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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| GlassBridge Enterprises Inc (CE) | USOTC:GLAE | OTCMarkets | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 25.00 | 0.00 | 00:00:00 |
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT
REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date
of Report (date of earliest reported event):
(Exact name of registrant as specified in its charter)
Commission
File No.
(State or other jurisdiction of Incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s
Telephone Number, including Area Code:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | Not applicable | None |
Item 1.01 Entry into a Material Definitive Agreement.
Point Transaction
On December 29, 2023, GB HRP, LLC (“GB”), a wholly owned subsidiary of the Company, entered into a series of agreements with Point Digital Finance, Inc. (“Point”), including a forward flow purchase facility, pursuant to which GB has committed to purchase home equity interest option assets originated by Point, meeting certain eligibility criteria on a servicing-retained basis through the use of a master titling trust, Point Titling Trust (the “Trust”). GB has committed to purchase, through the Trust, an aggregate amount of $100,000,000 of such assets from Point with the option for GB to increase such aggregate commitment to $300,000,000, in its discretion, upon certain circumstances.
Below is a summary of each material agreement entered into in connection with the Point transaction:
Program Agreement
On December 29, 2023, Point as seller and servicer, the Trust, and GB as buyer agent entered into a program agreement (the “Program Agreement”). The Program Agreement provides for a $100,000,000 purchase commitment and a one year term of the transaction; provided, that GB has the right to increase its purchase commitment to $300,000,000 and extend the term for an additional two years at any time prior to purchasing eligible options in an aggregate amount equal to $75,000,000. Point is obligated to offer at least $5,000,000 of eligible options for purchase each month and is prohibited from offering greater than $12,000,000 of eligible options in any month. The purchase price paid by GB for such eligible options shall be equal to (a) (i) with respect to the first $10,000,000 of eligible options purchased in a given calendar month, an amount equal to one hundred five percent (105%) of the amount of such eligible option, or (ii) with respect to each eligible option purchased in a given calendar month following the first $10,000,000 of eligible options purchased during such calendar month, an amount equal to one hundred three and thirty-five one-hundredths percent (103.35%) of the amount of such eligible option, plus (b) the cost of recording the security instrument associated with such eligible option, inclusive of all mortgage registration and recording taxes and reasonable fees payable in connection therewith, plus (c) the cost of any title insurance obtained in connection with the closing of such eligible option.
So long as GB has not purchased eligible options in an aggregate amount equal to its commitment and no seller default has occurred, GB has agreed that it will not enter into any contract for the purchase of home equity options from any originator other than Point, provide any debt or equity financing to any such originator or enter into any binding commitment for the foregoing. To the extent GB violates such non-compete provision or otherwise fails to fund the purchase price of properly offered eligible options two times in a row or four times in the aggregate over the term of the transaction, GB must pay to Point a breach fee equal to seven percent (7.00%) of its maximum commitment amount as of the date of such event less the aggregate purchase price paid by GB through and including such date of determination. Certain seller default events are delineated in the Program Agreement. Upon a seller default, GB is no longer required to purchase eligible options. To the extent GB fails to fund properly offered eligible options two times in a row or four times in the aggregate over the term of the transaction, Point is permitted to stop offering eligible options for sale to GB. Each of Point and GB indemnifies the other party for certain bad acts.
Master Option Sale Agreement
On December 29, 2023, Point as seller and trust manager of the Trust, the Trust as the titling trust and buyer, and GB as buyer agent, entered into a master option sale agreement (the “Sale Agreement”). The Sale Agreement provides that Point shall offer eligible options for sale to the Trust that have been originated by Point and allocated pursuant to a process that ensures no adverse selection with respect to all eligible options offered for sale by Point to other counterparties. Each eligible option purchased by the Trust shall be allocated to a special unit of beneficial interest (“SUBI”) within the Trust beneficially owned by GB.
Once a month, GB shall fund the projected purchase price for all offered eligible options in a month. Such funding amount shall be delivered by GB to a funding account owned and maintained by Point. Point is solely permitted to use amounts in such funding account to fund the origination of such eligible options to be purchased by the Trust on behalf of GB. Point is required to deliver the option files associated with each eligible option purchased, together with an assignment of such documents in favor of the Trust, to GB’s custodian. Point is obligated to pay (a) any broker, finder, or other person claiming by, through or under Seller, and (b) all marketing, escrow, legal, documentation, initial property valuations, recording, and filing costs and expenses relating to the origination and closing of an eligible option purchased by the Trust on behalf of GB. Each party is otherwise responsible for its own expenses. Point provides certain standard representations and warranties with respect to each eligible option sold to the Trust on behalf of GB. To the extent there is a breach of a representation and warranty relating to an option sold to the Trust on behalf of Point that materially and adversely affects the value of the applicable option and/or the interests of the Trust, for the benefit of the GB, in such option and is not de minimis in nature, then Point is obligated to repurchase such option at par if such breach is not cured within ninety (90) days. Each option sold by Point to the Trust, on behalf of GB, must meet certain standard eligibility criteria and portfolio constraints.
Master Option Servicing Agreement
On December 29, 2023, Point as servicer and trust manager of the Trust, the Trust as the titling trust and owner, and GB as buyer agent, entered into a master option servicing agreement (the “Servicing Agreement”). Pursuant to the Servicing Agreement, Point serves as master servicer with respect to options acquired by the Trust on behalf of GB. Point is obligated to service the options pursuant to a servicing standard and shall take direction as servicer from GB as buyer agent. Point earns a servicing fee of 1.15% per annum based upon the outstanding amount of the assets being serviced, with such fee being increased to 1.25% per annum for any assets contributed to a securitization. Additionally, Point, as master servicer, is entitled to a share of any profits associated with an option upon the resolution or liquidation of such option equal to 5% of such profit or 10% of such profit to the extent such option has been contributed to a securitization. Upon any voluntary termination of Point as servicer by GB, Point is entitled to a termination fee. Point’s servicing fees will accrue without interest or penalty until the portfolio has sufficient cash flow to cover the payment of such fees such that there is no negative carry. Point has entered into a sub-servicing agreement with Servis One, Inc. dba BSI Financial Services pursuant to which the subservicer has agreed to provide certain asset administration duties with respect to the assets. Point is obligated to provide assistance to GB in connection with the potential securitization of options serviced by Point on behalf of GB.
Custodial Agreement
On December 29, 2023, GB as buyer agent, Point Titling Trust as titling trust, Point as trust manager and US Bank, NA (“US Bank”) as custodian entered into a custodial agreement (the “Custodial Agreement”). Pursuant to the Custodial Agreement, US Bank acts as custodian of the option files relating to all options purchased by the Trust on behalf of GB. Upon delivery of such files, US Bank shall deliver a certification of such files to GB within three (3) business days. Upon any liquidation of an option, or to the extent any document within a file is required to be corrected, the custodian shall release such files back to Point as servicer. The custodian’s fees are provided for in a separate fee agreement. The custodian is permitted to terminate its obligations upon sixty (60) days’ notice and must remain in place and assist with the transition to a successor custodian. GB is permitted to terminate the agreement at any time in its discretion.
SUBI Certificate Transfer Agreement
On December 29, 2023, Point as transferor and GB as transferee entered into a SUBI certificate transfer agreement (the “SUBI Certificate Transfer Agreement”) which provides for the transfer of the certificate evidencing beneficial ownership in the SUBI to GB.
The Program Agreement, Sale Agreement, Servicing Agreement, Custodial Agreement and SUBI Certificate Transfer Agreement have been filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this Current Report on Form 8-K. This summary description of these agreements does not purport to be complete and is qualified in its entirety by reference to these agreements, which are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
† Exhibits and schedules to this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: January 5, 2024
| GLASSBRIDGE ENTERPRISES, INC. | ||
| By: | /s/ Daniel Strauss | |
| Name: | Daniel Strauss | |
| Title: | Chief Executive Officer | |
Exhibit 10.1
[Exhibits and schedules to this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.]
EXECUTION COPY
PROGRAM AGREEMENT
Dated as of December 29, 2023
among
POINT DIGITAL FINANCE, INC.,
as Seller and Servicer,
POINT TITLING TRUST,
and
GB HRP, LLC,
as Buyer Agent,
PROGRAM AGREEMENT
THIS PROGRAM AGREEMENT (this “Agreement”) is made and entered into this 29th day of December, 2023 (the “Execution Date”), by and among POINT DIGITAL FINANCE, INC., a Delaware corporation (“Point”), as seller (in such capacity, “Seller”), as servicer (in such capacity, the “Servicer”), and as trust manager for PTT (in such capacity, the “Trust Manager”), POINT TITLING TRUST, a Delaware statutory trust (“PTT”), and GB HRP, LLC, a Delaware limited liability company (“Buyer Agent”). Seller, Servicer, PTT and Buyer Agent are sometimes collectively referred to in this Agreement as the “Parties” or each individually as a “Party.”
RECITALS
WHEREAS, Point originates real estate purchase option products (as defined more specifically herein, “Option Assets”);
WHEREAS, in accordance with the terms hereof, Seller will facilitate the purchase by, and assignment to, PTT (not in its individual capacity, but solely in its capacity as buyer of Option Assets under the hereafter defined Purchase Agreement, which purchases shall be made at the direction of Buyer Agent solely for allocation to the applicable Investor SUBIs; PTT in such capacity, “Buyer,” and together with Buyer Agent, the “Buyer Parties”) of certain Option Assets, which will then be recorded in the name of Buyer and allocated to the applicable Investor SUBI, with the terms of each such purchase or series of purchases (each, a “Programmatic Purchase”) to be determined in a separate Master Option Sale Agreement (the “Purchase Agreement”) to be entered into among Point, as seller, depositor and trust manager, PTT, as Buyer, and Buyer Agent;
WHEREAS, Point, as depositor of PTT (in such capacity, the “Depositor”) and as holder of the UTI under the Titling Trust Agreement, may from time to time cause Investor SUBIs to be sold to any entity designated by Buyer Agent pursuant to the applicable Investor SUBI Transfer Agreement, which Investor SUBIs each evidence a beneficial interest in the applicable Option Assets acquired by PTT and allocated to the applicable Investor SUBI pursuant to the applicable Investor SUBI Supplement; and Point, as Trust Manager, will update the Option Schedule (as defined in the applicable Investor SUBI Supplement) with respect to each such allocation, pursuant to the terms of the applicable Investor SUBI Supplement;
WHEREAS, all references herein to “Buyer” shall mean and refer to PTT, solely in its capacity as a buyer of Option Assets under the Purchase Agreement at the direction of Buyer Agent, for the benefit of the related Beneficial Interest Holders in the Investor SUBIs, and not PTT in its individual capacity; and
WHEREAS, Servicer desires to provide certain services relating to the Option Assets purchased under each Programmatic Purchase for the applicable Buyer Parties, and Buyer Parties desire to receive such services from the Servicer, and in addition to the terms set forth herein, the Parties will enter into one or more servicing agreements (each, a “Servicing Agreement”) in order to set forth their understanding in regard to the servicing matters.
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NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
ARTICLE
I
RECITALS INCORPORATED IN AGREEMENT; DEFINITIONS;
ACKNOWLEDGMENTS REGARDING BUYER AND BUYER AGENT
Section 1.1 Recitals. The above Recitals are hereby incorporated herein by reference.
Section 1.2 Definitions. Capitalized terms used, but not otherwise defined herein, shall have the following meanings:
“Affiliate” shall mean, as to any Person, any other Person (i) that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, or (ii) who is a director or officer (A) of such Person, (B) of any subsidiary of such Person, or (C) of any Person described in clause (i) above with respect to such Person.
“Agreement” shall have the meaning set forth in the Preamble to this Agreement.
“Allocated Eligible Option” shall mean any Eligible Option which Buyer has purchased pursuant to the Purchase Agreement.
“Applicable Law” shall mean any and all federal, state, local and/or foreign statutes, ordinances, rules, regulations, court orders and decrees, administrative orders and decrees, and other legal requirements of any type applicable to the Option Assets, Eligible Options, Program Documents or Point, whether in its capacity as Depositor, Trust Manager, Servicer, holder, Seller or originator of the Option Assets, including, but not limited to, in each case, as applicable, Credit Protection Laws, credit disclosure laws and regulations, the Fair Labor Standards Act, and state and federal usury laws.
“Bad Act” shall mean the occurrence of any one or more of the following, in each case, following any cure period explicitly set forth herein: (i) Seller or Servicer shall be in intentional and material violation, breach or default of, or shall intentionally fail to perform, observe or comply with, any covenant, obligation or agreement set forth in this Agreement or any other Program Document, or (ii) any theft or misappropriation of the funds or assets of Buyer Agent or any Beneficial Interest Holder, any act of fraud, or any act of intentional or willful material misconduct in each case by Depositor, Trust Manager, Seller or Servicer (or any of its Affiliates), which shall not be subject to any cure period, in each case, in connection with this Agreement and/or any of the Allocated Eligible Options and/or the performance of the duties, obligations or covenants of the Servicer under this Agreement or the other Program Documents, as applicable.
“Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C. §§ 101 et. seq., as amended from time to time.
“Bankruptcy Proceeding” shall mean (i) the filing by a specified Person of a petition for its bankruptcy or reorganization under the Bankruptcy Code or the laws of any state of the United States, (ii) the commencement against a specified Person with or without its consent or approval of any proceeding seeking its bankruptcy, liquidation or reorganization, appointment of a receiver or trustee of its assets, or comparable relief, which proceeding has not been dismissed or discontinued within sixty (60) days after its filing, (iii) the conversion at any time of an involuntary proceeding of the type described in clause (ii) into a voluntary proceeding with the consent of a specified Person, (iv) the entry by a court of competent jurisdiction of a final and unappealable order granting any relief of the type described in clause (i) or (ii) above, (v) the admission in writing by a specified Person of its inability to pay its debts generally as they become due and (vi) the making by a specified Person of a general assignment for the benefit of its creditors.
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“Beneficial Interest Holder” shall have the meaning set forth in the Purchase Agreement.
“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in San Francisco, California or New York, New York are authorized or required by law to remain closed.
“Buyer” shall have the meaning set forth in the Recitals to this Agreement.
“Buyer Agent” shall have the meaning set forth in the Preamble to this Agreement.
“Buyer Funding Breach” shall mean and shall be deemed to have occurred if, at any time during the Term, Buyer Agent shall have failed to direct, and to cause the funding by the Beneficial Interest Holders of, the purchase by Buyer of all of the Eligible Options offered for sale in accordance with Section 2.2 by Seller in (a) two (2) or more consecutive Option Offer Notices during the Term or (b) four (4) or more Option Offer Notices in the aggregate during the Term, excluding, in each case, any Eligible Options that Buyer Agent is not required to cause to be purchased pursuant to the terms of Section 2.3(c) (it being understood that the failure of Buyer to purchase Options for which there is a reasonable dispute as to eligibility shall not count as a failure to purchase unless and until such time as such Options are determined to be Eligible Options), and the continuance of such failure for a period of two (2) Business Days following written notice by the Seller to Buyer Agent of the occurrence thereof.
“Buyer Indemnitees” shall have the meaning set forth in Section 7.3(b).
“Buyer Parties” shall have the meaning set forth in the Recitals to this Agreement.
“Change of Control” shall mean the occurrence of any event whereby the current equity holders of Seller or their controlled Affiliates at any time for any reason cease to own, directly or indirectly, in the aggregate at least a majority of the issued and outstanding voting equity interests of Seller (as the same may be adjusted for any combination, recapitalization or reclassification into a greater or smaller number of shares or units), or cease to otherwise have primary managerial control of Seller or such Affiliate.
“Collections” shall mean, with respect to any particular Option, all payments, penalties or premiums, fees, reimbursements, proceeds (including, without limitation, Liquidation Proceeds, Insurance Proceeds and Condemnation Proceeds, and proceeds from any collateral for such Option), and all other sums and amounts paid by the applicable Homeowner or any other Person with respect to such Option.
“Consumer Information” shall mean any personally identifiable information in any form (written, electronic, or otherwise) relating to a Homeowner, including, but not limited to: a Homeowner’s name, address, telephone number, account number for the related Option, history or status of the Option, insurance carrier or payment information, tax amount or payment information; the fact that the Homeowner has a relationship with Seller or Servicer; and any other non-public personally identifiable information.
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“Credit Protection Laws” shall mean all federal, state and local laws in respect of the business of extending credit to homeowners, including without limitation, the Truth in Lending Act (and Regulation M promulgated thereunder), Equal Credit Opportunity Act (and Regulation B of the Consumer Financial Protection Bureau), Fair Credit Reporting Act, Fair Debt Collection Practices Act, Gramm-Leach-Bliley Financial Privacy Act, Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, all rules and regulations issued by the Consumer Financial Protection Bureau, Dodd–Frank Wall Street Reform and Consumer Protection Act, the Electronic Signatures in Global and National Commerce Act, the Electronic Funds Transfer Act, anti-discrimination and fair lending laws, laws relating to servicing procedures or maximum charges and rates of interest (i.e., usury), and other similar laws, each to the extent applicable, and all applicable regulations in respect of any of the foregoing.
“Depositor” shall have the meaning set forth in the Recitals to this Agreement.
“Eligible Options” shall have the meaning set forth in the Purchase Agreement.
“Execution Date” shall have the meaning set forth in the Preamble to this Agreement.
“Extension Election” shall have the meaning set forth in Section 2.1(c).
“Extension Period” means the period commencing immediately upon the expiration of the initial Scheduled Term and continuing until the twenty-four (24) month anniversary thereof.
“Funding Account” means a deposit account maintained by Seller with a commercial bank acceptable to Seller and which Seller may from time to time designate to Buyer Agent as the “Funding Account” for purposes of this Agreement and the other Program Documents. The initial Funding Account shall be maintained by Seller with Silicon Valley Bank.
“GAAP” shall mean generally accepted accounting principles in the United States.
“Governmental Authority” shall mean any federal, state, municipal, national, local or other governmental department, court, commission, board, bureau, agency or instrumentality or political subdivision thereof, or any entity or officer exercising executive, legislative or judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case, whether of the United States or a state, territory or possession thereof, a foreign sovereign entity or country or jurisdiction or the District of Columbia.
“Homeowner” shall have the meaning set forth in the Purchase Agreement.
“Homeowner Obligations” shall mean any amounts payable by a Homeowner pursuant to the Option Documents.
“Homeowner Protection Cap” shall have the meaning set forth in the Purchase Agreement.
“Investment Amount” shall have the meaning set forth in the Purchase Agreement.
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“Investor SUBI” shall have the meaning set forth in the Purchase Agreement.
“Investor SUBI Certificate” shall have the meaning set forth in the Purchase Agreement.
“Investor SUBI Supplement” shall have the meaning set forth in the Purchase Agreement.
“Investor SUBI Transfer Agreement” shall have the meaning set forth in the Purchase Agreement.
“Key Person” shall mean, individually, each of Eddie Lim, Eoin Matthews, Matt Brady and Jordan Fox.
“Key Person Event” shall mean the death, incapacity or departure from employment with Seller of (i) Eddie Lim and (ii) two or more of Eoin Matthews, Matt Brady and Jordan Fox.
“Material Adverse Change” means, with respect to a Person, any material adverse change in the business, financial condition, operations, properties or prospects of such Person.
“Material Adverse Effect” means, with respect to a Person, (a) a Material Adverse Change with respect to such Person or any of its Affiliates taken as a whole; (b) a material impairment of the ability of such Person to perform under any Program Document (which impairment cannot be timely cured, to the extent a cure period is applicable); or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Document against such Person.
“Maximum Amount” shall mean $100,000,000; provided, however, that from and after the execution and delivery by the Parties of an Extension Election with respect to the Extension Period pursuant to Section 2.1(c), the Maximum Amount shall mean $300,000,000.
“Maximum Monthly Amount” shall mean $12,000,000.
“Minimum Monthly Amount” shall mean $5,000,000.
“Option” shall have the meaning set forth in the Purchase Agreement.
“Option Agreement” shall have the meaning set forth in the Purchase Agreement.
“Option Assets” shall have the meaning set forth in the Recitals to this Agreement.
“Option Documents” shall have the meaning set forth in the Purchase Agreement.
“Option Level Detail” shall mean details about each applicable Allocated Eligible Option as set forth on Exhibit A attached hereto.
“Option Offer Notice” shall have the meaning set forth in the Purchase Agreement.
“Party” or “Parties” shall have the meaning set forth in the Preamble to this Agreement.
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“Person” shall mean an individual, a partnership, a corporation, a limited liability company, a business trust, a joint stock company, a trust, an unincorporated association, a joint venture, a Governmental Authority, or any other entity of whatever nature.
“Point Proceeds” shall have the meaning set forth in the Servicing Agreement.
“Program Documents” shall mean, collectively and each individually, this Agreement, the Purchase Agreement, the Servicing Agreement, the Titling Trust Agreement, each Investor SUBI Supplement, each Investor SUBI Transfer Agreement and all other agreements, documents, instruments and certificates heretofore or hereafter executed or delivered to Buyer Agent, any Beneficial Interest Holder or Buyer by Point or any of its Affiliates in connection with any of the foregoing, as the same may be amended, modified or supplemented from time to time.
“Programmatic Purchase” shall have the meaning set forth in the Recitals to this Agreement.
“Promotional Period” shall have the meaning set forth in the Purchase Agreement.
“Property” or “Properties” shall have the meaning set forth in the Purchase Agreement.
“Purchase Agreement” shall have the meaning set forth in the Recitals to this Agreement.
“Purchase Price” shall mean, as measured for each Eligible Option to be purchased, the sum of (a)(i) with respect to the first $10,000,000 of Eligible Options purchased pursuant to the Purchase Agreement (based on the aggregate Purchase Price thereof) in a given calendar month, an amount equal to one hundred five percent (105%) of the Investment Amount, or (ii) with respect to each Eligible Option purchased in a given calendar month following the first $10,000,000 of Eligible Options purchased pursuant to the Purchase Agreement (based on the aggregate Purchase Price thereof) during such calendar month, an amount equal to one hundred three and thirty-five one-hundredths percent (103.35%) of the Investment Amount, plus (b) the cost of recording the Security Instrument (as defined in the Purchase Agreement), inclusive of all mortgage registration and recording taxes and reasonable fees payable in connection therewith, plus (c) the cost of any title insurance obtained in connection with the closing of such Option and the related Option Documents.
“Regulatory Trigger Event” shall mean the issuance or entering by any Governmental Authority of any stay, order, judgment, cease and desist order, injunction, temporary restraining order, or other judicial or non-judicial sanction, order or ruling against any of Seller or any of Seller’s subsidiaries or Affiliates, (A) prohibiting the originating, holding, collecting, pledging, servicing, enforcing or selling of any Allocated Eligible Options by Seller, or (B) rendering either the Purchase Agreement, Program Documents or other documents related to the Allocated Eligible Options unenforceable in any material respect in a given state or other jurisdiction; provided, that, in each case, upon the favorable resolution of such inquiry, investigation, action or proceeding as reasonably determined by Buyer Agent and confirmed by written notice from Buyer Agent (whether by judgment, withdrawal of such action or proceeding or settlement of such action or proceeding), such Regulatory Trigger Event for any state or other jurisdiction shall cease to exist immediately upon such determination by Buyer Agent.
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“Risk Adjustment Percentage” shall have the meaning set forth in the Purchase Agreement.
“Scheduled Term” means the period commencing on the Execution Date and continuing until the twelve (12) month anniversary thereof, as such period may be extended pursuant to Section 2.1(c).
“Seller” shall have the meaning set forth in the Preamble to this Agreement.
“Seller Default” shall mean the occurrence of any one or more of the following, in each case, following any cure period explicitly set forth herein, if any: (i) other than as otherwise set forth in this definition, Seller shall be in violation, breach or default of, or shall fail to perform, observe or comply with any covenant, obligation or agreement set forth in this Agreement or any other Program Document, (ii) any representation, statement or warranty made or deemed made by Seller in any Program Document (other than any representation or warranty made in Section 4.2 of the Purchase Agreement with respect to a specific Option) shall not be true and correct in all material respects or shall have been false or misleading in any material respect on the date when made or deemed to have been made, except those made as of a specific date (which shall be evaluated as of such specific date), (iii) a Bad Act by Seller or any Key Person, (iv) a Key Person Event, (v) any Bankruptcy Proceeding involving Seller as debtor, (vi) Servicer shall resign as Servicer under the Servicing Agreement without the prior written consent of Buyer Agent or without Buyer Agent first appointing a substitute servicer or (vii) any other Servicer Event of Default (as such term is defined in the Servicing Agreement).
“Seller Indemnitees” shall have the meaning set forth in Section 7.3(a).
“Servicer” shall have the meaning set forth in the Preamble to this Agreement.
“Servicing Agreement” shall have the meaning set forth in the Recitals to this Agreement.
“Servicing Fee” shall have the meaning set forth in Section 3.1.
“Servicing Standard” shall have the meaning set forth in the Servicing Agreement.
“Term” shall have the meaning set forth in Section 2.1(a).
“Termination Event” shall mean the occurrence of any one or more of the following, in each case, following any cure period explicitly set forth herein (if any):
| (i) | a Seller Default; | |
| (ii) | a Regulatory Trigger Event; | |
| (iii) | a Change of Control; and | |
| (iv) | in the event that Servicer has not complied with Section 2.5 hereof. |
“Titling Trust Agreement” shall have the meaning set forth in the Purchase Agreement.
“Trust Manager” shall have the meaning set forth in the Preamble to this Agreement.
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“Underwriting Guidelines” shall mean the underwriting guidelines of Seller attached hereto as Exhibit B, as may be amended, modified or supplemented from time to time in accordance herewith.
Section 1.3 Acknowledgments Regarding Buyer and Buyer Agent. Notwithstanding anything to the contrary contained herein (a) each reference herein to “Buyer” shall mean and refer to PTT, solely in its capacity as the owner of Options purchased from Seller pursuant to the Purchase Agreement, at the direction of Buyer Agent, for the benefit of the related Beneficial Interest Holders in the Investor SUBIs, and not PTT in its individual capacity, (b) all covenants, agreements, representations, warranties and obligations of Buyer hereunder shall be deemed made, undertaken, performed and incurred, as the case may be, by PTT solely in its capacity as Buyer hereunder and under the other Program Documents, at the direction of Buyer Agent for the benefit of, and as an obligation (as applicable) of, Buyer Agent and the related Beneficial Interest Holders, and not those of PTT in its individual capacity, or as a personal covenant, agreement, representation, warranty or obligation of PTT in its individual capacity, (c) under no circumstances shall PTT in its individual capacity be personally liable for the payment or performance of any indebtedness, costs or expenses of, or any covenants, agreements, representations, warranties or obligations of, Buyer hereunder, and (d) unless otherwise expressly provided herein, all covenants, agreements, representations, warranties and obligations of Buyer Agent hereunder shall be deemed made, undertaken, performed and incurred, as the case may be, by Buyer Agent in its individual capacity and for the benefit of, and as an obligation (as applicable) of, the Beneficial Interest Holders in the Investor SUBIs (subject to the terms of the Investor SUBIs).
ARTICLE
II
GENERAL TERMS
Section 2.1 Term; Extension.
(a) The term (the “Term”) of this Agreement shall commence on the Execution Date and shall continue until the earlier of (a) 11:59 p.m. on the last day of the Scheduled Term (as the same may be extended pursuant to Section 2.1(c)) and (b) the date that Buyer, at the direction of Buyer Agent, for the benefit of the related Beneficial Interest Holders in the Investor SUBIs, shall have purchased Eligible Options in an aggregate amount equal to the Maximum Amount, as measured based upon the aggregate Purchase Price of Eligible Options purchased under the Purchase Agreement, unless sooner terminated in accordance with the provisions hereof, and subject to extension pursuant to Section 2.1(c). The Servicer shall collect all Homeowner Obligations under the Allocated Eligible Options purchased under the Purchase Agreement during the Term in accordance with the Servicing Standard.
(b) Buyer Agent has the right to terminate this Agreement, the Purchase Agreement and the commitment of Buyer Agent to direct, and to cause the funding by the Beneficial Interest Holders of, the purchase Eligible Options hereunder and thereunder (i) immediately upon the occurrence of a Termination Event or (ii) upon delivery to Seller of not less than ninety (90) days prior written notice of Buyer Agent’s election to terminate this Agreement and the Purchase Agreement in its sole discretion. In addition to the foregoing, this Agreement, the Purchase Agreement and the commitment of Buyer Agent to direct, and to cause the funding by the Beneficial Interest Holders of, the purchase of Eligible Options hereunder and thereunder will terminate automatically if any Bankruptcy Proceeding occurs with Seller as debtor. Seller has the right to terminate this Agreement, the Purchase Agreement and the commitment of Seller to offer Eligible Options for sale to Buyer Parties hereunder and thereunder at any time upon written notice to Buyer Agent following the occurrence of a Buyer Funding Breach.
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(c) At any time prior to the expiration of the Scheduled Term, (i) the Parties may elect by mutual written agreement or (ii) provided that Buyer has not purchased Eligible Options in an aggregate amount greater than $75,000,000, as measured based upon the aggregate Purchase Price of Eligible Options purchased under the Purchase Agreement, Buyer Agent in its sole discretion may elect by written notice to Seller (each such agreement or notice under the foregoing subclause (i) or (ii), as the case may be, an “Extension Election”), to extend the Scheduled Term for the Extension Period. Effective as of the execution and delivery of an Extension Election, the Scheduled Term shall be extended to include the Extension Period, and the Maximum Amount shall be modified as set forth in the definition thereof, in each case, without further action of the Parties.
(d) Notwithstanding the foregoing, other than the provisions set forth in this Agreement setting forth the obligation of Buyer Agent to direct, and to cause the funding by the Beneficial Interest Holders of, the purchase of any Eligible Options, and any obligation of Seller to offer any Eligible Options for sale hereunder (all of which provisions shall be terminated), all of the other provisions set forth in this Agreement shall survive any such termination until the final and complete payment of Collections with respect to all Allocated Eligible Options remaining as of the date of such termination.
Section 2.2 Seller Offers; Maximum Amount. Pursuant to the Purchase Agreement, Seller shall from time to time during the Term offer to sell Eligible Options to Buyer, in an amount not less than, for any calendar month, the applicable Minimum Monthly Amount of Eligible Options originated by Seller during such calendar month (as measured based on the aggregate Purchase Price paid by Buyer with respect to such Eligible Options), with the Eligible Options so offered and allocated to be determined by Seller in accordance with the Investor Allocation Process attached as Exhibit G to the Purchase Agreement. Buyer Agent shall direct, and shall cause the funding by the Beneficial Interest Holders of, the purchase by Buyer from Seller of all such Eligible Options offered by Seller in an amount not to exceed, (i) in the aggregate during the Term, the Maximum Amount, and (ii) in the aggregate for any calendar month during the Term, the Maximum Monthly Amount. The Maximum Amount and Maximum Monthly Amount will be measured based upon the aggregate Purchase Price paid by Buyer with respect to all Eligible Options purchased under the Purchase Agreement from the commencement of the Term (with respect to the Maximum Amount) or the calendar month (with respect to the Maximum Monthly Amount), through the date of measurement. Buyer Agent shall direct, and shall cause the funding by the Beneficial Interest Holders of, the purchase by Buyer of all Eligible Options offered for sale by Seller up to the Maximum Amount or the Maximum Monthly Amount, as the case may be, subject to the terms and conditions of this Agreement and the Purchase Agreement.
Section 2.3 Purchases and Funding.
(a) In accordance with the terms and conditions set forth herein, Buyer Agent shall direct, and shall cause the funding by the Beneficial Interest Holders of, the purchase by Buyer of all Eligible Options from Seller pursuant to the terms of the Purchase Agreement. Each Programmatic Purchase from Seller and the funding of such purchase by Buyer shall be governed by the terms of the Purchase Agreement and the other Program Documents. Buyer Agent shall only direct, and cause the funding by the Beneficial Interest Holders of, the purchase of Eligible Options.
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(b) Sales of Eligible Options to Buyer shall be effected pursuant to the terms of Article 2 of the Purchase Agreement. The closing of the purchase of each Eligible Option shall be on the terms set forth in the Purchase Agreement, with Buyer delivering the Purchase Price for the applicable Eligible Option(s) prior to the closing of such Option Assets pursuant to the terms of Article 2 of the Purchase Agreement. Subject to the terms of the Purchase Agreement, Seller shall make such disbursements from the Funding Account as frequently as necessary to comply with the funding requirements of the Eligible Options to be purchased by Buyer.
(c) At all times during the Term, Buyer Agent shall direct, and shall cause the funding by the Beneficial Interest Holders of, the purchase by Buyer of all such Eligible Options offered by Seller to Buyer Parties pursuant to the terms hereof and the Purchase Agreement; provided, that to the extent (i) a Termination Event has occurred and is continuing during this period, (ii) any purchase would violate the criteria set forth on Exhibit E of the Purchase Agreement, (iii) any event which has a Material Adverse Effect on Seller’s ability to perform any of its material obligations under any applicable Program Documents has occurred and is continuing during this period, or (iv) the aggregate Purchase Price for such Eligible Options would cause the aggregate amount of Eligible Options purchased under this Agreement to be an amount in excess of the Maximum Amount for the Term or the Maximum Monthly Amount for the applicable calendar month, Buyer Agent shall not be obligated to direct, or cause the funding by the Beneficial Interest Holders of, the purchase of any such Eligible Options and shall notify Seller in writing within five (5) Business Days as to whether Buyer Agent has elected to cause the purchase any such Eligible Options (it being understood that a failure of Buyer Agent to notify Seller in writing within such five (5) Business Day period shall be deemed to be a refusal of Buyer Agent to cause the purchase of such Eligible Options). For the avoidance of doubt, upon the occurrence and continuation of any of the foregoing, neither Buyer Agent nor any Beneficial Interest Holder shall be under any obligation to remit funds to the Funding Account.
Section 2.4 Titling Trust and SUBIs. The Parties agree that Buyer Agent is authorized and entitled to make determinations and decisions with respect to PTT as Buyer hereunder solely with respect to Eligible Options that have been purchased by PTT and allocated or to be allocated to the applicable Investor SUBI.
Section 2.5 Notification of Inquiry. Subject to any legal restrictions imposed by federal or state regulators or on disclosure of pending investigations, Seller shall notify Buyer Agent promptly (in any event, within ten (10) Business Days) after Seller is formally notified by the Consumer Financial Protection Bureau (or any other Governmental Authority responsible for the regulation of consumer financial products and services) that such Governmental Authority has opened a formal regulatory inquiry or taken any other formal regulatory action with respect to the activities of Seller (whether or not related to the Option Assets), or begun any formal or informal proceedings which have the reasonable potential of ending with or in a Regulatory Trigger Event.
Section 2.6 Funding Account. Seller shall establish and maintain the Funding Account during the Term of this Agreement for purposes of receiving remittances from Beneficial Interest Holders, at the direction of Buyer Agent (or by Buyer Agent, for and on behalf of the Beneficial Interest Holders) in respect of the Purchase Price of Options sold to Buyer pursuant to the terms of the Program Documents. Seller shall make such disbursements from the Funding Account as may be necessary from time to time to comply with the funding requirements of the Eligible Options purchased by Buyer, and to pay the Purchase Price therefor, as more particularly described in the Purchase Agreement. Buyer Agent shall be granted view-only access to the Funding Account.
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Section 2.7 Homeowners. Upon the request of Buyer Agent at any time after two (2) years have passed from the date of origination of an Allocated Eligible Option, Seller shall offer to the Homeowner with respect to such Allocated Eligible Option a reduction in the Homeowner Protection Cap relating to such Allocated Eligible Option in an amount satisfactory to Buyer Agent to the extent such Homeowner is able to refinance or sell the related Property within six (6) months.
Section 2.8 Non-Compete. During the Term, and provided that (i) Buyer shall not have purchased Eligible Options pursuant to the Purchase Agreement in an aggregate amount equal to or greater than the Maximum Amount as of any date of determination (based on the aggregate Purchase Price thereof) and (ii) no Seller Default shall have occurred, Buyer Agent shall not, and shall not permit its Affiliates or any Beneficial Interest Holder to, enter into any contract for the purchase of home equity options from any originator other than Seller, provide any debt or equity financing to any such originator or enter into any binding commitment for the foregoing.
Section 2.9 Modification of Underwriting Criteria or Allocation Process. Neither the Underwriting Guidelines or the Investor Allocation Process attached as Exhibit G to the Purchase Agreement shall be materially modified with respect to Allocated Eligible Options in a manner that would materially and adversely affect such Allocated Eligible Options without the prior written consent of Buyer Agent in its sole discretion.
ARTICLE
III
FEES
Section 3.1 Servicing Fees. As compensation for the services provided by Servicer to Buyer Parties hereunder and in the Servicing Agreement, Servicer shall be paid a fee (the “Servicing Fee”), as described in the Servicing Agreement and payable in accordance therewith. Buyer Parties shall also pay such additional fees and expenses as may be required pursuant to the terms of the Servicing Agreement.
Section 3.2 Breach Fee. Upon the occurrence of any Buyer Funding Breach or any breach by Buyer Agent of the terms of Section 2.8 hereof, Buyer Agent and the Beneficial Interest Holders shall pay to Seller, within fifteen (15) Business Days following the delivery by Seller to Buyer Agent of written notice of the occurrence of such event, a fee in an amount equal to the product of (a) seven percent (7.00%), multiplied by (b) an amount equal to (i) the applicable Maximum Amount as of the date of such event, minus (ii) the sum of (A) the aggregate Purchase Price paid by Buyer Parties with respect to Eligible Options through and including such date of determination plus (B) the positive result, if any, of (1) the aggregate Minimum Monthly Amount for all of the months occurring during the Term up to such date of determination (including the month in which such date of determination occurs) minus (2) the aggregate amount of Eligible Options offered for sale by Seller to Buyer Agent (as measured based on the aggregate Purchase Price with respect to such Eligible Options) plus (C) the positive result, if any, of (1) the applicable Maximum Amount as of the date of such event minus (2) the sum of (x) (I) Maximum Monthly Amount multiplied by (II) the number of months left in the Term plus (y) the aggregate purchase price paid by Buyer Parties through and including such date of determination.
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ARTICLE
IV
REPORTING; ACCESS
Section 4.1 Monthly Performance Report. Each calendar month during the Term of this Agreement, Servicer will deliver to Buyer Agent a monthly summary report, in computer file form reasonably accessible and usable by Buyer Agent, or via access to an electronic portal containing such information, as of the end of the immediately preceding calendar month, with respect to all Allocated Eligible Options, which shall include (a) a monthly collections report (in form and with details and reporting information reasonably acceptable to Buyer Agent) on the entire portfolio of Allocated Eligible Options, (b) Option Level Detail regarding the entire portfolio of Allocated Eligible Options, and (c) such other details as Buyer Agent and Servicer may from time to time reasonably agree, all prepared by Servicer and certified to its knowledge as being true, correct and complete in all material respects as reported to and understood by the Servicer. Such summary report and certification of the Servicer shall be delivered to Buyer Agent on or before the tenth (10th) Business Day after the end of each month.
Section 4.2 Financial Reports. The Servicer shall deliver to Buyer Agent the following financial statements and reports with respect to the Servicer on a consolidated basis and at the times indicated below:
| (i) | Quarterly, within forty-five (45) days after the end of each period, a detailed trial balance and written report, which shall include (i) a balance sheet as of the last day of such quarterly period, and (ii) a statement of income for such quarterly period; and |
| (ii) | Annually, within one hundred twenty (120) days after the end of each fiscal year of Seller, a balance sheet, statement of income, statement of members’ equity, and statement of cash flows, all generated in accordance with GAAP for such fiscal year, and reviewed by Seller’s certified independent public accountants; provided, that, only to the extent otherwise undertaken by the Seller in any fiscal year, within one hundred twenty (120) days after the end of such fiscal year, an audited balance sheet, audited statement of income, audited statement of members’ equity, and audited statement of cash flows, including notes thereto, all generated in accordance with GAAP for such fiscal year. |
Section 4.3 Access. In addition to the reporting requirements contained in this Article IV, Buyer Agent or an independent third party acting on behalf of Buyer Agent, in each case at the sole expense of Buyer Agent, shall be granted access to all applicable books and records of Seller, Servicer and PTT reasonably appropriate or necessary to complete customary inspections for purposes of this Agreement and the other Program Documents (including compliance therewith/herewith), relating to the Options; provided, however, that in the absence of a Seller Default, (a) the frequency of such field exams shall be limited to no more than one (1) time per calendar quarter and (b) such field exams shall be scheduled at least five (5) Business Days in advance, during normal business hours and at such times as are reasonably convenient for Seller and Servicer. Any such inspection would include examination of the following: (i) the Option Files (as defined in the Purchase Agreement) applicable to the Allocated Eligible Options, including credit file collateral review, (ii) option level performance testing, (iii) cash reconciliation review and (iv) collection efforts review. If the inspection undertaken pursuant to this Section 4.3 reveals an under- or over-payment by the auditing Party, then the Parties shall promptly, within thirty (30) days, trigger the true-up payments necessary to correct the situation.
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ARTICLE
V
REPRESENTATIONS AND WARRANTIES OF SELLER
On the date hereof, and on the date of each acquisition of Eligible Options pursuant to the Purchase Agreement, Seller and, where indicated, PTT, hereby represent and warrant to Buyer Agent and Buyer as follows:
Section 5.1 Organization; Qualification; Good Standing; Authorization. Seller is a corporation, and PTT is a statutory trust, duly organized and validly existing under the laws of its state of formation, with full power and authority to own and operate its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Program Documents (to the extent such Program Documents are in existence) to which it is a party. Each of Seller and PTT is in good standing in the State of Delaware. Each of Seller and PTT is duly qualified to do business and, to the extent applicable, has all licenses necessary to carry on its business as now being conducted by such Party and is licensed, qualified and in good standing in each other jurisdiction in which the nature of its business, assets and properties, including the performance of its obligations under this Agreement and the other Program Documents (to the extent such Program Documents are in existence) to which it is a party, requires such qualification. Each of Seller and PTT have the requisite corporate (or other) power and authority to execute and deliver this Agreement and each other Program Document (to the extent such Program Documents are in existence) to which it is a party, and to perform its obligations as contemplated hereby or thereby, and performance hereunder by each such entity does not constitute a violation of such entity’s certificate of incorporation, bylaws or any other valid instrument to which such entity is a party or by which such entity may be bound. All requisite corporate (or other) action has been taken by each of Seller and PTT to make this Agreement and each other Program Document (to the extent such Program Document is in existence) to which it is a party valid and binding upon Seller in accordance with its terms, except that the enforceability thereof may be subject to (a) the effects of any applicable bankruptcy, insolvency, reorganization, receivership, conservatorship or other similar laws affecting the rights of creditors generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).
