_________________________ ASSET PURCHASE AGREEMENT _________________________ among

 

SECTION 3.10. Compliance with Laws.

 

SECTION 3.11. Environmental Matters.

 

SECTION 3.12. Specified Contracts; Defaults.

 

(c)           To the Knowledge of the Sellers, no other party to any Assumed Contract is in material breach thereof or default thereunder, and there are no material disputes pending or threatened under any Assumed Contract. The Sellers have not received any written notice of termination, cancellation, breach or default under any Assumed Contract. The Sellers have made available to the Purchaser true and complete copies of all Assumed Contracts.

 

(a)           Section 3.13(a) of the Disclosure Schedule lists: (i) the street address of each parcel of Leased Real Property, (ii) the identity of the lessor, lessee and current occupant (if different from lessee) of each such parcel of Leased Real Property, and (iii) the rental payment amounts (including all escalations) pertaining to each such parcel of Leased Real Property.

 

(b)          To the Knowledge of the Sellers, no improvements on the Leased Real Property and none of the current uses and conditions thereof violate in any material respect any Encumbrance, applicable deed restrictions or other applicable covenants, restrictions, agreements, existing site plan approvals, zoning or subdivision regulations or urban redevelopment plans as modified by any duly issued variances, and, to the Knowledge of the Sellers, there does not exist any condition at the Leased Real Property which has had or could reasonably be expected to have a Material Adverse Effect. To the Knowledge of the Sellers, no Permits pertaining to the ownership or operation of all improvements on the Leased Real Property, other than those which are transferable with the Leased Real Propert y, are required by any Governmental Authority having jurisdiction over the Leased Real Property.

 

 

(c)           All rent and other amounts due and payable pursuant to any lease relating to the Leased Real Property (the “Real Property Leases”) have been paid through the Closing Date.

 

(d)           To the Knowledge of the Sellers, no other party to any Real Property Lease and any and all ancillary documents related thereto is in breach thereof or default thereunder, and there are no material disputes pending or threatened under any Real Property Lease. The Sellers have not received any written notice of termination, cancellation, breach or default under any Real Property Lease. The Sellers have made available to the Purchaser true and complete copies of all Real Property Leases. The Real Property Leases are listed in Section 3.13(d) of the Disclosure Schedule.

 

(a)           Disclosure. Section 3.14(a)(i) of the Disclosure Schedule sets forth a true and complete list of all registered Copyrights, registered Trademarks and issued Patents, and all applications for any of the foregoing, that constitute Transferred Intellectual Property, and Section 3.14(a)(ii) of the Disclosure Schedule sets forth a description of the Transferred IT Platform.

 

(b)           Title. A Seller is the exclusive owner of the Transferred Intellectual Property, which ownership is free and clear of Encumbrances other than (i) Permitted Encumbrances and (ii) licenses, agreements, settlements, consents, covenants not to assert and other arrangements entered into in the ordinary course of business that do not materially adversely affect the ownership of the Transferred Intellectual Property.

 

(c)           No Claims.

 

(i)           Since June 30, 2007, no unresolved claim has been asserted in writing, in each case, against either of the Sellers concerning any material claim that the Business (as it relates to the Transferred Intellectual Property) infringes, misappropriates or otherwise violates the Intellectual Property rights of any other Person.

 

(ii)           To the Knowledge of the Sellers, no Person is infringing, misappropriating or otherwise violating any Sellers’ rights in the Transferred Intellectual Property. To the Knowledge of the Sellers, the Business (as it relates to the Transferred Intellectual Property) is not currently infringing, misappropriating or otherwise violating the Intellectual Property rights of any other Person.

 

(iii)          To the Knowledge of the Sellers, the Sellers have the right and license to use, copy, modify and distribute the third-party programming and materials contained in the Transferred IT Platform. Since June 30, 2007, the Sellers have not received any written notices of any infringement or misappropriation by any third party licensor with respect to any of the Transferred IT Platform. The Sellers have corporate authority necessary to convey to the Purchaser in accordance with the terms under this Agreement the rights granted to either Seller (as applicable) under any license or assignment included in the Transferred IT Platform set forth in Section 3.14(c)(iii) of the Disclosure Schedule.

 

 

(d)           Trade Secrets. With respect to Trade Secrets that are Transferred Intellectual Property:

 

(i)           the Sellers have taken reasonable measures to protect the secrecy, confidentiality and value of such Trade Secrets;

 

(ii)          to the Knowledge of the Sellers, such Trade Secrets have not been used by, disclosed to or discovered by any Person except pursuant to valid and appropriate non-disclosure and/or license agreements, which have not been breached; and

 

(iii)         to the Knowledge of the Sellers, there has been no misappropriation of any Trade Secret by any Person.

 

(a)           Each Servicer Advance made by any Seller was made in accordance with Applicable Requirements in all material respects, is a valid and subsisting amount owing to a Seller, and is not subject to any set-off or claim that could be asserted against the Purchaser. No Servicer Advance made by the Sellers or any Prior Servicer under a Servicing Agreement on or before the Closing and not reimbursed or paid to the Sellers prior to the Closing is a Non-Qualified Servicer Advance Receivable. None of the Sellers has received any written notice from an Investor, Insurer or other party in which the Investor, Insurer or other party disputes or denies a claim by a Seller for reimbursement in connection with a Servicer Advance, except, in any such case, as described in Section 3.15(a ) of the Disclosure Schedule.

 

(b)           Each material Acquired Accounts Receivable is a valid and subsisting amount owing to the Sellers, is carried on the books of the Sellers at values determined in accordance with Agreed Upon Procedures and is not subject to any set-off or claim that could be asserted against the Purchaser, and the Sellers have not received any written notice from an Investor, Insurer or other party in which the Investor, Insurer or other party disputes or denies a claim by the Sellers for reimbursement in connection with an Acquired Accounts Receivable, except as set forth in Section 3.15(b) of the Disclosure Schedule.

 

(a)           Section 3.17(a) of the Disclosure Schedule lists, and the Sellers have previously made available to the Purchaser in the electronic data room with respect to the transactions contemplated by this Agreement, either (i) a summary plan description and, as applicable, summaries of material modifications with respect to or (ii) a plan level summary which describes the types of benefits provided under, all Employee Benefit Plans to which either of the Sellers is a party, with respect to which either of the Sellers has any obligation or which are maintained, contributed to or sponsored by either of the Sellers, or with respect to which either of the Sellers otherwise has any Liability or reasonable expectation of Liability, in each case for the benefit of any of the Prospec tive Employees (collectively, the “Plans”). The Sellers have furnished to the Purchaser the most recently received IRS determination letter for the Barclays Bank PLC Thrift Savings Plan (“Sellers’ 401(k) Plan”) that is intended to be qualified under Section 401(a) of the Code and in which the Prospective Employees may participate, and to the Knowledge of the Sellers there are no existing circumstances and no events have occurred that would be reasonably expected to cause a revocation of such favorable determination.

 

(b)           Each Plan (and each related trust, insurance contract or fund) has been maintained, funded and administered in accordance in all material respects with the terms of such Plan and complies in form and in operation in all material respects with the applicable requirements of applicable Law, including ERISA and the Code.

 

(c)           Except as set forth in Section 3.17(c)(i) of the Disclosure Schedule, no Plan is, and the Sellers do not maintain, contribute to, have any obligation to contribute to or otherwise have any other Liability with respect to (i) an “employee pension benefit plan” (as defined in Section 3(2) of ERISA) that is subject to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, (ii) a multiple-employer plan (within the meaning of Section 413(c) of the Code), or (iii) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) (a “Multiemployer Plan”) and the Assumed Liabilities do not include any actual or potential liabilities under Section 4201 of ER ISA for any complete or partial withdrawal from a Multiemployer Plan. Except as set forth in Section 3.17(c)(ii) of the Disclosure Schedule, none of the Plans provide for or promise retiree medical, disability or life insurance benefits to any Prospective Employee.

 

(d)           Except as set forth in Section 3.17(d) of the Disclosure Schedule, there are no employment, severance, change of control, retention or guaranteed bonus contracts or arrangements of any nature, collective bargaining agreements or employee plans of the Sellers (including the Plans), which by their terms or by operation of Law will be binding on the Purchaser at any time prior to or after the Closing.

 

(e)           Except as set forth in Section 3.17(e) of the Disclosure Schedule, neither the execution of this Agreement or any Ancillary Agreement nor the consummation of the transactions contemplated hereby or thereby will (i) entitle any current or former employees, officers or directors of either of the Sellers who perform or performed services for the Business to severance pay or any increase in severance pay upon any termination of employment after the date of this Agreement, or (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other material obligation pursuant to, any of the Plans. None of the Plans in effect immediately pri or to the Closing would result separately or in the aggregate (including as a result of this Agreement or the transactions contemplated hereby) in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code.

 

 

(a)           (i) None of the Sellers is a party to any collective bargaining agreement or other labor union contract applicable to Persons employed by either of the Sellers who perform or performed services for the Business; (ii) neither Seller is currently (nor has been during the past three years) in the process of negotiating or bound by any collective bargaining agreement or relationship with any labor organization applicable to Persons employed by either of the Sellers who perform or performed services for the Business, and to the Knowledge of the Sellers, there are no organizational campaigns or pending petitions of any labor organization or group of employees that have sought at any time or are currently seeking recognition of a collective bargaining unit applicable to Per sons employed by either of the Sellers who perform or performed services for the Business; (iii) there are no pending (and during the past three years have not been any) or, to the Knowledge of the Sellers, threatened strikes, slowdowns, lockouts, walkouts, labor picketing, work stoppages or other concerted labor disputes between either of the Sellers, on the one hand, and any of their respective employees, on the other hand, who perform services for the Business; (iv) there are no material unfair labor practice complaints pending against either of the Sellers before the National Labor Relations Board or any other Governmental Authority involving employees of either of the Sellers who perform or performed services for the Business; and (v) except as set forth in Section 3.18(a)(v) of the Disclosure Schedule, each Seller is currently in compliance in all material respects with all applicable Laws relating to the employment or labor with respect to the Prospective Employees, including Laws relating to terms an d conditions of employment, discrimination, retaliation, leaves of absence, workers’ compensation, employee safety and health, collective bargaining, immigration, and wages and hours and income tax.

 

(b)           Section 3.18(b) of the Disclosure Schedule lists all of the Sellers’ workers’ compensation Liabilities, experiences and matters and the corresponding amounts with respect to such workers’ compensation liabilities, experiences and matters with respect to the Business since January 1, 2008.

 

(c)           With respect to the transactions contemplated by this Agreement, any notice required under the National Labor Relations Act of 1935 or any collective bargaining agreement has been given by the Sellers and all bargaining obligations with any employee representative have been, or prior to the Closing Date will be, satisfied.

 

(a)           A true and complete copy of the March 31 Data Tape has been delivered to the Purchaser. All the information included in the March 31 Data Tape is, and in the Monthly Data Tapes will be, true and correct in all material respects as of March 31, 2010 or, with respect to any Monthly Data Tape, as of the applicable month-end date to which such Monthly Data Tape relates, except for the P&I Advances (as defined in the applicable Servicing Agreement or any other similar term therein) data presented in the March 31 Data Tape and each Monthly Data Tape, which will be current for each Servicing Agreement as of the most recent investor reporting monthly cut-off date for each such Servicing Agreement. All the information included in the Closing Data Tape will be true and cor rect in all material respects as of the Closing Date.

 

(b)           The Sellers shall deliver at the Closing an updated data tape, as of not more than four Business Days prior to the Closing (the “Closing Data Tape”), with respect to each Mortgage Loan that is a part of the Servicing Interests as of the Closing Date containing the information of the same categories and same format as the month-end servicing tape provided to the Purchaser in the March 31 Data Tape, except for the P&I Advances (as defined in the applicable Servicing Agreement or any other similar term therein) data presented in the Closing Data Tape, which will be current for each Servicing Agreement as of the most recent investo r reporting monthly cut-off date for each such Servicing Agreement.

 

(c)           The March 31 Data Tape, the Closing Data Tape and the Data Base, as applicable, set forth certain information about each Mortgage Loan, including the Servicing Fees, loan amount, interest rate, loan type and date of inclusion of such Mortgage Loan in the related Servicing Agreement, as of the last day of the applicable Due Period ending immediately prior to the date thereof.

 

(a)           Section 3.21(a) of the Disclosure Schedule contains a list of all Servicing Agreements and all amendments and modifications thereof, or supplements thereto. There are no written agreements that modify, supplement or amend the terms of any such Servicing Agreement or Underlying Document, other than the SPA or as disclosed in Section 3.21(a) of the Disclosure Schedule. There are no oral agreements that modify, supplement or amend the terms of any such Servicing Agreement or Underlying Document, other than as disclosed in Section 3.21(a) of the Disclosure Schedule and such oral modifications, supplements or amendments that would not materially affect the rights of the Sellers under the related Servicing Agreement and Underlying Documents. Except as set forth on Section 3.21(a) of the Disclosure Schedule, the Sellers have delivered to the Purchaser, or have otherwise made available to the Purchaser in an electronic data room, prior to the date hereof true and complete execution copies of all Servicing Agreements and amendments thereto as listed on Section 3.21(a) of the Disclosure Schedule. Section 3.21(a) of the Disclosure Schedule includes: (i) the identity of the Servicer under such Servicing Agreement; (ii) an indication of whether the relevant Servicer is acting as subservicer, rather than the Servicer, under such Servicing Agreement; (iii) the outstanding amount of any Servicer Advances made by the relevant Servicer with respect to the Mortgage Loans under such Servicing Agreement as of April 30, 2010; and (iv) the other items contained in Section 3.21(a) of the Disclosure Schedule. All information contained in Section 3.21(a) of the Disclosure Schedule is complete and accurate in all material respects.

 

 

(b)           Except as set forth in Section 3.21(b) of the Disclosure Schedule: (i) the Sellers have not received written notice of any pending or threatened cancellation or partial termination of any Servicing Agreement; and (ii) all of the Servicing Agreements are “Facility Eligible Servicing Agreements,” as defined under the Servicing Advance Financing Agreements, subject to the limitations on eligibility and funding set forth in the definition of “Collateral Value” in the Servicing Advance Financing Agreements (other than clause (i) following the proviso to such definition). Each Servicing Agreement and each of the Underlying Documents is a valid and binding obligation of the applicable Seller, is in full force and is enforceable against such Seller in accordance with its terms.

 

(c)           Except as set forth in Section 3.21(c) of the Disclosure Schedule, none of the Servicing Agreements are agreements between any Seller, as Servicer, and FNMA, FHLMC or GNMA, as the Investor, owner of Mortgage Loans or guarantor of any securities. None of the Servicing Agreements require that the Servicer be an approved servicer of residential mortgage loans by GNMA.

 

(a)           Except as set forth in Section 3.22(a) of the Disclosure Schedule, since June 30, 2007, (i) there has been no servicer default, servicer termination event, portfolio trigger or other default or breach by the Sellers under any Servicing Agreement or any Underlying Document with respect to which the Sellers have received written notice, and (ii) no event has occurred, which with the passage of time or the giving of notice or both would: (A) constitute a material default or breach by the Sellers under any such Servicing Agreement, Underlying Document or under any Applicable Requirement; (B) other than any portfolio trigger default under any Servicing Agreement or any Underlying Document listed on Section 3.22(a)(ii)(B) of the Disclosure Schedule, permit termination, mod ification or amendment of any such Servicing Agreement or Underlying Document by a third party without the consent of the Sellers; (C) enable an Investor or other third party to demand that any Seller either incur any repurchase obligations pursuant to a Servicing Agreement or an Underlying Document or provide indemnification for any amount of losses; (D) impose on any Seller sanctions or penalties in respect of any Servicing Agreement or Underlying Document; or (E) rescind any insurance policy or reduce insurance benefits in respect of any Servicing Agreement or Underlying Document which would result in a material breach or trigger a default of any obligation of either of the Sellers under any Servicing Agreement or Underlying Document.

