the Notes pursuant to the provisions of this Indenture. Principal and interest shall be considered paid on the date due if the Indenture Trustee holds on that date money designated for and sufficient to pay all principal and interest then due.
Section VIII.2.Maintenance of Office or Agency.
The Issuer shall maintain an office or agency (which may be an office of the Indenture Trustee, Note Registrar or co registrar) where the Notes may be surrendered for registration of transfer or exchange, where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served, and where, at any time when the Issuer is obligated to make a payment of principal and premium upon the Notes, the Notes may be surrendered for payment. The Issuer will give prompt written notice to the Indenture Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Indenture Trustee.
The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Issuer will give prompt written notice to the Indenture Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
The Issuer hereby designates the Corporate Trust Office of the Indenture Trustee as one such office or agency of the Issuer.
Section VIII.3.Information.
The Issuer shall:
(a)promptly provide the Indenture Trustee (on behalf of the Holders of the Notes) and the Rating Agency with all financial and operational information with respect to the Program Agreements or the Issuer as the Indenture Trustee or any Rating Agency may reasonably request; and shall promptly provide the Rating Agency and the Indenture Trustee (on behalf of the Holders of the Notes) with all statements delivered under the Administration Agreement;
(b)provide the Rating Agency and the Indenture Trustee (on behalf of the Holders of the Notes) with any information that it may have with respect to an Indenture Event
of Default, Potential Indenture Event of Default, Repo Trigger Event, Repo Event of Default or any other default or event of default under any other agreement between the Issuer and any of the Seller, the Administrator, the Indenture Trustee or the Holders of the Notes as promptly as practicable after the Issuer becomes aware of the occurrence of such Potential Indenture Event of Default, Indenture Event of Default, Repo Trigger Event, Repo Event of Default or other default or event of default (but in no event more than [***] after becoming aware of such occurrence), together with an Officer’s Certificate of the Issuer setting forth the details thereof and any action with respect thereto taken or contemplated to be taken by the Issuer;
(c)promptly furnish to the Indenture Trustee (on behalf of the Holders of the Notes) after receipt thereof copies of all written communications received from the Rating Agency with respect to the affirmation or change in ratings of the Notes;
(d)promptly upon its knowledge thereof give written notice to the Indenture Trustee (on behalf of the Holders of the Notes) and the Rating Agency of the existence of any litigation against the Issuer;
(e)give prompt notice to the Indenture Trustee (on behalf of the holders of the Notes) and the Rating Agency of any material change to its organizational documents, including its certificate of trust; and
(f)provide, on or prior to April 30 of each year upon request of the Indenture Trustee, to the Indenture Trustee a certificate of the Issuer certifying, if true, that the ratings assigned by the Rating Agency in respect of any outstanding Notes have not been withdrawn or downgraded since the date hereof.
Delivery of such reports, information and documents to the Indenture Trustee under this section is for informational purposes only.
Section VIII.4.Payment of Obligations.
The Issuer shall pay and discharge in a timely manner in accordance with the terms of the Program Agreements, at or before maturity, all of its respective material obligations and liabilities, except where the same may be contested in good faith by appropriate proceedings.
Section VIII.5.Conduct of Business and Maintenance of Existence.
The Issuer shall maintain its existence as a statutory trust validly existing and in good standing under the laws of the State of Delaware and as a foreign statutory trust duly qualified under the laws of each state in which the failure to so qualify would have a material adverse effect on the business and operations of the Issuer.
Section VIII.6.Compliance with Laws.
The Issuer shall comply in all respects with all Requirements of Law and all applicable laws, ordinances, rules, regulations, and requirements of Governmental Authorities except where
the necessity of compliance therewith is contested in good faith by appropriate proceedings and where such noncompliance would not materially and adversely affect the condition, financial or otherwise, operations, performance, properties or prospects of the Issuer or its ability to carry out the transactions contemplated in this Indenture and each other Program Agreement; provided, that such noncompliance shall not result in a Lien (other than a Permitted Lien) on any assets of the Issuer.
Section VIII.7.Compliance with Program Agreements.
The Issuer shall perform and comply with each and every material obligation, covenant and agreement required to be performed or observed by it in or pursuant to this Indenture and each other Program Agreement to which it is a party and shall not take any action which would permit any party to have the right to refuse to perform any of its respective obligations under any Program Agreement.
Section VIII.8.[Reserved].
Section VIII.9.Notice of Material Proceedings.
Promptly upon becoming aware thereof, the Issuer shall give the Indenture Trustee (on behalf of the Holders of the Notes) and the Rating Agency written notice of the commencement or existence of any proceeding by or before any Governmental Authority against or affecting the Issuer which is reasonably likely to have a material adverse effect on the business, condition (financial or otherwise), results of operations, properties or performance of the Issuer or the ability of the Issuer to perform its obligations under this Indenture or under any other Program Agreement to which it is a party.
Section VIII.10.Further Requests.
The Issuer shall promptly furnish to the Indenture Trustee and the Rating Agency such other information as, and in such form as, the Indenture Trustee or the Rating Agency may reasonably request in connection with the transactions contemplated hereby.
Section VIII.11.Further Assurances.
The Issuer shall do such further acts and things, and execute and deliver to the Indenture Trustee and the Required Noteholders such additional assignments, agreements, powers and instruments, as the Required Noteholders reasonably determines to be necessary to carry into effect the purposes of this Indenture or the other Program Agreements or to better assure and confirm unto the Indenture Trustee, or the Noteholders their rights, powers and remedies hereunder, including, without limitation, the filing of any financing or continuation statements under the UCC in effect in any jurisdiction with respect to the liens and security interests granted hereby. The Issuer also hereby acknowledges that the Indenture Trustee has the right but not the obligation to file any such financing statement or continuation statement without the further authorization of the Issuer. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note, chattel paper or other instrument, such note, chattel paper or instrument shall be deemed to be held and immediately pledged and physically delivered to the Indenture Trustee hereunder, and shall, subject to the rights of any Person in whose favor a prior Lien has been perfected, be duly endorsed in a manner sufficient to grant the Indenture Trustee a perfected security interest in such documents. Without limiting the generality of the foregoing provisions of this Section 8.11, the Issuer shall take all actions that are required to maintain the security interest of the Indenture Trustee on behalf of the Noteholders in the Collateral pledged pursuant to this Indenture as a perfected security interest subject to no prior Liens, including, without limitation filing all UCC financing statements, continuation statements and amendments thereto necessary to achieve the foregoing.
The Issuer shall warrant and defend the Indenture Trustee’s right, title and interest in and to the Collateral and the income, distributions and proceeds thereof, for the benefit and on behalf of the Noteholders, against the claims and demands of all Persons whomsoever.
Section VIII.12.[Reserved].
Section VIII.13.Liens.
The Issuer shall not create, incur, assume or permit to exist any Lien upon any of its assets (including the Collateral), other than (i) Liens in favor of the Indenture Trustee for the benefit of the Noteholders and (ii) Permitted Liens.
Section VIII.14.Other Indebtedness.
The Issuer shall not (A) issue or sell any securities other than the Notes in accordance with the Program Agreements or (B) create, assume, incur, suffer to exist or otherwise become or remain liable in respect of any Indebtedness other than (i) Indebtedness hereunder and (ii) Indebtedness permitted under any other Program Agreement.
Section VIII.15.Sales of Assets.
The Issuer shall not sell, lease, transfer, liquidate or otherwise dispose of any assets, except as provided in the Program Agreements.
Section VIII.16.Capital Expenditures.
Except as permitted by the Program Agreements, the Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (both realty and personalty).
Section VIII.17.Dividends.
The Issuer shall not make any distributions to any holders of the Trust Certificates without the consent of the Indenture Trustee, acting at the direction of the Required Noteholders, except as provided or permitted under the Program Agreements.
Section VIII.18.Name; Principal Office.
The Issuer shall neither (a) change the location of its organization (within the meaning of the applicable UCC), (b) change its name, (c) change its identity nor (d) become bound as debtor under Section 9-203(d) of the UCC by a security agreement previously entered into by another Person, in each case, without prior written notice to the Indenture Trustee and the Administrator sufficient to allow the Administrator to make all filings (including filings of financing statements on form UCC-1) and recordings, and any other actions, necessary to maintain the perfection of the interest of the Indenture Trustee on behalf of the Noteholders in the Collateral pursuant to this Indenture. In the event that the Issuer desires to take any of the steps set forth in the preceding sentence, the Issuer shall make any required filings and prior to actually taking any such steps the Issuer shall deliver to the Indenture Trustee (i) an Officer’s Certificate and an Opinion of Counsel confirming that all required filings have been made to continue the perfected interest of the Indenture Trustee on behalf of the Noteholders in the Collateral in respect of the new name of the Issuer or such other change and (ii) copies of all such required filings with the filing information duly noted thereon by the office in which such filings were made.
Section VIII.19.Organizational Documents.
The Issuer shall not amend any of its organizational documents, including its certificate of trust or the Trust Agreement, except in accordance with the terms of the Trust Agreement.
Section VIII.20.[Reserved].
Section VIII.21.No Other Agreements.
The Issuer shall not enter into or be a party to any agreement or instrument other than any Program Agreement, agreements entered into in the ordinary course of its business, or any documents and agreements incidental thereto.
Section VIII.22.Other Business.
The Issuer shall not engage in any business or enterprise or enter into any transaction other than (i) as contemplated or permitted by the Program Agreements or (ii) activities related to or incidental thereto.
Section VIII.23.Rule 144A Information Requirement.
For so long as any of the Notes remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Issuer covenants and agrees that it shall, during any period in which it is not subject to Section 13 or 5(d) under the Exchange Act, make available to any Noteholder in connection with any sale thereof and any prospective purchaser of Notes from such Noteholder in each case upon request, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act and the adopting release thereof.
Section VIII.24.Use of Proceeds of Notes.
The Issuer shall use the proceeds of Notes solely for one or more of the following purposes: (a) to pay the Issuer’s obligations when due, in accordance with this Indenture; (b) to acquire Eligible Assets from the Seller.
Section VIII.25.Non Petition Agreement.
The Issuer shall not enter into any Program Agreements or any other contract incidental or related to any Program Agreement, unless each other party under such contract covenants and agrees that it shall not, prior to the date which is one year and one day (or if longer, the applicable preference period then in effect) after the payment in full of the latest maturing Note, acquiesce, petition or otherwise, directly or indirectly, invoke or cause the Issuer to invoke the process of any Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property or ordering the winding up or liquidation of the affairs of the Issuer. This Section 8.25 shall survive the termination of this Indenture.
Section VIII.26.Mergers.
The Issuer will not merge or consolidate with or into any other Person.
ARTICLE IX.
INDENTURE EVENTS OF DEFAULT AND REMEDIES
Section IX.1.Indenture Events of Default.
If any one of the following events shall occur (each, an “Indenture Event of Default”):
(a)the Interest Payment Amount due on the Notes shall not have been paid on any Payment Date and such non-payment shall have continued for a period [***];
(b)the Issuer shall have become an “investment company” or shall have become under the “control” of an “investment company” under the Investment Company Act of 1940, as amended;
(c)any Notes shall not have been paid in full on the Final Stated Maturity Date;
(d)the Indenture Trustee ceases to have a first priority perfected security over the Collateral;
(e)the Issuer shall be in breach of any of its representations and warranties in any Program Agreement or shall fail to comply with its agreements and covenants in, or any other applicable provisions of, any Program Agreement, and such breach or failure to so comply materially and adversely affects the interests of the Noteholders and continues to materially and adversely affect the interests of the Noteholders for a period of [***] after the earlier of (i) the date on which a Trust Officer of the Indenture Trustee obtains actual knowledge of such breach or failure or (ii) the date on which written notice of such failure, requiring the same to be remedied, shall have been given to a Trust Officer of the Indenture Trustee;
(f)an Event of Bankruptcy shall occur with respect to the Issuer, the Seller or the Repo Guarantor; or
(g)any default by the Repo Guarantor under the Guaranty;
then, at any time during the continuance of such Indenture Event of Default, the Indenture Trustee shall, by written notice to the Issuer and the Holders of the Notes (i) instruct the Issuer to cease purchasing Eligible Assets and (ii) notify the Noteholders, the Administrator, the Rating Agency, the Collateral Agent, the Owner Trustee, the Standby Servicer, the Servicer, the Mortgage Loan Custodian, the Seller and the Repo Guarantor that an Indenture Event of Default has occurred.
Section IX.2.Repo Event of Default and Repo Trigger Event.
(a)If a Repo Event of Default has occurred and is continuing and a Trust Officer of the Indenture Trustee has written notice or actual knowledge of such an event, the Indenture Trustee shall, by written notice to the Issuer and the Holders of the Notes (i) instruct the Issuer to cease purchasing Eligible Assets and (ii) notify the Noteholders, the Administrator, the Rating Agency, the Collateral Agent, the Owner Trustee, the Standby Servicer, the Servicer, the Mortgage Loan Custodian, the Seller and the Repo Guarantor that a Repo Event of Default has occurred. The Required Noteholders shall have the right to waive any Repo Event of Default within [***] following the receipt of notice of such default.
(b)If a Repo Trigger Event has occurred, then the Indenture Trustee shall cause the sale of the Collateral and apply proceeds from the sale of such Collateral pursuant to the terms of Section 9.6.
Section IX.3.Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a)If the Issuer fails to pay all amounts due upon any Class of Notes becoming due and payable, the Indenture Trustee, in its capacity as Indenture Trustee and as trustee of an express trust, shall, if directed by the Required Noteholders, institute a judicial proceeding for the collection of the sums so due and unpaid, prosecute such proceeding to judgment or final decree and enforce the same against the Issuer or any other obligor upon such Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the Collateral, wherever situated, or may institute and prosecute such non-judicial proceedings in lieu of judicial proceedings as are then permitted by applicable law.
(b)If an Indenture Event of Default occurs and is continuing, the Indenture Trustee may, in its discretion and in any order, proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or any Mortgage or by law.
(c)In case (x) there shall be pending, relative to the Issuer or any Person having or claiming an interest in any of the Collateral, proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, (y) a receiver, assignee, debtor-in-possession or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or shall have taken possession of any Issuer or its property or such Person or (z) there shall be pending a comparable judicial proceeding brought by creditors of the Issuer or affecting the property of the Issuer, the Indenture Trustee, irrespective of whether the principal of or interest on any Notes shall then be due and payable and irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section 9.3, shall be entitled and empowered, by intervention in such proceedings or otherwise:
(i)to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective attorneys, and for reimbursement of all reasonable expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of willful misconduct, negligence or bad faith of the Indenture Trustee or any predecessor Indenture Trustee, as applicable) and of the Noteholders allowed in such proceedings;
(ii)unless prohibited by applicable law and regulations, to vote on behalf of the Noteholders in any election of a trustee, a standby trustee or Person performing similar functions in any such proceedings;
(iii)to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Indenture Trustee on their and its behalf; and
(iv)to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Noteholders allowed in any judicial proceedings relative to any Issuer, its creditors and its property and any trustee, receiver, liquidator, custodian or other similar official in any such proceeding is hereby authorized by each of Noteholders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective attorneys, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of willful misconduct, negligence or bad faith of the Indenture Trustee or predecessor Indenture Trustee.
(d)Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any related Noteholder or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
(e)In any proceedings brought by the Indenture Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Noteholders, and it shall not be necessary to make any Noteholder a party to any such proceedings.
(f)All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its counsel, be for the ratable benefit of the Noteholders in respect of which such judgment has been recovered, subject to the payment priorities set forth in Section 6.1(d) or Section 6.1(e), as applicable.
Section IX.4.Remedies.
If an Indenture Event of Default has occurred and is continuing, the Notes shall become immediately due and payable. Unless such Indenture Event of Default has been waived by the Required Noteholders, the Indenture Trustee shall (i) solicit bids for the Trust Estate and effect the sale of the Trust Estate as set forth in Section 9.6(b), and (ii) at the written direction of the Required Noteholders, in addition to performing any tasks as provided in Section 9.3, do one or more of the following:
(a) institute, or cause to be instituted, Proceedings for the collection of all amounts then payable on or under the Collateral or this Indenture with respect to the Notes of the sums due and unpaid, prosecute such Proceedings, enforce any judgment obtained and collect from the Collateral included in the Trust Estate the moneys adjudged to be payable;
(b) liquidate, or cause to be liquidated, all or any portion of the Trust Estate at one or more public or private sales called and conducted in any manner permitted by applicable laws; provided, however, that the Indenture Trustee shall give the Issuer written notice of any private sale called by or on behalf of the Indenture Trustee pursuant to this Section 9.4(b) at least [***] prior to the date fixed for such private sale;
(c) institute, or cause to be instituted, Foreclosure Proceedings with respect to all or part of the Collateral included in the Trust Estate;
(d) exercise, or cause to be exercised, any remedies of a secured party under the UCC;
(e) maintain the lien of this Indenture and the Mortgages over the Collateral included in the Trust Estate and, in its own name or in the name of the Issuer or otherwise, collect and otherwise receive in accordance with this Indenture any money or property at any time payable or receivable on account of or in exchange for the Eligible Assets and Mortgaged Properties in the Trust Estate;
(f) take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee hereunder;
(g) exercise, or cause to be exercised, any remedies contained in any Mortgage; or
(h) exercise the Buyer’s right to terminate the Master Repurchase Agreement.
provided, however, that the Indenture Trustee shall not, unless required by law, sell or otherwise liquidate all or any portion of the Trust Estate following any Indenture Event of Default except in accordance with Section 9.6 and 9.7; provided, further, that, with respect to instituting any remedies pursuant to this Section 9.4 in any state wherein the law prohibits more than one “judicial action” or “one form of action” to enforce a mortgage obligation, the Indenture Trustee shall enforce any of the Indenture Trustee’s rights hereunder with respect to any Mortgaged Properties.
In the event that the Indenture Trustee, following an Indenture Event of Default, institutes Foreclosure Proceedings, the Indenture Trustee shall promptly give a notice to that effect to the Issuer and the Rating Agency.
Section IX.5.Application of Money Collected.
Any money collected by the Indenture Trustee pursuant to this Article shall be deposited in the Payment Account and, on each Payment Date, shall be applied in accordance with the priority of payments set forth in Section 6.1(e) or if a Sale, Section 9.6(d), and, in case of the distribution of such money on account of the principal of or interest on the Notes, upon presentation and surrender of the Notes if fully paid.
Section IX.6.Sale of Collateral.
(a)The power to effect any public or private sale of any portion of the Trust Estate pursuant to Section 9.3 or Section 9.4 shall not be exhausted by any one or more sales as to any portion of the Collateral remaining unsold, but shall continue unimpaired until either the entirety of the Trust Estate shall have been sold or all amounts payable on the Notes and under this Indenture with respect thereto shall have been paid. Subject to Section 9.6(b), the Indenture Trustee may from time to time postpone any sale by public announcement made at the time and place of such sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation for any such sale, but such waiver does not apply to any amounts to which the Indenture Trustee is otherwise entitled hereunder.
If an Indenture Event of Default shall have occurred and such Indenture Event of Default has not been waived by the Required Noteholders or if a Repo Trigger Event has occurred, within [***] after notice of such Indenture Event of Default or Repo Trigger Event was sent to the Noteholders, the Indenture Trustee, upon obtaining all information necessary to solicit bids for an auction, including but not limited to current data regarding the Purchased Assets, shall prepare to effect an auction of the Collateral; provided, that, such auctions shall only be conducted by the Indenture Trustee for a period of [***]from the date on which the Indenture Event of Default or Repo Trigger Event occurs (the “Auction Period”). In connection with any
sale of the Collateral by the Indenture Trustee pursuant to this Section 9.6, the Indenture Trustee shall solicit bids from [***]. The Indenture Trustee shall not sell any Collateral pursuant to this Section 9.6 unless the proceeds of such liquidation would be greater than or equal to the sum of (i) the aggregate Note Balance of the Class A, Class B, Class C, Class D and Class E Notes plus all accrued and unpaid interest thereon (including any Interest Shortfall Amounts) and any Basis Risk Shortfall Amounts for the Class A, Class B, Class C, Class D and Class E Notes, or such lesser amount as may be agreed to in writing by the Holders of 100% of the Class A, Class B, Class C, Class D and Class E Notes and (ii) all accrued and unpaid fees, expenses and indemnities due to the transaction parties arising under the Program Agreements, (such price the “Minimum Sale Price”).
To the extent that an auction conducted by the Indenture Trustee during the Auction Period results in a bid equal to or greater than the Minimum Sale Price, the Indenture Trustee shall, within [***] of receiving such bid, notify the Holders of the Class F Notes of the amount of the highest bid (such bid, the “Winning Bid”) and offer such Holders the opportunity to purchase the Collateral for an amount greater than the Winning Bid. Upon receipt of a bid from the Holders of the Class F Notes or written notice that the Holders of the Class F Notes have declined such option, the Indenture Trustee shall, within [***] of receiving such bid or notice that the Holders of the Class F Notes have declined such option, notify the Holders of the Trust Certificates of the amount of the Winning Bid and offer such Holders the opportunity to purchase the Collateral for an amount greater than the Winning Bid and the bid, if any, submitted by the Holders of the Class F Notes. Any such bid from the Holders of the Class F Notes or the Trust Certificates must be received within [***] or notice that such Holders have declined such option (which notice will be deemed given if a bid is not received by the Indenture Trustee within [***] of when the notice of the Winning Bid has been provided to the Holders of any such Class of Notes).
To the extent that an auction conducted by the Indenture Trustee during the Auction Period results in a bid equal to or greater than the Minimum Sale Price, the Indenture Trustee shall, within [***] of receiving such bid, notify the holders of the Trust Certificates of the amount of the Winning Bid and offer such holders the opportunity to purchase the Collateral for an amount greater than the Winning Bid. The Indenture Trustee shall provide notices relating to the Winning Bid or any higher bid through the facilities of DTC and directly to each applicable Holder of the Notes or the holders of the Trust Certificates who has submitted an Investor Certification to the Indenture Trustee, in the manner provided in such Investor Certification. The holders of the Trust Certificates shall only have one opportunity to submit a bid higher than the highest bid then received by the Indenture Trustee and each such bid must be received within [***] of when notice of the highest bid has been provided to the related holders. Any bid received after the lapse of such [***] period shall be deemed rejected.
Following an auction in which the Indenture Trustee determines that the Minimum Sale Price has not been bid or received, the Indenture Trustee shall repeat the auction procedures every [***] during the Auction Period. During the Auction Period, all payments of principal received in respect of the Purchased Mortgage Loans shall be deposited to the Reserve Account
and shall reduce the Minimum Sale Price required to be met in an auction and paid as principal in respect of the Notes. If, following the Auction Period, it is determined that the Minimum Sale Price will not be received, the Indenture Trustee will be required to (i) on behalf of the Buyer, accept the Purchased Mortgage Loans and all other property conveyed by the Seller to the Buyer under the Master Repurchase Agreement, such acceptance to be (A) in full satisfaction of the obligations of the Seller to the Issuer under the Master Repurchase Agreement and (B) effected in a manner that complies with the requirements of paragraph 11(d)(i)(B) of the Master Repurchase Agreement and Section 9-620 of the UCC, and thereafter (ii) use collections received in respect of the Purchased Mortgage Loans (and, with respect to the first Payment Date following the Auction Period, amounts on deposit in the Reserve Account) to make payments on the Notes in accordance with the priority of payments described herein.
The Indenture Trustee, for the purposes of fulfilling the duties set forth in this Section 9.6(b), including determining whether the Minimum Sale Price has been satisfied, may retain an agent or expert; provided, however, the Indenture Trustee shall remain obligated to perform its duties set forth in this Section 9.6(b) regardless of whether the Indenture Trustee shall retain such an investment banking firm.
The foregoing provisions of this Section 9.6(b) shall not preclude or limit the ability of the Indenture Trustee, any Noteholder or their Affiliates to purchase all or any portion of the Collateral at any sale, public or private, and the purchase by the Indenture Trustee or its designee of all or any portion of the Collateral at any sale shall not be deemed a sale or disposition thereof for purposes of this Section 9.6(b).
(b)In the event that any Class of Notes is not fully paid on the Final Stated Maturity Date, the Required Noteholders shall have the right to require the sale of the Collateral, subject to Section 9.6(b) and (d).
(c)In connection with a sale of all or any portion of the Trust Estate pursuant to this Section 9.6:
(i)any Holder or Holders of Notes and the Seller, or its Affiliates, may bid for and purchase the property offered for sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and any Holder or Holders of Notes may, in paying the purchase money therefor, deliver any Outstanding Notes or claims for interest thereon in lieu of cash up to the amount which shall, upon distribution of the net proceeds of such sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after being appropriately stamped to show such partial payment;
(ii)the Indenture Trustee shall execute and deliver, without recourse, such instrument of conveyance transferring its interest in any portion of the Trust Estate delivered to it by the related purchaser in connection with a sale thereof and releasing such portion of the Trust Estate from the lien of this Indenture;
(iii)the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer and convey any of the Issuer’s interest in any portion of the Trust Estate in connection with a sale thereof, and to take all action necessary to effect such sale; and
(iv)no purchaser or transferee at such a sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.
(d)On the Payment Date following a Sale, the Securities Intermediary on behalf of the Indenture Trustee shall apply all amounts on deposit in the Payment Account, the Buyer’s Account and the Reserve Account on such date to make payments in the following order of priority:
(i)on a pro rata basis, to the Indenture Trustee, the Owner Trustee, the Note Calculation Agent, the Mortgage Loan Custodian, the Collateral Agent, the Servicer, the Diligence Provider, the Delinquent Loan Reviewer and the Standby Servicer in respect of all accrued and unpaid fees, expenses and indemnities due and payable to such parties under the Indenture or any other Program Agreements (to the extent not paid from any other account or other party);
(ii)to the Holders of the Class A Notes, the Interest Payment Amount for the Class A Notes for such Payment Date;
(iii)to the Holders of the Class A Notes, as principal, in an amount necessary to reduce the Note Balance of the Class A Notes to zero;
(iv)to the Holders of the Class A Notes, any Basis Risk Shortfall Amount for the Class A Notes for such Payment Date;
(v)to the Holders of the Class B Notes the Interest Payment Amount for the Class B Notes for such Payment Date;
(vi) to the Holders of the Class B Notes, as principal, in an amount necessary to reduce the Note Balance of the Class B Notes to zero;
(vii) to the Holders of the Class B Notes, any Basis Risk Shortfall Amount for the Class B Notes such Payment Date;
(viii) to the Holders of the Class C Notes, the Interest Payment Amount for the Class C Notes for such Payment Date;
(ix) to the Holders of the Class C Notes, as principal, in an amount necessary to reduce the Note Balance of the Class C Notes to zero;
(x) to the Holders of the Class C Notes, any Basis Risk Shortfall Amount for the Class C Notes for such Payment Date;
(xi) to the Holders of the Class D Notes, the Interest Payment Amount for the Class D Notes for such Payment Date;
(xii) to the Holders of the Class D Notes, as principal, in an amount necessary to reduce the Note Balance of the Class D Notes to zero;
(xiii) to the Holders of the Class D Notes, any Basis Risk Shortfall Amount for the Class D Notes for such Payment Date;
(xiv) to the Holders of the Class E Notes, the Interest Payment Amount for the Class E Notes for such Payment Date;
(xv) to the Holders of the Class E Notes, as principal, in an amount necessary to reduce the Note Balance of the Class E Notes to zero;
(xvi) to the Holders of the Class E Notes, any Basis Risk Shortfall Amount for the Class E Notes for such Payment Date;
(xvii) to the Holders of the Class F Notes, the Interest Payment Amount for the Class F Notes for such Payment Date;
(xviii) to the Holders of the Class F Notes, as principal, in an amount necessary to reduce the Note Balance of the Class F Notes to zero;
(xix) to the Holders of the Class F Notes, any Basis Risk Shortfall Amount for the Class F Notes for such Payment Date; and
(xxiii) to, or at the direction of, the holders of the Trust Certificates, any remaining amounts.
Section IX.7.Waiver of Events of Default.
Subject to Section 12.2, the Required Noteholders of each Class (voting separately), by written notice to the Indenture Trustee, may waive any existing Repo Event of Default, Potential Indenture Event of Default or Indenture Event of Default other than any Potential Indenture Event of Default or Indenture Event of Default related to clauses (a) or (f) of Section 9.1 or a continuing Indenture Event of Default in the payment of the principal of or interest on any Note. Such waiver must be given no later than [***] following the receipt of any notice of such default. The Indenture Trustee shall forward any such waiver notice received to the Rating Agency. Upon any such waiver, such Indenture Event of Default shall cease to exist, and any Indenture Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Indenture Event of Default or impair any right consequent thereon.
Section IX.8.Limitation on Suits.
Any other provision of this Indenture to the contrary notwithstanding, a Noteholder may pursue a remedy with respect to this Indenture or the Notes only if:
(i)The Noteholder gives to the Indenture Trustee written notice of a continuing Indenture Event of Default;
(ii)The Noteholders of at least [***]% in Note Balance of all then outstanding Notes make a written request to the Indenture Trustee to pursue the remedy in its own name as Indenture Trustee;
(iii)Such Noteholder or Noteholders offer and, if requested, provide to the Indenture Trustee indemnity reasonably satisfactory to the Indenture Trustee against any loss, liability or expense related to such remedy;
(iv)The Indenture Trustee does not comply with the request within [***]after receipt of the request and the offer and, if requested, the provision of indemnity;
(v)During such [***] the Required Noteholders do not give the Indenture Trustee a direction inconsistent with the request; and
(vi)An Indenture Event of Default has occurred and is continuing.
A Noteholder may not use this Indenture to prejudice the rights of another Noteholder or to obtain a preference or priority over another Noteholder.
Section IX.9.Unconditional Rights of Holders to Receive Payment; Withholding Taxes.
(a)Notwithstanding any other provision of this Indenture, except for clause (b) below, the right of any Holder of a Note to receive payment of principal and interest on the Note, on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the related Noteholder.
(b)The Indenture Trustee agrees, to the extent required by applicable law, to withhold from each payment due hereunder or under any Note, United States withholding taxes at the appropriate rate, and, on a timely basis, to deposit such amounts with an authorized depository and make such reports, filings and other reports in connection therewith, and in the manner, required under applicable law. The Indenture Trustee shall promptly furnish each Noteholder (but in no event later than the [***] after the due date thereof) a U.S. Treasury Form 1042S or appropriate Form 1099 (or similar forms as at any relevant time in effect), if applicable, indicating payment in full of any taxes withheld from any payments by the Indenture Trustee to such Persons together with all such other information and documents reasonably requested by such Noteholder and necessary or appropriate to enable such Noteholder to substantiate a claim for credit or deduction with respect thereto for income tax purposes of any jurisdiction with
respect to which such Noteholder is required to file a tax return. Each Noteholder and Holder of a Trust Certificate that is a United States Person shall provide the Indenture Trustee with an IRS Form W-9 confirming that such person is not subject to back-up withholding. In the event that a Noteholder which is not a United States Person has furnished to the Indenture Trustee a properly completed and currently effective U.S. Treasury Form W-8BEN or Form W-8BEN-E, as applicable (or such successor Form or Forms as may be required by the United States Treasury Department) during the calendar year in which the payment is made, or in either of the two preceding calendar years, claiming a reduced rate of, or exemption from, U.S. withholding tax under an income tax treaty, and has not notified the Indenture Trustee of the withdrawal or inaccuracy of such form prior to the date of each interest payment, only the amount, if any, required by applicable law shall be withheld from payments under the Notes held by such Noteholder in respect of United States federal income tax. In the event that a Noteholder (x) which is not a United States Person has furnished to the Indenture Trustee a properly completed and currently effective U.S. Treasury Form W-8ECI in duplicate (or such successor certificate or Form or Forms as may be required by the United States Treasury Department as necessary in order to avoid withholding of United States federal income tax), during the tax year of the Noteholder in which payment is made and has not notified the Indenture Trustee of the withdrawal or inaccuracy of such certificate or form prior to the date of each interest payment or (y) which is not a United States Person has furnished to the Indenture Trustee a properly completed and currently effective U.S. Treasury Form W-8BEN or Form W-8BEN-E, as applicable, during the calendar year in which the payment is made, or in either of the two preceding calendar years, no amount shall be withheld from payments under the Notes held by such Noteholder in respect of United States federal income tax. Notwithstanding the foregoing, if any Noteholder has notified the Indenture Trustee that any of the foregoing forms or certificates is withdrawn or inaccurate, or if the Code or the regulations thereunder or the administrative interpretation thereof are at any time after the date hereof amended to require such withholding of United States federal income taxes from payments under the Notes held by such Noteholder, or if such withholding is otherwise required under applicable law, the Indenture Trustee agrees to withhold from each payment due to the relevant Noteholder withholding taxes at the appropriate rate under applicable law, and shall, as more fully provided above, on a timely basis, deposit such amounts with an authorized depository and make such reports, filings and other reports in connection therewith, and in the manner required under applicable law. The Indenture Trustee hereby agrees to use its commercially reasonable best efforts (without incurring liability for a failure to do so) to inform the affected Noteholder or Noteholders if the Indenture Trustee has failed to receive any of Form W-8BEN, W-8BEN-E or W-8ECI, as applicable, from a Noteholder prior to the date of an interest payment to such Noteholder.
Section IX.10.The Indenture Trustee May File Proofs of Claim.
Subject to Section 13.16, the Indenture Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and counsel) allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes), its creditors or its
property, and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claim. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Indenture Trustee and counsel, and any other amounts due the Indenture Trustee under Section 10.6 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, Notes and other properties which the Holders of the Notes may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Noteholder thereof, or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding.
Section IX.11.Priorities.
If the Indenture Trustee collects any money pursuant to this Article, the Indenture Trustee shall distribute such money in accordance with the provisions of Section 6.1 or Section 9.6(d), as applicable of this Indenture.
Section IX.12.Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Indenture Trustee for any action taken or omitted by it as an Indenture Trustee, a court in its discretion may require the filing by any party litigant in the suit of any undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This section does not apply to a suit by the Indenture Trustee, or a suit by a Noteholder pursuant to Section 9.7.
Section IX.13.Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Holders of Notes is intended to be exclusive of any other right or remedy, and every right or remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given under this Indenture or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy under this Indenture, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section IX.14.Delay or Omission Not Waiver.
No delay or omission of the Indenture Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Indenture Event of Default shall impair any such right or remedy or constitute a waiver of any such Indenture Event of Default or an acquiescence therein.
Every right and remedy given by this Article IX or by law to the Indenture Trustee or to the Holders of Notes may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Holders of Notes, as the case may be.
ARTICLE X.
THE INDENTURE TRUSTEE
Section X.1.Duties of the Indenture Trustee.
(a)If an Indenture Event of Default has occurred and is continuing, the Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture and the Program Agreements, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances; provided, however, that the Indenture Trustee shall have no liability in connection with any action or inaction taken, or not taken, by it upon the deemed occurrence of an Indenture Event of Default of which a Trust Officer of the Indenture Trustee has not received written notice nor has actual knowledge.
(b)Except during the occurrence and continuance of an Indenture Event of Default:
(i)The Indenture Trustee undertakes to perform only those duties that are specifically set forth in this Indenture or the Program Agreements and no others, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and
(ii)In the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture or the Program Agreements, and the genuineness of signatures believed by it to be genuine and to have been signed or presented by the proper party or parties without further inquiry into the person’s or persons’ authority. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty to examine the same to determine whether or not they conform on their face to the requirements of this Indenture. The Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform on their face to the requirements of this Indenture or other applicable Program Agreement (but need not verify, confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c)The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i)This clause does not limit the effect of clause (b) of this Section 10.1;
(ii)The Indenture Trustee shall not be liable for any error of judgment made in good faith by the Indenture Trustee, unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts;
(iii)The Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it hereunder; and
(iv)The Indenture Trustee shall not be charged with knowledge of any default or event, including a Potential Indenture Event of Default, Indenture Event of Default, Repo Event of Default or Servicing Termination Event, under this Indenture or any other Program Agreement, unless a Trust Officer of the Indenture Trustee receives written notice of such default or event or has actual knowledge of such default or event.
(d)Notwithstanding anything to the contrary contained in this Indenture or any of the Program Agreements, no provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or incur any liability financial or otherwise. The Indenture Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense.
(e)The Indenture Trustee shall not be under any obligation to take any action under this Indenture which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable discretion, assured to it by the security afforded to it by the terms of this Indenture, unless and until requested in writing to do so by the Holders and furnished, from time to time as it may require, with reasonable security and indemnity in form and substance acceptable to the Indenture Trustee.
(f)In the event that the Indenture Trustee and Note Registrar shall fail to perform any obligation, duty or agreement in the manner or on the day required to be performed by the Indenture Trustee and Note Registrar, as the case may be, under this Indenture, the Indenture Trustee shall be obligated as soon as practicable upon written notice or actual knowledge of a Trust Officer of the Indenture Trustee thereof and receipt of appropriate records and information, if any, to perform such obligation, duty or agreement in the manner so required.
(g)Subject to Section 10.4, all moneys received by the Indenture Trustee shall, until used or applied as herein provided, be held for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law or the Program Agreements. The Indenture Trustee may allow and credit to the Issuer interest agreed upon in writing by the Issuer and the Indenture Trustee from time to time as may be permitted by law.
(h)The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.
Section X.2.Master Repurchase Agreement.
The Indenture Trustee shall take, perform or cause to be performed on behalf of the Issuer as Buyer all obligations of the Buyer under the Master Repurchase Agreement; it being understood that any obligations or duties of the Buyer related to the payment of fees, indemnities, purchase price, Repurchase Price, interest, principal or any other payment
obligations of the Buyer under the Master Repurchase Agreement shall be made from and limited to amounts on deposit in the Payment Account and the Buyer’s Account in accordance with the priorities of payment set forth therein and in this Indenture, and the Indenture Trustee shall have no other duty or obligation to satisfy such payment obligations. Notwithstanding the foregoing, unless a Repo Event of Default has occurred and is continuing, the Indenture Trustee shall not be entitled to exercise the Buyer’s right to demand termination of the Master Repurchase Agreement unless an Indenture Event of Default shall have occurred and be continuing and the Required Noteholders shall have directed the Indenture Trustee to effect such termination. Any notice provided to the Buyer pursuant to Section 7(g) of Annex I to the Master Repurchase Agreement shall be made available by the Issuer on the 17g-5 Website and thereafter sent to the Rating Agency.
Section X.3.Rights of the Indenture Trustee.
Except as otherwise provided by Section 10.1:
(a)The Indenture Trustee may conclusively rely and shall be fully protected in acting or refraining from acting based upon any document, including but not limited to any certificate, Issuer Order, Issuer Request, Monthly Payment Date Statement, Opinion of Counsel, direction, request, consent or approval, believed by it to be genuine and to have been signed by or presented by the proper Person. The Indenture Trustee shall not be required to investigate any fact or matter stated in any such documents.
(b)The Indenture Trustee may consult with counsel, accountants or other experts of its selection, and the advice of such counsel, accountants or other experts or any opinion of counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c)The Indenture Trustee may execute any of the trusts or powers under this Indenture or perform any duties under this Indenture either directly or by or through agents or attorneys or a custodian or nominee; provided however, that the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed by the Indenture Trustee with due care (i) with respect to the performance by such agent, attorney, custodian or nominee of ministerial duties of the Indenture Trustee, (ii) if the Issuer or Holders have directed the Indenture Trustee to appoint such agent, attorney, custodian or nominee, or (iii) upon the occurrence and during the continuation of a Repo Event of Default or an Indenture Event of Default; provided further, that the Indenture Trustee shall not be liable for the execution or performance of any such duties or obligations of the Indenture Trustee by any of the original parties to the Program Agreements (other than the Indenture Trustee). Notwithstanding the foregoing, in no event shall the Indenture Trustee delegate the following activities unless the Rating Agency Condition has been satisfied: (i) confirming that the Repurchase Price, in the correct amount, has been received from the Seller under the Master Repurchase Agreement, (ii) performing the duties of the Buyer pursuant to
Sections 4(b) and 5 in Annex III to the Master Repurchase Agreement and (iii) performing its duties under Sections 5.2, 6.1(c), (d) and (e), and 6.4 of this Indenture.
(d)Neither the Indenture Trustee nor any of its officers, directors, employees or agents shall be liable for any action taken or omitted to be taken in good faith which it or them believes to be authorized or within the rights or powers conferred upon them by this Indenture or the other Program Agreements.
(e)The Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or any other Program Agreement, take any action or to institute, conduct or defend any litigation hereunder or in relation hereto, at the request, order or direction of any of the Noteholders, pursuant to the provisions of this Indenture or any other Program Agreement, unless Noteholders having at [***]% in Note Balance of the Notes shall have made such request by written direction and shall have offered to the Indenture Trustee security or indemnity reasonably satisfactory to the Indenture Trustee against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the Indenture Trustee of the obligations, upon the occurrence of an Indenture Event of Default by the Issuer (which has not been cured or waived), to exercise such of the rights and powers vested in it by this Indenture or any other Program Agreement, and to use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances.
(f)The Indenture Trustee shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Required Noteholders of any Class which could be adversely affected if the Indenture Trustee does not perform such acts.
(g)Notwithstanding anything to the contrary in this Indenture, in no event shall the Indenture Trustee be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(h)Whenever in the administration of the provisions of this Indenture the Indenture Trustee shall deem it necessary or desirable that a matter be provided or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Indenture Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate of the Issuer and delivered to the Indenture Trustee and such certificate, in the absence of negligence or bad faith on the part of the Indenture Trustee, shall be full warrant to the Indenture Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof.
(i)The rights, privileges, protections, immunities and benefits given to the Indenture Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Indenture Trustee in each of its capacities hereunder (including but in no way limited to, as Indenture Trustee, Note Calculation Agent and Note Registrar), and to each agent, custodian and other Person employed to act hereunder.
(j)The Indenture Trustee shall not be responsible for and makes no representations as to the validity, legality, sufficiency, enforceability, genuineness or adequacy of this Indenture, the Notes, the Certificates, the Program Documents, or any of the Collateral or any related documents, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, it shall not be responsible for and makes no representations regarding the collectability, insurability, effectiveness or suitability of any Collateral, it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued or otherwise used in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s certificate or authentication, and it shall in no event assume or incur any liability, duty or obligation to any Noteholder or to any Certificateholder, other than as expressly provided in this Indenture or by law. Except as expressly provided herein, under no circumstances shall the Indenture Trustee be liable for indebtedness evidenced by or arising under any of the Program Documents, including the principal of and interest on the Notes or distributions on the Certificates. In no event will the Indenture Trustee be considered the obligor under the Notes or the Certificates.
(k)Notwithstanding anything to the contrary in this Indenture, the Indenture Trustee shall not be liable for delays, errors or losses occurring by reason of circumstances beyond its control, including, without limitation, any existing or future law or regulation, any existing or future act of Governmental Authority, act of God, epidemic or pandemic, flood, war whether declared or undeclared, terrorism, riot, rebellion, civil commotion, strike, lockout, other industrial action, general failure of electricity or other supply, aircraft collision, technical failure, accidental or mechanical or electrical breakdown, computer failure or failure of any money transmission system, credit risks of clearing bank, agent or system and any other market conditions affecting the execution or settlement of transactions or any event where, in the reasonable opinion of the Indenture Trustee, performance of any duty or obligation under or pursuant to this Indenture would or may be illegal or would result in the Indenture Trustee being in breach of any law, rule, regulation, or any decree, order or judgment of any court, or practice, request, direction, notice, announcement or similar action of any relevant government, government agency, regulatory authority, stock exchange or self-regulatory organization to which the Indenture Trustee is subject.
