BRANCH MANAGER AGREEMENT

BRANCH MANAGER AGREEMENT THIS AGREEMENT is made and entered into this day of 2001, by 1 st 2 nd Mortgage Co. of N.J., Inc., ( Employer ), and ( Branch Manager ) to be located at SECTION I TERMS OF EMPLOYMENT Employer hereby employs Branch Manager and Branch Manager accepts employment with Employer. Employer and Branch Manager agree that this employment shall be at will and is subject to termination by either Employer or Branch Manager at any time, for any reason, with or without cause or notice other than required by law. SECTION II DUTIES OF BRANCH MANAGER (B) (C) (D) is hereby employed as a Branch Manager for Employer and as such shall actively solicit, originate, negotiate, secure, process, and administer the closing of loans as specifically directed by Employer and perform any other duties requested by Employer. Branch Manager shall devote his/her productive time, ability, and attention to the business of the Employer during the term of this Agreement. Branch Manager shall not directly or indirectly render any services of a competitive nature to any other person, bank or organization, which is a competitor of the Employer whether for compensation or otherwise, without the prior written consent to Employer. Branch Manager shall have the sole responsibility of the Branch Office staffed by the Branch Manager. This responsibility shall include, but not limited to, the profitability of the branch office. In that regard, Branch Manager compensation shall be solely based upon the profitability of that Branch Office. All expenses of the branch shall be charged against the compensation set forth in Section VII of this Agreement. Such compensation shall be paid to Branch Manager only to the extent they exceed the expenses of the Branch Office. Branch Manager shall not have the authority to charge any expenses to the Employer without written approval of Employer. Branch Manager shall have the sole responsibility for all other reasonable and customary business expenses desired to be incurred by Branch Manager in the course of Employer s business in excess of those approved in writing by Employer, and may deduct such immediately provide Employer with the copies of pertinent/necessary documentation reflecting any agreements as well as maintain copies at 1

the Branch office for which Branch Manager is responsible. All records and documentation of Employer of any kind whatsoever are the property of the Employer and shall not be removed from the office by Branch Manager. Branch Manager shall promptly pay all bills for items previously approved by Employer, enumerated above subject to the billings for such being promptly submitted to Employer. (E) (F) (G) (H) (I) (J) (K) All advertising and advertising copy shall be approved by Employer, prior to such advertising being placed or distributed, unless sent, faxed, emailed or given to Branch Manager for such express purpose. All forms and documents used by Branch Manager in carrying out this Agreement must be promulgated by Employer. Branch Manager shall have all appropriate licenses required by state law and shall be responsible for paying all licensing and any affiliated fees required for licensing, if any are required, in a timely manner. Prior to the licensing of Branch Manager s office pursuant to state laws, the terms of the interim Branch Licensing Agreement shall prevail. All monies received by Branch Manager for Employer or to be held for others shall be made payable to Employer and received in trust by Branch Manager for Employer and shall be delivered immediately to Employer. No bank accounts shall be opened by Branch Manager in Employer s name. Branch Manager shall comply with all governmental laws and regulations and with Employer s rules, regulations, and policies as set forth in Employer s policy manuals which shall be provided to the Branch Manager upon the signing of the Agreement.. Branch Manager shall not charge any customer any fees in excess of that allowed by RESPA or any other applicable regulations. Branch Manager is responsible to have a complete and thorough knowledge of all such requirements. Branch Manager shall be responsible for the collection of fees to be used to pay appraisals, credit reports, long distance phone calls, and other operating expenses. Should Branch Manager order any appraisal, credit report, or make any other charges to Employer prior to actual collection of the fees, Branch Manager understands and agrees that Branch Manager is financially responsible for the payment of such fees to Employer. Branch Manager hereby agrees that said fees, if not collected by Branch Manager when due, will be reimbursed to Employer by deduction from Branch Manager s compensation. Accounting detail of any such deduction shall be furnished Branch Manager at time of deduction. Branch Manager shall not lock-in any loan with investor or with borrower. Lock-in of mortgage loans shall be effectuated by Branch Manager faxing a lock-in agreement that has been executed by borrower and is complete as to rate, program, expiration, etc. and forwarded to Employer. Upon receipt of said lock-in agreement, Employer will lock-in loan with the appropriate investor as designated by Branch Manager. Upon receipt of confirmation of said investor commitment, Employer shall execute the borrower s lock-in agreement and return it to Branch Manager for distribution to borrower. In no event shall Branch Manager lock-in for borrower without the express, written consent of the 2

