Exhibit 10.99

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BETWEEN

,
a

AND

RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation

Dated as of March 7, 2003

table of contents

 

1. THE CREDIT 1-1

1.1. The Warehousing Commitment 1-1

1.2. Expiration of Warehousing Commitment 1-1

1.3. Warehousing Note 1-2

2. PROCEDURES FOR OBTAINING ADVANCES 2-1

2.1. Warehousing Advances 2-1

3. INTEREST, PRINCIPAL AND FEES 3-1

3.1. Interest 3-1

3.2. Interest Limitation 3-1

3.3. Principal Payments 3-1

3.4. Buydowns 3-3

3.5. Non-Usage Fees 3-4

3.6. Loan Package Fees, Wire Fees, Warehousing Fees 3-4

3.7. Miscellaneous Fees and Charges 3-5

3.8. Overdraft Advances 3-5

3.9. Method of Making Payments 3-5

4. COLLATERAL 4-1

4.1. Grant of Security Interest 4-1

4.2. Maintenance of Collateral Records 4-2

4.3. Release of Security Interest in Pledged Loans and Pledged Securities 4-2

4.4. Collection and Servicing Rights 4-3

4.5. Return of Collateral at End of Warehousing Commitment 4-4

4.6. Delivery of Collateral Documents 4-4

5. CONDITIONS PRECEDENT 5-1

5.1. Initial Advance 5-1

5.2. Each Advance 5-2

5.3. Force Majeure 5-3

6. GENERAL REPRESENTATIONS AND WARRANTIES 6-1

6.1. Place of Business 6-1

6.2. Organization; Good Standing; Subsidiaries 6-1

6.3. Authorization and Enforceability 6-1

6.4. Approvals 6-1

6.5. Financial Condition 6-2

6.6. Litigation 6-2

6.7. Compliance with Laws 6-2

6.8. Regulation U 6-2

6.9. Investment Company Act 6-2

6.10. Payment of Taxes 6-3

6.11. Agreements 6-3

6.12. Title to Properties 6-3

6.13. ERISA 6-3

6.14. No Retiree Benefits 6-4

6.15. Assumed Names 6-4

6.16. Servicing 6-4

7. AFFIRMATIVE COVENANTS 7-1

7.1. Payment of Obligations 7-1

7.2. Financial Statements 7-1

7.3. Other Borrower Reports 7-1

7.4. Maintenance of Existence; Conduct of Business 7-2

7.5. Compliance with Applicable Laws 7-2

7.6. Inspection of Properties and Books; Operational Reviews 7-2

7.7. Notice 7-3

7.8. Payment of Debt, Taxes and Other Obligations 7-3

7.9. Insurance 7-3

7.10. Closing Instructions 7-3

7.11. Subordination of Certain Indebtedness 7-4

7.12. Other Loan Obligations 7-4

7.13. ERISA 7-4

7.14. Use of Proceeds of Warehousing Advances 7-4

8. NEGATIVE COVENANTS 8-1

8.1. Contingent Liabilities 8-1

8.2. Pledge of Servicing Contracts 8-1

8.3. Restrictions on Fundamental Changes 8-1

8.4. Subsidiaries 8-1

8.5. Deferral of Subordinated Debt 8-1

8.6. Loss of Eligibility 8-2

8.7. Accounting Changes 8-2

8.8. Leverage Ratio 8-2

8.9. Minimum Tangible Net Worth 8-2

8.10. Current Ratio 8-2

8.11. Minimum Cash 8-2

8.12. Profitability 8-2

8.13. Distributions to Shareholders 8-2

8.14. Transactions with Affiliates 8-2

8.15. Recourse Servicing Contracts 8-3

9. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL 9-1

9.1. Special Representations and Warranties Concerning Eligibility as
Seller/Servicer of Mortgage Loans 9-1

9.2. Special Representations and Warranties Concerning Warehousing Collateral
9-1

9.3. Special Affirmative Covenants Concerning Warehousing Collateral 9-3

9.4. Special Negative Covenants Concerning Warehousing Collateral 9- 4

10. DEFAULTS; REMEDIES 10-1

10.1. Events of Default 10-1

10.2. Remedies 10-2

10.3. Application of Proceeds 10-5

10.4. Lender Appointed Attorney-in-Fact 10-5

10.5. Right of Set-Off 10-5

11. MISCELLANEOUS 11-1

11.1. Notices 11-1

11.2. Reimbursement Of Expenses; Indemnity 11-1

11.3. Financial Information 11-2

11.4. Terms Binding Upon Successors; Survival of Representations 11- 2

11.5. Assignment 11-2

11.6. Amendments 11-3

11.7. Governing Law 11-3

11.8. Participations 11-3

11.9. Relationship of the Parties 11-3

11.10. Severability 11-3

11.11. Consent to Credit References 11-4

11.12. Counterparts 11-4

11.13. Headings/Captions 11-4

11.14. Entire Agreement 11-4

11.15. Consent to Jurisdiction 11-4

11.16. Waiver of Jury Trial 11-4

11.17. Waiver of Punitive, Consequential, Special or Indirect Damages 11-5

12. DEFINITIONS 12-1

12.1. Defined Terms 12-1

12.2. Other Definitional Provisions; Terms of Construction 12- 11

EXHIBITS*

Exhibit

Request for Advance Against Eligible Loans

Exhibit

Procedures and Documentation for Warehousing Mortgage Loans

Exhibit

Schedule of Servicing Portfolio

Exhibit

Subsidiaries

Exhibit

Compliance Certificate

Exhibit

Schedule of Lines of Credit

Exhibit

Assumed Names

Exhibit

Eligible Loans and Other Assets

Exhibit

Collateral Operations Fee Schedule

Exhibit

Commitment Summary Report

 

 

 

 

 

* Exhibits and schedules have been omitted in accordance with Item 601 of
Regulation S-K, and will be provided upon request.

 

, dated as of March 7, 2003 between , a ("Borrower"), and RESIDENTIAL FUNDING
CORPORATION, a Delaware corporation ("Lender").

Borrower has requested certain financing from Lender.

Lender has agreed to provide that financing to Borrower subject to the terms and
conditions of this Agreement.

Subject to Borrower's satisfaction of the conditions set forth in Article 5, the
"Closing Date" for the transactions contemplated by this Agreement is March 7,
2003.

NOW, THEREFORE, the parties to this Agreement agree as follows:

 1. 

THE CREDIT

The Warehousing Commitment

On the terms and subject to the conditions and limitations of this Agreement,
including Exhibit H, Lender agrees to make Warehousing Advances to Borrower from
the Closing Date to the Business Day immediately preceding the Warehousing
Maturity Date, during which period Borrower may borrow, repay and reborrow in
accordance with the provisions of this Agreement. Lender has no obligation to
make Warehousing Advances in excess of the Warehousing Commitment Amount. While
a Default or Event of Default exists, Lender may refuse to make any additional
Warehousing Advances to Borrower. All Warehousing Advances under this Agreement
constitute a single indebtedness, and all of the Collateral is security for the
Warehousing Note and for the performance of all of the Obligations. If the
initial Warehousing Advance has not been made on or before June 30, 2003, the
Warehousing Commitment and Lender's obligation to make Warehousing Advances to
Borrower under this Agreement will automatically terminate, and all Obligations
(including any Obligations arising under Section 11.2) will automatically become
due and payable, without presentment, demand or other Notice or requirements of
any kinds, all of which Borrower expressly waives.

Expiration of Warehousing Commitment

The Warehousing Commitment expires on the earlier of ("Warehousing Maturity
Date"): (a) December 31, 2003, as such date may be extended in writing by
Lender, in its sole discretion, on which date the Warehousing Commitment will
expire of its own term and the Warehousing Advances will become due and payable
without the necessity of Notice or action by Lender; and (b) the date the
Warehousing Commitment is terminated and the Warehousing Advances become due and
payable under Section 10.2.

Warehousing Note

Warehousing Advances are evidenced by Borrower's promissory note, payable to
Lender on the form prescribed by Lender ("Warehousing Note"). The term
"Warehousing Note" as used in this Agreement includes all amendments,
restatements, renewals or replacements of the original Warehousing Note and all
substitutions for it. All terms and provisions of the Warehousing Note are
incorporated into this Agreement.

 

End of Article 1

PROCEDURES FOR OBTAINING ADVANCES

Warehousing Advances

To obtain a Warehousing Advance under this Agreement, Borrower must deliver to
Lender either a completed and signed request for a Warehousing Advance on the
then current form approved by Lender, or an Electronic Advance Request, together
with a list of the Mortgage Loans for which the request is being made and a
signed RFConnects Pledge Agreement sent by facsimile ("Warehousing Advance
Request"), not later than (i) in the case of Electronic Advance Requests, 2:30
p.m. on the Business Day, and (ii) in all other cases, 1 Business Day before the
Business Day on which Borrower desires the Warehousing Advance. Subject to the
delivery of a Warehousing Advance Request and the satisfaction of the conditions
set forth in Sections 5.1 and 5.2, Borrower may obtain a Warehousing Advance
under this Agreement upon compliance with the procedures set forth in this
Section and in the applicable Exhibit B, including delivery to Lender of all
required Collateral Documents. Lender's current form of Warehousing Advance
Request is set forth in Exhibit A. Upon not less than 3 Business Days' prior
Notice to Borrower, Lender may modify its form of Warehousing Advance Request,
RFConnects Pledge Agreement and any other Exhibit or document referred to in
this Section to conform to current legal requirements or Lender practices and,
as so modified, those Exhibits and documents will become part of this Agreement.

 

End of Article 2

INTEREST, PRINCIPAL AND FEES

Interest

Except as otherwise provided in this Section, Borrower must pay interest on the
unpaid amount of each Warehousing Advance from the date the Warehousing Advance
is made until it is paid in full at the Interest Rate specified in Exhibit H.

Lender computes interest on the basis of the actual number of days in each month
and a year of 360 days ("Accrual Basis"). Borrower must pay interest monthly in
arrears, on the 9th day of each month in the amount set forth on Lender's
invoice, commencing with the first month following the Closing Date and on the
Warehousing Maturity Date.

If, for any reason Borrower repays a Warehousing Advance on the same day that it
was made by Lender, Borrower agrees to pay to Lender an administrative fee equal
to 1 day of interest on that Warehousing Advance at the Interest Rate that would
otherwise be applicable under Exhibit H. Borrower must pay all administrative
fees within 9 days after the date of Lender's invoice or, if applicable, within
2 days after the date of Lender's account analysis statement.

After an Event of Default occurs and upon Notice to Borrower by Lender, the
unpaid amount of each Warehousing Advance will bear interest at the Default Rate
until paid in full.

Lender will adjust the rates of interest provided for in this Agreement as of
the effective date of each change in the applicable index. Lender's
determination of such rates of interest as of any date of determination are
conclusive and binding, absent manifest error.

Interest Limitation

Lender does not intend, by reason of this Agreement, the Warehousing Note or any
other Loan Document, to receive interest in excess of the amount permitted by
applicable law. If Lender receives any interest in excess of the amount
permitted by applicable law, whether by reason of acceleration of the maturity
of this Agreement, the Warehousing Note or otherwise, Lender will apply the
excess to the unpaid principal balance of the Warehousing Advances and not to
the payment of interest. If all Warehousing Advances have been paid in full and
the Warehousing Commitment has expired or has been terminated, Lender will remit
any excess to Borrower. This Section controls every other provision of all
agreements between Borrower and Lender and is binding upon and available to any
subsequent holder of the Warehousing Note.

Principal Payments

Borrower must pay Lender the outstanding principal amount of all Warehousing
Advances on the Warehousing Maturity Date.

Except as otherwise provided in Section 3.1, Borrower may prepay any portion of
the Warehousing Advances without premium or penalty at any time.

Borrower must pay to Lender, without the necessity of prior demand or Notice
from Lender, and Borrower authorizes Lender to cause the Funding Bank to charge
Borrower's Operating Account for, the amount of any outstanding Warehousing
Advance against a specific Pledged Asset upon the earliest occurrence of any of
the following events:

One (1) Business Day elapses from the date a Warehousing Advance was made if the
Pledged Loan to be funded by that Warehousing Advance is not closed and funded.

Ten (10) Business Days elapse without the return of a Collateral Document
delivered by Lender to Borrower under a Trust Receipt for correction or
completion.

On the date on which a Pledged Loan is determined to have been originated based
on untrue, incomplete or inaccurate information or otherwise to be subject to
fraud, whether or not Borrower had knowledge of the misrepresentation,
incomplete or incorrect information or fraud, on the date on which Borrower
knows, has reason to know, or receives Notice from Lender, that (A) one or more
of the representations and warranties set forth in Article 9 were inaccurate or
incomplete in any material respect on any date when made or deemed made, or
(B) Borrower has failed to perform or comply with any covenant, term or
condition set forth in Article 9.

On the date the Pledged Loan or a Lien prior to the Mortgage securing repayment
of the Pledged Loan is defaulted and remains in default for a period of 60 days
or more.

Upon the sale, other disposition or prepayment of any Pledged Asset or, with
respect to a Pledged Loan included in an Eligible Mortgage Pool, upon the sale
or other disposition of the related Agency Security.

One (1) Business Day immediately preceding the date scheduled for the
foreclosure or trustee sale of the premises securing a Pledged Loan.

If the outstanding Warehousing Advances against Pledged Loans of a specific type
of Eligible Loan exceed the aggregate Purchase Commitments for that type of
Eligible Loan.

Upon telephonic or written Notice to Borrower by Lender, Borrower must pay to
Lender, and Borrower authorizes Lender to cause the Funding Bank to charge
Borrower's Operating Account for, the amount of any outstanding Warehousing
Advance against a specific Pledged Asset upon the earliest occurrence of any of
the following events:

For any Pledged Loan, the Warehouse Period elapses.

Forty-five (45) days elapse from the date a Pledged Loan was delivered to an
Investor or Approved Custodian for examination and purchase or for inclusion in
a Mortgage Pool, without the purchase being made or an Eligible Mortgage Pool
being initially certified, or upon rejection of a Pledged Loan as unsatisfactory
by an Investor or Approved Custodian.

Seven (7) Business Days elapse from the date a Wet Settlement Advance was made
against a Pledged Loan without receipt by Lender of all Collateral Documents
relating to the Pledged Loan.

Three (3) Business Days after the mandatory delivery date of the related
Purchase Commitment if the specific Pledged Loan or the Pledged Security backed
by that Pledged Loan has not been delivered under the Purchase Commitment prior
to such mandatory delivery date, or on the date the related Purchase Commitment
expires or is terminated, unless, in each case, the Pledged Loan or Pledged
Security is eligible for delivery to another Investor under a comparable
Purchase Commitment.

With respect to any Pledged Loan, any of the Collateral Documents, upon
examination by Lender, are found not to be in compliance with the requirements
of this Agreement or the related Purchase Commitment.

In addition to the payments required by Sections 3.3(a), 3.3(c) and 3.3(d), if
the principal amount of any Pledged Loan is prepaid in whole or in part while a
Warehousing Advance is outstanding against the Pledged Loan, Borrower must pay
to Lender, without the necessity of prior demand or Notice from Lender, and
Borrower authorizes Lender to cause the Funding Bank to charge Borrower's
Operating Account for, the amount of the prepayment, to be applied against the
Warehousing Advance.