(l)In no event shall the Indenture Trustee have any responsibility to monitor compliance with or enforce compliance with the credit risk retention requirements of section 941 of the Dodd-Frank Act for asset-backed securities or other rules or regulations relating to risk retention. The Indenture Trustee shall not be charged with knowledge of such rules, nor shall it be liable to any Noteholder or other party for violation of such rules nor or hereinafter in effect.
(m)The Indenture Trustee shall not be required to take any action it is directed to take under this Indenture if the Indenture Trustee determines in good faith that the action so directed would involve the Indenture Trustee in personal liability, be unjustly prejudicial to the non-directing Holders, or is inconsistent with this Indenture or the Program Agreements or contrary to applicable law.
(n)In no event shall the Indenture Trustee be liable for failure to perform its duties hereunder if such failure is a direct or proximate result of another party’s failure to perform its obligations hereunder.
(o)Any discretion, permissive right, or privilege of the Indenture Trustee hereunder shall not be deemed to be or otherwise construed as a duty or obligation.
(p) Neither the Indenture Trustee’s receipt of any financial statements (if any) or other reports delivered to it hereunder nor the existence of publicly available information shall, in and of itself, constitute actual or constructive knowledge of, or notice to, the Indenture Trustee of any information contained therein or determinable therefrom, including but not limited to a party’s compliance with covenants under the Indenture.
(q) Knowledge or information acquired by (i) U.S. Bank Trust Company, National Association in its capacity as Indenture Trustee hereunder shall not be imputed to U.S. Bank Trust Company, National Association or U.S. Bank National Association in any of its other capacities under any other Program Agreements and vice versa, and (ii) any Affiliate of U.S. Bank Trust Company, National Association shall not be imputed to U.S. Bank Trust Company, National Association or U.S. Bank National Association in any of its capacities hereunder or under any other Program Agreements and vice versa.
(r) The Indenture Trustee may hold funds uninvested (without any requirement or liability to pay for interest or earnings) in the absence of written investment direction.
(s) Notwithstanding anything to the contrary in this Agreement, the Indenture Trustee shall have the right to decline any Noteholder direction if the Indenture Trustee determines that the action or proceeding as directed may not lawfully be taken or if the Indenture Trustee in good faith determines that the action or proceeding so directed would involve it in personal liability, be unjustly prejudicial to the non-directing Holders or inconsistent with the Program Agreements.
Section X.4.Individual Rights of the Indenture Trustee.
The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or an Affiliate of the Issuer with the same rights it would have if it were not Indenture Trustee. Any agent may do the same with like rights. However, the Indenture Trustee is subject to Section 10.9.
Section X.5.Notice of Events of Default and Potential Events of Default.
If an Indenture Event of Default or a Potential Indenture Event of Default occurs and is continuing and if a Trust Officer of the Indenture Trustee receives written notice or has actual knowledge thereof, the Indenture Trustee shall promptly provide the Noteholders, the Administrator and the Rating Agency with notice of such Indenture Event of Default or the Potential Indenture Event of Default by first class mail.
Section X.6.Compensation.
(a)The Issuer shall promptly pay to the Indenture Trustee from time to time compensation for its acceptance of this Indenture and services hereunder as agreed in writing between the Issuer and the Indenture Trustee, as may be amended from time to time. The Indenture Trustee’s compensation shall not be limited by any law on compensation of an Indenture Trustee of an express trust. The Issuer shall reimburse the Indenture Trustee promptly upon request for all reasonable out of pocket disbursements, advances and expenses incurred or made by it in addition to the compensation for its services, including the reasonable compensation and the reasonable expenses and disbursements of such agents, representatives, servicers, experts and counsel as the Indenture Trustee may reasonably employ in connection with the exercise and performance of its powers and duties in connection therewith. Such expenses shall include the reasonable compensation, disbursements and expenses of the Indenture Trustee’s agents, counsel and experts.
(b)The Issuer shall not be required to reimburse any expense or indemnify the Indenture Trustee against any loss, liability, or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith (as agreed by the Indenture Trustee or determined by a court of competent jurisdiction).
(c)When the Indenture Trustee incurs expenses or renders services after an Indenture Event of Default occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under the Bankruptcy Code.
(d)The provisions of this Section 10.6 shall survive the termination of this Indenture and the resignation and removal of the Indenture Trustee.
Section X.7.Replacement of the Indenture Trustee.
(a)A resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee shall become effective only upon the successor Indenture Trustee’s acceptance of appointment as provided in this Section 10.7, at least [***] notice to the Rating Agency and the satisfaction of the Rating Agency Condition.
(b)The Indenture Trustee may, after giving [***] prior written notice to the Issuer, the Administrator, each Noteholder and the Rating Agency, resign at any time and be discharged from the trust hereby created by so notifying the Issuer and the Administrator;
provided, that no such resignation of the Indenture Trustee shall be effective until a successor Indenture Trustee has assumed the obligations of the Indenture Trustee hereunder. The Required Noteholders may remove the Indenture Trustee for any reason by so notifying the Indenture Trustee, the Issuer, the Administrator and the Rating Agency. The Issuer may remove the Indenture Trustee upon [***] written notice to the Indenture Trustee and notice to the Rating Agency if:
(i)the Indenture Trustee fails to comply with Section 10.9;
(ii)the Indenture Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Indenture Trustee under the Bankruptcy Code;
(iii)a custodian or public officer takes charge of the Indenture Trustee or its property; or
(iv)the Indenture Trustee becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee for any reason, the Issuer shall promptly appoint a successor Indenture Trustee and provide notice of such appointment to the Administrator.
(c)If a successor Indenture Trustee does not take office within [***] after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or any Noteholder may petition, at the expense of the Issuer, any court of competent jurisdiction for the appointment of a successor Indenture Trustee.
(d)If the Indenture Trustee after written request by any Noteholder who has been a Noteholder for at least [***] fails to comply with Section 10.9, such Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.
(e)A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, the Administrator and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to the Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee; provided, that all sums owing to the retiring Indenture Trustee hereunder have been paid. Notwithstanding replacement of the Indenture Trustee pursuant to this Section 10.7, the Issuer’s obligations under Section 10.6 shall continue for the benefit of the retiring Indenture Trustee.
Section X.8.Successor Indenture Trustee by Merger, etc.
Subject to Section 10.9, if the Indenture Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or entity, the successor corporation or entity without any further act shall be the successor Indenture Trustee.
Section X.9.Eligibility.
(a)There shall at all times be an Indenture Trustee hereunder which shall (i) be a corporation organized and doing business under the laws of the United States of America or of any state thereof authorized under such laws to exercise corporate trust power and (ii) be subject to supervision or examination by federal or state authority and shall have a combined capital and surplus of at least $[***]as set forth in its most recent published annual report of condition.
(b)At any time the Indenture Trustee shall cease to satisfy the eligibility requirements above, the Indenture Trustee shall resign immediately in the manner and with the effect specified in Section 10.7.
Section X.10.Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a)Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirements of any jurisdiction, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-Indenture Trustee or co-Indenture Trustees, or separate Indenture Trustee or separate Indenture Trustees, and to vest in such Person or Persons, subject to the other provisions of this Section 10.10, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No co-Indenture Trustee or separate Indenture Trustee hereunder shall be required to meet the terms of eligibility as a successor Indenture Trustee under Section 10.9 and no notice to Noteholders of the appointment of any co-Indenture Trustee or separate Indenture Trustee shall be required under Section 10.7.
(b)Every separate Indenture Trustee and co-Indenture Trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(i)The Notes of each Class shall be authenticated and delivered solely by the Indenture Trustee or an authenticating agent appointed by the Indenture Trustee;
(ii)All rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate Indenture Trustee or co-Indenture Trustee jointly (it being understood that such separate Indenture Trustee or co-Indenture Trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the assets or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate Indenture Trustee or co-Indenture Trustee, but solely at the direction of the Indenture Trustee; and
(iii)The Indenture Trustee may at any time accept the resignation of or remove any separate Indenture Trustee or co-Indenture Trustee.
(c)Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate Indenture Trustees and co-Indenture Trustees, as effectively as if given to each of them. Every instrument appointing any separate Indenture Trustee or co-Indenture Trustee shall refer to this Indenture and the conditions of this Article X. Each separate Indenture Trustee and co-Indenture Trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee.
(d)Any separate Indenture Trustee or co-Indenture Trustee may at any time constitute the Indenture Trustee, its agent or attorney in fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect to this Indenture on its behalf and in its name. If any separate Indenture Trustee or co-Indenture Trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor Indenture Trustee.
(e)In connection with the appointment of a co-Indenture Trustee, the Indenture Trustee may, at any time, without notice to the Noteholders, delegate its duties under this Indenture to any Person who agrees to conduct such duties in accordance with the terms hereof; provided, that no such delegation shall relieve the Indenture Trustee of its obligations and responsibilities hereunder with respect to any such delegated duties.
(f)The Issuer agrees to pay to any separate trustee or co-trustee appointed hereunder reasonable compensation, and to reimburse such co-trustee or separate trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by it or them in accordance with any provision of this Indenture or any document executed in connection herewith except any such expense, disbursement or advance as may be attributable to its negligence or bad faith. In no event shall the Indenture Trustee be obligated to pay any fee or expense of any separate trustee or co-trustee.
(g)The Indenture Trustee shall not be liable for any misconduct or negligence on the part of, or for the supervision of any co-Indenture Trustee or separate Indenture Trustee.
Section X.11.Representations, Warranties and Covenants of Indenture Trustee.
The Indenture Trustee represents and warrants to the Issuer and the Noteholders that:
(i)The Indenture Trustee is a national banking association that has been duly organized and is validly existing under the laws of the United States of America;
(ii)The Indenture Trustee has full power, authority and right to execute, deliver and perform this Indenture and to authenticate the Notes, and has taken all necessary action to authorize the execution, delivery and performance by it of this Indenture and to authenticate the Notes;
(iii)This Indenture has been duly executed and delivered by the Indenture Trustee; and
(iv)The Indenture Trustee meets the requirements of eligibility as an Indenture Trustee hereunder set forth in Section 10.9.
Except as otherwise provided in Section 10.3(c), the Indenture Trustee covenants and agrees that during the term of this Indenture it shall execute any trusts or powers hereunder or perform duties hereunder directly and not through any agents, bailees and nominees (other than as Collateral Agent as provided in the Master Repurchase Agreement).
Section X.12.The Issuer Indemnification of the Indenture Trustee.
The Issuer shall indemnify and hold harmless each of the Indenture Trustee, the Standby Servicer, the Collateral Agent and each of their directors, officers, agents and employees (the “Indemnified Parties”) from and against any and all loss, claim, liability, expense (including Extraordinary Expenses), including (i) the reasonable compensation and the expenses and disbursements of such agents, representatives, servicers, experts and counsel as the Indenture Trustee may reasonably employ in connection with the exercise and performance of its powers and duties in connection therewith, (ii) taxes (other than taxes based on the income of the Indenture Trustee, the Standby Servicer or the Collateral Agent) and (iii) damage or injury suffered or sustained, including reasonable legal fees and expenses incurred by each of the Indemnified Parties in connection with enforcing the indemnification and other contractual obligations of the Issuer by reason of any acts, omissions or alleged acts or omissions arising out of or in connection with the acceptance of the trusts hereunder or activities of the Indenture Trustee, the Standby Servicer or the Collateral Agent pursuant to this Indenture or any Program Agreement, including but not limited to any judgment, award, settlement, reasonable attorneys’ fees and expenses and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim (whether asserted by the Seller, the Issuer or any other Person); provided, however, that the Issuer shall not indemnify the Indenture Trustee, the Standby Servicer or the Collateral Agent or its directors, officers, employees or agents if such acts, omissions or alleged acts or omissions constitute bad faith, negligence or willful misconduct by such Person (as agreed by the Indenture Trustee or determined by a court of competent
jurisdiction). The indemnity provided herein shall survive the termination of this Indenture and the resignation and removal of the Indenture Trustee, the Standby Servicer and the Collateral Agent.
Section X.13.[Reserved].
Section X.14.The Securities Intermediary.
(a)There shall at all times be one or more Securities Intermediaries. The Issuer hereby appoints U.S. Bank National Association as the Securities Intermediary hereunder and U.S. Bank National Association accepts such appointment.
(b)The Securities Intermediary hereby represents and warrants and agrees with the Issuer and for the benefit of the Indenture Trustee as follows:
(i)The Securities Intermediary is a “securities intermediary,” as such term is defined in Section 8-102(a)(14)(B) of the New York UCC, that in the ordinary course of its business maintains “securities accounts” for others, as such term is used in Section 8-501 of the New York UCC;
(ii)Pursuant to Section 10.10, the “securities intermediary’s jurisdiction” as defined in the New York UCC shall be the State of New York; and
(iii)The Securities Intermediary is not a “clearing corporation”, as such term is defined in Section 8-102(a)(5) of the New York UCC.
ARTICLE XI.
DISCHARGE OF INDENTURE
Section XI.1.Termination of the Issuer’s Obligations.
(a)This Indenture shall cease to be of further effect (except with respect to provisions that expressly survive termination) when all outstanding Notes theretofore authenticated and issued have been delivered (other than destroyed, lost or stolen Notes which have been replaced or paid) to the Indenture Trustee for cancellation, the Issuer has paid all sums payable hereunder and the Issuer gives written notice to the Indenture Trustee of the termination of this Indenture.
(b)In addition, the Issuer may terminate all of its obligations under this Indenture if:
(i)The Issuer irrevocably deposits with the Indenture Trustee or another trustee under the terms of an irrevocable trust agreement in form and substance satisfactory to the Indenture Trustee, money or U.S. Government Obligations in an amount sufficient, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered to the Indenture Trustee, to pay, when due, principal, premium, if any, and interest on the Notes to maturity or repurchase, as the case may be, and to pay all other sums payable by it hereunder; provided, that (1) such trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such U.S. Government Obligations to the Indenture Trustee and (2) such trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said principal and interest with respect to the Notes;
(ii)the Issuer delivers to the Indenture Trustee an Officer’s Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture have been complied with, and an Opinion of Counsel to the same effect;
(iii)the Rating Agency Condition is satisfied; and
(iv)the consent of the Required Noteholders of each Class of Notes with an outstanding Note Balance has been received.
Then, this Indenture shall cease to be of further effect (except as provided in this Section 11.1), and the Indenture Trustee, on demand of the Issuer, shall execute proper instruments acknowledging confirmation of and discharge under this Indenture.
(c)After such irrevocable deposit made pursuant to Section 11.1(b) and satisfaction of the other conditions set forth herein, the Indenture Trustee upon request shall acknowledge in writing the discharge of the Issuer’s obligations under this Indenture except for those surviving obligations specified above.
In order to have money available on a Payment Date to pay principal, premium, if any, or interest on the Notes, the U.S. Government Obligations shall be payable as to principal or interest at least [***] before such Payment Date in such amounts as will provide the necessary money. U.S. Government Obligations shall not be callable at the Issuer’s option.
Section XI.2.Application of Issuer Money.
The Indenture Trustee or another trustee satisfactory to the Indenture Trustee and the Issuer shall hold money or U.S. Government Obligations deposited with it pursuant to Section 11.1. The Indenture Trustee shall apply the deposited money and the money from U.S. Government Obligations through the Indenture Trustee in accordance with this Indenture to the payment of principal and interest on the Notes.
The provisions of this Section 11.2 shall survive the expiration or earlier termination of this Indenture.
Money held by the Indenture Trustee hereunder need not be segregated from other funds except to the extent required by law. The Indenture Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed in writing with the Issuer.
Section XI.3.Repayment to the Issuer; Unclaimed Funds.
The Indenture Trustee shall promptly pay to the Issuer upon written request any excess money or, pursuant to Sections 2.13 and 2.16, return any Notes held by it at any time.
The provisions of this Section 11.3 shall survive the expiration or earlier termination of this Indenture.
Section XI.4.Amounts Not Paid to Noteholders.
Notwithstanding the foregoing and subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee with respect to such trust money shall thereupon cease; provided, that the Indenture Trustee, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in New York City and London, if applicable, notice that such money remains unclaimed and that, after a date specified therein, which shall not be [***] from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.
The provisions of this Section 11.4 shall survive the expiration or earlier termination of this Indenture.
ARTICLE XII.
AMENDMENTS
Section XII.1.Without Consent of the Noteholders.
This Indenture may be amended from time to time by the parties hereto without the consent of the Noteholders in order to: (i) cure any mistake, including without limitation conforming the Indenture to the final version of the private placement memorandum related to the issuance of the Notes, (ii) to modify or supplement any provision therein which may be ambiguous and/or inconsistent with any other provision therein or (iii) to make any other provision with respect to any matter or question arising under this Indenture which will not be inconsistent with any other provisions of this Indenture; provided however that, with respect to an amendment pursuant to clauses (ii) or (iii) of this paragraph, there shall be delivered to the Indenture Trustee and the Rating Agency either (a) an Opinion of Counsel concluding that the
amendment will not adversely affect in any material respect the interests of any Noteholder or (b)(i) an Officer’s Certificate of the Administrator certifying that any such amendment, modification or supplement will not adversely affect the interests of the Noteholders and (ii) a written or electronic notice from the Rating Agency that such action will not result in the reduction or withdrawal of the rating of any outstanding class of Notes. In addition, this Indenture may be amended by the parties hereto, without the consent of the Noteholders, to provide for the sale of Eligible Mortgage Loans evidenced by eNotes so long as the Rating Agency Condition is satisfied pursuant to its terms.
Section XII.2.With Consent of the Noteholders.
This Indenture may also be amended from time to time by the parties thereto, with the consent of the Required Noteholders for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment will (i) reduce in any manner the amount of, or delay the timing of, payments received on the Purchased Assets or from the Seller which are required to be distributed on any Note without the consent of the holder of such Note, (ii) adversely affect in any material respect the interests of the holders of any Class of Notes in a manner, other than as described in (i), without the consent of the Required Noteholders for such Class, or (iii) modify the consents required by the immediately preceding clauses (i) and (ii) without the consent of the holders of all Notes then outstanding.
The consent of the Required Noteholders shall also be required for an amendment of any other Program Agreement for which the party required thereunder cannot deliver a certificate certifying that any such amendment will not adversely affect the interests of the Noteholders.
Section XII.3.Opinions of Counsel.
In executing any supplemental indenture permitted by this Article XII or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive and shall be fully protected in relying in good faith upon, an Opinion of Counsel reasonably acceptable to the Indenture Trustee stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and all conditions precedent to such supplemental indenture have been satisfied. The effectiveness of any amendment, modification or supplement to the Indenture, shall also be conditioned upon the delivery of a Tax Opinion to the Rating Agency and the Indenture Trustee.
Notwithstanding the foregoing, any amendment, modification or supplement that would extend the due date for, reduce the amount of any scheduled repayment of any Note (or reduce the principal amount of or rate of interest on any Note) or change the definition of Eligible Mortgage Loan or Eligible Asset requires the consent of each affected Noteholder.
The Administrator shall give the Rating Agency [***] written notice of any amendment, waiver, supplement or modification to this Indenture or any other Program Agreement, and a copy of such proposed amendment, waiver, supplement or modification in substantially final
form no later than [***] prior to the effectiveness thereof. The costs and expenses associated with any amendment, modification or supplement to this Indenture shall be borne by the party requesting such amendment, modification or supplement.
Section XII.4.Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Noteholder or subsequent Noteholder may revoke the consent as to his Note or portion of a Note if the Indenture Trustee receives written notice of revocation before the date the amendment or waiver becomes effective. An amendment or waiver becomes effective in accordance with its terms and thereafter binds every Noteholder. The Issuer may fix a record date for determining which Noteholders must consent to such amendment or waiver.
Section XII.5.Notation on or Exchange of Notes.
The Indenture Trustee may place an appropriate notation about an amendment or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Indenture Trustee shall authenticate new Notes that reflect the amendment or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment or waiver.
Section XII.6.The Indenture Trustee to Sign Amendments; Miscellaneous, etc.
The Indenture Trustee shall sign any amendment authorized pursuant to this Article XII if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Indenture Trustee. If it does, the Indenture Trustee may, but need not, sign it. The parties hereto acknowledge and agree that no amendment to this Indenture which adversely affects the rights, duties, liabilities, indemnities or immunities of the Owner Trustee shall be effective without the prior written consent of the Owner Trustee. The parties hereto acknowledge and agree that this Indenture shall not be amended by the parties hereto if such amendment would have a material adverse effect on the rights or privileges of the Mortgage Loan Custodian (as determined by the Mortgage Loan Custodian) without the prior written consent of the Mortgage Loan Custodian, which is an intended third party beneficiary hereunder in such respect.
ARTICLE XIII.
MISCELLANEOUS
Section XIII.1.Notices.
(a)Any notice, instruction, direction, waiver or other communication by the Issuer or the Indenture Trustee to the other shall be in writing (which may include electronic
mail) and delivered in person or by first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the other’s address set forth in the Administration Agreement.
The Issuer or the Indenture Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications; provided, that the Issuer may not at any time designate more than a total of three (3) addresses to which notices must be sent in order to be effective.
All instructions, notices, requests, demands and other communications to be given hereunder to any party to any of the Program Agreements by any party hereto shall be in writing and shall be personally delivered or sent by certified mail (postage prepaid), overnight delivery or electronic transmission, in each case, to the intended party at the address or facsimile number of such party set forth below:
If to the Indenture Trustee:
U.S. Bank Trust Company, National Association
190 S. LaSalle Street, 7th Floor
Mail Code: MK-IL-SL7R
Chicago, Illinois 60603
Phone Number: [***]
Fax Number: [***]
Attention: Mello Warehouse Securitization Trust 2024-1
Email: [***]
If to the Issuer:
Mello Warehouse Securitization Trust 2024-1
c/o Wilmington Savings Fund Society, FSB
500 Delaware Avenue, 11th Floor
Wilmington, Delaware 19801
Tel. No: [***]
Facsimile No: [***]
Attention: Corporate Trust / Mello 2024-1
Email: [***]
with copies to:
loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, CA 92618
Attention: [***]
Email: [***]
and
loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, CA 92618
Attention: General Counsel
Email: [***]
If to the Administrator:
loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, CA 92618
Attention: [***]
Email: [***]
With a copy to:
loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, CA 92618
Attention: General Counsel
Email: [***]
If to the Standby Servicer:
U.S. Bank National Association
190 S. LaSalle Street, 7th Floor
Mail Code: MK-IL-SL7R
Chicago, Illinois 60603
Phone Number: [***]
Fax Number: [***]
Attention: Mello Warehouse Securitization Trust 2024-1
Email: [***]
If to the Diligence Provider:
Clayton Services LLC
Attention: SVP, Transaction Management
720 S. Colorado Blvd., Suite 200
Glendale, CO 80246
Phone Number: [***]
With a copy to:
Clayton Services LLC
Attention: General Counsel
720 S. Colorado Blvd., Suite 200
Glendale, CO 80246
Email: [***]
If to the Rating Agency:
DBRS, Inc.
US RMBS Surveillance
140 Broadway, 43rd Floor
New York, NY 10005
[***]
If to the Mortgage Loan Custodian:
Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Custody Administration - LD242C
Email: [***]
If to the Owner Trustee:
Wilmington Savings Fund Society, FSB
500 Delaware Avenue, 11th Floor
Wilmington, Delaware 19801
Tel. No: 302-888-5818
Facsimile No: 302-421-9137
Attention: Corporate Trust / Mello 2024-1
Email: [***]
or at such other address or facsimile number as may be designated in writing by such intended party to the party giving such notice. Any such instruction, notice, request, demand and other communications shall be deemed given (i) if personally delivered, when received, (ii) if sent by certified mail overnight delivery, when received, and (iii) if transmitted by facsimile, when sent, receipt confirmed by telephone or electronic means; provided, however, any notice pursuant to Section 11.1 shall be deemed given only when received.
Notwithstanding any provisions of this Indenture to the contrary, the Indenture Trustee shall have no liability based upon or arising from the failure to receive any notice required by or relating to this Indenture or the Notes.
If the Issuer mails a notice or communication to Noteholders, it shall mail a copy to the Indenture Trustee at the same time.
(b)Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if sent in writing and mailed, first class postage prepaid, to each Noteholder affected by such event, at its address as it appears in the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed (if any) for the giving of such notice. In any case where notice to Noteholder is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given. Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In the case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made that is satisfactory to the Indenture Trustee shall constitute a sufficient notification for every purpose hereunder.
Section XIII.2.Communication by Noteholders with Other Noteholders.
Noteholders may communicate with other Noteholders with respect to their rights under this Indenture or the Notes.
Section XIII.3.Certificate as to Conditions Precedent.
Upon any request or application by the Issuer to the Indenture Trustee to take any action under this Indenture, the Issuer shall furnish to the Indenture Trustee an Officer’s Certificate in form and substance reasonably satisfactory to the Indenture Trustee (which shall include the statements set forth in Section 13.4) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with.
Section XIII.4.Statements Required in Certificate.
Each certificate with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(a)a statement that the Person giving such certificate has read such covenant or condition;
(b)a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based;
(c)a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d)a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
Section XIII.5.Rules by the Indenture Trustee.
The Indenture Trustee may make reasonable rules for action by or at a meeting of Noteholders.
Section XIII.6.No Recourse Against Others.
An Authorized Officer, employee or Holder of any securities of the Issuer, as such, shall not have any liability for any obligations of the Issuer under the Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Noteholder by accepting a Note waives and releases all such liability.
Section XIII.7.Duplicate Originals.
The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture.
Section XIII.8.Benefits of Indenture.
Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Notes, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section XIII.9.Payment on Business Day.
In any case where any Payment Date, redemption date or maturity date of any Note shall not be a Business Day, then (notwithstanding any other provision of this Indenture) payment of interest or principal (and premium, if any), as the case may be, need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the Payment Date, redemption date, or maturity date; provided, that no interest shall accrue for the period from and after such Payment Date, redemption date, or maturity date, as the case may be.
Section XIII.10.Governing Law.
The laws of the State of New York, including, without limitation, the UCC and Section 5-1401 and 1402 of the General Obligations Law, but excluding any other conflicts of laws principles, shall govern and be used to construe this Indenture and the Notes and the rights and duties of the Issuer, Indenture Trustee, Note Registrar, Securities Intermediary, Note Calculation Agent, Noteholders and Note Owners.
Section XIII.11.Waiver of Jury Trial.
Each of the parties hereto hereby waives, to the fullest extent permitted by applicable law, any right that it may have to a trial by jury in respect to any legal action or proceeding relating to this Indenture.
Section XIII.12.Successors.
All agreements of the Issuer in this Indenture and the Notes shall bind its successor; provided, that the Issuer may not assign its obligations or rights under this Indenture or any Program Agreement. All agreements of the Indenture Trustee in this Indenture shall bind its successor.
Section XIII.13.Severability.
In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section XIII.14.Counterpart Originals; Electronic Signatures.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Each of the parties agree that this Indenture and any other documents to be delivered in connection herewith and therewith may be electronically signed, that any digital or electronic signatures (including pdf, facsimile or electronically imaged signatures provided by DocuSign or any other digital signature provider as specified in writing to the Indenture Trustee) appearing on this Indenture or such other documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility, and that delivery of any such electronic signature to, or a signed copy of, this Indenture and such other documents may be made by facsimile, email or other electronic transmission.
Section XIII.15.Table of Contents, Headings, etc.
The Table of Contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Section XIII.16.No Bankruptcy Petition Against the Issuer.
Each of the Noteholders, by its acceptance of an interest in a Note, will be deemed to covenant and agree, and each of the Servicer and the Indenture Trustee hereby covenants and agrees that, prior to the date which is one year and one day (or if longer, the applicable preference period then in effect) after the payment in full of the latest maturing Note, it will not institute against, or join with any other Person in instituting, against the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any federal or state bankruptcy or similar law; provided, that nothing in this Section 13.16 shall constitute a waiver of any right to indemnification, reimbursement or other payment from the Issuer pursuant to this Indenture. In the event that any such Noteholder or the Indenture Trustee takes action in violation of this Section 13.16, the Issuer shall file an answer with the bankruptcy court or otherwise properly contesting the filing of such a petition by any such Noteholder or the Indenture Trustee against the Issuer or the commencement of such action and raising the defense that such Noteholder or the Indenture Trustee has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it may assert. The provisions of this Section 13.16 shall survive the termination of this Indenture, and the resignation or removal of the Indenture Trustee.
Section XIII.17.No Recourse.
The obligations of the Issuer under this Indenture are solely the obligations of the Issuer. No recourse shall be had for the payment of any amount owing in respect of any fee hereunder or any other obligation or claim arising out of or based upon this Indenture or any other Program Agreement against any employee, officer, trustee, settlor, Affiliate, agent or servant of the Issuer. Fees, expenses or costs payable by the Issuer hereunder shall be payable by the Issuer only on a Payment Date and only to the extent that funds are then available or thereafter become available for such purpose pursuant to Article VI. This Section 13.17 shall survive the termination of this Indenture.
Section XIII.18.Third Party Beneficiaries.
The parties to this Indenture acknowledge and agree that, notwithstanding anything contained in this Indenture to the contrary, each of the Owner Trustee and the Mortgage Loan Custodian are intended to be, and are hereby made, a third party beneficiary under this Indenture, entitled to enforce its respective rights hereunder as if a party hereto.
Section XIII.19.Liability of Owner Trustee.
It is expressly understood and agreed by the parties hereto that (i) this Indenture is executed and delivered on behalf of the Issuer by Wilmington Savings Fund Society, FSB (“Wilmington Savings”), not individually or personally but solely in its capacity as owner trustee of the Issuer (in such capacity, the “Owner Trustee”), in the exercise of the powers and authority conferred and vested in it, pursuant to the Trust Agreement, (ii) each of the representations, warranties, undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, warranties, undertakings and agreements by Wilmington Savings but is made and intended for the purpose of binding only, and is binding only on, the Issuer, (iii) nothing herein contained shall be construed as creating any liability on Wilmington Savings, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (iv) Wilmington Savings has not made and will not make any investigation into the accuracy or completeness of any representations or warranties made by the Issuer in this Indenture and (v) under no circumstances shall Wilmington Savings be personally liable for the payment of any indebtedness, indemnities or expenses of the Issuer or be liable for the performance, breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer hereunder or any other related documents, as to all of which recourse shall be had solely to the assets of the Issuer.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective duly authorized officers as of the day and year above first written.
MELLO WAREHOUSE SECURITIZATION TRUST 2024-1, as Issuer
By: Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as Owner Trustee
By: /s/ Kyle Broadbent
Name: Kyle Broadbent
Title: Trust Officer
LOANDEPOT.COM, LLC, as Servicer
By:/s/ David Hayes
Name: David Hayes
Title: CFO
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Indenture Trustee and Note Calculation Agent
By:/s/ William Semsch
Name: William Semsch
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Standby Servicer and Securities Intermediary
By:/s/ William Semsch
Name: William Semsch
Title: Vice President
With respect to Section 4.4:
CLAYTON SERVICES LLC
By: /s/ Anthony Neske
Name: Anthony Neske
Title: Senior Vice President
SCHEDULE I
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
[***]
SCHEDULE II
SERVICING ADDENDUM
[***]
EXHIBIT A-1
[***]
EXHIBIT A-2
[***]
EXHIBIT B-1
FORM OF MONTHLY PAYMENT DATE STATEMENT (PRE-DEFAULT PERIOD)
[***]
Certain confidential information contained in this document, marked by “[***]”, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
EXHIBIT B-2
FORM OF MONTHLY PAYMENT DATE STATEMENT (TERMED OUT)
[***]
EXHIBIT C
FORM OF INVESTOR CERTIFICATION
[***]
EXHIBIT D-1
[***]
FORM OF MONTHLY SERVICER REPORT
EXHIBIT D-2
FORM OF MONTHLY SERVICER REPORT
[***]
Execution - Exhibit 10.2
Certain confidential information contained in this document, marked by “[***]”, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Master Repurchase
Agreement
Dated as of: September 27, 2024
Between: Mello Warehouse Securitization Trust 2024-1 (“BUYER”)
And: loanDepot.com, LLC (“SELLER”)
1. Applicability
From time to time the parties hereto may enter into transactions in which one party (“Seller”) agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Securities 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 Annex I hereto and in any other annexes identified herein or therein as applicable hereunder.
2. Definitions
(a)“Act of Insolvency”, with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appointment or election, (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment, or election, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in
September 1996 Master Repurchase Agreement
1
the entry of an order for relief, such an appointment, or election, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such party of a general assignment for the benefit of creditors, or (iv) the admission in writing by such party of such party’s inability to pay such party’s debts as they become due;
(b)“Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof;
(c)“Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Buyer’s Margin Percentage to the Repurchase Price for such Transaction as of such date;
(d)“Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction;
(e)“Confirmation”, the meaning specified in Paragraph 3(b) hereof;
(f)“Guaranty, the guaranty, dated as of the Closing Date, by LD Holdings Group LLC for the benefit of the Buyer;
(g)“Income”, with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon;
(h)“Margin Deficit”, the meaning specified in Paragraph 4(a) hereof;
(i)“Margin Excess”, the meaning specified in Paragraph 4(b) hereof;
(j)“Margin Notice Deadline”, the time agreed to by the parties in the relevant Confirmation, Annex I hereto or otherwise as the deadline for giving notice requiring same-day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for such purposes established in accordance with market practice);
(k)“Market Value”, with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities);
(l)“Price Differential”, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360-day-per-year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction);
(m)“Pricing Rate”, the per annum percentage rate for determination of the Price Differential;
(n)“Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates);
(o)“Purchase Date”, the date on which Purchased Securities are to be transferred by Seller to Buyer;
(p)“Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise, such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller’s obligations under clause (ii) of Paragraph 5 hereof;
(q)“Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term “Purchased Securities” with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b) hereof;
(r)“Repo Guarantor”, LD Holdings Group LLC or any permitted successor.
(s)“Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof;
(t)“Repurchase Price”, the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination;
(u)“Seller’s Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Seller’s Margin Percentage to the Repurchase Price for such Transaction as of such date;
(t)“Seller’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction.
3. Initiation; Confirmation; Termination
(a)An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller.
(b)Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a “Confirmation”). The Confirmation shall describe the Purchased Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this Agreement. The Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this Agreement, this Agreement shall prevail.
(c)In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the business day on which such termination will be effective. On the date specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer.
4. Margin Maintenance
(a)If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer may by notice to Seller require Seller in such Transactions, at Seller’s option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional Purchased Securities”), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such
aggregate Buyer’s Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller).
(b)If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”), then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer’s option, to transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller’s Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer).
(c)If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before the Margin Notice Deadline on any business day, the party receiving such notice shall transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the close of business in the relevant market on such day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash or Securities no later than the close of business in the relevant market on the next business day following such notice.
(d)Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller.
(e)Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions).
(f)Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this Agreement).
5. Income Payments
Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in respect of the Securities that is not otherwise received by Seller, to the full extent it would be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall reasonably determine in its discretion), on the date such Income is paid or distributed either (i) transfer to or
credit to the account of Seller such Income with respect to any Purchased Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding sentence (A) to the extent that such action would result in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of Default with respect to Seller has occurred and is then continuing at the time such Income is paid or distributed.
6. Security Interest
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, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Purchased Securities with respect to all Transactions hereunder and all Income thereon and other proceeds thereof.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately available funds. All Securities transferred by one party hereto to the other party (i) shall be in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as the party receiving possession may reasonably request, (ii) shall be transferred on the book-entry system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer.
8. Segregation of Purchased Securities
To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its possession and shall be identified as subject to this Agreement. Segregation may be accomplished by appropriate identification on the books and records of the holder, including a financial or securities intermediary or a clearing corporation. All of Seller’s interest in the Purchased Securities shall pass to Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.
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Required Disclosure for Transactions in Which the Seller Retains Custody of the Purchased Securities
Seller is not permitted to substitute other securities for those subject to this Agreement and therefore must keep Buyer’s securities segregated at all times, unless in this Agreement Buyer grants Seller the right to substitute other securities. If Buyer grants the right to substitute, this means that Buyer’s securities will likely be commingled with Seller’s own securities during the trading day. Buyer is advised that, during any trading day that Buyer’s securities are commingled with Seller’s securities, they [will]* [may]** be subject to liens granted by Seller to [its clearing bank]* [third parties]** and may be used by Seller for deliveries on other securities transactions. Whenever the securities are commingled, Seller’s ability to resegregate substitute securities for Buyer will be subject to Seller’s ability to satisfy [the clearing]* [any]** lien or to obtain substitute securities.
* Language to be used under 17 C.F.R. § 403.4(e) if Seller is a government securities broker or dealer other than a financial institution. ** Language to be used under 17 C.F.R. § 403.5(d) if Seller is a financial institution. |
9. Substitution
(a)Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall be made by transfer to Buyer of such other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted Securities shall be deemed to be Purchased Securities.
(b)In Transactions in which Seller retains custody of Purchased Securities, the parties expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased Securities; provided, however, that such other Securities shall have a Market Value at least equal to the Market Value of the Purchased Securities for which they are substituted.
10. Representations
Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this
Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not violate any law, ordinance, charter, by-law or rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Date for any Transaction, Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it.
11. Events of Default
In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof, (iv) Buyer fails, after one (1) business day’s notice, to comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller, Buyer or Repo Guarantor, (vi) any representation made by Seller or Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention not to, perform any of its obligations hereunder (each an “Event of Default”):
(a)The non-defaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), 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). The non-defaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as promptly as practicable.
(b)In all Transactions in which the defaulting party is acting as Seller, if the non-defaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, (i) the defaulting party’s obligations in such Transactions to repurchase all Purchased Securities, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the non-defaulting party and applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall immediately deliver to the non-defaulting party any Purchased Securities subject to such Transactions then in the defaulting party’s possession or control.
(c)In all Transactions in which the defaulting party is acting as Buyer, upon tender by the non-defaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall be deemed transferred to the non-defaulting party, and the defaulting party shall deliver all such Purchased Securities to the non-defaulting party.
(d)If the non-defaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the non-defaulting party, without prior notice to the defaulting party, may:
(i)as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the non-defaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and
(ii)as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the non-defaulting party may reasonably deem satisfactory, securities (“Replacement Securities”) of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the non-defaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefor on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source.
Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the Securities subject to any Transaction hereunder are instruments traded in a recognized market, (2) in the absence of a generally recognized source for prices or bid or offer quotations for any Security, the non-defaulting party may establish the source therefor in its sole discretion and (3) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the relevant Securities).
(e)As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the non-defaulting party for any excess of the price paid (or deemed paid) by the non-defaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder.
(f)For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or
deemed exercise by the non-defaulting party of the option referred to in subparagraph (a) of this Paragraph.
(g)The defaulting party shall be liable to the non-defaulting party for (i) the amount of all reasonable legal or other expenses incurred by the non-defaulting party in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.
(h)To the extent permitted by applicable law, the defaulting party shall be liable to the non-defaulting party for interest on any amounts owing by the defaulting party hereunder, from the date the defaulting party becomes liable for such amounts hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the exercise of the non-defaulting party’s rights hereunder. Interest on any sum payable by the defaulting party to the non-defaulting party under this Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate.
(i)The non-defaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
12. Single Agreement
Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.
13. Notices and Other Communications
Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address specified in Annex II hereto, 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.
14. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
15. Non-assignability; Termination
(a)The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by either party without the prior written consent of the other party, and any such assignment without the prior written consent of the other party shall be null and void. 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. This Agreement may be terminated by either party upon giving written notice to the other, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding.
(b)Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11 hereof.
16. Governing Law
This Agreement shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof.
17. 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 Paragraphs 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.
18. Use of Employee Plan Assets
(a)If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by either party hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required so to proceed.
(b)Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited
statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.
(c)By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller’s latest such financial statements, there has been no material adverse change in Seller’s financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party.
19. Intent
(a)The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
(b)It is understood that either party’s right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof, is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended.
(c)The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” 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).
(d)It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).
20. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a)in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has
taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder;
(b)in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and
(c)in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
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MELLO WAREHOUSE SECURITIZATION TRUST 2024-1
By: Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as Owner Trustee
By: /s/ Devon C. A, Reverdito
Name: Devon C. A. Reverdito
Title: Vice President
Date: September 27, 2024 | LOANDEPOT.COM, LLC
By: /s/ David Hayes
Name: David Hayes
Title: CFO Date: September 27, 2024 |
September 1996 Master Repurchase Agreement
1
Annex I
Supplemental Terms and Conditions
This Annex I forms a part of the Master Repurchase Agreement dated as of September 27, 2024 (the “Base Agreement”) between Mello Warehouse Securitization Trust 2024-1 (“Buyer”) and loanDepot.com, LLC (“Seller”) (the Base Agreement, this Annex I and the other annexes hereto, as they may be amended, supplemented or otherwise modified from time to time, collectively being the “Agreement”). Capitalized terms used but not defined in this Annex I shall have the meanings ascribed to them in the Agreement. References to sections in this Annex I shall, unless expressly stated to the contrary, mean sections of this Annex I.
1.Other Applicable Annexes. In addition to this Annex I and Annex II, the following Annexes shall form a part of the Agreement and shall be applicable thereunder:
Annex III.
2.Inconsistency. In the event of any inconsistency between the terms of the Base Agreement and this Annex, this Annex shall govern.
3.Rules of Construction. The following rules of construction shall apply to the interpretation of this Agreement:
(a)Save for the amendments made in this Annex I, Annex III and the Master Confirmation, the parties agree that the text of the body of the Base Agreement is intended to conform with the Master Repurchase Agreement dated September 1996 promulgated by The Bond Market Association and shall be construed accordingly.
(b)The parties agree that for the purpose of the Program Agreements, all references to “Buyer” shall mean Mello Warehouse Securitization Trust 2024-1, and all references to “Seller” shall mean loanDepot.com, LLC.
(c)Any and all references to “Purchased Securities” in the Agreement shall be deemed to refer to “Purchased Assets”.
(d)Any and all references to “Securities” in the Agreement shall be deemed to refer to “Assets”.
(e)Any and all references to “Additional Purchased Securities” in the Agreement shall be deemed to refer to “Additional Purchased Assets”.
(f)The interest in each Pooled Mortgage Loan being conveyed pursuant to any Transaction is a 100% beneficial interest in such Pooled Mortgage Loan, which interest is represented by the related Participation Certificate, and any reference to the transfer or delivery to Collateral Agent or Buyer of a Pooled Mortgage Loan, or to ownership or possession by Buyer or Collateral Agent on behalf of Buyer of a Pooled
Mortgage Loan, shall be understood to be a reference to the transfer, delivery or ownership of such 100% participation interest.
(g)All references to time in the Agreement shall mean the time in effect on that day in New York, New York.
