EXHIBIT 10.8
EXECUTION COPY
MASTER FORWARD COMMITMENT AND SERVICES AGREEMENT
This Master Forward Commitment and Services Agreement (the
"Agreement") is entered into and effective as of January 1, 1996, by and between
CWM Mortgage Holdings, Inc. ("CWM") and Independent National Mortgage
Corporation ("INMC").
WITNESSETH:
WHEREAS, CWM and INMC desire to set forth the terms and conditions
under which CWM will commit to sell and assign Assets to INMC, and INMC will
commit to purchase and assume from CWM all of CWM's rights and obligations with
respect to such Assets; and
WHEREAS, CWM and INMC desire to set forth their agreement with respect
to certain other assets which CWM may purchase and hold in its portfolio, but
which are not intended to be, and are not, sold or assigned to INMC pursuant to
the terms of this Agreement; and
WHEREAS, CWM and INMC desire to set forth the terms and conditions
under which INMC will provide to CWM certain services relating to such Assets
and other assets.
NOW, THEREFORE, in consideration of the agreements herein contained,
CWM and INMC agree as follows:
Section 1. Definitions. Each term defined in this Section, when
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used in this Agreement, shall, unless the context otherwise requires, have the
following meaning:
"Adjusted Net Equity" means the purchase price paid by CWM for an
Asset (as determined pursuant to Section 4(a) hereof), less the sum of (i) any
principal amortization of such Asset and (ii) the maximum amount of any
borrowings permitted under any Reverse Repurchase Agreement or any other debt
obligation with respect to such Asset, excluding any interest attributable to
and accruing on such Reverse Repurchase Agreement or other debt obligation prior
to the related Settlement Date.
"Asset" means any Mortgage Loan, Subprime Mortgage Loan or
Manufactured Housing Loan.
"Best Efforts Rate Lock" means, with respect to an Asset, a Rate Lock
requiring delivery of such Asset, but only if such Asset is actually originated
by the related Seller/Servicer.
"Best Efforts Rate Lock Fee" means a fee, if any, paid by a
Seller/Servicer with respect to a Best Efforts Rate Lock.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means, in the case of any Asset acquired by CWM from a
Seller/Servicer pursuant to a Rate Lock, other than any Asset identified to INMC
by CWM as being an Other Asset, the related commitment made by INMC to acquire
such Asset from CWM. The price for any such Commitment shall be equal to the
related Rate Lock taken, which is based generally on the daily price sheet or
the related Seller/Servicer's master commitment.
"Commitment Pair-Off Fee" means a fee paid by CWM for a shortfall in
the delivery of Assets pursuant to Sections 5(b) or 10 hereof, in an amount
equal to the sum of (a) 0.125% and (b) "market movement" (as such term is
defined in the Seller/Servicer Guide), of the excess of (i) the aggregate
outstanding principal balance of the related Assets as of the date such
Commitment Pair-Off Fee becomes due and payable over (ii) 5% of the aggregate
principal amount of all Commitments funded by CWM during the related fiscal
quarter, or such other amount as may be agreed upon by CWM and INMC from time to
time.
"Commitment Term" means, with respect to any Commitment, the period
commencing on the date on which such Commitment becomes effective and ending (a)
in the case of a Commitment relating to a Mortgage Loan, on the 180th day or (b)
in the case of a Commitment relating to a Subprime Mortgage Loan or a
Manufactured Housing Loan, on the 360th day, in each case after the date on
which CWM has funded the Asset that is the subject of the Commitment, or such
later day as may be mutually agreed upon by CWM and INMC.
