1/05 SENIOR SECURED CREDIT AGREEMENT

dated as of January 4, 2005
by and among

E-LOAN, INC.

and

JPMORGAN CHASE BANK, N.A.,
as the Agent, Collateral Agent and a Lender,

and

the other Lender(s) parties hereto

$150,000,000 Senior Secured Revolving Credit

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Index of Defined Terms
(continued)
Page

 
7/04 Credit Agreement
1
Adjusted GAAP Net Worth
2
Advance
3
Advance Rate
12
Affiliate
3
Aged Loan
20
Agency
3
Agent
1
Agent’s Fee
48
Aggregate Committed Sum
4
Agreement
1
Alt-A Loan
4
Appraisal
4
Approved Investor
4
Approved Subprime Investor
4
Authorized Company Representative
4
AVM
4
Balance Adjusted Rate
36
Balances Equivalent Tranche
37
Base Rate
36
Base Rate Tranche
37
Basic Papers
5
Bloomberg British Bankers Association LIBOR Page
33
Book Collateral Value
5
Book HELOC Collateral Value
9
Book Prime Loan Collateral Value
10
Book Repurchased Loan Collateral Value
11
Book Second Lien Loan Collateral Value
11
Book Subprime Loan Collateral Value
12
Borrowing
5
Borrowing Base
5
Broker’s Price Opinion
5
Business Day
5
Cash Equivalents
6
Ceiling Rate
36
Central Elements
6
Change of Control
6
Change of Executive Management
7
Class of Borrowings
33
Collateral
7
Collateral Confirmation Agreement
7
Collateral Records
8
Collateral Support
8

 

       

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Index of Defined Terms
(continued)
Page

Collateral Value
9
Commitment
12
Commitments Cancellation Date
31
Committed Sum
13
Company
1
Company Customer
13
Company Customer Information
13
Control
3
Credit Line
13
Cumulative Loan-to-Value Ratio
13
Currency Agreement
13
Current Appraisal
13
Current Broker’s Price Opinion
14
Current Credit Agreement
1
Custodian
14
Custodian’s Fees
14
Custody Agreement
14
Customer
14
Debt
14
Default
15
Determination Date
15
Disqualifier
1
Dry Loan
15
Effective Date
1
Electronic Agent
15
Electronically Submitted
15
Eligible Assignee
100
Eligible Collateral
1
Eligible Single-family Collateral
1
Equity Interests
16
ERISA
16
Eurodollar Reserve Requirements
34
Event of Default
16
Facilities
16
Facilities Papers
16
Facility
16
Facility Fee
47
Fannie Mae
16
Federal Funds Effective Rate
35
FHA
16
FICA
16
FICO
16
File
16
Financial Statements
63

 
 

       

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Index of Defined Terms
(continued)
Page

Freddie Mac
16
Free Adjusted Balances Equivalent
34
Funding Share
17
GAAP
17
Ginnie Mae
17
Governmental Authority
17
Hazard Insurance Policy
17
Hedge Agreement
18
HELOC
18
HELOC Collateral Value
9
HLTV Loan
18
HUD
18
In Default
18
Indemnified Liabilities
93
Indemnified Parties
93
Index
34
Interest Rate Protection Agreement
18
Internal Revenue Code
18
JPMorgan
1
JPMorgan Loan Balances
35
Jumbo Loan
18
Late Pledged (Seasoned) Loan
19
Law
19
Legal Requirement
19
Lender
19
Lender Affiliate
19
LIBOR
35
Lien
19
Line
19
Line Limit
19
Liquidity
19
Loan
20
Loan Papers
20
Long Warehoused (Aged) Loan
20
Margin Stock
20
Market Value
20
Maturity Date
20
Maximum Aggregate Commitment
20
MERS
21
MERS Designated Loan
21
MERS Procedures Manual
21
MERS® System
21
Mortgage  21 Mortgage Assignment  21

 

       

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Index of Defined Terms
(continued)
Page

Mortgage Loan
21
Mortgage Note
22
Mortgaged Premises
22
Multiemployer Plan
22
Nonfunding Lender
26
Non-owner Occupied Loan
22
Nonrecourse Debt
22
Nonrecourse Facility
22
Note Payment Account
22
Notices
101
Obligations
23
Officer’s Certificate
23
Operating Subsidiaries
23
Original Pledge Date
23
Overdraft Advance
48
Past Due Rate
36
Permitted Debt
83
Permitted Encumbrances
23
Person
23
Plan
24
Pledged Loans
24
Pledged Loans Curtailment Report
24
Pledged to the Agent
24
Prime Loan
25
Prime Loan Collateral Value
10
Prime Rate
34
Principal Balance
25
Privacy Requirements
25
Pro Rata
26
Property
26
Purchase Commitment
27
Qualified Subordinated Debt
27
Rate
36
Recourse Servicing Agreement
27
Redemption Amount
27
Redemption Call
27
Regulation D
27
Regulation Q
27
Regulation U
27
Regulation X
28
Repurchased Loan
28
Repurchased Loan Collateral Value
11
Request for Borrowing
28
Required Lenders
28

 

       

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Index of Defined Terms
(continued)
Page

Second Lien Loan
28
Second Lien Loan Collateral Value
11
Security Instruments
28
Senior Credit Notes
28
Serviced Loans
29
Servicer
29
Servicing Agreement
29
Servicing Rights
29
Single-family
29
Single-family Collateral
7
Single-family Loan
29
Single-family Warehouse Advance
3
Single-purpose Finance Subsidiary
29
Solvent
29
Stated Rate
36
Statement Date
29
Statement Date Financial Statements
63
Submission List
29
Subordination Agreement
30
Subprime Loan
30
Subprime Loan Collateral Value
12
Subsidiary
30
Super Jumbo Loan
30
Supplemental Papers
30
Swing Line
30
Swing Line Borrowing Due Date
30
Swing Line Limit
31
Swing Line Note
40
Taxes
31
Termination Date
31
Total Liabilities
31
Townhouse or Condo Loan
31
Tranche
37
UCC
31
USA Patriot Act
104
VA
31
Warehouse Transmission File
31
Wet Loan
31
Wet Warehousing
32
Wet Warehousing Advance
3
Wet Warehousing Sublimit
33
Whole Loans
33

 

       

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Table of Contents

Page

1
DEFINITIONS
2
1.1.
Defined Terms
2
1.2.
Definitions of General Application
2
1.3.
Definitions for Interest Calculations
33
1.4.
Other Definitional Provisions.
37
2
THE LENDERS’ COMMITMENTS
38
2.1.
The Lenders’ Commitments to Lend
38
2.2.
Expiration or Termination of the Commitments
39
2.3.
Advances Outstanding May Not Exceed Limits
39
2.4.
Advances to be Requested and Use of Proceeds
39
2.5.
Swing Line Commitment
39
2.6.
Swing Line Borrowings
39
3
GENERAL BORROWING PROCEDURES
40
3.1.
Separate Request for Each Borrowing
40
3.2.
Funding of Advances.
40
3.3.
Time When Submission List(s) and New Collateral Papers (If Any) Due
42
3.4.
If Outstanding Advances Would Exceed the Borrowing Base
43
3.5.
If a Request for Borrowing or New Collateral Papers are Received Late;
   
Waiver of Claim for Any Late Funding
43
4
THE SENIOR CREDIT NOTES
43
5
INTEREST, PRINCIPAL AND FEES PAYMENTS
44
5.1.
Interest
44
5.2.
Interest Rates.
45
5.3.
Principal
45
5.4.
Interest (and Principal) Due at Maturity
46
5.5.
Rate of Return Maintenance Covenant
46
5.6.
Chief Credit Officer’s Certificate Conclusive
47
5.7.
Facility Fee
47
5.8.
Agent’s Fee
48
5.9.
Overdraft Advances
48
5.10.
Prepayments
48
5.11.
Payments.
49
5.12.
Pro Rata Distribution of Payments
50
6
COLLATERAL
50
6.1.
Grant of Security Interest
50
6.2.
Further Assurances Concerning Collateral
52
6.3.
Delivery of Additional Collateral or Mandatory Prepayment
52
6.4.
Mandatory Redemption of Subpar Alt-A Collateral for Low Weighted Average
   
FICO Scores or of Nonconforming Pledged Loans if Less Than 95%
   
Conform with Fannie Mae or Freddie Mac Requirements.
53
6.5.
Mortgaging of Real Property Collateral
54
6.6.
Pledged Loans’ Collection and Servicing Rights
55
6.7.
Rights After Occurrence of Event of Default
55

 

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Table of Contents
(continued)
Page

6.8.
Sale and Agent’s Delivery of Collateral to Approved Investors
56
6.9.
Collateral Sale Proceeds to be Paid to Agent.
56
6.10.
Attorney in Fact Appointment
57
6.11.
Right of Redemption From Pledge
58
6.12.
Return of Collateral at End of Commitment
58
6.13.
Acceptance or Shipping Per Instructions of Returned Collateral is Acquittance
58
7
CONDITIONS PRECEDENT
59
7.1.
Initial Advance
59
7.2.
Each Advance
60
8
REPRESENTATIONS
62
8.1.
Organization; Good Standing; Subsidiaries
62
8.2.
Authorization and Enforceability
62
8.3.
Approvals
63
8.4.
Financial Condition
63
8.5.
Litigation
63
8.6.
Licensing
64
8.7.
Hedge Investments in Mortgage Loans
64
8.8.
Compliance with Applicable Laws
64
8.9.
Regulation U
64
8.10.
Investment Company Act
64
8.11.
Payment of Taxes
64
8.12.
Agreements
65
8.13.
Title to Properties
65
8.14.
The Company’s Address
65
8.15.
ERISA
65
8.16.
Special Representations Concerning Collateral
66
8.17.
Survival
72
9
AFFIRMATIVE COVENANTS
72
9.1.
Pay Senior Credit Notes
73
9.2.
Financial Statements
73
9.3.
Financial Statements Will be Accurate
74
9.4.
Other Reports
74
9.5.
Maintain Existence and Statuses; Conduct of Business
76
9.6.
Compliance with Applicable Laws
76
9.7.
Inspection of Properties and Books; Protection of Company’s
 
Proprietary Information
76
9.8.
Privacy of Customer Information
76
9.9.
Notice of Suits, Etc. and Notice and Approval of Proposed Servicing Transfers
77
9.10.
Payment of Taxes, etc
78
9.11.
Insurance
78
9.12.
Maintain Priority and Perfection of Lender’s Lien
78
9.13.
Subordination of Certain Indebtedness
78
9.14.
Use of Proceeds of Advances
78

 

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Table of Contents
(continued)
Page

9.15.
Promptly Correct Escrow Imbalances
78
9.16.
MERS Covenants
79
9.17.
Special Affirmative Covenants Concerning Collateral.
80
9.18.
Coordination with Other Lenders/Repo Purchasers and Their Custodians
82
10
NEGATIVE COVENANTS
82
10.1.
Contingent Liabilities
82
10.2.
Conditional Repurchase, Indemnity or Other Recourse Obligations
82
10.3.
Pledging or Assignment of Servicing Rights
82
10.4.
No Reorganization
82
10.5.
Merger; Sale of Assets; Acquisitions
82
10.6.
Permitted Debt
83
10.7.
Financial Covenants
84
10.8.
Special Negative Covenants Concerning Collateral.
84
11
DEFAULTS AND REMEDIES
85
11.1.
Events of Default
85
11.2.
Cure or Waiver
88
11.3.
Remedies.
88
11.4.
Application of Proceeds
91
11.5.
Agent Appointed Attorney-in-Fact
91
11.6.
Right of Setoff
92
12
REIMBURSEMENT OF EXPENSES; INDEMNITY
92
13
RELATIONSHIPS AMONG THE AGENT AND THE LENDERS
94
13.1.
Agent’s Duties
94
13.2.
Actions Requiring All Lenders’ Consent
94
13.3.
Actions Requiring Required Lenders’ Consent
95
13.4.
Agent’s Discretionary Actions
96
13.5.
Lenders’ Cooperation
96
13.6.
Lenders’ Sharing Arrangement
97
13.7.
Lenders’ Acknowledgment
97
13.8.
Agent’s Representations to Lenders
97
13.9.
Agent’s Duty of Care, Express Negligence Waiver and Release
97
13.10.
Calculations of Shares of Principal and Other Sums
98
13.11.
Resignation of the Agent
98
13.12.
Effective Date of Resignation of the Agent
99
13.13.
Successor Agent
99
13.14.
Merger of the Agent
99
13.15.
Participation; Assignment.
99
14
NOTICES
101
15
MISCELLANEOUS
103
15.1.
Terms Binding Upon Successors; Survival of Representations
103
15.2.
Items to Be Satisfactory to the Agent or the Custodian
103
15.3.
Usury Not Intended; Credit or Refund of Any Excess Payments
103
15.4.
This Agreement and the Other Facilities Papers
104

 

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Table of Contents
(continued)
Page

15.5.
No Waiver
104
15.6.
USA Patriot Act Notification
104
15.7.
Counterpart Execution; Amendments
105
15.8.
Governing Law, Jurisdiction and Venue
105
15.9.
Waiver of Jury Trial
105
15.10.
Relationship of the Parties
105

 
 

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1/05 SENIOR SECURED CREDIT AGREEMENT

Preamble

This 1/05 Senior Secured Credit Agreement (the “1/05 Credit Agreement” and as it
may be supplemented, amended or restated, the “Current Credit Agreement” or,
within itself, this “Agreement”), whose effective date (the “Effective Date”) is
January 4, 2005, among E-LOAN, INC. (the “Company”), a Delaware corporation with
its principal office at 6230 Stoneridge Mall Road, Pleasanton, California 94588,
JPMORGAN CHASE BANK, N.A. (“JPMorgan”), a national banking association, acting
herein as a Lender (as defined in Section 1.2) and agent and representative of
the other Lenders (in that capacity JPMorgan is called the “Agent”), and such
other Lenders as may from time to time be party to this Agreement, recites and
provides as follows:

Recitals

The Company has asked the Lenders and the Agent to establish a $150 million
senior, secured, revolving line of credit for warehousing the Company’s
Single-family mortgage loans, with availability of 100% of the Aggregate
Committed Sum to finance Prime Loans, 100% of the Aggregate Committed Sum to
finance Dry Loans and limited availability for Wet Loans (60% of the Aggregate
Committed Sum for the first four and last three Business Days of the month and
40% on other days), Jumbo Loans (25% of the Aggregate Committed Sum plus any
unused portion of the following sublimit for Super Jumbo Loans) and Super Jumbo
Loans (10% of the Aggregate Committed Sum), Alt-A Loans (10% of the Aggregate
Committed Sum), Second Lien Loans and HELOCs (Prime Loans only, 50% of the
Aggregate Committed Sum), Subprime Loans (15% of the Aggregate Committed Sum),
Late Pledged (Seasoned) Loans (5% of the Aggregate Committed Sum), Long
Warehoused (Aged) Loans (20% of the Aggregate Committed Sum), Non-owner Occupied
Loans (5% of the Aggregate Committed Sum), HLTV Loans ($5 million) and
Repurchased Loans (2.5% of the Aggregate Committed Sum), subject to the
requirement that at all times at least 95% of all Pledged Loans, excluding Alt-A
Loans, Second Lien Loans, Repurchased Loans, Subprime Loans, Jumbo Loans and
Super Jumbo Loans, must conform to the underwriting and other requirements of
Fannie Mae or Freddie Mac (capitalized terms used in these recitals being
defined above or in Section 1), and the Lenders and the Agent have agreed to do
so on the terms and subject to the conditions of this Agreement.

In addition, if and when JPMorgan is no longer the only Lender (as it is on the
Effective Date), JPMorgan has agreed to provide a separate revolving swing line
of credit in an amount equal to JPMorgan’s Commitment to initially and
temporarily finance the Company’s borrowings pending their funding by all of the
Lenders pursuant to this Agreement.

 

       

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The Lenders’ and Agent’s agreement to establish and continue the credit line and
JPMorgan’s agreement to establish and continue the swing line are each made upon
and subject to the terms and conditions of this Agreement. If there is any
conflict or inconsistency between these recitals and the following agreements,
the latter shall govern and control. If there is any conflict or inconsistency
between any of the terms or provisions of this Agreement and any of the other
Facilities Papers, this Agreement shall govern and control. If there is any
conflict between any provision of this Agreement and any later supplement,
amendment, restatement or replacement of it, the latter shall govern and
control.

Agreements

In consideration of the premises, the mutual agreements stated below and other
good and valuable consideration paid by each party to each other party to this
Agreement, the receipt and sufficiency of which each hereby acknowledges, the
parties hereby agree as follows.

1  DEFINITIONS
 
1.1.  Defined Terms. Except where otherwise specifically stated, capitalized
terms used in this Agreement and the other Facilities Papers have the meanings
assigned to them below or elsewhere in this Agreement.
 
1.2.  Definitions of General Application. The terms defined in this Section are
generally applicable. For convenience of reference, defined terms relating only
to the calculation and payment of interest are defined in Section 1.3.
 
“1/05 Credit Agreement” is defined in this Agreement’s preamble.

“Acceleration Date” is defined in the definition of “Maturity Date”.

“Adjusted GAAP Net Worth” means, on any day:

(a)    the excess of the Company’s total assets over total liabilities on that
day — including assets and liabilities of its wholly-owned subsidiaries — each
being determined in accordance with GAAP consistent with the accounting
principles applied in the preparation of the Financial Statements referred to in
Section 8.4;

less    (b)    the value included in the Financial Statements referred to in
Section 8.4 for capitalized mortgage loan servicing rights and capitalized
excess mortgage loan servicing fees;

less    (c)     aggregate investments in Subsidiaries and Affiliates included in
the Financial Statements referred to in Section 8.4;

less    (d)    net total advances to Subsidiaries and Affiliates outstanding;

less    (e)    goodwill and all other assets not supported by or representative
of a tangible asset, which intangible assets would be deemed by HUD to be
unacceptable for the purpose of calculating adjusted net worth in accordance
with HUD requirements in effect as of such day;

plus    (f)    Qualified Subordinated Debt to the extent due thirty (30) days or
more after the Maturity Date.

    2   

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“Advance” means a disbursement by the Lenders under the Loan in accordance with
the terms of this Agreement — including initial disbursements, readvances of
funds previously advanced to the Company and repaid to the Lenders and
protective advances made without any requirement for any Request for Borrowing —
and is a correlative of “Borrowing”: a Borrowing from the Lenders’ and the
Agent’s point of view. Where “Swing Line” prefaces “Advance”, then it means an
Advance by JPMorgan under the Swing Line. Each Advance shall be classified by
the Agent as of its initial funding date (or, for Advances made to fund Wet
Loans to the extent of the Collateral Values of such Wet Loans as they convert
to Dry Loans, on their conversion date) as one or another of the following
Classes:

(i)    a “Single-family Warehouse Advance” meaning an Advance made to finance
Dry Loans; or

(ii)    a “Wet Warehousing Advance” meaning an Advance made to finance Wet
Loans.

“Advance Rate” is defined in the definition of “Collateral Value”.

“Affiliate” means and includes, with respect to a specified Person, any other
Person:

(a)    that directly or indirectly through one or more intermediaries Controls,
is Controlled by or is under common Control with the specified Person (in this
definition only, the term “Control” means having the power to set or direct
management policies, directly or indirectly);

(b)    that is a director, trustee, partner, member or executive officer of the
specified Person or serves in a similar capacity in respect of the specified
Person;

(c)    of which the specified Person is a director, trustee, partner, member or
executive officer or with respect to which the specified Person serves in a
similar capacity and over whom the specified Person, either alone or together
with one or more other Persons similarly situated, has Control;

(d)    that, directly or indirectly through one or more intermediaries, is the
beneficial owner of twenty percent (20%) or more of any class of equity
securities — which does not include any MBS — of the specified Person; or

(e)    of which the specified Person is directly or indirectly the owner of
twenty percent (20%) or more of any class of equity securities of the specified
Person.

“Aged Loan” is defined in the definition of “Long Warehoused (Aged) Loan”.

“Agency” means Ginnie Mae, Fannie Mae, Freddie Mac, HUD, FHA or VA.

“Agent” is defined in this Agreement’s preamble.

“Agent’s Fee” is defined in Section 5.8.

     3  

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“Aggregate Committed Sum” means, on any day, the lesser of (a) the Maximum
Aggregate Commitment for that day as stated in Schedule MAC in effect for that
day, and (b) the aggregate of the Lenders’ individual Committed Sums for that
day as stated in the definition of “Committed Sum” below.

“Agreement” is defined in this Agreement’s preamble.

“Alt-A Loan” means a first Lien Single-family Loan that is not a Prime Loan and
has a FICO score of at least 620, a Cumulative Loan-to-Value Ratio of
ninety-five percent (95%) or less and that satisfies the underwriting guidelines
of, and is eligible for purchase by, an Approved Investor.

“Appraisal” means an appraisal by a licensed appraiser selected in accordance
with Agency guidelines and not identified to the Company 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 Agent on a case-by-case basis — is not a director,
officer or employee of the Company or any Affiliate of the Company, or related
as a parent, sibling, child or first cousin to any of the Company’s or any such
Affiliate’s respective directors or officers or any of their spouses, a signed
copy of the written report of which appraisal is in the possession of the
Company or its Servicer.

“Approved Investor” means Ginnie Mae, Fannie Mae, Freddie Mac and any of the
Persons listed on Schedule AI, as it may be supplemented or amended from time to
time by agreement of the Company and the Agent; provided that if the Agent shall
give written notice to the Company of the Agent’s reasonable disapproval of any
Approved Investor(s) named in the notice, the investor(s) named shall no longer
be Approved Investor(s) from and after the time when the Agent sends that notice
to the Company.

“Approved Subprime Investor” means an Approved Investor that is approved by the
Agent to purchase, and purchases, Subprime Loans from the Company.

“Authorized Company Representative” means a representative of the Company duly
designated by all requisite corporate action to execute any certificate,
schedule or other document contemplated or required by this Agreement or the
Custody Agreement on behalf of the Company and as its act and deed. A list of
Authorized Company Representatives current as of the Effective Date is attached
as Schedule AR. The Company will use its best efforts to provide an updating
list of Authorized Company Representatives to the Agent and the Custodian
promptly following each addition to or subtraction from such list, and the
Agent, the Lenders and the Custodian shall be entitled to rely on each such list
until such an updating list is received by the Agent and the Custodian.

“AVM” means an automated valuation model used to determine the valuation of
Mortgaged Premises securing Second Liens or HELOCs as provided for and described
in the Company’s underwriting guidelines

    4   

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“Basic Papers” means all of the Loan Papers that must be delivered to the
Custodian — in the case of Wet Loans, on or before the fifth (5th) Business Day
after the related Advance — in order for any particular item of Collateral to be
Eligible Collateral and have Collateral Value. Exhibit C to the Custody
Agreement lists the Basic Papers, and reference is here made to the Custody
Agreement for that listing.

“Book Collateral Value” means the Book HELOC Collateral Value, the Book Prime
Loan Collateral Value, the Book Repurchased Loan Collateral Value, the Book
Second Lien Loan Collateral Value, the Book Subprime Loan Collateral Value,
whichever the context requires.

“Book HELOC Collateral Value” is defined in clause (a) of the definition of
“Collateral Value”.

“Book Prime Loan Collateral Value” is defined in clause (b) of the definition of
“Collateral Value”.

“Book Repurchased Loan Collateral Value” is defined in clause (c) of the
definition of “Collateral Value”.

“Book Second Lien Loan Collateral Value” is defined in clause (d) of the
definition of “Collateral Value”.

“Book Subprime Loan Collateral Value” is defined in clause (e) of the definition
of “Collateral Value”.

“Borrowing” is a correlative of “Advance”: an Advance from the Company’s point
of view. Where “Swing Line” prefaces “Borrowing”, then it means a Borrowing from
JPMorgan under the Swing Line. Where “Wet Warehousing” prefaces “Borrowing”,
then it means a Borrowing under the Wet Warehousing Sublimit.

“Borrowing Base” means, on any day, the sum of the Collateral Values of all
Eligible Collateral then Pledged to the Agent.

“Broker’s Price Opinion” means the written opinion of the value of a tract or
parcel of Single-family residential real property securing a Mortgage Loan,
issued by a real estate broker duly licensed as such by the jurisdiction in
which the subject property is located and that is not an Affiliate of the
Company or of any of the Company’s or its Subsidiaries’ or Affiliates’ directors
of officers and is not an employee of any of them, selected reasonably and in
good faith by the Company.

“Business Day” means any day when both (1) the Agent’s main branch in Houston,
Texas is open for regular commercial banking business and (2) federal funds wire
transfers can be made.

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“Cash Equivalents” means and includes, on any day:

(a)    any evidence of debt issued by the United States government, or
guaranteed as to the timely payment of principal and interest by the United
States government, and maturing twelve (12) months or less after that day;

(b)    commercial paper issued by a corporation (other than an Affiliate of the
Company) organized under the laws of any state of the United States of America
or of the District of Columbia, rated A1 by Standard & Poor’s (a division of The
McGraw-Hill Companies, Inc.), Prime-1 by Moody’s Investors Service, Inc. or the
equivalent rating by another nationally-recognized ratings service acceptable to
the Agent, and having a stated maturity date nine (9) months or less after its
issue date;

(c)    any certificate of deposit or banker’s acceptance issued by a commercial
bank that is a member of the Federal Reserve System and has a combined
unimpaired capital and surplus and unimpaired undivided profits of not less than
Five Hundred Million Dollars ($500,000,000), and maturing not more than twelve
(12) months after that day; and

(d)    any repurchase agreement (i) entered into with any Federal Reserve System
member commercial bank of the size referred to in clause c above and (ii)
secured by any obligation of the type described in any of clauses (a)-(c) above
and (iii) having a market value on its date of at least one hundred percent
(100%) of the repurchase obligation of that commercial bank.

“Central Elements” means and includes the value of a substantial part of the
Collateral; the prospects for repayment of each portion of the Loan, both
principal and interest, when due; the validity or enforceability of this
Agreement, any Senior Credit Note (including the Swing Line Note, if any), the
Custody Agreement, the Electronic Tracking Agreement and all securities
agreements, mortgages, reimbursement agreements and other contracts between or
among the parties now or hereafter executed evidencing, securing or otherwise
relating to the Facilities, and any renewal, extension, rearrangement, increase,
supplement, modification or restatement of any of them; the property, principal
business operations or financial condition of the Company and any of its
Subsidiaries; the ability of the Company and any of its Subsidiaries to fulfill
their respective obligations under the foregoing agreements, each taken as a
whole, and the Company’s and its Subsidiaries’ prospects of continuing in
business as a going concern.

“Change of Control” means and includes:

(a)    a sale of substantially all of the Company’s assets to a Person or
related group of Persons;

(b)    the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934, as amended, and the rules of the United States Securities and
Exchange Commission thereunder as in effect on the Effective Date), of Equity
Interests representing more than twenty percent (20%) of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests of the
Company;

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(c)    occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Company by Persons who were neither (i) nominated by
the board of directors of the Company nor (ii) appointed by directors so
nominated;

(d)    any event that give holders of preferred Equity Interests or other
securities issued pursuant to any shareholders’ rights plan of the Company the
right to purchase or convert such securities into Equity Interests of the
Company; or

(e)    the acquisition of direct or indirect Control of the Company by any
Person or group;

if any, that occurs on or after the Effective Date.

“Change of Executive Management” means the occurrence of any event after which,
without the Agent’s prior written consent, any of Christian A. Larsen, Matthew
Roberts or Mark E. Lefanowicz shall cease for any reason whatsoever, including
death or disability, to be, and to continuously perform the duties of chief
executive officer, chief financial officer or president, respectively, of the
Company or, if such cessation shall occur as a result of death or disability, no
successor satisfactory to the Agent, in its reasonable judgment, shall have
become, and shall have commenced to perform the duties of, chief executive
officer, chief financial officer or president, respectively, of the Company
within ninety (90) days after such cessation; provided that if any such
satisfactory successor shall have been so elected and shall have commenced
performance of such duties within such period, then the name of such successor
or successors shall be deemed to have been inserted in place of Christian A.
Larsen, Matthew Roberts or Mark E. Lefanowicz, as applicable, in this
definition.

“Collateral” is any or all collateral (as the context requires) for the
Obligations, consisting of the “Single-family Collateral”, which means Pledged
Loans, their security, their related Loan Papers and the right to recover under
the related Hazard Insurance Policies.

“Collateral Confirmation Agreement” means a collateral confirmation agreement in
the form attached as Exhibit F to the Custody Agreement or another form
acceptable to the Custodian, duly executed by an Authorized Company
Representative and delivered to the Custodian (1) listing Mortgage Loans being
Pledged to the Agent (or, in the case of Dry Loans already pledged as Wet Loans,
listing Mortgage Loans whose Basic Papers are being delivered to the Agent)
concurrently with the delivery to the Custodian of such collateral confirmation
agreement by Company loan number and showing for each the Customer name and
original loan amount, (2) certifying that, for each such Pledged Loan, the Basic
Papers have been executed and delivered by all appropriate Persons and such
Pledged Loan has been originated, closed, funded and sold and assigned to the
Company and (3) certifying that the Basic Papers for such Mortgage Loan have
been shipped to the Custodian or (in the case of Wet Loans) are in the
possession of its closer, the Company or the Company’s Servicer for such Pledged
Loan, and that (for all Pledged Loans) one of the latter has possession of the
Supplemental Papers therefor.

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“Collateral Records” means books, records, ledger cards, files, papers,
documents, instruments, certificates, appraisal reports journals, reports,
correspondence, customer lists, information and data that describes, catalogs or
lists such information or data, computer printouts, media (tapes, discs, cards,
drives, flash memory or any other kind of physical or virtual data or
information storage media or systems) and related data processing software
(subject to any licensing restrictions) and similar items that at any time
evidence or contain information relating to any of the Collateral, and other
information and data that is used or useful for managing and administering the
Pledged Loans, together with the nonexclusive right to use (in common with the
Company and any other secured party that has a valid and enforceable security
interest therein and that agrees that its security interest is similarly
nonexclusive) the Company’s operating systems to manage and administer any of
the Collateral and any of the related data and information described above, or
that otherwise relates to the Collateral, together with the media on which the
same are stored to the extent stored with material information or data that
relates to property other than the Collateral (tapes, discs, cards, drives,
flash memory or any other kind of physical or virtual data or information
storage media or systems), and the Company’s rights to access the same, whether
exclusive or nonexclusive, to the extent that such access rights may lawfully be
transferred or used by the Company’s permittees, and any computer programs that
are owned by the Company (or licensed to the Company under licenses that may
lawfully be transferred or used by the Company’s permittees) and that are used
or useful to access, organize, input, read, print or otherwise output and
otherwise handle or use such information and data.

“Collateral Support” means all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and includes any security
agreement or other agreement granting a lien or security interest in such real
or personal property, including:

(a)    all Loan Papers, whether now owned or hereafter acquired, related to, and
all private mortgage insurance on, any Pledged Loans, and all renewals,
extensions, modifications and replacements of any of them;

(b)    all rights, liens, security interests, guarantees, insurance agreements
and assignments accruing or to accrue to the benefit of the Company in respect
of any Pledged Loan;

(c)    all of the Company’s rights, powers, privileges, benefits and remedies
under each and every paper now or hereafter securing, insuring, guaranteeing or
otherwise relating to or delivered in connection with any Pledged Loan,
including all guarantees, lien priority agreements, security agreements, deeds
of trust, collateral assignments, subordination agreements, negative pledge
agreements, loan agreements, management agreements, development agreements,
design professional agreements, payment, performance or completion bonds, title
and casualty insurance policies and mortgage guaranty or insurance contracts;

(d)    all of the Company’s rights, to the extent assignable, in, to and under
any and all commitments issued by (i) Ginnie Mae, Fannie Mae, Freddie Mac,
another mortgage company or any other investor or any lender or securities
issuer to guarantee, purchase or invest in any of the Pledged Loans or any MBS
based on or backed by any of them or (ii) any broker or investor to purchase any
MBS, whether evidenced by book entry or certificate, representing or secured by
any interest in any of the Pledged Loans, together with the proceeds arising
from or pursuant to any and all such commitments;

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(e)    all rights under every Hazard Insurance Policy relating to real estate
securing a Pledged Loan for the benefit of the creditor of such Pledged Loan,
the proceeds of all errors and omissions insurance policies and all rights under
any blanket hazard insurance policies to the extent they relate to any Pledged
Loan or its security and all hazard insurance or condemnation proceeds paid or
payable with respect to any of the Pledged Loans and/or any of the property
securing payment of any of the Pledged Loans or covered by any related
instrument;

(f)    all present and future claims and rights of the Company to have, demand,
receive, recover, obtain and retain payments from, and all proceeds of any
nature paid or payable by, any governmental, quasi-governmental or private
mortgage guarantor or insurer (including VA, FHA or any other Person) with
respect to any of the Pledged Loans; and

(g)    all tax, insurance, maintenance fee and other escrow deposits or payments
made by the Customers under such Pledged Loans (the Agent and the Lenders
acknowledge that the Company’s rights in such deposits are limited to the rights
of an escrow agent and such other rights, if any, in and to such deposits as are
accorded by the Pledged Loans and related papers) and all monies, accounts,
deposit accounts, payment intangibles and general intangibles, however
designated or maintained, constituting or representing so-called “completion
escrow” funds or “holdbacks”, and being Pledged Loans’ proceeds recorded as
disbursed but that have not been paid over to the seller of the subject
Mortgaged Premises (the purchase of which is financed by such Pledged Loan), but
that are instead being held by the Company or by a third party escrow agent
pending completion of specified improvements or landscaping requirements for
such Mortgaged Premises.

“Collateral Value” means the value of Eligible Collateral for purposes of this
Agreement. Collateral (i) that is not duly Pledged to the Agent, (ii) in which
the Agent does not have a first and prior perfected Lien (except that in the
case of Wet Loans Pledged to the Agent for five (5) or less Business Days, the
fact that the Agent does not have possession, directly or through the Custodian,
of the Basic Papers therefor shall not affect such Wet Loans’ Collateral Value)
or (iii) that is not Eligible Collateral because it does not satisfy in all
material respects one or more of the conditions to eligibility stated for it in
this Agreement, shall have zero Collateral Value, and Collateral that at one
time satisfied all conditions for eligibility but for which a Disqualifier has
occurred shall have zero Collateral Value from the date of that Disqualifier
unless and until the Company has cured all applicable Disqualifiers or the Agent
has waived them in writing; provided that the reduction for any reason of the
Collateral Value of any Collateral that is Pledged to the Agent shall not itself
affect or impair the Agent’s security interest in that Collateral. Collateral
Values of the types of Eligible Collateral, duly Pledged to the Agent with the
Agent having Lien priority and perfection as aforesaid and as to which no such
uncured or unwaived Disqualifier has occurred, shall be determined as follows:

(a)  The “HELOC Collateral Value” on any day of any HELOC Collateral, whether a
Dry Loan or a Wet Loan, shall be its “Book HELOC Collateral Value”, which is the
least of:
 

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(i)    ninety-five percent (95%) of the lesser of such Pledged Loan’s (x)
original principal amount or (y) Principal Balance on that day;

(ii)    ninety-five percent (95%) of the purchase price that the Approved
Investor has committed to pay for such Pledged Loan pursuant to the Purchase
Commitment covering such Pledged Loan;

(iii)    for a Pledged Loan originated by the Company or any Affiliate,
ninety-five percent (95%) of the loan amount at origination less discount points
received by the Company or such Affiliate, as stated on the Pledged Loan’s HUD-1
Settlement Statement; and

(iv)    for a Pledged Loan directly or indirectly acquired by the Company from a
mortgage broker or a correspondent that is not an Affiliate of the Company,
ninety-five percent (95%) of the net purchase price paid therefor by the Company
(i.e., net of all origination fees, discounts, refunds and rebates, however and
whenever credited or payable to the Company and without regard, however, to any
servicing release premium paid by the Company);

provided that if the Agent shall elect (in its sole and absolute discretion) to
mark it to market, or if the Required Lenders direct the Agent to mark it to
market, such Pledged Loan’s Collateral Value for that day shall be the lesser of
(x) its Book HELOC Collateral Value or (y) ninety-five percent (95%) of its
Market Value on that day.

(b)  The “Prime Loan Collateral Value”on any day of any pledged Prime Loan,
whether a Dry Loan or a Wet Loan, shall be its “Book Prime Loan Collateral
Value”, which is the least of:
 
(i)    ninety-eight percent (98%) of the lesser of such Pledged Loan’s (x)
original principal amount or (y) Principal Balance on that day;

(ii)    ninety-eight percent (98%) of the purchase price that the Approved
Investor has committed to pay for such Pledged Loan pursuant to the Purchase
Commitment covering such Pledged Loan;

(iii)    for a Pledged Loan originated by the Company or any Affiliate,
ninety-eight percent (98%) of the loan amount at origination less discount
points received by the Company or such Affiliate, as stated on the Pledged
Loan’s HUD-1 Settlement Statement; and

(iv)    for a Pledged Loan directly or indirectly acquired by the Company from a
mortgage broker or a correspondent that is not an Affiliate of the Company,
ninety-eight percent (98%) of the net purchase price paid therefor by the
Company (i.e., net of all origination fees, discounts, refunds and rebates,
however and whenever credited or payable to the Company and without regard,
however, to any servicing release premium paid by the Company);

provided that if the Agent shall elect (in its sole and absolute discretion) to
mark it to market, or if the Required Lenders direct the Agent to mark it to
market, such Pledged Loan’s Collateral Value for that day shall be the lesser of
(x) its Book Prime Loan Collateral Value or (y) ninety-eight percent (98%) of
its Market Value on that day.

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(c)  The “Repurchased Loan Collateral Value” on any day for a pledged
Repurchased Loan shall be its “Book Repurchased Loan Collateral Value”, which is
the least of:
 
(i)    seventy-five percent (75%) of the lesser of such pledged Repurchased
Loan’s (x) original principal amount or (y) Principal Balance, on that day;

(ii)    seventy-five percent (75%) of the net purchase price paid therefor by
the Company; and

(iii)    sixty percent (60%) of the value of the Single-family residential real
property securing such pledged Repurchased Loan as determined by a Current
Appraisal or a Current Broker’s Price Opinion (or, for Second Lien Loans or
HELOCs only, by the AVM), net of any senior Lien;

provided that if the Agent shall elect (in its sole and absolute discretion) to
mark it to market, or if the Required Lenders direct the Agent to mark it to
market, such Pledged Loan’s Collateral Value for that day shall be the lesser of
(x) its Book Repurchased Loan Collateral Value or (y) seventy-five percent (75%)
of its Market Value on that day.

(d)  The “Second Lien Loan Collateral Value” on any day of any pledged Second
Lien Loan (whether or not a Wet Loan and/or a HELOC) shall be its “Book Second
Lien Loan Collateral Value”, which is the least of:
 
(i)    ninety-five percent (95%) of the lesser of such pledged Second Lien
Loan’s (x) original principal amount or (y) Principal Balance on that day;

(ii)    ninety-five percent (95%) of the purchase price that the Approved
Investor has committed to pay for such pledged Second Lien Loan pursuant to the
Purchase Commitment covering such Pledged Loan;

(iii)    for a pledged Second Lien Loan originated by the Company or an
Affiliate of the Company, ninety-five percent (95%) of the loan amount at
origination less discount points received by the Company or such Affiliate, as
stated on the Pledged Loan’s HUD-1 Settlement Statement; or

(iv)    for a pledged Second Lien Loan directly or indirectly acquired by the
Company from a mortgage broker or a correspondent that is not an Affiliate of
the Company, ninety-five percent (95%) of the net purchase price paid therefor
by the Company (i.e., net of all origination fees, discounts, refunds and
rebates, however and whenever credited or payable to the Company and without
regard, however, to any servicing release premium paid by the Company);

provided that if the Agent shall elect (in its sole and absolute discretion) to
mark it to market, or if the Required Lenders direct the Agent to mark it to
market, such Pledged Loan’s Second Lien Loan Collateral Value for that day shall
be the lesser of (i) its Book Second Lien Loan Collateral Value or (ii)
ninety-five percent (95%) of its Market Value on that day.

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(e)  The “Subprime Loan Collateral Value” on any day of any pledged Subprime
Loan (whether or not a Wet Loan) shall be its “Book Subprime Loan Collateral
Value”, which is the least of:
 
(i)    ninety-five percent (95%) of the lesser of such pledged Subprime Loan’s
(x) original principal amount or (y) Principal Balance on that day;

(ii)    for a pledged Subprime Loan originated by a Company or an Affiliate of a
Company, ninety-five percent (95%) of the loan amount at origination less
discount points received by the Company or such Affiliate, as stated on the
Pledged Loan’s HUD-1 Settlement Statement; or

(iii)    for a pledged Subprime Loan directly or indirectly acquired by a
Company from a mortgage broker or a correspondent that is not an Affiliate of
the Company, ninety-five percent (95%) of the net purchase price paid therefor
by the Company (i.e., net of all origination fees, discounts, refunds and
rebates, however and whenever credited or payable to the Company and without
regard, however, to any servicing release premium paid by the Company); or

(iv)    for pledged Subprime Loans that are subject to a Purchase Commitment,
ninety-five percent (95%) of the purchase price that the Approved Subprime
Investor issuing it will pay for such pledged Subprime Loan as provided for in
the Purchase Commitment covering it;

provided that if the Agent shall elect (in its sole and absolute discretion) to
mark it to market, or if the Required Lenders direct the Agent to mark it to
market, such Pledged Loan’s Subprime Loan Collateral Value for that day shall be
the lesser of (i) its Book Subprime Loan Collateral Value or (ii) ninety-five
percent (95%) of its Market Value on that day.

(f)  The Collateral Value of any other type of Collateral shall be as is
reasonably determined by the Agent.
 
The applicable percentage factor (stated above) for determining the value of any
particular item of Collateral is the “Advance Rate” for that Collateral. Each of
such values shall be as determined by the Agent — which may accept as correct
any value proposed by the Company that is not obviously and materially incorrect
on its face — and each determination by the Agent of Collateral Value (and of
each element of each such determination, including Market Value) may be computed
using any reasonable averaging, interpolation and attribution method and, absent
manifest error, shall be conclusive and binding.

“Commitment” means, for each Lender, its commitment under Section 2.1 to fund
its Funding Share of Advances under the Credit Line, limited to such Lender’s
Committed Sum. Such term also includes JPMorgan’s Commitment, if any, under
Section 2.5 to fund the Swing Line, limited to the Swing Line Limit, upon and
subject to the terms of this Agreement.

“Commitments Cancellation Date” is defined in the definition of “Termination
Date”.