(h)Except as may otherwise apply for income payable on particular Assets or as otherwise may be agreed to in writing by the parties hereto, all provisions in this Agreement for the transfer, payment or receipt of funds or Cash shall mean transfer of, payment in, or receipt of, United States dollars in immediately available funds.
4.Definitions (Paragraph 2). Paragraph 2 of the Base Agreement is hereby amended to add the following definitions and, in any case where the definition already exists in Paragraph 2, the definition is deleted in Paragraph 2 in its entirety and replaced with the following:
(a) “Accepted Servicing Practices” shall mean those mortgage servicing practices, including collection procedures of prudent mortgage servicing institutions which service mortgage assets of the same type as such Purchased Asset in the jurisdiction where the related Mortgaged Property is located and which are in accordance with the requirements of the related Agency Program, applicable law, FHA regulations and VA regulations, as applicable, and the requirements of any private mortgage insurer so that the FHA insurance, VA guarantee or any other applicable insurance or guarantee in respect of any Mortgage Loan is not voided or reduced.
(b)“Agency” shall mean Fannie Mae, Freddie Mac or Ginnie Mae, as applicable.
(c) “Agency Guidelines” shall mean the Ginnie Mae Guide, the Fannie Mae Guide and/or the Freddie Mac Guide, as the context may require, in each case as such guidelines have been or may be amended, supplemented or otherwise modified from time to time.
(d)“Agency Program” shall mean the FHLMC Program or the FNMA Program or the GNMA Program, as applicable.
(e) “Agency Security” shall mean a mortgage-backed security issued or fully guaranteed as to the receipt of timely interest and ultimate principal by an Agency and is backed by a pool of Eligible Mortgage Loans, in substantially the principal amount and with substantially the other terms as specified with respect to such security in the related Takeout Commitment. The particular Agency Security for the relevant Agency is alternatively referred to as: “GNMA Securities” (in the case of Ginnie Mae), “Fannie Mae Securities” (in the case of Fannie Mae) and “Freddie Mac Securities” (in the case of Freddie Mac).
(f)“Applicable Agency” shall mean GNMA, FNMA or FHLMC, as applicable.
(g)“Applicable Agency Mortgage Loan Schedule” means Form HUD 11706, FNMA Form 2005 or FHLMC Form 1034 or 1034A, as applicable.
(h)“Approvals” shall mean, with respect to the Seller, the approvals obtained by the Applicable Agency in designation of the Seller as a GNMA-approved issuer, a GNMA-approved servicer, a FHA-approved mortgagee, a FNMA approved Seller/Servicer or a FHLMC approved Seller/Servicer, as applicable, in good standing.
(i)“Asset” or “Eligible Asset” shall mean a Non-Pooled Mortgage Loan, a Pooled Mortgage Loan and/or Cash. On any date, all Non-Pooled Mortgage Loans then held by Buyer shall be listed on the End of Day Trust Receipt and all Pooled Mortgage Loans then held by Buyer shall be evidenced by one or more Participation Certificates.
(j)“Asset Tape” shall mean the schedule of Purchased Mortgage Loans held by the Mortgage Loan Custodian on behalf of the Buyer on such date. With respect to each Purchased Mortgage Loan, the Asset Tape will include, among others, the following fields: (1) the MERS identification number, (2) the loan number, (3) the property address, including city, state, zip code and county, (4) the type of loan, (5) mortgage note date, (6) the original mortgage rate and current mortgage rate, (7) the original term to maturity, (8) the amortized term to maturity, (9) the original principal balance, (10) the first payment date, (11) the maturity date, (12) whether such Purchased Mortgage Loan has primary mortgage insurance, (13) if applicable, the gross margin, (14) whether such Purchased Mortgage Loan is a balloon loan, (15) if applicable, the maximum mortgage rate, (16) whether such Purchased Mortgage Loan is an interest only loan, (17) if applicable, the interest only term, (18) whether such Purchased Mortgage Loan is subject to a prepayment penalty, (19) if applicable, the prepayment penalty type, (20) if applicable, the periodic cap, (21) the monthly payment, (22) the investor status, (23) the loan purpose, (24) the appraised value of the related property, (25) the purchase price of the related property, (26) the amount of any second lien, (27) whether the related property consists of manufactured housing, (28) the property type, (29) if applicable, the number of units, (30) whether the property is owner-occupied, (31) the documentation level, (32) the borrower credit score, (33) the LTV, (34) if applicable, the CLTV, (35) the debt-to-income ratio of the borrower, (36) whether the borrower is self-employed, (37) whether such Purchased Mortgage Loan was originated as a “high cost” loan, (38) the lien position of the related mortgage, (39) the principal balance of any other lien on the property, (40) the funding date, (41) the channel code, (42) whether such Purchased Mortgage Loan is registered on MERS, (43) whether such Purchased Mortgage Loan is a home equity line of credit, (44) if applicable, the last mortgage rate change date, (45) the “paid to” date, (46) the next due date, (47) whether the borrower is subject to bankruptcy proceedings, (48) if applicable, the mortgage rate change date, (49) the agency approval number, (50) the number of days such Purchased Mortgage Loan has been owned by the Buyer, (51) the Purchase Date, (52), the Repurchase Date, (53) the Market Value, (54) the Purchase Price, (55) the Repurchase Price, (56) any other items agreed upon by Seller and Buyer, (57) whether such Purchased Mortgage Loan is a Pooled Mortgage Loan or Non-Pooled Mortgage Loan, (58) the automated underwriting system (“AUS”) number or, if such Purchased Mortgage Loan does not have an AUS number, the Agency case number (59) whether the Purchased Mortgage Loan is a Wet Loan and
(60) whether such Purchased Mortgage Loan is an FHA Streamline Mortgage Loan or a VA IRRR Mortgage Loan and (61) with respect to each FHA Streamline Mortgage Loan and VA IRRR Mortgage Loan, the Collateral Analytics value for the related Mortgaged Property.
(k)“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 transfer of the Mortgage to the party indicated therein.
(l)“Authorized Person” shall mean any person, whether or not any such person is an officer or employee of Buyer or Seller, as the case may be, duly authorized to give Written Instructions on behalf of Buyer or Seller, such persons and their specimen signatures to be designated in Schedule CA-I attached to Annex III, as such Schedule CA-I may be amended from time to time.
(m)“Bankruptcy Code” means the United States Bankruptcy Code, as amended.
(n)For purposes of the Agreement, “business day” or “Business Day”, with respect to any Transaction, a day on which regular trading may occur in the principal market for the Purchased Assets subject to such Transaction, which includes shortened trading days, days on which trades are permitted to occur but do not in fact occur and days on which the Purchased Assets are subject to a percentage of movement or volume limitations; provided, however, that for purposes of calculating Market Value, such term shall mean a day on which regular trading occurs in the principal market for the assets the value of which is being determined. Notwithstanding the foregoing, (i) for the purpose of Paragraph 4 of the Agreement, “business day” shall mean any day on which regular trading occurs in the principal market for any Purchased Assets or for any assets constituting Additional Purchased Assets under any outstanding Transaction hereunder and “next business day” shall mean the next day on which a transfer of Additional Purchased Assets may be effected in accordance with Paragraph 7 of the Agreement, (ii) in no event shall a Saturday or Sunday be considered a business day, and (iii) in no event shall be a day which banking institutions in New York City, NY, Chicago, IL, Wilmington, DE or any other city where the corporate trust office or the principal office of the Indenture Trustee, Owner Trustee or the custodian is located, are authorized or required by law or executive order to be closed for business.
(o)“Buyer’s Account” shall mean the custodial account having the account information set forth on Schedule CA-II to Annex III, which account is maintained by Collateral Agent on behalf of Buyer at the Securities Intermediary for the deposit of Eligible Assets to be held by Collateral Agent on behalf of Buyer pursuant to the terms of this Agreement in connection with Transactions.
(p)“Buyer’s Source of Funds” means the Buyer’s Notes issued pursuant to the Indenture or the holders thereof, as the context may require.
(q)“Cash” shall mean U.S. Dollars in immediately available funds.
(r) “Cash Equivalents” shall mean ([***].
(s)“CLTV” means with respect to any Mortgage Loan, the sum of the principal balance such Mortgage Loan and the outstanding principal balance (or the full amount permissible under the line of credit in the event the subordinate lien is a home equity line of credit) of any related senior or subordinate lien, in each case as of the date of origination of the Mortgage Loan, divided by the appraised value, or AUS accepted value, in the case of a property inspection waiver mortgage loan, of the Mortgaged Property as of the origination date.
(t)“Collateral Analytics” means Collateral Analytics (CA) or its permitted successors and assigns.
(u)“Confirmation” shall have the meaning specified in Section 5 of this Annex I.
(v)“Conversion Date” means, with respect to any Non-Pooled Mortgage Loan that (i) is subject to a Transaction and (ii) that will be converted into a Pooled Mortgage Loan by Seller, the date of such conversion. A Conversion Date also constitutes a Repurchase Date, on which such Pooled Mortgage Loan shall replace such Non-Pooled Mortgage Loan and automatically become a Purchased Mortgage Loan subject to a new Transaction.
(w)“Conversion Mortgage Loan” means a Non-Pooled Mortgage Loan subject to a Transaction that will be converted by Seller into a Pooled Mortgage Loan on the related Conversion Date.
(x)“Cooperative Corporation” means, with respect to any Cooperative Loan, the cooperative apartment corporation that holds legal title to the related Cooperative Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
(y)“Cooperative Loan” means a Mortgage Loan that is secured by a first lien on and perfected security interest in Cooperative Shares and the related Proprietary Lease granting exclusive rights to occupy the related Cooperative Unit in the building owned by the related Cooperative Corporation.
(z)“Cooperative Project” means, with respect to any Cooperative Loan, all real property and improvements thereto and rights therein and thereto owned by a Cooperative Corporation including without limitation the land, separate dwelling units and all common elements.
(aa)“Cooperative Shares” means, with respect to any Cooperative Loan, the shares of stock issued by a Cooperative Corporation and allocated to a Cooperative Unit and represented by a stock certificate.
(ab)“Cooperative Unit” means, with respect to a Cooperative Loan, a specific unit in a Cooperative Project.
(ac)“Credit Score” means with respect to any Mortgage Loan, the credit score of the related Mortgagor provided by Experian/Equifax/TransUnion/Fair Isaac or such other organization acceptable to the Buyer providing credit scores at the time of origination of such Mortgage Loan. If two credit scores are obtained, the Credit Score shall be the lower of the two credit scores. If three credit scores are obtained, the Credit Score shall be the middle of the three credit scores. There is only one (1) Credit Score for any loan regardless of the number of borrowers and/or applicants.
(ad)“Collateral Agent” shall mean U.S. Bank Trust Company, National Association and its successors and assigns.
(ae)“Daily Collateral Agent Statement” shall have the meaning specified in Annex III.
(af)“Diligence Provider” shall mean Clayton Services LLC or a Qualified Successor Diligence Provider appointed by Seller, and their respective successors and assigns under the Monitoring Agreement.
(ag)“Diligence Report” shall mean each diligence report provided by the Diligence Provider pursuant to the Monitoring Agreement.
(ah)“Disbursement Agent” shall mean Deutsche Bank National Trust Company, not in its individual capacity but solely as disbursement agent.
(ai)“Eligible Mortgage Loan” shall mean a first-lien, fixed rate or adjustable-rate Mortgage Loan originated in accordance with the criteria of Fannie Mae or Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans and in each case, meeting the representations and warranties set forth on Schedule I hereto and other criteria set forth on Schedule II hereto, together with (i) the Servicing Rights related thereto, (ii) all related records, (iii) all rights of the Seller to receive from any third party or to take delivery of any records or other documents which constitute a part of the related mortgage files or servicing files and (iv) all documents, instruments, chattel paper, and general intangibles and all products and proceeds relating to or constituting any or all of the foregoing. Furthermore, no Mortgage Loan shall be an Eligible Mortgage Loan if (i) any payment [***].
(aj)“End of Day Trust Receipt” means the cumulative Trust Receipt delivered by the Mortgage Loan Custodian on each Business Day as provided in section 4(b)(iii) of the Mortgage Loan Custodial and Disbursement Agreement.
(ak)“Escrow Payments” means the amounts constituting ground rents, taxes, assessments, water charges, sewer rents, primary mortgage insurance policy premiums, fire and hazard insurance premiums and other payments required to be escrowed by the
Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note or Mortgage.
(al)“Expiration Date” shall mean September 25, 2026 or if such date is not a Business Day, the Business Day immediately following such date.
(am)“Fannie Mae” shall mean Federal National Mortgage Association and its successors and assigns.
(an)“Fannie Mae Guide” shall mean the Fannie Mae MBS Selling and Servicing Guide, as such Guide may hereafter from time to time be amended.
(ao)“FHA” shall mean the Federal Housing Administration, an agency within HUD, or any successor thereto and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
(ap)“FHA Mortgage Insurance” shall mean mortgage insurance authorized under Sections 203(b), 213, 221(d)(2), 222 and 235 of the National Housing Act and provided by the FHA.
(aq)“FHA Mortgage Insurance Contract” shall mean the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
(ar)“FHA Mortgage Loan” shall mean a Mortgage Loan that is the subject of an FHA Mortgage Insurance Contract.
(as)“FHA Regulations” shall mean regulations promulgated by HUD under the Federal Housing Administration Act, codified in 24 Code of Federal Regulations, and other HUD issuances relating to FHA Mortgage Loans, including the related handbooks, circulars, notices and mortgagee letters.
(at)“FHA Streamline Mortgage Loan” shall mean a Mortgage Loan originated under the FHA streamline program
(au)“FHLMC Program” shall mean the FHLMC Home Mortgage Guarantor Program or the FHLMC FHA/VA Home Mortgage Guarantor Program, as described in the FHLMC Guide.
(av)“Final Diligence Report” shall mean each final diligence report provided by the Diligence Provider pursuant to the Monitoring Agreement.
(aw)“FNMA Program” shall mean the Fannie Mae Guaranteed Mortgage-Backed Securities Program, as described in the Fannie Mae Guide.
(ax)“Freddie Mac” shall mean Federal Home Loan Mortgage Corporation and its successors and assigns.
(ay)“Freddie Mac Guide” shall mean the Freddie Mac Sellers’ and Servicers’ Guide, as such Guide may hereafter from time to time be amended.
(az)“Ginnie Mae” shall mean Government National Mortgage Association and its successors and assigns.
(ba)“Ginnie Mae Guide” means the Ginnie Mae Mortgage-Backed Securities Guide I or II, as such Guide may hereafter from time to time be amended.
(bb)“GNMA Program” shall mean the Ginnie Mae Mortgage-Backed Securities Program, as described in the Ginnie Mae Guide.
(bc)“Governmental Authority” means any federal, state, local or foreign court or governmental department, commission, board, bureau, agency, authority, instrumentality or regulatory body.
(bd)“HARP” shall mean the Home Affordable Refinance Program.
(be)“HUD” shall mean the U.S. Department of Housing and Urban Development.
(bf)“Indebtedness” shall mean, [***].
(bg)“Indenture” shall mean the Indenture, dated as of September 27, 2024, among Mello Warehouse Securitization Trust 2024-1, as issuer, the Seller, as servicer, U.S. Bank National Association, as standby servicer and securities intermediary, and U.S. Bank Trust Company, National Association, as indenture trustee and note calculation agent.
(bh)“Indenture Trustee” shall mean U.S. Bank Trust Company, National Association, as indenture trustee under the Indenture, and any successor thereto.
(bi)“Initial Diligence Report” shall mean each initial diligence report provided by the Diligence Provider pursuant to the Monitoring Agreement.
(bj)“Instrument” shall mean an executed Trust Receipt and assignment of Trust Receipt, a Participation Certificate or any other participation certificate, promissory note or other instrument or document issued by a custodian, originator, obligor or other third party and assignable to U.S. Bank Trust Company, National Association, as Collateral Agent, accompanied by an executed instrument of transfer (which may be in blanket form), and which may or may not be authenticated by Mortgage Loan Custodian.
(bk)“Interest Coverage Amount” means, for any Remittance Date, the excess, if any of (a) the aggregate interest payment amount due on Buyer’s Source of Funds on the immediately following payment date over (b) the aggregate Price Differential available on such Remittance Date for payment of interest on the Buyer’s Source of Funds.
(bl)“Level C Exception” means, [***].
(bm)“Level D Exception” means[***].
(bn)“Lien” means, when used with respect to any Person, any interest in any real or personal property, asset or other right held, owned or being purchased or acquired by such Person which secures payment or performance of any obligation, and shall include any mortgage, lien, pledge, encumbrance, charge, retained security title of a conditional vendor or lessor, or other security interest of any kind, whether arising under a security agreement, mortgage, lease, deed of trust, chattel mortgage, assignment, pledge, retention or security title, financing or similar statement, or notice or arising as a matter of law, judicial process or otherwise.
(bo)“Liquidity” shall mean cash and Cash Equivalents of Seller, together with undrawn availability under any committed warehouse facility that is similar in nature to the facility provided under this Agreement under which Seller is a borrower.
(bp)“Loan Pool” means the pool of Purchased Mortgage Loans identified in a particular Applicable Agency Mortgage Loan Schedule delivered by Seller to Mortgage Loan Custodian under the Mortgage Loan Custodial and Disbursement Agreement.
(bq)“LTV” means with respect to any Mortgage Loan, the principal balance such Mortgage Loan and the outstanding principal balance (or the full amount permissible under the line of credit in the event the subordinate lien is a home equity line of credit) of any related subordinate lien, in each case as of the date of origination of the Mortgage Loan, divided by the appraised value, or AUS accepted value, in the case of a property inspection waiver mortgage loan, of the Mortgaged Property as of the origination date.
(br)“Margin Account” shall mean a sub-account of the Buyer’s Account, which may be a sub-ledger account.
(bs)“Margin Notice Deadline” shall mean [***] (New York time), unless otherwise agreed to between the parties with respect to any Transaction.
(bt)“Market Value” shall mean with respect to any Eligible Asset, as of any date of determination, (i) the market value of such Eligible Asset as computed by the Collateral Agent using the Pricing Methodology or (ii) if the Pricing Methodology is not otherwise available to the Collateral Agent on such date, the value of such Eligible Asset as determined in good faith and in a commercially reasonable manner by the Seller and provided to the Collateral Agent and the Buyer in the daily Asset Tape delivered by the Seller on such date.
(bu)“Master Confirmation” means the Master Repurchase Agreement Confirmation dated as of September 27, 2024 between Seller and Buyer, as it may be amended from time to time.
(bv)“Material Adverse Effect” shall mean a material adverse effect on (a) the property, business, operations or financial condition of Seller, (b) the ability of Seller to
perform its obligations under any of the Program Agreements to which it is a party, (c) the validity or enforceability of any material provision of the Program Agreements, (d) the rights and remedies of Buyer under any of the Program Agreements, (e) the timely repurchase of the Purchased Mortgage Loans or payment of other amounts payable in connection therewith or (f) the Purchased Mortgage Loans taken as a whole.
(bw)“Maximum Aggregate Purchase Price” shall have the meaning assigned to it in the Master Confirmation.
(bx)“MERS” means the Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
(by)“MERS Identification Number” means the identification number assigned to mortgage loans registered with MERS on the MERS® System.
(bz)“MERS Mortgage Loan” means any Mortgage Loan for which MERS is acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof, or as nominee for any subsequent assignee of the originator pursuant to an assignment of mortgage to MERS.
(ca)“MERS® System” means the system of recording transfers of Mortgages electronically maintained by MERS.
(cb)“Monitoring Agreement” shall have the meaning assigned to it under the Indenture.
(cc)“Monthly Aggregate Fee” with respect to the accrual period relating to a Repurchase Date, means the sum of the monthly fees owed to third-party service providers relating to the Buyer’s Source of Funds and payable pursuant to the Indenture on the payment date immediately following such Repurchase Date.
(cd)“Mortgage” shall mean the mortgage, deed of trust or other instrument, which creates a first lien on either (i) with respect to a Mortgage Loan other than a Cooperative Loan, the fee simple or leasehold estate in such real property or (ii) with respect to a Cooperative Loan, the Proprietary Lease and related Cooperative Shares, which in either case secures the Mortgage Note.
(ce)“Mortgage Loan” shall mean a first lien mortgage loan or Cooperative Loan secured by a residential property which the Mortgage Loan Custodian has been instructed to hold for Buyer pursuant to the Mortgage Loan Custodial and Disbursement Agreement, and which Mortgage Loan includes, without limitation, (i) a Mortgage Note, the related Mortgage and all other related loan documents, (ii) all right, title and interest of Seller in and to the Mortgaged Property covered by such Mortgage and (iii) the related Servicing Rights.
(cf)“Mortgage Loan Custodial and Disbursement Agreement” shall mean the Custodial and Disbursement Agreement, dated as of September 27, 2024, among Seller, Buyer, and Deutsche Bank National Trust Company as Mortgage Loan Custodian and as Disbursement Agent, as amended, restated, supplemented or otherwise modified from time to time.
(cg)“Mortgage Loan Custodian” shall mean Deutsche Bank National Trust Company, not in its individual capacity but solely as custodian.
(ch)“Mortgage Loan Documents” shall mean, with respect to each Mortgage Loan, the documents comprising the Mortgage Loan File for such Mortgage Loan, which shall include each of the documents set forth on Schedule III hereto.
(ci)“Mortgage Loan File” shall mean, with respect to each Mortgage Loan, the related files required to be delivered to the Mortgage Loan Custodian by the Seller pursuant to the Mortgage Loan Custodial and Disbursement Agreement.
(cj)“Mortgage Note” shall mean, with respect to any Mortgage Loan, the related promissory note together with all riders thereto and amendments thereof or other evidence of indebtedness of the related mortgagor.
(ck)“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) or Cooperative Loan collateral and all other collateral securing repayment of the debt evidenced by a Mortgage Note.
(cl)“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.
(cm)“Net Worth” shall mean, [***].
(cn)“Non-Pooled Mortgage Loan” means an Eligible Mortgage Loan that is not a Pooled Mortgage Loan.
(co)“Noteholder” shall have the meaning assigned to it under the Indenture.
(cp)“Notes” means the Mello Warehouse Securitization Trust 2024-1, Mello Warehouse Securitization Notes, Series 2024-1, issued under the Indenture.
(cq)“Notice of Default” shall mean a written notice delivered by Buyer to Collateral Agent and Seller, or by Seller to Collateral Agent and Buyer, informing Collateral Agent and the defaulting party of an Event of Default pursuant to this Agreement and setting forth the specific Event of Default hereunder. Buyer and Seller agree that no Notice of Default shall be delivered to Collateral Agent unless and until such Event of Default remains uncured as of the expiration of the related cure period, if any.
(cr)“Optional Prepayment” shall have the meaning assigned to such term in the Master Confirmation.
(cs)“Owner Trustee” shall mean Wilmington Savings Fund Society, FSB, not in its individual capacity but solely in its capacity as owner trustee under the Trust Agreement, or any successor or assign in such capacity.
(ct)“Participation Certificate” shall mean a certificate, in the form attached to the Mortgage Loan Custodial and Disbursement Agreement as Exhibit 19, issued by Seller to Buyer and authenticated by the Mortgage Loan Custodian under the Mortgage Loan Custodial and Disbursement Agreement, evidencing the 100% beneficial ownership interest in one or more Eligible Mortgage Loans that are either identified on the Applicable Agency Mortgage Loan Schedule or, with respect to Eligible Mortgage Loans pooled for Freddie Mac, on a computer tape submitted or to be submitted to Freddie Mac, as applicable.
(cu)“Permitted Investments” means any one or more of the following types of investments and may include investments for which the Collateral Agent or any of its affiliates serves as an investment manager or advisor:
1.demand and time deposits in, certificates of deposit of, banker’s acceptances issued by or federal funds sold by any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state authorities, so long as such depository institution or trust company has a short-term unsecured debt or issuer rating of at least A-1 from S&P and R-1 (middle) from DBRS;
2.commercial paper issued by an institution having a commercial paper rating of A-1 from S&P and R-1 (high) from DBRS;
3.guaranteed investment contracts issued by an insurance company or other corporation having a long-term unsecured debt rating of “AAA” with respect to S&P or “AAA” with respect to DBRS (to the extent rated by DBRS);
4.money market funds having ratings of “AAA” with respect to S&P or “AAA” with respect to DBRS (to the extent rated by DBRS), at the time of such investment; and
5.securities issued or directly and fully guaranteed as to timely and ultimate payment by the United States government (or any agency or instrumentality thereof); and
6.any other investments that satisfy the investment criteria of the Rating Agency for transactions in which the rated obligations have ratings equal to the highest rating then being assigned by the Rating Agency to the Buyer’s Source of Funds.
(cv)“Permitted Liens” shall mean (1) the lien of non-delinquent 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 which are acceptable to mortgage lending institutions generally, (3) any security agreement, chattel mortgage or equivalent document evidencing such Mortgage Loan, (4) liens created pursuant to any federal, state or local law, regulation or ordinance affording liens for the costs of cleanup of hazardous substances or hazardous wastes or for other environmental protection purposes and (5) other matters to which like properties are commonly subject which do not individually or in the aggregate materially interfere with the benefits of the security intended to be provided by the Mortgage.
(cw)“Persons” means and includes an individual, a partnership, a corporation, a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a government or an agency or political subdivision or instrumentality thereof.
(cx)“PMI Policy” shall mean a policy of primary mortgage guaranty insurance issued by a qualified insurer.
(cy)“Pooled Mortgage Loan” means an Eligible Mortgage Loan (i) as to which 100% of the beneficial interests therein are evidenced by a Participation Certificate and (ii) as to which the Mortgage Loan Custodian has certified or will certify to the Applicable Agency that such Mortgage Loan meets all of the criteria specified in the related Agency Guidelines for the securitization of mortgage loans of that type and that such Mortgage Loan has been pooled or will be pooled in a Loan Pool for the purpose of backing an Agency Security.
(cz)“Prepayment Amount” shall have the meaning assigned to such term in the Master Confirmation.
(da)The definition of “Price Differential” is amended by deleting the definition in its entirety and replacing it with the following:
“Price Differential”, for any Transaction and any date of determination, shall be an amount calculated by application of the Pricing Rate for such date of determination to the Purchase Price for such Transaction on the basis of a 360-day year and the actual number of days during the period commencing on (and including) the related Purchase Date and ending on (but excluding) the Repurchase Date. For each Transaction, the accrued and unpaid Price Differential will be settled in Cash by Seller on each Repurchase Date. In no event will the Price Differential for a Repurchase Date be less than the aggregate amount of interest due on Buyer’s Source of Funds plus any related fees and expenses for the related accrual period.
(db)“Pricing Methodology” means, with respect to any Eligible Mortgage Loan, the pricing methodology described on Exhibit A-2.
(dc)The definition of “Pricing Rate” in Paragraph 2(l) of the Agreement shall be deleted in its entirety and replaced with the following definition:
“Pricing Rate” means, for any Repurchase Date or date of determination, [***].
(dd)“Program Agreements” shall mean this Agreement (which includes all Annexes, schedules and addenda), the trust agreement pursuant to which Buyer is constituted, the Guaranty, the Mortgage Loan Custodial and Disbursement Agreement and any other agreement entered into by Seller, on the one hand, and Buyer and/or any of its affiliates or subsidiaries (or custodian on its behalf) on the other, in connection herewith or therewith and designated as a Program Agreement.
(de)“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.
(df)“Proprietary Lease” means the lease on a Cooperative Unit evidencing the possessory interest of the owner of the Cooperative Shares in such Cooperative Unit.
(dg)The definition of “Purchase Date” is amended by deleting the definition in its entirety and replacing it with the following:
“Purchase Date” shall mean each day specified as such in accordance with the second sentence of the first paragraph of Section 5 of Annex I.
(dh)The definition of “Purchase Price” is amended by deleting the definition in its entirety and replacing it with the definition set forth in the Master Confirmation.
(di)The definition of “Purchased Securities” is amended by deleting the definition in its entirety and replacing it with the following:
“Purchased Assets” shall mean all Assets, together with the related records and servicing rights, transferred by Seller to Buyer in a Transaction hereunder and any Assets substituted therefor in accordance with Section 4(d) of Annex III. The term “Purchased Assets” with respect to any Transaction at any time also shall include Additional Purchased Assets delivered pursuant to Paragraph 4(a) of the Base Agreement.
(dj) “Purchased Mortgage Loans” shall mean the collective reference to Pooled Mortgage Loans and Non-Pooled Mortgage Loans that (w) are listed on the Daily Collateral Agent Statement related to the current Transaction, (x) are serviced by the Servicer for the benefit of the Buyer, (y) are held by the Mortgage Loan Custodian pursuant to the Mortgage Loan Custodial and Disbursement Agreement for the benefit of the Buyer and (z) have not yet been transferred back to Seller by Buyer in a repurchase transaction.
(dk)“Qualified Mortgage” has the meaning specified in Section 129C of the federal Truth-in-Lending Act, 15 U.S.C. 1639c and as further defined in Regulation Z, 12 C.F.R. Part 1026.43(e), as the foregoing may be amended from time to time.
(dl)“Qualified Successor Diligence Provider” shall have the meaning assigned to it under the Indenture.
(dm)“Rating Agency” means DBRS, Inc.
(dn)“Rating Agency Condition” shall have the meaning assigned to it under the Indenture.
(do)“Remittance Date” means the Business Day prior to the payment date relating to the Buyer’s Source of Funds.
(dp)“Replacement Assets” shall have the meaning assigned to such term in the Master Confirmation.
(dq)The definition of “Repurchase Date” is amended by deleting the definition in its entirety and replacing it with the definition set forth in the Master Confirmation.
(dr)The definition of “Repurchase Price” in Paragraph 2(r) of the Agreement shall be deleted in its entirety and replaced with the following definition:
“Repurchase Price” means:
(i) for all Purchased Assets, collectively, that are the subject of a Transaction, the aggregate Purchase Price paid by the Buyer for such Purchased Assets plus the applicable Price Differential minus any amounts deposited by the Seller into the Buyer’s Account to cure a Margin Deficit;
(ii) for any individual Purchased Mortgage Loan that is repurchased on a Repurchase Date (unless it is a defective Qualified Mortgage as described in clause (iii)), its ratable share (based on the outstanding principal balance of such Purchased Mortgage Loan compared to the aggregate outstanding principal balance of all Purchased Mortgage Loans subject to such Transaction) of the amount specified in the foregoing clause (i); or
(iii) for any individual Purchased Mortgage Loan that is to be repurchased on a date other than a Repurchase Date and for any Purchased Mortgage Loan that is to be repurchased by reason of its failure to constitute a Qualified Mortgage (as provided in Section 8(g) of this Annex I), the sum of the outstanding principal balance for such Purchased Mortgage Loan on the such date and the accrued interest thereon as of such date.
(ds)“Responsible Officer” shall mean, with respect to Collateral Agent and Securities Intermediary, any officer, including any managing director, principal, director, vice president, treasurer, secretary, trust officer or any other officer of Collateral Agent or Securities Intermediary, and in each case having direct responsibility for the administration of this Agreement, and also, with respect to a particular matter, any other officer, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
(dt)“Seller’s Account” shall mean the custodial account (Account number [***]) maintained by U.S. Bank National Association on behalf of Seller for the deposit of Assets to be held by U.S. Bank National Association on behalf of Seller and any account for the deposit of Cash maintained in connection therewith.
(du)“Servicer” shall mean the servicer of the Purchased Assets.
(dv)“Servicing File” shall mean, with respect to each Purchased Mortgage Loan, the file retained by the Servicer consisting of (1) originals of all applicable documents in the related loan file as described in the Mortgage Loan Custodial and Disbursement Agreement which are not delivered to Buyer or Buyer’s designee, (2) copies of any other applicable documents in such loan file maintained by the Servicer and (3) all other documents and records maintained by the Servicer in respect of such Purchased Mortgage Loan or other Purchased Mortgage Loan, including without limitation the Servicing Records.
(dw)“Review Date” shall have the meaning assigned to it under the Indenture.
(dx)“Securities Intermediary” shall mean U.S. Bank National Association and its successors and assigns.
(dy)“Servicing Records” shall mean 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 the Purchased Assets.
(dz)“Servicing Rights” shall mean contractual, possessory or other rights of Seller, Servicer or any other person, whether arising under any servicing agreement, the Mortgage Loan Custodial and Disbursement Agreement (if any) or otherwise to administer or service any Purchased Asset or to possess related Servicing Files.
(ea)“Strict Compliance” shall mean the compliance of the Seller and the Mortgage Loans with the requirements of the applicable Agency Guide and as amended by any agreements between the Seller and the Applicable Agency, sufficient to enable the Seller to issue and Ginnie Mae to guarantee or Fannie Mae or Freddie Mac to issue and guarantee the related Agency Security, as applicable.
(eb)“Takeout Commitment” means a commitment of Seller to sell one or more Purchased Mortgage Loans to a Takeout Investor and the corresponding Takeout Investor’s executed trade confirmation to Seller to effectuate the foregoing. With respect to any Takeout Commitment with an Agency, the applicable agency documents will list the Buyer as sole subscriber.
(ec)“Takeout Investor” means (i) an Agency or (ii) any other party identified by the Seller that has made a Takeout Commitment.
(ed)“Takeout Price” means, with respect to a Purchased Asset, the purchase price to be paid for such Purchased Asset by the Takeout Investor pursuant to the related Takeout Commitment.
(ee)“Takeout Settlement Date” means, with respect to a Takeout Commitment, the date set forth therein on which the sale of the related Mortgage Loans to a Takeout Investor will occur or the date set forth therein on which the sale of the related Agency Security to the Takeout Investor will be settled on a delivery-versus-payment basis.
(ef)“Tangible Net Worth” shall mean [***].
(eg)“Third Party Financed Loan” shall have the meaning assigned to such term in Section 3(a)(iii)(A) of Annex III.
(eh)“Third Party Financier” shall have the meaning assigned to such term in Section 3(a)(iii)(A) of Annex III.
(ei)“Third Party Loan Purchase Price” shall have the meaning assigned to such term in Section 3(a)(iii)(A) of Annex III.
(ej)“Trust Agreement” means, the Amended and Restated Trust Agreement of the Buyer, dated as of September 27, 2024, among the Owner Trustee, U.S. Bank Trust Company, National Association, as certificate registrar and certificate paying agent, and the Seller, as the same may be amended, modified or supplemented from time to time.
(ek)“Trust Receipt” shall mean the Mortgage Loan Custodian’s trust receipt, in the form attached as Exhibit 1 to the Mortgage Loan Custodial and Disbursement Agreement, and delivered pursuant to the Mortgage Loan Custodial and Disbursement Agreement.
(el)“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the specified jurisdiction.
(em) “Underwriting Guidelines” shall mean the underwriting guidelines of the originator of the related Mortgage Loan (which originator may be the Seller, as applicable), acceptable to Buyer in its sole discretion and as in effect as of the Closing Date.
(en)“VA” shall mean the Veterans Administration, an agency within HUD, or any successor thereto and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
(eo)“VA IRRR Mortgage Loan” shall mean a VA Interest Rate Reduction Refinance Loan.
(ep)“Wet Loan” shall mean an Eligible Mortgage Loan for which the required loan documents included in the Mortgage Loan File have not yet been delivered to the Mortgage Loan Custodian.
(eq)“Written Instructions” shall mean written communications actually received by Collateral Agent from an Authorized Person or from a person reasonably believed by Collateral Agent to be an Authorized Person by or any electronic system whereby the receiver of such communications is able to verify by codes, passwords or otherwise with a reasonable degree of certainty the identity of the sender of such communications.
5.Initiation; Confirmation.
It is the intention of the parties that there shall be just one Transaction outstanding at any time, and that all Assets constituting Purchased Assets shall be subject to such Transaction. Accordingly, (x) the Closing Date and each date on which Seller transfers new Purchased Assets to Buyer (other than a substitution of Replacement Assets pursuant to section 4(d) of Annex III or a transfer of Additional Purchased Assets pursuant to Paragraph 4(a) of the Base Agreement) shall each constitute a Purchase Date for a new Transaction, and each such date
(other than the Closing Date) shall also constitute a Repurchase Date for the Transaction in effect immediately prior to such Purchase Date, and (y) each date specified in clauses (i), (ii), (iv) and (vi) of the definition of Repurchase Date shall constitute a new Purchase Date. Upon the occurrence of the date specified in either clause (iii) or clause (vii) of the definition of Repurchase Date, the outstanding Transaction shall terminate and no new Purchase Date shall occur.
The words “orally or” shall be deleted from the first sentence of Paragraph 3(a) of the Base Agreement.
The words “or make available electronically” shall be added immediately after the words “promptly deliver” in the first sentence of Paragraph 3(b) of the Base Agreement.
Paragraph 3(b) of the Base Agreement shall be amended and restated in its entirety to read as follows:
“The written confirmation (each, a “Confirmation”) of each Transaction entered into between Seller and Buyer under this Agreement shall consist of (i) the Master Confirmation, the terms of which are applicable to each such confirmation, and (ii) the information regarding such Transaction in the Daily Collateral Agent Statement delivered on the Purchase Date for such Transaction.”
6.Margin.
The definition of Margin Excess in Paragraph 2(h) is hereby deleted. Paragraph 4(a) of the Base Agreement is amended by deleting the paragraph in its entirety and replacing it with Section 4(b) of Annex III. Paragraph 4(b) of the Agreement is amended by deleting the paragraph in its entirety and replacing it with “[Reserved]”. The words “or Margin Excess, as the case may be” and “or a Margin Excess” from Paragraphs 4(e) and 4(f) are hereby deleted.
7.Security Interest.
Paragraph 6 of the Agreement is amended by deleting the paragraph in its entirety and replacing it with the following:
“6. Security Interest
(a)Seller and Buyer intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets. However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as other than sales, and as security for Seller’s performance of all of its obligations, Seller hereby grants Buyer a fully perfected first priority security interest in all of Seller’s rights, title and interest in and to the following property, whether now existing or hereafter acquired: (i) all Purchased Mortgage Loans identified on a Daily Collateral Agent Statement, (ii) any other collateral pledged or otherwise relating to such Purchased Assets, including Participation Certificates, together with all files, material
documents, instruments, surveys (if available), certificates, correspondence, appraisals, computer records, computer storage media, Mortgage Loan accounting records and other books and records relating thereto, (iii) 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 or servicing file, (iv) the collection account (if any) and all amounts on deposit therein and all Income relating to such Purchased Assets, (v) all interests in real property collateralizing any Purchased Assets, (vi) all insurance policies and insurance proceeds relating to any Purchased Assets or the related Mortgaged Property and all rights of Seller to receive from any third party or to take delivery of any of the foregoing, (vii) any purchase agreements or other agreements, contracts or take-out commitments relating to or constituting any or all of the foregoing and all rights to receive documentation relating thereto, (viii) 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 UCC, in each case solely to the extent relating to or constituting the foregoing, and all Cash and Cash equivalents and all products and proceeds in each case solely to the extent relating to or constituting any or all of the foregoing, (ix) the Servicing Records and the related Servicing Rights and (x) any and all replacements, substitutions, distributions on or proceeds of any or all of the foregoing (collectively the “Purchased Items”).
Seller acknowledges and agrees that its rights with respect to the Purchased Items (including without limitation, any security interest Seller may have in the Purchased Assets and any other collateral granted by Seller to Buyer pursuant to any other agreement) are and shall continue to be at all times junior and subordinate to the rights of Buyer hereunder.
Seller further grants, assigns and pledges to Buyer a first priority security interest in and to all documentation and rights to receive documentation related to all Income related to the Purchased Assets received by Seller and all rights to receive such Income, and all products, proceeds and distributions relating to or constituting any or all of the foregoing (collectively, the “Related Credit Enhancement”). The Related Credit Enhancement is hereby pledged as further security for Seller’s obligations to Buyer hereunder.
(b)At any time and from time to time, upon the written request of Buyer, and at the expense of Seller, 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 Buyer may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted. The Seller hereby authorizes Buyer to file any financing or continuation statements under the UCC in effect in any jurisdiction with respect to the Purchased Items and the liens created hereby. Seller also hereby authorizes Buyer to file any such financing or continuation statement without the signature of Seller to the extent permitted by applicable law. A carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement for filing in any jurisdiction. This Agreement shall constitute a security agreement under applicable law.
(c)Seller shall not (i) change the location of its chief executive office/chief place of business from that specified in Annex II, (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 Buyer [***] prior written notice thereof and shall have delivered to Buyer all UCC financing statements and amendments thereto as Buyer shall request and taken all other actions necessary to continue its perfected status in the Purchased Items with the same or better priority.
(d)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 of carrying out the terms of this Agreement, including without limitation, protecting, preserving and realizing upon the Purchased Items, 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, including without limitation, to protect, preserve and realize upon the Purchased Items, to file such financing statement or statements relating to the Purchased Items without Seller’s signature thereon as Buyer at its option may deem appropriate, and, without limiting the generality of the foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller, without assent by, but with notice to, Seller, if an Event of Default as to which Seller is the defaulting party 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 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 Buyer for the purpose of collecting any and all such moneys due with respect to any Purchased Items whenever payable;
(ii) to pay or discharge taxes and liens levied or placed on or threatened against the Purchased Items;
(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 Buyer or as Buyer shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Purchased Items; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any 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 proceeds thereof and to enforce any other right in respect of any Purchased Items; (E) to defend any suit, action or proceeding brought against 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 Buyer may deem appropriate; and (G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Purchased Items 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 Purchased Items 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. This power of attorney shall not revoke any prior powers of attorney granted by Seller.
Seller also authorizes Buyer, if an Event of Default shall have occurred and be continuing, from time to time, to execute, in connection with any sale provided for in Paragraph 11 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Purchased Items.
(e)The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Purchased Items 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.
(f)If Seller fails to perform or comply with any of its agreements contained in the Program Agreements and Buyer performs or complies, or otherwise cause performance or compliance, with such agreement, the reasonable out-of-pocket expenses of Buyer incurred in connection with such performance or compliance, together with interest thereon at a rate per annum equal to the Pricing Rate, shall be payable by Seller to Buyer on demand and shall constitute obligations of Seller hereunder.
(g)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 UCC or otherwise, shall be to deal with it in the same manner as Buyer deals with similar property for its own account. Neither Buyer nor any of its 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 Seller or otherwise.
(h)All authorizations and agencies herein contained with respect to the Purchased Items are irrevocable and powers coupled with an interest.
(i)Upon the repurchase of any Purchased Asset by the Seller, such Purchased Asset shall automatically be released from any claim, Lien or encumbrance of the Buyer or the Collateral Agent pursuant to this Agreement.”
8.Additional Representations and Covenants.
In addition to the representations and warranties set forth in Paragraph 10 of the Agreement, each of the parties hereto further represents, warrants and covenants to the other (which representations, warranties and covenants shall be deemed to be repeated by such party on the Purchase Date for any Transaction) that:
(a) It has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any advice, counsel, or representation of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to expected results of that Transaction.
(b) It is capable of assessing the merits of (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks (economic and otherwise) of that Transaction. It is also capable of assuming, and assumes, the risks of each Transaction.
(c) The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction.
(d) No material adverse change in such party’s financial condition has occurred since the date of the most recent financial statements furnished by such party to the other party, and such financial statements are complete and correct and fairly present such party’s financial condition and results of operations as at and for the period ended on the date thereof, all in accordance with generally accepted accounting principles and practices applied on a consistent basis.