The proceeds of the sale or other disposition of Pledged Assets must be paid
directly by the Investor to the Cash Collateral Account. Borrower must give
Notice to Lender in writing or by telephone or by RFConnects Delivery to Lender
(and if by telephone, followed promptly by written Notice) of the Pledged Assets
for which proceeds have been received. Upon receipt of Borrower's Notice, Lender
will apply any proceeds deposited into the Cash Collateral Account to the
payment of the Warehousing Advances related to the Pledged Assets identified by
Borrower in its Notice, and those Pledged Assets will be considered to have been
redeemed from pledge. Lender is entitled to rely upon Borrower's affirmation
that deposits in the Cash Collateral Account represent payments from Investors
for the purchase of the Pledged Assets specified by Borrower in its Notice. If
the payment from an Investor for the purchase of Pledged Assets is less than the
outstanding Warehousing Advances against the Pledged Assets identified by
Borrower in its Notice, Borrower must pay to Lender, and Borrower authorizes
Lender to cause the Funding Bank to charge Borrower's Operating Account in, an
amount equal to that deficiency. As long as no Default or Event of Default
exists, Lender will return to Borrower any excess payment from an Investor for
Pledged Assets.

Lender reserves the right to revalue any Pledged Loan. Borrower must pay to
Lender, without the necessity of prior demand or Notice from Lender, any amount
required after any such revaluation to reduce the principal amount of the
Warehousing Advance outstanding against the revalued Pledged Loan to an amount
equal to the Advance Rate for the applicable type of Eligible Loan multiplied by
the Fair Market Value of the Mortgage Loan.

Buydowns

Borrower may prepay a portion of the Warehousing Advances outstanding against
Prime Mortgage Loans (a "Buydown") upon Notice to Lender not later than (a) 1:00
p.m. on the Business Day immediately preceding the Business Day on which
Borrower desires to make a Buydown in the amount of $10,000,000 or more or (b)
1:00 p.m. on the Business Day on which Borrower desires to make a Buydown in an
amount less than $10,000,000. Each Buydown must be in an amount not less than
$5,000, and Buydowns may not exceed, in the aggregate, the amount outstanding
against Prime Mortgage Loans. A Buydown is a reduction in the aggregate amount
of the Warehousing Advances outstanding against Prime Mortgage Loans, but does
not represent the prepayment of any particular Warehousing Advance, and does not
entitle Borrower to the release of any Collateral. Lender may apply Buydowns to
reduce interest payable by Borrower on outstanding Warehousing Advances in any
order that Lender determines in its sole discretion. Unless a Default or Event
of Default exists, Borrower may reborrow all or any portion of a Buydown upon
Notice to Lender not later than (m) 1:00 p.m. on the Business Day immediately
preceding the Busines Day on which borrower desires to reborrow $10,000,000 or
more or (n) 1:00 p.m. on the Business Day that Borrower desires to reborrow an
amount less than $10,000,000. If Lender receives Buydowns or a combination of
Buydowns and payments of Warehousing Advances that exceed the aggregate
principal balance of the Warehousing Advances outstanding against Prime Mortgage
Loans (an "Excess Buydown"), as long as no Default or Event of Default exists,
Borrower may reborrow all or any portion of an Excess Buydown upon Notice to
Lender not later than (y) 1:00 p.m. on the Business Day immediately preceding
the Business Day on which Borrower desires to reborrow $10,000,000 or more or
(z) 1:00 p.m. on the Business Day that Borrower desires to reborrow an amount
less than $10,000,000. Alternatively, Lender may, in its sole discretion,
re-advance to Borrower all or any portion of an Excess Buydown by causing the
Funding Bank to credit the Operating Account in that amount. Lender has no
obligation to pay or otherwise provide to Borrower any interest, dividends or
other benefits on an Excess Buydown.

Non-Usage Fees

At the end of each Calendar Quarter during the term of this Agreement,
commencing with the Calendar Quarter beginning on March 31, 2003, Lender will
determine the average usage of the Warehousing Commitment by calculating the
arithmetic daily average of the Warehousing Advances outstanding during such
Calendar Quarter ("Used Portion"). Lender will then subtract the Used Portion
from the lesser of (a) the arithmetic daily average of the Warehousing
Commitment Amount and (b) $50,000,000, and the result, if positive, will be
known as the "Unused Portion." Borrower must pay to Lender a fee ("Non-Usage
Fee") in the amount of 0.25% per annum of the Unused Portion during such
Calendar Quarter, except that no Non-Usage Fee will be charged for any Calendar
Quarter in which the Used Portion is equal to or greater than $25,000,000 of the
Warehousing Commitment Amount. The Non-Usage Fee is payable quarterly, in
arrears. Lender computes the Non-Usage Fee on the basis of the actual number of
days in each Calendar Quarter and a year of 360 days. Borrower must pay the
Non-Usage Fee within 9 days after the date of Lender's invoice or, if
applicable, within 2 days after the date of Lender's account analysis statement.
If the date set forth in clause (a) of the definition of Warehousing Maturity
Date occurs on a day other than the last day of a Calendar Quarter, Borrower
must pay the prorated portion of the Non-Usage Fee due from the beginning of the
then current Calendar Quarter to and including that date. Borrower is not
entitled to a reduction in the amount of the Non-Usage Fee if the Warehousing
Commitment is terminated at the request of Borrower or as a result of an Event
of Default. If the Warehousing Commitment terminates at the request of Borrower
or as a result of an Event of Default, Borrower must pay, on the date of
termination, a Non-Usage Fee in the amount of 0.25% per annum of the Warehousing
Commitment Amount in effect immediately prior to the date of termination, for
the period from the date of termination to and including the date set forth in
clause (a) of the definition of Warehousing Maturity Date. Lender's
determination of the Non-Usage Fee for any period is conclusive and binding,
absent manifest error.

Loan Package Fees, Wire Fees, Warehousing Fees

At the time of each Warehousing Advance against an Eligible Loan, Borrower will
incur a loan package fee ("Loan Package Fee") and a wire fee ("Wire Fee"). Loan
Package Fees and Wire Fees may, at Lender's discretion, be billed separately or
combined into a single warehousing fee ("Warehousing Fee"). Borrower must pay
all Loan Package Fees, Wire Fees or Warehousing Fees in the amount set forth in
Exhibit H within 9 days after the date of Lender's invoice or, if applicable,
within 2 days after the date of Lender's account analysis statement.

Miscellaneous Fees and Charges

Borrower must reimburse Lender for all Miscellaneous Fees and Charges. Borrower
must pay all Miscellaneous Fees and Charges within 9 days after the date of
Lender's invoice or, if applicable, within 2 days after the date of Lender's
account analysis statement.

Overdraft Advances

If, under the authorization given by Borrower in the Funding Bank Agreement or
pursuant to this Agreement, Lender debits Borrower's Operating Account or
directs the Funding Bank to honor an item presented against the Operating
Account or against the Check Disbursement Account, and that debit or direction
results in an overdraft, Lender may make an additional Warehousing Advance to
fund that overdraft ("Overdraft Advance"). Borrower must pay (a) the outstanding
amount of any Overdraft Advance, within 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 Bank One Prime Rate plus 2%, within 9 days after the
date of Lender's invoice or, if applicable, within 2 days after the date of
Lender's account analysis statement.

Method of Making Payments

Unless otherwise specified in this Agreement, Borrower must make all payments
under this Agreement to Lender by the close of business on the date when due
unless the date is not a Business Day. If the due date is not a Business Day,
payment is due on, and interest will accrue to, the next Business Day. Borrower
must make all payments in United States dollars in immediately available funds
transferred by wire to accounts designated by Lender.

Borrower authorizes Lender to cause the Funding Bank to charge Borrower's
Operating Account for any interest or fees due and payable to Lender on the 9th
day of each month in the amount set forth on Lender's invoice, without the
necessity of prior demand or Notice from Lender.

While a Default or Event of Default exists, Borrower authorizes Lender to cause
the Funding Bank to charge Borrower's Operating Account for any Obligations due
and payable to Lender, without the necessity of prior demand or Notice from
Lender.

 

End of Article 3

COLLATERAL

Grant of Security Interest

As security for the payment of the Warehousing Note and for the performance of
all of Borrower's Obligations, Borrower grants a security interest to Lender in
all of Borrower's right, title and interest in and to the following described
property ("Collateral"):

All amounts advanced by Lender to or for the account of Borrower under this
Agreement to fund a Mortgage Loan until that Mortgage Loan is closed and those
funds disbursed.

All Mortgage Loans, including all Mortgage Notes, Mortgages and Security
Agreements evidencing or securing those Mortgage Loans, that are delivered or
caused to be delivered to Lender (including delivery to a third party on behalf
of Lender), or that otherwise come into the possession, custody or control of
Lender (including the possession, custody or control of a third party on behalf
of Lender) for the purpose of pledge or in respect of which Lender has made a
Warehousing Advance under this Agreement (collectively, "Pledged Loans").

All Mortgage-backed Securities that are created in whole or in part on the basis
of Pledged Loans or that are delivered or caused to be delivered to Lender
(including delivery to a third party on behalf of Lender), or that otherwise
come into the possession, custody or control of Lender (including the
possession, custody or control of a third party on behalf of Lender) or that are
registered by book-entry in the name of Lender (including registration in the
name of a third party on behalf of Lender), in each case for the purpose of
pledge, or in respect of which a Warehousing Advance has been made by Lender
under this Agreement (collectively, "Pledged Securities").

All private mortgage insurance and all commitments issued by the VA or FHA to
insure or guarantee any Mortgage Loans included in the Pledged Loans; all
Purchase Commitments held by Borrower covering Pledged Loans or Pledged
Securities, and all proceeds from the sale of Pledged Loans or Pledged
Securities to Investors pursuant to those Purchase Commitments; and all personal
property, contract rights, servicing rights or contracts and servicing fees and
income or other proceeds, amounts and payments payable to Borrower as
compensation or reimbursement, accounts, payments, intangibles and general
intangibles of every kind relating to Pledged Loans, Pledged Securities,
Purchase Commitments, VA commitments or guaranties, FHA commitments, private
mortgage insurance and commitments, and all other documents or instruments
relating to Pledged Loans and Pledged Securities, including any interest of
Borrower in any fire, casualty or hazard insurance policies and any awards made
by any public body or decreed by any court of competent jurisdiction for a
taking or for degradation of value in any eminent domain proceeding as the same
relate to Pledged Loans.

All escrow accounts, documents, instruments, files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, discs, cards, accounting
records (including all information, records, tapes, data, programs, discs and
cards necessary or helpful in the administration or servicing of the Collateral)
and other information and data of Borrower relating to the Collateral.

All cash, whether now existing or acquired after the date of this Agreement,
delivered to or otherwise in the possession of Lender, the Funding Bank or
Lender's agent, bailee or custodian or designated on the books and records of
Borrower as assigned and pledged to Lender, including all cash deposited in the
Cash Collateral Account, the Check Disbursement Account and the Wire
Disbursement Account.

All Hedging Arrangements related to the Collateral ("Pledged Hedging
Arrangements") and Borrower's accounts in which those Hedging Arrangements are
held ("Pledged Hedging Accounts"), including all rights to payment arising under
the Pledged Hedging Arrangements and the Pledged Hedging Accounts, except that
Lender's security interest in the Pledged Hedging Arrangements and Pledged
Hedging Accounts applies only to benefits, including rights to payment, related
to the Collateral.

All cash and non-cash proceeds of the Collateral, including all dividends,
distributions and other rights in connection with, and all additions to,
modifications of and replacements for, the Collateral, and all products and
proceeds of the Collateral, together with whatever is receivable or received
when the Collateral or proceeds of Collateral are sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary,
including all rights to payment with respect to any cause of action affecting or
relating to the Collateral or proceeds of Collateral.

Maintenance of Collateral Records

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must preserve and maintain, at its chief executive office and
principal place of business or in a regional office approved by Lender, or in
the office of a computer service bureau engaged by Borrower and approved by
Lender and, upon request, make available to Lender the originals, or copies in
any case where the originals have been delivered to Lender or to an Investor, of
the Mortgage Notes, Mortgages and Security Agreements included in Pledged Loans,
Mortgage- backed Securities delivered to Lender as Pledged Securities, Purchase
Commitments, and all related Mortgage Loan documents and instruments, and all
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Collateral.

Release of Security Interest in Pledged Loans and Pledged Securities

Except as provided in Section 4.3 (b), Lender will release its security interest
in the Pledged Loans only against payment to Lender of the Release Amount in
connection with those Pledged Loans. If Pledged Loans are transferred to a pool
custodian or an Investor for inclusion in a Mortgage Pool and Lender's security
interest in the Pledged Loans included in the Mortgage Pool is not released
before the issuance of the related Mortgage- backed Security, then that
Mortgage-backed Security, when issued, is a Pledged Security, Lender's security
interest continues in the Pledged Loans backing that Pledged Security and Lender
is entitled to possession of the Pledged Security in the manner provided in this
Agreement.

If Pledged Loans are transferred to an Approved Custodian and included in an
Eligible Mortgage Pool, Lender's security interest in the Pledged Loans included
in the Eligible Mortgage Pool will be released upon the delivery of the Agency
Security to Lender (including delivery to or registration in the name of a third
party on behalf of Lender) and that Agency Security is a Pledged Security.
Lender's security interest in that Pledged Security will be released only
against payment to Lender of the Release Amount in connection with the Mortgage
Loans backing that Pledged Security.

Lender has the exclusive right to possession of all Pledged Securities or, if
Pledged Securities are issued in book-entry form or issued in certificated form
and delivered to a clearing corporation (as that term is defined in the Uniform
Commercial Code of Minnesota) or its nominee, Lender has the right to have the
Pledged Securities registered in the name of a securities intermediary (as that
term is defined in the Uniform Commercial Code of Minnesota) in an account
containing only customer securities and credited to an account of Lender. Lender
has no duty or obligation to deliver Pledged Securities to an Investor or to
credit Pledged Securities to the account of an Investor or an Investor's
designee except against payment for those Pledged Securities. Borrower
acknowledges that Lender may enter into one or more standing arrangements with
securities intermediaries with respect to Pledged Securities issued in book
entry form or issued in certificated form and delivered to a clearing
corporation or its designee, under which the Pledged Securities are registered
in the name of the securities intermediary, and Borrower agrees, upon request of
Lender, to execute and deliver to those securities intermediaries Borrower's
written concurrence in any such standing arrangements.

If no Default or Event of Default occurs, Borrower may redeem a Pledged Loan or
Pledged Security from Lender's security interest by notifying Lender of its
intention to redeem the Pledged Loan or Pledged Security from pledge and either
(1) paying, or causing an Investor to pay, to Lender, for application as a
prepayment on the principal balance of the Warehousing Note, the Release Amount
in connection with the Pledged Loan or the Pledged Loans backing that Pledged
Security, or (2) delivering substitute Collateral that, in addition to being
acceptable to Lender in its sole discretion, will, when included with the
remaining Collateral, result in a Warehousing Collateral Value of all Collateral
held by Lender that is at least equal to the aggregate outstanding Warehousing
Advances.

After a Default or Event of Default occurs, Lender may, with no liability to
Borrower or any Person, continue to release its security interest in any Pledged
Loan or Pledged Security against payment of the Release Amount for that Pledged
Loan or for the Pledged Loans backing that Pledged Security.

The amount to be paid by Borrower to obtain the release of Lender's security
interest in a Pledged Loan ("Release Amount") will be (1) in connection with the
sale of a Pledged Loan by Borrower, the payment required in any bailee letter
pursuant to which Lender ships that Pledged Loan to an Investor, Approved
Custodian, pool custodian or other party, (2) in connection with the sale of a
Pledged Loan by Lender while an Event of Default exists, the amount paid to
Lender in a commercially reasonable disposition of that Pledged Loan and (3)
otherwise, until an Event of Default occurs, the principal amount of the
Warehousing Advance outstanding against the Pledged Loan.