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“Committed Sum” means, for any day, the maximum amount a Lender is committed on
that day to lend to the Company (or for its account) on a revolving credit basis
pursuant to this Agreement, on its terms and subject to its conditions. From the
Effective Date of this Agreement through the Termination Date or such other date
(if any) when all or any of them is changed by operation of the provisions of
any agreement or Legal Requirement, the Committed Sums for the Lenders are as
set forth on Schedule LC, as it may be amended and restated from time to time.

“Company” is defined in this Agreement’s preamble.

“Company Customer” means any natural person who has applied in writing to the
Company for a financial product or service, has obtained any financial product
or service from the Company or has a Mortgage Loan that is serviced or
subserviced by the Company.

“Company Customer Information” means any information or records in any form
(written, electronic or otherwise) containing a Company Customer’s personal
information or identity, including the Company Customer’s name, address,
telephone number, loan number, loan payment history, delinquency status,
insurance carrier or payment information, tax amount or payment information and
the fact that the Company Customer has a relationship with the Company.

“Credit Line” means the revolving line of credit established by this Agreement
and governed by it and the other Facilities Papers.

“Cumulative Loan-to-Value Ratio” means, as to any Single-family Loan, the ratio
of:

(x) the sum of (i) the original principal amount of the Mortgage Note that is
Pledged to the Agent and (ii) the original principal sums of all other Mortgage
Notes (if any) secured by a mortgage Lien on the same Mortgaged Premises as are
the security for such pledged Mortgage Note;

to         (y) the fair market value of such Mortgaged Premises, as such value
is shown in the most recent Appraisal or the most recent Current Broker’s Price
Opinion, whichever is less (or, for Second Lien Loans or HELOCs only, the value
as determined by the AVM)

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement for the purpose of hedging the currency risk associated
with the Company’s and its Subsidiaries’ operations and not for speculative
purposes.

“Current Appraisal” means an Appraisal dated no earlier than one hundred eighty
(180) days (or such longer period, if any, as the Agent shall approve) before
the relevant Determination Date.

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“Current Broker’s Price Opinion” means a Broker’s Price Opinion dated no earlier
than one hundred twenty (120) days (or such longer period, if any, as the Agent
shall approve) before the relevant Determination Date.

“Current Credit Agreement” is defined in this Agreement’s preamble.

“Custodian” means JPMorgan, as Custodian under the Custody Agreement, or any
successor custodian under the Custody Agreement.

“Custodian’s Fees” are the fees to be paid by the Company to the Custodian for
its services under the Custody Agreement, as provided for in the Custody
Agreement or by a separate agreement. Such fees are separate from and in
addition to other fees to be paid to the Agent or the Lenders provided for in
this Agreement.

“Custody Agreement” means the 1/05 Custody Agreement dated as of January 4, 2005
between the Company and JPMorgan, as Custodian, as it may hereafter be
supplemented, amended or restated from time to time.

“Customer” means and includes each maker of a Mortgage Note and each cosigner,
guarantor, endorser, surety and assumptor thereof, and each mortgagor or grantor
under a Mortgage, whether or not such Person has personal liability for its
payment of the Mortgage Loan evidenced or secured thereby, in whole or in part.

“Debt” means, with respect to any Person, on any day, the sum of the following
(without duplication):

(a)    all of that Person’s debt or other obligations which, in accordance with
GAAP, should be included in determining total liabilities as shown on the
liabilities side of that Person’s balance sheet for that day;

(b)    all of that Person’s debt or other obligations for borrowed money or for
the deferred purchase price of property or services, except that non-recourse
MBS Debt arising out of transactions structured to qualify for GAAP sale
treatment shall be excluded;

(c)    all of any other Person’s debt or other obligations for borrowed money or
for the deferred purchase price of property or services in respect of which such
Person is liable — contingently or otherwise — to pay or advance money or
property as guarantor, surety, endorser or otherwise (excluding such Person’s
contingent liability as endorser of negotiable instruments for collection in the
ordinary course of business), or which such Person has agreed to purchase or
otherwise acquire; and

(d)    all debt for borrowed money or for the deferred purchase price of
property or services secured by a Lien on any property owned or being purchased
by that Person (even though that Person has not assumed or otherwise become
liable for the payment of such debt) to the extent that such debt would not be
otherwise counted as a liability for purposes of determining that Person’s net
worth and to the extent that such debt is less than or equal to the net book
value of such property;

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(e)    obligations of that Person in respect of any exchange traded or over the
counter derivative transaction, including any Hedge Agreement whether entered
into for hedging or speculative purposes;

provided that, for purposes of this Agreement, there shall be excluded from the
calculation of Debt for that day both (i) such Person’s obligations to pay to
another Person any sums collected and held by the subject Person (as loan
servicer, escrow agent or collection agent or in a similar capacity) for the
account of such other Person, and (ii) the portion of Qualified Subordinated
Debt that is not due within one (1) year of that day.

“Default” means the occurrence of any event or existence of any condition that,
but for the giving of notice, the lapse of time or both, would constitute an
Event of Default.

“Determination Date” means the date as of, or for, which a specified
characteristic of a Mortgage Loan or other subject matter is being determined
for purposes of a provision of this Agreement or another Facilities Paper.

“Disqualifier” means any of the circumstances or events affecting Collateral
that are described on Schedule DQ.

“Dry Loan” means a Pledged Loan acquired and owned by the Company that has been
closed, funded and qualifies without exception as Eligible Single-family
Collateral, including satisfying the requirement that all of its Basic Papers
have been delivered to the Custodian.

“Effective Date” is defined in this Agreement’s preamble.

“Electronic Agent” means MERSCORP, Inc. or its successor in interest or assigns.

“Electronic Tracking Agreement” means a written Electronic Tracking Agreement
among the Company, the Agent, MERS and the Electronic Agent, in form and
substance acceptable to the Company and the Agent, as it may be supplemented,
amended, restated or replaced from time to time.

“Electronically Submitted” means that a Request for Borrowing or a payment is
submitted in such an electronic form and format that the Agent is not required
to enter any of its data manually.

“Eligible Assignee” is defined in Section 13.15(b).

“Eligible Collateral” is defined on Schedule EC.

“Eligible Single-family Collateral” is defined on Schedule EC.

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“Equity Interests” means shares of common stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

“ERISA” means the Employee Retirement Income Security Act of 1974 and any
successor statute, as amended from time to time, and all rules and regulations
promulgated under it.

“Event of Default” means the occurrence of any of the conditions or events
described or referred to in Section 11.

“Facilities” means the credit facilities provided for in this Agreement, and in
its singular form, “Facility”, means either (i) the entire (initially) One
Hundred Fifty Million Dollar ($150,000,000) senior secured revolving line of
credit provided for herein including (from and after the time that another
Lender joins in this Agreement as a Lender) the Swing Line or (ii) such line of
credit or the Swing Line, whichever the context requires.

“Facilities Papers” means and includes this Agreement, the Senior Credit Notes
(including the Swing Line Note, if any), the Custody Agreement and all security
agreements, financing statements and other papers now or hereafter executed
evidencing, securing or otherwise relating to the Facilities, and any renewal,
extension, rearrangement, increase, supplement, modification or restatement of
any of them.

“Facility Fee” is defined in Section 5.7.

“Fannie Mae” means the Federal National Mortgage Association and any successor.

“FHA” means the Federal Housing Administration and any successor.

“FICA” means the Federal Insurance Contributions Act.

“FICO” means Fair Isaac Corporation and, where used in this Agreement, refers to
the credit scoring system developed by that company or to any other Customer
credit scoring system whose use by the Company has been specifically approved in
writing by the Agent.

“File” means a file in the possession of the Custodian or its designee (other
than the Company or an Affiliate of the Company) containing all of the Basic
Papers for the relevant type of Collateral.

“Financial Statements” is defined in Section 8.4.

“Freddie Mac” means the Federal Home Loan Mortgage Corporation and any
successor.

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“Funding Share” means, for each Lender, that proportion of each Advance that
bears the same ratio to the total amount of the Advance as that Lender’s
Committed Sum bears to the Aggregate Committed Sum.

“GAAP” means, for any day, generally accepted accounting principles, applied on
a consistent basis, stated in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, or
in statements and pronouncements of the Financial Accounting Standards Board or
in such other statements by another entity or entities as may be approved by a
significant segment of the accounting profession, that are applicable to the
circumstances for that day. The requirement that such principles be applied on a
consistent basis means that the accounting principles observed in a current
period shall be comparable in all material respects to those applied in an
earlier period, with the exception of changes in application to which the
Company’s independent certified public accountants have agreed and which changes
and their effects are summarized in the subject company’s financial statements
following such changes. If (a) during the term of this Agreement any change(s)
in such principles occur(s) which materially changes the meaning or effect of
any provision of this Agreement and (b) the Company or the Required Lenders
regard such change(s) as adverse to their respective interests, then upon
written notice by the Company to the Agent, the parties to this Agreement shall
negotiate promptly and in good faith a supplement or amendment to this Agreement
to achieve as nearly as possible preservation and continuity of the business
substance of this Agreement in light of such change; provided that neither the
Agent nor any of the Lenders shall be obligated to commence, continue or
conclude any such negotiation or to execute any such supplement or amendment
after any Default has occurred (other than a Default caused by such change) and
before it has been cured or after any Event of Default has occurred (other than
an Event of Default caused by such change) that the Agent has not declared in
writing to have been cured or waived.

“Ginnie Mae” means the Government National Mortgage Association and any
successor.

“Governmental Authority” means any foreign governmental authority, the United
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, department, commission, board, bureau,
court or other tribunal.

“Hazard Insurance Policy” means, with respect to each Pledged Loan, the policy
of fire and extended coverage insurance required by Section 9.17(c)(1) to be
maintained for the related Mortgaged Premises’ improvements (and, if the related
Mortgaged Premises are located in a federally-designated special flood area,
federal flood insurance issued in accordance with the Flood Disaster Protection
Act of 1973, as amended from time to time or, if repealed, any superseding
legislation governing similar insurance coverage, or similar coverage against
loss sustained by floods or similar hazards that conforms to the flood insurance
requirements prescribed by Fannie Mae guidelines, which may be provided under a
separate insurance policy), which insurance may be a blanket mortgage impairment
policy maintained by such Pledged Loan’s Servicer in accordance with the terms
and conditions of Section 9.17(c)(2).

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“Hedge Agreement” means an Interest Rate Protection Agreement or a Currency
Agreement entered into in the ordinary course of the Company’s or any of its
Subsidiaries’ businesses to protect the Company against changes in value of
assets.

“HELOC” means a Single-family Loan that is an open end revolving home equity
line of credit.

“HELOC Collateral Value” is defined in the definition of “Collateral Value”.

“HLTV Loan” means a Single-family Loan whose Cumulative Loan-to-value Ratio
exceeds one hundred percent (100%), but does not exceed one hundred twenty-five
percent (125%), and that is not eligible for purchase by Ginnie Mae, Fannie Mae
or Freddie Mac under one of its Prime Loan purchase programs.

“HUD” means the U.S. Department of Housing and Urban Development and any
successor.

“In Default” means that, as to any Mortgage Loan, any Mortgage Note payment or
escrow payment is unpaid for thirty (30) days or more after its due date
(whether or not the Company has allowed any grace period or extended the due
date thereof by any means) or another material default has occurred and is
continuing, including the commencement of foreclosure proceedings or the
commencement of a case in bankruptcy for any Customer under such Mortgage Loan.

“Indemnified Liabilities” is defined in Section 12(e).

“Indemnified Parties” is defined in Section 12(e).

“Interest Rate Protection Agreement” means, with respect to either (i) any or
all of the Pledged Loans or (ii) the Obligations, any short sale of any U.S.
Treasury securities, futures contract, mortgage related security, Eurodollar
futures contract, options related contract, interest rate swap, cap or collar
agreement or similar arrangement providing for protection against fluctuations
in interest rates or the exchange of nominal interest obligations, either
generally or under specific contingencies, that is entered into by the Company
and a financial institution and is reasonably acceptable to the Agent.

“Internal Revenue Code” means the Internal Revenue Code of 1986 or any
subsequent federal income tax law or laws, as amended from time to time.

“JPMorgan” is defined in this Agreement’s preamble.

“Jumbo Loan” means a Single-family Loan (whether a Prime Loan or an Alt-A Loan)
secured by a first Lien Mortgage whose original principal amount is more than
the maximum principal amount eligible for purchase by Fannie Mae or Freddie Mac
under their first Lien Single-family Mortgage Loan purchase programs but not
more than Six Hundred Fifty Thousand Dollars ($650,000) or, in the case of a
Super Jumbo Loan (a Super Jumbo Loan is also a Jumbo Loan), Two Million Dollars
($2,000,000).

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“Late Pledged (Seasoned) Loan” means a Pledged Loan whose Mortgage Note is dated
earlier than sixty (60) days (but not more than one hundred twenty (120) days)
before its Original Pledge Date.

“Law” means any law, statute, code, ordinance, order, rule, regulation,
judgment, decree, injunction, franchise, permit, certificate, license,
authorization or other determination, direction or requirement (including any of
the foregoing which relate to environmental standards or controls, energy
regulations and occupational safety and health standards or controls) of any
(domestic or foreign) arbitrator, court or other Governmental Authority.

“Legal Requirement” means any law, statute, ordinance, decree, ruling,
requirement, order, judgment, rule or regulation (or interpretation of any of
them) of any Governmental Authority, and the terms of any license, permit,
consent or approval issued by any Governmental Authority.

“Lender” means each of JPMorgan and such other Persons, if any, as from time to
time with the consent of the other parties to this Agreement shall be a party to
this Agreement as a lender. Persons who are currently Lenders on any day shall
be listed as Lenders in Schedule LC in effect for that day.

“Lender Affiliate” means (a) with respect to any Lender, (i) an Affiliate of
such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

“Lien” means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).

“Line” means a line of credit under this Agreement: the Credit Line or the Swing
Line.

“Line Limit” means the maximum principal amount that the Company may borrow and
have outstanding under the relevant Line.

“Liquidity” means the Company’s unencumbered and unrestricted cash and Cash
Equivalents plus (x) the lesser of the book value or the par value of Eligible
Collateral that has either not been pledged to the Agent or any other Person or
otherwise encumbered and (y) the sum of the unused borrowing availability under
this Agreement or any of the Company’s other committed credit agreements to the
extent (if any) that the collateral value of Eligible Collateral that has been
pledged to secure the Company’s debt to the lenders under such credit agreements
exceeds the outstanding borrowings thereunder.

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“Loan” means the loan under this Agreement — the sum of all Advances under the
Credit Line and under the Swing Line outstanding from time to time — all of
which shall be treated and considered as one loan.

“Loan Papers” means the Mortgage Note and all of the other papers related to the
establishment of a Pledged Loan and the creation, perfection and maintenance of
its lien and lien priority for a particular item of Collateral, including its
Basic Papers and its Supplemental Papers and including any papers securing,
guaranteeing or otherwise related to or delivered in connection with any Pledged
Loan, in a form acceptable to the Agent (including any guaranties, lien priority
agreements, security agreements, mortgages, deeds of trust, collateral
assignments of the Company’s interest in underlying obligations or security,
subordination agreements, negative pledge agreements, loan agreements and title,
mortgage, pool and casualty insurance policies), as any such Loan Paper may be
supplemented, amended, restated or replaced from time to time.

“Long Warehoused (Aged) Loan” or “Aged Loan” means a Mortgage Loan whose
Original Pledge Date was more than sixty (60) days, but not more than ninety
(90) days, before the relevant Determination Date (being the date on or for
which such Mortgage Loan’s Collateral Value is being determined). A Pledged Loan
whose Original Pledge Date was more than ninety (90) days before the relevant
Determination Date shall have zero Collateral Value.

“Margin Stock” has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.

“Market Value” means:

(i)    what the Agent reasonably determines the market value of any Pledged Loan
to be, taking into account customary factors, including current market
conditions and the fact that such Pledged Loan may be sold or otherwise disposed
of under circumstances where the Company is in default under this Agreement; or

(ii)    what the Agent reasonably determines the market value of any other
property that is Pledged to the Agent to be.

The Agent’s determination of Market Value hereunder shall be conclusive and
binding upon the parties, absent manifest error.

“Maturity Date” means January 3, 2006, or the earlier date (the “Acceleration
Date”), if any, to which maturity of the Senior Credit Notes is accelerated
pursuant to this Agreement, by order of any Governmental Authority or by
operation of law.

“Maximum Aggregate Commitment” means the maximum amount of principal that the
Company may have borrowed and outstanding under this Agreement on any day, being
the amount set forth in Schedule MAC in effect for that day. The Maximum
Aggregate Commitment on the Effective Date is One Hundred Fifty Million Dollars
($150,000,000), the amount shown on Schedule MAC attached to this Agreement. If
and when some or all of the Lenders then party to this Agreement agree in
writing to increase their Committed Sums — or if a new Lender or Lenders joins
the syndicate of Lenders, or if there is both such an increase or a new Lender’s
joinder — so that the Aggregate Committed Sum exceeds the Maximum Aggregate
Commitment then in effect, the Agent shall execute an updated Schedule MAC
reflecting the new Maximum Aggregate Commitment (as an amount equal to the new
Aggregate Committed Sum) and deliver it to the Company and the Lenders, and that
updated Schedule MAC shall thereupon be substituted for and supersede the prior
Schedule MAC.

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“MBS” means a mortgage pass-through security, collateralized mortgage
obligation, REMIC or other security that (1) is based on and backed by an
underlying pool of Mortgage Loans and (2) provides for payment by its issuer to
its holder of specified principal installments and/or a fixed or floating rate
of interest on the unpaid balance and for all prepayments to be passed through
to the holder, whether issued in certificated or book-entry form and whether or
not issued, guaranteed, insured or bonded by Ginnie Mae, Fannie Mae, Freddie
Mac, an insurance company, a private issuer or any other investor.

“MERS” means Mortgage Electronic Registration Systems, Inc. or its successors or
assigns.

“MERS Designated Loan” means a Pledged Loan registered to the Company on the
MERS® System.

“MERS Procedures Manual” means the MERS Procedures Manual, as it may be amended
from time to time.

“MERS® System” means the Electronic Agent’s mortgage electronic registry system,
as more particularly described in the MERS Procedures Manual.

“Mortgage” means a mortgage, deed of trust, deed to secure debt, security deed
or other mortgage instrument or similar evidence of lien legally effective in
the U.S. jurisdiction where the real property is located to create and
constitute a valid and enforceable Lien, subject only to Permitted Encumbrances,
on the fee simple or long term ground leasehold estate in improved real
property.

“Mortgage Assignment” means an assignment of a Mortgage, in form sufficient
under the Laws of the U.S. jurisdiction where the real property covered by the
Mortgage is located to give record notice of the assignment of the Mortgage,
perfect the assignment and establish its priority relative to other transactions
in respect of the Mortgage assigned (no Mortgage Assignment is required for any
Mortgage that has been originated in the name of MERS and registered under the
MERS® System.)

“Mortgage Loan” means any loan evidenced by a Mortgage Note.

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“Mortgage Note” means a promissory note secured by a Mortgage.

“Mortgaged Premises” means the Property securing a Pledged Loan.

“Multiemployer Plan” means any “multiemployer plan”, as defined in Section
4001(a)(3) of ERISA, which is maintained for employees of the Company or any of
the Company’s Subsidiary.

“Nonfunding Lender” is defined in the definition of “Pro Rata”.

“Non-owner Occupied Loan” means a Single-family Loan whose Mortgaged Premises
are not occupied by one of the relevant Customers as either his or her primary
residence or second home.

“Nonrecourse Debt” means debt under Nonrecourse Facilities.

“Nonrecourse Facility” means and includes both (a) a credit or repurchase
facility payable solely from the assets sold or pledged to secure such facility
and (b) an MBS payable solely from the assets evidenced by or pledged to secure
such MBS, under which facility or MBS no purchaser or creditor has recourse to
the Company or any of its Operating Subsidiaries if such assets are inadequate
or unavailable to pay off such credit or repurchase facility, and neither the
Company nor any of its Operating Subsidiaries effectively has any obligation to
directly or indirectly pay any such deficiency.

“Note Payment Account” means the Company’s non-interest bearing demand deposit
account no. 00113398961 to be maintained with JPMorgan and to be used for (a)
the Agent’s deposits of proceeds of Advances made by the Lenders to the Company,
including any Swing Line Advances funded by JPMorgan, and payments constituting
the proceeds of principal from any Collateral (other than regular principal and
interest payments on the Collateral); (b) the Agent’s deposits of principal and
interest payments for the repayment of Advances received from the Company or for
the Company’s account and (c) only if and when (i) no Default has occurred
unless it has been either cured by the Company or waived in writing by the Agent
and (ii) no Event of Default has occurred unless the Agent has declared in
writing that it has been cured or waived, the Agent’s transfer to the Company’s
designated operating account (or to a controlled disbursement account maintained
by the Company with the Agent) of (x) proceeds of Advances for the purposes
permitted under this Agreement and (y) proceeds of sales or other dispositions
of released Collateral in excess of the Advance(s) borrowed and then outstanding
against such released Collateral. The Note Payment Account is (and shall
continuously be) part of the Collateral for the Obligations. The Note Payment
Account shall be subject to setoff by the Agent for Pro Rata distribution to the
Lenders. The Note Payment Account shall be a blocked account from which the
Company shall have no right to directly withdraw funds, but instead such funds
may be withdrawn or paid out only against the order of an authorized officer of
the Agent, 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 Agent shall use diligent and reasonable efforts to cause proceeds of
Advances and excess Collateral proceeds that are received as therein described
and that are deposited to the Note Payment Account before 3:00 PM on a Business
Day to be transferred to an account on which the Company does have withdrawal
order authority on that same Business Day or on the Business Day thereafter when
the Agent next determines the Lenders’ proportionate shares of an Advance or a
distribution of Loan principal paid.

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“Notices” is defined in Section 14.

“Obligations” means all of the Company’s present and future debt, obligations
and liabilities under or related to this Agreement, any Senior Credit Note or
any of the other Facilities Papers, whether for principal, interest, premium,
fees, costs, attorneys’ fees or other obligation or liability, and whether
absolute or contingent, and all renewals, extensions, modifications and
increases of any of them.

“Officer’s Certificate” means a certificate executed on behalf of the Company or
another relevant Person by its (or if it is a partnership, its general
partner’s) Board of Director’s Chairman, President, Chief Financial Officer,
Treasurer, any of its Executive Vice Presidents or Senior Vice Presidents, its
Corporate Secretary, its Controller or such other officer as shall be acceptable
to the Agent.

“Operating Subsidiaries” means all Subsidiaries of the Company other than
Single-purpose Finance Subsidiaries.

“Original Pledge Date” means the date when a specified item or items of
Collateral were first Pledged to the Agent under this Agreement.

“Overdraft Advance” is defined in Section 5.9.

“Permitted Encumbrances” means in respect of the Mortgaged Premises securing a
Pledged Loan, (i) tax Liens for real property taxes and government-improvement
assessments that are not delinquent; (ii) easements and restrictions that do not
materially and adversely affect the title to or marketability of the Mortgaged
Premises or prohibit or interfere with the use of the Mortgaged Premises as a
one-to-four family residential dwelling; (iii) reservations as to oil, gas or
mineral rights, provided such rights do not include the right to remove
buildings or other material improvements on or near the surface of the Mortgaged
Premises or to mine or drill on the surface thereof or otherwise enter the
surface for purposes of mining, drilling or exploring for, or producing,
transporting or otherwise handling oil, gas or other minerals of any kind; (iv)
agreements for the installation, maintenance or repair of public utilities,
provided such agreements do not create or evidence Liens on the Mortgaged
Premises or authorize or permit any Person to file or acquire claims of Liens
against the Mortgaged Premises and (v) such other exceptions (if any) as are
acceptable under relevant Agency guidelines.

“Person” means and includes natural persons, corporations, limited liability
companies, limited partnerships, registered limited liability partnerships,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations — whether or not legal entities — and governments and agencies and
political subdivisions of them.

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“Plan” means an employee pension benefit plan of a type described in Section
3(2) of ERISA and which is subject to Title IV of ERISA in respect of which the
Company is an “employer” as defined in Section 3(5) of ERISA.

“Pledged Loans” means all Mortgage Loans including all principal thereof and
interest thereon from time to time outstanding or paid and all Loan Papers
evidencing, securing or otherwise relating to such Mortgage Loans, whether now
owned or hereafter acquired, whether or not they initially qualify or continue
to qualify as Eligible Collateral:

(i)    that from time to time are Pledged to the Agent or repledged to,
deposited with, delivered to, caused to be delivered (or sent) by the Company
to, or held by or for, the Agent or the Custodian pursuant to this Agreement or
the Custody Agreement (including all Mortgage Loans delivered or caused to be
delivered by the Company to the Agent or identified to the Agent as Collateral
by any means or method and all Pledged Loans held for the Agent by any
securities intermediaries or bailees, and also including all Wet Loans against
which any part of any Advance is funded, both before and after the Basic Papers
evidencing such Wet Loan come into possession of the Custodian or any other
bailee for the Agent or securities intermediary);

(ii)    in respect of which an Advance or another financial accommodation has
been or may be made (1) at the Company’s request (whether written or oral) made
or to be made either before, concurrently with or after the delivery or
designation of such property as Collateral, or (2) to preserve Collateral or the
priority of the Agent’s Lien against Collateral or to otherwise protect the
interests of the Lenders in accordance with this Agreement or the other
Facilities Papers, including Collateral delivered to the Agent or otherwise
identified to the Agent as Collateral when any Advance is outstanding whether or
not the Company has submitted a Request for Borrowing with a Submission List on
which such new Collateral is listed; and

(iii)    that have not been specifically redeemed by the Company (or its
designee) in accordance with Section 6.11 or sold to and fully paid for by an
investor in accordance with Section 6.8;

(although it is not the exclusive method or basis for determining that an
Advance has been made against a Pledged Loan, the Agent’s inclusion of the
Collateral Value of any Pledged Loan in the Borrowing Base at any time when any
Advance is outstanding shall be conclusive evidence (absent manifest error) that
such Pledged Loan is Collateral.)

“Pledged Loans Curtailment Report” means a written report from the Company to
the Agent listing Pledged Loans on which an unscheduled principal payment,
prepayment or reduction of more than an amount equal to one regularly scheduled
principal and interest installment payment was made in the preceding month, and
their resulting new Principal Balances.

“Pledged to the Agent” means

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(a)    for Single-family Collateral, that the subject Single-family Mortgage
Loan has been duly pledged by the Company to the Agent by:

(i)    for Wet Loans, being listed in a Collateral Confirmation Agreement
submitted to the Custodian and, on or before five (5) Business Days after it is
pledged, being listed in a subsequent Collateral Confirmation Agreement with
which its Basic Papers are delivered to the Custodian;

(ii)    for Single-family Mortgage Loans not originally pledged as Wet Loans,
being listed in a Collateral Confirmation Agreement with which its Basic Papers
are delivered to the Custodian; and

(iii)    such Single-family Mortgage Loan has not been released from the Agent’s
Lien;

(b)    for any investment securities or deposit account, that they have been
made subject to a control agreement executed by the relevant securities
intermediary or depository and the Agent that gives control of such investment
securities or deposit account to the Agent (as agent and representative of the
Lenders); and

(c)    for any other type of property, that the Company has granted to the Agent
a Lien therein and have taken all steps required under applicable Law to perfect
such Lien as a first and prior Lien and security interest in all of the
Company’s present and future right, title and interest therein.

“Prime Loan” means a Single-family Loan that is eligible for purchase by Ginnie
Mae, Fannie Mae or Freddie Mac under their prime mortgage loan programs, or (if
it is a Jumbo Loan) eligible for purchase by another Approved Investor.

“Prime Loan Collateral Value” is defined in the definition of “Collateral
Value”.

“Principal Balance” means, for any day, the advanced and unpaid principal
balance of a Pledged Loan on that day. If a Pledged Loan is listed in the most
current Pledged Loans Curtailment Report, then for purposes of this Agreement,
the Principal Balance for that Pledged Loan (absent manifest error) shall be its
principal balance as shown in that Pledged Loans Curtailment Report.

“Privacy Requirements” means (a) Title V of the Gramm-Leach-Bliley Act, 15
U.S.C. 6801 et seq., (b) federal regulations implementing such act codified at
12 CFR Parts 40, 216, 332 and 573, (c) the Interagency Guidelines Establishing
Standards For Safeguarding Customer Information and codified at 12 CFR Parts 30,
208, 211, 225, 263, 308, 364, 568 and 570 and (d) any other applicable federal,
state and local laws, rules, regulations and orders relating to the privacy and
security of Company Customer Information, as such statutes, regulations,
guidelines, laws, rules and orders may be amended from time to time.

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“Pro Rata” means in accordance with the Lenders’ respective ownership interests
in the Loan. On any day, the Lenders will each own that portion of the Loan,
both principal and accrued interest, and a corresponding undivided interest in
all Collateral and all rights to Collateral proceeds equal to that Lender’s
ownership interest in the Loan, that bears the same ratio to the entire advanced
and unpaid principal of the Loan then outstanding as (x) that Lender’s Committed
Sum bears to the Aggregate Committed Sum if on that day the Lenders are
committed to lend under this Agreement or (y) that Lender’s aggregate
outstanding Advances bears to the aggregate principal amount of the Loan
outstanding if on or before that day the Lenders’ Commitments have expired or
have been terminated and have not been reinstated, subject to this adjustment:
if at any time or times when the Lenders’ Commitments are outstanding, any
Lender fails to fund any of its Funding Share(s) of any Advance (a “Nonfunding
Lender”) and one or more of the other Lenders funds it (electively in accordance
with the provisions of Section 2.1), then:

(a)    the respective ownership interests of both (i) the Nonfunding Lender and
(ii) the Lender (or Lenders) that funded such Funding Share(s), shall be
proportionately decreased and increased, respectively, to the same extent as if
their respective Committed Sums were changed in direct proportion to the
unreimbursed balance outstanding from time to time thereafter of the amount so
funded;

(b)    the Nonfunding Lender’s share of all future distributions of any payments
and prepayments on the Senior Credit Notes shall be paid — pro rata among them
in accordance with their respective unrecovered balances of such Nonfunding
Lender’s Funding Share(s) — to the Lender(s) that so funded such Nonfunding
Lender’s Funding Share(s) until all such funding Lender(s) have been fully
repaid the amount so funded; and

(c)    such adjustment shall remain in effect until such time as the Lender(s)
that funded such Funding Share(s) have been so fully repaid.

If no other Lender funds any of the Nonfunding Lender’s Funding Share, then the
Pro Rata ownership interests in the Loan of the Lenders shall be changed, in
that case so that each Lender’s Pro Rata ownership interest in the Loan is equal
to the ratio of that Lender’s aggregate outstanding Advances to the aggregate
outstanding Advances for all Lenders, but the Nonfunding Lender’s share of all
subsequent distributions of any payments and prepayments on the Senior Credit
Notes shall be paid to the other Lenders — pro rata among them in the ratio that
the Pro Rata ownership interest in the Loan owned by each bears to the aggregate
Pro Rata Ownership interests in the Loan of all such other Lenders — and the
Lenders’ respective Pro Rata ownership interests in the Loan shall be readjusted
after each such payment, until their Pro Rata ownership interests are restored
to what they were before any Nonfunding Lender failed to fund. Notwithstanding
any such changes in the Lenders’ Pro Rata ownership interests in the Loan due to
any Lender’s failure to fund its Funding Share(s) of any Advance(s), such
failure to fund shall not diminish any Lender’s Funding Share(s) of subsequent
Advances.

“Property” means any interest of a Person in any kind of property, whether real,
personal or mixed, tangible or intangible, including the Collateral.

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“Purchase Commitment” means a written commitment held by the Company from an
Approved Investor to buy Collateral and that specifies (a) the type or item(s)
of Collateral, (b) a purchase date or purchase deadline date and (c) a purchase
price or the criteria by which the purchase price will be determined.

“Qualified Subordinated Debt” means Debt of the Company to any Person (i) the
papers evidencing, securing, governing or otherwise related to which Debt impose
covenants and conditions on the debtor under them that are no more restrictive
or onerous than the covenants and conditions imposed on the Company by this
Agreement and (ii) that is subordinated to the Obligations pursuant to a
currently effective and irrevocable Subordination Agreement, including
standstill and blockage provisions, approved by the Agent.

“Recourse Servicing” means Servicing Rights under a Servicing Agreement with
respect to which the servicer is obligated to repurchase or indemnify the holder
of the related Mortgage Loans in respect of defaults on such Mortgage Loans at
any time during the term of such Mortgage Loans.

“Redemption Amount” means an amount equal to the then current Collateral Value
of any item of Collateral to be redeemed, but not less than the then outstanding
amount of the Advance made with respect to the Collateral being redeemed, as
determined by the Agent.

“Redemption Call” means a written notice from the Agent to the Company stating
that the Agent has determined that either (i) the weighted average FICO score of
all pledged Alt-A Loans is less than 690 and calling on the Company to redeem
lower FICO score pledged Alt-A Loans to correct such deficiency if and as
required by Section 6.4, (ii) the weighted average FICO score of all pledged
Second Lien Loans and HELOCs is less than 690 and calling on the Company to
redeem lower FICO score pledged Second Lien Loans and HELOCs to correct such
deficiency if and as required by Section 6.4, or (iii) less than ninety-five
percent (95%) of the aggregate Principal Balances of all Pledged Loans —
excluding Alt-A Loans, Second Lien Loans, Repurchased Loans, Subprime Loans,
Jumbo Loans and Super Jumbo Loans — fully conform to all underwriting and other
requirements for purchase by Fannie Mae or Freddie Mac and calling on the
Company to redeem a sufficient number of nonconforming Mortgage Loans to correct
such deficiency if and as required by Section 6.4

“Regulation D” means Regulation D promulgated by the Board of Governors of the
Federal Reserve System, 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 Q” means Regulation Q promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 217, or any other regulation when
promulgated to replace the prior Regulation Q and having substantially the same
function.

“Regulation U” means Regulation U promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 221, or any other regulation when
promulgated to replace the prior Regulation U and having substantially the same
function.

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“Regulation X” means Regulation X promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 224, or any other regulation when
promulgated to replace the prior Regulation X and having substantially the same
function.

“Repurchased Loan” means a Single-family Mortgage Loan owned by the Company and
Pledged to the Agent, none of the makers or mortgagors of which is an Affiliate
of the Company or a corporation, partnership or any other entity that is not a
natural person or a trust for natural persons, and that was originated or
purchased by the Company or an Affiliate of the Company, sold to an investor
(either as a Whole Loan or as part of a pool of securitized Mortgage Loans) and
subsequently repurchased by the Company due to underwriting errors,
delinquencies or breach of representations or warranties made in connection with
such sale.

“Repurchased Loan Collateral Value” is defined in the definition of “Collateral
Value”.

“Request for Borrowing” means a request for a Borrowing in the form of Exhibit B
(or in another form approved by the Agent) appropriate to the type of Borrowing
being requested, duly completed, with all required attachments and signed by the
Company. Each Request for Borrowing shall include this sentence: “The Company
hereby warrants and represents to the Agent and the Lenders that none of the
Collateral (including Collateral described or referred to in this request) is
pledged to any Person other than the Agent or supports any borrowing or
repurchase agreement funding other than Borrowings under the Credit Agreement.”

“Required Lenders” means, for any day, the holders of Senior Credit Notes
evidencing one hundred percent (100%) of (a) the Aggregate Committed Sum if on
that day the Lenders are committed to lend under this Agreement or (b) the
aggregate principal amount of the Loan outstanding if on or before that day the
Lenders’ Commitments have expired or have been terminated and have not been
reinstated; provided that if two (2) or more Lenders in addition to JPMorgan
shall join in this Agreement, “Required Lenders” shall mean the holders of
Senior Credit Notes evidencing sixty-six and two-thirds percent (66-2/3%) or
more of (a) the Aggregate Committed Sum if on that day the Lenders are committed
to lend under this Agreement or (b) the aggregate principal amount of the Loan
outstanding if on or before that day the Lenders’ Commitments have expired or
have been terminated and have not been reinstated.

“Second Lien Loan” means a Prime Loan the Lien against the related Mortgaged
Premises is second and inferior to the Lien of a single senior Mortgage Loan.

“Second Lien Loan Collateral Value” is defined in the definition of “Collateral
Value”.

“Security Instruments” means any and all papers now or hereafter executed and
delivered by the Company or any other Person as security for the Obligations, or
otherwise in connection with them, as those papers may be supplemented, amended,
restated or replaced from time to time.

“Senior Credit Notes” means (a) promissory notes dated the date of this
Agreement, each to be in substantially the form attached as Exhibit A, executed
and delivered by the Company, payable to the order of a Lender and in a face
principal amount equal to that Lender’s Committed Sum, and that shall evidence
the Company’s obligation to repay to the order of that note’s Lender-payee all
Advances funded by that Lender and outstanding from time to time, plus accrued
interest on that principal, and (b) all renewals, modifications, extensions,
increases and rearrangements of such promissory notes and all substitutions or
replacements for them or any of them. The Swing Line Note (if any) is a Senior
Credit Note.

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“Serviced Loans” means all Mortgage Loans serviced or required to be serviced by
the Company under any Servicing Agreement, irrespective of whether the actual
servicing is done by another Person (a subservicer) retained by the Company for
that purpose.

“Servicer” means a Person (which may — or shall — mean the Company if the
context permits — or requires — it) retained by the owner (or a trustee for the
owner) of Mortgage Loans to service them under a Servicing Agreement.

“Servicing Agreement” means, with respect to any Person, the arrangement —
whether or not in writing — pursuant to which that Person acts as servicer of
Mortgage Loans, whether owned by that Person or by others.

“Servicing Rights” means all of the Company’s rights and interests under any
Servicing Agreement, including the rights to (i) service the Serviced Loans that
are the subject matter of such Servicing Agreement and (ii) be compensated,
directly or indirectly, for doing so.

“Single-family” is a preface that means that a Mortgage Loan is secured by a
Mortgage covering real property improved by a one-, two-, three- or four-family
residence.

“Single-family Loan” means a Mortgage Loan that is secured by a Mortgage
covering real property improved by a one-, two-, three- or four-family
residence.

“Single-family Warehouse Advance” is defined in the definition of “Advance”.

“Single-purpose Finance Subsidiary” means a wholly-owned Subsidiary of the
Company whose only authorized business is to issue MBS or hold passive
investments.

“Solvent” means, for any Person, that (a) the fair market value of its assets
exceeds its liabilities, (b) it has sufficient cash flow to enable it to pay its
debts as they mature and (c) it does not have unreasonably small capital to
conduct its businesses.

“Statement Date” means December 31, 2003, the date of the Company’s most recent
audited Financial Statements for a regular financial reporting period before the
Effective Date.

“Statement Date Financial Statements” is defined in Section 8.4.

“Submission List” means a listing and description in the form of the appropriate
attachment to Exhibit B (or another form acceptable to the Agent) of Collateral
that is being Pledged to the Agent — and, for each item of Collateral other than
Wet Loans, the File is being sent to the Custodian — by or on behalf of the
Company, and or before the date of the related Advance, and for each item of
Collateral listed in which the Company has delivered (or is delivering
substantially concurrently with such Submission List) to the Custodian a
Warehouse Transmission File.

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“Subordination Agreement” means a written subordination agreement in form and
substance satisfactory to and approved by the Agent that subordinates (x) all
present and future debts and obligations owing by the Company to the Person
signing the Subordination Agreement to (y) the Obligations under this Agreement
and the other Facilities Papers, in both right of payment and lien priority,
including standstill and blockage provisions approved by the Agent. A form of
Subordination Agreement acceptable for the purposes stated in Section 7.1(b) is
attached as Exhibit C.

“Subprime Loan” means a Single-family Loan that is not a Prime Loan (including
HELOCs) or an Alt-A Loan.

“Subprime Loan Collateral Value” is defined in the definition of “Collateral
Value”.

“Subsidiary” means any corporation, association or other business entity
(including a trust) in which any Person (directly or through one or more other
Subsidiaries or other types of intermediaries), owns or controls:

(a)    more than fifty percent (50%) of the total voting power or shares of
stock entitled to vote in the election of its directors, managers or trustees;
or

(b)    more than ninety percent (90%) of the total assets and more than ninety
percent (90%) of the total equity through the ownership of capital stock (which
may be non-voting) or a similar device or indicia of equity ownership.

“Super Jumbo Loan” means a Jumbo Loan whose original principal amount is more
than Six Hundred Fifty Thousand Dollars ($650,000) but not more than Two Million
Dollars ($2,000,000) or such greater amount as shall be approved by the Agent on
a case-by-case basis.

“Supplemental Papers” means the Loan Papers for a particular item of Collateral
other than its Basic Papers.

“Swing Line” means the short term revolving credit facility provided for in
Section 2.5 under which the Company may borrow (as “Swing Line Advances”) from
JPMorgan to bridge the Company’s daily borrowing requirements under the Credit
Line.

“Swing Line Borrowing Due Date” for each Swing Line Borrowing means the fifth
(5th) Business Day, or such earlier Business Day as JPMorgan in its sole
discretion shall elect, following the Business Day when JPMorgan funds such
Borrowing under the Swing Line; provided that JPMorgan agrees not to exercise
such discretion to choose a due date in a manner that would materially affect
the Company’s ability to borrow under this Agreement unless a Default has
occurred that has not been cured by the Company or declared in writing by the
Agent to have been waived or any Event of Default has occurred that the Agent
has not declared in writing to have been cured or waived.

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“Swing Line Limit” means, for any day, the lesser of (x) an amount equal to
JPMorgan’s Commitment for that day and (y) the Aggregate Committed Sum minus the
sum of all Advances outstanding on that day, being the maximum principal that
may be borrowed and outstanding on that day under the Swing Line; provided that
until another Lender or Lenders shall join this Agreement, the Swing Line Limit
shall be zero.

“Swing Line Note” is defined in Section 2.6. The Swing Line Note evidences and
shall evidence the Company’s obligation to repay to the order of JPMorgan the
principal of all Borrowings funded under the Swing Line and outstanding from
time to time, plus accrued interest on that principal.

“Taxes” means taxes, levies, deductions, imposts, charges or withholdings,
excluding, in the case of each Lender, taxes imposed on its net income, and
franchise taxes imposed on it, under the Laws of any applicable Governmental
Authority.

“Termination Date” means the earlier of (i) the last Business Day before the
Maturity Date, or (ii) the date (if any) when the Lenders’ Commitment to fund
Advances under this Agreement is terminated pursuant to this Agreement or by
operation of law (the “Commitments Cancellation Date”).

“Total Liabilities” means all liabilities of the Company and its Subsidiaries,
including Nonrecourse Debt as, in accordance with GAAP, are reflected on the
Company’s consolidated balance sheet, and also including all contingent
liabilities and obligations (including Recourse Servicing, recourse sale and
other recourse obligations, and guarantee, indemnity and mortgage loan
repurchase obligations.)