Section 5.2 Due Execution; Validly Binding Agreement. This Agreement has been duly authorized, executed and delivered by each of the Seller and PTT and constitutes a legal, valid and binding obligation of each of the Seller and PTT, enforceable against it in accordance with its terms, except that the enforceability thereof may be subject to (a) the effects of any applicable bankruptcy, insolvency, reorganization, receivership, conservatorship or other Laws affecting the rights of creditors generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).
Section 5.3 No Consent Required. No consent, approval, authorization or order is required for the transactions contemplated by the Program Documents (to the extent such Program Documents are in existence) from any Governmental Authority having jurisdiction over any of the Seller or PTT or, if required, such consent, approval, authorization or order has been or will, prior to the Execution Date, be obtained.
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Section 5.4 Ordinary Course of Business. The consummation of the transactions contemplated by the Program Documents (to the extent such Program Documents are in existence) are in the ordinary course of business of each of Seller and PTT.
Section 5.5 No Conflicts. None of the execution and delivery of this Agreement or any other Program Document (to the extent such Program Document is in existence) to which it is a party, the holding, selling, origination or servicing of the Eligible Options by each of the Seller and PTT, the consummation of the transactions contemplated hereby or by any other Program Document (to the extent such Program Document is in existence) to which any of the Seller or PTT (or any Affiliate) is a party, nor the fulfillment of or compliance with the terms and conditions of this Agreement or of any other Program Document (to the extent such Program Document is in existence) to which any of the Seller or PTT (or any Affiliate) is a party, (a) conflict with or result in a breach of any of the terms, conditions or provisions of any of the Seller’s or PTT’s (or such Affiliate’s) organizational documents or any material agreement or instrument to which the Seller or PTT (or any Affiliate) is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or (b) result in the violation of any Applicable Law, in any material respect, to which the Seller or PTT or any Affiliate or their respective property is subject, or (c) materially impair the ability of Buyer Parties to realize on the Allocated Eligible Options, or materially impair the value of the Allocated Eligible Options.
Section 5.6 No Litigation. There is no suit, action, litigation or other proceeding or governmental or administrative investigation or inquiry, pending or, to the best knowledge of Seller or PTT, threatened against Seller or PTT, by any Governmental Authority, that could reasonably be expected to prevent or prohibit Seller from complying in full with the provisions of this Agreement or that would reasonably be expected to result in any material adverse change in the business, operations, financial condition, properties or assets of Seller or PTT, or in any material impairment of the right or ability of Seller or PTT to carry on its business substantially as now conducted, or in any material liability on the part of Seller or PTT, or which would reasonably be expected to draw into question the validity of any Program Document (to the extent such Program Document is in existence), the Allocated Eligible Options or the Eligible Options.
Section 5.7 Ability to Perform; Solvency. Neither Seller nor PTT believes, nor does it have any reason or cause to believe, that it cannot perform, in all material respects, the covenants contained in this Agreement and the Program Documents (to the extent such Program Documents are in existence) to which Seller, PTT or any of their Affiliates is a party. Each of Seller and PTT is solvent and the sale of the Program Assets will not cause Seller or PTT to become insolvent. The sale of the Program Assets is not undertaken with the intent to hinder, delay or defraud any of Seller’s or PTT’s creditors.
Section 5.8 Seller’s Origination. Seller’s decision to originate any Option Asset is an independent decision based upon Seller’s Underwriting Guidelines, and is in no way made as a result of any Buyer Party’s decision to purchase, or not to purchase, or the price any Buyer Party may offer to pay for, an Eligible Option with respect to any such Option Asset, if originated.
Section 5.9 Own Advisors. Each of Seller and PTT acknowledges that it has had an opportunity to consult with an attorney and/or other relevant professional advisors prior to the execution of this Agreement.
Section 5.10 No Fiduciary Relationship. Each of Seller and PTT acknowledge that Seller, PTT and their Affiliates, on the one hand, and Buyer Agent, on the other hand, are not in a fiduciary, agency or otherwise special relationship, including one of trust, confidence, privity, partnership or joint venturers, and that Seller and its Affiliates and each of the Buyer Parties are each acting for their own self-interest.
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Section 5.11 Notice of Modified Underwriting Criteria or Allocation Process. Seller will provide (or cause to be provided) to Buyer Agent prompt notice of any modification or amendment to the Underwriting Guidelines or the Investor Allocation Process attached as Exhibit G to the Purchase Agreement, with such notice to set forth the modifications or amendments and to include a copy of the Underwriting Guidelines or the Investor Allocation Process attached as Exhibit G to the Purchase Agreement as so modified or amended.
ARTICLE
VI
REPRESENTATIONS AND WARRANTIES OF BUYER AGENT
On the date hereof, and on the date of each acquisition of Eligible Options pursuant to the Purchase Agreement, Buyer Agent represents and warrants to Seller as follows:
Section 6.1 Organization; Authorization. Buyer Agent is duly organized and validly existing under the laws of its state of formation, with full power and authority to own and operate its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Program Documents to which it is a party. Buyer Agent is in good standing in the State of Delaware. Buyer Agent is duly qualified to do business and, to the extent applicable, has all licenses necessary to carry on its business as now being conducted by such Party and is licensed, qualified and in good standing in each other jurisdiction in which the nature of its business, assets and properties, including the performance of its obligations under this Agreement and the other Program Documents to which it is a party, requires such qualification. Buyer Agent has the requisite corporate power and authority to execute and deliver this Agreement and each other Program Document to which it is a party, and to perform its obligations as contemplated hereby or thereby, and performance hereunder by each such entity does not constitute a violation of such entity’s articles of incorporation, bylaws or any other valid charter instrument to which such entity is a party or by which such entity may be bound. All requisite organizational action has been taken by Buyer Agent to make this Agreement and each other Program Document to which it is a party valid and binding upon Buyer Agent in accordance with its terms, except that the enforceability thereof may be subject to (a) the effects of any applicable bankruptcy, insolvency, reorganization, receivership, conservatorship or other similar laws affecting the rights of creditors generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).
Section 6.2 Due Execution; Validly Binding Agreement. This Agreement has been duly authorized, executed and delivered by Buyer Agent and constitutes a legal, valid and binding obligation of Buyer Agent, enforceable against it in accordance with its terms, except that the enforceability thereof may be subject to (a) the effects of any applicable bankruptcy, insolvency, reorganization, receivership, conservatorship or other Laws affecting the rights of creditors generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).
Section 6.3 No Consent Required. No consent, approval, authorization or order is required for the transactions contemplated by the Program Documents from any Governmental Authority having jurisdiction over Buyer Agent or, if required, such consent, approval, authorization or order has been or will, prior to the Execution Date, be obtained.
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Section 6.4 No Conflicts. None of the execution and delivery of this Agreement or any other Program Document to which it is a party, the holding, origination or servicing of the Eligible Options by Buyer Agent, the consummation of the transactions contemplated hereby or by any other Program Document to which Buyer Agent is a party, nor the fulfillment of or compliance with the terms and conditions of this Agreement or of any other Program Document to which Buyer Agent is a party, will conflict with or result in a breach of any of the terms, conditions or provisions of Buyer Agent’s organizational documents or any legal restriction or any material agreement or instrument to which Buyer Agent is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or result in the violation of any Applicable Law to which Buyer Agent or its property is subject.
Section 6.5 No Litigation. There is no suit, action, litigation or other proceeding or governmental or administrative investigation or inquiry, pending or, to the best knowledge of Buyer Agent, threatened, against Buyer Agent by any Governmental Authority that could reasonably be expected to prevent or prohibit Buyer Agent from complying in full with the provisions of this Agreement or that could reasonably be expected to result in any material adverse change in the business, operations, financial condition, properties or assets of Buyer Agent, or in any material impairment of the right or ability of Buyer Agent to carry on its business substantially as now conducted, or in any material liability on the part of Buyer Agent, or which would reasonably be expected to draw into question the validity of any Program Document, the Allocated Eligible Options or the Eligible Options.
Section 6.6 Own Advisors. Buyer Agent acknowledges that it has had an opportunity to consult with an attorney and/or other relevant professional advisors prior to the execution of this Agreement. Buyer Agent acknowledges that Seller has advised it that it should seek such counsel.
Section 6.7 No Fiduciary Relationship. Buyer Agent acknowledges that Seller and its Affiliates, on the one hand, and Buyer Parties, on the other hand, are not in a fiduciary, agency or otherwise special relationship, including one of trust, confidence or privity, and that Seller and its Affiliates and Buyer Parties are each acting for their own self-interest.
ARTICLE
VII
GENERAL
Section 7.1 Confidentiality. Buyer Agent, on its own behalf and on behalf of each Beneficial Interest Holder, agrees to keep confidential all non-public information provided to it by Seller, its Affiliates, as part of the Option Assets, or any other reasonably secret, confidential, or proprietary information furnished to any Buyer Party or Buyer Agent pursuant to this Agreement or any other Program Document (collectively, the “Seller Information”); provided that nothing herein shall prevent Buyer Agent or any Beneficial Interest Holder from disclosing any Seller Information:
| (a) | in connection with this Agreement and the other Program Documents and not for any other purpose, (x) to any Affiliate of Buyer Agent or any Beneficial Interest Holder, or (y) any of their respective Affiliates, employees, directors, agents, attorneys, accountants and other professional advisors (collectively, the “Buyer Representatives”), it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Seller Information, |
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| (b) | subject to an agreement to comply with the provisions of this Section 7.1 (or other provisions at least as restrictive as this Section 7.1), to use Seller Information only in connection with this Agreement and the other Program Documents and not for any other purpose, to any actual or bone fide prospective permitted assignees and participants in any of the interests of Buyer Agent or any of the Beneficial Interest Holders under or in connection with this Agreement, |
| (c) | to any Governmental Authority purporting to have jurisdiction over Buyer Agent, any of the Beneficial Interest Holders, any of their respective Affiliates or any Buyer Representative, |
| (d) | in response to any order of any court or other Governmental Authority or as may otherwise be required to be disclosed pursuant to any Applicable Law (including, without limitation, any Applicable Law relating to reporting requirements by public companies), |
| (e) | that is a matter of general public knowledge or that has heretofore been made available to the public by any Person other than Buyer Agent, any Beneficial Interest Holder or any Buyer Representative, or |
| (f) | in connection with the exercise of any remedy hereunder or under any other Program Document. |
Buyer Agent, on its own behalf and on behalf of each Beneficial Interest Holder, understands and agrees that the Consumer Information is subject to Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801 et seq., the FTC’s Privacy Regulations, 16 CFR Part 313, and Standards for Safeguarding Customer Information, 16 CFR Part 314 and any other applicable federal and state privacy laws and regulations other Applicable Law of any government or agency or instrumentality thereof regarding the privacy or security of Consumer Information (the “Privacy Requirements”), including new cyber-security laws taking effect in (for example) California and New York. Buyer Agent, on its own behalf and on behalf of each Beneficial Interest Holder, agrees that it shall comply with the Privacy Requirements and shall cause all of its agents, employees, affiliates and any other Person that receives the Consumer Information from Seller or its Affiliates, to comply with the Privacy Requirements and Buyer Agent, on its own behalf and on behalf of each Beneficial Interest Holder, shall promptly notify Seller of receiving actual knowledge of any breach of the Privacy Requirements. Furthermore, Buyer Agent shall, and shall cause each Beneficial Interest Holder to maintain (and shall cause all of their respective agents, employees, affiliates and any other person or entity that receives the Consumer Information from Seller to maintain) appropriate administrative, technical and physical safeguards to protect the security, confidentiality and integrity of Consumer Information, including, if applicable, maintaining security measures designed to meet the Privacy Requirements.
Seller agrees to keep confidential all non-public information provided to it by Buyer Agent, any Beneficial Interest Holder or their Affiliates, or any other information furnished to Seller pursuant to this Agreement or any other Program Document (collectively, the “Buyer Information”); provided that nothing herein shall prevent Seller from disclosing any Buyer Information
| (a) | in connection with this Agreement and the other Program Documents and not for any other purpose, (x) to any Affiliate of Seller, or (y) any of its respective Affiliates, employees, directors, agents, attorneys, accountants and other professional advisors (collectively, the “Seller Representatives”), it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Buyer Information, |
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| (b) | subject to an agreement to comply with the provisions of this Section 7.1 (or other provisions at least as restrictive as this Section 7.1), to use the Buyer Information only in connection with this Agreement and the other Program Documents and not for any other purpose, to any actual or bone fide prospective permitted assignees and participants in Seller’s interests under or in connection with this Agreement, |
| (c) | to any Governmental Authority purporting to have jurisdiction over Seller or any of its Affiliates or any Seller Representative, |
| (d) | in response to any order of any court or other Governmental Authority or as may otherwise be required to be disclosed pursuant to any Applicable Law, |
| (e) | that is a matter of general public knowledge or that has heretofore been made available to the public by any Person other than Seller or any Seller Representative, or |
| (f) | in connection with the exercise of any remedy hereunder or under any other Program Document. |
Section 7.2 Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Parties contained in or made pursuant to this Agreement shall survive until the final and complete payment of Collections with respect to all Allocated Eligible Options purchased under this Agreement. The representations and warranties shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of any Party.
Section 7.3 Indemnification.
(a) Except as set forth in Section 7.3(b), each of Seller, its Affiliates, and their respective officers, directors, trustees, employees, managers, agents and representatives (the “Seller Indemnitees”), shall not be liable for any losses, damages, costs, expenses (including reasonable attorneys’ fees), liabilities, claims and demands, for any action taken (or omission), or any information provided to Buyer Parties (excluding, for the avoidance of doubt, PTT in its individual capacity) or any Beneficial Interest Holder in connection with any Program Document. Buyer Agent, on its own behalf and on behalf of each Beneficial Interest Holder, shall, severally but not jointly, indemnify, defend and hold harmless Seller Indemnitees from any liability, loss, damage or expense (including reasonable attorneys’ fees and expenses) relating to or arising out of (i) any intentional misconduct or gross negligence of Buyer Agent or any Beneficial Interest Holder, (ii) any material violation of any Applicable Law by Buyer Agent or any Beneficial Interest Holder, or (iii) any material breach of any of the representations and warranties by Buyer Agent or any Beneficial Interest Holder, or duties, obligations or responsibilities of Buyer Agent or any Beneficial Interest Holder under this Agreement or any other Program Document.
(b) Except as set forth in Section 7.3(a), each of the Buyer Parties, Beneficial Interest Holders, their respective Affiliates, and their respective officers, directors, trustees, employees, managers, agents and representatives (the “Buyer Indemnitees”), shall not be liable for any losses, damages, costs, expenses (including reasonable attorneys’ fees), liabilities, claims and demands, for any action taken (or omission), or any information provided to Seller in connection with any Program Document. Seller shall indemnify, defend and hold harmless the Buyer Indemnitees from any liability, loss, damage or expense (including reasonable attorneys’ fees and expenses) relating to or arising out of (i) any Bad Act, intentional misconduct or gross negligence of Seller or any of its Affiliates, (ii) any violation of any Applicable Law by Seller or any of its Affiliates, or (iii) any breach of any of the representations and warranties, duties, obligations or responsibilities of Seller or any of its Affiliates under this Agreement or any other Program Document. To the extent that PTT is entitled to any indemnification under this Section 7.3(b), such indemnity payment shall be made to the applicable Beneficial Interest Holders.
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Section 7.4 Limitation of Liability. IN NO EVENT WILL ANY PARTY OR ANY OF ITS REPRESENTATIVES OR AFFILIATES, BE LIABLE TO ANOTHER PARTY OR ANY THIRD PARTY UNDER THIS AGREEMENT OR ANY OTHER PROGRAM DOCUMENT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL OR PUNITIVE DAMAGES, WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE AND WHETHER OR NOT SUCH PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNLESS SUCH DAMAGES ARISE OUT OF SUCH PARTY OR ANY OF ITS REPRESENTATIVES OR AFFILIATES’ INTENTIONAL MISCONDUCT, GROSS NEGLIGENCE OR WILLFUL VIOLATION OF ANY APPLICABLE LAW OR ANY PROGRAM DOCUMENT.
Section 7.5 Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to sections, schedules and exhibits mean the sections of, and schedules and exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The schedules and exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.
Section 7.6 Approvals. Unless otherwise expressly specified herein, any approval or consent of Buyer Agent shall be granted in the sole discretion of Buyer Agent and such approval or consent may be withheld by Buyer Agent for any reason or no reason.
Section 7.7 Costs. (a) Subject to Section 7.7(b) below, the Parties shall each pay their own costs and expenses (including attorney’s fees and accountants’ fees) incurred or to be incurred in negotiating, preparing and executing this Agreement. All expenses of Seller and its Affiliates incurred in connection with their respective obligations hereunder shall be borne by such Party, unless explicitly described herein as payable by a Buyer Party or out of Collections. For the avoidance of doubt, Seller shall at all times bear any costs, fees and expenses of any nature (including, without limitation, all marketing costs, broker fees, legal fees, documentation fees and costs of property valuations) incurred in connection with the origination and/or closing of an Option between Seller and a Homeowner.
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(b) Notwithstanding anything herein to the contrary (i) if the Execution Date occurs and the Program Documents are executed and delivered by each of the Parties thereto, in each case, on or before December 15, 2023, Seller will reimburse to Buyer Agent fifty percent (50.00%) of the out-of-pocket attorneys’ fees incurred by Buyer Agent to Buyer Agent’s legal counsel (which shall be comprised of not more than one law firm) in connection with the preparation and negotiation of the Program Documents, subject to submission of reasonable and customary documentation, including line-item invoices, evidencing the amount so incurred, and (ii) if, following the Execution Date and the execution and delivery by the Parties of the Program Documents, Buyer Agent closes a debt facility on or before January 15, 2024 with East West Bank for purposes of financing the purchase by Buyer of Eligible Options pursuant to the Purchase Agreement, Seller will reimburse to Buyer Agent fifty percent (50.00%) of the out-of-pocket attorneys’ fees incurred by Buyer Agent to Buyer Agent’s legal counsel (which shall be comprised of not more than one law firm) in connection with the preparation and negotiation of the financing documents evidencing such debt facility, subject to submission of reasonable and customary documentation, including line-item invoices, evidencing the amount so incurred.
Section 7.8 No Joint Venture or Partnership. This Agreement is not intended to and shall not be construed as creating a joint venture, partnership, agency or other association within the meaning of the common law or under the laws of any state.
Section 7.9 Entire Agreement. This Agreement and the other Program Documents represent the entire agreement and understanding among the Parties regarding the subject matter contained herein and therein and supersede any and all prior representations, warranties, agreements and understandings, whether written or oral, concerning the subject matter contained herein. In the event of any conflict between the terms of this Agreement and any other Program Document, the terms of this Agreement shall control.
Section 7.10 Amendment. This Agreement may only be amended in writing signed by each of the Parties; provided, however, that subject to Section 5.10, the form of Underwriting Guidelines attached hereto as Exhibit B may be amended from time to time by Seller, upon written notice to Buyer Agent, as may be necessary in the reasonable discretion of Seller for such Underwriting Guidelines to comply with Applicable Law.
Section 7.11 Assignment; No Third-Party Beneficiaries. Except as otherwise contemplated herein, no Party may assign its rights or obligations under this Agreement to any Person without the prior written consent of the other Parties; provided, however, Buyer Agent may assign or transfer all of its rights and obligations under this Agreement to any of its Affiliates without consent. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Nothing in this Agreement is intended or shall be construed to confer any rights or benefits upon any Person other than the Parties, except and as provided in Section 7.3.
Section 7.12 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING GENERAL OBLIGATIONS LAW §5-1401, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
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Section 7.13 Dispute Resolution.
(a) Mediation. Any dispute between the Parties under this Agreement or the other Program Documents shall be submitted to mediation at the written election of either Party, prior to the filing of arbitral proceedings under Section 7.13(b) (except when a statute of limitation is about to expire). Within ten (10) days of that election, Seller and Buyer Agent shall select one mediator not affiliated with either Seller, Buyer or Buyer Agent. If, by the end of that ten (10) day period, Seller and Buyer Agent cannot agree on a mediator, then each Party shall select a mediator of its choice; and the two mediators selected by Seller and Buyer Agent shall select a mediator of their choice not affiliated with either Seller or Buyer Agent. Within ten (10) days of being appointed, the mediator(s) selected in accordance with this provision shall mediate between Seller and Buyer Agent, with the objective of resolving the dispute submitted for mediation.
(b) Arbitration. In the event the Parties have a dispute under this Agreement or the other Program Documents that cannot be amicably resolved by mediation or otherwise, upon the mutual agreement of both Parties, the Parties agree to submit the dispute to binding arbitration to JAMS in its office closest to Palo Alto, California (with all proceedings required to be held there), pursuant to its Comprehensive Arbitration Rules and Procedures, and in accordance with the Expedited Procedures in those Rules. The arbitration shall be conducted by a single arbitrator, with respect to any dispute reasonably involving under $1,000,000, and three arbitrators, with respect to any dispute reasonably involving over $1,000,000. The arbitrator(s) shall provide the Parties with a brief period of time (not to exceed ninety (90) days) to conduct discovery. The award rendered by the arbitrator(s) shall be final, and judgment may exclusively be entered upon it in accordance with Applicable Law in federal or state courts located in Santa Clara, California. The Parties shall maintain the confidential nature of the arbitration proceedings, the Award, and the arbitration hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an Award or its enforcement, or unless otherwise required by law or judicial decision. The costs of arbitration and reasonable counsel fees will be borne by the Party determined by the arbitrator to be the non-prevailing Party. If the arbitrator does not make a finding as to whether a Party is to be considered a prevailing Party, the Parties shall share the costs of arbitration equally and each Party shall bear its own counsel and other arbitration fees. The Parties agree to be bound by the decision of the arbitrator.
Section 7.14 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER PROGRAM DOCUMENTS OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
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Section 7.15 Headings. Section headings are for convenient reference only and will not affect the meaning or have any bearing on the interpretation of any provision of this Agreement.
Section 7.16 Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement. If so signed, the agreement becomes effective when all signature pages are attached and this Agreement may be delivered by electronic delivery.
Section 7.17 Voluntary Execution of Agreement. This Agreement is being executed voluntarily and without any duress or undue influence on the part or on behalf of the Parties.
Section 7.18 Severability. In the event one or more of the provisions of this Agreement or any document or agreement delivered or issued with respect to this Agreement shall be deemed to be invalid, illegal or unenforceable in any respect, then the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. In lieu of such invalid, illegal, or unenforceable term, there shall be added to this Agreement a term that is valid and fully enforceable and as similar, in purpose and intended effect, to such invalid, illegal, or unenforceable term as is reasonably possible. Except as otherwise set forth herein, all rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided by Applicable Law.
Section 7.19 Notices. All notices, requests, demands or any other communication made under, pursuant to, or in accordance with this Agreement, except for normal day-to-day business communications, which may be made orally or in a writing, shall be in writing and shall either be delivered personally, by overnight courier, by the United States mail (sent by first-class mail, certified, return receipt requested, postage prepaid) or by electronic mail with acknowledgement and properly addressed as follows:
| If to Point, as Seller, Servicer or Trust Manager: | Point Digital Finance, Inc. 444 High Street, Floor 4 Palo Alto, CA 94301 Attention: Chief Executive Officer e-mail: CEO@point.com |
| Copy (which shall not constitute notice) to: | Kutak Rock LLP 1650 Farnam Street Omaha, NE 68102 Attention: Joel L. Wiegert e-mail: joel.wiegert@kutakrock.com |
|
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| If to Buyer Agent: | GB HRP, LLC c/o Glassbridge Enterprises, Inc. 18 East 50th Street New York, NY 10022 Attention: Daniel Strauss e-mail: dstrauss@glassbridge.com |
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| Copy (which shall not constitute notice) to: | Holland & Knight LLP 1722 Routh Street, Suite 1500 Dallas, Texas 75201 Attention: Eric Pfeifle e-mail: eric.pfeifle@hklaw.com |
| If to PTT: | Point Titling Trust c/o Point Digital Finance, Inc., as Trust Manager 444 High Street, Floor 4 Palo Alto, CA 94301 Attention: Chief Executive Officer Email: CEO@point.com |
or to such other address(es) as a Party hereto may indicate to the other Parties in the manner provided for herein. Notices given by mail or overnight courier shall be deemed effective and complete when received or when delivery is refused by the recipient, and notices delivered personally shall be deemed effective and complete at the time of delivery and the obtaining of a signed receipt.
Section 7.20 Protection of Consumer Information. Each Party agrees that it (i) shall comply with any Applicable Law regarding the privacy and security of Consumer Information, (ii) shall not use Consumer Information in any manner inconsistent with any Applicable Laws and regulations regarding the privacy and security of Consumer Information, (iii) shall not disclose Consumer Information to third parties except at the specific written direction of Seller or the Servicer, (iv) shall maintain adequate physical, technical and administrative safeguards to protect Consumer Information from unauthorized access and (v) shall immediately notify Seller of any actual or suspected breach of the confidentiality of Consumer Information. For so long as Point is the Servicer pursuant to the Servicing Agreement, Buyer Agent agrees that it shall not (and shall not permit any Beneficial Interest Holder to) contact any Homeowner under any Option for purposes of marketing other products or services, including refinancing or other financing arrangements.
Section 7.21 Acknowledgement of Titling Trust. The Parties hereto acknowledge and agree that Point, as Trust Manager of PTT, and holder of the UTI, may from time to time cause the issuance of Investor SUBIs and will cause each Investor SUBI Certificate to be sold to the party designated by Buyer Agent pursuant to the applicable Investor SUBI Transfer Agreement. Eligible Option Assets sold to PTT under the Purchase Agreement will be assigned to PTT, recorded in the name of PTT, and allocated to the applicable Investor SUBI. With respect to each such allocation of Allocated Eligible Options to the applicable Investor SUBI, the Trust Manager will update and deliver the Option Schedule as provided in the applicable Investor SUBI Supplement and the Purchase Agreement.
Section 7.22 Concerning the UTI Trustee. The parties hereto are put on notice and hereby acknowledge and agree that (a) this Agreement is executed and delivered on behalf of PTT by Wilmington Savings Fund Society, FSB (“WSFS”), as UTI Trustee of PTT, not individually or personally but solely as trustee of PTT, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of PTT is made and intended not as a personal representation, undertaking or agreement of WSFS but is made and intended for the purpose of binding PTT, (c) nothing herein contained shall be construed as creating any liability on WSFS, individually or personally, to perform any covenant either expressed or implied contained herein of PTT, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) WSFS has made no investigation as to the accuracy or completeness of any representations and warranties made by PTT in this Agreement, and (e) under no circumstances shall WSFS be personally liable for the payment of any indebtedness or expenses of PTT or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by PTT under this Agreement or any other related document.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Agreement has been executed by the Parties as of the Execution Date provided above.
| POINT DIGITAL FINANCE, INC., | GB HRP, LLC | |||
| as Seller, Servicer and Trust Manager | ||||
| By: | /s/ Eddie Lim | By: | /s/ Daniel Strauss | |
| Name: | Eddie Lim | Name: | Daniel Strauss | |
| Its: | CEO | Its: | President | |
| POINT TITLING TRUST, | ||
| By: | Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as UTI Trustee | |
| By: | /s/ Mary Emily Pagano | |
| Name: | Mary Emily Pagano | |
| Its: | Vice President | |
[Signature Page to Program Agreement]
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Exhibit A
Option Level Detail
[See attached.]
[***]
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Exhibit B
Underwriting Guidelines
[See attached.]
[***]
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Exhibit 10.2
EXECUTION COPY
MASTER OPTION SALE AGREEMENT
This MASTER OPTION SALE AGREEMENT (this “Agreement”), is made effective as of December 29, 2023 (the “Effective Date”), by and among POINT DIGITAL FINANCE, INC., a Delaware corporation (“Point”), as seller, together with certain affiliates and designated assignees of Point as seller (collectively with Point, in such capacity, “Seller”), and as depositor and trust manager (in such capacity, the “Trust Manager”) of POINT TITLING TRUST, a Delaware statutory trust, as the titling trust (“PTT”), and in its capacity as Buyer (as defined below) hereunder, and GB HRP, LLC, a Delaware limited liability company (“Buyer Agent”). Capitalized terms that are not otherwise defined herein shall have the meanings ascribed to them in Article 1 of this Agreement or in the Program Agreement (as defined below).
RECITALS
A. Seller will be the originator of certain Options more particularly described herein, with each such Option being evidenced by the Option Documents applicable thereto.
B. Pursuant to this Agreement and the Program Agreement (as defined below), Seller will facilitate the purchase by, and assignment to, PTT (not in its individual capacity, but solely in its capacity as buyer of Options hereunder, which purchases shall be made at the direction of Buyer Agent solely for allocation to the applicable Investor SUBIs; PTT in such capacity, “Buyer”) of certain Options (and the corresponding Option Documents), which will then be recorded in the name of Buyer and allocated to and held by the applicable Investor SUBIs. All references herein to “Buyer” shall mean and refer to PTT, solely in its capacity as a buyer of Options hereunder at the direction of Buyer Agent, for the benefit of the related Beneficial Interest Holders in the Investor SUBIs, and not PTT in its individual capacity.
C. Point, as Depositor and as holder of the UTI under the Titling Trust Agreement, may from time to time cause Investor SUBIs to be issued pursuant to the Investor SUBI Supplements and to be sold to an entity designated by Buyer Agent pursuant to the applicable Investor SUBI Transfer Agreement, which Investor SUBIs each evidence a beneficial interest in the Options acquired by PTT and allocated to the applicable Investor SUBI pursuant to the applicable Investor SUBI Supplement. Point, as Trust Manager, will update the Option Schedule (as defined in the applicable Investor SUBI Supplement) with respect to each such allocation, pursuant to the terms of each Investor SUBI Supplement.
D. Trust Manager will take direction from Buyer Agent with respect to Options to be purchased by Buyer and allocated to the applicable Investor SUBI.
E. Seller and Buyer Agent have entered into that certain Program Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Program Agreement”) by and among Point, as Seller, Servicer and as Trust Manager, PTT, and Buyer Agent, which governs the rights and obligations of such parties with respect to purchases of Options pursuant to this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, Seller, Buyer, and Buyer Agent agree as follows:
ARTICLE 1 – DEFINED TERMS; ACKNOWLEDGMENTS
REGARDING BUYER AND BUYER AGENT
Section 1.1. Definitions. As used herein, the following terms shall have the following meanings. If not defined herein, capitalized terms shall have the meanings ascribed to such terms in the Program Agreement. Whenever the context of this Agreement requires, references to the singular number shall include the plural, and the plural shall include the singular, where appropriate; words denoting gender shall be construed to include the masculine, feminine, and neuter where appropriate; and specific enumeration shall not exclude the general or plural, and shall be considered as cumulative.
“Allocated Eligible Option” shall have the meaning set forth in the Program Agreement.
“ALTA” shall mean the American Land Title Association or any successor thereto.
“Applicable Law” shall have the meaning set forth in the Program Agreement.
“Appraisal” shall have the meaning assigned to it in the definition of “Appraised Value”.
“Appraised Value” shall mean, with respect to any Property, the value of such Property as determined pursuant to the Underwriting Guidelines (and each one, an “Appraisal”).
“Appreciation Starting Value” shall mean, with respect to any Option, the applicable “Appreciation Starting Value” specified in the related Option Agreement.
“Assignment and Assumption of Option Documents” shall have the meaning assigned to it in Section 2.4.2(b).
“Automated Valuation Model” shall mean, with respect to any Property, a service that assesses the value of such Property, as determined pursuant to the Underwriting Guidelines.
“Bankruptcy Proceeding” shall have the meaning set forth in the Program Agreement.
“Beneficial Interest Holder” shall mean each holder of an Investor SUBI Certificate in respect of Options purchased by Buyer hereunder.
“Breach” shall have the meaning assigned to it in Section 6.1.1.
“Business Day” shall have the meaning set forth in the Program Agreement.
“Buyer Indemnified Parties” shall have the meaning assigned to it in Section 7.1.
“Closing” shall mean, with respect to any Option, the funding to the Homeowner (or deposit to an escrow arrangement for purposes of funding such Option) with respect to the origination and closing of such Option.
“Closing Date” shall mean, for the purchase of any Option, the date of the Closing for such Option.
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“Collateral” shall mean, for a particular Option, any and all real and/or personal property securing the obligations of the Homeowners under such Option, including without limitation, the Property encumbered by such Option.
“Condemnation Proceeds” shall mean, with respect to each Option, all amounts treated as “Net Condemnation Proceeds” under the related Option Agreement and other Option Documents, representing all awards, compensation and settlements in respect of a taking (whether permanent or temporary) of all or part of a Property by exercise of the power of condemnation or the right of eminent domain or otherwise, to the extent not required to be released to senior lienholders or a Homeowner in accordance with the terms of the related Option Agreement and related Option Documents (and pursuant to the Servicing Standard).
“Credit Score” shall mean, for each Option and the related Homeowner, (a) to the extent three (3) credit scores are available, the middle score of the three (3) credit scores obtained by Equifax, Experian and TransUnion with respect to the related Homeowner; (b) to the extent two (2) credit scores are available, the average of the two (2) credit scores obtained by Equifax, Experian or TransUnion, as applicable with respect to the related Homeowner; (c) to the extent one (1) credit score is available, the credit score obtained by Equifax, Experian or TransUnion, as applicable with respect to the related Homeowner; and (d) to the extent no credit score is available from Equifax, Experian or TransUnion with respect to the related Homeowner, there shall be no Credit Score applicable with respect to such Homeowner and the related Option for purposes of this Agreement. When there is more than one Homeowner with respect to a Property and an Option, Seller may elect, in Seller’s discretion, to (a) obtain a credit score for only one of the applicable Homeowners with respect to the Property, in which event the Credit Score for the related Homeowners and the Option shall mean the applicable score obtained for such Homeowner, as determined in accordance with the first sentence of this definition, or (b) obtain a credit score for any number of such Homeowners with respect to the Property, in which event the Credit Score for the related Homeowners and the Option shall mean the lower of the credit scores obtained for each such Homeowner, as determined in accordance with the first sentence of this definition. There shall be a maximum of one (1) Credit Score for any Option regardless of the number of Homeowners and/or applicants.
“Custodian” shall mean U.S. Bank, N.A., together with any permitted successors and assigns.
“Depositor” shall mean Point, as depositor of PTT.
“Eligible Option” shall mean an Option that, as of the applicable Closing Date for such Option, either satisfies all of the criteria set forth on Exhibit E hereto, or which has otherwise been approved in writing by Buyer Agent in its sole discretion.
“Funding Deposit” shall mean, with respect to any Funding Notice and the related Option Offer Notices, an amount equal to Seller’s estimate of the aggregate Purchase Price for the Eligible Options described in such Option Offer Notices (provided, however, that in no event shall the amount of any Funding Deposit exceed the remaining availability under the Maximum Amount).
“Funding Notice” means, with respect to any Eligible Options described in one or more Option Offer Notices, a notice from Seller to Buyer Agent specifying the amount of the applicable Funding Deposit with respect thereto.
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“HEI Percentage” shall mean, as to each Option, the “HEI Percentage” specified in the related Option Agreement.
“Homeowner” or “Homeowners” shall mean, with respect to any Option, a homeowner that is a grantor of such Option, who is an owner of the related Property and seller of the Option pursuant to the related Option Documents, and such grantor’s or seller’s successors in title to the Property.
“Homeowner Notification Letter” means, with respect to any Option purchased by Buyer hereunder, a letter executed by Seller or its designee and addressed to the Homeowner that is a party to such Option notifying the Homeowner that the Option and all Option Documents associated therewith have been purchased by, and assigned to, Buyer as of the related Closing Date, which Homeowner Notification Letter shall be in substantially the form attached hereto as Exhibit D.
“Homeowner Protection Cap” shall mean, with respect to any Option, the applicable “Homeowner Protection Cap” specified in the related Option Agreement, as the same may be modified from time to time pursuant to the related Option Agreement to the extent such Option is subject to a Promotional Period.
“Indemnified Parties” shall have the meaning assigned to it in Section 7.2.
“Initial $50 Million Option Pool” shall have the meaning assigned to it in Section 6.1.5.
“Insurance Proceeds” shall mean, with respect to each Option, all proceeds received by the Servicer of insurance policies insuring the Option or the related Property pursuant to any title insurance policy, hazard insurance policy, or other insurance policy, to the extent such proceeds are not required to be released to the Homeowner in accordance with the terms of the related Option Agreement and related Option Documents (and pursuant to the Servicing Standard).
“Investment Amount” shall mean, as to each Option, the “Investment Amount” specified in the related Option Agreement.
“Investment Thickness” shall mean, with respect to any Option as of any date of determination, the ratio, expressed as a percentage, of (i) the Investment Amount relating to such Option, to (ii) the Appraised Value of the related Property.
“Investor SUBI” shall mean each special unit of beneficial interest issued by PTT to an investor of the Options evidenced by the Investor SUBI Certificate pursuant to the Titling Trust Agreement and the applicable Investor SUBI Supplement, in each case entitling the applicable holder thereof to an exclusive 100% undivided beneficial ownership interest in the related assets allocated thereto (representing the “SUBI Portfolio” under the applicable Investor SUBI Supplement), including the underlying assets relating to such portfolio, all as set forth in the Titling Trust Agreement.
“Investor SUBI Certificate” shall mean a certificate evidencing a beneficial interest in an Investor SUBI.
“Investor SUBI Supplement” shall mean each transaction SUBI supplement to Titling Trust Agreement, as amended, modified or supplemented from time to time, among Point, as Depositor, as SUBI settlor and as Trust Manager, and Wilmington Savings Fund Society, FSB, as UTI Trustee and as SUBI Trustee.
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“Investor SUBI Transfer Agreement” shall mean each SUBI certificate transfer agreement, as amended, modified or supplemented from time to time, among Point, as transferor, and the applicable investor, as transferee, pursuant to which the applicable Investor SUBI Certificate is transferred to the investor, together with any assignment and contribution agreement pursuant to which such applicable investor assigns Options purchased hereunder to Buyer in exchange for such Investor SUBI Certificate.
“Liquidation Proceeds” shall mean, with respect to each Option, all proceeds received by the Servicer in connection with the liquidation of the Option or the related Property through a trustee’s sale, foreclosure sale (whether private or public, judicial or non-judicial), receiver’s sale, assignment for the benefit of a creditor, or otherwise, other than Insurance Proceeds or Condemnation Proceeds.
“LOTV” shall mean, with respect to any Option as of any date of determination, the ratio, expressed as a percentage, of the outstanding Obligations on the related Property on such date, to the Appraised Value of the related Property.
“Losses” shall have the meaning assigned to it in Section 7.1.
“Multiple” shall mean, with respect to any Option, an amount equal to (i) the HEI Percentage for such Option, multiplied by (ii) the Appraised Value for such Option, divided by (iii) the Investment Amount for such Option.
“Obligations” shall mean, with respect to any Option, the sum of (a) the Investment Amount relating to such Option; (b) the aggregate unpaid principal balance of any mortgage on the related Property that is senior to such Option plus any applicable unpaid finance charges; (c) the aggregate maximum amount of all home equity lines of credit on the related Property, regardless of whether any funds have been drawn on such line of credit; provided, that with respect to any such line of credit that has reached the end of its draw period, the outstanding principal balance as of such date of determination shall be used for this clause (c); and (d) the aggregate unpaid principal balance of all open-end or closed-end subordinate financings or loans on the related Property, including but not limited to any home equity loan, home improvement loan, pledged amount, equity commitment, or other comparable obligations relating to the Property.
“Option” or “Options” shall mean, individually and collectively, as applicable, the residential purchase Options granted by each of the Homeowners, as evidenced by the Option Documents applicable thereto, each of which Option includes without limitation (a) the Option Documents, (b) the Option File, (c) to the extent the Option Documents give the holder a right thereto, Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds, and (d) all other rights, benefits, proceeds and obligations arising from or in connection with such Option.
“Option Agreement” shall mean, with respect to any Option, the Point Digital Finance Option Purchase Agreement (together with all Exhibits, Schedules and Addenda thereto) between Seller and the related Homeowner, as amended pursuant to the terms thereof (to the extent permitted by the Program Documents).
“Option Documents” shall mean, with respect to any Option, each of the documents set forth on Exhibit C hereto, together with all extensions, modifications, supplements, and amendments thereto or restatements thereof.
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“Option File” shall mean, with respect to the Option in question, all documents involved in the origination, underwriting (including documented compensating factors pertaining to exceptions) and servicing of such Option, including but not limited to the Option Documents, the Option application, the Option closing disclosure statement, the Appraisal, evidence of insurance, credit applications, 5 point credit ranges, and any additional documents required to be added to the Option File pursuant to this Agreement.
“Option Offer Notice” shall mean, with respect to any Option which Seller elects to sell to Buyer pursuant to this Agreement and the other Program Documents, a notice in substantially the form set forth on Exhibit F hereto.
“Option Transfer” means any sale or transfer by Buyer, at the direction of Buyer Agent, of some or all of the Options.
“Parties” shall mean Buyer, Buyer Agent, PTT and Seller, collectively, as signatories to this Agreement.
“Party” shall mean a signatory to this Agreement.
“Permitted State” shall mean Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, Washington, Washington, D.C., Wisconsin or any other state agreed to in writing by Buyer Agent in its sole discretion.
“Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, trust, or unincorporated organization, Governmental Authority, any other person or entity, and any fiduciary acting in such capacity on behalf of any of the foregoing.
“Point” shall have the meaning set forth in the Recitals of this Agreement.
“Portfolio Constraints” shall have the meaning assigned to it in Exhibit E attached hereto.
“Program Agreement” shall have the meaning set forth in the Recitals of this Agreement.
“Program Documents” shall have the meaning set forth in the Program Agreement.
“Promotional Period” shall mean, with respect to any Option for which the applicable Homeowner Protection Cap is subject to a promotional rate offered by Seller at the time of origination, the period commencing on the Closing of such Option and continuing through and including the date on which the Homeowner Protection Cap for such Option, pursuant to the terms of the applicable Option Agreement, reverts back to the non-promotional Homeowner Protection Cap specified in the applicable Option Agreement.
“Promotional Period Homeowner Protection Cap” shall mean, with respect to any Option subject to a Promotional Period, the applicable promotional Homeowner Protection Cap in effect during such Promotional Period.
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“Property” or “Properties” shall mean, with respect to any Option, individually and collectively, as applicable, the real property Collateral securing the obligations of Homeowners under such Option.
“PTT” shall have the meaning set forth in the Recitals of this Agreement.
“Purchase Price” shall have the meaning set forth in the Program Agreement.
“Rating Agency” means a credit rating agency that assesses the creditworthiness of an obligor as an entity or with respect to specific securities or money market instruments, including Fitch Ratings, Moody’s Investors Service, Standard & Poor’s, DBRS Morningstar and Kroll Bond Rating Agency.
“Repurchase Price” shall mean, with respect to any Option, a price equal to (i) the Purchase Price for such Option, plus (ii) third Person out-of-pocket filing, delivery, recording, professional fees and custodial release fees incurred by Buyer Agent in acquiring and then transferring such Option, plus (iii) all reasonable out-of-pocket costs and expenses incurred in the enforcement of Seller’s repurchase obligation hereunder, minus (iv) any Collections or other proceeds received and previously remitted or distributed to Buyer Agent and/or the Beneficial Interest Holders in respect of such Option pursuant to the Program Documents, if applicable.
“Residential Dwelling” shall mean any one- to four-unit dwelling, which (a) may be (i) attached, (ii) detached or (iii) semi-detached, (b) is located in or on any of the following: (i) an individual lot, (ii) a condominium complex or project or (iii) a planned unit development, and (c) is not a cooperative, log home, mobile home, geodesic dome or manufactured home.
“Restatement Date” shall have the meaning assigned to it in Section 6.1.5.
“Risk Adjustment Percentage” shall mean, with respect to any Option, an amount (expressed as a percentage) equal to (i) the difference between the Appraised Value for the related Property and the Appreciation Starting Value for such Option, divided by (ii) the Appraised Value for the related Property.
“Securitization Transaction” means any transaction involving either (a) a sale or other transfer of some or all of the Options directly or indirectly by Buyer, at the direction of Buyer Agent, to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities, or (b) an issuance of publicly offered or privately placed, rated or unrated securities or related instruments, the payments on which are determined primarily by reference to one or more portfolios of residential purchase options consisting, in whole or in part, of some or all of the purchased Options.
“Seller Indemnified Parties” shall have the meaning assigned to it in Section 7.2.
“Security Instrument” or “Security Instruments” shall mean, for the Option in question, individually and collectively, as applicable, any security instrument, deed of trust, mortgage, or other instrument creating a lien on any real property Collateral securing such Option, together (if applicable) with any separate instrument, memorandum or notice evidencing the Option required to be recorded in the applicable real property records of the jurisdiction in which such Property is located, and including any assignments of or amendments to any of the foregoing.
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“Seller Title Policy” shall mean (i) with respect to each Option for which the related Security Instrument secures a first lien on the related Property, an ALTA insurance policy, (ii) with respect to each Option for which the related Investment Amount is greater than two-hundred fifty thousand dollars ($250,000), an ALTA title insurance policy, or (iii) with respect to each Option not subject to the foregoing clauses (i) or (ii), an ALTA title insurance policy, a mortgage service provider professional liability insurance policy, a master loan policy (such as the First American Title Insurance Company equiSmart policy), or such other generally acceptable form of policy or insurance as Buyer Agent may approve in its reasonable discretion, in each case, issued by Title Company (or, as applicable, delivered by Title Company with respect to coverage maintained by Title Company under a mortgage service provider professional liability insurance policy) and insuring Seller, its successors and assigns, as to the lien of the Security Instrument, in the amount of the Investment Amount, subject only to encumbrances permitted by the Option Documents.
“Servicer” shall mean Seller acting as master servicer under the Servicing Agreement.
“Servicing Agreement” shall mean that certain Master Option Servicing Agreement dated as of the date hereof made by and among Seller, as master servicer, Buyer, Buyer Agent and PTT.
“Servicing Standard” shall have the meaning set forth in the Servicing Agreement.
“SUBI Trustee” shall mean Wilmington Savings Fund Society, FSB.
“Superior Lien” shall mean, with respect to any Option, any pledge, charge, claim or security interest, encumbrance or loan relating to the corresponding Property which creates a lien on the Property which is senior to the lien securing the Option.
“Title Company” shall mean the title insurance company issuing or, as applicable, delivering (as to coverage maintained by such title insurance company in the case of a mortgage service provider professional liability insurance policy or master loan policy), the Seller Title Policy with respect to a particular Option and, to the extent the applicable Seller Title Policy is an ALTA title insurance policy, such title insurance company shall be (a) duly qualified as such under the laws of the state in which the Collateral for the applicable Option is located, (b) duly authorized, and licensed in such state to transact the applicable insurance business and to write the insurance provided, and (c) acceptable to Buyer Agent in its reasonable discretion (provided, however, that each of Doma (States Title, North American Title Company and North American Title Insurance Company), Westcor Land Title Insurance Company, Agents National Title insurance Company, Title 365 Company, Spruce Title Co., First American Title Company and Old Republic Title shall be deemed approved as a permitted Title Company by Buyer Agent).
“Titling Trust Agreement” shall mean that certain Amended and Restated Trust Agreement, dated as of July 14, 2023, as modified, supplemented or amended from time to time, among the Depositor, the Trust Manager, and the UTI Trustee.
“Trust Manager” shall mean Point, as trust manager of PTT.
“Underwriting Guidelines” shall have the meaning set forth in the Program Agreement.
“UTI” shall have the meaning set forth in the Titling Trust Agreement.
“UTI Trustee” shall mean Wilmington Savings Fund Society, FSB.
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Section 1.2. Acknowledgments Regarding Buyer and Buyer Agent. Notwithstanding anything to the contrary contained herein (a) each reference herein to “Buyer” shall mean and refer to PTT, solely in its capacity as the owner of Options purchased from Seller pursuant hereto, at the direction of Buyer Agent, for the benefit of the related Beneficial Interest Holders in the Investor SUBIs, and not PTT in its individual capacity, (b) all covenants, agreements, representations, warranties and obligations of Buyer hereunder shall be deemed made, undertaken, performed and incurred, as the case may be, by PTT solely in its capacity as Buyer hereunder and under the other Program Documents, at the direction of Buyer Agent for the benefit of, and as an obligation (as applicable) of, Buyer Agent and the related Beneficial Interest Holders, and not those of PTT in its individual capacity, or as a personal covenant, agreement, representation, warranty or obligation of PTT in its individual capacity, (c) under no circumstances shall PTT in its individual capacity be personally liable for the payment or performance of any indebtedness, costs or expenses of, or any covenants, agreements, representations, warranties or obligations of, Buyer hereunder, and (d) unless otherwise expressly provided herein, all covenants, agreements, representations, warranties and obligations of Buyer Agent hereunder shall be deemed made, undertaken, performed and incurred, as the case may be, by Buyer Agent in its individual capacity and for the benefit of, and as an obligation (as applicable) of, the Beneficial Interest Holders in the Investor SUBIs (subject to the terms of the Investor SUBIs).
ARTICLE 2 – PURCHASE AND SALE OF OPTIONS
Section 2.1 General.
(a) In accordance with Seller’s obligations under Section 2.2 of the Program Agreement and the Investor Allocation Process attached as Exhibit G hereto, Seller shall offer, during the Term, Eligible Options for sale to Buyer, for the benefit of the Beneficial Interest Holders, and Buyer Agent shall direct PTT to purchase and allocate to the applicable Investor SUBI such Eligible Options, in an aggregate amount not to exceed the Maximum Amount. The purchase of Options by Buyer pursuant to this Agreement is subject to the terms and conditions of the Program Agreement and the terms and conditions set forth in this Agreement. In no event shall the Investor Allocation Process be modified by Seller in a manner materially adverse to Buyer Agent and the Beneficial Interest Holders without the prior written consent of Buyer Agent. No later than the tenth (10th) Business Day of each calendar month, Seller shall provide to Buyer Agent a report with respect to all Options originated by Seller during the prior calendar month, which report shall include Option-level detail sufficient to allow Buyer Agent to verify, validate and corroborate that the Investor Allocation Process (i) ensures all investors have a fair opportunity to be assigned Options and (ii) does not subject Buyer Agent and the Beneficial Interest Holders to adverse selection.
(b) With respect to each Option purchased hereunder, Point, as holder of the UTI, shall cause PTT to issue each Investor SUBI and shall sell to an entity designated by Buyer Agent the applicable Investor SUBI Certificate pursuant to the applicable Investor SUBI Transfer Agreement. All Options sold by Seller to PTT hereunder shall be assigned to PTT, titled and recorded in the name of PTT and allocated to the applicable Investor SUBI, and the applicable Beneficial Interest Holder thereunder shall be entitled to all of the beneficial interests allocated to the applicable Investor SUBI pursuant to the Titling Trust Agreement and the applicable Investor SUBI Supplement. The parties hereto agree that Buyer Agent is authorized and entitled to make all determinations and decisions with respect to PTT solely with respect to Eligible Options that have been purchased by PTT and allocated or to be allocated to the applicable Investor SUBI.
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Section 2.2 Seller Election; Sale. Any election by Seller to sell an Eligible Option to Buyer shall be evidenced by an Option Offer Notice delivered by Seller to Buyer Agent not later than the end of the Business Day immediately preceding the Business Day on which the Closing of such Option is scheduled to occur; provided, however, that:
(a) Seller may elect, at any time prior to the sale of any Option described in an Option Offer Notice to Buyer Agent pursuant hereto, to revoke its election to offer such Eligible Option for sale hereunder for good cause (e.g., because it is no longer an Eligible Option, and/or no longer fits within the Underwriting Guidelines);
(b) the terms of any Option sold by Seller to Buyer hereunder shall be governed in all respects by the related Option Documents (regardless of any conflict or inconsistency between the terms described in the related Option Offer Notice and those set forth in such Option Documents; provided, however, that (i) if either Party has actual knowledge of any conflict or inconsistencies, it shall notify the other Party of the same and (ii) no resolution of any conflicts or inconsistences shall result in Buyer acquiring a non-Eligible Option); and
(c) Seller shall have no duty or obligation to inform Buyer Agent of any changes to the terms of any Option occurring during the period following the delivery of the related Option Offer Notice and the Closing of the Option, except to the extent (i) such changes result in such Option ceasing to constitute an Eligible Option, in which event such Option must be withdrawn from Buyer’s purchase, or (ii) such changes modify a characteristic of such Option (provided that such characteristic is described in Exhibit E), in which event such Option must be re-offered by Seller in a subsequent Option Offer Notice.
Upon and subject to the terms and conditions of this Agreement, the Program Agreement, and in consideration of the Purchase Price for the applicable Options, Seller shall sell and assign to Buyer, and Buyer shall purchase, accept, and assume from Seller, on the terms and conditions set forth herein, all of Seller’s right, title and interest in, to, under, and concerning each Option, such sale and purchase to be effective as of the Closing Date for each such Option. Each such sale will be effected by Point, as Depositor and Trust Manager (and holder of the UTI), allocating the related Option to the applicable Investor SUBI pursuant to the Titling Trust Agreement and the applicable Investor SUBI Supplement. Upon such allocation, the Trust Manager will amend the Option Schedule (as defined in the applicable Investor SUBI Supplement) and deliver the Option Schedule along with the related Series Reallocation Notice (as defined in the applicable Investor SUBI Supplement) as provided in the applicable Investor SUBI Supplement. Notwithstanding anything to the contrary in this Agreement, the Closing shall occur on the Closing Date with respect to each such Option, unless otherwise agreed in writing by Buyer Agent and Seller.
Section 2.3 Funding Notices; Closing of Options; Payment of Purchase Price. Unless otherwise agreed to by Buyer Agent in its sole discretion, neither Buyer Agent nor any Beneficial Interest Holder shall be required to remit amounts to the Funding Account more than one (1) time per calendar month. Seller is hereby authorized to disburse funds from the Funding Account solely for funding of the related Eligible Options sold hereunder (as specified in the related Option Offer Notices) at each Closing and paying the applicable Purchase Price to Seller with respect thereto; provided that, with respect to the portion of such Purchase Price required for purposes of funding and Closing the related Eligible Option pursuant to the Option Documents related thereto, the recipient of such disbursement shall solely be the applicable third Person escrow account (or similar arrangement) designated in or pursuant to such Option Documents to receive the disbursement of proceeds of such Option (which escrow shall provide for the return of the entire amount of such disbursement if the Option transaction does not Close, which such amount shall be immediately paid to Buyer Agent when received by Seller if the Option transaction does not close, along with the payment by Seller to Buyer Agent of any amount that was received by Seller in payment of the applicable Purchase Price to Seller with respect to such Option; provided, however, that Buyer Agent may elect, in its sole discretion, to deposit such returned proceeds and Purchase Price payment to the Funding Account, and apply the same as a credit against amounts to be remitted under future Funding Notices (with the amount of such credit being applied in full against each subsequent Funding Notice until satisfied in full)).
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Section 2.4 Deliveries.
2.4.1 Delivery of Option Documents. With respect to each Option sold hereunder, Seller shall deliver (a) to Custodian, on behalf of Buyer Agent and Buyer, at the address provided by Buyer Agent to Seller in writing, on a monthly basis, but no later than thirty (30) days following the related Closing Date, the Option Documents and related Option File (less any portion thereof not yet received by Seller and for which a later delivery deadline is specified under this Section 2.4.1); provided, that to the extent the delivery of such Option Documents is delayed (other than as otherwise specified under this Section 2.4.1) and such delay causes Buyer Agent to incur additional costs from Custodian pursuant to Buyer Agent’s custodial agreement with Custodian, then Seller shall reimburse Buyer Agent for such costs, (b) to Buyer Agent, no later than five (5) Business Days following the related Closing Date, electronic copies of the executed Option Documents, (c) to Buyer Agent, no later than one hundred twenty (120) calendar days following the related Closing Date for each such Option with respect to which the related Seller Title Policy is an ALTA title insurance policy, a master loan policy or an approved equivalent, an electronic copy of the Seller Title Policy, and (d) to Buyer Agent, no later than fifteen (15) calendar days following the related Closing Date for each such Option, an electronic copy of the Homeowner Notification Letter that Seller has delivered to the related Homeowner for such Option. To the extent that any such Option Documents (a) have been delivered for recording and have not yet been returned to Seller by the applicable recording office, or (b) are still awaited from a third Person (e.g., the Seller Title Policy, if not yet provided by the Title Company), then Seller shall, as soon as reasonably practicable following receipt by it of such Option Documents from the applicable recording office or third Person, deliver such physical documents to Custodian. With respect to each Option, the related physical Option Documents and Option Files required to be delivered to Custodian hereunder shall not be required to include an original executed Seller Title Policy.
2.4.2 Seller Deliveries. On a monthly basis, in connection with the Eligible Options funded during the immediately preceding calendar month, Seller shall execute (and where applicable, duly acknowledge) and deliver a copy to Buyer Agent via electronic delivery, the following documents (collectively, “Seller Post-Closing Documents”) in connection with the sale of such Eligible Options, unless (and then, only to the extent) delivery of any of the below items is waived by Buyer Agent in writing:
(a) the Option Documents applicable to such Option, to be delivered in accordance with Section 2.4.1;
(b) one (1) duly executed counterpart of the Assignment and Assumption of Option Documents for such Option, substantially in the form attached hereto as Exhibit A (“Assignment and Assumption of Option Documents”); provided, that such executed version may differ from the form to reflect such differences as may be necessary in the applicable jurisdiction for such Option;
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(c) the updated Option Schedule prepared by the Trust Manager pursuant to the applicable Investor SUBI Supplement reflecting the allocation of the related Options to the applicable Investor SUBI;
(d) for each such Option with respect to which the related Seller Title Policy is a mortgage service provider professional liability insurance policy, a report identifying such Option (to be delivered to Buyer Agent no later than thirty (30) days following the related Closing Date); and
(e) such other documents as may be reasonably requested by Buyer Agent to consummate the sale of such Option to Buyer in accordance with the terms of this Agreement.
2.4.3 Buyer Agent/PTT Deliveries. On a monthly basis, for each Option being purchased by Buyer, and in addition to the Purchase Price for such Option, the applicable Parties specified below shall deliver to Seller via electronic delivery the following documents (the “Buyer Agent/PTT Post-Closing Documents”):
(a) PTT, on behalf of Buyer, shall deliver to Seller one (1) duly executed counterpart of each such Assignment and Assumption of Option Documents for the applicable Options sold during the immediately preceding calendar month; and
(b) Buyer Agent shall deliver to Seller such other documents as may be reasonably requested by Seller, that are readily available to Buyer or Buyer Agent without any undue expense and/or effort, to consummate the sale of such Option to Seller in accordance with the terms of this Agreement, in each case, to the extent Seller has provided Buyer Agent with at least thirty (30) calendar days prior written notice.
Section 2.5 Closing Costs. Seller shall pay (a) any broker, finder, or other person claiming by, through or under Seller, and (b) all marketing, escrow, legal, documentation, initial property valuations, recording, and filing costs and expenses hereunder (to the extent not paid by the applicable Homeowner pursuant to the terms of the Option Documents for the related Option), in each case, relating to the origination and Closing of such Option. Buyer Agent shall, or shall cause the Beneficial Interest Holders (in accordance with the terms of the related Investor SUBIs) to, pay (a) expenses incurred by Buyer or Buyer Agent in connection with any review, inspection, and investigation undertaken pursuant to this Agreement, and (b) any broker, finder, or other person claiming by, through or under Buyer or Buyer Agent. Except as otherwise set forth herein, each Party shall pay its own attorney’s fees. The Parties agree that, in the event that any additional material closing costs or other material expenses to be paid by Buyer Agent or the Beneficial Interest Holders pursuant to this Section 2.5 were not previously disclosed to Buyer Agent and cause such Option to no longer meet the investment criteria of Buyer Agent in the reasonable discretion of Buyer Agent, then such Option shall be excluded from the calculation of the Portfolio Constraints and, notwithstanding anything herein to the contrary, shall not be required to be purchased by Buyer and, if applicable, shall be repurchased by the Seller for the Repurchase Price (whether or not such Option is an Eligible Option). For the avoidance of doubt, Seller shall be responsible for all costs relating to the review, inspection, investigation, origination or closing of such Option prior to such Option becoming the subject of this Agreement, in each case, to the extent incurred by or on behalf of Seller.
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Section 2.6 Collections. Seller shall pay all servicing fees, trustee fees and any other costs and expenses that are due and payable in the ordinary course of owning the Option and/or that are due and payable by Seller to third-Persons, in each case, to the extent the same accrue prior to the related Closing Date. Accordingly, subject to the provisions of this Section 2.6, with respect to any particular Option, Seller shall be entitled to, and shall be entitled to the benefit of, all Collections paid by a Homeowner or any other Person with respect to such Option and applicable to the time period preceding the Closing Date for the sale of such Option. The Beneficial Interest Holders shall be entitled to all Collections with respect to such Option which are applicable to the time period from and after the Closing Date for the sale of such Option, and to the extent Seller receives any such Collections (x) after the Closing Date for the sale of such Option, Seller shall promptly deliver the same to the Beneficial Interest Holders, or (y) prior to the Closing Date for the sale of such Option, the amount of such Collections shall be applied as a credit against the Purchase Price payable to Seller in respect of such Option. The obligations under this Section 2.6 shall survive the consummation of the transaction contemplated hereunder.
Section 2.7 Conditions to Closing.
2.7.1 Conditions to Buyer Agent’s Obligations. The Closing Date for any Option and the obligations of Buyer Agent to consummate the transactions contemplated by this Agreement for such Option are, in addition to the other terms and conditions of this Agreement, subject to the satisfaction of the following conditions set forth in this Section 2.7.1, any one or more of which may be waived in writing in whole or in part by Buyer Agent in its sole discretion:
(a) the representations and warranties of Seller set forth in Section 4.1 of this Agreement shall be true on and as of the Closing Date for such Option, and the representations and warranties of Seller in Section 4.2 of this Agreement shall be true on and as of the Closing Date for such Option as if the same were made on and as of such Closing Date;
(b) Seller shall have fully and timely performed all covenants and obligations required by this Agreement and the other Program Documents for such Option to be performed by Seller on or prior to the Closing Date for such Option;
(c) Seller shall have paid any and all costs, fees, or expenses required of Seller hereunder in connection with such Option;
(d) Seller shall have executed and deposited with Buyer Agent all of the Seller Post-Closing Documents applicable to such Option and each previously purchased Option (which may be delivered during the month following the applicable Closing Date); and
(e) Buyer’s title to the beneficial interest under the Security Instrument for such Option shall be evidenced or insured by the Seller Title Policy issued by or delivered with respect to Title Company, which Seller Title Policy shall insure Buyer’s beneficial interest under the Security Instrument evidencing such Option and shall name Buyer and Seller’s successors and assigns as the insured party (in the event such Seller Title Policy is an ALTA title insurance policy, a master loan policy or an approved equivalent) or shall provide the applicable coverage to such parties (in the event such Seller Title Policy is a mortgage service provider professional liability insurance policy);
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2.7.2 Conditions to Seller’s Obligations. The Closing Date for each Option and the obligations of Seller to consummate the transactions contemplated by this Agreement for such Option are, in addition to the other terms and conditions of this Agreement, subject to the satisfaction of the following conditions set forth in this Section 2.7.2, any one or more of which may be waived in writing in whole or in part by Seller in its sole discretion:
(a) the representations and warranties of Buyer Agent set forth in Article 3 of this agreement shall be true on and as of the Closing Date for such Option as if the same were made on and as of such Closing Date; and
(b) Buyer Agent shall have fully and timely performed, in all material respects, all covenants and obligations required by this Agreement and the other Program Documents for such Option to be performed by Buyer Agent on or prior to the Closing Date for such Option; and
(c) The applicable Beneficial Interest Holders, or Buyer Agent on their behalf, shall have remitted the applicable Purchase Price to the Funding Account; and
(d) Buyer shall have executed and deposited with Seller all of the Buyer Agent/PTT Post-Closing Documents applicable to such Option (which may be delivered during the month following the applicable Closing Date); and
(e) With respect to the first Closing Date for the purchase of Options hereunder, Servicer shall have delivered to Buyer Agent a supplement to the existing sub-servicing agreement between Servicer and Initial Sub-servicer (as defined in the Servicing Agreement) for purposes of placing the Options to be purchased hereunder within the scope of such sub-servicing agreement, in form and substance acceptable to Buyer Agent in its reasonable discretion.
Section 2.8 Sale of Investor SUBIs. The sale of any Investor SUBI shall be governed by the applicable Investor SUBI Transfer Agreement.
ARTICLE 3 – Buyer AGENT’s Representations, Warranties and Covenants
Section 3.1 Buyer Agent represents, warrants and covenants to Seller and PTT, as follows, as of the Effective Date:
3.1.1 Authority. Buyer Agent has taken all necessary action to duly authorize its entry into and performance under this Agreement. Buyer Agent is not required to obtain any consents or approvals to consummate the transactions contemplated in this Agreement not otherwise already obtained. This Agreement, and all instruments, documents and agreements to be executed by Buyer Agent in connection herewith and therewith are, or when delivered shall be, duly authorized, executed and delivered by Buyer Agent and are, or when delivered will be, valid, binding and enforceable obligations of Buyer Agent (except as the enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding or action in equity or at law). Each individual executing this Agreement and/or any agreement on behalf of Buyer Agent is duly authorized to do so.
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3.1.2 No Violation. The execution and delivery by Buyer Agent of this Agreement and consummation of the transactions contemplated herein and therein, will not, with or without giving of notice or passage of time, or both: (i) conflict with or violate any material law, statute, rule, regulation, or administrative order to which Buyer Agent is subject or by which Buyer Agent’s assets are bound or affected (which violation would have a material adverse effect on Seller’s ability to perform its obligations under this Agreement); (ii) materially violate any judgment, order, writ, or decree of any court or administrative body in any suit or proceeding to which Buyer Agent is a party; (iii) result in a breach of, or default under, any material agreement, commitment, contract, or other material instrument, to which Buyer Agent is a party or by which any of Buyer Agent’s assets are bound or affected (which violation would have a material adverse effect on Seller’s ability to perform its obligations under this Agreement); or (iv) render Buyer Agent insolvent or without sufficient working capital.
3.1.3 Binding Agreement. Buyer Agent has the requisite legal capacity to enter into and consummate the transactions contemplated by this Agreement.
3.1.4 Good Standing. Buyer Agent has been duly formed, is validly existing, and in good standing in the state in which it was organized.
3.1.5 No Actions Against Buyer. There are no actions, suits, claims, proceedings, or investigations, pending or (to Buyer Agent’s knowledge) threatened against Buyer Agent which will reasonably and materially impair the consummation of the terms and conditions of this Agreement.
3.1.6 Sophisticated Investor. Buyer Agent is a sophisticated, informed, institutional investor which has knowledge and experience in financial and business matters that enable it to evaluate the merits and risks of the transactions contemplated by this Agreement.
3.1.7 No Reliance. Buyer Agent is not acting in reliance on any representation or warranty made or information furnished by Seller or its affiliates, employees, agents, representatives or independent contractors (other than the express representations and warranties in Article 4, upon which Buyer Agent shall be entitled to rely).
ARTICLE 4 - Seller’s Representations AND WARRANTIES
Section 4.1 Representations and Warranties. Seller represents, warrants and covenants to Buyer and Buyer Agent, as follows, as of the Effective Date and each Closing Date:
4.1.1 Authority. Seller has taken all necessary action to duly authorize its entry into and performance under this Agreement. Seller is not required to obtain any licenses, consents or approvals from any Governmental Authority or other Person to consummate the transactions contemplated in this Agreement not otherwise already obtained. Seller has the capacity and authority to consummate the transactions contemplated by this Agreement. This Agreement and all instruments, documents and agreements to be executed by Seller in connection herewith and therewith are, or when delivered shall be, duly authorized, executed and delivered by Seller. Each individual executing this Agreement on behalf of Seller is duly authorized to do so.
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4.1.2 No Violation. The execution and delivery by Seller of this Agreement and consummation of the transactions contemplated herein and therein, will not, with or without giving of notice or passage of time, or both: (i) conflict with or violate any material law, statute, rule, regulation, or administrative order to which Seller is subject or by which Seller’s assets are bound or affected, which violation would have a material adverse effect on Seller’s ability to perform its obligations under this Agreement; (ii) conflict with Seller’s articles of incorporation or by-laws; (iii) materially violate any judgment, order, writ, or decree of any court or administrative body in any suit or proceeding to which Seller is a party, which violation would have a material adverse effect on Seller’s ability to perform its obligations under this Agreement; (iv) result in a breach of, or default under, any material agreement, commitment, contract, or other material instrument, to which Seller is a party or by which any of Seller’s assets are bound or affected; or (v) render Seller insolvent or without sufficient working capital.
4.1.3 Binding Agreement. Seller has the requisite legal capacity to enter into and consummate the transactions contemplated by this Agreement, and this Agreement constitutes a valid and binding obligation of Seller to Buyer enforceable in accordance with its terms, except as the enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding or action in equity or at law).
4.1.4 Good Standing. Seller is duly organized, validly existing, and in good standing under the laws of the state in which it was formed.
4.1.5 No Action Against Seller. There are no actions, suits, claims, proceedings, investigations, regulatory or other proceeding of any kind pending or, to Seller’s knowledge, threatened against Seller which, if determined adversely to Seller, would have a material adverse effect on Seller’s ability to perform its obligations as Seller hereunder.
4.1.6 No Adverse Selection. Seller shall allocate Options in accordance with the Investor Allocation Process attached hereto as Exhibit G, and shall not adversely select Options to be offered for sale hereunder. Seller will provide written notification to Buyer Agent upon any material change to such policies prior to the implementation of such change.
4.1.7 No Broker. Seller has not dealt with any broker, investment banker, agent, or other Person (other than Buyer Agent) who may be entitled to any commission or compensation in connection with the sale of Options pursuant to this Agreement, except to the extent such commission or compensation shall have been paid in full by Seller.
4.1.8 True Sale. Each Option and Option Document is being transferred from Seller to Buyer under this Agreement as a true sale with the intention that Seller shall have no rights or interests with respect thereto post-Closing, and such that the Option and the related Option Documents would be removed from Seller’s bankruptcy estate, assuming that Seller had filed for bankruptcy pre-Closing, pursuant to Section 541 of the Bankruptcy Code. The sale of Options and Option Documents by Seller to Buyer under this Agreement has been made for “reasonably equivalent value” (as such term is utilized in Section 548 of the Bankruptcy Code and state law equivalents) and not for or on account of “antecedent debt” (as such term is utilized in Section 547 of the Bankruptcy Code and state law equivalents) owed by either Buyer or PTT to Seller.
4.1.9 Sale Treatment. The sale of the Options pursuant to the Program Documents will be afforded sale treatment for tax and accounting purposes. The transactions contemplated by this Agreement are not intended in any way to constitute the sale of a “security” or “securities” within the meaning of any applicable securities laws, and none of the representations, warranties or agreements of Seller shall create any inference that the transactions involve any “security” or “securities”.
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4.1.10 Investment Company Act, Etc. Seller is not and is not required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
4.1.11 Bulk Sales. The execution, delivery and performance of this Agreement by Seller do not require compliance with any “bulk sales” laws or similar statutory provisions by Seller.
4.1.12 Tax Returns. Seller has filed all tax returns (federal, state and local) required to be filed by it, such tax returns are true and accurate in all material respects, and Seller has paid or made adequate provision for the payment of all taxes and other assessments and Government Authority charges.
4.1.13 Fair Consideration. The consideration received by Seller upon the sale of the Options under this Agreement shall constitute fair consideration and reasonably equivalent value for the Options.
4.1.14 Ability to Perform; Solvency. Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement. Seller is solvent (in that the fair saleable value (determined on a going concern basis) of its assets shall be greater than the total amount of its undiscounted liabilities), able to pay its debts and obligations in the ordinary course of business as they become due, and has adequate capital to carry on its businesses and all businesses in which it is about to engage, as to each, before and after giving effect to the transactions contemplated by this Agreement. The sale of the Options by Seller will not cause Seller to become insolvent. The sale of the Options is not undertaken to hinder, delay or defraud any of Seller’s creditors.
4.1.15 Investor Allocation Process. Seller shall promptly provide written notice to Buyer Agent of any proposed changes or modifications to the Investor Allocation Process (regardless of whether Buyer Agent’s consent to such change or modification is required pursuant to Section 2.1).
Section 4.2 Additional Representations and Warranties. Seller shall be deemed to have made the following additional representations, warranties and covenants to Buyer and Buyer Agent, with respect to each Option purchased by Buyer hereunder, each of which representations, warranties and covenants Seller represents to be true and correct in all material respects as of the Closing Date for such Option, unless otherwise expressly agreed to by Parties in writing for such Option (and to the extent applicable, thereafter until such Option has been exercised by Buyer or otherwise liquidated).
4.2.1 Servicing. At all times during which Seller has owned the Option, the Option has been serviced in compliance with the Servicing Standard.
4.2.2 Ownership; Eligible Options. Seller or PTT, as applicable, is the sole legal, beneficial and equitable owner of the Option, has good and marketable title thereto and is the holder of the Option Documents. Except to Buyer as set forth in this Agreement, Seller has not assigned, transferred, conveyed, pledged, or granted a security interest in the Option or the Option Documents (nor will Seller purport to do so hereafter), and Seller has the full right to transfer and sell the Option and the Option Documents to Buyer free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest. Following the sale of each Option hereunder, Buyer will own the Option and hold the Option Documents free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest of any kind whatsoever created by or through Seller. Each Option sold to Buyer by Seller pursuant to this Agreement is an Eligible Option on the Closing Date for such Option. Seller has not modified or altered the terms of the sale of such Option without the consent of Buyer Agent or Homeowner, respectively, except as set forth in the Program Documents.
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4.2.3 Option. The information set forth in the Option Offer Notice relating to the Option is accurate in all material respects. To Seller’s actual knowledge after due inquiry, all costs, fees and expenses incurred by or for the account of Seller in making or closing the Option and all recording fees and costs relating to the origination and Closing of the Option were paid.
4.2.4 Impound Accounts. There are no impound accounts for taxes, insurance or any other items associated with the Option in question.
4.2.5 No Foreclosure Actions. Seller has not commenced any judicial or non-judicial foreclosure actions or exercised any other enforcement actions in connection with the Option and the related Property, including without limitation, any equitable rights of set-off.
4.2.6 No Litigation. As of the Closing Date, except to the extent that a copy of such notice has been provided to Buyer Agent pursuant to the Program Documents, Seller has not received written notice of any pending or threatened litigation, administrative proceeding, investigation, executive or legislative proceeding or other form of governmental enforcement in any way related to, directed at or otherwise affecting (i) the Option Documents or (ii) the use, operation or occupancy of any portion of the Property securing the Option or other Collateral referenced in the Security Instrument for such Option (other than pending or threatened litigation relating to any homeowners association, condominium association or similar private association to which the Property is subject, provided that the same does not relate to the enforcement of any lien for delinquent assessments or other charges against the Property and which could not otherwise reasonably be expected to have a material adverse impact upon the applicable Homeowner’s ownership or possession of the Property), or (iii) any affirmative defenses of the applicable Homeowner to the Option.
4.2.7 Fraud. To Seller’s actual knowledge after reasonable and customary due diligence performed in accordance with the Underwriting Guidelines, the Option was originated without any fraud or material misrepresentation on the part of the related Homeowner or any other party.
4.2.8 Accuracy of Option Documents. The Option Documents delivered to Buyer and Custodian in accordance with the terms of this Agreement, and the terms and information relating to the Option set forth in the related Option Offer Notice, are true and correct in all material respects and to Seller’s actual knowledge, the terms of the Option Documents have not been impaired, waived, altered or modified in any respect, except by written instruments which have been recorded to the extent any such recordation is required by law, or, necessary to protect the interest of Buyer, for the benefit of the Beneficial Interest Holders. The terms of any such waiver, alteration or modification (whether complete or in process) are reflected in the Option Documents, and the written instrument reflecting such terms has been included in the Option File for the Option. No Homeowner has been released, in whole or in part, from the terms of the Option Documents.
4.2.9 Taxes Paid. All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, homeowners association assessments, leasehold payments or ground rents and any other charges payable with respect to the Property securing the Option have not become a lien upon the Property securing the Option.
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4.2.10 No Defenses. Seller has no actual knowledge nor has it received any written notice, that any Homeowner in respect of the Option is presently, or was at the time the Option was originated, insolvent or a debtor in any Bankruptcy Proceeding.
4.2.11 Hazard Insurance. The Property securing the Option is insured by a fire and extended perils insurance policy, issued by a generally acceptable insurance carrier, and such other hazards as are customary in the area where such Property is located, and to the extent required by Seller as of the date on which the Option was originated, and against other risks insured against by Persons operating like properties in the locality of such Property and all amounts required to have been paid under any such policy have been paid. If any portion of such Property is in an area identified by any Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, and all amounts required to have been paid under any such policy have been paid. All such insurance policies (collectively, the “Hazard Insurance Policy”) contain a standard mortgagee clause naming Seller, its successors and assigns (including, without limitation, subsequent owners of the Option), as mortgagee, loss payee or additional insured. Seller has not engaged in, and has no actual knowledge of any Homeowner having engaged in, any act or omission which would impair the coverage of any such policy or the validity and binding effect of either.
4.2.12 Compliance with Applicable Law. (a) All requirements of any federal, state or local law applicable to the Option have been complied with in all material respects while Seller has owned the Option, and (b) the consummation of the transactions contemplated hereby will not involve the material violation by Seller of any such Applicable Laws. The origination, servicing and collection practices used by Seller have been and will be in all material respects in compliance with the Servicing Standard and Applicable Laws.
4.2.13 No Waivers. The Security Instrument securing the Option has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Property has not been released from the lien of the Security Instrument, in whole or in part, nor has any instrument been executed that would directly or indirectly effect any such release, cancellation, subordination or rescission. Seller has not waived the performance by the Homeowner of any action, if the Homeowner’s failure to perform such action would cause the Option to be in default, nor has Seller waived any default resulting from any action or inaction by the Homeowner. No material default is continuing with respect to the Option or the related Option Documents.
4.2.14 Location and Type of Property. The Property is located in a Permitted State. The Property consists of real Property that is a Residential Dwelling. No Option is secured by a multi-family property (other than as set forth in the definition of Residential Dwelling), a mixed use property or a commercial property, nor is any portion of the Property used for commercial purposes other than non-owner occupied properties that are leased, in each case, except as otherwise permitted under the Underwriting Guidelines.
4.2.15 Accuracy of Information. All information provided in writing by Seller to Buyer Agent with respect to such Option at any time (including both before and after the Closing Date) shall be complete, true and correct in all material respects as of the date provided to Buyer Agent.
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4.2.16 Option Insurance. The Seller Title Policy is valid and remains in full force and effect, and is assignable to Buyer.
4.2.17 Option Terms. The Option is exercisable on the earlier of the maturity date of the Option and the date on which the Option becomes immediately exercisable under the Option Agreement.
4.2.18 Occupancy. Seller has given due consideration to factors, including but not limited to, other real estate owned by the Homeowner, the address specified on the related credit reports, appraiser comments and notes, the location of the Property and any difference between the mailing address and the subject Property address to evaluate whether the occupancy status of the Property as represented by the Homeowner is reasonable. As of the date of purchase of the Option by Buyer, the Property is lawfully occupied under Applicable Law (unless such Property is not an owner-occupied Property). Seller has not received written notification from any governmental Person that the Property is in material non-compliance with Applicable Laws.
4.2.19 No Other Collateral. The Option is not and has not been secured by any collateral except the lien of the corresponding Security Instrument and the security interest of any applicable security agreement or chattel mortgage.
4.2.20 Security Instrument. If applicable, a trustee, authorized and duly qualified if required under Applicable Law to act as such, has been properly designated and currently so serves and is named in the Security Instrument, and no fees or expenses are or will become payable to the trustee under the Security Instrument, except in connection with a trustee’s sale or attempted sale after default by the Homeowner.
4.2.21 Recordable. The Security Instrument was recorded, or is in the process of being (and will promptly be) recorded, in the name of the Buyer in the jurisdiction(s) where the Property is located.
4.2.22 No Damage/Condemnation. To Seller’s actual knowledge after reasonable and customary due diligence performed in accordance with the Underwriting Guidelines, the Property is in substantially the same (or more favorable) condition it was in at the time the most recent Appraised Value was obtained. To Seller’s actual knowledge, there is no proceeding pending or threatened for the total or partial condemnation of the Property.
4.2.23 Origination Practices; Escrow Deposits. The origination and underwriting practices used by Seller with respect to the Option have been in all material respects in compliance with the Underwriting Guidelines. The escrow account, if any, associated with each Option includes all reserves for taxes, interest reserves, mortgage insurance premiums, fire and hazard insurance premiums, insurance loss proceeds or any other amounts with respect to such Option as required to be so impounded or reserved pursuant to the Option Documents as of the Closing Date for such Option.
4.2.24 Doing Business. Seller and its Affiliates are (i) in compliance in all material respects with any and all applicable licensing requirements of the laws of the state wherein the Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, or (C) not doing business in such state under Applicable Laws.
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4.2.25 Appraisal. Each Option File contains a written Appraisal with respect to the related Property. The Appraisal was made and signed (where applicable) in accordance with the Underwriting Guidelines. The Person performing any Appraisal received no benefit from, and such person’s compensation or flow of business from Seller was not affected by, the approval or disapproval of the Option or the valuation made. The selection of the Person performing the property valuation was made independently of Seller’s personnel.
4.2.26 No Default of Superior Liens. To Seller’s actual knowledge after reasonable and customary due diligence performed in accordance with the Underwriting Guidelines, immediately following the origination and closing of the Option, there is no event of acceleration or material breach pursuant to which a right of acceleration and/or foreclosure exists under any Superior Liens on the related Property.
4.2.27 Homeowner. Seller has no actual knowledge of any circumstances or condition with respect to the Option, the Property or the applicable Homeowner that could reasonably be expected to (a) result in the Option not constituting an Eligible Option or (b) cause the Option to become delinquent. Either the Homeowner is (a) a natural person (including, for the avoidance of doubt, the Homeowner’s spouse, civil union partner, or registered domestic partner) legally permitted to reside in the United States, or (b) a limited liability company, a trust or another entity type acceptable to Seller and permitted pursuant to the Underwriting Guidelines.
4.2.28 Hazardous Substances. To Seller’s actual knowledge, the Property is free from any and all toxic or hazardous substances in violation of any local, state or federal environmental law, and there exists no violation of any local, state or federal environmental law, rule or regulation. To Seller’s actual knowledge, there is no pending action or proceeding directly involving the Property in which compliance with any environmental law, rule or regulation is alleged to have been violated.
