15
1995 AMENDED AND EXTENDED
MANAGEMENT AGREEMENT
THIS AGREEMENT, initially made as of September 3, 1985 and
amended and extended from time to time thereafter, is amended and extended as of
May 15, 1995 by and between CWM MORTGAGE HOLDINGS, INC. (formerly known as
Countrywide Mortgage Investments, Inc.), a Delaware corporation which has
elected to qualify as a real estate investment trust (the "Company"), and
COUNTRYWIDE ASSET MANAGEMENT CORPORATION, a Delaware corporation, and its
permitted successors and assigns under this agreement (the "Manager").
WITNESSETH
WHEREAS, the Company has elected to qualify for the tax benefits accorded
by Sections 856 to 860 of the Internal Revenue Code of 1986, as amended; and
WHEREAS, the Company, directly or through Subsidiaries, in the
conduct of its business primarily operates a mortgage loan conduit, engages in
warehouse lending and construction lending, purchases and sells credit-impaired
mortgage loans, and invests in mortgage loans and mortgage-related securities
meeting the investment criteria established from time to time by its Board of
Directors; and
WHEREAS, the Company desires to retain the Manager to manage
the operations and investments of the Company and its Subsidiaries and to
perform administrative services for the Company and its Subsidiaries, each in
the manner and on the terms set forth in this Agreement; and
WHEREAS, the Company and the Manager wish to amend and extend
their agreement originally entered into as of September 3, 1985 for a one year
period through May 14, 1996;
NOW, THEREFORE, in consideration of the mutual agreements set
forth in this Agreement, the Company and the Manager agree as follows:
Section 1. Definitions. Whenever used in this Agreement, the following
terms, unless the context otherwise requires, shall have the following meanings:
(a) "Affiliate" of another person shall mean any person
directly or indirectly owning, controlling or holding with power to vote, more
than 5% of the outstanding voting securities of such other person; any person 5%
or more of whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote by such other person; any person directly
or indirectly controlling, controlled by or under common control with, such
other person; and any officer, director, partner or employee of such other
person. The term "person" includes a natural person, corporation, partnership,
trust, company or other entity.
(b) "Agency Securities" shall mean (i) fully modified
pass-through mortgage-backed certificates guaranteed as to timely payment of
principal and interest by the Government National Mortgage Association, (ii)
mortgage participation certificates guaranteed as to payment of interest and
principal by the Federal Home Loan Mortgage Corporation and (iii) mortgage
pass-through certificates guaranteed as to payment of interest and principal by
the Federal National Mortgage Association.
(c) "Agreement" shall mean this 1995 Amended and Extended Management
Agreement.
(d) "Average Invested Assets" for any period shall mean the
average of the aggregate book value of the assets of the mortgage conduit
operations of the Company and its Subsidiaries invested, directly or indirectly,
in loans secured by real estate (including without limitation whole mortgage
loans, retained undivided interests in mortgage loans and Agency Securities, but
not including any whole mortgage loans, retained undivided interests in mortgage
loans, or Agency Securities pledged to secure the issuance of collateralized
mortgage obligations or other mortgage collateralized debt or sold in the form
of mortgage backed securities in transactions entered into by the Company or a
Subsidiary), computed by taking the average of such values at the end of each
calendar month during such period.
(e) "Average Net Worth" for any period shall mean the
arithmetic average of the Net Worth of the Company at the beginning of such
period and at the end of each calendar month during such period.
(f) "Board of Directors" shall mean the Board of Directors of the Company.
(g) "CCI" shall mean Countrywide Credit Industries, Inc., a Delaware
corporation. (h) "CFC" shall mean Countrywide Funding Corporation, a Subsidiary
of CCI, and a New York corporation.
(i) "Commitment" shall mean any document containing the terms
pursuant to which the Company or any Subsidiary agrees to purchase on a forward
basis any specified mortgage loans, including purchases from Affiliates of the
Manager.
(j) "Consolidated Average Invested Assets" for any period
shall mean the Average Invested Assets for the Company and its consolidated
subsidiaries taken as a whole, computed by taking the average of such values at
the end of each calendar month during such period.
(k) "Governing Instruments" shall mean the articles or
certificate of incorporation, trust agreement and bylaws of the Company or any
Subsidiary, as applicable.
(l) "INMC" shall mean Independent National Mortgage Corporation, a Delaware
corporation. (m) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended.