"Early Settlement Days" means, with respect to any calendar year, a
fraction (expressed as a number of days) the numerator of which is equal to the
sum of the products of (a) the outstanding principal balance of each Asset
acquired by INMC from CWM during such calendar year, as of the date such Asset
is transferred to INMC, and (b) the number of days such Asset was owned by CWM,
and the denominator of which is equal to the aggregate outstanding principal
balance of all Assets acquired by INMC from CWM during such calendar year, as of
the date such Assets were transferred to INMC, as applicable. Notwithstanding
the foregoing, Assets determined to be ineligible pursuant to Section 7(c)
hereof or unmarketable pursuant to Section 7(d) hereof shall, on the date such
determination is made, be treated
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as being held by CWM (a) in the case of a Mortgage Loan, for 180 days (or such
longer period as may be mutually agreed upon by CWM and INMC), or (b) in the
case of a Subprime Mortgage Loan or a Manufactured Housing Loan, for 360 days
(or such longer period as may be mutually agreed upon by CWM and INMC), and in
each case shall be included in the Assets acquired by INMC from CWM during the
related calendar year for purposes of this definition.
"Early Settlement Factor" means, with respect to any calendar year,
the greater of (a) 60 days minus the Early Settlement Days for such calendar
year and (b) zero.
"Early Settlement Fee" means, with respect to any calendar year, an
amount equal to a fraction, the numerator of which is equal to the product of
(a) the aggregate principal balance of each Asset transferred to INMC during
such calendar year, as of the date such Asset is transferred to INMC, (b) the
Net Spread and (c) the Early Settlement Factor, and the denominator of which is
equal to 365 days. (An example of how to calculate the Early Settlement Fee is
set forth in Exhibit A hereto.)
"Eligible Asset" means an Asset that meets the General Loan
Eligibility criteria set forth in the Seller/Servicer Guide.
"Expenses" means all expenses associated with the acquisition of an
Asset, including, without limitation, costs associated with production,
marketing, rate locks, underwriting, funding, document control, file control and
quality control.
"FNMA" means the Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
"INFC" means Independent National Finance Corporation, a division of
INMC.
"INHS" means Independent National Housing Services, a division of
INMC.
"Law" means any constitutional provision, statute or other law, rule,
regulation or interpretation of any government or any agency, bureau, board,
commission, court, department official, political subdivision, tribunal or other
instrumentality of any government, whether federal, state or local, domestic or
foreign, or any decree, injunction, judgment, order, ruling, assessment or writ.
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"LIBOR" means, with respect to any date of determination, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%)
for overnight Dollar deposits on Bloomberg at or about 11:00 a.m. (London time)
on such date, or, if such service ceases to display such information, then such
other service as may replace it for the purpose of display of such information
(the "Bloomberg Rate"). If the Bloomberg Rate cannot be determined, then LIBOR
shall mean, with respect to such date, the arithmetic mean of the rates of
interest (rounded upwards, if necessary, to the nearest 1/100th of 1%) offered
to two prime banks in the London interbank market (selected by CWM) of overnight
Dollar deposits at or about 11:00 a.m. (London time) on such date. If on any
such date only one or none of such prime banks provides such offered quotations,
LIBOR for such date shall be such other rate as shall be mutually agreed upon by
CWM and INMC.
"Mandatory Rate Lock" means a Rate Lock requiring delivery of a
specified principal amount of Assets or payment of a Rate Lock Pair-Off Fee by
the related Seller/Servicer.
"Mandatory Rate Lock Fee" means a fee paid by a Seller/Servicer with
respect to a Mandatory Rate Lock.
"Manufactured Housing Loan" means any loan secured, in whole or in
part, by a "manufactured home" described in Section 25(e)(10) of the Code, (a)
that is originated pursuant to the provisions of the Seller/Servicer Guide, (b)
that is acquired by CWM pursuant to a Rate Lock made during the term of this
Agreement, and (c) that, at the time of acquisition, CWM intends to sell to INMC
hereunder.
"Mortgage Loan" means any mortgage loan (a) that is originated
pursuant to the provisions of the Seller/Servicer Guide relating to INMC
programs, (b) that is acquired by CWM pursuant to a Rate Lock made during the
term of this Agreement, and (c) that, at the time of acquisition, CWM intends to
sell to INMC hereunder.
"Net Spread" means a rate equal to the (a) sum of (i) the year-to-date
average yield on a 30-year, 30-day FNMA commitment at par and (ii) 1.5%, minus
(b) the sum of (i) year-to-date average overnight LIBOR and (ii) 0.40%, or such
other rate as may be mutually agreed upon by CWM and INMC.