 

 

(b)           Section 3.22(b) of the Disclosure Schedule indicates, by code reference, which of the Mortgage Loans have been converted into REO Properties as of March 31, 2010.

 

(c)           Servicing Interests.

 

(i)           The Sellers own all right, title and interest in and to the Servicing Interests and the sole right to act as Servicer with respect to the related Mortgage Loans pursuant to and subject to the terms and conditions of the Servicing Agreements but free and clear of all Encumbrances, except for Permitted Encumbrances and the rights of subservicers disclosed in Section 3.22(c)(i) of the Disclosure Schedule;

 

(ii)           The Sellers are entitled to receive Servicing Fees and Ancillary Income as Servicer under each Servicing Agreement;

 

(iii)          Except as set forth in Section 3.22(c)(iii) of the Disclosure Schedule, none of the other parties to any of the Servicing Agreements or certificateholders have since June 30, 2007 provided written notice to any Seller that such party will terminate, modify or amend any of the Servicing Agreements or the applicable Seller’s benefits or the Servicing Interests under any of the Servicing Agreements;

 

(iv)         Except as set forth in Section 3.22(c)(iv) of the Disclosure Schedule, the applicable Seller has not engaged any subservicers, subcontractors or other agents to perform any of its duties under any of the Servicing Agreement, other than engagements that are permitted by, and in compliance in all material respects with the requirements of, the applicable Servicing Agreements, and all fees and expenses due and payable to any such subservicer, subcontractor or agent as of the Closing Date in connection therewith have been paid;

 

(v)           There are no agreements currently in place with any subservicers, subcontractors or other agents to perform any of Sellers’ duties under the Servicing Agreements that are not set forth in Section 3.12 of the Disclosure Schedule; and

 

(vi)         Except as set forth in Section 3.22(c)(vi) of the Disclosure Schedule, the Sellers are in compliance in all material respects with all Servicing Agreements or will have cured any such material non-compliance in all material respects with respect to such Servicing Agreements prior to the Closing Date.

 

(d)          Except as set forth in (i) Section 3.22(d) of the Disclosure Schedule or (ii) the 1122 and 1123 Servicer’s Assessments of Compliance provided pursuant to Regulation AB with respect to BCRE’s servicing platform, the Sellers are in compliance in all material respects with all Applicable Requirements. Each report and officer’s certification prepared by any Seller as servicer pursuant to a Servicing Agreement is true and correct in all material respects. The Sellers have previously made available to the Purchaser a correct and complete description of the Sellers’ written policies and procedures used by the Sellers in connection with servicing the Mortgage Loans.

 

 

(e)           Except as set forth in Section 3.22(e) of the Disclosure Schedule or as previously disclosed to the Purchaser prior to the date hereof in the Consumer Relations reports for 2008, 2009 and 2010 available through the Tumbleweed System since June 30, 2007, no Governmental Authority, Investor, Insurer, rating agency, trustee, master servicer or any other party to a Servicing Agreement has provided written notice to a Seller claiming or stating that a Seller has violated, breached or not complied with any Applicable Requirements in connection with the Servicing of the Mortgage Loans.

 

(f)           Except as set forth in Section 3.23(k) of the Disclosure Schedule, all of the Mortgage Loans are being serviced without Recourse to the Sellers under the Servicing Agreements.

 

(a)           All Custodial Accounts and Related Escrow Accounts are maintained in all material respects in accordance with Applicable Requirements. Except as to payments that are deposited in a clearing account for subsequent deposit into the applicable Custodial Account or Related Escrow Account within two Business Days, all Custodial Account and Related Escrow Account balances required by the Mortgage Loan Documents and paid to the Sellers for the account of the Mortgagor and the Sellers are on deposit in the appropriate Custodial Accounts.

 

(b)           Except as set forth in Section 3.23(b) of the Disclosure Schedule, all payments for Taxes, assessments, ground rents, mortgage insurance, hazard and flood insurance or other payments made from the Related Escrow Accounts have been made as required by Applicable Requirements in all material respects, and the Sellers have paid to the Mortgagor interest on any such payments deposited in the Related Escrow Accounts to the extent such payment is required by Applicable Requirements.

 

(c)           Except as set forth in Section 3.23(c) of the Disclosure Schedule, within the 12-month period prior to the date hereof, the Sellers have analyzed the payments required to be deposited into the Related Escrow Accounts and adjusted the payments thereto in order to eliminate any deficiency that the Sellers may have discovered, except with respect to Mortgage Loans received by the Sellers within the 12-month period prior to the date hereof. Where required by Applicable Requirements, the Sellers have notified each Mortgagor, in accordance with the Applicable Requirements, as to any payment adjustments which resulted from an escrow analysis.

 

(d)           Except as disclosed to the Purchaser on the March 31 Data Tape or in the Data Base and consistent with the Applicable Requirements or as set forth in Section 3.23(d) of the Disclosure Schedule, the Sellers have not waived any material default, breach, violation or event of acceleration, except for deferrals of interest, the modification of payment terms pursuant to a written loan modification or forbearance agreement, the waiver of fees incidental to the mitigation of losses on delinquent Mortgage Loans or as otherwise required under the SPA. To the extent that any such waiver is reflected in the March 31 Data Tape and the Data Base, the disclosure relating to such waiver is reflected consistently in all material respects in the March 31 Data Tape and the Data Base.< /font>

 

 

(e)           The Mortgage Loans are validly insured by a PMI Policy to the extent required by the applicable Servicing Agreement, except where the failure to be so insured is not the contractual, legal or financial responsibility of the Sellers or the Purchaser as the transferee Servicer under Applicable Requirements, and all premiums or other charges due in connection with such insurance have been paid, except where the failure to be so paid is not the contractual, legal or financial responsibility of the Sellers or the Purchaser as the transferee Servicer. There has been no act or omission by the Sellers that would or may invalidate any such PMI Policy with respect to the Purchaser.

 

(f)           If required by the Applicable Requirements, there is in force with respect to each Mortgaged Property a hazard insurance policy that provides, at a minimum, for fire and extended coverage in an amount which is in no event less than the amount required under such Applicable Requirements. Except as would not have a Material Adverse Effect, if required by the Flood Disaster Protection Act of 1973 or by the applicable Investor, each Mortgaged Property is and will be covered by a flood insurance policy in an amount not less than the maximum amount of insurance required under Applicable Requirements. To the Knowledge of the Sellers, all such insurance policies are in full force and effect, and all premiums with respect to such policies have been paid and will inure to the benefit of the Purchaser on behalf of the applicable Investor upon the consummation of the transactions contemplated by this Agreement. To the Knowledge of the Sellers, no Seller, Originator or Prior Servicer has engaged in any act or omission that would materially impair the coverage of any such policy, the benefits of the endorsement provided for therein, or the validity and binding effect of either for which the Servicer is responsible to the Investor under the Servicing Agreement or Underlying Documents or to any borrower.

 

(g)          The March 31 Data Tape, the Closing Data Tape, the Loan File, the Data Base and the Servicer’s rights under the applicable Servicing Agreement to obtain documents maintained by the applicable document custodian, contain all items, documents, instruments and agreements required to service the Mortgage Loans under the applicable Servicing Agreement, except to the extent that any missing item, document, instrument or agreement would not adversely affect the Purchaser’s ability to enforce the terms of the applicable Mortgage Loans following the Closing Date or the Purchaser’s ability to service the applicable Mortgage Loans following the Closing Date in accordance with the Applicable Requirements, prov ided, however, that the Sellers make no representation as to any trustee’s or document custodian’s compliance with its obligations under the applicable Servicing Agreements, or either of the Sellers’ or Originator’s obligation to transmit Mortgage Loan Documents to the applicable trustee or document custodian, except if the Servicer is responsible under the Servicing Agreement for either.

 

(h)           Payments received by the Sellers with respect to any Mortgage Loans have been remitted and properly accounted for as required by Applicable Requirements in all material respects. All funds received by the Sellers in connection with the satisfaction of Mortgage Loans, including foreclosure proceeds and insurance proceeds from hazard losses, have been deposited in the appropriate Custodial Account and all such funds have been applied to pay accrued interest on the Mortgage Loans, to reduce the principal balance of the Mortgage Loans in question, or for reimbursement of repairs to the Mortgaged Property or as otherwise required by Applicable Requirements and the Servicing Agreements or permitted by any Servicing Agreements or are and will be in one of the Custodial Acco unts on the Closing Date. Except as would not have a Material Adverse Effect, all Taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments, or ground rents which previously became due and owing have (to the extent either of the Sellers maintains a Related Escrow Account with respect thereto) been paid prior to the imposition of any penalty with respect thereto to the extent so required to be paid by the Sellers, as Servicer, pursuant to the Applicable Requirements, or an escrow of funds with respect to Taxes and insurance premiums has been established in an amount sufficient (based on the most recent escrow analysis thereof performed in accordance with the Applicable Requirements) to pay for such item which remains unpaid and which has been assessed but is not yet due and payable to the extent so required pursuant to the Applicable Requirements.

 

 

(i)           No Custodial Files for any Mortgage Loan, including with respect to any Mortgage Loan Document for which the Purchaser is responsible to the Investor, contains a material deficiency that would have an adverse effect on the Servicing of such Mortgage Loan in accordance with the Applicable Requirements and for which the Servicer is responsible under the applicable Servicing Agreement.

 

(j)           The Servicing of each Mortgage Loan and REO Property has been performed in all material respects in accordance with Applicable Requirements.

 

(k)           Except as set forth in Section 3.23(k) of the Disclosure Schedule, none of the Servicing Agreements constitutes a Recourse obligation to either of the Sellers, as Servicer.

 

(l)           No fraudulent action with respect to a Mortgage Loan has taken place on the part of either of the Sellers in connection with Servicing any Mortgage Loan. To the Knowledge of the Sellers, there has been no material fraudulent action on the part of any other Person (including any borrower, appraiser, builder or developer, credit reporting agency, settlement agent, realtor, broker or correspondent, Originator, or Prior Servicer) in connection with (i) the origination or Servicing of any Mortgage Loan or (ii) the application of any insurance proceeds with respect to a Mortgage Loan or the Mortgaged Property, in either case, for which any Seller, in its capacity as the Servicer, is responsible under the terms of the related Servicing Agreement to the applicable Investor o r Insurer.

 

(m)           To the Knowledge of the Sellers and to the extent that any Seller, in its capacity as Servicer, is responsible for such matters to the applicable Investor or Insurer under the terms of the related Servicing Agreement, each Mortgage Note and the related Mortgage is genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting generally the enforcement of creditor’s rights and the discretion of a court to grant specific performance. To the Knowledge of the Sellers and to the extent that any Seller, in its capacity as Servicer, is responsible for such matters to the applicable Investor or Insurer under the terms of the related Servicing Agreem ent, no Mortgage Loan is subject to any right of rescission, set-off, counterclaim or defense against the Purchaser, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable by the Purchaser, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense against the Purchaser, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted to either of the Sellers or any Originator with respect thereto. Except with respect to partial releases, actions required by a divorce decree, assumptions, or as otherwise permitted under Applicable Requirements and documented in the Loan File, (i) the terms of each Mortgage Note and Mortgage have not been modified by any Seller or Prior Servicer, (ii) no party thereto has been released in whole or in part by any Seller or Prior Servic er and (iii) no part of the Mortgaged Property has been released by any Seller or Prior Servicer.

 

 

(n)           Except as set forth in Section 3.23(n) of the Disclosure Schedule, to the Knowledge of the Sellers, there exists no material damage to any Mortgaged Property from fire, windstorm, earthquake, other casualty, environmental hazard, or any other physical circumstances or conditions relating to the condition of the Mortgaged Property that would cause any Mortgage Loan to become delinquent or otherwise materially and adversely affect the value or marketability of such Mortgage Loan or related Mortgaged Property for which any Seller is responsible under the applicable Servicing Agreement, except to the extent covered by in-place hazard insurance or flood insurance or any Mortgaged Property that is being repaired as permitted by the relevant Servicing Agreement. To the Know ledge of the Sellers, there are no uninsured casualty losses or casualty losses where coinsurance has been (and the Sellers have no reason to believe, will be) claimed by an Insurer or where the loss, exclusive of contents, is greater than the recovery, less actual expenses incurred in such recovery from the Insurer. Casualty insurance proceeds paid with respect to a Mortgage Loan have been used either to reduce the Mortgage Loan balance and pay accrued interest thereon or for the purpose of making repairs to the Mortgaged Property or as otherwise permitted by any Servicing Agreement. Except as set forth in Section 3.23(n) of the Disclosure Schedule, to the Knowledge of the Sellers, no Mortgaged Property has been subject to an Action seeking total or partial condemnation or forfeiture of such Mortgaged Property.

 

(o)           Except as set forth in Section 3.23(o) of the Disclosure Schedule, to the Knowledge of the Sellers, no Mortgage Loan is a “high-cost loan,” “threshold,” “predatory” or “covered loan” under either the Home Ownership and Equity Protection Act of 1994 or any similar federal, state or local anti-predatory lending Law.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

As an inducement to the Sellers to enter into this Agreement, the Purchaser hereby represents and warrants to the Sellers as follows as of the date hereof and as of the Closing Date:

 

SECTION 4.01. Organization and Authority of the Purchaser. The Purchaser is a limited liability company duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation and has all necessary limited liability company power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The Purchaser is duly licensed and qualified to do business and is in good standing in each jurisdiction in which such licensing and qualification is necessary to act as the Servicer under the Servicing Agreements, except for failures to be so qualified or in good standing, a s the case may be, that would not, individually or in the aggregate, affect the Purchaser’s ability to assume the obligation to act as Servicer under the Servicing Agreements or to perform its obligations under this Agreement or the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Purchaser of this Agreement and the Ancillary Agreements to which it is a party, the performance by the Purchaser of its obligations hereunder and thereunder and the consummation by the Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate or similar action on the part of the Purchaser. This Agreement has been, and upon their execution the Ancillary Agreements to which the Purchaser is a party shall be, duly executed and delivered by the Purchaser, and (assuming due authorization, execution and delivery by the Sellers) this Agreement constitutes, and upon their execution the Ancillary Agreemen ts to which the Purchaser is a party shall constitute, the legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance with their respective terms.

 

SECTION 4.02. No Conflict. Assuming the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions referred to in Section 4.03, except as may result from any facts or circumstances relating solely to the Sellers or their respective Affiliates, the execution, delivery and performance by the Purchaser of this Agreement and the Ancillary Agreements to which it is a party do not and will not (a) violate, conflict with or result in the breach of any provision of the organizational documents of the Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to the Purchaser, or (c) conflict with, or result in any breach of or loss of benefit under, constitute a default (or event which with t he giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, Permit, franchise or other instrument or arrangement to which the Purchaser is a party, except, with respect to clauses (b) and (c) only, that which would adversely affect the ability of the Purchaser to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement or the Ancillary Agreements.

 

 

SECTION 4.03. Governmental Consents and Approvals. The execution, delivery and performance by the Purchaser of this Agreement and each Ancillary Agreement to which the Purchaser is a party do not and will not require any consent, approval, authorization or other order of, action by, filing with, or notification to any Governmental Authority, except as set forth in Section 4.03 of the Purchaser Disclosure Schedule (collectively, the “Purchaser Required Approvals”). Notwithstanding the foregoing, the Purchaser is not a party to or subject to any outstanding Governmental Order, agreement, memorandum of understanding or similar supervisory arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from, any Governmental Authority which could prevent or materially delay the Closing, and to the actual knowledge of the Purchaser, none are threatened to be issued or requested.

 

SECTION 4.04. Financial Resources. At the Closing, the Purchaser will have all funds necessary to consummate all the transactions of the Purchaser contemplated by this Agreement and the Ancillary Agreements.

