Residential Mortgage Program Agreement

RESIDENTIAL MORTGAGE PROGRAM AGREEMENT


This Residential Mortgage Program Agreement ("this Agreement") is entered into as of November 18, 2004 between Homestead Funding Corp., a New York business corporation having its chief executive office at 8 Airline Drive, Albany, NY 12205, ("Homestead") and First Niagara Bank, a federal savings association having its chief executive office at 6950 South Transit Road, P.O. Box 514, Lockport, NY 14095-0514, ("First Niagara").


Background


1. Homestead is a mortgage banker engaged in the business of extending to consumers credit that, in the case of any consumer, is a mortgage loan secured by a first lien on a one-to-four family dwelling occupied by that consumer or is a home equity loan or line of credit secured by a second lien on that dwelling created at the same time as that first lien (any mortgage loan secured by a first lien of that type together with any home equity loan or line of credit secured by a second lien of that type on the dwelling covered by the first lien being "Residential Mortgage Credit").


2. First Niagara is engaged in the business of extending or purchasing Residential Mortgage Credit.


3. Homestead and First Niagara (together "the Parties" and each a "Party") wish to undertake a program under which in the counties of the State of New York identified on Exhibit A attached to this Agreement (together "the Program Counties") Homestead will identify itself as conducting business under


the name First Niagara Mortgage as a representative of First Niagara and will extend Residential Mortgage Credit to be purchased by First Niagara ("First Niagara Portfolio Residential Mortgage Credit") and Residential Mortgage Credit to be purchased by parties other than First Niagara (the "Program").


Agreement


Homestead and First Niagara agree as follows:


1. Use of Name First Niagara Mortgage and Logo of First Niagara. Subject to the provisions of a Service Mark License Agreement to be entered into between the Parties in the form of Exhibit B attached to this Agreement, Homestead will, except to the extent prohibited by applicable law or First Niagara and subject to Homestead's first obtaining the consent of First Niagara, (a) conduct business under the name First Niagara Mortgage in the Program Counties and (b) cause the name First Niagara Mortgage and the logo of First Niagara to appear on (i) all signage at offices of Homestead located in the Program Counties, (ii) all stationery used by Homestead at those offices or otherwise in the conduct of the Program ("Program Stationery"), (iii) all advertising and other promotional material in any medium used by Homestead in the conduct of the Program or otherwise in the Program Counties ("Marketing") and (iv) all forms of applications, rate sheets and other documents used by Homestead in the conduct of the Program or otherwise in the Program Counties ("Program Documentation"). For example, Homestead will (a) cause telephones at offices of Homestead located in the Program Counties other than the principal


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office of Homestead to be answered with the name First Niagara Mortgage, (b) cause telephones at the principal office of Homestead to be answered, to the extent practicable, with the name First Niagara Mortgage or a variation of that name and (c) cause officers and employees of Homestead to identify themselves as employees of First Niagara Mortgage in their dealings with potential applicants and applicants for and recipients of Residential Mortgage Credit.


2. Identification of Homestead as Representative of First Niagara. Whenever Homestead uses the name First Niagara Mortgage or the logo of First Niagara (for example, on (a) any signage at any office of Homestead located in the Program Counties, (b) any Program Stationery, (c) any Marketing or (d) any Program Documentation), Homestead will conspicuously identify itself as a representative of First Niagara.


3. Availability of Homestead Employees at First Niagara Banking Offices. Homestead will, at times and otherwise as agreed upon by the Parties, cause qualified employees of Homestead to be located at or otherwise be available to customers and potential customers of banking offices of First Niagara located in the Program Counties for the purpose of promoting and originating applications for Residential Mortgage Credit.


4. Underwriting. Underwriting of applications for First Niagara Portfolio Residential Mortgage Credit taken by Homestead in the conduct of the Program or otherwise in the Program Counties, whether taken at offices of Homestead or banking offices of First Niagara or otherwise, will be underwritten by employees of First Niagara, who may be located at offices of Homestead. If located at offices of Homestead, those employees will be under the control of First Niagara at all times but may be under day-to-day operational supervision of Homestead.


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5. Promotion and Development of Types of Residential Mortgage Credit. In the conduct of the Program, Homestead (a) will use commercially reasonable efforts to promote, through Marketing and otherwise, in the Program Counties all types of Residential Mortgage Credit offered by First Niagara, whether or not constituting First Niagara Portfolio Residential Mortgage Credit, and (b) may promote, through Marketing and otherwise, in the Program Counties other types of Residential Mortgage Credit. Homestead will cooperate with First Niagara in developing new types of Residential Mortgage Credit to be offered by First Niagara.


6. Offering and Promotion of Other Products and Services. In the conduct of the Program, Homestead will use commercially reasonable efforts to promote, through Marketing and otherwise, products and services offered by First Niagara other than Residential Mortgage Credit (for example, deposit accounts, commercial mortgage loans and home equity loans and lines of credit not constituting Residential Mortgage Credit) as agreed upon by the Parties and for compensation agreed upon by the Parties. Except for Residential Mortgage Credit and products and services directly related to Residential Mortgage Credit (for example, title insurance), Homestead will not, without first obtaining the consent of First Niagara in writing (which will not be unreasonably withheld by First Niagara), offer or promote, through Marketing or otherwise, in the conduct of the Program or otherwise in the Program Counties any product or service (for example, a home equity loan or line of credit) offered by any party other than First Niagara.


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7. Cooperation by Parties. The Parties will cooperate in (a) obtaining, making, giving or doing, and maintaining in full force and effect, each authorization, approval, permit, consent, franchise and license from, registration and filing with, declaration, report and notice to and other act by or relating to any court, agency or other governmental body necessary for the execution, delivery and performance by the Parties of this Agreement or the conduct of the Program and (b) to the fullest extent allowed by and in accordance with applicable law, sharing information about potential applicants and applicants for and recipients of Residential Mortgage Credit.


8. Approval of Marketing. All Marketing used at banking offices of First Niagara located in the Program Counties must be approved by First Niagara before being undertaken by Homestead. All other Marketing must be approved in concept by First Niagara before being undertaken by Homestead.


9. Payment for Signage, Program Stationery, Marketing and Program Documentation. Homestead will pay for (a) all signage at offices of Homestead located in the Program Counties not deemed necessary by First Niagara, (b) all Program Stationery other than Program Stationery initially ordered for the conduct of the Program, (c) all Marketing other than Marketing consisting of free-standing newspaper inserts that are approved by First Niagara and advertise or otherwise promote both Residential Mortgage Credit and other products and services offered by First Niagara (together "Newspaper Inserts") and (d) all Program Documentation. First Niagara will pay for (a) all signage at offices of


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Homestead located in the Program Counties other than signage not deemed necessary by First Niagara, (b) all Program Stationery initially ordered for the conduct of the Program and (c) all Newspaper Inserts.


10. Sale and Purchase of Residential Mortgage Credit. If, in the judgment of First Niagara, any Residential Mortgage Credit extended by Homestead, whether or not extended in the conduct of the Program and whether or not originated in the Program Counties, (a) is of a type identified on Exhibit C attached to this Agreement, (b) is of a type offered by First Niagara at the time that Residential Mortgage Credit is extended, (c) provides for credit terms (for example, terms relating to interest and other charges) offered by First Niagara at the time that Residential Mortgage Credit is extended and (d) meets underwriting standards of FNMA or FHLMC or any other prudent investor that provides Residential Mortgage Credit like that Residential Mortgage Cr ...