"Optional Rate Lock" means a Rate Lock under which there exists a
right, but no obligation, to deliver a specified principal amount of Assets.
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"Optional Rate Lock Fee" means a fee paid by a Seller/Servicer with
respect to an Optional Rate Lock.
"Other Asset" means, any mortgage loan or loan secured, in whole or in
part, by a "manufactured home" described in Section 25(e)(10) of the Code, that
is (a) acquired by CWM pursuant to a Rate Lock, (b) not intended to be, and does
not become, the subject of any Commitment under this Agreement, and (c)
identified as such by CWM to INMC at the time the related Rate Lock is
established.
"Rate Lock" means any commitment made by CWM to acquire an Asset from
a Seller/Servicer on which an interest rate has been locked, irrespective of
whether such Asset is or becomes the subject of any Commitment.
"Rate Lock Fee" means any Mandatory Rate Lock Fee, Best Efforts Rate
Lock Fee or Optional Rate Lock Fee paid by the related Seller/Servicer in
connection with a Master Commitment or any similar agreement to deliver an
Asset.
"Rate Lock Pair-Off Fee" means a fee paid by a Seller/Servicer for a
shortfall in the delivery of Assets subject to a Mandatory Rate Lock.
"REMIC" means any real estate mortgage investment conduit as defined
in Section 860D(a) of the Code.
"Reverse Repurchase Agreement" means any reverse repurchase agreement
entered into and effective from time to time by and between CWM and a
counterparty-purchaser, irrespective of whether INMC is a party to such
agreement.
"Seller/Servicer" means a person or entity that has entered into a
sale and/or servicing agreement with INMC, INFC, INHS or CWM incorporating the
Seller/Servicer Guide.
"Seller/Servicer Guide" means the INMC Seller/Servicer Guide, the INFC
Seller Guide or the INHS Seller Guide, as applicable, in each case as amended
from time to time, and such other comparable guides as from time to time may be
established by INMC and approved by CWM. For purposes of this definition, the
"Seller/Servicer Guide" shall (a) incorporate any exceptions thereto agreed upon
by INMC, INFC, INHS or CWM, as applicable, and the related Seller/Servicer and
(b) include the terms of any master commitment between the related
Seller/Servicer and INMC, INFC, INHS or CWM, as applicable.
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"Settlement Date" means, as to any Asset, the earliest of:
(i) the date on which such Asset is sold by INMC as part of a
whole loan sale;
(ii) the date on which such Asset is contributed to a REMIC or
other securitization vehicle by INMC; or
(iii) the last day of the applicable Commitment Term for such
Asset.
"Subprime Mortgage Loan" means any mortgage loan (a) that is
originated pursuant to the provisions of the Seller/Servicer Guide relating to
INFC programs, (b) that is acquired by CWM pursuant to a Rate Lock made during
the term of this Agreement, and (c) that, at the time of acquisition, CWM
intends to sell to INMC hereunder.
Section 2. CWM's Obligations under the Commitment.
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(a) Subject to and upon compliance with the terms and conditions
of this Agreement (including, without limitation, payment by INMC of
any Early Settlement Fee pursuant to Section 4(c) hereof), CWM agrees
to sell and assign to INMC all of CWM's rights with respect to the
Assets (including, but not limited to (i) CWM's right to sell such
Assets or offer such Assets for sale and (ii) any and all rights CWM
may have to service or master service such Assets). Notwithstanding
the foregoing, subject to Section 5(b) hereof, CWM shall not sell any
Asset to INMC hereunder prior to the Settlement Date for such Asset.
(b) It is expressly understood that CWM may acquire Other Assets
for its portfolio; provided, however, in the event that CWM receives
an offer from any third party to purchase one or more Other Assets
acquired by CWM, CWM (i) shall promptly notify INMC of the terms and
conditions of such third party offer and (ii) hereby grants to INMC an
option to purchase any such Other Assets upon the same terms and
conditions as such third party offer, such option exercisable by INMC
at any time prior to the time such third party offer shall expire in
accordance with its terms. Notwithstanding the foregoing, except as
described in this Section 2(b), CWM shall be under no obligation to
sell Other Assets to INMC pursuant to the terms of this Agreement.
