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EXHIBIT 10.7 AGREEMENT
THIS AGREEMENT is entered into by and between Carolina Investors, Inc.
("CII") and [ NAME ] ("[ NAME ]").
RECITALS
1. [ NAME ] is in the business of making home equity loans
and providing credit underwriting to residents of [_____] and such other states
as the parties may agree to from time to time, secured by first and second
residential mortgages.
2. CII is willing to provide funds with which certain loans
originated by [ NAME ] ("Qualified Mortgages") may be closed and funded,
with each such loan to be immediately assigned to CII at closing, in
consideration of the funds so advanced by CII.
3. CII will attempt to package and sell blocks of Qualified
Mortgages and/or securitize them. [CONFIDENTIAL PORTION DELETED]
AGREEMENT
1. Funding of Loans; Expansion Opportunities. During the term
of this Agreement, [ NAME ] will submit Loan Approval Information and
Funding Requests to CII substantially in the form of the attached Exhibits A1
and A2 with respect to Qualified Mortgages. [ NAME ] will be obligated to
sell and CII will be obligated to purchase all "Qualified Mortgages" which meet
the Underwriting Criteria on the attached Exhibit B. Each such Funding Request
will be submitted not less than two (2) days prior to the proposed closing date
or funding date, whichever applies, of such Qualified Mortgage.
a. For purposes of this Agreement, the term "Qualified Mortgage"
means a first or second mortgage home loan which is made by
[ NAME ] and closed by [ NAME ]'s Closing Agent in
compliance with all applicable federal, state and local
statutes, rules and regulations and which meets the
underwriting criteria of this Agreement set forth on Exhibit
B, as such underwriting criteria may be modified from time to
time by CII to satisfy market requirements or as otherwise
agreed to by the parties. CII shall be entitled to audit
[ NAME ]'s credit underwriting standards and practices on
a monthly basis upon fifteen (15) day prior written notice.
b. Upon CII's approval of a Funding Request for a Qualified
Mortgage, [ NAME ] shall retain an approved attorney or
title company ("Closing Agent"), listed on the attached
Exhibit C (such list of approved attorneys or title companies
may be amended and supplemented from time to time by mutual
agreement of the parties) to close such Qualified Mortgage
and shall direct such Closing Agent as follows:
(i) [CONFIDENTIAL PORTION DELETED]
(ii) [CONFIDENTIAL PORTION DELETED]
(iii) [CONFIDENTIAL PORTION DELETED]
(iv) [CONFIDENTIAL PORTION DELETED]
(v) [CONFIDENTIAL PORTION DELETED]
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(vi) [CONFIDENTIAL PORTION DELETED]
(vii) [CONFIDENTIAL PORTION DELETED]
c. Expansion Into Additional Geographic Areas.
(i) [CONFIDENTIAL PORTION DELETED]
(ii) [CONFIDENTIAL PORTION DELETED]
(iii) [CONFIDENTIAL PORTION DELETED]
(iv) [CONFIDENTIAL PORTION DELETED]
(v) [CONFIDENTIAL PORTION DELETED
2. Sale of Loans. CII will package blocks of Qualified Mortgages and
sell them to institutional buyers on a monthly basis or securitize them.
[CONFIDENTIAL PORTION DELETED]
a. [CONFIDENTIAL PORTION DELETED
b. [CONFIDENTIAL PORTION DELETED]
c. [CONFIDENTIAL PORTION DELETED]
2.1 Securitization of Loans. If the Qualified Mortgages are
securitized by CII (CII will give notice to [ NAME ] prior to the delivery
of a block of loans), then [CONFIDENTIAL PORTION DELETED]
2.2 Unsold Blocks of Qualified Mortgages. In the event that CII
chooses not to sell a block of Qualified Mortgages pursuant to 2. above, but
instead wishes to hold such block as part of its own portfolio, then
[CONFIDENTIAL PORTION DELETED]
a. [CONFIDENTIAL PORTION DELETED]
3. Representations and Warranties.
a. CII hereby represents and warrants as follows:
(i) CII is a corporation duly organized, validly existing and in
good standing under the laws of South Carolina and is
qualified to do business in each other jurisdiction in which
such qualification is required or where CII maintains an
office or does substantial business.