 

SECTION 4.05. Litigation. No Action by or against the Purchaser is pending or, to the actual knowledge of the Purchaser, threatened, which could affect the legality, validity or enforceability of this Agreement, any Ancillary Agreement or the consummation of the transactions contemplated hereby or thereby.

 

SECTION 4.06. Successor Servicer Qualifications. The Purchaser (a) is approved and in good standing with FNMA and FHLMC as a servicer of mortgage loans, (b) is an established home equity loan servicer, (c) has a net worth greater than $50,000,000, (d) is properly licensed and qualified to do business and in good standing in each jurisdiction in which such licensing and qualification is necessary to act as the Servicer under any of the Servicing Agreements, (e) has a residential primary servicer rating for the servicing of subprime residential mortgage loans issued by S&P, Fitch or Moody’s at or above “Above Average,” “RPS2” and “SQ2,” respectively, (f) has in place a valid contract of insurance under Sectio n 2 of Title I of the National Housing Act and the rules and regulations promulgated thereunder and (g) is a company whose business includes the origination and servicing of first and second lien one-to-four family mortgage loans, except in any such case as would not materially and adversely affect the ability of the Purchaser to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement and the Ancillary Agreements and the Servicing Agreements, and no event has occurred which would make the Purchaser unable to comply with all such eligibility requirements or which would require notification to HUD, FNMA or FHLMC.

 

SECTION 4.07. HAMP. The Purchaser has entered into a Commitment to Purchase Financial Instrument and Servicer Participation Agreement with FNMA, as financial agent of the United States, which agreement is in full force and effect.

 

 

SECTION 4.08. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or the Ancillary Agreements based upon arrangements made by or on behalf of the Purchaser.

 

SECTION 4.09. No Other Representations or Warranties. Except for the representations and warranties contained in this Article IV, neither the Purchaser nor any other Person makes any other express or implied representation or warranty to the Sellers.

 

ARTICLE V

 

ADDITIONAL AGREEMENTS

 

SECTION 5.01. Treatment of the Business and the Purchased Assets Prior to the Closing.

 

(a)           The Sellers covenant and agree that between the date hereof and the Closing Date, the Sellers shall conduct the Business and use the Purchased Assets in the ordinary course of business consistent with the Sellers’ past practice in all material respects, except as otherwise permitted in accordance with Section 5.01(b). Without limiting the generality of the foregoing, the Sellers shall (as it relates to the Business): (i) continue their Servicing activities, and pricing and payment policies, in accordance with past practice, except for changes reasonably made with a view to complying with the requirements of HAMP or other similar Law applicable to mortgage servicers generally; (ii) use their commercially reasonable efforts to (A) keep available to the Purchaser the services of the employees of the Sellers, taken as a whole, to whom offers of employment are to be made pursuant to Section 6.01, (B) continue in full force and effect without material modification all existing policies or binders of insurance currently maintained in respect of the Business or the Purchased Assets and (C) preserve its current relationships with the customers of the Business and other Persons with which they have significant business relationships; provided, however, that the Sellers shall not be deemed to have violated clause (A) above in the event that any Person employed by either Seller as of the date hereof ceases to be an employee of such Seller or clause (C) to the extent any such Person ceases to be a customer of the Business or terminates such business relationship because such Person objects prior to the Closing Date to the consummation of the transac tions set forth herein; and (iii) notify the Purchaser of any agreements entered into by either Seller between the date hereof and the Closing Date that would constitute an Assumed Contract or a Servicing Agreement if entered into prior to the date hereof (it being understood that such agreements are subject to the Purchaser’s consent rights in Section 5.01(b)). Notwithstanding the foregoing, the Sellers shall not be deemed to have violated this Section 5.01(a) to the extent that any action proposed to be taken by either of the Sellers in good faith in order to comply with this Section 5.01(a) is prohibited by Section 5.01(b), and the Purchaser unreasonably withholds or delays its consent upon the Sellers’ written request.

 

 

(b)           Without limiting the generality of Section 5.01(a), except as set forth in Section 5.01(b) of the Disclosure Schedule, the Sellers covenant and agree that, between the date hereof and the Closing Date, without the prior written consent of the Purchaser, such consent not to be unreasonably withheld or delayed, as it relates to the Business or the Purchased Assets, the Sellers shall not:

 

(i)           enter into any contract that would have been an Assumed Contract if it had been entered into prior to the date hereof or terminate or amend or modify in any material respect any such existing Assumed Contracts, except in the ordinary course of business consistent with past practice;

 

(ii)           enter into any individual employment agreements with any Prospective Employee;

 

(iii)          grant any salary or wage increase or materially increase or materially change any material employee benefits for any Prospective Employee (including incentive or bonus payments or the terms thereof) other than regularly scheduled salary or wage increases (including wage increases resulting from an internal transfer upon acceptance of a position that had a posted requisition as of the date hereof) of up to 2% in aggregate amount from those existing on the date hereof, except in either case (A) to satisfy previously disclosed contractual obligations existing as of the date hereof, (B) for agreements, arrangements, grants or awards to newly hired employees consistent with past practice, (C) as a result of any creation, change or modification of any benefit plan of any Sell er not related to the Business or the Purchased Assets or (D) as required by applicable Law;

 

(iv)          enter into any pooling and servicing agreements that provide for Recourse against the Servicer or involve Mortgage Loans that constitute “high-cost loan,” “threshold,” “predatory” or “covered loan” under either the Home Ownership and Equity Protection Act of 1994 or any similar federal, state or local anti-predatory lending Law or have characteristics that are materially different than the Mortgage Loans for which Servicing is presently provided;

 

(v)          purchase new mortgage servicing rights or sell mortgage servicing rights except pursuant to contractual commitments in place on the date hereof (including co- issue commitments/agreements);

 

(vi)         except in consultation with the Purchaser and as necessary in order to comply with Applicable Requirements or with a view to complying with the requirements of HAMP or other similar Law applicable to mortgage servicers generally, or the requirements of this Agreement or in response to competitive or market conditions in order to preserve the value of its franchise, make any material changes in its policies and practices with respect to Servicing Mortgage Loans;

 

(vii)        settle any Litigation filed or otherwise instituted against it or the Purchased Assets if such settlement contains any relief against the Purchased Assets other than monetary damages payable by the Sellers; provided that any such settlement shall include as a term thereof the unconditional release by the claimant or the plaintiff of the Business or the Purchased Assets from all Liability and shall not include any statement of culpability or fault by the Sellers or their Affiliates; or

 

(viii)       agree, whether in writing or otherwise, to do any of the foregoing.

 

 

SECTION 5.02. Access to Information.

 

(a)           From the date hereof until the Closing, subject to applicable Law, upon reasonable notice, the Sellers shall cause their officers, directors, employees, agents, representatives, accountants and counsel to: (i) afford the officers, employees, agents, accountants, counsel and representatives of the Purchaser reasonable access, during normal business hours, to the offices, properties, other facilities, books and records (other than Tax Returns relating to Income Taxes of the Sellers, and in the case of any other Tax Returns not related solely to the Purchased Assets or the Business, only those portions of such Tax Returns related, as determined in the sole discretion of the Sellers in good faith, to the Purchased Assets or the Business, where any portion of such Tax Ret urn not so related, as determined in the sole discretion of the Sellers in good faith, shall be redacted by the Sellers before access is provided) and to those officers, directors, employees, agents, accountants and counsel of the Sellers who have any knowledge relating to the Business and (ii) furnish to the officers, employees, agents, accountants, counsel and representatives of the Purchaser such additional financial and operating data and other information regarding the properties, assets, Liabilities, and goodwill of the Business as the Purchaser may from time to time reasonably request; provided, however, the Purchaser shall not be entitled to any information the disclosure of which by the Sellers or their officers, directors, employees, agents, representatives, accountants or counsel the Sellers reasonably determine is subject to the attorney-client and/or work product priv ilege(s); provided, further, that the Purchaser shall not be entitled to any information the disclosure of which by or on behalf of the Sellers could reasonably be expected to create any potential Liability to the Sellers or their Affiliates under applicable Law or could lead to a violation of the Sellers’ obligations of confidentiality to any third parties; it being understood and agreed that any information disclosed to the Purchaser or its officers, employees, agents, accountants, counsel and representatives pursuant to this Section 5.02(a) shall be subject to the Purchaser’s obligations in Section 5.03(b).

 

(b)           In order to facilitate the resolution of any claims made by or against or incurred by the Sellers prior to the Closing, to comply with the terms of this Agreement, the Asset Purchase Agreement, dated as of June 22, 2006, among Wachovia Corporation, HomEq Servicing Corporation, Wachovia Bank, N.A., Horizon Management Services, Inc. and Barclays Bank PLC, or the Books and Records Sharing Agreement, dated as of March 30, 2007, by and between Wachovia Corporation and Barclays Capital Real Estate Inc., any applicable Law or Governmental Order or any request of any Governmental Authority or for any other reasonable purpose (including to respond to reasonable inquiries or requests from current or former clients of the Business), (i) with respect to matters not pertaining to Taxes, for a period of five years after the Closing, or for any longer period as may be required by any Governmental Authority or as may be reasonably necessary with respect to the prosecution or defense of any audit or other Action that is then pending or threatened, or (ii) with respect to matters pertaining to Taxes, for a period that is equivalent to the period established by any applicable statute of limitations (including any extension or waiver thereof), the Purchaser shall (A) retain and preserve the books and records (including Tax Returns) relating to the Business and the Purchased Assets relating to periods prior to the Closing and any other documents that the Purchaser acquires pursuant to this Agreement in a manner consistent with its customary document retention policy, and (B) upon reasonable notice, afford the officers, employees, agents, advisors and representatives of the Sellers reasonable access (including the right to make photocopies, at the Sellers’ expense), during normal busin ess hours, to such books and records (other than Tax Returns relating to Income Taxes of the Purchaser, and in the case of any other Tax Returns not related solely to the Purchased Assets or the Business, only those portions of such Tax Returns related, as determined in the sole discretion of the Purchaser in good faith, to the Purchased Assets or the Business, where any portion of such Tax Return not so related, as determined in the sole discretion of the Purchaser in good faith, shall be redacted by the Purchaser before access is provided unless, in each case, such Tax Returns or portions thereof are reasonably required in order for the Sellers to comply with applicable Law or reduce Taxes in respect of a Tax Contest) and access to and the assistance of the Purchaser’s and its Affiliates’ respective officers, employees, agents, advisors and other representatives to the extent necessary for the Sellers or their directors, officers, employees, investment bankers, attorneys, accountants, advisors and other representatives to comply with the terms of this Agreement, any applicable Law or Governmental Order or any request of a Governmental Authority and (C) otherwise cooperate with and assist the Sellers or any of their Affiliates, at the Sellers’ cost and expense, in connection with any such claims, including by causing employees of the Purchaser to avail themselves for trial, depositions, interviews and other Action-related litigation endeavors, in each case on terms and conditions reasonably satisfactory to the Purchaser (including with respect to protecting privilege); provided that the Sellers agree to reimburse the Purchaser for reasonable expenses actually incurred by the Purchaser or its Affiliates in complying with clauses (B) and (C) above and a mutually agreeable per diem fee (based on an 8-hour day), which will be pro rata for time actually spent by any employee of the Purchaser to provide any assistance specifically req uested by the Sellers pursuant to this Section 5.02(b). Following the period specified in the first sentence of this Section 5.02(b), if the Purchaser wishes to destroy such records (other than Tax Returns), the Purchaser shall first provide the Sellers the reasonable opportunity to take possession of the same (at the Sellers’ cost and expense). Notwithstanding anything in this Agreement to the contrary, the Sellers shall be permitted to retain duplicate copies of the books and records relating to the Business or the Purchased Assets and any other documents of or otherwise relating to the Business or the Purchased Assets for legal and record-keeping purposes; it being understood that any information retained by the Sellers pursuant to this Section 5.02(b) shall be subject to Section 5.03(a) (Confidentiality).

 

 

(c)           In order to facilitate the resolution of any claims made by or against or incurred by the Purchaser after the Closing, to comply with the terms of this Agreement, any applicable Law or Governmental Order or any request of any Governmental Authority or for any other reasonable purpose (including to respond to reasonable inquiries from current or former clients of the Business), (i) with respect to matters not pertaining to Taxes, for a period of five years after the Closing, or for any longer period as may be required by any Governmental Authority or as may be reasonably necessary with respect to the prosecution or defense of any audit or other Action that is then pending or threatened, or (ii) with respect to matters pertaining to Taxes, for a period that is equivale nt to the period established by any applicable statute of limitations (including any extension or waiver thereof), the Sellers shall (A) retain the books and records (including Tax Returns) of the Sellers which relate to the Business and its operations for periods prior to the Closing in a manner consistent with its customary document retention policy and which shall not otherwise have been delivered to the Purchaser and (B) upon reasonable notice, afford the officers, employees, agents, advisors and representatives of the Purchaser reasonable access (including the right to make photocopies, at the Purchaser’s expense), during normal business hours, to such books and records (other than Tax Returns relating to Income Taxes of the Sellers, and in the case of any other Tax Returns not related solely to the Purchased Assets or the Business, only those portions of such Tax Returns related, as determined in the sole discretion of the Sellers in good faith, to the Purchased Assets or the Business, where any portion of such Tax Return not so related, as determined in the sole discretion of the Sellers in good faith, shall be redacted by the Sellers before access is provided unless, in each case, such Tax Returns or portions thereof are reasonably required in order for the Purchaser to comply with applicable Law or reduce Taxes in respect of a Tax Contest) and access to and the assistance of the Sellers’ and their Affiliates’ respective officers, employees, agents, advisors and other representatives to the extent necessary for the Purchaser or its directors, officers, employees, investment bankers, attorneys, accountants, advisors and other representatives to comply with the terms of this Agreement, any applicable Law or Governmental Order or any request of a Governmental Authority and (C) otherwise cooperate with and assist the Purchaser or any of its Affiliates, at the Purchaser’s cost and expense, in connection with any such claims, including by causing employees of the Sellers to avail thems elves for trial, depositions, interviews and other Action-related litigation endeavors, in each case on terms and conditions reasonably satisfactory to the Sellers (including with respect to protecting privilege); provided that the Purchaser agrees to reimburse the Sellers for all reasonable expenses actually incurred by the Sellers or their Affiliates in complying with clauses (B) and (C) above and a mutually agreeable per diem fee (based on an 8-hour day), which will be pro rata for time actually spent by any employees of the Sellers to provide any assistance specifically requested by the Purchaser pursuant to this Section 5.02(c). Following the period specified in the first sentence of this Section 5.02(c), if the Sellers wish to destroy such records (other than Tax Returns), the Sellers shall first provide the Purchaser the reasonable opportunity to take possession of the same (at the Purchaser’s cost and expense); it being understood and agreed that any information disclosed to the Purchaser or its officers, employees, agents, accountants, counsel and representatives pursuant to this Section 5.02(c) shall be subject to the Purchaser’s obligations in Section 5.03(b) (Confidentiality).

 

 

SECTION 5.03. Confidentiality.