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Section 3. INMC's Rights and Obligations under the Commitment.
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(a) Subject to and upon compliance with the terms and conditions
of this Agreement, INMC agrees to purchase and assume all of CWM's
rights and obligations with respect to the Assets (including, but not
limited to (i) CWM's right to sell such Assets or offer such Assets
for sale and (ii) any and all rights CWM may have to service or master
service such Assets). Notwithstanding the foregoing, subject to
Section 5(b) hereof, INMC shall not be required, nor shall it have any
right, to purchase any Asset hereunder prior to the Settlement Date
for such Asset.
(b) Notwithstanding any assignment and assumption of rights and
obligations contemplated by Sections 2(a) and 3(a) hereof, CWM shall
remain, and INMC (in its capacity as a party to such assignment and
assumption) shall become, individually liable under any Reverse
Repurchase Agreement or other debt obligation entered into by CWM with
respect to any Asset sold to INMC hereunder pursuant to the terms and
conditions of such agreement or obligation.
(c) It is expressly understood that, except as otherwise
provided in Section 2(b) hereof, INMC shall be under no obligation
pursuant to this Agreement to purchase any Other Assets which CWM may
acquire for its portfolio.
Section 4. Purchase Price and Other Related Fees.
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(a) The purchase price to be paid by CWM for each Asset to be
acquired by it shall, absent a timely objection by CWM, be the price
that INMC has, pursuant to a Commitment, agreed to pay for such Asset.
The purchase price to be paid by INMC for each Asset to be acquired by
it pursuant to a Commitment shall consist of (i) a cash payment equal
to the Adjusted Net Equity of such Asset as of its related Settlement
Date (reduced by any amounts previously delivered to CWM in respect of
such Asset pursuant to Section 6 hereof) and (ii) notwithstanding
CWM's continuing obligations to any third party lender as set forth in
Section 3(b) hereof, if any, the assumption by INMC of all of CWM's
obligations, if any, with respect to such Asset pursuant to the terms
and conditions of a Reverse Repurchase Agreement or any other debt
obligation entered into by CWM with respect to such Asset.
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(b) INMC shall be entitled to all Rate Lock Fees and Rate Lock
Pair-Off Fees, in each case relating to Assets, collected by INMC or
CWM from Seller/Servicers.
(c) INMC shall, not later than the 30th day after the end of
each calendar year (or if such 30th day is not a business day, on the
next succeeding business day) pay to CWM the Early Settlement Fee, if
any, for such calendar year.
Section 5. Settlement.
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(a) Subject to Sections 5(b) and 5(c) hereof, on the Settlement
Date for a Commitment, (i) CWM shall sell and assign to INMC all of
CWM's rights with respect to each Asset subject to settlement on such
Settlement Date, as identified by INMC, and (ii) INMC shall purchase
and assume all of CWM's rights and obligations with respect to such
Assets, in each case pursuant to the terms and conditions of this
Agreement.
(b) Notwithstanding the provisions of Section 5(a) hereof, the
event that CWM determines to sell one or more Assets subject to a
Commitment prior to the date that would otherwise constitute the
earliest Settlement Date for such Commitment in accordance with the
terms of this Agreement in order to maintain its status as a real
estate investment trust under the Code, CWM shall request in writing
that INMC agree to accelerate the Settlement Date as specified in such
request. If INMC does not agree to the accelerated Settlement Date
specified in such request within two business days of receipt of such
request, or agrees to such acceleration and subsequently fails to
settle on such accelerated Settlement Date, CWM shall thereafter be
entitled to sell such Assets to any third party on such terms as may
be agreed upon between CWM and such third party; provided, however,
that CWM shall pay to INMC a Commitment Pair-Off Fee with respect to
such Assets.
(c) Notwithstanding the provisions of Section 5(a) hereof, CWM
and INMC shall have the right to accelerate the Settlement Date for
any Commitment to such date and in such manner as may be mutually
agreed upon by CWM and INMC.