“Townhouse or Condo Loan” means a Mortgage Loan whose related Mortgaged Premises
are a townhouse or a condominium unit and its related undivided interest in
common elements of the condominium regime.

“UCC” means the Uniform Commercial Code or similar Laws of the applicable
jurisdiction, as amended from time to time.

“VA” means the Department of Veterans Affairs and any successor.

“Warehouse Transmission File” means a file containing all information concerning
such item of Collateral required by the “Warehouse Transmission File
Instructions”, as defined and provided for in (and attached as an exhibit to)
the Custody Agreement, one of which shall be delivered by the Company to the
Custodian for each Pledged Loan on its Original Pledge Date, both by electronic,
computer readable transmission in accordance with such Warehouse Transmission
File Instructions and by faxing a hard copy thereof to the Custodian.

“Wet Loan” means a Pledged Loan acquired and owned by the Company:

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(a)    that has been closed by a title agency or closing attorney, funded and
would qualify without exception as Eligible Collateral except that some or all
of its Basic Papers are in transit to, but have not yet been received by, the
Custodian so as to satisfy all requirements to permit the Company to borrow
against it pursuant to this Agreement without restriction;

(b)    that the Company reasonably expects to fully qualify as Eligible
Collateral when the original Basic Papers have been received by the Custodian;

(c)    as to which the Company actually and reasonably expects that such full
qualification can and will be achieved on or before five (5) Business Days after
an Advance against such item of Collateral is requested and made under this
Agreement (and the Company hereby agrees to take such steps as are reasonably
necessary to ensure it achieves full qualification as Eligible Collateral); and

(d)    for which the Company has delivered to the Custodian a Warehouse
Transmission File on or before the date of the related Advance, submission of
which to the Custodian shall constitute the Company’s certification to the
Custodian, the Agent and the Lenders that a complete File as to such item of
Collateral, including the Basic Papers, exists and that such File is in the
possession of either the title agent or closing attorney that closed such
Pledged Loan, the Company or the Company’s Servicer for such Pledged Loan, or
that such File has been shipped to the Custodian.

Each Wet Loan that satisfies the foregoing requirements shall be Eligible
Collateral subject to the condition subsequent of physical delivery of its
Mortgage Note, Mortgage and all other Basic Papers, together with a Collateral
Confirmation Agreement, to the Custodian within five (5) Business Days after
funding of the related Borrowing. Each Wet Loan against which the Company
requests an Advance shall be irrevocably deemed Pledged to the Agent and shall
automatically become pledged Collateral effective on the date of the related
Request for Borrowing, and the Company shall take all steps necessary or
appropriate to cause the pledge to the Agent and delivery to the Custodian of
such Wet Loan and its Basic Papers to be completed, perfected and continued in
all respects, including causing the original promissory note evidencing such
pledged Collateral to be physically delivered to the Custodian within five (5)
Business Days after the funding of the Advance, whether or not the related
Advance is sooner paid, and, if requested by the Agent, to give written notice
to any title agent, closing attorney or other Person in possession of the Basic
Papers for such Collateral of the Agent’s security interest in it and its
security. Upon the Custodian’s receipt of the Basic Papers relative to a Wet
Loan accompanied by a Collateral Confirmation Agreement, such Collateral shall
no longer be subject to this Agreement’s limitations applicable to Wet Loans
(and, as provided in the Custody Agreement, the conversion from Wet Loan status
to Dry Loan status shall be made on the same Business Day if the Basic Papers
and Collateral Confirmation Agreement are received by the Custodian by 11:00 AM,
or on the next Business Day if received after 11:00 AM.)

“Wet Warehousing” means lending to finance Wet Loans.

“Wet Warehousing Advance” is defined in the definition of “Advance”.

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“Wet Warehousing Sublimit” means the maximum amount of principal that may be
borrowed and outstanding on any day on or before the Termination Date to finance
Wet Loans, being:

(a)    sixty percent (60%) of the Aggregate Committed Sum during either (i) the
last three (3) Business Days or (ii) the first four (4) Business Days of any
calendar month; and

(b)    forty percent (40%) of the Aggregate Committed Sum on every other day.

“Whole Loans” means Mortgage Loans that are sold or intended to be sold to
investors as whole loans, instead of being part of a pool from which MBS are to
be created and sold.

1.3.  Definitions for Interest Calculations. For convenience of reference,
definitions used in provisions relating to calculation and payment of interest
are grouped together in this Section. 
 
“Applicable LIBOR/BAR Margin” means, for the respective Classes of Borrowings:

(a)    the Applicable LIBOR/BAR Margin for that portion of the principal of
Borrowings outstanding on any day that is equal to the sum of the Collateral
Values of all Dry Loans that are then Pledged to the Agent that are neither HLTV
Loans, Subprime Loans nor Repurchased Loans is one percent (1.000%); and

(b)    the Applicable LIBOR/BAR Margin for that portion of the principal of
Borrowings outstanding on any day that is equal to the sum of the Collateral
Values of all Wet Loans, HLTV Loans or Subprime Loans that are then Pledged to
the Agent is one and one-eighth percent (1.125%).

(c)    the Applicable LIBOR/BAR Margin for that portion of the principal of
Borrowings outstanding on any day that is equal to the sum of the Collateral
Values of all Repurchased Loans then Pledged to the Agent is two and one-half
percent (2.500%).

“Balance Adjusted Rate” is defined in the definition of “Rate”.

“Base Rate” is defined in the definition of “Rate”.

“Bloomberg British Bankers Association LIBOR Page” means the display designated
as page “LIBOR” on the Bloomberg British Bankers Association rates service or
such other internationally recognized service as the Agent shall select from
time to time, or such other page, if any, as shall replace the LIBOR page on any
such selected service for the purpose of displaying London interbank offered
rates of major banks.

“Ceiling Rate” is defined in the definition of “Rate”.

“Class of Borrowings” means a grouping or categorization of Borrowings by the
particular Category of Collateral that they were made to finance, i.e. either
(i) Dry Loans that are neither HLTV Loans, Subprime Loans nor Repurchased Loans,
(ii) Wet Loans, HLTV Loans or Subprime Loans or (iii) Repurchased Loans.

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“Eurodollar Reserve Requirements” means for any day or time period, the stated
maximum rate (expressed as a decimal fraction) for all reserves required to be
maintained for that day or during that period (including basic, supplemental,
marginal and emergency reserves) against “eurocurrency liabilities”, as defined
in Regulation D, all as specified by any Governmental Authority, including those
imposed under Regulation D. Each determination of Eurodollar Reserve
Requirements by the Agent may be computed using any reasonable method and,
absent manifest error, shall be conclusive and binding.

“Free Adjusted Balances Equivalent” means, 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
the Company (or maintained by the Company’s Affiliates at the Company’s request)
with JPMorgan during that month (although neither the Company nor any of its
Affiliates shall have any obligation whatsoever to maintain any deposits with
JPMorgan) 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 JPMorgan for (1) services rendered to the Company or any of
its 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 JPMorgan, with each element calculated
in accordance with JPMorgan’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 JPMorgan for such services or agreed
reductions incurred in such prior month; and

(b)    the daily average outstanding principal of all Borrowings outstanding
during that month.

JPMorgan’s determination of the Free Adjusted Balances Equivalent for any month,
unless plainly wrong, shall be conclusive.

“Index” means a standard interest rate used as an index for determining a Rate
hereunder. The Indexes used in this Agreement are:

(a)    The “Prime Rate” which means, for any day, the prime rate for that day as
announced by JPMorgan. The Prime Rate is a reference rate and does not
necessarily represent JPMorgan’s best or lowest rate or a favored rate, and
JPMorgan disclaims any statement, representation or warranty to the contrary.
Any rate of interest based on the Prime Rate shall be (i) calculated on the
365/365 — or 366/366 in a leap year — day basis and (ii) adjusted as of the
effective date of each change in the Prime Rate.

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(b)    “LIBOR” which means, for any day, the rate of interest per annum that is
equal to the rate per annum (rounded upwards, if necessary, to the nearest
1/16th of 1%) determined by JPMorgan 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 for that day
for the offering to JPMorgan 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 the Agent cannot determine
such rate for any day, then LIBOR 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).

(c)    The “Federal Funds Effective Rate” which means, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for that
day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three (3) federal funds
brokers of recognized standing selected by the Agent. If for any reason the
Agent shall determine (and its determination shall be conclusive and binding
absent manifest error) that it is unable to ascertain for any reason — including
the Agent’s inability or failure to obtain sufficient quotations in accordance
with the immediately preceding sentence — the Federal Funds Effective Rate for
any day, then for each such day that such circumstances exist, the Federal Funds
Effective Rate shall be deemed to be equal to the Prime Rate for that day minus
one percent (1%). Any rate of interest based on the Federal Funds Effective Rate
shall be (a) computed on the basis of a 360-day year applied for the actual
number of days for which the principal amount to which it applies is outstanding
and bears interest in accordance with this Agreement at such rate of interest
based on the Federal Funds Effective Rate (i.e., on the 365/360 — 366/360 in a
leap year — day basis) and (b) adjusted as of the effective date of each change
in the Federal Funds Effective Rate.

Should any issue ever arise in any forum or under any circumstances as to the
amount of an Index for any then-current or past day, a certificate of the Chief
Credit Officer of JPMorgan, stating such Index for that day, absent manifest
error, shall conclusively establish what such Index was for that day.

“JPMorgan Loan Balances” means, for any calendar month, the average aggregate
outstanding principal balances of the Senior Credit Note(s) held by JPMorgan.

“LIBOR” is defined in clause (b) of the definition of “Index”.

“Prime Rate” is defined in clause (a) of the definition of “Index”.

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“Rate” means an interest rate applicable to the outstanding Borrowings. Each
Rate is stated as an annual percentage rate and, except the Ceiling Rate, is the
sum of an Index and a Margin. The Rates used in this Agreement are:

(a)    the “Balance Adjusted Rate” which, for any day of the term of the Loan,
is a rate per annum equal to the lesser of:

(i)    the Applicable LIBOR/BAR Margin for the relevant Class of Borrowing; and

(ii)    the Ceiling Rate for that day.

(b)    the “Base Rate” which, for each day of the term of the Loan, is a rate
per annum equal to the lesser of:

(i)    the sum, rounded upwards, if necessary, to the nearest one-eighth percent
(0.125%) of (1) the quotient of (x) LIBOR for that day divided by (y) 1.00 minus
the Eurodollar Reserve Requirement for one day loans, plus (2) the Applicable
LIBOR/BAR Margin for the relevant Class of Borrowing; and

(ii)    the Ceiling Rate for that day;

(c)    the “Ceiling Rate” which means, on any day, the maximum nonusurious rate
of interest permitted for that day by whichever of applicable federal or New
York law permits the higher interest rate, stated as a rate per annum; and

(d)    the “Past Due Rate” which means, on any day, the lesser of:
(i)    the Prime Rate for that day plus two percent (2%) per annum; and

(ii)    the Ceiling Rate for that day.

Each determination by the Agent of any Rate may be computed using any reasonable
method and, absent manifest error, shall be conclusive and binding.

“Stated Rate” means:

(i)    on any day, for Loan principal then outstanding that is (1) not past due
and (2) less than or equal to the Free Adjusted Balances Equivalent, the Balance
Adjusted Rate for that day, compounded annually;

(ii)    on any day, for Loan principal then outstanding that is (1) not past due
and (2) greater than the Free Adjusted Balances Equivalent, the Adjusted LIBOR
Floating Rate for that day, compounded annually;

(iii)    for each Borrowing as a whole, the weighted average of the interest
rates applicable to each of its constituent Tranches; and

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(iv)    for the Loan as a whole, the weighted average of the interest rates
applicable to each of the constituent Tranches of each outstanding Borrowing;

provided that if on any day the applicable rate for any such tranche, any such
Borrowing as a whole or the Loan as a whole shall exceed the relevant Ceiling
Rate for that day, then the Stated Rate therefor shall be reset to equal the
Ceiling Rate on that day and shall be set to equal the Ceiling Rate for each day
thereafter until the total amount of interest accrued at the Stated Rate on the
unpaid balance of that tranche, that Borrowing or the Loan (as applicable)
equals the total amount of interest that would have accrued on it if there were
no Ceiling Rate.

“Tranche” means a portion of the outstanding principal of the Loan. The Tranches
of the Loan (either of which may be zero on any given day) are:

(a)    The “Balances Equivalent Tranche” which is, for each day of each calendar
month (whether a whole or partial month) during the term of the Loan, the
portion of the Loan that is the sum of the daily averages of the non-past due
Borrowings outstanding on each day of that month in each Class of Borrowings,
added together in the following order until either the Free Adjusted Balances
Equivalent has been reached or all outstanding Borrowings have been added,
whichever occurs first:

Priority
Class of Borrowings
1
Dry Loans that are neither Repurchased Loans, HLTV Loans nor Subprime Loans
2
Wet Loans, HLTV Loans and, Subprime Loans
3
Repurchased Loans

(b)    The “Base Rate Tranche” which is, for each day during the term of the
Loan, the sum of non-past due Borrowings outstanding on that day (if any) in
excess of the Balances Equivalent Tranche for the calendar month in which that
day falls.

1.4.  Other Definitional Provisions. 
 
(a)  Accounting terms not otherwise defined shall have the meanings given them
under GAAP.
 
(b)  Defined terms may be used in the singular or the plural, as the context
requires.
 
(c)  Except where otherwise specified, all times of day used in the Facilities
Papers are local (U.S. Central Time Zone) times in Houston, Texas.
 
(d)  Unless the context plainly otherwise requires (e.g., if preceded by the
word “not”), wherever the word “including” or a similar word is used in the
Facilities Papers, it shall be read as if it were written, “including by way of
example but without in any way limiting the generality of the foregoing concept
or description”.
 

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2  THE LENDERS’ COMMITMENTS
 
2.1.  The Lenders’ Commitments to Lend. Subject to the terms and conditions of
this Agreement and provided no Default or Event of Default has occurred that the
Agent has not declared in writing to have been cured or waived (or, if one has
occurred and not been so declared cured or waived, if all of the Lenders, in
their sole discretion and with or without waiving the Default or Event of
Default, have elected in writing that lending under this Agreement shall
continue nonetheless), the Lenders agree to make revolving credit Advances to
the Company through the Termination Date, which the Company may borrow, repay
and (having repaid) reborrow in aggregate principal amounts outstanding on any
day of up to the Aggregate Committed Sum for that day. The Lenders’ respective
Commitments and the Aggregate Committed Sum are set forth on Schedule LC in
effect for that day, as it may have been amended or restated pursuant to this
Agreement. Upon the joinder of additional Lender(s), if any, the parties agree
to approve in writing revised and updated versions of Schedule LC. The fractions
to be applied to determine the respective Funding Shares of the Lenders for any
day are their respective Commitments divided by the Aggregate Committed Sum for
that day. Each Lender shall be obligated to fund only that Lender’s own Funding
Share of any Advance requested, and no Lender shall be obligated to the Company
or any other Lender to fund a greater share of any Advance. No Lender shall be
excused from funding its applicable Funding Share(s) of any Advance merely
because any other Lender has failed or refused to fund its relevant Funding
Share(s) of that or any other Advance. If any Lender fails to fund its Funding
Share(s) of any Advance under any Facility, the Agent (in its sole and absolute
discretion) may choose to fund the amount that such Nonfunding Lender failed or
refused to fund, or the Agent as a Lender and the other Lenders who are willing
to do so shall have the right (but no obligation) to do so in the proportion
that the Commitment of each bears to the sum of the Commitments of all Lenders
that have funded (or are funding) their own Funding Shares of that Advance and
that are willing to fund part of the Funding Share(s) of such Nonfunding Lender.
Should the Agent and/or any other Lender(s) fund any or all of the Nonfunding
Lender’s Funding Share of any Advance, then the Nonfunding Lender shall have the
obligation to deliver such amount to the Agent (for distribution to the
Lender(s) who funded it) in collected funds on the next Business Day. Regardless
of whether the other Lenders fund the Funding Share(s) of the Nonfunding Lender,
the respective ownership interests of the Lenders in the Loan shall be adjusted
as provided in the definition of “Pro Rata”. All Advances under this Agreement
shall constitute a single debt and all of the Collateral shall be security for
all of the Senior Credit Notes and the Obligations. If the unpaid balance of the
Loan should ever exceed the Aggregate Committed Sum or any other limitation set
forth in this Agreement, such excess shall nevertheless constitute part of the
Obligations that are secured by the Collateral and entitled to all benefits
thereof.
 
Notwithstanding anything to the contrary in this Agreement, the parties
understand and agree that no Lender or Lenders in addition to JPMorgan will join
in this Agreement, and JPMorgan shall be the sole Lender under this Agreement.
All references herein to “Agent,” “Lender” or “Lenders” shall mean “JPMorgan”
alone. In the event the parties agree to increase the Maximum Aggregate
Commitment and in connection with such increase JPMorgan desires to have one or
more Lenders in addition to JPMorgan join in this Agreement, the parties shall
execute a new agreement governing the transaction involving multiple Lenders,
and the provisions of this Agreement relating to joining other lenders in this
Agreement shall not be applicable and shall have no force and effect.

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2.2.  Expiration or Termination of the Commitments. Unless extended in writing
or terminated earlier in accordance with this Agreement, the Lenders’
Commitments to lend under this Agreement and the other Facilities Papers
(including JPMorgan’s Swing Line Commitment, if any) shall automatically expire
at the close of business on the Termination Date, without any requirement for
notice or any other action by the Agent, any of the Lenders or any other
Person. 
 
2.3.  Advances Outstanding May Not Exceed Limits. On any day, the aggregate
amount of Advances outstanding under the Loan shall in no event exceed either
the Aggregate Committed Sum or the Borrowing Base for that day. If any such
excess shall exist on any day and for any reason, the Company shall immediately
repay it or provide additional Collateral, as provided in Section 5.3(c).
 
2.4.  Advances to be Requested and Use of Proceeds. The Company shall request
Advances and may use their proceeds only for the general purpose of financing
the Company’s Single-family mortgage lending operations and related businesses.
 
2.5.  Swing Line Commitment. In addition to its Commitment under Section 2.1,
JPMorgan agrees (effective only from and after another Lender or Lenders become
party to this Agreement) to fund revolving credit Swing Line Advances to the
Company in principal amounts which do not on any day exceed the Swing Line Limit
for the purpose of initially funding requested Borrowings.
 
2.6.  Swing Line Borrowings. The Company shall have the right to borrow and
reborrow under the Swing Line: 
 
(a)  only if the Swing Line Borrowing fully qualifies in all respects for
funding as an ordinary Borrowing under this Agreement;
 
(b)  provided that no Default has occurred that has not been cured before it has
become an Event of Default, and no Event of Default has occurred that the Agent
has not declared in writing to have been waived or cured;
 
(c)  so long as the Swing Line Limit is not exceeded;
 
(d)  provided that the Request for Borrowing against which the Swing Line
Borrowing is to be funded is received by JPMorgan by no later than 3:00 PM
Houston time (4:00 PM if it requests only a Wet Warehousing Advance and is
Electronically Submitted) on the Business Day such Borrowing is to be funded;
and
 
(e)  provided that neither the Company nor JPMorgan is aware of any reason why
the Borrowing requested by the Request for Borrowing against which the Swing
Line Borrowing is to be funded cannot or will not be fully funded by the Lenders
on the fifth (5th) Business Day (or such other Business Day as shall be
designated by JPMorgan) following the Business Day on which the Request for
Borrowing is received by JPMorgan.
 

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All Swing Line Borrowings shall be evidenced by the “Swing Line Note” of the
Company dated the date of this Agreement, payable to the order of JPMorgan and
in a form acceptable to the Agent and the Company and shall bear interest from
the date funded until the date repaid (and accrued interest on them shall be due
and payable) at the same rate(s) and on the same days as would be applicable if
such Swing Line Borrowings had been funded by the Lenders, instead of having
been funded by JPMorgan alone as Swing Line Borrowings.

3  GENERAL BORROWING PROCEDURES
 
3.1.  Separate Request for Each Borrowing. A separate Request for Borrowing
shall be made for each Borrowing, which, when appropriately completed and
submitted (with, if new Single-family Collateral is being pledged, a Submission
List attached) may include requests for Borrowings to finance any type or types
of Eligible Collateral.
 
3.2.  Funding of Advances.
 
(a)  Deadline for Requests to be Funded as Regular Advances. If a Request for
Borrowing is received before 3:00 PM1 (Central time, as stated in Section
1.4(c)) — 4:001 PM for any Request for Borrowing that requests only a Wet
Warehousing Advance and is Electronically Submitted — on a Business Day and
fully qualifies in all respects for funding as a regular Advance by the Lenders
(including satisfying any applicable requirement of Section 3.3), it shall be
funded as a regular Advance on that same Business Day.
 
(The following provisions of this Section 3.2 are inapplicable until a Lender or
Lenders in addition to JPMorgan joins this Agreement)

(b)  Deadline for Requests to be Funded as Swing Line Advances. If, after a
Lender or Lenders in addition to JPMorgan joins this Agreement, the requirements
of Sections 2.6 and 3.3 are satisfied and a Request for Borrowing is received on
a Business Day after 3:00 PM but before 4:00 PM, JPMorgan shall fund the Advance
requested by making a Swing Line Advance on that same day.
 
(c)  Late Requests. If, after a Lender or Lenders in addition to JPMorgan joins
this Agreement, a Request for Borrowing is received by JPMorgan later than 4:00
PM on a Business Day, JPMorgan shall either, at its election, (i) fund the
Advance requested by making a Swing Line Loan either on that same day or, at
JPMorgan’s election, on the next Business Day, or (ii) arrange for its funding
on the next Business Day as a regular Advance. JPMorgan shall have no obligation
to fund any such late-requested Advance as a Swing Line Advance if all of the
requirements of Sections 2.6 and 3.3 are not satisfied, although JPMorgan may
elect to do so. If JPMorgan does not elect to do so, then the Lenders shall fund
such requested Advance as a regular Advance on such next succeeding Business Day
after the Request for Borrowing is received by the Agent, provided that all
conditions to its funding (including the requirements of Section 3.3) are then
satisfied.
 

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(d)  Repayment of Swing Line Borrowings. Each Swing Line Advance shall be repaid
on its Swing Line Borrowing Due Date by the Agent’s paying over to JPMorgan out
of the Note Payment Account, and JPMorgan’s applying against such outstanding
Swing Line Borrowing, an amount equal to the proceeds of the Funding Shares
funded by all of the other Lenders on that day against the same Request for
Borrowing that was initially funded by such Swing Line Advance. If at the time
such Swing Line Advance was funded, JPMorgan reasonably believed that no Default
or Event of Default had occurred and was then continuing and that all of the
other conditions set forth in Section 2.6 for such Swing Line Advance were
satisfied in all material respects, the other Lenders shall be unconditionally
and irrevocably obligated to timely fund their respective Funding Shares of the
Advance that was so initially funded as a Swing Line Advance, to repay to
JPMorgan (and thereby refinance) on the relevant Swing Line Borrowing Due Date
all of that Swing Line Advance except only JPMorgan’s Funding Share of it,
irrespective of whether in the meantime any Default or Event of Default has
occurred or been discovered, and irrespective of whether in the meantime some or
all of the Lenders’ Commitments have lapsed, expired or been canceled, rescinded
or terminated with or without cause, or have been waived, released or excused
for any reason whatsoever, so that (i) the principal of the Swing Line is paid
down by the required amount on each Swing Line Borrowing Due Date — all accrued
interest on Swing Line Advances shall be due and payable by the Company to the
Agent (for distribution from the Note Payment Account to JPMorgan) on the later
of (x) the fifteenth (15th) day of the next month or (y) two (2) Business Days
after the Agent bills the Company for such accrued interest — (ii) all Swing
Line Advances are converted to regular Advances from the Lenders and (iii) those
Advances are evidenced by the Senior Credit Notes other than the Swing Line
Note. If any Lender fails to provide its funds to JPMorgan to repay its share of
any Swing Line Loan when due (including any such failure caused by a fed funds
wire delay), then that Lender shall also be obligated to pay to JPMorgan
interest on the unpaid balance of principal so due to JPMorgan at the Federal
Funds Effective Rate from such due date until three (3) Business Days after such
due date, and at the Federal Funds Effective Rate plus two percent (2%) from
three (3) Business Days after such due date until the date of payment of such
principal sum.
 
(e)  Syndication of Advances.
 
(1)  When a Request for Borrowing is received by the Agent, the Agent shall give
notice by fax or, at the Agent’s discretion, email to each Lender of that
requested Advance and that Lender’s Funding Share of the requested Advance by
2:00 PM on the Business Day when the requested Advance is to be funded by the
Lenders, and each Lender shall cause its Funding Share thereof to be transferred
to the Agent by fed funds wire transfer to:
 
JPMorgan Chase Bank, N.A.
ABA number 1130-0060-9
Attention: Mortgage Warehousing — Wanda Carr
Phone: (713) 427-6391
For credit to: E-Loan, Inc.
Account No. 00113398961
JPMorgan Chase Real Estate Wire Transfer Clearing Account

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within two (2) hours after receiving such notice from the Agent or by 4:00 PM,
whichever is earlier, so that the Agent receives it in good collected Houston
funds on that same Business Day, and the Agent shall deposit such Funding Shares
into the Note Payment Account when received.

(2)  If the Agent has not already funded the requested Advance as a Swing Line
Advance, then (provided no Default has occurred that has not been cured by the
Company or waived in writing by the Agent and no Event of Default has occurred
that the Agent has not declared in writing to have been either cured or waived)
the Agent shall disburse such Advance to the Company or to its designee(s) for
their account.
 
(f)  If the Agent has funded the requested Advance (or any part of it) as a
Swing Line Advance, then the Agent shall repay JPMorgan the related Swing Line
Advance (except for JPMorgan’s own Funding Share thereof) from the Note Payment
Account; provided that if a Lender other than JPMorgan advises the Agent by
telephone and confirms the advice by fax that the Lender has placed all of its
Funding Share on the federal funds wire to the Agent, the Agent shall continue
to keep the Swing Line Advance outstanding to the extent of that Lender’s
Funding Share so wired until the Agent has actually received such share —
whereupon the Agent shall deposit such Funding Share when received into the Note
Payment Account and repay JPMorgan that still-outstanding portion of the Swing
Line Advance from the Note Payment Account — except that the Agent shall have no
obligation to continue such portion of any Swing Line Advance outstanding if and
to the extent, if any, that doing so would cause the total amount funded by the
Agent and outstanding to exceed the Swing Line Limit.
 
(End of provisions of Section 3.2 that are inapplicable until a Lender or
Lenders in addition to JPMorgan joins this Agreement)

3.3.  Time When Submission List(s) and New Collateral Papers (If Any)
Due. Unless the Borrowing Base already has sufficient Collateral Value to
support both the requested Borrowing and all other outstanding Borrowings, the
Company shall (1) deliver to the Agent with the Request for Borrowing one or
more signed Submission Lists listing (i) all new Single-family Collateral then
being Pledged to the Agent to support such Borrowing and (ii) the values of the
elements for determining the Book Collateral Value of the new Single-family
Collateral and the applicable Advance Rates for the respective Categories of
Collateral (as specified in Schedule EC) in which such new Single-family
Collateral falls, and (2) cause to be delivered to the Custodian all of the
Basic Papers relating to the items of new Single-family Collateral listed in
such Submission List(s), by the following deadlines:
 
If the Number of Files Submitted is:
Then the Submission List and Basic Papers are due on:
at this time (in Houston)
50 files or less
the same Business Day as the Request for Borrowing is received by the Agent
10:00 AM
51-100 files
the preceding Business Day
2:00 PM
for each additional 100 files increment
one additional prior Business Day
2:00 PM

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3.4.  If Outstanding Advances Would Exceed the Borrowing Base. If, after giving
effect to a requested Borrowing, the outstanding Borrowings would exceed the
Borrowing Base, or if the Agent or the Custodian determines (either then or on
any later day in the course of reviewing the same) that any such Submission List
or Basic Papers submitted to it are incomplete or incorrect in any material
respect (provided that if the Custodian reasonably determines that such a
condition of incompleteness or incorrectness of Basic Papers is correctable and
returns the subject Basic Papers to the Company for corrective action, then the
affected Pledged Loan(s) shall not be excluded from the Borrowing Base unless
and until the Company fails to correct and return such Basic Papers to the
Custodian within ten (10) Business Days after the Custodian sent them) then:
 
(a)  the Agent may withhold the entire Advance until the Company shall have
demonstrated (i) to the Agent’s reasonable satisfaction that the Submission
Lists submitted and (ii) to the Custodian’s reasonable satisfaction that all
required Basic Papers submitted (if any), are in fact not (or are no longer)
incomplete or incorrect in any material respect; or
 
(b)  in the case of a Borrowing Base insufficiency, unless the Company instructs
the Agent in writing not to fund any of the requested Borrowing, and subject to
the provisions and limitations of Sections 2.1 and 2.5, the Agent will fund such
lesser amount(s) as the Agent shall determine is (are) supported by the
Borrowing Base and will notify the Company of such insufficiency, including the
Agent’s calculation of such insufficiency set forth in reasonable detail.
 
3.5.  If a Request for Borrowing or New Collateral Papers are Received Late;
Waiver of Claim for Any Late Funding. If either a Request for Borrowing or the
Basic Papers for any new Collateral and its related Submission List are
submitted late, the Agent will use reasonable efforts to make the requested
Advance as a Swing Line Advance on the same Business Day it is requested,
although neither the Company nor any other Person shall have any claim or cause
of action against the Agent or any of the Lenders if for any reason that funding
(or any other funding) does not occur on the same day it is requested.
 
4  THE SENIOR CREDIT NOTES
 
To evidence the Advances to be made by the Lenders pursuant to this Agreement,
the Company agrees to execute and deliver to each Lender a Senior Credit Note in
a face principal amount equal to that Lender’s Committed Sum and dated the same
date as this Agreement (or dated with such other appropriate date as shall be
agreed upon by the Company, that Lender and the Agent if the effective date of
that Lender’s joinder in this Agreement is after its Effective Date), and to
evidence the Swing Line Advances to be made by JPMorgan, the Company agrees to
execute and deliver to JPMorgan the Swing Line Note in face principal amount
equal to the Swing Line Limit. If any Lender’s Committed Sum shall be increased
for any reason after the Company shall have issued that Lender its Senior Credit
Note, then the Company agrees to execute and deliver to that Lender upon its
request a renewal Senior Credit Note in a face principal amount equal to the
portion of that Lender’s new Committed Sum and dated the same date that such
applicable Committed Sum change becomes (or became) effective. If the Swing Line
Limit shall be reduced below what the Swing Line Limit is on the Effective Date
for any reason, the maximum Borrowings outstanding under the Swing Line Note
then or on any day thereafter shall be limited to the Swing Line Limit on such
day, irrespective of the fact that the face principal amount of the Swing Line
Note may be greater than that. Notwithstanding any other inconsistent or
contrary provision of this Agreement or any of the other Facilities Papers,
whether or not — for any reason, at any time or from time to time — the Advances
in the aggregate exceed the sum of the face amounts of the Senior Credit Notes,
or the Swing Line Advances outstanding exceed the face amount of the Swing Line
Note, such excess shall be due and payable on demand. All Advances are and shall
be part of the Obligations and all of the Obligations are and shall be secured
by all Collateral.

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5  INTEREST, PRINCIPAL AND FEES PAYMENTS
 
5.1.  Interest. Interest shall accrue and be due and payable as follows:
 
(a)  Each portion of each Borrowing shall bear interest on its advanced and
unpaid principal balance at the applicable Stated Rate from the date of the
Borrowing until due or repaid (whichever occurs first), and such interest shall
be calculated through the last day of each month and shall be due and payable in
arrears on the later of (i) the fifteenth (15th) day of the next following month
(with the first interest payment due February 15, 2005) or (ii) two (2) Business
Days after the Agent bills the Company for such accrued interest (the Agent
agrees to use commercially reasonable efforts to bill the Company for accrued
interest by the 15th of each month, but shall have no liability for failing to
do so), and all accrued interest then unpaid shall be fully, finally and
absolutely due and payable on the Maturity Date.
 
(b)  All past due principal, interest, fees or other sums shall bear interest at
the Past Due Rate from their respective due dates until paid, or at such lesser
rate (if any) — although not less than the Stated Rate — as the Agent shall
elect to be applicable for any one or more days of such period. Without
duplication, from the earlier of the Maturity Date or the date of the occurrence
(if any) of an Event of Default described in Section 11.1(f), 11.1(g),
11.1(j) or 11.1(o), all advanced and unpaid Loan principal shall bear interest
at the Past Due Rate, or at such lesser rate (if any) — although not less than
the Stated Rate — as the Agent shall elect to be applicable for any one or more
days of such period.
 
(c)  Except as otherwise specified in this Agreement or any relevant Facilities
Papers, interest on any Borrowing, as well as the amount of any fee that is
stated as a rate, is to be calculated on the basis of a year of 360 days (i.e.,
on the 365/360 — or 366/360 in a leap year — day basis), unless that would cause
the Ceiling Rate for any day to be exceeded, in which event and to the extent
necessary to eliminate or minimize that result, such interest or such fee shall
be calculated on the 365/365 — or 366/366 in a leap year — day basis.
 
(d)  All interest and fee rate and amount determinations and calculations by the
Agent, absent manifest error, shall be conclusive and binding.
 

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5.2.  Interest Rates. 
 
(a)  Subject to the following rules, and as contemplated in the definition of
“Stated Rate” (although in the event of any conflict between such definition and
the provisions of this Section, the provisions of this Section shall prevail),
the portion of principal of the Loan outstanding on any day when no Event of
Default has occurred and is continuing that is equal to the Free Adjusted
Balances Equivalent for the month in which such day falls — or if the aggregate
Loan principal outstanding on that day is less than such Free Adjusted Balances
Equivalent, the entirety of such Loan principal — (such portion being the
Balances Equivalent Tranche) shall bear interest at the Balances Equivalent Rate
(compounded annually) applicable for that day to each Class of Borrowings in the
Balances Equivalent Tranche:
 
(1)  The Balances Equivalent Rate shall not be available for or applicable to
(i) any Loan principal outstanding on any day in excess of the Free Adjusted
Balances Equivalent for the month in which that day falls, (ii) any past due
Loan principal or (iii) after the occurrence of an Event of Default (unless and
until the Event of Default has been declared in writing by the Agent to have
been cured or waived), any Loan principal.
 
(2)  To the extent that the Balances Equivalent Tranche exceeds the JPMorgan
Loan Balances, the Agent will pay to the Lenders (if any) other than JPMorgan,
ratably, interest on such excess at a rate per annum equal to the Balances
Equivalent Margin plus the Federal Funds Effective Rate (and the Lenders hereby
agree that payment of such interest at that rate is satisfactory); provided that
if doing so would violate Regulation Q, on demand made by the Agent — which
demand the Agent may make on its own initiative and will make upon the request
of any Lender — the Company shall gross-up and pay to the Agent the interest on
that portion of the Loan so that the Agent will have the funds to pay the
interest due to the other Lender(s) without violating Regulation Q, and the
Agent’s obligation to pay such interest due to the other Lender(s) shall be
subject to and conditioned upon the Agent’s receiving such funds from the
Company. In no event will the Agent ever be obligated to make any payment that
would violate Regulation Q.
 
(b)  As is also contemplated in the definition of “Stated Rate”, the unpaid
amount of the Borrowings outstanding on any day in excess of the Free Adjusted
Balances Equivalent for the month in which such day falls shall bear interest at
the Base Rate (compounded annually) applicable for that day to each Class of
Borrowings in the Base Rate Tranche.
 
(c)  Notwithstanding any contrary or inconsistent provision of this Section 5.2,
all Loan principal outstanding shall bear interest at the Past Due Rate from the
date of occurrence of any Event of Default and until it has been declared in a
writing signed by the Agent to have been cured or waived and its material
consequences (if any) have been wholly cured.
 
5.3.  Principal. The Advances’ outstanding principal amount shall be due and
payable in full without notice or demand on the Maturity Date. Before then, the
Company agrees to pay the following principal payments to the Agent immediately
upon the occurrence of the following events, in each case without notice or
demand but without duplication of payment:
 

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(a)  Promptly upon the Company’s becoming entitled and able to collect the
proceeds of any sale or other disposition of Collateral, a principal amount
equal to the amount so collectable shall be due and payable by the Company to
the Agent — although, pursuant to the provisions of Section 6.11, the Agent’s
security interest in such Collateral or its proceeds shall not be released
unless and until the Agent has received for deposit into the Note Payment
Account the Redemption Amount for such Collateral — and the Company shall cause
the entirety of all available Collateral disposition proceeds to be paid to the
Agent (or if the Company receives them, the Company shall pay them over to the
Agent), with each such payment to be applied first against the principal of
Borrowings outstanding under the Swing Line, then against the principal of
Borrowings outstanding under the Credit Line, and with the remaining balance (if
any) to be transferred from the Note Payment Account into the Company’s own
account with JPMorgan (unless either (i) any payment of principal or interest on
the Obligations shall then be past due, in which event the Agent may first apply
such excess to pay such past due amount and transfer only the balance, if any,
remaining after such application to the Company’s own account, or (ii) an Event
of Default has occurred that the Agent has not declared in writing to have been
either waived or cured, in which event the Agent shall hold such excess as
Collateral and apply it in accordance with the provisions of Section 11.4.) With
or after each such payment, the Company shall furnish the Agent and the
Custodian with a written reconciliation of the amounts collected by the Company
with the amount received by the Agent.
 
(b)  If any Disqualifier occurs in respect of any item of Collateral, unless the
Borrowing Base still equals or exceeds the sum of all Borrowings outstanding,
the Company shall repay Loan principal to the Agent in an amount — or, unless an
Event of Default has occurred that the Agent has not declared in writing to have
been cured or waived, furnish substitute Collateral of the same type and having
Collateral Value at least — equal to what that item’s Collateral Value would
have been on the day when such Disqualifier occurred if there were no
Disqualifier as to that item of Collateral.
 
(c)  If for any reason on any day, the Borrowings outstanding exceed the
Borrowing Base, then the Company shall repay Loan principal to the Agent in an
amount equal to such excess, unless both (i) no Event of Default has occurred
that the Agent has not declared in writing to have been cured or waived and (ii)
the Company shall Pledge to the Agent substitute Collateral that is not subject
to any Disqualifiers and has Collateral Value at least equal to such excess on
or before one (1) Business Day after the Company first learned of the existence
of such excess; provided that upon the occurrence of any such excess, the
Lenders’ obligations to lend, and the Agent’s obligation to disburse, any
Advances to or for the account of the Company shall be suspended until such
Borrowings excess shall be eliminated by the Company’s either so repaying Loan
principal or so pledging additional Collateral.
 
5.4.  Interest (and Principal) Due at Maturity. On the Maturity Date accrued
interest (as well as all principal) then unpaid shall be finally due and payable
without notice or demand.
 

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5.5.  Rate of Return Maintenance Covenant. If at any time after the date of this
Agreement, any Lender that is a bank determines that (i) any applicable law,
rule or regulation regarding capital adequacy has been adopted or changed since
December 1, 2004 or (ii) its interpretation or administration by any
Governmental Authority, central bank or comparable agency has changed since
December 1, 2004 and determines that such change or such Lender’s compliance
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on that
Lender’s capital as a consequence of its obligations under this Agreement
or any of the other Facilities Papers to a level below that which that Lender
would have achieved but for such adoption, change or compliance (taking into
consideration the Lender’s own capital adequacy policies) by an amount the
Lender deems to be material, then provided that the Company is given (a) a
notice by that Lender or the Agent within ten (10) Business Days of the date
when that Lender or the Agent (as the case may be) first learns that such law,
rule, regulation has been so adopted, or that its interpretation or
administration by a Governmental Authority, central bank or comparable agency
has so changed, and (b) a concurrent notice, or a later notice given within
thirty (30) days of such date, summarizing the facts triggering the increase and
calculations of the increase, then and in that event the interest rate on the
principal of that Lender’s portion of the Loan funded and outstanding from time
to time shall be increased, commencing thirty (30) days after such notice to the
Company, to a rate sufficient to provide that Lender with a rate of return on
its capital equal to that which would have been achieved but for such adoption,
change or compliance (taking into consideration that Lender’s own capital
adequacy policies) — or if no Loan is then outstanding (or if the Loan is repaid
in full before the full amount required to provide that rate of return has been
paid) and if written notice of the amount due is given to the Company within
such 30-day period or within thirty (30) days after payment in full of the Loan
(whichever is later), then the Company shall be liable to pay that Lender on
demand an additional interest payment in an amount sufficient to provide that
rate of return — but in no event shall any such payment be required or made to
the extent, if any, that such payment, if made, when added to all other
payments, would produce an interest rate for any period in excess of the Ceiling
Rate. In determining the increase in interest rate required to achieve that
result, each affected Lender may employ such assumptions and make such
allocations of costs and expenses fairly applicable to the Loan as that Lender
reasonably elects and may use any reasonable averaging and attribution method.
Any Lender claiming compensation under this Section shall furnish the Company
its certificate setting forth the amount or amounts (calculated pursuant to the
above-described methods) necessary to compensate the Lender as specified in this
Section and the calculations made to determine such amount or amounts. If any
Lender shall give notice to the Company claiming compensation under this
Section, the Company may elect to terminate this Agreement by giving an
irrevocable written notice to the Agent specifying the termination date, and on
the termination date so specified, provided that the Obligations are then fully
paid and satisfied, this Agreement shall terminate, the Facility Fee shall be
prorated on a daily basis and any paid but unearned portion of the Facility Fee
paid shall be credited or refunded to the Company.
 
5.6.  Chief Credit Officer’s Certificate Conclusive. The certificate of the
chief credit officer of JPMorgan stating the Past Due Rate, the Base Rate or the
Balance Adjusted Rate applicable to one or more Advances shall conclusively
establish what the applicable rate was, absent manifest error.
 