 

(a)           The Sellers agree to, and shall cause their respective agents, representatives, Affiliates, employees, officers and directors to, treat and hold as confidential (and not disclose or provide access to any Person) any and all confidential or proprietary information, knowledge and data relating to the Purchased Assets (“Purchaser Confidential Information”) by using the same degree of care, but no less than a reasonable standard of care, to prevent the unauthorized use, dissemination or disclosure of such Purchaser Confidential Information as the Sellers or their Affiliates used with respect thereto prior to the execution of this Agreement, unless the Purchaser provides its prior written consent to such use or disclosure or except as otherwise permitted in this Section 5.03(a). Notwithstanding the foregoing, in the event that the Sellers or any such agent, representative, Affiliate, employee, officer or director becomes legally compelled by Governmental Order or is required by the rules and regulations or any action of any applicable Self-Regulatory Organization to disclose any such Purchaser Confidential Information, disclosure in compliance with this Section 5.03(a) shall be permitted and, to the extent reasonably practicable and permitted by applicable Law, the Sellers agree to, and shall cause their respective agents, representatives, Affiliates, employees, officers and directors to, (i) provide the Purchaser with reasonable written notice of such requirement so that the Purchaser may seek a protective order or other remedy, (ii) in the event that such protective order or other remedy is not obtained, furnish only that portion of such Purchaser Confidential Information which is legally required to be provided and exercise its reasonable best efforts to obtain assurances that confidential treatment will be accorded to such Purchaser Confidential Information and (iii) use commercially reasonable efforts to promptly furnish to the Purchaser a copy (in whatever form or medium) of such Purchaser Confidential Information it intends to furnish or has furnished; provided, however, that the foregoing shall not apply to any information (A) that at the time of disclosure, is available publicly or becomes publicly available through no act or omission of the party owing a duty of confidentiality, or becomes available on a non-confidential basis from a source other than the party owing a duty of confidentiality, so long as such source is not known by such party to be bound by a confidentiality agreement with or other obligations of secrecy to the o ther party, (B) that is developed independently by the Sellers without the use of the Purchaser Confidential Information, (C) that is disclosed to any directors, officers, employees, advisors and other representatives of the Sellers to whom such disclosure is necessary or desirable in the conduct of the business of the Sellers if such Persons are informed by the Sellers of the confidential nature of such Purchaser Confidential Information and are directed by the Sellers to comply with the provisions of this Section 5.03(a) or (D) that the Sellers are required to preserve and retain by Law. The Sellers agree and acknowledge that remedies at Law for any breach of their obligations under this Section 5.03(a) are inadequate and that in addition thereto the Purchaser shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach.

 

 

(b)           For a period of two years from the Closing Date, the Purchaser agrees to, and shall cause its agents, representatives, Affiliates, employees, officers and directors to, treat and hold as confidential (and not disclose or provide access to any Person) all confidential or proprietary information relating to the business of the Sellers and their Affiliates (other than that relating to the Purchased Assets) (“Seller Confidential Information”) that becomes known to the Purchaser or its agents, representatives, Affiliates, employees, officers and directors in connection with the transactions contemplated by this Agreement and the Ancillary Agreements and not otherwise use such Seller Confidential Information, unless the Sellers provide their prior written consent to such disclosure or except as otherwise permitted by this Section 5.03(b). Notwithstanding the foregoing, in the event that the Purchaser or any such agent, representative, Affiliate, employee, officer or director becomes legally compelled by Governmental Order or is required by the rules and regulations or any action of any applicable Self-Regulatory Organization to disclose any such Seller Confidential Information, disclosure in compliance with this Section 5.03(b) shall be permitted and, to the extent reasonably practicable and permitted by applicable Law, the Purchaser agrees to, and shall cause its agents, representatives, Affiliates, employees, officers and directors to, (i) provide the Sellers with reasonable written notice of such requirement so that the Sellers may seek a protective order or other remedy, (ii) in the event that such protective order or other remedy is not obtained, furnish only that portion of such Seller Confiden tial Information which is legally required to be provided and exercise its reasonable best efforts to obtain assurances that confidential treatment will be accorded to such Seller Confidential Information, and (iii) use commercially reasonable efforts to promptly furnish to the Sellers a copy (in whatever form or medium) of such Seller Confidential Information it intends to furnish or has furnished; provided, however, that the foregoing shall not apply to any information that (A) at the time of disclosure, is available publicly or becomes publicly available through no act or omission of the party owing a duty of confidentiality, or becomes available on a non-confidential basis from a source other than the party owing a duty of confidentiality, so long as such source is not known by such party to be bound by a confidentiality agreement with or other obligations of secrecy to the ot her party, (B) that is developed independently by the Purchaser without the use of the Seller Confidential Information, (C) that is disclosed to any directors, officers, employees, advisors and other representatives of the Purchaser to whom such disclosure is necessary or desirable in the conduct of the business of the Purchaser if such Persons are informed by the Purchaser of the confidential nature of such Seller Confidential Information and are directed by the Purchaser to comply with the provisions of this Section 5.03(b) or (D) that the Purchaser is required to preserve and retain by Law. The Purchaser agrees and acknowledges that remedies at Law for any breach of its obligations under this Section 5.03(b) are inadequate and that in addition thereto the Sellers shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach.

 

 

(c)           The parties hereto hereby acknowledge and agree that, from and after the Closing, (i) this Section 5.03 shall supersede the Confidentiality Agreement in all respects and (ii) the Confidentiality Agreement shall terminate and be of no further force and effect.

 

SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents.

 

(a)           Each of the Purchaser and each of the Sellers shall use its reasonable best efforts to obtain all authorizations, consents, orders, Permits and approvals and make all filings with all Governmental Authorities, FNMA, GNMA and FHLMC and officials that are or become necessary for its execution and delivery of, and the performance of its obligations pursuant to, this Agreement and the Ancillary Agreements, and will cooperate fully with the other party in promptly seeking to obtain all such authorizations, consents, orders and approvals.

 

(b)           The Sellers and the Purchaser shall use all commercially reasonable best efforts to obtain the Third Party Consents and Servicing Agreement Consents, none of which consents shall adversely affect the rights of any of the parties hereto or impose unreasonable burdens on the business or condition (financial or otherwise) of any of the parties, unless otherwise agreed to by the applicable party in writing; it being acknowledged and agreed that the parties shall allocate the costs and expenses of complying with this Section 5.04(b) in accordance with Section 5.14.

 

(c)           The Purchaser shall use its commercially reasonable best efforts (and the Sellers shall cooperate and use all commercially reasonable best efforts to assist the Purchaser) to obtain any ratings, consents, approvals and other items required to satisfy the criteria under the Servicing Agreements to be an eligible Servicer thereunder and achieve the desired ratings on the notes to be issued pursuant to the Servicing Advance Financing Agreements in order to satisfy the conditions to Closing set forth in Sections 7.01(f) and 7.02(d) hereof.

 

SECTION 5.05. Intercompany Arrangements. Prior to the Closing, unless otherwise instructed by the Purchaser, the Sellers shall cause any Intercompany Arrangement that is disclosed (or should have been disclosed) to be terminated.

 

 

(a)           Notwithstanding the commitment made by the Sellers under the Commitment Letter to provide the Senior Secured Term Loan Facility on and subject to the terms and conditions of the Commitment Letter and the Senior Secured Term Loan Facility Agreement, the Purchaser Parent and/or the Purchaser shall use their reasonable best efforts to obtain debt or equity financing in an aggregate amount that is sufficient, when taken together with the Advance Receivables Backed Notes, to pay the full amount of the Aggregate Consideration and terminate the commitment of the Sellers under the Commitment Letter to provide the Senior Secured Term Loan Facility (the “Alternative Financing”). The Purchaser Parent a nd the Purchaser shall use their reasonable best efforts to (i) negotiate and arrange the Alternative Financing, (ii) cooperate and assist in the syndication or placement of the Alternative Financing, (iii) execute and deliver all definitive documents relating to the Alternative Financing and (iv) satisfy all conditions to such definitive agreements and consummate the Alternative Financing at or prior to the Closing. The Sellers (solely in their capacity as sellers under this Agreement and not as financing providers) shall use their reasonable best efforts to provide to the Purchaser such cooperation as the Purchaser may reasonably request in the syndication or placement of the Alternative Financing.

 

(b)           The Purchaser Parent and the Purchaser shall use their reasonable best efforts to cause the lenders and any other Persons providing Alternative Financing to fund on the Closing Date the financing required to consummate the transactions contemplated under this Agreement if all conditions to the Closing contained in Article VII are satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions). In the event that all or any portion of the Alternative Financing has not been obtained on or prior to the Closing, then the Purchaser Parent and the Purchaser shall, no later than the Closing, use their reasonable best efforts to (1) satisfy all conditions to the Commitment Letter that are substantially within the control or influence of the Purchaser, the Purchaser Parent or their representatives, (2) satisfy all conditions to the Commitment Letter not substantially within the control or influence of the Purchaser, the Purchaser or their representatives (excluding the condition set forth in Section 2(A)(i) of the Commitment Letter, for which no efforts are required), and (3) obtain such other financing (on commercially reasonable terms and on terms consistent with the terms of the Commitment Letter and the Senior Secured Term Loan Facility Agreement) as may be needed to consummate the transactions contemplated under this Agreement.

 

(c)           The Purchaser Parent and the Purchaser acknowledge and agree that (i) the provision, arrangement, purchase, placement or obtaining of the Alternative Financing (by the Sellers or otherwise), and (ii) except as expressly set forth in Sections 7.03(d) or (e), the disbursement of a loan under the Senior Secured Term Loan Facility and the issuance of the ABS Notes are not conditions to the Closing.

 

(d)           Notwithstanding the foregoing, nothing in this Section 5.06 shall be deemed to require the Purchaser Parent to issue equity securities at a price or on terms that are so adverse as to, in the reasonable judgment of the Purchaser Parent’s board of directors after consultation with an independent investment banker of international standing and qualified outside counsel, violate or conflict with the fiduciary duties of the Purchaser Parent’s board of directors under applicable Law.

 

 

SECTION 5.07. Sellers’ Marks.

 

(a)           As promptly as commercially practicable but in no event later than 90 days after the Closing Date, the Purchaser shall completely and permanently obliterate, mask or remove all Sellers’ Marks from all Purchased Assets other than any Sellers’ Marks set forth on Assumed Contracts or other documents that are not used for marketing or advertising purposes. On and after the Closing, except as expressly otherwise set forth in this Section 5.07, the Purchaser shall not (i) use any Sellers’ Marks or any confusingly similar trade name, corporate or business name, trademark, tag-line, identifying logo, trade dress, monogram, slogan, service mark, domain name, brand name or other name or source identifier or (ii) in any way represent that it is, or otherwise h olds itself out as being, affiliated with the Sellers or any Affiliate thereof (except as the purchaser of the Purchased Assets). Except as expressly otherwise set forth in this Section 5.07, the Purchaser shall not seek to register in any jurisdiction any trade, corporate or business name, trademark, tag-line, identifying logo, trade dress, monogram, slogan, service mark, domain name, brand name or other name or source identifier that includes or is a derivation, translation, adaptation, combination or variation of either of the Sellers’ Marks.

 

(b)           Notwithstanding the foregoing, but subject to applicable Law, for a period of not more than 60 days after the Closing Date, the Purchaser shall be entitled to use or disseminate, in ways that could not reasonably be considered to disparage the Sellers, any invoices, purchase orders, sales orders, labels, letterhead, envelopes, business cards, promotional materials or other documentation used by the Sellers in connection with the Business and existing on the Closing Date (the “Existing Stock”) that bear any Sellers’ Mark where the removal, erasure, deletion or obliteration of such Sellers’ Mark on such Existing Stock would not be reasonably practicable, provided that all use of th e Sellers’ Marks as set forth in this Section 5.07(b) shall be consistent with past practice and only with respect to goods and services of a level of quality equal to or greater than the quality of goods and services with respect to which the Sellers used the Sellers’ Marks immediately prior to Closing. Except as set forth in this Section 5.07, the Purchaser shall not use any Sellers’ Marks together with its own or any other Trademarks on any stationery or advertising or in any other form or documentation.

 

(c)           The Purchaser hereby acknowledges and agrees that neither it nor any Affiliate of the Purchaser shall acquire any goodwill, rights or benefits arising from its or their use of Sellers’ Marks in accordance with Section 5.07(b) and that all such goodwill, rights and benefits shall accrue absolutely to the applicable Seller.

 

SECTION 5.08. Tax Cooperation and Exchange of Information; Tax Reporting.

 

(a)           Upon the terms set forth in Section 5.02 of this Agreement, the Sellers, on the one hand, and the Purchaser, on the other hand, shall provide each other with such cooperation and information as either of them reasonably may request of the other in (i) filing any Tax Return, amended Tax Return or claim for refund, (ii) determining a Liability for Taxes or a right to a refund of Taxes, and (iii) participating in or conducting any audit or other proceeding in respect of Taxes, in each case, relating to the Purchased Assets or the Business. Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof in accordance with Section 5.02 and timely notice to the other parties in writing of any pending or proposed audits or assessm ents with respect to Taxes for which the other may have a liability under this Agreement (including furnishing the other parties with copies of all relevant correspondence received from any Governmental Authority in connection with any such audits or assessments). The Sellers, on the one hand, and the Purchaser, on the other hand, shall make themselves (and their respective employees) available on a basis mutually convenient to both parties to provide explanations of any documents or information provided under this Section 5.08(a). Each of the Sellers and the Purchaser shall retain all Tax Returns, schedules and work papers, records and other documents in its possession (or in the possession of its Affiliates) relating to the Tax matters relevant to the Purchased Assets or the Business for each taxable period first ending after the Closing and for all prior taxable periods until the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate (taking in to account any extension or waiver thereof). Any information obtained under this Section 5.08(a) shall be kept confidential in accordance with Section 5.03, except as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding.

 

 

(b)           The Sellers and the Purchaser shall make reasonable efforts to comply with and shall adopt the “alternative procedure” of IRS Revenue Procedure 99-50 § 5, 1999-2 C.B. 757, for all reports, forms, notices and filings required by the Code, Regulations and other federal law, regulations or administrative procedures in connection with the Servicing and the Mortgage Loans eligible for the “alternative procedure,” where the Sellers shall be the “predecessors” and the Purchaser shall be the “successor” as the terms are used in Revenue Procedure 99-50 § 5, 1999-2 C.B. 757. Without limiting the foregoing, to the extent the Sellers and the Purchaser comply with and adopt such “alternative procedure,” the Sel lers shall timely provide to the Purchaser, accurately and in a form reasonably acceptable to the Purchaser, all information required by the Purchaser to prepare and send to Mortgagors and prepare and file with the IRS all reports, forms, notices and filings required by the Code, Regulations and other federal law, regulations or administrative procedures in connection with the Servicing and the Mortgage Loans with respect to events that occurred at any time during the period commencing on January 1, 2010 and ending on the Closing Date, and upon receipt of such information by the Purchaser, the Purchaser shall prepare and file such reports, forms, notice and filings. Notwithstanding the foregoing, the Sellers shall be jointly and severally responsible for all such reports, forms, notices and filings that must be made on or before the Closing Date, or otherwise relate to such periods (or portions thereof). The Sellers shall indemnify and hold the Purchaser harmless against Taxes imposed as a result of a failur e of a Seller to provide information as required by this Section 5.08(b) or to otherwise comply with this Section 5.08(b) and all out-of-pocket costs incurred by the Purchaser in complying with this Section 5.08(b) allocable to matters relating to Pre-Closing Periods. The Purchaser shall indemnify and hold the Sellers harmless against Taxes imposed as a result of a failure by the Purchaser to comply to the extent required by this Section 5.08(b) with the requirements of the “alternative procedure” of IRS Revenue Procedure 99-50 § 5, 1999-2 C.B. 757, unless such failure results from the Sellers’ failure to comply with their obligations under this Section 5.08(b).

 

 

SECTION 5.09. Conveyance Taxes. The Sellers, on the one hand, and the Purchaser, on the other hand, shall each be liable for 50% of any Conveyance Taxes which become payable in connection with the transactions contemplated by this Agreement. The Purchaser, after the review and consent by the Sellers, shall file such applications and documents as shall permit any such Conveyance Tax to be assessed and paid on or prior to the Closing in accordance with any available pre-sale filing procedure. The Sellers shall execute and deliver all instruments and certificates necessary to enable the Purchaser to comply with the foregoing.

 

SECTION 5.10. Further Action. Each of the parties hereto shall use all commercially reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and to execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and the Ancillary Agreements to which it is a party and consummate and make effective the transactions contemplated hereby and thereby. Without limiting the generality of the foregoing, at the Purchaser’s sole cost and expense, the Sellers shall reasonably cooperate with the Purchaser, and shall provide the Purchaser with such information as the Purchaser may reasonably request, to t ransfer any Permits referred to in Section 2.01(a)(xv) to the Purchaser prior to the Closing Date to the extent permitted by Law.