(ii) All corporate actions required to be taken by or on behalf of
CII to authorize its execution of this Agreement and the
performance of its obligations hereunder have been fully and
properly taken. The execution and consummation of this
Agreement and the transactions contemplated hereby do not and
will not violate any corporate charter, bylaw, contract,
indenture, agreement, covenant or understanding by which CII
is bound or to which is a party, or any applicable law or
regulation; or require the consent of any governmental
authority (unless such consent has been obtained).
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(iii) CII is in compliance with all applicable laws and
regulations. There are no actions, suits or proceedings
pending, or, to the knowledge of CII, threatened against CII
in any court or before any administrative or regulatory
agency the adverse outcome of which CII would have a material
adverse effect on the assets and business of CII.
(iv) CII will provide accounting and computer services to [ NAME
] for the term of this Agreement and at a monthly fee
agreeable to by both parties.
(v) CII will not preclude [ NAME ] from geographic expansion
to other states, except as provided in section 3. b. (viii).
(vi) CII will purchase all Qualified Mortgages in accordance with
the terms of this Agreement.
(vii) After [ NAME ] notifies CII in writing of an Expansion
Opportunity pursuant to 1(c) above, CII agrees that it will
not enter into negotiations with third parties identified in
such notice during the term of this Agreement plus 6 months,
unless [ NAME ] gives its written consent which should not
be unreasonably withheld.
(viii) [CONFIDENTIAL PORTION DELETED]
b. [ NAME ] hereby represents and warrants as follows:
(i) [ NAME ] Group, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of
Florida and is qualified to do business in Florida and in
each other jurisdiction in which such qualification is
required or where it maintains an office or does substantial
business.
(ii) [ NAME ] possesses all necessary licenses and meets all
other legal requirements to lend funds giving rise to
Qualified Mortgages and to sell Qualified Mortgages to CII.
(iii) All corporate actions required to be taken by or on behalf of
[ NAME ] to authorize its execution of this Agreement and
the performance of its obligations hereunder have been fully
and properly taken. The execution and consummation of this
Agreement and the Qualified Mortgages contemplated hereby do
not and will not violate any corporate charter, bylaw,
contract, indenture, agreement, covenant or understanding by
which [ NAME ] is bound or to which is a party, or any
applicable law or regulation; or require the consent of any
governmental authority (unless such consent has been
obtained).
(iv) [ NAME ] is in compliance with all applicable laws and
regulations. There are no actions, suits or proceedings
pending, or, to the knowledge of [ NAME ], threatened
against [ NAME ] in any court or before any administrative
or
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regulatory agency the adverse outcome of which [ NAME ]
would have a material adverse effect on the assets and
business of [ NAME ].
(v) No fee or other charges shall be made by [ NAME ] with
respect to any loan hereunder except for fees which are
reasonable and customary in the locality for the services
provided and which are imposed in full compliance with all
applicable federal, state and local laws and regulations.
(vi) [CONFIDENTIAL PORTION DELETED]
(vii) [CONFIDENTIAL PORTION DELETED]
(viii) During the term of this Agreement, [ NAME ] shall not
[CONFIDENTIAL PORTION DELETED]
(ix) [CONFIDENTIAL PORTION DELETED]
(x) [CONFIDENTIAL PORTION DELETED]
(c) Representations and warranties with respect to Qualified
Mortgages. At the time of transfer and conveyance of each
Qualified Mortgage to CII, [ NAME ] hereby represents and
warrants to CII (which representations and warranties shall
survive the purchase and shall continue in full force and
effect until such Qualified Mortgages are paid in full) with
respect to each such Qualified Mortgage, as follows:
(i) [ NAME ] is the sole and lawful owner of the Qualified
Mortgage and CII will receive good and marketable title
thereto free and clear of any and all liens, encumbrances,
claims and rights of any party whatsoever.
(ii) No previous transfer or assignment of the Qualified Mortgage
will be effective and no other party has any option of first
refusal or other arrangement to acquire, directly or
indirectly, the Qualified Mortgage.
(iii) All Qualified Mortgage Loan Documents (i) conform to all
applicable laws and regulations; (ii) are true, valid,
genuine and complete in all respects; (iii) are enforceable
against borrower in accordance with their terms; and (iv) are
subject to no defense, claim or disability, counterclaim,
offset or pending bankruptcy. No defense, claim, disability,
counterclaim, or offset as described above will arise against
CII by virtue of the sale of the Qualified Mortgage or
assignment of the Qualified Mortgage Documents under this
Agreement. No suit, foreclosure or any other legal action or
preceding has been brought by [ NAME ] in accordance with
its handling of the Qualified Mortgages.