(e) It is not, and after giving effect to the Transactions contemplated by the Agreement will not be, required to register as an “investment company” (within the meaning of the Investment Company Act of 1940, as amended).
(f) Each proposed mortgage loan for a Transaction shall be an Eligible Mortgage Loan. Each proposed mortgage loan for a Transaction shall be a Qualified Mortgage. The Seller hereby agrees that it shall, [***] of notice thereof, repurchase, for the applicable Repurchase Price therefor, a Purchased Asset if such Purchased Asset ceases to be an Asset meeting the eligibility criteria set forth in this Agreement. If any Purchased Asset is repurchased by reason of its failure to constitute a Qualified Mortgage, Seller shall deliver a notice to Buyer and to the Indenture Trustee that shall specify (x) the reason that the Purchased Asset failed to constitute a Qualified Mortgage and (y) the Repurchase Price therefor. Seller shall effect such repurchase by transferring Replacement Assets to Buyer which have a Market Value at least equal to such Repurchase Price pursuant to Section 4(d) of Annex III (or, if Seller has insufficient Eligible Assets, Seller shall transfer Cash to Buyer in the amount of such insufficiency).
(g) The Seller hereby agrees to notify the Buyer of any amendment or modification to the Mortgage Loan Custodial and Disbursement Agreement to the extent such amendment or modification materially and adversely affects the ability of the Mortgage Loan Custodian or Servicer to perform their respective roles under such agreements.
(h) The Seller has maintained and shall maintain all such requisite Approvals and is in good standing with the Applicable Agency, with no event having occurred or the Seller having any reason whatsoever to believe or suspect will occur prior to the issuance of the consummation of any Takeout Commitment, including, without limitation, a change in insurance coverage which would either make the Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the Applicable Agency.
(i) The Seller shall defend the Purchased Items against, and shall 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 the 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. The Seller shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Agreements), any of the Purchased Items or any interest therein, provided that this paragraph (i) shall not prevent any contribution, assignment, transfer or conveyance of Purchased Items in accordance with the Program Agreements.
(j) The Seller shall at all times maintain a Tangible Net Worth of [***].
(k) The Seller shall at all times maintain Liquidity [***].
(l) The Seller shall at all times maintain a ratio of [***].
(m) Seller shall furnish to Buyer, on a monthly basis, on the last Business Day of each month, a compliance certificate of a Responsible Officer of Seller setting forth the level of the Seller’s compliance with the financial covenants set forth in paragraphs 8(j) through (l) above, as of the most recent reporting date of the Seller and demonstrating the Seller’s compliance with such financial covenants. In addition, upon request from Buyer, Seller shall provide or make available electronically a separate compliance certificate of a Responsible Officer of Seller setting forth the level of the Seller’s compliance with the financial covenants set forth in paragraphs 8(j) through (l) above, as of the most recent reporting date of the Seller.
9.Events of Default.
(a) In addition to the Events of Default set forth in Paragraph 11 of the Agreement, it shall be an additional “Event of Default” if (i) either party breaches any covenant or agreement under the Agreement and such breach has not been cured [***]following the earlier of (a) the date on which the defaulting party obtains knowledge thereof and (b) the date on which notice of such failure, requiring the same to be remedied, has been given to the defaulting party, (ii) the Seller fails to pay Price Differential when due and payable pursuant to the Agreement (including the related Confirmation) and such breach shall not have been cured [***]of such failure; (iii) the Seller has its license, charter, or other authorization necessary to conduct a material portion of its business withdrawn,
suspended or revoked by any applicable federal or state government or agency thereof or (iv) if any Material Adverse Effect shall have occurred with respect to Seller;
(b) The introductory paragraph of Paragraph 11(d) shall be amended by replacing the clause “without prior notice to the defaulting party” with “with such notice to the defaulting party as is reasonably practicable under the circumstances”.
(c) The following sentence shall be added to the end of Paragraph 11(g):
“Notwithstanding the foregoing, neither party shall be liable to the other for any consequential, indirect or punitive damages.”
10.Termination.
(a)The first sentence of Paragraph 3(c) of the Agreement shall be deleted in its entirety and replaced with the following sentence:
“In the case of Transactions terminable upon demand, such demand may be made by Buyer, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the Business Day on which such termination will be effective.”
(b)The last sentence of Paragraph 15(a) of the Agreement shall be deleted in its entirety and replaced with the following sentence:
“This Agreement may be terminated by the Buyer upon giving written notice to the Seller, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding.”
(c)The following sentence shall be added as Paragraph 15(c):
“This Agreement and any Transaction hereunder shall terminate on the earliest of (1) the Expiration Date, (2) the Seller exercising its right to Optional Prepayment in full and (3) the date of the occurrence and continuance of an Event of Default hereunder.”
11.Agreement to Deliver Documents.
Each party agrees that upon execution and delivery of this Agreement and thereafter upon reasonable request of the other party, it will deliver to the other party:
(i) evidence of authority and specimen signatures of individuals executing this Agreement and any Confirmation hereunder;
(ii) a correct, complete and executed U.S. Internal Revenue Service Form W-8BEN, W-8BEN-E, W-8IMY, W-8ECI, W-9 (or any successor thereto), including appropriate attachments, that eliminates U.S. federal backup withholding tax on payments under this Agreement;
(i)a copy of its organizational documents, including all amendments thereto, and such other documents as the other party may reasonably request in connection with its “know your customer” and anti-money laundering compliance programs; and
(ii)such further information regarding its financial condition, business or operations as the other party may reasonably request.
12.Notices.
(a)Notices of Events of Default. Each party agrees, upon learning of the occurrence of any event or commencement of any condition that constitutes an Event of Default with respect to such party, promptly to give the other party notice of such event or condition.
(b)The last sentence of Paragraph 13 of the Agreement shall be deleted and the following sentence shall be added:
“In addition, all statements may be made available electronically, such as on a website.”
13.Intent. Paragraph 19 of the Agreement shall be deleted in its entirety and the following shall be added:
“19. Intent
(a) Seller and Buyer recognize that each Transaction is a “repurchase agreement” as that
term is defined in Section 101(47) 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) of the Bankruptcy Code.
(b) It is understood that Buyer’s right to liquidate the Purchased Items delivered to it in connection with the Transactions hereunder or to accelerate or terminate the Agreement or otherwise exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Sections 555, 559 and 561 of the Bankruptcy Code.”
14.Set-Off. In addition to any rights of set-off a party may have as a matter of law or otherwise upon the occurrence of an Event of Default, the non-defaulting party shall have the right (but not be obliged) to set off any obligation of the defaulting party owing to the non-defaulting party (whether or not arising under this Agreement, whether or not matured, whether or not contingent and regardless of the currency, place of payment or booking office of the obligation) against any obligation of the non-defaulting party owing to the defaulting party (whether or not arising under this Agreement whether or not matured, whether or not contingent and regardless of the currency, place of payment or booking office of the obligation). For this purpose any sums not in U.S. Dollars shall be converted into U.S. Dollars at the rate of exchange at which the non-defaulting party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. If an obligation is unascertained, the non-defaulting party may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this paragraph shall be effective to create a security interest. This paragraph shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time entitled (whether by operation of law, contract or otherwise).
15.Payment of Repurchase Price.
The parties agree that the Repurchase Price shall be due and payable on each Repurchase Date; provided however, that, if such Repurchase Date is not also a Remittance Date and there is no Prepayment Amount associated with such Transaction, any unpaid Price Differential relating to such Transaction shall be due on the immediately following Remittance Date and further, the principal portion of the Repurchase Price for the Purchased Assets being repurchased on such Repurchase Date may be applied towards the payment of the Purchase Price relating to the Purchased Assets being purchased by the Buyer on such Repurchase Date. In addition, the Seller shall pay to Buyer the related Interest Coverage Amount, if any, on each Remittance Date. Notwithstanding anything to the contrary contained herein or in any other document relating to the transactions contemplated herein or in the Indenture, any and all payments of the Repurchase Price (including any Price Differential) required to be made pursuant to the Agreement shall be made by or on behalf of the Seller to the account of the Buyer as set forth in Schedule CA-II to Annex III.
Any payment of a Takeout Price that is made by a Takeout Investor to the Buyer pursuant to a Bailee Letter or Takeout Commitment, as applicable, shall be deemed to be a payment by Seller of the Repurchase Price in respect of the Purchased Assets subject to the related Takeout Commitment. In the event that Buyer, or the Collateral Agent on its behalf, receives an Agency Security in connection with the purchase of Purchased Mortgage Loans (or Participation Certificates) by an Agency or the issuance by an Agency of its guarantee of an Agency Security backed by Purchased Mortgage Loans, the Seller shall arrange for the sale of the related Agency Security to a Takeout Investor for an amount that is greater than or equal to the applicable Repurchase Price of the Purchased Mortgage Loans sold to the Agency. Seller shall arrange for the Takeout Settlement Date with respect to such Agency Security to occur [***] of delivery of such Agency Security to the Buyer or the Collateral Agent. Each settlement of Agency Securities with Takeout Investors shall be effected by the Collateral Agent and the Seller in accordance with the provisions of Schedule IV and Schedule V to this Annex I.
16.Conditions Precedent: In no event shall the Buyer acquire, or agree to acquire, any mortgage loans under a Transaction on any day if the conditions precedent set forth below are not satisfied. The conditions precedent are the following:
(a)each such mortgage loan is an Eligible Asset on such day;
(b)each such mortgage loan satisfies, and (after giving effect to such proposed Transaction) all of the Purchased Mortgage Loans satisfy, the criteria set forth in Schedule II;
(c)no exception has been reported by the custodian for any mortgage loan to be purchased;
(d)an Event of Default has not occurred or if it has occurred, has been waived by the requisite holders of the Buyer’s Source of Funds;
(e)after giving effect to the Buyer’s purchase of the Eligible Assets and the payment of the Purchase Price to the Seller, a Margin Deficit will not exist on such day;
(f)none of the Program Agreements have ceased to be in full force and effect unless the Rating Agency Condition has been satisfied in connection with the termination of any such Program Agreement;
(g)after giving effect to the proposed Transaction and the repurchase of Purchased Assets with a Repurchase Date on such day, the aggregate Purchase Price of all outstanding Transactions shall not exceed the Maximum Aggregate Purchase Price;
(h)after giving effect to the proposed Transaction and the repurchase of Purchased Assets with a Repurchase Date on such day, the outstanding balance of such Purchased Assets plus amounts on deposit in the Buyer’s Account is not less than the Maximum Aggregate Purchase Price; and
(i)Buyer and Collateral Agent have theretofore received a copy executed by Seller of a blanket assignment of any Participation Certificates in the form of Exhibit A to the Custodial Addendum in Annex III.
Prior to entering into any Transaction and subject to any additional terms and conditions of this Agreement, including the Custodial Addendum attached as Annex III hereto, Buyer (or the Collateral Agent on behalf of the Buyer) shall confirm that each proposed mortgage loan meets the eligibility criteria set forth on Schedule II (for the avoidance of doubt, the Collateral Agent shall have no responsibility for verifying the representations and warranties set forth in Schedule I) by performing an eligibility test with respect to each such mortgage loan substantially in the form as provided on Exhibit A hereto.
17.Appointment of the Collateral Agent and Securities Intermediary.
(a)Buyer and Seller hereby appoint Collateral Agent as collateral agent and the Securities Intermediary as securities intermediary, to maintain possession of all Eligible Assets at any time delivered to Collateral Agent for or on behalf of Buyer under this Agreement in connection with Transactions and as agent and bailee for Buyer for the purposes set forth in this Agreement (for purposes of all applicable sections of the UCC). Seller hereby appoints Collateral Agent as collateral agent and Securities Intermediary as securities intermediary to maintain possession of all Eligible Assets at any time delivered to Collateral Agent for or on behalf of Seller under this Agreement in connection with Transactions and as agent and bailee for Seller for the purposes set forth in this Agreement.
(b)Collateral Agent and Securities Intermediary hereby accept the appointments set forth in Section 17(a) above and, subject to the terms and conditions of this Agreement, agree to receive Eligible Assets in the manner specified herein, for or on behalf of
Buyer, to be held hereunder, and to hold, release, or otherwise dispose of such Eligible Assets as hereinafter provided. Collateral Agent and Securities Intermediary further agrees to receive Eligible Assets for or on behalf of Seller for transfer to Seller’s Account to be delivered hereunder, and to hold, release, or otherwise dispose of such Eligible Assets as hereinafter provided.
(c)Collateral Agent’s and Securities Intermediary’s duties hereunder shall continue until altered in writing by the parties hereto or until the termination of this Agreement. Collateral Agent and Securities Intermediary undertakes to perform only those duties as are expressly set forth in this Agreement and no additional covenant or obligation shall be implied in this Agreement against Collateral Agent and Securities Intermediary. If a Transaction shall not be completed for any reason whatsoever, Collateral Agent’s and Securities Intermediary’s duties to Buyer and Seller shall be limited to holding the related Eligible Assets for the account of the party hereto owning such Assets prior to the contemplated but not completed Transaction and following any other instructions received from Buyer and/or Seller as specifically provided for in this Agreement.
(d)Seller and Buyer each confirm that it is treating U.S. Bank National Association, in its capacity as Securities Intermediary, as holding each Purchased Asset as a “custodian” on behalf of the Buyer, U.S. Bank National Association, in its capacity as Securities Intermediary as a “customer” in connection with a “securities contract” (as each such term is used in Section 101(22) of the Bankruptcy Code), and Seller and Buyer confirm that in such capacity U.S. Bank National Association is serving as a “financial institution” (as defined in Section 101(22) of the Bankruptcy Code). U.S. Bank National Association confirms that it is a “commercial bank” (as such term is used in such Section 101(22)) and acknowledges such treatment by Seller and Buyer.
(e)Additional terms and conditions to the Collateral Agent’s and Securities Intermediary’s duties are set forth in the Custodial Addendum set forth as Annex III to this Agreement.
18.Jurisdiction and Service of Process. Each party irrevocably and unconditionally (i) submits to the non-exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under the Agreement or relating in any way to the Agreement or any Transaction under the Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.
19.WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDINGS IN CONNECTION WITH THE AGREEMENT.
20.Waiver of Immunity. Each party hereto hereby waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, attachment (both before and after judgment) and execution to which it might otherwise be entitled in any action or proceeding in any state or federal court or court of any other country or jurisdiction, relating in any way to this Agreement or any Transaction, and agrees that it will not raise, claim or cause to be pleaded any such immunity at or in respect of any such action or proceeding.
21.Existing Transactions. The parties agree that this Agreement shall apply to all transactions which are outstanding as at the date of this Agreement so that such transactions shall be treated as if they had been entered into under this Agreement, and the terms of such transactions are amended accordingly with effect from the date of this Agreement.
22.Notice of Modification or Waiver. The Seller covenants and agrees to provide the Rating Agency with notice of any modification, waiver or consent granted by either party under this Agreement and any Transaction relating hereto.
23.Recording of Conversations. Each party (i) consents to the recording of telephone conversations between the trading, marketing and other relevant personnel of the parties and their affiliates in connection with this Agreement or any potential Transaction, (ii) agrees to obtain any necessary consent of, and give any necessary notice of such recording to, its relevant personnel and (iii) agrees, to the extent permitted by applicable law, that recordings may be submitted in evidence in any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement.
24.Confidentiality. Each party acknowledges that Confidential Information (as defined below) may be exchanged between the parties pursuant to this Agreement. Each party shall use no less than the same means it uses to protect its similar confidential and proprietary information, but in any event not less than reasonable means, to prevent the disclosure and to protect the confidentiality of the Confidential Information of the other party. Each party agrees that it will not disclose or use the Confidential Information of the other party except for the purposes of this Agreement and as authorized herein. Notwithstanding the foregoing, the recipient of Confidential Information (the “Recipient”) may use or disclose the Confidential Information to the extent that such Confidential Information is: (a) already known by the Recipient without an obligation of confidentiality, (b) publicly known or becomes publicly known through no unauthorized act of the Recipient, (c) rightfully received from a third party without any obligation of confidentiality, (d) independently developed by the Recipient without use of the Confidential Information of the disclosing party (the “Disclosing Party”), (e) approved by the Disclosing Party for disclosure, or (f) required to be disclosed pursuant to a requirement of a governmental agency, regulatory or self-regulatory agency or law; provided that, to the extent permitted by the requesting body, the Recipient provides the other party with notice of such requirement prior to any such disclosure and requests that the requesting body afford confidential treatment to the information disclosed. In the event of any unauthorized disclosure or loss of, or inability to account for, Confidential Information of the Disclosing Party, the Recipient will notify the Disclosing Party
immediately and will take all available steps to terminate the unauthorized use or further unauthorized disclosure of the Confidential Information of the Disclosing Party.
“Confidential Information” shall mean all information disclosed to one party to this Agreement by the other party to this Agreement in written, verbal, graphic, recorded, photographic, or any other form about such Disclosing Party and its business, including without limitation business partners and suppliers, financial statements, intellectual property rights, products, research and development, costing, licensing and pricing, disclosed in writing, verbally or visually, designated as confidential at the time of disclosure or is of a nature that a reasonable person would consider the information confidential.
25.Force Majeure. Buyer and Seller shall not be responsible or liable for any failure or delay in the performance of their respective obligations under the Agreement arising out of or caused, directly or indirectly, by circumstances beyond their reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics or pandemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; it being understood that Buyer and Seller shall use their best efforts to resume performance as soon as practicable under the circumstances.
26.Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. The parties agree that this Agreement, any documents to be delivered pursuant to this Agreement and any notices hereunder may be transmitted between them by email and/or facsimile. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. Each of the parties agree that this Agreement and any other documents to be delivered in connection herewith and therewith may be electronically signed, that any digital or electronic signatures (including pdf, facsimile or electronically imaged signatures provided by DocuSign or any other digital signature provider as specified in writing to the Indenture Trustee) appearing on this Agreement or such other documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility, and that delivery of any such electronic signature to, or a signed copy of, this Agreement and such other documents may be made by facsimile, email or other electronic transmission.
27.Hypothecation or Pledge of Purchased Assets. Other than pursuant to the Indenture, Buyer shall be precluded from engaging in repurchase transactions with the Purchased Assets or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets.
28.Further Assurances. Each party agrees to do such further acts and things and to execute and deliver to the other party such additional assignments, acknowledgments, agreements, powers
and instruments as are reasonably required by such other party to carry into effect the intent and purposes of this Agreement and the other Program Agreements.
29.Delay Not Waiver; Rights Cumulative. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by such party of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All rights and remedies of each party hereto provided for herein are cumulative and in addition to any and all other rights and remedies provided by law, the Program Agreements and the other instruments and agreements contemplated hereby and thereby, and are not conditional or contingent on any attempt by such party to exercise any of its rights under any other related document. Each party 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.
30.Limitation of Liability. It is expressly understood and agreed by the parties hereto that (i) each of the Base Agreement, this Annex-I, and any Confirmation is executed and delivered on behalf of the Buyer by Wilmington Savings Fund Society, FSB, not individually or personally, but solely in its capacity as Owner Trustee of Buyer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement, (ii) each of the representations, warranties, undertakings and agreements made in each of the Agreement, this Annex-I or any Confirmation on the part of Buyer is made and intended not as personal representations, warranties, undertakings and agreements by Wilmington Savings Fund Society, FSB, but is made and intended for the purpose for binding only, and is binding only on, Buyer, (iii) nothing contained in the Agreement, this Annex-I or any Confirmation shall be construed as creating any liability on Wilmington Savings Fund Society, FSB, individually or personally, to perform any covenant of Buyer either expressed or implied contained in the Agreement, this Annex-I or any Confirmation, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (iv) Wilmington Savings Fund Society, FSB has not made and will not make any investigation as to the accuracy or completeness of any representations or warranties made by the Buyer in the Agreement, this Annex-I or any Confirmation and (v) under no circumstances shall Wilmington Savings Fund Society, FSB be personally liable for the payment of any indebtedness, indemnities or expenses of Buyer or be liable for the performance, breach or failure of any obligation, representation, warranty or covenant made or undertaken by Buyer under the Agreement, this Annex-I, any Confirmation or any Transaction related hereto, as to all of which recourse shall be had solely to the assets of the Buyer. It is expressly understood and agreed that the rights and duties of Buyer under the Agreement, this Annex-I and any Confirmation will be exercised by U.S. Bank Trust Company, National Association as Indenture Trustee as assignee of the Buyer and U.S. Bank Trust Company, National Association as Collateral Agent, on behalf of the Buyer and under no circumstances shall the Owner Trustee have any duty or obligation to monitor, exercise or perform the rights or duties of the Buyer under the Agreement, this Annex-I or any Confirmation.
31.Amendment. This Agreement may be amended by the parties hereto, without the consent of the Noteholders, to provide for the sale of Eligible Mortgage Loans evidenced by eNotes so long as the Rating Agency Condition is satisfied pursuant to its terms.
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Agreed and acknowledged as of the first date set forth above:
| | | | | |
MELLO WAREHOUSE SECURITIZATION TRUST 2024-1
By: Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as Owner Trustee
By: /s/ Kyle Broadbent
Name: Kyle Broadbent
Title: Trust Officer
Date: September 27, 2024 | |
LOANDEPOT.COM, LLC
By: /s/ David Hayes
Name: David Hayes
Title: CFO
Date: September 27, 2024
SCHEDULE I TO ANNEX I OF MASTER REPURCHASE AGREEMENT
[***].
SCHEDULE II TO ANNEX I OF MASTER REPURCHASE AGREEMENT
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SCHEDULE III TO ANNEX I OF MASTER REPURCHASE AGREEMENT
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SCHEDULE IV TO ANNEX I OF MASTER REPURCHASE AGREEMENT
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SCHEDULE V TO ANNEX I TO MASTER REPURCHASE AGREEMENT
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ANNEX II
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Annex III
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SCHEDULE CA-I TO COLLATERAL AGENT ADDENDUM
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SCHEDULE CA-II TO COLLATERAL AGENT ADDENDUM
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EXHIBIT A TO COLLATERAL AGENT ADDENDUM
[***]APPENDIX I TO CUSTODIAL ADDENDUM
FORM OF INSTRUCTION TO TRANSFER PURCHASED ASSETS OR CASH FROM BUYER’S ACCOUNT
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EXHIBIT A-1 OF MASTER REPURCHASE AGREEMENT
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EXHIBIT A-2 OF MASTER REPURCHASE AGREEMENT
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GUARANTY
This GUARANTY, dated as of September 27, 2024 (this “Guaranty”) is made by LD Holdings Group LLC (the “Guarantor”), a Delaware limited liability company, in favor of Mello Warehouse Securitization Trust 2024-1 (the “Beneficiary”), a Delaware statutory trust.
WHEREAS, the Beneficiary and loanDepot.com, LLC (the “LD Subsidiary”), a subsidiary of the Guarantor, have entered into a Master Repurchase Agreement and the Confirmation thereto, each dated as of September 27, 2024 (as amended or modified from time to time, together, the “Agreement”) pursuant to which the Beneficiary anticipates entering into one or more transactions from time to time;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Guarantor, intending to be legally bound, agrees as follows.
1. Guaranty.
(a) The Guarantor hereby (i) fully, irrevocably and unconditionally guarantees the due and punctual payment of any and all obligations of the LD Subsidiary owed to the Beneficiary under the Agreement and (ii) acknowledges that any and all amounts payable by the Guarantor hereunder shall be pari passu with all other senior unsecured debt of the Guarantor.
(b) This is a continuing Guaranty and a guaranty of payment (not merely of collection), and it shall remain in full force and effect until all amounts payable by the LD Subsidiary to the Beneficiary under the Agreement have been validly, finally and irrevocably paid in full and shall not be affected in any way by the absence of any action to obtain those amounts from the LD Subsidiary or any other guarantor or surety or to proceed against any other security provided by the LD Subsidiary or any other person or entity.
(c) The Guarantor hereby agrees that it shall not be necessary, as a condition precedent to enforcement of this Guaranty, that a suit first be instituted against the LD Subsidiary or that any rights or remedies first be exhausted against the LD Subsidiary and the Guarantor hereby waives diligence, presentment, demand on the LD Subsidiary for payment or otherwise, filing of claims, requirement of a prior proceeding against the LD Subsidiary and protest or notice, except as may be provided for in the Agreement with respect to amounts payable by the LD Subsidiary.
(d) The Guarantor agrees that, except by the complete and irrevocable payment of all amounts payable by the LD Subsidiary under the Agreement, its
obligations under this Guaranty shall be unconditional and this Guaranty shall not be subject to any defense of set-off, counterclaim, recoupment or termination or discharge whatsoever by reason of the invalidity, illegality or unenforceability of any obligations under this Guaranty or any other defense that constitutes a legal or equitable discharge or defense of a guarantor or surety in its capacity as such irrespective of the existence of any bankruptcy, insolvency, reorganization or similar proceedings involving the LD Subsidiary or by any other circumstance, including, without limitation (i) assertions of amendment, waivers or forbearance affecting the Agreement or the related collateral; (ii) the LD Subsidiary’s lack of authorization to enter into the Agreement or its disability or bankruptcy; (iii) incomplete performance of the Agreement; (iv) delay by the Beneficiary in making a claim; (v) lack of complete disclosure of matters relevant to the Guarantor; and (vi) failure to notify the Guarantor.
(e) If at any time payment under the Agreement is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the LD Subsidiary or the Guarantor or otherwise, the Guarantor’s obligations hereunder with respect to such payment shall be reinstated upon such restoration or return being made.
(f) So long as any amount payable by the LD Subsidiary in connection with the Agreement is overdue and unpaid, the Guarantor shall not exercise any right of subrogation. If at any time when any amount is overdue and unpaid the Guarantor receives any amount as a result of any action against the LD Subsidiary or any of its property or assets or otherwise for or on account of any payment made by the Guarantor under this Guaranty, the Guarantor shall forthwith pay that amount received by it, to the extent necessary to satisfy any such amount overdue and unpaid, to the Beneficiary, to be credited and applied against the amount so payable by the LD Subsidiary and until payment is made to the Beneficiary the Guarantor shall hold such amounts in trust for the Beneficiary.
(g) If the LD Subsidiary merges or consolidates with or into another entity, loses its separate legal identity or ceases to exist, the Guarantor shall nonetheless continue to be liable for the payment of all amounts payable by the LD Subsidiary under the Agreement to the extent such amounts are not paid when due by the LD Subsidiary.
2. Payments Free and Clear. Amounts due under this Guaranty shall be paid free and clear of all taxes, assessments or governmental charges payable by deduction or withholding from payment of amounts due under this Guaranty, except for (i) any tax, assessment or governmental charge that the LD Subsidiary would have been permitted to withhold or deduct, and would not have been required to gross-up or otherwise reimburse the Beneficiary, in accordance with the terms of the guaranteed obligations, or (ii) any tax, assessment or other governmental charge that would not have been imposed but for the failure by the Beneficiary to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with
the United States if compliance is required as a precondition to exemption from such tax, assessment or other governmental charge. If the Beneficiary should receive or be granted a credit against or remission for such taxes, assessments or governmental charges it will, to the extent that it can do so without prejudice to the retention of the amount of such credit or remission, reimburse to the Guarantor such amount as it has concluded to be allocable to the relevant tax, assessment or governmental charge and any such reimbursement shall be conclusive evidence of the amount due to the Guarantor.
3. Remedies. The rights and remedies provided for in this Guaranty are in addition to and not exclusive of any rights and remedies available to the Beneficiary by law in respect of this Guaranty. A failure or delay in exercising any right, power or privilege in respect of this Guaranty will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege. If any amount payable by the Guarantor under this Guaranty is not paid when due, the Beneficiary may, without notice or demand of any kind, appropriate and apply toward the payment of any such amount any property, balance, credit, deposit account or money of the Guarantor (in any currency) that for any purpose is in the possession or control of the Beneficiary or any of its Affiliates (or any of its or their respective branches or offices). The Beneficiary shall be entitled to apply any amount received by it from any source, including the Guarantor, in respect of the LD Subsidiary’s obligations under the Agreement to the discharge of those obligations in such order as the Beneficiary may from time to time elect in its sole discretion.
4. Representations and Warranties. The Guarantor hereby makes to the Beneficiary the following representations and warranties:
(a) The Guarantor is duly organized and validly existing under the laws of the jurisdiction of its organization and, if relevant under such laws, in good standing;
(b) The Guarantor has the power to execute this Guaranty and any other documentation relating to this Guaranty to which it is a party, to deliver this Guaranty and any other documentation relating to this Guaranty that it is required by this Guaranty to deliver and to perform its obligations under this Guaranty and has taken all necessary action to authorize such execution, delivery and performance;
(c) Such execution delivery and performance do not violate or conflict with any law applicable to the Guarantor, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; and
(d) The Guarantor’s obligations under this Guaranty constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms.
5. Amendments, Waivers, Notices. Any amendments, waivers and modifications of or to any provision of this Guaranty and any consent to departure by the Guarantor from the terms of this Guaranty shall be in writing and signed and delivered by the Beneficiary and, in the case of any such amendment or modification, by the Guarantor, shall be consented to by the Holders of the Class F Notes (as defined in the Indenture referenced in the Agreement) and shall not otherwise be effective. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which it is given. No failure or delay by the Beneficiary in exercising any right, power or privilege in respect of this Guaranty will be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise of that right, power or privilege or the exercise of any other right, power or privilege. Any notice or communication to the Guarantor shall be sent to its address for notices set forth below, or such other address as may be specified by written notice from time to time, and any notice or communication to the Beneficiary shall be sent to its address for notices set forth in the Agreement, or such other address as may be specified by written notice from time to time. A copy of any amendment to this Guaranty shall be provided by the Guarantor to the Rating Agency.
6. Subrogation. Upon payment of any of its obligations under this Guaranty, the Guarantor shall be subrogated to the rights of the Beneficiary against the LD Subsidiary with respect to such obligations, and the Beneficiary agrees to take at the Guarantor’s expense such steps as the Guarantor may reasonably request to implement such subrogation.
7. Intent. The Guarantor intends that this Guaranty constitute a “securities contract” as that term is defined in Section 741(7) of the Bankruptcy Code, a “master netting agreement” as that term is defined in Section 101(38A) of the Bankruptcy Code, and the Beneficiary’s right to exercise any other remedies hereunder is a contractual right to cause the liquidation, termination or acceleration of such Transactions as described in sections 555 and 561 of the Bankruptcy Code.
8. Binding Effect; Assignment. This Guaranty shall inure to the benefit of and be binding upon the Guarantor and the Beneficiary and their respective successors and permitted assigns. The Guarantor shall not assign its obligations under this Guaranty unless (x) such assignment is (i) made to an entity with a senior unsecured rating (or counterparty risk assessment to the extent such entity has a counterparty risk assessment) from the Rating Agency at least equal to the senior unsecured rating of the Guarantor (or counterparty risk assessment to the extent the Guarantor has a counterparty risk assessment) by the Rating Agency as of the date hereof and (ii) such entity agrees to assume the obligations of the Guarantor hereunder and (y) the Rating Agency Condition is satisfied. The Beneficiary may not assign its rights hereunder to any other person without the prior written consent of the Guarantor; provided, however, that the Guarantor
hereby consents to the Beneficiary’s pledge of its rights hereunder in connection with the transactions contemplated by the Indenture, dated as of the date hereof, between the Beneficiary, as issuer, U.S. Bank National Association, as standby servicer and securities intermediary, and U.S. Bank Trust Company, National Association, as indenture trustee and note calculation agent. Any other purported assignment without that consent shall be void.
9. Governing Law; Jurisdiction; Etc. This Guaranty shall be governed by and construed and interpreted in accordance with the internal laws of the State of New York (without reference to the conflict of law doctrine which would apply the laws of a jurisdiction other than the State of New York). The parties hereby irrevocably waive any and all right to a trial by jury with respect to any legal proceeding arising out of or relating to this Guaranty. The parties irrevocably submit to the exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, for purposes of any action or proceeding relating to this Guaranty. Each of the parties irrevocably waives, to the fullest extent permitted by law, any defense or objection it may have that any such action or proceeding in any such court has been brought in an inconvenient forum.
10. Termination. Notwithstanding Section 1(b) hereof, this Guaranty shall be terminated on the date (the “Effective Date”) that is fifteen (15) days after the Beneficiary has received by hand, certified mail, courier delivery, facsimile, or email, at its address for notices as referred to in Section 5 above, written notice from Guarantor that this Guaranty is being terminated; provided that any notice given under this Section shall not release Guarantor from the obligations hereunder in respect of any obligations guaranteed hereby existing prior to the Effective Date or arising out of any transaction entered into prior to the Effective Date.
11. Electronic Signatures. This Guaranty and any other documents to be delivered in connection herewith and therewith may be electronically signed, that any digital or electronic signatures (including pdf, facsimile or electronically imaged signatures provided by DocuSign or any other digital signature provider) appearing on this Guaranty or such other documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility, and that delivery of any such electronic signature to, or a signed copy of, this Guaranty and such other documents may be made by facsimile, email or other electronic transmission.
12. Headings. The section headings in this Guaranty are for convenience of reference only and shall not affect the meaning or construction of any provision of this Guaranty.
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IN WITNESS WHEREOF, the Guarantor has duly executed this Guaranty with effect from the date first written above.
LD HOLDINGS GROUP LLC
By:/s/ David Hayes
Name: David Hayes
Title: Chief Financial Officer
Address for Notices:
LD Holdings Group LLC
6561 Irvine Center Drive
Irvine, CA 92618
Attention: David Hayes
Guaranty (Mello 2024-1)
127792521\V-3
THIRD AMENDMENT TO FIRST AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
Dated as of September 27, 2024
Between:
LOANDEPOT.COM, LLC, as Seller
and
JPMORGAN CHASE BANK, N.A., as Buyer
The Parties have agreed to amend (for the second time) the First Amended and Restated Master Repurchase Agreement dated September 30, 2022, between them (the “Original MRA”, as amended by the First Amendment to First Amended and Restated Master Repurchase Agreement dated June 30, 2023, and the Second Amendment to First Amended and Restated Master Repurchase Agreement dated September 29, 2023, the “Amended MRA” and as amended hereby and as further supplemented, amended or restated from time to time, the “MRA”).
All capitalized terms used in the Amended MRA and used, but not defined differently, in this amendment have the same meanings here as there. The sole numbered Section of this Amendment is numbered to correspond to the numbering of the Section of the Amended MRA amended hereby.
2. Definitions; Interpretation
A. The defined term “Termination Date” contained in Section 2(a) of the Amended MRA is hereby amended to read as follows:
“Termination Date” means the earliest of (i) the Business Day, if any, that Seller designates as the Termination Date by written notice given to the Buyer at least thirty (30) days before such date, (ii) the Business Day, if any, that Buyer designates as the Termination Date by written notice given to the Seller at least sixty (60) days before such date, (iii) the date of declaration of the Termination Date pursuant to Section 12(b)(i) and (iii) December 26, 2024.
(The remainder of this page is intentionally blank; counterpart signature pages follow)
As amended hereby, the Original MRA remains in full force and effect, and the Parties hereby ratify and confirm it.
| | |
| JPMORGAN CHASE BANK, N.A. |
|
By:/s/ Bradley Fisher |
Bradley Fisher |
Authorized Officer |
| | |
| LOANDEPOT.COM, LLC |
|
By:/s/ David Hayes |
Name: David Hayes |
Title: CFO |
|
Counterpart signature page to Third Amendment to First Amended and Restated Master Repurchase Agreement
Execution - Exhibit 10.5
Certain confidential information contained in this document, marked by “[***]”, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
AMENDMENT NO. 6 TO SERIES 2020-VF1 INDENTURE SUPPLEMENT
This Amendment No. 6 (the “Amendment”) to Series 2020-VF1 Indenture Supplement (as defined below), dated as of September 27, 2024, is made by and among LOANDEPOT AGENCY ADVANCE RECEIVABLES TRUST, a statutory trust organized under the laws of the State of Delaware (the “Issuer”), CITIBANK, N.A., a national banking association, as indenture trustee (the “Indenture Trustee”), as calculation agent (the “Calculation Agent”), as paying agent (the “Paying Agent”), as custodian (the “Custodian”) and as securities intermediary (the “Securities Intermediary”), LOANDEPOT.COM, LLC, a limited liability company organized in the State of Delaware, as servicer (the “Servicer”) and as administrator (the “Administrator”), JPMORGAN CHASE BANK, N.A. (“JPMorgan”), a national banking association, as administrative agent (the “Administrative Agent”), and consented to by JPMorgan, as noteholder of the Series 2020-VF1 Variable Funding Notes (in such capacity, the “Noteholder”).
RECITALS
The Issuer, the Indenture Trustee, the Calculation Agent, the Paying Agent, the Custodian, the Securities Intermediary, the Servicer, the Administrator and the Administrative Agent, are parties to that certain Indenture, dated as of September 24, 2020, as amended by Amendment No. 1, dated as of October 28, 2020 and Amendment No. 2, dated as of February 14, 2022 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the “Base Indenture”), the provisions of which are incorporated, as modified by that certain Series 2020-VF1 Indenture Supplement, dated as of September 24, 2020, as amended by that certain Amendment No. 1, dated as of October 28, 2020, as amended by Amendment No. 2, dated as of September 23, 2021, as amended by that certain Amendment No. 3, dated as of February 14, 2022, as amended by that certain Amendment No. 4, dated as of September 23, 2022, as amended by that certain Amendment No. 5, dated as of September 22, 2023 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Existing Indenture Supplement” and together with the Base Indenture, the “Indenture”), among the parties to the Base Indenture. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Base Indenture or the Existing Indenture Supplement, as applicable.
The Issuer, Indenture Trustee, Servicer, Administrator, Administrative Agent, and the Noteholder have agreed, subject to the terms and conditions of this Amendment, that the Existing Indenture Supplement be amended to reflect certain agreed upon revisions to the terms of the Existing Indenture Supplement.
Pursuant to Section 12.2 of the Base Indenture and Sections 12(a) and 12(b) of the Existing Indenture Supplement, the Issuer, Indenture Trustee, Servicer, Administrator, and the Administrative Agent, with the consent of 100% of the Noteholders of the Series 2020-VF1
Variable Funding Notes, may amend the Existing Indenture Supplement, with the consent of the Derivative Counterparty, if any, and the Series Required Noteholders of each Series materially and adversely affected by such amendment and upon delivery of an Issuer Tax Opinion (unless the Noteholders unanimously consent to waive such opinion), for the purpose of adding or changing in any manner any provisions of the Existing Indenture Supplement.
Pursuant to Section 12.3 of the Base Indenture, the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel stating that the execution of such amendment is authorized and permitted by the Base Indenture and the Existing Indenture Supplement, and that all conditions precedent thereto have been satisfied (the “Authorization Opinion”).
As of the date hereof, there are no Derivative Counterparties.
The Series 2020-VF1 Variable Funding Notes is the sole Series and Class of Outstanding Notes. The Noteholder holds 100% of the Series 2020-VF1 Variable Funding Notes and therefore is the Series Required Noteholder.
The Noteholder waives the requirements for the delivery of an Issuer Tax Opinion and an Authorization Opinion in connection with this Amendment.
Accordingly, the Issuer, Indenture Trustee, Servicer, Administrator, Administrative Agent, and the Noteholder hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Indenture Supplement is hereby amended as follows:
Section 1.Amendment to the Existing Indenture Supplement. Effective as of the Amendment Effective Date (as defined below), the Existing Indenture Supplement 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.Consent of Noteholder. The Noteholder hereby represents and certifies that (i) it holds 100% of the Series 2020-VF1 Variable Funding Notes and therefore is the Series Required Noteholder with the right to instruct the Indenture Trustee, (ii) it has the authority to deliver this certification and the directions included herein to the Indenture Trustee, such power has not been granted or assigned to any other person, and the Indenture Trustee may conclusively rely upon this certification, (iii) it acknowledges and agrees that the amendments effected by this
Amendment shall become effective on the Amendment Effective Date, and (iv) its consent to this Amendment shall constitute an “Act” by it as described in Section 1.5 of the Base Indenture.
Section 3.Condition to Effectiveness of this Amendment. This Amendment shall become effective upon the execution and delivery of this Amendment by all parties hereto (the “Amendment Effective Date”).
Section 4.Waiver of Authorization Opinion and Officer’s Certificate. The Noteholder hereby instructs the Indenture Trustee to waive delivery of (i) the Authorization Opinion and (ii) an Officer’s Certificate required pursuant to Section 1.3 of the Base Indenture, in connection with this Amendment. In reliance on the foregoing, the requirement for the delivery of the Authorization Opinion and the Officer’s Certificate in connection with this Amendment is waived. loanDepot, in its capacity as Certificateholder of the Trust Certificate, hereby instructs the Owner Trustee to waive delivery of the opinion required pursuant to Section 11.1 of the Trust Agreement in connection with this Amendment. In reliance on the foregoing, the requirement for the delivery of such opinion is waived.
Section 5.Effect of Amendment.
(a) Except as expressly amended and modified by this Amendment, all provisions of the Existing Indenture Supplement and the Base Indenture shall remain in full force and effect and all such provisions shall apply equally to the terms and conditions set forth herein. This Amendment shall be effective as of the Amendment Effective Date upon the satisfaction of the conditions precedent set forth in Section 3 hereof and shall not be effective for any period prior to the Amendment Effective Date. After this Amendment becomes effective, all references in the Indenture Supplement or the Base Indenture to “this Indenture Supplement,” “this Indenture,” “hereof,” “herein” or words of similar effect referring to the Existing Indenture Supplement and Base Indenture shall be deemed to be references to the Existing Indenture Supplement or the Base Indenture, as applicable, as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Existing Indenture Supplement or the Base Indenture other than as set forth herein.
(b) The parties hereto have entered into this Amendment solely to amend the terms of the Base Indenture and the Existing Indenture Supplement 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 owed by the parties hereto or any other party to the Base Indenture or the Existing Indenture Supplement under or in connection with the Base Indenture, the Existing Indenture Supplement 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 Notes, all other sums payable by the Issuer under the Indenture and the compliance by the Issuer with the provisions of the Indenture are preserved, (ii) the liens and security interests granted under the Indenture continue in full force and effect, and (iii) any
reference to the Base Indenture or the Existing Indenture Supplement in any such Transaction Document shall be deemed to reference to the Base Indenture or the Existing Indenture Supplement, as applicable, as amended by this Amendment.
Section 6.Representations and Warranties. The Issuer hereby represents and warrants to the Indenture Trustee, the Noteholder, the Servicer, any Derivative Counterparty, any Supplemental Credit Enhancement Provider and any Liquidity Provider that it is in compliance with all the terms and provisions set forth in the Base Indenture on its part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 9.1 of the Base Indenture.
Section 7.Limited Effect. Except as expressly amended and modified by this Amendment, the Indenture shall continue to be, and shall remain, in full force and effect in accordance with its terms and the execution of this Amendment.