 

SECTION 5.11. Proration of Taxes and Certain Charges.

 

(a)           Except as provided in Section 5.09 or otherwise in this Agreement, all Property Taxes relating to the Purchased Assets for any Straddle Period, whether imposed or assessed before or after the Closing Date, shall be prorated between the Sellers and the Purchaser as of 12:01 A.M. on the day after the Closing Date. If any Property Taxes subject to proration are paid by the Purchaser, on the one hand, or the Sellers, on the other hand, the proportionate amount of such Property Taxes paid (or in the event a refund of any portion of such Property Taxes previously paid is received, such refund) shall be paid promptly by (or to) the other after the payment of such Property Taxes (or promptly following the receipt of any such refund). All Taxes (other than Property Taxes) rel ating to the Purchased Assets or the Business or for the Straddle Period shall be computed as if such taxable period ended as of the close of business on the Closing Date.

 

(b)           All refunds, reimbursements, installments of base rent, additional rent, license fees or other use related revenue receivable by any party to the extent attributable to the Purchased Assets for any period in which the Closing shall occur shall be prorated so that the Sellers shall not be entitled to that portion of any such installment applicable to any period from and after the Closing Date and that the Purchaser shall not be entitled to that portion of any such installment applicable to any period prior to the Closing Date, and if the Purchaser or the Sellers, as the case may be, shall receive any such payments after the Closing Date, it shall promptly remit to such other party its share of such payments.

 

(c)           The prorations pursuant to this Section 5.11 may be calculated after the Closing, as each item to be prorated (including any such Tax, obligation, assessment, charge, refund, reimbursement, rent installment, fee or revenue) accrues or comes due; provided, that, in any event, any such proration shall be calculated not later than 30 days after the party requesting the proration of any item obtains the information required to calculate such proration, and the payment of any such proration shall be made no later than five days following the completion of such calculation.

 

 

SECTION 5.12. Servicing Interests Transition.

 

(a)           If required by Applicable Requirements, the Sellers and the Purchaser each shall send the Mortgagors notification of the transfer of the Servicing function, which shall comply in all material respects with all Applicable Requirements, including the federal Real Estate Settlement Procedures Act, as amended, and Regulation X, as amended. At least 16 days prior to the anticipated Closing Date and otherwise in accordance with Applicable Requirements, the Sellers shall mail the form of notification (which shall be in form and substance reasonably satisfactory to the Purchaser) to the Mortgagors under the Mortgage Loans of the transfer of the applicable Servicing and instruct the Mortgagors to deliver all Mortgage Loan Payments and related payments and all tax and insuranc e notices to, or as directed by, the Purchaser on and after the Closing Date. The Sellers and the Purchaser each shall bear their own costs and expenses of preparing and delivering their respective notices described in this Section 5.12(a).

 

(b)           All Mortgage Loan Payments, other funds or payments used to pay bills that relate to Mortgage Loans received by the Sellers after the Closing Date shall be forwarded by the Sellers to the Purchaser within two Business Days after receipt and proper identification by overnight mail for 90 days after the Closing Date and within five Business Days after receipt and proper identification for the first 180 days after the Closing Date. Each Mortgage Loan Payment shall be accompanied by an endorsement assigning such Mortgage Loan Payment to the Purchaser. For 90 days after the Closing Date, the Sellers shall forward to the Purchaser all bills, transmittal lists and other information within two Business Days after receipt and proper identification by the Sellers by overnight mail.

 

SECTION 5.13. Conversion Plan.

 

(a)           Each of the Sellers and the Purchaser shall work together in good faith to develop a plan prior to the Closing Date (the “Conversion Plan”) to effect the orderly transfer of the Loan Files and Servicing files, the physical transfer of Servicing, and the provision of customary notices to taxing authorities, insurance providers, escrow arrangements and the like. Without limiting the foregoing, such Conversion Plan shall provide that the Sellers shall notify each relevant vendor of services of the transfer contemplated hereby, and the Sellers shall bear the cost and expense of such notices. Each of the Purchaser and the Sellers shall use commercially reasonable efforts to agree upon and impleme nt the Conversion Plan.

 

(b)           Upon reasonable request by the Purchaser and subject to the terms and conditions of this Agreement, the Sellers shall prepare, execute and furnish the Purchaser with such limited powers of attorney to execute documents on behalf of the Sellers in respect of the related Mortgage Loan Documents and such other documents prepared by the Purchaser and reasonably satisfactory in form and substance to the Sellers as may be necessary or appropriate to enable the Purchaser to liquidate, collect payments against and otherwise service and manage the Mortgage Loans, Mortgaged Properties and REO Properties in accordance with the related Servicing Agreements.

 

 

SECTION 5.14. Costs of Transfer. Except as otherwise provided herein:

 

(a)           the Sellers shall be responsible for all costs and expenses to obtain the consents of the related Investors or other Persons with contractual authority to approve Servicing transfers with respect to (A) the Whole Loan Servicing Agreements set forth on Section 5.14(a)(i) of the Disclosure Schedule and (B) the Securitization Servicing Agreement set forth on Section 5.14(a)(ii) of the Disclosure Schedule (the “Special SSA”) (the consents referred to in this Section 5.14(a), the “Special Consents”);

 

(b)           the Sellers, on the one hand, and the Purchaser, on the other hand, shall each be responsible for 50% of all costs and expenses with respect to (i) obtaining and transferring the Servicing Interests (excluding the costs and expenses of obtaining the Special Consents but including the costs and expenses of obtaining any consents relating to the Servicing Interests that are not Special Consents) and (ii) the transfer and delivery to any of the Leased Real Properties of any Loan Files and related documents in the possession of the Sellers but not presently located at any of the Leased Real Properties; provided that the Purchaser’s obligation to pay for the foregoing fees, costs and expenses (which, f or the avoidance of doubt, shall not include those costs incurred by the Purchaser pursuant to Section 5.10, Section 5.12 or Section 5.14(d) below) shall not exceed, in the aggregate, the amount set forth on Section 5.14(b) of the Disclosure Schedule;

 

(c)           the Sellers shall be responsible for all fees paid to Standard & Poor’s and all costs and expenses incurred by Standard & Poor’s in connection with providing ratings of “AAA” on the Class A-1 Notes and the Class A-2 Notes, with the advance rates for such “AAA” rated classes being at least 65%, “AA” on the Class B Notes, “A” on the Class C Notes, and “BBB” on the Class D Notes, in each case pursuant to the Servicing Advance Financing Agreements;

 

(d)           the Sellers shall be responsible for all other fees, costs and expenses incurred by the Sellers in the performance of their obligations under this Agreement and the transactions contemplated hereby, whether or not the Closing shall have occurred, including the fees of the Sellers’ attorneys and accountants; and

 

(e)           the Purchaser shall be responsible for all other fees, costs and expenses of the Purchaser in its performance of its obligations under this Agreement and the transactions contemplated hereby, whether or not the Closing shall have occurred, including the fees of the Purchaser’s attorneys, brokers and accountants and its filing fees under the HSR Act.

 

SECTION 5.15. Interest on Custodial Accounts. The Sellers shall pay interest on Custodial Accounts or Related Escrow Accounts accrued through to the Closing to the extent interest with respect to such accounts is required to be paid under Applicable Requirements for the benefit of Mortgagors under the Mortgage Loans or any other appropriate party. The Sellers shall either deposit any such interest earned in the Custodial Accounts or Related Escrow Accounts or forward such interest to the Purchaser or its designee within five Business Days after the Closing.

 

 

SECTION 5.16. Releases. After the Closing, at the direction of the Sellers, the Purchaser shall complete the process of preparing, recording and providing to Mortgagors lien releases with respect to Mortgage Loans serviced or subserviced by the Sellers prior to and paid off as of the Closing Date, in accordance with Applicable Requirements, and the Sellers shall reimburse the Purchaser for its actual costs and expenses in connection therewith. At the Sellers’ option, the Purchaser shall either provide such releases to the Sellers for execution or execute the same pursuant to a power of attorney provided by the Sellers or, with respect to subserviced Mortgage Loans, the Servicer to the Purchaser. To the extent the process of completing the release process has been contracted to third parties and the contracts with those third parties have been assigned to and assumed by the Purchaser pursuant to this Agreement, the Purchaser shall use commercially reasonable efforts to monitor the activities of such third parties in this regard.

 

SECTION 5.17. Monthly Information. Not later than the 10th Business Day of each month between the date of this Agreement and the Closing Date, the Sellers shall provide the Purchaser with an updated servicing data file as of the prior month-end regarding Mortgage Loans containing, with respect to each Mortgage Loan, the information of the same categories and in the same format as the month-end servicing tape provided to the Purchaser in the March 31 Data Tape (the “Monthly Data Tape”).

 

SECTION 5.18. Servicing Agreement Consents; Adjustment Procedures.

 

(a)           From the date hereof until the Closing Date, the Sellers shall use commercially reasonable efforts to obtain (i) the Servicing Agreement Consents set forth on Section 3.05 of the Disclosure Schedule and (ii) the Special Consents (whether or not set forth on Section 3.05 of the Disclosure Schedule) (the consents referred to in clauses (i) and (ii) collectively, the “Consents”) on or prior to the Closing Date, and the Purchaser shall cooperate with the Sellers to obtain the Consents on or prior to the Closing Date. If any Consent is not obtained on or prior to the Closing Date and the Sellers in their sole discretion desire to continue to use their commercially reasonable efforts to obtain suc h Consent, the Purchaser shall continue to cooperate with the Sellers to obtain such Consent; provided that, for the avoidance of doubt, no party hereto shall be obligated to agree to the terms of any Consent that adversely affects the rights of such party or imposes unreasonable burdens on the business or condition (financial or otherwise) of such party.

 

(b)           The parties hereby agree to, and shall comply with, the Adjustment Procedures.

 

(c)           The rights and remedies of the Purchaser set forth in the Adjustment Procedures with respect to the matters contemplated by the Adjustment Procedures, or any fact, circumstance or event to the extent forming the basis thereof, are exclusive and in lieu of any and all other rights and remedies that the Purchaser may have under this Agreement or otherwise with respect to the matters contemplated by the Adjustment Procedures, including any such rights to indemnification pursuant to Section 8.02, and the Purchaser hereby expressly waives any and all other rights or causes of action it or its Affiliates may have against the Sellers or their Affiliates now or in the future under any Law with respect to the matters contemplated by the Adjustment Procedures or any fact, circ umstance or event to the extent forming the basis thereof.

 

 

SECTION 5.19. Post-Closing Asset Deliveries. If either Seller, in its reasonable discretion, determines after the Closing that books, records or other materials constituting Purchased Assets are still in the possession of such Seller or any of its Affiliates, such Seller shall, or shall cause such Affiliates to, promptly deliver them to the Purchaser at no cost or expense to the Purchaser.

 

SECTION 5.20. Transition Services Agreement; Escrow Agreement.

 

(a)           Promptly after the date hereof, the parties hereto shall negotiate reasonably and in good faith agree upon (in no event later than 30 calendar days after the date hereof) a form of a transition services agreement consistent with the terms and conditions set forth in Exhibit 5.20, pursuant to which the Sellers or their Affiliates shall provide to the Purchaser certain specified services for up to 90 days following the Closing Date (the “Transition Services Agreement”).

 

(b)           Promptly after the date hereof, the parties hereto shall cooperate and negotiate reasonably with each other and the Escrow Agent and in good faith agree upon (in no event later than 30 calendar days after the date hereof) a form of Escrow Agreement.

 

SECTION 5.21. Audited Carve-Out Financials.

 

(a)           The Sellers have engaged PWC to conduct an audit of the Carve-Out Financials as of December 31, 2009, 2008 and for the years ended December 31, 2009, 2008 and 2007 in accordance with PCAOB or AICPA generally accepted auditing standards. The Sellers shall instruct PWC to use commercially reasonable efforts to complete its engagement as promptly as practicable and to deliver their report on the Carve-Out Financials (the “PWC Report”) to the Purchaser as promptly as practicable. The Sellers shall reasonably consult and cooperate with the Purchaser in connection with PWC’s engagement.

 

(b)           Following the receipt by the Purchaser of the Audited Carve-Out Financials, the Purchaser shall promptly reimburse the Sellers for their out-of-pocket costs and expenses and PWC’s fees and out-of-pocket costs and expenses, in each case incurred as a result of this Section 5.21 (including with respect to the preparation of the Carve-Out Financials and/or the PWC Report); provided, however, that the Purchaser’s obligation to reimburse such fees, costs and expenses shall not exceed, in the aggregate, $600,000, and the Sellers shall be responsible for all such fees, costs and expenses in excess of $600,000.

 

(c)           The parties acknowledge and agree that, notwithstanding Section 5.21(a), PWC shall not be required to deliver the PWC Report unless and until the Purchaser shall have executed such customary acknowledgement, confidentiality, indemnity and hold harmless agreements relating to such PWC Report and/or the Carve-Out Financials as PWC may reasonably require.

 

(d)           The Purchaser acknowledges and agrees that the only representations and warranties of the Sellers are set forth in Article III and that the Sellers make no representations or warranties with respect to the PWC Report, the Carve-Out Financials or any actions reasonably taken or omitted to be taken by the Sellers in connection with this Section 5.21.

 

 

SECTION 5.22. Seller Indemnification Cooperation. Following the Closing, at the written direction of the Sellers, the Purchaser shall use commercially reasonable efforts to seek reimbursement, on behalf of the Sellers and/or their Affiliates, as the case may be, under the applicable Servicing Agreement for any indemnifiable losses incurred by either Seller or its Affiliates in connection with any Litigation, whether pending on or arising after the Closing Date, that is brought against either Seller with respect to the Servicing of any Servicing Agreement by either Seller or any prior Servicer or subservicer prior to the Closing Date. The Purchaser shall hold in trust for and pay to the Sellers as soon as reasonably practicable upon receipt thereof all amounts received by the Purchaser or any of its Affiliates on behalf of the Sellers or their Affiliates pursuant to this Section 5.22. The Sellers acknowledge and agree that the Purchaser makes no representations or warranties with respect to any actions taken (or omitted to be taken) by the Purchaser pursuant to this Section 5.22.

 

SECTION 5.23. Existing Servicer Litigation. Schedule 5.23 sets forth a complete and accurate list of all Servicer Litigation as of the date hereof. At or prior to the Closing, the Sellers shall deliver to the Purchaser an update to Schedule 5.23, which shall set forth a complete and accurate list of all Servicer Litigation as of immediately prior to the Closing Date (the “Transferred Servicer Litigation”). As promptly as practicable after the date hereof, the Sellers and the Purchaser shall cooperate and agree upon reasonable procedures for transferring the prosecution, defense and management of the Transferred Servicer Litigation from the applicable Seller to the Purchaser as of the Closing Date. Subject in all cases to indemnification for any Excluded Liabilities as set forth in Article VIII, from and after the Closing Date and subject to the Sellers’ obligations to cooperate and provide access to information under Section 5.02, the Purchaser shall be solely responsible for the prosecution, defense and management of any and all Servicer Litigation, including (i) the Transferred Servicer Litigation, including administrative costs and expenses and any other Liabilities associated with prosecuting, defending and managing such Transferred Servicer Litigation, and (ii) any and all Servicer Litigation instituted on or after the Closing Date, regardless of whether such Servicer Litigation arises out of or relates to (A) any matters occurring before or after the Closing Date or (B) Servicing by either Seller, any prior Servicer or the Purchaser, including administrative costs and expenses and any other Liabilities associated with prosecuting, defending and managing such Servicer Litigation.

 

SECTION 5.24. Purchaser Parent. Whenever this Agreement requires the Purchaser to take any action, such requirement shall be deemed to include an undertaking on the part of the Purchaser Parent to cause the Purchaser to take such action.