5.7.  Facility Fee. The Company agrees to pay to the Agent, for the account of
the Lenders (and for the Agent to distribute to them), ratably according to
their respective Committed Sums, a cash facility fee (the “Facility Fee”) in an
amount equal to twelve and one-half basis points (0.125%) per annum of the
Aggregate Committed Sum for the period from the Effective Date to the Maturity
Date. The Facility Fee for the period from the Effective Date through April 30,
2005 shall be due and payable in advance on the Effective Date, and the Facility
Fee for each succeeding period of three (3) months (or less) until the Maturity
Date shall be due and payable in advance on the fifteenth (15th) day of the
first calendar month in each such period, commencing May 15, 2005. If the
Aggregate Committed Sum shall be increased or decreased from time to time either
pursuant to a provision of this Agreement or by separate agreement among the
Company, the Lenders and the Agent (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 Facility Fee shall be required except if
and to the extent required by the provisions of Section 15.3), the amount of the
Facility Fee shall be adjusted. If the Aggregate Committed Sum is decreased
during any three (3) month period in which the Facility Fee has already been
paid, no refund shall be due the Company. If a decrease is made at the end or
beginning of each three (3) month period, then the amount of the Facility Fee
subsequently due for the ensuing three (3) month period shall be proportionately
adjusted based on the new Aggregate Committed Sum. If the Aggregate Committed
Sum is increased for the three-month period in which the effective date of the
amendment producing such increase occurs, the Facility Fee shall be adjusted for
the unexpired portion of that three-month period by a cash payment by the
Company to the Agent (for distribution to the Lenders in the event of an
increase in the Aggregate Committed Sum), and the amounts of payments of the
Facility Fee subsequently due shall likewise be proportionately adjusted based
on the new Aggregate Committed Sum. The Facility Fee is compensation to each
Lender for committing to make funds available for revolving credit Advances on
the terms and subject to the conditions of this Agreement, and is not
compensation for the use or forbearance or detention of money, although this
Section (as well as every other Section of this Agreement) is subject to the
provisions of Section 15.3. Each calculation by the Agent of the amount of the
Facility Fee shall be conclusive and binding absent manifest error. 

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5.8.  Agent’s Fee. The Company agrees to pay to the Agent such agent’s fee (the
“Agent’s Fee”) as may be provided for in a separate agreement between the
Company and the Agent (there will no such separate agreement and no agent’s fee
unless and until another Lender joins this Agreement.)
 
5.9.  Overdraft Advances. If, pursuant to this Agreement, the Agent debits any
of the Company’s accounts or honors an item presented against any of the
Company’s accounts and that debit or direction results in an overdraft, the
Agent may, but shall not be obligated to, make an additional advance to fund
that overdraft (“Overdraft Advance”). The Company must pay (a) the outstanding
amount of any Overdraft Advance, within one (1) Business Day after the date of
the Overdraft Advance and (b) interest on the amount of the Overdraft Advance at
a rate per annum equal to the Prime Rate plus two percent (2%) within five (5)
Business Days after the date of the Agent’s invoice or, if applicable, within
two (2) Business Days after the date of the Agent’s account analysis statement.
 
5.10.  Prepayments. The Company shall have the right to prepay the outstanding
Borrowings in whole or in part, from time to time and without premium or
penalty.
 

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5.11.  Payments. 
 
(a)  Except as otherwise specifically provided in this Agreement, all payments
under this Agreement, on the Senior Credit Notes and under the other Facilities
Papers shall be paid (i) to the Agent for deposit in the Note Payment Account,
(ii) by not later than 12:00 noon (Central time) if made by electronic funds
transfer, or 11:00 AM (Central time) if made by any means requiring the Agent to
make manual data entries on the day when due (unless the Agent shall agree to a
payment’s being made before a specific later deadline) and (iii) without
set-off, counterclaim or deduction, in lawful money of the United States of
America in immediately available funds at the principal Houston branch of the
Agent, at 712 Main Street, Houston, Texas 77002, or by fed funds wire transfer
to:
 
JPMorgan Chase Bank, N.A.
1111 Fannin, 12th Floor
Houston, Texas 77002
ABA number 1130-0060-9
Attention: Mortgage Banking Warehouse Services — Wanda Carr
Phone: (713) 427-6391
Account number 00113398961
For Credit — E-Loan, Inc.

or at such other place as the Agent shall designate from time to time. Whenever
any payment to be made under this Agreement, any Senior Credit Note or any of
the other Facilities Papers shall be stated to be due on a day that is not a
Business Day, the due date for that payment shall be automatically extended to
the next day that is a Business Day, and with respect to principal, interest at
the applicable rate (determined in accordance with this Agreement) shall
continue to accrue during the period of such extension. Unless the Agent, acting
in its sole discretion, shall agree otherwise, funds received by the Agent after
2:00 PM on a Business Day shall be deemed for all purposes to have been paid by
the Company on the next succeeding Business Day, except that if, after so
deeming, any applicable Ceiling Rate would be exceeded, then solely for the
purpose of calculating interest accrued, such funds shall be deemed paid on the
date received.

(b)  If and to the extent any payment is not made when due under this Agreement,
any Senior Credit Note (including the Swing Line Note) or any of the other
Facilities Papers, the Company authorizes the Agent and each Lender (for the Pro
Rata account and benefit of all of the Lenders) then or at any time thereafter
to charge any amounts so due and unpaid against any or all of the Company’s
accounts with the Agent or any of the Lenders; provided that such right to
charge the Company’s accounts shall not apply to any escrow, trust or other
deposit accounts designated as being held by the Company on behalf of third
party owners of the escrowed funds other than Affiliates of the Company. The
Agent agrees to use reasonable efforts to promptly advise the Company of any
charge made pursuant to this Section, but its failure to do so will not affect
the validity or collectibility of such charge.
 
(c)  Any and all payments by the Company made pursuant to this Agreement or
under any Senior Credit Note or other Facilities Papers shall be made free and
clear of and without deduction for any and all present or future Taxes. If the
Company shall be required by law to deduct any Taxes from or in respect of any
sum payable pursuant to this Agreement or under any Senior Credit Note or other
Facilities Paper, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions, such Lender receives an amount equal
to the sum it would have received had no such deductions been made, and (ii) the
Company agrees to pay the Taxes to the relevant Governmental Authority.
 

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(d)  Each payment received by the Agent in accordance with this Agreement is
valid and effective to satisfy and discharge the Company’s liability under the
Facilities Papers to the extent of the payment.
 
5.12.  Pro Rata Distribution of Payments. All payments and prepayments of the
Senior Credit Notes, including (subject to Sections 3.2(d) and 5.3(a)) the Swing
Line Note, (whether voluntary or involuntary and from whatever source) received
by the Agent shall be distributed by the Agent to the Lenders Pro Rata with
their respective ownership interests in the Loan as of the date the payment is
credited against the Senior Credit Notes in accordance with this Agreement. The
distribution from the Agent to each Lender shall be made by the Agent’s
initiating a federal funds wire transfer by 3:00 PM on the Business Day when
such funds were received, in immediately available funds directly to the Lender
or to such account at another financial institution as is designated from time
to time by the Lender in writing, and shall be made on the same Business Day
received (or deemed received) by the Agent. If the Agent shall fail or refuse to
so make the distribution on the same Business Day as the payment was received,
then, as agreed full and adequate compensation therefor, the Agent shall pay the
affected Lender(s) interest on the undistributed funds at the Federal Funds
Effective Rate.
 
6  COLLATERAL
 
6.1.  Grant of Security Interest. As security for the payment of the Loan and
for the payment and performance of all of the Obligations, the Company hereby
grants to the Agent, as agent and representative of the Lenders, a first
priority security interest in all of the Company’s present and future estate,
right, title and interest in and to the following described Collateral (although
neither the Lenders nor the Agent assumes any of the Company’s or any other
liability or obligation under or in respect of any Collateral):
 
(a)  Single-family Loans Collateral.
 
(1)  all Pledged Loans;
 
(2)  all Collateral Support;
 
(3)  all rights to deliver Pledged Loans to investors and other purchasers and
all proceeds resulting from the disposition of such Collateral pursuant thereto,
including the Company’s right and entitlement to receive the entire purchase
price paid for Pledged Loans sold;
 
(4)  all Hedge Agreements relating to or constituting any and all of the
foregoing, including all rights to payment arising under such Hedge
Arrangements;
 
(5)  all Servicing Rights in respect of any of the Pledged Loans; and
 

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(6)  all of the Company’s rights now or hereafter existing in, to or under any
MBS secured by, created from or representing any interest in any of the Pledged
Loans, whether now owned or hereafter acquired by the Company, and whether such
MBS are evidenced by book entry or certificate (the Agent’s Lien against each
MBS created from, based on or backed by Pledged Loans shall automatically attach
to, cover and affect all of the Company’s right, title and interest in that MBS
when issued and its proceeds and the Agent’s Lien against the Pledged Loans from
which such MBS was so created shall automatically be released when such MBS is
issued, subject to automatic reinstatement if such issuance is voided or set
aside by any court of competent jurisdiction), all right to the payment of
monies and non-cash distributions on account of any of such MBS and all new,
substituted and additional securities at any time issued with respect thereto;
 
(b)  Related Accounts, Payment Intangibles, General Intangibles
 
(1)  all accounts, payment intangibles, general intangibles, instruments,
documents (including documents of title), chattel paper, contract rights and
proceeds, whether now or hereafter existing (including all of the Company’s
present and future rights to have and receive interest and other compensation,
whether or not yet accrued, earned, due or payable), under or arising out of or
relating to the Pledged Loans;
 
(2)  all instruments, documents or writings evidencing any such accounts,
payment intangibles, general intangibles or proceeds or evidencing any monetary
obligation under, or security interest in, any of the Pledged Loans, all other
papers delivered to the Agent or the Custodian, and all other rights transferred
to the Agent, in respect of any of the Pledged Loans, including, without
limitation, the right to collect, have and receive all insurance proceeds
(including but not limited to casualty insurance, mortgage insurance, pool
insurance and title insurance proceeds) and condemnation awards or payments in
lieu of condemnation which may be or become payable in respect of the Mortgaged
Premises encumbered or intended to be encumbered by any Pledged Loan, and other
personal property of whatever kind relating to any of the Pledged Loans, in each
case whether now existing or hereafter arising, accruing or acquired;
 
(3)  all security for or claims against others in respect of the Pledged Loans;
 
(4)  the nonexclusive right to use (in common with the Company and any other
Secured Party that has a valid and enforceable security interest therein and
that agrees that its security interest is similarly nonexclusive) the Company’s
operating systems to manage and administer the Pledged Loans and any related
data and information, together with the media on which the same are stored to
the extent stored with material information or data that relates to property
other than the Pledged Loans (tapes, discs, cards, drives, flash memory or any
other kind of physical or virtual data or information storage media or systems,
and the Company’s rights to access the same, whether exclusive or nonexclusive,
to the extent that such access rights may lawfully be transferred or used by the
Company’s permittees), and any computer programs that are owned by the Company
(or licensed to the Company under licenses that may lawfully be transferred or
used by the Company’s permittees) and that are used or useful to access,
organize, input, read, print or otherwise output and otherwise handle or use
such information and data; and
 

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(c)  all proceeds and rights to proceeds of any sale or other disposition of any
or all of the Pledged Loans;
 
(d)  Note Payment Account. the Note Payment Account and all sums from time to
time on deposit in it;
 
(e)  Collateral Records. all Collateral Records;
 
(f)  Other Property. any other Property acceptable to the Agent and Pledged to
the Agent; and
 
(g)  Other Rights. all rights to have and receive any of the Collateral
described above, all accessions or additions to and substitutions for any of
such Collateral, together with all renewals and replacements of any of such
Collateral, all other rights and interests now owned or hereafter acquired by
the Company in, under or relating to any of such Collateral or referred to above
and all proceeds of any of such Collateral;
 
provided, that the Agent’s security interest in the Pledged Loans does not
extend to, cover or affect any of the mortgage loan Servicer’s right, title or
interest in, to or under (a) any Servicing Agreement that the Company, as owner
or investor, has entered into, or may hereafter enter into, in good faith with
any Person that is not an Affiliate of the Company, as mortgage loan Servicer,
to service Mortgage Loans now or hereafter owned or held by the Company, whether
or not such Mortgage Loans were heretofore, or are now or hereafter, Pledged to
the Agent or (b) the mortgage loan servicing rights under any such mortgage loan
servicing agreement between the Company and a contractual mortgage loan Servicer
that is not an Affiliate of the Company; provided further that nothing in this
sentence shall be construed to waive, disclaim, impair or otherwise affect the
Agent’s security interest (as agent and representative of the Lenders) in any of
such Mortgage Loans themselves, including the Agent’s security interest in and
to all of the Company’s Servicing Rights affecting or relating to Pledged Loans.

6.2.  Further Assurances Concerning Collateral. In furtherance of the foregoing,
the Company (i) hereby agrees to perform, or cause to be performed, such acts
and duly to authorize, execute, acknowledge, deliver, file and record (or cause
such actions to be taken with respect to) such financing statements,
assignments, security agreements, deeds of trust, mortgages, bond powers and
supplements, modifications or amendments to any of them, and such other papers
as the Agent may reasonably request in order to establish and preserve the
priority of, perfect and protect the Liens granted or intended to be granted to
the Agent in and to any and all such Collateral and to preserve and protect the
Agent’s rights in respect of all present and future Collateral for the
Obligations.
 
6.3.  Delivery of Additional Collateral or Mandatory Prepayment. At least once a
week during the term of this Agreement (or more often in the discretion of the
Agent if it reasonably determines that market conditions warrant) and whenever a
Request for Borrowing is made by the Company (except that the Agent shall have
no obligation to make such determination more frequently than once per day), the
Agent shall:
 

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(a)  determine the aggregate Collateral Values for the Borrowing Base each
(including the Collateral Value of any Collateral pledged on that day) by
summing the values of the individual items of Collateral as reported on (and
recorded by the Agent from) the Company’s Submission Lists and Pledged Loans
Curtailment Reports, valuing at zero Collateral for which the Agent has current
actual knowledge that a Disqualifier exists;
 
(b)  issue a statement of the value of each Borrowing Base as so determined; and
 
(c)  provide a copy of that certificate to the Company.
 
If the Agent shall determine on any day that the Borrowing Base is less than the
outstanding Borrowings, then the Company shall immediately (by no later than the
next Business Day after the Agent’s request) either:

(1)  Pledge to the Agent additional Collateral and deliver to the Custodian all
Basic Papers for any such additional Collateral (delivery of such Basic Papers
to the Custodian may be deferred for up to five (5) Business Days for any Wet
Loans Pledged to the Agent as additional Collateral) and/or;
 
(2)  after giving effect to the Collateral Value of any additional Collateral
Pledged to the Agent and delivered to the Agent pursuant to Section 6.3(c)(1),
pay to the Agent cash for Pro Rata distribution to the Lenders, in aggregate
amounts sufficient to cover the sum of the excess of each of (i) the sum of all
Borrowings outstanding over (ii) the Collateral Value of the Borrowing Base
 
provided, that the Company may not elect under the provisions of Section
6.3(c)(1) (and instead must make a cash paydown pursuant to Section 6.3(c)(2))
if any Default or Event of Default has occurred that the Agent has not declared
in writing to have been cured or waived.

6.4.  Mandatory Redemption of Subpar Alt-A Collateral for Low Weighted Average
FICO Scores or of Nonconforming Pledged Loans if Less Than 95% Conform with
Fannie Mae or Freddie Mac Requirements.
 
(a)  If the Agent shall determine on any day that the weighted average FICO
score of all pledged Alt-A Loans is less than 690 and make a Redemption Call,
the Company shall immediately (by no later than the next Business Day after the
Agent’s request) redeem (either by making cash paydowns of outstanding Advances
or substituting higher quality Collateral) a sufficient number of lower FICO
score pledged Alt-A Loans as shall be required to correct such deficiency.
 
(b)   If the Agent shall determine on any day that the weighted average FICO
score of all pledged Second Lien Loans and HELOCs is less than 690 and make a
Redemption Call, the Company shall immediately (by no later than the next
Business Day after the Agent’s request) redeem (either by making cash paydowns
of outstanding Advances or substituting higher quality Collateral) a sufficient
number of lower FICO score pledged Second Lien Loans and HELOCS as shall be
required to correct such deficiency.
 

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(c)  If the Agent shall determine on any day that less than ninety-five percent
(95%) of the aggregate Principal Balances of all Pledged Loans — excluding Alt-A
Loans, Second Lien Loans, Repurchased Loans, Subprime Loans, Jumbo Loans and
Super Jumbo Loans — conform fully to all underwriting and other requirements for
purchase by either Fannie Mae or Freddie Mac, then by no later than five (5)
Business Days after the Agent’s request, the Company shall redeem (either by
making cash paydowns of outstanding Advances or substituting conforming
Collateral) a sufficient number of nonconforming Pledged Loans to correct such
deficiency.
 
6.5.  Mortgaging of Real Property Collateral. The Company hereby grants to the
Agent a Lien against, and hereby agrees to duly Pledge to the Agent by
executing, acknowledging sufficiently for recording and delivering to the Agent
or (where appropriate) to a trustee designated by the Agent, a recordable
mortgage, deed of trust or security deed (whichever form of real property
mortgage instrument is appropriate to the jurisdiction in which the real
property is located) — on the standard Fannie Mae/Freddie Mac form, modified
appropriately for the purpose, or in another form approved by the Agent — and in
substance approved by the Agent, to cover each lot, parcel, tract or leasehold
estate (as the case may be) of present or future real property owned by the
Company after foreclosure or conveyance in lieu of foreclosure of any Pledged
Loan (or any other Collateral that, while Pledged to the Agent, is or becomes
real property under the law of the U.S. jurisdiction where it is located), each
of which mortgage instruments shall describe the mortgagee or grantee as
“JPMorgan Chase Bank, N.A., as a Lender and as Agent for certain other Lenders”
and shall describe the Debt it secures substantially as follows:
 
All present and future debts and obligations of E-Loan, Inc. to JPMorgan Chase
Bank, N.A., as a Lender and as Agent for the other Lenders named therein, and to
such other Lenders, under or pursuant to the 1/05 Senior Secured Credit
Agreement dated as of January 4, 2005 by and among E-Loan, Inc., JPMorgan Chase
Bank, N.A. and others, the principal debt under which credit agreement has a
final stated maturity of January 3, 2006, as such credit agreement may have been
or may from time to time be supplemented, amended or restated; provided that the
principal debt hereby secured shall in no event exceed [state here the amount
that is equal to 130% of the value of the mortgaged real estate as shown in its
most recent Appraisal or Broker’s Price Opinion, or, for Second Lien Loans or
HELOCs only, as determined by the AVM].

While the Agent does not initially intend to record any of such mortgages, deeds
of trust or security deeds, the Agent may elect to record — upon prior written
notice to the Company, unless an Event of Default has occurred that the Agent
has not declared in writing to have been cured or waived, in which case no
written notice is necessary — any or all of them at any time or times, and all
costs of filing and recordation shall be paid for by the Company, either
directly or as reimbursement to the Agent, whichever the Agent shall elect.

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6.6.  Pledged Loans’ Collection and Servicing Rights. So long as no Event of
Default shall have occurred that the Agent has not declared in writing to have
been cured or waived, the Company shall be entitled to service the Pledged Loans
and to receive and collect directly — or cause to be serviced, received and
collected through a Servicer or Servicers under one or more Servicing Agreements
— all sums payable to the Company in respect of the Pledged Loans (excluding,
however sums arising from sales or other dispositions of Pledged Loans, which
Section 6.9 requires to be paid to the Agent for application as therein stated);
provided that the Company’s rights and obligations to so interim service, or to
cause to be so interim serviced, each Pledged Loan shall terminate on the
earlier of (i) the Maturity Date or (ii) one (1) month after the Effective Date
of this Agreement, although such one-month period shall be automatically
extended for sequential periods of one (1) month each unless the Agent, acting
in its sole discretion, gives written notice to the Company (at least five (5)
Business Days before the end of any such 1-month period unless Default has
occurred that has not been cured or an Event of Default has occurred that the
Agent has not declared in writing to have been cured or waived — no advance
notice shall be required if a Default or Event of Default shall have occurred
and be continuing) stating that such period will not be extended, in which event
the Company’s said interim servicing rights will automatically terminate upon
expiration of that 1-month period; and provided further that if any Default or
Event of Default shall occur at any time, the Company’s rights and obligations
to service the Pledged Loans shall terminate automatically and immediately
(unless and to the extent the Agent shall state otherwise by written notice to
the Company) without any notice or other action by the Agent or any Lender. Upon
any such termination, the Agent is hereby authorized and empowered to sell and
transfer such rights to service the Pledged Loans for such price and on such
terms and conditions as the Agent shall reasonably determine, and the Company
shall have no right to sell or attempt to sell or transfer such rights to
service the Pledged Loans. The Company shall perform all acts and take all
actions so that the Pledged Loans and all files and documents relating to the
Pledged Loans that are held by the Company, together with all escrow amounts
relating to the Pledged Loans, are delivered to the successor Servicer. To the
extent that the approval of any third party or any other insurer or guarantor is
required for any such sale or transfer, the Company will fully cooperate with
the Agent to obtain such approval. All amounts paid by any purchaser of such
rights to service the Pledged Loans shall be paid to the Agent for distribution
to the Lenders and application to the Loan in the same manner and order as
provided for funds received by the Agent pursuant to Section 11.4. The rights to
service the Pledged Loans have not been separated from the Pledged Loans and are
not subject to pledge or assignment to anyone other than the Agent.
 
6.7.  Rights After Occurrence of Event of Default. After the occurrence of any
Event of Default that the Agent has not declared in writing to have been cured
or waived, the Agent shall have the following rights (but no obligations):
 
(a)  in its discretion, to demand, sue for, collect or receive and receipt for
(in its own name, in the name of the Company or otherwise) any money or property
at any time payable or receivable on account of any of the Collateral, in
consideration of its transfer or in exchange for it;
 
(b)  to direct — and to take any and all other steps necessary to cause — any
Servicer of any of the Collateral to pay over directly to the Agent for the
account of the Company (instead of to the Company or any other Person) all sums
from time to time due to the Company and to take any and all other actions that
the Company or the Agent has the right to take under the Company’s contract with
such Servicer; and
 

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(c)  to request that the Company forthwith pay to the Agent at its principal
office all amounts thereafter received by the Company upon or in respect of any
of the Collateral, advising the Agent as to the sources of such funds, and if
the Agent does so request, then the Company shall diligently and continuously
thereafter comply with such request.
 
All amounts so received and collected by the Agent shall be paid over to the
Lenders for application to pay (i) fees owing under the Facilities Papers (pro
rata in the ratio that the fees then owed to each Lender bear to the fees then
owed to all Lenders), (ii) the reasonable costs and expenses incurred by the
Agent or the Lenders (pro rata in the ratio that the unreimbursed costs and
expenses incurred by each of them and then outstanding bears to the unreimbursed
costs and expenses incurred by all of them and then outstanding) in collecting
or enforcing the Senior Credit Notes and the other Facilities Papers, defending
against any claims made in respect of the Facilities Papers or any related
transactions, protecting or realizing on Collateral and (iii) accrued and unpaid
interest on and principal of the Senior Credit Notes (for interest, pro rata in
the ratio that the then-accrued and unpaid interest due on each Senior Credit
Note bears to the then-accrued and unpaid interest due on all Senior Credit
Notes, and for principal, pro rata in the ratio that the outstanding balance of
each Senior Credit Note bears to the outstanding balances of all Senior Credit
Notes).

6.8.  Sale and Agent’s Delivery of Collateral to Approved Investors. Unless an
Event of Default has occurred that the Agent has not waived in writing (in which
event the Agent’s consent to such shipping or delivery shall be required):
 
(a)  the Company may direct the Custodian to ship or deliver any Pledged Loan to
any Approved Investor; and
 
(b)  the Company may direct the Custodian to ship or deliver to any issuer of
MBS (including Ginnie Mae, Fannie Mae or Freddie Mac) any Pledged Loan(s) as all
or part of a pool from which MBS will be created that are covered by an MBS
Purchase Commitment issued by an Approved Investor, and the Agent’s security
interest in those Pledged Loans shall automatically terminate when the MBS are
created from such pool, although the Agent’s security interest granted by this
Agreement in and to — and the Company hereby specifically declares its intent
that Collateral covered by this Agreement includes — all of the Company’s
present and future (i) right, title and interest in and to the MBS so created
and (ii) rights to demand, have, receive and receipt for such MBS and their
proceeds, shall automatically attach when such Pledged Loans are so securitized
and the Agent’s security interest in them is thereby automatically terminated,
as aforesaid.
 
The Company may also request that the Custodian ship any Pledged Loan(s) to any
other investor.

6.9.  Collateral Sale Proceeds to be Paid to Agent.
 

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(a)  Until both (i) an amount equal to the Redemption Amount of the Pledged
Loans(s) being sold as a Whole Loan or securitized (or such lesser amount as
shall be required to cause the Borrowing Base without such Pledged Loans to at
least equal the Advances outstanding) has been paid to the Agent and (ii)
information sufficient to enable the Agent to reconcile the sums so paid to the
Pledged Loans so being securitized has been provided to the Agent, the Agent
shall have (x) a continuing first and prior security interest in such Pledged
Loan that is so being sold as a Whole Loan and (y) a first and prior security
interest in and control of all of the Company’s right, title and interest
(whenever acquired) in and to each MBS created from any pool of Mortgage Loans
that includes such Pledged Loan(s), and the Company shall take all steps
necessary to establish, perfect and maintain in the Agent such security interest
and its perfection, and control of such MBS.
 
(b)  When the sale is settled of any Pledged Loan sold as a Whole Loan, or of
any MBS created from a pool that includes any Pledged Loan, the Company shall
cause the investor purchasing such Whole Loan or MBS to pay the Company’s entire
net share of the purchase price therefor directly to the Agent, for application
as a mandatory prepayment on the Senior Credit Notes and as a repayment of
outstanding Advances. If the amount so paid to the Agent is at least equal to
the Redemption Amount for the Pledged Loan(s) so sold or securitized, then the
Agent will release the relevant Pledged Loan(s) or MBS from the Agent’s Lien
(whereupon such Pledged Loan or MBS will no longer be Pledged to the Agent), and
if no Default or Event of Default has occurred that the Agent has not declared
in writing to have been cured or waived, the Agent will also transfer from the
Note Payment Account to the Company’s designated account any excess of (x) the
purchase price so paid to the Agent for the Pledged Loan(s) so sold or
securitized over (y) the Redemption Amount for such Pledged Loan(s).
 
(c)  Pledged Loans Shipped for Securitization. Upon shipment or delivery of
Pledged Loans to be securitized and pending payment to the Agent of the
Redemption Amount therefor on the sale of the resulting MBS, the Company agrees
to take all steps necessary to cause the Agent to be identified as the nominal
owner of any MBS created from the pool of Mortgage Loans which includes such
Pledged Loans in the records of the Federal Reserve Bank or other institution
authorized by the issuer (Ginnie Mae, Fannie Mae, Freddie Mac or the securities
intermediary holding such MBS for the private issuer, as the case may be) to
maintain ownership records in respect of all such MBS, and to cause such
arrangements to remain in effect until the Collateral Value of such securitized
Mortgage Loans shall have been paid to the Agent (for deposit in the Note
Payment Account and distribution to the Lenders for application on the Loan.)
 
6.10.  Attorney in Fact Appointment. The Company hereby appoints the Agent as
its attorney-in-fact to take all such steps in its name and behalf as are
necessary or appropriate to (i) obtain and maintain control of such MBS, (ii)
establish, maintain or continue perfection of its security interests in such MBS
and/or (as the context requires), (iii) enforce, collect or otherwise realize
upon such interests and (iv) take any action and execute any instruments that
the Agent deems necessary or advisable to accomplish any of such purposes, and
such appointment shall be deemed a power coupled with an interest and shall be
irrevocable for so long as any of the Obligations shall be unpaid or any of the
Lenders shall have any outstanding commitment to lend or to extend any other
financial accommodations to or for the account of the Company.
 

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6.11.  Right of Redemption From Pledge. Provided no Event of Default has
occurred that the Agent has not declared in writing to have been cured or waived
(provided that the Agent may elect to allow redemption even if an uncured and
unwaived Event of Default has occurred if the Agent reasonably believes at that
time that doing so would be in the Lenders’ interest), the Company may from time
to time redeem one or more items of Collateral from pledge by either:
 
(a)  paying, or causing to be paid, to the Agent for deposit in Note Payment
Account, for application to the outstanding balance of Advances and Pro Rata
distribution to the Lenders for their application to prepayment of the principal
balances of the Senior Credit Notes, including the Swing Line Note if then
outstanding, the Redemption Amount for the item(s) of Collateral to be released;
or
 
(b)  delivering substitute Collateral that both (i) is Eligible Collateral and
(ii) will, when included with the existing Collateral, increase the Borrowing
Base to a value at least equal to the aggregate outstanding Borrowings;
 
after which the Agent shall release the redeemed Collateral to the Company or
its designee promptly upon written request made by the Company and at its cost,
whereupon such redeemed Collateral will no longer be Pledged to the Agent or
included in the Borrowing Base and the Company shall promptly receipt — or shall
cause its designee to promptly receipt — for such released Collateral in writing
to the Agent. Further, the Agent will execute UCC partial release(s) of such
redeemed Collateral — or otherwise appropriately confirm such release in writing
— prepared at the Company’s expense if, when and in such form as the Company may
reasonably request.

6.12.  Return of Collateral at End of Commitment. If (i) the Lenders’
Commitments to lend shall have expired or been terminated, and (ii) all
Advances, interest or other amounts evidenced by the Senior Credit Notes or
owing to any of the Lenders or the Agent under this Agreement, the Senior Credit
Notes and the other Facilities Papers shall be fully paid and satisfied, then
the Agent shall release the Collateral to the Company or its designee promptly
upon written request made by the Company and at its cost, whereupon such
released Collateral shall no longer be Pledged to the Agent and the Company
shall promptly receipt — or shall cause its designee to promptly receipt — for
such released Collateral in writing to the Agent. 
 
6.13.  Acceptance or Shipping Per Instructions of Returned Collateral is
Acquittance. Acceptance by the Company of any Collateral delivered to it
pursuant to any provision of this Agreement (whether or not the recipient issues
a receipt for it) or shipping by the Agent of Collateral in substantial
compliance with shipping instructions given by the Company or its designee shall
be a complete and full acquittance for the Collateral so delivered or shipped,
and the Agent shall thereby be released and discharged from any and all
liability or responsibility for it arising then or thereafter (except liability
for the Agent’s own gross negligence or willful misconduct.)
 

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7  CONDITIONS PRECEDENT
 
7.1.  Initial Advance. The obligations of the Lenders to fund their respective
Funding Shares of the initial Advance under this Agreement are subject to the
Company’s fulfillment of the following conditions precedent:
 
(a)  the Agent shall have received (or be satisfied that it will receive by such
deadline as the Agent shall specify) the following, all of which must be
satisfactory in form and content to the Agent in its sole discretion:
 
(1)  this Agreement duly executed by all parties;
 
(2)  the Senior Credit Notes, each duly executed by the Company;
 
(3)  UCC financing statements for the Collateral covered by this Agreement, each
duly authorized by the Company;
 
(4)  current UCC search reports of a UCC filings search in the office of the
Secretary of State of the States of Delaware and California;
 
(5)  the Custody Agreement duly executed by the Company and JPMorgan as
Custodian;
 
(6)  copies of the Company’s (i) certificate of incorporation certified by the
Secretary of State of the State of Delaware and (ii) bylaws and all amendments
certified by such its corporate secretary or assistant secretary, as well as any
other information required by Section 326 of the USA Patriot Act or necessary
for the Agent or any Lender to verify the identity of the Company as required by
Section 326 of the USA Patriot Act in accordance with the requirements
summarized in the notice given in Section 15.5;
 
(7)  If the Company has already begun registering Pledged Loans with MERS, the
Company shall have delivered to the Agent the Electronic Tracking Agreement (as
defined in the Custody Agreement) duly executed by the Company, Mortgage
Electronic Registration Systems, Inc., MERSCorp., Inc. and the Custodian.
 
(8)  certificate of existence or authority and good standing for the Company
issued by the Secretary of State of the States of Delaware and California;
 
(9)  original resolutions of the Company’s board of directors, certified as of
the date of the initial Advance by the Company’s corporate secretary,
authorizing the execution, delivery and performance by the Company of this
Agreement, the Senior Credit Notes, the Custody Agreement and all other
Facilities Papers to be delivered by the Company pursuant to this Agreement;
 
(10)  a certificate of the Company’s corporate secretary as to (i) the
incumbency of the officers of the Company executing this Agreement, the Senior
Credit Notes, the Custody Agreement, each applicable Request for Borrowing and
all other Facilities Papers executed or to be executed by or on behalf of the
Company and (ii) the authenticity of their signatures — and specimens of their
signatures shall be included in such certificate or set forth on an exhibit
attached to it — (the Agent and the Lenders shall be entitled to rely on that
certificate until the Company has furnished a new certificate to the Agent, and
certifying that attached to such certificate are true and correct copies of all
amendments to the Company’s certificate of incorporation and bylaws since their
inception);
 

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(11)  an Officer’s Certificate for the Company dated the date of the initial
Advance and certifying truthfully that, after giving effect to that Advance, no
Default or Event of Default will exist under this Agreement and that there has
been no material adverse change since the Statement Date in any of the Central
Elements in respect of the Company or any of its Subsidiaries;
 
(12)  copies of an errors and omissions insurance policy or mortgage impairment
insurance policy and blanket bond coverage policy, or certificates in lieu of
policies, providing such insurance coverage as is customary for members of the
Company’s industry, all in form and content reasonably satisfactory to the
Agent;
 
(13)  a favorable written opinion of counsel to the Company dated on or before
the date of the initial Advance, addressed to the Lenders and the Agent and in
form and substance reasonably satisfactory to the Agent and its legal counsel (a
form containing opinions required to be included therein are set forth in
Exhibits G-1 and G-2);
 
(14)  payment to the Agent of the Facility Fee (for deposit in the Note Payment
Account and Pro Rata distribution to the Lenders), the Custodian’s Fee and all
other fees and expenses (including the disbursements and reasonable fees of the
Agent’s attorneys, subject to the limitation specified in Section 12(a)) of the
Agent accrued and billed for to the date of the Company’s execution and delivery
of this Agreement; and
 
(15)  a copy of the Company’s current underwriting guidelines, including its
guidelines relating to the use of AVMs.
 
(b)  All directors and officers of the Company, all shareholders of the Company
and all Affiliates of the Company or any of its Subsidiaries, to whom or which
the Company shall be indebted either for borrowed money or for any other
obligation of Fifty Thousand Dollars ($50,000) or more as of the date of this
Agreement, excluding salary, bonus or other compensation obligations, shall have
caused such Debt to be Qualified Subordinated Debt, as defined in this
Agreement, by executing and causing to be delivered to the Agent a Subordination
Agreement and taking all other steps, if any, required to cause such Debt to be
Qualified Subordinated Debt, and the corporate secretary of the Company shall
have certified each such Subordination Agreement executed to satisfy the
requirements of this Section 7.1(b) to be true, complete and in full force and
effect as of the date of the Advance.
 
7.2.  Each Advance. The obligations of the Lenders to fund their respective
Funding Shares of the initial Advance and each subsequent Advance under this
Agreement are also subject to the satisfaction, in the sole discretion of the
Agent, as of the date of each such Advance, of the following additional
conditions precedent:
 

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(a)  The Company shall have delivered to the Agent a Request for Borrowing and,
if the Borrowing Base is insufficient to support all or part of the requested
Borrowing, the Company shall have delivered (i) to the Agent and the Custodian a
Submission List and (ii) (except for Wet Warehouse Advances) to the Custodian
the Basic Papers, for any new Collateral required to cause the Borrowing Base to
at least equal the outstanding Borrowings after giving effect to the requested
Borrowing.
 
(b)  Unless the requested Advance is comprised only of a Wet Warehousing
Advance, the Custodian shall have issued its Custodian’s Certification (as
defined in the Custody Agreement) relating to the Collateral currently in the
Borrowing Base (and the Agent agrees not to unreasonably withhold or delay
issuing any such Custodian’s Certification).
 
(c)  If the Company has begun registering Pledged Loans with MERS, the Company
shall have delivered to the Agent the Electronic Tracking Agreement (as defined
in the Custody Agreement) duly executed by the Company, Mortgage Electronic
Registration Systems, Inc., MERSCorp., Inc. and the Custodian.
 
(d)  The Agent shall have received evidence reasonably satisfactory to it (i) as
to the due filing and recording in all appropriate offices of all financing
statements, (ii) if there is any Collateral that is of a type that requires the
Agent’s interest to be noted by book entry, that such book entry has been duly
made and (iii) if there is any Collateral that is “investment property” under
the UCC of the State of New York or other applicable Law, that such instruments
as are necessary to give the Agent “control” of such Collateral have been duly
executed by the Company and the relevant securities intermediary.
 
(e)  The representations and warranties of the Company contained in Section
8 shall be true and correct in all material respects as if made on and as of the
date of each Advance unless specifically stated to relate to an earlier date.
 
(f)  The Company shall have performed all agreements to be performed by it under
this Agreement, the Custody Agreement and all other Facilities Papers, and after
giving effect to the requested Advance, no Default or Event of Default will
exist under this Agreement or any of the other Facilities Papers.
 
(g)  The Company shall not have incurred any material liabilities, direct or
contingent, other than in the ordinary course of its business, and no
liabilities (whether or not in the ordinary course of business) that adversely
and materially affect any of the Central Elements since the dates of the
Company’s Financial Statements most recently theretofore delivered to the Agent
and distributed to the Lenders.
 
(h)  The Agent shall have received from counsel for the Company, if requested by
the Agent, an updated favorable opinion or opinions, in form and substance
satisfactory to the Agent addressed to the Lenders and/or the Agent (whichever
the Agent shall specify) and dated as of the date of such Advance, covering and
updating such matters that were originally addressed in the opinion issued
pursuant to Section 7.1(a)(13) as the Agent may reasonably request.
 

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(i)  The Company shall have paid the Facility Fee and Agent’s Fee (if any) then
due and payable in accordance with Sections 5.7 and 5.8 and the Custodian’s fee
pursuant to the Custody Agreement.
 
(j)  The Agent shall have received such other documents, if any, as shall be
specified by the Agent.
 
8  REPRESENTATIONS
 
The Company hereby represents and warrants to the Agent and the Lenders both (a)
as of the date of this Agreement and (b) except as to those specified to relate
only to a specific date, again as of the date of each Request for Borrowing,
that:

8.1.  Organization; Good Standing; Subsidiaries. The Company is a corporation
duly formed, validly existing and in good standing under the laws of the State
of Delaware. The Company has furnished to the Agent a true and complete copy of
its charter or articles of incorporation and its bylaws as in effect as of the
date of this Agreement, including all amendments thereto, and agrees to furnish
to the Agent a true and complete copy of any amendment adopted after the
Effective Date promptly after it is adopted. The Company warrants and represents
that the Company and its Subsidiaries each has the full legal power and
authority to own its properties and to carry on its business as currently
conducted and each is duly qualified to do business as a foreign corporation and
in good standing in each jurisdiction in which the ownership of its property or
the transaction of its business makes such qualification necessary, except in
jurisdictions, if any, where a failure to be qualified, licensed or in good
standing has no material adverse effect on any of the Central Elements in
respect of the Company or any of its Subsidiaries. The Company does not have any
Subsidiaries except as set forth on Exhibit D or as have been subsequently
disclosed by the Company to the Agent in writing. Exhibit D states the name of
each such Subsidiary as of the Effective Date, place of incorporation, each
state in which it is qualified as a foreign corporation and the percentage
ownership of the capital stock of each such Subsidiary by the Company.
 
8.2.  Authorization and Enforceability. The Company has the power and authority
to execute, deliver and perform this Agreement, the Senior Credit Notes, the
Custody Agreement and all other Facilities Papers to which it is a party or in
which it joins or has joined. The execution, delivery and performance by the
Company of this Agreement, the Senior Credit Notes, the Custody Agreement and
all other Facilities Papers to which it is a party and the borrowing of the Loan
have each been duly and validly authorized by all necessary corporate action on
the part of the Company (none of which has been modified or rescinded, and all
of which are in full force and effect) and do not and will not (i) conflict with
or violate any Legal Requirement, (ii) conflict with or violate the articles of
incorporation or bylaws of the Company, (iii) conflict with or result in a
breach of or constitute a default under any agreement, instrument or indenture
binding on the Company or (iv) require any consent under any such agreement,
instrument or indenture, where the conflict, breach, default or nonconsent could
reasonably be expected to have a material adverse effect on any of the Central
Elements in respect of the Company or any of its Subsidiaries, or result in the
creation of any Lien upon any property or assets of the Company except the Lien
securing the Obligations, or result in or permit the acceleration of any debt of
the Company pursuant to any agreement, instrument or indenture to which the
Company is a party or by which the Company or its property may be bound or
affected. This Agreement, the Senior Credit Notes, the Custody Agreement and all
other Facilities Papers constitute the legal, valid, and (except as to those
Facilities Papers, such as financing statements, that are not contracts) binding
obligations of the Company enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency or other such laws affecting
the enforcement of creditors’ rights generally and by equitable principles
relating to or affecting enforcement of creditors' rights generally or relief of
debtors generally.
 

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8.3.  Approvals. Neither the execution and delivery of this Agreement, the
Senior Credit Notes, the Custody Agreement and all other Facilities Papers nor
the performance of the Company’s obligations under such Facilities Papers
requires any license, consent, approval or other action of any state or federal
agency or governmental or regulatory authority other than (i) those that have
been obtained or will be obtained by the time required and which remain in full
force and effect, (ii) those for which the Company’s failure to obtain them will
not have a material adverse effect on any of the Central Elements in respect of
the Company or any of its Subsidiaries and (iii) the filing of the Security
Instruments.
 
8.4.  Financial Condition. The balance sheet of the Company (and, to the extent
applicable, its Subsidiaries, on a consolidated basis) and the related
statements of income, changes in stockholders’ equity and cash flows (“Financial
Statements”) for the fiscal year ended on the Statement Date (the “Statement
Date Financial Statements”) heretofore furnished to each of the Lenders, fairly
present the financial condition of the Company (and its consolidated
Subsidiaries) as of the Statement Date and the results of their operations for
the fiscal period ended on the Statement Date. On the Statement Date, the
Company did not have either any known material liabilities — direct or indirect,
fixed or contingent, matured or unmatured — other than the contingent
liabilities (if any) set forth on Schedule 8.4 and contingent liability on
endorsements of negotiable instruments for deposit or collection in the ordinary
course of business, or any known material liabilities for sales, long-term
leases or unusual forward or long-term commitments, which are not disclosed by
the Statement Date Financial Statements or reserved against in them or that have
not been otherwise disclosed to the Agent in writing. The Company is currently
Solvent, and since the Statement Date, (i) there has been no material adverse
change in any of the Central Elements related to the Company (and its
Subsidiaries), nor is the Company aware of any state of facts which (with or
without notice, the lapse of time or both) would or could result in any such
material adverse change, and (ii) there have been no material unrealized or
anticipated losses from any loans, advances or other commitments of the Company,
except for the material adverse changes and losses (if any) that are summarized
in Schedule 8.4.
 