Collection and Servicing Rights

If no Event of Default exists, Borrower may service and receive and collect
directly all sums payable to Borrower in respect of the Collateral other than
proceeds of any Purchase Commitment or proceeds of the sale of any Collateral.
All proceeds of any Purchase Commitment or any other sale of Collateral must be
paid directly to the Cash Collateral Account for application as provided in this
Agreement.

After an Event of Default, Lender or its designee is entitled to service and
receive and collect all sums payable to Borrower in respect of the Collateral,
and in such case (1) Lender or its designee in its discretion may, in its own
name, in the name of Borrower or otherwise, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but Lender has no obligation to do so,
(2) Borrower must, if Lender requests it to do so, hold in trust for the benefit
of Lender and immediately pay to Lender at its office designated by Notice, all
amounts received by Borrower upon or in respect of any of the Collateral,
advising Lender as to the source of those funds and (3) all amounts so received
and collected by Lender will be held by it as part of the Collateral.

Return of Collateral at End of Warehousing Commitment

If (a) the Warehousing Commitment has expired or been terminated, and (b) no
Warehousing Advances, interest or other Obligations are outstanding and unpaid,
Lender will release its security interest and will deliver all Collateral in its
possession to Borrower at Borrower's expense. Borrower's acknowledgement or
receipt for any Collateral released or delivered to Borrower under any provision
of this Agreement is a complete and full acquittance for the Collateral so
returned, and Lender is discharged from any liability or responsibility for that
Collateral.

Delivery of Collateral Documents

Lender may deliver documents relating to the Collateral to Borrower for
correction or completion under a Trust Receipt.

If no Default or Event of Default exists, upon delivery by Borrower to Lender of
shipping instructions pursuant to the applicable Exhibit B, Lender will deliver
the Mortgage Notes evidencing Pledged Loans or Pledged Securities, together with
all related loan documents and pool documents previously received by Lender
under the requirements of the applicable Exhibit B, to the designated Investor
or Approved Custodian or to another party designated by Borrower and acceptable
to Lender in its sole discretion.

If a Default or Event of Default exists, Lender may, without liability to
Borrower or any other Person, continue to deliver Pledged Loans or Pledged
Securities, together with all related loan documents and pool documents in
Lender's possession, to the applicable Investor, or Approved Custodian or to
another party acceptable to Lender in its sole discretion.

End of Article 4

CONDITIONS PRECEDENT

Initial Advance

Lender's obligation to make the initial Warehousing Advance, is subject to the
satisfaction, in the sole discretion of Lender, of the following conditions
precedent:

Lender must receive the following, all of which must be satisfactory in form and
content to Lender, in its sole discretion:

The Warehousing Note and this Agreement duly executed by Borrower.

Borrower's articles or certificate of incorporation, together with all
amendments, as certified by the Secretary of State of , Borrower's bylaws,
together with all amendments, certified by the corporate secretary or assistant
secretary of Borrower, and certificates of good standing dated within 30 days of
the date of this Agreement, together with a certification from the Franchise Tax
Board or other state tax authority stating that Borrower is in good standing
with the Franchise Tax Board or such state tax authority, if applicable.

A resolution of the board of directors of Borrower authorizing the execution,
delivery and performance of this Agreement and the other Loan Documents, each
Warehousing Advance Request and all other agreements, instruments or documents
to be delivered by Borrower under this Agreement.

A certificate as to the incumbency and authenticity of the signatures of the
officers of Borrower executing this Agreement and the other Loan Documents, and
of the officers and employees of Borrower delivering each Warehousing Advance
Request and all other agreements, instruments or documents to be delivered under
this Agreement (Lender being entitled to rely on that certificate until a new
incumbency certificate has been furnished to Lender).

Assumed Name Certificates dated within 30 days of the date of this Agreement for
any assumed name used by Borrower in the conduct of its business.

Fiscal year-end financial statements of Borrower (and, if applicable, Borrower's
Subsidiaries, on a consolidated basis) containing a balance sheet as of and
related statements of income, changes in stockholders' equity and cash flows for
the period ended on that date, all in reasonable detail and prepared in
accordance with GAAP applied on a basis consistent with prior periods and
accompanied by (A) an opinion as to those financial statements in form and
substance satisfactory to Lender and prepared by independent certified public
accountants of recognized standing acceptable to Lender and (B) any management
letters, management reports or other supplementary comments or reports delivered
by those accountants to Borrower or its board of directors.

Interim financial statements of Borrower (and, if applicable, Borrower's
Subsidiaries, on a consolidated basis) containing a balance sheet as of , and a
related statement of income, for the period ended on that date prepared in
accordance with GAAP applied on a basis consistent with Borrower's most recent
audited financial statements.

(8) A favorable written opinion of counsel to Borrower, addressed to Lender and
dated as of the date of this Agreement, covering such matters as Lender may
reasonably request.

Uniform Commercial Code, tax lien and judgment searches of the appropriate
public records for Borrower that do not disclose the existence of any prior Lien
on the Collateral other than in favor of Lender or as permitted under this
Agreement.

Copies of the certificates, documents or other written instruments that evidence
Borrower's eligibility described in Section 9.1, all in form and substance
satisfactory to Lender.

Copies of Borrower's errors and omissions insurance policy or mortgage
impairment insurance policy, and blanket bond coverage policy, or certificates
in lieu of policies, showing compliance by Borrower as of the date of this
Agreement with the provisions of Section 7.9.

A fully-executed Funding Bank Agreement and evidence that all accounts into
which Warehousing Advances will be funded have been established at the Funding
Bank.

A master commitment for the forward sale of Mortgage Loans by Borrower to
Lender, obligating Borrower to sell Lender not less than $200,000,000 in
Mortgage Loans between February 20, 2003, and February 10, 2004, on terms and in
form and substance satisfactory to Lender.

Receipt by Lender of any fees due on the date of this Agreement.

If Borrower is indebted to any of its directors, officers, shareholders or
Affiliates, as of the date of this Agreement, which indebtedness has a term of
more than 1 year or is in excess of $25,000, the Person to whom Borrower is
indebted must have executed a Subordination of Debt Agreement, on the form
prescribed by Lender; and Lender must have received an executed copy of that
Subordination of Debt Agreement, certified by the corporate secretary or
assistant secretary of Borrower to be true and complete and in full force and
effect as of the date of the Warehousing Advance.

Borrower must not have incurred any material liabilities, direct or contingent,
other than in the ordinary course of its business, since the Audited Statement
Date.

Each Advance

Lender's obligation to make the initial and each subsequent Warehousing Advance
is subject to the satisfaction, in the sole discretion of Lender, as of the date
of each Warehousing Advance, of the following additional conditions precedent:

Borrower must have delivered to Lender the Warehousing Advance Request and
Collateral Documents required by, and must have satisfied the procedures set
forth in, Article 2 and the Exhibits described in that Article. All items
delivered to Lender must be satisfactory to Lender in form and content, and
Lender may reject any item that does not satisfy the requirements of this
Agreement or of the related Purchase Commitment.

Lender must have received evidence satisfactory to it as to the making or
continuation of any book entry or the due filing and recording in all
appropriate offices of all financing statements and other instruments necessary
to perfect the security interest of Lender in the Collateral under the Uniform
Commercial Code or other applicable law.

The representations and warranties of Borrower contained in Article 6 and
Article 9 must be accurate and complete in all material respects as if made on
and as of the date of each Warehousing Advance.

Borrower must have performed all agreements to be performed by it under this
Agreement, and after giving effect to the requested Warehousing Advance, no
Default or Event of Default will exist under this Agreement.

Delivery of a Warehousing Advance Request by Borrower will be deemed a
representation by Borrower that all conditions set forth in this Section have
been satisfied as of the date of the Warehousing Advance.

Force Majeure

Notwithstanding Borrower's satisfaction of the conditions set forth in this
Agreement, Lender has no obligation to make a Warehousing Advance if Lender is
prevented from obtaining the funds necessary to make a Warehousing Advance, or
is otherwise prevented from making a Warehousing Advance as a result of any fire
or other casualty, failure of power, strike, lockout or other labor trouble,
banking moratorium, embargo, sabotage, confiscation, condemnation, riot, civil
disturbance, insurrection, act of terrorism, war or other activity of armed
forces, act of God or other similar reason beyond the control of Lender. Lender
will make the requested Warehousing Advance as soon as reasonably possible
following the occurrence of such an event.

 

End of Article 5

GENERAL REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender, as of the date of this Agreement and
as of the date of each Warehousing Advance Request and the making of each
Warehousing Advance, that:

Place of Business

Borrower's chief executive office and principal place of business is , , , .

Organization; Good Standing; Subsidiaries

Borrower is a duly organized, validly existing and in good standing under the
laws of the State of , and has the full legal power and authority to own its
property and to carry on its business as currently conducted. Borrower is duly
qualified as a foreign to do business and is in good standing in each
jurisdiction in which the transaction of its business makes qualification
necessary, except in jurisdictions, if any, where a failure to be in good
standing has no material adverse effect on Borrower's business, operations,
assets or financial condition as a whole. For the purposes of this Agreement,
good standing includes qualification for all licenses and payment of all taxes
required in the jurisdiction of its incorporation and in each jurisdiction in
which Borrower transacts business. Borrower has no Subsidiaries except as set
forth on Exhibit D, which sets forth with respect to each Subsidiary, its name,
address, jurisdiction of organization, each state in which it is qualified to do
business, and the percentage ownership of its capital stock by Borrower. Each of
Borrower's Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, and has the full legal
power and authority to own its property and to carry on its business as
currently conducted.

Authorization and Enforceability

Borrower has the power and authority to execute, deliver and perform this
Agreement, the Warehousing Note and other Loan Documents to which Borrower is
party and to make the borrowings under this Agreement. The execution, delivery
and performance by Borrower of this Agreement, the Warehousing Note and the
other Loan Documents to which Borrower is party and the making of the borrowings
under this Agreement, and the Warehousing Note, have been duly and validly
authorized by all necessary corporate action on the part of Borrower (none of
which actions has been modified or rescinded, and all of which actions are in
full force and effect) and do not and will not (a) conflict with or violate any
provision of law, of any judgments binding upon Borrower, or of the articles of
incorporation or by- laws of Borrower, or (b) conflict with or result in a
breach of, constitute a default or require any consent under, or result in or
require the acceleration of any indebtedness of Borrower under any agreement,
instrument or indenture to which Borrower is a party or by which Borrower or its
property may be bound or affected, or result in the creation of any Lien upon
any property or assets of Borrower (other than the Lien on the Collateral
granted under this Agreement). This Agreement, the Warehousing Note and the
other Loan Documents constitute the legal, valid and binding obligations of
Borrower, enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other such laws affecting the enforcement
of creditors' rights.

Approvals

The execution and delivery of this Agreement, the Warehousing Note and the other
Loan Documents and the performance of Borrower's obligations under this
Agreement, the Warehousing Note and the other Loan Documents and the validity
and enforceability of this Agreement, the Warehousing Note and the other Loan
Documents do not require any license, consent, approval or other action of any
state or federal agency or governmental or regulatory authority other than those
that have been obtained and remain in full force and effect.

Financial Condition

The balance sheet of Borrower (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) as of each Statement Date, and the related statements of
income, cash flows and changes in stockholders' equity for the fiscal period
ended on each Statement Date, furnished to Lender, fairly present the financial
condition of Borrower (and, if applicable, Borrower's Subsidiaries) as at that
Statement Date and the results of its operations for the fiscal period ended on
that Statement Date. Borrower had, on each Statement Date, no known material
liabilities, direct or indirect, fixed or contingent, matured or unmatured, or
liabilities for taxes, long-term leases or unusual forward or long-term
commitments not disclosed by, or reserved against in, those financial
statements, and at the present time there are no material unrealized or
anticipated losses from any loans, advances or other commitments of Borrower
except as previously disclosed to Lender in writing. Those financial statements
were prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved. Since the Audited Statement Date, there has been no
material adverse change in the business, operations, assets or financial
condition of Borrower (and, if applicable, Borrower's Subsidiaries), nor is
Borrower aware of any state of facts that (with or without notice or lapse of
time or both) would or could result in any such material adverse change.

Litigation

There are no actions, claims, suits or proceedings pending or, to Borrower's
knowledge, threatened or reasonably anticipated against or affecting Borrower or
any Subsidiary of Borrower in any court or before any arbitrator or before any
government commission, board, bureau or other administrative agency that, if
adversely determined, may reasonably be expected to result in a material adverse
change in Borrower's business, operations, assets or financial condition as a
whole, or that would affect the validity or enforceability of this Agreement,
the Warehousing Note or any other Loan Document.

Compliance with Laws

Neither Borrower nor any Subsidiary of Borrower is in violation of any provision
of any law, or of any judgment, award, rule, regulation, order, decree, writ or
injunction of any court or public regulatory body or authority that could result
in a material adverse change in Borrower's business, operations, assets or
financial condition as a whole or that would affect the validity or
enforceability of this Agreement, the Warehousing Note or any other Loan
Document.

Regulation U

Borrower 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 Warehousing Advance made under
this Agreement will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.

Investment Company Act

Borrower is not an "investment company" or controlled by an "investment company"
within the meaning of the Investment Company Act.

Payment of Taxes

Borrower and each of its Subsidiaries has filed or caused to be filed all
federal, state and local income, excise, property and other tax returns that are
required to be filed with respect to the operations of Borrower and its
Subsidiaries, all such returns are true and correct and Borrower and each of its
Subsidiaries has paid or caused to be paid all taxes shown on those returns or
on any assessment, to the extent that those taxes have become due, including all
FICA payments and withholding taxes, if appropriate. The amounts reserved as a
liability for income and other taxes payable in the financial statements
described in Section 6.5 are sufficient for payment of all unpaid federal, state
and local income, excise, property and other taxes, whether or not disputed, of
Borrower and its Subsidiaries accrued for or applicable to the period and on the
dates of those financial statements and all years and periods prior to those
financial statements and for which Borrower and its Subsidiaries may be liable
in their own right or as transferee of the assets of, or as successor to, any
other Person. No tax Liens have been filed and no material claims are being
asserted against Borrower, any Subsidiary of Borrower or any property of
Borrower or any Subsidiary of Borrower with respect to any taxes, fees or
charges.

Agreements

Neither Borrower nor any Subsidiary of Borrower is a party to any agreement,
instrument or indenture or subject to any restriction materially and adversely
affecting its business, operations, assets or financial condition, except as
disclosed in the financial statements described in Section 6.5. Neither Borrower
nor any Subsidiary of Borrower is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement, instrument, or indenture which default could result in a material
adverse change in Borrower's business, operations, properties or financial
condition as a whole. No holder of any indebtedness of Borrower or of any of its
Subsidiaries has given notice of any asserted default under that indebtedness,
and no liquidation or dissolution of Borrower or of any of its Subsidiaries and
no receivership, insolvency, bankruptcy, reorganization or other similar
proceedings relative to Borrower or of any of its Subsidiaries or any of its or
their properties is pending, or to the knowledge of Borrower, threatened.

Title to Properties

Borrower and each Subsidiary of Borrower has good, valid, insurable and (in the
case of real property) marketable title to all of its properties and assets
(whether real or personal, tangible or intangible) reflected on the financial
statements described in Section 6.5, except for those properties and assets that
Borrower has disposed of since the date of those financial statements either in
the ordinary course of business or because they were no longer used or useful in
the conduct of Borrower's or the Subsidiary's business. All of Borrower's
properties and assets are free and clear of all Liens except as disclosed in
Borrower's financial statements.