Section 6. Security for Value of Assets. In the event the aggregate
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fair market value, as determined by CWM in its reasonable business judgment, of
the Assets subject to
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Commitments during any Commitment Term is, at any point during such term, less
than an amount equal to the aggregate purchase price paid by CWM for such
Assets, net of any payments of principal received by CWM on or in respect of
such Assets (the "aggregate net purchase price"), CWM, in its sole discretion,
may require INMC, as security for INMC's obligation to purchase such Assets
hereunder, to deliver to an account designated by CWM, within two (2) business
days' notice, immediately available funds, other assets or any combination
thereof, equal to the amount by which the aggregate net purchase price exceeds
the aggregate market value of such Assets. In the event CWM does not receive
such amount within two (2) business days of such notice, (a) the obligation of
CWM to issue any further Commitments or to sell any additional Assets to INMC
under this Agreement shall cease, (b) CWM shall have a right of set-off against
any amounts, of any nature, due and owing to or for the account of INMC pursuant
to the terms of this Agreement, and (c) CWM shall have the right to sell such
Assets to third parties and INMC shall be liable to CWM for the amount by which
the aggregate net purchase price paid by CWM for such Assets exceeds the net
proceeds from any such sale; provided, however, that CWM's obligation to issue
further Commitments and sell Assets to INMC under this Agreement may, at CWM's
sole discretion, be restored at such time, in such manner and subject to such
terms and conditions as CWM may determine at such time.
Section 7. Obligation to Purchase Limited to Eligible Assets;
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Repurchase Obligation.
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(a) Notwithstanding any provision in this Agreement to the
contrary, INMC shall have no obligation to purchase an Asset hereunder
unless such Asset qualifies as an Eligible Asset on, and is not
incapable of delivery because it failed to close or was paid off prior
to, its Settlement Date.
(b) The parties agree that (i) INMC shall not amend or modify
the General Loan Eligibility criteria set forth in the Seller/Servicer
Guide without obtaining the prior written consent of CWM and (ii) upon
the written request of CWM, INMC shall revise the General Loan
Eligibility Criteria set forth in the Seller/Servicer Guide in such
manner as shall be mutually agreed upon by CWM and INMC.
(c) In the case of an Asset purchased or to be purchased by INMC
hereunder and determined, by the mutual agreement of CWM and INMC, not
to qualify as an Eligible Asset as of the related Settlement Date, CWM
shall, if INMC so elects (i) retain such Asset if not
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theretofore purchased by INMC or (ii) repurchase such Asset at a price
equal to the price paid by INMC for such Asset, net of any principal
payments received by INMC on or in respect of such Asset prior to the
date of such repurchase; provided, however, that, INMC hereby agrees
to use its best efforts, in accordance with the provisions of Section
11(a) hereof, to cause the related Seller/Servicer to repurchase such
Asset pursuant to the terms of the Seller/Servicer Guide prior to
making any request of CWM to do so.
(d) In the case of an Asset purchased or to be purchased by INMC
hereunder and determined by INMC to be unmarketable (for reasons
including, without limitation, relating to loan characteristics or
insufficient volume of loans with similar characteristics), INMC may
request that CWM either (i) retain such Asset if not theretofore
purchased by INMC or (ii) repurchase such Asset; it being understood
that CWM shall be under no obligation to honor either of such
requests. In the event that CWM agrees to repurchase such Asset, the
repurchase price shall equal the "fair market value" of such Asset as
determined in accordance with a methodology approved by the respective
boards of directors of CWM and INMC; provided, however, that no
repurchase of one or more Assets during any calendar quarter pursuant
to this Section 7(d) for an aggregate repurchase price in excess of
the amount determined by the respective boards of directors of CWM and
INMC from time to time may be consummated without the approval of such
boards of directors.
Section 8. Allocation of Risks, Expenses and Payments.
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(a) Prior to each Settlement Date:
(i) CWM shall bear (x) the prepayment risk (subject to
Section 10 hereof) and (y) the credit risk of the related Asset;
(ii) any payments accruing on such Asset shall be solely
for the account of CWM;
(iii) the portion of any repurchase or other debt
obligation attributable to interest accruing on a Reverse
Repurchase Agreement or other debt obligation entered into by CWM
with respect to such Asset prior to such Settlement Date shall be
charged to the account of CWM; and
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(iv) INMC shall bear, and shall not be reimbursed for, any
Expenses it might incur in respect of such Asset.