4.2.29 Fully Funded. The Investment Amount for the Option has been fully funded or conditions for any release of funds from escrow have been memorialized and neither Seller nor Buyer has any obligation under the related Option Agreement or other related Option Documents to advance any additional funds related to the Investment Amount to the Homeowner; provided, that Buyer, for the benefit of (and as an obligation of) the Beneficial Interest Holders, shall have an obligation to fund the Exercise Payment (as defined in the related Option Agreement) (to the extent any such amount is not netted upon exercise) in the event of the exercise of an Option, as provided in the related Option Agreement.
4.2.30 No Continuing Right of Rescission. Any statutory or other rescission or cancellation period with respect to such Option, if any, has expired.
4.2.31 Anti-Money Laundering. At all times until such Option has been exercised in full by Buyer, Seller has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”); to the extent required by law, Seller has conducted the requisite due diligence in connection with the Option for purposes of the applicable Anti-Money Laundering Laws, and maintains, and will maintain, sufficient information to identify the applicable Homeowner for purposes of the Anti-Money Laundering Laws.
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4.2.32 No Set-Off Rights. Such Option and all related Option Documents have been duly authorized and executed by the applicable Homeowner and are in full force and effect and represent a legal, valid and binding obligation of the Homeowner, enforceable against such Homeowner in accordance with its terms, except as the enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding or action in equity or at law). Such Option is not subject to any right of rescission, set-off, counterclaim or defense by the applicable Homeowner, nor will the operation of any of the terms of the Option Documents, or the exercise of any right thereunder, render any Option Document unenforceable in any material respect, and, to Seller’s knowledge, no such right of rescission, set-off, counterclaim or defense has been asserted by the applicable Homeowner with respect thereto.
4.2.33 Form of Option Documents. The Option Documents relating to the Option are documented on forms approved from time to time by Seller as part of its onboarding process, which forms shall be satisfactory to Buyer Agent in its reasonable discretion.
4.2.34 Underwriting Guidelines. Each Option either (i) was underwritten in conformance with Seller’s Underwriting Guidelines in effect at the time of origination without regard to any underwriter discretion, which such Underwriting Guidelines have not been materially modified from the Underwriting Guidelines in effect on the date hereof in a manner that would materially and adversely affect such Option without the prior written consent of Buyer Agent, or (ii) if not underwritten in conformance with Seller’s Underwriting Guidelines, subject to the consent of Buyer Agent, has reasonable and documented compensating factors and complies with the permitted exceptions and exclusions specified in the Underwriting Guidelines. Seller has taken reasonable steps to verify the applicable Homeowner’s income, employment, and assets in accordance with the Underwriting Guidelines and employed procedures designed to authenticate the documentation supporting the income, employment, and assets.
Section 4.3 Knowledge. All references in this Agreement to Seller’s “knowledge” (or words of similar effect) shall mean Seller’s actual knowledge, after reasonable and due inquiry.
Section 4.4 Survival. Seller’s representations and warranties in this Article 4 shall survive each Closing until the applicable Option is either exercised (with consummation of that transaction), expires or is repurchased by the applicable Homeowner.
ARTICLE 5 – SERVICING
Section 5.1 Servicing of Options After Closing. Following the related Closing Date and subject to the terms of the Servicing Agreement, Buyer, at Buyer’s Agent’s direction, shall have the sole and exclusive right, power and authority to service such Option or cause each such Option to be serviced, including, without limitation, the right to assign the servicing rights to another third Person and to deal with the Homeowner under such Option in all matters pertaining to such Option and the Option Documents applicable thereto; provided, that if Buyer Agent causes a transfer of servicing from Point, as initial Servicer, pursuant to the terms of the Servicing Agreement, Buyer Agent agrees to observe (and cause the successor servicer to observe) all applicable material Homeowner notification and timing requirements customarily required of mortgage servicers. Notwithstanding the foregoing, each such Option shall be serviced in accordance with and pursuant to the Servicing Agreement until such time as the Servicing Agreement may be terminated pursuant to the terms thereof.
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ARTICLE 6 – REMEDIES
Section 6.1 Repurchase.
6.1.1 Upon discovery by either Seller or Buyer Agent of a breach of any representation or warranty contained in Sections 4.2 or 6.1.5 of this Agreement that (a) materially and adversely affects the value of the applicable Options and/or the interests of Buyer, for the benefit of the Beneficial Interest Holders, in such Options and is not de minimis in nature, or (b) materially and adversely affects the value of a particular Option or the interest of Buyer, for the benefit of the Beneficial Interest Holders, in a particular Option and is not de minimis in nature in the case of a representation and warranty relating to such particular Option (each, a “Breach”), then the Party discovering such Breach shall give prompt written notice to the other Party within five (5) Business Days.
6.1.2 Seller shall have a period of ninety (90) calendar days from the earlier of its discovery of the Breach or its receipt of notice of any such Breach within which to correct or cure such Breach (solely to the extent that such Breach is reasonably susceptible to cure; if not, no such cure period shall apply); provided, however, that notwithstanding the foregoing, in connection with any Breach arising under Section 6.1.5, Seller shall only have a period of sixty (60) calendar days from the earlier of its discovery of the Breach or its receipt of notice of any such Breach within which to correct or cure such Breach (solely to the extent that such Breach is reasonably susceptible to cure; if not, no such cure period shall apply). Without limitation of the foregoing, in connection with any Breach arising under Section 6.1.5, Seller may deliver to Buyer, during such sixty (60) calendar day cure period, additional Eligible Options for purchase hereunder in order to adjust the composition of the Allocated Eligible Options purchased by Buyer to satisfy the applicable Portfolio Constraint(s) which was breached. Seller hereby covenants and agrees that if any such Breach is not corrected or cured within such ninety (90) or sixty (60) calendar day period, as applicable, Seller shall within five (5) Business Days of the expiration of such cure period, repurchase such Option (or, with respect to any Breach arising under Section 6.1.5, so much of the Allocated Eligible Options purchased by Buyer hereunder as may be necessary in order to adjust the composition of all Allocated Eligible Options purchased by Buyer hereunder to satisfy the applicable Portfolio Constraint(s) which was breached) at the Repurchase Price. Any such repurchase shall be accomplished by wire transfer of the amount of the Repurchase Price to an account designated by Buyer Agent.
6.1.3 Upon completion of such repurchase by Seller, Buyer Agent, Trust Manager and/or Seller, as applicable shall arrange for the reassignment of the repurchased Option to Seller and the delivery to Seller of any documents held by Buyer or its custodian relating to the repurchased Option. In the case of any lien for which an assignment from Seller to Buyer has been recorded prior to repurchase, Buyer Agent shall concurrently with the repurchase provide an executed assignment from Buyer to Seller. Seller shall pay any necessary filing, recording, and other closing costs in connection with recording such reassignment.
6.1.4 Cross-Default. Any material default under one Program Document by a Party, shall, following the expiration of any applicable notice and/or cure periods, constitute an existing and continuing breach of all other Program Documents.
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6.1.5 Portfolio Constraints. With respect to the initial $50,000,000 aggregate Purchase Price of Allocated Eligible Options purchased by Buyer pursuant to this Agreement (the “Initial $50 Million Option Pool”), and notwithstanding anything to the contrary in the Program Documents, Seller shall be deemed to have represented and warranted to Buyer and Buyer Agent that the Initial $50 Million Option Pool is in compliance with the Portfolio Constraints as of the related Closing Date for the applicable Eligible Option which, as determined by such Eligible Option’s Investment Amount, incrementally surpasses the amount for the Initial $50 Million Option Pool (the “Restatement Date”). Any breach by Seller of the representation and warranty under the immediately preceding sentence shall be deemed to have occurred effective as of the Restatement Date, and shall be subject to the terms of Section 6.1.1.
Section 6.2 Limitation of Remedies. Upon a breach or default by Seller, Buyer or Buyer Agent hereunder (beyond any applicable notice and/or cure periods set forth herein), the non-breaching party shall be entitled to exercise all such rights and remedies as are expressly set forth herein or in any of the other Program Documents, or which may otherwise be available to such party by contract, at law or in equity; provided, however, that the sole and exclusive remedy of Buyer Agent in respect of a Breach for which Buyer, for the benefit of the Beneficial Interest Holders, has a repurchase right under Section 6.1 shall be the exercise of such repurchase rights under Section 6.1. Notwithstanding any provision to the contrary contained in this Agreement, in no event shall Seller, Buyer or Buyer Agent be liable to the other or to any other party for any punitive, speculative, special, or consequential damages. The provisions of this Article 6 shall survive each Closing and the consummation of the transactions hereunder.
ARTICLE 7 – Indemnification
Section 7.1 By Seller. Except to the extent of any Losses (as defined below) which arise from the gross negligence or willful misconduct of Buyer Agent or its Affiliates (including any Beneficial Interest Holder), Seller shall indemnify and hold harmless Buyer, Buyer Agent, Buyer Agent’s Affiliates and each of their respective officers, directors, agents and employees (collectively, the “Buyer Indemnified Parties”), from and against any and all losses, costs, liabilities, damages and expenses, including those arising pursuant to any claims, suits or proceedings, (collectively, “Losses”), that arise from or relate to (a) any breach by Seller of any of its representations, warranties, covenants or other responsibilities set forth in this Agreement or the Program Agreement (without giving effect to any materiality qualifiers contained therein) or (b) any gross negligence, bad faith or willful misconduct by Seller or any of its respective officers, directors, agents, employees, or representatives with respect to the Options purchased by Buyer hereunder. To the extent that PTT is entitled to any indemnification under this Section 7.1, such indemnity payment shall be made to the applicable Beneficial Interest Holders.
Section 7.2 By Buyer Agent. Except to the extent of any Losses which arise from the gross negligence or willful misconduct of Seller, Buyer Agent, on its own behalf and on behalf of its respective Affiliates (including each Beneficial Interest Holder) shall indemnify and hold harmless Seller, Seller’s Affiliates and each of their respective officers, directors, agents and employees (collectively, the “Seller Indemnified Parties” and together with Buyer Indemnified Parties, the “Indemnified Parties”), from and against any and all Losses, that arise from or relate to (a) any breach by Buyer Agent or Buyer of any of their respective representations, warranties, covenants or other responsibilities set forth in this Agreement or the Program Agreement, or (b) any gross negligence, bad faith or willful misconduct by Buyer Agent, any Beneficial Interest Holder or any of their respective officers, directors, agents, employees, or representatives with respect to the Options purchased by Buyer hereunder.
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Section 7.3 Limitation of Liability. In no event shall any party hereto or its respective Affiliates be liable for special, incidental, consequential or punitive damages of any kind whatsoever (as opposed to direct or actual damages) arising out of the performance of their obligations hereunder; provided, however, that Seller shall be responsible and liable for any special, incidental, consequential or punitive damages incurred by, awarded to or owed to a Homeowner relating to an Option purchased by Buyer hereunder, which damages arose from or were caused by actions of Seller in breach of this Agreement or any other Option Document.
Section 7.4 Indemnification Procedure. Whenever any claim of the type that would occasion indemnification under this Article 7 is asserted or threatened against any Indemnified Party, the Indemnified Party shall promptly notify the indemnifying party. Each Indemnified Party shall notify, to the extent it has actual knowledge thereof, the indemnifying party, within ten (10) days after the occurrence thereof or obtaining knowledge thereof, of any event, which may give rise or otherwise trigger a right to seek indemnification pursuant to this Article 7. The notice shall include, if known, the facts constituting the basis for such claim, including, if known, the amount or an estimate of the amount of the liability arising therefrom. A failure to timely give such notification shall not affect the indemnification provided hereunder, except to the extent such failure materially prejudices any defense of claim available to the indemnifying party. In the event of any claim for indemnification hereunder resulting from or in connection with the claim or legal proceedings of a claimant not an Indemnified Party to this Agreement, the indemnifying party shall have the right, at its option, at its expense and with its own counsel (which counsel shall be reasonably satisfactory to the Indemnified Party seeking indemnification) to assume the defense of any such claim or any litigation resulting from such claim or to participate with its own counsel (which counsel shall be reasonably satisfactory to the Indemnified Party) in the compromise or defense thereof. If the indemnifying party undertakes to assume the defense of any such claim or litigation or participate in the compromise thereof, it shall promptly notify the Indemnified Party of its intention to do so, and, as a condition to the indemnifying party’s indemnification obligation, the Indemnified Party shall cooperate reasonably with the indemnifying party and its counsel (but at the sole expense of the indemnifying party) in the defense against or compromise of any such claim or litigation. Anything in this Section 7.4 to the contrary notwithstanding, if the Indemnified Party is seeking indemnity, the Indemnified Party shall not compromise or settle any such claim or litigation without the prior written consent of the indemnifying party, which consent will not be unreasonably withheld, conditioned or delayed, and if any Indemnified Party shall have any potential liability with respect to, or may be adversely affected by, such settlement or compromise, the indemnifying party shall not settle or compromise such claim or litigation without the prior written consent of such Indemnified Party. Any amounts due to a Buyer Indemnified Party hereunder shall be payable on demand.
ARTICLE 8 – MISCELLANEOUS
Section 8.1 Equal Employment Opportunity. During the performance of this Agreement, the Parties agree that neither Party shall discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, mental or physical disability, or other similar classifications arising under Applicable Law. Each Party shall ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, sex, national origin, or mental or physical disability. Such actions shall include, but not be limited to the following: employment upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation and selection for training, including apprenticeship.
Section 8.2 Notices. All demands, notices and communications under this Agreement shall be in writing and shall be deemed to have been duly given if (i) mailed by registered or certified mail, return receipt requested, or by overnight delivery service, addressed to the appropriate Party hereto at the addresses set forth below or (ii) transmitted by electronic mail with acknowledgment, to the appropriate Party hereto at the address provided by the other Party to this Agreement.
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If to Seller:
Point Digital Finance, Inc.
444 High Street, Fl 4
Palo Alto, CA 94301
Attn: Chief Executive Officer
Email: CEO@point.com
with a copy to:
Kutak Rock LLP
The Omaha Building
1650 Farnam Street
Omaha, NE 68102
Attn: Joel L. Wiegert
e-mail: joel.wiegert@kutakrock.com
If to Buyer Agent:
GB HRP, LLC
c/o Glassbridge Enterprises, Inc.
18 East 50th Street
New York, NY 10022
Attention: Daniel Strauss
e-mail: dstrauss@glassbridge.com
Copy to:
Holland & Knight LLP
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Attention: Eric Pfeifle
e-mail: eric.pfeifle@hklaw.com
If to PTT or Buyer:
Point Titling Trust
c/o Point Digital Finance, Inc., as Trust Manager
444 High Street, Floor 4
Palo Alto, CA 94301
Attn: Chief Executive Officer
e-mail: CEO@point.com
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Any such demand, notice or communication shall be deemed to have been received on (i) the date delivered to or received at the premises of the addressee (as evidenced by the date noted on the return receipt or overnight delivery receipt or other evidence of receipt) and (ii) if by electronic mail, upon the earlier of acknowledgment by the receiving party or the beginning of the business day at the location of the recipient (which may be simultaneous with delivery). Each Party covenants that it shall not disseminate the other Party’s non-public notice information to any third Person without the prior written consent of the affected Party. No notice of termination shall impair the rights or priorities of any party created or acquired prior to the receipt of such notice. Either Party may change its address for purposes of this Section upon delivery to the other Party of a notice of a change of address in the manner provided for notices hereunder.
Section 8.3 Attorney’s Fees. The prevailing Party (on the main issues(s)) in any action or proceeding to interpret or enforce this Agreement shall be entitled, in addition to any judgment or award upon such action or proceeding, to an award for all costs and expenses (including costs of all legal or administrative proceedings or hearings and attorneys’ fees) incurred by such prevailing Party or Parties, including, without limitation, all attorneys’ fees and related costs of enforcement of any such judgment or award and upon any appeal relating thereto.
Section 8.4 Authority. With the intent to be legally bound, each of the undersigned hereby covenants and acknowledges that it (a) has read each of the terms set forth herein, (b) has the authority to execute this Agreement for such person or entity, and (c) expressly consents and agrees that the entity upon behalf of which the undersigned is acting, shall be bound by all terms and conditions contained herein. Notwithstanding the foregoing, no stockholder, partner, member, manager, director, officer, agent, or employee of any party shall have any direct or indirect personal liability with respect to this Agreement or the transactions contemplated hereby, nor shall the property of the same be subject to attachment, levy, execution or other judicial process in any legal proceeding arising with respect thereto, except where such Person knowingly participates in fraud or willful misconduct.
Section 8.5 Successors and Assigns and Sale of Options. The provisions of this Agreement shall be binding upon and inure to the benefit of, each of the Parties hereto, and their respective successors in interest, assigns, heirs, and personal representatives. This Agreement may be assigned on the same terms as Section 7.11 of the Program Agreement.
Section 8.6 Severability. If any provision of this Agreement shall be determined to be invalid, illegal, or unenforceable, the balance of this Agreement shall remain in full force and effect, and if any provision is inapplicable to any person of circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. In lieu of such invalid, illegal, or unenforceable term, there shall be added to this Agreement a term that is valid and fully enforceable and as similar, in purpose and intended effect, to such invalid, illegal, or unenforceable term as is reasonably possible.
Section 8.7 Headings; Exhibits. The article, section and paragraph headings set forth in this Agreement are inserted solely for the convenience of reference and are not a part of, and are not intended to govern, limit, or aid in the construction or interpretation of, any term or provision hereof. The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.
Section 8.8 Time. Time is, and shall be, of the essence of each and every provision of this Agreement.
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Section 8.9 Governing Law; Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING GENERAL OBLIGATIONS LAW §5-1401, BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. BUYER, BUYER AGENT AND SELLER IRREVOCABLY (I) SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN SANTA CLARA COUNTY, CALIFORNIA FOR THE PURPOSE OF ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND NOT SUPERSEDED BY SECTION 8.11 (E.G., PROCEEDINGS FOR PRELIMINARY RELIEF); (II) WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH COURT; (III) AGREE THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING FROM ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENT TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER. SELLER AND BUYER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND NOT OTHERWISE RESOLVED VIA ARBITRATION.
Section 8.10 Mediation. Any dispute between the Parties under this Agreement or the other Program Documents shall be submitted to mediation at the written election of either Party, prior to the filing of arbitral proceedings under Section 8.11 (except when a statute of limitation is about to expire). Within ten (10) days of that election, Seller and Buyer Agent shall select one mediator not affiliated with Seller or Buyer Agent. If, by the end of that ten (10) day period, Seller and Buyer Agent cannot agree on a mediator, then each Party shall select a mediator of its choice; and the two mediators selected by Seller and Buyer Agent shall select a mediator of their choice not affiliated with either Seller or Buyer Agent. Within ten (10) days of being appointed, the mediator(s) selected in accordance with this provision shall mediate between Seller and Buyer with the objective of resolving the dispute submitted for mediation.
Section 8.11 Arbitration. In the event the Parties have a dispute under this Agreement or the other Program Documents that cannot be amicably resolved by mediation or otherwise, upon the mutual agreement of both Parties, the Parties agree to submit the dispute to binding arbitration to JAMS in its office closest to Palo Alto, California (with all proceedings required to be held there), pursuant to its Comprehensive Arbitration Rules and Procedures, and in accordance with the Expedited Procedures in those Rules. The arbitration shall be conducted by a single arbitrator, with respect to any dispute reasonably involving under $1,000,000, and three arbitrators, with respect to any dispute reasonably involving over $1,000,000. The arbitrator(s) shall provide the Parties with a brief period of time (not to exceed ninety (90) days) to conduct discovery. The award rendered by the arbitrator(s) shall be final, and judgment may exclusively be entered upon it in accordance with Applicable Law in federal or state courts located in Santa Clara County, California. The Parties shall maintain the confidential nature of the arbitration proceedings, the Award, and the arbitration hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an Award or its enforcement, or unless otherwise required by law or judicial decision. The costs of arbitration and reasonable counsel fees will be borne by the Party determined by the arbitrator to be the non-prevailing Party. If the arbitrator does not make a finding as to whether a Party is to be considered a prevailing Party, the Parties shall share the costs of arbitration equally and each Party shall bear its own counsel and other arbitration fees. The Parties agree to be bound by the decision of the arbitrator.
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Section 8.12 Neutral Interpretation. This Agreement is the product of negotiations of the Parties, and in the enforcement or interpretation hereof is to be enforced and interpreted in a neutral manner, and any presumption with regard to construction or interpretation for or against any Party by reason of that Party having drafted, or caused to be drafted, this Agreement, or any portion of it, or edited the same, shall not be effective in regard to the interpretation hereof or thereof.
Section 8.13 Entire Agreement. The Program Documents and any documents attached as exhibits or executed in connection herewith or therewith, constitute the Parties’ entire and final agreement with respect to the subject matter hereof and thereof, and supersede all agreements, representations, warranties, statements, promises, and understandings, whether oral or written, with respect to the subject matter herewith. This Agreement may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the Parties, and there are no (and shall be no) unwritten oral agreements between the Parties. The Parties make no representations or warranties to each other, except as contained in this Agreement or in the accompanying exhibits or the certificates or other Seller Post-Closing Documents or Buyer Agent/PTT Post-Closing Documents delivered according to this Agreement. This Agreement may not be changed, waived, discharged, or terminated orally, except by an instrument in writing signed by the Party against which enforcement of such change, waiver, discharge, or termination is sought.
Section 8.14 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Electronic signatures may be accepted as original signatures.
Section 8.15 Term of Agreement; Termination. This Agreement shall continue until terminated in accordance with the Program Agreement.
Section 8.16 Further Assurance and Acts. From time to time, Seller shall (i) execute and deliver to Buyer Agent such additional documents, (ii) provide such additional information to Buyer Agent and (iii) do such further acts, as Buyer Agent may reasonably require to effectuate the intent and purposes of, and to carry out the terms of, this Agreement, all Option Documents and any agreements executed in connection herewith or therewith, which further acts may include without limitation, reasonably cooperating with Buyer Agent to ensure that Buyer is named, promptly following the Closing Date for any particular Option, (a) as the loss payee on each such Homeowner’s casualty insurance policy required by the Option Documents for such Option, and (b) an “additional insured” on each such Homeowner’s liability insurance policies required by the Option Documents for such Option. In addition, each of Buyer and Buyer Agent agrees to take, or cause to be taken, such acts, including, without limitation, execution and delivery of additional documents, instruments and agreements as may be reasonably necessary to carry out the purposes of this Agreement and to consummate the transactions contemplated hereby.
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Section 8.17 Relationships of the Parties. The relationship among Seller, Buyer Agent and Buyer created under this Agreement shall be as seller and buyer. None of the Parties hereto are partners or joint venturers, and no such Party shall act as agent for the other, except as otherwise provided in the Program Documents with respect to actions to be taken by or on behalf of PTT, as Buyer. Except for the transactions described in this Agreement and the other Program Documents, Seller has no business or other relationship with Buyer and is not engaged in Buyer’s business or other activities. It is the intention of the parties that each purchase of an Eligible Option to be made hereunder shall constitute a true sale and absolute conveyance, and that each purchase by Buyer is absolute and irrevocable, without reservation or retention of any interest whatsoever by Seller. Except as otherwise provided in this Agreement, each conveyance is made without recourse to Seller; provided, however, that (i) Seller shall be liable to Buyer, Buyer Agent and their respective affiliates for all representations, warranties, covenants and other agreements made by Seller pursuant to the terms of this Agreement, the Program Agreement and any other Program Documents, subject to the respective terms and conditions thereof, and (ii) except as specifically set forth herein, such purchase does not constitute and is not intended to result in an assumption by Buyer or any assignee thereof of any obligation of Seller or any other Person, whether arising under the Eligible Options or otherwise existing. Seller agrees to note in its books and records that the Eligible Options have been conveyed to Buyer, and Buyer agrees to note in its books and records that it has purchased such Eligible Options and has not Optioned Seller funds secured by such Eligible Options. If, notwithstanding the intention of the parties, Seller shall be deemed for any reason to have retained any right, title or interest in or to any Eligible Option that is or was purported to be the subject of any purchase by Buyer hereunder, then (i) Seller shall be deemed to hold the same in trust, for Buyer’s benefit and account, and (ii) Seller shall be deemed to have granted, and Seller hereby does grant, to Buyer a senior security interest in all of Seller’s right, title and interest in, to and under all such Eligible Options now existing or hereafter arising, which senior security interest shall secure all present and future obligations of Seller hereunder and under the Program Agreement with respect thereto and all amounts paid by Buyer and/or Buyer Agent to Seller hereunder plus interest and other charges that accrue on all Eligible Options. It is the intention of Seller, Buyer Agent and Buyer that the Eligible Options sold by Seller to Buyer pursuant to this Agreement and the Program Agreement shall not be part of Seller’s estate in the event of the filing of a bankruptcy petition by or against Seller under any bankruptcy or similar law. Buyer Agent (or any of its Affiliates) may, in its sole discretion, file a UCC financing statement against Seller and Servicer in order to perfect its senior security interest as a purchaser in the Eligible Options purchased by Buyer, solely as a protective measure in the event the transactions described herein may be or were ever characterized as financings, provided that Buyer Agent shall provide Seller and Servicer with prior written notice of such filing and the opportunity to review and reasonably comment on such UCC financing statement. As of the Effective Date, the chief executive office and the principal place of business of Seller is as set forth in Section 8.2; the exact legal name of Seller is as set forth in the first Paragraph; and Seller is a corporation incorporated solely under the laws of the State of Delaware. Seller shall provide written notification to Buyer Agent at least ten (10) Business Days prior to any changes to the chief executive office, principal place of business, legal name, type of organization or jurisdiction of organization of Seller.
Section 8.18 Buyer Financing; Option Transfers and Securitization Transactions. (a) Should Buyer Agent (or its Affiliates) elect to finance a significant portion of its purchase of Options and the related Investor SUBIs, under this Agreement, Seller shall provide such assistance as Buyer Agent may reasonably request of it to facilitate the completion of such transaction, including, without limitation, participating in a reasonable amount of conference calls and basic due diligence that a financing partner may require; provided, that the request does not adversely impact the regular operation of Seller’s business and Seller is not required to incur (i) any greater-than-de minimis out-of-pocket costs in connection with such assistance or (ii) any material obligation or liability to such financing partner; provided, that this assistance is related to the consummation of such funding and not in connection with multiple funding requests.
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(b) Seller acknowledges and agrees that with respect to some or all of the Options, Buyer, at the direction of Buyer Agent, may affect one or more Option Transfers and/or Securitization Transactions. With respect to each Option Transfer or Securitization Transaction, as the case may be, entered into by Buyer, Seller agrees:
(i) to cooperate with Buyer Agent and any prospective purchaser with respect to all reasonable requests and due diligence procedures in connection therewith;
(ii) to execute and be bound by an assignment, assumption and recognition agreement, in form and substance acceptable to Seller in its reasonable discretion;
(iii) to deliver to Buyer Agent for inclusion in any prospectus or other offering material such publicly available information regarding Seller, its financial condition and its option delinquency, foreclosure and loss experience and any additional information reasonably requested by Buyer Agent, and to deliver to Buyer Agent any similar nonpublic, unaudited financial information, in which case Buyer Agent shall bear the cost of having such information audited by certified public accountants if Buyer Agent desires such an audit, or as is otherwise reasonably requested by Buyer Agent and which Seller is capable of providing without unreasonable effort or expense;
(iv) to deliver to Buyer Agent and to any Person designated by Buyer Agent, at Buyer Agent’s expense, such statements and audit letters of reputable, certified public accountants as are customarily delivered in connection with an Option Transfer or Securitization Transaction pertaining to Seller’s financial condition as shall be reasonably requested by Buyer Agent;
(v) to deliver to Buyer Agent, and to any Person designated by Buyer Agent, at Buyer Agent’s expense, such legal documents and opinions of counsel (which counsel may be in-house counsel or independent, outside counsel of Seller) as are customarily delivered by originators or sellers and reasonably determined by Buyer Agent to be necessary in connection with any Option Transfer or Securitization Transaction, as the case may be, such opinions of counsel to be in the form and substance reasonably acceptable to Buyer Agent and Seller;
(vi) to agree to permit any prospective assignees of Buyer that have entered into a commitment to purchase any of the Options in connection with an Option Transfer or a Securitization Transaction, subject to a mutually acceptable confidentiality agreement, to assess Option information and review Seller’s servicing and origination operations, upon reasonable prior notice to Seller, and Seller shall reasonably cooperate with such assessment and reviews to the extent such prospective assignees request information and documents (in electronic form or otherwise) that are reasonably available and can be produced without unreasonable expense or effort. Any such review shall be during normal business hours undertaken in a manner that does not unreasonably interfere with Seller’s business operations. Subject to any Applicable Laws, Seller shall make the Option Files related to the Options held by Seller available at Seller’s principal operations center for review by any such prospective assignees during normal business hours upon reasonable prior notice to Seller (in no event fewer than ten (10) Business Days prior notice);
(vii) to agree and consent that all information provided by Seller to any Rating Agency for the purpose of determining, and which is used in connection with, the initial rating of a rated Securitization Transaction including the Options, or for undertaking credit rating surveillance on such Securitization Transaction, may be posted on a website which complies with the requirements of Rule 17g-5 of the Securities Exchange Act of 1934 on request of Buyer Agent. Upon request of Buyer Agent, Seller shall provide all such information in electronic form as needed to effect such posting. To the extent any Rating Agency conducts a review of the operations of the Seller which may be used in connection with the initial rating of a Securitization Transaction or the surveillance thereof, on request of Buyer Agent, Seller shall provide to Buyer Agent in electronic form all information that was provided to the Rating Agency in connection with such review; and
(viii) to represent and warrant to each Rating Agency providing a rating in connection with a Securitization Transaction, in a separate writing that (A) Seller shall promptly provide to each Rating Agency all information requested by each Rating Agency in accordance with its published ratings criteria, (B) all information provided to the Rating Agency contains no untrue statement of a material fact and does not omit a material fact necessary in order to make such information, in light of the circumstances in which it was provided, not misleading, and (C) provide such other data or information, and shall make any additional representations or warranties reasonably required by any Rating Agency, in each case which are customary for assets similar to the Options.
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All of the Options not sold or transferred pursuant to a Securitization Transaction or an Option Transfer shall continue to be subject to this Agreement and, with respect thereto, this Agreement shall remain in full force and effect. In no event shall an Option Transfer or a Securitization Transaction be deemed to relieve Seller of its obligations as set forth in this Agreement with respect to the Options not sold or transferred pursuant to a Securitization Transaction or an Option Transfer. Buyer Agent shall, or shall cause the Beneficial Interest Holders (in accordance with the terms of the related Investor SUBIs) to, reimburse Seller or to cause Seller to be reimbursed for all reasonable out-of-pocket costs or expenses incurred by Seller in connection with performing its duties and obligations in this Section 8.18(b) in connection with any Option Transfer or Securitization Transaction, including, without limitation, reasonable legal fees and expenses. Without limitation of the foregoing, in no event shall Seller be required to take any action pursuant to this Section 8.18(b) that would require or result in the incurrence by Seller of any material out-of-pocket costs or expenses unless Buyer Agent shall have paid or caused the payment such amounts, or made arrangements for the payment of such amounts upon incurrence, in a manner acceptable to Seller in its reasonable discretion
Section 8.19 Waiver of Setoff. Except as otherwise expressly provided herein or in the Servicing Agreement with respect to contemplated offsets or netting against in respect of Servicing Fee payments, all payments hereunder by Seller to Buyer, Buyer Agent or any Beneficial Interest Holder or by Buyer, Buyer Agent or any Beneficial Interest Holder to Seller, shall be made without setoff, counterclaim or other defense and each of the Parties hereto hereby waives any and all of its rights to assert any right of setoff, counterclaim or other defense to the making of a payment due hereunder to the other Parties.
Section 8.20 Force Majeure. If any Party anticipates being unable or is rendered unable, wholly or in part, by an extreme and unexpected force outside the control of such Party (including, but not limited to, act of God, legislative enactments, strikes, lock-outs, riots, acts of war, epidemics, fire, communication line or power failure, earthquakes or other disasters) to carry out its obligations under this Agreement, that Party shall give the other Party prompt written notice to that effect, the expected duration of the inability to perform, and assurances that all available means will be employed to continue and/or restore performance. Upon receipt of the written notice, the affected obligations of the Party giving the notice shall be suspended so long as such Party is reasonably unable to so perform and such Party shall have no liability to the other for the failure to perform any suspended obligation during the period of suspension; however, the other Party may at its option terminate this Agreement if the period of time subject to force majeure extends beyond one hundred and eighty (180) days.
Section 8.21 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and assigns; provided, that except as otherwise expressly set forth herein, no Party may assign this Agreement without the written consent of the other Parties hereto; provided further, that Buyer Agent may assign this Agreement to an Affiliate without consent.
Section 8.22 Concerning the UTI Trustee. The parties hereto are put on notice and hereby acknowledge and agree that (a) this Agreement is executed and delivered on behalf of PTT by Wilmington Savings Fund Society, FSB (“WSFS”), as UTI Trustee of PTT, not individually or personally but solely as trustee of PTT, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of PTT is made and intended not as a personal representation, undertaking or agreement of WSFS but is made and intended for the purpose of binding PTT, (c) nothing herein contained shall be construed as creating any liability on WSFS, individually or personally, to perform any covenant either expressed or implied contained herein of PTT, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) WSFS has made no investigation as to the accuracy or completeness of any representations and warranties made by PTT in this Agreement, and (e) under no circumstances shall WSFS be personally liable for the payment of any indebtedness or expenses of PTT or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by PTT under this Agreement or any other related document.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.
| BUYER AGENT: | ||
| GB HRP, LLC | ||
| By: | /s/ Daniel Strauss | |
| Name: | Daniel Strauss | |
| Title: | President | |
[Signature Page to Master Option Sale Agreement]
| SELLER: | ||
| POINT DIGITAL FINANCE, INC., | ||
| a Delaware corporation | ||
| By: | /s/ Eddie Lim | |
| Name: | Eddie Lim | |
| Title: | CEO | |
[Signature Page to Master Option Sale Agreement]
| DEPOSITOR AND TRUST MANAGER, | ||
| with respect to Point Titling Trust: | ||
| POINT DIGITAL FINANCE, INC., | ||
| a Delaware corporation | ||
| By: | /s/ Eddie Lim | |
| Name: | Eddie Lim | |
| Title: | CEO | |
[Signature Page to Master Option Sale Agreement]
| TITLING TRUST, BUYER AND ISSUER | ||
| OF THE INVESTOR SUBIs: | ||
| POINT TITLING TRUST | ||
| By: | Wilmington Savings Fund Society, FSB, | |
| not in its individual capacity but solely as | ||
| UTI Trustee | ||
| By: | /s/ Mary Emily Pagano | |
| Name: | ||
| Title: | ||
[Signature Page to Master Option Sale Agreement]
EXHIBIT A
ASSIGNMENT AND ASSUMPTION OF OPTION DOCUMENTS
THIS ASSIGNMENT AND ASSUMPTION OF OPTION DOCUMENTS (“Assignment”), is made as of the ___________ day of ___________, 202__, by and between ________________________, a ________________________ (“Assignor”), and ________________________, a ________________________ (“Assignee”).
Assignor and Assignee (or its/their legal predecessor(s)) have entered into that certain Master Option Sale Agreement dated December 29, 2023 (the “Agreement”), for the purchase and sale of certain residential purchase options and the assignment of certain documents to Assignee, all as more particularly described in the Agreement. Capitalized terms not otherwise defined herein have the meanings given to them in the Agreement.
This Assignment is being made pursuant to the terms of the Agreement for the purpose of assigning to Assignee all of Assignor’s rights, title and interest in and to those certain Option documents described on Schedule 1 attached hereto (the “Option Documents”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Assignment of Option Documents. Assignor hereby grants, assigns, transfers, conveys and delivers to Assignee the Option Documents and all of Assignor’s right, title, interest, benefits and privileges thereunder, and Assignee hereby accepts such Assignment. Notwithstanding anything to the contrary in this Assignment, Assignor shall continue to be entitled (on a non-exclusive basis) to the rights of indemnity, defense and to be held harmless provided to the holder of the Option Documents; provided, however, that (i) nothing herein shall be construed to limit the right, title and interest of Assignee once Assignee becomes the holder of the Option Documents, to all such rights of indemnity, defense and to be held harmless, (ii) if and to the extent Assignor’s rights of indemnity, defense and to be held harmless provided to the lender under the Option Documents conflict or compete in any way with Assignee’s rights of indemnity, defense and to be held harmless provided to the holder of the Option Documents, Assignee’s rights shall have priority, and (iii) if and to the extent any amounts are recoverable from or payable by a Homeowner under the Option Documents in satisfaction of such indemnity and/or defense obligations, then as between Assignee (and Buyer Indemnified Parties) and Assignor (and Seller Indemnified Parties), Assignee (and Buyer Indemnified Parties) shall have first priority as to same.
2. Assumption of Obligations. By acceptance of this Assignment, Assignee hereby assumes and agrees to hereafter perform and to be bound by all of the terms, covenants, conditions and obligations imposed upon or assumed by Assignor under the Option Documents from and after the Closing (as defined in the Agreement).
3. Additional Rights and Obligations. Assignee and Assignor hereby agree and acknowledge that this Assignment is being entered into pursuant to and subject to the terms and conditions set forth in the Agreement and that additional rights and obligations of the parties are expressly provided for therein, and that the execution and delivery of this Assignment shall not impair, diminish, or expand any of the rights or obligations of any of the parties to the Agreement as set forth therein. In the event of a conflict between the terms of this Assignment and the Agreement, the terms of the Agreement shall control.
| 1 |
| Exhibit A |
4. Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of the successors, assigns, personal representatives, heirs and legatees of the respective parties hereto.
5. Attorneys’ Fees. In the event of the bringing of any action or suit by a Party hereto against another Party hereunder by reason of any breach of any of the covenants, conditions, agreements or provisions on the part of the other Party arising out of this Assignment, then in that event the prevailing Party shall be entitled to have and recover of and from the other Party all costs and expenses of the action or suit, including reasonable attorneys’ fees.
6. Governing Law. This Assignment shall be governed by, interpreted under, and construed and enforceable with, the laws of the State of New York, including General Obligations Law §5-1401, but otherwise without regard to the conflicts of laws principles thereof, and the state and federal courts located in Santa Clara County, California shall be the exclusive venue for any action or proceeding relating hereto.
7. Counterparts. This Assignment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.
8. Concerning the UTI Trustee; Trust Manager Direction. The parties hereto are put on notice and hereby acknowledge and agree that (a) this Assignment is executed and delivered on behalf of PTT by Wilmington Savings Fund Society, FSB (“WSFS”), as UTI Trustee of PTT, not individually or personally but solely as trustee of PTT, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of PTT is made and intended not as a personal representation, undertaking or agreement of WSFS but is made and intended for the purpose of binding PTT, (c) nothing herein contained shall be construed as creating any liability on WSFS, individually or personally, to perform any covenant either expressed or implied contained herein of PTT, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) WSFS has made no investigation as to the accuracy or completeness of any representations and warranties made by PTT in this Assignment, and (e) under no circumstances shall WSFS be personally liable for the payment of any indebtedness or expenses of PTT or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by PTT under this Assignment or any other related document. By its acknowledgment of this Assignment, pursuant to the governing instrument of PTT, Point Digital Finance, Inc., as Trust Manager, hereby directs the UTI Trustee to execute and deliver this Assignment on behalf of PTT.
[SIGNATURE PAGE FOLLOWS]
| 2 |
| Exhibit A |
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the date first written above.
| “ASSIGNOR”: | ||
| POINT DIGITAL FINANCE, INC., | ||
| a Delaware corporation, as Assignor, | ||
| and as Trust Manager for purposes of Section 8 hereof | ||
| By: | ||
| Name: | ||
| Title: | ||
| “ASSIGNEE”: | ||
| POINT TITLING TRUST | ||
| By: | Wilmington Savings Fund Society, FSB, | |
| not in its individual capacity but solely as | ||
| UTI Trustee | ||
| By: | ||
| Name: | ||
| Title: | ||
| 3 |
| Exhibit A |
SCHEDULE 1
TO
ASSIGNMENT AND ASSUMPTION OF OPTION DOCUMENTS
| Investment ID | Closing Date | County-State | Investment Amount | |||||
| 2015-SAMPLE-1 | 1/10/18 | Marin-CA | $ | 100,000 | ||||
| 4 |
| Exhibit A |
EXHIBIT B
[RESERVED.]
| 1 |
| Exhibit B |
EXHIBIT C
OPTION DOCUMENTS
With respect to each Option:
(a) the original (or a photocopy certified by the Seller to be a true and complete copy of the original) Option Agreement, between the Homeowner(s) and Seller (and signed in the name of Seller by an officer thereof);
(b) the original Security Instrument executed in connection with the Option with evidence of recording thereon, or if any such Security Instrument has not been returned from the applicable recording office or has been lost, or if such public recording office retains the original recorded document, a photocopy of such Security Instrument, certified by Seller to be a true and complete copy of the original recorded Security Instrument;
(c) the original (or a photocopy certified to be a true and complete copy of the original) Consent of Spouse, if required by the Underwriting Guidelines; and
(d) if applicable, the original (or a photocopy certified to be a true and complete copy of the original) of each assumption, modification, consolidation or extension agreement, if any, with evidence of recording thereon.
| 1 |
| Exhibit C |
EXHIBIT D
HOMEOWNER NOTIFICATION LETTER
[NOTIFICATION DATE]
Dear John Doe,
On [CLOSING DATE], Point transferred its interest in your Option Agreement to one of its investors, Point Titling Trust, a Delaware statutory trust.
None of your rights or obligations under the Option Agreement are impacted by this assignment,
and no terms in the Option Agreement have changed.
Thank you,
Point Digital Finance, Inc.