ERISA

Each Plan is in compliance with all applicable requirements of ERISA and the
Internal Revenue Code and with all material applicable rulings and regulations
issued under the provisions of ERISA and the Internal Revenue Code setting forth
those requirements, except where any failure to comply would not result in a
material loss to Borrower or any ERISA Affiliate. All of the minimum funding
standards or other contribution obligations applicable to each Plan have been
satisfied. No Plan is a defined-benefit pension plan subject to Title IV of
ERISA, and there is no Multiemployer Plan.

No Retiree Benefits

Except as required under Section 4980B of the Internal Revenue Code, Section 601
of ERISA or applicable state law, neither Borrower nor, if applicable, any
Subsidiary is obligated to provide post-retirement medical or insurance benefits
with respect to employees or former employees.

Assumed Names

Borrower does not originate Mortgage Loans or otherwise conduct business under
any names other than its legal name and the assumed names set forth on
Exhibit G. Borrower has made all filings and taken all other action as may be
required under the laws of any jurisdiction in which it originates Mortgage
Loans or otherwise conducts business under any assumed name. Borrower's use of
the assumed names set forth on Exhibit G does not conflict with any other
Person's legal rights to any such name, nor otherwise give rise to any liability
by Borrower to any other Person. Borrower may amend Exhibit G to add or delete
any assumed names used by Borrower to conduct business. An amendment to Exhibit
G to add an assumed name is not effective until Borrower has delivered to Lender
an assumed name certificate in the jurisdictions in which the assumed name is to
be used, which must be satisfactory in form and content to Lender, in its sole
discretion. In connection with any amendment to delete a name from Exhibit G,
Borrower represents and warrants that it has ceased using that assumed name in
all jurisdictions.

Servicing

Exhibit C

is a true and complete list of Borrower's Servicing Portfolio. All of Borrower's
Servicing Contracts are in full force and effect, and are unencumbered by Liens
other than Liens disclosed in Exhibit C. No default or event that, with notice
or lapse of time or both, would become a default, exists under any of Borrower's
Servicing Contracts.

 

End of Article 6

AFFIRMATIVE COVENANTS

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:

Payment of Obligations

Punctually pay or cause to be paid all Obligations, including the Obligations
payable under this Agreement and under the Warehousing Note, in accordance with
their terms.

Financial Statements

Deliver to Lender:

As soon as available and in any event within 30 days after the end of each
month, including the last month of Borrower's fiscal year, an interim statement
of income of Borrower (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) for the immediately preceding month and for the period from
the beginning of the fiscal year to the end of that month, and the related
balance sheet as at the end of the immediately preceding month, all in
reasonable detail, subject, however, to year-end audit adjustments.

As soon as available and in any event within 90 days after the end of each
fiscal year of Borrower, fiscal year- end statements of income, changes in
stockholders' equity and cash flow of Borrower (and, if applicable, Borrower's
Subsidiaries, on a consolidated basis) for that year, and the related balance
sheet as of the end of that year (setting forth in comparative form the
corresponding figures for the preceding fiscal year), all in reasonable detail
and accompanied by (1) an opinion as to those financial statements in form and
substance satisfactory to Lender and prepared by independent certified public
accountants of recognized standing acceptable to Lender and (2) any management
letters, management reports or other supplementary comments or reports delivered
by those accountants to Borrower or its board of directors.

Together with each delivery of financial statements required by this Section, a
Compliance Certificate substantially in the form of Exhibit E.

Copies of all regular or periodic financial and other reports that Borrower
files with the Securities and Exchange Commission or any successor governmental
agency or other entity.

Other Borrower Reports

Deliver to Lender:

As soon as available and in any event within 30 days after the end of each
month, a consolidated loan production report as of the end of that month,
presenting the total dollar volume and the number of Mortgage Loans originated
and closed or purchased during that month and for the fiscal year-to-date,
specified by property type and loan type.

As soon as available and in any event within 30 days after the end of each
month, a commitment summary and pipeline report, substantially in the form of
Exhibit J, as of the end of that month.

Unless the Funding Bank has previously provided Lender with a copy of the
Funding Bank's monthly statement for the Check Disbursement Account, as soon as
available and in any event within 30 days after the end of each month, a copy of
that monthly statement.

As soon as available and in any event within 30 days after the end of each
Calendar Quarter, a report as of the end of that Calendar Quarter detailing all
requests that Borrower repurchase Mortgage Loans from an Investor or out of an
Eligible Mortgage Pool, the status of each such request and any indemnification
or similar agreement to which Borrower is a party in connection with any such
request.

Other reports in respect of Pledged Assets, including copies of purchase
confirmations issued by Investors purchasing Pledged Loans from Borrower, in
such detail and at such times as Lender in its discretion may reasonably
request.

Upon the request of Lender, copies of all press releases, if any, of Borrower
relating to Borrower's business activities.

With reasonable promptness, all further information regarding the business,
operations, properties or financial condition of Borrower as Lender may
reasonably request, including copies of any audits completed by HUD, Ginnie Mae,
Fannie Mae or Freddie Mac.

Maintenance of Existence; 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, including its eligibility as lender, seller/servicer
and issuer described under Section 9.1; conduct its business in an orderly and
efficient manner; maintain a net worth of acceptable assets as required for
maintaining Borrower's eligibility as lender, seller/servicer and issuer
described under Section 9.1; and make no material change in the nature or
character of its business or engage in any business in which it was not engaged
on the date of this Agreement.

Compliance with Applicable Laws

Comply with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, a breach of which could result in a
material adverse change in Borrower's business, operations, assets, or financial
condition as a whole or on the enforceability of this Agreement, the Warehousing
Note, any other Loan Document or any Collateral, except where contested in good
faith and by appropriate proceedings.

Inspection of Properties and Books; Operational Reviews

Permit Lender or any Participant (and their authorized representatives) to
discuss the business, operations, assets and financial condition of Borrower and
its Subsidiaries with Borrower's officers, agents and employees, and to examine
and make copies or extracts of Borrower's and its Subsidiaries' books of
account, all at such reasonable times as Lender or any Participant may request.
Provide its accountants with a copy of this Agreement promptly after its
execution and authorize and instruct them to answer candidly all questions that
the officers of Lender or any Participant or any authorized representatives of
Lender or any Participant may address to them in reference to the financial
condition or affairs of Borrower and its Subsidiaries. Borrower may have its
representatives in attendance at any meetings held between the officers or other
representatives of Lender or any Participant and Borrower's accountants under
this authorization. With reasonable notice and during normal business hours,
permit Lender or any Participant (and their authorized representatives) access
to Borrower's premises and records for the purpose of conducting a review
relating to Borrower's Obligations under this Agreement, of Borrower's general
mortgage business methods, policies and procedures, auditing its loan files and
reviewing the financial and operational aspects of Borrower's business.

Notice

Give prompt Notice to Lender of (a) any action, suit or proceeding instituted by
or against Borrower or any of its Subsidiaries in any federal or state court or
before any commission or other regulatory body (federal, state or local,
domestic or foreign), which action, suit or proceeding has at issue in excess of
$100,000, or any such proceedings threatened against Borrower or any of its
Subsidiaries in writing containing the details of that action, suit or
proceeding; (b) the filing, recording or assessment of any federal, state or
local tax Lien against Borrower, or any of its assets or any of its
Subsidiaries; (c) an Event of Default; (d) a Default that continues for more
than 4 days; (e) the suspension, revocation or termination of Borrower's
eligibility, in any respect, as lender, seller/servicer or issuer as described
under Section 9.1; (f) the transfer, loss, nonrenewal or termination of any
Servicing Contracts to which Borrower is a party, or which is held for the
benefit of Borrower, and the reason for that transfer, loss, nonrenewal or
termination; (g) any Prohibited Transaction with respect to any Plan, specifying
the nature of the Prohibited Transaction and what action Borrower proposes to
take with respect to it; and (h) any other action, event or condition of any
nature that could lead to or result in a material adverse change in the
business, operations, assets or financial condition of Borrower or any of its
Subsidiaries.

Payment of Debt, Taxes and Other Obligations

Pay, perform and discharge, or cause to be paid, performed and discharged, all
of the obligations and indebtedness of Borrower and its Subsidiaries, all taxes,
assessments and governmental charges or levies imposed upon Borrower or its
Subsidiaries or upon their respective income, receipts or properties before
those taxes, assessments and governmental charges or levies become past due, and
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, could become a Lien or charge upon any of their respective properties or
assets. Borrower and its Subsidiaries are not required to pay, however, any
taxes, assessments and governmental charges or levies or claims for labor,
materials or supplies for which Borrower or its Subsidiaries have obtained an
adequate bond or insurance or that are being contested in good faith and by
proper proceedings that are being reasonably and diligently pursued and for
which proper reserves have been created.

Insurance

Maintain blanket bond coverage and errors and omissions insurance or mortgage
impairment insurance, with such companies and in such amounts as satisfy
prevailing requirements applicable to a lender, seller/servicer and issuer
described under Section 9.1, and liability insurance and fire and other hazard
insurance on its properties, in each case with responsible insurance companies
acceptable to Lender, in such amounts and against such risks as is customarily
carried by similar businesses operating in the same location. Within 30 days
after Notice from Lender, obtain such additional insurance as Lender may
reasonably require, all at the sole expense of Borrower. Copies of such policies
must be furnished to Lender without charge upon request of Lender.

Closing Instructions

Indemnify and hold Lender harmless from and against any loss, including
reasonable attorneys' fees and costs, attributable to the failure of any title
insurance company, agent or attorney to comply with Borrower's disbursement or
instruction letter relating to any Mortgage Loan. Lender has the right to
pre-approve Borrower's choice of title insurance company, agent or attorney and
Borrower's disbursement or instruction letter to them in any case in which
Borrower intends to obtain a Warehousing Advance against the Mortgage Loan to be
created at settlement or to pledge that Mortgage Loan as Collateral under this
Agreement. In any event, Commencing 90 days following the Closing Date,
Borrower's disbursement or instruction letter must include the following
language:

A warehouse lender has a security interest in any amounts advanced by it to fund
this mortgage loan and in the mortgage loan funded with those amounts. You must
promptly return any amounts advanced by such warehouse lender that are not used
to fund this mortgage loan. You also must immediately return all amounts
advanced by such warehouse lender if this mortgage loan does not close and fund
within 1 Business Day of your receipt of those funds.

Subordination of Certain Indebtedness

Cause any indebtedness of Borrower to any shareholder, director, officer or
Affiliate of Borrower, which indebtedness has a term of more than 1 year or is
in excess of $25,000, to be subordinated to the Obligations by the execution and
delivery to Lender of a Subordination of Debt Agreement, on the form prescribed
by Lender, certified by the corporate secretary of Borrower to be true and
complete and in full force and effect.

Other Loan Obligations

Perform all material obligations under the terms of each loan agreement, note,
mortgage, security agreement or debt instrument by which Borrower is bound or to
which any of its property is subject, and promptly notify Lender in writing of a
declared default under or the termination, cancellation, reduction or nonrenewal
of any of its other lines of credit or agreements with any other lender.
Exhibit F is a true and complete list of all such lines of credit or agreements
as of the date of this Agreement. Borrower must give Lender at least 10 days
Notice before entering into any additional lines of credit or agreements.

ERISA

Maintain (and, if applicable, cause each ERISA Affiliate to maintain) each Plan
in compliance with all material applicable requirements of ERISA and of the
Internal Revenue Code and with all applicable rulings and regulations issued
under the provisions of ERISA and of the Internal Revenue Code, and not (and, if
applicable, not permit any ERISA Affiliate to), (a) engage in any transaction in
connection with which Borrower or any ERISA Affiliate would be subject to either
a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code, in either case in an amount exceeding
$25,000 or (b) fail to make full payment when due of all amounts that, under the
provisions of any Plan, Borrower or any ERISA Affiliate is required to pay as
contributions to that Plan, or permit to exist any accumulated funding
deficiency (as such term is defined in Section 302 of ERISA and Section 412 of
the Internal Revenue Code), whether or not waived, with respect to any Plan in
an aggregate amount exceeding $25,000.

Use of Proceeds of Warehousing Advances

Use the proceeds of each Warehousing Advance solely for the purpose of funding
Eligible Loans and against the pledge of those Eligible Loans as Collateral.

 

End of Article 7

NEGATIVE COVENANTS

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower must not, either directly or
indirectly, without the prior written consent of Lender:

Contingent Liabilities

Assume, guarantee, endorse or otherwise become contingently liable for the
obligation of any Person except by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, and except for
obligations arising in connection with the sale of Mortgage Loans with recourse
in the ordinary course of Borrower's business.

Pledge of Servicing Contracts

Pledge or grant a security interest in any existing or future Servicing
Contracts relating to Pledged Loans or Pledged Securities other than to Lender,
or omit to take any action required to keep all of Borrower's Servicing
Contracts in full force and effect.

Restrictions on Fundamental Changes

Consolidate, merge or enter into any analogous reorganization or transaction
with any Person.

Materially amend or otherwise modify Borrower's articles of incorporation or
by-laws that could affect Borrower's Obligations under this Agreement.

Liquidate, wind up or dissolve (or suffer any liquidation or dissolution).

Cease actively to engage in the business of originating or acquiring Mortgage
Loans or make any other material change in the nature or scope of the business
in which Borrower engages as of the date of this Agreement.

Sell, assign, lease, convey, transfer or otherwise dispose of (whether in one
transaction or a series of transactions) all or any substantial part of
Borrower's business or assets, whether now owned or acquired after the Closing
Date, other than, in the ordinary course of business and to the extent not
otherwise prohibited by this Agreement, sales of (1) Mortgage Loans, (2)
Mortgage-backed Securities and (3) Servicing Contracts.

Acquire by purchase or in any other transaction all or substantially all of the
business or property of, or stock or other ownership interests of, any Person.

Permit any Subsidiary of Borrower to do or take any of the foregoing actions.

Subsidiaries

Form or acquire, or permit any Subsidiary of Borrower to form or acquire, any
Person that would thereby become a Subsidiary.

Deferral of Subordinated Debt

Pay any Subordinated Debt of Borrower in advance of its stated maturity or,
after a Default or Event of Default under this Agreement has occurred, make any
payment of any kind on any Subordinated Debt of Borrower until all of the
Obligations have been paid and performed in full and any applicable preference
period has expired.

Loss of Eligibility

Take any action that would cause Borrower to lose all or any part of its status
as an eligible lender, seller/servicer or issuer as described under Section 9.1.

Accounting Changes

Make, or permit any Subsidiary of Borrower to make, any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change its fiscal year or the fiscal year of any Subsidiary of Borrower.

Leverage Ratio

Permit Borrower's Leverage Ratio at any time to exceed .

Minimum Tangible Net Worth

Permit Borrower's Tangible Net Worth at any time to be less than .

Current Ratio

Permit Borrower's Current Ratio at any time to be less than 1.10 to 1.

Minimum Cash

Permit Borrower's Cash and Cash Equivalents at any time to be less than
$12,500,000.

Profitability

Permit Borrower's net income at the end of each fiscal quarter of Borrower to be
less than zero.

Distributions to Shareholders

For any fiscal year, declare or pay any dividends or otherwise declare or make
any distribution to Borrower's shareholders (including any purchase or
redemption of stock) if a Default or Event of Default exists or would occur as a
result of the dividend or distribution.

