EXECUTION VERSION

MASTER REPURCHASE AGREEMENT

Dated July 14, 2006

Between

JPMORGAN CHASE BANK, N.A.,

as the Buyer

and

FIELDSTONE INVESTMENT CORPORATION,

as a Seller

and

FIELDSTONE MORTGAGE COMPANY,

as a Seller

1

TABLE OF CONTENTS

Page

     
SECTION 1.
SECTION 2.
SECTION 3.
SECTION 4.
SECTION 5.
SECTION 6.
SECTION 7.
SECTION 8.
SECTION 9.
SECTION 10.
SECTION 11.
SECTION 12.
SECTION 13.
SECTION 13.01.
SECTION 13.02.
SECTION 14.
SECTION 15.
SECTION 16.
SECTION 17.
SECTION 18.
SECTION 19.
SECTION 20.
SECTION 21.
SECTION 22.
SECTION 23.
SECTION 24.
SECTION 25.
SECTION 26.
SECTION 27.
SECTION 28.
SECTION 29.
SECTION 30.
SECTION 31.
SECTION 32.
SECTION 33.
SECTION 34.
  APPLICABILITY
DEFINITIONS
INITIATION; TERMINATION
MARGIN AMOUNT MAINTENANCE
INCOME PAYMENTS
REQUIREMENTS OF LAW
TAXES
SECURITY INTEREST
PAYMENT, TRANSFER AND CUSTODY
HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS
REPRESENTATIONS
COVENANTS OF THE SELLERS
EVENTS OF DEFAULT; TERMINATION EVENT
EVENTS OF DEFAULT
TERMINATION EVENT
REMEDIES
INDEMNIFICATION AND EXPENSES
SERVICING
RECORDING OF COMMUNICATIONS
SINGLE AGREEMENT
SET-OFF
NOTICES AND OTHER COMMUNICATIONS
ENTIRE AGREEMENT; SEVERABILITY
NON-ASSIGNABILITY
TAX TREATMENT
TERMINABILITY
GOVERNING LAW
SUBMISSION TO JURISDICTION; WAIVERS
NO WAIVERS, ETC
NETTING
PERIODIC DUE DILIGENCE REVIEW
BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT
MISCELLANEOUS
CONFIDENTIALITY
INTENT
DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
 
   
SECTION 35.
SECTION 36.
SECTION 37.
  CONFLICTS
AUTHORIZATIONS
ACKNOWLEDGEMENT OF ANTI PREDATORY LENDING PRACTICES
 
   
SECTION 38.
SECTION 39.
SECTION 40.
  GENERAL INTERPRETIVE PRINCIPLES
JOINT AND SEVERAL
COMMITMENT FEE
 
   
SCHEDULE 1
  REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS
 
   
SCHEDULE 2
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT F
EXHIBIT G
EXHIBIT H
EXHIBIT I
EXHIBIT J
EXHIBIT K
EXHIBIT L
EXHIBIT M
EXHIBIT N
EXHIBIT O
  AUTHORIZED REPRESENTATIVES
FORM OF TRANSACTION REQUEST
FORM OF OPINION OF COUNSEL
SELLERS’ TAX IDENTIFICATION NUMBERS
EXISTING INDEBTEDNESS
UNDERWRITING GUIDELINES
CERTIFICATE OF AN OFFICER OF THE SELLER
SUBORDINATION AGREEMENT
FORM OF SECTION 7 CERTIFICATE
FINANCIAL COMPLIANCE CERTIFICATE
MORTGAGE LOAN SCHEDULE FIELDS
PURCHASED MORTGAGE LOAN REPORT
APPROVED TAKEOUT INVESTORS
FORM OF REPURCHASE NOTICE
FORM OF SERVICER NOTICE
ASSIGNMENT AND ASSUMPTION

2

MASTER REPURCHASE AGREEMENT

This is a MASTER REPURCHASE AGREEMENT, dated as of July 14, 2006, between
FIELDSTONE INVESTMENT CORPORATION, a Maryland corporation (“FIC” and a
“Seller”), FIELDSTONE MORTGAGE COMPANY, a Maryland corporation, (“FMC”, and
collectively with FIC, the “Sellers”) and JPMORGAN CHASE BANK, N.A., a banking
association organized under the laws of the United States (the “Buyer”).

Section 1. Applicability. From time to time the parties hereto shall enter into
transactions in which the Sellers agree to transfer to Buyer Mortgage Loans
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer
to transfer to the Sellers such Mortgage Loans at a date certain not later than
the Termination Date. Each such transaction shall be referred to herein as a
“Transaction” and shall be governed by this Repurchase Agreement, unless
otherwise agreed in writing.

Section 2. Definitions. As used herein, the following terms shall have the
following meanings (all terms defined in this Section 2 or in other provisions
of this Repurchase Agreement in the singular to have the same meanings when used
in the plural and vice versa).

“40/30 Mortgage Loan” shall mean a Mortgage Loan which has an original term to
maturity of not more than thirty years from commencement of amortization, with a
balloon payment in year thirty based upon a forty year amortization schedule.

“30/15 Mortgage Loan” shall mean a Mortgage Loan which has an original term to
maturity of not more than fifteen years from commencement of amortization, with
a balloon payment in year fifteen based upon a thirty year amortization
schedule.

“Acceptable SPV” shall mean a Person which issues Structured Securities Debt.

“Accepted Servicing Practices” shall mean, with respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.

“Additional Purchased Mortgage Loans” shall mean Mortgage Loans or cash provided
by the Sellers to Buyer or its designee pursuant to Section 4 of this Repurchase
Agreement.

“Adjusted Tangible Net Worth” shall mean for the Sellers, the amount that would,
in conformity with GAAP, equal the stockholder’s equity included on the balance
sheet of the Sellers and their Subsidiaries, plus any preferred stock not
already included in the calculation of stockholder’s equity, plus any
Indebtedness of the Sellers and their Subsidiaries that is fully subordinated to
any obligations arising under this Repurchase Agreement, plus other
comprehensive loss arising from the FASB 133, minus any intangibles or goodwill
(as defined under GAAP), minus any advances between the Sellers and their
Affiliates (other than consolidated subsidiaries or between FIC and FMC), minus
any loans or advances to officers or directors of the Sellers (as reported under
GAAP), minus other comprehensive income arising from FASB 133; provided,
however, that the non-cash effect (gain or loss) of any mark-to-market
adjustments made directly to stockholder’s equity for fluctuation of the value
of financial instruments as mandated under FASB 133 shall be excluded from the
calculation of Adjusted Tangible Net Worth.

“Affiliate” shall mean with respect to any Person, any “affiliate” of such
Person, as such term is defined in the Bankruptcy Code.

“Aged Mortgage Loan” shall mean a Mortgage Loan (other than a Repurchased
Mortgage Loan) which has been subject to a Transaction hereunder for a period of
greater than 120 days but not greater than 180 days.

“Agency” shall mean Freddie Mac or Fannie Mae, as applicable.

“Agency Approval” shall have the meaning set forth in Section 12(x) hereof.

“ALTA” shall mean the American Land Title Association or any successor in
interest thereto.

“Alt-A Mortgage Loan” shall mean a Mortgage Loan originated in accordance with
the criteria set forth in the Underwriting Guidelines, all of the proceeds of
which (other than proceeds used to pay closing costs) were used to finance the
acquisition of the Mortgaged Property, and which such Mortgage Loan has (a) a
CLTV of 95% or less or (b) a Mortgagor with a FICO score of 600 or greater.

“Anti-Money Laundering Laws” shall have the meaning set forth in Section 11(ee)
hereof.

“Appraisal” shall mean an Appraisal by a licensed appraiser selected in
accordance with Agency guidelines and not identified to any Seller as an
unacceptable appraiser by an Agency, and who is experienced in estimating the
value of property of that same type in the community where it is located, and
who — unless approved by the Buyer on a case-by-case basis — is not a director,
officer or employee of any Seller or any of their Affiliates, or related as a
parent, sibling, child or first cousin to any Seller or any of their Affiliates’
respective directors or officers or any of their spouses, a signed copy of the
written report of which Appraisal is in the possession of any Seller or the
Servicer.

“Appraised Value” shall mean the value set forth in an Appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.

“Asset Value”:

(a) Asset Value shall mean, with respect to each Eligible Mortgage Loan, the
lesser of:

(i) (A)  other than with respect to any Mortgage Loan subject to (B), (C), (D),
or (E) below, the applicable Purchase Price Percentage multiplied by the current
outstanding principal balance of such Mortgage Loan;

(B) if such Mortgage Loan was originated by either Seller or an Affiliate
thereof, the applicable Purchase Price Percentage multiplied by the outstanding
principal balance of such Mortgage Loan at the time of origination;

(C) if such Mortgage Loan was directly or indirectly acquired by either Seller
or an Affiliate thereof from a mortgage broker or a correspondent that is not an
Affiliate of either Seller, the applicable Purchase Price Percentage multiplied
by the purchase price paid for such Mortgage Loan by such Seller;

(D) if such Mortgage Loan is a Repurchased Mortgage Loan, the applicable
Purchase Price Percentage multiplied by the lesser of such Mortgage Loan’s most
recent BPO or Appraised Value, net of any senior lien; and

(ii) the applicable Purchase Price Percentage multiplied by the Market Value of
such Mortgage Loan.

(b) Without limiting the generality of the foregoing, the Sellers acknowledge
that the Asset Value of a Purchased Mortgage Loan may be reduced to zero by
Buyer if:

(i) such Purchased Mortgage Loan ceases to be an Eligible Mortgage Loan;

(ii) the Purchased Mortgage Loan has been released from the possession of the
Custodian under the Custodial Agreement (other than to a Takeout Investor
pursuant to a bailee letter) for a period in excess of 10 Business Days;

(iii) the Purchased Mortgage Loan has been released from the possession of the
Custodian under the Custodial Agreement to a Takeout Investor pursuant to a
bailee letter for a period in excess of 45 calendar days;

(iv) the Purchased Mortgage Loan has been subject to a Transaction for a period
of greater than (a) 120 days with respect to Mortgage Loans other than
Repurchased Mortgage Loans or Aged Mortgage Loans, (b) 180 days with respect to
Aged Mortgage Loans (other than Repurchased Mortgage Loans) and (c) 365 days
with respect to Repurchased Mortgage Loans;

(v) such Purchased Mortgage Loan is a Non-Performing Mortgage Loan (other than a
Repurchased Mortgage Loan);

(vi) an Early Payment Default occurs with respect to such Purchased Mortgage
Loan;

(vii) the Buyer has determined that the Purchased Mortgage Loan is not eligible
for whole loan sale or securitization in a transaction consistent with the
prevailing sale and securitization industry;

(viii) the Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the
related Mortgage File has not been received and certified by the Custodian by
the seventh (7th) Business Day following the related Purchase Date (other than a
Wet-Ink Mortgage Loan for which the related Mortgage File was received by the
Custodian by the seventh (7th) Business Day following the related Purchase Date
but was found by the Custodian to be deficient in some manner which, in the
Custodian’s reasonable determination, represents a condition correctable by the
Seller within ten (10) Business Days);

(ix) such Purchased Mortgage Loan has an origination date earlier than
ninety (90) days prior to the related Purchase Date;

(x) such Purchased Mortgage Loan is a Repurchased Mortgage Loan for which an
Appraisal or BPO has not been obtained within ninety (90) days following the
respective Seller’s acquisition of such Repurchased Mortgage Loan;

(xi) such Purchased Mortgage Loan is a Conforming Mortgage Loan that is not
subject to a Takeout Commitment or otherwise fully hedged by a committed forward
sale of MBS (to be created from a pool of Conforming Mortgage Loans);

(xii) such Purchased Mortgage Loan is a Jumbo Mortgage Loan or Super Jumbo
Mortgage Loan that is not subject to a Takeout Commitment on the Purchase Date,
or subsequent to the Purchase Date, becomes no longer subject to a Takeout
Commitment and remains not subject to a Takeout Commitment for more than
ten (10) Business Days;

(xiii) the Mortgagor of such Purchased Mortgage Loan is an Affiliate, officer or
director of any Seller or any Affiliate of any Seller;

(xiv) such Purchased Mortgage Loan is a Non-Owner Occupied Mortgage Loan or
Alt-A Mortgage Loan, in either case, with a CLTV in excess of 95%;

(xv) such Purchased Mortgage Loan is a Repurchased Mortgage Loan for which it
has become reasonably apparent to the relevant Seller that the prospects for
collection of the related assets are materially impaired;

(xvi) such Purchased Mortgage Loan is a Repurchased Mortgage Loan for which the
Buyer gives the relevant Seller written notice of Buyer’s determination that the
prospects for payment are materially impaired and the relevant Seller is unable
to furnish the Buyer, on or before fifteen (15) days after receipt of such
notice, evidence reasonably sufficient to convince the Buyer that such prospects
are not materially impaired;

(xvii) when such Purchased Mortgage Loan is added to all other Purchased
Mortgage Loans, the weighted average FICO score of all Alt-A Mortgage Loans that
are Purchased Mortgage Loans is less than 680; or

(xviii) such Purchased Mortgage Loan is a Repurchased Mortgage Loan for which
the Mortgaged Property has been foreclosed upon or has been converted to REO
Property.

(c) The aggregate Asset Value of all Mortgage Loans that are Wet-Ink Mortgage
Loans during the first four (4) Business Days and the last four (4) Business
Days of each calendar month shall not exceed 80% of the Maximum Committed
Purchase Price.

(d) The aggregate Asset Value of all Mortgage Loans that are Wet-Ink Mortgage
Loans during the fifth (5th), sixth (6th) and seventh (7th) Business Days of
each calendar month shall not exceed 55% of the Maximum Committed Purchase
Price.

(e) The aggregate Asset Value of all Mortgage Loans that are Wet-Ink Mortgage
Loans other than during the first seven (7) Business Days and the last four (4)
Business Days of each calendar month shall not exceed 45% of the of the Maximum
Committed Purchase Price.

(f) The aggregate Asset Value of all Mortgage Loans that are Wet-Ink Mortgage
Loans for which the related Mortgage File was received by the Custodian by the
seventh (7th) Business Day following the related Purchase Date but was found by
the Custodian to be deficient in some manner which, in the Custodian’s
reasonable determination, represents a condition correctable by the Seller
within ten (10) Business Days shall not exceed $5 million.

(g) The aggregate Asset Value of all Mortgage Loans that are Aged Mortgage Loans
shall not exceed 5% of the Maximum Committed Purchase Price.

(h) The aggregate Asset Value of all Mortgage Loans that are Delinquent Mortgage
Loans shall not exceed 5% of the Maximum Committed Purchase Price.

(i) The aggregate Asset Value of all Mortgage Loans that are Non-Owner Occupied
Mortgage Loans shall not exceed 8% of the Maximum Committed Purchase Price.

(j) The aggregate Asset Value of all Mortgage Loans that are Jumbo Mortgage
Loans and Super Jumbo Mortgage Loans, combined, shall not exceed 25% of the
Maximum Committed Purchase Price.

(k) The aggregate Asset Value of all Mortgage Loans that are Super Jumbo
Mortgage Loans shall not exceed 5% of the Maximum Committed Purchase Price.

(l) The aggregate Asset Value of all Mortgage Loans that are Second Lien
Mortgage Loans shall not exceed 15% of the Maximum Committed Purchase Price.

(m) The aggregate Asset Value of all Mortgage Loans that are Townhouse or Condo
Mortgage Loans, combined, shall not exceed 10% of the Maximum Committed Purchase
Price.

(n) The aggregate Asset Value of all Mortgage Loans that are Subprime Mortgage
Loans shall not exceed 65% of the Maximum Committed Purchase Price.

(o) The aggregate Asset Value of all Mortgage Loans that are Subprime Mortgage
Loans with (i) a FICO score of less than 625 and (ii) an LTV greater than 90%
shall not exceed 10% of the Maximum Committed Purchase Price.

(p) The aggregate Asset Value of all Mortgage Loans that are Subprime Mortgage
Loans with a “C” credit grade under the Underwriting Guidelines shall not exceed
5% of the Maximum Committed Purchase Price.

(q) The aggregate Asset Value of all Mortgage Loans that are Repurchased
Mortgage Loans shall not exceed 5% of the Maximum Committed Purchase Price.

“Assignment and Acceptance” shall have the meaning specified in Section 22
hereof.

“Authorized Representative” shall mean, for the purposes of this Repurchase
Agreement only, an agent of the applicable party, as listed on Schedule 2
hereto, as such Schedule 2 may be amended from time to time.

“Available Borrowing Capacity” shall mean available and unused borrowing
capacity which may be drawn upon by the Sellers on a next Business Day basis.
Borrowing capacity shall not be deemed part of the Available Borrowing Capacity
if any event or circumstance has occurred which would prevent the Sellers from
drawing on the borrowing capacity or cause the related lender to have no
obligation to make funds available.

“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as
amended from time to time.

“BPO” shall mean an opinion of the fair market value of a Mortgaged Property
given by a licensed real estate agent or broker (who is not an employee or
Affiliate of any Seller) which generally includes three comparable sales and
three comparable listings.

“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) any
day on which banking institutions are authorized or required by law, executive
order or governmental decree to be closed in the States of New York or Texas.

“Buyer” shall mean JPMorgan Chase Bank, N.A., its successors in interest and
assigns, and with respect to Section 7, its participants.

“Capital Lease Obligations” shall mean, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Repurchase Agreement, the amount of
such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.

“Cash Equivalents” shall mean (a) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of Buyer or of any commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
of Buyer or of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than seven days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-1 or the
equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in
either case maturing within 90 days after the day of acquisition, (e) securities
with maturities of 90 days or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s,
(f) securities with maturities of 90 days or less from the date of acquisition
backed by standby letters of credit issued by Buyer or any commercial bank
satisfying the requirements of clause (b) of this definition or (g) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.

“Change in Control” shall mean:

(a) with respect to FIC (a) any Person shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the SEC under the 1934 Act except that for
purposes of this definition, a Person shall not be deemed to have acquired
beneficial ownership of securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person until such tendered securities are
accepted for purchase or exchange), directly or indirectly, of either (i) Voting
Stock of FIC (or other securities convertible into such Voting Stock)
representing more than fifteen percent (15.0%) of the combined voting power of
all Voting Stock of FIC or (ii) more than fifteen percent (15.0%) of the
outstanding shares of any class or series of capital stock of FIC; or (b) any
Person shall have succeeded in having so many of such Person’s nominees elected
to the board of directors of FIC that such nominees, when added to any existing
directors remaining on the board of directors of FIC after such election who
were previously nominated by or are Affiliates of such Person, comprise a
majority of the board of directors of FIC; or

(b) with respect to FMC, all of the capital stock of FMC is not owned by FIC or
a wholly-owned Subsidiary of FIC.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

“Collection Account” shall mean the account established by the Buyer, into which
all Income shall be deposited upon an Event of Default.

“Combined Loan to Value Ratio or CLTV” shall mean, with respect to any Second
Lien Mortgage Loan, the sum of (a) the original principal balance of such
Mortgage Loan and (b) the outstanding principal balance of any related first
lien as of the date of origination of the Mortgage Loan, divided by the
Appraised Value of the Mortgaged Property as of the origination date.

“Commitment Fee” shall mean an amount equal to the product of (x) 0.125% per
annum and (y) the Maximum Committed Purchase Price, payable in accordance with
Section 40 hereof.

“Confidential Terms” shall have the meaning set forth in Section 32 hereof.

“Conforming Mortgage Loan” shall mean a first lien Mortgage Loan that conforms
to the requirements of an Agency for securitization or cash purchase.

“Custodial Agreement” shall mean that certain Custodial Agreement dated as of
the date hereof, among the Sellers, Buyer and Custodian as the same may be
amended from time to time.

“Custodian” shall mean Wells Fargo Bank, N.A. and any successor under the
Custodial Agreement.

“Default” shall mean an Event of Default or an event that with notice or lapse
of time or both would become an Event of Default.

“Defaulting Party” shall have the meaning set forth in Section 28(b) hereof.

“Delinquent Mortgage Loan” shall mean any Mortgage Loan as to which any Monthly
Payment, or part thereof, remains unpaid for at least 30 days but no more than
59 days from the original Due Date for such Monthly Payment.

“Dollars” and “$” shall mean lawful money of the United States of America.

“Due Date” shall mean the day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.

“Due Diligence Costs” shall have the meaning set forth in Section 29 hereof.

“Due Diligence Review” shall mean the performance by Buyer or its designee of
any or all of the reviews permitted under Section 29 hereof with respect to any
or all of the Mortgage Loans, as desired by the Buyer from time to time.

“Early Payment Default” shall mean, with respect to a Mortgage Loan, the failure
of the Mortgagor to make any of the first three Monthly Payments due under the
Mortgage Loan on or before its scheduled Due Date.

“Effective Date” shall mean the date upon which the conditions precedent set
forth in Section 3(a) shall have been satisfied.

“Electronic Tracking Agreement” shall mean an Electronic Tracking Agreement
among Buyer, Sellers, MERS and MERSCORP, Inc., to the extent applicable as the
same may be amended from time to time.

“Eligible Assignee” shall mean (a) a commercial bank having total assets in
excess of One Billion Dollars ($1,000,000,000) or (b) a finance company,
insurance company or other financial institution or fund, acceptable to the
Buyer, that is regularly engaged in making, purchasing or investing in loans and
has total assets in excess of One Billion Dollars ($1,000,000,000).

“Eligible Mortgage Loan” shall mean a Purchased Mortgage Loan which complies
with the representations and warranties set forth on Schedule 1 to this
Repurchase Agreement.

“ERISA” shall, with respect to any Person, mean the Employee Retirement Income
Security Act of 1974, as amended from time to time and any successor thereto,
and the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” shall, with respect to any Person, mean any Person which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which such Person is a member, or (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which such Person
is a member.

“Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

“Event of Default” shall have the meaning specified in Section 13 hereof.

“Event of ERISA Termination” shall mean, with respect to any Seller, mean
(i) with respect to any Plan, a Reportable Event, as defined in Section 4043 of
ERISA, as to which the PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of
such event, or (ii) the withdrawal of such Seller or any ERISA Affiliate thereof
from a Plan during a plan year in which it is a substantial employer, as defined
in Section 4001(a)(2) of ERISA, or (iii) the failure by such Seller or any ERISA
Affiliate thereof to meet the minimum funding standard of Section 412 of the
Code or Section 302 of ERISA with respect to any Plan, including, without
limitation, the failure to make on or before its due date a required installment
under Section 412(m) of the Code or Section 302(e) of ERISA, or (iv) the
distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by such Seller or any ERISA Affiliate thereof to
terminate any Plan, or (v) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a part if
such Seller or any ERISA Affiliate thereof fails to timely provide security to
the Plan in accordance with the provisions of said Sections, or (vi) the
institution by the PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or
(vii) the receipt by such Seller or any ERISA Affiliate thereof of a notice from
a Multiemployer Plan that action of the type described in the previous
clause (vi) has been taken by the PBGC with respect to such Multiemployer Plan,
or (viii) any event or circumstance exists which may reasonably be expected to
constitute grounds for such Seller or any ERISA Affiliate thereof to incur
liability under Title IV of ERISA or under Sections 412(c)(11) or 412(n) of the
Code with respect to any Plan.

“Event of Insolvency” shall mean, for any Person:

(a) that such Person or any Affiliate shall discontinue or abandon operation of
its business; or

(b) that such Person or any Affiliate shall fail generally to, or admit in
writing its inability to, pay its debts as they become due; or

(c) a proceeding shall have been instituted in a court having jurisdiction in
the premises seeking a decree or order for relief in respect of such Person or
any Affiliate in an involuntary case under any applicable bankruptcy,
insolvency, liquidation, reorganization or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of such Person or
any Affiliate, or for any substantial part of its property, or for the
winding-up or liquidation of its affairs and such proceeding shall not have been
dismissed within sixty (60) days of its filing; or

(d) the commencement by such Person or any Affiliate of a voluntary case under
any applicable bankruptcy, insolvency or other similar Requirement of Law now or
hereafter in effect, or such Person’s or any Affiliate’s consent to the entry of
an order for relief in an involuntary case under any such law, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator, conservator or other similar official of such
Person, or for any substantial part of its property, or any general assignment
for the benefit of creditors; or

(e) that such Person or any Affiliate shall become insolvent; or

(f) if such Person or any Affiliate is a corporation, such Person or any
Affiliate, or any of their subsidiaries, shall take any corporate action in
furtherance of, or the action of which would result in any of the actions set
forth in the preceding clause (a), (b), (c), (d) or (e).