(b) On and after each Settlement Date:
(i) INMC shall bear (x) the prepayment risk and (y) the
credit risk of the related Asset;
(ii) any payments accruing on such Asset shall be for the
sole account of INMC;
(iii) the portion of the repurchase or other debt
obligation attributable to interest accruing on a Reverse
Repurchase Agreement or other debt obligation entered into by CWM
with respect to such Asset subsequent to such Settlement Date
shall be charged to the account of INMC; and
(iv) INMC shall bear any Expense it might incur in respect
of such Asset.
Section 9. Notice Requirements.
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(a) INMC shall notify CWM of the Assets subject to each
Settlement Date at least two business days prior to such Settlement
Date.
(b) Contemporaneously with each Settlement Date, CWM or INMC (on
behalf of CWM) shall notify the counterparty-purchaser to any Reverse
Repurchase Agreement or the obligee under any other debt obligation
entered into by CWM with respect to the related Asset of (i) the
transfer to INMC of such Asset pursuant to the terms and conditions of
this Agreement and (ii) the assumption, if any, by INMC pursuant to
Sections 3 and 4 hereof of the rights and obligations under any
Reverse Repurchase Agreement or any debt obligation to which such
counterparty-purchaser or obligee is a party.
Section 10. Remedies. In the event (A) an Asset subject to a
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Commitment (i) does not qualify as an Eligible Asset as of the end of its
Commitment Term for a given fiscal quarter (and has not been retained or
repurchased pursuant to Sections 7(c)(ii) or 7(d) hereof) or (ii) was owned by
CWM for 60 days or less and cannot be delivered because it was paid off prior to
the related fiscal quarter end, and (B) the aggregate outstanding principal
balance of all such non-Eligible Assets and pre-paid Assets during a fiscal
quarter in the aggregate exceeds 5% of the aggregate principal amount of
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all Commitments funded by CWM during such fiscal quarter, INMC shall be
entitled, at the election of CWM, to either (x) a substitute Asset that
qualifies as an Eligible Asset and that is deemed by INMC, in its sole
discretion, to be of like yield, type and principal amount as the Asset for
which it is substituted, or (y) a Commitment Pair-Off Fee.
Section 11. Services Provided by INMC.
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(a) INMC shall provide the following services in accordance with
the terms of this Agreement and customary and prudent standards of
practice:
(i) INMC shall act as master servicer with respect to each
Asset and Other Asset acquired by CWM;
(ii) INMC shall perform loan acquisition and marketing
services with respect to each Other Asset acquired by CWM; and
(iii) in the event that any Asset or Other Asset is
required to be repurchased by the related Seller/Servicer
pursuant to the related Seller/Servicer Guide, INMC shall use its
best efforts to cause such Seller/Servicer to repurchase such
Asset or Other Asset.
(b) INMC hereby agrees that it will not, nor will INMC permit
INFC or INHS to, enter into any Seller/Servicer Guide containing terms
and conditions that are inconsistent with this Agreement.
Notwithstanding the foregoing, to the extent that any term or
condition contained in any such Seller/Servicer Guide is inconsistent
with this Agreement, the parties hereto agree that, as between CWM and
INMC, the terms and conditions of this Agreement shall govern.
Section 12. Service Fees.
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(a) CWM shall, not later than the 30th day after the last
calendar day of each month (or if such 30th day is not a business day,
on the next succeeding business day), pay to INMC a master servicing
fee equal to the product of (a) the aggregate unpaid principal balance
of all Assets and Other Assets held by CWM for investment, in each
case as of the last business day of such month and (b) 0.025% per
annum (calculated on the basis of a 360-day year consisting of twelve
30-day
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months), or such other amount as may be mutually agreed upon by CWM
and INMC from time to time.