(n) "Loan Purchase Agreement" shall mean the 1995 Amended and
Extended Loan Purchase and Administrative Services Agreement, dated as of May
15, 1995, as thereafter amended or supplemented, between the Company and CFC.
(o) "Mortgage Backed Securities" shall mean the collateralized
mortgage obligations, mortgage collateralized debt, mortgage pass-through
securities including real estate mortgage investment conduits or other
mortgage-related securities issued by the Company or a Subsidiary of the
Company.
(p) "Net Income" for any period shall mean total revenues
applicable to such period, less the expenses applicable to such period
determined in accordance with generally accepted accounting principles.
(q) "Net Worth" at any time shall mean the sum of the gross
proceeds from any offerings of equity securities by the Company (before
deducting any underwriting discounts and commissions and other expenses and
costs relating to the offering), plus or minus any retained earnings or losses
of the Company, computed in accordance with generally accepted accounting
principals.
(r) "Return on Equity" for a period shall be calculated by
dividing the Company's Net Income for such period by the Company's Average Net
Worth for such period.
(s) "Servicing Agreement" shall mean an agreement between the
Company or any Subsidiary and each seller or servicer of mortgage loans
purchased by the Company, including CFC, which agreement governs the sale and/or
servicing of such mortgage loans.
(t) "Shareholders" shall mean the owners of the shares of the Company.
(u) "Subsidiary" shall mean any corporation, whether now
existing or in the future established, of which the Company, directly or
indirectly, owns more than 50% of the outstanding voting securities of any class
or classes, any business trust, partnership or similar non-corporate form in
which the Company, directly or indirectly, owns more than 50% of the beneficial
interests, and INMC.
(v) "Ten Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of 10 years).
(w) "Ten Year U.S. Treasury Rate" for a quarterly period shall
mean the arithmetic average of the weekly per annum Ten Year Average Yields
published by the Federal Reserve Board during such quarter. In the event that
the Federal Reserve Board does not publish a weekly per annum Ten Year Average
Yield during any week in a quarter, then the Ten Year U.S. Treasury Rate for
such week shall be the weekly per annum Ten Year Average Yields published by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Company for such week. In the event that the Company determines in good
faith that for any reason the Company cannot determine the Ten Year U.S.
Treasury Rate for any quarter as provided above, then the Ten Year U.S. Treasury
Rate for such quarter shall be the arithmetic average of the per annum average
yields to maturity based upon the daily closing bids during such quarter for
each of the issues of actively traded marketable U.S. Treasury fixed interest
rate securities (other than securities which can, at the option of the holder,
be surrendered at face value in payment of any federal estate tax) with a final
maturity date not less than eight nor more than twelve years from the date of
each such quotation, as chosen and quoted for each business day (or less
frequently if daily quotations shall not be generally available) in each such
quarterly period in New York City to the Company by at least three recognized
dealers in U.S. Government securities selected by the Company.
(x) "Unaffiliated Directors" shall mean those members of the Board of
Directors of the Company who are not Affiliates of the Manager.
Section 2. General Duties of the Manager. Subject to the
supervision of the Board of Directors and in accordance with the Governing
Instruments, the Manager shall provide services to the Company and INMC, and to
the extent directed by the Board of Directors, shall provide similar services to
any other Subsidiary of the Company, as follows:
(a) conduct the day-to-day mortgage loan conduit, warehouse
lending and construction lending and other operations of the Company and INMC as
approved by the Board of Directors, including without limitation, the purchase,
accumulation, financing and securitization of mortgage loans, the establishment
and financing of warehouse lending and construction lending facilities, the
management of assets and investments and the administration thereof; and
(b) provide such reports and analysis to the Board of
Directors regarding the operating strategies and results of the Company and its
Subsidiaries as the Board may reasonably request.
The Manager shall perform its duties and shall take actions on
behalf of the Company and its Subsidiaries consistent with (i) the operating
policies and criteria established from time to time by the Board of Directors or
any authorized officer with respect thereto, and (ii) the obligations of the
Company and its Subsidiaries under the various agreements to which each is a
party. So long as the Manager is serving as the Manager under this Agreement, it
shall be and remain a Subsidiary of and wholly owned, directly or indirectly, by
CCI.