“Excluded Taxes” shall have the meaning specified in Section 7(f) hereof.

“Expenses” shall mean all present and future expenses incurred by or on behalf
of the Buyer in connection with this Repurchase Agreement or any of the other
Repurchase Documents and any amendment, supplement or other modification or
waiver related hereto or thereto, whether incurred heretofore or hereafter,
which expenses shall include the cost of title, lien, judgment and other record
searches; attorneys’ fees; and costs of preparing and recording any UCC
financing statements or other filings necessary to perfect the security interest
created hereby.

“Fannie Mae” shall mean Fannie Mae, or any successor thereto.

“FDIA” shall have the meaning set forth in Section 33(c) hereof.

“FHA” shall mean the Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto,
and including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.

“FHA Loan” shall mean a Mortgage Loan which is the subject of an FHA Mortgage
Insurance Contract.

“FHA Mortgage Insurance Contract” shall mean the contractual obligation of the
FHA respecting the insurance of a Mortgage Loan.

“FHA Regulations” shall mean the regulations promulgated by the Department of
Housing and Urban Development under the National Housing Act, as amended from
time to time and codified in 24 Code of Federal Regulations, and other
Department of Housing and Urban Development issuances relating to FHA Loans,
including the related handbooks, circulars, notices and mortgagee letters.

“FICO” shall mean Fair Isaac & Co., or any successor thereto.

“Fidelity Insurance” shall mean insurance coverage with respect to employee
errors, omissions, dishonesty, forgery, theft, disappearance and destruction,
robbery and safe burglary, property (other than money and securities) and
computer fraud.

“Financial Statements” shall mean the consolidated financial statements of the
Sellers prepared in accordance with GAAP for the year or other period then
ended. Such financial statements will be audited, in the case of annual
statements, by Deloitte & Touche LLP or such other independent certified public
accountants approved by the Buyer (which approval shall not be unreasonably
withheld).

“Fitch” shall mean Fitch Ratings, Inc., or any successor thereto.

“Freddie Mac” shall mean Freddie Mac, or any successor thereto.

“Free Adjusted Balances Equivalent” shall mean, for each day of each calendar
month (whether a whole or partial month), the lesser of:

(a) the sum of (x) the daily average of the collected balances in all demand
deposit accounts and non-interest bearing money market accounts maintained by
Sellers (or maintained by an Affiliate of a Seller at such Seller’s request)
with Buyer during that month (although no Seller nor any of their Affiliates
shall have any obligation whatsoever to maintain any deposits with Buyer) less
all amounts required and applied (or to be applied) (i) to satisfy reserve and
deposit insurance requirements allocable to that month and (ii) to compensate
Buyer for (1) services rendered to any Seller or any of their Affiliates for
that month if and to the extent, if any, that such services are not separately
billed and paid for, or (2) any agreed reductions for that month in interest,
fees and other normal banking charges other than interest and fees that are part
of the Obligations to Buyer, with each element calculated in accordance with
Buyer’s system of allocating reserve and deposit insurance requirements, charges
for services and reductions in other normal banking charges, and as that system
may be changed from time to time without notice plus (y) unless the subject
calendar month is January (carryovers from one calendar year to the next are not
permitted), an amount equal to such adjusted daily average collected balances
for the immediately preceding calendar month (including any similarly unapplied
adjusted balances carried over from a prior month or months) not applied to
compensate Buyer for such services or agreed reductions incurred in such prior
month; and

(b) the daily average outstanding Purchase Price owed to Buyer of all
Transactions outstanding during that month.

Buyer’s determination of the Free Adjusted Balances Equivalent for any month
shall be conclusive, absent manifest error.

“GAAP” shall mean generally accepted accounting principles in the United States
of America, applied on a consistent basis and applied to both classification of
items and amounts, and shall include, without limitation, the official
interpretations thereof by the Financial Accounting Standards Board, its
predecessors and successors.

“Governmental Authority” shall mean any nation or government, any state, county,
municipality or other political subdivision thereof or any governmental body,
agency, authority, department or commission (including, without limitation, any
taxing authority) or any instrumentality or officer of any of the foregoing
(including, without limitation, any court or tribunal) exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any corporation, partnership or other entity directly or
indirectly owned by or controlled by the foregoing.

“Gross Margin” shall mean, with respect to each adjustable rate Mortgage Loan,
the fixed percentage amount set forth in each related Mortgage Note which is
added to the Index on each Interest Rate Adjustment Date in order to determine
the related Mortgage Interest Rate for such Mortgage Loan.

“Guarantee” shall mean, as to any Person, any obligation of such Person directly
or indirectly guaranteeing any Indebtedness of any other Person or in any manner
providing for the payment of any Indebtedness of any other Person or otherwise
protecting the holder of such Indebtedness against loss (whether by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, or to take-or-pay or otherwise); provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Guarantee of a Person shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith. The terms “Guarantee” and “Guaranteed”
used as verbs shall have correlative meanings.

“High Cost Mortgage Loan” shall mean a Mortgage Loan classified as (a) a “high
cost” loan under the Home Ownership and Equity Protection Act of 1994 or (b) a
“high cost,” “threshold,” “covered,” or “predatory” loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law, regulation or ordinance imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees).

“High Purchase Price Mortgage Loan” shall mean a Purchased Mortgage Loan
designated as a High Purchase Price Mortgage Loan by a Seller in accordance with
Section 3.

“HUD” shall mean the Department of Housing and Urban Development.

“Income” shall mean, with respect to any Mortgage Loan at any time, any
principal thereof then payable and all interest, dividends or other
distributions payable thereon.

“Indebtedness” shall mean, for any Person, such Person’s: (a) obligations for
borrowed money; (b) obligations representing the deferred purchase price of
Property other than accounts payable arising in the ordinary course of such
Person’s business on terms customary in the trade; (c) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person; (d) obligations that
are evidenced by notes, acceptances, or other instruments; (e) obligations under
repurchase agreements, sale/buy-back agreements or like arrangements;
(f) obligations (contingent or otherwise) of such Person in respect of letters
of credit for the account of such Person; and (g) Capital Lease Obligations.

“Indemnified Party” shall have the meaning specified in Section 15 hereof.

“Index” shall mean, with respect to each adjustable rate Mortgage Loan, the
index as provided in the related Mortgage Note.

“Interest Rate Adjustment Date” shall mean the date on which an adjustment to
the Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.

“Interest Rate Protection Agreement” shall mean, with respect to any or all of
the Mortgage Loans, any short sale of US Treasury Securities, or futures
contract, or mortgage related security, or Eurodollar futures contract, or
options related contract, or interest rate swap, cap or collar agreement or
similar arrangements providing for protection against fluctuations in interest
rates or the exchange of nominal interest obligations, either generally or under
specific contingencies, entered into by a Seller in accordance with the Seller’s
hedging policies and procedures.

“Jumbo Mortgage Loan” shall mean a first lien Mortgage Loan with a principal
balance greater than the maximum balance permitted by the Agencies but not more
than $1,000,000, that, except with respect to the original principal balance
thereof, conforms to the requirements for a Conforming Mortgage Loan.

“Late Payment Fee” shall have the meaning specified in Section 5(a) hereof.

“LIBOR Rate” shall mean, for any day, the rate of interest per annum that is
equal to the rate per annum determined by Buyer to be the average of the
interest rates available to it in accordance with the then-existing practices in
the interbank market in London, England at approximately 11:00 a.m. London time,
as set forth on Telerate Page 3756, for that day for the offering to Buyer by
leading dealers in such interbank market for delivery on that day of one (1)
month U.S. dollar deposits of One Million Dollars ($1,000,000); provided that if
for any reason Buyer cannot determine such rate for any day, then LIBOR Rate for
that day shall be the rate of interest per annum that is equal to the arithmetic
mean of the rates appearing on the Bloomberg British Bankers Association LIBOR
page as of 11:00 a.m., London time, on that date for the offering by such
institutions as are named therein to prime banks in the Eurodollar interbank
market in London, England, for delivery on that day of one (1) month U.S. dollar
deposits of One Million Dollars ($1,000,000).

“Lien” shall mean any lien, claim, charge, restriction, pledge, security
interest, mortgage, deed of trust or other encumbrance.

“Loan Loss Reserve” shall mean such reasonable reserve against future provisions
for loan losses on the Sellers’ respective investments in Mortgage Loans as such
Seller’s management shall establish, as such management may adjust such reserve
from time to time.

“Loan to Value Ratio” or “LTV” shall mean with respect to any Mortgage Loan, the
ratio of (x) the original outstanding principal amount(s) of the Mortgage Loan
to (y) the fair market value of the Mortgaged Property securing it, as such
value is shown in the most recent Appraisal or the most recent BPO (whichever is
less) or (if such Mortgage Loan is covered by a Takeout Commitment) otherwise
determined in accordance with the relevant Takeout Investor’s underwriting
requirements or guidelines.

“Low Purchase Price Mortgage Loan” shall mean a Purchased Mortgage Loan
designated as a Low Purchase Price Mortgage Loan by a Seller in accordance with
Section 3.

“Margin Deficit” shall have the meaning specified in Section 4(a).

“Margin Excess” shall have the meaning specified in Section 4(d).

“Market Value” shall mean, as of any date with respect to any Purchased Mortgage
Loan, the price at which such Mortgage Loan could readily be sold as determined
by the Buyer in its sole discretion. The Market Value of any Purchased Mortgage
Loan will be determined by the Buyer in its sole good faith discretion, taking
into account customary factors such as market conditions, interest rates and
other factors deemed appropriate by the Buyer including to the extent
applicable, any Takeout Commitment related to a Purchased Mortgage Loan.

“Mark-to-Market” shall have the meaning specified in Section 4(a) hereof.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
Property, business, operations, financial condition or prospects of any Seller
or any of their Affiliates, taken as a whole, (b) the ability of any Seller or
any of their Affiliates to perform its obligations under any of the Repurchase
Documents to which it is a party, or (c) the legality, validity or
enforceability of any of the Repurchase Documents.

“Maximum Committed Purchase Price” shall mean $150,000,000.

“MBS” shall mean collateralized mortgage obligations and other mortgage-backed
securities.

“Medium Purchase Price Mortgage Loan” shall mean a Purchased Mortgage Loan
designated as a Medium Purchase Price Mortgage Loan by Seller in accordance with
Section 3.

“MERS” shall mean Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

“MERS Mortgage Loan” shall mean any Purchased Mortgage Loan registered with MERS
on the MERS System.

“MERS System” shall mean the system of recording transfers of mortgages
electronically maintained by MERS.

“Monthly Payment” shall mean the scheduled monthly payment of principal and/or
interest on a Mortgage Loan.

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successors thereto.

“Mortgage” shall mean each mortgage, assignment of rents, security agreement and
fixture filing, deed of trust, deed to secure debt, or similar instrument
creating and evidencing a lien on real property and other property and rights
incidental thereto.

“Mortgage File” shall mean, with respect to a Mortgage Loan, the documents and
instruments relating to such Mortgage Loan and set forth in Exhibit C to the
Custodial Agreement.

“Mortgage Interest Rate” shall mean the rate of interest borne on a Mortgage
Loan from time to time in accordance with the terms of the related Mortgage
Note.

“Mortgage Interest Rate Cap” shall mean, with respect to each adjustable rate
Mortgage Loan, the maximum Mortgage Interest Rate which shall be as permitted in
accordance with the provisions of the related Mortgage Note.

“Mortgage Loan” shall mean any first or second lien, one-to-four-family
residential mortgage loan evidenced by a Mortgage Note and secured by a
Mortgage, which Mortgage Loan is subject to a Transaction hereunder, which in no
event shall include any mortgage loan which (a) is subject to Section 226.32 of
Regulation Z or any similar state law or local (relating to high interest rate
credit/lending transactions), (b) includes any single premium credit life or
accident and health insurance or disability insurance, or (c) is a High Cost
Mortgage Loan.

“Mortgage Loan Schedule” shall mean with respect to any Transaction as of any
date, a mortgage loan schedule in the form of a computer tape or other
electronic medium generated by a Seller and delivered to Buyer and the
Custodian, which provides information (including, without limitation, the
information set forth on Exhibit J attached hereto) relating to the Purchased
Mortgage Loans in a format acceptable to the Buyer.

“Mortgage Loan Schedule and Exception Report” shall have the meaning set forth
in the Custodial Agreement.

“Mortgage Note” shall mean the promissory note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.

“Mortgaged Property” shall mean the real property securing repayment of the debt
evidenced by a Mortgage Note.

“Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any
Person who has assumed or guaranteed the obligations of the obligor thereunder.

“Multiemployer Plan” shall mean, with respect to any Person, a “multiemployer
plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time
during the current year or the immediately preceding five years contributed to
by any Seller or any ERISA Affiliate thereof on behalf of its employees and
which is covered by Title IV of ERISA.

“Negative Amortization Mortgage Loan” shall mean a Mortgage Loan whose Mortgage
Note provides for accrued interest to be added to the outstanding principal
balance to negatively amortize such outstanding principal balance.

“Net Income” shall mean, for any Person for any period, the net income of such
Person for such period as determined in accordance with GAAP.

“Nondefaulting Party” shall have the meaning set forth in Section 28(b) hereof.

“Non-Excluded Taxes” shall have the meaning set forth in Section 7(a) hereof.

“Non-Exempt Buyer” shall have the meaning specified in Section 7(f) hereof.

“Non-Owner Occupied Mortgage Loan” shall mean a Mortgage Loan whereby the
Mortgagor does not occupy the related Mortgaged Property as its primary
residence.

“Non-Performing Mortgage Loan” shall mean (a) any Mortgage Loan as to which any
Monthly Payment, or part thereof, remains unpaid for more than 60 days from the
original Due Date for such Monthly Payment; (b) any Mortgage Loan with respect
to which the related Mortgagor is in bankruptcy or (c) any Mortgage Loan with
respect to which the related Mortgaged Property is in foreclosure.

“Obligations” shall mean any amounts due and payable by the Sellers to Buyer in
connection with a Transaction hereunder, together with interest thereon
(including interest which would be payable as post-petition interest in
connection with any bankruptcy or similar proceeding) and all other fees or
expenses which are payable hereunder or under any of the Repurchase Documents.

“OFAC” shall have the meaning set forth in Section 11(ff) hereof.

“Operating Account” shall mean the account referred to in Section 9(b) hereof.

“Other Taxes” shall have the meaning set forth in Section 7(b) hereof.

“Payment Account” shall mean each of the Seller’s non-interest bearing demand
checking accounts no. 00113327531 (for FIC) and 00100376798 (for FMC) to be
maintained with Buyer and to be used for (a) the Buyer’s deposits of the
Purchase Price to the Sellers and payments constituting the proceeds of
principal from any Purchased Mortgage Loan (other than regular principal and
interest payments on the Purchased Mortgage Loan); (b) the Buyer’s deposits of
principal and interest payments for the Repurchase Price received from a Seller
or for a Seller’s account and (c) only if and when (i) no Default has occurred
unless it has been either cured by the Seller or waived in writing by the Buyer
and (ii) no Event of Default has occurred unless the Buyer has declared in
writing that it has been cured or waived, the Buyer’s transfer to the Operating
Account of (x) the Purchase Price and (y) proceeds from a Takeout Investor in
excess of the Purchase Price. The Payment Account is (and shall continuously be)
part of the Repurchase Assets. The Payment Account shall be subject to setoff by
the Buyer. The Payment Account shall be a controlled account from which the
Sellers shall have no right to directly withdraw funds, but instead such funds
may be withdrawn or paid out only against the order of a designee of the Buyer,
although under the circumstances described in clause (c) of the first sentence
of this definition and subject to the conditions specified in that clause, the
Buyer shall use diligent and reasonable efforts to cause proceeds from a Takeout
Investor in excess of the Purchase Price that are received as therein described
and that are deposited to the Payment Account before 3:00 p.m. (Central Time) on
a Business Day to be transferred to the Operating Account.

“Payment Date” shall mean the fifteenth (15) day of each month, or if such date
is not a Business Day, the prior Business Day.

“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

“Periodic Advance Repurchase Payment” shall have the meaning specified in
Section 5(a).

“Permitted Guaranties” shall mean (a) mortgage repurchase and warehouse
facilities whereby the Sellers are jointly and severally liable thereunder;
(b) mortgage repurchase and warehouse facilities, performance guaranties related
to mortgage loan sale or purchase agreements, leases and third party vendor
agreements whereby FIC guarantees the obligations of FMC thereunder; and
(c) obligations of the Sellers pursuant to surety bonds required in connection
with state licensing of branch offices.

“Permitted Liens” shall mean, with respect to any Mortgaged Property, (i) liens
of current real property taxes and assessments not yet due and payable,
(ii) covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording being acceptable to
mortgage lending institutions generally and specifically referred to in the
lender’s title insurance policy delivered to the Seller and which does not
adversely affect the appraised value of the Mortgaged Property, (iii) in the
case of a Mortgaged Property that is a condominium or an individual unit in a
planned unit development, liens for common charges permitted by statues,
(iv) other matters to which like properties are commonly subject, which do not,
individually or in the aggregate, materially interfere with the benefits of the
security intended to be provided by the related Mortgage or the use, enjoyment,
value or marketability of the related Mortgaged Property.

“Permitted Securitization” shall mean any transaction or series of related
transactions for the sale or financing of Mortgage Loans pursuant to which the
Mortgage Loans are held by or transferred to a Special Purpose Entity, without
recourse against either Seller or its Subsidiaries or any assets or properties
of such Seller or such Subsidiaries for payment of any obligation incurred in
connection with such sale or financing (other than (a) recourse against the
Mortgage Loans held as security by or transferred to the special purpose entity,
(b) recourse against either Seller or its Subsidiaries for liabilities arising
out of the breach of customary sales representations and warranties made in
connection with such securitization that are typical for securitizations of the
type contemplated and (c) recourse against either Seller or its Subsidiaries
arising out of liabilities under interest rate hedging agreements entered into
by such Seller or its Subsidiaries to hedge interest rate risks with respect to
mortgage loans owned by such Seller or its Subsidiaries), where such transaction
or transactions would not violate or be inconsistent with any statute, law,
rule, regulation, judgment, order or decree applicable to such Seller, any of
its Subsidiaries or any of their respective properties or assets (including any
thereof respecting fraudulent transfers or conveyances set forth in any
applicable laws of any jurisdiction respecting the bankruptcy or insolvency of
debtors).

“Person” shall mean any individual, corporation, company, voluntary association,
partnership, joint venture, limited liability company, trust, unincorporated
association or government (or any agency, instrumentality or political
subdivision thereof).

“Plan” shall mean, with respect to any Person, any employee benefit or similar
plan that is or was at any time during the current year or immediately preceding
five years established or maintained by such Person or any ERISA Affiliate
thereof and that is covered by Title IV of ERISA, other than a Multiemployer
Plan.

“PMI Policy” shall mean a policy of primary mortgage guaranty insurance issued
by a Qualified Insurer, as required by this Repurchase Agreement with respect to
certain Mortgage Loans.

“Post-Default Rate” shall mean a rate equal to the sum of (A) the Pricing Rate
and (B) three percent (3.00%).

“Price Differential” shall mean, with respect to any Transaction hereunder as of
any date, the aggregate amount obtained by daily application of the Pricing Rate
(or, during the continuation of an Event of Default, by daily application of the
Post-Default Rate) for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of days during the
period commencing on (and including) the Purchase Date for such Transaction and
ending on (but excluding) the Repurchase Date (reduced by any amount of such
Price Differential previously paid by the Sellers to Buyer with respect to such
Transaction).

“Pricing Rate” shall mean:

(a) with respect to Transactions up to and including the Free Adjusted Balances
Equivalent, a rate per annum equal to the Pricing Spread; and

(b) with respect to Transactions exceeding the Free Adjusted Balances
Equivalent, a rate per annum equal to the sum of: (i) the LIBOR Rate plus
(ii) the applicable Pricing Spread.

Each calculation by the Buyer of the amount of the Pricing Rate shall be
conclusive absent manifest error.

“Pricing Spread” shall mean, so long as no Event of Default has occurred and is
then continuing:

(a) with respect to Transactions up to and including the Free Adjusted Balances
Equivalent:

(i) the subject of which are High Purchase Price Mortgage Loans (other than
Second Lien Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage
Loans), 0.85%;

(ii) the subject of which are Medium Purchase Price Mortgage Loans (other than
Second Lien Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage
Loans), 0.80%;

(iii) the subject of which are Low Purchase Price Mortgage Loans (other than
Second Lien Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage
Loans), 0.75%;

(iv) the subject of which are Second Lien Mortgage Loans (other than Delinquent
Mortgage Loans or Repurchased Mortgage Loans), 0.95%;

(v) the subject of which are Delinquent Mortgage Loans or Repurchased Mortgage
Loans, 0.95%.

(b) with respect to all other Transactions:

(i) the subject of which are High Purchase Price Mortgage Loans (other than
Second Lien Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage
Loans), 0.85%;

(ii) the subject of which are Medium Purchase Price Mortgage Loans (other than
Second Lien Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage
Loans), 0.80%;

(iii) the subject of which are Low Purchase Price Mortgage Loans (other than
Second Lien Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage
Loans), 0.75%;

(iv) the subject of which are Second Lien Mortgage Loans (other than Delinquent
Mortgage Loans or Repurchased Mortgage Loans), 0.95%;

(v) the subject of which are Delinquent Mortgage Loans or Repurchased Mortgage
Loans, 0.95%.

For purposes of this Repurchase Agreement, the Pricing Spread set forth in
clause (a) of this definition will be allocated first to the Purchase Price up
to and including the Free Adjusted Balances Equivalent based on the date on
which the related Transaction becomes subject to this Repurchase Agreement,
commencing from the earliest date to the most recent date. To the extent that
there is availability under the Maximum Committed Purchase Price, but the
Purchase Price of Mortgage Loans proposed by the Sellers for purchase by Buyer
would otherwise exceed the Free Adjusted Balances Equivalent, then to the extent
that such Free Adjusted Balances Equivalent would be exceeded, the Pricing
Spread set forth in clause (b) of this definition shall be applied.

“Prohibited Person” shall have the meaning set forth in Section 11(ff) hereof.

“Property” shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

“PUHC Act” shall mean the Public Utility Holding Company Act of 1935, as
amended.

“Purchase Date” shall mean the date on which Purchased Mortgage Loans are
transferred by a Seller to the Buyer or its designee.

“Purchase Price” shall mean the aggregate Asset Value of the Purchased Mortgage
Loans on the Purchase Date, and thereafter, except where the Buyer and the
Sellers agree otherwise, such Purchase Price decreased by the amount without
duplication, of any cash, Income and Periodic Advance Repurchase Payments
actually received by Buyer pursuant to Section 5 or applied to reduce the
Sellers’ obligations under Section 4(a) hereof.

“Purchase Price Decrease” shall have the meaning set forth in Section 3(e)
hereof.

“Purchase Price Decrease Date” shall have the meaning set forth in Section 3(e)
hereof.

“Purchase Price Percentage” shall mean:

(i) with respect to High Purchase Price Mortgage Loans (other than Second Lien
Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage Loans), 98%;
or

(ii) with respect to Medium Purchase Price Mortgage Loans (other than Second
Lien Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage Loans),
96%; or

(iii) with respect to Low Purchase Price Mortgage Loans (other than Second Lien
Mortgage Loans, Delinquent Mortgage Loans or Repurchased Mortgage Loans), 94%;
or

(iv) with respect to Second Lien Mortgage Loans (other than Delinquent Mortgage
Loans or Repurchased Mortgage Loans), 95%; or

(v) with respect to Delinquent Mortgage Loans or Repurchased Mortgage Loans,
70%.

“Purchased Mortgage Loan Report” shall mean a report, delivered with each
Transaction Request or upon the request of the Buyer, including a Mortgage Loan
Schedule, setting forth information with respect to the Purchased Mortgage Loans
(and Mortgage Loans proposed to be the subject of a Transaction on the related
Purchase Date, if applicable) in the form of Exhibit K.