Employer, except in the event that Branch Manager is acting in the broker capacity and has the written consent of the borrower(s) and specific investor(s) involved in the aforesaid transaction. In the event that the Branch Manager locks in a loan with a borrower without prior approval, Branch Manager shall be personally responsible for any damage or loss suffered by Employer. Branch Manager shall determine price at time of completion of borrower s lock-in agreement based on investor pricing obtained from Employer. Branch Manager shall receive written confirmation of such lock-in within 24 hours from Employer. Branch Manager shall have the option of selecting a closing attorney from a list of the Employer s approved attorney schedule, as amended with submission of necessary documentation and approved by Employer. (L) (M) (N) (O) Branch Manager agrees that all mortgage loan applications will be processed expeditiously and within a reasonable amount of time after the initial application. Application fees for the Branch Office shall be consistent with the standards in the community in which it serves, shall be in compliance with all State and Federal Regulations and shall be subject to approval by Employer from time to time. Employer shall be immediately notified of any and all applications received by the Branch Office. If desired by the Branch, and agreed to by the Employer, the Employer may assume the opening and/or processing of applications. If the Employer assumes the processing of applications, a processing charge of $350.00 shall be made by Employer to the Branch Office and shall be deducted from the division of revenue pursuant to Section VII hereof, otherwise there will be no processing charge. In order to promote conformity in the processing of mortgage loans, Employer shall arrange installation of licensed computer software (CONTOUR) for the Branch Office. The receipt of such software is hereby acknowledged Branch Office is currently on the updated CONTOUR software. If applicable, a branch licensing fee may be required by the Banking Department(s) in you desired state(s). This fee per state may range from $500.00 to $2500.00. If applicable, a bond may be required for the branch, and if so, it will be considered a branch expense. Branch Manager shall indemnify and hold Employer and its parent, subsidiaries, and affiliated corporations, and their respective officers, directors, agents, employees, and insurers harmless from and against any and all claims, losses, damages, fines, penalties, causes of action, suits, and liability of every kind, including all expenses of litigation, court costs, and attorneys fees arising on account of (1) any misconduct or misrepresentation made by Branch Manager, Branch Manager s agents, employees, representatives, officers, directors, beneficiaries, successors, and assigns, (2) any violation of this Agreement, and (3) any personal injury, death, property damage, civil liability, or fines or penalties imposed by any state or federal regulatory agency cause, in whole or in part, by the actions or conduct of Branch Manager, Branch Manager s agents, employees, representatives, officers, directors, beneficiaries, successors, and assigns. Employer shall provide errors and omissions insurance coverage as required by law and provide all required HUD audits and escrow and fee general ledger accounting. 3

(P) (Q) Branch Manager is required to attend 75% of quarterly Branch Manager Meetings. Prior to commencement of employment, Branch Manager is also required to attend a two (2) day Management Training at Employer s Corporate Office. Branch Manager is responsible for executing an Employment Agreement with all originating staff. Copies of such agreements must be provided to the Corporate Office within ten (10) days of execution. SECTION III DOCUMENTATION The Branch Office shall comply with all requirements of law applicable to its business and its forms shall be consistent with those used by Employer generally. Employer shall determine and approve the forms to be used and the contents for all completed documentation for presentation to the third parties for signature, Employer shall require that all forms prepared for closing be completed by the Employer. SECTION IV BRANCH EXPENSES All vendors and major expenses which exceed daily supply use be utilized by the Branch must be pre-approved by an officer of the Employer, except the ordinary and necessary daily use expenses for office supplies, office equipment, sales leads, transportation, copying expenses and similar overhead. Any and all agreements, contracts or arrangements with such other vendors must be approved and executed by an officer of Employer. Branch Manager is NOT authorized to enter into any contractual or financial agreements on behalf of Employer. Branch Manager shall not obligate to Employer to pay any sums to any party without the express authorization of an officer of the Employer. Branch Manager shall be held personally responsible for any costs or expenses for which any of the above referenced approvals are not obtained. A minimum balance, the greater of $1000.00 or the average of monthly expenditures, including but not limited to rent, utilities, and payroll must be maintained in the Branch Profit Account. Employer shall not be responsible for any costs, fees, or expenses of Branch Manager incurred in the operation of the Branch Office, unless stated otherwise in writing. The Branch Office shall use the Employer s name, stationary, and logos. There shall be no reimbursement to Branch Manager for any items billed to Employer, unless previously approved by an officer of Employer and request must be accompanied by an original invoice with receipt as paid in full by vendor. Branch Manager shall be reimbursed for pre-approved expenses upon presentment to Employer only to the extent of the balance in the Branch Profit Account, as defined in Section VII of this Agreement. 4