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(iv) All Qualified Mortgage Loan Documents are completed in
compliance with all applicable laws and regulations, and all
computations made with respect to any Qualified Mortgages are
accurate.
(v) Each action taken by [ NAME ] with respect to the
Qualified Mortgage and each Note, loan application,
agreement, form, letter, notice, statement, or other
materials used by [ NAME ] in connection with the
origination, servicing and sale of each such Qualified
Mortgage, complies in all material respects with all
applicable laws and regulations, including without
limitation: the Consumer Credit Protection Act and
Regulation Z under Title I thereof; laws respecting obtaining
and/or using credit reports and other information concerning
individuals (including, without limitation, the Fair Credit
Reporting Act); the Equal Credit Opportunity Act and
Regulation B thereunder; laws relating to unfair, deceptive,
or unconscionable acts and practices; laws governing the sale
of insurance (including, without limitation, credit life
insurance); federal laws and regulations relating to such
Qualified Mortgages (including without limitation, the Real
Estate Settlement Practices Act, as amended); the Flood
Disaster Protection Act; and all applicable federal, state
and local statutes, regulations, ordinances, and
administrative rulings.
(vi) There is due and owing on the Qualified Mortgage the amount
represented by [ NAME ] to be due thereon.
(vii) With respect to each Qualified Mortgage which is a deed of
trust, a trustee, duly qualified under applicable law to
serve as such, has been properly designated, serving and
named in such deed of trust. Except in connection with a
trustee's sale after default by the obligor, no fees or
expenses are payable by [ NAME ] to the trustee under any
deed of trust.
(viii) The Qualified Mortgage has not arisen from a renewal granted
for the purpose of concealing from CII a delinquency, and no
collateral purporting to secure the Note has been repossessed
or disposed of or foreclosed against by [ NAME ]. No
officer, director, partner, employee or agent of [ NAME ]
(or of any assignor of the Qualified Mortgage or of any
broker referring the Borrower under the Qualified Mortgage),
nor the [ NAME ] has received any direct or indirect
benefit, fee, commission or other consideration or value from
any Borrower or from anyone else in connection with the
Qualified Mortgage (other than as disclosed to CII in
writing); nor has any such person made, directly or
indirectly, any payment on the Note or on any of its
officers, directors, partners, employees or agents has made
any agreement with any Borrower providing for any variation
of the interest rate, schedules of payment or other terms and
conditions of the Note; and neither [ NAME ] or any of its
officers, directors, partners, employees or agents has
received a request for approval of, or notice of any proposed
assumption, loss draft or payoff of, the Qualified Mortgage.
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(ix) A lender's title insurance policy regarding each Qualified
Mortgage became effective as of the origination of such
Qualified Mortgage, is, and shall be, valid and is, and shall
remain, in full force and effect; such title insurance shows
whether any prior lien secures an open-end obligation
requiring future advances; any such insurance policy has been
issued by a title insurer qualified to do business in the
state in which the real property subject to a Qualified
Mortgage is located, insuring the priority of the lien of the
loan in the original principal amount of such loan, which
policy is in the then current American Land Title Association
or a state land title association form customarily used in
the state in which the insured property is located.
(x) The real property under each Qualified Mortgage is insured,
under standard homeowner's hazard and casualty insurance
policies, with appropriate mortgagee clauses, for an amount
equal to the loan amount or more.
(xi) All real estate appraisals made in connection with each
Qualified Mortgage shall have been performed in accordance
with industry standards in the appraising industry in the
area where the appraised property is located. Any disputes
regarding appraisal accuracy shall be submitted to an
impartial appraiser, appointed by CII, whose judgment shall
be determinative as to the accuracy of any appraisal.
(xii) There shall be no homestead or other exemption available to
the obligor of any Qualified Mortgage which would interfere
with the right to sell at a trustee's sale or the right to
foreclosure.
(xiii) There shall be no holder in due course claim or any claim
against any third party available to the obligor of any
Qualified Mortgage which would interfere with the Mortgagee's
right to enforce the Qualified Mortgage, to sell at a
trustee's sale, or the right to foreclosure.
(xiv) [ NAME ] shall be responsible for the misfeasance,
malfeasance or fraudulent acts of its employees or agents.