PO Box 192
Palo Alto, CA 94302
notices@point.com
Option ID: 2021-SAMPLE
123 High Street, Palo Alto, CA 94301
| 1 |
| Exhibit D |
EXHIBIT E
ELIGIBLE OPTIONS
| ● | The maximum LOTV for any Option shall be as stated in the chart below, based on the Appraised Value for the Property related to such Option. |
| Appraised Value | Maximum LOTV | |||
| Under $3,500,000 | 80 | % | ||
| Greater than or equal to $3,500,000, but less than $4,000,000 | 70 | % | ||
| Greater than or equal to $4,000,000, but less than $4,500,000 | 65 | % | ||
| Greater than or equal to $4,500,000, but less than $5,000,000 | 60 | % | ||
| Greater than or equal to $5,000,000, but less than or equal to $6,000,000 | 55 | % | ||
Notwithstanding the foregoing, (i) if the Security Instrument securing such Option is in third lien position, the maximum LOTV shall be fifty-five percent (55%), and (ii) if the Property related to such Option is not owner-occupied, the maximum LOTV shall be sixty percent (60%).
| ● | Such Option has an Investment Thickness that is not greater than thirty percent (30%). |
| ● | The Appraised Value of the applicable Property relating to such Option is no greater than $6,000,000. Buyer can consent in writing in its sole discretion to an exception to the foregoing parameters. |
| ● | The Investment Amount relating to such Option is no greater than $1,000,000, provided that if the Appraised Value of the Property related to such Option is based on an Automated Valuation Model pursuant to the Underwriting Guidelines, the Investment Amount shall be no greater than $250,000. Buyer can consent in writing in its sole discretion to an exception to the foregoing parameters. |
| ● | The Risk Adjustment Percentage with respect to such Option is no less than fifteen percent (15%). |
| 1 |
| Exhibit E |
| ● | With respect to any Option not subject to a Promotional Period at the time of origination, the applicable Homeowner Protection Cap for such Option is at least seventeen percent (17%). |
| ● | With respect to any Option that is subject to a Promotional Period at the time of origination (i) the duration of the Promotional Period for such Option is not greater than 24 months, (ii) the applicable Promotional Period Homeowner Protection Cap during such Promotional Period is at least fourteen percent (14%) and (iii) the applicable Homeowner Protection Cap in effect following the expiration of such Promotional Period is at least seventeen percent (17%). |
| ● | The Option relates to a Property owned by the applicable Homeowner prior to the origination of such Option, such Option does not represent purchase money financing for the related Property and no other residential purchase Option exists with respect to the related Property. |
| ● | The Investment Term (as defined in the related Option Agreement) for such Option is thirty (30) years. |
| ● | The lien relating to such Option is valid, perfected and free and clear of all adverse claims, liens and encumbrances having priority over the lien of such Option subject only to (i) each of the first and second, if applicable, encumbrance or lien relating to mortgages on the Property, as permitted by the Option Agreement and the other related Option Documents (provided, however, that no mortgage liens senior in priority to the Option will constitute reverse or negative amortization mortgages unless the same are subject to a stated maximum amount outstanding, in which case such maximum amount (and not the outstanding principal amount) shall be included in the calculation of the LOTV for the related Option), (ii) the lien of non-delinquent current real property taxes and assessments not yet due and payable, (iii) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording which are acceptable to real estate or mortgage financing institutions generally and either (A) which are referred to or otherwise noted in the preliminary title report, which is considered by Seller in the origination of such Option, or (B) which do not adversely affect the Appraised Value of the Property as set forth in such appraisal and (4) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by such Option or the use, enjoyment, value or marketability of the related Property (e.g., utility company easements). Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with such Option establishes and creates a valid, subsisting, enforceable and perfected lien and security interest on the property described therein (subject, as to enforceability, to bankruptcy and other creditors rights laws), and Seller has the full right to sell and assign the same to Buyer. The related original Deed of Trust relating to such Option has been recorded or are in the process of being recorded. |
| ● | The Property relating to such Option is located in a Permitted State. |
| 2 |
| Exhibit E |
| ● | Such Option, together with the related Option Agreement and the other related Option Documents, was originated and continues to be in compliance in all material respects with all Applicable Law. |
| ● | Such Option was underwritten in conformance with Seller’s Underwriting Guidelines in effect at the time of origination without regard to any underwriter discretion, unless Buyer Agent consents in writing to an exception to the Underwriting Guidelines in its sole discretion. |
| ● | To Seller’s knowledge, the Property is free of dangerous levels of contaminates, oils, asbestos, radon, PCBs, hazardous substances or waste as defined by federal, state or local environmental laws, regulations or administrative orders or other materials, the removal of which is required or the maintenance of which is prohibited, regulated or penalized by any Governmental Authority. |
| ● | To Seller’s knowledge, no condition exists that materially adversely affects or impairs the value of the Option or the Property, or that jeopardizes any security therefor. |
| ● | The Homeowner, (a) if a natural Person, is not deceased, and (b) if not a natural Person, is a limited liability company, a trust or another entity type acceptable to Seller and permitted pursuant to the Underwriting Guidelines, in each case, that is in existence and has not been dissolved. |
| ● | The Homeowner is not employed by, related to or affiliated with Seller or any of its Affiliates. |
| ● | Each of the representations and warranties set forth in Section 4.2 of this Agreement with respect to such Option are true and correct in all material respects as of the date made or deemed made. |
| ● | No Regulatory Trigger Event shall have occurred in the state in which such Option was originated. |
| ● | Subject to Section 6.1.5, no Option offered for sale to Buyer hereunder shall constitute an Eligible Option to the extent the acquisition or ownership by Buyer of such Option would cause any of the following portfolio requirements (collectively, the “Portfolio Constraints”) to be untrue as of the date of acquisition of such Option (each as determined by reference to the Investment Amount of such Eligible Option and the aggregate Investment Amount of all Allocated Eligible Options, and calculated on a weighted average basis utilizing the applicable Investment Amounts for such Allocated Eligible Options): |
(i) The aggregate amount of Allocated Eligible Options purchased by Buyer that have an Investment Thickness above twenty-five percent (25%) shall not exceed five percent (5%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(ii) The aggregate amount of Allocated Eligible Options purchased by Buyer for which the related Properties are located in the same zip code shall not exceed two and one-half percent (2.50%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
| 3 |
| Exhibit E |
(iii) The aggregate amount of Allocated Eligible Options purchased by Buyer that are subject to a Promotional Period for which the related Promotional Period Homeowner Protection Cap is less than seventeen percent (17%) shall not exceed ten percent (10%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(iv) The aggregate amount of Allocated Eligible Options purchased by Buyer that are not owner-occupied shall not exceed five percent (5%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(v) The aggregate amount of Allocated Eligible Options purchased by Buyer that have an Investment Amount above $500,000 shall not exceed five percent (5%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(vi) The aggregate amount of Allocated Eligible Options purchased by Buyer that have a third lien position shall not exceed twelve and one-half percent (12.5%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(vii) The aggregate amount of Allocated Eligible Options purchased by Buyer for which the related Property’s Appraised Value is based on an Automated Valuation Model, pursuant to the Underwriting Guidelines, shall not exceed twenty percent (20%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(viii) The aggregate amount of Allocated Eligible Options purchased by Buyer that have an LOTV above seventy percent (70%) shall not exceed seven and one-half percent (7.50%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(ix) The aggregate amount of Allocated Eligible Options purchased by Buyer that have an LOTV above seventy-five percent (75%) shall not exceed two and one-half percent (2.50%) of the aggregate amount of all Allocated Eligible Options purchased by Buyer;
(x) The weighted average Homeowner Protection Cap of Allocated Eligible Options purchased by Buyer (as calculated at the time of origination, and giving effect to any applicable Promotional Period Homeowner Protection Cap) shall be not less than nineteen percent (19%);
(xi) The weighted average Investment Thickness of Allocated Eligible Options purchased by Buyer shall not exceed nineteen and one-half percent (19.50%);
(xii) The Allocated Eligible Options purchased by Buyer shall have a weighted average Multiple of not less than 3.1;
(xiii) The weighted average Risk Adjustment Percentage of Allocated Eligible Options purchased by Buyer shall be not less than twenty-three and one-half percent (23.50%);
(xiv) The weighted average Credit Score of Allocated Eligible Options purchased by Buyer shall be not less than 625; and
(xv) The weighted average LOTV of Allocated Eligible Options purchased by Buyer shall be not greater than fifty-five percent (55%).
| 4 |
| Exhibit E |
EXHIBIT F
FORM OF OPTION OFFER NOTICE
[*Date*]
Via Electronic Mail
GB HRP, LLC
18 East 50th Street
New York, NY 10022
Attention: Daniel Strauss
e-mail: dstrauss@glassbridge.com
| Re: | Option Offer Notice – SUBI Beneficial Owner: [X] |
Ladies and Gentlemen:
Reference is hereby made to that certain Master Option Sale Agreement dated effective as of December 29, 2023 (as amended, modified, supplemented, extended or renewed from time to time, the “Sale Agreement”) by and among POINT DIGITAL FINANCE, INC. (“Seller”), Point Tiling Trust and GB HRP, LLC (“Buyer Agent”). Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Sale Agreement.
Pursuant to the terms of the Sale Agreement and the Program Agreement, Seller hereby notifies Buyer Agent and the applicable beneficial owner specified above of the offer of the Eligible Options set forth on Schedule 1 attached hereto (collectively, the “Subject Options”) for purchase by such beneficial owner, determined by the Investor Allocation Process and subject to the terms and conditions of the Sale Agreement. Seller shall debit the Funding Account on or before the Closing Date in an amount equal to the Purchase Price of each Subject Option.
This Option Offer Notice is subject to all of the terms and conditions of the Sale Agreement and the Program Agreement.
| Yours truly, | ||
| Point Digital Finance, Inc., as Seller | ||
| By: | ||
| Name: | ||
| Title: | ||
| 1 |
| Exhibit F |
SCHEDULE I TO OPTION OFFER NOTICE
| Investment ID | Investment Amount | Acquisition Fee | Appraised Value | State-Zip | LOTV | Risk Adjustment Percentage | HEI Percentage | Max IRR | Title & Tax Cost | Assignment Cost | Purchase Price | |||||||||||||||||||||||||||||||
| 2018111-ABCDE | 100,000 | 5,000 | 1,125,000 | CA-94702 | 35.2 | % | 18.0 | % | 20.7 | % | 20.7 | % | 483.00 | 75.00 | 105,558 | |||||||||||||||||||||||||||
EXHIBIT G
INVESTOR ALLOCATION PROCESS
Point Option Contract Assignment Process
Last Updated: October 1, 2018
Summary
To ensure all investors have a fair opportunity to be assigned option contracts (the “Options”), Point assigns Options on a random, pro-rata basis, as described further below. This Allocation Policy mitigates the risk that any investor is subject to adverse selection based on inequitable distribution of Options.
Process
For options that meet eligibility criteria of at least two investors (“Eligible Options”), Point will execute the following process:
| ● | Each investor will be assigned a probability of receiving the option (“Option Probability”). | |
| ● | Option Probability will account for contractual obligations, capital capacity, and Options already sold to the investor in the relevant time period. For example, if an investor has capital capacity remaining of $400k and the Option is $500k, the Option will not be deemed to meet the investor’s eligibility criteria, and the investor will be assigned an Option Probability of 0%. | |
| ● | Using a software-based random number generator, Point will assign the Option based on the investor’s Option Probability of receiving it. |
For all other Options (“Ineligible Options”) Point will execute the following process:
| ● | If the Option has features or characteristics that an investor has declared they will not purchase under any circumstances, the investor will not be considered for the Option. For example, if an investor is unwilling to purchase Options with a 30-year term, that investor will not be presented or considered for any 30-year Options. | |
| ● | Once the pool of Eligible Investors for each Ineligible Option is determined, Point will consider the following factors in determining who will receive the Option: |
| ○ | Total capital commitment; | |
| ○ | Available capital; | |
| ○ | Options received to date relative to capital commitment; | |
| ○ | Credit attributes of Options already sold to each respective investor; | |
| ○ | Prior declinations or acceptances of similar Options; | |
| ○ | Eligibility criteria of each investor; | |
| ○ | Portfolio constraints of each investor; and | |
| ○ | Any other criteria that Point in its reasonable discretion may consider to ensure that no investor is subject to an inequitable distribution of Options. |
EXHIBIT H
[RESERVED.]
Exhibit 10.3
EXECUTION COPY
MASTER OPTION SERVICING
AGREEMENT
THIS MASTER OPTION SERVICING AGREEMENT (this “Agreement”) is made this 29th day of December, 2023, by and between POINT DIGITAL FINANCE, INC., a Delaware corporation (“Point”), as servicer (in such capacity, “Servicer”) and as trust manager (in such capacity, “Trust Manager”) of POINT TITLING TRUST, a Delaware statutory trust, as the titling trust (“PTT”), PTT, solely in its capacity as Owner (as defined below) hereunder, and GB HRP, LLC, a Delaware limited liability company (“Buyer Agent”).
This Agreement governs the servicing by Servicer of certain Options more particularly described herein.
RECITALS
A. Point, in its capacity as seller (in such capacity, “Seller”), PTT and Buyer Agent have entered into that certain Program Agreement dated as of the date hereof (the “Program Agreement”), which sets forth certain rights and obligations of the Parties with respect to purchases of Options under that certain Master Option Sale Agreement, dated as of the date hereof (the “Purchase Agreement”).
B. Pursuant to the Program Agreement and the Purchase Agreement, Seller will facilitate the purchase by, and assignment to, PTT (not in its individual capacity, but solely in its capacity as buyer of Options under Purchase Agreement, which purchases shall be made at the direction of Buyer Agent solely for allocation to the applicable Investor SUBIs; PTT in such capacity, “Owner,” and together with Buyer Agent, the “Buyer Parties”) of certain Options, which will then be recorded in the name of Owner and allocated to and held by the applicable Investor SUBIs, with each Option being evidenced, secured, and/or guaranteed by the Option Documents applicable thereto.
C. Point, as Depositor and as holder of the UTI under the Titling Trust Agreement, may from time to time cause Investor SUBIs to be issued pursuant to the applicable Investor SUBI Supplement and to be sold to an entity designated by Buyer Agent pursuant to the applicable Investor SUBI Transfer Agreement, each of which Investor SUBIs evidences a beneficial interest in the Options acquired by PTT and allocated to the applicable Investor SUBI pursuant to the applicable Investor SUBI Supplement. Point, as Trust Manager, will update the Option Schedule (as defined in the applicable Investor SUBI Supplement) with respect to each such allocation, pursuant to the terms of the applicable Investor SUBI Supplement.
D. Trust Manager will take direction from Buyer Agent with respect to Options to be purchased by PTT as Owner and allocated to the applicable Investor SUBI. All references herein to “Owner” shall mean and refer to PTT, solely in its capacity as a buyer of Options under the Purchase Agreement at the direction of Buyer Agent, for the benefit of the related Beneficial Interest Holders in the Investor SUBIs, and not PTT in its individual capacity.
E. Point is (or will be) Servicer of the Options.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and undertakings herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions; Acknowledgments Regarding Owner and Buyer Agent.
Section 1.1. Definitions. Capitalized terms that are not otherwise defined herein shall have the meanings ascribed to them in this Section 1.1, within the body of this Agreement, or, if not defined herein, in the Purchase Agreement or the Program Agreement, as applicable. Whenever the context of this Agreement references to the singular number shall include the plural, and the plural shall include the singular, where appropriate; words denoting gender shall be construed to include the masculine, feminine, and neuter where appropriate; and specific enumeration shall not exclude the general or plural, and shall be considered as cumulative.
“Account” has the meaning set forth in Section 3.2.1.
“Allowable Subordination” means subordinations to refinances of existing senior debts that do not increase the total indebtedness other than to (a) cover closing costs and (b) provide up to $250 of cash-out financing. For the avoidance of doubt, Allowable Subordinations do not include any decrease in lien position. Allowable Subordinations shall include only subordinations to new senior loans that change the rate and term of outstanding loans and lower the monthly payment of the senior debt.
“Applicable Law” has the meaning set forth in the Program Agreement.
“Asset Administration Fee” means, for any calendar month (and as calculated on the last day of such calendar month), an amount equal to (a) the product of (i) the aggregate outstanding Investment Amount of all Options serviced by Servicer under this Agreement during such calendar month, multiplied by (ii) the applicable Asset Administration Fee Rate for such calendar month.
“Asset Administration Fee Rate” means, for any calendar month, a rate of one and fifteen one hundredths percent (1.15%) per annum (i.e., 0.095833% per month); provided, however, that with respect to any Option serviced by Servicer that has been contributed to a Securitization Transaction, the applicable Asset Administration Fee Rate for such Option shall be one and twenty-five one hundredths percent (1.25%) per annum (i.e., 0.10417% per month).
“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. §§ 101 et. seq., as amended from time to time.
“Beneficial Interest Holder” shall have the meaning set forth in the Purchase Agreement.
“Business Day” shall have the meaning set forth in the Program Agreement.
“Buyer Agent Consent” means the written consent of Buyer Agent.
“Closing Date” shall have the meaning set forth in the Purchase Agreement.
“Depositor” shall mean Point, as depositor of PTT.
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“Disposition Fee Rate” means (a) with respect to any Option serviced by Servicer that has been contributed to a Securitization Transaction, ten percent (10.00%); and (b) with respect to any other Option serviced by Servicer hereunder, five percent (5.00%).
“Extraordinary Expenses” means reasonable out-of-pocket costs and expenses incurred by Servicer with respect to the Options serviced pursuant to this Agreement after their applicable Closing Date, including but not limited to reasonable legal expenses, costs of foreclosure, and other expenses incurred by Servicer in accordance with the terms hereof with respect to Options that have experienced an event of default or termination pursuant to the related Option Documents; provided, however, that the aggregate amount of Extraordinary Expenses included in the calculation of the Servicing Fee pursuant to Section 3.1.3 with respect to any individual Option shall not exceed the sum of $3,000 unless the Servicer has obtained Buyer Agent Consent for the amount of such excess.
“Funding Notice” has the meaning set forth in the Purchase Agreement.
“Hazard Insurance Policy” shall have the meaning set forth in the Purchase Agreement.
“Homeowner” has the meaning set forth in the Purchase Agreement.
“Homeowner Prepayment Event” means and shall be deemed to have occurred with respect to any Option for which the related Homeowner(s) has sold, refinanced or otherwise exited from the Option Agreement within nine (9) months from the related Closing Date.
“Impaired Option” means any Option serviced by Servicer hereunder for which the related Point Proceeds received in connection with the resolution of such Option are less than the applicable Investment Amount for such Option; provided, however, that no Option subject to a Homeowner Prepayment Event shall constitute an Impaired Option.
“Investment Amount” has the meaning set forth in the Purchase Agreement.
“Investor SUBI” has the meaning set forth in the Purchase Agreement.
“Investor SUBI Supplement” has the meaning set forth in the Purchase Agreement.
“Material Adverse Change” has the meaning set forth in the Program Agreement.
“Material Adverse Effect” has the meaning set forth in the Program Agreement.
“Maximum Amount” shall have the meaning set forth in the Program Agreement.
“OFAC” means the United States Office of Foreign Assets Controls, a part of the United States Department of the Treasury.
“OFAC Regulations” means all rules and regulations, including without limitation interpretations and published opinion letters related thereto, that are promulgated by OFAC from time to time.
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“OFAC Match” has the meaning set forth in Section 3.2.12.
“Option Agreement” has the meaning set forth in the Purchase Agreement.
“Option Documents” has the meaning set forth in the Purchase Agreement.
“Option Level Detail” has the meaning set forth in the Program Agreement.
“Option” or “Options” means all residential purchase options purchased by Owner under the Program Documents and which are to be serviced under this Agreement, together with any and all future Options designated from time to time by Buyer Agent, Depositor, Trust Manager, and/or Servicer for servicing pursuant to this Agreement.
“Option Transfer” means the sale or transfer by Owner, at the direction of Buyer Agent, of some or all of the Options.
“Ordinary Course Expenses” means reasonable out-of-pocket costs and expenses incurred by Servicer with respect to the Options serviced pursuant to this Agreement after their applicable Closing Date, including but not limited to UCC filings and other expenses reasonably incurred by Servicer in the ordinary course of performing its duties hereunder, and not to exceed $500 per Option, on a life-of-Option basis. Ordinary Course Expenses do not include the out-of-pocket cost of, for example, travel, meals, entertainment, accommodation, telephone/internet fees, postage, photocopying, permitting/licensing fees, taxes, withholdings, normal overhead incurred in Servicer’s business dealings, and Government Authority fees, fines, and penalties.
“Permitted Modification” means (a) any Allowable Subordination, or (b) any other amendment or modification of, or any waiver, release or forbearance in respect of, any Option or Option Document, provided that the same (i) does not result in a waiver of the Point Proceeds payable under such Option, (ii) does not adversely impair the rights and remedies of Owner under the Option Documents evidencing such Option, as determined by Servicer consistent with past practices, and (iii) is otherwise consistent with the Servicing Standard.
“Person” has the meaning set forth in the Program Agreement.
“Point Proceeds” has, with respect to any Option, the meaning set forth in the Option Agreement relating to such Option.
“Program Documents” has the meaning set forth in the Program Agreement.
“Property” has the meaning set forth in the Purchase Agreement.
“Purchase Agreement” has the meaning set forth in the Recitals hereto.
“Rating Agency” shall have the meaning set forth in the Purchase Agreement.
“Reconstitution” means the actions required by Section 18 in connection with a Securitization Transaction or Option Transfer.
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“Reconstitution Agreements” means the agreement or agreements entered into by Owner, at the direction of Buyer Agent, Servicer and/or certain third parties on the Reconstitution Date(s) with respect to any or all of the Options serviced hereunder, in connection with an Option Transfer or a Securitization Transaction as set forth in Section 18.
“Reconstitution Date” means the date or dates on which any or all of the Options serviced under this Agreement shall be removed from this Agreement and reconstituted as part of a Securitization Transaction or an Option Transfer pursuant to Section 18.
“Securitization Transaction” has the meaning set forth in the Purchase Agreement.
“Servicer Event of Default” has the meaning set forth in Section 19.2.
“Servicing Advance” has the meaning set forth in Section 7.3.
“Servicing Standard” has the meaning set forth in Section 3.2.5.
“Shared Impairment Amount” means, with respect to any Impaired Option that has been subject to a resolution, an amount equal to the product of (a) the Disposition Fee Rate for such Impaired Option, multiplied by (b) the amount by which the applicable Investment Amount for such Impaired Option exceeds the Point Proceeds received in connection with the resolution of such Impaired Option.
“SUBI Trustee” shall mean Wilmington Savings Fund Society, FSB.
“Termination Appraised Amount” means as of the date of any termination of this Agreement or removal of Servicer as the servicer of an Option pursuant to Section 19.1.4 or Section 19.1.5, an amount equal to seven and one-half percent (7.50%) of the result (solely to the extent such result yields a positive number) of (a) the applicable Point Proceeds that would be received in respect of such Option assuming a resolution as of the date of such termination or removal and a Property valuation equal to the applicable Termination Appraised Value, minus (b) the Purchase Price with respect to such Option.
“Termination Appraised Value” means, with respect to an Option related to any termination of this Agreement or removal of Servicer as the servicer of any Options pursuant to Section 19.1.4 or Section 19.1.5, the value of the Property related to such Option determined by the average of three (3) separate automated valuation models of such Property (the “AVM Average”) obtained (and paid for) by Buyer Agent; provided that, to the extent Servicer or Buyer Agent reasonably disputes such valuation, either Party may obtain upon notice to the other Party within five (5) Business Days of receiving the AVM Average, at such Party’s sole cost and expense, a broker price opinion with respect to such Property, and such broker price opinion shall be averaged with the AVM Average to calculate the value of such Property.
“Termination Disposition Amount” means, with respect to an Option related to any termination of this Agreement or removal of Servicer as the servicer of any Options pursuant to Section 19.1.4 or Section 19.1.5, an amount equal to seven and one-half percent (7.50%) of the result (solely to the extent such result yields a positive number) of (a) the Point Proceeds received in connection with the liquidation of such Option, minus (b) the Purchase Price with respect to such liquidated Option.
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“Termination Event” shall have the meaning set forth in the Program Agreement.
“Termination Fee” means, as of the date of any termination of this Agreement or removal of Servicer as the servicer of any Option pursuant to Section 19.1.4 or Section 19.1.5, an amount equal to the sum of (a) the sum of (i) all accrued Ordinary Course Expenses, Servicing Advances, Extraordinary Expenses, Servicing Transfer Costs and other amounts payable or reimbursable to Servicer hereunder with respect to such Option, including, without limitation, all fees and expenses payable to Initial Sub-servicer or any other subservicer or subcontractor appointed in accordance with this Agreement, plus (ii) an amount equal to the product of (A) five and seventy-five one hundredths percent (5.75%), multiplied by (B) the Investment Amount for such Option, multiplied by (iii) an amount equal to the Weighted-Average Portfolio Age divided by five (5), and (b) at the sole discretion of Buyer Agent, either (i) the Termination Appraised Amount related to such Option which shall be paid concurrently with the amounts paid as described in clause (a) or (ii) the Termination Disposition Amount related to such Option to be paid at the time of the related disposition and/or liquidation or other resolution of such Option.
“Termination Notice” has the meaning set forth in Section 19.2.8.
“Titling Trust Agreement” shall mean that certain Amended and Restated Trust Agreement, dated as of July 14, 2023, as modified, supplemented or amended from time to time, among the Depositor, the Trust Manager, and the UTI Trustee.
“Trust Manager” shall mean Point, as trust manager of PTT.
“UTI” shall have the meaning set forth in the Titling Trust Agreement.
“UTI Certificate” shall have the meaning set forth in the Titling Trust Agreement.
“UTI Trustee” shall mean Wilmington Savings Fund Society, FSB.
“Weighted-Average Portfolio Age” means the greater of (a) an amount equal to (i) five (5), minus (ii) the aggregate sum of the Weighted Yearly Option Age of all the Options for which Servicer is removed as servicer hereunder (excluding any Options which Buyer Agent is seeking a claim pursuant to Section 28) or (b) one (1).
“Weighted Yearly Option Age” means, with respect to any Option, an amount equal to (a) the product of (i) the number of years since the Closing Date for such Option, multiplied by (ii) the related Investment Amount of such Option, divided by (b) the current aggregate Investment Amount of all Options for which Servicer is removed as servicer hereunder.
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Section 1.2. Acknowledgments Regarding Owner and Buyer Agent. Notwithstanding anything to the contrary contained herein (a) each reference herein to “Owner” shall mean and refer to PTT, solely in its capacity as the owner of Options purchased from Seller pursuant to the Purchase Agreement, at the direction of Buyer Agent, for the benefit of the related Beneficial Interest Holders in the Investor SUBIs, and not PTT in its individual capacity, (b) all covenants, agreements, representations, warranties and obligations of Owner hereunder shall be deemed made, undertaken, performed and incurred, as the case may be, by PTT solely in its capacity as Owner hereunder and under the other Program Documents, at the direction of Buyer Agent for the benefit of, and as an obligation (as applicable) of, Buyer Agent and the related Beneficial Interest Holders, and not those of PTT in its individual capacity, or as a personal covenant, agreement, representation, warranty or obligation of PTT in its individual capacity, (c) under no circumstances shall PTT in its individual capacity be personally liable for the payment or performance of any indebtedness, costs or expenses of, or any covenants, agreements, representations, warranties or obligations of, Owner hereunder, and (d) unless otherwise expressly provided herein, all covenants, agreements, representations, warranties and obligations of Buyer Agent hereunder shall be deemed made, undertaken, performed and incurred, as the case may be, by Buyer Agent in its individual capacity and for the benefit of, and as an obligation (as applicable) of, the Beneficial Interest Holders in the Investor SUBIs (subject to the terms of the Investor SUBIs).
2. General Warranties and Representations.
2.1. Servicer represents and warrants to Buyer Agent and Owner that:
2.1.1. Servicer is a corporation duly organized and existing under the State of Delaware, and is duly qualified and in good standing in all states or other jurisdictions where so required by Applicable Law (whether due to the nature and extent of the business transacted by Servicer, its ownership of assets, or otherwise), except for those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect on Servicer’s financial condition, results of operation or business nor on the enforceability of the Options or its ability to act as Servicer hereunder.
2.1.2. The execution, delivery and performance of this Agreement and the transactions contemplated hereby are all within Servicer’s power, have been duly authorized and are not in contravention of law or the terms of its certificate of incorporation, by-laws, or other organizational documents, or any material indenture, agreement or undertaking to which Servicer is a party or by which Servicer or its property is bound.
2.1.3. Servicer possesses (and will continue to possess throughout the term of this Agreement) all licenses necessary to fulfill its obligations pursuant to this Agreement, including its activities with respect to the servicing in each state or other jurisdiction in which it originates Options, purchases Options or conducts any other activities, to the extent such license is required by law. Servicer shall maintain adequate and appropriate staffing and office locations necessary to carry out its responsibilities as Servicer, and shall promptly address any staffing and location matters, such as turnover of key staff, with the intent to minimize any adverse impact on Servicer’s performance under this Agreement. In performing its obligations hereunder, the Servicer shall act: (i) with professional due diligence, care, loyalty, and skill, in a first-class manner which reflects favorably at all times on (and does not directly or indirectly disparage) Buyer Parties (and its and their goodwill and reputations); and (ii) so as to avoid deceptive, misleading or unethical practices, or the making of false or misleading representations with regard to the Options or the performance of its obligations hereunder.
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2.1.4. The execution and delivery by Servicer of this Agreement, and consummation of the transactions contemplated herein and therein, will not, with or without giving of notice or passage of time, or both: (i) conflict with or violate any Applicable Law to which Servicer is subject or by which Servicer’s assets are bound or affected which violation would have a Material Adverse Effect on Servicer’s ability to perform its obligations under this Agreement; (ii) conflict with Servicer’s articles of incorporation or by-laws; (iii) violate any judgment, order, writ, or decree of any court or administrative body in any suit or proceeding to which Servicer is a party which violation would have a Material Adverse Effect on Servicer’s ability to perform its obligations under this Agreement; (iv) result in a breach of, or default under, any material agreement, commitment, contract, or other material instrument, to which Servicer is a party or by which any of Servicer’s assets are bound or affected; or (v) render Servicer insolvent or without sufficient working capital.
2.1.5. Servicer has the requisite legal capacity to (i) own its properties and to conduct its business as now conducted and as presently contemplated, and (ii) enter into and consummate the transactions contemplated by this Agreement, and this Agreement, when executed and delivered by the parties hereto, will constitute the valid and binding obligation of Servicer enforceable in accordance with its terms, except as the enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding or action in equity or at law).
2.1.6. There is no action, suit, inquiry, investigation or regulatory or other proceeding of any kind pending or, to Servicer’s actual knowledge, threatened against Servicer which, if determined adversely to Servicer, would have a Material Adverse Effect on Servicer’s ability to perform its obligations as Servicer hereunder.
2.2. Buyer Agent represents and warrants to Servicer that:
2.2.1. Buyer Agent is a trust, partnership, corporation or limited liability company, is duly organized and in good standing under the state of its organization, and is duly qualified and in good standing in all states or other jurisdictions where so required by Applicable Law (whether due to the nature and extent of the business transacted by Buyer Agent, its ownership of assets, or otherwise), except for those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect on the financial condition, results of operation or business of Buyer Agent or the Beneficial Interest Holders nor on the enforceability of the Options or its ability to act as Buyer Agent thereunder;
2.2.2. The execution, delivery and performance of this Agreement and the transactions contemplated hereby are all within Buyer Agent’s power, have been duly authorized and are not in contravention of law or the terms of its certificate of incorporation, by-laws, or other organizational documents, or any material indenture, agreement or undertaking to which Buyer Agent is a party or by which Buyer Agent or its property is bound.
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2.2.3. The execution and delivery by Buyer Agent of this Agreement, and consummation of the transactions contemplated herein and therein, will not, with or without giving of notice or passage of time, or both: (i) conflict with or violate any law, statute, rule, regulation, or administrative order to which Buyer Agent is subject or by which Buyer Agent’s assets are bound or affected which violation would have a Material Adverse Effect on Buyer Agent’s ability to perform its obligations under this Agreement; (ii) conflict with Buyer Agent’s articles of incorporation or by-laws; (iii) violate any judgment, order, writ, or decree of any court or administrative body in any suit or proceeding to which Buyer Agent is a party which violation would have a Material Adverse Effect on Buyer Agent’s ability to perform its obligations under this Agreement; (iv) result in a breach of, or default under, any material agreement, commitment, contract, or other material instrument, to which Buyer Agent is a party or by which any of Buyer Agent’s assets are bound or affected; or (v) render Buyer Agent insolvent or without sufficient working capital.
2.2.4. Buyer Agent has the requisite legal capacity to (i) own its properties and to conduct its business as now conducted and as presently contemplated, and (ii) enter into and consummate the transactions contemplated by this Agreement, and this Agreement, when executed and delivered by the parties hereto, will constitute the valid and binding obligation of Buyer Agent enforceable in accordance with its terms, except as the enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding or action in equity or at law).
3. Administration and Servicing of Options; Collection, Remittance and Accounting.
3.1. Servicing of Options; Subservicing; Servicing Fees.
3.1.1. Servicing. Buyer Agent and Owner hereby appoint Point to act as Servicer with respect to the Options, the Option Documents and the related rights and assets purchased by Owner under the Purchase Agreement, with the authority to service, administer and exercise rights and remedies in respect of such Options. Point hereby accepts such appointment and agrees to perform the duties and responsibilities of Servicer pursuant to the terms hereof.
3.1.2. Subservicing. Servicer has contracted with Servis One, Inc., d/b/a BSI Financial Services (the “Initial Sub-servicer”), and from time to time may contract with any other qualified person to perform all or any portion of Servicer’s servicing duties hereunder, in accordance with the provisions of Section 15. With respect to any future sub-servicer or subcontractor, (i) Servicer shall select such Person with reasonable care, (ii) the fees and expenses payable to the Initial Sub-servicer and any other sub-servicer or subcontractor shall be payable solely by Buyer Agent, in accordance with the terms of Section 3.1.3, (iii) Servicer shall not be relieved of, and shall remain liable for, the performance of the duties and obligations of Servicer pursuant to the terms hereof without regard to any subservicing or subcontracting arrangement, (iv) any such subcontract shall be terminable upon delivery of a Termination Notice by Buyer Agent to Servicer, and (v) notice of any such arrangement is promptly provided to Buyer Agent, together with a copy of the agreement governing such arrangement. Servicer shall not terminate its existing arrangement with Initial Sub-servicer with respect to the Options without Buyer Agent Consent; provided, however, that Buyer Agent Consent shall not be required to the extent (i) the termination of Initial Sub-servicer is the result of a material breach or default by Initial Sub-servicer under its subservicing arrangements with Servicer (which shall specifically include, without limitation, any incidents of fraud, theft or misappropriation of funds, or any occurrence of three (3) or more breaches of defaults within any twelve (12) month period), or (ii) any delay in such termination of Initial Sub-servicer could reasonably be expected to result in any impairment, waste or deterioration to, or any disruption in collections from, any Option or any collateral therefor.
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3.1.3. Fees and Penalties. As compensation for the performance of its duties under this Agreement, Buyer Agent shall pay to Servicer, monthly in arrears (but subject in all respects to the terms of this Section 3.1.3) upon Servicer’s submission of an invoice to Buyer Agent, as full compensation for all of its services performed hereunder, a servicing fee (the “Servicing Fee”) in an amount equal to:
| (a) | the applicable Asset Administration Fee for each month during which Servicer is servicing any Options under this Agreement, plus |
| (b) | as a disposition fee in connection with the resolution of any Option serviced by Servicer under this Agreement, (i) an amount equal to the product (solely to the extent such result yields a positive number) of (A) the Disposition Fee Rate, multiplied by (B) an amount equal to (1) the Point Proceeds received in connection with the resolution of such Option, minus (2) the Purchase Price with respect to such Option, minus (ii) an amount equal to any accrued Shared Impairment Amounts in respect of any prior resolutions of Impaired Options, with such Shared Impairment Amounts being applied as a dollar-for-dollar debit against disposition fees payable under this Section 3.1.3(b) until applied in full (but in no event shall the application of Shared Impairment Amounts for any calendar month be in an amount greater than the total disposition fees otherwise payable under this Section 3.1.3(b)); provided, that, in the event that any portion of a Shared Impairment Amount with respect to an Impaired Option shall remain outstanding for more than nine (9) calendar months (commencing with the calendar month immediately following the calendar month in which such amount first became due and payable hereunder with respect to the related Option), Servicer shall pay such remaining outstanding balance to Buyer Agent within thirty (30) days following receipt by Servicer of an invoice from Buyer Agent for such amount, plus |
| (c) | all Ordinary Course Expenses, Extraordinary Expenses, Servicing Advances, credit monitoring fees and other amounts payable or reimbursable to Servicer hereunder, including, without limitation, all fees and expenses payable to Initial Subservicer or any other subservicer or subcontractor appointed in accordance with this Agreement, plus |
| (d) | any pass-through fee paid by the Homeowner to compensate Servicer for processing the resolution that has already been remitted to Buyer Agent and/or the applicable Beneficial Interest Holders. |
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Penalties. Servicer shall pay Buyer Agent, monthly in arrears (but subject in all respects to the terms of this Section 3.1.3) and solely as a reduction to Servicing Fees otherwise payable hereunder, a penalty with respect to any Option subject to a Homeowner Prepayment Event (“Penalties”) in amount equal to (i) the Purchase Price for such Option, plus (ii) Asset Administration Fees incurred under this Agreement with respect to such Option, minus (iii) the Point Proceeds received in connection with such Option; provided, however, in the event the foregoing calculation yields an amount equal to or less than $0, no Penalty shall be payable with respect to such Option or the related Homeowner Prepayment Event; provided, that, in the event that any portion of a Penalty with respect to a Homeowner Prepayment Event shall remain outstanding for more than nine (9) calendar months (commencing with the calendar month immediately following the calendar month in which such amount first became due and payable hereunder with respect to the related Option), Servicer shall pay such remaining outstanding balance to Buyer Agent within thirty (30) days following receipt by Servicer of an invoice from Buyer Agent for such amount.
Servicing Fees shall commence to accrue on the date hereof and shall continue thereafter until the Date of Servicer Termination. Upon receipt of Servicer’s monthly invoice for Servicing Fees payable hereunder (which shall include both amounts incurred for the calendar month then ended and amounts accrued and unpaid for any prior period) and the Monthly Collections Report, so long as Buyer Agent has not objected to any calculation in accordance with Section 3.2.1, Buyer Agent shall remit to Servicer, within ten (10) Business Days following receipt of such monthly invoice and Monthly Collection Report, an amount equal to the lesser of (i) all accrued unpaid Servicing Fees reflected in such invoice or (ii) all Collections and other amounts received by Buyer Agent and the Beneficial Interest Holders in respect of Options serviced by Servicer hereunder through and including the calendar month then-ended (less Servicing Fees previously invoiced and paid from such amounts.) To the extent the accrued Servicing Fees payable as of the end of any calendar month exceed the aggregate amount of Collections and other amounts received by Buyer Agent and the Beneficial Interest Holders in respect of Options serviced hereunder through such date, the amount of such excess shall continue to accrue and shall be carried forward and payable on successive invoice dates until paid in accordance with the terms hereof. In addition to the foregoing, and except as otherwise provided in Section 18, immediately upon any termination of this Agreement or any other Program Document, any assignment, sale or other transfer by Owner of any Option (except to the extent the transferee becomes an Owner hereunder and under the other Program Documents) or any transfer of servicing with respect to any Option, all accrued unpaid Servicing Fees shall become due and payable in full.
Each Monthly Collections Report from Servicer shall include a summary of the aggregate accrued unpaid Servicing Fees as of the last day of the previous month, together with an itemized detailing of each component of the Servicing Fee accrued during the previous month. Buyer Agent may request an invoice or other supporting detail for any Extraordinary Expense or Ordinary Course Expense itemized in a Monthly Collections Report. In addition, Servicer shall be entitled to referral income earned from third parties in connection with facilitating a liquidation of a Property related to an Option.
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3.1.4. Except for, and subject to the prior payment in full of, the Servicing Fees as provided in Section 3.1.3, and for amounts Servicer is entitled to collect pursuant to Section 17, Buyer Agent, for the benefit of the Beneficial Interest Holders, shall be entitled to retain all other payments received in connection with each Option, and shall have no obligation to remit any other fees/costs to Servicer (without prejudice, however, to any amounts owed pursuant to indemnification provisions).
3.1.5. Subject to the terms of this Agreement (including, without limitation, Section 4), Servicer may waive, modify or vary any term of any Option or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Homeowner; provided, however, that Servicer shall not permit any modification with respect to any Option that would change the HEI Percentage, Option Consideration, Investment Amount, Exercise Payment, Appreciation Starting Value, Expiration Date, or Homeowner Protection Cap, in each case as defined in the related Option Agreement, make any future advances or extend the final expiration date with respect to such Option, or release any collateral for such Option, unless (1) the modification is strictly in accordance with the Servicing Standard, which may reasonably change from time to time upon notice to Buyer Agent, and (2) Servicer has obtained Buyer Agent Consent for such action. Such actions may include, but are not limited to, (a) waiving short term delinquencies on mortgage payments, property tax payments and insurance payments, (b) processing de minimis amendments to reflect new homeowners on title, and (c) accommodating estate planning efforts by consenting to properties being placed in a trust, provided that all trustees agree to be bound by the terms of the Option Agreement. Additionally, Servicer shall only permit or effect any Property Sale or Owner Option Repurchase (each as defined in the related Option Documents) to the extent permitted under the related Option Documents, unless otherwise approved by Buyer Agent Consent.