Transactions with Affiliates

Directly or indirectly (a) make any loan, advance, extension of credit or
capital contribution to any of Borrower's Affiliates, (b) sell, transfer, pledge
or assign any of its assets to or on behalf of those Affiliates, (c) merge or
consolidate with or purchase or acquire assets from those Affiliates, or (d) pay
management fees to or on behalf of those Affiliates; provided, however, that
Borrower may undertake such activities, other than merging or consolidating with
those Affiliates, (i) if they are directly related to its auto loan financing
business and (ii) with respect to those Affiliates that issue Mortgage-backed
Securities, in each case, as long as no Default or Event of Default exists or
would occur as a result, either directly or indirectly, of such activities.

 

Recourse Servicing Contracts

Acquire or enter into Servicing Contracts under which Borrower must repurchase
or indemnify the holder of the Mortgage Loans as a result of defaults on the
Mortgage Loans at any time during the term of those Mortgage Loans.

 

End of Article 8

SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL

Special Representations and Warranties Concerning Eligibility as Seller/Servicer
of Mortgage Loans

Borrower represents and warrants to Lender, as of the date of this Agreement and
as of the date of each Warehousing Advance Request and the making of each
Warehousing Advance, that Borrower is approved and qualified and in good
standing as a lender, seller/servicer or issuer, as set forth below, and meets
all requirements applicable to its status as:

A Fannie Mae-approved seller/servicer of Mortgage Loans, eligible to originate,
purchase, hold, sell and service Mortgage Loans to be sold to Fannie Mae.

A Freddie Mac-approved seller/servicer of Mortgage Loans, eligible to originate,
purchase, hold, sell and service Mortgage Loans to be sold to Freddie Mac.

A Lender-approved seller/servicer of Mortgage Loans, eligible to originate,
purchase, hold, sell and service Mortgage Loans to be sold to Lender.

Special Representations and Warranties Concerning Warehousing Collateral

Borrower represents and warrants to Lender, as of the date of this Agreement and
as of the date of each Warehousing Advance Request and the making of each
Warehousing Advance, that:

Borrower has not selected the Collateral in a manner so as to affect adversely
Lender's interests.

Borrower is the legal and equitable owner and holder, free and clear of all
Liens (other than Liens granted under this Agreement), of the Pledged Loans and
the Pledged Securities. All Pledged Loans, Pledged Securities and related
Purchase Commitments have been duly authorized and validly issued to Borrower,
and all of the foregoing items of Collateral comply with all of the requirements
of this Agreement, and have been and will continue to be validly pledged or
assigned to Lender, subject to no other Liens.

Borrower has, and will continue to have, the full right, power and authority to
pledge the Collateral pledged and to be pledged by it under this Agreement.

Each Mortgage Loan and each related document included in the Pledged Loans
(1) has been duly executed and delivered by the parties to that Mortgage Loan
and that related document, (2) has been made in compliance with all applicable
laws, rules and regulations (including all laws, rules and regulations relating
to usury), (3) is and will continue to be a legal, valid and binding obligation,
enforceable in accordance with its terms, without setoff, counterclaim or
defense in favor of the mortgagor under the Mortgage Loan or any other obligor
on the Mortgage Note and (4) has not been modified, amended or any requirements
of which waived, except in writing that is part of the Collateral Documents.

Each Pledged Loan is denominated in dollars and secured by a Mortgage on real
property and improvements located in one of the states of the United States or
the District of Columbia.

Unless Third Party Originated Loans are permitted, each Pledged Loan has been
closed or will be closed and funded with the Warehousing Advance made against
it.

Except for open-ended Second Mortgage Loans, each Mortgage Loan has been fully
advanced in the face amount of its Mortgage Note.

Each First Mortgage Loan is secured by a First Mortgage on the real property and
improvements described in or covered by that Mortgage.

Each First Mortgage Loan has or will have a title insurance policy, in ALTA form
or equivalent, from a recognized title insurance company, insuring the priority
of the Lien of the Mortgage and meeting the usual requirements of Investors
purchasing those Mortgage Loans.

Each Second Mortgage Loan is secured by a Second Mortgage on the real property
and improvements described in or covered by that Mortgage.

To the extent required by the related Purchase Commitment or by Investors
generally for similar Mortgage Loans, each Second Mortgage Loan has or will have
a title insurance policy, in ALTA form or equivalent, from a recognized title
insurance company, insuring the priority of the Lien of the Mortgage and meeting
the usual requirements of Investors purchasing those Mortgage Loans.

Each Mortgage Loan has been evaluated or appraised in accordance with Title XI
of FIRREA.

The Mortgage Note for each Pledged Loan is (1) payable or endorsed to the order
of Borrower, (2) an "instrument" within the meaning of Article 9 of the Uniform
Commercial Code of all applicable jurisdictions and (3) is denominated and
payable in United States dollars.

No default has existed for 60 days or more under any Mortgage Loan included in
the Pledged Loans.

No party to a Mortgage Loan or any related document is in violation of any
applicable law, rule or regulation that would impair the collectibility of the
Mortgage Loan or the performance by the mortgagor or any other obligor of its
obligations under the Mortgage Note or any related document.

All fire and casualty policies covering the real property and improvements
encumbered by each Mortgage included in the Pledged Loans (1) name and will
continue to name Borrower and its successors and assigns as the insured under a
standard mortgagee clause, (2) are and will continue to be in full force and
effect and (3) afford and will continue to afford insurance against fire and
such other risks as are usually insured against in the broad form of extended
coverage insurance generally available.

Pledged Loans secured by real property and improvements located in a special
flood hazard area designated as such by the Director of the Federal Emergency
Management Agency are and will continue to be covered by special flood insurance
under the National Flood Insurance Program.

Each Pledged Loan against which a Warehousing Advance is made on the basis of a
Purchase Commitment meets all of the requirements of that Purchase Commitment,
and each Pledged Security against which a Warehousing Advance is outstanding
meets all of the requirements of the related Purchase Commitment.

Pledged Loans that are intended to be exchanged for Agency Securities comply or,
prior to the issuance of the Agency Securities will comply, with the
requirements of any governmental instrumentality, department or agency issuing
or guaranteeing the Agency Securities.

Pledged Loans that are intended to be used in the formation of Mortgage-backed
Securities (other than Agency Securities) comply with the requirements of the
issuer of the Mortgage-backed Securities (or its sponsor) and of the Rating
Agencies.

The original assignments of Mortgage delivered to Lender for each Pledged Loan
(other than Pledged Loans registered on MERS) are in recordable form and comply
with all applicable laws and regulations governing the filing and recording of
such documents.

None of the mortgagors, guarantors or other obligors of any Pledged Loan is a
Person named in any Restriction List and to whom the provision of financial
services is prohibited or otherwise restricted by applicable law.

No Pledged Loan delivered to Lender is a Discontinued Loan.

Each Pledged Loan secured by real property to which a Manufactured Home is
affixed will create a valid Lien on that Manufactured Home that will have
priority over any other Lien on the Manufactured Home, whether or not arising
under applicable real property law.

Special Affirmative Covenants Concerning Warehousing Collateral

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:

Warrant and defend the right, title and interest of Lender in and to the
Collateral against the claims and demands of all Persons.

Service or cause to be serviced all Pledged Loans in accordance with the
standard requirements of the issuers of Purchase Commitments covering them and
all applicable HUD, Fannie Mae and Freddie Mac requirements, including taking
all actions necessary to enforce the obligations of the obligors under such
Mortgage Loans. Service or cause to be serviced all Mortgage Loans backing
Pledged Securities in accordance with applicable governmental requirements and
requirements of issuers of Purchase Commitments covering them. Hold all escrow
funds collected in respect of Pledged Loans and Mortgage Loans backing Pledged
Securities in trust, without commingling the same with non-custodial funds, and
apply them for the purposes for which those funds were collected.

Execute and deliver to Lender with respect to the Collateral those further
instruments of sale, pledge, assignment or transfer, and those powers of
attorney, as required by Lender, and 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 Lender under this Agreement.

Notify Lender within 3 Business Days of any default under, or of the termination
of, any Purchase Commitment relating to any Pledged Loan, Eligible Mortgage
Pool, or Pledged Security.

Promptly comply in all respects with the terms and conditions of all Purchase
Commitments, and all extensions, renewals and modifications or substitutions of
or to all Purchase Commitments. Deliver or cause to be delivered to the Investor
the Pledged Loans and Pledged Securities to be sold under each Purchase
Commitment not later than the mandatory delivery date of the Pledged Loans or
Pledged Securities under the Purchase Commitment.

Compare the names of every mortgagor, guarantor and other obligor of every
Mortgage Loan, together with appropriate identifying information concerning
those Persons obtained by Borrower, against every Restriction List, and make
certain that none of the mortgagors, guarantors or other obligors of any
Mortgage Loan is a Person named in any Restriction List and to whom the
provision of financial services is prohibited or otherwise restricted by
applicable law.

Prior to the origination by Borrower of any Mortgage Loans for sale to Fannie
Mae, enter into an agreement among Borrower, Lender and Fannie Mae, pursuant to
which Fannie Mae agrees to send all cash proceeds of Mortgage Loans sold by
Borrower to Fannie Mae to the Cash Collateral Account.

Prior to the origination by Borrower of any Mortgage Loan to be registered on
the MERS system, obtain the approval of Lender and enter into an Electronic
Tracking Agreement.

Special Negative Covenants Concerning Warehousing Collateral

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower must not, either directly or
indirectly, without the prior written consent of Lender:

Amend or modify, or waive any of the terms and conditions of, or settle or
compromise any claim in respect of, any Pledged Loans or Pledged Securities.

Sell, transfer or assign, or grant any option with respect to, or pledge (except
under this Agreement and, with respect to each Pledged Loan or Pledged Security,
the related Purchase Commitment) any of the Collateral or any interest in any of
the Collateral.

Make any compromise, adjustment or settlement in respect of any of the
Collateral or accept other than cash in payment or liquidation of the
Collateral.

End of Article 9

DEFAULTS; REMEDIES

Events of Default

The occurrence of any of the following is an event of default ("Event of
Default"):

Borrower fails to pay the principal of any Warehousing Advance when due, whether
at stated maturity, by acceleration, or otherwise; or fails to pay any
installment of interest on any Warehousing Advance within 9 days after the date
of Lender's invoice or, if applicable, within 2 days after the date of Lender's
account analysis statement; or fails to pay, within any applicable grace period,
any other amount due under this Agreement or any other Obligation of Borrower to
Lender.

Borrower or any of its Subsidiaries fails to pay, or defaults in the payment of
any principal or interest on, any other indebtedness or any contingent
obligation within any applicable grace period; breaches or defaults with respect
to any other material term of any other indebtedness or of any loan agreement,
mortgage, indenture or other agreement relating to that indebtedness, if the
effect of that breach or default is to cause, or to permit the holder or holders
of that indebtedness (or a trustee on behalf of such holder or holders) to
cause, indebtedness of Borrower or its Subsidiaries in the aggregate amount of
$50,000 or more to become or be declared due before its stated maturity (upon
the giving or receiving of notice, lapse of time, both, or otherwise).

Borrower fails to perform or comply with any term or condition applicable to it
contained in Sections 7.4 or 7.14 or in any Section of Article 8.

Any representation or warranty made or deemed made by Borrower under this
Agreement, in any other Loan Document or in any written statement or certificate
at any time given by Borrower, other than the representations and warranties set
forth in Article 9 with respect to specific Pledged Loans, is inaccurate or
incomplete in any material respect on the date as of which it is made or deemed
made.

Borrower defaults in the performance of or compliance with any term contained in
this Agreement or any other Loan Document other than those referred to in
Sections 10.1(a), 10.1 (c) or 10.1 (d) and such default has not been remedied or
waived within 30 days after the earliest of (1) receipt by Borrower of Notice
from Lender of that default, (2) receipt by Lender of Notice from Borrower of
that default or (3) the date Borrower should have notified Lender of that
default under Section 7.7(c) or 7.7(d).

A material "event of default" (however defined) occurs under any agreement
between Borrower and Lender other than this Agreement and the other Loan
Documents.

A case (whether voluntary or involuntary) is filed by or against Borrower or any
Subsidiary of Borrower under any applicable bankruptcy, insolvency or other
similar federal or state law; or a court of competent jurisdiction appoints a
receiver (interim or permanent), liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Borrower or any Subsidiary of Borrower,
or over all or a substantial part of their respective properties or assets; or
Borrower or any Subsidiary of Borrower (1) consents to the appointment of or
possession by a receiver (interim or permanent), liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Borrower or any
Subsidiary of Borrower, or over all or a substantial part of their respective
properties or assets, (2) makes an assignment for the benefit of creditors, or
(3) fails, or admits in writing its inability, to pay its debts as those debts
become due.

Borrower fails to perform any contractual obligation to repurchase Mortgage
Loans, if such obligations in the aggregate exceed $500,000.

Any money judgment, writ or warrant of attachment or similar process involving
an amount in excess of $50,000 is entered or filed against Borrower or any of
its Subsidiaries or any of their respective assets and remains undischarged,
unvacated, unbonded or unstayed for a period of 30 days or 5 days before the
date of any proposed sale under that money judgment, writ or warrant of
attachment or similar process.

Any order, judgment or decree decreeing the dissolution of Borrower is entered
and remains undischarged or unstayed for a period of 20 days.

Borrower purports to disavow the Obligations or contests the validity or
enforceability of any Loan Document.

Lender's security interest on any portion of the Collateral becomes
unenforceable or otherwise impaired.

A material adverse change occurs in Borrower's financial condition, business,
properties, operations or prospects, or in Borrower's ability to repay the
Obligations.

Any Lien for any taxes, assessments or other governmental charges (1) is filed
against Borrower or any of its property, or is otherwise enforced against
Borrower or any of its property, or (2) obtains priority that is equal to
greater than the priority of Lender's security interest in any of the
Collateral.

Remedies

If an Event of Default described in Section 10.1(g) occurs with respect to
Borrower, the Warehousing Commitment will automatically terminate and the unpaid
principal amount of and accrued interest on the Warehousing Note and all other
Obligations will automatically become due and payable, without presentment,
demand or other Notice or requirements of any kind, all of which Borrower
expressly waives.

If any other Event of Default occurs, Lender may, by Notice to Borrower,
terminate the Warehousing Commitment and declare the Obligations to be
immediately due and payable.

If any Event of Default occurs, Lender may also take any of the following
actions:

Foreclose upon or otherwise enforce its security interest in any Lien on the
Collateral to secure all payments and performance of the Obligations in any
manner permitted by law or provided for in the Loan Documents.

Notify all obligors under any of the Collateral that the Collateral has been
assigned to Lender (or to another Person designated by Lender) and that all
payments on that Collateral are to be made directly to Lender (or such other
Person); settle, compromise or release, in whole or in part, any amounts any
obligor or Investor owes on any of the Collateral on terms acceptable to Lender;
enforce payment and prosecute any action or proceeding involving any of the
Collateral; and where any Collateral is in default, foreclose on and enforce any
Liens securing that Collateral in any manner permitted by law and sell any
property acquired as a result of those enforcement actions.

Prepare and submit for filing Uniform Commercial Code amendment statements
evidencing the assignment to Lender or its designee of any Uniform Commercial
Code financing statement filed in connection with any item of Collateral.

Act, or contract with a third party to act, at Borrower's expense, as servicer
or subservicer of Collateral requiring servicing, and perform all obligations
required under any Collateral, including Servicing Contracts and Purchase
Commitments.

Require Borrower to assemble and make available to Lender the Collateral and all
related books and records at a place designated by Lender.