(xv) The Qualified Mortgage is secured by a valid and subsisting
first or second priority lien or security interest on the
property as reflected in the Loan Documents, and such lien or
security interest in or on Borrower's real and personal
property collateralizing the Note (including fixtures) is
valid and has been properly filed, recorded (or received by
the title insurance company for recording) or otherwise
perfected in accordance with applicable law; and the
Qualified Mortgage is insured by a mortgage title insurance
policy (or commitment for same, the conditions having been
satisfied).
(xvi) Each of the above representations and warranties (a) applies
to any and all Qualified Mortgages sold to CII hereunder; (b)
is for the benefit of CII and each of its successors and
assigns; (c) continues in full force and effect for so long
as the Note
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remains outstanding and for such time as CII is subject to
any risk of loss or liability as to any Qualified Mortgage
purchased from [ NAME ] hereunder; (d) is in addition to
any other specific warranties contained elsewhere herein; and
(e) is made by [ NAME ] on its behalf and on the behalf of
any third party originator of any Qualified Mortgage which
may be sold hereunder in accordance with Section 2.
4. [CONFIDENTIAL PORTION DELETED]
5. Limited Power of Attorney.
a) [ NAME ] hereby makes, constitutes and appoints CII, its
successors and assigns, as [ NAME ]'s true and lawful
attorneys, with full power substitution in name of [ NAME
] or otherwise, whether in relation to real, personal,
tangible or intangible property, to do any and all of the
following:
(i) To xxxx, demand, xxx for, receive, collect, sign, endorse,
assign or comprise any and all notes, checks, money orders or
monies due on any Qualified Mortgages sold to CII, and to
receive, sign, endorse, or assign any orders, certificates,
insurance policies and all benefits under any other
instruments or documents as may from time to time be
necessary or appropriate to accomplish the sales and
transfers provided for by this Agreement;
(ii) To complete, execute and record any assignment or other
document, including financing statements covering any such
collateral;
(iii) To exercise or perform any act, power or duty that [ NAME
] has or would have in connection with the Qualified
Mortgages purchased by CII, or which are reasonable in order
to protect CII's interest in the collateral securing said
Qualified Mortgage.
b. [ NAME ] agrees that the foregoing powers are coupled with
an interest and are irrevocable notwithstanding [ NAME ]'s
dissolution, merger, consolidation or other corporate
reorganization or structural change or any other reason
whatsoever.
c. [ NAME ] will, at CII's reasonable request from time to
time, execute one or more appropriate separate instruments
evidencing the powers granted CII in this Section, in form
suitable for recordation.
6. Opinion of Counsel; Certified Resolutions.
a. Prior to the time that CII first purchases any Qualified
Mortgages from [ NAME ] under this Agreement, [ NAME ]
shall provide to CII an Opinion of Counsel to [ NAME ], in
form and substance satisfactory to CII, stating that as of
the date of such Opinion:
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(i) [ NAME ] (a) is a corporation duly organized, validly
existing, and in good standing under the laws of the state of
its incorporation or organization; (b) has the requisite
power and authority and the legal right to conduct its
business as now and heretofore conducted; (c) has all
necessary licenses, permits, consents or approvals from or
by, has made all necessary filings with, and has given all
necessary notices to, all governmental authorities having
jurisdiction, to the extent required to conduct its business
as now conducted in all locations where it conducts business,
and to the extent necessary to assure the enforceability of
each Note and Mortgage in any location in which any mortgaged
property is located; and (d) is in compliance with its
certificate of incorporation and bylaws or other governing
documents.
(ii) The execution, delivery and performance of this Agreement and
all instruments and documents delivered or to be delivered by
[ NAME ] pursuant to this Agreement, and the origination
and sale by [ NAME ] of each Qualified Mortgage hereunder
(a) are within [ NAME ]'s corporate power and authority;
(b) have been duly authorized by all necessary or proper
corporate action; (c) are not in contravention of any
provision of [ NAME ]'s certificate of incorporation or
bylaws; (d) will not violate any law or regulation or any
order or decree of any court or governmental authority; (e)
will not conflict with or result in the breach of, or
constitute a default with respect to, any agreement or other
instrument to which [ NAME ] is a party or by which
[ NAME ] of any of its property is bound; and (f) do not
require any filing or registration with, or the consent or
approval of, any governmental authority or any other person
which has not been made or obtained previously.