“Purchased Mortgage Loans” shall mean the Mortgage Loans sold by a Seller to
Buyer in a Transaction, and any Additional Purchased Mortgage Loans as evidenced
by a Trust Receipt.

“Qualified Insurer” shall mean a mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and acceptable under the Underwriting Guidelines.

“Qualified Subordinated Debt” shall mean Indebtedness of any Seller to any
Person (i) the papers evidencing, securing, governing or otherwise related to
which Indebtedness impose covenants and conditions on the debtor under them that
are no more restrictive or onerous than the covenants and conditions imposed on
any Seller, as applicable, under this Repurchase Agreement and (ii) that is
subordinated to the Obligations pursuant to a currently effective and
irrevocable Subordination Agreement approved by the Buyer.

“Rating Agency” shall mean any of S&P, Moody’s or Fitch.

“Register” shall have the meaning specified in Section 22 hereof.

“Regulation D” shall mean Regulation D promulgated by the Board of Governors of
the Federal Reserve System (or any successor), 12 C.F.R. Part 204, or any other
regulation when promulgated to replace the prior Regulation D and having
substantially the same function.

“Regulation Z” shall mean Regulation Z promulgated by the Board of Governors of
the Federal Reserve System (or any successor), 12 C.F.R. Part 226, as the same
may be modified and supplemented and in effect from time to time.

“Regulations T, U and X” shall mean Regulations T, U and X of the Board of
Governors of the Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.

“REIT” shall mean a real estate investment trust, as defined in Section 856 of
the Code, as may be amended from time to time.

“REO Property” shall mean real property acquired by a Seller, including a
Mortgaged Property acquired through foreclosure of a Mortgage Loan or by deed in
lieu of such foreclosure.

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .21,         .22, .24, .26, .27 or .28 of PBGC Reg.
§ 4043.

“Repurchase Agreement” shall mean this Master Repurchase Agreement between Buyer
and the Sellers, dated as of the date hereof as the same may be further amended,
supplemented or otherwise modified in accordance with the terms hereof.

“Repurchase Assets” shall have the meaning provided in Section 8 hereof.

“Repurchase Date” shall mean the date on which the Sellers are to repurchase the
Purchased Mortgage Loans subject to a Transaction from Buyer on a date requested
pursuant to Section 3(d) or on the Termination Date, including any date
determined by application of the provisions of Sections 3 or 14.

“Repurchase Documents” shall mean this Repurchase Agreement, the Custodial
Agreement, the Electronic Tracking Agreement, the Servicer Notice, if any and
the Subordination Agreement, if any.

“Repurchase Price” shall mean the price at which Purchased Mortgage Loans are to
be transferred from Buyer or its designee to the Sellers upon termination of a
Transaction, which will be determined in each case (including Transactions
terminable upon demand) as the sum of the Purchase Price and the Price
Differential as of the date of such determination.

“Repurchase Request” shall mean a written request from a Seller to the Buyer,
substantially in the form of Exhibit M hereto, to repurchase a Purchased
Mortgage Loan.

“Repurchased Mortgage Loan” shall mean a Mortgage Loan (a) which is repurchased
by the Seller as a result of (i) a breach of representations and warranties as
required under the agreed upon terms in which the claimed breach is not a result
of fraud or material misrepresentation of fact by any party to the Mortgage Loan
or consumer credit law violation, or (ii) an early payment default repurchase
obligation, (b) where the claimed breach or early payment default is expressly
identified to Buyer in writing, (c) which is subject to a Transaction hereunder
for no more than 365 days and (d) which has not been foreclosed upon or
converted to REO Property. In addition to the foregoing, in no event will a
Repurchased Mortgage Loan be subject to a Transaction hereunder as a
“Repurchased Mortgage Loan” if there is a breach of representation and warranty
in respect of such Repurchased Mortgage Loan other than the breach identified in
writing to the Buyer pursuant to subclause (b) of this definition.

“Requirement of Law” shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation, procedure or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

“S&P” shall mean Standard & Poor’s Ratings Services, or any successor thereto.

“SEC” shall mean the Securities and Exchange Commission.

“Second Lien Mortgage Loan” shall mean a Mortgage Loan originated in accordance
with the Underwriting Guidelines and secured by a second lien on the related
Mortgaged Property.

“Section 7 Certificate” shall have the meaning specified in Section 7(f)(ii)
hereof.

“Securities Exchange Act of 1934” or “1934 Act” shall have the meaning set forth
in Section 34(a) hereof.

“Securities Investor Protection Act of 1970” or “SIPA” shall have the meaning
set forth in Section 34(a) hereof.

“Seller” shall mean each of Fieldstone Investment Corporation and Fieldstone
Mortgage Company and/or any successor in interest thereto.

“Servicer” shall mean the Seller, or any successor or permitted assigns or any
other Person approved by Buyer in writing (which approval shall not be
unreasonably withheld).

“Servicer Notice” shall mean the notice acknowledged by the Servicer (when the
Seller is not the Servicer) substantially in the form of Exhibit N hereto.

“Servicing Agreement” shall mean a servicing agreement between one or both of
the Sellers and Servicer, as the same may be amended from time to time.

“Single-Employer Plan” shall mean a single-employer plan as defined in
Section 4001(a)(15) of ERISA which is subject to the provisions of Title IV of
ERISA.

“Special Purpose Entity” shall mean an entity structured so that its only
authorized business is to issue MBS or hold passive investments in a manner that
enhances the credit, or diminishes the bankruptcy risks to creditors of, such
entity.

“Statement Date” shall have the meaning set forth in Section 11(g) hereof.

“Structured Securities Debt” shall mean any Indebtedness incurred by an
Acceptable SPV, provided that (i) such Indebtedness is non-recourse to any
shareholder or equity owner of such Acceptable SPV, (ii) such Indebtedness is
publicly issued or privately placed pursuant to a 144(a) offering and (iii) such
Indebtedness is rated by at least one of the Rating Agencies.

“Subordination Agreement” shall mean a written subordination agreement
substantially in the form of Exhibit G hereto that subordinates (x) all present
and future debts and obligations owing by the Sellers (or their Affiliates) to
the Person covered by the Subordination Agreement to (y) the Obligations under
this Repurchase Agreement and the other Repurchase Documents, in both right of
payment and lien priority, and includes, without limitation, subordination terms
included in any indenture or guaranties executed by a Seller or their Affiliates
and reviewed and approved by the Buyer in connection with any Qualified
Subordinated Debt.

“Subprime Mortgage Loan” shall mean a Mortgage Loan originated in accordance
with the Underwriting Guidelines for subprime Mortgage Loans.

“Subsidiary” shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.

“Super Jumbo Mortgage Loan” shall mean a Mortgage Loan that otherwise satisfies
the definition of Jumbo Mortgage Loan, but has an unpaid principal balance in
excess of $1,000,000 but not greater than $1,500,000.

“Takeout Commitment” shall mean a commitment of a Seller to sell one or more
Mortgage Loans to a Takeout Investor, and the corresponding Takeout Investor’s
commitment back to such Seller to effectuate the foregoing.

“Takeout Investor” shall mean any institution listed on Exhibit L hereto which
has made a Takeout Commitment and has been approved by Buyer.

“Taxes” shall have the meaning set forth in Section 7(a) hereof.

“Termination Date” shall mean the date which is 364 days from the date hereof
which shall be July 13, 2007.

“Termination Event” shall have the meaning set forth in Section 13.02 hereof.

“Townhouse or Condo Mortgage Loan” shall mean a Mortgage Loan secured by
(i) real property improved with a single townhouse or (ii) a single condominium
unit and its related undivided interest in common elements of the condominium
project.

“Transaction” has the meaning specified in Section 1.

“Transaction Request” shall mean a request from a Seller to Buyer, substantially
in the form of Exhibit A hereto, to enter into a Transaction.

“Trust Receipt” shall have the meaning set forth in the related Custodial
Agreement.

“Underwriting Guidelines” shall mean the underwriting guidelines of Sellers,
attached hereto as Exhibit E, as such underwriting guidelines may be amended
from time to time in conformity with the terms of this Repurchase Agreement.

“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect
from time to time in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Repurchase Assets or the
continuation, renewal or enforcement thereof is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

“VA” shall mean the U.S. Department of Veterans Affairs, an agency of the United
States of America, or any successor thereto including the Secretary of Veterans
Affairs.

“Voting Stock” shall mean capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.

“Wet-Ink Mortgage Loan” shall mean an Eligible Mortgage Loan (a) that has been
closed and funded; (b) for which the complete Mortgage File is in the possession
of a Seller, the Sellers’ Servicer, a title agent, or a closing attorney and
(c) for which the complete Mortgage File shall be delivered to the Buyer or the
Custodian on or prior to the seventh (7th) Business Day after the related
Purchase Date (unless the related Mortgage File was received by the Custodian by
the seventh (7th) Business Day following the related Purchase Date but was found
by the Custodian to be deficient in some manner which, in the Custodian’s
reasonable determination, represents a condition correctable by the Seller
within ten (10) Business Days).

Section 3. Initiation; Termination.

(a) Conditions Precedent to Initial Transaction. Buyer’s obligation to enter
into the initial Transaction hereunder is subject to the satisfaction,
immediately prior to or concurrently with the making of such Transaction, of the
condition precedent that Buyer shall have received from the Sellers any fees and
expenses payable hereunder, and all of the following documents, each of which
shall be satisfactory to Buyer and its counsel in form and substance:

(i) Repurchase Documents. The Repurchase Documents shall be duly executed by the
parties thereto and delivered to the Buyer;

(ii) Opinions of Counsel. An opinion or opinions of outside counsel to the
Sellers, substantially in the form of Exhibit B;

(iii) Organizational Documents. A certificate of corporate existence of each
Seller delivered to Buyer prior to the Effective Date (or if unavailable, as
soon as available thereafter) and an officer’s certificate substantially in the
form of Exhibit F including certified copies of the articles of incorporation,
by-laws, resolutions and incumbency (or equivalent documents) of such Seller and
of all corporate or other authority for such Seller with respect to the
execution, delivery and performance of the Repurchase Documents and each other
document to be delivered by such Seller from time to time in connection
herewith;

(iv) Security Interest. Evidence that all other actions necessary or, in the
opinion of Buyer, desirable to perfect and protect Buyer’s interest in the
Purchased Mortgage Loans and other Repurchase Assets have been taken, including,
without limitation, UCC searches and duly authorized and filed Uniform
Commercial Code financing statements on Form UCC-1;

(v) Underwriting Guidelines. A true and correct copy of the Underwriting
Guidelines, attached hereto as Exhibit E;

(vi) Insurance. Evidence that Sellers have added Buyer as an additional loss
payee under their Fidelity Insurance;

(vii) Tax Identification Numbers. Tax identification numbers for each Seller, to
be listed on Exhibit C; and

(viii) Other Documents. Such other documents as Buyer may reasonably request, in
form and substance reasonably acceptable to Buyer.

(b) Conditions Precedent to all Transactions. Buyer’s obligation to enter into
each Transaction (including the initial Transaction) is subject to the
satisfaction of the following further conditions precedent, both immediately
prior to entering into such Transaction and also after giving effect thereto to
the intended use thereof:

(i) No Termination Event, Default or Event of Default shall have occurred and be
continuing under the Repurchase Documents;

(ii) Both immediately prior to the Transaction and also after giving effect
thereto and to the intended use thereof, the representations and warranties made
by each Seller in Section 11 hereof, shall be true, correct and complete on and
as of such Purchase Date in all material respects with the same force and effect
as if made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date);

(iii) After giving effect to the requested Transaction, the aggregate
outstanding Purchase Price for all Purchased Mortgage Loans subject to then
outstanding Transactions under this Repurchase Agreement shall not exceed the
Maximum Committed Purchase Price;

(iv) After giving effect to the requested Transaction, the Asset Value of all
Purchased Mortgage Loans exceeds the aggregate Repurchase Price for such
Transactions;

(v) Subject to the Buyer’s right to perform one or more Due Diligence Reviews
pursuant to Section 29 hereof, the Buyer shall have completed its due diligence
review of the Mortgage Loans for each Purchased Mortgage Loan, and such other
documents, records, agreements, instruments, mortgaged properties or information
relating to such Purchased Mortgage Loan as the Buyer in its sole discretion
deems appropriate to review and such review shall be satisfactory to the Buyer
in its sole discretion;

(vi) On or prior to 4:00 p.m. (Central Time) on the related Purchase Date,
Seller shall have delivered to the Buyer (a) a Transaction Request, (c) Mortgage
Loan Schedule and (b) a Purchased Mortgage Loan Report. With respect to Wet-Ink
Mortgage Loans delivered electronically, the Seller shall deliver a Mortgage
Loan Schedule by 4:00 p.m. (Central time) or by 3:00 p.m.(Central time) if
delivered manually;

(vii) The Sellers shall have delivered to the Custodian the Mortgage File with
respect to each Purchased Mortgage Loan (other than a Wet-Ink Mortgage Loan) and
the Custodian shall have issued a Trust Receipt with respect to each such
Purchased Mortgage Loan to the Buyer;

(viii) With respect to each Wet-Ink Mortgage Loan, on the seventh (7th) Business
Day following the applicable Purchase Date and in accordance with the terms of
the Custodial Agreement, Sellers shall deliver to the Custodian the Mortgage
File.

(ix) The Buyer shall have received all fees and expenses of counsel to the Buyer
as contemplated by Sections 15(b) and 29 which amount, at the Buyer’s option,
may be withheld from any Transaction hereunder;

(x) To the extent Sellers are selling Mortgage Loans which are registered on the
MERS® System, the Sellers shall have delivered an Electronic Tracking Agreement
entered into, duly executed and delivered by the parties thereto and being in
full force and effect, free of any modification, breach or waiver;

(xi) None of the following shall have occurred and/or be continuing:

(A) an event or events shall have occurred in the good faith determination of
the Buyer resulting in the effective absence of a “repo market” or comparable
“lending market” for financing debt obligations secured by securities or an
event or events shall have occurred resulting in the Buyer not being able to
finance Purchased Mortgage Loans through the “repo market” or “lending market”
with traditional counterparties at rates which would have been reasonable prior
to the occurrence of such event or events; or

(B) there shall have occurred a material adverse change in the financial
condition of the Buyer which affects (or can reasonably be expected to affect)
materially and adversely the ability of the Buyer to fund its obligations under
this Repurchase Agreement;

(xii) Each Transaction Request delivered by a Seller hereunder shall constitute
a certification by such Seller that all the conditions set forth in this
Section 3(b) (other than clause (xi) hereof) have been satisfied (both as of the
date of such notice or request and as of the date of such purchase); and

(xiii) Upon request, the Buyer shall have received from outside counsel to the
Sellers an updated favorable opinion or opinions, in form and substance
satisfactory to the Buyer, covering and updating such matters that were
originally addressed in the initial opinion issued.

(c) Initiation. (i)  Each Seller shall deliver a Transaction Request to the
Buyer on or prior to 4:00 p.m. (Central time) on the date Seller wishes to enter
into a Transaction. Such Transaction Request shall include a Purchased Mortgage
Loan Report and a Mortgage Loan Schedule (which shall also be delivered via
facsimile to Buyer’s Mortgage Banking Warehouse Services Division).

(ii) The Repurchase Date for each Transaction shall not be later than the date
which is 364 days after the related Purchase Date.

(iii) Subject to the terms and conditions of this Repurchase Agreement, during
such period the Sellers may sell, repurchase and resell Eligible Mortgage Loans
hereunder.

(iv) In no event shall a Transaction be entered into when the Repurchase Date
for such Transaction would be later than the Termination Date.

(v) The Sellers shall deliver to the Custodian the Mortgage File pertaining to
each Eligible Mortgage Loan in accordance with the terms of the Custodial
Agreement.

(vi) Once per calendar month on the first Purchase Date of such calendar month,
with respect to all requested Transactions and all related Purchased Mortgage
Loans, the Sellers shall designate all such Purchased Mortgage Loans as either
Low Purchase Price Mortgage Loans, Medium Purchase Price Mortgage Loans or High
Purchase Price Mortgage Loans. In the event that Seller fails to make such
designation, the Purchase Price election set forth above will not be available
and all Purchased Mortgage Loans in such calendar month shall be treated as Low
Purchase Price Mortgage Loans.

(vii) Once per month during any calendar month and with respect to all High
Purchase Price Mortgage Loans or Medium Purchase Price Mortgage Loans, Sellers
may, by prior written notice to Buyer, elect to transfer cash to the account of
Buyer specified in Section 9; provided that such cash is sufficient to cause the
Purchase Price of such High Purchase Price Mortgage Loans or Medium Purchase
Price Mortgage Loans, recalculated to include such cash, low enough to classify
such High Purchase Price Mortgage Loans as Medium Purchase Price Mortgage Loans
or Low Purchase Price Mortgage Loans or such Medium Purchase Price Mortgage
Loans as Low Purchase Price Mortgage Loans. Any amounts so transferred shall be
allocated to all High Purchase Price Mortgage Loans to effect such
recalculation.

(viii) Subject to the provisions of this Section 3, the Purchase Price will then
be made available to the Sellers by the Buyer transferring, via wire transfer,
in the aggregate amount of such Purchase Price in funds immediately available.

(d) Repurchase. (i)  The Sellers may repurchase Purchased Mortgage Loans without
penalty or premium, subject to the last sentence of this Section 3(d)(i), on any
date. The Repurchase Price payable for the repurchase of any such Purchased
Mortgage Loan shall be reduced as provided in Section 5(d). If the Sellers
intend to make such a repurchase, the Sellers shall deliver to the Buyer a
Repurchase Request, substantially in the form of Exhibit M hereto, at least
one (1) Business Day prior to the requested Repurchase Date. The amounts set
forth on the Repurchase Release shall be applied to the Repurchase Price for the
designated Purchased Mortgage Loans.

(ii) On the Repurchase Date, termination of the Transaction will be effected by
reassignment to a Seller or its designee of the Purchased Mortgage Loans against
the simultaneous transfer of the Repurchase Price to an account of Buyer. The
Sellers are obligated to obtain the Mortgage Files from Buyer or its designee at
the Sellers’ expense on the Repurchase Date.

(e) Purchase Price Decrease. Sellers may at any time, and from time to time,
request a decrease in Purchase Price (a “Purchase Price Decrease”) by sending a
notice to the Buyer at least one (1) Business Day prior to the date that the
applicable Seller intends to effectuate such Purchase Price Decrease, specifying
the date of the Purchase Price Decrease (a “Purchase Price Decrease Date”). The
Purchase Price Decrease amount shall be due and payable in cash on the Purchase
Price Decrease Date specified therein. Notwithstanding the foregoing, any
Purchase Price Decrease must be in an amount not less than $1,000,000.

(f) Delivery of Additional Mortgage Loans. From time to time the Seller may
deliver to the Buyer Mortgage Loans without entering into a new Transaction. The
Seller and Buyer agree that such Mortgage Loans shall be treated as Purchased
Mortgage Loans subject to the existing Transactions hereunder.

Section 4. Margin Amount Maintenance. (a)  If at any time the aggregate Asset
Value of all related Purchased Mortgage Loans subject to all Transactions is
less than the aggregate Purchase Price for all such Transactions (a “Margin
Deficit”), then Buyer may by notice to the Sellers (as such notice is more
particularly set forth below, a “Mark-to-Market”), require the Sellers to
transfer to Buyer or its designee cash or Eligible Mortgage Loans approved by
the Buyer in its sole discretion (“Additional Purchased Mortgage Loans”) so that
the aggregate Asset Value of the Purchased Mortgage Loans, including any such
Additional Purchased Mortgage Loans or cash, will thereupon equal or exceed the
aggregate Repurchase Price for all Transactions. If Buyer delivers a
Mark-to-Market to Sellers on or prior to 9:30 a.m. (Central time) on any
Business Day, then the Sellers shall transfer cash or Additional Purchased
Mortgage Loans to Buyer no later than 4:00 p.m. (Central time) that day. In the
event the Buyer delivers a Mark-to-Market to Sellers after 9:30 a.m. (Central
time) on any Business Day, the Sellers shall be required to transfer cash or
Additional Purchased Mortgage Loans no later than 4:00 p.m. (Central time) on
the subsequent Business Day.

(b) Buyer’s election, in its sole and absolute discretion, not to make a
Mark-to-Market at any time there is a Margin Deficit shall not in any way limit
or impair its right to make a Mark-to-Market at any time a Margin Deficit
exists.

(c) Any cash transferred to the Buyer pursuant to Section 4(a) above shall be
credited to the Repurchase Price of the related Transactions.

(d) On any day on which the aggregate Asset Value of the Purchased Mortgage
Loans subject to Transactions exceeds the then outstanding aggregate Purchase
Price of all Transactions (a “Margin Excess”), so long as no Default or Event of
Default has occurred and is continuing or will result therefrom, the Buyer
shall, upon receipt of written request from Seller, remit cash or release
Purchased Mortgage Loans as requested by the Seller, in either case, in amount
equal to the lesser of (i) the amount requested by the Seller and (ii) such
Margin Excess to Seller. To the extent that the Buyer remits cash to the Seller,
such cash shall be additional Purchase Price with respect to the Transactions.
Any request received by the Buyer after 9:30 a.m. (Central time) shall be
remitted by the Buyer on the next Business Day.

(e) Buyer shall not be obligated to remit an amount or release Purchased
Mortgage Loans requested pursuant to a request for Margin Excess which (i) Buyer
determines is based on erroneous information or would result in a Transaction
other than in accordance with the terms of this Repurchase Agreement or
(ii) does not reflect the current determination of Asset Value as provided in
the definition thereof.

(f) Notwithstanding anything to the contrary herein, if a Margin Deficit occurs
with respect to a Medium Purchase Price Mortgage Loan or a Low Purchase Price
Mortgage Loan, which, if considered to be a High Purchase Price Mortgage Loan,
would not cause a Margin Deficit to occur, then Sellers may transfer to Buyer
cash in an amount at least equal to the Margin Deficit, provided that such cash
is sufficient to ensure such Purchased Mortgage Loan is fully compliant as a
Medium Purchase Price Mortgage Loans or a Low Purchase Price Mortgage Loan, as
applicable.

Section 5. Income Payments. (a)  Notwithstanding that Buyer and the Sellers
intend that the Transactions hereunder be sales to Buyer of the Purchased
Mortgage Loans, the Sellers shall pay to Buyer the accrued and unpaid Price
Differential (less any amount of such Price Differential previously paid by the
Sellers to Buyer) calculated through the last day of each calendar month plus
the amount of any unpaid Margin Deficit (each such payment, a “Periodic Advance
Repurchase Payment”) due and payable in arrears on the later of (i) each Payment
Date and (ii) two (2) Business Days after the Buyer bills the Sellers for such
Periodic Advance Repurchase Payment. Notwithstanding the preceding sentence, if
a Seller fails to make all or part of the Periodic Advance Repurchase Payment by
4:00 p.m. (Central time) on any Payment Date, the Pricing Rate shall be equal to
the Post-Default Rate until the Periodic Advance Repurchase Payment is received
in full by Buyer (any such amounts in excess of the standard Price Differential,
the “Late Payment Fee”). Any payment received after 4:00 p.m. (Central time)
shall be deemed to have been received by the Buyer on the next Business Day

(b) The Sellers shall hold for the benefit of, and in trust for, Buyer all
Income, including without limitation all Income received by or on behalf of the
Sellers with respect to such Purchased Mortgage Loans. All Income shall be held
in trust for Buyer, shall constitute the property of Buyer. With respect to each
Payment Date, the Sellers shall remit all Income as follows:

(i) first, to the payment of all costs and fees payable by the Sellers pursuant
to this Repurchase Agreement;

(ii) second, to the Buyer in payment of any accrued and unpaid Price
Differential;

(iii) third, without limiting the rights of Buyer under Section 4 of this
Repurchase Agreement, to the Buyer, in the amount of any unpaid Margin Deficit;
and

(iv) fourth, to the Sellers.

(c) After the occurrence of a Default or an Event of Default, the Sellers shall
deposit such Income in the Collection Account with the Buyer. All such Income
shall be held in trust for Buyer, shall constitute the property of Buyer and
shall not be commingled with other property of the Sellers or any Affiliate of
the Sellers except as expressly permitted above. Funds deposited in the
Collection Account during any month shall be held therein, in trust for the
Buyer, until the next Payment Date.