Section 3. Additional Activities of Manager. Except as
provided in the Letter Agreement between CCI and the Company attached hereto as
Exhibit A, nothing herein shall prevent the Manager or its Affiliates from
engaging in other businesses or from rendering services of any kind to any other
person or entity, including investment in or advisory service to others
investing in any type of real estate investment, including investments which
meet the principal investment objectives of the Company or any Subsidiary of the
Company. Directors, officers, employees and agents of the Manager or Affiliates
of the Manager may serve as directors, officers, employees, agents, nominees or
signatories for the Company or any Subsidiary of the Company, to the extent
permitted by its Governing Instruments, as from time to time amended, or by any
resolutions duly adopted by the Board of Directors pursuant to its Governing
Instruments. When executing documents or otherwise acting in such capacities for
the Company or any Subsidiary of the Company, such persons shall use their
respective titles in the Company or such Subsidiary.
Section 4. Purchases and Sales of Investments and Loans from
the Manager and its Affiliates. The Manager agrees that sales of investments to
and purchases of investments from the Manager and its Affiliates, including
without limitation purchases and sales of mortgage loans, Agency Securities and
Commitments, shall only be made as stated in an agreement therefor setting forth
in general the operating policies and guidelines within which such sales or
purchases may be made, which agreement has been approved by the Board of
Directors, including a majority of the Unaffiliated Directors. Notwithstanding
the terms of any other agreements between the manager or its Affiliates and the
Company, the Manager further agrees that all such sales and purchases will be
made upon terms no less favorable to the Company than are generally available to
other third parties. The Manager shall purchase or exercise the Company's option
to purchase mortgage loans from CFC in accordance with the Company's rights and
obligations under the Loan Purchase Agreement or any other applicable agreement
between the Company and CFC which is approved by the Board of Directors,
including a majority of the Unaffiliated Directors.
Section 5. Repurchase Obligation.
(a) The Manager agrees that if the Company purchases any
mortgage loan, Agency Security or other investment which does not meet the
investment and/or purchase criteria and policies of the Company and/or INMC as
applicable at the time of purchase, the Manager will repurchase or will cause
the repurchase of such mortgage loan, Agency Security or other investment from
the Company for an amount not less than the unpaid principal balance of the
mortgage loan, Agency Security or other investment as of the date of repurchase,
less any amounts received by the Company representing prepaid interest not
accrued as of the date of repurchase, plus any amounts representing accrued and
unpaid interest to the date of repurchase and any amounts incurred by the
Company, including, but not limited to reasonable fees and out-of-pocket
expenses of counsel, in enforcing the obligation of the Manager to repurchase or
cause the repurchase of such mortgage loan. In lieu of repurchasing or causing
the repurchase of any mortgage loan, Agency Security or other investment, the
Manager may, in its discretion, substitute or cause the substitution,
respectively, of a mortgage loan, Agency Security or other investment having an
unpaid principal amount and yield at least equivalent to and a maturity not
later than the defective mortgage loan, Agency Security or other investment and
otherwise meeting the investment and/or purchase criteria and policies of the
Company and/or INMC as applicable and the terms of the agreement, if any,
pursuant to which the mortgage loan, Agency Security or other investment has
been securitized.
(b) The Manager shall be subrogated to any and all rights of
the Company or any Subsidiary, and the Company agrees to assign to the Manager
or direct its Subsidiary to assign to the Manager its rights, under any
Servicing Agreement with any third party with respect to any mortgage loan
repurchased or substituted for, by or on behalf of the Manager under Subsection
(a).
Section 6. Bank Accounts. The Manager may establish and
maintain one or more bank accounts in the name of the Company or any Subsidiary,
at the direction of the Board of Directors, and may collect and deposit into any
such account or accounts, and disburse from any such account or accounts, any
money on behalf of the Company or any Subsidiary, under such terms and
conditions as the Board of Directors may approve; and the Manager shall from
time to time render appropriate accountings of such collections and payment to
the Board of Directors and, when requested, to the auditors of the Company or
any Subsidiary.
Section 7. Records; Confidentiality. The Manager shall
maintain appropriate books of account and records relating to services performed
hereunder, which books of account and records shall be accessible for inspection
by the Company or any Subsidiary at any time during normal business hours. The
Manager agrees to keep confidential any and all information it obtains from time
to time in connection with the services it renders under this Agreement and
shall not disclose any portion thereof to non-affiliated third parties except
with the prior written consent of the Company.
Section 8. Obligations of Manager.