8.5.  Litigation. Except as disclosed on Schedule 8.5 or except as disclosed in
the Statement Date Financial Statement or the most recent Financial Statements
furnished to the Agent (whichever is more current), there are no actions,
claims, suits or proceedings pending, or to the knowledge of the Company,
threatened or reasonably anticipated against or affecting the Company or any of
its Subsidiaries in any court, before any other Governmental Authority or before
any arbitrator or in any other dispute resolution forum which, if adversely
determined, could reasonably be expected to result in a material adverse effect
on any of the Central Elements in respect of the Company or any of its
Subsidiaries.
 

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8.6.  Licensing. The Company and the Servicers (if any) of its Mortgage Loans
are duly registered as mortgage lenders and servicers 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 Legal Requirement, except where the
failure to register could not reasonably be expected to result in a material
adverse effect on any of the Central Elements in respect of the Company or any
of its Subsidiaries.
 
8.7.  Hedge Investments in Mortgage Loans. If at any time during the term of
this Agreement, the Company is hedging its investments in Mortgage Loans Pledged
to the Agent, the Company will prepare its periodic hedge position reports in
form, substance and detail reasonably satisfactory to the Agent and provide a
copy of each to the Agent and each Lender when issued, and the Company will
deliver to the Agent within ten (10) Business Days after the Company’s receipt
thereof copies of the Hedge Agreements acquired by the Company and held from
time to time to so hedge its investments in Mortgage Loans Pledged to the Agent
(the Company’s right, title and interest in and to all existing and future Hedge
Agreements being part of the Collateral that the Company has Pledged to the
Agent by operation of Section 6.1(a)(4).)
 
8.8.  Compliance with Applicable Laws. Neither the Company nor any of its
Subsidiaries is in violation of any provision of any law, or any judgment,
award, rule, regulation, order, decree, writ or injunction of any court, other
Governmental Authority or public regulatory body that could reasonably be
expected to have a material adverse effect on any of the Central Elements in
respect of the Company or any of its Subsidiaries.
 
8.9.  Regulation U. The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no part of the proceeds of any
Borrowings directly or indirectly made available to or received by the Company
or for its account will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock or for the purpose of
reducing or retiring any debt which was originally incurred to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock or which would constitute this transaction a “purpose
credit” within the meaning of Regulation U, as now or hereafter in effect.
 
8.10.  Investment Company Act. The Company is not subject to the rules governing
an “investment company” within the meaning of the Investment Company Act of
1940, as amended.
 
8.11.  Payment of Taxes. The Company has filed (or caused to be filed) all
required federal, state and local income, excise, property and other tax returns
with respect to its and its Subsidiaries’ operations, all of such returns are
true and correct and the Company has paid or caused to be paid — or is
protesting by appropriate proceedings diligently pursued and has established
adequate reserves therefor — all taxes which are due and owing under applicable
law or as shown on any assessment to the extent such taxes have become due,
including all applicable FICA payments and withholding taxes. The amounts
reserved as a liability for income taxes and other taxes payable in the
financial statements heretofore furnished to the Agent and the Lenders are
sufficient for payment of all unpaid federal, state and local income, excise,
property and other taxes — whether or not disputed — of the Company and its
Subsidiaries accrued for or applicable to the period and on the dates of such
financial statements and all prior years and periods, and for which the Company
and its Subsidiaries may be liable in their own right or as transferee of the
assets of other Person or as successor to any other Person.
 

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8.12.  Agreements. Neither the Company nor any of its Subsidiaries is a party to
any agreement, instrument or indenture or subject to any restriction materially
and adversely affecting any of the Central Elements except as disclosed in (i)
the Statement Date Financial Statements, (ii) Schedule 8.4 or (iii) the more
current Financial Statements, if any, that the Company has furnished to the
Agent after the Effective Date. Neither the Company nor any such Subsidiary is
in default in the performance, observance or fulfillment of any of its
obligations, covenants or conditions contained in any agreement, instrument or
indenture that could reasonably be expected to have a material adverse effect on
any of the Central Elements in respect of the Company or any of its
Subsidiaries. No holder of the Company’s or any such Subsidiary’s debt or other
obligations has given notice of any asserted default that could have a material
adverse effect on any of the Central Elements in respect of the Company or any
of its Subsidiaries. No liquidation or dissolution of the Company is pending or,
to the Company’s knowledge, threatened and no liquidation or dissolution of any
Subsidiary is pending or threatened that could have a material adverse effect on
any of the Central Elements in respect of the Company or any of its
Subsidiaries. No receivership, insolvency, bankruptcy, reorganiza-tion or other
similar proceedings relative to the Company or any of its properties is pending,
or to the Company’s knowledge, threatened. No receivership, insolvency,
bankruptcy, reorganiza-tion or other similar proceedings relative to any
Subsidiary of the Company or any of its properties is pending, or to the
Company’s knowledge, threatened that could have a material adverse effect on any
of the Central Elements in respect of the Company or any of its Subsidiaries.
 
8.13.  Title to Properties. The Company 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 Statement Date Financial
Statements or in the more current Financial Statements (if any) most recently
furnished to the Agent after the Effective Date, 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 for (i) the lien of current
(nondelinquent) real and personal property taxes and assessments, (ii)
covenants, conditions and restrictions, rights of way, easements and other
matters to which like properties are commonly subject that do not materially
interfere with the use of the property as it is currently being used and (iii)
such other Liens, if any, as are disclosed in such Financial Statements and
Permitted Encumbrances.
 
8.14.  The Company’s Address. The Company’s chief executive office and principal
place of business are at 6230 Stoneridge Mall Road, Pleasanton, California 94588
or at such other address as shall have been set forth in a written notice to the
Agent given subsequent to the Effective Date and at least ten (10) Business Days
before such notice’s effective date.
 
8.15.  ERISA. The Company does not maintain any Plans except the Plans listed on
Schedule 8.15 and agrees to notify the Agent in advance of forming any Plans.
The Plans listed on Schedule 8.15 and all other Company employee welfare
benefits plans (as defined under Section 3(1) of ERISA) are in substantial
compliance with all applicable laws (including ERISA). The Company is not an
employer under any Multiemployer Plan or any other Plan subject to Title IV of
ERISA. 
 

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8.16.  Special Representations Concerning Collateral. As of the date of this
Agreement and as of the date of each Request for Borrowing, that:
 
(a)  The Company is the sole legal and equitable owner (except in the case of
MERS Designated Loans, as to which MERS, as nominee for the Company and its
successors and assigns, is the record owner), free and clear of all Liens other
than Permitted Encumbrances, of all Collateral Pledged to the Agent by the
Company.
 
(b)  All Collateral, including all pledged Wet Loans, has been duly authorized
and validly issued.
 
(c)  Each item of Collateral is genuine and what it purports to be.
 
(d)  All of the Collateral, individually and collectively, Pledged to the Agent
by the Company complies with all of the requirements of this Agreement and the
Custody Agreement and is genuine and what it purports to be.
 
(e)  All information concerning each item or grouping of Collateral listed in
any Submission List or in a Warehouse Transmission File sent to the Agent or the
Custodian was, is and/or shall be (as applicable) true and complete in all
material respects as of the date of such Submission List or Warehouse
Transmission File.
 
(f)  The Company is in compliance with all Legal Requirements relating to each
item of Collateral.
 
(g)  All Collateral, including all pledged Wet Loans, has been duly (i)
originally issued, or endorsed or assigned, to the Company and (ii) endorsed or
assigned by the Company in blank — endorsement in blank is not required when
MERS is designated in the Mortgage as the original mortgagee or the nominee of
the original mortgagee, its successors and assigns — and delivered (or in the
case of Wet Loans, are in the process of being delivered) to the Custodian or
endorsed in a manner acceptable to the Agent.
 
(h)  All Basic Papers for each item of Collateral (except for Wet Loans) will be
transmitted to the Custodian with the Submission List with which it is
submitted.
 
(i)  Each assignment to the Agent of the Lien securing any Collateral will be in
proper and sufficient form for recording in the appropriate government office in
the U.S. jurisdiction where the related Mortgaged Premises are located (no such
assignment is required for any Mortgage that has been originated in the name of
MERS and registered under the MERS® system.) Upon and after delivery to the
Agent of the Mortgage Note evidencing the particular item of Collateral, the
Agent on behalf of the Lenders will have a duly perfected first priority
possessory security interest in such Collateral and for so long as the Agent,
the Custodian or another bailee for the Agent retains possession of such note,
or takes such other action as is necessary for it to have and maintain a
perfected security interest in such note under the UCC, the Agent will have a
duly perfected first priority possessory security interest in such Collateral.
 

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(j)  The Company has the full right, power and authority to pledge the
Collateral Pledged to the Agent by the Company under this Agreement or pursuant
to it, and such Collateral may be further assigned without any requirement for
the consent of any other party to the Collateral.
 
 
(k)  The Lien on the real estate described in, or referred to as covered by,
each Pledged Loan is a first priority Lien (or, the case of Second Lien Loans or
HELOCs, a Lien second in priority to one senior Mortgage), subject only to the
Permitted Encumbrances.
 
(l)  All improvements that were considered in determining the appraised value of
the Mortgaged Premises securing each Pledged Loan lay wholly within the
boundaries and building restriction lines of such Mortgaged Premises, no
improvements on adjoining properties encroach upon such Mortgaged Premises and
no improvement located on or that is a part of such Mortgaged Premises is in
violation of any applicable zoning law or regulation.
 
(m)  Unless it is a Second Lien Loan for which the Company’s underwriting
guidelines require only a property report that only lists the senior Lien
mortgage, the Pledged Loan is covered by an ALTA mortgage title insurance policy
of such other form of title insurance as is acceptable to Fannie Mae or Freddie
Mac, issued by and constituting the valid and binding obligation of a title
insurer that is (i) generally acceptable to prudent mortgage lenders who
regularly purchase Mortgage Loans from the Company comparable to the subject
Mortgage Loan, and (ii) is qualified to do business in the jurisdiction where
the Mortgaged Premises are located, insuring the holder of the subject Mortgage
Loan as to the first priority of the Lien of the Mortgage on the related
Mortgaged Premises, in an amount equal to the original principal amount of the
subject Mortgage Loan. As to Pledged Loans other than such Second Lien Loans for
which the Company’s underwriting guidelines require only a property report, the
Company is the sole named insured of such mortgage title insurance policy, the
pledge to the Agent of the Company’s interest in such policy does not require
the consent of or notice to the insurer (or such consent has been obtained or
notice given), and such policy is and will be in full force and effect and inure
to the benefit of the Agent (as agent and representative of the Lenders) as and
when such Pledged Loan is Pledged to the Agent. No claims have been made under
any such policy of title insurance insuring a Pledged Loan (other than a Second
Lien Loan for which the Company’s underwriting guidelines require only a
property report), and no prior holder of the Pledged Loan, including the
Company, has done, by act or omission, anything that would impair the coverage
of such policy.
 
(n)  The Mortgaged Premises securing such Pledged Loan are capable of being
lawfully occupied under applicable Laws, all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of such Mortgaged Premises and, with respect to the use and occupancy of the
same, including certificates of occupancy and fire underwriting certificates,
have been made or obtained for the appropriate Governmental Authority.
 

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(o)  Each Pledged Loan that is a Prime Loan or an Alt-A Loan and has a
Cumulative Loan-to-Value Ratio greater than eighty percent (80%) is either
guaranteed by VA or insured by FHA or private mortgage insurance.
 
(p)  All taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents that have previously
become due have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed but is not yet due. The Company has not advanced funds, or
induced, solicited or knowingly received any advance of funds by any Person
other than the related Customer, directly or indirectly, for the payment of any
amount required under the related Loan Papers, except for interest to accrue
from the date of the Pledged Loan or the date of disbursement of its proceeds
(whichever is greater) to the day that precedes by a month the due date of such
Pledged Loan’s first installment of principal and interest.
 
(q)  The Company has no knowledge of any circumstances or conditions with
respect to the Mortgage, the Mortgaged Premises or the Customer in respect of
any Pledged Loan (other than the Customer’s credit standing) that can reasonably
be expected to cause private institutional investors that regularly invest in
the Company’s Mortgage Loans similar to such Pledged Loan to regard such Pledged
Loan as an unacceptable investment or adversely affect the value or
marketability of the Pledged Loan to other similar institutional investors.
 
(r)  Each Pledged Loan’s Mortgage contains an enforceable provision for
acceleration of the maturity of the unpaid principal balance thereof in the
event that the Mortgaged Premises are sold or transferred without the prior
written consent of the holder thereof.
 
(s)  No Pledged Loan contains provisions pursuant to which monthly payments are
paid in whole or in part with funds deposited in any separate account
established by the Company, the Customer or anyone on behalf of the Customer, or
paid by any source other than the Customer (or, for relocation Mortgage Loans,
the Customer’s employer), nor any other similar provisions currently in effect
that effectively constitute a “buydown” provision.
 
(t)  No Pledged Loan is a graduated payment Mortgage Loan or has a shared
appreciation or other contingent interest feature.
 
(u)  The Company’s acquisition, disposition and collection practices with
respect to Single-family Mortgage Loans are and have been in all material
respects in accordance with industry custom and practice, and in all respects
legal and proper.
 
(v)  If an escrow of funds has been established for a Pledged Loan, it is not
prohibited by applicable Law, all escrow deposits and escrow payments have been
collected in full compliance with applicable state and federal Law and are in
the possession of the Company or have been applied to pay their proper and
intended purposes, no escrow deposits or escrow payments or other charges or
payments due in respect of such Pledged Loan have been capitalized under its
Mortgage Note or Mortgage and no deficiencies exist in connection therewith for
which customary arrangements for repayment have not been made.
 

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(w)  All interest rate adjustments in respect of each Pledged Loan have been
made in strict compliance with applicable Law and the terms of the related
Mortgage Note, and any interest required to be paid pursuant to applicable Law
has been properly paid and credited.
 
(x)  No Customer under any Pledged Loan has notified the Company, and the
Company has no knowledge, of any relief requested or allowed to the Customer
under the Servicemembers’ Civil Relief Act of 2003.
 
(y)  Based on customary residential mortgage industry practices and to the
knowledge of the Company, the Mortgaged Property securing each Pledged Loan is
free from any and all toxic and hazardous substances and there exists no
violation of any applicable environmental Law.
 
(z)  No Pledged Loan was selected as Collateral on any basis that was intended
to have a material adverse effect on the Agent or any Lender.
 
(aa)  No Pledged Loan is subject to a bankruptcy plan.
 
(bb)  All Pledged Loans and all related papers included in the Collateral
(including all pledged Wet Loans):
 
(1)  were originated by the Company acting in the ordinary course of its
business;
 
(2)  have been made in compliance with all applicable requirements of the Real
Estate Settlement Procedures Act, the Equal Credit Opportunity Act, the federal
Truth-In-Lending Act, the Fair Credit Billing Act, the Fair Credit Reporting
Act, related statutes and regulations and all applicable Legal Requirements
under usury, truth-in-lending, equal credit opportunity and all other Laws;
 
(3)  are the legal, valid and binding obligations of the respective Customers
who made them and are valid and enforceable in accordance with their terms,
without any claim, right of rescission, counterclaim, defense or offset,
including any claim or defense of usury, except as such enforceability may be
limited by bankruptcy and other laws affecting the rights of creditors generally
and by principles of equity, excepting rights that, by applicable law, cannot be
waived, and neither the operation of any of their respective contract terms nor
the exercise of any right thereunder will render any of them partly or wholly
unenforceable or subject to any such claim, right of rescission, counterclaim,
defense or offset, and no such claim, right of rescission, counterclaim, defense
or setoff has been asserted;
 
(4)  have not been modified or amended and none of their requirements has been
waived, except as expressly and completely reflected in the applicable Loan
Papers furnished to the Custodian;
 
(5)  to the best of the Company’s knowledge, respectively have fair market
values equal to or greater than the collateral values respectively attributed or
allocated to them under this Agreement;
 

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(6)  comply with the terms of this Agreement and the Custody Agreement;
 
(7)  were not originated in, and are not subject to the laws of, any
jurisdiction whose laws (i) make unlawful their pledge to the Agent pursuant to
this Agreement, or their ownership by the Agent or the Lenders following
foreclosure of the Agent’s Lien, or conveyance in lieu of foreclosure after any
Event of Default or (ii) render the Pledged Loans unenforceable;
 
(8)  are in full force and effect and have not been satisfied or subordinated in
whole or in part or rescinded, and the residential real property securing the
Pledged Loan has not been partially or completely released from the Lien of the
Pledged Loan;
 
(9)  evidence and are each secured by a valid first Lien (or, for Second Lien
Loans, by a valid Lien second in priority to the Lien of only one senior
Mortgage Loan) in favor of the Company on real property securing the amount owed
by the Customer(s) under the related Mortgage, subject only to Permitted
Encumbrances, that to the best of the Company’s knowledge has fair market value
equal to or greater than the collateral value attributed or allocated under this
Agreement to the Pledged Loan secured thereby, the Company has pledged and
collaterally assigned all of the Company’s right, title and interest in such
Pledged Loan and related Mortgage, and the Agent has a valid and perfected and
enforceable first priority security interest in such Pledged Loan;
 
(10)  are each executed in full accordance with all requirements of the
applicable Laws of the jurisdiction in which the Mortgaged Premises are located,
with the Mortgage for each being (i) duly acknowledged and sealed by such
official and in such manner and form as to be both recordable and effective
under such Laws to give such constructive notice to all Persons as shall be
necessary to establish and continue the Lien of such Mortgage with the priority
that the Company represents it has to the Agent and (ii) so recorded, and with
the Mortgage Note, Mortgage and all related papers executed with the genuine
original signature(s) of the Customer(s) obligated on such Pledged Loan, and all
parties to each such Pledged Loan had full legal capacity to execute it;
 
(11)   were originated by the Company in the ordinary course of its business,
without knowledge that the Pledged Loan was subject to any security interest
other than the Lien of the Agent, as agent and representative of the Lenders;
the Company has not sold, assigned or pledged any of such Pledged Loans to any
person (excluding assignments to MERS as nominee for the Company, its successors
and assigns) and the Company has good and marketable title to them free and
clear of any encumbrance, equity, loan, pledge, charge, claim or security
interest other than the Agent’s Lien, and is the sole owner thereof with full
right to pledge them to the Agent;
 
(12)  are secured by Single-family residential property;
 
(13)  are the subject of a Current Appraisal or a Current Broker’s Price Opinion
(or, for Second Lien Loans and HELOCs, an AVM), and the Company has in its
possession and will make available to the Custodian on request evidence of such
value and how it was determined;
 

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(14)  are not subject to the Home Ownership and Equity Protection Act of 1994;
 
(cc)  As to each Pledged Loan and its Loan Papers:
 
(1)  the Company has not waived any default, breach, violation or event
permitting acceleration except payment delinquencies that have not been
outstanding long enough to cause the Pledged Loan to be In Default;
 
(2)  the related Mortgaged Premises are, to the best of the Company’s knowledge,
free of material damage and in good repair and the Company has no actual
knowledge that any such Mortgaged Premises have suffered material fire, storm or
other casualty damage that is not covered by a Hazard Insurance Policy;
 
(3)  to the best of the Company’s knowledge, no liens or claims have been filed
for work, labor or materials affecting the related Mortgaged Premises which are
undischarged (whether prior, equal or subordinate to the Lien of the Pledged
Loan);
 
(4)  the Loan Papers contain customary and enforceable provisions so as to
render the rights and remedies of their holder adequate for the realization
against the collateral for the Pledged Loan of the benefits of the security
intended to be provided by it;
 
(5)  there is only one original executed Mortgage Note, and (except in the case
of Wet Loans) that original has been delivered to the Custodian;
 
(6)  none of its makers or mortgagors is an Affiliate of the Company or any of
its or its Subsidiaries’ directors or officers;
 
(dd)  Each Mortgage is a Lien on the premises and property described in it
having the priority represented to the Agent, and the description of the
Mortgaged Premises in each Mortgage is legally adequate and each item of
Collateral has been fully advanced in its face amount.
 
(ee)  No default, and no event that with notice or lapse of time or both would
become a default, has occurred and is continuing under any item of Collateral
except as to which the Company has given notice to the Agent (by reporting
Pledged Loans that are Delinquent Mortgage Loans), and if any such default or
event has occurred, it has not continued for more than sixty (60) days, reckoned
and counted from the most recent month end (and, if and when any such default or
event in respect of any such Delinquent Mortgage Loans continues for more than
sixty (60) days, the Company will promptly report that fact to the Agent.)
 
(ff)  All Hazard Insurance Policies covering the premises encumbered by each
item of Collateral:
 

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(1)  name the Company or its Servicer as the insured under a standard mortgagee
clause;
 
(2)  are in full force and effect;
 
(3)  are in the amount of the full insurable value of the Mortgaged Premises on
a replacement cost basis or the unpaid principal amount of the related Pledged
Loan, whichever is less;
 
(4)  are the valid and binding obligation of the insurer;
 
(5)  have all premiums due thereon paid;
 
(6)  are required by the related Mortgage to be maintained on the Mortgaged
Premises at the Customer’s cost and expense, failing which the holder of the
Mortgage is authorized by the express terms of such Mortgage to obtain and
maintain such insurance at the Customer’s cost and expense and to obtain
reimbursement of such cost from the Customer;
 
(7)  afford insurance against fire and such other risks as are usually insured
against in the broad form of extended coverage insurance from time to time
available, as well as insurance against flood hazards if required by the terms
of any applicable private mortgage insurance or by any applicable Legal
Requirement.
 
(gg)  Mortgaged Premises securing Collateral and located in a special flood
hazard area designated as such by the Secretary of HUD are covered by special
flood insurance as required by the National Flood Insurance Program.
 
(hh)  Each HELOC and each Second Lien Loan that has been Pledged to the Agent
for more than fifteen (15) Business Days is covered by a specific Purchase
Commitment.
 
(ii)  Each Pledged Loan has been underwritten in material conformance with the
Company’s underwriting guidelines in existence as of the date the Pledged Loan
was originated, and without regard to changes in such guidelines, if any,
adopted by the Company but to which the Agent has objected in writing within ten
(10) days after receiving written notice of the change from the Company (and has
not withdrawn its objection.)
 
8.17.  Survival. All representations and warranties by the Company shall survive
delivery of the Facilities Papers and the making of Advances, and any
investigation at any time made by or on behalf of the Agent or any Lender shall
not diminish the Agent’s or such Lender’s right to rely on them.
 
9   AFFIRMATIVE COVENANTS
 
The Company agrees that, for so long as the Commitments are outstanding or any
of the Company’s obligations remain to be paid or performed under this
Agreement, the Senior Credit Notes or any of the other Facilities Papers, the
Company shall, to the extent applicable:

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9.1.  Pay Senior Credit Notes. Punctually pay or cause to be paid when due the
principal of, interest on and all other amounts now or hereafter owing under
this Agreement, the Senior Credit Notes and the other Facilities Papers in
accordance with their respective terms.
 
9.2.  Financial Statements. Deliver to the Agent and to each of the Lenders:
 
(a)  As soon as available and in any event within thirty (30) days after the end
of each month, statements of income and changes in its stockholders’ equity
(showing, both separately and on a consolidated basis with the Company, those of
its Subsidiaries) for the month just ended, and the related balance sheet as at
the end of such month, all in reasonable detail, and certified by its chief
financial officer that, to the best of his or her knowledge, such financial
statements were prepared in accordance with GAAP and present fairly the
financial condition and the results of operations for the period covered,
subject, however, to year-end audit adjustments and the omission of notes to the
Financial Statements.
 
(b)  As soon as available and in any event within ninety (90) days after the
close of each of its fiscal years, audited statements of income, changes in its
stockholder’s equity and cash flows (showing, both separately and on a
consolidated basis with the Company, those of its Subsidiaries) for such year,
and the related balance sheet as at the end of such year (setting forth in
comparative form the corresponding figures for the preceding fiscal year), all
in reasonable detail, prepared in accordance with GAAP and with all notes, and
accompanied by:
 
(1)  a report and opinion of a firm of independent certified public accountants
of recognized standing selected by the Company and acceptable to the Agent (as
of the Effective Date, PriceWaterhouseCoopers, LLP is acceptable to the Agent),
stating that such accountants have audited such financial statements in
accordance with generally accepted auditing standards and that, in their
opinion, such financial statements present fairly, in all material respects, the
financial position of the Company as of the date thereof and the results of its
operations and cash flows for the periods covered thereby in conformity with
GAAP;
 
(2)  any management letters, management reports or other supplementary comments
or reports delivered by such accountants to management or the board of directors
of the Company;
 
(3)  if (i) the Company begins servicing Mortgage Loans for others and (ii) such
a report is prepared in the ordinary course of the Company’s annual audit, a
report and opinion of a firm of independent public accountants that is a member
of the American Institute of Certified Public Accountants (as of the Effective
Date, PriceWaterhouseCoopers, LLP is acceptable to the Agent) stating that such
firm has examined selected documents and records relating to the servicing of
Mortgage Loans, including the Pledged Loans covered by this Agreement, 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 (if the
Company utilizes any subservicer in servicing Mortgage Loans for others, the
Company will use reasonable efforts to obtain such a report and opinion in
respect of each subservicer for the Company and will furnish those obtained to
the Agent); and
 

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(4)  a certificate signed by the chief financial officer of the Company, as
applicable, stating that said financial statements fairly present its financial
condition and results of operations (and, if applicable, those of its
Subsidiaries) as at the end of, and for, such year.
 
The Company also agrees to provide to the Agent such other information related
to such annual reports as the Agent may from time to time reasonably request.

(c)  Together with each of the monthly and annual financial statements required
by Sections 9.2(a), and 9.2(b) above, a certificate of the Company’s chief
financial officer (i) setting forth in reasonable detail all calculations
necessary to show that the Company is in compliance with the requirements of
Sections 10.7, 10.7(e) and 10.7(f) of this Agreement or, if the Company is not
in compliance, showing the extent of noncompliance and specifying the period of
noncompliance and what actions the Company proposes to take with respect thereto
and (ii) stating that the terms of this Agreement have been reviewed by such
officer or under his or her supervision, and that he or she has made or caused
to be made under his or her supervision, a review in reasonable detail of the
transactions and the condition of the Company during the accounting period
covered by such financial statements and that such review does not disclose the
existence during or at the end of such accounting period — and that such chief
financial officer does not have knowledge of the existence as of the date of the
Officer’s Certificate — of any Event of Default or Default or, if any Event of
Default or Default existed or exists, specifying the nature and period of its
existence and what action the Company has taken, is taking and proposes to take
with respect to it. Each such Officer’s Certificate shall show, in reasonable
detail, the computations supporting compliance (or showing noncompliance) with
the provisions of Sections 10.7, 10.7(e) and 10.7(f). Exhibit E is a sample form
for showing such computations.
 
9.3.  Financial Statements Will be Accurate. The Company agrees that all
financial statements and reports of auditors furnished to the Agent and the
Lenders will be prepared in accordance with GAAP, applied on a basis consistent
with that applied in preparing the Statement Date Financial Statements as at,
and for the period then ended (except to the extent otherwise required to
conform to good accounting practice), subject, however — for financial
statements other than year-end statements — to year-end audit adjustments and
the omission of footnotes.
 
9.4.  Other Reports. The Company will promptly furnish to the Agent from time to
time information regarding the business and affairs of the Company, including
the following and such other information as the Agent may from time to time
reasonably request (each report required must be signed by a duly authorized
officer of the Company and the Agent will have no responsibility to verify or
track any of the items referenced or conclusions stated in such reports or to
verify the authority of its signer):
 
(a)  A report of Collateral prepaid in full, on or before one (1) Business Day
after prepayment of any one or more items of Collateral is reported to the
Company internally or by any Servicer (and the Company, as applicable, will
require each such Servicer to promptly make such reports to the Company, as
applicable).
 

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(b)  Monthly, if applicable, a report summarizing notices received by the
Company requesting or demanding that the Company repurchase (or pay indemnity or
other compensation in respect of) Mortgage Loans previously sold or otherwise
disposed of by the Company 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 Company is contesting or intends to contest
the request or demand).
 
(c)  Monthly (if applicable), a Pledged Loans Curtailment Report.
 
(d)  If requested by the Agent, a summary report of the Company’s
then-outstanding commitments to sell Mortgage Loans to investors.
 
(e)  Weekly (if applicable), a report of Second Lien Loans and HELOCs that have
been Pledged to the Agent for more than fifteen (15) Business Days but are not
covered by a specific Purchase Commitment.
 
(f)  Such other reports by the Company in respect of the Collateral, in such
detail and at such times as the Agent in its reasonable discretion or at the
reasonable direction of a Lender may request at any time or from time to time.
 
(g)  Within ten (10) days of the date distributed, the Company will notify the
Agent if it has issued any definitive prospectus relating to (i) any security
offering by the Company or any of its Subsidiaries (including single-purpose
finance Subsidiaries) or (ii) any securities to be based on, backed by or
created from any Collateral and to be offered by the Company or any of its
Subsidiaries, and, upon the Agent’s request, will provide the Agent with copies
thereof.
 
(h)  The Company will notify the Agent (i) when any press release is issued by
the Company or any of its Subsidiaries regarding any event or matter that is, or
is reasonably likely to be, material to the business operations, earnings,
assets or liabilities of the Company, (ii) when any regular or periodic
financial reports, or any extraordinary or non-routine filings, if any, shall be
filed with the U.S. Securities and Exchange Commission or any successor agency
by or on behalf of the Company or any of its Subsidiaries (including
single-purpose finance Subsidiaries) and (iii) when any such filings are made by
or in respect of the Company or any of its Subsidiaries relating to any
securities that are, or are to be, based on, backed by or created from any
Collateral, and upon request of the Agent will provide copies of such press
releases or filings.
 
(i)  The Company will promptly notify the Agent in writing of any changes to the
Company’s underwriting guidelines. If the Agent deems any change material and
objects to it in writing within ten (10) Business Days of receipt of notice of
it from the Company, the Company shall not thereafter submit as Collateral, or
request any Advance against the Collateral Value of, any Single-family Loan
that, in the absence of that change in the underwriting guidelines, would not
have satisfied the Company’s underwriting guidelines (and any such Single-family
Loan shall have zero Collateral Value.)
 

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9.5.  Maintain Existence and Statuses; Conduct of Business. Preserve and
maintain its corporate existence in good standing and all of its rights,
privileges, licenses and franchises necessary or desirable in the normal conduct
of its business except where the failure to maintain such rights, privileges,
licenses or franchises would not have a material adverse effect on any of the
Central Elements in respect of the Company or any of its Subsidiaries, and the
Company will continue in the Prime Loan origination business as one of its core
businesses.
 
9.6.  Compliance with Applicable Laws. Comply with all applicable Legal
Requirements, the breach of which could reasonably be expected to materially
adversely affect any of the Central Elements with respect to the Company and its
Subsidiaries, taken as a whole, except where contested in good faith.
 
9.7.  Inspection of Properties and Books; Protection of Company’s Proprietary
Information. Permit authorized representatives of the Agent and each Lender to
discuss onsite the business, operations, assets and financial condition of the
Company and its Subsidiaries with their respective officers, employees and
independent accountants and to examine their books of account and make copies or
extracts of them, all at such reasonable times as the Agent or any Lender may
request, for any or all of the purposes of ordinary diligence, and enforcing the
Agent’s and the Lenders’ rights and performing the Agent’s duties under this
Agreement. The Agent or the Lender acting will notify the Company before
contacting the Company’s accountants and the Company may have its
representatives in attendance at any meetings between the officers or other
representatives of the Agent or any Lender and such accountants held in
accordance with this authorization. The Agent and the Lenders agree that they
will 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 Company to the Agent
or the Lenders pursuant to this 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 Legal
Requirement (including pursuant to any examination, inspection or investigation
by any Governmental Authority having regulatory jurisdiction over the Agent or a
Lender), (iii) is furnished by the Agent or any Lender to purchasers or
prospective purchasers of participations or interests in the Obligations or any
Senior Credit Note so long as such purchasers and prospective purchasers have
agreed to be subject to restrictions substantially identical to those contained
in this sentence, or (iv) the disclosure of which the Agent and the lenders
reasonably and in good faith deem necessary to protect their interests herein.
 
9.8.  Privacy of Customer Information. Company Customer Information in the
possession of the Agent, other than information independently obtained by the
Agent and not derived in any manner from or using information obtained under or
in connection with this Agreement, is and shall remain confidential and
proprietary information of the Company. Except in accordance with this Section
9.8, the Agent shall not use any Company Customer Information for any purpose,
including the marketing of products or services to, or the solicitation of
business from, Customers, or disclose any Company Customer Information to any
Person, including any of the Agent’s employees, agents or contractors or any
third party not affiliated with the Agent. The Agent may use or disclose Company
Customer Information only to the extent necessary (i) for examination and audit
of the Agent’s activities, books and records by the Agent’s regulatory
authorities, (ii) to protect or exercise the Agent’s, the Custodian’s and the
Lenders’ rights and privileges or (iii) to carry out the Agent’s, the
Custodian’s and the Lenders’ express obligations under this Agreement and the
other Facilities Papers (including providing Company Customer Information to
Approved Investors), and for no other purpose; provided that the Agent may also
use and disclose the Company Customer Information as expressly permitted by the
Company in writing, to the extent that such express permission is in accordance
with the Privacy Requirements. The Agent shall take commercially reasonable
steps to ensure that each Person to which the Agent intends to disclose Company
Customer Information, before any such disclosure of information, agrees to keep
confidential any such Company Customer Information and to use or disclose such
Company Customer Information only to the extent necessary to protect or exercise
the Agent’s, the Custodian’s and the Lenders’ rights and privileges, or to carry
out the Agent’s, the Custodian’s and the Lenders’ express obligations, under
this Agreement and the other Facilities Papers (including providing Company
Customer Information to Approved Investors). The Agent agrees to maintain an
Information Security Program and to assess, manage and control risks relating to
the security and confidentiality of Company Customer Information pursuant to
such program in the same manner as the Agent does in respect of its own
customers’ information, and shall implement the standards relating to such risks
in the manner set forth in the Interagency Guidelines Establishing Standards for
Safeguarding Company Customer Information set forth in 12 CFR Parts 30, 208,
211, 225, 263, 308, 364, 568 and 570. Without limiting the scope of the
foregoing sentence, the Agent shall use at least the same physical and other
security measures to protect all Company Customer Information in the Agent’s
possession or control as the Agent uses for its own customers’ confidential and
proprietary information.
 

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9.9.  Notice of Suits, Etc. and Notice and Approval of Proposed Servicing
Transfers. Give prompt written notice to the Agent of:
 
(a)  any material action, suit or proceeding instituted by or against the
Company or any of its Subsidiaries in any federal or state court or before any
commission, regulatory body or Governmental Authority, or if any such
proceedings are threatened against the Company or any of its Subsidiaries, in a
writing containing the applicable details;
 
(b)  the filing, recording or assessment of any material federal, state or local
tax lien against the Company or any of its Subsidiaries or any assets of any of
them;
 
(c)  the occurrence of any Event of Default hereunder;
 
(d)  the occurrence of any Default which continues for two (2) Business Days;
 
(e)  the occurrence of (i) any event which, with or without notice or lapse of
time or both, would constitute a default under any other agreement, instrument
or indenture to which the Company or any or its Subsidiaries is a party or to
which any of them or any of their properties or assets may be subject which may
lead to or result in a material adverse effect on any of the Central Elements in
respect of the Company or any of its Subsidiaries, or (ii) any other action,
event or condition of any nature which may lead to or result in such an effect.
 
To the extent the Company has approval rights concerning transfers of any
Servicing Agreement relating to any Pledged Loans, it agrees not to approve or
acquiesce in any transfer of such servicing to a Servicer that has not been
approved by the Agent.

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9.10.  Payment of Taxes, etc. Pay and discharge or cause to be paid and
discharged promptly all taxes, assessments and governmental charges or levies
imposed upon it or its Subsidiaries or upon their respective income, receipts or
properties before they become past due, as well as all lawful claims for labor,
materials and supplies or other things which, if unpaid, could reasonably be
expected to become (or result in the placement of) a Lien or charge upon any
part of such properties; provided that it and its affected Subsidiaries shall
not be required to pay taxes, assessments or governmental charges or levies or
claims for labor, materials or supplies that are being contested in good faith
and by proper proceedings being reasonably and diligently pursued, execution or
enforcement of which has been effectively stayed (by the posting of a bond or
other security sufficient to achieve that result, or by any other fully
effective means), and for which reserves determined to be adequate (in
accordance with GAAP in all material respects) have been set aside on its books.
 
9.11.  Insurance. Maintain liability insurance protecting the Company 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 Agent without charge
upon the Agent’s request made from time to time and without cost to the Agent. 
 
9.12.  Maintain Priority and Perfection of Lender’s Lien. Do such things as
applicable law requires to maintain the Lender’s Lien on the Collateral as a
perfected first priority Lien at all times.
 
9.13.  Subordination of Certain Indebtedness. The Company will cause any and all
debt and obligations of the Company to any Affiliate or any shareholder,
director or officer of the Company (excluding debt for director’s or office’s
salary, bonuses, directors’ fees or other compensation for service) or any
Affiliate to be Qualified Subordinated Debt by the execution and delivery by
such Affiliate or shareholder, director or officer to the Agent of a
Subordination Agreement and the taking of all other steps (if any) required to
cause such Debt to be Qualified Subordinated Debt, as defined in this Agreement,
and deliver to the Agent an executed copy of that Subordination Agreement,
certified by the corporate secretary of the Company to be true and complete and
in full force and effect, as to all such present and future debts and
obligations of the Company.
 
9.14.  Use of Proceeds of Advances. Use the proceeds of each Advance solely for
the applicable purpose stated in Section 2.4 and for no other purpose.
 
9.15.  Promptly Correct Escrow Imbalances. By no later than five (5) Business
Days after learning (from any source) of any material imbalance in any escrow
account(s) maintained by the Company (or any subservicer for it), the Company
will fully and completely correct and eliminate such imbalance. 
 

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9.16.  MERS Covenants. If the Company has begun registering Pledged Loans with
MERS, the Company will:
 
(a)  be a “Member” (as defined in the MERS Agreements) of MERSCORP;
 
(b)  maintain the Electronic Tracking Agreement in full force and effect and
timely perform all of its obligations thereunder;
 
(c)  provide the Agent with copies of any new MERS Agreement or any amendment,
supplement or other modification of any MERS Agreement (other than the
Electronic Tracking Agreement);
 
(d)  not amend, terminate or revoke, or enter into any agreement that is
inconsistent with or contradicts any provision of the Electronic Tracking
Agreement;
 
(e)  identify to the Agent each Pledged Loan that is registered in the MERS
System, at the earlier of the time it is so registered or the time it is pledged
or deemed pledged hereunder, as so registered;
 
(f)  at any time at the request of the Agent, take such actions as may be
necessary to register the pledge of any Pledged Loan to the Agent on the MERS
System;
 
(g)  at the request of the Agent, take such actions as may be requested by the
Agent to:
 
(1)  transfer beneficial ownership of any Pledged Loan to the Agent on the MERS
System; or
 
(2)  de-register or re-register any Pledged Loan on, or withdraw any Pledged
Loan from, the MERS System;
 
(h)  provide the Agent with copies of any or all of the following reports with
respect to the Pledged Loans registered on the MERS System at the request of the
Agent:
 
(1)  Co-existing Security Interest (MERS form IA);
 
(2)  Release of Security Interest by Interim Funder (MERS form IB);
 
(3)  Interim Funder Rejects (MERS form IC);
 
(4)  Paid in Full Verification (MERS form DK); and
 
(5)  such other reports as the Agent may request to verify the status of any
Pledged Loan on the MERS System;
 
(i)  notify the Agent of any withdrawal or deemed withdrawal of the Company’s
membership in the MERS System or any deregistration of any Pledged Loan
previously registered on the MERS System; and
 

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(j)  obtain the prior written consent of the Agent before entering into an
electronic tracking agreement (other than the Electronic Tracking Agreement)
with any other Person.
 
9.17.  Special Affirmative Covenants Concerning Collateral. 
 
(a)  Until all of the Obligations shall have been fully paid and satisfied and
the Lenders have no obligation to lend or provide any other financial
accommodations to the Company under or otherwise in respect of this Agreement,
the Company warrants and will defend the right, title and interest of the Agent
in and to the Collateral against the claims and demands of all persons
whomsoever. 
 
(b)  The Company will maintain the Lien on the Mortgaged Premises securing each
Pledged Loan as a first Lien (or, for Second Lien Loans, as a second Lien),
subject only to the Permitted Encumbrances.
 
(c)  The Company will ensure that the residential real estate securing each
Pledged Loan is continuously insured against casualty loss as follows:
 
(1)  the Company shall cause to be maintained with respect to each Pledged
Mortgage, one or more Hazard Insurance Policies which provide, at a minimum, the
same coverage as a standard form fire and extended coverage insurance policy
that is customarily required by other creditors for residential real estate
located in the same general geographic area and State that secures that Pledged
Mortgage, issued by a company authorized to issue such policies in the state in
which the related residential real estate is located and in an amount not less
than (x) the maximum insurable value of the improvements to such residential
real estate or (y) the principal balance due from the Customer(s) under the
related Pledged Loan, whichever is less; provided that the amount of coverage
provided by each Hazard Insurance Policy shall be sufficient to avoid the
application of any coinsurance clause for partial losses, although such Hazard
Insurance Policies may provide for customary deductible amounts. Each Hazard
Insurance Policy shall contain a standard loss payee clause in favor of the
Company and its successors and assigns. If any Customer obligated on any Pledged
Loan fails to pay any premiums on the Hazard Insurance Policy for the related
property, the Company shall pay such premiums out of its own funds and may
separately add the amount so paid to the relevant Customer’s obligation as
provided by the Mortgage Loan papers, but shall not add that amount to the
remaining principal balance of the Pledged Loan; and
 
(2)  the Company may, in lieu of causing individual Hazard Insurance Policies to
be maintained with respect to each residential property pursuant to Section
9.17(c)(1), and shall, to the extent that the related Loan Papers do not require
the Customer(s) obligated on them to maintain a Hazard Insurance Policy with
respect to the related Mortgaged Premises, maintain one or more blanket
insurance policies covering losses on the Company’s interest in the Pledged
Loans resulting from the absence or insufficiency of individual Hazard Insurance
Policies. Any such blanket policy shall be in the form and the amount as shall
be satisfactory to the Agent. The Company shall pay the premium for such policy
on the basis described therein and shall pay from its own funds any deductible
amount with respect to claims under such blanket insurance policy relating to
the Pledged Loans. However, the Company shall not be required to deposit any
deductible amount with respect to claims under individual Hazard Insurance
Policies maintained pursuant to Section 9.17(c)(1). If the insurer under such
blanket insurance policy shall cease to be acceptable to the Company, the
Company shall exercise its best reasonable efforts to obtain from another
insurer a replacement policy comparable to such policy.
 