(d) Any funds from a Takeout Investor with respect to the purchase by such
Takeout Investor of a Purchased Mortgage Loan shall be sent to the Payment
Account and the Buyer shall promptly apply such funds to the Operating Account
provided that no Default or Event of Default shall have occurred.

(e) Buyer shall offset against the Repurchase Price of each such Transaction all
Income and Periodic Advance Repurchase Payments actually received by Buyer
pursuant to Section 5(a), excluding any Late Payment Fees paid pursuant to
Section 5(a).

Section 6. Requirements of Law. (i)  If any Requirement of Law (other than with
respect to any amendment made to the Buyer’s certificate of incorporation and
by-laws or other organizational or governing documents) or any change in the
interpretation or application thereof or compliance by the Buyer with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:

(ii) shall subject the Buyer to any Tax or increased Tax of any kind whatsoever
with respect to this Repurchase Agreement or any Transaction or change the basis
of taxation of payments to the Buyer in respect thereof;

(iii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, or other extensions of credit
by, or any other acquisition of funds by, any office of the Buyer which is not
otherwise included in the determination of the LIBOR Rate hereunder;

(iv) shall impose on the Buyer any other condition;

and the result of any of the foregoing is to increase the cost to the Buyer, by
an amount which the Buyer deems to be material, of entering, continuing or
maintaining any Transaction or to reduce any amount due or owing hereunder in
respect thereof, then, in any such case, the Sellers shall promptly pay the
Buyer such additional amount or amounts as calculated by the Buyer in good faith
as will compensate the Buyer for such increased cost or reduced amount
receivable.

(b) If the Buyer shall have determined that the adoption of or any change in any
Requirement of Law (other than with respect to any amendment made to the Buyer’s
certificate of incorporation and by-laws or other organizational or governing
documents) regarding capital adequacy or in the interpretation or application
thereof or compliance by the Buyer or any corporation controlling the Buyer with
any request or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority made subsequent to the date hereof
shall have the effect of reducing the rate of return on the Buyer’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which the Buyer or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration the Buyer’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by
the Buyer to be material, then from time to time, the Sellers shall promptly pay
to the Buyer such additional amount or amounts as will compensate the Buyer for
such reduction.

(c) If the Buyer becomes entitled to claim any additional amounts pursuant to
this Section, it shall promptly notify the Sellers of the event by reason of
which it has become so entitled, which notice shall show in reasonable detail
(as determined by the Buyer) the basis for calculation of such additional
amounts. A certificate as to any additional amounts payable pursuant to this
Section submitted by the Buyer to the Sellers shall be conclusive in the absence
of manifest error.

(d) Notwithstanding anything to the contrary, the Sellers shall not be under any
obligation to compensate the Buyer under this Section 6 with respect to any
additional amounts the Buyer becomes entitled to claim hereunder for any period
prior to the date that is 180 days prior to a notice of such claim if the Buyer
knew or would reasonably have been expected to know of the circumstances giving
rise to such additional compensation and of the fact that such circumstances
could reasonably be expected to result in a claim for additional compensation by
reason of such increased cost, reduction in any amount due or owing hereunder or
reduction of the rate of return as set forth in this Section 6.

Section 7. Taxes. (a)  Any and all payments by any Seller under or in respect of
this Repurchase Agreement or any other Repurchase Documents to which such Seller
is a party shall be made free and clear of, and without deduction or withholding
for or on account of, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities (including penalties,
interest and additions to tax) with respect thereto, whether now or hereafter
imposed, levied, collected, withheld or assessed by any taxation authority or
other Governmental Authority (collectively, “Taxes”), unless required by law. If
any Seller shall be required under any applicable Requirement of Law to deduct
or withhold any Taxes from or in respect of any sum payable under or in respect
of this Repurchase Agreement or any of the other Repurchase Documents to the
Buyer, (i) such Seller shall make all such deductions and withholdings in
respect of Taxes, (ii) such Seller shall pay the full amount deducted or
withheld in respect of Taxes to the relevant taxation authority or other
Governmental Authority in accordance with any applicable Requirement of Law, and
(iii) the sum payable by each Seller shall be increased as may be necessary so
that after such Seller has made all required deductions and withholdings
(including deductions and withholdings applicable to additional amounts payable
under this Section 7) such Buyer receives an amount equal to the sum it would
have received had no such deductions or withholdings been made in respect of
Non-Excluded Taxes. For purposes of this Repurchase Agreement the term
“Non-Excluded Taxes” are Taxes other than, in the case of a Buyer, Taxes that
are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the jurisdiction under the laws of which such Buyer is organized or
of its applicable lending office, or any political subdivision thereof, unless
such Taxes are imposed as a result of such Buyer having executed, delivered or
performed its obligations or received payments under, or enforced, this
Repurchase Agreement or any of the other Repurchase Documents (in which case
such Taxes will be treated as Non-Excluded Taxes).

(b) In addition, each Seller hereby agrees to pay any present or future stamp,
recording, documentary, excise, property or value-added taxes, or similar taxes,
charges or levies that arise from any payment made under or in respect of this
Repurchase Agreement or any other Repurchase Document or from the execution,
delivery or registration of, any performance under, or otherwise with respect
to, this Repurchase Agreement or any other Repurchase Document (collectively,
“Other Taxes”).

(c) The Sellers will indemnify the Buyer for, and to hold it harmless against,
the full amount of Non-Excluded Taxes and Other Taxes, and the full amount of
Taxes of any kind imposed by any jurisdiction on amounts payable under this
Section 7 imposed on or paid by such Buyer and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto, provided that the Buyer shall have provided the Sellers with
evidence of payment of Non-Excluded Taxes or Other Taxes, as the case may be.
The indemnity by the Sellers provided for in this Section 7(c) shall apply and
be made whether or not the Non-Excluded Taxes or Other Taxes for which
indemnification hereunder is sought have been correctly or legally asserted.
Amounts payable by the Sellers under the indemnity set forth in this
Section 7(c) shall be paid within ten (10) days from the date on which Buyer
makes written demand therefor. If Buyer receives a tax refund that is solely
attributable to any Taxes as to which Buyer has been indemnified under this
Section 7(c), then Buyer will pay to Seller (net of all out of pocket expenses)
the amount that, in Buyer’s sole good faith discretion, are solely attributable
to such Taxes.

(d) A Buyer pursuant to Section 7(a) shall take all reasonable actions
(consistent with its internal policy and legal and regulatory restrictions)
requested by the Sellers to assist the Sellers, as the case may be, at the sole
expense of Sellers, to recover from the relevant taxation authority or other
Governmental Authority any Taxes in respect of which amounts were paid by the
Sellers pursuant to Sections 7(a), (b), or (c). However, a Buyer will not be
required to take any action that would be, in the sole judgment of a Buyer,
legally inadvisable, or commercially or otherwise disadvantageous to a Buyer in
any respect, and in no event shall the Buyer be required to disclose any tax
returns or any other information that, in the sole judgment of the Buyer is
confidential.

(e) Within thirty (30) days after the date of any payment of Taxes, the Sellers
(or any Person making such payment on behalf of Seller) shall furnish to Buyer
for its own account a certified copy of the original official receipt evidencing
payment thereof. In the case of any payment under or in respect of this
Repurchase Agreement or any of the other Repurchase Documents by or in behalf of
the Sellers through an account or branch outside the United States, or on behalf
of the Sellers by a payer that is not a United States person, if a Seller
determines that no Taxes are payable in respect thereof, Seller shall furnish,
or shall cause such payor to furnish, to the Buyer an opinion of counsel
reasonably acceptable to the Buyer sating that such payment is exempt from
Taxes. For purposes of subsection (e) of this Section 7, the terms “United
States” and “United States person” shall have the meanings specified in
Section 7701 of the Internal Revenue Code.

(f) Each Buyer (including for avoidance of doubt any assignee, successor or
participant) that either (i) is not incorporated under the laws of the United
States, any State thereof, or the District of Columbia or (ii) whose name does
not include “Incorporated,” “Inc.,” “Corporation,” “Corp.,” “P.C.,” “insurance
company,” or “assurance company” (a “Non-Exempt Buyer”) shall deliver or cause
to be delivered to the Sellers the following properly completed and duly
executed documents:

(i) in the case of a Non-Exempt Buyer that is not a United States person, a
complete and executed (x) U.S. Internal Revenue Form W-8BEN with Part II
completed in which Buyer claims the benefits of a tax treaty with the United
States providing for a zero or reduced rate of withholding (or any successor
forms thereto), including all appropriate attachments or (y) a U.S. Internal
Revenue Service Form W-8ECI (or any successor forms thereto); or

(ii) in the case of an individual, (x) a complete and executed U.S. Internal
Revenue Service Form W-8BEN (or any successor forms thereto) and a certificate
substantially in the form of Exhibit H (a “Section 7 Certificate”) or (y) a
complete and executed U.S. Internal Revenue Service Form W-9 (or any successor
forms thereto); or

(iii) in the case of a Non-Exempt Buyer that is organized under the laws of the
United States, any State thereof, or the District of Columbia, a complete and
executed U.S. Internal Revenue Service Form W-9 (or any successor forms
thereto), including all appropriate attachments; or

(iv) in the case of a Non-Exempt Buyer that (x) is not organized under the laws
of the United States, any State thereof, or the District of Columbia and (y) is
treated as a corporation for U.S. federal income tax purposes, a complete and
executed U.S. Internal Revenue Service Form W-8BEN claiming a zero rate of
withholding (or any successor forms thereto) and a Section 7 Certificate; or

(v) in the case of a Non-Exempt Buyer that (A) is treated as a partnership or
other non-corporate entity, and (B) is not organized under the laws of the
United States, any State thereof, or the District of Columbia, (x)(i) a complete
and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms
thereto) (including all required documents and attachments) and (ii) a Section 7
Certificate, and (y) without duplication, with respect to each of its beneficial
owners and the beneficial owners of such beneficial owners looking through
chains of owners to individuals or entities that are treated as corporations for
U.S. federal income tax purposes (all such owners, “beneficial owners”), the
documents that would be required by clause (i), (ii), (iii), (iv), (vi),
(vii) and/or this clause (v) with respect to each such beneficial owner if such
beneficial owner were Buyer, provided, however, that no such documents will be
required with respect to a beneficial owner to the extent the actual Buyer is
determined to be in compliance with the requirements for certification on behalf
of its beneficial owner as may be provided in applicable U.S. Treasury
regulations, or the requirements of this clause (v) are otherwise determined to
be unnecessary, all such determinations under this clause (v) to be made in the
sole discretion of the Sellers, provided, however, that Buyer shall be provided
an opportunity to establish such compliance as reasonable; or

(vi) in the case of a Non-Exempt Buyer that is disregarded for U.S. federal
income tax purposes, the document that would be required by clause (i), (ii),
(iii), (iv), (v), (vii) and/or this clause (vi) of this Section 7(f) with
respect to its beneficial owner if such beneficial owner were the Buyer; or

(vii) in the case of a Non-Exempt Buyer that (A) is not a United States person
and (B) is acting in the capacity as an “intermediary” (as defined in U.S.
Treasury Regulations), (x)(i) a U.S. Internal Revenue Service Form W-8IMY (or
any successor form thereto) (including all required documents and attachments)
and (ii) a Section 7 Certificate, and (y) if the intermediary is a
“non-qualified intermediary” (as defined in U.S. Treasury Regulations), from
each person upon whose behalf the “non-qualified intermediary” is acting the
documents that would be required by clause (i), (ii), (iii), (iv), (v), (vi),
and/or this clause (vii) with respect to each such person if each such person
were Buyer.

If the forms referred to above in this Section 7(f) that are provided by a Buyer
at the time such Buyer first becomes a party to this Repurchase Agreement or,
with respect to a grant of a participation, the effective date thereof, indicate
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be treated as Taxes other than “Non-Excluded Taxes”
(“Excluded Taxes”) and shall not qualify as Non-Excluded Taxes unless and until
such Buyer provides the appropriate form certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate shall be considered Excluded Taxes
solely for the periods governed by such form. If, however, on the date a Person
becomes an assignee, successor or participant to this Repurchase Agreement,
Buyer transferor was entitled to indemnification or additional amounts under
this Section 7, then the Buyer assignee, successor or participant shall be
entitled to indemnification or additional amounts to the extent (and only to the
extent), that the Buyer transferor was entitled to such indemnification or
additional amounts for Non-Excluded Taxes, and the Buyer assignee, successor or
participant shall be entitled to additional indemnification or additional
amounts for any other or additional Non-Excluded Taxes. Any additional Taxes in
respect of a Buyer that result solely and directly from a change in the
applicable lending office of such Buyer shall be treated as Excluded Taxes (and
shall not qualify as Non-Excluded Taxes) unless (A) any such additional Taxes
are imposed as a result of a change in the applicable Requirement of Law, or in
the interpretation or application thereof, occurring after the date of such
change or (B) such change is made at the request of the Seller for the Buyer to
change its applicable lending office.

(g) For any period with respect to which Buyer has failed to provide the Sellers
with the appropriate form, certificate or other document described in
subsection (e) of this Section 7 (other than (i) if such failure is due to a
change in any applicable Requirement of Law, or in the interpretation or
application thereof, occurring after the date on which a form, certificate or
other document originally was required to be provided, (ii) if such form,
certificate or other document otherwise is not required under subsection (e) of
this Section 7, or (iii) if it is legally inadvisable or otherwise commercially
disadvantageous for such Buyer to deliver such form, certificate or other
document), such Buyer shall not be entitled to indemnification or additional
amounts under subsection (a) or (c) of this Section 7 with respect to
Non-Excluded Taxes imposed by the United States by reason of such failure;
provided, however, that should a Buyer become subject to Non-Excluded Taxes
because of its failure to deliver a form, certificate or other document required
hereunder, the Sellers shall take such steps as such Buyer shall reasonably
request, at the sole expense of Buyer, to assist such Buyer in recovering such
Non-Excluded Taxes.

(h) Buyer hereby agrees that, upon the occurrence of any circumstances entitling
such Buyer to indemnification or additional amounts pursuant to this Section 7,
such Buyer shall use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions), at the sole expense of the Sellers, to
designate a different applicable lending office if the making of such a change
would avoid the need for, or materially reduce the amount of, any such
indemnification or additional amounts that may thereafter accrue and would not
be, in the sole judgment of such Buyer, legally inadvisable or commercially or
otherwise disadvantageous to such Buyer in any respect.

(i) If any Buyer entitled to indemnification or additional amounts under any of
the foregoing provisions of this Section 7 shall fail to designate a different
applicable lending office as provided in subsection (g) of this Section 7, then,
so long as no Event of Default shall have occurred and be continuing, a Seller
may cause such Buyer to (and, if such Seller so demands, such Buyer shall)
assign all of its rights and obligations under this Repurchase Agreement to one
or more other Persons identified by such Seller and reasonably acceptable to the
Buyer; provided that if, upon such demand by such Seller, such Buyer elects to
waive its request for indemnification or additional amounts pursuant to this
Section 7, the demand by such Seller for such Buyer to so assign all of its
rights and obligations under this Repurchase Agreement shall thereupon be deemed
withdrawn. Nothing in subsection (g) of this Section 7 or this Section 7(h)
shall affect or postpone any of the rights of any Buyer or any of the
Obligations of such Seller under any of the foregoing provisions of this
Section 7 in any manner.

(j) Without prejudice to the survival of any other agreement of the Sellers
hereunder, the agreements and obligations of the Sellers contained in this
Section 7 shall survive the termination of this Repurchase Agreement. Nothing
contained in this Section 7 shall require the Buyer to make available any of its
tax returns or any other information that it deems to be confidential or
proprietary.

Section 8. Security Interest. Although the parties intend that all Transactions
hereunder be sales and purchases (other than for accounting and tax purposes)
and not loans, in the event any such Transactions are deemed to be loans, each
Seller hereby pledges to Buyer as security for the performance by the Sellers of
their Obligations and hereby grants, assigns and pledges to Buyer a fully
perfected first priority security interest in the Purchased Mortgage Loans, the
records, and all servicing rights related to the Purchased Mortgage Loans, the
Repurchase Documents (to the extent such Repurchase Documents and such Seller’s
right thereunder relate to the Purchased Mortgage Loans), any Property relating
to any Purchased Mortgage Loan or the related Mortgaged Property, any Takeout
Commitments relating to any Purchased Mortgage Loan, all insurance policies and
insurance proceeds relating to any Purchased Mortgage Loan or the related
Mortgaged Property, including but not limited to any payments or proceeds under
any related primary insurance or hazard insurance, any Income relating to any
Purchased Mortgage Loan, the Collection Account, the Payment Account, any
Interest Rate Protection Agreements relating to any Purchased Mortgage Loan, and
any other contract rights, accounts (including any interest of such Seller in
escrow accounts) and any other payments, rights to payment (including payments
of interest or finance charges) and general intangibles to the extent that the
foregoing relates to any Purchased Mortgage Loan and any other assets relating
to the Purchased Mortgage Loans (including, without limitation, any other
accounts) or any interest in the Purchased Mortgage Loans, the servicing of the
Purchased Mortgage Loans, all collateral under any other secured debt facility
(including, without limitation, any facility documented as a repurchase
agreement or similar purchase and sale agreement) between the Sellers or their
Affiliates on the one hand and the Buyer or the Buyer’s Affiliates on the other
(excluding any syndicated credit facility in which a non-Affiliate of the Buyer
is also a creditor), and any proceeds (including the related securitization
proceeds) and distributions and any other property, rights, title or interests
as are specified on a Trust Receipt and Mortgage Loan Schedule and Exception
Report with respect to any of the foregoing, in all instances, whether now owned
or hereafter acquired, now existing or hereafter created (collectively, the
“Repurchase Assets”), provided that no Default, Event of Default or Margin
Deficit exists, the Buyer shall release its security interest in the Purchased
Mortgage Loans upon payment in full to the Buyer of the Repurchase Price with
respect thereto.

The Sellers hereby authorize the Buyer to file such financing statement or
statements relating to the Repurchase Assets without each Seller’s signature
thereon as the Buyer, at its option, may deem appropriate. The Sellers shall pay
the filing costs for any financing statement or statements prepared pursuant to
this Section 8. Upon termination of this Repurchase Agreement and payment by the
Seller of the Repurchase Price for all Purchased Mortgage Loans and all other
amounts due hereunder to the Buyer and the performance of all obligations under
the Repurchase Documents, the Buyer shall release its security interest in any
remaining Repurchase Assets.

Section 9. Payment, Transfer and Custody. (a)  Unless otherwise mutually agreed
in writing, all transfers of funds to be made by the Sellers hereunder shall be
made in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Buyer at the following account maintained by the Buyer:

JPMorgan Chase Bank, N.A.

1111 Fannin, 12th Floor Mail Code TX2-F200

ABA: 021-000-021

Attention: Mortgage Banking Warehouse Services – Wanda Carr

Phone: 713-427-6391

Account Number: 00113327507

For Credit To: Fieldstone

not later than 3:00 p.m. (Central time) for manual entries and 4:00 p.m.
(Central time) for all other entries, on the date on which such payment shall
become due (and each such payment made after such time shall be deemed to have
been made on the next succeeding Business Day). The Sellers acknowledge that
they have no rights of withdrawal from the foregoing account.

(b) On the Purchase Date for each Transaction, ownership of the Purchased
Mortgage Loans shall be transferred to the Buyer or its designee against the
simultaneous transfer of the Purchase Price to the following account of the
Sellers (or as otherwise directed by the Sellers): Account No. 00113327531
(FIC) or 00100376798 (FMC), JPMorgan Chase Bank, N.A., ABA No. 021000021, Attn:
Mortgage Banking Warehouse Services – Wanda Carr, (the “Operating Account”)
simultaneously with the delivery to the Buyer of the Purchased Mortgage Loans
relating to each Transaction. With respect to the Purchased Mortgage Loans being
sold by a Seller on a Purchase Date, each Seller hereby sells, transfers,
conveys and assigns to Buyer or its designee without recourse, but subject to
the terms of this Repurchase Agreement, all the right, title and interest such
Seller in and to the Purchased Mortgage Loans together with all right, title and
interest in and to the proceeds of any related Repurchase Assets.

(c) In connection with such sale, transfer, conveyance and assignment, on or
prior to each Purchase Date, such Seller shall deliver or cause to be delivered
and released to Buyer or its designee the Mortgage File for the related
Purchased Mortgage Loans.

Section 10. Hypothecation or Pledge of Purchased Assets. Title to all Purchased
Mortgage Loans and Repurchase Assets shall pass to Buyer and Buyer shall have
free and unrestricted use of all Purchased Mortgage Loans. Nothing in this
Repurchase Agreement shall preclude the Buyer from engaging in repurchase
transactions with the Purchased Mortgage Loans or otherwise pledging,
repledging, transferring, hypothecating, or rehypothecating the Purchased
Mortgage Loans, but no such transaction shall relieve Buyer of its obligations
to transfer Purchased Mortgage Loans to Sellers pursuant to Section 3. Nothing
contained in this Repurchase Agreement shall obligate the Buyer to segregate any
Purchased Mortgage Loans delivered to the Buyer by the Sellers.

Section 11. Representations. Each Seller represents and warrants to the Buyer,
with respect to itself, that as of the Purchase Date of any Purchased Mortgage
Loans by the Buyer from such Seller and as of the date of this Repurchase
Agreement and any Transaction hereunder and at all times while the Repurchase
Documents and any Transaction hereunder is in full force and effect:

(a) Acting as Principal. The Sellers will engage in such Transactions as
principal (or, if agreed in writing in advance of any Transaction by the other
party hereto, as agent for a disclosed principal).

(b) Mortgage Loan Schedule. The information set forth in the related Mortgage
Loan Schedule and all other information or data furnished by, or on behalf of,
the Sellers to Buyer is complete, true and correct in all material respects, and
Seller acknowledges that Buyer has not verified the accuracy of such information
or data.

(c) Solvency. Neither the Repurchase Documents nor any Transaction thereunder
are entered into in contemplation of insolvency or with intent to hinder, delay
or defraud any of each Seller’s creditors. The transfer of the Mortgage Loans
subject hereto is not undertaken with the intent to hinder, delay or defraud any
of such Seller’s creditors. The Seller is not insolvent within the meaning of 11
U.S.C. Section 101(32) and the transfer and sale of the Mortgage Loans pursuant
hereto (i) will not cause such Seller to become insolvent, (ii) will not result
in any property remaining with such Seller to be unreasonably small capital, and
(iii) will not result in debts that would be beyond such Seller’s ability to pay
as same mature. The Sellers received reasonably equivalent value in exchange for
the transfer and sale of the Purchased Mortgage Loans subject hereto.

(d) No Broker. The Sellers have not dealt with any broker, investment banker,
agent, or other person, except for the Buyer, who may be entitled to any
commission or compensation in connection with the sale of Purchased Mortgage
Loans pursuant to this Repurchase Agreement.

(e) Ability to Perform. The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
the Repurchase Documents to which it is a party on its part to be performed.

(f) Existence. The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the state of Maryland. Seller (a) has all
requisite corporate or other power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted, except where the lack
of such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Material Adverse Effect; and (b) is qualified to do business
and is in good standing in all other jurisdictions in which the nature of the
business conducted by it makes such qualification necessary, except where
failure so to qualify would not be reasonably likely (either individually or in
the aggregate) to have a Material Adverse Effect. The Seller is duly registered
as a mortgage lender or to table fund or acquire loans, as applicable, in each
state in which Mortgage Loans have been or are from time to time originated, to
the extent such registration is required by any applicable Requirement of Law,
except where the failure to register could not reasonably be expected to result
in a Material Adverse Effect.