3.1.6. In connection with any notice, request, direction or other action to be taken under any Option Agreement or other Option Document relating to an Option, Servicer, or the sub-servicer on its behalf, will notify Buyer Agent (and Servicer, if notification is from a sub-servicer) promptly upon receipt or knowledge of any such notice, request, direction or other action. In connection with any action requested to be taken by Buyer Agent, or by Servicer or the sub-servicer on behalf of Owner, for the benefit of the Beneficial Interest Holders, Servicer and Buyer Agent agree to cooperate and act promptly to respond, notify and otherwise act (or to authorize and direct Owner to so respond, notify or otherwise act) with respect to the related Option, the Property and the Homeowner(s), as applicable, to fulfill the requirements of the related Option Agreement and other Option Documents; provided, that if Buyer Agent does not respond or provide direction to Servicer or sub-servicer, as applicable, within three (3) Business Days of receipt of the notice described in the immediately preceding sentence, then Servicer or sub-servicer, as applicable, shall not take action under the Option Agreement and other Option Documents on behalf of Owner relating to the actions requested to be taken by Buyer Agent, unless required by Applicable Law; provided further, that Servicer or sub-servicer, as applicable, shall be entitled to reimbursement of reasonable Servicing Advances in connection with any actions taken on behalf of Owner pursuant to this Section 3.1.6, Section 7.3 or Section 8; provided further, that neither Servicer nor the sub-servicer shall be liable for any costs, losses, claims, damages or other liabilities with respect to actions taken or not taken on behalf of Buyer Agent or Owner (including when Buyer Agent has failed to respond or provide direction with respect to actions to be taken under the related Option Agreement or other Option Document for an Option), except to the extent of any gross negligence or willful misconduct by Servicer or sub-servicer (unless otherwise subject to indemnification under Section 28(a)).
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3.2. Collection, Remittance and Accounting. Servicer shall, on behalf of Owner, for the benefit of the Beneficial Interest Holders, service, administer, collect and enforce the Options purchased by Owner pursuant to the Program Agreement and the Purchase Agreement in accordance in all material respects with the Servicing Standard, subject to any more specific provisions in this Agreement and/or any written directions from Buyer Agent (to the extent such further written directions do not materially modify the scope of the Servicing Standard or the obligations of Servicer hereunder, unless approved in writing by Servicer). Until the Point Proceeds relating to each Option serviced hereunder are paid in full, or as otherwise directed by Buyer Agent in writing, Servicer shall with regard to such Option be responsible for:
(i) monitoring and posting of all payments of Collections and other proceeds relating to the Options, investigating and enforcing delinquencies and defaults on the Options, communicating with and responding to inquiries from Homeowners thereunder, and accounting for Collections on and performance of the Options;
(ii) maintaining complete and accurate records necessary to perform the foregoing duties and to determine the status of each Option;
(iii) identifying each Option in its books and records as owned by Owner until such Option has been exercised, repurchased by the applicable Homeowner, expires, or is otherwise repurchased or charged off;
(iv) providing the Monthly Collections Report to Buyer Agent in accordance with Section 3.2.1 hereof;
(v) causing the Collections on the Options to be remitted to the applicable Account(s) in accordance with Section 3.2.1 hereof;
(vi) upon request by Buyer Agent, furnishing Buyer Agent with reasonable evidence acceptable to Buyer Agent of all expenditures for taxes, assessments and other public charges, property insurance premiums, Ordinary Course Expenses and Extraordinary Expenses (pursuant to this Agreement), and any other charges or payments made in connection with each Option;
(vii) proceeding diligently to demand, collect and receive from the Homeowners all payments due under the terms of the Option as they become due, to the extent applicable, including Preservation Payments (as defined in the Option Documents);
(viii) providing customary and reasonable customer-care services, such as a toll free number and online chatting capability, reasonably staffed by trained, knowledgeable Persons during normal business hours on Business Days, to address Homeowner inquiries;
(ix) responding to inquiries by any Government Authority;
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(x) to do or cause to be done any and all things in connection with such servicing and administration which Servicer may deem necessary or desirable and consistent with the terms of this Agreement; and
(xi) perform such other duties reasonably requested of Servicer by Buyer Agent.
3.2.1. Buyer Agent shall cause each Beneficial Interest Holder to establish and maintain an account in its name with a bank acceptable to Buyer Agent for receipt from Initial Sub-servicer (or any successor sub-servicer) of all Collections on Options (including, without limitation, Point Proceeds, Liquidation Proceeds, Insurance Proceeds and Condemnation Proceeds) acquired during the Term of the Program Agreement (the “Account” or, if more than one, the “Accounts”). In the event Servicer (or any of its Affiliates) receives funds on behalf of the Options directly or from Initial Sub-servicer or a Homeowner, Servicer (or such Affiliate) shall hold such funds in trust for Owner, for the benefit of the Beneficial Interest Holders, and shall promptly deposit such Collections in the Account or Accounts, as applicable, to be applied only in accordance with this Agreement. For the avoidance of doubt, any funds received in connection with the liquidation or exercise of any Option will be deposited in the Account or Accounts no later than three (3) Business Days immediately following the day on which funds were received by the Initial Sub-servicer or its replacement (if applicable) in accordance with the applicable sub-servicing agreement. Other than by making such deposits, Servicer shall not deposit any other funds into the Account or Accounts without Buyer Agent Consent. Servicer shall not commingle its funds with any funds earmarked for an Account hereunder. If so specified by Buyer Agent, Servicer shall, and shall cause the Sub-servicer to, deposit funds from certain Options to a certain Account, and funds from other Options to other Account(s), with no commingling thereof. No later than on the tenth (10th) Business Day of each calendar month, Servicer shall deliver to Buyer Agent a report of all Collections that have been deposited into the Account or Accounts during the previous calendar month and a calculation of all Servicing Fees owed to Servicer hereunder (the “Monthly Collections Report”). Buyer Agent shall have a period of five (5) Business Days to review the Monthly Collections Report and to deliver any objections to Servicer.
3.2.2. In connection with its activities as Servicer hereunder, Servicer shall:
| (i) | Instruct Initial Sub-servicer (or any successor sub-servicer) to remit by wire transfer to the Account or Accounts all Collections, net of any fees due Initial Sub-servicer (or such successor sub-servicer), due under the Option. Each remittance shall be in immediately available funds. |
| (ii) | Include in each Monthly Collections Report an accounting of the amounts transmitted to the Accounts. |
| (iii) | Provide to Buyer Agent reporting pursuant to Article 4 of the Program Agreement. Servicer’s servicing and collection files relating to the Options shall be in a form that can be promptly transferred to any Successor Servicer. |
| (iv) | Upon Servicer gaining knowledge of any claims, liens, or litigations affecting any Property or Homeowner, promptly (and in any event within five (5) Business Days) notify Buyer Agent in writing of any such claim, lien, or litigation and cooperate with Buyer Agent in the resolution thereof. |
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| (v) | Receive, hold and disburse any amounts deposited with Servicer to be held by Servicer and disbursed or applied in payment of expenses or otherwise for specified purposes pursuant to and in accordance with the Option Documents. |
3.2.3. Insurance.
(i) Servicer shall, at Servicer’s expense, obtain and keep in force at all times during the Term (except as otherwise provided in subclauses (c) or (d) below) a policy of: (a) Comprehensive General Liability Insurance providing for a minimum combined single limit liability of $1,000,000 per occurrence and $2,000,000 aggregate for injury and/or death and/or property coverage; (b) Workers’ Compensation, Automobile, and Employers’ Liability insurance, as well as other employment-related insurance, as may be required by Applicable Law and/or Servicer’s business operations, in such amounts as are required by Applicable Law, with a limit of no less than $1,000,000 per accident for bodily injury and property damage; (c) “Errors and Omissions” insurance protecting and insuring against errors and omissions of Servicer Employees, providing for a minimum combined single limit liability of $4,000,000 per occurrence and $4,000,000 aggregate, and (d) Cyber Liability insurance providing for a minimum combined single limit liability of $2,000,000 per occurrence and $2,000,000 aggregate covering claims involving privacy violations, information theft, damage to or destruction of electronic information, intentional and/or unintentional release of private information, alteration of electronic information, extortion and network security. This provision does not prohibit the Servicer from procuring additional policies or coverages.
(ii) All policies of insurance shall be with insurance companies licensed or authorized to do business in California, with a minimum rating of A or better in the Best’s Insurance Guide and an S&P rating of at least A+V (or a higher rating if reasonably required by Buyer Agent), and shall have attached thereto an endorsement that such policy shall not be cancelled or materially changed without at least thirty (30) days’ prior written notice to Buyer Agent. All insurance policies hereunder shall (A) list Owner as an additional insured; (B) be primary to any policies procured by Owner; and (C) contain a standard waiver of subrogation endorsement.
(iii) Within five (5) Business Days of the Execution Date, Servicer shall deliver Buyer Agent certificates of insurance with respect to all policies procured hereunder. Servicer shall deliver additional certificates of insurance (showing the procurement of replacement policies or renewal of existing policies) no less than thirty (30) days prior to the expiration or termination of any policy.
(iv) No provision hereof requiring insurance shall diminish or relieve Servicer from its duties and obligations set forth in this Agreement.
3.2.4. Employees. Servicer shall be solely responsible for hiring, supervising, directing the work of, promoting, discharging, training, and determining the compensation of all Servicer employees providing Services hereunder. The salaries, bonuses, compensation, and benefits of all personnel shall be usual, customary, and reasonable in light of the Servicing Standard. Servicer warrants and represents that each of its employees that may perform tasks in connection with the servicing of the Options underwent a reasonable background investigation in connection with their employment by Servicer.
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3.2.5. Servicer shall service and administer each Option consistent with (i) those servicing practices of institutions of similar (or greater) size and financial scope which service real estate-related financial products comparable to such Option in the jurisdiction where the related Property is located, (ii) the same degree of care and diligence in servicing, collecting and reporting that is exercised by it with respect to all similarly situated options owned by it, (iii) Applicable Law, including federal and state legal and regulatory requirements, (iv) the terms of this Agreement and (v) the terms of the related Option Documents (collectively, the “Servicing Standard”).
3.2.6. In addition, and not by way of limitation of the foregoing, Servicer confirms it will use commercially reasonable efforts to ensure that Servicer, its personnel, any sub-servicers (including, without limitation, Initial Sub-servicer) and any agents retained by Servicer or any sub-servicers (including, without limitation, Initial Sub-servicer), including, but not limited to, law firms and attorneys, are in compliance with those state and local, and any other Applicable Law in connection with any foreclosures and other actions taken with respect to foreclosed properties or tenants of such properties on behalf of Owner in all material respects. If Servicer fails to comply with the foregoing it shall indemnify and hold harmless Owner, Custodian, Buyer Agent, and their respective Affiliates, shareholders, directors, officers, and employees from any losses or liability attributable to such non-compliance.
3.2.7. Buyer Agent shall refund to Servicer, within ten (10) Business Days after demand (or such shorter period of time as may be required by Applicable Law, by order of a court of competent jurisdiction, or by the terms of the Option Documents), any amount with respect to an Option distributed to the Beneficial Interest Holders, in the event that Owner or Servicer is required by Applicable Law, by order of a court of competent jurisdiction, or by the terms of the Option Documents, to return to the payor or any other Person, such refund to include (but only in the event the return of any such funds is not required as a result of the negligent acts or omissions of Servicer or breach of this Agreement by Servicer) any interest or penalty which Owner or Servicer may be required to pay with respect thereto, but only up to the amounts remitted to the Beneficial Interest Holders, with respect to such Option(s).
3.2.8. Servicer agrees that it shall have no right of setoff or banker’s lien against, and, except as specifically permitted by the Program Documents, no right to otherwise deduct or withdraw from, any funds held in any Accounts.
3.2.9. Servicer agrees that it shall monitor the Options that have been purchased by Owner under the Program Agreement and the Purchase Agreement.
3.2.10. Servicer shall forward to the Custodian original documents evidencing any assumption, modification, consolidation or extension of any Option entered into after the related Closing Date within thirty (30) days of Servicer’s receipt of an executed copy of such document. Servicer shall only record agreements evidencing any such assumption, modification, consolidation or extension to the extent required to maintain the lien of the applicable Option or if requested in writing by Buyer Agent.
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3.2.11. Servicer shall maintain an internal quality control program that reviews, on a regular basis, its and its vendors and default firms’ compliance with and conformity to all Applicable Law (including all applicable regulations, rules, directives and published guidance of the CFPB, as such may be amended, modified or supplemented from time to time) to which Servicer or the Options are subject. The program shall include evaluating and monitoring the overall quality of Servicer’s servicing and origination activities, including collection call programs, in accordance with industry standards and the Servicing Standard. From and after the implementation of such quality control program, Servicer shall track any material issues that emerge from the quality control reviews of itself and its vendors and default firms and promptly notify Buyer Agent of any potential material issues on a monthly basis and cause such potential material issues to be timely addressed and remediated. Servicer shall provide Buyer Agent with notice of any material modifications to the quality control program as promptly as possible and in any event not later than within one month following the implementation of such modification (which notification requirement may be satisfied by Servicer identifying such modifications during the monthly telephone status conference between Buyer Agent and Servicer), in which case Buyer Agent shall have the option to perform a due diligence review of the revised quality control program on reasonable notice to Servicer.
3.2.12. From time to time, no less than quarterly, Servicer shall conduct, or cause to be conducted, a comprehensive OFAC review of any or all Options and REO Properties to ensure full compliance with OFAC Regulations. To the extent that Servicer determines that an Option or REO Property matches OFAC’s listing of “Specially Designated Nationals” or “Blocked Persons” using the lists updated from time to time on OFAC’s website (an “OFAC Match”), Servicer shall notify Buyer Agent of any Option presenting the OFAC Match within ten (10) Business Days of the Initial Sub-Servicer’s notice to Servicer of such OFAC Match.
4. Limitation on Servicer’s Authority.
4.1. Subject to the terms of this Agreement, Servicer will not be permitted to take any of the following actions unless and until it has notified Buyer Agent thereof in writing, provided to Buyer Agent all reasonably and specifically requested information with respect thereto, and obtained Buyer Agent Consent with respect thereto:
4.1.1. except as expressly set forth herein, make or consent to any written change of the Option or Option Documents or any waiver of any provision therein, other than Permitted Modifications or pursuant to policies mutually agreed upon between Buyer Agent and Servicer;
4.1.2. initiate, either directly or indirectly, foreclosure or workout proceedings against or with any Homeowner;
4.1.3. make or consent to any written release, substitution or exchange of any collateral or security encumbered or granted by the Option Documents, except (a) to the extent such release, substitution or exchange is expressly permitted under the terms of the Option Documents, (b) with respect to Allowable Subordinations in a manner as mutually agreed upon by Buyer Agent and Servicer, (c) to the extent the same constitutes a Permitted Modification, or (d) with respect to a waiver of up to a $500 shortage of Point Proceeds per Option, solely due to delays in wiring funds from multi-party transactions, resulting in a shortfall in the per diem amount;
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4.1.4. waive or consent to waive in writing any monetary claim against any Homeowner, except with respect to a waiver permitted by Section 4.1.3;
4.1.5. deliver or otherwise authorize the delivery of a written release of any claim under a Title Insurance Policy insuring the validity and priority of the Option Documents;
4.1.6. consent to or make Insurance Proceeds or Condemnation Proceeds available for restoration of any Property, unless expressly permitted in the Option Documents;
4.1.7. approve, accept or consent in writing to any cancellation or termination of the Option Documents, except to the extent that such approval, acceptance or consent is expressly permitted by the Option Documents;
4.1.8. cure any senior obligation;
4.1.9. approve any proposed third party transfer of any Property unless such approval is expressly permitted by the Option Documents; or
4.1.10. release, compromise or settle any claim against any Homeowner.
5. Insurance Proceeds and Condemnation Proceeds.
5.1.1. Servicer shall receive, hold and disburse, or at either (a) its election with Buyer Agent Consent or (b) Buyer Agent’s written request, establish with a reliable escrow agent (which may include a sub-servicer, a national title insurance company or title agency authorized to underwrite and/or issue title insurance policies and/or act on behalf of a national title insurance company) an escrow account or arrangement to receive, hold and disburse, pursuant to the terms of the Option Documents, any proceeds of fire, hazard or other insurance covering the Property; provided, however, that if Buyer Agent agrees (in a writing) to permit such proceeds to be made available to Homeowner for repairs, rebuilding or restoration not required pursuant to the Option Documents, or if such proceeds are required to be made so available pursuant to the Option Documents, then such proceeds shall be so disbursed.
5.1.2. Servicer shall receive, hold and disburse, or at either (a) its election with Buyer Agent Consent or (b) Buyer Agent’s written request, establish with a reliable escrow agent (as described above), an escrow to receive, hold and disburse, pursuant to the terms of the Option Documents, any award received as a result of any proceeding involving the condemnation of all or part of the Property; provided, however, that if Buyer Agent agrees that such award shall be made available to the Homeowner for repairs, rebuilding or restoration not required pursuant to the Option Documents, or if such award is required to be made so available pursuant to the Option Documents, then such award shall be so disbursed.
6. Transfer of Property. Except with Buyer Agent’s prior, written consent, Servicer shall not consent to any transfer or release of the Property by a Homeowner if such transfer, release, encumbrance or subsequent financing would be a violation of any restrictions or covenants imposed upon the Homeowner in the Option Documents, except to the extent such transfer or release is expressly permitted by the Option Documents. All requests for consent to a transfer shall be submitted by Servicer to Buyer Agent in writing, together with appropriate financial information for Buyer Agent to make a decision in regard to the transfer. Nothing herein shall prohibit Servicer from charging Homeowner a reasonable fee for processing Homeowner’s request.
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7. Homeowner’s Failure to Perform and Other Notices.
7.1. If any Homeowner fails to make a payment required to be made under the terms of an Option (including protective advances made by Servicer, and invoiced to Homeowner, as a Servicing Advance to preserve and protect the applicable Property) for thirty (30) days following the due date of such payment, Servicer will notify Buyer Agent of such fact within its normal notification procedures. Servicer shall use reasonable diligence to ascertain, and will notify Buyer Agent of, the failure of any Homeowner to perform any other obligation under the applicable Option. Without limiting the forgoing, Servicer shall notify Buyer Agent of any of the following events of which Servicer has received actual notice:
7.1.1. A vacating or abandonment of any Property;
7.1.2. The sale or transfer of any Property;
7.1.3. The death, bankruptcy, insolvency or other disability of any Homeowner;
7.1.4. Any liquidation or dissolution, expiration or revocation of any corporate Homeowner or dissolution, partition, termination or expiration of any Homeowner which is a partnership, limited liability company, business association or trust;
7.1.5. Any material loss or material damage to any Property;
7.1.6. Any actual or pending public taking of the Property by eminent domain or condemnation or any taking in lieu thereof;
7.1.7. Any material lack of repair or any other material deterioration or waste in respect to the Property;
7.1.8. Any Hazardous Substance which is located or stored on the Property in violation of Applicable Law or the Option Documents;
7.1.9. Any event or circumstance which would constitute a breach of a representation or warranty made by Seller under the Purchase Agreement; and
7.1.10. Any act or failure to act by a Homeowner or any other Person which would constitute an event of default under the relevant Option Documents, with or without the passage of time (an “Option Agreement Default”).
7.2. Servicer shall promptly provide notices of any Option Agreement Default or any other notices to Homeowner as required in the Option Documents.
7.3. In the event of an Option Agreement Default, Buyer Agent and/or the Beneficial Interest Holders may make an advance as is necessary and prudent to protect Owner’s interest in the Option and/or the Property. Servicer, with Buyer Agent Consent, also may advance its own funds (any such advance, a “Servicing Advance”) to reasonably protect the security of the Option and or Property, including advances to cure senior liens, property insurance, property taxes, foreclosure expenses, repair, advertising, litigation expenses and similar items. Buyer Agent shall reimburse to Servicer all such Servicing Advances approved by Buyer Agent pursuant to Section 3.1.3.
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7.4. In the event that any Option is subject to an Option Agreement Default solely as a result of a failure by the applicable Homeowner(s) to maintain the required Hazard Insurance Policy with respect to the related Property, and provided that such Property is either (a) in a first lien position or (b) is located in an area identified by any Governmental Authority as having special flood hazards, and flood insurance is available, Servicer will work through its Sub-Servicer to force place a compliant Hazard Insurance Policy with respect to such Property. Buyer Agent approves all reasonable costs and expenses incurred by Servicer or its Sub-Servicer in connection with any such force placed Hazard Insurance Policy as an Extraordinary Expense hereunder. Seller will provide a summary of all such Extraordinary Expenses incurred in connection with force placed Hazard Insurance Policies pursuant to the Monthly Collection Report. The Option Agreement Default notice requirements of Sections 7.1 and 7.2 do not apply with respect to any Option Agreement Default resulting solely from a failure of the applicable Homeowner(s) to maintain the required Hazard Insurance Policy with respect to the related Property, provided that Servicer shall have force placed a compliant Hazard Insurance Policy with respect to the related Property in accordance with this Section 7.4.
8. Foreclosure or other Acquisition of Property.
8.1. Pre-Foreclosure Actions. Servicer shall, consistent with the Servicing Standard and subject to the consent and consultation of Buyer Agent, initiate, pursue and manage foreclosure proceedings and any and all other enforcement remedies which may be brought by Servicer on behalf of Owner against any Homeowner in default under the terms of the Option Documents. Servicer shall, upon request and at the direction of Buyer Agent, institute any enforcement actions or proceedings against the Homeowner, either directly or in the name of Owner. Servicer shall contract for, and pay all reasonable, customary, and necessary costs and expenses for appraisals, environmental audits, management companies, inspections, title examinations and similar services required or otherwise obtained in connection with any such exercise of remedies under the Option Documents as directed by Buyer Agent, which costs and expenses shall be reimbursed to Servicer as a Servicing Advance. Once Servicer shall have initiated the enforcement of any of their rights and remedies under the terms of the Option Documents against a Homeowner, Servicer shall not, without first obtaining Buyer Agent Consent, (i) communicate with such Homeowner as to make any oral or written promises, representations, or covenants to such Homeowner who is in default respecting the legal proceedings related to the default or (ii) accept any payments or other monies with respect to such Option unless such payments are permitted pursuant to the Option Documents or required to be accepted pursuant to Applicable Law.
8.2. Post-Foreclosure Actions. If title to a Property is acquired by Owner, for the benefit of the Beneficial Interest Holders (or designees or nominees thereof), Servicer shall reasonably manage, operate and attend to the day-to-day operations of the Property (including, without limitation, the payment of all customary and reasonable expenses necessary for the management and operation thereof, which expenses shall be reimbursed to Servicer as a Servicing Advance) in accordance with the Servicing Standard and for a reasonable, market, special servicing fee agreed upon by the Parties, in addition to any Servicing Fees due under this Agreement.
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8.3. Expenses. If Servicer, subject to the consent and consultation of Buyer Agent, takes any enforcement action against Homeowner under the Option Documents, Buyer Agent shall be responsible for all reasonable and customary costs and expenses incurred by Owner or Servicer in connection with the exercise and enforcement of all remedies under the Option Documents.
8.4. Cure of Option Agreement Default. Notwithstanding anything to the contrary contained herein or in the other Program Documents, in the event of an Option Agreement Default with respect to any Option where the Homeowner cures the applicable Option Agreement Default prior to liquidation of the Option or sale of the Property, Buyer Agent authorizes and directs Owner to rescind any foreclosure or other remedy initiated by Owner (whether pursued by or at the direction of Buyer Agent) and authorizes Servicer and the Initial Sub-servicer to not proceed with such foreclosure proceeding, if applicable.
9. Records Maintenance. Servicer shall keep such records pertaining to each Option serviced hereunder as may be reasonably satisfactory to Buyer Agent, and upon request or upon termination of this Agreement, Servicer shall deliver copies thereof to Buyer Agent or its designee; provided, however, that Servicer may retain copies of all such records solely for the purpose of addressing any subsequent questions or disputes regarding those Options, but for no other purpose.
10. Other Servicer Duties. Until such time as the Point Proceeds relating to each Option are paid in full, Servicer shall perform such other customary duties, furnish such customary reports and execute such other customary documents in connection with its duties hereunder as Buyer Agent, from time to time, may reasonably require.
11. Strict Compliance. Except as otherwise stated in this Agreement, Servicer is not authorized or empowered to waive or vary the terms of any provision of any of the Option Documents and shall not, at any time, waive or consent to a postponement of strict compliance on the part of the Homeowner with any term, provision, covenant of the Homeowner contained in any of the Option Documents, without Buyer Agent Consent.
12. Reliance Upon Counsel. Servicer may retain and consult with legal counsel selected by Servicer in connection with any material questions or issues which may arise in connection with the rights or remedies under or with respect to an Option or Option Documents, and/or to prosecute any exercise or enforcement of any of the rights and remedies under the Option Documents and any legal proceedings or actions with respect to the Option Documents; provided, however, that Servicer shall promptly notify Buyer Agent of the retention of any such counsel and any fees incurred in connection therewith must be reasonable and customary (and limited to actual out of pocket costs). Servicer shall be entitled to follow, and shall not be liable for following (to the extent the advice is not defective on its face), the advice of any such counsel unless the action contemplated thereby requires Buyer Agent Consent and Servicer shall not have obtained Buyer Agent Consent. Without limitation of the foregoing, Servicer shall not be required to take any enforcement action directed by Buyer Agent with respect to any Homeowner to the extent Servicer, in reliance on the advice of counsel, determines that such action (a) would materially violate Applicable Law or (b) would subject Servicer to material liability.
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13. Authorized Actions of Servicer.
13.1. Notwithstanding anything contained in this Agreement to the contrary, Buyer Agent, on its own behalf and on behalf of the Beneficial Interest Holders, hereby authorizes Servicer to do and take the following actions in relation to the Option and the Option Documents, all without prior notice to Buyer Agent and without obtaining prior Buyer Agent Consent:
13.1.1. Servicer is hereby authorized to execute, on behalf of Owner, any and all Option Documents, organizational documents, payoff statements, closing statements, certificates, requisitions, and authorizations in connection with the Option Documents, and such other documents and instruments as may be necessary, desirable, appropriate, requested or required by any Person in connection with the foregoing or otherwise required in order to consummate the transaction contemplated in the Option Documents, and all escrow instructions, payoff demands, disbursement instructions, reconveyances, or any other documents deemed reasonably necessary by Servicer in connection with the performance of its obligations under this Agreement, except to the extent specifically restricted from doing so pursuant to this Agreement.
13.1.2. Subject to the specific restrictions on the actions of Servicer set forth herein, any manager or any officer on behalf of Servicer is hereby authorized, directed and empowered, on behalf of Servicer, as servicer for Owner, to (i) enter into, execute, acknowledge and deliver the Option Documents or any other documents contemplated by this Agreement, (ii) take such actions as shall be necessary, convenient, desirable or appropriate to perform the obligations of Servicer, as servicer for Owner, under the Option Documents or any other documents contemplated by this Agreement, and (iii) take such further actions as shall reasonably be necessary, proper or advisable in order to fully carry out the intent and accomplish the purposes of the this Agreement.
13.2. Any and all costs associated with (a) the actions described in Section 13.1.1 including, but not limited to, any notary costs or recording fees, (b) Ordinary Course Expenses and (c) other reasonable and customary pass-through fees from the Initial Sub-servicer or any other sub-servicer or subcontractor in connection with the servicing of the Options, shall be borne by Buyer Agent and the Beneficial Interest Holders, and Servicer is hereby authorized to pass on any such costs incurred by Servicer to Buyer Agent and the Beneficial Interest Holders (all of which shall constitute Servicing Fees payable to Servicer in accordance with the terms hereof).
14. Financial Statements.
14.1. Servicer shall deliver to Buyer Agent, on or before March 31st of each year (or if such day is not a Business Day, the following Business Day), beginning March 31, 2022, an officer’s certificate stating that (a) a review of the activities of Servicer during the preceding calendar year and of Servicer’s performance under this Agreement has been made under such officer’s supervision and (b) to the best of such officer’s knowledge, based on such review, Servicer has fulfilled its obligations under this Agreement throughout such calendar year in all material respects, or, if there has been such a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof and the action being taken by Servicer to cure such default.
14.2. Servicer, at its expense, shall, within one-hundred twenty (120) days of the end of each fiscal year of Servicer, cause a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to furnish a statement to Buyer Agent to the effect that such firm has examined certain documents and records for the preceding fiscal year (or during the period from the date of commencement of Servicer’s duties hereunder until the end of such preceding fiscal year in the case of the first such certificate). If pursuant to generally accepted accounting principles or accepted mortgage industry practice, material changes to the requirements of this Section 14.2 become necessary or desirable in the reasonable good faith judgment of Servicer, the parties agree to negotiate in good faith to modify the requirements of this Section 14.2.
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15. Sub-Servicing of Options. Subject to and in accordance with (i) Section 3.1.2 of this Agreement and (ii) the Purchase Agreement, Servicer shall have the right to engage in contracts for the sub-servicing and document custody of any or all of the Options pursuant to sub-servicing and/or custodial agreements in form and substance acceptable to Servicer using commercially reasonable judgment and entered into in good faith, which sub-servicing and/or custodial agreements shall enable Servicer to comply with all of Servicer’s duties and obligations hereunder with respect to the Options which are subject to such sub-servicing agreement and/or custodial agreement; provided, that, such sub-servicing or custodial agreements shall provide for the payment of market-standard fees and expenses by Servicer (all of which fees and expenses shall be reimbursed to Servicer by Buyer Agent and the Beneficial Interest Holders as Servicing Fees in accordance with the terms hereof). Servicer shall not enter into any sub-servicing agreement or custodial agreement which shall conflict with or prevent Servicer from complying with the terms of any Program Document with respect to an Option. Servicer shall enforce all material obligations of the sub-servicers under their respective agreements and shall remain fully liable under this Servicing Agreement for the performance of all of its duties, responsibilities, and actions hereunder, notwithstanding any agreements Servicer may have directly or indirectly with any sub-servicer. Buyer Agent shall reimburse to Servicer any fees and expenses paid by Servicer to a sub-servicer or document custodian engaged by Servicer to perform services with respect to the Options; provided, that with respect to engagement of such party by Servicer, Owner’s Consent will be required. Notwithstanding the foregoing, (i) Servicer agrees that it shall not engage any sub-servicer with respect to the Options if (a) any of the events described in Section 19.2 has occurred with respect to such sub-servicer or (b) any event described in the definition of Regulatory Trigger Event has occurred with respect to such sub-servicer (or is reasonably likely to occur if the engagement is undertaken), and, upon the occurrence of any event described in clause (a) or (b) of this sentence with respect to a previously engaged sub-servicer, Servicer agrees that it shall, upon the request of Buyer Agent, terminate its agreement with such sub-servicer immediately, and (ii) Buyer Agent shall be permitted to terminate any sub-servicing agreement with respect to the Options at any time in its sole discretion. Notwithstanding anything to the contrary contained in this Section 15, Buyer Agent hereby (i) acknowledges that it has received and reviewed the existing sub-servicing agreement between Servicer and Initial Sub-servicer dated as of April 24, 2023, as amended from time to time, and (ii) approves of such sub-servicing agreement, the appointment of Initial Sub-servicer pursuant thereto and all fees and expenses payable to Initial Sub-servicer thereunder.
16. [Reserved].
17. Servicing Charges. Servicer is entitled to charge to and collect from Homeowners third-party fees and expenses incurred in connection with servicing requests from Homeowners, according to a schedule of fees and expenses included in the relevant Option Documents. All such third-party fees and expenses collected by Servicer from Homeowners shall be retained and held for Servicer’s own account, if such fees were paid by Servicer, or used to repay such third-party.
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18. Option Transfers and Securitization Transactions.
18.1. Buyer Agent and Servicer agree that with respect to some or all of the Options, Owner, at the direction of Buyer Agent, may effect Option Transfers or Securitization Transactions and may, if agreed to by Servicer, retain Servicer as Servicer or subservicer thereof. Servicer’s agreement to such retention in connection with any Option Transfer or Securitization Transaction shall not be unreasonably conditioned, withheld or delayed, provided that the terms of such retention do not materially and adversely modify any of Servicer’s rights or interests hereunder, expand Servicer’s obligations hereunder or otherwise conflict with any of the terms of this Section 18. Buyer Agent shall provide the Servicer no less than sixty (60) days’ notice in the event it intends to effect an Option Transfer or Securitization Transaction. In connection therewith, Buyer Agent shall provide Servicer with a draft Reconstitution Agreement not less than thirty (30) days prior to the proposed Reconstitution Date, which Reconstitution Agreement shall be on a commercially reasonable terms and shall be in form and substance acceptable to Servicer in Servicer’s reasonable discretion. On the Reconstitution Date, the Options transferred shall cease to be serviced under this Agreement; provided, however, that, in the event that any Option transferred pursuant to this Section 18 is rejected by the transferee or is repurchased by Owner, at the direction of Buyer Agent, Servicer shall continue to service such rejected or repurchased Option in accordance with the terms and provisions of this Agreement. Servicer shall cooperate with Buyer Agent in connection with Option Transfers or Securitization Transactions in accordance with this Section 18. In connection therewith, Servicer shall:
18.1.1. make all representations and warranties with respect to Servicer itself contained in Section 2.1 as of each Reconstitution Date;
18.1.2. solely with respect to a Securitization Transaction, to the extent provided for in a Reconstitution Agreement, with respect to any Options that are subject to a Securitization Transaction in which the filing of a Sarbanes Oxley certification directly with the Securities and Exchange Commission is required, by March 31st of each year or in connection with any additional Sarbanes-Oxley certification required to be filed, upon at least thirty (30) days written request to Servicer, an officer of Servicer shall execute and deliver a servicer certification requested by the entity filing the Sarbanes-Oxley certification directly with the Securities and Exchange Commission (such as Owner, any master servicer, any trustee or any depositor) for the benefit of such entity and such entity’s Affiliates and the officers and directors of such entity;
18.1.3. solely with respect to a Securitization Transaction, Servicer shall provide (a) any and all information and appropriate verification of such information which may be reasonably available to Servicer relating to Servicer’s foreclosure and delinquency experience, whether through letters of its auditors and counsel or otherwise, as Buyer Agent shall reasonably request, and (b) such representations, warranties, covenants, opinions of counsel, letters from auditors, and certificates of public officials or officers of Servicer as are reasonably requested by the trustee, any Rating Agency or Buyer Agent, as the case may be, in connection with such Securitization Transactions, in each case, which are customary for similarly structured securitizations involving assets similar to the Options; and
18.1.4. solely with respect to an Option Transfer, to execute and be bound by an assignment, assumption and recognition agreement, assigning all of the rights, benefits, duties and obligations of Owner, for the benefit of the Beneficial Interest Holders, under this Agreement to a successor purchaser of some or all of the Options, provided that any such agreement shall be on commercially reasonable terms and in form and substance acceptable to Servicer in Servicer’s reasonable discretion.
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18.2. All Options not sold or transferred pursuant to Option Transfers or Securitization Transactions shall remain subject to this Agreement and shall continue to be serviced in accordance with the terms of this Agreement and with respect thereto this Agreement shall remain in full force and effect.
18.3. In the event (a) any Option becomes subject to an Option Transfer or Securitization Transaction, (b) the successor owner engages Servicer, and Servicer agrees, to be the servicer of such Option for such successor owner and (c) the successor owner agrees to reimburse all accrued unpaid and future Servicing Fees with respect such Option in a manner consistent with the payment of Servicing Fees under this Agreement or as otherwise approved in writing by Servicer, then Buyer Agent and the Beneficial Interest Holders shall not have any obligation to pay Servicer such accrued unpaid Servicing Fees or the applicable Termination Fee with respect to such Option.
18.4. In the event (a) Servicer is not retained as servicer or subservicer with respect to any Option subject to an Option Transfer or a Securitization Transaction or (b) the Reconstitution Agreement is not reasonably acceptable to Servicer, Owner shall pay to Servicer, on or before the related Reconstitution Date for such Option, the applicable Termination Fee for such Option and all other Options included in such Reconstitution;
18.5. Buyer Agent agrees to reimburse Servicer or to cause Servicer to be reimbursed for all reasonable out-of-pocket costs or expenses incurred by Servicer in connection with performing its duties and obligations in this Section 18 in connection with any Option Transfer or Securitization Transaction, including, without limitation, reasonable legal fees and expenses. Without limitation of the foregoing, in no event shall Servicer be required to take any action pursuant to this Section 18 that would require or result in the incurrence by Servicer of any material out-of-pocket costs or expenses unless Buyer Agent or the Beneficial Interest Holders shall have paid such amounts, or made arrangements for the payment of such amounts upon incurrence, in a manner acceptable to Servicer in its reasonable discretion.
18.6. Nothing contained in this Agreement shall prohibit or restrict Owner, at the direction of Buyer Agent, from having a lien and/or security interest in an Investor SUBI, selling or transferring Options, participation interests, interests in the applicable Investor SUBI, and/or other beneficial interests in the Options to any other Person in compliance with the terms specified in the other Program Documents; provided, that unless otherwise terminated, servicing under this Agreement shall continue with respect to the related Options.
19. Termination Events and Notice.
19.1. This Agreement shall terminate upon the occurrence of any of the following:
19.1.1. Payment or satisfaction (including exercise, expiration or repurchase by the applicable Homeowner) in full and complete liquidation of Owner’s interest in all Options serviced hereunder, without any new Options being purchased/sold in the thirty (30) days thereafter.
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19.1.2. Servicer resigning by providing ninety (90) days written notice to Buyer Agent; provided that, unless Buyer Agent is in default under this Agreement, such notice shall be accompanied by a written offer from a qualified third party servicing agent to service the Options pursuant to terms materially similar to the terms set forth in this Agreement, which Servicer has obtained after using reasonable efforts to obtain at least three bids and thereafter reasonably recommended the best one to Buyer Agent;
19.1.3. At Buyer Agent’s election, if a Servicer Event of Default has occurred or in the event Servicer is in material default under the Program Agreement, the Purchase Agreement, or any other Program Document, subject to applicable notice and cure provisions;
19.1.4. At Buyer Agent’s election, other than as a result of the occurrence of a Servicer Event of Default or a material default by Servicer under the Program Agreement, the Purchase Agreement, or any other Program Document, upon ninety (90) days’ prior written notice to Servicer of Buyer Agent’s election to terminate this Agreement, which such election may be without cause; or
19.1.5. Upon the applicable Reconstitution Date with respect to any Option Transfer or Securitization Transaction, solely with respect to the applicable Options subject to the related Reconstitution for which (a) Servicer is not retained as servicer or subservicer with respect to such Option Transfer or a Securitization Transaction or (b) the Reconstitution Agreement is not reasonably acceptable to Servicer, and subject in all respects to the terms of Section 18.
19.2. Each of the following shall constitute a Servicer Event of Default (each, a “Servicer Event of Default”):
19.2.1. Any failure by Servicer to make any payment, transfer or deposit (or to instruct any sub-servicer to make any payment, transfer or deposit) on or before the second (2nd) Business Day following the date when such payment, transfer or deposit is required to be made or given under this Agreement, and such failure shall remain unremedied for two (2) Business Days;
19.2.2. Any failure on the part of Servicer to duly observe or perform its obligations as set forth in this Agreement, which failure continues unremedied for a period of thirty (30) days (solely to the extent that such failure is reasonably susceptible to cure; if not, no such cure period shall apply) from the earlier of (i) its discovery of the failure or (ii) its receipt of notice of any such failure (from the date of such written notice), requiring the same to be remedied; provided, that such period shall be five (5) Business Days if such failure relates to a reporting obligation of Servicer.
19.2.3. Any representation, warranty or covenant made by Servicer in this Agreement shall prove to have been materially incorrect when made, which continues unremedied for a period of thirty (30) days after the date on which written notice thereof (solely to the extent that such failure is reasonably susceptible to cure; if not, no such cure period shall apply), requiring the same to be remedied, shall have been given to Servicer by Buyer Agent;
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19.2.4. (A) A court of competent jurisdiction shall enter a decree or order for relief in respect of Servicer in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law, or (B) an involuntary case shall be commenced against Servicer under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Servicer, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee or other custodian of Servicer for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of Servicer, and any such event described in this clause (B) shall continue for sixty (60) days without having been dismissed, bonded or discharged;
19.2.5. (A) Servicer shall have an order for relief entered with respect to it or shall commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or any Servicer shall make any assignment for the benefit of creditors, or (B) Servicer shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the board of directors (or similar governing body) of Servicer (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein;
19.2.6. Any order, judgment or decree shall be entered against Servicer decreeing the dissolution or split up of Servicer and such order shall remain undischarged or unstayed for a period in excess of sixty (60) days;
19.2.7. The occurrence of any Material Adverse Change in, or a Material Adverse Effect upon, (a) the financial condition, business, operations, prospects, assets or liabilities of Servicer or (b) the ability of Servicer to perform its obligations hereunder (including, without limitation, Servicer ceasing to be qualified to do business under the laws of any state in which a Property is located); or
19.2.8. The occurrence of any other Servicing Default as defined in the Program Documents;
then, and in each and every such case, so long as such Servicer Event of Default shall not have been remedied during any applicable cure period, Buyer Agent may, but shall not be obligated to, by notice in writing to Servicer (such notice, a “Termination Notice”), terminate all the rights and obligations of Servicer under this Agreement; provided, however, that as a condition to such termination, Buyer Agent shall pay to Servicer all accrued Servicing Fees through the date of termination. On or after the receipt by Servicer of a Termination Notice and payment to Servicer of all accrued Servicing Fees, all authority and power of Servicer to service the Options under this Agreement shall on the Date of Servicer Termination (as defined below) pass to the successor servicer (any other Person so appointed, a “Successor Servicer”) appointed by Buyer Agent.
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Notwithstanding anything herein to the contrary, Servicer will not be in default under this Agreement if it is unable to perform any of its obligations for a period not longer than sixty (60) days as a result of an act of God, act of war, terrorism, fires, earthquake or other natural disaster, provided Servicer promptly notifies Buyer Agent of the existence of such conditions (if notice is not prevented by the same) and uses commercially reasonable efforts to resume the performance of its obligations under this Agreement as soon as reasonably practicable after any such event.