Section 8.Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
Section 9. Recitals. The statements contained in the recitals to this Amendment shall be taken as the statements of the Issuer, and the Indenture Trustee (in each capacity) assumes no responsibility for their correctness. The Indenture Trustee makes no representation as to the validity or sufficiency of this Amendment (except as may be made with respect to the validity of its own obligations hereunder). In entering into this Amendment, the Indenture Trustee shall be entitled to the benefit of every provision of the Base Indenture relating to the conduct of or affecting the liability of or affording protection to the Indenture Trustee.
Section 10.Counterparts. This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile or other electronic transmission, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement.
Section 11.GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 12.Owner Trustee Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Savings Fund Society, FSB (“WSFS”), not individually or personally, but solely as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the powers and authority conferred and vested in WSFS as Owner Trustee under the Trust Agreement, (b) each of the representations, warranties, undertakings, obligations and agreements herein made on the part of the Issuer is
made and intended not as a personal representation, undertaking, obligation, warranty or agreement by WSFS, but is made and intended for the purpose of binding only, and is binding only on, the Issuer, (c) nothing herein contained shall be construed as creating any liability on WSFS individually or personally, to perform any covenant or obligation of the Issuer, either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) WSFS has made and will make no investigation as to the accuracy or completeness of any representations or warranties made by the Issuer in this Amendment, and (e) under no circumstances shall WSFS be personally liable for the payment of any indebtedness, indemnities or expenses of the Issuer or be liable for the performance, breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer or by WSFS as Owner Trustee on behalf of the Issuer under this Amendment or the other Transaction Documents as to all of which recourse shall be had solely to the assets of the Issuer.
The parties hereto hereby acknowledge and agree that certain duties, rights and obligations of the Issuer hereunder will be exercised and performed on behalf of the Issuer by the Administrator pursuant to the Administration Agreement, except to the extent the Owner Trustee is expressly obligated to perform such obligation under the Trust Agreement or expressly required under applicable law, and hereby acknowledge and accept the terms of the Trust Agreement as of the date hereof and (ii) under no circumstances shall the Owner Trustee have any duty or obligation to supervise or monitor the performance of the Issuer, or to supervise or monitor the performance or to exercise or perform the rights, duties or obligations, of the Custodian, the Indenture Trustee, the Calculation Agent, the Paying Agent, the Securities Intermediary, the Servicer, the Administrator, the Administrative Agent or any other Person (except the Issuer as expressly set forth in the Transaction Documents) hereunder.
Section 13.Indenture Trustee. Each of the Noteholder and the Issuer authorize and direct the Indenture Trustee to execute this Amendment. The Issuer certifies that pursuant to Section 11.15 of the Base Indenture, the Issuer is duly authorized to direct the Indenture Trustee and agrees that all actions taken by the Indenture Trustee in connection with this Amendment are covered by the indemnity provisions in Section 11.7(b) of the Indenture.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.
LOANDEPOT AGENCY ADVANCE RECEIVABLES TRUST, as Issuer
By: Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as Owner Trustee
By:/s/ Devon C. A. Reverdito
Name: /s/ Devon C. A. Reverdito
Title: Vice President
[Signature page to Amendment No. 6 to Series 2020-VF1 Indenture Supplement]
LOANDEPOT.COM, LLC, as Servicer and as Administrator
By:/s/ David Hayes
Name: David Hayes
Title: CFO
CITIBANK, N.A., as Indenture Trustee, Calculation Agent, Paying Agent, Custodian and Securities Intermediary, and not in its individual capacity
By:/s/ Valerie Delgado
Name: Valerie Delgado
Title: Senior Trust Officer
JPMORGAN CHASE BANK, N.A., as Administrative Agent
By:/s/Jason Brand
Name: Jason Brand
Title: Executive Director
CONSENTED TO BY:
JPMORGAN CHASE BANK, N.A., as 100% Noteholder of the Series 2020-VF1 Variable Funding Notes
By:/s/Jason Brand
Name: Jason Brand
Title: Executive Director
[Signature page to Amendment No. 6 to Series 2020-VF1 Indenture Supplement]
EXHIBIT A
CONFORMED COPY REFLECTING:
AMENDMENT NO. 1, DATED AS OF OCTOBER 28, 2020;
AMENDMENT NO. 2, DATED AS OF SEPTEMBER 23, 2021;
AMENDMENT NO. 3, DATED AS OF FEBRUARY 14, 2022;
AMENDMENT NO. 4, DATED AS OF SEPTEMBER 23, 2022;
AMENDMENT NO. 5, DATED AS OF SEPTEMBER 22, 2023; AND
AMENDMENT NO. 6, DATED AS OF SEPTEMBER 27, 2024
LOANDEPOT AGENCY ADVANCE RECEIVABLES TRUST,
as Issuer
and
CITIBANK, N.A.,
as Indenture Trustee, Calculation Agent, Paying Agent, Custodian and Securities Intermediary
and
LOANDEPOT.COM, LLC,
as Administrator and as Servicer
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
__________
SERIES 2020-VF1
INDENTURE SUPPLEMENT
Dated as of September 24, 2020
to
INDENTURE
Dated as of September 24, 2020
__________
LOANDEPOT AGENCY ADVANCE RECEIVABLES TRUST,
ADVANCE RECEIVABLES BACKED NOTES,
SERIES 2020-VF1
Table of Contents
Page
Section 2. Defined Terms. 2
Section 3. Forms of Series 2020-VF1 Notes. 19
Section 4. Collateral Value Exclusions. 19
Section 5. Series Reserve Account. 20
Section 6. Payments; Note Balance Increases; Early Maturity. 20
Section 7. Determination of Note Interest Rate and the Benchmark. 21
Section 8. Increased Costs. 22
Section 9. Series Reports. 24
Section 10. Conditions Precedent Satisfied. 26
Section 11. Representations and Warranties. 26
Section 12. Amendments. 26
Section 13. Counterparts. 27
Section 14. Entire Agreement. 27
Section 15. Limited Recourse. 27
Section 16. Owner Trustee Limitation of Liability. 28
Section 17. Maximum Committed VFN Principal Balance. 29
Section 18. Miscellaneous. 29
Section 19. Incorporation by Reference. 29
SCHEDULES
CONFORMED COPY REFLECTING:
AMENDMENT NO. 1, DATED AS OF OCTOBER 28, 2020;
AMENDMENT NO. 2, DATED AS OF SEPTEMBER 23, 2021;
AMENDMENT NO. 3, DATED AS OF FEBRUARY 14, 2022;
AMENDMENT NO. 4, DATED AS OF SEPTEMBER 23, 2022;
AMENDMENT NO. 5, DATED AS OF SEPTEMBER 22, 2023; AND
AMENDMENT NO. 6, DATED AS OF SEPTEMBER 27, 2024
Schedule 1 Series Reserve Account with respect to the Series 2020-VF1 Notes
SERIES 2020-VF1 INDENTURE SUPPLEMENT (this “Indenture Supplement”), dated as of September 24, 2020, is made by and among LOANDEPOT AGENCY ADVANCE RECEIVABLES TRUST, a statutory trust organized under the laws of the State of Delaware (the “Issuer”), CITIBANK, N.A. (“Citibank”), a national banking association, as indenture trustee (the “Indenture Trustee”), as calculation agent (the “Calculation Agent”), as paying agent (the “Paying Agent”), as custodian (the “Custodian”) and as securities intermediary (the “Securities Intermediary”), LOANDEPOT.COM, LLC, a limited liability company organized in the State of Delaware, as servicer (“Servicer”) and as administrator (“Administrator”), and JPMORGAN CHASE BANK, N.A. (“JPMorgan”), a national banking association, as Administrative Agent (as defined below). This Indenture Supplement relates to and is executed pursuant to that certain Indenture (as amended, supplemented, restated or otherwise modified from time to time, the “Base Indenture”) supplemented hereby, dated as of September 24, 2020, among the Issuer, the Servicer, the Administrator and the Indenture Trustee, the Calculation Agent, the Paying Agent, the Custodian, the Securities Intermediary and the Administrative Agent, all the provisions of which are incorporated herein as modified hereby and shall be a part of this Indenture Supplement as if set forth herein in full (the Base Indenture as so supplemented by this Indenture Supplement being referred to as the “Indenture”).
Capitalized terms used and not otherwise defined herein shall have the respective meanings given them in the Base Indenture.
PRELIMINARY STATEMENT
The Issuer has duly authorized the issuance of a Series of Notes, the Series 2020-VF1 Notes (as defined below). The parties are entering this Indenture Supplement to document the terms of the issuance of the Series 2020-VF1 Notes pursuant to the Base Indenture, which provides for the issuance of Notes in multiple series from time to time.
Section 14.Creation of Series 2020-VF1 Notes.
There are hereby created, effective as of the Issuance Date, the Series 2020-VF1 Notes, to be issued pursuant to the Base Indenture and this Indenture Supplement, to be known as “loanDepot Agency Advance Receivables Trust Advance Receivables Backed Notes, Series 2020-VF1 Notes.” The Series 2020-VF1 Notes shall not be subordinated to any other Series of Notes. The Series 2020-VF1 Notes are issued in one (1) Class of Variable Funding Notes (Class A-VF1) (the “Series 2020-VF1 Variable Funding Notes” or the “Series 2020-VF1 Notes”), with the Initial Note Balance, Maximum VFN Principal Balance, Stated Maturity Date, Revolving Period, Note Interest Rate, Expected Repayment Date and other terms as specified in this Indenture Supplement. The Series 2020-VF1 Notes shall be secured by the Trust Estate Granted to the Indenture Trustee pursuant to the Base Indenture. For the avoidance of doubt, the Trust Estate is subject to the terms and conditions set forth in the Base Indenture and the applicable Consent. The Indenture Trustee shall hold the Trust Estate as collateral security for the benefit of the Noteholders of the Series 2020-VF1 Notes and all other Series of Notes issued under the Indenture as described therein. In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Base Indenture, the terms and provisions of this Indenture Supplement shall govern to the extent of such conflict.
Section 15.Defined Terms.
With respect to the Series 2020-VF1 Notes and in addition to or in replacement for the definitions set forth in Section 1.1 of the Base Indenture, the following definitions shall be assigned to the defined terms set forth below:
“30-Day Peak Committed VFN Principal Balance” means for any Payment Date (but not any Interim Payment Date), beginning with the Payment Date occurring on October 12, 2020, with respect to the Class A-VF1, the maximum outstanding Committed VFN Principal Balance during the period commencing on the prior Payment Date and ending on the day immediately preceding such Payment Date.
“Adjusted Daily Simple SOFR” means, with respect to any Interest Accrual Period, an interest rate per annum equal to (i) the related Daily Simple SOFR, plus (ii) ten basis points (0.10%).
“Administrative Agent” means, for so long as the Series 2020-VF1 Notes have not been paid in full: (i) with respect to the provisions of this Indenture Supplement, JPMorgan or any Affiliate or successor thereto; and (ii) with respect to the provisions of the Base Indenture, and notwithstanding the terms and provisions of any other Indenture Supplement, together, JPMorgan and such other parties as set forth in any other Indenture Supplement, or a respective Affiliate or any respective successor thereto. For the avoidance of doubt, reference to “it” or “its” with respect to the Administrative Agent in the Base Indenture shall mean “them” and “their,” and reference to the singular therein in relation to the Administrative Agent shall be construed as if plural.
“Administrator Change of Control” occurs if the Administrator shall cease to directly or indirectly own 100% of the equity interests of the Depositor.
“Advance Rates” means, on any date of determination with respect to each Receivable related to the Series 2020-VF1 Notes, the percentage amount based on the Advance Type of such Receivable, as set forth in the table below, subject to amendment by mutual agreement of the Administrative Agent and the Administrator; provided, that
[***]
“Advance Ratio” means, as of any date of determination with respect to any Designated Pool, the ratio (expressed as a percentage), calculated as of the last day of the calendar month immediately preceding the calendar month in which such date occurs, of (i) the related PSA Stressed Nonrecoverable Advance Amount on such date over (ii) the aggregate monthly scheduled principal and interest payments for the calendar month immediately preceding the calendar month in which such date occurs with respect to all non-Delinquent Mortgage Loans in such Designated Pool, serviced pursuant to the related Designated Servicing Contract.
“Aggregate VFN Principal Balance” means, as of any date, the sum of the Committed VFN Principal Balance and the Uncommitted VFN Principal Balance on a particular day.
“AVM” means an automated valuation model providing computerized statistical modeling of a variety of data to generate home appraisals for mortgages based on comparable sales in the geographic area of the Mortgaged Property, title records, and other market factors and such AVM is acceptable as an appraisal in accordance with the Fannie Mae Guide or the Freddie Mac Guide, as applicable.
“Base Indenture” has the meaning assigned to such term in the Preamble.
“Benchmark” means, with respect to any Interest Accrual Period, the greater of (i) the Adjusted Daily Simple SOFR or a Benchmark Replacement Rate, and (ii) [***].
“Benchmark Administration Changes” means, with respect to the Benchmark (including any Benchmark Replacement Rate), any technical, administrative or operational changes (including without limitation changes to the timing and frequency of determining rates and making payments of interest, length of lookback periods, and other administrative matters as may be appropriate, in the sole and good faith discretion of the Administrative Agent, to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Indenture Supplement).
“Benchmark Replacement Rate” means a rate determined by the Administrative Agent in accordance with Section 7(c) of this Indenture Supplement.
“Cash Equivalents” means [***].
“Claims Loss Coverage Amount” means, as of a Testing Date, the aggregate amount of Escrow Advances and Corporate Advances included in the Trust Estate as of such Testing Date multiplied by (i) the most recent Non-Recoverable Rate and (ii) [***].
“Claims Loss Coverage Percentage” means, a fraction, expressed as a percentage, equal to (a) the Claims Loss Coverage Amount, divided by (b) the aggregate amount of Advances included in the Trust Estate as of the Testing Date.
“Class A-VF1 Variable Funding Notes” means, the Variable Funding Notes, Class A-VF1 Variable Funding Notes, issued hereunder by the Issuer, having an Aggregate VFN Principal Balance of no greater than the applicable Maximum VFN Principal Balance.
“Collateral Transfer” has the meaning assigned to such term in Section 3 of this Indenture Supplement.
“Committed VFN Principal Balance” means, on any date, for each Class of the Series 2020-VF1 Notes (i) all portions of the Initial Note Balance and each Additional Note Balance which were allocated to the “Committed VFN Principal Balance,” less (ii) all amounts paid prior
to such date of determination on such Class of the Series 2020-VF1 Notes with respect to principal and allocated to reduce the “Committed VFN Principal Balance.”
“Corporate Trust Office” means with respect to the Series 2020-VF1 Notes, the office of the Indenture Trustee (or Citibank in any of its capacities) at which at any particular time its corporate trust business will be administered, which office at the date hereof is located at (i) for purposes other than final payment or note transfers, Citibank, N.A., Agency & Trust, 388 Greenwich Street, New York, New York 10013, Attention: loanDepot Agency Advance Receivables Trust, Series 2020-VF1, email: [***] and (ii) for purposes of final payment and note transfers, Citibank, N.A., Agency & Trust, 480 Washington Boulevard, 30th Floor, Jersey City, New Jersey 07310, Attention: loanDepot Agency Advance Receivables Trust, Series 2020-VF1.
“Cumulative Interest Shortfall Amount Rate” means, [***], per annum.
“Daily Simple SOFR” means, with respect to each Interest Accrual Period, the SOFR appearing as the rate for the day that is one (1) U.S. Government Securities Business Day prior to the first day of such Interest Accrual Period. If the rate for any such U.S. Government Securities Business Day has not been published by the applicable administrator within two (2) U.S. Government Securities Business Days following such day (and a Benchmark Replacement Rate has not been determined by the Administrative Agent as provided herein), then the SOFR for such day will be the last appearing SOFR published prior to such day. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Administrator or the Servicer.
“Default Supplemental Fee” means for each Class of Series 2020-VF1 Notes and each Payment Date following an Event of Default and on the date of final payment of such Class (if an Event of Default is continuing on such final payment date), a fee equal to the product of:
(i) the Default Supplemental Fee Rate multiplied by;
(ii) a fraction, the numerator of which is the number of days elapsed from and including the prior Payment Date (or, if later, the occurrence of such Event of Default) and the denominator of which equals 360, multiplied by;
(iii) the average daily Note Balance since the prior Payment Date of such Class of Series 2020-VF1 Variable Funding Notes.
“Default Supplemental Fee Rate” means, with respect to the Series 2020-VF1 Notes, [***]%, per annum.
“Delinquent” means for any Mortgage Loan, any Monthly Payment due thereon 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.
“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.
“ERD Supplemental Fee” means, for the Series 2020-VF1 Notes and each Payment Date from and after the Expected Repayment Date, if the Notes of such Class have not been refinanced or paid in full on or before the Expected Repayment Date for only such periods as the Notes of such Class are Outstanding and for so long as the Notes of such Class have a Note Balance greater than zero, a fee equal to the product of:
(i) the ERD Supplemental Fee Rate multiplied by
(ii) a fraction, the numerator of which is the number of days elapsed from and including the prior Payment Date (or, if later, the occurrence of such Expected Repayment Date) and the denominator of which equals 360, multiplied by
(iii) the average daily Note Balance since the prior Payment Date of such Class of Series 2020-VF1 Variable Funding Notes.
“ERD Supplemental Fee Rate” means, with respect to the Series 2020-VF1 Notes, [***]%, per annum.
“Expected Repayment Date” means September 26, 2025.
“Expense Rate” means, as of any date of determination, with respect to the Series 2020-VF1 Notes, the percentage equivalent of a fraction, (i) the numerator of which equals the sum of (1) the product of the Series Allocation Percentage for such Series multiplied by (1) the aggregate amount of Fees due and payable by the Issuer on the next succeeding Payment Date plus (2) the product of the Series Allocation Percentage for such Series multiplied by any expenses payable or reimbursable by the Issuer on the next succeeding Payment Date, up to the applicable Expense Limit, if any, prior to any payments to the Noteholders of the Series 2020-VF1 Notes, pursuant to the terms and provisions of this Indenture Supplement, the Base Indenture or any other Transaction Document that have been invoiced to the Indenture Trustee and the Administrator, plus (3) the aggregate amount of related Series Fees payable by the Issuer on the next succeeding Payment Date and (ii) the denominator of which equals the sum of the outstanding Note Balances of all Series 2020-VF1 Notes at the close of business on such date.
“Facility Advance Rate” means, at any time, the aggregate Collateral Value of all Facility Eligible Receivables that have positive Advance Rates for the Series 2020-VF1 Notes, divided by the aggregate Receivable Balances of all Facility Eligible Receivables that have positive Advance Rates for the Series 2020-VF1 Notes. Such Facility Advance Rate shall be calculated by the Administrator.
“Fee Letter” means that certain Fee Letter, dated September 24, 2020 (as amended, supplemented, or otherwise modified from time to time), by and among JPMorgan and the Administrator.
“Governmental Authority” means the United States of America, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government and having jurisdiction over the applicable Person.
“Increased Costs” has the meaning assigned to such term in Section 8 of this Indenture Supplement.
“Increased Costs Limit” means for each Noteholder of a Series 2020-VF1 Variable Funding Note, such Noteholder’s pro rata percentage (based on the Note Balance of such Noteholder’s Series 2020-VF1 Variable Funding Notes) of [***]% of the average aggregate Note Balance for all Classes of Series 2020-VF1 Variable Funding Notes Outstanding for any twelve-month period.
“Indebtedness” means [***].
“Indemnified Taxes” means taxes imposed on or withheld or deducted from any payment made by the Issuer to a Noteholder with respect to the Series 2020-VF1 Notes under this Indenture Supplement or the other Transaction Documents other than (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 such Noteholder 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 imposed as a result of a present or former connection between such Noteholder and the jurisdiction imposing such tax (other than connections arising from such Noteholder having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Series 2020-VF1 Note or Transaction Document), (b) U.S. federal withholding taxes imposed on amounts payable to or for the account of such Noteholder with respect to an applicable interest in a Series 2020-VF1 Note pursuant to a law in effect on the date on which (i) such Noteholder acquires such interest in the Series 2020-VF1 Note or (ii) such Noteholder changes its lending office, except in each case to the extent that amounts with respect to such taxes were payable either to such Noteholder's assignor immediately before such Noteholder became a party hereto or to such Noteholder immediately before it changed its lending office, (c) taxes attributable to such Noteholder’s failure to furnish the Indenture Trustee on behalf of the Issuer a fully completed and accurate applicable IRS Form W-9, W-8BEN-E, W-8ECI or W-8IMY (with any applicable attachments) on or before such Noteholder is entitled to a payment under this Indenture Supplement or the other Transaction Documents, and (d) any withholding Taxes imposed under Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof that is substantively comparable and not materially more onerous to comply with, 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.
“Initial Note Balance” means, for any Note or for any Class of Notes, the amount drawn on such Note as of the Issuance Date. For the avoidance of doubt, the requirement for minimum
denominations in Section 6.2 of the Base Indenture shall not apply in the case of the Series 2020-VF1 Variable Funding Notes.
“Initial Payment Date” means October 12, 2020.
“Interest Accrual Period” means, for the Series 2020-VF1 Notes and any Payment Date, the period beginning on the immediately preceding Payment Date (or, in the case of the first Payment Date with respect to any Class, the Issuance Date) and ending on the day immediately preceding the current Payment Date. The Interest Payment Amount for the Series 2020-VF1 Notes on any Payment Date shall be determined based on the Interest Day Count Convention.
“Interest Day Count Convention” means with respect to the Series 2020-VF1 Notes, the actual number of days in the related Interest Accrual Period divided by 360.
“Interim Payment Date” means, subject to the notice provisions of Section 4.3 of the Base Indenture, with respect to the Series 2020-VF1 Notes, [***] provided that the Issuer provides the Noteholders of the Series 2020-VF1 Notes and the Indenture Trustee [***] prior notice, or if any such date is not a Business Day, the next succeeding Business Day to the extent any such day occurs during the Revolving Period, and any other date otherwise agreed to between the Issuer and the Noteholders of the Series 2020-VF1 Notes. For the avoidance of doubt, no Interim Payment Date shall occur during the continuance of a Facility Early Amortization Event.
“Issuance Date” means September 24, 2020.
“Limited Funding Date” means, subject to the notice provisions of the Base Indenture, any Business Day that is not a Payment Date or Interim Payment Date, at a time when no Facility Early Amortization Event shall have occurred and shall be continuing, which date is designated by the Administrator on behalf of the Issuer to the Indenture Trustee and the Administrative Agent in writing [***] prior to such date; provided, that the Administrator shall have delivered a Funding Certification in accordance with Section 4.3(a) of the Base Indenture for such date, and provided, further that no fundings may be made under a Variable Funding Note on such date and no payments on any Notes shall be made on such date; provided, further, that [***].
“Market Value” means, as of any date of determination with respect to a Mortgaged Property, the value of such property (determined by the Servicer in accordance with the Freddie Mac Guide or the Fannie Mae Guide, as applicable) or the appraised value of the Mortgaged Property obtained in connection with its origination, if no updated valuation has been required under the Freddie Mac Guide or the Fannie Mae Guide, as applicable; provided, that such value shall equal [***].
“Market Value Ratio” means, as of any date of determination with respect to a Designated Pool, the ratio (expressed as a percentage) of (i) the aggregate of the Receivable Balance of all Facility Eligible Receivables related to such Designated Pool on such date over (ii) the aggregate Market Value of the Mortgaged Properties and REO Properties for the Mortgage Loans in such Designated Pool on such date.
“Maximum Committed VFN Principal Balance” means, for the Class A-VF1 and with respect to any Funding Date, $[***] or such other amount, calculated pursuant to a written agreement between the Administrator and the Administrative Agent; provided that, on each Payment Date (beginning with the Payment Date occurring on October 12, 2020), if the 30-Day Peak Committed VFN Principal Balance is [***] % of the Maximum Committed VFN Principal Balance during the related period, the Maximum Committed VFN Principal Balance will be automatically reduced to an amount equal the nearest million that is greater than the product of (i) the 30-Day Peak Committed VFN Principal Balance, times (ii) [***], provided that such amount does not exceed the Maximum Committed VFN Principal Balance currently in effect[ ***].
“Maximum Uncommitted VFN Principal Balance” means, for the Class A-VF1 and with respect to any Funding Date, the difference of the (i) Maximum VFN Principal Balance, minus (ii) the Maximum Committed VFN Principal Balance.
“Maximum VFN Principal Balance” means, for the Series 2020-VF1 Notes and with respect to any Funding Date, $[***], or such other amount, calculated pursuant to a written agreement between the Administrator and the Administrative Agent; provided further that, [***].
“Monthly Payment” means, with respect to any Mortgage Loan, the monthly scheduled principal and interest payments required to be paid by the mortgagor on any Due Date with respect to such Mortgage Loan.
“Monthly Reimbursement Rate” means, as of any date of determination, the arithmetic average of the fractions (expressed as percentages), determined for [***] obtained by dividing (i) the aggregate Advance Reimbursement Amounts collected by the Servicer and deposited into the Trust Accounts [***] by (ii) the sum, [***].
“Net Proceeds Coverage Percentage” means, for any Payment Date, the percentage equivalent of a fraction, (i) the numerator of which equals the amount of Collections on Receivables deposited into the Collection and Funding Account during the related Monthly Advance Collection Period (which shall include, for purposes of this definition, amounts deemed received on account of Credited Advance Funding, if any, during such Monthly Advance Collection Period, [***] and (ii) the denominator of which equals the aggregate average outstanding Note Balances of all Outstanding Notes during such Monthly Advance Collection Period.
“Net Worth” shall mean, [***].
“Non-Recourse” means, with respect to any specified Person, Indebtedness that is specifically advanced to finance the acquisition of property or assets and secured only by the property or assets to which such Indebtedness relates without recourse to such Person (other than subject to such customary carve-out matters for which such Person acts as a guarantor in connection with such Indebtedness, such as bad boy acts, fraud, misappropriation, breach of representation and warranty, misapplication, and environmental matters); provided that, notwithstanding the foregoing, if any Indebtedness that would be Non-Recourse Indebtedness
but for the fact that such Indebtedness is made with recourse to other assets, then only the portion of such Indebtedness that is recourse to such other assets shall be deemed not to be Non- Recourse Indebtedness, and all other Indebtedness shall be deemed to be Non-Recourse Indebtedness.
“Non-Recoverable Rate” means, a percentage, as of a Testing Date, equal to the greater of (i) the aggregate amount of Corporate Advances and Escrow Advances included in the Trust Estate in the [***] that the Servicer has written-off in accordance with its policies due to Servicer error, divided by the aggregate amount of claims filed in the [***], or (ii) the aggregate amount of Corporate Advances and Escrow Advances included in the Trust Estate written-off by the Servicer in accordance with its policies due to Servicer error in the [***], divided by the aggregate amount of claims filed in the [***].
“Note Interest Rate” means, for each Interest Accrual Period for the Series 2020-VF1 Notes, the sum of: (i) the Benchmark, plus (ii) [***]% per annum.
“Note Purchase Agreement” means that Note Purchase Agreement, dated as of September 24, 2020 (as amended, supplemented, or otherwise modified from time to time), by and among the Issuer, the Depositor, the Servicer, the Administrator, and JPMorgan, as the Administrative Agent and the Purchaser.
“PSA Stressed Nonrecoverable Advance Amount” means as of any date of determination and with respect to any Designated Pool, the sum of:
[***].
“Purchaser” means JPMorgan Chase Bank, N.A., as purchaser under the Note Purchase Agreement, and any successors and assigns in such capacity.
“Redemption Percentage” means, for the Series 2020-VF1 Notes, 10.00%.
“Regulatory Change” means (a) the adoption of any law, rule or regulation after the date hereof, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date hereof or (c) compliance by any Noteholder (or, for purposes of Section 8(a)(3), by any lending office of such Noteholder or by such Noteholder’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date hereof.
“Senior Rate” means, for the Series 2020-VF1 Notes, the Note Interest Rate.
“Series 2020-VF1 Note Balance” means the Aggregate VFN Principal Balance.
“Series Fee Limit” means none.
“Series Fees” means, for the Series 2020-VF1 Notes and any Payment Date, the sum of (i) the fees set forth in the Fee Letter and (ii) the aggregate unreimbursed fees, indemnification amounts owed to and expenses of the Administrative Agent due under the Indenture.
“Series Required Noteholders” means, for only so long as the Series 2020-VF1 Variable Funding Notes are Outstanding, 100% of the Noteholders of the Series 2020-VF1 Variable Funding Notes, and thereafter clause (a) of the definition of the “Series Required Noteholders” in the Base Indenture shall apply.
“Series Reserve Required Amount” means with respect to any Payment Date or Interim Payment Date, as the case may be, for the Series 2020-VF1 Notes, an amount equal to on any Payment Date or Interim Payment [***], which shall be calculated as follows: [***] equal to (i) the applicable Senior Rate, multiplied by (ii) the Note Balance of each Class of Series 2020-VF1 Notes as of such Payment Date or Interim Payment Date, as the case may be, divided by (iii) [***].
“Servicer Information” has the assigned to such term in Section 9 of this Indenture Supplement.
“SOFR” means a rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on its website.
“Stated Maturity Date” means, for each Class of the Series 2020-VF1 Notes, the day that is thirty (30) years following the end of the related Revolving Period (or, if such day is not a Business Day, the next Business Day).
“Stressed Note Interest Rate” means, for each Interest Accrual Period for the Series 2020-VF1 Notes, the sum of: (i) the Benchmark, plus (ii) [***]%, per annum.
“Stressed Time” means, as of any date of determination for any Class of Series 2020-VF1 Notes, the percentage equivalent of a fraction, the numerator of which is [***], and the denominator of which equals the related Stressed Time Percentage for such Class times the Monthly Reimbursement Rate on such date.
“Stressed Time Percentage” means for Class A-VF1, [***]%.
“Tangible Net Worth” means [***].
“Target Amortization Amount” means,[***].
“Target Amortization Event” for the Series 2020-VF1 Notes, means the earlier of (A) the related Expected Repayment Date or (B) the occurrence of any of the following conditions or events, which is not waived by 100% of the Noteholders of the Series 2020-VF1 Notes: [***].
“Testing Date” means, [***].
“Total Advances” means, with respect to any Mortgage Loan or REO Property on any date of determination, the sum of all outstanding amounts of all outstanding Advances related to
Facility Eligible Receivables funded by the Servicer out of its own funds or with respect to such Mortgage Loan or REO Property on such date.
“Transaction Documents” means, in addition to the documents set forth in the definition thereof in the Base Indenture, this Indenture Supplement, the Note Purchase Agreement and the Fee Letter, each as amended, supplemented, restated or otherwise modified from time to time.
“Trigger Advance Rate” means[***].
“Uncommitted VFN Principal Balance” means, on any date of determination, for each Class of the Series 2020-VF1 Notes, (i) all portions of the Initial Note Balance and each Additional Note Balance which were allocated to the “Uncommitted VFN Principal Balance,” less (ii) all amounts paid prior to such date of determination on such Class of the Series 2020-VF1 Notes with respect to principal and allocated to reduce the “Uncommitted VFN Principal Balance.”
“Undrawn Fee Amount” means, each day during the Revolving Period for the Series 2020-VF1 Notes, an amount, calculated on a daily basis, equal to the product of (i) the Maximum Committed VFN Principal Balance less the Aggregate VFN Principal Balance of the Series 2020-VF1 Notes as of the close of business on such day, multiplied by (ii) the applicable Undrawn Fee Rate, divided by 360. For the avoidance of doubt, the Undrawn Fee Rate shall be zero for each day that the Committed VFN Principal Balance equals the Maximum Committed VFN Principal Balance.
“Undrawn Fee Rate” means, with respect to each Class of the Series 2020-VF1 Notes and for each Interest Accrual Period, the per annum rate stated below which corresponds to the applicable Usage Percentage: [***]
“Unrestricted Cash” means[***] .
“Usage Percentage” means, with respect to any Interest Accrual Period, the fraction, expressed as a percentage, (i) the numerator of which is the daily average Committed VFN Principal Balance during such Interest Accrual Period, and (ii) the denominator of which is the daily average Maximum Committed VFN Principal Balance during such Interest Accrual Period.
“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday and (iii) 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. Risk Retention Rules” has the meaning assigned to such term in Section 11(b) of this Indenture Supplement.
“Warehouse Facility Documents” means that certain Master Repurchase Agreement dated as of June 3, 2016 (as the same may be amended, restated, supplemented or otherwise modified from time to time) between loanDepot.com, LLC, as seller, and JPMorgan Chase Bank,
N.A., as buyer, and all other Transaction Documents (as the same may be amended, restated, supplemented or otherwise modified from time to time) as defined therein.
“WSFS” means Wilmington Savings Fund Society, FSB.
Section 16.Forms of Series 2020-VF1 Notes.
The form of the Rule 144A Definitive Note and that may be used to evidence the Series 2020-VF1 Variable Funding Notes in the circumstances described in Section 5.4(c) of the Base Indenture are attached to the Base Indenture as Exhibit A.
In addition to any provisions set forth in Section 6.5 of the Base Indenture, with respect to the Series 2020-VF1 Notes, the Noteholder of any Class of such Notes shall only transfer its beneficial interest therein to another potential investor in accordance with the Note Purchase Agreement, subject to the terms and provisions of the applicable Consent and Section 19 hereof. The Indenture Trustee (in all of its capacities) shall not be responsible to monitor, and shall not have any liability, for any such transfers of beneficial interests of participation interests.
For the avoidance of doubt, no Class of the Series 2020-VF1 Notes shall be Specified Notes as defined under the Base Indenture, and the Series 2020-VF1 Notes do not include any Retained Notes.
Proposed transferees of the Series 2020-VF1 Notes will be required to make (or in the case of Book Entry Notes, will be deemed to make) certain certifications for purposes of ERISA as provided in Section 6.5 of the Base Indenture.
In connection with any sale or transfer of Series 2020-VF1 Notes, the Purchaser shall certify in writing for the benefit of the Indenture Trustee and the Administrator that the prospective assignee is not a Prohibited Assignee (as such term is defined in the Note Purchase Agreement).
Prior to directly or indirectly transferring or otherwise using a Note as collateral for any financing arrangement or to support the debt or equity interests issued by a special purpose entity (collectively, a “Collateral Transfer”), the Noteholder providing such Note as collateral for a financing arrangement or in exchange for debt or equity interests in a special purpose entity shall have received advice from a nationally recognized tax counsel experienced in the tax aspects of asset securitization to the effect that, for U.S. federal income tax purposes, such Collateral Transfer will not result in the Issuer being characterized as a taxable mortgage pool.
Section 17.Collateral Value Exclusions.
For purposes of calculating “Collateral Value” in respect of the Series 2020-VF1 Notes, the Collateral Value shall be zero for any Receivable that: [***].
Section 18.Series Reserve Account.
In accordance with the terms and provisions of this Section 5 and Section 4.6 of the Base Indenture, the Indenture Trustee shall establish and maintain a Series Reserve Account with respect to the Series 2020-VF1 Notes, which shall be an Eligible Account, for the benefit of the Series 2020-VF1 Noteholders. The Series Reserve Account with respect to the Series 2020-VF1 Notes is listed on Schedule 1 attached hereto.
Section 19.Payments; Note Balance Increases; Early Maturity.
(a)Except as otherwise expressly set forth herein, the Paying Agent shall make payments of interest on the Series 2020-VF1 Notes on each Payment Date in accordance with Section 4.5 of the Base Indenture.
(b) The Paying Agent shall make payments of principal on the Series 2020-VF1 Notes on each Interim Payment Date and each Payment Date in accordance with Sections 4.4 and 4.5, respectively, of the Base Indenture (at the option of the Issuer in the case of requests during the Revolving Period for the Series 2020-VF1 Notes). The Note Balance of the Series 2020-VF1 Notes may be increased from time to time on certain Funding Dates in accordance with the terms and provisions of Section 4.3 of the Base Indenture, but not in excess of the related Maximum VFN Principal Balance.
Notwithstanding anything to the contrary contained herein or in the Base Indenture, the Issuer may, upon [***] prior written notice to the Administrative Agent and Indenture Trustee, redeem in whole or in part, and/or terminate and cause retirement of any of the Series 2020-VF1 Notes at any time using proceeds of issuance of new Notes.
The Series 2020-VF1 Notes are also subject to optional redemption in accordance with the terms of Section 13.1 of the Base Indenture.
(c)For the avoidance of doubt, the failure pay any Target Amortization Amount when due, as described in the definition thereof, shall constitute an Event of Default.
(d)The Administrative Agent and the Issuer further confirm that the Series 2020-VF1 Notes issued on the Issuance Date pursuant to this Indenture Supplement shall be issued in the name of “JPMorgan Chase Bank, N.A.” The Issuer and the Administrative Agent hereby direct the Indenture Trustee to issue the Series 2020-VF1 Notes in the name of “JPMorgan Chase Bank, N.A.” For the avoidance of doubt, the parties hereto hereby agree that, in accordance with the terms and provisions of the Note Purchase Agreements, the Administrative Agent may act as agent of each Noteholder (or “purchaser”, howsoever denominated) party to the Note Purchase Agreement in respect of the related Series 2020-VF1 Notes and shall determine the allocation of “Additional Note Balances” (as such term is defined in the Note Purchase Agreement, if applicable) or VFN Principal Balance increases to be funded by each such Noteholder (or purchaser).
(e)Notwithstanding anything to the contrary in Section 4.3(b)(iii) of the Base Indenture, VFN draws on any other Series of VFNs shall be made on a pro rata basis with the Series 2020-VF1 Notes. The VFN draws in respect of the Series 2020-VF1 Variable Funding Notes shall be made in accordance with the instructions provided in the related Funding Certification.
(f)The parties hereto agree that the failure to pay any portion of any related Undrawn Fee Amount on any Payment Date shall constitute an Event of Default under Section 8.1(a)(i) of the Base Indenture.
Section 20.Determination of Note Interest Rate and the Benchmark.
(a) At least [***] prior to each Determination Date, the Administrative Agent shall calculate the Note Interest Rate (and each component thereof) for the related Interest Accrual Period and the Interest Payment Amount for the Series 2020-VF1 Notes for the upcoming Payment Date, and include a report of such amount in the related Payment Date Report.
(b) The establishment of the Benchmark by the Administrative Agent and the Administrative Agent’s subsequent calculation of the Note Interest Rate (and each component thereof) on the Series 2020-VF1 Variable Funding Notes for the relevant Interest Accrual Period, and the Interest Payment Amount for the Series 2020-VF1 Notes, in the absence of manifest error, will be final and binding.
(c) If prior to any Payment Date, the Administrative Agent determines in its good faith discretion that, by reason of circumstances affecting the relevant market, (i) adequate and reasonable means do not exist for ascertaining the Benchmark, (ii) the applicable Benchmark is no longer in existence, (iii) continued implementation of the Benchmark is no longer administratively feasible or no significant market practice for the administration of the Benchmark exists, (iv) the Benchmark will not adequately and fairly reflect the cost to the Administrative Agent of administering the Notes in accordance with the terms of the Transaction Documents or any Noteholder of purchasing and funding the Notes, or (v) the administrator of the applicable Benchmark or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the Benchmark shall no longer be made available or used for determining the interest rate of loans; provided, that at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark, the Administrative Agent may give prompt written notice thereof to the Administrator and the Indenture Trustee, whereupon the rate that will replace the Benchmark for the Interest Accrual Period immediately preceding such Payment Date, and for all subsequent Interest Accrual Periods until such notice has been withdrawn by the Administrative Agent, shall be the greater of (i) an alternative benchmark rate (including any mathematical or other adjustments to such benchmark rate (if any) incorporated therein) and (ii) zero, in lieu of the then-applicable Benchmark (any such rate, a “Benchmark Replacement Rate”), together with any proposed Benchmark Administration Changes, as determined by the Administrative Agent in its reasonable discretion.
(d) Subject to the following sentence, the Administrative Agent will have the right to make Benchmark Administration Changes from time to time with respect to the Benchmark
(including any Benchmark Replacement Rate), and will promptly notify the Administrator of the effectiveness of any such changes. Any adoption of Benchmark Administration Changes and any determination of a Benchmark Replacement Rate shall be made by the Administrative Agent in a manner substantially consistent with those used for similarly situated customers and with substantially similar assets subject thereto that are under the supervision of the Administrative Agent’s investment bank New York mortgage finance business that administers the Notes. Notwithstanding anything to the contrary herein or the other Transaction Documents, any such Benchmark Administration Changes will become effective without any further action or consent of the Administrator, the Servicer or any other party to this Indenture Supplement or the other Transaction Documents.
Section 21.Increased Costs.
(a)If any Regulatory Change or other change of requirement of any law, rule, regulation or order applicable to a Noteholder of a Series 2020-VF1 Variable Funding Note (a “Requirement of Law”) or any change in the interpretation or application thereof or compliance by such Noteholder 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:
(1) shall subject such Noteholder to any Taxes (other than Taxes described in paragraph (a)(ii) through (d) of the definition of Indemnified Taxes including any such (a)(ii) Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes) (including Indemnified Taxes applicable to additional sums payable under this Section) with respect to its Series 2020-VF1 Variable Funding; 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 such Noteholder which is not otherwise included in the determination of the Note Interest Rate hereunder; or
(2) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or credit extended or participated by, or any other acquisition of funds by, any office of such Noteholder which is not otherwise included in the determination of the Note Interest Rate hereunder; or
(3) shall have the effect of reducing the rate of return on such Noteholder’s capital or on the capital of such Noteholder’s holding company, if any, as a consequence of this Indenture Supplement, in the case of the Series 2020-VF1 Variable Funding Notes, the Note Purchase Agreement, or the Series 2020-VF1 Variable Funding Notes to a level below that which such Noteholder or such Noteholder’s holding company could have achieved but for such Requirements of Law (other than any Regulatory Change, Requirement of Law, interpretation or application thereof, request or directive with respect to taxes) (taking into consideration such Noteholder’s policies
and the policies of such Noteholder’s holding company with respect to capital adequacy); or
(4) shall impose on such Noteholder or the overnight United States Treasury securities repurchase market (or any market affecting a Benchmark Replacement Rate) any other condition, cost or expense (other than with respect to taxes) affecting this Indenture Supplement, in the case of the Series 2020-VF1 Variable Funding Notes, the Note Purchase Agreement or the Series 2020-VF1 Variable Funding Notes or any participation therein; or
(5) shall impose on such Noteholder any other condition;
and the result of any of the foregoing is to increase the cost to such Noteholder, by an amount which such Noteholder deems, in good faith, to be material (collectively or individually, “Increased Costs”), of continuing to hold its Series 2020-VF1 Variable Funding Note, of maintaining its obligations with respect thereto, or to reduce any amount due or owing hereunder in respect thereof, or to reduce the amount of any sum received or receivable by such Noteholder (whether of principal, interest or any other amount) or (in the case of any change in a Requirement of Law regarding capital adequacy or liquidity requirements or in the interpretation or application thereof or compliance by such Noteholder or any Person controlling such Noteholder with any request or directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) from any Governmental Authority or quasi-governmental authority made subsequent to the date hereof) shall have the effect of reducing the rate of return on such Noteholder’s or such controlling Person’s capital as a consequence of its obligations as a Noteholder of a Variable Funding Note to a level below that which such Noteholder or such controlling Person could have achieved but for such adoption, change or compliance (taking into consideration such Noteholder’s or such controlling Person’s policies with respect to capital adequacy) by an amount deemed, in good faith, by such Noteholder to be material, then, in any such case, such Noteholder (i) agrees to use commercially reasonable efforts to provide the Administrator with notice of such change in Requirements of Law; provided that any failure to provide such notice shall not affect the Administrator’s obligation to pay such documented additional amount or amounts, and (ii) shall provide the Administrator with an invoice evidencing such documented additional amount or amounts as calculated by such Noteholder in good faith as will compensate such Noteholder for such increased cost or reduced amount, and such invoiced amount shall be payable to such Noteholder on the Payment Date following the next Determination Date following such invoice, in accordance with Section 4.5(a)(1)(ii) or Section 4.5(a)(2)(iv) of the Base Indenture, as applicable; provided, however, that any amount of Increased Costs in excess of the Increased Costs Limit shall be payable to such Noteholder in accordance with Section 4.5(a)(1)(ix) or Section 4.5(a)(2)(iv) of the Base Indenture, as applicable.