(g) Financial Statements. FIC has heretofore furnished to the Buyer a copy of
(a) the consolidated balance sheet of FIC and its respective consolidated
Subsidiaries for the fiscal year ended December 31, 2005 and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal year, setting forth in each case in comparative form the figures for
the previous year, with the opinion thereon of Deloitte & Touche, LLP and
(b) the consolidated balance sheet of FIC and its respective consolidated
Subsidiaries for the quarterly fiscal period of Sellers ended March 31, 2006 and
the related consolidated statements of income and retained earnings and of cash
flows for such quarterly fiscal period, setting forth in each case in
comparative form the figures for the previous year. All such financial
statements are complete and correct and fairly present, in all material
respects, the consolidated financial condition of FIC and its Subsidiaries and
the consolidated results of their operations as at such dates and for such
fiscal periods, all in accordance with GAAP applied on a consistent basis. Since
December 31, 2005, there has been no material adverse change in the consolidated
business, operations or financial condition of FIC and its consolidated
Subsidiaries taken as a whole from that set forth in said financial statements
nor is the Seller aware of any state of facts which (without notice or the lapse
of time) would or could result in any such material adverse change. The Seller
does not have, on the date of the statements delivered pursuant to this section
(the “Statement Date”), any liabilities, direct or indirect, fixed or
contingent, matured or unmatured, known or unknown, or liabilities for taxes,
long-term leases or unusual forward or long-term commitments not disclosed by,
or reserved against in, said balance sheet and related statements, and at the
present time there are no material unrealized or anticipated losses from any
loans, advances or other commitments of the Seller which are required to be
disclosed in or reserved against in said balance sheet and related statement
under GAAP.

(h) No Breach. Neither (a) the execution and delivery of the Repurchase
Documents nor (b) the consummation of the transactions therein contemplated to
be entered into by the Seller, in compliance with the terms and provisions
thereof, will conflict with or result in a breach of the charter or by-laws of
the Seller, or any applicable law, rule or regulation, or any order, writ,
injunction or decree of any Governmental Authority, or other material agreement
or instrument to which the Seller or any of its Subsidiaries is a party or by
which any of them or any of their Property is bound or to which any of them is
subject, or constitute a default under any such material agreement or instrument
or result in the creation or imposition of any Lien (except for the Liens
created pursuant to the Repurchase Documents) upon any Property of the Seller or
any of its Subsidiaries pursuant to the terms of any such agreement or
instrument.

(i) Action. The Seller has all necessary corporate or other power, authority and
legal right to execute, deliver and perform its obligations under each of the
Repurchase Documents, as applicable; the execution, delivery and performance by
the Seller of each of the Repurchase Documents have been duly authorized by all
necessary corporate or other action on its part; and each Repurchase Document
has been duly and validly executed and delivered by the Seller, as applicable,
and constitutes a legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms.

(j) Approvals. No authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority or any securities exchange are
necessary for the execution, delivery or performance by the Seller of the
Repurchase Documents or for the legality, validity or enforceability thereof,
except for filings and recordings in respect of the Liens created pursuant to
the Repurchase Documents or those for which the Seller’s failure to obtain them
will not have a Material Adverse Effect.

(k) Enforceability. This Repurchase Agreement and all of the other Repurchase
Documents executed and delivered by the Seller in connection herewith are legal,
valid and binding obligations of the Seller and are enforceable against the
Seller in accordance with their terms except as such enforceability may be
limited by (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors rights generally
and (ii) general principles of equity.

(l) Indebtedness. The Seller does not have any Indebtedness, other than
Permitted Guarantees in the case of FIC, except as disclosed on Exhibit D to
this Repurchase Agreement.

(m) Material Adverse Effect. Since December 31, 2005, there has been no
development or event nor, to Seller’s knowledge, any prospective development or
event, which has had or could have a Material Adverse Effect.

(n) No Default. No Default or Event of Default has occurred and is continuing.

(o) Underwriting Guidelines. The Underwriting Guidelines provided to Buyer are
the true and correct Underwriting Guidelines of the Seller.

(p) Adverse Selection. The Seller has not selected the Purchased Mortgage Loans
in a manner so as to adversely affect Buyer’s interests.

(q) Title to Properties. The Seller and each of its Subsidiaries has good,
valid, insurable (in the case of real property) and marketable title to (i) all
of its material Properties and assets (whether real or personal, tangible or
intangible) that are reflected on or referred to in the Financial Statements
most recently furnished to the Buyer, except for such Properties and assets as
have been disposed of since the date of such current Financial Statements either
in the ordinary course of business or because they were no longer used or useful
in the conduct of its business, and all such Properties and assets are free and
clear of all Liens except Permitted Liens.

(r) Litigation. There are no actions, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are pending or
threatened) or other legal or arbitrable proceedings pending or to the Seller’s
knowledge, against Seller which, either in any one instance or in the aggregate,
is reasonably likely to result in a Material Adverse Effect.

(s) Margin Regulations. The use of all funds acquired by the Sellers under this
Repurchase Agreement will not conflict with or contravene any of Regulations T,
U or X promulgated by the Board of Governors of the Federal Reserve System as
the same may from time to time be amended, supplemented or otherwise modified.

(t) Taxes. (i)  The Seller and its Subsidiaries have timely filed all tax
returns that are required to be filed by them and have timely paid all Taxes,
except for any such Taxes as are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided.

(ii) There are no Liens for Taxes, except for statutory liens for Taxes not yet
due and payable.

(u) Investment Company Act and Public Utility Holding Company Act. None of the
Sellers is an “investment company”, or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.
No Seller nor any of their Subsidiaries is an Affiliate or a Subsidiary of a
“public utility company”, or a “holding company”, or an “affiliate” or a
“subsidiary company” of a “holding company”, as such terms are defined in the
PUHC Act. Further, none of the transactions contemplated under this Repurchase
Agreement shall cause or constitute a violation of any of the provisions, rules,
regulations or orders, of or under the PUHC Act and the PUHC Act does not in any
manner impair the legality, validity or enforceability of the Repurchase
Documents.

(v) Purchased Mortgage Loans. (i)  No Seller has assigned, pledged, or otherwise
conveyed or encumbered any Mortgage Loan to any other Person, and immediately
prior to the sale of such Mortgage Loan to the Buyer, the applicable Seller was
the sole owner of such Mortgage Loan and had good and marketable title thereto,
free and clear of all Liens, in each case except for Liens to be released
simultaneously with the sale to the Buyer hereunder.

(ii) The provisions of this Repurchase Agreement are effective to either
constitute a sale of Repurchase Assets to the Buyer or to create in favor of the
Buyer a valid security interest in all right, title and interest of the Sellers
in, to and under the Repurchase Assets.

(w) Chief Executive Office. The Seller’s chief executive office is, and has
been, located at 11000 Broken Land Parkway, Columbia, Maryland 21044. The
Seller’s jurisdiction of organization is Maryland.

(x) Location of Books and Records. The location where the Seller keeps its books
and records, including all computer tapes and records related to the Repurchase
Assets is its chief executive office.

(y) Reserved.

(z) True and Complete Disclosure. (a) The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Seller to the Buyer in connection with the negotiation, preparation or delivery
of this Repurchase Agreement and the other Repurchase Documents or included
herein or therein or delivered pursuant hereto or thereto (other than with
respect to the Mortgage Loans), when taken as a whole, do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the date
hereof by or on behalf of the Seller to the Buyer in connection with this
Repurchase Agreement and the other Repurchase Documents and the transactions
contemplated hereby (other than with respect to the Mortgage Loans) and thereby
will be true, complete and accurate in every material respect, or (in the case
of projections) based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to a Authorized
Representative of the Seller, after due inquiry, that could reasonably be
expected to have a Material Adverse Effect that has been disclosed herein, in
the other Repurchase Documents or in a report, financial statement, exhibit,
schedule, disclosure letter or other writing furnished to the Buyer for use in
connection with the transactions contemplated hereby or thereby.

(aa) ERISA. (i)  No liability under Section 4062, 4063, 4064 or 4069 of ERISA
has been or is expected by the Seller to be incurred by the Seller or any ERISA
Affiliate thereof with respect to any Plan which is a Single-Employer Plan in an
amount that could reasonably be expected to have a Material Adverse Effect.

(ii) No Plan of the Seller which is a Single-Employer Plan had an accumulated
funding deficiency, whether or not waived, as of the last day of the most recent
fiscal year of such Plan ended prior to the date hereof. None of the Sellers nor
any ERISA Affiliate thereof is (i) required to give security to any Plan which
is a Single-Employer Plan pursuant to Section 401(a) (29) of the Code or
Section 307 of ERISA, or (ii) subject to a Lien in favor of such a Plan under
Section 302(f) of ERISA.

(iii) Each Plan of the Seller, each of its Subsidiaries and each of their ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code, except where the failure to comply would not
result in any Material Adverse Effect.

(iv) None of the Seller nor any of its Subsidiaries has incurred a tax liability
under Section 4975 of the Code or a penalty under Section 502(i) of ERISA in
respect of any Plan which has not been paid in full, except where the incurrence
of such tax or penalty would not result in a Material Adverse Effect.

(v) None of the Seller nor any of its Subsidiaries or any ERISA Affiliate
thereof has incurred or reasonably expects to incur any withdrawal liability
under Section 4201 of ERISA as a result of a complete or partial withdrawal from
a Multiemployer Plan which will result in withdrawal liability to the Seller,
any of its Subsidiaries or any ERISA Affiliate thereof in an amount that could
reasonably be expected to have a Material Adverse Effect.

(bb) Agency Approvals. FMC is an FHA Approved Mortgagee and a VA Approved
Lender. FMC is also approved by Fannie Mae as an approved lender and Freddie Mac
as an approved seller, and, to the extent necessary, approved by the Secretary
of Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act. In each such case, the Seller is in good standing, with no
event having occurred nor the Seller having any reason whatsoever to believe or
suspect will occur, including, without limitation, a change in insurance
coverage which would either make such Seller unable to comply with the
eligibility requirements for maintaining all such applicable approvals or
require notification to the relevant Agency. The Seller has (or has access to)
adequate financial standing, servicing facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the same types
as may from time to time constitute Mortgage Loans and in accordance with
Accepted Servicing Practices.

(cc) No Reliance. The Seller has made its own independent decision to enter into
the Repurchase Documents and each Transaction and as to whether such Transaction
is appropriate and proper for it based upon its own judgment and upon advice
from such advisors (including without limitation, legal counsel and accountants)
as it has deemed necessary. The Seller is not relying upon any advice from Buyer
as to any aspect of the Transactions, including without limitation, the legal,
accounting or tax treatment of such Transactions.

(dd) Plan Assets. The Seller is not an employee benefit plan as defined in
Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the
Code, and the Purchased Mortgage Loans are not “plan assets” within the meaning
of 29 CFR §2510.3-101 in the Sellers’ hands.

(ee) Anti-Money Laundering Laws. The Seller has complied with all applicable
anti-money laundering laws and regulations, including without limitation the USA
Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”); the Seller
has established an anti-money laundering compliance program as required by the
Anti-Money Laundering Laws, has conducted the requisite due diligence in
connection with the origination of each Mortgage Loan for purposes of the
Anti-Money Laundering Laws, including with respect to the legitimacy of the
applicable Mortgagor and the origin of the assets used by the said Mortgagor to
purchase the property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the Anti-Money
Laundering Laws.

(ff) No Prohibited Persons. None of the Seller nor any of its Affiliates,
officers, directors, partners or members, is an entity or person (or to the such
Seller’s knowledge, owned or controlled by an entity or person): (i) that is
listed in the Annex to, or is otherwise subject to the provisions of Executive
Order 13224 issued on September 24, 2001 (“EO13224”); (ii) whose name appears on
the United States Treasury Department’s Office of Foreign Assets Control
(“OFAC”) most current list of “Specifically Designated National and Blocked
Persons” (which list may be published from time to time in various mediums
including, but not limited to, the OFAC website,
http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to commit or
supports “terrorism”, as that term is defined in EO13224; or (iv) who is
otherwise affiliated with any entity or person listed above (any and all parties
or persons described in clauses (i) through (iv) above are herein referred to as
a “Prohibited Person”).

(gg) USA Patriot Act. The Seller acknowledges that pursuant to the requirements
of the USA Patriot Act, the Buyer is required to obtain, verify and record
information that identifies the Sellers, which information includes the name and
address of the Seller and other information that will allow the Buyer to
identify the Seller in accordance with the USA Patriot Act.

(hh) Real Estate Investment Trust. FIC for its current “tax year” (as defined in
the Code) is entitled to a dividends paid deduction under the requirements of
Section 857 of the Code with respect to any dividends paid by it with respect to
each such year for which it claims a deduction in its Form 1120-REIT filed with
the United States Internal Revenue Service for such year, or the requirements in
any successor or replacement provision in the Code, if any.

Section 12. Covenants of the Sellers. On and as of the date of this Repurchase
Agreement and each Purchase Date and each day until this Repurchase Agreement is
no longer in force, each Seller covenants, with respect to itself, as follows:

(a) Preservation of Existence; Compliance with Law. The Seller shall:

(i) Preserve and maintain its legal existence and all of its material rights,
privileges, licenses and franchises necessary for the operation of its business;

(ii) Comply, in all material respects, with the requirements of all applicable
laws, rules, regulations and orders, whether now in effect or hereafter enacted
or promulgated by any applicable Governmental Authority (including, without
limitation, all environmental laws);

(iii) Maintain all material licenses, permits or other approvals necessary for
the Seller to conduct its business and to perform its obligations under the
Repurchase Documents, and shall conduct its business strictly in accordance with
applicable law; and

(iv) Keep adequate records and books of account, in which complete entries will
be made in accordance with GAAP consistently applied.

(b) Taxes. The Sellers and their Subsidiaries shall timely file all tax returns
that are required to be filed by them and shall timely pay all Taxes due, except
for any such Taxes as are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided.

(c) Notice of Proceedings or Adverse Change. The Sellers shall give prompt
notice to the Buyer after a responsible officer of any Seller has any knowledge
of:

(i) the occurrence of any Default which continues for five (5) days or Event of
Default;

(ii) any default or event of default under any Indebtedness of any Seller which
if not cured would reasonably be expected to have a Material Adverse Effect;

(iii) any litigation, investigation, regulatory action or proceeding that is
pending or, to the Seller’s knowledge, threatened against (a) the Seller in any
federal or state court or before any Governmental Authority in which the amount
involved exceeds $20,000,000 and is not covered by insurance, in which
injunctive or similar relief is sought, or which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect and (b) any litigation
or proceeding that is pending or threatened in connection with a material
portion of the Repurchase Assets, which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect;

(iv) and, as soon as reasonably possible, notice of any of the following events:

(A) a material decrease in the amount or material reduction in the scope of
insurance coverage of the Seller, with a copy of evidence of same attached;

(B) any material change in accounting policies or financial reporting practices
of the Seller;

(C) the filing, recording or assessment of any material federal, state or local
tax lien against the Seller, any of its Subsidiaries or any assets of any of
them; and

(D) any other event, circumstance or condition that has resulted, or has a
possibility of resulting, in a Material Adverse Effect.

(d) Financial Reporting. Each Seller shall maintain a system of accounting
established and administered in accordance with GAAP, and FIC shall furnish to
the Buyer:

(i) As soon as available and in any event within one hundred twenty (120) days
after the close of each fiscal year, (A) Financial Statements, including a
statement of income and changes in shareholders’ equity of FIC for such year,
and the related balance sheet as at the end of such year, all in reasonable
detail and accompanied by an opinion of an accounting firm as to said financial
statements and (B) if otherwise prepared in the ordinary course of FIC’s
business, a report and opinion of a firm of independent public accountants that
is a member of the American Institute of Certified Public Accountants, stating
that such firm has examined selected documents and records relating to the
servicing of Mortgage Loans in accordance with the Mortgage Bankers Association
of America’s Uniform Single Audit Program for Mortgage Bankers, or any successor
uniform program, and that, on the basis of such examination, such servicing has
been conducted in compliance with the minimum servicing standards identified
therein, except for such significant exceptions or errors in records that, in
the opinion of such firm, generally accepted auditing standards requires it to
report;

(ii) As soon as available and in any event within sixty (60) days after the
close of each of FIC’s first three fiscal quarters in each fiscal year unaudited
balance sheets and income statements, for the period from the beginning of such
fiscal year to the end of such fiscal year, subject, however, to year end
adjustments;

(iii) As soon as available and in any event within forty-five (45) days after
the end of each calendar month, the unaudited balance sheets of FIC as at the
end of such period and the related unaudited consolidated statements of income
and retained earnings and of cash flows for FIC for such period and the portion
of the fiscal year through the end of such period, subject, however, to year end
adjustments;

(iv) Simultaneously with the furnishing of each of the financial statements to
be delivered pursuant to subsection (ii) above, or monthly upon Buyer’s request,
a certificate in the form of Exhibit I hereto and certified by an executive
officer of FIC;

(v) Promptly, such other information related to such annual reports as the Buyer
may from time to time reasonably request.

(e) Other Reporting. The Seller shall furnish to the Buyer:

(i) A report of Purchased Mortgage Loans prepaid in full, on or before three (3)
Business Days after prepayment of any one or more Purchased Mortgage Loans is
reported to the Seller internally or by any Servicer.

(ii) If the Seller at any time engages in hedging activity, then upon the
request of the Buyer, a hedging coverage report showing, in reasonable detail
and in form and substance acceptable to and approved by the Seller and the
Buyer, the Seller’s hedging coverage of all Purchased Mortgage Loans.

(iii) Monthly, a delinquent mortgage loan report listing each Purchased Mortgage
Loan that is (i) Delinquent and categorized by age of delinquency for
thirty (30), sixty (60) and ninety (90) or more days, (iii) in foreclosure or
(iv) in bankruptcy.

(iv) If requested by Buyer, mortgage loan production reports reflecting the
Seller’s monthly mortgage loan production and acquisition volumes, as well as
its mortgage loan pipeline.

(v) Monthly, a written report from the Seller to the Buyer reflecting principal
payments and prepayments for each Purchased Mortgage Loan.

(vi) As soon as available and in any event within ten (10) days after filing,
copies of (i) all press releases issued by the Seller or any of its
Subsidiaries, (ii) all regular or periodic financial reports, and copies of all
extraordinary or non-routine filings, if any, that shall be filed with the SEC
or any successor agency by or on behalf of the Seller or any of its Subsidiaries
(including single-purpose finance Subsidiaries) and (iii) all such filings
relating to any securities that are or are to be based on, backed by or created
from any Repurchase Assets and which filings are made by or in respect of the
Seller or any of its Subsidiaries;

(vii) Monthly, if applicable, a report summarizing notices received by the
Sellers requesting or demanding that the Sellers repurchase (or pay indemnity or
other compensation in respect of) Mortgage Loans previously sold or otherwise
disposed of by the Sellers to any investor or other Person pursuant to any
express or implied repurchase or indemnity obligation (whether absolute or
contingent and whether or not the Sellers are contesting or intends to contest
the request or demand); and

(viii) Promptly, from time to time, such other information regarding the
business affairs, operations and financial condition of such Seller as the Buyer
may reasonably request.

(f) Inspection of Properties and Books: Protection of Sellers’ Proprietary
Information. Permit authorized representatives of Buyer to discuss the business,
operations, assets and financial condition of the Seller and its Subsidiaries
with their respective officers, employees and independent accountants, perform
audits of the Seller’s operations and examine its books of account and make
copies or extracts of them, all at such reasonable times as Buyer may request,
for the purpose of enforcing its and Buyer’s rights and performing its duties
under this Agreement. Buyer will notify the Seller before Buyer contacts its
accountants and the Seller may have its representatives in attendance at any
meetings between the officers or other representatives of Buyer and such
accountants held in accordance with this authorizations. Buyer agrees to take
reasonable steps to prevent disclosure to third parties of any proprietary
information obtained from any such inspections and discussions or from any
financial statements or reports furnished by the Seller to Buyer pursuant to
this Repurchase Agreement and to use commercially reasonable efforts to maintain
the confidential nature of such material; provided that this restriction shall
not apply to information that (i) at the time in question has already entered
the public domain, (ii) is required to be disclosed by any Requirement of Law
(including pursuant to any examination, inspection or investigation by any
Governmental Authority having regulatory jurisdiction over Buyer), (iii) is
furnished by Buyer to purchasers or prospective purchasers have agreed to be
subject to restrictions substantially identical to those contained in this
sentence, or (iv) the disclosure of which Buyer deems necessary to protect its
interests herein.

(g) Reimbursement of Expenses. On the date of execution of this Repurchase
Agreement, the Sellers shall reimburse the Buyer for all reasonable out of
pocket expenses incurred by the Buyer on or prior to such date. From and after
such date, the Sellers shall promptly reimburse the Buyer for all reasonable out
of pocket expenses as the same are incurred by the Buyer and within thirty (30)
days of the receipt of invoices therefor.

(h) Further Assurances. The Seller shall execute and deliver to the Buyer all
further documents, financing statements, agreements and instruments, and take
all further action that may be required under applicable law, or that the Buyer
may reasonably request, in order to effectuate the transactions contemplated by
this Repurchase Agreement and the Repurchase Documents or, without limiting any
of the foregoing, to grant, preserve, protect and perfect the validity and
first-priority of the security interests created or intended to be created
hereby. The Seller shall do all things necessary to preserve the Repurchase
Assets so that they remain subject to a first priority perfected security
interest hereunder. Without limiting the foregoing, the Seller will comply with
all rules, regulations, and other laws of any Governmental Authority and cause
the Repurchase Assets to comply with all applicable rules, regulations and other
laws. The Seller will not allow any default for which the Seller is responsible
to occur under any Repurchase Assets or any Repurchase Document and the Seller
shall fully perform or cause to be performed when due all of its obligations
under any Repurchase Assets or the Repurchase Documents. The Seller will keep
the Buyer informed of the current name, address and contact information
concerning the Seller’s other mortgage warehouse credit and repurchase
facilities and will cooperate and assist the Buyer in exchanging information
with such others (and their document custodians or trustees) to prevent and
promptly correct conflicting claims to and interests in Repurchase Assets
between or among lenders or repurchase facilities counterparties.

(i) True and Correct Information. All information, reports, exhibits, schedules,
financial statements or certificates of the Seller or any of its Affiliates
thereof or any of their officers furnished to Buyer hereunder and during Buyer’s
diligence of any Seller are and will be true and complete in all material
respects and do not omit to disclose any material facts necessary to make the
statements therein or therein, in light of the circumstances in which they are
made, not misleading. All required financial statements, information and reports
delivered by any Seller to the Buyer pursuant to this Repurchase Agreement shall
be prepared in accordance with GAAP, or in applicable, to SEC filings, the
appropriate SEC accounting requirements.

(j) ERISA Events. (i)  Promptly upon becoming aware of the occurrence of any
Event of ERISA Termination which together with all other Events of ERISA
Termination occurring within the prior 12 months involve a payment of money by
or a potential aggregate liability of the Sellers or any ERISA Affiliate thereof
or any combination of such entities in excess of $10,000,000, the Seller shall
give the Buyer a written notice specifying the nature thereof, what action the
Seller or any ERISA Affiliate thereof has taken and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;

(ii) Promptly upon receipt thereof, the Seller shall furnish to the Buyer copies
of (i) all notices received by the Seller or any ERISA Affiliate thereof of the
PBGC’s intent to terminate any Plan or to have a trustee appointed to administer
any Plan; (ii) all notices received by the Seller or any ERISA Affiliate thereof
from the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA
involving a withdrawal liability in excess of $10,000,000; and (iii) all funding
waiver requests filed by the Seller or any ERISA Affiliate thereof with the
Internal Revenue Service with respect to any Plan, the accrued benefits of which
exceed the present value of the plan assets as of the date the waiver request is
filed by more than $10,000,000, and all communications received by the Seller or
any ERISA Affiliate thereof from the Internal Revenue Service with respect to
any such funding waiver request.

(k) Financial Covenants.

(i) Maintenance of Adjusted Tangible Net Worth. FIC shall at all times maintain
an Adjusted Tangible Net Worth, on a consolidated basis, of at least
$400,000,000.

(ii) Indebtedness to Adjusted Tangible Net Worth Ratio. The Sellers’ (i)
combined ratio of consolidated Indebtedness to Adjusted Tangible Net Worth shall
not exceed 16:1 and (ii) combined ratio of consolidated Indebtedness (net of
non-recourse Indebtedness) to Adjusted Tangible Net Worth shall not exceed 10:1.

(iii) Non-Structured Securities Indebtedness to Adjusted Tangible Net Worth
Ratio. The Sellers’ ratio of consolidated Indebtedness less Structured
Securities Debt to Adjusted Tangible Net Worth shall not exceed 10:1.

(iv) Maintenance of Liquidity. FIC, on a consolidated basis, shall at all times
have unencumbered cash, Cash Equivalents and Available Borrowing Capacity on
unencumbered assets that could be drawn against (taking into account required
haircuts) under committed warehouse and repurchase facilities in an amount equal
to not less than $20,000,000.