(b) CWM shall, not later than the 30th day after the last
calendar day of each calendar quarter (or if such day is not a
business day, on the next succeeding business day), pay to INMC a fee
for Expenses incurred and services rendered in connection with the
acquisition of Other Assets equal to $200.00 for each Other Asset
acquired during such calendar quarter, or such other amount as may be
mutually agreed upon by CWM and INMC from time to time.
(c) CWM shall, not later than the 30th day after the last
calendar day of each month (or if such 30th day is not a business day,
on the next succeeding business day), pay to INMC a sub-servicing fee
with respect to any Assets and Other Assets purchased by CWM on a
servicing released basis, in an amount equal to CWM's pro rata share
(based on the aggregate principal balance of such Assets and Other
Assets then owned by CWM) of the sub-servicing fee set forth in the
related sub-servicing agreement (such sub-servicing fee having been
negotiated by INMC with the related sub-servicer), or such other
amount as may be mutually agreed upon by CWM and INMC from time to
time.
(d) CWM shall, not later than the 30th day after the last
calendar day of each calendar quarter (or if such day is not a
business day, on the next succeeding business day), pay to INMC as
compensation for INMC's efforts, pursuant to Section 7(c) hereof, to
cause Seller/Servicers to repurchase Assets determined not to qualify
as Eligible Assets, a fee equal to $100.00 for each Asset so
repurchased during such calendar quarter, or such other amount as may
be mutually agreed upon by CWM and INMC from time to time.
Section 13. Indemnification.
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(a) Subject to Sections 7 and 8 hereof, INMC agrees to indemnify
and hold harmless CWM from and against all costs, including without
limitation reasonable attorney's fees, damages, liabilities, losses or
expenses of any nature, relating to (i) any obligations with respect
any Assets that arise on or after the related Settlement Date or (ii)
any failure by INMC to purchase CWM's rights or assume CWM's
obligations with respect to any Assets as required under this
Agreement.
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(b) Subject to Sections 7 and 8 hereof, CWM agrees to indemnify
and hold harmless INMC from and against all costs, including without
limitation, reasonable attorney's fees, damages, liabilities, losses
or expenses of any nature, relating to (i) any obligations with
respect any Assets that arise prior to the related Settlement Date or
(ii) any failure by CWM to sell and assign any Assets to INMC as
required under this Agreement.
Section 14. Term of Agreement.
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(a) The term of this Agreement shall be for one year from the
date first written above and shall thereafter be automatically renewed
for successive one year periods; provided, however, that this
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Agreement may be terminated upon ninety (90) days' written notice by
either party, in its sole discretion.
(b) Notwithstanding any termination of this Agreement pursuant
to Section 14(a) hereof, the provisions of Sections 4(c), 7(c), 7(d),
8, 10, 11(a), 11(c), 13, 15 hereof and this Section 14(b) shall
survive any such termination. In addition, upon any such termination
of this Agreement, any Commitment or portion thereof which remains
unfulfilled shall survive such termination.
Section 15. Miscellaneous.
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(a) Waiver of Law. No provision of the Law is waived except as
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expressly provided herein; provided, however, that CWM and INMC hereby
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expressly waive the provisions of the Law to the full extent permitted
by the Law in order to uphold the provisions and validity of this
Agreement and to cause this Agreement to be valid, binding and
enforceable in accordance with its terms upon each of them and their
respective transferees, successors and assigns.
(b) Notices. Unless otherwise specified in this Agreement, any
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notice required by this Agreement shall be transmitted in writing or
by any other form of communication (including without limitation
electronic mail) acceptable to the party to whom it is given,
addressed to the Controller, with a copy to the General Counsel, of
the party to whom it is given, and shall be effective and deemed
delivered only when received by such persons.
14
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of California.
(d) Captions. The captions to the sections, subsections and
--------
paragraphs in this Agreement are inserted for convenience only and
shall not affect the construction or interpretation hereof.
(e) Counterparts and Duplicate Originals. This Agreement and all
------------------------------------
amendments hereto may be executed in several counterparts and each
counterpart shall constitute a duplicate original of the same
instrument.
(f) Successors. Anything in this Agreement to the contrary
----------
notwithstanding, any transferee, successor or assign, whether
voluntary, by operation of law or otherwise, of the shares of CWM or
INMC shall be subject to and bound by the terms and conditions of this
Agreement as fully as though such person was a signatory hereto.