(b)Increased Costs payable under this Section 8 shall be payable on a Payment Date only to the extent invoiced to the Indenture Trustee prior to the related Determination Date.
(c)If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Increased Costs 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 (c) (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 paragraph (c), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (c) 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.
(d)Each Noteholder agrees that if any IRS form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such IRS form or certification or promptly notify the Issuer and the Indenture Trustee in writing of its legal inability to do so.
Section 22.Series Reports.
(a)Series Calculation Agent Verification Certification. The Calculation Agent shall verify that the following information, to the extent received from the Servicer, has been reasonably calculated and accurately reported by the Servicer in the applicable Determination Date Administrator Report and include as part of each Calculation Agent Verification Certification, prepared pursuant to Section 3.1 of the Base Indenture delivered by electronic means (including by electronic mail or posting on the website pursuant to Section 3.5(a) of the Base Indenture) to Noteholders, with respect to the Series 2020-VF1 Notes, a certification setting forth the Calculation Agent’s verification of the information set forth below:
(i)the Advance Ratio for each Designated Pool, and whether the Advance Ratio for such Designated Pool exceeds [***]%;
(ii)the Market Value Ratio for each Designated Pool, and whether the Market Value Ratio for such Designated Pool [***]%;
(iii)a list of each Target Amortization Event for the Series 2020-VF1 Notes and presenting a yes or no answer beside each indicating whether each such Target Amortization Event has occurred as of the end of the Monthly Advance Collection Period preceding the upcoming Payment Date or the Advance Collection Period preceding the upcoming Interim Payment Date;
(iv)whether any Receivable, or any portion of the Receivables, attributable to a Designated Pool, has a Collateral Value of zero by virtue of the definition of “Collateral Value” or Section 4 of this Indenture Supplement;
(v)a calculation of the Net Proceeds Coverage Percentage in respect of each of the three preceding Monthly Advance Collection Periods (or each that has occurred since the date of this Indenture Supplement, if less than three), and the arithmetic average of the three;
(vi)the Monthly Reimbursement Rate for the upcoming Payment Date or Interim Payment Date;
(vii)whether any Target Amortization Amount that has become due and payable has been paid;
(viii)the PSA Stressed Nonrecoverable Advance Amount for the upcoming Payment Date or Interim Payment Date;
(ix)the Trigger Advance Rate; and
(x)the Claims Loss Coverage Amount, the Claims Loss Coverage Percentage and the Non-Recoverable Rate; and
In addition, prior to each Payment Date, the Servicer shall deliver to the Calculation Agent by electronic mail to [***] with subject reference “loanDepot Agency Advance Receivables Trust -For Posting” and the Calculation Agent shall promptly (no later than the next Business Day following its receipt) deliver by electronic means (including posting on the website pursuant to Section 3.5(a) of the Base Indenture) to the Noteholders of the Series 2020-VF1 Notes the following information: calculated as of the last fiscal quarter, the amount of each of Administrator’s: (A) Unrestricted Cash; (B) unrestricted Cash Equivalents; (C) the aggregate amount of unused capacity available to Administrator (taking into account applicable haircuts) under committed mortgage loan warehouse and repurchase facilities and mortgage servicing right facilities for which Administrator has unencumbered eligible collateral to pledge thereunder; and (D) net equity value of whole pool agency securities.
In addition to the information provided above, to the extent the Servicer Information is specifically provided to the Calculation Agent by the Servicer, the Calculation Agent shall promptly (no later than [***]) deliver such Servicer Information by electronic means (including posting on the website pursuant to Section 3.5(a) of the Base Indenture) to the Noteholders of the Series 2020-VF1 Notes. “Servicer Information” shall include, without limitation, such other financial or non-financial information, documents, records or reports with respect to the Receivables or the condition or operations, financial or otherwise, of the Servicer.
(b)Series Payment Date Report. In each Payment Date Report, the Indenture Trustee shall also report the Stressed Time Percentage. The Administrator shall provide to the Indenture Trustee for inclusion in the Payment Date Report an aging report with respect to all Receivables in a form acceptable to the Administrative Agent and the Indenture Trustee.
(c)Limitation on Indenture Trustee Duties. The Indenture Trustee shall have no independent duty to verify: (1) Tangible Net Worth, (2) the occurrence of any of the events described in (ii), (iv), (v) or (vi) clause of the definition of “Target Amortization Event,” or (3) compliance with clause (vi) of the definition of “Facility Eligible Servicing Contract.”
Section 23.Conditions Precedent Satisfied.
The Issuer hereby represents and warrants to the Noteholders of the Series 2020-VF1 Notes and the Indenture Trustee that, as of the related Issuance Date, each of the conditions precedent set forth in the Base Indenture to the issuance of the Series 2020-VF1 Notes have been satisfied or have been waived in accordance with the terms thereof.
Section 24.Representations and Warranties.
(a)The Issuer, the Administrator, the Servicer and the Indenture Trustee hereby restate as of the related Issuance Date, or as of such other date as is specifically referenced in the body of such representation and warranty, all of the representations and warranties set forth in Sections 9.1, 10.1 and 11.14, respectively, of the Base Indenture.
(b)Each of the Administrator and the Issuer represents, warrants, covenants and agrees that the final rules (the “U.S. Risk Retention Rules”) implementing the credit risk retention requirements of Section 15G of the Securities Exchange Act of 1934, as amended, are inapplicable to the transactions contemplated by this Indenture Supplement, because such transactions are not a “securitization transaction” within the meaning of the U.S. Risk Retention Rules.
Section 25.Amendments.
(a)Notwithstanding any provisions to the contrary in Article XII of the Base Indenture, but subject to the provisions set forth in Sections 12.1 and 12.3 of the Base Indenture, without the consent of the Noteholders of any Notes or any other Person but with the consent of the Issuer (evidenced by its execution of such amendment), the Indenture Trustee, the Administrator, the Servicer, and the Administrative Agent, at any time and from time to time, upon delivery of an Issuer Tax Opinion and upon delivery by the Issuer to the Indenture Trustee of an Officer’s Certificate to the effect that the Issuer reasonably believes that such amendment will not have an Adverse Effect, may amend this Indenture Supplement for any of the following purposes: (i) to correct any mistake or typographical error or cure any ambiguity, or to cure, correct or supplement any defective or inconsistent provision herein or any other Transaction Document; or (ii) to amend any other provision of this Indenture Supplement.
(b)Notwithstanding any provisions to the contrary in Section 6.10 or Article XII of the Base Indenture, no supplement, amendment or indenture supplement entered into with respect to the issuance of a new Series of Notes or pursuant to the terms and provisions of Section 12.2 of the Base Indenture may, without the consent of the Series Required Noteholders, supplement, amend or revise any term or provision of this Indenture Supplement.
(c)For the avoidance of doubt, the Issuer and the Administrator hereby covenant that the Issuer shall not issue any future Series of Notes without designating an entity to act as “Administrative Agent” under the related Indenture Supplement with respect to such Series of Notes.
(d)Any amendment, modification or supplement of this Indenture Supplement which affects the rights, duties, indemnities, obligations or liabilities of the Owner Trustee in its capacity as owner trustee under the Trust Agreement shall require the written consent of the Owner Trustee.
Section 26.Counterparts.
This Indenture Supplement may be executed in counterparts, each of which when so executed and delivered shall be considered an original, and all such counterparts shall constitute one and the same instrument. The words “executed,” “signed,” “signature,” and words of like import in this Indenture Supplement or in any other certificate, agreement or document related to this transaction shall include, in addition to manually executed signature pages, images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, any electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
Section 27.Entire Agreement.
This Indenture Supplement, together with the Base Indenture incorporated herein by reference, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and fully supersedes any prior or contemporaneous agreements relating to such subject matter.
Section 28.Limited Recourse.
Notwithstanding any other terms of this Indenture Supplement, the Series 2020-VF1 Notes, any other Transaction Documents or otherwise, the obligations of the Issuer under the Series 2020-VF1 Notes, this Indenture Supplement and each other Transaction Document to which it is a party are limited recourse obligations of the Issuer, payable solely from the Trust Estate, and following realization of the Trust Estate and application of the proceeds thereof in accordance with the terms of this Indenture Supplement, none of the Noteholders of Series 2020- VF1 Notes, the Indenture Trustee or any of the other parties to the Transaction Documents shall be entitled to take any further steps to recover any sums due but still unpaid hereunder or
thereunder, all claims in respect of which shall be extinguished and shall not thereafter revive. No recourse shall be had for the payment of any amount owing in respect of the Series 2020- VF1 Notes or this Indenture Supplement or for any action or inaction of the Issuer against any officer, director, employee, shareholder, stockholder or incorporator of the Issuer or any of their successors or assigns for any amounts payable under the Series 2020-VF1 Notes or this Indenture Supplement. It is understood that the foregoing provisions of this Section 15 shall not (a) prevent recourse to the Trust Estate for the sums due or to become due under any security, instrument or agreement which is part of the Trust Estate or (b) save as specifically provided therein, constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Series 2020-VF1 Notes or secured by this Indenture Supplement. It is further understood that the foregoing provisions of this Section 15 shall not limit the right of any Person to name the Issuer as a party defendant in any proceeding or in the exercise of any other remedy under the Series 2020-VF1 Notes or this Indenture Supplement, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any such Person or entity.
Section 29.Owner Trustee Limitation of Liability.
It is expressly understood and agreed by the parties hereto that (a) this Indenture Supplement is executed and delivered by WSFS, on behalf of the Issuer not individually or personally, but solely as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the powers and authority conferred upon and vested in WSFS as owner trustee under the Trust Agreement, (b) each of the representations, warranties, undertakings, obligations and agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking, obligation, warranty or agreement by WSFS, but is made and intended for the purpose of binding only, and is binding only on, the Issuer, (c) nothing herein contained shall be construed as creating any liability on WSFS individually or personally, to perform any covenant or obligation of the Issuer, either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) WSFS has made and will make no investigation as to the accuracy or completeness of any representations or warranties made by the Issuer in this Indenture Supplement and (e) under no circumstances shall WSFS be personally liable for the payment of any indebtedness, indemnities or expenses of the Issuer or be liable for the performance, breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer or by WSFS as Owner Trustee on behalf of the Issuer under this Indenture Supplement or the other Transaction Documents, as to all of which recourse shall be had solely to the assets of the Issuer.
The parties hereto hereby acknowledge and agree that certain duties, rights and obligations of the Issuer hereunder will be exercised performed on behalf of the Issuer by the Administrator pursuant to the Administration Agreement, except to the extent the Owner Trustee is expressly obligated to perform such obligation under the Trust Agreement or expressly required under applicable law, and hereby acknowledge and accept the terms of the Trust Agreement as of the date hereof and (ii) under no circumstances shall the Owner Trustee have any duty or obligation to supervise or monitor the performance of the Issuer, or to supervise or
monitor the performance or to exercise or perform the rights, duties or obligations, of the Custodian, the Indenture Trustee, the Calculation Agent, the Paying Agent, the Securities Intermediary, the Servicer, the Administrator, the Administrative Agent or any other Person (except the Issuer as expressly set forth in the Transaction Documents) hereunder.
Section 30.Maximum Committed VFN Principal Balance.
The holders of the Series 2020-VF1 Notes may in their discretion, but have no obligation to, fund any increase in the Aggregate VFN Principal Balance of the Series 2020-VF1 Notes that would result in the Aggregate VFN Principal Balance exceeding the Maximum Committed VFN Principal Balance.
Section 31.Miscellaneous.
(a)Notwithstanding any provision of the Base Indenture or any other Transaction Document to the contrary, each beneficial owner for U.S. federal income tax purposes of a Class of Notes that has both a Committed VFN Principal Balance and an Uncommitted VFN Principal Balance shall at all times beneficially own an equal, pro rata percentage of the Committed VFN Principal Balance and the Uncommitted VFN Principal Balance and shall not transfer any interest in such Note either directly or indirectly that does not represent to each beneficial owner of such interest (or the beneficial owner a Note or equity interest secured by such interest) an equal, pro rata percentage of the Committed VFN Principal Balance and the Uncommitted VFN Principal Balance.
(b)If a Class of the Series 2020-VF1 Notes has both a Committed VFN Principal Balance and an Uncommitted VFN Principal Balance, (i) draws on such Class of Notes shall be allocated to the Committed VFN Principal Balance before allocation to the Uncommitted VFN Principal Balance (unless otherwise agreed to by the Administrator and the Administrative Agent) and (ii) payments on the principal balance of such Class of Notes shall be allocated to the Uncommitted Principal Balance before allocation to the Committed VFN Principal Balance (unless otherwise agreed to by the Administrator and the Administrative Agent).
Section 32.Incorporation by Reference.
The terms and provisions of Section 6.5(o) of the Base Indenture and all such other terms and provisions applicable to Freddie Mac contained in the Base Indenture (including, without limitation, those terms and provisions where Freddie Mac is a third party beneficiary) are incorporated herein by reference as if fully set forth herein at length.
IN WITNESS WHEREOF, loanDepot Agency Advance Receivables Trust, as Issuer, loanDepot.com, LLC, as Servicer and as Administrator, Citibank, N.A., as Indenture Trustee, Calculation Agent, Paying Agent, Custodian and Securities Intermediary, and JPMorgan Chase Bank, N.A., as Administrative Agent have caused this Indenture Supplement relating to the Series 2020-VF1 Notes, to be duly executed by their respective signatories thereunto duly authorized and their respective signatures duly attested all as of the day and year first above written.
[SIGNATURES FOLLOW]
LOANDEPOT AGENCY ADVANCE RECEIVABLES TRUST, as Issuer
By: Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as Owner Trustee
By: ______________________
Name:
Title:
[loanDepot Agency Advance Receivables Trust – Indenture Supplement]
CITIBANK, N.A., as Indenture Trustee, Calculation Agent, Paying Agent, Custodian and Securities Intermediary, and not in its individual capacity
By: ______________________
Name:
Title:
[loanDepot Agency Advance Receivables Trust – Indenture Supplement]
LOANDEPOT.COM, LLC, as Servicer and as Administrator
By: ______________________
Name:
Title:
[loanDepot Agency Advance Receivables Trust – Indenture Supplement]
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By: ______________________
Name:
Title:
[loanDepot Agency Advance Receivables Trust – Indenture Supplement]
SCHEDULE 1
Series Reserve Account with respect to the Series 2020-VF1 Notes
[***]
Execution - Exhibit 10.6
Certain confidential information contained in this document, marked by “[***]”, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
AMENDMENT NO. 3
TO AMENDED AND RESTATED MORTGAGE LOAN PARTICIPATION SALE AGREEMENT
This Amendment No. 3 to the Amended and Restated Mortgage Loan Participation Sale Agreement, dated as of September 27, 2024 (this “Amendment”), is between JPMorgan Chase Bank, National Association (the “Purchaser”) and loanDepot.com, LLC (the “Seller”).
RECITALS
The parties hereto are parties to that certain Amended and Restated Mortgage Loan Participation Sale Agreement, dated as of November 10, 2022 (as amended, restated, supplemented, or otherwise modified prior to the date hereof, the “Existing Participation Agreement”; and as amended by this Amendment, the “Participation Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Participation Agreement.
The parties hereto have agreed, subject to the terms and conditions of this Amendment, that the Existing Participation Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Participation Agreement.
Accordingly, the parties hereto hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Participation Agreement is hereby amended as follows:
(a)Amendment to the Existing Participation Agreement. Effective as of the date hereof, the Existing Participation 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 (x) the changed pages of the amended text of the Participation Agreement attached as Exhibit A-1 hereto and (y) the full amended text of the Participation Agreement attached as Exhibit A-2 hereto. The parties hereto further acknowledge and agree that Exhibit A-2 constitutes the Participation Agreement.
(b)Conditions Precedent to Amendment. This Amendment shall be effective as of the date hereof, subject to the execution and delivery of this Amendment by all parties hereto.
(c)Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Participation Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
(d)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. Counterparts may be
delivered electronically. Facsimile, documents executed, scanned, and transmitted electronically and electronic signatures shall be deemed original signatures for purposes of this Amendment and all matters related thereto, with such facsimile, scanned, and electronic signatures having the same legal effect as original signatures. 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, Title 15, United States Code, Sections 7001 et seq., the Uniform Electronic Transaction Act 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.
(e)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.
(f)Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN).
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties have caused their name to be duly signed to this Amendment by their respective officers thereunto duly authorized, all as of the date first above written.
PURCHASER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
By: /s/s Jason Brand
Name: Jason Brand
Title: Executive Director
Signature Page to Amendment No. 3 to Amended and Restated Mortgage Loan Participation Sale Agreement
SELLER:
LOANDEPOT.COM, LLC
By: /s/ David Hayes
Name: David Hayes
Title: CFO
AUTHORIZED REPRESENTATIVES
[***]
Exhibit A-1
PARTICIPATION AGREEMENT
(Redline)
[***]
Exhibit A-2
PARTICIPATION AGREEMENT
(Clean)
(See attached)
| | |
| CONFORMED THROUGH AMENDMENT NO. 3 |
AMENDED AND RESTATED
MORTGAGE LOAN PARTICIPATION SALE AGREEMENT
between
LOANDEPOT.COM, LLC,
as Seller,
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Purchaser
November 10, 2022
TABLE OF CONTENTS
Page
EXHIBITS
SCHEDULE 1 AUTHORIZATIONS
EXHIBIT A FORM OF TAKEOUT ASSIGNMENT
EXHIBIT B MORTGAGE LOAN SCHEDULE DATA FIELDS
EXHIBIT C SELLER’S WIRE TRANSFER INSTRUCTIONS
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
AMENDED AND RESTATED
MORTGAGE LOAN PARTICIPATION SALE AGREEMENT
This is an AMENDED AND RESTATED MORTGAGE LOAN PARTICIPATION SALE AGREEMENT (“Agreement”), dated as of November 10, 2022, between JPMorgan Chase Bank, National Association (“Purchaser”) and loanDepot.com, LLC (“Seller”).
R E C I T A L S
WHEREAS, Seller desires to continue to sell from time to time to Purchaser all of Seller’s right, title and interest in and to designated pools of fully amortizing first lien residential Mortgage Loans (defined below) (each such pool of Mortgage Loans so purchased and sold, a “Mortgage Pool”), each in the form of a 100% participation interest evidenced by a Participation Certificate, and Purchaser, at its sole election has agreed to purchase such Participation Certificates evidencing such participation interests from Seller in accordance with the terms and conditions set forth in this Agreement and the Custodial Agreement.
WHEREAS, Seller acknowledges that it will cause each Mortgage Pool purchased hereunder as evidenced by a Participation Certificate to be converted into an Agency Security relating to such Mortgage Pool, such Agency Security to be backed by and to relate to the Mortgage Loans subject to the Mortgage Pools. In furtherance thereof, Seller agrees to cause the related Agency Security to be issued and delivered on or before the Settlement Date under the terms and conditions provided herein.
WHEREAS, coincident with each Mortgage Pool purchase, Seller will have validly assigned to Purchaser all of Seller’s rights and obligations under one or more forward purchase commitments each evidencing an institution’s commitment to purchase on a mandatory basis on a designated purchase date an agreed upon principal amount of the related Agency Security.
WHEREAS, the parties hereto previously entered into that certain Mortgage Loan Participation Sale Agreement, dated as of August 15, 2016 (as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the “Existing Agreement”).
WHEREAS, the parties hereto have requested that the Existing Agreement be amended and restated in its entirety to amend certain provisions set forth herein on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, Purchaser and Seller, intending to be legally bound, hereby agree as follows:
Section 1.Definitions.
Capitalized terms used in this Agreement and not defined herein shall have the meanings ascribed to them in the Pricing Side Letter. Capitalized terms used in this Agreement shall have the meanings ascribed to them below.
“Accepted Servicing Practices”: With respect to each Mortgage Loan, such standards which comply with the applicable standards and requirements under: (i) an applicable Agency Program and related provisions of the applicable Agency Guide pursuant to which the related Agency Security is intended to be issued, and/or (ii) any applicable FHA and/or VA program and related provisions of applicable FHA and/or VA servicing guidelines.
“Additional Collateral”: Shall have the meaning ascribed thereto in Section 7(d) of this Agreement.
“Agency”: The Government National Mortgage Association (“GNMA”), the Federal National Mortgage Association (“Fannie Mae”), and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), as applicable.
“Agency Approvals”: Shall have the meaning ascribed thereto in Section 9(a)(xxiv) of this Agreement.
“Agency Eligible Mortgage Loan”: A mortgage loan that is in strict compliance with the eligibility requirements for swap or purchase by the designated Agency, under the applicable Agency Guide and/or applicable Agency Program.
“Agency Guaranty Fee”: Such fee, payable monthly by Seller to the Agency, as set by the Agency and as in effect at the time a Transaction is commenced, the amount of which with respect to each Mortgage Loan shall be specified as a percentage of par by notice from Seller to Purchaser and on the Mortgage Loan Schedule.
“Agency Guide”: Respecting GNMA Securities, the GNMA Mortgage-Backed Securities Guide; respecting Fannie Mae Securities, the Fannie Mae Selling Guide and the Fannie Mae Servicing Guide; and respecting Freddie Mac Securities, the Freddie Mac Sellers’ and Servicers’ Guide; in each case as such Agency Guide may be amended from time to time.
“Agency Program”: The specific mortgage-backed securities swap or purchase program under the relevant Agency Guide or as otherwise approved by the Agency pursuant to which the Agency Security for a given Transaction is to be issued.
“Agency Security”: A fully modified pass-through mortgage-backed certificate guaranteed by GNMA, a guaranteed mortgage pass-through certificate issued by Fannie Mae, or a mortgage participation certificate issued by Freddie Mac, in each case representing or backed by the Mortgage Pool which is the subject of a Transaction. The particular Agency Security for the relevant Agency is alternatively referred to as: “GNMA Securities” (in the case of GNMA), “Fannie Mae Securities” (in the case of Fannie Mae) and “Freddie Mac Securities” (in the case of Freddie Mac).
“Agency Security Face Amount”: The original unpaid principal balance of the Agency Security.
“Agency Security Issuance Deadline”: The date by which the Agency Security must be issued and delivered to Purchaser, which, unless otherwise agreed to by Purchaser as provided herein, shall occur no later than the Settlement Date.
“Agency Security Issuance Failure”: Failure of the Agency Security to be issued for any reason whatsoever on or before the Agency Security Issuance Deadline, or a prior good faith determination by Seller or Purchaser that such Agency Security will not be issued on or before such time.
“Anti-Corruption Laws”: All laws, rules and regulations of any jurisdiction applicable to Seller or its Affiliates from time to time concerning or relating to bribery or corruption.
“Anti-Money Laundering Laws”: Federal, state and local anti-money laundering laws, orders and regulations, including the USA Patriot Act of 2001, the Bank Secrecy Act, OFAC regulations and applicable Executive Orders.
“Available Warehouse Facilities”: As the context requires, (i) the aggregate amount at any time of used and unused available warehouse lines of credit, purchase facilities, repurchase facilities, early purchase program facilities and off-balance sheet funding facilities (whether committed or uncommitted) to finance residential mortgage loans available to Seller at such time or (ii) such warehouse lines of credit, purchase facilities, repurchase facilities, early purchase program facilities and off-balance sheet funding facilities themselves.
“Basic Collateral”: Shall have the meaning ascribed thereto in Section 7(c) of this Agreement.
“Blanket Bond Required Endorsement”: Endorsement of Seller’s mortgage banker’s blanket bond insurance policy to (i) provide that for any loss affecting Purchaser’s interest, Purchaser will be named on the loss payable draft as its interest may appear and (ii) provide Purchaser access to coverage under the theft of secondary market institution’s money or collateral clause of policy.
“Breach”: Shall have the meaning ascribed thereto in Section 9(c) of this Agreement.
“Business Day”: A day (other than a Saturday, Sunday or any other day on which the jurisdiction in which the Custodian’s custodial offices are located are authorized or obligated by law to be closed) when (i) banks in Houston, Texas, Orange County, California and New York, New York are generally open for commercial banking business and (ii) federal funds wire transfers can be made.
“Code”: The Internal Revenue Code of 1986, as amended from time to time.
“Collateral”: Shall have the meaning ascribed thereto in Section 7(d) hereof.
“Custodial Account”: An account established pursuant to Section 5(c) hereof.
“Custodial Agreement”: The Amended and Restated Custodial Agreement, dated as of November 10, 2022, among Seller, Purchaser and the Custodian, in form and substance acceptable to the parties.
“Custodian”: Deutsche Bank National Trust Company and its successors shall be the Custodian under the Custodial Agreement.
“Cut-off Date”: The first calendar day of the month in which the Settlement Date is to occur.
“Cut-off Date Principal Balance”: The Outstanding Principal Balance of the Mortgage Loans (that are subject to Transactions hereunder) 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.
“Deficient Mortgage Loans”: Shall have the meaning ascribed thereto in Section 9(c) of this Agreement.
“Designated Servicer”: Shall have the meaning ascribed thereto in Section 5(f) of this Agreement.
“Discount Rate”: With respect to each Transaction, the percentage set forth in the Pricing Side Letter and on the applicable funding report delivered on the related Purchase Date.
“Electronic Tracking Agreement”: The Amended and Restated Electronic Tracking Agreement, dated as of November 10, 2022, among Seller, Purchaser, MERS and MERSCORP Holdings, Inc., in form and substance acceptable to the parties.
“ERISA”: With respect to any Person, the Employee Retirement Income Security Act of 1974, as amended from time to time.
“Escrow Agreement”: That certain Fourth Amended and Restated Escrow Agreement, dated as of August 16, 2016, by and among Purchaser, Seller, Deutsche Bank National Trust Company, as escrow agent, and other parties thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified, from time to time.
“Escrow Payments”: With respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rents, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the related mortgagor with the mortgagee pursuant to the Mortgage or any other related document.
“Event of Insolvency”: With respect to any Person (a) the commencement by that Person as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law, or a request by that Person for the appointment of a receiver, trustee, custodian or similar official for that Person or any substantial part of its property; (b) the commencement of any such case or proceeding against that Person, or another’s seeking such appointment, or the filing against that Person of an application for a protective decree that (i) is consented to or not timely contested by that Person, (ii) results in the entry of an order for relief, such an appointment, the issuance of such a protective decree or the entry of an order having similar effect, or (iii) is not dismissed within [***]; (c) the making by that Person of a general assignment for the benefit of creditors; (d) the admission in writing by that Person that it is unable to pay its debts as they become due, or the nonpayment of its debts generally as they become due; or (e) the board of directors, managers, members or partners, as the case may be, of that Person taking any action in furtherance of any of the foregoing.
“Exchange Act”: The Securities Exchange Act of 1934, as amended.
“Expenses”: All present and future reasonable out-of-pocket expenses incurred by or on behalf of the Purchaser in connection with this Agreement or any of the other Program Documents and any amendment, supplement or other modification or waiver related hereto or thereto, whether incurred heretofore or hereafter, including without limitation, reasonable attorneys’ fees.
“Fannie Mae Securities”: Shall have the meaning ascribed thereto in the definition of “Agency Security” herein.
“FDIC”: The Federal Deposit Insurance Corporation or its permitted successors or assigns.
“FHA”: The Federal Housing Administration.
“FHA Approved Mortgagee”: An institution that is approved by the FHA to act as a mortgagee and servicer of record, pursuant to FHA Regulations.
“FHA Insurance Contract”: The contractual obligation of FHA respecting the insurance of an FHA Loan pursuant to the National Housing Act, as amended.
“FHA Loan”: A Mortgage Loan that is the subject of an FHA Insurance Contract as evidenced by a Mortgage Insurance Certificate.
“FHA Regulations”: 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, and all amendments and additions thereto.
“Freddie Mac Securities”: Shall have the meaning ascribed thereto in the definition of “Agency Security” herein.
“GAAP”: Generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in statements and pronouncements of such other entity as may be approved by a significant segment of the accounting profession.
“GLB Act”: The Gramm-Leach-Bliley Act of 1999 (Public Law 106-102, 113 Stat 1338), as it may be amended from time to time.
“GNMA Securities”: Shall have the meaning ascribed thereto in the definition of “Agency Security” herein.
“Good Delivery”: Shall have the meaning ascribed thereto in the SIFMA Guide in connection with the standard requirements for the delivery and settlement of an Agency Security.
“Governmental Authority”: The government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, any governmental or quasi-governmental department, commission, board, bureau or instrumentality, and any court, tribunal or arbitration panel, and, with respect to any Person, any private body having regulatory jurisdiction over any Person or its business or assets.
“HUD”: The United States Department of Housing and Urban Development or any successor thereto.
“Individual Takeout Amount”: The principal amount of an Agency Security covered by a particular Takeout Commitment plus accrued interest on such amount, determined in accordance with Good Delivery requirements.
“Initial Balance”: The aggregate Outstanding Principal Balance of the Mortgage Loans evidenced by a Participation Certificate as of the related Purchase Date.
“Initial Remittance Date”: Shall have the meaning ascribed thereto in Section 4(c) of this Agreement.
“Interim Servicing Period”: Shall have the meaning ascribed thereto in Section 2(b)(iv) of this Agreement.
“Intercreditor Agreement”: That certain Fourth Amended and Restated Intercreditor Agreement, dated as of August 16, 2016, by and among Purchaser, Seller, and other parties thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified, from time to time.
“Joint Securities Account Control Agreement”: That certain Fourth Amended and Restated Joint Securities Account Control Agreement, dated as of August 16, 2016, by and
among Purchaser, Seller, Deutsche Bank National Trust Company, as paying agent, and other parties thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified, from time to time.
“LD Holdings”: LD Holdings Group LLC, a Delaware limited liability company.
“Lien”: Any security interest, mortgage, deed of trust, charge, pledge, hypothecation, assignment as security for an obligation, deposit arrangement as security for an obligation, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention arrangement, any financing lease arrangement having substantially the same economic effect as any of the foregoing and the security interest evidenced or given notice of by the filing of any financing statement under the UCC (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction.
“Losses”: Shall have the meaning ascribed thereto in Section 5(a) of this Agreement.
“Master Repurchase Agreement”: That certain First Amended and Restated Master Repurchase Agreement, dated as of September 30, 2022, by and between Seller, as seller, and Purchaser, as buyer, as the same may be amended, restated, modified or otherwise supplemented, from time to time.
“Material Adverse Effect”: Any (i) material adverse effect upon the validity, performance or enforceability of any Program Document, (ii) material adverse effect on the properties, business or condition, financial or otherwise, of Seller and its Subsidiaries, on a consolidated basis, (iii) material adverse effect upon the ability of Seller to fulfill its obligations under this Agreement, or (iv) material adverse effect on the value or salability of the Mortgage Loans that are subject to Transactions hereunder, the Participation Certificates or the Agency Securities subject to this Agreement, taken as a whole, as determined in each case by Purchaser in Purchaser’s sole good faith discretion.
“MERS”: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS System”: The system of recording transfers of mortgages electronically maintained by MERS.
“Mortgage”: A first lien mortgage or deed of trust securing a Mortgage Note.
“Mortgage File”: The items pertaining to each Mortgage Loan (other than the Mortgage Loan Documents required to be delivered to the Custodian pursuant to the Custodial Agreement) and Agency Program as described in the relevant Agency Guide.
“Mortgage Insurance Certificate”: An original HUD Form 59100 signed by HUD which identifies the Mortgage Loan it accompanies.
“Mortgage Interest Rate”: The annual rate of interest borne by the Mortgage Note.
“Mortgage Loan”: Each mortgage loan included in a Mortgage Pool, in each case secured by a Mortgage on a one- to four-family residence and (if so required by the relevant Agency Program) eligible to be either guaranteed by VA and/or insured by FHA, or insured by a private mortgage insurer, as applicable.
“Mortgage Loan Documents”: The originals of the Mortgage Notes and other documents and instruments required to be delivered to the Custodian in connection with each Transaction, all pursuant to the Custodial Agreement.
“Mortgage Loan Remittance Report”: Shall have the meaning ascribed thereto in Section 5(a) of this Agreement.
“Mortgage Loan Schedule”: Shall have the meaning ascribed thereto in the Custodial Agreement.
“Mortgage Note”: A promissory note or other evidence of indebtedness of the obligor thereunder, representing a Mortgage Loan, and secured by the related Mortgage.
“Mortgage Pool”: Shall have the meaning ascribed thereto in the introductory recitals to this Agreement.
“Mortgage Pool Ownership Interest”: Shall have the meaning ascribed thereto in Section 2(b)(i) of this Agreement.
“Mortgaged Property”: The real property securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor”: The obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder
“Net Mortgage Interest Rate”: With respect to any Mortgage Loan, the Mortgage Interest Rate applicable to such Mortgage Loan less the Servicing Fee.
“Obligations”: All of the obligations of the Seller to the Purchaser under the Program Documents.
“OFAC”: The Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Outstanding Principal Balance”: At any time, the then unpaid outstanding principal balance of a residential mortgage loan.
“Outstanding Transaction”: Shall have the meaning ascribed thereto in Section 11 of this Agreement.
“Participation Certificate”: A certificate issued in the name of Purchaser and delivered to Custodian by Seller in connection with each Transaction, substantially in the form attached as an exhibit to the Custodial Agreement, such certificate to evidence the entire (100%) beneficial ownership interest in the related Mortgage Pool.
“Participation Certificate Pass-Through Rate”: With respect to each Participation Certificate, the per annum rate at which interest is passed through to Purchaser which initially shall be the rate of interest specified on such Participation Certificate as the Pass-Through Rate, subject to adjustment as contemplated hereby. The Participation Certificate Pass-Through Rate is based upon the weighted average of the Net Mortgage Interest Rates on the Mortgage Loans.
“Permitted Tax Distributions”: Any distributions by the Seller for the purpose of enabling LD Holdings to make Tax Distributions, as defined and set forth in the limited liability company agreement of LD Holdings.
“Person”: Any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof).
“Plan”: Shall have the meaning ascribed thereto in Section 9(a)(xxiii) of this Agreement.
“Pooling Documents”: Each of the original schedules, forms and other documents (other than the Mortgage Loan Documents) required to be delivered by or on behalf of Seller to the relevant Agency and/or the Purchaser and/or the Custodian, as further described in the Custodial Agreement.
“Potential Servicing Termination Event”: A Servicing Termination Event or an event that with notice or lapse of time or both would become a Servicing Termination Event.
“Present Value Adjustment”: The product of (a) the Discount Rate, (b) the Initial Balance, (c) the Takeout Price and (d) a fraction, the numerator of which is the actual number of days elapsed from (and including) the Purchase Date to (but excluding) the Cut-off Date and the denominator of which is 360.
“Pricing Side Letter”: That certain amended and restated pricing side letter and fee letter between Purchaser and Seller, dated as of November 10, 2022, as amended from time to time.
“Privacy Requirements”: (a) Title V of the GLB Act, (b) any applicable federal regulations implementing such act codified at 12 CFR Parts 40, 216, 332 and 573, (c) any of the Interagency Guidelines Establishing Standards For Safeguarding Customer Information codified at 12 CFR Parts 30, 168, 170, 208, 211, 225, 263, 308 and 364 that are applicable and (d) any
other applicable federal, state and local laws, rules, regulations and orders relating to the privacy and security of Seller’s Customer Information, as such statutes and such regulations, guidelines, laws, rules and orders (the “Safeguards Rules”) may be amended from time to time.
“Program Documents”: This Agreement, the Pricing Side Letter, the Custodial Agreement, the Electronic Tracking Agreement, each Participation Certificate, each Takeout Commitment, the Intercreditor Agreement, the Escrow Agreement, the Joint Securities Account Control Agreement and all other documents related thereto.
“Property”: Any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Purchase Date”: As to a given Transaction, the date of Seller’s sale and Purchaser’s purchase of the designated Mortgage Pool, as evidenced by Purchaser’s payment to Seller of the Purchase Price.
“Purchase Price”: With respect to any Participation Certificate, an amount equal to the sum of:
(A)the product of the Initial Balance and the Takeout Price;
(B)the product of (i) the product of (1) the Participation Certificate Pass-Through Rate and (2) the Initial Balance; and (ii) a fraction, the numerator of which is the actual number of days elapsed from (and including) the Cut-off Date to (but excluding) the Settlement Date and the denominator of which is 360; and
(C)minus the Present Value Adjustment.
“Qualified Depository”: A depository institution, the accounts of which are insured by the FDIC, which meets the applicable requirements of the relevant Agency for maintaining custodial collection accounts and escrow accounts in connection with servicing residential mortgage loans underlying an Agency Security.
“REO Property”: Real property acquired by Seller through foreclosure or deed in lieu of foreclosure.
“Repurchase Price”: With respect to any Mortgage Loan, a price equal to (i) the product of the Initial Balance and the Takeout Price (expressed as a percentage) plus (ii) interest on such Initial Balance at the Mortgage Interest Rate from the date on which interest has been paid and distributed to the Purchaser to the date of repurchase, less amounts received, if any, plus amounts advanced, if any, by the Seller as servicer, in respect of such Mortgage Loan.
“Remittance Date”: The twenty fifth (25th) day of each month (or if such day is not a Business Day, the Business Day immediately following such twenty fifth (25th) day).
“Requirement of Law”: Any law, treaty, ordinance, decree, requirement, order, judgment, rule, regulation or licensing requirement (or interpretation of any of the foregoing) of
any Governmental Authority having jurisdiction over Purchaser, Seller or any Takeout Buyer, any of their respective Subsidiaries or their respective properties or any agreement by which any of them is bound, as the same may be supplemented, amended, recodified or replaced from time to time, including:
• Equal Credit Opportunity Act and Regulation B promulgated thereunder;
• Fair Housing Act;
• Gramm-Leach-Bliley Act and Regulation P promulgated thereunder;
• Fair Credit Reporting Act and Regulation V promulgated thereunder;
• Home Mortgage Disclosure Act and Regulation C promulgated thereunder;
• Federal Unfair, Deceptive, or Abusive Acts or Practices laws (including Section 5 of the Federal Trade Commission Act (the “FTC Act”));
• Truth In Lending Act and Regulation Z promulgated thereunder;
• Qualified Mortgage/Ability to Repay Rule;
• Real Estate Settlement Procedures Act and Regulation X promulgated thereunder;
• Home Ownership and Equity Protection Act and applicable portions of Regulation Z promulgated thereunder;
• Electronic Fund Transfer Act and Regulation E promulgated thereunder;
• National Flood Insurance Act, Flood Disaster Protection Act of 1973, National Flood Insurance Reform Act of 1994, Biggert-Waters Flood Insurance Act of 2012, Homeowner Flood Insurance Affordability Act (the “Flood Laws”);
• Servicemembers Civil Relief Act;
• rules, regulations and guidelines promulgated under any of such statutes; and
• any applicable state or local equivalent or similar laws and regulations.
“Responsible Officer”: As to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer, chief accounting officer or controller 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” means any officer authorized to act
on such officer’s behalf as demonstrated by a certificate of corporate resolution or similar document and an incumbency certificate.
“Sanctioned Country”: At any time, a country, region or territory that is then the subject or target of any Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine and the so-called Peoples’ Republics of Donetsk and Luhansk in the territory of Ukraine).
“Sanctioned Person”: At any time, (a) any Person listed on the Specially Designated Nationals and Blocked Persons List or any other Sanctions-related list of designated Persons maintained by OFAC or the U.S. Department of State, (b) any Person operating, organized or resident in a Sanctioned Country or (c) another Person owned 50% or more, directly or indirectly, in the aggregate or controlled by one or more such Persons.
“Sanctions”: Economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by OFAC or the U.S. Department of State.
“SEC”: The Securities and Exchange Commission.
“Scheduled Delivery Date”: The date of delivery of any Agency Security to be delivered by an Agency to Purchaser in connection with a Transaction.
“Seller’s Customer”: Any natural person who has applied to Seller for a financial product or service, has obtained any financial product or service from Seller or has a residential mortgage loan that is serviced or subserviced by Seller.
“Seller’s Customer Information”: Any information or records in any form (written, electronic or otherwise) containing a Seller’s Customer’s personal information or identity, including such Seller’s Customer’s name, address, telephone number, loan number, loan payment history, delinquency status, insurance carrier or payment information, tax amount or payment information and the fact that such Seller’s Customer has a relationship with Seller.
“Serviced Loans”: All residential mortgage loans serviced or required to be serviced by the Seller under any Servicing Agreement, irrespective of whether the actual servicing is done by another Person (a subservicer) retained by the Seller for that purpose.
“Servicing Agreement”: With respect to any Person, the arrangement (whether or not in writing) pursuant to which that Person acts as servicer of residential mortgage loans, whether owned by that Person or by others.
“Servicing Fee”: With respect to any Mortgage Loan and any month, the monthly fee payable to the Seller for the servicing of such Mortgage Loan, such fee being calculated on a Mortgage Loan-by-Mortgage Loan basis and equal to the Outstanding Principal Balance of such Mortgage Loan on which interest accrued in the related month multiplied by a percentage which
is set forth on the Mortgage Loan Schedule plus the Agency Guaranty Fee which is also set forth on the Mortgage Loan Schedule.
“Servicing File”: With respect to each Mortgage Loan, the file to be held by or for Seller in trust for the benefit of Purchaser, solely in a custodial capacity. Such file includes, but is not limited to, originals or copies of all documents in the Mortgage File, computer files, data disks, books, records, payment histories, data tapes, notes and all additional documents generated as a result of or utilized in originating and servicing each Mortgage Loan.
“Servicing Portfolio”: The Seller’s entire portfolio of Serviced Loans.
“Servicing Rights”: All rights and interests of Seller or any other Person, whether contractual, possessory or otherwise, to service, administer and collect income with respect to residential mortgage loans, and all rights incidental thereto.
“Servicing Termination Events”: Shall have the meaning ascribed thereto in Section 5(e) of this Agreement.
“Servicing Transfer Date”: Shall have the meaning ascribed thereto in Section 6 of this Agreement.
“Settlement Date”: With respect to each Transaction, that date specified as the contractual delivery and settlement date in the related Takeout Commitment(s) pursuant to which Purchaser has the right to deliver Agency Securities to the Takeout Buyer(s).
“SIFMA Guide”: The uniform practices for the clearance and settlement of mortgage backed securities and other related securities, published (and periodically updated as supplemented) by The Securities Industry and Financial Markets Association (“SIFMA”).