(a) The Manager shall use its best efforts to provide that
each mortgage loan conforms to the purchase criteria of the Company or INMC as
applicable and shall require each seller or transferor of mortgage loans to the
Company or INMC in connection with such purchase or transfer to make all
applicable representations and warranties contained in the Servicing Agreement
for such loans. The Manager shall take such other action as the Manager deems
necessary or appropriate with regard to the protection of the Company's or
INMC's investments.
(b) Anything else in this Agreement to the contrary
notwithstanding, the Manager shall refrain from any action which in its sole
judgment made in good faith would adversely affect the status of the Company, or
any Subsidiary which elects to so qualify, as a real estate investment trust as
defined and limited in Section 856 through 860 of the Internal Revenue Code or
which in its sole judgment made in good faith would violate any law, rule or
regulation of any governmental body or agency having jurisdiction over the
Company or any Subsidiary or which would otherwise not be permitted by the
Company's or its Subsidiary's Governing Instruments except if such action shall
be ordered by the Board of Directors, in which event the Manager shall promptly
notify the Board of Directors of the Manager's judgment that such action would
adversely affect such status or violate any such law, rule or regulation or the
Governing Instruments and shall refrain from taking such action pending further
clarification or instructions from the Board of Directors. If the Board of
Directors thereafter instructs the Manager, despite the Manager's notification
as provided herein, to take any such action and the Manager so acts upon the
instructions given, the Manager shall not be responsible for any loss of the
Company's or Subsidiary's status as a real estate investment trust or violation
of any law, rule or regulation or the Governing Instruments caused thereby.
Section 9. Fidelity Bond. The Manager shall maintain a
fidelity bond with a responsible surety company in an amount approved by the
Board of Directors covering all officers and employees of the Manager handling
funds of the Company or any Subsidiary and any documents or papers, which bond
shall protect the Company or any Subsidiary against all losses of any such
property from acts of such officers and employees through theft, embezzlement,
fraud, negligent acts, errors and omissions or otherwise. The premium for said
bond shall be paid by the Manager.
Section 10. Compensation.
(a) Manager will receive a base management fee equal to the Average
Invested Assets multiplied by 1/8 of 1%.
(b) The Manager shall be paid for services rendered with
respect to warehouse lending and construction lending activities a management
fee in an amount equal to two tenths of 1% of the average daily balance of the
amounts outstanding under warehouse lines of credit extended by the Company or
its Subsidiaries to originators of mortgage loans.
(c) If the Company's annualized Return on Equity during any
fiscal quarter (computed by multiplying the Return on Equity for such fiscal
quarter by four) is in excess of the Ten Year U.S. Treasury Rate, plus 2% after
taking into account any recovery of the Manager's fees under Subsection (d), the
Company will pay the Manager as incentive compensation for such quarter an
amount equal to 25% of the amount by which the annualized Return on Equity of
the Company for such fiscal quarter exceeds the Ten Year U.S. Treasury Rate plus
2%, but in no event shall any payment of incentive compensation under this
Subsection reduce the Company's annualized Return on Equity for such quarter to
less than the Ten Year U.S. Treasury Rate plus 2%. For purposes of the
calculation contained in this Subsection, all Net Income of the Company and any
Subsidiaries shall be deemed to have been distributed on the last day of each
quarter. The incentive compensation shall be paid to the Manager within 60 days
after the end of each fiscal quarter on an interim basis, subject to adjustment
under Subsection (d).
(d) The Manager shall compute the compensation payable under
Subsections (a), (b) and (c) within 45 days after the end of each fiscal
quarter. A copy of the computations made by the Manager to calculate its
compensation shall thereafter by promptly delivered to the Company and, upon
such delivery, payment of the interim compensation earned under Subsections (a),
(b) and (c) shown therein shall be due and payable within 60 days after the end
of such fiscal quarter. The aggregate amount of the Manager's compensation for
each fiscal year shall be adjusted within 120 days after the end of such fiscal
year so as to provide compensation for such year in the annual amounts stated in
Subsections (a), (b) and (c) and any excess owed to, or shortfall owed by, the
Manager with respect to such compensation, collectively, shall be promptly
remitted by, or paid to, the Company.
(e) Notwithstanding the definition of Average Invested Assets,
in the event the Company implements a strategy of investing directly or
indirectly in loans secured by real estate which are not intended to be
securitized, the base management fee in Subsection (a) shall be paid with
respect to these assets.