Enter onto property where any Collateral or related books and records are
located and take possession of those items with or without judicial process; and
obtain access to Borrower's data processing equipment, computer hardware and
software relating to the Collateral and use all of the foregoing and the
information contained in the foregoing in any manner Lender deems necessary for
the purpose of effectuating its rights under this Agreement and any other Loan
Document.

Before the disposition of the Collateral, prepare it for disposition in any
manner and to the extent Lender deems appropriate.

Exercise all rights and remedies of a secured creditor under the Uniform
Commercial Code of Minnesota or other applicable law, including selling or
otherwise disposing of all or any portion of the Collateral at one or more
public or private sales, whether or not the Collateral is present at the place
of sale, for cash or credit or future delivery, on terms and conditions and in
the manner as Lender may determine, including sale under any applicable Purchase
Commitment. Borrower waives any right it may have to prior notice of the sale of
all or any portion of the Collateral to the extent allowed by applicable law. If
notice is required under applicable law, Lender will give Borrower not less than
10 days' notice of any public sale or of the date after which any private sale
may be held. Borrower agrees that 10 days' notice is reasonable notice. Lender
may, without notice or publication, adjourn any public or private sale one or
more times by announcement at the time and place fixed for the sale, and the
sale may be held at any time or place announced at the adjournment. In the case
of a sale of all or any portion of the Collateral on credit or for future
delivery, the Collateral sold on those terms may be retained by Lender until the
purchaser pays the selling price or takes possession of the Collateral. Lender
has no liability to Borrower if a purchaser fails to pay for or take possession
of Collateral sold on those terms, and in the case of any such failure, Lender
may sell the Collateral again upon notice complying with this Section.

Instead of or in conjunction with exercising the power of sale authorized by
Section 10.2(c)(8), Lender may proceed by suit at law or in equity to collect
all amounts due on the Collateral, or to foreclose Lender's Lien on and sell all
or any portion of the Collateral pursuant to a judgment or decree of a court of
competent jurisdiction.

Proceed against Borrower on the Warehousing Note.

Retain all excess proceeds from the sale or other disposition of the Collateral,
and apply them to the payment of the Obligations under Section 10.3.

Lender will incur no liability as a result of the commercially reasonable sale
or other disposition of all or any portion of the Collateral at any public or
private sale or other disposition. Borrower waives (to the extent permitted by
law) any claims it may have against Lender arising by reason of the fact that
the price at which the Collateral may have been sold at a private sale was less
than the price that Lender might have obtained at a public sale, or was less
than the aggregate amount of the outstanding Warehousing Advances, accrued and
unpaid interest on those Warehousing Advances, and unpaid fees, even if Lender
accepts the first offer received and does not offer the Collateral to more than
one offeree. Borrower agrees that any sale of Collateral under the terms of a
Purchase Commitment, or any other disposition of Collateral arranged by
Borrower, whether before or after the occurrence of an Event of Default, will be
deemed to have been made in a commercially reasonable manner.

Borrower acknowledges that Mortgage Loans are collateral of a type that is the
subject of widely distributed standard price quotations and that Mortgage-backed
Securities are collateral of a type that is customarily sold on a recognized
market. Borrower waives any right it may have to prior notice of the sale of
Pledged Securities, and agrees that Lender may purchase Pledged Loans and
Pledged Securities at a private sale of such Collateral.

Borrower specifically waives and releases (to the extent permitted by law) any
equity or right of redemption, stay or appraisal that Borrower has or may have
under any rule of law or statute now existing or adopted after the date of this
Agreement, and any right to require Lender to (1) proceed against any Person,
(2) proceed against or exhaust any of the Collateral or pursue its rights and
remedies against the Collateral in any particular order, or (3) pursue any other
remedy within its power. Lender is not required to take any action to preserve
any rights of Borrower against holders of mortgages having priority to the Lien
of any Mortgage or Security Agreement included in the Collateral or to preserve
Borrower's rights against other prior parties.

Lender may, but is not obligated to, advance any sums or do any act or thing
necessary to uphold or enforce the Lien and priority of, or the security
intended to be afforded by, any Mortgage or Security Agreement included in the
Collateral, including payment of delinquent taxes or assessments and insurance
premiums. All advances, charges, costs and expenses, including reasonable
attorneys' fees and disbursements, incurred or paid by Lender in exercising any
right, power or remedy conferred by this Agreement, or in the enforcement of
this Agreement, together with interest on those amounts at the Default Rate,
from the time paid by Lender until repaid by Borrower, are deemed to be
principal outstanding under this Agreement and the Warehousing Note.

No failure or delay on the part of Lender to exercise any right, power or remedy
provided in this Agreement or under any other Loan Document, at law or in
equity, will operate as a waiver of that right, power or remedy. No single or
partial exercise by Lender of any right, power or remedy provided under this
Agreement or any other Loan Document, at law or in equity, precludes any other
or further exercise of that right, power, or remedy by Lender, or Lender's
exercise of any other right, power or remedy. Without limiting the foregoing,
Borrower waives all defenses based on the statute of limitations to the extent
permitted by law. The remedies provided in this Agreement and the other Loan
Documents are cumulative and are not exclusive of any remedies provided at law
or in equity.

Upon the occurrence of an Event of Default, Borrower grants Lender a license or
other right to use, without charge, Borrower's computer programs, other
programs, labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, service marks and advertising matter, or any property
of a similar nature, as it pertains to the Collateral, in advertising for sale
and selling any of the Collateral and Borrower's rights under all licenses and
all other agreements related to the foregoing inure to Lender's benefit until
the Obligations are paid in full.

Application of Proceeds

Lender may apply the proceeds of any sale, disposition or other enforcement of
Lender's Lien on all or any portion of the Collateral to the payment of the
Obligations in the order Lender determines in its sole discretion. From and
after the indefeasible payment to Lender of all of the Obligations, any
remaining proceeds of the Collateral will be paid to Borrower, or to its
successors or assigns, or as a court of competent jurisdiction may direct. If
the proceeds of any sale, disposition or other enforcement of the Collateral are
insufficient to cover the costs and expenses of that sale, disposition or other
enforcement and payment in full of all Obligations, Borrower is liable for the
deficiency.

Lender Appointed Attorney-in- Fact

Borrower appoints Lender its attorney-in-fact, with full power of substitution,
for the purpose of carrying out the provisions of this Agreement, the
Warehousing Note and the other Loan Documents and taking any action and
executing any instruments that Lender deems necessary or advisable to accomplish
that purpose. Borrower's appointment of Lender as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, Lender may give notice of its Lien on the Collateral to any Person,
either in Borrower's name or in its own name, endorse all Pledged Loans or
Pledged Securities payable to the order of Borrower, change or cause to be
changed the book-entry registration or name of subscriber or Investor on any
Pledged Security, prepare and submit for filing Uniform Commercial Code
amendment statements with respect to any Uniform Commercial Code financing
statements filed in connection with any item of Collateral or receive, endorse
and collect all checks made payable to the order of Borrower representing
payment on account of the principal of or interest on, or the proceeds of sale
of, any of the Pledged Loans or Pledged Securities and give full discharge for
those transactions.

Right of Set-Off

If Borrower defaults in the payment of any Obligation or in the performance of
any of its duties under the Loan Documents, Lender may, without Notice to or
demand on Borrower (which Notice or demand Borrower expressly waives), set-off,
appropriate or apply any property of Borrower held at any time by Lender, or any
indebtedness at any time owed by Lender to or for the account of Borrower,
against the Obligations, whether or not those Obligations have matured.

 

End of Article 10

MISCELLANEOUS

Notices

Except where telephonic or facsimile notice is expressly authorized by this
Agreement, all communications required or permitted to be given or made under
this Agreement ("Notices") must be in writing and must be sent by manual
delivery, overnight courier or United States mail (postage prepaid), addressed
as follows (or at such other address as may be designated by it in a Notice to
the other):

If to Borrower:

,

Attention: ,

Facsimile: (925) 551-3657

If to Lender:

Attention: ,

Facsimile: (925) 935-6424

In addition, Lender will use its best efforts to provide a copy of any Notice of
an Event of Default, or regarding the exercise of any of its remedies, to Ed
Giedgowd, General Counsel, E-Loan, Inc. 5875 Arnold Road, Bublin, CA 94568,
Facsimile: (925) 803-3503, or such other counsel as Borrower may designate, but
failure to provide such copy shall not render any such Notice ineffective.

All periods of Notice will be measured from the date of delivery if delivered
manually or by facsimile, from the first Business Day after the date of sending
if sent by overnight courier or from 4 days after the date of mailing if sent by
United States mail, except that Notices to Lender under Article 2 and
Section 3.3 (f) shall be deemed to have been given only when actually received
by Lender. Borrower authorizes Lender to accept Borrower's bailee pledge
agreements, Warehousing Advance Requests, shipping requests, wire transfer
instructions and security delivery instructions transmitted to Lender by
facsimile or RFConnects Delivery, and those documents, when transmitted to
Lender by facsimile or by RFConnects Delivery, have the same force and effect as
the originals.

Reimbursement Of Expenses; Indemnity

Borrower must: (a) pay Lender a document production fee in connection with the
preparation and negotiation of this Agreement; (b) pay such additional
documentation production fees as Lender may require and all out-of-pocket costs
and expenses of Lender, including reasonable fees, service charges and
disbursements of counsel to Lender (including allocated costs of internal
counsel), in connection with the amendment, enforcement and administration of
this Agreement, the Warehousing Note, and other Loan Documents, the making,
repayment and payment of interest on the Warehousing Advances and the payment of
all other Obligations under Loan Documents; (c) indemnify, pay, and hold
harmless Lender and any other holder of the Warehousing Note from and against,
all present and future stamp, documentary and other similar taxes with respect
to the foregoing matters and save Lender and any other holder of the Warehousing
Note harmless from and against all liabilities with respect to or resulting from
any delay or omission to pay such taxes; and (d) indemnify, pay and hold
harmless Lender and all of its Affiliates, officers, directors, employees or
agents and any subsequent holder of the Warehousing Note (collectively called
the "Indemnitees") from and against all liabilities, obligations, losses,
damages, penalties, judgments, suits, costs, expenses and disbursements of every
kind or nature (including the reasonable fees and disbursements of counsel to
the Indemnitees (including allocated costs of internal counsel) in connection
with any investigative, administrative or judicial proceeding, whether or not
the Indemnitees have been designated as parties to such proceeding) that may be
imposed upon, incurred by or asserted against such Indemnitees in any manner
relating to or arising out of this Agreement, the Warehousing Note, or any other
Loan Document or any of the transactions contemplated by this Agreement, the
Warehousing Note and the other Loan Documents, including against all
liabilities, obligations, losses, damages, penalties, judgments, suits, costs,
expenses and disbursements of every kind or nature (including the reasonable
fees and disbursements of counsel to the Indemnitees (including allocated costs
of internal counsel) in connection with any investigative, administrative or
judicial proceeding, whether or not the Indemnitees have been designated as
parties to such proceeding) arising from any breach of Sections 9.2(v) or 9.3(f)
or the making of any Mortgage Loan in which any mortgagor, guarantor or other
obligor is a Person named in any Restriction List and to whom the provision of
financial services is prohibited or otherwise restricted by applicable law
("Indemnified Liabilities"), except that Borrower has no obligation under this
Agreement with respect to Indemnified Liabilities arising from the gross
negligence or willful misconduct of any such Indemnitees. To the extent that the
undertaking to indemnify, pay and hold harmless as set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, Borrower must contribute the maximum portion that it is permitted to pay
and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them. The
agreement of Borrower contained in this Article survives the expiration or
termination of this Agreement and the payment in full of the Warehousing Note.
Attorneys' fees and disbursements incurred in enforcing, or on appeal from, a
judgment under this Agreement are recoverable separately from and in addition to
any other amount included in such judgment, and this clause is intended to be
severable from the other provisions of this Agreement and to survive and not be
merged into such judgment.

Financial Information

All financial statements and reports furnished to Lender under this Agreement
must be prepared in accordance with GAAP, applied on a basis consistent with
that applied in preparing the financial statements as at the end of and for
Borrower's most recent fiscal year (except to the extent otherwise required to
conform to good accounting practice).

Terms Binding Upon Successors; Survival of Representations

The terms and provisions of this Agreement are binding upon and inure to the
benefit of Borrower, Lender and their respective successors and assigns. All of
Borrower's representations, warranties, covenants and agreements survive the
making of any Warehousing Advance, and except where a longer period is set forth
in this Agreement, remain effective for as long as the Warehousing Commitment is
outstanding or there remain any Obligations to be paid or performed.

Assignment

Borrower cannot assign this Agreement. Lender may at any time, without Notice to
or the consent of Borrower, transfer or assign, in whole or in part, its
interest in this Agreement and the Warehousing Note along with Lender's security
interest in any of the Collateral, and any assignee of Lender may enforce this
Agreement, the Warehousing Note and its security interest in the Collateral
assigned.

Amendments

Except as otherwise provided in this Agreement, this Agreement may not be
amended, modified or supplemented unless the amendment, modification or
supplement is set forth in writing signed by both Borrower and Lender.

Governing Law

This Agreement and the other Loan Documents are governed by the laws of the
State of Minnesota, without reference to its principles of conflicts of laws.

Participations

Lender may at any time sell, assign or grant participations in, or otherwise
transfer to any other Person ("Participant"), all or part of the Obligations.
Without limiting Lender's exclusive right to collect and enforce the
Obligations, Borrower agrees that each participation will give rise to a
debtor-creditor relationship between Borrower and the Participant, and Borrower
authorizes each Participant, upon the occurrence of an Event of Default, to
proceed directly by right of setoff, banker's lien, or otherwise, against any
assets of Borrower that may be held by that Participant. Borrower authorizes
Lender to disclose to prospective and actual Participants all information in
Lender's possession concerning Borrower, this Agreement and the Collateral.

Relationship of the Parties

This Agreement provides for the making and repayment of Warehousing Advances by
Lender (in its capacity as a lender) and Borrower (in its capacity as a
borrower), for the payment of interest on those Warehousing Advances and for the
payment of certain fees by Borrower to Lender. The relationship between Lender
and Borrower is limited to that of creditor and secured party on the part of
Lender and of debtor on the part of Borrower. The provisions of this Agreement
and the other Loan Documents for compliance with financial covenants and the
delivery of financial statements and other operating reports are intended solely
for the benefit of Lender to protect its interest as a creditor and secured
party. Nothing in this Agreement creates or may be construed as permitting or
obligating Lender to act as a financial or business advisor or consultant to
Borrower, as permitting or obligating Lender to control Borrower or to conduct
Borrower's operations, as creating any fiduciary obligation on the part of
Lender to Borrower, or as creating any joint venture, agency, partnership or
other relationship between Lender and Borrower other than as explicitly and
specifically stated in the Loan Documents. Borrower acknowledges that it has had
the opportunity to obtain the advice of experienced counsel of its own choice in
connection with the negotiation and execution of the Loan Documents and to
obtain the advice of that counsel with respect to all matters contained in the
Loan Documents, including the waivers of jury trial and of punitive,
consequential, special or indirect damages contained in Sections 11.16 and
11.17, respectively. Borrower further acknowledges that it is experienced with
respect to financial and credit matters and has made its own independent
decisions to apply to Lender for credit and to execute and deliver this
Agreement.

Severability

If any provision of this Agreement is declared to be illegal or unenforceable in
any respect, that provision is null and void and of no force and effect to the
extent of the illegality or unenforceability, and does not affect the validity
or enforceability of any other provision of the Agreement.