SECTION V CONFIDENTIALITY Branch Manager, during the term of employment under this Agreement, will have access to and become familiar with various company terms, forms, procedures, and records, which are owned by Employer and which are regularly used in the operation of the business of the Employer. Branch Manager shall not disclose, nor reproduce any of the aforestated company forms, which are forbidden to be reproduced including procedures, or records, nor use them in any way during the term of this Agreement except as required in the course of Branch Manager s employment, and at no time thereafter. All files, records, documents, drawings, specifications, proprietary information, and similar items relating to the business of Employer, whether prepared by Branch Manager or otherwise coming into Branch Manager s possession shall remain the exclusive property of Employer and shall not be copied or removed from the premises of Employer under any circumstances whatsoever without the prior written consent of the Employer. SECTION VI COMPETITION (B) During the term of this Agreement, Branch Manager shall not, directly or indirectly in any manner, either as an Employee, Employer, Consultant, Agent, Principal, Partner, Stockholder, Corporate Officer, Director, or in any other individual or representative capacity, engage or participate in any business competing in any manner whatsoever with the business of Employer. During the term of Branch Manager s employment and upon termination of employment by ranch Manager or Employer, and for a period of one (1) year thereafter, Branch Manager shall not either directly or indirectly interfere with the business of Employer, nor shall Branch Manager solicit, attempt to hire or hire any other personnel or employees of Employer or any of its subsidiaries or affiliates, except for Employees working in the Branch Office of Branch Manager without written approval of Employer. SECTION VII COMPENSATION Employer shall receive the gross revenue received on each loan. Total gross revenue is defined as the sum of borrower s points, investor premiums and/or discounts, if any, and the Service Release Premium ( SRP ), and fees if any, minus any investor pricing adjustments or investor fees. The total gross revenue received by the Employer on any transaction shall not be adjusted due to any penalties or repricing as a result of any errors Branch Manager. 5

No other fees shall be deducted by Employer from the total gross revenue received except as provided herein or otherwise agreed upon in writing between the parties. Weekly gross revenue shall not include fees for loans which are subject to rescission. Branch Manager shall be supplied with investor pricing on a daily basis. (B) (C) (D) (E) (F) (G) (H) Employer shall be entitled to retain 35% of the total gross revenue received on each Alt-A residential loans, non-conforming ( A minus through D categories ) residential loans, FHA/VA loans, conventional, table-funded, broker and commercial/mixed use loans. Omit Omit The Branch Office shall charge a fee to its customers for each application, the signed Form 1003 by the borrowers shall constitute an application said fee shall be remitted directly to the Employer. Employer shall be entitled to retain $50.00 of said fee per loan. Any amount collected by Branch Manager in excess of $50.00 shall be credited to Branch Office s Branch Profit Account. The Branch Office shall remit to Employer any fees collected by Branch Manager on behalf of Employer for any appraisal or credit report fees by Employer. Branch Manager shall be permitted to develop a sales force. Employer shall pay compensation to originators/staff hired and/or supervised by Branch Manager based solely on compensation schedules prepared by Branch Manager and approved by Employer. Branch Manager will pay originators/staff from the total gross revenue generated by the Branch Office via the Employer. Branch Manager shall be entitled to receive the balance of the Branch Profit Account of the Branch Office less expenses provided in Section IV hereof. Any discount points, origination fees and all other fees collected at closing will be credited to the Branch Profit Account five (5) days after Employer receives the completed closing package. The investor premium and SRP will be applied to the Branch Profit Account when the loan funds. The Branch is guaranteed the confirmed price at the time of commitment and not to fall below the committed price. Branch Manager waives the commission on secondary marketing gains and Employer will retain a 100 basis point Secondary Marketing Fee, and the Branch will not share on the additional spread/overage from each flow or bulk sale and Branch Manager expressly reserves the right to negotiate a commission split in the future by the parties mutual agreement.. SECTION VIII RULES AND REGULATIONS Branch Manager agrees to conduct business and regulate habits, working conditions, and procedures in a manner which will maintain and increase the goodwill, business, profits, and reputation of both Employer and its staff. The parties agree to conform to and abide by all 6