Section 11. Operating Expenses. The Manager shall be
reimbursed by the Company for its operating expenses on a monthly basis. Any
allocation of general administrative costs and overhead by the Manager to the
Company shall be supported by documentation establishing that each other
applicable affiliate of the Manager is also charged a pro rata share of such
expenses. Promptly following the end of each month for which reimbursement is
due, the Manager shall submit an itemized accounting of its expenses to the
Company, and the Company shall pay within 30 days of the receipt of the
accounting. The Board of Directors shall have the authority to approve the
incurrence of any expenses by the Manager for the account of the Company, either
prior to or after such expenses have been incurred. The Manager shall be
required to request and receive the approval of the Board of Directors with
respect to the compensation and expense reimbursement provided to the executive
officers of the Company. In the event the Company determines that any expenses,
costs or overhead charged by the Manager can be reduced by the Company's
utilizing another provider or source, the Company shall so notify the Manager,
and thirty (30) days after the delivery of such notice (the "Notice Effective
Date"), the Company shall have the right to utilize any other such provider or
source pursuant to such arrangements as the Company may from time to time make;
provided that any expenses, costs or overhead allocable by the Manager to the
Company in accordance with the terms of this section shall be reimbursed by the
Company for the period up to and including the Notice Effective Date.
Section 12. Limits of Manager Responsibility. The Manager
assumes no responsibility under this Agreement other than to render the services
called for hereunder in good faith and shall not be responsible for any action
of the Board of Directors in following or declining to follow any advice or
recommendations of the Manager, including as set forth in Subsection 8(b) above.
The Manager, its directors, officers, shareholders and employees will not be
liable to the Company, any Subsidiary, the Unaffiliated Directors of the Company
or the Company's or any Subsidiary's shareholders for any acts performed by the
Manager, its directors, officers, shareholders or employees in accordance with
this Agreement, except by reason of acts constituting bad faith, willful
misconduct, gross negligence or reckless disregard of their duties. The Company
or any Subsidiaries, as applicable, shall reimburse, indemnify and hold harmless
the Manager, its shareholders, directors, officers or employees for and from any
and all expenses, losses, damages, liabilities, demands, charges and claims of
any nature whatsoever in respect of or arising from any acts or omissions of the
Manager, its shareholders, directors, officers and employees made in good faith
in the performance of the Manager's duties under this Agreement and not
constituting bad faith, willful misconduct, gross negligence or reckless
disregard of duties.
Section 13. No Joint Venture. The Company and the Manager are
not partners or joint venturers with each other and nothing herein shall be
construed to make them such partners or joint venturers or impose any liability
as such on either of them.
Section 14. Term; Termination. This agreement shall continue in force
through May 14, 1996, and thereafter it may be extended only with the consent of
the Manager and by the affirmative vote of a majority of the Unaffiliated
Directors.
Each extension shall be executed in writing by all parties
hereto before the expiration of this Agreement or of any extension thereof. Each
such extension shall be effective for a period in no case exceeding twelve
months.
Notwithstanding any other provision to the contrary, this
Agreement, or any extension hereof, may be terminated by any party, upon sixty
(60) days' written notice, by majority vote of the Unaffiliated Directors or by
majority vote of the Shareholders, in the case of termination by the Company,
or, in the case of termination by the Manager, by majority vote of the directors
of the Manager.
If this Agreement is terminated pursuant to this Section, such
termination shall be without any further liability or obligation of either party
to the other, except as provided in Section 17.
Section 15. Assignment; Subcontract.
(a) This Agreement may not be assigned, in whole or in part,
by the Manager, unless such assignment is to a corporation, association, trust
or other organization which shall acquire the property and carry on the business
of the Manager, if at the time of such assignment a majority of the voting stock
of such assignee organization shall be owned, directly or indirectly, by CCI or
any of its Affiliates or unless such assignment is consented to in writing by
the Company with the consent of a majority of the Unaffiliated Directors. Such a
permitted assignment shall bind the assignee hereunder in the same manner as the
Manager is bound under this Agreement and, to further evidence its obligations,
under this Agreement, the assignee shall execute and deliver to the Company a
counterpart of this Agreement. This Agreement shall not be assignable by the
Company without the consent of the Manager, except in the case of assignment by
the Company to a real estate investment trust or other organization which is a
successor (by merger, consolidation, or otherwise purchase of assets) to the
Company, in which case such successor organization shall be bound hereunder and
by the terms of said assignment in the same manner as the Company is bound
hereunder.