(iii) This Agreement has been duly executed and delivered by
[ NAME ], and is a valid, legal and binding obligation of
[ NAME ] enforceable in accordance with its terms except
as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws
relating to or affecting the rights of creditors generally,
and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or
at law).
(iv) No action, claim, or proceeding is now pending or, to the
knowledge of counsel, threatened against [ NAME ] at law,
in equity or otherwise, before any court, board, commission,
agency or instrumentality of any federal, state, or local
government or of any agency or subdivision thereof or before
any arbitrator or panel of arbitrators which, if adversely
determined, (a) would result in a liability of [ NAME ] in
an amount greater than $10,000, (b) questions the validity of
any Note or Security Instrument, or (c) could, wither
individually or in the aggregate, result in any material
adverse change in the business, operations, property or
financial or other condition of [ NAME ].
b. Certified copies of any resolution or document of consent of
the board of directors or other appropriate governing body of
[ NAME ] authorizing the execution of this Agreement and
the performance of its obligations hereunder, and evidencing
the
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authority of the executing officer(s) to execute this
Agreement and all other documents, instruments and
certificates related hereto and to the transactions
contemplated hereunder.
7. Meetings and Financial Statement. The principal officers of
CII and [ NAME ] agree to meet on a quarterly or more frequent basis to
discuss all information pertinent to this Agreement, its implementation and
continuation. Each party will provide the other with copies of its monthly
financial statements, including balance sheet, income statement and statement
of changes in financial position, all within 30 days of the close of each
month.
8. Term of Agreement; Damages For [ ] Termination or
Breach.
a. The term of this Agreement shall be [CONFIDENTIAL PORTION
DELETED]
b. If either party causes a [______] Termination of this
Agreement, as defined below or fails to cure a material
breach of its obligations hereunder within 30 days after
written demand by the other party, then the other party (the
"Injured Party") shall be entitled to [CONFIDENTIAL PORTION
DELETED]
c. A [______] Termination shall include any termination other
than:
(i) Termination by mutual written agreement of the
parties;
(ii) Termination by CII in the event that [CONFIDENTIAL
PORTION DELETED]
(iii) Termination by [CONFIDENTIAL PORTION DELETED]
9. Notices. Any notice or demand which is required or permitted
to be given by a provision of this Agreement shall be deemed to have been
sufficiently given if either served personally or sent by prepaid first class,
registered or certified mail, addressed to the party at its address set forth
below:
Buyer: [ NAME ]
Carolina Investors, Inc.
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000
Seller: [CONFIDENTIAL PORTION DELETED]
Either party may change its address by written notice to the other.
10. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and there
are no representations, inducements or other
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provisions other than those expressed in writing herein. All changes,
additions or deletions hereto must be made in writing and signed by each of the
parties hereto.
11. No Agency. This Agreement and transactions entered into
pursuant hereto shall not create between the parties a relationship agency,
legal representation, joint venture, partnership or employment, and the parties
agree that neither party is in any way authorized to make any contract,
agreement, warranty or representation, or to create any obligations, express or
implied, on behalf of the others.
12. Survival of Provisions. All of the covenants, agreements,
representations and warranties made herein by the parties hereto shall survive
and continue in effect after the termination of the Agreement or the
consummation of the transactions contemplated hereby. This Agreement may be
executed in counterparts, all of which, taken together, shall constitute one
and the same instrument.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina and any
applicable federal laws.
Carolina Investors, Inc.
By:
------------------------------
, CEO
-----------------------------
Attest:
-----------------------------
Secretary
[ NAME ]
-----------------------
By:
--------------------------------
--------------------------------
(Title)
Attest: (Corporate Seal)
------------------------------
Secretary
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Direct & Beneficial Owners of [NAME]
__________________________________
[ NAME ]
__________________________________
[ NAME ]
__________________________________
[ NAME ]
__________________________________
[ NAME ]
__________________________________
[ NAME ]
__________________________________
[ NAME ]
__________________________________
[ NAME ]
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EXHIBITS
A1. Loan Approval Information
A2. Funding Request
B. Underwriting Criteria
C. Approved Closing Agents
D. Loan Documentation
E. Closing Attorney Certificate
F. Assignment of Qualified Mortgage
G. Procedures for Construction Multi Disbursement and Home Improvement
Loans
H. Owners of [ NAME ] and Others
I. License Agreement for Loan Tracking Program
J. Calculation of Profit or Loss
K. Approved Appraiser List