laws, rules, regulations, and codes that are binding on or applicable to mortgage bankers and loan originators according to the laws for the states applicable and display all mandatory Federal Compliance notices. Branch Manager is required to maintain certain books of account, logs, and other business records, (hereafter books and records ) as promulgated by Management. These books and records are and shall remain the property of the Employer during and beyond the term of this Agreement. Employer s representatives may inspect Branch Office books and records during regular business hours to confirm the accuracy of the accounting furnished by the Branch Office and to determine whether the Branch Manager is in compliance with the provisions of this Agreement. Branch Manager agrees to file with Employer any other reports as Employer may request from time to time within a reasonable period of time after the request is made by the Employer. Any amendments to this Agreement must be executed by Employer and Branch Manager and shall supercede any and all other agreements by and between the parties. SECTION IX RECAPTURE OF PREMIUM (B) In the event a fixed rate mortgage originated by the Branch pays off within one year of the date such mortgage was closed by the Branch, and investor requires that a pro-rata portion of the premium be returned to the investor, said pro-rata refund shall be deducted from the Branch Profit Account in proportion to the amount received under the loan. The amount of the premium to be deducted from the Branch Profit Account will be equal to one-twelfth (1/12) of the original premium amount for each full or partial month remaining in the one year period from the date of closing, or in the case of a refinance, from date of disbursement. Original premium amount for the purpose of this section will refer to the amount the employer paid to the Branch Profit Account at the time of closing that was in excess of the outstanding principal balance and accrued interest on such loan. This amount will be indicated as a percentage of the outstanding principal balance. In an instance when a premium was paid to the Branch Profit Account by Employer on a group of loans, rather than an individual loan in said group will be the percentage amount paid for the entire group multiplied by the outstanding principal balance of the individual loan at the time of purchase. The deduction from the Branch Profit Account under this section shall be considered a Branch Expense for the purposes of computing Branch Manager s commission. In the event an adjustable rate loan originated by the Branch pays off within the first two years of the date such loan was closed by the Branch, and the investor requires that a pro rata portion of the premium be returned to the investor, said pro rata refund shall be deducted from Branch Profit Account in proportion to the amount received under the loan. The amount of the premium to be deducted from the Branch Profit Account will follow the schedule of appropriate percentages specified below: 7

Months Following Premium Months Following Premium Settlement Date Rebate Settlement Date Rebate 0-6 24/24 15-16 9/24 6-7 18/24 16-17 8/24 7-8 17/24 17-18 7/24 8-9 16/24 18-19 6/24 9-10 15/24 19-20 5/24 10-11 14/24 20-21 4/24 11-12 13/24 21-22 3/24 12-13 12/24 22-23 2/24 13-14 11/24 23-24 1/24 14-15 10/24 24 > 0 (C) In the event the Borrower prepays a loan prior to maturity, and such loan contains a prepayment provision which is enforceable under all applicable laws, then the recapture pursuant to investors requirements shall be reduced by the amount of the prepayment fee received. SECTION X ASSIGNABILITY This Agreement may not be assigned without the prior consent of the parties hereto. SECTION XI GOVERNING LAW This Agreement shall be interpreted according to the laws of the state of New Jersey which shall be applicable to all disputes that may arise between Employer and Branch Manager. SECTION XII FEES Employer and Branch Manager recognize the differentiation of Fees charged to the Branch to cover branch related expenses and also fees charged to customers related to individual loan costs. In both cases, Employer and Branch Manager understand that these fees may change from time to time depending on market conditions, government regulations, etc. These changes will be communicated to the Branch Manager by an operations memo with a minimum of 10 day advance notice of change. It is understood that changes in fees will not 8