(g) Severability. Any provision hereof prohibited by or unlawful
------------
or unenforceable under any applicable law of any jurisdiction shall as
to such jurisdiction be ineffective without affecting any other
provision of this Agreement. To the full extent, however, that the
provisions of such applicable law may be waived, they are hereby
waived to the end that this Agreement be deemed to be a valid and
binding agreement enforceable in accordance with its terms.
(h) Arbitration. Any controversy or claim arising out of, or
-----------
relating to this Agreement, the breach hereof or thereof, or coverage
of this arbitration provision, shall be settled by arbitration which
shall be in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The arbitration of such issues,
including the determination of any amount of damages suffered by
either party hereto by reason of the acts or omissions of either
party, shall be final and binding upon both parties. Notwith-standing
the foregoing, the arbitrator shall not be authorized to award
punitive damages with respect to any such claim or controversy.
Neither party shall seek punitive damages relating to any matter
under, arising out of or relating to this Agreement in any other
forum.
15
(i) Third Parties. This Agreement is for the sole benefit of the
-------------
parties hereto. No creditor of either party shall have any right to
enforce any of the provisions hereof against any other party to this
Agreement. Nothing in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to this Agreement and
their respective permitted transferees, successors and assigns of
shares pursuant to Section 15(f) hereof, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability
of any third person to either party to this Agreement, nor shall any
provision give any third person any right of subrogation or action
over or against either party to this Agreement.
(j) Assignment. Neither this Agreement nor either party's rights
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or obligations under it are assignable without the written consent of
the other party, which consent may be withheld for any reason
whatsoever (whether or not reasonable).
(k) Recovery of Expenses. In the event a dispute arises with
--------------------
respect to this Agreement, the party prevailing in such dispute shall
be entitled to recover all expenses, including without limitation
reasonable attorney's fees and expenses, incurred in ascertaining such
party's rights, in preparing to enforce, or in enforcing such party's
rights under this Agreement, whether or not it was necessary for such
party to institute suit.
(l) Other Remedies. Subject to Section 15(h) hereof, the parties
--------------
hereto shall have all remedies for breach of this Agreement available
to them provided by law or equity. Without limiting the generality of
the foregoing, the parties agree that in addition to all other rights
and remedies available at law or in equity, the parties shall be
entitled to obtain specific performance of the obligations of each
party to this Agreement and immediate injunctive relief and that in
the event any action or proceeding is brought in equity to enforce the
same, neither party will use, as a defense, that there is an adequate
remedy at law. The failure by either party to this Agreement to
exercise any such remedy does not constitute a waiver of that remedy
in the future.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
CWM MORTGAGE HOLDINGS, INC.
/s/ Angelo R. Mozilo
--------------------------------------
Name: Angelo R. Mozilo
Title: Chairman of the Board of Directors
INDEPENDENT NATIONAL MORTGAGE
CORPORATION
/s/ Michael W. Perry
--------------------------------------
Name: Michael W. Perry
Title: Exec. Vice President and
Chief Executive Operating Officer
17
EXHIBIT A
EARLY SETTLEMENT FEE CALCULATION
--------------------------------
A. EARLY SETTLEMENT DAYS:
---------------------
Principal Balance Days
of Assets Held Product
- ----------------- -------- ------------
$ 900,000 120 days $108,000,000
200,000 110 days 22,000,000
1,100,000 5 days 5,500,000
800,000 50 days 40,000,000
---------- -----------------
$3,000,000 $175,500,000/Days
========== =================
Numerator = sum of products = 175,500,000
----------- = 58.5 Early
Denominator = aggregate Settlement
principal balance = 3,000,000 Days
B. EARLY SETTLEMENT FACTOR:
-----------------------
60 days - 58.50 days = 1.50 days
C. EARLY SETTLEMENT FEE:
--------------------
Early
$3,000,000 x 2.0%* x 1.5 days = $246.68 Settlement
----------------------------- Fee
365 days
_____________________________
*Calculated in accordance with the definition of Net Spread.
A-1