19.3. Servicing Transfer.
19.3.1. Upon receipt of a Termination Notice and payment to Servicer of all accrued Servicing Fees and, if applicable solely with respect to any termination of this Agreement or removal of Servicer as the servicer of any Option solely pursuant to Section 19.1.4 or Section 19.1.5, Termination Fees, Servicer shall terminate its activities as servicer hereunder on the “Date of Servicer Termination” specified in such Termination Notice or, if later, the date on which such accrued Servicing Fees have been paid in full (which may be a date that is later than the date of the Termination Notice but in any event no more than sixty (60) days after the date of the Termination Notice (the period from the date of the Termination Notice to the Date of Servicer Termination being referred to as the “Transition Period”)). During the Transition Period, Servicing Fees shall continue to accrue in accordance with this Agreement and the Program Agreement, and Servicer shall continue to perform all servicing functions under this Agreement until the Date of Servicer Termination, at which time all Servicing Fees accruing during such Transition Period shall be due and payable. Any transition fees or “deboarding” fees payable to the Initial Sub-servicer in connection with any transfer of servicing shall be payable by Buyer Agent and the Beneficial Interest Holders. Servicer agrees to cooperate with Buyer Agent and any Successor Servicer in effecting the termination of the responsibilities and rights of Servicer to conduct servicing hereunder, including the transfer to such Successor Servicer of all authority of Servicer to service the Options provided for under this Agreement, including all authority over all Collections which shall have been deposited in the Account(s), or which shall thereafter be received with respect to the Options. Servicer shall promptly execute and deliver any and all documents and other instruments reasonably requested by Buyer Agent in connection with the succession by the Successor Servicer, including any licenses with respect to any licensed software necessary to access the Option Documents and related files, place in the Successor Servicer’s possession all records related to the Options, including the Option Documents and related files (other than any such records held by Buyer Agent), and other servicing files.
19.3.2. Notwithstanding anything herein to the contrary or in any other Program Document to the contrary, Buyer Agent shall also have the right, in Buyer Agent’s sole discretion, to request a servicing transfer from Servicer to any other third party with respect to any defaulted Option.
19.3.3. Upon Buyer Agent’s request, after the Transition Period, Servicer shall refer inquiring Homeowners to a telephone number provided by the Successor Servicer and shall promptly forward all correspondence and payments received by Servicer from any Homeowners to the Successor Servicer.
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20. Servicer’s Duties at Termination. Upon the termination of this Agreement, all the rights and duties of Servicer under this Agreement shall immediately terminate. Within thirty (30) days of such termination of this Agreement, Buyer Agent shall reimburse Servicer for any and all fees and advances made pursuant to this Agreement for which Buyer Agent and the Beneficial Interest Holders are responsible hereunder (to the extent not previously paid as provided in Section 19).
21. Servicer’s Right to Submit and Execute Demand for Payoff. Notwithstanding anything in this Agreement to the contrary, Servicer is hereby authorized and responsible for submitting and executing all demands for payoff, Substitution of Trustee, and Deeds of Reconveyance.
22. Applicable Law.
22.1. This Agreement shall be construed under and governed in accordance with the laws of the State of New York, including General Obligations Law §5-1401, but otherwise without regard to the conflicts of laws principles thereof, while the Option Documents shall be governed by the laws in the state in which the underlying Property is located or by such other laws as may be specified in the Option Documents.
22.2. Dispute Resolution.
(a) Mediation. Any dispute between the Parties under this Agreement or the other Program Documents shall be submitted to mediation at the written election of either Party, prior to the filing of arbitral proceedings (except when a statute of limitation is about to expire). Within ten (10) days of that election, Servicer and Buyer Agent shall select one mediator not affiliated with either Party. If, by the end of that ten (10) day period, Servicer and Buyer Agent cannot agree on a mediator, then each Party shall select a mediator of its choice; and the two mediators selected by Servicer and Buyer Agent shall select a mediator of their choice not affiliated with either Servicer or Buyer Agent. Within ten (10) days of being appointed, the mediator(s) selected in accordance with this provision shall mediate between Servicer and Buyer Agent with the objective of resolving the dispute submitted for mediation.
(b) Arbitration. In the event the Parties have a dispute under this Agreement or the other Program Documents that cannot be amicably resolved by mediation or otherwise, upon the mutual agreement of both Parties, the Parties agree to submit the dispute to binding arbitration to JAMS in its office closest to Palo Alto, California (with all proceedings required to be held there), pursuant to its Comprehensive Arbitration Rules and Procedures, and in accordance with the Expedited Procedures in those Rules. The arbitration shall be conducted by a single arbitrator, with respect to any dispute reasonably involving under $1,000,000, and three arbitrators, with respect to any dispute reasonably involving over $1,000,000. The arbitrator(s) shall provide the Parties with a brief period of time (not to exceed ninety (90) days) to conduct discovery. The award rendered by the arbitrator(s) shall be final, and judgment may exclusively be entered upon it in accordance with Applicable Law in federal or state courts located in Santa Clara County, California. The parties shall maintain the confidential nature of the arbitration proceedings, the Award, and the arbitration hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an Award or its enforcement, or unless otherwise required by law or judicial decision. The costs of arbitration and reasonable counsel fees will be borne by the Party determined by the arbitrator to be the non-prevailing Party. If the arbitrator does not make a finding as to whether a Party is to be considered a prevailing Party, the Parties shall share the costs of arbitration equally and each Party shall bear its own counsel and other arbitration fees. The Parties agree to be bound by the decision of the arbitrator.
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22.3. EACH PARTY HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER PROGRAM DOCUMENTS OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
23. Document Contains Entire Agreement; Amendments; Waiver. This Agreement and the other Program Documents contain the entire agreement between the parties hereto and cannot be modified, amended, waived or supplemented in any respect except by an agreement in writing signed by Servicer, Trust Manager (on behalf of PTT) and Buyer Agent. With respect to PTT, in the event of any conflict between this Agreement and the Titling Trust Agreement as supplemented by the Investor SUBI Supplements, the terms of the Titling Trust Agreement as supplemented by the Investor SUBI Supplements shall control. In the event of any conflict between this Agreement and the Program Agreement, the terms of the Program Agreement shall control. No term or provision of this Agreement may be waived or modified unless such waiver or modification is in writing and signed by the Party against whom such waiver or modification is sought to be enforced.
24. Severability. If any provisions hereof shall be held or deemed to be or shall in fact be inoperative or unenforceable, such circumstances shall not render any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever. In lieu of such inoperative or unenforceable term, there shall be added to this Agreement a term that is valid and fully enforceable and as similar, in purpose and intended effect, to such inoperative or unenforceable term as is reasonably possible.
25. Notices. It shall be sufficient service of any notice, approval, consent, request or demand, or other communication if the same shall be delivered (i) in person, (ii) by overnight courier, (iii) by first class registered or certified mail, return receipt requested, postage prepaid or (iv) by electronic mail with acknowledgment, in each case to the appropriate address as follows:
To PTT/Trust Manager/Owner:
Point Titling Trust
c/o Point Digital Finance, Inc.
444 High Street, Floor 4
Attention: Chief Executive Officer
e-mail: CEO@point.com
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With a copy to:
Kutak Rock LLP
1650 Farnam Street
Omaha, NE 68102
Attention: Joel L. Wiegert
e-mail: joel.wiegert@kutakrock.com
To Buyer Agent:
GB HRP, LLC
c/o Glassbridge Enterprises, Inc.
18 East 50th Street
New York, NY 10022
Attention: Daniel Strauss
e-mail: dstrauss@glassbridge.com
With a copy to:
Holland & Knight LLP
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Attention: Eric Pfeifle
e-mail:
eric.pfeifle@hklaw.com
| To Servicer: | Point Digital Finance, Inc. |
444 High Street, Fl 4
Palo Alto, CA 94301
Attention: Chief Executive Officer
CEO@point.com
With a copy to:
Kutak Rock LLP
The Omaha Building
1650 Farnam Street
Omaha, NE 68102
Attn: Joel L. Wiegert
e-mail: joel.wiegert@kutakrock.com
Servicer, Trust Manager (for itself or with respect to PTT) or Buyer Agent may, by written notice given herein, designate any further or different address to which subsequent notices, approvals, consents, complaints, demands or other communications shall be sent or Persons to whose attention the same shall be directed.
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26. Conflict of Interest. Servicer shall promptly give prior written notice to Buyer Agent of Servicer’s interest, or the interest of any Affiliate of Servicer, or employee of Servicer, in and to any ownership interest in any property which is encumbered or to be encumbered by an Option which is to be serviced under this Agreement, including reasonable detail regarding the relationships and underlying facts, and such financial interest in the Option must be approved by Buyer Agent Consent prior to the time the Option is to be sold to Owner and/or serviced under this Agreement.
27. Independent Contractor. It is understood and agreed that Servicer is an independent contractor and shall use its own officers, equipment, and employees and shall proceed by such means and in such manner as it deems best to carry out the terms of this Agreement. Further, this Agreement shall in no way be deemed to vest Servicer with any ownership interest or participation rights in any Option serviced hereunder, nor shall this Agreement serve to vest Servicer with any interest, right or title to the Property. Nothing herein contained shall constitute a partnership between or joint venture by the parties hereto or constitute any party the agent of the others. No party shall hold itself out contrary to the terms of this Section and no party shall become liable by any representation, act or omission of the other contrary to the provisions hereof. This Agreement is not for the benefit of any third party and shall not be deemed to give any right or remedy to any such party whether referred to herein or not.
28. Indemnity.
(a) Servicer shall indemnify, defend and hold harmless Buyer Agent, the Beneficial Interest Holders and their respective officers, employees and agents (each of the foregoing an “Indemnified Person”), against any charges, damages, costs, expenses (including reasonable and invoiced attorneys’ fees and out-of-pocket costs of suits), judgments, penalties, liability or losses of any kind or nature whatsoever, which may be sustained, suffered by, secured against, or imposed upon an Indemnified Person, by reason of (i) a breach of any of the covenants, representations or warranties made by Servicer herein or by reason of any unauthorized action or failure to act of Servicer, its agents and employees, in connection with the performance of services and duties in respect to any Option or Options serviced hereunder, (ii) default by Servicer in the performance of its duties as Servicer under this Agreement, or (iii) Servicer’s gross negligence, misfeasance, willful misconduct or bad faith. Servicer’s obligations under this Section 28 shall survive the resignation or removal of Servicer or the termination of this Agreement.
(b) Whenever any claim of the type that would occasion indemnification under this Section 28 is asserted or threatened against any Indemnified Party, the Indemnified Party shall promptly notify the indemnifying party. Each Indemnified Party shall notify, to the extent it has actual knowledge thereof, the indemnifying party, within ten (10) days after the occurrence thereof or obtaining knowledge thereof, of any event, which may give rise or otherwise trigger a right to seek indemnification pursuant to this Section 28. The notice shall include, if known, the facts constituting the basis for such claim, including, if known, the amount or an estimate of the amount of the liability arising therefrom. A failure to timely give such notification shall not affect the indemnification provided hereunder, except to the extent such failure materially prejudices any defense of claim available to the indemnifying party. In the event of any claim for indemnification hereunder resulting from or in connection with the claim or legal proceedings of a claimant not an Indemnified Party to this Agreement, the indemnifying party shall have the right, at its option, at its expense and with its own counsel (which counsel shall be reasonably satisfactory to the Indemnified Party seeking indemnification) to assume the defense of any such claim or any litigation resulting from such claim or to participate with its own counsel (which counsel shall be reasonably satisfactory to the Indemnified Party) in the compromise or defense thereof. If the indemnifying party undertakes to assume the defense of any such claim or litigation or participate in the compromise thereof, it shall promptly notify the Indemnified Party of its intention to do so, and, as a condition to the indemnifying party’s indemnification obligation, the Indemnified Party shall cooperate reasonably with the indemnifying party and its counsel (but at the sole expense of the indemnifying party) in the defense against or compromise of any such claim or litigation. Anything in this Section 28 to the contrary notwithstanding, if the Indemnified Party is seeking indemnity, the Indemnified Party shall not compromise or settle any such claim or litigation without the prior written consent of the indemnifying party, which consent will not be unreasonably withheld, conditioned or delayed, and if any Indemnified Party shall have any potential liability with respect to, or may be adversely affected by, such settlement or compromise, the indemnifying party shall not settle or compromise such claim or litigation without the prior written consent of such Indemnified Party. Any amounts due to a Buyer Indemnified Party hereunder shall be payable on demand.
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29. Term. This Agreement, unless terminated as provided herein, shall remain in effect until Owner’s interest in all the Options serviced hereunder, including the Property, are paid in full or completely liquidated. All of Servicer’s warranties, representations or indemnifications made in this Agreement, shall survive the termination of the Agreement and shall remain in effect for one (1) year from the date of termination of this Agreement. The obligation of Buyer Agent and the Beneficial Interest Holders to pay all accrued Servicing Fees and Termination Fees shall survive the termination of this Agreement and shall continue thereafter until such amounts are paid in full.
30. Counterparts. This Agreement may be executed in any number of counterparts and all of such counterparts shall together constitute one and the same instrument. This Agreement may be executed by signature(s) transmitted by facsimile or PDF.
31. Modification. This Agreement shall not be modified, cancelled or terminated except by an instrument in writing signed by Servicer and Buyer Agent. Unless otherwise agreed, the Party seeking modification of this Agreement shall be solely responsible for any and all reasonable costs and expenses that arise in order to modify this Agreement.
32. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns; provided, that except as otherwise expressly set forth herein, no party may assign this Agreement without the written consent of the other party hereto; provided further, that Buyer Agent may assign its rights and obligations under this Agreement to an Affiliate without consent.
33. Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Person not a party hereto or a successor or assign of a party hereto.
34. No Waiver. No failure to exercise and no delay in exercising, on the part of Owner, Trust Manager or Buyer Agent, any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges provided under this Agreement are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.
35. Section Headings. Section headings are for convenient reference only and will not affect the meaning or have any bearing on the interpretation of any provision of this Agreement.
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36. Business Continuity/Disaster Recovery.
36.1. During the term of this Agreement, Servicer shall maintain a business continuity plan (“BCP”) that provides for the continuation of services hereunder if an incident (act or omission) impairs or disrupts Servicer’s obligation to provide the services hereunder. The BCP includes and shall include procedures and practices with respect to the evaluation by Servicer of the BCP of any agent, subcontractor, or service provider that is critical to the performance of the services hereunder. Servicer agrees to make a copy of its entire BCP available for Buyer Agent’s review. Servicer shall maintain and test the BCP at regular intervals (no less frequently than annually) in accordance with accepted industry practices for BCP testing and shall provide Buyer Agent with results of such regular testing (properly redacted to maintain the confidential nature of any relevant information provided to such party) at Buyer Agent’s request.
36.2. During the term of this Agreement, Servicer shall, at its own expense (without reimbursement), maintain a disaster recovery plan in support of the processing and related functions it performs in respect of its servicing obligations under this Agreement that is designed to provide for disaster recovery and the resumption of business in the event that a disaster disrupts or impairs its provision of servicing pursuant to this Agreement. Servicer’s disaster recovery plan shall include, at a minimum, procedures for back-up/restoration of operating and application software, procedures for the protection of source documentation with respect to the serviced Options; procedures and third-party agreements for replacement equipment (e.g. computer equipment), and procedures and third-party agreements for off-site production facilities. Servicer agrees to provide a summary of its disaster recovery plan for Buyer Agent to review upon request. Servicer agrees to annually test its disaster recovery plan, shall promptly take corrective action as necessary to comply with this Section 36.2 and, upon request, provide a written report thereof to Buyer Agent. Servicer shall promptly notify Buyer Agent of any material change to Servicer’s disaster recovery plan.
37. Concerning the UTI Trustee. The parties hereto are put on notice and hereby acknowledge and agree that (a) this Agreement is executed and delivered on behalf of PTT by Wilmington Savings Fund Society, FSB (“WSFS”), as UTI Trustee of PTT, not individually or personally but solely as trustee of PTT, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of PTT is made and intended not as a personal representation, undertaking or agreement of WSFS but is made and intended for the purpose of binding PTT, (c) nothing herein contained shall be construed as creating any liability on WSFS, individually or personally, to perform any covenant either expressed or implied contained herein of PTT, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) WSFS has made no investigation as to the accuracy or completeness of any representations and warranties made by PTT in this Agreement, and (e) under no circumstances shall WSFS be personally liable for the payment of any indebtedness or expenses of PTT or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by PTT under this Agreement or any other related document.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Master Option Servicing Agreement to be duly executed by their respective officers as of the day and year first above written.
| POINT DIGITAL FINANCE, INC., | ||
| as Servicer and as Trust Manager for Point Titling Trust | ||
| By: | /s/ Eddie Lim | |
| Name: | Eddie Lim | |
| Title: | CEO | |
| POINT TITLING TRUST, | ||
| as Titling Trust and as Owner | ||
| By: | Wilmington Savings Fund Society, | |
| FSB, not in its individual capacity but solely as UTI Trustee | ||
| By: | /s/ Mary Emily Pagano | |
| Name: | Mary Emily Pagano | |
| Title: | Vice President | |
| GB HRP, LLC, | ||
| as Buyer Agent | ||
| By: | /s/ Eddie Lim | |
| Name: | Eddie Lim | |
| Title: | CEO | |
[Signature Page to Master Option Servicing Agreement]
Exhibit 10.4
CUSTODIAL AGREEMENT
GB HRP, LLC,
Buyer Agent,
Point Titling Trust,
Titling Trust,
Point Digital Finance, Inc.,
Trust Manager
and
U.S. BANK NATIONAL ASSOCIATION
Custodian
Dated
December 29, 2023
TABLE OF CONTENTS
| Page | ||
| Section 1. | Certain Definitions | 1 |
| Section 2. | Appointment of the Custodian | 5 |
| Section 3. | Delivery of Mortgage Files | 5 |
| Section 4. | Custodian’s Acceptance of Mortgage Files | 6 |
| Section 5. | Custodian Certification | 6 |
| Section 6. | Release of Mortgage Files | 6 |
| Section 7. | Further Obligations of the Custodian | 7 |
| Section 8. | Proper Instructions | 7 |
| Section 9. | Transmission of Mortgage Files | 8 |
| Section 10. | Fees of the Custodian | 8 |
| Section 11. | Resignation or Removal of Custodian; Termination of Agreement | 9 |
| Section 12. | Representations | 10 |
| Section 13. | Notices | 10 |
| Section 14. | Concerning the Custodian | 11 |
| Section 15. | Force Majeure | 14 |
| Section 16. | Indemnification | 14 |
| Section 17. | Amendments | 14 |
| Section 18. | Effective Waiver | 14 |
| Section 19. | Severability | 14 |
| Section 20. | Binding Effect; Governing Law | 14 |
| Section 21. | Successors and Assigns; Third Party Benefit | 15 |
| Section 22. | Entire Agreement; Counterparts | 15 |
| Section 23. | Other Business | 15 |
| Section 24. | Reproduction of Documents | 15 |
| Section 25. | Confidentiality | 16 |
| Section 26. | Actions Necessary to Preserve Rights under Mortgage Loan Documents | 16 |
| Section 27. | Submission to Jurisdiction; Waivers | 16 |
| Section 28. | Compliance with Applicable Law | 17 |
| SCHEDULE I | OPTION DOCUMENTS |
| SCHEDULE II | RECOMMENDED DATA FILE CRITERIA |
| EXHIBIT A | FORM OF CUSTODIAN CERTIFICATION |
| EXHIBIT B | AUTHORIZED REPRESENTATIVES |
| EXHIBIT C | FORM OF REQUEST FOR RELEASE |
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CUSTODIAL AGREEMENT
This CUSTODIAL AGREEMENT (as amended or modified from time to time, this “Agreement”) is made and entered into as of December 29, 2023, among GB HRP, LLC, a Delaware limited liability company (the “Buyer Agent”), as the buyer agent, Point Titling Trust, a Delaware statutory trust (“PTT”), as the titling trust, Point Digital Finance, Inc., a Delaware corporation (“Point”), as trust manager of PTT and U.S. Bank National Association, a national banking association, organized under the laws of the United States, as the custodian (in such capacity, the “Custodian”).
WHEREAS, the Buyer Agent is the agent for certain Affiliates (the “Buyers”) of the Buyer Agent that from time to time may purchase certain real estate purchase options (including those allocated to an Investor SUBI as described below, the “Option Assets”) from Point (in such capacity, the “Seller”) pursuant to the Sale Agreement, and become the owner thereof;
WHEREAS, Point, as holder of the UTI and the related UTI Certificate issued under the Titling Trust Agreement, may from time to time cause Investor SUBIs to be issued to or at the direction of Buyer Agent (on behalf of the Buyers) pursuant to the Sale Agreement, and Option Assets may from time to time be allocated to the applicable Investor SUBIs (as determined by Buyer Agent);
WHEREAS, the Buyer Agent and PTT (with respect to Option Assets owned by PTT and allocated to the applicable Investor SUBI) desire to have the Custodian take possession of certain documents relating to such Option Assets as specified herein, as the custodian for the Buyer Agent and its Affiliates and PTT, as applicable, in accordance with the terms and conditions hereof; and
WHEREAS, the Custodian has agreed to act as custodian for the Buyer Agent and its Affiliates and PTT, on the terms and conditions hereof;
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
Section 1. Certain Definitions. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision; and Section references refer to Sections of this Agreement. For the purposes of this Agreement, the following terms shall have the indicated meanings unless the context or use indicates another or different meaning and intent, and the definitions of such terms are equally applicable to the singular and the plural forms of such terms.
“Affiliate” has the meaning set forth in the Sale Agreement.
“Agreement” means this Custodial Agreement and the Schedules and Exhibits hereto, as supplemented or amended from time to time.
“Applicable Client” means (1) with respect to Non-SUBI Option Assets, Buyer Agent, or (2) with respect to SUBI Option Assets, PTT acting at the direction of Buyer Agent (or the Trust Manager on behalf of PTT acting at the direction of Buyer Agent), in each case as applicable with respect to the applicable Option Assets.
“Assignment of Mortgage” means an assignment of Mortgage reflecting the transfer of the Mortgage to the party indicated therein.
“Authorized Representative” has the meaning set forth in Section 8(b) hereof.
“Business Day” means any day other than (i) a Saturday or Sunday, (ii) any day that is a legal holiday under the laws of the States of New York or California, or the city or state in which the Custodian’s offices are located or (iii) any day on which commercial banks in the States of New York, California or the city or state in which the Custodian’s offices are located are closed or authorized or permitted to close.
“Confidential Information” means any databases, computer programs, screen formats, screen designs, report formats, interactive design techniques and other similar or related information that may be furnished to the Buyer Agent by the Custodian from time to time pursuant to this Agreement.
“Custodian Certification” has the meaning set forth in Section 3(b) hereof.
“Delivery of Option Files” means actual receipt by the Custodian at its designated office of the (i) Option Files and (ii) Option Asset Schedule relating to such Option Files.
“Electronic Custodial Documents” shall mean a copy of any Option Documents delivered by Buyers (or the Servicer on behalf of the Buyers) to the Custodian in portable document format (“.pdf”) or other electronic format as agreed to in writing by the Custodian.
“Electronic File Platform” shall mean an online document management system or platform maintained by Custodian, (a) with respect to which (i) Buyers (or Servicer on behalf of Buyers) (x) may have access to upload files and (y) shall not be permitted access to delete files therefrom, and (ii) Buyer Agent shall have access to read, review, and download any Electronic Custodial Documents saved thereon, and (b) which shall be organized in a manner pursuant to which each of the Custodian’s Option Files (and the related Exception Report) for each Receivable as of any date of determination shall be segregated into (and otherwise maintained in) digital folders, workspace, or other similarly discernible partition (each, an “Option File Folder”).
“Exception Report” has the meaning set forth in Section 3(b) hereof.
“Homeowner” means the grantor of an Option Asset, who is an owner of the related Mortgaged Property and the seller of such Option Asset pursuant to the related Option Documents, and such grantor’s or seller’s successors in title to the Mortgaged Property.
“Investor SUBI” means, collectively, any special unit of beneficial interest issued by PTT to a person designated by Buyer Agent pursuant to the Titling Trust Agreement and an Investor SUBI Supplement, entitling the holder(s) thereof to an exclusive 100% undivided beneficial ownership interest in the related assets allocated to such holder’s SUBI, including the underlying assets relating to such portfolio, all as set forth in the Titling Trust Agreement.
“Investor SUBI Supplement” means, collectively, any SUBI Supplement for an Investor SUBI established under Titling Trust Agreement, as amended, modified or supplemented from time to time, among Point, as Depositor, as SUBI settlor and as Trust Manager, and Wilmington Savings Fund Society, FSB, as UTI Trustee and as SUBI Trustee.
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“Mortgage” means a mortgage, deed of trust or other instrument securing an Option Asset, which creates a lien on the Mortgaged Property described therein.
“Mortgaged Property” means the real property securing the Homeowner’s obligations under the Option Documents.
“Non-SUBI Option Assets” means Option Assets that have not been allocated to an Investor SUBI.
“Option Asset” has the meaning set forth in the Recitals hereto.
“Option Asset Number” shall mean the number assigned to an Option Asset to facilitate identification for administrative purposes.
“Option Asset Schedule” means a listing of Option Files in computer readable standardized text formats, identified by the Option Asset Number, delivered or caused to be delivered by the Buyer Agent to the Custodian, incorporating the fields listed on Schedule II hereto and such other information and fields as may be mutually agreed upon by the Buyer Agent and the Custodian and in a form satisfactory to the Buyer Agent and the Custodian.
“Option Documents” means, with respect to any Option Asset, the documents listed on the attached Schedule I together with all extensions, modifications, supplements, and amendments thereto or restatements thereof.
“Option File” means with respect to any Option Asset, all documents involved in the origination, underwriting (including documented compensating factors pertaining to exceptions) and servicing of such Option Asset, including but not limited to the Option Documents, the Option closing disclosure statement, the Appraisal (as defined in the Sale Agreement), evidence of insurance, notice of right to cancel, and notice of assignment, and any additional documents required to be added to the Option File pursuant to the Sale Agreement.
“Option List” means, in the case of each Option File held by the Custodian for the benefit of the Buyer Agent, a computer-readable transmission containing the following information (and such other data as may be mutually agreed upon in writing by the Buyer Agent and the Custodian), which shall be delivered by the Custodian to the Buyer Agent pursuant to this Agreement: the Option Asset Number, Homeowner’s name, the Option Investment Payment (as defined in the related Option Documents) associated with such Option Asset and address of the Mortgaged Property.
“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.
“Point” shall have the meaning set forth in the Recitals of this Agreement.
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“PTT” shall have the meaning set forth in the Recitals of this Agreement.
“Proper Instructions” means the meaning set forth in Section 8(a) hereof.
“Request for Release” means a request for release of any Option File, which request shall be either (i) delivered to the Custodian substantially in the form of Exhibit C hereto or (ii) as otherwise agreed to between the Custodian and the Buyer Agent.
“Responsible Officer” means, with respect to the Custodian, any officer, including any managing director, principal, vice president, assistant vice president, assistant treasurer, assistant secretary, trust officer or any other officer of the Custodian customarily performing functions similar to those performed by any of the above designated officers, and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, in each case, having direct responsibility for the administration of this Agreement.
“Sale Agreement” means that certain Master Option Sale Agreement, dated on or about the date hereof, by and between Buyer Agent, PTT, as a buyer, and the Seller, as seller, as depositor and as Trust Manager, as amended or modified from time to time.
“SUBI Option Assets” means Option Assets that have been allocated to an Investor SUBI.
“SUBI Trustee” means Wilmington Savings Fund Society, FSB.
“Titling Trust Agreement” means that certain Amended and Restated Trust Agreement, dated as of July 14, 2023, as modified, supplemented or amended from time to time, among Point, as the depositor, the Trust Manager, and the UTI Trustee.
“Trust Manager” means Point, as trust manager of PTT.
“UTI” has the meaning set forth in the Titling Trust Agreement.
“UTI Certificate” has the meaning set forth in the Titling Trust Agreement.
“UTI Trustee” means Wilmington Savings Fund Society, FSB.
(a) In this Agreement, unless the contrary intention appears:
| (i) | any reference to this Agreement or another agreement or instrument refers to such agreement or instrument as the same may be amended, modified or otherwise rewritten from time to time; |
| (ii) | a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them; |
| (iii) | any term defined in the singular form may be used in, and shall include, the plural with the same meaning, and vice versa; |
| 4 |
| (iv) | a reference to a Person includes a reference to the Person’s executors, custodians, successors and permitted assigns; |
| (v) | an agreement, representation or warranty in favor of two or more Persons is for the benefit of them jointly and severally; |
| (vi) | an agreement, representation or warranty on the part of two or more Persons binds them jointly and severally; and |
| (vii) | any reference to “Buyer Agent” in Section 1 and thereafter shall be a reference to “Applicable Client”, and the provisions applicable to an Applicable Client relate solely to the Option Assets owned by the respective Applicable Client. |
(b) Headings are inserted for convenience and do not affect the interpretation of this Agreement.
Section 2. Appointment of the Custodian. The Buyer Agent hereby appoints the Custodian, and the Custodian hereby accepts its appointment, to act as the custodian for the Buyer Agent, to provide the services set forth in this Agreement, upon the terms and conditions set forth in this Agreement.
The Custodian acknowledges and agrees that it will hold possession of all Option Files delivered to it in accordance with this Agreement for the benefit of the Buyer Agent.
Section 3. Delivery of Option Files.
(a) Buyer Agent shall from time to time deliver or cause to be delivered Option Files, including originals (provided such originals are available) or copies of each of the related Option Documents, as set forth on Schedule I hereto, to the Custodian to be held hereunder, pursuant to and in accordance with the terms of the Sale Agreement. With respect to each delivery of Option Files, the Servicer shall provide or cause to be provided a related Option Asset Schedule (in a form acceptable to the Buyer Agent and the Custodian) to the Custodian with respect to such Option Files that are being delivered.
(b) In receiving any Option Files hereunder, and in maintaining any listing or providing any report or communication with respect to the Option Files or Option Documents held hereunder, the Custodian shall be required only to review the face of each document received to determine whether it appears regular on its face and appears to relate to the related Option Asset. Upon Delivery of Option Files in accordance with the preceding sentence, within three (3) Business Days the Custodian shall execute and deliver to the Buyer Agent a certification more fully described in Section 5 (a “Custodian Certification”) substantially in the form attached hereto as Exhibit A, including an attached exception report (an “Exception Report”), listing any Option Document not included in the related Option File after review against Schedule I hereto and the Option Asset Schedule (which Exception Report shall include any document that does not, on its face, appear regular and/or related to such Option Asset). For the avoidance of doubt, such review will not commence in accordance with this Section 3(b) until both the Option Files and the Option Asset Schedule have been delivered to the Custodian.
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(c) The Custodian shall not otherwise be under any duty to review, inspect, examine or certify the Option Files or related Option Documents; and without limiting the foregoing, the Custodian shall be entitled to assume the genuineness of each such document and the genuineness and due authority of any signatures appearing thereon, and shall be entitled to assume that each such document is what it purports to be. The Custodian shall have no liability for or obligation with respect to, and shall not be construed or obliged to make any representation or warranty as to: (i) the validity, sufficiency, marketability, genuineness, value, contents or enforceability of any Option Document; (ii) the validity, adequacy or perfection of any lien upon or security interest purported to be evidenced or created thereby; or (iii) to determine that the contents of any Option Document are appropriate for the represented purpose or that any Option Document has actually been recorded or filed, as may be applicable, or that any Option Document is other than what it purports on its face to be.
Section 4. Custodian’s Acceptance of Option Files.
(a) The Custodian shall accept the documents received by the Custodian pursuant to Section 3 hereunder. With respect to each Option File listed on a given Option Asset Schedule, the Custodian shall issue an Option List (in addition to the Custodian Certification) upon review of the Option Files. If upon delivery of such Option Files, any Option File listed on the Option Asset Schedule has not been received by the Custodian, the Custodian shall identify such Option File as pending on the related Option List.
(b) Any Option List or Custodian Certification delivered to the Buyer Agent by the Custodian shall supersede, cancel and replace the previously delivered Option List or Custodian Certification, as applicable, and shall, in each case, control and be binding on the parties hereto.
Section 5. Custodian Certification. The Custodian shall, in each Custodian Certification, certify and confirm as to each Option File listed on the Option Asset Schedule that, except as noted on the Exception Report attached to such Custodian Certification:
| (i) | all Option Documents required to be delivered to it pursuant to Section 3 and hereof are in the Custodian’s possession; and |
| (ii) | all documents contained in the Option File as described on the attached Schedule I have been reviewed by the Custodian and appear regular on their face and relate to such applicable Option File. |
Section 6. Release of Option Files.
(a) In the event that any Option File is needed by the Buyer Agent for the purpose of correction of errors therein or for one of the other purposes set forth in a Request for Release, the Buyer Agent shall send to the Custodian a Request for Release. The Custodian shall release such Option Files within three (3) Business Days of its receipt of such completed Request for Release. Any request for release by the Buyer Agent shall be in the form of the Request for Release.
(b) The Buyer Agent is authorized to transmit and the Custodian is authorized to accept signed facsimile or email copies of Requests for Release submitted in the form attached hereto as Exhibit C (or as otherwise agreed between the Custodian and the Buyer Agent).
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(c) In the case of an Option Asset paid in full, within five (5) Business Days of receipt by the Custodian of the Buyer Agent’s Request for Release, the Custodian shall release the related Option File to the Servicer or Sub-servicer, as applicable.
Section 7. Further Obligations of the Custodian.
(a) Maintenance of Facility. The Custodian shall segregate and identify the Option Files on its automated data system and maintain custody of all Option Files received by it in secure and fire resistant facilities, all in accordance with customary standards for such custody.
(b) Insurance. The Custodian shall, at its own expense, maintain at all times during the existence of this Agreement and keep in full force and effect insurance in amounts, with standard coverage and subject to deductibles, all as customary for insurance typically maintained by banks that act as custodian. Upon written request from the Buyer Agent, the Custodian shall provide evidence (which evidence may be in the form of a certificate of the respective insurer) that such insurance is in full force and effect.
(c) Examination. The Custodian shall upon not less than three (3) Business Days prior written notice permit (a) inspection during regular business hours of the Custodian (and subject to its usual charges for such access) by the Buyer Agent (or by its auditors or agents when requested by the Buyer Agent) of the Option Files, at such place or places where the related Option Files are deposited, and (b) the Buyer Agent (or its auditors or agents when requested by the Buyer Agent) to make copies of the Option Files. Buyer Agent shall be responsible for any expenses in connection with such inspection and copying. Any such inspection and copying shall be subject to the procedures of the Custodian. In addition, and not in limitation of the foregoing, the Buyer Agent shall indemnify and hold the Custodian harmless from all claims, costs, expenses, losses and damages incurred by the Custodian as a result of the damage, loss or misplacement of any Option Files or Option Documents or other papers contained in the Option Files while in the possession of the Buyer Agent (or its auditors or agents).
Section 8. Proper Instructions.
(a) Any instruction or direction delivered to the Custodian from the Buyer Agent shall be in writing and executed by an Authorized Representative and shall be delivered in accordance with Section 13 hereof. The Custodian and the Buyer Agent may agree from time to time to accept other forms of instruction or direction. Any such instruction or direction delivered pursuant to this Section 8(a) shall be considered “Proper Instructions.”
(b) Any of the persons whose signatures and titles appear on Exhibit B (an “Authorized Representative”) are authorized, acting singly, to act for, the Buyer Agent under this Agreement. The specimen signature for each such Authorized Representative of the Buyer Agent initially authorized hereunder is set forth on Exhibit B. From time to time, the Buyer Agent may, by delivering to the Custodian a revised exhibit, change the information previously given, but the Custodian shall be entitled to rely conclusively on the then current Exhibit until receipt of a superseding exhibit.
(c) The Custodian shall have no obligation to act in accordance with purported instructions to the extent that they conflict with applicable law or regulations. The Custodian shall not be liable for any loss resulting from a delay while it obtains clarification of any Proper Instructions.
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(d) If, in performing its duties under this Agreement, the Custodian is required to decide between alternative courses of action, the Custodian may (but shall not be obliged to) request written instructions from the Buyer Agent as to the course of action desired by it. If the Custodian does not receive such instructions within two (2) Business Days after it has requested them, the Custodian may, but shall be under no duty to, take or refrain from taking any such courses of action. The Custodian shall act in accordance with instructions received from the Buyer Agent in response to such request after such two Business Day period except to the extent it has already taken, or committed itself to take, action inconsistent with such instructions.
Section 9. Transmission of Option Files. Prior to any shipment of any Option Files or Option Documents hereunder pursuant to the request of the Buyer Agent, the Buyer Agent shall deliver to the Custodian written instructions as to the method of shipment and shipper(s) the Custodian is to utilize in connection with the transmission of Option Files or Option Documents in the performance of the Custodian’s duties hereunder (which instruction shall include, if requested by the Custodian, billing account numbers maintained by the Customer with such shipper(s) to allow for direct billing of the related charges to Buyer Agent). Buyer Agent shall arrange for the provision of such services at its sole cost and expense (or, at the Custodian’s option, reimburse the Custodian for all costs and expenses incurred by the Custodian consistent with such instructions) and will maintain such insurance against loss or damage to Option Files or other loan documents as the Buyer Agent deems appropriate.
Notwithstanding the foregoing, it is hereby expressly agreed that in the absence of express written instruction from the Buyer Agent pursuant to the preceding terms, shipment may be made by the Custodian in any instance by means of any recognized overnight delivery or shipping service (it being hereby expressly acknowledged that United Parcel Service is one such recognized service, without implied limitation). All costs and risks of shipment shall be borne by Buyer Agent, and it is hereby expressly agreed that in no event shall the Custodian have any liability for any losses or damages to any Person, arising out of actions of the Custodian consistent with the instructions of the Buyer Agent. Any costs of shipment that may be incurred or paid by the Custodian from time to time may be billed by the Custodian to Buyer Agent on a monthly basis and shall be due and payable when billed.
Section 10. Fees of the Custodian. It is understood that the Custodian will charge such fees for its services under this Agreement as are set forth in a separate agreement (the “Fee Schedule”) between the Custodian and Buyer Agent, the payment of which, together with the Custodian’s reasonable expenses (as described below) in connection herewith, shall be solely the obligation of Buyer Agent. The final form of such Fee Schedule (as amended or modified by the parties) shall be binding upon the parties, whether or not such Fee Schedule has been executed by the parties.
Buyer Agent agrees to pay or reimburse to the Custodian upon its request from time to time, any and all reasonable costs, disbursements, expenses and indemnification amounts (including without limitation reasonable fees and expenses of legal counsel) paid or incurred by the Custodian, in connection with (i) the preparation or execution of this Agreement, (ii) the transactions contemplated hereby, (iii) the administration of this Agreement or (iv) the performance by the Custodian of its duties and services under this Agreement, from time to time (including without limitation costs and expenses of any legal or other action deemed necessary by the Custodian to collect any amounts owing to it under this Agreement).
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Any such fees, expenses and indemnification amounts payable pursuant to this Section 10 shall be due and payable within thirty (30) days of request by the Custodian to Buyer Agent.
The obligations of Buyer Agent under this Section 10 and such separate agreement shall survive the termination of this Agreement and the resignation or removal of the Custodian.
Section 11. Resignation or Removal of Custodian; Termination of Agreement.
(a) The Custodian may terminate its obligations under this Agreement upon sixty (60) days’ prior written notice to the Buyer Agent and the Servicer (as defined in the Program Agreement). In the event of such termination,
| (i) | the Buyer Agent shall promptly appoint a successor custodian, by written instrument, in duplicate, which instrument shall be delivered to the Custodian, the Servicer and Sub-servicer (if applicable) and |
| (ii) | the Custodian, promptly upon payment of any unpaid fees, expenses and indemnification amounts due to the Custodian, shall transfer to the successor custodian, as directed, all Option Files being held by the Custodian under this Agreement. |
(b) The Custodian’s sole responsibility after the termination of its obligations as aforesaid shall be to safely maintain all of the Option Files and to deliver the same to a successor custodian; provided, that if a successor custodian has not accepted custodial responsibilities within the period set forth in the first sentence of this Section 11(a), the Custodian may, at the expense of Buyer Agent, either (i) deliver all Option Files to the Buyer Agent, or (ii) petition any court of competent jurisdiction to name a successor custodian. Any and all fees and expenses incurred by the Custodian relating to any such petition shall be paid by the Custodian. The Custodian shall not be responsible for the fees and expenses of any successor custodian. Upon delivery of the Option Files to any successor custodian or to the Buyer Agent as provided in this paragraph, all duties and obligations of the Custodian shall cease and terminate. The payment of all costs and expenses relating to the transfer of the Option Files (including any shipping costs) upon termination shall be the sole responsibility of Buyer Agent.
(c) The Buyer Agent may at any time and with notice to Servicer and Sub-servicer (if applicable), without cause remove and discharge the Custodian from the performance of its duties under this Agreement upon written notice from the Buyer Agent to the Custodian. Such removal shall take effect upon (i) the appointment of a successor custodian by the Buyer Agent, and (ii) delivery of all the Option Files to the successor custodian, which delivery shall be subject to, and shall be made promptly after, payment of the Custodian’s unpaid fees, expenses and indemnification amounts. The payment of such successor custodian’s fees and expenses and all costs and expenses in connection with such transfer shall be the sole responsibility of Buyer Agent. If a successor custodian is not appointed by the Buyer Agent within sixty (60) days (or the Buyer Agent otherwise instructs the Custodian that no successor custodian will be appointed), the Custodian may, at the expense of Buyer Agent, deliver all the Option Files to the Buyer Agent. Upon delivery of the Option Files to the Buyer Agent as provided in this paragraph, all duties and obligations of the Custodian shall cease and terminate. The payment of all costs and expenses relating to the transfer of the Option Files (including any shipping costs) upon termination shall be the sole responsibility of the Buyer Agent.
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(d) This Agreement shall terminate on the date on which the Buyer Agent notifies the Custodian in writing that the Agreement is terminated. Upon the Custodian’s receipt of both such written termination and the payment of any due and unpaid fees, expenses and indemnification amounts, the Custodian shall, within a reasonable time, deliver any remaining Option Files to the Buyer Agent or its designee, as directed by the Buyer Agent and at the Buyer Agent’s expense (including any shipping costs).