 

SECTION 5.25. Intellectual Property License. The Purchaser hereby grants to the Sellers and their Affiliates a non-exclusive, worldwide, royalty-free, fully paid-up right and license to the Intellectual Property transferred to the Sellers pursuant to this Agreement, including the Transferred Intellectual Property and the Intellectual Property identified in Section 3.14(a) of the Disclosure Schedule, for use by the Sellers and their Affiliates as may be needed solely (i) to access data and to facilitate the resolution of any claims made by or against or incurred by the Sellers and their Affiliates prior to the Closing, (ii) in order to comply with the terms of this Agreement and any Ancillary Agreements thereto, the Asset Purchase Agreement, dated as of June 22, 2006, among Wachovia Corporation, HomEq Servicing Corporation, Wachovia Bank, N.A., Horizon Management Services, Inc. and Barclays Bank PLC, and the Books and Records Sharing Agreement, dated as of March 30, 2007, by and between Wachovia Corporation and Barclays Capital Real Estate Inc., and any applicable Law or Governmental Order or any request of any Governmental Authority, or (iii) to effectuate the Sellers’ rights to data and information as provided in this Article V. The Sellers may retain after the Closing a copy of the relevant data (including images) for the Business, currently maintained in the Informix data repository, and on storage units accessed via the indices and Filenet front end. Notwithstanding the foregoing, the Purchaser’s obligations under this Section 5.25 shall be subject to the terms of any applicable Transferred Intellectual Property License and applicable Law.

 

 

ARTICLE VI

 

EMPLOYEE MATTERS

 

SECTION 6.01. Transferred Employees.

 

(a)           Section 6.01(a)(i) of the Disclosure Schedule sets forth a true and complete list showing the individuals currently employed by the Sellers’ Affiliates who primarily provide administrative services to the Business. Section 6.01(a)(ii) of the Disclosure Schedule sets forth a true and complete list showing the individuals who are employed in the Business by the Sellers or their Affiliates and for each Prospective Employee: (i) the employee identification number and title or position; (ii) the date of hire or commencement of service; (iii) the work location; (iv) whether full-time or part-time employee, whether hourly or salaried and whether exempt or non-exempt from entitlement to overtime pay; (v) whether covered by the terms of a collective bargaining agreement or employment agreement; (vi) whether absent from active employment and, if so, the date such absence commenced and the anticipated date of return to active employment; (vii) the annual salary or hourly wage, as the case may be, for the current fiscal year; (viii) the earliest date as of which such Prospective Employee is next subject to a performance evaluation or potential increase in compensation; and (ix) any company-provided vehicles or vehicle allowances of each Prospective Employee. Such lists shall be updated by the Sellers and delivered in writing to the Purchaser prior to, and as of five (5) Business Days before, the Closing Date. Immediately prior to the Closing Date (or, in the case of a Prospective Employee who is on a short term disability leave, workers’ compensation leave, or other authorized leave of absence as of the Closing Date, immediately after the date that such Prospective Employee is no longer on any such leave), the Purchaser shall offer employment to each Prospective Employe e who is employed by the Sellers or their Affiliates immediately prior to the Closing Date, which offer shall be for employment at the same work location or a location within 25 miles of the Prospective Employee’s current work location and in a comparable position to the position held by such Prospective Employee immediately prior to the Closing Date and with a base salary and cash bonus targets and participation in employee benefit plans as set forth in Section 6.01(b) below. Notwithstanding this Section 6.01(a), the Purchaser shall not be required to offer employment to those Prospective Employees who are on long-term disability leave immediately prior to the Closing Date. Any Prospective Employee to whom an offer is made in accordance with the preceding sentence is referred to herein as an “Offered Employee,” and any Offered Employee who has accepted such offer of employment and commences employment with the Purchaser shall be referred to as a “Transferred Employee.”

 

 

(b)           The Purchaser hereby agrees that it shall provide the Transferred Employees with (i) base salary on terms and conditions substantially comparable to the base salary provided by the Sellers or their Affiliates to such Transferred Employees immediately prior to the Closing Date and (ii) participation in cash incentive and other employee benefit plans, programs and arrangements (other than post-retirement welfare benefits) for the benefit of the Transferred Employees that are substantially comparable in the aggregate to the cash incentive and other employee benefit plans, programs and arrangements provided by the Purchaser to similarly situated employees of the Purchaser. The Purchaser hereby agrees that it shall allow the Transferred Employees to participate in the Pur chaser’s existing incentive compensation plans for comparable job functions of the Purchaser. The Purchaser hereby agrees that, on behalf of the Sellers, it shall provide each of the Transferred Employees who is a participant in the annual bonus component of the HomEq Servicing 2010 Incentive Compensation Plan (the “2010 Compensation Plan”), with a 2010 cash bonus in an amount equal to the obligation accrued as of the Closing Date under the 2010 Compensation Plan with respect to each such Transferred Employee and as set forth on Section 6.01(b) of the Disclosure Schedule (“2010 Bonuses”), which amounts shall be paid on the earlier of each such Transferred Employee’s date of involuntary termination of employment without cause (as defined in the 2010 Compensation Plan) or January 15, 2011. On or immediately following January 15, 2011, (i) the Purc haser shall deliver notice to the Sellers of the total amount of 2010 Bonuses actually paid to the Transferred Employees (such amount, the “Bonuses Paid Amount”), which notice will be certified by an officer of the Purchaser and will include documentation reasonably acceptable to the Sellers evidencing the Bonuses Paid Amount, and (ii) if the total amount of 2010 Bonuses set forth in Section 6.01(b) of the Disclosure Schedule (the “Estimated Bonus Amount”) is greater than the Bonuses Paid Amount, the Purchaser shall promptly pay to the Sellers in cash, by wire transfer of immediately available funds to a bank account designated by the Sellers, the excess of the Estimated Bonus Amount over the Bonuses Paid Amount. Notwithstanding anything herein to the contrary, nothing in this Agreement shall (A) create any obligation on the part of the Purchaser to continu e the employment of any Transferred Employee for any period following the Closing or (B) create any third-party beneficiary rights respecting any employee of either Seller, including any Offered Employee. The Sellers shall pay to each of the Transferred Employees who is a participant in a component of the 2010 Compensation Plan that is not an annual component (e.g., a component of such plan that provides for the payment of bonuses on a weekly, monthly or quarterly basis) (i) all such bonus amounts earned under the 2010 Compensation Plan with respect to completed performance periods and (ii) all such bonus amounts for performance periods in which the Closing Date occurs as though such performance periods were completed and the maximum bonus accrued as of the Closing Date but subject to proration based on the number of days in the performance period completed as of the Closing Date.

 

(c)           With respect to any Employee Benefit Plans of the Purchaser in which the Transferred Employees participate after the Closing Date, the Purchaser shall, or shall use its reasonable best efforts to cause its insurance providers to: (i) waive any limitations as to pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Transferred Employees under any such plan in which such Transferred Employees may be eligible to participate after the Closing Date; provided, however, that the Purchaser shall waive any such limitations only to the extent that each Transferred Employee ( and his/her dependents and beneficiaries, as applicable) provides appropriate written consent for disclosure of such information to the insurers or administrators of the Purchaser’s applicable Employee Benefit Plans as is necessary for the Purchaser to fulfill its obligations under this Section 6.01(c); and provided, further, that no such waiver shall apply to a pre-existing condition of any Transferred Employee or any dependent thereof, who was, immediately prior to the Closing Date, excluded from participation in any Plan by nature of such pre-existing condition; and (ii) recognize all service of the Transferred Employees with either of the Sellers or their respective Affiliates for purposes of eligibility to participate, vesting, level of benefits and benefit accrual (other than benefit accrual under a defined benefit pension plan and for determining post retirement welfa re benefits) in any benefit plan, program or arrangement (including severance) in which such Transferred Employees may be eligible to participate on or after the Closing, except to the extent such treatment would result in duplicative benefits.

 

 

(d)           Except to the extent included in the Assumed Liabilities and except as otherwise provided in Section 6.01(e) below, (i) the Sellers or their Affiliates shall be responsible for paying to Offered Employees and Transferred Employees any accrued but unpaid wages or other compensation (including earned, unused vacation, sick days (if applicable), payment upon termination in lieu of notice, severance and change in control payments) upon their termination of employment with the applicable Seller or its Affiliate and in accordance with such Seller’s or its Affiliate’s policies and/or contracts, in each case to the extent accrued on or before the Closing Date, and (ii) the Purchaser shall have no responsibility or Liability for payment of any wages or other compe nsation (including vacation or sick days) earned by or owed to an Offered Employee (including an Offered Employee who rejects the Purchaser’s offer of employment made in accordance with Section 6.01(a) above or who is not actively at work on the Closing Date and does not become a Transferred Employee on the Closing Date), Transferred Employee or any other employee impacted by this Agreement during his employment with the Sellers or their respective Affiliates. In addition, the Sellers and their Affiliates agree to retain, bear and discharge all Liabilities with respect to Offered Employees (including the Transferred Employees) for workers’ compensation claims that are incurred on or before the Closing Date. A workers’ compensation claim shall be considered incurred on or before the Closing Date if the occurrence of the accident or injury that gives rise to the claim occurs on or before the Closing Date. For the avoidance of doubt, if any Transferred Employee’s workers’ compensat ion claim is based on the occurrence of an accident or injury that occurs on or before the Closing Date but is aggravated as a result of services provided by the Transferred Employee to the Purchaser or by further injury or accident, in each case, after the Closing Date, Sellers and their Affiliates shall retain, bear and discharge the Liabilities for such workers’ compensation claim only to the extent such Liabilities relate to the accident or injury that occurred on or before the Closing Date.

 

(e)           For a period of one year from the Closing Date (the “Severance Period”), in the event of an involuntary termination of employment of any of the Transferred Employees by the Purchaser (each such employee a “Severed Transferred Employee” and collectively, the “Severed Transferred Employees”), the Purchaser and its Affiliates shall provide the severance pay to such Severed Transferred Employees as set forth on Section 6.01(e)(i) of the Disclosure Schedule and contingent on each such Severed Transferred Employee’s execution and non-revoca tion of a release and waiver of claims in favor of the Purchaser, the Sellers and their respective Affiliates. Section 6.01(e)(i) of the Disclosure Schedule shall set forth for each Transferred Employee the amounts of severance pay that each such Transferred Employee will be eligible to receive in the event of termination during each of the 12 months immediately following the Closing Date. The aggregate severance pay paid by the Purchaser pursuant to this Section 6.01(e) and in accordance with Section 6.01(e)(i) of the Disclosure Schedule is hereinafter referred to as the “Severance Paid.” As soon as reasonably practicable after the end of the one-year period following the Closing Date, the Purchaser shall deliver notice to the Sellers of the total amount of Severance Paid, which notice will be certified by an officer of the Purchaser. If the Purchaser Severance Amount is greater than the Severance Paid, then the Purchaser shall pro mptly pay to the Sellers the excess amount of the Purchaser Severance Amount over the Severance Paid. If the Purchaser Severance Amount is less than the Severance Paid, then the Sellers shall promptly pay to the Purchaser the excess amount of the Severance Paid over the Purchaser Severance Amount. For purposes of this Agreement, “Purchaser Severance Amount” shall mean the amount set forth on Section 6.01(e)(ii) of the Disclosure Schedule.

 

 

(f)           The Purchaser shall be responsible for any obligation with respect to the Transferred Employees under the Worker Adjustment Retraining and Notification Act of 1988 and any applicable state or local equivalent arising or accruing after the Closing Date (collectively, “WARN”). The Sellers and their Affiliates shall be responsible for any such obligation arising or accruing on or before the Closing Date. The parties hereto agree to cooperate in good faith to determine whether any notification may be required under WARN as a result of the transactions contemplated by this Agreement.

 

(g)           As soon as administratively practicable following the Closing Date, but in no event more than 90 days after the Closing Date, a defined contribution plan (qualified under Section 401 of the Code) of the Purchaser shall accept direct or indirect rollovers by Transferred Employees of their vested interests in the Sellers’ 401(k) Plan.

 

(h)           With respect to each Transferred Employee, the Sellers and their Affiliates shall provide the Purchaser with electronically generated data extractions from the Sellers’ and their Affiliates human resources systems, in an agreed format, of such Transferred Employee’s job description, employment and job data, job code, current compensation, payroll data, date of hire, current position, biographical information (which shall consist of name, address, telephone, cell phone and e-mail contact information), I-9s, and such additional information relating to the Purchaser’s management or administration of its relationship with the Transferred Employee as the Purchaser and the Sellers may agree to in good faith; provided, that neither the Sellers nor their Affiliates shall have obligations to transfer any information or documents pursuant to this Section 6.01(h) to the extent such transfer would be restricted or prohibited by Law. The foregoing information shall be provided on the Closing Date (with the exception of the I-9s which shall be provided as soon as reasonably practicable thereafter), as well as on a preliminary basis for each Prospective Employee within seven days after the date hereof (with such preliminary information to be updated on a monthly basis until the Closing Date). The Purchaser shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information provided by the Sellers and their Affiliates under this provision to protect any personal information from unauthorized access, destruction, use, modification or disclosure.

 

 

ARTICLE VII

 

CONDITIONS TO CLOSING

 

SECTION 7.01. Conditions to Obligations of the Parties. The obligations of the Sellers, on the one hand, and the Purchaser, on the other hand, to effect the Closing are subject to the satisfaction (or waiver) prior to the Closing of the following conditions:

 

(a)           U.S. Antitrust Laws. The waiting periods applicable to the consummation of the transactions contemplated hereby under any U.S. Antitrust Laws, including the HSR Act, shall have expired or been terminated.

 

(b)           No Prohibition; Other Matters. No Governmental Authority shall have commenced any Action against either Sellers or the Purchaser or their respective Affiliates to enjoin or otherwise prohibit the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements. No Law shall be in effect enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements.

 

(c)           Injunctions. No court or other Governmental Authority shall have enacted, issued, promulgated, enforced, or entered any Law or issued any Governmental Order (and, if an injunction, whether temporary, preliminary, or permanent) that is in effect and prevents, restrains, enjoins, makes illegal or otherwise prohibits the consummation of any of the transactions contemplated by this Agreement or makes such consummation illegal.

 

(d)           Consents and Approvals. All Seller Required Approvals and all Purchaser Required Approvals shall have been obtained.

 

(e)           Receipt of Rating Agency Affirmation Letters. To the extent required by any Securitization Servicing Agreement with respect to the transfer thereof to the Purchaser as set forth herein, all Rating Agency Affirmation Letters shall have been obtained.

 

(f)           Eligible Servicer. The Sellers and/or the Purchaser, as the case may be, shall have received all ratings, consents, approvals and other items (including any required Permits) to satisfy the criteria under the Servicing Agreements for the Purchaser to be an eligible Servicer thereunder; provided, however, that the Purchaser shall not be entitled to assert the condition set forth in this Section 7.01(f), and this condition shall be deemed to be waived by the Purchaser, if the Purchaser is in breach of its representations, warranties and covenants under this Agreement and the br each proximately causes or contributes to the failure of this condition.

 

SECTION 7.02. Conditions to Obligations of the Sellers. The obligations of the Sellers to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or written waiver by the Sellers, at or prior to the Closing, of each of the following conditions:

 

(a)           Representations, Warranties and Covenants. (i) Each of the representations and warranties of the Purchaser set forth in this Agreement (A) that is qualified by a materiality qualifier shall be true and correct as of the date hereof and as of the Closing Date as if made on and as of the Closing Date, and (B) that is not qualified by a materiality qualifier shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if made on and as of the Closing Date, and (ii) the covenants and agreements contained in this Agreement (excluding Section 2.06 and Section 5.20) to be complied with or performed by the Purchaser on or before the Closing shall have been complied with or performed in all material respects.