“Standard Agency Mortgage Loan Representations”: Shall have the meaning ascribed thereto in Section 9(b)(iii) of this Agreement.
“Subservicer”: Any entity which is subservicing the Mortgage Loans pursuant to a subservicing agreement with Seller. Each Subservicer and the related subservicing agreement shall be approved in advance by Purchaser.
“Subsidiary”: With respect to any Person, any corporation, association or other business entity in which more than fifty percent (50%) of the total voting power or shares of stock (or equivalent equity interest) entitled to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof.
“Takeout Amount”: The aggregate of the Individual Takeout Amounts respecting the Agency Security to be issued in connection with a given Transaction, which Takeout Amount shall be required to equal the unpaid principal balance of the Agency Security plus accrued interest.
“Takeout Buyer”: (i) Any member of the MBS Securities Clearing Corporation or any Person who clears through a MBS Securities Clearing Corporation member with a comparison and netting agent agreement in place with such MBS Securities Clearing Corporation member, which has been previously approved, and not subsequently disapproved, by Purchaser, or (ii) any Agency.
“Takeout Commitment”: A trade confirmation from the Takeout Buyer to Seller in electronic format confirming the details of a forward trade between the Takeout Buyer (as buyer) and Seller (as seller) constituting a valid, binding and enforceable mandatory delivery commitment by a Takeout Buyer to purchase on the Settlement Date and at a given Takeout Price the principal amount of the Agency Security described therein.
“Takeout Commitment Assignment”: An assignment executed by Seller, whereby Seller irrevocably assigns its rights but not its obligations under the Takeout Commitment, and which assignment shall be substantially in the form and content of Exhibit A hereto.
“Takeout Price”: As to each Takeout Commitment the purchase price (expressed as a percentage of par) set forth therein.
“Transaction”: (i) Each agreement by Purchaser to purchase, and by Seller to sell, a Mortgage Pool as evidenced by a Participation Certificate under the terms and conditions of this Agreement; (ii) Seller’s performance of its obligations both hereunder respecting such Mortgage Pool and under the Custodial Agreement; (iii) the issuance and delivery of the related Agency Security together with Seller’s undertakings respecting the facilitation of such Agency Security issuance; (iv) the delivery of the related Agency Security to the Takeout Buyer under each Takeout Commitment; (v) Purchaser’s exercise of its rights and remedies hereunder and in the Custodial Agreement in the event of an Agency Security Issuance Failure or Servicing Termination Event; and (vi) as appropriate, Seller’s interim servicing of such Mortgage Pool as described herein.
“Transfer”: Shall have the meaning ascribed thereto in Section 10(a)(xviii) of this Agreement.
“VA”: The Department of Veterans Affairs.
“VA Approved Lender”: Those lenders that are approved by the VA to act as a lender in connection with the origination of any VA Loan subject to a VA Loan Guaranty Agreement.
“VA Loan”: A Mortgage Loan that is or will be the subject of a VA Loan Guaranty Agreement.
“VA Loan Guaranty Agreement”: The obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) pursuant to the Serviceman’s Readjustment Act, as amended.
“Wire Instructions”: The wiring instructions as provided by the Seller to the Purchaser and attached hereto as Exhibit C.
Section 2.Purchases of Participation Certificates.
(a)Purchaser may in its sole discretion from time to time, purchase one or more Participation Certificates on a servicing released basis from Seller at the Purchase Price. Prior to Purchaser’s purchase of any Participation Certificate, the Conditions Precedent set forth in Section 8 shall be satisfied or waived.
(b)Simultaneously with the payment by Purchaser of the Purchase Price, in accordance with the warehouse lender’s wire instructions or Seller’s Wire Instructions, as applicable, with respect to a Participation Certificate, Seller hereby agrees to:
(i)irrevocably and absolutely sell, transfer, assign, set over and convey to Purchaser, without recourse but subject to the terms of this Agreement, all right, title and interest of Seller in and to (A) the Participation Certificate and a 100% undivided beneficial ownership interest in the Mortgage Loans subject to such Participation Certificate, (B) all Servicing Rights related to the Mortgage Loans that are subject to such Participation Certificate, (C) any payments or proceeds under any related primary insurance, hazard insurance and FHA insurance policies and VA guarantees (if any) or otherwise and (D) the Mortgage Loan Documents, Mortgage Files and Servicing Files related to the Mortgage Loans that are subject to such Participation Certificate (collectively, the “Mortgage Pool Ownership Interest”);
(ii)irrevocably and absolutely assign and set over to Purchaser all of Seller’s rights (but not its obligations) in and to each Takeout Commitment related to the Mortgage Loans that are subject to such Participation Certificate and does hereby deliver to Purchaser the related Takeout Commitment Assignment duly executed by Seller;
(iii)sell, transfer, set over and convey to Purchaser all of Seller’s right, title and interest in and to the Agency Security scheduled to be issued by the applicable Agency with respect to the Mortgage Loans that are subject to such Participation Certificate; and
(iv)accept its appointment and discharge its performance obligations as servicer of all of the Mortgage Loans subject to the applicable Participation Certificate for the benefit of Purchaser (and any other registered holder of the Participation Certificate) for the period (the “Interim Servicing Period”) from and after the Purchase Date through the earliest to occur of (A) the date of actual issuance, delivery and settlement of the Agency Security to Purchaser, provided such issuance and delivery occurs on or before the Agency Security Issuance Deadline, unless otherwise mutually agreed to by the parties and (B) in the case of an Agency Security Issuance Failure, either (x) any date so designated by Purchaser, but in all events a date occurring no later than the last calendar day of the second month following the month in which the Settlement Date for the related Agency Security was originally scheduled to occur; or (y) the date of
Seller’s purchase of the entire Mortgage Pool related to such Participation Certificate based on, and as a result of, Seller’s breach of any of its representations and warranties hereunder including without limitation any of the mortgage loan representations herein.
(c)From time to time Seller may make a request of Purchaser by telephone, electronically or otherwise to enter into a Transaction. Purchaser shall be under no obligation to enter into the Transaction unless and until (i) it elects to do so, which election shall be evidenced solely by its transfer of appropriate funds to Seller and (ii) the conditions specified herein have been satisfied.
(d)If Purchaser elects to purchase any Participation Certificate, Purchaser shall pay an amount equal to the Purchase Price for such Participation Certificate by wire transfer of immediately available funds in accordance with the warehouse lender’s wire instructions or if there is no warehouse lender, Seller’s Wire Instructions. In the event that Purchaser rejects a Participation Certificate for purchase for any reason and/or does not transmit the Purchase Price, (i) any Participation Certificate delivered to Custodian in anticipation of such purchase shall automatically be null and void and shall be returned by Custodian to Seller and (ii) if Purchaser shall nevertheless receive any portion of the related Takeout Price, Purchaser shall pay such Takeout Price to Seller in accordance with Seller’s Wire Instructions on the date of receipt thereof by Purchaser if Purchaser receives such portion of the Takeout Price [***].
(e)In the event that the Agency Security in connection with a Transaction is not issued on or before the Agency Security Issuance Deadline for such Transaction, Purchaser and Seller may, in the sole discretion of each such party, agree to extend the original Agency Security Issuance Deadline for such Transaction, which agreement shall be evidenced in writing.
(f)To the extent, but only to the extent, the Agency Security for a Transaction is not issued on or before the Agency Security Issuance Deadline for such Transaction or an Agency Security Issuance Failure is otherwise determined to have occurred with respect to such Transaction, then all payments and recoveries of principal and interest respecting any Mortgage Loan that are subject to such Transaction due on or after the Cut-off Date shall belong to Purchaser.
(g)The terms and conditions of the purchase of each Participation Certificate shall be as set forth in this Agreement and in each Participation Certificate. Each Participation Certificate shall be deemed to incorporate, and Seller shall be deemed to make as of the applicable dates specified herein, for the benefit of Purchaser, the representations and warranties set forth herein in respect of such Participation Certificate and the Mortgage Loans evidenced by such Participation Certificate.
Section 3.Takeout Commitments.
(a)Seller, coincident with the commencement of each Transaction, hereby and thereby assigns and sets over to Purchaser, without recourse, free and clear of any lien, claim, participation or encumbrance of any kind, all of Seller’s rights (but not its obligations) under each Takeout Commitment related to such Transaction, including without limitation its
right and entitlement to receive the entire Takeout Price specified in each Takeout Commitment related to such Transaction from a Takeout Buyer. Purchaser agrees that it will deliver to each Takeout Buyer such Agency Security that is sufficient to satisfy all Takeout Commitments related to such Transaction, provided that (i) the Agency Security shall have been issued and delivered to Purchaser in the Agency Security Face Amount, and at least equal to the Cut-off Date Principal Balance for such Transaction, on or before the Settlement Date for such Transaction so as to allow Purchaser to effect Good Delivery of the Agency Security to the Takeout Buyer; and (ii) such Takeout Buyer executes the Takeout Commitment Assignment to Purchaser.
(b)In the event the Takeout Buyer, in connection with any Transaction, fails to perform its obligations under the related Takeout Commitment as determined under the express terms set forth in such Takeout Commitment, Purchaser and Seller may, but neither is required to, renegotiate the terms of the Takeout Commitment Assignment.
Section 4.Issuance and Delivery of Participation Certificate.
(a)In connection with each Transaction, Seller shall cause a fully executed and completed Participation Certificate to be issued and delivered to the Custodian for authentication and delivery of a copy thereof to Purchaser on or before the Purchase Date. Pursuant to the Custodial Agreement, Custodian shall hold the Participation Certificate for the exclusive use and benefit of Purchaser, as Purchaser’s bailee, and shall deliver a facsimile copy of the Participation Certificate to Purchaser upon authentication. The Participation Certificate shall evidence the entire Mortgage Pool Ownership Interest in the Mortgage Pool. The Participation Certificate shall, by its terms, cease to evidence a Mortgage Pool Ownership Interest (i) (A) with respect to any Agency Security issued by GNMA, when Purchaser is registered as the registered owner of such Security on GNMA's central registry and (B) with respect to any Agency Security issued by Fannie Mae or Freddie Mac, the later to occur of (x) the issuance of the related Agency Security and (y) the transfer of all of the right, title and ownership interest in that Agency Security to Purchaser or its designee; or (ii) in the event of an Agency Security Issuance Failure, a purchase of the entire Participation Certificate by Seller in an amount equal to the aggregate unpaid principal balance of the Mortgage Loans evidenced by such Participation Certificate plus accrued interest at the Participation Certificate Pass-Through Rate; provided, however, that in the event of an Agency Security Issuance Failure, Purchaser may at its option cause the Participation Certificate to be canceled in exchange for assignment and delivery to Purchaser by the Custodian of the entire Mortgage Pool Ownership Interest, and provided further, that the rights and remedies conferred under such Participation Certificate and this Agreement shall continue to be effective in determining the rights of Purchaser (or other holder of the Participation Certificate) to receive the benefit of any required payments derived from the Mortgage Pool.
(b)Purchaser and any transferee under the Participation Certificate shall be entitled during the term in which a Participation Certificate remains in force and effect to sell, transfer, assign, pledge, or otherwise dispose of such Participation Certificate in accordance with the terms of the Custodial Agreement, all without the consent of Seller; provided, however, that
no such sale, transfer, assignment, pledge or disposition shall release Purchaser from any of its obligations under this Agreement or any other Program Document. Seller agrees to treat any registered holder of the Participation Certificate as the sole beneficial owner of the Mortgage Pool evidenced thereby, all as further provided in the Custodial Agreement; provided, however, that no sale, transfer, assignment, pledge or disposition of such Participation Certificate shall release Purchaser from any of its obligations under this Agreement or any other Program Document.
(c)Each Participation Certificate shall provide for monthly remittance by Seller to the registered holder thereof of Mortgage Pool payments of principal (including principal prepayments) and interest. The first Remittance Date for Seller’s remittance of Mortgage Loan payments to the holder of a Participation Certificate (“Initial Remittance Date”) shall occur (if at all) on the twenty fifth (25th) day of the month following the month in which the Settlement Date is scheduled to occur. The remittance on the Initial Remittance Date, or on such earlier date if an Agency Security Issuance Failure has occurred, shall include all Mortgage Pool payments (with the interest component thereof adjusted to the Participation Certificate Pass-Through Rate) received by Seller (or Subservicer).
(d)Upon sale or other disposition by Purchaser as contemplated herein, Purchaser (or a subsequent registered holder of a Participation Certificate) shall surrender the Participation Certificate (to the extent in its possession) to Custodian upon the earliest to occur of (i) the sale or transfer of such Participation Certificate and (ii) the assignment and delivery to Purchaser of the entire Mortgage Pool Ownership Interest.
Section 5.Mortgage Pool Interim Servicing.
(a)General Interim Servicing Standards; Indemnification; Servicing Compensation. Seller and Purchaser each agrees and acknowledges that each Mortgage Pool shall be sold to Purchaser on a servicing released basis. Purchaser and Seller agree, however, that Purchaser is engaging, and Purchaser does hereby engage, Seller to provide interim servicing of each Mortgage Pool for the benefit of Purchaser (and any other registered holder of the Participation Certificate) from the Purchase Date for each Transaction until the expiration or earlier termination of the Interim Servicing Period. Seller shall have no further servicing obligations or duties to Purchaser under the terms of this Agreement with respect to the relevant Mortgage Pool upon the expiration of the applicable Interim Servicing Period.
Seller shall separately service and administer each Mortgage Pool that is subject to a Transaction hereunder in accordance with Accepted Servicing Practices and Seller shall at all times comply with applicable law, FHA Regulations and VA regulations, as applicable, and any other applicable rules or regulations so that (among other things) FHA insurance, VA guarantee, or private mortgage insurance in respect of any Mortgage Loan in such Mortgage Pool remains in full force and effect and is not reduced. Seller shall at all times maintain accurate and complete records of its servicing of the Mortgage Loans that are subject to a Transaction, and Purchaser may, at any time during Seller’s normal business hours, on reasonable prior written notice, examine such records. In addition, Seller shall deliver to Purchaser on each Remittance Date (or other date of required remittance of Mortgage Loan payments) occurring during the
Interim Servicing Period a written report regarding the status of those Mortgage Loans that are subject to a Transaction, in the form, and having the content, of the remittance report required under the relevant Agency Guide and Agency Program respecting the Agency Security originally intended to be issued pursuant to the Transaction (each, a “Mortgage Loan Remittance Report”). Seller shall not consent to a modification of the interest rate of a Mortgage Note that is subject to a Transaction, defer or forgive the payment thereof or of any principal, reduce the Outstanding Principal Balance (except for actual payments of principal) or extend the final maturity date of a Mortgage Loan that is subject to a Transaction during the Interim Servicing Period or at any other time that it is servicing such Mortgage Loan hereunder for the benefit of Purchaser or its permitted assigns. In addition, the Seller will not make material changes to the servicing of the Mortgage Loans that are subject to Transactions without the consent of the Purchaser.
Seller shall indemnify and hold Purchaser harmless against any and all actions, claims, liabilities or other losses (“Losses”) resulting from or otherwise arising in connection with the failure of Seller to perform its Obligations in strict compliance with the terms of this Agreement (which indemnification shall not include consequential damages but shall include, without limitation, any failure to perform interim servicing obligations, any failure of a Takeout Buyer to perform in a timely manner under its forward purchase commitment if such failure was caused by Seller’s breach of its obligations under this Agreement or Seller’s failure to take action under the terms of this Agreement, any Losses attributable to an Agency Security Issuance Failure if such failure was caused by Seller’s breach of its obligations under this Agreement or Seller’s failure to take action under the terms of this Agreement, any Losses attributable to the improper servicing of the Mortgage Loans that are subject to a Transaction and any Losses attributable to the failure of an Agency to deliver an Agency Security on the Scheduled Delivery Date if such failure was caused by Seller’s breach of its obligations under this Agreement or Seller’s failure to take action under the terms of this Agreement).
With respect to any Mortgage Loan that is subject to a Transaction, if such Mortgage Loan is delinquent with respect to either the Mortgage Loan’s first or second scheduled monthly payment subsequent to origination of such Mortgage Loan, Seller shall, upon receipt of notice from Purchaser, promptly indemnify and hold Purchaser harmless against any Losses resulting from or otherwise arising in connection with such delinquent Mortgage Loan.
As compensation for Seller undertaking interim servicing duties, Seller shall be entitled to receive the Servicing Fee and such other compensation (e.g., late fees and assumption fees) as and in such manner provided for under the applicable provisions of the relevant Agency Guide and Agency Program.
(b)Seller’s Retention of Mortgage Files and Servicing Files. Each Servicing File and Mortgage File related to Mortgage Loans that are subject to a Participation Certificate shall be held by Seller in order to service such Mortgage Loans pursuant to this Agreement and are and shall be held in trust by Seller for the benefit of Purchaser as the owner thereof during the Interim Servicing Period or at any other time that it is servicing such Mortgage Loan hereunder for the benefit of Purchaser or its permitted assigns. Seller’s possession of each Servicing File and Mortgage File related to the Mortgage Loans that are subject to a Participation Certificate is
at the will of Purchaser for the sole purpose of facilitating servicing of the related Mortgage Loan during the Interim Servicing Period pursuant to this Agreement, and such retention and possession by Seller shall be in a custodial capacity only. The ownership of each Mortgage Note, Mortgage and related Mortgage Loan Documents related to the Mortgage Loans that are subject to a Participation Certificate, and the contents of each Servicing File and Mortgage File related thereto is vested in Purchaser and the ownership of all records and documents with respect to the related Mortgage Loan prepared by or which come into the possession of Seller shall immediately vest in Purchaser and shall be retained and maintained, in trust, by Seller at the will of Purchaser in such custodial capacity only. The books and records of Seller shall be appropriately marked to clearly reflect the ownership of the Mortgage Loans that are subject to a Participation Certificate by Purchaser (subject to the rights of the relevant Agency upon issuance of the Agency Security). Seller shall release from its custody the contents of any Mortgage File or Servicing File related to Mortgage Loans that are subject to a Participation Certificate retained by it only in accordance with this Agreement and/or any applicable Agency Guide, unless such release is required as incidental to the servicing of a Mortgage Loan.
(c)Custodial Collection Account and Escrow Account; Mortgage Loan Payments. Seller shall establish one or more custodial collection accounts and escrow accounts, each in the form of time deposit or demand accounts, and each titled, “[***]” (each such account, a “Custodial Account”). Such accounts shall be established with a Qualified Depository acceptable to Purchaser and Seller shall promptly deliver to Purchaser evidence of the establishment of such accounts by delivery to Purchaser of certifications substantially in the form of the above-referenced account certifications.
Any funds deposited in any of the foregoing accounts shall at all times be fully insured by the FDIC to the full extent permitted under applicable law. Funds shall be deposited in such accounts, and may be drawn on and invested and reinvested, by Seller solely in a manner consistent with the applicable servicing provisions of the Agency Guide and Agency Program relating to the Agency Security originally intended to be issued in connection with the relevant Transaction.
(d)Subservicers. The Mortgage Loans may be subserviced by a Subservicer on behalf of Seller provided that the Subservicer is a GNMA-approved issuer, Fannie Mae-approved lender, Freddie Mac seller/servicer, FHA Approved Mortgagee, and VA Approved Lender, in each case in good standing, and no event has occurred, including but not limited to a change in insurance coverage, that would make it unable to comply with the eligibility requirements for lenders/servicers imposed by the relevant Agency Guide. Seller shall notify all relevant Subservicers, at the commencement of each Transaction, of Purchaser’s interest under this Agreement. Seller shall pay all fees and expenses of a Subservicer from its own funds, and a Subservicer’s fee shall not exceed the Servicing Fee respecting a particular Mortgage Pool.
At the cost and expense of Seller, without any right of reimbursement from any custodial collection account, Seller shall be entitled to terminate the rights and responsibilities of a Subservicer and arrange for any servicing responsibilities to be performed by a successor Subservicer meeting the requirements in the preceding paragraph; provided, however, that
nothing contained herein shall be deemed to prevent or prohibit Seller, at Seller’s option, from electing to service the related Mortgage Loans itself. In the event that Seller’s responsibilities and duties respecting a particular Mortgage Pool expire by reason of expiration or earlier termination of the Interim Servicing Period, if reasonably requested to do so by Purchaser, Seller shall, at its own cost and expense, terminate the rights and responsibilities of any Subservicers as soon as is reasonably possible.
Notwithstanding any of the provisions of this Agreement relating to agreements or arrangements between Seller and a Subservicer or any reference herein to actions taken through a Subservicer or otherwise, Seller shall not be relieved of its Obligations to Purchaser or other registered holder of the Participation Certificate and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Mortgage Loans and Seller shall remain responsible hereunder for all acts and omissions of a Subservicer as fully as if such acts and omissions were those of Seller. Seller shall be entitled to enter into an agreement with a Subservicer for indemnification of Seller by the Subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a Subservicer shall be deemed to be between the Subservicer and Seller alone, and Purchaser shall have no obligations, duties or liabilities with respect to the Subservicer including no obligation, duty or liability to pay the Subservicer’s fees and expenses.
(e)Early Servicing Termination. Without limiting Purchaser’s rights to terminate Seller as servicer as provided above, Purchaser (or any other registered holder of the related Participation Certificate) shall nonetheless be entitled (and in the case of clause (vi), such termination shall occur automatically), by written notice to Seller (and in the case of clause (vi) below immediately without notice), to effect termination of Seller’s interim Servicing Rights and obligations respecting the affected Mortgage Pool in the event any of the following circumstances or events (“Servicing Termination Events”) occur and are continuing:
(i)the Seller shall default in the payment of (i) any Losses pursuant to Section 5(a) of this Agreement, or (ii) any other Expenses, payments or obligations under the Program Documents, when the same shall become due and payable, whether at the due date thereof, or by acceleration or otherwise, and such failure to pay under this clause (ii) continues unremedied for a period of [***]; or
(ii)Reserved; or
(iii)(A) any representation or warranty (other than the representations and warranties set forth in Section 10(b) unless (x) Seller shall have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made or (y) any such representations and warranties have been determined by Purchaser to be materially false or misleading on a regular basis) made by Seller in this Agreement or any other Program Document is untrue, inaccurate or incomplete in any material respect on or as of the date made; or
(B) any material information contained in any written statement, report, financial statement or certificate made or delivered by Seller (either before or after the date hereof) to Purchaser pursuant to the terms of this Agreement or any other Program Document (other than as set forth in Section 10(b) unless (x) Seller shall have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made or (y) any such representations and warranties have been determined by Purchaser to be materially false or misleading on a regular basis) is untrue or incorrect in any material respect as of the date when made or deemed made; or
(iv)Seller shall fail to comply with any of the requirements set forth in [***]or
(v)Seller shall fail to observe, keep or perform any material duty, responsibility or obligation imposed or required by this Agreement or any other Program Document other than one of the Servicing Termination Events specified or described in another section of this Section 5(e), and such failure continues unremedied for a period of [***]; or
(vi)an Event of Insolvency occurs with respect to Seller; or
(vii)one or more final judgments or decrees are entered against Seller, any of its Subsidiaries for the payment of money in excess of [***] (net of the portion thereof, if any, covered by insurance and the same shall not be vacated, discharged (or provisions satisfactory to Purchaser shall not be made for such discharge), satisfied or stayed or bonded pending appeal, within [***] from the date of entry thereof, and Seller or such Subsidiary, as applicable, shall not within said period of [***] or such longer period during which execution of same shall have been stayed by court order or by written agreement with the judgment creditor, perfect appeal therefrom and cause execution thereof to be stayed during such appeal; or
(viii)any Agency, private investor or any other Person seizes or takes control of any material portion of the Servicing Portfolio of its residential mortgage loans being serviced by Seller or any of its Subsidiaries for breach of any servicing agreement applicable to such Servicing Portfolio or for any other reason whatsoever; or
(ix)any Agency or Governmental Authority revokes or materially restricts the authority of Seller to originate, purchase, sell or service residential mortgage loans, or Seller shall fail to meet all requisite servicer eligibility qualifications promulgated by any Agency; or
(x)there is a default that has continued beyond any grace or cure period under (A) the Master Repurchase Agreement or (B) any agreement other than a Program Document that Seller, or any of its Subsidiaries, has entered into with Purchaser or any of its Affiliates or Subsidiaries if the effect of such default is to cause, or to permit such counterparty (or a trustee on behalf of such counterparty) to cause, Indebtedness of Seller in excess of [***] to become or be declared due before its stated maturity (upon the
giving or receiving of notice, lapse of time or both, if applicable, or satisfaction of any other condition to acceleration, whether or not any such condition to acceleration has been satisfied); or
(xi)Seller fails to pay when due any repurchase price, margin amount, price differential, principal, interest or other amount due on any other Indebtedness (including, without limitation, under any credit or repurchase, early purchase or similar facilities for the financing of its Mortgage Loans, mortgage Servicing Rights or servicing advances) in excess of [***] individually or in the aggregate, beyond any period of grace provided, or there occurs any breach or default (beyond any period of grace provided) with respect to any material term of any such Indebtedness in excess of [***], individually or in the aggregate, if the effect of such failure, breach or default is to cause, or to permit the holder or holders thereof (or a trustee on behalf of such holder or holders) to cause, such Indebtedness of Seller to become or be declared due before its stated maturity (upon the giving or receiving of notice, lapse of time or both, if applicable, or satisfaction of any other condition to acceleration, whether or not any such condition to acceleration has been satisfied); provided that if such breach or default is waived in writing by the holder of such Indebtedness before Purchaser has exercised its right to terminate the interim Servicing Rights and Obligations of the Seller pursuant to Section 5(f) of this Agreement, no Servicing Termination Event shall be deemed to exist under this Agreement on account of such waived breach or default; or
(xii)there is a Material Adverse Effect; or
(xiii)(A) Seller shall assert that any Program Document is not in full force and effect or shall otherwise seek to terminate (other than a termination of this Agreement or any Program Document that is expressly permitted by this Agreement), or disaffirm its obligations under, any such Program Document at any time following the execution thereof or (B) any Program Document ceases to be in full force and effect, or any of Seller’s material obligations under any Program Document shall cease to be in full force and effect (other than as a result of any termination of this Agreement or any Program Document that is expressly permitted by this Agreement), or the enforceability thereof shall be contested by Seller; or
(xiv)any Governmental Authority or any trustee, receiver or conservator acting or purporting to act under such 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 assets of Seller or any Subsidiary of Seller, or shall have taken any action to displace the management of Seller or any Subsidiary of Seller or to curtail its authority in the conduct of the business of Seller or any Subsidiary of Seller, or to restrict the payment of dividends to Seller by any Subsidiary of Seller, and such action shall not have been discontinued or stayed within [***]; or
(xv)any Change in Control of Seller shall have occurred without Purchaser’s prior written consent; or
(xvi)reserved; or
(xvii)any failure by Seller to deliver assignments executed in blank to Purchaser or its designee for each Mortgage Loan that is the subject of a Transaction under this Agreement then held by Purchaser within [***] following any termination of Seller’s MERS membership; or
(xviii)an Agency Security Issuance Failure that is caused by Seller’s failure to take action in accordance with this Agreement; or
(xix)a downgrade of any of Seller’s or any of its Subsidiaries’ servicer ratings below the ratings held by Seller or such Subsidiary as of the date of this Agreement or, for ratings initiated after the date of this Agreement, below such initial ratings; or
(xx)the Pension Benefit Guaranty Corp. shall file notice of a Lien pursuant to Section 4068 of ERISA with regard to any of the assets of Seller or any of its Subsidiaries; or
(xxi)Seller shall become subject to registration as an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended; or
(xxii)(A) Seller shall grant, or suffer to exist, any Lien on any Participation Certificate or Mortgage Loan related thereto (except any Lien in favor of the Purchaser), or (B) the Liens contemplated hereby fail to be first priority perfected Liens on any portion of a Mortgage Pool subject to a Participation Certificate in favor of the Purchaser.
(f)Remedies. In the case of the events described in clause (e)(vi), immediately upon the occurrence of any such event, regardless of whether notice of such event shall have been given to or by Purchaser or Seller, and each and every other case, so long as the Servicing Termination Event shall not have been remedied (but only to the extent, and within the time period, of any remedy period provided above), in addition to whatever rights Purchaser may have at law or equity to damages, including injunctive relief and specific performance, by notice in writing to Seller, Purchaser may terminate all the interim Servicing Rights and Obligations of Seller under this Agreement and all Outstanding Transactions.
Upon receipt by Seller of such written notice, all authority and power of Seller respecting its interim mortgage servicing duties under this Agreement and any affected Transactions, shall pass to and be vested in the successor servicer appointed by Purchaser (a “Designated Servicer”). Upon written request by Purchaser, Seller shall prepare, execute and deliver to the Designated Servicer any and all documents and other instruments, place in such successor’s possession all Mortgage Files and Servicing Files related to the Mortgage Loans that are subject to affected Transactions, and do or cause to be done all other acts or things necessary or appropriate to effect the purposes of such notice of termination, including, but not limited to, the transfer, endorsement and assignment of the Mortgage Loans and related documents related to affected Transactions, at Seller’s sole expense.
Section 6.Seller Covenants Regarding Transfer of Servicing.
In the event a Servicing Termination Event occurs as described in clause (e)(vi) of the definition of Servicing Termination Event or Purchaser gives notice to Seller of Purchaser’s intention to transfer servicing to the Designated Servicer upon the occurrence of any other Servicing Termination Event, expiration or earlier termination of the Interim Servicing Period (“Servicing Transfer Date”), then, in each such case Seller agrees at its sole expense to take all reasonable and customary actions, to assist Purchaser, Custodian and Designated Servicer in effectuating and evidencing transfer of servicing to the Designated Servicer in compliance with applicable law on or before the Servicing Transfer Date, including:
(a)Notice to Mortgagors. Seller shall mail to the mortgagor of each Mortgage Loan that is subject to an affected Transaction, by such date as may be required by law, a letter advising the mortgagor of the transfer of the servicing thereof to the Designated Servicer. Purchaser shall cause the Designated Servicer to mail a letter to each such mortgagor advising such mortgagor that the Designated Servicer is the new servicer of the related Mortgage Loan. Such letters shall be mailed by such date as may be required by applicable law.
(b)Notice to Insurance Companies and HUD (if applicable). Seller shall transmit or cause to transmit to the applicable insurance companies (including primary mortgage insurers, if applicable) and/or agents, not less than s[***] prior to the Servicing Transfer Date, notification of the transfer of the servicing to the Designated Servicer and instructions to deliver all notices, insurance statements, as the case may be, to the Designated Servicer from and after the Servicing Transfer Date. With respect to any FHA-insured/VA guaranteed Mortgage Loans in the Mortgage Pool that is subject to an affected Transaction in addition to the requirements set forth above, Seller shall provide notice to HUD on such forms prescribed by HUD, or to the VA respecting the transfer of insurance credits, as the case may be. Seller shall continue to remit all mortgage insurance premiums with respect to FHA/VA Mortgage Loans until such notice is received by HUD and/or the VA.
(c)Assignment and Endorsements. At Purchaser’s (or Designated Servicer’s) direction and in Purchaser’s sole discretion, Seller shall, at its own cost and expense, prepare and/or complete endorsements to Mortgage Notes and assignments of Mortgages (including any interim endorsements or assignments), in each case to the extent subject to an affected Transaction, prior to the Servicing Transfer Date.
(d)Delivery of Servicing Records. Seller shall forward to the Designated Servicer, not more than [***] after the Servicing Transfer Date, all Servicing Files, Mortgage Files and any other Mortgage Loan Documents in Seller’s (or any Subservicer’s) possession relating to each Mortgage Loan that is subject to an affected Transaction.
(e)Escrow Payments. Seller shall provide the Designated Servicer on or within [***] of the Servicing Transfer Date with immediately available funds by wire transfer in the amount of the net Escrow Payments and suspense balances and all loss draft balances associated with the Mortgage Loans in an affected Mortgage Pool. Seller shall provide the Designated Servicer on or before the Servicing Transfer Date with an accounting statement of
Escrow Payments and suspense balances and loss draft balances sufficient to enable the Designated Servicer to reconcile the amount of such payment with the accounts of the Mortgage Loans in the affected Mortgage Pool. Additionally, Seller shall wire to the Designated Servicer on or before the Servicing Transfer Date the amount of any agency, trustee or prepaid Mortgage Loan payments and all other similar amounts held by Seller (or Subservicer), in each case with respect to Mortgage Loans that are subject to an affected Transaction.
(f)Payoffs and Assumptions. Seller shall provide to the Designated Servicer, on or before the Servicing Transfer Date, copies of all assumption and payoff statements generated by Seller (or Subservicer), on the Mortgage Loans.
(g)Mortgage Payments Received Prior to Servicing Transfer Date. Seller shall forward by wire transfer, within [***] of the Servicing Transfer Date, all payments received by Seller (or Subservicer) on each Mortgage Loan in the affected Mortgage Pools prior to the Servicing Transfer Date to Purchaser.
(h)Mortgage Payments Received After Servicing Transfer Date. For a period of [***] after the Servicing Transfer Date, Seller shall forward the amount of any monthly payments received by Seller (or Subservicer) after the Servicing Transfer Date) on account of each Mortgage Loan in the affected Mortgage Pools to the Designated Servicer by overnight mail on the date of receipt. Seller shall notify the Designated Servicer of the particulars of the payment, which notification requirement shall be satisfied (except with respect to Mortgage Loans then in foreclosure or bankruptcy) if Seller (or Subservicer) forwards with its payments sufficient information to the Designated Servicer. Seller shall assume full responsibility for the necessary and appropriate legal application of monthly Mortgage Pool payments received by Seller (or Subservicer) after the Servicing Transfer Date with respect to Mortgage Loans then in foreclosure or bankruptcy; provided, however, necessary and appropriate legal application of such monthly Mortgage Pool payments shall include, but not be limited to, endorsement of a Mortgage Loan monthly payment to the Designated Servicer with the particulars of the payment such as the account number, dollar amount, date received and any special mortgage application instructions.
(i)Reconciliation. [***] prior to the Servicing Transfer Date, Seller shall reconcile principal balances and make any monetary adjustments reasonably required by the Designated Servicer. Any such monetary adjustments will be transferred between Seller and the Designated Servicer, as appropriate.
(j)IRS Forms. Seller shall timely file all IRS forms which are required to be filed in relation to the servicing and ownership of the Mortgage Loans in the affected Mortgage Pools. Seller shall provide copies of such forms to the Designated Servicer upon request and shall reimburse the Designated Servicer for any costs or penalties incurred by the Designated Servicer due to Seller’s failure to comply with this paragraph.
In the event Seller fails to perform any of its obligations described in paragraph (a) through (j) above within the time periods specified therein, Purchaser may take, or cause to be taken, at Seller’s expense, any of the actions described therein.
Section 7.Intent of Parties; Security Interest.
(a)From and after the issuance of the related Participation Certificate, the record title of Seller to each related Mortgage Loan is retained by Seller in trust, for the sole purpose of facilitating the interim servicing of such Mortgage Loan, and all funds received on or in connection with such Mortgage Loan shall be deposited in the Custodial Account and held by Seller in trust for the benefit of the registered holder of the related Participation Certificate and shall be disbursed only in accordance with this Agreement.
(b)It is the intent of the parties hereto that the sale of a participation in each Mortgage Loan shall be reflected on Seller’s balance sheet and other financial statements as a sale of assets by Seller. Seller shall be responsible for maintaining, and shall maintain, a complete set of books and records for each Mortgage Loan that is subject to a Transaction hereunder which shall be clearly marked to reflect that such Mortgage Loan is subject to a Transaction hereunder.
(c)Purchaser and Seller confirm that each of the Transactions contemplated herein are purchases and sales and are not loan transactions. If Seller is an insured depository institution, the parties understand and intend that this Agreement and each Transaction constitute “qualified financial contracts” as that term is used in the Federal Deposit Insurance Act, Section 1821 of Title 12 of the United States Code, as amended. If Seller is any other type of entity, the parties understand and intend that this Agreement and each Transaction constitute a “securities contract” as that term is defined in § 741(7) of the United States Bankruptcy Code. In addition to the foregoing, (x) Seller hereby pledges to Purchaser as security for the performance by Seller of its obligations under this Agreement and hereby grants, assigns and pledges to Purchaser a fully perfected first priority security interest in the Mortgage Loans that are the subject of a Participation Certificate, any Agency Security or right to receive such Agency Security when issued to the extent backed by any of such Mortgage Loans, the custodial collection accounts and escrow accounts referred to in this Agreement or any other Program Document, the Takeout Commitments (and assignments thereof) with respect to any Agency Security to be issued in connection with a Transaction under this Agreement, together with all related Servicing Rights, the Servicing Files, Mortgage Files, Mortgage Loan Documents and Pooling Documents and any other contract rights, accounts (including any interest of Seller in escrow accounts) and any other payments, rights to payment (including payments of interest or finance charges) and general intangibles, in each case to the extent that the foregoing relates to any Mortgage Loan that is subject to a Participation Certificate; and any other assets relating to such Mortgage Loans (including, without limitation, any other accounts) that are subject to a Participation Certificate or any interest in the Mortgage Loans that are subject to a Participation Certificate and all products and proceeds of any and all of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Basic Collateral”); (y) possession of the Mortgage Loan Documents, Pooling Documents and any other documentation relating to the Mortgage Pool or the Agency Security relating to any Transaction hereunder by Custodian or by Seller shall constitute constructive possession by Purchaser; and (z) Purchaser shall have all the rights of a secured party pursuant to applicable law, and for such purposes this Agreement shall constitute a security agreement.
(d)In the event that the servicing of the Mortgage Loans that are subject to a Participation Certificate is deemed a separate property right severable from the Mortgage Loans and Participation Certificates, and in any event, Seller and Purchaser intend that Purchaser or its Assignee, as the case may be, shall have, and the Seller hereby grants and pledges to Purchaser or its Assignee a perfected first priority security interest in Seller’s right, title and interest in the Servicing Rights to the Mortgage Loans that are subject to a Participation Certificate and the Servicing Files related thereto and the proceeds of any and all of the foregoing in all instances, whether now owned or hereafter acquired, now existing or hereafter created (“Additional Collateral”; together with the Basic Collateral, the “Collateral”) free and clear of adverse claims.
Section 8.Conditions Precedent.
It shall be a condition precedent to the parties entering into each Transaction, under this Agreement that Purchaser receives the following:
(i)a certificate of a Responsible Officer attaching certified copies of Seller’s certificate of formation, operating agreement and resolutions of Seller’s board of directors authorizing the transactions contemplated hereby;
(ii)a certificate of incumbency of authorized representatives which sets forth the names, titles and true signatures of all of those individuals authorized to execute any document or instrument contemplated by this Agreement and the Custodial Agreement;
(iii)an opinion of counsel of the Seller, (A) in the form of Exhibit D or such other form as the Purchaser may accept (including a non-contravention, enforceability and corporate opinion with respect to Seller); (B) an opinion with respect to the inapplicability of the Investment Company Act of 1940 to Seller and (C) a true sale opinion; each in form and substance acceptable to Purchaser;
(iv)the Program Documents fully executed by the parties thereto; and
(v)such other documents reasonably requested by Purchaser.
(a)It shall be a condition precedent to the parties entering into additional Transactions, under this Agreement that:
(i)Purchaser receives a copy of the Takeout Commitment covering in the aggregate a Takeout Amount equal to the Agency Security Face Amount;
(ii)Purchaser receives the Takeout Commitment Assignment(s), duly executed by Seller, together with appropriate instructions sufficient to ensure that Purchaser can obtain the consent of each Takeout Buyer to the assignment of the Takeout Commitment;
(iii)Purchaser receives such copies of the relevant Pooling Documents (the originals of which shall have been delivered to the Agency) as Purchaser may request from time to time;
(iv)Purchaser receives a letter from any warehouse lender having a security interest in the Mortgage Loans, addressed to Purchaser, releasing any and all right, title and interest in such Mortgage Loans, substantially in the form of an exhibit to the Custodial Agreement;
(v)Purchaser receives an electronic copy of the original Participation Certificate fully completed by Seller and authenticated by Custodian;
(vi)no Servicing Termination Event or Potential Servicing Termination Event shall have occurred and be continuing under the Program Documents and under the Master Repurchase Agreement;
(vii)Purchaser receives an electronic data file for each Transaction, including all fields set forth on Exhibit B hereto;
(viii)the representations and warranties made by the Seller shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);
(ix)after giving effect to the requested Transaction, the aggregate outstanding Purchase Price for all Mortgage Loans subject to Outstanding Transactions under this Agreement shall not exceed the Maximum Purchase Price;
(x)there shall have been no Material Adverse Effect on the financial condition of Seller since the most recent financial statements of Seller were delivered to Purchaser; and
(xi)such Purchase Date occurs at least [***] prior to the related Settlement Date.
Section 9.Representations and Warranties.
(a)Seller hereby represents and warrants to Purchaser as of the date hereof and as of the date of each issuance and delivery of a Participation Certificate that:
(i)Seller is Principal. Seller is engaging in the Transactions as a principal.
(ii)Reserved.
(iii)Solvency. Both as of the date hereof and immediately after giving effect to each Transaction hereunder, the fair value of Seller’s assets is greater than the fair value of Seller’s liabilities (including contingent liabilities if and to the extent required to be recorded as liabilities on the financial statements of Seller in accordance with GAAP), and Seller (1) is not insolvent (as defined in 11 U.S.C. § 101(32)), (2) is able to pay and intends to pay its debts as they mature and (3) does not have unreasonably small capital to engage in the business in which it is engaged and proposes to engage. Seller does not
intend to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. Seller is not transferring any Mortgage Loans with any intent to hinder, delay or defraud any Person.
(iv)No Broker. The Seller has not dealt with any broker, investment banker, agent, or other person, except for the Purchaser, who may be entitled to any commission or compensation in connection with the sale of Participation Certificates pursuant to this Agreement.
(v)Performance. Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform, and Seller intends to perform, each and every covenant that it is required to perform under this Agreement and the other Program Documents.
(vi)Organization and Good Standing; Subsidiaries. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction under which it was organized, has full legal power and authority to own its property and to carry on its business as currently conducted, and is duly qualified as a foreign entity to do business and is in good standing in each jurisdiction in which the transaction of its business makes such qualification necessary, except in jurisdictions, if any, where a failure to be in good standing has no material adverse effect on the business, operations, assets or financial condition of Seller. For the purposes hereof, good standing shall include qualification for any and all licenses and payment of any and all taxes required in the jurisdiction of its organization and in each jurisdiction in which Seller transacts business. Seller has no Subsidiaries except those listed in the Pricing Side Letter, as such exhibit has been most recently updated by a revision delivered by Seller to Purchaser. As of the date of this Agreement, with respect to Seller and each such Subsidiary, the Pricing Side Letter correctly states its name as it appears in its articles of formation filed in the jurisdiction of its organization, address, place of organization, each state in which it is qualified as a foreign corporation or entity, and in the case of the Subsidiaries, the percentage ownership (direct or indirect) of Seller in such Subsidiary.