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(d)  The Company agrees to use its best efforts to cause each of its Servicers
to keep in force throughout the term of this Agreement (i) a policy or policies
of insurance covering errors and omissions for failure to maintain insurance as
required by this Agreement and (ii) a fidelity bond. Each such policy and
fidelity bond shall be in such form and amount as is generally customary among
Persons who service a portfolio of Mortgage Loans having an aggregate principal
amount comparable to that of the servicing portfolio of such Servicer or the
Company, respectively, and which are generally regarded as servicers acceptable
to institutional investors.
 
(e)  The Company shall authorize the Agent to file such UCC financing statements
and continuation statements and shall make or cause to be made by any Person
such book entries and control agreements with respect to the Collateral as the
Agent may reasonably require or request from time to time to perfect or continue
perfection of the security interests granted or required to be granted to the
Agent (for itself as a Lender and as agent for the other Lenders) pursuant to
this Agreement. The Company shall also execute and deliver to the Agent such
further instruments of sale, pledge or assignment or transfer, and such powers
of attorney, as shall be reasonably required by the Agent from time to time, and
shall do and perform all matters and things necessary or desirable to be done or
observed, for the purpose of effectively creating, maintaining and preserving
the security and benefits intended to be afforded the Lenders and the Agent
under this Agreement, the Senior Credit Notes, the Custody Agreement and the
other Facilities Papers. The Agent shall have all the rights and remedies of a
secured party (for itself as a Lender and as agent for the other Lenders) under
the UCC of the State of New York and any other applicable law, in addition to
all rights provided for in this Agreement or the Custody Agreement.
 
(f)  As soon as they become available, the Company will cause to be assembled
and delivered to the Custodian all Basic Loan Papers relating to Wet Loans.
Without limitation of the foregoing, if original recordation receipts evidencing
the recordation of the Mortgage and Mortgage Assignment included in the Pledged
Loans have not previously been delivered to the Custodian, the Company will
promptly deliver (or cause to be delivered) to the Custodian, either the
original recordation receipts or the original recorded Mortgage or Mortgage
Assignment showing the recordation data thereon.
 
(g)  The Company shall maintain, at its principal office or in a regional office
not disapproved by the Agent, or in the office of a computer service bureau
engaged by the Company and not disapproved by the Agent, and upon request shall
make available to the Agent (or the Custodian, if the Agent ever ceases to be
Custodian) the originals of all Loan Papers and related instruments, and all
files, surveys, certificate, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Collateral that are held by or under the direction or control of the
Company or any of its Affiliates and that have not already been provided to the
Agent or the Custodian.
 

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9.18.  Coordination with Other Lenders/Repo Purchasers and Their Custodians. The
Company will provide to the Agent the current name, address and contact
information concerning each of the Company’s other mortgage warehouse credit and
repurchase facilities (if any), will update such information provided to the
Agent as material changes occur, and will cooperate and assist the Agent in
exchanging information with such others (and their document custodians or
trustees) to prevent conflicting claims to and interests in Collateral between
or among lenders or repurchase facilities counterparties, and promptly correct
such conflicting claims as may arise from time to time.
 
10  NEGATIVE COVENANTS
 
The Company agrees that, for so long as the Commitments are outstanding or any
of the Company’s obligations remain to be paid or performed under this
Agreement, the Senior Credit Notes (including the Swing Line Note) or any of the
other Facilities Papers, the Company shall not, either directly or indirectly,
without the prior written consent of the Agent:

10.1.  Contingent Liabilities. Assume, guarantee, endorse, or otherwise become
liable for the Debt or other obligation of any Person or entity except (a) by
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, (b) guaranties of Debt of wholly-owned Subsidiaries and (c)
under the Company’s existing contingent liabilities described on Schedule 8.4.
 
10.2.  Conditional Repurchase, Indemnity or Other Recourse Obligations. If the
Company shall begin servicing Mortgage Loans, undertake or assume any
conditional repurchase, indemnity or other recourse obligations in respect of
Mortgage Loans sold which obligations and liabilities, when combined with the
Company’s contingent liabilities described and referred to in Section 8.4,
constitute contingent liabilities that both (x) are required by FAS-5 either to
be accrued as a charge to income or to be disclosed by a note to the Company’s
financial statements and (y) aggregate more than Two Hundred Fifty Thousand
Dollars ($250,000) in the aggregate.
 
10.3.  Pledging or Assignment of Servicing Rights. Pledge, grant a security
interest or assign any existing or future rights to service any of the
Collateral or to be compensated for servicing any of the Collateral, or pledge
or grant to any other Person any security interest in any Servicing Rights at
any time Pledged to the Agent.
 
10.4.  No Reorganization. Reincorporate or otherwise reorganize as anything
other than a Delaware corporation.
 
10.5.  Merger; Sale of Assets; Acquisitions. Liquidate, dissolve, sell all or
substantially all of its assets, consolidate or merge, nor make any material
acquisition of all or substantially all assets of any other Person (the Agent’s
reasonable, good faith determination of whether an acquisition of assets would
be material shall be conclusive and binding), unless:
 
(a)   (i) in the case of a consolidation or merger, it is with a mortgage
company and the Company is the survivor or (ii) in the case of an acquisition,
it is of assets or securities to be used by the Company in its core mortgage
company business, or, if it is not, such acquisition shall have been approved in
writing by the Agent;
 

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(b)  in the case of the acquisition of assets or sale of the Company’s assets,
such acquisition or sale is in the ordinary course of the Company’s business; or
 
(c)  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
Agent’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 Agreement or
any of the other Facilities Papers.

10.6.  Permitted Debt. The Company will not incur, permit to exist or commit to
incur any Debt that has not been approved by the Agent in writing in advance,
except the following (collectively, the “Permitted Debt”):
 
(a)  the Loan and the other Obligations;
 
(b)  obligations to pay Taxes;
 
(c)  liabilities for accounts payable, non-capitalized equipment or operating
leases and similar liabilities incurred in the ordinary course of business;
 
(d)  accrued expenses, deferred credits and loss contingencies that are properly
classified as liabilities under GAAP;
 
(e)  Debt incurred in the ordinary course of business to hedge the risk of
interest rate fluctuations or any of the Company’s portfolios or pipelines of
Mortgage Loans under this Agreement or in respect of other Permitted Debt
obligations;
 
(f)  liabilities for capital leases and similar liabilities incurred in the
ordinary course of business, up to an aggregate maximum principal amount of Five
Hundred Thousand Dollars ($500,000);
 
(g)  the debt described on Schedule SD if and to the extent that it is Qualified
Subordinated Debt;
 
(h)  the specific Debt described on Schedule 10.6(h);
 
(i)  other Debt of the Company approved in writing by the Required Lenders (no
Lender shall have any obligation to approve any such Debt, and each may approve
or disapprove it in such Lender’s sole and absolute discretion);
 
(j)  Debt incurred in connection with the collapsing and repurchasing of
securities issued in connection with a securitization of Mortgage Loans the
documentation for which specifically contemplates and permits such a
repurchasing transaction;
 

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(k)  Debt of Single-purpose Finance Subsidiaries that is Nonrecourse Debt to the
Company; and
 
(l)  Debt secured solely by the residual interests of the Company in the income
stream to be received under any Mortgage Loan securitization program.
 
10.7.  Financial Covenants. Although compliance or noncompliance with the
following financial covenants shall be determined as of the end of a month or
year, as the case may be, the Company agrees to use commercially reasonable
efforts to comply with them continuously and at all times:
 
(a)  The Company’s Minimum Adjusted GAAP Net Worth. Permit the Adjusted GAAP Net
Worth of the Company (on a consolidated basis with its wholly-owned
Subsidiaries) to be less on any day than Sixty Million Dollars ($60,000,000).
 
(b)  The Company’s Total Liabilities to Adjusted GAAP Net Worth Ratio. Permit
the ratio of:
 
(x)    the Total Liabilities of the Company and its Subsidiaries;

to         (y)    The Adjusted GAAP Net Worth of the Company and its
Subsidiaries, on a consolidated basis;

to exceed ten to one (10.00:1.00) at any time.

(c)  GAAP Net Earnings. Earn less than One Dollar ($1) of net earnings, as
determined in accordance with GAAP, for any two consecutive (rolling) fiscal
quarters, beginning with the six-month period ending March 31, 2005.
 
(d)  Minimum Liquidity. Permit the Liquidity of the Company (on a consolidated
basis with its wholly-owned Subsidiaries) to be less on any day than Twelve
Million Five Hundred Thousand Dollars ($12,500,000).
 
(e)  Dividend Limitation. Declare or pay any dividend or make any distribution
directly or indirectly to the Company’s shareholders when any Default or Event
of Default has occurred and is continuing or, immediately after the payment of
which dividend or distribution, would exist.
 
(f)  Advances Limitation. Directly or indirectly make any advance to (or decline
or defer any payment due from) any stockholder if, at the time of or immediately
after such action, (x) the Company’s Adjusted GAAP Net Worth would be less than
the minimum specified in Section 10.7(a) or (y) any Default or Event of Default
would exist.
 
10.8.  Special Negative Covenants Concerning Collateral. 
 
(a)  Except to correct errors or omissions in Loan Papers, without the written
consent of the Agent given on a case-by-case basis, the Company shall not amend
or modify, or waive any of the terms and conditions of any Pledged Loans, or
settle or compromise any claim in respect of them, or accept other than cash or
the exchange of comparable Collateral (which is concurrently Pledged to the
Agent by the Company) in liquidation of any Pledged Loans; and
 

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(b)  the Company will not create, incur, grant, assume or suffer to exist any
Lien on any of the Collateral, other than in favor of the Agent pursuant to this
Agreement.
 
11  DEFAULTS AND REMEDIES
 
11.1.  Events of Default. The occurrence of any of the following conditions or
events shall be an Event of Default.
 
(a)  Failure by the Company to pay the principal of any Advance when due
pursuant to this Agreement or any Senior Credit Note, whether such Advance has
become due because the Maturity Date has occurred through lapse of time or
acceleration or by operation of another provision of this Agreement or the
Senior Credit Notes; or failure by the Company to pay any installment of
interest on any Advance or any other amount owing under this Agreement on or
before three (3) Business Days after the due date of such interest.
 
(b)  Failure of the Company or any of its Subsidiaries to pay any other Debt
when due, or any default in the payment when due of any principal or interest on
any other Debt or in the payment when due of any contingent obligation (other
than nonrecourse MBS Debt of any Subsidiary formed for the purpose of issuing
such Debt); or breach or default with respect to any other material term of any
other debt 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
11.1(b), is to cause, or to permit the holder or holders of such obligation (or
a trustee on behalf of such holder or holders) to cause, debt of the Company or
any of its Subsidiaries in the aggregate amount of Two Hundred Fifty Thousand
Dollars ($250,000) or more to become or be declared due before its stated
maturity. 
 
(c)  Failure of the Company to perform or comply with any term or condition
applicable to it contained in any of Sections 9.5, 9.14, 9.17 or 10 of this
Agreement or to pay timely the Facility Fee pursuant to Section 5.7, the Agent’s
Fees (if any) pursuant to Section 5.8, the Custodian’s Fee under the Custody
Agreement or any other fees under this Agreement or any other Facilities Papers.
 
(d)  Any of the Company’s representations or warranties made in any of the
Facilities Papers or in any statement or certificate at any time given by the
Company in writing pursuant to this Agreement, the Custody Agreement or any of
the other Facilities Papers or in connection with any of the Facilities Papers
shall be false or misleading in any material respect on the date as of which
made or shall omit to state any information necessary to make the
representations and warranties not materially misleading; provided that if any
of the Company’s representations in Section 8.16 (titled “Special
Representations Concerning Collateral”) for any reason shall be (or shall prove
to have been) untrue or incorrect, then such untruth or incorrectness shall not
constitute a Default or an Event of Default — although, as provided in the
definition thereof, such untruth or incorrectness will be a Disqualifier for all
affected items of Collateral, which will each thereupon have zero Collateral
Value — unless such untrue or incorrect representation relates to ten (10) or
more Pledged Loans or five (5) or more other items of Collateral.
 

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(e)  The Company shall default in the performance of or compliance with any term
contained in this Agreement or any of the Facilities Papers other than those
referred to above in Sections 11.1(a), 11.1(c) or 11.1(d) or shall default in
the performance of or compliance with any term applicable to it contained in the
Custody Agreement and such default shall not have been remedied or waived on or
before thirty (30) days after receipt of notice from the Agent of such default.
 
(f)  Any of the following occurs:
 
(1)  a court having jurisdiction shall enter a decree or order of relief in
respect of the Company or any of its Subsidiaries in an involuntary case under
any applicable bankruptcy, insolvency or other similar federal or state law now
or hereafter in effect, which decree or order is not stayed;
 
(2)  a decree or order of a court having jurisdiction for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the Company or any of its Subsidiaries or over all or a
substantial part of their respective property, shall have been entered;
 
(3)  an involuntary appointment shall be made by a court of competent
jurisdiction of an interim receiver, trustee or other custodian of the Company
or any of its Subsidiaries for all or a substantial part of their respective
property; or
 
(4)  a warrant of attachment, execution or similar process against any
substantial part of the property of the Company or any of its Subsidiaries shall
have been issued;
 
if any such decree, order, appointment or warrant shall not be dismissed, bonded
off or discharged on or before sixty (60) days after it first takes effect.

(g)  The Company or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion to an involuntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; the making by the Company or any
of its Subsidiaries of any assignment for the benefit of creditors; or the
inability or failure of the Company or any of its Subsidiaries, or the admission
by the Company or any of its Subsidiaries in writing of its inability, to pay
its debts as such debts become due.
 
(h)  The Company shall take or omit to take any act (i) that would result in the
suspension or loss of any of its statuses, once achieved or any of such statuses
of its subservicer, if any, of any Ginnie Mae, Fannie Mae or Freddie Mac
Mortgage Loans pools for which the Company is Servicer — as a Ginnie Mae-,
Fannie Mae- and Freddie Mac-approved servicer, or (ii) after which the Company
or any such relevant subservicer would no longer be in good standing as such, or
(iii) after which the Company or any such relevant subservicer would no longer
currently satisfy all applicable Ginnie Mae, Fannie Mae and Freddie Mac net
worth requirements, if both (x) all of the material effects of such act or
omission shall have not been cured by the Company or waived by the relevant
Person (Ginnie Mae, Fannie Mae or Freddie Mac) before termination of such status
and (y) it could reasonably be expected to have a material adverse effect on any
of the Central Elements in respect of the Company or any of its Subsidiaries.
 

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(i)  Any money judgment, writ or warrant of attachment, or similar process
involving in any case an amount in excess of Two Hundred Fifty Thousand Dollars
($250,000) shall be entered or filed against the Company or any of its
Subsidiaries or any of their respective 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 before 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 Company’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 Company’s ability to fulfill its obligations under this Agreement,
any Senior Credit Note or any other Facilities Paper).
 
(j)  Any order, judgment or decree shall be entered against the Company
decreeing the dissolution or split up of the Company, and such order shall
remain undischarged or unstayed for a period in excess of sixty (60) days or in
any event later than five (5) days before the date when such order, judgment or
decree shall become final and nonapplicable, or if the Company shall not be
diligently pursuing efforts to have such order discharged, vacated, bonded
around or stayed during that time.
 
(k)  Any Plan maintained by the Company or any of its Subsidiaries shall be
terminated within the meaning of Title IV of ERISA or a trustee shall be
appointed by an appropriate United States district court to administer any such
Plan, or the Pension Benefit Guaranty Corporation (or any successor to it) shall
institute proceedings to terminate any such Plan or to appoint a trustee to
administer any such Plan if as of the date thereof the liability of the Company
or any of its Subsidiaries (after giving effect to the tax consequences thereof)
to the Pension Benefit Guaranty Corporation (or any successor to it) for
unfunded guaranteed vested benefits under such Plan exceeds the then-current
value of assets accumulated in such Plan by more than Two Hundred Fifty Thousand
Dollars ($250,000) (or in the case of a termination involving the Company or any
of its Subsidiaries as a “substantial employer”, as defined in Section
4001(a)(2) of ERISA, the withdrawing employer’s proportionate share of such
excess shall exceed such amount), unless any such termination, trustee
appointment or proceedings is in respect of any Subsidiary’s Plan and has no
material adverse effect on any of the Central Elements relative to the Company
or any of its Subsidiaries.
 
(l)  The Company or any of its Subsidiaries as employer under a Multiemployer
Plan shall have made a complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a withdrawal liability in
an annual amount exceeding Two Hundred Fifty Thousand Dollars ($250,000), unless
any such termination, trustee appointment or proceedings is in respect of any
Subsidiary’s Plan and has no material adverse effect on any of the Central
Elements relative to the Company or any of its Subsidiaries.
 

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(m)  A Change of Control shall occur without the prior written consent of the
Agent.
 
(n)  A Change of Executive Management shall occur.
 
(o)  The Company shall repudiate or purport to disavow its obligations under any
of the Facilities Papers or shall contest their validity or enforceability.
 
(p)  The Agent’s security interest in any of the Collateral whose aggregate
Collateral Value is less than four percent (4%) of all Advances then outstanding
shall become unperfected, of less than a first priority, unenforceable or
otherwise impaired and the Company shall fail to cure the same on or before ten
(10) Business Days after the Company first learns thereof from any source.
 
(q)  The Agent’s security interest in any of the Collateral whose aggregate
Collateral Value is four percent (4%) or more of all Advances then outstanding
shall become unperfected, of less than a first priority, unenforceable or
otherwise impaired.
 
11.2.  Cure or Waiver. If:
 
(a)  an Event of Default shall occur but subsequently the Required Lenders shall
waive the rights of the Lenders and the Agent to exercise remedies on account of
such Event of Default (whether temporarily or permanently and whether
conditionally or absolutely); provided that neither the Lenders nor the Agent
shall have any obligation to do so; and
 
(b)  The Company shall request in writing that the Agent declare such Event of
Default to have been cured or waived, whichever of those events has occurred;
 
then the Agent shall make such declaration in writing and shall deliver a copy
of the declaration to each of the Company and each Lender. The Agent shall not
declare in writing that an Event of Default has been waived unless Lenders whose
approval to waive it is required by the applicable provisions of Section 13.3
have in fact done so.

11.3.  Remedies. 
 
(a)  If any of the Events of Default described in Sections 11.1(f), 11.1(g),
11.1(j), 11.1(m), 11.1(n), 11.1(o), 11.1(p) or 11.1(q) shall occur, then the
Commitments shall automatically terminate and the unpaid principal amount of and
accrued interest on the Senior Credit Notes shall automatically become due and
payable, without presentment, demand or other requirements of any kind, all of
which are hereby expressly waived by the Company, unless all of the Lenders,
each acting in its sole discretion, shall otherwise agree in writing either
before or after such automatic event. 
 
(b)  At any time after any Event of Default (other than one of those described
in Sections 11.1(f), 11.1(g), 11.1(j), 11.1(m), 11.1(n), 11.1(o), 11.1(p) or
11.1(q), each of which has the automatic effects described in Section 11.3(a))
has occurred that the Agent has not declared in writing to have been cured or
waived, the Required Lenders, by written notice to the Company (which may be
given by the Agent), may electively (1) terminate the Commitments — in which
event the obligation of the Lenders to make Advances shall immediately terminate
— and/or (2) declare all or any portion of the Loan to be due and payable — in
which event that portion of the Loan, both advanced and unpaid principal and
accrued and unpaid interest on it and all other outstanding amounts, shall
immediately be and become due and payable.
 

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(c)  At any time after any Event of Default has occurred that the Agent has not
declared in writing to have been cured or waived, the Agent, with the approval
or at the direction of the Required Lenders, may also do any of the following:
 
(1)  Foreclose upon or otherwise enforce its security interest in and Lien on
the Collateral, or on such portions or elements of it as the Agent shall elect
to proceed against from time to time.
 
(2)  Notify any or all Servicers (if any) of the Company’s Pledged Loans and, at
the Agent’s option and in its sole discretion, any or all Customers obligated
under any or all items of Collateral, that the Collateral has been assigned to
the Agent and that all payments thereon are to be made directly to the Agent or
such other Person as may be designated by the Agent; settle, compromise, or
release, in whole or in part, any amounts owing on the Collateral or any portion
of the Collateral, on terms acceptable to the Agent; enforce payment and
performance and prosecute any action or proceeding with respect to any and all
Collateral; and where any such Collateral is in default, foreclose on and
enforce Liens or security interests in, such Collateral by any available
judicial procedure or without judicial process and sell property acquired as a
result of any such foreclosure.
 
(3)  Act, or contract with one or more third Persons to act, as Servicer of each
item of Collateral requiring servicing and perform all obligations required in
connection with any Servicing Agreements to which the Company is a party, and
the Company hereby agrees to pay such third Persons’ fees to the extent (if any)
that the Agent is unable, despite reasonable efforts made by the Agent in light
of the necessity that there be no material break in the continuity of servicing,
to contract for such servicing and performance of such obligations for fees
equal to or less than the fees under such Servicing Agreements.
 
(4)  Exercise all rights and remedies of a secured creditor under the UCC of the
State of Texas, the State of New York, the State of California and any other
relevant State, including selling the interests of the Company in the Collateral
at public or private sale. The Agent shall give the Company not less than ten
(10) days’ notice of any such public sale or of the date after which private
sale may be held. The Company agrees that ten (10) days’ notice shall be
reasonable notice. At any such sale any or all of the Collateral may be sold as
an entirety or in separate parts, as the Agent may determine. The Agent may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. The Agent is authorized at any such sale, if the Agent
deems it advisable so to do, to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
resale of any of the Collateral. The Company specifically agrees that any such
sale, whether public or private, of any Collateral pursuant to the commitment of
any investor to purchase such Collateral that was obtained by (or with the
approval of) the Company will be commercially reasonable, and if such sale is
for the price provided for in such commitment, then such sale shall be held to
be for value reasonably equivalent to the value of the Collateral so sold. Upon
any such sale, the Agent shall have the right to deliver, assign and transfer to
the purchaser thereof the Collateral so sold. Each purchaser at any such sale
shall hold the property sold absolutely free from any claim or right of
whatsoever kind, including any equity or right of redemption, stay or appraisal
which the Company has or may have under any rule of law or statute now existing
or hereafter adopted. In case of any sale of all or any part of the Collateral
on credit or for future delivery, the Collateral so sold may be retained by the
Agent until the selling price is paid by the purchaser, but the Agent shall not
incur any liability in case of such purchaser’s failure to take up and pay for
the Collateral so sold and, in case of any such failure, such Collateral may
again be sold upon like notice. The Agent may, however, instead of exercising
the power of sale herein conferred upon it, proceed by a suit or suits at law or
in equity to collect all amounts due upon the Collateral or to foreclose the
pledge and sell the Collateral or any portion of it under a judgment or decree
of a court or courts of competent jurisdiction, or both. Nothing in this
Agreement shall be construed as the Company’s waiver of — or agreement to waive
— any requirement imposed by applicable law that any sale of the Collateral be
commercially reasonable.
 

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(5)  Proceed against the Company on the Senior Credit Notes or any of them with
or without, at the Agent’s election, first proceeding against the Collateral.
 
(d)  Neither the Agent nor any of the Lenders shall incur any liability as a
result of the sale of the Collateral, or any part of it, at any private sale.
The Company hereby waives any claims it may have against the Agent or the
Lenders arising by reason of the fact that the price at which the Collateral may
have been sold at such private sale was less than the price that might have been
obtained at a public sale, less than the price that might have been obtained had
the Collateral been sold pursuant to a purchase agreement for it obtained by the
Company, or less than the aggregate amount of the outstanding Advances and the
unpaid interest accrued on them, even if the Agent accepts the first offer
received and does not offer the Collateral to more than one offeree.
 
(e)  The Company waives any right to require the Agent or any Lender to (1)
proceed against any Person, (2) proceed against or exhaust any of the Collateral
or pursue its rights and remedies as against the Collateral in any particular
order, or (3) pursue any other remedy in its power. Except to the extent, if
any, required by applicable Law, the Agent shall not be required to take any
steps necessary to preserve any rights of the Company against holders of
Mortgages or security interests prior in lien to the Lien of any Mortgage
included in the Collateral, to preserve rights against prior parties or to
preserve rights against other parties to Mortgage Loan purchase commitments or
Servicing Agreements.
 
(f)  The Agent and the Lenders may, but shall not be obligated to, advance any
sums or do any act or thing necessary to uphold and enforce the Lien and
priority of any Mortgage or other Lien instrument included in the Collateral or
the security intended to be afforded by it, including payment of delinquent
taxes or assessments and insurance premiums, or to preserve or reinstate any
hedging arrangements or mechanisms. All advances, charges, costs and expenses,
including reasonable attorneys’ fees and disbursements, incurred or paid by the
Agent in exercising any right, power or remedy conferred by this Agreement or
any of the other Facilities Papers, or in its enforcement, together with
interest thereon, at the Stated Rate from the time of demand for its payment
until ten (10) days thereafter, and at the Past Due Rate from ten (10) days
after demand until repaid, shall become a part of principal balance outstanding
under the Senior Credit Notes (Pro Rata with the respective principal balances
of the Senior Credit Notes at the time of expenditure) and shall be secured by
all security for the Senior Credit Notes.
 
(g)  No failure on the part of the Agent or any Lender to exercise, and no delay
in exercising, any right, power or remedy provided under any of the Facilities
Papers, at law or in equity shall operate as a waiver of it, nor shall any
single or partial exercise by the Agent or any Lender of any right, power or
remedy provided under any of the Facilities Papers, at law or in equity preclude
any other or further exercise of it or the exercise of any other right, power or
remedy. The remedies herein provided are cumulative and are not exclusive of any
remedies provided at law or in equity.
 

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11.4.  Application of Proceeds. The proceeds of any sale or other enforcement of
the Agent’s security interest in all or any part of the Collateral shall be
applied by the Agent:
 
First, to the payment of the costs and expenses of such sale or enforcement,
including reasonable compensation to the Agent’s and the Lenders’ counsel and
agents, and all expenses, liabilities and advances made or incurred by or on
behalf of the Agent in connection therewith;

Second, to the payment of any accrued and unpaid fees and other amounts due
(other than principal and interest) under the Senior Credit Notes, this
Agreement, the Custody Agreement or the other Facilities Papers;

Third, to the payment of the Swing Line Note (if then outstanding);

Fourth, to the payment of interest accrued and unpaid on the Senior Credit
Notes, Pro Rata;

Fifth, to the payment of the outstanding principal balances of the Senior Credit
Notes, Pro Rata; and

Finally, to the payment to the Company, or to its successors or assigns, or as a
court of competent jurisdiction may direct, of the surplus, if any, then
remaining from such proceeds.

If the proceeds of any such sale are insufficient to cover the costs and
expenses of such sale, as aforesaid, and the payment in full of the Senior
Credit Notes and all other amounts due under the Facilities Papers, then the
Company shall remain liable for any deficiency, and shall be obligated to pay it
without notice or demand.

11.5.  Agent Appointed Attorney-in-Fact. The Agent is hereby appointed the
attorney-in-fact of the Company, with full power of substitution, for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instruments that the Agent may deem necessary or advisable to
accomplish this Agreement’s purposes, which appointment as attorney-in-fact is
coupled with an interest and irrevocable for so long as any of the Obligations
or the Commitments are outstanding, although the Agent 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 Agent has not
declared in writing to have been cured or waived. Without limiting the
generality of the foregoing, the Agent shall have the right and power, either in
the name of the Company or both, or in its own name, to (a) give notices of its
security interest as agent and representative of the Lenders in the Collateral
to any Person, (b) endorse in blank, to itself or to a nominee all items of
Collateral that are transferable by endorsement and are payable to the order of
the Company, including canceling, completing or supplying any unneeded,
incomplete or missing endorsement of the Company and any related assignment, and
(c) receive, endorse, collect and receipt for all checks and other orders made
payable to the order of the Company representing any payment of account of the
principal of or interest on any Collateral or their proceeds (including any
securities), or the proceeds of sale of any of the Collateral, or any payment in
respect of any hedging arrangement or device, and to give full discharge for
them.
 

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11.6.  Right of Setoff. In addition to any rights and remedies of the Agent and
the Lenders provided by this Agreement and by applicable law, the Lenders shall
have the right, without prior notice to the Company — any such notice being
expressly waived by the Company to the greatest extent permitted by applicable
law — upon any amount’s becoming due from the Company pursuant to this Agreement
or any of the other Facilities Papers (whether at the stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all Property and 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 Agent, any
Lender or any Lender Affiliate to or for the credit or the account of the
Company, for the ratable benefit of all Lenders in the proportion that the
advanced and unpaid principal balance at the time of the Senior Credit Note(s)
held by each bears to the sum of the outstanding principal balances of all of
the Senior Credit Notes at the time of the setoff, appropriation or application,
irrespective of whether or not the Agent or any Lender shall have made any
demand hereunder and whether or not said obligations and liabilities shall have
matured; provided that such right of setoff shall not apply to any deposit of
escrow monies being held on behalf of the Customers under Pledged Loans or on
behalf of other third Persons that are not Affiliates of the Company. The Agent
and the Lenders may set off cash, the proceeds of the liquidation of any
Collateral and all other sums or obligations owed by the Agent, the Lenders or
their Affiliates to the Company against all of the Company’s obligations to the
Agent, the Lenders or their Affiliates, whether under this Agreement or any of
the other Facilities Papers, whether or not such obligations are then due,
without prejudice to the Agent’s, the Lenders’ or their Affiliates’ rights to
recover any deficiency. The Lenders agree promptly to notify the Company after
any such setoff and application made by the Agent, any Lender or any of Lender
Affiliate; provided that the failure to give such notice shall not affect the
validity of such setoff and application.
 
12  REIMBURSEMENT OF EXPENSES; INDEMNITY
 
The Company agrees to:

(a)  pay all of the Agent’s and Lender’s, out-of-pocket costs and expenses
incurred, including reasonable attorneys’ fees, in connection with the
negotiation, documentation, amendment, waiver and administration of this
Agreement, the Senior Credit Notes, the Custody Agreement and other Facilities
Papers, including up to a maximum of Five Thousand Dollars ($5,000) per year of
the cost of audits of Collateral by a third party auditor selected by the Agent;
 

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(b)  pay all of the Agent’s, and each Lender’s, out-of-pocket costs and
expenses, including reasonable attorneys’ fees, after the occurrence of any
Default or Event of Default in connection with the enforcement of this
Agreement, the Senior Credit Notes, the Custody Agreement and other Facilities
Papers and the making and repayment of the Advances and the payment of interest
thereon;
 
(c)  pay, and hold the Agent, the Lenders and any other owners or holders of any
of the Senior Credit Notes harmless from and against, any and all present and
future stamp, documentary and other similar taxes with respect to the foregoing
matters and save them each harmless from and against any and all liabilities
with respect to or resulting from any delay or omission to pay such taxes;
 
(d)  pay all of the Agent’s Fees and Custodian’s Fees under this Agreement, the
Custody Agreement and the other Facilities Papers; and
 
(e)  indemnify, pay, defend and hold harmless the Agent, each Lender, each
subsequent owner or holder of any of the Senior Credit Notes and any of their
respective officers, directors, employees or agents (the “Indemnified Parties”)
from and against the “Indemnified Liabilities”, which means any and all claims,
liabilities, obligations, losses, damages, penalties, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys’ fees and
disbursements) of any kind whatsoever which may be imposed upon, incurred by or
asserted against any of the Indemnified Parties in any way relating to or
arising out of any of the Facilities Papers or any of the transactions
contemplated thereby to the extent that any such Indemnified Liabilities result
(directly or indirectly) from any claims made, or any actions, suits or
proceedings commenced or threatened, by or on behalf of any creditor (excluding
any of the Indemnified Parties), security holder, shareholder, customer
(including any Person having any dealings of any kind with the Company),
trustee, conservator, receiver, director, officer, employee and/or agent of the
Company acting in such capacity, the Company or any Governmental Authority or
any other Person; provided that to the extent, if any, that any of such claims,
liabilities, etc. is caused by any Indemnified Party’s gross negligence or
willful misconduct, the indemnity payable to that Indemnified Party shall be
equitably and proportionately reduced, although to the full extent permitted
under applicable Law, such indemnity shall not be reduced on account of such
claims, liabilities, etc. to any extent (i) owed, in whole or in part, under any
claim or theory of strict liability, or (ii) caused or contributed to by any
Indemnified Party’s sole or concurrent ordinary negligence that does not amount
to gross negligence or willful misconduct, it being the Company’s intention to
hereby indemnify the Indemnified Parties against their own strict liability and
their own sole or concurrent ordinary negligence.
 

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13  RELATIONSHIPS AMONG THE AGENT AND THE LENDERS
 
13.1.  Agent’s Duties. In its capacity as lead lender and servicer of the Loan
and until the Loan is fully paid and satisfied, the Agent shall:
 
(a)  hold the Facilities Papers (other than the Senior Credit Notes, each of
which shall be held by and belong solely to its payee) and (by the Custodian’s
holding the Collateral as bailee for the Agent, as agent and representative of
the Lenders) the Collateral for the benefit of itself and each other Lender, and
each Lender (including JPMorgan) shall be deemed to have an interest in the
Facilities Papers (other than the Senior Credit Notes, as stated above) and the
Collateral on any day in proportion to its Pro Rata interest in the Loan on that
day;
 
(b)  send timely bills to the Company for accrued interest, the Facility Fee and
other sums due and receive all payments of principal, interest and other sums on
account of the Loan or with respect to it;
 
(c)  use reasonable diligence to obtain from the Company and promptly remit to
each Lender such Lender’s Pro Rata share of interest, principal and other sums
received by the Agent on account of the Loan or with respect to it, in
accordance with this Agreement;
 
(d)  use reasonable diligence to recover from the Company all expenses incurred
that are reimbursable by the Company, and promptly remit to each Lender its Pro
Rata share (if any) thereof;
 
(e)  enforce the terms of this Agreement, including, with the approval or at the
direction of all of the Lenders, the remedies afforded the Lenders pursuant to
Section 11.3(c);
 
(f)  hold all security interests ratably for itself as a Lender and as agent and
representative of the other Lender(s); and
 
(g)  request from the Company, and promptly forward to the other Lenders, such
information as the other Lenders may reasonably request Agent to obtain from the
Company, consistent with the terms of this Agreement.
 
13.2.  Actions Requiring All Lenders’ Consent. Without the written consent or
ratification of all Lenders, the Agent shall not:
 
(a)  increase the Aggregate Committed Sum or increase the maximum principal
amount of the Loan above the Aggregate Committed Sum.
 
(b)  agree to any material reduction in the interest rate or fee provisions of
this Agreement, excluding the provisions relating to the Agent’s Fee or the
Custodian’s Fees.
 
(c)  release any material Lien held under the Facilities Papers other than in
accordance with the Facilities Papers.
 

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(d)  accept, and fund any Advance against the value of, any Collateral other
than the types listed in Section 6.1.
 
(e)  change any Lender’s Pro Rata share of the Loan other than in accordance
with the express provisions of the Facilities Papers.
 
(f)  agree to any change in the nature of the Lenders’ respective Commitments
from several to joint, in whole or in part.
 
(g)  agree to any change to the definition of “Required Lenders”.
 
(h)  extend the Maturity Date, the Termination Date or the due date of any
required payment other than in accordance with the express provisions of the
Facilities Papers.
 
(i)  agree to any change in this Section or in Section 13.3.
 
13.3.  Actions Requiring Required Lenders’ Consent. Without the written consent
or ratification of the Required Lenders, the Agent shall not:
 
(a)  notify the Company that the Commitments are terminated or that the maturity
of all or any part of the Loan has been accelerated unless an Event of Default
described in any of Sections 11.1(f), 11.1(g), 11.1(j), 11.1(m), 11.1(n),
11.1(o), 11.1(p) or 11.1(q) has occurred.
 
(b)  agree to any change to any of the conditions precedent to Advances
specified in Sections 7.1 and 7.2.
 
(c)  exercise any of the remedies for default described in Section 11.3(c).
 
(d)  waive any material Event of Default under the Facilities Papers.
 
(e)  make or consent to any materially adverse amendment, modification or waiver
of any of the terms, covenants, provisions or conditions of the Facilities
Papers.
 
(f)  approve any Change of Control.
 
(g)  consent to the Company’s incurring conditional repurchase, indemnity or
other recourse obligations in respect of Mortgage Loans sold or any other
contingent liabilities described or referred to in Section 10.2 in the aggregate
greater than One Million Dollars ($1,000,000).
 
(h)  except as otherwise expressly provided for in this Section, cause or permit
any material change in the terms of any affirmative or negative covenants in
this Agreement.
 
(i)  increase the Wet Warehousing Sublimit or any of the respective percentages
of the Credit Line that may be borrowed to finance Jumbo Loans or Super Jumbo
Loans.
 

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(j)  cause or permit any change in the eligibility standards for Collateral
hereunder or change the definition of any type of Eligible Collateral, provided
that, notwithstanding any other provision of this Agreement to the contrary, the
Agent may in its discretion approve as Eligible Collateral any Collateral that
does not satisfy such eligibility standards and that has aggregate Collateral
Value of up to Ten Million Dollars ($10,000,000) at the time of approval.
 
(k)  approve the Company’s declaration or payment of any dividend or
distribution directly or indirectly to the Company’s shareholders when any
Default or Event of Default has occurred and is continuing or, after the payment
of which dividend or distribution, would exist, as prohibited by Section
10.7(e).
 
(l)  approve the Company’s making any advance to (or declining or deferring any
payment due from) any stockholder if at the time of or immediately after such
action the Company’s Adjusted GAAP Net Worth would be less than the minimum
amount specified in Section 10.7(a).
 
13.4.  Agent’s Discretionary Actions. Except as provided in Sections 13.2 and
13.3, in its capacity as lead lender and servicer and without seeking or
obtaining the consent of any of the other Lenders (although it may elect to
obtain such consent before acting it if deems that desirable), the Agent may:
 
(a)  agree or consent to any change in the handling of the Collateral which in
the Agent’s reasonable judgment is unlikely to have a material adverse effect on
any of the Central Elements in respect of the Company or any of its
Subsidiaries;
 
(b)  release, reconvey or change, in whole or in part, any Collateral or Lien
which is required to be released or reconveyed in accordance with the Facilities
Paper;
 
(c)  approve any new Approved Investor proposed by the Company with notice to
the Lenders (and the Agent will promptly provide to any Lender that requests it
a current list of Approved Investors); and
 
(d)  do or perform any act or thing which, in the Agent’s reasonable judgment,
is necessary or appropriate to enable the Agent to properly discharge and
perform its duties under this Agreement or the Custody Agreement, or which in
its reasonable judgment is necessary or appropriate to preserve or protect the
validity, integrity or enforceability of the Facilities Papers, the Liens
created by the Loan Papers, their priority, the Collateral or any of the Central
Elements in respect of the Company, or to preserve and protect the interest of
the Lenders in any of the foregoing.
 
13.5.  Lenders’ Cooperation. The Lenders agree to cooperate among themselves and
with the Agent and from time to time upon the Agent’s request, to execute and
deliver such papers as may be reasonably necessary to enable the Agent, in its
capacity as lead lender and servicer, to effectively administer and service the
Loan and each Lender’s Senior Credit Note in the manner contemplated by this
Agreement.
 

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13.6.  Lenders’ Sharing Arrangement. Each of the Lenders agrees that if it
should receive any amount (whether by voluntary payment, realization upon
security, the exercise of the right of set-off, or otherwise) which is
applicable to the payment of the principal of, or interest or fees on, the
Advances, of an amount that with respect to the related sum or sums received (or
receivable) by the other Lenders is in greater proportion than that Lender’s Pro
Rata ownership of the Loan, then such Lender receiving such excess amount shall
purchase from the other Lenders an interest in the obligations of the Company
under this Agreement or any of the Facilities Papers in such amount as shall
result in a proportional participation by all of the Lenders in such excess
amount; provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery; and further provided that the
provisions of this Section 13.6 shall not apply to the Agent’s Fees under this
Agreement or to any fees which the Agent or successor custodian might be paid
pursuant to the Custody Agreement.
 
13.7.  Lenders’ Acknowledgment. Each Lender other than JPMorgan hereby
acknowledges that JPMorgan has made no representations or warranties with
respect to the Loan other than as expressly set forth in this Agreement and that
JPMorgan shall have no responsibility (in its capacity as a Lender, the Agent,
the Custodian or in any other capacity or role) for:
 
(a)  the collectability of the Loan;
 
(b)  the validity, enforceability or any legal effect of any of the Facilities
Papers, any Collateral papers or any insurance, bond or similar device
purportedly protecting any obligation to the Lenders or any Collateral; or
 
(c)  the financial condition of the Company or any of its Subsidiaries or
Affiliates, the status, health or viability of any industry in which any of them
is involved, the prospects for repayment of the Loan, the value of any
Collateral, the effectiveness of any of the provisions of the Facilities Papers
(including the financial covenants, tests and hedging requirements) or any
aspect of their implementation or administration at any time to reduce or
control risks of any type, to produce returns, profits, yields or spreads or to
reduce or control losses or the accuracy of any information supplied by or to be
supplied in connection with any of the Company or any of its Subsidiaries or
Affiliates, or otherwise with respect to the Loan, any Collateral or any source
of equity or other financing for any of such companies.
 
13.8.  Agent’s Representations to Lenders. The Agent hereby represents and
warrants to the Lenders (other than itself) that:
 
(a)  the Agent has delivered to each Lender true copies of the originals of
those Facilities Papers which have been specifically requested by that Lender;
and
 
(b)  the Agent has no current actual knowledge that any Event of Default has
occurred and is continuing on the Effective Date.
 