Consent to Credit References

Borrower consents to the disclosure of information regarding Borrower and its
Subsidiaries and their relationships with Lender to Persons making credit
inquiries to Lender. This consent is revocable by Borrower at any time upon
Notice to Lender as provided in Section 11.1.

Counterparts

This Agreement may be executed in any number of counterparts, each of which will
be deemed an original, but all of which together constitute but one and the same
instrument.

Headings/Captions

The captions or headings in this Agreement and the other Loan Documents are for
convenience only and in no way define, limit or describe the scope or intent of
any provision of this Agreement or any other Loan Document.

Entire Agreement

This Agreement, the Warehousing Note and the other Loan Documents represent the
final agreement among the parties with respect to their subject matter, and may
not be contradicted by evidence of prior or contemporaneous oral agreements
among the parties. There are no oral agreements among the parties with respect
to the subject matter of this Agreement, the Warehousing Note and the other Loan
Documents.

Consent to Jurisdiction

AT THE OPTION OF LENDER, THIS AGREEMENT, THE WAREHOUSING NOTE AND THE OTHER LOAN
DOCUMENTS MAY BE ENFORCED IN ANY STATE OR FEDERAL COURT WITHIN THE STATE OF
MINNESOTA. BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF THOSE COURTS, AND
WAIVES ANY OBJECTION TO THE JURISDICTION OR VENUE OF THOSE COURTS, INCLUDING THE
OBJECTION THAT VENUE IN THOSE COURTS IS NOT CONVENIENT. ANY SUCH SUIT, ACTION OR
PROCEEDING MAY BE COMMENCED AND INSTITUTED BY SERVICE OF PROCESS UPON BORROWER
BY FIRST CLASS REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
TO BORROWER AT ITS ADDRESS LAST KNOWN TO LENDER. BORROWER'S CONSENT AND
AGREEMENT UNDER THIS SECTION DOES NOT AFFECT LENDER'S RIGHT TO ACCOMPLISH
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION OR
COURT. IN THE EVENT BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR
VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE
RELATIONSHIP CREATED BY THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, LENDER AT
ITS OPTION MAY HAVE THE CASE TRANSFERRED TO A STATE OR FEDERAL COURT WITHIN THE
STATE OF MINNESOTA OR, IF A TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, MAY HAVE BORROWER'S ACTION DISMISSED WITHOUT PREJUDICE.

Waiver of Jury Trial

BORROWER AND LENDER EACH PROMISES AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY A JURY, AND FULLY WAIVES ANY RIGHT TO TRIAL BY JURY TO
THE EXTENT THAT ANY SUCH RIGHT NOW EXISTS OR ARISES AFTER THE DATE OF THIS
AGREEMENT. THIS WAIVER OF THE RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN,
KNOWINGLY AND VOLUNTARILY, BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT TO TRIAL BY JURY WOULD
OTHERWISE APPLY. LENDER AND BORROWER ARE EACH AUTHORIZED AND DIRECTED TO SUBMIT
THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE
PARTIES TO THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF THE RIGHT TO
TRIAL BY JURY. FURTHER, BORROWER AND LENDER EACH CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING THE OTHER PARTY'S COUNSEL,
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF ITS REPRESENTATIVES OR AGENTS
THAT THE OTHER PARTY WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY
JURY.

Waiver of Punitive, Consequential, Special or Indirect Damages

BORROWER WAIVES ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL
OR INDIRECT DAMAGES FROM LENDER OR ANY OF LENDER'S AFFILIATES, OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN
ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY BORROWER AGAINST LENDER
OR ANY OF LENDER'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT. THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL OR INDIRECT DAMAGES IS KNOWINGLY AND VOLUNTARILY GIVEN BY BORROWER, AND
IS INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT TO
SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES WOULD OTHERWISE APPLY.
LENDER IS AUTHORIZED AND DIRECTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT AS
CONCLUSIVE EVIDENCE OF THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL OR INDIRECT DAMAGES.

End of Article 11

DEFINITIONS

Defined Terms

Capitalized terms defined below or elsewhere in this Agreement have the
following meanings or, as applicable, the meanings given to those terms in
Exhibits to this Agreement:

"Accrual Basis" has the meaning set forth in Section 3.1(c).

"Advance Rate" means, with respect to any Eligible Loan, the Advance Rate set
forth in Exhibit H for that type of Eligible Loan.

"Affiliate" means, when used with reference to any Person, (a) each Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person referred to, (b) each Person that beneficially owns or holds,
directly or indirectly, 5% or more of any class of voting Equity Interests of
the Person referred to, (c) each Person, 5% or more of the voting Equity
Interests of which is beneficially owned or held, directly or indirectly, by the
Person referred to, and (d) each of such Person's officers, directors, joint
venturers and partners. For these purposes, the term "control" (including the
terms "controlled by" and "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of the Person in question.

"Agency Security" means a Mortgage-backed Security issued or guaranteed by
Fannie Mae, Freddie Mac or Ginnie Mae.

"Agreement" means this , either as originally executed or as it may be amended,
restated, renewed or replaced.

"Appraised Property Value" means with respect to an interest in real property,
the then current fair market value of the real property and any improvements on
it as of recent date determined in accordance with Title XI of FIRREA by a
qualified appraiser who is a member of the American Institute of Real Estate
Appraisers or other group of professional appraisers.

"Approved Custodian" means a pool custodian or other Person that Lender deems
acceptable, in its sole discretion, to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that has issued
a Purchase Commitment for those Mortgage Loans.

"Audited Statement Date" means the date of Borrower's most recent audited
financial statements (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under this Agreement.

"Bank One" means Bank One, National Association, or any successor bank.

"Bank One Prime Rate" means, as of any date of determination, the highest prime
rate quoted by Bank One and most recently published by Bloomberg L.P. If the
prime rate for Bank One is not quoted or published for any period, then during
that period the term "Bank One Prime Rate" means the highest prime rate
published in the most recent edition of The Wall Street Journal in its regular
column entitled "Money Rates."

"Borrower" has the meaning set forth in the first paragraph of this Agreement.

"Business Day" means any day other than Saturday, Sunday or any other day on
which national banking associations are closed for business.

"Buydown" has the meaning set forth in Section 3.4.

"Calendar Quarter" means the 3 month period beginning on each January 1, April
1, July 1 or October 1.

"Cash and Cash Equivalents" means, with respect to any person at any date, the
sum of the following unrestricted and unencumbered assets of such person on such
date: cash (not including restricted cash), funds on deposit in any Bank located
in the United States (not including the aggregate amount payable under all
checks or other documentary drafts issued by Borrower and not yet presented for
payment), investment grade commercial paper, money market funds, and high grade
marketable securities with a maturity of 270 days or less, in all cases that
qualify as "cash or cash equivalents" on a balance sheet of such Person prepared
in accordance with GAAP.

"Cash Collateral Account" means a demand deposit account maintained at the
Funding Bank in Lender's name and designated for receipt of the proceeds of the
sale or other disposition of Collateral.

"Check Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Borrower's name and under the control of Lender for clearing
checks written by Borrower to fund Mortgage Loans funded by Warehousing
Advances.

"Closing Date" has the meaning set forth in the Recitals to this Agreement.

"Collateral" has the meaning set forth in Section 4.1.

"Collateral Documents" means, with respect to each Mortgage Loan, (a) the
Mortgage Note, the Mortgage and all other documents including, if applicable,
any Security Agreement, executed in connection with or relating to the Mortgage
Loan; (b) as applicable, the original lender's ALTA Policy of Title Insurance or
its equivalent, documents evidencing the FHA Commitment to Insure, the VA
Guaranty or private mortgage insurance, the appraisal, the Regulation Z
statement, the environmental assessment, the engineering report, certificates of
casualty or hazard insurance, credit information on the maker of the Mortgage
Note, the HUD-1 or corresponding purchase advice; (c) any other document listed
in Exhibit B; and (d) any other document that is customarily desired for
inspection or transfer incidental to the purchase of any Mortgage Note by an
Investor or that is customarily executed by the seller of a Mortgage Note to an
Investor.

"Committed Purchase Price" means for an Eligible Loan (a) the dollar price as
set forth in the Purchase Commitment or, if the price is not expressed in
dollars, the product of the Mortgage Note Amount multiplied by the price
(expressed as a percentage) as set forth in the Purchase Commitment for the
Eligible Loan, or (b) if the Eligible Loan is to be used to back an Agency
Security, the dollar price as set forth in a Purchase Commitment or, if the
price is not expressed in dollars the product of the Mortgage Note Amount
multiplied by the price (expressed as a percentage) as set forth in the Purchase
Commitment for the Agency Security.

"Compliance Certificate" means a certificate executed on behalf of Borrower by
its chief financial officer or its treasurer or by another officer approved by
Lender, substantially in the form of Exhibit E.

"Credit Score" means a mortgagor's overall consumer credit rating, represented
by a single numeric credit score using the Fair, Isaac consumer credit scoring
system, provided by a credit repository acceptable to Lender and the Investor
that issued the Purchase Commitment covering the related Mortgage Loan (if a
Purchase Commitment is required by Exhibit H).

"Current Assets" means a Person's (and, if applicable, that Person's
Subsidiaries, on a consolidated basis) assets that in the regular course of
business will be readily and quickly realized, or converted into cash, all in
accordance with GAAP, within 1 year. Current Assets include (a) cash, (b)
temporary investments, (c) Mortgage Loans and Mortgage- backed Securities held
for sale (net of any loan loss reserves), (d) accounts and accrued interest
receivable (net of allowance for doubtful accounts) and (e) servicing advances
made on behalf of mortgagors, but exclude (x) loans and advances to or
receivables due from shareholders, directors, officers, employees or Affiliates,
(y) all deferred assets, other than prepaid items for insurance, taxes and rents
and (z) any properties or assets located outside the continental United States
and Canada.

"Current Liabilities" means a Person's (and, if applicable, that Person's
Subsidiaries, on a consolidated basis) liabilities, or any portion of a Person's
liabilities, the maturity of which will not extend beyond 1 year from the date
of determination.

"Current Ratio" means the ratio of a Person's Current Assets to Current
Liabilities.

"Debt" means (a) all indebtedness or other obligations of a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) that, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet of that Person on the date of
determination, plus (b) all indebtedness or other obligations of that Person
(and, if applicable, that Person's Subsidiaries, on a consolidated basis) for
borrowed money or for the deferred purchase price of property or services. For
purposes of calculating a Person's Debt, Subordinated Debt not due within 1 year
of that date may be excluded from that Person's indebtedness.

"Default" means the occurrence of any event or existence of any condition that,
but for the giving of Notice or the lapse of time, would constitute an Event of
Default.

"Default Rate" means, for any Warehousing Advance, the Interest Rate applicable
to that Warehousing Advance plus 4% per annum. If no Interest Rate is applicable
to a Warehousing Advance, "Default Rate" means, for that Warehousing Advance,
the highest Interest Rate then applicable to any outstanding Warehousing Advance
plus 4% per annum.

"Depository Benefit" means the compensation received by Lender, directly or
indirectly, as a result of Borrower's maintenance of Eligible Balances with a
Designated Bank.

"Designated Bank" means any bank designated by Lender as a Designated Bank, but
only for as long as Lender has an agreement under which Lender receives
Depository Benefits from that bank.

"Designated Bank Charges" means any fees, interest or other charges that would
otherwise be payable to a Designated Bank in connection with Eligible Balances
maintained at the Designated Bank, including deposit insurance premiums, service
charges and any other charges that may be imposed by governmental authorities
from time to time.

"Discontinued Loan" has the meaning set forth in the GMAC-RFC Client Guide.

"Earnings Allowance" has the meaning set forth in Section 3.1(b).

"Earnings Credit" has the meaning set forth in Section 3.1(b).

"Electronic Advance Request" means an electronic transmission through RFConnects
Delivery containing the same information as Exhibit A to this Agreement.

"Electronic Tracking Agreement" means an Electronic Tracking Agreement, on the
form prescribed by Lender, among Borrower, Lender, MERS and MERCORP, Inc.

"Eligible Balances" means all funds of or maintained by Borrower (and, if
applicable, Borrower's Subsidiaries) in demand deposit or time deposit accounts
at a Designated Bank, minus balances to support float, reserve requirements and
any other reductions that may be imposed by governmental authorities from time
to time.

"Eligible Loan" means a Single Family Mortgage Loan that satisfies the
conditions and requirements set forth in Exhibit H.

"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a Purchase
Commitment covering the Agency Security to be issued on the basis of that
certification and (c) the Agency Security will be delivered to Lender.

"Equity Interests" means all shares, interests, participations or other
equivalents, however, designated, of or in a Person (other than a natural
person), whether or not voting, including common stock, membership interests,
warrants, preferred stock, convertible debentures and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
of the foregoing.

"ERISA" means the Employee Retirement Income Security Act of 1974 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"ERISA Affiliate" means any trade or business (whether or not incorporated) that
is a member of a group of which Borrower is a member and that is treated as a
single employer under Section 414 of the Internal Revenue Code.

"Event of Default" means any of the conditions or events set forth in
Section 10.1.

"Excess Buydown" has the meaning set forth in Section 3.4.

"Exchange Act" means the Securities Exchange Act of 1934 and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Fair Market Value" means, at any time for an Eligible Loan or a related Agency
Security (if the Eligible Loan is to be used to back an Agency Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered by a Purchase Commitment from Fannie Mae or Freddie Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase Commitment from an Investor, or (b) otherwise, the
market price for such Eligible Loan or Agency Security, determined by Lender
based on market data for similar Mortgage Loans or Agency Securities and such
other criteria as Lender deems appropriate in its sole discretion.

"Fannie Mae" means Fannie Mae, a corporation created under the laws of the
United States, and any successor corporation or other entity.

"FHA" means the Federal Housing Administration and any successor agency or other
entity.

"FICA" means the Federal Insurance Contributions Act and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules and regulations.

"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 and all rules and regulations promulgated under that statute, as
amended, and any successor statute, rules, and regulations.

"First Mortgage" means a Mortgage that constitutes a first Lien on the real
property and improvements described in or covered by that Mortgage.

"First Mortgage Loan" means a Mortgage Loan secured by a First Mortgage.

"Freddie Mac" means Freddie Mac, a corporation created under the laws of the
United States, and any successor corporation or other entity.

"Funding Bank" means Bank One or any other bank designated by Lender as a
Funding Bank.

"Funding Bank Agreement" means a letter agreement on the form prescribed by
Lender between the Funding Bank and Borrower authorizing Lender's access to the
Operating Account and the Check Disbursement Account.

"GAAP" means generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and in statements and pronouncements of the
Financial Accounting Standards Board, or in opinions, statements or
pronouncements of any other entity approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

"Ginnie Mae" means the Government National Mortgage Association, an agency of
the United States government, and any successor agency or other entity.

"GMAC-RFC Client Guide" means the applicable loan purchase guide issued by
Lender, as the same may be amended or replaced.

"Government Mortgage Loan" means a closed- end First Mortgage Loan that is
either HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a Title I
Mortgage Loan) or VA guaranteed.

"Hedging Arrangements" means, with respect to any Person, any agreements or
other arrangements (including interest rate swap agreements, interest rate cap
agreements and forward sale agreements) entered into to protect that Person
against changes in interest rates or the market value of assets.

"High LTV Mortgage Loan" has the meaning set forth in Exhibit H.

"HUD" means the Department of Housing and Urban Development, and any successor
agency or other entity.