 

 

(b)           Closing Deliverables. The Purchaser shall have delivered the closing deliverables set forth in Section 2.06; provided, however, that if the parties are in breach of Section 5.20 and the parties have not agreed upon the terms and conditions of the Transition Services Agreement or the Escrow Agreement prior to the Closing, as the case may be, solely for purposes of the condition set forth in this Section 7.02(b), the closing deliverables set forth in Section 2.06(b) shall be deemed not to include an executed counterpart of the Transition Services Agreement or the Escrow Agreeme nt, as applicable.

 

(c)           Consents and Approvals. The Sellers shall have obtained all Special Consents.

 

(d)           Securitization Facility Rating. Standard & Poor’s undertakes to assign ratings to the Class A-1 and Class A-2 Notes issued pursuant to the Servicing Advance Financing Agreements at the Sellers’ request and assigns such Class A-1 and Class A-2 Notes a rating of “AAA,” with the advance rates for such “AAA” rated classes being at least 65%.

 

SECTION 7.03. Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or written waiver by the Purchaser, at or prior to the Closing, of each of the following conditions:

 

(a)           Representations, Warranties and Covenants. (i) Each of the representations and warranties of the Sellers set forth in this Agreement (other than Section 3.08(a) and the first sentence of Section 3.13(b), which shall be true and correct as written as of the date hereof and as of the Closing Date as if made on and as of the Closing Date) shall be true and correct, without giving effect to any limitation as to materiality or Material Adverse Effect qualifiers set forth therein, as of the date hereof and as of the Closing Date as if made on and as of the Closing Date (except for such representations and warranties that are made as of a specific date which shall speak only as of such date); provided, however, that notwithstanding anything herein to the contrary, the condition set forth in this Section 7.03(a) shall be deemed to have been satisfied with respect to each of the representations and warranties of the Sellers set forth in this Agreement (other than Sections 3.01, 3.02, 3.04 and 3.08(a) and the first sentence of 3.13(b), which shall be true and correct as written as of the date hereof and as of the Closing Date as if made on and as of the Closing Date) even if such representations and warranties of the Sellers are not so true and correct, unless the failure of such representations and warranties of the Sellers to be so true and correct would not, individually or in the aggregate, have a Material Adverse Effect and (ii) the covenants and agreements contained in this Agreement (excluding Secti on 2.05 and Section 5.20) to be complied with by the Sellers on or before the Closing shall have been complied with or performed in all material respects.

 

 

(b)           Closing Deliverables. The Sellers shall have delivered the closing deliverables set forth in Section 2.05; provided, however, that if the parties are in breach of Section 5.20 and the parties have not agreed upon the terms and conditions of the Transition Services Agreement or the Escrow Agreement prior to the Closing, as the case may be, solely for purposes of the condition set forth in this Section 7.03(b), the closing deliverables set forth in Section 2.05(a) shall be deemed not to include an executed counterpart of the Transition Services Agreement or the Escrow Agreement , as applicable.

 

(c)           Consents and Approvals. The Purchaser shall have received, each in form and substance reasonably satisfactory to the Purchaser, the Third Party Consents, except for such Third Party Consents the absence of which would not, individually or in the aggregate, have a Material Adverse Effect.

 

(d)           Servicing Advance Financing Agreements. The Servicing Advance Financing Agreements shall have been executed by the Sellers; provided, however, that the Purchaser shall not be entitled to assert the condition set forth in this Section 7.03(d), and this condition shall be deemed to be waived by the Purchaser, if any of the conditions precedent to the Commitment Letter (excluding the condition precedent set forth in Section 2(A)(i) of the Commitment Letter) have not been satisfied.

 

(e)           Secured Loan Facility Agreements. The Secured Loan Facility Agreements shall have been executed by the Sellers; provided, however, that the Purchaser shall not be entitled to assert the condition set forth in this Section 7.03(e), and this condition shall be deemed to be waived by the Purchaser, if (i) any of the conditions precedent to the Commitment Letter (excluding the condition precedent set forth in Section 2(A)(i) of the Commitment Letter) have not been satisfied, or (ii) the Purchaser and/or the Purchaser Parent terminates the Commitment Letter or obtains Alternative Financing.

 

(f)           Audited Carve-Out Financials. The Purchaser shall have received the Audited Carve-Out Financials no later than 45 days prior to the Closing Date; provided, however, that the Purchaser shall be entitled to assert the condition set forth in this Section 7.03(f) if and only if (i) the Purchaser shall have complied in all material respects with its obligations under Section 5.06 but no committed Alternative Financing shall have been obtained, (ii) the Purchaser shall have complied in all material respects with its obligatio ns under Section 5.21(b) and (c), and (iii) such Audited Carve-Out Financials are reasonably required in connection with all or a portion of an Alternative Financing that is a capital markets transaction.

 

 

ARTICLE VIII

 

INDEMNIFICATION

 

SECTION 8.01. Survival of Representations and Warranties.

 

(a)           The representations and warranties of the Sellers contained in this Agreement shall survive the Closing until 18 months after the Closing Date; provided, however, that (i) the representations and warranties made pursuant to Sections 3.01, 3.02, 3.03, 3.04(a) and 3.25 shall survive indefinitely, (ii) the representations and warranties made pursuant to Sections 3.11, 3.15, 3.16, 3.20, 3.21, 3.22 and 3.23 shall survive the Closing until the second anniversary of the Closing, (iii) the representations and warranties dealing with Tax matters shall survive until 30 calendar days after the expiration of the applicable statute of limitations, and (iv) insofar as any claim is made by the Purchaser for the breach of any representation or warranty of the Sellers contained herein relating to employees, labor matters and employee benefit matters, such representations and warranties shall, for purposes of such claim by the Purchaser, survive until 30 calendar days after the expiration of the applicable statute of limitations governing such claims. If written notice of a claim has been given prior to the expiration of the applicable representations and warranties by the Purchaser to the Sellers, then the relevant representations and warranties shall survive as to such claim, until such claim has been finally resolved, even if losses have not been incurred or finalized as of the date of such notice of a claim.

 

(b)           The representations and warranties of the Purchaser contained in this Agreement shall survive the Closing until 18 months after the Closing Date; provided, however, that the representations and warranties made pursuant to Sections 4.01, 4.02, 4.03 and 4.08 shall survive indefinitely. If written notice of a claim has been given prior to the expiration of the applicable representations and warranties by the Sellers to the Purchaser, then the relevant representations and warranties shall survive as to such claim, until such claim has been finally resolved, even if losses have not been incurred or finalized as of the date of such notice of a c laim.

 

SECTION 8.02. Indemnification by the Sellers. The Purchaser and its Affiliates, and their respective officers, directors, employees, agents, successors and assigns (each, a “Purchaser Indemnified Party”) shall be indemnified and held harmless by the Sellers (on a joint and several basis) from and against any and all Liabilities, losses, damages, Taxes, claims, reasonable costs and expenses, interest, awards, judgments and penalties (including reasonable attorneys’ fees) actually suffered or incurred by them, including any Litigation brought or otherwise initiated by any of them (collectively, “Losses& #8221;), arising out of or resulting from:

 

(a)           the breach of any representation or warranty made by the Sellers contained in this Agreement (it being understood and agreed that other than with respect to Sections 3.23(n) and 3.24, such representations and warranties shall be interpreted without giving effect to any such limitations or qualifications as to “materiality” or “Material Adverse Effect” set forth therein);

 

(b)           the breach of any covenant or agreement by the Sellers contained in this Agreement or the Ancillary Agreements;

 

(c)           the Excluded Liabilities;

 

(d)           any Liabilities expressly assumed by the Purchaser pursuant to the proviso in Section 2.02(a)(i); or

 

(e)           any action taken or omitted to be taken by the Purchaser at the written instruction of the Sellers pursuant to Section 5.22 or otherwise reasonably taken or omitted to be taken by the Purchaser in connection with Section 5.22.

 

 

Notwithstanding anything herein to the contrary, the Purchaser hereby acknowledges and agrees that the Purchaser shall not be entitled to any indemnification pursuant to Section 8.02 for any Losses arising out of, resulting from or in connection with any claim that any Servicing Agreement was transferred to the Purchaser in breach of the terms of such Servicing Agreement to the extent (A) such claim arises out of, relates to or results from the Purchaser’s failure to satisfy the criteria under such Servicing Agreement to be an eligible Servicer to the extent such eligibility criteria is reflected in Section 4.06 or (B) the Purchaser waives or is deemed to waive the conditions set forth in Section 7.01(e) or Section 7.01(f) with respect to such Servicing Agreement.

 

SECTION 8.03. Indemnification by the Purchaser and the Purchaser Parent. The Sellers and their Affiliates, officers, directors, employees, agents, successors and assigns (each, a “Seller Indemnified Party”) shall be indemnified and held harmless by the Purchaser and the Purchaser Parent (on a joint and several basis) from and against any and all Losses arising out of or resulting from:

 

(a)           the breach of any representation or warranty made by the Purchaser contained in this Agreement (it being understood and agreed that such representations and warranties shall be interpreted without giving effect to any limitations or qualifications as to “knowledge” or “materiality” set forth therein);

 

(b)           the breach of any covenant or agreement by the Purchaser or the Purchaser Parent contained in this Agreement or the Ancillary Agreements;

 

(c)           the Assumed Liabilities;

 

(d)           any Taxes (other than Excluded Taxes) imposed with respect to the Purchased Assets, Assumed Liabilities or the Business or the income derived therefrom for any Post-Closing Period, and any Conveyance Taxes for which the Purchaser is liable pursuant to Section 5.09; or

 

(e)           the Audited Carve-Out Financials or any actions taken or omitted to be taken by the Sellers following consultation with the Purchaser pursuant to Section 5.21(a) or otherwise reasonably taken or omitted to be taken by the Sellers in connection with Section 5.21 (it being agreed that nothing in this Section 8.03(e) shall be deemed to contravene the Purchaser’s rights pursuant to Section 8.02).

 

SECTION 8.04. Limits on Indemnification; Exclusive Remedy.

 

(a)           Except for the representations and warranties set forth in Sections 3.01, 3.02(a), (b) and (c) (but only as clause (c) relates to the Servicing Agreements and the Underlying Documents), 3.03, 3.04(a), 3.05, 3.21, 3.22 and 3.23(a), the Sellers shall not be liable to any Purchaser Indemnified Party for any Losses pursuant to Section 8.02(a) (certain representations and warranties), unless and until the aggregate amount of such Losses and any Servicing Agreement Rep Losses (as defined below) incurred by all Purchaser Indemnified Parties exceeds an amount equal to 1.75% of the Indemnity Purchase Price (the “General Deductible Amount”), and then only for such Losses incurred by the Purchaser Inde mnified Parties which exceed the General Deductible Amount, and in no event shall the aggregate maximum amount recoverable by the Purchaser Indemnified Parties for any and all claims pursuant to Section 8.02(a) (other than for breach of any representation or warranty set forth in Sections 3.01, 3.02(a), (b) and (c) (but only clause (c) as relates to the Servicing Agreements and the Underlying Documents), 3.03, 3.04(a), 3.05) exceed an amount equal to 30% of the Indemnity Purchase Price. The Sellers shall not be liable to any Purchaser Indemnified Party for any Losses pursuant to Section 8.02(a) for any breach of the representations and warranties set forth in Sections 3.21 and 3.22 (collectively, “Servicing Agreement Rep Losses”) unless and until the aggregate amount of all such Servicing Agreement Rep Losses incurred by all Purchaser Indemnified Parties exceeds an amount equal to $1,000,000 (the “Servicing Agreement Rep Deductible Amount”), and then only for such Servicing Agreement Rep Losses incurred by the Purchaser Indemnified Parties which exceed the Servicing Agreement Rep Deductible Amount; provided, however, that none of the foregoing limitations shall apply to any breach of the representations and warranties set forth in Sections 3.21 and 3.22 to the extent that the breach of any such representation or warranty proximately caused the termination of the applicable Servicing Agreement by the counterparty thereto. Notwithstanding the foregoing sentence, if the Purchaser Indemnified Parties have actually suffered or incurred an aggregate amount of Losses pursuant to Section 8.02(a) in excess of the General Deductible Amount, subject to the proviso in the foregoing sentence, any Servicing Agreement Rep Losses actually suffered or incurred shall be subject to indemnification pursuant to Section 8.02(a) without regard to the Servicing Agreement Rep Deductible Amount.

 

 

(b)           Subject to Section 10.12 and except as otherwise provided in Sections 2.09, 2.10 and 5.18, and other than with respect to Sections 5.02, 5.03 and 5.07 for which specific performance shall be expressly permitted in accordance with Section 10.12, if the Closing occurs, the indemnity provisions of this Article VIII shall be the sole and exclusive remedy of the Indemnified Parties with respect to any and all claims for Losses sustained, incurred or suffered to the extent directly or indirectly relating to or arising out of this Agreement, and each of the Purchaser (on behalf of the Purchaser Indemnified Parties) and the Parent (on behalf of the Seller Indemnified Parties) waives to the fullest extent permitted under applicable Law any and all rights, claims and causes of legal action to pursue any other remedies against the other party hereto or its Affiliates, except for fraud, intentional misrepresentation or willful misconduct, now or in the future under any Law.

 

SECTION 8.05. Notice of Loss; Third Party Claims.

 

(a)           In the event that any written claim or demand for which an Indemnifying Party may have liability to any Indemnified Party hereunder is asserted against or sought to be collected from any Indemnified Party by a third party (a “Third Party Claim”), such Indemnified Party shall promptly, but in no event more than 10 days following such Indemnified Party’s receipt of a Third Party Claim, notify the Indemnifying Party in writing of such Third Party Claim, the amount or the estimated amount of damages sought thereunder to the extent then ascertainable (which estimate shall not be conclusive of the final amount of such Third Party Claim), any other remedy sought thereunder, any relevant time constraints relating thereto and, to the extent practicable, any other material details pertaining thereto (a “Claim Notice”); provided, however, that the failure to timely give a Claim Notice shall not affect the rights of an Indemnified Party hereunder unless such failure has materially prejudiced the defenses or other rights available to the Indemnifying Party with respect to such Third Party Claim. The Indemnifying Party shall have 30 days (or such lesser number of days set forth in the Claim Notice as may be required by court proceeding in the event of a litigated matter) after receipt of the Claim Notice (the “Notice Period”) to notify the Indemnified Party that the Indemnifying Party desires to defend the Indemnified Party against such Third Party Claim.

 

 

(b)           In the event that the Indemnifying Party notifies the Indemnified Party within the Notice Period that it desires to defend the Indemnified Party against a Third Party Claim in accordance with Section 8.05(a), the Indemnifying Party shall have the right to defend the Indemnified Party by appropriate proceedings and shall have the sole power to direct and control such defense at its expense, subject to the limitations set forth in this Section 8.05(b). Once the Indemnifying Party has duly assumed the defense of a Third Party Claim, the Indemnified Party shall have the right, but not the obligation, to participate in any such defense and to employ separate counsel of its choosing at its expense. If the Indemnified Party elects to participate in any such defense and to e mploy separate counsel, the Indemnifying Party shall be responsible for all reasonable costs and expenses actually incurred by the Indemnified Party in defending any such Third Party Claim (including reasonable legal fees of the Indemnified Party’s separate counsel) but only if (i) the Indemnifying Party and the Indemnified Party are both named parties to the proceedings and the Indemnified Party shall have reasonably concluded that representation of both parties by the same counsel would be inappropriate due to actual or potential conflict of interests, or (ii) the Indemnified Party assumes the defense of a Third Party Claim after the Indemnifying Party has failed to diligently pursue a Third Party Claim it has assumed, as provided in the first sentence of Section 8.05(c). The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle or compromise any Third Party Claim on a basis that would result in (A) the imposition of a consent order, injunction or decree that would restrict the future activity or conduct of the business of the Indemnified Party or any of its Affiliates, (B) a finding or admission of a violation of Law or violation of the rights of any Person by the Indemnified Party or any of its Affiliates, or (C) except to the extent (i) within the Servicing Agreement Rep Deductible Amount with respect to Servicing Agreement Rep Losses or (ii) within the General Deductible Amount with respect to other Losses, any monetary liability of the Indemnified Party that will not be promptly paid or reimbursed by the Indemnifying Party.