Section 12. Representations.
(a) The Buyer Agent hereby represents and warrants to the Custodian that it has the power and authority to enter into and perform its obligations under this Agreement, and it has duly authorized and executed this Agreement so as to constitute its valid and binding obligation.
(b) The Custodian hereby represents and warrants to the Buyer Agent that it has the power and authority to enter into and perform its obligations under this Agreement, and it has duly authorized and executed this Agreement so as to constitute its valid and binding obligations.
Section 13. Notices.
(a) Except as otherwise expressly provided herein, all Proper Instructions, notices or any other communications hereunder shall be in writing and shall be sent (i) certified or registered mail, postage prepaid, (ii) recognized courier or delivery service or (iii) facsimile or electronic mail, to Buyer Agent, PTT or the Custodian at the following address, as applicable (or such other address as either party may designate by written notice to the other party):
If to Buyer Agent, to:
GB HRP, LLC
c/o Glassbridge Enterprises, Inc.
18 East 50th Street
New York, NY 10022
Attention: Daniel Strauss
e-mail: dstrauss@glassbridge.com
With a copy to:
Point Digital Finance, Inc.
444 High St., Fl. 4
Palo Alto, CA 94301
Attention: Chief Executive Officer
Email: CEO@point.com
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If to PTT, to:
Point Titling Trust
c/o Point Digital Finance, Inc.
444 High St., Fl. 4
Palo Alto, CA 94301
Attention: Chief Executive Officer
Email: CEO@point.com
If to the Custodian, to:
U.S. Bank National Association
1719 Otis Way Florence, SC 29501
Attention: Steve Garrett
843-676-8901
Email: steven.garrett@usbank.com
If to the Servicer or Trust Manager, to:
Point Digital Finance, Inc.
444 High St., Fl. 4
Palo Alto, CA 94301
Attention: Chief Executive Officer
Email: CEO@point.com
If to the Sub-servicer, to:
RoundPoint Mortgage Servicing Corporation
5016 Parkway Plaza Boulevard
Charlotte, North Carolina 28217
Attention: Chief Operating Officer
The parties hereto shall copy Buyer Agent on all correspondence exchanged among any such parties in connection with the administration of this Agreement.
Section 14. Concerning the Custodian. The acceptance by the Custodian of its appointment hereunder is expressly subject to the following terms, which shall govern and apply to each of the terms and provisions of this Agreement (whether or not so stated therein or herein).
(a) The Custodian shall have no duties, obligations or responsibilities under this Agreement or with respect to the Option Files or the Option Documents except for such duties, obligations or responsibilities as are expressly and specifically set forth in this Agreement as duties, obligations or responsibilities on its part to be performed, and the duties, obligations and responsibilities of the Custodian shall be determined solely by the express provisions of this Agreement. No implied duties, obligations or responsibilities shall be read into this Agreement against, or on the part of, the Custodian. Any permissive right of the Custodian to take any action hereunder shall not be construed as a duty.
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(b) The Custodian makes no representations as to and shall not be responsible for or required to verify (A) the validity, legality, enforceability, due authorization, effectiveness, recordability, insurability, sufficiency, value, form, substance, or genuineness of any of the documents contained in any Option File or (B) the collectability, validity, transferability, insurability, value, effectiveness, perfection, priority or suitability of any Option File or any document contained therein.
(c) The Custodian shall have no responsibilities or duties with respect to any Option File while such Option File is not in its possession.
(d) The Custodian may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction, statement, certificate, request, waiver, consent, opinion, report, receipt or other paper or document furnished to it in accordance with this Agreement, not only as to its due execution and validity, but also as to the truth and accuracy of any information therein contained, which it in good faith believes to be genuine and signed or presented by the proper person (which in the case of any instruction from or on behalf of the Buyer Agent shall be an Authorized Representative). The Custodian shall be entitled to presume the genuineness and due authority of any signature appearing thereon. The Custodian shall not be bound to make any independent investigation into the facts or matters stated in any such notice, instruction, statement, certificate, request, waiver, consent, opinion, report, receipt or other paper or document, provided, however, that if the form thereof is specifically prescribed by the terms of this Agreement, the Custodian shall examine the same to determine whether it substantially conforms on its face to the requirements set forth herein.
(e) Neither the Custodian nor any of its directors, officers or employees shall be liable to anyone for any error of judgment, or for any act done or step taken or omitted to be taken by it (or any of its directors, officers of employees), or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, unless such action constitutes gross negligence, willful misconduct or bad faith of the Custodian.
(f) The Custodian shall not be liable for any action taken by it in good faith and reasonably believed by it to be within powers conferred upon it, or taken by it pursuant to any direction or instruction received by it in accordance with this Agreement, or omitted to be taken by it by reason of the lack of direction or instruction required hereby for such action.
(g) The Custodian may consult with, and obtain advice from, legal counsel selected in good faith, with respect to any question as to any of the provisions hereof or its duties hereunder, or any matter relating hereto, and the opinion or advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by the Custodian in good faith in accordance with the advice or opinion of such counsel. The reasonable costs and expenses of such advice or opinion shall be reimbursed by Buyer Agent pursuant to Section 10 hereof.
(h) No provision of this Agreement shall require the Custodian to expend or risk its own funds, take any action hereunder (or omit to take any action) or otherwise incur any financial liability in the performance of its duties under this Agreement if it shall have grounds for believing that repayment of such funds or indemnity satisfactory is not assured to it.
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(i) The Custodian may act or exercise its duties or powers hereunder through agents or attorneys, and the Custodian shall not be liable or responsible for the actions or omissions of any such agent or attorney appointed and maintained with due care.
(j) If the Custodian shall request instructions from the Buyer Agent with respect to any act, action or failure to act in connection with this Agreement, the Custodian shall be entitled to refrain from taking such action and continue to refrain from acting unless and until the Custodian shall have received written instructions from the Buyer Agent without incurring any liability therefor to the Buyer Agent, or any other Person.
(k) In no event shall the Custodian or its directors, affiliates, officers, agents and employees be held liable for any lost profits or exemplary, punitive, special, indirect or consequential damages of any kind resulting from any action taken or omitted to be taken by it or them hereunder or in connection herewith even if advised of the possibility of such damages.
(l) The Custodian shall not be deemed to have notice of any fact, claim or demand with respect hereto unless actually known by a Responsible Officer of the Custodian or unless received (and then only to the extent received) in writing by the Custodian in accordance with Section 13 herein and specifically referencing this Agreement. Any other provision of this Agreement to the contrary notwithstanding, the Custodian shall have no notice of and shall not be bound by any of the terms and conditions of any other document or agreement unless the Custodian is a signatory party to that document or agreement.
(m) The Custodian shall not be responsible for the preparation or filing of any reports or returns relating to federal, state or local income taxes with respect to this Agreement, other than in respect of the Custodian’s compensation or for reimbursement of expenses; shall be under no obligation to verify the authenticity of any signature on any of the documents received or examined by it in connection with this Agreement or the authority or capacity of any person to execute or issue such document, except as provided in Section 8 of this Agreement with respect to Authorized Representatives; shall have no duty to ascertain whether or not any cash amount or payment has been received by the Buyer Agent or any third person and shall not be required to perform any cash movement functions in relation to this Agreement; and shall not be required to value or produce a report detailing the value of the Option Files.
(n) Nothing in this Agreement shall be deemed to impose on the Custodian any duty to qualify to do business in any jurisdiction, other than (i) any jurisdiction where any Option File is or may be held by the Custodian from time to time hereunder, and (ii) any jurisdiction where its ownership of property or conduct of business requires such qualification and where failure to qualify could have a material adverse effect on the Custodian or its property or business or on the ability of the Custodian to perform its duties hereunder.
The provisions of this Section 14 shall survive the termination of this Agreement and the resignation or removal of the Custodian.
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Section 15. Force Majeure. In no event shall any party hereto be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, events, circumstances or forces beyond its control, including, without limitation, nationalization, expropriation, currency restrictions, the interruption, disruption or suspension of the normal procedures and practices of any securities market, power, mechanical, communications or other technological failures or interruptions, computer viruses or the like, loss or malfunctions of utilities, communications or computer (software and hardware) services, fires, floods, earthquakes or other natural disasters, civil or military disturbance, acts of war or terrorism, riots, revolution, acts of God, work stoppages, strikes, accidents, national disasters of any kind, nuclear or natural catastrophes, or other similar events or acts; errors by the Buyer Agent (including any Authorized Representative) in its instructions to the Custodian; or changes in applicable law, regulation or orders.
Section 16. Indemnification. Buyer Agent agrees to indemnify and hold harmless the Custodian and its respective directors, officers, employees, agents, designees, successors and assigns from and against any and all liabilities, obligations, damages, penalties, claims, actions, judgments, suits, disbursements, losses, costs and expenses of any kind or nature, including reasonable fees and expenses of legal counsel, court costs and costs of appeal arising from or connected with, the Custodian’s execution and performance of this Agreement, its participation in any transaction contemplated hereby, or the relationship between the Custodian and Buyer Agent created hereby, including but not limited to the claims of any third parties against the Custodian, except to the extent such loss, liability or expense results from the gross negligence, bad faith or willful misconduct on the part of the Custodian. The Custodian shall promptly notify Buyer Agent of any claim for indemnification arising under this Section 16, provided that the Custodian’s failure to provide such notice shall not relieve Buyer Agent of its indemnification obligations hereunder.
The foregoing indemnifications shall survive the termination of this Agreement and the resignation or removal of the Custodian hereunder.
Section 17. Amendments. No amendment or waiver of any provision of this Agreement and no consent to any departure herefrom shall in any event be effective unless the same shall be in writing and signed by the parties hereto. The Custodian shall not be required to execute any amendment that adversely affects its rights, duties, indemnities or immunities hereunder. However, with respect to any change in review procedure, this Agreement may be amended by mutual agreement between the parties hereto in the form of consent via electronic mail. Any such email shall reference this Agreement and shall specify that it is an amendment to the review procedures.
Section 18. Effective Waiver. In no instance shall any delay or failure to act be deemed to be or effective as a waiver by any party of any right, power or term hereunder, unless and except to the extent such waiver is set forth in an expressly written instrument signed by the party against whom it is to be charged.
Section 19. Severability. If any one or more of the provisions contained in this Agreement should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.
Section 20. Binding Effect; Governing Law. This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement shall be construed in accordance with, and governed by the law of the State of New York, without giving effect to the conflict of law principles thereof.
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Section 21. Successors and Assigns; Third Party Benefit.
(a) The covenants and agreements set forth herein shall be binding upon and inure to the benefit of each of the parties and their respective successors and permitted assigns. No party shall be permitted to assign their rights under this Agreement without the written consent of the other parties.
(b) Any Person into which the Custodian may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Custodian shall be a party, or any Person to which all or substantially all of the corporate trust business of the Custodian may be sold or otherwise transferred, shall without the execution or filing of any paper or further act on the part of any parties hereto become the successor Custodian hereunder (including, without the prior written consent of the Buyer Agent).
(c) This Agreement is not intended for, and shall not be construed to be intended for, the benefit of any third parties and may not be relied upon or enforced by any third parties (other than successors and permitted assigns pursuant to this Section 21.
Section 22. Entire Agreement; Counterparts. This Agreement, together with the exhibits, schedules and other writings referred to herein or delivered pursuant hereto, constitutes the entire agreement and understanding of the parties with respect to the matters and transactions contemplated by this Agreement and supersedes any prior agreement and understandings with respect to those matters and transactions. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement (and by facsimile or pdf transmission, which facsimile or pdf transmission signatures shall be considered original executed counterparts).
Section 23. Other Business. Nothing herein shall prevent the Custodian or any of its Affiliates from engaging in other business, or from entering into any other transaction or financial or other relationship with, or receiving fees from or from rendering services of any kind to the Buyer Agent or any other Person. Nothing contained in this Agreement shall constitute the Buyer Agent and/or the Custodian (and/or any other Person) as members of any partnership, joint venture, association, syndicate, unincorporated business or similar assignment as a result of or by virtue of the engagement or relationship established by this Agreement.
Section 24. Reproduction of Documents. This Agreement and all schedules, exhibits, attachments and amendment hereto may be reproduced by any electronic, photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further production shall likewise be admissible in evidence.
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Section 25. Confidentiality. The parties hereto agree that they and their advisors, including legal counsel, shall not disclose to any other Person and shall keep confidential the terms and conditions of this Agreement (including fee arrangements) and any amendment, supplement, Schedule or Exhibit hereto (“Confidential Information”). In the event that any party hereto or its advisors breaches any provision of this section, then, in addition to any other rights and remedies available to the non-breaching party, a non-breaching party shall be entitled to temporary and permanent injunctive relief against the breaching party without the necessity of proving actual damages. Notwithstanding the foregoing, Confidential Information may be disclosed by a party to the extent that (i) such party reasonably deems necessary to do so in working with taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable laws, (ii) any portion of the Confidential Information is required by law or requested by judicial or regulatory or supervisory process to be disclosed, or (iii) such disclosure is necessary to establish, make effective or enforce the Buyer Agent’s rights in Option Assets contained in the related Option File held by the Custodian pursuant to this Agreement.
Section 26. Actions Necessary to Preserve Rights under Option Documents. Notwithstanding the delivery of Option Files to the Custodian, the Buyer Agent acknowledges that the Custodian shall have no obligation to (i) enforce any Option Document, (ii) take action to preserve or maintain the obligations of any party obligated under any Option Document, (iii) take action to protect, preserve or safeguard the rights of the Buyer Agent against any Person under the Option Documents, or (iv) take action to obtain, preserve, safeguard, continue, perpetuate or enforce rights against any collateral which may secure any obligation under any Option Document. The Buyer Agent hereby expressly releases the Custodian from the obligation to take any such action.
Section 27. SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE COMPANY AND THE CUSTODIAN HEREBY IRREVOCABLY AND UNCONDITIONALLY:
| A. | SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; |
| B. | CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; |
| C. | AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 13 HEREIN OR AT SUCH OTHER ADDRESS OF WHICH EACH OTHER PARTY HERETO SHALL HAVE BEEN NOTIFIED IN WRITING; |
| 16 |
| D. | AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND |
| E. | WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. |
Section 28. Compliance with Applicable Law. (a) In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of terrorist activities and money laundering (“Applicable Law”), the Custodian is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Custodian. Accordingly, the Buyer Agent agrees to provide to the Custodian upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Custodian to comply with Applicable Law.
(a) The Buyer Agent hereby acknowledges receipt of the following notice:
“IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity, the Custodian will ask for documentation to verify its formation and existence as a legal entity. The Custodian may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.”
Section 29. Concerning the UTI Trustee. The parties hereto are put on notice and hereby acknowledge and agree that (a) this Agreement is executed and delivered on behalf of PTT by Wilmington Savings Fund Society, FSB (“WSFS”), as UTI Trustee of PTT, not individually or personally but solely as trustee of PTT, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of PTT is made and intended not as a personal representation, undertaking or agreement of WSFS but is made and intended for the purpose of binding PTT, (c) nothing herein contained shall be construed as creating any liability on WSFS, individually or personally, to perform any covenant either expressed or implied contained herein of PTT, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (d) WSFS has made no investigation as to the accuracy or completeness of any representations and warranties made by PTT in this Agreement, and (e) under no circumstances shall WSFS be personally liable for the payment of any indebtedness or expenses of PTT or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by PTT under this Agreement or any other related document.
[SIGNATURES APPEAR ON NEXT PAGE.]
| 17 |
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date and year first above written.
| GB HRP, LLC, as Buyer Agent | ||
| By: | /s/ Daniel Strauss | |
| Name: | Daniel Strauss | |
| Title: | President | |
| Point Titling Trust, a Delaware statutory trust | ||
| By: | Wilmington Savings Fund Society, | |
| FSB, not in its individual capacity | ||
| but solely as UTI Trustee | ||
| By: | /s/ Mary Emily Pagano | |
| Name: | Mary Emily Pagano | |
| Title: | Vice President |
POINT DIGITAL FINANCE, INC., as Trust Manager of Point Titling Trust | ||
| By: | /s/ Eddie Lim | |
| Name: | Eddie Lim | |
| Title: | CEO | |
| U.S. BANK NATIONAL ASSOCIATION, as Custodian | ||
| By: | /s/ Kenneth Brandt | |
| Name: | Kenneth Brandt | |
| Title: | Vice President | |
[Signature Page to Custodial Agreement]
SCHEDULE I
OPTION DOCUMENTS
1. Certified copies, stamped and signed by Point Digital Finance, Inc (“Point”) of fully executed Option Purchase Agreement, between the Homeowner(s) and Point (and signed in the name of the Seller by an officer thereof) or as an Electronic Custodial Document;
2. Certified copies, stamped and signed by Point of fully executed Deed of Trust or Mortgage (the “Security Instrument”) and Memorandum of Point Option Purchase Agreement (the “Recorded Memorandum”), with evidence of recording thereon, or if any such instrument has not been returned from the applicable recording office or has been lost, or if such public recording office retains the original recorded document, a photocopy of such Security Instrument or Recorded Memorandum, as applicable, certified by the Seller to be a true and complete copy of the original recorded instrument or as an Electronic Custodial Document;
3. Certified copies, stamped and signed by Point of an original of any other security agreement, chattel mortgage or equivalent document executed in connection with the Option, fully executed or as an Electronic Custodial Document;
4. Photocopies of original, fully executed Consent of Spouse, if applicable or as an Electronic Custodial Document;
5. If applicable, certified copies, stamped and signed by Point of originals of all assumption, modification, consolidation or extension agreements, if any, fully executed, with evidence of recording thereon or as an Electronic Custodial Document;
6. Certified copies, stamped and signed by Point of an original, fully executed Assignment of Deed of Trust and Memorandum or Assignment of Mortgage and Memorandum (the “Assignment”), with evidence of recording thereon, or if any such instrument has not been returned from the applicable recording office or has been lost, or if such public recording office retains the original recorded document, a photocopy of such Assignment, as applicable, certified by the Seller to be a true and complete copy of the original recorded Assignment or as an Electronic Custodial Document; and
7. Certified copies, stamped and signed by Point of an original, fully executed Notice(s) of Right to Cancel or as an Electronic Custodial Document.
Any statement clarified by “if any” or “if applicable” shall only refer to whether or not such item is present in the Option File when delivered to the Custodian. The Custodian shall have no duty or obligation to determine if such item should have been included.
In the event that any item is to be identified to the Custodian on the Option Asset Schedule, if the Option Asset Schedule does not list such item, the Custodian may conclusively assume that no such document is applicable.
| Schedule I-1 |
SCHEDULE II
Recommended Data File Criteria
Recommended Data File Criteria:
Each of the items listed below must be in its own cell within either a CSV or Excel spreadsheet.
Data files should be sent electronically via email to your collateral review specialist at U.S. Bank National Association.
| ● | Asset Number |
| ● | Asset Name |
| ● | Servicing Account Number |
| ● | |
| ● | |
| ● | |
| ● | |
| ● |
| Schedule II-1 |
EXHIBIT A
FORM OF CUSTODIAN CERTIFICATION
[Date]
GB HRP, LLC
c/o Glassbridge Enterprises, Inc.
18 East 50th Street
New York, NY 10022
Attention: Daniel Strauss
e-mail: dstrauss@glassbridge.com
Re: Custodial Agreement, dated as of December 29, 2023 (as amended or modified from time to time, the “Agreement”), among GB HRP, LLC (the “Buyer Agent”), Point Titling Trust (“PTT”), Point Digital Finance, Inc. (“Trust Manager”) and U.S. Bank National Association, as custodian (the “Custodian”)
Ladies and Gentlemen:
In accordance with the provisions of Section 3(b) of the above-referenced Agreement, the undersigned, as Custodian, hereby certifies and confirms that with respect to each of the Option Assets listed on the Option Asset Schedule annexed hereto as Schedule I, except as noted on the Exception Report attached hereto as Exhibit 1;
| (i) | all documents required to be delivered to the Custodian pursuant to Section 3 and Section 5 of the Agreement are in the Custodian’s possession; and |
| (ii) | all Option Documents contained in the Option File related to each such Option Asset have been reviewed by the Custodian and appear regular on their face and relate to such applicable Option File. |
The Custodian shall have no liability for or obligation with respect to, and shall not be construed or obliged to make any representation or warranty as to: (i) the validity, sufficiency, marketability, genuineness, value, contents or enforceability of any Option Document; (ii) the validity, adequacy or perfection of any lien upon or security interest purported to be evidenced or created thereby; or (iii) to determine that the contents of any Option Document are appropriate for the represented purpose or that any Option Document has actually been recorded or filed, as may be applicable, or that any Option Document is other than what it purports on its face to be.
| U.S. BANK NATIONAL ASSOCIATION, | ||
| as Custodian | ||
| By: | ||
| Name: | ||
| Title: | ||
| Exhibit A-1 |
SCHEDULE I
to Custodian Certification
OPTION ASSET SCHEDULE
| Exhibit A-2 |
EXHIBIT 1
to Custodian Certification
EXCEPTION REPORT
| Exhibit A-3 |
EXHIBIT B
AUTHORIZED REPRESENTATIVES
Any of the following persons shall be an Authorized Representative (as this list may be subsequently modified by the Buyer Agent from time to time by delivery of a replacement list to the Custodian):
Authorized Representatives of the Buyer Agent
| NAME | TITLE | SPECIMEN SIGNATURE | ||
| Daniel Strauss | President | /s/ Daniel Strauss | ||
| Francis Ruchalski | Chief Financial Officer | /s/ Francis Ruchalski | ||
| Daiana Sersea | /s/ Daiana Sersea |
| Exhibit B-1 |
EXHIBIT C
FORM OF REQUEST FOR RELEASE
(attached)
| Exhibit C-1 |
 |
Request for Release of Documents |
U.S. Bank Global Corporate Trust Services [Address]
|
Attention: Document Custody Services Receiving Unit Email: dcsflorencesreleases@usbank.com Fax: ___________ |
| RE: | Custodial Agreement, dated as of December 29, 2023 (as amended or modified from time to time, the “Agreement”), among GB HRP, LLC (the “Buyer Agent”), Point Titling Trust (“PTT”), Point Digital Finance, Inc. (“Trust Manager”) and U.S. Bank National Association, as custodian (the “Custodian”) |
Pursuant to Section 6 of the Custodial Agreement, we request the release of the Option Files relating to the Option Assets listed on the attached Excel spreadsheet for the reason indicated below:
Reason for Requesting Documents (Check One):
| 1) Option Asset Paid in Full | |
| 2) Option Asset in Foreclosure | |
| 3) Option Asset being Substituted | |
| 4) Option Asset being Liquidated by Buyer Agent | |
| 5) Other- Description Needed Below |
| Buyer Agent: | |
| Authorized Representative: | |
| Name (Printed): | |
| Title (Printed): | |
| Date: | |
| Phone: |
| File Delivery Instructions – Address Needed |
|
|
Upon Completion of Request, for Release, please scan and email the request to the appropriate DCS Vault Location.
If applicable, please indicate if the request is a “Rush” in the subject line. Please fax the form if you do not have access to email.
| Florence: | dcsflorencescreleases@usbank.com |
| Frederick: | electronic.release.requests@usbank.com |
| Jacksonville: | dcsctsjacksonville.requests@usbank.com |
| Saint Paul: | dcs@usbank.com |
| St. Petersburg: | documentcustody.stpete@usbank.com |
| Rocklin: | dcs-rocklin@usbank.com |
| Tempe: | tempe.dcs.request@usbank.com |
| Exhibit C-2 |
Exhibit 10.5
EXECUTION COPY
POINT
DIGITAL FINANCE, INC.,
as Transferor,
and
GB
HRP, LLC,
as Transferee
SUBI CERTIFICATE TRANSFER AGREEMENT
Dated as of December 29, 2023
| TABLE OF CONTENTS | ||
| Page | ||
| ARTICLE One DEFINITIONS | 1 | |
| Section 1.01. | Definitions | 1 |
| Section 1.02. | Interpretive Provisions | 2 |
| ARTICLE Two TRANSFER OF THE INVESTOR SUBI CERTIFICATE | 2 | |
| Section 2.01. | Transfer of the Investor SUBI Certificate | 2 |
| Section 2.02. | True Sale | 3 |
| Section 2.03. | Representations and Warranties of the Transferor and the Transferee. | 3 |
| Section 2.04. | Financing Statement and Books and Records. | 6 |
| Section 2.05. | Acceptance by the Transferee | 6 |
| ARTICLE Three MISCELLANEOUS | 7 | |
| Section 3.01. | Amendment | 7 |
| Section 3.02. | Governing Law | 7 |
| Section 3.03. | Severability | 7 |
| Section 3.04. | Binding Effect | 7 |
| Section 3.05. | Headings | 7 |
| Section 3.06. | Counterparts; Facsimile and Electronic Signatures | 7 |
| Section 3.07. | Further Assurances | 7 |
| Section 3.08. | Third-Party Beneficiaries | 8 |
| Section 3.09. | No Petition | 8 |
| Section 3.10. | No Recourse | 8 |
| SCHEDULES | ||
| Schedule I | Perfection Representations, Warranties and Covenants | I-1 |
| i |
SUBI CERTIFICATE TRANSFER AGREEMENT
This SUBI Certificate Transfer Agreement, dated as of December 29, 2023 (this “Agreement”), is between Point Digital Finance, Inc., a Delaware corporation (“Point”), as transferor (the “Transferor”), and GB HRP, LLC, a Delaware limited liability company, as transferee (in such capacity, the “Transferee”).
RECITALS
WHEREAS, Point, as settlor, depositor (in such capacity, the “Depositor”), trust manager (in such capacity, the “Trust Manager”) and holder of the UTI, and Wilmington Savings Fund Society, FSB, as UTI Trustee (in such capacity, the “UTI Trustee”), have entered into that certain amended and restated trust agreement, dated as of July 14, 2023 (the “Titling Trust Agreement”), pursuant to which Point Titling Trust, a Delaware statutory trust (“PTT”) was created to take assignments and conveyances of and hold in trust various assets (the “Trust Assets”);
WHEREAS, the parties to the Titling Trust Agreement supplemented the Titling Trust Agreement with a supplement, titled the “Point Titling Trust, GB – GB HRP, LLC Transaction SUBI Supplement to Titling Trust Agreement”, dated as of December 29, 2023 (together with the Titling Trust Agreement, the “SUBI Trust Agreement”), to establish one special unit of beneficial interest (the “Investor SUBI”);
WHEREAS, in connection with the SUBI Trust Agreement, a separate portfolio of residential real estate options and certain other related assets of the Titling Trust will be allocated to the Investor SUBI;
WHEREAS, the Titling Trust has issued to Point, as settlor and holder of the UTI, a certificate evidencing a beneficial interest in the Investor SUBI (the “Investor SUBI Certificate”); and
WHEREAS, the Transferor and the Transferee desire to enter into this Agreement to provide for the sale, transfer and assignment by the Transferor to the Transferee, without recourse, of all of the Transferor’s right, title and interest in and to the Investor SUBI Certificate and the interest in the Investor SUBI represented thereby.
NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE
One
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the SUBI Trust Agreement or the Master Option Sale Agreement, dated as of December 29, 2023 (as amended or modified from time to time) (the “Purchase Agreement”), among Point, as seller, depositor and trust manager, PTT, as the buyer, and GB HRP, LLC, as the buyer agent, as the case may be. Whenever used herein, unless the context otherwise requires, the following words and phrases shall have the following meanings:
“Agreement” means this SUBI Certificate Transfer Agreement, as amended or supplemented from time to time.
“Assets” has the meaning set forth in Section 2.01.
“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. 101 et seq., as amended.
“Closing Date” means December 29, 2023.
“Transfer Price” has the meaning set forth in Section 2.01.
Section 1.02. Interpretive Provisions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (i) terms used in this Agreement include, as appropriate, all genders and the plural as well as the singular, (ii) references to words such as “herein,” “hereof” and the like shall refer to this Agreement as a whole and not to any particular part, Article or Section within this Agreement, (iii) the term “include” and all variations thereof shall mean “include without limitation” and (iv) the term “proceeds” shall have the meaning ascribed thereto in the UCC.
ARTICLE
Two
TRANSFER OF THE INVESTOR SUBI CERTIFICATE
Section 2.01. Transfer of the Investor SUBI Certificate. In consideration of the Transferee’s commitment to pay the related purchase price to fund the Titling Trust’s purchase of Eligible Options at the Buyer Agent’s direction from time to time under Article 2 of the Purchase Agreement (the “Transfer Price”), the Transferor does hereby absolutely sell, transfer, assign, and otherwise convey to the Transferee, without recourse, and the Transferee does hereby purchase and acquire, as of the date set forth above, all of the following (collectively, the “Assets”):
(i) all right, title and interest in and to the Investor SUBI Certificate and the interest in the Investor SUBI represented thereby, including all monies due and paid thereon or in respect thereof;
(ii) the beneficial rights evidenced thereby in any property that underlies or may be deemed to secure the interest in the Investor SUBI represented by the Investor SUBI Certificate;
(iii) all of the Transferor’s rights and benefits, as initial holder of the Investor SUBI Certificate, under the SUBI Trust Agreement; and
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(iv) all proceeds of the foregoing.
Section 2.02. True Sale. The parties hereto intend that the sale, transfer and assignment of the Assets constitute a true sale and assignment of the Assets such that any interest in and title to the Assets would not be property of the Transferor’s estate in the event the Transferor becomes a debtor in a case under any bankruptcy law. To the extent that the conveyance of the Assets hereunder is characterized by a court or similar governmental authority as a financing, it is intended by the Transferor and the Transferee that the interest conveyed constitutes a first priority grant of a perfected security interest under the UCC as in effect in the State of New York by the Transferor to the Transferee to secure the security obligations of the Transferor under the Program Documents (as defined in the Purchase Agreement). The Transferor does hereby grant to the Transferee a security interest in all of its rights, title and privileges and interest in and to the Assets and the parties hereto agree that this Agreement constitutes a “security agreement” under all applicable law.
Section 2.03. Representations and Warranties of the Transferor and the Transferee.
(a) The Transferor hereby represents and warrants to the Transferee as of the date of this Agreement that:
(i) Organization and Good Standing. The Transferor is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware, and has power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and shall have, power, authority and legal right to acquire, own and sell the Assets.
(ii) Due Qualification. The Transferor is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications, except where the failure to have any such license, approval or qualification would not have a material adverse effect on the condition, financial or otherwise, of the Transferor or would not have a material adverse effect on the ability of the Transferor to perform its obligations under this Agreement.
(iii) Power and Authority. The Transferor shall have the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement shall have been duly authorized by the Transferor by all necessary corporate action.
(iv) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Transferor, enforceable against it in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or at law.
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(v) No Violation. The execution, delivery and performance by the Transferor of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of incorporation of the Transferor, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the Transferor is a party or by which it may be bound or any of its properties are subject; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any material indenture, agreement or other instrument (other than this Agreement); nor violate any law or, to the knowledge of the Transferor, any order, rule or regulation applicable to it or its properties of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Transferor or any of its properties.
(vi) No Proceedings. There are no proceedings or investigations pending or, to the knowledge of the Transferor, threatened against the Transferor, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (A) asserting the invalidity of this Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (C) seeking any determination or ruling that, in the reasonable judgment of the Transferor, would materially and adversely affect the performance by the Transferor of its obligations under this Agreement.
(vii) Title to Investor SUBI Certificate. Immediately prior to the transfer of the Investor SUBI Certificate pursuant to this Agreement, the Transferor (A) is the true and lawful owner of the Investor SUBI Certificate and it has the legal right to transfer the Investor SUBI Certificate; (B) has good and valid title to the Investor SUBI Certificate and the Investor SUBI Certificate is on the date hereof free and clear of all liens; and (C) will convey good, valid and indefeasible title to the Investor SUBI Certificate to the Transferee under this Agreement.
(b) Perfection Representations. The representations, warranties and covenants set forth on Schedule I hereto shall be a part of this Agreement for all purposes. Notwithstanding any other provision of this Agreement or any other Basic Document, the perfection representations contained in Schedule I shall be continuing, and remain in full force and effect until such time as all obligations under the Indenture have been finally and fully paid and performed. The parties to this Agreement: (i) shall not waive any of the perfection representations contained in Schedule I; (ii) shall provide prompt written notice to the Trust Manager of any breach of the perfection representations contained in Schedule I hereto; and (iii) shall not waive a breach of any of the perfection representations contained in Schedule I.
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(c) The Transferee hereby represents and warrants to the Transferor as of the date of this Agreement that:
(i) Organization and Good Standing. The Transferee is a Delaware limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware, and has power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and shall have, power, authority and legal right to acquire, own and sell the Assets.
(ii) Due Qualification. The Transferee is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications, except where the failure to have any such license, approval or qualification would not have a material adverse effect on the condition, financial or otherwise, of the Transferee or would not have a material adverse effect on the ability of the Transferee to perform its obligations under this Agreement.
(iii) Power and Authority. The Transferee shall have the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement shall have been duly authorized by the Transferee by all necessary corporate action.
(iv) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Transferee, enforceable against it in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or at law.
(v) No Violation. The execution, delivery and performance of this Agreement by the Transferee and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, its operating agreement, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the Transferee is a party or by which it may be bound or any of its properties are subject; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any material indenture, agreement or other instrument (other than this Agreement); nor violate any law or, to the knowledge of the Transferee, any order, rule or regulation applicable to it or its properties of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Transferee or any of its properties.
(vi) No Proceedings. There are no proceedings or investigations pending or, to the knowledge of the Transferee, threatened against the Transferee, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (A) asserting the invalidity of this Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (C) seeking any determination or ruling that, in the reasonable judgment of the Transferee, would materially and adversely affect the performance by the Transferee of its obligations under this Agreement.
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(d) The representations and warranties set forth in this Section shall survive the sale of the Assets by the Transferor to the Transferee. Upon discovery by the Transferor or the Transferee of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the others.
Section 2.04. Financing Statement and Books and Records.
(a) In connection with the conveyance of the Assets hereunder, the Transferor agrees that on the Closing Date, it will file, at its own expense, one or more financing statements with respect to the Assets meeting the requirements of applicable state law in such manner as necessary to perfect the sale of the Assets to the Transferee and the proceeds thereof (and any continuation statements as are required by applicable state law), and will deliver a file-stamped copy of each such financing statement (or continuation statement) or other evidence of such filings (which may, for purposes of this Section, consist of telephone confirmation of such filings with the file stamped copy of each such filings to be provided to the Transferee in due course) to the Transferee, as soon as is practicable after receipt by the Transferor thereof.
(b) The Transferor further agrees that it will treat the transfer of the Assets as a sale for accounting purposes, take no actions inconsistent with the Transferee’s ownership of the Assets, and on or prior to the Closing Date indicate on its books, records and statements that the Assets have been sold to the Transferee.
(c) If the Transferor makes any change in its jurisdiction of organization (within the meaning of the applicable UCC), name or corporate structure that would make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the applicable provisions of the UCC or any title statute, the Transferor shall give the Transferee written notice thereof at least thirty (30) days prior to such change and shall promptly file any financing statements or amendments as may be necessary to continue the perfection of the Transferor’s interest in the Assets.
Section 2.05. Acceptance by the Transferee. The Transferee agrees to comply with all covenants and restrictions applicable to a holder of the Investor SUBI Certificate and the interest in the Investor SUBI represented thereby, whether set forth in the Investor SUBI Certificate, in the SUBI Trust Agreement or otherwise, and assumes all obligations and liabilities, if any, associated therewith.
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ARTICLE
Three
MISCELLANEOUS
Section 3.01. Amendment. This Agreement may be amended from time to time in a writing signed by the parties hereto.
Section 3.02. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to any otherwise applicable principles of conflicts of laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).
Section 3.03. Severability. If one or more of the covenants, agreements or provisions of this Agreement shall be for any reason whatever held invalid or unenforceable, such provisions shall be deemed severable from the remaining covenants, agreements and provisions of this Agreement, and such invalidity or unenforceability shall in no way affect the validity or enforceability of such remaining covenants, agreements and provisions, or the rights of any parties hereto. To the extent permitted by law, the parties hereto waive any provision of law that renders any provision of this Agreement invalid or unenforceable in any respect.
Section 3.04. Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their permitted successors and assigns.
Section 3.05. Headings. The Article and Section headings are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 3.06. Counterparts; Facsimile and Electronic Signatures. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument. The words “execution,” signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
Section 3.07. Further Assurances. Each party hereto shall do such acts, and execute and deliver to the other party such additional documents or instruments as may be reasonably requested in order to effect the purposes of this Agreement and to better assure and confirm unto the requesting party its rights, powers and remedies hereunder.
| 7 |
Section 3.08. Third-Party Beneficiaries. Except as otherwise provided in this Agreement, no Person shall have any right or obligation hereunder.
Section 3.09. No Petition. Each of the parties hereto covenants and agrees that prior to the date that is one year and one day after the date upon which all obligations and payments under any financing of the Investor SUBI by the Transferee have been paid in full, it will not institute against, or join any Person in instituting against the holder of the UTI, the UTI Trustee, the SUBI Trustee, the Titling Trust, any special-purpose affiliate (and the general partner of any special-purpose affiliate that is a partnership, or the managing member of any special-purpose affiliate that is a limited liability company) that holds a beneficial interest in the Titling Trust, the Transferor, the Transferee or any Affiliate or beneficiary of the same, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or other proceedings under any United States federal or state bankruptcy or similar law.
Section 3.10. No Recourse. Notwithstanding anything to the contrary contained in this Agreement, the obligations of the Transferor under this Agreement are non-recourse obligations of the Transferor, and shall be payable by the Transferor, solely from the proceeds of the Investor SUBI Certificate, but only to the extent of any interest of the Transferor therein. No amount owing by the Transferor hereunder in excess of the liabilities that it is required to pay in accordance with the preceding sentence shall constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against it. In the event that, notwithstanding the foregoing, the Transferee is deemed to have any interest in any Trust Assets or Other SUBI Assets that may be acquired by the Transferor from time to time, the Transferee agrees to fully subordinate all claims it may be deemed to have against the Trust Assets allocated to the UTI Portfolio and each other SUBI Portfolio. The agreement set forth in the preceding sentence shall constitute a subordination agreement for purposes of Section 510(a) of the Bankruptcy Code. No recourse shall be had for the payment of any amount owing hereunder or for the payment of any fee hereunder or any other obligation of, or claim against, the Transferor arising out of or based upon this Agreement, against any stockholder, employee, officer, agent, director or authorized person of the Transferor or Affiliate thereof; provided, however, that the foregoing shall not relieve any such person or entity of any liability they might otherwise have as a result of fraudulent actions or omissions taken by them.
[SIGNATURE PAGE FOLLOWS]
| 8 |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers duly authorized as of the day and year first above written.
POINT DIGITAL FINANCE, INC., as Transferor | ||
| By: | /s/ Eddie Lim | |
| Name: | Eddie Lim | |
| Title: | CEO | |
| GB HRP, LLC, | ||
| as Transferee | ||
| By: | /s/ Daniel Strauss | |
| Name: | Daniel Strauss | |
| Title: | President | |
[Signature Page to SUBI Certificate Transfer Agreement (GB - GB HRP, LLC)]
Schedule I
Perfection Representations, Warranties and Covenants
In addition to the representations, warranties and covenants contained in the SUBI Certificate Transfer Agreement, Point Digital Finance, Inc., as transferor (the “Transferor”), hereby represents, warrants, and covenants to GB HRP, LLC, as transferee (the “Transferee”), as follows on the Closing Date:
1. The SUBI Certificate Transfer Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Investor SUBI Certificate in favor of the Transferee, which security interest is prior to all other liens and is enforceable as such as against creditors of and purchasers from the Transferor.
2. The Investor SUBI Certificate constitutes a “general intangible,” “instrument,” “certificated security,” or “tangible chattel paper,” within the meaning of the applicable UCC.
3. The Transferor owns and has good and marketable title to the Investor SUBI Certificate free and clear of any liens, claim or encumbrance of any Person, excepting only liens for taxes, assessments or similar governmental charges or levies incurred in the ordinary course of business that are not yet due and payable or as to which any applicable grace period shall not have expired, or that are being contested in good faith by proper proceedings and for which adequate reserves have been established, but only so long as foreclosure with respect to such a lien is not imminent and the use and value of the property to which the lien attaches is not impaired during the pendency of such proceeding.
4. The Transferor has received all consents and approvals to the sale of the Investor SUBI Certificate under the SUBI Certificate Transfer Agreement to the Transferee required by the terms of the Investor SUBI Certificate to the extent that it constitutes an instrument or a payment intangible.
5. The Transferor has received all consents and approvals required by the terms of the Investor SUBI Certificate, to the extent that it constitutes a securities entitlement, certificated security or uncertificated security, to the transfer to the Transferee of its interest and rights in the Investor SUBI Certificate under the SUBI Certificate Transfer Agreement.
6. The Transferor has caused or will have caused, within ten days after the effective date of the SUBI Certificate Transfer Agreement, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the sale of the Investor SUBI Certificate from the Transferor to the Transferee and the security interest in the Investor SUBI Certificate granted under the SUBI Certificate Transfer Agreement.
7. To the extent that the Investor SUBI Certificate constitutes an instrument or tangible chattel paper, all original executed copies of each such instrument or tangible chattel paper have been delivered to the Transferee.
| I-1 |
Cover |
Dec. 29, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Dec. 29, 2023 |
| Entity File Number | 001-14310 |
| Entity Registrant Name | GLASSBRIDGE ENTERPRISES, INC. |
| Entity Central Index Key | 0001014111 |
| Entity Tax Identification Number | 41-1838504 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 18 East 50th Street, FL7 |
| Entity Address, City or Town | New York |
| Entity Address, State or Province | NY |
| Entity Address, Postal Zip Code | 10022 |
| City Area Code | (212) |
| Local Phone Number | 220-3300 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
1 Year GlassBridge Enterprises (CE) Chart |
1 Month GlassBridge Enterprises (CE) Chart |
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