"HUD 203(K) Mortgage Loan" means an FHA-insured closed-end First Mortgage Loan
to an individual obligor the proceeds of which will be used for the purpose of
rehabilitating and repairing the related single family property, and which
satisfies the definition of "rehabilitation loan" in 24 C.F.R. 203.50(a)

"Indemnified Liabilities" has the meaning set forth in Section 11.2.

"Indemnitees" has the meaning set forth in Section 11.2.

"Interest Rate" means, for any Warehousing Advance, the floating rate of
interest specified for that Warehousing Advance in Exhibit H.

"Interim Statement Date" means the date of the most recent unaudited financial
statements of Borrower (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under this Agreement.

"Internal Revenue Code" means the Internal Revenue Code of 1986, Title 26 of the
United States Code, and all rules, regulations and interpretations issued under
those statutory provisions, as amended, and any subsequent or successor federal
income tax law or laws, rules, regulations and interpretations.

"Investment Company Act" means the Investment Company Act of 1940 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Investor" means Fannie Mae, Freddie Mac or a financially responsible private
institution that Lender deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans.

"Lender" has the meaning set forth in the first paragraph of this Agreement.

"Leverage Ratio" means the ratio of a Person's Debt to Tangible Net Worth. For
purposes of calculating a Person's Leverage Ratio, Debt arising under Hedging
Arrangements, to the extent of assets arising under those Hedging Arrangements,
may be excluded from that Person's Debt.

"LIBOR" means, for each week, the rate of interest per annum that is equal to
the arithmetic mean of the U.S. Dollar London Interbank Offered Rates for 1
month periods of certain U.S. banks as of 11:00 a.m. (London time) on the first
Business Day of each week on which the London Interbank market is open, as
published by Bloomberg L.P. If those interest rates are not offered or published
for any period, then during that period LIBOR means the London Interbank Offered
Rate for 1 month periods as published in The Wall Street Journal in its regular
column entitled "Money Rates" on the first Business Day of each week on which
the London Interbank market is open.

"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 of such an agreement and any
agreement to give any security interest).

"Loan Documents" means this Agreement, the Warehousing Note, any agreement of
Borrower relating to Subordinated Debt, and each other document, instrument or
agreement executed by Borrower in connection with any of those documents,
instruments and agreements, as originally executed or as any of the same may be
amended, restated, renewed or replaced.

"Loan Package Fee " has the meaning set forth in Section 3.5.

"Loan-to-Value Ratio" means, for any Mortgage Loan, the ratio of (a) the maximum
amount that may be borrowed under the Mortgage Loan (whether or not borrowed) at
the time of origination, plus the Mortgage Note Amounts of all other Mortgage
Loans secured by senior or pari passu Liens on the related property, to (b) the
Appraised Property Value of the related property.

"Manufactured Home" means a structure that is built on a permanent chassis
(steel frame) with the wheel assembly necessary for transportation in one or
more sections to a permanent site or semi-permanent site.

"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System, as amended.

"MERS" means Mortgage Electronic Registrations Systems, Inc. and any successor
entity.

"Miscellaneous Fees and Charges" means the miscellaneous fees set forth on
Lender's fee schedule attached as Exhibit I and all miscellaneous disbursements,
charges and expenses incurred by or on behalf of Lender for the handling and
administration of Warehousing Advances and Collateral, including costs for
Uniform Commercial Code, tax lien and judgment searches conducted by Lender,
filing fees, charges for wire transfers and check processing charges, charges
for security delivery fees, charges for overnight delivery of Collateral to
Investors, recording fees, Funding Bank service fees and overdraft charges and
Designated Bank Charges. Upon not less than 3 Business Days' prior Notice to
Borrower, Lender may modify Exhibit I and the fees set forth in it to conform to
current Lender practices and, as so modified, the revised Exhibit I will become
part of this Agreement.

"Mortgage" means a mortgage or deed of trust on real property that is improved
and substantially completed (including real property to which a Manufactured
Home has been affixed in a manner such that the Lien of a mortgage or deed of
trust would attach to the Manufactured Home under applicable real property law).

"Mortgage-backed Securities" means securities that are secured or otherwise
backed by Mortgage Loans.

"Mortgage Loan" means any loan evidenced by a Mortgage Note and secured by a
Mortgage and, if applicable, a Security Agreement.

"Mortgage Note" means a promissory note secured by one or more Mortgages and, if
applicable, one or more Security Agreements.

"Mortgage Note Amount" means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or not an
additional amount is available to be drawn under that Mortgage Note).

"Mortgage Pool" means a pool of one or more Pledged Loans on the basis of which
a Mortgage-backed Security is to be issued.

"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, to which either Borrower or any ERISA Affiliate of
Borrower has any obligation with respect to its employees.

"Non-Usage Fee" has the meaning set forth in Section 3.4.

"Notices" has the meaning set forth in Section 11.1.

"Obligations" means all indebtedness, obligations and liabilities of Borrower to
Lender and Lender's Subsidiaries (whether now existing or arising after the date
of this Agreement, voluntary or involuntary, joint or several, direct or
indirect, absolute or contingent, liquidated or unliquidated, or decreased or
extinguished and later increased and however created or incurred), including
Borrower's obligations and liabilities to Lender under the Loan Documents and
disbursements made by Lender for Borrower's account.

"Operating Account" means a demand deposit account maintained at the Funding
Bank in Borrower's name and designated for funding that portion of each Eligible
Loan not funded by a Warehousing Advance made against that Eligible Loan and for
returning any excess payment from an Investor for a Pledged Loan or Pledged
Security.

"Overdraft Advance" has the meaning set forth in Section 3.7.

"Participant" has the meaning set forth in Section 11.8.

"Person" means and includes natural persons, corporations, limited liability
companies, limited liability partnerships, limited 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 those governments.

"Plan" means each employee benefit plan (whether in existence on the date of
this Agreement or established after that date), as that term is defined in
Section 3 of ERISA, maintained for the benefit of directors, officers or
employees of Borrower or any ERISA Affiliate.

"Pledged Assets" means, collectively, Pledged Loans and Pledged Securities.

"Pledged Hedging Accounts" has the meaning set forth in Section 4.1 (g).

"Pledged Hedging Arrangements" has the meaning set forth in Section 4.1 (g).

"Pledged Loans" has the meaning set forth in Section 4.1 (b).

"Pledged Securities" has the meaning set forth in Section 4.1 (c).

"Prime Mortgage Loan" has the meaning set forth in Exhibit H.

"Prohibited Transaction" has the meanings set forth for such term in Section
4975 of the Internal Revenue Code and Section 406 of ERISA.

"Purchase Commitment" means a written commitment, in form and substance
satisfactory to Lender, issued in favor of Borrower by an Investor under which
that Investor commits to purchase Mortgage Loans or Mortgage-backed Securities.

"Rating Agency" means any nationally recognized statistical rating organization
that in the ordinary course of its business rates Mortgage-backed Securities..

"Release Amount" has the meaning set forth in Section 4.3(f).

"Restriction List" and "Restriction Lists" means each and every list of Persons
to whom the Government of the United States prohibits or otherwise restricts the
provision of financial services. For the purposes of this Agreement, Restriction
Lists include the list of Specifically Designated Nationals and Blocked Persons
established pursuant to Executive Order 13224 (September 23, 2001) and
maintained by the Office of Foreign Assets Control, U.S. Department of the
Treasury, current as of the day the Restriction List is used for purposes of
comparison in accordance with the requirements of this Agreement.

"RFC Mortgage Loan" means a Mortgage Loan covered by a Purchase Commitment
issued by Lender.

"RFConnects Delivery" means Lender's proprietary service to support the
electronic exchange of information between Lender and Borrower, including
Warehousing Advance Requests, shipping requests, payoff requests, wire transfer
instructions, security delivery instructions, activity reports and exception
reports.

"RFConnects Pledge Agreement" means an agreement (on the then current form
prescribed by Lender) granting Lender a security interest in Mortgage Loans for
which Borrower has requested Warehousing Advances using RFConnects Delivery.

"RFC Forward Commitment" means any present or future forward commitment or other
agreement between Lender (or an Affiliate of Lender) and Borrower relating to
the purchase and sale of single family Mortgage Loans.

"RFC Mortgage Loan" means a Mortgage Loan covered by a Purchase Commitment
issued by Lender.

"Second Mortgage" means a Mortgage that constitutes a second Lien on the real
property and improvements described in or covered by that Mortgage.

"Second Mortgage Loan" means a Mortgage Loan secured by a Second Mortgage.

"Security Agreement" means a security agreement or other agreement that creates
a Lien on personal property, including furniture, fixtures and equipment, to
secure repayment of a Mortgage Loan.

"Servicing Contract" means, with respect to any Person, the arrangement, whether
or not in writing, under which that Person has the right to service Mortgage
Loans.

"Servicing Portfolio" means, as to any Person, the unpaid principal balance of
Mortgage Loans serviced by that Person under Servicing Contracts, minus the
principal balance of all Mortgage Loans that are serviced by that Person for
others under subservicing arrangements.

"Single Family Mortgage Loan" means a Mortgage Loan secured by a Mortgage on
improved real property on which is located a 1-to-4 family residence.

"Statement Date" means the Audited Statement Date or the Interim Statement Date,
as applicable.

"Sublimit" means the aggregate amount of Warehousing Advances (expressed as a
dollar amount or as a percentage of the Warehousing Commitment Amount) that is
permitted to be outstanding at any one time against a specific type of Eligible
Loan.

"Subordinated Debt" means (a) all indebtedness of Borrower for borrowed money
that is effectively subordinated in right of payment to all present and future
Obligations either (1) under a Subordination of Debt Agreement on the form
prescribed by Lender or (2) otherwise on terms acceptable to Lender, and
(b) solely for purposes of Section 8.5, all indebtedness of Borrower that is
required to be subordinated by Sections 5.1 (b) and 7.11.

"Subprime Mortgage Loan" has the meaning set forth in Exhibit H.

"Subsidiary" means any corporation, partnership, association or other business
entity in which more than 50% of the shares of stock or other ownership
interests having voting power for the election of directors, managers, trustees
or other Persons performing similar functions is at the time owned or controlled
by any Person either directly or indirectly through one or more Subsidiaries of
that Person.

"Tangible Net Worth" means the excess of a Person's (and, if applicable, that
Person's Subsidiaries, on a consolidated basis) total assets over total
liabilities as of the date of determination, each determined in accordance with
GAAP applied in a manner consistent with the financial statements referred to in
Section 5.1 (a)(6), plus that portion of Subordinated Debt not due within 1 year
of that date. For purposes of calculating a Person's Tangible Net Worth,
advances or loans to shareholders, directors, officers, employees or Affiliates,
investments in Affiliates, assets pledged to secure any liabilities not included
in the Debt of that Person, intangible assets, those other assets that would be
deemed by HUD to be non- acceptable in calculating adjusted net worth in
accordance with its requirements in effect as of that date, as those
requirements appear in the "Consolidated Audit Guide for Audits of HUD
Programs," and other assets Lender deems unacceptable, in its sole discretion,
must be excluded from that Person's total assets.

"Third Party Originated Loan" means a Mortgage Loan originated and funded by a
third party (other than with funds provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.

"Title I Mortgage Loan" means an FHA co-insured closed-end First Mortgage Loan
or Second Mortgage Loan that is underwritten in accordance with HUD underwriting
standards for the Title I Property Improvement Program set forth in, and that is
reported for insurance under, the Mortgage Insurance Program authorized and
administered under Title I of the National Housing Act of 1934, as amended, and
the regulations related to that statute

"Trust Receipt" means a trust receipt in a form approved by and under which
Lender may deliver any document relating to the Collateral to Borrower for
correction or completion.

"Unused Portion" has the meaning set forth in Section 3.4.

"Used Portion" has the meaning set forth in Section 3.4.

"Warehouse Period" means, for any Eligible Loan, the maximum number of days a
Warehousing Advance against that type of Eligible Loan may remain outstanding as
set forth in Exhibit H.

"Warehousing Advance" means a disbursement by Lender under Section 1.1.

"Warehousing Advance Request" has the meaning set forth in Section 2.1.

"Warehousing Collateral Value" means, as of any date of determination, (a) with
respect to any Eligible Loan, the lesser of (1) the amount of any Warehousing
Advance made, or that could be made, against such Eligible Loan under Exhibit H
or (2) an amount equal to the Advance Rate for the applicable type of Eligible
Loan multiplied by the Fair Market Value of such Eligible Loan; (b) if Eligible
Loans have been exchanged for Agency Securities, the lesser of (1) the amount of
any Warehousing Advances outstanding against the Eligible Loans backing the
Agency Securities or (2) an amount equal to the Advance Rates for the applicable
types of Eligible Loans backing the Agency Securities multiplied by the Fair
Market Value of the Agency Securities; and (c) with respect to cash, the amount
of the cash.

"Warehousing Commitment" means the obligation of Lender to make Warehousing
Advances to Borrower under Section 1.1.

"Warehousing Commitment Amount" means .

"Warehousing Fee" has the meaning set forth in Section 3.5.

"Warehousing Maturity Date" has the meaning set forth in Section 1.2.

"Warehousing Note" has the meaning set forth in Section 1.3.

"Weighted Average Committed Purchase Price" means the weighted average of the
Committed Purchase Prices of the unfilled Purchase Commitments (expressed as a
percentage) for Mortgage Loans or Mortgage- backed Securities of the same type,
interest rate and term.

"Wet/Received Period" means the period of time from the date a Warehousing
Advance is made against a Pledged Loan until the earlier of (a) the date the
Pledged Loan is shipped by Lender to (i) an Investor for purchase under a
Purchase Commitment, (ii) a custodian for the Investor, or (iii) a pool
custodian for inclusion in a Mortgage Pool; or (b) the date the Warehousing
Advance against such Pledged Loan is paid in full.

"Wet Settlement Advance" means with respect to any Warehousing Advance, the time
from the date the Warehousing Advance is made until the date of Lender's receipt
of the Collateral Documents required by Article 2 and the Exhibits and documents
referenced in that Article.

"Wire Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Lender's name for clearing wire transfers requested by Borrower
to fund Warehousing Advances.

"Wire Fee" has the meaning set forth in Section 3.5.

Other Definitional Provisions; Terms of Construction

Accounting terms not otherwise defined in this Agreement have the meanings given
to those terms under GAAP.

Defined terms may be used in the singular or the plural, as the context
requires.

All references to time of day mean the then applicable time in Chicago,
Illinois, unless otherwise expressly provided.

References to Sections, Exhibits, Schedules and like references are to Sections,
Exhibits, Schedules and the like of this Agreement unless otherwise expressly
provided.

The words "include," "includes" and "including" are deemed to be followed by the
phrase "without limitation."

Unless the context in which it is used otherwise clearly requires, the word "or"
has the inclusive meaning represented by the phrase "and/or."

All incorporations by reference of provisions from other agreements are
incorporated as if such provisions were fully set forth into this Agreement, and
include all necessary definitions and related provisions from those other
agreements. All provisions from other agreements incorporated into this
Agreement by reference survive any termination of those other agreements until
the Obligations of Borrower under this Agreement and the Warehousing Note are
irrevocably paid in full and the Warehousing Commitment is terminated.

All references to the Uniform Commercial Code shall be deemed to be references
to the Uniform Commercial Code in effect on the date of this Agreement in the
applicable jurisdiction.

Unless the context in which it is used otherwise clearly requires, all
references to days, weeks and months mean calendar days, weeks and months.

 

End of Article 12

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

,

a

 

By: Matt Roberts

Its: CFO

   

 

 

RESIDENTIAL FUNDING CORPORATION,

a Delaware Corporation

 

 

By: Mitchell K. Nomura

Its: Director

 

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