(vii)Financial Condition. The consolidated balance sheets of Seller provided to Purchaser pursuant to Section 10(a)(vi) (and, if applicable, its Subsidiaries) as of the dates of such balance sheets, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for the periods ended on the dates of such balance sheets heretofore furnished to Purchaser, fairly present in all material respects the financial condition of Seller and its Subsidiaries as of such dates and the results of their operations for the periods ended on such dates. On the dates of such balance sheets, Seller had no known material liabilities, direct or indirect, fixed or contingent, matured or unmatured, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against on, said balance sheets 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 Purchaser in writing. Said financial statements were prepared in accordance with GAAP and applied on a consistent basis throughout the periods involved. Since the date
of the balance sheet most recently provided, there has been no Material Adverse Effect, nor is Seller aware of any state of facts particular to Seller that (with or without notice or lapse of time or both) could reasonably be expected to result in any such Material Adverse Effect.
(viii)No Conflict. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated by this Agreement, nor compliance with its terms and conditions, shall conflict with or result in the breach of, or constitute a default under, or result in the creation or imposition of any Lien (other than Liens created pursuant to this Agreement and the other Program Documents) of any nature upon the properties or assets of Seller under, any of the terms, conditions or provisions of Seller’s organizational documents, or any material mortgage, indenture, deed of trust, loan or credit agreement or other material agreement or material instrument to which Seller is now a party or by which it is bound (other than this Agreement).
(ix)Authority and Capacity. Seller has all requisite power, authority and capacity to enter into this Agreement and each other Program Document and to perform the obligations required of it hereunder and thereunder. This Agreement and all of the Program Documents constitute a valid and legally binding agreement of Seller enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization, conservatorship and similar laws, and by equitable principles. No consent, approval, authorization, license or order of or registration or filing with, or notice to, any Governmental Authority is required under any Requirement of Law before the execution, delivery and performance of or compliance by Seller with this Agreement or any other Program Document or the consummation by Seller of any transaction contemplated thereby, except for those that have already been obtained by Seller, and the filings and recordings in respect of the Liens created pursuant to this Agreement and the other Program Documents. If Seller is a depository institution, this Agreement is a part of, and will be maintained in, Seller’s official records.
(x)Approved Company. Seller currently holds all approvals, authorizations and other licenses from the Takeout Buyer and the Agencies required under the Agency Guides (or otherwise) to originate, purchase, hold, service and sell Mortgage Loans of the types to be transferred hereunder.
(xi)Reserved.
(xii)Reserved.
(xiii)Reserved.
(xiv)No Potential Servicing Termination Event. No Potential Servicing Termination Event or Servicing Termination Event has occurred and is continuing.
(xv)Litigation; Compliance with Laws. There is no litigation pending or, to Seller’s knowledge threatened, that could reasonably be expected to cause a Material
Adverse Effect or that could reasonably be expected to materially and adversely affect the Participation Certificates, Mortgage Loans or Agency Securities transferred or to be transferred pursuant to this Agreement, taken as a whole. Seller has not violated any Requirement of Law applicable to Seller that, if violated, would materially and adversely affect the Participation Certificates, Mortgage Loans or Agency Securities to be transferred pursuant to this Agreement, taken as a whole, or could reasonably be expected to have a Material Adverse Effect.
(xvi)Tax Returns and Payments. All federal, state and local income, excise, property and other tax returns required to be filed with respect to Seller’s operations and those of its Subsidiaries in any jurisdiction have been filed on or before the due date thereof (plus any applicable extensions); all such returns are true and correct in all material respects; all taxes, assessments, fees and other governmental charges upon Seller, and Seller’s Subsidiaries and upon their respective properties, income or franchises, that are, or should be shown on such tax returns to be, due and payable have been paid, including all Federal Insurance Contributions Act (FICA) payments and withholding taxes, if appropriate, other than those that are being contested in good faith by appropriate proceedings, diligently pursued and as to which Seller has established adequate reserves determined in accordance with GAAP, consistently applied. The amounts reserved, as a liability for income and other taxes payable, in the financial statements described in Section 10(a)(vi) are sufficient for payment of all unpaid federal, state and local income, excise, property and other taxes, whether or not disputed, of Seller and its Subsidiaries, accrued for or applicable to the period and on the dates of such financial statements and all years and periods prior thereto and for which Seller and Seller’s Subsidiaries may be liable in their own right or as transferee of the assets of, or as successor to, any other Person.
(xvii)Investment Company Act. Seller is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(xviii)Participation Certificates.
(A)The Seller has not assigned, pledged, or otherwise conveyed or encumbered any Mortgage Loan that is subject to a Participation Certificate to any other Person (other than Purchaser), and immediately prior to the sale of the related Participation Certificate to the Purchaser, the 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 the Purchaser hereunder.
(B)The provisions of this Agreement are effective to either constitute a sale of the Participation Certificate and the beneficial interest in the Mortgage Pool to the Purchaser or to create in favor of the Purchaser a valid security interest in all right, title and interest of the Seller in, to and under the Mortgage Pool related to such Participation Certificate.
(xix)Place of Business and Formation. As of the date of this Agreement, the principal place of business of Seller is located at the address set forth for Seller in Section 16. As of the date of this Agreement, and during the [***]mmediately preceding that date, the chief executive office of Seller and the office where it keeps its financial books and records relating to its property and all contracts relating thereto and all accounts arising therefrom is and has been located at the address set forth for Seller in Section 16. As of the date hereof, Seller’s jurisdiction of organization is the state specified in Section 16.
(xx)Reserved.
(xxi)Reserved.
(xxii)Statements Made. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of Seller to Purchaser in connection with the negotiation, preparation or delivery of this Agreement and the other Program Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of Seller to Purchaser in connection with this Agreement and the other Program Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to a Responsible Officer that, after due inquiry, could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Program Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Purchaser for use in connection with the transactions contemplated hereby or thereby.
(xxiii)ERISA. All plans (“Plans”) of a type described in Section 3(3) of ERISA in respect of which Seller or any Subsidiary of Seller is an “employer,” as defined in Section 3(5) of ERISA, are in substantial compliance with ERISA, and none of such Plans is insolvent or in reorganization, has an accumulated or waived funding deficiency within the meaning of Section 412 of the Code, and neither Seller nor any Subsidiary of Seller has incurred any material liability (including any material contingent liability) to or on account of any such Plan pursuant to Sections 4062, 4063, 4064, 4201 or 4204 of ERISA. No proceedings have been instituted to terminate any such Plan, and no condition exists that presents a material risk to Seller or a Subsidiary of Seller of incurring a liability to or on account of any such Plan pursuant to any of the foregoing Sections of ERISA. As of the date of this Agreement, no material liability exists with respect to any Plan in which Seller, any Subsidiary of Seller is an “employer”, or any trust forming a part thereof, that has been terminated since December 1, 1974.
(xxiv)Agency Approvals. Seller (and each subservicer) is approved by GNMA as an approved issuer, Fannie Mae as an approved lender, Freddie Mac as an approved
seller/servicer (as the case may be) and by FHA as an approved mortgagee and by VA as an approved VA lender, in each case in good standing (such collective approvals and conditions, “Agency Approvals”), with no event having occurred or Seller (or any subservicer) having any reason to reasonably believe or suspect will occur prior to the issuance of the Agency Security, including without limitation a change in insurance coverage which would either make Seller (or any subservicer) unable to comply with the eligibility requirements for maintaining all such Agency Approvals. Should Seller (or any subservicer), for any reason, cease to possess all such Agency Approvals, Seller shall so notify Purchaser promptly in writing. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of its (and each subservicer’s) Agency Approvals at all times during the term of this Agreement and each outstanding Transaction. Seller (and any subservicer) has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of residential mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices.
(xxv)No Reliance. The Seller has made its own independent decisions to enter into the Program Documents and each transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. The Seller is not relying upon any advice from Purchaser as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(xxvi)Plan Assets. The Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Mortgage Loans are not “plan assets” within the meaning of 29 CFR §2510.3-101 in Seller’s hands.
(xxvii)Anti-Money Laundering Laws. Seller and its Affiliates each complies with all Anti-Money Laundering Laws applicable to it and its agents.
(xxviii)Anti-Corruption Laws and Sanctions. Seller has implemented and maintains in effect policies and procedures designed to ensure compliance by Seller, its Subsidiaries and their respective directors, members, managers, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and Seller, its Subsidiaries and their respective directors, members, managers, officers, employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. Neither Seller, any of its Subsidiaries nor any of their respective directors, members, managers, officers or employees or agents that will act in any capacity in connection with or benefit from the mortgage warehousing facility established hereby, is a Sanctioned Person. No use of proceeds of any Transaction nor any other transaction contemplated by the Program Documents will violate Anti-Corruption Laws or applicable Sanctions.
(xxix)Eligibility of Custodian. The Custodian is an eligible custodian under the Agency Guide and Agency Program.
(xxx)Takeout Commitment. Any related Takeout Commitment constitutes a valid, binding and enforceable mandatory delivery commitment by a Takeout Buyer to purchase on the Settlement Date and at a given Takeout Price the principal amount of the Agency Security described therein.
(b)Seller hereby represents and warrants to Purchaser with respect to each Mortgage Loan and the related Mortgage Pool, in each case to the extent subject to a Participation Certificate, as of the relevant Purchase Date and Cut-off Date as follows; provided to the extent that the Cut-off Date is a date following the Purchase Date and any facts or circumstances which did not exist on the Purchase Date shall occur subsequent to the Purchase Date that would render any such representation and warranty materially false if made as of the Cut-off Date, Seller shall have no liability for a breach of such representation and warranty made as of such Cut-off Date:
(i)Agency Eligibility. Each such Mortgage Loan is an Agency Eligible Mortgage Loan.
(ii)Mortgage Loan Schedule. The Mortgage Loan Schedule contains a complete listing and schedule of such Mortgage Loans, and the information contained on such Mortgage Loan Schedule is accurate and complete in all material respects.
(iii)Agency Representations. As to both such Mortgage Pool and each such Mortgage Loan, all of the representations and warranties made or deemed made respecting same contained in (or incorporated by reference therein) the relevant Agency Guide provisions and Agency Program (collectively, the “Standard Agency Mortgage Loan Representations”) are (and shall be as of all relevant dates) true and correct in all material respects; and except as may be expressly and previously disclosed to Purchaser, Seller has not negotiated with the Agency any exceptions or modifications to such Standard Agency Mortgage Loan Representations.
(iv)Aggregate Principal Balance. The Cut-off Date Principal Balance respecting such Mortgage Pool shall be at least equal to the Agency Security Face Amount for the Agency Security designated to be issued.
(c)In the event any of Seller’s representations or warranties set forth in Section 10(b) are materially breached or determined by either party not to be accurate in any material respect (each a “Breach”), if such Breach can be cured by action of Seller, Seller may attempt to cure such Breach. If such Breach is not cured within [***] of the occurrence of such Breach, Purchaser at its sole election shall be entitled by notice to Seller to immediately require Seller (i) to purchase the Mortgage Loans which are subject to such Breach (the “Deficient Mortgage Loans”); and (ii) if such Breach relates to any of the representations made pursuant to Section 10(b) and the aggregate principal balance of the Deficient Mortgage Loans, when deducted from the Cut-off Date Principal Balance, would result in a remaining Mortgage Pool principal balance insufficient to support the issuance of an Agency Security to satisfy the Takeout Commitments taken as a whole, to purchase the Deficient Mortgage Loans and, if further elected by Purchaser, to take and accept reassignment to Seller of all of the related
Takeout Commitments, in both (i) and (ii) above at the Repurchase Price for the Deficient Mortgage Loans.
At the time of repurchase, the Purchaser and the Seller shall arrange for the reassignment of the Deficient Mortgage Loan to the Seller and the delivery to the Seller of any documents held by the Custodian relating to the Deficient Mortgage Loan. In the event of a repurchase, the Seller shall, simultaneously with such reassignment, give written notice to the Purchaser that such repurchase has taken place and amend the Mortgage Loan Schedule to reflect the withdrawal of the Deficient Mortgage Loan from this Agreement.
In addition to such repurchase the Seller shall indemnify the Purchaser and hold it harmless against any losses, damages, penalties, fines, forfeitures, including, without limitation, legal fees and related costs, judgment, and other costs and expenses resulting from any claim, demand, defense or assertion based on or grounded upon, or resulting from, a Breach of the Seller representations and warranties contained in Section 10(b) or enforcement of this provision hereunder. It is understood and agreed that the obligations of the Seller set forth in this Section 9 to cure or repurchase a Deficient Mortgage Loan and to indemnify the Purchaser as provided in this Section 9 constitute the sole remedies of the Purchaser respecting a Breach of the foregoing representations and warranties.
The representations and warranties set forth in this Agreement shall survive transfer of the Participation Certificates to Purchaser and shall continue for so long as the Participation Certificates are subject to this Agreement. Any cause of action against the Seller relating to or arising out of the Breach of any of the representations and warranties made in this Section 9 shall accrue as to any Mortgage Loan upon (i) discovery of such Breach by the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by the Seller to cure such Breach or repurchase such Mortgage Loan as specified above, and (iii) demand upon the Seller by the Purchaser for compliance with this Agreement.
Section 10.Covenants of Seller.
(a)On and as of the date of this Agreement and each Purchase Date and each day until this Agreement is no longer in force, the Seller covenants as follows:
(i)Maintenance of Existence; Conduct of Business. Seller shall preserve and maintain its existence in good standing and all of its rights, privileges, licenses and franchises necessary in the normal conduct of its business, including its eligibility as lender, seller/servicer and issuer described under Section 9(a)(x) and shall make no material change in the nature or character of its business or engage in any business substantially different from the loan origination and servicing business in which it is engaged on the date of this Agreement. Seller will not make any material change in its accounting treatment and reporting practices except as required by GAAP. Seller will remain a member of MERS in good standing.
(ii)Compliance with Applicable Laws. Seller shall comply with all Requirements of Law, a breach of which would, or could reasonably be expected to,
affect, as a whole in a materially adverse manner, the Participation Certificates, Mortgage Loans or Agency Securities to be transferred pursuant to this Agreement, or that could reasonably be expected to result in a Material Adverse Effect, in each case except where contested in good faith and by appropriate proceedings and with adequate book reserves determined in accordance with GAAP, consistently applied, established therefor. Seller shall comply in all material respects with all Requirements of Law applicable to it. Without limiting the foregoing, Seller shall comply in all material respects with all applicable (1) Agency Guides, (2) Privacy Requirements, including the GLB Act and Safeguards Rules promulgated thereunder, (3) consumer protection laws and regulations, (4) licensing and approval requirements applicable to Seller’s origination of Mortgage Loans and (5) other laws and regulations referenced in the definition of “Requirement(s) of Law”.
(iii)Taxes. Seller shall pay and discharge or cause to be paid and discharged all taxes, assessments and governmental charges or levies imposed upon Seller or upon its income, receipts or properties, before the same shall become past due, as well as all lawful claims for labor, materials or supplies or otherwise that, if unpaid, might become a Lien upon such properties or any part thereof; provided that Seller shall not be required to pay obligations, taxes, assessments or governmental charges or levies or claims for labor, materials or supplies for which Seller shall have obtained an adequate bond or adequate insurance or that are being contested in good faith and by proper proceedings that are being reasonably and diligently pursued, if such proceedings do not involve any likelihood of the sale, forfeiture or loss of any such property or any interest therein while such proceedings are pending and if adequate book reserves determined in accordance with GAAP, consistently applied, are established therefor.
(iv)Notices. Seller will promptly notify Purchaser of the occurrence of any of the following and shall provide such additional documentation and cooperation as Purchaser may request with respect to any of the following:
(A)any change in the business address and/or telephone number of Seller;
(B)any merger, consolidation or reorganization of Seller;
(C)Seller’s creation, formation or acquisition of any Subsidiary;
(D)reserved;
(E)reserved;
(F)any change of the name or jurisdiction of organization of Seller;
(G)reserved;
(H)Seller’s incurring Indebtedness other than the following:
a.Seller’s obligations under this Agreement and the other Program Documents;
b.Seller’s existing Indebtedness, or Seller’s existing guaranties of its Subsidiaries’ or any other Persons’ indebtedness, described in the Pricing Side Letter at current levels;
c.Seller’s and its Subsidiaries’ obligations under other Available Warehouse Facilities;
d.obligations to pay taxes;
e.liabilities for accounts payable, non-capitalized equipment or operating leases and similar liabilities, but only if incurred in the ordinary course of business;
f.accrued expenses, deferred credits and loss contingencies that are properly classified as liabilities under GAAP;
g.credit or warehouse, early purchase, repurchase or similar facilities for the financing of its Mortgage Loans;
h.capital lease obligations or purchase money debt of Seller or any of its Subsidiaries for fixed or capital assets incurred in the ordinary course of business;
i.other Indebtedness not exceeding [***] in the aggregate at any time outstanding; and
j.guaranties of Indebtedness incurred by a Subsidiary for credit or warehouse, early purchase, repurchase or similar facilities to finance its investment in Mortgage Loans;
(I)Seller’s guaranteeing obligations of any other Person except Indebtedness incurred by a Subsidiary for credit or warehouse, early purchase, repurchase or similar facilities to finance its investment in residential mortgage loans;
(J)any material adverse change in the financial position of Seller, Seller and its Subsidiaries taken as a whole;
(K)receipt by Seller of notice from the holder of any of its Indebtedness of any alleged default in respect of Indebtedness of [***] or more;
(L)the filing of any petition, claim or lawsuit against Seller or any Subsidiary of Seller that could reasonably be expected to have a Material Adverse Effect;
(M)the initiation of any investigations, audits, examinations or reviews of Seller or any Subsidiary of Seller by any Agency or Governmental Authority relating to the origination, sale or servicing of Mortgage Loans by Seller or any Subsidiary of Seller or the business operations of Seller, any Subsidiary of Seller (with the exception of routine and normally scheduled audits or examinations by the regulators of Seller or any Subsidiary of Seller), in each case, provided that Seller or such Subsidiary is not prohibited by either any Requirement of Law or any agreement with such Agency or Governmental Authority from disclosing the fact of the investigation, audit, examination or review;
(N)the occurrence of any actions, inactions or events upon which an Agency may, in accordance with Agency Guides, disqualify or suspend Seller or any Subsidiary of Seller as a seller or servicer, including (if Seller is or becomes a Freddie Mac-approved seller or servicer) those events or reasons for disqualification or suspension enumerated in Chapter 5 of the Freddie Mac Single Family Seller/Servicer Guide and (if Seller is or becomes a Fannie Mae-approved seller or servicer) any breach of Seller’s “Lender Contract” (as defined in the Fannie Mae Single Family 2010 Selling Guide) with Fannie Mae including the breaches described or referred to in Section A2-3, 1-01 “Lender Breach of Contract” of the Fannie Mae Single Family 2010 Selling Guide;
(O)the filing, recording or assessment of any federal, state or local tax Lien in excess of [***] against Seller or any of its assets;
(P)the occurrence of any Potential Servicing Termination Event or Servicing Termination Event hereunder;
(Q)the suspension, revocation or termination of any licenses or eligibility as described under Section 9(a)(x) of Seller or any Subsidiary of Seller;
(R)any other action, event or condition of any nature that could reasonably be expected to result in a Material Adverse Effect or that, with or without notice or lapse of time or both, will constitute a default under any other material agreement, instrument or indenture to which Seller is a party or to which its properties or assets may be subject;
(S)any alleged breach by Purchaser of any provision of this Agreement or of any of the other Program Documents of which Seller has actual knowledge; provided that the failure to give the notice required by this Section 10 shall not constitute a Servicing Termination Event;
(T)promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Program Document) on, or claim asserted against, any of the Mortgage Pool that is subject to a Participation Certificate;
(U)reserved;
(V)[***] after the Seller receives notice of the same, (A) any Mortgage Loan submitted for inclusion into an Agency Security and rejected by that Agency for inclusion in such Agency Security or (B) any Mortgage Loan submitted to a Takeout Buyer (whole loan or securitization) and rejected for purchase by such Takeout Buyer.
(v)Disposition; Liens. Except as contemplated or permitted by this Agreement, the Seller shall not cause any Mortgage Pool to be sold, pledged, assigned or transferred; nor shall the Seller create, incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other encumbrance of any nature whatsoever on any Mortgage Pool, whether real, personal or mixed, now or hereafter owned, other than Liens in favor of the Purchaser;
(vi)Financial Statements and Other Reports. Seller shall deliver or cause to be delivered to Purchaser:
(A)as soon as available and in any event not later than [***] after the end of each calendar month, consolidated statements of income and retained earnings of Seller and Seller’s Subsidiaries for the immediately preceding month, and related consolidated balance sheet as of the end of the immediately preceding month, all in reasonable detail, prepared in accordance with GAAP applied on a consistent basis, and certified as to the fairness of presentation by the chief financial officer, chief accounting officer or controller of Seller, excluding, however, normal year-end audit adjustments;
(B)as soon as available and in any event not later than [***] after Seller’s fiscal year end, consolidated statements of income, retained earnings and cash flows of Seller and Seller’s Subsidiaries for the preceding fiscal year, the related consolidated balance sheet as of the end of such year, all in reasonable detail, prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, and accompanied by an opinion (without a “going concern” or like qualification, commentary or exception and without any qualification or exception as to the scope of such audit) prepared by Ernst & Young, another accounting firm reasonably satisfactory to Purchaser or other independent certified public accountants of nationally recognized standing selected by Seller, each stating that said financial statements fairly present in all material respects the financial condition, cash flows and results of operations of Seller and Seller’s Subsidiaries as of the end of, and for, such year;
(C)simultaneously with the furnishing of each of the financial statements to be delivered pursuant to subsections (A) and (B) above, a certificate in the form of Exhibit C to the Master Repurchase Agreement and certified by the chief financial officer, chief accounting officer or controller of the Seller; provided that delivery of such certificate under the Master Repurchase Agreement
shall satisfy delivery under this Agreement so long as the Master Repurchase Agreement is in full force and effect;
(D)photocopies or electronic copies of any Form S-1 and all regular or periodic financial and other reports, if any, that Seller shall file with the SEC (other than routine corporate or organizational filings), not later than [***] after filing;
(E)photocopies or electronic copies of any audits completed by any Agency of Seller, any Subsidiary of Seller, unless such disclosure is prohibited by such Agency, not later than [***] after receiving such audit;
(F)with reasonable promptness following Purchaser’s request for them, photocopies or electronic copies of any regular or periodic financial and other reports (other than routine tax and corporate or organizational filings) that Seller shall have filed with any Governmental Authority other than the SEC;
(G)as soon as available and in any event not later than [***] after the fiscal year end, statements of income, retained earnings and cash flows of each Subsidiary of Seller for the preceding fiscal year and the related balance sheet as of the end of such year, all in reasonable detail and each of which may be prepared by the Seller or such Subsidiary;
(H)Seller will furnish to Purchaser monthly [***];
(I)Seller will furnish a monthly mortgage loan production report reflecting the Seller’s monthly mortgage loan production and acquisition volumes, as well as its mortgage loan pipeline; and
(J)promptly, from time to time, such other information regarding the business affairs, operations and financial condition of the Seller, as the Purchaser may reasonably request.
(vii)Inspection of Properties and Books. Seller shall permit authorized representatives of Purchaser to (i) discuss the business, operations, assets and financial condition of Seller and Seller’s Subsidiaries with their officers and designated employees and to examine their books of account, records, reports and other papers and make copies or extracts thereof, (ii) inspect Seller’s Mortgage Files and Servicing Files relating to Mortgage Loans that are subject to Participation Certificates and all related information and reports, and (iii) audit Seller’s operations to ensure compliance with the terms of the Program Documents, the GLB Act and other privacy laws and regulations, all at such reasonable times as Purchaser may request. Unless a Potential Servicing Termination Event or a Servicing Termination Event has occurred and is continuing (in which event Purchaser shall have no obligation whatsoever to give Seller advance notice), Purchaser will give Seller reasonable advance notice of each such audit, inspection or visit. Seller shall reimburse Purchaser for out-of-pocket expenses reasonably incurred in connection
with only one such audit, inspection or visit during any twelve (12) month period, and for out-of-pocket expenses reasonably incurred in connection with each such audit, inspection or visit, if any, undertaken when a Potential Servicing Termination Event or a Servicing Termination Event exists. Seller will provide its accountants with a photocopy of this Agreement promptly after Purchaser notifies Seller that Purchaser wishes to discuss the financial condition or affairs of Seller and Seller’s Subsidiaries with such accountants and will instruct its accountants to answer candidly any and all questions that the officers of Purchaser or any authorized representatives of Purchaser may address to them in reference to the financial condition or affairs of Seller and Seller’s Subsidiaries. Seller may have its representatives in attendance at any meetings between the officers or other representatives of Purchaser and Seller’s accountants held in accordance with this authorization.
(viii)Reimbursement of Expenses. On the date of execution of this Agreement, the Seller shall reimburse the Purchaser for all Expenses incurred by the Purchaser on or prior to such date. From and after such date, the Seller shall promptly reimburse the Purchaser for all Expenses within [***] of the receipt of invoices therefor.
(ix)Further Assurances. Seller agrees to do such further acts and things and to execute and deliver to Purchaser such additional assignments, acknowledgments, agreements, powers and instruments as are reasonably required by Purchaser to carry into effect the intent and purposes of this Agreement and the other Program Documents, to perfect the interests of Purchaser in the Collateral or to better assure and confirm unto Purchaser its rights, powers and remedies hereunder and thereunder.
(x)True and Correct Information. All information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of Seller to Purchaser in connection with the negotiation, preparation or delivery of this Agreement and the other Program Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not and shall 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.
(xi)Reserved.
(xii)Financial Condition Covenants. The Seller shall comply with the financial condition covenants set forth in the Master Repurchase Agreement, which such financial condition covenants shall be incorporated by reference herein mutatis mutandis, and such financial condition covenants shall continue to bind Seller hereunder in the event that the Master Repurchase Agreement is terminated.
(xiii)Insurance. Seller shall maintain at no cost to Purchaser (a) errors and omissions insurance or mortgage impairment insurance and blanket bond coverage, with such companies and in such amounts as to satisfy the requirements of prevailing Agency Guides applicable to a qualified mortgage originating institution, and shall cause Seller’s
policy to be endorsed with the Blanket Bond Required Endorsement and (b) liability insurance and fire and other hazard insurance on its properties, with responsible insurance companies, in such amounts and against such risks as is customarily carried by similar businesses operating in the same vicinity. Photocopies of such policies shall be furnished to Purchaser at no cost to Purchaser upon Seller’s obtaining such coverage or any renewal of or modification to such coverage.
(xiv)Reserved.
(xv)Reserved.
(xvi)Reserved.
(xvii)Limits on Distributions. Other than Permitted Tax Distributions or stock dividends, both of which are unrestricted and may be declared, made or paid at any time, Seller shall not declare, make or pay, or incur any liability to declare, make or pay, any dividend or distribution, direct or indirect, on or on account of any shares of its stock (or equivalent equity interest) or any redemption or other acquisition, direct or indirect, of any shares of its stock (or equivalent equity interest) or of any warrants, rights or other options to purchase any shares of its stock (or equivalent equity interest), nor purchase, acquire, redeem or retire any stock (or equivalent equity interest) in itself, whether now or hereafter outstanding, without the prior written consent of Purchaser, [***], shall have occurred and be continuing, in which case, Purchaser’s consent may be granted or withheld in Purchaser’s sole discretion.
(xviii)Disposition of Assets; Liens. Seller shall (i) cause any of the Mortgage Loans or Participation Certificates to be sold, pledged, assigned or transferred except in compliance with the applicable Program 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 Mortgage Loans or Participation Certificates, whether real, personal, or mixed, now or hereafter owned, other than Liens in favor of Buyer.
(xix)Transactions with Affiliates. Seller will not enter into any transaction, including any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (a) not prohibited under this Agreement and (b) in the ordinary course of Seller’s business and upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate; provided that this Section 10(a)(xix) shall not prohibit any Subsidiary of Seller from making any dividend or distribution to Seller or Seller from making any dividend or distribution permitted under Section 10(xvii).
(xx)Mergers, Acquisitions, Subsidiaries. Without the prior written consent of Purchaser, Seller will not consolidate or merge with or into any entity (unless Seller is the surviving entity and any of Seller’s Subsidiaries may merge with or into Seller). Seller shall not create, form or acquire any Subsidiary not listed in the Pricing Side Letter,
unless (i) such Subsidiary engages only in the loan origination, loan servicing, loan escrow or settlement business or a closely related business or a business incidental to the foregoing and (ii) Seller has given Purchaser notice of such creation, formation or acquisition as and when required under Section 10(a)(iv)(C) of this Agreement.
(xxi)Reserved.
(xxii)Agency Approvals; Servicing. The Seller shall maintain its Agency Approvals. Should the Seller, for any reason, cease to possess all such applicable Agency Approvals to the extent necessary, the Seller shall so notify Purchaser promptly in writing.
(xxiii)Reserved.
(xxiv)Takeout Commitment. On a timely basis, as required by the Good Delivery standards, Seller shall deliver to Purchaser all pool information relating to each Agency Security referred to in a Takeout Commitment that has been assigned to Purchaser.
(xxv)Reserved.
(xxvi)Treatment as Sale. Under GAAP and for federal income tax purposes, Seller will report each sale of a Participation Certificate to Purchaser as a sale of the ownership interest in the Mortgage Loans evidenced by the Participation Certificate. It is understood that, in making an independent decision to enter into the Transactions contemplated hereby, Seller has obtained such independent legal, tax, financial, regulatory and accounting advice as it deems necessary in order to determine the effect of any Transaction on Seller, including but not limited to the accounting treatment of such Transaction. It is further understood that Purchaser has not provided, and Seller has not relied on Purchaser for, any legal, tax, financial, regulatory or accounting advice in connection with entering into any Transaction. It is further understood that Purchaser makes no representation or warranty as to the accuracy or appropriateness of any determination by Seller and its independent legal, tax, financial, regulatory and accounting advisers with respect to the effect of any Transaction on Seller.
(xxvii)Cooperation. Seller shall, upon request of Purchaser, promptly execute and deliver to Purchaser all such other and further documents and instruments of transfer, conveyance and assignment, and shall take such other action Purchaser may require more effectively to transfer, convey, assign to and vest in Purchaser and to put Purchaser in possession of the property to be transferred, conveyed, assigned and delivered hereunder and otherwise to carry out more effectively the intent of the provisions under this Agreement.
(xxviii)Delivery of Mortgage Loans. Seller shall deliver Mortgage Loans in sufficient quantity and Outstanding Principal Balance to enable Purchaser to consummate the sale or swap as contemplated under the related Takeout Commitment. Should Seller
fail to deliver Mortgage Loans in sufficient quantity and Outstanding Principal Balance, Seller shall indemnify Purchaser for any and all losses sustained by Purchaser arising out of the related Takeout Commitment.
(xxix)MERS. Seller will remain a member of MERS in good standing. Seller has listed Purchaser in “interim funder” field on the MERS System with respect to each Mortgage Loan and no other Person shall be identified in the field designated “interim funder”.
Section 11.Term.
(a)This Agreement shall continue in effect until the earliest of (i) the Business Day, if any, that Seller designates as the termination date by written notice given to the Purchaser at least thirty (30) days before such date, (ii) the Business Day, if any, that Purchaser designates as the termination date by written notice given to Seller at least [***] before such date, (iii) September 26, 2025 and (iv) at Purchaser’s option, upon the occurrence of a Servicing Termination Event; provided, however, that no termination will affect the obligations hereunder as to any Transaction then outstanding. A Transaction shall be deemed “outstanding” (each, an “Outstanding Transaction”) during the period commencing on the effective date of such Transaction and continuing until the later of (i) the date of the expiration (or early termination) of the relevant Interim Servicing Period and (as applicable) the effective transfer of Servicing Rights to a Designated Servicer or (ii) the expiration of the time period for the exercise of Purchaser’s rights and remedies pursuant to subclause (v) of the definition of “Transaction”. Notwithstanding the foregoing or any other provision of this Agreement, Seller’s liability for Purchaser’s claims for damages hereunder and liability for Seller’s indemnities, representations and warranties contained herein shall survive any termination of this Agreement.
(b)Upon the occurrence and continuance of a Servicing Termination Event or an Event of Default (as defined in the Master Repurchase Agreement), Purchaser may terminate this Agreement.
Section 12.Exclusive Benefit of Parties; Assignment.
This Agreement is for the exclusive benefit of the parties hereto and their respective successors and permitted assigns and (except as provided in the next sentence) shall not be deemed to give any legal or equitable right to any other person. Seller expressly agrees that Purchaser (or any of its permitted assigns) and any Designated Servicer shall be intended third party beneficiaries under this Agreement. Except as expressly provided herein, this Agreement may not be assigned by Seller or duties hereunder delegated without the prior written consent of Purchaser. This Agreement may not be assigned by Purchaser without the prior written consent of Seller, unless (i) such assignment is to an Affiliate of Purchaser, or (ii) a Potential Servicing Termination Event or a Service Termination Event has occurred and is continuing.
Section 13.Amendment; Waivers.
This Agreement may be amended from time to time only by written agreement of Seller and Purchaser. Any forbearance, failure, or delay by Purchaser in exercising any right, power or remedy hereunder shall not be deemed to be a waiver thereof, and any single or partial exercise by Purchaser of any right, power or remedy hereunder shall not preclude the further exercise thereof. Every right, power and remedy of Purchaser shall continue in full force and effect until specifically waived by Purchaser in writing.
Section 14.Effect of Invalidity of Provisions.
In case any one or more of the provisions contained in this Agreement should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.
Section 15.Governing Law; Waiver of Jury Trial.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, which is the place of the making of this Agreement, without regard to conflict of laws rules (other than Section 5-1401 of the New York General Obligations Law). EACH OF SELLER AND PURCHASER HEREBY:
SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
CONSENTS THAT ANY SUCH ACTION OR PROCEEDING (INCLUDING ANY BROUGHT AGAINST ANY SUBSERVICER) 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;
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 ON SCHEDULE 1 HERETO OR AT SUCH OTHER ADDRESS OF WHICH EACH OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED IN WRITING; PROVIDED THAT, AT THE TIME OF SUCH MAILING AN ELECTRONIC COPY OF SUCH SERVICE OF PROCESS IS ALSO SENT BY ELECTRONIC MAIL TO THE PERSONS SPECIFIED IN THE ADDRESS FOR NOTICES FOR SUCH PARTY ON SCHEDULE I HERETO
(OR SUCH OTHER PERSONS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED);
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
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PROGRAM DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 16.Notices.
Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by electronic mail) delivered to the intended recipient at the “Address for Notices” specified below its name on Schedule 1 hereto); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Except as otherwise provided in this Agreement all such communications shall be deemed to have been duly given when transmitted by email 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 17.Execution in Counterparts.
This Agreement 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. Counterparts may be delivered electronically. Facsimile, documents executed, scanned, and transmitted electronically and electronic signatures shall be deemed original signatures for purposes of this Agreement and all matters related thereto, with such facsimile, scanned and electronic signatures having the same legal effect as original signatures. 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 Electronic Signatures in Global and National Commerce Act, Title 15, United States Code, Sections 7001 et seq., the Uniform Electronic Transaction Act, and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish
a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.
Section 18.Confidentiality.
(a)Confidential Terms. The parties hereto hereby acknowledge and agree that all written or computer-readable information provided by one party to any other regarding the terms set forth in any of the Program Documents or the Transactions contemplated thereby (the “Confidential Terms”) shall be kept confidential and shall not be divulged to any Person without the prior written consent of such other party except to the extent that (i) such Person is an Affiliate, Subsidiary, division or parent holding company of a party or a director, officer, employee or agent (including an accountant, legal counsel and other advisor) of a party or such Affiliate, division or parent holding company, provided such recipients are advised of the confidential nature of the Confidential Terms, (ii) in such party’s opinion, it is necessary to do so in working with legal counsel or auditors (provided such recipients are advised of the confidential nature of the Confidential Terms), taxing authorities or other governmental agencies or regulatory bodies (including any self-regulatory authority, such as the National Association of Insurance Commissioners) or in order to comply with any applicable federal or state laws or regulations, (iii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, (iv) in the event of a Potential Servicing Termination Event or a Servicing Termination Event, Purchaser reasonably determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Mortgage Loans and Participation Certificates or otherwise to enforce or exercise Purchaser’s rights hereunder, (v) to the extent Purchaser deems it necessary or appropriate to disclose it to Custodian or in connection with an assignment or participation under Section 12 or in connection with any hedging transaction related to Mortgage Loans, provided such recipients are advised of the confidential nature of the Confidential Terms, or (vi) Seller may make disclosures related to this Agreement and the other Program Documents as required by the SEC or any federal or state securities laws and Seller may make disclosures related to this Agreement and the other Program Documents to describe to its creditors the facilities provided under the Program Documents so long as pricing information (including the Discount Rate), fees and financial covenant terms related to the Program Documents are given without linking or relating them to Purchaser and in a range which describes such terms for all of Seller’s warehouse facilities generally. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Document, the parties hereto may disclose to any and all Persons, without limitation of any kind, the U.S. federal, state and local tax treatment of the Transactions, any fact that may be relevant to understanding the U.S. federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such U.S. federal, state and local tax treatment and that may be relevant to understanding such tax treatment, and the parties hereto may disclose information pertaining to this Agreement routinely provided by arrangers to league table providers, that serve the financing industry; provided that Seller may not disclose (except as provided in clauses (i), (ii), (iii) or (vi) of this Section 18(a)) the name of or identifying information with respect to Purchaser or any pricing terms (including the Discount
Rate or other fee) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the U.S. federal, state and local tax treatment of the Transactions and is not relevant to understanding the U.S. federal, state and local tax treatment of the Transactions, without the prior written consent of Purchaser. Any Person required to maintain the confidentiality of Confidential Terms as provided in this Section 18(a) shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Confidential Terms as such Person would accord to its own confidential information. The provisions set forth in this Section 18(a) shall survive the termination of this Agreement for a period of one (1) year following such termination.
(b)Privacy of Customer Information.
(i)Seller’s Customer Information in the possession of Purchaser, other than information independently obtained by Purchaser and not derived in any manner from or using information obtained under or in connection with this Agreement, is and shall remain confidential and proprietary information of Seller. Except in accordance with this Section18(b), Purchaser shall not use any Seller’s Customer Information for any purpose, including the marketing of products or services to, or the solicitation of business from, customers, or disclose any Seller’s Customer Information to any Person, including any of Purchaser’s employees, agents or contractors or any third party not affiliated with Purchaser. Purchaser may use or disclose Seller’s Customer Information only to the extent necessary (1) for examination and audit of Purchaser’s activities, books and records by Purchaser’s regulatory authorities, (2) to protect or exercise Purchaser’s rights and privileges or (3) to carry out Purchaser’s express obligations under this Agreement and the other Program Documents (including providing Seller’s Customer Information to Takeout Buyers), and for no other purpose; provided that Purchaser may also use and disclose Seller’s Customer Information as expressly permitted by Seller in writing, to the extent that such express permission is in accordance with the Privacy Requirements. Purchaser shall take commercially reasonable steps to ensure that each Person to which Purchaser intends to disclose Seller’s Customer Information, before any such disclosure of information, agrees to keep confidential any such Seller’s Customer Information and to use or disclose such Seller’s Customer Information only to the extent necessary to protect or exercise Purchaser’s rights and privileges, or to carry out Purchaser’s express obligations, under this Agreement and the other Program Documents (including providing Seller’s Customer Information to Takeout Buyers). Purchaser agrees to maintain an information security program and to assess, manage and control risks relating to the security and confidentiality of Seller’s Customer Information pursuant to such program in the same manner as Purchaser does in respect of its own customers’ information, and shall implement the standards relating to such risks in the manner set forth in the Interagency Guidelines Establishing Standards for Safeguarding Company Customer Information set forth in 12 CFR Parts 30, 168, 170, 208, 211, 225, 263, 308 and 364. Without limiting the scope of the foregoing sentence, Purchaser shall use at least the same physical and other security measures to protect all of Seller’s Customer
Information in its possession or control as it uses for its own customers’ confidential and proprietary information.
(ii)Seller shall indemnify Purchaser’s Affiliates and Subsidiaries and their respective directors, officers, agents, advisors and employees (each an “Indemnified Party”) against, and hold each of them harmless from, any losses, liabilities, damages, claims, costs and expenses (including reasonable attorneys’ fees and disbursements) suffered or incurred by any Indemnified Party relating to or arising out of Seller’s loss, improper disclosure or misuse of any Seller’s Customer Information not caused by Purchaser’s sole or concurrent gross negligence or willful misconduct.
Section 19.Acknowledgments.
Seller hereby acknowledges that:
(a)it has been advised by counsel in the negotiation, execution and delivery of the Program Documents;
(b)Seller has no fiduciary relationship to Purchaser, and the relationship between Seller and Purchaser is solely that of seller and purchaser; and
(c)no joint venture exists between Seller and Purchaser.
Section 20.Authorizations. Any of the persons whose signatures and titles appear on Schedule 1 are authorized, acting singly, to act for Seller or Purchaser, as the case may be, under this Agreement.
Section 21.Set-Off. In addition to any rights and remedies of Purchaser hereunder and by law, Purchaser shall have the right, upon any amount becoming due and payable by the Seller hereunder (whether at the stated maturity, by acceleration or otherwise) and provided that a Servicing Termination Event has occurred and is continuing, 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 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 Purchaser or any Affiliate thereof to or for the credit or the account of the Seller. Purchaser shall notify Seller promptly of any such setoff and application made by Purchaser; provided that the failure to give such notice shall not affect the validity of such set off and application or give any rise to any liability of Purchaser.
Section 22.Amendment and Restatement. The parties hereto entered into the Existing Agreement. The parties hereto desire to enter into this Agreement in order to amend and restate the Existing Agreement in its entirety. The amendment and restatement of the Existing Agreement shall become effective on the date hereof, and the parties hereto shall hereafter be bound by the terms and conditions of this Agreement. This Agreement amends and restates the terms and conditions of the Existing Agreement, and is not a novation of any of the agreements or obligations incurred pursuant to the terms of the Existing Agreement.
Accordingly, all of the agreements and obligations incurred pursuant to the terms of the Existing Agreement are hereby ratified and affirmed by the parties hereto and remain in full force and effect. All references to the Existing Agreement in any Program Document or other document or instrument delivered in connection therewith shall be, without more, deemed to refer to this Agreement and the provisions hereof. The terms and provisions of the existing Agreement are hereby amended and restated in their entirety by the terms and provisions of this Agreement, and the provisions of this Agreement shall supersede all provisions of the Existing Agreement as of the date hereof.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, Purchaser and Seller have duly executed this Agreement as of the date first above written.
LOANDEPOT.COM, LLC, as Seller
By:
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Purchaser
By:
Name:
Title:
SCHEDULE 1
[***]
Signature Page to Amended and Restated Mortgage Loan Participation Sale Agreement
LEGAL02/44901976v2
Schedule 1
LEGAL02/44901976v2
EXHIBIT A[***]
Exhibit A-2
LEGAL02/44901976v2
EXHIBIT B
[***]
Exhibit B
LEGAL02/44901976v2
EXHIBIT C
[***]
Exhibit C
LEGAL02/44901976v2
EXHIBIT D
[***]
Exhibit D
LEGAL02/44901976v2
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- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
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na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
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