(v) Profitability. FIC, on a consolidated basis, shall not permit, for any
two (2) consecutive calendar quarters, Net Income for such two (2) consecutive
calendar quarters, to be less than $1.00 (without regard to unrealized gains or
losses from mark to market valuations resulting from FIC’s Interest Rate
Protection Agreements during such periods).

(l) Intentionally Omitted.

(m) No Other Debt. Neither Seller shall directly or indirectly create any
Indebtedness (or suffer any Indebtedness to exist) or assume, guarantee, endorse
or otherwise become liable for the Indebtedness or obligation of any Person
except:

(i) Indebtedness to the Buyer under this Agreement;

(ii) business insurance premium financing incurred by such Seller in the
ordinary course of such Seller’s mortgage banking business;

(iii) Indebtedness under repurchase agreements and reverse repurchase agreements
for investment securities with one or more reputable securities broker-dealers;

(iv) guarantees by such Seller of Indebtedness of a consolidated, wholly-owned
Subsidiary that is a Special Purpose Entity under repurchase agreements and
reverse repurchase agreements for investment securities with one or more
reputable securities broker-dealers;

(v) principal of Indebtedness under capitalized equipment leases or equipment
purchase money obligations for equipment acquired in the ordinary course of such
Seller’s business, which together with principal of Indebtedness under
capitalized equipment leases or equipment purchase money obligations for
equipment acquired in the ordinary course of business by the other Seller, does
not exceed $10,000,000;

(vi) Qualified Subordinated Debt;

(vii) unsecured Indebtedness of one Seller to the other Seller;

(viii) indebtedness under mortgage warehouse lines of credit and Mortgage Loan
repurchase agreements with one or more reputable warehouse lenders or buyers;

(ix) Indebtedness incurred in connection with Permitted Securitizations; and

(x) Permitted Guaranties.

(n) Insurance. The Seller shall continue to maintain Fidelity Insurance in an
aggregate amount at least equal to $1,000,000. The Seller shall maintain
Fidelity Insurance in respect of its officers, employees and agents, with
respect to any claims made in connection with all or any portion of the
Repurchase Assets. The Seller shall maintain liability insurance protecting the
Seller and fire and other hazard insurance on its respective properties from
which it conducts its business, with responsible insurance companies, in such
amounts and against such risks as is customarily carried by similar businesses
operating in the same vicinity. Copies of such policies shall be furnished to
the Buyer upon the Buyer’s request made from time to time and without cost to
the Buyer.

(o) Books and Records. The Seller shall, to the extent practicable, maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Repurchase Assets in
the event of the destruction of the originals thereof), and keep and maintain or
obtain, as and when required, all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Repurchase Assets.

(p) Illegal Activities. The Seller shall not engage in any conduct or activity
that could subject their respective assets to forfeiture or seizure.

(q) Material Change in Business. The Seller shall continue in the residential
mortgage lending business as its principal and core business.

(r) Limitation on Dividends and Distributions. Following the occurrence and
during the continuation of an Event of Default or if an Event of Default would
result therefrom, FIC shall not make any distribution to any shareholder or
equity owner of FIC, either directly or indirectly.

(s) Disposition of Assets; Liens. None of the Sellers shall cause any of the
Repurchase Assets to be sold, pledged, assigned or transferred; nor shall any
Seller create, incur, assume or suffer to exist any mortgage, pledge, Lien,
charge or other encumbrance of any nature whatsoever on any of the Repurchase
Assets, whether real, personal or mixed, now or hereafter owned, other than
Liens in favor of the Buyer.

(t) Transactions with Affiliates. None of the Sellers shall enter into any
transaction with any Affiliate, except upon fair and reasonable terms no less
favorable than the applicable Seller could obtain in a comparable arm’s-length
transaction with a Person who is not an Affiliate and, after giving effect to
any and all of which transactions, there is no violation of any of
Sections 12(k), 12(m) and 13.01; provided, however, this Section 12(t) shall not
apply to transactions (i) between the Sellers and (ii) transactions relating to
Permitted Securitizations.

(u) ERISA Matters. (i)  The Seller shall not permit any event or condition which
is described in any of clauses (i) through (vii) of the definition of “Event of
ERISA Termination” to occur or exist with respect to any Plan or Multiemployer
Plan if such event or condition, together with all other events or conditions
described in the definition of Event of ERISA Termination occurring within the
prior 12 months, involves the payment of money by or an incurrence of liability
of the Seller or any ERISA Affiliate thereof, or any combination of such
entities in an amount in excess of $10,000,000.

(ii) The Seller shall not be an employee benefit plan as defined in Section 3 of
Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code and the
Sellers shall not use “plan assets” within the meaning of 29 CFR §2510.3-101 to
engage in this Repurchase Agreement or the Transactions hereunder.

(v) Consolidations, Mergers and Sales of Assets. The Seller shall not
consolidate or merge with or into any other Person, sell, lease or otherwise
transfer all or substantially all of its assets to any other Person or make any
material acquisition of all or substantially all assets of another Person,
unless:

(i) in the case of a consolidation or merger, the Seller may merge or
consolidate with another Person if such Person is a mortgage company and if such
Seller is the corporation surviving such merger;

(ii) in the case of an acquisition, it is of assets or securities to be used by
the Seller in its core mortgage company business, or otherwise has been approved
by the Buyer in writing;

(iii) in the case of an acquisition or sale of the Seller’s assets, such
acquisition or sale is in the ordinary course of the Seller’s business;

(iv) the sale is of the stock or substantially all of the assets of any
wholly-owned Subsidiary established after the Effective Date, or, with the
Buyer’s prior written consent, any other Subsidiary; and

in any case, after giving effect to such a sale, consolidation, merger or
acquisition, no Default or Event of Default would exist under this Repurchase
Agreement or any of the other Repurchase Documents.

(w) Agency Approvals; Servicing. The Seller shall maintain its status with
Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer,
in each case in good standing (each such approval, an “Agency Approval”). Should
the Seller, for any reason, cease to possess all such applicable Agency
Approvals to the extent necessary, or should notification to the relevant Agency
or to HUD, FHA or VA be required, the Seller shall so notify Buyer immediately
in writing. Notwithstanding the preceding sentence, the Seller shall take all
necessary action to maintain all of its applicable Agency Approvals at all times
during the term of this Repurchase Agreement and each outstanding Transaction.

(x) Guarantees. Without the prior written consent of the Buyer, neither Seller
shall create, incur, assume or suffer to exist any Guarantees, except (i) to the
extent reflected in such Seller’s financial statements or notes thereto; (ii) to
the extent the aggregate Guarantees of the Seller do not exceed $10,000,000
(excluding Permitted Guarantees from such calculation); (iii) those as are usual
and customary in mortgage warehouse financing or repurchase facilities in the
ordinary course of business or (iv) Permitted Guaranties.

(y) Underwriting Guidelines. The Sellers will deliver to the Buyer on or before
the effective date of any substantive or material amendment to the Sellers’
Underwriting Guidelines prompt notice of the amended or modified Underwriting
Guidelines with appropriate access to such Underwriting Guidelines.

(z) Subordination of Certain Indebtedness. The Sellers will cause any and all
debt and obligations of either Seller to any Affiliate (excluding unsecured debt
and obligations between the Sellers) or any shareholder, director or officer of
either Seller (excluding debt for officer’s or director’s salaries, bonuses,
directors’ fees or other compensation for services) or any Affiliate to be
Qualified Subordinated Debt by the execution and delivery by such Affiliate or
shareholder, director or officer to the Buyer of a Subordination Agreement and
the taking of all other steps (if any) required to cause such Indebtedness to be
Qualified Subordinated Debt, as defined in this Agreement, and deliver to the
Buyer an executed copy of that Subordination Agreement, certified by the
corporate secretaries of the Sellers to be true and complete and in full force
and effect, as to all such present and future debts and obligations of the
Sellers.

(aa) Chief Executive Office; Jurisdiction of Organization. No Seller shall
change its jurisdiction of organization from the jurisdiction referred to in
Section 11(w) unless it shall have provided Buyer 30 days’ prior written notice
of such change.

(bb) Escrow Imbalances. By no later than seven (7) Business Days after becoming
aware of any material imbalance in any investor escrow account(s) maintained by
a Seller (or any subservicer for it), such Seller will fully and completely
correct and eliminate such imbalance.

Section 13. Events of Default; Termination Event.

Section 13.01. Events of Default. If any of the following events (each an “Event
of Default”) occur, the Buyer shall have the rights set forth in Section 14, as
applicable:

(a) any Seller shall default in the payment of, with respect to any Transaction
at any time, any portion of the Purchase Price (including without limitation any
amounts due as a result of a Mark to Market) then payable; or

(b) any Seller shall default in the payment of, on or before five (5) Business
Days after the due date thereof, (i) any amount payable by it hereunder or under
any other Repurchase Document (other than, with respect to any Transaction, any
amount due pursuant to 13.01(a) above), (ii) Expenses or (iii) any other
Obligations, when the same shall become due and payable, whether at the due date
thereof, or by acceleration or otherwise; or

(c) the failure of any Seller to perform, comply with or observe any term,
covenant or agreement applicable to such Seller contained in Sections 12(a),
(k), (n), (t), (w), (y), (z) or (aa); or

(d) any representation, warranty or certification made or deemed made herein or
in any other Repurchase Document by any Seller or any certificate furnished to
the Buyer pursuant to the provisions hereof or thereof or any information with
respect to the Mortgage Loans furnished in writing by on behalf of any Seller
shall prove to have been untrue or misleading in any material respect as of the
time made or furnished (other than the representations and warranties set forth
in Schedule 1, which shall be considered solely for the purpose of determining
the Asset Value of the Purchased Mortgage Loans; unless (i) any Seller shall
have made any such representations and warranties with actual knowledge that
they were materially false or misleading at the time made; or (ii) any such
representations and warranties have been determined in good faith by the Buyer
in its sole discretion to be materially false or misleading on a regular basis);
or

(e) any Seller shall fail to observe or perform any other covenant in any
material respect or agreement contained in this Repurchase Agreement (and not
identified in clause (b) of Section 13) or any other Repurchase Document, and if
such default shall be capable of being remedied, and such failure to observe or
perform shall continue unremedied for a period of 30 days; or

(f) any money judgment, writ or warrant of attachment or similar process
involving any Seller in excess of $10,000,000 in the aggregate, shall be entered
or filed against any Seller or any of its assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days (or in any event
later than five (5) days prior to the date of any proposed sale thereunder)
(unless, in respect of any such case the judgment debtor or the subject of the
writ or warrant of attachment or similar process is one of the relevant Seller’s
Subsidiaries or such Subsidiary’s property, and such order, case commencement,
consent, assignment, inability or failure or admission has no Material Adverse
Effect on the Sellers’ ability to fulfill their obligations under this
Agreement); or

(g) an Event of Insolvency shall have occurred with respect to any Seller; or

(h) any Repurchase Document shall for whatever reason be terminated or cease to
be in full force and effect in all material respects or shall not be enforceable
in all material respects in accordance with its terms; or

(i) Buyer’s security interest in any material portion of the Repurchase Assets
shall become unperfected, of less than a first priority, unenforceable or
otherwise impaired; or

(j) failure of the Seller or any of its Subsidiaries to pay any other
Indebtedness when due (other than Indebtedness of a consolidated, wholly-owned
Subsidiary that is a Special Purpose Entity incurred in connection with
Permitted Securitizations), or any default in the payment when due of any
principal or interest on any other such Indebtedness or in the payment when due
of any contingent obligation; or breach or default with respect to any other
material term of any other Indebtedness or of any promissory note, bond, loan
agreement, reimbursement agreement, mortgage, indenture or other agreement
relating thereto, if the effect of any such failure, default or breach referred
to in this Section 13.01(j), is to cause, or to permit the holder or holders of
such obligation (or a trustee on behalf if such holder or holders) to cause,
Indebtedness of the Seller or any of its Subsidiaries in the aggregate amount of
Ten Million Dollars ($10,000,000) or more to become or be declared due before
its stated maturity ; or

(k) a Material Adverse Effect shall occur; or

(l) any Seller’s audited financial statements or notes thereto or other opinions
or conclusions stated therein shall be qualified or limited by reference to the
status of any Seller as a “going concern” or reference of similar import; or

(m) a Change in Control shall have occurred; or

(n) an officer of any Seller shall admit its inability to, or its intention not
to, perform any of a Seller’s Obligations hereunder; or

(o) FIC shall lose its tax status as a real estate investment trust as defined
in Section 856 of the Code.

Section 13.02. Termination Event(a) .  (a) If the following event (a
“Termination Event”) occurs, the Buyer shall have the rights set forth in
Section 13.02(b):

(i) the senior debt obligations or short-term debt obligations of Buyer shall be
rated below the four highest generic grades (without regard to any pluses and
minuses reflecting gradations within such generic grades) by any Rating Agency;
or

(b) Upon the occurrence of a Termination Event, the Buyer shall have the right,
in its sole discretion, to immediately terminate the Buyer’s obligation to enter
into any additional Transactions. The Sellers shall repurchase any Mortgage
Loans subject to a Transaction hereunder within 15 days following receipt of a
request therefor from Buyer following the occurrence of a Termination Event.

Section 14. Remedies. (a)  If an Event of Default occurs with respect to any
Seller, the following rights and remedies are available to the Buyer; provided,
that an Event of Default shall be deemed to be continuing unless expressly
waived by the Buyer in writing.

(i) At the option of the Buyer, exercised by written notice (which may be
electronic) to the Sellers (which option shall be deemed to have been exercised,
even if no notice is given, immediately upon the occurrence of an Event of
Insolvency of the Sellers), the Repurchase Date for each Transaction hereunder,
if it has not already occurred, shall be deemed immediately to occur. The Buyer
shall (except upon the occurrence of an Event of Insolvency of the Sellers) give
notice to the Sellers of the exercise of such option as promptly as practicable.

(ii) If the Buyer exercises or is deemed to have exercised the option referred
to in subsection (a)(i) of this Section,

(A) the Sellers’ obligations in such Transactions to repurchase all Purchased
Mortgage Loans, at the Repurchase Price therefor on the Repurchase Date
determined in accordance with subsection (a)(i) of this Section, (1) shall
thereupon become immediately due and payable, (2) all Income paid after such
exercise or deemed exercise shall be retained by the Buyer and applied to the
aggregate unpaid Repurchase Price and any other amounts owed by the Sellers
hereunder and (3) any remaining amounts shall be remitted to the Sellers;

(B) to the extent permitted by applicable law, the Repurchase Price with respect
to each such Transaction shall be increased by the aggregate amount obtained by
daily application of, on a 360 day per year basis for the actual number of days
during the period from and including the date of the exercise or deemed exercise
of such option to but excluding the date of payment of the Repurchase Price as
so increased, (x) the Post-Default Rate to (y) the Repurchase Price for such
Transaction as of the Repurchase Date as determined pursuant to
subsection (a)(i) of this Section (decreased as of any day by (i) any amounts
actually in the possession of Buyer pursuant to clause (iii) of this subsection,
and (ii) any proceeds from the sale of Purchased Mortgage Loans applied to the
Repurchase Price pursuant to subsection (a)(iv) of this Section; and

(C) all Income actually received by the Buyer pursuant to Section 5 (excluding
any Late Payment Fees paid pursuant to Section 5(a) which shall be applied to
the aggregate unpaid Repurchase Price owed by the Sellers).

(iii) Upon the occurrence of one or more Events of Default, the Buyer shall have
the right to obtain physical possession of all files of the Sellers relating to
the Purchased Mortgage Loans and the Repurchase Assets and all documents
relating to the Purchased Mortgage Loans which are then or may thereafter come
in to the possession of the Sellers or any third party acting for the Sellers
and the Sellers shall deliver to the Buyer such assignments as the Buyer shall
request. The Buyer shall be entitled to specific performance of all agreements
of the Sellers contained in the Repurchase Documents.

(iv) At any time on the Business Day following notice to the Sellers (which
notice may be the notice given under subsection (a)(i) of this Section), in the
event the Sellers have not repurchased all Purchased Mortgage Loans, the Buyer
may (A) immediately sell, without demand or further notice of any kind, at a
public or private sale and at such price or prices as the Buyer may deem
satisfactory any or all Purchased Mortgage Loans and the Repurchase Assets, on a
servicing released basis, subject to a such Transactions hereunder and apply the
proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts
owing by the Sellers hereunder or (B) in its sole discretion elect, in lieu of
selling all or a portion of such Purchased Mortgage Loans, to give the Sellers
credit for such Purchased Mortgage Loans and the Repurchase Assets in an amount
equal to the Market Value of the Purchased Mortgage Loans against the aggregate
unpaid Repurchase Price and any other amounts owing by the Sellers hereunder.
The proceeds of any disposition of Purchased Mortgage Loans and the Repurchase
Assets shall be applied first to the costs and expenses incurred by the Buyer in
connection with the such Seller’s default; second to costs of cover and/or
related hedging transactions; third to the Repurchase Price; and fourth to any
other outstanding obligation of the Sellers to the Buyer or its Affiliates.

(v) The Sellers shall be liable to Buyer for (i) the amount of all reasonable
legal or other expenses (including, without limitation, all costs and expenses
of Buyer in connection with the enforcement of this Repurchase Agreement or any
other agreement evidencing a Transaction, whether in action, suit or litigation
or bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally, further including, without limitation, the reasonable fees and
expenses of counsel (including the costs of internal counsel of Buyer) incurred
in connection with or as a result of an Event of Default, (ii) damages in an
amount equal to the cost (including all fees, expenses and commissions) of
entering into replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of Default, and
(iii) any other loss, damage, cost or expense directly arising or resulting from
the occurrence of an Event of Default in respect of a Transaction.

(vi) The Buyer shall have, in addition to its rights hereunder, any rights
otherwise available to it under any other agreement or applicable law.

(b) Buyer may exercise one or more of the remedies available to Buyer
immediately upon the occurrence of an Event of Default and, except to the extent
provided in subsections (a)(i) and (iv) of this Section, at any time thereafter
without notice to the Sellers. All rights and remedies arising under this
Repurchase Agreement as amended from time to time hereunder are cumulative and
not exclusive of any other rights or remedies which Buyer may have.

(c) Buyer may enforce its rights and remedies hereunder without prior judicial
process or hearing, and each Seller hereby expressly waives any defenses such
Seller might otherwise have to require Buyer to enforce its rights by judicial
process. Each Seller also waives any defense (other than a defense of payment or
performance) each Seller might otherwise have arising from the use of
nonjudicial process, enforcement and sale of all or any portion of the
Repurchase Assets, or from any other election of remedies. Each Seller
recognizes that nonjudicial remedies are consistent with the usages of the
trade, are responsive to commercial necessity and are the result of a bargain at
arm’s length.

(d) To the extent permitted by applicable law, the Sellers shall be liable to
the Buyer for interest on any amounts owing by the Sellers hereunder, from the
date the Sellers become liable for such amounts hereunder until such amounts are
(i) paid in full by the Sellers or (ii) satisfied in full by the exercise of the
Buyer’s rights hereunder. Interest on any sum payable by the Sellers to the
Buyer under this paragraph 14(d) shall be at a rate equal to the Post-Default
Rate.

Section 15. Indemnification and Expenses. (a)  The Sellers and agree to hold the
Buyer, and its Affiliates and their officers, directors, employees, agents and
advisors (each an “Indemnified Party”) harmless from and indemnify any
Indemnified Party against all liabilities, losses, damages, judgments, costs and
expenses of any kind which may be imposed on, incurred by or asserted against
such Indemnified Party, without duplication of Section 7(c) (collectively,
“Costs”), relating to or arising out of this Repurchase Agreement, any other
Repurchase Document or any transaction contemplated hereby or thereby, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Repurchase Agreement, any other Repurchase Document or any
transaction contemplated hereby or thereby, that, in each case, results from
anything other than the Indemnified Party’s gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Sellers agree
to hold any Indemnified Party harmless from and indemnify such Indemnified Party
against all Costs with respect to all Mortgage Loans relating to or arising out
of any taxes incurred or assessed in connection with the ownership of the
Mortgage Loans, that, in each case, results from anything other than the
Indemnified Party’s gross negligence or willful misconduct. In any suit,
proceeding or action brought by an Indemnified Party in connection with any
Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any
Mortgage Loan, the Sellers will save, indemnify and hold such Indemnified Party
harmless from and against all expense, loss or damage suffered by reason of any
defense, set-off, counterclaim, recoupment or reduction or liability whatsoever
of the account debtor or obligor thereunder, arising out of a breach by the
Sellers of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such account
debtor or obligor or its successors from the Sellers, provided, however, that
the Sellers shall not be liable for any such expense, loss or damage to the
extent resulting from the Indemnified Party’s gross negligence or willful
misconduct. The Sellers also agree to reimburse an Indemnified Party as and when
billed by such Indemnified Party for all the Indemnified Party’s costs and
expenses incurred in connection with the enforcement or the preservation of the
Buyer’s rights under this Repurchase Agreement, any other Repurchase Document or
any transaction contemplated hereby or thereby, including without limitation the
reasonable fees and disbursements of its counsel, provided, however, that the
Sellers shall not be liable for any such expense, loss or damage to the extent
resulting from the Indemnified Party’s gross negligence or willful misconduct.

(b) The Sellers agree to pay within thirty (30) days when billed by the Buyer
all of the out-of-pocket costs and expenses incurred by the Buyer in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Repurchase Agreement, any other Repurchase
Document or any other documents prepared in connection herewith or therewith.
The Sellers agree to pay as and when billed by the Buyer all of the reasonable
out-of-pocket costs and expenses incurred in connection with the consummation
and administration of the transactions contemplated hereby and thereby including
without limitation filing fees and all the reasonable fees, disbursements and
expenses of counsel to the Buyer which amount shall be deducted from the
Purchase Price paid for the first Transaction hereunder. Subject to the
limitations set forth in Sections 28 and 29 hereof, the Sellers agree to pay the
Buyer all the reasonable out of pocket due diligence, inspection, testing and
review costs and expenses incurred by the Buyer with respect to Mortgage Loans
submitted by the Sellers for purchase under this Repurchase Agreement,
including, but not limited to, those out of pocket costs and expenses incurred
by the Buyer pursuant to Sections 15(b) and 29 hereof.

(c) The obligations of the Seller from time to time to pay the Repurchase Price,
the Periodic Advance Repurchase Payments, and all other amounts due under this
Repurchase Agreement shall be full recourse obligations of the Sellers.

Section 16. Servicing. (a)  The Sellers, on the Buyer’s behalf, shall contract
with Servicer to, or if a Seller is the Servicer, such Seller shall, service the
Mortgage Loans consistent with the degree of skill and care that such Seller
customarily requires with respect to similar Mortgage Loans owned or managed by
it and in accordance with all Accepted Servicing Practices. The Seller shall
cause the Servicer to (i) comply with all applicable Federal, State and local
laws and regulations, (ii) maintain all state and federal licenses necessary for
it to perform its servicing responsibilities hereunder and (iii) not impair the
rights of Buyer in any Mortgage Loans or any payment thereunder. Buyer may
terminate the servicing of any Mortgage Loan with the then existing servicer in
accordance with Section 16(d) hereof.

(b) The Sellers shall cause the Servicer to hold or cause to be held all escrow
funds collected by the Sellers with respect to any Purchased Mortgage Loans in
trust accounts and shall apply the same for the purposes for which such funds
were collected.

(c) Upon the occurrence of an Event of Default, the Sellers shall cause the
Servicer to deposit all collections received by the Servicer and sellers on
account of the Purchased Mortgage Loans in the Collection Account.

(d) Upon the occurrence of a Default or Event of Default hereunder, Buyer shall
have the right to immediately terminate the Servicer’s right to service the
Purchased Mortgage Loans without payment of any penalty or termination fee. The
Sellers shall cooperate in transferring the servicing of the Purchased Mortgage
Loans to a successor servicer appointed by Buyer in its sole discretion.

(e) If the Sellers should discover that, for any reason whatsoever, any entity
responsible to the Sellers by contract for managing or servicing any such
Purchased Mortgage Loan has failed to perform fully the Sellers’ obligations
under the Repurchase Documents or any of the obligations of such entities with
respect to the Purchased Mortgage Loans, the Sellers shall promptly notify
Buyer.