 

(c)           If the Indemnifying Party (i) elects not to defend the Indemnified Party against a Third Party Claim, whether by not giving the Indemnified Party timely notice of its desire to so defend or otherwise, or (ii) after assuming the defense of a Third Party Claim, fails to take reasonable steps necessary to defend diligently such Third Party Claim within ten days after receiving written notice from the Indemnified Party to the effect that the Indemnifying Party has so failed, the Indemnified Party shall have the right but not the obligation to assume its own defense; it being understood< /font> that the Indemnified Party’s right to indemnification for a Third Party Claim shall not be adversely affected by assuming the defense of such Third Party Claim. The Indemnified Party shall not settle a Third Party Claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld.

 

(d)           The Indemnified Party and the Indemnifying Party shall cooperate in order to ensure the proper and adequate defense of a Third Party Claim, including by providing access to each other’s relevant business records and other documents, and employees, subject to Section 5.03; it being understood that the costs and expenses of the Indemnified Party relating thereto shall be considered as Losses.

 

 

(e)           The Indemnified Party and the Indemnifying Party shall use reasonable best efforts to avoid production of confidential information (consistent with applicable Law), and to cause all communications among employees, counsel and others representing any party to a Third Party Claim to be made so as to preserve any applicable attorney-client or work-product privileges.

 

SECTION 8.06. Tax Treatment. The Sellers and the Purchaser and Purchaser Parent agree that all payments made by any of them to or for the benefit of the other under this Article VIII, under other indemnity provisions of this Agreement and for any misrepresentations or breaches of warranties or covenants, shall be treated as adjustments to the Aggregate Consideration for Tax purposes and that such treatment shall govern for purposes hereof except to the extent that the Laws of a particular jurisdiction provide otherwise.

 

SECTION 8.07. Consequential and Other Special Damages. Notwithstanding anything to the contrary contained in this Agreement, no Person shall be liable under this Article VIII for any consequential, punitive, special, incidental or indirect damages, including lost profits, except to the extent awarded by a court of competent jurisdiction in connection with a Third Party Claim.

 

SECTION 8.08. Adjustments to Losses for Insurance. In calculating the amount of any Losses, the proceeds actually received by an Indemnified Party or any of its Affiliates under any insurance policy or pursuant to any claim, recovery, settlement or payment by or against any other Person in each case relating to any Third Party Claim or any direct indemnity claim, net of any actual costs, expenses or premiums incurred in connection with securing or obtaining such proceeds, shall be deducted, except to the extent that the adjustment itself would excuse, exclude or limit the coverage of all or part of such Losses.

 

SECTION 8.09. No Duplication. No Loss will be given duplicative effect for purposes of indemnification under this Article VIII, and no party shall be entitled to indemnity for any Loss pursuant to any provision of this Article VIII in duplication of indemnity for the same Loss pursuant to any other provision of this Article VIII. This Section 8.09 shall in no event affect the Purchaser’s right to pursue recovery for Losses pursuant to any particular provision of Section 8.02.

 

SECTION 8.10. Mitigation. For all purposes of this Agreement, including with respect to Section 2.09, Section 2.10, Section 5.18 and this Article VIII, each Indemnified Party shall use its commercially reasonable efforts to mitigate any indemnifiable Losses or any repayment obligations set forth herein.

 

 

ARTICLE IX

 

 

SECTION 9.01. Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a)           by either the Parent or the Purchaser if the Closing shall not have occurred by October 2, 2010 (the “Termination Date”); provided that (i) if the Audited Carve-Out Financials have not been delivered to the Purchaser on or prior to August 15, 2010, the Termination Date shall automatically be extended (without any action by any of the parties being necessary) to the earlier of (A) December 2, 2010 and (B) the second Business Day of the first month following the date that is 45 days after the date on which the Audited Carve-Out Financials have been delivered to the Purchaser; and/or (ii) (A) if the Purchaser does not have Financi ng by October 1, 2010 and, as of October 1, 2010, the Purchaser has complied in all material respects with Section 5.06, then the Termination Date shall automatically be extended (without any action by any of the parties being necessary) to November 2, 2010, and (B) if the Purchaser does not have Financing by November 1, 2010 and, as of November 1, 2010, the Purchaser has complied in all material respects with Section 5.06, then the Termination Date shall automatically be extended (without any action by any of the parties being necessary) to December 2, 2010 (it being understood and agreed that in the event that the conditions to any automatic extension of the Termination Date are met such that the Termination Date is automatically extended one or more times pursuant to clauses (i) or (ii) of this Section 9.01(a), the latest “Termination Date” under such clauses shall be deemed the “Termination Date” for all purposes of this Agreement); provided, however, that the right to terminate this Agreement under this Section 9.01(a) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date;

 

(b)           by either the Parent or the Purchaser in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other Action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and nonappealable;

 

(c)           by the mutual written consent of the Parent and the Purchaser; or

 

(d)           by the Purchaser in the event that a Material Adverse Effect has occurred.

 

SECTION 9.02. Termination Fee.

 

(a)           If (i) all of the conditions to the obligations of the parties set forth in Article VII (excluding for this purpose the conditions set forth in Sections 7.03(d) and (e)) shall have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the Closing, provided that such conditions shall have been capable of being satisfied as of the date of termination of this Agreement) in accordance with the terms of this Agreement, (ii) except to the extent waived by the Sellers in accordance with this Agreement, the covenants and agreements contained in Section 5.06 shall have been complied with by the Purchaser and/or the Purchaser Parent, as the case may be, in all material r espects as of the Termination Date, (iii) the Closing has not occurred on or prior to the Termination Date due to the fact that the Purchaser does not have sufficient Financing, and (iv) the Purchaser or the Parent terminates this Agreement pursuant to Section 9.01(a), then the Purchaser and/or the Purchaser Parent shall pay to the Sellers an amount equal to the Termination Fee, in cash, by wire transfer of immediately available funds, to an account designated by the Parent no later than two Business Days after such termination.

 

 

(b)           The Sellers agree that notwithstanding anything to the contrary in this Agreement, in the event the Termination Fee becomes payable and is actually paid by the Purchaser and/or the Purchaser Parent to the Sellers, in each case in accordance with the terms of and for the reasons set forth in Section 9.02(a), (1) the receipt of such Termination Fee by the Sellers shall be the sole and exclusive remedy (other than with respect to any costs and expenses that are payable to the Sellers in the event that the Sellers prevail in a suit commenced in accordance with Section 9.02(c)) of the Sellers, their Affiliates and their respective officers, directors, employees, agents, successors and assigns against the Purchaser, the Purchaser Parent or any of their respective Affiliate s or their respective officers, directors, employees, agents, successors and assigns for, and in no event shall the Sellers, their Affiliates and their respective officers, directors, employees, agents, successors and assigns seek to recover any other money damages or seek any other remedy based on a claim in law or equity or otherwise with respect to, (A) any Loss suffered as a result of the failure of the transactions contemplated under this Agreement to be consummated, (B) the termination of this Agreement, (C) any Liabilities arising under this Agreement or (D) any Litigation arising out of or relating to any breach, termination or failure of or under this Agreement, in each case (A), (B), (C) or (D), except with respect to the matters contemplated by clause (a) of Section 9.03 which survive the termination of this Agreement, and (2) other than with respect to any costs and expenses that are payable to the Sellers in the event that the Sellers prevail in a suit commenced in accordance with Section 9.02(c ), the Sellers hereby expressly waive any and all other rights or causes of action it or its Affiliates may have against the Purchaser or its Affiliates now or in the future under any Law with respect to (A) any Loss suffered as a result of the failure of the transactions contemplated under this Agreement to be consummated, (B) the termination of this Agreement, (C) any Liabilities arising under this Agreement or (D) any Litigation arising out of or relating to any breach, termination or failure of or under this Agreement, in each case (A), (B), (C) or (D), except with respect to the matters contemplated by clause (a) of Section 9.03 which survive the termination of this Agreement.

 

(c)           The parties hereby acknowledge and agree that the agreements contained in this Section 9.02 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the parties would not enter into this Agreement. Accordingly, if the Purchaser and the Purchaser Parent fail to promptly pay the amount due to the Sellers pursuant to Section 9.02(a), and, in order to obtain such payment, the Sellers commence a suit that results in a judgment against the Purchaser and/or the Purchaser Parent for the amount of the Termination Fee or any portion thereof, then the Purchaser and/or the Purchaser Parent shall pay to the Sellers their costs and expenses (including attorneys’ fees) in connection with such suit, together with interest pay able at the Federal Funds Rate (as in effect on the date that the Termination Fee was required to be paid to the Sellers pursuant to Section 9.02(a)) on the amount awarded to the Sellers in such suit accruing from the date that the Termination Fee or portion thereof was required to be paid to the Sellers pursuant to Section 9.02(a) through the date that such amount and all of the Sellers’ costs and expenses are paid in full by the Purchaser and/or the Purchaser Parent; provided, however, that if the court in any such suit finds that the Sellers are not entitled to payment by the Purchaser and/or the Purchaser Parent of the Termination Fee or any portion thereof pursuant to the terms of this Agreement, then the Sellers shall reimburse the Purchaser and/or the Purchaser Parent, as the case may be, for their costs and expenses (including attorneys’ fees) in defending such suit.

 

 

SECTION 9.03. Effect of Termination. In the event of termination of this Agreement as provided in Section 9.01, this Agreement shall forthwith become void and there shall be no Liability on the part of either party hereto except (a) as set forth in Sections 5.03, 5.14, 5.21, 9.02, 10.01, 10.04, 10.05, 10.06, 10.07, 10.10, 10.11, 10.12, 10.14 and 10.15 and (b) that nothing herein shall relieve any party from Liability for any breach of this Agreement.

 

ARTICLE X

 

GENERAL PROVISIONS

 

SECTION 10.01. Expenses. Except as otherwise specified in this Agreement or the Ancillary Agreements, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the Ancillary Agreements and the transactions contemplated by this Agreement and the Ancillary Agreements shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

 

SECTION 10.02. Notices. All notices, requests, claims, demands and other communications required or permitted to be given hereunder shall be in writing in English and shall be delivered by hand, by internationally recognized courier or by facsimile transmission to the relevant address or facsimile number set forth below (or at such other address or facsimile number as the party shall furnish to the other party in accordance with this Section 10.02); provided that all notices sent to Barclays Bank PLC (London) pursuant to this Section 10.02 shall be sent both as a .pdf attachment to an email to the email address provided for Barclays Bank PLC (London) below and one other acceptable method of delivery. A notice shall be deemed effective hereunder upon receipt and shall be deemed to have been received at the time of delivery; provided that, where delivery occurs outside Working Hours, notice shall be deemed to have been received at the start of Working Hours on the next following Business Day. For purposes of this clause, “Working Hours” means 9:00 A.M. to 5:00 P.M. in the physical address location of the addressee on a Business Day.

 

	(a)	if to the Sellers:
		Barclays Bank PLC
		745 Seventh Avenue
		New York, NY 10019
		Facsimile: (212) 299-0313
		Attention:	Jai Westwood
		and
		Barclays Capital Inc.
		745 Seventh Avenue, 20th floor
		New York, NY 10019
		Facsimile: (212) 412-7519
		Attention:	General Counsel – Americas

		and
		Barclays Bank PLC (London)
		1 Churchill Place
		Canary Wharf
		London E14 5HP
		England
		Facsimile: +44 1452 638157 Email: ***@***
		Attention:	The Company Secretary, Barclays Bank PLC
		with a copy to:
		Sullivan & Cromwell LLP
		125 Broad Street
		New York, NY 10004
		Facsimile: (212) 558-3588
		Attention:	Mitchell S. Eitel Andrew R. Gladin
	(b)	if to the Purchaser:
		Ocwen Loan Servicing, LLC
		P.O. Box 24737
		West Palm Beach, FL ###-###-####
		Facsimile: (561) 682-8177
		Attention:	Paul A. Koches, Executive Vice President/General Counsel
		with a copy to:
		Mayer Brown LLP
		71 S. Wacker Drive
		Chicago, IL 60606
		Facsimile: (312) 701-7711
		Attention:	Elizabeth A. Raymond Jon D. Van Gorp

 

 

SECTION 10.03. Public Announcements. None of the parties hereto shall make, or cause to be made, any press release or public announcement in respect of this Agreement, any of the Ancillary Agreements, or the transactions contemplated hereby or thereby or otherwise communicate with any news media in respect thereof without the prior written consent of the other parties (unless otherwise required by Law or the rules and regulations of any applicable Self-Regulatory Organization), and the parties hereto shall cooperate as to the form, timing and contents of any such press release, public announcement or communication.

 

SECTION 10.04. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

SECTION 10.05. Entire Agreement. This Agreement, the Ancillary Agreements and, subject to Section 5.03(c), the Confidentiality Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the Sellers and the Purchaser with respect to the subject matter hereof and thereof.

 

SECTION 10.06. Assignment. This Agreement may not be assigned by operation of Law or otherwise without the express written consent of the Sellers and the Purchaser (which consent may be granted or withheld in the sole discretion of the Sellers or the Purchaser) and any such assignment or attempted assignment without such consent shall be void; provided, however, that any party may assign this Agreement or any of its rights and obligations hereunder to one or more Affiliates of such party without the consent of the other parties; and provided, further, that no such assignment shall relieve the assignor of any of its obligations hereunder.

 

SECTION 10.07. Amendment. This Agreement may only be amended or modified by an instrument in writing signed by, or on behalf of, the Sellers and the Purchaser.

 

SECTION 10.08. Waiver. Either the Purchaser or the Sellers may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto, or (c) waive compliance with any of the covenants or agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

 

SECTION 10.09. No Third Party Beneficiaries. Except for the provisions of Article VIII relating to the Indemnified Parties, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person, including any union or any employee or former employee of the Sellers, any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.

 

SECTION 10.10. Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York applicable to contracts executed in and to be performed in that State. All Litigation arising out of or relating to this Agreement shall be heard and determined exclusively in any New York federal court sitting in the Borough of Manhattan of The City of New York; provided, however, that if such federal court does not have jurisdiction over any such Litigation, such Litigation shall be heard and determined exclusively in any New York State court sitting in the Borough of Manhattan of The City of New York. Consistent with the preceding sentence, the parties hereto hereby (a) submit to the exclusive jurisdiction of any federal or state court sitting in the Borough of Manhattan of The City of New York for the purpose of any Litigation arising out of or relating to this Agreement brought by any party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Litigation, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts.

 

SECTION 10.12. Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, prior to the Closing, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any federal court sitting in the Borough of Manhattan of The City of New York (if such federal court does not have jurisdiction over any such Litigation, such Litigation shall be heard and determined exclusively in any New York State court sitting in the Borough of Manhattan of The City of New York ), this being in addition to any other remedy to which such party is entitled at law or in equity. Notwithstanding the foregoing, upon a valid termination in accordance with Section 9.01 and the payment of the Termination Fee in accordance with Section 9.02, the Sellers, in accordance with Section 9.02, shall not be entitled to any injunction or injunctions or to enforce specifically any term or provision of this Agreement, except with respect to the matters contemplated by Section 9.03(a) which survive the termination of this Agreement. If the Closing occurs, this provision shall be subject to Section 8.04(b).

 

 

SECTION 10.13. Currency. Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars.

 

SECTION 10.14. Joint Drafting. Each of the Sellers and the Purchaser has cooperated and participated equally in the drafting of this Agreement and the Ancillary Agreements. In the event any construction of this Agreement or the Ancillary Agreements is required, each of the Sellers and the Purchaser shall be deemed to have been mutually prepared by the Sellers and the Purchaser and shall not be construed against any of them solely by reason of authorship.

 

SECTION 10.15. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

 

 

 

IN WITNESS WHEREOF, the Sellers, the Purchaser and the Purchaser Parent have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.