(b) Notwithstanding the foregoing, the Company and the Manager
agree that the Manager may enter into a subcontract with CFC or any of its
Affiliates pursuant to which CFC or such Affiliate will provide such of the
management services required under this Agreement as the Manager deems
necessary, and the Company hereby consents to the entering into and performance
of such subcontract; provided, however, that no such arrangement between the
Manager and CFC or any of its Affiliates shall relieve the Manager of any of its
duties or obligations under this Agreement; and, provided further, that if any
subcontract results in operating expenses to be paid by the Company to the
Manager, such expenses shall be in the amount actually incurred by the Manager.
In the event the Company determines that any expenses, costs or overhead charged
by such subcontractor can be reduced by the Company's utilizing another provider
or source, the Company shall so notify the Manager, and thirty (30) days after
the delivery of such notice (the "Notice Effective Date"), the Company shall
have the right to utilize any other such provider or source pursuant to such
arrangements as the Company may from time to time make; provided that any
expenses, costs or overhead allocable by the Manager to the Company in
accordance with the terms of this section shall be reimbursed by the Company for
the period up to and including the Notice Effective Date. .
Section 16. Termination by Company for Cause. At the option
solely of the Company, this Agreement shall be and become terminated upon thirty
days' written notice of termination from the Board of Directors to the Manager
if any of the following events shall occur:
(a) If the Manager shall violate any provision of this
Agreement and, after notice of such violation, shall not cure such default
within 30 days; or
(b) There is entered an order for relief or similar decree or
order with respect to the Manager by a court having jurisdiction in the premises
in an involuntary case under the federal bankruptcy laws as now or hereafter
constituted or under any applicable federal or state bankruptcy, insolvency or
other similar laws; or the Manager (i) ceases or admits in writing its inability
to pay debts as they become due and payable, or makes a general assignment for
the benefit of, or enters into any composition or arrangement with, creditors;
(ii) applies for, or consents (by admission of material allegations of a
petition or otherwise) to the appointment of a receiver, trustee, assignee,
custodian, liquidator or sequestrator (or other similar official) of the Manager
or of any substantial part of its properties or assets, or authorizes such an
application or consent, or proceedings seeking such appointment are commenced
without such authorization, consent or application against the Manager and
continue undismissed for 30 days; (iii) authorizes or files a voluntary petition
in bankruptcy, or applies for or consents (by admission of material allegations
of a petition or otherwise) to the application of any bankruptcy,
reorganization, arrangement, readjustment of debt, insolvency, dissolution,
liquidation or other similar law of any jurisdiction, or authorizes such
application or consent, or proceedings to such end are instituted against the
Manager without such authorization, application or consent and remain
undismissed for 30 days or result in adjudication of bankruptcy or insolvency;
or (iv) permits or suffers all or any substantial part of its properties or
assets to be sequestered or attached by court order and the order remains
undismissed for 30 days.
(c) The Manager agrees that if any of the events specified in
paragraph (b) of this Section 16 shall occur, it will give prompt written notice
thereof to the Board of Directors after the happening of such event.
Section 17. Action Upon Termination. From and after the
effective date of termination of this Agreement, pursuant to Sections 14, 15, or
16 hereof, the Manager shall not be entitled to compensation for further
services hereunder, but shall be paid all compensation accruing to the date of
termination, subject to adjustment on an annualized basis in accordance with
Section 10(d). The Manager shall forthwith upon such termination:
(a) Pay over to the Company or any Subsidiary, as applicable,
all money collected and held for the account of the Company or any Subsidiary
pursuant to this Agreement, after deducting any accrued compensation and
reimbursement for its expenses to which it is then entitled;
(b) Deliver to the Board of Directors a full accounting,
including a statement showing all payments collected by it and a statement of
all money held by it, covering the period following the date of the last
accounting furnished to the Board of Directors with respect to the Company or
any Subsidiary; and
(c) Deliver to the Board of Directors all property and documents of the
Company or any Subsidiary then in the custody of the Manager.