Section 17. Recording of Communications. The Buyer and the Sellers shall have
the right (but not the obligation) from time to time to make or cause to be made
tape recordings of communications between its employees and those of the other
party with respect to Transactions upon notice to the other party of such
recording. The Buyer and the Sellers consent to the admissibility of such tape
recordings in any court, arbitration, or other proceedings. The parties agree
that a duly authenticated transcript of such a tape recording shall be deemed to
be a writing conclusively evidencing the parties’ agreement.

Section 18. Single Agreement. The Buyer and the Sellers acknowledge that, and
have entered hereinto and will enter into each Transaction hereunder in
consideration of and in reliance upon the fact that, all Transactions hereunder
constitute a single business and contractual relationship and that each has been
entered into in consideration of the other Transactions. Accordingly, each of
the Buyer and the Sellers agree (i) to perform all of its obligations in respect
of each Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply
property held by them in respect of any Transaction against obligations owing to
them in respect of any other Transaction hereunder; (iii) that payments,
deliveries, and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries, and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries, and other transfers
may be applied against each other and netted and (iv) to promptly provide notice
to the other after any such set off or application.

Section 19. Set-Off. In addition to any rights and remedies of the Buyer
hereunder and by law, the Buyer shall have the right, without prior notice to
the Sellers, any such notice being expressly waived by the Sellers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Sellers hereunder (whether at the stated maturity, by acceleration or otherwise)
to set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Buyer or any Affiliate thereof to or for the credit or the
account of the Sellers or any Affiliate thereof. The Buyer agrees promptly to
notify the Sellers after any such set-off and application made by the Buyer;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

Section 20. Notices and Other Communications. Except as otherwise expressly
permitted by this Repurchase Agreement, all notices, requests and other
communications provided for herein (including without limitation any
modifications of, or waivers, requests or consents under, this Repurchase
Agreement) shall be given or made in writing (including without limitation by
telecopy) delivered to the intended recipient at the “Address for Notices”
specified below its name on the signature pages hereof or thereof); or, as to
any party, at such other address as shall be designated by such party in a
written notice to each other party. Except as otherwise provided in this
Repurchase Agreement and except for notices given under Section 3 (which shall
be effective only on receipt), all such communications shall be deemed to have
been duly given when transmitted by telecopy or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.

Section 21. Entire Agreement; Severability. This Repurchase Agreement, together
with the Repurchase Documents, constitute the entire understanding between Buyer
and the Sellers with respect to the subject matter they cover and shall
supersede any existing agreements, understandings, inducements and conditions,
express or implies, oral or written between the parties containing general terms
and conditions for repurchase transactions involving Purchased Mortgage Loans.
By acceptance of this Repurchase Agreement, Buyer and the Sellers acknowledge
that they have not made, and are not relying upon, any statements,
representations, promises or undertakings not contained in this Repurchase
Agreement. Each provision and agreement herein shall be treated as separate and
independent from any other provision or agreement herein and shall be
enforceable notwithstanding the unenforceability of any such other provision or
agreement.

Section 22. Non-Assignability. Without any requirements for further consent of
the Sellers, the Buyer may assign any or all of its rights and obligations under
the Repurchase Documents to its own Affiliates, and with the prior written
consent of the Sellers, which consent will not be unreasonably withheld,
conditioned or delayed (provided that if an Event of Default has occurred that
the Buyer has not declared in writing to have been cured or waived, then no such
consent will be required) and at no cost to the Sellers or the Buyer, the Buyer
may assign any or all of its rights and obligations under the Repurchase
Documents to any Eligible Assignee; provided that (1) no such assignment to any
Eligible Assignee shall result in a buyer’s having a Maximum Committed Purchase
Price of less than Ten Million Dollars ($10,000,000), (2) no such consent shall
result in there being more than a total of ten (10) buyers (a participant is not
a buyer), and (3) each such assignment shall be substantially in the form of
Exhibit O, with the assignor to have no further right or obligation with respect
to the rights and obligations assigned to and assumed by the Eligible Assignee
(“Assignment and Acceptance”). The Sellers agree that, as to any assignment to
any Affiliate of Buyer or if the Sellers consent to any such assignment to an
Eligible Assignee, the Sellers will cooperate with the prompt execution and
delivery of documents reasonably necessary to such assignment process to the
extent that the Sellers incur no cost or expense that is not paid by the
assigning Buyer. Upon such assignment, the assignee shall be a buyer for all
purposes under this Repurchase Agreement and the other Repurchase Documents, if
the assignment is an assignment of all of the assignor’s interest in the
Mortgage Loan and its security, the assignor shall be automatically released
from all of its obligations and liabilities hereunder, and, whether it is such a
complete assignment or only a partial assignment, the Maximum Committed Purchase
Price shall be adjusted appropriately, and the parties agree to execute an
appropriate amendment to this Repurchase Agreement.

If any interest in this Agreement is so transferred to any Person that is
organized under the laws of any jurisdiction other than the United States of
America or any State thereof, the Buyer shall cause such Person, concurrently
with the effectiveness of such transfer, (i) to represent to the Buyer (for the
benefit of the Buyer and the Sellers) that under applicable laws no taxes will
be required to be withheld by the Sellers or the Buyer with respect to any
payments to be made to such Person under this Agreement, (ii) to furnish to each
of the Buyer and the Sellers two duly completed copies of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein
such Person claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (iii) to agree (for the
benefit of the Buyer and the Sellers) to provide the Buyer and the Sellers a new
Form 4224 or Form 1001 upon the obsolescence of any previously delivered form
and comparable statements in accordance with applicable United States laws and
regulations and amendments duly executed and completed by such Person and to
comply from time to time with all applicable laws with regard to such
withholding tax exemption.

Subject to acceptance and recording thereof pursuant to the following paragraph
of this section, from and after the effective date specified in each Assignment
and Acceptance the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of the Buyer under this Repurchase Agreement. Any
assignment or transfer by the Buyer of rights or obligations under this
Repurchase Agreement that does not comply with this Section 22 shall be treated
for purposes of this Repurchase Agreement as a sale by such Buyer of a
participation in such rights and obligations in accordance with the following
paragraph of this section.

The Sellers shall maintain a register (the “Register”) on which it will record
the Buyer’s rights hereunder, and each Assignment and Acceptance and
participation. The Register shall include the names and addresses of the Buyer
(including all assignees, successors and participants) and the percentage or
portion of such rights and obligations assigned. Failure to make any such
recordation, or any error in such recordation shall not affect the Sellers’
obligations in respect of such rights. If the Buyer sells a participation in its
rights hereunder, it shall provide the Sellers, or maintain as agent of the
Sellers, the information described in this paragraph and permit the Sellers to
review such information as reasonably needed for the Sellers to comply with its
obligations under this Repurchase Agreement or under any applicable Requirement
of Law.

The Buyer may sell participations to one or more Persons in or to all or a
portion of its rights and obligations under this Repurchase Agreement; provided,
however, that (i) the Buyer’s obligations under this Repurchase Agreement shall
remain unchanged, (ii) the Buyer shall remain solely responsible to the other
parties hereto for the performance of such obligations; (iii) the Sellers shall
continue to deal solely and directly with the Buyer in connection with the
Buyer’s rights and obligations under this Repurchase Agreement and the other
Repurchase Documents except as provided in Section 7, (iv) the Buyer shall not
sell any participating interest of less than Ten Million Dollars ($10,000,000),
(v) the relevant participation agreement shall not permit the participant to
transfer, pledge, assign, sell any subparticipation in or otherwise alienate or
encumber its participation interest in the Mortgage Loan and (vi) the
participant shall not have any rights to approve any amendment, modification or
waiver of any Repurchase Documents, except to the extent such amendment,
modification or waiver (A) extends the due date for payment of any amount in
respect of Purchase Price, Price Differential or fees (other than the
Custodian’s fees) under the Repurchase Documents or (B) reduces the Price
Differential or the Purchase Price or fees applicable to any Transaction (except
such reductions as are contemplated by this Repurchase Agreement). In those
cases (if any) where a Buyer grants rights to any of its participants to approve
amendments, modifications or waivers of any Repurchase Documents pursuant to the
immediately preceding sentence, the Buyer must include a voting mechanism as to
all such approval rights in the relevant participation agreement(s) whereby a
readily-determinable fraction of such Buyer’s portion of the Transactions
(whether held by such Buyer or participated) shall control the vote for the
Transactions; provided, that if no such voting mechanism is provided for or is
fully and immediately effective, then the vote of the Buyer itself shall be the
vote for all of the Transactions.

The Buyer may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 22, disclose to the
assignee or participant or proposed assignee or participant, as the case may be,
any information relating to the Sellers or any of its Subsidiaries or to any
aspect of the Transactions that has been furnished to the Buyer by or on behalf
of the Sellers or any of their Subsidiaries; provided that such assignee or
participant agrees to hold such information subject to the confidentiality
provisions of this Repurchase Agreement.

The Buyer may at any time create a security interest in all or any portion of
its rights under this Agreement in favor of any Federal Reserve Bank in
accordance with regulations of the Board of Governors of the Federal Reserve
System and any operating circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning buyer from its obligations hereunder.

In the event the Buyer assigns all or a portion of its rights and obligations
under this Agreement, the parties hereto agree to negotiate in good faith an
amendment to this agreement to add agency provisions similar to those included
in repurchase agreements for similar syndicated repurchase facilities.

The Sellers shall not be required to incur any cost or expense incident to any
sale to a Person of any interest under this Repurchase Agreement pursuant to
this Section and all such costs and expenses shall be for the account of the
Buyer selling its rights in the Mortgage Loan to such Person.

Section 23. Tax Treatment. Each party to this Repurchase Agreement acknowledges
that it is its intent for purposes of U.S. federal, state and local income and
franchise taxes, to treat each Transaction as indebtedness of the Sellers that
is secured by the Purchased Mortgage Loans and that the Purchased Mortgage Loans
are owned by the Sellers in the absence of an Event of Default by the Sellers.
All parties to this Repurchase Agreement agree to such treatment and agree to
take no action inconsistent with this treatment, unless required by law.

Section 24. Terminability. This Repurchase Agreement may be canceled by either
party upon giving written notice to the other except that this Repurchase
Agreement shall, notwithstanding such notice, remain applicable to any
Transaction then outstanding. Each representation and warranty made or deemed to
be made by entering into a Transaction, herein or pursuant hereto shall survive
the making of such representation and warranty, and the Buyer shall not be
deemed to have waived any Default that may arise because any such representation
or warranty shall have proved to be false or misleading, notwithstanding that
the Buyer may have had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time the Transaction
was made. Notwithstanding any such termination or the occurrence of an Event of
Default, all of the representations and warranties and covenants hereunder shall
continue and survive. The obligations of the Sellers under Section 15 hereof
shall survive the termination of this Repurchase Agreement.

Section 25. GOVERNING LAW. THIS REPURCHASE AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.

Section 26. SUBMISSION TO JURISDICTION; WAIVERS. BUYER AND EACH SELLER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS REPURCHASE AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;

(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS
AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;

(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE
BEEN NOTIFIED;

(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION; AND

(e) THE BUYER AND EACH SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS REPURCHASE AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 27. No Waivers, etc. No failure on the part of the Buyer to exercise and
no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under any Repurchase Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under any Repurchase Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law. An Event of Default shall be deemed to be continuing unless expressly
waived by the Buyer in writing.

Section 28. Netting. If the Buyer and the Sellers are “financial institutions”
as now or hereinafter defined in Section 4402 of Title 12 of the United States
Code (“Section 4402”) and any rules or regulations promulgated thereunder,

(a) All amounts to be paid or advanced by one party to or on behalf of the other
under this Repurchase Agreement or any Transaction hereunder shall be deemed to
be “payment obligations” and all amounts to be received by or on behalf of one
party from the other under this Repurchase Agreement or any Transaction
hereunder shall be deemed to be “payment entitlements” within the meaning of
Section 4402, and this Repurchase Agreement shall be deemed to be a “netting
contract” as defined in Section 4402.

(b) The payment obligations and the payment entitlements of the parties hereto
pursuant to this Repurchase Agreement and any Transaction hereunder shall be
netted as follows. In the event that either party (the “Defaulting Party”) shall
fail to honor any payment obligation under this Repurchase Agreement or any
Transaction hereunder, the other party (the “Nondefaulting Party”) shall be
entitled to reduce the amount of any payment to be made by the Nondefaulting
Party to the Defaulting Party by the amount of the payment obligation that the
Defaulting Party failed to honor.

Section 29. Periodic Due Diligence Review. The Sellers acknowledge that Buyer
has the right to perform continuing due diligence reviews with respect to the
Mortgage Loans, for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or otherwise, and the Sellers
agree that upon reasonable (but no less than one (1) Business Day’s) prior
notice unless an Event of Default shall have occurred, in which case no notice
is required, to the Sellers, the Buyer or its authorized representatives will be
permitted during normal business hours to examine, inspect, and make copies and
extracts of, the Mortgage Files and any and all documents, records, agreements,
instruments or information relating to such Mortgage Loans in the possession or
under the control of the Sellers. The Sellers also shall make available to Buyer
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Mortgage Files and the Mortgage Loans. Without limiting
the generality of the foregoing, the Sellers acknowledge that Buyer may purchase
Mortgage Loans from the Sellers based solely upon the information provided by
the Sellers to Buyer in the Mortgage Loan Schedule and the representations,
warranties and covenants contained herein, and that Buyer, at its option, has
the right at any time to conduct a partial or complete due diligence review on
some or all of the Mortgage Loans purchased in a Transaction, including, without
limitation, ordering broker’s price opinions, new credit reports and new
Appraisals on the related Mortgaged Properties and otherwise regenerating the
information used to originate such Mortgage Loan. Buyer may underwrite such
Mortgage Loans itself or engage a mutually agreed upon third party underwriter
to perform such underwriting. The Sellers agree to cooperate with Buyer and any
third party underwriter in connection with such underwriting, including, but not
limited to, providing the Buyer and any third party underwriter with access to
any and all documents, records, agreements, instruments or information relating
to such Mortgage Loans in the possession, or under the control, of the Sellers.
The Sellers further agree that the Sellers shall pay all out of pocket costs and
expenses incurred by Buyer in connection with Buyer’s activities pursuant to
this Section 29 (“Due Diligence Costs”), provided that such Due Diligence costs
shall not exceed Twenty Five Thousand Dollars ($25,000.00) per calendar year
unless an Event of Default shall have occurred, in which event the Buyer shall
have the right to perform due diligence, at the sole expense of the Sellers,
without regard to the dollar limitation set forth herein.

Section 30. Buyer’s Appointment As Attorney-In-Fact. (a) Each Seller hereby
irrevocably constitutes and appoints for so long as the Obligations are
outstanding the Buyer and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Seller and in the name of
such Seller or in its own name, from time to time in the Buyer’s discretion, for
the purpose of carrying out the terms of this Repurchase Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be reasonably necessary or desirable to accomplish the purposes of
this Repurchase Agreement, although the Buyer agrees not to exercise its rights
under this power of attorney unless, in its opinion or the opinion of its legal
counsel, an Event of Default has occurred that the Buyer has not declared in
writing to have been cured or waived. Without limiting the generality of the
foregoing, such Seller hereby gives the Buyer the power and right, on behalf of
such Seller, without assent by (except as expressly set forth below), but with
notice to, such Seller, if an Event of Default shall have occurred and be
continuing, to do the following:

(i) in the name of such Seller, or in its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due with respect to any other
Repurchase Assets and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Buyer for the purpose of collecting any and all such moneys due with respect to
any other Repurchase Assets whenever payable;

(ii) to pay or discharge taxes and Liens levied or placed on or threatened
against the Repurchase Assets;

(iii) (A) to direct any party liable for any payment under any Repurchase Assets
to make payment of any and all moneys due or to become due thereunder directly
to the Buyer or as the Buyer shall direct; (B) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any Repurchase
Assets; (C) to sign and endorse any invoices, assignments, verifications,
notices and other documents in connection with any Repurchase Assets; (D) to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Repurchase Assets or any
proceeds thereof and to enforce any other right in respect of any Repurchase
Assets; (E) to defend any suit, action or proceeding brought against such Seller
with respect to any Repurchase Assets; (F) to settle, compromise or adjust any
suit, action or proceeding described in clause (E) above and, in connection
therewith, to give such discharges or releases as the Buyer may deem
appropriate; and (G) generally, to sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any Repurchase Assets as fully and
completely as though the Buyer were the absolute owner thereof for all purposes,
and to do, at the Buyer’s option and such Seller’s expense, at any time, and
from time to time, all acts and things which the Buyer deems necessary to
protect, preserve or realize upon the Repurchase Assets and the Buyer’s Liens
thereon and to effect the intent of this Repurchase Agreement, all as fully and
effectively as such Seller might do.

(b) Each Seller hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.

(c) Each Seller also authorizes the Buyer, if an Event of Default shall have
occurred, from time to time, to execute, in connection with any sale provided
for in Section 14 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Repurchase Assets.

(d) The powers conferred on the Buyer hereunder are solely to protect the
Buyer’s interests in the Repurchase Assets and shall not impose any duty upon it
to exercise any such powers. The Buyer shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers, and
neither it nor any of its officers, directors, employees or agents shall be
responsible to the Sellers for any act or failure to act hereunder, except for
its or their own gross negligence or willful misconduct.

Section 31. Miscellaneous.

(a) Counterparts. This Repurchase Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Repurchase Agreement
by signing any such counterpart.

(b) Captions. The captions and headings appearing herein are for included solely
for convenience of reference and are not intended to affect the interpretation
of any provision of this Repurchase Agreement.

(c) Acknowledgment. Each Seller hereby acknowledges that:

(i) it has been advised by counsel in the negotiation, execution and delivery of
this Repurchase Agreement and the other Repurchase Documents;

(ii) the Buyer has no fiduciary relationship to the Sellers; and

(iii) no joint venture exists between the Buyer and the Sellers.

(d) Documents Mutually Drafted. The Sellers and Buyer agree that this Repurchase
Agreement each other Repurchase Document prepared in connection with the
Transactions set forth herein have been mutually drafted and negotiated by each
party, and consequently such documents shall not be construed against either
party as the drafter thereof.

Section 32. Confidentiality. The Buyer and each Seller hereby acknowledge and
agree that all written or computer-readable information provided by one party to
any other regarding the terms set forth in any of the Repurchase Documents or
the Transactions contemplated thereby, and Seller’s Mortgagor information in the
possession of Buyer (the “Confidential Terms”) shall be kept confidential and
shall not be divulged to any party without the prior written consent of such
other party except to the extent that (i) it is necessary to do so in working
with legal counsel, auditors, taxing authorities or other governmental agencies
or regulatory bodies or in order to comply with any applicable federal or state
laws, (ii) any of the Confidential Terms are in the public domain other than due
to a breach of this covenant, or (iii) except with respect Seller’s Mortgagor
information in the possession of Buyer, if an Event of Default has occurred and
is continuing and the Buyer determines such information to be necessary or
desirable to disclose in connection with the marketing and sales of the
Purchased Mortgage Loans or otherwise to enforce or exercise the Buyer’s rights
hereunder. Notwithstanding the foregoing or anything to the contrary contained
herein or in any other Repurchase Document, the parties hereto may disclose to
any and all Persons, without limitation of any kind, the U.S. federal, state and
local tax treatment of the Transactions, any fact that may be relevant to
understanding the U.S. federal, state and local tax treatment of the
Transactions, and all materials of any kind (including opinions or other tax
analyses) relating to such U.S. federal, state and local tax treatment and that
may be relevant to understanding such tax treatment other than the name of the
parties or any other persons, and any pricing terms (including, without
limitation, the Pricing Rate, Commitment Fee, Purchase Price Percentage and
Purchase Price) or other nonpublic business or financial information (including
any sublimits and financial covenants) that is unrelated to the U.S. federal,
state and local tax treatment of the Transactions and is not relevant to
understanding the U.S. federal, state and local tax treatment of the
Transactions. The provisions set forth in this Section 32 shall survive the
termination of this Repurchase Agreement.

Section 33. Intent. (a)  The parties recognize that each Transaction is a
“repurchase agreement” as that term is defined in Section 101 of Title 11 of the
United States Code, as amended (except insofar as the type of Mortgage Loans
subject to such Transaction or the term of such Transaction would render such
definition inapplicable), and a “securities contract” as that term is defined in
Section 741 of Title 11 of the United States Code, as amended (except insofar as
the type of assets subject to such Transaction would render such definition
inapplicable).

(b) It is understood that either party’s right to liquidate Mortgage Loans
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Section 14 hereof is a contractual right to liquidate
such Transaction as described in Sections 555 and 559 of Title 11 of the United
States Code, as amended.

(c) The parties agree and acknowledge that if a party hereto is an “insured
depository institution,” as such term is defined in the Federal Deposit
Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a
“qualified financial contract,” as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable).

(d) It is understood that this Repurchase Agreement constitutes a “netting
contract” as defined in and subject to Title IV of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and
payment obligation under any Transaction hereunder shall constitute a “covered
contractual payment entitlement” or “covered contractual payment obligation,”
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a “financial institution” as that term is defined in
FDICIA).

(e) This Repurchase Agreement is intended to be a “repurchase agreement” and a
“securities contract,” within the meaning of Section 555 and Section 559 under
the Bankruptcy Code.

Section 34. Disclosure Relating to Certain Federal Protections. The parties
acknowledge that they have been advised that:

(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission (“SEC”) under
Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Transaction hereunder;

(b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder; and

(c) in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as
applicable.

Section 35. Conflicts. In the event of any conflict between the terms of this
Repurchase Agreement and any other Repurchase Document, the documents shall
control in the following order of priority: first, the terms of this Repurchase
Agreement shall prevail and then the terms of the Repurchase Documents shall
prevail.

Section 36. Authorizations. Any of the persons whose signatures and titles
appear on Schedule II are authorized, acting singly, to act for the Sellers or
Buyer, as the case may be, under this Repurchase Agreement.

Section 37. Acknowledgement of Anti Predatory Lending Practices. Buyer has in
place internal policies and procedures that expressly prohibit its purchase of
any High Cost Mortgage Loan.

Section 38. General Interpretive Principles. For purposes of this Repurchase
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:

(a) the terms defined in this Repurchase Agreement have the meanings assigned to
them in this Repurchase Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;

(b) accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles;

(c) references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”,
and other subdivisions without reference to a document are to designated
Articles, Sections, Subsections, Paragraphs and other subdivisions of this
Repurchase Agreement;

(d) a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

(e) the words “herein”, “hereof”, “hereunder” and other words of similar import
refer to this Repurchase Agreement as a whole and not to any particular
provision;

(f) the term “include” or “including” shall mean without limitation by reason of
enumeration;

(g) all times specified herein or in any other Repurchase Document (unless
expressly specified otherwise) are Central times unless otherwise stated; and

(h) all references herein or in any Repurchase Document to “good faith” means
good faith as defined in Section 1-201(19) of the UCC as in effect in the State
of New York.

Section 39. Joint and Several. Each Seller shall be jointly and severally liable
for the full, complete and punctual performance and satisfaction of all
obligations of each Seller under this Repurchase Agreement. Accordingly, each
Seller waives any and all notice of creation, renewal, extension or accrual of
any of the Obligations and notice of or proof of reliance by Buyer upon such
Seller’s joint and several liability. Each Seller waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon such
Seller with respect to the Obligations. When pursuing its rights and remedies
hereunder against such Seller, Buyer may, but shall be under no obligation to,
pursue such rights and remedies hereunder against such Seller or any other
Person or against any collateral security for the Obligations or any right of
offset with respect thereto, and any failure by Buyer to pursue such other
rights or remedies or to collect any payments from such Seller or any such other
Person to realize upon any such collateral security or to exercise any such
right of offset, or any release of such Seller or any such other Person or any
such collateral security, or right of offset, shall not relieve such Seller of
any liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of Buyer against such
Seller.