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13.9.  Agent’s Duty of Care, Express Negligence Waiver and Release.  At all
times until the Loan has been paid in full, the Agent shall exercise the same
degree of care in handling the Loan and its Collateral as JPMorgan exercises
with respect to loans that are held solely by JPMorgan for its own account, and
the Agent, in its capacity as lead lender and servicer shall have no
responsibility to the Lenders other than to exercise such standard of care and,
in any event, JPMorgan shall have no liability with respect to any other
Lender’s Pro Rata interest in the Loan except for JPMorgan’s own fraud, gross
negligence or willful misconduct. Except in the case of its own fraud, gross
negligence or willful misconduct, neither the Agent, any Lender, nor any of
their officers, directors, employees, attorneys or agents shall be liable for
any action taken or omitted to be taken by it or them under this Agreement, the
Custody Agreement or any of the other Facilities Papers reasonably believed by
it or them to be within the discretion or power conferred upon it or them by the
Facilities Papers or be responsible for consequences of any error of judgment,
the Lenders expressly intending to hereby waive and release all present and
future claims and rights against the Agent (i) owed, in whole or in part, under
any claim or theory of strict liability, or (ii) for damages or injuries caused
or contributed to by any Indemnified Party’s sole or concurrent ordinary
negligence that does not amount to gross negligence or willful misconduct, it
being the Lenders’ intention to hereby indemnify the Indemnified Parties against
the Indemnified Parties’ own strict liability and the Indemnified Parties’ own
sole or concurrent ordinary negligence. Except as otherwise specifically and
expressly set forth in this Agreement, the Agent shall not be responsible in any
manner to anyone for the effectiveness, enforceability, genuineness, validity or
the due execution of this Agreement, any supplement, amendment or restatement of
it or of any other Facilities Papers or for any representation, warranty,
document, certificate, report or statement made or furnished in, under or in
connection with this Agreement or any of the other Facilities Papers or be under
any obligation to anyone to ascertain or to inquire as to the performance or
observation of any of the terms, covenants or conditions of this Facilities
Agreement or of the other Facilities Papers on the part of the Company or anyone
else. Without limiting the generality of the foregoing provisions of this
Section, the Agent, in its capacities as lead lender, servicer and Custodian,
may seek and rely upon the advice of legal counsel in taking or refraining to
take any action under any of the Facilities Papers or otherwise in respect of
the Loan, its Collateral and its parties, and shall be fully protected in
relying upon such advice.
 
13.10.  Calculations of Shares of Principal and Other Sums. Except as provided
to the contrary in Section 5.5 (“Rate of Return Maintenance Covenant”), Section
5.8 (“Agent’s Fee”), Section 11.4 (“Application of Proceeds”), Section
12 (“Reimbursement of Expenses; Indemnity”) and Section 6 of the Custody
Agreement (“Custodian’s Fees”), JPMorgan’s and each other Lender’s respective
shares of principal, interest and other sums received by the Agent on account of
the Loan or with respect to it shall be calculated on the basis of each Lender’s
(including JPMorgan’s) respective Pro Rata ownership interests in the Loan from
time to time.
 
13.11.  Resignation of the Agent. The Agent, or any agent or agents hereafter
appointed, at any time may resign by giving written notice of resignation to the
Company and the Lenders and complying with the applicable provisions of this
Section 13. Upon receiving such notice of resignation, with the Company’s
consent, which consent shall not unreasonably be delayed or withheld (provided
that the Company’s consent shall not be required if a Default has occurred that
has not been cured by the Company or declared in writing by the Agent to have
been waived or any Event of Default has occurred that the Agent has not declared
in writing to have been cured or waived), a successor Agent shall be promptly
appointed by all of the Lenders by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Agent and one copy to the
successor Agent.
 

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13.12.  Effective Date of Resignation of the Agent. No resignation of the Agent
shall be effective until both (i) sixty (60) days have elapsed after notice to
the Company and the Lenders of the Agent’s election to resign and (ii) a
successor agent has been appointed pursuant to the provisions of this Section 13
and has accepted the appointment as provided in Section 13.11; provided that if
such appointment has not been so made or if the Agent’s duties have not been
assumed by the appointed successor on or before ninety (90) days after the date
of the Agent’s said notice of resignation, the Agent may cease acting as agent
and representative of the Lenders hereunder, and shall have no further
responsibility therefor, at the close of business on the tenth (10th) Business
Day after such ninety-day period.
 
13.13.  Successor Agent. Any successor Agent appointed as provided in this
Section shall execute and deliver to the Company, the Lenders and to its
predecessor Agent an instrument accepting such appointment, and thereupon the
resignation of the predecessor Agent shall become effective and such successor
Agent, without any further act, deed or conveyance, shall become vested with all
the rights and obligations of its predecessor, with like effect as if originally
named as the Agent; provided that upon the written request of the Company, all
of the Lenders or the successor Agent, the resigning Agent shall execute and
deliver (a) an instrument transferring to such successor Agent all of the rights
of the resigning Agent and (b) to such successor Agent such instruments as are
necessary to transfer the Collateral to such successor Agent (including
assignments of all Collateral or Facilities Papers). Upon the request of any
such successor Agent made from time to time, the Company shall execute any and
all papers which the successor Agent shall request or require to more fully and
certainly vest in and confirm to such successor Agent all such rights.
 
13.14.  Merger of the Agent. Any Person into which the Agent may be merged or
converted or with which it may be consolidated, or any Person surviving or
resulting from any merger, conversion or consolidation to which the Agent shall
be a party or any Person succeeding to the commercial banking business of the
Agent, shall be the successor Agent without the execution or filing of any paper
or any further act on the part of any of the parties.
 
13.15.  Participation; Assignment. 
 
(a)  Participations. Each Lender reserves the rights (i) with prior notice to
and consent of the Agent, to sell to any bank, savings and loan, savings bank,
credit union, other deposit-taking financial institution or commercial lending
institution, participations in all or any part of such Lender’s Advances, Senior
Credit Note or Commitment and (ii) with or without notice to the Company or the
Agent, and without any requirement for consent from either the Company or the
Agent, to sell participations to its own Lender Affiliates or to pledge any or
all of its interests under this Agreement to the Federal Reserve Bank.
Participants shall have no rights under the Facilities Papers other than certain
voting rights as provided below. Each Lender shall be entitled to obtain (on
behalf of its participants) the benefits of this Agreement with respect to all
participants in its Advances outstanding from time to time; provided that the
Company shall not be obligated to pay any amount in excess of the amount that
would be due to such Lender calculated as though no participation had been made.
No Lender shall sell any participating interest of less than Five Million
Dollars ($5,000,000) except to its own Lender Affiliates. No Lender shall sell
any participating interest under which the participant shall have any rights to
approve any amendment, modification or waiver of any Facilities Papers, except
to the extent such amendment, modification or waiver (i) extends the due date
for payment of any amount in respect of principal, interest or fees — other than
the Agent’s fees or Custodian’s fees — under the Facilities Papers or (ii)
reduces the interest rate or the amount of principal or fees applicable to the
Loan (except such reductions as are contemplated by this Agreement). In those
cases (if any) where a Lender grants rights to any of its participants to
approve amendments, modifications or waivers of any Facilities Papers pursuant
to the immediately preceding sentence, such Lender must include a voting
mechanism as to all such approval rights in the relevant participation
agreement(s) whereby a readily-determinable fraction of such Lender’s portion of
the Loan (whether held by such Lender or participated) shall control the vote
for all of such Lender’s portion of the Loan; provided, that if no such voting
mechanism is provided for or is fully and immediately effective, then the vote
of such Lender itself shall be the vote for all of such Lender’s portion of the
Loan. Except in the case of the sale of a participating interest to a Lender,
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 Loan.
 

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(b)  Assignments. Without any requirements for further consent of the Company,
any Lender may assign any or all of its rights and obligations under the
Facilities Papers to its own Lender Affiliates, and with the prior written
consent of the Agent and (unless an Event of Default has occurred that the Agent
has not declared in writing to have been cured or waived) the Company, which
consent of the Company will not be unreasonably withheld, and at no cost to the
Company or the Agent, any Lender may assign any or all of its rights and
obligations under the Facilities Papers to any “Eligible Assignee” — which means
(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 Agent, 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); provided that (1) no such assignment to any
Eligible Assignee shall result in a Lender’s having an aggregate Committed Sum
of less than Five Million Dollars ($5,000,000), (2) no such consent shall result
in there being more than a total of ten (10) Lenders (a participant is not a
Lender), and (3) each such assignment shall be substantially in the form of
Exhibit F, with the assignor to exchange its Senior Credit Note(s) for new
Senior Credit Note(s) and the Eligible Assignee to receive new Senior Credit
Note(s) and 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. The Company agrees that, as to any assignment to any Lender Affiliate
or if the Company consents to any such assignment to an Eligible Assignee, the
Company will cooperate with the prompt execution and delivery of documents
reasonably necessary to such assignment process to the extent that the Company
incurs no cost or expense that is not paid by the assigning Lender, including
the issuance of new Senior Credit Note(s) to the assignor (if retaining an
interest hereunder) and the Eligible Assignee immediately upon delivery to the
Company of the assignor’s Senior Credit Note(s). Upon such assignment, the
assignee shall be a Lender for all purposes under this Agreement and the other
Facilities Papers, if the assignment is an assignment of all of the assignor’s
interest in the 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 Committed Sums
shall be adjusted appropriately, and the parties agree to approve in writing a
revised and updated version of Schedule LC.
 
(c)  If any interest in this Agreement is so transferred to any Person that is
organized under the Legal Requirements of any jurisdiction other than the United
States of America or any State thereof, the transferor Lender shall cause such
Person, concurrently with the effectiveness of such transfer, (i) to represent
to the transferor Lender (for the benefit of the transferor Lender, the Agent
and the Company) that under applicable laws no taxes will be required to be
withheld by the Agent and the Company or the transferor Lender with respect to
any payments to be made to such Person under this Agreement, (ii) to furnish to
each of the transferor Lender, the Agent and the Company 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 transferor Lender, the Agent, the
Company) to provide the transferor Lender, the Agent, the Company 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 exe-cuted and completed by such Person and to
comply from time to time with all applicable Legal Requirements with regard to
such withholding tax exemption.
 

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(d)  The Company shall not be required to incur any cost or expense incident to
any sale to a Person of any interest in the Facilities pursuant to this Section
and all such costs and expenses shall be for the account of the Lender selling
its rights in the Loan to such Person.
 
(e)  The Agent and the Lenders are the only Beneficiaries of this Section. Other
than the provisions of Section 13.15, this Section is intended to bind and
benefit only JPMorgan and the other Lenders, and does not benefit and shall not
be enforceable by the Company or any other Person whatsoever.
 
14  NOTICES
 
All notices, demands, consents, requests and other communications required or
permitted to be given or made hereunder (collectively, “Notices”), except as
otherwise specifically provided in this Agreement, shall be in writing and shall
be either (a) delivered in person, or (b) mailed, by certified, registered or
express mail, postage prepaid, addressed to the respective parties hereto at
their respective addresses specified below, or (c) sent in a prepaid overnight
delivery envelope via a nationally-recognized courier service (such as Federal
Express, Airborne Express, United Parcel Service, Purolator, DHL Worldwide
Express or Network Courier Service) that provides weekday next-day delivery
service to the addressee’s location, (d) telecopied to their respective telecopy
numbers (with a paper copy mailed the same day as aforesaid) as hereinafter set
forth or (e) emailed and displayed or acknowledged as received as hereinafter
set forth; provided that any party may change its address for notice by
designating such party’s new address in a Notice to the sending party given at
least five (5) Business Days before it shall become effective. All Notices shall
be conclusively deemed to have been properly given or served when received in
person, regardless of how sent. Regardless of when received, all Notices shall
be conclusively deemed to have been properly given or served if addressed in
accordance with this Section and (1) if mailed, on the second (2nd) Business Day
after being deposited in the mails, or (2) if sent by nationally-recognized
courier service, on the next Business Day or (3) if faxed before the close of
business at the recipient’s location on a Business Day, when faxed — or if faxed
after the close of business at the recipient’s location or on a day that is not
a Business Day, on the next Business Day thereafter — to the fax number set
forth below (provided that a paper copy is mailed on the same day as aforesaid)
or (4) if e-mailed, when either (a) the text of such Notice is legibly displayed
on the recipient’s computer monitor or any text-containing files attached are
available to the recipient and readily available to be read by the recipient or
(b) the recipient by any means or method acknowledges receipt of such e-mail:

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If to the Company:

E-Loan, Inc.
6230 Stoneridge Mall Road
Pleasanton, California 94588
Attention: Mark Lefanowicz, President and Chief Operating Officer
Telephone: (925) 730-2100
Fax:  (925) 520-6200
email: markl@eloan.com 

with a copy to:

E-Loan, Inc.
6230 Stoneridge Mall Road
Pleasanton, California 94588
Attention: General Counsel
Telephone: (925) 847-6331
Fax: (925) 520-1099
email: edg@eloan.com 

If to the Agent:

JPMorgan Chase Bank, N.A.
707 Travis, 6th Floor North
Houston, Texas 77002 (for messenger deliveries)
P. O. Box 2558
Houston, Texas 77252 (for mail deliveries)
Attention: Cynthia E. Crites, Corporate Mortgage
            Finance Group
Telephone: (713) 216-4425
Fax:  (713) 216-1567, with fax copy to (713) 216-3198 attention: Julie Lowery
email:  cynthia.e.crites@jpmorganchase.com and julie.lowery@jpmorganchase.com 

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with a copy to:

JPMorgan Chase Bank, N.A.
1111 Fannin, 12th Floor
Houston, Texas 77002
Attention: Ms. Bea Delgado, Mortgage Banking Warehouse Services
Telephone: (713) 427-6455
Fax:  (713) 427-6453
email:  bea.r.delgado@jpmorganchase.com

If to JPMorgan in its capacity as a Lender:

JPMorgan Chase Bank, N.A.
ABA No. 113000609
707 Travis, 6th Floor North
Houston, Texas 77002
Attention: Cynthia E. Crites, Corporate Mortgage
Finance Group
Telephone:  (713) 216-4425
Fax:   (713) 216-1567, with fax copy to (713) 216-3198 attention: Julie Lowery
email:   cynthia.e.crites@jpmorganchase.com and julie.lowery@jpmorganchase.com

If to the other Lenders, at the addresses shown on Schedule 14.

15  MISCELLANEOUS
 
15.1.  Terms Binding Upon Successors; Survival of Representations. The terms and
provisions of this Agreement shall bind and benefit the parties hereto and their
respective successors and assigns; provided that the Company may not assign or
delegate any of their rights, benefits or duties under any of this Agreement,
and any attempted assignment made without the written consent or written
confirmation of all the Lenders shall be void. All representations, warranties,
covenants and agreements herein contained on the part of the Company shall
survive the making of any Advance and the execution of the Senior Credit Notes
and shall be effective so long as the Commitments are outstanding or any
obligation of the Company hereunder or under the Senior Credit Notes or any of
the other Facilities Papers remains to be paid or performed.
 
15.2.  Items to Be Satisfactory to the Agent or the Custodian. All items
required by this Agreement or the Custody Agreement to be delivered to the Agent
or to the Custodian shall be in form and content reasonably satisfactory to the
Agent or the Custodian (as the case may be) and the Agent or the Custodian may
reject any of them that do not meet the requirements of this Agreement or the
Custody Agreement.
 
15.3.  Usury Not Intended; Credit or Refund of Any Excess Payments. It is the
intent of the Company and the Agent in the exe-cution and performance of this
Agreement and the other Credit Papers to contract in strict compliance with the
usury laws of the State of New York and the United States of America from time
to time in effect. In furtherance of that purpose, the parties to this Agreement
stipulate and agree that none of the terms and provisions contained in this
Agreement or the other Credit Papers shall ever be construed to create a
contract to pay for the use, forbearance or detention of money with interest at
a rate in excess of the Ceiling Rate and that for purposes hereof “interest”
shall include the aggregate of all charges which con-stitute interest under such
laws that are contracted for, charged, taken, reserved or received under this
Agreement or any of the other Credit Papers. In the event that the maturity of
any Senior Credit Note is accelerated by reason of any election of the Agent
resulting from any Event of Default under this Agreement or otherwise, or in the
event of any required or permitted prepayment, then such consideration that
constitutes in-terest may never include more than the maximum nonusurious amount
permitted by applicable law, and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled auto-matically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on such
Senior Credit Note (or, if such Senior Credit Note shall have been paid in full,
refunded to the payor of such interest). THE PROVISIONS OF THIS SECTION SHALL
CONTROL OVER ALL OTHER PROVISIONS OF THIS AGREEMENT, THE SENIOR CREDIT NOTES AND
THE OTHER CREDIT PAPERS THAT MAY BE IN APPARENT CONFLICT HEREWITH. In the event
the Agent shall ever collect monies which are deemed to con-stitute interest at
a rate in excess of the Ceiling Rate then in effect, all such sums deemed to
constitute interest in excess of the Ceiling Rate shall be immediately returned
to the payor (or, at the option of the holders of the Senior Credit Notes,
credited against the unpaid principal of the Senior Credit Notes) upon such
determination.
 

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15.4.  This Agreement and the Other Facilities Papers. The parties intend that
the Facilities Papers be read together and construed as if they were a single
document. However, in the event of any inconsistency or conflict between this
Agreement and any of the other Facilities Papers, this Agreement shall govern
and control.
 
15.5.  No Waiver. No waiver of any Default or Event of Default shall be deemed
to be a waiver of any other Default or Event of Default. No failure to exercise
or delay in exercising any power or right under any Facilities Papers shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. No course of dealing between the Company
and the Agent or any of the Lenders shall operate as a waiver of any rights of
the Agent or any of the Lenders. No amend-ment, modification or waiver of any
provision of any Facilities Papers nor consent to any departure therefrom shall
be effec-tive unless it is in writing and signed by the Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. Except as otherwise specifically provided in
this Agreement, no notice to or demand on the Company or any other Person shall
entitle the Company or any other Person to any other or further notice or demand
in similar or other circum-stances.
 
15.6.  USA Patriot Act Notification. Each Lender hereby notifies the Company
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “USA Patriot Act”), it is
required to obtain, verify and record information that identifies the Company,
including the name and address of the Company and other information that will
allow such Lender to identify the Company in accordance with the USA Patriot
Act.
 
15.7.  Counterpart Execution; Amendments. This Agreement may be executed in one
or more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument. This Agreement may not be amended, modified or supplemented unless
such amendment, modification or supplement is set forth in a writing signed by
the parties hereto.
 

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15.8.  Governing Law, Jurisdiction and Venue. This Agreement, the Senior Credit
Notes and the other Credit Papers shall be governed by and construed in
accordance with the laws of the State of New York (without reference to its
conflicts of laws principles) and the United States of America from time to time
in effect. The Company, the Lenders and the Agent each hereby irrevocably
submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York, Manhattan Division and, only if such U.S.
District Court refuses (or has no) jurisdiction, the supreme courts of New York,
for purposes of all legal proceedings arising out of or relating to the Credit
Papers and all related transactions. To the fullest extent permitted by
applicable law, the Company, the Lenders and the Agent each irrevocably waives
any objection which he, she or it may now or hereafter have to the laying of
venue for any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum. New York, New York shall be a proper place of venue for suit hereon.
Nothing herein shall affect any applicable right of any party at any time to
initiate any suit in the United States District Court for the Southern District
of New York, Manhattan Division, or to remove any pending suit to that Court.
Nothing herein shall affect the right of the Agent to accomplish service of
process in any manner permitted by applicable law or to commence legal
proceedings or otherwise proceed against the Company in any other jurisdiction
or court.
 
15.9.  Waiver of Jury Trial. THE COMPANY, THE AGENT AND THE LENDERS EACH HEREBY
IRREVOCABLY WAIVES, 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 AGREEMENT, THE SENIOR CREDIT NOTE OR ANY OF THE OTHER FACILITIES PAPERS OR
THE TRANSACTIONS CONTEMPLATED HEREBY. This waiver of right to trial by jury is
separately given, knowingly and voluntarily, by the Company, the Agent and the
Lenders, and this waiver is intended to encompass individually each instance and
each issue as to which the right of a jury trial would otherwise accrue. The
Agent and the Lenders are each hereby authorized and requested to submit this
Agreement to any court having jurisdiction over the subject matter and the
parties hereto, so as to serve as conclusive evidence of the foregoing waiver of
the right to jury trial. Further, the Company hereby certifies that no
representative or agent of any Lender or the Agent has represented, expressly or
otherwise, to any member, manager, officer, agent or representative of the
Company that any Lender or the Agent will not seek to enforce this waiver of
right to jury trial provision.
 

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15.10.  Relationship of the Parties. This Agreement provides for the making of
Advances by the Lenders (through the Agent) in their capacities as lenders, to
the Company, as a borrower, and for the payment of interest and repayment of
principal by the Company to the Lenders (through the Agent). The relationship
between (a) the Lenders and the Agent and (b) the Company is limited to that of
creditor and secured party, on the one hand, and debtor, on the other hand. The
provisions in this Agreement and the other Facilities Papers for compliance with
financial covenants and delivery of financial statements are intended solely for
the benefit of the Lenders and the Agent to protect their interests as lenders
and lenders’ agent, respectively, in assuring payment of interest and repayment
of principal, and nothing contained in this Agreement or any of the other
Facilities Papers shall be construed as permitting or obligating any Lender or
the Agent to act as a financial or business advisor or consultant to the
Company, as permitting or obligating any Lender or the Agent to control the
Company or to conduct the Company’s operations, as creating any fiduciary
obligation on the part of any Lender or the Agent to the Company, or as creating
any joint venture, agency, or other relationship between or among any of the
parties other than as explicitly and specifically stated in this Agreement. The
Company acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation and
execution of this Agreement and the other Facilities Papers and to obtain the
advice of such counsel with respect to all matters contained in the Facilities
Papers including the provision for waiver of trial by jury. The Company further
acknowledges that it is experienced with respect to financial and credit matters
and has made its own independent decisions to apply to the Lenders for credit
and to execute and deliver this Agreement and the other Facilities Papers.
 
(The remainder of this page is intentionally blank; signature pages follow.)

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EXECUTED as of the Effective Date.
 

 E-LOAN, INC.    
 By: /s/ Matthew Roberts
 Name: Matthew Roberts
 Title: Chief Financial Officer
     

 

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 JPMORGAN CHASE BANK, N.A.,  as the Agent and as a Lender  
 By: /s/ Cynthia E. Crites
 Name: Cynthia E. Crites
 Title: Senior Vice President
     

                           

Exhibits:
Exhibit A   -    Senior Credit Note form
Exhibit B   -    Requests for Borrowing forms with Submission List forms
Exhibit C   -    form of Subordination Agreement
Exhibit D   -    list of the Company’s Subsidiaries
Exhibit E   -    form of Officer’s Certificate as to compliance or noncompliance
with
                      certain financial covenants
Exhibit F   -    form of Assignment and Assumption Agreement
Exhibit G-1                 -    opinion of outside counsel
Exhibit G-2                 -    opinion of inhouse counsel

Schedules:
Schedule AI                                       -    List of Approved
Investors
Schedule AR                                      -    list of Authorized Company
Representatives
Schedule DQ                                     -    Disqualifiers
Schedule EC                                      -    Eligible Collateral
Schedule LC           -    the Lenders’ Committed Sums
Schedule SD                    -    the Company’s existing subordinated debt
Schedule MAC                -    current Maximum Aggregate Commitment
Schedule 8.4                    -    Summary of contingent liabilities and of
material adverse changes
                                 and material unrealized losses since the
Statement Date
Schedule 8.5           -    Pending Litigation
Schedule 8.15         -    the Company’s Plans
Schedule 10.6(h)              -    specific permitted Debt
Schedule 14                                       -    list of Lenders and
Addresses for Notices

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EXHIBIT A
TO 1/05 CREDIT AGREEMENT

(The “1/05 [Lender name] Senior Credit Note”)

$_______________    Houston, TexasJanuary 4, 2005

FOR VALUE RECEIVED, E-LOAN, INC., a Delaware corporation (“Maker” or the
“Company”), promises to pay to the order of [Lender Name] (“Payee”), a [Lender
entity form], at the main Houston branch of JPMorgan Chase Bank, N.A., 712 Main
Street, Houston, Harris County, Texas 77002, or at such other place as the Agent
may hereafter designate in writing, in immediately available funds and in lawful
money of the United States of America, the principal sum of [Lender’s Committed
Sum] (or the unpaid balance of all principal advanced against this note, if that
amount is less), together with interest on the unpaid principal balance of this
note from time to time outstanding until maturity at the applicable rate(s)
provided for in the Credit Agreement (or at such lesser rate, if any, as the
holder of this note — the “Holder”, whether or not Payee is such holder — may in
its sole discretion from time to time elect to be applicable for any day or
days), and interest on all past due amounts, both principal and accrued
interest, at the Past Due Rate; provided that for the full term of this note the
interest rate produced by the aggregate of all sums paid or agreed to be paid to
Holder for the use, forbearance or detention of the debt evidenced hereby shall
not exceed the Ceiling Rate.

1.    Definitions. In addition to the definitions given above, the definitions
given in the 1/05 Senior Secured Credit Agreement dated January 4, 2005, as it
may be supplemented, amended or restated from time to time (the “Credit
Agreement”) among (a) Maker, (b) JPMorgan Chase Bank, N.A. (for itself as a
Lender and as Agent for the other Lenders) and (c) the other Lender(s) party
thereto, for capitalized terms that are used in this note shall apply here as
well as there.

2.    Rates Change Automatically and Without Notice. Without notice to Maker or
any other Person and to the full extent allowed by applicable law from time to
time in effect, the Stated Rate, the Past Due Rate and the Ceiling Rate shall
each automatically fluctuate upward and downward as and in the amount by which
the interest rate applicable to this note as provided for in the Credit
Agreement, the Past Due Rate as defined in the Credit Agreement and such maximum
nonusurious rate of interest permitted by applicable law, respectively,
fluctuate.

3.    Calculation of Interest. Interest on the amount of each advance against
this note shall be computed on the amount of that advance and from the date it
is made. All interest rate determinations and calculations by the Holder, absent
manifest error, shall be conclusive and binding.

4.    Excess Interest Will be Refunded or Credited. If, for any reason whatever,
the interest paid or received on this note during its full term produces a rate
which exceeds the Ceiling Rate, Holder shall refund to the payor or, at Holder’s
option, credit against the principal of Senior Credit Note such portion of said
interest as shall be necessary to cause the interest paid on this note to
produce a rate equal to the Ceiling Rate.

     1 of 4  

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5.    Interest Will be Spread. To the extent (if any) necessary to avoid
violation of applicable usury laws (or to minimize the extent of the violation
if complete avoidance is impossible for any reason, it being the intent and
purpose of Maker and all Holders to comply strictly with all applicable usury
and other laws), all sums paid or agreed to be paid to Holder for the use,
forbearance or detention of the indebtedness evidenced hereby shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
in equal parts throughout the full term of this note, so that the interest rate
is uniform throughout the full term of this note.

6.    Payment Schedule. Interest on and principal of this note shall be due and
payable as provided in Sections 5.1, 5.3 and 5.11 of the Current Credit
Agreement.

7.    Prepayment. Maker may prepay this note in whole or in part without penalty
or fee. Prepayments shall be applied first to accrued interest, the balance to
principal.

8.    The 1/05 Credit Agreement, this Note and its Security. This note is one of
the Senior Credit Notes, as such term is defined in the Credit Agreement, is
issued pursuant to the Credit Agreement (to which reference is made for all
purposes) and may be referred to as the “1/05 [Lender name] Senior Credit Note”,
and as it may hereafter be renewed, extended, rearranged, increased, decreased,
modified or replaced in accordance with the Credit Agreement may be referred to
as the “Current [Lender Name] Senior Credit Note”. Holder is entitled to the
benefits of and security provided for in the Credit Agreement-. Such security
includes, among other security, the security interests granted by Section 6.1 of
the Current Credit Agreement.

9.    Revolving Credit. Upon and subject to the terms and conditions of the
Credit Agreement, Maker may borrow, repay and reborrow against this note under
the circumstances, in the manner and for the purposes specified in the Credit
Agreement, but for no other purposes. Advances against this note by Payee or
other Holder shall be governed by the terms of the Credit Agreement. The unpaid
principal balance of this note at any time shall be the total of all principal
lent or advanced against this note less the sum of all principal payments and
permitted prepayments made on this note by or for the account of Maker. Absent
manifest error, Holder’s computer records shall on any day conclusively evidence
the unpaid balance of this note and its advances and payments history posted up
to that day. All loans and advances and all payments and permitted prepayments
made hereon may be (but are not required to be) endorsed by or on behalf of
Holder on the schedule which is attached as Annex I hereto (which is hereby made
a part hereof for all purposes) or otherwise recorded in Holder’s computer or
manual records; pro-vided, that any failure to make notation of (a) any
principal advance or accrual of interest shall not cancel, limit or otherwise
affect Maker’s obliga-tions or any Holder’s rights with respect to that advance
or accrual, or (b) any payment or permitted prepayment of principal or interest
shall not cancel, limit or otherwise affect Maker’s entitle-ment to credit for
that payment as of the date of its receipt by Holder.

10.    Defaults and Remedies. Any Event of Default under the Credit Agreement or
any other Facilities Papers shall constitute an Event of Default under this note
and all other Facilities Papers and shall have the consequences provided for in
the Credit Agreement which may include acceleration of the indebtedness
evidenced hereby. Subject to the terms of the Credit Agreement, Holder or the
Agent may waive any default without waiving any other prior or subsequent
default. Holder or the Agent may remedy any default without waiving the default
remedied. Holder’s or the Agent’s failure to exercise any right, power or remedy
upon any default shall not be construed as a waiver of such default or as a
waiver of the right to exercise any such right, power or remedy at a later date.
No single or partial exercise by Holder or the Agent of any right, power or
remedy hereunder shall exhaust it or shall preclude any other or future exercise
of it, and every such right, power or remedy under this note may be exercised at
any time and from time to time. No modification or waiver of any provision of
this note nor consent to any departure by Maker from its terms shall be
effective unless it is in writing and signed by Holder (or, if authorized for
that purpose by the Credit Agreement, the Agent), and then such waiver or
consent shall be effective only in the specific instance given, for the purposes
for which given and to the extent therein specified.

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11.    Legal Costs. If any Holder or the Agent retains an attorney in connection
with any such default or to collect, enforce or defend this note or any papers
intended to secure or guarantee it in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker or anyone claiming
by, through or under Maker sues any Holder in connection with this note or any
such papers and does not prevail, then Maker agrees to pay to each such Holder
and the Agent, respectively, in addition to principal and interest, all
reasonable costs and expenses incurred by such Holder or the Agent in trying to
collect this note or in any such suit or proceeding, including reasonable
attorneys’ fees.

12.    Waivers. Maker and any and all co-makers, endorsers (other than the
Holder or the Payee), guarantors and sureties severally waive notice (including,
but not limited to, notice of intent to accelerate and notice of acceleration,
notice of protest and notice of dishonor), demand, presentment for payment,
protest, diligence in collecting and the filing of suit for the purpose of
fixing liability and consent that the time of payment hereof may be extended and
re-extended from time to time without notice to any of them. Each such Person
agrees that his, her or its liability on or with respect to this note shall not
be affected by any release of or change in any guaranty or security at any time
existing or by any failure to perfect or maintain perfection of any lien against
or security interest in any such security or the partial or complete
unenforceability of any guaranty or other surety obligation, in each case in
whole or in part, with or without notice and before or after maturity.

13.    Not Purpose Credit. None of the proceeds of this note shall ever be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock or for the purpose of reducing or retiring any debt which was originally
incurred to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock or which would constitute
this transaction a “purpose credit” within the meaning of Regulation U, as now
or hereafter in effect.

14.    Governing Law, Jurisdiction and Venue. This note shall be governed by and
construed in accordance with the laws of the State of New York and the United
States of America from time to time in effect. Maker and all endorsers (other
than the Holder or the Payee), guarantors and sureties each hereby irrevocably
submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York, Manhattan Division, and the state district
courts of New York County, New York, for purposes of all legal proceedings
arising out of or relating to this note, the debt evidenced hereby or any loan
agreement, security agreement, guaranty or other papers or agreements relating
to this note. To the fullest extent permitted by law, Maker and all endorsers
(other than the Holder or the Payee), guarantors and sureties each irrevocably
waives any objection which he, she or it may now or hereafter have to the laying
of venue for any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum. New York, New York shall be a proper place of venue for suit on or in
respect of this note. Nothing herein shall affect the right of Maker, the Payee
or any Holder at any time to initiate any suit in the United States District
Court for the Southern District of New York, Manhattan Division, or to remove
any pending suit to that Court.
 

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 E-LOAN, INC., as maker    
 By:_________________________________
 Name:______________________________
 Title:________________________________
     

 

 
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ANNEX 1
to $____________
E-Loan, Inc.
1/05 [Lender’s name] Senior Credit Note

LOANS AND PAYMENTS OF PRINCIPAL AND INTEREST

  Date of Payment or Advance
Payment Applied on (or advance vs.) Principal
Payment Applied on Interest
Principal Balance
Interest Paid to
Name of Person Making Notation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                               
                                                                           

 
  5   

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EXHIBIT B
TO 1/05 CREDIT AGREEMENT

Request for Borrowing

[Letterhead of the Company]

[date]

JPMorgan Chase Bank, N.A.
707 Travis, 6th Floor North
Houston, Texas 77002

Attention: Cynthia E. Crites, Corporate Mortgage Finance Group

Ladies and Gentlemen:

E-LOAN, INC. (the “Company”) and JPMORGAN CHASE BANK, N.A. as a lender and as
agent (the “Agent”) for the other lender(s) who are parties to it as lenders,
and such other lenders (all such lenders, including JPMorgan Chase Bank, N.A.
being herein called the “Lenders”) together executed a 1/05 Senior Secured
Credit Agreement dated January 4, 2005 (which, as it may have been or may
hereafter be supplemented, amended or restated from time to time, is called the
“Current Credit Agreement”). Any term defined in the Current Credit Agreement
and used in this Request for Borrowing shall have the meaning given to it in the
Current Credit Agreement.

The Company currently qualifies under the Current Credit Agreement for, and
hereby requests, an Advance or Advances as set forth below to be made on
_________________, 20___ (or, if the Agent is closed that day, on the next day
when it is not).
 
 

 Single-family Warehouse Advance (Dry)  $_____________  Wet Warehousing Advance
 $_____________  Total Borrowing  $_____________

                

After giving effect as required by the Credit Agreement to the requested
Advance, the Borrowing Base will equal or exceed the outstanding principal
balance of the Loan and such balance will not exceed the Aggregate Committed
Sum.

(Check the block for each of the following paragraphs that is applicable.)
 
|_|    This Borrowing Request includes a request for a Single-family Warehouse
Advance. If the Current Credit Agreement requires new Collateral to support the
requested Advance, (i) the Company has attached and submits herewith the
relevant Submission List(s) and (ii) the Basic Papers for all items of
Collateral described or referred to therein have been submitted — or are being
submitted concurrently herewith — to the Custodian.

    B-1   

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|_|    This Borrowing Request includes a request for a Wet Warehouse Advance. If
the Current Credit Agreement requires new Collateral to support the requested
Advance, the Company has attached and submits herewith the relevant Submission
List(s) (the Basic Papers for all such Wet Loans will be delivered to the
Custodian on or before five (5) Business Days after funding of the requested
Advance).

|_|    the Company has attached and submits herewith Submission List(s) for such
new Collateral (the Basic Papers for all such Wet Loans will be delivered to the
Custodian on or before five (5) Business Days after funding of the requested
Advance).

The Company hereby grants to the Agent a security interest in all such new
Collateral and (as to Collateral) all related Loan Papers, and they are hereby
made subject to the security interest to the Agent created by the Current Credit
Agreement, for the Pro Rata benefit of the Lenders, effective immediately.

The proceeds of the Advance should be deposited in the Company’s Note Payment
Account number 00113398961 with JPMorgan Chase Bank, N.A..

The Company acknowledges that the Agent and the Lenders will rely on the truth
of each statement in this request and its attachments in funding the requested
Advance.

No Default has occurred under the Facilities Papers that has not been cured by
the Company or declared in writing by the Agent to have been waived, and no
Event of Default has occurred under the Facilities Papers that the Agent has not
declared in writing to have been cured or waived. There has been no material
adverse change in any of the Central Elements in respect of the Company or any
of its Subsidiaries since the date of the Company’s most recent annual audited
Financial Statements that have been delivered to the Agent.

All items that the Company is required to furnish to the Agent, its designated
custodian or the Lenders for this requested Advance and otherwise have been
delivered, or will be delivered before this requested Advance is funded, in all
respects as required by the Current Credit Agreement and the other Facilities
Papers. All Collateral papers described or referred to in the Submission List(s)
(if any) submitted to the Agent with this Request for Borrowing conform in all
respects with all applicable requirements of the Current Credit Agreement and
the other Facilities Papers.

There has been no change in the information furnished to the Agent or any Lender
to enable it to verify the identity of the Company as required by Section 326 of
the USA Patriot Act except as follows:       (none)        .

The Company hereby warrants and represents to the Agent and the Lenders that
none of the Collateral (including, but not limited to, Collateral described or
referred to in this request) is pledged to any Person other than the Agent or
supports any borrowing or repurchase agreement funding other than Borrowings
under the Current Credit Agreement.

     B-2  

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The undersigned officer hereby certifies that all of the Company’s
representations and warranties (a) in the Current Credit Agreement and all of
the other Facilities Papers (except only to the extent that (i) such a
representation or warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have been changed by transactions or
conditions contemplated or expressly permitted by the Facilities Papers), (b) in
this Request for Borrowing, are true and correct on the date of this Request for
Borrowing and (c) that the Company qualifies for funding of the requested
Advance.
 

 E-LOAN, INC.  
 By:_________________________________
 Name:______________________________
 Title:________________________________
     

 
Attached:
Submission List (for Eligible Single-family Collateral, Dry Loans and/or Wet
Loans)

 
 
   B-3  

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SUBMISSION LIST FOR SINGLE FAMILY COLLATERAL

Date:________

TO:
JPMorgan Chase Bank, N.A.
1111 Fannin, 12th Floor
Houston, Texas 77002

Attention: Ms. Wanda Carr, Mortgage Banking Warehouse Services
Phone: (713) 427-6391
Fax: (713) 427-6449
email: wanda.carr@jpmorganchase.com

FROM:
E-Loan, Inc.
6230 Stoneridge Mall Road
Pleasanton, California 94588
Attention:____________                            
Phone: ______________
Fax: ________________
email: _______________           

E-Loan, Inc. submits the following list of Single-family Loans in support of the
Request for Borrowing dated __________ to which this Submission List is attached
and hereby pledges them to the Agent (for itself and as agent for the other
Lenders):

BRANCH NUMBER
LOAN NUMBER
BORROWER OR CUSTOMER NAME
NOTE DATE
NOTE LOAN AMOUNT
LOAN TYPE
         
 
         
 
         
 
         
 
         
 
         
 
         
 
         
 
         
 
         
 
                                                                               
                           

 
  B-4   

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EXHIBIT C
TO 1/05 CREDIT AGREEMENT

SUBORDINATION OF DEBT AGREEMENT IN
FAVOR OF THE AGENT AND LENDERS
UNDER 1/05 SENIOR SECURED CREDIT AGREEMENT

_________________, 200__

TO: JPMorgan Chase Bank, N.A. (“JPMorgan”), as a lender and as Agent and
representative (the “Agent”) of the lenders (the “Lenders”)

707 Travis Street, 6th Floor North
Houston, Texas 77002

The undersigned (each of whom is hereinafter referred to as a “Creditor”),
creditors of E-Loan, Inc. (the “Company”), a Delaware corporation, desire that
JPMorgan and the other Lenders named in the 1/05 Senior Secured Credit Agreement
dated January 4, 2005 among the Company, the Agent and the Lenders — such credit
agreement, as it may have been or may hereafter be supplemented, amended or
restated being hereinafter called the “Credit Agreement” — extend or continue to
extend such financial accommodations to the Company as the Company may request
and as the Lenders and the Agent may deem proper. For the purpose of inducing
the Lenders to grant, continue or renew such financial accommodations, and in
consideration thereof, the undersigned Creditors irrevocably, unconditionally
and presently agree as follows:

1.    Amount of the Debt Subordinated Herein. The Company is presently indebted
to the Creditors in the principal amounts set forth below:

Creditor
Principal Amount of Company Debt
 
$
       
 Total
$

2.    Subordination. All claims of each Creditor against the Company now or
hereafter existing are and shall be at all times SUBJECT, SUBORDINATE AND
INFERIOR, both in right of payment and lien priority, to any and all claims,
whether now or hereafter existing and however created or evidenced, which the
Agent or the Lenders has or may have against the Company arising out of or
relating to the Credit Agreement (and all extensions, renewals, increases,
decreases, modifications, replacements and substitutions of or for any such
claims, such claims and all such extensions, etc. being herein called the
“Senior Obligations”), for so long as any Senior Obligations shall exist. So
long as no Default or Event of Default shall have occurred under the Credit
Agreement and so long as no other default shall have occurred in payment or
performance of any of the Senior Obligations, payments of interest and principal
on the claims of Creditors may be made at their respective scheduled maturity
dates (it being understood that no prepayment shall be made of such claims and
no modification or acceleration, for default or otherwise, of such maturity
dates shall be permitted). If a Default or an Event of Default shall occur under
the Credit Agreement or if any other default shall occur in payment or
performance of any of the Senior Obligations, then and for so long as (a) such
Default shall not have been cured or waived before it has become an Event of
Default or (b) the Agent shall not have declared in writing that such Event of
Default or other default (if any) has been cured or waived, no payment of
interest or premium on any of the claims of Creditors and no payment of
principal of any of the claims of creditors, whether or not then due, shall be
made without the prior written consent of the Agent, and any payment made during
such time shall (i) be held in trust for the benefit of the Lenders, and (ii)
immediately be paid over by its recipient to the Agent for application on the
obligations of the Company to the Lenders and the Agent in accordance with the
provisions of the Credit Agreement, without notice or demand. The subordination
of claims of Creditors made hereby shall remain in effect so long as there shall
be outstanding any Senior Obligation of the Company to any of the Lenders or the
Agent (for this purpose, the Company shall be deemed obligated to the Lenders
and the Agent so long as any of the Lenders shall have outstanding any
commitment under the Credit Agreement or any other Facilities Papers to make any
loan or extend any other financial accommodations to the Company or any of its
successors, whether or not any such loan or financial accommodation shall have
been made, advanced or extended.)

    -1-   

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3.    Enforcement or Assignment of Subordinated Debt or Liens. For so long as
any claim of the Agent or any Lender against the Company or any commitment of
any of the Lenders to extend credit or other financial accommodations to the
Company is in existence, the Creditors and each of them will not (i) sue upon,
any claim or claims now or hereafter existing which they or any of them may hold
against the Company or any of its Affiliates (an “Affiliate” being an entity
that directly or indirectly controls, is controlled by or is under common
control with, the Company); (ii) sell, assign, transfer, pledge, hypothecate or
encumber such claim or claims except expressly subject to this Agreement; (iii)
enforce any lien they or any of them may now or in the future have on any
property, real or personal, of the Company or any other party to the Credit
Agreement, as security for the payment of any debt owing by the Company or such
party to them or any one or more of them until the Senior Obligations shall have
been fully paid and satisfied and/or (iv) join in or in any way directly or
indirectly induce any petition in bankruptcy, assignment for the benefit of
creditors or creditors’ agreement, except as directed by the Agent or the
Lenders.