Section 18. Release of Money or Other Property Upon Written
Request. The Manager agrees that any money or other property of the Company or
any Subsidiary held by the Manager under this Agreement shall be held for the
Company or such Subsidiary in a custodial capacity, and the Manager's records
shall be appropriately marked to reflect clearly the ownership of such money or
other property by the Company or such Subsidiary. Upon the receipt by the
Manager of a written request signed by a duly authorized officer of the Company
requesting the Manager to release to the Company or any Subsidiary any money or
other property then held by the Manager for the account of the Company or any
Subsidiary under this Agreement, the Manager shall release such money or other
property to the Company or any Subsidiary within a reasonable period of time,
but in no event later than 60 days following such request. The Manager shall not
be liable to the Company, any Subsidiary, the Unaffiliated Directors, or the
Company's Shareholders for any acts thereafter performed or omissions thereafter
to act by the Company or any Subsidiary of the Company in connection with the
money or other property released to the Company or any Subsidiary in accordance
with this Section. The Company and any Subsidiary receiving released money or
other property hereby agree to indemnify the Manager, its directors, officers,
shareholders and employees against any and all expenses, losses, damages,
liabilities, demands, charges and claims of any nature whatsoever, which arise
in connection with the Manager's release of such money or other property to the
Company or such Subsidiary in accordance with the terms of this Section unless
the Manager's release of such money constitutes bad faith, willful misconduct,
gross negligence or reckless disregard of duties. This provision shall be in
addition to any right of the Manager to indemnification under Section 12.
Section 19. Representations and Warranties.
(a) The Company hereby represents and warrants to the Manager as follows:
(i) Corporate Existence. The Company is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, has the
corporate power to own its assets and to transact the business in which it is
now engaged and is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except for failures to
be so qualified, authorized or licensed that could not in the aggregate have a
material adverse effect on the business operations, assets or financial
condition of the Company and its Subsidiaries, taken as a whole. The Company
does not do business under any fictitious business name.
(ii) Corporate Power; Authorization; Enforceable Obligations. The Company
has the
corporate power, authority and legal right to execute, deliver and perform this
Agreement and all obligations required hereunder and has taken all necessary
corporate action authorize this Agreement on the terms and conditions hereof and
its execution, delivery and performance of this Agreement and all obligations
required hereunder. Except such as have been obtained, no consent of any other
person including, without limitation, stockholders and creditors of the Company,
and no license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority is required by the Company in connection with this Agreement or the
execution, delivery, performance, validity or enforceability of this Agreement
and all obligations required hereunder. This Agreement has been, and each
instrument or document required hereunder will be, executed and delivered by a
duly authorized officer of the Company, and this Agreement constitutes, and each
instrument or document required hereunder when executed and delivered hereunder
will constitute, the legally valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(iii) No Legal Bar to This Agreement. The execution, delivery and
performance of this
Agreement and the documents or instruments required hereunder, will not violate
any provision of any existing law or regulation binding on the Company, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Company, or the certificate of incorporation or by-laws
of, or any securities issued by the Company or of any mortgage, indenture,
lease, contract or other agreement, instrument or undertaking to which the
Company is a party or by which the Company or any of its assets may be bound,
the violation of which would have a material adverse effect on the business
operations, assets or financial condition of the Company and its Subsidiaries,
taken as a whole, and will not result in, or require, the creation or imposition
of any lien on any of its property, assets or revenues pursuant to the
provisions of any such mortgage, indenture, lease, contract or other agreement,
instrument or undertaking.
(b) The Manager hereby represents and warrants to the Company as follows:
(i) Corporate Existence. The Manager is duly organized, validly existing
and in
good standing under the laws of the jurisdiction of its incorporation, has the
corporate power to own its assets and to transact the business in which it is
now engaged and is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except for failures to
be so qualified, authorized or licensed that could not in the aggregate have a
material adverse effect on the business operations, assets or financial
condition of the Manager and its Subsidiaries, taken as a whole. The Manager
does not do business under any fictitious business name.
(ii) Corporate Power; Authorization; Enforceable Obligations. The Manager
has the
corporate power, authority and legal right to execute, deliver and perform this
Agreement and all obligations required hereunder and has taken all necessary
corporate action to authorize this Agreement on the terms and conditions hereof
and its execution, delivery and performance of this Agreement and all
obligations required hereunder. Except such as have been obtained, no consent of
any other person including, without limitation, stockholders and creditors of
the Manager, and no license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required by the Manager in connection with this
Agreement or the execution, delivery, performance, validity or enforceability of
this Agreement and all obligations required hereunder. This Agreement has been,
and each instrument or document required hereunder will be, executed and
delivered by a duly authorized officer of the Manager, and this Agreement
constitutes, and each instrument or document required hereunder when executed
and delivered hereunder will constitute, the legally valid and binding
obligation of the Manager enforceable against the Manager in accordance with its
terms.