affect this Agreement and all other paragraphs stand as written. Please refer to Addendum A for current fees. SECTION XIII TERRITORIES Branch Manager will have the right to solicit, originate and process mortgage loans in every location in which Employer is licensed. SECTION XIV ASSIGNMENT OF DUTIES Branch Manager may not delegate their duties and responsibilities under this Agreement to other employees or staff without the written consent of Employer. SECTION XV LOAN REPURCHASE Branch Manager understands that the Employer is required to make certain representations and warranties to its loan investors to facilitate loan sales. Included in these representations and warranties are loan repurchase conditions which may require the Employer to repurchase a loan originated by a Branch. In the event that the Employer is required to repurchase a loan, any loss suffered by the Employer will pass through to the Branch, except in the case of a clear underwriting error, whose loss shall be assumed by the Employer of the underwriter. Branch Manager will be responsible only to the extent that it received a percentage of the gross income pursuant to Section VII. SECTION XVI TERMINATION OF AGREEMENT Branch Manager shall have at will employment with Employer. This agreement shall continue until terminated by the parties. This Agreement, and the relationship created hereby may be terminated by either party hereto with or without cause at any time upon thirty (30) days written notice. Except as otherwise provided herein the rights of the parties hereto any fees or compensation which were earned or accrued prior to the termination of this Agreement shall not be divested by the termination of this Agreement. ranch Manager shall be entitled to compensation earned as previously stated in this Agreement for any loans which were originated by the Branch Office prior to the termination of this Agreement. If Branch Manager breaches or violates any provision of the Agreement, and 9

fails to remedy the breach of violation within 10 business days following written notice by the Employer, then this Agreement will be terminated immediately. Upon termination of this Agreement, Employer shall maintain Employee s Branch Profit Account for a period of ninety (90) days to ensure that all creditors and staff members have been compensated accordingly. After reconciliation of all accounts, all remaining funds will be made available to Branch Manager. Branch Manager understands and agrees that whatever pipeline exists at the time of the termination is and shall remain the property of the Employer. Branch Manager shall not solicit prospective borrowers from the pipeline. In the even that the Branch Manager solicits or attempts to solicit borrowers in Employer s Branch Office pipeline its shall be considered an action to cause Employer monetary damages and Employer will seek such remedies as afforded by law. (B) Employer may exercise an Administrative Fee for the processing and collection of loan related documentation to assure timely closings for loans remaining in the pipeline. Upon the closure of the Branch Office, all files must be forwarded to the Employer s Corporate Office. SECTION XVII CONSTRUCTION Every reference to the word Net before Branch, Manager, Office or alike has been intentionally deleted from the Agreement and any typographical error, printing error or alike is deleted by specific reference. Manager Date Employer Date 10

ADDENDUM A In the course of doing business various fees and charges will be incurred by the Employer. Some of these charges will be passed through to the branch expense as a branch expense or loan charge. The number and amount of these fees may change as a result of changes in the following: investor; borrower; loan type; loan amount; ltv; change in circumstances; secondary market; etc. It is 1 st 2 nd Mortgage Co. of N.J., Inc. endeavor to minimize the cost of doing business and therefore, the fees charged to the branch and its borrowers. A. Branch will be responsible for all fees charged by the investor, or third parties related to the closing of a loan. These fees will be deducted on a loan by loan basis from the loan proceeds and will be deducted from the gross income. If allowable by state law, the Branch may pass these fees through to the borrower. B. Employer will collect a $50.00 application fee on each loan originated by the Branch. If the Branch does not charge an application fee to the borrower it will still be responsible for the application fee related to the loan charged by the Employer. The application fee will be deducted from the Branch Profit Account. C. The first ten (10) loans submitted for closing by the Branch will be charged a Processing Fee of $350.00 after the loan has closed. After the closing of these first ten (10) loans, a Processing Fee may be charged to the Branch if 50 Spring St. maintains processing of the loans. D. The first ten (10) loans submitted for closing by the Branch will be tablefunded by the investor. Such tablefunding fees will be netted from the gross income. E. A transaction fee will be charged to the Branch to cover the cost of underwriting, closing, funding, and delivery of each loan by the Employer. The following fee schedule will be observed: 1. On all Alt-A, non-conforming (A- through D categories), commercial, mixed use, and second mortgages loans a transaction fee of $450.00 will be charged. 2. On all A and government loans, a transaction fee of $400.00 will be charged. F. Section VII, Compensation, is only applicable to new 1 st 2 nd Mortgage Co. customers; previous customers whether service retained or service released shall have commission paid on a 50/50 basis. Branch Manager Date Employer Date 11