Section 40. Commitment Fee. No later than the Payment Date immediately prior to
the end of such calendar quarter, Sellers shall pay in immediately available
funds to Buyer the Commitment Fee. Such payment shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to
Buyer at an account designated by Buyer. If the Maximum Committed Purchase Price
shall be increased or decreased from time to time either pursuant to a provision
of this Repurchase Agreement or by separate agreement between the Sellers and
the Buyer (excluding, however, any change occurring as a result of or following
the occurrence of a Default or an Event of Default, in respect of which no
adjustment of the Commitment Fee shall be required), the amount of the
Commitment Fee paid in advance for the three-month period in which the effective
date of the amendment producing such increase or decrease occurs shall be
adjusted for the unexpired portion of that three-month period by a cash refund
by the Buyer to the Sellers or a cash payment by the Sellers to the Buyer. Each
calculation by the Buyer of the amount of the Commitment Fee shall be conclusive
absent manifest error. The Sellers shall pay to the Buyer on demand any
deficiency in payment by the Sellers of the Commitment Fee.

[THIS SPACE INTENTIONALLY LEFT BLANK]

3

IN WITNESS WHEREOF, the parties have entered into this Repurchase Agreement as
of the date set forth above.

BUYER:

JPMORGAN CHASE BANK, N.A.

By: /s/ Mark Wegener
Name:
Title:

Address for Notices:

JPMorgan Chase Bank, N.A.

131 South Dearborn
Chicago, Illinois 60670
Attention: Mark Wegener
Telecopier No.: 312-325-3173
Telephone No.: 312-732-3953

SELLER:

FIELDSTONE INVESTMENT CORPORATION

By: /s/ Mark C. Krebs
Name: Mark C. Krebs
Title: Sr. Vice President & Treasurer

Address for Notices:

Fieldstone Investment Corporation

11000 Broken Land Parkway
Columbia, Maryland 21044
Attention: Mark Krebs
Telephone: (410) 772-7275
Fax: (443) 367-2172
email: mkrebs@fmcmortgage.com

SELLER:

FIELDSTONE MORTGAGE COMPANY

By: /s/ Mark C. Krebs
Name: Mark C. Krebs
Title: Sr. Vice President & Treasurer

Address for Notices:

Fieldstone Mortgage Company

11000 Broken Land Parkway
Columbia, Maryland 21044
Attention: Mark Krebs
Telephone: (410) 772-7275
Fax: (443) 367-2172
email: mkrebs@fmcmortgage.com

SCHEDULE 1

REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS

The Sellers represent and warrant the following to the Buyer, with respect to
each Mortgage Loan, as of the Purchase Date for the purchase of any Purchased
Mortgage Loans by the Buyer from the Sellers and as of the date of this
Repurchase Agreement and any Transaction hereunder and at all times while the
Repurchase Documents and any Transaction hereunder is in full force and effect.
For purposes of this Schedule 1 and the representations and warranties set forth
herein, a breach of a representation or warranty shall be deemed to have been
cured with respect to a Mortgage Loan if and when the Sellers have taken or
caused to be taken action such that the event, circumstance or condition that
gave rise to such breach no longer adversely affects such Mortgage Loan. With
respect to those representations and warranties which are made to the best of
the Sellers’ knowledge, if it is discovered by either Seller or the Buyer that
the substance of such representation and warranty is materially inaccurate,
notwithstanding the Sellers’ lack of knowledge with respect to the substance of
such representation and warranty, such inaccuracy shall be deemed a breach of
the applicable representation and warranty.

(a) Description. The information set forth on the Mortgage Loan Schedule is
complete, true and correct in all material respects as of the date of the
origination of each such Mortgage Loan.

(b) No Defenses. No Mortgage Loan is subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto.

(c) Original Terms Unmodified. Except as otherwise disclosed by written
instruments included in the related documents required to be held by the
Custodian pursuant to the Custodial Agreement with respect to such Mortgage Loan
(the “Mortgage File”), the Sellers have not impaired, waived, altered or
modified the related Mortgage or Mortgage Note in any material respect, and, if
waived, altered or modified, the substance of any such waiver, alteration or
modification has been approved by the insurer under the PMI Policy, if any, and
the title insurer, to the extent required by the related policy, and its terms
are reflected on the Mortgage Loan Schedule. No Mortgagor has been released, in
whole or in part, except in connection with an assumption agreement approved by
the title insurer, and which assumption agreement is included in the Mortgage
File delivered to Buyer or its designee (including Custodian) and the terms of
which are reflected in the Mortgage Loan Schedule.

(d) No Outstanding Charges. All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item that remains
unpaid and that has been assessed but is not yet due and payable. Sellers have
not advanced funds, or induced, solicited or knowingly received any advance of
funds by a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required under the Mortgage Loan, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
proceeds of the Mortgage Loan, whichever is greater, to the day that precedes by
one month the Due Date of the first installment of principal and interest. No
foreclosure proceedings are pending against the Mortgaged Property and no
material litigation or lawsuit relating to the Mortgage Loan is pending.

(e) Title Insurance. Each Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney’s opinion of title given by an attorney licensed to
practice law in the jurisdiction where the Mortgaged Property is located. All of
the Sellers’ rights under such policies, opinions or other instruments shall be
deemed to be transferred and assigned to the Buyer upon transfer and pledge of
the Mortgage Loans hereunder. The title insurance policy has been issued by a
title insurer licensed to do business in the jurisdiction where the Mortgaged
Property is located, insuring the original lender, its successor and assigns, as
to the first or second priority lien of the Mortgage in the original principal
amount of the Mortgage Loan, subject to the exceptions contained in such policy.
Each Seller is the sole insured of such mortgagee title insurance policy, and
such mortgagee title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by the
Agreement. The Sellers have not made and have no knowledge of any claims made
under such mortgagee title insurance policy. The Sellers are not aware of any
action by a prior holder and the Sellers have not done, by act or omission,
anything which could impair the coverage or enforceability of such mortgagee
title insurance policy or the accuracy of such attorney’s opinion of title.

(f) Hazard Insurance. The Mortgage Loan obligates the Mortgagor thereunder to
maintain a hazard insurance policy (“Hazard Insurance”) in an amount at least
equal to the lesser of (i) the amount necessary to fully compensate for any
damage or loss to the improvements which are part of such Mortgaged Property on
a replacement cost basis and (ii) the outstanding principal balance of the
Mortgage Loan, in either case in an amount sufficient to avoid the application
of any “co-insurance provisions”, and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the Mortgagor’s cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency (“FEMA”) as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance and, if applicable, flood insurance policy at the
Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor’s cost and expense, and to seek reimbursement therefor from the
Mortgagor. The Mortgaged Property is covered by Hazard Insurance. Each Seller
has obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and such contract is assignable without penalty, premium or cost
to the Buyer.

(g) Compliance with Applicable Laws. Any and all requirements of any federal,
state or local law including , but not limited to, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal credit
opportunity and disclosure laws applicable to the Mortgage Loan have been
complied with, and Sellers shall maintain in one or both of their possession,
available for Buyer’s inspection, and shall deliver to Buyer upon demand,
evidence of compliance with all such requirements.

(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled,
subordinated (except in the case of a Second Lien Mortgage Loan, to the first
Mortgage Loan) or rescinded, in whole or in part (except for a release that does
not materially impair the security of the Mortgage Loan or a release the effect
of which is reflected in the loan-to-value ratio for the Mortgage Loan as set
forth in the Mortgage Loan Schedule), and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. Sellers have not waived the performance by the
Mortgagor of any action, if the Mortgagor’s failure to perform such action would
cause the Mortgage Loan to be in default, nor have Sellers waived any default
resulting from any action or inaction by the Mortgagor.

(i) Location and Type of Mortgage Property. The Mortgaged Property is located in
the state identified in the Mortgage Loan Schedule and consists of either (i) a
single parcel of real property or (ii) more than one parcel of real property (as
determined for tax purposes only) which parcels are contiguous and are subject
to a single deed or title, in each case with a detached single family residence
erected thereon, or a two- to four-family dwelling, or an individual condominium
unit in a low-rise or high-rise condominium project, provided, however, that any
condominium project or planned unit development shall conform with the
applicable Fannie Mae and Freddie Mac requirements regarding such dwellings, or
a manufactured dwelling attached to a permanent foundation, or an individual
unit in a planned unit development or a townhouse. No residence or dwelling is a
mobile home.

(j) Valid First or Second Lien. The related Mortgage is a valid, subsisting and
enforceable first lien or second lien on the related Mortgaged Property,
including but not limited to, all building on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage, to the best of the Sellers’ knowledge, is subject only to:

(i) the lien of current real property taxes and assessments not yet due and
payable;

(ii) covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected or considered in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and referred
to or otherwise considered in the appraisal made in connection with the
origination of the related Mortgage Loan or that do not adversely affect the
appraisal value of the Mortgaged Property set forth in such appraisal;

(iii) in the case of a Mortgaged Property that is a condominium or an individual
unit in a planned unit development, liens for common charges permitted by
statute;

(iv) if the Mortgage Loan is secured by a second mortgage lien on the Mortgaged
Property (and represented on the Mortgage Schedule as such), the lien of the
first Mortgage; and

(v) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid
and enforceable (a) with respect to each first lien Mortgage Loan, first
priority lien and first priority security interest, or (b) with respect to each
Second Lien Mortgage Loan, second priority lien and second priority security
interest, in each case, on the property described therein and the Sellers have
full right to pledge and assign the same to the Buyer or its designee (including
Custodian).

(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage are
genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, reorganization, receivership, moratorium
or other similar laws relating to or affecting the rights of creditors
generally, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law). All parties to
the Mortgage Note, the Mortgage and any other such related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage
and any other such related agreement have been duly and properly executed by
such related parties.

(l) Full Disbursement of Proceeds. The proceeds of the Mortgage Loan have been
fully disbursed to or for the account of the Mortgagor and there is no
requirement for future advances thereunder and there is no obligation for the
mortgagee to advance additional funds thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefore have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.

(m) Ownership. Sellers are the sole owners of record and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged except as provided in this
Agreement, and Sellers have good and marketable title thereto, and have full
right to pledge and assign the Mortgage Loan to Buyer or its designee (including
Custodian) free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and have full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement.

(n) Doing Business. All parties that have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (i) in compliance with
any and all applicable licensing requirements of the laws of the state where the
Mortgaged Property is located, and (ii) either (A) organized under the laws of
such state, (B) qualified to do business in such state, (C) a federal savings
and loan association, a savings bank or a national bank having a principal
office in such state or (D) not doing business in such state; provided, if a
warehouse lender that was the assignee of the Mortgage Loans was not authorized
to do business in the jurisdiction where the Mortgaged Property is located, the
Sellers represent and warrant that the financing of the Mortgage Loan and the
holding of an interest in the Mortgage Loan by the warehouse lender did not
constitute doing business in that jurisdiction.

(o) No Defaults. Other than a payment default, there is no material default,
breach, violation or event of acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a material default,
breach, violation or event of acceleration, and neither Sellers nor their
respective successors have waived any default, breach, violation or event of
acceleration.

(p) No Mechanics’ Liens. To the best of Sellers’ knowledge, there are no
mechanics’ liens or similar liens or claims that have been filed for work, labor
or material (and no rights are outstanding that under law could give rise to
such lien) affecting the Mortgaged Property that are or may be liens prior to,
or equal or coordinate with, the lien of the Mortgage.

(q) Location of Improvements; No Encroachments. Except as may be expressly noted
and considered in the appraisal of the Mortgaged Property, all improvements that
were considered in determining the appraised value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning and building law, ordinance or
regulation.

(r) Origination. The Mortgage Loan was originated by or in conjunction with a
mortgagee approved by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or similar banking institution which is supervised and examined by a federal or
state authority.

(s) Customary Provisions. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial
foreclosure. There is no homestead or other exemption available to a Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee’s sale or the right to foreclose the Mortgage.

(t) Occupancy of the Mortgaged Property. To the best of the Sellers’ knowledge,
(i) as of the Purchase Date, the Mortgaged Property is lawfully occupied under
applicable law and (ii) all inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same, including but
not limited to certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities. Sellers have not
received notification from any Governmental Authority that the Mortgaged
Property is in material non-compliance with such laws or regulations, is being
used, operated or occupied unlawfully or has failed to have or obtain such
inspection, licenses or certificates, as the case may be. With respect to any
Mortgage Loan originated with an “owner-occupied” Mortgaged property, the
Mortgagor represented at the time of origination of the Mortgage Loan that the
Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary
residence.

(u) No Additional Collateral. The Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage.

(v) Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a
trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Buyer to the
trustee under the deed of trust, except in connection with a trustee’s sale
after default by the Mortgagor.

(w) Transfer of Mortgage Loans. Except with respect to Mortgage Loans registered
with MERS, the Assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located.

(x) Due on Sale. The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder.

(y) No Buydown Provisions; No Graduated Payments or Contingent Interests. Except
with respect to Agency Mortgage Loans, the Mortgage Loan does not contain
provisions pursuant to which monthly payments are paid or partially paid with
funds deposited in any separate account established by Sellers, the Mortgagor or
anyone on behalf of the Mortgagor, or paid by any source other than the
Mortgagor nor does it contain any other similar provisions which may constitute
a “buydown” provisions. The Mortgage Loan is not a graduated payment mortgage
loan (except with respect to a 40/30 Mortgage Loan or a 30/15 Mortgage Loan and
the Mortgage Loan does not have a shared appreciation or other contingent
interest feature.

(z) Consolidation of Future Advances. Any future advances made to the Mortgagor
prior to the Purchase Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first or second lien priority, as the case may be, by a title
insurance policy, an endorsement to the policy insuring the mortgagee’s
consolidated interest or by other title evidence acceptable to Fannie Mae and
Freddie Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan.

(aa) No Condemnation Proceedings; Mortgaged Property Undamaged. To the best of
the Sellers’ knowledge, there is no proceeding pending for the total or partial
condemnation and no eminent domain proceedings pending affecting any Mortgaged
Property. Except as set forth in the appraisal which forms part of the related
Mortgage File, the Mortgaged Property, normal wear and tear excepted, is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect materially and adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended.

(bb) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The
origination and collection practices used by the originator, each servicer of
the Mortgage Loan and the Sellers with respect to the Mortgage Loan have been
operated in all respects in accordance with industry custom and practice,
applicable laws and regulations and have been legally and properly operated.
With respect to escrow deposits and escrow payments (other than with respect to
each Second Lien Mortgage and for which the mortgagee under the first lien is
collecting escrow payments), all such payments are in the possession of, or
under the control of, one or both of the Sellers and there exist no deficiencies
in connection therewith for which customary arrangements for repayment thereof
have not been made. All escrow payments have been collected in full compliance
with state and federal law. If an escrow of funds has been established, it is
not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or escrow payments or other
charges or payments due Sellers have been capitalized under the Mortgage or the
Mortgage Note. All mortgage interest rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has been
properly paid and credited.

(cc) Appraisal. Unless indicated in the Sellers’ Underwriting Guidelines, the
Mortgage File for each Mortgage Loan contains an appraisal of the related
Mortgaged Property indicating an appraised value equal to the appraised value
identified for such Mortgaged Property on the Mortgage Loan, which appraisal is
either (i) with respect to Conforming Mortgage Loans only, an automated
appraisal acceptable to an Agency or (ii) signed prior to the approval of the
Mortgage Loan application by a qualified appraiser, duly appointed by Sellers,
who had no interest, direct or indirect, in the Mortgaged Property or in any
loan made on the security thereof and the appraiser and appraisal both satisfy
the requirements of Title XI of the Federal Institutions Reform, Recovery and
Enforcement Act of 1989 as amended and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated.

(dd) Servicemembers Civil Relief Act. The Mortgagor has not notified Sellers,
and Sellers have no knowledge, of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act of 2003.

(ee) LTV, PMI Policy. No Mortgage Loan has an LTV or CLTV in excess of 100%.
Each Mortgage Loan (other than a Subprime Mortgage Loan) with an LTV at
origination in excess of 80% is and will be subject to a PMI Policy, issued by a
Qualified Insurer, which insures that portion of the Mortgage Loan in excess of
the portion of the Appraised Value of the Mortgaged Property required by Fannie
Mae. All provisions of such PMI Policy have been and are being complied with,
such policy is in full force and effect, and all premiums due thereunder have
been paid. Any Mortgage subject to any such PMI Policy obligates the Mortgagor
thereunder to maintain such insurance and to pay all premiums and charges in
connection therewith. Except with respect to Agency Mortgage Loans, FHA Loans
and VA Loans, the Mortgage Interest Rate for the Mortgage Loan does not include
any such insurance premium;

(ff) Payment Terms. Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the proceeds of the Mortgage Loan were disbursed and
the Mortgage Note is payable on the first day of each month. As to each fixed
rate Mortgage Loan, interest is calculated on the Mortgage Note on the basis of
twelve 30-day months and a 360-day year, and, as to each adjustable rate
Mortgage Loan, interest is calculated on the Mortgage Note on the basis of the
number of days in the related interest accrual period. The origination date is
no earlier than ninety (90) days prior to the related Purchase Date.

(gg) No Bankruptcy of Mortgagor. None of the Mortgage Loans are subject to a
bankruptcy plan. To the best of the Sellers’ knowledge, since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the
Mortgage.

(hh) Construction or Rehabilitation of Mortgaged Property. No Mortgage Loan was
made in connection with (a) the construction or rehabilitation of a Mortgaged
Property or (b) facilitating the trade-in or exchange of a Mortgaged Property.

(ii) Underwriting Guidelines. Each Mortgage Loan has been underwritten in all
material respects in accordance with the related Underwriting Guidelines in
effect at the time the Mortgage Loan was originated or purchased by the Sellers.

(jj) Condominium/Planned Unit Developments. If the Mortgaged Property is a
condominium or a planned unit development (other than a de minimus planned unit
development), such condominium or planned unit development project meets the
Underwriting Guidelines.

(kk) Non-Eligible Mortgage Loans. No Mortgage Loan (a) is subject to
Section 226.32 of Regulation Z or any similar state law (relating to high
interest rate credit/lending transactions), or (b) is a High Cost Mortgage Loan.

(ll) Environmental Actions. To the best of the Sellers’ knowledge, the Mortgaged
Property is in material compliance with all applicable local, state and federal
environmental laws, rules or regulations pertaining to environmental hazards
including, without limitation, asbestos, and neither the Sellers nor, to the
best of the Sellers’ knowledge, the related Mortgagor, has received any notice
of any violation or potential violation of such law nor is there any pending
action or proceeding directly involving any Mortgaged Property of which the
Sellers are aware in which compliance with any environmental law, rule or
regulation is an issue.

(mm) Documents Genuine. To the best of the Sellers’ knowledge, such Purchased
Mortgage Loan and all accompanying collateral documents are complete and
authentic and all signatures thereon are genuine. Such Purchased Mortgage Loan
is a “closed” loan fully funded by the Sellers.

(nn) FHA Mortgage Insurance; VA Loan Guaranty. With respect to the FHA Loans,
the FHA Mortgage Insurance Contract is in full force and effect and there exists
no impairment to full recovery without indemnity to the Department of Housing
and Urban Development or the FHA under FHA Mortgage Insurance. With respect to
the VA Loans, the VA Loan Guaranty Agreement is in full force and effect to the
maximum extent stated therein. All necessary steps have been taken to keep such
guaranty or insurance valid, binding and enforceable and each of such is the
binding, valid and enforceable obligation of the FHA and the VA, respectively,
to the full extent thereof, without surcharge, set-off or defense. Each FHA Loan
and VA Loan was originated in accordance with the criteria of an Agency for
purchase of such Mortgage Loans.

(oo) Primary Mortgage Guaranty Insurance. Each Mortgage Loan which is
represented to the Buyer to have, or to be eligible for, FHA insurance is
insured, or eligible to be insured, pursuant to the National Housing Act. Each
Mortgage Loan which is represented by the Sellers to be guaranteed, or to be
eligible for guaranty, by the VA is guaranteed, or eligible to be guaranteed,
under the provisions of Chapter 37 of Title 38 of the United States Code. As to
each FHA insurance certificate or each VA guaranty certificate, the Sellers have
complied with applicable provisions of the insurance for guaranty contract and
federal statutes and regulations, all premiums or other charges due in
connection with such insurance or guarantee have been paid, there has been no
act or omission which would or may invalidate any such insurance or guaranty,
and the insurance or guaranty is, or when issued, will be, in full force and
effect with respect to each Mortgage Loan. There are no defenses, counterclaims,
or rights of set-off affecting the Mortgage Loans or affecting the validity or
enforceability of any private mortgage insurance or FHA insurance applicable to
the Mortgage Loans or any VA guaranty with respect to the Mortgage Loans.

(pp) Tax and Property Descriptions. To the best of the Sellers’ knowledge,
except as disclosed to the Buyer in writing, all tax identifications and
property descriptions are legally sufficient; and tax segregation, where
required, has been completed. Each Seller has reviewed all of the documents
constituting the Mortgage File and has made such inquiries as it deems necessary
to make and confirm the accuracy of the representations set forth herein. To the
best of the Sellers’ knowledge, except as disclosed to the Buyer in writing, all
tax identifications and property descriptions are legally sufficient; and tax
segregation, where required, has been completed. Each Seller has obtained a life
of loan, transferable real estate tax service contract with an approved tax
service contract provider on each Mortgage Loan and such contract is assignable
without penalty, premium or cost to the Buyer. Each Seller has obtained a life
of loan, transferable real estate tax service contract with an approved tax
service contract provider on each Mortgage Loan and such contract is assignable
without penalty, premium or cost to the Buyer.

(qq) Recordation. Each original Mortgage was or shall be recorded and, except
for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Buyer) have been or shall be recorded in the appropriate jurisdictions where
such recordation is necessary to perfect the lien thereof as against creditors
of the Sellers, or is in the process of being recorded

(rr) Takeout Commitment. Each Takeout Commitment is a legal, valid and binding
obligation of the Sellers enforceable against each of them in accordance with
its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

(ss) No Fraud. There was no fraud involved in the origination of the Mortgage
Loan by the mortgagee or, to the Sellers’ knowledge, by the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan.

(tt) Interest. The Mortgage Loan bears interest at the mortgage interest rate
and the Mortgage Note does not permit negative amortization. None of the
Mortgage Loans are simple interest Mortgage Loans.

(uu) No Balloon Payment. Other than with respect to a 40/30 Mortgage Loan or a
30/15 Mortgage Loan, no Mortgage Loan has a balloon payment feature.

(vv) Prepayment Penalty. With respect to each Mortgage Loan that has a
prepayment penalty feature, each such prepayment penalty is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. No Mortgage Loan will impose a prepayment penalty
for a term in excess of five years from the date such Mortgage Loan was
originated. Except as otherwise set forth on the Mortgage Loan Schedule, with
respect to each Mortgage Loan that contains a prepayment penalty, such
prepayment penalty is at least equal to the lesser of (A) the maximum amount
permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan.

(ww) No Single-Premium Credit Insurance Policies. None of the proceeds of the
Mortgage Loan were used to finance single-premium credit insurance policies.

(xx) Government Subsidy Program. No Mortgage Loan is subject to any governmental
subsidy program.

(yy) Regarding the Mortgagor. The Mortgagor is one or more natural persons, and
no Mortgagor is an Affiliate, officer or director of any Seller or any Affiliate
of any Seller.

(zz) Original Principal Balance. No Mortgage Loan has an original principal
balance greater than $1.5 million.

(aaa) Credit Rating. No Mortgage Loan has a “D” credit grade or lower under the
Underwriting Guidelines.

(bbb) Warehousing. No Mortgage Loan was previously warehoused with any other
Person, whether under a lending arrangement or an arrangement involving a sale
in contemplation of a subsequent further sale to (or securitization by) a
secondary mortgage market purchaser.

(ccc) Sale and Transfer. Neither Seller nor their Affiliates sold and
transferred, or attempted to sell and transfer, such Mortgage Loan to any other
Person; provided that this provision shall not be construed or applied to
disqualify a Purchased Mortgage Loan simply because it was purchased by a Seller
out of a pool of serviced Mortgage Loans or from a whole loan investor for whose
Mortgage Loans such Seller is a servicer pursuant to the Seller’s (or an
Affiliate’s) obligation or election as servicer to do so.

(ddd) Alt-A Mortgage Loans. No Alt-A Mortgage Loan has a CLTV greater than 95%
or a FICO score less than 600.

(eee) Takeout Commitments. Every Purchased Mortgage Loan that is a Jumbo
Mortgage Loan, Super Jumbo Mortgage Loan or Conforming Mortgage Loan is subject
to a Takeout Commitment.

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