(iii) No Legal Bar to This Agreement. The execution, delivery and
performance of this
Agreement and the documents or instruments required hereunder, will not violate
any provision of any existing law or regulation binding on the Manager, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Manager, or the certificate of incorporation or by-laws
of, or any securities issued by the Manager or of any mortgage, indenture,
lease, contract or other agreement, instrument or undertaking to which the
Manager is a party or by which the Manager or any of its assets may be bound,
the violation of which would have a material adverse effect on the business
operations, assets or financial condition of the Manager and its Subsidiaries,
taken as a whole, and will not result in, or require, the creation or imposition
of any lien on any of its property, assets or revenues pursuant to the
provisions of any such mortgage, indenture, lease, contract or other agreement,
instrument or undertaking.
Section 20. Notices. Any notice, report, or other
communication required or permitted to be given hereunder shall be in writing
unless some other method of giving such notice, report, or other communication
is accepted by the party to whom it is given, and shall be given by being
delivered at the following addresses of the parties hereto:
The Company: CWM Mortgage Holdings, Inc.
00 Xxxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
The Manager: Countrywide Asset Management Corporation
000 Xxxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
Either party may at any time give notice in writing to the
other party of a change of its address for the purpose of this Section 20.
Section 21. Name Change Upon Termination of Management
Agreement. The Company agrees that, if at any time the Manager or any Affiliate
of CCI shall cease to serve generally as manager of the Company or any
Subsidiary, upon receipt of a written request from the Manager, the Company and
such Subsidiary will cause their Governing Instruments to be amended so as to
change their names to a name that does not include "Countrywide" or any
approximation thereof; provided, however, that such requirement shall not apply
to any trust in which the Company or any of its Subsidiaries has sold a majority
of the beneficial interest, and which has issued Mortgage Backed Securities that
remain outstanding in whole or in part.
Section 22. Amendments. This Agreement shall not be amended,
changed, modified, terminated or discharged in whole or in part except by an
instrument in writing signed by all parties hereto, or their respective
successors or assigns, or otherwise as provided herein.
Section 23. Successors and Assigns. This Agreement shall bind any
successors or assigns
of the parties hereto as herein provided.
Section 24. Governing Law. This Agreement shall be governed, construed and
interpreted in
accordance with the laws of the State of California.
Section 25. Headlines and Cross References. The section
headings hereof have been inserted for convenience of reference only and shall
not be construed to affect the meaning, construction or effect of this
Agreement. Any reference in this Agreement to a "Section" or "subsection" shall
be construed, respectively, as referring to a section of this Agreement or a
subsection of a section of this Agreement in which the reference appears.
Section 26. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity of any other
provision, and all other provisions shall remain in full force and effect.
Section 27. Entire Agreement. This instrument contains the entire agreement
between the
parties as to the rights granted and the obligations assumed in this instrument.
Section 28. Waiver. Any forbearance by a party to this
Agreement in exercising any right or remedy under this Agreement or otherwise
afforded by applicable law shall not be a waiver of or preclude the exercise of
that or any other right or remedy.
Section 29. Execution in Counterparts. This Agreement may be
executed in one or more counterparts, any of which shall constitute an original
as against any party whose signature appears on it, and all of which shall
together constitute a single instrument. This Agreement shall become binding
when one or more counterparts, individually or taken together, bear the
signatures of both parties.
Section 30. Guaranty of Manager's Obligations. The Manager
agrees that in order to insure the performance of its duties under this
Agreement, it will be necessary for CFC to guarantee the full performance of the
Manager, and this Agreement is conditioned upon the execution and delivery to
the Company of a Guaranty Agreement in the form attached to this Agreement as
Exhibit B. Such Guaranty Agreement shall remain in effect through the term of
this Agreement, including any renewals or extensions; provided, however, that
the Guaranty Agreement may be terminated by the Guarantor as provided therein at
such time as the Manager and the Guarantor are no longer Affiliates.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers thereunto duly authorized as of the
day and year first above written.
CWM MORTGAGE HOLDINGS, INC.
By: \s\ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Executive Vice President
COUNTRYWIDE ASSET MANAGEMENT CORPORATION
By: \s\ Xxxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
President