4.    Direction to Pay Over Claims and Assignment. In case of any assignment by
the Company for the benefit of creditors, or in the case of any bankruptcy
proceedings instituted by or against the Company, or in case of the appointment
of any receiver for the Company’s business or assets, or in case of any
dissolution or winding up of the affairs of the Company, the Company and any
assignee, trustee in bankruptcy, receiver or other person or persons in charge,
are hereby directed to pay to the Agent the full amount of all of the Agent’s
and the Lenders’ claims against the Company before making any payment of
principal or interest to the undersigned Creditors, or any of them, and insofar
as it may be necessary to accomplish that purpose, the undersigned Creditors,
and each of them, hereby sell, transfer, set over and assign to the Agent and
the Lenders all claims they may now or hereafter have against the Company and in
any security therefor, and the proceeds thereof, and all rights to any payments,
dividends or other distributions arising therefrom. If any of the undersigned
Creditors does not file a proper claim or proof of debt in the form required in
such proceeding prior to thirty (30) days before the expiration of the time to
file such claim in such proceeding, then the Agent has the right (but no
obligation) to do so and is hereby authorized to file an appropriate claim or
claims for and on behalf of such person.

    -2-   

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5.    Subrogation. Upon the payment by them in full of all Senior Obligations,
the Creditors shall be subrogated to the rights of the Lenders to receive
payments or distributions of cash, property or securities of the Company
applicable to Senior Obligations until the Creditors’ claims shall have been
paid in full, and, for the purposes of such subrogation, no payments or
distributions of cash, property or securities to or for the benefit of the
Creditors pursuant to this Agreement which would otherwise have been paid to the
Lenders shall be deemed to be a payment by the Company to or for the account of
the Creditors, it being understood that the provisions of this Subordination
Agreement are solely for the purpose of defining the relative rights of the
Lenders and the Creditors.

If any payment or distribution to which the Creditors would otherwise have been
entitled but for the provisions of this Agreement shall have been applied,
pursuant to the provisions of these terms of subordination, to the payment of
all amounts payable under the Senior Obligations, then and in such case, the
Creditors shall be entitled to receive from the Lenders at the time outstanding
any payments or distributions received by the Lenders in excess of the amount
sufficient to pay all amounts under or in respect of the Senior Obligations in
full.

6.    Obligations to Creditors not Impaired; Provisions Define Relative Rights.
The provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the Creditors on the one hand and the Lenders on
the other hand. Nothing contained in this Agreement shall (i) impair or affect,
as among the Company and its creditors (other than the Lenders and the
Creditors), the obligation of the Company to pay the claims of the Creditors
when the same shall become due and payable in accordance with their terms, or
(ii) affect the relative rights against the Company of the Creditors and the
other creditors of the Company (other than the Lenders) or (iii) prevent any
Creditor from exercising all remedies otherwise permitted by applicable law upon
default under the instrument or instruments governing the Creditors’ claims,
pursuant to the rights, if any, under this Agreement of the Lenders to receive
cash, property and securities otherwise payable or deliverable to the Lenders or
the Agent.

7.    Proofs of Claim. The Creditors may file such proofs of claim and other
papers or documents or may be necessary or advisable in order to have their
claims allowed in any judicial proceedings relative to the Company (or any other
obligor on the Creditors’ claims, including any guarantor), its creditors or its
property. If any Creditor has not been paid in full, such Creditor shall (i)
file such claim, proof of claim or similar instrument on behalf of the Lenders
as the Lenders’ interests may appear and (ii) take all such other actions as may
be appropriate to insure that all payments and distributions made in respect of
any such proceedings are made to the Lenders as their interests may appear.

     -3-  

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8.    Agreement Unaffected by Changes, Etc. Without consent of, notice to or
incurring responsibility to any Creditor and without impairing or releasing any
Creditor’s covenants and obligations hereunder, upon or without any terms or
conditions and in whole or in part, the Lenders may (i) change any payment due
date or amount, (ii) renew, change or increase any Senior Obligations or any
aspect of the security therefor, (iii) sell, exchange, release, surrender,
realize upon or otherwise deal in any manner or order any present or future
security for any Senior Obligations, (iv) release anyone in any manner or
capacity liable on or for any Senior Obligations, (v) exercise or not exercise
any rights against the Company, any Creditor or anyone else, (vi) settle or
compromise any of the Senior Obligations or subordinate any part of them to any
other part and/or (vii) apply any sums received from anyone to any part of the
Senior Obligations, and the provisions of this Agreement shall apply to the
Senior Obligations as changed, extended, renewed, altered or increased in any
respect and in any manner.

9.    Liability. For violation of this Agreement, the undersigned Creditors
shall be jointly and severally liable to the Agent and the Lenders for all loss
and damage sustained by reason of such breach, and upon any such violation, the
Agent and the Lenders may accelerate the maturity of its claims against the
Company, at their option.

10.    Automatic Reinstatement. If at any time any payment made on the Senior
Obligations must be returned for any reason (including the order of any
bankruptcy court), this Agreement shall be automatically reinstated to the same
effect as if the affected payment(s) had not been made.

11.    Governing Law, Binding Effect and Assignments. This Agreement shall be
governed in all respects by the laws of the State of New York and shall bind and
benefit the undersigned, the Agent, the Lenders and the Company, their
respective heirs, executors, administrators, personal representatives, trustees,
receivers, conservators, successors and assigns and anyone claiming by, through
or under any of them. This Agreement and any claim or claims of the Agent or any
of the Lenders pursuant hereto may be assigned by the Agent or such Lender (as
the case may be), in whole or in part, at any time, without notice to any of the
undersigned Creditors or the Company.

(The remainder of this page is intentionally blank; unnumbered signature page(s)
follow.)

 
 
  -4-   

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 _________________________________
 
 By:______________________________
 Name:___________________________
 Title:_____________________________
 
 Date:_____________________________
 

  
                     

 
 
  5   

--------------------------------------------------------------------------------

 

 
 _________________________________
 
 By:______________________________
 Name:___________________________
 Title:_____________________________
 
 Date:_____________________________
 

 
 
   -6-  

--------------------------------------------------------------------------------

 

 
 _________________________________
 
 By:______________________________
 Name:___________________________
 Title:_____________________________
 
 Date:_____________________________
 

                       

 
 
  -7-   

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ACCEPTANCE OF SUBORDINATION OF
DEBT AGREEMENT BY THE COMPANY

E-Loan, Inc. (the “Company” in the Subordination of Debt Agreement set forth on
the face hereof), hereby (i) represents and warrants to the Agent and the
Lenders that it is presently indebted to the persons executing said
Subordination of Debt Agreement in the aggregate principal amount of $         
  , (ii) accepts and consents to such Subordination of Debt Agreement, (iii)
agrees to be bound by all of the provisions thereof and (iv) agrees to recognize
all priorities and other rights granted thereby to JPMorgan Chase Bank, N.A. (in
its capacities as a Lender and as the Agent) and the other Lenders, and their
respective successors and assigns, and to perform in accordance therewith.

 
 E-LOAN, INC.
 
 By:______________________________
 Name:___________________________
 Title:_____________________________
 
 Date:_____________________________
 

 
  -8-   

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EXHIBIT D
TO 1/05 CREDIT AGREEMENT
List of Subsidiaries of the Company as of the Effective Date

Subsidiary
Place of Organization
States where qualified as a foreign organization
The Company’s percentage of equity ownership
Operating Subsidiaries
     
Escrow Closing Services, Inc.
Delaware
AL, CA, CO, CN, FL, ID, IL, IO, IN, KS, KY, ME, MD, MA, MI, MS, MO, MN, NV, NH,
NM, NY, NC, OH, OK, OR, PA, RI, TN, UT, VT, VA, WA, WI
100%
E-Loan International, Inc.
British Virgin Islands
Not applicable
100%
Single Purpose Finance Subsidiaries
     
E-Loan Auto Fund One, LLC
Delaware
CA
100%

 

 
   -1-  

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EXHIBIT E
TO 1/05 CREDIT AGREEMENT

Form of Officer’s Certificate with computations
to show compliance or non-compliance with
certain financial covenants

OFFICER’S CERTIFICATE

AGENT:           JPMORGAN CHASE BANK, N.A.

COMPANY:     E-LOAN, INC.

SUBJECT PERIOD:            _____________ended___________,200__ 

DATE:      ___________,200__ 

 
This certificate is delivered to the Agent under the 1/05 Senior Secured Credit
Agreement dated as of January 4, 2005 (as supplemented, amended or restated from
time to time, the “Current Credit Agreement”), among the Company, the Agent and
the financial institutions now or hereafter parties thereto (the “Lenders”).
Unless they are otherwise defined in this request, terms defined in the Current
Credit Agreement have the same meanings here as there.

The undersigned officer of the Company certifies to the Agent and the Lenders
that on the date of this certificate that:

1.    The undersigned is an incumbent officer of the Company, holding the title
stated below the undersigned’s signature below.

2.    The Company’s financial statements that are attached to this certificate
were prepared in accordance with GAAP (except that interim — i.e., other than
annual — financial statements exclude notes to financial statements and
statements of changes to stockholders’ equity and are subject to year-end
adjustments) and (subject to the aforesaid proviso as to interim financial
statements) present fairly the Company’s financial position and results of
operations as of _____________for that month (the “Subject Period”) and for the
year to that date.

3.    The undersigned officer of the Company supervised a review of the
Company’s activities during the Subject Period in respect of the following
matters and has determined the following: (a) except to the extent that (i) a
representation or warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have changed by transactions or conditions
contemplated or expressly permitted by the Facilities Papers, the
representations and warranties of the Company in Section 8 of the Current Credit
Agreement are true and correct in all material respects, other than for the
changes, if any, described on the attached Annex A; (b) the Company has complied
with all of its obligations under the Facilities Papers, other than for the
deviations, if any, described on the attached Annex A; (c) no Event of Default
has occurred that has not been declared by the Agent in writing to have been
cured or waived, and no Default has occurred that has not been cured before it
became an Event of Default, other than those Events of Default and/or Defaults,
if any, described on the attached Annex A and (d) compliance by the Company with
the financial covenants in Section 10.7 of the Current Credit Agreement is
accurately calculated on the attached Annex A.

    E-1   

--------------------------------------------------------------------------------

 

 

 
 E-LOAN, INC.
 
 By:______________________________
 Name:___________________________
 Title:_____________________________
 
 
 

 
 
  E-2   

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ANNEX A TO OFFICER’S CERTIFICATE

1.    Describe deviations from compliance with obligations, if any — clause 3(b)
of attached Officer’s Certificate — if none, so state:

2.    Describe Defaults or Events of Default, if any — clause 3(c) of attached
Officer’s Certificate — if none, so state:

3.    Calculate compliance with covenants in Section 10.7 — clause 3(d) of
attached Officer’s Certificate:

(a)  Section 10.7(a). The Company’s Adjusted GAAP Net Worth as of ________ is
$__________________ (the minimum under Section 10.7(a) is $60,000,000.)
 
(b)  Section 10.7(b). The Company’s Total Liabilities to Adjusted GAAP Net Worth
ratio as of ___________ is _____:1.00 (the maximum ratio under Section 10.7(b)
is 10.00:1.00)
 
(c)  Section 10.7(c). The Company’s GAAP net earnings the two consecutive
(rolling) fiscal quarters ending __________, 200__ was $__________ (beginning
with the two quarter period ending March 31, 2005, the minimum under Section
10.7(c) is $1.)
 
(d)  Section 10.7(d). The Company’s Liquidity as of __________________ is
$___________. (The minimum Liquidity under Section 10.7(d) is $12,500,000.)
 
(e)  Section 10.7(e). The Company has not declared or paid any dividend or made
any distribution directly or indirectly to the Company’s shareholders when, or
immediately after, the payment of which, any Default or Event of Default
existed.
 

    E-3   

--------------------------------------------------------------------------------

 

(f)  Section 10.7(f). The Company has not directly or indirectly made any
advance to (or declined or deferred any payment due from) any stockholder where
at the time of or immediately after such action (x) the Company’s Adjusted GAAP
Net Worth was or would be less than the minimum specified in clause (a) above or
(y) any Default or Event of Default existed or would exist.
 

 
  E-4   

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EXHIBIT F
TO 1/05 CREDIT AGREEMENT

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Agent as contemplated below (i) all of the Assignor’s rights and obligations in
its capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including any letters of credit, guarantees, and Swing Line loans included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

1.    Assignor:                ______________________________

2.    Assignee:                ______________________________
                    [and is a Lender Affiliate of [identify Lender]]

3. 
  Company(ies):                                      ______________________________

4. 
  Agent                                                     ______________________,
as the agent and representative of the Lenders under the Credit Agreement

5.    Credit Agreement:    The [amount] Credit Agreement dated as of _______
among [name of Company(ies)], the Lenders parties thereto and [name of
                                                                                               Agent],
as Agent

 
 
  F-1   

--------------------------------------------------------------------------------

 

6.     Assigned Interest:
 
Aggregate Amount of Commitment/Loans for all Lenders
Amount of Commitment/Loans Assigned
Percentage Assigned of Commitment/Loan
$
$
%

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY THE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:______________________________
Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:______________________________
Title:

     F-2  

--------------------------------------------------------------------------------

 

[Consented to and] Accepted:

[NAME OF AGENT], as
Agent

By_________________________________
Title:

[Consented to:]

[NAME OF RELEVANT PARTY]

By________________________________
Title:

 
 
  F-3   

--------------------------------------------------------------------------------

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Facilities Paper, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Facilities
Papers or any collateral thereunder, (iii) the financial condition of the
Company(ies), any of its (their) Subsidiaries or Affiliates or any other Person
obligated in respect of any Facilities Papers or (iv) the performance or
observance by the Company(ies), any of its (their) Subsidiaries or Affiliates or
any other Person of any of their respective obligations under any Facilities
Paper.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 9.2 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Agent
or any other Lender, and (v) if it is a Person that is organized under the Legal
Requirements of any jurisdiction other than the United States of America or any
State thereof, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Facilities Papers, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Facilities Papers
are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued
to but excluding the Effective Date and to the Assignee for amounts which have
accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 
   F-4  

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EXHIBIT G-1
TO 1/05 CREDIT AGREEMENT

(Form of Opinions of Outside Legal Counsel)
 
1.    The Credit Agreement is effective to create in favor of the Agent a
security interest in the Collateral as security for the Obligations.
 
2.    The Financing Statement is in proper form for filing in the Filing Office.
Upon the filing of the Financing Statement in the Filing Office, the security
interest referred to in Opinion 1 above will be perfected in that portion of all
the Collateral with respect to which a security interest may be perfected by
filing a financing statement.
 
3.    When the Agent or its duly designated bailee (other than the Company)
takes possession of the Mortgage Notes, the security interest referred to in
Opinion 1 above in such Mortgage Notes will be perfected.
 
4.    Each of the Principal Facilities Papers has been duly executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its respective terms.
 
5.    The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
 

        

--------------------------------------------------------------------------------

 

EXHIBIT G-2
TO 1/05 CREDIT AGREEMENT

(Form of Opinions of In-House Legal Counsel)
 
1.    E-LOAN has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware, and based solely on
certificates of public officials, is duly qualified and in good standing in the
State of California, with corporate power and authority to own its properties
and to conduct its business, including the performance of its obligations under
the Credit Agreement, as such properties are presently owned and such business
is presently conducted.
 
2.    The Principal Facilities Papers have been duly authorized, executed and
delivered by E-LOAN.
 
3.    The execution, delivery and performance of the Principal Facilities Papers
by E-LOAN and the performance of the Transactions by E-LOAN do not (A) violate
E-LOAN's certificate of incorporation or bylaws, or (B) conflict with, or result
in any breach or result in a default under any existing obligation of E-LOAN
under any agreement filed as an exhibit or incorporated by reference into
E-LOAN's most recent Annual Report on Form 10-K and subsequently filed Quarterly
Reports on Form 10-Q (collectively, "E-LOAN's Reports"); or (C) result in the
creation or imposition of any lien upon any of its properties (except for the
liens and security interests created by the Principal Facilities Papers), or (D)
violate any law, order, rule, or regulation, applicable to E-LOAN or its
properties, of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over E-LOAN.
 
4.    No consent, license, approval or authorization, or registration or
declaration with any governmental or regulatory authority, bureau or agency is
necessary in connection with the execution, delivery or performance by E-LOAN of
the Principal Facilities Papers, except for such consents, licenses, approvals
or authorizations, or registrations as are in full force and effect on the date
hereof.
 
5.    To my knowledge, all legal proceedings required to be described by
Regulation S-K, promulgated under the Securities Exchange Act of 1934, as
amended, have been described in E-LOAN's Reports.

       

--------------------------------------------------------------------------------

 

SCHEDULE AI
TO 1/05 CREDIT AGREEMENT

APPROVED INVESTORS

Federal National Mortgage Corporation
Federal Home Loan Mortgage Corporation
Government National Mortgage Corporation
Aurora Loan Services
Bear Stearns
Belvedere Trust
Chase
Citicorp
Countrywide Home Loans
CSFB
E*TRADE Mortgage
GMAC
Greenwich Capital
IndyMac
Provident Bank
RFC
Sovereign Bank
Wachovia
Washington Mutual

     

--------------------------------------------------------------------------------

SCHEDULE AR
TO 1/05 CREDIT AGREEMENT
AUTHORIZED COMPANY REPRESENTATIVES

LIST EFFECTIVE AS OF JANUARY 4, 2005

Name
Title
Specimen Signature
                                                                       

The above listed Persons are Authorized Company Representatives, as defined in
the 1/05 Senior Secured Credit Agreement dated January 4, 2005 (as supplemented,
amended or restated from time to time, the “Current Credit Agreement”) among
E-Loan, Inc. (the “Company”), JPMorgan Chase Bank, N.A. (“JPMorgan”), as a
lender and as agent and representative (the “Agent”) of the other lenders party
thereto, and such other lenders (together with JPMorgan, the “Lenders”) as of
the effective date of this list stated above. Lenders and the Agent, as well as
the Custodian under the 1/05 Custody Agreement dated January 4, 2005 between the
Company and JPMorgan, as documents custodian (the “Custodian”) shall be entitled
to rely on this list until it is superseded by a newer list signed and furnished
by the Company to the Agent and the Custodian.

The term “Limited” in the above table means that the referenced officer has
authority to endorse promissory notes and to execute assignments of Mortgages on
behalf of the Company, but is not an authorized Company signer or authorized to
bind the Company for other purposes under the Current Credit Agreement or any of
the other Facility Papers, as defined in the Current Credit Agreement (although
neither the Lenders, the Agent nor the Custodian has or shall have any
obligation to the Company and any other Person to determine that any Authorized
Representative is authorized to execute any particular instrument or instruments
executed by such Authorized Representative.)

     

--------------------------------------------------------------------------------

SCHEDULE DQ
TO 1/05 CREDIT AGREEMENT

DISQUALIFIERS

“Disqualifier” means any of the following events; after the occurrence of any
Disqualifier, unless the Agent shall have waived it, or declared it cured, in
writing, the Collateral Value of the affected Collateral for Borrowing Base
purposes shall be (i) limited as specified below (as, for example, in Paragraph
11below) or (ii) where no specific limitation is stated below (as, for example,
in Paragraph 1 below), such Collateral Value shall be zero:

1.   any event occurs, or is discovered to have occurred, after which the
affected Collateral fails to satisfy any element of the definition of
“Collateral”.

 

2.   in respect of any item of Collateral, for any reason whatsoever any of the
Company’s special representations concerning Collateral set forth in Section
8.16 applicable to that type of Collateral shall become untrue, or shall be
discovered to be untrue, in any respect that is material to the value or
collectibility of that item of Collateral, considered either by itself or
together with other items of Collateral.

 

3.   any Pledged Loan shall become In Default.

 

4.   any Pledged Loan for any reason shall ceased to be covered by a Purchase
Commitment acceptable to the Agent and the Company shall fail to cause it to be
covered by another Purchase Commitment acceptable to the Agent on or before ten
(10) Business Days after such initial coverage is lost;

 

5.   five (5) Business Days shall have elapsed after an Advance shall have been
funded against the Collateral Value of a Wet Loan without all of the Wet Loan’s
Basic Papers having been received by the Custodian; provided that if the Wet
Loan’s Basic Papers were received by the Custodian, but were found by the
Custodian to have been deficient in some manner which, in the Custodian’s
reasonable determination represents a condition correctable by the Company
within ten (10) Business Days’ time and the Custodian then returns the Basic
Paper to the Company for such corrective action, then such Pledged Loan shall
not be disqualified by this provision and the provisions of the Custody
Agreement pertaining to the return by the Custodian of a Basic Paper for
correction, collection or other action shall apply.

 

6.   for any Pledged Loan, any Basic Paper shall have been sent to the Company
or its designee for correction, collection or other action and shall not have
been returned to the Custodian on or before ten (10) Business Days after it was
so sent to the Company.

 

7.   any Pledged Loan shall be assumed by (or otherwise become the liability) of
— or the real property securing it shall become owned by — any corporation,
partnership or any other entity that is not a natural person or a trust for
natural persons.

 

    DQ-1   

--------------------------------------------------------------------------------

 

8.   any Pledged Loan shall be assumed by (or otherwise become the liability of)
— or the real property securing it shall become owned by — an Affiliate of the
Company or any of its or its Subsidiaries’ directors or officers.

 

9.   any Pledged Loan shipped to an investor shall not be paid for or returned
to the Custodian or the Agent (whichever shipped it) on or before forty-five
(45) days after it is shipped.

 

10.   on any day described in the first column of the following table, the sum
of the Collateral Values of all Pledged Loans that are Wet Loans shall exceed an
amount equal to the percentage of the Aggregate Committed Sum on that day shown
in the second column, in which event the aggregate Collateral Value for that day
of all Pledged Loans that are Wet Loans shall be the amount that is equal to
that percentage of the Aggregate Committed Sum.

 
Day (on or before the Termination Date) of a calendar month
Maximum Percentage of Aggregate Committed Sum that may be Wet Loans
A day that is not one of the first four (4) or last three (3) Business Days
 
40%
A day that is one of the first four (4) or last three (3) Business Days
 
60%

11.   on any day, the sum of the Collateral Values of all pledged Alt-A Loans
shall exceed an amount equal to an amount equal to ten percent (10%) of the
Aggregate Committed Sum on that day — in which event the aggregate Collateral
Value for that day of all pledged Alt-A Loans shall be an amount equal to ten
percent (10%) of the Aggregate Committed Sum.

 

12.   on any day, the sum of the Collateral Values of all pledged Mortgage Loans
that are Second Lien Loans or HELOCs shall exceed an amount equal to an amount
equal to fifty percent (50%) of the Aggregate Committed Sum on that day — in
which event the aggregate Collateral Value for that day of all pledged Mortgage
Loans that are Second Lien Loans or HELOCs shall be an amount equal to fifty
percent (50%) of the Aggregate Committed Sum.

 

13.   on any day, the sum of the Collateral Values of all pledged HLTV Loans
shall exceed Five Million Dollars ($5,000,000) — in which event the aggregate
Collateral Value for that day of all pledged HLTV Loans shall be Five Million
Dollars ($5,000,000).

 

14.   any HLTV Loan shall cease to be covered by a specific Purchase Commitment
and such coverage shall not be reinstated or replaced within five (5) Business
Days thereafter.

 

15.   any Second Lien Loan or HELOC that is required to be covered by a Purchase
Commitment pursuant to Section 8.16(hh) and was covered as required shall cease
to be covered by a specific Purchase Commitment and such coverage shall not be
reinstated or replaced within five (5) Business Days thereafter.

 

    DQ-2   

--------------------------------------------------------------------------------

 

16.   on any day, the sum of the Collateral Values of all pledged Subprime Loans
shall exceed an amount equal to an amount equal to fifteen percent (15%) of the
Aggregate Committed Sum on that day — in which event the aggregate Collateral
Value for that day of all pledged Subprime Loans shall be an amount equal to
fifteen percent (15%) of the Aggregate Committed Sum.

 

17.   on any day, the sum of the Collateral Values of all pledged Repurchased
Loans shall exceed an amount equal to an amount equal to two and one-half
percent (2.5%) of the Aggregate Committed Sum on that day — in which event the
aggregate Collateral Value for that day of all pledged Repurchased Loans shall
be an amount equal to two and one-half percent (2.5%) of the Aggregate Committed
Sum.

 

18.   on any day, the sum of the Collateral Values of all Long Warehoused (Aged)
Loans (i.e., pledged more than sixty (60) days, but not more than ninety (90)
days, before that day) shall exceed an amount equal to twenty percent (20%) of
the Aggregate Committed Sum on that day — in which event the aggregate
Collateral Value for that day of all Long Warehoused (Aged) Loans shall be an
amount equal to twenty percent (20%) of the Aggregate Committed Sum.

 

19.   on any day, the sum of the Collateral Values of all Late Pledged
(Seasoned) Loans (i.e. originated more than sixty (60) days, but not more than
one hundred twenty (120) days, before its Original Pledge Date) shall exceed an
amount equal to five percent (5%) of the Aggregate Committed Sum on that day —
in which event the aggregate Collateral Value for that day of all Late Pledged
(Seasoned) Loans shall be an amount equal to five percent (5%) of the Aggregate
Committed Sum.

 

20.   more than ninety (90) days shall have elapsed since the Original Pledge
Date of any Pledged Loan (except that for Repurchased Loans, the relevant date
is the date it was first Pledged to the Agent as a Repurchased Loan.)

 

21.   more than forty-five (45) days shall have elapsed since the Original
Pledged Date of any Subprime Loan.

 

22.   on any day, the sum of the Collateral Values of all Pledged Loans that are
Jumbo Loans (including Super Jumbo Loans) shall exceed an amount equal to the
sum of (x) twenty-five percent (25%) of the Aggregate Committed Sum on that day
plus (y) ten percent (10%) of the Aggregate Committed Sum minus the sum of the
Collateral Values of all Super Jumbo Loans that are Pledged to the Agent on that
day — in which event the aggregate Collateral Value for that day of all Pledged
Loans that are Jumbo Loans shall be an amount equal to the sum of (x)
twenty-five percent (25%) of the Aggregate Committed Sum on that day plus (y)
ten percent (10%) of the Aggregate Committed Sum minus the sum of the Collateral
Values of all Super Jumbo Loans that are Pledged to the Agent on that day.

 

    DQ-3   

--------------------------------------------------------------------------------

 

23.   on any day, the sum of the Collateral Values of all Pledged Loans that are
Super Jumbo Loans shall exceed an amount equal to ten percent (10%) of the
Aggregate Committed Sum on that day — in which event the aggregate Collateral
Value for that day of all Pledged Loans that are Super Jumbo Loans shall be an
amount equal to ten percent (10%) of the Aggregate Committed Sum.

 

24.   on any day, the sum of the Collateral Values of all pledged Single-family
Loans that are Non-owner Occupied Loans shall exceed five percent (5%) of the
Aggregate Committed Sum on that day — in which event the aggregate Collateral
Value for that day of all pledged Single-family Loans that are Non-owner
Occupied Loans shall be five percent (5%) of the Aggregate Committed Sum.

 

25.   on any day, the sum of the Collateral Values of all pledged Townhouse or
Condo Loans shall exceed twenty percent (20%) of the Aggregate Committed Sum on
that day — in which event the aggregate Collateral Value for that day of all
pledged Townhouse or Condo Loans shall be twenty percent (20%) of the Aggregate
Committed Sum.

 

26.   if on any day the weighted average FICO Score of all pledged Alt-A Loans
is less than 690, then and until such weighted average FICO Score is 690 or
higher, Alt-A Loans with FICO Scores of 690 or less that are Pledged to the
Agent on or after that day shall have zero Collateral Value.

 

27.   if on any day less than ninety-five percent (95%) of the aggregate
Principal Balances of all Pledged Loans — excluding Alt-A Loans, Second Lien
Loans, Repurchased Loans, Subprime Loans, Jumbo Loans and Super Jumbo Loans —
conform fully to all underwriting and other requirements for purchase by either
Fannie Mae or Freddie Mac, then and until at least ninety-five percent (95%) of
all such Pledged Loans do so conform, Single-family Loans other than Alt-A
Loans, Second Lien Loans, Repurchased Loans, Subprime Loans, Jumbo Loans and
Super Jumbo Loans that do not so conform and that are Pledged to the Agent on or
after than day shall have zero Collateral Value.

 

 
  DQ-4   

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SCHEDULE EC
TO 1/05 CREDIT AGREEMENT

ELIGIBLE COLLATERAL

“Eligible Collateral” means and includes the following category of Collateral
(such category and each of its subcategories being herein collectively called a
“Category”) defined and described as follows:

“Eligible Single-family Collateral”, which means an amortizing Prime Loan
(including Second Lien Loans), Alt-A Loan or Subprime Loan with an original term
to its stated maturity of thirty (30) years or less, or a Prime Loan that is a
HELOC, and that satisfies all applicable requirements of this Agreement for a
Prime Loan, Alt-A Loan or Subprime Loan as applicable. Unless it is a Second
Lien Loan or a HELOC, it must be secured by a first priority Lien on its related
Mortgaged Premises, and if it is a Second Lien Loan, or if it is a HELOC that is
not secured by a first priority Lien on its related Mortgaged Premises, it must
be secured by a Mortgage that is second in priority to a single first Lien
Mortgage Loan. It may be a Repurchased Loan. It may bear interest at a fixed
interest rate, at a fluctuating interest rate or at a fixed or fluctuating
interest rate for part of its term followed, respectively, by a fluctuating or
fixed interest rate for the remainder of its term. Even though it has been
Pledged to the Agent and is therefore Collateral, no Single-family Loan shall be
Eligible Collateral:

1.   unless and until the Custodian has issued its Custodian’s Certification (as
defined in the Custody Agreement) concerning it;

 

2.   the Mortgaged Premises securing which are a mobile home or manufactured
housing;

 

3.   that contains or is otherwise subject to any contractual restriction or
prohibition on the free transferability of such Mortgage Loan, all Liens
securing it and all related rights (other than Legal Requirements requiring
notification to its obligor(s) of any transfer of it or of its servicing or
administration), either absolutely or as security;

 

4.   if any of its owners-mortgagors is a corporation, partnership or any other
entity that is not a natural person or a trust for natural persons;

 

5.   if any of its owner-mortgagors is an Affiliate of the Company or any of the
Company’s or any such Affiliate’s directors or officers;

 

6.   whose related Mortgaged Premises are not covered by a Hazard Insurance
Policy;

 

7.   that is a construction, rehabilitation or commercial loan;

 

8.   that is not covered by a Purchase Commitment or Hedge Agreement acceptable
to the Agent;

 

9.   that is a Second Lien Loan but is not a Prime Loan;

 

10.   that is a HELOC but is not a Prime Loan;

 

    EC-1   

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11.   that is an Alt-A Loan that is not covered by a Purchase Commitment issued
by an Approved Investor or does not comply in any material respect with that
Approved Investor’s underwriting guidelines;

 

12.   that is an HLTV Loan that is not covered by a Purchase Commitment issued
by an Approved Investor or does not comply in any material respect with that
Approved Investor’s underwriting guidelines;

 

13.   that is a Second Mortgage Loan or a HELOC with a FICO score less than 680;

 

14.   that is an Alt-A Loan with a FICO score less 620;

 

15.   that is an Alt-A Loan with a Cumulative Loan-to-value Ratio higher than
ninety-five percent (95%);

 

16.   that was originated more than one hundred twenty (120) days before its
Original Pledge Date;

 

17.   that is In Default;

 

18.   in connection with the origination of which a policy of single-premium
life insurance on the life of a mortgagor, borrower or guarantor was purchased;

 

19.   that (i) is subject to the special Truth-in-Lending disclosure
requirements imposed by Section 32 of Regulation Z of the Federal Reserve Board
(12 C.F.R. § 226.32) or any similar state or local Law relating to high interest
rate credit or lending transactions or (ii) contains any term or condition, or
involves any loan origination practice, that (1) has been defined as
“predatory”, “covered”, “threshold” or a similar term under any such applicable
federal, state or local law, (2) has been expressly categorized as an “unfair”
or “deceptive” term, condition or practice in any such applicable federal, state
or local law (or the regulations promulgated thereunder) or (3) by the terms of
such Law exposes (x) assignees of Mortgage Loans to possible civil or criminal
liability or damages or (y) exposes any Lender or the Agent to regulatory action
or enforcement proceedings, penalties or other sanctions.

 

20.   that the Company or any Affiliate has 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, whether with or without the Company’s
having any conditional repurchase or other recourse obligation, and that was
rejected or became ineligible or disqualified to be lent against or purchased
and held by such other Person; provided that this provision shall not be
construed or applied to disqualify a Pledged Loan simply because it was
purchased by the Company out of a pool of Serviced Loans or from a Whole Loan
investor for whose Mortgage Loans the Company is a Servicer pursuant to the
Company’s (or an Affiliate’s) obligation or election as Servicer to do so;

 

21.   that the Company or any Affiliate sold and transferred, or attempted to
sell and transfer, to any other Person; provided that this provision shall not
be construed or applied to disqualify a Pledged Loan simply because it was
purchased by the Company out of a pool of Serviced Loans or from a Whole Loan
investor for whose Mortgage Loans the Company is a Servicer pursuant to the
Company’s (or an Affiliate’s) obligation or election as Servicer to do so;

 

    EC-2   

--------------------------------------------------------------------------------

 

22.   that is an HLTV Loan that has a Cumulative Loan-to-Value Ratio greater
than one hundred twenty-five percent (125%).

 

23.   that is a Prime Loan or an Alt-A Loan and has a Cumulative Loan-to-Value
Ratio greater than eighty percent (80%) but is neither guaranteed by VA nor
insured by FHA or private mortgage insurance (the Agent and the Custodian may
rely on the Company’s representation and warranty in Section 8.16(o) as to
whether the condition that such Pledged Loans be so guaranteed or insured is
satisfied for any such Pledged Loan.).

 

24.   That is a Subprime Loan and has a credit grade under Company Underwriting
Guidelines lower then “C”.

 

25.   That is a Subprime Loan that does not comply with the underwriting
guidelines of a specific Approved Second Lien Loan Investor.

 

26.   That is both a Repurchased Loan and a Wet Loan.

 

 
   EC-3  

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SCHEDULE LC
TO 1/05 CREDIT AGREEMENT

The Lenders’ Committed Sums
(in dollars)

Lender
Committed Sum
JPMorgan
$150,000,000
Aggregate Committed Sum
$150,000,000

     

--------------------------------------------------------------------------------

SCHEDULE SD
TO 1/05 CREDIT AGREEMENT

List of Existing Subordinated Debt of the Company

None

     

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SCHEDULE MAC
TO 1/05 CREDIT AGREEMENT
(Updates of this Schedule are effective only if signed by a Vice President
or more senior officer of JPMorgan Chase Bank, N.A., Agent — no signature
required for initial Schedule attached to 1/05 Credit Agreement)

The Maximum Aggregate Commitment from and after the following dates is as
follows:

 Maximum Aggregate Commitment
From and after
Update certified effective by the undersigned officer of JPMorgan Chase Bank,
N.A., Agent
$150,000,000
Effective Date of 1/05 Senior Secured Credit Agreement
By:_________________________________ Name:______________________________
Title:_______________________________

     

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SCHEDULE 8.4
TO 1/05 CREDIT AGREEMENT

MATERIAL ADVERSE CHANGES AND CONTINGENT LIABILITIES

1.    Material adverse changes and material unrealized losses since the
Statement Date, as referred to in Section 8.4: None.

2.   Contingent liabilities as of the Effective Date, as referred to in Section
8.4: None

     

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SCHEDULE 8.5
TO 1/05 CREDIT AGREEMENT

PENDING AND THREATENED LITIGATION
(AS OF DECEMBER 31, 2004)

Pending Litigation:

IPO Litigation: (Kassin v. E-LOAN, Inc. et al; Krauss v. E-LOAN, Inc. et al.;
Robertson v. E-LOAN, Inc. et al.; Napoli v. E-LOAN, Inc. et al.; Yong Xin Cai v.
E-LOAN, Inc. et al.)

E-Loan, Inc. (“E-LOAN”) has been named as a defendant in five related lawsuits
filed in the Federal District Court for the Southern District of New York
between August 10, 2001 and September 25, 2001. The lawsuits purport to be class
actions filed on behalf of the plaintiffs and others similarly situated. They
name as defendants E-LOAN, Christian Larsen, Janina Pawlowski, Frank Siskowski,
The Goldman Sachs Group, Inc., FleetBoston Robertson Stephens, Inc., Merrill
Lynch Pierce Fenner & Smith, Inc., Credit Suisse First Boston Corp. and J.P.
Morgan Chase & Co., some of which were involved in E-LOAN’s initial public
offering. The complaints have since been consolidated into a single action. The
Consolidated Amended Complaint alleges, among other things, that the
underwriters of E-LOAN’s initial public offering violated Section 12(a) of the
Securities Act of 1933 by receiving excessive and undisclosed commissions and
fees, and by entering into unlawful private agreements with brokers' customers,
and that all defendants violated Section 11 of the Securities Act of 1933, and
Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934 by making
material false and misleading statements in E-LOAN’s initial public offering
prospectus concerning brokers' commissions and private agreements with brokers'
customers. The plaintiffs seek to recover damages on behalf of all those who
purchased or otherwise acquired E-LOAN securities during the respective class
period. Similar complaints have been filed against over 300 other issuers that
have had initial public offerings since 1998 and all such actions have been
included in a single coordinated proceeding.  In July 2002, the issuers in the
consolidated cases, including E-LOAN, filed motions to dismiss the consolidated
amended complaints for failure to state a claim, which was denied as to E-LOAN
and most of the other issuers on February 19, 2003. On October 9, 2002, E-LOAN's
individual defendants were dismissed, without prejudice, from the lawsuit,
pursuant to a stipulated agreement with the plaintiffs.

On June 25, 2003, a committee of E-LOAN’s Board of Directors conditionally
approved a proposed partial settlement with the plaintiffs in this matter. The
settlement would provide, among other things, a release of E-LOAN and of the
individual defendants for the conduct alleged in the action to be wrongful in
the Amended Complaint. E-LOAN would agree to undertake other responsibilities
under the partial settlement, including agreeing to assign away, not assert, or
release certain potential claims E-LOAN may have against its underwriters. Any
direct financial impact of the proposed settlement is expected to be borne by
E-LOAN’s insurers. The committee agreed to approve the settlement subject to a
number of conditions, including the participation of a substantial number of
other Issuer Defendants in the proposed settlement, the consent of E-LOAN’s
insurers to the settlement, and the completion of acceptable final settlement
documentation. Furthermore, the settlement is subject to a hearing on fairness
and approval by the Court overseeing the IPO Litigations.  Due to the inherent
uncertainties of litigation, and because the settlement has not yet been
approved by the Court, the ultimate outcome of the matter cannot be predicted.

       

--------------------------------------------------------------------------------

 

Baker v. Century Financial Group et al.

On March 16, 2004, E-LOAN received a Fourth Amended Petition in the case of
Baker v. Century Financial Group, Inc., et al. in the Circuit Court of Clay
County, Missouri, case no. CV100-004294 CC. The Fourth Amended Petition added
E-LOAN (among others) as one of 95 mortgage company defendants in the lawsuit,
which was filed as a class action. The complaint alleges that the defendants
charged and received fees and charges in violation of Missouri’s Second Mortgage
Loan Act, on second mortgage loans made by the defendants to Missouri residents.
The complaint seeks certification as a class action, actual and punitive damages
in an unspecified amount, injunctive relief and attorneys’ fees and costs. On
April 9, 2004, the court entered an order extending the time for E-LOAN and the
other non-bank defendants to file a response to the complaint. E-LOAN has not
yet filed a response to the complaint. The case is pending.

Threatened Litigation:

EEOC Claims

On February 19, 2004, Charge of Discrimination claims were filed with the U.S.
Equal Employment Opportunity Commission by two former employees of E-LOAN. The
claims allege discrimination and violation of Title VII of the Civil Rights Act
in connection with the termination of their employment with E-LOAN. E-LOAN filed
its response to the charges, denying the allegations. No response has been
received from the EEOC.

     

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SCHEDULE 8.15
TO 1/05 CREDIT AGREEMENT

THE COMPANY’S PLANS

The following is a summary of employee benefits and plans which may constitute
Plans, as defined in the Agreement:

Medical, Dental and Disability

E-LOAN offers medical and dental benefit plans and disability insurance to its
employees.

401(k) Plan

Employees who are at least 18 years of age are eligible to participate in 401(k)
on the first day of their employment. E-LOAN's 401(k) plan is a retirement tool
available to regular employees. Currently, E-LOAN's 401(k) plan is administered
through Invesmart and offers many different funds for employees to choose from.
Employees decide how much of their salary they want to put into the plan.
Employees may contribute up to either a percentage or flat dollar amount of
eligible salary (in whole percentages or dollars). Contributions are deducted
automatically from each paycheck. E-LOAN matches up to $1,000 in contributions
for employees.

Employee Stock Option Plan

Regular full-time employees are eligible to participate in E-LOAN'S 1997 Stock
Plan, a stock option plan, upon their hire. The amount of stock options to be
granted is determined during the hiring process. The option purchase price is
determined by the closing stock price on the employee's date of hire. Typically,
options become exercisable over a four-year period, with twenty five percent of
the options become exercisable upon the 12-month anniversary of hire and the
remaining options vesting monthly over the following 36 months. Terms vary for
officers and directors.

Executive Bonus Plan

Executives are eligible to receive quarterly and annual bonuses based on various
performance goals established by E-LOAN's Compensation Committee.

     

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SCHEDULE 10.6(h)
TO 1/05 CREDIT AGREEMENT

Permitted Debt
as of January 4, 2005

Permitted Debt of E-Loan, Inc.

Lender
Amount
Expiration Date
Greenwich Capital Financial Products
$500 million
3/14/05
Warehouse Bank, a unit of GMAC Bank
$ 75 million
3/31/05
Merrill Lynch Mortgage Capital Inc. (Auto)
$ 10 million
7/13/05
Merrill Lynch Mortgage Capital Inc. (Mrtg)
$100 million
2/04/05

Permitted Debt of E-Loan Auto Fund One LLC

Lender
Amount
Expiration Date
Merrill Lynch Bank USA
$800 million
7/13/05

Permitted Debt of the Company and its Subsidiaries

Instruments and agreements that the Company and its Subsidiaries enter into from
time to time to manage exposure related to interest rate fluctuations, in
connection with its hedging policy.

     

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SCHEDULE 14
TO 1/05 CREDIT AGREEMENT

Lenders’ Addresses for Notice
As of January 4, 2005

(JPMorgan’s address appears in Section 14.)

     

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